text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Medicaid and CHIP Quality 
  Improvement Act of 2016''.
  
  SEC. 2. FINDINGS.
  
      Congress finds the following:
              (1) Despite the fact that Federal and State governments 
          spend hundreds of billions of dollars every year on care for 
          Americans through the Medicaid and CHIP programs, there is no 
          nationwide, systematic method of reporting, collecting, 
          evaluating, or improving the quality of care across all payment 
          and delivery systems (fee-for-service, managed care, primary 
          care case management, or other mechanisms).
              (2) Although the quality of care delivered through Medicaid 
          health plans is frequently measured, there is no method or 
          mechanism to systematically improve the quality of care 
          provided to all Medicaid and CHIP beneficiaries.
              (3) For the majority of Medicaid and CHIP enrollees who are 
          served by primary care case management or fee-for-service 
          arrangements, there are no Federal requirements for comparable 
          quality monitoring or improvement. Thus there currently is no 
          ability to make fair assessments across all modes of care for 
          Medicaid and CHIP enrollees.
              (4) State flexibility and the resulting opportunities for 
          innovation are hallmarks of the partnership between Federal and 
          State governments in the Medicaid and CHIP programs. Without a 
          way to systematically measure quality, however, policymakers 
          cannot know which innovations are the most effective.
  
  SEC. 3. MEASURING AND REPORTING ON COMPARABLE HEALTH CARE QUALITY 
                MEASURES FOR ALL PERSONS ENROLLED IN MEDICAID.
  
      (a) Quality Assurance Standards.--Section 1932(c)(1)(A) of the 
  Social Security Act (42 U.S.C. 1396u-2(c)(1)(A)) is amended by 
  inserting ``or comparable primary care case management services 
  providers described in section 1905(t) as well as health care services 
  furnished in fee-for-service settings or other delivery systems'' after 
  ``1903(m)''.
      (b) Adult Health Quality Measures.--Section 1139B of the Social 
  Security Act (42 U.S.C. 1320b-9b) is amended--
              (1) in subsection (b)--
                      (A) by redesignating paragraphs (4) and (5) as 
                  paragraphs (5) and (6), respectively; and
                      (B) by inserting after paragraph (3), the 
                  following:
              ``(4) Quality reporting for medicaid eligible adults.--
          Beginning not later than January 1 of the calendar year that 
          begins on or after the date that is 2 years after the date of 
          enactment of the Medicaid and CHIP Quality Improvement Act of 
          2016, and annually thereafter, the Secretary shall require 
          States to use the measures and approaches identified in 
          paragraph (3) to report on the initial core set of quality 
          measures for Medicaid eligible adults identified in paragraph 
          (2), subject to revisions made in accordance with paragraph 
          (6)(B). Such reporting shall be stratified by delivery system, 
          including managed care organizations under section 1932, 
          benchmark plans under section 1937, primary care case 
          management services providers described in section 1905(t), 
          health care services in fee-for-service settings, and other 
          delivery systems, except that the Secretary may determine that 
          reporting on certain measures should not be stratified by 
          delivery system because such stratification would not be 
          feasible or the delivery systems are not comparable with 
          respect to the application of such measures. In addition to the 
          stratification required under the previous sentence, the 
          Secretary shall have the discretion to further stratify 
          reporting on certain measures based on factors such as 
          eligibility category, income level, or other differentiating 
          factors that could have an impact on the comparability of the 
          measure.''; and
              (2) in subsection (d)--
                      (A) in paragraph (1)(A), by striking ``under the 
                  such plan'' and all that follows through ``subsection 
                  (a)(5)'' and inserting ``under such plan or waiver, 
                  including measures described in subsection (b)(2), 
                  subject to revisions made in accordance with subsection 
                  (b)(6)(B)'';
                      (B) in paragraph (1)(B), by inserting ``, or 
                  comparable primary care case management services 
                  providers described in section 1905(t), as well as 
                  health care services furnished in fee-for-service 
                  settings or other delivery systems'' after ``section 
                  1937''; and
                      (C) in paragraph (2), by inserting before the 
                  period the following: ``, including analysis of 
                  comparable quality measures for Medicaid eligible 
                  adults who receive their health services through 
                  managed care, primary care case management, and fee-
                  for-service settings or other delivery systems''.
      (c) Pediatric Health Care Measures.--
              (1) In general.--Section 1139A of the Social Security Act 
          (42 U.S.C. 1320b-9a) is amended--
                      (A) in subsection (a)--
                              (i) by redesignating paragraphs (5) through 
                          (8) as paragraphs (6) through (9), 
                          respectively; and
                              (ii) by inserting after paragraph (4), the 
                          following:
              ``(5) Reporting of pediatric health care measures.--
          Beginning not later than January 1 of the calendar year that 
          begins on or after the date that is 2 years after the date of 
          enactment of the Medicaid and CHIP Quality Improvement Act of 
          2016, and annually thereafter, the Secretary shall require 
          States to use the measures and approaches identified in 
          paragraph (4) to report on the initial core child health care 
          quality measures established under this subsection and as such 
          measures subsequently are updated under subsection (b)(5). Such 
          reporting shall be stratified by delivery system, including 
          managed care organizations under section 1932, benchmark plans 
          under sections 1937 and 2103, primary care case management 
          services providers described in section 1905(t), health care 
          services in fee-for-service settings, and other delivery 
          systems, except that the Secretary may determine that reporting 
          on certain measures should not be stratified by delivery system 
          because such stratification would not be feasible or the 
          delivery systems are not comparable with respect to the 
          application of such measures. In addition to the stratification 
          required under the previous sentence, the Secretary shall have 
          the discretion to further stratify reporting on certain 
          measures based on factors such as eligibility category, income 
          level, or other differentiating factors that could have an 
          impact on the comparability of the measure.''; and
                      (B) in subsection (c)--
                              (i) in paragraph (1)(A), by striking 
                          ``measures described in subparagraphs (A) and 
                          (B) of subsection (a)(6)'' and inserting ``the 
                          core measures described in subsection (a), as 
                          revised in accordance with subsection (b)(5)'';
                              (ii) in paragraph (1)(B), by inserting 
                          before the period the following: ``, or 
                          comparable primary care case management 
                          services providers described in section 
                          1905(t), as well as healthcare services 
                          furnished in fee-for-service settings or other 
                          delivery systems''; and
                              (iii) in paragraph (2), by inserting before 
                          the period the following: ``, including 
                          analysis of comparable quality measures for 
                          children eligible for medical assistance under 
                          title XIX or child health assistance under 
                          title XXI who receive their health services 
                          through managed care, primary care case 
                          management, and fee-for-service settings or 
                          other delivery systems''.
              (2) Effective date.--The amendments made by this subsection 
          shall take effect as if included in the enactment of section 
          1139A of the Social Security Act, as added by section 401(a) of 
          the Children's Health Insurance Program Reauthorization Act of 
          2009 (Public Law 111-3).
  
  SEC. 4. PERFORMANCE BONUSES FOR SIGNIFICANT ACHIEVEMENT IN MEDICAID AND 
                CHIP QUALITY PERFORMANCE.
  
      Section 1903 of the Social Security Act (42 U.S.C. 1396b) is 
  amended by adding at the end the following new subsection:
      ``(aa) Performance Bonus for Quality Performance Achievement.--
              ``(1) In general.--The Secretary shall establish a Medicaid 
          Quality Performance Bonus fund for awarding performance bonuses 
          to States for high attainment and improvement on a core set of 
          quality measures related to the goals and purposes of the 
          Medicaid program under this title.
              ``(2) Quality performance bonus methodology.--Not later 
          than 3 years after the date of enactment of the Medicaid and 
          CHIP Quality Improvement Act of 2016, the Secretary shall 
          establish a methodology for awarding Medicaid quality 
          performance bonuses to States not less than annually in 
          accordance with paragraph (3) and subject to the availability 
          of appropriations. Medicaid quality performance bonuses shall 
          be awarded on the basis of the annual State reports required 
          under sections 1139A and 1139B and in accordance with 
          regulations promulgated by the Secretary.
              ``(3) Quality performance measurement bonuses.--Medicaid 
          quality performance bonuses shall be awarded to the following 
          10 States:
                      ``(A) The top 5 States achieving the designation of 
                  superior quality performing State under criteria 
                  established by the Secretary.
                      ``(B) The 5 States that--
                              ``(i) are not among the States described in 
                          subparagraph (A); and
                              ``(ii) demonstrate the greatest relative 
                          level of annual improvement in quality 
                          performance under criteria established by the 
                          Secretary.
              ``(4) Initial appropriation.--
                      ``(A) In general.--The total amount of Medicaid 
                  quality performance bonuses made under this subsection 
                  for all fiscal years shall be equal to $500,000,000, to 
                  be available until expended.
                      ``(B) Budget authority.--This paragraph constitutes 
                  budget authority in advance of appropriations Acts and 
                  represents the obligation of the Secretary to provide 
                  for the payment of amounts provided under this 
                  paragraph.
              ``(5) Use of quality performance bonus funds.--
                      ``(A) Designation for quality improvement 
                  activities.--As a condition of receiving a Medicaid 
                  quality performance bonus under this subsection, a 
                  State shall agree to designate at least 75 percent of 
                  the bonus funds paid to the State under this subsection 
                  for a fiscal year for the development and operation of 
                  quality-related initiatives that will directly benefit 
                  providers or managed care entities participating in the 
                  State plan under this title or under a waiver of such 
                  plan, including--
                              ``(i) pay-for-performance programs;
                              ``(ii) collaboration initiatives that have 
                          been demonstrated to improve performance on 
                          quality;
                              ``(iii) quality improvement initiatives, 
                          including those aimed at improving care for 
                          special and hard-to-reach populations, and 
                          those directed to managed care entities; and
                              ``(iv) such other Secretary-approved 
                          activities and initiatives that a State may 
                          pursue to encourage quality improvement and 
                          patient-focused high value care.
                      ``(B) State option to establish criteria.--A State 
                  may establish criteria for the State performance 
                  program carried out under subparagraph (A) that limits 
                  the award to a particular provider or entity type, that 
                  limits application to a specific geographic area, or 
                  that directs incentive programs for quality-related 
                  activities for specific populations, including 
                  individuals eligible under this title and title XVIII 
                  and hard-to-reach populations.
                      ``(C) Remaining bonus funds.--A State may designate 
                  up to 25 percent of the bonus funds paid to the State 
                  under this subsection for a fiscal year for activities 
                  related to the goals and purposes of the State program 
                  under this title.''.
target: Medicaid and Chip Quality Improvement Act of 2016 This bill amends titles XI (General Provisions) and XIX (Medicaid) of the Social Security Act to expand reporting requirements&nbsp;with respect to the quality of care provided&nbsp;under Medicaid and the Children's Health Insurance Program (CHIP). Current law requires a state that contracts with a Medicaid managed organization&nbsp;to develop and implement a quality assessment and improvement strategy. The bill extends this requirement to state contracts with providers of&nbsp;comparable primary care case management services&nbsp;and other&nbsp;health care services under Medicaid. With respect to adults eligible for Medicaid and children enrolled in Medicaid or&nbsp;CHIP, a state must report annually on quality measures identified by the Centers for Medicare &amp; Medicaid Services (CMS). Such reporting shall be stratified by service delivery system. CMS shall establish a Medicaid Quality Performance Bonus fund to award states for high attainment and improvement on&nbsp;a core set of quality measures. A state must designate at least 75% of any bonus funds for the development and operation of quality-related initiatives that will directly benefit providers or managed care entities participating in, or under a waiver of, the state plan for medical assistance. A state may use&nbsp;the remainder of such&nbsp;funds for activities related to the goals and purposes of the state plan.
feat_title: Medicaid and CHIP Quality Improvement Act of 2016