[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1563 Introduced in Senate (IS)]








109th CONGRESS
  1st Session
                                S. 1563

To amend title XIX of the Social Security Act to protect and strengthen 
 the safety net of children's public health coverage by extending the 
   enhanced Federal matching rate under the State children's health 
 insurance program to children covered by medicaid at State option and 
 by encouraging innovations in children's enrollment and retention, to 
 advance quality and performance in children's public health insurance 
   programs, to provide payments for children's hospitals to reward 
            quality and performance, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 29, 2005

  Mr. DeWine (for himself and Mrs. Lincoln) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend title XIX of the Social Security Act to protect and strengthen 
 the safety net of children's public health coverage by extending the 
   enhanced Federal matching rate under the State children's health 
 insurance program to children covered by medicaid at State option and 
 by encouraging innovations in children's enrollment and retention, to 
 advance quality and performance in children's public health insurance 
   programs, to provide payments for children's hospitals to reward 
            quality and performance, 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 ``Advancing Better Coverage and Care 
for Children's Health Act of 2005'' or the ``ABCs for Children's Health 
Act of 2005''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
                       TITLE I--COVERING CHILDREN

Sec. 101. Phased-in application of enhanced FMAP for children whose 
                            eligibility is optional under medicaid.
Sec. 102. Enhanced matching rate for the effective enrollment and 
                            retention of children under medicaid.
Sec. 103. Preserving comprehensive benefits appropriate to children's 
                            needs.
    TITLE II--ADVANCING QUALITY AND PERFORMANCE: INNOVATIONS IN CARE

Sec. 201. Purpose.
Sec. 202. National quality forum; advancing consensus-based pediatric 
                            quality and performance measures.
Sec. 203. Research grant program; developing new pediatric quality and 
                            performance measures.
Sec. 204. Medicaid demonstration program; evaluating evidence-based 
                            quality and performance measures for 
                            children's health services.
Sec. 205. Funding.
                   TITLE III--ENSURING ACCESS TO CARE

Sec. 301. Pay for performance for children's critical access hospitals.
Sec. 302. Inclusion of children's hospitals as covered entities for 
                            purposes of limitation of purchased drug 
                            price.

                       TITLE I--COVERING CHILDREN

SEC. 101. PHASED-IN APPLICATION OF ENHANCED FMAP FOR CHILDREN WHOSE 
              ELIGIBILITY IS OPTIONAL UNDER MEDICAID.

    (a) In General.--The first sentence of section 1905 of the Social 
Security Act (42 U.S.C. 1396d) is amended--
            (1) in subsection (b)--
                    (A) by striking ``and (4)'' and inserting ``(4)''; 
                and
                    (B) by inserting before the period the following: 
                ``, and (5) the Federal medical assistance percentage 
                shall be equal to the applicable percentage determined 
                under subsection (y) with respect to medical assistance 
                provided to children who are eligible for such 
                assistance on the basis of subsection (a)(10)(A)(ii), 
                (a)(10)(C), (e)(3), or (e)(9) of section 1902, or a 
                waiver under subsection (c) or (e) of section 1915, or 
                who are eligible for such assistance during a 
                presumptive eligibility period under section 1920A (but 
                only if the child is not eligible for medical 
                assistance on the basis of section 
                1902(a)(10)(A)(i))''; and
            (2) by adding at the end the following:
    ``(y) For purposes of the fifth clause of the first sentence of 
subsection (b), the applicable percentage determined under this 
subsection is--
            ``(1) in the case of fiscal year 2006, the enhanced FMAP 
        determined under section 2105(b) by substituting `6 percent' 
        for `30 percent' in such section;
            ``(2) in the case of fiscal year 2007, the enhanced FMAP 
        determined under section 2105(b) by substituting `12 percent' 
        for `30 percent' in such section;
            ``(3) in the case of fiscal year 2008, the enhanced FMAP 
        determined under section 2105(b) by substituting `18 percent' 
        for `30 percent' in such section;
            ``(4) in the case of fiscal year 2009, the enhanced FMAP 
        determined under section 2105(b) by substituting `24 percent' 
        for `30 percent' in such section; and
            ``(5) in the case of fiscal year 2010 or any fiscal year 
        thereafter, the enhanced FMAP determined under section 
        2105(b).''.
    (b) Effective Date.--The amendments made by subsection (a) take 
effect on October 1, 2005.

SEC. 102. ENHANCED MATCHING RATE FOR THE EFFECTIVE ENROLLMENT AND 
              RETENTION OF CHILDREN UNDER MEDICAID.

    (a) In General.--Section 1903(a)(3) of the Social Security Act (42 
U.S.C. 1396b(a)(3)) is amended--
            (1) in subparagraph (E), by striking ``plus'' at the end 
        and inserting ``and''; and
            (2) by adding at the end the following:
                    ``(F) 90 percent of the sums expended during such 
                quarter which are attributable to the design, 
                development, implementation, and evaluation of such 
                enrollment systems as the Secretary determines are 
                likely to provide more efficient and effective 
                administration of the plan's enrollment and retention 
                of eligible children, including--
                            ``(i) `express lane' enrollment for 
                        children through procedures to ensure that 
                        children's eligibility for medical assistance 
                        is determined and expedited through the use of 
                        technology and shared information with other 
                        public benefit programs, such as the school 
                        lunch program under the Richard B. Russell 
                        National School Lunch Act and the food stamp 
                        program under the Food Stamp Act of 1977;
                            ``(ii) a single, simplified application 
                        form for medical assistance under this title 
                        and for children's health assistance under 
                        title XXI;
                            ``(iii) procedures which allow for the 
                        enrollment of children by mail or through the 
                        Internet;
                            ``(iv) the timely evaluation, assistance, 
                        and determination of presumptive eligibility 
                        under section 1920A;
                            ``(v) procedures which allow for passive 
                        reenrollment of children to protect against the 
                        loss of coverage among eligible children; and
                            ``(vi) such other enrollment system changes 
                        as the Secretary determines are likely to 
                        provide more efficient and effective 
                        administration of the plan's enrollment and 
                        retention of eligible children; plus''.
    (b) Exclusion From Erroneous Excess Payment Determination.--Section 
1903(u)(1)(D) of such Act (42 U.S.C. 1396a(u)(1)(D)) is amended by 
adding at the end the following:
                            ``(vi)(I) Notwithstanding clauses (ii) and 
                        (iii), and subject to subclause (II), in 
                        determining the amount of erroneous excess 
                        payments, there shall not be included any 
                        erroneous payments made with respect to medical 
                        assistance provided to children who are 
                        erroneously enrolled or erroneously provided 
                        with continued enrollment under this title as a 
                        result of the application of enrollment systems 
                        described in subsection (a)(3)(F).
                            ``(II) Subclause (I) shall only apply with 
                        respect to erroneous payments made during the 
                        first 5 fiscal years that begin on or after the 
                        date of enactment of this clause.''.

SEC. 103. PRESERVING COMPREHENSIVE BENEFITS APPROPRIATE TO CHILDREN'S 
              NEEDS.

    (a) In General.--Title XIX of the Social Security Act is amended by 
inserting after section 1925 the following:

            ``clarification of authority under section 1115

    ``Sec. 1926. The Secretary may not impose or approve under the 
authority of section 1115 an elimination or modification of the amount, 
duration, or scope of the services described in section 1905(a)(4)(B) 
(relating to early and periodic screening, diagnostic, and treatment 
services (as defined in section 1905(r))) or of the requirements of 
subparagraphs (A) through (C) of section 1902(a)(43).''.
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), 
        section 1926 of the Social Security Act, as added by subsection 
        (a), shall apply to the approval on or after the date of 
        enactment of this Act of--
                    (A) a waiver, experimental, pilot, or demonstration 
                project under section 1115 of the Social Security Act 
                (42 U.S.C. 1315); and
                    (B) an amendment or extension of such a project.
            (2) Exception.--Section 1926 of the Social Security Act, as 
        so added, shall not apply with respect to any extension of 
        approval of a waiver, experimental, pilot, or demonstration 
        project with respect to title XIX of the Social Security Act 
        that was first approved before 1994 and that provides a 
        comprehensive and preventive child health program under such 
        project that includes screening, diagnosis, and treatment of 
        children who have not attained age 21.

    TITLE II--ADVANCING QUALITY AND PERFORMANCE: INNOVATIONS IN CARE

SEC. 201. PURPOSE.

    The purpose of this title is to increase the quality of the health 
care furnished to children under the health insurance programs under 
titles XIX and XXI of the Social Security Act.

SEC. 202. NATIONAL QUALITY FORUM; ADVANCING CONSENSUS-BASED PEDIATRIC 
              QUALITY AND PERFORMANCE MEASURES.

    (a) In General.--The Secretary of Health and Human Services (in 
this title referred to as the ``Secretary''), acting through the 
Director of the Center for Medicaid and State Operations of the Centers 
for Medicare & Medicaid Services, shall enter into agreements with the 
National Quality Forum to facilitate the development of consensus-based 
pediatric quality and performance measures.
    (b) Consultation.--In carrying out agreements under subsection (a), 
the Director of the Center for Medicaid and State Operations shall 
consult with--
            (1) the Agency for Healthcare Research and Quality; and
            (2) national pediatric provider groups.

SEC. 203. RESEARCH GRANT PROGRAM; DEVELOPING NEW PEDIATRIC QUALITY AND 
              PERFORMANCE MEASURES.

    (a) In General.--The Secretary, acting through the Administrator of 
the Agency for Healthcare Research and Quality, shall award grants to 
eligible entities for the development and evaluation of pediatric 
quality and performance measures.
    (b) Eligible Entity Defined.--In this section, the term ``eligible 
entity'' means--
            (1) an institution or multiple institutions with 
        demonstrated expertise and capacity to evaluate pediatric 
        quality and performance measures;
            (2) a National nonprofit association of pediatric academic 
        medical centers with demonstrated experience in working with 
        other pediatric provider and accrediting organizations in 
        developing quality and performance measures for children's 
        inpatient and outpatient care; and
            (3) a collaboration of national pediatric organizations 
        working to improve quality and performance in pediatric 
        critical care.
    (c) Application.--Each eligible entity desiring a grant under this 
section shall submit an application to the Secretary at such time, in 
such manner, and accompanied by such information as the Secretary may 
require.

SEC. 204. MEDICAID DEMONSTRATION PROGRAM; EVALUATING EVIDENCE-BASED 
              QUALITY AND PERFORMANCE MEASURES FOR CHILDREN'S HEALTH 
              SERVICES.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary, acting through the Director of the Center 
for Medicaid and State Operations of the Centers for Medicare & 
Medicaid Services, shall establish demonstration projects in each of 
the 3 categories described in subsection (c) to advance quality and 
performance in the delivery of medical assistance provided to children 
under the medicaid program established under title XIX of the Social 
Security Act (42 U.S.C. 1396 et seq.).
    (b) Authority.--
            (1) In general.--The Secretary is authorized to award 
        grants to States or providers to conduct such projects.
            (2) Use of funds.--Funds provided under a grant awarded 
        under this section may be used for administrative costs, 
        including costs associated with the design, data collection, 
        and evaluation of the demonstration project conducted with such 
        funds, and other expenditures that are not otherwise eligible 
        for reimbursement under the medicaid program.
            (3) Evidence of organizational commitment required for 
        award of grants.--A State or provider shall not be eligible to 
        receive a grant to conduct a demonstration project under this 
        section unless the State or provider demonstrates a commitment 
        to the concept of change and transformation in the delivery of 
        children's health services. Dedication of financial resources 
        of the State or provider to the project may be deemed to 
        demonstrate evidence of such a commitment.
    (c) Project Categories Described.--The 3 demonstration project 
categories described in this subsection are the following:
            (1) Projects that adopt and use health information 
        technology and evidenced-based outcome measures for pediatric 
        inpatient and sub-specialty physician care and evaluate the 
        impact of such technology and measures on the quality, safety, 
        and costs of such care.
            (2) Projects that demonstrate and evaluate care management 
        for children with chronic conditions to determine the extent to 
        which such management promotes continuity of care, 
        stabilization of medical conditions, and functional outcomes, 
        prevents or minimizes acute exacerbations of chronic 
        conditions, and reduces adverse health outcomes and avoidable 
        hospitalizations.
            (3) Projects that implement evidenced-based approaches to 
        improving efficiency, safety, and effectiveness in the delivery 
        of hospital care for children across hospital services and 
        evaluate the impact of such changes on the quality and costs of 
        such care.
    (d) Sites.--To the extent practicable, the Secretary shall use 
multiple sites in different geographical locations in conducting each 
of the 3 demonstration project categories described in subsection (c).
    (e) Uniform Measures, Data, Project Evaluations.--Working in 
consultation with experts described in subsection (f) and with 
participating States or providers, the Secretary shall establish 
uniform measures (adjusted for patient acuity), collect data, and 
conduct evaluations with respect to the 3 demonstration project 
categories described in subsection (c).
    (f) Consultation.--In developing and implementing demonstration 
projects under this section, the Secretary shall consult with national 
pediatric provider organizations, consumers, and such other entities or 
individuals with relevant expertise as the Secretary deems necessary.
    (g) Report.--Not later than 6 months after the completion of all 
demonstration projects conducted under this section, the Secretary 
shall evaluate such projects and submit a report to Congress that 
includes the findings of the evaluation and recommendations with 
respect to--
            (1) expanding the projects to additional sites; and
            (2) the broad implementation of identified successful 
        approaches in advancing quality and performance in the delivery 
        of medical assistance provided to children under the medicaid 
        program.

SEC. 205. FUNDING.

    In order to carry out the provisions of this title, out of funds in 
the Treasury not otherwise appropriated, there are appropriated to the 
Secretary--
            (1) $25,000,000 for fiscal year 2006;
            (2) $30,000,000 for fiscal year 2007; and
            (3) $35,000,000 for each of the fiscal years 2008, 2009, 
        and 2010.

                   TITLE III--ENSURING ACCESS TO CARE

SEC. 301. PAY FOR PERFORMANCE FOR CHILDREN'S CRITICAL ACCESS HOSPITALS.

    (a) In General.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary''), acting through the 
Administrator of the Centers for Medicare & Medicaid Services (in this 
section referred to as the ``Administrator''), shall implement a 4-year 
program to develop, implement, and evaluate a pay-for-performance 
program for eligible children's hospitals providing critical access to 
children eligible for medical assistance under the medicaid program 
established under title XIX of the Social Security Act (42 U.S.C. 1396 
et seq.).
    (b) Consultation.--Measures of quality and performance utilized in 
the program will be determined by the Administrator in collaboration 
with participating eligible children's hospitals and in consultation 
with States, the National Association of Children's Hospitals and 
Related Institutions, the Agency for Healthcare Research and Quality, 
the National Quality Forum, and such other entities or individuals with 
expertise in pediatric quality and performance measures as the 
Administrator deems appropriate.
    (c) Eligible Children's Hospitals.--For purposes of this section, 
an eligible children's hospital is a children's hospital that, not 
later than January 1, 2006, has submitted an application to the 
Secretary to participate in the program established under this section 
and has been certified by the Secretary as--
            (1) meeting the criteria described in subsection (d);
            (2) agreeing to report data on quality and performance 
        measures; and
            (3) meeting or exceeding such measures as are established 
        by the Secretary with respect to the provision of care by the 
        hospital.
    (d) Criteria Described.--In order to be certified as meeting the 
criteria described in this subsection, a hospital shall be a general 
acute care children's hospital or a specialty children's hospital as 
defined under 1886(d)(1)(B)(iii) of the Social Security Act (42 U.S.C. 
1395ww(d)(1)(B)(iii)), or a non-freestanding general acute care 
children's hospital which shares a provider number with another 
hospital or hospital system that--
            (1) has 62 or more total pediatric beds;
            (2) has 38 or more total combined pediatric general medical 
        or surgical and pediatric intensive care beds;
            (3) has at least 4 pediatric intensive care beds;
            (4) has a pediatric emergency room in the hospital or 
        access to an emergency room with pediatric services through the 
        hospital system; and
            (5) provides a minimum of 25 percent of its days of care to 
        patients eligible for medical assistance under the medicaid 
        program.
    (e) Payment Methodology.--
            (1) In general.--An eligible children's hospital that 
        participates in the program established under this section 
        shall receive supplemental Federal payments for inpatient and 
        outpatient care (which shall be in addition to any other 
        payments the hospitals receive for such care under the medicaid 
        program) for cost reporting periods or portions of such 
        reporting periods occurring during fiscal years 2007 through 
        2010 in accordance with the following:
                    (A) Fiscal years 2007 and 2008.--
                            (i) In general.--For hospital cost 
                        reporting periods or portions of such reporting 
                        periods occurring during fiscal year 2007 or 
                        2008, hospitals reporting data for quality and 
                        performance measures established under the 
                        program and participating in the development of 
                        pay-for-performance methodology under this 
                        section, subject to clause (ii), shall receive 
                        with respect to inpatient or outpatient care 
                        that is determined to meet such measures, a 
                        Federal supplemental payment increase equal to 
                        the amount received under the medicaid program 
                        for such care multiplied by the market basket 
                        percentage increase for the year (as defined 
                        under section 1886(b)(3)(B)(iii) of the Social 
                        Security Act (42 U.S.C. 1395ww(b)(3)(B)(iii)).
                            (ii) Limitation.--The total amount of all 
                        Federal supplemental payments made with respect 
                        to cost reporting periods or portions of such 
                        periods described in clause (i) shall not 
                        exceed the amounts appropriated under this 
                        section for fiscal years 2007 and 2008.
                    (B) Fiscal years 2009 and 2010.--
                            (i) In general.--For cost reporting periods 
                        or portions of such periods occurring during 
                        fiscal year 2009 or 2010, hospitals shall 
                        receive supplemental Federal payments 
                        reflecting measures of quality and performance 
                        and a pay-for-performance methodology developed 
                        by the Secretary in consultation with the 
                        entities described in subsection (b). Such 
                        methodology shall recognize clinical measures, 
                        patient satisfaction and adoption of 
                        information technology.
                            (ii) Limitation.--The total amount of all 
                        Federal supplemental payments made for cost 
                        reporting periods or portions of such periods 
                        described in clause (i) shall not exceed the 
                        amounts appropriated under this section for 
                        fiscal years 2009 and 2010.
            (2) State maintenance of effort.--With respect to the 
        periods for payment of the Federal supplemental payments 
        established under paragraph (1), in no case shall a State--
                    (A) pay a participating hospital less for services 
                for children eligible for medical assistance under the 
                medicaid program than the hospital was paid with 
                respect to the most recent cost reporting period ending 
                before the date of enactment of this Act; or
                    (B) not provide an eligible children's hospital 
                participating in the program established under this 
                section (determined on a facility-specific basis) with 
                the same increase in payment that the State may provide 
                to any other hospital participating in the State 
                medicaid program, including any State-owned or operated 
                hospital or any hospital operated by a State university 
                system.
    (f) Appropriations.--
            (1) In general.--Out of funds in the Treasury not otherwise 
        appropriated, there are appropriated for making payments under 
        this section--
                    (A) for fiscal year 2007, $80,000,000;
                    (B) for fiscal year 2008, $100,000,000; and
                    (C) for each of fiscal years 2009 and 2010, 
                $120,000,000.
            (2) Carryover.--Any amount appropriated under paragraph (1) 
        with respect to a fiscal year that remains unobligated as of 
        the end of that fiscal year, shall remain available for 
        obligation during the succeeding fiscal year, in addition to 
        the amount appropriated under that paragraph for such 
        succeeding fiscal year.
    (g) Evaluation and Report.--Not later than September 1, 2010, the 
Secretary shall report to Congress on the program established under 
this section. In providing such a report, the Secretary shall--
            (1) conduct an independent evaluation;
            (2) consult with States, eligible children's hospitals 
        participating in the program, the National Association of 
        Children's Hospitals and Related Institutions, and other 
        national pediatric organizations and individuals with expertise 
        in pediatric measures of quality and performance;
            (3) include a detailed description of the measures and 
        payment enhancements used in determining and rewarding 
        performance under the program;
            (4) assess the impact of rewarding performance through the 
        Federal supplemental payments provided under the program, 
        including with respect to any improvements and innovations in 
        the delivery of children's hospital care and children's access 
        to appropriate care;
            (5) assess how State hospital payment methodologies under 
        the medicaid program, including hospital and physician payments 
        and coverage, affect the capacity of the medicaid program to 
        reward performance; and
            (6) include recommendations to the Committee on Finance of 
        the Senate and the Committee on Energy and Commerce of the 
        House of Representatives regarding the implementation and 
        design of the performance-based payments made under the 
        program, whether to continue such program, and potential 
        alternative approaches to making performance-based payments to 
        such hospitals.

SEC. 302. INCLUSION OF CHILDREN'S HOSPITALS AS COVERED ENTITIES FOR 
              PURPOSES OF LIMITATION OF PURCHASED DRUG PRICE.

    (a) In General.--Section 340B(a)(4) of the Public Health Services 
Act (42 U.S.C. 256b(a)(4)) is amended by adding at the end the 
following new subparagraph:
                    ``(M) A children's hospital described in section 
                1886(d)(1)(B)(iii) of the Social Security Act which 
                meets the requirements of clauses (i) and (iii) of 
                subparagraph (L) and which would meet the requirements 
                of clause (ii) of such subparagraph if that clause were 
                applied by taking into account the percentage of care 
                provided by the hospital to patients eligible for 
                medical assistance under the medicaid program.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to drugs purchased on or after the date of enactment of this Act.
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