I 
108TH CONGRESS 
2D SESSION 
H. R. 5197 
To amend title XIX of the Social Security Act to provide funds to States 
to enable them to increase the wages paid to targeted direct support 
professionals in providing services to individuals with disabilities under 
the Medicaid program. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 30, 2004 
Mr. TERRY (for himself and Mrs. CAPPS) introduced the following bill; which 
was referred to the Committee on Energy and Commerce 
A BILL 
To amend title XIX of the Social Security Act to provide 
funds to States to enable them to increase the wages 
paid to targeted direct support professionals in providing 
services to individuals with disabilities under the Med-
icaid program. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; FINDINGS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Direct Support Professional Fairness and Security Act 
of 2004’’. 
(b) FINDINGS.—Congress finds the following:
(1) Direct support professionals are the pri-
mary providers of long term care services for mil-
lions of individuals who have physical or mental dis-
abilities. Direct support professionals provide assist-
ance with activities of daily living, instrumental ac-
tivities of daily living, assistance with rehabilitation, 
habilitation, training needs and other tasks. All pro-
vide essential supports that help keep individuals 
with disabilities connected to their communities. 
(2) These workers who provide intimate sup-
ports are predominately female and many are the 
sole breadwinners of their families. Although work-
ing and paying taxes, many women in these jobs re-
main impoverished and are eligible for many of the 
same Federal and state public assistance programs 
upon which the very individuals with disabilities to 
whom they provide supports must depend. 
(3) Throughout the nation, there is a critical 
shortage of direct support professionals. Vacancy 
and turn over rates are high. In many parts of the 
country, individuals with disabilities are unable to 
access the services they need, thereby jeopardizing 
their health and quality of life, placing even greater 
burdens on their family members and informal care-
givers and creating long waiting lists for community 
placement. 
(4) The crisis that the nation faces today will 
only get worse. Over the next 30 years, there will be 
a rapid rise of the population over 65 years of age. 
At the same time, advances in medical science and 
drug therapy are increasing the number of people, of 
all ages, living with severe disabilities. Thus, while 
demand for direct support professional services is in-
creasing, the pool of younger, entry level workers is 
shrinking. By 2010, more than 780,000 additional 
workers must be found to fill long-term direct sup-
port staff positions. 
(5) To stabilize and increase the number of di-
rect support professionals in the work force, the 
wages and benefits of direct support professionals 
must be improved and made equitable among long 
term support options. 
(6) Medicaid is the single-largest payor of long- 
term supports and services for people with disabil-
ities. Enhanced Federal Medicaid matching funds 
should be available to assist states committed to ad-
dressing wage differentials among direct support 
professionals by increasing the wages of direct sup-
port professionals and supporting and improving the 
stability of the direct support professional workforce. 
SEC. 2. MEDICAID AMENDMENT. 
(a) AUTHORIZING ESTABLISHMENT OF DIRECT SUP-
PORT PROFESSIONAL WAGE ENHANCEMENT PLANS.— 
Title XIX of the Social Security Act is amended— 
(1) by redesignating section 1936 as section 
1937; and 
(2) by inserting after section 1935 the following 
new section: 
‘‘DIRECT SUPPORT PROFESSIONAL WAGE ENHANCEMENT 
PLAN 
‘‘SEC. 1936. (a) STATE OPTION.—As a condition for 
the receipt of increased funding described in subsection 
(f), a State is required to provide for the implementation 
of a direct support professional wage enhancement plan 
under this section. 
‘‘(b) DIRECT SUPPORT PROFESSIONAL WAGE EN-
HANCEMENT PLAN.— 
‘‘(1) IN GENERAL.—For purposes of this section, the 
term ‘direct support professional wage enhancement plan’ 
means a plan of a State that the Secretary determines 
meets the following requirements: 
‘‘(A) DEADLINE FOR SUBMISSION.—The plan is 
submitted to the Secretary not later than 120 days
after the date the Secretary provides notice to States 
under paragraph (3). 
‘‘(B) CONTENTS.— 
‘‘(i) EQUALIZATION
OF
HOURLY
WAGE 
RATES.—The plan must describe how the State 
intends to use the funds made available under 
this section to increase the hourly wage rate of 
targeted direct support professionals so that by 
the end of the 5-year implementation period (as 
defined in subsection (g)(4)) such rate is equal 
to the average hourly wage rate of reference di-
rect support professionals. 
‘‘(ii) ADDITIONAL PROVISIONS.—The plan 
must include the additional information de-
scribed in subsection (c). 
‘‘(C) IMPLEMENTATION.—The plan must be de-
veloped and implemented in accordance with sub-
section (d). 
‘‘(D) ANNUAL REPORTS.—The State must pro-
vide for annual assessments and reports in accord-
ance with subsection (e). 
‘‘(2) MODIFICATION OF PLAN.—Nothing in this sec-
tion shall be construed as preventing a State from time 
to time and with the approval of the Secretary from modi-
fying a direct support professional wage enhancement plan
so long as such plan, as modified, continues to meet the 
requirements of paragraph (1). 
‘‘(3) NOTICE.—Not later than 90 days after the date 
of the enactment of this section, the Secretary shall pro-
vide notice to States regarding the provisions of this sec-
tion, including the availability of enhanced funding to im-
plement direct support professional wage enhancement 
plans. 
‘‘(c) CONTENTS OF PLAN.—A direct support profes-
sional wage enhancement plan shall include, consistent 
with the other requirements of this section, the following: 
‘‘(1) A description of how the State intends to 
use funds provided under this section to meet the re-
quirement of subsection (b)(1). 
‘‘(2) A description of the prevailing hourly wage 
rates for targeted direct support professionals before 
the implementation of such plan and any hourly 
wage rate differentials between targeted direct sup-
port professionals and reference direct support pro-
fessionals. 
‘‘(3) The impact of wage differentials and labor 
market conditions on the recruitment and retention 
of targeted direct support professionals, including 
current or projected labor shortages.
‘‘(4) The identification of a specific, five-year 
performance goal to increase the hourly wage rate of 
targeted direct support professionals so as to elimi-
nate any wage rate differential between targeted and 
reference direct support professionals and the meth-
odology to be used by the State to achieve its goal. 
‘‘(5) The annual performance goals and targets 
that the State will monitor to track progress toward 
achieving its five-year performance goal. 
‘‘(6) Current efforts to increase and stabilize 
the State’s direct support professional labor force 
and how the plan shall be coordinated with such ef-
forts. 
‘‘(7) Methods for assuring that funds provided 
under this section shall be spent in accordance with 
such plan, and shall not be used to supplant existing 
funds for wages and benefits or to reduce the State’s 
expenditures below the amount that the State would 
have paid had the plan not been in effect. 
‘‘(8) A description of the stakeholders and col-
laborative process used consistent with subsection 
(d) to develop the plan and the means by which such 
collaboration shall continue during the implementa-
tion of the plan.
‘‘(9) Assurances satisfactory to the Secretary 
that upon the expiration of the 5-year implementa-
tion period, the State shall provide funding nec-
essary to maintain the wage rates attained under the 
plan for targeted direct support professionals at the 
five-year performance goal increased annually there-
after by a percentage that is not less than the an-
nual percent increase in the employment cost index 
(as published quarterly by the Bureau of Labor Sta-
tistics). 
‘‘(d) DEVELOPMENT
AND
IMPLEMENTATION
OF 
PLAN.—A direct support professional wage enhancement 
plan shall be developed and implemented in collaboration 
with— 
‘‘(1) targeted individuals with disabilities and 
family representatives; 
‘‘(2) targeted direct support professionals; 
‘‘(3) agencies or provider organizations that 
serve targeted individuals with disabilities and em-
ploy targeted direct support professionals; and 
‘‘(4) individuals and organizations representing 
the interests of those described in paragraphs (1) 
through (3). 
‘‘(e) ANNUAL ASSESSMENT AND REPORT.— 
‘‘(1) IN GENERAL.—A State shall—
‘‘(A) perform an assessment of the 
operation of the direct care support profes-
sional wage enhancement plan in the State 
in each fiscal year; and 
‘‘(B) report to the Secretary by Janu-
ary 1 following the end of the fiscal year, 
on the results of such assessment. 
‘‘(2) CONTENTS.—Each such assessment shall 
include the following: 
‘‘(A) An assessment of the effectiveness of 
the plan in increasing the wages of targeted di-
rect support professionals and reducing or 
eliminating the wage gap with reference direct 
support professionals. 
‘‘(B) An assessment of the State’s progress 
in meeting its annual performance goals under 
the plan. 
‘‘(C) An assessment of the effectiveness of 
the State’s collaboration with stakeholders on 
plan development and implementation issues. 
‘‘(D) A review and assessment of State ac-
tivities to coordinate the plan with other activi-
ties in the State to improve and stabilize the di-
rect support professional workforce.
‘‘(E) Recommendations for improving the 
plan. 
‘‘(F) Such other information as the Sec-
retary may specify. 
‘‘(f) INCREASE IN PAYMENT TO IMPLEMENT PLAN.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
for each calendar quarter during the 5-year imple-
mentation period in which a direct support profes-
sional wage enhancement plan is in effect under this 
section in a State, the amount of payment for med-
ical assistance under section 1903(a)(1) shall be in-
creased by the wage enhancement incentive percent-
age (as defined in paragraph (3)(G)) multiplied by 
the portion of total funds expended during the quar-
ter for the provision of direct support services to tar-
geted individuals that are attributable to the wages 
of targeted direct support professionals. 
‘‘(2) LIMITATION.— 
‘‘(A) IN GENERAL.—Payments made under 
paragraph (1) shall be used only to increase the 
wages of targeted direct support professionals. 
‘‘(B) TREATMENT
OF
EMPLOYEE
BENE-
FITS
AND
SALARY
RELATED
BENEFITS.—For 
purposes of subparagraph (A), payments for 
costs of employee benefits and other salary re-
lated benefits (including mandatory employment 
taxes and benefits) shall be treated as payments 
to increase the wages of targeted direct support 
professionals so long as payments attributable 
to such non-wage benefits do not exceed 20 per-
cent of the total amounts that increase the 
wages of targeted direct support professionals. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) ANNUAL RATE DIFFERENTIAL PER-
CENTAGE.—The term ‘annual rate differential 
percentage’ means, with respect to a State for 
a year in which the direct support professional 
wage enhancement plan is in effect, the percent 
of the direct support professional wage rate dif-
ferential (as defined in subparagraph (E)) to be 
paid under plan for the year. 
‘‘(B) AVERAGE REFERENCE DIRECT SUP-
PORT
PROFESSIONAL
HOURLY
WAGE
RATE.— 
The term ‘average reference direct support pro-
fessional hourly wage rate’ means, for a year 
under a direct support professional wage en-
hancement plan, the average direct support pro-
fessional hourly wage rate (as defined in sub-
paragraph (D)), including any projected in-
crease, paid in the year to reference direct sup-
port professionals who are employed by the 
State or, if there are no such employees, to ref-
erence direct support professionals who are em-
ployed by local governments in the State, or, 
when necessary to meet the purpose of the plan, 
any other reference wage rate defined by the 
State and as approved by the Secretary. 
‘‘(C) BASE-YEAR AVERAGE TARGETED DI-
RECT SUPPORT PROFESSIONAL HOURLY WAGE 
RATE.—The term ‘average targeted direct sup-
port professional hourly wage rate’ means, for 
a State, the average direct support professional 
hourly wage rate (as defined in subparagraph 
(D)) paid to targeted direct support profes-
sionals under the State plan in the 12-month- 
period immediately preceding the 5-year imple-
mentation period. 
‘‘(D) DIRECT
SUPPORT
PROFESSIONAL 
HOURLY WAGE RATE.—The term ‘direct sup-
port professional hourly wage rate’ means— 
‘‘(i) the rate of hourly wage paid to a 
direct support professional; plus 
‘‘(ii) mandatory employment taxes 
and benefits (as defined in subparagraph
(F)) paid (as computed and applied on an 
hourly basis) with respect to such employ-
ment. 
‘‘(E) DIRECT
SUPPORT
PROFESSIONAL 
WAGE RATE DIFFERENTIAL.—The term ‘direct 
support professional wage rate differential’ 
means, for a State for a year, the amount by 
which— 
‘‘(i) the average reference direct sup-
port professional hourly wage rate (as de-
fined in subparagraph (B)) for the State 
and year, exceeds 
‘‘(ii) the base-year average targeted 
direct support professional hourly wage 
rate (as defined in subparagraph (C)) for 
the State. 
‘‘(F) MANDATORY
EMPLOYMENT
TAXES 
AND BENEFITS.—The term ‘mandatory employ-
ment taxes and benefits’ means taxes under 
section 3111 of the Internal Revenue Code of 
1986 (relating to the employer share of FICA 
taxes) and the employer’s share of unemploy-
ment compensation and worker’s compensation 
payments.
‘‘(G) WAGE
ENHANCEMENT
INCENTIVE 
PERCENTAGE.—The term ‘wage enhancement 
incentive percentage’ means— 
‘‘(i) the product of (I) the total direct 
support professional wage rate differential 
(as defined in subparagraph (E), and (II) 
annual rate differential percentage (as de-
fined in subparagraph (A)); divided by 
‘‘(ii) the average reference direct sup-
port professional hourly wage rate (as de-
fined in subparagraph (B)). 
‘‘(g) INSPECTOR GENERAL AUDIT.—The Secretary, 
through the Inspector General of the Department of 
Health and Human Services, shall audit a sample from 
among the States in order to assess the effectiveness of 
progress made in reducing or eliminating the wage gap 
between targeted and reference direct support profes-
sionals through funds under this section. 
‘‘(h) GAO STUDY.— 
‘‘(1) STUDY.—The Comptroller General of the 
United States shall conduct a study concerning the 
wage equalization and recruitment and retention of 
direct support professionals who are providing serv-
ices and supports to individuals with disabilities.
‘‘(2) REPORTS.—The Comptroller General shall 
submit to Congress reports, in the third and fifth 
years in which this section is being implemented, on 
progress made by States, and the impact of pay-
ments under this section, on providing wage equali-
zation and in improving recruitment and retention of 
direct support professionals. 
‘‘(i) DEFINITIONS.—For purposes of this section: 
‘‘(1) DIRECT
SUPPORT
PROFESSIONAL.—The 
term ‘direct support professional’ means an indi-
vidual who, whether in a supervisory or non-super-
visory capacity, provides services and supports, as 
needed, to an individual with a disability to assist in 
acquiring, maintaining or enhancing skills necessary 
to perform activities of daily living or instrumental 
activities of daily living and health-related functions 
through hands-on assistance, supervision, or cueing. 
Such term includes, among others, individuals who 
may be classified as nurses aides, home health aides, 
home care aides, personal care aides and personal 
assistants, in-home support workers, homemakers, 
behavioral specialists, habilitation specialist, mental 
health rehabilitation technicians, independent living 
skills specialists, crisis program workers, qualified
mental health or mental retardation professionals, 
and educational technicians. 
‘‘(2) DIRECT
SUPPORT
PROFESSIONAL
WAGE 
ENHANCEMENT
PLAN.—The term ‘direct support 
professional wage enhancement plan’ is defined in 
subsection (b)(1). 
‘‘(3) DIRECT
SUPPORT
SERVICES.—The term 
‘direct support services’ means a range of services 
and supports, provided by one or more persons, de-
signed to provide support and health-related services 
to an individual with a disability to enable them to 
perform, acquire, maintain or enhance skills nec-
essary to perform activities of daily living, instru-
mental activities of daily living (IADL) and health- 
related functions. Such term includes personal care 
services, consumer-directed personal assistance serv-
ices, rehabilitation services, habilitation services, and 
respite care. 
‘‘(4) INDIVIDUAL
WITH
A
DISABILITY.—The 
term ‘individual with a disability’ means an indi-
vidual who meets (or is regarded as meeting) the cri-
teria for being disabled under the supplemental secu-
rity income program under title XVI. Such term in-
cludes an individual who, regardless of age, is eligi-
ble for and receiving medical assistance under this 
title for any benefits described in paragraph (i)(8). 
‘‘(5) 5-YEAR
IMPLEMENTATION
PERIOD.—The 
term ‘5-year implementation period’ means, with re-
spect to a State and a direct support professional 
wage enhancement plan under this section, the pe-
riod of 20 calendar quarters beginning with the first 
full calendar quarter in which such plan is imple-
mented in the State under this section. Each of the 
five 4-calendar-quarter periods within such period 
shall be treated as a year for purposes of this sec-
tion. 
‘‘(6) REFERENCE
DIRECT
SUPPORT
PROFES-
SIONAL.—The term ‘reference direct support profes-
sional’ means a direct support professional who— 
‘‘(A) is employed by a State or local gov-
ernment entity; and 
‘‘(B) provides direct support services to 
targeted individuals with disabilities under this 
title. 
‘‘(7) TARGETED
DIRECT
SUPPORT
PROFES-
SIONAL.—The term ‘targeted direct support profes-
sional’ means a direct support professional who— 
‘‘(A) is not employed by a State or local 
government entity; and
‘‘(B) provides direct support services to 
targeted individuals with disabilities under this 
title. 
‘‘(8) TARGETED
INDIVIDUAL
WITH
A
DIS-
ABILITY.—The term ‘targeted individual with a dis-
ability’ means an individual with a disability who is 
eligible for and is receiving medical assistance under 
this title for personal care services under section 
1905(a)(23), for rehabilitative services under section 
1905(a)(13), for home health care services, for home 
and community-based services under a waiver ap-
proved under section 1915(c) or section 1115, or for 
intermediate care facility services for the mentally 
retarded.’’. 
(b) CONFORMING AMENDMENT.—Section 1903(a)(1) 
of such Act (42 U.S.C. 1396b(a)(1)) is amended by insert-
ing ‘‘and section 1936(f)’’ after ‘‘1923(f)’’. 
(c) AUTHORIZATION OF PLANNING GRANTS.—The 
Secretary of Health and Human Services is authorized to 
award State planning grants in an amount not to exceed, 
in the aggregate, $3,000,000, in order to assist States in 
establishing direct support professional wage enhancement 
plans under section 1936 of the Social Security Act, as 
inserted by subsection (a). 
Æ