II 

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. 

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 ‘‘Money Follows the 

5 Person Act of 2005’’. 
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1 SEC. 2. MONEY FOLLOWS THE PERSON REBALANCING DEM2 ONSTRATION. 

3 (a) PROGRAM PURPOSE AND AUTHORITY.—The Sec4 retary of Health and Human Services (in this section re5 ferred to as the ‘‘Secretary’’) is authorized to award, on 

6 a competitive basis, grants to States in accordance with 

7 this section for demonstration projects (each in this sec8 tion referred to as an ‘‘MFP demonstration project’’) de9 signed to achieve the following objectives with respect to 

10 institutional and home and community-based long-term 

11 care services under State medicaid programs: 

12 (1) REBALANCING.—Increase the use of home 

13 and community-based, rather than institutional, 

14 long-term care services. 

15 (2) MONEY FOLLOWS THE PERSON.—Eliminate 

16 barriers or mechanisms, whether in the State law, 

17 the State medicaid plan, the State budget, or other18 wise, that prevent or restrict the flexible use of med19 icaid funds to enable medicaid-eligible individuals to 

20 receive support for appropriate and necessary long21 term services in the settings of their choice. 

22 (3) CONTINUITY OF SERVICE.—Increase the 

23 ability of the State medicaid program to assure con24 tinued provision of home and community-based long25 term care services to eligible individuals who choose 
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1 to transition from an institutional to a community 

2 setting. 

3 (4) QUALITY ASSURANCE AND QUALITY IM4 PROVEMENT.—Ensure that procedures are in place 

5 (at least comparable to those required under the 

6 qualified HCB program) to provide quality assur7 ance for eligible individuals receiving medicaid home 

8 and community-based long-term care services and to 

9 provide for continuous quality improvement in such 

10 services. 

11 (b) DEFINITIONS.—For purposes of this section: 

12 (1) HOME AND COMMUNITY-BASED LONG-TERM

13 CARE SERVICES.—The term ‘‘home and community14 based long-term care services’’ means, with respect 

15 to a State medicaid program, home and community16 based services (including home health and personal 

17 care services) that are provided under the State’s 

18 qualified HCB program or that could be provided 

19 under such a program but are otherwise provided 

20 under the medicaid program. 

21 (2) ELIGIBLE INDIVIDUAL.—The term ‘‘eligible 

22 individual’’ means, with respect to an MFP dem23 onstration project of a State, an individual in the 

24 State—
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1 (A) who, immediately before beginning 

2 participation in the MFP demonstration 

3 project—

4 (i) resides (and has resided, for a pe5 riod of not less than six months or for 

6 such longer minimum period, not to exceed 

7 2 years, as may be specified by the State) 

8 in an inpatient facility; 

9 (ii) is receiving medicaid benefits for 

10 inpatient services furnished by such inpa11 tient facility; and 

12 (iii) with respect to whom a deter13 mination has been made that, but for the 

14 provision of home and community-based 

15 long-term care services, the individual 

16 would continue to require the level of care 

17 provided in an inpatient facility; and 

18 (B) who resides in a qualified residence be19 ginning on the initial date of participation in 

20 the demonstration project. 

21 (3) INPATIENT FACILITY.—The term ‘‘inpatient 

22 facility’’ means a hospital, nursing facility, or inter23 mediate care facility for the mentally retarded. Such 

24 term includes an institution for mental diseases, but 

25 only, with respect to a State, to the extent medical
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1 assistance is available under the State medicaid plan 

2 for services provided by such institution. 

3 (4) INDIVIDUAL’S AUTHORIZED REPRESENTA4 TIVE.—The term ‘individual’s authorized representa5 tive’ means, with respect to an eligible individual, 

6 the individual’s parent, family member, guardian, 

7 advocate, or other authorized representative of the 

8 individual. 

9 (5) MEDICAID.—The term ‘‘medicaid’’ means, 

10 with respect to a State, the State program under 

11 title XIX of the Social Security Act (including any 

12 waiver or demonstration under such title or under 

13 section 1115 of such Act relating to such title). 

14 (6) QUALIFIED HCB PROGRAM.—The term 

15 ‘‘qualified HCB program’’ means a program pro16 viding home and community-based long-term care 

17 services operating under medicaid, whether or not 

18 operating under waiver authority. 

19 (7) QUALIFIED RESIDENCE.—The term ‘‘quali20 fied residence’’ means, with respect to an eligible in21 dividual—

22 (A) a home owned or leased by the indi23 vidual or the individual’s family member; 

24 (B) an apartment with an individual lease, 

25 with lockable access and egress, and which in-
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1 cludes living, sleeping, bathing, and cooking 

2 areas over which the individual or the individ3 ual’s family has domain and control; and 

4 (C) a residence, in a community-based res5 idential setting, in which no more than 4 unre6 lated individuals reside. 

7 (8) QUALIFIED EXPENDITURES.—The term 

8 ‘‘qualified expenditures’’ means expenditures by the 

9 State under its MFP demonstration project for 

10 home and community-based long-term care services 

11 for an eligible individual participating in the MFP 

12 demonstration project, but only with respect to serv13 ices furnished during the 12-month period beginning 

14 on the date the individual is discharged from an in15 patient facility referred to in paragraph (2)(A)(i). 

16 (9) SELF-DIRECTED SERVICES.—The term 

17 ‘‘self-directed’’ means, with respect to, home and 

18 community-based long-term care services for an eli19 gible individual, such services for the individual 

20 which are planned and purchased under the direc21 tion and control of such individual or the individ22 ual’s authorized representative, including the 

23 amount, duration, scope, provider, and location of 

24 such services, under the State medicaid program 

25 consistent with the following requirements: 
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1 (A) ASSESSMENT.—There is an assess2 ment of the needs, capabilities, and preferences 

3 of the individual with respect to such services. 

4 (B) SERVICE PLAN.—Based on such as5 sessment, there is developed jointly with such 

6 individual or the individual’s authorized rep7 resentative a plan for such services for such in8 dividual that is approved by the State and 

9 that—

10 (i) specifies those services which the 

11 individual or the individual’s authorized 

12 representative would be responsible for di13 recting; 

14 (ii) identifies the methods by which 

15 the individual or the individual’s author16 ized representative will select, manage, and 

17 dismiss providers of such services; 

18 (iii) specifies the role of family mem19 bers and others whose participation is 

20 sought by the individual or the individual’s 

21 authorized representative with respect to 

22 such services; 

23 (iv) is developed through a person24 centered process that—
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1 (I) is directed by the individual 

2 or the individual’s authorized rep3 resentative; 

4 (II) builds upon the individual’s 

5 capacity to engage in activities that 

6 promote community life and that re7 spects the individual’s preferences, 

8 choices, and abilities; and 

9 (III) involves families, friends, 

10 and professionals as desired or re11 quired by the individual or the indi12 vidual’s authorized representative; 

13 (v) includes appropriate risk manage14 ment techniques that recognize the roles 

15 and sharing of responsibilities in obtaining 

16 services in a self-directed manner and as17 sure the appropriateness of such plan 

18 based upon the resources and capabilities 

19 of the individual or the individual’s author20 ized representative; and 

21 (vi) may include an individualized 

22 budget which identifies the dollar value of 

23 the services and supports under the control 

24 and direction of the individual or the indi25 vidual’s authorized representative. 
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1 (C) BUDGET PROCESS.—With respect to 

2 individualized budgets described in subpara3 graph (B)(vi), the State application under sub4 section (c)—

5 (i) describes the method for calcu6 lating the dollar values in such budgets 

7 based on reliable costs and service utiliza8 tion; 

9 (ii) defines a process for making ad10 justments in such dollar values to reflect 

11 changes in individual assessments and 

12 service plans; and 

13 (iii) provides a procedure to evaluate 

14 expenditures under such budgets. 

15 (10) STATE.—The term ‘‘State’’ has the mean16 ing given such term for purposes of title XIX of the 

17 Social Security Act. 

18 (c) STATE APPLICATION.—A State seeking approval 

19 of an MFP demonstration project shall submit to the Sec20 retary, at such time and in such format as the Secretary 

21 requires, an application meeting the following require22 ments and containing such additional information, provi23 sions, and assurances, as the Secretary may require: 

24 (1) ASSURANCE OF A PUBLIC DEVELOPMENT

25 PROCESS.—The application contains an assurance
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1 that the State has engaged, and will continue to en2 gage, in a public process for the design, develop3 ment, and evaluation of the MFP demonstration 

4 project that allows for input from eligible individ5 uals, the families of such individuals, authorized rep6 resentatives of such individuals, providers, and other 

7 interested parties. 

8 (2) OPERATION IN CONNECTION WITH QUALI9 FIED HCB PROGRAM TO ASSURE CONTINUITY OF

10 SERVICES.—The State will conduct the MFP dem11 onstration project for eligible individuals in conjunc12 tion with the operation of a qualified HCB program 

13 that is in operation (or approved) in the State for 

14 such individuals in a manner that assures continuity 

15 of medicaid coverage for such individuals so long as 

16 such individuals continue to be eligible for medical 

17 assistance. 

18 (3) DEMONSTRATION PROJECT PERIOD.—The 

19 application shall specify the period of the MFP dem20 onstration project, which shall include at least two 

21 consecutive fiscal years in the 5-fiscal-year period 

22 beginning with fiscal year 2006. 

23 (4) SERVICE AREA.—The application shall 

24 specify the service area or areas of the MFP dem-
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1 onstration project, which may be a Statewide area or 

2 one or more geographic areas of the State. 

3 (5) TARGETED GROUPS AND NUMBERS OF INDI4 VIDUALS SERVED.—The application shall specify—

5 (A) the target groups of eligible individuals 

6 to be assisted to transition from an inpatient 

7 facility to a qualified residence during each fis8 cal year of the MFP demonstration project; 

9 (B) the projected numbers of eligible indi10 viduals in each targeted group of eligible indi11 viduals to be so assisted during each such year; 

12 and 

13 (C) the estimated total annual qualified ex14 penditures for each fiscal year of the MFP 

15 demonstration project. 

16 (6) INDIVIDUAL CHOICE, CONTINUITY OF

17 CARE.—The application shall contain assurances 

18 that—

19 (A) each eligible individual or the individ20 ual’s authorized representative will be provided 

21 the opportunity to make an informed choice re22 garding whether to participate in the MFP 

23 demonstration project; 

24 (B) each eligible individual or the individ25 ual’s authorized representative will choose the 
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1 qualified residence in which the individual will 

2 reside and the setting in which the individual 

3 will receive home and community-based long4 term care services; 

5 (C) the State will continue to make avail6 able, so long as the State operates its qualified 

7 HCB program consistent with applicable re8 quirements, home and community-based long9 term care services to each individual who com10 pletes participation in the MFP demonstration 

11 project for as long as the individual remains eli12 gible for medical assistance for such services 

13 under such qualified HCB program (including 

14 meeting a requirement relating to requiring a 

15 level of care provided in an inpatient facility 

16 and continuing to require such services). 

17 (7) REBALANCING.—The application shall—

18 (A) provide such information as the Sec19 retary may require concerning the dollar 

20 amounts of State medicaid expenditures for the 

21 fiscal year, immediately preceding the first fis22 cal year of the State’s MFP demonstration 

23 project, for long-term care services and the per24 centage of such expenditures that were for in25 stitutional long-term care services or were for 
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1 home and community-based long-term care 

2 services; 

3 (B)(i) specify the methods to be used by 

4 the State to increase, for each fiscal year dur5 ing the MFP demonstration project, the dollar 

6 amount of such total expenditures for home and 

7 community-based long-term care services and 

8 the percentage of such total expenditures for 

9 long-term care services that are for home and 

10 community-based long-term care services; and 

11 (ii) describe the extent to which the MFP 

12 demonstration project will contribute to accom13 plishment of objectives described in subsection 

14 (a). 

15 (8) MONEY FOLLOWS THE PERSON.—The appli16 cation shall describe the methods to be used by the 

17 State to eliminate any legal, budgetary, or other bar18 riers to flexibility in the availability of medicaid 

19 funds to pay for long-term care services for eligible 

20 individuals participating in the project in the appro21 priate settings of their choice, including costs to 

22 transition from an institutional setting to a qualified 

23 residence. 

24 (9) MAINTENANCE OF EFFORT AND COST-EF25 FECTIVENESS.—The application shall contain or be 
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1 accompanied by such information and assurances as 

2 may be required to satisfy the Secretary that—

3 (A) total expenditures under the State 

4 medicaid program for home and community5 based long-term care services will not be less 

6 for any fiscal year during the MFP demonstra7 tion project than for the greater of such ex8 penditures for—

9 (i) fiscal year 2004; or 

10 (ii) any succeeding fiscal year before 

11 the first year of the MFP demonstration 

12 project; and 

13 (B) in the case of a qualified HCB pro14 gram operating under a waiver under sub15 section (c) or (d) of section 1915 of the Social 

16 Security Act (42 U.S.C. 1396n), but for the 

17 amount awarded under a grant under this sec18 tion, the State program would continue to meet 

19 the cost-effectiveness requirements of subsection 

20 (c)(2)(D) of such section or comparable require21 ments under subsection (d)(5) of such section, 

22 respectively. 

23 (10) WAIVER REQUESTS.—The application shall 

24 contain or be accompanied by requests for any modi25 fication or adjustment of waivers of medicaid re-
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1 quirements described in subsection (d)(3), including 

2 adjustments to maximum numbers of individuals in3 cluded and package of benefits, including one-time 

4 transitional services, provided. 

5 (11) QUALITY ASSURANCE AND QUALITY IM6 PROVEMENT.—The application shall include—

7 (A) a plan satisfactory to the Secretary for 

8 quality assurance and quality improvement for 

9 home and community-based long-term care 

10 services under the State medicaid program, in11 cluding a plan to assure the health and welfare 

12 of individuals participating in the MFP dem13 onstration project; and 

14 (B) an assurance that the State will co15 operate in carrying out activities under sub16 section (f) to develop and implement continuous 

17 quality assurance and quality improvement sys18 tems for home and community-based long-term 

19 care services. 

20 (12) OPTIONAL PROGRAM FOR SELF-DIRECTED

21 SERVICES.—If the State elects to provide for any 

22 home and community-based long-term care services 

23 as self-directed services (as defined in subsection 

24 (b)(9)) under the MFP demonstration project, the 

25 application shall provide the following:
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1 (A) MEETING REQUIREMENTS.—A descrip2 tion of how the project will meet the applicable 

3 requirements of such subsection for the provi4 sion of self-directed services. 

5 (B) VOLUNTARY ELECTION.—A description 

6 of how eligible individuals will be provided with 

7 the opportunity to make an informed election to 

8 receive self-directed services under the project 

9 and after the end of the project. 

10 (C) STATE SUPPORT IN SERVICE PLAN DE11 VELOPMENT.—Satisfactory assurances that the 

12 State will provide support to eligible individuals 

13 who self-direct in developing and implementing 

14 their service plans. 

15 (D) OVERSIGHT OF RECEIPT OF SERV16 ICES.—Satisfactory assurances that the State 

17 will provide oversight of eligible individuals’ re18 ceipt of such self-directed services, including 

19 steps to assure the quality of services provided 

20 and that the provision of such services are con21 sistent with the service plan under such sub22 section. 

23 Nothing in this section shall be construed as requir24 ing a State to make an election under the project to 

25 provide for home and community-based long-term 
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1 care services as self-directed services, or as requiring 

2 an individual to elect to receive self-directed services 

3 under the project. 

4 (13) REPORTS AND EVALUATION.—The applica5 tion shall provide that—

6 (A) the State will furnish to the Secretary 

7 such reports concerning the MFP demonstra8 tion project, on such timetable, in such uniform 

9 format, and containing such information as the 

10 Secretary may require, as will allow for reliable 

11 comparisons of MFP demonstration projects 

12 across States; and 

13 (B) the State will participate in and co14 operate with the evaluation of the MFP dem15 onstration project. 

16 (d) SECRETARY’S AWARD OF COMPETITIVE

17 GRANTS.—

18 (1) IN GENERAL.—The Secretary shall award 

19 grants under this section on a competitive basis to 

20 States selected from among those with applications 

21 meeting the requirements of subsection (c), in ac22 cordance with the provisions of this subsection. 

23 (2) SELECTION AND MODIFICATION OF STATE

24 APPLICATIONS.—In selecting State applications for 

25 the awarding of such a grant, the Secretary—
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1 (A) shall take into consideration the man2 ner in which and extent to which the State pro3 poses to achieve the objectives specified in sub4 section (a); 

5 (B) shall seek to achieve an appropriate 

6 national balance in the numbers of eligible indi7 viduals, within different target groups of eligi8 ble individuals, who are assisted to transition to 

9 qualified residences under MFP demonstration 

10 projects, and in the geographic distribution of 

11 States operating MFP demonstration projects; 

12 (C) shall give preference to State applica13 tions proposing—

14 (i) to provide transition assistance to 

15 eligible individuals within multiple target 

16 groups; and 

17 (ii) to provide eligible individuals with 

18 the opportunity to receive home and com19 munity-based long-term care services as 

20 self-directed services, as defined in sub21 section (b)(9); and 

22 (D) shall take such objectives into consid23 eration in setting the annual amounts of State 

24 grant awards under this section. 
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1 (3) WAIVER AUTHORITY.—The Secretary is au2 thorized to waive the following provisions of title 

3 XIX of the Social Security Act, to the extent nec4 essary to enable a State initiative to meet the re5 quirements and accomplish the purposes of this sec6 tion: 

7 (A) STATEWIDENESS.—Section 

8 1902(a)(1), in order to permit implementation 

9 of a State initiative in a selected area or areas 

10 of the State. 

11 (B) COMPARABILITY.—Section 

12 1902(a)(10)(B), in order to permit a State ini13 tiative to assist a selected category or categories 

14 of individuals described in subsection (b)(2)(A). 

15 (C) INCOME AND RESOURCES ELIGI16 BILITY.—Section 1902(a)(10)(C)(i)(III), in 

17 order to permit a State to apply institutional 

18 eligibility rules to individuals transitioning to 

19 community-based care. 

20 (D) PROVIDER AGREEMENTS.—Section 

21 1902(a)(27), in order to permit a State to im22 plement self-directed services in a cost-effective 

23 manner. 

24 (4) CONDITIONAL APPROVAL OF OUTYEAR

25 GRANT.—In awarding grants under this section, the 
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1 Secretary shall condition the grant for the second 

2 and any subsequent fiscal years of the grant period 

3 on the following: 

4 (A) NUMERICAL BENCHMARKS.—The 

5 State must demonstrate to the satisfaction of 

6 the Secretary that it is meeting numerical 

7 benchmarks specified in the grant agreement 

8 for—

9 (i) increasing State medicaid support 

10 for home and community-based long-term 

11 care services under subsection (c)(5); and 

12 (ii) numbers of eligible individuals as13 sisted to transition to qualified residences. 

14 (B) QUALITY OF CARE.—The State must 

15 demonstrate to the satisfaction of the Secretary 

16 that it is meeting the requirements under sub17 section (c)(9) to assure the health and welfare 

18 of MFP demonstration project participants. 

19 (e) PAYMENTS TO STATES; CARRYOVER OF UNUSED

20 GRANT AMOUNTS.— 

21 (1) PAYMENTS.—For each calendar quarter in 

22 a fiscal year during the period a State is awarded 

23 a grant under subsection (d), the Secretary shall pay 

24 to the State from its grant award for such fiscal 

25 year an amount equal to the lesser of—
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1 (A) 100 percent of the amount of qualified 

2 expenditures made during such quarter; or 

3 (B) the total amount remaining in such 

4 grant award for such fiscal year (taking into 

5 account the application of paragraph (2)). 

6 (2) CARRYOVER OF UNUSED AMOUNTS.—Any 

7 portion of a State grant award for a fiscal year 

8 under this section remaining at the end of such fis9 cal year shall remain available to the State for the 

10 next four fiscal years, subject to paragraph (3). 

11 (3) RE-AWARDING OF CERTAIN UNUSED

12 AMOUNTS.—In the case of a State that the Sec13 retary determines pursuant to subsection (d)(4) has 

14 failed to meet the conditions for continuation of a 

15 MFP demonstration project under this section in a 

16 succeeding year or years, the Secretary shall rescind 

17 the grant awards for such succeeding year or years, 

18 together with any unspent portion of an award for 

19 prior years, and shall add such amounts to the ap20 propriation for the immediately succeeding fiscal 

21 year for grants under this section. 

22 (4) PREVENTING DUPLICATION OF PAYMENT.—

23 The payment under an MFP demonstration project 

24 with respect to qualified expenditures shall be in lieu 

25 of any payment with respect to such expenditures 
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1 that could otherwise be paid under medicaid, includ2 ing under section 1903(a) of the Social Security Act. 

3 Nothing in the previous sentence shall be construed 

4 as preventing the payment under medicaid for such 

5 expenditures in a grant year after amounts available 

6 to pay for such expenditures under the MFP dem7 onstration project have been exhausted. 

8 (f) QUALITY ASSURANCE AND IMPROVEMENT; TECH9 NICAL ASSISTANCE; OVERSIGHT.—

10 (1) IN GENERAL.—The Secretary, either di11 rectly or by grant or contract, shall provide for tech12 nical assistance to and oversight of States for pur13 poses of upgrading quality assurance and quality im14 provement systems under medicaid home and com15 munity-based waivers, including—

16 (A) dissemination of information on prom17 ising practices; 

18 (B) guidance on system design elements 

19 addressing the unique needs of participating 

20 beneficiaries; 

21 (C) ongoing consultation on quality, in22 cluding assistance in developing necessary tools, 

23 resources, and monitoring systems; and 

24 (D) guidance on remedying programmatic 

25 and systemic problems. 
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1 (2) FUNDING.—From the amounts appro2 priated under subsection (h) for each of fiscal years 

3 2006 through 2010, not more than $2,400,000 shall 

4 be available to the Secretary to carry out this sub5 section. 

6 (g) RESEARCH AND EVALUATION.—

7 (1) IN GENERAL.—The Secretary, directly or 

8 through grant or contract, shall provide for research 

9 on and a national evaluation of the program under 

10 this section, including assistance to the Secretary in 

11 preparing the final report required under paragraph 

12 (2). The evaluation shall include an analysis of pro13 jected and actual savings related to the transition of 

14 individuals to qualified residences in each State con15 ducting an MFP demonstration project. 

16 (2) FINAL REPORT.—The Secretary shall make 

17 a final report to the President and the Congress, not 

18 later than September 30, 2011, reflecting the eval19 uation described in paragraph (1) and providing 

20 findings and conclusions on the conduct and effec21 tiveness of MFP demonstration projects. 

22 (3) FUNDING.—From the amounts appro23 priated under subsection (h) for each of fiscal years 

24 2006 through 2010, not more than $1,100,000 per 
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1 year shall be available to the Secretary to carry out 

2 this subsection. 

3 (h) APPROPRIATIONS.—

4 (1) IN GENERAL.—There are appropriated, 

5 from any funds in the Treasury not otherwise appro6 priated, for grants to carry out this section—

7 (A) $250,000,000 for fiscal year 2006; 

8 (B) $300,000,000 for fiscal year 2007; 

9 (C) $350,000,000 for fiscal year 2008; 

10 (D) $400,000,000 for fiscal year 2009; 

11 and 

12 (E) $450,000,000 for fiscal year 2010. 

13 (2) AVAILABILITY.—Amounts made available 

14 under paragraph (1) for a fiscal year shall remain 

15 available for the awarding of grants to States by not 

16 later than September 30, 2010. 

17 (i) RULE OF CONSTRUCTION.—Nothing in this Act 

18 shall be construed as requiring a State to agree to a 

19 capped allotment for expenditures for long-term care serv20 ices under medicaid.

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