Medicaid payment reform

(a)

In general

Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) is amended by inserting after section 1903 the following section:

1903A.

Reformed payment to States

(a)

Reformed payment system

(1)

In general

For quarters beginning on or after July 1, 2014, in lieu of amounts otherwise payable to a State under this title (including any payments attributable to section 1923), except as otherwise provided in this section, the amount payable to such State shall be equal to the sum of the following: (A)

Adjusted aggregate amount based on capitation

The aggregate capitated amount specified in subsection (b) for the quarter and the State, adjusted under subsection (e). (B)

Chronic care quality bonus

The amount (if any) of the chronic care quality bonus payment specified in subsection (f) for the quarter for the State. (2)

Requirement of State share

(A)

In general

A State shall make, from non-Federal funds, expenditures in an amount equal to its State share (as determined under subparagraph (C)) for a quarter for items, services, and other costs for which, but for this section, Federal funds would have been payable under this title. (B)

Nonpayment for failure to pay state share

(i)

In general

If a State fails to expend the amount required under subparagraph (A) for a quarter, the amount payable to the State under this section shall be reduced by the product of— (I)the Federal-to-State ratio described in subparagraph (D)(iii); and (II)the amount by which the State payment is less than the State share. (ii)

Grace period

A State shall not be considered to have failed to provide payment of its required State share for a quarter under subparagraph (A) if the aggregate State payment towards the State’s required State share for the 4-quarter period beginning with such quarter exceeds the required State share amount for such 4-quarter period. (C)

State share

The State share for a State for a quarter is equal to the product of— (i)the aggregate capitated amount specified in subsection (b) for the quarter and the State; and (ii)the State-to-Federal ratio described in subparagraph (D)(iv). (D)

Uniform Federal and State percentages and State-to-Federal and Federal-to-State ratios

In this paragraph: (i)

Uniform Federal percentage

The uniform Federal percentage described in this clause for a fiscal year is the highest Federal medical assistance percentage (as defined in the first sentence of section 1905(b)) for any State for such fiscal year. (ii)

Uniform State percentage

The uniform State percentage described in this clause is 100 percent minus the uniform Federal percentage described in clause (i). (iii)

Federal-to-State ratio

The Federal-to-State ratio described in this clause is the ratio of— (I)the uniform Federal percentage described in clause (i); to (II)the uniform State percentage described in clause (ii). (iv)

State-to-Federal ratio

The State-to-Federal ratio described in this clause is the ratio of— (I)the uniform State percentage described in clause (ii); to (II)the uniform Federal percentage described in clause (i). (E)

Rules for crediting toward State share

(i)

General limitation to matchable expenditures

A payment for expenditures shall not be counted toward the State share under subparagraph (A) unless Federal payments may be used for such expenditures consistent with paragraph (3)(B). (ii)

Further limitations on allowable expenditures

A payment for expenditures shall not be counted towards the State share under subparagraph (A) if the expenditure is for any of the following: (I)

Abortion

Expenditures for an abortion. (II)

Intergovernmental transfers

An expenditure that is attributable to an intergovernmental transfer. (III)

Provider taxes

If a provider paid the State health care related taxes (as defined in section 1903(w)(3)(A)), expenditures made for services furnished by such provider up to the amount of such taxes paid by such provider. (IV)

Certified public expenditures

An expenditure that is attributable to certified public expenditures. (iii)

Crediting fraud and abuse recoveries

Amounts recovered by a State through the operation of its Medicaid fraud and abuse control unit described in section 1903(q) shall be fully counted toward the State share under subparagraph (A). (F)

Construction

Nothing in the paragraph shall be construed as preventing a State from expending, from non-Federal funds, an amount under this title in excess of the amount of the State share. (G)

Determination based upon submitted claims

In applying this paragraph with respect to expenditures of a State for a quarter, the determination of the expenditures for such State for such quarter shall be made after the end of the period (which, as of the date of the enactment of this section, is 2 years) for which the Secretary accepts claims for payment under this title with respect to such quarter. (3)

Use of Federal payments

(A)

Application of Medicaid limitations

A State may only use Federal payments received under this section for expenditures for which Federal funds would have been payable under this title but for this section. (B)

Limitation for certain eligibles

(i)

Application of 100 percent federal poverty line limit on eligibility

Subject to clause (ii), a State may not use such Federal payments to provide medical assistance for an individual who has an income (as determined under clause (iii)) that exceeds 100 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size involved. (ii)

Determination of income using modified adjusted gross income without any 5 percent increase

In determining income for purposes of clause (i) under section 1902(e)(14) (relating to modified adjusted gross income), the following rules shall apply: (I)

Application of spend down

The State shall take into account the costs incurred for medical care or for any other type of remedial care recognized under State law in the same manner and to the same extent that such State takes such costs into account for purposes of section 1902(a)(17). (II)

Disregard of 5 percent increase

Subparagraph (I) of section 1902(e)(14) (relating to a 5 percent reduction) shall not apply. (iii)

Exception

Clause (i) shall not apply to an individual who is— (I)a woman described in clause (i) of section 1903(v)(4)(A); (II)a child who is an individual described in clause (i) of section 1905(a); (III)enrolled in a State plan under this title as of the date of the enactment of this section for the period of continuous enrollment; or (IV)described in section 1902(e)(14)(D) (relating to modified adjusted gross income). (iv)

Clarification related to community spouse

Nothing in this subparagraph shall supersede the application of section 1924 (related to community spouse income and assets). (4)

Exceptions for pass-through payments

(A)

In general

Paragraph (1) shall not apply, and amounts shall continue to be payable under this title (and not under this section), in the case of the following payments (and related administrative costs and expenditures): (i)

Payments to territories

Payments to a State other than the 50 States and the District of Columbia. (ii)

Medicare cost sharing

Payments attributable to Medicare cost sharing under section 1905(p). (iii)

Pediatric vaccines

Payments attributable to section 1928. (iv)

Emergency services for certain individuals

Payments for treatment of emergency medical conditions attributable to the application of section 1903(v)(2). (v)

Indian health care facilities

Payments for medical assistance described in the third sentence of section 1905(b). (vi)

Employer-sponsored insurance (ESI)

Payments for medical assistance attributable to payments to employers for employer-sponsored health benefits coverage. (vii)

Other populations with limited benefit coverage

Other payments that are determined by the Secretary to be related to a specified population for which the medical assistance under this title is limited and does not include any inpatient, nursing facility, or long-term care services. (B)

Certain expenses

Paragraph (1) shall not apply, and amounts shall continue to be payable under this title (and not under this section), in the case of the following: (i)

Administration of medicare prescription drug benefit

Expenditures described in section 1935(b) (relating to administration of the Medicare prescription drug benefit). (ii)

Payments for HIT bonuses

Payments under section 1903(a)(3)(F) (relating to payments to encourage the adoption and use of certified EHR technology). (iii)

Payments for design, development, and installation of MMIS and eligibility systems

Payments under subparagraphs (A)(i) and (H)(i) of section 1903(a)(3) for expenditures for design, development, and installation of the Medicaid management information systems and mechanized verification and information retrieval systems (related to eligibility). (5)

Payment of amounts

(A)

In general

Except as the Secretary may otherwise provide, amounts shall be payable to a State under this section in the same manner as amounts are payable under subsection (d) of section 1903 to a State under subsection (a) of such section. (B)

Information and forms

(i)

Submission

As a condition of receiving payment under this section, a State shall submit such information, in such form, and manner, as the Secretary shall specify, including information necessary to make the computations under subsections (c)(2)(C) and (e). (ii)

Uniform reporting

The Secretary shall develop such forms as may be needed to assure a system of uniform reporting of such information across States. (C)

Required reporting of information on medical loss ratios for managed care

The information required to be reported under subparagraph (B)(i) shall include information on the medical loss ratio with respect to coverage provided under each Medicaid managed care plan with a contract with the State under section 1903(m) or 1932. (b)

Aggregate capitated amount

(1)

In general

The aggregate capitated amount specified in this subsection for a State for a quarter is equal to the sum of the products, for each of the categories of Medicaid beneficiaries specified in paragraph (2), of the following: (A)

Per capita quarterly amount

The per capita quarterly amount for such category computed under subsection (c) for such State for such quarter. (B)

Number of individuals in category

The average number of Medicaid beneficiaries enrolled in such category in the State in such quarter, as computed under subsection (d). (2)

Categories

The categories specified in this paragraph are the following: (A)

Elderly

A category of individuals who are 65 years of age or older. (B)

Blind or disabled

A category of individuals not described in subparagraph (A) who are described in section 1937(a)(2)(B)(ii). (C)

Children

A category of individuals not described in subparagraph (B) who are under 21 years of age. (D)

Other adults

A category of individuals who are not described in a previous subparagraph. (c)

Computation of per capita, per category quarterly amount

(1)

In general

For a State, for each category of beneficiary for a quarter— (A)

Fiscal year 2014

For quarters in fiscal year 2014, the per capita quarterly amount is equal to 1/4 of the base average per capita Federal payments for such State for such category determined under paragraph (2), increased by a factor that reflects the sum of the following: (i)

Historical medical care component of CPI through fiscal year 2013

The percentage increase in the historical medical care component of the Consumer Price Index for all urban consumers (U.S. city average) from the midpoint of the base fiscal year (as defined in paragraph (6)) to the midpoint of fiscal year 2013. (ii)

Projected medical care component of CPI for fiscal year 2014

The percentage increase in the projected medical care component of the Consumer Price Index for all urban consumers (U.S. city average) from the midpoint of fiscal year 2013 to the midpoint of fiscal year 2014. (B)

Fiscal years 2015 and 2016

The per capita quarterly amount for a State for a category for quarters in fiscal year 2015 or fiscal year 2016 is equal to the per capita quarterly amount under this paragraph for such State and category for the previous fiscal year increased by the per capita percentage increase (as defined in subparagraph (E)) for such category and fiscal year. (C)

Fiscal years 2017 through 2024

The per capita quarterly amount for a State for a category for quarters in a fiscal year beginning with fiscal year 2017 and ending with fiscal year 2024 is— (i)in the case of a State that is a high per capita State or a low per capita State (as defined in paragraph (4)(B)(iii)) for the category, the amount determined under clause (i) or (ii) of paragraph (4)(B) for such State, category, and fiscal year; or (ii)in the case of any other State, the per capita quarterly amount under this paragraph for such State and category for the previous fiscal year increased by the per capita percentage increase for such category and fiscal year. (D)

Fiscal year 2025 and subsequent fiscal years

The per capita quarterly amount for a State for a category for quarters in a fiscal year beginning with fiscal year 2025 is equal to the per capita quarterly amount under this paragraph for such State and category for the previous fiscal year increased by the per capita percentage increase for such category and fiscal year. (E)

Annual percentage increase beginning with fiscal year 2015

For purposes of this subsection, the term per capita percentage increase means, for a fiscal year, the sum of— (i)the projected percentage change in nominal gross domestic product from the midpoint of the previous fiscal year to the midpoint of the fiscal year for which the percentage increase is being applied; and (ii)one percentage point. (2)

Base per capita, per category amount for each State

(A)

Average per category

(i)

In general

The Secretary shall determine, consistent with this paragraph and paragraph (3), a base per capita, per category amount for each of the 50 States and the District of Columbia equal to the average amount, per Medicaid beneficiary, of Federal payments under this title, including payments attributable to disproportionate share hospital payments under section 1923, for each of the categories of beneficiaries under subsection (b)(2) for the base fiscal year for each of the 50 States and the District of Columbia. (ii)

Best available data

The determination under clause (i) shall initially be estimated by the Secretary, based upon the best available data at the time the determination is made. (iii)

Updates

The determination under clause (i) shall be updated by the Secretary on an annual basis based upon improved data. The Secretary shall adjust the amounts under subsection (a)(1)(A) to reflect changes in the amounts so determined based on such updates. (B)

Exclusion of pass-through payments

In computing base per capita, per category amounts under subparagraph (A)(i) the Secretary shall exclude payments described in subsection (a)(4). (C)

Standardization

(i)

In general

In computing each such amount, the Secretary shall standardize the amount in order to remove the variation attributable to the following: (I)

Risk factors

Such risk factors as age, health and disability status (including high cost medical conditions), gender, institutional status, and such other factors as the Secretary determines to be appropriate, so as to ensure actuarial equivalence. (II)

Geographic

Variations in costs on a county-by-county basis. (ii)

Application of Medicare methodology

(I)

Method for risk standardization

In carrying out clause (i)(I), the Secretary may apply the hierarchal condition category methodology under section 1853(a)(1)(C). If the Secretary uses such methodology, the Secretary shall adjust the application of such methodology to take into account the differences in services provided under this title compared to title XVIII, such as the coverage of long term care, pregnancy, and pediatric services. (II)

Method for geographic standardization

The Secretary shall apply the standardization under clause (i)(II) in a manner similar to that applied under section 1853(c)(4)(A)(iii). (iii)

Application on a national, budget neutral basis

The standardization under clause (i) shall be designed and implemented on a uniform national basis and shall be budget neutral so as to not result in any aggregate change in payments under this section. (iv)

Response to new risk

Subject to clause (iii), the Secretary may adjust the standardization under clause (i) to respond promptly to new instances of communicable diseases and other public health hazards. (D)

Adjustment for temporary FMAP increases

In computing each such amount the Secretary shall disregard portions of payments that are attributable to a temporary increase in the Federal matching rates, including those attributable to the following: (i)

PPACA disaster FMAP

Section 1905(aa). (ii)

ARRA

Section 5001 of the American Recovery and Reinvestment Act of 2009 (42 U.S.C. 1396d note). (iii)

Extraordinary employer pension contribution

Section 614 of the Children's Health Insurance Program Reauthorization Act of 2009 (42 U.S.C. 1396d note). (3)

Allocation of nonmedical assistance payments

The Secretary shall establish rules for the allocation of payments under this title (other than those payments described in paragraph (1) or (5) of section 1903(a) and including such payments attributable to section 1923)— (A)among different categories of beneficiaries; and (B)between payments included under this section and payments described in subsection (a)(4). (4)

Transition to a corridor around the national average

(A)

Determination of national average base per capita, per category amount

Subject to subparagraph (C), the Secretary shall determine a national average base per capita, per category amount equal to the average of the base per capita, per category amounts for each of the 50 States and the District of Columbia determined under paragraph (2), weighted by the average number of beneficiaries in each such category and State as determined by the Secretary consistent with subsection (d) for the base fiscal year. (B)

Transition adjustment

(i)

High per capita states

In the case of a high per capita State (as defined in clause (iii)(I)) for a category, the per capita quarterly amount for such State and category for a quarter in a fiscal year (beginning with fiscal year 2017 and ending with fiscal year 2024) is equal to the sum of— (I)the product of the State-specific factor for such fiscal year (as defined in clause (iv)) and the per capita quarterly amount that would otherwise be determined under paragraph (1) for such State and category if clause (i) of paragraph (1)(C) did not apply; and (II)the product of 1 minus the State-specific factor for such fiscal year and the per capita quarterly amount that would otherwise be determined under paragraph (1) for a State and category if the base per capita, per category amount determined under paragraph (2) for the State and category were equal to 110 percent of the national average base per capita, per category amount determined under subparagraph (A) for such category. (ii)

Low per capita states

In the case of a low per capita State (as defined in clause (iii)(II)) for a category, the per capita quarterly amount for such State and category for a quarter in a fiscal year (beginning with fiscal year 2017 and ending with fiscal year 2024) is equal to the sum of— (I)the product of the State-specific factor for such fiscal year and the per capita quarterly amount that would otherwise be determined under paragraph (1) for such State and category if clause (i) of paragraph (1)(C) did not apply; and (II)the product of 1 minus the State-specific factor for such fiscal year and the per capita quarterly amount that would otherwise be determined under paragraph (1) for a State and category if the base per capita, per category amount determined under paragraph (2) for the State and category were equal to 90 percent of the national average base per capita, per category amount determined under subparagraph (A) for such category. (iii)

High and low per capita States defined

In this subparagraph: (I)

High per capita State

The term high per capita State means, with respect to a category, a State for which the base per capita, per category amount determined under paragraph (2) for such category is greater than 110 percent of the national average base per capita, per category amount determined under subparagraph (A) for such category. (II)

Low per capita State

The term low per capita State means, with respect to a category, a State for which the base per capita, per category amount determined under paragraph (2) for such category is less than 90 percent of the national average base per capita, per category amount determined under subparagraph (A) for such category. (iv)

State-specific factor

In this subparagraph, the term State-specific factor means— (I)for fiscal year 2017, 7/8; and (II)for a subsequent fiscal year, the State-specific factor under this clause for the previous fiscal year minus 1/8. (C)

No additional expenditures

(i)

Determination of increase in Federal expenditures

For each category for each fiscal year (beginning with fiscal year 2017 and ending with fiscal year 2024), the Secretary shall determine whether the application of this paragraph— (I)to the category for the fiscal year will result in an aggregate increase in the aggregate Federal expenditures under this section; and (II)to all the categories for the fiscal year will result in a net aggregate increase in the aggregate Federal expenditures under this section. (ii)

Adjustment

If the Secretary determines under clause (i)(II) that the application of this paragraph to all the categories for a fiscal year will result in a net aggregate increase in the aggregate Federal expenditures under this section, the Secretary shall reduce the national average base per capita, per category amount computed under subparagraph (A) for each of the categories determined under clause (i)(I) for which there will be an aggregate increase in the aggregate Federal expenditures under this section by such uniform percentage as will ensure that there is no net aggregate Federal expenditure increase described in clause (i)(II) for the fiscal year. (5)

Reports on per capita rates; appeals

(A)

Report to states

Not later than 8 months after the date of the enactment of this section, the Secretary shall submit to each State the Secretary’s initial determination of— (i)the base per capita, per category amounts under paragraph (2) for such State; and (ii)the national average base per capita, per category amounts under paragraph (4)(A). (B)

Opportunity to appeal

Not later than 3 months after the date a State receives notice of the Secretary’s initial determination of such base per capita, per category amounts for such State under subparagraph (A)(i), the State may file with the Secretary, in a form and manner specified by the Secretary, an appeal of such determination. (C)

Determination on appeal

Not later than 3 months after receiving such an appeal, the Secretary shall make a final determination on such amounts for such State. If no such appeal is received for a State, the Secretary’s initial determination under subparagraph (A)(i) shall become final. (6)

Base fiscal year defined

In this section, the term base fiscal year means the latest fiscal year, ending before the date of the enactment of this section, for which the Secretary determines that adequate data are available to make the computations required under this subsection. (d)

Not counting individuals To account for excluded payments

Under rules specified by the Secretary, individuals shall not be counted as Medicaid beneficiaries for purposes of subsection (b)(1)(B) and subsection (c)(2)(A) in proportion to the extent that such individuals are receiving medical assistance for which payments described under subsection (a)(4)(A) are made. (e)

Risk Adjustment

(1)

In general

The amount under subsection (a)(1)(A) shall be adjusted under this subsection in an appropriate manner, specified by the Secretary and consistent with paragraph (2), to take into account— (A)the factors described in subsection (c)(2)(C)(i)(I) within a category of beneficiaries; and (B)variations in costs on a county-by-county basis for medical assistance and administrative expenses. (2)

Method of adjustment

The adjustments under paragraph (1) shall be made in a manner similar to the manner in which similar adjustments are made under subsection (c)(2)(C) and consistent with the requirements of clause (iii) of such subsection. (f)

Chronic care quality bonus payments

(1)

Determination of bonus payments

If the Secretary determines that, based on the reports under paragraph (5), with respect to categories of chronic disease for which chronic care performance targets had been established under paragraph (3) for each category of Medicaid beneficiaries specified under subsection (b)(2) such targets have been met by a State, the Secretary shall make an additional payment to such State in the amount specified in paragraph (6). Such payments shall be made in a manner specified by the Secretary and may only be used consistent with subsection (a)(3). (2)

Identification of categories of chronic disease

The Secretary shall determine the categories of chronic disease for which bonus payments may be available under this subsection for each category of Medicaid beneficiaries. (3)

Adoption of quality measurement system and identification of performance targets

(A)

System and data

With respect to the categories of chronic disease under paragraph (2), the Secretary shall adopt a quality measurement system that uses data described in paragraph (4) and is similar to the Five-Star Quality Rating System used to indicate the performance of Medicare Advantage plans under part C of title XVIII. (B)

Targets

Using such system and data, the Secretary shall establish the chronic care performance targets for purposes of the payments under paragraph (1). Such performance targets shall be established in consultation with States, associations representing individuals with chronic illnesses, entities providing treatment to such individuals for such chronic illnesses, and other stakeholders, including the National Association of Medicaid Directors and the National Governors Association. (4)

Data to be used

The data to be used under paragraph (3) shall include— (A)data collected through methods such as— (i)the Healthcare Effectiveness Data and Information Set (also known as HEDIS) (or an appropriate successor performance measurement tool); (ii)the Consumer Assessment of Healthcare Providers and Systems (also known as CAHPS) (or an appropriate successor performance measurement tool); and (iii)the Health Outcomes Survey (also known as HOS) (or an appropriate successor performance measurement tool); and (B)other data collected by the State. (5)

Reports

(A)

In general

Each State shall collect, analyze, and report to the Secretary, at a frequency and in a manner to be established by the Secretary, data described in paragraph (4) that permit the Secretary to monitor the State’s performance relative to the chronic care performance targets established under paragraph (3). (B)

Review and verification

The Secretary may review the data collected by the State under subparagraph (A) to verify the State’s analysis of such data with respect to the performance targets under paragraph (3). (6)

Amount of bonus payments

(A)

In general

Subject to subparagraphs (B) and (C), with respect to each category of Medicaid beneficiaries, in the case of a State that the Secretary determines, based on the chronic care performance targets set under paragraph (3) for such category, performs— (i)in the top five States in such category, subject to subparagraph (C)(ii), the amount of the bonus shall be 10 percent of the payment amount otherwise paid to the State under subsection (a) for individuals enrolled under the plan within such category; (ii)in the next five States in such category, subject to subparagraph (C)(ii), the amount of the bonus shall be 5 percent of the payment amount otherwise paid to the State under subsection (a) for individuals enrolled under the plan within such category; (iii)in the next five States in such category, subject to clauses (i) and (iii) of subparagraph (C), the amount of the bonus shall be 3 percent of the payment amount otherwise paid to the State under subsection (a) for individuals enrolled under the plan within such category; (iv)in the next five States in such category, subject to clauses (i) and (iii) of subparagraph (C), the amount of the bonus shall be 2 percent of the payment amount otherwise paid to the State under subsection (a) for individuals enrolled under the plan within such category; and (v)in the next five States in such category, subject to clauses (i) and (iii) of subparagraph (C), the amount of the bonus shall be 1 percent of the payment amount otherwise paid to the State under subsection (a) for individuals enrolled under the plan within such category. (B)

Aggregate annual limit for each category of Medicaid beneficiaries

(i)

In general

In no case may the aggregate amount of bonuses under this subsection for a fiscal year for a category of Medicaid beneficiaries exceed the limit specified in clause (ii) for the fiscal year. (ii)

Limit

The limit specified in this clause— (I)for the fiscal year 2015 is equal to $250,000,000; or (II)for a subsequent fiscal year is equal to the limit specified in this clause for the previous fiscal year increased by the per capita percentage increase determined under paragraph (1)(E) of subsection (c). (C)

Limitation and proration of bonuses based on application of aggregate limit

(i)

No bonus for third or subsequent tiers unless aggregate limit not reached on first two tiers

No bonus shall be payable under clause (iii), (iv), or (v) of subparagraph (A) for a category of Medicaid beneficiaries for a fiscal year unless the aggregate amount of bonuses under clauses (i) and (ii) of such subparagraph for such category and fiscal year is less than the limit specified in subparagraph (C)(ii) for the fiscal year. (ii)

Proration for first two tiers

If the aggregate amount of bonuses under clauses (i) and (ii) of subparagraph (A) for a category of Medicaid beneficiaries for a fiscal year exceeds the limit specified in subparagraph (C)(ii) for the fiscal year, the amount of each such bonus shall be prorated in a manner so the aggregate amount of such bonuses is equal to such limit. (iii)

Proration for next three tiers

If the aggregate amount of bonuses under clauses (i) and (ii) of subparagraph (A) for a category of Medicaid beneficiaries for a fiscal year is less than the limit specified in subparagraph (C)(ii) for the fiscal year, but the aggregate amount of bonuses under clauses (i) through (v) of subparagraph (A) for the category and fiscal year exceeds the limit specified in subparagraph (C)(ii) for the fiscal year, the amount of each bonus in clauses (iii), (iv), and (v) of subparagraph (A) shall be prorated in a manner so the aggregate amount of all the bonuses under subparagraph (A) is equal to such limit. (g)

State option for receiving Medicare payments for full-Benefit dual eligible individuals

(1)

In general

Under this subsection a State may elect for a fiscal year— (A)to provide to full-benefit dual eligible individuals eligible for medical assistance under the State plan, in addition to the medical assistance to which such eligible individuals would otherwise be entitled under this title, the items and services which such eligible individuals would otherwise receive under title XVIII; and (B)to receive payment from the Secretary under paragraph (3). (2)

Payment requirement

(A)

In general

A State electing the option under this subsection shall provide payment to health care providers for the items and services described under paragraph (1)(A) at a rate that is not less than the rate at which payments would be made to such providers for such items and services under title XVIII. (B)

Flexibility in payment methods

Nothing in subparagraph (A) shall be construed as preventing a State from using alternative payment methodologies (such as bundled payments or the use of accountable care organizations (as such term is used in section 1899)) for purposes of making payments to health care providers for items and services provided to dual eligible individuals in the State under the option under this subsection. (3)

Responsibilities of the Secretary

In the case of a State that elects the option under paragraph (1) for a fiscal year, the Secretary shall, in addition to the amounts paid to such State under subsection (a), pay to a State the amount that the Secretary would otherwise pay under title XVIII for items and services provided to full-benefit dual eligible individuals in such State for such fiscal year. (4)

Full-benefit dual eligible individual defined

In this subsection, the term full-benefit dual eligible individual means an individual who meets the requirements of section 1935(c)(6)(A)(ii). (h)

Audits

The Secretary shall conduct such audits on the number and classification of Medicaid beneficiaries under such subsections and expenditures under this section as may be necessary to ensure appropriate payments under this section. (i)

Treatment of waivers

(1)

No impact on current waivers

In the case of a waiver of requirements of this title pursuant to section 1115 or other law that is in effect as of the date of the enactment of this section, nothing in this section shall be construed to affect such waiver for the period of the waiver as approved as of such date. (2)

Application of budget neutrality to subsequent waivers and renewals taking section into account

In the case of a waiver of requirements of this title pursuant to section 1115 or other law that is approved or renewed after the date of the enactment of this section, to the extent that such approval or renewal is conditioned upon a demonstration of budget neutrality, budget neutrality shall be determined taking into account the application of this section. (j)

Report to Congress

Not later than January 1, 2016, the Secretary shall submit to Congress a report on the implementation of this section.

(b)

Conforming amendments

(1)

Continued application of clawback provisions

(A)

Continued application

Subsections (a) and (c)(1)(C) of section 1935 of such Act (42 U.S.C. 1396u–5) are each amended by inserting or 1903A(a) after 1903(a). (B)

Technical amendment

Section 1935(d)(1) of the Social Security Act (42 U.S.C. 1396u–5(d)(1)) is amended by inserting except as provided in section 1903A(g) after any other provision of this title. (2)

Payment rules under section 1903

(A)Section 1903(a) of such Act (42 U.S.C. 1396b(a)) is amended, in the matter before paragraph (1), by inserting and section 1903A after except as otherwise provided in this section. (B)Section 1903(d) of such Act (42 U.S.C. 1396b(d)) is amended— (i)in paragraph (1), by inserting and under section 1903A after subsections (a) and (b); (ii)in paragraph (2)— (I)in subparagraph (A), by inserting or section 1903A after was made under this section; and (II)in subparagraph (B), by inserting or section 1903A after under subsection (a); (iii)in paragraph (4)— (I)by striking under this subsection and inserting , with respect to this section or section 1903A, under this subsection; and (II)by striking under this section and inserting under the respective section; and (iv)in paragraph (5), by inserting or section 1903A after overpayment under this section. (3)

Conforming waiver authority

Section 1115(a)(2)(A) of the Social Security Act (42 U.S.C. 1315(a)(2)(A)) is amended by striking or 1903 and inserting 1903, or 1903A. (4)

Report on additional conforming amendments needed

Not later than 6 months after the date of the enactment of this Act, the Secretary of Health and Human Services shall submit to Congress a report that includes a description of any additional technical and conforming amendments to law that are required to properly carry out this Act.