I 114th CONGRESS 2d Session H. R. 5903 IN THE HOUSE OF REPRESENTATIVES July 14, 2016 Mr. Van Hollen (for himself, Mrs. McMorris Rodgers , Mr. Foster , Mr. Crenshaw , Mr. Langevin , Mr. Sessions , and Mr. Beyer ) introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To establish the Transition to Independence demonstration program.

1. Short title This Act may be cited as the Transition to Independence Act of 2016 . 2. Transition to Independence Demonstration Program (a) Establishment The Secretary shall establish a demonstration program under which a State that is a Medicaid Buy-In State and meets certain criteria may receive bonus payments for meeting specific measurable benchmarks in expanding individual integrated employment and reducing subminimum wage work, congregate setting work, or facility-based day habilitation placements for working-age individuals with a disability receiving Medicaid-funded home or community-based services and for taking other actions conducive to expanding employment opportunities for individuals with disabilities within the State. (b) Requirements for the Transition to Independence demonstration program (1) Minimum standards The Secretary shall establish minimum standards for Medicaid Buy-In States participating in the demonstration program to comply with in establishing eligibility requirements for individual participants, benefits, and administrative requirements for the Transition to Independence Medicaid Buy-In Option offered under the demonstration program. (2) Preference given to certain States for demonstration participation The Secretary shall give preference in selecting States to participate in the demonstration program to States that have Medicaid Buy-In programs that— (A) establish an assets or resources test for participation by an individual in the Medicaid Buy-In Option that is not less than $20,000; (B) establish an income requirement for participation by an individual in the Medicaid Buy-In Option that is at least up to 400 percent of the poverty line; (C) offer home and community-based services, including employment-based services and supports, in the Medicaid Buy In Option; and (D) establish such other requirements for an individual's participation in the Medicaid Buy-In Option as the Secretary shall specify. (3) Work incentives coordinator The minimum standards shall require a Medicaid Buy-In State participating in the demonstration program to provide work incentives coordinators who have been trained as work incentive specialists under a community-based work incentives planning and assistance program established under section 1149 of the Social Security Act ( 42 U.S.C. 1320b–20 ) to assist the individuals who elect to participate in the Medicaid Buy-In Option in order to ensure the individuals are provided with appropriate items and services. (c) Application and selection requirements (1) In general Not later than June 30, 2017, the Secretary shall solicit applications from Medicaid Buy-In States and select 15 Medicaid Buy-In States to participate in the demonstration program. (2) Application requirements An application to participate in the demonstration program shall include the following: (A) Data and information regarding the numbers of working-age individuals with disabilities who are receiving Medicaid-funded home or community-based services in the Medicaid Buy-In State who are in individual integrated employment, subminimum wage work, congregate setting work, or facility-based day habilitation or day treatment, respectively. (B) Data and information verifying that the Medicaid Buy-In State is prepared to meet the minimum standards established by the Secretary for the Medicaid Buy-In Option. (C) A plan for promoting the Medicaid Buy-In Option to potentially eligible individuals that includes— (i) clear and easy-to-understand, multi-media information on how to enroll in the Medicaid Buy-In Option on the Web sites for the Medicaid Buy-In State's Medicaid and Disability Determination Services Agencies; and (ii) a no-wrong door policy under which individuals who apply for a determination of eligibility for the Medicaid Buy-In Option are also determined if they are eligible for an applicable State health subsidy program in accordance with section 1413 of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18083 ) (including the State Medicaid program under another eligibility pathway), informed of the results of such determinations and, depending on their eligibility, provided with the option to voluntarily elect to participate in the Medicaid Buy-In Option or an applicable State health subsidy program. (D) (i) An assurance that the State will establish and build capacity for an eligibility process to make eligibility determinations for the Medicaid Buy-In program. Such process shall provide for a determination of eligibility not later than 90 days after the date that an application to participate in the program is filed, including for individuals who are not receiving disability insurance benefits under title II of the Social Security Act ( 42 U.S.C. 401 et seq. ) or supplemental security income benefits under title XVI of such Act ( 42 U.S.C. 1381 et seq. ). (ii) A description of the eligibility criteria the State will use, the process it will use to determine eligibility, for individuals who do not qualify for such title II or SSI benefits and the staff who will be responsible for making those determinations. This eligibility process shall not use the disability determination process used by the Social Security Administration for such title II and SSI benefits. (E) Verification that the Medicaid Buy-In State shall establish a Stakeholder Advisory Committee that meets the requirements of paragraph (3) and shall consult with and consider recommendations of the Committee while conducting the demonstration program. (F) A description of the person-centered planning process that the State intends to use for participants in the demonstration program. (G) Such other information as the Secretary may require relating to the demonstration program. (3) Stakeholder Advisory Committee requirements (A) Membership In establishing the Stakeholder Advisory Committee required for the demonstration program, the Medicaid Buy-In State shall ensure that— (i) at least 50 percent of the members of the Stakeholder Advisory Committee are individuals with disabilities; and (ii) at least 1 member of the Committee is a provider of services to individuals with disabilities. (B) Duties The Stakeholder Advisory Committee shall— (i) analyze outcomes data and other information related to the conduct of the demonstration program; and (ii) regularly submit recommendations, including for specific actions by the Medicaid Buy-In State participating in the demonstration program, that the Committee determines appropriate with respect to the conduct of the demonstration program by the State. (d) Requirement for selecting States In selecting Medicaid Buy-In States to participate in the demonstration program, the Secretary shall ensure that the Medicaid Buy-In States selected include Medicaid Buy-In States with low, medium, and high numbers of working-age individuals with disabilities who are receiving Medicaid-funded home or community-based services and are in individual integrated employment, subminimum wage work, congregate setting work, or facility-based day habilitation or day treatment, respectively. (e) Length of demonstration program The demonstration program shall be conducted for a period of 5 fiscal years, beginning with fiscal year 2018. (f) Performance bonus payments (1) In general For each fiscal year in which the demonstration program is conducted, a Medicaid Buy-In State participating in the demonstration program during that fiscal year may qualify for a performance bonus payment. (2) State-specified criteria and performance plans In order to participate in the demonstration program, a Medicaid Buy-In State shall submit criteria and a plan for achieving each of the mandatory benchmarks described in paragraph (3) and a selection of the additional benchmarks described in paragraph (4) as determined by the Secretary. The Secretary shall establish a methodology for assessing State performance with respect to the State-specified criteria for the mandatory and additional benchmarks. (3) Mandatory benchmarks The mandatory benchmarks described in this paragraph are the following: (A) Reduced participation in segregated programs and increased participation in individual integrated employment (i) Reduced population census of segregated programs (I) In general Achieving a reduction in the population in the State of working-age individuals with disabilities who are receiving Medicaid-funded home or community-based services or who are receiving services through an Intermediate Care Facility for Persons with Developmental Disabilities (ICF–DD), a nursing facility, an institution for individuals with mental illness, or other congregate facilities and are in subminimum wage work, congregate setting work, or facility-based day habilitation or day treatment. (II) Minimum percent reductions; bonus based on achievement of differing tiers In order to receive a bonus payment for a fiscal year under this clause, a Medicaid Buy-In State shall achieve a reduction of the population described in subclause (I) of at least 10 percent below the State's most recent prior fiscal year's census of the eligible population in subminimum wage work, congregate setting work, or facility based day habilitation or day treatment. Subject to paragraph (5)(B), the Secretary shall award an increased bonus payment for a fiscal year to a Medicaid Buy-In State that achieves a percentage reduction of 20, 30, 40 or more with respect to the prior fiscal year's census of such population. (III) Requirements for meeting benchmark A working-age individual with a disability shall be deemed as counting towards a percentage reduction for purposes of this clause if the individual is— (aa) employed in a competitive, integrated employment setting for at least 10 hours a week on average over a 120-day period during the year involved; (bb) receiving integrated day services that reach the level of care required in the individual’s person-centered plan; or (cc) a combination of items (aa) and (bb), enabling the individual to achieve, if desired, a comparable level of benefit as before the change in placement. The State must report aggregate data to the Secretary on the outcome of all individuals transitioning out of congregate settings being counted towards fulfillment of this benchmark. (ii) Increased population census of individual integrated employment (I) In general Achieving an increase in the population in the State of working-age individuals with disabilities who are receiving Medicaid-funded home or community-based services and are in individual integrated employment. (II) Minimum percent increases; bonus based on achievement of certain tiers In order to receive a bonus payment for a fiscal year under this clause, a Medicaid Buy-In State shall achieve an increase in the population described in subclause (I) of at least 10 percent above the State's most recent prior fiscal year's census of the eligible population in individual integrated employment. Subject to paragraph (5)(B), the Secretary shall award an increased bonus payment for a fiscal year to a Medicaid Buy-In State that achieves a percentage increase of 20, 30, 40 or more with respect to the prior fiscal year's census of such population. (III) Requirements for meeting benchmark A working-age individual with a disability shall be deemed as counting towards a percentage increase for purposes of this clause if the individual is employed in an integrated individual employment setting for at least 10 hours a week on average over a 120-day period during the fiscal year involved. (B) Meeting the Medicaid buy-in standards Meeting the minimum standards established by the Secretary for the Medicaid Buy-In Option. (4) Additional benchmarks The additional benchmarks described in this paragraph are the following: (A) Elimination of new placement approvals Eliminating new approvals for placement in the State of working-age individuals with disabilities who are receiving Medicaid-funded home or community-based services in subminimum wage work, congregate setting work, or facility-based day habilitation or day treatment, in accordance with criteria established by the Secretary. (B) Demonstration of inter-agency collaboration Demonstrating inter-agency collaboration between the State agencies responsible for administering Medicaid, vocational rehabilitation, and education (and, if the State is participating the Promoting Readiness of Minors in Supplemental Security Income initiative (PROMISE), including coordination with that initiative), in determining payer of last resort rules and rules for providing individuals with a seamless transition of services provided under such agencies, in accordance with criteria established by the Secretary. (C) Termination of vocational rehabilitation funding Ending the use of vocational rehabilitation funding for subminimum wage work, congregate setting work, or facility-based day habilitation or day treatment, in accordance with criteria established by the Secretary. (D) Workforce development Demonstrating in accordance with criteria established by the Secretary satisfaction of at least two of the following strategies to promote workforce development: (i) Increasing Medicaid payments for supported employment providers for individuals with disabilities by an amount necessary to ensure an adequately supported employment network, as determined by the Secretary. (ii) Adopting employment strategies that result in working-age individuals with disabilities who are receiving Medicaid-funded home or community-based services being recruited, hired, and retained as full-time employees of State government or by contractors of State government. (iii) Developing a State equivalent of section 503 of the Rehabilitation Act of 1973 ( 29 U.S.C. 793 ) to recruit, hire, promote, and retain working-age individuals with disabilities who are receiving Medicaid-funded home or community-based services with a utilization goal of at least 7 percent of the State government workforce. (iv) Developing a special hiring authority mechanism akin to the Schedule A appointing authority under section 213.3102(u) of title 5 of the Code of Federal Regulations (commonly referred to as the Schedule A Hiring Authority ) to assist in easing the hiring of working-age individuals with disabilities who are receiving Medicaid-funded home or community-based services within the State government with an accompanying plan submitted to the Secretary outlining targeted implementation goals for the amount of individuals with disabilities within State government. (v) Increasing the hiring of working-age individuals with disabilities who are receiving Medicaid-funded home or community-based services in employment for which the individual is compensated at or above the minimum wage, through collaboration with the State vocational rehabilitation and workforce development programs and Federal contractors. (vi) Providing State tax credits to employers for hiring new workers who are working-age individuals with disabilities who are receiving Medicaid-funded home or community-based services. (5) Payment to states (A) In general Subject to the succeeding provisions of this paragraph, the Secretary shall make a performance bonus payment to each Medicaid Buy-In State participating in the demonstration program that qualifies for such a payment with respect to a fiscal year as a single payment not later than the last day of the first calendar quarter of the fiscal year following the fiscal year to which the performance bonus payments applies. Payments to States made under this paragraph shall be considered to have been made under, and are subject to the requirements of, section 1903 of the Social Security Act ( 42 U.S.C. 1396b ). (B) Determination of payment The performance bonus payment for a Medicaid Buy-In State shall consist of the additional amount that the State would have been paid for providing medical assistance to individuals enrolled in the State’s Medicaid Buy-In Option during the preceding fiscal year if the regular FMAP applicable to such assistance were increased (subject to subparagraph (C)) as follows: (i) Two percentage points for achieving the minimum 10 percent reduction in the mandatory benchmark described in paragraph (3)(A) during the preceding fiscal year (or 2.4 percentage points for achieving a reduction of at least 20 percent (but not more than 30 percent), 2.6 percentage points for achieving a reduction of at least 30 percent (but not more than 40 percent), and 2.8 percentage points for achieving a reduction of at least 40 percent). (ii) Two percentage points for achieving the minimum 10 percent increase in the mandatory benchmark described in paragraph (3)(B) during the preceding fiscal year (or 2.4 percentage points for achieving an increase of at least 20 percent (but not more than 30 percent), 2.6 percentage points for achieving an increase of at least 30 percent (but not more than 40 percent), and 2.8 percentage points for achieving an increase of at least 40 percent). (iii) One-half percentage points for each additional benchmark described in paragraph (4) that the State achieves during the preceding fiscal year. (C) Limitations In no case may— (i) the increase in the regular FMAP resulting from the application of subparagraph (B) for any Medicaid Buy-In State exceed 100 percent of the costs for providing medical assistance to individuals enrolled in the Medicaid Buy-In Option with respect to each fiscal year of the 5-fiscal-year period in which the demonstration project is conducted; or (ii) payments be made to a Medicaid Buy-In State under this paragraph after December 31, 2021. (D) Use of payments A Medicaid Buy-In State receiving a performance bonus payment under this paragraph shall use the payment only to expand individual integrated employment and community integration for working-age individuals with disabilities who are receiving Medicaid-funded home or community-based services. (g) Reports; recommendations (1) Annual State reports (A) In general Each Medicaid Buy-In State participating in the demonstration program annually shall submit a detailed report to the Secretary regarding the State's conduct of the demonstration program. (B) Information to be included Such annual reports shall include, in addition to data and information regarding State performance with respect the mandatory and additional benchmarks described in paragraphs (3) and (4) of subsection (f) and such other information as the Secretary may require, data and information regarding the extent to which, since the start of the demonstration program— (i) the State has reduced the State population of individuals with disabilities who have attained age 18 but have not attained age 31, are receiving Medicaid-funded home or community-based services or services through an Intermediate Care Facility for Persons with Developmental Disabilities (ICF–DD), a nursing facility, an institution for individuals with mental illness, or other congregate facilities, and were in subminimum wage work, congregate setting work, or facility-based day habilitation or day treatment; and (ii) the State has increased the State population of individuals with disabilities who have attained age 18 but have not attained age 31, are receiving Medicaid-funded home or community-based services, and are engaged in individual integrated employment. (C) Additional information on tran­si­tion­ing individuals to integrated employment Each such annual report shall include information regarding— (i) the State's efforts to transition individuals with disabilities who are participating in the demonstration program to individual integrated employment during the preceding fiscal year; (ii) the full spectrum of employment outcomes for such individuals; (iii) best practices for successfully achieving such transitions; and (iv) lessons learned. (D) Promoting public participation To promote transparency with respect to such annual reports, each Medicaid Buy-In State shall— (i) provide, before submission of each such report— (I) for posting of a draft of the report for review by the public on a publicly accessible Web site of the State; (II) for providing a period of not less than 30 days for the receipt of public comments on the draft report; and (III) for at least two public hearings regarding the draft report; and (ii) include in the report so submitted a response to public comments received during such period (along with a description of whether changes have been made in the report in response to such comments). With respect to each such State report submitted, the Secretary, at the Federal level, shall provide for another 30-day public comment period to receive comments on such report. (E) Posting of reports on publicly accessible Web site The Secretary shall post each of the annual reports submitted under this paragraph, with a summary of the comments received under subparagraph (D), on a publicly accessible Web site. (2) Reports and recommendations to Congress (A) In general Not later than January 1, 2018, and January 1 of each of the 6 years thereafter, the Secretary shall submit to Congress a report on the demonstration program. Each such report shall include data and information regarding State performance with respect to each of the mandatory and additional benchmarks described in paragraphs (3) and (4) of subsection (f) and other data and information reported by States under paragraph (1) and an assessment of the extent to which the demonstration program is successful in tran­si­tion­ing working-age individuals with disabilities to independent living and work in their communities. (B) Recommendations Not later than December 31, 2019, the Secretary shall submit to Congress recommendations regarding whether the demonstration program should be continued, expanded, modified, or terminated. (3) Research and evaluation (A) In general The Secretary, acting through the Administration on Community Living, directly or through grant or contract, shall provide for research on, and a national evaluation of, the demonstration program, including assistance to the Secretary in preparing the final report required under subparagraph (C). (B) Contents of evaluation Such national evaluation shall include an analysis of the characteristics and outcomes of the individuals participating in the demonstration program and the best practices developed to achieve the goals of the demonstration program. (C) Final report Not later than June 30, 2020, the Secretary shall submit to the President and Congress a final report that reflects the evaluation under subparagraph (A), that provides findings and conclusions on the conduct and effectiveness of demonstration program, and that includes a summary of the public comments received under paragraph (1)(D). (h) Definitions In this section: (1) Congregate setting work The term congregate setting work means a nonprofit, for-profit, or State agency entity that employs a majority of individuals with disabilities and receives Medicaid or other State funds for the purpose of providing employment services, or a facility or sub-unit of any such agency that meets such criteria. (2) Demonstration program The term demonstration program means the Transition to Independence Demonstration Program established under this section. (3) Facility-based day habilitation or day treatment The term facility-based day habilitation or day treatment has the meaning established by the Secretary for that term for purposes of the demonstration program and shall include non-residential day services which take place predominantly or in large part at a single site, fixed site, or center-based program for individuals with disabilities. In establishing the meaning of such term, the Secretary shall provide clear instructions distinguishing facility-based day habilitation or day treatment from integrated day habilitation or day treatment programs taking place in settings within the broader community and which do not isolate individuals participating in such integrated day habilitation or day treatment programs from mainstream life. (4) Individual integrated employment (A) In general The term individual integrated employment means the ongoing supports to an individual who, because of the individual's disabilities, needs intensive on-going supports to obtain and maintain an individual job in competitive or customized employment, self-employment, or in an integrated working setting in the general workforce for which the individual is compensated at or above the minimum wage, but not less than the customary wage and level of benefits paid by the employer for the same or similar work performed by an individual without a disability. (B) Customized employment services included Such term includes customized employment services in which an individual receives support to craft a job description around their strengths and challenges. (C) Exclusions Such term does not include segregated enclaves, segregated mobile work crews, or other employment scenarios where an individual is placed solely based on the individual’s disability. In this subparagraph, the term segregated means, with respect to a setting or work crew, a setting or work crew in which individuals with disabilities are separated (in place or in rates of pay) from individuals without disabilities. (5) Integrated day habilitation services The term integrated day habilitation services means services that are provided outside of disability specific programs or facilities, in a setting that supports the full access of individuals with disabilities to the greater community to the same degree as individuals not receiving services, and consistent with the following: (A) Each individual receiving such services has an individually tailored schedule that is directly related to and reflects the individual’s specific interests and goals. (B) Activities take place on an individual basis or in small groups of individuals who choose to be served together. (C) The majority of time spent receiving such services takes place within the broader community rather than within a single-site, fixed site, or center-based program for individuals with disabilities, regardless of the program size. (D) The services are provided consistent with the requirements of section 441.710 of title 42, Code of Federal Regulations. (6) Medicaid The term Medicaid means the program for medical assistance established under title XIX of the Social Security Act ( 42 U.S.C. 1396 et seq. ). (7) Medicaid Buy-In State The term Medicaid Buy-In State means a State that, under subclause (XIII), (XV), or (XVI) of section 1902(a)(10)(A)(ii) of the Social Security Act ( 42 U.S.C. 1396a(a)(10)(A)(ii) ), a waiver approved under section 1115 or 1915 of such Act ( 42 U.S.C. 1315 , 1396n), or other authority, has a program under which individuals with disabilities with earnings and assets that would otherwise make them ineligible for medical assistance under the State's Medicaid program are able to maintain their eligibility for such assistance. (8) Nursing facility The term nursing facility has the meaning given that term in section 1919(a) of the Social Security Act ( 42 U.S.C. 1396r(a) ). (9) Poverty line The term poverty line has the meaning given that term in section 2110(c)(5) of the Social Security Act ( 42 U.S.C. 1397jj(c)(5) ). (10) Regular FMAP The term regular FMAP means the Federal medical assistance percentage applicable to the State (as determined under section 1905(b) of the Social Security Act ( 42 U.S.C. 1396d(b) )) without regard to any increases in that percentage applicable under subsections (y), (z), (aa), or (dd) of section 1905 of such Act or under any other provision of law. (11) Secretary The term Secretary means the Secretary of Health and Human Services. (12) Subminimum wage work The term subminimum wage work means any setting in which individuals with disabilities are paid less than minimum wage under a certificate issued in accordance with section 14(c) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 214(c) ). (13) Supported employment The term supported employment has the meaning given that term in section 7 of the Rehabilitation Act of 1973 ( 29 U.S.C. 705 ). (14) State The term State has the meaning given such term for purposes of title XIX of the Social Security Act ( 42 U.S.C. 1396 et seq. ). (15) Title ii disability beneficiary The term title II disability beneficiary means an individual entitled to disability insurance benefits under section 223 of the Social Security Act ( 42 U.S.C. 423 ) or to monthly insurance benefits under section 202 of such Act ( 42 U.S.C. 402 ) based on such individual's disability (as defined in section 223(d) of such Act ( 42 U.S.C. 423(d) )). (16) Title xvi disability beneficiary The term title XVI disability beneficiary means an individual eligible for supplemental security income benefits under title XVI of the Social Security Act ( 42 U.S.C. 1381 et seq. ) on the basis of blindness (within the meaning of section 1614(a)(2) of such Act ( 42 U.S.C. 1382c(a)(2) )) or disability (within the meaning of section 1614(a)(3) of such Act ( 42 U.S.C. 1382c(a)(3) )). (17) Working-age individual with a disability receiving Medicaid-funded home or community-based services The term working-age individual with a disability receiving Medicaid-funded home or community-based services means a title II disability beneficiary or a title XVI disability beneficiary who has attained age 18, but has not attained age 65, and is receiving home or community-based services— (A) under a waiver approved under subsection (c) or (d) of section 1915 the Social Security Act ( 42 U.S.C. 1396n ); (B) under the State Medicaid plan in accordance with subsection (i), (j), or (k) of such section; or (C) under a Medicaid waiver approved un­der section 1115 of the Social Security Act ( 42 U.S.C. 1315 ).