S. 2222Senate108th Congress (2003-2005)In Committee

Medicaid and CHIP Safety Net Preservation Act of 2004

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SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S2864-2865)

Finance Committee

March 22, 2004

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SenateIntro Referral

Introduced in Senate

March 22, 2004

SenateIntro Referral

Sponsor introductory remarks on measure. (CR S2863-2864)

March 22, 2004

SenateIntro Referral

Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S2864-2865)

Finance Committee

March 22, 2004

Floor Debate

3 members

What members said about S. 2222 on the floor

1 Republican2 Democrats

Sen. Max BaucusD-MT · Mar 22, 2004

Mr. President, I rise today to introduce the Medicaid and CHIP Safety Net Preservation Act, a bill to clarify existing law and to preserve the core elements of Medicaid, the State Children's Health Insurance Program, (CHIP), and our health care safety net, which provide needed health services to more than sixty million Americans. These programs, which are so critical to the health of our children, our parents and grandparents, and to our communities, have been threatened in recent years by waivers that undermine the very foundations of these programs. I am introducing this bill with my colleague, good friend, and the Ranking Member of the Finance Committee's Subcommittee on Health, Senator Rockefeller.

I have long been concerned about the inappropriate use of the so- called ``Section 1115'' waiver authority with respect to Medicaid and CHIP. Section 1115 of the Social Security Act permits the Secretary of HHS to waive provisions of the Medicaid and CHIP statutes at the request of a state if the waiver is determined to ``promote the Objectives'' of the program, and if it meets certain other criteria established in statute. The waiver authority has existed since before Medicaid's inception, and it is designed to allow states before Medicaid's inception, and it is designed to allow states to experiment and engage in pilot and demonstration programs in a variety of Social Security Act programs. It has long been used to allow States to try innovative approaches to deliver or finance healthcare for some of our most vulnerable citizens--poor children, pregnant women and parents, individuals with disabilities, and the elderly, including many in nursing homes.

But in recent years, the waiver authority has been used increasingly aggressively and, in my view, irresponsibly. I first became concerned about these waivers when I learned that waiver programs, which now affect millions of people and tens of billions of dollars annually, were being negotiated and approved in the dark. In some cases, Medicaid enrollees literally could not find what the operative Medicaid rules were in their state, because laws and rules had been waived and the new program requirements were not published in a place accessible to the public. In 2001, I and my colleague, Chairman Chuck Grassley, wrote to Secretary Thompson with our concerns that the waiver process was not adequately transparent, and that there could be no accountability without transparency.

After many months and much correspondence with Secretary Thompson, I noticed some improvement in the posting of approved waiver applications. By that time, the General Accounting Office had reported that there were serious problems with 1115 waivers. Waivers were being approved without adequate public input; waivers were being approved that used funds set aside by Congress for children's health care on childless adults; and waiver applications were being negotiated and approved with different standards applied, depending on the identity of the state applicant. Finally, and most disturbing, the GAO noted that HHS was applying a condition to one type of waiver that imposed a hard cap on Federal spending for a state's elderly Medicaid enrollees over a five-year period.

Most recently, I was deeply disturbed to read press reports indicating that HHS was inviting states to prepare new more comprehensive waiver applications that would impose enforceable, global caps on state Medicaid programs. One of the crucial elements of the Medicaid program is its unique state-federal financing structure, which requires every state dollar expended on Medicaid to be matched by at least one Federal dollar. This guaranteed matching structure provides financial stability and an incentive for states to maintain levels of health care spending in good and bad economic times. The matching structure has, over time, allowed a swift response to economic recessions, high rates of uninsurance, epidemics, disasters like 9/11, and innovative treatment advances, like the advent of expensive protease inhibitors to threat AIDS. The law does not, and it should not, allow a Secretarial waiver of such a core element of Medicaid.

Another press report indicated that one governor intended to seek a waiver to the Medicaid entitlement in exchange for accepting a hard cap on Federal Medicaid spending. In the absence of the individual entitlement, a state could turn away eligible applicants; impose waiting lists; or terminate a health care benefit in the middle of treatment for a serious illness or a stay in a nursing home. For the poor, for children, for individuals with disabilities, such as ``innovation'' in Medicaid could be devastating.

I also heard reported an instance where HHS announced in court, for the very first time, that the Secretary has waived the essential ``EPSDT'' benefit for children in one state. Beneficiaries did not even know that they were no longer entitled to the comprehensive benefit for children until they were in litigation with the State over inadequacies in the state's Medicaid program.

And finally, I am concerned about efforts to undermine Medicaid financing for Community Health Clinics and Rural Health Clinics through the use of the 1115 waiver authority. These clinics provide desperately needed care for Medicaid and CHIP enrollees as well as millions of uninsured Americans. Without fair payment from Medicaid, CHCs and RHCs have reduced capacity to see the patients who rely on them for care.

There are some features of the Medicaid program that are so fundamental to the program that they should never be waived with the stroke of the pen of one person. And I am pleased to quote the new Administrator of the Centers on Medicare and Medicaid Services, Mark McClellan, who agreed at his nomination hearing that, and I quote from a news article citing his testimony, ``federally imposed caps on spending are not envisioned as part of Medicaid's structure.'' He also said that core Medicaid principles, such as the program's state and federal funding partnership and citizens' entitlement to benefits, should not be waived.

I am hopeful that, one day in the not too distant future, the Congress can have a meaningful debate on how to improve the Medicaid program that is now a healthcare lifeline for more than 50 million people, and how to improve CHIP and expand coverage to the uninsured. But in the meantime, we must ensure that efforts to innovate through waivers are made publicly and openly, with an opportunity for stakeholder

input at every level of decision making, and with a promise that innovation will ``do no harm'' to the foundational principles of these safety net programs. I urge my colleagues to cosponsor this bill, which will improve the integrity of Medicaid and CHIP and ensure that they remain available and responsive to the needs of so many Americans.

I ask unanimous consent that the bill be printed in the Record.

Sen. John D. Rockefeller IVD-WV · Mar 22, 2004

Mr. President, I rise today to join the distinguished ranking member from Montana, Mr. Baucus, in introducing the Medicaid and CHIP Safety Net Preservation Act of 2004. Medicaid and the Children's…

Mr. President, I rise today to join the distinguished ranking member from Montana, Mr. Baucus, in introducing the Medicaid and CHIP Safety Net Preservation Act of 2004. Medicaid and the Children's Health Insurance Program (CHIP) provide health insurance coverage to more than 50 million vulnerable Americans, including pregnant women, kids, people with disabilities, and seniors in nursing homes. Preserving the integrity of each of these programs should be one of our top priorities. The bill that we are introducing today would ensure that Section 1115 of the Social Security Act--the so-called ``1115 waiver authority''--does not erode the core objectives of Medicaid and CHIP.

Medicaid and CHIP form the foundation of our Nation's health care safety net. Without them, many more Americans would be uninsured. Unfortunately, the central objectives of these entitlement programs have been threatened in recent years by short-sighted proposals to cap Federal funding, questionable administrative rules and regulations, and inappropriate waivers that essentially waive the requirements of Federal law. The Medicaid and CHIP Safety Net Preservation Act would address each of these issues by reaffirming the core requirements of Medicaid and SCHIP.

Congress created Medicaid in 1965 as Federal-State partnership to provide health insurance coverage to low-income families on welfare. Over the years, Medicaid has evolved into a multi-faceted health insurance program that serves working families, the disabled, and the elderly. Throughout the evolution of Medicaid, two aspects of the program have remained the same: Federal guidelines for program administration and shared Federal and State responsibility for financing. This structure has served the Medicaid program well. It maintains the national health care safety net, while also allowing Federal and State policymakers to tailor the program to meet local needs.

In 1997, I was joined by Senator Chafee in introducing the Children's Health Insurance Program as part of the Balanced Budget Act. The purpose of this program has always been to help the children of families that do not qualify for Medicaid. At the time that CHIP was enacted, 10 million children were uninsured. Today, over 5 million children have coverage through CHIP; this includes nearly 23,000 children in the State of West Virginia. While we still have a long way to go in order to provide every child with health insurance, I believe the families touched by the CHIP program thus far would agree it serves its purpose well.

The legislation that Senator Baucus and I are introducing today is designed to make it very clear that certain requirements under Medicaid and CHIP are central to the overall objectives of these programs and are not subject to waiver. Specifically, this legislation would ensure that 1115 waivers are not used to impose global caps on Federal payments to Medicaid. It would protect the Federal guarantee of Medicaid for any eligible individual. Children would continue to have access to comprehensive health benefits under the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) program. Money intended for the care of children under CHIP would be used for that purpose. Finally, the process for reviewing and approving 1115 waivers would be more transparent, allowing greater opportunities for public notice and comment.

The Medicaid and CHIP Safety Net Preservation Act is a good first step toward preserving these critical health insurance programs. However, in order to strengthen Medicaid and CHIP for the future, we must also enact legislation that gives States the resources they need to cover eligible Medicaid beneficiaries, restores funding for the CHIP program, and allows states greater flexibility within the guidelines of the law. I urge my colleagues to support all of these important measures.

Sen. Kay Bailey HutchisonR-TX · Mar 22, 2004

Mr. President, today I am pleased to introduce the Community Savings and Investment Act of 2004. This will create jobs, expand economic activity, and help to revitalize distressed urban and rural…

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Introduced in SenateIssued March 22, 2004

        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2222 Introduced in Senate (IS)]

108th CONGRESS
2d Session
S. 2222

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.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

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

_______________________________________________________________________

A BILL

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.
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