I 
109TH CONGRESS 
1ST SESSION H. R. 3063
To authorize the Secretary of Health and Human Services to provide grants 
to States to conduct demonstration projects that are designed to enable 
Medicaid-eligible individuals to receive support for appropriate and nec-
essary long-term services in the settings of their choice. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 24, 2005
Mr. KILDEE introduced the following bill; which was referred to the 
Committee on Energy and Commerce 
A BILL 
To authorize the Secretary of Health and Human Services 
to provide grants to States to conduct demonstration 
projects that are designed to enable Medicaid-eligible in-
dividuals to receive support for appropriate and nec-
essary long-term services in the settings of their choice.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Money Follows the 
Person Act of 2005’’.
SEC. 2. MONEY FOLLOWS THE PERSON REBALANCING DEM-
ONSTRATION. 
(a) PROGRAM PURPOSE AND AUTHORITY.—The Sec-
retary of Health and Human Services (in this section re-
ferred to as the ‘‘Secretary’’) is authorized to award, on 
a competitive basis, grants to States in accordance with 
this section for demonstration projects (each in this sec-
tion referred to as an ‘‘MFP demonstration project’’) de-
signed to achieve the following objectives with respect to 
institutional and home and community-based long-term 
care services under State medicaid programs: 
(1) REBALANCING.—Increase the use of home 
and community-based, rather than institutional, 
long-term care services. 
(2) MONEY FOLLOWS THE PERSON.—Eliminate 
barriers or mechanisms, whether in the State law, 
the State medicaid plan, the State budget, or other-
wise, that prevent or restrict the flexible use of med-
icaid funds to enable medicaid-eligible individuals to 
receive support for appropriate and necessary long-
term services in the settings of their choice. 
(3) CONTINUITY
OF
SERVICE.—Increase the 
ability of the State medicaid program to assure con-
tinued provision of home and community-based long-
term care services to eligible individuals who choose
to transition from an institutional to a community 
setting. 
(4) QUALITY
ASSURANCE
AND
QUALITY
IM-
PROVEMENT.—Ensure that procedures are in place 
(at least comparable to those required under the 
qualified HCB program) to provide quality assur-
ance for eligible individuals receiving medicaid home 
and community-based long-term care services and to 
provide for continuous quality improvement in such 
services. 
(b) DEFINITIONS.—For purposes of this section: 
(1) HOME AND COMMUNITY-BASED LONG-TERM 
CARE SERVICES.—The term ‘‘home and community-
based long-term care services’’ means, with respect 
to a State medicaid program, home and community-
based services (including home health and personal 
care services) that are provided under the State’s 
qualified HCB program or that could be provided 
under such a program but are otherwise provided 
under the medicaid program. 
(2) ELIGIBLE INDIVIDUAL.—The term ‘‘eligible 
individual’’ means, with respect to an MFP dem-
onstration project of a State, an individual in the 
State—
(A) who, immediately before beginning 
participation 
in 
the 
MFP 
demonstration 
project—
(i) resides (and has resided, for a pe-
riod of not less than six months or for 
such longer minimum period, not to exceed 
2 years, as may be specified by the State) 
in an inpatient facility; 
(ii) is receiving medicaid benefits for 
inpatient services furnished by such inpa-
tient facility; and 
(iii) with respect to whom a deter-
mination has been made that, but for the 
provision of home and community-based 
long-term care services, the individual 
would continue to require the level of care 
provided in an inpatient facility; and 
(B) who resides in a qualified residence be-
ginning on the initial date of participation in 
the demonstration project. 
(3) INPATIENT FACILITY.—The term ‘‘inpatient 
facility’’ means a hospital, nursing facility, or inter-
mediate care facility for the mentally retarded. Such 
term includes an institution for mental diseases, but 
only, with respect to a State, to the extent medical
assistance is available under the State medicaid plan 
for services provided by such institution. 
(4) INDIVIDUAL’S
AUTHORIZED
REPRESENTA-
TIVE.—The term ‘‘individual’s authorized represent-
ative’’ means, with respect to an eligible individual, 
the individual’s parent, family member, guardian, 
advocate, or other authorized representative of the 
individual. 
(5) MEDICAID.—The term ‘‘medicaid’’ means, 
with respect to a State, the State program under 
title XIX of the Social Security Act (including any 
waiver or demonstration under such title or under 
section 1115 of such Act relating to such title). 
(6) QUALIFIED
HCB
PROGRAM.—The term 
‘‘qualified HCB program’’ means a program pro-
viding home and community-based long-term care 
services operating under medicaid, whether or not 
operating under waiver authority. 
(7) QUALIFIED RESIDENCE.—The term ‘‘quali-
fied residence’’ means, with respect to an eligible in-
dividual—
(A) a home owned or leased by the indi-
vidual or the individual’s family member; 
(B) an apartment with an individual lease, 
with lockable access and egress, and which in-
cludes living, sleeping, bathing, and cooking 
areas over which the individual or the individ-
ual’s family has domain and control; and 
(C) a residence, in a community-based res-
idential setting, in which no more than 4 unre-
lated individuals reside. 
(8) QUALIFIED
EXPENDITURES.—The term 
‘‘qualified expenditures’’ means expenditures by the 
State under its MFP demonstration project for 
home and community-based long-term care services 
for an eligible individual participating in the MFP 
demonstration project, but only with respect to serv-
ices furnished during the 12-month period beginning 
on the date the individual is discharged from an in-
patient facility referred to in paragraph (2)(A)(i). 
(9) 
SELF-DIRECTED
SERVICES.—The 
term 
‘‘self-directed’’ means, with respect to, home and 
community-based long-term care services for an eli-
gible individual, such services for the individual 
which are planned and purchased under the direc-
tion and control of such individual or the individ-
ual’s 
authorized 
representative, 
including 
the 
amount, duration, scope, provider, and location of 
such services, under the State medicaid program 
consistent with the following requirements:
(A) ASSESSMENT.—There is an assess-
ment of the needs, capabilities, and preferences 
of the individual with respect to such services. 
(B) SERVICE PLAN.—Based on such as-
sessment, there is developed jointly with such 
individual or the individual’s authorized rep-
resentative a plan for such services for such in-
dividual that is approved by the State and 
that—
(i) specifies those services which the 
individual or the individual’s authorized 
representative would be responsible for di-
recting; 
(ii) identifies the methods by which 
the individual or the individual’s author-
ized representative will select, manage, and 
dismiss providers of such services; 
(iii) specifies the role of family mem-
bers and others whose participation is 
sought by the individual or the individual’s 
authorized representative with respect to 
such services; 
(iv) is developed through a person-
centered process that—
(I) is directed by the individual 
or the individual’s authorized rep-
resentative; 
(II) builds upon the individual’s 
capacity to engage in activities that 
promote community life and that re-
spects the individual’s preferences, 
choices, and abilities; and 
(III) involves families, friends, 
and professionals as desired or re-
quired by the individual or the indi-
vidual’s authorized representative; 
(v) includes appropriate risk manage-
ment techniques that recognize the roles 
and sharing of responsibilities in obtaining 
services in a self-directed manner and as-
sure the appropriateness of such plan 
based upon the resources and capabilities 
of the individual or the individual’s author-
ized representative; and 
(vi) may include an individualized 
budget which identifies the dollar value of 
the services and supports under the control 
and direction of the individual or the indi-
vidual’s authorized representative.
(C) BUDGET
PROCESS.—With respect to 
individualized budgets described in subpara-
graph (B)(vi), the State application under sub-
section (c)—
(i) describes the method for calcu-
lating the dollar values in such budgets 
based on reliable costs and service utiliza-
tion; 
(ii) defines a process for making ad-
justments in such dollar values to reflect 
changes in individual assessments and 
service plans; and 
(iii) provides a procedure to evaluate 
expenditures under such budgets. 
(10) STATE.—The term ‘‘State’’ has the mean-
ing given such term for purposes of title XIX of the 
Social Security Act. 
(c) STATE APPLICATION.—A State seeking approval 
of an MFP demonstration project shall submit to the Sec-
retary, at such time and in such format as the Secretary 
requires, an application meeting the following require-
ments and containing such additional information, provi-
sions, and assurances, as the Secretary may require: 
(1) ASSURANCE OF A PUBLIC DEVELOPMENT 
PROCESS.—The application contains an assurance
that the State has engaged, and will continue to en-
gage, in a public process for the design, develop-
ment, and evaluation of the MFP demonstration 
project that allows for input from eligible individ-
uals, the families of such individuals, authorized rep-
resentatives of such individuals, providers, and other 
interested parties. 
(2) OPERATION IN CONNECTION WITH QUALI-
FIED
HCB
PROGRAM
TO
ASSURE
CONTINUITY
OF 
SERVICES.—The State will conduct the MFP dem-
onstration project for eligible individuals in conjunc-
tion with the operation of a qualified HCB program 
that is in operation (or approved) in the State for 
such individuals in a manner that assures continuity 
of medicaid coverage for such individuals so long as 
such individuals continue to be eligible for medical 
assistance. 
(3) DEMONSTRATION
PROJECT
PERIOD.—The 
application shall specify the period of the MFP dem-
onstration project, which shall include at least two 
consecutive fiscal years in the 5-fiscal-year period 
beginning with fiscal year 2006. 
(4) SERVICE
AREA.—The application shall 
specify the service area or areas of the MFP dem-
onstration project, which may be a Statewide area or 
one or more geographic areas of the State. 
(5) TARGETED GROUPS AND NUMBERS OF INDI-
VIDUALS SERVED.—The application shall specify—
(A) the target groups of eligible individuals 
to be assisted to transition from an inpatient 
facility to a qualified residence during each fis-
cal year of the MFP demonstration project; 
(B) the projected numbers of eligible indi-
viduals in each targeted group of eligible indi-
viduals to be so assisted during each such year; 
and 
(C) the estimated total annual qualified ex-
penditures for each fiscal year of the MFP 
demonstration project. 
(6) 
INDIVIDUAL
CHOICE, 
CONTINUITY
OF 
CARE.—The application shall contain assurances 
that—
(A) each eligible individual or the individ-
ual’s authorized representative will be provided 
the opportunity to make an informed choice re-
garding whether to participate in the MFP 
demonstration project; 
(B) each eligible individual or the individ-
ual’s authorized representative will choose the
qualified residence in which the individual will 
reside and the setting in which the individual 
will receive home and community-based long-
term care services; 
(C) the State will continue to make avail-
able, so long as the State operates its qualified 
HCB program consistent with applicable re-
quirements, home and community-based long-
term care services to each individual who com-
pletes participation in the MFP demonstration 
project for as long as the individual remains eli-
gible for medical assistance for such services 
under such qualified HCB program (including 
meeting a requirement relating to requiring a 
level of care provided in an inpatient facility 
and continuing to require such services). 
(7) REBALANCING.—The application shall—
(A) provide such information as the Sec-
retary may require concerning the dollar 
amounts of State medicaid expenditures for the 
fiscal year, immediately preceding the first fis-
cal year of the State’s MFP demonstration 
project, for long-term care services and the per-
centage of such expenditures that were for in-
stitutional long-term care services or were for
home and community-based long-term care 
services; 
(B)(i) specify the methods to be used by 
the State to increase, for each fiscal year dur-
ing the MFP demonstration project, the dollar 
amount of such total expenditures for home and 
community-based long-term care services and 
the percentage of such total expenditures for 
long-term care services that are for home and 
community-based long-term care services; and 
(ii) describe the extent to which the MFP 
demonstration project will contribute to accom-
plishment of objectives described in subsection 
(a). 
(8) MONEY FOLLOWS THE PERSON.—The appli-
cation shall describe the methods to be used by the 
State to eliminate any legal, budgetary, or other bar-
riers to flexibility in the availability of medicaid 
funds to pay for long-term care services for eligible 
individuals participating in the project in the appro-
priate settings of their choice, including costs to 
transition from an institutional setting to a qualified 
residence. 
(9) MAINTENANCE OF EFFORT AND COST-EF-
FECTIVENESS.—The application shall contain or be
accompanied by such information and assurances as 
may be required to satisfy the Secretary that—
(A) total expenditures under the State 
medicaid program for home and community-
based long-term care services will not be less 
for any fiscal year during the MFP demonstra-
tion project than for the greater of such ex-
penditures for—
(i) fiscal year 2004; or 
(ii) any succeeding fiscal year before 
the first year of the MFP demonstration 
project; and 
(B) in the case of a qualified HCB pro-
gram operating under a waiver under sub-
section (c) or (d) of section 1915 of the Social 
Security Act (42 U.S.C. 1396n), but for the 
amount awarded under a grant under this sec-
tion, the State program would continue to meet 
the cost-effectiveness requirements of subsection 
(c)(2)(D) of such section or comparable require-
ments under subsection (d)(5) of such section, 
respectively. 
(10) WAIVER REQUESTS.—The application shall 
contain or be accompanied by requests for any modi-
fication or adjustment of waivers of medicaid re-
quirements described in subsection (d)(3), including 
adjustments to maximum numbers of individuals in-
cluded and package of benefits, including one-time 
transitional services, provided. 
(11) QUALITY
ASSURANCE
AND
QUALITY
IM-
PROVEMENT.—The application shall include—
(A) a plan satisfactory to the Secretary for 
quality assurance and quality improvement for 
home and community-based long-term care 
services under the State medicaid program, in-
cluding a plan to assure the health and welfare 
of individuals participating in the MFP dem-
onstration project; and 
(B) an assurance that the State will co-
operate in carrying out activities under sub-
section (f) to develop and implement continuous 
quality assurance and quality improvement sys-
tems for home and community-based long-term 
care services. 
(12) OPTIONAL PROGRAM FOR SELF-DIRECTED 
SERVICES.—If the State elects to provide for any 
home and community-based long-term care services 
as self-directed services (as defined in subsection 
(b)(9)) under the MFP demonstration project, the 
application shall provide the following:
(A) MEETING REQUIREMENTS.—A descrip-
tion of how the project will meet the applicable 
requirements of such subsection for the provi-
sion of self-directed services. 
(B) VOLUNTARY ELECTION.—A description 
of how eligible individuals will be provided with 
the opportunity to make an informed election to 
receive self-directed services under the project 
and after the end of the project. 
(C) STATE SUPPORT IN SERVICE PLAN DE-
VELOPMENT.—Satisfactory assurances that the 
State will provide support to eligible individuals 
who self-direct in developing and implementing 
their service plans. 
(D) OVERSIGHT
OF
RECEIPT
OF
SERV-
ICES.—Satisfactory assurances that the State 
will provide oversight of eligible individuals’ re-
ceipt of such self-directed services, including 
steps to assure the quality of services provided 
and that the provision of such services are con-
sistent with the service plan under such sub-
section. 
Nothing in this section shall be construed as requir-
ing a State to make an election under the project to 
provide for home and community-based long-term
care services as self-directed services, or as requiring 
an individual to elect to receive self-directed services 
under the project. 
(13) REPORTS AND EVALUATION.—The applica-
tion shall provide that—
(A) the State will furnish to the Secretary 
such reports concerning the MFP demonstra-
tion project, on such timetable, in such uniform 
format, and containing such information as the 
Secretary may require, as will allow for reliable 
comparisons of MFP demonstration projects 
across States; and 
(B) the State will participate in and co-
operate with the evaluation of the MFP dem-
onstration project. 
(d) 
SECRETARY’S
AWARD
OF
COMPETITIVE 
GRANTS.—
(1) IN GENERAL.—The Secretary shall award 
grants under this section on a competitive basis to 
States selected from among those with applications 
meeting the requirements of subsection (c), in ac-
cordance with the provisions of this subsection. 
(2) SELECTION AND MODIFICATION OF STATE 
APPLICATIONS.—In selecting State applications for 
the awarding of such a grant, the Secretary—
(A) shall take into consideration the man-
ner in which and extent to which the State pro-
poses to achieve the objectives specified in sub-
section (a); 
(B) shall seek to achieve an appropriate 
national balance in the numbers of eligible indi-
viduals, within different target groups of eligi-
ble individuals, who are assisted to transition to 
qualified residences under MFP demonstration 
projects, and in the geographic distribution of 
States operating MFP demonstration projects; 
(C) shall give preference to State applica-
tions proposing—
(i) to provide transition assistance to 
eligible individuals within multiple target 
groups; and 
(ii) to provide eligible individuals with 
the opportunity to receive home and com-
munity-based long-term care services as 
self-directed services, as defined in sub-
section (b)(9); and 
(D) shall take such objectives into consid-
eration in setting the annual amounts of State 
grant awards under this section.
(3) WAIVER AUTHORITY.—The Secretary is au-
thorized to waive the following provisions of title 
XIX of the Social Security Act, to the extent nec-
essary to enable a State initiative to meet the re-
quirements and accomplish the purposes of this sec-
tion: 
(A) 
STATEWIDENESS.—Section 
1902(a)(1), in order to permit implementation 
of a State initiative in a selected area or areas 
of the State. 
(B) 
COMPARABILITY.—Section 
1902(a)(10)(B), in order to permit a State ini-
tiative to assist a selected category or categories 
of individuals described in subsection (b)(2)(A). 
(C) 
INCOME
AND
RESOURCES
ELIGI-
BILITY.—Section 
1902(a)(10)(C)(i)(III), 
in 
order to permit a State to apply institutional 
eligibility rules to individuals transitioning to 
community-based care. 
(D) 
PROVIDER
AGREEMENTS.—Section 
1902(a)(27), in order to permit a State to im-
plement self-directed services in a cost-effective 
manner. 
(4) CONDITIONAL
APPROVAL
OF
OUTYEAR 
GRANT.—In awarding grants under this section, the
Secretary shall condition the grant for the second 
and any subsequent fiscal years of the grant period 
on the following: 
(A) 
NUMERICAL
BENCHMARKS.—The 
State must demonstrate to the satisfaction of 
the Secretary that it is meeting numerical 
benchmarks specified in the grant agreement 
for—
(i) increasing State medicaid support 
for home and community-based long-term 
care services under subsection (c)(5); and 
(ii) numbers of eligible individuals as-
sisted to transition to qualified residences. 
(B) QUALITY OF CARE.—The State must 
demonstrate to the satisfaction of the Secretary 
that it is meeting the requirements under sub-
section (c)(9) to assure the health and welfare 
of MFP demonstration project participants. 
(e) PAYMENTS TO STATES; CARRYOVER OF UNUSED 
GRANT AMOUNTS.—
(1) PAYMENTS.—For each calendar quarter in 
a fiscal year during the period a State is awarded 
a grant under subsection (d), the Secretary shall pay 
to the State from its grant award for such fiscal 
year an amount equal to the lesser of—
(A) 100 percent of the amount of qualified 
expenditures made during such quarter; or 
(B) the total amount remaining in such 
grant award for such fiscal year (taking into 
account the application of paragraph (2)). 
(2) CARRYOVER OF UNUSED AMOUNTS.—Any 
portion of a State grant award for a fiscal year 
under this section remaining at the end of such fis-
cal year shall remain available to the State for the 
next four fiscal years, subject to paragraph (3). 
(3) 
RE-AWARDING
OF
CERTAIN
UNUSED 
AMOUNTS.—In the case of a State that the Sec-
retary determines pursuant to subsection (d)(4) has 
failed to meet the conditions for continuation of a 
MFP demonstration project under this section in a 
succeeding year or years, the Secretary shall rescind 
the grant awards for such succeeding year or years, 
together with any unspent portion of an award for 
prior years, and shall add such amounts to the ap-
propriation for the immediately succeeding fiscal 
year for grants under this section. 
(4) PREVENTING DUPLICATION OF PAYMENT.—
The payment under an MFP demonstration project 
with respect to qualified expenditures shall be in lieu 
of any payment with respect to such expenditures
that could otherwise be paid under medicaid, includ-
ing under section 1903(a) of the Social Security Act. 
Nothing in the previous sentence shall be construed 
as preventing the payment under medicaid for such 
expenditures in a grant year after amounts available 
to pay for such expenditures under the MFP dem-
onstration project have been exhausted. 
(f) QUALITY ASSURANCE AND IMPROVEMENT; TECH-
NICAL ASSISTANCE; OVERSIGHT.—
(1) IN
GENERAL.—The Secretary, either di-
rectly or by grant or contract, shall provide for tech-
nical assistance to and oversight of States for pur-
poses of upgrading quality assurance and quality im-
provement systems under medicaid home and com-
munity-based waivers, including—
(A) dissemination of information on prom-
ising practices; 
(B) guidance on system design elements 
addressing the unique needs of participating 
beneficiaries; 
(C) ongoing consultation on quality, in-
cluding assistance in developing necessary tools, 
resources, and monitoring systems; and 
(D) guidance on remedying programmatic 
and systemic problems.
(2) FUNDING.—From the amounts appro-
priated under subsection (h) for each of fiscal years 
2006 through 2010, not more than $2,400,000 shall 
be available to the Secretary to carry out this sub-
section. 
(g) RESEARCH AND EVALUATION.—
(1) IN GENERAL.—The Secretary, directly or 
through grant or contract, shall provide for research 
on and a national evaluation of the program under 
this section, including assistance to the Secretary in 
preparing the final report required under paragraph 
(2). The evaluation shall include an analysis of pro-
jected and actual savings related to the transition of 
individuals to qualified residences in each State con-
ducting an MFP demonstration project. 
(2) FINAL REPORT.—The Secretary shall make 
a final report to the President and the Congress, not 
later than September 30, 2011, reflecting the eval-
uation described in paragraph (1) and providing 
findings and conclusions on the conduct and effec-
tiveness of MFP demonstration projects. 
(3) FUNDING.—From the amounts appro-
priated under subsection (h) for each of fiscal years 
2006 through 2010, not more than $1,100,000 per
year shall be available to the Secretary to carry out 
this subsection. 
(h) APPROPRIATIONS.—
(1) IN
GENERAL.—There are appropriated, 
from any funds in the Treasury not otherwise appro-
priated, for grants to carry out this section—
(A) $250,000,000 for fiscal year 2006; 
(B) $300,000,000 for fiscal year 2007; 
(C) $350,000,000 for fiscal year 2008; 
(D) $400,000,000 for fiscal year 2009; 
and 
(E) $450,000,000 for fiscal year 2010. 
(2) AVAILABILITY.—Amounts made available 
under paragraph (1) for a fiscal year shall remain 
available for the awarding of grants to States by not 
later than September 30, 2010. 
(i) RULE OF CONSTRUCTION.—Nothing in this Act 
shall be construed as requiring a State to agree to a 
capped allotment for expenditures for long-term care serv-
ices under medicaid.
Æ