article: SECTION 1. SHORT TITLE. This Act may be referred to as the ``Eliminating Health Disparities Act of 2017''. SEC. 2. HEALTH DISPARITIES ELIMINATION STATE PLAN OPTION. Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) is amended by adding at the end the following: ``SEC. 1947. HEALTH DISPARITIES ELIMINATION PROGRAM STATE PLAN OPTION. ``(a) In General.--Notwithstanding section 1902(a)(1) (relating to statewideness), section 1902(a)(10)(B) (relating to comparability), and any other provision of this title that the Secretary determines is necessary to waive in order to implement this section, beginning fiscal year 2018, a State, at its option as a State plan amendment, may establish a Health Disparities Elimination Program for purposes of reducing health disparities among targeted populations in communities served by qualified community health systems under which the State provides incentive payments to qualified community health systems for initiatives approved under subsection (c), if the State meets the requirements specified in subsection (c). ``(b) State Plan Amendment.--Each State seeking a State plan amendment under this section shall submit such amendment to the Secretary for approval. The Secretary shall approve any such amendment that meets the requirements of subsection (c) and includes-- ``(1) State goals for reducing health disparities through the Health Disparities Elimination Program to be established by the State; ``(2) any requirements for the development and approval of action plans described in subsection (c)(1); ``(3) eligibility criteria for any qualified community health system seeking to establish a health disparities elimination initiative (in this section referred to as an `initiative') pursuant to this section; ``(4) the methodology for determining the amount of incentive payments to be made to a qualified community health system through an initiative, based on the size of the target population to be served through the initiative and the potential of the initiative for reducing health disparities; and ``(5) the period during which initiatives may be implemented, in accordance with subsection (c)(3). ``(c) State Requirements.--The requirements specified in this subsection with respect to a State are the following: ``(1) Health system action plan.--The State shall require that a qualified community health system submit an action plan for an initiative to the State agency with responsibility for administering the State plan under this title for approval that identifies-- ``(A) the target population or populations to be served by the initiative; ``(B) specific, evidence-based projects that the system will undertake through the initiative to reduce health disparities for such population or populations; ``(C) targets and benchmarks associated with such projects that must be met in order to receive incentive payments pursuant to this section; ``(D) measures for evaluating the effectiveness of the initiative in reducing health disparities with respect to the goals established by the State pursuant to subsection (b)(1); and ``(E) the amount of any proposed initial incentive payments to be made pursuant to this section to support startup costs of the initiative. ``(2) Priority in selection of health systems for participation.--In selecting qualified community health systems to establish an initiative under a State plan amendment approved under this section, the State shall give priority to health systems-- ``(A) that have submitted action plans (under paragraph (1)) that include the use of evidence-based interventions shown to reduce or eliminate health disparities; ``(B) that demonstrate the potential to have a high impact in the elimination of health disparities, improved health care access, improved health outcomes, or health care savings compared to the total incentive funding requested; ``(C) that have prior experience working on projects with the goal of reducing health disparities; ``(D) that demonstrate long-term commitment to providing health services to the target population or populations; and ``(E) with a demonstrated need for additional financial resources in order to strengthen and advance existing efforts of the health system to reduce health disparities. ``(3) Duration of action plan.-- ``(A) In general.--The State may not approve an action plan submitted under paragraph (1) for a period exceeding 5 years. ``(B) Report.--At the end of any such period, the State shall require each participating qualified community health system to submit a report to the State describing the effectiveness of its initiative using the measures described in paragraph (1)(D). ``(C) Extension.--A State may extend the initiative of such health system upon approval of a new action plan to extend, improve, or expand the initiative, if the State determines that the initiative has proved effective, taking into account the report submitted under subparagraph (B). ``(d) State Report and Evaluation.-- ``(1) In general.--A State with a State plan amendment approved under this section shall submit to the Secretary, in a time and manner to be specified by the Secretary-- ``(A) an annual report on the progress of the Health Disparities Elimination Program of the State towards meeting the goals of the State described under subsection (b)(1); and ``(B) not less than once every 5 years, an evaluation of the effectiveness of the Health Disparities Elimination Program of the State. ``(2) Contents.--The evaluation described in paragraph (1)(B) shall include-- ``(A) an assessment of the effectiveness of initiatives receiving incentive payments pursuant to this section during the period covered by the report in meeting the goals of the State described under subsection (b)(1); and ``(B) a description of the activities of such initiatives. ``(3) Publication.--The Secretary shall publish on the public Web site of the Centers for Medicare & Medicaid Services each evaluation submitted under paragraph (1)(B). ``(e) Funding.-- ``(1) State funding.-- ``(A) In general.--For the purpose of making allocations to States under subparagraph (C), there is appropriated for fiscal year 2018 and each subsequent fiscal year, out of any money in the Treasury not otherwise appropriated, an amount equal to one half of one percent of the total of the Federal share of expenditures with respect to all State plans under this title in the most recent fiscal year for which complete expenditure data is available. ``(B) Incentive payment fund.--The Secretary shall deposit all funds appropriated under subparagraph (A) into an incentive payment fund. Such funds shall remain available until expended. ``(C) Allocation among states.--Of the total amount appropriated for this section for a fiscal year, the Secretary shall, except as provided in subparagraph (D), allocate for such fiscal year to each State an amount in proportion to the ratio of-- ``(i) the State's total expenditures under the State plan under this title in the most recent fiscal year for which complete expenditure data is available; to ``(ii) the sum of all States' total expenditures under all State plans under this title in the fiscal year described in clause (i). ``(D) Funds not used by the state.--If the Secretary determines, on the basis of information available on the first day of a fiscal year, that any allocation under subparagraph (C) to a State for such fiscal year will not be required because a State does not have a State plan amendment approved under subsection (b) for such fiscal year, then such State's allocation shall be treated as an unused allocation for such fiscal year and re-allocated in accordance with subparagraph (E)(i). ``(E) Qualifying states.-- ``(i) Re-allocation to qualifying states.-- In addition to the allocation available to a State under subparagraph (C), the Secretary shall allocate to each qualifying State for a fiscal year, out of the sum of unused allocations, as described in subparagraph (D), for such fiscal year, an amount in proportion to the ratio of-- ``(I) each such State's total expenditures under the State plan under this title in the most recent fiscal year for which complete expenditure data is available; to ``(II) the sum of all such States' total expenditures under all State plans of such States under this title in the fiscal year described in subclause (I). ``(ii) Availability of funds.--Allocations made to a qualifying State under clause (i) and subparagraph (C) shall remain available until expended. ``(iii) Definitions.--In this section, the term `qualifying State' means a State with a State plan amendment approved under this section that-- ``(I) has in effect an agreement with one or more qualified community health system initiatives; and ``(II) in any fiscal year other than the first fiscal year for which such State receives an allocation under subparagraph (C) that is not re- allocated under subparagraph (D), has a Health Disparities Elimination Program established under this section that, as determined by the Secretary, has made measurable progress towards meeting the State's goals, as described under subsection (b)(1), based on reports and evaluations submitted under subsection (d). ``(2) Payments.-- ``(A) In general.--Subject to the provisions of this section, the Secretary shall pay to each State with a State plan amendment approved under this section, from its allocation under paragraph (1)(C) and, in the case of a qualifying State, from its allocation under paragraph (1)(E)(i), an amount for each quarter equal to 90 percent of the sum expended by the State in such quarter for incentive payments made to qualified community health systems for initiatives approved pursuant to this section. ``(B) Status of incentive payments.--Incentive payments made under a State plan amendment approved under this section shall not be considered payment for health care items or services and shall not count towards any limit with respect to the maximum amount of payments that may be made to a provider under the State plan under this title (or under a waiver of such plan). ``(f) Definitions.--In this section: ``(1) The term `health disparity' means a disparity in care provided to a health disparity population, as defined in section 903(d) of the Public Health Service Act (42 U.S.C. 299a-1(d)). ``(2) The term `qualified community health system' means-- ``(A) a hospital described in a report submitted under section 1900(b)(6)(B)(ii)(III); or ``(B) an affiliated group of health care providers anchored by such hospital. ``(3) The term `State' means each of the several States and the District of Columbia. ``(4) The term `target population' means a population of individuals that has empirically experienced disparities in health care access and quality and shall not be limited by source of coverage or lack thereof.''.
summary: Eliminating Health Disparities Act of 2017 This bill amends title XIX (Medicaid) of the Social Security Act to allow a state to establish a Health Disparities Elimination Program, through which the state shall provide incentive payments to qualified community health systems (i.e., hospitals or affiliated groups of health care providers) for approved initiatives to reduce health disparities. In selecting qualified community health systems for participation, a state shall give priority to those that: (1) have included, in their required action plans, the use of evidence-based interventions; (2) have had relevant prior experience; and (3) demonstrate a long-term commitment to serving the target populations, a need for additional financial resources, and the potential for high impact relative to the amount of funding requested. Federal funding for program support shall be allocated based on each state's share of total federal Medicaid expenditures.