I 

108TH CONGRESS 

2D SESSION H. R. 5197 

To amend title XIX of the Social Security Act to provide funds to States 

to enable them to increase the wages paid to targeted direct support 

professionals in providing services to individuals with disabilities under 

the Medicaid program. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 30, 2004 

Mr. TERRY (for himself and Mrs. CAPPS) 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 

funds to States to enable them to increase the wages 

paid to targeted direct support professionals in providing 

services to individuals with disabilities under the Medicaid program. 

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; FINDINGS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Direct Support Professional Fairness and Security Act 

6 of 2004’’. 

7 (b) FINDINGS.—Congress finds the following: 
2 

•HR 5197 IH 

1 (1) Direct support professionals are the pri2 mary providers of long term care services for mil3 lions of individuals who have physical or mental dis4 abilities. Direct support professionals provide assist5 ance with activities of daily living, instrumental ac6 tivities of daily living, assistance with rehabilitation, 

7 habilitation, training needs and other tasks. All pro8 vide essential supports that help keep individuals 

9 with disabilities connected to their communities. 

10 (2) These workers who provide intimate sup11 ports are predominately female and many are the 

12 sole breadwinners of their families. Although work13 ing and paying taxes, many women in these jobs re14 main impoverished and are eligible for many of the 

15 same Federal and state public assistance programs 

16 upon which the very individuals with disabilities to 

17 whom they provide supports must depend. 

18 (3) Throughout the nation, there is a critical 

19 shortage of direct support professionals. Vacancy 

20 and turn over rates are high. In many parts of the 

21 country, individuals with disabilities are unable to 

22 access the services they need, thereby jeopardizing 

23 their health and quality of life, placing even greater 

24 burdens on their family members and informal care-
3 

•HR 5197 IH 

1 givers and creating long waiting lists for community 

2 placement. 

3 (4) The crisis that the nation faces today will 

4 only get worse. Over the next 30 years, there will be 

5 a rapid rise of the population over 65 years of age. 

6 At the same time, advances in medical science and 

7 drug therapy are increasing the number of people, of 

8 all ages, living with severe disabilities. Thus, while 

9 demand for direct support professional services is in10 creasing, the pool of younger, entry level workers is 

11 shrinking. By 2010, more than 780,000 additional 

12 workers must be found to fill long-term direct sup13 port staff positions. 

14 (5) To stabilize and increase the number of di15 rect support professionals in the work force, the 

16 wages and benefits of direct support professionals 

17 must be improved and made equitable among long 

18 term support options. 

19 (6) Medicaid is the single-largest payor of long20 term supports and services for people with disabil21 ities. Enhanced Federal Medicaid matching funds 

22 should be available to assist states committed to ad23 dressing wage differentials among direct support 

24 professionals by increasing the wages of direct sup-
4 

•HR 5197 IH 

1 port professionals and supporting and improving the 

2 stability of the direct support professional workforce. 

3 SEC. 2. MEDICAID AMENDMENT. 

4 (a) AUTHORIZING ESTABLISHMENT OF DIRECT SUP5 PORT PROFESSIONAL WAGE ENHANCEMENT PLANS.— 

6 Title XIX of the Social Security Act is amended— 

7 (1) by redesignating section 1936 as section 

8 1937; and 

9 (2) by inserting after section 1935 the following 

10 new section: 

11 ‘‘DIRECT SUPPORT PROFESSIONAL WAGE ENHANCEMENT

12 PLAN

13 ‘‘SEC. 1936. (a) STATE OPTION.—As a condition for 

14 the receipt of increased funding described in subsection 

15 (f), a State is required to provide for the implementation 

16 of a direct support professional wage enhancement plan 

17 under this section. 

18 ‘‘(b) DIRECT SUPPORT PROFESSIONAL WAGE EN19 HANCEMENT PLAN.— 

20 ‘‘(1) IN GENERAL.—For purposes of this section, the 

21 term ‘direct support professional wage enhancement plan’ 

22 means a plan of a State that the Secretary determines 

23 meets the following requirements: 

24 ‘‘(A) DEADLINE FOR SUBMISSION.—The plan is 

25 submitted to the Secretary not later than 120 days 
5 

•HR 5197 IH 

1 after the date the Secretary provides notice to States 

2 under paragraph (3). 

3 ‘‘(B) CONTENTS.— 

4 ‘‘(i) EQUALIZATION OF HOURLY WAGE

5 RATES.—The plan must describe how the State 

6 intends to use the funds made available under 

7 this section to increase the hourly wage rate of 

8 targeted direct support professionals so that by 

9 the end of the 5-year implementation period (as 

10 defined in subsection (g)(4)) such rate is equal 

11 to the average hourly wage rate of reference di12 rect support professionals. 

13 ‘‘(ii) ADDITIONAL PROVISIONS.—The plan 

14 must include the additional information de15 scribed in subsection (c). 

16 ‘‘(C) IMPLEMENTATION.—The plan must be de17 veloped and implemented in accordance with sub18 section (d). 

19 ‘‘(D) ANNUAL REPORTS.—The State must pro20 vide for annual assessments and reports in accord21 ance with subsection (e). 

22 ‘‘(2) MODIFICATION OF PLAN.—Nothing in this sec23 tion shall be construed as preventing a State from time 

24 to time and with the approval of the Secretary from modi25 fying a direct support professional wage enhancement plan 
6 

•HR 5197 IH 

1 so long as such plan, as modified, continues to meet the 

2 requirements of paragraph (1). 

3 ‘‘(3) NOTICE.—Not later than 90 days after the date 

4 of the enactment of this section, the Secretary shall pro5 vide notice to States regarding the provisions of this sec6 tion, including the availability of enhanced funding to im7 plement direct support professional wage enhancement 

8 plans. 

9 ‘‘(c) CONTENTS OF PLAN.—A direct support profes10 sional wage enhancement plan shall include, consistent 

11 with the other requirements of this section, the following: 

12 ‘‘(1) A description of how the State intends to 

13 use funds provided under this section to meet the re14 quirement of subsection (b)(1). 

15 ‘‘(2) A description of the prevailing hourly wage 

16 rates for targeted direct support professionals before 

17 the implementation of such plan and any hourly 

18 wage rate differentials between targeted direct sup19 port professionals and reference direct support pro20 fessionals. 

21 ‘‘(3) The impact of wage differentials and labor 

22 market conditions on the recruitment and retention 

23 of targeted direct support professionals, including 

24 current or projected labor shortages. 
7 

•HR 5197 IH 

1 ‘‘(4) The identification of a specific, five-year 

2 performance goal to increase the hourly wage rate of 

3 targeted direct support professionals so as to elimi4 nate any wage rate differential between targeted and 

5 reference direct support professionals and the meth6 odology to be used by the State to achieve its goal. 

7 ‘‘(5) The annual performance goals and targets 

8 that the State will monitor to track progress toward 

9 achieving its five-year performance goal. 

10 ‘‘(6) Current efforts to increase and stabilize 

11 the State’s direct support professional labor force 

12 and how the plan shall be coordinated with such ef13 forts. 

14 ‘‘(7) Methods for assuring that funds provided 

15 under this section shall be spent in accordance with 

16 such plan, and shall not be used to supplant existing 

17 funds for wages and benefits or to reduce the State’s 

18 expenditures below the amount that the State would 

19 have paid had the plan not been in effect. 

20 ‘‘(8) A description of the stakeholders and col21 laborative process used consistent with subsection 

22 (d) to develop the plan and the means by which such 

23 collaboration shall continue during the implementa24 tion of the plan. 
8 

•HR 5197 IH 

1 ‘‘(9) Assurances satisfactory to the Secretary 

2 that upon the expiration of the 5-year implementa3 tion period, the State shall provide funding nec4 essary to maintain the wage rates attained under the 

5 plan for targeted direct support professionals at the 

6 five-year performance goal increased annually there7 after by a percentage that is not less than the an8 nual percent increase in the employment cost index 

9 (as published quarterly by the Bureau of Labor Sta10 tistics). 

11 ‘‘(d) DEVELOPMENT AND IMPLEMENTATION OF

12 PLAN.—A direct support professional wage enhancement 

13 plan shall be developed and implemented in collaboration 

14 with— 

15 ‘‘(1) targeted individuals with disabilities and 

16 family representatives; 

17 ‘‘(2) targeted direct support professionals; 

18 ‘‘(3) agencies or provider organizations that 

19 serve targeted individuals with disabilities and em20 ploy targeted direct support professionals; and 

21 ‘‘(4) individuals and organizations representing 

22 the interests of those described in paragraphs (1) 

23 through (3). 

24 ‘‘(e) ANNUAL ASSESSMENT AND REPORT.— 

25 ‘‘(1) IN GENERAL.—A State shall— 
9 

•HR 5197 IH 

1 ‘‘(A) perform an assessment of the 

2 operation of the direct care support profes3 sional wage enhancement plan in the State 

4 in each fiscal year; and 

5 ‘‘(B) report to the Secretary by Janu6 ary 1 following the end of the fiscal year, 

7 on the results of such assessment. 

8 ‘‘(2) CONTENTS.—Each such assessment shall 

9 include the following: 

10 ‘‘(A) An assessment of the effectiveness of 

11 the plan in increasing the wages of targeted di12 rect support professionals and reducing or 

13 eliminating the wage gap with reference direct 

14 support professionals. 

15 ‘‘(B) An assessment of the State’s progress 

16 in meeting its annual performance goals under 

17 the plan. 

18 ‘‘(C) An assessment of the effectiveness of 

19 the State’s collaboration with stakeholders on 

20 plan development and implementation issues. 

21 ‘‘(D) A review and assessment of State ac22 tivities to coordinate the plan with other activi23 ties in the State to improve and stabilize the di24 rect support professional workforce. 
10 

•HR 5197 IH 

1 ‘‘(E) Recommendations for improving the 

2 plan. 

3 ‘‘(F) Such other information as the Sec4 retary may specify. 

5 ‘‘(f) INCREASE IN PAYMENT TO IMPLEMENT PLAN.— 

6 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

7 for each calendar quarter during the 5-year imple8 mentation period in which a direct support profes9 sional wage enhancement plan is in effect under this 

10 section in a State, the amount of payment for med11 ical assistance under section 1903(a)(1) shall be in12 creased by the wage enhancement incentive percent13 age (as defined in paragraph (3)(G)) multiplied by 

14 the portion of total funds expended during the quar15 ter for the provision of direct support services to tar16 geted individuals that are attributable to the wages 

17 of targeted direct support professionals. 

18 ‘‘(2) LIMITATION.— 

19 ‘‘(A) IN GENERAL.—Payments made under 

20 paragraph (1) shall be used only to increase the 

21 wages of targeted direct support professionals. 

22 ‘‘(B) TREATMENT OF EMPLOYEE BENE23 FITS AND SALARY RELATED BENEFITS.—For 

24 purposes of subparagraph (A), payments for 

25 costs of employee benefits and other salary re-
11 

•HR 5197 IH 

1 lated benefits (including mandatory employment 

2 taxes and benefits) shall be treated as payments 

3 to increase the wages of targeted direct support 

4 professionals so long as payments attributable 

5 to such non-wage benefits do not exceed 20 per6 cent of the total amounts that increase the 

7 wages of targeted direct support professionals. 

8 ‘‘(3) DEFINITIONS.—For purposes of this sub9 section: 

10 ‘‘(A) ANNUAL RATE DIFFERENTIAL PER11 CENTAGE.—The term ‘annual rate differential 

12 percentage’ means, with respect to a State for 

13 a year in which the direct support professional 

14 wage enhancement plan is in effect, the percent 

15 of the direct support professional wage rate dif16 ferential (as defined in subparagraph (E)) to be 

17 paid under plan for the year. 

18 ‘‘(B) AVERAGE REFERENCE DIRECT SUP19 PORT PROFESSIONAL HOURLY WAGE RATE.— 

20 The term ‘average reference direct support pro21 fessional hourly wage rate’ means, for a year 

22 under a direct support professional wage en23 hancement plan, the average direct support pro24 fessional hourly wage rate (as defined in sub25 paragraph (D)), including any projected in-
12 

•HR 5197 IH 

1 crease, paid in the year to reference direct sup2 port professionals who are employed by the 

3 State or, if there are no such employees, to ref4 erence direct support professionals who are em5 ployed by local governments in the State, or, 

6 when necessary to meet the purpose of the plan, 

7 any other reference wage rate defined by the 

8 State and as approved by the Secretary. 

9 ‘‘(C) BASE-YEAR AVERAGE TARGETED DI10 RECT SUPPORT PROFESSIONAL HOURLY WAGE

11 RATE.—The term ‘average targeted direct sup12 port professional hourly wage rate’ means, for 

13 a State, the average direct support professional 

14 hourly wage rate (as defined in subparagraph 

15 (D)) paid to targeted direct support profes16 sionals under the State plan in the 12-month17 period immediately preceding the 5-year imple18 mentation period. 

19 ‘‘(D) DIRECT SUPPORT PROFESSIONAL

20 HOURLY WAGE RATE.—The term ‘direct sup21 port professional hourly wage rate’ means— 

22 ‘‘(i) the rate of hourly wage paid to a 

23 direct support professional; plus 

24 ‘‘(ii) mandatory employment taxes 

25 and benefits (as defined in subparagraph 
13 

•HR 5197 IH 

1 (F)) paid (as computed and applied on an 

2 hourly basis) with respect to such employ3 ment. 

4 ‘‘(E) DIRECT SUPPORT PROFESSIONAL

5 WAGE RATE DIFFERENTIAL.—The term ‘direct 

6 support professional wage rate differential’ 

7 means, for a State for a year, the amount by 

8 which— 

9 ‘‘(i) the average reference direct sup10 port professional hourly wage rate (as de11 fined in subparagraph (B)) for the State 

12 and year, exceeds 

13 ‘‘(ii) the base-year average targeted 

14 direct support professional hourly wage 

15 rate (as defined in subparagraph (C)) for 

16 the State. 

17 ‘‘(F) MANDATORY EMPLOYMENT TAXES

18 AND BENEFITS.—The term ‘mandatory employ19 ment taxes and benefits’ means taxes under 

20 section 3111 of the Internal Revenue Code of 

21 1986 (relating to the employer share of FICA 

22 taxes) and the employer’s share of unemploy23 ment compensation and worker’s compensation 

24 payments. 
14 

•HR 5197 IH 

1 ‘‘(G) WAGE ENHANCEMENT INCENTIVE

2 PERCENTAGE.—The term ‘wage enhancement 

3 incentive percentage’ means— 

4 ‘‘(i) the product of (I) the total direct 

5 support professional wage rate differential 

6 (as defined in subparagraph (E), and (II) 

7 annual rate differential percentage (as de8 fined in subparagraph (A)); divided by 

9 ‘‘(ii) the average reference direct sup10 port professional hourly wage rate (as de11 fined in subparagraph (B)). 

12 ‘‘(g) INSPECTOR GENERAL AUDIT.—The Secretary, 

13 through the Inspector General of the Department of 

14 Health and Human Services, shall audit a sample from 

15 among the States in order to assess the effectiveness of 

16 progress made in reducing or eliminating the wage gap 

17 between targeted and reference direct support profes18 sionals through funds under this section. 

19 ‘‘(h) GAO STUDY.— 

20 ‘‘(1) STUDY.—The Comptroller General of the 

21 United States shall conduct a study concerning the 

22 wage equalization and recruitment and retention of 

23 direct support professionals who are providing serv24 ices and supports to individuals with disabilities. 
15 

•HR 5197 IH 

1 ‘‘(2) REPORTS.—The Comptroller General shall 

2 submit to Congress reports, in the third and fifth 

3 years in which this section is being implemented, on 

4 progress made by States, and the impact of pay5 ments under this section, on providing wage equali6 zation and in improving recruitment and retention of 

7 direct support professionals. 

8 ‘‘(i) DEFINITIONS.—For purposes of this section: 

9 ‘‘(1) DIRECT SUPPORT PROFESSIONAL.—The 

10 term ‘direct support professional’ means an indi11 vidual who, whether in a supervisory or non-super12 visory capacity, provides services and supports, as 

13 needed, to an individual with a disability to assist in 

14 acquiring, maintaining or enhancing skills necessary 

15 to perform activities of daily living or instrumental 

16 activities of daily living and health-related functions 

17 through hands-on assistance, supervision, or cueing. 

18 Such term includes, among others, individuals who 

19 may be classified as nurses aides, home health aides, 

20 home care aides, personal care aides and personal 

21 assistants, in-home support workers, homemakers, 

22 behavioral specialists, habilitation specialist, mental 

23 health rehabilitation technicians, independent living 

24 skills specialists, crisis program workers, qualified 
16 

•HR 5197 IH 

1 mental health or mental retardation professionals, 

2 and educational technicians. 

3 ‘‘(2) DIRECT SUPPORT PROFESSIONAL WAGE

4 ENHANCEMENT PLAN.—The term ‘direct support 

5 professional wage enhancement plan’ is defined in 

6 subsection (b)(1). 

7 ‘‘(3) DIRECT SUPPORT SERVICES.—The term 

8 ‘direct support services’ means a range of services 

9 and supports, provided by one or more persons, de10 signed to provide support and health-related services 

11 to an individual with a disability to enable them to 

12 perform, acquire, maintain or enhance skills nec13 essary to perform activities of daily living, instru14 mental activities of daily living (IADL) and health15 related functions. Such term includes personal care 

16 services, consumer-directed personal assistance serv17 ices, rehabilitation services, habilitation services, and 

18 respite care. 

19 ‘‘(4) INDIVIDUAL WITH A DISABILITY.—The 

20 term ‘individual with a disability’ means an indi21 vidual who meets (or is regarded as meeting) the cri22 teria for being disabled under the supplemental secu23 rity income program under title XVI. Such term in24 cludes an individual who, regardless of age, is eligi-
17 

•HR 5197 IH 

1 ble for and receiving medical assistance under this 

2 title for any benefits described in paragraph (i)(8). 

3 ‘‘(5) 5-YEAR IMPLEMENTATION PERIOD.—The 

4 term ‘5-year implementation period’ means, with re5 spect to a State and a direct support professional 

6 wage enhancement plan under this section, the pe7 riod of 20 calendar quarters beginning with the first 

8 full calendar quarter in which such plan is imple9 mented in the State under this section. Each of the 

10 five 4-calendar-quarter periods within such period 

11 shall be treated as a year for purposes of this sec12 tion. 

13 ‘‘(6) REFERENCE DIRECT SUPPORT PROFES14 SIONAL.—The term ‘reference direct support profes15 sional’ means a direct support professional who— 

16 ‘‘(A) is employed by a State or local gov17 ernment entity; and 

18 ‘‘(B) provides direct support services to 

19 targeted individuals with disabilities under this 

20 title. 

21 ‘‘(7) TARGETED DIRECT SUPPORT PROFES22 SIONAL.—The term ‘targeted direct support profes23 sional’ means a direct support professional who— 

24 ‘‘(A) is not employed by a State or local 

25 government entity; and 
18 

•HR 5197 IH 

1 ‘‘(B) provides direct support services to 

2 targeted individuals with disabilities under this 

3 title. 

4 ‘‘(8) TARGETED INDIVIDUAL WITH A DIS5 ABILITY.—The term ‘targeted individual with a dis6 ability’ means an individual with a disability who is 

7 eligible for and is receiving medical assistance under 

8 this title for personal care services under section 

9 1905(a)(23), for rehabilitative services under section 

10 1905(a)(13), for home health care services, for home 

11 and community-based services under a waiver ap12 proved under section 1915(c) or section 1115, or for 

13 intermediate care facility services for the mentally 

14 retarded.’’. 

15 (b) CONFORMING AMENDMENT.—Section 1903(a)(1) 

16 of such Act (42 U.S.C. 1396b(a)(1)) is amended by insert17 ing ‘‘and section 1936(f)’’ after ‘‘1923(f)’’. 

18 (c) AUTHORIZATION OF PLANNING GRANTS.—The 

19 Secretary of Health and Human Services is authorized to 

20 award State planning grants in an amount not to exceed, 

21 in the aggregate, $3,000,000, in order to assist States in 

22 establishing direct support professional wage enhancement 

23 plans under section 1936 of the Social Security Act, as 

24 inserted by subsection (a). 

Æ