[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 298 Introduced in Senate (IS)]

114th CONGRESS
  1st Session
                                 S. 298

   To amend titles XIX and XXI of the Social Security Act to provide 
States with the option of providing services to children with medically 
  complex conditions under the Medicaid program and Children's Health 
   Insurance Program through a care coordination program focused on 
     improving health outcomes for children with medically complex 
         conditions and lowering costs, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 28, 2015

  Mr. Grassley (for himself, Mr. Bennet, Mr. Portman, Mr. Nelson, Mr. 
 Blunt, Mr. Brown, Mr. Kirk, and Mrs. Murray) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To amend titles XIX and XXI of the Social Security Act to provide 
States with the option of providing services to children with medically 
  complex conditions under the Medicaid program and Children's Health 
   Insurance Program through a care coordination program focused on 
     improving health outcomes for children with medically complex 
         conditions and lowering costs, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Advancing Care for Exceptional Kids 
Act of 2015'' or the ``ACE Kids Act of 2015''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Approximately 3,000,000 children in the United States 
        suffer from medically complex conditions and approximately 
        2,000,000 of such children are enrolled in State plans under 
        the Medicaid program under title XIX of the Social Security 
        Act.
            (2) Such children account for an estimated 6 percent of 
        Medicaid enrollees and approximately 40 percent of children's 
        Medicaid spending is due to the severity of the illnesses of 
        such children.
            (3) The creation of nationally designated children's 
        hospital networks focused upon better coordination and 
        integration of care for such pediatric population will result 
        in improved health outcomes and savings under the Medicaid 
        program and the Children's Health Insurance Program under title 
        XXI of the Social Security Act.

SEC. 3. ESTABLISHMENT OF MEDICAID AND CHIP CARE COORDINATION PROGRAM 
              FOR CHILDREN WITH MEDICALLY COMPLEX CONDITIONS AS 
              MEDICAID STATE OPTION.

    (a) Medicaid.--Title XIX of the Social Security Act (42 U.S.C. 1396 
et seq.) is amended by adding at the end the following new section:

  ``medicaid children's care coordination programs for children with 
                       complex medical conditions

    ``Sec. 1947.  (a) In General.--Beginning January 1, 2016, a State, 
at its option as a State plan amendment, may elect to provide medical 
assistance for items and services furnished to eligible children 
enrolled in an MCCC program that meets the requirements of this 
section. As a condition on an eligible child's receipt of medical 
assistance under this title, the State shall require, under such an 
amendment, that the eligible child be enrolled in a MCCC program that 
meets the requirements of this section. 
    ``(b) MCCC Program Requirements.--An MCCC program meets the 
requirements of this section if the MCCC program--
            ``(1) coordinates, integrates, and provides for the 
        furnishing of the full range of MCCC program services to 
        eligible children enrolled in the program;
            ``(2) enrolls eligible children in accordance with 
        subsection (c);
            ``(3) is operating under a program agreement that meets the 
        requirements of subsection (d); and
            ``(4) meets the pediatric network adequacy standards 
        developed under subsection (e).
    ``(c) Eligibility Determinations; Assignment.--
            ``(1) Enrollment.--Subject to the assignment requirements 
        of paragraph (2), the enrollment and disenrollment of eligible 
        children in an MCCC program shall be carried out in accordance 
        with the requirements of this section and the applicable 
        program agreement.
            ``(2) Network assignment.--
                    ``(A) In general.--Eligible children shall be 
                prospectively enrolled in an MCCC program by the State 
                by assigning such eligible children to a nationally 
                designated children's hospital network for an initial 
                period of up to 90 days beginning on the date on which 
                the child is assigned to such hospital network, unless 
                the child opts not to participate in any MCCC program 
                in accordance with a process established by the State.
                    ``(B) Basis for initial assignment.--Such an 
                assignment shall be made as follows:
                            ``(i) First, by considering the prevalence 
                        of visits by the child to a pediatrician or 
                        other specialist who is participating in the 
                        nationally designated children's hospital 
                        network.
                            ``(ii) Second, by considering the selection 
                        of the child's family.
                            ``(iii) Third, by considering the location 
                        of the primary residence of the child.
                            ``(iv) Fourth, by considering the proximity 
                        of the child to regional referral networks 
                        established by the nationally designated 
                        children's hospital network.
                    ``(C) Limitation on certain assignments.--In the 
                case of the assignment of a child under subparagraph 
                (A) through the consideration of a factor specified in 
                clause (iii) or (iv) of subparagraph (B), such an 
                assignment may only be made to a nationally designated 
                children's hospital network that ensures access to a 
                medical home that is located not more than 30 miles of 
                the primary residence of the child.
                    ``(D) Reassignment.--Following the 90-day period 
                referred to in subparagraph (A), the child may elect--
                            ``(i) to be assigned to the nationally 
                        designated children's hospital network of their 
                        choice that has a program agreement in effect 
                        with respect to an MCCC program in which the 
                        child is eligible to enroll; or
                            ``(ii) to not participate in any MCCC 
                        program and receive care through enrollment in 
                        the State plan under this title or the State 
                        child health plan under title XXI.
    ``(d)  Program Agreements.--
            ``(1) In general.--The Secretary, in close cooperation with 
        the State administering agencies electing to provide the 
        medical assistance described in subsection (a), shall establish 
        procedures for entering into, extending, and terminating 
        program agreements under this section.
            ``(2) Terms.--
                    ``(A) In general.--A program agreement entered into 
                under this section by the Secretary, a State 
                administering agency, and a nationally designated 
                children's hospital network shall provide for each of 
                the following terms:
                            ``(i) The agreement shall designate the 
                        service area of the MCCC program that is the 
                        subject of the agreement.
                            ``(ii) The agreement shall be effective for 
                        a contract year, but may be extended for 
                        additional contract years in the absence of a 
                        notice by a party to terminate, and is subject 
                        to termination by the Secretary and the State 
                        administering agency at any time for cause (as 
                        provided under the agreement).
                            ``(iii) The agreement shall require that 
                        the nationally designated children's hospital 
                        network submit care management network and 
                        coverage plans to the Secretary that are 
                        centered around medical home models and that 
                        describe the governance of the network. 
                            ``(iv) The agreement shall require the 
                        hospital network to meet all applicable 
                        requirements imposed by State and local laws.
                            ``(v) The agreement shall require such 
                        State, in the case of eligible children who are 
                        residents of the State, to make payments to the 
                        hospital network, regardless of whether MCCC 
                        program services are furnished to such eligible 
                        children in another State.
                            ``(vi) The agreement shall require that the 
                        standards and measures developed under 
                        subsection (e) be applied to the hospital 
                        network, including measures requiring, with 
                        respect to network adequacy standards, that the 
                        hospital network establish such provider 
                        networks for primary, secondary, and tertiary 
                        care as are necessary to ensure the adequate 
                        furnishing of MCCC program services to eligible 
                        children enrolled in the MCCC program that is 
                        the subject of the agreement. 
                            ``(vii) The agreement shall require the 
                        hospital network to comply with the data 
                        collection and recordkeeping requirements of 
                        subparagraph (C).
                            ``(viii) The agreement shall require the 
                        hospital network to accept as payment any 
                        payment made using the risk-based methodology 
                        developed under subsection (g). 
                            ``(ix) The agreement shall contain such 
                        additional terms and conditions as the parties 
                        may agree to, so long as such terms and 
                        conditions are consistent with this section.
                    ``(B) Service area requirements.--In designating a 
                service area under subparagraph (A)(i), the Secretary 
                (in consultation with the relevant State administering 
                agency) shall--
                            ``(i) ensure that such service area 
                        provides convenient access for eligible 
                        children to MCCC program services, without 
                        limiting the size of, or number of, nationally 
                        designated children's hospital networks 
                        providing such services; and
                            ``(ii) ensure that such hospital networks 
                        and the population of eligible children in the 
                        proposed service area are sufficient to support 
                        the delivery of MCCC program services and to 
                        avoid the unnecessary duplication of services 
                        and the impairment of the financial and service 
                        viability of another MCCC program.
                    ``(C) Data and recordkeeping requirements.--The 
                data collection and recordkeeping requirements under 
                this subparagraph, with respect to a nationally 
                designated children's hospital network, are as follows:
                            ``(i) The hospital network shall collect 
                        claims data on claims submitted with respect to 
                        eligible children who are furnished MCCC 
                        program services under an MCCC program. Such 
                        data shall be reported in a standardized format 
                        and made available to the public for purposes 
                        of establishing a national database on such 
                        claims. 
                            ``(ii) The hospital network shall maintain, 
                        and provide the Secretary and the State 
                        administering agency access to, the records 
                        relating to the MCCC program operated by the 
                        hospital network, including pertinent 
                        financial, medical, and personnel records.
                            ``(iii) The hospital network shall submit 
                        to the Secretary and the State administering 
                        agency such reports as the Secretary finds (in 
                        consultation with the State administering 
                        agency) necessary to monitor the operation, 
                        cost, and effectiveness of the MCCC program 
                        operated by the hospital network.
            ``(3) Termination of agreements.--The Secretary shall issue 
        regulations establishing the circumstances under which--
                    ``(A) the Secretary or a State administering agency 
                may terminate a MCCC program agreement for cause; and
                    ``(B) a nationally designated children's hospital 
                network may terminate such an agreement after 
                appropriate notice to the Secretary, the State 
                administering agency, and enrollees.
    ``(e) Quality Assurance.--
            ``(1) Development of standards and measures.--The Secretary 
        shall, in consultation with nationally designated children's 
        hospital networks and national pediatric policy organizations 
        (such as the Children's Hospital Association and the American 
        Academy of Pediatrics)--
                    ``(A) establish a national set of quality assurance 
                and improvement protocols and procedures to apply under 
                MCCC programs;
                    ``(B) develop pediatric quality measures;
                    ``(C) develop pediatric network adequacy standards 
                for access by eligible children to MCCC program 
                services; and
                    ``(D) develop criteria for national pediatric-
                focused care coordination for eligible children.
            ``(2) Use of pqmp measures.--In carrying out paragraph (1), 
        the Secretary shall apply, to the extent applicable, child 
        health quality measures and measures for centers of excellence 
        for children with complex needs developed under this title, 
        title XXI, and section 1139A and take into account HEDIS 
        quality measures as required under section 1852(e)(3) and other 
        quality measures.
    ``(f) Standard Medicaid Data Set.--
            ``(1) In general.--The Secretary, the States, and the 
        nationally designated children's hospital networks shall 
        collaborate to obtain consistent and verifiable Medicaid 
        Analytic Extract data or a comparable data set and shall 
        establish data-sharing agreements to further support 
        collaborative planning and care coordination for medically 
        complex children.
            ``(2) Claims analysis.--The Secretary shall--
                    ``(A) perform claims analysis on the data set 
                developed under paragraph (1) to determine the 
                utilization of items and services furnished under an 
                MCCC program to eligible children; and
                    ``(B) for purposes of building a national database, 
                submit to Congress, and make publicly available on the 
                Internet site of the Centers for Medicare and Medicaid 
                services, a report on such claims in a standardized 
                format.
            ``(3) Payment for reporting incentives.--The State plan may 
        provide for pay-for-reporting incentives during the first two 
        years of any program agreement entered into under this section 
        to ensure participation and analysis of consistent data under 
        this paragraph to enable the development of an appropriate 
        risk-based payment methodology under subsection (g).
    ``(g) Payments to Nationally Designated Children's Hospital 
Networks.--
            ``(1) In general.--The State plan shall provide for payment 
        to nationally designated children's hospital networks pursuant 
        to the terms of a program agreement using a risk-based payment 
        methodology (or methodologies) established in accordance with 
        this subsection.
            ``(2) Transition from fee-for-service to risk-based payment 
        model.--
                    ``(A) In general.--Subject to subparagraph (B), 
                payment to nationally designated children's hospital 
                networks under this subsection shall be based initially 
                on a fee-for-service payment model and shall gradually 
                transition, over a 5-year period, to an equitable, 
                risk-based payment model using a methodology developed 
                under paragraph (3). For the first two years of such 
                period, a nationally designated children's hospital 
                network may receive, in addition to any fee-for-service 
                payments made to such hospital network, per capita care 
                coordination payments with respect to expenditures for 
                items and services furnished to eligible children 
                enrolled in the MCCC program operated by the hospital 
                network through medical home programs and other care 
                coordination activities for which an all-inclusive 
                payment model is more suitable than fee-for-service 
                reimbursement.
                    ``(B) Exception for certain states.--Subparagraph 
                (A) shall not apply in the case of a State that, as of 
                the date of the enactment of this section, uses a risk-
                based payment methodology with respect to payments made 
                for items and services furnished to eligible children 
                under the State plan or State child health plan.
                    ``(C) Data analysis during initial period.--During 
                the first two years of the implementation of an MCCC 
                program, the Secretary shall analyze data collected 
                under subsection (f) for purposes of developing a risk-
                based payment methodology that would be implemented 
                beginning with the third year of implementation of the 
                MCCC program.
            ``(3) Development of risk-based payment methodology.--The 
        relevant State administering agency shall develop, in 
        coordination with the Medicaid and CHIP Payment and Access 
        Commission and the pediatric health care provider community, 
        payment methodologies for payment under the State plan in 
        accordance with this subsection that--
                    ``(A) take into account the data analyzed under 
                paragraph (2)(C);
                    ``(B) are actuarially sound, determined using an 
                actuarial method that ensures that such methodologies 
                reflect historic pediatric claims data;
                    ``(C) include--
                            ``(i) a risk adjustment method, re-
                        insurance system, or risk-corridor procedure to 
                        account for variations in acuity of the 
                        eligible children enrolled in MCCC programs; 
                        and
                            ``(ii) a shared savings approach, which may 
                        include a form of bundled payment or risk-
                        reward payment model that aligns payment with 
                        both cost savings and quality improvement; and
                    ``(D) may provide for a model for making payments 
                other than payments made on a per-member, per-month 
                basis.
    ``(h) Waivers of Requirements.--
            ``(1) In general.--With respect to carrying out an MCCC 
        program under this section, the following provisions of law 
        shall not apply:
                    ``(A) Section 1902(a)(1), relating to 
                statewideness.
                    ``(B) Section 1902(a)(10), insofar as such section 
                relates to comparability of services among different 
                population groups.
                    ``(C) Sections 1902(a)(23) and 1915(b)(4), relating 
                to freedom of choice of providers.
                    ``(D) Section 1903(m)(2)(A), insofar as such 
                section would prohibit a nationally designated 
                children's hospital network from receiving certain 
                payments.
                    ``(E) Such other provisions of this title, title 
                XVIII, sections 1128A and 1128B, and any provisions of 
                the Federal antitrust laws as the Secretary determines 
                are inapplicable or the waiver of which are necessary 
                for purposes of carrying out an MCCC program under this 
                section.
            ``(2) Application in states operating under demonstration 
        projects.--
                    ``(A) In general.--In the case of any State which 
                is providing medical assistance to its residents under 
                a waiver described in subparagraph (B), the Secretary 
                shall not require that the State meet the requirements 
                of this section in the same manner as the State would 
                be required to meet such requirements if the State had 
                in effect a plan approved under this title.
                    ``(B) Waiver described.--A waiver described in this 
                subparagraph is a waiver granted under section 1115 
                under which a State--
                            ``(i) provides for coverage through a 
                        medicaid managed care plan of all or a certain 
                        proportion of MCCC program services furnished 
                        to eligible children in the State through a 
                        nationally designated children's hospital 
                        network;
                            ``(ii) assigns such eligible children to 
                        such a network in accordance with subsection 
                        (c);
                            ``(iii) requires that the State and such 
                        network enter into a program agreement that 
                        meets the requirements applicable to program 
                        agreements under subsection (d); and
                            ``(iv) uses a payment methodology to make 
                        payments made for MCCC program services 
                        furnished to eligible children that is 
                        consistent with the requirements of subsection 
                        (g).
    ``(i) Preemption of State Law.--A State may not impose any 
requirement on the nationally qualified children's hospital network's 
operation of a MCCC program under a program agreement that meets the 
requirements of this section that is inconsistent with or would 
otherwise impede the satisfaction by such hospital network of the 
requirements of this section (including the requirements of such 
program agreement).
    ``(j) Definitions.--In this section:
            ``(1) Eligible child.--The term `eligible child' means, 
        with respect to an MCCC program, an individual who is under the 
        age of 18 and who--
                    ``(A) is eligible for medical assistance under the 
                State plan under this title or child health assistance 
                under the State child health plan under title XXI; and
                    ``(B) has a chronic, physical, developmental, 
                behavioral, or emotional condition that--
                            ``(i) affects two or more body systems;
                            ``(ii) requires intensive care coordination 
                        to avoid excessive hospitalizations or 
                        emergency department visits; or
                            ``(iii) meets the criteria for medical 
                        complexity using risk adjustment methodologies 
                        (such as Clinical Risk Groups or another 
                        recognized pediatric population grouping 
                        system) agreed upon by the Secretary in 
                        coordination with a national panel of pediatric 
                        experts.
            ``(2) MCCC program.--The term `MCCC program' means a 
        Medicaid coordinated care program that provides eligible 
        children with MCCC program services through a nationally 
        designated children's hospital network in accordance with a 
        program agreement that meets the requirements of subsection 
        (d).
            ``(3) MCCC program services.--The term `MCCC program 
        services' means the full range of items and services for which 
        medical assistance is available under a State plan for 
        children, including pediatric care management services and 
        pediatric-focused care coordination and health promotion, as 
        specified in the program agreement.
            ``(4) Nationally designated children's hospital network.--
        The term `nationally designated children's hospital network' 
        means a network of hospitals and health care providers--
                    ``(A) anchored by a qualified children's hospital 
                or hospitals with principal governance responsibility 
                over the hospital network;
                    ``(B) in which the full complement of health care 
                providers needed to provide the best care for children 
                in the network participate; and
                    ``(C) that represents the interests of physicians, 
                other health care providers, parents of medically 
                complex children, and other relatives of such children.
            ``(5) Program agreement.--The term `program agreement' 
        means an agreement between a nationally designated children's 
        hospital network, the Secretary, and a State administering 
        agency for the operation of an MCCC program by the hospital 
        network in the State that meets the requirements of this 
        section.
            ``(6) Qualified children's hospital.--The term `qualified 
        children's hospital' means a children's hospital that--
                    ``(A) qualifies to receive payment under section 
                340E of the Public Health Service Act (relating to 
                children's hospitals that operate graduate medical 
                education programs); or
                    ``(B) meets 3 or more of the following criteria:
                            ``(i) Minimum pediatric discharges.--The 
                        hospital has at least 5,000 annual pediatric 
                        discharges (including neonates, but excluding 
                        obstetrics and normal newborns) for the most 
                        recent cost reporting period for which data are 
                        available.
                            ``(ii) Minimum number of beds.--The 
                        hospital has 100 licensed pediatric beds, not 
                        including beds in neonatal intensive care units 
                        but including beds in pediatric intensive care 
                        units and other acute care beds.
                            ``(iii) Access to pediatric emergency 
                        services.--The hospital has access (through 
                        ownership or otherwise) to pediatric emergency 
                        services.
                            ``(iv) Medicaid reliant.--At least 30 
                        percent of the pediatric discharges or 
                        inpatient days (excluding observation days) in 
                        the hospital for the most recent cost reporting 
                        period for which data are available were 
                        children eligible for medical assistance under 
                        this title or for children's health assistance 
                        under title XXI.
                            ``(v) Affiliation with accredited pediatric 
                        residency training program.--The hospital 
                        sponsors or is affiliated with a pediatric 
                        residency program that is accredited by the 
                        Accreditation Council for Graduate Medical 
                        Education.
                            ``(vi) Pediatric medical home programs.--
                        The hospital has established and implemented 
                        demonstrable pediatric medical home programs 
                        dedicated to medically complex children.
            ``(7) State administering agency.--The term `State 
        administering agency' means, with respect to the operation of 
        an MCCC program in a State, the agency of that State (which may 
        be the single agency responsible for administration of the 
        State plan under this title in the State) responsible for 
        administering program agreements under this section.''.
    (b) Inclusion as Medical Assistance.--Section 1905(a) of the Social 
Security Act (42 U.S.C. 1396d(a)) is amended--
            (1) in paragraph (28), by striking ``and'' at the end;
            (2) by redesignating paragraph (29) as paragraph (30); and
            (3) by inserting after paragraph (28) the following new 
        paragraph:
            ``(29) items and services furnished under an MCCC program 
        under section 1947 to eligible children enrolled in an MCCC 
        program under such section; and''.
    (c) Application Under Chip.--Section 2107(e)(1) of the Social 
Security Act (42 U.S.C. 1397gg(e)(1)) is amended by adding at the end 
the following new subparagraph:
                    ``(P) Section 1947 (relating to Medicaid children's 
                care coordination programs for children with complex 
                medical conditions).''.
    (d) Regulations.--Not later than 120 days after the date of the 
enactment of this Act, the Secretary of Health and Human Services shall 
make rules on the record, after opportunity for an agency hearing to 
carry out the amendments made by this section in accordance with 
sections 556 and 557 of title 5, United States Code.
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