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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 528 Introduced in Senate (IS)]

109th CONGRESS
  1st Session
                                 S. 528

  To authorize the Secretary of Health and Human Services to provide 
grants to States to conduct demonstration projects that are designed to 
enable medicaid-eligible individuals to receive support for appropriate 
   and necessary long-term services in the settings of their choice.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 3, 2005

 Mr. Harkin (for himself and Mr. Smith) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
  To authorize the Secretary of Health and Human Services to provide 
grants to States to conduct demonstration projects that are designed to 
enable medicaid-eligible individuals to receive support for appropriate 
   and necessary long-term services in the settings of their choice.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Money Follows the Person Act of 
2005''.

SEC. 2. MONEY FOLLOWS THE PERSON REBALANCING DEMONSTRATION.

    (a) Program Purpose and Authority.--The Secretary of Health and 
Human Services (in this section referred to as the ``Secretary'') is 
authorized to award, on a competitive basis, grants to States in 
accordance with this section for demonstration projects (each in this 
section referred to as an ``MFP demonstration project'') designed to 
achieve the following objectives with respect to institutional and home 
and community-based long-term care services under State medicaid 
programs:
            (1) Rebalancing.--Increase the use of home and community-
        based, rather than institutional, long-term care services.
            (2) Money follows the person.--Eliminate barriers or 
        mechanisms, whether in the State law, the State medicaid plan, 
        the State budget, or otherwise, that prevent or restrict the 
        flexible use of medicaid funds to enable medicaid-eligible 
        individuals to receive support for appropriate and necessary 
        long-term services in the settings of their choice.
            (3) Continuity of service.--Increase the ability of the 
        State medicaid program to assure continued provision of home 
        and community-based long-term care services to eligible 
        individuals who choose to transition from an institutional to a 
        community setting.
            (4) Quality assurance and quality improvement.--Ensure that 
        procedures are in place (at least comparable to those required 
        under the qualified HCB program) to provide quality assurance 
        for eligible individuals receiving medicaid home and community-
        based long-term care services and to provide for continuous 
        quality improvement in such services.
    (b) Definitions.--For purposes of this section:
            (1) Home and community-based long-term care services.--The 
        term ``home and community-based long-term care services'' 
        means, with respect to a State medicaid program, home and 
        community-based services (including home health and personal 
        care services) that are provided under the State's qualified 
        HCB program or that could be provided under such a program but 
        are otherwise provided under the medicaid program.
            (2) Eligible individual.--The term ``eligible individual'' 
        means, with respect to an MFP demonstration project of a State, 
        an individual in the State--
                    (A) who, immediately before beginning participation 
                in the MFP demonstration project--
                            (i) resides (and has resided, for a period 
                        of not less than six months or for such longer 
                        minimum period, not to exceed 2 years, as may 
                        be specified by the State) in an inpatient 
                        facility;
                            (ii) is receiving medicaid benefits for 
                        inpatient services furnished by such inpatient 
                        facility; and
                            (iii) with respect to whom a determination 
                        has been made that, but for the provision of 
                        home and community-based long-term care 
                        services, the individual would continue to 
                        require the level of care provided in an 
                        inpatient facility; and
                    (B) who resides in a qualified residence beginning 
                on the initial date of participation in the 
                demonstration project.
            (3) Inpatient facility.--The term ``inpatient facility'' 
        means a hospital, nursing facility, or intermediate care 
        facility for the mentally retarded. Such term includes an 
        institution for mental diseases, but only, with respect to a 
        State, to the extent medical assistance is available under the 
State medicaid plan for services provided by such institution.
            (4) Individual's authorized representative.--The term 
        `individual's authorized representative' means, with respect to 
        an eligible individual, the individual's parent, family member, 
        guardian, advocate, or other authorized representative of the 
        individual.
            (5) Medicaid.--The term ``medicaid'' means, with respect to 
        a State, the State program under title XIX of the Social 
        Security Act (including any waiver or demonstration under such 
        title or under section 1115 of such Act relating to such 
        title).
            (6) Qualified hcb program.--The term ``qualified HCB 
        program'' means a program providing home and community-based 
        long-term care services operating under medicaid, whether or 
        not operating under waiver authority.
            (7) Qualified residence.--The term ``qualified residence'' 
        means, with respect to an eligible individual--
                    (A) a home owned or leased by the individual or the 
                individual's family member;
                    (B) an apartment with an individual lease, with 
                lockable access and egress, and which includes living, 
                sleeping, bathing, and cooking areas over which the 
                individual or the individual's family has domain and 
                control; and
                    (C) a residence, in a community-based residential 
                setting, in which no more than 4 unrelated individuals 
                reside.
            (8) Qualified expenditures.--The term ``qualified 
        expenditures'' means expenditures by the State under its MFP 
        demonstration project for home and community-based long-term 
        care services for an eligible individual participating in the 
        MFP demonstration project, but only with respect to services 
        furnished during the 12-month period beginning on the date the 
        individual is discharged from an inpatient facility referred to 
        in paragraph (2)(A)(i).
            (9) Self-directed services.--The term ``self-directed'' 
        means, with respect to, home and community-based long-term care 
        services for an eligible individual, such services for the 
        individual which are planned and purchased under the direction 
        and control of such individual or the individual's authorized 
        representative, including the amount, duration, scope, 
        provider, and location of such services, under the State 
        medicaid program consistent with the following requirements:
                    (A) Assessment.--There is an assessment of the 
                needs, capabilities, and preferences of the individual 
                with respect to such services.
                    (B) Service plan.--Based on such assessment, there 
                is developed jointly with such individual or the 
                individual's authorized representative a plan for such 
                services for such individual that is approved by the 
                State and that--
                            (i) specifies those services which the 
                        individual or the individual's authorized 
                        representative would be responsible for 
                        directing;
                            (ii) identifies the methods by which the 
                        individual or the individual's authorized 
                        representative will select, manage, and dismiss 
                        providers of such services;
                            (iii) specifies the role of family members 
                        and others whose participation is sought by the 
                        individual or the individual's authorized 
                        representative with respect to such services;
                            (iv) is developed through a person-centered 
                        process that--
                                    (I) is directed by the individual 
                                or the individual's authorized 
                                representative;
                                    (II) builds upon the individual's 
                                capacity to engage in activities that 
                                promote community life and that 
                                respects the individual's preferences, 
                                choices, and abilities; and
                                    (III) involves families, friends, 
                                and professionals as desired or 
                                required by the individual or the 
                                individual's authorized representative;
                            (v) includes appropriate risk management 
                        techniques that recognize the roles and sharing 
                        of responsibilities in obtaining services in a 
                        self-directed manner and assure the 
                        appropriateness of such plan based upon the 
                        resources and capabilities of the individual or 
                        the individual's authorized representative; and
                            (vi) may include an individualized budget 
                        which identifies the dollar value of the 
                        services and supports under the control and 
                        direction of the individual or the individual's 
                        authorized representative.
                    (C) Budget Process.--With respect to individualized 
                budgets described in subparagraph (B)(vi), the State 
                application under subsection (c)--
                            (i) describes the method for calculating 
                        the dollar values in such budgets based on 
                        reliable costs and service utilization;
                            (ii) defines a process for making 
                        adjustments in such dollar values to reflect 
                        changes in individual assessments and service 
                        plans; and
                            (iii) provides a procedure to evaluate 
                        expenditures under such budgets.
            (10) State.--The term ``State'' has the meaning given such 
        term for purposes of title XIX of the Social Security Act.
    (c) State Application.--A State seeking approval of an MFP 
demonstration project shall submit to the Secretary, at such time and 
in such format as the Secretary requires, an application meeting the 
following requirements and containing such additional information, 
provisions, and assurances, as the Secretary may require:
            (1) Assurance of a public development process.--The 
        application contains an assurance that the State has engaged, 
and will continue to engage, in a public process for the design, 
development, and evaluation of the MFP demonstration project that 
allows for input from eligible individuals, the families of such 
individuals, authorized representatives of such individuals, providers, 
and other interested parties.
            (2) Operation in connection with qualified hcb program to 
        assure continuity of services.--The State will conduct the MFP 
        demonstration project for eligible individuals in conjunction 
        with the operation of a qualified HCB program that is in 
        operation (or approved) in the State for such individuals in a 
        manner that assures continuity of medicaid coverage for such 
        individuals so long as such individuals continue to be eligible 
        for medical assistance.
            (3) Demonstration project period.--The application shall 
        specify the period of the MFP demonstration project, which 
        shall include at least two consecutive fiscal years in the 5-
        fiscal-year period beginning with fiscal year 2006.
            (4) Service area.--The application shall specify the 
        service area or areas of the MFP demonstration project, which 
        may be a Statewide area or one or more geographic areas of the 
        State.
            (5) Targeted groups and numbers of individuals served.--The 
        application shall specify--
                    (A) the target groups of eligible individuals to be 
                assisted to transition from an inpatient facility to a 
                qualified residence during each fiscal year of the MFP 
                demonstration project;
                    (B) the projected numbers of eligible individuals 
                in each targeted group of eligible individuals to be so 
                assisted during each such year; and
                    (C) the estimated total annual qualified 
                expenditures for each fiscal year of the MFP 
                demonstration project.
            (6) Individual choice, continuity of care.--The application 
        shall contain assurances that--
                    (A) each eligible individual or the individual's 
                authorized representative will be provided the 
                opportunity to make an informed choice regarding 
                whether to participate in the MFP demonstration 
                project;
                    (B) each eligible individual or the individual's 
                authorized representative will choose the qualified 
                residence in which the individual will reside and the 
                setting in which the individual will receive home and 
                community-based long-term care services;
                    (C) the State will continue to make available, so 
                long as the State operates its qualified HCB program 
                consistent with applicable requirements, home and 
                community-based long-term care services to each 
                individual who completes participation in the MFP 
                demonstration project for as long as the individual 
                remains eligible for medical assistance for such 
                services under such qualified HCB program (including 
                meeting a requirement relating to requiring a level of 
                care provided in an inpatient facility and continuing 
                to require such services).
            (7) Rebalancing.--The application shall--
                    (A) provide such information as the Secretary may 
                require concerning the dollar amounts of State medicaid 
                expenditures for the fiscal year, immediately preceding 
                the first fiscal year of the State's MFP demonstration 
                project, for long-term care services and the percentage 
                of such expenditures that were for institutional long-
                term care services or were for home and community-based 
                long-term care services;
                    (B)(i) specify the methods to be used by the State 
                to increase, for each fiscal year during the MFP 
                demonstration project, the dollar amount of such total 
                expenditures for home and community-based long-term 
                care services and the percentage of such total 
                expenditures for long-term care services that are for 
                home and community-based long-term care services; and
                    (ii) describe the extent to which the MFP 
                demonstration project will contribute to accomplishment 
                of objectives described in subsection (a).
            (8) Money follows the person.--The application shall 
        describe the methods to be used by the State to eliminate any 
        legal, budgetary, or other barriers to flexibility in the 
        availability of medicaid funds to pay for long-term care 
        services for eligible individuals participating in the project 
        in the appropriate settings of their choice, including costs to 
        transition from an institutional setting to a qualified 
        residence.
            (9) Maintenance of effort and cost-effectiveness.--The 
        application shall contain or be accompanied by such information 
        and assurances as may be required to satisfy the Secretary 
        that--
                    (A) total expenditures under the State medicaid 
                program for home and community-based long-term care 
                services will not be less for any fiscal year during 
                the MFP demonstration project than for the greater of 
                such expenditures for--
                            (i) fiscal year 2004; or
                            (ii) any succeeding fiscal year before the 
                        first year of the MFP demonstration project; 
                        and
                    (B) in the case of a qualified HCB program 
                operating under a waiver under subsection (c) or (d) of 
                section 1915 of the Social Security Act (42 U.S.C. 
                1396n), but for the amount awarded under a grant under 
                this section, the State program would continue to meet 
                the cost-effectiveness requirements of subsection 
                (c)(2)(D) of such section or comparable requirements 
                under subsection (d)(5) of such section, respectively.
            (10) Waiver requests.--The application shall contain or be 
        accompanied by requests for any modification or adjustment of 
        waivers of medicaid requirements described in subsection 
        (d)(3), including adjustments to maximum numbers of individuals 
        included and package of benefits, including one-time 
        transitional services, provided.
            (11) Quality assurance and quality improvement.--The 
        application shall include--
                    (A) a plan satisfactory to the Secretary for 
                quality assurance and quality improvement for home and 
                community-based long-term care services under the State 
                medicaid program, including a plan to assure the health 
                and welfare of individuals participating in the MFP 
                demonstration project; and
                    (B) an assurance that the State will cooperate in 
                carrying out activities under subsection (f) to develop 
                and implement continuous quality assurance and quality 
                improvement systems for home and community-based long-
                term care services.
            (12) Optional program for self-directed services.--If the 
        State elects to provide for any home and community-based long-
        term care services as self-directed services (as defined in 
        subsection (b)(9)) under the MFP demonstration project, the 
        application shall provide the following:
                    (A) Meeting requirements.--A description of how the 
                project will meet the applicable requirements of such 
                subsection for the provision of self-directed services.
                    (B) Voluntary election.--A description of how 
                eligible individuals will be provided with the 
                opportunity to make an informed election to receive 
                self-directed services under the project and after the 
                end of the project.
                    (C) State support in service plan development.--
                Satisfactory assurances that the State will provide 
                support to eligible individuals who self-direct in 
                developing and implementing their service plans.
                    (D) Oversight of receipt of services.--Satisfactory 
                assurances that the State will provide oversight of 
                eligible individuals' receipt of such self-directed 
                services, including steps to assure the quality of 
                services provided and that the provision of such 
                services are consistent with the service plan under 
                such subsection.
        Nothing in this section shall be construed as requiring a State 
        to make an election under the project to provide for home and 
        community-based long-term care services as self-directed 
        services, or as requiring an individual to elect to receive 
        self-directed services under the project.
            (13) Reports and evaluation.--The application shall provide 
        that--
                    (A) the State will furnish to the Secretary such 
                reports concerning the MFP demonstration project, on 
                such timetable, in such uniform format, and containing 
                such information as the Secretary may require, as will 
                allow for reliable comparisons of MFP demonstration 
                projects across States; and
                    (B) the State will participate in and cooperate 
                with the evaluation of the MFP demonstration project.
    (d) Secretary's Award of Competitive Grants.--
            (1) In general.--The Secretary shall award grants under 
        this section on a competitive basis to States selected from 
        among those with applications meeting the requirements of 
        subsection (c), in accordance with the provisions of this 
        subsection.
            (2) Selection and modification of state applications.--In 
        selecting State applications for the awarding of such a grant, 
        the Secretary--
                    (A) shall take into consideration the manner in 
                which and extent to which the State proposes to achieve 
                the objectives specified in subsection (a);
                    (B) shall seek to achieve an appropriate national 
                balance in the numbers of eligible individuals, within 
                different target groups of eligible individuals, who 
                are assisted to transition to qualified residences 
                under MFP demonstration projects, and in the geographic 
                distribution of States operating MFP demonstration 
                projects;
                    (C) shall give preference to State applications 
                proposing--
                            (i) to provide transition assistance to 
                        eligible individuals within multiple target 
                        groups; and
                            (ii) to provide eligible individuals with 
                        the opportunity to receive home and community-
                        based long-term care services as self-directed 
                        services, as defined in subsection (b)(9); and
                    (D) shall take such objectives into consideration 
                in setting the annual amounts of State grant awards 
                under this section.
            (3) Waiver authority.--The Secretary is authorized to waive 
        the following provisions of title XIX of the Social Security 
        Act, to the extent necessary to enable a State initiative to 
        meet the requirements and accomplish the purposes of this 
        section:
                    (A) Statewideness.--Section 1902(a)(1), in order to 
                permit implementation of a State initiative in a 
                selected area or areas of the State.
                    (B) Comparability.--Section 1902(a)(10)(B), in 
                order to permit a State initiative to assist a selected 
                category or categories of individuals described in 
                subsection (b)(2)(A).
                    (C) Income and resources eligibility.--Section 
                1902(a)(10)(C)(i)(III), in order to permit a State to 
                apply institutional eligibility rules to individuals 
                transitioning to community-based care.
                    (D) Provider agreements.--Section 1902(a)(27), in 
                order to permit a State to implement self-directed 
                services in a cost-effective manner.
            (4) Conditional approval of outyear grant.--In awarding 
        grants under this section, the Secretary shall condition the 
        grant for the second and any subsequent fiscal years of the 
        grant period on the following:
                    (A) Numerical benchmarks.--The State must 
                demonstrate to the satisfaction of the Secretary that 
                it is meeting numerical benchmarks specified in the 
                grant agreement for--
                            (i) increasing State medicaid support for 
                        home and community-based long-term care 
                        services under subsection (c)(5); and
                            (ii) numbers of eligible individuals 
                        assisted to transition to qualified residences.
                    (B) Quality of care.--The State must demonstrate to 
                the satisfaction of the Secretary that it is meeting 
                the requirements under subsection (c)(9) to assure the 
                health and welfare of MFP demonstration project 
                participants.
    (e) Payments to States; Carryover of Unused Grant Amounts.--
            (1) Payments.--For each calendar quarter in a fiscal year 
        during the period a State is awarded a grant under subsection 
        (d), the Secretary shall pay to the State from its grant award 
        for such fiscal year an amount equal to the lesser of--
                    (A) 100 percent of the amount of qualified 
                expenditures made during such quarter; or
                    (B) the total amount remaining in such grant award 
                for such fiscal year (taking into account the 
                application of paragraph (2)).
            (2) Carryover of unused amounts.--Any portion of a State 
        grant award for a fiscal year under this section remaining at 
        the end of such fiscal year shall remain available to the State 
        for the next four fiscal years, subject to paragraph (3).
            (3) Re-awarding of certain unused amounts.--In the case of 
        a State that the Secretary determines pursuant to subsection 
        (d)(4) has failed to meet the conditions for continuation of a 
        MFP demonstration project under this section in a succeeding 
        year or years, the Secretary shall rescind the grant awards for 
        such succeeding year or years, together with any unspent 
        portion of an award for prior years, and shall add such amounts 
        to the appropriation for the immediately succeeding fiscal year 
        for grants under this section.
            (4) Preventing duplication of payment.--The payment under 
        an MFP demonstration project with respect to qualified 
        expenditures shall be in lieu of any payment with respect to 
        such expenditures that could otherwise be paid under medicaid, 
        including under section 1903(a) of the Social Security Act. 
        Nothing in the previous sentence shall be construed as 
        preventing the payment under medicaid for such expenditures in 
        a grant year after amounts available to pay for such 
        expenditures under the MFP demonstration project have been 
        exhausted.
    (f) Quality Assurance and Improvement; Technical Assistance; 
Oversight.--
            (1) In general.--The Secretary, either directly or by grant 
        or contract, shall provide for technical assistance to and 
        oversight of States for purposes of upgrading quality assurance 
        and quality improvement systems under medicaid home and 
        community-based waivers, including--
                    (A) dissemination of information on promising 
                practices;
                    (B) guidance on system design elements addressing 
                the unique needs of participating beneficiaries;
                    (C) ongoing consultation on quality, including 
                assistance in developing necessary tools, resources, 
                and monitoring systems; and
                    (D) guidance on remedying programmatic and systemic 
                problems.
            (2) Funding.--From the amounts appropriated under 
        subsection (h) for each of fiscal years 2006 through 2010, not 
        more than $2,400,000 shall be available to the Secretary to 
        carry out this subsection.
    (g) Research and Evaluation.--
            (1) In general.--The Secretary, directly or through grant 
        or contract, shall provide for research on and a national 
        evaluation of the program under this section, including 
        assistance to the Secretary in preparing the final report 
        required under paragraph (2). The evaluation shall include an 
        analysis of projected and actual savings related to the 
        transition of individuals to qualified residences in each State 
        conducting an MFP demonstration project.
            (2) Final report.--The Secretary shall make a final report 
        to the President and the Congress, not later than September 30, 
        2011, reflecting the evaluation described in paragraph (1) and 
        providing findings and conclusions on the conduct and 
        effectiveness of MFP demonstration projects.
            (3) Funding.--From the amounts appropriated under 
        subsection (h) for each of fiscal years 2006 through 2010, not 
        more than $1,100,000 per year shall be available to the 
        Secretary to carry out this subsection.
    (h) Appropriations.--
            (1) In general.--There are appropriated, from any funds in 
        the Treasury not otherwise appropriated, for grants to carry 
        out this section--
                    (A) $250,000,000 for fiscal year 2006;
                    (B) $300,000,000 for fiscal year 2007;
                    (C) $350,000,000 for fiscal year 2008;
                    (D) $400,000,000 for fiscal year 2009; and
                    (E) $450,000,000 for fiscal year 2010.
            (2) Availability.--Amounts made available under paragraph 
        (1) for a fiscal year shall remain available for the awarding 
        of grants to States by not later than September 30, 2010.
    (i) Rule of Construction.--Nothing in this Act shall be construed 
as requiring a State to agree to a capped allotment for expenditures 
for long-term care services under medicaid.
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