49–010 

Calendar No. 187 

114TH CONGRESS REPORT " ! SENATE 1st Session 114–108 

A BILL TO AMEND TITLE XI OF THE SOCIAL SECURITY 

ACT TO CLARIFY WAIVER AUTHORITY REGARDING PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY 

(PACE PROGRAMS) 

JULY 30, 2015.—Ordered to be printed 

Mr. HATCH, from the Committee on Finance, 

submitted the following 

R E P O R T 

[To accompany S. 1362] 

The Committee on Finance, to which was referred the bill (S. 

1362) to amend title XI of the Social Security Act to clarify waiver 

authority regarding programs of all-inclusive care for the elderly 

(PACE programs), having considered the same, reports favorably 

thereon with an amendment and recommends that the bill, as 

amended, do pass. 

I. LEGISLATIVE BACKGROUND 

The Committee on Finance, to which was referred the bill (S. 

1362) to amend title XI of the Social Security Act to clarify waiver 

authority regarding programs of all-inclusive care for the elderly 

(PACE programs), having considered the same, reports favorably 

thereon with an amendment and recommends that the bill, as 

amended, do pass. 

Background and need for legislative action 

The Program of All-Inclusive Care for the Elderly (PACE) is an 

integrated care program that provides comprehensive long-term 

services and supports to individuals aged 55 and older who require 

an institutional level of care, many of whom are eligible for both 

Medicare and Medicaid and are known as dual-eligible beneficiaries. The PACE program was established in the Social Security 

Act (SSA) in section 1894 for Medicare and section 1934 for Medicaid. Setting up a PACE program is optional for states under MedVerDate Sep 11 2014 05:57 Aug 01, 2015 Jkt 049010 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\SR108.XXX SR108

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icaid. In 2014, 31 states had PACE programs. PACE providers receive capitated payments from both Medicaid and Medicare to 

cover an enrollee’s benefits. In many cases, the PACE program enables enrollees to receive services through an adult day health center rather than through an institution such as a nursing facility. 

The Committee recognizes the success of the PACE model in providing coordinated health care to a population with high medical 

and social needs. The Committee believes changes to the PACE 

model (either through an expansion of eligibility standards and/or 

changes to administrative requirements that would enable greater 

enrollment) should be tested by the Centers for Medicare and Medicaid Services. Under current law, such testing is not permitted. 

II. EXPLANATION OF THE BILL 

PRESENT LAW

Section 1115A of the Social Security Act (SSA) gives the Secretary of the Department of Health and Human Services (the Secretary) the authority to waive certain requirements found in the 

SSA ‘‘as may be necessary’’ to test ‘‘innovative payment and delivery models to reduce program expenditures.’’ Under section 1115A, 

the Secretary is not authorized to waive any PACE requirements 

under title XIX of the SSA. 

REASONS FOR CHANGE

The Committee recognizes the success of the PACE model in providing coordinated health care to a population with high medical 

and social needs. The Committee believes changes to the PACE 

model (either through an expansion of eligibility standards and/or 

changes to administrative requirements that would enable greater 

enrollment) should be tested by the Centers for Medicare and Medicaid Services. Under current law, such testing is not permitted. 

EXPLANATION OF PROVISION

This bill would amend section 1115A(d)(1) of the SSA to add section 1934 to the waiver authority, authorizing the Department of 

Health and Human services to waive applicable general and Medicaid requirements in order to conduct demonstration projects that 

involve PACE. S. 1362 as amended clarifies that within the Secretary’s statutory authority to waive certain requirements, the Secretary cannot waive the requirement to offer ‘‘all items and services 

covered’’ under Medicare and Medicaid without limitation to PACE 

program enrollees. Further, under S. 1362 as amended, the Secretary cannot waive certain Medicaid requirements that pertain to 

enrollment and disenrollment from PACE programs. 

III. BUDGET EFFECTS OF THE BILL 

A. COMMITTEE ESTIMATES

In compliance with paragraph 11(a) of rule XXVI of the Standing 

Rules of the Senate, the following statement is made concerning 

the estimated budget effects of the revenue provisions of the 

‘‘PACE Innovation Act of 2015’’ as reported. 


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It is uncertain whether the Secretary would decide to exercise 

the new authority provided under the legislation to pursue projects 

through CMMI that differ from those she would have tested using 

existing authority. However, if the Secretary decided to test a different project under the legislation than she otherwise would have, 

then in CBO’s judgment that project would have roughly the same 

chances of success or failure. Thus, the decision to use the new authority to test a PACE model instead of some other model would 

result in no significant change in direct spending, CBO estimates. 

Because enacting the bill could affect direct spending, pay-as-yougo procedures apply. Enacting the bill would not affect revenues. 

Source: Estimate provided by the staff of the Congressional 

Budget Office. 

B. BUDGET AUTHORITY AND TAX EXPENDITURES

Budget authority 

In compliance with section 308(a)(1) of the Congressional Budget 

and Impoundment Control Act of 1974 (‘‘Budget Act’’), the Committee states that the bill as reported does not involve increased 

budget authority. 

Tax expenditures 

In compliance with section 308(a)(1) of the Budget Act, the Committee states that the bill does not involve increased tax expenditures. 

C. CONSULTATION WITH CONGRESSIONAL BUDGET OFFICE

In accordance with section 403 of the Budget Act, the Committee 

advises that the Congressional Budget Office has submitted a 

statement on the bill. 

S. 1362—PACE Innovation Act of 2015 

S. 1362 would authorize the Secretary of Health and Human 

Services (HHS) to waive requirements under section 1934 of the 

Social Security Act when designing and testing models under the 

Center for Medicare and Medicaid Innovation (CMMI). Section 

1934 authorizes the Program of All-Inclusive Care for the Elderly 

(PACE), and establishes features of the program including payment 

rates and conditions of participation. Under current law, CMMI 

lacks authority to waive those features included in section 1934, 

and has limited flexibility to test changes to administering the 

PACE program. The legislation would give the Secretary authority 

to change features of PACE for the purposes of testing whether 

they improve the program. 

Under current law, CMMI has broad authority to conduct other 

demonstration projects under the Medicare and Medicaid programs 

(outside of PACE). CBO expects that some of those projects will 

succeed in reducing federal spending without reducing quality of 

care, and others will not, but CBO is unable to predict which 

projects will succeed. 

It is uncertain whether the Secretary would decide to exercise 

the new authority provided under the legislation to pursue projects 

through CMMI that differ from those she would have tested using 

existing authority. However, if the Secretary decided to test a difVerDate Sep 11 2014 05:57 Aug 01, 2015 Jkt 049010 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\SR108.XXX SR108

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ferent project under the legislation than she otherwise would have, 

then in CBO’s judgment that project would have roughly the same 

chances of success or failure. Thus, the decision to use the new authority to test a PACE model instead of some other model would 

result in no significant change in direct spending, CBO estimates. 

Because enacting the bill could affect direct spending, pay-as-yougo procedures apply. Enacting the bill would not affect revenues. 

S. 1362 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on state, local, or tribal governments. 

The CBO staff contact for this estimate is Paul Masi. The estimate was approved by Holly Harvey, Deputy Assistant Director for 

Budget Analysis. 

IV. VOTES OF THE COMMITTEE 

In compliance with paragraph 7(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee states that, with a majority 

present, the ‘‘PACE Innovation Act of 2015,’’ as modified, was ordered favorably reported on June 24, 2015 as follows: 

Final Passage of ‘‘The PACE Innovation Act of 2015’’—approved, 

as modified, by voice vote. 

V. REGULATORY IMPACT AND OTHER MATTERS 

A. REGULATORY IMPACT

Pursuant to paragraph 11(b) of rule XXVI of the Standing Rules 

of the Senate, the Committee makes the following statement concerning the regulatory impact that might be incurred in carrying 

out the provisions of the bill as amended. 

Impact on individuals and businesses, personal privacy and paperwork 

The bill is not expected to impose additional administrative requirements or regulatory burdens on individuals. The bill is expected to reduce administrative requirements and regulatory burdens on some businesses. 

The provisions of the bill do not impact personal privacy. 

B. UNFUNDED MANDATES STATEMENT

This information is provided in accordance with section 423 of 

the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104–4). 

The Committee has determined that the bill does not contain any 

private sector mandates. The Committee has determined that the 

bill contains no intergovernmental mandate. 


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VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS 

REPORTED 

In the opinion of the Committee, it is necessary in order to expedite the business of the Senate, to dispense with the requirements 

of paragraph 12 of rule XXVI of the Standing Rules of the Senate 

(relating to the showing of changes in existing law made by the bill 

as reported by the Committee). 

Æ 


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