[Congressional Record Volume 152, Number 106 (Thursday, August 3, 2006)]
[Senate]
[Pages S8832-S8833]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BINGAMAN (for himself, Mr. Smith, Mrs. Lincoln, Mr. Pryor, 
        and Mr. Akaka):
  S. 3819. A bill to amend title XIX of the Social Security Act to 
provide for redistribution and extended availability of unexpended 
medicaid DSH allotments, and for other purposes; to the Committee on 
Finance.
  Mr. BINGAMAN. Mr. President, I rise today to introduce legislation 
with Senators Smith, Lincoln, Pryor, and Akaka entitled the 
``Strengthening the Safety Net Act of 2006.'' This legislation is 
important to the continued survival of many of our Nation's safety net 
hospitals that provide critical health care access to our Nation's 46 
million uninsured citizens through the Medicaid disproportionate share 
hospital, or DSH, program.
  In recognition of the burden certain hospitals bear in providing a 
large share of health services to the low-income patients, including 
Medicaid and the uninsured, the Congress established the Medicaid DSH 
program in the mid-1980s to give additional funding to support such 
``disproportionate share'' hospitals. By providing financial relief to 
these hospitals, the Medicaid DSH program maintains hospital access for 
the poor. As the National Governors Association has said, ``Medicaid 
DSH's funds are an important part of statewide systems of health care 
access for the uninsured.''
  Mr. President, I request unanimous consent for the text of the bill 
and the text of the fact sheet on the legislation be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3819

       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 ``Strengthening the Safety Net 
     Act of 2006''.

     SEC. 2. REDISTRIBUTION AND EXTENDED AVAILABILITY OF 
                   UNEXPENDED MEDICAID DSH ALLOTMENTS.

       Section 1923(f) of the Social Security Act (42 U.S.C. 
     1396r-4(f)) is amended--
       (1) in paragraph (3)(A), by striking ``paragraph (5)'' and 
     inserting ``paragraphs (5) and (7)'';
       (2) by redesignating paragraph (7) as paragraph (8); and
       (3) by inserting after paragraph (6), the following new 
     paragraph:
       ``(7) Redistribution and extended availability of 
     unexpended allotments.--
       ``(A) Establishment of redistribution pool.--
       ``(i) In general.--Subject to clauses (ii) and (iii), the 
     Secretary shall establish, as of October 1 of fiscal year 
     2007, and of each fiscal year thereafter, the following 
     redistribution pool:

       ``(I) In the case of fiscal year 2007, a $150,000,000 
     redistribution pool from the total amount of the unexpended 
     State DSH allotments for fiscal year 2004.
       ``(II) In the case of fiscal year 2008, a $250,000,000 
     redistribution pool from the total amount of the unexpended 
     State DSH allotments for fiscal year 2005.
       ``(III) In the case of fiscal year 2009 and each succeeding 
     fiscal year thereafter, a $400,000,000 redistribution pool 
     from the total amount of the unexpended State DSH allotments 
     for the third preceding fiscal year.

       ``(ii) Unexpended state dsh allotments.--If a State claims 
     Federal financial participation for a payment adjustment made 
     under this section for a fiscal year from which a 
     redistribution pool of unexpended State DSH allotments has 
     already been created under clause (i), then, for purposes of 
     this paragraph, the total amount of unexpended State DSH 
     allotments in the fiscal year following the State claim for 
     such Federal financial participation, shall be reduced by the 
     Federal financial participation related to such claim.
       ``(iii) Reduction in amounts available.--If the total 
     amount of the unexpended State DSH allotments for a fiscal 
     year (taking into account any adjustment to such amount 
     required under clause (ii)) is less than the amount necessary 
     to provide, for such fiscal year, the redistribution pool 
     described in clause (i) and the amounts to be made available 
     for grants under section 3(g) of the Strengthening the Safety 
     Net Act of 2006 for such fiscal year, the Secretary shall 
     reduce the amounts that are to be available for the 
     redistribution pool under this paragraph and grants under 
     such section, respectively, to such total amount.
       ``(B) Redistribution.--
       ``(i) In general.--Not later than October 1, 2006, and 
     October 1 of each year thereafter, the Secretary shall allot 
     the redistribution pool established for that fiscal year 
     among eligible States.
       ``(ii) Priority.--In making allotments under clause (i), 
     the Secretary shall give priority--

       ``(I) first to eligible States described in paragraph 
     (5)(B) (without regard to the requirement that total 
     expenditures under the State plan for disproportionate share 
     hospital adjustments for fiscal year 2000 is greater than 0); 
     and
       ``(II) then to eligible States whose State DSH allotment 
     per medicaid enrollee and uninsured individual for the third 
     preceding fiscal year is below the national average DSH 
     allotment per medicaid enrollee and uninsured individual for 
     that fiscal year.

       ``(C) Expenditure rules.--An amount allotted to a State 
     from the redistribution pool established for a fiscal year--
       ``(i) shall not be included in the determination of the 
     State's DSH allotment for any fiscal year under this section;
       ``(ii) notwithstanding any other provision of law, shall 
     remain available for expenditure by the State through the end 
     of the second fiscal year after the fiscal year in which the 
     allotment from the redistribution pool is made for 
     expenditures incurred in any of such fiscal years; and
       ``(iii) shall only be used to make payment adjustments to 
     disproportionate share hospitals in accordance with the 
     requirements of this section.
       ``(D) Definitions.--In this paragraph:
       ``(i) Eligible state.--The term `eligible State' means, 
     with respect to the fiscal year from which a redistribution 
     pool is established under subparagraph (A)(i), a State that 
     has expended at least 90 percent of the State DSH allotment 
     for that fiscal year by the end of the succeeding fiscal 
     year.
       ``(ii) State dsh allotment per medicaid enrollee and 
     uninsured individual.--The term `State DSH allotment per 
     medicaid enrollee and uninsured individual' means the amount 
     equal to the State DSH allotment for a fiscal year divided by 
     the sum of the number of individuals who received medical 
     assistance under the State program under this title for that 
     fiscal year and the number of State residents with no health 
     insurance coverage for that fiscal year, as determined by the 
     Bureau of the Census.
       ``(iii) National average dsh allotment per medicaid 
     enrollee and uninsured individual.--The term `national 
     average DSH allotment per medicaid enrollee and uninsured 
     individual' means the amount equal to the total amount of 
     State DSH allotments for a fiscal year divided by the sum of 
     the total number of individuals who received medical 
     assistance under a State program under this title for that 
     fiscal year and the total number of residents with respect to 
     all States who did not have health insurance coverage for 
     that fiscal year, as determined by the Bureau of the 
     Census.''.

     SEC. 3. HEALTH SERVICES FOR THE UNINSURED.

       (a) Demonstration Grants To Health Access Networks.--
       (1) In general.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall 
     award demonstration grants to health access networks.
       (2) Application.--Each applying health access network shall 
     submit a plan that meets the requirements of subsection (c) 
     for the purpose of improving access, quality, and continuity 
     of care for uninsured individuals through better coordination 
     of care by the network.
       (3) Authority to limit number of grants.--The number of 
     demonstration grants awarded under this section shall be 
     limited, in the discretion of the Secretary, so that grants 
     are sufficient to permit grantees to provide patient care 
     services to no fewer than the number of uninsured individuals 
     specified by each network in its grant application.
       (b) Definition of Health Access Network.--
       (1) In general.--In this section, the term ``health access 
     network'' means a collection

[[Page S8833]]

     of safety net providers, including hospitals, community 
     health centers, public health departments, physicians, safety 
     net health plans, or other recognized safety net providers 
     organized for the purpose of restructuring and improving the 
     access, quality, and continuity of care to the uninsured and 
     underinsured, that offers patients access to all levels of 
     care, including primary, outpatient, specialty, certain 
     ancillary services, and acute inpatient care, within a 
     community or across a broad spectrum of providers across a 
     service region or State.
       (2) Inclusion of section 330 networks and plans.--The term 
     ``health access network'' includes networks and plans that 
     meet the requirements for funding under section 330(e)(1)(C) 
     of the Public Health Service Act (42 U.S.C. 254b(e)(1)(C)).
       (3) Inclusion of integrated health care systems.--
       (A) In general.--Such term also includes an integrated 
     health care system (including a pediatric system).
       (B) Definition of integrated health care system.--For 
     purposes of this section, an integrated health care system 
     (including a pediatric system) is a health care provider that 
     is organized to provide care in a coordinated fashion and 
     assures access to a full range of primary, specialty, and 
     hospital care, to uninsured and under-insured individuals, as 
     appropriate.
       (c) Plan Requirements.--
       (1) In general.--A health access network that desires a 
     grant under this section shall submit a plan to the Secretary 
     that details how the network intends to--
       (A) manage costs associated with the provision of health 
     care services to uninsured and underinsured individuals 
     served by the health access network;
       (B) improve access to, and the availability of, health care 
     services provided to uninsured and underinsured individuals 
     served by the health access network;
       (C) enhance the quality and coordination of health care 
     services provided to uninsured and underinsured individuals 
     served by the health access network;
       (D) improve the health status of uninsured and underinsured 
     individuals served by the health access network; and
       (E) reduce health disparities in the population of 
     uninsured and underinsured individuals served by the health 
     access network.
       (2) Identification of measurable goals.--The health access 
     network shall--
       (A) identify in the plan measurable performance targets for 
     at least 3 of the goals described in paragraph (1); and
       (B) agree that a portion of the payment of grant funds for 
     patient care services after the first year for which such 
     payment is made shall be contingent upon the health access 
     network demonstrating success in achieving such targets.
       (d) Use of Funds.--A health access network that receives 
     funds under this section shall expend--
       (1) an amount equal to not less than 90 percent of such 
     funds for direct patient care services; and
       (2) an amount equal to not more than 10 percent of such 
     funds for the network's operation and development for the 
     purpose of improving the efficiency and effectiveness of the 
     business and clinical operations of providers within the 
     health access network, including through the integration of 
     management information systems (including development and 
     implementation of electronic medical records) and financial, 
     administrative, or clinical functions across providers.
       (e) Rule of Construction Regarding Direct Patient Care 
     Services.--With respect to health access networks described 
     in subsection (b)(2), the term ``direct patient care 
     services'' shall be construed to mean the provision or 
     purchase of services, such as specialty medical care and 
     diagnostic services, that are not available or are 
     insufficiently available through the network's providers. In 
     purchasing such services for uninsured and underinsured 
     individuals, networks shall, to the maximum extent feasible, 
     endeavor to purchase such services from safety net providers.
       (f) Supplement, not supplant.--Funds paid to a health 
     access network under a grant made under this section shall 
     supplement and not supplant, other Federal or State payments 
     that are made to the health access network to support the 
     provision of health care services to low-income or uninsured 
     patients.
       (g) Funding.--
       (1) Transfer of portion of unexpended dsh allotments.--
     Notwithstanding any other provision of law, as of October 1 
     of fiscal year 2007, and each fiscal year thereafter, amounts 
     described in paragraph (2) are hereby transferred from the 
     total amount of the unexpended State DSH allotments under 
     section 1923 of the Social Security Act (42 U.S.C. 1396r-4) 
     and made available for grants under this section.
       (2) Amounts made available for grants.--The amounts to be 
     made available under this section for each fiscal year 
     beginning with fiscal year 2007 are equal to the 
     redistribution pool amounts determined for each fiscal year 
     under section 1923(f)(7)(A)(i) of the Social Security Act (42 
     U.S.C. 1396r-4(f)(7)(A)(i)) (as amended by section 2(3) of 
     the Strengthening the Safety Net Act of 2006).
                                  ____

  There being no objection, the additional material was ordered to be 
printed in the Record, as follows:

                Strengthening the Safety Net Act of 2006

       This legislation, introduced by Senators Bingaman, Smith, 
     Lincoln, Pryor, and Akaka, would redistribute unused federal 
     Medicaid Disproportionate Share Hospital (DSH) funds to 
     strengthen and augment the nation's health care safety net. 
     Half of the redistributed funds would be used to increase the 
     availability of DSH funds to states currently receiving low 
     or less than average DSH allotments and the other half would 
     be used to fund integrated ``health access networks'' of 
     community health centers, public hospitals, and other safety 
     net providers. These networks would be required to provide 
     high quality primary, outpatient, inpatient and specialty 
     care to uninsured and other medically vulnerable populations.
       In 2007, the bill would redistribute $300 million in 
     unexpended funds; in 2008, $500 million; and in 2009 and 
     thereafter $800 million. These levels would be prorated 
     downward if there are insufficient unexpended funds to meet 
     the statutory amounts. This legislation will:
       Keep funds allocated to the safety net with the safety net; 
     Provide money to test implementation of high quality 
     integrated networks of safety net providers; and, Allow 
     networks of community health centers to purchase specialty 
     care services.


                               Background

       Congress created the Medicaid DSH requirement in 1981 to 
     ensure that state Medicaid programs provide adequate payments 
     to hospitals whose patient populations are disproportionately 
     composed of low income Medicaid and uninsured patients. 
     Medicaid DSH payments have evolved into one of the most 
     important sources of financing for the nation's safety net. 
     Each year, each individual state is allocated a DSH 
     allotment. The allotments vary considerably from state to 
     state and a state's ability to draw-down its DSH allotment 
     varies depending on its financial resources. Each year, some 
     states do not utilize their entire DSH allotment.
       In part, this legislation would permit a redistribution of 
     unused DSH funds to states that have lower DSH allotments. 
     Two categories of states would be prioritized to receive 
     redistributed DSH money to supplement their existing DSH 
     allotment: (1) low DSH states (i.e. states that are 
     designated by the MMA as a low DSH state due to DSH 
     expenditures being less than 3 percent of total Medicaid 
     expenditures in fiscal year 2000) and (2) states whose DSH 
     allotment per Medicaid enrollee and uninsured individual is 
     below the national average. Only states that have spent at 
     least 90 percent of their DSH allotment would be eligible for 
     the redistribution.
       Redistributed DSH dollars also would fund ``Health Access 
     Network'' demonstration projects designed to improve access, 
     quality, and continuity of care for uninsured individuals 
     through better coordination of care. To obtain funding under 
     this legislation, health access networks would be required to 
     submit a plan to the Secretary of the Department of Health 
     and Human Services that details how the network plans to:
       Reduce costs associated with the provision of health care 
     services to uninsured individuals; Improve access to, and the 
     availability of, health care services provided to individuals 
     served by the health access network; Enhance the quality and 
     coordination of health care services provided to such 
     individuals; Improve the health status of communities served 
     by the health access network; and, Reduce health disparities 
     in such communities.
       Health access networks would be required to identify 
     measurable performance targets and demonstrate progress in 
     order to qualify for future year funding. Grantees would have 
     to spend 90 percent of awarded funds for direct patient care 
     services.
                                 ______