I 
114TH CONGRESS 
2D SESSION 
H. R. 5542 
To amend titles XI and XIX of the Social Security Act to establish a 
comprehensive and nationwide system to evaluate the quality of care 
provided to beneficiaries of Medicaid and the Children’s Health Insurance 
Program and to provide incentives for voluntary quality improvement. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 21, 2016 
Ms. DEGETTE (for herself and Mr. KENNEDY) introduced the following bill; 
which was referred to the Committee on Energy and Commerce 
A BILL 
To amend titles XI and XIX of the Social Security Act 
to establish a comprehensive and nationwide system to 
evaluate the quality of care provided to beneficiaries of 
Medicaid and the Children’s Health Insurance Program 
and to provide incentives for voluntary quality improve-
ment. 
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 ‘‘Medicaid and CHIP 
Quality Improvement Act of 2016’’. 
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SEC. 2. FINDINGS. 
Congress finds the following: 
(1) Despite the fact that Federal and State 
governments spend hundreds of billions of dollars 
every year on care for Americans through the Med-
icaid and CHIP programs, there is no nationwide, 
systematic method of reporting, collecting, evalu-
ating, or improving the quality of care across all 
payment and delivery systems (fee-for-service, man-
aged care, primary care case management, or other 
mechanisms). 
(2) Although the quality of care delivered 
through Medicaid health plans is frequently meas-
ured, there is no method or mechanism to systemati-
cally improve the quality of care provided to all Med-
icaid and CHIP beneficiaries. 
(3) For the majority of Medicaid and CHIP en-
rollees who are served by primary care case manage-
ment or fee-for-service arrangements, there are no 
Federal requirements for comparable quality moni-
toring or improvement. Thus there currently is no 
ability to make fair assessments across all modes of 
care for Medicaid and CHIP enrollees. 
(4) State flexibility and the resulting opportuni-
ties for innovation are hallmarks of the partnership 
between Federal and State governments in the Med-
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icaid and CHIP programs. Without a way to system-
atically measure quality, however, policymakers can-
not know which innovations are the most effective. 
SEC. 3. MEASURING AND REPORTING ON COMPARABLE 
HEALTH CARE QUALITY MEASURES FOR ALL 
PERSONS ENROLLED IN MEDICAID. 
(a) QUALITY
ASSURANCE
STANDARDS.—Section 
1932(c)(1)(A) of the Social Security Act (42 U.S.C. 
1396u–2(c)(1)(A)) is amended by inserting ‘‘or com-
parable primary care case management services providers 
described in section 1905(t) as well as health care services 
furnished in fee-for-service settings or other delivery sys-
tems’’ after ‘‘1903(m)’’. 
(b) ADULT HEALTH QUALITY MEASURES.—Section 
1139B of the Social Security Act (42 U.S.C. 1320b–9b) 
is amended— 
(1) in subsection (b)— 
(A) by redesignating paragraphs (4) and 
(5) as paragraphs (5) and (6), respectively; and 
(B) by inserting after paragraph (3), the 
following: 
‘‘(4) QUALITY REPORTING FOR MEDICAID ELI-
GIBLE ADULTS.—Beginning not later than January 
1 of the calendar year that begins on or after the 
date that is 2 years after the date of enactment of 
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the Medicaid and CHIP Quality Improvement Act of 
2016, and annually thereafter, the Secretary shall 
require States to use the measures and approaches 
identified in paragraph (3) to report on the initial 
core set of quality measures for Medicaid eligible 
adults identified in paragraph (2), subject to revi-
sions made in accordance with paragraph (6)(B). 
Such reporting shall be stratified by delivery system, 
including managed care organizations under section 
1932, benchmark plans under section 1937, primary 
care case management services providers described 
in section 1905(t), health care services in fee-for- 
service settings, and other delivery systems, except 
that the Secretary may determine that reporting on 
certain measures should not be stratified by delivery 
system because such stratification would not be fea-
sible or the delivery systems are not comparable with 
respect to the application of such measures. In addi-
tion to the stratification required under the previous 
sentence, the Secretary shall have the discretion to 
further stratify reporting on certain measures based 
on factors such as eligibility category, income level, 
or other differentiating factors that could have an 
impact on the comparability of the measure.’’; and 
(2) in subsection (d)— 
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(A) in paragraph (1)(A), by striking 
‘‘under the such plan’’ and all that follows 
through ‘‘subsection (a)(5)’’ and inserting 
‘‘under such plan or waiver, including measures 
described in subsection (b)(2), subject to revi-
sions made in accordance with subsection 
(b)(6)(B)’’; 
(B) in paragraph (1)(B), by inserting ‘‘, or 
comparable primary care case management 
services providers described in section 1905(t), 
as well as health care services furnished in fee- 
for-service settings or other delivery systems’’ 
after ‘‘section 1937’’; and 
(C) in paragraph (2), by inserting before 
the period the following: ‘‘, including analysis of 
comparable quality measures for Medicaid eligi-
ble adults who receive their health services 
through managed care, primary care case man-
agement, and fee-for-service settings or other 
delivery systems’’. 
(c) PEDIATRIC HEALTH CARE MEASURES.— 
(1) IN GENERAL.—Section 1139A of the Social 
Security Act (42 U.S.C. 1320b–9a) is amended— 
(A) in subsection (a)— 
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(i) by redesignating paragraphs (5) 
through (8) as paragraphs (6) through (9), 
respectively; and 
(ii) by inserting after paragraph (4), 
the following: 
‘‘(5) REPORTING OF PEDIATRIC HEALTH CARE 
MEASURES.—Beginning not later than January 1 of 
the calendar year that begins on or after the date 
that is 2 years after the date of enactment of the 
Medicaid and CHIP Quality Improvement Act of 
2016, and annually thereafter, the Secretary shall 
require States to use the measures and approaches 
identified in paragraph (4) to report on the initial 
core child health care quality measures established 
under this subsection and as such measures subse-
quently are updated under subsection (b)(5). Such 
reporting shall be stratified by delivery system, in-
cluding managed care organizations under section 
1932, benchmark plans under sections 1937 and 
2103, primary care case management services pro-
viders described in section 1905(t), health care serv-
ices in fee-for-service settings, and other delivery 
systems, except that the Secretary may determine 
that reporting on certain measures should not be 
stratified by delivery system because such stratifica-
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tion would not be feasible or the delivery systems are 
not comparable with respect to the application of 
such measures. In addition to the stratification re-
quired under the previous sentence, the Secretary 
shall have the discretion to further stratify reporting 
on certain measures based on factors such as eligi-
bility category, income level, or other differentiating 
factors that could have an impact on the com-
parability of the measure.’’; and 
(B) in subsection (c)— 
(i) in paragraph (1)(A), by striking 
‘‘measures described in subparagraphs (A) 
and (B) of subsection (a)(6)’’ and inserting 
‘‘the core measures described in subsection 
(a), as revised in accordance with sub-
section (b)(5)’’; 
(ii) in paragraph (1)(B), by inserting 
before the period the following: ‘‘, or com-
parable primary care case management 
services providers described in section 
1905(t), as well as healthcare services fur-
nished in fee-for-service settings or other 
delivery systems’’; and 
(iii) in paragraph (2), by inserting be-
fore the period the following: ‘‘, including 
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analysis of comparable quality measures 
for children eligible for medical assistance 
under title XIX or child health assistance 
under title XXI who receive their health 
services through managed care, primary 
care case management, and fee-for-service 
settings or other delivery systems’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect as if included in 
the enactment of section 1139A of the Social Secu-
rity Act, as added by section 401(a) of the Chil-
dren’s Health Insurance Program Reauthorization 
Act of 2009 (Public Law 111–3). 
SEC. 
4. 
PERFORMANCE 
BONUSES 
FOR 
SIGNIFICANT 
ACHIEVEMENT IN MEDICAID AND CHIP QUAL-
ITY PERFORMANCE. 
Section 1903 of the Social Security Act (42 U.S.C. 
1396b) is amended by adding at the end the following new 
subsection: 
‘‘(aa) PERFORMANCE BONUS
FOR QUALITY PER-
FORMANCE ACHIEVEMENT.— 
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish a Medicaid Quality Performance Bonus fund for 
awarding performance bonuses to States for high at-
tainment and improvement on a core set of quality 
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measures related to the goals and purposes of the 
Medicaid program under this title. 
‘‘(2) QUALITY PERFORMANCE BONUS METHOD-
OLOGY.—Not later than 3 years after the date of en-
actment of the Medicaid and CHIP Quality Im-
provement Act of 2016, the Secretary shall establish 
a methodology for awarding Medicaid quality per-
formance bonuses to States not less than annually in 
accordance with paragraph (3) and subject to the 
availability of appropriations. Medicaid quality per-
formance bonuses shall be awarded on the basis of 
the annual State reports required under sections 
1139A and 1139B and in accordance with regula-
tions promulgated by the Secretary. 
‘‘(3) QUALITY
PERFORMANCE
MEASUREMENT 
BONUSES.—Medicaid quality performance bonuses 
shall be awarded to the following 10 States: 
‘‘(A) The top 5 States achieving the des-
ignation of superior quality performing State 
under criteria established by the Secretary. 
‘‘(B) The 5 States that— 
‘‘(i) are not among the States de-
scribed in subparagraph (A); and 
‘‘(ii) demonstrate the greatest relative 
level of annual improvement in quality per-
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formance under criteria established by the 
Secretary. 
‘‘(4) INITIAL APPROPRIATION.— 
‘‘(A) IN GENERAL.—The total amount of 
Medicaid quality performance bonuses made 
under this subsection for all fiscal years shall be 
equal to $500,000,000, to be available until ex-
pended. 
‘‘(B) BUDGET
AUTHORITY.—This para-
graph constitutes budget authority in advance 
of appropriations Acts and represents the obli-
gation of the Secretary to provide for the pay-
ment of amounts provided under this para-
graph. 
‘‘(5) USE OF QUALITY PERFORMANCE BONUS 
FUNDS.— 
‘‘(A) DESIGNATION
FOR
QUALITY
IM-
PROVEMENT ACTIVITIES.—As a condition of re-
ceiving a Medicaid quality performance bonus 
under this subsection, a State shall agree to 
designate at least 75 percent of the bonus funds 
paid to the State under this subsection for a 
fiscal year for the development and operation of 
quality-related initiatives that will directly ben-
efit providers or managed care entities partici-
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pating in the State plan under this title or 
under a waiver of such plan, including— 
‘‘(i) pay-for-performance programs; 
‘‘(ii) collaboration initiatives that have 
been demonstrated to improve performance 
on quality; 
‘‘(iii) quality improvement initiatives, 
including those aimed at improving care 
for special and hard-to-reach populations, 
and those directed to managed care enti-
ties; and 
‘‘(iv) such other Secretary-approved 
activities and initiatives that a State may 
pursue to encourage quality improvement 
and patient-focused high value care. 
‘‘(B) STATE OPTION TO ESTABLISH CRI-
TERIA.—A State may establish criteria for the 
State performance program carried out under 
subparagraph (A) that limits the award to a 
particular provider or entity type, that limits 
application to a specific geographic area, or 
that directs incentive programs for quality-re-
lated activities for specific populations, includ-
ing individuals eligible under this title and title 
XVIII and hard-to-reach populations. 
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‘‘(C) REMAINING BONUS FUNDS.—A State 
may designate up to 25 percent of the bonus 
funds paid to the State under this subsection 
for a fiscal year for activities related to the 
goals and purposes of the State program under 
this title.’’. 
Æ 
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