To amend titles XIX and XXI of the Social Security Act to clarify and ensure that the authority granted to the Secretary of Health and Human Services under section 1115 of that Act is used solely to promote the objectives of the medicaid and State children's health insurance programs, and for other purposes.

March 22, 2004

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

To amend titles XIX and XXI of the Social Security Act to clarify and ensure that the authority granted to the Secretary of Health and Human Services under section 1115 of that Act is used solely to promote the objectives of the medicaid and State children's health insurance programs, 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; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Medicaid and CHIP Safety Net Preservation Act of 2004'.

(b) TABLE OF CONTENTS- The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings; purposes; rule of construction.

Sec. 3. Clarification that section 1115 authority does not permit a cap on Federal financial participation.

Sec. 4. Clarification that section 1115 authority does not permit elimination of, or modification limiting, individual entitlement.

Sec. 5. Clarification that section 1115 authority does not permit elimination or modification of requirements relating to EPSDT services.

Sec. 6. Clarification that section 1115 authority does not permit elimination or modification of requirements relating to certain safety-net services.

Sec. 7. Prohibition on use of CHIP funds for health benefits coverage for childless adults.

Sec. 8. Improvement of the process for the development and approval of medicaid and CHIP demonstration projects.

Sec. 9. Effective date.

SEC. 2. FINDINGS; PURPOSES; RULE OF CONSTRUCTION.

(a) FINDINGS- Congress makes the following findings:

(1) Certain requirements of titles XIX and XXI of the Social Security Act (42 U.S.C. 1396 et seq., 1397aa et seq.) are central to the overall objectives of the medicaid and State children's health insurance programs and are not properly subject to waiver, modification, or disregard under the authority of section 1115 of the Social Security Act (42 U.S.C. 1315).

(2) Some of the requirements of titles XIX and XXI of the Social Security Act that promote the overall objectives of the medicaid and State children's health insurance programs have been waived, modified, or otherwise disregarded by the Secretary of Health and Human Services under such section 1115, despite the explicit requirement in that section that certain requirements of the medicaid and State children's health insurance programs only may be waived, modified, or disregarded for the purpose of approving an experimental, pilot, or demonstration project if the waiver, modification, or disregard `is likely to assist in promoting the objectives' of those programs.

(b) PURPOSES- The purposes of this Act are the following:

(1) To clarify that certain requirements of titles XIX and XXI of the Social Security Act (42 U.S.C. 1396 et seq., 1397aa et seq.), which are among those critical to achieving the objectives of the medicaid and State children's health insurance programs, may not be waived, modified, or otherwise disregarded by the Secretary of Health and Human Services under the authority of section 1115 of the Social Security Act (42 U.S.C. 1315).

(2) To ensure that the authority granted to the Secretary of Health and Human Services under section 1115 of the Social Security Act (42 U.S.C. 1315) with respect to the medicaid and State children's health insurance programs for the purpose of approving experimental, pilot, or demonstration projects is not used inappropriately.

(c) RULE OF CONSTRUCTION- Nothing in this Act or the amendments made by this Act shall be construed to--

(1) authorize the waiver, modification, or other disregard of any provision of title XIX or XXI of the Social Security Act (42 U.S.C. 1396 et seq., 1397aa et seq.); or

(2) imply congressional approval of any demonstration project affecting the medicaid program under title XIX of the Social Security Act or the State children's health insurance program under title XXI of such Act that has been approved by the Secretary of Health and Human Services as of the date of enactment of this Act.

SEC. 3. CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT PERMIT A CAP ON FEDERAL FINANCIAL PARTICIPATION.

Title XIX of the Social Security Act is amended by inserting after section 1925 the following:

`CLARIFICATIONS OF AUTHORITY UNDER SECTION 1115

`SEC. 1926. (a) CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT PERMIT A CAP ON FEDERAL FINANCIAL PARTICIPATION- The Secretary may not impose or approve under the authority of section 1115 a cap, limitation, or other restriction on payment under section 1903(a) to a State for amounts expended as medical assistance in accordance with the requirements of this title.'.

SEC. 4. CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT PERMIT ELIMINATION OF, OR MODIFICATION LIMITING, INDIVIDUAL ENTITLEMENT.

Section 1926 of the Social Security Act, as added by section 3, is amended by adding at the end the following:

`(b) CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT PERMIT ELIMINATION OF, OR MODIFICATION LIMITING, INDIVIDUAL ENTITLEMENT- The Secretary may not approve or impose under the authority of section 1115 an elimination of, or modification limiting, the entitlement (established under section 1902(a), 1905(a), or otherwise) of an individual to receive any medical assistance for which Federal financial participation is claimed under this title.'.

SEC. 5. CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT PERMIT ELIMINATION OR MODIFICATION OF REQUIREMENTS RELATING TO EPSDT SERVICES.

Section 1926 of the Social Security Act, as added by section 3 and amended by section 4, is amended by adding at the end the following:

`(c) CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT PERMIT ELIMINATION OR MODIFICATION OF REQUIREMENTS RELATING TO EPSDT SERVICES- 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).'.

SEC. 6. CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT PERMIT ELIMINATION OR MODIFICATION OF REQUIREMENTS RELATING TO CERTAIN SAFETY-NET SERVICES.

Section 1926 of the Social Security Act, as added by section 3 and amended by sections 4 and 5, is amended by adding at the end the following:

`(d) CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT PERMIT ELIMINATION OR MODIFICATION OF REQUIREMENTS RELATING TO CERTAIN SAFETY-NET SERVICES- 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 subparagraphs (B) and (C) of section 1905(a)(2) (relating to services provided by a rural health clinic (as defined in section 1905(l)(1)) and services provided by a federally-qualified health center (as defined in section 1905(l)(2))) or of the requirements of section 1902(bb) (relating to payment for such services).'.

SEC. 7. PROHIBITION ON USE OF CHIP FUNDS FOR HEALTH BENEFITS COVERAGE FOR CHILDLESS ADULTS.

(a) IN GENERAL- Section 2107 of the Social Security Act (42 U.S.C. 1397gg) is amended by adding at the end the following:'

`(f) LIMITATION OF WAIVER AUTHORITY- Notwithstanding subsection (e)(2)(A) and section 1115(a), on and after the date of enactment of this subsection, the Secretary may not approve a waiver, experimental, pilot, or demonstration project, or an amendment to such a project, that would allow funds made available under this title to be used to provide child health assistance or other health benefits coverage to a nonpregnant childless adult. For purposes of the preceding sentence, a caretaker relative (as such term is defined for purposes of carrying out section 1931) shall not be considered a childless adult.'.

(b) CONFORMING AMENDMENTS- Section 2105(c)(1) of such Act (42 U.S.C. 1397ee(c)(1)) is amended--

(1) by inserting `and may not include coverage of a nonpregnant childless adult' after `section 2101)'; and

(2) by adding at the end the following: `For purposes of the preceding sentence, a caretaker relative (as such term is defined for purposes of carrying out section 1931) shall not be considered a childless adult.'.

SEC. 8. IMPROVEMENT OF THE PROCESS FOR THE DEVELOPMENT AND APPROVAL OF MEDICAID AND CHIP DEMONSTRATION PROJECTS.

Section 1115 of the Social Security Act (42 U.S.C. 1315) is amended by inserting after subsection (c) the following:

`(d) In the case of any experimental, pilot, or demonstration project under subsection (a) to assist in promoting the objectives of title XIX or XXI in a State that would result in a substantive change in eligibility, enrollment, benefits, financing, or cost-sharing (to the extent permitted under section 1916(f)) with respect to a State program under title XIX or XXI (in this subsection referred to as a `demonstration project') the following shall apply:

`(1) The Secretary may not approve a proposal for a demonstration project, or for an amendment of a demonstration project, submitted by a State on or after the date of enactment of this subsection, unless the State requesting approval certifies that the State provided reasonable public notice and a reasonable opportunity for receipt and consideration of public comment on the proposal prior to submission of the proposal to the Secretary. Such notice shall include--

`(A) the proposal;

`(B) the methodologies underlying the proposal;

`(C) the justifications for the proposal;

`(D) the State's projections regarding the likely effect and impact of the proposal on individuals eligible for assistance and providers or suppliers of items or services under title XIX or XXI (including under any demonstration project conducted in conjunction with either of those titles); and

`(E) the State's assumptions on which the projections described in subparagraph (D) are based.

`(2) With respect to any proposal for a demonstration project, or for an amendment or extension of a demonstration project, which has not been

approved or disapproved by the Secretary as of the date of enactment of this subsection, the Secretary shall--

`(A) provide public notice in the Federal Register and on the Internet website of the Centers for Medicare & Medicaid Services of the proposal, any revisions of the proposal, and any conditions for the financing or approval of the proposal;

`(B) provide adequate opportunity for public comment on the proposal, any revisions of the proposal, and any such conditions;

`(C) approve such proposal, any revisions of the proposal, and any such conditions only if, after consideration of the public comments received, the Secretary determines that the proposal, any revisions of the proposal, and any such conditions are likely to assist in promoting the objectives of title XIX or XXI and identifies in writing the basis for such determination; and

`(D) publish on such website all documentation relating to the proposal (including the written determination required under subparagraph (C)), any revisions of the proposal, and any such conditions, including if the proposal, any revisions of the proposal, and any such conditions are approved--

`(i) the final terms and conditions for the demonstration project; and

`(ii) a list identifying each provision of title XIX or XXI, and each regulation relating to either such title, with which compliance is waived, modified, or otherwise disregarded or for which costs that would otherwise not be permitted under such title will be allowed.'.

SEC. 9. EFFECTIVE DATE.

(a) IN GENERAL- Except as provided in subsection (b), the amendments made by sections 3 through 6 shall apply to the approval on or after the date of enactment of this Act of--

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

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

(b) EXCEPTION- The amendment made by section 5 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.

END