To amend title XIX of the Social Security Act to protect and strengthen the safety net of children's public health coverage by extending the enhanced Federal matching rate under the State children's health insurance program to children covered by medicaid at State option and by encouraging innovations in children's enrollment and retention, to advance quality and performance in children's public health insurance programs, to provide payments for children's hospitals to reward quality and performance, and for other purposes.

July 29, 2005

Mr. DEWINE (for himself and Mrs. LINCOLN) introduced the following bill; which was read twice and referred to the Committee on Finance

To amend title XIX of the Social Security Act to protect and strengthen the safety net of children's public health coverage by extending the enhanced Federal matching rate under the State children's health insurance program to children covered by medicaid at State option and by encouraging innovations in children's enrollment and retention, to advance quality and performance in children's public health insurance programs, to provide payments for children's hospitals to reward quality and performance, and for other purposes.

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 `Advancing Better Coverage and Care for Children's Health Act of 2005' or the `ABCs for Children's Health Act of 2005'.

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--COVERING CHILDREN

Sec. 101. Phased-in application of enhanced FMAP for children whose eligibility is optional under medicaid.

Sec. 102. Enhanced matching rate for the effective enrollment and retention of children under medicaid.

Sec. 103. Preserving comprehensive benefits appropriate to children's needs.

TITLE II--ADVANCING QUALITY AND PERFORMANCE: INNOVATIONS IN CARE

Sec. 201. Purpose.

Sec. 202. National quality forum; advancing consensus-based pediatric quality and performance measures.

Sec. 203. Research grant program; developing new pediatric quality and performance measures.

Sec. 204. Medicaid demonstration program; evaluating evidence-based quality and performance measures for children's health services.

Sec. 205. Funding.

TITLE III--ENSURING ACCESS TO CARE

Sec. 301. Pay for performance for children's critical access hospitals.

Sec. 302. Inclusion of children's hospitals as covered entities for purposes of limitation of purchased drug price.

TITLE I--COVERING CHILDREN

SEC. 101. PHASED-IN APPLICATION OF ENHANCED FMAP FOR CHILDREN WHOSE ELIGIBILITY IS OPTIONAL UNDER MEDICAID.

(a) In General- The first sentence of section 1905 of the Social Security Act (42 U.S.C. 1396d) is amended--

(1) in subsection (b)--

(A) by striking `and (4)' and inserting `(4)'; and

(B) by inserting before the period the following: `, and (5) the Federal medical assistance percentage shall be equal to the applicable percentage determined under subsection (y) with respect to medical assistance provided to children who are eligible for such assistance on the basis of subsection (a)(10)(A)(ii), (a)(10)(C), (e)(3), or (e)(9) of section 1902, or a waiver under subsection (c) or (e) of section 1915, or who are eligible for such assistance during a presumptive eligibility period under section 1920A (but only if the child is not eligible for medical assistance on the basis of section 1902(a)(10)(A)(i))'; and

(2) by adding at the end the following:

`(y) For purposes of the fifth clause of the first sentence of subsection (b), the applicable percentage determined under this subsection is--

`(1) in the case of fiscal year 2006, the enhanced FMAP determined under section 2105(b) by substituting `6 percent' for `30 percent' in such section;

`(2) in the case of fiscal year 2007, the enhanced FMAP determined under section 2105(b) by substituting `12 percent' for `30 percent' in such section;

`(3) in the case of fiscal year 2008, the enhanced FMAP determined under section 2105(b) by substituting `18 percent' for `30 percent' in such section;

`(4) in the case of fiscal year 2009, the enhanced FMAP determined under section 2105(b) by substituting `24 percent' for `30 percent' in such section; and

`(5) in the case of fiscal year 2010 or any fiscal year thereafter, the enhanced FMAP determined under section 2105(b).'.

(b) Effective Date- The amendments made by subsection (a) take effect on October 1, 2005.

SEC. 102. ENHANCED MATCHING RATE FOR THE EFFECTIVE ENROLLMENT AND RETENTION OF CHILDREN UNDER MEDICAID.

(a) In General- Section 1903(a)(3) of the Social Security Act (42 U.S.C. 1396b(a)(3)) is amended--

(1) in subparagraph (E), by striking `plus' at the end and inserting `and'; and

(2) by adding at the end the following:

`(F) 90 percent of the sums expended during such quarter which are attributable to the design, development, implementation, and evaluation of such enrollment systems as the Secretary determines are likely to provide more efficient and effective administration of the plan's enrollment and retention of eligible children, including--

`(i) `express lane' enrollment for children through procedures to ensure that children's eligibility for medical assistance is determined and expedited through the use of technology and shared information with other public benefit programs, such as the school lunch program under the Richard B. Russell National School Lunch Act and the food stamp program under the Food Stamp Act of 1977;

`(ii) a single, simplified application form for medical assistance under this title and for children's health assistance under title XXI;

`(iii) procedures which allow for the enrollment of children by mail or through the Internet;

`(iv) the timely evaluation, assistance, and determination of presumptive eligibility under section 1920A;

`(v) procedures which allow for passive reenrollment of children to protect against the loss of coverage among eligible children; and

`(vi) such other enrollment system changes as the Secretary determines are likely to provide more efficient and effective administration of the plan's enrollment and retention of eligible children; plus'.

(b) Exclusion From Erroneous Excess Payment Determination- Section 1903(u)(1)(D) of such Act (42 U.S.C. 1396a(u)(1)(D)) is amended by adding at the end the following:

`(vi)(I) Notwithstanding clauses (ii) and (iii), and subject to subclause (II), in determining the amount of erroneous excess payments, there shall not be included any erroneous payments made with respect to medical assistance provided to children who are erroneously enrolled or erroneously provided with continued enrollment under this title as a result of the application of enrollment systems described in subsection (a)(3)(F).

`(II) Subclause (I) shall only apply with respect to erroneous payments made during the first 5 fiscal years that begin on or after the date of enactment of this clause.'.

SEC. 103. PRESERVING COMPREHENSIVE BENEFITS APPROPRIATE TO CHILDREN'S NEEDS.

(a) In General- Title XIX of the Social Security Act is amended by inserting after section 1925 the following:

`CLARIFICATION OF AUTHORITY UNDER SECTION 1115

`SEC. 1926. The Secretary may not impose or approve under the authority of section 1115 an elimination or modification of the amount, duration, or scope of the services described in section 1905(a)(4)(B) (relating to early and periodic screening, diagnostic, and treatment services (as defined in section 1905(r))) or of the requirements of subparagraphs (A) through (C) of section 1902(a)(43).'.

(b) Effective Date-

(1) IN GENERAL- Except as provided in paragraph (2), section 1926 of the Social Security Act, as added by subsection (a), shall apply to the approval on or after the date of enactment of this Act of--

(A) a waiver, experimental, pilot, or demonstration project under section 1115 of the Social Security Act (42 U.S.C. 1315); and

(B) an amendment or extension of such a project.

(2) EXCEPTION- Section 1926 of the Social Security Act, as so added, shall not apply with respect to any extension of approval of a waiver, experimental, pilot, or demonstration project with respect to title XIX of the Social Security Act that was first approved before 1994 and that provides a comprehensive and preventive child health program under such project that includes screening, diagnosis, and treatment of children who have not attained age 21.

TITLE II--ADVANCING QUALITY AND PERFORMANCE: INNOVATIONS IN CARE

SEC. 201. PURPOSE.

The purpose of this title is to increase the quality of the health care furnished to children under the health insurance programs under titles XIX and XXI of the Social Security Act.

SEC. 202. NATIONAL QUALITY FORUM; ADVANCING CONSENSUS-BASED PEDIATRIC QUALITY AND PERFORMANCE MEASURES.

(a) In General- The Secretary of Health and Human Services (in this title referred to as the `Secretary'), acting through the Director of the Center for Medicaid and State Operations of the Centers for Medicare & Medicaid Services, shall enter into agreements with the National Quality Forum to facilitate the development of consensus-based pediatric quality and performance measures.

(b) Consultation- In carrying out agreements under subsection (a), the Director of the Center for Medicaid and State Operations shall consult with--

(1) the Agency for Healthcare Research and Quality; and

(2) national pediatric provider groups.

SEC. 203. RESEARCH GRANT PROGRAM; DEVELOPING NEW PEDIATRIC QUALITY AND PERFORMANCE MEASURES.

(a) In General- The Secretary, acting through the Administrator of the Agency for Healthcare Research and Quality, shall award grants to eligible entities for the development and evaluation of pediatric quality and performance measures.

(b) Eligible Entity Defined- In this section, the term `eligible entity' means--

(1) an institution or multiple institutions with demonstrated expertise and capacity to evaluate pediatric quality and performance measures;

(2) a National nonprofit association of pediatric academic medical centers with demonstrated experience in working with other pediatric provider and accrediting organizations in developing quality and performance measures for children's inpatient and outpatient care; and

(3) a collaboration of national pediatric organizations working to improve quality and performance in pediatric critical care.

(c) Application- Each eligible entity desiring a grant under this section shall submit an application to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may require.

SEC. 204. MEDICAID DEMONSTRATION PROGRAM; EVALUATING EVIDENCE-BASED QUALITY AND PERFORMANCE MEASURES FOR CHILDREN'S HEALTH SERVICES.

(a) In General- Not later than 1 year after the date of enactment of this Act, the Secretary, acting through the Director of the Center for Medicaid and State Operations of the Centers for Medicare & Medicaid Services, shall establish demonstration projects in each of the 3 categories described in subsection (c) to advance quality and performance in the delivery of medical assistance provided to children under the medicaid program established under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).

(b) Authority-

(1) IN GENERAL- The Secretary is authorized to award grants to States or providers to conduct such projects.

(2) USE OF FUNDS- Funds provided under a grant awarded under this section may be used for administrative costs, including costs associated with the design, data collection, and evaluation of the demonstration project conducted with such funds, and other expenditures that are not otherwise eligible for reimbursement under the medicaid program.

(3) EVIDENCE OF ORGANIZATIONAL COMMITMENT REQUIRED FOR AWARD OF GRANTS- A State or provider shall not be eligible to receive a grant to conduct a demonstration project under this section unless the State or provider demonstrates a commitment to the concept of change and transformation in the delivery of children's health services. Dedication of financial resources of the State or provider to the project may be deemed to demonstrate evidence of such a commitment.

(c) Project Categories Described- The 3 demonstration project categories described in this subsection are the following:

(1) Projects that adopt and use health information technology and evidenced-based outcome measures for pediatric inpatient and sub-specialty physician care and evaluate the impact of such technology and measures on the quality, safety, and costs of such care.

(2) Projects that demonstrate and evaluate care management for children with chronic conditions to determine the extent to which such management promotes continuity of care, stabilization of medical conditions, and functional outcomes, prevents or minimizes acute exacerbations of chronic conditions, and reduces adverse health outcomes and avoidable hospitalizations.

(3) Projects that implement evidenced-based approaches to improving efficiency, safety, and effectiveness in the delivery of hospital care for children across hospital services and evaluate the impact of such changes on the quality and costs of such care.

(d) Sites- To the extent practicable, the Secretary shall use multiple sites in different geographical locations in conducting each of the 3 demonstration project categories described in subsection (c).

(e) Uniform Measures, Data, Project Evaluations- Working in consultation with experts described in subsection (f) and with participating States or providers, the Secretary shall establish uniform measures (adjusted for patient acuity), collect data, and conduct evaluations with respect to the 3 demonstration project categories described in subsection (c).

(f) Consultation- In developing and implementing demonstration projects under this section, the Secretary shall consult with national pediatric provider organizations, consumers, and such other entities or individuals with relevant expertise as the Secretary deems necessary.

(g) Report- Not later than 6 months after the completion of all demonstration projects conducted under this section, the Secretary shall evaluate such projects and submit a report to Congress that includes the findings of the evaluation and recommendations with respect to--

(1) expanding the projects to additional sites; and

(2) the broad implementation of identified successful approaches in advancing quality and performance in the delivery of medical assistance provided to children under the medicaid program.

SEC. 205. FUNDING.

In order to carry out the provisions of this title, out of funds in the Treasury not otherwise appropriated, there are appropriated to the Secretary--

(1) $25,000,000 for fiscal year 2006;

(2) $30,000,000 for fiscal year 2007; and

(3) $35,000,000 for each of the fiscal years 2008, 2009, and 2010.

TITLE III--ENSURING ACCESS TO CARE

SEC. 301. PAY FOR PERFORMANCE FOR CHILDREN'S CRITICAL ACCESS HOSPITALS.

(a) In General- The Secretary of Health and Human Services (in this section referred to as the `Secretary'), acting through the Administrator of the Centers for Medicare & Medicaid Services (in this section referred to as the `Administrator'), shall implement a 4-year program to develop, implement, and evaluate a pay-for-performance program for eligible children's hospitals providing critical access to children eligible for medical assistance under the medicaid program established under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).

(b) Consultation- Measures of quality and performance utilized in the program will be determined by the Administrator in collaboration with participating eligible children's hospitals and in consultation with States, the National Association of Children's Hospitals and Related Institutions, the Agency for Healthcare Research and Quality, the National Quality Forum, and such other entities or individuals with expertise in pediatric quality and performance measures as the Administrator deems appropriate.

(c) Eligible Children's Hospitals- For purposes of this section, an eligible children's hospital is a children's hospital that, not later than January 1, 2006, has submitted an application to the Secretary to participate in the program established under this section and has been certified by the Secretary as--

(1) meeting the criteria described in subsection (d);

(2) agreeing to report data on quality and performance measures; and

(3) meeting or exceeding such measures as are established by the Secretary with respect to the provision of care by the hospital.

(d) Criteria Described- In order to be certified as meeting the criteria described in this subsection, a hospital shall be a general acute care children's hospital or a specialty children's hospital as defined under 1886(d)(1)(B)(iii) of the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)(iii)), or a non-freestanding general acute care children's hospital which shares a provider number with another hospital or hospital system that--

(1) has 62 or more total pediatric beds;

(2) has 38 or more total combined pediatric general medical or surgical and pediatric intensive care beds;

(3) has at least 4 pediatric intensive care beds;

(4) has a pediatric emergency room in the hospital or access to an emergency room with pediatric services through the hospital system; and

(5) provides a minimum of 25 percent of its days of care to patients eligible for medical assistance under the medicaid program.

(e) Payment Methodology-

(1) IN GENERAL- An eligible children's hospital that participates in the program established under this section shall receive supplemental Federal payments for inpatient and outpatient care (which shall be in addition to any other payments the hospitals receive for such care under the medicaid program) for cost reporting periods or portions of such reporting periods occurring during fiscal years 2007 through 2010 in accordance with the following:

(A) FISCAL YEARS 2007 AND 2008-

(i) IN GENERAL- For hospital cost reporting periods or portions of such reporting periods occurring during fiscal year 2007 or 2008, hospitals reporting data for quality and performance measures established under the program and participating in the development of pay-for-performance methodology under this section, subject to clause (ii), shall receive with respect to inpatient or outpatient care that is determined to meet such measures, a Federal supplemental payment increase equal to the amount received under the medicaid program for such care multiplied by the market basket percentage increase for the year (as defined under section 1886(b)(3)(B)(iii) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(B)(iii)).

(ii) LIMITATION- The total amount of all Federal supplemental payments made with respect to cost reporting periods or portions of such periods described in clause (i) shall not exceed the amounts appropriated under this section for fiscal years 2007 and 2008.

(B) FISCAL YEARS 2009 AND 2010-

(i) IN GENERAL- For cost reporting periods or portions of such periods occurring during fiscal year 2009 or 2010, hospitals shall receive supplemental Federal payments reflecting measures of quality and performance and a pay-for-performance methodology developed by the Secretary in consultation with the entities described in subsection (b). Such methodology shall recognize clinical measures, patient satisfaction and adoption of information technology.

(ii) LIMITATION- The total amount of all Federal supplemental payments made for cost reporting periods or portions of such periods described in clause (i) shall not exceed the amounts appropriated under this section for fiscal years 2009 and 2010.

(2) STATE MAINTENANCE OF EFFORT- With respect to the periods for payment of the Federal supplemental payments established under paragraph (1), in no case shall a State--

(A) pay a participating hospital less for services for children eligible for medical assistance under the medicaid program than the hospital was paid with respect to the most recent cost reporting period ending before the date of enactment of this Act; or

(B) not provide an eligible children's hospital participating in the program established under this section (determined on a facility-specific basis) with the same increase in payment that the State may provide to any other hospital participating in the State medicaid program, including any State-owned or operated hospital or any hospital operated by a State university system.

(f) Appropriations-

(1) IN GENERAL- Out of funds in the Treasury not otherwise appropriated, there are appropriated for making payments under this section--

(A) for fiscal year 2007, $80,000,000;

(B) for fiscal year 2008, $100,000,000; and

(C) for each of fiscal years 2009 and 2010, $120,000,000.

(2) CARRYOVER- Any amount appropriated under paragraph (1) with respect to a fiscal year that remains unobligated as of the end of that fiscal year, shall remain available for obligation during the succeeding fiscal year, in addition to the amount appropriated under that paragraph for such succeeding fiscal year.

(g) Evaluation and Report- Not later than September 1, 2010, the Secretary shall report to Congress on the program established under this section. In providing such a report, the Secretary shall--

(1) conduct an independent evaluation;

(2) consult with States, eligible children's hospitals participating in the program, the National Association of Children's Hospitals and Related Institutions, and other national pediatric organizations and individuals with expertise in pediatric measures of quality and performance;

(3) include a detailed description of the measures and payment enhancements used in determining and rewarding performance under the program;

(4) assess the impact of rewarding performance through the Federal supplemental payments provided under the program, including with respect to any improvements and innovations in the delivery of children's hospital care and children's access to appropriate care;

(5) assess how State hospital payment methodologies under the medicaid program, including hospital and physician payments and coverage, affect the capacity of the medicaid program to reward performance; and

(6) include recommendations to the Committee on Finance of the Senate and the Committee on Energy and Commerce of the House of Representatives regarding the implementation and design of the performance-based payments made under the program, whether to continue such program, and potential alternative approaches to making performance-based payments to such hospitals.

SEC. 302. INCLUSION OF CHILDREN'S HOSPITALS AS COVERED ENTITIES FOR PURPOSES OF LIMITATION OF PURCHASED DRUG PRICE.

(a) In General- Section 340B(a)(4) of the Public Health Services Act (42 U.S.C. 256b(a)(4)) is amended by adding at the end the following new subparagraph:

`(M) A children's hospital described in section 1886(d)(1)(B)(iii) of the Social Security Act which meets the requirements of clauses (i) and (iii) of subparagraph (L) and which would meet the requirements of clause (ii) of such subparagraph if that clause were applied by taking into account the percentage of care provided by the hospital to patients eligible for medical assistance under the medicaid program.'.

(b) Effective Date- The amendment made by subsection (a) shall apply to drugs purchased on or after the date of enactment of this Act.

END