Application of unexpended Medicaid DSH allotments for increased allotments for low DSH States and for health network access grants

(a)

Establishment of DSH redistribution pool from unexpended Medicaid DSH allotments

Subsection (f) of section 1923 of the Social Security Act (42 U.S.C. 1396r–4) is amended— (1)by redesignating paragraph (7) as paragraph (8); and (2)by inserting after paragraph (6) the following new paragraph:

(7)

DSH redistribution pool from portion of unexpended DSH allotments to fund increase in allotments for low DSH States and health network access grants

(A)

Establishment

There is established a DSH redistribution pool in the amount provided under this paragraph. Such amount shall be determined by the Secretary at the beginning of each fiscal year and the Secretary may adjust such amount in subsequent fiscal years to take into account errors in estimates made for previous fiscal years. The amount in such pool shall be available for obligation and expenditure without fiscal year limitation. (B)

Addition of unexpended DSH allotments

At the beginning of each fiscal year (beginning with fiscal year 2009), there shall be added to the DSH redistribution pool an amount equal to the amount by which— (i)the total of the DSH allotments for all States for the third preceding fiscal year; exceeded (ii)the total Federal financial participation under this title attributable to such allotments for such fiscal year. (C)

Reduction for expenditures resulting from increased allotments for low DSH States and for health network access grants

At the beginning of each fiscal year (beginning with fiscal year 2010), there shall be subtracted from the DSH redistribution pool an amount equal to the sum of— (i)the aggregate increase in Federal financial participation under this title attributable to the amendments made by section 2(b) of the Strengthening the Safety Net Act of 2008 for the previous fiscal year; and (ii)the amount obligated on grants under subsection (k) for such previous fiscal year.

(b)

Increase in DSH allotments for low DSH States; qualification of low DSH States based on fiscal year 2004 data

Subsection (f)(5) of such section is amended— (1)in subparagraph (B)— (A)by striking and at the end of clause (ii); (B)in clause (iii)— (i)by striking 2009 and inserting 2014; (ii)by inserting , subject to subparagraph (D), after shall be; and (iii)by redesignating such clause as clause (iv); and (C)by inserting after clause (ii) the following new clause:

(iii)each succeeding fiscal year before fiscal year 2014 shall be, subject to subparagraph (D), the DSH allotment for the State for the previous fiscal year increased by 19.5 percent; and

; and

(2)by adding at the end the following new subparagraphs:

(C)

Additional states covered for fiscal year 2009 and subsequent years

In the case of a State not described in subparagraph (B) in which the total expenditures under the State plan (including Federal and State shares) for disproportionate share hospital adjustments under this section for fiscal year 2004, as reported to the Administrator of the Centers for Medicare & Medicaid Services as of August 31, 2007, is greater than 0 but less than 3 percent of the State's total amount of expenditures under the State plan for medical assistance during the fiscal year, the DSH allotment for the State with respect to— (i)fiscal year 2009 and any succeeding fiscal year before fiscal year 2014 shall be, subject to subparagraph (D), the DSH allotment for the State for the previous fiscal year increased by 19.5 percent; and (ii)any subsequent fiscal year shall be, subject to subparagraph (D), the DSH allotment for the State for the previous fiscal year subject to an increase for inflation as provided in paragraph (3)(A). (D)

Limitation on increases to amount available from DSH redistribution pool

If the Secretary estimates for a fiscal year (beginning with fiscal year 2009) that— (i)the amount of additional expenditures in the fiscal year resulting from the application of an increase in DSH allotments under subparagraphs (B) and (C) beginning with fiscal year 2009 of 19.5 percent (instead of the application of an increase for inflation as provided in paragraph (3)(A)), exceeds (ii)the amount available for obligation from the DSH redistribution pool under paragraph (7) for the fiscal year,

the Secretary shall reduce the increase in the DSH allotments otherwise provided under such subparagraphs for the fiscal year in a pro-rata manner so that the amount of additional expenditures in the fiscal year resulting from the application of such subparagraphs is equal to the amount described in clause (ii) for the fiscal year. A reduction in a DSH allotment for a State under this subparagraph shall not affect the computation of the DSH allotment for the State under subparagraph (B) or (C) for the subsequent fiscal year.

(c)

Demonstration grants to health access networks

Such section is further amended by adding at the end the following new subsection:

(k)

Demonstration grants to health access networks

(1)

In general

From the amount of funds made available under paragraph (6)(A) for a fiscal year, the Secretary shall award demonstration grants under this subsection to health access networks for such fiscal year for the purpose of improving access, quality, and continuity of care for uninsured individuals through better coordination of care by the network. (2)

Health access network defined

(A)

In general

In this subsection, the term health access network means an entity representing a collection of safety net providers, including hospitals, community health centers, public health departments, physicians, safety net health plans, federally qualified health centers, or other recognized safety net providers, that— (i)is organized for the purpose of restructuring and improving the access, quality, and continuity of care to the uninsured and underinsured; and (ii)offers patients access to all levels of care, including primary, outpatient, specialty, certain ancillary services, and acute inpatient care, within a community or across a broad spectrum of providers across a service region or State. (B)

Inclusion of section 330 networks and plans

Such term includes networks and plans that meet the requirements for funding under section 330(e)(1)(C) of the Public Health Service Act (42 U.S.C. 254b(e)(1)(C)). (C)

Inclusion of integrated health care systems

(i)

In general

Such term also includes an integrated health care system (including a pediatric system). (ii)

Definition

For purposes of this subparagraph, the term integrated health care system (including a pediatric system) means a health care provider that— (I)is organized to provide care in a coordinated fashion; and (II)assures access to a full range of primary, specialty, and hospital care, to uninsured and under-insured individuals, as appropriate. (3)

Application and plan requirement

(A)

In general

In order to be eligible for a grant under this subsection, a health access network shall— (i)submit an application, in such form and manner as the Secretary shall specify; (ii)submit with such application a plan that meets the requirements of subparagraph (B); (iii)identify in such plan measurable performance targets for at least 3 of the goals described in subparagraph (B); and (iv)agree that a portion of the payment of grant funds for patient care services after the first year for which such payment is made shall be contingent upon the health access network demonstrating success in achieving such targets. (B)

Plan requirements

A health access network that desires a grant under this subsection shall submit a plan to the Secretary that details how the network intends through the grant— (i)to manage costs associated with the provision of health care services to uninsured and underinsured individuals served by the network; (ii)to improve access to, and the availability of, health care services provided to uninsured and underinsured individuals served by the network; (iii)to enhance the quality and coordination of health care services provided to uninsured and underinsured individuals served by the network; (iv)to improve the health status of uninsured and underinsured individuals served by the network; and (v)to reduce health disparities in the population of uninsured and underinsured individuals served by the network.

Nothing in this paragraph shall be construed as requiring a health access network operating in a State to operate on a Statewide basis or otherwise to serve all uninsured and underinsured individuals in area served.

(C)

Authority to limit number of grants

In awarding grants under this subsection, the Secretary may limit the grants in a manner so that each grantee is able to provide patient care services to the number of uninsured individuals specified by each network in its grant application. (4)

Use of funds

(A)

In general

A health access network that receives funds under a grant under this subsection shall expend an amount equal to at least 90 percent of such funds for the provision of (or payment for) direct patient care services. (B)

Rule of construction regarding direct patient care services

For purposes of subparagraph (A), the term direct patient care services means, with respect to a health access network, services, such as specialty medical care and diagnostic services, that are not available or are insufficiently available through the network's providers other than under a grant under this subsection. (C)

Preference for services through safety net providers

In purchasing direct patient care services for uninsured and underinsured individuals under a grant under this subsection, health access networks shall, to the maximum extent feasible, endeavor to purchase such services from safety net providers. (5)

Supplement, not supplant

Funds paid to a health access network under a grant under this subsection shall supplement and not supplant, other Federal or State payments that are made to the network to support the provision of health care services to low-income or uninsured patients. (6)

Funding

(A)

Availability of funds from DSH redistribution pool

To carry out this subsection there is hereby made available for each fiscal year (beginning with fiscal year 2009 and ending with fiscal year 2013) and appropriated from the DSH redistribution pool established under subsection (d)(7), an amount equal to— (i)the amount available for obligation from such pool in such fiscal year, reduced by (ii)the Secretary’s estimate of the aggregate increase in Federal financial participation under this title for the fiscal year that will be attributable to the amendments made by section 2(b) of the Strengthening the Safety Net Act of 2008. (B)

Treatment of grant funds

Payments to a health access network under a grant under this subsection shall not be treated as a disproportionate share hospital payment adjustments under this section and shall not be counted against the DSH allotment for any State. (C)

No State matching required

Nothing in this subsection shall be construed as requiring a State to provide for any State matching funds to receive funds under this subsection. (D)

Availability

The amount of any grant to a health access network under this subsection shall remain available for expenditure under the grant through the end of the third fiscal year after the fiscal year in which the grant is made.

(d)

Conforming date of application of DSH hospital requirement to availability of funding for low DSH States

Subsection (d)(2)(A)(ii) of such section is amended by inserting before the period at the end the following: (or, in the case of a low DSH State described in subparagraph (B) or (C) of subsection (f)(5), the date of the enactment of the Strengthening the Safety Net Act of 2008). (e)

Effective date

The amendments made by this section shall apply beginning with fiscal year 2009.