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                                                      Calendar No. 187
114th Congress    }                                     {       Report
                                 SENATE
 1st Session      }                                     {      114-108

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



 
 A BILL TO AMEND TITLE XI OF THE SOCIAL SECURITY ACT TO CLARIFY WAIVER 
  AUTHORITY REGARDING PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY 
                            (PACE PROGRAMS)

                                _______
                                

                 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. 1362]

    The Committee on Finance, to which was referred the bill 
(S. 1362) to amend title XI of the Social Security Act to 
clarify waiver authority regarding programs of all-inclusive 
care for the elderly (PACE programs), 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. 1362) to amend title XI of the Social Security Act to 
clarify waiver authority regarding programs of all-inclusive 
care for the elderly (PACE programs), having considered the 
same, reports favorably thereon with an amendment and 
recommends that the bill, as amended, do pass.

Background and need for legislative action

    The Program of All-Inclusive Care for the Elderly (PACE) is 
an integrated care program that provides comprehensive long-
term services and supports to individuals aged 55 and older who 
require an institutional level of care, many of whom are 
eligible for both Medicare and Medicaid and are known as dual-
eligible beneficiaries. The PACE program was established in the 
Social Security Act (SSA) in section 1894 for Medicare and 
section 1934 for Medicaid. Setting up a PACE program is 
optional for states under Medicaid. In 2014, 31 states had PACE 
programs. PACE providers receive capitated payments from both 
Medicaid and Medicare to cover an enrollee's benefits. In many 
cases, the PACE program enables enrollees to receive services 
through an adult day health center rather than through an 
institution such as a nursing facility.
    The Committee recognizes the success of the PACE model in 
providing coordinated health care to a population with high 
medical and social needs. The Committee believes changes to the 
PACE model (either through an expansion of eligibility 
standards and/or changes to administrative requirements that 
would enable greater enrollment) should be tested by the 
Centers for Medicare and Medicaid Services. Under current law, 
such testing is not permitted.

                      II. EXPLANATION OF THE BILL


                              PRESENT LAW

    Section 1115A of the Social Security Act (SSA) gives the 
Secretary of the Department of Health and Human Services (the 
Secretary) the authority to waive certain requirements found in 
the SSA ``as may be necessary'' to test ``innovative payment 
and delivery models to reduce program expenditures.'' Under 
section 1115A, the Secretary is not authorized to waive any 
PACE requirements under title XIX of the SSA.

                           REASONS FOR CHANGE

    The Committee recognizes the success of the PACE model in 
providing coordinated health care to a population with high 
medical and social needs. The Committee believes changes to the 
PACE model (either through an expansion of eligibility 
standards and/or changes to administrative requirements that 
would enable greater enrollment) should be tested by the 
Centers for Medicare and Medicaid Services. Under current law, 
such testing is not permitted.

                        EXPLANATION OF PROVISION

    This bill would amend section 1115A(d)(1) of the SSA to add 
section 1934 to the waiver authority, authorizing the 
Department of Health and Human services to waive applicable 
general and Medicaid requirements in order to conduct 
demonstration projects that involve PACE. S. 1362 as amended 
clarifies that within the Secretary's statutory authority to 
waive certain requirements, the Secretary cannot waive the 
requirement to offer ``all items and services covered'' under 
Medicare and Medicaid without limitation to PACE program 
enrollees. Further, under S. 1362 as amended, the Secretary 
cannot waive certain Medicaid requirements that pertain to 
enrollment and disenrollment from PACE programs.

                    III. BUDGET EFFECTS OF THE BILL


                         A. 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 ``PACE Innovation Act of 2015'' as reported.
    It is uncertain whether the Secretary would decide to 
exercise the new authority provided under the legislation to 
pursue projects through CMMI that differ from those she would 
have tested using existing authority. However, if the Secretary 
decided to test a different project under the legislation than 
she otherwise would have, then in CBO's judgment that project 
would have roughly the same chances of success or failure. 
Thus, the decision to use the new authority to test a PACE 
model instead of some other model would result in no 
significant change in direct spending, CBO estimates. Because 
enacting the bill could affect direct spending, pay-as-you-go 
procedures apply. Enacting the bill would not affect revenues.
    Source: Estimate provided by the staff of the Congressional 
Budget Office.

                B. 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 does not involve 
increased budget authority.

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.

            C. 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. 1362--PACE Innovation Act of 2015

    S. 1362 would authorize the Secretary of Health and Human 
Services (HHS) to waive requirements under section 1934 of the 
Social Security Act when designing and testing models under the 
Center for Medicare and Medicaid Innovation (CMMI). Section 
1934 authorizes the Program of All-Inclusive Care for the 
Elderly (PACE), and establishes features of the program 
including payment rates and conditions of participation. Under 
current law, CMMI lacks authority to waive those features 
included in section 1934, and has limited flexibility to test 
changes to administering the PACE program. The legislation 
would give the Secretary authority to change features of PACE 
for the purposes of testing whether they improve the program.
    Under current law, CMMI has broad authority to conduct 
other demonstration projects under the Medicare and Medicaid 
programs (outside of PACE). CBO expects that some of those 
projects will succeed in reducing federal spending without 
reducing quality of care, and others will not, but CBO is 
unable to predict which projects will succeed.
    It is uncertain whether the Secretary would decide to 
exercise the new authority provided under the legislation to 
pursue projects through CMMI that differ from those she would 
have tested using existing authority. However, if the Secretary 
decided to test a different project under the legislation than 
she otherwise would have, then in CBO's judgment that project 
would have roughly the same chances of success or failure. 
Thus, the decision to use the new authority to test a PACE 
model instead of some other model would result in no 
significant change in direct spending, CBO estimates. Because 
enacting the bill could affect direct spending, pay-as-you-go 
procedures apply. Enacting the bill would not affect revenues.
    S. 1362 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Paul Masi. The 
estimate was 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 ``PACE Innovation Act of 2015,'' as 
modified, was ordered favorably reported on June 24, 2015 as 
follows:
    Final Passage of ``The PACE Innovation Act of 2015''--
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]