[Congressional Record Volume 152, Number 96 (Thursday, July 20, 2006)]
[Senate]
[Pages S8064-S8066]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KENNEDY (for himself, Mr. Harkin Mr. Jeffords, Mr. 
        Bingaman, Mrs. Clinton, Mrs. Murray, Mr. Reed, Mr. Dodd, Ms. 
        Mikulski, Mr. Dayton, Ms. Stabenow, and Mr. Schumer):
  S. 3705. A bill to amend title XIX of the Social Security Act to 
improve requirements under the Medicaid program for items and services 
furnished in or through an educational program or setting to children, 
including children with developmental, physical, or mental health 
needs, and for other purposes; to the Committee on Finance.
  Mr. KENNEDY. Mr. President, it is a privilege to join my Senate and 
House colleagues in introducing the Protecting Children's Health in 
Schools Act of 2006. This bill will ensure that the Nation's 7 million 
school children with disabilities will have continued access to health 
care in school.
  In 1975, the Nation made a commitment to guarantee children with 
disabilities equal access to education. For these children to learn and 
thrive in schools, the integration of education with health care is of 
paramount importance. Coordination with Medicaid makes an immense 
difference to schools in meeting the needs of these children.
  This year, however, the Bush administration has declared its intent 
to end Medicaid reimbursements to schools for the support services they 
need in order to provide medical and health-related services to 
disabled children. The administration is saying ``NO'' to any further 
financial help to Medicaid-covered disabled children who need 
specialized transportation to obtain their health services at school. 
It is saying ``NO'' to any legitimate reimbursement to the school for 
costs incurred for administrative duties related to Medicaid services.
  It's bad enough that Congress and the administration have not kept 
the commitment to ``glide-path'' funding of IDEA needs in 2004. Now the 
administration proposes to deny funding to schools under the federal 
program that supports the health needs of disabled children. It makes 
no sense to make it so difficult for disabled children to achieve in 
school--both under IDEA and the No Child Left Behind.
  At stake is an estimated $3.6 billion in Medicaid funds over the next 
5 years. Such funding is essential to help identify disabled children 
and connect them to services that can meet their special health and 
learning needs during the school day.
  This decision by the administration follows years of resisting 
Medicaid reimbursements to schools that provide these services, without 
clear guidance on how schools should appropriately seek reimbursement.
  The ``Protecting Children's Health in Schools Act'' recognizes the 
importance of schools as a site of delivery of health care. It ensures 
that children with disabilities can continue to obtain health services 
during the school day. The bill also provides for clear and consistent 
guidelines to be established, so that schools can be held accountable 
and seek appropriate reimbursement.
  The legislation has the support of over 60 groups, including parents, 
teachers, principals, school boards, and health care providers--people 
who work with children with disabilities every day and know what is 
needed to facilitate their growth, development, and long-term success.
  I urge all of our colleagues to join us in supporting these children 
across the Nation, by providing the realistic support their schools 
need in order to meet these basic health care requirements of their 
students.
  Mr. KENNEDY. I ask unanimous consent that the attached bill be 
printed into the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 3705

       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 ``Protecting Children's Health 
     in Schools Act of 2006''.

     SEC. 2. REQUIREMENTS UNDER THE MEDICAID PROGRAM FOR ITEMS AND 
                   SERVICES FURNISHED IN OR THROUGH AN EDUCATIONAL 
                   PROGRAM OR SETTING TO CHILDREN, INCLUDING 
                   CHILDREN WITH DEVELOPMENTAL, PHYSICAL, OR 
                   MENTAL HEALTH NEEDS.

       (a) Requirements for Payments.--Section 1903 of the Social 
     Security Act (42 U.S.C. 1396b) is amended--
       (1) in subsection (i)--
       (A) in paragraph (22), by striking the period at the end 
     and inserting ``; or''; and
       (B) by inserting after paragraph (22), the following new 
     paragraphs:
       ``(23) with respect to any amount expended by, or on behalf 
     of, the State (including by a local educational agency in the 
     State or the lead agency in the State with responsibility for 
     administering part C of the Individuals with Disabilities 
     Education Act) for an item or service provided under the 
     State plan in or through an educational program or setting, 
     or for any administrative cost incurred to carry out the 
     State plan in or through such a program or setting, or for a 
     transportation service for an individual who has not attained 
     age 21, unless the requirements of subsection (y) are met; or
       ``(24) with respect to any amount expended for an item or 
     service provided under the State plan in or through an 
     educational program or setting, or for any administrative 
     cost incurred to carry out the plan in or through such a 
     program or setting by, or on behalf of, the State through an 
     agency that is not the State agency with responsibility for 
     administering the State plan (including a local educational 
     agency in the State or the lead agency in the State with 
     responsibility for administering part C of the Individuals 
     with Disabilities Education Act) and that enters into a 
     contract or other arrangement with a person or entity for or 
     in connection with the collection or submission of claims for 
     such an expenditure or cost, unless the agency--
       ``(A) if not a public agency operating a consortium with 
     other public agencies, uses a competitive bidding process or 
     otherwise to contract with such person or entity at a 
     reasonable rate commensurate with the services performed by 
     the person or entity; and
       ``(B) requires that any fees (including any administrative 
     fees) to be paid to the person or entity for the collection 
     or submission of such claims are identified as a non-
     contingent, specified dollar amount in the contract.''; and
       (2) by adding at the end the following new subsection:
       ``(y) Requirements for Federal Financial Participation for 
     Furnishing Medical Assistance (including Medically Needed 
     Transportation) in or Through an Educational Program or 
     Setting.--For purposes of subsection (i)(23), the 
     requirements of this subsection are the following:
       ``(1) Approved methodology for expenditures for bundled 
     items, services, and administrative costs.--
       ``(A) In general.--In the case of any amount expended by, 
     or on behalf of, the State for a bundle of individual items, 
     services, and administrative costs under the State plan that 
     are furnished in or through an educational program or 
     setting, the expenditure must be made in accordance with a 
     methodology approved by the Secretary which--
       ``(i) provides for an itemization to the Secretary in a 
     manner that ensures accountability of the cost of the bundled 
     items, services, and administrative costs and includes 
     payment rates and the methodologies underlying the 
     establishment of such rates;
       ``(ii) has a sound basis for determining such payment rates 
     and methodologies; and

[[Page S8065]]

       ``(iii) matches payments for the bundled items, services, 
     and administrative costs with corresponding items and 
     services provided and administrative costs incurred under the 
     State plan.
       ``(B) Rule of construction.--Nothing in subparagraph (A) 
     shall be construed as--
       ``(i) requiring a State to establish and apply such a 
     methodology through a State plan amendment;
       ``(ii) requiring a State with such an approved methodology 
     to obtain the approval of the Secretary for any increase in 
     rates of reimbursement that are established consistent with 
     such methodology; or
       ``(iii) prohibiting the Secretary from reviewing a State's 
     costs for the individual items, services, and administrative 
     costs that make up a proposed bundle of items, services, and 
     costs as a condition of approval of the methodology that the 
     State will establish to determine the rate of reimbursement 
     for such bundle of items, services, and costs.
       ``(2) Application of market rate for individual items, 
     services, administrative costs.--In the case of an amount 
     expended by, or on behalf of, the State for an individual 
     item, service, or administrative cost under the State plan 
     that is furnished in or through an educational program or 
     setting, the State must establish that the amount expended--
       ``(A) does not exceed the amount that would have been paid 
     for the item, service, or administrative cost if the item or 
     service was provided or the cost was incurred by an entity in 
     or through a program or setting other than an educational 
     program or setting; or
       ``(B) if the amount expended for the item, service, or 
     administrative cost is higher than the amount described in 
     subparagraph (A), was necessary.
       ``(3) Transportation services.--
       ``(A) In general.--In the case of an amount expended by, or 
     on behalf of, the State for furnishing in or through an 
     educational program or setting a transportation service for 
     an individual who has not attained age 21 and who is eligible 
     for medical assistance under the State plan, the State mush 
     establish that--
       ``(i) a medical need for transportation is specifically 
     listed in the individualized education program for the 
     individual established pursuant to part B of the Individuals 
     with Disabilities Education Act or, in the case of an infant 
     or a toddler with a disability, in the individualized family 
     service plan established for such infant or toddler pursuant 
     to part C of such Act, or is furnished to the individual 
     pursuant to section 504 of the Rehabilitation Act of 1973;
       ``(ii) the vehicle used to furnish such transportation 
     service is specially equipped or staffed to accommodate 
     individuals who have not attained age 21 with developmental, 
     physical, or mental health needs; and
       ``(iii) payment for such service is made only for costs 
     directly attributable to costs associated with transporting 
     individuals who have not attained age 21 and whose 
     developmental, physical, or mental health needs require 
     transport in such a vehicle in order to receive the services 
     for which medical assistance is provided under the State 
     plan.
       ``(B) Rule of construction.--Nothing in subparagraph (A) 
     shall be construed as modifying the obligation of a State to 
     ensure that an individual who has not attained age 21 and who 
     is eligible for medical assistance under the State plan 
     receives necessary transportation services to and from a 
     provider of medical assistance in or through a program or 
     setting other than an educational program or setting.''.
       (b) Requirements for the Provision of Items and Services 
     Through Medicaid Managed Care Organizations.--
       (1) Contractual requirements.--Section 1903(m)(2) of the 
     Social Security Act (42 U.S.C. 1396b(m)(2)) is amended--
       (A) in subparagraph (A), by inserting after clause (i) the 
     following new clause:
       ``(ii) the contract with the entity satisfies the 
     requirements of subparagraph (C) (relating to payment for, 
     and coverage of, such services under an individual's 
     education program, an individualized family service plan, or 
     when furnished in or through an educational program or 
     setting);''; and
       (B) by inserting after subparagraph (B), the following new 
     subparagraph:
       ``(C) For purposes of clause (ii) of subparagraph (A), the 
     requirements of this subparagraph are the following:
       ``(i) The contract with the entity specifies the coverage 
     and payment responsibilities of the entity in relation to 
     medical assistance for items and services that are covered 
     under the State plan and included in the contract, when such 
     items and services are furnished in or through an educational 
     program or setting.
       ``(ii) In any case in which the entity is obligated under 
     the contract to pay for items and services covered under the 
     State plan, the contract with the entity requires the entity 
     to--
       ``(I) enter into a provider network service agreement with 
     the qualified provider or providers furnishing such items or 
     services in or through an educational program or setting;
       ``(II) promptly pay such providers at a rate that is at 
     least equal to the rate that would be paid to a provider 
     furnishing the same service in a non-educational program or 
     setting; and
       ``(III) treat as final and binding determinations by State 
     licensed providers or providers eligible for reimbursement 
     under the State plan working in an educational program or 
     setting regarding the medical necessity of an item or 
     service.
       ``(iii) The contract with the entity specifies the 
     obligation of the entity to ensure that providers of items or 
     services that are furnished in or through an educational 
     program or setting refer children furnished such items or 
     services to the entity and its provider network for 
     additional services that are not available in or through such 
     program or setting but that are covered under the State plan 
     and included in the entity's contract with the State.
       ``(iv) The contract with the entity requires, with respect 
     to payment for, and coverage of, services for which the 
     entity is responsible for, that the entity must demonstrate 
     that the entity has established procedures to--
       ``(I) ensure coordination between the State, a local 
     educational agency and the lead agency in the State with 
     responsibility for administering part C of the Individuals 
     with Disabilities Education Act with respect to those 
     services for an individual who has not attained age 21 and 
     who is eligible for medical assistance under the State plan 
     (including an individual who has an individualized education 
     program established pursuant to part B of the Individuals 
     with Disabilities Education Act or otherwise or an infant or 
     toddler with a disability who has an individualized family 
     service plan established pursuant to part C of such Act) 
     which are required for the individual under the individual's 
     education program or the individualized family service plan, 
     or are furnished to the individual pursuant to section 504 of 
     the Rehabilitation Act of 1973 and which are not specifically 
     included in the services required under the contract, but are 
     the responsibility of the State, a local educational agency, 
     or the lead agency in the State with responsibility for 
     administering part C of the Individuals with Disabilities 
     Education Act; and
       ``(II) prevent duplication of services and payments under 
     this title with respect to items and services covered under 
     the State plan that are furnished in or through an 
     educational program or setting to such individuals enrolled 
     under the contract.''.
       (2) Prohibition on duplicative payments.--
       (A) In general.--Section 1903(i) of the Social Security Act 
     (42 U.S.C. 1396b(i)), as amended by subsection (a), is 
     amended--
       (i) in paragraph (24)(B), by striking the period and 
     inserting ``; or''; and
       (ii) by inserting after paragraph (24) the following new 
     paragraph:
       ``(25) with respect to any amount expended under the State 
     plan for an item, service, or administrative cost for which 
     payment is or may be made directly to a person or entity 
     (including a State, local educational agency, or the lead 
     agency in the State with responsibility for administering 
     part C of the Individuals with Disabilities Education Act) 
     under the State plan if payment for such item, service, or 
     administrative cost was included in the determination of a 
     prepaid capitation or other risk-based rate of payment to an 
     entity under a contract pursuant to section 1903(m).''.
       (B) Conforming amendment.--The third sentence of section 
     1903(i) of such Act (42 U.S.C. 1396b(i)), as amended by 
     subsection (a)(1)(C), is amended by striking ``and (24)'' and 
     inserting ``(24), and (25)''.
       (c) Allowable Share of FFP With Respect to Payment for 
     Services Furnished in or Through an Educational Program or 
     Setting.--Section 1903(w)(6) of the Social Security Act (42 
     U.S.C. 1396b(w)(6)) is amended--
       (1) in subparagraph (A), by inserting ``subject to 
     subparagraph (C),'' after ``subsection,''; and
       (2) by adding at the end the following new subparagraph:
       ``(C) In the case of any Federal financial participation 
     paid under subsection (a) with respect to an expenditure for 
     an item or service provided under the plan, or for any 
     administrative cost incurred to carry out the plan, that is 
     furnished in or through an educational program or setting, 
     the State shall provide that--
       ``(i) if 0 percent of the expenditure was made or the cost 
     was incurred directly by the State, the State shall pay the 
     local educational agency in the State or the lead agency in 
     the State with responsibility for administering part C of the 
     Individuals with Disabilities Education Act that made the 
     expenditure or incurred the cost (and, if applicable, any 
     consortium of public agencies that incurred costs in 
     connection with the collection or submission of claims for 
     such expenditures or costs), 100 percent (divided, as 
     appropriate, between such agencies and such a consortium, if 
     applicable) of the amount of the Federal financial 
     participation; and
       ``(ii) if 100 or any lesser percent of the expenditure was 
     made or the cost was directly incurred by the State, the 
     State shall retain only such percentage of the Federal 
     financial participation paid for the expenditure or cost as 
     does not exceed the percentage of such expenditure or cost 
     that was funded by State revenues that are dedicated solely 
     for the provision of such medical assistance (and shall pay 
     out of any remaining percentage of such Federal financial 
     participation, the percentage due to the local educational 
     agency in the State or the lead agency in the State with 
     responsibility for administering part C

[[Page S8066]]

     of the Individuals with Disabilities Education Act that made 
     or incurred the remaining percentage of such expenditure or 
     cost (and, if applicable, any consortium of public agencies 
     that incurred costs in connection with the collection or 
     submission of claims for such expenditures or costs)).''.
       (d) Assurance of Reimbursement for Administrative, 
     Enrollment, and Outreach Activities Conducted by Local 
     Educational Agencies.--
       (1) Medicaid.--Section 1902 of the Social Security Act (42 
     U.S.C. 1396a) is amended by inserting after subsection (j) 
     the following new subsection:
       ``(k) Nothing in this title shall be construed as 
     authorizing the Secretary to prohibit the State agency with 
     responsibility for the administration or supervision of the 
     administration of the State plan from entering into 
     interagency agreements with local educational agencies under 
     which such local educational agencies shall be reimbursed for 
     the Federal share of amounts expended for administrative, 
     enrollment, and outreach activities for which payment is made 
     to the State under section 1903(a)(7), including with respect 
     to such activities as are conducted for purposes of 
     satisfying the requirements of subsection (a)(43).''.
       (2) SCHIP.--Section 2107(e)(1) of the Social Security Act 
     (42 U.S.C. 1397gg(e)(1)) is amended--
       (A) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (C) through (E), respectively; and
       (B) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) Section 1902(k) (relating to interagency agreements 
     with local educational agencies for reimbursement for 
     expenditures for administrative, enrollment, and outreach 
     activities).''.
       (e) Clarification of Coverage of Epsdt and Items and 
     Services Furnished to a Disabled Child Pursuant to Section 
     504 of the Rehabilitation Act of 1973; Definition of 
     ``Educational Program or Setting''.--Section 1903(c) of the 
     Social Security Act (42 U.S.C. 1396b(c)) is amended--
       (1) by inserting ``(1)'' after ``(c)'';
       (2) by striking ``Education Act or'' and inserting 
     ``Education Act,'';
       (3) by inserting ``, or furnished to a child with a 
     disability pursuant to section 504 of the Rehabilitation Act 
     of 1973'' before the period; and
       (4) by adding at the end the following new paragraphs:
       ``(2) Nothing in this title shall be construed as 
     prohibiting or restricting, or authorizing the Secretary to 
     prohibit or restrict, payment under subsection (a) for the 
     following items or services furnished in or through an 
     educational program or setting, or costs incurred with 
     respect to the furnishing of such items or services:
       ``(A) Medical assistance for items or services described in 
     section 1905(a)(4)(B) (relating to early and periodic 
     screening, diagnostic, and treatment services defined in 
     section 1905(r)) and costs incurred for providing such items 
     or services in accordance with the requirements of section 
     1902(a)(43).
       ``(B) Costs incurred for providing services related to the 
     administration of the State plan, including providing 
     information regarding the availability of, and eligibility 
     for, medical assistance under the plan, and assistance with 
     determinations of eligibility and enrollment and 
     redeterminations of eligibility under the plan.
       ``(3) Nothing in this title shall be construed as 
     prohibiting or restricting, or authorizing the Secretary to 
     prohibit or restrict, payment under subsection (a) for 
     medical assistance furnished in or through an educational 
     program or setting or costs described in paragraph (2)(B) 
     solely because--
       ``(A) the State utilizes an all-inclusive payment 
     arrangement in making payments for medical assistance 
     described in subsections (a) or (r) of section 1905; or
       ``(B) the State utilizes a cost allocation system that 
     meets Federal requirements when paying for the cost of 
     services described in section 1902(a)(43) or other 
     administrative services directly related to the 
     administration of the State plan.
       ``(4)(A) For purposes of this title, the term `educational 
     program or setting' means any location in which the items or 
     services included in a child's individualized education plan 
     established pursuant to part B of the Individuals with 
     Disabilities Education Act or otherwise, or in an infant's or 
     toddler's individualized family service plan established 
     pursuant to part C of such Act, are delivered, including the 
     home, child care setting, or school of the child, infant, or 
     toddler.
       ``(B) Such term includes--
       ``(i) any location in which an evaluation or assessment is 
     conducted, in accordance with the requirements of section 
     1902(a)(43) and subsections (a)(4)(B) and (r) of section 
     1905, to determine if a child is a child with a disability 
     under section 614 of the Individuals with Disabilities 
     Education Act (20 U.S.C. 1414) who requires an individualized 
     education program (IEP) under section 614(d) of such Act (20 
     U.S.C. 1414(d)) or if an infant or toddler is an infant or 
     toddler with a disability under section 635(a)(3) of such Act 
     (20 U.S.C. 1435(a)(3)) who requires an individualized family 
     service plan under section 636 of such Act (20 U.S.C. 1436) 
     and any location in which a reevaluation or reassessment of 
     such a determination is conducted; and
       ``(ii) for purposes of subsection (m)(2)(C), any location 
     in which items or services described in section 1905(a)(4)(B) 
     (relating to early and periodic screening, diagnostic, and 
     treatment services defined in section 1905(r)) are delivered 
     and costs are incurred for providing such items or services 
     in accordance with the requirements of section 
     1902(a)(43).''.
       (f) Assurance of Compliance With Federal and State 
     Requirements.--Section 1902(a) of the Social Security Act (42 
     U.S.C. 1396a(a)) is amended--
       (1) in paragraph (69), by striking ``and'' at the end;
       (2) in paragraph (70)(B)(iv), by striking the period at the 
     end and inserting ``; and''; and
       (3) by inserting after paragraph (70), the following new 
     paragraph:
       ``(71) provide that--
       ``(A) the State will establish procedures to ensure that--
       ``(i) any provider of an item or service covered under the 
     plan that is furnished in or through an educational program 
     or setting complies with all Federal and State requirements 
     applicable to providers of such items or services under the 
     plan; and
       ``(ii) any educational entity that is engaged in the 
     provision of an activity described in paragraph (43) or any 
     other activity that is directly related to the administration 
     of the plan complies with all Federal and State requirements 
     applicable for payment for such activity; and
       ``(B) the State will not furnish medical assistance for an 
     item or service covered under the plan in or through an 
     educational program or setting, or undertake any activity 
     described in paragraph (43) or any other activity that is 
     directly related to the administration of the plan in or 
     through such a program or setting, unless the entity 
     responsible for providing the item or service, or undertaking 
     such an activity, in or through the educational program or 
     setting will be paid under the State plan for the costs 
     related to the furnishing of such item or service or the 
     undertaking of such activity.''.
       (g) Uniform Methodology for Educational Program or Setting-
     Based Claims.--
       (1) In general.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services and the Secretary of Education, acting jointly and 
     in consultation with State medicaid directors, State 
     educational agencies, local educational agencies, and State 
     agencies with responsibility for administering part C of the 
     Individuals with Disabilities Education Act, shall develop 
     and implement a uniform methodology for claims for payment of 
     medical assistance and related administrative costs furnished 
     under title XIX of the Social Security Act in an educational 
     program or setting.
       (2) Requirements.--The methodology developed under 
     paragraph (1)--
       (A) shall not prohibit or restrict payment for medical 
     assistance and administrative activities that are provided or 
     conducted in accordance with section 1903(c) of the Social 
     Security Act (42 U.S.C. 1396b(c)); and
       (B) with respect to administrative costs, shall be based 
     on--
       (i) standards related to time studies and population 
     estimates; and
       (ii) a national standard for determining payment for such 
     costs.
       (h) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act and 
     shall apply to items and services provided and expenditures 
     made on or after such date, without regard to whether 
     implementing regulations are in effect.
                                 ______