II

104TH CONGRESS

1ST SESSION S. 85

To provide for home and community-based services for individuals with

disabilities, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JANUARY 4, 1995

Mr. FEINGOLD (for himself and Mr. SIMON) introduced the following bill;

which was read twice and referred to the Committee on Finance

A BILL

To provide for home and community-based services for

individuals with disabilities, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Long-Term Care Reform and Deficit Reduction Act of

6 1995’’.

7 (b) TABLE OF CONTENTS.—The table of contents of

8 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—HOME AND COMMUNITY-BASED SERVICES FOR

INDIVIDUALS WITH DISABILITIES
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Sec. 101. State programs for home and community-based services for individuals with disabilities.

Sec. 102. State plans.

Sec. 103. Individuals with disabilities defined.

Sec. 104. Home and community-based services covered under State plan.

Sec. 105. Cost sharing.

Sec. 106. Quality assurance and safeguards.

Sec. 107. Advisory groups.

Sec. 108. Payments to States.

Sec. 109. Appropriations; allotments to States.

Sec. 110. Federal evaluations.

Sec. 111. Information and technical assistance grants relating to development

of hospital linkage programs.

TITLE II—PROVISIONS RELATING TO MEDICARE

Sec. 201. Recapture of certain health care subsidies received by high-income individuals.

Sec. 202. Imposition of 10 percent copayment on home health services under

medicare.

Sec. 203. Reduction in payments for capital-related costs for inpatient hospital

services.

Sec. 204. Elimination of formula-driven overpayments for certain outpatient

hospital services.

Sec. 205. Reduction in routine cost limits for home health services.

1 TITLE I—HOME AND COMMU2 NITY-BASED SERVICES FOR

3 INDIVIDUALS WITH DISABIL4 ITIES

5 SEC. 101. STATE PROGRAMS FOR HOME AND COMMUNITY6 BASED SERVICES FOR INDIVIDUALS WITH

7 DISABILITIES.

8 (a) IN GENERAL.—Each State that has a plan for

9 home and community-based services for individuals with

10 disabilities submitted to and approved by the Secretary

11 under section 102(b) may receive payment in accordance

12 with section 108.

13 (b) ENTITLEMENT TO SERVICES.—Nothing in this

14 title shall be construed to create a right to services for
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1 individuals or a requirement that a State with an approved

2 plan expend the entire amount of funds to which it is enti3 tled under this title.

4 (c) DESIGNATION OF AGENCY.—Not later than 6

5 months after the date of enactment of this Act, the Sec6 retary shall designate an agency responsible for program

7 administration under this title.

8 SEC. 102. STATE PLANS.

9 (a) PLAN REQUIREMENTS.—In order to be approved

10 under subsection (b), a State plan for home and commu11 nity-based services for individuals with disabilities must

12 meet the following requirements:

13 (1) STATE MAINTENANCE OF EFFORT.—

14 (A) IN GENERAL.—A State plan under this

15 title shall provide that the State will, during

16 any fiscal year that the State is furnishing serv17 ices under this title, make expenditures of State

18 funds in an amount equal to the State mainte19 nance of effort amount for the year determined

20 under subparagraph (B) for furnishing the

21 services described in subparagraph (C) under

22 the State plan under this title or the State plan

23 under title XIX of the Social Security Act (42

24 U.S.C. 1396 et seq.).
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1 (B) STATE MAINTENANCE OF EFFORT

2 AMOUNT.—

3 (i) IN GENERAL.—The maintenance of

4 effort amount for a State for a fiscal year

5 is an amount equal to—

6 (I) for fiscal year 1997, the base

7 amount for the State (as determined

8 under clause (ii)) updated through the

9 midpoint of fiscal year 1997 by the

10 estimated percentage change in the

11 index described in clause (iii) during

12 the period beginning on October 1,

13 1995, and ending at that midpoint;

14 and

15 (II) for succeeding fiscal years,

16 an amount equal to the amount deter17 mined under this clause for the pre18 vious fiscal year updated through the

19 midpoint of the year by the estimated

20 percentage change in the index de21 scribed in clause (iii) during the 12-

22 month period ending at that midpoint,

23 with appropriate adjustments to re24 flect previous underestimations or

25 overestimations under this clause in
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1 the projected percentage change in

2 such index.

3 (ii) STATE BASE AMOUNT.—The base

4 amount for a State is an amount equal to

5 the total expenditures from State funds

6 made under the State plan under title XIX

7 of the Social Security Act (42 U.S.C. 1396

8 et seq.) during fiscal year 1995 with re9 spect to medical assistance consisting of

10 the services described in subparagraph (C).

11 (iii) INDEX DESCRIBED.—For pur12 poses of clause (i), the Secretary shall de13 velop an index that reflects the projected

14 increases in spending for services under

15 subparagraph (C), adjusted for differences

16 among the States.

17 (C) MEDICAID SERVICES DESCRIBED.—

18 The services described in this subparagraph are

19 the following:

20 (i) Personal care services (as de21 scribed in section 1905(a)(24) of the Social

22 Security Act (42 U.S.C. 1396d(a)(24))).

23 (ii) Home or community-based serv24 ices furnished under a waiver granted
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1 under subsection (c), (d), or (e) of section

2 1915 of such Act (42 U.S.C. 1396n).

3 (iii) Home and community care fur4 nished to functionally disabled elderly indi5 viduals under section 1929 of such Act (42

6 U.S.C. 1396t).

7 (iv) Community supported living ar8 rangements services under section 1930 of

9 such Act (42 U.S.C. 1396u).

10 (v) Services furnished in a hospital,

11 nursing facility, intermediate care facility

12 for the mentally retarded, or other institu13 tional setting specified by the Secretary.

14 (2) ELIGIBILITY.—

15 (A) IN GENERAL.—Within the amounts

16 provided by the State and under section 108 for

17 such plan, the plan shall provide that services

18 under the plan will be available to individuals

19 with disabilities (as defined in section 103(a))

20 in the State.

21 (B) INITIAL SCREENING.—The plan shall

22 provide a process for the initial screening of an

23 individual who appears to have some reasonable

24 likelihood of being an individual with disabil25 ities. Any such process shall require the provi-
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1 sion of assistance to individuals who wish to

2 apply but whose disability limits their ability to

3 apply. The initial screening and the determina4 tion of disability (as defined under section

5 103(b)(1)) shall be conducted by a public

6 agency.

7 (C) RESTRICTIONS.—

8 (i) IN GENERAL.—The plan may not

9 limit the eligibility of individuals with dis10 abilities based on—

11 (I) income;

12 (II) age;

13 (III) residential setting (other

14 than with respect to an institutional

15 setting, in accordance with clause

16 (ii)); or

17 (IV) other grounds specified by

18 the Secretary;

19 except that through fiscal year 2005, the

20 Secretary may permit a State to limit eligi21 bility based on level of disability or geog22 raphy (if the State ensures a balance be23 tween urban and rural areas).

24 (ii) INSTITUTIONAL SETTING.—The

25 plan may limit the eligibility of individuals
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1 with disabilities based on the definition of

2 the term ‘‘institutional setting’’, as deter3 mined by the State.

4 (D) CONTINUATION OF SERVICES.—The

5 plan must provide assurances that, in the case

6 of an individual receiving medical assistance for

7 home and community-based services under the

8 State medicaid plan under title XIX of the So9 cial Security Act (42 U.S.C. 1396 et seq.) as of

10 the date a State’s plan is approved under this

11 title, the State will continue to make available

12 (either under this plan, under the State medic13 aid plan, or otherwise) to such individual an ap14 propriate level of assistance for home and com15 munity-based services, taking into account the

16 level of assistance provided as of such date and

17 the individual’s need for home and community18 based services.

19 (3) SERVICES.—

20 (A) NEEDS ASSESSMENT.—Not later than

21 the end of the second year of implementation,

22 the plan or its amendments shall include the re23 sults of a statewide assessment of the needs of

24 individuals with disabilities in a format required

25 by the Secretary. The needs assessment shall
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1 include demographic data concerning the num2 ber of individuals within each category of dis3 ability described in this title, and the services

4 available to meet the needs of such individuals.

5 (B) SPECIFICATION.—Consistent with sec6 tion 104, the plan shall specify—

7 (i) the services made available under

8 the plan;

9 (ii) the extent and manner in which

10 such services are allocated and made avail11 able to individuals with disabilities; and

12 (iii) the manner in which services

13 under the plan are coordinated with each

14 other and with health and long-term care

15 services available outside the plan for indi16 viduals with disabilities.

17 (C) TAKING INTO ACCOUNT INFORMAL

18 CARE.—A State plan may take into account, in

19 determining the amount and array of services

20 made available to covered individuals with dis21 abilities, the availability of informal care. Any

22 individual plan of care developed under section

23 104(b)(1)(B) that includes informal care shall

24 be required to verify the availability of such

25 care.
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1 (D) ALLOCATION.—The State plan—

2 (i) shall specify how services under

3 the plan will be allocated among covered

4 individuals with disabilities;

5 (ii) shall attempt to meet the needs of

6 individuals with a variety of disabilities

7 within the limits of available funding;

8 (iii) shall include services that assist

9 all categories of individuals with disabil10 ities, regardless of their age or the nature

11 of their disabling conditions;

12 (iv) shall demonstrate that services

13 are allocated equitably, in accordance with

14 the needs assessment required under sub15 paragraph (A); and

16 (v) shall ensure that—

17 (I) the proportion of the popu18 lation of low-income individuals with

19 disabilities in the State that rep20 resents individuals with disabilities

21 who are provided home and commu22 nity-based services either under the

23 plan, under the State medicaid plan,

24 or under both, is not less than
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1 (II) the proportion of the popu2 lation of the State that represents in3 dividuals who are low-income individ4 uals.

5 (E) LIMITATION ON LICENSURE OR CER6 TIFICATION.—The State may not subject

7 consumer-directed providers of personal assist8 ance services to licensure, certification, or other

9 requirements that the Secretary finds not to be

10 necessary for the health and safety of individ11 uals with disabilities.

12 (F) CONSUMER CHOICE.—To the extent

13 feasible, the State shall follow the choice of an

14 individual with disabilities (or that individual’s

15 designated representative who may be a family

16 member) regarding which covered services to re17 ceive and the providers who will provide such

18 services.

19 (4) COST SHARING.—The plan shall impose cost

20 sharing with respect to covered services in accord21 ance with section 105.

22 (5) TYPES OF PROVIDERS AND REQUIREMENTS

23 FOR PARTICIPATION.—The plan shall specify—

24 (A) the types of service providers eligible

25 to participate in the program under the plan,
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1 which shall include consumer-directed providers

2 of personal assistance services, except that the

3 plan—

4 (i) may not limit benefits to services

5 provided by registered nurses or licensed

6 practical nurses; and

7 (ii) may not limit benefits to services

8 provided by agencies or providers certified

9 under title XVIII of the Social Security

10 Act (42 U.S.C. 1395 et seq.); and

11 (B) any requirements for participation ap12 plicable to each type of service provider.

13 (6) PROVIDER REIMBURSEMENT.—

14 (A) PAYMENT METHODS.—The plan shall

15 specify the payment methods to be used to re16 imburse providers for services furnished under

17 the plan. Such methods may include retrospec18 tive reimbursement on a fee-for-service basis,

19 prepayment on a capitation basis, payment by

20 cash or vouchers to individuals with disabilities,

21 or any combination of these methods. In the

22 case of payment to consumer-directed providers

23 of personal assistance services, including pay24 ment through the use of cash or vouchers, the

25 plan shall specify how the plan will assure com-
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1 pliance with applicable employment tax and

2 health care coverage provisions.

3 (B) PAYMENT RATES.—The plan shall

4 specify the methods and criteria to be used to

5 set payment rates for—

6 (i) agency administered services fur7 nished under the plan; and

8 (ii) consumer-directed personal assist9 ance services furnished under the plan, in10 cluding cash payments or vouchers to indi11 viduals with disabilities, except that such

12 payments shall be adequate to cover

13 amounts required under applicable employ14 ment tax and health care coverage provi15 sions.

16 (C) PLAN PAYMENT AS PAYMENT IN

17 FULL.—The plan shall restrict payment under

18 the plan for covered services to those providers

19 that agree to accept the payment under the

20 plan (at the rates established pursuant to sub21 paragraph (B)) and any cost sharing permitted

22 or provided for under section 105 as payment

23 in full for services furnished under the plan.

24 (7) QUALITY ASSURANCE AND SAFEGUARDS.—

25 The State plan shall provide for quality assurance
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1 and safeguards for applicants and beneficiaries in

2 accordance with section 106.

3 (8) ADVISORY GROUP.—The State plan shall—

4 (A) assure the establishment and mainte5 nance of an advisory group under section

6 107(b); and

7 (B) include the documentation prepared by

8 the group under section 107(b)(4).

9 (9) ADMINISTRATION AND ACCESS.—

10 (A) STATE AGENCY.—The plan shall des11 ignate a State agency or agencies to administer

12 (or to supervise the administration of) the plan.

13 (B) COORDINATION.—The plan shall speci14 fy how it will—

15 (i) coordinate services provided under

16 the plan, including eligibility prescreening,

17 service coordination, and referrals for indi18 viduals with disabilities who are ineligible

19 for services under this title with the State

20 medicaid plan under title XIX of the Social

21 Security Act (42 U.S.C. 1396 et seq.), ti22 tles V and XX of such Act (42 U.S.C. 701

23 et seq. and 1397 et seq.), programs under

24 the Older Americans Act of 1965 (42

25 U.S.C. 3001 et seq.), programs under the
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1 Developmental Disabilities Assistance and

2 Bill of Rights Act (42 U.S.C. 6000 et

3 seq.), programs under the Individuals with

4 Disabilities Education Act (20 U.S.C.

5 1400 et seq.), and any other Federal or

6 State programs that provide services or as7 sistance targeted to individuals with dis8 abilities; and

9 (ii) coordinate with health plans.

10 (C) ADMINISTRATIVE EXPENDITURES.—

11 Effective beginning with fiscal year 2005, the

12 plan shall contain assurances that not more

13 than 10 percent of expenditures under the plan

14 for all quarters in any fiscal year shall be for

15 administrative costs.

16 (D) INFORMATION AND ASSISTANCE.—The

17 plan shall provide for a single point of access to

18 apply for services under the State program for

19 individuals with disabilities. Notwithstanding

20 the preceding sentence, the plan may designate

21 separate points of access to the State program

22 for individuals under 22 years of age, for indi23 viduals 65 years of age or older, or for other

24 appropriate classes of individuals.
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1 (10) REPORTS AND INFORMATION TO SEC2 RETARY; AUDITS.—The plan shall provide that the

3 State will furnish to the Secretary—

4 (A) such reports, and will cooperate with

5 such audits, as the Secretary determines are

6 needed concerning the State’s administration of

7 its plan under this title, including the process8 ing of claims under the plan; and

9 (B) such data and information as the Sec10 retary may require in a uniform format as spec11 ified by the Secretary.

12 (11) USE OF STATE FUNDS FOR MATCHING.—

13 The plan shall provide assurances that Federal

14 funds will not be used to provide for the State share

15 of expenditures under this title.

16 (12) HEALTH CARE WORKER REDEPLOY17 MENT.—The plan shall provide for the following:

18 (A) Before initiating the process of imple19 menting the State program under such plan,

20 negotiations will be commenced with labor

21 unions representing the employees of the af22 fected hospitals or other facilities.

23 (B) Negotiations under subparagraph (A)

24 will address the following:
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1 (i) The impact of the implementation

2 of the program upon the workforce.

3 (ii) Methods to redeploy workers to

4 positions in the proposed system, in the

5 case of workers affected by the program.

6 (C) The plan will provide evidence that

7 there has been compliance with subparagraphs

8 (A) and (B), including a description of the re9 sults of the negotiations.

10 (13) TERMINOLOGY.—The plan shall adhere to

11 uniform definitions of terms, as specified by the Sec12 retary.

13 (b) APPROVAL OF PLANS.—The Secretary shall ap14 prove a plan submitted by a State if the Secretary deter15 mines that the plan—

16 (1) was developed by the State after a public

17 comment period of not less than 30 days; and

18 (2) meets the requirements of subsection (a).

19 The approval of such a plan shall take effect as of the

20 first day of the first fiscal year beginning after the date

21 of such approval (except that any approval made before

22 January 1, 1997, shall be effective as of January 1, 1997).

23 In order to budget funds allotted under this title, the Sec24 retary shall establish a deadline for the submission of such

25 a plan before the beginning of a fiscal year as a condition
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1 of its approval effective with that fiscal year. Any signifi2 cant changes to the State plan shall be submitted to the

3 Secretary in the form of plan amendments and shall be

4 subject to approval by the Secretary.

5 (c) MONITORING.—The Secretary shall annually

6 monitor the compliance of State plans with the require7 ments of this title according to specified performance

8 standards. In accordance with section 108(e), States that

9 fail to comply with such requirements may be subject to

10 a reduction in the Federal matching rates available to the

11 State under section 108(a) or the withholding of Federal

12 funds for services or administration until such time as

13 compliance is achieved.

14 (d) TECHNICAL ASSISTANCE.—The Secretary shall

15 ensure the availability of ongoing technical assistance to

16 States under this section. Such assistance shall include

17 serving as a clearinghouse for information regarding suc18 cessful practices in providing long-term care services.

19 (e) REGULATIONS.—The Secretary shall issue such

20 regulations as may be appropriate to carry out this title

21 on a timely basis.

22 SEC. 103. INDIVIDUALS WITH DISABILITIES DEFINED.

23 (a) IN GENERAL.—For purposes of this title, the

24 term ‘‘individual with disabilities’’ means any individual
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1 within one or more of the following categories of individ2 uals:

3 (1) INDIVIDUALS REQUIRING HELP WITH AC4 TIVITIES OF DAILY LIVING.—An individual of any

5 age who—

6 (A) requires hands-on or standby assist7 ance, supervision, or cueing (as defined in regu8 lations) to perform three or more activities of

9 daily living (as defined in subsection (d)); and

10 (B) is expected to require such assistance,

11 supervision, or cueing over a period of at least

12 90 days.

13 (2) INDIVIDUALS WITH SEVERE COGNITIVE OR

14 MENTAL IMPAIRMENT.—An individual of any age—

15 (A) whose score, on a standard mental sta16 tus protocol (or protocols) appropriate for

17 measuring the individual’s particular condition

18 specified by the Secretary, indicates either se19 vere cognitive impairment or severe mental im20 pairment, or both;

21 (B) who—

22 (i) requires hands-on or standby as23 sistance, supervision, or cueing with one or

24 more activities of daily living;
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1 (ii) requires hands-on or standby as2 sistance, supervision, or cueing with at

3 least such instrumental activity (or activi4 ties) of daily living related to cognitive or

5 mental impairment as the Secretary speci6 fies; or

7 (iii) displays symptoms of one or more

8 serious behavioral problems (that is on a

9 list of such problems specified by the Sec10 retary) that create a need for supervision

11 to prevent harm to self or others; and

12 (C) who is expected to meet the require13 ments of subparagraphs (A) and (B) over a pe14 riod of at least 90 days.

15 Not later than 2 years after the date of enactment

16 of this Act, the Secretary shall make recommenda17 tions regarding the most appropriate duration of dis18 ability under this paragraph.

19 (3) INDIVIDUALS WITH SEVERE OR PROFOUND

20 MENTAL RETARDATION.—An individual of any age

21 who has severe or profound mental retardation (as

22 determined according to a protocol specified by the

23 Secretary).

24 (4) YOUNG CHILDREN WITH SEVERE DISABIL25 ITIES.—An individual under 6 years of age who—
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1 (A) has a severe disability or chronic medi2 cal condition that limits functioning in a man3 ner that is comparable in severity to the stand4 ards established under paragraphs (1), (2), or

5 (3); and

6 (B) is expected to have such a disability or

7 condition and require such services over a pe8 riod of at least 90 days.

9 (5) STATE OPTION WITH RESPECT TO INDIVID10 UALS WITH COMPARABLE DISABILITIES.—Not more

11 than 2 percent of a State’s allotment for services

12 under this title may be expended for the provision of

13 services to individuals with severe disabilities that

14 are comparable in severity to the criteria described

15 in paragraphs (1) through (4), but who fail to meet

16 the criteria in any single category under such para17 graphs.

18 (b) DETERMINATION.—

19 (1) IN GENERAL.—In formulating eligibility cri20 teria under subsection (a), the Secretary shall estab21 lish criteria for assessing the functional level of dis22 ability among all categories of individuals with dis23 abilities that are comparable in severity, regardless

24 of the age or the nature of the disabling condition

25 of the individual. The determination of whether an
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1 individual is an individual with disabilities shall be

2 made by a public or nonprofit agency that is speci3 fied under the State plan and that is not a provider

4 of home and community-based services under this

5 title and by using a uniform protocol consisting of

6 an initial screening and a determination of disability

7 specified by the Secretary. A State may not impose

8 cost sharing with respect to a determination of dis9 ability. A State may collect additional information,

10 at the time of obtaining information to make such

11 determination, in order to provide for the assess12 ment and plan described in section 104(b) or for

13 other purposes.

14 (2) PERIODIC REASSESSMENT.—The determina15 tion that an individual is an individual with disabil16 ities shall be considered to be effective under the

17 State plan for a period of not more than 6 months

18 (or for such longer period in such cases as a signifi19 cant change in an individual’s condition that may af20 fect such determination is unlikely). A reassessment

21 shall be made if there is a significant change in an

22 individual’s condition that may affect such deter23 mination.

24 (c) ELIGIBILITY CRITERIA.—The Secretary shall re25 assess the validity of the eligibility criteria described in
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1 subsection (a) as new knowledge regarding the assess2 ments of functional disabilities becomes available. The

3 Secretary shall report to the Congress on its findings

4 under the preceding sentence as determined appropriate

5 by the Secretary.

6 (d) ACTIVITY OF DAILY LIVING DEFINED.—For pur7 poses of this title, the term ‘‘activity of daily living’’ means

8 any of the following: eating, toileting, dressing, bathing,

9 and transferring.

10 SEC. 104. HOME AND COMMUNITY-BASED SERVICES COV11 ERED UNDER STATE PLAN.

12 (a) SPECIFICATION.—

13 (1) IN GENERAL.—Subject to the succeeding

14 provisions of this section, the State plan under this

15 title shall specify—

16 (A) the home and community-based serv17 ices available under the plan to individuals with

18 disabilities (or to such categories of such indi19 viduals); and

20 (B) any limits with respect to such serv21 ices.

22 (2) FLEXIBILITY IN MEETING INDIVIDUAL

23 NEEDS.—Subject to subsection (e)(2), such services

24 may be delivered in an individual’s home, a range of
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1 community residential arrangements, or outside the

2 home.

3 (b) REQUIREMENT FOR NEEDS ASSESSMENT AND

4 PLAN OF CARE.—

5 (1) IN GENERAL.—The State plan shall provide

6 for home and community-based services to an indi7 vidual with disabilities only if the following require8 ments are met:

9 (A) COMPREHENSIVE ASSESSMENT.—

10 (i) IN GENERAL.—A comprehensive

11 assessment of an individual’s need for

12 home and community-based services (re13 gardless of whether all needed services are

14 available under the plan) shall be made in

15 accordance with a uniform, comprehensive

16 assessment tool that shall be used by a

17 State under this paragraph with the ap18 proval of the Secretary. The comprehensive

19 assessment shall be made by a public or

20 nonprofit agency that is specified under

21 the State plan and that is not a provider

22 of home and community-based services

23 under this title.

24 (ii) EXCEPTION.—The State may elect

25 to waive the provisions of clause (i) if—
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1 (I) with respect to any area of

2 the State, the State has determined

3 that there is an insufficient pool of

4 entities willing to perform comprehen5 sive assessments in such area due to

6 a low population of individuals eligible

7 for home and community-based serv8 ices under this title residing in the

9 area; and

10 (II) the State plan specifies pro11 cedures that the State will implement

12 in order to avoid conflicts of interest.

13 (B) INDIVIDUALIZED PLAN OF CARE.—

14 (i) IN GENERAL.—An individualized

15 plan of care based on the assessment made

16 under subparagraph (A) shall be developed

17 by a public or nonprofit agency that is

18 specified under the State plan and that is

19 not a provider of home and community20 based services under this title, except that

21 the State may elect to waive the provisions

22 of this sentence if, with respect to any area

23 of the State, the State has determined

24 there is an insufficient pool of entities will25 ing to develop individualized plans of care
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1 in such area due to a low population of in2 dividuals eligible for home and community3 based services under this title residing in

4 the area, and the State plan specifies pro5 cedures that the State will implement in

6 order to avoid conflicts of interest.

7 (ii) REQUIREMENTS WITH RESPECT

8 TO PLAN OF CARE.—A plan of care under

9 this subparagraph shall—

10 (I) specify which services in11 cluded under the individual plan will

12 be provided under the State plan

13 under this title;

14 (II) identify (to the extent pos15 sible) how the individual will be pro16 vided any services specified under the

17 plan of care and not provided under

18 the State plan;

19 (III) specify how the provision of

20 services to the individual under the

21 plan will be coordinated with the pro22 vision of other health care services to

23 the individual; and

24 (IV) be reviewed and updated

25 every 6 months (or more frequently if
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1 there is a change in the individual’s

2 condition).

3 The State shall make reasonable efforts to

4 identify and arrange for services described

5 in subclause (II). Nothing in this sub6 section shall be construed as requiring a

7 State (under the State plan or otherwise)

8 to provide all the services specified in such

9 a plan.

10 (C) INVOLVEMENT OF INDIVIDUALS.—The

11 individualized plan of care under subparagraph

12 (B) for an individual with disabilities shall—

13 (i) be developed by qualified individ14 uals (specified in subparagraph (B));

15 (ii) be developed and implemented in

16 close consultation with the individual (or

17 the individual’s designated representative);

18 and

19 (iii) be approved by the individual (or

20 the individual’s designated representative).

21 (c) REQUIREMENT FOR CARE MANAGEMENT.—

22 (1) IN GENERAL.—The State shall make avail23 able to each category of individuals with disabilities

24 care management services that at a minimum in25 clude—
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1 (A) arrangements for the provision of such

2 services; and

3 (B) monitoring of the delivery of services.

4 (2) CARE MANAGEMENT SERVICES.—

5 (A) IN GENERAL.—Except as provided in

6 subparagraph (B), the care management serv7 ices described in paragraph (1) shall be pro8 vided by a public or private entity that is not

9 providing home and community-based services

10 under this title.

11 (B) EXCEPTION.—A person who provides

12 home and community-based services under this

13 title may provide care management services if—

14 (i) the State determines that there is

15 an insufficient pool of entities willing to

16 provide such services in an area due to a

17 low population of individuals eligible for

18 home and community-based services under

19 this title residing in such area; and

20 (ii) the State plan specifies procedures

21 that the State will implement in order to

22 avoid conflicts of interest.

23 (d) MANDATORY COVERAGE OF PERSONAL ASSIST24 ANCE SERVICES.—The State plan shall include, in the

25 array of services made available to each category of indi-
29

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1 viduals with disabilities, both agency-administered and

2 consumer-directed personal assistance services (as defined

3 in subsection (h)).

4 (e) ADDITIONAL SERVICES.—

5 (1) TYPES OF SERVICES.—Subject to subsection

6 (f), services available under a State plan under this

7 title may include any (or all) of the following:

8 (A) Homemaker and chore assistance.

9 (B) Home modifications.

10 (C) Respite services.

11 (D) Assistive technology devices, as defined

12 in section 3(2) of the Technology-Related As13 sistance for Individuals With Disabilities Act of

14 1988 (29 U.S.C. 2202(2)).

15 (E) Adult day services.

16 (F) Habilitation and rehabilitation.

17 (G) Supported employment.

18 (H) Home health services.

19 (I) Transportation.

20 (J) Any other care or assistive services

21 specified by the State and approved by the Sec22 retary that will help individuals with disabilities

23 to remain in their homes and communities.
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1 (2) CRITERIA FOR SELECTION OF SERVICES.—

2 The State electing services under paragraph (1)

3 shall specify in the State plan—

4 (A) the methods and standards used to se5 lect the types, and the amount, duration, and

6 scope, of services to be covered under the plan

7 and to be available to each category of individ8 uals with disabilities; and

9 (B) how the types, and the amount, dura10 tion, and scope, of services specified, within the

11 limits of available funding, provide substantial

12 assistance in living independently to individuals

13 within each of the categories of individuals with

14 disabilities.

15 (f) EXCLUSIONS AND LIMITATIONS.—A State plan

16 may not provide for coverage of—

17 (1) room and board;

18 (2) services furnished in a hospital, nursing fa19 cility, intermediate care facility for the mentally re20 tarded, or other institutional setting specified by the

21 Secretary; or

22 (3) items and services to the extent coverage is

23 provided for the individual under a health plan or

24 the medicare program.
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1 (g) PAYMENT FOR SERVICES.—In order to pay for

2 covered services, a State plan may provide for the use of—

3 (1) vouchers;

4 (2) cash payments directly to individuals with

5 disabilities;

6 (3) capitation payments to health plans; and

7 (4) payment to providers.

8 (h) PERSONAL ASSISTANCE SERVICES.—

9 (1) IN GENERAL.—For purposes of this title,

10 the term ‘‘personal assistance services’’ means those

11 services specified under the State plan as personal

12 assistance services and shall include at least hands13 on and standby assistance, supervision, cueing with

14 activities of daily living, and such instrumental ac15 tivities of daily living as deemed necessary or appro16 priate, whether agency-administered or consumer-di17 rected (as defined in paragraph (2)). Such services

18 shall include services that are determined to be nec19 essary to help all categories of individuals with dis20 abilities, regardless of the age of such individuals or

21 the nature of the disabling conditions of such indi22 viduals.

23 (2) CONSUMER-DIRECTED.—For purposes of

24 this title:
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•S 85 IS

1 (A) IN GENERAL.—The term ‘‘consumer2 directed’’ means, with reference to personal as3 sistance services or the provider of such serv4 ices, services that are provided by an individual

5 who is selected and managed (and, at the op6 tion of the service recipient, trained) by the in7 dividual receiving the services.

8 (B) STATE RESPONSIBILITIES.—A State

9 plan shall ensure that where services are pro10 vided in a consumer-directed manner, the State

11 shall create or contract with an entity, other

12 than the consumer or the individual provider,

13 to—

14 (i) inform both recipients and provid15 ers of rights and responsibilities under all

16 applicable Federal labor and tax law; and

17 (ii) assume responsibility for providing

18 effective billing, payments for services, tax

19 withholding, unemployment insurance, and

20 workers’ compensation coverage, and act

21 as the employer of the home care provider.

22 (C) RIGHT OF CONSUMERS.—Notwith23 standing the State responsibilities described in

24 subparagraph (B), service recipients, and,

25 where appropriate, their designated representa-
33

•S 85 IS

1 tive, shall retain the right to independently se2 lect, hire, terminate, and direct (including man3 age, train, schedule, and verify services pro4 vided) the work of a home care provider.

5 (3) AGENCY ADMINISTERED.—For purposes of

6 this title, the term ‘‘agency-administered’’ means,

7 with respect to such services, services that are not

8 consumer-directed.

9 SEC. 105. COST SHARING.

10 (a) NO COST SHARING FOR POOREST.—

11 (1) IN GENERAL.—The State plan may not im12 pose any cost sharing for individuals with income (as

13 determined under subsection (d)) less than 150 per14 cent of the official poverty level applicable to a fam15 ily of the size involved (referred to in paragraph

16 (2)).

17 (2) OFFICIAL POVERTY LEVEL.—For purposes

18 of paragraph (1), the term ‘‘official poverty level ap19 plicable to a family of the size involved’’ means, for

20 a family for a year, the official poverty line (as de21 fined by the Office of Management and Budget, and

22 revised annually in accordance with section 673(2)

23 of the Community Services Block Grant Act (42

24 U.S.C. 9902(2)) applicable to a family of the size in25 volved.
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•S 85 IS

1 (b) SLIDING SCALE FOR REMAINDER.—

2 (1) REQUIRED COINSURANCE.—The State plan

3 shall impose cost sharing in the form of coinsurance

4 (based on the amount paid under the State plan for

5 a service)—

6 (A) at a rate of 10 percent for individuals

7 with disabilities with income not less than 150

8 percent, and less than 175 percent, of such offi9 cial poverty line (as so applied);

10 (B) at a rate of 15 percent for such indi11 viduals with income not less than 175 percent,

12 and less than 225 percent, of such official pov13 erty line (as so applied);

14 (C) at a rate of 25 percent for such indi15 viduals with income not less than 225 percent,

16 and less than 275 percent, of such official pov17 erty line (as so applied);

18 (D) at a rate of 30 percent for such indi19 viduals with income not less than 275 percent,

20 and less than 325 percent, of such official pov21 erty line (as so applied);

22 (E) at a rate of 35 percent for such indi23 viduals with income not less than 325 percent,

24 and less than 400 percent, of such official pov25 erty line (as so applied); and
35

•S 85 IS

1 (F) at a rate of 40 percent for such indi2 viduals with income equal to at least 400 per3 cent of such official poverty line (as so applied).

4 (2) REQUIRED ANNUAL DEDUCTIBLE.—The

5 State plan shall impose cost sharing in the form of

6 an annual deductible—

7 (A) of $100 for individuals with disabilities

8 with income not less than 150 percent, and less

9 than 175 percent, of such official poverty line

10 (as so applied);

11 (B) of $200 for such individuals with in12 come not less than 175 percent, and less than

13 225 percent, of such official poverty line (as so

14 applied);

15 (C) of $300 for such individuals with in16 come not less than 225 percent, and less than

17 275 percent, of such official poverty line (as so

18 applied);

19 (D) of $400 for such individuals with in20 come not less than 275 percent, and less than

21 325 percent, of such official poverty line (as so

22 applied);

23 (E) of $500 for such individuals with in24 come not less than 325 percent, and less than
36

•S 85 IS

1 400 percent, of such official poverty line (as so

2 applied); and

3 (F) of $600 for such individuals with in4 come equal to at least 400 percent of such offi5 cial poverty line (as so applied).

6 (c) RECOMMENDATION OF THE SECRETARY.—The

7 Secretary shall make recommendations to the States as

8 to how to reduce cost-sharing for individuals with extraor9 dinary out-of-pocket costs for whom the cost-sharing pro10 visions of this section could jeopardize their ability to take

11 advantage of the services offered under this title. The Sec12 retary shall establish a methodology for reducing the cost13 sharing burden for individuals with exceptionally high out14 of-pocket costs under this title.

15 (d) DETERMINATION OF INCOME FOR PURPOSES OF

16 COST SHARING.—The State plan shall specify the process

17 to be used to determine the income of an individual with

18 disabilities for purposes of this section. Such standards

19 shall include a uniform Federal definition of income and

20 any allowable deductions from income.

21 SEC. 106. QUALITY ASSURANCE AND SAFEGUARDS.

22 (a) QUALITY ASSURANCE.—

23 (1) IN GENERAL.—The State plan shall specify

24 how the State will ensure and monitor the quality of

25 services, including—
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•S 85 IS

1 (A) safeguarding the health and safety of

2 individuals with disabilities;

3 (B) setting the minimum standards for

4 agency providers and how such standards will

5 be enforced;

6 (C) setting the minimum competency re7 quirements for agency provider employees who

8 provide direct services under this title and how

9 the competency of such employees will be en10 forced;

11 (D) obtaining meaningful consumer input,

12 including consumer surveys that measure the

13 extent to which participants receive the services

14 described in the plan of care and participant

15 satisfaction with such services;

16 (E) establishing a process to receive, inves17 tigate, and resolve allegations of neglect or

18 abuse;

19 (F) establishing optional training programs

20 for individuals with disabilities in the use and

21 direction of consumer directed providers of per22 sonal assistance services;

23 (G) establishing an appeals procedure for

24 eligibility denials and a grievance procedure for
38

•S 85 IS

1 disagreements with the terms of an individual2 ized plan of care;

3 (H) providing for participation in quality

4 assurance activities; and

5 (I) specifying the role of the Long-Term

6 Care Ombudsman (under the Older Americans

7 Act of 1965 (42 U.S.C. 3001 et seq.)) and the

8 protection and advocacy system (established

9 under section 142 of the the Developmental

10 Disabilities Assistance and Bill of Rights Act

11 (42 U.S.C. 6042)) in assuring quality of serv12 ices and protecting the rights of individuals

13 with disabilities.

14 (2) ISSUANCE OF REGULATIONS.—Not later

15 than 1 year after the date of enactment of this Act,

16 the Secretary shall issue regulations implementing

17 the quality provisions of this subsection.

18 (b) FEDERAL STANDARDS.—The State plan shall ad19 here to Federal quality standards in the following areas:

20 (1) Case review of a specified sample of client

21 records.

22 (2) The mandatory reporting of abuse, neglect,

23 or exploitation.

24 (3) The development of a registry of provider

25 agencies or home care workers and consumer di-
39

•S 85 IS

1 rected providers of personal assistance services

2 against whom any complaints have been sustained,

3 which shall be available to the public.

4 (4) Sanctions to be imposed on States or pro5 viders, including disqualification from the program,

6 if minimum standards are not met.

7 (5) Surveys of client satisfaction.

8 (6) State optional training programs for infor9 mal caregivers.

10 (c) CLIENT ADVOCACY.—

11 (1) IN GENERAL.—The State plan shall provide

12 that the State will expend the amount allocated

13 under section 109(b)(2) for client advocacy activi14 ties. The State may use such funds to augment the

15 budgets of the Long-Term Care Ombudsman (under

16 the Older Americans Act of 1965 (42 U.S.C. 3001

17 et seq.) and the protection and advocacy system (es18 tablished under section 142 of the the Developmen19 tal Disabilities Assistance and Bill of Rights Act (42

20 U.S.C. 6042)) or may establish a separate and inde21 pendent client advocacy office in accordance with

22 paragraph (2) to administer a new program de23 signed to advocate for client rights.

24 (2) CLIENT ADVOCACY OFFICE.—
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1 (A) IN GENERAL.—A client advocacy office

2 established under this paragraph shall—

3 (i) identify, investigate, and resolve

4 complaints that—

5 (I) are made by, or on behalf of,

6 clients; and

7 (II) relate to action, inaction, or

8 decisions, that may adversely affect

9 the health, safety, welfare, or rights of

10 the clients (including the welfare and

11 rights of the clients with respect to

12 the appointment and activities of

13 guardians and representative payees),

14 of—

15 (aa) providers, or represent16 atives of providers, of long-term

17 care services;

18 (bb) public agencies; or

19 (cc) health and social service

20 agencies;

21 (ii) provide services to assist the cli22 ents in protecting the health, safety, wel23 fare, and rights of the clients;

24 (iii) inform the clients about means of

25 obtaining services provided by providers or
41

•S 85 IS

1 agencies described in clause (i)(II) or serv2 ices described in clause (ii);

3 (iv) ensure that the clients have regu4 lar and timely access to the services pro5 vided through the office and that the cli6 ents and complainants receive timely re7 sponses from representatives of the office

8 to complaints; and

9 (v) represent the interests of the cli10 ents before governmental agencies and

11 seek administrative, legal, and other rem12 edies to protect the health, safety, welfare,

13 and rights of the clients with regard to the

14 provisions of this title.

15 (B) CONTRACTS AND ARRANGEMENTS.—

16 (i) IN GENERAL.—Except as provided

17 in clause (ii), the State agency may estab18 lish and operate the office, and carry out

19 the program, directly, or by contract or

20 other arrangement with any public agency

21 or nonprofit private organization.

22 (ii) LICENSING AND CERTIFICATION

23 ORGANIZATIONS; ASSOCIATIONS.—The

24 State agency may not enter into the con25 tract or other arrangement described in
42

•S 85 IS

1 clause (i) with an agency or organization

2 that is responsible for licensing, certifying,

3 or providing long-term care services in the

4 State.

5 (d) SAFEGUARDS.—

6 (1) CONFIDENTIALITY.—The State plan shall

7 provide safeguards that restrict the use or disclosure

8 of information concerning applicants and bene9 ficiaries to purposes directly connected with the ad10 ministration of the plan.

11 (2) SAFEGUARDS AGAINST ABUSE.—The State

12 plans shall provide safeguards against physical, emo13 tional, or financial abuse or exploitation (specifically

14 including appropriate safeguards in cases where pay15 ment for program benefits is made by cash pay16 ments or vouchers given directly to individuals with

17 disabilities). All providers of services shall be re18 quired to register with the State agency.

19 (3) REGULATIONS.—Not later than January 1,

20 1997, the Secretary shall promulgate regulations

21 with respect to the requirements on States under

22 this subsection.

23 (e) SPECIFIED RIGHTS.—The State plan shall pro24 vide that in furnishing home and community-based serv-
43

•S 85 IS

1 ices under the plan the following individual rights are pro2 tected:

3 (1) The right to be fully informed in advance,

4 orally and in writing, of the care to be provided, to

5 be fully informed in advance of any changes in care

6 to be provided, and (except with respect to an indi7 vidual determined incompetent) to participate in

8 planning care or changes in care.

9 (2) The right to—

10 (A) voice grievances with respect to serv11 ices that are (or fail to be) furnished without

12 discrimination or reprisal for voicing grievances;

13 (B) be told how to complain to State and

14 local authorities; and

15 (C) prompt resolution of any grievances or

16 complaints.

17 (3) The right to confidentiality of personal and

18 clinical records and the right to have access to such

19 records.

20 (4) The right to privacy and to have one’s prop21 erty treated with respect.

22 (5) The right to refuse all or part of any care

23 and to be informed of the likely consequences of

24 such refusal.
44

•S 85 IS

1 (6) The right to education or training for one2 self and for members of one’s family or household on

3 the management of care.

4 (7) The right to be free from physical or mental

5 abuse, corporal punishment, and any physical or

6 chemical restraints imposed for purposes of dis7 cipline or convenience and not included in an indi8 vidual’s plan of care.

9 (8) The right to be fully informed orally and in

10 writing of the individual’s rights.

11 (9) The right to a free choice of providers.

12 (10) The right to direct provider activities when

13 an individual is competent and willing to direct such

14 activities.

15 SEC. 107. ADVISORY GROUPS.

16 (a) FEDERAL ADVISORY GROUP.—

17 (1) ESTABLISHMENT.—The Secretary shall es18 tablish an advisory group, to advise the Secretary

19 and States on all aspects of the program under this

20 title.

21 (2) COMPOSITION.—The group shall be com22 posed of individuals with disabilities and their rep23 resentatives, providers, Federal and State officials,

24 and local community implementing agencies. A ma-
45

•S 85 IS

1 jority of its members shall be individuals with dis2 abilities and their representatives.

3 (b) STATE ADVISORY GROUPS.—

4 (1) IN GENERAL.—Each State plan shall pro5 vide for the establishment and maintenance of an

6 advisory group to advise the State on all aspects of

7 the State plan under this title.

8 (2) COMPOSITION.—Members of each advisory

9 group shall be appointed by the Governor (or other

10 chief executive officer of the State) and shall include

11 individuals with disabilities and their representa12 tives, providers, State officials, and local community

13 implementing agencies. A majority of its members

14 shall be individuals with disabilities and their rep15 resentatives. The members of the advisory group

16 shall be selected from those nominated as described

17 in paragraph (3).

18 (3) SELECTION OF MEMBERS.—Each State

19 shall establish a process whereby all residents of the

20 State, including individuals with disabilities and

21 their representatives, shall be given the opportunity

22 to nominate members to the advisory group.

23 (4) PARTICULAR CONCERNS.—Each advisory

24 group shall—
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•S 85 IS

1 (A) before the State plan is developed, ad2 vise the State on guiding principles and values,

3 policy directions, and specific components of the

4 plan;

5 (B) meet regularly with State officials in6 volved in developing the plan, during the devel7 opment phase, to review and comment on all as8 pects of the plan;

9 (C) participate in the public hearings to

10 help assure that public comments are addressed

11 to the extent practicable;

12 (D) report to the Governor and make

13 available to the public any differences between

14 the group’s recommendations and the plan;

15 (E) report to the Governor and make avail16 able to the public specifically the degree to

17 which the plan is consumer-directed; and

18 (F) meet regularly with officials of the des19 ignated State agency (or agencies) to provide

20 advice on all aspects of implementation and

21 evaluation of the plan.

22 SEC. 108. PAYMENTS TO STATES.

23 (a) IN GENERAL.—Subject to section 102(a)(9)(C)

24 (relating to limitation on payment for administrative

25 costs), the Secretary, in accordance with the Cash Man-
47

•S 85 IS

1 agement Improvement Act, shall authorize payment to

2 each State with a plan approved under this title, for each

3 quarter (beginning on or after January 1, 1997), from its

4 allotment under section 109(b), an amount equal to—

5 (1)(A) with respect to the amount demonstrated

6 by State claims to have been expended during the

7 year for home and community-based services under

8 the plan for individuals with disabilities that does

9 not exceed 20 percent of the amount allotted to the

10 State under section 109(b), 100 percent of such

11 amount; and

12 (B) with respect to the amount demonstrated

13 by State claims to have been expended during the

14 year for home and community-based services under

15 the plan for individuals with disabilities that exceeds

16 20 percent of the amount allotted to the State under

17 section 109(b), the Federal home and community18 based services matching percentage (as defined in

19 subsection (b)) of such amount; plus

20 (2) an amount equal to 90 percent of the

21 amount demonstrated by the State to have been ex22 pended during the quarter for quality assurance ac23 tivities under the plan; plus

24 (3) an amount equal to 90 percent of amount

25 expended during the quarter under the plan for ac-
48

•S 85 IS

1 tivities (including preliminary screening) relating to

2 determination of eligibility and performance of needs

3 assessment; plus

4 (4) an amount equal to 90 percent (or, begin5 ning with quarters in fiscal year 2005, 75 percent)

6 of the amount expended during the quarter for the

7 design, development, and installation of mechanical

8 claims processing systems and for information re9 trieval; plus

10 (5) an amount equal to 50 percent of the re11 mainder of the amounts expended during the quar12 ter as found necessary by the Secretary for the prop13 er and efficient administration of the State plan.

14 (b) FEDERAL HOME AND COMMUNITY-BASED SERV15 ICES MATCHING PERCENTAGE.—In subsection (a), the

16 term ‘‘Federal home and community-based services

17 matching percentage’’ means, with respect to a State, the

18 State’s Federal medical assistance percentage (as defined

19 in section 1905(b) of the Social Security Act (42 U.S.C.

20 1396d(b))) increased by 15 percentage points, except that

21 the Federal home and community-based services matching

22 percentage shall in no case be more than 95 percent.

23 (c) PAYMENTS ON ESTIMATES WITH RETROSPEC24 TIVE ADJUSTMENTS.—The method of computing and

25 making payments under this section shall be as follows:
49

•S 85 IS

1 (1) The Secretary shall, prior to the beginning

2 of each quarter, estimate the amount to be paid to

3 the State under subsection (a) for such quarter,

4 based on a report filed by the State containing its

5 estimate of the total sum to be expended in such

6 quarter, and such other information as the Secretary

7 may find necessary.

8 (2) From the allotment available therefore, the

9 Secretary shall provide for payment of the amount

10 so estimated, reduced or increased, as the case may

11 be, by any sum (not previously adjusted under this

12 section) by which the Secretary finds that the esti13 mate of the amount to be paid the State for any

14 prior period under this section was greater or less

15 than the amount that should have been paid.

16 (d) APPLICATION OF RULES REGARDING LIMITA17 TIONS ON PROVIDER-RELATED DONATIONS AND HEALTH

18 CARE-RELATED TAXES.—The provisions of section

19 1903(w) of the Social Security Act (42 U.S.C. 1396b(w))

20 shall apply to payments to States under this section in

21 the same manner as they apply to payments to States

22 under section 1903(a) of such Act (42 U.S.C. 1396b(a)).

23 (e) FAILURE TO COMPLY WITH STATE PLAN.—If a

24 State furnishing home and community-based services

25 under this title fails to comply with the State plan ap-
50

•S 85 IS

1 proved under this title, the Secretary may either reduce

2 the Federal matching rates available to the State under

3 subsection (a) or withhold an amount of funds determined

4 appropriate by the Secretary from any payment to the

5 State under this section.

6 SEC. 109. APPROPRIATIONS; ALLOTMENTS TO STATES.

7 (a) APPROPRIATIONS.—

8 (1) FISCAL YEARS 1997 THROUGH 2005.—Sub9 ject to paragraph (5)(C), for purposes of this title,

10 the appropriation authorized under this title for each

11 of fiscal years 1997 through 2005 is the following:

12 (A) For fiscal year 1997, $1,800,000,000.

13 (B) For fiscal year 1998, $3,500,000,000.

14 (C) For fiscal year 1999, $5,800,000,000.

15 (D) For fiscal year 2000, $7,300,000,000.

16 (E) For fiscal year 2001,

17 $10,000,000,000.

18 (F) For fiscal year 2002,

19 $15,700,000,000.

20 (G) For fiscal year 2003,

21 $22,800,000,000.

22 (H) For fiscal year 2004,

23 $30,700,000,000.

24 (I) For fiscal year 2005, $34,600,000,000.
51

•S 85 IS

1 (2) SUBSEQUENT FISCAL YEARS.—For pur2 poses of this title, the appropriation authorized for

3 State plans under this title for each fiscal year after

4 fiscal year 2005 is the appropriation authorized

5 under this subsection for the preceding fiscal year

6 multiplied by—

7 (A) a factor (described in paragraph (3))

8 reflecting the change in the consumer price

9 index for the fiscal year; and

10 (B) a factor (described in paragraph (4))

11 reflecting the change in the number of individ12 uals with disabilities for the fiscal year.

13 (3) CPI INCREASE FACTOR.—For purposes of

14 paragraph (2)(A), the factor described in this para15 graph for a fiscal year is the ratio of—

16 (A) the annual average index of the

17 consumer price index for the preceding fiscal

18 year, to—

19 (B) such index, as so measured, for the

20 second preceding fiscal year.

21 (4) DISABLED POPULATION FACTOR.—For pur22 poses of paragraph (2)(B), the factor described in

23 this paragraph for a fiscal year is 100 percent plus

24 (or minus) the percentage increase (or decrease)

25 change in the disabled population of the United
52

•S 85 IS

1 States (as determined for purposes of the most re2 cent update under subsection (b)(3)(D)).

3 (5) ADDITIONAL FUNDS DUE TO MEDICAID

4 OFFSETS.—

5 (A) IN GENERAL.—Each participating

6 State must provide the Secretary with informa7 tion concerning offsets and reductions in the

8 medicaid program resulting from home and

9 community-based services provided disabled in10 dividuals under this title, that would have been

11 paid for such individuals under the State medic12 aid plan. At the time a State first submits its

13 plan under this title and before each subsequent

14 fiscal year (through fiscal year 2005), the State

15 also must provide the Secretary with such

16 budgetary information (for each fiscal year

17 through fiscal year 2005), as the Secretary de18 termines to be necessary to carry out this para19 graph.

20 (B) REPORTS.—Each State with a pro21 gram under this title shall submit such reports

22 to the Secretary as the Secretary may require

23 in order to monitor compliance with subpara24 graph (A). The Secretary shall specify the for-
53

•S 85 IS

1 mat of such reports and establish uniform data

2 reporting elements.

3 (C) ADJUSTMENTS TO APPROPRIATION.—

4 (i) IN GENERAL.—For each fiscal year

5 (beginning with fiscal year 1997 and end6 ing with fiscal year 2005) and based on a

7 review of information submitted under sub8 paragraph (A), the Secretary shall deter9 mine the amount by which the appropria10 tion authorized under subsection (a) will

11 increase. The amount of such increase for

12 a fiscal year shall be limited to the reduc13 tion in Federal expenditures of medical as14 sistance (as determined by Secretary) that

15 would have been made under title XIX of

16 the Social Security Act (42 U.S.C. 1396 et

17 seq.) but for the provision of home and

18 community-based services under the pro19 gram under this title.

20 (ii) ANNUAL PUBLICATION.—The Sec21 retary shall publish before the beginning of

22 such fiscal year, the revised appropriation

23 authorized under this subsection for such

24 fiscal year.
54

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1 (D) CONSTRUCTION.—Nothing in this sub2 section shall be construed as requiring States to

3 determine eligibility for medical assistance

4 under the State medicaid plan on behalf of indi5 viduals receiving assistance under this title.

6 (b) ALLOTMENTS TO STATES.—

7 (1) IN GENERAL.—The Secretary shall allot the

8 amounts available under the appropriation author9 ized for the fiscal year under paragraph (1) of sub10 section (a) (without regard to any adjustment to

11 such amount under paragraph (5) of such sub12 section), to the States with plans approved under

13 this title in accordance with an allocation formula

14 developed by the Secretary that takes into account—

15 (A) the percentage of the total number of

16 individuals with disabilities in all States that re17 side in a particular State;

18 (B) the per capita costs of furnishing home

19 and community-based services to individuals

20 with disabilities in the State; and

21 (C) the percentage of all individuals with

22 incomes at or below 150 percent of the official

23 poverty line (as described in section 105(a)(2))

24 in all States that reside in a particular State.
55

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1 (2) ALLOCATION FOR CLIENT ADVOCACY AC2 TIVITIES.—Each State with a plan approved under

3 this title shall allocate one-half of one percent of the

4 State’s total allotment under paragraph (1) for cli5 ent advocacy activities as described in section

6 106(c).

7 (3) NO DUPLICATE PAYMENT.—No payment

8 may be made to a State under this section for any

9 services provided to an individual to the extent that

10 the State received payment for such services under

11 section 1903(a) of the Social Security Act (42

12 U.S.C. 1396b(a)).

13 (4) REALLOCATIONS.—Any amounts allotted to

14 States under this subsection for a year that are not

15 expended in such year shall remain available for

16 State programs under this title and may be reallo17 cated to States as the Secretary determines appro18 priate.

19 (5) SAVINGS DUE TO MEDICAID OFFSETS.—

20 (A) IN GENERAL.—Except as provided in

21 subparagraph (B), from the total amount of the

22 increase in the amount available for a fiscal

23 year under paragraph (1) of subsection (a) re24 sulting from the application of paragraph (5) of

25 such subsection, the Secretary shall allot to
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1 each State with a plan approved under this

2 title, an amount equal to the Federal offsets

3 and reductions in the State’s medicaid plan for

4 such fiscal year that was reported to the Sec5 retary under subsection (a)(5), reduced or in6 creased, as the case may be, by any amount by

7 which the Secretary determines that any esti8 mated Federal offsets and reductions in such

9 State’s medicaid plan reported to the Secretary

10 under subsection (a)(5) for the previous fiscal

11 year were greater or less than the actual Fed12 eral offsets and reductions in such State’s med13 icaid plan.

14 (B) CAP ON STATE SAVINGS ALLOT15 MENT.—In no case shall the allotment made

16 under this paragraph to any State for a fiscal

17 year exceed the product of—

18 (i) the Federal medical assistance per19 centage for such State (as defined under

20 section 1905(b) of the Social Security Act

21 (42 U.S.C. 1396d(b))); multiplied by

22 (ii)(I) for fiscal year 1997, the base

23 medical assistance amount for the State

24 (as determined under subparagraph (C))

25 updated through the midpoint of fiscal
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1 year 1997 by the estimated percentage

2 change in the index described in section

3 102(a)(1)(B)(iii) during the period begin4 ning on October 1, 1995, and ending at

5 that midpoint; and

6 (II) for succeeding fiscal years, an

7 amount equal to the amount determined

8 under this clause for the previous fiscal

9 year updated through the midpoint of the

10 year by the estimated percentage change in

11 such index during the 12-month period

12 ending at that midpoint, with appropriate

13 adjustments to reflect previous

14 underestimations or overestimations under

15 this clause in the projected percentage

16 change in such index.

17 (C) BASE MEDICAL ASSISTANCE

18 AMOUNT.—The base medical assistance amount

19 for a State is an amount equal to the total ex20 penditures from Federal and State funds made

21 under the State plan under title XIX of the So22 cial Security Act (42 U.S.C 1396 et seq.) dur23 ing fiscal year 1995 with respect to medical as24 sistance consisting of the services described in

25 section 102(a)(1)(C).
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1 (c) STATE ENTITLEMENT.—This title constitutes

2 budget authority in advance of appropriations Acts, and

3 represents the obligation of the Federal Government to

4 provide for the payment to States of amounts described

5 in subsection (a).

6 SEC. 110. FEDERAL EVALUATIONS.

7 (a) IN GENERAL.—Not later than December 31,

8 2002, December 31, 2005, and each December 31 there9 after, the Secretary shall provide to Congress analytical

10 reports that evaluate—

11 (1) the extent to which individuals with low in12 comes and disabilities are equitably served;

13 (2) the adequacy and equity of service plans to

14 individuals with similar levels of disability across

15 States;

16 (3) the comparability of program participation

17 across States, described by level and type of disabil18 ity; and

19 (4) the ability of service providers to sufficiently

20 meet the demand for services.

21 (b) GERIATRIC ASSESSMENTS.—Not later than 18

22 months after the date of enactment of this Act, the Sec23 retary shall report to Congress concerning the feasibility

24 of providing reimbursement under health plans and other
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1 payers of health services for full geriatric assessment,

2 when recommended by a physician.

3 SEC. 111. INFORMATION AND TECHNICAL ASSISTANCE

4 GRANTS RELATING TO DEVELOPMENT OF

5 HOSPITAL LINKAGE PROGRAMS.

6 (a) FINDINGS.—Congress finds that—

7 (1) demonstration programs and projects have

8 been developed to offer care management to hos9 pitalized individuals awaiting discharge who are in

10 need of long-term health care services that meet in11 dividual needs and preferences in home and commu12 nity-based settings as an alternative to long-term

13 nursing home care or institutional placement; and

14 (2) there is a need to disseminate information

15 and technical assistance to hospitals and State and

16 local community organizations regarding such pro17 grams and projects and to provide incentive grants

18 to State and local public and private agencies, in19 cluding area agencies on aging, to establish and ex20 pand programs that offer care management to indi21 viduals awaiting discharge from acute care hospitals

22 who are in need of long-term care so that services

23 to meet individual needs and preferences can be ar24 ranged in home and community-based settings as an
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1 alternative to long-term placement in nursing homes

2 or other institutional settings.

3 (b) DISSEMINATION OF INFORMATION, TECHNICAL

4 ASSISTANCE, AND INCENTIVE GRANTS TO ASSIST IN THE

5 DEVELOPMENT OF HOSPITAL LINKAGE PROGRAMS.—

6 Part C of title III of the Public Health Service Act (42

7 U.S.C. 248 et seq.) is amended by adding at the end there8 of the following new section:

9 ‘‘SEC. 327B. DISSEMINATION OF INFORMATION, TECHNICAL

10 ASSISTANCE AND INCENTIVE GRANTS TO AS11 SIST IN THE DEVELOPMENT OF HOSPITAL

12 LINKAGE PROGRAMS.

13 ‘‘(a) DISSEMINATION OF INFORMATION.—The Sec14 retary shall compile, evaluate, publish and disseminate to

15 appropriate State and local officials and to private organi16 zations and agencies that provide services to individuals

17 in need of long-term health care services, such information

18 and materials as may assist such entities in replicating

19 successful programs that are aimed at offering care man20 agement to hospitalized individuals who are in need of

21 long-term care so that services to meet individual needs

22 and preferences can be arranged in home and community23 based settings as an alternative to long-term nursing home

24 placement. The Secretary may provide technical assistance

25 to entities seeking to replicate such programs.
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1 ‘‘(b) INCENTIVE GRANTS TO ASSIST IN THE DEVEL2 OPMENT OF HOSPITAL LINKAGE PROGRAMS.—The Sec3 retary shall establish a program under which incentive

4 grants may be awarded to assist private and public agen5 cies, including area agencies on aging, and organizations

6 in developing and expanding programs and projects that

7 facilitate the discharge of individuals in hospitals or other

8 acute care facilities who are in need of long-term care serv9 ices and placement of such individuals into home and com10 munity-based settings.

11 ‘‘(c) ADMINISTRATIVE PROVISIONS.—

12 ‘‘(1) ELIGIBLE ENTITIES.—To be eligible to re13 ceive a grant under subsection (b) an entity shall

14 be—

15 ‘‘(A)(i) a State agency as defined in sec16 tion 102(43) of the Older Americans Act of

17 1965 (42 U.S.C. 3002(43)); or

18 ‘‘(ii) a State agency responsible for admin19 istering home and community care programs

20 under title XIX of the Social Security Act (42

21 U.S.C. 1396 et seq.); or

22 ‘‘(B) if no State agency described in sub23 paragraph (A) applies with respect to a particu24 lar State, a public or nonprofit private entity.
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1 ‘‘(2) APPLICATIONS.—To be eligible to receive

2 an incentive grant under subsection (b), an entity

3 shall prepare and submit to the Secretary an appli4 cation at such time, in such manner and containing

5 such information as the Secretary may require, in6 cluding—

7 ‘‘(A) an assessment of the need within the

8 community to be served for the establishment

9 or expansion of a program to facilitate the dis10 charge of individuals in need of long-term care

11 who are in hospitals or other acute care facili12 ties into home and community-care programs

13 that provide individually planned, flexible serv14 ices that reflect individual choice or preference

15 rather than nursing home or institutional set16 tings;

17 ‘‘(B) a plan for establishing or expanding

18 a program for identifying individuals in hospital

19 or acute care facilities who are in need of indi20 vidualized long-term care provided in home and

21 community-based settings rather than nursing

22 homes or other institutional settings and under23 taking the planning and management of indi24 vidualized care plans to facilitate discharge into

25 such settings;
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1 ‘‘(C) assurances that nongovernmental

2 case management agencies funded under grants

3 awarded under this section are not direct pro4 viders of home and community-based services;

5 ‘‘(D) satisfactory assurances that adequate

6 home and community-based long term care

7 services are available, or will be made available,

8 within the community to be served so that indi9 viduals being discharged from hospitals or acute

10 care facilities under the proposed program can

11 be served in such home and community-based

12 settings, with flexible, individualized care that

13 reflects individual choice and preference;

14 ‘‘(E) a description of the manner in which

15 the program to be administered with amounts

16 received under the grant will be continued after

17 the termination of the grant for which such ap18 plication is submitted; and

19 ‘‘(F) a description of any waivers or ap20 provals necessary to expand the number of indi21 viduals served in federally funded home and

22 community-based long term care programs in

23 order to provide satisfactory assurances that

24 adequate home and community-based long term
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1 care services are available in the community to

2 be served.

3 ‘‘(3) AWARDING OF GRANTS.—

4 ‘‘(A) PREFERENCES.—In awarding grants

5 under subsection (b), the Secretary shall give

6 preference to entities submitting applications

7 that—

8 ‘‘(i) demonstrate an ability to coordi9 nate activities funded using amounts re10 ceived under the grant with programs pro11 viding individualized home and community12 based case management and services to in13 dividuals in need of long term care with

14 hospital discharge planning programs; and

15 ‘‘(ii) demonstrate that adequate home

16 and community-based long term care man17 agement and services are available, or will

18 be made available to individuals being

19 served under the program funded with

20 amounts received under subsection (b).

21 ‘‘(B) DISTRIBUTION.—In awarding grants

22 under subsection (b), the Secretary shall ensure

23 that such grants—

24 ‘‘(i) are equitably distributed on a ge25 ographic basis;
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1 ‘‘(ii) include projects operating in

2 urban areas and projects operating in rural

3 areas; and

4 ‘‘(iii) are awarded for the expansion of

5 existing hospital linkage programs as well

6 as the establishment of new programs.

7 ‘‘(C) EXPEDITED CONSIDERATION.—The

8 Secretary shall provide for the expedited consid9 eration of any waiver application that is nec10 essary under title XIX of the Social Security

11 Act (42 U.S.C. 1396 et seq.) to enable an appli12 cant for a grant under subsection (b) to satisfy

13 the assurance required under paragraph (1)(D).

14 ‘‘(4) USE OF GRANTS.—An entity that receives

15 amounts under a grant under subsection (b) may

16 use such amounts for planning, development and

17 evaluation services and to provide reimbursements

18 for the costs of one or more case mangers to be lo19 cated in or assigned to selected hospitals who

20 would—

21 ‘‘(A) identify patients in need of individ22 ualized care in home and community-based

23 long-term care;
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1 ‘‘(B) assess and develop care plans in co2 operation with the hospital discharge planning

3 staff; and

4 ‘‘(C) arrange for the provision of commu5 nity care either immediately upon discharge

6 from the hospital or after any short term nurs7 ing-home stay that is needed for recuperation

8 or rehabilitation;

9 ‘‘(5) DIRECT SERVICES SUBJECT TO REIM10 BURSEMENTS.—None of the amounts provided

11 under a grant under this section may be used to

12 provide direct services, other than case management,

13 for which reimbursements are otherwise available

14 under title XVIII or XIX of the Social Security Act

15 (42 U.S.C. 1395 et seq. and 1396 et seq.).

16 ‘‘(6) LIMITATIONS.—

17 ‘‘(A) TERM.—Grants awarded under this

18 section shall be for terms of less than 3 years.

19 ‘‘(B) AMOUNT.—Grants awarded to an en20 tity under this section shall not exceed

21 $300,000 per year. The Secretary may waive

22 the limitation under this subparagraph where

23 an applicant demonstrates that the number of

24 hospitals or individuals to be served under the

25 grant justifies such increased amounts.
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1 ‘‘(C) SUPPLANTING OF FUNDS.—Amounts

2 awarded under a grant under this section may

3 not be used to supplant existing State funds

4 that are provided to support hospital link pro5 grams.

6 ‘‘(d) EVALUATION AND REPORTS.—

7 ‘‘(1) BY GRANTEES.—An entity that receives a

8 grant under this section shall evaluate the effective9 ness of the services provided under the grant in fa10 cilitating the placement of individuals being dis11 charged from hospitals or acute care facilities into

12 home and community-based long term care settings

13 rather than nursing homes. Such entity shall pre14 pare and submit to the Secretary a report containing

15 such information and data concerning the activities

16 funded under the grant as the Secretary determines

17 appropriate.

18 ‘‘(2) BY SECRETARY.—Not later than the end

19 of the third fiscal year for which funds are appro20 priated under subsection (e), the Secretary shall pre21 pare and submit to the appropriate committees of

22 Congress, a report concerning the results of the eval23 uations and reports conducted and prepared under

24 paragraph (1).
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1 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There

2 are authorized to be appropriated to carry out this section,

3 $5,000,000 for each of the fiscal years 1996 through

4 1998.’’.

5 TITLE II—PROVISIONS

6 RELATING TO MEDICARE

7 SEC. 201. RECAPTURE OF CERTAIN HEALTH CARE SUB8 SIDIES RECEIVED BY HIGH-INCOME INDIVID9 UALS.

10 (a) IN GENERAL.—Subchapter A of chapter 1 of the

11 Internal Revenue Code of 1986 is amended by adding at

12 the end the following new part:

13 ‘‘PART VIII—CERTAIN HEALTH CARE SUBSIDIES

14 RECEIVED BY HIGH-INCOME INDIVIDUALS

‘‘Sec. 59B. Recapture of certain health care subsidies.

15 ‘‘SEC. 59B. RECAPTURE OF CERTAIN HEALTH CARE SUB16 SIDIES.

17 ‘‘(a) IMPOSITION OF RECAPTURE AMOUNT.—In the

18 case of an individual, if the modified adjusted gross in19 come of the taxpayer for the taxable year exceeds the

20 threshold amount, such taxpayer shall pay (in addition to

21 any other amount imposed by this subtitle) a recapture

22 amount for such taxable year equal to the aggregate of

23 the Medicare part B recapture amounts (if any) for

24 months during such year that a premium is paid under
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1 part B of title XVIII of the Social Security Act for the

2 coverage of the individual under such part.

3 ‘‘(b) MEDICARE PART B PREMIUM RECAPTURE

4 AMOUNT FOR MONTH.—For purposes of this section, the

5 Medicare part B premium recapture amount for any

6 month is the amount equal to the excess of—

7 ‘‘(1) 200 percent of the monthly actuarial rate

8 for enrollees age 65 and over determined for that

9 calendar year under section 1839(a)(1) of the Social

10 Security Act, over

11 ‘‘(2) the total monthly premium under section

12 1839 of the Social Security Act (determined without

13 regard to subsections (b) and (f) of section 1839 of

14 such Act).

15 ‘‘(c) PHASE-IN OF RECAPTURE AMOUNT.—

16 ‘‘(1) IN GENERAL.—If the modified adjusted

17 gross income of the taxpayer for any taxable year

18 exceeds the threshold amount by less than $25,000,

19 the recapture amount imposed by this section for

20 such taxable year shall be an amount that bears the

21 same ratio to the recapture amount that would (but

22 for this subsection) be imposed by this section for

23 such taxable year as such excess bears to $25,000.

24 ‘‘(2) JOINT RETURNS.—If a recapture amount

25 is determined separately for each spouse filing a
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1 joint return, paragraph (1) shall be applied by sub2 stituting ‘$50,000’ for ‘$25,000’ each place it ap3 pears.

4 ‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.—

5 For purposes of this section:

6 ‘‘(1) THRESHOLD AMOUNT.—The term ‘thresh7 old amount’ means—

8 ‘‘(A) except as otherwise provided in this

9 paragraph, $100,000;

10 ‘‘(B) $125,000 in the case of a joint re11 turn; and

12 ‘‘(C) zero in the case of a taxpayer who—

13 ‘‘(i) is married (as determined under

14 section 7703) but does not file a joint re15 turn for such year; and

16 ‘‘(ii) does not live apart from his

17 spouse at all times during the taxable year.

18 ‘‘(2) MODIFIED ADJUSTED GROSS INCOME.—

19 The term ‘modified adjusted gross income’ means

20 adjusted gross income—

21 ‘‘(A) determined without regard to sections

22 135, 911, 931, and 933; and

23 ‘‘(B) increased by the amount of interest

24 received or accrued by the taxpayer during the

25 taxable year that is exempt from tax.
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1 ‘‘(3) JOINT RETURNS.—In the case of a joint

2 return—

3 ‘‘(A) the recapture amount under sub4 section (a) shall be the sum of the recapture

5 amounts determined separately for each spouse;

6 and

7 ‘‘(B) subsections (a) and (c) shall be ap8 plied by taking into account the combined modi9 fied adjusted gross income of the spouses.

10 ‘‘(4) COORDINATION WITH OTHER PROVI11 SIONS.—

12 ‘‘(A) TREATED AS TAX FOR SUBTITLE F.—

13 For purposes of subtitle F, the recapture

14 amount imposed by this section shall be treated

15 as if it were a tax imposed by section 1.

16 ‘‘(B) NOT TREATED AS TAX FOR CERTAIN

17 PURPOSES.—The recapture amount imposed by

18 this section shall not be treated as a tax im19 posed by this chapter for purposes of determin20 ing—

21 ‘‘(i) the amount of any credit allow22 able under this chapter; or

23 ‘‘(ii) the amount of the minimum tax

24 under section 55.
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1 ‘‘(C) TREATED AS PAYMENT FOR MEDICAL

2 INSURANCE.—The recapture amount imposed

3 by this section shall be treated as an amount

4 paid for insurance covering medical care, within

5 the meaning of section 213(d).’’.

6 (b) TRANSFERS TO FEDERAL SUPPLEMENTARY

7 MEDICAL INSURANCE TRUST FUND.—

8 (1) IN GENERAL.—There are hereby appro9 priated to the Federal Supplementary Medical Insur10 ance Trust Fund amounts equivalent to the aggre11 gate increase in liabilities under chapter 1 of the In12 ternal Revenue Code of 1986 that is attributable to

13 the application of section 59B(a) of such Code, as

14 added by this section.

15 (2) TRANSFERS.—The amounts appropriated

16 by paragraph (1) to the Federal Supplementary

17 Medical Insurance Trust Fund shall be transferred

18 from time to time (but not less frequently than

19 quarterly) from the general fund of the Treasury on

20 the basis of estimates made by the Secretary of the

21 Treasury of the amounts referred to in paragraph

22 (1). Any quarterly payment shall be made on the

23 first day of such quarter and shall take into account

24 the recapture amounts referred to in such section

25 59B(a) for such quarter. Proper adjustments shall
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1 be made in the amounts subsequently transferred to

2 the extent prior estimates were in excess of or less

3 than the amounts required to be transferred.

4 (c) REPORTING REQUIREMENTS.—

5 (1) Paragraph (1) of section 6050F(a) of the

6 Internal Revenue Code of 1986 (relating to returns

7 relating to social security benefits) is amended by

8 striking ‘‘and’’ at the end of subparagraph (B) and

9 by inserting after subparagraph (C) the following

10 new subparagraph:

11 ‘‘(D) the number of months during the cal12 endar year for which a premium was paid under

13 part B of title XVIII of the Social Security Act

14 for the coverage of such individual under such

15 part, and’’.

16 (2) Paragraph (2) of section 6050F(b) of such

17 Code is amended to read as follows:

18 ‘‘(2) the information required to be shown on

19 such return with respect to such individual.’’.

20 (3) Subparagraph (A) of section 6050F(c)(1) of

21 such Code is amended by inserting before the

22 comma ‘‘and in the case of the information specified

23 in subsection (a)(1)(D)’’.
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1 (4) The heading for section 6050F of such

2 Code is amended by inserting ‘‘AND MEDICARE

3 PART B COVERAGE’’ before the period.

4 (5) The item relating to section 6050F in the

5 table of sections for subpart B of part III of sub6 chapter A of chapter 61 of such Code is amended by

7 inserting ‘‘and Medicare part B coverage’’ before the

8 period.

9 (d) WAIVER OF CERTAIN ESTIMATED TAX PEN10 ALTIES.—No addition to tax shall be imposed under sec11 tion 6654 of the Internal Revenue Code of 1986 (relating

12 to failure to pay estimated income tax) for any period be13 fore April 16, 1998, with respect to any underpayment

14 to the extent that such underpayment resulted from sec15 tion 59B(a) of the Internal Revenue Code of 1986, as

16 added by this section.

17 (e) CLERICAL AMENDMENT.—The table of parts for

18 subchapter A of chapter 1 of the Internal Revenue Code

19 of 1986 is amended by adding at the end thereof the fol20 lowing new item:

‘‘Part VIII. Certain health care subsidies received by high-income

individuals.’’.

21 (f) EFFECTIVE DATE.—The amendments made by

22 this section shall apply to taxable years beginning after

23 December 31, 1995.
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1 SEC. 202. IMPOSITION OF 10 PERCENT COPAYMENT ON

2 HOME HEALTH SERVICES UNDER MEDICARE.

3 (a) IN GENERAL.—

4 (1) PART A.—Section 1813(a) of the Social Se5 curity Act (42 U.S.C. 1395e(a)) is amended by add6 ing at the end the following new paragraph:

7 ‘‘(5)(A) The amount payable for a home health serv8 ice furnished to an individual under this part shall be re9 duced by a copayment amount equal to 10 percent of the

10 average nationwide per visit cost for such a service fur11 nished under this title (as determined by the Secretary

12 on a prospective basis for services furnished during a cal13 endar year).

14 ‘‘(B) Subparagraph (A) shall not apply to individuals

15 whose family income does not exceed 150 percent of the

16 official poverty line (referred to in section 1905(p)(2)) for

17 a family of the size involved.’’.

18 (2) PART B.—

19 (A) IN GENERAL.—Section 1833(b) of the

20 Social Security Act (42 U.S.C. 1395l(b)) is

21 amended by adding at the end the following

22 new sentence: ‘‘If the total amount of the ex23 penses incurred by an individual as determined

24 under the preceding provisions of this sub25 section include expenses for a home health serv26 ice, such expenses shall be further reduced by
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1 a copayment amount equal to 10 percent of the

2 average nationwide per visit cost for such a

3 service furnished under this title (as determined

4 by the Secretary on a prospective basis for serv5 ices furnished during a calendar year). The pre6 ceding sentence shall not apply to individuals

7 whose family income does not exceed 150 per8 cent of the official poverty line (referred to in

9 section 1905(p)(2)) for a family of the size in10 volved.’’.

11 (B) CONFORMING AMENDMENT.—Section

12 1833(a)(2) of the Social Security Act (42

13 U.S.C. 1395l(a)(2)), as amended by sections

14 147(f)(6)(C) and 156(a)(2)(B)(iii) of the Social

15 Security Act Amendments of 1994 (Public Law

16 103–432; 108 Stat. 4432, 4440), is further

17 amended—

18 (i) in subparagraph (A), by striking

19 ‘‘to home health services (other than a cov20 ered osteoporosis drug (as defined in sec21 tion 1861(kk))) and’’;

22 (ii) in subparagraph (E), by striking

23 ‘‘and’’ at the end;
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1 (iii) in subparagraph (F), by striking

2 the semicolon at the end and inserting ‘‘;

3 and’’; and

4 (iv) by adding at the end the following

5 new subparagraph:

6 ‘‘(G) with respect to any home health serv7 ice (other than a covered osteoporosis drug (as

8 defined in section 1861(kk)))—

9 ‘‘(i) the lesser of —

10 ‘‘(I) the reasonable cost of such

11 service, as determined under section

12 1861(v); or

13 ‘‘(II) the customary charges with

14 respect to such service;

15 less the amount a provider may charge as

16 described in clause (ii) of section

17 1866(a)(2)(A); or

18 ‘‘(ii) if such service is furnished by a

19 public provider of services, or by another

20 provider that demonstrates to the satisfac21 tion of the Secretary that a significant por22 tion of its patients are low-income (and re23 quests that payment be made under this

24 clause), free of charge or at nominal

25 charges to the public, the amount deter-
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1 mined in accordance with section

2 1814(b)(2).’’.

3 (3) PROVIDER CHARGES.—Section

4 1866(a)(2)(A)(i) of the Social Security Act (42

5 U.S.C. 1395cc(a)(2)(A)(i)) is amended—

6 (A) by striking ‘‘deduction or coinsurance’’

7 and inserting ‘‘deduction, coinsurance, or

8 copayment’’; and

9 (B) by striking ‘‘or (a)(4)’’ and inserting

10 ‘‘(a)(4), or (a)(5)’’.

11 (b) EFFECTIVE DATE.—The amendments made by

12 subsection (a) shall apply to home health services fur13 nished on or after January 1, 1996.

14 SEC. 203. REDUCTION IN PAYMENTS FOR CAPITAL-RELAT15 ED COSTS FOR INPATIENT HOSPITAL

16 SERVICES.

17 (a) PPS HOSPITALS.—

18 (1) REDUCTION IN BASE PAYMENT RATES FOR

19 PPS HOSPITALS.—Section 1886(g)(1)(A) of the So20 cial Security Act (42 U.S.C. 1395ww(g)(1)(A)) is

21 amended by adding at the end the following new

22 sentence: ‘‘In addition to the reduction described in

23 the preceding sentence, for discharges occurring

24 after September 30, 1995, the Secretary shall reduce

25 by 7.31 percent the unadjusted standard Federal
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1 capital payment rate (as described in section

2 412.308(c) of title 42, Code of Federal Regulations,

3 as in effect on the date of enactment of the Long4 Term Care Reform and Deficit Reduction Act of

5 1995) and shall reduce by 10.41 percent the

6 unadjusted hospital-specific rate (as described in

7 section 412.328(e)(1) of title 42, Code of Federal

8 Regulations, as in effect on the date of enactment of

9 the Long-Term Care Reform and Deficit Reduction

10 Act of 1995).’’.

11 (2) REDUCTION IN UPDATE.—Section

12 1886(g)(1) of the Social Security Act (42 U.S.C.

13 1395ww(g)(1)) is amended—

14 (A) in subparagraph (B)(i)—

15 (i) by striking ‘‘and (II)’’ and insert16 ing ‘‘(II)’’; and

17 (ii) by striking the semicolon at the

18 end and inserting the following: ‘‘, and

19 (III) an annual update factor established

20 for the prospective payment rates applica21 ble to discharges in a fiscal year that (sub22 ject to reduction under subparagraph (C))

23 will be based upon such factor as the Sec24 retary determines appropriate to take into

25 account amounts necessary for the efficient
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1 and effective delivery of medically appro2 priate and necessary care of high quality;’’;

3 (B) by redesignating subparagraph (C) as

4 subparagraph (D); and

5 (C) by inserting after subparagraph (B)

6 the following new subparagraph:

7 ‘‘(C)(i) With respect to payments attributable

8 to portions of cost reporting periods or discharges

9 occurring during each of the fiscal years 1996

10 through 2003, the Secretary shall include a reduc11 tion in the annual update factor established under

12 subparagraph (B)(i)(III) for discharges in the year

13 equal to the applicable update reduction described in

14 clause (ii) to adjust for excessive increases in capital

15 costs per discharge for fiscal years prior to fiscal

16 year 1992 (but in no event may such reduction re17 sult in an annual update factor less than zero).

18 ‘‘(ii) In clause (i), the term ‘applicable update

19 reduction’ means, with respect to the update factor

20 for a fiscal year—

21 ‘‘(I) 4.9 percentage points; or

22 ‘‘(II) if the annual update factor for the

23 previous fiscal year was less than the applicable

24 update reduction for the previous year, the sum

25 of 4.9 percentage points and the difference be-
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1 tween the annual update factor for the previous

2 year and the applicable update reduction for the

3 previous year.’’.

4 (b) PPS-EXEMPT HOSPITALS.—Section 1861(v)(1)

5 of the Social Security Act (42 U.S.C. 1395x(v)(1)) is fur6 ther amended by adding at the end the following new sub7 paragraph:

8 ‘‘(T) Such regulations shall provide that, in determin9 ing the amount of the payments that may be made under

10 this title with respect to the capital-related costs of inpa11 tient hospital services furnished by a hospital that is not

12 a subsection (d) hospital (as defined in section

13 1886(d)(1)(B)) or a subsection (d) Puerto Rico hospital

14 (as defined in section 1886(d)(9)(A)), the Secretary shall

15 reduce the amounts of such payments otherwise estab16 lished under this title by 15 percent for payments attrib17 utable to portions of cost reporting periods occurring dur18 ing each of the fiscal years 1996 through 2003.’’.

19 SEC. 204. ELIMINATION OF FORMULA-DRIVEN OVERPAY20 MENTS FOR CERTAIN OUTPATIENT HOSPITAL

21 SERVICES.

22 (a) AMBULATORY SURGICAL CENTER PROCE23 DURES.—Section 1833(i)(3)(B)(i)(II) of the Social Secu24 rity Act (42 U.S.C. 1395l(i)(3)(B)(i)(II)) is amended—

25 (1) by striking ‘‘of 80 percent’’; and
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1 (2) by striking the period at the end and insert2 ing the following: ‘‘, less the amount a provider may

3 charge as described in clause (ii) of section

4 1866(a)(2)(A).’’.

5 (b) RADIOLOGY SERVICES AND DIAGNOSTIC PROCE6 DURES.—Section 1833(n)(1)(B)(i)(II) of the Social Secu7 rity Act (42 U.S.C. 1395l(n)(1)(B)(i)(II)) is amended—

8 (1) by striking ‘‘of 80 percent’’; and

9 (2) by striking the period at the end and insert10 ing the following: ‘‘, less the amount a provider may

11 charge as described in clause (ii) of section

12 1866(a)(2)(A).’’.

13 (c) EFFECTIVE DATE.—The amendments made by

14 this section shall apply to services furnished during por15 tions of cost reporting periods occurring on or after July

16 1, 1995.

17 SEC. 205. REDUCTION IN ROUTINE COST LIMITS FOR HOME

18 HEALTH SERVICES.

19 (a) REDUCTION IN UPDATE TO MAINTAIN FREEZE

20 IN 1996.—

21 (1) IN GENERAL.—Section 1861(v)(1)(L)(i) of

22 the Social Security Act (42 U.S.C.

23 1395x(v)(1)(L)(i)) is amended—

24 (A) in subclause (II), by striking ‘‘or’’ at

25 the end;
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1 (B) in subclause (III), by striking ‘‘112

2 percent,’’ and inserting ‘‘and before July 1,

3 1996, 112 percent, or’’; and

4 (C) by inserting after subclause (III) the

5 following new subclause:

6 ‘‘(IV) July 1, 1996, 100 percent (adjusted by

7 such amount as the Secretary determines to be nec8 essary to preserve the savings resulting from the en9 actment of section 13564(a)(1) of the Omnibus

10 Budget Reconciliation Act of 1993),’’.

11 (2) ADJUSTMENT TO LIMITS.—Section

12 1861(v)(1)(L)(ii) of the Social Security Act (42

13 U.S.C. 1395x(v)(1)(L)(ii)) is amended by adding at

14 the end the following new sentence: ‘‘The effect of

15 the amendments made by section 205(a)(1) of the

16 Long-Term Care Reform and Deficit Reduction Act

17 of 1995 shall not be considered by the Secretary in

18 making adjustments pursuant to this clause.’’.

19 (b) BASING LIMITS IN SUBSEQUENT YEARS ON ME20 DIAN OF COSTS.—

21 (1) IN GENERAL.—Section 1861(v)(1)(L)(i) of

22 the Social Security Act (42 U.S.C.

23 1395x(v)(1)(L)(i)), as amended by subsection (a), is

24 amended in the matter following subclause (IV) by

25 striking ‘‘the mean’’ and inserting ‘‘the median’’.
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1 (2) EFFECTIVE DATE.—The amendment made

2 by paragraph (1) shall apply to cost reporting peri3 ods beginning on or after July 1, 1997.

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