SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Adult Day Care Services Act 
of 2005''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Adult day care offers services, including medical care, 
        rehabilitation therapies, dignified assistance with activities 
        of daily living, nutrition therapy, health monitoring, social 
        interaction, stimulating activities, and transportation, to 
        seniors who are frail, physically challenged, or cognitively 
        impaired at no extra cost to the medicare program.
            (2) The care given at adult day care centers provides 
        seniors and their familial caregivers support that is critical 
        to keeping the senior in the family home.
            (3) One quarter of all workers provide some form of elder 
        care for those age 65 and older, and by 2007, the number of 
        households involved in caregiving to persons age 50 or older 
        could reach 39 million.
            (4) The pool of potential family caregivers, who are 
        primarily women and who provide an estimated $257,000,000,000 
        in ``free'' services annually, is dwindling, from 11 potential 
        caregivers for each person needing care today to a projected 4 
        to 1 ratio in 2050.
            (5) Caregiving families tend to have lower incomes than 
        non-caregiving families, and the average caregiver loses 
        $659,139 in wages, pension benefits, and Social Security 
        benefits over a lifetime.
            (6) The loss in productivity in United States businesses 
        attributable to caregivers for aging or ailing seniors ranges 
        from $11,000,000,000 to $29,000,000,000 annually.
            (7) Adult day care centers, located in every State in the 
        United States and the District of Columbia, serve as quality 
        health options to treat our Nation's elderly population, which 
        is about to dramatically increase with the aging of the baby 
        boomer generation.

SEC. 3. MEDICARE COVERAGE OF SUBSTITUTE ADULT DAY CARE SERVICES.

    (a) Substitute Adult Day Care Services Benefit.--
            (1) In general.--Section 1861(m) of the Social Security Act 
        (42 U.S.C. 1395x(m)) is amended--
                    (A) in the matter preceding paragraph (1), by 
                inserting ``or paragraph (8)'' after ``paragraph (7)'';
                    (B) in paragraph (6), by striking ``and'' at the 
                end;
                    (C) in paragraph (7), by adding ``and'' at the end; 
                and
                    (D) by inserting after paragraph (7), the following 
                new paragraph:
            ``(8) substitute adult day care services (as defined in 
        subsection (bbb));''.
            (2) Substitute adult day care services defined.--Section 
        1861 of the Social Security Act (42 U.S.C. 1395x) is amended by 
        adding at the end the following new subsection:

     ``Substitute Adult Day Care Services; Adult Day Care Facility

    ``(bbb)(1)(A) The term `substitute adult day care services' means 
the items and services described in subparagraph (B) that are furnished 
to an individual by an adult day care facility as a part of a plan 
under subsection (m) that substitutes such services for a portion of 
the items and services described in subparagraph (B)(i) furnished by a 
home health agency under the plan, as determined by the physician 
establishing the plan.
    ``(B) The items and services described in this subparagraph are the 
following items and services:
            ``(i) Items and services described in paragraphs (1) 
        through (7) of subsection (m).
            ``(ii) Transportation of the individual to and from the 
        adult day care facility in connection with any such item or 
        service.
            ``(iii) Meals.
            ``(iv) A program of supervised activities (that meets such 
        criteria as the Secretary determines appropriate) designed to 
        promote physical and mental health that are furnished to the 
        individual by the adult day care facility in a group setting 
        for a period of not fewer than 4 and not greater than 12 hours 
        per day.
            ``(v) A medication management program (as defined in 
        subparagraph (C)).
    ``(C) For purposes of subparagraph (B)(v), the term `medication 
management program' means a program of education and services (that 
meets such criteria as the Secretary determines appropriate) to 
minimize--
            ``(i) unnecessary or inappropriate use of prescription 
        drugs; and
            ``(ii) adverse events due to unintended prescription drug-
        to-drug interactions.
    ``(2)(A) Except as provided in subparagraph (B), the term `adult 
day care facility' means a public agency or private organization, or a 
subdivision of such an agency or organization, that--
            ``(i) is engaged in providing skilled nursing services and 
        other therapeutic services directly or under arrangement with a 
        home health agency;
            ``(ii) meets such standards established by the Secretary to 
        assure quality of care and such other requirements as the 
        Secretary finds necessary in the interest of the health and 
        safety of individuals who are furnished services in the 
        facility;
            ``(iii) provides the items and services described in 
        paragraph (1)(B); and
            ``(iv) meets the requirements of paragraphs (2) through (8) 
        of subsection (o).
    ``(B) The Secretary may waive the requirement of a surety bond 
under paragraph (7) of subsection (o) in the case of an agency or 
organization that provides a comparable surety bond under State law.
    ``(C) For purposes of payment for home health services consisting 
of substitute adult day care services furnished under this title, any 
reference to a home health agency is deemed to be a reference to an 
adult day care facility.
    ``(D) Nothing in this paragraph shall be construed as prohibiting a 
home health agency from--
            ``(i) establishing a substitute adult day care facility; or
            ``(ii) providing services under arrangements with a 
        substitute adult day care facility.''.
            (3) Conforming amendments.--Sections 1814(a)(2)(C) and 
        1835(a)(2)(A)(i) of the Social Security Act (42 U.S.C. 
        1395f(a)(2)(C) and 1395n(a)(2)(A)(i)) are each amended by 
        striking ``section 1861(m)(7)'' and inserting ``paragraph (7) 
        or (8) of section 1861(m)''.
    (b) Payment for Substitute Adult Day Care Services Under the Home 
Health Prospective Payment System.--Section 1895 of the Social Security 
Act (42 U.S.C. 1395fff) is amended--
            (1) in the first sentence of paragraph (b)(1), by inserting 
        after ``home health services'' the following: ``or home health 
        services consisting of substitute adult day care services.''; 
        and
            (2) by adding at the end the following new subsection:
    ``(f) Payment Rate and Limitation on Payment for Substitute Adult 
Day Care Services.--
            ``(1) Payment rate.--
                    ``(A) In general.--The Secretary shall determine 
                each component (as defined by the Secretary) of 
                substitute adult day care services (under section 
                1861(bbb)(1)(B)(i)) furnished to an individual under 
                the plan of care established under section 1861(m) with 
                respect to such services.
                    ``(B) Estimation of payment amount.--The Secretary 
                shall estimate the amount that would otherwise be 
                payable under this section for all home health services 
                under that plan of care other than substitute adult day 
                care services for a week or other period specified by 
                the Secretary.
                    ``(C) Amount of payment.--The total amount payable 
                for home health services consisting of substitute adult 
                day care services under such plan of care is equal to 
                the amount estimated to be payable under subparagraph 
                (B) furnished under the plan by a home health agency.
            ``(2) Limitations.--
                    ``(A) In general.--With respect to home health 
                services consisting of substitute adult day care 
                services, no payment may be made under this section for 
                home health services consisting of substitute adult day 
                care services described in clauses (ii) through (v) of 
                section 1861(bbb)(1)(B).
                    ``(B) Limitation on balance billing.--An adult day 
                care facility shall accept as payment in full for 
                substitute adult day care services (including those 
                services described in clauses (ii) through (v) of 
                section 1861(bbb)(1)(B)) furnished by the facility to 
                an individual entitled to benefits under this title the 
                amount of payment provided under this section for home 
                health services consisting of substitute adult day care 
                services.''.
    (c) Consolidated Billing.--Section 1862(a) of the Social Security 
Act (42 U.S.C. 1395y(a)), is amended--
            (1) by striking ``or'' at the end of paragraph (21);
            (2) by striking the period at the end of paragraph (22) and 
        inserting ``; or''; and
            (3) by inserting after paragraph (22) the following new 
        paragraph:
            ``(23) which are substitute adult day care services for 
        which payment may be made under section 1895(f) and which are 
        furnished to an individual by a substitute adult day care 
        facility pursuant to a plan of care established under section 
        1861(m) with respect to such services, by an entity other than 
        the substitute adult day care facility, unless the services are 
        furnished under arrangements (as defined in section 1861(w)(1)) 
        with the entity made by the substitute adult day care 
        facility.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after January 1, 2006.
    (e) Relationship to Demonstration Project.--(1) Notwithstanding 
subsection (d) of section 703 of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (Public Law 108-173; 117 
Stat. 2336), the Secretary may terminate the demonstration project for 
medical adult day care services established under such section 703, but 
in no case earlier than the date on which the Secretary has fully 
implemented the preceding provisions of this section. The Secretary 
shall ensure that individuals receiving medical adult day care services 
under such demonstration program do not experience any interruption in 
the receipt of such services by reason of the termination of the 
demonstration program.
    (2) Section 703 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2336) is 
amended by striking subsection (h).
Medicare Adult Day Care Services Act of 2005 - Amends title XVIII (Medicare) of the Social Security Act to provide for Medicare coverage of substitute adult day care services.
To amend title XVIII of the Social Security Act to provide for coverage under the Medicare Program of substitute adult day care services.