subparagraph (D)), subject to subpara-
graph (C), the geographic index values to 
be applied under this subsection for such 
year shall be equal to the sum of the fol-
lowing: 
‘‘(I) 
CURRENT
LAW
COMPO-
NENT.—The old weighting factor (de-
scribed in clause (ii)) for such year 
multiplied by the geographic index 
values under this subsection for the 
fee schedule area that included such 
MSA that would have applied in such 
area (as estimated by the Secretary) 
if this paragraph did not apply. 
‘‘(II) 
MSA-BASED
COMPO-
NENT.—The 
MSA-based 
weighting 
factor (described in clause (iii)) for 
such year multiplied by the geographic 
index values computed for the fee 
schedule area under subparagraph (A) 
for the year (determined without re-
gard to this subparagraph). 
‘‘(ii) OLD WEIGHTING FACTOR.—The 
old weighting factor described in this 
clause—
‘‘(I) for 2017, is 5⁄6; and 
‘‘(II) for each succeeding year, is 
the old weighting factor described in 
this clause for the previous year 
minus 1⁄6. 
‘‘(iii) MSA-BASED
WEIGHTING
FAC-
TOR.—The MSA-based weighting factor 
described in this clause for a year is 1 
minus the old weighting factor under 
clause (ii) for that year. 
‘‘(C) HOLD HARMLESS.—For services fur-
nished in a transition area in California during 
a year beginning with 2017, the geographic 
index values to be applied under this subsection 
for such year shall not be less than the cor-
responding geographic index values that would 
have applied in such transition area (as esti-
mated by the Secretary) if this paragraph did 
not apply. 
‘‘(D) TRANSITION
AREA
DEFINED.—In 
this paragraph, the term ‘transition area’ 
means each of the following fee schedule areas 
for 2013: 
‘‘(i) The rest-of-State payment local-
ity.
100 
‘‘(ii) Payment locality 3. 
‘‘(E) REFERENCES
TO
FEE
SCHEDULE 
AREAS.—Effective for services furnished on or 
after January 1, 2017, for California, any ref-
erence in this section to a fee schedule area 
shall be deemed a reference to a fee schedule 
area established in accordance with this para-
graph.’’. 
(2) CONFORMING AMENDMENT TO DEFINITION 
OF FEE SCHEDULE AREA.—Section 1848(j)(2) of the 
Social Security Act (42 U.S.C. 1395w–4(j)(2)) is 
amended by striking ‘‘The term’’ and inserting ‘‘Ex-
cept as provided in subsection (e)(6)(D), the term’’. 
(i) DISCLOSURE
OF DATA USED TO ESTABLISH 
MULTIPLE PROCEDURE PAYMENT REDUCTION POLICY.— 
The Secretary of Health and Human Services shall make 
publicly available the information used to establish the 
multiple procedure payment reduction policy to the profes-
sional component of imaging services in the final rule pub-
lished in the Federal Register, v. 77, n. 222, November 
16, 2012, pages 68891–69380 under the physician fee 
schedule under section 1848 of the Social Security Act (42 
U.S.C. 1395w–4).
101 
SEC. 221. MEDICAID DSH. 
(a) MODIFICATIONS
OF REDUCTIONS
TO ALLOT-
MENTS.—Section 1923(f) of the Social Security Act (42 
U.S.C. 1396r–4(f)) is amended— 
(1) in paragraph (7)(A)— 
(A) in clause (i), by striking ‘‘2016 
through 2020’’ and inserting ‘‘2017 through 
2024’’; and 
(B) in clause (ii), by striking subclauses 
(I) through (IV), and inserting the following: 
‘‘(I) $1,800,000,000 for fiscal 
year 2017; 
‘‘(II) $4,700,000,000 for fiscal 
year 2018; 
‘‘(III) $4,700,000,000 for fiscal 
year 2019; 
‘‘(IV) $4,700,000,000 for fiscal 
year 2020; 
‘‘(V) $4,800,000,000 for fiscal 
year 2021; 
‘‘(VI) $5,000,000,000 for fiscal 
year 2022; 
‘‘(VII) $5,000,000,000 for fiscal 
year 2023; and 
‘‘(VIII) $4,400,000,000 for fiscal 
year 2024.’’; and
102 
(2) by striking paragraph (8) and inserting the 
following: 
‘‘(8) CALCULATION
OF
DSH 
ALLOTMENTS 
AFTER REDUCTIONS PERIOD.—The DSH allotment 
for a State for fiscal years after fiscal year 2024 
shall be calculated under paragraph (3) without re-
gard to paragraph (7).’’. 
(b) MACPAC REVIEW
AND
REPORT.—Section 
1900(b)(6) of the Social Security Act (42 U.S.C. 
1396(b)(6)) is amended— 
(1) by striking ‘‘MACPAC shall consult’’ and 
inserting the following: 
‘‘(A) IN GENERAL.—MACPAC shall con-
sult’’; and 
(2) by adding at the end the following: 
‘‘(B) REVIEW AND REPORTS REGARDING 
MEDICAID DSH.— 
‘‘(i) IN
GENERAL.—MACPAC shall 
review and submit an annual report to 
Congress on disproportionate share hos-
pital payments under section 1923. Each 
report shall include the information speci-
fied in clause (ii).
103 
‘‘(ii) REQUIRED
REPORT
INFORMA-
TION.—Each report required under this 
subparagraph shall include the following: 
‘‘(I) Data relating to changes in 
the number of uninsured individuals. 
‘‘(II) 
Data 
relating 
to 
the 
amount and sources of hospitals’ un-
compensated care costs, including the 
amount of such costs that are the re-
sult of providing unreimbursed or 
under-reimbursed 
services, 
charity 
care, or bad debt. 
‘‘(III) Data identifying hospitals 
with high levels of uncompensated 
care that also provide access to essen-
tial community services for low-in-
come, uninsured, and vulnerable popu-
lations, such as graduate medical edu-
cation, and the continuum of primary 
through quarternary care, including 
the provision of trauma care and pub-
lic health services. 
‘‘(IV) State-specific analyses re-
garding the relationship between the 
most recent State DSH allotment and
104 
the projected State DSH allotment for 
the succeeding year and the data re-
ported under subclauses (I), (II), and 
(III) for the State. 
‘‘(iii) DATA.—Notwithstanding any 
other provision of law, the Secretary regu-
larly shall provide MACPAC with the most 
recent State reports and most recent inde-
pendent certified audits submitted under 
section 1923(j), cost reports submitted 
under title XVIII, and such other data as 
MACPAC may request for purposes of con-
ducting the reviews and preparing and sub-
mitting the annual reports required under 
this subparagraph. 
‘‘(iv) SUBMISSION
DEADLINES.—The 
first report required under this subpara-
graph shall be submitted to Congress not 
later than February 1, 2016. Subsequent 
reports shall be submitted as part of, or 
with, each annual report required under 
paragraph (1)(C) during the period of fis-
cal years 2017 through 2024.’’.
105 
SEC. 222. REALIGNMENT OF THE MEDICARE SEQUESTER 
FOR FISCAL YEAR 2024. 
Paragraph (6) (relating to implementing direct 
spending reductions) of section 251A of the Balanced 
Budget and Emergency Deficit Control Act of 1985 (2 
U.S.C. 901a) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(D) Notwithstanding the 2 percent limit speci-
fied in subparagraph (A) for payments for the Medi-
care programs specified in section 256(d), the se-
questration order of the President under such sub-
paragraph for fiscal year 2024 shall be applied to 
such payments so that— 
‘‘(i) with respect to the first 6 months in 
which such order is effective for such fiscal 
year, the payment reduction shall be 4.0 per-
cent; and 
‘‘(ii) with respect to the second 6 months 
in which such order is so effective for such fis-
cal year, the payment reduction shall be 0.0 
percent.’’. 
SEC. 223. DEMONSTRATION PROGRAMS TO IMPROVE COM-
MUNITY MENTAL HEALTH SERVICES. 
(a) CRITERIA FOR CERTIFIED COMMUNITY BEHAV-
IORAL HEALTH CLINICS TO PARTICIPATE
IN DEM-
ONSTRATION PROGRAMS.—
106 
(1) PUBLICATION.—Not later than September 
1, 2015, the Secretary shall publish criteria for a 
clinic to be certified by a State as a certified com-
munity behavioral health clinic for purposes of par-
ticipating in a demonstration program conducted 
under subsection (d). 
(2) REQUIREMENTS.—The criteria published 
under this subsection shall include criteria with re-
spect to the following: 
(A) STAFFING.—Staffing requirements, in-
cluding criteria that staff have diverse discipli-
nary backgrounds, have necessary State-re-
quired license and accreditation, and are cul-
turally and linguistically trained to serve the 
needs of the clinic’s patient population. 
(B) AVAILABILITY AND ACCESSIBILITY OF 
SERVICES.—Availability and accessibility of 
services, including crisis management services 
that are available and accessible 24 hours a 
day, the use of a sliding scale for payment, and 
no rejection for services or limiting of services 
on the basis of a patient’s ability to pay or a 
place of residence. 
(C) CARE COORDINATION.—Care coordina-
tion, including requirements to coordinate care
107 
across settings and providers to ensure seamless 
transitions for patients across the full spectrum 
of health services including acute, chronic, and 
behavioral health needs. Care coordination re-
quirements shall include partnerships or formal 
contracts with the following: 
(i) Federally-qualified health centers 
(and as applicable, rural health clinics) to 
provide Federally-qualified health center 
services (and as applicable, rural health 
clinic services) to the extent such services 
are not provided directly through the cer-
tified community behavioral health clinic. 
(ii) Inpatient psychiatric facilities and 
substance use detoxification, post-detoxi-
fication step-down services, and residential 
programs. 
(iii) Other community or regional 
services, supports, and providers, including 
schools, child welfare agencies, juvenile and 
criminal justice agencies and facilities, In-
dian Health Service youth regional treat-
ment centers, State licensed and nationally 
accredited child placing agencies for thera-
108 
peutic foster care service, and other social 
and human services. 
(iv) Department of Veterans Affairs 
medical centers, independent outpatient 
clinics, drop-in centers, and other facilities 
of the Department as defined in section 
1801 of title 38, United States Code. 
(v) Inpatient acute care hospitals and 
hospital outpatient clinics. 
(D) SCOPE OF SERVICES.—Provision (in a 
manner reflecting person-centered care) of the 
following services which, if not available directly 
through the certified community behavioral 
health clinic, are provided or referred through 
formal relationships with other providers: 
(i) Crisis mental health services, in-
cluding 24-hour mobile crisis teams, emer-
gency crisis intervention services, and cri-
sis stabilization. 
(ii) Screening, assessment, and diag-
nosis, including risk assessment. 
(iii) Patient-centered treatment plan-
ning or similar processes, including risk as-
sessment and crisis planning.
109 
(iv) Outpatient mental health and 
substance use services. 
(v) Outpatient clinic primary care 
screening and monitoring of key health in-
dicators and health risk. 
(vi) Targeted case management. 
(vii) Psychiatric rehabilitation serv-
ices. 
(viii) Peer support and counselor serv-
ices and family supports. 
(ix) Intensive, community-based men-
tal health care for members of the armed 
forces and veterans, particularly those 
members and veterans located in rural 
areas, provided the care is consistent with 
minimum clinical mental health guidelines 
promulgated by the Veterans Health Ad-
ministration including clinical guidelines 
contained in the Uniform Mental Health 
Services Handbook of such Administration. 
(E) QUALITY AND OTHER REPORTING.— 
Reporting of encounter data, clinical outcomes 
data, quality data, and such other data as the 
Secretary requires.
110 
(F) ORGANIZATIONAL
AUTHORITY.—Cri-
teria that a clinic be a non-profit or part of a 
local government behavioral health authority or 
operated under the authority of the Indian 
Health Service, an Indian tribe or tribal organi-
zation pursuant to a contract, grant, coopera-
tive agreement, or compact with the Indian 
Health Service pursuant to the Indian Self-De-
termination Act (25 U.S.C. 450 et seq.), or an 
urban Indian organization pursuant to a grant 
or contract with the Indian Health Service 
under title V of the Indian Health Care Im-
provement Act (25 U.S.C. 1601 et seq.). 
(b) GUIDANCE ON DEVELOPMENT OF PROSPECTIVE 
PAYMENT SYSTEM FOR TESTING UNDER DEMONSTRA-
TION PROGRAMS.— 
(1) IN GENERAL.—Not later than September 1, 
2015, the Secretary, through the Administrator of 
the Centers for Medicare & Medicaid Services, shall 
issue guidance for the establishment of a prospective 
payment system that shall only apply to medical as-
sistance for mental health services furnished by a 
certified community behavioral health clinic partici-
pating in a demonstration program under subsection 
(d).
111 
(2) REQUIREMENTS.—The guidance issued by 
the Secretary under paragraph (1) shall provide 
that— 
(A) no payment shall be made for inpatient 
care, residential treatment, room and board ex-
penses, or any other non-ambulatory services, 
as determined by the Secretary; and 
(B) no payment shall be made to satellite 
facilities of certified community behavioral 
health clinics if such facilities are established 
after the date of enactment of this Act. 
(c) PLANNING GRANTS.— 
(1) IN GENERAL.—Not later than January 1, 
2016, the Secretary shall award planning grants to 
States for the purpose of developing proposals to 
participate in time-limited demonstration programs 
described in subsection (d). 
(2) USE OF FUNDS.—A State awarded a plan-
ning grant under this subsection shall— 
(A) solicit input with respect to the devel-
opment of such a demonstration program from 
patients, providers, and other stakeholders; 
(B) certify clinics as certified community 
behavioral health clinics for purposes of partici-
112 
pating in a demonstration program conducted 
under subsection (d); and 
(C) establish a prospective payment system 
for mental health services furnished by a cer-
tified community behavioral health clinic par-
ticipating in a demonstration program under 
subsection (d) in accordance with the guidance 
issued under subsection (b). 
(d) DEMONSTRATION PROGRAMS.— 
(1) IN GENERAL.—Not later than September 1, 
2017, the Secretary shall select States to participate 
in demonstration programs that are developed 
through planning grants awarded under subsection 
(c), meet the requirements of this subsection, and 
represent a diverse selection of geographic areas, in-
cluding rural and underserved areas. 
(2) APPLICATION REQUIREMENTS.— 
(A) IN GENERAL.—The Secretary shall so-
licit applications to participate in demonstration 
programs under this subsection solely from 
States awarded planning grants under sub-
section (c). 
(B) REQUIRED INFORMATION.—An appli-
cation for a demonstration program under this 
subsection shall include the following:
113 
(i) The target Medicaid population to 
be served under the demonstration pro-
gram. 
(ii) A list of participating certified 
community behavioral health clinics. 
(iii) Verification that the State has 
certified a participating clinic as a certified 
community behavioral health clinic in ac-
cordance with the requirements of sub-
section (b). 
(iv) A description of the scope of the 
mental health services available under the 
State Medicaid program that will be paid 
for under the prospective payment system 
tested in the demonstration program. 
(v) Verification that the State has 
agreed to pay for such services at the rate 
established under the prospective payment 
system. 
(vi) Such other information as the 
Secretary may require relating to the dem-
onstration program including with respect 
to determining the soundness of the pro-
posed prospective payment system.
114 
(3) NUMBER AND LENGTH OF DEMONSTRATION 
PROGRAMS.—Not more than 8 States shall be se-
lected for 2-year demonstration programs under this 
subsection. 
(4) REQUIREMENTS
FOR
SELECTING
DEM-
ONSTRATION PROGRAMS.— 
(A) IN
GENERAL.—The Secretary shall 
give preference to selecting demonstration pro-
grams where participating certified community 
behavioral health clinics— 
(i) provide the most complete scope of 
services described in subsection (a)(2)(D) 
to individuals eligible for medical assist-
ance under the State Medicaid program; 
(ii) will improve availability of, access 
to, and participation in, services described 
in subsection (a)(2)(D) to individuals eligi-
ble for medical assistance under the State 
Medicaid program; 
(iii) will improve availability of, access 
to, and participation in assisted outpatient 
mental health treatment in the State; or 
(iv) demonstrate the potential to ex-
pand available mental health services in a 
demonstration area and increase the qual-
115 
ity of such services without increasing net 
Federal spending. 
(5) PAYMENT FOR MEDICAL ASSISTANCE FOR 
MENTAL
HEALTH
SERVICES
PROVIDED
BY
CER-
TIFIED
COMMUNITY
BEHAVIORAL
HEALTH
CLIN-
ICS.— 
(A) IN GENERAL.—The Secretary shall pay 
a State participating in a demonstration pro-
gram under this subsection the Federal match-
ing percentage specified in subparagraph (B) 
for amounts expended by the State to provide 
medical assistance for mental health services 
described in the demonstration program appli-
cation in accordance with paragraph (2)(B)(iv) 
that are provided by certified community behav-
ioral health clinics to individuals who are en-
rolled in the State Medicaid program. Payments 
to States made under this paragraph shall be 
considered to have been under, and are subject 
to the requirements of, section 1903 of the So-
cial Security Act (42 U.S.C. 1396b). 
(B) FEDERAL MATCHING PERCENTAGE.— 
The Federal matching percentage specified in 
this subparagraph is with respect to medical as-
116 
sistance described in subparagraph (A) that is 
furnished— 
(i) to a newly eligible individual de-
scribed in paragraph (2) of section 1905(y) 
of the Social Security Act (42 U.S.C. 
1396d(y)), the matching rate applicable 
under paragraph (1) of that section; and 
(ii) to an individual who is not a 
newly eligible individual (as so described) 
but who is eligible for medical assistance 
under the State Medicaid program, the en-
hanced FMAP applicable to the State. 
(C) LIMITATIONS.— 
(i) IN GENERAL.—Payments shall be 
made under this paragraph to a State only 
for mental health services— 
(I) that are described in the dem-
onstration program application in ac-
cordance with paragraph (2)(iv); 
(II) for which payment is avail-
able under the State Medicaid pro-
gram; and 
(III) that are provided to an indi-
vidual who is eligible for medical as-
117 
sistance under the State Medicaid 
program. 
(ii) 
PROHIBITED
PAYMENTS.—No 
payment shall be made under this para-
graph— 
(I) for inpatient care, residential 
treatment, room and board expenses, 
or any other non-ambulatory services, 
as determined by the Secretary; or 
(II) with respect to payments 
made to satellite facilities of certified 
community behavioral health clinics if 
such facilities are established after the 
date of enactment of this Act. 
(6) WAIVER
OF
STATEWIDENESS
REQUIRE-
MENT.—The 
Secretary 
shall 
waive 
section 
1902(a)(1) of the Social Security Act (42 U.S.C. 
1396a(a)(1)) (relating to statewideness) as may be 
necessary to conduct demonstration programs in ac-
cordance with the requirements of this subsection. 
(7) ANNUAL REPORTS.— 
(A) IN GENERAL.—Not later than 1 year 
after the date on which the first State is se-
lected for a demonstration program under this 
subsection, and annually thereafter, the Sec-
118 
retary shall submit to Congress an annual re-
port on the use of funds provided under all 
demonstration programs conducted under this 
subsection. Each such report shall include— 
(i) an assessment of access to commu-
nity-based mental health services under the 
Medicaid program in the area or areas of 
a State targeted by a demonstration pro-
gram compared to other areas of the State; 
(ii) an assessment of the quality and 
scope of services provided by certified com-
munity behavioral health clinics compared 
to community-based mental health services 
provided in States not participating in a 
demonstration program under this sub-
section and in areas of a demonstration 
State that are not participating in the 
demonstration program; and 
(iii) an assessment of the impact of 
the demonstration programs on the Fed-
eral and State costs of a full range of men-
tal health services (including inpatient, 
emergency and ambulatory services). 
(B) RECOMMENDATIONS.—Not later than 
December 31, 2021, the Secretary shall submit
119 
to 
Congress 
recommendations 
concerning 
whether the demonstration programs under this 
section should be continued, expanded, modi-
fied, or terminated. 
(e) DEFINITIONS.—In this section: 
(1) FEDERALLY-QUALIFIED
HEALTH
CENTER 
SERVICES; FEDERALLY-QUALIFIED HEALTH CENTER; 
RURAL HEALTH CLINIC SERVICES; RURAL HEALTH 
CLINIC.—The terms ‘‘Federally-qualified health cen-
ter services’’, ‘‘Federally-qualified health center’’, 
‘‘rural health clinic services’’, and ‘‘rural health clin-
ic’’ have the meanings given those terms in section 
1905(l) of the Social Security Act (42 U.S.C. 
1396d(l)). 
(2) ENHANCED
FMAP.—The term ‘‘enhanced 
FMAP’’ has the meaning given that term in section 
2105(b) of the Social Security Act (42 U.S.C. 
1397dd(b)) but without regard to the second and 
third sentences of that section. 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(4) STATE.—The term ‘‘State’’ has the mean-
ing given such term for purposes of title XIX of the 
Social Security Act (42 U.S.C. 1396 et seq.). 
(f) FUNDING.—
120 
(1) IN
GENERAL.—Out of any funds in the 
Treasury not otherwise appropriated, there is appro-
priated to the Secretary— 
(A) for purposes of carrying out sub-
sections (a), (b), and (d)(7), $2,000,000 for fis-
cal year 2014; and 
(B) for purposes of awarding planning 
grants under subsection (c), $25,000,000 for 
fiscal year 2016. 
(2) AVAILABILITY.—Funds appropriated under 
paragraph (1) shall remain available until expended. 
SEC. 224. ASSISTED OUTPATIENT TREATMENT GRANT PRO-
GRAM FOR INDIVIDUALS WITH SERIOUS MEN-
TAL ILLNESS. 
(a) IN GENERAL.—The Secretary shall establish a 4- 
year pilot program to award not more than 50 grants each 
year to eligible entities for assisted outpatient treatment 
programs for individuals with serious mental illness. 
(b) CONSULTATION.—The Secretary shall carry out 
this section in consultation with the Director of the Na-
tional Institute of Mental Health, the Attorney General 
of the United States, the Administrator of the Administra-
tion for Community Living, and the Administrator of the 
Substance Abuse and Mental Health Services Administra-
tion.
121 
(c) SELECTING
AMONG
APPLICANTS.—The Sec-
retary— 
(1) may only award grants under this section to 
applicants that have not previously implemented an 
assisted outpatient treatment program; and 
(2) shall evaluate applicants based on their po-
tential to reduce hospitalization, homelessness, incar-
ceration, and interaction with the criminal justice 
system while improving the health and social out-
comes of the patient. 
(d) USE OF GRANT.—An assisted outpatient treat-
ment program funded with a grant awarded under this 
section shall include— 
(1) evaluating the medical and social needs of 
the patients who are participating in the program; 
(2) preparing and executing treatment plans for 
such patients that— 
(A) include criteria for completion of 
court-ordered treatment; and 
(B) provide for monitoring of the patient’s 
compliance with the treatment plan, including 
compliance with medication and other treat-
ment regimens; 
(3) providing for such patients case manage-
ment services that support the treatment plan;