I 

110TH CONGRESS 

2D SESSION H. R. 5721 

To amend title XIX of the Social Security Act to provide for a DSH redistribution pool from unexpended Medicaid DSH allotments in order to 

increase Medicaid DSH allotments for low DSH States and to provide 

grants for health access networks serving the uninsured. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 8, 2008 

Mr. SULLIVAN (for himself, Mr. BOREN, Mr. ROSS, Mr. LUCAS, Mr. COLE of 

Oklahoma, Mr. OBERSTAR, and Ms. FALLIN) introduced the following 

bill; which was referred to the Committee on Energy and Commerce 

A BILL 

To amend title XIX of the Social Security Act to provide 

for a DSH redistribution pool from unexpended Medicaid 

DSH allotments in order to increase Medicaid DSH allotments for low DSH States and to provide grants for 

health access networks serving the uninsured. 

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 ‘‘Strengthening the 

5 Safety Net Act of 2008’’. 


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1 SEC. 2. APPLICATION OF UNEXPENDED MEDICAID DSH AL2 LOTMENTS FOR INCREASED ALLOTMENTS 

3 FOR LOW DSH STATES AND FOR HEALTH 

4 NETWORK ACCESS GRANTS. 

5 (a) ESTABLISHMENT OF DSH REDISTRIBUTION

6 POOL FROM UNEXPENDED MEDICAID DSH ALLOT7 MENTS.—Subsection (f) of section 1923 of the Social Se8 curity Act (42 U.S.C. 1396r–4) is amended— 

9 (1) by redesignating paragraph (7) as para10 graph (8); and 

11 (2) by inserting after paragraph (6) the fol12 lowing new paragraph: 

13 ‘‘(7) DSH REDISTRIBUTION POOL FROM POR14 TION OF UNEXPENDED DSH ALLOTMENTS TO FUND

15 INCREASE IN ALLOTMENTS FOR LOW DSH STATES

16 AND HEALTH NETWORK ACCESS GRANTS.— 

17 ‘‘(A) ESTABLISHMENT.—There is estab18 lished a DSH redistribution pool in the amount 

19 provided under this paragraph. Such amount 

20 shall be determined by the Secretary at the be21 ginning of each fiscal year and the Secretary 

22 may adjust such amount in subsequent fiscal 

23 years to take into account errors in estimates 

24 made for previous fiscal years. The amount in 

25 such pool shall be available for obligation and 

26 expenditure without fiscal year limitation. 


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1 ‘‘(B) ADDITION OF UNEXPENDED DSH AL2 LOTMENTS.—At the beginning of each fiscal 

3 year (beginning with fiscal year 2009), there 

4 shall be added to the DSH redistribution pool 

5 an amount equal to the amount by which— 

6 ‘‘(i) the total of the DSH allotments 

7 for all States for the third preceding fiscal 

8 year; exceeded 

9 ‘‘(ii) the total Federal financial par10 ticipation under this title attributable to 

11 such allotments for such fiscal year. 

12 ‘‘(C) REDUCTION FOR EXPENDITURES RE13 SULTING FROM INCREASED ALLOTMENTS FOR

14 LOW DSH STATES AND FOR HEALTH NETWORK

15 ACCESS GRANTS.—At the beginning of each fis16 cal year (beginning with fiscal year 2010), there 

17 shall be subtracted from the DSH redistribu18 tion pool an amount equal to the sum of— 

19 ‘‘(i) the aggregate increase in Federal 

20 financial participation under this title at21 tributable to the amendments made by sec22 tion 2(b) of the Strengthening the Safety 

23 Net Act of 2008 for the previous fiscal 

24 year; and 


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1 ‘‘(ii) the amount obligated on grants 

2 under subsection (k) for such previous fis3 cal year.’’. 

4 (b) INCREASE IN DSH ALLOTMENTS FOR LOW DSH 

5 STATES; QUALIFICATION OF LOW DSH STATES BASED

6 ON FISCAL YEAR 2004 DATA.—Subsection (f)(5) of such 

7 section is amended— 

8 (1) in subparagraph (B)— 

9 (A) by striking ‘‘and’’ at the end of clause 

10 (ii); 

11 (B) in clause (iii)— 

12 (i) by striking ‘‘2009’’ and inserting 

13 ‘‘2014’’; 

14 (ii) by inserting ‘‘, subject to subpara15 graph (D),’’ after ‘‘shall be’’; and 

16 (iii) by redesignating such clause as 

17 clause (iv); and 

18 (C) by inserting after clause (ii) the fol19 lowing new clause: 

20 ‘‘(iii) each succeeding fiscal year be21 fore fiscal year 2014 shall be, subject to 

22 subparagraph (D), the DSH allotment for 

23 the State for the previous fiscal year in24 creased by 19.5 percent; and’’; and 


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1 (2) by adding at the end the following new sub2 paragraphs: 

3 ‘‘(C) ADDITIONAL STATES COVERED FOR

4 FISCAL YEAR 2009 AND SUBSEQUENT YEARS.— 

5 In the case of a State not described in subpara6 graph (B) in which the total expenditures under 

7 the State plan (including Federal and State 

8 shares) for disproportionate share hospital ad9 justments under this section for fiscal year 

10 2004, as reported to the Administrator of the 

11 Centers for Medicare & Medicaid Services as of 

12 August 31, 2007, is greater than 0 but less 

13 than 3 percent of the State’s total amount of 

14 expenditures under the State plan for medical 

15 assistance during the fiscal year, the DSH al16 lotment for the State with respect to— 

17 ‘‘(i) fiscal year 2009 and any suc18 ceeding fiscal year before fiscal year 2014 

19 shall be, subject to subparagraph (D), the 

20 DSH allotment for the State for the pre21 vious fiscal year increased by 19.5 percent; 

22 and 

23 ‘‘(ii) any subsequent fiscal year shall 

24 be, subject to subparagraph (D), the DSH 

25 allotment for the State for the previous fisVerDate Aug 31 2005 02:15 Apr 12, 2008 Jkt 069200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5721.IH H5721

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1 cal year subject to an increase for inflation 

2 as provided in paragraph (3)(A). 

3 ‘‘(D) LIMITATION ON INCREASES TO

4 AMOUNT AVAILABLE FROM DSH REDISTRIBU5 TION POOL.—If the Secretary estimates for a 

6 fiscal year (beginning with fiscal year 2009) 

7 that— 

8 ‘‘(i) the amount of additional expendi9 tures in the fiscal year resulting from the 

10 application of an increase in DSH allot11 ments under subparagraphs (B) and (C) 

12 beginning with fiscal year 2009 of 19.5 

13 percent (instead of the application of an 

14 increase for inflation as provided in para15 graph (3)(A)), exceeds 

16 ‘‘(ii) the amount available for obliga17 tion from the DSH redistribution pool 

18 under paragraph (7) for the fiscal year, 

19 the Secretary shall reduce the increase in the 

20 DSH allotments otherwise provided under such 

21 subparagraphs for the fiscal year in a pro-rata 

22 manner so that the amount of additional ex23 penditures in the fiscal year resulting from the 

24 application of such subparagraphs is equal to 

25 the amount described in clause (ii) for the fiscal 


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1 year. A reduction in a DSH allotment for a 

2 State under this subparagraph shall not affect 

3 the computation of the DSH allotment for the 

4 State under subparagraph (B) or (C) for the 

5 subsequent fiscal year.’’. 

6 (c) DEMONSTRATION GRANTS TO HEALTH ACCESS

7 NETWORKS.—Such section is further amended by adding 

8 at the end the following new subsection: 

9 ‘‘(k) DEMONSTRATION GRANTS TO HEALTH ACCESS

10 NETWORKS.— 

11 ‘‘(1) IN GENERAL.—From the amount of funds 

12 made available under paragraph (6)(A) for a fiscal 

13 year, the Secretary shall award demonstration 

14 grants under this subsection to health access net15 works for such fiscal year for the purpose of improv16 ing access, quality, and continuity of care for unin17 sured individuals through better coordination of care 

18 by the network. 

19 ‘‘(2) HEALTH ACCESS NETWORK DEFINED.— 

20 ‘‘(A) IN GENERAL.—In this subsection, the 

21 term ‘health access network’ means an entity 

22 representing a collection of safety net providers, 

23 including hospitals, community health centers, 

24 public health departments, physicians, safety 

25 net health plans, federally qualified health cenVerDate Aug 31 2005 02:15 Apr 12, 2008 Jkt 069200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5721.IH H5721

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1 ters, or other recognized safety net providers, 

2 that— 

3 ‘‘(i) is organized for the purpose of re4 structuring and improving the access, qual5 ity, and continuity of care to the uninsured 

6 and underinsured; and 

7 ‘‘(ii) offers patients access to all levels 

8 of care, including primary, outpatient, spe9 cialty, certain ancillary services, and acute 

10 inpatient care, within a community or 

11 across a broad spectrum of providers 

12 across a service region or State. 

13 ‘‘(B) INCLUSION OF SECTION 330 NET14 WORKS AND PLANS.—Such term includes net15 works and plans that meet the requirements for 

16 funding under section 330(e)(1)(C) of the Pub17 lic Health Service Act (42 U.S.C. 

18 254b(e)(1)(C)). 

19 ‘‘(C) INCLUSION OF INTEGRATED HEALTH

20 CARE SYSTEMS.— 

21 ‘‘(i) IN GENERAL.—Such term also in22 cludes an integrated health care system 

23 (including a pediatric system). 

24 ‘‘(ii) DEFINITION.—For purposes of 

25 this subparagraph, the term ‘integrated 


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1 health care system (including a pediatric 

2 system)’ means a health care provider 

3 that— 

4 ‘‘(I) is organized to provide care 

5 in a coordinated fashion; and 

6 ‘‘(II) assures access to a full 

7 range of primary, specialty, and hos8 pital care, to uninsured and under-in9 sured individuals, as appropriate. 

10 ‘‘(3) APPLICATION AND PLAN REQUIREMENT.— 

11 ‘‘(A) IN GENERAL.—In order to be eligible 

12 for a grant under this subsection, a health ac13 cess network shall— 

14 ‘‘(i) submit an application, in such 

15 form and manner as the Secretary shall 

16 specify; 

17 ‘‘(ii) submit with such application a 

18 plan that meets the requirements of sub19 paragraph (B); 

20 ‘‘(iii) identify in such plan measurable 

21 performance targets for at least 3 of the 

22 goals described in subparagraph (B); and 

23 ‘‘(iv) agree that a portion of the pay24 ment of grant funds for patient care serv25 ices after the first year for which such payVerDate Aug 31 2005 02:15 Apr 12, 2008 Jkt 069200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5721.IH H5721

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1 ment is made shall be contingent upon the 

2 health access network demonstrating suc3 cess in achieving such targets. 

4 ‘‘(B) PLAN REQUIREMENTS.—A health ac5 cess network that desires a grant under this 

6 subsection shall submit a plan to the Secretary 

7 that details how the network intends through 

8 the grant— 

9 ‘‘(i) to manage costs associated with 

10 the provision of health care services to un11 insured and underinsured individuals 

12 served by the network; 

13 ‘‘(ii) to improve access to, and the 

14 availability of, health care services provided 

15 to uninsured and underinsured individuals 

16 served by the network; 

17 ‘‘(iii) to enhance the quality and co18 ordination of health care services provided 

19 to uninsured and underinsured individuals 

20 served by the network; 

21 ‘‘(iv) to improve the health status of 

22 uninsured and underinsured individuals 

23 served by the network; and 


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1 ‘‘(v) to reduce health disparities in the 

2 population of uninsured and underinsured 

3 individuals served by the network. 

4 Nothing in this paragraph shall be construed as 

5 requiring a health access network operating in 

6 a State to operate on a Statewide basis or oth7 erwise to serve all uninsured and underinsured 

8 individuals in area served. 

9 ‘‘(C) AUTHORITY TO LIMIT NUMBER OF

10 GRANTS.—In awarding grants under this sub11 section, the Secretary may limit the grants in 

12 a manner so that each grantee is able to pro13 vide patient care services to the number of un14 insured individuals specified by each network in 

15 its grant application. 

16 ‘‘(4) USE OF FUNDS.— 

17 ‘‘(A) IN GENERAL.—A health access net18 work that receives funds under a grant under 

19 this subsection shall expend an amount equal to 

20 at least 90 percent of such funds for the provi21 sion of (or payment for) direct patient care 

22 services. 

23 ‘‘(B) RULE OF CONSTRUCTION REGARDING

24 DIRECT PATIENT CARE SERVICES.—For pur25 poses of subparagraph (A), the term ‘direct paVerDate Aug 31 2005 02:15 Apr 12, 2008 Jkt 069200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H5721.IH H5721

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1 tient care services’ means, with respect to a 

2 health access network, services, such as spe3 cialty medical care and diagnostic services, that 

4 are not available or are insufficiently available 

5 through the network’s providers other than 

6 under a grant under this subsection. 

7 ‘‘(C) PREFERENCE FOR SERVICES

8 THROUGH SAFETY NET PROVIDERS.—In pur9 chasing direct patient care services for unin10 sured and underinsured individuals under a 

11 grant under this subsection, health access net12 works shall, to the maximum extent feasible, 

13 endeavor to purchase such services from safety 

14 net providers. 

15 ‘‘(5) SUPPLEMENT, NOT SUPPLANT.—Funds 

16 paid to a health access network under a grant under 

17 this subsection shall supplement and not supplant, 

18 other Federal or State payments that are made to 

19 the network to support the provision of health care 

20 services to low-income or uninsured patients. 

21 ‘‘(6) FUNDING.— 

22 ‘‘(A) AVAILABILITY OF FUNDS FROM DSH

23 REDISTRIBUTION POOL.—To carry out this sub24 section there is hereby made available for each 

25 fiscal year (beginning with fiscal year 2009 and 


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1 ending with fiscal year 2013) and appropriated 

2 from the DSH redistribution pool established 

3 under subsection (d)(7), an amount equal to— 

4 ‘‘(i) the amount available for obliga5 tion from such pool in such fiscal year, re6 duced by 

7 ‘‘(ii) the Secretary’s estimate of the 

8 aggregate increase in Federal financial 

9 participation under this title for the fiscal 

10 year that will be attributable to the amend11 ments made by section 2(b) of the 

12 Strengthening the Safety Net Act of 2008. 

13 ‘‘(B) TREATMENT OF GRANT FUNDS.— 

14 Payments to a health access network under a 

15 grant under this subsection shall not be treated 

16 as a disproportionate share hospital payment 

17 adjustments under this section and shall not be 

18 counted against the DSH allotment for any 

19 State. 

20 ‘‘(C) NO STATE MATCHING REQUIRED.— 

21 Nothing in this subsection shall be construed as 

22 requiring a State to provide for any State 

23 matching funds to receive funds under this sub24 section. 


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1 ‘‘(D) AVAILABILITY.—The amount of any 

2 grant to a health access network under this 

3 subsection shall remain available for expendi4 ture under the grant through the end of the 

5 third fiscal year after the fiscal year in which 

6 the grant is made.’’. 

7 (d) CONFORMING DATE OF APPLICATION OF DSH 

8 HOSPITAL REQUIREMENT TO AVAILABILITY OF FUNDING

9 FOR LOW DSH STATES.—Subsection (d)(2)(A)(ii) of such 

10 section is amended by inserting before the period at the 

11 end the following: (or, in the case of a low DSH State 

12 described in subparagraph (B) or (C) of subsection (f)(5), 

13 the date of the enactment of the Strengthening the Safety 

14 Net Act of 2008). 

15 (e) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply beginning with fiscal year 2009. 

Æ 


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