[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1262 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1262

 To amend title VII of the Public Health Service Act and titles XVIII 
and XIX of the Social Security Act to provide additional resources for 
primary care services, to create new payment models for services under 
 Medicare, to expand provision of non-institutionally-based long-term 
                   services, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 15, 2009

 Ms. Cantwell introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend title VII of the Public Health Service Act and titles XVIII 
and XIX of the Social Security Act to provide additional resources for 
primary care services, to create new payment models for services under 
 Medicare, to expand provision of non-institutionally-based long-term 
                   services, 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 ``Medical Efficiency and Delivery 
Improvement of Care Act (MEDIC) of 2009''.

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--LOAN PROGRAM PROVISIONS

Sec. 1001. Short title.
Sec. 1002. Hospital residency loan program.
                   TITLE II--PRIMARY CARE PROVISIONS

Sec. 2001. Short title.
Sec. 2002. Findings.
Sec. 2003. Definitions.
                     Subtitle A--Medical Education

Sec. 2101. Recruitment incentives.
Sec. 2102. Debt forgiveness, scholarships, and service obligations.
Sec. 2103. Deferment of loans during residency and internships.
Sec. 2104. Educating medical students about primary care careers.
Sec. 2105. Training in family medicine, general internal medicine, 
                            general geriatrics, general pediatrics, 
                            physician assistant education, general 
                            dentistry, and pediatric dentistry.
Sec. 2106. Increased funding for National Health Service Corps 
                            Scholarship and loan repayment programs.
                Subtitle B--Medicaid Related Provisions

Sec. 2201. Transformation grants to support patient-centered medical 
                            homes under Medicaid and CHIP.
                    Subtitle C--Medicare Provisions

                          Part I--Primary Care

Sec. 2301. Reforming payment systems under Medicare to support primary 
                            care.
Sec. 2302. Coverage of patient-centered medical home services.
Sec. 2303. Medicare primary care payment equity and access provision.
Sec. 2304. Additional incentive payment program for primary care 
                            services furnished in health professional 
                            shortage areas.
Sec. 2305. Permanent extension of Medicare incentive payment program 
                            for physician scarcity areas.
Sec. 2306. HHS study and report on the process for determining relative 
                            value under the Medicare physician fee 
                            schedule.
                      Part II--Preventive Services

Sec. 2311. Eliminating time restriction for initial preventive physical 
                            examination.
Sec. 2312. Elimination of cost-sharing for preventive benefits under 
                            the Medicare program.
Sec. 2313. HHS study and report on facilitating the receipt of Medicare 
                            preventive services by Medicare 
                            beneficiaries.
                       Part III--Other Provisions

Sec. 2321. HHS study and report on improving the ability of physicians 
                            and primary care providers to assist 
                            Medicare beneficiaries in obtaining needed 
                            prescriptions under Medicare part D.
Sec. 2322. HHS study and report on improved patient care through 
                            increased caregiver and physician 
                            interaction.
Sec. 2323. Improved patient care through expanded support for limited 
                            English proficiency (LEP) services.
Sec. 2324. HHS study and report on use of real-time Medicare claims 
                            adjudication.
Sec. 2325. Ongoing assessment by MedPAC of the impact of Medicare 
                            payments on primary care access and equity.
Sec. 2326. Distribution of additional residency positions.
Sec. 2327. Counting resident time in outpatient settings.
Sec. 2328. Rules for counting resident time for didactic and scholarly 
                            activities and other activities.
Sec. 2329. Preservation of resident cap positions from closed and 
                            acquired hospitals.
Sec. 2330. Quality improvement organization assistance for physician 
                            practices seeking to be patient-centered 
                            medical home practices.
                          Subtitle D--Studies

Sec. 2401. Study concerning the designation of primary care as a 
                            shortage profession.
Sec. 2402. Study concerning the education debt of medical school 
                            graduates.
Sec. 2403. Study on minority representation in primary care.
                 TITLE III--MEDICARE PAYMENT PROVISIONS

Sec. 3001. Short title.
Sec. 3002. Findings.
Sec. 3003. Value index under the Medicare physician fee schedule.
                TITLE IV--LONG-TERM SERVICES PROVISIONS

Sec. 4001. Short title.
                    Subtitle A--Balancing Incentives

Sec. 4101. Enhanced FMAP for expanding the provision of non-
                            institutionally-based long-term services 
                            and supports.
 Subtitle B--Strengthening the Medicaid Home and Community-Based State 
                         Plan Amendment Option

Sec. 4201. Removal of barriers to providing home and community-based 
                            services under State plan amendment option 
                            for individuals in need.
Sec. 4202. Mandatory application of spousal impoverishment protections 
                            to recipients of home and community-based 
                            services.
Sec. 4203. State authority to elect to exclude up to 6 months of 
                            average cost of nursing facility services 
                            from assets or resources for purposes of 
                            eligibility for home and community-based 
                            services.
      Subtitle C--Coordination of Home and Community-Based Waivers

Sec. 4301. Streamlined process for combined waivers under subsections 
                            (b) and (c) of section 1915.
         TITLE V--HOME AND COMMUNITY-BASED SERVICES PROVISIONS

Sec. 5001. Short title.
Sec. 5002. Long-term services and supports.

                    TITLE I--LOAN PROGRAM PROVISIONS

SEC. 1001. SHORT TITLE.

    This title may be cited as the ``Physician Workforce Enhancement 
Act of 2009''.

SEC. 1002. HOSPITAL RESIDENCY LOAN PROGRAM.

    Subpart 2 of part E of title VII of the Public Health Service Act 
is amended by adding at the end the following new section:

``SEC. 771. HOSPITAL RESIDENCY LOAN PROGRAM.

    ``(a) Establishment.--Not later than January 1, 2010, the 
Secretary, acting through the Administrator of the Health Resources and 
Services Administration, shall establish a loan program that provides 
loans to eligible hospitals to establish residency training programs.
    ``(b) Application.--No loan may be provided under this section to 
an eligible hospital except pursuant to an application that is 
submitted and approved in a time, manner, and form specified by the 
Administrator of the Health Resources and Services Administration. A 
loan under this section shall be on such terms and conditions and meet 
such requirements as the Administrator determines appropriate, in 
accordance with the provisions of this section.
    ``(c) Eligibility; Preference for Rural and Small Urban Areas.--
            ``(1) Eligible hospital defined.--For purposes of this 
        section, an `eligible hospital' means, with respect to a loan 
        under this section, a hospital that, as of the date of the 
        submission of an application under subsection (b), meets, to 
        the satisfaction of the Administrator of the Health Resources 
        and Services Administration, each of the following criteria:
                    ``(A) The hospital does not operate a residency 
                training program, has not previously operated such a 
                program, and has not taken any significant action, such 
                as the expenditure of a material amount of funds, 
                before July 1, 2009, to establish such a program.
                    ``(B) The hospital has secured initial 
                accreditation by the American Council for Graduate 
                Medical Education or the American Osteopathic 
                Association.
                    ``(C) The hospital provides assurances to the 
                satisfaction of the Administrator of the Health 
                Resources and Services Administration that such loan 
                shall be used, consistent with subsection (d), only for 
                the purposes of establishing and conducting an 
                allopathic or osteopathic physician residency training 
                program in at least one of the following medical 
                specialties, or a combination of the following:
                            ``(i) Family medicine.
                            ``(ii) Internal medicine.
                            ``(iii) Emergency medicine.
                            ``(iv) Obstetrics or gynecology.
                            ``(v) General surgery.
                            ``(vi) Preventive Medicine.
                            ``(vii) Pediatrics.
                            ``(viii) Behavioral and Mental Health.
                    ``(D) The hospital enters into an agreement with 
                the Administrator that certifies the hospital will 
                provide for the repayment of the loan in accordance 
                with subsection (e).
            ``(2) Preference for rural and small areas.--In making 
        loans under this section, the Administrator of the Health 
        Resources and Services Administration shall give preference to 
        any applicant for such a loan that is a hospital located in a 
        rural areas (as such term is defined in section 1886(d)(2)(D) 
        of the Social Security Act) or an urban area that is not a 
        large urban area (as such terms are respectively defined in 
        such section).
    ``(d) Permissible Uses of Loan Funds.--A loan provided under this 
section shall be used, with respect to a residency training program, 
only for costs directly attributable to the residency training program, 
except as otherwise provided by the Administrator of the Health 
Resources and Services Administration.
    ``(e) Repayment of Loans.--
            ``(1) Repayment plans.--For purposes of subsection 
        (c)(1)(D), a repayment plan for an eligible hospital is in 
        accordance with this subsection if it provides for the 
        repayment of the loan amount in installments, in accordance 
        with a schedule that is agreed to by the Administrator of the 
        Health Resources and Services Administration and the hospital 
        and that is in accordance with this subsection.
            ``(2) Commencement of repayment.--Repayment by an eligible 
        hospital of a loan under this section shall commence not later 
        than the date that is 18 months after the date on which the 
        loan amount is disbursed to such hospital.
            ``(3) Repayment period.--A loan made under this section 
        shall be fully repaid not later than the date that is 24 months 
        after the date on which the repayment is required to commence.
            ``(4) Loan payable in full if residency training program 
        canceled.--In the case that an eligible hospital borrows a loan 
        under this section, with respect to a residency training 
        program, and terminates such program before the date on which 
        such loan has been fully repaid in accordance with a plan under 
        paragraph (1), such loan shall be payable by the hospital not 
        later than 45 days after the date of such termination.
    ``(f) No Interest Charged.--The Administrator of the Health 
Resources and Services Administration may not charge or collect 
interest on any loan made under this section.
    ``(g) Limitation on Total Amount of Loan.--The cumulative dollar 
amount of a loan made to an eligible hospital under this section may 
not exceed $1,000,000.
    ``(h) Penalties.--The Administrator of the Health Resources and 
Services Administration shall establish penalties to which an eligible 
hospital receiving a loan under this section would be subject if such 
hospital is in violation of any of the criteria described in subsection 
(c)(1).
    ``(i) Reports.--Not later than January 1, 2014, and annually 
thereafter (before January 2, 2020), the Administrator of the Health 
Resources and Services Administration shall submit to Congress a report 
on the efficacy of the program under this section in increasing the 
number of residents practicing in each medical specialty described in 
subsection (c)(1)(C) during such year and the extent to which the 
program resulted in an increase in the number of available 
practitioners in each of such medical specialties that serve medically 
underserved populations.
    ``(j) Funding.----
            ``(1) Authorization of appropriations.--For the purpose of 
        providing amounts for loans under this section, there are 
        authorized to be appropriated $25,000,000 for the period of 
        fiscal years 2010 through 2020.
            ``(2) Availability.--Amounts appropriated under paragraph 
        (1) shall remain available until expended.
            ``(3) Repaid loan amounts.--Any amount repaid by, or 
        recovered from, an eligible hospital under this section on or 
        before the date of termination described in subsection (k) 
        shall be credited to the appropriation account from which the 
        loan amount involved was originally paid. Any amount repaid by, 
        or recovered from, such a hospital under this section after 
        such date shall be credited to the general fund in the 
        Treasury.
    ``(k) Termination of Program.--No loan may be made under this 
section after December 31, 2019.''.

                   TITLE II--PRIMARY CARE PROVISIONS

SEC. 2001. SHORT TITLE.

    This title may be cited as the ``Preserving Patient Access to 
Primary Care Act of 2009''.

SEC. 2002. FINDINGS.

    Congress makes the following findings:
            (1) Approximately 21 percent of physicians who were board 
        certified in general internal medicine during the early 1990s 
        have left internal medicine, compared to a 5 percent departure 
        rate for those who were certified in subspecialties of internal 
        medicine.
            (2) The number of United States medical graduates going 
        into family medicine has fallen by more than 50 percent from 
        1997 to 2005.
            (3) In 2007, only 88 percent of the available medicine 
        residency positions were filled and only 42 percent of those 
        were filled by United States medical school graduates.
            (4) In 2006, only 24 percent of third-year internal 
        medicine resident intended to pursue careers in general 
        internal medicine, down from 54 percent in 1998.
            (5) Primary care physicians serve as the point of first 
        contact for most patients and are able to coordinate the care 
        of the whole person, reducing unnecessary care and duplicative 
        testing.
            (6) Primary care physicians and primary care providers 
        practicing preventive care, including screening for illness and 
        treating diseases, can help prevent complications that result 
        in more costly care.
            (7) Patients with primary care physicians or primary care 
        providers have lower health care expenditures and primary care 
        is correlated with better health status, lower overall 
        mortality, and longer life expectancy.
            (8) Higher proportions of primary care physicians are 
        associated with significantly reduced utilization.
            (9) The United States has a higher ratio of specialists to 
        primary care physicians than other industrialized nations and 
        the population of the United States is growing faster than the 
        expected rate of growth in the supply of primary care 
        physicians.
            (10) The number of Americans age 65 and older, those 
        eligible for Medicare and who use far more ambulatory care 
        visits per person as those under age 65, is expected to double 
        from 2000 to 2030.
            (11) A decrease in Federal spending to carry out programs 
        authorized by title VII of the Public Health Service Act 
        threatens the viability of one of the programs used to solve 
        the problem of inadequate access to primary care.
            (12) The National Health Service Corps program has a proven 
        record of supplying physicians to underserved areas, and has 
        played an important role in expanding access for underserved 
        populations in rural and inner city communities.
            (13) Individuals in many geographic areas, especially rural 
        areas, lack adequate access to high quality preventive, primary 
        health care, contributing to significant health disparities 
        that impair America's public health and economic productivity.
            (14) About 20 percent of the population of the United 
        States resides in primary medical care Health Professional 
        Shortage Areas.

SEC. 2003. DEFINITIONS.

    (a) General Definitions.--In this title:
            (1) Chronic care coordination.--The term ``chronic care 
        coordination'' means the coordination of services that is based 
        on the Chronic Care Model that provides on-going health care to 
        patients with chronic diseases that may include any of the 
        following services:
                    (A) The development of an initial plan of care, and 
                subsequent appropriate revisions to such plan of care.
                    (B) The management of, and referral for, medical 
                and other health services, including interdisciplinary 
                care conferences and management with other providers.
                    (C) The monitoring and management of medications.
                    (D) Patient education and counseling services.
                    (E) Family caregiver education and counseling 
                services.
                    (F) Self-management services, including health 
                education and risk appraisal to identify behavioral 
                risk factors through self-assessment.
                    (G) Providing access by telephone with physicians 
                and other appropriate health care professionals, 
                including 24-hour availability of such professionals 
                for emergencies.
                    (H) Management with the principal nonprofessional 
                caregiver in the home.
                    (I) Managing and facilitating transitions among 
                health care professionals and across settings of care, 
                including the following:
                            (i) Pursuing the treatment option elected 
                        by the individual.
                            (ii) Including any advance directive 
                        executed by the individual in the medical file 
                        of the individual.
                    (J) Information about, and referral to, hospice 
                care, including patient and family caregiver education 
                and counseling about hospice care, and facilitating 
                transition to hospice care when elected.
                    (K) Information about, referral to, and management 
                with, community services.
            (2) Critical shortage health facility.--The term ``critical 
        shortage health facility'' means a public or private nonprofit 
        health facility that does not serve a health professional 
        shortage area (as designated under section 332 of the Public 
        Health Service Act), but that has a critical shortage of 
        physicians (as determined by the Secretary) in a primary care 
        field.
            (3) Physician.--The term physician has the meaning given 
        such term in section 1861(r)(1) of the Social Security Act.
            (4) Primary care.--The term ``primary care'' means the 
        provision of integrated, high-quality, accessible health care 
        services by health care providers who are accountable for 
        addressing a full range of personal health and health care 
        needs, developing a sustained partnership with patients, 
        practicing in the context of family and community, and working 
        to minimize disparities across population subgroups.
            (5) Primary care field.--The term ``primary care field'' 
        means any of the following fields:
                    (A) The field of family medicine.
                    (B) The field of general internal medicine.
                    (C) The field of geriatric medicine.
                    (D) The field of pediatric medicine
            (6) Primary care physician.--The term ``primary care 
        physician'' means a physician who is trained in a primary care 
        field who provides first contact, continuous, and comprehensive 
        care to patients.
            (7) Primary care provider.--The term ``primary care 
        provider'' means--
                    (A) a nurse practitioner; or
                    (B) a physician assistant practicing as a member of 
                a physician-directed team;
        who provides first contact, continuous, and comprehensive care 
        to patients.
            (8) Principal care.--The term ``principal care'' means 
        integrated, accessible health care that is provided by a 
        physician who is a medical subspecialist that addresses the 
        majority of the personal health care needs of patients with 
        chronic conditions requiring the subspecialist's expertise, and 
        for whom the subspecialist assumes care management, developing 
        a sustained physician-patient partnership and practicing within 
        the context of family and community.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
    (b) Primary Medical Care Shortage Area.--
            (1) In general.--In this title, the term ``primary medical 
        care shortage area'' or ``PMCSA'' means a geographic area with 
        a shortage of physicians (as designated by the Secretary) in a 
        primary care field, as designated in accordance with paragraph 
        (2).
            (2) Designation.--To be designated by the Secretary as a 
        PMCSA, the Secretary must find that the geographic area 
        involved has an established shortage of primary care physicians 
        for the population served. The Secretary shall make such a 
        designation with respect to an urban or rural geographic area 
        if the following criteria are met:
                    (A) The area is a rational area for the delivery of 
                primary care services.
                    (B) One of the following conditions prevails within 
                the area:
                            (i) The area has a population to full-time-
                        equivalent primary care physician ratio of at 
                        least 3,500 to 1.
                            (ii) The area has a population to full-
                        time-equivalent primary care physician ratio of 
                        less than 3,500 to 1 and has unusually high 
                        needs for primary care services or insufficient 
                        capacity of existing primary care providers.
                    (C) Primary care providers in contiguous geographic 
                areas are overutilized.
    (c) Medically Underserved Area.--
            (1) In general.--In this title, the term ``medically 
        underserved area'' or ``MUA'' means a rational service area 
        with a demonstrable shortage of primary healthcare resources 
        relative to the needs of the entire population within the 
        service area as determined in accordance with paragraph (2) 
        through the use of the Index of Medical Underservice (referred 
        to in this subsection as the ``IMU'') with respect to data on a 
        service area.
            (2) Determinations.--Under criteria to be established by 
        the Secretary with respect to the IMU, if a service area is 
        determined by the Secretary to have a score of 62.0 or less, 
        such area shall be eligible to be designated as a MUA.
            (3) IMU variables.--In establishing criteria under 
        paragraph (2), the Secretary shall ensure that the following 
        variables are utilized:
                    (A) The ratio of primary medical care physicians 
                per 1,000 individuals in the population of the area 
                involved.
                    (B) The infant mortality rate in the area involved.
                    (C) The percentage of the population involved with 
                incomes below the poverty level.
                    (D) The percentage of the population involved age 
                65 or over.
        The value of each of such variables for the service area 
        involved shall be converted by the Secretary to a weighted 
        value, according to established criteria, and added together to 
        obtain the area's IMU score.
    (d) Patient-Centered Medical Home.--
            (1) In general.--In this title, the term ``patient-centered 
        medical home'' means a physician-directed practice (or a nurse 
        practitioner directed practice in those States in which such 
        functions are included in the scope of practice of licensed 
        nurse practitioners) that has been certified by an organization 
        under paragraph (3) as meeting the following standards:
                    (A) The practice provides patients who elect to 
                obtain care through a patient-centered medical home 
                (referred to as ``participating patients'') with direct 
                and ongoing access to a primary or principal care 
                physician or a primary care provider who accepts 
                responsibility for providing first contact, continuous, 
                and comprehensive care to the whole person, in 
                collaboration with teams of other health professionals, 
                including nurses and specialist physicians, as needed 
                and appropriate.
                    (B) The practice applies standards for access to 
                care and communication with participating 
                beneficiaries.
                    (C) The practice has readily accessible, clinically 
                useful information on participating patients that 
                enables the practice to treat such patients 
                comprehensively and systematically.
                    (D) The practice maintains continuous relationships 
                with participating patients by implementing evidence-
                based guidelines and applying such guidelines to the 
                identified needs of individual beneficiaries over time 
                and with the intensity needed by such beneficiaries.
            (2) Recognition of ncqa approval.--Such term also includes 
        a physician-directed (or nurse-practitioner-directed) practice 
        that has been recognized as a medical home through the 
        Physician Practice Connections--patient-centered Medical Home 
        (``PPC--PCMH'') voluntary recognition process of the National 
        Committee for Quality Assurance.
            (3) Standard setting and qualification process for medical 
        homes.--The Secretary shall establish a process for the 
        selection of a qualified standard setting and certification 
        organization--
                    (A) to establish standards, consistent with this 
                subsection, to enable medical practices to qualify as 
                patient-centered medical homes; and
                    (B) to provide for the review and certification of 
                medical practices as meeting such standards.
            (4) Treatment of certain practices.--Nothing in this 
        section shall be construed as preventing a nurse practitioner 
        from leading a patient-centered medical home so long as--
                    (A) all of the requirements of this section are 
                met; and
                    (B) the nurse practitioner is acting consistently 
                with State law.
    (e) Application Under Medicare, Medicaid, PHSA, etc.--Unless 
otherwise provided, the provisions of the previous subsections shall 
apply for purposes of provisions of the Social Security Act, the Public 
Health Service Act, and any other Act amended by this title.

                     Subtitle A--Medical Education

SEC. 2101. RECRUITMENT INCENTIVES.

    Title VII of the Higher Education Act of 1965 (20 U.S.C. 1133 et 
seq.) is amended by adding at the end the following:

          ``PART VI--MEDICAL EDUCATION RECRUITMENT INCENTIVES

``SEC. 786. MEDICAL EDUCATION RECRUITMENT INCENTIVES.

    ``(a) In General.--The Secretary is authorized to award grants or 
contracts to institutions of higher education that are graduate medical 
schools, to enable the graduate medical schools to improve primary care 
education and training for medical students.
    ``(b) Application.--A graduate medical school that desires to 
receive a grant under this section shall submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require.
    ``(c) Uses of Funds.--A graduate medical school that receives a 
grant under this section shall use such grant funds to carry out 1 or 
more of the following:
            ``(1) The creation of primary care mentorship programs.
            ``(2) Curriculum development for population-based primary 
        care models of care, such as the patient-centered medical home.
            ``(3) Increased opportunities for ambulatory, community-
        based training.
            ``(4) Development of generalist curriculum to enhance care 
        for rural and underserved populations in primary care or 
        general surgery.
    ``(d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $50,000,000 for each of the 
fiscal years 2010 through 2012.''.

SEC. 2102. DEBT FORGIVENESS, SCHOLARSHIPS, AND SERVICE OBLIGATIONS.

    (a) Purpose.--It is the purpose of this section to encourage 
individuals to enter and continue in primary care physician careers.
    (b) Amendment to the Public Health Service Act.--Part D of title 
III of the Public Health Service Act (42 U.S.C. 254b et seq.) is 
amended by adding at the end the following:

              ``Subpart XX--Primary Care Medical Education

``SEC. 340A. SCHOLARSHIPS.

    ``(a) In General.--The Secretary, acting through the Administrator 
of the Health Resources and Services Administration, shall award grants 
to critical shortage health facilities to enable such facilities to 
provide scholarships to individuals who agree to serve as physicians at 
such facilities after completing a residency in a primary care field 
(as defined in section 3(a)(5) of the Preserving Patient Access to 
Primary Care Act of 2009).
    ``(b) Scholarships.--A health facility shall use amounts received 
under a grant under this section to enter into contracts with eligible 
individuals under which--
            ``(1) the facility agrees to provide the individual with a 
        scholarship for each school year (not to exceed 4 school years) 
        in which the individual is enrolled as a full-time student in a 
        school of medicine or a school of osteopathic medicine; and
            ``(2) the individual agrees--
                    ``(A) to maintain an acceptable level of academic 
                standing;
                    ``(B) to complete a residency in a primary care 
                field; and
                    ``(C) after completing the residency, to serve as a 
                primary care physician at such facility in such field 
                for a time period equal to the greater of--
                            ``(i) one year for each school year for 
                        which the individual was provided a scholarship 
                        under this section; or
                            ``(ii) two years.
    ``(c) Amount.--
            ``(1) In general.--The amount paid by a health facility to 
        an individual under a scholarship under this section shall not 
        exceed $35,000 for any school year.
            ``(2) Considerations.--In determining the amount of a 
        scholarship to be provided to an individual under this section, 
        a health facility may take into consideration the individual's 
        financial need, geographic differences, and educational costs.
            ``(3) Exclusion from gross income.--For purposes of the 
        Internal Revenue Code of 1986, gross income shall not include 
        any amount received as a scholarship under this section.
    ``(d) Application of Certain Provisions.--The provisions of subpart 
III of part D shall, except as inconsistent with this section, apply to 
the program established in subsection (a) in the same manner and to the 
same extent as such provisions apply to the National Health Service 
Corps Scholarship Program established in such subpart.
    ``(e) Definitions.--In this section:
            ``(1) Critical shortage health facility.--The term 
        `critical shortage health facility' means a public or private 
        nonprofit health facility that does not serve a health 
        professional shortage area (as designated under section 332), 
        but has a critical shortage of physicians (as determined by the 
        Secretary) in a primary care field.
            ``(2) Eligible individual.--The term `eligible individual' 
        means an individual who is enrolled, or accepted for 
        enrollment, as a full-time student in an accredited school of 
        medicine or school of osteopathic medicine.

``SEC. 340B. LOAN REPAYMENT PROGRAM.

    ``(a) Purpose.--It is the purpose of this section to alleviate 
critical shortages of primary care physicians and primary care 
providers.
    ``(b) Loan Repayments.--The Secretary, acting through the 
Administrator of the Health Resources and Services Administration, 
shall establish a program of entering into contracts with eligible 
individuals under which--
            ``(1) the individual agrees to serve--
                    ``(A) as a primary care physician or primary care 
                provider in a primary care field; and
                    ``(B) in an area that is not a health professional 
                shortage area (as designated under section 332), but 
                has a critical shortage of primary care physicians and 
                primary care providers (as determined by the Secretary) 
                in such field; and
            ``(2) the Secretary agrees to pay, for each year of such 
        service, not more than $35,000 of the principal and interest of 
        the undergraduate or graduate educational loans of the 
        individual.
    ``(c) Service Requirement.--A contract entered into under this 
section shall allow the individual receiving the loan repayment to 
satisfy the service requirement described in subsection (a)(1) through 
employment in a solo or group practice, a clinic, a public or private 
nonprofit hospital, or any other appropriate health care entity.
    ``(d) Application of Certain Provisions.--The provisions of subpart 
III of part D shall, except as inconsistent with this section, apply to 
the program established in subsection (a) in the same manner and to the 
same extent as such provisions apply to the National Health Service 
Corps Scholarship Program established in such subpart.
    ``(e) Definition.--In this section, the term `eligible individual' 
means--
            ``(1) an individual with a degree in medicine or 
        osteopathic medicine; or
            ``(2) a primary care provider (as defined in section 
        3(a)(7) of the Preserving Patient Access to Primary Care Act of 
        2009).

``SEC. 340C. LOAN REPAYMENTS FOR PHYSICIANS IN THE FIELDS OF OBSTETRICS 
              AND GYNECOLOGY AND CERTIFIED NURSE MIDWIVES.

    ``(a) Purpose.--It is the purpose of this section to alleviate 
critical shortages of physicians in the fields of obstetrics and 
gynecology and certified nurse midwives.
    ``(b) Loan Repayments.--The Secretary, acting through the 
Administrator of the Health Resources and Services Administration, 
shall establish a program of entering into contracts with eligible 
individuals under which--
            ``(1) the individual agrees to serve--
                    ``(A) as a physician in the field of obstetrics and 
                gynecology or as a certified nurse midwife; and
                    ``(B) in an area that is not a health professional 
                shortage area (as designated under section 332), but 
                has a critical shortage of physicians in the fields of 
                obstetrics and gynecology or certified nurse midwives 
                (as determined by the Secretary), respectively; and
            ``(2) the Secretary agrees to pay, for each year of such 
        service, not more than $35,000 of the principal and interest of 
        the undergraduate or graduate educational loans of the 
        individual.
    ``(c) Service Requirement.--A contract entered into under this 
section shall allow the individual receiving the loan repayment to 
satisfy the service requirement described in subsection (a)(1) through 
employment in a solo or group practice, a clinic, a public or private 
nonprofit hospital, or any other appropriate health care entity.
    ``(d) Application of Certain Provisions.--The provisions of subpart 
III of part D shall, except as inconsistent with this section, apply to 
the program established in subsection (a) in the same manner and to the 
same extent as such provisions apply to the National Health Service 
Corps Scholarship Program established in such subpart.
    ``(e) Definition.--In this section, the term `eligible individual' 
means--
            ``(1) a physician in the field of obstetrics and 
        gynecology; or
            ``(2) a certified nurse midwife.

``SEC. 340D. REPORTS.

    ``Not later than 18 months after the date of enactment of this 
section, and annually thereafter, the Secretary shall submit to 
Congress a report that describes the programs carried out under this 
subpart, including statements concerning--
            ``(1) the number of enrollees, scholarships, loan 
        repayments, and grant recipients;
            ``(2) the number of graduates;
            ``(3) the amount of scholarship payments and loan 
        repayments made;
            ``(4) which educational institution the recipients 
        attended;
            ``(5) the number and placement location of the scholarship 
        and loan repayment recipients at health care facilities with a 
        critical shortage of primary care physicians;
            ``(6) the default rate and actions required;
            ``(7) the amount of outstanding default funds of both the 
        scholarship and loan repayment programs;
            ``(8) to the extent that it can be determined, the reason 
        for the default;
            ``(9) the demographics of the individuals participating in 
        the scholarship and loan repayment programs;
            ``(10) the justification for the allocation of funds 
        between the scholarship and loan repayment programs; and
            ``(11) an evaluation of the overall costs and benefits of 
        the programs.

``SEC. 340E. AUTHORIZATION OF APPROPRIATIONS.

    ``To carry out sections 340I, 340J, and 340K there are authorized 
to be appropriated $55,000,000 for fiscal year 2010, $90,000,000 for 
fiscal year 2011, and $125,000,000 for fiscal year 2012, to be used 
solely for scholarships and loan repayment awards for primary care 
physicians and primary care providers.''.

SEC. 2103. DEFERMENT OF LOANS DURING RESIDENCY AND INTERNSHIPS.

    (a) Loan Requirements.--Section 427(a)(2)(C)(i) of the Higher 
Education Act of 1965 (20 U.S.C. 1077(a)(2)(C)(i)) is amended by 
inserting ``unless the medical internship or residency program is in a 
primary care field (as defined in section 3(a)(5) of the Preserving 
Patient Access to Primary Care Act of 2009)'' after ``residency 
program''.
    (b) FFEL Loans.--Section 428(b)(1)(M)(i) of the Higher Education 
Act of 1965 (20 U.S.C. 1078(b)(1)(M)(i)) is amended by inserting 
``unless the medical internship or residency program is in a primary 
care field (as defined in section 3(a)(5) of the Preserving Patient 
Access to Primary Care Act of 2009)'' after ``residency program''.
    (c) Federal Direct Loans.--Section 455(f)(2)(A) of the Higher 
Education Act of 1965 (20 U.S.C. 1087e(f)(2)(A)) is amended by 
inserting ``unless the medical internship or residency program is in a 
primary care field (as defined in section 3(a)(5) of the Preserving 
Patient Access to Primary Care Act of 2009)'' after ``residency 
program''.
    (d) Federal Perkins Loans.--Section 464(c)(2)(A)(i) of the Higher 
Education Act of 1965 (20 U.S.C. 1087dd(c)(2)(A)(i)) is amended by 
inserting ``unless the medical internship or residency program is in a 
primary care field (as defined in section 3(a)(5) of the Preserving 
Patient Access to Primary Care Act of 2009)'' after ``residency 
program''.

SEC. 2104. EDUCATING MEDICAL STUDENTS ABOUT PRIMARY CARE CAREERS.

    Part C of title VII of the Public Health Service Act (42 U.S.C. 
293k) is amended by adding at the end the following:

``SEC. 749. EDUCATING MEDICAL STUDENTS ABOUT PRIMARY CARE CAREERS.

    ``(a) In General.--The Secretary shall award grants to eligible 
State and local government entities for the development of 
informational materials that promote careers in primary care by 
highlighting the advantages and rewards of primary care, and that 
encourage medical students, particularly students from disadvantaged 
backgrounds, to become primary care physicians.
    ``(b) Announcement.--The grants described in subsection (a) shall 
be announced through a publication in the Federal Register and through 
appropriate media outlets in a manner intended to reach medical 
education institutions, associations, physician groups, and others who 
communicate with medical students.
    ``(c) Eligibility.--To be eligible to receive a grant under this 
section an entity shall--
            ``(1) be a State or local entity; and
            ``(2) submit to the Secretary an application at such time, 
        in such manner, and containing such information as the 
        Secretary may require.
    ``(d) Use of Funds.--
            ``(1) In general.--An entity shall use amounts received 
        under a grant under this section to support State and local 
        campaigns through appropriate media outlets to promote careers 
        in primary care and to encourage individuals from disadvantaged 
        backgrounds to enter and pursue careers in primary care.
            ``(2) Specific uses.--In carrying out activities under 
        paragraph (1), an entity shall use grants funds to develop 
        informational materials in a manner intended to reach as wide 
        and diverse an audience of medical students as possible, in 
        order to--
                    ``(A) advertise and promote careers in primary 
                care;
                    ``(B) promote primary care medical education 
                programs;
                    ``(C) inform the public of financial assistance 
                regarding such education programs;
                    ``(D) highlight individuals in the community who 
                are practicing primary care physicians; or
                    ``(E) provide any other information to recruit 
                individuals for careers in primary care.
    ``(e) Limitation.--An entity shall not use amounts received under a 
grant under this section to advertise particular employment 
opportunities.
    ``(f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, such sums as may be necessary 
for each of fiscal years 2010 through 2013.''.

SEC. 2105. TRAINING IN FAMILY MEDICINE, GENERAL INTERNAL MEDICINE, 
              GENERAL GERIATRICS, GENERAL PEDIATRICS, PHYSICIAN 
              ASSISTANT EDUCATION, GENERAL DENTISTRY, AND PEDIATRIC 
              DENTISTRY.

    Section 747(e) of the Public Health Service Act (42 U.S.C. 293k) is 
amended by striking paragraph (1) and inserting the following:
            ``(1) Authorization of appropriations.--For the purpose of 
        carrying out this section, there is authorized to be 
        appropriated $198,000,000 for each of fiscal years 2010 through 
        2012.''.

SEC. 2106. INCREASED FUNDING FOR NATIONAL HEALTH SERVICE CORPS 
              SCHOLARSHIP AND LOAN REPAYMENT PROGRAMS.

    (a) In General.--There is authorized to be appropriated 
$332,000,000 for the period of fiscal years 2010 through 2012 for the 
purpose of carrying out subpart III of part D of title III of the 
Public Health Service Act (42 U.S.C. 254l et seq.). Such authorization 
of appropriations is in addition to the authorization of appropriations 
in section 338H of such Act (42 U.S.C. 254q) and any other 
authorization of appropriations for such purpose.
    (b) Allocation.--Of the amounts appropriated under subsection (a) 
for the period of fiscal years 2010 through 2012, the Secretary shall 
obligate $96,000,000 for the purpose of providing contracts for 
scholarships and loan repayments to individuals who--
            (1) are primary care physicians or primary care providers; 
        and
            (2) have not previously received a scholarship or loan 
        repayment under subpart III of part D of title III of the 
        Public Health Service Act (42 U.S.C. 254l et seq.).

                Subtitle B--Medicaid Related Provisions

SEC. 2201. TRANSFORMATION GRANTS TO SUPPORT PATIENT-CENTERED MEDICAL 
              HOMES UNDER MEDICAID AND CHIP.

    (a) In General.--Section 1903(z) of the Social Security Act (42 
U.S.C. 1396b(z)) is amended--
            (1) in paragraph (2), by adding at the end the following 
        new subparagraph:
                    ``(G) Methods for improving the effectiveness and 
                efficiency of medical assistance provided under this 
                title and child health assistance provided under title 
                XXI by encouraging the adoption of medical practices 
                that satisfy the standards established by the Secretary 
                under paragraph (2) of section 3(d) of the Preserving 
                Patient Access to Primary Care Act of 2009 for medical 
                practices to qualify as patient-centered medical homes 
                (as defined in paragraph (1) of such section).''; and
            (2) in paragraph (4)--
                    (A) in subparagraph (A)--
                            (i) in clause (i), by striking ``and'' at 
                        the end;
                            (ii) in clause (ii), by striking the period 
                        at the end and inserting ``; and''; and
                            (iii) by inserting after clause (ii), the 
                        following new clause:
                            ``(iii) $25,000,000 for each of fiscal 
                        years 2010, 2011, and 2012.''; and
                    (B) in subparagraph (B), by striking the second and 
                third sentences and inserting the following: ``Such 
                method shall provide that 100 percent of such funds for 
                each of fiscal years 2010, 2011, and 2012 shall be 
                allocated among States that design programs to adopt 
                the innovative methods described in paragraph (2)(G), 
                with preference given to States that design programs 
                involving multipayers (including under title XVIII and 
                private health plans) test projects for implementation 
                of the elements necessary to be recognized as a 
                patient-centered medical home practice under the 
                National Committee for Quality Assurance Physicians 
                Practice Connection--PCMH module (or any other 
                equivalent process, as determined by the Secretary).''.
    (b) Effective Date.--The amendments made by this section take 
effect on October 1, 2010.

                    Subtitle C--Medicare Provisions

                          PART I--PRIMARY CARE

SEC. 2301. REFORMING PAYMENT SYSTEMS UNDER MEDICARE TO SUPPORT PRIMARY 
              CARE.

    (a) Increasing Budget Neutrality Limits Under the Physician Fee 
Schedule To Account for Anticipated Savings Resulting From Payments for 
Certain Services and the Coordination of Beneficiary Care.--Section 
1848(c)(2)(B) of the Social Security Act (42 U.S.C. 1395w-4(c)(2)(B)) 
is amended--
            (1) in clause (ii)(II), by striking ``(iv) and (v)'' and 
        inserting ``(iv), (v), and (vii)''; and
            (2) by adding at the end the following new clause:
                            ``(vii) Increase in limitation to account 
                        for certain anticipated savings.--
                                    ``(I) In general.--Effective for 
                                fee schedules established beginning 
                                with 2010, the Secretary shall increase 
                                the limitation on annual adjustments 
                                under clause (ii)(II) by an amount 
                                equal to the anticipated savings under 
                                parts A, B, and D (including any 
                                savings with respect to items and 
                                services for which payment is not made 
                                under this section) which are a result 
                                of payments for designated primary care 
                                services and comprehensive care 
                                coordination services under section 
                                1834(m) and the coverage of patient-
                                centered medical home services under 
                                section 1861(s)(2)(FF) (as determined 
                                by the Secretary).
                                    ``(II) Mechanism to determine 
                                application of increase.--The Secretary 
                                shall establish a mechanism for 
                                determining which relative value units 
                                established under this paragraph for 
                                physicians' services shall be subject 
                                to an adjustment under clause (ii)(I) 
                                as a result of the increase under 
                                subclause (I).
                                    ``(III) Additional funding as 
                                determined necessary by the 
                                secretary.--In addition to any funding 
                                that may be made available as a result 
                                of an increase in the limitation on 
                                annual adjustments under subclause (I), 
                                there shall also be available to the 
                                Secretary, for purposes of making 
                                payments under this title for new 
                                services and capabilities to improve 
                                care provided to individuals under this 
                                title and to generate efficiencies 
                                under this title, such additional funds 
                                as the Secretary determines are 
                                necessary.''.
    (b) Separate Medicare Payment for Designated Primary Care Services 
and Comprehensive Care Coordination Services.--
            (1) In general.--Section 1834 of the Social Security Act 
        (42 U.S.C. 1395m) is amended by adding at the end the following 
        new subsection:
    ``(n) Payment for Designated Primary Care Services and 
Comprehensive Care Coordination Services.--
            ``(1) In general.--The Secretary shall pay for designated 
        primary care services and comprehensive care coordination 
        services furnished to an individual enrolled under this part.
            ``(2) Payment amount.--The Secretary shall determine the 
        amount of payment for designated primary care services and 
        comprehensive care coordination services under this subsection.
            ``(3) Documentation requirements.--The Secretary shall 
        propose appropriate documentation requirements to justify 
        payments for designated primary care services and comprehensive 
        care coordination services under this subsection.
            ``(4) Definitions.--
                    ``(A) Comprehensive care coordination services.--
                The term `comprehensive care coordination services' 
                means care coordination services with procedure codes 
                established by the Secretary (as appropriate) which are 
                furnished to an individual enrolled under this part by 
                a primary care provider or principal care physician.
                    ``(B) Designated primary care services.--The term 
                `designated primary care service' means a service which 
                the Secretary determines has a procedure code which 
                involves a clinical interaction with an individual 
                enrolled under this part that is inherent to care 
                coordination, including interactions outside of a face-
                to-face encounter. Such term includes the following:
                            ``(i) Care plan oversight.
                            ``(ii) Evaluation and management provided 
                        by phone.
                            ``(iii) Evaluation and management provided 
                        using internet resources.
                            ``(iv) Collection and review of physiologic 
                        data, such as from a remote monitoring device.
                            ``(v) Education and training for patient 
                        self management.
                            ``(vi) Anticoagulation management services.
                            ``(vii) Any other service determined 
                        appropriate by the Secretary.''.
            (2) Effective date.--The amendment made by this section 
        shall apply to items and services furnished on or after January 
        1, 2010.

SEC. 2302. COVERAGE OF PATIENT-CENTERED MEDICAL HOME SERVICES.

    (a) In General.--Section 1861(s)(2) of the Social Security Act (42 
U.S.C. 1395x(s)(2)) is amended--
            (1) in subparagraph (DD), by striking ``and'' at the end;
            (2) in subparagraph (EE), by inserting ``and'' at the end; 
        and
            (3) by adding at the end the following new subparagraph:
            ``(FF) patient-centered medical home services (as defined 
        in subsection (hhh)(1));''.
    (b) Definition of Patient-Centered Medical Home Services.--Section 
1861 of the Social Security Act (42 U.S.C. 1395x) is amended by adding 
at the end the following new subsection:

                ``Patient-Centered Medical Home Services

    ``(hhh)(1) The term `patient-centered medical home services' means 
care coordination services furnished by a qualified patient-centered 
medical home.
    ``(2) The term `qualified patient-centered medical home' means a 
patient-centered medical home (as defined in section 3(d) of the 
Preserving Patient Access to Primary Care Act of 2009).''.
    (c) Monthly Fee for Patient-Centered Medical Home Services.--
Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is amended 
by adding at the end the following new subsection:
    ``(p) Monthly Fee for Patient-Centered Medical Home Services.--
            ``(1) Monthly fee.--
                    ``(A) In general.--Not later than January 1, 2012, 
                the Secretary shall establish a payment methodology for 
                patient-centered medical home services (as defined in 
                paragraph (1) of section 1861(hhh)). Under such payment 
                methodology, the Secretary shall pay qualified patient-
                centered medical homes (as defined in paragraph (2) of 
                such section) a monthly fee for each individual who 
                elects to receive patient-centered medical home 
                services at that medical home. Such fee shall be paid 
                on a prospective basis.
                    ``(B) Considerations.--The Secretary shall take 
                into account the results of the Medicare medical home 
                demonstration project under section 204 of the Medicare 
                Improvement and Extension Act of 2006 (42 U.S.C. 1395b-
                1 note; division B of Public Law 109-432) in 
                establishing the payment methodology under subparagraph 
                (A).
            ``(2) Amount of payment.--
                    ``(A) Considerations.--In determining the amount of 
                such fee, subject to paragraph (3), the Secretary shall 
                consider the following:
                            ``(i) The clinical work and practice 
                        expenses involved in providing care 
                        coordination services consistent with the 
                        patient-centered medical home model (such as 
                        providing increased access, care coordination, 
                        disease population management, and education) 
                        for which payment is not made under this 
                        section as of the date of enactment of this 
                        subsection.
                            ``(ii) Ensuring that the amount of payment 
                        is sufficient to support the acquisition, use, 
                        and maintenance of clinical information systems 
                        which--
                                    ``(I) are needed by a qualified 
                                patient-centered medical home; and
                                    ``(II) have been shown to 
                                facilitate improved outcomes through 
                                care coordination.
                            ``(iii) The establishment of a tiered 
                        monthly care management fee that provides for a 
                        range of payment depending on how advanced the 
                        capabilities of a qualified patient-centered 
                        medical home are in having the information 
                        systems needed to support care coordination.
                    ``(B) Risk-adjustment.--The Secretary shall use 
                appropriate risk-adjustment in determining the amount 
                of the monthly fee under this paragraph.
            ``(3) Funding.--
                    ``(A) In general.--The Secretary shall determine 
                the aggregate estimated savings for a calendar year as 
                a result of the implementation of this subsection on 
                reducing preventable hospital admissions, duplicate 
                testing, medication errors and drug interactions, and 
                other savings under this part and part A (including any 
                savings with respect to items and services for which 
                payment is not made under this section).
                    ``(B) Funding.--Subject to subparagraph (C), the 
                aggregate amount available for payment of the monthly 
                fee under this subsection during a calendar year shall 
                be equal to the aggregate estimated savings (as 
                determined under subparagraph (A)) for the calendar 
                year (as determined by the Secretary).
                    ``(C) Additional funding.--In the case where the 
                amount of the aggregate actual savings during the 
                preceding 3 years exceeds the amount of the aggregate 
                estimated savings (as determined under subparagraph 
                (A)) during such period, the aggregate amount available 
                for payment of the monthly fee under this subsection 
                during the calendar year (as determined under 
                subparagraph (B)) shall be increased by the amount of 
                such excess.
                    ``(D) Additional funding as determined necessary by 
                the secretary.--In addition to any funding made 
                available under subparagraphs (B) and (C), there shall 
                also be available to the Secretary, for purposes of 
                effectively implementing this subsection, such 
                additional funds as the Secretary determines are 
                necessary.
            ``(4) Performance-based bonus payments.--The Secretary 
        shall establish a process for paying a performance-based bonus 
        to qualified patient-centered medical homes which meet or 
        achieve substantial improvements in performance (as specified 
        under clinical, patient satisfaction, and efficiency benchmarks 
        established by the Secretary). Such bonus shall be in an amount 
        determined appropriate by the Secretary.
            ``(5) No effect on payments for evaluation and management 
        services.--The monthly fee under this subsection shall have no 
        effect on the amount of payment for evaluation and management 
        services under this title.''.
    (d) Coinsurance.--Section 1833(a)(1) of the Social Security Act (42 
U.S.C. 1395l(a)(1)) is amended--
            (1) by striking ``and'' before ``(W)''; and
            (2) by inserting before the semicolon at the end the 
        following: ``, and (X) with respect to patient-centered medical 
        home services (as defined in section 1861(hhh)(1)), the amount 
        paid shall be (i) in the case of such services which are 
        physicians' services, the amount determined under subparagraph 
        (N), and (ii) in the case of all other such services, 80 
        percent of the lesser of the actual charge for the service or 
        the amount determined under a fee schedule established by the 
        Secretary for purposes of this subparagraph''.
    (e) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2012.

SEC. 2303. MEDICARE PRIMARY CARE PAYMENT EQUITY AND ACCESS PROVISION.

    (a) In General.--Section 1848 of the Social Security Act (42 U.S.C. 
1395w-4), as amended by section 2302(c), is amended by adding at the 
end the following new subsection:
    ``(q) Primary Care Payment Equity and Access.--
            ``(1) In general.--Not later than January 1, 2010, the 
        Secretary shall develop a methodology, in consultation with 
        primary care physician organizations and primary care provider 
        organizations, the Medicare Payment Advisory Commission, and 
        other experts, to increase payments under this section for 
        designated evaluation and management services provided by 
        primary care physicians, primary care providers, and principal 
        care providers through 1 or more of the following:
                    ``(A) A service-specific modifier to the relative 
                value units established for such services.
                    ``(B) Service-specific bonus payments.
                    ``(C) Any other methodology determined appropriate 
                by the Secretary.
            ``(2) Inclusion of proposed criteria.--The methodology 
        developed under paragraph (1) shall include proposed criteria 
        for providers to qualify for such increased payments, including 
        consideration of--
                    ``(A) the type of service being rendered;
                    ``(B) the specialty of the provider providing the 
                service; and
                    ``(C) demonstration by the provider of voluntary 
                participation in programs to improve quality, such as 
                participation in the Physician Quality Reporting 
                Initiative (as determined by the Secretary) or 
                practice-level qualification as a patient-centered 
                medical home.
            ``(3) Funding.--
                    ``(A) Determination.--The Secretary shall determine 
                the aggregate estimated savings for a calendar year as 
                a result of such increased payments on reducing 
                preventable hospital admissions, duplicate testing, 
                medication errors and drug interactions, Intensive Care 
                Unit admissions, per capita health care expenditures, 
                and other savings under this part and part A (including 
                any savings with respect to items and services for 
                which payment is not made under this section).
                    ``(B) Funding.--The aggregate amount available for 
                such increased payments during a calendar year shall be 
                equal to the aggregate estimated savings (as determined 
                under subparagraph (A)) for the calendar year (as 
                determined by the Secretary).
                    ``(C) Additional funding as determined necessary by 
                the secretary.--In addition to any funding made 
                available under subparagraph (B), there shall also be 
                available to the Secretary, for purposes of effectively 
                implementing this subsection, such additional funds as 
                the Secretary determines are necessary.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to services furnished on or after January 1, 2010.

SEC. 2304. ADDITIONAL INCENTIVE PAYMENT PROGRAM FOR PRIMARY CARE 
              SERVICES FURNISHED IN HEALTH PROFESSIONAL SHORTAGE AREAS.

    (a) In General.--Section 1833 of the Social Security Act (42 U.S.C. 
1395l) is amended by adding at the end the following new subsection:
    ``(x) Additional Incentive Payments for Primary Care Services 
Furnished in Health Professional Shortage Areas.--
            ``(1) In general.--In the case of primary care services 
        furnished on or after January 1, 2010, by a primary care 
        physician or primary care provider in an area that is 
        designated (under section 332(a)(1)(A) of the Public Health 
        Service Act) as a health professional shortage area as 
        identified by the Secretary prior to the beginning of the year 
        involved, in addition to the amount of payment that would 
        otherwise be made for such services under this part, there also 
        shall be paid (on a monthly or quarterly basis) an amount equal 
        to 10 percent of the payment amount for the service under this 
        part.
            ``(2) Definitions.--In this subsection:
                    ``(A) Primary care physician; primary care 
                provider.--The terms `primary care physician' and 
                `primary care provider' have the meaning given such 
                terms in paragraphs (6) and (7), respectively, of 
                section 3(a) of the Preserving Patient Access to 
                Primary Care Act of 2009.
                    ``(B) Primary care services.--The term `primary 
                care services' means procedure codes for services in 
                the category of the Healthcare Common Procedure Coding 
                System, as established by the Secretary under section 
                1848(c)(5) (as of December 31, 2008, and as 
                subsequently modified by the Secretary) consisting of 
                evaluation and management services, but limited to such 
                procedure codes in the category of office or other 
                outpatient services, and consisting of subcategories of 
                such procedure codes for services for both new and 
                established patients.
            ``(3) Judicial review.--There shall be no administrative or 
        judicial review under section 1869, 1878, or otherwise, 
        respecting the identification of primary care physicians, 
        primary care providers, or primary care services under this 
        subsection.''.
    (b) Conforming Amendment.--Section 1834(g)(2)(B) of the Social 
Security Act (42 U.S.C. 1395m(g)(2)(B)) is amended by adding at the end 
the following sentence: ``Section 1833(x) shall not be taken into 
account in determining the amounts that would otherwise be paid 
pursuant to the preceding sentence.''.

SEC. 2305. PERMANENT EXTENSION OF MEDICARE INCENTIVE PAYMENT PROGRAM 
              FOR PHYSICIAN SCARCITY AREAS.

    Section 1833(u) of the Social Security Act (42 U.S.C. 1395l(u)) is 
amended--
            (1) in paragraph (1)--
                    (A) by inserting ``or on or after July 1, 2009'' 
                after ``before July 1, 2008''; and
                    (B) by inserting ``(or, in the case of services 
                furnished on or after July 1, 2009, 10 percent)'' after 
                ``5 percent''; and
            (2) in paragraph (4)(D), by striking ``before July 1, 
        2008'' and inserting ``before January 1, 2010''.

SEC. 2306. HHS STUDY AND REPORT ON THE PROCESS FOR DETERMINING RELATIVE 
              VALUE UNDER THE MEDICARE PHYSICIAN FEE SCHEDULE.

    (a) Study.--The Secretary shall conduct a study on the process used 
by the Secretary for determining relative value under the Medicare 
physician fee schedule under section 1848(c) of the Social Security Act 
(42 U.S.C. 1395w-4(c)). Such study shall include an analysis of the 
following:
            (1)(A) Whether the existing process includes equitable 
        representation of primary care physicians (as defined in 
        section 2003(a)(6)); and
            (B) any changes that may be necessary to ensure such 
        equitable representation.
            (2)(A) Whether the existing process provides the Secretary 
        with expert and impartial input from physicians in medical 
        specialties that provide primary care to patients with multiple 
        chronic diseases, the fastest growing part of the Medicare 
        population; and
            (B) any changes that may be necessary to ensure such input.
            (3)(A) Whether the existing process includes equitable 
        representation of physician medical specialties in proportion 
        to their relative contributions toward caring for Medicare 
        beneficiaries, as determined by the percentage of Medicare 
        billings per specialty, percentage of Medicare encounters by 
        specialty, or such other measures of relative contributions to 
        patient care as determined by the Secretary; and
            (B) any changes that may be necessary to reflect such 
        equitable representation.
            (4)(A) Whether the existing process, including the 
        application of budget neutrality rules, unfairly disadvantages 
        primary care physicians, primary care providers, or other 
        physicians who principally provide evaluation and management 
        services; and
            (B) any changes that may be necessary to eliminate such 
        disadvantages.
    (b) Report.--Not later than 12 months after the date of enactment 
of this Act, the Secretary shall submit to Congress a report containing 
the results of the study conducted under subsection (a), together with 
recommendations for such legislation and administrative action as the 
Secretary determines appropriate.

                      PART II--PREVENTIVE SERVICES

SEC. 2311. ELIMINATING TIME RESTRICTION FOR INITIAL PREVENTIVE PHYSICAL 
              EXAMINATION.

    (a) In General.--Section 1862(a)(1)(K) of the Social Security Act 
(42 U.S.C. 1395y(a)(1)(K)) is amended by striking ``more than'' and all 
that follows before the comma at the end and inserting ``more than one 
time during the lifetime of the individual''.
    (b) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2010.

SEC. 2312. ELIMINATION OF COST-SHARING FOR PREVENTIVE BENEFITS UNDER 
              THE MEDICARE PROGRAM.

    (a) Definition of Preventive Services.--Section 1861(ddd) of the 
Social Security Act (42 U.S.C. 1395w(dd)) is amended--
            (1) in the heading, by inserting ``; Preventive Services'' 
        after ``Services'';
            (2) in paragraph (1), by striking ``not otherwise described 
        in this title'' and inserting ``not described in subparagraphs 
        (A) through (N) of paragraph (3)''; and
            (3) by adding at the end the following new paragraph:
    ``(3) The term `preventive services' means the following:
            ``(A) Prostate cancer screening tests (as defined in 
        subsection (oo)).
            ``(B) Colorectal cancer screening tests (as defined in 
        subsection (pp)).
            ``(C) Diabetes outpatient self-management training services 
        (as defined in subsection (qq)).
            ``(D) Screening for glaucoma for certain individuals (as 
        described in subsection (s)(2)(U)).
            ``(E) Medical nutrition therapy services for certain 
        individuals (as described in subsection (s)(2)(V)).
            ``(F) An initial preventive physical examination (as 
        defined in subsection (ww)).
            ``(G) Cardiovascular screening blood tests (as defined in 
        subsection (xx)(1)).
            ``(H) Diabetes screening tests (as defined in subsection 
        (yy)).
            ``(I) Ultrasound screening for abdominal aortic aneurysm 
        for certain individuals (as described in subsection 
        (s)(2)(AA)).
            ``(J) Pneumococcal and influenza vaccine and their 
        administration (as described in subsection (s)(10)(A)).
            ``(K) Hepatitis B vaccine and its administration for 
        certain individuals (as described in subsection (s)(10)(B)).
            ``(L) Screening mammography (as defined in subsection 
        (jj)).
            ``(M) Screening pap smear and screening pelvic exam (as 
        described in subsection (s)(14)).
            ``(N) Bone mass measurement (as defined in subsection 
        (rr)).
            ``(O) Additional preventive services (as determined under 
        paragraph (1)).''.
    (b) Coinsurance.--
            (1) General application.--
                    (A) In general.--Section 1833(a)(1) of the Social 
                Security Act (42 U.S.C. 1395l(a)(1)), as amended by 
                section 2302, is amended--
                            (i) in subparagraph (T), by striking ``80 
                        percent'' and inserting ``100 percent'';
                            (ii) in subparagraph (W), by striking ``80 
                        percent'' and inserting ``100 percent'';
                            (iii) by striking ``and'' before ``(X)''; 
                        and
                            (iv) by inserting before the semicolon at 
                        the end the following: ``, and (Y) with respect 
                        to preventive services described in 
                        subparagraphs (A) through (O) of section 
                        1861(ddd)(3), the amount paid shall be 100 
                        percent of the lesser of the actual charge for 
                        the services or the amount determined under the 
                        fee schedule that applies to such services 
                        under this part''.
            (2) Elimination of coinsurance for screening 
        sigmoidoscopies and colonoscopies.--Section 1834(d) of the 
        Social Security Act (42 U.S.C. 1395m(d)) is amended--
                    (A) in paragraph (2)--
                            (i) in subparagraph (A), by inserting ``, 
                        except that payment for such tests under such 
                        section shall be 100 percent of the payment 
                        determined under such section for such tests'' 
                        before the period at the end; and
                            (ii) in subparagraph (C)--
                                    (I) by striking clause (ii); and
                                    (II) in clause (i)--
                                            (aa) by striking ``(i) In 
                                        general.--Notwithstanding'' and 
                                        inserting ``Notwithstanding'';
                                            (bb) by redesignating 
                                        subclauses (I) and (II) as 
                                        clauses (i) and (ii), 
                                        respectively, and moving such 
                                        clauses 2 ems to the left; and
                                            (cc) in the flush matter 
                                        following clause (ii), as so 
                                        redesignated, by inserting 
                                        ``100 percent of'' after 
                                        ``based on''; and
                    (B) in paragraph (3)--
                            (i) in subparagraph (A), by inserting ``, 
                        except that payment for such tests under such 
                        section shall be 100 percent of the payment 
                        determined under such section for such tests'' 
                        before the period at the end; and
                            (ii) in subparagraph (C)--
                                    (I) by striking clause (ii); and
                                    (II) in clause (i)--
                                            (aa) by striking ``(i) In 
                                        general.--Notwithstanding'' and 
                                        inserting ``Notwithstanding''; 
                                        and
                                            (bb) by inserting ``100 
                                        percent of'' after ``based 
                                        on''.
            (3) Elimination of coinsurance in outpatient hospital 
        settings.--
                    (A) Exclusion from opd fee schedule.--Section 
                1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 
                1395l(t)(1)(B)(iv)) is amended by striking ``and 
                diagnostic mammography'' and inserting ``, diagnostic 
                mammography, and preventive services (as defined in 
                section 1861(ddd)(3))''.
                    (B) Conforming amendments.--Section 1833(a)(2) of 
                the Social Security Act (42 U.S.C. 1395l(a)(2)) is 
                amended--
                            (i) in subparagraph (F), by striking 
                        ``and'' after the semicolon at the end;
                            (ii) in subparagraph (G)(ii), by adding 
                        ``and'' at the end; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(H) with respect to preventive services (as 
                defined in section 1861(ddd)(3)) furnished by an 
                outpatient department of a hospital, the amount 
                determined under paragraph (1)(W) or (1)(X), as 
                applicable;''.
    (c) Waiver of Application of Deductible.--The first sentence of 
section 1833(b) of the Social Security Act (42 U.S.C. 1395l(b)) is 
amended--
            (1) in clause (1), by striking ``items and services 
        described in section 1861(s)(10)(A)'' and inserting 
        ``preventive services (as defined in section 1861(ddd)(3))'';
            (2) by inserting ``and'' before ``(4)''; and
            (3) by striking ``, (5)'' and all that follows up to the 
        period at the end.

SEC. 2313. HHS STUDY AND REPORT ON FACILITATING THE RECEIPT OF MEDICARE 
              PREVENTIVE SERVICES BY MEDICARE BENEFICIARIES.

    (a) Study.--The Secretary, in consultation with provider 
organizations and other appropriate stakeholders, shall conduct a study 
on--
            (1) ways to assist primary care physicians and primary care 
        providers (as defined in section 2003(a)) in--
                    (A) furnishing appropriate preventive services (as 
                defined in section 1861(ddd)(3) of the Social Security 
                Act, as added by section 2312) to individuals enrolled 
                under part B of title XVIII of such Act; and
                    (B) referring such individuals for other items and 
                services furnished by other physicians and health care 
                providers; and
            (2) the advisability and feasability of making additional 
        payments under the Medicare program to physicians and primary 
        care providers for--
                    (A) the work involved in ensuring that such 
                individuals receive appropriate preventive services 
                furnished by other physicians and health care 
                providers; and
                    (B) incorporating the resulting clinical 
                information into the treatment plan for the individual.
    (b) Report.--Not later than 12 months after the date of enactment 
of this Act, the Secretary shall submit to Congress a report containing 
the results of the study conducted under subsection (a), together with 
recommendations for such legislation and administrative action as the 
Secretary determines appropriate.

                       PART III--OTHER PROVISIONS

SEC. 2321. HHS STUDY AND REPORT ON IMPROVING THE ABILITY OF PHYSICIANS 
              AND PRIMARY CARE PROVIDERS TO ASSIST MEDICARE 
              BENEFICIARIES IN OBTAINING NEEDED PRESCRIPTIONS UNDER 
              MEDICARE PART D.

    (a) Study.--The Secretary, in consultation with physician 
organizations and other appropriate stakeholders, shall conduct a study 
on the development and implementation of mechanisms to facilitate 
increased efficiency relating to the role of physicians and primary 
care providers in Medicare beneficiaries obtaining needed prescription 
drugs under the Medicare prescription drug program under part D of 
title XVIII of the Social Security Act. Such study shall include an 
analysis of ways to--
            (1) improve the accessibility of formulary information;
            (2) streamline the prior authorization, exception, and 
        appeals processes, through, at a minimum, standardizing formats 
        and allowing electronic exchange of information; and
            (3) recognize the work of the physician and primary care 
        provider involved in the prescribing process, especially work 
        that may extend beyond the amount considered to be bundled into 
        payment for evaluation and management services.
    (b) Report.--Not later than 12 months after the date of enactment 
of this Act, the Secretary shall submit to Congress a report containing 
the results of the study conducted under subsection (a), together with 
recommendations for such legislation and administrative action as the 
Secretary determines appropriate.

SEC. 2322. HHS STUDY AND REPORT ON IMPROVED PATIENT CARE THROUGH 
              INCREASED CAREGIVER AND PHYSICIAN INTERACTION.

    (a) Study.--The Secretary, in consultation with appropriate 
stakeholders, shall conduct a study on the development and 
implementation of mechanisms to promote and increase interaction 
between physicians or primary care providers and the families of 
Medicare beneficiaries, as well as other caregivers who support such 
beneficiaries, for the purpose of improving patient care under the 
Medicare program. Such study shall include an analysis of--
            (1) ways to recognize the work of physicians and primary 
        care providers involved in discussing clinical issues with 
        caregivers that relate to the care of the beneficiary; and
            (2) regulations under the Medicare program that are 
        barriers to interactions between caregivers and physicians or 
        primary care providers and how such regulations should be 
        revised to eliminate such barriers.
    (b) Report.--Not later than 12 months after the date of enactment 
of this Act, the Secretary shall submit to Congress a report containing 
the results of the study conducted under subsection (a), together with 
recommendations for such legislation and administrative action as the 
Secretary determines appropriate.

SEC. 2323. IMPROVED PATIENT CARE THROUGH EXPANDED SUPPORT FOR LIMITED 
              ENGLISH PROFICIENCY (LEP) SERVICES.

    (a) Additional Payments for Primary Care Physicians and Primary 
Care Providers.--Section 1833 of the Social Security Act (42 U.S.C. 
1395l), as amended by section 2304, is amended by adding at the end the 
following new subsection:
    ``(y) Additional Payments for Providing Services to Individuals 
With Limited English Proficiency.--
            ``(1) In general.--In the case of primary care providers' 
        services furnished on or after January 1, 2010, to an 
        individual with limited English proficiency by a provider, in 
        addition to the amount of payment that would otherwise be made 
        for such services under this part, there shall also be paid an 
        appropriate amount (as determined by the Secretary) in order to 
        recognize the additional time involved in furnishing the 
        service to such individual.
            ``(2) Judicial review.--There shall be no administrative or 
        judicial review under section 1869, 1878, or otherwise, 
        respecting the determination of the amount of additional 
        payment under this subsection.''.
    (b) National Clearinghouse.--Not later than 180 days after the date 
of enactment of this Act, the Secretary shall establish a national 
clearinghouse to make available to the primary care physicians, primary 
care providers, patients, and States translated documents regarding 
patient care and education under the Medicare program, the Medicaid 
program, and the State Children's Health Insurance Program under titles 
XVIII, XIX, and XXI, respectively, of the Social Security Act.
    (c) Grants To Support Language Translation Services in Underserved 
Communities.--
            (1) Authority to award grants.--The Secretary shall award 
        grants to support language translation services for primary 
        care physicians and primary care providers in medically 
        underserved areas (as defined in section 2003(c)).
            (2) Authorization of appropriations.--There are authorized 
        to be appropriated to the Secretary to award grants under this 
        subsection, such sums as are necessary for fiscal years 
        beginning with fiscal year 2010.

SEC. 2324. HHS STUDY AND REPORT ON USE OF REAL-TIME MEDICARE CLAIMS 
              ADJUDICATION.

    (a) Study.--The Secretary shall conduct a study to assess the 
ability of the Medicare program under title XVIII of the Social 
Security Act to engage in real-time claims adjudication for items and 
services furnished to Medicare beneficiaries.
    (b) Consultation.--In conducting the study under subsection (a), 
the Secretary consult with stakeholders in the private sector, 
including stakeholders who are using or are testing real-time claims 
adjudication systems.
    (c) Report.--Not later than January 1, 2011, the Secretary shall 
submit to Congress a report containing the results of the study 
conducted under subsection (a), together with recommendations for such 
legislation and administrative action as the Secretary determines 
appropriate.

SEC. 2325. ONGOING ASSESSMENT BY MEDPAC OF THE IMPACT OF MEDICARE 
              PAYMENTS ON PRIMARY CARE ACCESS AND EQUITY.

    The Medicare Payment Advisory Commission, beginning in 2010 and in 
each of its subsequent annual reports to Congress on Medicare physician 
payment policies, shall provide an assessment of the impact of changes 
in Medicare payment policies in improving access to and equity of 
payments to primary care physicians and primary care providers. Such 
assessment shall include an assessment of the effectiveness, once 
implemented, of the Medicare payment-related reforms required by this 
Act to support primary care as well as any other payment changes that 
may be required by Congress to improve access to and equity of payments 
to primary care physicians and primary care providers.

SEC. 2326. DISTRIBUTION OF ADDITIONAL RESIDENCY POSITIONS.

    (a) In General.--Section 1886(h) of the Social Security Act (42 
U.S.C. 1395ww(h)) is amended--
            (1) in paragraph (4)(F)(i), by striking ``paragraph (7)'' 
        and inserting ``paragraphs (7) and (8)'';
            (2) in paragraph (4)(H)(i), by striking ``paragraph (7)'' 
        and inserting ``paragraphs (7) and (8)''; and
            (3) by adding at the end the following new paragraph:
            ``(8) Distribution of additional residency positions.--
                    ``(A) Additional residency positions.--
                            ``(i) Reduction in limit based on unused 
                        positions.--
                                    ``(I) In general.--The Secretary 
                                shall reduce the otherwise applicable 
                                resident limit for a hospital that the 
                                Secretary determines had residency 
                                positions that were unused for all 5 of 
                                the most recent cost reporting periods 
                                ending prior to the date of enactment 
                                of this paragraph by an amount that is 
                                equal to the number of such unused 
                                residency positions.
                                    ``(II) Exception for rural 
                                hospitals and certain other 
                                hospitals.--This subparagraph shall not 
                                apply to a hospital--
                                            ``(aa) located in a rural 
                                        area (as defined in subsection 
                                        (d)(2)(D)(ii));
                                            ``(bb) that has 
                                        participated in a voluntary 
                                        reduction plan under paragraph 
                                        (6); or
                                            ``(cc) that has 
                                        participated in a demonstration 
                                        project approved as of October 
                                        31, 2003, under the authority 
                                        of section 402 of Public Law 
                                        90-248.
                            ``(ii) Number available for distribution.--
                        The number of additional residency positions 
                        available for distribution under subparagraph 
                        (B) shall be an amount that the Secretary 
                        determines would result in a 15 percent 
                        increase in the aggregate number of full-time 
                        equivalent residents in approved medical 
                        training programs (as determined based on the 
                        most recent cost reports available at the time 
                        of distribution). One-third of such number 
                        shall only be available for distribution to 
                        hospitals described in subclause (I) of 
                        subparagraph (B)(ii) under such subparagraph.
                    ``(B) Distribution.--
                            ``(i) In general.--The Secretary shall 
                        increase the otherwise applicable resident 
                        limit for each qualifying hospital that submits 
                        an application under this subparagraph by such 
                        number as the Secretary may approve for 
                        portions of cost reporting periods occurring on 
                        or after the date of enactment of this 
                        paragraph. The aggregate number of increases in 
                        the otherwise applicable resident limit under 
                        this subparagraph shall be equal to the number 
                        of additional residency positions available for 
                        distribution under subparagraph (A)(ii).
                            ``(ii) Distribution to hospitals already 
                        operating over resident limit.--
                                    ``(I) In general.--Subject to 
                                subclause (II), in the case of a 
                                hospital in which the reference 
                                resident level of the hospital (as 
                                defined in clause (ii)) is greater than 
                                the otherwise applicable resident 
                                limit, the increase in the otherwise 
                                applicable resident limit under this 
                                subparagraph shall be an amount equal 
                                to the product of the total number of 
                                additional residency positions 
                                available for distribution under 
                                subparagraph (A)(ii) and the quotient 
                                of--
                                            ``(aa) the number of 
                                        resident positions by which the 
                                        reference resident level of the 
                                        hospital exceeds the otherwise 
                                        applicable resident limit for 
                                        the hospital; and
                                            ``(bb) the number of 
                                        resident positions by which the 
                                        reference resident level of all 
                                        such hospitals with respect to 
                                        which an application is 
                                        approved under this 
                                        subparagraph exceeds the 
                                        otherwise applicable resident 
                                        limit for such hospitals.
                                    ``(II) Requirements.--A hospital 
                                described in subclause (I)--
                                            ``(aa) is not eligible for 
                                        an increase in the otherwise 
                                        applicable resident limit under 
                                        this subparagraph unless the 
                                        amount by which the reference 
                                        resident level of the hospital 
                                        exceeds the otherwise 
                                        applicable resident limit is 
                                        not less than 10 and the 
                                        hospital trains at least 25 
                                        percent of the full-time 
                                        equivalent residents of the 
                                        hospital in primary care and 
                                        general surgery (as of the date 
                                        of enactment of this 
                                        paragraph); and
                                            ``(bb) shall continue to 
                                        train at least 25 percent of 
                                        the full-time equivalent 
                                        residents of the hospital in 
                                        primary care and general 
                                        surgery for the 10-year period 
                                        beginning on such date.
                                In the case where the Secretary 
                                determines that a hospital no longer 
                                meets the requirement of item (bb), the 
                                Secretary may reduce the otherwise 
                                applicable resident limit of the 
                                hospital by the amount by which such 
                                limit was increased under this clause.
                                    ``(III) Clarification regarding 
                                eligibility for other additional 
                                residency positions.--Nothing in this 
                                clause shall be construed as preventing 
                                a hospital described in subclause (I) 
                                from applying for additional residency 
                                positions under this paragraph that are 
                                not reserved for distribution under 
                                this clause.
                            ``(iii) Reference resident level.--
                                    ``(I) In general.--Except as 
                                otherwise provided in subclause (II), 
                                the reference resident level specified 
                                in this clause for a hospital is the 
                                resident level for the most recent cost 
                                reporting period of the hospital ending 
                                on or before the date of enactment of 
                                this paragraph, for which a cost report 
                                has been settled (or, if not, submitted 
                                (subject to audit)), as determined by 
                                the Secretary.
                                    ``(II) Use of most recent 
                                accounting period to recognize 
                                expansion of existing program or 
                                establishment of new program.--If a 
                                hospital submits a timely request to 
                                increase its resident level due to an 
                                expansion of an existing residency 
                                training program or the establishment 
                                of a new residency training program 
                                that is not reflected on the most 
                                recent cost report that has been 
                                settled (or, if not, submitted (subject 
                                to audit)), after audit and subject to 
                                the discretion of the Secretary, the 
                                reference resident level for such 
                                hospital is the resident level for the 
                                cost reporting period that includes the 
                                additional residents attributable to 
                                such expansion or establishment, as 
                                determined by the Secretary.
                    ``(C) Considerations in redistribution.--In 
                determining for which hospitals the increase in the 
                otherwise applicable resident limit is provided under 
                subparagraph (B) (other than an increase under 
                subparagraph (B)(ii)), the Secretary shall take into 
                account the demonstrated likelihood of the hospital 
                filling the positions within the first 3 cost reporting 
                periods beginning on or after July 1, 2010, made 
                available under this paragraph, as determined by the 
                Secretary.
                    ``(D) Priority for certain areas.--In determining 
                for which hospitals the increase in the otherwise 
                applicable resident limit is provided under 
                subparagraph (B) (other than an increase under 
                subparagraph (B)(ii)), the Secretary shall distribute 
                the increase to hospitals based on the following 
                criteria:
                            ``(i) The Secretary shall give preference 
                        to hospitals that submit applications for new 
                        primary care and general surgery residency 
                        positions. In the case of any increase based on 
                        such preference, a hospital shall ensure that--
                                    ``(I) the position made available 
                                as a result of such increase remains a 
                                primary care or general surgery 
                                residency position for not less than 10 
                                years after the date on which the 
                                position is filled; and
                                    ``(II) the total number of primary 
                                care and general surgery residency 
                                positions in the hospital (determined 
                                based on the number of such positions 
                                as of the date of such increase, 
                                including any position added as a 
                                result of such increase) is not 
                                decreased during such 10-year period.
                        In the case where the Secretary determines that 
                        a hospital no longer meets the requirement of 
                        subclause (II), the Secretary may reduce the 
                        otherwise applicable resident limit of the 
                        hospital by the amount by which such limit was 
                        increased under this paragraph.
                            ``(ii) The Secretary shall give preference 
                        to hospitals that emphasizes training in 
                        community health centers and other community-
                        based clinical settings.
                            ``(iii) The Secretary shall give preference 
                        to hospitals in States that have more medical 
                        students than residency positions available 
                        (including a greater preference for those 
                        States with smaller resident-to-medical-student 
                        ratios). In determining the number of medical 
                        students in a State for purposes of the 
                        preceding sentence, the Secretary shall include 
                        planned students at medical schools which have 
                        provisional accreditation by the Liaison 
                        Committee on Medical Education or the American 
                        Osteopathic Association.
                            ``(iv) The Secretary shall give preference 
                        to hospitals in States that have low resident-
                        to-population ratios (including a greater 
                        preference for those States with lower 
                        resident-to-population ratios).
                    ``(E) Limitation.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in no case may a hospital (other 
                        than a hospital described in subparagraph 
                        (B)(ii)(I), subject to the limitation under 
                        subparagraph (B)(ii)(III)) apply for more than 
                        50 full-time equivalent additional residency 
                        positions under this paragraph.
                            ``(ii) Increase in number of additional 
                        positions available for distribution.--The 
                        Secretary shall increase the number of full-
                        time equivalent additional residency positions 
                        a hospital may apply for under this paragraph 
                        if the Secretary determines that the number of 
                        additional residency positions available for 
                        distribution under subparagraph (A)(ii) exceeds 
                        the number of such applications approved.
                    ``(F) Application of per resident amounts for 
                primary care and nonprimary care.--With respect to 
                additional residency positions in a hospital 
                attributable to the increase provided under this 
                paragraph, the approved FTE resident amounts are deemed 
                to be equal to the hospital per resident amounts for 
                primary care and nonprimary care computed under 
                paragraph (2)(D) for that hospital.
                    ``(G) Distribution.--The Secretary shall distribute 
                the increase to hospitals under this paragraph not 
                later than 2 years after the date of enactment of this 
                paragraph.''.
    (b) IME.--
            (1) In general.--Section 1886(d)(5)(B)(v) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second 
        sentence, is amended--
                    (A) by striking ``subsection (h)(7)'' and inserting 
                ``subsections (h)(7) and (h)(8)''; and
                    (B) by striking ``it applies'' and inserting ``they 
                apply''.
            (2) Conforming provision.--Section 1886(d)(5)(B) of the 
        Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by 
        adding at the end the following clause:
            ``(x) For discharges occurring on or after the date of 
        enactment of this clause, insofar as an additional payment 
        amount under this subparagraph is attributable to resident 
        positions distributed to a hospital under subsection (h)(8)(B), 
        the indirect teaching adjustment factor shall be computed in 
        the same manner as provided under clause (ii) with respect to 
        such resident positions.''.

SEC. 2327. COUNTING RESIDENT TIME IN OUTPATIENT SETTINGS.

    (a) D-GME.--Section 1886(h)(4)(E) of the Social Security Act (42 
U.S.C. 1395ww(h)(4)(E)) is amended--
            (1) by striking ``under an approved medical residency 
        training program''; and
            (2) by striking ``if the hospital incurs all, or 
        substantially all, of the costs for the training program in 
        that setting'' and inserting ``if the hospital continues to 
        incur the costs of the stipends and fringe benefits of the 
        resident during the time the resident spends in that setting''.
    (b) IME.--Section 1886(d)(5)(B)(iv) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)(B)(iv)) is amended--
            (1) by striking ``under an approved medical residency 
        training program''; and
            (2) by striking ``if the hospital incurs all, or 
        substantially all, of the costs for the training program in 
        that setting'' and inserting ``if the hospital continues to 
        incur the costs of the stipends and fringe benefits of the 
        intern or resident during the time the intern or resident 
        spends in that setting''.
    (c) Effective Dates; Application.--
            (1) In general.--Effective for cost reporting periods 
        beginning on or after July 1, 2009, the Secretary of Health and 
        Human Services shall implement the amendments made by this 
        section in a manner so as to apply to cost reporting periods 
        beginning on or after July 1, 2009.
            (2) Application.--The amendments made by this section shall 
        not be applied in a manner that requires reopening of any 
        settled hospital cost reports as to which there is not a 
        jurisdictionally proper appeal pending as of the date of the 
        enactment of this Act on the issue of payment for indirect 
        costs of medical education under section 1886(d)(5)(B) of the 
        Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or for direct 
        graduate medical education costs under section 1886(h) of such 
        Act (42 U.S.C. 1395ww(h)).

SEC. 2328. RULES FOR COUNTING RESIDENT TIME FOR DIDACTIC AND SCHOLARLY 
              ACTIVITIES AND OTHER ACTIVITIES.

    (a) GME.--Section 1886(h) of the Social Security Act (42 U.S.C. 
1395ww(h)), as amended by section 2327(a), is amended--
            (1) in paragraph (4)(E)--
                    (A) by designating the first sentence as a clause 
                (i) with the heading ``In general'' and appropriate 
                indentation and by striking ``Such rules'' and 
                inserting ``Subject to clause (ii), such rules''; and
                    (B) by adding at the end the following new clause:
                            ``(ii) Treatment of certain nonhospital and 
                        didactic activities.--Such rules shall provide 
                        that all time spent by an intern or resident in 
                        an approved medical residency training program 
                        in a nonhospital setting that is primarily 
                        engaged in furnishing patient care (as defined 
                        in paragraph (5)(K)) in non-patient care 
                        activities, such as didactic conferences and 
                        seminars, but not including research not 
                        associated with the treatment or diagnosis of a 
                        particular patient, as such time and activities 
                        are defined by the Secretary, shall be counted 
                        toward the determination of full-time 
                        equivalency.'';
            (2) in paragraph (4), by adding at the end the following 
        new subparagraph:
                    ``(I) In determining the hospital's number of full-
                time equivalent residents for purposes of this 
                subsection, all the time that is spent by an intern or 
                resident in an approved medical residency training 
                program on vacation, sick leave, or other approved 
                leave, as such time is defined by the Secretary, and 
                that does not prolong the total time the resident is 
                participating in the approved program beyond the normal 
                duration of the program shall be counted toward the 
                determination of full-time equivalency.''; and
            (3) in paragraph (5), by adding at the end the following 
        new subparagraph:
                    ``(M) Nonhospital setting that is primarily engaged 
                in furnishing patient care.--The term `nonhospital 
                setting that is primarily engaged in furnishing patient 
                care' means a nonhospital setting in which the primary 
                activity is the care and treatment of patients, as 
                defined by the Secretary.''.
    (b) IME Determinations.--Section 1886(d)(5)(B) of such Act (42 
U.S.C. 1395ww(d)(5)(B)), as amended by section 2326(b), is amended by 
adding at the end the following new clause:
            ``(xi)(I) The provisions of subparagraph (I) of subsection 
        (h)(4) shall apply under this subparagraph in the same manner 
        as they apply under such subsection.
            ``(II) In determining the hospital's number of full-time 
        equivalent residents for purposes of this subparagraph, all the 
        time spent by an intern or resident in an approved medical 
        residency training program in non-patient care activities, such 
        as didactic conferences and seminars, as such time and 
        activities are defined by the Secretary, that occurs in the 
        hospital shall be counted toward the determination of full-time 
        equivalency if the hospital--
                    ``(aa) is recognized as a subsection (d) hospital;
                    ``(bb) is recognized as a subsection (d) Puerto 
                Rico hospital;
                    ``(cc) is reimbursed under a reimbursement system 
                authorized under section 1814(b)(3); or
                    ``(dd) is a provider-based hospital outpatient 
                department.
            ``(III) In determining the hospital's number of full-time 
        equivalent residents for purposes of this subparagraph, all the 
        time spent by an intern or resident in an approved medical 
        residency training program in research activities that are not 
        associated with the treatment or diagnosis of a particular 
        patient, as such time and activities are defined by the 
        Secretary, shall not be counted toward the determination of 
        full-time equivalency.''.
    (c) Effective Dates; Application.--
            (1) In general.--Except as otherwise provided, the 
        Secretary of Health and Human Services shall implement the 
        amendments made by this section in a manner so as to apply to 
        cost reporting periods beginning on or after January 1, 1983.
            (2) Direct gme.--Section 1886(h)(4)(E)(ii) of the Social 
        Security Act, as added by subsection (a)(1)(B), shall apply to 
        cost reporting periods beginning on or after July 1, 2009.
            (3) IME.--Section 1886(d)(5)(B)(xi)(III) of the Social 
        Security Act, as added by subsection (b), shall apply to cost 
        reporting periods beginning on or after October 1, 2001. Such 
        section, as so added, shall not give rise to any inference on 
        how the law in effect prior to such date should be interpreted.
            (4) Application.--The amendments made by this section shall 
        not be applied in a manner that requires reopening of any 
        settled hospital cost reports as to which there is not a 
        jurisdictionally proper appeal pending as of the date of the 
        enactment of this Act on the issue of payment for indirect 
        costs of medical education under section 1886(d)(5)(B) of the 
        Social Security Act or for direct graduate medical education 
        costs under section 1886(h) of such Act.

SEC. 2329. PRESERVATION OF RESIDENT CAP POSITIONS FROM CLOSED AND 
              ACQUIRED HOSPITALS.

    (a) GME.--Section 1886(h)(4)(H) of the Social Security Act (42 
U.S.C. 1395ww(h)(4)(H)) is amended by adding at the end the following 
new clauses:
                            ``(vi) Redistribution of residency slots 
                        after a hospital closes.--
                                    ``(I) In general.--Subject to the 
                                succeeding provisions of this clause, 
                                the Secretary shall, by regulation, 
                                establish a process under which, in the 
                                case where a hospital with an approved 
                                medical residency program closes on or 
                                after the date of enactment of the 
                                Balanced Budget Act of 1997, the 
                                Secretary shall increase the otherwise 
                                applicable resident limit under this 
                                paragraph for other hospitals in 
                                accordance with this clause.
                                    ``(II) Priority for hospitals in 
                                certain areas.--Subject to the 
                                succeeding provisions of this clause, 
                                in determining for which hospitals the 
                                increase in the otherwise applicable 
                                resident limit is provided under such 
                                process, the Secretary shall distribute 
                                the increase to hospitals located in 
                                the following priority order (with 
                                preference given within each category 
                                to hospitals that are members of the 
                                same affiliated group (as defined by 
                                the Secretary under clause (ii)) as the 
                                closed hospital):
                                            ``(aa) First, to hospitals 
                                        located in the same core-based 
                                        statistical area as, or a core-
                                        based statistical area 
                                        contiguous to, the hospital 
                                        that closed.
                                            ``(bb) Second, to hospitals 
                                        located in the same State as 
                                        the hospital that closed.
                                            ``(cc) Third, to hospitals 
                                        located in the same region of 
                                        the country as the hospital 
                                        that closed.
                                            ``(dd) Fourth, to all other 
                                        hospitals.
                                    ``(III) Requirement hospital likely 
                                to fill position within certain time 
                                period.--The Secretary may only 
                                increase the otherwise applicable 
                                resident limit of a hospital under such 
                                process if the Secretary determines the 
                                hospital has demonstrated a likelihood 
                                of filling the positions made available 
                                under this clause within 3 years.
                                    ``(IV) Limitation.--The aggregate 
                                number of increases in the otherwise 
                                applicable resident limits for 
                                hospitals under this clause shall be 
                                equal to the number of resident 
                                positions in the approved medical 
                                residency programs that closed on or 
                                after the date described in subclause 
                                (I).
                            ``(vii) Special rule for acquired 
                        hospitals.--
                                    ``(I) In general.--In the case of a 
                                hospital that is acquired (through any 
                                mechanism) by another entity with the 
                                approval of a bankruptcy court, during 
                                a period determined by the Secretary 
                                (but not less than 3 years), the 
                                applicable resident limit of the 
                                acquired hospital shall, except as 
                                provided in subclause (II), be the 
                                applicable resident limit of the 
                                hospital that was acquired (as of the 
                                date immediately before the 
                                acquisition), without regard to whether 
                                the acquiring entity accepts assignment 
                                of the Medicare provider agreement of 
                                the hospital that was acquired, so long 
                                as the acquiring entity continues to 
                                operate the hospital that was acquired 
                                and to furnish services, medical 
                                residency programs, and volume of 
                                patients similar to the services, 
                                medical residency programs, and volume 
                                of patients of the hospital that was 
                                acquired (as determined by the 
                                Secretary) during such period.
                                    ``(II) Limitation.--Subclause (I) 
                                shall only apply in the case where an 
                                acquiring entity waives the right as a 
                                new provider under the program under 
                                this title to have the otherwise 
                                applicable resident limit of the 
                                acquired hospital re-established or 
                                increased.''.
    (b) IME.--Section 1886(d)(5)(B)(v) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)(B)(v)), in the second sentence, as amended by 
section 2326(b), is amended by striking ``subsections (h)(7) and 
(h)(8)'' and inserting ``subsections (h)(4)(H)(vi), (h)(4)(H)(vii), 
(h)(7), and (h)(8)''.
    (c) Application.--The amendments made by this section shall not be 
applied in a manner that requires reopening of any settled hospital 
cost reports as to which there is not a jurisdictionally proper appeal 
pending as of the date of the enactment of this Act on the issue of 
payment for indirect costs of medical education under section 
1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or 
for direct graduate medical education costs under section 1886(h) of 
such Act (42 U.S.C. 1395ww(h)).
    (d) No Affect on Temporary FTE Cap Adjustments.--The amendments 
made by this section shall not affect any temporary adjustment to a 
hospital's FTE cap under section 413.79(h) of title 42, Code of Federal 
Regulations (as in effect on the date of enactment of this Act).

SEC. 2330. QUALITY IMPROVEMENT ORGANIZATION ASSISTANCE FOR PHYSICIAN 
              PRACTICES SEEKING TO BE PATIENT-CENTERED MEDICAL HOME 
              PRACTICES.

    Not later than 90 days after the date of enactment of this Act, the 
Secretary of Health and Human Services shall revise the 9th Statement 
of Work under the Quality Improvement Program under part B of title XI 
of the Social Security Act to include a requirement that, in order to 
be an eligible Quality Improvement Organization (in this section 
referred to as a ``QIO'') for the 9th Statement of Work contract cycle, 
a QIO shall provide assistance, including technical assistance, to 
physicians under the Medicare program under title XVIII of the Social 
Security Act that seek to acquire the elements necessary to be 
recognized as a patient-centered medical home practice under the 
National Committee for Quality Assurance's Physician Practice 
Connections--PCMH module (or any successor module issued by such 
Committee).

                          Subtitle D--Studies

SEC. 2401. STUDY CONCERNING THE DESIGNATION OF PRIMARY CARE AS A 
              SHORTAGE PROFESSION.

    (a) In General.--Not later than June 30, 2010, the Secretary of 
Labor shall conduct a study and submit to the Committee on Education 
and Labor of the House of Representatives and the Committee on Health, 
Education, Labor, and Pensions a report that contains--
            (1) a description of the criteria for the designation of 
        primary care physicians as professions in shortage as defined 
        by the Secretary under section 212(a)(5)(A) of the Immigration 
        and Nationality Act;
            (2) the findings of the Secretary on whether primary care 
        physician professions will, on the date on which the report is 
        submitted, or within the 5-year period beginning on such date, 
        satisfy the criteria referred to in paragraph (1); and
            (3) if the Secretary finds that such professions will not 
        satisfy such criteria, recommendations for modifications to 
        such criteria to enable primary care physicians to be so 
        designated as a profession in shortage.
    (b) Requirements.--In conducting the study under subsection (a), 
the Secretary of Labor shall consider workforce data from the Health 
Resources and Services Administration, the Council on Graduate Medical 
Education, the Association of American Medical Colleges, and input from 
physician membership organizations that represent primary care 
physicians.

SEC. 2402. STUDY CONCERNING THE EDUCATION DEBT OF MEDICAL SCHOOL 
              GRADUATES.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study to evaluate the higher education-related indebtedness 
of medical school graduates in the United States at the time of 
graduation from medical school, and the impact of such indebtedness on 
specialty choice, including the impact on the field of primary care.
    (b) Report.--
            (1) Submission and dissemination of report.--Not later than 
        1 year after the date of enactment of this Act, the Comptroller 
        General shall submit a report on the study required by 
        subsection (a) to the Committee on Health, Education, Labor, 
        and Pensions of the Senate and the Committee on Education and 
        Labor of the House of Representatives, and shall make such 
        report widely available to the public.
            (2) Additional reports.--The Comptroller General may 
        periodically prepare and release as necessary additional 
        reports on the topic described in subsection (a).

SEC. 2403. STUDY ON MINORITY REPRESENTATION IN PRIMARY CARE.

    (a) Study.--The Secretary of Health and Human Services, acting 
through the Administrator of the Health Resources and Services 
Administration, shall conduct a study of minority representation in 
training, and in practice, in primary care specialties.
    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary of Health and Human Services, acting through 
the Administrator of the Health Resources and Services Administration, 
shall submit to the appropriate committees of Congress a report 
concerning the study conducted under subsection (a), including 
recommendations for achieving a primary care workforce that is more 
representative of the population of the United States.

                 TITLE III--MEDICARE PAYMENT PROVISIONS

SEC. 3001. SHORT TITLE.

    This title may be cited as the ``Medicare Payment Improvement Act 
of 2009''.

SEC. 3002. FINDINGS.

    Congress makes the following findings:
            (1) The health care delivery system must be realigned to 
        provide better clinical outcomes, safety, and patient 
        satisfaction at lower cost. This should be a common goal for 
        all health care professionals, hospitals, and other groups. 
        Today's reimbursement system pays the most to those who perform 
        the most services, and therefore can provide disincentives to 
        efficient and high-quality providers.
            (2) The regional inequities in Medicare reimbursement 
        penalize areas that have cost-effective health care delivery 
        systems and reward those States that have high utilization 
        rates and provide inefficient care.
            (3) According to the Dartmouth Health Atlas, over the past 
        10 years, a number of studies have explored the relationship 
        between higher spending and the quality and outcomes of care. 
        The findings are remarkably consistent, concluding that higher 
        spending does not result in better quality of care.
            (4) New payment models should be developed to move away 
        from paying for quantity and instead paying for improving 
        health and truly rewarding effective and efficient care.

SEC. 3003. VALUE INDEX UNDER THE MEDICARE PHYSICIAN FEE SCHEDULE.

    (a) In General.--Section 1848(e)(5) of the Social Security Act (42 
U.S.C. 1395w-4(e)) is amended by adding at the end the following new 
paragraph:
            ``(6) Value index.--
                    ``(A) In general.--The Secretary shall determine a 
                value index for each fee schedule area. The value index 
                shall be the ratio of the quality component under 
                subparagraph (B) to the cost component under 
                subparagraph (C) for that fee schedule area.
                    ``(B) Quality component.--
                            ``(i) In general.--The quality component 
                        shall be based on a composite score that 
                        reflects quality measures available on a State 
                        or fee schedule area basis. The measures shall 
                        reflect health outcomes and health status for 
                        the Medicare population, patient safety, and 
                        patient satisfaction. The Secretary shall use 
                        the best data available, after consultation 
                        with the Agency for Healthcare Research and 
                        Quality and with private entities that compile 
                        quality data.
                            ``(ii) Advisory group.--
                                    ``(I) In general.--Not later than 
                                60 days after the date of enactment of 
                                the Medicare Payment Improvement Act of 
                                2009, the Secretary shall establish a 
                                group of experts and stakeholders to 
                                make consensus recommendations to the 
                                Secretary regarding development of the 
                                quality component. The membership of 
                                the advisory group shall at least 
                                reflect providers, purchasers, health 
                                plans, researchers, relevant Federal 
                                agencies, and individuals with 
                                technical expertise on health care 
                                quality.
                                    ``(II) Duties.--In the development 
                                of recommendations with respect to the 
                                quality component, the group 
                                established under subclause (I) shall 
                                consider at least the following areas:
                                            ``(aa) High cost procedures 
                                        as determined by data under 
                                        this title.
                                            ``(bb) Health outcomes and 
                                        functional status of patients.
                                            ``(cc) The continuity, 
                                        management, and coordination of 
                                        health care and care 
                                        transitions, including episodes 
                                        of care, for patients across 
                                        the continuum of providers, 
                                        health care settings, and 
                                        health plans.
                                            ``(dd) Patient, caregiver, 
                                        and authorized representative 
                                        experience, quality and 
                                        relevance of information 
                                        provided to patients, 
                                        caregivers, and authorized 
                                        representatives, and use of 
                                        information by patients, 
                                        caregivers, and authorized 
                                        representatives to inform 
                                        decision making.
                                            ``(ee) The safety, 
                                        effectiveness, and timeliness 
                                        of care.
                                            ``(ff) The appropriate use 
                                        of health care resources and 
                                        services.
                                            ``(gg) Other items 
                                        determined appropriate by the 
                                        Secretary.
                            ``(iii) Requirement.--In establishing the 
                        quality component under this subparagraph, the 
                        Secretary shall--
                                    ``(I) take into account the 
                                recommendations of the group 
                                established under clause (ii)(I); and
                                    ``(II) provide for an open and 
                                transparent process for the activities 
                                conducted pursuant to the convening of 
                                such group with respect to the 
                                development of the quality component.
                            ``(iv) Establishment.--The quality 
                        component for each fee schedule area shall be 
                        the ratio of the quality score for such area to 
                        the national average quality score.
                            ``(v) Quality baseline.--If the quality 
                        component for a fee schedule area does not rank 
                        in the top 25th percentile as compared to the 
                        national average (as determined by the 
                        Secretary) and the amount of reimbursement for 
                        services under this section is greater than the 
                        amount of reimbursement for such services that 
                        would have applied under this section if the 
                        amendments made by section 2 of the Medicare 
                        Payment Improvement Act of 2009 had not been 
                        enacted, this section shall be applied as if 
                        such amendments had not been enacted.
                            ``(vi) Application.--In the case of a fee 
                        schedule area that is less than an entire 
                        State, if available quality data is not 
                        sufficient to measure quality at the sub-State 
                        level, the quality component for a sub-State 
                        fee schedule area shall be the quality 
                        component for the entire State.
                    ``(C) Cost component.--
                            ``(i) In general.--The cost component shall 
                        be total annual per beneficiary Medicare 
                        expenditures under part A and this part for the 
                        fee schedule area. The Secretary may use total 
                        per beneficiary expenditures under such parts 
                        in the last two years of life as an alternative 
                        measure if the Secretary determines that such 
                        measure better takes into account severity 
                        differences among fee schedule areas.
                            ``(ii) Establishment.--The cost component 
                        for a fee schedule area shall be the ratio of 
                        the cost per beneficiary for such area to the 
                        national average cost per beneficiary.''.
    (b) Conforming Amendments.--Section 1848 of the Social Security Act 
(42 U.S.C. 1395w-4) is amended--
            (1) in subsection (b)(1)(C), by striking ``geographic'' and 
        inserting ``geographic and value''; and
            (2) in subsection (e)--
                    (A) in paragraph (1)--
                            (i) in the heading, by inserting ``and 
                        value'' after ``geographic'';
                            (ii) in subparagraph (A), by striking 
                        clause (iii) and inserting the following new 
                        clause:
                            ``(iii) a value index (as defined in 
                        paragraph (6)) applicable to physician work.'';
                            (iii) in subparagraph (C), by inserting 
                        ``and value'' after ``geographic'' in the first 
                        sentence;
                            (iv) in subparagraph (D), by striking 
                        ``physician work effort'' and inserting 
                        ``value'';
                            (v) by striking subparagraph (E); and
                            (vi) by striking subparagraph (G);
                    (B) by striking paragraph (2) and inserting the 
                following new paragraph:
            ``(2) Computation of geographic and value adjustment 
        factor.--For purposes of subsection (b)(1)(C), for all 
        physicians' services for each fee schedule area the Secretary 
        shall establish a geographic and value adjustment factor equal 
        to the sum of the geographic cost-of-practice adjustment factor 
        (specified in paragraph (3)), the geographic malpractice 
        adjustment factor (specified in paragraph (4)), and the value 
        adjustment factor (specified in paragraph (5)) for the service 
        and the area.''; and
                    (C) by striking paragraph (5) and inserting the 
                following new paragraph:
            ``(5) Physician work value adjustment factor.--For purposes 
        of paragraph (2), the `physician work value adjustment factor' 
        for a service for a fee schedule area, is the product of--
                    ``(A) the proportion of the total relative value 
                for the service that reflects the relative value units 
                for the work component; and
                    ``(B) the value index score for the area, based on 
                the value index established under paragraph (6).''.
    (c) Availability of Quality Component Prior to Implementation.--The 
Secretary of Health and Human Services shall make the quality component 
described in section 1848(c)(6)(B) of the Social Security Act, as added 
by subsection (a), for each fee schedule area available to the public 
by not later than July 1, 2011.
    (d) Effective Date.--Subject to subsection (e), the amendments made 
by this section shall apply to the Medicare physician fee schedule for 
2012 and each subsequent year.
    (e) Transition.--Notwithstanding the amendments made by the 
preceding provisions of this section, the Secretary of Health and Human 
Services shall provide for an appropriate transition to the amendments 
made by this section. Under such transition, in the case of payments 
under such fee schedule for services furnished during--
            (1) 2012, 25 percent of such payments shall be based on the 
        amount of payment that would have applied to the services if 
        such amendments had not been enacted and 75 percent of such 
        payment shall be based on the amount of payment that would have 
        applied to the services if such amendments had been fully 
        implemented;
            (2) 2013, 50 percent of such payment shall be based on the 
        amount of payment that would have applied to the services if 
        such amendments had not been enacted and 50 percent of such 
        payment shall be based on the amount of payment that would have 
        applied to the services if such amendments had been fully 
        implemented; and
            (3) 2014 and subsequent years, 100 percent of such payment 
        shall be based on the amount of payment that is applicable 
        under such amendments.

                TITLE IV--LONG-TERM SERVICES PROVISIONS

SEC. 4001. SHORT TITLE.

    This title may be cited as the ``Home and Community Balanced 
Incentives Act of 2009''.

                    Subtitle A--Balancing Incentives

SEC. 4101. ENHANCED FMAP FOR EXPANDING THE PROVISION OF NON-
              INSTITUTIONALLY-BASED LONG-TERM SERVICES AND SUPPORTS.

    (a) Enhanced FMAP To Encourage Expansion.--Section 1905 of the 
Social Security Act (42 U.S.C. 1396d) is amended--
            (1) in the first sentence of subsection (b)--
                    (A) by striking ``, and (4)'' and inserting ``, 
                (4)''; and
                    (B) by inserting before the period the following: 
                ``, and (5) in the case of a balancing incentive 
                payment State, as defined in subsection (y)(1), that 
                meets the conditions described in subsection (y)(2), 
                the Federal medical assistance percentage shall be 
                increased by the applicable number of percentage points 
                determined under subsection (y)(3) for the State with 
                respect to medical assistance described in subsection 
                (y)(4)''; and
            (2) by adding at the end the following new subsection:
    ``(y) State Balancing Incentive Payments Program.--For purposes of 
clause (5) of the first sentence of subsection (b):
            ``(1) Balancing incentive payment state.--A balancing 
        incentive payment State is a State--
                    ``(A) in which less than 50 percent of the total 
                expenditures for medical assistance for fiscal year 
                2009 for long-term services and supports (as defined by 
                the Secretary, subject to paragraph (5)) are for non-
                institutionally-based long-term services and supports 
                described in paragraph (5)(B);
                    ``(B) that submits an application and meets the 
                conditions described in paragraph (2); and
                    ``(C) that is selected by the Secretary to 
                participate in the State balancing incentive payment 
                program established under this subsection.
            ``(2) Conditions.--The conditions described in this 
        paragraph are the following:
                    ``(A) Application.--The State submits an 
                application to the Secretary that includes the 
                following:
                            ``(i) A description of the availability of 
                        non-institutionally-based long-term services 
                        and supports described in paragraph (5)(B) 
                        available (for fiscal years beginning with 
                        fiscal year 2009).
                            ``(ii) A description of eligibility 
                        requirements for receipt of such services.
                            ``(iii) A projection of the number of 
                        additional individuals that the State expects 
                        to provide with such services to during the 5-
                        fiscal-year period that begins with fiscal year 
                        2011.
                            ``(iv) An assurance of the State's 
                        commitment to a consumer-directed long-term 
                        services and supports system that values 
                        quality of life in addition to quality of care 
                        and in which beneficiaries are empowered to 
                        choose providers and direct their own care as 
                        much as possible.
                            ``(v) A proposed budget that details the 
                        State's plan to expand and diversify medical 
                        assistance for non-institutionally-based long-
                        term services and supports described in 
                        paragraph (5)(B) during such 5-fiscal-year 
                        period, and that includes--
                                    ``(I) a description of the new or 
                                expanded offerings of such services 
                                that the State will provide; and
                                    ``(II) the projected costs of the 
                                services identified in subclause (I).
                            ``(vi) A description of how the State 
                        intends to achieve the target spending 
                        percentage applicable to the State under 
                        subparagraph (B).
                            ``(vii) An assurance that the State will 
                        not use Federal funds, revenues described in 
                        section 1903(w)(1), or revenues obtained 
                        through the imposition of beneficiary cost-
                        sharing for medical assistance for non-
                        institutionally-based long-term services and 
                        supports described in paragraph (5)(B) for the 
                        non-Federal share of expenditures for medical 
                        assistance described in paragraph (4).
                    ``(B) Target spending percentages.--
                            ``(i) In the case of a balancing incentive 
                        payment State in which less than 25 percent of 
                        the total expenditures for home and community-
                        based services under the State plan and the 
                        various waiver authorities for fiscal year 2009 
                        are for such services, the target spending 
                        percentage for the State to achieve by not 
                        later than October 1, 2015, is that 25 percent 
                        of the total expenditures for home and 
                        community-based services under the State plan 
                        and the various waiver authorities are for such 
                        services.
                            ``(ii) In the case of any other balancing 
                        incentive payment State, the target spending 
                        percentage for the State to achieve by not 
                        later than October 1, 2015, is that 50 percent 
                        of the total expenditures for home and 
                        community-based services under the State plan 
                        and the various waiver authorities are for such 
                        services.
                    ``(C) Maintenance of eligibility requirements.--The 
                State does not apply eligibility standards, 
                methodologies, or procedures for determining 
                eligibility for medical assistance for non-
                institutionally-based long-term services and supports 
                described in paragraph (5)(B)) that are more 
                restrictive than the eligibility standards, 
                methodologies, or procedures in effect for such 
                purposes on December 31, 2010.
                    ``(D) Use of additional funds.--The State agrees to 
                use the additional Federal funds paid to the State as a 
                result of this subsection only for purposes of 
                providing new or expanded offerings of non-
                institutionally-based long-term services and supports 
                described in paragraph (5)(B) (including expansion 
                through offering such services to increased numbers of 
                beneficiaries of medical assistance under this title).
                    ``(E) Structural changes.--The State agrees to 
                make, not later than the end of the 6-month period that 
                begins on the date the State submits and application 
                under this paragraph, such changes to the 
                administration of the State plan (and, if applicable, 
                to waivers approved for the State that involve the 
                provision of long-term care services and supports) as 
                the Secretary determines, by regulation or otherwise, 
                are essential to achieving an improved balance between 
                the provision of non-institutionally-based long-term 
                services and supports described in paragraph (5)(B) and 
                other long-term services and supports, and which shall 
                include the following:
                            ``(i) `No wrong door'--single entry point 
                        system.--Development of a statewide system to 
                        enable consumers to access all long-term 
                        services and supports through an agency, 
                        organization, coordinated network, or portal, 
                        in accordance with such standards as the State 
                        shall establish and that--
                                    ``(I) shall require such agency, 
                                organization, network, or portal to 
                                provide--
                                            ``(aa) consumers with 
                                        information regarding the 
                                        availability of such services, 
                                        how to apply for such services, 
                                        and other referral services; 
                                        and
                                            ``(bb) information 
                                        regarding, and make 
                                        recommendations for, providers 
                                        of such services; and
                                    ``(II) may, at State option, permit 
                                such agency, organization, network, or 
                                portal to--
                                            ``(aa) determine financial 
                                        and functional eligibility for 
                                        such services and supports; and
                                            ``(bb) provide or refer 
                                        eligible individuals to 
                                        services and supports otherwise 
                                        available in the community 
                                        (under programs other than the 
                                        State program under this 
                                        title), such as housing, job 
                                        training, and transportation.
                            ``(ii) Presumptive eligibility.--At the 
                        option of the State, provision of a 60-day 
                        period of presumptive eligibility for medical 
                        assistance for non-institutionally-based long-
                        term services and supports described in 
                        paragraph (5)(B) for any individual whom the 
                        State has reason to believe will qualify for 
                        such medical assistance (provided that any 
                        expenditures for such medical assistance during 
                        such period are disregarded for purposes of 
                        determining the rate of erroneous excess 
                        payments for medical assistance under section 
                        1903(u)(1)(D)).
                            ``(iii) Case management.--Development, in 
                        accordance with guidance from the Secretary, of 
                        conflict-free case management services to--
                                    ``(I) address transitioning from 
                                receipt of institutionally-based long-
                                term services and supports described in 
                                paragraph (5)(A) to receipt of non-
                                institutionally-based long-term 
                                services and supports described in 
                                paragraph (5)(B); and
                                    ``(II) in conjunction with the 
                                beneficiary, assess the beneficiary's 
                                needs and , if appropriate, the needs 
                                of family caregivers for the 
                                beneficiary, and develop a service 
                                plan, arrange for services and 
                                supports, support the beneficiary (and, 
                                if appropriate, the caregivers) in 
                                directing the provision of services and 
                                supports, for the beneficiary, and 
                                conduct ongoing monitoring to assure 
                                that services and supports are 
                                delivered to meet the beneficiary's 
                                needs and achieve intended outcomes.
                            ``(iv) Core standardized assessment 
                        instruments.--Development of core standardized 
                        assessment instruments for determining 
                        eligibility for non-institutionally-based long-
                        term services and supports described in 
                        paragraph (5)(B), which shall be used in a 
                        uniform manner throughout the State, to--
                                    ``(I) assess a beneficiary's 
                                eligibility and functional level in 
                                terms of relevant areas that may 
                                include medical, cognitive, and 
                                behavioral status, as well as daily 
                                living skills, and vocational and 
                                communication skills;
                                    ``(II) based on the assessment 
                                conducted under subclause (I), 
                                determine a beneficiary's needs for 
                                training, support services, medical 
                                care, transportation, and other 
                                services, and develop an individual 
                                service plan to address such needs;
                                    ``(III) conduct ongoing monitoring 
                                based on the service plan; and
                                    ``(IV) require reporting of collect 
                                data for purposes of comparison among 
                                different service models.
                    ``(F) Data collection.--Collecting from providers 
                of services and through such other means as the State 
                determines appropriate the following data:
                            ``(i) Services data.--Services data from 
                        providers of non-institutionally-based long-
                        term services and supports described in 
                        paragraph (5)(B) on a per-beneficiary basis and 
                        in accordance with such standardized coding 
                        procedures as the State shall establish in 
                        consultation with the Secretary.
                            ``(ii) Quality data.--Quality data on a 
                        selected set of core quality measures agreed 
                        upon by the Secretary and the State that are 
                        linked to population-specific outcomes measures 
                        and accessible to providers.
                            ``(iii) Outcomes measures.--Outcomes 
                        measures data on a selected set of core 
                        population-specific outcomes measures agreed 
                        upon by the Secretary and the State that are 
                        accessible to providers and include--
                                    ``(I) measures of beneficiary and 
                                family caregiver experience with 
                                providers;
                                    ``(II) measures of beneficiary and 
                                family caregiver satisfaction with 
                                services; and
                                    ``(III) measures for achieving 
                                desired outcomes appropriate to a 
                                specific beneficiary, including 
                                employment, participation in community 
                                life, health stability, and prevention 
                                of loss in function.
            ``(3) Applicable number of percentage points increase in 
        fmap.--The applicable number of percentage points are--
                    ``(A) in the case of a balancing incentive payment 
                State subject to the target spending percentage 
                described in paragraph (2)(B)(i), 5 percentage points; 
                and
                    ``(B) in the case of any other balancing incentive 
                payment State, 2 percentage points.
            ``(4) Eligible medical assistance expenditures.--
                    ``(A) In general.--Subject to subparagraph (B), 
                medical assistance described in this paragraph is 
                medical assistance for non-institutionally-based long-
                term services and supports described in paragraph 
                (5)(B) that is provided during the period that begins 
                on October 1, 2011, and ends on September 30, 2015.
                    ``(B) Limitation on payments.--In no case may the 
                aggregate amount of payments made by the Secretary to 
                balancing incentive payment States under this 
                subsection during the period described in subparagraph 
                (A), or to a State to which paragraph (6) of the first 
                sentence of subsection (b) applies, exceed 
                $3,000,000,000.
            ``(5) Long-term services and supports defined.--In this 
        subsection, the term `long-term services and supports' has the 
        meaning given that term by Secretary and shall include the 
        following:
                    ``(A) Institutionally-based long-term services and 
                supports.--Services provided in an institution, 
                including the following:
                            ``(i) Nursing facility services.
                            ``(ii) Services in an intermediate care 
                        facility for the mentally retarded described in 
                        subsection (a)(15).
                    ``(B) Non-institutionally-based long-term services 
                and supports.--Services not provided in an institution, 
                including the following:
                            ``(i) Home and community-based services 
                        provided under subsection (c), (d), or (i), of 
                        section 1915 or under a waiver under section 
                        1115.
                            ``(ii) Home health care services.
                            ``(iii) Personal care services.
                            ``(iv) Services described in subsection 
                        (a)(26) (relating to PACE program services).
                            ``(v) Self-directed personal assistance 
                        services described in section 1915(j)''.
    (b) Enhanced FMAP for Certain States To Maintain the Provision of 
Home and Community-Based Services.--The first sentence of section 
1905(b) of such Act (42 U.S.C. 1396d(b)), as amended by subsection (a), 
is amended--
            (1) by striking ``, and (5)'' and inserting ``, (5)''; and
            (2) by inserting before the period the following: ``, and 
        (6) in the case of a State in which at least 50 percent of the 
        total expenditures for medical assistance for fiscal year 2009 
        for long-term services and supports (as defined by the 
        Secretary for purposes of subsection (y)) are for non-
        institutionally-based long-term services and supports described 
        in subsection (y)(5)(B), and which satisfies the requirements 
        of subparagraphs (A) (other than clauses (iii), (v), and (vi)), 
        (C), and (F) of subsection (y)(2), and has implemented the 
        structural changes described in each clause of subparagraph (E) 
        of that subsection, the Federal medical assistance percentage 
        shall be increased by 1 percentage point with respect to 
        medical assistance described in subparagraph (A) of subsection 
        (y)(4) (but subject to the limitation described in subparagraph 
        (B) of that subsection)''.
    (c) Grants To Support Structural Changes.--
            (1) In general.--The Secretary of Health and Human Services 
        shall award grants to States for the following purposes:
                    (A) To support the development of common national 
                set of coding methodologies and databases related to 
                the provision of non-institutionally-based long-term 
                services and supports described in paragraph (5)(B) of 
                section 1905(y) of the Social Security Act (as added by 
                subsection (a)).
                    (B) To make structural changes described in 
                paragraph (2)(E) of section 1905(y) to the State 
                Medicaid program.
            (2) Priority.--In awarding grants for the purpose described 
        in paragraph (1)(A), the Secretary of Health and Human Services 
        shall give priority to States in which at least 50 percent of 
        the total expenditures for medical assistance under the State 
        Medicaid program for fiscal year 2009 for long-term services 
        and supports, as defined by the Secretary for purposes of 
        section 1905(y) of the Social Security Act, are for non-
        institutionally-based long-term services and supports described 
        in paragraph (5)(B) of such section.
            (3) Collaboration.--States awarded a grant for the purpose 
        described in paragraph (1)(A) shall collaborate with other 
        States, the National Governor's Association, the National 
        Conference of State Legislatures, the National Association of 
        State Medicaid Directors, the National Association of State 
        Directors of Developmental Disabilities, and other appropriate 
        organizations in developing specifications for a common 
        national set of coding methodologies and databases.
            (4) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this subsection, such sums as 
        may be necessary for each of fiscal years 2010 through 2012.
    (d) Authority for Individualized Budgets Under Waivers To Provide 
Home and Community-Based Services.--In the case of any waiver to 
provide home and community-based services under subsection (c) or (d) 
of section 1915 of the Social Security Act (42 U.S.C. 1396n) or section 
1115 of such Act (42 U.S.C. 1315), that is approved or renewed after 
the date of enactment of this Act, the Secretary of Health and Human 
Services shall permit a State to establish individualized budgets that 
identify the dollar value of the services and supports to be provided 
to an individual under the waiver.
    (e) Oversight and Assessment.--
            (1) Development of standardized reporting requirements.--
                    (A) Standardization of data and outcome measures.--
                The Secretary of Health and Human Services shall 
                consult with States and the National Governor's 
                Association, the National Conference of State 
                Legislatures, the National Association of State 
                Medicaid Directors, the National Association of State 
                Directors of Developmental Disabilities, and other 
                appropriate organizations to develop specifications for 
                standardization of--
                            (i) reporting of assessment data for long-
                        term services and supports (as defined by the 
                        Secretary for purposes of section 1905(y)(5) of 
                        the Social Security Act) for each population 
                        served, including information standardized for 
                        purposes of certified EHR technology (as 
                        defined in section 1903(t)(3)(A) of the Social 
                        Security Act (42 U.S.C. 1396b(t)(3)(A)) and 
                        under other electronic medical records 
                        initiatives; and
                            (ii) outcomes measures that track 
                        assessment processes for long-term services and 
                        supports (as so defined) for each such 
                        population that maintain and enhance individual 
                        function, independence, and stability.
            (2) Administration of home and community services.--The 
        Secretary of Health and Human Services shall promulgate 
        regulations to ensure that all States develop service systems 
        that are designed to--
                    (A) allocate resources for services in a manner 
                that is responsive to the changing needs and choices of 
                beneficiaries receiving non-institutionally-based long-
                term services and supports described in paragraph 
                (5)(B) of section 1905(y) of the Social Security Act 
                (as added by subsection (a)) (including such services 
                and supports that are provided under programs other the 
                State Medicaid program), and that provides strategies 
                for beneficiaries receiving such services to maximize 
                their independence;
                    (B) provide the support and coordination needed for 
                a beneficiary in need of such services (and their 
                family caregivers or representative, if applicable) to 
                design an individualized, self-directed, community-
                supported life; and
                    (C) improve coordination among all providers of 
                such services under federally and State-funded programs 
                in order to--
                            (i) achieve a more consistent 
                        administration of policies and procedures 
                        across programs in relation to the provision of 
                        such services; and
                            (ii) oversee and monitor all service system 
                        functions to assure--
                                    (I) coordination of, and 
                                effectiveness of, eligibility 
                                determinations and individual 
                                assessments; and
                                    (II) development and service 
                                monitoring of a complaint system, a 
                                management system, a system to qualify 
                                and monitor providers, and systems for 
                                role-setting and individual budget 
                                determinations.
            (3) Monitoring.--The Secretary of Health and Human Services 
        shall assess on an ongoing basis and based on measures 
        specified by the Agency for Healthcare Research and Quality, 
        the safety and quality of non-institutionally-based long-term 
        services and supports described in paragraph (5)(B) of section 
        1905(y) of that Act provided to beneficiaries of such services 
        and supports and the outcomes with regard to such 
        beneficiaries' experiences with such services. Such oversight 
        shall include examination of--
                    (A) the consistency, or lack thereof, of such 
                services in care plans as compared to those services 
                that were actually delivered; and
                    (B) the length of time between when a beneficiary 
                was assessed for such services, when the care plan was 
                completed, and when the beneficiary started receiving 
                such services.
            (4) GAO study and report.--The Comptroller General of the 
        United States shall study the longitudinal costs of Medicaid 
        beneficiaries receiving long-term services and supports (as 
        defined by the Secretary for purposes of section 1905(y)(5) of 
        the Social Security Act) over 5-year periods across various 
        programs, including the non-institutionally-based long-term 
        services and supports described in paragraph (5)(B) of such 
        section, PACE program services under section 1894 of the Social 
        Security Act (42 U.S.C. 1395eee, 1396u-4), and services 
        provided under specialized MA plans for special needs 
        individuals under part C of title XVIII of the Social Security 
        Act.

 Subtitle B--Strengthening the Medicaid Home and Community-Based State 
                         Plan Amendment Option

SEC. 4201. REMOVAL OF BARRIERS TO PROVIDING HOME AND COMMUNITY-BASED 
              SERVICES UNDER STATE PLAN AMENDMENT OPTION FOR 
              INDIVIDUALS IN NEED.

    (a) Parity With Income Eligibility Standard for Institutionalized 
Individuals.--Paragraph (1) of section 1915(i) of the Social Security 
Act (42 U.S.C. 1396n(i)) is amended by striking ``150 percent of the 
poverty line (as defined in section 2110(c)(5))'' and inserting ``300 
percent of the supplemental security income benefit rate established by 
section 1611(b)(1)''.
    (b) Additional State Options.--Section 1915(i) of the Social 
Security Act (42 U.S.C. 1396n(i)) is amended by adding at the end the 
following new paragraphs:
            ``(6) State option to provide home and community-based 
        services to individuals eligible for services under a waiver.--
                    ``(A) In general.--A State that provides home and 
                community-based services in accordance with this 
                subsection to individuals who satisfy the needs-based 
                criteria for the receipt of such services established 
                under paragraph (1)(A) may, in addition to continuing 
                to provide such services to such individuals, elect to 
                provide home and community-based services in accordance 
                with the requirements of this paragraph to individuals 
                who are eligible for home and community-based services 
                under a waiver approved for the State under subsection 
                (c), (d), or (e) or under section 1115 to provide such 
                services, but only for those individuals whose income 
                does not exceed 300 percent of the supplemental 
                security income benefit rate established by section 
                1611(b)(1).
                    ``(B) Application of same requirements for 
                individuals satisfying needs-based criteria.--Subject 
                to subparagraph (C), a State shall provide home and 
                community-based services to individuals under this 
                paragraph in the same manner and subject to the same 
                requirements as apply under the other paragraphs of 
                this subsection to the provision of home and community-
                based services to individuals who satisfy the needs-
                based criteria established under paragraph (1)(A).
                    ``(C) Authority to offer different type, amount, 
                duration, or scope of home and community-based 
                services.--A State may offer home and community-based 
                services to individuals under this paragraph that 
                differ in type, amount, duration, or scope from the 
                home and community-based services offered for 
                individuals who satisfy the needs-based criteria 
                established under paragraph (1)(A), so long as such 
                services are within the scope of services described in 
                paragraph (4)(B) of subsection (c) for which the 
                Secretary has the authority to approve a waiver and do 
                not include room or board.
            ``(7) State option to offer home and community-based 
        services to specific, targeted populations.--
                    ``(A) In general.--A State may elect in a State 
                plan amendment under this subsection to target the 
                provision of home and community-based services under 
                this subsection to specific populations and to differ 
                the type, amount, duration, or scope of such services 
                to such specific populations.
                    ``(B) 5-year term.--
                            ``(i) In general.--An election by a State 
                        under this paragraph shall be for a period of 5 
                        years.
                            ``(ii) Phase-in of services and eligibility 
                        permitted during initial 5-year period.--A 
                        State making an election under this paragraph 
                        may, during the first 5-year period for which 
                        the election is made, phase-in the enrollment 
                        of eligible individuals, or the provision of 
                        services to such individuals, or both, so long 
                        as all eligible individuals in the State for 
                        such services are enrolled, and all such 
                        services are provided, before the end of the 
                        initial 5-year period.
                    ``(C) Renewal.--An election by a State under this 
                paragraph may be renewed for additional 5-year terms if 
                the Secretary determines, prior to beginning of each 
                such renewal period, that the State has--
                            ``(i) adhered to the requirements of this 
                        subsection and paragraph in providing services 
                        under such an election; and
                            ``(ii) met the State's objectives with 
                        respect to quality improvement and beneficiary 
                        outcomes.''.
    (c) Removal of Limitation on Scope of Services.--Paragraph (1) of 
section 1915(i) of the Social Security Act (42 U.S.C. 1396n(i)), as 
amended by subsection (a), is amended by striking ``or such other 
services requested by the State as the Secretary may approve''.
    (d) Optional Eligibility Category To Provide Full Medicaid Benefits 
to Individuals Receiving Home and Community-Based Services Under a 
State Plan Amendment.--
            (1) In general.--Section 1902(a)(10)(A)(ii) of the Social 
        Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended--
                    (A) in subclause (XVIII), by striking ``or'' at the 
                end;
                    (B) in subclause (XIX), by adding ``or'' at the 
                end; and
                    (C) by inserting after subclause (XIX), the 
                following new subclause:
                                    ``(XX) who are eligible for home 
                                and community-based services under 
                                needs-based criteria established under 
                                paragraph (1)(A) of section 1915(i), or 
                                who are eligible for home and 
                                community-based services under 
                                paragraph (6) of such section, and who 
                                will receive home and community-based 
                                services pursuant to a State plan 
                                amendment under such subsection;''.
            (2) Conforming amendments.--
                    (A) Section 1903(f)(4) of the Social Security Act 
                (42 U.S.C. 1396b(f)(4)) is amended in the matter 
                preceding subparagraph (A), by inserting 
                ``1902(a)(10)(A)(ii)(XX),'' after 
                ``1902(a)(10)(A)(ii)(XIX),''.
                    (B) Section 1905(a) of the Social Security Act (42 
                U.S.C. 1396d(a)) is amended in the matter preceding 
                paragraph (1)--
                            (i) in clause (xii), by striking ``or'' at 
                        the end;
                            (ii) in clause (xiii), by adding ``or'' at 
                        the end; and
                            (iii) by inserting after clause (xiii) the 
                        following new clause:
            ``(xiv) individuals who are eligible for home and 
        community-based services under needs-based criteria established 
        under paragraph (1)(A) of section 1915(i), or who are eligible 
        for home and community-based services under paragraph (6) of 
        such section, and who will receive home and community-based 
        services pursuant to a State plan amendment under such 
        subsection,''.
    (e) Elimination of Option To Limit Number of Eligible Individuals 
or Length of Period for Grandfathered Individuals if Eligibility 
Criteria Is Modified.--Paragraph (1) of section 1915(i) of such Act (42 
U.S.C. 1396n(i)) is amended--
            (1) by striking subparagraph (C) and inserting the 
        following:
                    ``(C) Projection of number of individuals to be 
                provided home and community-based services.--The State 
                submits to the Secretary, in such form and manner, and 
                upon such frequency as the Secretary shall specify, the 
                projected number of individuals to be provided home and 
                community-based services.''; and
            (2) in subclause (II) of subparagraph (D)(ii), by striking 
        ``to be eligible for such services for a period of at least 12 
        months beginning on the date the individual first received 
        medical assistance for such services'' and inserting ``to 
        continue to be eligible for such services after the effective 
        date of the modification and until such time as the individual 
        no longer meets the standard for receipt of such services under 
        such pre-modified criteria''.
    (f) Elimination of Option To Waive Statewideness; Addition of 
Option to Waive Comparability.--Paragraph (3) of section 1915(i) of 
such Act (42 U.S.C. 1396n(3)) is amended by striking ``1902(a)(1) 
(relating to statewideness)'' and inserting ``1902(a)(10)(B) (relating 
to comparability)''.
    (g) Effective Date.--The amendments made by this section take 
effect on the first day of the first fiscal year quarter that begins 
after the date of enactment of this Act.

SEC. 4202. MANDATORY APPLICATION OF SPOUSAL IMPOVERISHMENT PROTECTIONS 
              TO RECIPIENTS OF HOME AND COMMUNITY-BASED SERVICES.

    (a) In General.--Section 1924(h)(1)(A) of the Social Security Act 
(42 U.S.C. 1396r-5(h)(1)(A)) is amended by striking ``(at the option of 
the State) is described in section 1902(a)(10)(A)(ii)(VI)'' and 
inserting ``is eligible for medical assistance for home and community-
based services under subsection (c), (d), (e), or (i) of section 
1915''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect on October 1, 2009.

SEC. 4203. STATE AUTHORITY TO ELECT TO EXCLUDE UP TO 6 MONTHS OF 
              AVERAGE COST OF NURSING FACILITY SERVICES FROM ASSETS OR 
              RESOURCES FOR PURPOSES OF ELIGIBILITY FOR HOME AND 
              COMMUNITY-BASED SERVICES.

    (a) In General.--Section 1917 of the Social Security Act (42 U.S.C. 
1396p) is amended by adding at the end the following new subsection:
    ``(i) State Authority To Exclude up to 6 Months of Average Cost of 
Nursing Facility Services From Home and Community-Based Services 
Eligibility Determinations.--Nothing in this section or any other 
provision of this title, shall be construed as prohibiting a State from 
excluding from any determination of an individual's assets or resources 
for purposes of determining the eligibility of the individual for 
medical assistance for home and community-based services under 
subsection (c), (d), (e), or (i) of section 1915 (if a State imposes an 
limitation on assets or resources for purposes of eligibility for such 
services), an amount equal to the product of the amount applicable 
under subsection (c)(1)(E)(ii)(II) (at the time such determination is 
made) and such number, not to exceed 6, as the State may elect.''.
    (b) Rule of Construction.--Nothing in the amendment made by 
subsection (a) shall be construed as affecting a State's option to 
apply less restrictive methodologies under section 1902(r)(2) for 
purposes of determining income and resource eligibility for individuals 
specified in that section.

      Subtitle C--Coordination of Home and Community-Based Waivers

SEC. 4301. STREAMLINED PROCESS FOR COMBINED WAIVERS UNDER SUBSECTIONS 
              (B) AND (C) OF SECTION 1915.

    Not later than 90 days after the date of enactment of this Act, the 
Secretary of Health and Human Services shall create a template to 
streamline the process of approving, monitoring, evaluating, and 
renewing State proposals to conduct a program that combines the waiver 
authority provided under subsections (b) and (c) of section 1915 of the 
Social Security Act (42 U.S.C. 1396n) into a single program under which 
the State provides home and community-based services to individuals 
based on individualized assessments and care plans (in this section 
referred to as the ``combined waivers program''). The template required 
under this section shall provide for the following:
            (1) A standard 5-year term for conducting a combined 
        waivers program.
            (2) Harmonization of any requirements under subsections (b) 
        and (c) of such section that overlap.
            (3) An option for States to elect, during the first 5-year 
        term for which the combined waivers program is approved to 
        phase-in the enrollment of eligible individuals, or the 
        provision of services to such individuals, or both, so long as 
        all eligible individuals in the State for such services are 
        enrolled, and all such services are provided, before the end of 
        the initial 5-year period.
            (4) Examination by the Secretary, prior to each renewal of 
        a combined waivers program, of how well the State has--
                    (A) adhered to the combined waivers program 
                requirements; and
                    (B) performed in meeting the State's objectives for 
                the combined waivers program, including with respect to 
                quality improvement and beneficiary outcomes.

         TITLE V--HOME AND COMMUNITY-BASED SERVICES PROVISIONS

SEC. 5001. SHORT TITLE.

    This Act may be cited as the ``Project 2020: Building on the 
Promise of Home and Community-Based Services Act of 2009''.

SEC. 5002. LONG-TERM SERVICES AND SUPPORTS.

    The Social Security Act (42 U.S.C. 301 et seq.) is amended by 
adding at the end the following:

             ``TITLE XXII--LONG-TERM SERVICES AND SUPPORTS

``SEC. 2201. DEFINITIONS.

    ``Except as otherwise provided, the terms used in this title have 
the meanings given the terms in section 102 of the Older Americans Act 
of 1965 (42 U.S.C. 3002).

            ``Subtitle A--Single-Entry Point System Program

``SEC. 2211. STATE SINGLE-ENTRY POINT SYSTEMS.

    ``(a) Definitions.--In this title:
            ``(1) Long-term services and supports.--The term `long-term 
        services and supports' means any service (including a disease 
        prevention and health promotion service, an in-home service, or 
        a case management service), care, or item (including an 
        assistive device) that is--
                    ``(A) intended to assist individuals in coping 
                with, and, to the extent practicable, compensating for, 
                functional impairment in carrying out activities of 
                daily living;
                    ``(B) furnished at home, in a community care 
                setting, including a small community care setting (as 
                defined in section 1929(g)(1)) and a large community 
                care setting (as defined in section 1929(h)(1)), or in 
                a long-term care facility; and
                    ``(C) not furnished to diagnose, treat, or cure a 
                medical disease or condition.
            ``(2) Single-entry point system.--The term `single-entry 
        point system' means any coordinated system for providing--
                    ``(A) comprehensive information to consumers and 
                caregivers on the full range of available public and 
                private long-term services and supports, options, 
                service providers, and resources, including information 
                on the availability of integrated long-term care, 
                including consumer directed care options;
                    ``(B) personal counseling to assist individuals in 
                assessing their existing or anticipated long-term care 
                needs, and developing and implementing a plan for long-
                term care designed to meet their specific needs and 
                circumstances; and
                    ``(C) consumers and caregivers access to the range 
                of publicly supported and privately supported long-term 
                services and supports that are available.
    ``(b) Program.--The Secretary shall establish and carry out a 
single-entry point system program. In carrying out the program, the 
Secretary shall make grants to States, from allotments described in 
subsection (c), to pay for the Federal share of the cost of 
establishing State single-entry point systems.
    ``(c) Allotments.--
            ``(1) Allotments to indian tribes and territories.--
                    ``(A) Reservation.--The Secretary shall reserve 
                from the funds made available under subsection (g)--
                            ``(i) for fiscal year 2010, $1,962,456; and
                            ``(ii) for each subsequent fiscal year, 
                        $1,962,456, increased by the percentage 
                        increase in the Consumer Price Index for All 
                        Urban Consumers, between October of the fiscal 
                        year preceding the subsequent fiscal year and 
                        October 2007.
                    ``(B) Allotments.--The Secretary shall use the 
                funds reserved under subparagraph (A) to make 
                allotments to--
                            ``(i) Indian tribes; and
                            ``(ii) Guam, American Samoa, the 
                        Commonwealth of the Northern Mariana Islands, 
                        the Commonwealth of Puerto Rico, and the United 
                        States Virgin Islands.
            ``(2) Allotments to states.--
                    ``(A) In general.--
                            ``(i) Amount.--The Secretary shall allot to 
                        each eligible State for a fiscal year the sum 
                        of the fixed amount determined under 
                        subparagraph (B), and the allocation determined 
                        under subparagraph (C), for the State.
                            ``(ii) Subgrants to area agencies on 
                        aging.--
                                    ``(I) In general.--Each State 
                                agency receiving an allotment under 
                                clause (i) shall use such allotment to 
                                make subgrants to area agencies on 
                                aging that can demonstrate performance 
                                capacity to carry out activities 
                                described in this section whether such 
                                area agency on aging carries out the 
                                activities directly or through contract 
                                with an aging network or disability 
                                entity.
                                    ``(II) Subgrants to other 
                                entities.--A State agency may make 
                                subgrants described in subclause (I) to 
                                other qualified aging network or 
                                disability entities only if the area 
                                agency on aging chooses not to apply 
                                for a subgrant or is not able to 
                                demonstrate performance capacity to 
                                carry out the activities described in 
                                this section.
                                    ``(III) Subgrantee recipient 
                                subgrants.--An administrator of a 
                                single-entry point system established 
                                by a State receiving an allotment under 
                                clause (i) shall make any necessary 
                                subgrants to key partners involved in 
                                developing, planning, or implementing 
                                the single-entry point system. Such 
                                partners may include centers for 
                                independent living (as defined in 
                                section 702 of the Rehabilitation Act 
                                of 1973 (29 U.S.C. 796a)).
                    ``(B) Fixed amounts for states.--
                            ``(i) Reservation.--The Secretary shall 
                        reserve from the funds made available under 
                        subsection (g)--
                                    ``(I) for fiscal year 2010, 
                                $15,759,000; and
                                    ``(II) for each subsequent fiscal 
                                year, $15,759,000, increased by the 
                                percentage increase in the Consumer 
                                Price Index for All Urban Consumers, 
                                between October of the fiscal year 
                                preceding the subsequent fiscal year 
                                and October 2007.
                            ``(ii) Fixed amounts.--The Secretary shall 
                        use the funds reserved under clause (i) to 
                        provide equal fixed amounts to the States.
                    ``(C) Allocation for states.--The Secretary shall 
                allocate to each eligible State for a fiscal year an 
                amount that bears the same relationship to the funds 
                made available under subsection (g) (and not reserved 
                under paragraph (1) or subparagraph (B)) for that 
                fiscal year as the number of persons who are either 
                older individuals or individuals with disabilities in 
                that State bears to the number of such persons or 
                individuals in all the States.
                    ``(D) Determination of number of persons.--
                            ``(i) Older individuals.--The number of 
                        older individuals in any State and in all 
                        States shall be determined by the Secretary on 
                        the basis of the most recent data available 
                        from the Bureau of the Census, and other 
                        reliable demographic data satisfactory to the 
                        Secretary.
                            ``(ii) Individuals with disabilities.--The 
                        number of individuals with disabilities in any 
                        State and in all States shall be determined by 
                        the Secretary on the basis of the most recent 
                        data available from the American Community 
                        Survey, and other reliable demographic data 
                        satisfactory to the Secretary, on individuals 
                        who have a sensory disability, physical 
                        disability, mental disability, self-care 
                        disability, go-outside-home disability, or 
                        employment disability.
            ``(3) Eligibility.--In addition to the States determined by 
        the Secretary to be eligible for a grant under this section, a 
        State that receives a Federal grant for an aging and disability 
        resource center is eligible for a grant under this section.
            ``(4) Definition.--In this subsection, the term `State' 
        shall not include any jurisdiction described in paragraph 
        (1)(B)(ii).
    ``(d) Applications.--
            ``(1) In general.--To be eligible to receive an initial 
        grant under this section, a State agency shall, after 
        consulting and coordinating with consumers, other stakeholders, 
        and area agencies on aging in the State, if any, submit an 
        application to the Secretary at such time, in such manner, and 
        containing the following information:
                    ``(A) Evidence of substantial involvement of 
                stakeholders and agencies in the State that are 
                administering programs that will be the subject of 
                referrals.
                    ``(B) The applicant shall establish or designate a 
                collaborative board to ensure meaningful involvement of 
                stakeholders in the development, planning, 
                implementation, and evaluation of a single-entry point 
                system consistent with the following:
                            ``(i) The collaborative board shall be 
                        composed of--
                                    ``(I) individuals representing all 
                                populations served by the applicant's 
                                single-entry point system, including 
                                older adults and individuals from 
                                diverse backgrounds who have a 
                                disability or a chronic condition 
                                requiring long-term support;
                                    ``(II) a representative from the 
                                local center for independent living (as 
                                defined in section 702 of the 
                                Rehabilitation Act of 1973 (29 U.S.C. 
                                796a)), and representatives from other 
                                organizations that provide services to 
                                the individuals served by the system 
                                and those who advocate on behalf of 
                                such individuals; and
                                    ``(III) representatives of the 
                                government and non-governmental 
                                agencies that are affected by the 
                                system.
                            ``(ii) The applicant shall work in 
                        conjunction with the collaborative board on--
                                    ``(I) the design and operations of 
                                the single-entry point system;
                                    ``(II) stakeholder input; and
                                    ``(III) other program and policy 
                                development issues related to the 
                                single-entry point system.
                            ``(iii) An advisory board established under 
                        the Real Choice Systems Change Program or for 
                        an existing single-entry point system may be 
                        used to carry out the activities of a 
                        collaborative board under this subparagraph if 
                        such advisory board meets the requirements 
                        under clause (i).
                    ``(C) The applicant's plan for providing--
                            ``(i) comprehensive information on the full 
                        range of available public and private long-term 
                        services and supports options, providers, and 
                        resources, including building awareness of the 
                        single-entry point system as a resource;
                            ``(ii) objective, neutral, and personal 
                        information, counseling, and assistance to 
                        individuals and their caregivers in assessing 
                        their existing or anticipated long-term care 
                        needs, and developing and implementing a plan 
                        for long-term care to meet their needs;
                            ``(iii) for eligibility screening and 
                        referral for services;
                            ``(iv) for stakeholder input;
                            ``(v) for a management information system; 
                        and
                            ``(vi) for an evaluation of the 
                        effectiveness of the single-entry point system.
                    ``(D) A specification of the period of the grant 
                request, which shall include not less than 3 
                consecutive fiscal years in the 5-fiscal-year period 
                beginning with fiscal year 2010.
                    ``(E) Such other information as the Secretary 
                determines appropriate.
            ``(2) Application for continuation.--
                    ``(A) In general.--A State that receives an initial 
                grant under this section shall apply, after consulting 
                and coordinating with the area agencies on aging, for a 
                continuation of the initial grant, which includes a 
                description of any significant changes to the 
                information provided in the initial application and 
                such data concerning performance measures related to 
                the requirements in the initial application as the 
                Secretary shall require.
                    ``(B) Effect.--The requirement under subparagraph 
                (A) shall be in effect through fiscal year 2020.
    ``(e) Use of Funds.--
            ``(1) In general.--A State that receives a grant under this 
        section shall use the funds made available through the grant 
        to--
                    ``(A) establish a State single-entry point system, 
                to enable older individuals and individuals with 
                disabilities and their caregivers to obtain resources 
                concerning long-term services and supports options; and
                    ``(B) provide information on, access to, and 
                assistance regarding long-term services and supports.
            ``(2) Services.--In particular, the State single-entry 
        point system shall be the referral source to--
                    ``(A) provide information about long-term care 
                planning and available long-term services and supports 
                through a variety of media (such as websites, seminars, 
                and pamphlets);
                    ``(B) provide assistance with making decisions 
                about long-term services and supports and determining 
                the most appropriate services through options 
                counseling, future financial planning, and case 
                management;
                    ``(C) provide streamlined access to and assistance 
                with applying for federally funded long-term care 
                benefits (including medical assistance under title XIX, 
                Medicare skilled nursing facility services, services 
                under title III of the Older Americans Act of 1965 (42 
                U.S.C. 3021 et seq.), the services of Aging and 
                Disability Resource Centers), and State-funded and 
                privately funded long-term care benefits, through 
                efforts to shorten and simplify the eligibility 
                processes for older individuals and individuals with 
                disabilities;
                    ``(D) provide referrals to the State evidence-based 
                disease prevention and health promotion programs under 
                subtitle B;
                    ``(E) allocate the State funds available under 
                subtitle C and carry out the State enhanced nursing 
                home diversion program under subtitle C; and
                    ``(F) and provide information about, other services 
                available in the State that may assist an individual to 
                remain in the community, including the Medicare and 
                Medicaid programs, the State health insurance 
                assistance program, the supplemental nutrition 
                assistance program established under the Food and 
                Nutrition Act of 2008 (7 U.S.C. 2011 et seq.), and the 
                Low-Income Home Energy Assistance Program under the 
                Low-Income Home Energy Assistance Act of 1981 (42 
                U.S.C. 8621 et seq.), and such other services, as the 
                State shall include.
            ``(3) Collaborative arrangements.--
                    ``(A) Center for independent living.--Each entity 
                receiving an allotment under subsection (c) shall 
                involve in the planning and implementation of the 
                single-entry point system the local center for 
                independent living (as defined in section 702 of the 
                Rehabilitation Act of 1973 (29 U.S.C. 796a)), which 
                provides information, referral, assistance, or services 
                to individuals with disabilities.
                    ``(B) Other entities.--To the extent practicable, 
                the State single-entry point system is encouraged to 
                enter into collaborative arrangements with aging and 
                disability programs, service providers, agencies, the 
                direct care work force, and other entities in order to 
                ensure that information about such services may be made 
                available to individuals accessing the State single-
                entry point system.
    ``(f) Federal Share.--
            ``(1) In general.--The Federal share of the cost described 
        in subsection (b) shall be 75 percent.
            ``(2) Non-federal share.--The State may provide the non-
        Federal share of the cost in cash or in-kind, fairly evaluated, 
        including plant, equipment, or services. The State may provide 
        the non-Federal share from State, local, or private sources.
    ``(g) Funding.--
            ``(1) In general.--The Secretary shall use amounts made 
        available under paragraph (2) to make the grants described in 
        subsection (b).
            ``(2) Funding.--There are authorized to be appropriated to 
        carry out this section--
                    ``(A) $30,900,000 for fiscal year 2010;
                    ``(B) $38,264,000 for fiscal year 2011;
                    ``(C) $48,410,000 for fiscal year 2012;
                    ``(D) $53,560,000 for fiscal year 2013;
                    ``(E) $63,860,000 for fiscal year 2014;
                    ``(F) $69,010,000 for fiscal year 2015;
                    ``(G) $74,160,000 for fiscal year 2016;
                    ``(H) $79,310,000 for fiscal year 2017;
                    ``(I) $84,460,000 for fiscal year 2018;
                    ``(J) $89,610,000 for fiscal year 2019; and
                    ``(K) $95,790,000 for fiscal year 2020.
            ``(3) Availability.--Funds appropriated under paragraph (2) 
        shall remain available until expended.

                  ``Subtitle B--Healthy Living Program

``SEC. 2221. EVIDENCE-BASED DISEASE PREVENTION AND HEALTH PROMOTION 
              PROGRAMS.

    ``(a) Program.--The Secretary shall establish and carry out a 
healthy living program. In carrying out the program, the Secretary 
shall make grants to State agencies, from allotments described in 
subsection (b), to pay for the Federal share of the cost of carrying 
out evidence-based disease prevention and health promotion programs.
    ``(b) Allotments.--
            ``(1) Allotments to indian tribes and territories.--
                    ``(A) Reservation.--The Secretary shall reserve 
                from the funds made available under subsection (g)--
                            ``(i) for fiscal year 2010, $1,500,952; and
                            ``(ii) for each subsequent fiscal year, 
                        $1,500,952, increased by the percentage 
                        increase in the Consumer Price Index for All 
                        Urban Consumers, between October of the fiscal 
                        year preceding the subsequent fiscal year and 
                        October 2007.
                    ``(B) Allotments.--The Secretary shall use the 
                reserved funds under subparagraph (A) to make 
                allotments to--
                            ``(i) Indian tribes; and
                            ``(ii) Guam, American Samoa, the 
                        Commonwealth of the Northern Mariana Islands, 
                        the Commonwealth of Puerto Rico, and the United 
                        States Virgin Islands.
            ``(2) In general.--
                    ``(A) Amounts.--
                            ``(i) In general.--Except as provided in 
                        paragraph (3), the Secretary shall allot to 
                        each eligible State for a fiscal year an amount 
                        that bears the same relationship to the funds 
                        made available under this section and not 
                        reserved under paragraph (1) for that fiscal 
                        year as the number of older individuals in the 
                        State bears to the number of older individuals 
                        in all the States.
                            ``(ii) Older individuals.--The number of 
                        older individuals in any State and in all 
                        States shall be determined by the Secretary on 
                        the basis of the most recent data available 
                        from the Bureau of the Census, and other 
                        reliable demographic data satisfactory to the 
                        Secretary.
                    ``(B) Subgrants.--
                            ``(i) In general.--Each State agency that 
                        receives an amount under subparagraph (A) shall 
                        award subgrants to area agencies on aging that 
                        can demonstrate performance capacity to carry 
                        out activities under this section whether such 
                        area agency on aging carries out the activities 
                        directly or through contract with an aging 
                        network entity.
                            ``(ii) Subgrants to other entities.--A 
                        State agency may make subgrants described in 
                        clause (i) to other qualified aging network 
                        entities only if the area agency on aging 
                        chooses not to apply for a subgrant or is not 
                        able to demonstrate performance capacity to 
                        carry out the activities described in this 
                        section.
            ``(3) Minimum allotment.--No State shall receive an 
        allotment under this section for a fiscal year that is less 
        than 0.5 percent of the funds made available to carry out this 
        section for that fiscal year and not reserved under paragraph 
        (1).
            ``(4) Eligibility.--In addition to the States determined by 
        the Secretary to be eligible for a grant under this section, a 
        State that receives a Federal grant for evidence-based disease 
        prevention is eligible for a grant under this section.
    ``(c) Applications.--To be eligible to receive a grant under this 
section, a State agency shall, after consulting and coordinating with 
consumers, other stakeholders, and area agencies on aging in the State, 
if any, submit an application to the Secretary at such time, in such 
manner, and containing the following information:
            ``(1) A description of the evidence-based disease 
        prevention and health promotion program.
            ``(2) Sufficient information to demonstrate that the 
        infrastructure exists to support the program.
            ``(3) A specification of the period of the grant request, 
        which shall include not less than 3 consecutive fiscal years in 
        the 5-fiscal-year period beginning with fiscal year 2010.
            ``(4) Such other information as the Secretary determines 
        appropriate.
    ``(d) Application for Continuation.--
            ``(1) In general.--A State that receives an initial grant 
        under this section shall apply, after consulting and 
        coordinating with the area agencies on aging, for a 
        continuation of the initial grant, which application shall 
        include--
                    ``(A) a description of any significant changes to 
                the information provided in the initial application; 
                and
                    ``(B) such data concerning performance measures 
                related to the requirements in the initial application 
                as the Secretary shall require.
            ``(2) Effect.--The requirement under paragraph (1) shall be 
        in effect through fiscal year 2020.
    ``(e) Use of Funds.--A State that receives a grant under this 
section shall use the funds made available through the grant to carry 
out--
            ``(1) an evidence-based chronic disease self-management 
        program;
            ``(2) an evidence-based falls prevention program; or
            ``(3) another evidence-based disease prevention and health 
        promotion program.
    ``(f) Federal Share.--
            ``(1) In general.--The Federal share of the cost described 
        in subsection (a) shall be 85 percent.
            ``(2) Non-federal share.--The State may provide the non-
        Federal share of the cost in cash or in-kind, fairly evaluated, 
        including plant, equipment, or services. The State may provide 
        the non-Federal share from State, local, or private sources.
    ``(g) Funding.--
            ``(1) In general.--The Secretary shall use amounts made 
        available under paragraph (2) to make the grants described in 
        subsection (a).
            ``(2) Funding.--There are authorized to be appropriated to 
        carry out this section--
                    ``(A) $36,050,000 for fiscal year 2010;
                    ``(B) $41,200,000 for fiscal year 2011;
                    ``(C) $56,650,000 for fiscal year 2012;
                    ``(D) $77,250,000 for fiscal year 2013;
                    ``(E) $92,700,000 for fiscal year 2014;
                    ``(F) $103,000,000 for fiscal year 2015;
                    ``(G) $118,450,000 for fiscal year 2016;
                    ``(H) $133,900,000 for fiscal year 2017;
                    ``(I) $149,350,000 for fiscal year 2018;
                    ``(J) $157,590,000 for fiscal year 2019; and
                    ``(K) $173,040,000 for fiscal year 2020.
            ``(3) Availability.--Funds appropriated under paragraph (2) 
        shall remain available until expended.

                    ``Subtitle C--Diversion Programs

``SEC. 2231. ENHANCED NURSING HOME DIVERSION PROGRAMS.

    ``(a) Definition.--In this section:
            ``(1) Low-income senior.--The term `low-income senior' 
        means an individual who--
                    ``(A) is age 75 or older; and
                    ``(B) is from a household with a household income 
                that is not less than 150 percent, and not more than 
                300 percent, of the poverty line.
            ``(2) Nursing home.--The term `nursing home' means--
                    ``(A) a skilled nursing facility, as defined in 
                section 1819(a); or
                    ``(B) a nursing facility, as defined in section 
                1919(a).
    ``(b) Program.--
            ``(1) In general.--The Secretary shall establish and carry 
        out a diversion program. In carrying out the program, the 
        Secretary shall make grants to States, from allotments 
        described in subsection (c), to pay for the Federal share of 
        the cost of carrying out enhanced nursing home diversion 
        programs.
            ``(2) Cohorts.--The Secretary shall make the grants to--
                    ``(A) a first year cohort consisting of one third 
                of the States, for fiscal year 2010;
                    ``(B) a second year cohort consisting of the cohort 
                described in subparagraph (A) and an additional one 
                third of the States, for fiscal year 2011; and
                    ``(C) a third year cohort consisting of all the 
                eligible States, for fiscal year 2012 and each 
                subsequent fiscal year.
            ``(3) Readiness.--In determining whether to include an 
        eligible State in the first year, second year, or third year 
        and subsequent year cohort, the Secretary shall consider the 
        readiness of the State to carry out an enhanced nursing home 
        diversion program under this section. Readiness shall be 
        determined based on a consideration of the following factors:
                    ``(A) Availability of a comprehensive array of home 
                and community-based services.
                    ``(B) Sufficient home and community-based services 
                provider capacity.
                    ``(C) Availability of housing.
                    ``(D) Availability of supports for consumer-
                directed services, including whether a fiscal 
                intermediary is in place.
                    ``(E) Ability to perform timely eligibility 
                determinations and assessment for services.
                    ``(F) Existence of a quality assessment and 
                improvement program for home and community-based 
                services.
                    ``(G) Such other factors as the Secretary 
                determines appropriate.
    ``(c) Allotments.--
            ``(1) In general.--
                    ``(A) Amount.--The Secretary shall allot to an 
                eligible State (within the applicable cohort) for a 
                fiscal year an amount that bears the same relationship 
                to the funds made available under subsection (i) for 
                that fiscal year as the number of low-income seniors in 
                the State bears to the number of low-income seniors 
                within States in the applicable cohort for that fiscal 
                year.
                    ``(B) Low-income seniors.--The number of low-income 
                seniors in any State and in all States shall be 
                determined by the Secretary on the basis of the most 
                recent data available from the American Community 
                Survey, and other reliable demographic data 
                satisfactory to the Secretary.
            ``(2) Eligibility.--In addition to the States determined by 
        the Secretary to be eligible for a grant under this section, a 
        State that receives a Federal grant for a nursing home 
        diversion is eligible for a grant under this section.
    ``(d) Applications.--To be eligible to receive a grant under this 
section, a State agency shall, after consulting and coordinating with 
consumers, other stakeholders, and area agencies on aging in the State, 
if any, submit an application to the Secretary at such time, in such 
manner, and containing such information as the Secretary may require, 
including a specification of the period of the grant request, which 
shall include not less than 3 consecutive fiscal years in the 5-fiscal-
year period beginning with the fiscal year prior to the year of 
application.
    ``(e) Application for Continuation.--
            ``(1) In general.--A State that receives an initial grant 
        under this section shall apply, after consulting and 
        coordinating with the area agencies on aging, for a 
        continuation of the initial grant, which application shall 
        include--
                    ``(A) a description of any significant changes to 
                the information provided in the initial application; 
                and
                    ``(B) such data concerning performance measures 
                related to the requirements in the initial application 
                as the Secretary shall require.
            ``(2) Effect.--The requirement under paragraph (1) shall be 
        in effect through fiscal year 2020.
    ``(f) Use of Funds.--
            ``(1) In general.--A State that receives a grant under this 
        section shall carry out the following:
                    ``(A) Use the funds made available through the 
                grant to carry out an enhanced nursing home diversion 
                program that enables eligible individuals to avoid 
                admission into nursing homes by enabling the 
                individuals to obtain alternative long-term services 
                and supports and remain in their communities.
                    ``(B) Award subgrants to area agencies on aging 
                that can demonstrate performance capacity to carry out 
                activities under this section whether such area agency 
                on aging carries out the activities directly or through 
                contract with an aging network entity. A State may make 
                subgrants to other qualified aging network entities 
                only if the area agency on aging chooses not to apply 
                for a subgrant or is not able to demonstrate 
                performance capacity to carry out the activities 
                described in this section.
            ``(2) Case management.--
                    ``(A) In general.--The State, through the State 
                single-entry point system established under subtitle A, 
                shall provide for case management services to the 
                eligible individuals.
                    ``(B) Use of existing services.--In carrying out 
                subparagraph (A), the State agency or area agency on 
                aging may utilize existing case management services 
                delivery networks if--
                            ``(i) the networks have adequate safeguards 
                        against potential conflicts of interest; and
                            ``(ii) the State agency or area agency on 
                        aging includes a description of such safeguards 
                        in the grant application.
                    ``(C) Care plan.--The State shall provide for 
                development of a care plan for each eligible individual 
                served, in consultation with the eligible individual 
                and their caregiver, as appropriate. In developing the 
                care plan, the State shall explain the option of 
                consumer directed care and assist an individual, who so 
                requests, with developing a consumer-directed care plan 
                that shall include arranging for support services and 
                funding. Such assistance shall include providing 
                information and outreach to individuals in the 
                hospital, in a nursing home for post-acute care, or 
                undergoing changes in their health status or caregiver 
                situation.
    ``(g) Eligible Individuals.--In this section, the term `eligible 
individual' means an individual--
            ``(1) who has been determined by the State to be at high 
        functional risk of nursing home placement, as defined by the 
        State agency in the State agency's grant application;
            ``(2) who is not eligible for medical assistance under 
        title XIX; and
            ``(3) who meets the income and asset eligibility 
        requirements established by the State and included in such 
        State's grant application for approval by the Secretary.
    ``(h) Federal Share.--
            ``(1) In general.--The Federal share of the cost described 
        in subsection (b) shall be, for a State and for a fiscal year, 
        the sum of--
                    ``(A) the Federal medical assistance percentage 
                applicable to the State for the year under section 
                1905(b); and
                    ``(B) 5 percentage points.
            ``(2) Non-federal share.--The State may provide the non-
        Federal share of the cost in cash or in-kind, fairly evaluated, 
        including plant, equipment, or services. The State may provide 
        the non-Federal share from State, local, or private sources.
    ``(i) Funding.--
            ``(1) In general.--The Secretary shall use amounts made 
        available under paragraph (2) to make the grants described in 
        subsection (b).
            ``(2) Funding.--There are authorized to be appropriated to 
        carry out this section--
                    ``(A) $111,825,137 for fiscal year 2010;
                    ``(B) $337,525,753 for fiscal year 2011;
                    ``(C) $650,098,349 for fiscal year 2012;
                    ``(D) $865,801,631 for fiscal year 2013;
                    ``(E) $988,504,887 for fiscal year 2014;
                    ``(F) $1,124,547,250 for fiscal year 2015;
                    ``(G) $1,276,750,865 for fiscal year 2016;
                    ``(H) $1,364,488,901 for fiscal year 2017;
                    ``(I) $1,466,769,052 for fiscal year 2018;
                    ``(J) $1,712,755,702 for fiscal year 2019; and
                    ``(K) $1,712,755,702 for fiscal year 2020.
            ``(3) Availability.--Funds appropriated under paragraph (2) 
        shall remain available until expended.

   ``Subtitle D--Administration, Evaluation, and Technical Assistance

``SEC. 2241. ADMINISTRATION, EVALUATION, AND TECHNICAL ASSISTANCE.

    ``(a) Administration and Expenses.--For purposes of carrying out 
this title, there are authorized to be appropriated for administration 
and expenses--
            ``(1) of the area agencies on aging--
                    ``(A) $16,825,895 for fiscal year 2010;
                    ``(B) $39,246,141 for fiscal year 2011;
                    ``(C) $50,766,948 for fiscal year 2012;
                    ``(D) $66,999,101 for fiscal year 2013;
                    ``(E) $76,979,152 for fiscal year 2014;
                    ``(F) $87,163,513 for fiscal year 2015;
                    ``(G) $98,780,562 for fiscal year 2016;
                    ``(H) $106,063,792 for fiscal year 2017;
                    ``(I) $114,324,642 for fiscal year 2018;
                    ``(J) $123,312,948 for fiscal year 2019; and
                    ``(K) $133,215,845 for fiscal year 2020;
            ``(2) of the State agencies--
                    ``(A) $8,412,948 for fiscal year 2010;
                    ``(B) $19,623,071 for fiscal year 2011;
                    ``(C) $25,383,474 for fiscal year 2012;
                    ``(D) $33,499,551 for fiscal year 2013;
                    ``(E) $38,489,576 for fiscal year 2014;
                    ``(F) $43,581,756 for fiscal year 2015;
                    ``(G) $49,390,281 for fiscal year 2016;
                    ``(H) $53,031,896 for fiscal year 2017;
                    ``(I) $57,162,321 for fiscal year 2018;
                    ``(J) $61,656,474 for fiscal year 2019; and
                    ``(K) $66,607,923 for fiscal year 2020; and
            ``(3) of the Administration--
                    ``(A) $2,103,237 for fiscal year 2010;
                    ``(B) $4,905,768 for fiscal year 2011;
                    ``(C) $6,345,868 for fiscal year 2012;
                    ``(D) $8,374,888 for fiscal year 2013;
                    ``(E) $9,622,394 for fiscal year 2014;
                    ``(F) $10,895,439 for fiscal year 2015;
                    ``(G) $12,347,570 for fiscal year 2016;
                    ``(H) $13,257,974 for fiscal year 2017;
                    ``(I) $14,290,580 for fiscal year 2018;
                    ``(J) $15,414,118 for fiscal year 2019; and
                    ``(K) $16,651,981 for fiscal year 2020.
    ``(b) Evaluation and Technical Assistance.--
            ``(1) Conditions to receipt of grant.--In awarding grants 
        under this title, the Secretary shall condition receipt of the 
        grant for the second and subsequent grant years on a 
        satisfactory determination that the State agency is meeting 
        benchmarks specified in the grant agreement for each grant 
        awarded under this title.
            ``(2) Evaluations.--The Secretary shall measure and 
        evaluate, either directly or through grants or contracts, the 
        impact of the programs authorized under this title. Not later 
        than June 1 of the year that is 6 years after the year of the 
        date of enactment of the Project 2020: Building on the Promise 
        of Home and Community-Based Services Act of 2009 and every 2 
        years thereafter, the Secretary shall--
                    ``(A) compile the reports of the measures and 
                evaluations of the grantees;
                    ``(B) establish benchmarks to show progress toward 
                savings; and
                    ``(C) present a compilation of the information 
                under this paragraph to Congress.
            ``(3) Technical assistance grants.--The Secretary shall 
        award technical assistance grants, including State-specific 
        grants whenever practicable, to carry out the programs 
        authorized under this title.
            ``(4) Transfer.--There are authorized to be appropriated 
        for such evaluation and technical assistance under this 
        subsection--
                    ``(A) $4,206,474 for fiscal year 2010;
                    ``(B) $9,811,535 for fiscal year 2011;
                    ``(C) $8,461,158 for fiscal year 2012;
                    ``(D) $11,166,517 for fiscal year 2013;
                    ``(E) $12,829,859 for fiscal year 2014;
                    ``(F) $14,527,252 for fiscal year 2015;
                    ``(G) $16,463,427 for fiscal year 2016;
                    ``(H) $17,677,299 for fiscal year 2017;
                    ``(I) $19,054,107 for fiscal year 2018;
                    ``(J) $20,552,158 for fiscal year 2019; and
                    ``(K) $22,202,641 for fiscal year 2020.
    ``(c) Availability.--Funds appropriated under this section shall 
remain available until expended.''.
                                 <all>