Senate Report 114-103 - COMMUNITY BASED INDEPENDENCE FOR SENIORS ACT

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

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

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COMMUNITY BASED INDEPENDENCE FOR SENIORS ACT

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July 30, 2015.--Ordered to be printed

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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\
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\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.
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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.
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\3\SSA Sec. 1859(f) Requirements Regarding Enrollment in
Specialized MA Plans for Special Needs Individuals.
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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.
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\4\SSA Sec. 1859(f)(5), Care Management Requirements.
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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.
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\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.
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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\
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\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.
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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:

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By fiscal year, in millions of dollars--
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2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2016-2020 2016-2025
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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
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* = 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).

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by fiscal year, in millions of dollars--
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2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2016-2020 2016-2025
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CHANGES IN DIRECT SPENDING

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
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By fiscal year, in millions of dollars--
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2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2016-2020 2016-2025
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NET DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact....................... 0 0 0 1 1 1 1 0 0 0 0 3 4
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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).

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