I 

111TH CONGRESS 

1ST SESSION H. R. 2758 

To amend part C of title XVIII of the Social Security Act with respect 

to Medicare special needs plans and the alignment of Medicare and 

Medicaid for dually eligible individuals, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 8, 2009 

Mr. KIND (for himself and Ms. BALDWIN) introduced the following bill; which 

was referred to the Committee on Energy and Commerce, and in addition 

to the Committee on Ways and Means, for a period to be subsequently 

determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend part C of title XVIII of the Social Security Act 

with respect to Medicare special needs plans and the 

alignment of Medicare and Medicaid for dually eligible 

individuals, 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, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Medicare Specialty Care Improvement and Protection 

6 Act of 2009’’. 


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1 (b) TABLE OF CONTENTS.—The table of contents of 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Extension of SNP authority through December 31, 2013. 

Sec. 3. Improve risk adjustment for high-risk, high-cost beneficiaries. 

Sec. 4. Additional enhancements to ensure payment equity for specialized MA 

plans. 

Sec. 5. Advance alignment of Medicare and Medicaid for dual eligibles. 

Sec. 6. Continuous eligibility for Medicaid for certain individuals. 

Sec. 7. Definitions. 

3 SEC. 2. EXTENSION OF SNP AUTHORITY THROUGH DECEM4 BER 31, 2013. 

5 Section 1859(f) of the Social Security Act (42 U.S.C. 

6 1395w–28(f)), as amended by section 164(a) of the Medi7 care Improvements for Patients and Providers Act of 2008 

8 (Public Law 110–275), is amended by striking ‘‘2011’’ 

9 and inserting ‘‘2014 (or before January 1, 2016, in the 

10 case of a Fully Integrated Dual Eligible Special Needs 

11 Plan designated under section 5(a)(1)(A) of the Medicare 

12 Specialty Care Improvement and Protection Act of 

13 2009)’’. 

14 SEC. 3. IMPROVE RISK ADJUSTMENT FOR HIGH-RISK, HIGH15 COST BENEFICIARIES. 

16 (a) EVALUATION.— 

17 (1) IN GENERAL.—The Secretary shall evaluate 

18 the Medicare Advantage risk adjustment payment 

19 mechanism under section 1853(a)(1)(C) of the So20 cial Security Act (42 U.S.C. 1395w–23(a)(1)(C)) 

21 and the risk adjustment payment mechanism under 


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1 section 1860D–15(c)(1)(A) of such Act (42 U.S.C. 

2 1395w–115(c)(1)(A)) in order to resolve plan pay3 ment inequities relative to Medicare fee-for-service 

4 payments for beneficiaries identified under para5 graph (2). 

6 (2) REQUIREMENTS.—The evaluation conducted 

7 under paragraph (1) shall address the need for im8 proving the adequacy of the existing hierarchical 

9 condition categories and pharmacy risk adjustment 

10 methods for Medicare Advantage plans that exclu11 sively or disproportionately serve high-risk bene12 ficiaries as it relates to— 

13 (A) accurately predicting costs relative to 

14 Medicare fee-for-service for beneficiaries with— 

15 (i) sustained high-risk scores over 

16 multiple contract periods; 

17 (ii) sustained high costs over multiple 

18 contract periods; 

19 (iii) co-morbid chronic conditions; 

20 (iv) diagnoses not included in the risk21 adjustment methodology, including demen22 tia and other cognitive impairments; 

23 (v) physical disabilities, developmental 

24 disabilities, or both; and 

25 (vi) frailty; 


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1 (B) accurately predicting costs relative to 

2 Medicare fee-for-service for beneficiaries near 

3 the end of life; 

4 (C) accurately predicting costs relative to 

5 Medicare fee-for-service for other conditions for 

6 which the current risk adjustment methodology 

7 underpays in relation to Medicare fee-for-serv8 ice, as determined by the Secretary; 

9 (D) further gradations of diseases and con10 ditions to better reflect stage of condition, con11 dition severity, and costs related to burden of 

12 illness; 

13 (E) accounting for costs of pre-existing 

14 conditions at the time of initial enrollment for 

15 new entrants into Medicare; and 

16 (F) enhancing coding persistency by calcu17 lating risk scores using data covering at least 2 

18 years. 

19 (b) USE OF THE RESULTS OF THE STUDY FOR RE20 FINEMENTS.— 

21 (1) REFINEMENTS.— 

22 (A) IN GENERAL.—Beginning with plan 

23 year 2011, the Secretary, using the results of 

24 the evaluation conducted under subsection 

25 (a)(1), shall refine the risk adjustment payment 


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1 mechanisms referred to in subsection (a)(1) for 

2 beneficiaries identified under subsection (a)(2). 

3 The Secretary shall make additional refine4 ments, as appropriate, for subsequent plan 

5 years. 

6 (B) PROTECTION.—To the extent that the 

7 Secretary determines that the risk adjustment 

8 payment mechanisms referred to in subsection 

9 (a)(1) do not accurately pay for Medicare bene10 ficiaries identified under subsection (a)(2), the 

11 Secretary shall ensure that no Medicare Advan12 tage plan that exclusively or disproportionately 

13 serves high-risk beneficiaries is paid less, in the 

14 aggregate, than 100 percent of Medicare fee15 for-service payment rates (as determined under 

16 section 1853(c)(1)(D)(i)). 

17 (C) RECALIBRATION.—Beginning with 

18 plan year 2011, the Secretary shall recalibrate 

19 the risk adjustment payment mechanisms re20 ferred to in subsection (a)(1) so that the overall 

21 predicted costs for all Medicare beneficiaries are 

22 identical to what they would have been in the 

23 absence of the new risk adjustment payment 

24 mechanism. 


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1 (2) BUDGET NEUTRAL ADJUSTMENTS.—If the 

2 Secretary determines that the application of para3 graph (1) results in expenditures under title XVIII 

4 of the Social Security Act that exceed the expendi5 tures under such title that would have been made 

6 without such application, the Secretary shall provide 

7 for an appropriate adjustment to payment rates 

8 under part C of such title for beneficiaries for whom 

9 the risk adjustment payment mechanism overpays in 

10 relation to Medicare fee-for-service in order to elimi11 nate such excess. 

12 SEC. 4. ADDITIONAL ENHANCEMENTS TO ENSURE PAY13 MENT EQUITY FOR SPECIALIZED MA PLANS. 

14 (a) ACCOUNTING FOR ADDED REGULATORY

15 COSTS.—For plan year 2011 and subsequent plan years, 

16 the Secretary shall provide bonus payments to account for 

17 added SNP costs associated with additional benefit, care 

18 management, reporting, and other requirements estab19 lished by Congress and the Secretary in excess of other 

20 Medicare Advantage plans. 

21 (b) ENSURING FAIR BIDDING PRACTICES.—For plan 

22 year 2011 and subsequent plan years, the Secretary shall 

23 take into account the following factors with respect to the 

24 bid structure for SNPs: 

25 (1) Dual eligibility. 


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1 (2) Geographic cost differences. 

2 (3) Population characteristics. 

3 (4) The differences in plan requirements, in4 cluding differences in additional benefits, care man5 agement, and reporting requirements. 

6 (5) The differences between community-based 

7 and regional or nationally based plans. 

8 (c) AUTHORITY TO APPLY PACE RULES.—For plan 

9 year 2011 and subsequent plan years, the Secretary may 

10 apply the payment rules under section 1894(d) of the So11 cial Security Act (42 U.S.C. 1395eee(d)) to Fully Inte12 grated Dual Eligible Special Needs Plans rather than the 

13 payment rules that would otherwise apply to such plans 

14 under part C. 

15 (d) BUDGET NEUTRAL ADJUSTMENTS.—If the Sec16 retary determines that the application of subsections (a), 

17 (b), and (c) result in expenditures under title XVIII of 

18 the Social Security Act that exceed the expenditures under 

19 such title that would have been made without such appli20 cation, the Secretary shall provide for an appropriate ad21 justment to payment rates under part C of such title for 

22 beneficiaries for whom the risk adjustment payment mech23 anism overpays in relation to Medicare fee-for-service in 

24 order to eliminate such excess. 


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1 SEC. 5. ADVANCE ALIGNMENT OF MEDICARE AND MED2 ICAID FOR DUAL ELIGIBLES. 

3 (a) MEDICARE AND MEDICAID INTEGRATION PRO4 GRAMS.— 

5 (1) DESIGNATION.— 

6 (A) IN GENERAL.—For plan year 2011 

7 and subsequent plan years, the Secretary shall 

8 have in place a process under which the Sec9 retary designates dual eligible SNPs as Fully 

10 Integrated Dual Eligible Special Needs Plans 

11 for the purpose of advancing fully integrated 

12 Medicare and Medicaid benefits and services for 

13 dual beneficiaries, including State designated 

14 Dual subsets. 

15 (B) CRITERIA FOR DESIGNATION.—In 

16 order to be designated as a Fully Integrated 

17 Dual Eligible Special Needs Plan, the dual eli18 gible SNP shall meet the following require19 ments: 

20 (i) The dual eligible SNP provides 

21 dual eligibles with access to Medicare and 

22 Medicaid benefits specified by the State for 

23 Medicaid beneficiaries enrolled in inte24 grated programs under a single managed 

25 care organization (MCO). 


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1 (ii) The dual eligible SNP has a con2 tract in place with a State Medicaid agency 

3 that includes coverage of specified primary, 

4 acute, and long-term care benefits and 

5 services, consistent with State policy, 

6 under risk-based financing. 

7 (iii) The dual eligible SNP coordinates 

8 the delivery of covered Medicare and Med9 icaid health and long-term care services, 

10 consistent with State policy, using aligned 

11 care management and specialty care net12 work methods for high-risk beneficiaries. 

13 (iv) The dual eligible SNP employs 

14 policies and procedures approved by the 

15 Secretary and the State to coordinate or 

16 integrate enrollment, member materials, 

17 communications, grievance and appeals, 

18 and quality assurance. 

19 (v) The dual eligible SNP provides ad20 vanced person-centered, integrated care for 

21 the full array of primary, acute, and resi22 dential and home and community-based 

23 long-term care services, using a robust ad24 vanced medical home model that— 


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1 (I) empowers dual eligibles with 

2 serious chronic conditions and their 

3 family caregivers to optimize their 

4 health and well-being; 

5 (II) provides a comprehensive 

6 array of patient-centered benefits and 

7 services designed to meet the unique 

8 needs of dual eligibles; 

9 (III) helps dual eligibles and 

10 their family caregivers to access the 

11 right care, at the right time, in the 

12 right place, given the nature of their 

13 condition; 

14 (IV) aligns the incentives of re15 lated care providers to improve transi16 tions and care continuity; and 

17 (V) optimizes total quality and 

18 cost performance across time, place, 

19 and profession. 

20 (2) INTEGRATION AUTHORITY.—In order to in21 crease simplicity for dual eligibles in accessing and 

22 coordinating Medicare and Medicaid benefits, the 

23 Secretary, working in conjunction with States, on a 

24 State by State basis, consistent with existing statu25 tory authority, is encouraged to establish a single 


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1 administrative structure and process under titles 

2 XVIII and XIX for Fully Integrated Dual Eligible 

3 Special Needs Plans, under a three-way contract or 

4 Memorandum of Understanding, among CMS, the 

5 State, and related plans, for— 

6 (A) the enrollment of dual eligibles; 

7 (B) member materials and related commu8 nications; 

9 (C) care management and model of care 

10 requirements; 

11 (D) reporting, auditing, and performance 

12 evaluation; 

13 (E) grievance and appeals procedures; and 

14 (F) payment methods. 

15 (3) ALIGNMENT OF MEDICARE AND MEDICAID

16 POLICIES AND PROCEDURES FOR SNPS SERVING

17 DUAL ELIGIBLES.—In order to increase simplicity 

18 for dual eligibles in accessing and coordinating 

19 Medicare and Medicaid benefits by enhancing coordi20 nation between CMS and State Medicaid agencies in 

21 the oversight of SNPs insofar as they serve dual eli22 gibles, the Secretary, working in collaboration with 

23 State Medicaid Agencies, may modify rules, policies, 

24 and procedures under titles XVIII and XIX of such 

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1 care and Medicaid requirements, including mar2 keting, enrollment, care coordination, auditing, re3 porting, quality assurance, and other relevant over4 sight functions. 

5 (4) REPORTS TO CONGRESS.— 

6 (A) INTERIM REPORT.—Not later than De7 cember 31, 2013, the Secretary shall submit to 

8 Congress an interim report on the impact of in9 tegrating Medicare and Medicaid benefits and 

10 services on total quality and cost performance 

11 in serving dual eligibles. 

12 (B) FINAL REPORT.—Not later than De13 cember 31, 2015, the Secretary shall submit to 

14 Congress a final report on the impact of inte15 grating Medicare and Medicaid benefits and 

16 services on total quality and cost performance 

17 in serving dual eligibles. 

18 (C) REQUIREMENT.—A report under sub19 paragraph (A) and (B) shall include rec20 ommendations for such legislative and adminis21 trative actions as the Secretary determines ap22 propriate to further advance Medicare and Med23 icaid integration, including options for inte24 grating Medicare and Medicaid funding, to faVerDate Nov 24 2008 20:56 Jun 09, 2009 Jkt 079200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2758.IH H2758

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1 cilitate ongoing improvements in total quality 

2 and cost performance in care of dual eligibles. 

3 (D) QUALITY AND COST PERFORMANCE.— 

4 Not later than 6 months after the date of the 

5 enactment of this Act, the Secretary, working 

6 in consultation with consumers, plans, and 

7 States, shall identify the measures and bench8 marks to be used for evaluating cost and qual9 ity performance for purposes of subparagraph 

10 (C). 

11 (b) OFFICE OF MEDICARE/MEDICAID INTEGRA12 TION.— 

13 (1) ESTABLISHMENT.—The Secretary shall es14 tablish or designate an Office on Medicare/Medicaid 

15 Integration (in this subsection referred to as the 

16 ‘‘Office’’) for the purpose of aligning Medicare and 

17 Medicaid policies and procedures and developing 

18 tools to support State integration efforts in order 

19 to— 

20 (A) simplify dual eligible access to Medi21 care and Medicaid benefits and services; 

22 (B) improve care continuity and ensure 

23 safe and effective care transitions; 


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1 (C) eliminate cost shifting between Medi2 care and Medicaid and among related care pro3 viders; 

4 (D) eliminate regulatory conflicts between 

5 Medicare and Medicaid rules; and 

6 (E) improve total cost and quality per7 formance. 

8 (2) RESPONSIBILITIES.—The responsibilities of 

9 the Office are to develop policies and procedures 

10 to— 

11 (A) oversee the designation, implementa12 tion, and oversight of Fully Integrated Dual El13 igible Special Needs Plans under subsection 

14 (a)(1) in collaboration with the States, with au15 thority to effectively align Medicare and Med16 icaid policy for dual eligibles; 

17 (B) provide State Medicaid agencies with 

18 training, materials, technical assistance, and 

19 other resources in support of advancing Medi20 care and Medicaid integration in States where 

21 Fully Integrated Dual Eligible Special Needs 

22 Plans have been designated and other integra23 tion initiatives are being advanced to coordinate 

24 and align primary, acute, and long-term care 


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1 benefits for dual eligibles through a State plan 

2 option or other means; 

3 (C) identify incentives for States to ad4 vance the integration of Medicare and Medicaid 

5 to improve total cost and quality performance, 

6 including shared cost savings among consumers, 

7 plans, and Federal and State governments with 

8 respect to State initiatives for advancing Medi9 care and Medicaid integration; 

10 (D) support State efforts to coordinate and 

11 align acute and long-term care benefits for dual 

12 eligibles through a State plan option or other 

13 means; 

14 (E) provide support for coordination of 

15 State and Federal contracting and oversight for 

16 dual integration programs supportive of the 

17 goals described in paragraph (1); 

18 (F) align Federal rules for Medicaid man19 aged care and Medicare Advantage Plans to in20 clude methods for integrating marketing, enroll21 ment, grievances and appeals, auditing, report22 ing, quality assurance, and other relevant over23 sight functions; 

24 (G) serve as a liaison between CMS central 

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1 cation of CMS rules, policies, and auditing 

2 practices as such rules, policies, and auditing 

3 practices pertain to dual eligibles; 

4 (H) monitor total combined Medicare and 

5 Medicaid costs in serving dual eligibles and 

6 make recommendations for optimizing total 

7 quality and cost performance across both pro8 grams; and 

9 (I) work with the Congressional Budget 

10 Office and the Office of Management and 

11 Budget to establish a process for evaluating 

12 total Medicare and Medicaid spending for dual 

13 eligibles who are enrolled in Fully Integrated 

14 Dual Eligible Special Needs Plans such that the 

15 enrollment of such dual eligibles in such plans 

16 is treated as ‘‘budget neutral’’ if the combined 

17 Medicare and Medicaid costs under such plans 

18 do not exceed the combined costs of providing 

19 Medicare and Medicaid services on a fee-for20 service basis for a comparable risk group. 

21 (3) FUNDING.—For each of fiscal years 2010 

22 through 2014, of the amount of the reductions in 

23 payments attributable to average per capita monthly 

24 savings described in paragraph (3)(C) or (4)(C) of 

25 section 1854(b) of the Social Security Act that are 


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1 not provided as a monthly rebate under paragraph 

2 (1)(C) of such section, $2,000,000 shall be available 

3 for purposes of funding the Office. 

4 SEC. 6. CONTINUOUS ELIGIBILITY FOR MEDICAID FOR CER5 TAIN INDIVIDUALS. 

6 (a) IN GENERAL.—Section 1902(e) of the Social Se7 curity Act (42 U.S.C. 1396a(e)) is amended by adding at 

8 the end the following: 

9 ‘‘(14) The plan shall provide that an individual who 

10 has attained age 65 and has been determined for a period 

11 of 12 consecutive months to be a full-benefit dual eligible 

12 individual (as defined in section 1935(c)(6)) shall be pre13 sumed to remain eligible for benefits under the plan with14 out any need for further redetermination or recertifi15 cation.’’. 

16 (b) EFFECTIVE DATE.—The amendment made by 

17 subsection (a) takes effect on January 1, 2010. 

18 SEC. 7. DEFINITIONS. 

19 In this Act: 

20 (1) CMS.—The term ‘‘CMS’’ means the Cen21 ters for Medicare & Medicaid Services. 

22 (2) DUAL ELIGIBLE.—The term ‘‘dual eligible’’ 

23 means an MA eligible individual (as defined in sec24 tion 1851(a)(3) of the Social Security Act, 42 

25 U.S.C. 13195w–21(a)(3)) who is also entitled to 


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1 medical assistance under a State plan under title 

2 XIX of the Social Security Act. 

3 (3) DUAL ELIGIBLE SNP.—The term ‘‘dual eli4 gible SNP’’ means a SNP described in section 

5 1859(b)(6)(A)(ii) of the Social Security Act. 

6 (4) MEDICAID.—The term ‘‘Medicaid’’ means 

7 the program under title XIX of the Social Security 

8 Act. 

9 (5) MEDICARE.—The term ‘‘Medicare’’ means 

10 the program under title XVIII of the Social Security 

11 Act. 

12 (6) MEDICARE FEE-FOR-SERVICE.—The term 

13 ‘‘Medicare fee-for-service’’ means the original Medi14 care fee-for-service program under parts A and B of 

15 title XVIII of the Social Security Act. 

16 (7) SECRETARY.—The term ‘‘Secretary’’ means 

17 the Secretary of Health and Human Services. 

18 (8) SNP.—The term ‘‘SNP’’ means a special19 ized MA plan for special needs individuals, as de20 fined in section 1859(b)(6)(A) of the Social Security 

21 Act (42 U.S.C. 1395w–28(b)(6)(A)). 

22 (9) STATE.—The term ‘‘State’’ has the mean23 ing given such term for purposes of title XIX of the 

24 Social Security Act. 

Æ 


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