[Senate Report 114-103]
[From the U.S. Government Publishing Office]


                                                      Calendar No. 182
114th Congress     }                                    {       Report
                                 SENATE
 1st Session       }                                    {      114-103

======================================================================



 
              COMMUNITY BASED INDEPENDENCE FOR SENIORS ACT

                                _______
                                

                 July 30, 2015.--Ordered to be printed

                                _______
                                

               Mr. Hatch, from the Committee on Finance, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 704]

    The Committee on Finance, to which was referred the bill 
(S. 704) to establish a Community-Based Institutional Special 
Needs Plan demonstration program to target home and community-
based care to eligible Medicare beneficiaries, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the bill, as amended, do pass.

                       I. LEGISLATIVE BACKGROUND

    The Committee on Finance, to which was referred the bill 
(S. 704) to establish a Community-Based Institutional Special 
Needs Plan demonstration program to target home and community-
based care to eligible Medicare beneficiaries, reports 
favorably thereon with an amendment and recommends that the 
bill, as amended, do pass.

Background and need for legislative action

    Medicare covers a broad range of medical treatments, 
services, and equipment needed by beneficiaries, but there are 
limitations to Medicare's coverage. To be covered by Medicare, 
items or services must be considered reasonable and necessary 
for the diagnosis or treatment of an illness or injury, or to 
improve the functioning of a body part.\1\ Medicare law defines 
categories of services and items that Medicare routinely 
covers, but Medicare, unlike Medicaid, does not cover long-term 
services and supports (LTSS) such as services provided by 
personal care attendants, homemaker services, home delivered 
meals, and safety equipment.\2\
---------------------------------------------------------------------------
    \1\Social Security Act (SSA) Sec. 1862(a)(1).
    \2\For more information on Medicaid coverage, see CRS Report 
R43357, Medicaid: An Overview, coordinated by Alison Mitchell and CRS 
Report R43495 and Long-Term Services and Supports: In Brief, by Kirsten 
J. Colello.
---------------------------------------------------------------------------
    Medicare Advantage (MA) is an alternative way for Medicare 
beneficiaries to receive covered benefits. Under MA, private 
health plans are paid a per-person amount to provide all 
Medicare covered benefits (except hospice) to beneficiaries who 
enroll in their plan. Medicare beneficiaries who are eligible 
for Part A, enrolled in Part B, and do not have end-stage renal 
disease are eligible to enroll in an MA plan if one is 
available in their area. In general, MA plans offer additional 
benefits or require smaller co-payments or deductibles than 
original Medicare. Sometimes beneficiaries pay for these 
additional benefits through a higher monthly premium, but 
sometimes they are financed through plan savings. The extent of 
extra benefits and reduced cost-sharing varies by plan type and 
geography.
    The Committee recognizes the success of the Medicare 
Advantage program and the potential for plans to provide 
additional services that could prevent or delay low-income 
Medicare beneficiaries from needing institutional services. The 
bill creates a demonstration project to authorize up to five 
Medicare Advantage plans to use their rebate dollars to provide 
eligible enrollees with supplemental benefits that allow for 
care to be delivered in the community, and to test whether 
these plans can prevent or delay beneficiaries from receiving 
services in an institution.

                      II. EXPLANATION OF THE BILL


                              PRESENT LAW

    The Medicare Modernization Act of 2003 (MMA, P.L. 108-273) 
established a new type of Medicare Advantage (MA) plan to 
coordinate care and to focus on individuals with special 
needs.\3\ Special needs plans (SNPs) are allowed to target 
enrollment to one or more types of special needs individuals 
including (1) institutionalized (I-SNPs), (2) dually eligible 
(D-SNPs), and/or (3) individuals with severe or disabling 
chronic conditions (C-SNPs) who would benefit from enrollment 
in a coordinated care plan.
---------------------------------------------------------------------------
    \3\SSA Sec. 1859(f) Requirements Regarding Enrollment in 
Specialized MA Plans for Special Needs Individuals.
---------------------------------------------------------------------------
    In general, SNPs are required to meet all applicable 
statutory and regulatory requirements that apply to MA plans, 
including: state licensure as a risk-bearing entity; MA 
reporting requirements that are applicable depending on plan 
size; and Part D prescription drug benefit requirements. SNP 
payment procedures mirror CMS's procedures for MA plans. SNPs 
prepare and submit a bid like other MA plans, and are paid in 
the same manner as other MA plans based on the plan's 
enrollment and risk adjustment payment methodology. In addition 
to the MA requirements, SNPs must have evidenced-based models 
of care (MOC) tailored to the special health needs of the SNP's 
target population.\4\ A National Committee for Quality 
Assurance approval process that includes eleven clinical and 
non-clinical elements is used to evaluate SNP MOCs.
---------------------------------------------------------------------------
    \4\SSA Sec. 1859(f)(5), Care Management Requirements.
---------------------------------------------------------------------------
    In May 2015, there were approximately 541 SNPs--336 D-SNP 
plans, 148 C-SNP plans, and 57 I-SNP plans--that had about 2.1 
million enrollees--1.7 million enrollees in D-SNPs, 317,476 
enrollees in C-SNPs and 50,000 enrollees in I-SNPs.

Availability of long term services and supports to Medicare 
        beneficiaries

    The Patient Protection and Affordable Care Act (ACA, P.L. 
111-148) authorized MA senior housing facility plans to 
continue operating indefinitely if they participated in a 
demonstration prior to January 1, 2010 and they were offered 
for at least one year.\5\ MA plans generally are required to 
serve areas no smaller than a county, which prevents plans from 
targeting smaller areas that might have a disproportionate 
number of healthier enrollees with lower health costs. MA 
senior housing facility plans may limit their service area to a 
senior housing facility located in a geographic area.\6\ MA 
senior housing facility plans also must restrict enrollment to 
residents of a continuing care retirement community.\7\ In 
addition to complying with all MA requirements, MA senior 
housing facility plans must provide primary care services 
onsite and have a ratio of accessible physicians to 
beneficiaries determined appropriate by the Secretary and 
supply transportation services to beneficiaries to specialty 
health care providers located outside the facility.
---------------------------------------------------------------------------
    \5\The MA senior housing facility plan demonstration was 
established by the Secretary, see the Patient Protection and Affordable 
Care Act, Section 3208. Making Senior Housing Facility Demonstration 
Permanent.
    \6\SSA Sec. 1859(g)(1), Special Rules for a Senior Housing Facility 
Plan.
    \7\SSA Sec. 1852(l)(4)(B), Continuing Care Retirement Communities 
are an arrangement under which housing and health-related services are 
provided (or arranged) through an organization for the enrollee under 
an agreement that is effective for the life of the enrollee or for a 
specified period.
---------------------------------------------------------------------------
    State Health Insurance Counseling and Assistance Programs 
(SHIPs) and other entities provide outreach activities such as 
counseling, education, enrollment assistance, health promotion, 
and other activities to help low-income Medicare beneficiaries 
understand their health insurance choices so they can make 
informed decisions. Outreach services, including counseling, 
are not health services, but are services to help beneficiaries 
find and make best use of the health programs to which they are 
entitled. SHIP authority was established with the creation of 
Medicare Part C, Medicare's competitive health plan option, 
Medicare Advantage (previously referred to as Medicare Choice, 
Medicare + Choice).\8\
---------------------------------------------------------------------------
    \8\SHIPs were authorized under a grant program in the Omnibus 
Budget Reconciliation Act of 1990 (P.L. 105-508), Sec. 4360, Health 
Insurance Information, Counseling, and Assistance Grants.
---------------------------------------------------------------------------

                           REASONS FOR CHANGE

    The Committee recognizes the success of the Medicare 
Advantage program and the potential for plans to provide 
additional services that could prevent or delay low-income 
Medicare beneficiaries from needing institutional services. The 
bill creates a demonstration project to authorize up to five 
Medicare Advantage plans to use their rebate dollars to provide 
eligible enrollees with supplemental benefits that allow for 
care to be delivered in the community.

                        EXPLANATION OF PROVISION

    This bill would require the Secretary to establish a 
Community-Based Institutional Special Needs Plan (CBI-SNP) 
demonstration program intended to prevent or delay low-income 
Medicare beneficiaries from receiving services in an 
institution.
    The Secretary would be required to enter into agreements 
with up to five eligible MA plans to participate in the CBI-SNP 
demonstration. The Secretary also would be authorized to permit 
each participating MA plan to enroll up to 1,000 frail, low-
income Medicare beneficiaries in the program. The MA plans 
participating in the CBI-SNP demonstration would be authorized 
to use their rebate dollars to provide eligible enrollees with 
supplemental benefits that could include LTSS the Secretary 
determines to be appropriate such as the following:
           homemaker services;
           home-delivered meals;
           transportation services;
           respite care;
           adult day care services; and
           non-Medicare-covered safety and other 
        equipment.
    MA SNPs that meet the following conditions would be 
eligible to participate in the CBI-SNP demonstration
           has offered SNPs to nursing home-eligible, 
        non-institutionalized Medicare beneficiaries living in 
        the community;
           has worked with low income beneficiaries, 
        including low income beneficiaries eligible for both 
        Medicare and Medicaid (dual-eligibles);
           is located in a state that agrees to make 
        Medicaid data available to conduct an independent 
        evaluation; and
           meets other conditions determined by the 
        Secretary.
    Low-income Medicare beneficiaries must meet the following 
conditions to participate in the CBI-SNP demonstration:
           be eligible for Medicare Advantage;
           meet the income (less than 150% of the 
        federal poverty limit) and asset requirements for a 
        Medicare Part D low-income subsidy (LIS),
           is not eligible for Medicaid;
           has at least two limitations in activities 
        of daily living (ADLs) as defined under the Internal 
        Revenue Code of 1986; and
           is at least age 65.
    The Secretary would be authorized to permit beneficiaries 
certain exceptions to the normal annual coordinated election 
period. Beneficiaries eligible for the CBI-SNP demonstration 
could dis-enroll at any time from an MA plan that was not 
participating in the CBI-SNP and then enroll in an MA plan that 
was participating in the CBI-SNP demonstration as long as the 
eligible beneficiary resided in the CBI-SNP demonstration 
plan's service area. In addition, beneficiaries eligible to 
participate in the CBI-SNP demonstration who were enrolled in 
original Medicare (fee-for-service) and a Medicare Part D plan 
could dis-enroll at any time from original Medicare and Part D 
plans and enroll in a CBI-SNP as long as the eligible 
beneficiaries resided in the CBI-SNP demonstration plan's 
service area.
    The Secretary would be required to help educate eligible 
Medicare beneficiaries about the availability of the CBI-SNP 
demonstration through beneficiary outreach assistance programs 
such as SHIPs and other organizations that assist Medicare 
beneficiaries with enrollment and eligibility information.

                        EVALUATION AND EXPANSION

    The Secretary will ensure the CBI-SNP demonstration is 
budget neutral. Taking into account the evaluation described 
below, the Secretary may expand the duration and scope of the 
CBI-SNP demonstration if:
           the expansion is expected to improve the 
        quality of care (as defined by the CMS Administrator) 
        without increasing net Medicare and Medicaid 
        expenditures, or reduce spending without reducing the 
        quality of care;
           the Chief Actuary of CMS certifies that the 
        expansion would not increase net program spending; and
           the expansion would not deny or limit the 
        coverage or provision of benefits to applicable 
        individuals.
    If the Secretary determined that the CBI-SNP demonstration 
was expected to reduce Medicare and Medicaid spending without 
reducing quality of care or improved quality without increasing 
spending, then the Secretary would be authorized to expand the 
duration and scope of the CBI-SNP demonstration, including 
implementing it nationally and/or permanently expanding it as 
long as the CMS Chief Actuary certified that the expansion 
would not increase Medicare and Medicaid spending.
    The Secretary would be required to arrange for an 
independent, third-party evaluation of the CBI-SNP 
demonstration. Prior to implementation of the CBI-SNP 
demonstration, the Secretary would be required to clearly 
articulate the evaluation criteria which would include the 
following criteria: specific demonstration goals, hypotheses to 
be tested, and clear data collection and reporting 
requirements. The Secretary would be required to ensure that 
the evaluation determined whether or not the CBI-SNP 
demonstration program met the following conditions:
           improved patient care,
           reduced hospitalizations or 
        rehospitalizations,
           reduced or delayed Medicaid nursing facility 
        admissions and lengths of stay,
           reduced spend down of income and assets for 
        purposes of becoming eligible for Medicaid; and
           improved quality of life for the 
        demonstration population and beneficiary and caregiver 
        satisfaction.
    By January 1, 2022, based on at least three years of data, 
the Secretary would be required to submit a report to Congress 
documenting the results of the CBI-SNP evaluation and 
recommendations for legislative or administrative action.

                             EFFECTIVE DATE

    The Secretary would be required to implement the CBI-SNP 
demonstration by January 1, 2018. The CBI-SNP demonstration 
would be conducted for five years.

                    III. BUDGET EFFECTS OF THE BILL


                         B. Committee Estimates

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate, the following statement is made 
concerning the estimated budget effects of the revenue 
provisions of the ``Community Based Independence for Seniors 
Act'' as reported.
    The bill is estimated to have the following effects on 
Federal budget receipts for fiscal years 2016-2025:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2016   2017   2018   2019   2020   2021   2022   2023   2024   2025  2016-2020  2016-2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING
 
Budget Authority............................................      4      0      0      0      0      0      0      0      0      0         4          4
Estimated Outlays...........................................      *      *      1      1      1      *      *      *      0      0         3          4
--------------------------------------------------------------------------------------------------------------------------------------------------------
* = Less than $500,000.
Source: Estimate provided by the staff of the Congressional Budget Office.

                C. Budget Authority and Tax Expenditures


Budget authority

    In compliance with section 308(a)(1) of the Congressional 
Budget and Impoundment Control Act of 1974 (``Budget Act''), 
the Committee states that the bill as reported involves 
increased budget authority (see table in Part A, above).

Tax expenditures

    In compliance with section 308(a)(1) of the Budget Act, the 
Committee states that the bill does not involve increased tax 
expenditures.

            D. Consultation with Congressional Budget Office

    In accordance with section 403 of the Budget Act, the 
Committee advises that the Congressional Budget Office has 
submitted a statement on the bill.

S. 704--Community Based Independence for Seniors Act

    Summary: S. 704 would establish a demonstration program in 
the Medicare Advantage (MA) program to test the effectiveness 
of granting MA plans flexibility to use part of their existing 
payments to provide for certain long-term care services and 
supports. The legislation would appropriate $3.5 million for 
the demonstration program and its evaluation.
    CBO estimates that enacting S. 704 would increase direct 
spending by about $4 million over the 2016-2025 period. Pay-as-
you-go procedures apply because the bill would affect direct 
spending. Enacting the bill would not affect revenues.
    S. 704 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary effect of S. 704 is shown in the following table. The 
costs of this legislation fall within budget function 570 
(Medicare).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       by fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2016   2017   2018   2019   2020   2021   2022   2023   2024   2025  2016-2020  2016-2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING
 
Budget Authority............................................      4      0      0      0      0      0      0      0      0      0         4          4
Estimated Outlays...........................................      *      *      1      1      1      *      *      *      0      0         3          4
--------------------------------------------------------------------------------------------------------------------------------------------------------
*= Less than $500,000.

    Basis of estimate: S. 704 would require the Secretary of 
Health and Human Services to conduct a demonstration program to 
test the effectiveness of granting MA plans flexibility to use 
part of their existing payments to provide certain long-term 
care services and supports to beneficiaries participating in 
the demonstration.

Community-Based Institutional Special Needs Plan Demonstration

    Under current law, MA plans submit a bid indicating the per 
capita payment they are willing to accept for providing Part A 
and Part B benefits to a beneficiary of average health. That 
bid is compared with a benchmark that is set according to a 
statutory formula, and represents the maximum amount that 
Medicare will pay an MA plan for providing Part A and Part B 
benefits in a given region. In most cases, MA plans submit bids 
that are below the benchmarks in the areas that they serve. 
When this happens, the federal government returns a percentage 
of the difference to the MA plan as a rebate. Plans must return 
the rebate to their beneficiaries in the form of reduced cost 
sharing or additional approved benefits.
    S. 704 would require the Secretary of Health and Human 
Services to establish a demonstration program called the 
Community-Based Institutional Special Needs Plan (CBI-SNP) 
beginning January 1, 2018, for a period of five years. Under 
the demonstration, the Secretary would be required to contract 
with up to five MA plans that each could enroll up to 1,000 
beneficiaries to participate in the demonstration. In order to 
participate in the demonstration, both plans and beneficiaries 
would have to meet certain eligibility criteria. The 
demonstration project would not change the amount of payments 
made to MA plans. However, participating plans would have 
flexibility to use their existing rebate dollars to provide 
certain long-term care services and supports, including 
homemaker services, home-delivered meals, and other services as 
the Secretary determines appropriate. The demonstration program 
and its evaluation would be financed through a transfer of $3.5 
million from the Hospital Insurance and Supplemental Medical 
Insurance Trust Funds; CBO estimates that those funds would be 
spent over the 2016-2025 period.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table.

                CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR S. 704, AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FINANCE ON JUNE 24, 2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2015   2016   2017   2018   2019   2020   2021   2022   2023   2024   2025  2016-2020  2016-2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             NET DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact.......................      0      0      0      1      1      1      1      0      0      0      0         3          4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: S. 704 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Paul Masi and Andrea 
Noda; Impact on State, Local, and Tribal Governments: J'nell 
Blanco Suchy; Impact on the Private Sector: Amy Petz.
    Estimate approved by: Holly Harvey, Deputy Assistant 
Director for Budget Analysis.

                       IV. VOTES OF THE COMMITTEE

    In compliance with paragraph 7(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee states that, with a 
majority present, the Community Based Independence for Seniors 
Act, as modified, was ordered favorably reported on June 24, 
2015 as follows:
    Final Passage of The Community Based Independence for 
Seniors Act--approved, as modified, by voice vote.

                 V. REGULATORY IMPACT AND OTHER MATTERS


                          A. Regulatory Impact

    Pursuant to paragraph 11(b) of rule XXVI of the Standing 
Rules of the Senate, the Committee makes the following 
statement concerning the regulatory impact that might be 
incurred in carrying out the provisions of the bill as amended.

Impact on individuals and businesses, personal privacy and paperwork

    The bill is not expected to impose additional 
administrative requirements or regulatory burdens on 
individuals. The bill is expected to reduce administrative 
requirements and regulatory burdens on some businesses.
    The provisions of the bill do not impact personal privacy.

                     B. Unfunded Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the bill does not contain 
any private sector mandates. The Committee has determined that 
the bill contains no intergovernmental mandate.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    In the opinion of the Committee, it is necessary in order 
to expedite the business of the Senate, to dispense with the 
requirements of paragraph 12 of rule XXVI of the Standing Rules 
of the Senate (relating to the showing of changes in existing 
law made by the bill as reported by the Committee).

                                  [all]