I 

113TH CONGRESS 

2D SESSION H. R. 4930 

To amend titles XIX and XXI of the Social Security Act to provide States 

with the option of providing services to children with medically complex 

conditions under the Medicaid program and Children’s Health Insurance 

Program through a care coordination program focused on improving 

health outcomes for children with medically complex conditions and lowering costs, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 20, 2014 

Mr. BARTON (for himself, Ms. CASTOR of Florida, Ms. HERRERA BEUTLER, 

Mr. GENE GREEN of Texas, and Ms. ESHOO) introduced the following 

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

A BILL 

To amend titles XIX and XXI of the Social Security Act 

to provide States with the option of providing services 

to children with medically complex conditions under the 

Medicaid program and Children’s Health Insurance Program through a care coordination program focused on 

improving health outcomes for children with medically 

complex conditions and lowering costs, 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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Advancing Care for 

3 Exceptional Kids Act of 2014’’ or the ‘‘ACE Kids Act of 

4 2014’’. 

5 SEC. 2. FINDINGS. 

6 Congress finds the following: 

7 (1) Approximately 3,000,000 children in the 

8 United States suffer from medically complex condi9 tions and approximately 2,000,000 of such children 

10 are enrolled in State plans under the Medicaid pro11 gram under title XIX of the Social Security Act. 

12 (2) Such children account for an estimated 6 

13 percent of Medicaid enrollees and approximately 40 

14 percent of children’s Medicaid spending is due to the 

15 severity of the illnesses of such children. 

16 (3) The creation of nationally designated chil17 dren’s hospital networks focused upon better coordi18 nation and integration of care for such pediatric 

19 population will result in improved health outcomes 

20 and savings under the Medicaid program and the 

21 Children’s Health Insurance Program under title 

22 XXI of the Social Security Act. 


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1 SEC. 3. ESTABLISHMENT OF MEDICAID AND CHIP CARE CO2 ORDINATION PROGRAM FOR CHILDREN WITH 

3 MEDICALLY COMPLEX CONDITIONS AS MED4 ICAID STATE OPTION. 

5 (a) MEDICAID.—Title XIX of the Social Security Act 

6 (42 U.S.C. 1396 et seq.) is amended— 

7 (1) in section 1905(a) (42 U.S.C. 1396d(a))— 

8 (A) by striking ‘‘and’’ at the end of para9 graph (27); 

10 (B) by redesignating paragraph (29) as 

11 paragraph (30); and 

12 (C) by inserting after paragraph (28) the 

13 following new paragraph: 

14 ‘‘(29) items and services furnished under an 

15 MCCC program under section 1947 to eligible chil16 dren enrolled in an MCCC program under such sec17 tion.’’; and 

18 (2) by adding at the end the following new sec19 tion: 

20 ‘‘SEC. 1947. MEDICAID CHILDREN’S CARE COORDINATION 

21 PROGRAMS FOR CHILDREN WITH COMPLEX 

22 MEDICAL CONDITIONS. 

23 ‘‘(a) ESTABLISHMENT.— 

24 ‘‘(1) IN GENERAL.—Beginning January 1, 

25 2015, a State, at its option as a State plan amend26 ment, may elect to provide medical assistance for 


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1 items and services furnished to eligible children en2 rolled in an MCCC program that meets the require3 ments of this section. As a condition on an eligible 

4 child’s receipt of medical assistance under this title, 

5 the State shall require, under such an amendment, 

6 that the eligible child be enrolled in an MCCC pro7 gram that meets the requirements of this section. 

8 ‘‘(b) MCCC PROGRAM REQUIREMENTS.—An MCCC 

9 program meets the requirements of this section if the 

10 MCCC program— 

11 ‘‘(1) coordinates, integrates, and provides for 

12 the furnishing of the full range of MCCC program 

13 services to eligible children enrolled in the program; 

14 ‘‘(2) enrolls eligible children in accordance with 

15 subsection (c); 

16 ‘‘(3) is operating under a program agreement 

17 that meets the requirements of subsection (d); and 

18 ‘‘(4) meets the pediatric network adequacy 

19 standards developed under subsection (e). 

20 ‘‘(c) ELIGIBILITY DETERMINATIONS; ASSIGN21 MENT.— 

22 ‘‘(1) ENROLLMENT.—Subject to the assignment 

23 requirements of paragraph (2), the enrollment and 

24 disenrollment of eligible children in an MCCC pro25 gram shall be carried out in accordance with regulaVerDate Mar 15 2010 03:31 Jun 26, 2014 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4930.IH H4930

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1 tions issued by the Secretary and the applicable pro2 gram agreement. 

3 ‘‘(2) NETWORK ASSIGNMENT.— 

4 ‘‘(A) IN GENERAL.—Eligible children shall 

5 be prospectively enrolled in an MCCC program 

6 by initially assigning such eligible children to a 

7 nationally designated children’s hospital net8 work for a period of not less than 90 days be9 ginning on the date on which the child is ini10 tially assigned to such hospital network. 

11 ‘‘(B) BASIS FOR INITIAL ASSIGNMENT.— 

12 Such an assignment shall be based upon any of 

13 the following factors (or a combination thereof): 

14 ‘‘(i) The prevalence of visits by the 

15 child to a pediatrician or other specialist 

16 who is participating in the nationally des17 ignated children’s hospital network. 

18 ‘‘(ii) The selection of the child’s fam19 ily. 

20 ‘‘(iii) The location of the primary resi21 dence of the child. 

22 ‘‘(iv) The proximity of the child to re23 gional referral networks established by the 

24 nationally designated children’s hospital 

25 network. 


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1 ‘‘(C) LIMITATION ON CERTAIN ASSIGN2 MENTS.—An assignment of a child under clause 

3 (iii) or (iv) of subparagraph (B) may only be 

4 made in the case of a nationally designated chil5 dren’s hospital network that offers medical 

6 home access within 30 miles of the primary res7 idence of the child. 

8 ‘‘(D) REASSIGNMENT.—Following the 90- 

9 day period referred to in subparagraph (A), the 

10 child may elect— 

11 ‘‘(i) to be assigned to the nationally 

12 designated children’s hospital network of 

13 their choice that has an MCCC program 

14 agreement in effect with respect to an 

15 MCCC program in which the child is eligi16 ble to enroll; or 

17 ‘‘(ii) to not participate in any MCCC 

18 program and receive care through enroll19 ment in the State plan under this title or 

20 the State child health plan under title 

21 XXI. 

22 ‘‘(d) PROGRAM AGREEMENTS.— 

23 ‘‘(1) IN GENERAL.—The Secretary, in close co24 operation with the State administering agencies 

25 electing to provide the medical assistance described 


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1 in subsection (a), shall establish procedures for en2 tering into, extending, and terminating program 

3 agreements under this section. 

4 ‘‘(2) TERMS.— 

5 ‘‘(A) IN GENERAL.—A program agreement 

6 entered into under this section by the Sec7 retary, a State administering agency, and a na8 tionally designated children’s hospital network 

9 shall provide for each of the following terms: 

10 ‘‘(i) The agreement shall designate 

11 the service area of the MCCC program 

12 that is the subject of the agreement. 

13 ‘‘(ii) The agreement shall be effective 

14 for a contract year, but may be extended 

15 for additional contract years in the absence 

16 of a notice by a party to terminate, and is 

17 subject to termination by the Secretary 

18 and the State administering agency at any 

19 time for cause (as provided under the 

20 agreement). 

21 ‘‘(iii) The agreement shall require 

22 that the nationally designated children’s 

23 hospital network submit care management 

24 network and coverage plans to the Sec25 retary that are centered around medical 


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1 home models and that describe the govern2 ance of the network. 

3 ‘‘(iv) The agreement shall require the 

4 hospital network to meet all applicable re5 quirements imposed by State and local 

6 laws. 

7 ‘‘(v) The agreement shall require such 

8 State, in the case of eligible children who 

9 are residents of the State, to make pay10 ments to the hospital network, regardless 

11 of whether MCCC program services are 

12 furnished to such eligible children in an13 other State. 

14 ‘‘(vi) The agreement shall require that 

15 the standards and measures developed 

16 under subsection (e) be applied to the hos17 pital network, including measures requir18 ing, with respect to network adequacy 

19 standards, that the hospital network estab20 lish such provider networks for primary, 

21 secondary, and tertiary care as are nec22 essary to ensure the adequate furnishing of 

23 MCCC program services to eligible children 

24 enrolled in the MCCC program that is the 

25 subject of the agreement. 


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1 ‘‘(vii) The agreement shall require the 

2 hospital network to comply with the data 

3 collection and recordkeeping requirements 

4 of subparagraph (C). 

5 ‘‘(viii) The agreement shall require 

6 the hospital network to accept as payment 

7 any payment made using the risk-based 

8 methodology developed under subsection 

9 (g). 

10 ‘‘(ix) The agreement shall contain 

11 such additional terms and conditions as 

12 the parties may agree to, so long as such 

13 terms and conditions are consistent with 

14 this section. 

15 ‘‘(B) SERVICE AREA OVERLAP.—In desig16 nating a service area under subparagraph 

17 (A)(i), the Secretary (in consultation with the 

18 relevant State administering agency) shall con19 sider the impacts of designating an area that is 

20 already covered under another program agree21 ment, for purposes of avoiding the unnecessary 

22 duplication of services and the impairment of 

23 the financial and service viability of another 

24 MCCC program. 


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1 ‘‘(C) DATA AND RECORDKEEPING RE2 QUIREMENTS.—The data collection and record3 keeping requirements under this subparagraph, 

4 with respect to a nationally designated chil5 dren’s hospital network, are as follows: 

6 ‘‘(i) The hospital network shall collect 

7 claims data on claims submitted with re8 spect to eligible children who are furnished 

9 MCCC program services under an MCCC 

10 program. Such data shall be reported in a 

11 standardized format and made available to 

12 the public for purposes of establishing a 

13 national database on such claims. 

14 ‘‘(ii) The hospital network shall main15 tain, and provide the Secretary and the 

16 State administering agency access to, the 

17 records relating to the MCCC program op18 erated by the hospital network, including 

19 pertinent financial, medical, and personnel 

20 records. 

21 ‘‘(iii) The hospital network shall sub22 mit to the Secretary and the State admin23 istering agency such reports as the Sec24 retary finds (in consultation with the State 

25 administering agency) necessary to monitor 


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1 the operation, cost, and effectiveness of the 

2 MCCC program operated by the hospital 

3 network. 

4 ‘‘(3) TERMINATION OF AGREEMENTS.—The 

5 Secretary shall issue regulations establishing the cir6 cumstances under which— 

7 ‘‘(A) the Secretary or a State admin8 istering agency may terminate an MCCC pro9 gram agreement for cause; and 

10 ‘‘(B) a nationally designated children’s 

11 hospital network may terminate such an agree12 ment after appropriate notice to the Secretary, 

13 the State administering agency, and enrollees. 

14 ‘‘(e) QUALITY ASSURANCE.— 

15 ‘‘(1) DEVELOPMENT OF STANDARDS AND MEAS16 URES.—The Secretary shall, in consultation with na17 tionally designated children’s hospital networks and 

18 national pediatric policy organizations (such as the 

19 Children’s Hospital Association and the American 

20 Academy of Pediatrics)— 

21 ‘‘(A) establish a national set of quality as22 surance and improvement protocols and proce23 dures to apply under MCCC programs; 

24 ‘‘(B) develop pediatric quality measures; 


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1 ‘‘(C) develop pediatric network adequacy 

2 standards for access by eligible children to 

3 MCCC program services; and 

4 ‘‘(D) develop criteria for national pediatric5 focused care coordination for eligible children. 

6 ‘‘(2) USE OF PQMP MEASURES.—In carrying 

7 out subparagraph (A), the Secretary shall apply, to 

8 the extent applicable, child health quality measures 

9 and measures for centers of excellence for children 

10 with complex needs developed under this title, title 

11 XXI, and section 1139A and take into account 

12 HEDIS quality measures as required under section 

13 1852(e)(3) and other quality measures. 

14 ‘‘(f) STANDARD MEDICAID DATA SET.— 

15 ‘‘(1) IN GENERAL.—The Secretary, the States, 

16 and the nationally designated children’s hospital net17 works shall collaborate to obtain consistent and 

18 verifiable Medicaid Analytic Extract data or a com19 parable data set and shall establish data-sharing 

20 agreements to further support collaborative planning 

21 and care coordination for medically complex chil22 dren. 

23 ‘‘(2) CLAIMS ANALYSIS.—The Secretary shall— 

24 ‘‘(A) perform claims analysis on the data 

25 set developed under paragraph (1) to determine 


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1 the utilization of items and services furnished 

2 under an MCCC program to eligible children; 

3 and 

4 ‘‘(B) submit to Congress and make pub5 licly available on the Internet site of the Cen6 ters for Medicare and Medicaid services, a re7 port on such claims in a standardized format 

8 for purposes of building a national database. 

9 ‘‘(3) PAYMENT FOR REPORTING INCENTIVES.— 

10 The Secretary may provide for pay-for-reporting in11 centives during the first two years of any MCCC 

12 program agreement entered into under this section 

13 to ensure participation and analysis of consistent 

14 data under this paragraph to enable the development 

15 of an appropriate risk-based payment methodology 

16 under subsection (g). 

17 ‘‘(g) PAYMENTS TO NATIONALLY DESIGNATED CHIL18 DREN’S HOSPITAL NETWORKS.— 

19 ‘‘(1) IN GENERAL.—The State plan shall pro20 vide for payment to nationally designated children’s 

21 hospital networks pursuant to the terms of an 

22 MCCC program agreement using a risk-based pay23 ment methodology (or methodologies) established by 

24 the Secretary in accordance with this subsection. 


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1 ‘‘(2) TRANSITION FROM FEE-FOR-SERVICE TO

2 RISK-BASED PAYMENT MODEL.— 

3 ‘‘(A) IN GENERAL.—Payment to nationally 

4 designated children’s hospital networks under 

5 this subsection shall be based initially on a fee6 for-service payment model and shall gradually 

7 transition, over a 5-year period, to an equitable, 

8 risk-based payment model using a methodology 

9 developed under paragraph (3). For the first 

10 two years of such period, a nationally des11 ignated children’s hospital network may receive, 

12 in addition to any fee-for-service payments 

13 made to such hospital network, per capita care 

14 coordination payments with respect to expendi15 tures for items and services furnished to eligible 

16 children enrolled in the MCCC program oper17 ated by the hospital network through medical 

18 home programs and other care coordination ac19 tivities for which an all-inclusive payment model 

20 is more suitable than fee-for-service reimburse21 ment. 

22 ‘‘(B) DATA ANALYSIS DURING INITIAL PE23 RIOD.—During the first two years of the imple24 mentation of an MCCC program, the Secretary 

25 shall analyze data collected under subsection (f) 


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1 for purposes of developing a risk-based payment 

2 methodology that would be implemented begin3 ning with the third year of implementation of 

4 the MCCC program. 

5 ‘‘(3) DEVELOPMENT OF RISK-BASED PAYMENT

6 METHODOLOGY.—The Secretary shall develop pay7 ment methodologies under this subsection in coordi8 nation with the Medicaid and CHIP Payment and 

9 Access Commission and the pediatric health care 

10 provider community that— 

11 ‘‘(A) take into account the data analyzed 

12 under paragraph (2)(B); 

13 ‘‘(B) are actuarially sound, as determined 

14 by the Secretary and the relevant State admin15 istering agency, in coordination with National 

16 Association of Insurance Commissioners, using 

17 an actuarial methodology that is adopted using 

18 historic pediatric claims data; 

19 ‘‘(C) include— 

20 ‘‘(i) a risk adjustment method, re-in21 surance system, and risk-corridor proce22 dure to account for variations in acuity of 

23 the eligible children enrolled in MCCC pro24 grams; and 

25 ‘‘(ii) a shared-savings component; and 


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1 ‘‘(D) may provide for an model for making 

2 payments other than payments made on a per3 member, per-month basis. 

4 ‘‘(h) WAIVERS OF REQUIREMENTS.—With respect to 

5 carrying out an MCCC program under this section, the 

6 following provisions of law shall not apply: 

7 ‘‘(1) Section 1902(a)(1), relating to 

8 statewideness. 

9 ‘‘(2) Section 1902(a)(10), insofar as such sec10 tion relates to comparability of services among dif11 ferent population groups. 

12 ‘‘(3) Sections 1902(a)(23) and 1915(b)(4), re13 lating to freedom of choice of providers. 

14 ‘‘(4) Section 1903(m)(2)(A), insofar as such 

15 section would prohibit a nationally designated chil16 dren’s hospital network from receiving certain pay17 ments. 

18 ‘‘(5) Such other provisions of this title, title 

19 XVIII, sections 1128A and 1128B, and any provi20 sions of the Federal antitrust laws as the Secretary 

21 determines are inapplicable or the waiver of which 

22 are necessary for purposes of carrying out an MCCC 

23 program under this section. 

24 ‘‘(i) PREEMPTION OF STATE LAW.—A State may not 

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1 dren’s hospital network’s operation of an MCCC program 

2 under a program agreement that meets the requirements 

3 of this section that is inconsistent with or would otherwise 

4 impede the satisfaction by such hospital network of the 

5 requirements of this section (including the requirements 

6 of such program agreement). 

7 ‘‘(j) DEFINITIONS.—In this section: 

8 ‘‘(1) ELIGIBLE CHILD.—The term ‘eligible 

9 child’ means, with respect to an MCCC program, an 

10 individual who is under the age of 18 and who— 

11 ‘‘(A) is eligible for medical assistance 

12 under the State plan under this title or child 

13 health assistance under the State child health 

14 plan under title XXI; and 

15 ‘‘(B) has, or is at a heightened risk of de16 veloping, a chronic, physical, developmental, be17 havioral, or emotional condition that— 

18 ‘‘(i) affects two or more body systems; 

19 ‘‘(ii) requires intensive care coordina20 tion to avoid excessive hospitalizations or 

21 emergency department visits; or 

22 ‘‘(iii) meets the criteria for medical 

23 complexity using risk adjustment meth24 odologies (such as Clinical Risk Groups) 

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1 tion with a national panel of pediatric ex2 perts. 

3 ‘‘(2) MCCC PROGRAM.—The term ‘MCCC pro4 gram’ means a Medicaid coordinated care program 

5 that provides eligible children with MCCC program 

6 services through a nationally designated children’s 

7 hospital network in accordance with a program 

8 agreement that meets the requirements of subsection 

9 (d). 

10 ‘‘(3) MCCC PROGRAM SERVICES.—The term 

11 ‘MCCC program services’ means the full range of 

12 items and services for which medical assistance is 

13 available under a State plan for children, including 

14 pediatric care management services and pediatric-fo15 cused care coordination and health promotion, as 

16 specified in the program agreement. 

17 ‘‘(4) QUALIFIED CHILDREN’S HOSPITAL.—The 

18 term ‘qualified children’s hospital’ means a chil19 dren’s hospital that— 

20 ‘‘(A) qualifies to receive payment under 

21 section 340E of the Public Health Service Act 

22 (relating to children’s hospitals that operate 

23 graduate medical education programs); or 

24 ‘‘(B) meets 3 or more of the following cri25 teria: 


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1 ‘‘(i) MINIMUM PEDIATRIC DIS2 CHARGES.—The hospital has at least 5,000 

3 annual pediatric discharges (including neo4 nates, but excluding obstetrics and normal 

5 newborns) for the most recent cost report6 ing period for which data are available. 

7 ‘‘(ii) MINIMUM NUMBER OF BEDS.— 

8 The hospital has 100 licensed pediatric 

9 beds, not including beds in neonatal inten10 sive care units but including beds in pedi11 atric intensive care units and other acute 

12 care beds. 

13 ‘‘(iii) ACCESS TO PEDIATRIC EMER14 GENCY SERVICES.—The hospital has access 

15 (through ownership or otherwise) to pedi16 atric emergency services. 

17 ‘‘(iv) MEDICAID RELIANT.—At least 

18 30 percent of the pediatric discharges or 

19 inpatient days (excluding observation days) 

20 in the hospital for the most recent cost re21 porting period for which data are available 

22 were children eligible for medical assist23 ance under this title or for children’s 

24 health assistance under title XXI. 


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1 ‘‘(v) AFFILIATION WITH ACCREDITED

2 PEDIATRIC RESIDENCY TRAINING PRO3 GRAM.—The hospital sponsors or is affili4 ated with a pediatric residency program 

5 that is accredited by the Accreditation 

6 Council for Graduate Medical Education. 

7 ‘‘(vi) PEDIATRIC MEDICAL HOME PRO8 GRAMS.—The hospital has established and 

9 implemented demonstrable pediatric med10 ical home programs dedicated to medically 

11 complex children. 

12 ‘‘(5) NATIONALLY DESIGNATED CHILDREN’S

13 HOSPITAL NETWORK.—The term ‘nationally des14 ignated children’s hospital network’ means a net15 work of hospitals and health care providers— 

16 ‘‘(A) anchored by a qualified children’s 

17 hospital or hospitals with principal governance 

18 responsibility over the hospital network; 

19 ‘‘(B) in which the full complement of 

20 health care providers needed to provide the best 

21 care for children in the network participate; and 

22 ‘‘(C) that represents the interests of physi23 cians, other health care providers, parents of 

24 medically complex children, and other relatives 

25 of such children. 


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1 ‘‘(6) PROGRAM AGREEMENT.—The term ‘pro2 gram agreement’ means, with respect to a nationally 

3 designated children’s hospital network, an agree4 ment, between the hospital network, the Secretary, 

5 and a State administering agency for the operation 

6 of an MCCC program by the hospital network in the 

7 State that meets the requirements of this section. 

8 ‘‘(7) STATE ADMINISTERING AGENCY.—The 

9 term ‘State administering agency’ means, with re10 spect to the operation of an MCCC program in a 

11 State, the agency of that State (which may be the 

12 single agency responsible for administration of the 

13 State plan under this title in the State) responsible 

14 for administering program agreements under this 

15 section.’’. 

16 (b) APPLICATION UNDER CHIP.—Section 

17 2107(e)(1) of the Social Security Act (42 U.S.C. 

18 1397gg(e)(1)) is amended by adding at the end the fol19 lowing new subparagraph: 

20 ‘‘(P) Section 1947 (relating to Medicaid 

21 children’s care coordination programs for chil22 dren with complex medical conditions).’’. 

23 (c) REGULATIONS.—Not later than 120 days after 

24 the date of the enactment of this Act, the Secretary of 

25 Health and Human Services shall make rules on the 


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1 record, after opportunity for an agency hearing to carry 

2 out the amendments made by this section in accordance 

3 with sections 556 and 557 of title 5, United States Code. 

Æ 


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