I 
108TH CONGRESS 
1ST SESSION H. R. 1195
To amend title XVIII of the Social Security Act to direct the Secretary 
of Health and Human Services to carry out a demonstration program 
under the Medicare Program to examine the clinical and cost effective-
ness of providing medical adult day care center services to Medicare 
beneficiaries. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 11, 2003
Mr. LEWIS of Kentucky introduced the following bill; which was referred to 
the Committee on Ways and Means, and in addition to the Committee 
on Energy and Commerce, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned 
A BILL 
To amend title XVIII of the Social Security Act to direct 
the Secretary of Health and Human Services to carry 
out a demonstration program under the Medicare Pro-
gram to examine the clinical and cost effectiveness of 
providing medical adult day care center services to Medi-
care beneficiaries.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION. 1. DEMONSTRATION PROJECT FOR MEDICAL 
ADULT DAY CARE SERVICES. 
(a) ESTABLISHMENT.—Subject to the succeeding 
provisions of this section, the Secretary of Health and 
Human Services shall establish a demonstration project 
(in this section referred to as the ‘‘demonstration project’’) 
under which the Secretary shall, as part of a plan of an 
episode of care for home health services established for 
a medicare beneficiary, permit a home health agency, di-
rectly or under arrangements with a medical adult day 
care facility, to provide medical adult day care services as 
a substitute for a portion of home health services that 
would otherwise be provided in the beneficiary’s home. 
(b) PAYMENT.—
(1) IN GENERAL.—The amount of payment for 
an episode of care for home health services, a por-
tion of which consists of substitute medical adult 
day care services, under the demonstration project 
shall be made at a rate equal to 95 percent of the 
amount that would otherwise apply for such home 
health services under section 1895 of the Social Se-
curity Act (42 U.S.C. 1395fff). In no case may a 
home health agency, or a medical adult day care fa-
cility under arrangements with a home health agen-
cy, separately charge a beneficiary for medical adult 
day care services furnished under the plan of care.
(2) BUDGET
NEUTRALITY
FOR
DEMONSTRA-
TION PROJECT.—Notwithstanding any other provi-
sion of law, the Secretary shall provide for an appro-
priate reduction in the aggregate amount of addi-
tional payments made under section 1895 of the So-
cial Security Act (42 U.S.C. 1395fff) to reflect any 
increase in amounts expended from the Trust Funds 
as a result of the demonstration project conducted 
under this section. 
(c) DEMONSTRATION PROJECT SITES.—The project 
established under this section shall be conducted in not 
more than 5 States selected by the Secretary that license 
or certify providers of services that furnish medical adult 
day care services. 
(d) DURATION.—The Secretary shall conduct the 
demonstration project for a period of 3 years. 
(e) VOLUNTARY PARTICIPATION.—Participation of 
medicare beneficiaries in the demonstration project shall 
be voluntary. The total number of such beneficiaries that 
may participate in the project at any given time may not 
exceed 15,000. 
(f) PREFERENCE IN SELECTING AGENCIES.—In se-
lecting home health agencies to participate under the dem-
onstration project, the Secretary shall give preference to 
those agencies that are currently licensed or certified
through common ownership and control to furnish medical 
adult day care services. 
(g) WAIVER AUTHORITY.—The Secretary may waive 
such requirements of title XVIII of the Social Security Act 
as may be necessary for the purposes of carrying out the 
demonstration project, other than waiving the requirement 
that an individual be homebound in order to be eligible 
for benefits for home health services. 
(h) EVALUATION AND REPORT.—The Secretary shall 
conduct an evaluation of the clinical and cost effectiveness 
of the demonstration project. Not later 30 months after 
the commencement of the project, the Secretary shall sub-
mit to Congress a report on the evaluation, and shall in-
clude in the report the following: 
(1) An analysis of the patient outcomes and 
costs of furnishing care to the medicare beneficiaries 
participating in the project as compared to such out-
comes and costs to beneficiaries receiving only home 
health services for the same health conditions. 
(2) Such recommendations regarding the exten-
sion, expansion, or termination of the project as the 
Secretary determines appropriate. 
(i) DEFINITIONS.—In this section: 
(1) HOME HEALTH AGENCY.—The term ‘‘home 
health agency’’ has the meaning given such term in
section 1861(o) of the Social Security Act (42 
U.S.C. 1395x(o)). 
(2) MEDICAL ADULT DAY CARE FACILITY.—The 
term ‘‘medical adult day care facility’’ means a facil-
ity that—
(A) has been licensed or certified by a 
State to furnish medical adult day care services 
in the State for a continuous 2-year period; 
(B) is engaged in providing skilled nursing 
services and other therapeutic services directly 
or under arrangement with a home health agen-
cy; 
(C) meets such standards established by 
the Secretary to assure quality of care and such 
other requirements as the Secretary finds nec-
essary in the interest of the health and safety 
of individuals who are furnished services in the 
facility; and 
(D) provides medical adult day care serv-
ices. 
(3) MEDICAL
ADULT
DAY
CARE
SERVICES.—
The term ‘‘medical adult day care services’’ means—
(A) home health service items and services 
described in paragraphs (1) through (7) of sec-
tion 1861(m) furnished in a medical adult day 
care facility; 
(B) a program of supervised activities fur-
nished in a group setting in the facility that—
(i) is designed to promote physical 
and mental health of the individuals; and 
(ii) meet such criteria as the Sec-
retary determines appropriate; and 
(C) such other services as the Secretary 
may specify. 
(4) 
MEDICARE
BENEFICIARY.—The 
term 
‘‘medicare beneficiary’’ means an individual entitled 
to benefits under part A of this title, enrolled under 
part B of this title, or both.
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