Regular Session 2017-2018 House Bill 1354 P.N. 2151

PRIOR PRINTER'S NO. 1684

PRINTER'S NO. 2151

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1354

Session of

2017

INTRODUCED BY GROVE, McGINNIS, BARRAR, ORTITAY, WARD, PICKETT,

PHILLIPS-HILL, DUSH, NELSON, SCHEMEL, HENNESSEY, O'NEILL,

TOOHIL, EVERETT, SAYLOR, FRITZ, RYAN, DAY, WHEELAND, CUTLER,

MOUL, GILLEN AND ZIMMERMAN, MAY 9, 2017

AS REPORTED FROM COMMITTEE ON HEALTH, HOUSE OF REPRESENTATIVES,

AS AMENDED, JUNE 26, 2017

AN ACT

Amending the act of June 13, 1967 (P.L.31, No.21), entitled "An

act to consolidate, editorially revise, and codify the public

welfare laws of the Commonwealth," IN GENERAL POWERS AND

DUTIES OF THE DEPARTMENT, FURTHER PROVIDING FOR STATE

PARTICIPATION IN COOPERATIVE FEDERAL PROGRAMS; in public

assistance, further providing for income for the community

spouse, for medical assistance payments for institutional

care, for medical assistance payments for home health care,

for other medical assistance payments and for medical

assistance benefit packages and coverage, copayments,

premiums and rates; and providing for the Office of

Independent Medicaid MEDICAL ASSISTANCE Director.; AND MAKING

AN EDITORIAL CHANGE.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 441.7(a) of the act of June 13, 1967

(P.L.31, No.21), known as the Human Services Code, is amended to

read:

SECTION 1. ARTICLE II HEADING AND SECTIONS 201 AND 441.7(A)

OF THE ACT OF JUNE 13, 1967 (P.L.31, NO.21), KNOWN AS THE HUMAN

SERVICES CODE, ARE AMENDED TO READ:

ARTICLE II

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GENERAL POWERS AND DUTIES

OF THE DEPARTMENT OF [PUBLIC WELFARE] HUMAN SERVICES

SECTION 201. STATE PARTICIPATION IN COOPERATIVE FEDERAL

PROGRAMS.--THE DEPARTMENT, INCLUDING THROUGH THE OFFICE OF

INDEPENDENT MEDICAL ASSISTANCE DIRECTOR, SHALL HAVE THE POWER

AND ITS DUTIES SHALL BE:

(1) WITH THE APPROVAL OF THE GOVERNOR, TO ACT AS THE SOLE

AGENCY OF THE STATE WHEN APPLYING FOR, RECEIVING AND USING

FEDERAL FUNDS FOR THE FINANCING IN WHOLE OR IN PART OF PROGRAMS

IN FIELDS IN WHICH THE DEPARTMENT HAS RESPONSIBILITY.

(2) WITH THE APPROVAL OF THE GOVERNOR, TO DEVELOP AND SUBMIT

STATE PLANS OR OTHER PROPOSALS TO THE FEDERAL [GOVERNMENT,]

GOVERNMENT, EXCEPT AS WHERE LIMITED UNDER PARAGRAPH (2.1), TO

PROMULGATE REGULATIONS, ESTABLISH AND ENFORCE STANDARDS AND TO

TAKE SUCH OTHER MEASURES AS MAY BE NECESSARY TO RENDER THE

COMMONWEALTH ELIGIBLE FOR AVAILABLE FEDERAL FUNDS OR OTHER

ASSISTANCE. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE ACT

OF JULY 31, 1968 (P.L.769, NO.240), REFERRED TO AS THE

COMMONWEALTH DOCUMENTS LAW, THE DEPARTMENT MAY OMIT NOTICE OF

PROPOSED RULEMAKING AND PROMULGATE REGULATIONS AS FINAL WHEN A

DELAY OF THIRTY DAYS OR LESS IN THE FINAL ADOPTION OF

REGULATIONS WILL RESULT IN THE LOSS OF FEDERAL FUNDS OR WHEN A

DELAY OF THIRTY DAYS OR LESS IN ADOPTION WOULD REQUIRE THE

REPLACEMENT OF FEDERAL FUNDS WITH STATE FUNDS.

(2.1) TO DEVELOP AND SUBMIT STATE PLANS OR OTHER PROPOSALS

TO THE FEDERAL GOVERNMENT FOR MEDICAL ASSISTANCE THROUGH THE

INDEPENDENT OFFICE OF MEDICAL ASSISTANCE DIRECTOR, TO PROMULGATE

REGULATIONS, ESTABLISH AND ENFORCE STANDARDS AND TAKE OTHER

MEASURES AS MAY BE NECESSARY TO RENDER THE COMMONWEALTH ELIGIBLE

FOR AVAILABLE FEDERAL FUNDS OR OTHER ASSISTANCE. NOTWITHSTANDING

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ANY PROVISION TO THE CONTRARY IN THE ACT OF JULY 31, 1968

(P.L.769, NO.240), REFERRED TO AS THE COMMONWEALTH DOCUMENTS

LAW, THE DEPARTMENT MAY OMIT NOTICE OF PROPOSED RULEMAKING AND

PROMULGATE REGULATIONS AS FINAL WHEN A DELAY OF THIRTY DAYS OR

LESS IN THE FINAL ADOPTION OF REGULATIONS WILL RESULT IN THE

LOSS OF FEDERAL FUNDS OR WHEN A DELAY OF THIRTY DAYS OR LESS IN

ADOPTION WOULD REQUIRE THE REPLACEMENT OF FEDERAL FUNDS WITH

STATE FUNDS.

(3) TO MAKE SURVEYS AND INVENTORIES OF EXISTING FACILITIES

AND SERVICES AS REQUIRED IN CONNECTION WITH SUCH STATE PLANS,

AND TO ASSESS THE NEED FOR CONSTRUCTION, MODERNIZATION OR

ADDITIONAL SERVICES AND TO DETERMINE PRIORITIES WITH RESPECT

THERETO.

(4) TO CONDUCT INVESTIGATIONS OF ACTIVITIES RELATED TO

FRAUD, MISUSE OR THEFT OF PUBLIC ASSISTANCE MONEYS[, MEDICAL

ASSISTANCE MONEYS OR BENEFITS,] OR FEDERAL FOOD STAMPS,

COMMITTED BY ANY PERSON WHO IS OR HAS BEEN PARTICIPATING IN OR

ADMINISTERING PROGRAMS OF THE DEPARTMENT, OR BY PERSONS WHO AID

OR ABET OTHERS IN THE COMMISSION OF FRAUDULENT ACTS AFFECTING

WELFARE PROGRAMS.

(4.1) TO CONDUCT INVESTIGATIONS OF ACTIVITIES RELATED TO

FRAUD, MISUSE OR THEFT OF MEDICAL ASSISTANCE MONEYS OR BENEFIT

THROUGH THE OFFICE OF INDEPENDENT MEDICAL ASSISTANCE DIRECTOR BY

A PERSON WHO IS OR HAS BEEN PARTICIPATING IN OR ADMINISTERING

MEDICAL ASSISTANCE PROGRAMS OR BY A PERSON WHO AIDS OR ABETS

OTHERS IN THE COMMISSION OF FRAUDULENT ACTS AFFECTING MEDICAL

ASSISTANCE.

(5) TO COLLECT DATA ON ITS PROGRAMS AND SERVICES, INCLUDING

EFFORTS AIMED AT PREVENTATIVE HEALTH CARE, TO PROVIDE [THE

GENERAL ASSEMBLY WITH ADEQUATE INFORMATION] TO THE OFFICE OF

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INDEPENDENT MEDICAL ASSISTANCE DIRECTOR, WHO WILL COMPILE THE

DATA FOR USE BY THE GENERAL ASSEMBLY TO DETERMINE THE MOST COST-

EFFECTIVE ALLOCATION OF RESOURCES IN THE MEDICAL ASSISTANCE

PROGRAM.

(6) TO SUBMIT ON A [BIANNUAL] ANNUAL BASIS A REPORT PREPARED

BY THE OFFICE OF INDEPENDENT MEDICAL ASSISTANCE DIRECTOR TO THE

GENERAL ASSEMBLY REGARDING THE MEDICAL ASSISTANCE POPULATION,

WHICH SHALL INCLUDE AGGREGATE FIGURES, DELINEATED ON A MONTHLY

BASIS, FOR THE NUMBER OF INDIVIDUALS TO WHOM SERVICES WERE

PROVIDED, THE TYPE AND INCIDENCE OF SERVICES PROVIDED BY

PROCEDURE AND THE COST PER SERVICE AS WELL AS TOTAL EXPENDITURES

BY SERVICE.

Section 441.7. Income for the Community Spouse.--(a) When a

community spouse has income below the monthly maintenance needs

allowance as determined under the [department's] regulations

[and] adopted by the Office of Independent Medicaid MEDICAL

ASSISTANCE Director for the Commonwealth approved State plan

under Title XIX of the Social Security Act (49 Stat. 620, 42

U.S.C. § 1396 et seq.), the institutionalized spouse may

transfer additional resources to the community spouse only in

accordance with this section.

* * *

Section 2. Section 443.1 of the act, amended December 28,

2015 (P.L.500, No.92) and July 8, 2016 (P.L.480, No.76), is

amended to read:

Section 443.1. Medical Assistance Payments for Institutional

Care.--The following medical assistance payments shall be made

on behalf of eligible persons whose institutional care is

prescribed by physicians:

(1) Payments as determined by the [department] Office of

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Independent Medicaid MEDICAL ASSISTANCE Director for inpatient

hospital care consistent with Title XIX of the Social Security

Act (49 Stat. 620, 42 U.S.C. § 1396 et seq.). To be eligible for

such payments, a hospital must be qualified to participate under

Title XIX of the Social Security Act and have entered into a

written agreement with the [department] Office of Independent

Medicaid MEDICAL ASSISTANCE Director regarding matters

designated by the secretary as necessary to efficient

administration, such as hospital utilization, maintenance of

proper cost accounting records and access to patients' records.

Such efficient administration shall require the [department]

Office of Independent Medicaid MEDICAL ASSISTANCE Director to

permit participating hospitals to utilize the same fiscal

intermediary for this Title XIX program as such hospitals use

for the Title XVIII program.

(1.1) Subject to section 813-G, for inpatient hospital

services provided during a fiscal year in which an assessment is

imposed under Article VIII-G, payments under the medical

assistance fee-for-service program shall be determined in

accordance with the [department's] regulations adopted by the

Office of Independent Medicaid MEDICAL ASSISTANCE Director ,

except as follows:

(i) If the Commonwealth's approved Title XIX State Plan for

inpatient hospital services in effect for the period of July 1,

2010, through June 30, 2018, specifies a methodology for

calculating payments that is different from the department's

regulations or authorizes additional payments not specified in

the department's regulations, such as inpatient disproportionate

share payments and direct medical education payments, the

department shall follow the methodology or make the additional

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payments as specified in the approved Title XIX State Plan.

(ii) Subject to Federal approval of an amendment to the

Commonwealth's approved Title XIX State Plan, in making medical

assistance fee-for-service payments to acute care hospitals for

inpatient services provided on or after July 1, 2010, the

[department] Office of Independent Medicaid MEDICAL ASSISTANCE

Director shall use payment methods and standards that provide

for all of the following:

(A) Use of the All Patient Refined-Diagnosis Related Group

(APR/DRG) system for the classification of inpatient stays into

DRGs.

(B) Calculation of base DRG rates, based upon a Statewide

average cost, which are adjusted to account for a hospital's

regional labor costs, teaching status, capital and medical

assistance patient levels and such other factors as the

[department] Office of Independent Medicaid MEDICAL ASSISTANCE

Director determines may significantly impact the costs that a

hospital incurs in delivering inpatient services and which may

be adjusted based on the assessment revenue collected under

Article VIII-G.

costs of the inpatient stays either exceed or are below cost

thresholds established by the [department] Office of

Independent Medicaid MEDICAL ASSISTANCE Director .

(iii) Notwithstanding subparagraph (i), the [department]

Office of Independent Medicaid MEDICAL ASSISTANCE Director may

make additional changes to its payment methods and standards for

inpatient hospital services consistent with Title XIX of the

Social Security Act, including changes to supplemental payments

currently authorized in the State plan based on the availability

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of Federal and State funds.

(1.2) Subject to section 813-G, for inpatient acute care

hospital services provided under the physical health medical

assistance managed care program during State fiscal year 2010-

2011, the following shall apply:

(i) For inpatient hospital services provided under a

participation agreement between an inpatient acute care hospital

and a medical assistance managed care organization in effect as

of June 30, 2010, the medical assistance managed care

organization shall pay, and the hospital shall accept as payment

in full, amounts determined in accordance with the payment terms

and rate methodology specified in the agreement and in effect as

of June 30, 2010, during the term of that participation

agreement. If a participation agreement in effect as of June 30,

2010, uses the [department] fee for service DRG rate methodology

in determining payment amounts, the medical assistance managed

care organization shall pay, and the hospital shall accept as

payment in full, amounts determined in accordance with the fee

for service payment methodology in effect as of June 30, 2010,

including, without limitation, continuation of the same grouper,

outlier methodology, base rates and relative weights, during the

term of that participation agreement.

(ii) Nothing in subparagraph (i) shall prohibit payment

rates for inpatient acute care hospital services provided under

a participation agreement to change from the rates in effect as

of June 30, 2010, if the change in payment rates is authorized

by the terms of the participation agreement between the

inpatient acute care hospital and the medical assistance managed

care organization. For purposes of this act, any contract

provision that provides that payment rates and changes to

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payment rates shall be calculated based upon the department's

fee for service DRG payment methodology shall be interpreted to

mean the [department's] fee for service medical assistance DRG

methodology in place on June 30, 2010.

(iii) If a participation agreement between a hospital and a

medical assistance managed care organization terminates during a

fiscal year in which an assessment is imposed under Article

VIII-G prior to the expiration of the term of the participation

agreement, payment for services, other than emergency services,

covered by the medical assistance managed care organization and

rendered by the hospital shall be made at the rate in effect as

of the termination date, as adjusted in accordance with

subparagraphs (i) and (ii), during the period in which the

participation agreement would have been in effect had the

agreement not terminated. The hospital shall receive the

supplemental payment in accordance with subparagraph (v).

(iv) If a hospital and a medical assistance managed care

organization do not have a participation agreement in effect as

of June 30, 2010, the medical assistance managed care

organization shall pay, and the hospital shall accept as payment

in full, for services, other than emergency services, covered by

the medical assistance managed care organization and rendered

during a fiscal year in which an assessment is imposed under

Article VIII-G, an amount equal to the rates payable for the

services by the medical assistance fee for service program as of

June 30, 2010. The hospital shall receive the supplemental

payment in accordance with subparagraph (v).

(v) The [department] Office of Independent Medicaid MEDICAL

ASSISTANCE Director shall make enhanced capitation payments to

medical assistance managed care organizations if necessary

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exclusively for the purpose of making supplemental payments to

hospitals in order to promote continued access to quality care

for medical assistance recipients. Medical assistance managed

care organizations shall use the enhanced capitation payments

received pursuant to this section solely for the purpose of

making supplemental payments to hospitals and shall provide

documentation to the [department] Office of Independent Medicaid

MEDICAL ASSISTANCE Director certifying that all funds received

in this manner are used in accordance with this section. The

supplemental payments to hospitals made pursuant to this

subsection are in lieu of increased or additional payments for

inpatient acute care services from medical assistance managed

care organizations resulting from the [department's] Office of

Independent Medicaid MEDICAL ASSISTANCE Director's

implementation of payments under paragraph (1.1)(ii). Medical

assistance managed care organizations shall in no event be

obligated under this section to make supplemental or other

additional payments to hospitals that exceed the enhanced

capitation payments made to the medical assistance managed care

organization under this section. Medical assistance managed care

organizations shall not be required to advance the supplemental

payments to hospitals authorized by this subsection and shall

only make the supplemental payments to hospitals once medical

assistance managed care organizations have received the enhanced

capitation payments from the [department] Office of Independent

Medicaid MEDICAL ASSISTANCE Director .

(vi) Nothing in this subsection shall prohibit an inpatient

acute care hospital and a medical assistance managed care

organization from executing a new participation agreement or

amending an existing participation agreement on or after July 1,

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2010, in which they agree to payment terms that would result in

payments that are different than the payments determined in

accordance with subparagraphs (i), (ii), (iii) and (iv).

(1.3) Subject to section 813-G, the [department] Office of

Independent Medicaid MEDICAL ASSISTANCE Director may adjust its

capitation payments to medical assistance managed care

organizations under the physical health medical assistance

managed care program during State fiscal year 2011-2012 to

provide additional funds for inpatient hospital services to

mitigate the impact, if any, to the managed care organizations

that may result from the changes to the [department's] Office of

Independent Medicaid MEDICAL ASSISTANCE Director's payment

methods and standards specified in paragraph (1.1)(ii). If the

[department] Office of Independent Medicaid MEDICAL ASSISTANCE

Director adjusts a medical assistance managed care

organization's capitation payments pursuant to this paragraph,

the following shall apply:

(i) The medical assistance managed care organization shall

provide documentation to the [department] Office of Independent

Medicaid MEDICAL ASSISTANCE Director identifying how the

additional funds received pursuant to this subsection were used

by the medical assistance managed care organization.

(ii) If the medical assistance managed care organization

uses all of the additional funds received pursuant to this

subsection to make additional payments to hospitals, the

following shall apply:

(A) For inpatient hospital services provided under a

participation agreement between an inpatient acute care hospital

and the medical assistance managed care organization in effect

as of June 30, 2010, the medical assistance managed care

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organization shall pay, and the hospital shall accept as payment

in full, amounts determined in accordance with the payment terms

and rate methodology specified in the agreement and in effect as

of June 30, 2010, during the term of that participation

agreement. If a participation agreement in effect as of June 30,

2010, uses the [department] fee-for-service DRG rate methodology

in determining payment amounts, the medical assistance managed

care organization shall pay, and the hospital shall accept as

payment in full, amounts determined in accordance with the fee-

for-service payment methodology in effect as of June 30, 2010,

including, without limitation, continuation of the same grouper,

outlier methodology, base rates and relative weights during the

term of that participation agreement.

(B) Nothing in clause (A) shall prohibit payment rates for

inpatient acute care hospital services provided under a

participation agreement to change from the rates in effect as of

June 30, 2010, if the change in payment rates is authorized by

the terms of the participation agreement between the inpatient

acute care hospital and the medical assistance managed care

organization. For purposes of this act, any contract provision

that provides that payment rates and changes to payment rates

shall be calculated based upon the [department's] fee-for-

service DRG payment methodology shall be interpreted to mean the

department's fee-for-service medical assistance DRG methodology

in place on June 30, 2010.

enrolled in a medical assistance managed care organization that

occurs in State fiscal year 2011-2012, the medical assistance

managed care organization shall pay, and the hospital shall

accept as payment in full, the amount that the [department's]

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fee-for-service program would have paid for the discharge if the

recipient were enrolled in the [department's] fee-for-service

program and the discharge occurred on June 30, 2010.

(D) Nothing in this subparagraph shall prohibit an inpatient

acute care hospital and a medical assistance managed care

organization from executing a new participation agreement or

amending an existing participation agreement on or after July 1,

2010, in which they agree to payment terms that would result in

payments that are different from the payments determined in

accordance with clauses (A), (B) and (C).

(1.4) Subject to section 813-G, for inpatient hospital

services provided under the physical health medical assistance

managed care program during State fiscal years 2012-2013, 2013-

2014, 2014-2015, 2015-2016, 2016-2017 and 2017-2018, the

following shall apply:

(A) The [department] Office of Independent Medicaid MEDICAL

ASSISTANCE Director may adjust its capitation payments to

medical assistance managed care organizations to provide

additional funds for inpatient and outpatient hospital services.

(B) For an out-of-network inpatient discharge of a recipient

enrolled in a medical assistance managed care organization that

occurs in State fiscal year 2012-2013, 2013-2014, 2014-2015,

2015-2016, 2016-2017 and 2017-2018, the medical assistance

managed care organization shall pay, and the hospital shall

accept as payment in full, the amount that the [department's]

fee-for-service program would have paid for the discharge if the

recipient was enrolled in the [department's] fee-for-service

program.

acute care hospital and a medical assistance managed care

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organization from executing a new participation agreement or

amending an existing participation agreement on or after July 1,

2013.

(1.5) As used in paragraphs (1.2), (1.3) and (1.4), the

following terms shall have the following meanings:

(i) "Emergency services" means emergency services as defined

in section 1932(b) of the Social Security Act (49 Stat. 620, 42

U.S.C. § 1396u-2(b)(2)(B)). The term shall not include

poststabilization care services as defined in 42 CFR 438.114(a)

(1) (relating to emergency and poststabilization services).

(ii) "Medical assistance managed care organization" means a

Medicaid managed care organization as defined in section 1903(m)

(1)(a) of the Social Security Act (49 Stat. 620, 42 U.S.C. §

1396b(m)(1)(a)) that is a party to a Medicaid managed care

contract with the [department] Office of Independent Medicaid

MEDICAL ASSISTANCE Director , other than a behavioral health

managed care organization that is a party to a medical

assistance managed care contract with the [department] Office of

Independent Medicaid MEDICAL ASSISTANCE Director .

(1.6) Notwithstanding any other provision of law or

departmental regulation to the contrary, the [department] Office

of Independent Medicaid MEDICAL ASSISTANCE Director shall make

separate fee-for-service APR/DRG payments for medically

necessary inpatient acute care general hospital services

provided for normal newborn care and for mothers' obstetrical

delivery.

(2) The cost of skilled nursing and intermediate nursing

care in State-owned geriatric centers, institutions for the

mentally retarded, institutions for the mentally ill, and the

cost of skilled and intermediate nursing care provided prior to

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June 30, 2004, in county homes which meet the State and Federal

requirements for participation under Title XIX of the Social

Security Act and which are approved by the [department] Office

of Independent Medicaid MEDICAL ASSISTANCE Director . This cost

in county homes shall be as specified by the regulations of the

[department] Officer of Independent Medicaid MEDICAL ASSISTANCE

Director adopted under Title XIX of the Social Security Act and

certified to the department by the Auditor General; elsewhere

the cost shall be determined by the [department] Office of

Independent Medicaid MEDICAL ASSISTANCE Director ;

(3) Rates on a cost-related basis established by the

department for skilled nursing home or intermediate care in a

non-public nursing home, when furnished by a nursing home

licensed or approved by the department and qualified to

participate under Title XIX of the Social Security Act and

provided prior to June 30, 2004;

(4) Payments as determined by the department for inpatient

psychiatric care consistent with Title XIX of the Social

Security Act. To be eligible for such payments, a hospital must

be qualified to participate under Title XIX of the Social

Security Act and have entered into a written agreement with the

department regarding matters designated by the secretary as

necessary to efficient administration, such as hospital

utilization, maintenance of proper cost accounting records and

access to patients' records. Care in a private mental hospital

provided under the fee for service delivery system shall be

limited to thirty days in any fiscal year for recipients aged

twenty-one years or older who are eligible for medical

assistance under Title XIX of the Social Security Act and for

recipients aged twenty-one years or older who are eligible for

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general assistance-related medical assistance. Exceptions to the

thirty-day limit may be granted under section 443.3. Only

persons aged twenty-one years or under and aged sixty-five years

or older shall be eligible for care in a public mental hospital.

This cost shall be as specified by regulations of the

[department] Office of Independent Medicaid MEDICAL ASSISTANCE

Director adopted under Title XIX of the Social Security Act and

certified to the department by the Auditor General for county

and non-public institutions;

(5) After June 30, 2004, and before June 30, 2007, payments

to county and nonpublic nursing facilities enrolled in the

medical assistance program as providers of nursing facility

services shall be calculated and made as specified in the

[department's] regulations in effect on July 1, 2003, except

that if the Commonwealth's approved Title XIX State Plan for

nursing facility services in effect for the period of July 1,

2004, through June 30, 2007, specifies a methodology for

calculating county and nonpublic nursing facility payment rates

that is different than the department's regulations in effect on

July 1, 2003, the [department] Office of Independent Medicaid

MEDICAL ASSISTANCE Director shall follow the methodology in the

Federally approved Title XIX State plan.

(6) For public nursing home care provided on or after July

1, 2005, the [department] Office of Independent Medicaid MEDICAL

ASSISTANCE Director may recognize the costs incurred by county

nursing facilities to provide services to eligible persons as

medical assistance program expenditures to the extent the costs

qualify for Federal matching funds and so long as the costs are

allowable as determined by the department and reported and

certified by the county nursing facilities in a form and manner

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specified by the department. Expenditures reported and certified

by county nursing facilities shall be subject to periodic review

and verification by the department or the Auditor General.

Notwithstanding this paragraph, county nursing facilities shall

be paid based upon rates determined in accordance with

paragraphs (5) and (7).

(7) After June 30, 2007, payments to county and nonpublic

nursing facilities enrolled in the medical assistance program as

providers of nursing facility services shall be determined in

accordance with the methodologies for establishing payment rates

for county and nonpublic nursing facilities specified in the

[department's] Office of Independent Medicaid MEDICAL ASSISTANCE

Director's regulations and the Commonwealth's approved Title XIX

State Plan for nursing facility services in effect after June

30, 2007. The following shall apply:

(i) For the fiscal year 2007-2008, the [department] Office

of Independent Medicaid MEDICAL ASSISTANCE Director shall apply

a revenue adjustment neutrality factor and make adjustments to

county and nonpublic nursing facility payment rates for medical

assistance nursing facility services. The revenue adjustment

factor shall limit the estimated aggregate increase in the

Statewide day-weighted average payment rate over the three-year

period commencing July 1, 2005, and ending June 30, 2008, from

the Statewide day-weighted average payment rate for medical

assistance nursing facility services in fiscal year 2004-2005 to

6.912% plus any percentage rate of increase permitted by the

amount of funds appropriated for nursing facility services in

the General Appropriation Act of 2007. Application of the

revenue adjustment neutrality factor shall be subject to Federal

approval of any amendments as may be necessary to the

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Commonwealth's approved Title XIX State Plan for nursing

facility services.

(ii) The [department] Office of Independent Medicaid MEDICAL

ASSISTANCE Director may make additional changes to its

methodologies for establishing payment rates for county and

nonpublic nursing facilities enrolled in the medical assistance

program consistent with Title XIX of the Social Security Act,

except that if during a fiscal year an assessment is implemented

under Article VIII-A, the department shall not make a change

under this subparagraph unless it adopts regulations as provided

under section 814-A.

(iii) Subject to Federal approval of such amendments as may

be necessary to the Commonwealth's approved Title XIX State

Plan, the department shall do all of the following:

(A) For each fiscal year between July 1, 2008, and June 30,

2011, the department shall apply a revenue adjustment neutrality

factor to county and nonpublic nursing facility payment rates.

For each such fiscal year, the revenue adjustment neutrality

factor shall limit the estimated aggregate increase in the

Statewide day-weighted average payment rate so that the

aggregate percentage rate of increase for the period that begins

on July 1, 2005, and ends on the last day of the fiscal year is

limited to the amount permitted by the funds appropriated by the

General Appropriations Act for those fiscal years.

(B) In calculating rates for nonpublic nursing facilities

for fiscal year 2008-2009, the department shall continue to

include costs incurred by county nursing facilities in the rate-

setting database, as specified in the department's regulations

in effect on July 1, 2007.

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the use of county nursing facility costs as an input in the

process of setting payment rates of nonpublic nursing

facilities. The final regulations shall be effective July 1,

2009, and shall phase out the use of these costs in rate-setting

over a period of three rate years, beginning fiscal year 2009-

2010 and ending on June 30, 2012.

(D) The department shall propose regulations that establish

minimum occupancy requirements as a condition for bed-hold

payments. The final regulations shall be effective July 1, 2009,

and shall phase in these requirements over a period of two rate

years, beginning fiscal year 2009-2010.

(iv) Subject to Federal approval of such amendments as may

be necessary to the Commonwealth's approved Title XIX State

Plan, for each fiscal year beginning on or after July 1, 2011,

the [department] Office of Independent Medicaid MEDICAL

ASSISTANCE Director shall apply a revenue adjustment neutrality

factor to county and nonpublic nursing facility payment rates so

that the estimated Statewide day-weighted average payment rate

in effect for that fiscal year is limited to the amount

permitted by the funds appropriated by the General Appropriation

Act for the fiscal year. The revenue adjustment neutrality

factor shall remain in effect until the sooner of June 30, 2019,

or the date on which a new rate-setting methodology for medical

assistance nursing facility services which replaces the rate-

setting methodology codified in 55 Pa. Code Chs. 1187 (relating

to nursing facility services) and 1189 (relating to county

nursing facility services) takes effect.

(v) Subject to Federal approval of such amendments as may be

necessary to the Commonwealth's approved Title XIX State Plan,

for fiscal year 2013-2014, the [department] Office of

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Independent Medicaid MEDICAL ASSISTANCE Director shall make

quarterly medical assistance day-one incentive payments to

qualified nonpublic nursing facilities. The [department] Office

of Independent Medicaid MEDICAL ASSISTANCE Director shall

determine the nonpublic nursing facilities that qualify for the

quarterly medical assistance day-one incentive payments and

calculate the payments using the total Pennsylvania medical

assistance (PA MA) days and total resident days as reported by

nonpublic nursing facilities under Article VIII-A. The

[department's] Office of Independent Medicaid MEDICAL ASSISTANCE

Director's determination and calculations under this

subparagraph shall be based on the nursing facility assessment

quarterly resident day reporting forms available on October 31,

January 31, April 30 and July 31. The [department] Office of

Independent Medicaid MEDICAL ASSISTANCE Director shall not

retroactively revise a medical assistance day-one incentive

payment amount based on a nursing facility's late submission or

revision of its report after these dates. The [department]

Office of Independent Medicaid MEDICAL ASSISTANCE Director ,

however, may recoup payments based on an audit of a nursing

facility's report. The following shall apply:

(A) A nonpublic nursing facility shall meet all of the

following criteria to qualify for a medical assistance day-one

incentive payment:

(I) The nursing facility shall have an overall occupancy

rate of at least 85% during the resident day quarter. For

purposes of determining a nursing facility's overall occupancy

rate, a nursing facility's total resident days, as reported by

the facility under Article VIII-A, shall be divided by the

product of the facility's licensed bed capacity, at the end of

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the quarter, multiplied by the number of calendar days in the

quarter.

(II) The nursing facility shall have a medical assistance

occupancy rate of at least 65% during the resident day quarter.

For purposes of determining a nursing facility's medical

assistance occupancy rate, the nursing facility's total PA MA

days shall be divided by the nursing facility's total resident

days, as reported by the facility under Article VIII-A.

(III) The nursing facility shall be a nonpublic nursing

facility for a full resident day quarter prior to the applicable

quarterly reporting due dates of October 31, January 31, April

30 and July 31.

(B) The [department] Office of Independent Medicaid MEDICAL

ASSISTANCE Director shall calculate a qualified nonpublic

nursing facility's medical assistance day-one incentive

quarterly payment as follows:

(I) The total funds appropriated for payments under this

subparagraph shall be divided by four.

(II) To establish the quarterly per diem rate, the amount

under subclause (I) shall be divided by the total PA MA days, as

reported by all qualifying nonpublic nursing facilities under

Article VIII-A.

(III) To determine a qualifying nonpublic nursing facility's

quarterly medical assistance day-one incentive payment, the

quarterly per diem rate shall be multiplied by a nonpublic

nursing facility's total PA MA days, as reported by the facility

under Article VIII-A.

the nonpublic nursing facility medical assistance day-one

incentive payments shall equal eight million dollars

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($8,000,000).

(vi) Subject to Federal approval of such amendments as may

be necessary to the Commonwealth's approved Title XIX State

Plan, for fiscal years 2015-2016 and 2016-2017, the [department]

Office of Independent Medicaid MEDICAL ASSISTANCE Director shall

make up to four medical assistance day-one incentive payments to

qualified nonpublic nursing facilities. The department shall

determine the nonpublic nursing facilities that qualify for the

medical assistance day-one incentive payments and calculate the

payments using the total Pennsylvania medical assistance (PA MA)

days and total resident days as reported by nonpublic nursing

facilities under Article VIII-A. The department's determination

and calculations under this subparagraph shall be based on the

nursing facility assessment quarterly resident day reporting

forms, as determined by the department. The department shall not

retroactively revise a medical assistance day-one incentive

payment amount based on a nursing facility's late submission or

revision of the department's report after the dates designated

by the department. The department, however, may recoup payments

based on an audit of a nursing facility's report. The following

shall apply:

(A) A nonpublic nursing facility shall meet all of the

following criteria to qualify for a medical assistance day-one

incentive payment:

(I) The nursing facility shall have an overall occupancy

rate of at least eighty-five percent during the resident day

quarter. For purposes of determining a nursing facility's

overall occupancy rate, a nursing facility's total resident

days, as reported by the facility under Article VIII-A, shall be

divided by the product of the facility's licensed bed capacity,

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at the end of the quarter, multiplied by the number of calendar

days in the quarter.

(II) The nursing facility shall have a medical assistance

occupancy rate of at least sixty-five percent during the

resident day quarter. For purposes of determining a nursing

facility's medical assistance occupancy rate, the nursing

facility's total PA MA days shall be divided by the nursing

facility's total resident days, as reported by the facility

under Article VIII-A.

(III) The nursing facility shall be a nonpublic nursing

facility for a full resident day quarter prior to the applicable

quarterly reporting due dates, as determined by the department.

(B) The department shall calculate a qualified nonpublic

nursing facility's medical assistance day-one incentive payment

as follows:

(I) The total funds appropriated for payments under this

subparagraph shall be divided by the number of payments, as

determined by the department.

(II) To establish the per diem rate for a payment, the

amount under subclause (I) shall be divided by the total PA MA

days, as reported by all qualifying nonpublic nursing facilities

under Article VIII-A for that payment.

(III) To determine a qualifying nonpublic nursing facility's

medical assistance day-one incentive payment, the per diem rate

calculated for the payment shall be multiplied by a nonpublic

nursing facility's total PA MA days, as reported by the facility

under Article VIII-A for the payment.

funds available for the nonpublic nursing facility medical

assistance day-one incentive payments shall equal eight million

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dollars ($8,000,000).

(8) As a condition of participation in the medical

assistance program, before any county or nonpublic nursing

facility increases the number of medical assistance certified

beds in its facility or in the medical assistance program,

whether as a result of an increase in beds in an existing

facility or the enrollment of a new provider, the facility must

seek and obtain advance written approval of the increase in

certified beds from the department. The following shall apply:

(i) Before July 1, 2009, the department shall propose

regulations that would establish the process and criteria to be

used to review and respond to requests for increases in medical

assistance certified beds, including whether an increase in the

number of certified beds is necessary to assure that long-term

living care and services under the medical assistance program

will be provided in a manner consistent with applicable Federal

and State law, including Title XIX of the Social Security Act.

(ii) Pending adoption of regulations, a nursing facility's

request for advance written approval for an increase in medical

assistance certified beds shall be submitted and reviewed in

accordance with the process and guidelines contained in the

statement of policy published in 28 Pa.B. 138.

(iii) The [department] Office of Independent Medicaid

MEDICAL ASSISTANCE Director may publish amendments to the

statement of policy if the department determines that changes to

the process and guidelines for reviewing and responding to

requests for approval of increases in medical assistance

certified beds will facilitate access to medically necessary

nursing facility services or are required to assure that long-

term living care and services under the medical assistance

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program will be provided in a manner consistent with applicable

Federal and State law, including Title XIX of the Social

Security Act. The [department] Office of Independent Medicaid

MEDICAL ASSISTANCE Director shall publish the proposed

amendments in the Pennsylvania Bulletin and solicit public

comments for thirty days. After consideration of the comments it

receives, the [department] Office of Independent Medicaid

MEDICAL ASSISTANCE Director may proceed to adopt the amendments

by publishing an amended statement of policy in the Pennsylvania

Bulletin which shall include its responses to the public

comments that it received concerning the proposed amendments.

Section 3. Section 443.2 of the act is amended to read:

Section 443.2. Medical Assistance Payments for Home Health

Care.--The following medical assistance payments shall be made

in behalf of eligible persons whose care in the home has been

prescribed by a physician, chiropractor or podiatrist:

(1) Rates established by the [department] Office of

Independent Medicaid MEDICAL ASSISTANCE Director for post-

hospital home care, as specified by regulations of the

[department] Office of Independent Medicaid MEDICAL ASSISTANCE

Director adopted under Title XIX of the Federal Social Security

Act for not more than one hundred eighty days following a period

of hospitalization, if such care is related to the reason the

person was hospitalized and if given by a hospital as

comprehensive, hospital type care in a patient's home;

(2) Rates established by the [department] Office of

Independent Medicaid MEDICAL ASSISTANCE Director for home health

care services if such services are furnished by a voluntary or

governmental health agency.

Section 4. Section 443.3 of the act, amended December 28,

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2015 (P.L.500, No.92), is amended to read:

Section 443.3. Other Medical Assistance Payments.--(a)

Payments on behalf of eligible persons shall be made for other

services, as follows:

(1) Rates established by the [department] Office of

Independent Medicaid MEDICAL ASSISTANCE Director for outpatient

services as specified by regulations of the department adopted

under Title XIX of the Social Security Act (49 Stat. 620, 42

U.S.C. § 1396 et seq.) consisting of preventive, diagnostic,

therapeutic, rehabilitative or palliative services; furnished by

or under the direction of a physician, chiropractor or

podiatrist, by a hospital or outpatient clinic which qualifies

to participate under Title XIX of the Social Security Act, to a

patient to whom such hospital or outpatient clinic does not

furnish room, board and professional services on a continuous,

twenty-four hour a day basis.

(1.1) Rates established by the [department] Office of

Independent Medicaid MEDICAL ASSISTANCE Director for observation

services provided by or furnished under the direction of a

physician and furnished by a hospital. Payment for observation

services shall be made in an amount specified by the

[department] Office of Independent Medicaid MEDICAL ASSISTANCE

Director by notice in the Pennsylvania Bulletin and shall be

effective for dates of service on or after July 1, 2016. Payment

for observation services shall be subject to conditions

specified in the [department's] Office of Independent Medicaid

MEDICAL ASSISTANCE Director regulations, including regulations

adopted by the [department] Office of Independent Medicaid

MEDICAL ASSISTANCE Director to implement this paragraph. Pending

adoption of regulations implementing this paragraph, the

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conditions for payment of observation services shall be

specified in a medical assistance bulletin.

(2) Rates established by the [department] Office of

Independent Medicaid MEDICAL ASSISTANCE Director for (i) other

laboratory and X-ray services prescribed by a physician,

chiropractor or podiatrist and furnished by a facility other

than a hospital which is qualified to participate under Title

XIX of the Social Security Act, (ii) physician's services

consisting of professional care by a physician, chiropractor or

podiatrist in his office, the patient's home, a hospital, a

nursing facility or elsewhere, (iii) the first three pints of

whole blood, (iv) remedial eye care, as provided in Article VIII

consisting of medical or surgical care and aids and services and

other vision care provided by a physician skilled in diseases of

the eye or by an optometrist which are not otherwise available

under this Article, (v) special medical services for school

children, as provided in the Public School Code of 1949,

consisting of medical, dental, vision care provided by a

physician skilled in diseases of the eye or by an optometrist or

surgical care and aids and services which are not otherwise

available under this article.

(3) Notwithstanding any other provision of law, for

recipients aged twenty-one years or older receiving services

under the fee for service delivery system who are eligible for

medical assistance under Title XIX of the Social Security Act

and for recipients aged twenty-one years or older receiving

services under the fee-for-service delivery system who are

eligible for general assistance-related categories of medical

assistance, the following medically necessary services:

(i) Psychiatric outpatient clinic services not to exceed

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five hours or ten one-half-hour sessions per thirty consecutive

day period.

(ii) Psychiatric partial hospitalization not to exceed five

hundred forty hours per fiscal year.

(b) The [department] Office of Independent Medicaid MEDICAL

ASSISTANCE Director may grant exceptions to the limits specified

in this section, section 443.1(4) or the department's

regulations when any of the following circumstances applies:

(1) The [department] Office of Independent Medicaid MEDICAL

ASSISTANCE Director determines that the recipient has a serious

chronic systemic illness or other serious health condition and

denial of the exception will jeopardize the life of or result in

the rapid, serious deterioration of the health of the recipient.

(2) The [department] Office of Independent Medicaid MEDICAL

ASSISTANCE Director determines that granting a specific

exception to a limit is a cost-effective alternative for the

medical assistance program.

(3) The [department] Office of Independent Medicaid MEDICAL

ASSISTANCE Director determines that granting an exception to a

limit is necessary in order to comply with Federal law.

Medicaid MEDICAL ASSISTANCE Director shall promulgate

regulations pursuant to section 204(1)(iv) of the act of July

31, 1968 (P.L.769, No.240), referred to as the Commonwealth

Documents Law, to implement this section. Notwithstanding any

other provision of law, the promulgation of regulations under

this subsection shall, until December 31, 2005, be exempt from

all of the following:

(1) Section 205 of the Commonwealth Documents Law.

(2) Section 204(b) of the act of October 15, 1980 (P.L.950,

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No.164), known as the "Commonwealth Attorneys Act."

(3) The act of June 25, 1982 (P.L.633, No.181), known as the

"Regulatory Review Act."

Section 5. Section 454(a) and (c) of the act are amended to

read:

Section 454. Medical Assistance Benefit Packages; Coverage,

Copayments, Premiums and Rates.--(a) Notwithstanding any other

provision of law to the contrary, the [department] Office of

Independent Medicaid MEDICAL ASSISTANCE Director shall

promulgate regulations as provided in subsection (b) to

establish provider payment rates; the benefit packages and any

copayments for adults eligible for medical assistance under

Title XIX of the Social Security Act (49 Stat 620, 42 U.S.C. §

1396 et seq.) and adults eligible for medical assistance in

general assistance-related categories; and the premium or

copayment requirements for disabled children whose family income

is above two hundred percent of the Federal poverty income

limit. Subject to such Federal approval as may be necessary, the

regulations shall authorize and describe the available benefit

packages and any copayments and premiums, except that the

[department] Office of Independent Medicaid MEDICAL ASSISTANCE

Director shall set forth the copayment and premium schedule for

disabled children whose family income is above two hundred

percent of the Federal poverty income limit by publishing a

notice in the Pennsylvania Bulletin. The [department] Office of

Independent Medicaid MEDICAL ASSISTANCE Director may adjust such

copayments and premiums for disabled children by notice

published in the Pennsylvania Bulletin. The regulations shall

also specify the effective date for provider payment rates.

* * *

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ASSISTANCE Director is authorized to grant exceptions to any

limits specified in the benefit packages adopted under this

section or when any of the following circumstances applies:

(1) The [department] Office of Independent Medicaid MEDICAL

ASSISTANCE Director determines the recipient has a serious

chronic systemic illness or other serious health condition and

denial of the exception will jeopardize the life of or result in

the rapid, serious deterioration of the health of the recipient.

(2) The [department] Office of Independent Medicaid MEDICAL

ASSISTANCE Director determines that granting a specific

exception to a limit is a cost-effective alternative for the

medical assistance program.

(3) The department determines that granting an exception to

a limit is necessary in order to comply with Federal law.

* * *

Section 6. The act is amended by adding an article to read:

ARTICLE IV-A

OFFICE OF INDEPENDENT MEDICAID MEDICAL ASSISTANCE DIRECTOR

Section 401-A. Declaration of purpose.

The General Assembly finds and declares that the intent of

this article is to ensure that the Commonwealth's current

Medicaid MEDICAL ASSISTANCE programs provide all of the

following:

(1) Budget stability and predictability through defined

outcomes, performance and accountability.

(2) A balance of quality, patient satisfaction,

financial measures and self-sufficiency.

(3) The most efficient and cost-effective services,

administrative systems and structures.

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(4) A sustainable and uniform delivery system across the

Commonwealth's departments and agencies.

(5) Services are offered to assist recipients attain

independence or self-care.

Section 402-A. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"COMMONWEALTH AGENCY." A STATE AGENCY, DEPARTMENT, BOARD,

OFFICE, BUREAU, DIVISION, COMMITTEE OR COUNCIL.

"Director." The Director of the Office of Independent

Medicaid MEDICAL ASSISTANCE Director.

"Medicaid program." A State program or funding source which

is connected, whether by funding or approval, to the Centers for

Medicare and Medicaid Services of the United States Department

of Health and Human Services.

Section 403-A. Office of Independent Medicaid MEDICAL

ASSISTANCE Director.

(A) ESTABLISHMENT.-- The Office of Independent Medicaid

MEDICAL ASSISTANCE Director is established within the department

for budgetary purposes.

(B) EMPLOYEES.--EMPLOYEES OF ANY COMMONWEALTH AGENCY WHO

OPERATE AND ADMINISTER MEDICAL ASSISTANCE PROGRAMS PRIOR TO THE

EFFECTIVE DATE OF THIS SECTION SHALL BE TRANSFERRED TO THE

OFFICE OF INDEPENDENT MEDICAL ASSISTANCE DIRECTOR AT THE

DISCRETION OF THE DIRECTOR. THE FUNDS THAT PAY FOR THE SALARIES

OF THE EMPLOYEES TRANSFERRED UNDER THIS SECTION SHALL BE PAID

OUT OF THE ENCUMBERED FUNDS OF THE AGENCY FROM WHICH THE

EMPLOYEE WAS TRANSFERRED.

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REGARDING THE OPERATION OF THE COMMONWEALTH'S MEDICAL ASSISTANCE

PROGRAMS SHALL BE TRANSFERRED INTO A RESTRICTED ACCOUNT IN THE

GENERAL FUND IN ACCORDANCE WITH THE FOLLOWING:

(1) MONEY FROM THE RESTRICTED ACCOUNT MAY BE TRANSFERRED

ONLY UPON THE APPROVAL OF THE DIRECTOR OR THE DIRECTOR'S

DESIGNEE, AS PRESCRIBED UNDER THIS ARTICLE.

(2) THE DIRECTOR SHALL COORDINATE PAYMENTS FROM THE

COMMONWEALTH'S MEDICAL ASSISTANCE PROGRAMS WITH THE STATE

TREASURER TO OPTIMIZE THE COMMONWEALTH'S CASH FLOW WITHIN THE

GENERAL FUND AND TOTAL OPERATING BUDGET.

Section 404-A. Director of the Office of Independent Medicaid

MEDICAL ASSISTANCE Director.

(a) Appointment.--The Governor shall appoint the Director of

the Office of Independent Medicaid Director DIRECTOR from the

list submitted by the Selection and Organization Committee under

subsection (c) for a term of six years and subject to

confirmation by the Senate. The initial term of office for the

director shall commence upon confirmation by the Senate and

shall expire June 30, 2022. After June 30, 2022, the term of

office for the director shall be four SIX years and shall

commence on July 1 after the date of confirmation. A DIRECTOR

MAY SERVE MORE THAN ONE TERM IF SELECTED BY THE SELECTION AND

ORGANIZATION COMMITTEE.

(b) Committee.--The Selection and Organization Committee is

established for the purpose of comprising a list of potential

nominees for director. The committee shall consist of the

following:

(1) The chair and minority chair of the Appropriations

Committee of the Senate and the chair and minority chair of

the Appropriations Committee of the House of Representatives.

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(2) The Majority Leader and the Minority Leader of the

Senate and the Majority Leader and the Minority Leader of the

House of Representatives.

(3) The President pro tempore of the Senate and the

Speaker of the House of Representatives.

(5) The chair and minority chair of the Health and Human

Services Committee of the Senate.

(6) The chair and minority chair of the Health Committee

of the House of Representatives.

(1) The Selection and Organization Committee shall

submit no more than three potential nominees to the Governor

within 30 days of a vacancy.

(2) The Governor shall submit a nominee from the list

submitted under paragraph (1) for director to the Senate for

confirmation no later than May 1 of the year when the term of

office expires.

(3) If the Governor fails to submit a nominee under

paragraph (2) by May 1 of the year when the term of office

expires, the President pro tempore of the Senate and the

Speaker of the House of Representatives shall jointly submit

a nominee to the Senate on or before May 15 of the same year

by resolution. The resolution shall include all of the

following:

(i) The name of the nominee.

(ii) The effective date of the appointment.

(iii) The date of expiration of the term of office.

(iv) The residence of the nominee.

(v) A clause providing that the nominee is submitted

upon joint recommendation of the President pro tempore of

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the Senate and the Speaker of the House of

Representatives.

(4) If a nominee for director is not confirmed within 30

days of submission to the Senate, a new nominee for director

shall be submitted to the Senate.

(d) Vacancy.--The following shall apply if the position of

director is vacant:

(1) If the vacancy occurs before the director's term of

office expires, the Governor shall submit a nominee from the

list submitted by the Selection and Organization Committee

under subsection (c) for director to the Senate no later than

60 days after the vacancy occurs.

(2) If the vacancy occurs when the General Assembly is

not in session, the Governor shall appoint an acting director

to serve the remainder of the unexpired term UNTIL SUCH TIME

AS THE GENERAL ASSEMBLY HAS RECONVENED . An acting director

may not serve for more than three months without confirmation

by the Senate .

(3) IF NO DIRECTOR HAS BEEN APPROVED WITHIN 3 MONTHS OF

A VACANCY, A NEW DIRECTOR SHALL BE APPOINTED IN ACCORDANCE

WITH PARAGRAPH (1).

(E) REMOVAL.--THE GOVERNOR MAY REMOVE THE DIRECTOR ONLY IF

THE DIRECTOR HAS COMMITTED A BREACH OF PUBLIC TRUST OR VIOLATED

THE LAWS OF THIS COMMONWEALTH.

Section 405-A. Powers and duties of director.

The director shall have the following powers and duties:

(1) Administering Medicaid MEDICAL ASSISTANCE programs

in a manner in which the total expenditures, net of agency

receipts, do not exceed the authorized budget for the

Medicaid MEDICAL ASSISTANCE programs.

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(2) Employing clerical and professional staff for the

Office of Independent Medicaid MEDICAL ASSISTANCE Director,

including consultants, actuaries and legal counsel, for the

purpose of administering Medicaid MEDICAL ASSISTANCE

programs. The director may offer employment contracts for

specified terms and set compensation for the employees, which

may include performance-based bonuses based on meeting budget

or other targets.

(3) Notwithstanding any other provisions of law,

entering into and managing contracts for the administration

of Medicaid MEDICAL ASSISTANCE programs, which shall include

all of the following:

(i) Expected outcomes to improve the health and

well-being of residents of this Commonwealth.

(ii) Value-based purchasing.

(iii) The use of evidence-based programs.

(iv) Performance incentives for exceeding outcomes.

THE DEVELOPMENT OF MEDICAL HOMES.

(v) Uniformed coordination of services.

(vi) Cost containment provisions.

(vii) Maximizing the amount of Federal funds.

(VIII) RECOMMENDATIONS FOR IDENTIFYING COST SAVINGS

WITHIN MEDICAL ASSISTANCE PROGRAMS.

(4) Establishing and adjusting all components of

Medicaid MEDICAL ASSISTANCE programs within the appropriated

and allocated budget.

(5) Adopting rules and regulations relating to Medicaid

MEDICAL ASSISTANCE programs in accordance with Executive

Order 1996-1.

(6) Developing mid-year budget correction plans and

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strategies and taking mid-year budget corrective actions as

necessary to keep Medicaid MEDICAL ASSISTANCE programs within

budget.

(7) Approving or disapproving and overseeing all

expenditures to be allocated to Medicaid MEDICAL ASSISTANCE

programs.

(8) Developing and providing to the Office of the

Budget, the Appropriations Committee of the Senate and , the

Appropriations Committee of the House of Representatives AND

THE INDEPENDENT FISCAL OFFICE by January 1, 2018, and each

year thereafter, the following information about Medicaid

MEDICAL ASSISTANCE programs:

(i) A detailed four-year forecast of expected

changes to enrollment growth and enrollment demographics.

(ii) Changes that will be implemented by the

department in order to stay within the existing budget

based on the next fiscal year's forecasted enrollment

growth and enrollment demographics.

(iii) The cost to maintain the current level of

services based on the next fiscal year's forecasted

enrollment growth and enrollment demographics.

(9) Creating a publicly accessible Internet website for

the Office of Independent Medicaid MEDICAL ASSISTANCE

Director and updating the website on at least a monthly basis

with the following information about the Medicaid M EDICAL

ASSISTANCE programs:

(i) Enrollment by Medicaid MEDICAL ASSISTANCE

program aid category by county.

(ii) Per member, per month spending by category of

service.

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(iii) Spending and receipts by fund, including a

detailed variance analysis.

(iv) A comparison of the figures specified under

subparagraphs (i), (ii) and (iii) to the amounts

forecasted and budgeted for the corresponding time

period.

(10) Developing performance measures and outcomes for

programs under the director's jurisdiction and programs which

are billed against Medicaid M EDICAL ASSISTANCE programs.

(11) Making ANNUAL recommendations to the Governor and

the General Assembly to streamline programs to provide better

services for residents of this Commonwealth at a lower cost

to taxpayers WHO RESIDE WITHIN THIS COMMONWEALTH .

(12) Serving at the pleasure of the residents of this

Commonwealth in an independent manner.

(13) Developing and implementing policies to address

excessive utilization of health care services.

(14) Ensuring that services are coordinated throughout

Commonwealth agencies, including physical health, behavioral

health, long-term services and supports and third-party

insurances.

Section 406-A. Amendments to State plan for Medicaid MEDICAL

ASSISTANCE programs.

(A) AUTHORITY.--THE DIRECTOR SHALL HAVE THE SOLE AUTHORITY

TO MANAGE ALL M EDICAL ASSISTANCE PROGRAMS IN THE COMMONWEALTH,

INCLUDING, BUT NOT LIMITED TO, BEING THE SOLE AUTHORITY FOR

SUBMITTING AN AMENDMENT TO THE STATE'S PLAN UNDER TITLE XIX OF

THE SOCIAL SECURITY ACT (49 STAT. 620, 42 U.S.C. § 1396 ET SEQ.)

TO THE CENTERS FOR MEDICARE AND MEDICAID SERVICES OFFERED UNDER

ANY OF THE COMMONWEALTH'S MEDICAL ASSISTANCE PROGRAMS.

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(a) (B) Amendments.--The director may take all necessary

action to amend the State plan for Medicaid M EDICAL ASSISTANCE

programs in order to keep Medicaid M EDICAL ASSISTANCE programs

within the certified budget, including State plan amendments,

waivers and waiver amendments.

(b) (C) Submission.--An amendment to the State plan for

Medicaid M EDICAL ASSISTANCE programs shall be submitted by the

director in accordance with the following:

(1) A law of this Commonwealth mandating that the

director submit an amendment to the State plan for Medicaid

M EDICAL ASSISTANCE programs.

(2) A law of this Commonwealth which changes Medicaid

M EDICAL ASSISTANCE programs and requires approval from the

Federal Government.

(3) A change in Federal law which requires an amendment

to the State plan for Medicaid M EDICAL ASSISTANCE programs.

(4) An order of a court of competent jurisdiction if the

amendment to the State plan for Medicaid M EDICAL ASSISTANCE

programs is necessary to implement the order.

(5) In a manner as required to maintain Federal funding

for Medicaid M EDICAL ASSISTANCE programs.

amendment to the State plan for Medicaid MEDICAL ASSISTANCE

programs to the Federal Government, the director shall post the

amendment on the Office of Independent Medicaid MEDICAL

ASSISTANCE Director's publicly accessible Internet website and

notify the members of the General Assembly and the Independent

Fiscal Office that the amendment has been posted. The notice

requirement under this subsection shall not apply to a draft or

proposed amendment submitted to the Federal Government for

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comments and not for approval.

Section 407-A. Use of funds.

The Office of Independent Medicaid MEDICAL ASSISTANCE

Director shall use encumbered funds appropriated to the

department to implement this article.

Section 408-A. Legislative oversight powers.

The Appropriations Committee of the Senate and the

Appropriations Committee of House of Representatives, while in

discharge of official duties, shall have access to any document

and may compel the attendance of an employee or secure any

evidence.

Section 409-A. Duties of Commonwealth agencies.

The following shall apply:

(1) A Commonwealth agency shall not interfere with the

duties of the director or withhold information requested by

the director.

(2) A Commonwealth agency shall coordinate with the

director to ensure the residents of this Commonwealth have a

continuity of care.

SECTION 410-A. REGULATIONS.

THE OFFICE OF INDEPENDENT MEDICAL ASSISTANCE DIRECTOR SHALL

PROMULGATE REGULATIONS.

Section 410-A 411-A . Construction.

Nothing in this article shall MAY be construed to limit the

budget authority of the Office of the Budget under Article VI of

the act of April 9, 1929 (P.L.177, No.175), known as The

Administrative Code of 1929.

Section 7. All acts and parts of acts are repealed insofar

as they are inconsistent with this act.

Section 8. This act shall take effect July 1, 2017, or

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immediately, whichever is later.

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