Text: S.1781 — 111th Congress (2009-2010)All Information (Except Text)

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Introduced in Senate (10/14/2009)


111th CONGRESS
1st Session
S. 1781


To provide for a demonstration program to reduce frequent use of health services by Medicaid beneficiaries with chronic illnesses by providing coordinated care management and community support services.


IN THE SENATE OF THE UNITED STATES

October 14, 2009

Mrs. Shaheen (for herself, Mr. Brown, and Mr. Menendez) introduced the following bill; which was read twice and referred to the Committee on Finance


A BILL

To provide for a demonstration program to reduce frequent use of health services by Medicaid beneficiaries with chronic illnesses by providing coordinated care management and community support services.

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 “Reducing Emergency Department Utilization through Coordination and Empowerment Demonstration Program Act” or the “REDUCE Demonstration Program”.

SEC. 2. Definitions.

In this Act:

(1) CHRONIC CONDITION.—The term “chronic condition” means a chronic medical condition that is life-threatening or may result in permanent disability, including—

(A) asthma;

(B) cancer;

(C) chronic obstructive pulmonary disease;

(D) congestive heart failure or arrhythmia;

(E) diabetes;

(F) HIV/AIDS;

(G) liver disease;

(H) post-traumatic stress disorder;

(I) renal failure;

(J) rheumatologic disease;

(K) severe mental illness;

(L) substance abuse disorder;

(M) thromboembolic disease;

(N) traumatic brain injury resulting in cognitive impairment;

(O) chronic pain; and

(P) any other chronic medical condition that has been identified by a State and approved by the Secretary for inclusion under the REDUCE demonstration program.

(2) FREQUENT USER OF HEALTH SERVICES.—The term “frequent user of health services” means an individual who uses the emergency department, is admitted to the hospital, or uses other inpatient services frequently.

(3) MEDICAID.—The term “Medicaid” means the Federal and State medical assistance program established under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).

(4) PARTICIPATING STATE.—The term “participating State” means a State with an approved application (as described in section 3(b)(1)) that has entered into an agreement with the Secretary to conduct a REDUCE demonstration program.

(5) REDUCE DEMONSTRATION PROGRAM.—The term “REDUCE demonstration program” means a program described in section 3 that is conducted pursuant to an agreement between the Secretary and a participating State.

(6) SAFETY NET HOSPITAL.—The term “safety net hospital” means a hospital with a low-income utilization rate greater than 25 percent (as defined under section 1923(b)(3) of the Social Security Act (42 U.S.C. 1396r–4(b)(3)));

(7) SECRETARY.—The term “Secretary” means the Secretary of Health and Human Services.

(8) STATE.—The term “State” has the meaning given that term for purposes of Medicaid.

(9) TARGETED MEDICAID BENEFICIARY.—

(A) IN GENERAL.—The term “targeted Medicaid beneficiary” means an individual who has—

(i) attained age 19 and is eligible for medical assistance under a State plan or waiver under Medicaid;

(ii) been diagnosed with 2 or more chronic conditions;

(iii) been identified by a participating State as a frequent user of health services; and

(iv) been identified by a participating State as likely to benefit from participation in the REDUCE demonstration program (pursuant to the needs-based criteria described in section 3(c)(3)).

(B) VOLUNTARY PARTICIPATION.—A targeted Medicaid beneficiary may participate in the REDUCE demonstration program on a voluntary basis and may terminate participation at any time.

SEC. 3. REDUCE demonstration program.

(a) In General.—The Secretary shall establish the REDUCE demonstration program under which the Secretary shall enter into agreements with States to provide for the development, implementation, and evaluation of innovative approaches to coordinated care management and increased access to community support services for targeted Medicaid beneficiaries in order to reduce hospital admissions and the use of emergency health care services.

(b) Application and Agreements.—

(1) APPLICATION.—A State seeking to participate in the REDUCE demonstration program shall submit to the Secretary, in such form and manner as the Secretary shall require, an application that, in addition to such other information as the Secretary may require, contains—

(A) a description of the proposed demonstration program, including the information specified in paragraphs (2) through (4) of subsection (c); and

(B) a plan for ensuring continuity of services for targeted Medicaid beneficiaries who are participating in the program on such date that the demonstration program ceases to be conducted in the State.

(2) AGREEMENT.—

(A) IN GENERAL.—Not later than 12 months after the date of enactment of this Act, the Secretary shall enter into agreements with not more than 10 States to conduct the REDUCE demonstration program in accordance with the requirements of this section.

(B) DURATION.—An agreement entered into by the Secretary and a State to conduct a REDUCE demonstration program shall be for a period of 5 years.

(c) Demonstration Program Requirements.—

(1) INDIVIDUALIZED CARE PLANS.—

(A) IN GENERAL.—A REDUCE demonstration program shall be designed to improve the health outcomes for targeted Medicaid beneficiaries participating in the program, reduce hospital admissions and frequent usage of emergency care services, and reduce associated costs under Medicaid by—

(i) identifying health care providers that provide integration of primary care and behavioral health services through co-location of such services or use of multi-disciplinary integrated treatment teams that work collaboratively to provide comprehensive and evidence-based treatment, rehabilitation, and support services for targeted Medicaid beneficiaries;

(ii) providing targeted Medicaid beneficiaries with an individualized care plan (developed in consultation with the beneficiary and the beneficiary's support staff, medical care providers, and family) that provides for flexible services that are based on an examination of the beneficiary's individual care needs (as determined through application of needs-based criteria under paragraph (3)); and

(iii) providing access to a care management team that—

(I) includes, at a minimum—

(aa) a physician, physician assistant, or nurse practitioner;

(bb) a social worker; and

(cc) a community health worker (as licensed or defined by the participating State); and

(II) provides health care services, coordination of primary and specialty care, and assistance with social services in a home or shelter setting.

(B) PHYSICIAN, PHYSICIAN ASSISTANT, OR NURSE PRACTITIONER.—For purposes of the care management team described under subparagraph (A)(iii), such team shall include a physician or, if a physician is not available, a physician assistant or nurse practitioner who may provide such health care services as are within their authorized scope of practice (as determined by the participating State).

(C) BEST PRACTICES.—Delivery of health care services provided pursuant to an individualized care plan (as described in subparagraph (A)(ii)) shall be determined based upon best practices and research regarding—

(i) effective strategies for improving health outcomes (including behavioral health outcomes) and quality of life; and

(ii) cost-effective methods for delivery of health care services.

(2) STATE PLAN AND PROJECTIONS.—

(A) IN GENERAL.—A participating State shall provide the Secretary with a proposal for the development and implementation of the REDUCE demonstration program that includes—

(i) a projection of the number of targeted Medicaid beneficiaries that the State expects to participate in the REDUCE demonstration program; and

(ii) identification of targeted Medicaid beneficiaries through individual assessment and analysis of data from Medicaid claims, hospital records, or other informational sources to identify beneficiaries that have—

(I) engaged in frequent use of emergency, inpatient, or crisis services; or

(II) exhibited identified risk factors that indicate the probability of frequent use of emergency, inpatient, or crisis services;

(iii) a strategy for outreach to targeted Medicaid beneficiaries to provide individualized health care services in order to reduce hospital admissions and prevent frequent use of emergency, inpatient, or crisis services; and

(iv) criteria for selection of health care providers (including behavioral health care providers) that have demonstrated their experience and capacity to effectively engage and serve individuals that—

(I) have been diagnosed with 2 or more chronic conditions; or

(II) exhibit other risk factors identified by the State.

(B) GAINSHARING.—Subject to approval by the Secretary, a participating State may develop and establish a gainsharing arrangement among health care providers participating in the REDUCE demonstration program to allow such providers to retain a share of any savings generated through the demonstration program in order to encourage improved outcomes and increased efficiency.

(C) LIMITATION.—A participating State may, on a statewide or regional basis, provide for a limit on the total number of targeted Medicaid beneficiaries that may be eligible for services under the REDUCE demonstration program and may establish a waiting list for such services.

(D) PRIORITY CONSIDERATIONS.—

(i) IN GENERAL.—In reviewing criteria established by a participating State for selection of health care providers (as described in subparagraph (A)(iv)), the Secretary shall give priority to a State that includes in such selection—

(I) safety net providers, including public hospitals, federally qualified health centers (as described under section 1905(l)(2)(B) of the Social Security Act (42 U.S.C. 1396d(i)(2)(B))), and community mental health centers (as described under section 1861(ff)(3)(B) of such Act (42 U.S.C. 1395x(ff)(3)(B)));

(II) health provider coalitions that—

(aa) have a geographic, community-based focus;

(bb) are based out of—

(AA) a federally qualified health center;

(BB) an university or academic medical center;

(CC) a hospital (including a safety net hospital);

(DD) a private entity whose purpose is to improve access to community health care services for high-risk individuals and those requiring primary care services; or

(EE) a similar organization; and

(cc) have agreements with not less than 2 hospitals, a housing agency, a mental health provider, and not less than 2 primary care physicians within the local community; and

(III) programs that have demonstrated a capacity to share, combine, and analyze health data for frequent users of health services through data sharing agreements with multiple local health institutions.

(ii) REIMBURSEMENT.—The Secretary shall not waive any requirements under title XIX of the Social Security Act relating to services provided by, or reimbursement provided to, federally qualified health centers for purposes of the REDUCE demonstration program. To the extent that participation by a federally qualified health center or safety net hospital in the REDUCE demonstration program requires the center or hospital to provide services that are not covered under the State plan, the participating State shall be required to fully reimburse the center or hospital for the cost of such services.

(3) NEEDS-BASED CRITERIA.—A participating State shall establish needs-based criteria for determining the eligibility of individuals for participation in the REDUCE demonstration program. The criteria shall provide for consideration of an individual's medical history, including—

(A) the number and severity of chronic conditions;

(B) functional impairments;

(C) care and support needs;

(D) any recent patterns of excessive utilization of emergency or inpatient care in a hospital or similar facility; and

(E) other factors which the State determines are associated with increased hospital admissions or frequent utilization of emergency, inpatient, or crisis services (including housing status and other social determinants of health status).

(4) COVERED SERVICES.—

(A) IN GENERAL.—A participating State shall provide the Secretary with a comprehensive list of services that shall be available to targeted Medicaid beneficiaries under the REDUCE demonstration program. Such services shall be established and targeted to reduce frequent utilization of health services by targeted Medicaid beneficiaries.

(B) ADDITIONAL SERVICES.—Upon request by the State and subject to approval by the Secretary, a participating State may provide additional services under the demonstration program that are not covered under the State plan upon a showing that such services will reduce avoidable utilization of health services by targeted Medicaid beneficiaries.

(d) Waiver.—Except as provided in subsection (c)(2)(D)(ii), the Secretary may waive such requirements of titles XI, XVIII, and XIX of the Social Security Act as the Secretary determines necessary for a participating State to conduct the REDUCE demonstration program.

SEC. 4. Evaluation and Report.

(a) Evaluation.—

(1) IN GENERAL.—Subject to paragraph (2), the Secretary shall, by grant, contract, or interagency agreement, provide for an evaluation of the REDUCE demonstration programs conducted by participating States under this Act, including an assessment of whether the demonstration programs—

(A) reduce avoidable hospitalizations or other institutional admissions (including at intermediate care facilities for the mentally retarded or nursing facilities);

(B) reduce the use of ambulances, hospital emergency health services, detoxification treatments, or emergency mental health services;

(C) reduce expenditures under the Medicaid program; and

(D) improve the overall health status and satisfaction of the targeted Medicaid beneficiaries participating in the program (including improvements in housing status and other social determinants of health status).

(2) EVALUATION REQUIREMENTS.—The evaluation shall be conducted by an entity that has demonstrated experience with care improvement programs. Such evaluation shall be conducted on an ongoing basis throughout the duration of the demonstration program.

(b) Report.—Not later than 12 months after completion of all REDUCE demonstration programs conducted by participating States under this Act, the Secretary shall prepare and submit a final report on the results of the evaluation to Congress that contains recommendations for such legislative and administrative actions as the Secretary determines appropriate to develop additional programs to provide coordinated care for individuals with complex medical and behavioral health conditions and reduce avoidable hospital readmissions and the use of emergency health care services.

SEC. 5. Funding.

(a) Manner of Payment.—The Secretary shall pay each participating State a quarterly payment for expenditures for providing a covered service (as specified in section 3(c)(4)) to targeted Medicaid beneficiaries that participate in the REDUCE demonstration program conducted by the State. Such payments shall be made in the same manner as other quarterly payments are made to the State under section 1903(a) of the Social Security Act (42 U.S.C. 1396b(a)).

(b) Matching rate.—Subject to subsection (c), the Secretary shall pay a participating State for State expenditures described in subsection (a)—

(1) for fiscal years 2011 or 2012, 100 percent of the amount of such expenditures for the fiscal year; and

(2) for fiscal years 2013, 2014, or 2015, 75 percent of the amount of such expenditures for the fiscal year.

(c) Limitation on funds.—The total amount of payments under this Act shall not exceed $150,000,000 for the period of fiscal years 2011 through 2015.

(d) Appropriation.—

(1) IN GENERAL.—Out of any funds in the Treasury not otherwise appropriated, there is appropriated to the Secretary to carry out this Act, $150,000,000 for the period of fiscal years 2011 through 2015, of which $15,000,000 shall be used for the evaluation required under section 4.

(2) BUDGET AUTHORITY.—This Act constitutes budget authority in advance of appropriations Acts and represents the obligation of the Secretary to provide for the payment of amounts provided under this Act.