[Congressional Record Volume 151, Number 23 (Thursday, March 3, 2005)]
[Senate]
[Pages S2041-S2044]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HARKIN (for himself and Mr. Smith):
  S. 528. A bill to authorize the Secretary of Health and Human 
Services to provide grants to States to conduct demonstration projects 
that are designed to enable medicaid-eligible individuals to receive 
support for appropriate and necessary long-term services in the 
settings of their choice; to the Committee on Finance.
  Mr. HARKIN. Mr. President, today I, along with Senator Smith, 
introduce the Money Follows the Person Act of 2005. This legislation is 
needed to truly bring people with disabilities into the mainstream of 
society and provide equal opportunity for employment and community 
activities.
  In order to work or live in their own homes, Americans with 
disabilities need access to community-based services and supports. 
Unfortunately, under current Federal Medicaid policy, the deck is 
stacked in favor of living in an institution. The purpose of this bill 
is to level the playing field and give eligible individuals equal 
access to community-based services and supports.
  Under our legislation, the Medicaid money paid by states and the 
Federal government would follow the person with a disability from an 
institution into the community. This legislation provides 100 percent 
Federal reimbursement for the community services that an individual 
needs during the first year that they move out of an institution or 
nursing home. By fully reimbursing the states, it gives them some 
additional resources to allow people with disabilities to choose to 
live in the community.
  President Bush first proposed the Money Follows the Person 
Rebalancing Initiative in his FY '04 budget and indicated that the 
demonstration project would provide full Federal reimbursement for 
community services for the first year that an individual moves out of 
an institution or nursing home. Senator Smith and I have worked with 
the disability community and others in drafting this legislation, and 
we look forward to working with the Administration and our colleagues 
to enact the Money Follows the Person concept into law.
  We have a Medicaid system in this country that is spending 
approximately two-thirds of its dollars on institutional care and 
approximately one-third on community services. This bill is an 
important step toward switching those numbers around.
  It is shameful that our federal dollars are being spent to segregate 
people, not integrate them. It has been 15 years since we passed the 
Americans with Disabilities Act, which said ``no'' to segregation. But 
our Medicaid program says ``yes'' and we need to change it. This is the 
next civil rights battle. If we really meant what we said in the ADA in 
1990, we should enact this legislation.
  The civil right of a person with a disability to be integrated into 
his or her community should not depend on his or her address. In 
Olmstead v. LC, the Supreme Court recognized that needless 
institutionalization is a form of discrimination under the Americans 
with Disabilities Act. We in Congress have a responsibility to help 
States meet their obligations under Olmstead. An individual should not 
be asked to move to another state in order to avoid needless 
segregation. They also should not be moved away from family and friends 
because their only choice is an institution.
  Federal Medicaid policy should reflect the consensus reached in the 
ADA that Americans with disabilities should have equal opportunity to 
contribute to our communities and participate in our society as full 
citizens. That means no one has to sacrifice their full participation 
in society because they need help getting out of the house in the 
morning or assistance with personal care or some other basic service.
  This bill will open the door to full participation by people with 
disabilities in our neighborhoods, our communities, our workplaces, and 
our American Dream, and I urge all my colleagues to support us on this 
issue. I want to thank Senator Smith for his commitment to improving 
access to home and community based services for people with 
disabilities.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 528

       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 ``Money Follows the Person Act 
     of 2005''.

     SEC. 2. MONEY FOLLOWS THE PERSON REBALANCING DEMONSTRATION.

       (a) Program Purpose and Authority.--The Secretary of Health 
     and Human Services (in this section referred to as the 
     ``Secretary'') is authorized to award, on a competitive 
     basis, grants to States in accordance with this section for 
     demonstration projects (each in this section referred to as a 
     ``MFP demonstration project'') designed to achieve the 
     following objectives with respect to institutional and home 
     and community-based long-term care services under State 
     medicaid programs:
       (1) Rebalancing.--Increase the use of home and community-
     based, rather than institutional, long-term care services.
       (2) Money follows the person.--Eliminate barriers or 
     mechanisms, whether in the State law, the State medicaid 
     plan, the State budget, or otherwise, that prevent or 
     restrict the flexible use of medicaid funds to enable 
     medicaid-eligible individuals to receive support for 
     appropriate and necessary long-term services in the settings 
     of their choice.
       (3) Continuity of service.--Increase the ability of the 
     State medicaid program to assure continued provision of home 
     and community-based long-term care services to eligible 
     individuals who choose to transition from an institutional to 
     a community setting.
       (4) Quality assurance and quality improvement.--Ensure that 
     procedures are in place (at least comparable to those 
     required under the qualified HCB program) to provide quality 
     assurance for eligible individuals receiving medicaid home 
     and community-based long-term care services and to provide 
     for continuous quality improvement in such services.
       (b) Definitions.--For purposes of this section:
       (1) Home and community-based long-term care services.--The 
     term ``home and community-based long-term care services'' 
     means, with respect to a State medicaid program, home and 
     community-based services (including home health and personal 
     care services) that are provided under the State's qualified 
     HCB program or that could be provided under such a program 
     but are otherwise provided under the medicaid program.
       (2) Eligible individual.--The term ``eligible individual'' 
     means, with respect to an MFP demonstration project of a 
     State, an individual in the State--
       (A) who, immediately before beginning participation in the 
     MFP demonstration project--
       (i) resides (and has resided, for a period of not less than 
     six months or for such longer minimum period, not to exceed 2 
     years, as may be specified by the State) in an inpatient 
     facility;
       (ii) is receiving medicaid benefits for inpatient services 
     furnished by such inpatient facility; and

[[Page S2042]]

       (iii) with respect to whom a determination has been made 
     that, but for the provision of home and community-based long-
     term care services, the individual would continue to require 
     the level of care provided in an inpatient facility; and
       (B) who resides in a qualified residence beginning on the 
     initial date of participation in the demonstration project.
       (3) Inpatient facility.--The term ``inpatient facility'' 
     means a hospital, nursing facility, or intermediate care 
     facility for the mentally retarded. Such term includes an 
     institution for mental diseases, but only, with respect to a 
     State, to the extent medical assistance is available under 
     the State medicaid plan for services provided by such 
     institution.
       (4) Individual's authorized representative.--The term 
     ``individual's authorized representative'' means, with 
     respect to an eligible individual, the individual's parent, 
     family member, guardian, advocate, or other authorized 
     representative of the individual.
       (5) Medicaid.--The term ``medicaid'' means, with respect to 
     a State, the State program under title XIX of the Social 
     Security Act (including any waiver or demonstration under 
     such title or under section 1115 of such Act relating to such 
     title).
       (6) Qualified hcb program.--The term ``qualified HCB 
     program'' means a program providing home and community-based 
     long-term care services operating under medicaid, whether or 
     not operating under waiver authority.
       (7) Qualified residence.--The term ``qualified residence'' 
     means, with respect to an eligible individual--
       (A) a home owned or leased by the individual or the 
     individual's family member;
       (B) an apartment with an individual lease, with lockable 
     access and egress, and which includes living, sleeping, 
     bathing, and cooking areas over which the individual or the 
     individual's family has domain and control; and
       (C) a residence, in a community-based residential setting, 
     in which no more than 4 unrelated individuals reside.
       (8) Qualified expenditures.--The term ``qualified 
     expenditures'' means expenditures by the State under its MFP 
     demonstration project for home and community-based long-term 
     care services for an eligible individual participating in the 
     MFP demonstration project, but only with respect to services 
     furnished during the 12-month period beginning on the date 
     the individual is discharged from an inpatient facility 
     referred to in paragraph (2)(A)(i).
       (9) Self-directed services.--The term ``self-directed'' 
     means, with respect to, home and community-based long-term 
     care services for an eligible individual, such services for 
     the individual which are planned and purchased under the 
     direction and control of such individual or the individual's 
     authorized representative, including the amount, duration, 
     scope, provider, and location of such services, under the 
     State medicaid program consistent with the following 
     requirements:
       (A) Assessment.--There is an assessment of the needs, 
     capabilities, and preferences of the individual with respect 
     to such services.
       (B) Service plan.--Based on such assessment, there is 
     developed jointly with such individual or the individual's 
     authorized representative a plan for such services for such 
     individual that is approved by the State and that--
       (i) specifies those services which the individual or the 
     individual's authorized representative would be responsible 
     for directing;
       (ii) identifies the methods by which the individual or the 
     individual's authorized representative will select, manage, 
     and dismiss providers of such services;
       (iii) specifies the role of family members and others whose 
     participation is sought by the individual or the individual's 
     authorized representative with respect to such services;
       (iv) is developed through a person-centered process that--

       (I) is directed by the individual or the individual's 
     authorized representative;
       (II) builds upon the individual's capacity to engage in 
     activities that promote community life and that respects the 
     individual's preferences, choices, and abilities; and
       (III) involves families, friends, and professionals as 
     desired or required by the individual or the individual's 
     authorized representative;

       (v) includes appropriate risk management techniques that 
     recognize the roles and sharing of responsibilities in 
     obtaining services in a self-directed manner and assure the 
     appropriateness of such plan based upon the resources and 
     capabilities of the individual or the individual's authorized 
     representative; and
       (vi) may include an individualized budget which identifies 
     the dollar value of the services and supports under the 
     control and direction of the individual or the individual's 
     authorized representative.
       (C) Budget Process.--With respect to individualized budgets 
     described in subparagraph (B)(vi), the State application 
     under subsection (c)--
       (i) describes the method for calculating the dollar values 
     in such budgets based on reliable costs and service 
     utilization;
       (ii) defines a process for making adjustments in such 
     dollar values to reflect changes in individual assessments 
     and service plans; and
       (iii) provides a procedure to evaluate expenditures under 
     such budgets.
       (10) State.--The term ``State'' has the meaning given such 
     term for purposes of title XIX of the Social Security Act.
       (c) State Application.--A State seeking approval of an MFP 
     demonstration project shall submit to the Secretary, at such 
     time and in such format as the Secretary requires, an 
     application meeting the following requirements and containing 
     such additional information, provisions, and assurances, as 
     the Secretary may require:
       (1) Assurance of a public development process.--The 
     application contains an assurance that the State has engaged, 
     and will continue to engage, in a public process for the 
     design, development, and evaluation of the MFP demonstration 
     project that allows for input from eligible individuals, the 
     families of such individuals, authorized representatives of 
     such individuals, providers, and other interested parties.
       (2) Operation in connection with qualified hcb program to 
     assure continuity of services.--The State will conduct the 
     MFP demonstration project for eligible individuals in 
     conjunction with the operation of a qualified HCB program 
     that is in operation (or approved) in the State for such 
     individuals in a manner that assures continuity of medicaid 
     coverage for such individuals so long as such individuals 
     continue to be eligible for medical assistance.
       (3) Demonstration project period.--The application shall 
     specify the period of the MFP demonstration project, which 
     shall include at least two consecutive fiscal years in the 5-
     fiscal-year period beginning with fiscal year 2006.
       (4) Service area.--The application shall specify the 
     service area or areas of the MFP demonstration project, which 
     may be a Statewide area or one or more geographic areas of 
     the State.
       (5) Targeted groups and numbers of individuals served.--The 
     application shall specify--
       (A) the target groups of eligible individuals to be 
     assisted to transition from an inpatient facility to a 
     qualified residence during each fiscal year of the MFP 
     demonstration project;
       (B) the projected numbers of eligible individuals in each 
     targeted group of eligible individuals to be so assisted 
     during each such year; and
       (C) the estimated total annual qualified expenditures for 
     each fiscal year of the MFP demonstration project.
       (6) Individual choice, continuity of care.--The application 
     shall contain assurances that--
       (A) each eligible individual or the individual's authorized 
     representative will be provided the opportunity to make an 
     informed choice regarding whether to participate in the MFP 
     demonstration project;
       (B) each eligible individual or the individual's authorized 
     representative will choose the qualified residence in which 
     the individual will reside and the setting in which the 
     individual will receive home and community-based long-term 
     care services;
       (C) the State will continue to make available, so long as 
     the State operates its qualified HCB program consistent with 
     applicable requirements, home and community-based long-term 
     care services to each individual who completes participation 
     in the MFP demonstration project for as long as the 
     individual remains eligible for medical assistance for such 
     services under such qualified HCB program (including meeting 
     a requirement relating to requiring a level of care provided 
     in an inpatient facility and continuing to require such 
     services).
       (7) Rebalancing.--The application shall--
       (A) provide such information as the Secretary may require 
     concerning the dollar amounts of State medicaid expenditures 
     for the fiscal year, immediately preceding the first fiscal 
     year of the State's MFP demonstration project, for long-term 
     care services and the percentage of such expenditures that 
     were for institutional long-term care services or were for 
     home and community-based long-term care services;
       (B)(i) specify the methods to be used by the State to 
     increase, for each fiscal year during the MFP demonstration 
     project, the dollar amount of such total expenditures for 
     home and community-based long-term care services and the 
     percentage of such total expenditures for long-term care 
     services that are for home and community-based long-term care 
     services; and
       (ii) describe the extent to which the MFP demonstration 
     project will contribute to accomplishment of objectives 
     described in subsection (a).
       (8) Money follows the person.--The application shall 
     describe the methods to be used by the State to eliminate any 
     legal, budgetary, or other barriers to flexibility in the 
     availability of medicaid funds to pay for long-term care 
     services for eligible individuals participating in the 
     project in the appropriate settings of their choice, 
     including costs to transition from an institutional setting 
     to a qualified residence.
       (9) Maintenance of effort and cost-effectiveness.--The 
     application shall contain or be accompanied by such 
     information and assurances as may be required to satisfy the 
     Secretary that--
       (A) total expenditures under the State medicaid program for 
     home and community-based long-term care services will not be 
     less for any fiscal year during the MFP demonstration project 
     than for the greater of such expenditures for--
       (i) fiscal year 2004; or

[[Page S2043]]

       (ii) any succeeding fiscal year before the first year of 
     the MFP demonstration project; and
       (B) in the case of a qualified HCB program operating under 
     a waiver under subsection (c) or (d) of section 1915 of the 
     Social Security Act (42 U.S.C. 1396n), but for the amount 
     awarded under a grant under this section, the State program 
     would continue to meet the cost-effectiveness requirements of 
     subsection (c)(2)(D) of such section or comparable 
     requirements under subsection (d)(5) of such section, 
     respectively.
       (10) Waiver requests.--The application shall contain or be 
     accompanied by requests for any modification or adjustment of 
     waivers of medicaid requirements described in subsection 
     (d)(3), including adjustments to maximum numbers of 
     individuals included and package of benefits, including one-
     time transitional services, provided.
       (11) Quality assurance and quality improvement.--The 
     application shall include--
       (A) a plan satisfactory to the Secretary for quality 
     assurance and quality improvement for home and community-
     based long-term care services under the State medicaid 
     program, including a plan to assure the health and welfare of 
     individuals participating in the MFP demonstration project; 
     and
       (B) an assurance that the State will cooperate in carrying 
     out activities under subsection (f) to develop and implement 
     continuous quality assurance and quality improvement systems 
     for home and community-based long-term care services.
       (12) Optional program for self-directed services.--If the 
     State elects to provide for any home and community-based 
     long-term care services as self-directed services (as defined 
     in subsection (b)(9)) under the MFP demonstration project, 
     the application shall provide the following:
       (A) Meeting requirements.--A description of how the project 
     will meet the applicable requirements of such subsection for 
     the provision of self-directed services.
       (B) Voluntary election.--A description of how eligible 
     individuals will be provided with the opportunity to make an 
     informed election to receive self-directed services under the 
     project and after the end of the project.
       (C) State support in service plan development.--
     Satisfactory assurances that the State will provide support 
     to eligible individuals who self-direct in developing and 
     implementing their service plans.
       (D) Oversight of receipt of services.--Satisfactory 
     assurances that the State will provide oversight of eligible 
     individual's receipt of such self-directed services, 
     including steps to assure the quality of services provided 
     and that the provision of such services are consistent with 
     the service plan under such subsection.

     Nothing in this section shall be construed as requiring a 
     State to make an election under the project to provide for 
     home and community-based long-term care services as self-
     directed services, or as requiring an individual to elect to 
     receive self-directed services under the project.
       (13) Reports and evaluation.--The application shall provide 
     that--
       (A) the State will furnish to the Secretary such reports 
     concerning the MFP demonstration project, on such timetable, 
     in such uniform format, and containing such information as 
     the Secretary may require, as will allow for reliable 
     comparisons of MFP demonstration projects across States; and
       (B) the State will participate in and cooperate with the 
     evaluation of the MFP demonstration project.
       (d) Secretary's Award of Competitive Grants.--
       (1) In general.--The Secretary shall award grants under 
     this section on a competitive basis to States selected from 
     among those with applications meeting the requirements of 
     subsection (c), in accordance with the provisions of this 
     subsection.
       (2) Selection and modification of state applications.--In 
     selecting State applications for the awarding of such a 
     grant, the Secretary--
       (A) shall take into consideration the manner in which and 
     extent to which the State proposes to achieve the objectives 
     specified in subsection (a);
       (B) shall seek to achieve an appropriate national balance 
     in the numbers of eligible individuals, within different 
     target groups of eligible individuals, who are assisted to 
     transition to qualified residences under MFP demonstration 
     projects, and in the geographic distribution of States 
     operating MFP demonstration projects;
       (C) shall give preference to State applications proposing--
       (i) to provide transition assistance to eligible 
     individuals within multiple target groups; and
       (ii) to provide eligible individuals with the opportunity 
     to receive home and community-based long-term care services 
     as self-directed services, as defined in subsection (b)(9); 
     and
       (D) shall take such objectives into consideration in 
     setting the annual amounts of State grant awards under this 
     section.
       (3) Waiver authority.--The Secretary is authorized to waive 
     the following provisions of title XIX of the Social Security 
     Act, to the extent necessary to enable a State initiative to 
     meet the requirements and accomplish the purposes of this 
     section:
       (A) Statewideness.--Section 1902(a)(1), in order to permit 
     implementation of a State initiative in a selected area or 
     areas of the State.
       (B) Comparability.--Section 1902(a)(10)(B), in order to 
     permit a State initiative to assist a selected category or 
     categories of individuals described in subsection (b)(2)(A).
       (C) Income and resources eligibility.--Section 
     1902(a)(10)(C)(i)(III), in order to permit a State to apply 
     institutional eligibility rules to individuals transitioning 
     to community-based care.
       (D) Provider agreements.--Section 1902(a)(27), in order to 
     permit a State to implement self-directed services in a cost-
     effective manner.
       (4) Conditional approval of outyear grant.--In awarding 
     grants under this section, the Secretary shall condition the 
     grant for the second and any subsequent fiscal years of the 
     grant period on the following:
       (A) Numerical benchmarks.--The State must demonstrate to 
     the satisfaction of the Secretary that it is meeting 
     numerical benchmarks specified in the grant agreement for--
       (i) increasing State medicaid support for home and 
     community-based long-term care services under subsection 
     (c)(5); and
       (ii) numbers of eligible individuals assisted to transition 
     to qualified residences.
       (B) Quality of care.--The State must demonstrate to the 
     satisfaction of the Secretary that it is meeting the 
     requirements under subsection (c)(9) to assure the health and 
     welfare of MFP demonstration project participants.
       (e) Payments to States; Carryover of Unused Grant 
     Amounts.--
       (1) Payments.--For each calendar quarter in a fiscal year 
     during the period a State is awarded a grant under subsection 
     (d), the Secretary shall pay to the State from its grant 
     award for such fiscal year an amount equal to the lesser of--
       (A) 100 percent of the amount of qualified expenditures 
     made during such quarter; or
       (B) the total amount remaining in such grant award for such 
     fiscal year (taking into account the application of paragraph 
     (2)).
       (2) Carryover of unused amounts.--Any portion of a State 
     grant award for a fiscal year under this section remaining at 
     the end of such fiscal year shall remain available to the 
     State for the next four fiscal years, subject to paragraph 
     (3).
       (3) Re-awarding of certain unused amounts.--In the case of 
     a State that the Secretary determines pursuant to subsection 
     (d)(4) has failed to meet the conditions for continuation of 
     a MFP demonstration project under this section in a 
     succeeding year or years, the Secretary shall rescind the 
     grant awards for such succeeding year or years, together with 
     any unspent portion of an award for prior years, and shall 
     add such amounts to the appropriation for the immediately 
     succeeding fiscal year for grants under this section.
       (4) Preventing duplication of payment.--The payment under a 
     MFP demonstration project with respect to qualified 
     expenditures shall be in lieu of any payment with respect to 
     such expenditures that could otherwise be paid under 
     medicaid, including under section 1903(a) of the Social 
     Security Act. Nothing in the previous sentence shall be 
     construed as preventing the payment under medicaid for such 
     expenditures in a grant year after amounts available to pay 
     for such expenditures under the MFP demonstration project 
     have been exhausted.
       (f) Quality Assurance and Improvement; Technical 
     Assistance; Oversight.--
       (1) In general.--The Secretary, either directly or by grant 
     or contract, shall provide for technical assistance to and 
     oversight of States for purposes of upgrading quality 
     assurance and quality improvement systems under medicaid home 
     and community-based waivers, including--
       (A) dissemination of information on promising practices;
       (B) guidance on system design elements addressing the 
     unique needs of participating beneficiaries;
       (C) ongoing consultation on quality, including assistance 
     in developing necessary tools, resources, and monitoring 
     systems; and
       (D) guidance on remedying programmatic and systemic 
     problems.
       (2) Funding.--From the amounts appropriated under 
     subsection (h) for each of fiscal years 2006 through 2010, 
     not more than $2,400,000 shall be available to the Secretary 
     to carry out this subsection.
       (g) Research and Evaluation.--
       (1) In general.--The Secretary, directly or through grant 
     or contract, shall provide for research on and a national 
     evaluation of the program under this section, including 
     assistance to the Secretary in preparing the final report 
     required under paragraph (2). The evaluation shall include an 
     analysis of projected and actual savings related to the 
     transition of individuals to a qualified residences in each 
     State conducting an MFP demonstration project.
       (2) Final report.--The Secretary shall make a final report 
     to the President and the Congress, not later than September 
     30, 2011, reflecting the evaluation described in paragraph 
     (1) and providing findings and conclusions on the conduct and 
     effectiveness of MFP demonstration projects.
       (3) Funding.--From the amounts appropriated under 
     subsection (h) for each of fiscal years 2006 through 2010, 
     not more than $1,100,000 per year shall be available to the 
     Secretary to carry out this subsection.
       (h) Appropriations.--

[[Page S2044]]

       (1) In general.--There are appropriated, from any funds in 
     the Treasury not otherwise appropriated, for grants to carry 
     out this section--
       (A) $250,000,000 for fiscal year 2006;
       (B) $300,000,000 for fiscal year 2007;
       (C) $350,000,000 for fiscal year 2008;
       (D) $400,000,000 for fiscal year 2009; and
       (E) $450,000,000 for fiscal year 2010.
       (2) Availability.--Amounts made available under paragraph 
     (1) for a fiscal year shall remain available for the awarding 
     of grants to States by not later than September 30, 2010.
       (i) Rule of Construction.--Nothing in this Act shall be 
     construed as requiring a State to agree to a capped allotment 
     for expenditures for long-term care services under medicaid.
                                 ______