[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5197 Introduced in House (IH)]






108th CONGRESS
  2d Session
                                H. R. 5197

   To amend title XIX of the Social Security Act to provide funds to 
  States to enable them to increase the wages paid to targeted direct 
    support professionals in providing services to individuals with 
                disabilities under the Medicaid program.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 30, 2004

 Mr. Terry (for himself and Mrs. Capps) 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 funds to 
  States to enable them to increase the wages paid to targeted direct 
    support professionals in providing services to individuals with 
                disabilities under the Medicaid program.

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

SECTION 1. SHORT TITLE; FINDINGS.

    (a) Short Title.--This Act may be cited as the ``Direct Support 
Professional Fairness and Security Act of 2004''.
    (b) Findings.--Congress finds the following:
            (1) Direct support professionals are the primary providers 
        of long term care services for millions of individuals who have 
        physical or mental disabilities. Direct support professionals 
        provide assistance with activities of daily living, 
        instrumental activities of daily living, assistance with 
        rehabilitation, habilitation, training needs and other tasks. 
        All provide essential supports that help keep individuals with 
        disabilities connected to their communities.
            (2) These workers who provide intimate supports are 
        predominately female and many are the sole breadwinners of 
        their families. Although working and paying taxes, many women 
        in these jobs remain impoverished and are eligible for many of 
        the same Federal and state public assistance programs upon 
        which the very individuals with disabilities to whom they 
        provide supports must depend.
            (3) Throughout the nation, there is a critical shortage of 
        direct support professionals. Vacancy and turn over rates are 
        high. In many parts of the country, individuals with 
        disabilities are unable to access the services they need, 
        thereby jeopardizing their health and quality of life, placing 
        even greater burdens on their family members and informal 
        caregivers and creating long waiting lists for community 
        placement.
            (4) The crisis that the nation faces today will only get 
        worse. Over the next 30 years, there will be a rapid rise of 
        the population over 65 years of age. At the same time, advances 
        in medical science and drug therapy are increasing the number 
        of people, of all ages, living with severe disabilities. Thus, 
        while demand for direct support professional services is 
        increasing, the pool of younger, entry level workers is 
        shrinking. By 2010, more than 780,000 additional workers must 
        be found to fill long-term direct support staff positions.
            (5) To stabilize and increase the number of direct support 
        professionals in the work force, the wages and benefits of 
        direct support professionals must be improved and made 
        equitable among long term support options.
            (6) Medicaid is the single-largest payor of long-term 
        supports and services for people with disabilities. Enhanced 
        Federal Medicaid matching funds should be available to assist 
        states committed to addressing wage differentials among direct 
        support professionals by increasing the wages of direct support 
        professionals and supporting and improving the stability of the 
        direct support professional workforce.

SEC. 2. MEDICAID AMENDMENT.

    (a) Authorizing Establishment of Direct Support Professional Wage 
Enhancement Plans.--Title XIX of the Social Security Act is amended--
            (1) by redesignating section 1936 as section 1937; and
            (2) by inserting after section 1935 the following new 
        section:

          ``direct support professional wage enhancement plan

    ``Sec. 1936. (a) State Option.--As a condition for the receipt of 
increased funding described in subsection (f), a State is required to 
provide for the implementation of a direct support professional wage 
enhancement plan under this section.
    ``(b) Direct Support Professional Wage Enhancement Plan.--
    ``(1) In General.--For purposes of this section, the term `direct 
support professional wage enhancement plan' means a plan of a State 
that the Secretary determines meets the following requirements:
            ``(A) Deadline for submission.--The plan is submitted to 
        the Secretary not later than 120 days after the date the 
        Secretary provides notice to States under paragraph (3).
            ``(B) Contents.--
                    ``(i) Equalization of hourly wage rates.--The plan 
                must describe how the State intends to use the funds 
                made available under this section to increase the 
                hourly wage rate of targeted direct support 
                professionals so that by the end of the 5-year 
                implementation period (as defined in subsection (g)(4)) 
                such rate is equal to the average hourly wage rate of 
                reference direct support professionals.
                    ``(ii) Additional provisions.--The plan must 
                include the additional information described in 
                subsection (c).
            ``(C) Implementation.--The plan must be developed and 
        implemented in accordance with subsection (d).
            ``(D) Annual reports.--The State must provide for annual 
        assessments and reports in accordance with subsection (e).
    ``(2) Modification of Plan.--Nothing in this section shall be 
construed as preventing a State from time to time and with the approval 
of the Secretary from modifying a direct support professional wage 
enhancement plan so long as such plan, as modified, continues to meet 
the requirements of paragraph (1).
    ``(3) Notice.--Not later than 90 days after the date of the 
enactment of this section, the Secretary shall provide notice to States 
regarding the provisions of this section, including the availability of 
enhanced funding to implement direct support professional wage 
enhancement plans.
    ``(c) Contents of Plan.--A direct support professional wage 
enhancement plan shall include, consistent with the other requirements 
of this section, the following:
            ``(1) A description of how the State intends to use funds 
        provided under this section to meet the requirement of 
        subsection (b)(1).
            ``(2) A description of the prevailing hourly wage rates for 
        targeted direct support professionals before the implementation 
        of such plan and any hourly wage rate differentials between 
        targeted direct support professionals and reference direct 
        support professionals.
            ``(3) The impact of wage differentials and labor market 
        conditions on the recruitment and retention of targeted direct 
        support professionals, including current or projected labor 
        shortages.
            ``(4) The identification of a specific, five-year 
        performance goal to increase the hourly wage rate of targeted 
        direct support professionals so as to eliminate any wage rate 
        differential between targeted and reference direct support 
        professionals and the methodology to be used by the State to 
        achieve its goal.
            ``(5) The annual performance goals and targets that the 
        State will monitor to track progress toward achieving its five-
        year performance goal.
            ``(6) Current efforts to increase and stabilize the State's 
        direct support professional labor force and how the plan shall 
        be coordinated with such efforts.
            ``(7) Methods for assuring that funds provided under this 
        section shall be spent in accordance with such plan, and shall 
        not be used to supplant existing funds for wages and benefits 
        or to reduce the State's expenditures below the amount that the 
        State would have paid had the plan not been in effect.
            ``(8) A description of the stakeholders and collaborative 
        process used consistent with subsection (d) to develop the plan 
        and the means by which such collaboration shall continue during 
        the implementation of the plan.
            ``(9) Assurances satisfactory to the Secretary that upon 
        the expiration of the 5-year implementation period, the State 
        shall provide funding necessary to maintain the wage rates 
        attained under the plan for targeted direct support 
        professionals at the five-year performance goal increased 
        annually thereafter by a percentage that is not less than the 
        annual percent increase in the employment cost index (as 
        published quarterly by the Bureau of Labor Statistics).
    ``(d) Development and Implementation of Plan.--A direct support 
professional wage enhancement plan shall be developed and implemented 
in collaboration with--
            ``(1) targeted individuals with disabilities and family 
        representatives;
            ``(2) targeted direct support professionals;
            ``(3) agencies or provider organizations that serve 
        targeted individuals with disabilities and employ targeted 
        direct support professionals; and
            ``(4) individuals and organizations representing the 
        interests of those described in paragraphs (1) through (3).
    ``(e) Annual Assessment and Report.--
            ``(1) In general.--A State shall--
                            ``(A) perform an assessment of the 
                        operation of the direct care support 
                        professional wage enhancement plan in the State 
                        in each fiscal year; and
                            ``(B) report to the Secretary by January 1 
                        following the end of the fiscal year, on the 
                        results of such assessment.
            ``(2) Contents.--Each such assessment shall include the 
        following:
                    ``(A) An assessment of the effectiveness of the 
                plan in increasing the wages of targeted direct support 
                professionals and reducing or eliminating the wage gap 
                with reference direct support professionals.
                    ``(B) An assessment of the State's progress in 
                meeting its annual performance goals under the plan.
                    ``(C) An assessment of the effectiveness of the 
                State's collaboration with stakeholders on plan 
                development and implementation issues.
                    ``(D) A review and assessment of State activities 
                to coordinate the plan with other activities in the 
                State to improve and stabilize the direct support 
                professional workforce.
                    ``(E) Recommendations for improving the plan.
                    ``(F) Such other information as the Secretary may 
                specify.
    ``(f) Increase in Payment to Implement Plan.--
            ``(1) In general.--Subject to paragraph (2), for each 
        calendar quarter during the 5-year implementation period in 
        which a direct support professional wage enhancement plan is in 
        effect under this section in a State, the amount of payment for 
        medical assistance under section 1903(a)(1) shall be increased 
        by the wage enhancement incentive percentage (as defined in 
        paragraph (3)(G)) multiplied by the portion of total funds 
        expended during the quarter for the provision of direct support 
        services to targeted individuals that are attributable to the 
        wages of targeted direct support professionals.
            ``(2) Limitation.--
                    ``(A) In general.--Payments made under paragraph 
                (1) shall be used only to increase the wages of 
                targeted direct support professionals.
                    ``(B) Treatment of employee benefits and salary 
                related benefits.--For purposes of subparagraph (A), 
                payments for costs of employee benefits and other 
                salary related benefits (including mandatory employment 
                taxes and benefits) shall be treated as payments to 
                increase the wages of targeted direct support 
                professionals so long as payments attributable to such 
                non-wage benefits do not exceed 20 percent of the total 
                amounts that increase the wages of targeted direct 
                support professionals.
            ``(3) Definitions.--For purposes of this subsection:
                    ``(A) Annual rate differential percentage.--The 
                term `annual rate differential percentage' means, with 
                respect to a State for a year in which the direct 
                support professional wage enhancement plan is in 
                effect, the percent of the direct support professional 
                wage rate differential (as defined in subparagraph (E)) 
                to be paid under plan for the year.
                    ``(B) Average reference direct support professional 
                hourly wage rate.--The term `average reference direct 
                support professional hourly wage rate' means, for a 
                year under a direct support professional wage 
                enhancement plan, the average direct support 
                professional hourly wage rate (as defined in 
                subparagraph (D)), including any projected increase, 
                paid in the year to reference direct support 
                professionals who are employed by the State or, if 
                there are no such employees, to reference direct 
                support professionals who are employed by local 
                governments in the State, or, when necessary to meet 
                the purpose of the plan, any other reference wage rate 
                defined by the State and as approved by the Secretary.
                    ``(C) Base-year average targeted direct support 
                professional hourly wage rate.--The term `average 
                targeted direct support professional hourly wage rate' 
                means, for a State, the average direct support 
                professional hourly wage rate (as defined in 
                subparagraph (D)) paid to targeted direct support 
                professionals under the State plan in the 12-month-
                period immediately preceding the 5-year implementation 
                period.
                    ``(D) Direct support professional hourly wage 
                rate.--The term `direct support professional hourly 
                wage rate' means--
                            ``(i) the rate of hourly wage paid to a 
                        direct support professional; plus
                            ``(ii) mandatory employment taxes and 
                        benefits (as defined in subparagraph (F)) paid 
                        (as computed and applied on an hourly basis) 
                        with respect to such employment.
                    ``(E) Direct support professional wage rate 
                differential.--The term `direct support professional 
                wage rate differential' means, for a State for a year, 
                the amount by which--
                            ``(i) the average reference direct support 
                        professional hourly wage rate (as defined in 
                        subparagraph (B)) for the State and year, 
                        exceeds
                            ``(ii) the base-year average targeted 
                        direct support professional hourly wage rate 
                        (as defined in subparagraph (C)) for the State.
                    ``(F) Mandatory employment taxes and benefits.--The 
                term `mandatory employment taxes and benefits' means 
                taxes under section 3111 of the Internal Revenue Code 
                of 1986 (relating to the employer share of FICA taxes) 
                and the employer's share of unemployment compensation 
                and worker's compensation payments.
                    ``(G) Wage enhancement incentive percentage.--The 
                term `wage enhancement incentive percentage' means--
                            ``(i) the product of (I) the total direct 
                        support professional wage rate differential (as 
                        defined in subparagraph (E), and (II) annual 
                        rate differential percentage (as defined in 
                        subparagraph (A)); divided by
                            ``(ii) the average reference direct support 
                        professional hourly wage rate (as defined in 
                        subparagraph (B)).
    ``(g) Inspector General Audit.--The Secretary, through the 
Inspector General of the Department of Health and Human Services, shall 
audit a sample from among the States in order to assess the 
effectiveness of progress made in reducing or eliminating the wage gap 
between targeted and reference direct support professionals through 
funds under this section.
    ``(h) GAO Study.--
            ``(1) Study.--The Comptroller General of the United States 
        shall conduct a study concerning the wage equalization and 
        recruitment and retention of direct support professionals who 
        are providing services and supports to individuals with 
        disabilities.
            ``(2) Reports.--The Comptroller General shall submit to 
        Congress reports, in the third and fifth years in which this 
        section is being implemented, on progress made by States, and 
        the impact of payments under this section, on providing wage 
        equalization and in improving recruitment and retention of 
        direct support professionals.
    ``(i) Definitions.--For purposes of this section:
            ``(1) Direct support professional.--The term `direct 
        support professional' means an individual who, whether in a 
        supervisory or non-supervisory capacity, provides services and 
        supports, as needed, to an individual with a disability to 
        assist in acquiring, maintaining or enhancing skills necessary 
        to perform activities of daily living or instrumental 
        activities of daily living and health-related functions through 
        hands-on assistance, supervision, or cueing. Such term 
        includes, among others, individuals who may be classified as 
        nurses aides, home health aides, home care aides, personal care 
        aides and personal assistants, in-home support workers, 
        homemakers, behavioral specialists, habilitation specialist, 
        mental health rehabilitation technicians, independent living 
        skills specialists, crisis program workers, qualified mental 
        health or mental retardation professionals, and educational 
        technicians.
            ``(2) Direct support professional wage enhancement plan.--
        The term `direct support professional wage enhancement plan' is 
        defined in subsection (b)(1).
            ``(3) Direct support services.--The term `direct support 
        services' means a range of services and supports, provided by 
        one or more persons, designed to provide support and health-
        related services to an individual with a disability to enable 
        them to perform, acquire, maintain or enhance skills necessary 
        to perform activities of daily living, instrumental activities 
        of daily living (IADL) and health-related functions. Such term 
        includes personal care services, consumer-directed personal 
        assistance services, rehabilitation services, habilitation 
        services, and respite care.
            ``(4) Individual with a disability.--The term `individual 
        with a disability' means an individual who meets (or is 
        regarded as meeting) the criteria for being disabled under the 
        supplemental security income program under title XVI. Such term 
        includes an individual who, regardless of age, is eligible for 
        and receiving medical assistance under this title for any 
        benefits described in paragraph (i)(8).
            ``(5) 5-year implementation period.--The term `5-year 
        implementation period' means, with respect to a State and a 
        direct support professional wage enhancement plan under this 
        section, the period of 20 calendar quarters beginning with the 
        first full calendar quarter in which such plan is implemented 
        in the State under this section. Each of the five 4-calendar-
        quarter periods within such period shall be treated as a year 
        for purposes of this section.
            ``(6) Reference direct support professional.--The term 
        `reference direct support professional' means a direct support 
        professional who--
                    ``(A) is employed by a State or local government 
                entity; and
                    ``(B) provides direct support services to targeted 
                individuals with disabilities under this title.
            ``(7) Targeted direct support professional.--The term 
        `targeted direct support professional' means a direct support 
        professional who--
                    ``(A) is not employed by a State or local 
                government entity; and
                    ``(B) provides direct support services to targeted 
                individuals with disabilities under this title.
            ``(8) Targeted individual with a disability.--The term 
        `targeted individual with a disability' means an individual 
        with a disability who is eligible for and is receiving medical 
        assistance under this title for personal care services under 
        section 1905(a)(23), for rehabilitative services under section 
        1905(a)(13), for home health care services, for home and 
        community-based services under a waiver approved under section 
        1915(c) or section 1115, or for intermediate care facility 
        services for the mentally retarded.''.
    (b) Conforming Amendment.--Section 1903(a)(1) of such Act (42 
U.S.C. 1396b(a)(1)) is amended by inserting ``and section 1936(f)'' 
after ``1923(f)''.
    (c) Authorization of Planning Grants.--The Secretary of Health and 
Human Services is authorized to award State planning grants in an 
amount not to exceed, in the aggregate, $3,000,000, in order to assist 
States in establishing direct support professional wage enhancement 
plans under section 1936 of the Social Security Act, as inserted by 
subsection (a).
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