To amend title XIX of the Social Security Act to permit Medicaid beneficiaries the choice of self-directed personal assistance services through a cash and counseling program under the Medicaid Program.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicaid Cash and Counseling Program 
Act of 2005''.

SEC. 2. OPTIONAL CHOICE OF SELF-DIRECTED PERSONAL ASSISTANCE SERVICES 
              (CASH AND COUNSELING).

    (a) Exemption From Certain Requirements.--Section 1915 of the 
Social Security Act (42 U.S.C. 1396n) is amended by adding at the end 
the following new subsection:
    ``(i)(1) A State may provide, as `medical assistance', payment for 
part or all of the cost of self-directed personal assistance services 
(other than room and board) under the plan which are provided pursuant 
to a written plan of care to individuals with respect to whom there has 
been a determination that, but for the provision of such services, the 
individuals would require and receive personal care services under the 
plan, or home and community-based services provided pursuant to a 
waiver under sub-section (c). Self-directed personal assistance 
services may not be provided under this subsection to individuals who 
reside in a home or property that is owned, operated, or controlled by 
a provider of services, not related by blood or marriage.
    ``(2) The Secretary shall not grant approval for a State self-
directed personal assistance services program under this section unless 
the State provides assurances satisfactory to the Secretary of the 
following:
            ``(A) Necessary safeguards have been taken to protect the 
        health and welfare of individuals provided services under the 
        program, and to assure financial accountability for funds 
        expended with respect to such services.
            ``(B) The State will provide, with respect to individuals 
        who--
                    ``(i) are entitled to medical assistance for 
                personal care services under the plan, or receive home 
                and community-based services under a waiver granted 
                under subsection (c);
                    ``(ii) may require self-directed personal 
                assistance services; and
                    ``(iii) may be eligible for self-directed personal 
                assistance services,
        an evaluation of the need for personal care under the plan, or 
        personal services under a waiver granted under subsection (c).
            ``(C) Such individuals who are determined to be likely to 
        require personal care under the plan, or home and community-
        based services under a waiver granted under subsection (c) are 
        informed of the feasible alternatives, if available under the 
        State's self-directed personal assistance services program, at 
        the choice of such individuals, to the provision of personal 
        care services under the plan, or personal assistance services 
        under a waiver granted under subsection (c).
            ``(D) The State will provide for a support system that 
        ensures participants in the self-directed personal assistance 
        services program are appropriately assessed and counseled prior 
        to enrollment and are able to manage their budgets. Additional 
        counseling and management support may be provided at the 
        request of the participant.
            ``(E) The State will provide to the Secretary an annual 
        report on the number of individuals served and total 
        expenditures on their behalf in the aggregate. The State shall 
        also provide an evaluation of overall impact on the health and 
        welfare of participating individuals compared to non-
        participants every three years.
    ``(3) A State may provide self-directed personal assistance 
services under the State plan without regard to the requirements of 
section 1902(a)(1) and may limit the population eligible to receive 
these services and limit the number of persons served without regard to 
section 1902(a)(10)(B).
    ``(4)(A) For purposes of this subsection, the term `self-directed 
personal assistance services' means personal care and related services, 
or home and community-based services otherwise available under the plan 
under this title or subsection (c), that are provided to an eligible 
participant under a self-directed personal assistance services program 
under this section, under which individuals, within an approved self-
directed services plan and budget, purchase personal assistance and 
related services, and permits participants to hire, fire, supervise, 
and manage the individuals providing such services.
    ``(B) At the election of the State--
            ``(i) a participant may choose to use any individual 
        capable of providing the assigned tasks including legally 
        liable relatives as paid providers of the services; and
            ``(ii) the individual may use the individual's budget to 
        acquire items that increase independence or substitute (such as 
        a microwave oven or an accessibility ramp) for human 
        assistance, to the extent that expenditures would otherwise be 
        made for the human assistance.
    ``(5) For purpose of this section, the term `approved self-directed 
services plan and budget' means, with respect to a participant, the 
establishment of a plan and budget for the provision of self-directed 
personal assistance services, consistent with the following 
requirements:
            ``(A) Self-direction.--The participant (or in the case of a 
        participant who is a minor child, the participant's parent or 
        guardian, or in the case of an incapacitated adult, another 
        individual recognized by state law to act on behalf of the 
        participant) exercises choice and control over the budget, 
        planning, and purchase of self-directed personal assistance 
        services, including the amount, duration, scope, provider and 
        location of service provision.
            ``(B) Assessment of needs.--There is an assessment of the 
        needs, strengths, and preferences of the participants for such 
        services.
            ``(C) Service plan.--A plan for such services (and supports 
        for such services) for the participant has been developed and 
        approved by the State based on such assessment through a 
        person-centered process that--
                    ``(i) builds upon the participant's capacity to 
                engage in activities that promote community life and 
                that respects the participant's preferences, choices 
                and abilities; and
                    ``(ii) involves families, friends, and 
                professionals in the planning or delivery of services 
                or supports as desired or required by the participant.
            ``(D) Service budget.--A budget for such services and 
        supports for the participant has been developed and approved by 
        the State based on such assessment and plan and on a 
        methodology that uses valid, reliable cost data, is open to 
        public inspection, and includes a calculation of the expected 
        cost of such services if those services were not self-directed. 
        The budget may not restrict access to other medically necessary 
        care and services furnished under the plan and approved by the 
        state but not included in the budget.
            ``(E) Application of quality assurance and risk 
        management.--There are appropriate quality assurance and risk 
        management techniques used in establishing and implementing 
        such plan and budget that recognize the roles and 
        responsibilities in obtaining services in a self-directed 
        manner and assure the appropriateness of such plan and budget 
        based upon the participant's resources and capabilities.
    ``(6) A State may employ a financial management entity to make 
payments to providers, track costs, and make reports under the program. 
Payment for the activities of the financial management entity shall be 
at the administrative rate established in section 1903(a).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to services furnished on or after January 1, 2006.

Summary: Medicaid Cash and Counseling Program Act of 2005 - Amends title XIX (Medicaid) of the Social Security Act to allow a state to provide, as medical assistance, payment for the cost of self-directed personal assistance services (other than room and board) provided pursuant to a written plan of care to individuals who, but for such services, would require and receive personal care services under the plan, or home and community-based services provided pursuant to a waiver.

Prohibits the provision of self-directed personal assistamce services to individuals who reside in a home or property owned, operated, or controlled by a service provider not related by blood or marriage.