[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3612 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 3612

 To amend title XIX of the Social Security Act to provide individuals 
 with disabilities and older Americans with equal access to community-
     based attendant services and supports, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 23, 2002

  Mr. Davis of Illinois (for himself and Mr. Shimkus) introduced the 
   following bill; which was referred to the Committee on Energy and 
                                Commerce

_______________________________________________________________________

                                 A BILL


 
 To amend title XIX of the Social Security Act to provide individuals 
 with disabilities and older Americans with equal access to community-
     based attendant services and supports, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicaid 
Community-Based Attendant Services and Supports Act of 2002''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
            TITLE I--ESTABLISHMENT OF MEDICAID PLAN BENEFIT

Sec. 101. Coverage of community-based attendant services and supports 
                            under the Medicaid program.
Sec. 102. Enhanced FMAP for ongoing activities of early coverage States 
                            that enhance and promote the use of 
                            community-based attendant services and 
                            supports.
Sec. 103. Increased Federal financial participation for certain 
                            expenditures.
      TITLE II--PROMOTION OF SYSTEMS CHANGE AND CAPACITY BUILDING

Sec. 201. Grants to promote systems change and capacity building.
Sec. 202. Demonstration project to enhance coordination of care under 
                            the Medicare and Medicaid programs for non-
                            elderly dual eligible individuals.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress makes the following findings:
            (1) Long-term services and supports provided under the 
        Medicaid program established under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.) must meet the ability and 
        life choices of individuals with disabilities and older 
        Americans, including the choice to live in one's own home or 
        with one's own family and to become a productive member of the 
        community.
            (2) Research on the provision of long-term services and 
        supports under the Medicaid program (conducted by and on behalf 
        of the Department of Health and Human Services) has revealed a 
        significant funding bias toward institutional care. Only about 
        27 percent of long-term care funds expended under the Medicaid 
        program, and only about 9 percent of all funds expended under 
        that program, pay for services and supports in home and 
        community-based settings.
            (3) In the case of Medicaid beneficiaries who need long 
        term care, the only long-term care service currently guaranteed 
        by Federal law in every State is nursing home care. Only 27 
        States have adopted the benefit option of providing personal 
        care services under the Medicaid program. Although every State 
        has chosen to provide certain services under home and 
        community-based waivers, these services are unevenly available 
        within and across States, and reach a small percentage of 
        eligible individuals. In fiscal year 2000, only 3 States spent 
        50 percent or more of their Medicaid long term care funds under 
        the Medicaid program on home and community-based care.
            (4) Despite the funding bias and the uneven distribution of 
        home and community-based services, 2\1/2\ times more people are 
        served in home and community-based settings than in 
        institutional settings.
            (5) The goals of the Nation properly include providing 
        families of children with disabilities, working-age adults with 
        disabilities, and older Americans with--
                    (A) a meaningful choice of receiving long-term 
                services and supports in the most integrated setting 
                appropriate to their needs;
                    (B) the greatest possible control over the services 
                received and, therefore, their own lives and futures; 
                and
                    (C) quality services that maximize independence in 
                the home and community, including in the workplace.
    (b) Purposes.--The purposes of this Act are the following:
            (1) To reform the Medicaid program established under title 
        XIX of the Social Security Act (42 U.S.C. 1396 et seq.) to 
        provide equal access to community-based attendant services and 
        supports.
            (2) To provide financial assistance to States as they 
        reform their long-term care systems to provide comprehensive 
statewide long-term services and supports, including community-based 
attendant services and supports that provide consumer choice and 
direction, in the most integrated setting appropriate.

            TITLE I--ESTABLISHMENT OF MEDICAID PLAN BENEFIT

SEC. 101. COVERAGE OF COMMUNITY-BASED ATTENDANT SERVICES AND SUPPORTS 
              UNDER THE MEDICAID PROGRAM.

    (a) Mandatory Coverage.--Section 1902(a)(10)(D) of the Social 
Security Act (42 U.S.C. 1396a(a)(10)(D)) is amended--
            (1) by inserting ``(i)'' after ``(D)'';
            (2) by adding ``and'' after the semicolon; and
            (3) by adding at the end the following new clause:
                    ``(ii) subject to section 1935, for the inclusion 
                of community-based attendant services and supports for 
                any individual who--
                            ``(I) is eligible for medical assistance 
                        under the State plan;
                            ``(II) with respect to whom there has been 
                        a determination that the individual requires 
                        the level of care provided in a nursing 
                        facility or an intermediate care facility for 
                        the mentally retarded (whether or not coverage 
                        of such intermediate care facility is provided 
                        under the State plan); and
                            ``(III) who chooses to receive such 
                        services and supports;''.
    (b) Community-Based Attendant Services and Supports.--
            (1) In general.--Title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.) is amended--
                    (A) by redesignating section 1935 as section 1936; 
                and
                    (B) by inserting after section 1934 the following:

           ``community-based attendant services and supports

    ``Sec. 1935. (a) Required Coverage.--
            ``(1) In general.--Not later than October 1, 2006, a State 
        shall provide through a plan amendment for the inclusion of 
        community-based attendant services and supports (as defined in 
        subsection (g)(1)) for individuals described in section 
        1902(a)(10)(D)(ii) in accordance with this section.
            ``(2) Enhanced fmap and additional federal financial 
        support for earlier coverage.--Notwithstanding section 1905(b), 
        during the period that begins on or after October 1, 2002, and 
        ends on September 30, 2006, in the case of a State with an 
        approved plan amendment under this section during that period 
        that also satisfies the requirements of subsection (c) the 
        Federal medical assistance percentage shall be equal to the 
        enhanced FMAP described in section 2105(b) with respect to 
        medical assistance in the form of community-based attendant 
        services and supports provided to individuals described in 
        section 1902(a)(10)(D)(ii) in accordance with this section.
    ``(b) Development and Implementation of Benefit.--In order for a 
State plan amendment to be approved under this section, a State shall 
provide the Secretary with the following assurances:
            ``(1) Assurance of development and implementation 
        collaboration.--That the State has developed and shall 
        implement the provision of community-based attendant services 
        and supports under the State plan through active collaboration 
        with--
                    ``(A) individuals with disabilities;
                    ``(B) elderly individuals;
                    ``(C) representatives of such individuals; and
                    ``(D) providers of, and advocates for, services and 
                supports for such individuals.
            ``(2) Assurance of provision on a statewide basis and in 
        most integrated setting.--That community-based attendant 
        services and supports will be provided under the State plan to 
        individuals described in section 1902(a)(10)(D)(ii) on a 
        statewide basis and in a manner that provides such services and 
        supports in the most integrated setting appropriate for each 
        individual eligible for such services and supports.
            ``(3) Assurance of nondiscrimination.--That the State will 
        provide community-based attendant services and supports to an 
        individual described in section 1902(a)(10)(D)(ii) without 
        regard to the individual's age, type of disability, or the form 
        of community-based attendant services and supports that the 
        individual requires in order to lead an independent life.
            ``(4) Assurance of maintenance of effort.--That the level 
        of State expenditures for optional medical assistance that--
                    ``(A) is described in a paragraph other than 
                paragraphs (1) through (5), (17) and (21) of section 
                1905(a) or that is provided under a waiver under 
                section 1915, section 1115, or otherwise; and
                    ``(B) is provided to individuals with disabilities 
                or elderly individuals for a fiscal year,
        shall not be less than the level of such expenditures for the 
        fiscal year preceding the fiscal year in which the State plan 
        amendment to provide community-based attendant services and 
        supports in accordance with this section is approved.
    ``(c) Requirements for Enhanced FMAP for Early Coverage.--In 
addition to satisfying the other requirements for an approved plan 
amendment under this section, in order for a State to be eligible under 
subsection (a)(2) during the period described in that subsection for 
the enhanced FMAP for early coverage under subsection (a)(2), the State 
shall satisfy the following requirements:
            ``(1) Specifications.--With respect to a fiscal year, the 
        State shall provide the Secretary with the following 
        specifications regarding the provision of community-based 
        attendant services and supports under the plan for that fiscal 
        year:
                    ``(A)(i) The number of individuals who are 
                estimated to receive community-based attendant services 
                and supports under the plan during the fiscal year.
                    ``(ii) The number of individuals that received such 
                services and supports during the preceding fiscal year.
                    ``(B) The maximum number of individuals who will 
                receive such services and supports under the plan 
                during that fiscal year.
                    ``(C) The procedures the State will implement to 
                ensure that the models for delivery of such services 
                and supports are consumer controlled (as defined in 
                subsection (g)(2)(B)).
                    ``(D) The procedures the State will implement to 
                inform all potentially eligible individuals and 
                relevant other individuals of the availability of such 
                services and supports under the this title, and of 
                other items and services that may be provided to the 
                individual under this title or title XVIII.
                    ``(E) The procedures the State will implement to 
                ensure that such services and supports are provided in 
                accordance with the requirements of subsection (b)(1).
                    ``(F) The procedures the State will implement to 
                actively involve individuals with disabilities, elderly 
                individuals, and representatives of such individuals in 
                the design, delivery, administration, and evaluation of 
                the provision of such services and supports under this 
                title.
            ``(2) Participation in evaluations.--The State shall 
        provide the Secretary with such substantive input into, and 
        participation in, the design and conduct of data collection, 
        analyses, and other qualitative or quantitative evaluations of 
        the provision of community-based attendant services and 
        supports under this section as the Secretary deems necessary in 
        order to determine the effectiveness of the provision of such 
        services and supports in allowing the individuals receiving 
        such services and supports to lead an independent life to the 
        maximum extent possible.
    ``(d) Quality Assurance Program.--
            ``(1) State responsibilities.--In order for a State plan 
        amendment to be approved under this section, a State shall 
        establish and maintain a quality assurance program with respect 
        to community-based attendant services and supports that 
        provides for the following:
                    ``(A) The State shall establish requirements, as 
                appropriate, for agency-based and other delivery models 
                that include--
                            ``(i) minimum qualifications and training 
                        requirements for agency-based and other models;
                            ``(ii) financial operating standards; and
                            ``(iii) an appeals procedure for 
                        eligibility denials and a procedure for 
                        resolving disagreements over the terms of an 
                        individualized plan.
                    ``(B) The State shall modify the quality assurance 
                program, as appropriate, to maximize consumer 
                independence and consumer control in both agency-
                provided and other delivery models.
                    ``(C) The State shall provide a system that allows 
                for the external monitoring of the quality of services 
                and supports by entities consisting of consumers and 
                their representatives, disability organizations, 
                providers, families of disabled or elderly individuals, 
                members of the community, and others.
                    ``(D) The State shall provide for ongoing 
                monitoring of the health and well-being of each 
                individual who receives community-based attendant 
                services and supports.
                    ``(E) The State shall require that quality 
                assurance mechanisms appropriate for the individual be 
                included in the individual's written plan.
                    ``(F) The State shall establish a process for the 
                mandatory reporting, investigation, and resolution of 
                allegations of neglect, abuse, or exploitation in 
                connection with the provision of such services and 
                supports.
                    ``(G) The State shall obtain meaningful consumer 
                input, including consumer surveys, that measure the 
                extent to which an individual receives the services and 
                supports described in the individual's plan and the 
                individual's satisfaction with such services and 
                supports.
                    ``(H) The State shall make available to the public 
                the findings of the quality assurance program.
                    ``(I) The State shall establish an ongoing public 
                process for the development, implementation, and review 
                of the State's quality assurance program.
                    ``(J) The State shall develop and implement a 
                program of sanctions for providers of community-based 
                services and supports that violate the terms or 
                conditions for the provision of such services and 
                supports.
            ``(2) Federal responsibilities.--
                    ``(A) Periodic evaluations.--The Secretary shall 
                conduct a periodic sample review of outcomes for 
                individuals who receive community-based attendant 
                services and supports under this title.
                    ``(B) Investigations.--The Secretary may conduct 
                targeted reviews and investigations upon receipt of an 
                allegation of neglect, abuse, or exploitation of an 
                individual receiving community-based attendant services 
                and supports under this section.
                    ``(C) Development of provider sanction 
                guidelines.--The Secretary shall develop guidelines for 
                States to use in developing the sanctions required 
                under paragraph (1)(J).
    ``(e) Reports.--The Secretary shall submit to Congress periodic 
reports on the provision of community-based attendant services and 
supports under this section, particularly with respect to the impact of 
the provision of such services and supports on--
            ``(1) individuals eligible for medical assistance under 
        this title;
            ``(2) States; and
            ``(3) the Federal Government.
    ``(f) No Effect On Ability To Provide Coverage Under a Waiver.--
            ``(1) In general.--Nothing in this section shall be 
        construed as affecting the ability of a State to provide 
        coverage under the State plan for community-based attendant 
        services and supports (or similar coverage) under a waiver 
        approved under section 1915, section 1115, or otherwise.
            ``(2) Eligibility for enhanced match.--In the case of a 
        State that provides coverage for such services and supports 
        under a waiver, the State shall not be eligible under 
        subsection (a)(2) for the enhanced FMAP for the early provision 
        of such coverage unless the State submits a plan amendment to 
        the Secretary that meets the requirements of this section.
    ``(g) Definitions.--In this title:
            ``(1) Community-based attendant services and supports.--
                    ``(A) In general.--The term `community-based 
                attendant services and supports' means attendant 
                services and supports furnished to an individual, as 
                needed, to assist in accomplishing activities of daily 
                living, instrumental activities of daily living, and 
                health-related functions  through hands-on assistance, 
supervision, or cueing--
                            ``(i) under a plan of services and supports 
                        that is based on an assessment of functional 
                        need and that is agreed to by the individual 
                        or, as appropriate, the individual's 
                        representative;
                            ``(ii) in a home or community setting, 
                        which may include a school, workplace, or 
                        recreation or religious facility, but does not 
                        include a nursing facility or an intermediate 
                        care facility for the mentally retarded;
                            ``(iii) under an agency-provider model or 
                        other model (as defined in paragraph (2)(C)); 
                        and
                            ``(iv) the furnishing of which is selected, 
                        managed, and dismissed by the individual, or, 
                        as appropriate, with assistance from the 
                        individual's representative.
                    ``(B) Included services and supports.--Such term 
                includes--
                            ``(i) tasks necessary to assist an 
                        individual in accomplishing activities of daily 
                        living, instrumental activities of daily 
                        living, and health-related functions;
                            ``(ii) the acquisition, maintenance, and 
                        enhancement of skills necessary for the 
                        individual to accomplish activities of daily 
                        living, instrumental activities of daily 
                        living, and health-related functions;
                            ``(iii) backup systems or mechanisms (such 
                        as the use of beepers) to ensure continuity of 
                        services and supports; and
                            ``(iv) voluntary training on how to select, 
                        manage, and dismiss attendants.
                    ``(C) Excluded services and supports.--Subject to 
                subparagraph (D), such term does not include--
                            ``(i) the provision of room and board for 
                        the individual;
                            ``(ii) special education and related 
                        services provided under the Individuals with 
                        Disabilities Education Act and vocational 
                        rehabilitation services provided under the 
                        Rehabilitation Act of 1973;
                            ``(iii) assistive technology devices and 
                        assistive technology services;
                            ``(iv) durable medical equipment; or
                            ``(v) home modifications.
                    ``(D) Flexibility in transition to community-based 
                home setting.--Such term may include expenditures for 
                transitional costs, such as rent and utility deposits, 
                first month's rent and utilities, bedding, basic 
                kitchen supplies, and other necessities required for an 
                individual to make the transition from a nursing 
                facility or intermediate care facility for the mentally 
                retarded to a community-based home setting where the 
                individual resides.
            ``(2) Additional definitions.--
                    ``(A) Activities of daily living.--The term 
                `activities of daily living' includes eating, 
                toileting, grooming, dressing, bathing, and 
                transferring.
                    ``(B) Consumer controlled.--The term `consumer 
                controlled' means a method of providing services and 
                supports that allow the individual, or where 
                appropriate, the individual's representative, maximum 
                control of the community-based attendant services and 
                supports, regardless of who acts as the employer of 
                record.
                    ``(C) Delivery models.--
                            ``(i) Agency-provider model.--The term 
                        `agency-provider model' means, with respect to 
                        the provision of community-based attendant 
                        services and supports for an individual, a 
                        method of providing consumer controlled 
                        services and supports under which entities 
                        contract for the provision of such services and 
                        supports.
                            ``(ii) Other models.--The term `other 
                        models' means methods, other than an agency-
                        provider model, for the provision of consumer 
                        controlled services and supports. Such models 
                        may include the provision of vouchers, direct 
                        cash payments, or use of a fiscal agent to 
                        assist in obtaining services.
                    ``(D) Health-related functions.--The term `health-
                related functions' means functions that can be 
                delegated or assigned by licensed health-care 
                professionals under State law to be performed by an 
                attendant.
                    ``(E) Instrumental activities of daily living.--The 
                term `instrumental activities of daily living' includes 
                meal planning and preparation, managing finances, 
                shopping for food, clothing, and other essential items, 
                performing essential household chores, communicating by 
                phone and other media, and traveling around and 
                participating in the community.
                    ``(F) Individual's representative.--The term 
                `individual's representative' means a parent, a family 
                member, a guardian, an advocate, or an authorized 
                representative of an individual.''.
    (c) Conforming Amendments.--
            (1) Mandatory benefit.--Section 1902(a)(10)(A) of the 
        Social Security Act (42 U.S.C. 1396a(a)(10)(A)) is amended, in 
        the matter preceding clause (i), by striking ``(17) and (21)'' 
        and inserting ``(17), (21), and (27)''.
            (2) Definition of medical assistance.--Section 1905(a) of 
        the Social Security Act (42 U.S.C. 1396d) is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (26);
                    (B) by redesignating paragraph (27) as paragraph 
                (28); and
                    (C) by inserting after paragraph (26) the 
                following:
            ``(27) community-based attendant services and supports (to 
        the extent allowed and as defined in section 1935); and''.
            (3) IMD/ICFMR requirements.--Section 1902(a)(10)(C)(iv) of 
        the Social Security Act (42 U.S.C. 1396a(a)(10)(C)(iv)) is 
        amended by inserting ``and (27)'' after ``(24)''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section (other than the amendment made 
        by subsection (c)(1)) take effect on October 1, 2002, and apply 
        to medical assistance provided for community-based attendant 
        services and supports described in section 1935 of the Social 
        Security Act furnished on or after that date.
            (2) Mandatory benefit.--The amendment made by subsection 
        (c)(1) takes effect on October 1, 2006.

SEC. 102. ENHANCED FMAP FOR ONGOING ACTIVITIES OF EARLY COVERAGE STATES 
              THAT ENHANCE AND PROMOTE THE USE OF COMMUNITY-BASED 
              ATTENDANT SERVICES AND SUPPORTS.

    (a) In General.--Section 1935 of the Social Security Act, as added 
by section 101(b), is amended--
            (1) by redesignating subsections (d) through (g) as 
        subsections (f) through (i), respectively;
            (2) in subsection (a)(1), by striking ``subsection (g)(1)'' 
        and inserting ``subsection (i)(1)'';
            (3) in subsection (a)(2), by inserting ``, and with respect 
        to expenditures described in subsection (d), the Secretary 
        shall pay the State the amount described in subsection (d)(1)'' 
        before the period;
            (4) in subsection (c)(1)(C), by striking ``subsection 
        (g)(2)(B)'' and inserting ``subsection (i)(2)(B)''; and
            (5) by inserting after subsection (c), the following:
    ``(d) Increased Federal Financial Participation for Early Coverage 
States That Meet Certain Benchmarks.--
            ``(1) In general.--Subject to paragraph (2), for purposes 
        of subsection (a)(2), the amount and expenditures described in 
        this subsection are an amount equal to the Federal medical 
        assistance percentage, increased by 10 percentage points, of 
        the expenditures incurred by the State for the provision or 
        conduct of the services or activities described in paragraph 
        (3).
            ``(2) Expenditure criteria.--A State shall--
                    ``(A) develop criteria for determining the 
                expenditures described in paragraph (1) in 
                collaboration with the individuals and representatives 
                described in subsection (b)(1); and
                    ``(B) submit such criteria for approval by the 
                Secretary.
            ``(3) Services and activities described.--For purposes of 
        paragraph (1), the services and activities described in this 
        subparagraph are the following:
                    ``(A) One-stop intake, referral, and institutional 
                diversion services.
                    ``(B) Identifying and remedying gaps and inequities 
                in the State's current provision of long-term services, 
                particularly those services that are provided based on 
                such factors as age, disability type, ethnicity, 
                income, institutional bias, or other similar factors.
                    ``(C) Establishment of consumer participation and 
                consumer governance mechanisms, such as cooperatives 
                and regional service authorities, that are managed and 
                controlled by individuals with significant disabilities 
                who use community-based services and supports or their 
                representatives.
                    ``(D) Activities designed to enhance the skills, 
                earnings, benefits, supply, career, and future 
                prospects of workers who provide community-based 
                attendant services and supports.
                    ``(E) Continuous improvement activities that are 
                designed to ensure and enhance the health and well-
                being of individuals who rely on community-based 
                attendant services and supports, particularly 
                activities involving or initiated by consumers of such 
                services and supports or their representatives.
                    ``(F) Family support services to augment the 
                efforts of families and friends to enable individuals 
                with disabilities of all ages to live in their own 
                homes and communities.
                    ``(G) Health promotion and wellness services and 
                activities.
                    ``(H) Provider recruitment and enhancement 
                activities, particularly such activities that encourage 
                the development and maintenance of consumer controlled 
                cooperatives or other small businesses or 
                microenterprises that provide community-based attendant 
                services and supports or related services.
                    ``(I) Activities designed to ensure service and 
                systems coordination.
                    ``(J) Any other services or activities that the 
                Secretary deems appropriate.''.
    (b) Effective Date.--The amendments made by subsection (a) take 
effect on October 1, 2002.

SEC. 103. INCREASED FEDERAL FINANCIAL PARTICIPATION FOR CERTAIN 
              EXPENDITURES.

    (a) In General.--Section 1935 of the Social Security Act, as added 
by section 101(b) and amended by section 102, is amended by inserting 
after subsection (d) the following:
    ``(e) Increased Federal Financial Participation for Certain 
Expenditures.--
            ``(1) Eligibility for payment.--
                    ``(A) In general.--In the case of a State that the 
                Secretary determines satisfies the requirements of 
                subparagraph (B), the Secretary  shall pay the State 
the amounts described in paragraph (2) in addition to any other 
payments provided for under section 1903 or this section for the 
provision of community-based attendant services and supports.
                    ``(B) Requirements.--The requirements of this 
                subparagraph are the following:
                            ``(i) The State has an approved plan 
                        amendment under this section.
                            ``(ii) The State has incurred expenditures 
                        described in paragraph (2).
                            ``(iii) The State develops and submits to 
                        the Secretary criteria to identify and select 
                        such expenditures in accordance with the 
                        requirements of paragraph (3).
                            ``(iv) The Secretary determines that 
                        payment of the applicable percentage of such 
                        expenditures (as determined under paragraph 
                        (2)(B)) would enable the State to provide a 
                        meaningful choice of receiving community-based 
                        services and supports to individuals with 
                        disabilities and elderly individuals who would 
                        otherwise only have the option of receiving 
                        institutional care.
            ``(2) Amounts and expenditures described.--
                    ``(A) Expenditures in excess of 150 percent of 
                baseline amount.--The amounts and expenditures 
                described in this paragraph are an amount equal to the 
                applicable percentage, as determined by the Secretary 
                in accordance with subparagraph (B), of the 
                expenditures incurred by the State for the provision of 
                community-based attendant services and supports to an 
                individual that exceed 150 percent of the average cost 
                of providing nursing facility services to an individual 
                who resides in the State and is eligible for such 
                services under this title, as determined in accordance 
                with criteria established by the Secretary.
                    ``(B) Applicable percentage.--The Secretary shall 
                establish a payment scale for the expenditures 
                described in subparagraph (A) so that the Federal 
                financial participation for such expenditures gradually 
                increases from 70 percent to 90 percent as such 
                expenditures increase.
            ``(3) Specification of order of selection for 
        expenditures.--In order to receive the amounts described in 
        paragraph (2), a State shall--
                    ``(A) develop, in collaboration with the 
                individuals and representatives described in subsection 
                (b)(1) and pursuant to guidelines established by the 
                Secretary, criteria to identify and select the 
                expenditures submitted under that paragraph; and
                    ``(B) submit such criteria to the Secretary.''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect on October 1, 2002.

      TITLE II--PROMOTION OF SYSTEMS CHANGE AND CAPACITY BUILDING

SEC. 201. GRANTS TO PROMOTE SYSTEMS CHANGE AND CAPACITY BUILDING.

    (a) Authority To Award Grants.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall award 
        grants to eligible States to carry out the activities described 
        in subsection (b).
            (2) Application.--In order to be eligible for a grant under 
        this section, a State shall submit to the Secretary an 
application in such form and manner, and that contains such 
information, as the Secretary may require.
    (b) Permissible Activities.--A State that receives a grant under 
this section may use funds provided under the grant for any of the 
following activities, focusing on areas of need identified by the State 
and the Consumer Task Force established under subsection (c):
            (1) The development and implementation of the provision of 
        community-based attendant services and supports under section 
        1935 of the Social Security Act (as added by section 101(b) and 
        amended by sections 102 and 103) through active collaboration 
        with--
                    (A) individuals with disabilities;
                    (B) elderly individuals;
                    (C) representatives of such individuals; and
                    (D) providers of, and advocates for, services and 
                supports for such individuals.
            (2) Substantially involving individuals with significant 
        disabilities and representatives of such individuals in jointly 
        developing, implementing, and continually improving a mutually 
        acceptable comprehensive, effectively working statewide plan 
        for preventing and alleviating unnecessary institutionalization 
        of such individuals.
            (3) Engaging in system change and other activities deemed 
        necessary to achieve any or all of the goals of such statewide 
        plan.
            (4) Identifying and remedying disparities and gaps in 
        services to classes of individuals with disabilities and 
        elderly individuals who are currently experiencing or who face 
        substantial risk of unnecessary institutionalization.
            (5) Building and expanding system capacity to offer quality 
        consumer controlled community-based services and supports to 
        individuals with disabilities and elderly individuals, 
        including by--
                    (A) seeding the development and effective use of 
                community-based attendant services and supports 
                cooperatives, independent living centers, small 
                businesses, microenterprises and similar joint ventures 
                owned and controlled by individuals with disabilities 
                or representatives of such individuals and community-
                based attendant services and supports workers;
                    (B) enhancing the choice and control individuals 
                with disabilities and elderly individuals exercise, 
                including through their representatives, with respect 
                to the personal assistance and supports they rely upon 
                to lead independent, self-directed lives;
                    (C) enhancing the skills, earnings, benefits, 
                supply, career, and future prospects of workers who 
                provide community-based attendant services and 
                supports;
                    (D) engaging in a variety of needs assessment and 
                data gathering;
                    (E) developing strategies for modifying policies, 
                practices, and procedures that result in unnecessary 
                institutional bias or the overmedicalization of long-
                term services and supports;
                    (F) engaging in interagency coordination and single 
                point of entry activities;
                    (G) providing training and technical assistance 
                with respect to the provision of community-based 
                attendant services and supports;
                    (H) engaging in--
                            (i) public awareness campaigns;
                            (ii) facility-to-community transitional 
                        activities; and
                            (iii) demonstrations of new approaches; and
                    (I) engaging in other systems change activities 
                necessary for developing, implementing, or evaluating a 
                comprehensive statewide system of community-based 
                attendant services and supports.
            (6) Ensuring that the activities funded by the grant are 
        coordinated with other efforts to increase personal attendant 
        services and supports, including--
                    (A) programs funded under or amended by the Ticket 
                to Work and Work Incentives Improvement Act of 1999 
                (Public Law 106-170; 113 Stat. 1860);
                    (B) grants funded under the Families of Children 
                With Disabilities Support Act of 2000 (42 U.S.C. 15091 
                et seq.); and
                    (C) other initiatives designed to enhance the 
                delivery of community-based services and supports to 
                individuals with disabilities and elderly individuals.
            (7) Engaging in transition partnership activities with 
        nursing facilities and intermediate care facilities for the 
        mentally retarded that utilize and build upon items and 
        services provided to individuals with disabilities or elderly 
        individuals under the Medicaid program under title XIX of the 
Social Security Act, or by Federal, State, or local housing agencies, 
independent living centers, and other organizations controlled by 
consumers or their representatives.
    (c) Consumer Task Force.--
            (1) Establishment and duties.--To be eligible to receive a 
        grant under this section, each State shall establish a Consumer 
        Task Force (referred to in this subsection as the ``Task 
        Force'') to assist the State in the development, 
        implementation, and evaluation of real choice systems change 
        initiatives.
            (2) Appointment.--Members of the Task Force shall be 
        appointed by the Chief Executive Officer of the State in 
        accordance with the requirements of paragraph (3), after the 
        solicitation of recommendations from representatives of 
        organizations representing a broad range of individuals with 
        disabilities, elderly individuals, representatives of such 
        individuals, and organizations interested in individuals with 
        disabilities and elderly individuals.
            (3) Composition.--
                    (A) In general.--The Task Force shall represent a 
                broad range of individuals with disabilities from 
                diverse backgrounds and shall include representatives 
                from Developmental Disabilities Councils, Mental Health 
                Councils, State Independent Living Centers and 
                Councils, Commissions on Aging, organizations that 
                provide services to individuals with disabilities and 
                consumers of long-term services and supports.
                    (B) Individuals with disabilities.--A majority of 
                the members of the Task Force shall be individuals with 
                disabilities or representatives of such individuals.
                    (C) Limitation.--The Task Force shall not include 
                employees of any State agency providing services to 
                individuals with disabilities other than employees of 
                entities described in the Developmental Disabilities 
                Assistance and Bill of Rights Act of 2000 (42 U.S.C. 
                15001 et seq.).
    (d) Annual Report.--
            (1) States.--A State that receives a grant under this 
        section shall submit an annual report to the Secretary on the 
        use of funds provided under the grant in such form and manner 
        as the Secretary may require.
            (2) Secretary.--The Secretary shall submit to Congress an 
        annual report on the grants made under this section.
    (e) Authorization of Appropriations.--
            (1) In general.--There is authorized to be appropriated to 
        carry out this section, $50,000,000 for each of fiscal years 
        2003 through 2005.
            (2) Availability.--Amounts appropriated to carry out this 
        section shall remain available without fiscal year limitation.

SEC. 202. DEMONSTRATION PROJECT TO ENHANCE COORDINATION OF CARE UNDER 
              THE MEDICARE AND MEDICAID PROGRAMS FOR NON-ELDERLY DUAL 
              ELIGIBLE INDIVIDUALS.

    (a) Definitions.--In this section:
            (1) Non-elderly dually eligible individual.--The term 
        ``non-elderly dually eligible individual'' means an individual 
        who--
                    (A) has not attained age 65; and
                    (B) is enrolled in the Medicare and Medicaid 
                programs established under titles XVIII and XIX, 
                respectively, of the Social Security Act (42 U.S.C. 
                1395 et seq., 1396 et seq.).
            (2) Project.--The term ``project'' means the demonstration 
        project authorized to be conducted under this section.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
    (b) Authority To Conduct Project.--The Secretary shall conduct a 
project under this section for the purpose of evaluating service 
coordination and cost-sharing approaches with respect to the provision 
of community-based services and supports to non-elderly dually eligible 
individuals.
    (c) Requirements.--
            (1) Number of participants.--Not more than 5 States may 
        participate in the project.
            (2) Application.--A State that desires to participate in 
        the project shall submit an application to the Secretary, at 
        such time and in such form and manner as the Secretary shall 
        specify.
            (3) Duration.--The project shall be conducted for at least 
        5, but not more than 10 years.
    (d) Evaluation and Report.--
            (1) Evaluation.--Not later than 1 year prior to the 
        termination date of the project, the Secretary, in consultation 
        with States participating in the project, representatives of 
        non-elderly dually eligible individuals, and others, shall 
        evaluate the impact and effectiveness of the project.
            (2) Report.--The Secretary shall submit a report to 
        Congress that contains the findings of the evaluation conducted 
        under paragraph (1) along with recommendations regarding 
        whether the project should be extended or expanded, and any 
        other legislative or administrative actions that the Secretary 
        considers appropriate as a result of the project.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.
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