To amend title XIX of the Social Security Act to prohibit transfers or discharges of residents of nursing facilities as a result of a voluntary withdrawal from participation in the medicaid program.

SECTION 1. RESTRICTIONS ON TRANSFERS OR DISCHARGES OF NURSING FACILITY 
              RESIDENTS IN THE CASE OF VOLUNTARY WITHDRAWAL FROM 
              PARTICIPATION UNDER THE MEDICAID PROGRAM.

    (a) In General.--Section 1919(c)(2) of the Social Security Act (42 
U.S.C. 1396r(c)(2)) is amended by adding at the end the following new 
subparagraph:
                    ``(F) Continuing rights in case of voluntary 
                withdrawal from participation.--
                            ``(i) In general.--In the case of a nursing 
                        facility that voluntarily withdraws from 
                        participation in a State plan under this title 
                        but continues to provide services of the type 
                        provided by nursing facilities--
                                    ``(I) the facility's voluntary 
                                withdrawal from participation is not an 
                                acceptable basis for the transfer or 
                                discharge of residents of the facility 
                                who were residing in the facility on 
                                the day before the effective date of 
                                the withdrawal;
                                    ``(II) the provisions of this 
                                section continue to apply to such 
                                residents until the date of their 
                                discharge from the facility; and
                                    ``(III) in the case of each 
                                individual who begins residence in the 
                                facility after the effective date of 
                                such withdrawal, the facility shall 
                                provide notice orally and in a 
                                prominent manner in writing on a 
                                separate page at the time the 
                                individual begins residence of the 
                                information described in clause (ii) 
                                and shall obtain from each such 
                                individual at such time an 
                                acknowledgment of receipt of such 
                                information that is in writing, signed 
                                by the individual, and separate from 
                                other documents signed by such 
                                individual.
                        Nothing in this subparagraph shall be construed 
                        as affecting any requirement of a participation 
                        agreement that a nursing facility provide 
                        advance notice to the State or the Secretary, 
                        or both, of its intention to terminate the 
                        agreement.
                            ``(ii) Information for new residents.--The 
                        information described in this clause for a 
                        resident is the following:
                                    ``(I) The facility is not 
                                participating in the program under this 
                                title with respect to that resident.
                                    ``(II) The facility may transfer or 
                                discharge the resident from the 
                                facility at such time as the resident 
                                is unable to pay the charges of the 
                                facility, even though the resident may 
                                have become eligible for medical 
                                assistance for nursing facility 
                                services under this title.
                            ``(iii) Continuation of payments and 
                        oversight authority.--Notwithstanding any other 
                        provision of this title, with respect to the 
                        residents described in clause (i)(I), a 
                        participation agreement of a facility described 
                        in clause (i) is deemed to continue in effect 
                        under such plan after the effective date of the 
                        facility's voluntary withdrawal from 
                        participation under the State plan for purposes 
                        of--
                                    ``(I) receiving payments under the 
                                State plan for nursing facility 
                                services provided to such residents;
                                    ``(II) maintaining compliance with 
                                all applicable requirements of this 
                                title; and
                                    ``(III) continuing to apply the 
                                survey, certification, and enforcement 
                                authority provided under subsections 
                                (g) and (h) (including involuntary 
                                termination of a participation 
                                agreement deemed continued under this 
                                clause).
                            ``(iv) Application to significant 
                        reductions of extent of participation.--The 
                        provisions of this subparagraph shall apply to 
                        a significant voluntary reduction in the extent 
                        of participation under a State plan in the case 
                        of a resident who, on (or within 90 days after) 
                        the effective date of the reduction, is 
                        entitled to medical assistance under this title 
                        with respect to nursing facility services in a 
                        manner similar to the manner in which this 
                        subparagraph applies to a voluntary withdrawal 
                        of participation.
                            ``(v) No application to new residents.--
                        This paragraph (other than subclause (III) of 
                        clause (i) and so much of clause (iv) as the 
                        Secretary determines relates to such subclause) 
                        shall not apply to an individual who begins 
                        residence in a facility on or after the 
                        effective date of the withdrawal from 
                        participation under this subparagraph.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to voluntary withdrawals from participation (and significant 
reductions of extent of participation) occurring on or after the date 
of the enactment of this Act.
    (c) Report on Implementation.--Not later than 5 years after the 
date of the enactment of this Act, the Secretary of Health and Human 
Services shall submit to Congress a report on the impact of the 
implementation of the amendment made by subsection (a) on nursing 
facilities, their residents, and medicaid beneficiaries. The report 
shall include--
            (1) an analysis of the impact of changes in medicaid 
        reimbursement rates for nursing facility services on the extent 
        to which nursing facilities voluntarily withdraw from (or 
        significantly reduce the extent of participation in) the 
        medicaid program and on access to and quality of such services; 
        and
            (2) recommendations for such legislative changes as the 
        Secretary deems appropriate.

Summary: Amends title XIX (Medicaid) of the Social Security Act to prohibit transfers or discharges of residents of nursing facilities as a result of a facility's voluntary withdrawal from participation in the Medicaid program as long as such residents resided in the facility before the withdrawal.  Requires a withdrawn facility to provide appropriate notice to new residents who begin residence after the withdrawal that the facility:  (1) is not participating in the Medicaid program with respect to that resident; and (2) may transfer or discharge the resident from the facility at such time as the resident is unable to pay the charges of the facility, even though the resident may have become eligible for Medicaid's nursing facility services.