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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1781 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1781

To provide for a demonstration program to reduce frequent use of health 
services by Medicaid beneficiaries with chronic illnesses by providing 
      coordinated care management and community support services.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            October 14, 2009

Mrs. Shaheen (for herself, Mr. Brown, and Mr. Menendez) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL

 
To provide for a demonstration program to reduce frequent use of health 
services by Medicaid beneficiaries with chronic illnesses by providing 
      coordinated care management and community support services.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Reducing Emergency Department 
Utilization through Coordination and Empowerment Demonstration Program 
Act'' or the ``REDUCE Demonstration Program''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Chronic condition.--The term ``chronic condition'' 
        means a chronic medical condition that is life-threatening or 
        may result in permanent disability, including--
                    (A) asthma;
                    (B) cancer;
                    (C) chronic obstructive pulmonary disease;
                    (D) congestive heart failure or arrhythmia;
                    (E) diabetes;
                    (F) HIV/AIDS;
                    (G) liver disease;
                    (H) post-traumatic stress disorder;
                    (I) renal failure;
                    (J) rheumatologic disease;
                    (K) severe mental illness;
                    (L) substance abuse disorder;
                    (M) thromboembolic disease;
                    (N) traumatic brain injury resulting in cognitive 
                impairment;
                    (O) chronic pain; and
                    (P) any other chronic medical condition that has 
                been identified by a State and approved by the 
                Secretary for inclusion under the REDUCE demonstration 
                program.
            (2) Frequent user of health services.--The term ``frequent 
        user of health services'' means an individual who uses the 
        emergency department, is admitted to the hospital, or uses 
        other inpatient services frequently.
            (3) Medicaid.--The term ``Medicaid'' means the Federal and 
        State medical assistance program established under title XIX of 
        the Social Security Act (42 U.S.C. 1396 et seq.).
            (4) Participating state.--The term ``participating State'' 
        means a State with an approved application (as described in 
        section 3(b)(1)) that has entered into an agreement with the 
        Secretary to conduct a REDUCE demonstration program.
            (5) REDUCE demonstration program.--The term ``REDUCE 
        demonstration program'' means a program described in section 3 
        that is conducted pursuant to an agreement between the 
        Secretary and a participating State.
            (6) Safety net hospital.--The term ``safety net hospital'' 
        means a hospital with a low-income utilization rate greater 
        than 25 percent (as defined under section 1923(b)(3) of the 
        Social Security Act (42 U.S.C. 1396r-4(b)(3)));
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (8) State.--The term ``State'' has the meaning given that 
        term for purposes of Medicaid.
            (9) Targeted medicaid beneficiary.--
                    (A) In general.--The term ``targeted Medicaid 
                beneficiary'' means an individual who has--
                            (i) attained age 19 and is eligible for 
                        medical assistance under a State plan or waiver 
                        under Medicaid;
                            (ii) been diagnosed with 2 or more chronic 
                        conditions;
                            (iii) been identified by a participating 
                        State as a frequent user of health services; 
                        and
                            (iv) been identified by a participating 
                        State as likely to benefit from participation 
                        in the REDUCE demonstration program (pursuant 
                        to the needs-based criteria described in 
                        section 3(c)(3)).
                    (B) Voluntary participation.--A targeted Medicaid 
                beneficiary may participate in the REDUCE demonstration 
                program on a voluntary basis and may terminate 
                participation at any time.

SEC. 3. REDUCE DEMONSTRATION PROGRAM.

    (a) In General.--The Secretary shall establish the REDUCE 
demonstration program under which the Secretary shall enter into 
agreements with States to provide for the development, implementation, 
and evaluation of innovative approaches to coordinated care management 
and increased access to community support services for targeted 
Medicaid beneficiaries in order to reduce hospital admissions and the 
use of emergency health care services.
    (b) Application and Agreements.--
            (1) Application.--A State seeking to participate in the 
        REDUCE demonstration program shall submit to the Secretary, in 
        such form and manner as the Secretary shall require, an 
        application that, in addition to such other information as the 
        Secretary may require, contains--
                    (A) a description of the proposed demonstration 
                program, including the information specified in 
                paragraphs (2) through (4) of subsection (c); and
                    (B) a plan for ensuring continuity of services for 
                targeted Medicaid beneficiaries who are participating 
                in the program on such date that the demonstration 
                program ceases to be conducted in the State.
            (2) Agreement.--
                    (A) In general.--Not later than 12 months after the 
                date of enactment of this Act, the Secretary shall 
                enter into agreements with not more than 10 States to 
                conduct the REDUCE demonstration program in accordance 
                with the requirements of this section.
                    (B) Duration.--An agreement entered into by the 
                Secretary and a State to conduct a REDUCE demonstration 
                program shall be for a period of 5 years.
    (c) Demonstration Program Requirements.--
            (1) Individualized care plans.--
                    (A) In general.--A REDUCE demonstration program 
                shall be designed to improve the health outcomes for 
                targeted Medicaid beneficiaries participating in the 
                program, reduce hospital admissions and frequent usage 
                of emergency care services, and reduce associated costs 
                under Medicaid by--
                            (i) identifying health care providers that 
                        provide integration of primary care and 
                        behavioral health services through co-location 
                        of such services or use of multi-disciplinary 
                        integrated treatment teams that work 
                        collaboratively to provide comprehensive and 
                        evidence-based treatment, rehabilitation, and 
                        support services for targeted Medicaid 
                        beneficiaries;
                            (ii) providing targeted Medicaid 
                        beneficiaries with an individualized care plan 
                        (developed in consultation with the beneficiary 
                        and the beneficiary's support staff, medical 
                        care providers, and family) that provides for 
                        flexible services that are based on an 
                        examination of the beneficiary's individual 
                        care needs (as determined through application 
                        of needs-based criteria under paragraph (3)); 
                        and
                            (iii) providing access to a care management 
                        team that--
                                    (I) includes, at a minimum--
                                            (aa) a physician, physician 
                                        assistant, or nurse 
                                        practitioner;
                                            (bb) a social worker; and
                                            (cc) a community health 
                                        worker (as licensed or defined 
                                        by the participating State); 
                                        and
                                    (II) provides health care services, 
                                coordination of primary and specialty 
                                care, and assistance with social 
                                services in a home or shelter setting.
                    (B) Physician, physician assistant, or nurse 
                practitioner.--For purposes of the care management team 
                described under subparagraph (A)(iii), such team shall 
                include a physician or, if a physician is not 
                available, a physician assistant or nurse practitioner 
                who may provide such health care services as are within 
                their authorized scope of practice (as determined by 
                the participating State).
                    (C) Best practices.--Delivery of health care 
                services provided pursuant to an individualized care 
                plan (as described in subparagraph (A)(ii)) shall be 
                determined based upon best practices and research 
                regarding--
                            (i) effective strategies for improving 
                        health outcomes (including behavioral health 
                        outcomes) and quality of life; and
                            (ii) cost-effective methods for delivery of 
                        health care services.
            (2) State plan and projections.--
                    (A) In general.--A participating State shall 
                provide the Secretary with a proposal for the 
                development and implementation of the REDUCE 
                demonstration program that includes--
                            (i) a projection of the number of targeted 
                        Medicaid beneficiaries that the State expects 
                        to participate in the REDUCE demonstration 
                        program; and
                            (ii) identification of targeted Medicaid 
                        beneficiaries through individual assessment and 
                        analysis of data from Medicaid claims, hospital 
                        records, or other informational sources to 
                        identify beneficiaries that have--
                                    (I) engaged in frequent use of 
                                emergency, inpatient, or crisis 
                                services; or
                                    (II) exhibited identified risk 
                                factors that indicate the probability 
                                of frequent use of emergency, 
                                inpatient, or crisis services;
                            (iii) a strategy for outreach to targeted 
                        Medicaid beneficiaries to provide 
                        individualized health care services in order to 
                        reduce hospital admissions and prevent frequent 
                        use of emergency, inpatient, or crisis 
                        services; and
                            (iv) criteria for selection of health care 
                        providers (including behavioral health care 
                        providers) that have demonstrated their 
                        experience and capacity to effectively engage 
                        and serve individuals that--
                                    (I) have been diagnosed with 2 or 
                                more chronic conditions; or
                                    (II) exhibit other risk factors 
                                identified by the State.
                    (B) Gainsharing.--Subject to approval by the 
                Secretary, a participating State may develop and 
                establish a gainsharing arrangement among health care 
                providers participating in the REDUCE demonstration 
                program to allow such providers to retain a share of 
                any savings generated through the demonstration program 
                in order to encourage improved outcomes and increased 
                efficiency.
                    (C) Limitation.--A participating State may, on a 
                statewide or regional basis, provide for a limit on the 
                total number of targeted Medicaid beneficiaries that 
                may be eligible for services under the REDUCE 
                demonstration program and may establish a waiting list 
                for such services.
                    (D) Priority considerations.--
                            (i) In general.--In reviewing criteria 
                        established by a participating State for 
                        selection of health care providers (as 
                        described in subparagraph (A)(iv)), the 
                        Secretary shall give priority to a State that 
                        includes in such selection--
                                    (I) safety net providers, including 
                                public hospitals, federally qualified 
                                health centers (as described under 
                                section 1905(l)(2)(B) of the Social 
                                Security Act (42 U.S.C. 
                                1396d(i)(2)(B))), and community mental 
                                health centers (as described under 
                                section 1861(ff)(3)(B) of such Act (42 
                                U.S.C. 1395x(ff)(3)(B)));
                                    (II) health provider coalitions 
                                that--
                                            (aa) have a geographic, 
                                        community-based focus;
                                            (bb) are based out of--

                                                    (AA) a federally 
                                                qualified health 
                                                center;

                                                    (BB) an university 
                                                or academic medical 
                                                center;

                                                    (CC) a hospital 
                                                (including a safety net 
                                                hospital);

                                                    (DD) a private 
                                                entity whose purpose is 
                                                to improve access to 
                                                community health care 
                                                services for high-risk 
                                                individuals and those 
                                                requiring primary care 
                                                services; or

                                                    (EE) a similar 
                                                organization; and

                                            (cc) have agreements with 
                                        not less than 2 hospitals, a 
                                        housing agency, a mental health 
                                        provider, and not less than 2 
                                        primary care physicians within 
                                        the local community; and
                                    (III) programs that have 
                                demonstrated a capacity to share, 
                                combine, and analyze health data for 
                                frequent users of health services 
                                through data sharing agreements with 
                                multiple local health institutions.
                            (ii) Reimbursement.--The Secretary shall 
                        not waive any requirements under title XIX of 
                        the Social Security Act relating to services 
                        provided by, or reimbursement provided to, 
                        federally qualified health centers for purposes 
                        of the REDUCE demonstration program. To the 
                        extent that participation by a federally 
                        qualified health center or safety net hospital 
                        in the REDUCE demonstration program requires 
                        the center or hospital to provide services that 
                        are not covered under the State plan, the 
                        participating State shall be required to fully 
                        reimburse the center or hospital for the cost 
                        of such services.
            (3) Needs-based criteria.--A participating State shall 
        establish needs-based criteria for determining the eligibility 
        of individuals for participation in the REDUCE demonstration 
        program. The criteria shall provide for consideration of an 
        individual's medical history, including--
                    (A) the number and severity of chronic conditions;
                    (B) functional impairments;
                    (C) care and support needs;
                    (D) any recent patterns of excessive utilization of 
                emergency or inpatient care in a hospital or similar 
                facility; and
                    (E) other factors which the State determines are 
                associated with increased hospital admissions or 
                frequent utilization of emergency, inpatient, or crisis 
                services (including housing status and other social 
                determinants of health status).
            (4) Covered services.--
                    (A) In general.--A participating State shall 
                provide the Secretary with a comprehensive list of 
                services that shall be available to targeted Medicaid 
                beneficiaries under the REDUCE demonstration program. 
                Such services shall be established and targeted to 
                reduce frequent utilization of health services by 
                targeted Medicaid beneficiaries.
                    (B) Additional services.--Upon request by the State 
                and subject to approval by the Secretary, a 
                participating State may provide additional services 
                under the demonstration program that are not covered 
                under the State plan upon a showing that such services 
                will reduce avoidable utilization of health services by 
                targeted Medicaid beneficiaries.
    (d) Waiver.--Except as provided in subsection (c)(2)(D)(ii), the 
Secretary may waive such requirements of titles XI, XVIII, and XIX of 
the Social Security Act as the Secretary determines necessary for a 
participating State to conduct the REDUCE demonstration program.

SEC. 4. EVALUATION AND REPORT.

    (a) Evaluation.--
            (1) In general.--Subject to paragraph (2), the Secretary 
        shall, by grant, contract, or interagency agreement, provide 
        for an evaluation of the REDUCE demonstration programs 
        conducted by participating States under this Act, including an 
        assessment of whether the demonstration programs--
                    (A) reduce avoidable hospitalizations or other 
                institutional admissions (including at intermediate 
                care facilities for the mentally retarded or nursing 
                facilities);
                    (B) reduce the use of ambulances, hospital 
                emergency health services, detoxification treatments, 
                or emergency mental health services;
                    (C) reduce expenditures under the Medicaid program; 
                and
                    (D) improve the overall health status and 
                satisfaction of the targeted Medicaid beneficiaries 
                participating in the program (including improvements in 
                housing status and other social determinants of health 
                status).
            (2) Evaluation requirements.--The evaluation shall be 
        conducted by an entity that has demonstrated experience with 
        care improvement programs. Such evaluation shall be conducted 
        on an ongoing basis throughout the duration of the 
        demonstration program.
    (b) Report.--Not later than 12 months after completion of all 
REDUCE demonstration programs conducted by participating States under 
this Act, the Secretary shall prepare and submit a final report on the 
results of the evaluation to Congress that contains recommendations for 
such legislative and administrative actions as the Secretary determines 
appropriate to develop additional programs to provide coordinated care 
for individuals with complex medical and behavioral health conditions 
and reduce avoidable hospital readmissions and the use of emergency 
health care services.

SEC. 5. FUNDING.

    (a) Manner of Payment.--The Secretary shall pay each participating 
State a quarterly payment for expenditures for providing a covered 
service (as specified in section 3(c)(4)) to targeted Medicaid 
beneficiaries that participate in the REDUCE demonstration program 
conducted by the State. Such payments shall be made in the same manner 
as other quarterly payments are made to the State under section 1903(a) 
of the Social Security Act (42 U.S.C. 1396b(a)).
    (b) Matching Rate.--Subject to subsection (c), the Secretary shall 
pay a participating State for State expenditures described in 
subsection (a)--
            (1) for fiscal years 2011 or 2012, 100 percent of the 
        amount of such expenditures for the fiscal year; and
            (2) for fiscal years 2013, 2014, or 2015, 75 percent of the 
        amount of such expenditures for the fiscal year.
    (c) Limitation on Funds.--The total amount of payments under this 
Act shall not exceed $150,000,000 for the period of fiscal years 2011 
through 2015.
    (d) Appropriation.--
            (1) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated to the Secretary 
        to carry out this Act, $150,000,000 for the period of fiscal 
        years 2011 through 2015, of which $15,000,000 shall be used for 
        the evaluation required under section 4.
            (2) Budget authority.--This Act constitutes budget 
        authority in advance of appropriations Acts and represents the 
        obligation of the Secretary to provide for the payment of 
        amounts provided under this Act.
                                 <all>
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