A bill to establish a demonstration project under the medicaid program to encourage the provision of community-based services to individuals with disabilities.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Money Follows the Person Act of 
2003''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) In his budget for fiscal year 2004, President George W. 
        Bush proposes a ``Money Follows the Person'' rebalancing 
        initiative under the medicaid program to help States rebalance 
        their long-term services support systems more evenly between 
        institutional and community-based services.
            (2) The President, by proposing this initiative, and 
        Congress, recognize that States have not fully developed the 
        systems needed to create a more equitable balance between 
        institutional and community-based services spending under the 
        medicaid program.
            (3) While a few States have been successful at achieving 
        this balance, nationally, approximately 70 percent of the 
        medicaid funding spent for long-term services is devoted to 
        nursing facilities and intermediate care facilities for the 
        mentally retarded. Only 30 percent of such funding is spent for 
        community-based services.
            (4) As a result, there are often long waiting lists for 
        community-based services and supports.
            (5) In the Americans with Disabilities Act of 1990, 
        Congress found that individuals with disabilities continue to 
        encounter various forms of discrimination, including 
        segregation, and that discrimination persists in such critical 
        areas as institutionalization.
            (6) In 1999, the Supreme Court held in Olmstead v. LC (527 
        U.S. 581 (1999)) that needless institutionalization is 
        discrimination under the Americans with Disabilities Act of 
        1990, noting that institutional placement of people who can be 
        served in the community ``perpetuates unwarranted assumptions 
        that persons so isolated are unworthy of participating in 
        community life.'' (Id. at 600). The Court further found that 
        ``confinement in an institution severely diminishes the 
        everyday life activities of individuals, including family 
        relations, social contacts, work options, economic 
        independence, educational advancement, and cultural 
        enrichment.'' (Id. at 601).
            (7) Additional resources would be helpful for assisting 
        States in rebalancing their long-term services support system 
        and complying with the Olmstead decision.

SEC. 3. AUTHORITY TO CONDUCT MEDICAID DEMONSTRATION PROJECTS.

    (a) Definitions.--In this section:
            (1) Community-based services and supports.--The term 
        ``community-based services and supports'' means, with respect 
        to a State, any items or services that are an allowable 
        expenditure for medical assistance under the State medicaid 
        program, or under a waiver of such program and that the State 
        determines would allow an individual to live in the community.
            (2) Individual's representative; representative.--The terms 
        ``individual's representative'' and ``representative'' mean a 
        parent, family member, guardian, advocate, or authorized 
        representative of an individual.
            (3) Medicaid long-term care facility.--The term ``medicaid 
        long-term care facility'' means a hospital, nursing facility, 
        or intermediate care facility for the mentally retarded, as 
        such terms are defined for purposes of the medicaid program.
            (4) Medicaid program.--The term ``medicaid program'' means 
        the State medical assistance program established under title 
        XIX of the Social Security Act (42 U.S.C. 1396 et seq.).
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (6) State.--The term ``State'' has the meaning given such 
        term for purposes of the medicaid program.
    (b) State Application.--A State may apply to the Secretary for 
approval to conduct a demonstration project under which the State shall 
provide community-based services and supports to individuals--
            (1) who are eligible for medical assistance under the 
        medicaid program;
            (2) who are residing in a medicaid long-term care facility 
        and who have resided in such facility for at least 90 days; and
            (3) with respect to whom there has been a determination 
        that but for the provision of community-based services and 
        supports, the individuals would continue to require the level 
        of care provided in a medicaid long-term care facility.
    (c) Requirements.--A State is not eligible to conduct a 
demonstration project under this section unless the State certifies the 
following:
            (1) With respect to any individual provided community-based 
        services and supports under the demonstration project, the 
        State shall continue to provide community-based services and 
        supports to the individual under the medicaid program (and at 
        the State's Federal medical assistance percentage (as defined 
        in section 1905(b) of the Social Security Act) reimbursement 
        rate), for as long as the individual remains eligible for 
        medical assistance under the State medicaid program and 
        continues to require such services and supports, beginning with 
        the month that begins after the 12-month period in which the 
        individual is provided such services and supports under the 
        demonstration project.
            (2) The State shall allow an individual participating in 
        the demonstration project (or, as appropriate, the individual's 
        representative) to choose the setting in which the individual 
        desires to receives the community-based services and supports 
        provided under the project.
            (3) The State shall identify and educate individuals 
        residing in a medicaid long-term care facility who are eligible 
        to participate in the demonstration project (and, as 
        appropriate the individual's representative) about the 
        opportunity for the individual to receive community-based 
        services and supports under the demonstration project.
            (4) The State shall ensure that each individual identified 
        in accordance with paragraph (3) (and, as appropriate, the 
        individual's representative), has the opportunity, information, 
        and tools to make an informed choice regarding whether to 
        transition to the community through participation in the 
        demonstration project or to remain in the medicaid long-term 
        care facility.
            (5) The State shall maintain an adequate quality 
        improvement system so that individuals participating in the 
        demonstration project receive adequate services and supports.
            (6) The State shall conduct a process for public 
        participation in the design and development of the 
        demonstration project and such process shall include the 
        participation of individuals with disabilities, elderly 
        individuals, or individuals with chronic conditions who are 
        part of the target populations to be served by the 
        demonstration project, and the representatives of such 
        individuals.
            (7) The Federal funds paid to a State pursuant to this 
        section shall only supplement, and shall not supplant, the 
        level of State funds expended for providing community-based 
        services and supports for individuals under the State medicaid 
        program as of the date the State application to conduct a 
        demonstration project under this section is approved.
    (d) Approval of Demonstration Projects.--
            (1) In general.--Subject to paragraph (2), the Secretary 
        shall conduct a competitive application process with respect to 
        applications submitted under subsection (b) (taking into 
        consideration the preferences provided under paragraph (2)) 
        that meet the requirements of subsection (c). In determining 
        whether to approve such an application, the Secretary may waive 
        the requirement of--
                    (A) section 1902(a)(1) of the Social Security Act 
                (42 U.S.C. 1396a(a)(1)) to allow for sub-State 
                demonstrations;
                    (B) section 1902(a)(10)(B) of such Act (42 U.S.C. 
                1396a(a)(10)(B)) with respect to comparability; and
                    (C) section 1902(a)(10)(C)(i)(III) of such Act (42 
                U.S.C. 1396a(a)(10)(C)(i)(III)) with respect to income 
                and resource limitations.
            (2) Preference for certain applications.--In approving 
        applications to conduct demonstration projects under this 
        section, the Secretary shall give preference to approving 
        applications that indicate that the State shall do the 
        following:
                    (A) Design and implement enduring improvements in 
                community-based long-term services support systems 
                within the State to enable individuals with 
                disabilities to live and participate in community life, 
                particularly with respect to those practices that will 
                ensure the successful transition of such individuals 
                from medicaid long-term care facilities into the 
                community.
                    (B) Design and implement a long-term services 
                support system in the State that prevents individuals 
                from entering medicaid long-term care facilities in 
                order to gain access to community-based services and 
                supports.
                    (C) Engage in systemic reform activities within the 
                State to rebalance expenditures for long-term services 
                under the State medicaid program through administrative 
                actions that reduce reliance on institutional forms of 
                service and build up more community capacity.
                    (D) Address the needs of populations that have been 
                underserved with respect to the availability of 
                community services or involve individuals or entities 
                that have not previously participated in the efforts of 
                the State to increase access to community-based 
                services.
                    (E) Actively engage in collaboration between public 
                housing agencies, the State medicaid agency, 
                independent living centers, and other agencies and 
                entities in order to coordinate strategies for 
                obtaining community integrated housing and supportive 
                services for an individual who participates in the 
                demonstration project, both with respect to the period 
                during which such individual participates in the 
                project and after the individual's participation in the 
                project concludes, in order to enable the individual to 
                continue to reside in the community.
                    (F) Develop and implement policies and procedures 
                that allow the State medicaid agency to 
                administratively transfer or integrate funds from the 
                State budget accounts that are obligated for 
                expenditures for medicaid long-term care facilities to 
                other accounts for obligation for the provision of 
                community-based services and supports (including 
                accounts related to the provision of such services 
                under a waiver approved under section 1915 of the 
                Social Security Act (42 U.S.C. 1396n)) when an 
                individual transitions from residing in such a facility 
                to residing in the community.
    (e) Payments to States.--
            (1) In general.--The Secretary shall pay to each State with 
        a demonstration project approved under this section an amount 
        for each quarter occurring during the period described in 
        paragraph (2) equal to 100 percent of the State's expenditures 
        in the quarter for providing community-based services and 
        supports to individuals participating in the demonstration 
        project.
            (2) Period described.--The period described in this 
        paragraph is the 12-month period that begins on the date on 
        which an individual first receives community-based services and 
        supports under the demonstration project in a setting that is 
        not a medicaid long-term care facility and is selected by the 
        individual.
    (f) Reports.--
            (1) In general.--Each State conducting a demonstration 
        project under this section shall submit a report to the 
        Secretary that, in addition to such other requirements as the 
        Secretary may require, includes information regarding--
                    (A) the types of community-based services and 
                supports provided under the demonstration project;
                    (B) the number of individuals served under the 
                project;
                    (C) the expenditures for, and savings resulting 
                from, conducting the project; and
                    (D) to the extent applicable, the changes in 
                State's long-term services system developed in 
                accordance with the provisions of subsection (d)(2).
            (2) Uniform data format.--In requiring information under 
        this subsection, the Secretary shall develop a uniform data 
        format to be used by States in the collection and submission of 
        data in the State report required under paragraph (1).
    (g) Evaluations.--The Secretary shall use an amount, not to exceed 
one-half of 1 percent of the amount appropriated under subsection (h) 
for each fiscal year, to provide, directly or through contract--
            (1) for the evaluation of the demonstration projects 
        conducted under this section;
            (2) technical assistance to States concerning the 
        development or implementation of such projects; and
            (3) for the collection of the data described in subsection 
        (f)(1).
    (h) Funding.--
            (1) In general.--There is appropriated to carry out this 
        section $350,000,000 for each of fiscal years 2004 through 
        2008.
            (2) Availability.--Funds appropriated under paragraph (1) 
        for a fiscal year shall remain available until expended, but 
        not later than September 30, 2008.

Summary: Money Follows the Person Act of 2003 - Authorizes a State to apply to the Secretary of Health and Human Services for approval to conduct a demonstration project under which the State shall provide community-based services and supports to Medicaid-eligible individuals residing in a Medicaid long-term care facility for at least 90 days with respect to whom it is determined that, but for community-based services and supports, the individual would continue to require the level of care provided in a Medicaid long-term care facility.