,,ii #aaeth ,,congress #ast ,session ,s4 #ebj ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #b1 #bjag,mr4 ,cassidy introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend title ,,xix of the ,social ,security ,act to reform payment to ,states under the ,medicaid program4 #a4 ,short title ,this ,act may be cited as the ,medicaid ,accountability and ,care ,act of #bjag4 #b4 ,medicaid payment reform 7a7 ,in general ,title ,,xix of the ,social ,security ,act 7#db ,u4,s4,c4 #acif et seq47 is amended by inserting after section #aijc the following section3 #aijc;,a4 ,reformed payment to ,states 7a7 ,reformed payment system 7#a7 ,in general ,for quarters beginning on or after the implementation date 7as defined in subsection 7k77#a771 in lieu of amounts otherwise payable to a ,state under this title 7including any payments attributable to section #aibc71 except as otherwise provided in this section1 the amount payable to such ,state shall be equal to the sum of the following3 7,a7 ,adjusted aggregate beneficiary-based amount ,the aggregate beneficiary-based amount specified in subsection 7b7 for the quarter and the ,state1 adjusted under subsection 7e74 7,b7 ,chronic care quality bonus ,the amount 7if any7 of the chronic care quality bonus payment specified in subsection 7f7 for the quarter for the ,state4 7#b7 ,requirement of ,state share 7,a7 ,in general ,a ,state shall make1 from non-,federal funds1 expenditures in an amount equal to its ,state share 7as determined under subparagraph 7,b77 for a quarter for items1 services1 and other costs for which1 but for paragraph 7#a71 ,federal funds would have been payable under this title4 7,b7 ,state share ,the ,state share for a ,state for a quarter in a fiscal year is equal to the product of-- 7i7 the aggregate beneficiary-based amount specified in subsection 7b7 for the quarter and the ,state2 and 7ii7 the ratio of-- 7,i7 the ,state percentage described in subparagraph 7,d77ii7 for such ,state and fiscal year2 to 7,,ii7 the ,federal percentage described in subparagraph 7,d77i7 for such ,state and fiscal year4 7,c7 ,nonpayment for failure to pay state share 7i7 ,in general ,if a ,state fails to expend the amount required under subparagraph 7,a7 for a quarter in a fiscal year1 the amount payable to the ,state under paragraph 7#a7 shall be reduced by the product of the amount by which the ,state payment is less than the ,state share and the ratio of-- 7,i7 the ,federal percentage described in subparagraph 7,d77i7 for such ,state and fiscal year2 to 7,,ii7 the ,state percentage described in subparagraph 7,d77ii7 for such ,state and fiscal year4 7ii7 ,grace period ,a ,state shall not be considered to have failed to provide payment of its required ,state share for a quarter under subparagraph 7,a7 if the aggregate ,state payment towards the ,state's required ,state share for the #d-quarter period beginning with such quarter exceeds the required ,state share amount for such #d-quarter period4 7,d7 ,federal and ,state percentages ,in this paragraph1 with respect to a ,state and a fiscal year3 7i7 ,federal percentage ,the ,federal percentage described in this clause is #ge percent or1 if higher1 the ,federal medical assistance percentage for such ,state for such fiscal year4 7ii7 ,state percentage ,the ,state percentage described in this clause is #ajj percent minus the ,federal percentage described in clause 7i74 7,e7 ,rules for crediting toward ,state share 7i7 ,general limitation to matchable expenditures ,a payment for expenditures shall not be counted toward the ,state share under subparagraph 7,a7 unless ,federal payments may be used for such expenditures consistent with paragraph 7#c77;,b74 7ii7 ,further limitations on allowable expenditures ,a payment for expenditures shall not be counted towards the ,state share under subparagraph 7,a7 if the expenditure is for any of the following3 7,i7 ,abortion ,expenditures for an abortion4 7,,ii7 ,intergovernmental transfers ,an expenditure that is attributable to an intergovernmental transfer4 7,,iii7 ,certified public expenditures ,an expenditure that is attributable to certified public expenditures4 7iii7 ,crediting fraud and abuse recoveries ,amounts recovered by a ,state through the operation of its ,medicaid fraud and abuse control unit described in section #aijc7q7 shall be fully counted toward the ,state share under subparagraph 7,a74 7,f7 ,construction ,nothing in the paragraph shall be construed as preventing a ,state from expending1 from non-,federal funds1 an amount under this title in excess of the amount of the ,state share4 7,g7 ,determination based upon submitted claims ,in applying this paragraph with respect to expenditures of a ,state for a quarter1 the determination of the expenditures for such ,state for such quarter shall be made after the end of the period 7which1 as of the date of the enactment of this section1 is #b years7 for which the ,secretary accepts claims for payment under this title with respect to such quarter4 7#c7 ,use of ,federal payments 7,a7 ,application of ,medicaid limitations ,a ,state may only use ,federal payments received under paragraph 7#a7 for expenditures for which ,federal funds would have been payable under this title but for this section4 7,b7 ,limitation for certain eligibles 7i7 ,application of #ajj percent federal poverty line limit on eligibility ,subject to clause 7iii71 a ,state may not use such ,federal payments to provide medical assistance for an individual who has an income 7as determined under clause 7ii77 that exceeds #ajj percent of the poverty line 7as defined in section #baaj7;c77#e77 applicable to a family of the size involved4 7ii7 ,determination of income using modified adjusted gross income without any #e percent increase ,in determining income for purposes of clause 7i7 under section #aijb7;e77#ad7 7relating to modified adjusted gross income71 the following rules shall apply3 7,i7 ,application of spend down ,the ,state shall take into account the costs incurred for medical care or for any other type of remedial care recognized under ,state law in the same manner and to the same extent that such ,state takes such costs into account for purposes of section #aijb7;a77#ag74 7,,ii7 ,disregard of #e percent increase ,subparagraph 7,i7 of section #aijb7;e77#ad7 7relating to a #e percent reduction7 shall not apply4 7iii7 ,exception ,clause 7i7 shall not apply to an individual who is-- 7,i7 a woman described in clause 7i7 of section #aijc7v77#d77;,a72 7,,ii7 a child who is an individual described in clause 7i7 of section #aije7;a72 7,,iii7 enrolled in a ,state plan under this title as of the date of the enactment of this section for the period of continuous enrollment2 or 7,,iv7 described in section #aijb7;e77#ad77;,d7 7relating to modified adjusted gross income74 7iv7 ,clarification related to community spouse ,nothing in this subparagraph shall supersede the application of section #aibd 7related to community spouse income and assets74 7#d7 ,exceptions for pass-through payments 7,a7 ,in general ,paragraph 7#a7 shall not apply1 and amounts shall continue to be payable under this title 7and not under this subsection71 in the case of the following payments 7and related administrative costs and expenditures73 7i7 ,payments to territories ,payments to a ,state other than the #ej ,states and the ,district of ,columbia4 7ii7 ,medicare cost sharing ,payments attributable to ,medicare cost sharing under section #aije7p74 7iii7 ,pediatric vaccines ,payments attributable to section #aibh4 7iv7 ,emergency services for certain individuals ,payments for treatment of emergency medical conditions attributable to the application of section #aijc7v77#b74 7v7 ,indian health care facilities ,payments for medical assistance described in the third sentence of section #aije7;b74 7vi7 ,employer-sponsored insurance 7,,esi7 ,payments for medical assistance attributable to payments to employers for employer-sponsored health benefits coverage4 7vii7 ,other populations with limited benefit coverage ,other payments that are determined by the ,secretary to be related to a specified population for which the medical assistance under this title is limited and does not include any inpatient1 nursing facility1 or long-term care services4 7,b7 ,certain expenses ,paragraph 7#a7 shall not apply1 and amounts shall continue to be payable under this title 7and not under this subsection71 in the case of the following3 7i7 ,administration of medicare prescription drug benefit ,expenditures described in section #aice7;b7 7relating to administration of the ,medicare prescription drug benefit74 7ii7 ,payments for ,,hit bonuses ,payments under section #aijc7;a77#c77;,f7 7relating to payments to encourage the adoption and use of certified ,,ehr technology74 7iii7 ,payments for design1 development1 and installation of ,,mmis and eligibility systems ,payments under subparagraphs 7,a77i7 and 7,h77i7 of section #aijc7;a77#c7 for expenditures for design1 development1 and installation of the ,medicaid management information systems and mechanized verification and information retrieval systems 7related to eligibility74 7#e7 ,payment of amounts 7,a7 ,in general ,except as the ,secretary may otherwise provide1 amounts shall be payable to a ,state under this subsection in the same manner as amounts are payable under subsection 7d7 of section #aijc to a ,state under subsection 7a7 of such section4 7,b7 ,information and forms 7i7 ,submission ,as a condition of receiving payment under this subsection1 a ,state shall submit such information1 in such form1 and manner1 as the ,secretary shall specify1 including information necessary to make the computations under subsections 7c77#b77;,c7 and 7e74 7ii7 ,uniform reporting ,the ,secretary shall develop such forms as may be needed to assure a system of uniform reporting of such information across ,states4 7,c7 ,required reporting of information on medical loss ratios for managed care ,the information required to be reported under subparagraph 7,b77i7 shall include information on the medical loss ratio with respect to coverage provided under each ,medicaid managed care plan with a contract with the ,state under section #aijc7m7 or #aicb4 7b7 ,aggregate beneficiary-,based amount 7#a7 ,in general ,the aggregate beneficiary-based amount specified in this subsection for a ,state for a quarter is equal to the sum of the products1 for each of the categories of ,medicaid beneficiaries specified in paragraph 7#b71 of the following3 7,a7 ,beneficiary-based quarterly amount ,the beneficiary-based quarterly amount for such category computed under subsection 7c7 for such ,state for such quarter4 7,b7 ,number of individuals in category ,subject to subsection 7d71 the average number of ,medicaid beneficiaries enrolled in such category in the ,state in such quarter4 7#b7 ,categories ,the categories specified in this paragraph are the following3 7,a7 ,elderly ,a category of ,medicaid beneficiaries who are #fe years of age or older4 7,b7 ,blind or disabled ,a category of ,medicaid beneficiaries not described in subparagraph 7,a7 who are described in section #aicg7;a77#b77;,b77ii74 7,c7 ,children ,a category of ,medicaid beneficiaries not described in subparagraph 7,b7 who are under #ba years of age4 7,d7 ,other adults ,a category of any ,medicaid beneficiaries who are not described in a previous subparagraph of this paragraph4 7c7 ,computation of per beneficiary1 per category quarterly amount 7#a7 ,in general ,for a ,state1 for each category of beneficiary for a quarter-- 7,a7 ,first reform year ,for quarters in the first reform year 7as defined in subsection 7k77#b771 the beneficiary-based quarterly amount is equal to #a_/d of the base average per beneficiary ,federal payments for such ,state for such category determined under paragraph 7#b71 increased by a factor that reflects the sum of the following3 7i7 ,historical medical care component of ,,cpi through previous reform year ,the percentage increase in the historical medical care component of the ,consumer ,price ,index for all urban consumers 7,u4,s4 city average7 from the midpoint of the base fiscal year 7as defined in paragraph 7#f77 to the midpoint of the fiscal year preceding the first reform year4 7ii7 ,projected medical care component of ,,cpi for the first reform year ,the percentage increase in the projected medical care component of the ,consumer ,price ,index for all urban consumers 7,u4,s4 city average7 from the midpoint of the previous fiscal year referred to in clause 7i7 to the midpoint of the first reform year4 7,b7 ,second and third reform years ,the beneficiary-based quarterly amount for a ,state for a category for quarters in the second reform year or the third reform year is equal to the beneficiary-based quarterly amount under this paragraph for such ,state and category for the previous reform year increased by the per beneficiary percentage increase 7as defined in subparagraph 7,e77 for such category and reform year4 7,c7 ,fourth through tenth reform years ,the beneficiary-based quarterly amount for a ,state for a category for quarters in a reform year beginning with the fourth reform year and ending with the tenth reform year is-- 7i7 in the case of a ,state that is a high per beneficiary ,state or a low per beneficiary ,state 7as defined in paragraph 7#d77;,b77iii77 for the category1 the amount determined under clause 7i7 or 7ii7 of paragraph 7#d77;,b7 for such ,state1 category1 and reform year2 or 7ii7 in the case of any other ,state1 the beneficiary-based quarterly amount under this paragraph for such ,state and category for the previous reform year increased by the per beneficiary percentage increase for such category and reform year4 7,d7 ,eleventh reform year and subsequent reform years ,the beneficiary-based quarterly amount for a ,state for a category for quarters in a reform year beginning with the eleventh reform year is equal to the beneficiary-based quarterly amount under this paragraph for such ,state and category for the previous reform year increased by the per beneficiary percentage increase for such category and reform year4 7,e7 ,annual percentage increase beginning with second reform year ,for purposes of this subsection1 the term per beneficiary percentage increase means1 for a reform year1 the sum of-- 7i7 the projected percentage change in nominal gross domestic product from the midpoint of the previous reform year to the midpoint of the reform year for which the percentage increase is being applied2 and 7ii7 one percentage point4 7#b7 ,base per beneficiary1 per category amount for each ,state 7,a7 ,average per category 7i7 ,in general ,the ,secretary shall determine1 consistent with this paragraph and paragraph 7#c71 a base per beneficiary1 per category amount for each of the #ej ,states and the ,district of ,columbia equal to the average amount1 per ,medicaid beneficiary1 of ,federal payments under this title1 including payments attributable to disproportionate share hospital payments under section #aibc1 for each of the categories of beneficiaries under subsection 7b77#b7 for the base fiscal year for each of the #ej ,states and the ,district of ,columbia4 7ii7 ,best available data ,the determination under clause 7i7 shall initially be estimated by the ,secretary1 based upon the best available data at the time the determination is made4 7iii7 ,updates ,the determination under clause 7i7 shall be updated by the ,secretary on an annual basis based upon improved data4 ,the ,secretary shall adjust the amounts under subsection 7a77#a77;,a7 to reflect changes in the amounts so determined based on such updates4 7,b7 ,exclusion of pass-through payments ,in computing base per beneficiary1 per category amounts under subparagraph 7,a77i7 the ,secretary shall exclude payments described in subsection 7a77#d74 7,c7 ,standardization 7i7 ,in general ,in computing each such amount1 the ,secretary shall standardize the amount in order to remove the variation attributable to the following3 7,i7 ,risk factors ,such risk factors as age1 health and disability status 7including high cost medical conditions71 gender1 institutional status1 and such other factors as the ,secretary determines to be appropriate1 so as to ensure actuarial equivalence4 7,,ii7 ,geographic ,variations in costs on a county-by-county basis4 7ii7 ,method of standardization 7,i7 ,consultation in development of risk standardization ,in developing the methodology for risk standardization for purposes of clause 7i77,i71 the ,secretary shall consult with the ,medicaid and ,,chip ,payment and ,access ,commission1 the ,medicare ,payment ,advisory ,commission1 and the ,national ,association of ,medicaid ,directors4 7,,ii7 ,method for risk standardization ,in carrying out clause 7i77,i71 the ,secretary may apply the hierarchal condition category methodology under section #ahec7;a77#a77;,c74 ,if the ,secretary uses such methodology1 the ,secretary shall adjust the application of such methodology to take into account the differences in services provided under this title compared to title ,,xviii1 such as the coverage of long term care1 pregnancy1 and pediatric services4 7,,iii7 ,method for geographic standardization ,the ,secretary shall apply the standardization under clause 7i77,,ii7 in a manner similar to that applied under section #ahec7;c77#d77;,a77iii74 7iii7 ,application on a national1 budget neutral basis ,the standardization under clause 7i7 shall be designed and implemented on a uniform national basis and shall be budget neutral so as to not result in any aggregate change in payments under subsection 7a74 7iv7 ,response to new risk ,subject to clause 7iii71 the ,secretary may adjust the standardization under clause 7i7 to respond promptly to new instances of communicable diseases and other public health hazards4 7v7 ,reference to application of risk adjustment ,for rules related to the application of risk adjustment to amounts under subsection 7a77#a77;,a71 see subsection 7e74 7,d7 ,adjustment for temporary ,,fmap increases ,in computing each base per beneficiary1 per category amounts under subparagraph 7,a77i7 the ,secretary shall disregard portions of payments that are attributable to a temporary increase in the ,federal matching rates1 including those attributable to the following3 7i7 ,,ppaca disaster ,,fmap ,section #aije7;aa74 7ii7 ,,arra ,section #ejja of the ,american ,recovery and ,reinvestment ,act of #bjji 7#db ,u4,s4,c4 #acif;d note74 7iii7 ,extraordinary employer pension contribution ,section #fad of the ,children's ,health ,insurance ,program ,reauthorization ,act of #bjji 7#db ,u4,s4,c4 #acif;d note74 7#c7 ,allocation of nonmedical assistance payments ,the ,secretary shall establish rules for the allocation of payments under this title 7other than those payments described in paragraph 7#a7 or 7#e7 of section #aijc7;a7 and including such payments attributable to section #aibc7-- 7,a7 among different categories of beneficiaries2 and 7,b7 between payments included under subsection 7a77#a7 and payments described in subsection 7a77#d74 7#d7 ,transition to a corridor around the national average 7,a7 ,determination of national average base per beneficiary1 per category amount ,subject to subparagraph 7,c71 the ,secretary shall determine a national average base per beneficiary1 per category amount equal to the average of the base per beneficiary1 per category amounts for each of the #ej ,states and the ,district of ,columbia determined under paragraph 7#b71 weighted by the average number of beneficiaries in each such category and ,state as determined by the ,secretary consistent with subsection 7d7 for the base fiscal year4 7,b7 ,transition adjustment 7i7 ,high per beneficiary states ,in the case of a high per beneficiary ,state 7as defined in clause 7iii77,i77 for a category1 the beneficiary-based quarterly amount for such ,state and category for a quarter in a reform year 7beginning with the fourth reform year and ending with the tenth reform year7 is equal to the sum of-- 7,i7 the product of the ,state-specific factor for such reform year 7as defined in clause 7iv77 and the beneficiary-based quarterly amount that would otherwise be determined under paragraph 7#a7 for such ,state and category if the ,state were a ,state described in clause 7ii7 of paragraph 7#a77;,c71 instead of a ,state described in clause 7i7 of such paragraph2 and 7,,ii7 the product of #a minus the ,state-specific factor for such reform year and the beneficiary-based quarterly amount that would otherwise be determined under paragraph 7#a7 for a ,state and category if the base per beneficiary1 per category amount determined under paragraph 7#b7 for the ,state and category were equal to #aaj percent of the national average base per beneficiary1 per category amount determined under subparagraph 7,a7 for such category4 7ii7 ,low per beneficiary states ,in the case of a low per beneficiary ,state 7as defined in clause 7iii77,,ii77 for a category1 the beneficiary-based quarterly amount for such ,state and category for a quarter in a reform year 7beginning with the fourth reform year and ending with the tenth reform year7 is equal to the sum of-- 7,i7 the product of the ,state-specific factor for such reform year and the beneficiary-based quarterly amount that would otherwise be determined under paragraph 7#a7 for such ,state and category if the ,state were a ,state described in clause 7ii7 of paragraph 7#a77;,c71 instead of a ,state described in clause 7i7 of such paragraph2 and 7,,ii7 the product of #a minus the ,state-specific factor for such reform year and the beneficiary-based quarterly amount that would otherwise be determined under paragraph 7#a7 for a ,state and category if the base per beneficiary1 per category amount determined under paragraph 7#b7 for the ,state and category were equal to #ij percent of the national average base per beneficiary1 per category amount determined under subparagraph 7,a7 for such category4 7iii7 ,high and low per beneficiary ,states defined ,in this subparagraph3 7,i7 ,high per beneficiary ,state ,the term high per beneficiary ,state means1 with respect to a category1 a ,state for which the base per beneficiary1 per category amount determined under paragraph 7#b7 for such category is greater than #aaj percent of the national average base per beneficiary1 per category amount determined under subparagraph 7,a7 for such category4 7,,ii7 ,low per beneficiary ,state ,the term low per beneficiary ,state means1 with respect to a category1 a ,state for which the base per beneficiary1 per category amount determined under paragraph 7#b7 for such category is less than #ij percent of the national average base per beneficiary1 per category amount determined under subparagraph 7,a7 for such category4 7iv7 ,state-specific factor ,in this subparagraph1 the term ,state-specific factor means-- 7,i7 for the fourth reform year1 #g_/h2 and 7,,ii7 for a subsequent reform year1 the ,state-specific factor under this clause for the previous reform year minus #a_/h4 7,c7 ,no additional expenditures 7i7 ,determination of increase in ,federal expenditures ,for each category for each reform year 7beginning with the fourth reform year and ending with the tenth reform year71 the ,secretary shall determine whether the application of this paragraph-- 7,i7 to the category for the reform year will result in an aggregate increase in the aggregate ,federal expenditures under subsection 7a72 and 7,,ii7 to all the categories for the reform year will result in a net aggregate increase in the aggregate ,federal expenditures under subsection 7a74 7ii7 ,adjustment ,if the ,secretary determines under clause 7i77,,ii7 that the application of this paragraph to all the categories for a reform year will result in a net aggregate increase in the aggregate ,federal expenditures under subsection 7a71 the ,secretary shall reduce the national average base per beneficiary1 per category amount computed under subparagraph 7,a7 for each of the categories determined under clause 7i77,i7 for which there will be an aggregate increase in the aggregate ,federal expenditures under subsection 7a7 by such uniform percentage as will ensure that there is no net aggregate ,federal expenditure increase described in clause 7i77,,ii7 for the reform year4 7#e7 ,reports on per beneficiary rates2 appeals 7,a7 ,report to states ,not later than #h months after the date of the enactment of this section1 the ,secretary shall submit to each ,state the ,secretary's initial determination of-- 7i7 the base per beneficiary1 per category amounts under paragraph 7#b7 for such ,state2 and 7ii7 the national average base per beneficiary1 per category amounts under paragraph 7#d77;,a74 7,b7 ,opportunity to appeal ,not later than #c months after the date a ,state receives notice of the ,secretary's initial determination of such base per beneficiary1 per category amounts for such ,state under subparagraph 7,a77i71 the ,state may file with the ,secretary1 in a form and manner specified by the ,secretary1 an appeal of such determination4 7,c7 ,determination on appeal ,not later than #c months after receiving such an appeal1 the ,secretary shall make a final determination on such amounts for such ,state4 ,if no such appeal is received for a ,state1 the ,secretary's initial determination under subparagraph 7,a77i7 shall become final4 7#f7 ,base fiscal year defined ,in this section1 the term base fiscal year means the latest fiscal year1 ending before the date of the enactment of this section1 for which the ,secretary determines that adequate data are available to make the computations required under this subsection4 7d7 ,not counting individuals ,to account for excluded payments ,under rules specified by the ,secretary1 individuals shall not be counted as ,medicaid beneficiaries for purposes of subsection 7b77#a77;,b7 and subsection 7c77#b77;,a7 in proportion to the extent that such individuals are receiving medical assistance for which payments described under subsection 7a77#d77;,a7 are made4 7e7 ,risk ,adjustment 7#a7 ,in general ,the amount under subsection 7a77#a77;,a7 shall be adjusted under this subsection in an appropriate manner1 specified by the ,secretary and consistent with paragraph 7#b71 to take into account-- 7,a7 the factors described in subsection 7c77#b77;,c77i77,i7 within a category of beneficiaries2 and 7,b7 variations in costs on a county-by-county basis for medical assistance and administrative expenses4 7#b7 ,method of adjustment 7,a7 ,in general ,the adjustments under paragraph 7#a7 shall be made in a manner similar to the manner in which similar adjustments are made under subsection 7c77#b77;,c7 and consistent with the requirements of clause 7iii7 of such subsection and subparagraph 7,b74 7,b7 ,biannual update of risk adjustment methodology ,in applying clause 7i77,i7 of subsection 7c77#b77;,c7 for purposes of subparagraph 7,a71 the ,secretary shall1 in consultation with the entities described in clause 7ii77,i7 of such subsection1 update the risk adjustment methodology applied as appropriate not less often than every #b years4 7f7 ,chronic care quality bonus payments 7#a7 ,determination of bonus payments ,if the ,secretary determines that1 based on the reports under paragraph 7#e71 with respect to categories of chronic disease for which chronic care performance targets had been established under paragraph 7#c7 for each category of ,medicaid beneficiaries specified under subsection 7b77#b7 such targets have been met by a ,state for a reform year1 the ,secretary shall make an additional payment to such ,state in the amount specified in paragraph 7#f7 for each quarter in the succeeding reform year4 ,such payments shall be made in a manner specified by the ,secretary and may only be used consistent with subsection 7a77#c74 7#b7 ,identification of categories of chronic disease ,the ,secretary shall determine the categories of chronic disease for which bonus payments may be available under this subsection for each category of ,medicaid beneficiaries4 7#c7 ,adoption of quality measurement system and identification of performance targets 7,a7 ,system and data ,with respect to the categories of chronic disease under paragraph 7#b71 the ,secretary shall adopt a quality measurement system that uses data described in paragraph 7#d7 and is similar to the ,five-,star ,quality ,rating ,system used to indicate the performance of ,medicare ,advantage plans under part ,c of title ,,xviii4 7,b7 ,targets ,using such system and data1 the ,secretary shall establish for each reform year the chronic care performance targets for purposes of the payments under paragraph 7#a74 ,such performance targets shall be established in consultation with ,states1 associations representing individuals with chronic illnesses1 entities providing treatment to such individuals for such chronic illnesses1 and other stakeholders1 including the ,national ,association of ,medicaid ,directors and the ,national ,governors ,association4 7#d7 ,data to be used ,the data to be used under paragraph 7#c7 shall include-- 7,a7 data collected through methods such as-- 7i7 the ,healthcare ,effectiveness ,data and ,information ,set 7also known as ,,hedis7 7or an appropriate successor performance measurement tool72 7ii7 the ,consumer ,assessment of ,healthcare ,providers and ,systems 7also known as ,,cahps7 7or an appropriate successor performance measurement tool72 and 7iii7 the ,health ,outcomes ,survey 7also known as ,,hos7 7or an appropriate successor performance measurement tool72 and 7,b7 other data collected by the ,state4 7#e7 ,reports 7,a7 ,in general ,each ,state shall collect1 analyze1 and report to the ,secretary1 at a frequency and in a manner to be established by the ,secretary1 data described in paragraph 7#d7 that permit the ,secretary to monitor the ,state's performance relative to the chronic care performance targets established under paragraph 7#c74 7,b7 ,review and verification ,the ,secretary may review the data collected by the ,state under subparagraph 7,a7 to verify the ,state's analysis of such data with respect to the performance targets under paragraph 7#c74 7#f7 ,amount of bonus payments 7,a7 ,in general ,subject to subparagraphs 7,b7 and 7,c71 with respect to each category of ,medicaid beneficiaries1 in the case of a ,state that the ,secretary determines1 based on the chronic care performance targets set under paragraph 7#c7 for a reform year for such category1 performs-- 7i7 in the top five ,states in such category1 subject to subparagraph 7,c77ii71 the amount of the bonus for each quarter in the succeeding reform year shall be #aj percent of the payment amount otherwise paid to the ,state under subsection 7a7 for individuals enrolled under the plan within such category2 7ii7 in the next five ,states in such category1 subject to subparagraph 7,c77ii71 the amount of the bonus for each such quarter shall be #e percent of the payment amount otherwise paid to the ,state under subsection 7a7 for individuals enrolled under the plan within such category2 7iii7 in the next five ,states in such category1 subject to clauses 7i7 and 7iii7 of subparagraph 7,c71 the amount of the bonus for each such quarter shall be #c percent of the payment amount otherwise paid to the ,state under subsection 7a7 for individuals enrolled under the plan within such category2 7iv7 in the next five ,states in such category1 subject to clauses 7i7 and 7iii7 of subparagraph 7,c71 the amount of the bonus for each such quarter shall be #b percent of the payment amount otherwise paid to the ,state under subsection 7a7 for individuals enrolled under the plan within such category2 and 7v7 in the next five ,states in such category1 subject to clauses 7i7 and 7iii7 of subparagraph 7,c71 the amount of the bonus for each such quarter shall be #a percent of the payment amount otherwise paid to the ,state under subsection 7a7 for individuals enrolled under the plan within such category4 7,b7 ,aggregate annual limit for each category of ,medicaid beneficiaries 7i7 ,in general ,in no case may the aggregate amount of bonuses under this subsection for quarters in a reform year for a category of ,medicaid beneficiaries exceed the limit specified in clause 7ii7 for the reform year4 7ii7 ,limit ,the limit specified in this clause-- 7,i7 for the second reform year is equal to #bej1jjj1jjj2 or 7,,ii7 for a subsequent reform year is equal to the limit specified in this clause for the previous reform year increased by the per beneficiary percentage increase determined under paragraph 7#a77;,e7 of subsection 7c74 7,c7 ,limitation and proration of bonuses based on application of aggregate limit 7i7 ,no bonus for third or subsequent tiers unless aggregate limit not reached on first two tiers ,no bonus shall be payable under clause 7iii71 7iv71 or 7v7 of subparagraph 7,a7 for a category of ,medicaid beneficiaries for a quarter in a reform year unless the aggregate amount of bonuses under clauses 7i7 and 7ii7 of such subparagraph for such category and reform year is less than the limit specified in subparagraph 7,b77ii7 for the reform year4 7ii7 ,proration for first two tiers ,if the aggregate amount of bonuses under clauses 7i7 and 7ii7 of subparagraph 7,a7 for a category of ,medicaid beneficiaries for quarters in a reform year exceeds the limit specified in subparagraph 7,b77ii7 for the reform year1 the amount of each such bonus shall be prorated in a manner so the aggregate amount of such bonuses is equal to such limit4 7iii7 ,proration for next three tiers ,if the aggregate amount of bonuses under clauses 7i7 and 7ii7 of subparagraph 7,a7 for a category of ,medicaid beneficiaries for quarters in a reform year is less than the limit specified in subparagraph 7,b77ii7 for the reform year1 but the aggregate amount of bonuses under clauses 7i7 through 7v7 of subparagraph 7,a7 for the category and such quarters in the reform year exceeds the limit specified in subparagraph 7,b77ii7 for the reform year1 the amount of each bonus in clauses 7iii71 7iv71 and 7v7 of subparagraph 7,a7 shall be prorated in a manner so the aggregate amount of all the bonuses under subparagraph 7,a7 is equal to such limit4 7g7 ,state option for receiving ,medicare payments for full-,benefit dual eligible individuals 7#a7 ,in general ,under this subsection a ,state may elect for quarters beginning on or after the implementation date in a reform year to receive payment from the ,secretary under paragraph 7#c74 ,as a condition of receiving such payment1 the ,state shall agree to provide to full-benefit dual eligible individuals eligible for medical assistance under the ,state plan-- 7,a7 the medical assistance to which such eligible individuals would otherwise be entitled under this title2 and 7,b7 any items and services which such eligible individuals would otherwise receive under title ,,xviii4 7#b7 ,provider payment requirement 7,a7 ,in general ,a ,state electing the option under this subsection shall provide payment to health care providers for the items and services described under paragraph 7#a77;,b7 at a rate that is not less than the rate at which payments would be made to such providers for such items and services under title ,,xviii4 7,b7 ,flexibility in payment methods ,nothing in subparagraph 7,a7 shall be construed as preventing a ,state from using alternative payment methodologies 7such as bundled payments or the use of accountable care organizations 7as such term is used in section #ahii77 for purposes of making payments to health care providers for items and services provided to dual eligible individuals in the ,state under the option under this subsection4 7#c7 ,payments to ,states in lieu of ,medicare payments ,with respect to a full-benefit dual eligible individual1 in the case of a ,state that elects the option under paragraph 7#a7 for quarters in a reform year-- 7,a7 the ,secretary shall not make any payment under title ,,xviii for items and services furnished to such individual for such quarters2 and 7,b7 the ,secretary shall pay to the ,state1 in addition to the amounts paid to such ,state under subsection 7a71 the amount that the ,secretary would1 but for this subsection1 otherwise pay under title ,,xviii for items and services furnished to such an individual in such ,state for such quarters4 7#d7 ,full-benefit dual eligible individual defined ,in this subsection1 the term full-benefit dual eligible individual means an individual who meets the requirements of section #aice7;c77#f77;,a77ii74 7h7 ,audits ,the ,secretary shall conduct such audits on the number and classification of ,medicaid beneficiaries under such subsections and expenditures under this section as may be necessary to ensure appropriate payments under this section4 7i7 ,treatment of waivers 7#a7 ,no impact on current waivers ,in the case of a waiver of requirements of this title pursuant to section #aaae or other law that is in effect as of the date of the enactment of this section1 nothing in this section shall be construed to affect such waiver for the period of the waiver as approved as of such date4 7#b7 ,application of budget neutrality to subsequent waivers and renewals taking section into account ,in the case of a waiver of requirements of this title pursuant to section #aaae or other law that is approved or renewed after the date of the enactment of this section1 to the extent that such approval or renewal is conditioned upon a demonstration of budget neutrality1 budget neutrality shall be determined taking into account the application of this section4 7j7 ,report to ,congress ,not later than ,january #a of the second reform year1 the ,secretary shall submit to ,congress a report on the implementation of this section4 7k7 ,definitions ,in this section3 7#a7 ,implementation date ,the term implementation date means-- 7,a7 ,july #a1 #bjah1 if this section is enacted on or before ,july #a1 #bjag2 or 7,b7 ,july #a1 #bjai1 if this section is enacted after ,july #a1 #bjag4 7#b7 ,reform years 7,a7 ,the term reform year means a fiscal year beginning with the first reform year4 7,b7 ,the term first reform year means the fiscal year in which the implementation date occurs4 7,c7 ,the terms second1 third1 and successive similar terms mean1 with respect to a reform year1 the second1 third1 or successive reform year1 respectively1 succeeding the first reform year4 4 7b7 ,conforming amendments 7#a7 ,continued application of clawback provisions 7,a7 ,continued application ,subsections 7a7 and 7c77#a77;,c7 of section #aice of such ,act 7#db ,u4,s4,c4 #acifu-#e7 are each amended by inserting or #aijc;,a7a7 after #aijc7;a74 7,b7 ,technical amendment ,section #aice7;d77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifu-#e7;d77#a77 is amended by inserting except as provided in section #aijc;,a7g7 after any other provision of this title4 7#b7 ,payment rules under section #aijc 7,a7 ,section #aijc7;a7 of such ,act 7#db ,u4,s4,c4 #acif;b7a77 is amended1 in the matter before paragraph 7#a71 by inserting and section #aijc;,a after except as otherwise provided in this section4 7,b7 ,section #aijc7;d7 of such ,act 7#db ,u4,s4,c4 #acif;b7d77 is amended-- 7i7 in paragraph 7#a71 by inserting and under section #aijc;,a after subsections 7a7 and 7b72 7ii7 in paragraph 7#b7-- 7,i7 in subparagraph 7,a71 by inserting or section #aijc;,a after was made under this section2 and 7,,ii7 in subparagraph 7,b71 by inserting or section #aijc;,a after under subsection 7a72 7iii7 in paragraph 7#d7-- 7,i7 by striking under this subsection and inserting 1 with respect to this section or section #aijc;,a1 under this subsection2 and 7,,ii7 by striking under this section and inserting under the respective section2 and 7iv7 in paragraph 7#e71 by inserting or section #aijc;,a after overpayment under this section4 7#c7 ,conforming waiver authority ,section #aaae7;a77#b77;,a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acae7;a77#b77;,a77 is amended by striking or #aijc and inserting #aijc1 or #aijc;,a4 7#d7 ,report on additional conforming amendments needed ,not later than #f months after the date of the enactment of this ,act1 the ,secretary of ,health and ,human ,services shall submit to ,congress a report that includes a description of any additional technical and conforming amendments to law that are required to properly carry out this ,act4