[Congressional Record Volume 155, Number 89 (Monday, June 15, 2009)]
[Senate]
[Pages S6585-S6607]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. CANTWELL:
  S. 1262. A bill to amend title VII of the Public Health Service Act 
and titles XVIII and XIX of the Social Security Act to provide 
additional resources for primary care services, to create new payment 
models for services under Medicare, to expand provision of non-
institutionally-based long-term services, and for other purposes; to 
the Committee on Finance.
  Ms. CANTWELL. Mr. President, I rise today to introduce the Medical 
Efficiency and Delivery Improvement of Care Act, MEDIC, a bill which 
provides common-sense solutions to many of the most critical problems 
besetting our health care system. As we embark on reforming health care 
in America, we are faced with restructuring a system as complex as it 
is important--a system which includes not only doctors and patients but 
medical schools, nursing homes, hospitals and community health centers. 
While every piece of the health care puzzle requires individual 
attention, one common thread connects them all: the need for improved 
efficiency among providers though increased access to primary care 
physicians. They are the ones who can provide coordinated care for 
patients, leading to better quality and a more efficient system. That 
is why I am introducing this bill as a vehicle for proposals which 
increase the efficiency and coordination across the health care 
spectrum to improve health and save money.
  In my State of Washington doctors and hospitals provide some of the a 
highest quality and most cost-efficient care in the nation. However, 
instead of rewarding our State for reining in unnecessary costs and 
improving the health of patients, the current system actually penalizes 
them. Under the current fee-for-service structure we have today, health 
care providers are rewarded for maximizing the number of services they 
provide rather than focusing primarily on health outcomes. This 
provides a financial disincentive to efficient care because such 
efficiencies actually result in decreased payments. My bill addresses 
this issue by linking physician payments to the quality of care they 
provide, not the amount of services they perform. At the same time, the 
bill recognizes the need to allow for the differences in the cost of 
doing business across different regions. The resulting policy creates a 
fair payment system that increases the overall quality of care while 
resulting in a savings of $55 billion a year off the Medicare rolls.
  The backbone of our health care system is comprised of the men and 
women who devote their lives to the practice of medicine. While our 
nation's physician workforce is the best in the world, current policies 
have left our primary care network woefully lacking, leaving many 
families--especially those in rural areas--without access to basic 
care. As few as 2 percent of medical students opt for careers in family 
medicine and general surgery primarily due to the low pay associated 
with such specialties. Therefore, a fundamental goal of reform must be 
expanding the primary care workforce. My legislation includes 
provisions which provide financial incentives for medical students and 
teaching hospitals--such as interest-free loans and scholarships for 
students going into primary care, and increased funding for small and 
rural hospitals to improve their primary care residency programs. The 
bill also calls for increasing payments to primary care physicians 
currently in practice. These policies will result in an improved 
primary care infrastructure throughout the nation, providing for 
quality primary care today and well into the future.
  Finally, we cannot address health care reform without addressing the 
needs the individuals who require it the most: those in long-term care. 
For many older Americans and people with disabilities, long-term care 
is not a luxury but a necessity, a required service needed to maintain 
their overall quality of life. Traditionally this care has been 
provided in institutions such as nursing homes, which can cost upwards 
of $70,000 a year. While some people require the around-the-clock care 
provided in nursing homes, many of those in need of long-term care 
would be better off remaining in their homes where they can continue to 
be active members of the community. Home- and community-based services 
provide people the care they need in non-institutional settings, which, 
in addition to saving a significant amount of money, allows for the 
freedom and independence to which people are accustomed. This 
legislation contains several provisions which provide States with the 
resources they need to move away from institutional long-term care and 
towards home- and community-based

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services, such as increasing Federal Medicaid dollars to transition to 
home- and community-based services, and providing incentives to create 
consolidated information centers so consumers and their families can 
make well-informed decisions about long-term care options. If we gave 
just 5 percent of those who go into nursing homes the ability to 
receive care in their own homes and communities, the Federal Government 
would see a net savings of more than $10 billion over 5 years. This 
significant savings can be achieved while simultaneously providing 
better care; a truly win-win situation.
  In introducing this bill I am reminding my colleagues that reforming 
health care need not be a zero-sum game. We can achieve our goals of 
improving the health care workforce, stabilizing the physician payment 
structure, improving access to needed care and decreasing the financial 
and emotional burdens associated with long-term care while 
simultaneously providing significant savings throughout the health care 
system. I look forward to working with my colleagues in the Senate to 
ensure these crtical reforms are enacted.
  Mr. President, I ask unanimous consent that the text of the bill 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. 1262

       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 ``Medical Efficiency and 
     Delivery Improvement of Care Act (MEDIC) of 2009''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

                    TITLE I--LOAN PROGRAM PROVISIONS

Sec. 1001. Short title.
Sec. 1002. Hospital residency loan program.

                   TITLE II--PRIMARY CARE PROVISIONS

Sec. 2001. Short title.
Sec. 2002. Findings.
Sec. 2003. Definitions.

                     Subtitle A--Medical Education

Sec. 2101. Recruitment incentives.
Sec. 2102. Debt forgiveness, scholarships, and service obligations.
Sec. 2103. Deferment of loans during residency and internships.
Sec. 2104. Educating medical students about primary care careers.
Sec. 2105. Training in family medicine, general internal medicine, 
              general geriatrics, general pediatrics, physician 
              assistant education, general dentistry, and pediatric 
              dentistry.
Sec. 2106. Increased funding for National Health Service Corps 
              Scholarship and loan repayment programs.

                Subtitle B--Medicaid Related Provisions

Sec. 2201. Transformation grants to support patient-centered medical 
              homes under Medicaid and CHIP.

                    Subtitle C--Medicare Provisions

                          PART I--Primary Care

Sec. 2301. Reforming payment systems under Medicare to support primary 
              care.
Sec. 2302. Coverage of patient-centered medical home services.
Sec. 2303. Medicare primary care payment equity and access provision.
Sec. 2304. Additional incentive payment program for primary care 
              services furnished in health professional shortage areas.
Sec. 2305. Permanent extension of Medicare incentive payment program 
              for physician scarcity areas.
Sec. 2306. HHS study and report on the process for determining relative 
              value under the Medicare physician fee schedule.

                      PART II--Preventive Services

Sec. 2311. Eliminating time restriction for initial preventive physical 
              examination.
Sec. 2312. Elimination of cost-sharing for preventive benefits under 
              the Medicare program.
Sec. 2313. HHS study and report on facilitating the receipt of Medicare 
              preventive services by Medicare beneficiaries.

                       PART III--Other Provisions

Sec. 2321. HHS study and report on improving the ability of physicians 
              and primary care providers to assist Medicare 
              beneficiaries in obtaining needed prescriptions under 
              Medicare part D.
Sec. 2322. HHS study and report on improved patient care through 
              increased caregiver and physician interaction.
Sec. 2323. Improved patient care through expanded support for limited 
              English proficiency (LEP) services.
Sec. 2324. HHS study and report on use of real-time Medicare claims 
              adjudication.
Sec. 2325. Ongoing assessment by MedPAC of the impact of medicare 
              payments on primary care access and equity.
Sec. 2326. Distribution of additional residency positions.
Sec. 2327. Counting resident time in outpatient settings.
Sec. 2328. Rules for counting resident time for didactic and scholarly 
              activities and other activities.
Sec. 2329. Preservation of resident cap positions from closed and 
              acquired hospitals.
Sec. 2330. Quality improvement organization assistance for physician 
              practices seeking to be patient-centered medical home 
              practices.

                          Subtitle D--Studies

Sec. 2401. Study concerning the designation of primary care as a 
              shortage profession.
Sec. 2402. Study concerning the education debt of medical school 
              graduates.
Sec. 2403. Study on minority representation in primary care.

                 TITLE III--MEDICARE PAYMENT PROVISIONS

Sec. 3001. Short title.
Sec. 3002. Findings.
Sec. 3003. Value index under the Medicare physician fee schedule.

                TITLE IV--LONG-TERM SERVICES PROVISIONS

Sec. 4001. Short title.

                    Subtitle A--Balancing Incentives

Sec. 4101. Enhanced FMAP for expanding the provision of non-
              institutionally-based long-term services and supports.

 Subtitle B--Strengthening the Medicaid Home and Community-Based State 
                         Plan Amendment Option

Sec. 4201. Removal of barriers to providing home and community-based 
              services under State plan amendment option for 
              individuals in need.
Sec. 4202. Mandatory application of spousal impoverishment protections 
              to recipients of home and community-based services.
Sec. 4203. State authority to elect to exclude up to 6 months of 
              average cost of nursing facility services from assets or 
              resources for purposes of eligibility for home and 
              community-based services.

      Subtitle C--Coordination of Home and Community-Based Waivers

Sec. 4301. Streamlined process for combined waivers under subsections 
              (b) and (c) of section 1915 .

         TITLE V--HOME AND COMMUNITY-BASED SERVICES PROVISIONS

Sec. 5001. Short title.
Sec. 5002. Long-term services and supports.

                    TITLE I--LOAN PROGRAM PROVISIONS

     SEC. 1001. SHORT TITLE.

       This title may be cited as the ``Physician Workforce 
     Enhancement Act of 2009''.

     SEC. 1002. HOSPITAL RESIDENCY LOAN PROGRAM.

       Subpart 2 of part E of title VII of the Public Health 
     Service Act is amended by adding at the end the following new 
     section:

     ``SEC. 771. HOSPITAL RESIDENCY LOAN PROGRAM.

       ``(a) Establishment.--Not later than January 1, 2010, the 
     Secretary, acting through the Administrator of the Health 
     Resources and Services Administration, shall establish a loan 
     program that provides loans to eligible hospitals to 
     establish residency training programs.
       ``(b) Application.---No loan may be provided under this 
     section to an eligible hospital except pursuant to an 
     application that is submitted and approved in a time, manner, 
     and form specified by the Administrator of the Health 
     Resources and Services Administration. A loan under this 
     section shall be on such terms and conditions and meet such 
     requirements as the Administrator determines appropriate, in 
     accordance with the provisions of this section.
       ``(c) Eligibility; Preference for Rural and Small Urban 
     Areas.--
       ``(1) Eligible hospital defined.--For purposes of this 
     section, an `eligible hospital' means, with respect to a loan 
     under this section, a hospital that, as of the date of the 
     submission of an application under subsection (b), meets, to 
     the satisfaction of the Administrator of the Health Resources 
     and Services Administration, each of the following criteria:
       ``(A) The hospital does not operate a residency training 
     program, has not previously operated such a program, and has 
     not taken any significant action, such as the expenditure of 
     a material amount of funds, before July 1, 2009, to establish 
     such a program.
       ``(B) The hospital has secured initial accreditation by the 
     American Council for Graduate Medical Education or the 
     American Osteopathic Association.
       ``(C) The hospital provides assurances to the satisfaction 
     of the Administrator of the Health Resources and Services 
     Administration that such loan shall be used, consistent

[[Page S6591]]

     with subsection (d), only for the purposes of establishing 
     and conducting an allopathic or osteopathic physician 
     residency training program in at least one of the following 
     medical specialties, or a combination of the following:
       ``(i) Family medicine.
       ``(ii) Internal medicine.
       ``(iii) Emergency medicine.
       ``(iv) Obstetrics or gynecology.
       ``(v) General surgery.
       ``(vi) Preventive Medicine.
       ``(vii) Pediatrics.
       ``(viii) Behavioral and Mental Health.
       ``(D) The hospital enters into an agreement with the 
     Administrator that certifies the hospital will provide for 
     the repayment of the loan in accordance with subsection (e).
       ``(2) Preference for rural and small areas.--In making 
     loans under this section, the Administrator of the Health 
     Resources and Services Administration shall give preference 
     to any applicant for such a loan that is a hospital located 
     in a rural areas (as such term is defined in section 
     1886(d)(2)(D) of the Social Security Act) or an urban area 
     that is not a large urban area (as such terms are 
     respectively defined in such section).
       ``(d) Permissible Uses of Loan Funds.--A loan provided 
     under this section shall be used, with respect to a residency 
     training program, only for costs directly attributable to the 
     residency training program, except as otherwise provided by 
     the Administrator of the Health Resources and Services 
     Administration.
       ``(e) Repayment of Loans.--
       ``(1) Repayment plans.--For purposes of subsection 
     (c)(1)(D), a repayment plan for an eligible hospital is in 
     accordance with this subsection if it provides for the 
     repayment of the loan amount in installments, in accordance 
     with a schedule that is agreed to by the Administrator of the 
     Health Resources and Services Administration and the hospital 
     and that is in accordance with this subsection.
       ``(2) Commencement of repayment.--Repayment by an eligible 
     hospital of a loan under this section shall commence not 
     later than the date that is 18 months after the date on which 
     the loan amount is disbursed to such hospital.
       ``(3) Repayment period.--A loan made under this section 
     shall be fully repaid not later than the date that is 24 
     months after the date on which the repayment is required to 
     commence.
       ``(4) Loan payable in full if residency training program 
     canceled.--In the case that an eligible hospital borrows a 
     loan under this section, with respect to a residency training 
     program, and terminates such program before the date on which 
     such loan has been fully repaid in accordance with a plan 
     under paragraph (1), such loan shall be payable by the 
     hospital not later than 45 days after the date of such 
     termination.
       ``(f) No Interest Charged.--The Administrator of the Health 
     Resources and Services Administration may not charge or 
     collect interest on any loan made under this section.
       ``(g) Limitation on Total Amount of Loan.--The cumulative 
     dollar amount of a loan made to an eligible hospital under 
     this section may not exceed $1,000,000.
       ``(h) Penalties.--The Administrator of the Health Resources 
     and Services Administration shall establish penalties to 
     which an eligible hospital receiving a loan under this 
     section would be subject if such hospital is in violation of 
     any of the criteria described in subsection (c)(1).
       ``(i) Reports.--Not later than January 1, 2014, and 
     annually thereafter (before January 2, 2020), the 
     Administrator of the Health Resources and Services 
     Administration shall submit to Congress a report on the 
     efficacy of the program under this section in increasing the 
     number of residents practicing in each medical specialty 
     described in subsection (c)(1)(C) during such year and the 
     extent to which the program resulted in an increase in the 
     number of available practitioners in each of such medical 
     specialties that serve medically underserved populations.
       ``(j) Funding.----
       ``(1) Authorization of appropriations.--For the purpose of 
     providing amounts for loans under this section, there are 
     authorized to be appropriated $25,000,000 for the period of 
     fiscal years 2010 through 2020.
       ``(2) Availability.--Amounts appropriated under paragraph 
     (1) shall remain available until expended.
       ``(3) Repaid loan amounts.--Any amount repaid by, or 
     recovered from, an eligible hospital under this section on or 
     before the date of termination described in subsection (k) 
     shall be credited to the appropriation account from which the 
     loan amount involved was originally paid. Any amount repaid 
     by, or recovered from, such a hospital under this section 
     after such date shall be credited to the general fund in the 
     Treasury.
       ``(k) Termination of Program.--No loan may be made under 
     this section after December 31, 2019.''.

                   TITLE II--PRIMARY CARE PROVISIONS

     SEC. 2001. SHORT TITLE.

       This title may be cited as the ``Preserving Patient Access 
     to Primary Care Act of 2009''.

     SEC. 2002. FINDINGS.

       Congress makes the following findings:
       (1) Approximately 21 percent of physicians who were board 
     certified in general internal medicine during the early 1990s 
     have left internal medicine, compared to a 5 percent 
     departure rate for those who were certified in subspecialties 
     of internal medicine.
       (2) The number of United States medical graduates going 
     into family medicine has fallen by more than 50 percent from 
     1997 to 2005.
       (3) In 2007, only 88 percent of the available medicine 
     residency positions were filled and only 42 percent of those 
     were filled by United States medical school graduates.
       (4) In 2006, only 24 percent of third-year internal 
     medicine resident intended to pursue careers in general 
     internal medicine, down from 54 percent in 1998.
       (5) Primary care physicians serve as the point of first 
     contact for most patients and are able to coordinate the care 
     of the whole person, reducing unnecessary care and 
     duplicative testing.
       (6) Primary care physicians and primary care providers 
     practicing preventive care, including screening for illness 
     and treating diseases, can help prevent complications that 
     result in more costly care.
       (7) Patients with primary care physicians or primary care 
     providers have lower health care expenditures and primary 
     care is correlated with better health status, lower overall 
     mortality, and longer life expectancy.
       (8) Higher proportions of primary care physicians are 
     associated with significantly reduced utilization.
       (9) The United States has a higher ratio of specialists to 
     primary care physicians than other industrialized nations and 
     the population of the United States is growing faster than 
     the expected rate of growth in the supply of primary care 
     physicians.
       (10) The number of Americans age 65 and older, those 
     eligible for Medicare and who use far more ambulatory care 
     visits per person as those under age 65, is expected to 
     double from 2000 to 2030.
       (11) A decrease in Federal spending to carry out programs 
     authorized by title VII of the Public Health Service Act 
     threatens the viability of one of the programs used to solve 
     the problem of inadequate access to primary care.
       (12) The National Health Service Corps program has a proven 
     record of supplying physicians to underserved areas, and has 
     played an important role in expanding access for underserved 
     populations in rural and inner city communities.
       (13) Individuals in many geographic areas, especially rural 
     areas, lack adequate access to high quality preventive, 
     primary health care, contributing to significant health 
     disparities that impair America's public health and economic 
     productivity.
       (14) About 20 percent of the population of the United 
     States resides in primary medical care Health Professional 
     Shortage Areas.

     SEC. 2003. DEFINITIONS.

       (a) General Definitions.--In this title:
       (1) Chronic care coordination.--The term ``chronic care 
     coordination'' means the coordination of services that is 
     based on the Chronic Care Model that provides on-going health 
     care to patients with chronic diseases that may include any 
     of the following services:
       (A) The development of an initial plan of care, and 
     subsequent appropriate revisions to such plan of care.
       (B) The management of, and referral for, medical and other 
     health services, including interdisciplinary care conferences 
     and management with other providers.
       (C) The monitoring and management of medications.
       (D) Patient education and counseling services.
       (E) Family caregiver education and counseling services.
       (F) Self-management services, including health education 
     and risk appraisal to identify behavioral risk factors 
     through self-assessment.
       (G) Providing access by telephone with physicians and other 
     appropriate health care professionals, including 24-hour 
     availability of such professionals for emergencies.
       (H) Management with the principal nonprofessional caregiver 
     in the home.
       (I) Managing and facilitating transitions among health care 
     professionals and across settings of care, including the 
     following:
       (i) Pursuing the treatment option elected by the 
     individual.
       (ii) Including any advance directive executed by the 
     individual in the medical file of the individual.
       (J) Information about, and referral to, hospice care, 
     including patient and family caregiver education and 
     counseling about hospice care, and facilitating transition to 
     hospice care when elected.
       (K) Information about, referral to, and management with, 
     community services.
       (2) Critical shortage health facility.--The term ``critical 
     shortage health facility'' means a public or private 
     nonprofit health facility that does not serve a health 
     professional shortage area (as designated under section 332 
     of the Public Health Service Act), but that has a critical 
     shortage of physicians (as determined by the Secretary) in a 
     primary care field.
       (3) Physician.--The term physician has the meaning given 
     such term in section 1861(r)(1) of the Social Security Act.
       (4) Primary care.--The term ``primary care'' means the 
     provision of integrated, high-quality, accessible health care 
     services by health care providers who are accountable for 
     addressing a full range of personal health and health care 
     needs, developing a sustained partnership with patients, 
     practicing in the context of family and community, and 
     working to minimize disparities across population subgroups.

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       (5) Primary care field.--The term ``primary care field'' 
     means any of the following fields:
       (A) The field of family medicine.
       (B) The field of general internal medicine.
       (C) The field of geriatric medicine.
       (D) The field of pediatric medicine
       (6) Primary care physician.--The term ``primary care 
     physician'' means a physician who is trained in a primary 
     care field who provides first contact, continuous, and 
     comprehensive care to patients.
       (7) Primary care provider.--The term ``primary care 
     provider'' means--
       (A) a nurse practitioner; or
       (B) a physician assistant practicing as a member of a 
     physician-directed team;
     who provides first contact, continuous, and comprehensive 
     care to patients.
       (8) Principal care.--The term ``principal care'' means 
     integrated, accessible health care that is provided by a 
     physician who is a medical subspecialist that addresses the 
     majority of the personal health care needs of patients with 
     chronic conditions requiring the subspecialist's expertise, 
     and for whom the subspecialist assumes care management, 
     developing a sustained physician-patient partnership and 
     practicing within the context of family and community.
       (9) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (b) Primary Medical Care Shortage Area.--
       (1) In general.--In this title, the term ``primary medical 
     care shortage area'' or ``PMCSA'' means a geographic area 
     with a shortage of physicians (as designated by the 
     Secretary) in a primary care field, as designated in 
     accordance with paragraph (2).
       (2) Designation.--To be designated by the Secretary as a 
     PMCSA, the Secretary must find that the geographic area 
     involved has an established shortage of primary care 
     physicians for the population served. The Secretary shall 
     make such a designation with respect to an urban or rural 
     geographic area if the following criteria are met:
       (A) The area is a rational area for the delivery of primary 
     care services.
       (B) One of the following conditions prevails within the 
     area:
       (i) The area has a population to full-time-equivalent 
     primary care physician ratio of at least 3,500 to 1.
       (ii) The area has a population to full-time-equivalent 
     primary care physician ratio of less than 3,500 to 1 and has 
     unusually high needs for primary care services or 
     insufficient capacity of existing primary care providers.
       (C) Primary care providers in contiguous geographic areas 
     are overutilized.
       (c) Medically Underserved Area.--
       (1) In general.--In this title, the term ``medically 
     underserved area'' or ``MUA'' means a rational service area 
     with a demonstrable shortage of primary healthcare resources 
     relative to the needs of the entire population within the 
     service area as determined in accordance with paragraph (2) 
     through the use of the Index of Medical Underservice 
     (referred to in this subsection as the ``IMU'') with respect 
     to data on a service area.
       (2) Determinations.--Under criteria to be established by 
     the Secretary with respect to the IMU, if a service area is 
     determined by the Secretary to have a score of 62.0 or less, 
     such area shall be eligible to be designated as a MUA.
       (3) IMU variables.--In establishing criteria under 
     paragraph (2), the Secretary shall ensure that the following 
     variables are utilized:
       (A) The ratio of primary medical care physicians per 1,000 
     individuals in the population of the area involved.
       (B) The infant mortality rate in the area involved.
       (C) The percentage of the population involved with incomes 
     below the poverty level.
       (D) The percentage of the population involved age 65 or 
     over.
     The value of each of such variables for the service area 
     involved shall be converted by the Secretary to a weighted 
     value, according to established criteria, and added together 
     to obtain the area's IMU score.
       (d) Patient-Centered Medical Home.--
       (1) In general.--In this title, the term ``patient-centered 
     medical home'' means a physician-directed practice (or a 
     nurse practitioner directed practice in those States in which 
     such functions are included in the scope of practice of 
     licensed nurse practitioners) that has been certified by an 
     organization under paragraph (3) as meeting the following 
     standards:
       (A) The practice provides patients who elect to obtain care 
     through a patient-centered medical home (referred to as 
     ``participating patients'') with direct and ongoing access to 
     a primary or principal care physician or a primary care 
     provider who accepts responsibility for providing first 
     contact, continuous, and comprehensive care to the whole 
     person, in collaboration with teams of other health 
     professionals, including nurses and specialist physicians, as 
     needed and appropriate.
       (B) The practice applies standards for access to care and 
     communication with participating beneficiaries.
       (C) The practice has readily accessible, clinically useful 
     information on participating patients that enables the 
     practice to treat such patients comprehensively and 
     systematically.
       (D) The practice maintains continuous relationships with 
     participating patients by implementing evidence-based 
     guidelines and applying such guidelines to the identified 
     needs of individual beneficiaries over time and with the 
     intensity needed by such beneficiaries.
       (2) Recognition of ncqa approval.--Such term also includes 
     a physician-directed (or nurse-practitioner-directed) 
     practice that has been recognized as a medical home through 
     the Physician Practice Connections--patient-centered Medical 
     Home (``PPC-PCMH'') voluntary recognition process of the 
     National Committee for Quality Assurance.
       (3) Standard setting and qualification process for medical 
     homes.--The Secretary shall establish a process for the 
     selection of a qualified standard setting and certification 
     organization--
       (A) to establish standards, consistent with this 
     subsection, to enable medical practices to qualify as 
     patient-centered medical homes; and
       (B) to provide for the review and certification of medical 
     practices as meeting such standards.
       (4) Treatment of certain practices.--Nothing in this 
     section shall be construed as preventing a nurse practitioner 
     from leading a patient-centered medical home so long as--
       (A) all of the requirements of this section are met; and
       (B) the nurse practitioner is acting consistently with 
     State law.
       (e) Application Under Medicare, Medicaid, PHSA, etc.--
     Unless otherwise provided, the provisions of the previous 
     subsections shall apply for purposes of provisions of the 
     Social Security Act, the Public Health Service Act, and any 
     other Act amended by this title.

                     Subtitle A--Medical Education

     SEC. 2101. RECRUITMENT INCENTIVES.

       Title VII of the Higher Education Act of 1965 (20 U.S.C. 
     1133 et seq.) is amended by adding at the end the following:

          ``PART VI--MEDICAL EDUCATION RECRUITMENT INCENTIVES

     ``SEC. 786. MEDICAL EDUCATION RECRUITMENT INCENTIVES.

       ``(a) In General.--The Secretary is authorized to award 
     grants or contracts to institutions of higher education that 
     are graduate medical schools, to enable the graduate medical 
     schools to improve primary care education and training for 
     medical students.
       ``(b) Application.--A graduate medical school that desires 
     to receive a grant under this section shall submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary may require.
       ``(c) Uses of Funds.--A graduate medical school that 
     receives a grant under this section shall use such grant 
     funds to carry out 1 or more of the following:
       ``(1) The creation of primary care mentorship programs.
       ``(2) Curriculum development for population-based primary 
     care models of care, such as the patient-centered medical 
     home.
       ``(3) Increased opportunities for ambulatory, community-
     based training.
       ``(4) Development of generalist curriculum to enhance care 
     for rural and underserved populations in primary care or 
     general surgery.
       ``(d) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $50,000,000 for 
     each of the fiscal years 2010 through 2012.''.

     SEC. 2102. DEBT FORGIVENESS, SCHOLARSHIPS, AND SERVICE 
                   OBLIGATIONS.

       (a) Purpose.--It is the purpose of this section to 
     encourage individuals to enter and continue in primary care 
     physician careers.
       (b) Amendment to the Public Health Service Act.--Part D of 
     title III of the Public Health Service Act (42 U.S.C. 254b et 
     seq.) is amended by adding at the end the following:

              ``Subpart XX--Primary Care Medical Education

     ``SEC. 340A. SCHOLARSHIPS.

       ``(a) In General.--The Secretary, acting through the 
     Administrator of the Health Resources and Services 
     Administration, shall award grants to critical shortage 
     health facilities to enable such facilities to provide 
     scholarships to individuals who agree to serve as physicians 
     at such facilities after completing a residency in a primary 
     care field (as defined in section 3(a)(5) of the Preserving 
     Patient Access to Primary Care Act of 2009).
       ``(b) Scholarships.--A health facility shall use amounts 
     received under a grant under this section to enter into 
     contracts with eligible individuals under which--
       ``(1) the facility agrees to provide the individual with a 
     scholarship for each school year (not to exceed 4 school 
     years) in which the individual is enrolled as a full-time 
     student in a school of medicine or a school of osteopathic 
     medicine; and
       ``(2) the individual agrees--
       ``(A) to maintain an acceptable level of academic standing;
       ``(B) to complete a residency in a primary care field; and
       ``(C) after completing the residency, to serve as a primary 
     care physician at such facility in such field for a time 
     period equal to the greater of--
       ``(i) one year for each school year for which the 
     individual was provided a scholarship under this section; or

[[Page S6593]]

       ``(ii) two years.
       ``(c) Amount.--
       ``(1) In general.--The amount paid by a health facility to 
     an individual under a scholarship under this section shall 
     not exceed $35,000 for any school year.
       ``(2) Considerations.--In determining the amount of a 
     scholarship to be provided to an individual under this 
     section, a health facility may take into consideration the 
     individual's financial need, geographic differences, and 
     educational costs.
       ``(3) Exclusion from gross income.--For purposes of the 
     Internal Revenue Code of 1986, gross income shall not include 
     any amount received as a scholarship under this section.
       ``(d) Application of Certain Provisions.--The provisions of 
     subpart III of part D shall, except as inconsistent with this 
     section, apply to the program established in subsection (a) 
     in the same manner and to the same extent as such provisions 
     apply to the National Health Service Corps Scholarship 
     Program established in such subpart.
       ``(e) Definitions.--In this section:
       ``(1) Critical shortage health facility.--The term 
     `critical shortage health facility' means a public or private 
     nonprofit health facility that does not serve a health 
     professional shortage area (as designated under section 332), 
     but has a critical shortage of physicians (as determined by 
     the Secretary) in a primary care field.
       ``(2) Eligible individual.--The term `eligible individual' 
     means an individual who is enrolled, or accepted for 
     enrollment, as a full-time student in an accredited school of 
     medicine or school of osteopathic medicine.

     ``SEC. 340B. LOAN REPAYMENT PROGRAM.

       ``(a) Purpose.--It is the purpose of this section to 
     alleviate critical shortages of primary care physicians and 
     primary care providers.
       ``(b) Loan Repayments.--The Secretary, acting through the 
     Administrator of the Health Resources and Services 
     Administration, shall establish a program of entering into 
     contracts with eligible individuals under which--
       ``(1) the individual agrees to serve--
       ``(A) as a primary care physician or primary care provider 
     in a primary care field; and
       ``(B) in an area that is not a health professional shortage 
     area (as designated under section 332), but has a critical 
     shortage of primary care physicians and primary care 
     providers (as determined by the Secretary) in such field; and
       ``(2) the Secretary agrees to pay, for each year of such 
     service, not more than $35,000 of the principal and interest 
     of the undergraduate or graduate educational loans of the 
     individual.
       ``(c) Service Requirement.--A contract entered into under 
     this section shall allow the individual receiving the loan 
     repayment to satisfy the service requirement described in 
     subsection (a)(1) through employment in a solo or group 
     practice, a clinic, a public or private nonprofit hospital, 
     or any other appropriate health care entity.
       ``(d) Application of Certain Provisions.--The provisions of 
     subpart III of part D shall, except as inconsistent with this 
     section, apply to the program established in subsection (a) 
     in the same manner and to the same extent as such provisions 
     apply to the National Health Service Corps Scholarship 
     Program established in such subpart.
       ``(e) Definition.--In this section, the term `eligible 
     individual' means--
       ``(1) an individual with a degree in medicine or 
     osteopathic medicine; or
       ``(2) a primary care provider (as defined in section 
     3(a)(7) of the Preserving Patient Access to Primary Care Act 
     of 2009).

     ``SEC. 340C. LOAN REPAYMENTS FOR PHYSICIANS IN THE FIELDS OF 
                   OBSTETRICS AND GYNECOLOGY AND CERTIFIED NURSE 
                   MIDWIVES.

       ``(a) Purpose.--It is the purpose of this section to 
     alleviate critical shortages of physicians in the fields of 
     obstetrics and gynecology and certified nurse midwives.
       ``(b) Loan Repayments.--The Secretary, acting through the 
     Administrator of the Health Resources and Services 
     Administration, shall establish a program of entering into 
     contracts with eligible individuals under which--
       ``(1) the individual agrees to serve--
       ``(A) as a physician in the field of obstetrics and 
     gynecology or as a certified nurse midwife; and
       ``(B) in an area that is not a health professional shortage 
     area (as designated under section 332), but has a critical 
     shortage of physicians in the fields of obstetrics and 
     gynecology or certified nurse midwives (as determined by the 
     Secretary), respectively; and
       ``(2) the Secretary agrees to pay, for each year of such 
     service, not more than $35,000 of the principal and interest 
     of the undergraduate or graduate educational loans of the 
     individual.
       ``(c) Service Requirement.--A contract entered into under 
     this section shall allow the individual receiving the loan 
     repayment to satisfy the service requirement described in 
     subsection (a)(1) through employment in a solo or group 
     practice, a clinic, a public or private nonprofit hospital, 
     or any other appropriate health care entity.
       ``(d) Application of Certain Provisions.--The provisions of 
     subpart III of part D shall, except as inconsistent with this 
     section, apply to the program established in subsection (a) 
     in the same manner and to the same extent as such provisions 
     apply to the National Health Service Corps Scholarship 
     Program established in such subpart.
       ``(e) Definition.--In this section, the term `eligible 
     individual' means--
       ``(1) a physician in the field of obstetrics and 
     gynecology; or
       ``(2) a certified nurse midwife.

     ``SEC. 340D. REPORTS.

       ``Not later than 18 months after the date of enactment of 
     this section, and annually thereafter, the Secretary shall 
     submit to Congress a report that describes the programs 
     carried out under this subpart, including statements 
     concerning--
       ``(1) the number of enrollees, scholarships, loan 
     repayments, and grant recipients;
       ``(2) the number of graduates;
       ``(3) the amount of scholarship payments and loan 
     repayments made;
       ``(4) which educational institution the recipients 
     attended;
       ``(5) the number and placement location of the scholarship 
     and loan repayment recipients at health care facilities with 
     a critical shortage of primary care physicians;
       ``(6) the default rate and actions required;
       ``(7) the amount of outstanding default funds of both the 
     scholarship and loan repayment programs;
       ``(8) to the extent that it can be determined, the reason 
     for the default;
       ``(9) the demographics of the individuals participating in 
     the scholarship and loan repayment programs;
       ``(10) the justification for the allocation of funds 
     between the scholarship and loan repayment programs; and
       ``(11) an evaluation of the overall costs and benefits of 
     the programs.

     ``SEC. 340E. AUTHORIZATION OF APPROPRIATIONS.

       ``To carry out sections 340I, 340J, and 340K there are 
     authorized to be appropriated $55,000,000 for fiscal year 
     2010, $90,000,000 for fiscal year 2011, and $125,000,000 for 
     fiscal year 2012, to be used solely for scholarships and loan 
     repayment awards for primary care physicians and primary care 
     providers.''.

     SEC. 2103. DEFERMENT OF LOANS DURING RESIDENCY AND 
                   INTERNSHIPS.

       (a) Loan Requirements.--Section 427(a)(2)(C)(i) of the 
     Higher Education Act of 1965 (20 U.S.C. 1077(a)(2)(C)(i)) is 
     amended by inserting ``unless the medical internship or 
     residency program is in a primary care field (as defined in 
     section 3(a)(5) of the Preserving Patient Access to Primary 
     Care Act of 2009)'' after ``residency program''.
       (b) FFEL Loans.--Section 428(b)(1)(M)(i) of the Higher 
     Education Act of 1965 (20 U.S.C. 1078(b)(1)(M)(i)) is amended 
     by inserting ``unless the medical internship or residency 
     program is in a primary care field (as defined in section 
     3(a)(5) of the Preserving Patient Access to Primary Care Act 
     of 2009)'' after ``residency program''.
       (c) Federal Direct Loans.--Section 455(f)(2)(A) of the 
     Higher Education Act of 1965 (20 U.S.C. 1087e(f)(2)(A)) is 
     amended by inserting ``unless the medical internship or 
     residency program is in a primary care field (as defined in 
     section 3(a)(5) of the Preserving Patient Access to Primary 
     Care Act of 2009)'' after ``residency program''.
       (d) Federal Perkins Loans.--Section 464(c)(2)(A)(i) of the 
     Higher Education Act of 1965 (20 U.S.C. 1087dd(c)(2)(A)(i)) 
     is amended by inserting ``unless the medical internship or 
     residency program is in a primary care field (as defined in 
     section 3(a)(5) of the Preserving Patient Access to Primary 
     Care Act of 2009)'' after ``residency program''.

     SEC. 2104. EDUCATING MEDICAL STUDENTS ABOUT PRIMARY CARE 
                   CAREERS.

       Part C of title VII of the Public Health Service Act (42 
     U.S.C. 293k) is amended by adding at the end the following:

     ``SEC. 749. EDUCATING MEDICAL STUDENTS ABOUT PRIMARY CARE 
                   CAREERS.

       ``(a) In General.--The Secretary shall award grants to 
     eligible State and local government entities for the 
     development of informational materials that promote careers 
     in primary care by highlighting the advantages and rewards of 
     primary care, and that encourage medical students, 
     particularly students from disadvantaged backgrounds, to 
     become primary care physicians.
       ``(b) Announcement.--The grants described in subsection (a) 
     shall be announced through a publication in the Federal 
     Register and through appropriate media outlets in a manner 
     intended to reach medical education institutions, 
     associations, physician groups, and others who communicate 
     with medical students.
       ``(c) Eligibility.--To be eligible to receive a grant under 
     this section an entity shall--
       ``(1) be a State or local entity; and
       ``(2) submit to the Secretary an application at such time, 
     in such manner, and containing such information as the 
     Secretary may require.
       ``(d) Use of Funds.--
       ``(1) In general.--An entity shall use amounts received 
     under a grant under this section to support State and local 
     campaigns through appropriate media outlets to promote 
     careers in primary care and to encourage individuals from 
     disadvantaged backgrounds to enter and pursue careers in 
     primary care.
       ``(2) Specific uses.--In carrying out activities under 
     paragraph (1), an entity shall use grants funds to develop 
     informational materials in a manner intended to reach as wide 
     and diverse an audience of medical students as possible, in 
     order to--
       ``(A) advertise and promote careers in primary care;
       ``(B) promote primary care medical education programs;

[[Page S6594]]

       ``(C) inform the public of financial assistance regarding 
     such education programs;
       ``(D) highlight individuals in the community who are 
     practicing primary care physicians; or
       ``(E) provide any other information to recruit individuals 
     for careers in primary care.
       ``(e) Limitation.--An entity shall not use amounts received 
     under a grant under this section to advertise particular 
     employment opportunities.
       ``(f) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, such sums as 
     may be necessary for each of fiscal years 2010 through 
     2013.''.

     SEC. 2105. TRAINING IN FAMILY MEDICINE, GENERAL INTERNAL 
                   MEDICINE, GENERAL GERIATRICS, GENERAL 
                   PEDIATRICS, PHYSICIAN ASSISTANT EDUCATION, 
                   GENERAL DENTISTRY, AND PEDIATRIC DENTISTRY.

       Section 747(e) of the Public Health Service Act (42 U.S.C. 
     293k) is amended by striking paragraph (1) and inserting the 
     following:
       ``(1) Authorization of appropriations.--For the purpose of 
     carrying out this section, there is authorized to be 
     appropriated $198,000,000 for each of fiscal years 2010 
     through 2012.''.

     SEC. 2106. INCREASED FUNDING FOR NATIONAL HEALTH SERVICE 
                   CORPS SCHOLARSHIP AND LOAN REPAYMENT PROGRAMS.

       (a) In General.--There is authorized to be appropriated 
     $332,000,000 for the period of fiscal years 2010 through 2012 
     for the purpose of carrying out subpart III of part D of 
     title III of the Public Health Service Act (42 U.S.C. 254l et 
     seq.). Such authorization of appropriations is in addition to 
     the authorization of appropriations in section 338H of such 
     Act (42 U.S.C. 254q) and any other authorization of 
     appropriations for such purpose.
       (b) Allocation.--Of the amounts appropriated under 
     subsection (a) for the period of fiscal years 2010 through 
     2012, the Secretary shall obligate $96,000,000 for the 
     purpose of providing contracts for scholarships and loan 
     repayments to individuals who--
       (1) are primary care physicians or primary care providers; 
     and
       (2) have not previously received a scholarship or loan 
     repayment under subpart III of part D of title III of the 
     Public Health Service Act (42 U.S.C. 254l et seq.).

                Subtitle B--Medicaid Related Provisions

     SEC. 2201. TRANSFORMATION GRANTS TO SUPPORT PATIENT-CENTERED 
                   MEDICAL HOMES UNDER MEDICAID AND CHIP.

       (a) In General.--Section 1903(z) of the Social Security Act 
     (42 U.S.C. 1396b(z)) is amended--
       (1) in paragraph (2), by adding at the end the following 
     new subparagraph:
       ``(G) Methods for improving the effectiveness and 
     efficiency of medical assistance provided under this title 
     and child health assistance provided under title XXI by 
     encouraging the adoption of medical practices that satisfy 
     the standards established by the Secretary under paragraph 
     (2) of section 3(d) of the Preserving Patient Access to 
     Primary Care Act of 2009 for medical practices to qualify as 
     patient-centered medical homes (as defined in paragraph (1) 
     of such section).''; and
       (2) in paragraph (4)--
       (A) in subparagraph (A)--
       (i) in clause (i), by striking ``and'' at the end;
       (ii) in clause (ii), by striking the period at the end and 
     inserting ``; and''; and
       (iii) by inserting after clause (ii), the following new 
     clause:
       ``(iii) $25,000,000 for each of fiscal years 2010, 2011, 
     and 2012.''; and
       (B) in subparagraph (B), by striking the second and third 
     sentences and inserting the following: ``Such method shall 
     provide that 100 percent of such funds for each of fiscal 
     years 2010, 2011, and 2012 shall be allocated among States 
     that design programs to adopt the innovative methods 
     described in paragraph (2)(G), with preference given to 
     States that design programs involving multipayers (including 
     under title XVIII and private health plans) test projects for 
     implementation of the elements necessary to be recognized as 
     a patient-centered medical home practice under the National 
     Committee for Quality Assurance Physicians Practice 
     Connection-PCMH module (or any other equivalent process, as 
     determined by the Secretary).''.
       (b) Effective Date.--The amendments made by this section 
     take effect on October 1, 2010.

                    Subtitle C--Medicare Provisions

                          PART I--PRIMARY CARE

     SEC. 2301. REFORMING PAYMENT SYSTEMS UNDER MEDICARE TO 
                   SUPPORT PRIMARY CARE.

       (a) Increasing Budget Neutrality Limits Under the Physician 
     Fee Schedule To Account for Anticipated Savings Resulting 
     From Payments for Certain Services and the Coordination of 
     Beneficiary Care.--Section 1848(c)(2)(B) of the Social 
     Security Act (42 U.S.C. 1395w-4(c)(2)(B)) is amended--
       (1) in clause (ii)(II), by striking ``(iv) and (v)'' and 
     inserting ``(iv), (v), and (vii)''; and
       (2) by adding at the end the following new clause:
       ``(vii) Increase in limitation to account for certain 
     anticipated savings.--

       ``(I) In general.--Effective for fee schedules established 
     beginning with 2010, the Secretary shall increase the 
     limitation on annual adjustments under clause (ii)(II) by an 
     amount equal to the anticipated savings under parts A, B, and 
     D (including any savings with respect to items and services 
     for which payment is not made under this section) which are a 
     result of payments for designated primary care services and 
     comprehensive care coordination services under section 
     1834(m) and the coverage of patient-centered medical home 
     services under section 1861(s)(2)(FF) (as determined by the 
     Secretary).
       ``(II) Mechanism to determine application of increase.--The 
     Secretary shall establish a mechanism for determining which 
     relative value units established under this paragraph for 
     physicians' services shall be subject to an adjustment under 
     clause (ii)(I) as a result of the increase under subclause 
     (I).
       ``(III) Additional funding as determined necessary by the 
     secretary.--In addition to any funding that may be made 
     available as a result of an increase in the limitation on 
     annual adjustments under subclause (I), there shall also be 
     available to the Secretary, for purposes of making payments 
     under this title for new services and capabilities to improve 
     care provided to individuals under this title and to generate 
     efficiencies under this title, such additional funds as the 
     Secretary determines are necessary.''.

       (b) Separate Medicare Payment for Designated Primary Care 
     Services and Comprehensive Care Coordination Services.--
       (1) In general.--Section 1834 of the Social Security Act 
     (42 U.S.C. 1395m) is amended by adding at the end the 
     following new subsection:
       ``(n) Payment for Designated Primary Care Services and 
     Comprehensive Care Coordination Services.--
       ``(1) In general.--The Secretary shall pay for designated 
     primary care services and comprehensive care coordination 
     services furnished to an individual enrolled under this part.
       ``(2) Payment amount.--The Secretary shall determine the 
     amount of payment for designated primary care services and 
     comprehensive care coordination services under this 
     subsection.
       ``(3) Documentation requirements.--The Secretary shall 
     propose appropriate documentation requirements to justify 
     payments for designated primary care services and 
     comprehensive care coordination services under this 
     subsection.
       ``(4) Definitions.--
       ``(A) Comprehensive care coordination services.--The term 
     `comprehensive care coordination services' means care 
     coordination services with procedure codes established by the 
     Secretary (as appropriate) which are furnished to an 
     individual enrolled under this part by a primary care 
     provider or principal care physician.
       ``(B) Designated primary care services.--The term 
     `designated primary care service' means a service which the 
     Secretary determines has a procedure code which involves a 
     clinical interaction with an individual enrolled under this 
     part that is inherent to care coordination, including 
     interactions outside of a face-to-face encounter. Such term 
     includes the following:
       ``(i) Care plan oversight.
       ``(ii) Evaluation and management provided by phone.
       ``(iii) Evaluation and management provided using internet 
     resources.
       ``(iv) Collection and review of physiologic data, such as 
     from a remote monitoring device.
       ``(v) Education and training for patient self management.
       ``(vi) Anticoagulation management services.
       ``(vii) Any other service determined appropriate by the 
     Secretary.''.
       (2) Effective date.--The amendment made by this section 
     shall apply to items and services furnished on or after 
     January 1, 2010.

     SEC. 2302. COVERAGE OF PATIENT-CENTERED MEDICAL HOME 
                   SERVICES.

       (a) In General.--Section 1861(s)(2) of the Social Security 
     Act (42 U.S.C. 1395x(s)(2)) is amended--
       (1) in subparagraph (DD), by striking ``and'' at the end;
       (2) in subparagraph (EE), by inserting ``and'' at the end; 
     and
       (3) by adding at the end the following new subparagraph:
       ``(FF) patient-centered medical home services (as defined 
     in subsection (hhh)(1));''.
       (b) Definition of Patient-Centered Medical Home Services.--
     Section 1861 of the Social Security Act (42 U.S.C. 1395x) is 
     amended by adding at the end the following new subsection:

                ``Patient-Centered Medical Home Services

       ``(hhh)(1) The term `patient-centered medical home 
     services' means care coordination services furnished by a 
     qualified patient-centered medical home.
       ``(2) The term `qualified patient-centered medical home' 
     means a patient-centered medical home (as defined in section 
     3(d) of the Preserving Patient Access to Primary Care Act of 
     2009).''.
       (c) Monthly Fee for Patient-Centered Medical Home 
     Services.--Section 1848 of the Social Security Act (42 U.S.C. 
     1395w-4) is amended by adding at the end the following new 
     subsection:
       ``(p) Monthly Fee for Patient-Centered Medical Home 
     Services.--
       ``(1) Monthly fee.--
       ``(A) In general.--Not later than January 1, 2012, the 
     Secretary shall establish a payment methodology for patient-
     centered medical home services (as defined in paragraph (1) 
     of section 1861(hhh)). Under such payment

[[Page S6595]]

     methodology, the Secretary shall pay qualified patient-
     centered medical homes (as defined in paragraph (2) of such 
     section) a monthly fee for each individual who elects to 
     receive patient-centered medical home services at that 
     medical home. Such fee shall be paid on a prospective basis.
       ``(B) Considerations.--The Secretary shall take into 
     account the results of the Medicare medical home 
     demonstration project under section 204 of the Medicare 
     Improvement and Extension Act of 2006 (42 U.S.C. 1395b-1 
     note; division B of Public Law 109-432) in establishing the 
     payment methodology under subparagraph (A).
       ``(2) Amount of payment.--
       ``(A) Considerations.--In determining the amount of such 
     fee, subject to paragraph (3), the Secretary shall consider 
     the following:
       ``(i) The clinical work and practice expenses involved in 
     providing care coordination services consistent with the 
     patient-centered medical home model (such as providing 
     increased access, care coordination, disease population 
     management, and education) for which payment is not made 
     under this section as of the date of enactment of this 
     subsection.
       ``(ii) Ensuring that the amount of payment is sufficient to 
     support the acquisition, use, and maintenance of clinical 
     information systems which--

       ``(I) are needed by a qualified patient-centered medical 
     home; and
       ``(II) have been shown to facilitate improved outcomes 
     through care coordination.

       ``(iii) The establishment of a tiered monthly care 
     management fee that provides for a range of payment depending 
     on how advanced the capabilities of a qualified patient-
     centered medical home are in having the information systems 
     needed to support care coordination.
       ``(B) Risk-adjustment.--The Secretary shall use appropriate 
     risk-adjustment in determining the amount of the monthly fee 
     under this paragraph.
       ``(3) Funding.--
       ``(A) In general.--The Secretary shall determine the 
     aggregate estimated savings for a calendar year as a result 
     of the implementation of this subsection on reducing 
     preventable hospital admissions, duplicate testing, 
     medication errors and drug interactions, and other savings 
     under this part and part A (including any savings with 
     respect to items and services for which payment is not made 
     under this section).
       ``(B) Funding.--Subject to subparagraph (C), the aggregate 
     amount available for payment of the monthly fee under this 
     subsection during a calendar year shall be equal to the 
     aggregate estimated savings (as determined under subparagraph 
     (A)) for the calendar year (as determined by the Secretary).
       ``(C) Additional funding.--In the case where the amount of 
     the aggregate actual savings during the preceding 3 years 
     exceeds the amount of the aggregate estimated savings (as 
     determined under subparagraph (A)) during such period, the 
     aggregate amount available for payment of the monthly fee 
     under this subsection during the calendar year (as determined 
     under subparagraph (B)) shall be increased by the amount of 
     such excess.
       ``(D) Additional funding as determined necessary by the 
     secretary.--In addition to any funding made available under 
     subparagraphs (B) and (C), there shall also be available to 
     the Secretary, for purposes of effectively implementing this 
     subsection, such additional funds as the Secretary determines 
     are necessary.
       ``(4) Performance-based bonus payments.--The Secretary 
     shall establish a process for paying a performance-based 
     bonus to qualified patient-centered medical homes which meet 
     or achieve substantial improvements in performance (as 
     specified under clinical, patient satisfaction, and 
     efficiency benchmarks established by the Secretary). Such 
     bonus shall be in an amount determined appropriate by the 
     Secretary.
       ``(5) No effect on payments for evaluation and management 
     services.--The monthly fee under this subsection shall have 
     no effect on the amount of payment for evaluation and 
     management services under this title.''.
       (d) Coinsurance.--Section 1833(a)(1) of the Social Security 
     Act (42 U.S.C. 1395l(a)(1)) is amended--
       (1) by striking ``and'' before ``(W)''; and
       (2) by inserting before the semicolon at the end the 
     following: ``, and (X) with respect to patient-centered 
     medical home services (as defined in section 1861(hhh)(1)), 
     the amount paid shall be (i) in the case of such services 
     which are physicians' services, the amount determined under 
     subparagraph (N), and (ii) in the case of all other such 
     services, 80 percent of the lesser of the actual charge for 
     the service or the amount determined under a fee schedule 
     established by the Secretary for purposes of this 
     subparagraph''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after January 1, 
     2012.

     SEC. 2303. MEDICARE PRIMARY CARE PAYMENT EQUITY AND ACCESS 
                   PROVISION.

       (a) In General.--Section 1848 of the Social Security Act 
     (42 U.S.C. 1395w-4), as amended by section 2302(c), is 
     amended by adding at the end the following new subsection:
       ``(q) Primary Care Payment Equity and Access.--
       ``(1) In general.--Not later than January 1, 2010, the 
     Secretary shall develop a methodology, in consultation with 
     primary care physician organizations and primary care 
     provider organizations, the Medicare Payment Advisory 
     Commission, and other experts, to increase payments under 
     this section for designated evaluation and management 
     services provided by primary care physicians, primary care 
     providers, and principal care providers through 1 or more of 
     the following:
       ``(A) A service-specific modifier to the relative value 
     units established for such services.
       ``(B) Service-specific bonus payments.
       ``(C) Any other methodology determined appropriate by the 
     Secretary.
       ``(2) Inclusion of proposed criteria.--The methodology 
     developed under paragraph (1) shall include proposed criteria 
     for providers to qualify for such increased payments, 
     including consideration of--
       ``(A) the type of service being rendered;
       ``(B) the specialty of the provider providing the service; 
     and
       ``(C) demonstration by the provider of voluntary 
     participation in programs to improve quality, such as 
     participation in the Physician Quality Reporting Initiative 
     (as determined by the Secretary) or practice-level 
     qualification as a patient-centered medical home.
       ``(3) Funding.--
       ``(A) Determination.--The Secretary shall determine the 
     aggregate estimated savings for a calendar year as a result 
     of such increased payments on reducing preventable hospital 
     admissions, duplicate testing, medication errors and drug 
     interactions, Intensive Care Unit admissions, per capita 
     health care expenditures, and other savings under this part 
     and part A (including any savings with respect to items and 
     services for which payment is not made under this section).
       ``(B) Funding.--The aggregate amount available for such 
     increased payments during a calendar year shall be equal to 
     the aggregate estimated savings (as determined under 
     subparagraph (A)) for the calendar year (as determined by the 
     Secretary).
       ``(C) Additional funding as determined necessary by the 
     secretary.--In addition to any funding made available under 
     subparagraph (B), there shall also be available to the 
     Secretary, for purposes of effectively implementing this 
     subsection, such additional funds as the Secretary determines 
     are necessary.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to services furnished on or after January 1, 
     2010.

     SEC. 2304. ADDITIONAL INCENTIVE PAYMENT PROGRAM FOR PRIMARY 
                   CARE SERVICES FURNISHED IN HEALTH PROFESSIONAL 
                   SHORTAGE AREAS.

       (a) In General.--Section 1833 of the Social Security Act 
     (42 U.S.C. 1395l) is amended by adding at the end the 
     following new subsection:
       ``(x) Additional Incentive Payments for Primary Care 
     Services Furnished in Health Professional Shortage Areas.--
       ``(1) In general.--In the case of primary care services 
     furnished on or after January 1, 2010, by a primary care 
     physician or primary care provider in an area that is 
     designated (under section 332(a)(1)(A) of the Public Health 
     Service Act) as a health professional shortage area as 
     identified by the Secretary prior to the beginning of the 
     year involved, in addition to the amount of payment that 
     would otherwise be made for such services under this part, 
     there also shall be paid (on a monthly or quarterly basis) an 
     amount equal to 10 percent of the payment amount for the 
     service under this part.
       ``(2) Definitions.--In this subsection:
       ``(A) Primary care physician; primary care provider.--The 
     terms `primary care physician' and `primary care provider' 
     have the meaning given such terms in paragraphs (6) and (7), 
     respectively, of section 3(a) of the Preserving Patient 
     Access to Primary Care Act of 2009.
       ``(B) Primary care services.--The term `primary care 
     services' means procedure codes for services in the category 
     of the Healthcare Common Procedure Coding System, as 
     established by the Secretary under section 1848(c)(5) (as of 
     December 31, 2008 and as subsequently modified by the 
     Secretary) consisting of evaluation and management services, 
     but limited to such procedure codes in the category of office 
     or other outpatient services, and consisting of subcategories 
     of such procedure codes for services for both new and 
     established patients.
       ``(3) Judicial review.--There shall be no administrative or 
     judicial review under section 1869, 1878, or otherwise, 
     respecting the identification of primary care physicians, 
     primary care providers, or primary care services under this 
     subsection.''.
       (b) Conforming Amendment.--Section 1834(g)(2)(B) of the 
     Social Security Act (42 U.S.C. 1395m(g)(2)(B)) is amended by 
     adding at the end the following sentence: ``Section 1833(x) 
     shall not be taken into account in determining the amounts 
     that would otherwise be paid pursuant to the preceding 
     sentence.''.

     SEC. 2305. PERMANENT EXTENSION OF MEDICARE INCENTIVE PAYMENT 
                   PROGRAM FOR PHYSICIAN SCARCITY AREAS.

       Section 1833(u) of the Social Security Act (42 U.S.C. 
     1395l(u)) is amended--
       (1) in paragraph (1)--
       (A) by inserting ``or on or after July 1, 2009'' after 
     ``before July 1, 2008''; and
       (B) by inserting ``(or, in the case of services furnished 
     on or after July 1, 2009, 10 percent)'' after ``5 percent''; 
     and
       (2) in paragraph (4)(D), by striking ``before July 1, 
     2008'' and inserting ``before January 1, 2010''.

[[Page S6596]]

     SEC. 2306. HHS STUDY AND REPORT ON THE PROCESS FOR 
                   DETERMINING RELATIVE VALUE UNDER THE MEDICARE 
                   PHYSICIAN FEE SCHEDULE.

       (a) Study.--The Secretary shall conduct a study on the 
     process used by the Secretary for determining relative value 
     under the Medicare physician fee schedule under section 
     1848(c) of the Social Security Act (42 U.S.C. 1395w-4(c)). 
     Such study shall include an analysis of the following:
       (1)(A) Whether the existing process includes equitable 
     representation of primary care physicians (as defined in 
     section 2003(a)(6)); and
       (B) any changes that may be necessary to ensure such 
     equitable representation.
       (2)(A) Whether the existing process provides the Secretary 
     with expert and impartial input from physicians in medical 
     specialties that provide primary care to patients with 
     multiple chronic diseases, the fastest growing part of the 
     Medicare population; and
       (B) any changes that may be necessary to ensure such input.
       (3)(A) Whether the existing process includes equitable 
     representation of physician medical specialties in proportion 
     to their relative contributions toward caring for Medicare 
     beneficiaries, as determined by the percentage of Medicare 
     billings per specialty, percentage of Medicare encounters by 
     specialty, or such other measures of relative contributions 
     to patient care as determined by the Secretary; and
       (B) any changes that may be necessary to reflect such 
     equitable representation.
       (4)(A) Whether the existing process, including the 
     application of budget neutrality rules, unfairly 
     disadvantages primary care physicians, primary care 
     providers, or other physicians who principally provide 
     evaluation and management services; and
       (B) any changes that may be necessary to eliminate such 
     disadvantages.
       (b) Report.--Not later than 12 months after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report containing the results of the study conducted under 
     subsection (a), together with recommendations for such 
     legislation and administrative action as the Secretary 
     determines appropriate.

                      PART II--PREVENTIVE SERVICES

     SEC. 2311. ELIMINATING TIME RESTRICTION FOR INITIAL 
                   PREVENTIVE PHYSICAL EXAMINATION.

       (a) In General.--Section 1862(a)(1)(K) of the Social 
     Security Act (42 U.S.C. 1395y(a)(1)(K)) is amended by 
     striking ``more than'' and all that follows before the comma 
     at the end and inserting ``more than one time during the 
     lifetime of the individual''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after January 1, 
     2010.

     SEC. 2312. ELIMINATION OF COST-SHARING FOR PREVENTIVE 
                   BENEFITS UNDER THE MEDICARE PROGRAM.

       (a) Definition of Preventive Services.--Section 1861(ddd) 
     of the Social Security Act (42 U.S.C. 1395w(dd)) is amended--
       (1) in the heading, by inserting ``; Preventive Services'' 
     after ``Services'';
       (2) in paragraph (1), by striking ``not otherwise described 
     in this title'' and inserting ``not described in 
     subparagraphs (A) through (N) of paragraph (3)''; and
       (3) by adding at the end the following new paragraph:
       ``(3) The term `preventive services' means the following:
       ``(A) Prostate cancer screening tests (as defined in 
     subsection (oo)).
       ``(B) Colorectal cancer screening tests (as defined in 
     subsection (pp)).
       ``(C) Diabetes outpatient self-management training services 
     (as defined in subsection (qq)).
       ``(D) Screening for glaucoma for certain individuals (as 
     described in subsection (s)(2)(U)).
       ``(E) Medical nutrition therapy services for certain 
     individuals (as described in subsection (s)(2)(V)).
       ``(F) An initial preventive physical examination (as 
     defined in subsection (ww)).
       ``(G) Cardiovascular screening blood tests (as defined in 
     subsection (xx)(1)).
       ``(H) Diabetes screening tests (as defined in subsection 
     (yy)).
       ``(I) Ultrasound screening for abdominal aortic aneurysm 
     for certain individuals (as described in subsection 
     (s)(2)(AA)).
       ``(J) Pneumococcal and influenza vaccine and their 
     administration (as described in subsection (s)(10)(A)).
       ``(K) Hepatitis B vaccine and its administration for 
     certain individuals (as described in subsection (s)(10)(B)).
       ``(L) Screening mammography (as defined in subsection 
     (jj)).
       ``(M) Screening pap smear and screening pelvic exam (as 
     described in subsection (s)(14)).
       ``(N) Bone mass measurement (as defined in subsection 
     (rr)).
       ``(O) Additional preventive services (as determined under 
     paragraph (1)).''.
       (b) Coinsurance.--
       (1) General application.--
       (A) In general.--Section 1833(a)(1) of the Social Security 
     Act (42 U.S.C. 1395l(a)(1)), as amended by section 2302, is 
     amended--
       (i) in subparagraph (T), by striking ``80 percent'' and 
     inserting ``100 percent'';
       (ii) in subparagraph (W), by striking ``80 percent'' and 
     inserting ``100 percent'';
       (iii) by striking ``and'' before ``(X)''; and
       (iv) by inserting before the semicolon at the end the 
     following: ``, and (Y) with respect to preventive services 
     described in subparagraphs (A) through (O) of section 
     1861(ddd)(3), the amount paid shall be 100 percent of the 
     lesser of the actual charge for the services or the amount 
     determined under the fee schedule that applies to such 
     services under this part''.
       (2) Elimination of coinsurance for screening 
     sigmoidoscopies and colonoscopies.--Section 1834(d) of the 
     Social Security Act (42 U.S.C. 1395m(d)) is amended--
       (A) in paragraph (2)--
       (i) in subparagraph (A), by inserting ``, except that 
     payment for such tests under such section shall be 100 
     percent of the payment determined under such section for such 
     tests'' before the period at the end; and
       (ii) in subparagraph (C)--

       (I) by striking clause (ii); and
       (II) in clause (i)--

       (aa) by striking ``(i) In general.--Notwithstanding'' and 
     inserting ``Notwithstanding'';
       (bb) by redesignating subclauses (I) and (II) as clauses 
     (i) and (ii), respectively, and moving such clauses 2 ems to 
     the left; and
       (cc) in the flush matter following clause (ii), as so 
     redesignated, by inserting ``100 percent of'' after ``based 
     on''; and
       (B) in paragraph (3)--
       (i) in subparagraph (A), by inserting ``, except that 
     payment for such tests under such section shall be 100 
     percent of the payment determined under such section for such 
     tests'' before the period at the end; and
       (ii) in subparagraph (C)--

       (I) by striking clause (ii); and
       (II) in clause (i)--

       (aa) by striking ``(i) In general.--Notwithstanding'' and 
     inserting ``Notwithstanding''; and
       (bb) by inserting ``100 percent of'' after ``based on''.
       (3) Elimination of coinsurance in outpatient hospital 
     settings.--
       (A) Exclusion from opd fee schedule.--Section 
     1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 
     1395l(t)(1)(B)(iv)) is amended by striking ``and diagnostic 
     mammography'' and inserting ``, diagnostic mammography, and 
     preventive services (as defined in section 1861(ddd)(3))''.
       (B) Conforming amendments.--Section 1833(a)(2) of the 
     Social Security Act (42 U.S.C. 1395l(a)(2)) is amended--
       (i) in subparagraph (F), by striking ``and'' after the 
     semicolon at the end;
       (ii) in subparagraph (G)(ii), by adding ``and'' at the end; 
     and
       (iii) by adding at the end the following new subparagraph:
       ``(H) with respect to preventive services (as defined in 
     section 1861(ddd)(3)) furnished by an outpatient department 
     of a hospital, the amount determined under paragraph (1)(W) 
     or (1)(X), as applicable;''.
       (c) Waiver of Application of Deductible.--The first 
     sentence of section 1833(b) of the Social Security Act (42 
     U.S.C. 1395l(b)) is amended--
       (1) in clause (1), by striking ``items and services 
     described in section 1861(s)(10)(A)'' and inserting 
     ``preventive services (as defined in section 1861(ddd)(3))'';
       (2) by inserting ``and'' before ``(4)''; and
       (3) by striking ``, (5)'' and all that follows up to the 
     period at the end.

     SEC. 2313. HHS STUDY AND REPORT ON FACILITATING THE RECEIPT 
                   OF MEDICARE PREVENTIVE SERVICES BY MEDICARE 
                   BENEFICIARIES.

       (a) Study.--The Secretary, in consultation with provider 
     organizations and other appropriate stakeholders, shall 
     conduct a study on--
       (1) ways to assist primary care physicians and primary care 
     providers (as defined in section 2003(a)) in--
       (A) furnishing appropriate preventive services (as defined 
     in section 1861(ddd)(3) of the Social Security Act, as added 
     by section 2312) to individuals enrolled under part B of 
     title XVIII of such Act; and
       (B) referring such individuals for other items and services 
     furnished by other physicians and health care providers; and
       (2) the advisability and feasability of making additional 
     payments under the Medicare program to physicians and primary 
     care providers for--
       (A) the work involved in ensuring that such individuals 
     receive appropriate preventive services furnished by other 
     physicians and health care providers; and
       (B) incorporating the resulting clinical information into 
     the treatment plan for the individual.
       (b) Report.--Not later than 12 months after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report containing the results of the study conducted under 
     subsection (a), together with recommendations for such 
     legislation and administrative action as the Secretary 
     determines appropriate.

                       PART III--OTHER PROVISIONS

     SEC. 2321. HHS STUDY AND REPORT ON IMPROVING THE ABILITY OF 
                   PHYSICIANS AND PRIMARY CARE PROVIDERS TO ASSIST 
                   MEDICARE BENEFICIARIES IN OBTAINING NEEDED 
                   PRESCRIPTIONS UNDER MEDICARE PART D.

       (a) Study.--The Secretary, in consultation with physician 
     organizations and other appropriate stakeholders, shall 
     conduct a study on the development and implementation of 
     mechanisms to facilitate increased efficiency relating to the 
     role of physicians and primary care providers in Medicare 
     beneficiaries obtaining needed prescription drugs

[[Page S6597]]

     under the Medicare prescription drug program under part D of 
     title XVIII of the Social Security Act. Such study shall 
     include an analysis of ways to--
       (1) improve the accessibility of formulary information;
       (2) streamline the prior authorization, exception, and 
     appeals processes, through, at a minimum, standardizing 
     formats and allowing electronic exchange of information; and
       (3) recognize the work of the physician and primary care 
     provider involved in the prescribing process, especially work 
     that may extend beyond the amount considered to be bundled 
     into payment for evaluation and management services.
       (b) Report.--Not later than 12 months after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report containing the results of the study conducted under 
     subsection (a), together with recommendations for such 
     legislation and administrative action as the Secretary 
     determines appropriate.

     SEC. 2322. HHS STUDY AND REPORT ON IMPROVED PATIENT CARE 
                   THROUGH INCREASED CAREGIVER AND PHYSICIAN 
                   INTERACTION.

       (a) Study.--The Secretary, in consultation with appropriate 
     stakeholders, shall conduct a study on the development and 
     implementation of mechanisms to promote and increase 
     interaction between physicians or primary care providers and 
     the families of Medicare beneficiaries, as well as other 
     caregivers who support such beneficiaries, for the purpose of 
     improving patient care under the Medicare program. Such study 
     shall include an analysis of--
       (1) ways to recognize the work of physicians and primary 
     care providers involved in discussing clinical issues with 
     caregivers that relate to the care of the beneficiary; and
       (2) regulations under the Medicare program that are 
     barriers to interactions between caregivers and physicians or 
     primary care providers and how such regulations should be 
     revised to eliminate such barriers.
       (b) Report.--Not later than 12 months after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report containing the results of the study conducted under 
     subsection (a), together with recommendations for such 
     legislation and administrative action as the Secretary 
     determines appropriate.

     SEC. 2323. IMPROVED PATIENT CARE THROUGH EXPANDED SUPPORT FOR 
                   LIMITED ENGLISH PROFICIENCY (LEP) SERVICES.

       (a) Additional Payments for Primary Care Physicians and 
     Primary Care Providers.--Section 1833 of the Social Security 
     Act (42 U.S.C. 1395l), as amended by section 2304, is amended 
     by adding at the end the following new subsection:
       ``(y) Additional Payments for Providing Services to 
     Individuals With Limited English Proficiency.--
       ``(1) In general.--In the case of primary care providers' 
     services furnished on or after January 1, 2010, to an 
     individual with limited English proficiency by a provider, in 
     addition to the amount of payment that would otherwise be 
     made for such services under this part, there shall also be 
     paid an appropriate amount (as determined by the Secretary) 
     in order to recognize the additional time involved in 
     furnishing the service to such individual.
       ``(2) Judicial review.--There shall be no administrative or 
     judicial review under section 1869, 1878, or otherwise, 
     respecting the determination of the amount of additional 
     payment under this subsection.''.
       (b) National Clearinghouse.--Not later than 180 days after 
     the date of enactment of this Act, the Secretary shall 
     establish a national clearinghouse to make available to the 
     primary care physicians, primary care providers, patients, 
     and States translated documents regarding patient care and 
     education under the Medicare program, the Medicaid program, 
     and the State Children's Health Insurance Program under 
     titles XVIII, XIX, and XXI, respectively, of the Social 
     Security Act.
       (c) Grants To Support Language Translation Services in 
     Underserved Communities.--
       (1) Authority to award grants.--The Secretary shall award 
     grants to support language translation services for primary 
     care physicians and primary care providers in medically 
     underserved areas (as defined in section 2003(c)).
       (2) Authorization of appropriations.--There are authorized 
     to be appropriated to the Secretary to award grants under 
     this subsection, such sums as are necessary for fiscal years 
     beginning with fiscal year 2010.

     SEC. 2324. HHS STUDY AND REPORT ON USE OF REAL-TIME MEDICARE 
                   CLAIMS ADJUDICATION.

       (a) Study.--The Secretary shall conduct a study to assess 
     the ability of the Medicare program under title XVIII of the 
     Social Security Act to engage in real-time claims 
     adjudication for items and services furnished to Medicare 
     beneficiaries.
       (b) Consultation.--In conducting the study under subsection 
     (a), the Secretary consult with stakeholders in the private 
     sector, including stakeholders who are using or are testing 
     real-time claims adjudication systems.
       (c) Report.--Not later than January 1, 2011, the Secretary 
     shall submit to Congress a report containing the results of 
     the study conducted under subsection (a), together with 
     recommendations for such legislation and administrative 
     action as the Secretary determines appropriate.

     SEC. 2325. ONGOING ASSESSMENT BY MEDPAC OF THE IMPACT OF 
                   MEDICARE PAYMENTS ON PRIMARY CARE ACCESS AND 
                   EQUITY.

       The Medicare Payment Advisory Commission, beginning in 2010 
     and in each of its subsequent annual reports to Congress on 
     Medicare physician payment policies, shall provide an 
     assessment of the impact of changes in Medicare payment 
     policies in improving access to and equity of payments to 
     primary care physicians and primary care providers. Such 
     assessment shall include an assessment of the effectiveness, 
     once implemented, of the Medicare payment-related reforms 
     required by this Act to support primary care as well as any 
     other payment changes that may be required by Congress to 
     improve access to and equity of payments to primary care 
     physicians and primary care providers.

     SEC. 2326. DISTRIBUTION OF ADDITIONAL RESIDENCY POSITIONS.

       (a) In General.--Section 1886(h) of the Social Security Act 
     (42 U.S.C. 1395ww(h)) is amended--
       (1) in paragraph (4)(F)(i), by striking ``paragraph (7)'' 
     and inserting ``paragraphs (7) and (8)'';
       (2) in paragraph (4)(H)(i), by striking ``paragraph (7)'' 
     and inserting ``paragraphs (7) and (8)''; and
       (3) by adding at the end the following new paragraph:
       ``(8) Distribution of additional residency positions.--
       ``(A) Additional residency positions.--
       ``(i) Reduction in limit based on unused positions.--

       ``(I) In general.--The Secretary shall reduce the otherwise 
     applicable resident limit for a hospital that the Secretary 
     determines had residency positions that were unused for all 5 
     of the most recent cost reporting periods ending prior to the 
     date of enactment of this paragraph by an amount that is 
     equal to the number of such unused residency positions.
       ``(II) Exception for rural hospitals and certain other 
     hospitals.--This subparagraph shall not apply to a hospital--

       ``(aa) located in a rural area (as defined in subsection 
     (d)(2)(D)(ii));
       ``(bb) that has participated in a voluntary reduction plan 
     under paragraph (6); or
       ``(cc) that has participated in a demonstration project 
     approved as of October 31, 2003, under the authority of 
     section 402 of Public Law 90-248.
       ``(ii) Number available for distribution.--The number of 
     additional residency positions available for distribution 
     under subparagraph (B) shall be an amount that the Secretary 
     determines would result in a 15 percent increase in the 
     aggregate number of full-time equivalent residents in 
     approved medical training programs (as determined based on 
     the most recent cost reports available at the time of 
     distribution). One-third of such number shall only be 
     available for distribution to hospitals described in 
     subclause (I) of subparagraph (B)(ii) under such 
     subparagraph.
       ``(B) Distribution.--
       ``(i) In general.--The Secretary shall increase the 
     otherwise applicable resident limit for each qualifying 
     hospital that submits an application under this subparagraph 
     by such number as the Secretary may approve for portions of 
     cost reporting periods occurring on or after the date of 
     enactment of this paragraph. The aggregate number of 
     increases in the otherwise applicable resident limit under 
     this subparagraph shall be equal to the number of additional 
     residency positions available for distribution under 
     subparagraph (A)(ii).
       ``(ii) Distribution to hospitals already operating over 
     resident limit.--

       ``(I) In general.--Subject to subclause (II), in the case 
     of a hospital in which the reference resident level of the 
     hospital (as defined in clause (ii)) is greater than the 
     otherwise applicable resident limit, the increase in the 
     otherwise applicable resident limit under this subparagraph 
     shall be an amount equal to the product of the total number 
     of additional residency positions available for distribution 
     under subparagraph (A)(ii) and the quotient of--

       ``(aa) the number of resident positions by which the 
     reference resident level of the hospital exceeds the 
     otherwise applicable resident limit for the hospital; and
       ``(bb) the number of resident positions by which the 
     reference resident level of all such hospitals with respect 
     to which an application is approved under this subparagraph 
     exceeds the otherwise applicable resident limit for such 
     hospitals.

       ``(II) Requirements.--A hospital described in subclause 
     (I)--

       ``(aa) is not eligible for an increase in the otherwise 
     applicable resident limit under this subparagraph unless the 
     amount by which the reference resident level of the hospital 
     exceeds the otherwise applicable resident limit is not less 
     than 10 and the hospital trains at least 25 percent of the 
     full-time equivalent residents of the hospital in primary 
     care and general surgery (as of the date of enactment of this 
     paragraph); and
       ``(bb) shall continue to train at least 25 percent of the 
     full-time equivalent residents of the hospital in primary 
     care and general surgery for the 10-year period beginning on 
     such date.

     In the case where the Secretary determines that a hospital no 
     longer meets the requirement of item (bb), the Secretary may 
     reduce the otherwise applicable resident limit of the

[[Page S6598]]

     hospital by the amount by which such limit was increased 
     under this clause.
       ``(III) Clarification regarding eligibility for other 
     additional residency positions.--Nothing in this clause shall 
     be construed as preventing a hospital described in subclause 
     (I) from applying for additional residency positions under 
     this paragraph that are not reserved for distribution under 
     this clause.

       ``(iii) Reference resident level.--

       ``(I) In general.--Except as otherwise provided in 
     subclause (II), the reference resident level specified in 
     this clause for a hospital is the resident level for the most 
     recent cost reporting period of the hospital ending on or 
     before the date of enactment of this paragraph, for which a 
     cost report has been settled (or, if not, submitted (subject 
     to audit)), as determined by the Secretary.
       ``(II) Use of most recent accounting period to recognize 
     expansion of existing program or establishment of new 
     program.--If a hospital submits a timely request to increase 
     its resident level due to an expansion of an existing 
     residency training program or the establishment of a new 
     residency training program that is not reflected on the most 
     recent cost report that has been settled (or, if not, 
     submitted (subject to audit)), after audit and subject to the 
     discretion of the Secretary, the reference resident level for 
     such hospital is the resident level for the cost reporting 
     period that includes the additional residents attributable to 
     such expansion or establishment, as determined by the 
     Secretary.

       ``(C) Considerations in redistribution.--In determining for 
     which hospitals the increase in the otherwise applicable 
     resident limit is provided under subparagraph (B) (other than 
     an increase under subparagraph (B)(ii)), the Secretary shall 
     take into account the demonstrated likelihood of the hospital 
     filling the positions within the first 3 cost reporting 
     periods beginning on or after July 1, 2010, made available 
     under this paragraph, as determined by the Secretary.
       ``(D) Priority for certain areas.--In determining for which 
     hospitals the increase in the otherwise applicable resident 
     limit is provided under subparagraph (B) (other than an 
     increase under subparagraph (B)(ii)), the Secretary shall 
     distribute the increase to hospitals based on the following 
     criteria:
       ``(i) The Secretary shall give preference to hospitals that 
     submit applications for new primary care and general surgery 
     residency positions. In the case of any increase based on 
     such preference, a hospital shall ensure that--

       ``(I) the position made available as a result of such 
     increase remains a primary care or general surgery residency 
     position for not less than 10 years after the date on which 
     the position is filled; and
       ``(II) the total number of primary care and general surgery 
     residency positions in the hospital (determined based on the 
     number of such positions as of the date of such increase, 
     including any position added as a result of such increase) is 
     not decreased during such 10-year period.

     In the case where the Secretary determines that a hospital no 
     longer meets the requirement of subclause (II), the Secretary 
     may reduce the otherwise applicable resident limit of the 
     hospital by the amount by which such limit was increased 
     under this paragraph.
       ``(ii) The Secretary shall give preference to hospitals 
     that emphasizes training in community health centers and 
     other community-based clinical settings.
       ``(iii) The Secretary shall give preference to hospitals in 
     States that have more medical students than residency 
     positions available (including a greater preference for those 
     States with smaller resident-to-medical-student ratios). In 
     determining the number of medical students in a State for 
     purposes of the preceding sentence, the Secretary shall 
     include planned students at medical schools which have 
     provisional accreditation by the Liaison Committee on Medical 
     Education or the American Osteopathic Association.
       ``(iv) The Secretary shall give preference to hospitals in 
     States that have low resident-to-population ratios (including 
     a greater preference for those States with lower resident-to-
     population ratios).
       ``(E) Limitation.--
       ``(i) In general.--Except as provided in clause (ii), in no 
     case may a hospital (other than a hospital described in 
     subparagraph (B)(ii)(I), subject to the limitation under 
     subparagraph (B)(ii)(III)) apply for more than 50 full-time 
     equivalent additional residency positions under this 
     paragraph.
       ``(ii) Increase in number of additional positions available 
     for distribution.--The Secretary shall increase the number of 
     full-time equivalent additional residency positions a 
     hospital may apply for under this paragraph if the Secretary 
     determines that the number of additional residency positions 
     available for distribution under subparagraph (A)(ii) exceeds 
     the number of such applications approved.
       ``(F) Application of per resident amounts for primary care 
     and nonprimary care.--With respect to additional residency 
     positions in a hospital attributable to the increase provided 
     under this paragraph, the approved FTE resident amounts are 
     deemed to be equal to the hospital per resident amounts for 
     primary care and nonprimary care computed under paragraph 
     (2)(D) for that hospital.
       ``(G) Distribution.--The Secretary shall distribute the 
     increase to hospitals under this paragraph not later than 2 
     years after the date of enactment of this paragraph.''.
       (b) IME.--
       (1) In general.--Section 1886(d)(5)(B)(v) of the Social 
     Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second 
     sentence, is amended--
       (A) by striking ``subsection (h)(7)'' and inserting 
     ``subsections (h)(7) and (h)(8)''; and
       (B) by striking ``it applies'' and inserting ``they 
     apply''.
       (2) Conforming provision.--Section 1886(d)(5)(B) of the 
     Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by 
     adding at the end the following clause:
       ``(x) For discharges occurring on or after the date of 
     enactment of this clause, insofar as an additional payment 
     amount under this subparagraph is attributable to resident 
     positions distributed to a hospital under subsection 
     (h)(8)(B), the indirect teaching adjustment factor shall be 
     computed in the same manner as provided under clause (ii) 
     with respect to such resident positions.''.

     SEC. 2327. COUNTING RESIDENT TIME IN OUTPATIENT SETTINGS.

       (a) D-GME.--Section 1886(h)(4)(E) of the Social Security 
     Act (42 U.S.C. 1395ww(h)(4)(E)) is amended--
       (1) by striking ``under an approved medical residency 
     training program''; and
       (2) by striking ``if the hospital incurs all, or 
     substantially all, of the costs for the training program in 
     that setting'' and inserting ``if the hospital continues to 
     incur the costs of the stipends and fringe benefits of the 
     resident during the time the resident spends in that 
     setting''.
       (b) IME.--Section 1886(d)(5)(B)(iv) of the Social Security 
     Act (42 U.S.C. 1395ww(d)(5)(B)(iv)) is amended--
       (1) by striking ``under an approved medical residency 
     training program''; and
       (2) by striking ``if the hospital incurs all, or 
     substantially all, of the costs for the training program in 
     that setting'' and inserting ``if the hospital continues to 
     incur the costs of the stipends and fringe benefits of the 
     intern or resident during the time the intern or resident 
     spends in that setting''.
       (c) Effective Dates; Application.--
       (1) In general.--Effective for cost reporting periods 
     beginning on or after July 1, 2009, the Secretary of Health 
     and Human Services shall implement the amendments made by 
     this section in a manner so as to apply to cost reporting 
     periods beginning on or after July 1, 2009.
       (2) Application.--The amendments made by this section shall 
     not be applied in a manner that requires reopening of any 
     settled hospital cost reports as to which there is not a 
     jurisdictionally proper appeal pending as of the date of the 
     enactment of this Act on the issue of payment for indirect 
     costs of medical education under section 1886(d)(5)(B) of the 
     Social Security (42 U.S.C. 1395ww(d)(5)(B))Act or for direct 
     graduate medical education costs under section 1886(h) of 
     such Act (42 U.S.C. 1395ww(h)).

     SEC. 2328. RULES FOR COUNTING RESIDENT TIME FOR DIDACTIC AND 
                   SCHOLARLY ACTIVITIES AND OTHER ACTIVITIES.

       (a) GME.--Section 1886(h) of the Social Security Act (42 
     U.S.C. 1395ww(h)), as amended by section 2327(a), is 
     amended--
       (1) in paragraph (4)(E)--
       (A) by designating the first sentence as a clause (i) with 
     the heading ``In general'' and appropriate indentation and by 
     striking ``Such rules'' and inserting ``Subject to clause 
     (ii), such rules''; and
       (B) by adding at the end the following new clause:
       ``(ii) Treatment of certain nonhospital and didactic 
     activities.--Such rules shall provide that all time spent by 
     an intern or resident in an approved medical residency 
     training program in a nonhospital setting that is primarily 
     engaged in furnishing patient care (as defined in paragraph 
     (5)(K)) in non-patient care activities, such as didactic 
     conferences and seminars, but not including research not 
     associated with the treatment or diagnosis of a particular 
     patient, as such time and activities are defined by the 
     Secretary, shall be counted toward the determination of full-
     time equivalency.'';
       (2) in paragraph (4), by adding at the end the following 
     new subparagraph:
       ``(I) In determining the hospital's number of full-time 
     equivalent residents for purposes of this subsection, all the 
     time that is spent by an intern or resident in an approved 
     medical residency training program on vacation, sick leave, 
     or other approved leave, as such time is defined by the 
     Secretary, and that does not prolong the total time the 
     resident is participating in the approved program beyond the 
     normal duration of the program shall be counted toward the 
     determination of full-time equivalency.''; and
       (3) in paragraph (5), by adding at the end the following 
     new subparagraph:
       ``(M) Nonhospital setting that is primarily engaged in 
     furnishing patient care.--The term `nonhospital setting that 
     is primarily engaged in furnishing patient care' means a 
     nonhospital setting in which the primary activity is the care 
     and treatment of patients, as defined by the Secretary.''.
       (b) IME Determinations.--Section 1886(d)(5)(B) of such Act 
     (42 U.S.C. 1395ww(d)(5)(B)), as amended by section 2326(b), 
     is amended by adding at the end the following new clause:
       ``(xi)(I) The provisions of subparagraph (I) of subsection 
     (h)(4) shall apply under this subparagraph in the same manner 
     as they apply under such subsection.
       ``(II) In determining the hospital's number of full-time 
     equivalent residents for purposes of this subparagraph, all 
     the time spent by

[[Page S6599]]

     an intern or resident in an approved medical residency 
     training program in non-patient care activities, such as 
     didactic conferences and seminars, as such time and 
     activities are defined by the Secretary, that occurs in the 
     hospital shall be counted toward the determination of full-
     time equivalency if the hospital--
       ``(aa) is recognized as a subsection (d) hospital;
       ``(bb) is recognized as a subsection (d) Puerto Rico 
     hospital;
       ``(cc) is reimbursed under a reimbursement system 
     authorized under section 1814(b)(3); or
       ``(dd) is a provider-based hospital outpatient department.
       ``(III) In determining the hospital's number of full-time 
     equivalent residents for purposes of this subparagraph, all 
     the time spent by an intern or resident in an approved 
     medical residency training program in research activities 
     that are not associated with the treatment or diagnosis of a 
     particular patient, as such time and activities are defined 
     by the Secretary, shall not be counted toward the 
     determination of full-time equivalency.''.
       (c) Effective Dates; Application.--
       (1) In general.--Except as otherwise provided, the 
     Secretary of Health and Human Services shall implement the 
     amendments made by this section in a manner so as to apply to 
     cost reporting periods beginning on or after January 1, 1983.
       (2) Direct gme.--Section 1886(h)(4)(E)(ii) of the Social 
     Security Act, as added by subsection (a)(1)(B), shall apply 
     to cost reporting periods beginning on or after July 1, 2009.
       (3) IME.--Section 1886(d)(5)(B)(xi)(III) of the Social 
     Security Act, as added by subsection (b), shall apply to cost 
     reporting periods beginning on or after October 1, 2001. Such 
     section, as so added, shall not give rise to any inference on 
     how the law in effect prior to such date should be 
     interpreted.
       (4) Application.--The amendments made by this section shall 
     not be applied in a manner that requires reopening of any 
     settled hospital cost reports as to which there is not a 
     jurisdictionally proper appeal pending as of the date of the 
     enactment of this Act on the issue of payment for indirect 
     costs of medical education under section 1886(d)(5)(B) of the 
     Social Security Act or for direct graduate medical education 
     costs under section 1886(h) of such Act.

     SEC. 2329. PRESERVATION OF RESIDENT CAP POSITIONS FROM CLOSED 
                   AND ACQUIRED HOSPITALS.

       (a) GME.--Section 1886(h)(4)(H) of the Social Security Act 
     (42 U.S.C. Section 1395ww(h)(4)(H)) is amended by adding at 
     the end the following new clauses:
       ``(vi) Redistribution of residency slots after a hospital 
     closes.--

       ``(I) In general.--Subject to the succeeding provisions of 
     this clause, the Secretary shall, by regulation, establish a 
     process under which, in the case where a hospital with an 
     approved medical residency program closes on or after the 
     date of enactment of the Balanced Budget Act of 1997, the 
     Secretary shall increase the otherwise applicable resident 
     limit under this paragraph for other hospitals in accordance 
     with this clause.
       ``(II) Priority for hospitals in certain areas.--Subject to 
     the succeeding provisions of this clause, in determining for 
     which hospitals the increase in the otherwise applicable 
     resident limit is provided under such process, the Secretary 
     shall distribute the increase to hospitals located in the 
     following priority order (with preference given within each 
     category to hospitals that are members of the same affiliated 
     group (as defined by the Secretary under clause (ii)) as the 
     closed hospital):

       ``(aa) First, to hospitals located in the same core-based 
     statistical area as, or a core-based statistical area 
     contiguous to, the hospital that closed.
       ``(bb) Second, to hospitals located in the same State as 
     the hospital that closed.
       ``(cc) Third, to hospitals located in the same region of 
     the country as the hospital that closed.
       ``(dd) Fourth, to all other hospitals.

       ``(III) Requirement hospital likely to fill position within 
     certain time period.--The Secretary may only increase the 
     otherwise applicable resident limit of a hospital under such 
     process if the Secretary determines the hospital has 
     demonstrated a likelihood of filling the positions made 
     available under this clause within 3 years.
       ``(IV) Limitation.--The aggregate number of increases in 
     the otherwise applicable resident limits for hospitals under 
     this clause shall be equal to the number of resident 
     positions in the approved medical residency programs that 
     closed on or after the date described in subclause (I).

       ``(vii) Special rule for acquired hospitals.--

       ``(I) In general.--In the case of a hospital that is 
     acquired (through any mechanism) by another entity with the 
     approval of a bankruptcy court, during a period determined by 
     the Secretary (but not less than 3 years), the applicable 
     resident limit of the acquired hospital shall, except as 
     provided in subclause (II), be the applicable resident limit 
     of the hospital that was acquired (as of the date immediately 
     before the acquisition), without regard to whether the 
     acquiring entity accepts assignment of the Medicare provider 
     agreement of the hospital that was acquired, so long as the 
     acquiring entity continues to operate the hospital that was 
     acquired and to furnish services, medical residency programs, 
     and volume of patients similar to the services, medical 
     residency programs, and volume of patients of the hospital 
     that was acquired (as determined by the Secretary) during 
     such period.
       ``(II) Limitation.--Subclause (I) shall only apply in the 
     case where an acquiring entity waives the right as a new 
     provider under the program under this title to have the 
     otherwise applicable resident limit of the acquired hospital 
     re-established or increased.''.

       (b) IME.--Section 1886(d)(5)(B)(v) of the Social Security 
     Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second sentence, 
     as amended by section 2326(b), is amended by striking 
     ``subsections (h)(7) and (h)(8)'' and inserting ``subsections 
     (h)(4)(H)(vi), (h)(4)(H)(vii), (h)(7), and (h)(8)''.
       (c) Application.--The amendments made by this section shall 
     not be applied in a manner that requires reopening of any 
     settled hospital cost reports as to which there is not a 
     jurisdictionally proper appeal pending as of the date of the 
     enactment of this Act on the issue of payment for indirect 
     costs of medical education under section 1886(d)(5)(B) of the 
     Social Security Act (42 U.S.C. 1395ww(d)(5)(B))or for direct 
     graduate medical education costs under section 1886(h) of 
     such Act (42 U.S.C. 1395ww(h)).
       (d) No Affect on Temporary FTE Cap Adjustments.--The 
     amendments made by this section shall not affect any 
     temporary adjustment to a hospital's FTE cap under section 
     413.79(h) of title 42, Code of Federal Regulations (as in 
     effect on the date of enactment of this Act).

     SEC. 2330. QUALITY IMPROVEMENT ORGANIZATION ASSISTANCE FOR 
                   PHYSICIAN PRACTICES SEEKING TO BE PATIENT-
                   CENTERED MEDICAL HOME PRACTICES.

       Not later than 90 days after the date of enactment of this 
     Act, the Secretary of Health and Human Services shall revise 
     the 9th Statement of Work under the Quality Improvement 
     Program under part B of title XI of the Social Security Act 
     to include a requirement that, in order to be an eligible 
     Quality Improvement Organization (in this section referred to 
     as a `QIO') for the 9th Statement of Work contract cycle, a 
     QIO shall provide assistance, including technical assistance, 
     to physicians under the Medicare program under title XVIII of 
     the Social Security Act that seek to acquire the elements 
     necessary to be recognized as a patient-centered medical home 
     practice under the National Committee for Quality Assurance's 
     Physician Practice Connections-PCMH module (or any successor 
     module issued by such Committee).

                          Subtitle D--Studies

     SEC. 2401. STUDY CONCERNING THE DESIGNATION OF PRIMARY CARE 
                   AS A SHORTAGE PROFESSION.

       (a) In General.--Not later than June 30, 2010, the 
     Secretary of Labor shall conduct a study and submit to the 
     Committee on Education and Labor of the House of 
     Representatives and the Committee on Health, Education, 
     Labor, and Pensions a report that contains--
       (1) a description of the criteria for the designation of 
     primary care physicians as professions in shortage as defined 
     by the Secretary under section 212(a)(5)(A) of the 
     Immigration and Nationality Act;
       (2) the findings of the Secretary on whether primary care 
     physician professions will, on the date on which the report 
     is submitted, or within the 5-year period beginning on such 
     date, satisfy the criteria referred to in paragraph (1); and
       (3) if the Secretary finds that such professions will not 
     satisfy such criteria, recommendations for modifications to 
     such criteria to enable primary care physicians to be so 
     designated as a profession in shortage.
       (b) Requirements.--In conducting the study under subsection 
     (a), the Secretary of Labor shall consider workforce data 
     from the Health Resources and Services Administration, the 
     Council on Graduate Medical Education, the Association of 
     American Medical Colleges, and input from physician 
     membership organizations that represent primary care 
     physicians.

     SEC. 2402. STUDY CONCERNING THE EDUCATION DEBT OF MEDICAL 
                   SCHOOL GRADUATES.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study to evaluate the higher education-
     related indebtedness of medical school graduates in the 
     United States at the time of graduation from medical school, 
     and the impact of such indebtedness on specialty choice, 
     including the impact on the field of primary care.
       (b) Report.--
       (1) Submission and dissemination of report.--Not later than 
     1 year after the date of enactment of this Act, the 
     Comptroller General shall submit a report on the study 
     required by subsection (a) to the Committee on Health, 
     Education, Labor, and Pensions of the Senate and the 
     Committee on Education and Labor of the House of 
     Representatives, and shall make such report widely available 
     to the public.
       (2) Additional reports.--The Comptroller General may 
     periodically prepare and release as necessary additional 
     reports on the topic described in subsection (a).

     SEC. 2403. STUDY ON MINORITY REPRESENTATION IN PRIMARY CARE.

       (a) Study.--The Secretary of Health and Human Services, 
     acting through the Administrator of the Health Resources and 
     Services Administration, shall conduct a study of minority 
     representation in training, and in practice, in primary care 
     specialties.

[[Page S6600]]

       (b) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services, acting through the Administrator of the Health 
     Resources and Services Administration, shall submit to the 
     appropriate committees of Congress a report concerning the 
     study conducted under subsection (a), including 
     recommendations for achieving a primary care workforce that 
     is more representative of the population of the United 
     States.

                 TITLE III--MEDICARE PAYMENT PROVISIONS

     SEC. 3001. SHORT TITLE.

       This title may be cited as the ``Medicare Payment 
     Improvement Act of 2009''.

     SEC. 3002. FINDINGS.

       Congress makes the following findings:
       (1) The health care delivery system must be realigned to 
     provide better clinical outcomes, safety, and patient 
     satisfaction at lower cost. This should be a common goal for 
     all health care professionals, hospitals, and other groups. 
     Today's reimbursement system pays the most to those who 
     perform the most services, and therefore can provide 
     disincentives to efficient and high-quality providers.
       (2) The regional inequities in Medicare reimbursement 
     penalize areas that have cost-effective health care delivery 
     systems and reward those States that have high utilization 
     rates and provide inefficient care.
       (3) According to the Dartmouth Health Atlas, over the past 
     10 years, a number of studies have explored the relationship 
     between higher spending and the quality and outcomes of care. 
     The findings are remarkably consistent, concluding that 
     higher spending does not result in better quality of care.
       (4) New payment models should be developed to move away 
     from paying for quantity and instead paying for improving 
     health and truly rewarding effective and efficient care.

     SEC. 3003. VALUE INDEX UNDER THE MEDICARE PHYSICIAN FEE 
                   SCHEDULE.

       (a) In General.--Section 1848(e)(5) of the Social Security 
     Act (42 U.S.C. 1395w-4 (e)) is amended by adding at the end 
     the following new paragraph:
       ``(6) Value index.--
       ``(A) In general.--The Secretary shall determine a value 
     index for each fee schedule area. The value index shall be 
     the ratio of the quality component under subparagraph (B) to 
     the cost component under subparagraph (C) for that fee 
     schedule area.
       ``(B) Quality component.--
       ``(i) In general.--The quality component shall be based on 
     a composite score that reflects quality measures available on 
     a State or fee schedule area basis. The measures shall 
     reflect health outcomes and health status for the Medicare 
     population, patient safety, and patient satisfaction. The 
     Secretary shall use the best data available, after 
     consultation with the Agency for Healthcare Research and 
     Quality and with private entities that compile quality data.
       ``(ii) Advisory group.--

       ``(I) In general.--Not later than 60 days after the date of 
     enactment of the Medicare Payment Improvement Act of 2009, 
     the Secretary shall establish a group of experts and 
     stakeholders to make consensus recommendations to the 
     Secretary regarding development of the quality component. The 
     membership of the advisory group shall at least reflect 
     providers, purchasers, health plans, researchers, relevant 
     Federal agencies, and individuals with technical expertise on 
     health care quality.
       ``(II) Duties.--In the development of recommendations with 
     respect to the quality component, the group established under 
     subclause (I) shall consider at least the following areas:

       ``(aa) High cost procedures as determined by data under 
     this title.
       ``(bb) Health outcomes and functional status of patients.
       ``(cc) The continuity, management, and coordination of 
     health care and care transitions, including episodes of care, 
     for patients across the continuum of providers, health care 
     settings, and health plans.
       ``(dd) Patient, caregiver, and authorized representative 
     experience, quality and relevance of information provided to 
     patients, caregivers, and authorized representatives, and use 
     of information by patients, caregivers, and authorized 
     representatives to inform decision making.
       ``(ee) The safety, effectiveness, and timeliness of care.
       ``(ff) The appropriate use of health care resources and 
     services.
       ``(gg) Other items determined appropriate by the Secretary.
       ``(iii) Requirement.--In establishing the quality component 
     under this subparagraph, the Secretary shall--

       ``(I) take into account the recommendations of the group 
     established under clause (ii)(I); and
       ``(II) provide for an open and transparent process for the 
     activities conducted pursuant to the convening of such group 
     with respect to the development of the quality component.

       ``(iv) Establishment.--The quality component for each fee 
     schedule area shall be the ratio of the quality score for 
     such area to the national average quality score.
       ``(v) Quality baseline.--If the quality component for a fee 
     schedule area does not rank in the top 25th percentile as 
     compared to the national average (as determined by the 
     Secretary) and the amount of reimbursement for services under 
     this section is greater than the amount of reimbursement for 
     such services that would have applied under this section if 
     the amendments made by section 2 of the Medicare Payment 
     Improvement Act of 2009 had not been enacted, this section 
     shall be applied as if such amendments had not been enacted.
       ``(vi) Application.--In the case of a fee schedule area 
     that is less than an entire State, if available quality data 
     is not sufficient to measure quality at the sub-State level, 
     the quality component for a sub-State fee schedule area shall 
     be the quality component for the entire State.
       ``(C) Cost component.--
       ``(i) In general.--The cost component shall be total annual 
     per beneficiary Medicare expenditures under part A and this 
     part for the fee schedule area. The Secretary may use total 
     per beneficiary expenditures under such parts in the last two 
     years of life as an alternative measure if the Secretary 
     determines that such measure better takes into account 
     severity differences among fee schedule areas.
       ``(ii) Establishment.--The cost component for a fee 
     schedule area shall be the ratio of the cost per beneficiary 
     for such area to the national average cost per 
     beneficiary.''.
       (b) Conforming Amendments.--Section 1848 of the Social 
     Security Act (42 U.S.C. 1395w-4) is amended--
       (1) in subsection (b)(1)(C), by striking ``geographic'' and 
     inserting ``geographic and value''; and
       (2) in subsection (e)--
       (A) in paragraph (1)--
       (i) in the heading, by inserting ``and value'' after 
     ``geographic'';
       (ii) in subparagraph (A), by striking clause (iii) and 
     inserting the following new clause:
       ``(iii) a value index (as defined in paragraph (6)) 
     applicable to physician work.'';
       (iii) in subparagraph (C), by inserting ``and value'' after 
     ``geographic'' in the first sentence;
       (iv) in subparagraph (D), by striking ``physician work 
     effort'' and inserting ``value'';
       (v) by striking subparagraph (E); and
       (vi) by striking subparagraph (G);
       (B) by striking paragraph (2) and inserting the following 
     new paragraph:
       ``(2) Computation of geographic and value adjustment 
     factor.--For purposes of subsection (b)(1)(C), for all 
     physicians' services for each fee schedule area the Secretary 
     shall establish a geographic and value adjustment factor 
     equal to the sum of the geographic cost-of-practice 
     adjustment factor (specified in paragraph (3)), the 
     geographic malpractice adjustment factor (specified in 
     paragraph (4)), and the value adjustment factor (specified in 
     paragraph (5)) for the service and the area.''; and
       (C) by striking paragraph (5) and inserting the following 
     new paragraph:
       ``(5) Physician work value adjustment factor.--For purposes 
     of paragraph (2), the `physician work value adjustment 
     factor' for a service for a fee schedule area, is the product 
     of--
       ``(A) the proportion of the total relative value for the 
     service that reflects the relative value units for the work 
     component; and
       ``(B) the value index score for the area, based on the 
     value index established under paragraph (6).''.
       (c) Availability of Quality Component Prior to 
     Implementation.--The Secretary of Health and Human Services 
     shall make the quality component described in section 
     1848(c)(6)(B) of the Social Security Act, as added by 
     subsection (a), for each fee schedule area available to the 
     public by not later than July 1, 2011.
       (d) Effective Date.--Subject to subsection (e), the 
     amendments made by this section shall apply to the Medicare 
     physician fee schedule for 2012 and each subsequent year.
       (e) Transition.--Notwithstanding the amendments made by the 
     preceding provisions of this section, the Secretary of Health 
     and Human Services shall provide for an appropriate 
     transition to the amendments made by this section. Under such 
     transition, in the case of payments under such fee schedule 
     for services furnished during--
       (1) 2012, 25 percent of such payments shall be based on the 
     amount of payment that would have applied to the services if 
     such amendments had not been enacted and 75 percent of such 
     payment shall be based on the amount of payment that would 
     have applied to the services if such amendments had been 
     fully implemented;
       (2) 2013, 50 percent of such payment shall be based on the 
     amount of payment that would have applied to the services if 
     such amendments had not been enacted and 50 percent of such 
     payment shall be based on the amount of payment that would 
     have applied to the services if such amendments had been 
     fully implemented; and
       (3) 2014 and subsequent years, 100 percent of such payment 
     shall be based on the amount of payment that is applicable 
     under such amendments.

                TITLE IV--LONG-TERM SERVICES PROVISIONS

     SEC. 4001. SHORT TITLE.

       This title may be cited as the ``Home and Community 
     Balanced Incentives Act of 2009''.

[[Page S6601]]

                    Subtitle A--Balancing Incentives

     SEC. 4101. ENHANCED FMAP FOR EXPANDING THE PROVISION OF NON-
                   INSTITUTIONALLY-BASED LONG-TERM SERVICES AND 
                   SUPPORTS.

       (a) Enhanced Fmap to Encourage Expansion.--Section 1905 of 
     the Social Security Act (42 U.S.C. 1396d) is amended--
       (1) in the first sentence of subsection (b)--
       (A) by striking ``, and (4)'' and inserting ``, (4)''; and
       (B) by inserting before the period the following: ``, and 
     (5) in the case of a balancing incentive payment State, as 
     defined in subsection (y)(1), that meets the conditions 
     described in subsection (y)(2), the Federal medical 
     assistance percentage shall be increased by the applicable 
     number of percentage points determined under subsection 
     (y)(3) for the State with respect to medical assistance 
     described in subsection (y)(4)''; and
       (2) by adding at the end the following new subsection:
       ``(y) State Balancing Incentive Payments Program.--For 
     purposes of clause (5) of the first sentence of subsection 
     (b):
       ``(1) Balancing incentive payment state.--A balancing 
     incentive payment State is a State--
       ``(A) in which less than 50 percent of the total 
     expenditures for medical assistance for fiscal year 2009 for 
     long-term services and supports (as defined by the Secretary, 
     subject to paragraph (5)) are for non-institutionally-based 
     long-term services and supports described in paragraph 
     (5)(B);
       ``(B) that submits an application and meets the conditions 
     described in paragraph (2); and
       ``(C) that is selected by the Secretary to participate in 
     the State balancing incentive payment program established 
     under this subsection.
       ``(2) Conditions.--The conditions described in this 
     paragraph are the following:
       ``(A) Application.--The State submits an application to the 
     Secretary that includes the following:
       ``(i) A description of the availability of non-
     institutionally-based long-term services and supports 
     described in paragraph (5)(B) available (for fiscal years 
     beginning with fiscal year 2009).
       ``(ii) A description of eligibility requirements for 
     receipt of such services.
       ``(iii) A projection of the number of additional 
     individuals that the State expects to provide with such 
     services to during the 5-fiscal year period that begins with 
     fiscal year 2011.
       ``(iv) An assurance of the State's commitment to a 
     consumer-directed long-term services and supports system that 
     values quality of life in addition to quality of care and in 
     which beneficiaries are empowered to choose providers and 
     direct their own care as much as possible.
       ``(v) A proposed budget that details the State's plan to 
     expand and diversify medical assistance for non-
     institutionally-based long-term services and supports 
     described in paragraph (5)(B) during such 5-fiscal year 
     period, and that includes--

       ``(I) a description of the new or expanded offerings of 
     such services that the State will provide; and
       ``(II) the projected costs of the services identified in 
     subclause (I).

       ``(vi) A description of how the State intends to achieve 
     the target spending percentage applicable to the State under 
     subparagraph (B).
       ``(vii) An assurance that the State will not use Federal 
     funds, revenues described in section 1903(w)(1), or revenues 
     obtained through the imposition of beneficiary cost-sharing 
     for medical assistance for non-institutionally-based long-
     term services and supports described in paragraph (5)(B) for 
     the non-federal share of expenditures for medical assistance 
     described in paragraph (4).
       ``(B) Target spending percentages.--
       ``(i) In the case of a balancing incentive payment State in 
     which less than 25 percent of the total expenditures for home 
     and community-based services under the State plan and the 
     various waiver authorities for fiscal year 2009 are for such 
     services, the target spending percentage for the State to 
     achieve by not later than October 1, 2015, is that 25 percent 
     of the total expenditures for home and community-based 
     services under the State plan and the various waiver 
     authorities are for such services.
       ``(ii) In the case of any other balancing incentive payment 
     State, the target spending percentage for the State to 
     achieve by not later than October 1, 2015, is that 50 percent 
     of the total expenditures for home and community-based 
     services under the State plan and the various waiver 
     authorities are for such services.
       ``(C) Maintenance of eligibility requirements.--The State 
     does not apply eligibility standards, methodologies, or 
     procedures for determining eligibility for medical assistance 
     for non-institutionally-based long-term services and supports 
     described in paragraph (5)(B)) that are more restrictive than 
     the eligibility standards, methodologies, or procedures in 
     effect for such purposes on December 31, 2010.
       ``(D) Use of additional funds.--The State agrees to use the 
     additional Federal funds paid to the State as a result of 
     this subsection only for purposes of providing new or 
     expanded offerings of non-institutionally-based long-term 
     services and supports described in paragraph (5)(B) 
     (including expansion through offering such services to 
     increased numbers of beneficiaries of medical assistance 
     under this title).
       ``(E) Structural changes.--The State agrees to make, not 
     later than the end of the 6-month period that begins on the 
     date the State submits and application under this paragraph, 
     such changes to the administration of the State plan (and, if 
     applicable, to waivers approved for the State that involve 
     the provision of long-term care services and supports) as the 
     Secretary determines, by regulation or otherwise, are 
     essential to achieving an improved balance between the 
     provision of non-institutionally-based long-term services and 
     supports described in paragraph (5)(B) and other long-term 
     services and supports, and which shall include the following:
       ``(i) `No wrong door'--single entry point system.--
     Development of a statewide system to enable consumers to 
     access all long-term services and supports through an agency, 
     organization, coordinated network, or portal, in accordance 
     with such standards as the State shall establish and that--

       ``(I) shall require such agency, organization, network, or 
     portal to provide--

       ``(aa) consumers with information regarding the 
     availability of such services, how to apply for such 
     services, and other referral services; and
       ``(bb) information regarding, and make recommendations for, 
     providers of such services; and

       ``(II) may, at State option, permit such agency, 
     organization, network, or portal to--

       ``(aa) determine financial and functional eligibility for 
     such services and supports; and
       ``(bb) provide or refer eligible individuals to services 
     and supports otherwise available in the community (under 
     programs other than the State program under this title), such 
     as housing, job training, and transportation.
       ``(ii) Presumptive eligibility.--At the option of the 
     State, provision of a 60-day period of presumptive 
     eligibility for medical assistance for non-institutionally-
     based long-term services and supports described in paragraph 
     (5)(B) for any individual whom the State has reason to 
     believe will qualify for such medical assistance (provided 
     that any expenditures for such medical assistance during such 
     period are disregarded for purposes of determining the rate 
     of erroneous excess payments for medical assistance under 
     section 1903(u)(1)(D)).
       ``(iii) Case management.--Development, in accordance with 
     guidance from the Secretary, of conflict-free case management 
     services to--

       ``(I) address transitioning from receipt of 
     institutionally-based long-term services and supports 
     described in paragraph (5)(A) to receipt of non-
     institutionally-based long-term services and supports 
     described in paragraph (5)(B); and
       ``(II) in conjunction with the beneficiary, assess the 
     beneficiary's needs and , if appropriate, the needs of family 
     caregivers for the beneficiary, and develop a service plan, 
     arrange for services and supports, support the beneficiary 
     (and, if appropriate, the caregivers) in directing the 
     provision of services and supports, for the beneficiary, and 
     conduct ongoing monitoring to assure that services and 
     supports are delivered to meet the beneficiary's needs and 
     achieve intended outcomes.

       ``(iv) Core standardized assessment instruments.--
     Development of core standardized assessment instruments for 
     determining eligibility for non-institutionally-based long-
     term services and supports described in paragraph (5)(B), 
     which shall be used in a uniform manner throughout the State, 
     to--

       ``(I) assess a beneficiary's eligibility and functional 
     level in terms of relevant areas that may include medical, 
     cognitive, and behavioral status, as well as daily living 
     skills, and vocational and communication skills;
       ``(II) based on the assessment conducted under subclause 
     (I), determine a beneficiary's needs for training, support 
     services, medical care, transportation, and other services, 
     and develop an individual service plan to address such needs;
       ``(III) conduct ongoing monitoring based on the service 
     plan; and
       ``(IV) require reporting of collect data for purposes of 
     comparison among different service models.

       ``(F) Data collection.--Collecting from providers of 
     services and through such other means as the State determines 
     appropriate the following data:
       ``(i) Services data.--Services data from providers of non-
     institutionally-based long-term services and supports 
     described in paragraph (5)(B) on a per-beneficiary basis and 
     in accordance with such standardized coding procedures as the 
     State shall establish in consultation with the Secretary.
       ``(ii) Quality data.--Quality data on a selected set of 
     core quality measures agreed upon by the Secretary and the 
     State that are linked to population-specific outcomes 
     measures and accessible to providers.
       ``(iii) Outcomes measures.--Outcomes measures data on a 
     selected set of core population-specific outcomes measures 
     agreed upon by the Secretary and the State that are 
     accessible to providers and include--

       ``(I) measures of beneficiary and family caregiver 
     experience with providers;
       ``(II) measures of beneficiary and family caregiver 
     satisfaction with services; and
       ``(III) measures for achieving desired outcomes appropriate 
     to a specific beneficiary, including employment, 
     participation in community life, health stability, and 
     prevention of loss in function.

[[Page S6602]]

       ``(3) Applicable number of percentage points increase in 
     fmap.--The applicable number of percentage points are--
       ``(A) in the case of a balancing incentive payment State 
     subject to the target spending percentage described in 
     paragraph (2)(B)(i), 5 percentage points; and
       ``(B) in the case of any other balancing incentive payment 
     State, 2 percentage points.
       ``(4) Eligible medical assistance expenditures.--
       ``(A) In general.--Subject to subparagraph (B), medical 
     assistance described in this paragraph is medical assistance 
     for non-institutionally-based long-term services and supports 
     described in paragraph (5)(B) that is provided during the 
     period that begins on October 1, 2011, and ends on September 
     30, 2015.
       ``(B) Limitation on payments.--In no case may the aggregate 
     amount of payments made by the Secretary to balancing 
     incentive payment States under this subsection during the 
     period described in subparagraph (A), or to a State to which 
     paragraph (6) of the first sentence of subsection (b) 
     applies, exceed $3,000,000,000.
       ``(5) Long-term services and supports defined.--In this 
     subsection, the term `long-term services and supports' has 
     the meaning given that term by Secretary and shall include 
     the following:
       ``(A) Institutionally-based long-term services and 
     supports.--Services provided in an institution, including the 
     following:
       ``(i) Nursing facility services.
       ``(ii) Services in an intermediate care facility for the 
     mentally retarded described in subsection (a)(15).
       ``(B) Non-institutionally-based long-term services and 
     supports.--Services not provided in an institution, including 
     the following:
       ``(i) Home and community-based services provided under 
     subsection (c), (d), or (i), of section 1915 or under a 
     waiver under section 1115.
       ``(ii) Home health care services.
       ``(iii) Personal care services.
       ``(iv) Services described in subsection (a)(26) (relating 
     to PACE program services).
       ``(v) Self-directed personal assistance services described 
     in section 1915(j)''.
       (b) Enhanced Fmap for Certain States to Maintain the 
     Provision of Home and Community-Based Services.--The first 
     sentence of section 1905(b) of such Act (42 U.S.C. 1396d(b)), 
     as amended by subsection (a), is amended
       (1) by striking ``, and (5)'' and inserting ``, (5)''; and
       (2) by inserting before the period the following: ``, and 
     (6) in the case of a State in which at least 50 percent of 
     the total expenditures for medical assistance for fiscal year 
     2009 for long-term services and supports (as defined by the 
     Secretary for purposes of subsection (y)) are for non-
     institutionally-based long-term services and supports 
     described in subsection (y)(5)(B), and which satisfies the 
     requirements of subparagraphs (A) (other than clauses (iii), 
     (v), and (vi)), (C), and (F) of subsection (y)(2), and has 
     implemented the structural changes described in each clause 
     of subparagraph (E) of that subsection, the Federal medical 
     assistance percentage shall be increased by 1 percentage 
     point with respect to medical assistance described in 
     subparagraph (A) of subsection (y)(4) (but subject to the 
     limitation described in subparagraph (B) of that 
     subsection)''.
       (c) Grants to Support Structural Changes.--
       (1) In general.--The Secretary of Health and Human Services 
     shall award grants to States for the following purposes:
       (A) To support the development of common national set of 
     coding methodologies and databases related to the provision 
     of non-institutionally-based long-term services and supports 
     described in paragraph (5)(B) of section 1905(y) of the 
     Social Security Act (as added by subsection (a)).
       (B) To make structural changes described in paragraph 
     (2)(E) of section 1905(y) to the State Medicaid program.
       (2) Priority.--In awarding grants for the purpose described 
     in paragraph (1)(A), the Secretary of Health and Human 
     Services shall give priority to States in which at least 50 
     percent of the total expenditures for medical assistance 
     under the State Medicaid program for fiscal year 2009 for 
     long-term services and supports, as defined by the Secretary 
     for purposes of section 1905(y) of the Social Security Act, 
     are for non-institutionally-based long-term services and 
     supports described in paragraph (5)(B) of such section.
       (3) Collaboration.--States awarded a grant for the purpose 
     described in paragraph (1)(A) shall collaborate with other 
     States, the National Governor's Association, the National 
     Conference of State Legislatures, the National Association of 
     State Medicaid Directors, the National Association of State 
     Directors of Developmental Disabilities, and other 
     appropriate organizations in developing specifications for a 
     common national set of coding methodologies and databases.
       (4) Authorization of appropriations.--There are authorized 
     to be appropriated to carry out this subsection, such sums as 
     may be necessary for each of fiscal years 2010 through 2012.
       (d) Authority for Individualized Budgets Under Waivers to 
     Provide Home and Community-Based Services.--In the case of 
     any waiver to provide home and community-based services under 
     subsection (c) or (d) of section 1915 of the Social Security 
     Act (42 U.S.C. 1396n) or section 1115 of such Act (42 U.S.C. 
     1315), that is approved or renewed after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services shall permit a State to establish individualized 
     budgets that identify the dollar value of the services and 
     supports to be provided to an individual under the waiver.
       (e) Oversight and Assessment.--
       (1) Development of standardized reporting requirements.--
       (A) Standardization of data and outcome measures.--The 
     Secretary of Health and Human Services shall consult with 
     States and the National Governor's Association, the National 
     Conference of State Legislatures, the National Association of 
     State Medicaid Directors, the National Association of State 
     Directors of Developmental Disabilities, and other 
     appropriate organizations to develop specifications for 
     standardization of--
       (i) reporting of assessment data for long-term services and 
     supports (as defined by the Secretary for purposes of section 
     1905(y)(5) of the Social Security Act) for each population 
     served, including information standardized for purposes of 
     certified EHR technology (as defined in section 1903(t)(3)(A) 
     of the Social Security Act (42 U.S.C. 1396b(t)(3)(A)) and 
     under other electronic medical records initiatives; and
       (ii) outcomes measures that track assessment processes for 
     long-term services and supports (as so defined) for each such 
     population that maintain and enhance individual function, 
     independence, and stability.
       (2) Administration of home and community services.--The 
     Secretary of Health and Human Services shall promulgate 
     regulations to ensure that all States develop service systems 
     that are designed to--
       (A) allocate resources for services in a manner that is 
     responsive to the changing needs and choices of beneficiaries 
     receiving non-institutionally-based long-term services and 
     supports described in paragraph (5)(B) of section 1905(y) of 
     the Social Security Act (as added by subsection (a)) 
     (including such services and supports that are provided under 
     programs other the State Medicaid program), and that provides 
     strategies for beneficiaries receiving such services to 
     maximize their independence;
       (B) provide the support and coordination needed for a 
     beneficiary in need of such services (and their family 
     caregivers or representative, if applicable) to design an 
     individualized, self-directed, community-supported life; and
       (C) improve coordination among all providers of such 
     services under federally and State-funded programs in order 
     to--
       (i) achieve a more consistent administration of policies 
     and procedures across programs in relation to the provision 
     of such services; and
       (ii) oversee and monitor all service system functions to 
     assure--

       (I) coordination of, and effectiveness of, eligibility 
     determinations and individual assessments; and
       (II) development and service monitoring of a complaint 
     system, a management system, a system to qualify and monitor 
     providers, and systems for role-setting and individual budget 
     determinations.

       (3) Monitoring.--The Secretary of Health and Human Services 
     shall assess on an ongoing basis and based on measures 
     specified by the Agency for Healthcare Research and Quality, 
     the safety and quality of non-institutionally-based long-term 
     services and supports described in paragraph (5)(B) of 
     section 1905(y) of that Act provided to beneficiaries of such 
     services and supports and the outcomes with regard to such 
     beneficiaries' experiences with such services. Such oversight 
     shall include examination of--
       (A) the consistency, or lack thereof, of such services in 
     care plans as compared to those services that were actually 
     delivered; and
       (B) the length of time between when a beneficiary was 
     assessed for such services, when the care plan was completed, 
     and when the beneficiary started receiving such services.
       (4) GAO study and report.--The Comptroller General of the 
     United States shall study the longitudinal costs of Medicaid 
     beneficiaries receiving long-term services and supports (as 
     defined by the Secretary for purposes of section 1905(y)(5) 
     of the Social Security Act) over 5-year periods across 
     various programs, including the non-institutionally-based 
     long-term services and supports described in paragraph (5)(B) 
     of such section, PACE program services under section 1894 of 
     the Social Security Act (42 U.S.C. 1395eee, 1396u-4), and 
     services provided under specialized MA plans for special 
     needs individuals under part C of title XVIII of the Social 
     Security Act.

 Subtitle B--Strengthening the Medicaid Home and Community-Based State 
                         Plan Amendment Option

     SEC. 4201. REMOVAL OF BARRIERS TO PROVIDING HOME AND 
                   COMMUNITY-BASED SERVICES UNDER STATE PLAN 
                   AMENDMENT OPTION FOR INDIVIDUALS IN NEED.

       (a) Parity With Income Eligibility Standard for 
     Institutionalized Individuals.--Paragraph (1) of section 
     1915(i) of the Social Security Act (42 U.S.C. 1396n(i)) is 
     amended by striking ``150 percent of the poverty line (as 
     defined in section 2110(c)(5))'' and inserting ``300 percent 
     of the supplemental security income benefit rate established 
     by section 1611(b)(1)''.
       (b) Additional State Options.--Section 1915(i) of the 
     Social Security Act (42 U.S.C. 1396n(i)) is amended by adding 
     at the end the following new paragraphs:

[[Page S6603]]

       ``(6) State option to provide home and community-based 
     services to individuals eligible for services under a 
     waiver.--
       ``(A) In general.--A State that provides home and 
     community-based services in accordance with this subsection 
     to individuals who satisfy the needs-based criteria for the 
     receipt of such services established under paragraph (1)(A) 
     may, in addition to continuing to provide such services to 
     such individuals, elect to provide home and community-based 
     services in accordance with the requirements of this 
     paragraph to individuals who are eligible for home and 
     community-based services under a waiver approved for the 
     State under subsection (c), (d), or (e) or under section 1115 
     to provide such services, but only for those individuals 
     whose income does not exceed 300 percent of the supplemental 
     security income benefit rate established by section 
     1611(b)(1).
       ``(B) Application of same requirements for individuals 
     satisfying needs-based criteria.--Subject to subparagraph 
     (C), a State shall provide home and community-based services 
     to individuals under this paragraph in the same manner and 
     subject to the same requirements as apply under the other 
     paragraphs of this subsection to the provision of home and 
     community-based services to individuals who satisfy the 
     needs-based criteria established under paragraph (1)(A).
       ``(C) Authority to offer different type, amount, duration, 
     or scope of home and community-based services.--A State may 
     offer home and community-based services to individuals under 
     this paragraph that differ in type, amount, duration, or 
     scope from the home and community-based services offered for 
     individuals who satisfy the needs-based criteria established 
     under paragraph (1)(A), so long as such services are within 
     the scope of services described in paragraph (4)(B) of 
     subsection (c) for which the Secretary has the authority to 
     approve a waiver and do not include room or board.
       ``(7) State option to offer home and community-based 
     services to specific, targeted populations.--
       ``(A) In general.--A State may elect in a State plan 
     amendment under this subsection to target the provision of 
     home and community-based services under this subsection to 
     specific populations and to differ the type, amount, 
     duration, or scope of such services to such specific 
     populations.
       ``(B) 5-year term.--
       ``(i) In general.--An election by a State under this 
     paragraph shall be for a period of 5 years.
       ``(ii) Phase-in of services and eligibility permitted 
     during initial 5-year period.--A State making an election 
     under this paragraph may, during the first 5-year period for 
     which the election is made, phase-in the enrollment of 
     eligible individuals, or the provision of services to such 
     individuals, or both, so long as all eligible individuals in 
     the State for such services are enrolled, and all such 
     services are provided, before the end of the initial 5-year 
     period.
       ``(C) Renewal.--An election by a State under this paragraph 
     may be renewed for additional 5-year terms if the Secretary 
     determines, prior to beginning of each such renewal period, 
     that the State has--
       ``(i) adhered to the requirements of this subsection and 
     paragraph in providing services under such an election; and
       ``(ii) met the State's objectives with respect to quality 
     improvement and beneficiary outcomes.''.
       (c) Removal of Limitation on Scope of Services.--Paragraph 
     (1) of section 1915(i) of the Social Security Act (42 U.S.C. 
     1396n(i)), as amended by subsection (a), is amended by 
     striking ``or such other services requested by the State as 
     the Secretary may approve''.
       (d) Optional Eligibility Category To Provide Full Medicaid 
     Benefits to Individuals Receiving Home and Community-Based 
     Services Under a State Plan Amendment.--
       (1) In general.--Section 1902(a)(10)(A)(ii) of the Social 
     Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended--
       (A) in subclause (XVIII), by striking ``or'' at the end;
       (B) in subclause (XIX), by adding ``or'' at the end; and
       (C) by inserting after subclause (XIX), the following new 
     subclause:

       ``(XX) who are eligible for home and community-based 
     services under needs-based criteria established under 
     paragraph (1)(A) of section 1915(i), or who are eligible for 
     home and community-based services under paragraph (6) of such 
     section, and who will receive home and community-based 
     services pursuant to a State plan amendment under such 
     subsection;''.

       (2) Conforming amendments.--
       (A) Section 1903(f)(4) of the Social Security Act (42 
     U.S.C. 1396b(f)(4)) is amended in the matter preceding 
     subparagraph (A), by inserting ``1902(a)(10)(A)(ii)(XX),'' 
     after ``1902(a)(10)(A)(ii)(XIX),''.
       (B) Section 1905(a) of the Social Security Act (42 U.S.C. 
     1396d(a)) is amended in the matter preceding paragraph (1)--
       (i) in clause (xii), by striking ``or'' at the end;
       (ii) in clause (xiii), by adding ``or'' at the end; and
       (iii) by inserting after clause (xiii) the following new 
     clause:
       ``(xiv) individuals who are eligible for home and 
     community-based services under needs-based criteria 
     established under paragraph (1)(A) of section 1915(i), or who 
     are eligible for home and community-based services under 
     paragraph (6) of such section, and who will receive home and 
     community-based services pursuant to a State plan amendment 
     under such subsection,''.
       (e) Elimination of Option To Limit Number of Eligible 
     Individuals or Length of Period for Grandfathered Individuals 
     if Eligibility Criteria Is Modified.--Paragraph (1) of 
     section 1915(i) of such Act (42 U.S.C. 1396n(i)) is amended--
       (1) by striking subparagraph (C) and inserting the 
     following:
       ``(C) Projection of number of individuals to be provided 
     home and community-based services.--The State submits to the 
     Secretary, in such form and manner, and upon such frequency 
     as the Secretary shall specify, the projected number of 
     individuals to be provided home and community-based 
     services.''; and
       (2) in subclause (II) of subparagraph (D)(ii), by striking 
     ``to be eligible for such services for a period of at least 
     12 months beginning on the date the individual first received 
     medical assistance for such services'' and inserting ``to 
     continue to be eligible for such services after the effective 
     date of the modification and until such time as the 
     individual no longer meets the standard for receipt of such 
     services under such pre-modified criteria''.
       (f) Elimination of Option To Waive Statewideness; Addition 
     of Option to Waive Comparability.--Paragraph (3) of section 
     1915(i) of such Act (42 U.S.C. 1396n(3)) is amended by 
     striking ``1902(a)(1) (relating to statewideness)'' and 
     inserting ``1902(a)(10)(B) (relating to comparability)''.
       (g) Effective Date.--The amendments made by this section 
     take effect on the first day of the first fiscal year quarter 
     that begins after the date of enactment of this Act.

     SEC. 4202. MANDATORY APPLICATION OF SPOUSAL IMPOVERISHMENT 
                   PROTECTIONS TO RECIPIENTS OF HOME AND 
                   COMMUNITY-BASED SERVICES.

       (a) In General.--Section 1924(h)(1)(A) of the Social 
     Security Act (42 U.S.C. 1396r-5(h)(1)(A)) is amended by 
     striking ``(at the option of the State) is described in 
     section 1902(a)(10)(A)(ii)(VI)'' and inserting ``is eligible 
     for medical assistance for home and community-based services 
     under subsection (c), (d), (e), or (i) of section 1915''.
       (b) Effective Date.--The amendment made by subsection (a) 
     takes effect on October 1, 2009.

     SEC. 4203. STATE AUTHORITY TO ELECT TO EXCLUDE UP TO 6 MONTHS 
                   OF AVERAGE COST OF NURSING FACILITY SERVICES 
                   FROM ASSETS OR RESOURCES FOR PURPOSES OF 
                   ELIGIBILITY FOR HOME AND COMMUNITY-BASED 
                   SERVICES.

       (a) In General.--Section 1917 of the Social Security Act 
     (42 U.S.C. 1396p) is amended by adding at the end the 
     following new subsection:
       ``(i) State Authority To Exclude up to 6 Months of Average 
     Cost of Nursing Facility Services From Home and Community-
     Based Services Eligibility Determinations.--Nothing in this 
     section or any other provision of this title, shall be 
     construed as prohibiting a State from excluding from any 
     determination of an individual's assets or resources for 
     purposes of determining the eligibility of the individual for 
     medical assistance for home and community-based services 
     under subsection (c), (d), (e), or (i) of section 1915 (if a 
     State imposes an limitation on assets or resources for 
     purposes of eligibility for such services), an amount equal 
     to the product of the amount applicable under subsection 
     (c)(1)(E)(ii)(II) (at the time such determination is made) 
     and such number, not to exceed 6, as the State may elect.''.
       (b) Rule of Construction.--Nothing in the amendment made by 
     subsection (a) shall be construed as affecting a State's 
     option to apply less restrictive methodologies under section 
     1902(r)(2) for purposes of determining income and resource 
     eligibility for individuals specified in that section.

      Subtitle C--Coordination of Home and Community-Based Waivers

     SEC. 4301. STREAMLINED PROCESS FOR COMBINED WAIVERS UNDER 
                   SUBSECTIONS (B) AND (C) OF SECTION 1915 .

       Not later than 90 days after the date of enactment of this 
     Act, the Secretary of Health and Human Services shall create 
     a template to streamline the process of approving, 
     monitoring, evaluating, and renewing State proposals to 
     conduct a program that combines the waiver authority provided 
     under subsections (b) and (c) of section 1915 of the Social 
     Security Act (42 U.S.C. 1396n) into a single program under 
     which the State provides home and community-based services to 
     individuals based on individualized assessments and care 
     plans (in this section referred to as the ``combined waivers 
     program''). The template required under this section shall 
     provide for the following:
       (1) A standard 5-year term for conducting a combined 
     waivers program.
       (2) Harmonization of any requirements under subsections (b) 
     and (c) of such section that overlap.
       (3) An option for States to elect, during the first 5-year 
     term for which the combined waivers program is approved to 
     phase-in the enrollment of eligible individuals, or the 
     provision of services to such individuals, or both, so long 
     as all eligible individuals in the State for such services 
     are enrolled, and all such services are provided, before the 
     end of the initial 5-year period.

[[Page S6604]]

       (4) Examination by the Secretary, prior to each renewal of 
     a combined waivers program, of how well the State has--
       (A) adhered to the combined waivers program requirements; 
     and
       (B) performed in meeting the State's objectives for the 
     combined waivers program, including with respect to quality 
     improvement and beneficiary outcomes.

         TITLE V--HOME AND COMMUNITY-BASED SERVICES PROVISIONS

     SEC. 5001. SHORT TITLE.

       This Act may be cited as the ``Project 2020: Building on 
     the Promise of Home and Community-Based Services Act of 
     2009''.

     SEC. 5002. LONG-TERM SERVICES AND SUPPORTS.

       The Social Security Act (42 U.S.C. 301 et seq.) is amended 
     by adding at the end the following:

             ``TITLE XXII--LONG-TERM SERVICES AND SUPPORTS

     ``SEC. 2201. DEFINITIONS.

       ``Except as otherwise provided, the terms used in this 
     title have the meanings given the terms in section 102 of the 
     Older Americans Act of 1965 (42 U.S.C. 3002).

            ``Subtitle A--Single-Entry Point System Program

     ``SEC. 2211. STATE SINGLE-ENTRY POINT SYSTEMS.

       ``(a) Definitions.--In this title:
       ``(1) Long-term services and supports.--The term `long-term 
     services and supports' means any service (including a disease 
     prevention and health promotion service, an in-home service, 
     or a case management service), care, or item (including an 
     assistive device) that is--
       ``(A) intended to assist individuals in coping with, and, 
     to the extent practicable, compensating for, functional 
     impairment in carrying out activities of daily living;
       ``(B) furnished at home, in a community care setting, 
     including a small community care setting (as defined in 
     section 1929(g)(1)) and a large community care setting (as 
     defined in section 1929(h)(1)), or in a long-term care 
     facility; and
       ``(C) not furnished to diagnose, treat, or cure a medical 
     disease or condition.
       ``(2) Single-entry point system.--The term `single-entry 
     point system' means any coordinated system for providing--
       ``(A) comprehensive information to consumers and caregivers 
     on the full range of available public and private long-term 
     services and supports, options, service providers, and 
     resources, including information on the availability of 
     integrated long-term care, including consumer directed care 
     options;
       ``(B) personal counseling to assist individuals in 
     assessing their existing or anticipated long-term care needs, 
     and developing and implementing a plan for long-term care 
     designed to meet their specific needs and circumstances; and
       ``(C) consumers and caregivers access to the range of 
     publicly supported and privately supported long-term services 
     and supports that are available.
       ``(b) Program.--The Secretary shall establish and carry out 
     a single-entry point system program. In carrying out the 
     program, the Secretary shall make grants to States, from 
     allotments described in subsection (c), to pay for the 
     Federal share of the cost of establishing State single-entry 
     point systems.
       ``(c) Allotments.--
       ``(1) Allotments to indian tribes and territories.--
       ``(A) Reservation.--The Secretary shall reserve from the 
     funds made available under subsection (g)--
       ``(i) for fiscal year 2010, $1,962,456; and
       ``(ii) for each subsequent fiscal year, $1,962,456, 
     increased by the percentage increase in the Consumer Price 
     Index for All Urban Consumers, between October of the fiscal 
     year preceding the subsequent fiscal year and October, 2007.
       ``(B) Allotments.--The Secretary shall use the funds 
     reserved under subparagraph (A) to make allotments to--
       ``(i) Indian tribes; and
       ``(ii) Guam, American Samoa, the Commonwealth of the 
     Northern Mariana Islands, the Commonwealth of Puerto Rico, 
     and the United States Virgin Islands.
       ``(2) Allotments to states.--
       ``(A) In general.--
       ``(i) Amount.--The Secretary shall allot to each eligible 
     State for a fiscal year the sum of the fixed amount 
     determined under subparagraph (B), and the allocation 
     determined under subparagraph (C), for the State.
       ``(ii) Subgrants to area agencies on aging.--

       ``(I) In general.--Each State agency receiving an allotment 
     under clause (i) shall use such allotment to make subgrants 
     to area agencies on aging that can demonstrate performance 
     capacity to carry out activities described in this section 
     whether such area agency on aging carries out the activities 
     directly or through contract with an aging network or 
     disability entity.
       ``(II) Subgrants to other entities.--A State agency may 
     make subgrants described in subclause (I) to other qualified 
     aging network or disability entities only if the area agency 
     on aging chooses not to apply for a subgrant or is not able 
     to demonstrate performance capacity to carry out the 
     activities described in this section.
       ``(III) Subgrantee recipient subgrants.--An administrator 
     of a single-entry point system established by a State 
     receiving an allotment under clause (i) shall make any 
     necessary subgrants to key partners involved in developing, 
     planning, or implementing the single-entry point system. Such 
     partners may include centers for independent living (as 
     defined in section 702 of the Rehabilitation Act of 1973 (29 
     U.S.C. 796a)).

       ``(B) Fixed amounts for states.--
       ``(i) Reservation.--The Secretary shall reserve from the 
     funds made available under subsection (g)--

       ``(I) for fiscal year 2010, $15,759,000; and
       ``(II) for each subsequent fiscal year, $15,759,000, 
     increased by the percentage increase in the Consumer Price 
     Index for All Urban Consumers, between October of the fiscal 
     year preceding the subsequent fiscal year and October, 2007.

       ``(ii) Fixed amounts.--The Secretary shall use the funds 
     reserved under clause (i) to provide equal fixed amounts to 
     the States.
       ``(C) Allocation for states.--The Secretary shall allocate 
     to each eligible State for a fiscal year an amount that bears 
     the same relationship to the funds made available under 
     subsection (g) (and not reserved under paragraph (1) or 
     subparagraph (B)) for that fiscal year as the number of 
     persons who are either older individuals or individuals with 
     disabilities in that State bears to the number of such 
     persons or individuals in all the States.
       ``(D) Determination of number of persons.--
       ``(i) Older individuals.--The number of older individuals 
     in any State and in all States shall be determined by the 
     Secretary on the basis of the most recent data available from 
     the Bureau of the Census, and other reliable demographic data 
     satisfactory to the Secretary.
       ``(ii) Individuals with disabilities.--The number of 
     individuals with disabilities in any State and in all States 
     shall be determined by the Secretary on the basis of the most 
     recent data available from the American Community Survey, and 
     other reliable demographic data satisfactory to the 
     Secretary, on individuals who have a sensory disability, 
     physical disability, mental disability, self-care disability, 
     go-outside-home disability, or employment disability.
       ``(3) Eligibility.--In addition to the States determined by 
     the Secretary to be eligible for a grant under this section, 
     a State that receives a Federal grant for an aging and 
     disability resource center is eligible for a grant under this 
     section.
       ``(4) Definition.--In this subsection, the term `State' 
     shall not include any jurisdiction described in paragraph 
     (1)(B)(ii).
       ``(d) Applications.--
       ``(1) In general.--To be eligible to receive an initial 
     grant under this section, a State agency shall, after 
     consulting and coordinating with consumers, other 
     stakeholders, and area agencies on aging in the State, if 
     any, submit an application to the Secretary at such time, in 
     such manner, and containing the following information:
       ``(A) Evidence of substantial involvement of stakeholders 
     and agencies in the State that are administering programs 
     that will be the subject of referrals.
       ``(B) The applicant shall establish or designate a 
     collaborative board to ensure meaningful involvement of 
     stakeholders in the development, planning, implementation, 
     and evaluation of a single-entry point system consistent with 
     the following:
       ``(i) The collaborative board shall be composed of--

       ``(I) individuals representing all populations served by 
     the applicant's single-entry point system, including older 
     adults and individuals from diverse backgrounds who have a 
     disability or a chronic condition requiring long-term 
     support;
       ``(II) a representative from the local center for 
     independent living (as defined in section 702 of the 
     Rehabilitation Act of 1973 (29 U.S.C. 796a)), and 
     representatives from other organizations that provide 
     services to the individuals served by the system and those 
     who advocate on behalf of such individuals; and
       ``(III) representatives of the government and non-
     governmental agencies that are affected by the system.

       ``(ii) The applicant shall work in conjunction with the 
     collaborative board on--

       ``(I) the design and operations of the single-entry point 
     system;
       ``(II) stakeholder input; and
       ``(III) other program and policy development issues related 
     to the single-entry point system.

       ``(iii) An advisory board established under the Real Choice 
     Systems Change Program or for an existing single-entry point 
     system may be used to carry out the activities of a 
     collaborative board under this subparagraph if such advisory 
     board meets the requirements under clause (i).
       ``(C) The applicant's plan for providing--
       ``(i) comprehensive information on the full range of 
     available public and private long-term services and supports 
     options, providers, and resources, including building 
     awareness of the single-entry point system as a resource;
       ``(ii) objective, neutral, and personal information, 
     counseling, and assistance to individuals and their 
     caregivers in assessing their existing or anticipated long-
     term care needs, and developing and implementing a plan for 
     long-term care to meet their needs;
       ``(iii) for eligibility screening and referral for 
     services;
       ``(iv) for stakeholder input;
       ``(v) for a management information system; and
       ``(vi) for an evaluation of the effectiveness of the 
     single-entry point system.

[[Page S6605]]

       ``(D) A specification of the period of the grant request, 
     which shall include not less than 3 consecutive fiscal years 
     in the 5-fiscal-year-period beginning with fiscal year 2010.
       ``(E) Such other information as the Secretary determines 
     appropriate.
       ``(2) Application for continuation.--
       ``(A) In general.--A State that receives an initial grant 
     under this section shall apply, after consulting and 
     coordinating with the area agencies on aging, for a 
     continuation of the initial grant, which includes a 
     description of any significant changes to the information 
     provided in the initial application and such data concerning 
     performance measures related to the requirements in the 
     initial application as the Secretary shall require.
       ``(B) Effect.--The requirement under subparagraph (A) shall 
     be in effect through fiscal year 2020.
       ``(e) Use of Funds.--
       ``(1) In general.--A State that receives a grant under this 
     section shall use the funds made available through the grant 
     to--
       ``(A) establish a State single-entry point system, to 
     enable older individuals and individuals with disabilities 
     and their caregivers to obtain resources concerning long-term 
     services and supports options; and
       ``(B) provide information on, access to, and assistance 
     regarding long-term services and supports.
       ``(2) Services.--In particular, the State single-entry 
     point system shall be the referral source to--
       ``(A) provide information about long-term care planning and 
     available long-term services and supports through a variety 
     of media (such as websites, seminars, and pamphlets);
       ``(B) provide assistance with making decisions about long-
     term services and supports and determining the most 
     appropriate services through options counseling, future 
     financial planning, and case management;
       ``(C) provide streamlined access to and assistance with 
     applying for federally funded long-term care benefits 
     (including medical assistance under title XIX, Medicare 
     skilled nursing facility services, services under title III 
     of the Older Americans Act of 1965 (42 U.S.C. 3021 et seq.), 
     the services of Aging and Disability Resource Centers), and 
     State-funded and privately funded long-term care benefits, 
     through efforts to shorten and simplify the eligibility 
     processes for older individuals and individuals with 
     disabilities;
       ``(D) provide referrals to the State evidence-based disease 
     prevention and health promotion programs under subtitle B;
       ``(E) allocate the State funds available under subtitle C 
     and carry out the State enhanced nursing home diversion 
     program under subtitle C; and
       ``(F) and provide information about, other services 
     available in the State that may assist an individual to 
     remain in the community, including the Medicare and Medicaid 
     programs, the State health insurance assistance program, the 
     supplemental nutrition assistance program established under 
     the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.), 
     and the Low-Income Home Energy Assistance Program under the 
     Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621 
     et seq.), and such other services, as the State shall 
     include.
       ``(3) Collaborative arrangements.--
       ``(A) Center for independent living.--Each entity receiving 
     an allotment under subsection (c) shall involve in the 
     planning and implementation of the single-entry point system 
     the local center for independent living (as defined in 
     section 702 of the Rehabilitation Act of 1973 (29 U.S.C. 
     796a)), which provides information, referral, assistance, or 
     services to individuals with disabilities.
       ``(B) Other entities.--To the extent practicable, the State 
     single-entry point system is encouraged to enter into 
     collaborative arrangements with aging and disability 
     programs, service providers, agencies, the direct care work 
     force, and other entities in order to ensure that information 
     about such services may be made available to individuals 
     accessing the State single-entry point system.
       ``(f) Federal Share.--
       ``(1) In general.--The Federal share of the cost described 
     in subsection (b) shall be 75 percent.
       ``(2) Non-federal share.--The State may provide the non-
     Federal share of the cost in cash or in-kind, fairly 
     evaluated, including plant, equipment, or services. The State 
     may provide the non-Federal share from State, local, or 
     private sources.
       ``(g) Funding.--
       ``(1) In general.--The Secretary shall use amounts made 
     available under paragraph (2) to make the grants described in 
     subsection (b).
       ``(2) Funding.--There are authorized to be appropriated to 
     carry out this section--
       ``(A) $30,900,000 for fiscal year 2010;
       ``(B) $38,264,000 for fiscal year 2011;
       ``(C) $48,410,000 for fiscal year 2012;
       ``(D) $53,560,000 for fiscal year 2013;
       ``(E) $63,860,000 for fiscal year 2014;
       ``(F) $69,010,000 for fiscal year 2015;
       ``(G) $74,160,000 for fiscal year 2016;
       ``(H) $79,310,000 for fiscal year 2017;
       ``(I) $84,460,000 for fiscal year 2018;
       ``(J) $89,610,000 for fiscal year 2019; and
       ``(K) $95,790,000 for fiscal year 2020.
       ``(3) Availability.--Funds appropriated under paragraph (2) 
     shall remain available until expended.

                  ``Subtitle B--Healthy Living Program

     ``SEC. 2221. EVIDENCE-BASED DISEASE PREVENTION AND HEALTH 
                   PROMOTION PROGRAMS.

       ``(a) Program.--The Secretary shall establish and carry out 
     a healthy living program. In carrying out the program, the 
     Secretary shall make grants to State agencies, from 
     allotments described in subsection (b), to pay for the 
     Federal share of the cost of carrying out evidence-based 
     disease prevention and health promotion programs.
       ``(b) Allotments.--
       ``(1) Allotments to indian tribes and territories.--
       ``(A) Reservation.--The Secretary shall reserve from the 
     funds made available under subsection (g)--
       ``(i) for fiscal year 2010, $1,500,952; and
       ``(ii) for each subsequent fiscal year, $1,500,952, 
     increased by the percentage increase in the Consumer Price 
     Index for All Urban Consumers, between October of the fiscal 
     year preceding the subsequent fiscal year and October, 2007.
       ``(B) Allotments.--The Secretary shall use the reserved 
     funds under subparagraph (A) to make allotments to--
       ``(i) Indian tribes; and
       ``(ii) Guam, American Samoa, the Commonwealth of the 
     Northern Mariana Islands, the Commonwealth of Puerto Rico, 
     and the United States Virgin Islands.
       ``(2) In general.--
       ``(A) Amounts.--
       ``(i) In general.--Except as provided in paragraph (3), the 
     Secretary shall allot to each eligible State for a fiscal 
     year an amount that bears the same relationship to the funds 
     made available under this section and not reserved under 
     paragraph (1) for that fiscal year as the number of older 
     individuals in the State bears to the number of older 
     individuals in all the States.
       ``(ii) Older individuals.--The number of older individuals 
     in any State and in all States shall be determined by the 
     Secretary on the basis of the most recent data available from 
     the Bureau of the Census, and other reliable demographic data 
     satisfactory to the Secretary.
       ``(B) Subgrants.--
       ``(i) In general.--Each State agency that receives an 
     amount under subparagraph (A) shall award subgrants to area 
     agencies on aging that can demonstrate performance capacity 
     to carry out activities under this section whether such area 
     agency on aging carries out the activities directly or 
     through contract with an aging network entity.
       ``(ii) Subgrants to other entities.--A State agency may 
     make subgrants described in clause (i) to other qualified 
     aging network entities only if the area agency on aging 
     chooses not to apply for a subgrant or is not able to 
     demonstrate performance capacity to carry out the activities 
     described in this section.
       ``(3) Minimum allotment.--No State shall receive an 
     allotment under this section for a fiscal year that is less 
     than 0.5 percent of the funds made available to carry out 
     this section for that fiscal year and not reserved under 
     paragraph (1).
       ``(4) Eligibility.--In addition to the States determined by 
     the Secretary to be eligible for a grant under this section, 
     a State that receives a Federal grant for evidence-based 
     disease prevention is eligible for a grant under this 
     section.
       ``(c) Applications.--To be eligible to receive a grant 
     under this section, a State agency shall, after consulting 
     and coordinating with consumers, other stakeholders, and area 
     agencies on aging in the State, if any, submit an application 
     to the Secretary at such time, in such manner, and containing 
     the following information:
       ``(1) A description of the evidence-based disease 
     prevention and health promotion program.
       ``(2) Sufficient information to demonstrate that the 
     infrastructure exists to support the program.
       ``(3) A specification of the period of the grant request, 
     which shall include not less than 3 consecutive fiscal years 
     in the 5 fiscal year period beginning with fiscal year 2010.
       ``(4) Such other information as the Secretary determines 
     appropriate.
       ``(d) Application for Continuation.--
       ``(1) In general.--A State that receives an initial grant 
     under this section shall apply, after consulting and 
     coordinating with the area agencies on aging, for a 
     continuation of the initial grant, which application shall 
     include--
       ``(A) a description of any significant changes to the 
     information provided in the initial application; and
       ``(B) such data concerning performance measures related to 
     the requirements in the initial application as the Secretary 
     shall require.
       ``(2) Effect.--The requirement under paragraph (1) shall be 
     in effect through fiscal year 2020.
       ``(e) Use of Funds.--A State that receives a grant under 
     this section shall use the funds made available through the 
     grant to carry out--
       ``(1) an evidence-based chronic disease self-management 
     program;
       ``(2) an evidence-based falls prevention program; or
       ``(3) another evidence-based disease prevention and health 
     promotion program.
       ``(f) Federal Share.--
       ``(1) In general.--The Federal share of the cost described 
     in subsection (a) shall be 85 percent.
       ``(2) Non-federal share.--The State may provide the non-
     Federal share of the cost in cash or in-kind, fairly 
     evaluated, including

[[Page S6606]]

     plant, equipment, or services. The State may provide the non-
     Federal share from State, local, or private sources.
       ``(g) Funding.--
       ``(1) In general.--The Secretary shall use amounts made 
     available under paragraph (2) to make the grants described in 
     subsection (a).
       ``(2) Funding.--There are authorized to be appropriated to 
     carry out this section--
       ``(A) $36,050,000 for fiscal year 2010;
       ``(B) $41,200,000 for fiscal year 2011;
       ``(C) $56,650,000 for fiscal year 2012;
       ``(D) $77,250,000 for fiscal year 2013;
       ``(E) $92,700,000 for fiscal year 2014;
       ``(F) $103,000,000 for fiscal year 2015;
       ``(G) $118,450,000 for fiscal year 2016;
       ``(H) $133,900,000 for fiscal year 2017;
       ``(I) $149,350,000 for fiscal year 2018;
       ``(J) $157,590,000 for fiscal year 2019; and
       ``(K) $173,040,000 for fiscal year 2020.
       ``(3) Availability.--Funds appropriated under paragraph (2) 
     shall remain available until expended.

                    ``Subtitle C--Diversion Programs

     ``SEC. 2231. ENHANCED NURSING HOME DIVERSION PROGRAMS.

       ``(a) Definition.--In this section:
       ``(1) Low-income senior.--The term `low-income senior' 
     means an individual who--
       ``(A) is age 75 or older; and
       ``(B) is from a household with a household income that is 
     not less than 150 percent, and not more than 300 percent, of 
     the poverty line.
       ``(2) Nursing home.--The term `nursing home' means--
       ``(A) a skilled nursing facility, as defined in section 
     1819(a); or
       ``(B) a nursing facility, as defined in section 1919(a).
       ``(b) Program.--
       ``(1) In general.--The Secretary shall establish and carry 
     out a diversion program. In carrying out the program, the 
     Secretary shall make grants to States, from allotments 
     described in subsection (c), to pay for the Federal share of 
     the cost of carrying out enhanced nursing home diversion 
     programs.
       ``(2) Cohorts.--The Secretary shall make the grants to--
       ``(A) a first year cohort consisting of one third of the 
     States, for fiscal year 2010;
       ``(B) a second year cohort consisting of the cohort 
     described in subparagraph (A) and an additional one third of 
     the States, for fiscal year 2011; and
       ``(C) a third year cohort consisting of all the eligible 
     States, for fiscal year 2012 and each subsequent fiscal year.
       ``(3) Readiness.--In determining whether to include an 
     eligible State in the first year, second year, or third year 
     and subsequent year cohort, the Secretary shall consider the 
     readiness of the State to carry out an enhanced nursing home 
     diversion program under this section. Readiness shall be 
     determined based on a consideration of the following factors:
       ``(A) Availability of a comprehensive array of home- and 
     community-based services.
       ``(B) Sufficient home- and community-based services 
     provider capacity.
       ``(C) Availability of housing.
       ``(D) Availability of supports for consumer-directed 
     services, including whether a fiscal intermediary is in 
     place.
       ``(E) Ability to perform timely eligibility determinations 
     and assessment for services.
       ``(F) Existence of a quality assessment and improvement 
     program for home and community-based services.
       ``(G) Such other factors as the Secretary determines 
     appropriate.
       ``(c) Allotments.--
       ``(1) In general.--
       ``(A) Amount.--The Secretary shall allot to an eligible 
     State (within the applicable cohort) for a fiscal year an 
     amount that bears the same relationship to the funds made 
     available under subsection (i) for that fiscal year as the 
     number of low-income seniors in the State bears to the number 
     of low-income seniors within States in the applicable cohort 
     for that fiscal year.
       ``(B) Low-income seniors.--The number of low-income seniors 
     in any State and in all States shall be determined by the 
     Secretary on the basis of the most recent data available from 
     the American Community Survey, and other reliable demographic 
     data satisfactory to the Secretary.
       ``(2) Eligibility.--In addition to the States determined by 
     the Secretary to be eligible for a grant under this section, 
     a State that receives a Federal grant for a nursing home 
     diversion is eligible for a grant under this section.
       ``(d) Applications.--To be eligible to receive a grant 
     under this section, a State agency shall, after consulting 
     and coordinating with consumers, other stakeholders, and area 
     agencies on aging in the State, if any, submit an application 
     to the Secretary at such time, in such manner, and containing 
     such information as the Secretary may require, including a 
     specification of the period of the grant request, which shall 
     include not less than 3 consecutive fiscal years in the 5 
     fiscal year period beginning with the fiscal year prior to 
     the year of application.
       ``(e) Application for Continuation.--
       ``(1) In general.--A State that receives an initial grant 
     under this section shall apply, after consulting and 
     coordinating with the area agencies on aging, for a 
     continuation of the initial grant, which application shall 
     include--
       ``(A) a description of any significant changes to the 
     information provided in the initial application; and
       ``(B) such data concerning performance measures related to 
     the requirements in the initial application as the Secretary 
     shall require.
       ``(2) Effect.--The requirement under paragraph (1) shall be 
     in effect through fiscal year 2020.
       ``(f) Use of Funds.--
       ``(1) In general.--A State that receives a grant under this 
     section shall carry out the following:
       ``(A) Use the funds made available through the grant to 
     carry out an enhanced nursing home diversion program that 
     enables eligible individuals to avoid admission into nursing 
     homes by enabling the individuals to obtain alternative long-
     term services and supports and remain in their communities.
       ``(B) Award subgrants to area agencies on aging that can 
     demonstrate performance capacity to carry out activities 
     under this section whether such area agency on aging carries 
     out the activities directly or through contract with an aging 
     network entity. A State may make subgrants to other qualified 
     aging network entities only if the area agency on aging 
     chooses not to apply for a subgrant or is not able to 
     demonstrate performance capacity to carry out the activities 
     described in this section.
       ``(2) Case management.--
       ``(A) In general.--The State, through the State single-
     entry point system established under subtitle A, shall 
     provide for case management services to the eligible 
     individuals.
       ``(B) Use of existing services.--In carrying out 
     subparagraph (A), the State agency or area agency on aging 
     may utilize existing case management services delivery 
     networks if--
       ``(i) the networks have adequate safeguards against 
     potential conflicts of interest; and
       ``(ii) the State agency or area agency on aging includes a 
     description of such safeguards in the grant application.
       ``(C) Care plan.--The State shall provide for development 
     of a care plan for each eligible individual served, in 
     consultation with the eligible individual and their 
     caregiver, as appropriate. In developing the care plan, the 
     State shall explain the option of consumer directed care and 
     assist an individual, who so requests, with developing a 
     consumer-directed care plan that shall include arranging for 
     support services and funding. Such assistance shall include 
     providing information and outreach to individuals in the 
     hospital, in a nursing home for post-acute care, or 
     undergoing changes in their health status or caregiver 
     situation.
       ``(g) Eligible Individuals.--In this section, the term 
     `eligible individual' means an individual--
       ``(1) who has been determined by the State to be at high 
     functional risk of nursing home placement, as defined by the 
     State agency in the State agency's grant application;
       ``(2) who is not eligible for medical assistance under 
     title XIX; and
       ``(3) who meets the income and asset eligibility 
     requirements established by the State and included in such 
     State's grant application for approval by the Secretary.
       ``(h) Federal Share.--
       ``(1) In general.--The Federal share of the cost described 
     in subsection (b) shall be, for a State and for a fiscal 
     year, the sum of--
       ``(A) the Federal medical assistance percentage applicable 
     to the State for the year under section 1905(b); and
       ``(B) 5 percentage points.
       ``(2) Non-federal share.--The State may provide the non-
     Federal share of the cost in cash or in-kind, fairly 
     evaluated, including plant, equipment, or services. The State 
     may provide the non-Federal share from State, local, or 
     private sources.
       ``(i) Funding.--
       ``(1) In general.--The Secretary shall use amounts made 
     available under paragraph (2) to make the grants described in 
     subsection (b).
       ``(2) Funding.--There are authorized to be appropriated to 
     carry out this section--
       ``(A) $111,825,137 for fiscal year 2010;
       ``(B) $337,525,753 for fiscal year 2011;
       ``(C) $650,098,349 for fiscal year 2012;
       ``(D) $865,801,631 for fiscal year 2013;
       ``(E) $988,504,887 for fiscal year 2014;
       ``(F) $1,124,547,250 for fiscal year 2015;
       ``(G) $1,276,750,865 for fiscal year 2016;
       ``(H) $1,364,488,901 for fiscal year 2017;
       ``(I) $1,466,769,052 for fiscal year 2018;
       ``(J) $1,712,755,702 for fiscal year 2019; and
       ``(K) $1,712,755,702 for fiscal year 2020.
       ``(3) Availability.--Funds appropriated under paragraph (2) 
     shall remain available until expended.

   ``Subtitle D--Administration, Evaluation, and Technical Assistance

     ``SEC. 2241. ADMINISTRATION, EVALUATION, AND TECHNICAL 
                   ASSISTANCE.

       ``(a) Administration and Expenses.--For purposes of 
     carrying out this title, there are authorized to be 
     appropriated for administration and expenses--
       ``(1) of the area agencies on aging--
       ``(A) $16,825,895 for fiscal year 2010;
       ``(B) $39,246,141 for fiscal year 2011;
       ``(C) $50,766,948 for fiscal year 2012;
       ``(D) $66,999,101 for fiscal year 2013;
       ``(E) $76,979,152 for fiscal year 2014;
       ``(F) $87,163,513 for fiscal year 2015;
       ``(G) $98,780,562 for fiscal year 2016;
       ``(H) $106,063,792 for fiscal year 2017;
       ``(I) $114,324,642 for fiscal year 2018;
       ``(J) $123,312,948 for fiscal year 2019; and
       ``(K) $133,215,845 for fiscal year 2020;
       ``(2) of the State agencies--
       ``(A) $8,412,948 for fiscal year 2010;
       ``(B) $19,623,071 for fiscal year 2011;
       ``(C) $25,383,474 for fiscal year 2012;

[[Page S6607]]

       ``(D) $33,499,551 for fiscal year 2013;
       ``(E) $38,489,576 for fiscal year 2014;
       ``(F) $43,581,756 for fiscal year 2015;
       ``(G) $49,390,281 for fiscal year 2016;
       ``(H) $53,031,896 for fiscal year 2017;
       ``(I) $57,162,321 for fiscal year 2018;
       ``(J) $61,656,474 for fiscal year 2019; and
       ``(K) $66,607,923 for fiscal year 2020; and
       ``(3) of the Administration--
       ``(A) $2,103,237 for fiscal year 2010;
       ``(B) $4,905,768 for fiscal year 2011;
       ``(C) $6,345,868 for fiscal year 2012;
       ``(D) $8,374,888 for fiscal year 2013;
       ``(E) $9,622,394 for fiscal year 2014;
       ``(F) $10,895,439 for fiscal year 2015;
       ``(G) $12,347,570 for fiscal year 2016;
       ``(H) $13,257,974 for fiscal year 2017;
       ``(I) $14,290,580 for fiscal year 2018;
       ``(J) $15,414,118 for fiscal year 2019; and
       ``(K) $16,651,981 for fiscal year 2020.
       ``(b) Evaluation and Technical Assistance.--
       ``(1) Conditions to receipt of grant.--In awarding grants 
     under this title, the Secretary shall condition receipt of 
     the grant for the second and subsequent grant years on a 
     satisfactory determination that the State agency is meeting 
     benchmarks specified in the grant agreement for each grant 
     awarded under this title.
       ``(2) Evaluations.--The Secretary shall measure and 
     evaluate, either directly or through grants or contracts, the 
     impact of the programs authorized under this title. Not later 
     than June 1 of the year that is 6 years after the year of the 
     date of enactment of the Project 2020: Building on the 
     Promise of Home and Community-Based Services Act of 2009 and 
     every 2 years thereafter, the Secretary shall--
       ``(A) compile the reports of the measures and evaluations 
     of the grantees;
       ``(B) establish benchmarks to show progress toward savings; 
     and
       ``(C) present a compilation of the information under this 
     paragraph to Congress.
       ``(3) Technical assistance grants.--The Secretary shall 
     award technical assistance grants, including State specific 
     grants whenever practicable, to carry out the programs 
     authorized under this title.
       ``(4) Transfer.--There are authorized to be appropriated 
     for such evaluation and technical assistance under this 
     subsection--
       ``(A) $4,206,474 for fiscal year 2010;
       ``(B) $9,811,535 for fiscal year 2011;
       ``(C) $8,461,158 for fiscal year 2012;
       ``(D) $11,166,517 for fiscal year 2013;
       ``(E) $12,829,859 for fiscal year 2014;
       ``(F) $14,527,252 for fiscal year 2015;
       ``(G) $16,463,427 for fiscal year 2016;
       ``(H) $17,677,299 for fiscal year 2017;
       ``(I) $19,054,107 for fiscal year 2018;
       ``(J) $20,552,158 for fiscal year 2019; and
       ``(K) $22,202,641 for fiscal year 2020.
       ``(c) Availability.--Funds appropriated under this section 
     shall remain available until expended.''.
                                 ______