I 
111TH CONGRESS 
1ST SESSION H. R. 2758 
To amend part C of title XVIII of the Social Security Act with respect 
to Medicare special needs plans and the alignment of Medicare and 
Medicaid for dually eligible individuals, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 8, 2009 
Mr. KIND (for himself and Ms. BALDWIN) introduced the following bill; which 
was referred to the Committee on Energy and Commerce, and in addition 
to the Committee on Ways and Means, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend part C of title XVIII of the Social Security Act 
with respect to Medicare special needs plans and the 
alignment of Medicare and Medicaid for dually eligible 
individuals, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Medicare Specialty Care Improvement and Protection 
Act of 2009’’. 
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(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Extension of SNP authority through December 31, 2013. 
Sec. 3. Improve risk adjustment for high-risk, high-cost beneficiaries. 
Sec. 4. Additional enhancements to ensure payment equity for specialized MA 
plans. 
Sec. 5. Advance alignment of Medicare and Medicaid for dual eligibles. 
Sec. 6. Continuous eligibility for Medicaid for certain individuals. 
Sec. 7. Definitions. 
SEC. 2. EXTENSION OF SNP AUTHORITY THROUGH DECEM-
BER 31, 2013. 
Section 1859(f) of the Social Security Act (42 U.S.C. 
1395w–28(f)), as amended by section 164(a) of the Medi-
care Improvements for Patients and Providers Act of 2008 
(Public Law 110–275), is amended by striking ‘‘2011’’ 
and inserting ‘‘2014 (or before January 1, 2016, in the 
case of a Fully Integrated Dual Eligible Special Needs 
Plan designated under section 5(a)(1)(A) of the Medicare 
Specialty Care Improvement and Protection Act of 
2009)’’. 
SEC. 3. IMPROVE RISK ADJUSTMENT FOR HIGH-RISK, HIGH- 
COST BENEFICIARIES. 
(a) EVALUATION.— 
(1) IN GENERAL.—The Secretary shall evaluate 
the Medicare Advantage risk adjustment payment 
mechanism under section 1853(a)(1)(C) of the So-
cial Security Act (42 U.S.C. 1395w–23(a)(1)(C)) 
and the risk adjustment payment mechanism under 
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section 1860D–15(c)(1)(A) of such Act (42 U.S.C. 
1395w–115(c)(1)(A)) in order to resolve plan pay-
ment inequities relative to Medicare fee-for-service 
payments for beneficiaries identified under para-
graph (2). 
(2) REQUIREMENTS.—The evaluation conducted 
under paragraph (1) shall address the need for im-
proving the adequacy of the existing hierarchical 
condition categories and pharmacy risk adjustment 
methods for Medicare Advantage plans that exclu-
sively or disproportionately serve high-risk bene-
ficiaries as it relates to— 
(A) accurately predicting costs relative to 
Medicare fee-for-service for beneficiaries with— 
(i) sustained high-risk scores over 
multiple contract periods; 
(ii) sustained high costs over multiple 
contract periods; 
(iii) co-morbid chronic conditions; 
(iv) diagnoses not included in the risk- 
adjustment methodology, including demen-
tia and other cognitive impairments; 
(v) physical disabilities, developmental 
disabilities, or both; and 
(vi) frailty; 
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(B) accurately predicting costs relative to 
Medicare fee-for-service for beneficiaries near 
the end of life; 
(C) accurately predicting costs relative to 
Medicare fee-for-service for other conditions for 
which the current risk adjustment methodology 
underpays in relation to Medicare fee-for-serv-
ice, as determined by the Secretary; 
(D) further gradations of diseases and con-
ditions to better reflect stage of condition, con-
dition severity, and costs related to burden of 
illness; 
(E) accounting for costs of pre-existing 
conditions at the time of initial enrollment for 
new entrants into Medicare; and 
(F) enhancing coding persistency by calcu-
lating risk scores using data covering at least 2 
years. 
(b) USE OF THE RESULTS OF THE STUDY FOR RE-
FINEMENTS.— 
(1) REFINEMENTS.— 
(A) IN
GENERAL.—Beginning with plan 
year 2011, the Secretary, using the results of 
the evaluation conducted under subsection 
(a)(1), shall refine the risk adjustment payment 
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mechanisms referred to in subsection (a)(1) for 
beneficiaries identified under subsection (a)(2). 
The Secretary shall make additional refine-
ments, as appropriate, for subsequent plan 
years. 
(B) PROTECTION.—To the extent that the 
Secretary determines that the risk adjustment 
payment mechanisms referred to in subsection 
(a)(1) do not accurately pay for Medicare bene-
ficiaries identified under subsection (a)(2), the 
Secretary shall ensure that no Medicare Advan-
tage plan that exclusively or disproportionately 
serves high-risk beneficiaries is paid less, in the 
aggregate, than 100 percent of Medicare fee- 
for-service payment rates (as determined under 
section 1853(c)(1)(D)(i)). 
(C) 
RECALIBRATION.—Beginning 
with 
plan year 2011, the Secretary shall recalibrate 
the risk adjustment payment mechanisms re-
ferred to in subsection (a)(1) so that the overall 
predicted costs for all Medicare beneficiaries are 
identical to what they would have been in the 
absence of the new risk adjustment payment 
mechanism. 
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(2) BUDGET NEUTRAL ADJUSTMENTS.—If the 
Secretary determines that the application of para-
graph (1) results in expenditures under title XVIII 
of the Social Security Act that exceed the expendi-
tures under such title that would have been made 
without such application, the Secretary shall provide 
for an appropriate adjustment to payment rates 
under part C of such title for beneficiaries for whom 
the risk adjustment payment mechanism overpays in 
relation to Medicare fee-for-service in order to elimi-
nate such excess. 
SEC. 4. ADDITIONAL ENHANCEMENTS TO ENSURE PAY-
MENT EQUITY FOR SPECIALIZED MA PLANS. 
(a) 
ACCOUNTING
FOR
ADDED
REGULATORY 
COSTS.—For plan year 2011 and subsequent plan years, 
the Secretary shall provide bonus payments to account for 
added SNP costs associated with additional benefit, care 
management, reporting, and other requirements estab-
lished by Congress and the Secretary in excess of other 
Medicare Advantage plans. 
(b) ENSURING FAIR BIDDING PRACTICES.—For plan 
year 2011 and subsequent plan years, the Secretary shall 
take into account the following factors with respect to the 
bid structure for SNPs: 
(1) Dual eligibility. 
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(2) Geographic cost differences. 
(3) Population characteristics. 
(4) The differences in plan requirements, in-
cluding differences in additional benefits, care man-
agement, and reporting requirements. 
(5) The differences between community-based 
and regional or nationally based plans. 
(c) AUTHORITY TO APPLY PACE RULES.—For plan 
year 2011 and subsequent plan years, the Secretary may 
apply the payment rules under section 1894(d) of the So-
cial Security Act (42 U.S.C. 1395eee(d)) to Fully Inte-
grated Dual Eligible Special Needs Plans rather than the 
payment rules that would otherwise apply to such plans 
under part C. 
(d) BUDGET NEUTRAL ADJUSTMENTS.—If the Sec-
retary determines that the application of subsections (a), 
(b), and (c) result in expenditures under title XVIII of 
the Social Security Act that exceed the expenditures under 
such title that would have been made without such appli-
cation, the Secretary shall provide for an appropriate ad-
justment to payment rates under part C of such title for 
beneficiaries for whom the risk adjustment payment mech-
anism overpays in relation to Medicare fee-for-service in 
order to eliminate such excess. 
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SEC. 5. ADVANCE ALIGNMENT OF MEDICARE AND MED-
ICAID FOR DUAL ELIGIBLES. 
(a) MEDICARE AND MEDICAID INTEGRATION PRO-
GRAMS.— 
(1) DESIGNATION.— 
(A) IN
GENERAL.—For plan year 2011 
and subsequent plan years, the Secretary shall 
have in place a process under which the Sec-
retary designates dual eligible SNPs as Fully 
Integrated Dual Eligible Special Needs Plans 
for the purpose of advancing fully integrated 
Medicare and Medicaid benefits and services for 
dual beneficiaries, including State designated 
Dual subsets. 
(B) 
CRITERIA
FOR
DESIGNATION.—In 
order to be designated as a Fully Integrated 
Dual Eligible Special Needs Plan, the dual eli-
gible SNP shall meet the following require-
ments: 
(i) The dual eligible SNP provides 
dual eligibles with access to Medicare and 
Medicaid benefits specified by the State for 
Medicaid beneficiaries enrolled in inte-
grated programs under a single managed 
care organization (MCO). 
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(ii) The dual eligible SNP has a con-
tract in place with a State Medicaid agency 
that includes coverage of specified primary, 
acute, and long-term care benefits and 
services, consistent with State policy, 
under risk-based financing. 
(iii) The dual eligible SNP coordinates 
the delivery of covered Medicare and Med-
icaid health and long-term care services, 
consistent with State policy, using aligned 
care management and specialty care net-
work methods for high-risk beneficiaries. 
(iv) The dual eligible SNP employs 
policies and procedures approved by the 
Secretary and the State to coordinate or 
integrate enrollment, member materials, 
communications, grievance and appeals, 
and quality assurance. 
(v) The dual eligible SNP provides ad-
vanced person-centered, integrated care for 
the full array of primary, acute, and resi-
dential and home and community-based 
long-term care services, using a robust ad-
vanced medical home model that— 
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(I) empowers dual eligibles with 
serious chronic conditions and their 
family caregivers to optimize their 
health and well-being; 
(II) provides a comprehensive 
array of patient-centered benefits and 
services designed to meet the unique 
needs of dual eligibles; 
(III) helps dual eligibles and 
their family caregivers to access the 
right care, at the right time, in the 
right place, given the nature of their 
condition; 
(IV) aligns the incentives of re-
lated care providers to improve transi-
tions and care continuity; and 
(V) optimizes total quality and 
cost performance across time, place, 
and profession. 
(2) INTEGRATION AUTHORITY.—In order to in-
crease simplicity for dual eligibles in accessing and 
coordinating Medicare and Medicaid benefits, the 
Secretary, working in conjunction with States, on a 
State by State basis, consistent with existing statu-
tory authority, is encouraged to establish a single 
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administrative structure and process under titles 
XVIII and XIX for Fully Integrated Dual Eligible 
Special Needs Plans, under a three-way contract or 
Memorandum of Understanding, among CMS, the 
State, and related plans, for— 
(A) the enrollment of dual eligibles; 
(B) member materials and related commu-
nications; 
(C) care management and model of care 
requirements; 
(D) reporting, auditing, and performance 
evaluation; 
(E) grievance and appeals procedures; and 
(F) payment methods. 
(3) ALIGNMENT OF MEDICARE AND MEDICAID 
POLICIES
AND
PROCEDURES
FOR
SNPS
SERVING 
DUAL ELIGIBLES.—In order to increase simplicity 
for dual eligibles in accessing and coordinating 
Medicare and Medicaid benefits by enhancing coordi-
nation between CMS and State Medicaid agencies in 
the oversight of SNPs insofar as they serve dual eli-
gibles, the Secretary, working in collaboration with 
State Medicaid Agencies, may modify rules, policies, 
and procedures under titles XVIII and XIX of such 
Act in order to provide for the alignment of Medi-
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care and Medicaid requirements, including mar-
keting, enrollment, care coordination, auditing, re-
porting, quality assurance, and other relevant over-
sight functions. 
(4) REPORTS TO CONGRESS.— 
(A) INTERIM REPORT.—Not later than De-
cember 31, 2013, the Secretary shall submit to 
Congress an interim report on the impact of in-
tegrating Medicare and Medicaid benefits and 
services on total quality and cost performance 
in serving dual eligibles. 
(B) FINAL REPORT.—Not later than De-
cember 31, 2015, the Secretary shall submit to 
Congress a final report on the impact of inte-
grating Medicare and Medicaid benefits and 
services on total quality and cost performance 
in serving dual eligibles. 
(C) REQUIREMENT.—A report under sub-
paragraph (A) and (B) shall include rec-
ommendations for such legislative and adminis-
trative actions as the Secretary determines ap-
propriate to further advance Medicare and Med-
icaid integration, including options for inte-
grating Medicare and Medicaid funding, to fa-
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cilitate ongoing improvements in total quality 
and cost performance in care of dual eligibles. 
(D) QUALITY AND COST PERFORMANCE.— 
Not later than 6 months after the date of the 
enactment of this Act, the Secretary, working 
in consultation with consumers, plans, and 
States, shall identify the measures and bench-
marks to be used for evaluating cost and qual-
ity performance for purposes of subparagraph 
(C). 
(b) OFFICE
OF
MEDICARE/MEDICAID
INTEGRA-
TION.— 
(1) ESTABLISHMENT.—The Secretary shall es-
tablish or designate an Office on Medicare/Medicaid 
Integration (in this subsection referred to as the 
‘‘Office’’) for the purpose of aligning Medicare and 
Medicaid policies and procedures and developing 
tools to support State integration efforts in order 
to— 
(A) simplify dual eligible access to Medi-
care and Medicaid benefits and services; 
(B) improve care continuity and ensure 
safe and effective care transitions; 
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(C) eliminate cost shifting between Medi-
care and Medicaid and among related care pro-
viders; 
(D) eliminate regulatory conflicts between 
Medicare and Medicaid rules; and 
(E) improve total cost and quality per-
formance. 
(2) RESPONSIBILITIES.—The responsibilities of 
the Office are to develop policies and procedures 
to— 
(A) oversee the designation, implementa-
tion, and oversight of Fully Integrated Dual El-
igible Special Needs Plans under subsection 
(a)(1) in collaboration with the States, with au-
thority to effectively align Medicare and Med-
icaid policy for dual eligibles; 
(B) provide State Medicaid agencies with 
training, materials, technical assistance, and 
other resources in support of advancing Medi-
care and Medicaid integration in States where 
Fully Integrated Dual Eligible Special Needs 
Plans have been designated and other integra-
tion initiatives are being advanced to coordinate 
and align primary, acute, and long-term care 
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benefits for dual eligibles through a State plan 
option or other means; 
(C) identify incentives for States to ad-
vance the integration of Medicare and Medicaid 
to improve total cost and quality performance, 
including shared cost savings among consumers, 
plans, and Federal and State governments with 
respect to State initiatives for advancing Medi-
care and Medicaid integration; 
(D) support State efforts to coordinate and 
align acute and long-term care benefits for dual 
eligibles through a State plan option or other 
means; 
(E) provide support for coordination of 
State and Federal contracting and oversight for 
dual integration programs supportive of the 
goals described in paragraph (1); 
(F) align Federal rules for Medicaid man-
aged care and Medicare Advantage Plans to in-
clude methods for integrating marketing, enroll-
ment, grievances and appeals, auditing, report-
ing, quality assurance, and other relevant over-
sight functions; 
(G) serve as a liaison between CMS central 
and regional offices to ensure consistent appli-
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cation of CMS rules, policies, and auditing 
practices as such rules, policies, and auditing 
practices pertain to dual eligibles; 
(H) monitor total combined Medicare and 
Medicaid costs in serving dual eligibles and 
make recommendations for optimizing total 
quality and cost performance across both pro-
grams; and 
(I) work with the Congressional Budget 
Office and the Office of Management and 
Budget to establish a process for evaluating 
total Medicare and Medicaid spending for dual 
eligibles who are enrolled in Fully Integrated 
Dual Eligible Special Needs Plans such that the 
enrollment of such dual eligibles in such plans 
is treated as ‘‘budget neutral’’ if the combined 
Medicare and Medicaid costs under such plans 
do not exceed the combined costs of providing 
Medicare and Medicaid services on a fee-for- 
service basis for a comparable risk group. 
(3) FUNDING.—For each of fiscal years 2010 
through 2014, of the amount of the reductions in 
payments attributable to average per capita monthly 
savings described in paragraph (3)(C) or (4)(C) of 
section 1854(b) of the Social Security Act that are 
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not provided as a monthly rebate under paragraph 
(1)(C) of such section, $2,000,000 shall be available 
for purposes of funding the Office. 
SEC. 6. CONTINUOUS ELIGIBILITY FOR MEDICAID FOR CER-
TAIN INDIVIDUALS. 
(a) IN GENERAL.—Section 1902(e) of the Social Se-
curity Act (42 U.S.C. 1396a(e)) is amended by adding at 
the end the following: 
‘‘(14) The plan shall provide that an individual who 
has attained age 65 and has been determined for a period 
of 12 consecutive months to be a full-benefit dual eligible 
individual (as defined in section 1935(c)(6)) shall be pre-
sumed to remain eligible for benefits under the plan with-
out any need for further redetermination or recertifi-
cation.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) takes effect on January 1, 2010. 
SEC. 7. DEFINITIONS. 
In this Act: 
(1) CMS.—The term ‘‘CMS’’ means the Cen-
ters for Medicare & Medicaid Services. 
(2) DUAL ELIGIBLE.—The term ‘‘dual eligible’’ 
means an MA eligible individual (as defined in sec-
tion 1851(a)(3) of the Social Security Act, 42 
U.S.C. 13195w–21(a)(3)) who is also entitled to 
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medical assistance under a State plan under title 
XIX of the Social Security Act. 
(3) DUAL ELIGIBLE SNP.—The term ‘‘dual eli-
gible SNP’’ means a SNP described in section 
1859(b)(6)(A)(ii) of the Social Security Act. 
(4) MEDICAID.—The term ‘‘Medicaid’’ means 
the program under title XIX of the Social Security 
Act. 
(5) MEDICARE.—The term ‘‘Medicare’’ means 
the program under title XVIII of the Social Security 
Act. 
(6) MEDICARE
FEE-FOR-SERVICE.—The term 
‘‘Medicare fee-for-service’’ means the original Medi-
care fee-for-service program under parts A and B of 
title XVIII of the Social Security Act. 
(7) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(8) SNP.—The term ‘‘SNP’’ means a special-
ized MA plan for special needs individuals, as de-
fined in section 1859(b)(6)(A) of the Social Security 
Act (42 U.S.C. 1395w–28(b)(6)(A)). 
(9) STATE.—The term ‘‘State’’ has the mean-
ing given such term for purposes of title XIX of the 
Social Security Act. 
Æ 
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