II

104TH CONGRESS

1ST SESSION S. 990

To expand the availability of qualified organizations for frail elderly community projects (Program of All-inclusive Care for the Elderly (PACE)),

to allow such organizations, following a trial period, to become eligible

to be providers under applicable titles of the Social Security Act, and

for other purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 29 (legislative day, JUNE 19), 1995

Mr. DOLE (for himself and Mr. INOUYE) introduced the following bill; which

was read twice and referred to the Committee on Finance

A BILL

To expand the availability of qualified organizations for frail

elderly community projects (Program of All-inclusive

Care for the Elderly (PACE)), to allow such organizations, following a trial period, to become eligible to be

providers under applicable titles of the Social Security

Act, 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.

4 This Act may be cited as the ‘‘PACE Provider Act

5 of 1995’’.
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1 SEC. 2. WAIVER AUTHORITY AND PROVIDER ELIGIBILITY

2 FOR PACE PROJECTS.

3 (a) TRIAL PERIODS.—

4 (1) IN GENERAL.—The Secretary of Health and

5 Human Services (hereafter for purposes of this Act

6 referred to as the ‘Secretary’) shall grant waivers of

7 certain requirements of titles XVIII and XIX of the

8 Social Security Act (42 U.S.C. 1395 et seq., 42

9 U.S.C. 1396 et seq.), or of any other applicable title

10 of such Act, to public or nonprofit community-based

11 organizations for a trial period to enable such orga12 nizations to demonstrate their capacity to provide

13 comprehensive health care services of proper quality

14 on a cost-effective capitated basis to frail elderly pa15 tients at risk of institutionalization. An organization

16 shall be eligible to be a provider under such titles if

17 the organization successfully completes the trial pe18 riod described in the preceding sentence.

19 (2) APPROVAL OF APPLICATIONS.—An appro20 priately completed application for a waiver under

21 this Act is deemed approved unless the Secretary

22 specifically disapproves it in writing—

23 (A) not later than 90 days after the date

24 the completed application is filed in proper

25 form; or
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1 (B) not later than 90 days after the date

2 additional information is provided to the Sec3 retary if the Secretary requests reasonable and

4 substantial additional information during the

5 90-day period described in subparagraph (A).

6 (3) SOLE AUTHORITY.—The Secretary shall

7 have sole authority to approve or disapprove the eli8 gibility of an organization for a waiver under this

9 Act and shall make such determinations in a timely

10 manner.

11 (4) CONSIDERATION OF EXISTING SITES.—In

12 reviewing an application for a waiver under this Act,

13 the Secretary shall—

14 (A) consider whether any existing organi15 zation already operates under a waiver granted

16 under this Act in the proposed service area

17 identified in the application; and

18 (B) if the Secretary determines that such

19 an organization exists, assure that the potential

20 population of eligible individuals to be served

21 under the proposed waiver is reasonably suffi22 cient to sustain an additional organization with23 out jeopardizing the economic or service viabil24 ity of any other organization operating in that

25 service area.
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1 (b) TERMS AND CONDITIONS FOR WAIVERS.—

2 (1) IN GENERAL.—Except as otherwise pro3 vided by law or regulation, the terms and conditions

4 of a waiver granted pursuant to this Act shall be

5 substantially equivalent to—

6 (A) the terms and conditions of the On

7 Lok waiver (referred to in section 603(c) of the

8 Social Security Amendments of 1983 and ex9 tended by section 9220 of the Consolidated Om10 nibus Budget Reconciliation Act of 1985), in11 cluding permitting the organization to assume

12 the full financial risk progressively over the ini13 tial 3-year period of the waiver; and

14 (B) the terms and conditions provided

15 under the Protocol for the Program of All-inclu16 sive Care for the Elderly (PACE), as published

17 by On Lok, Inc. as of April 14, 1995, and made

18 generally available.

19 (2) NOT CONDITIONED ON INFORMATION.—

20 (A) IN GENERAL.—The Secretary’s ap21 proval of a waiver for a trial period shall not be

22 conditioned upon an organization collecting in23 formation for purposes other than operational

24 purposes, including monitoring of cost and

25 quality of care provided.
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1 (B) RESEARCH.—The Secretary may re2 quire information from an organization operat3 ing under a waiver under this Act for purposes

4 of general research or general evaluation, but

5 only if an organization agrees to participate in

6 such research or evaluation and is appropriately

7 compensated for any expenses incurred, or

8 where such research is undertaken entirely at

9 the expense of the Secretary.

10 (3) 3-YEAR WAIVER LIMIT.—

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

12 subparagraph (B), a waiver granted under this

13 Act shall be for a trial period not to exceed 3

14 years.

15 (B) EXCEPTION.—The Secretary may ex16 tend a waiver granted under this Act beyond

17 the 3-year period during the consideration of an

18 application from an organization under sub19 section (c).

20 (4) NUMBER OF ORGANIZATIONS AUTHOR21 IZED.—

22 (A) PRIOR TO JULY 1, 1998.—

23 (i) IN GENERAL.—The Secretary shall

24 grant waivers under this Act to not more

25 than—
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1 (I) 30 organizations before July

2 1, 1996;

3 (II) 40 organizations before July

4 1, 1997, and after July 1, 1996; or

5 (III) 50 organizations before

6 July 1, 1998, and after July 1, 1997.

7 (ii) SECTION 9412(b) AND ON LOK

8 WAIVERS INCLUDED.—For purposes of

9 clause (i), the number of organizations

10 specified in such clause shall include any

11 organization established and operating

12 under a waiver granted under section

13 603(c) of the Social Security Amendments

14 of 1983 or any organization established

15 and operating under a waiver granted

16 under section 9412(b) of the Omnibus

17 Budget Reconciliation Act of 1986 (as

18 such sections were in effect on the day be19 fore the date of the enactment of this Act).

20 (B) ON AND AFTER JULY 1, 1998.—On and

21 after July 1, 1998, the number of organizations

22 operating under a waiver under this Act shall

23 no longer be limited.

24 (c) ELIGIBILITY TO BE A PROVIDER.—
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1 (1) IN GENERAL.—Upon successful completion

2 of the trial period established under this Act, an or3 ganization which continues to meet the requirements

4 of this Act shall be eligible to be a provider under

5 any applicable title of the Social Security Act, in6 cluding under titles XVIII and XIX of such Act (42

7 U.S.C. 1395 et seq.; 42 U.S.C. 1396 et seq.), and

8 may apply to be recognized as such in accordance

9 with regulations promulgated by the Secretary.

10 (2) REQUIREMENTS.—No organization may be

11 eligible to be a provider under any applicable title of

12 the Social Security Act if—

13 (A) the Secretary specifically and formally

14 finds that projected reimbursement for such or15 ganization would not, without any reimburse16 ment modifications specified in the Secretary’s

17 finding, result in payments below the projected

18 costs for a comparable population under the

19 medicare program under title XVIII of the So20 cial Security Act (42 U.S.C. 1395 et seq.) and

21 the medicaid program under title XIX of such

22 Act (42 U.S.C. 1396 et seq.), or under any

23 other applicable title of such Act, or that the

24 care provided by such organization is signifi25 cantly deficient; and
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1 (B) such projected reimbursement costs or

2 significant deficiencies in quality of care are not

3 appropriately adjusted or corrected on a timely

4 basis (as determined by the Secretary) in ac5 cordance with the specific recommendations for

6 reimbursement adjustments or corrections in

7 the quality of service included in the Secretary’s

8 formal finding under subparagraph (A).

9 (3) NOT CONDITIONED ON INFORMATION.—The

10 provisions of subsection (b)(2) shall apply to an or11 ganization eligible to be a provider under any appli12 cable title of the Social Security Act after success13 fully completing a trial period under this Act.

14 (d) REIMBURSEMENT.—

15 (1) IN GENERAL.—Notwithstanding any other

16 provision of law, and except as provided in para17 graph (2), an organization that is granted a waiver

18 under this Act, or that is eligible to be a provider

19 under any applicable title of the Social Security Act

20 as a result of this Act, shall ordinarily be reimbursed

21 on a capitation basis. Any such organization may

22 provide additional services as deemed appropriate by

23 the organization for qualified participants without

24 regard to whether such services are specifically reim25 bursable through capitation payments. To the extent
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1 such services, in terms of type or frequency, are not

2 reimbursable, no payments for such services may be

3 required of participants.

4 (2) EXCEPTION.—In the case of an organiza5 tion receiving an initial waiver under this Act on or

6 after October 1, 1995, the Secretary (at the request

7 of the organization) shall not require the organiza8 tion to provide services under title XVIII of the So9 cial Security Act (42 U.S.C. 1395 et seq.) on a

10 capitated or other risk basis during the first or sec11 ond year of the waiver, in order to allow such an or12 ganization to progressively assume the financial risk

13 and to acquire experience with such a payment

14 method.

15 (e) APPLICATION TO ON LOK WAIVERS.—The provi16 sions of this Act also shall apply to an organization operat17 ing under the On Lok waiver described in subsection

18 (b)(1)(A).

19 (f) APPLICATION OF INCOME AND RESOURCES

20 STANDARDS FOR CERTAIN INSTITUTIONALIZED

21 SPOUSES.—Section 1924 of the Social Security Act (42

22 U.S.C. 1396r–5) (relating to the treatment of income and

23 resources for certain institutionalized spouses) shall apply

24 to any individual receiving services from an organization

25 operating—
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1 (1) under a waiver under this Act; or

2 (2) as a provider under title XIX of such Act,

3 after a determination that the organization has suc4 cessfully completed a trial period under this Act.

5 (g) PROMOTION OF ADDITIONAL APPLICATIONS.—

6 The Secretary shall institute an ongoing effort to promote

7 the development of organizations to acquire eligibility,

8 through participation in a trial period under this Act, to

9 become providers under any applicable title of the Social

10 Security Act.

11 (h) PROVISION OF SERVICES TO ADDITIONAL POPU12 LATIONS.—Nothing in this Act shall prevent any partici13 pating organization from independently developing distinct

14 programs to provide appropriate services to frail popu15 lations other than the elderly under any provision of law

16 other than this Act, except where the Secretary finds that

17 the provision of such services impairs the ability of the

18 organization to provide services required for the elderly.

19 (i) DEFINITION OF PROVIDER.—The term ‘‘provider’’

20 means a provider of services which—

21 (1) has filed an agreement with the Secretary

22 under section 1866 of the Social Security Act (42

23 U.S.C. 1395cc);
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1 (2) is eligible to participate in a State plan ap2 proved under title XIX of the Social Security Act

3 (42 U.S.C. 1396 et seq.); or

4 (3) is eligible to receive payment for such serv5 ices under any other applicable title of the Social Se6 curity Act.

7 SEC. 3. APPLICATION OF SPOUSAL IMPOVERISHMENT

8 RULES.

9 Section 1924(a)(5) of the Social Security Act (42

10 U.S.C. 1396r–5(a)(5)) is amended to read as follows:

11 ‘‘(5) APPLICATION TO INDIVIDUALS RECEIVING

12 SERVICES FROM CERTAIN ORGANIZATIONS.—This

13 section applies to individuals receiving institutional

14 or noninstitutional services from any organization—

15 ‘‘(A) operating under a waiver under—

16 ‘‘(i) section 603(c) of the Social Secu17 rity Amendments of 1983 (as in effect on

18 the day before the date of the enactment

19 of the PACE Provider Act of 1995);

20 ‘‘(ii) section 9412(b) of the Omnibus

21 Budget Reconciliation Act of 1986 (as so

22 in effect); or

23 ‘‘(iii) the PACE Provider Act of 1995;

24 or
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1 ‘‘(B) which has become a provider under

2 this title after a determination that the organi3 zation has successfully completed a trial period

4 under the PACE Provider Act of 1995.’’.

5 SEC. 4. REPEALS; EFFECTIVE DATE AND APPLICATION TO

6 EXISTING WAIVERS.

7 (a) REPEALS.—Section 603(c) of the Social Security

8 Amendments of 1983, section 9220 of the Consolidated

9 Omnibus Budget Reconciliation Act of 1985, and section

10 9412(b) of the Omnibus Budget Reconciliation Act of

11 1986 are repealed.

12 (b) EFFECTIVE DATE.—

13 (1) IN GENERAL.—Except as provided in para14 graph (2), the provisions of subsection (a) shall be

15 effective on the date of the enactment of this Act.

16 (2) APPLICATION TO EXISTING WAIVERS.—

17 (A) IN GENERAL.—To the extent that any

18 organization is operating on the date of the en19 actment of this Act under the On Lok waiver

20 (referred to in section 603(c) of the Social Se21 curity Amendments of 1983 and extended by

22 section 9220 of the Consolidated Omnibus

23 Budget Reconciliation Act of 1985), or a waiver

24 granted under section 9412(b) of the Omnibus

25 Budget Reconciliation Act of 1986, the provi-
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1 sions of such sections (as in effect before the

2 date of the enactment of this Act) shall con3 tinue to apply with respect to such waiver

4 until—

5 (i) the organization is eligible to be a

6 provider under this Act;

7 (ii) the Secretary issues and imple8 ments the regulations referred to in section

9 2(c)(1); and

10 (iii) the organization has had a rea11 sonable opportunity to apply to be recog12 nized as a provider, such application has

13 been formally considered by the Secretary,

14 and a final determination on the applica15 tion has been made.

16 (B) CONTINUATION OF WAIVER UNTIL EF17 FECTIVE DATE.—The waiver authority of any

18 organization applying for recognition under

19 subparagraph (A) shall continue until—

20 (i) the date that the Secretary deter21 mines that such organization is eligible to

22 be and can actually serve as a provider

23 under this Act; or

24 (ii) if the Secretary determines that

25 the organization is not eligible to be a pro-
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1 vider under this Act, the expiration of the

2 waiver.

3 (C) CONSIDERATION OF PERIODS OF OP4 ERATION PRIOR TO THIS ACT.—In determining

5 whether an organization is eligible to be a pro6 vider under subparagraph (A), the Secretary—

7 (i) in determining whether the organi8 zation has successfully completed a trial

9 period under this Act, shall consider any

10 period before the date of the enactment of

11 this Act during which an organization was

12 operating under a waiver described in sub13 paragraph (A); and

14 (ii) shall treat the organization as eli15 gible to be a provider under this Act for

16 periods after the date of the enactment of

17 this Act and before such determination if

18 the organization meets the requirements of

19 the regulations issued under section

20 2(c)(1) during such periods.

Æ