[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2369 Introduced in Senate (IS)]







108th CONGRESS
  2d Session
                                S. 2369

  To require the Secretary of Health and Human Services to undertake 
 activities to ensure the provision of services under the PACE program 
     to frail elders living in rural areas, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 29, 2004

Mrs. Lincoln (for herself, Mr. Brownback, Mr. Breaux, and Mr. Jeffords) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To require the Secretary of Health and Human Services to undertake 
 activities to ensure the provision of services under the PACE program 
     to frail elders living in rural areas, 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.

    This Act may be cited as the ``Community Options for Rural Elders 
Act of 2004'' or the ``CORE Act of 2004''.

 SEC. 2. DEFINITIONS.

    In this Act:
            (1) CMS.--The term ``CMS'' means the Centers for Medicare & 
        Medicaid Services.
            (2) Eligible participant.--The term ``eligible 
        participant'' means a PACE program eligible individual (as 
        defined in sections 1894(a)(5) and 1934 (a)(5) of the Social 
        Security Act (42 U.S.C. 1395eee(a)(5); 1396u-4(a)(5))).
            (3) HRSA.--The term ``HRSA'' means the Health Resources and 
        Services Administration.
            (4) ORHP.--The term ``ORHP'' means the Office of Rural 
        Health Policy of HRSA.
            (5) PACE program.--The term ``PACE program'' has the 
        meaning given that term in sections 1894(a)(2) and 1934(a)(2) 
        of the Social Security Act (42 U.S.C. 1395eee(a)(2); 1396u-
        4(a)(2)).
            (6) PACE program agreement.--The term ``PACE program 
        agreement'' has the meaning given that term in sections 
        1894(a)(4) or 1934(a)(4) of the Social Security Act (42 U.S.C. 
        1395eee(a)(4); 1396u-4(a)(4)).
            (7) PACE provider.--The term ``PACE provider'' has the 
        meaning given that term in sections 1894(a)(3) or 1934(a)(3) of 
        the Social Security Act (42 U.S.C. 1395eee(a)(3); 1396u-
        4(a)(3)).
            (8) Rural area.--The term ``rural area'' has the meaning 
        given that term in section 1886(d)(2)(D) of the Social Security 
        Act (42 U.S.C. 1395ww(d)(2)(D)).
            (9) Rural pace provider applicant.--The term ``rural PACE 
        provider applicant'' means a PACE provider or a public entity 
        or private, nonprofit entity organized under section 501(c)(3) 
        of the Internal Revenue Code of 1986, that has applied to 
        provide services in a rural area in a manner consistent with 
        the objectives of the PACE program and this Act.
            (10) Rural pace provider.--The term ``rural PACE provider'' 
        means a rural PACE provider applicant that has been approved to 
        provide services in whole or in part in a rural area in a 
        manner consistent with the objectives of the PACE program and 
        this Act.
            (11) Rural provider.--The term ``rural provider'' means a 
        health care, housing, or community service provider offering 
        services in whole or in part in a rural area.
            (12) Rural service area.--The term ``rural service area'' 
        means a rural area served by a PACE provider.
            (13) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 3. PURPOSES.

    The purposes of this Act are--
            (1) to require the Secretary to undertake activities to 
        fully exercise existing statutory and regulatory authority to 
        waive certain PACE program elements which may impair the 
        ability of otherwise qualified entities to provide PACE 
        services to qualified beneficiaries in rural areas;
            (2) to establish a foundation of experience in utilizing 
        the PACE program model to serve qualified beneficiaries in 
        rural areas such that the model's transition to those areas 
        proceeds rationally and in full consideration of the unique 
        needs of rural, frail elders; and
            (3) to regularly evaluate and report on the clinical and 
        cost-effectiveness of providing PACE services in meeting the 
        needs of medicare and medicaid beneficiaries living in rural 
        areas.

 SEC. 4. PROGRAM TO SUPPORT PACE DEVELOPMENT IN RURAL AREAS.

    (a) In General.--The Secretary shall provide for the Administrator 
of HRSA to work with the Administrator of CMS to establish PACE 
providers in rural areas.
    (b) Adaption of Program for Requirements of Rural Participants.--In 
order to support the establishment of PACE providers in rural areas, 
the Secretary shall permit a rural PACE provider applicant to modify 
the PACE program to be operated by the provider while delivering 
services consistent, to the maximum extent feasible, with the general 
intent and scope of services of that program, in order to adapt the 
PACE program to the unique requirements of eligible participants 
residing in rural areas and the challenges of providing services to 
such participants.
    (c) Deemed Approval of Provision of a PACE Program Agreement of a 
Rural PACE Provider Applicant.--In the case of a rural PACE provider 
applicant with a PACE program agreement--
            (1) the rural PACE provider applicant shall identify the 
        provisions of such agreement that the applicant proposes to 
        apply if the applicant is approved to be a rural PACE provider; 
        and
            (2) the Secretary shall review such provisions and, if the 
        Secretary approves the applicant to be a rural PACE provider, 
        deem such provisions as the Secretary determines appropriate to 
        apply to the rural PACE provider's PACE program agreement.
    (d) Application of Flexibility in Exercising Waiver Authority.--The 
Secretary shall utilize the authority provided under section 903 of the 
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act 
of 2000 (114 Stat. 2763A-583), as enacted into law by section 1(a)(6) 
of Public Law 106-554, and the regulations issued to carry out that 
authority to allow for maximum flexibility in the operations of rural 
PACE providers. In exercising such authority, the Secretary shall waive 
or modify regulatory requirements applicable under part 460 of title 
42, Code of Federal Regulations to the extent necessary for a rural 
PACE provider. The waiver or modification of regulatory requirements 
shall include requirements relating to--
            (1) the PACE Center;
            (2) employment;
            (3) the use of community-based primary care physicians;
            (4) the format, structure, and composition of the 
        interdisciplinary team and its meetings; and
            (5) other requirements as are necessary for purposes of 
        providing, operating, and integrating PACE services in rural 
        areas.
    (e) Waiver Authority.--
            (1) In general.--Subject to paragraph (2), the Secretary 
        shall waive such requirements of titles XI, XVIII, and XIX of 
        the Social Security Act (42 U.S.C. 1301 et seq.; 1395 et seq.; 
        1396 et seq.) as may be necessary for purposes of supporting 
        the delivery of PACE services in rural areas as set forth by 
        the rural PACE provider applicants in their applications.
            (2) Required waiver of full financial risk requirement for 
        initial 3-years of operation.--
                    (A) In general.--The Secretary--
                            (i) shall waive the requirement that a 
                        rural PACE provider in at least its first 3 
                        years of operation be at full financial risk; 
                        and
                            (ii) upon request by the rural PACE 
                        provider, may waive such requirement with 
                        respect to years of operation after the first 3 
                        years of operation if the Secretary determines 
                        that the rural PACE provider is operating 
                        properly and has demonstrated a reasonable 
                        basis for not assuming full risk.
                    (B) Some risk required.--Nothing in subparagraph 
                (A) shall be construed to imply that a rural PACE 
                provider shall bear no financial risk for the 
                population it serves.

SEC. 5. STARTUP AND TECHNICAL ASSISTANCE FOR RURAL PACE PROVIDERS.

    (a) Site Development Grants.--
            (1) In general.--The Secretary shall award $7,500,000 in 
        site development grants to rural PACE providers.
            (2) Amount per award.--A grant awarded under paragraph (1) 
        to a rural PACE provider shall not exceed $750,000.
            (3) Use of funds.--Funds made available under a grant 
        awarded under paragraph (1) may be used for the following 
        expenses only if such expenses are incurred in relation to 
        establishing or delivering PACE program services in a rural 
        area:
                    (A) Feasibility analysis and planning.
                    (B) Interdisciplinary team development.
                    (C) Development of a provider network, including 
                contract development.
                    (D) Development or adaptation of claims processing 
                systems.
                    (E) Preparation of special education and outreach 
                efforts required for the PACE program.
                    (F) Development of expense reporting required for 
                calculation of outlier payments or reconciliation 
                processes.
                    (G) Development of any special quality of care or 
                patient satisfaction data collection efforts.
                    (H) Establishment of a working capital fund to 
                sustain fixed administrative, facility, or other fixed 
                costs until the provider reaches sufficient enrollment 
                size.
                    (I) Startup and development costs incurred prior to 
                the approval of the rural PACE provider applicant's 
                application by CMS.
                    (J) Any other efforts determined by the rural PACE 
                provider to be critical to the provider's successful 
                startup, as approved by the Secretary.
            (4) Administration of site development grants.--The 
        Secretary shall instruct the ORHP, to develop, in consultation 
        with the Administrator of CMS, criteria for awarding site 
        development grants and to establish processes for administering 
        and overseeing the awarded grant funds. A prerequisite for 
        receiving a site development grant shall be the approval of the 
        rural PACE provider applicant's application by CMS. The grant 
        approval process and the administration of grant funds shall be 
        the responsibility of ORHP.
            (5) Appropriation.--
                    (A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, there are appropriated to 
                the Secretary to carry out this subsection for the 
                period of fiscal years 2005 through 2006, $7,500,000.
                    (B) Availability.--Funds appropriated under 
                subparagraph (A) shall remain available for expenditure 
                through fiscal year 2009.
    (b) Technical Assistance Program.--
            (1) In general.--The Secretary, through ORHP, shall award 
        up to $250,000 for each of fiscal years 2005 through 2007 to a 
        public entity or private, nonprofit entity organized under 
        section 501(c)(3) of the Internal Revenue Code of 1986, for the 
        purpose of establishing a technical assistance program to 
        provide--
                    (A) outreach and education to State agencies and 
                provider organizations interested in establishing PACE 
                programs in rural areas; and
                    (B) technical assistance necessary to support 
                providers awarded grants under subsection (a).
            (2) Preference in choosing a technical assistance 
        provider.--In selecting an entity for a grant under paragraph 
        (1), the Secretary shall--
                    (A) give preference to a technical assistance 
                program operated by an entity with previous experience 
                in conducting outreach and support related to PACE 
                program development and expansion for State agencies 
                and prospective PACE entities across a nationally 
                representative number of States and providers; and
                    (B) consider the entity's familiarity with the 
                delivery of health services to frail elderly 
                individuals who reside in rural areas.
            (3) Appropriation.--Out of any funds in the Treasury not 
        otherwise appropriated, there are appropriated to the Secretary 
        to carry out this subsection for each of fiscal years 2005 
        through 2007, $250,000.
    (c) Fund for Reimbursement of Outlier Costs of Grantees.--
            (1) In general.--The Secretary shall establish an outlier 
        fund to reimburse rural PACE providers awarded a grant under 
        subsection (a)(1) for outlier costs (as defined in paragraph 
        (2)) incurred with respect to eligible participants enrolled 
        with such providers who reside in, or receive services in, a 
        rural area in accordance with the outlier expense payment 
        specified in paragraph (3).
            (2) Outlier costs defined.--
                    (A) In general.--In paragraph (1), the term 
                ``outlier costs'' means the inpatient and related 
                physician and ancillary costs incurred with respect to 
                an eligible participant described in paragraph (1) in 
                excess of $50,000 for the most recent 12-month period.
                    (B) Inclusion in only 1 period.--Outlier costs may 
                not be included in more than 1 12-month period for 
                purposes of calculating an outlier expense payment 
                under paragraph (3).
            (3) Outlier expense payment.--
                    (A) Payment for outlier costs.--Subject to 
                subparagraph (B) and the amount appropriated under 
                paragraph (5), in the case of a rural PACE provider 
                described in paragraph (1) that has incurred outlier 
                costs for an eligible participant for the most recent 
                12-month period, the rural PACE provider shall receive 
                an outlier expense payment equal to 80 percent of such 
                costs.
                    (B) Limitations.--
                            (i) Costs incurred per eligible 
                        participant.--The total amount of outlier 
                        expense payments made under subparagraph (A) to 
                        a rural PACE provider for outlier costs 
                        incurred with respect to an eligible 
                        participant shall not exceed $100,000 per 
                        participant for the 12-month period used to 
                        calculate the payment.
                            (ii) Costs incurred per provider.--No rural 
                        PACE program provider may receive more than 
                        $500,000 in total outlier expense payments paid 
                        to the provider in a 12-month period.
                            (iii) Overall limit.--In no case may the 
                        aggregate amount of outlier expense payments 
                        made under this subsection for a fiscal year 
                        exceed the amount available for expenditure 
                        under paragraph (5).
            (4) Requirement to access risk reserves prior to payment.--
        A rural PACE provider shall access and exhaust any risk 
        reserves held or arranged for the provider (other than revenue 
or reserves maintained to satisfy the requirements of section 460.80(c) 
of title 42, Code of Federal Regulations) and any working capital 
established through a grant awarded under subsection (a), prior to 
receiving any payment from the outlier fund established under this 
subsection.
            (5) Appropriation.--
                    (A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, there are appropriated to 
                the Secretary to carry out this subsection--
                            (i) $2,000,000 for fiscal year 2005;
                            (ii) $5,000,000 for fiscal year 2006; and
                            (iii) $3,000,000 for fiscal year 2007.
                    (B) Availability.--Funds appropriated under 
                subparagraph (A) shall remain available for expenditure 
                through fiscal year 2009.

 SEC. 6. EVALUATION OF PACE PROVIDERS SERVING RURAL SERVICE AREAS.

    (a) In General.--Beginning with October 1 of the first fiscal year 
that begins after the date of enactment of this Act, and for each of 
the 2 succeeding fiscal years thereafter, the Secretary shall submit to 
Congress annual progress reports on the provision of PACE programs in 
rural areas.
    (b) Comprehensive Evaluation.--
            (1) In general.--In addition to the annual progress reports 
        to be submitted in accordance with subsection (a), not later 
        than 60 months after the effective date of final regulations 
        implementing this Act, the Secretary shall submit a 
        comprehensive overall evaluation of the clinical and cost-
        effectiveness of rural PACE providers. Funds otherwise made 
        available to the Secretary for the purpose of conducting 
        research or evaluations shall be used for the costs of 
        conducting such evaluation.
            (2) Requirements.--The evaluation required under paragraph 
        (1) shall include the following:
                    (A) An analysis of the quality and cost of 
                providing PACE program services to eligible 
                participants in rural areas as compared to such 
                outcomes and costs for a comparable population of 
                eligible participants that did not receive such 
                services from a rural PACE provider.
                    (B) Such recommendations regarding the extension or 
                expansion of rural PACE providers as the Secretary 
                determines appropriate.
    (c) Extension of Waivers.--In order to ensure continuity of care 
and services, the Secretary is authorized to provide for the continued 
participation of a rural PACE provider beyond the otherwise approved 
periods under this Act as well as to extend those waivers of PACE 
program requirements under the authority of subsections (c) and (d) of 
section 4 to rural PACE providers if the Secretary finds that the 
providers comply with the objectives of the PACE program and this Act.
    (d) Advisory Group.--
            (1) In general.--The Secretary shall establish, and 
        actively consult with, an advisory group that will review and 
        comment on progress related to providing PACE program services 
        in rural areas.
            (2) Duties.--The advisory group shall review and make 
        recommendations with respect to--
                    (A) the consideration of prospective PACE provider 
                applications to serve rural areas;
                    (B) the evaluation design, criteria, and results 
                achieved by rural PACE providers; and
                    (C) the technical assistance activities provided 
                under section 5(b) that support those providers and 
                States.
            (3) Membership.--
                    (A) Number.--Not more than 9 individuals shall be 
                appointed to the advisory group established under this 
                subsection.
                    (B) Expertise.--A member of the advisory group 
                shall have experience with, and understanding of 1 or 
                more of the following areas:
                            (i) The development, organization, and 
                        operation of the PACE program.
                            (ii) Providing services to frail elderly 
                        individuals who reside in rural areas.
                            (iii) Federal and State programs and 
                        initiatives that are related to the PACE 
                        program.
                                 <all>