amount equal to the Federal medical assistance per-
centage, increased by 10 percentage points, of the 
expenditures incurred by the State for the provision 
or conduct of the services or activities described in 
paragraph (3). 
‘‘(2) EXPENDITURE CRITERIA.—A State shall—
‘‘(A) develop criteria for determining the 
expenditures described in paragraph (1) in col-
laboration with the individuals and representa-
tives described in subsection (b)(1); and 
‘‘(B) submit such criteria for approval by 
the Secretary. 
‘‘(3) SERVICES AND ACTIVITIES DESCRIBED.—
For purposes of paragraph (1), the services and ac-
tivities described in this subparagraph are the fol-
lowing: 
‘‘(A) One-stop intake, referral, and institu-
tional diversion services. 
‘‘(B) Identifying and remedying gaps and 
inequities in the State’s current provision of 
long-term services, particularly those services 
that are provided based on such factors as age, 
disability type, ethnicity, income, institutional 
bias, or other similar factors.
‘‘(C) Establishment of consumer participa-
tion and consumer governance mechanisms, 
such as cooperatives and regional service au-
thorities, that are managed and controlled by 
individuals with significant disabilities who use 
community-based services and supports or their 
representatives. 
‘‘(D) Activities designed to enhance the 
skills, earnings, benefits, supply, career, and fu-
ture prospects of workers who provide commu-
nity-based attendant services and supports. 
‘‘(E) Continuous improvement activities 
that are designed to ensure and enhance the 
health and well-being of individuals who rely on 
community-based attendant services and sup-
ports, particularly activities involving or initi-
ated by consumers of such services and sup-
ports or their representatives. 
‘‘(F) Family support services to augment 
the efforts of families and friends to enable in-
dividuals with disabilities of all ages to live in 
their own homes and communities. 
‘‘(G) Health promotion and wellness serv-
ices and activities.
‘‘(H) Provider recruitment and enhance-
ment activities, particularly such activities that 
encourage the development and maintenance of 
consumer controlled cooperatives or other small 
businesses or microenterprises that provide 
community-based attendant services and sup-
ports or related services. 
‘‘(I) Activities designed to ensure service 
and systems coordination. 
‘‘(J) Any other services or activities that 
the Secretary deems appropriate.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) take effect on October 1, 2003. 
SEC. 103. INCREASED FEDERAL FINANCIAL PARTICIPATION 
FOR CERTAIN EXPENDITURES. 
(a) IN GENERAL.—Section 1935 of the Social Secu-
rity Act, as added by section 101(b) and amended by sec-
tion 102, is amended by inserting after subsection (d) the 
following: 
‘‘(e) INCREASED FEDERAL FINANCIAL PARTICIPA-
TION FOR CERTAIN EXPENDITURES.—
‘‘(1) ELIGIBILITY FOR PAYMENT.—
‘‘(A) IN GENERAL.—In the case of a State 
that the Secretary determines satisfies the re-
quirements of subparagraph (B), the Secretary
shall pay the State the amounts described in 
paragraph (2) in addition to any other pay-
ments provided for under section 1903 or this 
section for the provision of community-based at-
tendant services and supports. 
‘‘(B) REQUIREMENTS.—The requirements 
of this subparagraph are the following: 
‘‘(i) The State has an approved plan 
amendment under this section. 
‘‘(ii) The State has incurred expendi-
tures described in paragraph (2). 
‘‘(iii) The State develops and submits 
to the Secretary criteria to identify and se-
lect such expenditures in accordance with 
the requirements of paragraph (3). 
‘‘(iv) The Secretary determines that 
payment of the applicable percentage of 
such expenditures (as determined under 
paragraph (2)(B)) would enable the State 
to provide a meaningful choice of receiving 
community-based services and supports to 
individuals with disabilities and elderly in-
dividuals who would otherwise only have 
the option of receiving institutional care.
‘‘(2) 
AMOUNTS
AND
EXPENDITURES
DE-
SCRIBED.—
‘‘(A) EXPENDITURES
IN
EXCESS
OF
150 
PERCENT
OF
BASELINE
AMOUNT.—The 
amounts and expenditures described in this 
paragraph are an amount equal to the applica-
ble percentage, as determined by the Secretary 
in accordance with subparagraph (B), of the ex-
penditures incurred by the State for the provi-
sion of community-based attendant services and 
supports to an individual that exceed 150 per-
cent of the average cost of providing nursing fa-
cility services to an individual who resides in 
the State and is eligible for such services under 
this title, as determined in accordance with cri-
teria established by the Secretary. 
‘‘(B) 
APPLICABLE
PERCENTAGE.—The 
Secretary shall establish a payment scale for 
the expenditures described in subparagraph (A) 
so that the Federal financial participation for 
such expenditures gradually increases from 70 
percent to 90 percent as such expenditures in-
crease.
‘‘(3) SPECIFICATION OF ORDER OF SELECTION 
FOR
EXPENDITURES.—In order to receive the 
amounts described in paragraph (2), a State shall—
‘‘(A) develop, in collaboration with the in-
dividuals and representatives described in sub-
section (b)(1) and pursuant to guidelines estab-
lished by the Secretary, criteria to identify and 
select the expenditures submitted under that 
paragraph; and 
‘‘(B) submit such criteria to the Sec-
retary.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) takes effect on October 1, 2003. 
TITLE II—PROMOTION OF SYS-
TEMS CHANGE AND CAPACITY 
BUILDING 
SEC. 201. GRANTS TO PROMOTE SYSTEMS CHANGE AND CA-
PACITY BUILDING. 
(a) AUTHORITY TO AWARD GRANTS.—
(1) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the 
‘‘Secretary’’) shall award grants to eligible States to 
carry out the activities described in subsection (b). 
(2) APPLICATION.—In order to be eligible for a 
grant under this section, a State shall submit to the
Secretary an application in such form and manner, 
and that contains such information, as the Secretary 
may require. 
(b) PERMISSIBLE ACTIVITIES.—A State that receives 
a grant under this section may use funds provided under 
the grant for any of the following activities, focusing on 
areas of need identified by the State and the Consumer 
Task Force established under subsection (c): 
(1) The development and implementation of the 
provision of community-based attendant services and 
supports under section 1935 of the Social Security 
Act (as added by section 101(b) and amended by 
sections 102 and 103) through active collaboration 
with—
(A) individuals with disabilities; 
(B) elderly individuals; 
(C) representatives of such individuals; and 
(D) providers of, and advocates for, serv-
ices and supports for such individuals. 
(2) Substantially involving individuals with sig-
nificant disabilities and representatives of such indi-
viduals in jointly developing, implementing, and con-
tinually improving a mutually acceptable comprehen-
sive, effectively working statewide plan for pre-
tives, with respect to the personal assistance 
and supports they rely upon to lead inde-
pendent, self-directed lives; 
(C) enhancing the skills, earnings, benefits, 
supply, career, and future prospects of workers 
who provide community-based attendant serv-
ices and supports; 
(D) engaging in a variety of needs assess-
ment and data gathering; 
(E) developing strategies for modifying 
policies, practices, and procedures that result in 
unnecessary 
institutional 
bias 
or 
the 
overmedicalization of long-term services and 
supports; 
(F) engaging in interagency coordination 
and single point of entry activities; 
(G) providing training and technical assist-
ance with respect to the provision of commu-
nity-based attendant services and supports; 
(H) engaging in—
(i) public awareness campaigns; 
(ii) facility-to-community transitional 
activities; and 
(iii) 
demonstrations 
of 
new 
ap-
proaches; and
(I) engaging in other systems change ac-
tivities necessary for developing, implementing, 
or evaluating a comprehensive statewide system 
of community-based attendant services and sup-
ports. 
(6) Ensuring that the activities funded by the 
grant are coordinated with other efforts to increase 
personal attendant services and supports, includ-
ing—
(A) programs funded under or amended by 
the Ticket to Work and Work Incentives Im-
provement Act of 1999 (Public Law 106–170; 
113 Stat. 1860); 
(B) grants funded under the Families of 
Children With Disabilities Support Act of 2000 
(42 U.S.C. 15091 et seq.); and 
(C) other initiatives designed to enhance 
the delivery of community-based services and 
supports to individuals with disabilities and el-
derly individuals. 
(7) Engaging in transition partnership activities 
with nursing facilities and intermediate care facili-
ties for the mentally retarded that utilize and build 
upon items and services provided to individuals with 
disabilities or elderly individuals under the medicaid
program under title XIX of the Social Security Act, 
or by Federal, State, or local housing agencies, inde-
pendent living centers, and other organizations con-
trolled by consumers or their representatives. 
(c) CONSUMER TASK FORCE.—
(1) ESTABLISHMENT AND DUTIES.—To be eli-
gible to receive a grant under this section, each 
State shall establish a Consumer Task Force (re-
ferred to in this subsection as the ‘‘Task Force’’) to 
assist the State in the development, implementation, 
and evaluation of real choice systems change initia-
tives. 
(2) APPOINTMENT.—Members of the Task 
Force shall be appointed by the Chief Executive Of-
ficer of the State in accordance with the require-
ments of paragraph (3), after the solicitation of rec-
ommendations from representatives of organizations 
representing a broad range of individuals with dis-
abilities, elderly individuals, representatives of such 
individuals, and organizations interested in individ-
uals with disabilities and elderly individuals. 
(3) COMPOSITION.—
(A) IN GENERAL.—The Task Force shall 
represent a broad range of individuals with dis-
abilities from diverse backgrounds and shall in-
clude representatives from Developmental Dis-
abilities Councils, Mental Health Councils, 
State Independent Living Centers and Councils, 
Commissions on Aging, organizations that pro-
vide services to individuals with disabilities and 
consumers of long-term services and supports. 
(B) INDIVIDUALS WITH DISABILITIES.—A 
majority of the members of the Task Force 
shall be individuals with disabilities or rep-
resentatives of such individuals. 
(C) LIMITATION.—The Task Force shall 
not include employees of any State agency pro-
viding services to individuals with disabilities 
other than employees of entities described in 
the Developmental Disabilities Assistance and 
Bill of Rights Act of 2000 (42 U.S.C. 15001 et 
seq.). 
(d) ANNUAL REPORT.—
(1) STATES.—A State that receives a grant 
under this section shall submit an annual report to 
the Secretary on the use of funds provided under the 
grant in such form and manner as the Secretary 
may require.
(2) SECRETARY.—The Secretary shall submit 
to Congress an annual report on the grants made 
under this section. 
(e) AUTHORIZATION OF APPROPRIATIONS.—
(1) IN GENERAL.—There is authorized to be 
appropriated to carry out this section, $50,000,000 
for each of fiscal years 2004 through 2006. 
(2) AVAILABILITY.—Amounts appropriated to 
carry out this section shall remain available without 
fiscal year limitation. 
SEC. 202. DEMONSTRATION PROJECT TO ENHANCE CO-
ORDINATION OF CARE UNDER THE MEDI-
CARE AND MEDICAID PROGRAMS FOR NON-
ELDERLY DUAL ELIGIBLE INDIVIDUALS. 
(a) DEFINITIONS.—In this section: 
(1) NON-ELDERLY
DUALLY
ELIGIBLE
INDI-
VIDUAL.—The term ‘‘non-elderly dually eligible indi-
vidual’’ means an individual who—
(A) has not attained age 65; and 
(B) is enrolled in the medicare and med-
icaid programs established under titles XVIII 
and XIX, respectively, of the Social Security 
Act (42 U.S.C. 1395 et seq., 1396 et seq.).
(2) PROJECT.—The term ‘‘project’’ means the 
demonstration project authorized to be conducted 
under this section. 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(b) AUTHORITY TO CONDUCT PROJECT.—The Sec-
retary shall conduct a project under this section for the 
purpose of evaluating service coordination and cost-shar-
ing approaches with respect to the provision of commu-
nity-based services and supports to non-elderly dually eli-
gible individuals. 
(c) REQUIREMENTS.—
(1) NUMBER
OF
PARTICIPANTS.—Not more 
than 5 States may participate in the project. 
(2) APPLICATION.—A State that desires to par-
ticipate in the project shall submit an application to 
the Secretary, at such time and in such form and 
manner as the Secretary shall specify. 
(3) DURATION.—The project shall be conducted 
for at least 5, but not more than 10 years. 
(d) EVALUATION AND REPORT.—
(1) EVALUATION.—Not later than 1 year prior 
to the termination date of the project, the Secretary, 
in consultation with States participating in the 
project, representatives of non-elderly dually eligible