[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 976 Enrolled Bill (ENR)]
H.R.976
One Hundred Tenth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Thursday,
the fourth day of January, two thousand and seven
An Act
To amend title XXI of the Social Security Act to extend and improve the
Children's Health Insurance Program, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; REFERENCES;
TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as ``Children's Health
Insurance Program Reauthorization Act of 2007''.
(b) Amendments to Social Security Act.--Except as otherwise
specifically provided, whenever in this Act an amendment is expressed
in terms of an amendment to or repeal of a section or other provision,
the reference shall be considered to be made to that section or other
provision of the Social Security Act.
(c) References to CHIP; Medicaid; Secretary.--In this Act:
(1) CHIP.--The term ``CHIP'' means the State Children's Health
Insurance Program established under title XXI of the Social
Security Act (42 U.S.C. 1397aa et seq.).
(2) Medicaid.--The term ``Medicaid'' means the program for
medical assistance established under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.).
(3) Secretary.--The term ``Secretary'' means the Secretary of
Health and Human Services.
(d) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; amendments to Social Security Act; references;
table of contents.
Sec. 2. Purpose.
Sec. 3. General effective date; exception for State legislation;
contingent effective date; reliance on law.
TITLE I--FINANCING
Subtitle A--Funding
Sec. 101. Extension of CHIP.
Sec. 102. Allotments for States and territories for fiscal years 2008
through 2012.
Sec. 103. Child Enrollment Contingency Fund.
Sec. 104. CHIP performance bonus payment to offset additional enrollment
costs resulting from enrollment and retention efforts.
Sec. 105. 2-year initial availability of CHIP allotments.
Sec. 106. Redistribution of unused allotments to address State funding
shortfalls.
Sec. 107. Option for qualifying States to receive the enhanced portion
of the CHIP matching rate for Medicaid coverage of certain
children.
Sec. 108. One-time appropriation.
Sec. 109. Improving funding for the territories under CHIP and Medicaid.
Subtitle B--Focus on Low-Income Children and Pregnant Women
Sec. 111. State option to cover low-income pregnant women under CHIP
through a State plan amendment.
Sec. 112. Phase-Out of coverage for nonpregnant childless adults under
CHIP; conditions for coverage of parents.
Sec. 113. Elimination of counting Medicaid child presumptive eligibility
costs against Title XXI allotment.
Sec. 114. Limitation on matching rate for States that propose to cover
children with effective family income that exceeds 300 percent
of the poverty line.
Sec. 115. State authority under Medicaid.
Sec. 116. Preventing substitution of CHIP coverage for private coverage.
TITLE II--OUTREACH AND ENROLLMENT
Subtitle A--Outreach and Enrollment Activities
Sec. 201. Grants and enhanced administrative funding for outreach and
enrollment.
Sec. 202. Increased outreach and enrollment of Indians.
Sec. 203. State option to rely on findings from an Express Lane agency
to conduct simplified eligibility determinations.
Subtitle B--Reducing Barriers to Enrollment
Sec. 211. Verification of declaration of citizenship or nationality for
purposes of eligibility for Medicaid and CHIP.
Sec. 212. Reducing administrative barriers to enrollment.
Sec. 213. Model of Interstate coordinated enrollment and coverage
process.
TITLE III--REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE
Subtitle A--Additional State Option for Providing Premium Assistance
Sec. 301. Additional State option for providing premium assistance.
Sec. 302. Outreach, education, and enrollment assistance.
Subtitle B--Coordinating Premium Assistance With Private Coverage
Sec. 311. Special enrollment period under group health plans in case of
termination of Medicaid or CHIP coverage or eligibility for
assistance in purchase of employment-based coverage;
coordination of coverage.
TITLE IV--STRENGTHENING QUALITY OF CARE AND HEALTH OUTCOMES
Sec. 401. Child health quality improvement activities for children
enrolled in Medicaid or CHIP.
Sec. 402. Improved availability of public information regarding
enrollment of children in CHIP and Medicaid.
Sec. 403. Application of certain managed care quality safeguards to
CHIP.
TITLE V--IMPROVING ACCESS TO BENEFITS
Sec. 501. Dental benefits.
Sec. 502. Mental health parity in CHIP plans.
Sec. 503. Application of prospective payment system for services
provided by Federally-Qualified Health Centers and rural
health clinics.
Sec. 504. Premium grace period.
Sec. 505. Demonstration projects relating to diabetes prevention.
Sec. 506. Clarification of coverage of services provided through school-
based health centers.
TITLE VI--PROGRAM INTEGRITY AND OTHER MISCELLANEOUS PROVISIONS
Subtitle A--Program Integrity and Data Collection
Sec. 601. Payment error rate measurement (``PERM'').
Sec. 602. Improving data collection.
Sec. 603. Updated Federal evaluation of CHIP.
Sec. 604. Access to records for IG and GAO audits and evaluations.
Sec. 605. No Federal funding for illegal aliens.
Subtitle B--Miscellaneous Health Provisions
Sec. 611. Deficit Reduction Act technical corrections.
Sec. 612. References to title XXI.
Sec. 613. Prohibiting initiation of new health opportunity account
demonstration programs.
Sec. 614. County medicaid health insuring organizations; GAO report on
Medicaid managed care payment rates.
Sec. 615. Adjustment in computation of Medicaid FMAP to disregard an
extraordinary employer pension contribution.
Sec. 616. Moratorium on certain payment restrictions.
Sec. 617. Medicaid DSH allotments for Tennessee and Hawaii.
Sec. 618. Clarification treatment of regional medical center.
Sec. 619. Extension of SSI web-based asset demonstration project to the
Medicaid program.
Subtitle C--Other Provisions
Sec. 621. Support for injured servicemembers.
Sec. 622. Military family job protection.
Sec. 623. Outreach regarding health insurance options available to
children.
Sec. 624. Sense of Senate regarding access to affordable and meaningful
health insurance coverage.
TITLE VII--REVENUE PROVISIONS
Sec. 701. Increase in excise tax rate on tobacco products.
Sec. 702. Administrative improvements.
Sec. 703. Time for payment of corporate estimated taxes.
SEC. 2. PURPOSE.
It is the purpose of this Act to provide dependable and stable
funding for children's health insurance under titles XXI and XIX of the
Social Security Act in order to enroll all six million uninsured
children who are eligible, but not enrolled, for coverage today through
such titles.
SEC. 3. GENERAL EFFECTIVE DATE; EXCEPTION FOR STATE LEGISLATION;
CONTINGENT EFFECTIVE DATE; RELIANCE ON LAW.
(a) General Effective Date.--Unless otherwise provided in this Act,
subject to subsections (b) and (c), this Act (and the amendments made
by this Act) shall take effect on October 1, 2007, and shall apply to
child health assistance and medical assistance provided on or after
that date without regard to whether or not final regulations to carry
out this Act (or such amendments) have been promulgated by such date.
(b) Exception for State Legislation.--In the case of a State plan
under title XIX or State child health plan under XXI of the Social
Security Act, which the Secretary of Health and Human Services
determines requires State legislation in order for respective plan to
meet one or more additional requirements imposed by amendments made by
this Act, the respective State plan shall not be regarded as failing to
comply with the requirements of such title solely on the basis of its
failure to meet such an additional requirement before the first day of
the first calendar quarter beginning after the close of the first
regular session of the State legislature that begins after the date of
enactment of this Act. For purposes of the previous sentence, in the
case of a State that has a 2-year legislative session, each year of the
session shall be considered to be a separate regular session of the
State legislature.
(c) Contingent Effective Date for CHIP Funding for Fiscal Year
2008.--Notwithstanding any other provision of law, if funds are
appropriated under any law (other than this Act) to provide allotments
to States under CHIP for all (or any portion) of fiscal year 2008--
(1) any amounts that are so appropriated that are not so
allotted and obligated before the date of the enactment of this Act
are rescinded; and
(2) any amount provided for CHIP allotments to a State under
this Act (and the amendments made by this Act) for such fiscal year
shall be reduced by the amount of such appropriations so allotted
and obligated before such date.
(d) Reliance on Law.--With respect to amendments made by this Act
(other than title VII) that become effective as of a date--
(1) such amendments are effective as of such date whether or
not regulations implementing such amendments have been issued; and
(2) Federal financial participation for medical assistance or
child health assistance furnished under title XIX or XXI,
respectively, of the Social Security Act on or after such date by a
State in good faith reliance on such amendments before the date of
promulgation of final regulations, if any, to carry out such
amendments (or before the date of guidance, if any, regarding the
implementation of such amendments) shall not be denied on the basis
of the State's failure to comply with such regulations or guidance.
TITLE I--FINANCING
Subtitle A--Funding
SEC. 101. EXTENSION OF CHIP.
Section 2104(a) (42 U.S.C. 1397dd(a)) is amended--
(1) in paragraph (9), by striking ``and'' at the end;
(2) in paragraph (10), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following new paragraphs:
``(11) for fiscal year 2008, $9,125,000,000;
``(12) for fiscal year 2009, $10,675,000,000;
``(13) for fiscal year 2010, $11,850,000,000;
``(14) for fiscal year 2011, $13,750,000,000; and
``(15) for fiscal year 2012, for purposes of making 2 semi-
annual allotments--
``(A) $1,750,000,000 for the period beginning on October 1,
2011, and ending on March 31, 2012, and
``(B) $1,750,000,000 for the period beginning on April 1,
2012, and ending on September 30, 2012.''.
SEC. 102. ALLOTMENTS FOR STATES AND TERRITORIES FOR FISCAL YEARS
2008 THROUGH 2012.
Section 2104 (42 U.S.C. 1397dd) is amended--
(1) in subsection (b)(1), by striking ``subsection (d)'' and
inserting ``subsections (d) and (i)'';
(2) in subsection (c)(1), by striking ``subsection (d)'' and
inserting ``subsections (d) and (i)(4)''; and
(3) by adding at the end the following new subsection:
``(i) Allotments for Fiscal Years 2008 Through 2012.--
``(1) For fiscal year 2008.--
``(A) For the 50 states and the district of columbia.--
Subject to the succeeding provisions of this paragraph and
paragraph (4), the Secretary shall allot for fiscal year 2008
from the amount made available under subsection (a)(11), to
each of the 50 States and the District of Columbia 110 percent
of the highest of the following amounts for such State or
District:
``(i) The total Federal payments to the State under
this title for fiscal year 2007, multiplied by the
allotment increase factor determined under paragraph (5)
for fiscal year 2008.
``(ii) The Federal share of the amount allotted to the
State for fiscal year 2007 under subsection (b), multiplied
by the allotment increase factor determined under paragraph
(5) for fiscal year 2008.
``(iii) Only in the case of--
``(I) a State that received a payment,
redistribution, or allotment under any of paragraph
(1), (2), or (4) of subsection (h), the amount of the
projected total Federal payments to the State under
this title for fiscal year 2007, as determined on the
basis of the November 2006 estimates certified by the
State to the Secretary;
``(II) a State whose projected total Federal
payments to the State under this title for fiscal year
2007, as determined on the basis of the May 2006
estimates certified by the State to the Secretary, were
at least $95,000,000 but not more than $96,000,000
higher than the projected total Federal payments to the
State under this title for fiscal year 2007 on the
basis of the November 2006 estimates, the amount of the
projected total Federal payments to the State under
this title for fiscal year 2007 on the basis of the May
2006 estimates; or
``(III) a State whose projected total Federal
payments under this title for fiscal year 2007, as
determined on the basis of the November 2006 estimates
certified by the State to the Secretary, exceeded all
amounts available to the State for expenditure for
fiscal year 2007 (including any amounts paid, allotted,
or redistributed to the State in prior fiscal years),
the amount of the projected total Federal payments to
the State under this title for fiscal year 2007, as
determined on the basis of the November 2006 estimates
certified by the State to the Secretary,
multiplied by the allotment increase factor determined
under paragraph (5) for fiscal year 2008.
``(iv) The projected total Federal payments to the
State under this title for fiscal year 2008, as determined
on the basis of the August 2007 projections certified by
the State to the Secretary by not later than September 30,
2007.
``(B) For the commonwealths and territories.--Subject to
the succeeding provisions of this paragraph and paragraph (4),
the Secretary shall allot for fiscal year 2008 from the amount
made available under subsection (a)(11) to each of the
commonwealths and territories described in subsection (c)(3) an
amount equal to the highest amount of Federal payments to the
commonwealth or territory under this title for any fiscal year
occurring during the period of fiscal years 1998 through 2007,
multiplied by the allotment increase factor determined under
paragraph (5) for fiscal year 2008, except that subparagraph
(B) thereof shall be applied by substituting `the United
States' for `the State'.
``(C) Deadline and data for determining fiscal year 2008
allotments.--In computing the amounts under subparagraphs (A)
and (B) that determine the allotments to States for fiscal year
2008, the Secretary shall use the most recent data available to
the Secretary before the start of that fiscal year. The
Secretary may adjust such amounts and allotments, as necessary,
on the basis of the expenditure data for the prior year
reported by States on CMS Form 64 or CMS Form 21 not later than
November 30, 2007, but in no case shall the Secretary adjust
the allotments provided under subparagraph (A) or (B) for
fiscal year 2008 after December 31, 2007.
``(D) Adjustment for qualifying states.--In the case of a
qualifying State described in paragraph (2) of section 2105(g),
the Secretary shall permit the State to submit revised
projection described in subparagraph (A)(iv) in order to take
into account changes in such projections attributable to the
application of paragraph (4) of such section.
``(2) For fiscal years 2009 through 2011.--
``(A) In general.--Subject to paragraphs (4) and (6), from
the amount made available under paragraphs (12) through (14) of
subsection (a) for each of fiscal years 2009 through 2011,
respectively, the Secretary shall compute a State allotment for
each State (including the District of Columbia and each
commonwealth and territory) for each such fiscal year as
follows:
``(i) Growth factor update for fiscal year 2009.--For
fiscal year 2009, the allotment of the State is equal to
the sum of--
``(I) the amount of the State allotment under
paragraph (1) for fiscal year 2008; and
``(II) the amount of any payments made to the State
under subsection (j) for fiscal year 2008,
multiplied by the allotment increase factor under paragraph
(5) for fiscal year 2009.
``(ii) Rebasing in fiscal year 2010.--For fiscal year
2010, the allotment of a State is equal to the Federal
payments to the State that are attributable to (and
countable towards) the total amount of allotments available
under this section to the State in fiscal year 2009
(including payments made to the State under subsection (j)
for fiscal year 2009 as well as amounts redistributed to
the State in fiscal year 2009) multiplied by the allotment
increase factor under paragraph (5) for fiscal year 2010.
``(iii) Growth factor update for fiscal year 2011.--For
fiscal year 2011, the allotment of the State is equal to
the sum of--
``(I) the amount of the State allotment under
clause (ii) for fiscal year 2010; and
``(II) the amount of any payments made to the State
under subsection (j) for fiscal year 2010,
multiplied by the allotment increase factor under paragraph
(5) for fiscal year 2011.
``(3) For fiscal year 2012.--
``(A) First half.--Subject to paragraphs (4) and (6), from
the amount made available under subparagraph (A) of paragraph
(15) of subsection (a) for the semi-annual period described in
such paragraph, increased by the amount of the appropriation
for such period under section 108 of the Children's Health
Insurance Program Reauthorization Act of 2007, the Secretary
shall compute a State allotment for each State (including the
District of Columbia and each commonwealth and territory) for
such semi-annual period in an amount equal to the first half
ratio (described in subparagraph (D)) of the amount described
in subparagraph (C).
``(B) Second half.--Subject to paragraphs (4) and (6), from
the amount made available under subparagraph (B) of paragraph
(15) of subsection (a) for the semi-annual period described in
such paragraph, the Secretary shall compute a State allotment
for each State (including the District of Columbia and each
commonwealth and territory) for such semi-annual period in an
amount equal to the amount made available under such
subparagraph multiplied by the ratio of--
``(i) the amount of the allotment to such State under
subparagraph (A); to
``(ii) the total of the amount of all of the allotments
made available under such subparagraph.
``(C) Full year amount based on rebased amount.--The amount
described in this subparagraph for a State is equal to the
Federal payments to the State that are attributable to (and
countable towards) the total amount of allotments available
under this section to the State in fiscal year 2011 (including
payments made to the State under subsection (j) for fiscal year
2011 as well as amounts redistributed to the State in fiscal
year 2011) multiplied by the allotment increase factor under
paragraph (5) for fiscal year 2012.
``(D) First half ratio.--The first half ratio described in
this subparagraph is the ratio of--
``(i) the sum of--
``(I) the amount made available under subsection
(a)(15)(A); and
``(II) the amount of the appropriation for such
period under section 108 of the Children's Health
Insurance Program Reauthorization Act of 2007; to
``(ii) the sum of the--
``(I) amount described in clause (i); and
``(II) the amount made available under subsection
(a)(15)(B).
``(4) Proration rule.--If, after the application of this
subsection without regard to this paragraph, the sum of the
allotments determined under paragraph (1), (2), or (3) for a fiscal
year (or, in the case of fiscal year 2012, for a semi-annual period
in such fiscal year) exceeds the amount available under subsection
(a) for such fiscal year or period, the Secretary shall reduce each
allotment for any State under such paragraph for such fiscal year
or period on a proportional basis.
``(5) Allotment increase factor.--The allotment increase factor
under this paragraph for a fiscal year is equal to the product of
the following:
``(A) Per capita health care growth factor.--1 plus the
percentage increase in the projected per capita amount of
National Health Expenditures from the calendar year in which
the previous fiscal year ends to the calendar year in which the
fiscal year involved ends, as most recently published by the
Secretary before the beginning of the fiscal year.
``(B) Child population growth factor.--1 plus the
percentage increase (if any) in the population of children in
the State from July 1 in the previous fiscal year to July 1 in
the fiscal year involved, as determined by the Secretary based
on the most recent published estimates of the Bureau of the
Census before the beginning of the fiscal year involved, plus 1
percentage point.
``(6) Increase in allotment to account for approved program
expansions.--In the case of one of the 50 States or the District of
Columbia that--
``(A) has submitted to the Secretary, and has approved by
the Secretary, a State plan amendment or waiver request
relating to an expansion of eligibility for children or
benefits under this title that becomes effective for a fiscal
year (beginning with fiscal year 2009 and ending with fiscal
year 2012); and
``(B) has submitted to the Secretary, before the August 31
preceding the beginning of the fiscal year, a request for an
expansion allotment adjustment under this paragraph for such
fiscal year that specifies--
``(i) the additional expenditures that are attributable
to the eligibility or benefit expansion provided under the
amendment or waiver described in subparagraph (A), as
certified by the State and submitted to the Secretary by
not later than August 31 preceding the beginning of the
fiscal year; and
``(ii) the extent to which such additional expenditures
are projected to exceed the allotment of the State or
District for the year,
subject to paragraph (4), the amount of the allotment of the State
or District under this subsection for such fiscal year shall be
increased by the excess amount described in subparagraph (B)(i). A
State or District may only obtain an increase under this paragraph
for an allotment for fiscal year 2009 or fiscal year 2011.
``(7) Availability of amounts for semi-annual periods in fiscal
year 2012.--Each semi-annual allotment made under paragraph (3) for
a period in fiscal year 2012 shall remain available for expenditure
under this title for periods after the end of such fiscal year in
the same manner as if the allotment had been made available for the
entire fiscal year.''.
SEC. 103. CHILD ENROLLMENT CONTINGENCY FUND.
Section 2104 (42 U.S.C. 1397dd), as amended by section 102, is
amended by adding at the end the following new subsection:
``(j) Child Enrollment Contingency Fund.--
``(1) Establishment.--There is hereby established in the
Treasury of the United States a fund which shall be known as the
`Child Enrollment Contingency Fund' (in this subsection referred to
as the `Fund'). Amounts in the Fund shall be available without
further appropriations for payments under this subsection.
``(2) Deposits into fund.--
``(A) Initial and subsequent appropriations.--Subject to
subparagraphs (B) and (D), out of any money in the Treasury of
the United States not otherwise appropriated, there are
appropriated to the Fund--
``(i) for fiscal year 2008, an amount equal to 20
percent of the amount made available under paragraph (11)
of subsection (a) for the fiscal year; and
``(ii) for each of fiscal years 2009 through 2011 (and
for each of the semi-annual allotment periods for fiscal
year 2012) , such sums as are necessary for making payments
to eligible States for such fiscal year or period, but not
in excess of the aggregate cap described in subparagraph
(B).
``(B) Aggregate cap.--The total amount available for
payment from the Fund for each of fiscal years 2009 through
2011 (and for each of the semi-annual allotment periods for
fiscal year 2012), taking into account deposits made under
subparagraph (C), shall not exceed 20 percent of the amount
made available under subsection (a) for the fiscal year or
period.
``(C) Investment of fund.--The Secretary of the Treasury
shall invest, in interest bearing securities of the United
States, such currently available portions of the Fund as are
not immediately required for payments from the Fund. The income
derived from these investments constitutes a part of the Fund.
``(D) Availability of excess funds for performance
bonuses.--Any amounts in excess of the aggregate cap described
in subparagraph (B) for a fiscal year or period shall be made
available for purposes of carrying out section 2105(a)(3) for
any succeeding fiscal year and the Secretary of the Treasury
shall reduce the amount in the Fund by the amount so made
available.
``(3) Child enrollment contingency fund payments.--
``(A) In general.--If a State's expenditures under this
title in fiscal year 2008, fiscal year 2009, fiscal year 2010,
fiscal year 2011, or a semi-annual allotment period for fiscal
year 2012, exceed the total amount of allotments available
under this section to the State in the fiscal year or period
(determined without regard to any redistribution it receives
under subsection (f) that is available for expenditure during
such fiscal year or period, but including any carryover from a
previous fiscal year) and if the average monthly unduplicated
number of children enrolled under the State plan under this
title (including children receiving health care coverage
through funds under this title pursuant to a waiver under
section 1115) during such fiscal year or period exceeds its
target average number of such enrollees (as determined under
subparagraph (B)) for that fiscal year or period, subject to
subparagraph (D), the Secretary shall pay to the State from the
Fund an amount equal to the product of--
``(i) the amount by which such average monthly caseload
exceeds such target number of enrollees; and
``(ii) the projected per capita expenditures under the
State child health plan (as determined under subparagraph
(C) for the fiscal year), multiplied by the enhanced FMAP
(as defined in section 2105(b)) for the State and fiscal
year involved (or in which the period occurs).
``(B) Target average number of child enrollees.--In this
paragraph, the target average number of child enrollees for a
State--
``(i) for fiscal year 2008 is equal to the monthly
average unduplicated number of children enrolled in the
State child health plan under this title (including such
children receiving health care coverage through funds under
this title pursuant to a waiver under section 1115) during
fiscal year 2007 increased by the population growth for
children in that State for the year ending on June 30, 2006
(as estimated by the Bureau of the Census) plus 1
percentage point; or
``(ii) for a subsequent fiscal year (or semi-annual
period occurring in a fiscal year) is equal to the target
average number of child enrollees for the State for the
previous fiscal year increased by the child population
growth factor described in subsection (i)(5)(B) for the
State for the prior fiscal year.
``(C) Projected per capita expenditures.--For purposes of
subparagraph (A)(ii), the projected per capita expenditures
under a State child health plan--
``(i) for fiscal year 2008 is equal to the average per
capita expenditures (including both State and Federal
financial participation) under such plan for the targeted
low-income children counted in the average monthly caseload
for purposes of this paragraph during fiscal year 2007,
increased by the annual percentage increase in the
projected per capita amount of National Health Expenditures
(as estimated by the Secretary) for 2008; or
``(ii) for a subsequent fiscal year (or semi-annual
period occurring in a fiscal year) is equal to the
projected per capita expenditures under such plan for the
previous fiscal year (as determined under clause (i) or
this clause) increased by the annual percentage increase in
the projected per capita amount of National Health
Expenditures (as estimated by the Secretary) for the year
in which such subsequent fiscal year ends.
``(D) Proration rule.--If the amounts available for payment
from the Fund for a fiscal year or period are less than the
total amount of payments determined under subparagraph (A) for
the fiscal year or period, the amount to be paid under such
subparagraph to each eligible State shall be reduced
proportionally.
``(E) Timely payment; reconciliation.--Payment under this
paragraph for a fiscal year or period shall be made before the
end of the fiscal year or period based upon the most recent
data for expenditures and enrollment and the provisions of
subsection (e) of section 2105 shall apply to payments under
this subsection in the same manner as they apply to payments
under such section.
``(F) Continued reporting.--For purposes of this paragraph
and subsection (f), the State shall submit to the Secretary the
State's projected Federal expenditures, even if the amount of
such expenditures exceeds the total amount of allotments
available to the State in such fiscal year or period.
``(G) Application to commonwealths and territories.--No
payment shall be made under this paragraph to a commonwealth or
territory described in subsection (c)(3) until such time as the
Secretary determines that there are in effect methods,
satisfactory to the Secretary, for the collection and reporting
of reliable data regarding the enrollment of children described
in subparagraphs (A) and (B) in order to accurately determine
the commonwealth's or territory's eligibility for, and amount
of payment, under this paragraph.''.
SEC. 104. CHIP PERFORMANCE BONUS PAYMENT TO OFFSET ADDITIONAL
ENROLLMENT COSTS RESULTING FROM ENROLLMENT AND RETENTION EFFORTS.
Section 2105(a) (42 U.S.C. 1397ee(a)) is amended by adding at the
end the following new paragraphs:
``(3) Performance bonus payment to offset additional medicaid
and chip child enrollment costs resulting from enrollment and
retention efforts.--
``(A) In general.--In addition to the payments made under
paragraph (1), for each fiscal year (beginning with fiscal year
2008 and ending with fiscal year 2012) the Secretary shall pay
from amounts made available under subparagraph (E), to each
State that meets the condition under paragraph (4) for the
fiscal year, an amount equal to the amount described in
subparagraph (B) for the State and fiscal year. The payment
under this paragraph shall be made, to a State for a fiscal
year, as a single payment not later than the last day of the
first calendar quarter of the following fiscal year.
``(B) Amount.--Subject to subparagraph (E), the amount
described in this subparagraph for a State for a fiscal year is
equal to the sum of the following amounts:
``(i) For above baseline medicaid child enrollment
costs.--
``(I) First tier above baseline medicaid
enrollees.--An amount equal to the number of first tier
above baseline child enrollees (as determined under
subparagraph (C)(i)) under title XIX for the State and
fiscal year multiplied by 15 percent of the projected
per capita State Medicaid expenditures (as determined
under subparagraph (D)(i)) for the State and fiscal
year under title XIX.
``(II) Second tier above baseline medicaid
enrollees.--An amount equal to the number of second
tier above baseline child enrollees (as determined
under subparagraph (C)(ii)) under title XIX for the
State and fiscal year multiplied by 60 percent of the
projected per capita State Medicaid expenditures (as
determined under subparagraph (D)(i)) for the State and
fiscal year under title XIX.
``(ii) For above baseline chip enrollment costs.--
``(I) First tier above baseline chip enrollees.--An
amount equal to the number of first tier above baseline
child enrollees under this title (as determined under
subparagraph (C)(i)) for the State and fiscal year
multiplied by 10 percent of the projected per capita
State CHIP expenditures (as determined under
subparagraph (D)(ii)) for the State and fiscal year
under this title.
``(II) Second tier above baseline chip enrollees.--
An amount equal to the number of second tier above
baseline child enrollees under this title (as
determined under subparagraph (C)(ii)) for the State
and fiscal year multiplied by 40 percent of the
projected per capita State CHIP expenditures (as
determined under subparagraph (D)(ii)) for the State
and fiscal year under this title.
``(C) Number of first and second tier above baseline child
enrollees; baseline number of child enrollees.--For purposes of
this paragraph:
``(i) First tier above baseline child enrollees.--The
number of first tier above baseline child enrollees for a
State for a fiscal year under this title or title XIX is
equal to the number (if any, as determined by the
Secretary) by which--
``(I) the monthly average unduplicated number of
qualifying children (as defined in subparagraph (F))
enrolled during the fiscal year under the State child
health plan under this title or under the State plan
under title XIX, respectively; exceeds
``(II) the baseline number of enrollees described
in clause (iii) for the State and fiscal year under
this title or title XIX, respectively;
but not to exceed 3 percent (in the case of title XIX) or
7.5 percent (in the case of this title) of the baseline
number of enrollees described in subclause (II).
``(ii) Second tier above baseline child enrollees.--The
number of second tier above baseline child enrollees for a
State for a fiscal year under this title or title XIX is
equal to the number (if any, as determined by the
Secretary) by which--
``(I) the monthly average unduplicated number of
qualifying children (as defined in subparagraph (F))
enrolled during the fiscal year under this title or
under title XIX, respectively, as described in clause
(i)(I); exceeds
``(II) the sum of the baseline number of child
enrollees described in clause (iii) for the State and
fiscal year under this title or title XIX,
respectively, as described in clause (i)(II), and the
maximum number of first tier above baseline child
enrollees for the State and fiscal year under this
title or title XIX, respectively, as determined under
clause (i).
``(iii) Baseline number of child enrollees.--Subject to
subparagraph (H), the baseline number of child enrollees
for a State under this title or title XIX--
``(I) for fiscal year 2008 is equal to the monthly
average unduplicated number of qualifying children
enrolled in the State child health plan under this
title or in the State plan under title XIX,
respectively, during fiscal year 2007 increased by the
population growth for children in that State for the
year ending on June 30, 2006 (as estimated by the
Bureau of the Census) plus 1 percentage point; or
``(II) for a subsequent fiscal year is equal to the
baseline number of child enrollees for the State for
the previous fiscal year under this title or title XIX,
respectively, increased by the population growth for
children in that State for the year ending on June 30
before the beginning of the fiscal year (as estimated
by the Bureau of the Census) plus 1 percentage point.
``(D) Projected per capita state expenditures.--For
purposes of subparagraph (B)--
``(i) Projected per capita state medicaid
expenditures.--The projected per capita State Medicaid
expenditures for a State and fiscal year under title XIX is
equal to the average per capita expenditures (including
both State and Federal financial participation) for
children under the State plan under such title, including
under waivers but not including such children eligible for
assistance by virtue of the receipt of benefits under title
XVI, for the most recent fiscal year for which actual data
are available (as determined by the Secretary), increased
(for each subsequent fiscal year up to and including the
fiscal year involved) by the annual percentage increase in
per capita amount of National Health Expenditures (as
estimated by the Secretary) for the calendar year in which
the respective subsequent fiscal year ends and multiplied
by a State matching percentage equal to 100 percent minus
the Federal medical assistance percentage (as defined in
section 1905(b)) for the fiscal year involved.
``(ii) Projected per capita state chip expenditures.--
The projected per capita State CHIP expenditures for a
State and fiscal year under this title is equal to the
average per capita expenditures (including both State and
Federal financial participation) for children under the
State child health plan under this title, including under
waivers, for the most recent fiscal year for which actual
data are available (as determined by the Secretary),
increased (for each subsequent fiscal year up to and
including the fiscal year involved) by the annual
percentage increase in per capita amount of National Health
Expenditures (as estimated by the Secretary) for the
calendar year in which the respective subsequent fiscal
year ends and multiplied by a State matching percentage
equal to 100 percent minus the enhanced FMAP (as defined in
section 2105(b)) for the fiscal year involved.
``(E) Amounts available for payments.--
``(i) Initial appropriation.--Out of any money in the
Treasury not otherwise appropriated, there are appropriated
$3,000,000,000 for fiscal year 2008 for making payments
under this paragraph, to be available until expended.
``(ii) Transfers.--Notwithstanding any other provision
of this title, the following amounts shall also be
available, without fiscal year limitation, for making
payments under this paragraph:
``(I) Unobligated national allotment.--
``(aa) Fiscal years 2008 through 2011.--As of
December 31 of fiscal year 2008, and as of December
31 of each succeeding fiscal year through fiscal
year 2011, the portion, if any, of the amount
appropriated under subsection (a) for such fiscal
year that is unobligated for allotment to a State
under subsection (i) for such fiscal year or set
aside under subsection (a)(3) or (b)(2) of section
2111 for such fiscal year.
``(bb) First half of fiscal year 2012.--As of
December 31 of fiscal year 2012, the portion, if
any, of the sum of the amounts appropriated under
subsection (a)(15)(A) and under section 108 of the
Children's Health Insurance Reauthorization Act of
2007 for the period beginning on October 1, 2011,
and ending on March 31, 2012, that is unobligated
for allotment to a State under subsection (i) for
such fiscal year or set aside under subsection
(b)(2) of section 2111 for such fiscal year.
``(cc) Second half of fiscal year 2012.--As of
June 30 of fiscal year 2012, the portion, if any,
of the amount appropriated under subsection
(a)(15)(B) for the period beginning on April 1,
2012, and ending on September 30, 2012, that is
unobligated for allotment to a State under
subsection (i) for such fiscal year or set aside
under subsection (b)(2) of section 2111 for such
fiscal year.
``(II) Unexpended allotments not used for
redistribution.--As of November 15 of each of fiscal
years 2009 through 2012, the total amount of allotments
made to States under section 2104 for the second
preceding fiscal year (third preceding fiscal year in
the case of the fiscal year 2006 and 2007 allotments)
that is not expended or redistributed under section
2104(f) during the period in which such allotments are
available for obligation.
``(III) Excess child enrollment contingency
funds.--As of October 1 of each of fiscal years 2009
through 2012, any amount in excess of the aggregate cap
applicable to the Child Enrollment Contingency Fund for
the fiscal year under section 2104(j).
``(IV) Unexpended transitional coverage block grant
for nonpregnant childless adults.--As of October 1,
2009, any amounts set aside under section 2111(a)(3)
that are not expended by September 30, 2009.
``(iii) Proportional reduction.--If the sum of the
amounts otherwise payable under this paragraph for a fiscal
year exceeds the amount available for the fiscal year under
this subparagraph, the amount to be paid under this
paragraph to each State shall be reduced proportionally.
``(F) Qualifying children defined.--For purposes of this
subsection, the term `qualifying children' means, with respect
to this title or title XIX, children who meet the eligibility
criteria (including income, categorical eligibility, age, and
immigration status criteria) in effect as of July 1, 2007, for
enrollment under this title or title XIX, respectively, taking
into account criteria applied as of such date under this title
or title XIX, respectively, pursuant to a waiver under section
1115.
``(G) Application to commonwealths and territories.--The
provisions of subparagraph (H) of section 2104(j)(3) shall
apply with respect to payments under this paragraph in the same
manner as such provisions apply to payment under such section.
``(H) Application to states that implement a medicaid
expansion for children after fiscal year 2007.--In the case of
a State that provides coverage under paragraph (1) or (2) of
section 115(b) of the Children's Health Insurance Program
Reauthorization Act of 2007 for any fiscal year after fiscal
year 2007--
``(i) any child enrolled in the State plan under title
XIX through the application of such an election shall be
disregarded from the determination for the State of the
monthly average unduplicated number of qualifying children
enrolled in such plan during the first 3 fiscal years in
which such an election is in effect; and
``(ii) in determining the baseline number of child
enrollees for the State for any fiscal year subsequent to
such first 3 fiscal years, the baseline number of child
enrollees for the State under this title or title XIX for
the third of such fiscal years shall be the monthly average
unduplicated number of qualifying children enrolled in the
State child health plan under this title or in the State
plan under title XIX, respectively, for such third fiscal
year.
``(4) Enrollment and retention provisions for children.--For
purposes of paragraph (3)(A), a State meets the condition of this
paragraph for a fiscal year if it is implementing at least 4 of the
following enrollment and retention provisions (treating each
subparagraph as a separate enrollment and retention provision)
throughout the entire fiscal year:
``(A) Continuous eligibility.--The State has elected the
option of continuous eligibility for a full 12 months for all
children described in section 1902(e)(12) under title XIX under
19 years of age, as well as applying such policy under its
State child health plan under this title.
``(B) Liberalization of asset requirements.--The State
meets the requirement specified in either of the following
clauses:
``(i) Elimination of asset test.--The State does not
apply any asset or resource test for eligibility for
children under title XIX or this title.
``(ii) Administrative verification of assets.--The
State--
``(I) permits a parent or caretaker relative who is
applying on behalf of a child for medical assistance
under title XIX or child health assistance under this
title to declare and certify by signature under penalty
of perjury information relating to family assets for
purposes of determining and redetermining financial
eligibility; and
``(II) takes steps to verify assets through means
other than by requiring documentation from parents and
applicants except in individual cases of discrepancies
or where otherwise justified.
``(C) Elimination of in-person interview requirement.--The
State does not require an application of a child for medical
assistance under title XIX (or for child health assistance
under this title), including an application for renewal of such
assistance, to be made in person nor does the State require a
face-to-face interview, unless there are discrepancies or
individual circumstances justifying an in-person application or
face-to-face interview.
``(D) Use of joint application for medicaid and chip.--The
application form and supplemental forms (if any) and
information verification process is the same for purposes of
establishing and renewing eligibility for children for medical
assistance under title XIX and child health assistance under
this title.
``(E) Automatic renewal (use of administrative renewal).--
``(i) In general.--The State provides, in the case of
renewal of a child's eligibility for medical assistance
under title XIX or child health assistance under this
title, a pre-printed form completed by the State based on
the information available to the State and notice to the
parent or caretaker relative of the child that eligibility
of the child will be renewed and continued based on such
information unless the State is provided other information.
Nothing in this clause shall be construed as preventing a
State from verifying, through electronic and other means,
the information so provided.
``(ii) Satisfaction through demonstrated use of ex
parte process.--A State shall be treated as satisfying the
requirement of clause (i) if renewal of eligibility of
children under title XIX or this title is determined
without any requirement for an in-person interview, unless
sufficient information is not in the State's possession and
cannot be acquired from other sources (including other
State agencies) without the participation of the applicant
or the applicant's parent or caretaker relative.
``(F) Presumptive eligibility for children.--The State is
implementing section 1920A under title XIX as well as, pursuant
to section 2107(e)(1), under this title.
``(G) Express lane.--The State is implementing the option
described in section 1902(e)(13) under title XIX as well as,
pursuant to section 2107(e)(1), under this title.''.
SEC. 105. 2-YEAR INITIAL AVAILABILITY OF CHIP ALLOTMENTS.
Section 2104(e) (42 U.S.C. 1397dd(e)) is amended to read as
follows:
``(e) Availability of Amounts Allotted.--
``(1) In general.--Except as provided in paragraph (2), amounts
allotted to a State pursuant to this section--
``(A) for each of fiscal years 1998 through 2007, shall
remain available for expenditure by the State through the end
of the second succeeding fiscal year; and
``(B) for fiscal year 2008 and each fiscal year thereafter,
shall remain available for expenditure by the State through the
end of the succeeding fiscal year.
``(2) Availability of amounts redistributed.--Amounts
redistributed to a State under subsection (f) shall be available
for expenditure by the State through the end of the fiscal year in
which they are redistributed.''.
SEC. 106. REDISTRIBUTION OF UNUSED ALLOTMENTS TO ADDRESS STATE
FUNDING SHORTFALLS.
(a) Fiscal Year 2005 Allotments.--
(1) In general.--Notwithstanding section 2104(f) of the Social
Security Act (42 U.S.C. 1397dd(f)), subject to paragraph (2), with
respect to fiscal year 2008, the Secretary shall provide for a
redistribution under such section from the allotments for fiscal
year 2005 under subsections (b) and (c) of such section that are
not expended by the end of fiscal year 2007, to each State
described in clause (iii) of section 2104(i)(1)(A) of the Social
Security Act, as added by section 102, of an amount that bears the
same ratio to such unexpended fiscal year 2005 allotments as the
ratio of the fiscal year 2007 allotment determined for each such
State under subsection (b) of section 2104 of such Act for fiscal
year 2007 (without regard to any amounts paid, allotted, or
redistributed to the State under section 2104 for any preceding
fiscal year) bears to the total amount of the fiscal year 2007
allotments for all such States (as so determined).
(2) Contingency.--Paragraph (1) shall not apply if the
redistribution described in such paragraph has occurred as of the
date of the enactment of this Act.
(b) Allotments for Subsequent Fiscal Years.--Section 2104(f) (42
U.S.C. 1397dd(f)) is amended--
(1) by striking ``The Secretary'' and inserting the following:
``(1) In general.--The Secretary'';
(2) by striking ``States that have fully expended the amount of
their allotments under this section.'' and inserting ``States that
the Secretary determines with respect to the fiscal year for which
unused allotments are available for redistribution under this
subsection, are shortfall States described in paragraph (2) for
such fiscal year, but not to exceed the amount of the shortfall
described in paragraph (2)(A) for each such State (as may be
adjusted under paragraph (2)(C)).''; and
(3) by adding at the end the following new paragraph:
``(2) Shortfall states described.--
``(A) In general.--For purposes of paragraph (1), with
respect to a fiscal year, a shortfall State described in this
subparagraph is a State with a State child health plan approved
under this title for which the Secretary estimates on the basis
of the most recent data available to the Secretary, that the
projected expenditures under such plan for the State for the
fiscal year will exceed the sum of--
``(i) the amount of the State's allotments for any
preceding fiscal years that remains available for
expenditure and that will not be expended by the end of the
immediately preceding fiscal year;
``(ii) the amount (if any) of the child enrollment
contingency fund payment under subsection (j); and
``(iii) the amount of the State's allotment for the
fiscal year.
``(B) Proration rule.--If the amounts available for
redistribution under paragraph (1) for a fiscal year are less
than the total amounts of the estimated shortfalls determined
for the year under subparagraph (A), the amount to be
redistributed under such paragraph for each shortfall State
shall be reduced proportionally.
``(C) Retrospective adjustment.--The Secretary may adjust
the estimates and determinations made under paragraph (1) and
this paragraph with respect to a fiscal year as necessary on
the basis of the amounts reported by States not later than
November 30 of the succeeding fiscal year, as approved by the
Secretary.''.
SEC. 107. OPTION FOR QUALIFYING STATES TO RECEIVE THE ENHANCED
PORTION OF THE CHIP MATCHING RATE FOR MEDICAID COVERAGE OF
CERTAIN CHILDREN.
Section 2105(g) (42 U.S.C. 1397ee(g)) is amended--
(1) in paragraph (1)(A), by inserting ``subject to paragraph
(4),'' after ``Notwithstanding any other provision of law,''; and
(2) by adding at the end the following new paragraph:
``(4) Option for allotments for fiscal years 2008 through
2012.--
``(A) Payment of enhanced portion of matching rate for
certain expenditures.--In the case of expenditures described in
subparagraph (B), a qualifying State (as defined in paragraph
(2)) may elect to be paid from the State's allotment made under
section 2104 for any of fiscal years 2008 through 2012 (insofar
as the allotment is available to the State under subsections
(e) and (i) of such section) an amount each quarter equal to
the additional amount that would have been paid to the State
under title XIX with respect to such expenditures if the
enhanced FMAP (as determined under subsection (b)) had been
substituted for the Federal medical assistance percentage (as
defined in section 1905(b)).
``(B) Expenditures described.--For purposes of subparagraph
(A), the expenditures described in this subparagraph are
expenditures made after the date of the enactment of this
paragraph and during the period in which funds are available to
the qualifying State for use under subparagraph (A), for the
provision of medical assistance to individuals residing in the
State who are eligible for medical assistance under the State
plan under title XIX or under a waiver of such plan and who
have not attained age 19 (or, if a State has so elected under
the State plan under title XIX, age 20 or 21), and whose family
income equals or exceeds 133 percent of the poverty line but
does not exceed the Medicaid applicable income level.''.
SEC. 108. ONE-TIME APPROPRIATION.
There is appropriated to the Secretary, out of any money in the
Treasury not otherwise appropriated, $12,500,000,000 to accompany the
allotment made for the period beginning on October 1, 2011, and ending
on March 31, 2012, under section 2104(a)(15)(A) of the Social Security
Act (42 U.S.C. 1397dd(a)(15)(A)) (as added by section 101), to remain
available until expended. Such amount shall be used to provide
allotments to States under paragraph (3) of section 2104(i) of the
Social Security Act (42 U.S.C. 1397dd(i)), as added by section 102, for
the first 6 months of fiscal year 2012 in the same manner as allotments
are provided under subsection (a)(15)(A) of such section 2104 and
subject to the same terms and conditions as apply to the allotments
provided from such subsection (a)(15)(A).
SEC. 109. IMPROVING FUNDING FOR THE TERRITORIES UNDER CHIP AND
MEDICAID.
(a) Removal of Federal Matching Payments for Data Reporting Systems
From the Overall Limit on Payments to Territories Under Title XIX.--
Section 1108(g) (42 U.S.C. 1308(g)) is amended by adding at the end the
following new paragraph:
``(4) Exclusion of certain expenditures from payment limits.--
With respect to fiscal years beginning with fiscal year 2008, if
Puerto Rico, the Virgin Islands, Guam, the Northern Mariana
Islands, or American Samoa qualify for a payment under subparagraph
(A)(i), (B), or (F) of section 1903(a)(3) for a calendar quarter of
such fiscal year, the payment shall not be taken into account in
applying subsection (f) (as increased in accordance with paragraphs
(1), (2), and (3) of this subsection) to such commonwealth or
territory for such fiscal year.''.
(b) GAO Study and Report.--Not later than September 30, 2009, the
Comptroller General of the United States shall submit a report to the
Committee on Finance of the Senate and the Committee on Energy and
Commerce of the House of Representatives regarding Federal funding
under Medicaid and CHIP for Puerto Rico, the United States Virgin
Islands, Guam, American Samoa, and the Northern Mariana Islands. The
report shall include the following:
(1) An analysis of all relevant factors with respect to--
(A) eligible Medicaid and CHIP populations in such
commonwealths and territories;
(B) historical and projected spending needs of such
commonwealths and territories and the ability of capped funding
streams to respond to those spending needs;
(C) the extent to which Federal poverty guidelines are used
by such commonwealths and territories to determine Medicaid and
CHIP eligibility; and
(D) the extent to which such commonwealths and territories
participate in data collection and reporting related to
Medicaid and CHIP, including an analysis of territory
participation in the Current Population Survey versus the
American Community Survey.
(2) Recommendations regarding methods for the collection and
reporting of reliable data regarding the enrollment under Medicaid
and CHIP of children in such commonwealths and territories.
(3) Recommendations for improving Federal funding under
Medicaid and CHIP for such commonwealths and territories.
Subtitle B--Focus on Low-Income Children and Pregnant Women
SEC. 111. STATE OPTION TO COVER LOW-INCOME PREGNANT WOMEN UNDER
CHIP THROUGH A STATE PLAN AMENDMENT.
(a) In General.--Title XXI (42 U.S.C. 1397aa et seq.), as amended
by section 112(a), is amended by adding at the end the following new
section:
``SEC. 2112. OPTIONAL COVERAGE OF TARGETED LOW-INCOME PREGNANT WOMEN
THROUGH A STATE PLAN AMENDMENT.
``(a) In General.--Subject to the succeeding provisions of this
section, a State may elect through an amendment to its State child
health plan under section 2102 to provide pregnancy-related assistance
under such plan for targeted low-income pregnant women.
``(b) Conditions.--A State may only elect the option under
subsection (a) if the following conditions are satisfied:
``(1) Minimum income eligibility levels for pregnant women and
children.--The State has established an income eligibility level--
``(A) for pregnant women under subsection
(a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), or (l)(1)(A) of section
1902 that is at least 185 percent (or such higher percent as
the State has in effect with regard to pregnant women under
this title) of the poverty line applicable to a family of the
size involved, but in no case lower than the percent in effect
under any such subsection as of July 1, 2007; and
``(B) for children under 19 years of age under this title
(or title XIX) that is at least 200 percent of the poverty line
applicable to a family of the size involved.
``(2) No chip income eligibility level for pregnant women lower
than the state's medicaid level.--The State does not apply an
effective income level for pregnant women under the State plan
amendment that is lower than the effective income level (expressed
as a percent of the poverty line and considering applicable income
disregards) specified under subsection (a)(10)(A)(i)(III),
(a)(10)(A)(i)(IV), or (l)(1)(A) of section 1902, on the date of
enactment of this paragraph to be eligible for medical assistance
as a pregnant woman.
``(3) No coverage for higher income pregnant women without
covering lower income pregnant women.--The State does not provide
coverage for pregnant women with higher family income without
covering pregnant women with a lower family income.
``(4) Application of requirements for coverage of targeted low-
income children.--The State provides pregnancy-related assistance
for targeted low-income pregnant women in the same manner, and
subject to the same requirements, as the State provides child
health assistance for targeted low-income children under the State
child health plan, and in addition to providing child health
assistance for such women.
``(5) No preexisting condition exclusion or waiting period.--
The State does not apply any exclusion of benefits for pregnancy-
related assistance based on any preexisting condition or any
waiting period (including any waiting period imposed to carry out
section 2102(b)(3)(C)) for receipt of such assistance.
``(6) Application of cost-sharing protection.--The State
provides pregnancy-related assistance to a targeted low-income
woman consistent with the cost-sharing protections under section
2103(e) and applies the limitation on total annual aggregate cost
sharing imposed under paragraph (3)(B) of such section to the
family of such a woman.
``(7) No waiting list for children.--The State does not impose,
with respect to the enrollment under the State child health plan of
targeted low-income children during the quarter, any enrollment cap
or other numerical limitation on enrollment, any waiting list, any
procedures designed to delay the consideration of applications for
enrollment, or similar limitation with respect to enrollment.
``(c) Option To Provide Presumptive Eligibility.--A State that
elects the option under subsection (a) and satisfies the conditions
described in subsection (b) may elect to apply section 1920 (relating
to presumptive eligibility for pregnant women) to the State child
health plan in the same manner as such section applies to the State
plan under title XIX.
``(d) Definitions.--For purposes of this section:
``(1) Pregnancy-related assistance.--The term `pregnancy-
related assistance' has the meaning given the term `child health
assistance' in section 2110(a) and includes any medical assistance
that the State would provide for a pregnant woman under the State
plan under title XIX during the period described in paragraph
(2)(A).
``(2) Targeted low-income pregnant woman.--The term `targeted
low-income pregnant woman' means a woman--
``(A) during pregnancy and through the end of the month in
which the 60-day period (beginning on the last day of her
pregnancy) ends;
``(B) whose family income exceeds 185 percent (or, if
higher, the percent applied under subsection (b)(1)(A)) of the
poverty line applicable to a family of the size involved, but
does not exceed the income eligibility level established under
the State child health plan under this title for a targeted
low-income child; and
``(C) who satisfies the requirements of paragraphs (1)(A),
(1)(C), (2), and (3) of section 2110(b) in the same manner as a
child applying for child health assistance would have to
satisfy such requirements.
``(e) Automatic Enrollment for Children Born to Women Receiving
Pregnancy-Related Assistance.--If a child is born to a targeted low-
income pregnant woman who was receiving pregnancy-related assistance
under this section on the date of the child's birth, the child shall be
deemed to have applied for child health assistance under the State
child health plan and to have been found eligible for such assistance
under such plan or to have applied for medical assistance under title
XIX and to have been found eligible for such assistance under such
title, as appropriate, on the date of such birth and to remain eligible
for such assistance until the child attains 1 year of age. During the
period in which a child is deemed under the preceding sentence to be
eligible for child health or medical assistance, the child health or
medical assistance eligibility identification number of the mother
shall also serve as the identification number of the child, and all
claims shall be submitted and paid under such number (unless the State
issues a separate identification number for the child before such
period expires).
``(f) States Providing Assistance Through Other Options.--
``(1) Continuation of other options for providing assistance.--
The option to provide assistance in accordance with the preceding
subsections of this section shall not limit any other option for a
State to provide--
``(A) child health assistance through the application of
sections 457.10, 457.350(b)(2), 457.622(c)(5), and
457.626(a)(3) of title 42, Code of Federal Regulations (as in
effect after the final rule adopted by the Secretary and set
forth at 67 Fed. Reg. 61956-61974 (October 2, 2002)), or
``(B) pregnancy-related services through the application of
any waiver authority (as in effect on June 1, 2007).
``(2) Clarification of authority to provide postpartum
services.--Any State that provides child health assistance under
any authority described in paragraph (1) may continue to provide
such assistance, as well as postpartum services, through the end of
the month in which the 60-day period (beginning on the last day of
the pregnancy) ends, in the same manner as such assistance and
postpartum services would be provided if provided under the State
plan under title XIX, but only if the mother would otherwise
satisfy the eligibility requirements that apply under the State
child health plan (other than with respect to age) during such
period.
``(3) No inference.--Nothing in this subsection shall be
construed--
``(A) to infer congressional intent regarding the legality
or illegality of the content of the sections specified in
paragraph (1)(A); or
``(B) to modify the authority to provide pregnancy-related
services under a waiver specified in paragraph (1)(B).''.
(b) Additional Conforming Amendments.--
(1) No cost sharing for pregnancy-related benefits.--Section
2103(e)(2) (42 U.S.C. 1397cc(e)(2)) is amended--
(A) in the heading, by inserting ``or pregnancy-related
assistance'' after ``preventive services''; and
(B) by inserting before the period at the end the
following: ``or for pregnancy-related assistance''.
(2) No waiting period.--Section 2102(b)(1)(B) (42 U.S.C.
1397bb(b)(1)(B)) is amended--
(A) in clause (i), by striking ``, and'' at the end and
inserting a semicolon;
(B) in clause (ii), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following new clause:
``(iii) may not apply a waiting period (including a
waiting period to carry out paragraph (3)(C)) in the case
of a targeted low-income pregnant woman provided pregnancy-
related assistance under section 2112.''.
SEC. 112. PHASE-OUT OF COVERAGE FOR NONPREGNANT CHILDLESS ADULTS
UNDER CHIP; CONDITIONS FOR COVERAGE OF PARENTS.
(a) Phase-Out Rules.--
(1) In general.--Title XXI (42 U.S.C. 1397aa et seq.) is
amended by adding at the end the following new section:
``SEC. 2111. PHASE-OUT OF COVERAGE FOR NONPREGNANT CHILDLESS ADULTS;
CONDITIONS FOR COVERAGE OF PARENTS.
``(a) Termination of Coverage for Nonpregnant Childless Adults.--
``(1) No new chip waivers; automatic extensions at state option
through fiscal year 2008.--Notwithstanding section 1115 or any
other provision of this title, except as provided in this
subsection--
``(A) the Secretary shall not on or after the date of the
enactment of the Children's Health Insurance Program
Reauthorization Act of 2007, approve or renew a waiver,
experimental, pilot, or demonstration project that would allow
funds made available under this title to be used to provide
child health assistance or other health benefits coverage to a
nonpregnant childless adult; and
``(B) notwithstanding the terms and conditions of an
applicable existing waiver, the provisions of paragraphs (2)
and (3) shall apply for purposes of any fiscal year beginning
on or after October 1, 2008, in determining the period to which
the waiver applies, the individuals eligible to be covered by
the waiver, and the amount of the Federal payment under this
title.
``(2) Termination of chip coverage under applicable existing
waivers at the end of fiscal year 2008.--
``(A) In general.--No funds shall be available under this
title for child health assistance or other health benefits
coverage that is provided to a nonpregnant childless adult
under an applicable existing waiver after September 30, 2008.
``(B) Extension upon state request.--If an applicable
existing waiver described in subparagraph (A) would otherwise
expire before October 1, 2008, and the State requests an
extension of such waiver, the Secretary shall grant such an
extension, but only through September 30, 2008.
``(C) Application of enhanced fmap.--The enhanced FMAP
determined under section 2105(b) shall apply to expenditures
under an applicable existing waiver for the provision of child
health assistance or other health benefits coverage to a
nonpregnant childless adult during fiscal year 2008.
``(3) Optional 1-year transitional coverage block grant funded
from state allotment.--Subject to paragraph (4)(B), each State for
which coverage under an applicable existing waiver is terminated
under paragraph (2)(A) may elect to provide nonpregnant childless
adults who were provided child health assistance or health benefits
coverage under the applicable existing waiver at any time during
fiscal year 2008 with such assistance or coverage during fiscal
year 2009, as if the authority to provide such assistance or
coverage under an applicable existing waiver was extended through
that fiscal year, but subject to the following terms and
conditions:
``(A) Block grant set aside from state allotment.--The
Secretary shall set aside for the State an amount equal to the
Federal share of the State's projected expenditures under the
applicable existing waiver for providing child health
assistance or health benefits coverage to all nonpregnant
childless adults under such waiver for fiscal year 2008 (as
certified by the State and submitted to the Secretary by not
later than August 31, 2008, and without regard to whether any
such individual lost coverage during fiscal year 2008 and was
later provided child health assistance or other health benefits
coverage under the waiver in that fiscal year), increased by
the annual adjustment for fiscal year 2009 determined under
section 2104(i)(5)(A). The Secretary may adjust the amount set
aside under the preceding sentence, as necessary, on the basis
of the expenditure data for fiscal year 2008 reported by States
on CMS Form 64 or CMS Form 21 not later than November 30, 2008,
but in no case shall the Secretary adjust such amount after
December 31, 2008.
``(B) No coverage for nonpregnant childless adults who were
not covered during fiscal year 2008.--
``(i) FMAP applied to expenditures.--The Secretary
shall pay the State for each quarter of fiscal year 2009,
from the amount set aside under subparagraph (A), an amount
equal to the Federal medical assistance percentage (as
determined under section 1905(b) without regard to clause
(4) of such section) of expenditures in the quarter for
providing child health assistance or other health benefits
coverage to a nonpregnant childless adult but only if such
adult was enrolled in the State program under this title
during fiscal year 2008 (without regard to whether the
individual lost coverage during fiscal year 2008 and was
reenrolled in that fiscal year or in fiscal year 2009).
``(ii) Federal payments limited to amount of block
grant set-aside.--No payments shall be made to a State for
expenditures described in this subparagraph after the total
amount set aside under subparagraph (A) for fiscal year
2009 has been paid to the State.
``(4) State option to apply for medicaid waiver to continue
coverage for nonpregnant childless adults.--
``(A) In general.--Each State for which coverage under an
applicable existing waiver is terminated under paragraph (2)(A)
may submit, not later than June 30, 2009, an application to the
Secretary for a waiver under section 1115 of the State plan
under title XIX to provide medical assistance to a nonpregnant
childless adult whose coverage is so terminated (in this
subsection referred to as a `Medicaid nonpregnant childless
adults waiver').
``(B) Deadline for approval.--The Secretary shall make a
decision to approve or deny an application for a Medicaid
nonpregnant childless adults waiver submitted under
subparagraph (A) within 90 days of the date of the submission
of the application. If no decision has been made by the
Secretary as of September 30, 2009, on the application of a
State for a Medicaid nonpregnant childless adults waiver that
was submitted to the Secretary by June 30, 2009, the
application shall be deemed approved.
``(C) Standard for budget neutrality.--The budget
neutrality requirement applicable with respect to expenditures
for medical assistance under a Medicaid nonpregnant childless
adults waiver shall--
``(i) in the case of fiscal year 2010, allow
expenditures for medical assistance under title XIX for all
such adults to not exceed the total amount of payments made
to the State under paragraph (3)(B) for fiscal year 2009,
increased by the percentage increase (if any) in the
projected nominal per capita amount of National Health
Expenditures for calendar year 2010 over calendar year
2009, as most recently published by the Secretary; and
``(ii) in the case of any succeeding fiscal year, allow
such expenditures to not exceed the amount in effect under
this subparagraph for the preceding fiscal year, increased
by the percentage increase (if any) in the projected
nominal per capita amount of National Health Expenditures
for the calendar year that begins during the fiscal year
involved over the preceding calendar year, as most recently
published by the Secretary.
``(b) Rules and Conditions for Coverage of Parents of Targeted Low-
Income Children.--
``(1) Two-year transition period; automatic extension at state
option through fiscal year 2009.--
``(A) No new chip waivers.--Notwithstanding section 1115 or
any other provision of this title, except as provided in this
subsection--
``(i) the Secretary shall not on or after the date of
the enactment of the Children's Health Insurance Program
Reauthorization Act of 2007 approve or renew a waiver,
experimental, pilot, or demonstration project that would
allow funds made available under this title to be used to
provide child health assistance or other health benefits
coverage to a parent of a targeted low-income child; and
``(ii) notwithstanding the terms and conditions of an
applicable existing waiver, the provisions of paragraphs
(2) and (3) shall apply for purposes of any fiscal year
beginning on or after October 1, 2009, in determining the
period to which the waiver applies, the individuals
eligible to be covered by the waiver, and the amount of the
Federal payment under this title.
``(B) Extension upon state request.--If an applicable
existing waiver described in subparagraph (A) would otherwise
expire before October 1, 2009, and the State requests an
extension of such waiver, the Secretary shall grant such an
extension, but only, subject to paragraph (2)(A), through
September 30, 2009.
``(C) Application of enhanced fmap.--The enhanced FMAP
determined under section 2105(b) shall apply to expenditures
under an applicable existing waiver for the provision of child
health assistance or other health benefits coverage to a parent
of a targeted low-income child during fiscal years 2008 and
2009.
``(2) Rules for fiscal years 2010 through 2012.--
``(A) Payments for coverage limited to block grant funded
from state allotment.--Any State that provides child health
assistance or health benefits coverage under an applicable
existing waiver for a parent of a targeted low-income child may
elect to continue to provide such assistance or coverage
through fiscal year 2010, 2011, or 2012, subject to the same
terms and conditions that applied under the applicable existing
waiver, unless otherwise modified in subparagraph (B).
``(B) Terms and conditions.--
``(i) Block grant set aside from state allotment.--If
the State makes an election under subparagraph (A), the
Secretary shall set aside for the State for each such
fiscal year an amount equal to the Federal share of 110
percent of the State's projected expenditures under the
applicable existing waiver for providing child health
assistance or health benefits coverage to all parents of
targeted low-income children enrolled under such waiver for
the fiscal year (as certified by the State and submitted to
the Secretary by not later than August 31 of the preceding
fiscal year). In the case of fiscal year 2012, the set
aside for any State shall be computed separately for each
period described in subparagraphs (A) and (B) of section
2104(a)(15) and any reduction in the allotment for either
such period under section 2104(i)(4) shall be allocated on
a pro rata basis to such set aside.
``(ii) Payments from block grant.--The Secretary shall
pay the State from the amount set aside under clause (i)
for the fiscal year, an amount for each quarter of such
fiscal year equal to the applicable percentage determined
under clause (iii) or (iv) for expenditures in the quarter
for providing child health assistance or other health
benefits coverage to a parent of a targeted low-income
child.
``(iii) Enhanced fmap only in fiscal year 2010 for
states with significant child outreach or that achieve
child coverage benchmarks; fmap for any other states.--For
purposes of clause (ii), the applicable percentage for any
quarter of fiscal year 2010 is equal to--
``(I) the enhanced FMAP determined under section
2105(b) in the case of a State that meets the outreach
or coverage benchmarks described in any of subparagraph
(A), (B), or (C) of paragraph (3) for fiscal year 2009;
or
``(II) the Federal medical assistance percentage
(as determined under section 1905(b) without regard to
clause (4) of such section) in the case of any other
State.
``(iv) Amount of federal matching payment in 2011 or
2012.--For purposes of clause (ii), the applicable
percentage for any quarter of fiscal year 2011 or 2012 is
equal to--
``(I) the REMAP percentage if--
``(aa) the applicable percentage for the State
under clause (iii) was the enhanced FMAP for fiscal
year 2009; and
``(bb) the State met either of the coverage
benchmarks described in subparagraph (B) or (C) of
paragraph (3) for the preceding fiscal year; or
``(II) the Federal medical assistance percentage
(as so determined) in the case of any State to which
subclause (I) does not apply.
For purposes of subclause (I), the REMAP percentage is the
percentage which is the sum of such Federal medical
assistance percentage and a number of percentage points
equal to one-half of the difference between such Federal
medical assistance percentage and such enhanced FMAP.
``(v) No federal payments other than from block grant
set aside.--No payments shall be made to a State for
expenditures described in clause (ii) after the total
amount set aside under clause (i) for a fiscal year has
been paid to the State.
``(vi) No increase in income eligibility level for
parents.--No payments shall be made to a State from the
amount set aside under clause (i) for a fiscal year for
expenditures for providing child health assistance or
health benefits coverage to a parent of a targeted low-
income child whose family income exceeds the income
eligibility level applied under the applicable existing
waiver to parents of targeted low-income children on the
date of enactment of the Children's Health Insurance
Program Reauthorization Act of 2007.
``(3) Outreach or coverage benchmarks.--For purposes of
paragraph (2), the outreach or coverage benchmarks described in
this paragraph are as follows:
``(A) Significant child outreach campaign.--The State--
``(i) was awarded a grant under section 2113 for fiscal
year 2009;
``(ii) implemented 1 or more of the enrollment and
retention provisions described in section 2105(a)(4) for
such fiscal year; or
``(iii) has submitted a specific plan for outreach for
such fiscal year.
``(B) High-performing state.--The State, on the basis of
the most timely and accurate published estimates of the Bureau
of the Census, ranks in the lowest \1/3\ of States in terms of
the State's percentage of low-income children without health
insurance.
``(C) State increasing enrollment of low-income children.--
The State qualified for a performance bonus payment under
section 2105(a)(3)(B) for the most recent fiscal year
applicable under such section.
``(4) Rules of construction.--Nothing in this subsection shall
be construed as prohibiting a State from submitting an application
to the Secretary for a waiver under section 1115 of the State plan
under title XIX to provide medical assistance to a parent of a
targeted low-income child that was provided child health assistance
or health benefits coverage under an applicable existing waiver.
``(c) Applicable Existing Waiver.--For purposes of this section--
``(1) In general.--The term `applicable existing waiver' means
a waiver, experimental, pilot, or demonstration project under
section 1115, grandfathered under section 6102(c)(3) of the Deficit
Reduction Act of 2005, or otherwise conducted under authority
that--
``(A) would allow funds made available under this title to
be used to provide child health assistance or other health
benefits coverage to--
``(i) a parent of a targeted low-income child;
``(ii) a nonpregnant childless adult; or
``(iii) individuals described in both clauses (i) and
(ii); and
``(B) was in effect during fiscal year 2007.
``(2) Definitions.--
``(A) Parent.--The term `parent' includes a caretaker
relative (as such term is used in carrying out section 1931)
and a legal guardian.
``(B) Nonpregnant childless adult.--The term `nonpregnant
childless adult' has the meaning given such term by section
2107(f).''.
(2) Conforming amendments.--
(A) Section 2107(f) (42 U.S.C. 1397gg(f)) is amended--
(i) by striking ``, the Secretary'' and inserting ``:
``(1) The Secretary'';
(ii) in the first sentence, by inserting ``or a parent
(as defined in section 2111(c)(2)(A)), who is not pregnant,
of a targeted low-income child'' before the period;
(iii) by striking the second sentence; and
(iv) by adding at the end the following new paragraph:
``(2) The Secretary may not approve, extend, renew, or amend a
waiver, experimental, pilot, or demonstration project with respect
to a State after the date of enactment of the Children's Health
Insurance Program Reauthorization Act of 2007 that would waive or
modify the requirements of section 2111.''.
(B) Section 6102(c) of the Deficit Reduction Act of 2005
(Public Law 109-171; 120 Stat. 131) is amended by striking
``Nothing'' and inserting ``Subject to section 2111 of the
Social Security Act, as added by section 112 of the Children's
Health Insurance Program Reauthorization Act of 2007,
nothing''.
(b) GAO Study and Report.--
(1) In general.--The Comptroller General of the United States
shall conduct a study of whether--
(A) the coverage of a parent, a caretaker relative (as such
term is used in carrying out section 1931), or a legal guardian
of a targeted low-income child under a State health plan under
title XXI of the Social Security Act increases the enrollment
of, or the quality of care for, children, and
(B) such parents, relatives, and legal guardians who enroll
in such a plan are more likely to enroll their children in such
a plan or in a State plan under title XIX of such Act.
(2) Report.--Not later than 2 years after the date of the
enactment of this Act, the Comptroller General shall report the
results of the study to the Committee on Finance of the Senate and
the Committee on Energy and Commerce of the House of
Representatives, including recommendations (if any) for changes in
legislation.
SEC. 113. ELIMINATION OF COUNTING MEDICAID CHILD PRESUMPTIVE
ELIGIBILITY COSTS AGAINST TITLE XXI ALLOTMENT.
(a) In General.--Section 2105(a)(1) (42 U.S.C. 1397ee(a)(1)) is
amended--
(1) in the matter preceding subparagraph (A), by striking
``(or, in the case of expenditures described in subparagraph (B),
the Federal medical assistance percentage (as defined in the first
sentence of section 1905(b)))''; and
(2) by striking subparagraph (B) and inserting the following
new subparagraph:
``(B) [reserved]''.
(b) Amendments to Medicaid.--
(1) Eligibility of a newborn.--Section 1902(e)(4) (42 U.S.C.
1396a(e)(4)) is amended in the first sentence by striking ``so long
as the child is a member of the woman's household and the woman
remains (or would remain if pregnant) eligible for such
assistance''.
(2) Application of qualified entities to presumptive
eligibility for pregnant women under medicaid.--Section 1920(b) (42
U.S.C. 1396r-1(b)) is amended by adding after paragraph (2) the
following flush sentence:
``The term `qualified provider' also includes a qualified entity, as
defined in section 1920A(b)(3).''.
SEC. 114. LIMITATION ON MATCHING RATE FOR STATES THAT PROPOSE TO
COVER CHILDREN WITH EFFECTIVE FAMILY INCOME THAT EXCEEDS 300
PERCENT OF THE POVERTY LINE.
(a) FMAP Applied to Expenditures.--Section 2105(c) (42 U.S.C.
1397ee(c)) is amended by adding at the end the following new paragraph:
``(8) Limitation on matching rate for expenditures for child
health assistance provided to children whose effective family
income exceeds 300 percent of the poverty line.--
``(A) FMAP applied to expenditures.--Except as provided in
subparagraph (B), for fiscal years beginning with fiscal year
2008, the Federal medical assistance percentage (as determined
under section 1905(b) without regard to clause (4) of such
section) shall be substituted for the enhanced FMAP under
subsection (a)(1) with respect to any expenditures for
providing child health assistance or health benefits coverage
for a targeted low-income child whose effective family income
would exceed 300 percent of the poverty line but for the
application of a general exclusion of a block of income that is
not determined by type of expense or type of income.
``(B) Exception.--Subparagraph (A) shall not apply to any
State that, on the date of enactment of the Children's Health
Insurance Program Reauthorization Act of 2007, has an approved
State plan amendment or waiver to provide, or has enacted a
State law to submit a State plan amendment to provide,
expenditures described in such subparagraph under the State
child health plan.''.
(b) Rule of Construction.--Nothing in the amendments made by this
section shall be construed as--
(1) changing any income eligibility level for children under
title XXI of the Social Security Act; or
(2) changing the flexibility provided States under such title
to establish the income eligibility level for targeted low-income
children under a State child health plan and the methodologies used
by the State to determine income or assets under such plan.
SEC. 115. STATE AUTHORITY UNDER MEDICAID.
(a) State Authority to Expand Income or Resource Eligibility Levels
for Children.--Nothing in this Act, the amendments made by this Act, or
title XIX of the Social Security Act, including paragraph (2)(B) of
section 1905(u) of such Act, shall be construed as limiting the
flexibility afforded States under such title to increase the income or
resource eligibility levels for children under a State plan or waiver
under such title.
(b) State Authority to Receive Payments Under Medicaid for
Providing Medical Assistance to Children Eligible as a Result of an
Income or Resource Eligibility Level Expansion.--A State may,
notwithstanding the fourth sentence of subsection (b) of section 1905
of the Social Security Act (42 U.S.C. 1396d) or subsection (u) of such
section--
(1) cover individuals described in section
1902(a)(10)(A)(ii)(IX) of the Social Security Act and thereby
receive Federal financial participation for medical assistance for
such individuals under title XIX of the Social Security Act; or
(2) receive Federal financial participation for expenditures
for medical assistance under Medicaid for children described in
paragraph (2)(B) or (3) of section 1905(u) of such Act based on the
Federal medical assistance percentage, as otherwise determined
based on the first and third sentences of subsection (b) of section
1905 of the Social Security Act, rather than on the basis of an
enhanced FMAP (as defined in section 2105(b) of such Act).
SEC. 116. PREVENTING SUBSTITUTION OF CHIP COVERAGE FOR PRIVATE
COVERAGE.
(a) Findings.--
(1) Congress agrees with the President that low-income children
should be the first priority of all States in providing child
health assistance under CHIP.
(2) Congress agrees with the President and the Congressional
Budget Office that the substitution of CHIP coverage for private
coverage occurs more frequently for children in families at higher
income levels.
(3) Congress agrees with the President that it is appropriate
that States that expand CHIP eligibility to children at higher
income levels should have achieved a high level of health benefits
coverage for low-income children and should implement strategies to
address such substitution.
(4) Congress concludes that the policies specified in this
section (and the amendments made by this section) are the
appropriate policies to address these issues.
(b) Analyses of Best Practices and Methodology in Addressing Crowd-
Out.--
(1) GAO report.--Not later than 18 months after the date of the
enactment of this Act, the Comptroller General of the United States
shall submit to the Committee on Finance of the Senate and the
Committee on Energy and Commerce of the House of Representatives
and the Secretary a report describing the best practices by States
in addressing the issue of CHIP crowd-out. Such report shall
include analyses of--
(A) the impact of different geographic areas, including
urban and rural areas, on CHIP crowd-out;
(B) the impact of different State labor markets on CHIP
crowd-out;
(C) the impact of different strategies for addressing CHIP
crowd-out;
(D) the incidence of crowd-out for children with different
levels of family income; and
(E) the relationship (if any) between changes in the
availability and affordability of dependent coverage under
employer-sponsored health insurance and CHIP crowd-out.
(2) IOM report on methodology.--The Secretary shall enter into
an arrangement with the Institute of Medicine under which the
Institute submits to the Committee on Finance of the Senate and the
Committee on Energy and Commerce of the House of Representatives
and the Secretary, not later than 18 months after the date of the
enactment of this Act, a report on--
(A) the most accurate, reliable, and timely way to
measure--
(i) on a State-by-State basis, the rate of public and
private health benefits coverage among low-income children
with family income that does not exceed 200 percent of the
poverty line; and
(ii) CHIP crowd-out, including in the case of children
with family income that exceeds 200 percent of the poverty
line; and
(B) the least burdensome way to gather the necessary data
to conduct the measurements described in subparagraph (A).
Out of any money in the Treasury not otherwise appropriated, there
are hereby appropriated $2,000,000 to carry out this paragraph for
the period ending September 30, 2009.
(3) Incorporation of definitions.--In this section, the terms
``CHIP crowd-out'', ``children'', ``poverty line'', and ``State''
have the meanings given such terms for purposes of CHIP.
(4) Definition of chip crowd-out.--Section 2110(c) (42 U.S.C.
1397jj(c)) is amended by adding at the end the following:
``(9) CHIP crowd-out.--The term `CHIP crowd-out' means the
substitution of--
``(A) health benefits coverage for a child under this
title, for
``(B) health benefits coverage for the child other than
under this title or title XIX.''.
(c) Development of Best Practice Recommendations.--Section 2107 (42
U.S.C. 1397gg) is amended by adding at the end the following:
``(g) Development of Best Practice Recommendations.--Within 6
months after the date of receipt of the reports under subsections (a)
and (b) of section 116 of the Children's Health Insurance Program
Reauthorization Act of 2007, the Secretary, in consultation with
States, including Medicaid and CHIP directors in States, shall publish
in the Federal Register, and post on the public website for the
Department of Health and Human Services--
``(1) recommendations regarding best practices for States to
use to address CHIP crowd-out; and
``(2) uniform standards for data collection by States to
measure and report--
``(A) health benefits coverage for children with family
income below 200 percent of the poverty line; and
``(B) on CHIP crowd-out, including for children with family
income that exceeds 200 percent of the poverty line.
The Secretary, in consultation with States, including Medicaid and CHIP
directors in States, may from time to time update the best practice
recommendations and uniform standards set published under paragraphs
(1) and (2) and shall provide for publication and posting of such
updated recommendations and standards.''.
(d) Requirement to Address CHIP Crowd-Out; Secretarial Review.--
Section 2106 (42 U.S.C. 1397ff) is amended by adding at the end the
following:
``(f) Requirement to Address CHIP Crowd-Out; Secretarial Review.--
``(1) In general.--Each State that, on or after the best
practice application date described in paragraph (3), submits a
plan amendment (or waiver request) to provide for eligibility for
child health assistance under the State child health plan for
higher income children described in section 2105(c)(9)(D) (relating
to children whose effective family income exceeds 300 percent of
the poverty line) shall include with such plan amendment or request
a description of how the State--
``(A) will address CHIP crowd-out for such children; and
``(B) will incorporate recommended best practices referred
to in such paragraph.
``(2) Application to certain states.--Each State that, as of
the best practice application date described in paragraph (3), has
a State child health plan that provides (whether under the plan or
through a waiver) for eligibility for child health assistance for
children referred to in paragraph (1) shall submit to the
Secretary, not later than 6 months after the date of such
application, a State plan amendment describing how the State--
``(A) will address CHIP crowd-out for such children; and
``(B) will incorporate recommended best practices referred
to in such paragraph.
``(3) Best practice application date.--The best practice
application date described in this paragraph is the date that is 6
months after the date of publication of recommendations regarding
best practices under section 2107(g)(1).
``(4) Secretarial review.--The Secretary shall--
``(A) review each State plan amendment or waiver request
submitted under paragraph (1) or (2);
``(B) determine whether the amendment or request
incorporates recommended best practices referred to in
paragraph (3);
``(C) determine whether the State meets the enrollment
targets required under reference section 2105(c)(9)(C); and
``(D) notify the State of such determinations.''.
(e) Limitation on Payments for States Covering Higher Income
Children.--Section 2105(c) (42 U.S.C. 1397ee(c)), as amended by section
114(a), is amended by adding at the end the following new subsection:
``(9) Limitation on payments for states covering higher income
children.--
``(A) Determinations.--
``(i) In general.--The Secretary shall determine, for
each State that is a higher income eligibility State as of
April 1 of 2010 and each subsequent year, whether the State
meets the target rate of coverage of low-income children
required under subparagraph (C) and shall notify the State
in that month of such determination.
``(ii) Determination of failure.--If the Secretary
determines in such month that a higher income eligibility
State does not meet such target rate of coverage, subject
to subparagraph (E), no payment shall be made as of October
1 of such year on or after October 1, 2010, under this
section for child health assistance provided for higher-
income children (as defined in subparagraph (D)) under the
State child health plan unless and until the State
establishes it is in compliance with such requirement.
``(B) Higher income eligibility state.--A higher income
eligibility State described in this clause is a State that--
``(i) applies under its State child health plan an
eligibility income standard for targeted low-income
children that exceeds 300 percent of the poverty line; or
``(ii) because of the application of a general
exclusion of a block of income that is not determined by
type of expense or type of income, applies an effective
income standard under the State child health plan for such
children that exceeds 300 percent of the poverty line.
``(C) Requirement for target rate of coverage of low-income
children.--
``(i) In general.--The requirement of this subparagraph
for a State is that the rate of health benefits coverage
(both private and public) for low-income children in the
State is not statistically significantly (at a p=0.05
level) less than the target rate of coverage specified in
clause (ii).
``(ii) Target rate.--The target rate of coverage
specified in this clause is the average rate (determined by
the Secretary) of health benefits coverage (both private
and public) as of January 1, 2010, among the 10 of the 50
States and the District of Columbia with the highest
percentage of health benefits coverage (both private and
public) for low-income children.
``(iii) Standards for data.--In applying this
subparagraph, rates of health benefits coverage for States
shall be determined using the uniform standards identified
by the Secretary under section 2107(g)(2).
``(D) Higher-income child.--For purposes of this paragraph,
the term `higher income child' means, with respect to a State
child health plan, a targeted low-income child whose family
income--
``(i) exceeds 300 percent of the poverty line; or
``(ii) would exceed 300 percent of the poverty line if
there were not taken into account any general exclusion
described in subparagraph (B)(ii).
``(E) Notice and opportunity to comply with target rate.--
If the Secretary makes a determination described in
subparagraph (A)(ii) in April of a year, the Secretary--
``(i) shall provide the State with the opportunity to
submit and implement a corrective action plan for the State
to come into compliance with the requirement of
subparagraph (C) before October 1 of such year;
``(ii) shall not effect a denial of payment under
subparagraph (A) on the basis of such determination before
October 1 of such year; and
``(iii) shall not effect such a denial if the Secretary
determines that there is a reasonable likelihood that the
implementation of such a correction action plan will bring
the State into compliance with the requirement of
subparagraph (C).''.
(f) Treatment of Medical Support Orders.--Section 2102(b) (42
U.S.C. 1397bb(c)) is amended by adding at the end the following:
``(5) Treatment of medical support orders.--
``(A) In general.--Nothing in this title shall be construed
to allow the Secretary to require that a State deny eligibility
for child health assistance to a child who is otherwise
eligible on the basis of the existence of a valid medical
support order being in effect.
``(B) State election.--A State may elect to limit
eligibility for child health assistance to a targeted low-
income child on the basis of the existence of a valid medical
support order on the child's behalf, but only if the State does
not deny such eligibility for a child on such basis if the
child asserts that the order is not being complied with for any
of the reasons described in subparagraph (C) unless the State
demonstrates that none of such reasons applies in the case
involved.
``(C) Reasons for noncompliance.--The reasons described in
this subparagraph for noncompliance with a medical support
order with respect to a child are that the child is not being
provided health benefits coverage pursuant to such order
because--
``(i) of failure of the noncustodial parent to comply
with the order;
``(ii) of the failure of an employer, group health plan
or health insurance issuer to comply with such order; or
``(iii) the child resides in a geographic area in which
benefits under the health benefits coverage are generally
unavailable.''.
(g) Effective Date of Amendments; Consistency of Policies.--The
amendments made by this section shall take effect as if enacted on
August 16, 2007. The Secretary may not impose (or continue in effect)
any requirement, prevent the implementation of any provision, or
condition the approval of any provision under any State child health
plan, State plan amendment, or waiver request on the basis of any
policy or interpretation relating to CHIP crowd-out or medical support
order other than under the amendments made by this section.
TITLE II--OUTREACH AND ENROLLMENT
Subtitle A--Outreach and Enrollment Activities
SEC. 201. GRANTS AND ENHANCED ADMINISTRATIVE FUNDING FOR OUTREACH
AND ENROLLMENT.
(a) Grants.--Title XXI (42 U.S.C. 1397aa et seq.), as amended by
section 107, is amended by adding at the end the following:
``SEC. 2113. GRANTS TO IMPROVE OUTREACH AND ENROLLMENT.
``(a) Outreach and Enrollment Grants; National Campaign.--
``(1) In general.--From the amounts appropriated under
subsection (g), subject to paragraph (2), the Secretary shall award
grants to eligible entities during the period of fiscal years 2008
through 2012 to conduct outreach and enrollment efforts that are
designed to increase the enrollment and participation of eligible
children under this title and title XIX.
``(2) Ten percent set aside for national enrollment campaign.--
An amount equal to 10 percent of such amounts shall be used by the
Secretary for expenditures during such period to carry out a
national enrollment campaign in accordance with subsection (h).
``(b) Priority for Award of Grants.--
``(1) In general.--In awarding grants under subsection (a), the
Secretary shall give priority to eligible entities that--
``(A) propose to target geographic areas with high rates
of--
``(i) eligible but unenrolled children, including such
children who reside in rural areas; or
``(ii) racial and ethnic minorities and health
disparity populations, including those proposals that
address cultural and linguistic barriers to enrollment; and
``(B) submit the most demonstrable evidence required under
paragraphs (1) and (2) of subsection (c).
``(2) Ten percent set aside for outreach to indian children.--
An amount equal to 10 percent of the funds appropriated under
subsection (g) shall be used by the Secretary to award grants to
Indian Health Service providers and urban Indian organizations
receiving funds under title V of the Indian Health Care Improvement
Act (25 U.S.C. 1651 et seq.) for outreach to, and enrollment of,
children who are Indians.
``(c) Application.--An eligible entity that desires to receive a
grant under subsection (a) shall submit an application to the Secretary
in such form and manner, and containing such information, as the
Secretary may decide. Such application shall include--
``(1) evidence demonstrating that the entity includes members
who have access to, and credibility with, ethnic or low-income
populations in the communities in which activities funded under the
grant are to be conducted;
``(2) evidence demonstrating that the entity has the ability to
address barriers to enrollment, such as lack of awareness of
eligibility, stigma concerns and punitive fears associated with
receipt of benefits, and other cultural barriers to applying for
and receiving child health assistance or medical assistance;
``(3) specific quality or outcomes performance measures to
evaluate the effectiveness of activities funded by a grant awarded
under this section; and
``(4) an assurance that the eligible entity shall--
``(A) conduct an assessment of the effectiveness of such
activities against the performance measures;
``(B) cooperate with the collection and reporting of
enrollment data and other information in order for the
Secretary to conduct such assessments; and
``(C) in the case of an eligible entity that is not the
State, provide the State with enrollment data and other
information as necessary for the State to make necessary
projections of eligible children and pregnant women.
``(d) Dissemination of Enrollment Data and Information Determined
From Effectiveness Assessments; Annual Report.--The Secretary shall--
``(1) make publicly available the enrollment data and
information collected and reported in accordance with subsection
(c)(4)(B); and
``(2) submit an annual report to Congress on the outreach and
enrollment activities conducted with funds appropriated under this
section.
``(e) Maintenance of Effort for States Awarded Grants; No State
Match Required.--In the case of a State that is awarded a grant under
this section--
``(1) the State share of funds expended for outreach and
enrollment activities under the State child health plan shall not
be less than the State share of such funds expended in the fiscal
year preceding the first fiscal year for which the grant is
awarded; and
``(2) no State matching funds shall be required for the State
to receive a grant under this section.
``(f) Definitions.--In this section:
``(1) Eligible entity.--The term `eligible entity' means any of
the following:
``(A) A State with an approved child health plan under this
title.
``(B) A local government.
``(C) An Indian tribe or tribal consortium, a tribal
organization, an urban Indian organization receiving funds
under title V of the Indian Health Care Improvement Act (25
U.S.C. 1651 et seq.), or an Indian Health Service provider.
``(D) A Federal health safety net organization.
``(E) A national, State, local, or community-based public
or nonprofit private organization, including organizations that
use community health workers or community-based doula programs.
``(F) A faith-based organization or consortia, to the
extent that a grant awarded to such an entity is consistent
with the requirements of section 1955 of the Public Health
Service Act (42 U.S.C. 300x-65) relating to a grant award to
nongovernmental entities.
``(G) An elementary or secondary school.
``(2) Federal health safety net organization.--The term
`Federal health safety net organization' means--
``(A) a Federally-qualified health center (as defined in
section 1905(l)(2)(B));
``(B) a hospital defined as a disproportionate share
hospital for purposes of section 1923;
``(C) a covered entity described in section 340B(a)(4) of
the Public Health Service Act (42 U.S.C. 256b(a)(4)); and
``(D) any other entity or consortium that serves children
under a federally funded program, including the special
supplemental nutrition program for women, infants, and children
(WIC) established under section 17 of the Child Nutrition Act
of 1966 (42 U.S.C. 1786), the Head Start and Early Head Start
programs under the Head Start Act (42 U.S.C. 9801 et seq.), the
school lunch program established under the Richard B. Russell
National School Lunch Act, and an elementary or secondary
school.
``(3) Indians; indian tribe; tribal organization; urban indian
organization.--The terms `Indian', `Indian tribe', `tribal
organization', and `urban Indian organization' have the meanings
given such terms in section 4 of the Indian Health Care Improvement
Act (25 U.S.C. 1603).
``(4) Community health worker.--The term `community health
worker' means an individual who promotes health or nutrition within
the community in which the individual resides--
``(A) by serving as a liaison between communities and
health care agencies;
``(B) by providing guidance and social assistance to
community residents;
``(C) by enhancing community residents' ability to
effectively communicate with health care providers;
``(D) by providing culturally and linguistically
appropriate health or nutrition education;
``(E) by advocating for individual and community health or
nutrition needs; and
``(F) by providing referral and followup services.
``(g) Appropriation.--There is appropriated, out of any money in
the Treasury not otherwise appropriated, $100,000,000 for the period of
fiscal years 2008 through 2012, for the purpose of awarding grants
under this section. Amounts appropriated and paid under the authority
of this section shall be in addition to amounts appropriated under
section 2104 and paid to States in accordance with section 2105,
including with respect to expenditures for outreach activities in
accordance with subsections (a)(1)(D)(iii) and (c)(2)(C) of that
section.
``(h) National Enrollment Campaign.--From the amounts made
available under subsection (a)(2), the Secretary shall develop and
implement a national enrollment campaign to improve the enrollment of
underserved child populations in the programs established under this
title and title XIX. Such campaign may include--
``(1) the establishment of partnerships with the Secretary of
Education and the Secretary of Agriculture to develop national
campaigns to link the eligibility and enrollment systems for the
assistance programs each Secretary administers that often serve the
same children;
``(2) the integration of information about the programs
established under this title and title XIX in public health
awareness campaigns administered by the Secretary;
``(3) increased financial and technical support for enrollment
hotlines maintained by the Secretary to ensure that all States
participate in such hotlines;
``(4) the establishment of joint public awareness outreach
initiatives with the Secretary of Education and the Secretary of
Labor regarding the importance of health insurance to building
strong communities and the economy;
``(5) the development of special outreach materials for Native
Americans or for individuals with limited English proficiency; and
``(6) such other outreach initiatives as the Secretary
determines would increase public awareness of the programs under
this title and title XIX.''.
(b) Enhanced Administrative Funding for Translation or
Interpretation Services Under CHIP and Medicaid.--
(1) CHIP.--Section 2105(a)(1) (42 U.S.C. 1397ee(a)(1)), as
amended by section 113, is amended--
(A) in the matter preceding subparagraph (A), by inserting
``(or, in the case of expenditures described in subparagraph
(D)(iv), the higher of 75 percent or the sum of the enhanced
FMAP plus 5 percentage points)'' after ``enhanced FMAP''; and
(B) in subparagraph (D)--
(i) in clause (iii), by striking ``and'' at the end;
(ii) by redesignating clause (iv) as clause (v); and
(iii) by inserting after clause (iii) the following new
clause:
``(iv) for translation or interpretation services in
connection with the enrollment of, retention of, and use of
services under this title by, individuals for whom English
is not their primary language (as found necessary by the
Secretary for the proper and efficient administration of
the State plan); and''.
(2) Medicaid.--
(A) Use of medicaid funds.--Section 1903(a)(2) (42 U.S.C.
1396b(a)(2)) is amended by adding at the end the following new
subparagraph:
``(E) an amount equal to 75 percent of so much of the sums
expended during such quarter (as found necessary by the Secretary
for the proper and efficient administration of the State plan) as
are attributable to translation or interpretation services in
connection with the enrollment of, retention of, and use of
services under this title by, children of families for whom English
is not the primary language; plus''.
(B) Use of community health workers for outreach
activities.--
(i) In general.--Section 2102(c)(1) of such Act (42
U.S.C. 1397bb(c)(1)) is amended by inserting ``(through
community health workers and others)'' after ``Outreach''.
(ii) In federal evaluation.--Section 2108(c)(3)(B) of
such Act (42 U.S.C. 1397hh(c)(3)(B)) is amended by
inserting ``(such as through community health workers and
others)'' after ``including practices''.
SEC. 202. INCREASED OUTREACH AND ENROLLMENT OF INDIANS.
(a) In General.--Section 1139 (42 U.S.C. 1320b-9) is amended to
read as follows:
``SEC. 1139. IMPROVED ACCESS TO, AND DELIVERY OF, HEALTH CARE FOR
INDIANS UNDER TITLES XIX AND XXI.
``(a) Agreements With States for Medicaid and CHIP Outreach On or
Near Reservations To Increase the Enrollment of Indians in Those
Programs.--
``(1) In general.--In order to improve the access of Indians
residing on or near a reservation to obtain benefits under the
Medicaid and State children's health insurance programs established
under titles XIX and XXI, the Secretary shall encourage the State
to take steps to provide for enrollment on or near the reservation.
Such steps may include outreach efforts such as the outstationing
of eligibility workers, entering into agreements with the Indian
Health Service, Indian Tribes, Tribal Organizations, and Urban
Indian Organizations to provide outreach, education regarding
eligibility and benefits, enrollment, and translation services when
such services are appropriate.
``(2) Construction.--Nothing in paragraph (1) shall be
construed as affecting arrangements entered into between States and
the Indian Health Service, Indian Tribes, Tribal Organizations, or
Urban Indian Organizations for such Service, Tribes, or
Organizations to conduct administrative activities under such
titles.
``(b) Requirement To Facilitate Cooperation.--The Secretary, acting
through the Centers for Medicare & Medicaid Services, shall take such
steps as are necessary to facilitate cooperation with, and agreements
between, States and the Indian Health Service, Indian Tribes, Tribal
Organizations, or Urban Indian Organizations with respect to the
provision of health care items and services to Indians under the
programs established under title XIX or XXI.
``(c) Definition of Indian; Indian Tribe; Indian Health Program;
Tribal Organization; Urban Indian Organization.--In this section, the
terms `Indian', `Indian Tribe', `Indian Health Program', `Tribal
Organization', and `Urban Indian Organization' have the meanings given
those terms in section 4 of the Indian Health Care Improvement Act.''.
(b) Nonapplication of 10 Percent Limit on Outreach and Certain
Other Expenditures.--Section 2105(c)(2) (42 U.S.C. 1397ee(c)(2)) is
amended by adding at the end the following:
``(C) Nonapplication to certain expenditures.--The
limitation under subparagraph (A) shall not apply with respect
to the following expenditures:
``(i) Expenditures to increase outreach to, and the
enrollment of, indian children under this title and title
xix.--Expenditures for outreach activities to families of
Indian children likely to be eligible for child health
assistance under the plan or medical assistance under the
State plan under title XIX (or under a waiver of such
plan), to inform such families of the availability of, and
to assist them in enrolling their children in, such plans,
including such activities conducted under grants,
contracts, or agreements entered into under section
1139(a).''.
SEC. 203. STATE OPTION TO RELY ON FINDINGS FROM AN EXPRESS LANE
AGENCY TO CONDUCT SIMPLIFIED ELIGIBILITY DETERMINATIONS.
(a) Application Under Medicaid and CHIP Programs.--
(1) Medicaid.--Section 1902(e) (42 U.S.C. 1396a(e)) is amended
by adding at the end the following:
``(13) Express Lane Option.--
``(A) In general.--
``(i) Option to use a finding from an express lane
agency.--At the option of the State, the State plan may provide
that in determining eligibility under this title for a child
(as defined in subparagraph (G)), the State may rely on a
finding made within a reasonable period (as determined by the
State) from an Express Lane agency (as defined in subparagraph
(F)) when it determines whether a child satisfies one or more
components of eligibility for medical assistance under this
title. The State may rely on a finding from an Express Lane
agency notwithstanding sections 1902(a)(46)(B) and 1137(d) and
any differences in budget unit, disregard, deeming or other
methodology, if the following requirements are met:
``(I) Prohibition on determining children ineligible
for coverage.--If a finding from an Express Lane agency
would result in a determination that a child does not
satisfy an eligibility requirement for medical assistance
under this title and for child health assistance under
title XXI, the State shall determine eligibility for
assistance using its regular procedures.
``(II) Notice requirement.--For any child who is found
eligible for medical assistance under the State plan under
this title or child health assistance under title XXI and
who is subject to premiums based on an Express Lane
agency's finding of such child's income level, the State
shall provide notice that the child may qualify for lower
premium payments if evaluated by the State using its
regular policies and of the procedures for requesting such
an evaluation.
``(III) Compliance with screen and enroll
requirement.--The State shall satisfy the requirements
under subparagraphs (A) and (B) of section 2102(b)(3)
(relating to screen and enroll) before enrolling a child in
child health assistance under title XXI. At its option, the
State may fulfill such requirements in accordance with
either option provided under subparagraph (C) of this
paragraph.
``(IV) Verification of citizenship or nationality
status.--The State shall satisfy the requirements of
section 1902(a)(46)(B) or 2105(c)(10), as applicable for
verifications of citizenship or nationality status.
``(V) Coding.--The State meets the requirements of
subparagraph (E).
``(ii) Option to apply to renewals and redeterminations.--
The State may apply the provisions of this paragraph when
conducting initial determinations of eligibility,
redeterminations of eligibility, or both, as described in the
State plan.
``(B) Rules of construction.--Nothing in this paragraph shall
be construed--
``(i) to limit or prohibit a State from taking any actions
otherwise permitted under this title or title XXI in
determining eligibility for or enrolling children into medical
assistance under this title or child health assistance under
title XXI; or
``(ii) to modify the limitations in section 1902(a)(5)
concerning the agencies that may make a determination of
eligibility for medical assistance under this title.
``(C) Options for satisfying the screen and enroll
requirement.--
``(i) In general.--With respect to a child whose
eligibility for medical assistance under this title or for
child health assistance under title XXI has been evaluated by a
State agency using an income finding from an Express Lane
agency, a State may carry out its duties under subparagraphs
(A) and (B) of section 2102(b)(3) (relating to screen and
enroll) in accordance with either clause (ii) or clause (iii).
``(ii) Establishing a screening threshold.--
``(I) In general.--Under this clause, the State
establishes a screening threshold set as a percentage of
the Federal poverty level that exceeds the highest income
threshold applicable under this title to the child by a
minimum of 30 percentage points or, at State option, a
higher number of percentage points that reflects the value
(as determined by the State and described in the State
plan) of any differences between income methodologies used
by the program administered by the Express Lane agency and
the methodologies used by the State in determining
eligibility for medical assistance under this title.
``(II) Children with income not above threshold.--If
the income of a child does not exceed the screening
threshold, the child is deemed to satisfy the income
eligibility criteria for medical assistance under this
title regardless of whether such child would otherwise
satisfy such criteria.
``(III) Children with income above threshold.--If the
income of a child exceeds the screening threshold, the
child shall be considered to have an income above the
Medicaid applicable income level described in section
2110(b)(4) and to satisfy the requirement under section
2110(b)(1)(C) (relating to the requirement that CHIP
matching funds be used only for children not eligible for
Medicaid). If such a child is enrolled in child health
assistance under title XXI, the State shall provide the
parent, guardian, or custodial relative with the following:
``(aa) Notice that the child may be eligible to
receive medical assistance under the State plan under
this title if evaluated for such assistance under the
State's regular procedures and notice of the process
through which a parent, guardian, or custodial relative
can request that the State evaluate the child's
eligibility for medical assistance under this title
using such regular procedures.
``(bb) A description of differences between the
medical assistance provided under this title and child
health assistance under title XXI, including
differences in cost-sharing requirements and covered
benefits.
``(iii) Temporary enrollment in chip pending screen and
enroll.--
``(I) In general.--Under this clause, a State enrolls a
child in child health assistance under title XXI for a
temporary period if the child appears eligible for such
assistance based on an income finding by an Express Lane
agency.
``(II) Determination of eligibility.--During such
temporary enrollment period, the State shall determine the
child's eligibility for child health assistance under title
XXI or for medical assistance under this title in
accordance with this clause.
``(III) Prompt follow up.--In making such a
determination, the State shall take prompt action to
determine whether the child should be enrolled in medical
assistance under this title or child health assistance
under title XXI pursuant to subparagraphs (A) and (B) of
section 2102(b)(3) (relating to screen and enroll).
``(IV) Requirement for simplified determination.--In
making such a determination, the State shall use procedures
that, to the maximum feasible extent, reduce the burden
imposed on the individual of such determination. Such
procedures may not require the child's parent, guardian, or
custodial relative to provide or verify information that
already has been provided to the State agency by an Express
Lane agency or another source of information unless the
State agency has reason to believe the information is
erroneous.
``(V) Availability of chip matching funds during
temporary enrollment period.--Medical assistance for items
and services that are provided to a child enrolled in title
XXI during a temporary enrollment period under this clause
shall be treated as child health assistance under such
title.
``(D) Option for automatic enrollment.--
``(i) In general.--The State may initiate and determine
eligibility for medical assistance under the State Medicaid
plan or for child health assistance under the State CHIP plan
without a program application from, or on behalf of, the child
based on data obtained from sources other than the child (or
the child's family), but a child can only be automatically
enrolled in the State Medicaid plan or the State CHIP plan if
the child or the family affirmatively consents to being
enrolled through affirmation and signature on an Express Lane
agency application, if the requirement of clause (ii) is met.
``(ii) Information requirement.--The requirement of this
clause is that the State informs the parent, guardian, or
custodial relative of the child of the services that will be
covered, appropriate methods for using such services, premium
or other cost sharing charges (if any) that apply, medical
support obligations (under section 1912(a)) created by
enrollment (if applicable), and the actions the parent,
guardian, or relative must take to maintain enrollment and
renew coverage.
``(E) Coding; application to enrollment error rates.--
``(i) In general.--For purposes of subparagraph (A)(iv),
the requirement of this subparagraph for a State is that the
State agrees to--
``(I) assign such codes as the Secretary shall require
to the children who are enrolled in the State Medicaid plan
or the State CHIP plan through reliance on a finding made
by an Express Lane agency for the duration of the State's
election under this paragraph;
``(II) annually provide the Secretary with a
statistically valid sample (that is approved by Secretary)
of the children enrolled in such plans through reliance on
such a finding by conducting a full Medicaid eligibility
review of the children identified for such sample for
purposes of determining an eligibility error rate (as
described in clause (iv)) with respect to the enrollment of
such children (and shall not include such children in any
data or samples used for purposes of complying with a
Medicaid Eligibility Quality Control (MEQC) review or a
payment error rate measurement (PERM) requirement);
``(III) submit the error rate determined under
subclause (II) to the Secretary;
``(IV) if such error rate exceeds 3 percent for either
of the first 2 fiscal years in which the State elects to
apply this paragraph, demonstrate to the satisfaction of
the Secretary the specific corrective actions implemented
by the State to improve upon such error rate; and
``(V) if such error rate exceeds 3 percent for any
fiscal year in which the State elects to apply this
paragraph, a reduction in the amount otherwise payable to
the State under section 1903(a) for quarters for that
fiscal year, equal to the total amount of erroneous excess
payments determined for the fiscal year only with respect
to the children included in the sample for the fiscal year
that are in excess of a 3 percent error rate with respect
to such children.
``(ii) No punitive action based on error rate.--The
Secretary shall not apply the error rate derived from the
sample under clause (i) to the entire population of children
enrolled in the State Medicaid plan or the State CHIP plan
through reliance on a finding made by an Express Lane agency,
or to the population of children enrolled in such plans on the
basis of the State's regular procedures for determining
eligibility, or penalize the State on the basis of such error
rate in any manner other than the reduction of payments
provided for under clause (i)(V).
``(iii) Rule of construction.--Nothing in this paragraph
shall be construed as relieving a State that elects to apply
this paragraph from being subject to a penalty under section
1903(u), for payments made under the State Medicaid plan with
respect to ineligible individuals and families that are
determined to exceed the error rate permitted under that
section (as determined without regard to the error rate
determined under clause (i)(II)).
``(iv) Error rate defined.--In this subparagraph, the term
`error rate' means the rate of erroneous excess payments for
medical assistance (as defined in section 1903(u)(1)(D)) for
the period involved, except that such payments shall be limited
to individuals for which eligibility determinations are made
under this paragraph and except that in applying this paragraph
under title XXI, there shall be substituted for references to
provisions of this title corresponding provisions within title
XXI.
``(F) Express lane agency.--
``(i) In general.--In this paragraph, the term `Express
Lane agency' means a public agency that--
``(I) is determined by the State Medicaid agency or the
State CHIP agency (as applicable) to be capable of making
the determinations of one or more eligibility requirements
described in subparagraph (A)(i);
``(II) is identified in the State Medicaid plan or the
State CHIP plan; and
``(III) notifies the child's family--
``(aa) of the information which shall be disclosed
in accordance with this paragraph;
``(bb) that the information disclosed will be used
solely for purposes of determining eligibility for
medical assistance under the State Medicaid plan or for
child health assistance under the State CHIP plan; and
``(cc) that the family may elect to not have the
information disclosed for such purposes; and
``(IV) enters into, or is subject to, an interagency
agreement to limit the disclosure and use of the
information disclosed.
``(ii) Inclusion of specific public agencies.--Such term
includes the following:
``(I) A public agency that determines eligibility for
assistance under any of the following:
``(aa) The temporary assistance for needy families
program funded under part A of title IV.
``(bb) A State program funded under part D of title
IV.
``(cc) The State Medicaid plan.
``(dd) The State CHIP plan.
``(ee) The Food Stamp Act of 1977 (7 U.S.C. 2011 et
seq.).
``(ff) The Head Start Act (42 U.S.C. 9801 et seq.).
``(gg) The Richard B. Russell National School Lunch
Act (42 U.S.C. 1751 et seq.).
``(hh) The Child Nutrition Act of 1966 (42 U.S.C.
1771 et seq.).
``(ii) The Child Care and Development Block Grant
Act of 1990 (42 U.S.C. 9858 et seq.).
``(jj) The Stewart B. McKinney Homeless Assistance
Act (42 U.S.C. 11301 et seq.).
``(kk) The United States Housing Act of 1937 (42
U.S.C. 1437 et seq.).
``(ll) The Native American Housing Assistance and
Self-Determination Act of 1996 (25 U.S.C. 4101 et
seq.).
``(II) A State-specified governmental agency that has
fiscal liability or legal responsibility for the accuracy
of the eligibility determination findings relied on by the
State.
``(III) A public agency that is subject to an
interagency agreement limiting the disclosure and use of
the information disclosed for purposes of determining
eligibility under the State Medicaid plan or the State CHIP
plan.
``(iii) Exclusions.--Such term does not include an agency
that determines eligibility for a program established under the
Social Services Block Grant established under title XX or a
private, for-profit organization.
``(iv) Rules of construction.--Nothing in this paragraph
shall be construed as--
``(I) exempting a State Medicaid agency from complying
with the requirements of section 1902(a)(4) relating to
merit-based personnel standards for employees of the State
Medicaid agency and safeguards against conflicts of
interest); or
``(II) authorizing a State Medicaid agency that elects
to use Express Lane agencies under this subparagraph to use
the Express Lane option to avoid complying with such
requirements for purposes of making eligibility
determinations under the State Medicaid plan.
``(v) Additional definitions.--In this paragraph:
``(I) State.--The term `State' means 1 of the 50 States
or the District of Columbia.
``(II) State chip agency.--The term `State CHIP agency'
means the State agency responsible for administering the
State CHIP plan.
``(III) State chip plan.--The term `State CHIP plan'
means the State child health plan established under title
XXI and includes any waiver of such plan.
``(IV) State medicaid agency.--The term `State Medicaid
agency' means the State agency responsible for
administering the State Medicaid plan.
``(V) State medicaid plan.--The term `State Medicaid
plan' means the State plan established under title XIX and
includes any waiver of such plan.
``(G) Child defined.--For purposes of this paragraph, the term
`child' means an individual under 19 years of age, or, at the
option of a State, such higher age, not to exceed 21 years of age,
as the State may elect.
``(H) Application.--This paragraph shall not apply to with
respect to eligibility determinations made after September 30,
2012.''.
(2) CHIP.--Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is
amended by redesignating subparagraphs (B), (C), and (D) as
subparagraphs (C), (D), and (E), respectively, and by inserting
after subparagraph (A) the following new subparagraph:
``(B) Section 1902(e)(13) (relating to the State option to
rely on findings from an Express Lane agency to help evaluate a
child's eligibility for medical assistance).''.
(b) Evaluation and Report.--
(1) Evaluation.--The Secretary shall conduct, by grant,
contract, or interagency agreement, a comprehensive, independent
evaluation of the option provided under the amendments made by
subsection (a). Such evaluation shall include an analysis of the
effectiveness of the option, and shall include--
(A) obtaining a statistically valid sample of the children
who were enrolled in the State Medicaid plan or the State CHIP
plan through reliance on a finding made by an Express Lane
agency and determining the percentage of children who were
erroneously enrolled in such plans;
(B) determining whether enrolling children in such plans
through reliance on a finding made by an Express Lane agency
improves the ability of a State to identify and enroll low-
income, uninsured children who are eligible but not enrolled in
such plans;
(C) evaluating the administrative costs or savings related
to identifying and enrolling children in such plans through
reliance on such findings, and the extent to which such costs
differ from the costs that the State otherwise would have
incurred to identify and enroll low-income, uninsured children
who are eligible but not enrolled in such plans; and
(D) any recommendations for legislative or administrative
changes that would improve the effectiveness of enrolling
children in such plans through reliance on such findings.
(2) Report to congress.--Not later than September 30, 2011, the
Secretary shall submit a report to Congress on the results of the
evaluation under paragraph (1).
(3) Funding.--
(A) In general.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated to the Secretary
to carry out the evaluation under this subsection $5,000,000
for the period of fiscal years 2008 through 2011.
(B) Budget authority.--Subparagraph (A) constitutes budget
authority in advance of appropriations Act and represents the
obligation of the Federal Government to provide for the payment
of such amount to conduct the evaluation under this subsection.
(c) Electronic Transmission of Information.--Section 1902 (42
U.S.C. 1396a) is amended by adding at the end the following new
subsection:
``(dd) Electronic Transmission of Information.--If the State agency
determining eligibility for medical assistance under this title or
child health assistance under title XXI verifies an element of
eligibility based on information from an Express Lane Agency (as
defined in subsection (e)(13)(F)), or from another public agency, then
the applicant's signature under penalty of perjury shall not be
required as to such element. Any signature requirement for an
application for medical assistance may be satisfied through an
electronic signature, as defined in section 1710(1) of the Government
Paperwork Elimination Act (44 U.S.C. 3504 note). The requirements of
subparagraphs (A) and (B) of section 1137(d)(2) may be met through
evidence in digital or electronic form.''.
(d) Authorization of Information Disclosure.--
(1) In general.--Title XIX is amended--
(A) by redesignating section 1939 as section 1940; and
(B) by inserting after section 1938 the following new
section:
``SEC. 1939. AUTHORIZATION TO RECEIVE RELEVANT INFORMATION.
``(a) In General.--Notwithstanding any other provision of law, a
Federal or State agency or private entity in possession of the sources
of data directly relevant to eligibility determinations under this
title (including eligibility files maintained by Express Lane agencies
described in section 1902(e)(13)(F), information described in paragraph
(2) or (3) of section 1137(a), vital records information about births
in any State, and information described in sections 453(i) and
1902(a)(25)(I)) is authorized to convey such data or information to the
State agency administering the State plan under this title, to the
extent such conveyance meets the requirements of subsection (b).
``(b) Requirements for Conveyance.--Data or information may be
conveyed pursuant to subsection (a) only if the following requirements
are met:
``(1) The individual whose circumstances are described in the
data or information (or such individual's parent, guardian,
caretaker relative, or authorized representative) has either
provided advance consent to disclosure or has not objected to
disclosure after receiving advance notice of disclosure and a
reasonable opportunity to object.
``(2) Such data or information are used solely for the purposes
of--
``(A) identifying individuals who are eligible or
potentially eligible for medical assistance under this title
and enrolling or attempting to enroll such individuals in the
State plan; and
``(B) verifying the eligibility of individuals for medical
assistance under the State plan.
``(3) An interagency or other agreement, consistent with
standards developed by the Secretary--
``(A) prevents the unauthorized use, disclosure, or
modification of such data and otherwise meets applicable
Federal requirements safeguarding privacy and data security;
and
``(B) requires the State agency administering the State
plan to use the data and information obtained under this
section to seek to enroll individuals in the plan.
``(c) Penalties for Improper Disclosure.--
``(1) Civil money penalty.--A private entity described in the
subsection (a) that publishes, discloses, or makes known in any
manner, or to any extent not authorized by Federal law, any
information obtained under this section is subject to a civil money
penalty in an amount equal to $10,000 for each such unauthorized
publication or disclosure. The provisions of section 1128A (other
than subsections (a) and (b) and the second sentence of subsection
(f)) shall apply to a civil money penalty under this paragraph in
the same manner as such provisions apply to a penalty or proceeding
under section 1128A(a).
``(2) Criminal penalty.--A private entity described in the
subsection (a) that willfully publishes, discloses, or makes known
in any manner, or to any extent not authorized by Federal law, any
information obtained under this section shall be fined not more
than $10,000 or imprisoned not more than 1 year, or both, for each
such unauthorized publication or disclosure.
``(d) Rule of Construction.--The limitations and requirements that
apply to disclosure pursuant to this section shall not be construed to
prohibit the conveyance or disclosure of data or information otherwise
permitted under Federal law (without regard to this section).''.
(2) Conforming amendment to title xxi.--Section 2107(e)(1) (42
U.S.C. 1397gg(e)(1)), as amended by subsection (a)(2), is amended
by adding at the end the following new subparagraph:
``(F) Section 1939 (relating to authorization to receive
data directly relevant to eligibility determinations).''.
(3) Conforming amendment to provide access to data about
enrollment in insurance for purposes of evaluating applications and
for chip.--Section 1902(a)(25)(I)(i) (42 U.S.C. 1396a(a)(25)(I)(i))
is amended--
(A) by inserting ``(and, at State option, individuals who
apply or whose eligibility for medical assistance is being
evaluated in accordance with section 1902(e)(13)(D))'' after
``with respect to individuals who are eligible''; and
(B) by inserting ``under this title (and, at State option,
child health assistance under title XXI)'' after ``the State
plan''.
(e) Authorization for States Electing Express Lane Option To
Receive Certain Data Directly Relevant To Determining Eligibility and
Correct Amount of Assistance.--The Secretary shall enter into such
agreements as are necessary to permit a State that elects the Express
Lane option under section 1902(e)(13) of the Social Security Act to
receive data directly relevant to eligibility determinations and
determining the correct amount of benefits under a State child health
plan under CHIP or a State plan under Medicaid from the following:
(1) The National Directory of New Hires established under
section 453(i) of the Social Security Act (42 U.S.C. 653(i)).
(2) Data regarding enrollment in insurance that may help to
facilitate outreach and enrollment under the State Medicaid plan,
the State CHIP plan, and such other programs as the Secretary may
specify.
(f) Effective Date.--The amendments made by this section are
effective on January 1, 2008.
Subtitle B--Reducing Barriers to Enrollment
SEC. 211. VERIFICATION OF DECLARATION OF CITIZENSHIP OR NATIONALITY
FOR PURPOSES OF ELIGIBILITY FOR MEDICAID AND CHIP.
(a) State Option To Verify Declaration of Citizenship or
Nationality for Purposes of Eligibility for Medicaid Through
Verification of Name and Social Security Number.--
(1) Alternative to documentation requirement.--
(A) In general.--Section 1902 (42 U.S.C. 1396a), as amended
by section 203(c), is amended--
(i) in subsection (a)(46)--
(I) by inserting ``(A)'' after ``(46)'';
(II) by adding ``and'' after the semicolon; and
(III) by adding at the end the following new
subparagraph:
``(B) provide, with respect to an individual declaring to be a
citizen or national of the United States for purposes of
establishing eligibility under this title, that the State shall
satisfy the requirements of--
``(i) section 1903(x); or
``(ii) subsection (ee);''; and
(ii) by adding at the end the following new subsection:
``(ee)(1) For purposes of subsection (a)(46)(B)(ii), the
requirements of this subsection with respect to an individual declaring
to be a citizen or national of the United States for purposes of
establishing eligibility under this title, are, in lieu of requiring
the individual to present satisfactory documentary evidence of
citizenship or nationality under section 1903(x) (if the individual is
not described in paragraph (2) of that section), as follows:
``(A) The State submits the name and social security number of
the individual to the Commissioner of Social Security as part of
the program established under paragraph (2).
``(B) If the State receives notice from the Commissioner of
Social Security that the name or social security number of the
individual is invalid--
``(i) the State makes a reasonable effort to identify and
address the causes of such invalid match, including through
typographical or other clerical errors, by contacting the
individual to confirm the accuracy of the name or social
security number, respectively, submitted, and by taking such
additional actions as the Secretary, through regulation or
other guidance, or the State may identify, and continues to
provide the individual with medical assistance while making
such effort; and
``(ii) in the case that the name or social security number
of the individual remains invalid after such reasonable
efforts, the State--
``(I) notifies the individual of such fact;
``(II) provides the individual with a period of 90 days
from the date on which the notice required under subclause
(I) is received by the individual to either present
satisfactory documentary evidence of citizenship or
nationality (as defined in section 1903(x)(3)) or cure the
invalid determination with the Commissioner of Social
Security (and continues to provide the individual with
medical assistance during such 90-day period); and
``(III) disenrolls the individual from the State plan
under this title within 30 days after the end of such 90-
day period if no such documentary evidence is presented or
if such invalid determination is not cured.
``(2)(A) Each State electing to satisfy the requirements of this
subsection for purposes of section 1902(a)(46)(B) shall establish a
program under which the State submits each month to the Commissioner of
Social Security for verification the name and social security number of
each individual newly enrolled in the State plan under this title that
month who is not described in section 1903(x)(2).
``(B) In establishing the State program under this paragraph, the
State may enter into an agreement with the Commissioner of Social
Security--
``(i) to provide for the electronic submission and
verification, through an on-line system or otherwise, of the name
and social security number of an individual enrolled in the State
plan under this title;
``(ii) to submit to the Commissioner the names and social
security numbers of such individuals on a batch basis, provided
that such batches are submitted at least on a monthly basis; or
``(iii) to provide for the verification of the names and social
security numbers of such individuals through such other method as
agreed to by the State and the Commissioner and approved by the
Secretary, provided that such method is no more burdensome for
individuals to comply with than any burdens that may apply under a
method described in clause (i) or (ii).
``(C) The program established under this paragraph shall provide
that, in the case of any individual who is required to submit a social
security number to the State under subparagraph (A) and who is unable
to provide the State with such number, shall be provided with at least
the reasonable opportunity to present satisfactory documentary evidence
of citizenship or nationality (as defined in section 1903(x)(3)) as is
provided under clauses (i) and (ii) of section 1137(d)(4)(A) to an
individual for the submittal to the State of evidence indicating a
satisfactory immigration status.
``(3)(A) The State agency implementing the plan approved under this
title shall, at such times and in such form as the Secretary may
specify, provide information on the percentage each month that the
invalid names and numbers submitted bears to the total submitted for
verification. For purposes of the previous sentence, a name or social
security number of an individual shall be treated as invalid and
included in the determination of such percentage only if--
``(i) the name or social security number, respectively,
submitted by the individual does not match Social Security
Administration records;
``(ii) the inconsistency between the name or number,
respectively, so submitted and the Social Security Administration
records could not be resolved by the State;
``(iii) the individual was provided with a reasonable period of
time to resolve the inconsistency with the Social Security
Administration or provide satisfactory documentation of citizenship
and did not successfully resolve such inconsistency; and
``(iv) payment has been made for an item or service furnished
to the individual under this title.
``(B) If, for any fiscal year, the average monthly percentage
determined under subparagraph (A) is greater than 3 percent--
``(i) the State shall develop and adopt a corrective plan to
review its procedures for verifying the identities of individuals
seeking to enroll in the State plan under this title and to
identify and implement changes in such procedures to improve their
accuracy; and
``(ii) pay to the Secretary an amount equal to the amount which
bears the same ratio to the total payments under the State plan for
the fiscal year for providing medical assistance to individuals who
provided invalid information as the number of individuals with
invalid information in excess of 3 percent of such total submitted
bears to the total number of individuals with invalid information.
``(C) The Secretary may waive, in certain limited cases, all or
part of the payment under subparagraph (B)(ii) if the State is unable
to reach the allowable error rate despite a good faith effort by such
State.
``(D) This paragraph shall not apply to a State for a fiscal year
if there is an agreement described in paragraph (2)(B) in effect as of
the close of the fiscal year.
``(4) Nothing in this subsection shall affect the rights of any
individual under this title to appeal any disenrollment from a State
plan.''.
(B) Costs of implementing and maintaining system.--Section
1903(a)(3) (42 U.S.C. 1396b(a)(3)) is amended--
(i) by striking ``plus'' at the end of subparagraph (E)
and inserting ``and'', and
(ii) by adding at the end the following new
subparagraph:
``(F)(i) 90 percent of the sums expended during the quarter
as are attributable to the design, development, or installation
of such mechanized verification and information retrieval
systems as the Secretary determines are necessary to implement
section 1902(ee) (including a system described in paragraph
(2)(B) thereof), and
``(ii) 75 percent of the sums expended during the quarter
as are attributable to the operation of systems to which clause
(i) applies, plus''.
(2) Limitation on waiver authority.--Notwithstanding any
provision of section 1115 of the Social Security Act (42 U.S.C.
1315), or any other provision of law, the Secretary may not waive
the requirements of section 1902(a)(46)(B) of such Act (42 U.S.C.
1396a(a)(46)(B)) with respect to a State.
(3) Conforming amendments.--Section 1903 (42 U.S.C. 1396b) is
amended--
(A) in subsection (i)(22), by striking ``subsection (x)''
and inserting ``section 1902(a)(46)(B)''; and
(B) in subsection (x)(1), by striking ``subsection
(i)(22)'' and inserting ``section 1902(a)(46)(B)(i)''.
(b) Clarification of Requirements Relating to Presentation of
Satisfactory Documentary Evidence of Citizenship or Nationality.--
(1) Acceptance of documentary evidence issued by a federally
recognized indian tribe.--Section 1903(x)(3)(B) (42 U.S.C.
1396b(x)(3)(B)) is amended--
(A) by redesignating clause (v) as clause (vi); and
(B) by inserting after clause (iv), the following new
clause:
``(v)(I) Except as provided in subclause (II), a document
issued by a federally recognized Indian tribe evidencing membership
or enrollment in, or affiliation with, such tribe (such as a tribal
enrollment card or certificate of degree of Indian blood).
``(II) With respect to those federally recognized Indian tribes
located within States having an international border whose
membership includes individuals who are not citizens of the United
States, the Secretary shall, after consulting with such tribes,
issue regulations authorizing the presentation of such other forms
of documentation (including tribal documentation, if appropriate)
that the Secretary determines to be satisfactory documentary
evidence of citizenship or nationality for purposes of satisfying
the requirement of this subsection.''.
(2) Requirement to provide reasonable opportunity to present
satisfactory documentary evidence.--Section 1903(x) (42 U.S.C.
1396b(x)) is amended by adding at the end the following new
paragraph:
``(4) In the case of an individual declaring to be a citizen or
national of the United States with respect to whom a State requires the
presentation of satisfactory documentary evidence of citizenship or
nationality under section 1902(a)(46)(B)(i), the individual shall be
provided at least the reasonable opportunity to present satisfactory
documentary evidence of citizenship or nationality under this
subsection as is provided under clauses (i) and (ii) of section
1137(d)(4)(A) to an individual for the submittal to the State of
evidence indicating a satisfactory immigration status.''.
(3) Children born in the united states to mothers eligible for
medicaid.--
(A) Clarification of rules.--Section 1903(x) (42 U.S.C.
1396b(x)), as amended by paragraph (2), is amended--
(i) in paragraph (2)--
(I) in subparagraph (C), by striking ``or'' at the
end;
(II) by redesignating subparagraph (D) as
subparagraph (E); and
(III) by inserting after subparagraph (C) the
following new subparagraph:
``(D) pursuant to the application of section 1902(e)(4) (and,
in the case of an individual who is eligible for medical assistance
on such basis, the individual shall be deemed to have provided
satisfactory documentary evidence of citizenship or nationality and
shall not be required to provide further documentary evidence on
any date that occurs during or after the period in which the
individual is eligible for medical assistance on such basis); or'';
and
(ii) by adding at the end the following new paragraph:
``(5) Nothing in subparagraph (A) or (B) of section 1902(a)(46),
the preceding paragraphs of this subsection, or the Deficit Reduction
Act of 2005, including section 6036 of such Act, shall be construed as
changing the requirement of section 1902(e)(4) that a child born in the
United States to an alien mother for whom medical assistance for the
delivery of such child is available as treatment of an emergency
medical condition pursuant to subsection (v) shall be deemed eligible
for medical assistance during the first year of such child's life.''.
(B) State requirement to issue separate identification
number.--Section 1902(e)(4) (42 U.S.C. 1396a(e)(4)) is amended
by adding at the end the following new sentence:
``Notwithstanding the preceding sentence, in the case of a
child who is born in the United States to an alien mother for
whom medical assistance for the delivery of the child is made
available pursuant to section 1903(v), the State immediately
shall issue a separate identification number for the child upon
notification by the facility at which such delivery occurred of
the child's birth.''.
(4) Technical amendments.--Section 1903(x)(2) (42 U.S.C.
1396b(x)) is amended--
(A) in subparagraph (B)--
(i) by realigning the left margin of the matter
preceding clause (i) 2 ems to the left; and
(ii) by realigning the left margins of clauses (i) and
(ii), respectively, 2 ems to the left; and
(B) in subparagraph (C)--
(i) by realigning the left margin of the matter
preceding clause (i) 2 ems to the left; and
(ii) by realigning the left margins of clauses (i) and
(ii), respectively, 2 ems to the left.
(c) Application of Documentation System to CHIP.--
(1) In general.--Section 2105(c) (42 U.S.C. 1397ee(c)), as
amended by sections 114(a) and 116(c), is amended by adding at the
end the following new paragraph:
``(10) Citizenship documentation requirements.--
``(A) In general.--No payment may be made under this
section with respect to an individual who has, or is, declared
to be a citizen or national of the United States for purposes
of establishing eligibility under this title unless the State
meets the requirements of section 1902(a)(46)(B) with respect
to the individual.
``(B) Enhanced payments.--Notwithstanding subsection (b),
the enhanced FMAP with respect to payments under subsection (a)
for expenditures described in clause (i) or (ii) of section
1903(a)(3)(F) necessary to comply with subparagraph (A) shall
in no event be less than 90 percent and 75 percent,
respectively.''.
(2) Nonapplication of administrative expenditures cap.--Section
2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)(C)), as amended by section
202(b), is amended by adding at the end the following:
``(ii) Expenditures to comply with citizenship or
nationality verification requirements.--Expenditures
necessary for the State to comply with paragraph (9)(A).''.
(d) Effective Date.--
(1) In general.--
(A) In general.--Except as provided in subparagraph (B),
the amendments made by this section shall take effect on
October 1, 2008.
(B) Technical amendments.--The amendments made by--
(i) paragraphs (1), (2), and (3) of subsection (b)
shall take effect as if included in the enactment of
section 6036 of the Deficit Reduction Act of 2005 (Public
Law 109-171; 120 Stat. 80); and
(ii) paragraph (4) of subsection (b) shall take effect
as if included in the enactment of section 405 of division
B of the Tax Relief and Health Care Act of 2006 (Public Law
109-432; 120 Stat. 2996).
(2) Restoration of eligibility.--In the case of an individual
who, during the period that began on July 1, 2006, and ends on
October 1, 2008, was determined to be ineligible for medical
assistance under a State Medicaid plan, including any waiver of
such plan, solely as a result of the application of subsections
(i)(22) and (x) of section 1903 of the Social Security Act (as in
effect during such period), but who would have been determined
eligible for such assistance if such subsections, as amended by
subsection (b), had applied to the individual, a State may deem the
individual to be eligible for such assistance as of the date that
the individual was determined to be ineligible for such medical
assistance on such basis.
(3) Special transition rule for indians.--During the period
that begins on July 1, 2006, and ends on the effective date of
final regulations issued under subclause (II) of section
1903(x)(3)(B)(v) of the Social Security Act (42 U.S.C.
1396b(x)(3)(B)(v)) (as added by subsection (b)(1)(B)), an
individual who is a member of a federally-recognized Indian tribe
described in subclause (II) of that section who presents a document
described in subclause (I) of such section that is issued by such
Indian tribe, shall be deemed to have presented satisfactory
evidence of citizenship or nationality for purposes of satisfying
the requirement of subsection (x) of section 1903 of such Act.
SEC. 212. REDUCING ADMINISTRATIVE BARRIERS TO ENROLLMENT.
Section 2102(b) (42 U.S.C. 1397bb(b)) is amended--
(1) by redesignating paragraph (4) as paragraph (5); and
(2) by inserting after paragraph (3) the following new
paragraph:
``(4) Reduction of administrative barriers to enrollment.--
``(A) In general.--Subject to subparagraph (B), the plan
shall include a description of the procedures used to reduce
administrative barriers to the enrollment of children and
pregnant women who are eligible for medical assistance under
title XIX or for child health assistance or health benefits
coverage under this title. Such procedures shall be established
and revised as often as the State determines appropriate to
take into account the most recent information available to the
State identifying such barriers.
``(B) Deemed compliance if joint application and renewal
process that permits application other than in person.--A State
shall be deemed to comply with subparagraph (A) if the State's
application and renewal forms and supplemental forms (if any)
and information verification process is the same for purposes
of establishing and renewing eligibility for children and
pregnant women for medical assistance under title XIX and child
health assistance under this title, and such process does not
require an application to be made in person or a face-to-face
interview.''.
SEC. 213. MODEL OF INTERSTATE COORDINATED ENROLLMENT AND COVERAGE
PROCESS.
(a) In General.--In order to assure continuity of coverage of low-
income children under the Medicaid program and the State Children's
Health Insurance Program (CHIP), not later than 18 months after the
date of the enactment of this Act, the Secretary of Health and Human
Services, in consultation with State Medicaid and CHIP directors and
organizations representing program beneficiaries, shall develop a model
process for the coordination of the enrollment, retention, and coverage
under such programs of children who, because of migration of families,
emergency evacuations, natural or other disasters, public health
emergencies, educational needs, or otherwise, frequently change their
State of residency or otherwise are temporarily located outside of the
State of their residency.
(b) Report to Congress.--After development of such model process,
the Secretary of Health and Human Services shall submit to Congress a
report describing additional steps or authority needed to make further
improvements to coordinate the enrollment, retention, and coverage
under CHIP and Medicaid of children described in subsection (a).
TITLE III--REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE
Subtitle A--Additional State Option for Providing Premium Assistance
SEC. 301. ADDITIONAL STATE OPTION FOR PROVIDING PREMIUM ASSISTANCE.
(a) CHIP.--
(1) In general.--Section 2105(c) (42 U.S.C. 1397ee(c)), as
amended by sections 114(a), 116(c), and 211(c), is amended by
adding at the end the following:
``(11) State option to offer premium assistance.--
``(A) In general.--A State may elect to offer a premium
assistance subsidy (as defined in subparagraph (C)) for
qualified employer-sponsored coverage (as defined in
subparagraph (B)) to all targeted low-income children who are
eligible for child health assistance under the plan and have
access to such coverage in accordance with the requirements of
this paragraph. No subsidy shall be provided to a targeted low-
income child under this paragraph unless the child (or the
child's parent) voluntarily elects to receive such a subsidy. A
State may not require such an election as a condition of
receipt of child health assistance.
``(B) Qualified employer-sponsored coverage.--
``(i) In general.--Subject to clause (ii), in this
paragraph, the term `qualified employer-sponsored coverage'
means a group health plan or health insurance coverage
offered through an employer--
``(I) that qualifies as creditable coverage as a
group health plan under section 2701(c)(1) of the
Public Health Service Act;
``(II) for which the employer contribution toward
any premium for such coverage is at least 40 percent;
and
``(III) that is offered to all individuals in a
manner that would be considered a nondiscriminatory
eligibility classification for purposes of paragraph
(3)(A)(ii) of section 105(h) of the Internal Revenue
Code of 1986 (but determined without regard to clause
(i) of subparagraph (B) of such paragraph).
``(ii) Exception.--Such term does not include coverage
consisting of--
``(I) benefits provided under a health flexible
spending arrangement (as defined in section 106(c)(2)
of the Internal Revenue Code of 1986); or
``(II) a high deductible health plan (as defined in
section 223(c)(2) of such Code), without regard to
whether the plan is purchased in conjunction with a
health savings account (as defined under section 223(d)
of such Code).
``(C) Premium assistance subsidy.--
``(i) In general.--In this paragraph, the term `premium
assistance subsidy' means, with respect to a targeted low-
income child, the amount equal to the difference between
the employee contribution required for enrollment only of
the employee under qualified employer-sponsored coverage
and the employee contribution required for enrollment of
the employee and the child in such coverage, less any
applicable premium cost-sharing applied under the State
child health plan (subject to the limitations imposed under
section 2103(e), including the requirement to count the
total amount of the employee contribution required for
enrollment of the employee and the child in such coverage
toward the annual aggregate cost-sharing limit applied
under paragraph (3)(B) of such section).
``(ii) State payment option.--A State may provide a
premium assistance subsidy either as reimbursement to an
employee for out-of-pocket expenditures or, subject to
clause (iii), directly to the employee's employer.
``(iii) Employer opt-out.--An employer may notify a
State that it elects to opt-out of being directly paid a
premium assistance subsidy on behalf of an employee. In the
event of such a notification, an employer shall withhold
the total amount of the employee contribution required for
enrollment of the employee and the child in the qualified
employer-sponsored coverage and the State shall pay the
premium assistance subsidy directly to the employee.
``(iv) Treatment as child health assistance.--
Expenditures for the provision of premium assistance
subsidies shall be considered child health assistance
described in paragraph (1)(C) of subsection (a) for
purposes of making payments under that subsection.
``(D) Application of secondary payor rules.--The State
shall be a secondary payor for any items or services provided
under the qualified employer-sponsored coverage for which the
State provides child health assistance under the State child
health plan.
``(E) Requirement to provide supplemental coverage for
benefits and cost-sharing protection provided under the state
child health plan.--
``(i) In general.--Notwithstanding section
2110(b)(1)(C), the State shall provide for each targeted
low-income child enrolled in qualified employer-sponsored
coverage, supplemental coverage consisting of--
``(I) items or services that are not covered, or
are only partially covered, under the qualified
employer-sponsored coverage; and
``(II) cost-sharing protection consistent with
section 2103(e).
``(ii) Record keeping requirements.--For purposes of
carrying out clause (i), a State may elect to directly pay
out-of-pocket expenditures for cost-sharing imposed under
the qualified employer-sponsored coverage and collect or
not collect all or any portion of such expenditures from
the parent of the child.
``(F) Application of waiting period imposed under the
state.--Any waiting period imposed under the State child health
plan prior to the provision of child health assistance to a
targeted low-income child under the State plan shall apply to
the same extent to the provision of a premium assistance
subsidy for the child under this paragraph.
``(G) Opt-out permitted for any month.--A State shall
establish a process for permitting the parent of a targeted
low-income child receiving a premium assistance subsidy to
disenroll the child from the qualified employer-sponsored
coverage and enroll the child in, and receive child health
assistance under, the State child health plan, effective on the
first day of any month for which the child is eligible for such
assistance and in a manner that ensures continuity of coverage
for the child.
``(H) Application to parents.--If a State provides child
health assistance or health benefits coverage to parents of a
targeted low-income child in accordance with section 2111(b),
the State may elect to offer a premium assistance subsidy to a
parent of a targeted low-income child who is eligible for such
a subsidy under this paragraph in the same manner as the State
offers such a subsidy for the enrollment of the child in
qualified employer-sponsored coverage, except that--
``(i) the amount of the premium assistance subsidy
shall be increased to take into account the cost of the
enrollment of the parent in the qualified employer-
sponsored coverage or, at the option of the State if the
State determines it cost-effective, the cost of the
enrollment of the child's family in such coverage; and
``(ii) any reference in this paragraph to a child is
deemed to include a reference to the parent or, if
applicable under clause (i), the family of the child.
``(I) Additional state option for providing premium
assistance.--
``(i) In general.--A State may establish an employer-
family premium assistance purchasing pool for employers
with less than 250 employees who have at least 1 employee
who is a pregnant woman eligible for assistance under the
State child health plan (including through the application
of an option described in section 2112(f)) or a member of a
family with at least 1 targeted low-income child and to
provide a premium assistance subsidy under this paragraph
for enrollment in coverage made available through such
pool.
``(ii) Access to choice of coverage.--A State that
elects the option under clause (i) shall identify and offer
access to not less than 2 private health plans that are
health benefits coverage that is equivalent to the benefits
coverage in a benchmark benefit package described in
section 2103(b) or benchmark-equivalent coverage that meets
the requirements of section 2103(a)(2) for employees
described in clause (i).
``(iii) Clarification of payment for administrative
expenditures.--Nothing in this subparagraph shall be
construed as permitting payment under this section for
administrative expenditures attributable to the
establishment or operation of such pool, except to the
extent that such payment would otherwise be permitted under
this title.
``(J) No effect on premium assistance waiver programs.--
Nothing in this paragraph shall be construed as limiting the
authority of a State to offer premium assistance under section
1906 or 1906A, a waiver described in paragraph (2)(B) or (3), a
waiver approved under section 1115, or other authority in
effect prior to the date of enactment of the Children's Health
Insurance Program Reauthorization Act of 2007.
``(K) Notice of availability.--If a State elects to provide
premium assistance subsidies in accordance with this paragraph,
the State shall--
``(i) include on any application or enrollment form for
child health assistance a notice of the availability of
premium assistance subsidies for the enrollment of targeted
low-income children in qualified employer-sponsored
coverage;
``(ii) provide, as part of the application and
enrollment process under the State child health plan,
information describing the availability of such subsidies
and how to elect to obtain such a subsidy; and
``(iii) establish such other procedures as the State
determines necessary to ensure that parents are fully
informed of the choices for receiving child health
assistance under the State child health plan or through the
receipt of premium assistance subsidies.
``(L) Application to qualified employer-sponsored benchmark
coverage.--If a group health plan or health insurance coverage
offered through an employer is certified by an actuary as
health benefits coverage that is equivalent to the benefits
coverage in a benchmark benefit package described in section
2103(b) or benchmark-equivalent coverage that meets the
requirements of section 2103(a)(2), the State may provide
premium assistance subsidies for enrollment of targeted low-
income children in such group health plan or health insurance
coverage in the same manner as such subsidies are provided
under this paragraph for enrollment in qualified employer-
sponsored coverage, but without regard to the requirement to
provide supplemental coverage for benefits and cost-sharing
protection provided under the State child health plan under
subparagraph (E).
``(M) Satisfaction of cost-effectiveness test.--Premium
assistance subsidies for qualified employer-sponsored coverage
offered under this paragraph shall be deemed to meet the
requirement of subparagraph (A) of paragraph (3).''.
(2) Determination of cost-effectiveness for premium assistance
or purchase of family coverage.--
(A) In general.--Section 2105(c)(3)(A) (42 U.S.C.
1397ee(c)(3)(A)) is amended by striking ``relative to'' and all
that follows through the comma and inserting ``relative to
``(i) the amount of expenditures under the State child
health plan, including administrative expenditures, that
the State would have made to provide comparable coverage of
the targeted low-income child involved or the family
involved (as applicable); or
``(ii) the aggregate amount of expenditures that the
State would have made under the State child health plan,
including administrative expenditures, for providing
coverage under such plan for all such children or
families.''.
(B) Nonapplication to previously approved coverage.--The
amendment made by subparagraph (A) shall not apply to coverage
the purchase of which has been approved by the Secretary under
section 2105(c)(3) of the Social Security Act prior to the date
of enactment of this Act.
(b) Medicaid.--Title XIX is amended by inserting after section 1906
the following new section:
``PREMIUM ASSISTANCE OPTION FOR CHILDREN
``Sec. 1906A. (a) In General.--A State may elect to offer a
premium assistance subsidy (as defined in subsection (c)) for qualified
employer-sponsored coverage (as defined in subsection (b)) to all
individuals under age 19 who are entitled to medical assistance under
this title (and to the parent of such an individual) who have access to
such coverage if the State meets the requirements of this section.
``(b) Qualified Employer-Sponsored Coverage.--
``(1) In general.--Subject to paragraph (2)), in this
paragraph, the term `qualified employer-sponsored coverage' means a
group health plan or health insurance coverage offered through an
employer--
``(A) that qualifies as creditable coverage as a group
health plan under section 2701(c)(1) of the Public Health
Service Act;
``(B) for which the employer contribution toward any
premium for such coverage is at least 40 percent; and
``(C) that is offered to all individuals in a manner that
would be considered a nondiscriminatory eligibility
classification for purposes of paragraph (3)(A)(ii) of section
105(h) of the Internal Revenue Code of 1986 (but determined
without regard to clause (i) of subparagraph (B) of such
paragraph).
``(2) Exception.--Such term does not include coverage
consisting of--
``(A) benefits provided under a health flexible spending
arrangement (as defined in section 106(c)(2) of the Internal
Revenue Code of 1986); or
``(B) a high deductible health plan (as defined in section
223(c)(2) of such Code), without regard to whether the plan is
purchased in conjunction with a health savings account (as
defined under section 223(d) of such Code).
``(3) Treatment as third party liability.--The State shall
treat the coverage provided under qualified employer-sponsored
coverage as a third party liability under section 1902(a)(25).
``(c) Premium Assistance Subsidy.--In this section, the term
`premium assistance subsidy' means the amount of the employee
contribution for enrollment in the qualified employer-sponsored
coverage by the individual under age 19 or by the individual's family.
Premium assistance subsidies under this section shall be considered,
for purposes of section 1903(a), to be a payment for medical
assistance.
``(d) Voluntary Participation.--
``(1) Employers.--Participation by an employer in a premium
assistance subsidy offered by a State under this section shall be
voluntary. An employer may notify a State that it elects to opt-out
of being directly paid a premium assistance subsidy on behalf of an
employee.
``(2) Beneficiaries.--No subsidy shall be provided to an
individual under age 19 under this section unless the individual
(or the individual's parent) voluntarily elects to receive such a
subsidy. A State may not require such an election as a condition of
receipt of medical assistance. State may not require, as a
condition of an individual under age 19 (or the individual's
parent) being or remaining eligible for medical assistance under
this title, apply for enrollment in qualified employer-sponsored
coverage under this section.
``(3) Opt-out permitted for any month.--A State shall establish
a process for permitting the parent of an individual under age 19
receiving a premium assistance subsidy to disenroll the individual
from the qualified employer-sponsored coverage.
``(e) Requirement to Pay Premiums and Cost-Sharing and Provide
Supplemental Coverage.--In the case of the participation of an
individual under age 19 (or the individual's parent) in a premium
assistance subsidy under this section for qualified employer-sponsored
coverage, the State shall provide for payment of all enrollee premiums
for enrollment in such coverage and all deductibles, coinsurance, and
other cost-sharing obligations for items and services otherwise covered
under the State plan under this title (exceeding the amount otherwise
permitted under section 1916 or, if applicable, section 1916A). The
fact that an individual under age 19 (or a parent) elects to enroll in
qualified employer-sponsored coverage under this section shall not
change the individual's (or parent's) eligibility for medical
assistance under the State plan, except insofar as section 1902(a)(25)
provides that payments for such assistance shall first be made under
such coverage.''.
(c) GAO Study and Report.--Not later than January 1, 2009, the
Comptroller General of the United States shall study cost and coverage
issues relating to any State premium assistance programs for which
Federal matching payments are made under title XIX or XXI of the Social
Security Act, including under waiver authority, and shall submit a
report to the Committee on Finance of the Senate and the Committee on
Energy and Commerce of the House of Representatives on the results of
such study.
SEC. 302. OUTREACH, EDUCATION, AND ENROLLMENT ASSISTANCE.
(a) Requirement To Include Description of Outreach, Education, and
Enrollment Efforts Related to Premium Assistance Subsidies in State
Child Health Plan.--Section 2102(c) (42 U.S.C. 1397bb(c)) is amended by
adding at the end the following new paragraph:
``(3) Premium assistance subsidies.--In the case of a State
that provides for premium assistance subsidies under the State
child health plan in accordance with paragraph (2)(B), (3), or (10)
of section 2105(c), or a waiver approved under section 1115,
outreach, education, and enrollment assistance for families of
children likely to be eligible for such subsidies, to inform such
families of the availability of, and to assist them in enrolling
their children in, such subsidies, and for employers likely to
provide coverage that is eligible for such subsidies, including the
specific, significant resources the State intends to apply to
educate employers about the availability of premium assistance
subsidies under the State child health plan.''.
(b) Nonapplication of 10 Percent Limit on Outreach and Certain
Other Expenditures.--Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)(C)),
as amended by section 301(c)(2), is amended by adding at the end the
following new clause:
``(iv) Expenditures for outreach to increase the
enrollment of children under this title and title xix
through premium assistance subsidies.--Expenditures for
outreach activities to families of children likely to be
eligible for premium assistance subsidies in accordance
with paragraph (2)(B), (3), or (10), or a waiver approved
under section 1115, to inform such families of the
availability of, and to assist them in enrolling their
children in, such subsidies, and to employers likely to
provide qualified employer-sponsored coverage (as defined
in subparagraph (B) of such paragraph), but not to exceed
an amount equal to 1.25 percent of the maximum amount
permitted to be expended under subparagraph (A) for items
described in subsection (a)(1)(D).''.
Subtitle B--Coordinating Premium Assistance With Private Coverage
SEC. 311. SPECIAL ENROLLMENT PERIOD UNDER GROUP HEALTH PLANS IN
CASE OF TERMINATION OF MEDICAID OR CHIP COVERAGE OR ELIGIBILITY
FOR ASSISTANCE IN PURCHASE OF EMPLOYMENT-BASED COVERAGE;
COORDINATION OF COVERAGE.
(a) Amendments to Internal Revenue Code of 1986.--Section 9801(f)
of the Internal Revenue Code of 1986 (relating to special enrollment
periods) is amended by adding at the end the following new paragraph:
``(3) Special rules relating to medicaid and chip.--
``(A) In general.--A group health plan shall permit an
employee who is eligible, but not enrolled, for coverage under
the terms of the plan (or a dependent of such an employee if
the dependent is eligible, but not enrolled, for coverage under
such terms) to enroll for coverage under the terms of the plan
if either of the following conditions is met:
``(i) Termination of medicaid or chip coverage.--The
employee or dependent is covered under a Medicaid plan
under title XIX of the Social Security Act or under a State
child health plan under title XXI of such Act and coverage
of the employee or dependent under such a plan is
terminated as a result of loss of eligibility for such
coverage and the employee requests coverage under the group
health plan not later than 60 days after the date of
termination of such coverage.
``(ii) Eligibility for employment assistance under
medicaid or chip.--The employee or dependent becomes
eligible for assistance, with respect to coverage under the
group health plan under such Medicaid plan or State child
health plan (including under any waiver or demonstration
project conducted under or in relation to such a plan), if
the employee requests coverage under the group health plan
not later than 60 days after the date the employee or
dependent is determined to be eligible for such assistance.
``(B) Employee outreach and disclosure.--
``(i) Outreach to employees regarding availability of
medicaid and chip coverage.--
``(I) In general.--Each employer that maintains a
group health plan in a State that provides medical
assistance under a State Medicaid plan under title XIX
of the Social Security Act, or child health assistance
under a State child health plan under title XXI of such
Act, in the form of premium assistance for the purchase
of coverage under a group health plan, shall provide to
each employee a written notice informing the employee
of potential opportunities then currently available in
the State in which the employee resides for premium
assistance under such plans for health coverage of the
employee or the employee's dependents. For purposes of
compliance with this clause, the employer may use any
State-specific model notice developed in accordance
with section 701(f)(3)(B)(i)(II) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1181(f)(3)(B)(i)(II)).
``(II) Option to provide concurrent with provision
of plan materials to employee.--An employer may provide
the model notice applicable to the State in which an
employee resides concurrent with the furnishing of
materials notifying the employee of health plan
eligibility, concurrent with materials provided to the
employee in connection with an open season or election
process conducted under the plan, or concurrent with
the furnishing of the summary plan description as
provided in section 104(b) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1024).
``(ii) Disclosure about group health plan benefits to
states for medicaid and chip eligible individuals.--In the
case of a participant or beneficiary of a group health plan
who is covered under a Medicaid plan of a State under title
XIX of the Social Security Act or under a State child
health plan under title XXI of such Act, the plan
administrator of the group health plan shall disclose to
the State, upon request, information about the benefits
available under the group health plan in sufficient
specificity, as determined under regulations of the
Secretary of Health and Human Services in consultation with
the Secretary that require use of the model coverage
coordination disclosure form developed under section
311(b)(1)(C) of the Children's Health Insurance Program
Reauthorization Act of 2007, so as to permit the State to
make a determination (under paragraph (2)(B), (3), or (10)
of section 2105(c) of the Social Security Act or otherwise)
concerning the cost-effectiveness of the State providing
medical or child health assistance through premium
assistance for the purchase of coverage under such group
health plan and in order for the State to provide
supplemental benefits required under paragraph (10)(E) of
such section or other authority.''.
(b) Conforming Amendments.--
(1) Amendments to employee retirement income security act.--
(A) In general.--Section 701(f) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1181(f)) is amended by
adding at the end the following new paragraph:
``(3) Special rules for application in case of medicaid and
chip.--
``(A) In general.--A group health plan, and a health
insurance issuer offering group health insurance coverage in
connection with a group health plan, shall permit an employee
who is eligible, but not enrolled, for coverage under the terms
of the plan (or a dependent of such an employee if the
dependent is eligible, but not enrolled, for coverage under
such terms) to enroll for coverage under the terms of the plan
if either of the following conditions is met:
``(i) Termination of medicaid or chip coverage.--The
employee or dependent is covered under a Medicaid plan
under title XIX of the Social Security Act or under a State
child health plan under title XXI of such Act and coverage
of the employee or dependent under such a plan is
terminated as a result of loss of eligibility for such
coverage and the employee requests coverage under the group
health plan (or health insurance coverage) not later than
60 days after the date of termination of such coverage.
``(ii) Eligibility for employment assistance under
medicaid or chip.--The employee or dependent becomes
eligible for assistance, with respect to coverage under the
group health plan or health insurance coverage, under such
Medicaid plan or State child health plan (including under
any waiver or demonstration project conducted under or in
relation to such a plan), if the employee requests coverage
under the group health plan or health insurance coverage
not later than 60 days after the date the employee or
dependent is determined to be eligible for such assistance.
``(B) Coordination with medicaid and chip.--
``(i) Outreach to employees regarding availability of
medicaid and chip coverage.--
``(I) In general.--Each employer that maintains a
group health plan in a State that provides medical
assistance under a State Medicaid plan under title XIX
of the Social Security Act, or child health assistance
under a State child health plan under title XXI of such
Act, in the form of premium assistance for the purchase
of coverage under a group health plan, shall provide to
each employee a written notice informing the employee
of potential opportunities then currently available in
the State in which the employee resides for premium
assistance under such plans for health coverage of the
employee or the employee's dependents.
``(II) Model notice.--Not later than 1 year after
the date of enactment of the Children's Health
Insurance Program Reauthorization Act of 2007, the
Secretary and the Secretary of Health and Human
Services, in consultation with Directors of State
Medicaid agencies under title XIX of the Social
Security Act and Directors of State CHIP agencies under
title XXI of such Act, shall jointly develop national
and State-specific model notices for purposes of
subparagraph (A). The Secretary shall provide employers
with such model notices so as to enable employers to
timely comply with the requirements of subparagraph
(A). Such model notices shall include information
regarding how an employee may contact the State in
which the employee resides for additional information
regarding potential opportunities for such premium
assistance, including how to apply for such assistance.
``(III) Option to provide concurrent with provision
of plan materials to employee.--An employer may provide
the model notice applicable to the State in which an
employee resides concurrent with the furnishing of
materials notifying the employee of health plan
eligibility, concurrent with materials provided to the
employee in connection with an open season or election
process conducted under the plan, or concurrent with
the furnishing of the summary plan description as
provided in section 104(b).
``(ii) Disclosure about group health plan benefits to
states for medicaid and chip eligible individuals.--In the
case of a participant or beneficiary of a group health plan
who is covered under a Medicaid plan of a State under title
XIX of the Social Security Act or under a State child
health plan under title XXI of such Act, the plan
administrator of the group health plan shall disclose to
the State, upon request, information about the benefits
available under the group health plan in sufficient
specificity, as determined under regulations of the
Secretary of Health and Human Services in consultation with
the Secretary that require use of the model coverage
coordination disclosure form developed under section
311(b)(1)(C) of the Children's Health Insurance Program
Reauthorization Act of 2007, so as to permit the State to
make a determination (under paragraph (2)(B), (3), or (10)
of section 2105(c) of the Social Security Act or otherwise)
concerning the cost-effectiveness of the State providing
medical or child health assistance through premium
assistance for the purchase of coverage under such group
health plan and in order for the State to provide
supplemental benefits required under paragraph (10)(E) of
such section or other authority.''.
(B) Conforming amendment.--Section 102(b) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1022(b)) is
amended--
(i) by striking ``and the remedies'' and inserting ``,
the remedies''; and
(ii) by inserting before the period the following: ``,
and if the employer so elects for purposes of complying
with section 701(f)(3)(B)(i), the model notice applicable
to the State in which the participants and beneficiaries
reside''.
(C) Working group to develop model coverage coordination
disclosure form.--
(i) Medicaid, chip, and employer-sponsored coverage
coordination working group.--
(I) In general.--Not later than 60 days after the
date of enactment of this Act, the Secretary of Health
and Human Services and the Secretary of Labor shall
jointly establish a Medicaid, CHIP, and Employer-
Sponsored Coverage Coordination Working Group (in this
subparagraph referred to as the ``Working Group''). The
purpose of the Working Group shall be to develop the
model coverage coordination disclosure form described
in subclause (II) and to identify the impediments to
the effective coordination of coverage available to
families that include employees of employers that
maintain group health plans and members who are
eligible for medical assistance under title XIX of the
Social Security Act or child health assistance or other
health benefits coverage under title XXI of such Act.
(II) Model coverage coordination disclosure form
described.--The model form described in this subclause
is a form for plan administrators of group health plans
to complete for purposes of permitting a State to
determine the availability and cost-effectiveness of
the coverage available under such plans to employees
who have family members who are eligible for premium
assistance offered under a State plan under title XIX
or XXI of such Act and to allow for coordination of
coverage for enrollees of such plans. Such form shall
provide the following information in addition to such
other information as the Working Group determines
appropriate:
(aa) A determination of whether the employee is
eligible for coverage under the group health plan.
(bb) The name and contract information of the
plan administrator of the group health plan.
(cc) The benefits offered under the plan.
(dd) The premiums and cost-sharing required
under the plan.
(ee) Any other information relevant to coverage
under the plan.
(ii) Membership.--The Working Group shall consist of
not more than 30 members and shall be composed of
representatives of--
(I) the Department of Labor;
(II) the Department of Health and Human Services;
(III) State directors of the Medicaid program under
title XIX of the Social Security Act;
(IV) State directors of the State Children's Health
Insurance Program under title XXI of the Social
Security Act;
(V) employers, including owners of small businesses
and their trade or industry representatives and
certified human resource and payroll professionals;
(VI) plan administrators and plan sponsors of group
health plans (as defined in section 607(1) of the
Employee Retirement Income Security Act of 1974);
(VII) health insurance issuers; and
(VIII) children and other beneficiaries of medical
assistance under title XIX of the Social Security Act
or child health assistance or other health benefits
coverage under title XXI of such Act.
(iii) Compensation.--The members of the Working Group
shall serve without compensation.
(iv) Administrative support.--The Department of Health
and Human Services and the Department of Labor shall
jointly provide appropriate administrative support to the
Working Group, including technical assistance. The Working
Group may use the services and facilities of either such
Department, with or without reimbursement, as jointly
determined by such Departments.
(v) Report.--
(I) Report by working group to the secretaries.--
Not later than 18 months after the date of the
enactment of this Act, the Working Group shall submit
to the Secretary of Labor and the Secretary of Health
and Human Services the model form described in clause
(i)(II) along with a report containing recommendations
for appropriate measures to address the impediments to
the effective coordination of coverage between group
health plans and the State plans under titles XIX and
XXI of the Social Security Act.
(II) Report by secretaries to the congress.--Not
later than 2 months after receipt of the report
pursuant to subclause (I), the Secretaries shall
jointly submit a report to each House of the Congress
regarding the recommendations contained in the report
under such subclause.
(vi) Termination.--The Working Group shall terminate 30
days after the date of the issuance of its report under
clause (v).
(D) Effective dates.--The Secretary of Labor and the
Secretary of Health and Human Services shall develop the
initial model notices under section 701(f)(3)(B)(i)(II) of the
Employee Retirement Income Security Act of 1974, and the
Secretary of Labor shall provide such notices to employers, not
later than the date that is 1 year after the date of enactment
of this Act, and each employer shall provide the initial annual
notices to such employer's employees beginning with the first
plan year that begins after the date on which such initial
model notices are first issued. The model coverage coordination
disclosure form developed under subparagraph (C) shall apply
with respect to requests made by States beginning with the
first plan year that begins after the date on which such model
coverage coordination disclosure form is first issued.
(E) Enforcement.--Section 502 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1132) is amended--
(i) in subsection (a)(6), by striking ``or (8)'' and
inserting ``(8), or (9)''; and
(ii) in subsection (c), by redesignating paragraph (9)
as paragraph (10), and by inserting after paragraph (8) the
following:
``(9)(A) The Secretary may assess a civil penalty against any
employer of up to $100 a day from the date of the employer's failure to
meet the notice requirement of section 701(f)(3)(B)(i)(I). For purposes
of this subparagraph, each violation with respect to any single
employee shall be treated as a separate violation.
``(B) The Secretary may assess a civil penalty against any plan
administrator of up to $100 a day from the date of the plan
administrator's failure to timely provide to any State the information
required to be disclosed under section 701(f)(3)(B)(ii). For purposes
of this subparagraph, each violation with respect to any single
participant or beneficiary shall be treated as a separate violation.''.
(2) Amendments to public health service act.--Section 2701(f)
of the Public Health Service Act (42 U.S.C. 300gg(f)) is amended by
adding at the end the following new paragraph:
``(3) Special rules for application in case of medicaid and
chip.--
``(A) In general.--A group health plan, and a health
insurance issuer offering group health insurance coverage in
connection with a group health plan, shall permit an employee
who is eligible, but not enrolled, for coverage under the terms
of the plan (or a dependent of such an employee if the
dependent is eligible, but not enrolled, for coverage under
such terms) to enroll for coverage under the terms of the plan
if either of the following conditions is met:
``(i) Termination of medicaid or chip coverage.--The
employee or dependent is covered under a Medicaid plan
under title XIX of the Social Security Act or under a State
child health plan under title XXI of such Act and coverage
of the employee or dependent under such a plan is
terminated as a result of loss of eligibility for such
coverage and the employee requests coverage under the group
health plan (or health insurance coverage) not later than
60 days after the date of termination of such coverage.
``(ii) Eligibility for employment assistance under
medicaid or chip.--The employee or dependent becomes
eligible for assistance, with respect to coverage under the
group health plan or health insurance coverage, under such
Medicaid plan or State child health plan (including under
any waiver or demonstration project conducted under or in
relation to such a plan), if the employee requests coverage
under the group health plan or health insurance coverage
not later than 60 days after the date the employee or
dependent is determined to be eligible for such assistance.
``(B) Coordination with medicaid and chip.--
``(i) Outreach to employees regarding availability of
medicaid and chip coverage.--
``(I) In general.--Each employer that maintains a
group health plan in a State that provides medical
assistance under a State Medicaid plan under title XIX
of the Social Security Act, or child health assistance
under a State child health plan under title XXI of such
Act, in the form of premium assistance for the purchase
of coverage under a group health plan, shall provide to
each employee a written notice informing the employee
of potential opportunities then currently available in
the State in which the employee resides for premium
assistance under such plans for health coverage of the
employee or the employee's dependents. For purposes of
compliance with this subclause, the employer may use
any State-specific model notice developed in accordance
with section 701(f)(3)(B)(i)(II) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1181(f)(3)(B)(i)(II)).
``(II) Option to provide concurrent with provision
of plan materials to employee.--An employer may provide
the model notice applicable to the State in which an
employee resides concurrent with the furnishing of
materials notifying the employee of health plan
eligibility, concurrent with materials provided to the
employee in connection with an open season or election
process conducted under the plan, or concurrent with
the furnishing of the summary plan description as
provided in section 104(b) of the Employee Retirement
Income Security Act of 1974.
``(ii) Disclosure about group health plan benefits to
states for medicaid and chip eligible individuals.--In the
case of an enrollee in a group health plan who is covered
under a Medicaid plan of a State under title XIX of the
Social Security Act or under a State child health plan
under title XXI of such Act, the plan administrator of the
group health plan shall disclose to the State, upon
request, information about the benefits available under the
group health plan in sufficient specificity, as determined
under regulations of the Secretary of Health and Human
Services in consultation with the Secretary that require
use of the model coverage coordination disclosure form
developed under section 311(b)(1)(C) of the Children's
Health Insurance Reauthorization Act of 2007, so as to
permit the State to make a determination (under paragraph
(2)(B), (3), or (10) of section 2105(c) of the Social
Security Act or otherwise) concerning the cost-
effectiveness of the State providing medical or child
health assistance through premium assistance for the
purchase of coverage under such group health plan and in
order for the State to provide supplemental benefits
required under paragraph (10)(E) of such section or other
authority.''.
TITLE IV--STRENGTHENING QUALITY OF CARE AND HEALTH OUTCOMES
SEC. 401. CHILD HEALTH QUALITY IMPROVEMENT ACTIVITIES FOR CHILDREN
ENROLLED IN MEDICAID OR CHIP.
(a) Development of Child Health Quality Measures for Children
Enrolled in Medicaid or Chip.--Title XI (42 U.S.C. 1301 et seq.) is
amended by inserting after section 1139 the following new section:
``SEC. 1139A. CHILD HEALTH QUALITY MEASURES.
``(a) Development of an Initial Core Set of Health Care Quality
Measures for Children Enrolled in Medicaid or Chip.--
``(1) In general.--Not later than January 1, 2009, the
Secretary shall identify and publish for general comment an
initial, recommended core set of child health quality measures for
use by State programs administered under titles XIX and XXI, health
insurance issuers and managed care entities that enter into
contracts with such programs, and providers of items and services
under such programs.
``(2) Identification of initial core measures.--In consultation
with the individuals and entities described in subsection (b)(3),
the Secretary shall identify existing quality of care measures for
children that are in use under public and privately sponsored
health care coverage arrangements, or that are part of reporting
systems that measure both the presence and duration of health
insurance coverage over time.
``(3) Recommendations and dissemination.--Based on such
existing and identified measures, the Secretary shall publish an
initial core set of child health quality measures that includes
(but is not limited to) the following:
``(A) The duration of children's health insurance coverage
over a 12-month time period.
``(B) The availability and effectiveness of a full range
of--
``(i) preventive services, treatments, and services for
acute conditions, including services to promote healthy
birth, prevent and treat premature birth, and detect the
presence or risk of physical or mental conditions that
could adversely affect growth and development; and
``(ii) treatments to correct or ameliorate the effects
of physical and mental conditions, including chronic
conditions, in infants, young children, school-age
children, and adolescents.
``(C) The availability of care in a range of ambulatory and
inpatient health care settings in which such care is furnished.
``(D) The types of measures that, taken together, can be
used to estimate the overall national quality of health care
for children, including children with special needs, and to
perform comparative analyses of pediatric health care quality
and racial, ethnic, and socioeconomic disparities in child
health and health care for children.
``(4) Encourage voluntary and standardized reporting.--Not
later than 2 years after the date of enactment of the Children's
Health Insurance Program Reauthorization Act of 2007, the
Secretary, in consultation with States, shall develop a
standardized format for reporting information and procedures and
approaches that encourage States to use the initial core
measurement set to voluntarily report information regarding the
quality of pediatric health care under titles XIX and XXI.
``(5) Adoption of best practices in implementing quality
programs.--The Secretary shall disseminate information to States
regarding best practices among States with respect to measuring and
reporting on the quality of health care for children, and shall
facilitate the adoption of such best practices. In developing best
practices approaches, the Secretary shall give particular attention
to State measurement techniques that ensure the timeliness and
accuracy of provider reporting, encourage provider reporting
compliance, encourage successful quality improvement strategies,
and improve efficiency in data collection using health information
technology.
``(6) Reports to congress.--Not later than January 1, 2010, and
every 3 years thereafter, the Secretary shall report to Congress
on--
``(A) the status of the Secretary's efforts to improve--
``(i) quality related to the duration and stability of
health insurance coverage for children under titles XIX and
XXI;
``(ii) the quality of children's health care under such
titles, including preventive health services, health care
for acute conditions, chronic health care, and health
services to ameliorate the effects of physical and mental
conditions and to aid in growth and development of infants,
young children, school-age children, and adolescents with
special health care needs; and
``(iii) the quality of children's health care under
such titles across the domains of quality, including
clinical quality, health care safety, family experience
with health care, health care in the most integrated
setting, and elimination of racial, ethnic, and
socioeconomic disparities in health and health care;
``(B) the status of voluntary reporting by States under
titles XIX and XXI, utilizing the initial core quality
measurement set; and
``(C) any recommendations for legislative changes needed to
improve the quality of care provided to children under titles
XIX and XXI, including recommendations for quality reporting by
States.
``(7) Technical assistance.--The Secretary shall provide
technical assistance to States to assist them in adopting and
utilizing core child health quality measures in administering the
State plans under titles XIX and XXI.
``(8) Definition of core set.--In this section, the term `core
set' means a group of valid, reliable, and evidence-based quality
measures that, taken together--
``(A) provide information regarding the quality of health
coverage and health care for children;
``(B) address the needs of children throughout the
developmental age span; and
``(C) allow purchasers, families, and health care providers
to understand the quality of care in relation to the preventive
needs of children, treatments aimed at managing and resolving
acute conditions, and diagnostic and treatment services whose
purpose is to correct or ameliorate physical, mental, or
developmental conditions that could, if untreated or poorly
treated, become chronic.
``(b) Advancing and Improving Pediatric Quality Measures.--
``(1) Establishment of pediatric quality measures program.--Not
later than January 1, 2010, the Secretary shall establish a
pediatric quality measures program to--
``(A) improve and strengthen the initial core child health
care quality measures established by the Secretary under
subsection (a);
``(B) expand on existing pediatric quality measures used by
public and private health care purchasers and advance the
development of such new and emerging quality measures; and
``(C) increase the portfolio of evidence-based, consensus
pediatric quality measures available to public and private
purchasers of children's health care services, providers, and
consumers.
``(2) Evidence-based measures.--The measures developed under
the pediatric quality measures program shall, at a minimum, be--
``(A) evidence-based and, where appropriate, risk adjusted;
``(B) designed to identify and eliminate racial and ethnic
disparities in child health and the provision of health care;
``(C) designed to ensure that the data required for such
measures is collected and reported in a standard format that
permits comparison of quality and data at a State, plan, and
provider level;
``(D) periodically updated; and
``(E) responsive to the child health needs, services, and
domains of health care quality described in clauses (i), (ii),
and (iii) of subsection (a)(6)(A).
``(3) Process for pediatric quality measures program.--In
identifying gaps in existing pediatric quality measures and
establishing priorities for development and advancement of such
measures, the Secretary shall consult with--
``(A) States;
``(B) pediatricians, children's hospitals, and other
primary and specialized pediatric health care professionals
(including members of the allied health professions) who
specialize in the care and treatment of children, particularly
children with special physical, mental, and developmental
health care needs;
``(C) dental professionals, including pediatric dental
professionals;
``(D) health care providers that furnish primary health
care to children and families who live in urban and rural
medically underserved communities or who are members of
distinct population sub-groups at heightened risk for poor
health outcomes;
``(E) national organizations representing children,
including children with disabilities and children with chronic
conditions;
``(F) national organizations representing consumers and
purchasers of children's health care;
``(G) national organizations and individuals with expertise
in pediatric health quality measurement; and
``(H) voluntary consensus standards setting organizations
and other organizations involved in the advancement of
evidence-based measures of health care.
``(4) Developing, validating, and testing a portfolio of
pediatric quality measures.--As part of the program to advance
pediatric quality measures, the Secretary shall--
``(A) award grants and contracts for the development,
testing, and validation of new, emerging, and innovative
evidence-based measures for children's health care services
across the domains of quality described in clauses (i), (ii),
and (iii) of subsection (a)(6)(A); and
``(B) award grants and contracts for--
``(i) the development of consensus on evidence-based
measures for children's health care services;
``(ii) the dissemination of such measures to public and
private purchasers of health care for children; and
``(iii) the updating of such measures as necessary.
``(5) Revising, strengthening, and improving initial core
measures.--Beginning no later than January 1, 2012, and annually
thereafter, the Secretary shall publish recommended changes to the
core measures described in subsection (a) that shall reflect the
testing, validation, and consensus process for the development of
pediatric quality measures described in subsection paragraphs (1)
through (4).
``(6) Definition of pediatric quality measure.--In this
subsection, the term `pediatric quality measure' means a
measurement of clinical care that is capable of being examined
through the collection and analysis of relevant information, that
is developed in order to assess 1 or more aspects of pediatric
health care quality in various institutional and ambulatory health
care settings, including the structure of the clinical care system,
the process of care, the outcome of care, or patient experiences in
care.
``(7) Construction.--Nothing in this section shall be construed
as supporting the restriction of coverage, under title XIX or XXI
or otherwise, to only those services that are evidence-based.
``(c) Annual State Reports Regarding State-Specific Quality of Care
Measures Applied Under Medicaid or Chip.--
``(1) Annual state reports.--Each State with a State plan
approved under title XIX or a State child health plan approved
under title XXI shall annually report to the Secretary on the--
``(A) State-specific child health quality measures applied
by the States under such plans, including measures described in
subparagraphs (A) and (B) of subsection (a)(6); and
``(B) State-specific information on the quality of health
care furnished to children under such plans, including
information collected through external quality reviews of
managed care organizations under section 1932 of the Social
Security Act (42 U.S.C. 1396u-4) and benchmark plans under
sections 1937 and 2103 of such Act (42 U.S.C. 1396u-7, 1397cc).
``(2) Publication.--Not later than September 30, 2009, and
annually thereafter, the Secretary shall collect, analyze, and make
publicly available the information reported by States under
paragraph (1).
``(d) Demonstration Projects for Improving the Quality of
Children's Health Care and the Use of Health Information Technology.--
``(1) In general.--During the period of fiscal years 2008
through 2012, the Secretary shall award not more than 10 grants to
States and child health providers to conduct demonstration projects
to evaluate promising ideas for improving the quality of children's
health care provided under title XIX or XXI, including projects
to--
``(A) experiment with, and evaluate the use of, new
measures of the quality of children's health care under such
titles (including testing the validity and suitability for
reporting of such measures);
``(B) promote the use of health information technology in
care delivery for children under such titles;
``(C) evaluate provider-based models which improve the
delivery of children's health care services under such titles,
including care management for children with chronic conditions
and the use of evidence-based approaches to improve the
effectiveness, safety, and efficiency of health care services
for children; or
``(D) demonstrate the impact of the model electronic health
record format for children developed and disseminated under
subsection (f) on improving pediatric health, including the
effects of chronic childhood health conditions, and pediatric
health care quality as well as reducing health care costs.
``(2) Requirements.--In awarding grants under this subsection,
the Secretary shall ensure that--
``(A) only 1 demonstration project funded under a grant
awarded under this subsection shall be conducted in a State;
and
``(B) demonstration projects funded under grants awarded
under this subsection shall be conducted evenly between States
with large urban areas and States with large rural areas.
``(3) Authority for multistate projects.--A demonstration
project conducted with a grant awarded under this subsection may be
conducted on a multistate basis, as needed.
``(4) Funding.--$20,000,000 of the amount appropriated under
subsection (i) for a fiscal year shall be used to carry out this
subsection.
``(e) Childhood Obesity Demonstration Project.--
``(1) Authority to conduct demonstration.--The Secretary, in
consultation with the Administrator of the Centers for Medicare &
Medicaid Services, shall conduct a demonstration project to develop
a comprehensive and systematic model for reducing childhood obesity
by awarding grants to eligible entities to carry out such project.
Such model shall--
``(A) identify, through self-assessment, behavioral risk
factors for obesity among children;
``(B) identify, through self-assessment, needed clinical
preventive and screening benefits among those children
identified as target individuals on the basis of such risk
factors;
``(C) provide ongoing support to such target individuals
and their families to reduce risk factors and promote the
appropriate use of preventive and screening benefits; and
``(D) be designed to improve health outcomes, satisfaction,
quality of life, and appropriate use of items and services for
which medical assistance is available under title XIX or child
health assistance is available under title XXI among such
target individuals.
``(2) Eligibility entities.--For purposes of this subsection,
an eligible entity is any of the following:
``(A) A city, county, or Indian tribe.
``(B) A local or tribal educational agency.
``(C) An accredited university, college, or community
college.
``(D) A Federally-qualified health center.
``(E) A local health department.
``(F) A health care provider.
``(G) A community-based organization.
``(H) Any other entity determined appropriate by the
Secretary, including a consortia or partnership of entities
described in any of subparagraphs (A) through (G).
``(3) Use of funds.--An eligible entity awarded a grant under
this subsection shall use the funds made available under the grant
to--
``(A) carry out community-based activities related to
reducing childhood obesity, including by--
``(i) forming partnerships with entities, including
schools and other facilities providing recreational
services, to establish programs for after school and
weekend community activities that are designed to reduce
childhood obesity;
``(ii) forming partnerships with daycare facilities to
establish programs that promote healthy eating behaviors
and physical activity; and
``(iii) developing and evaluating community educational
activities targeting good nutrition and promoting healthy
eating behaviors;
``(B) carry out age-appropriate school-based activities
that are designed to reduce childhood obesity, including by--
``(i) developing and testing educational curricula and
intervention programs designed to promote healthy eating
behaviors and habits in youth, which may include--
``(I) after hours physical activity programs; and
``(II) science-based interventions with multiple
components to prevent eating disorders including
nutritional content, understanding and responding to
hunger and satiety, positive body image development,
positive self-esteem development, and learning life
skills (such as stress management, communication
skills, problemsolving and decisionmaking skills), as
well as consideration of cultural and developmental
issues, and the role of family, school, and community;
``(ii) providing education and training to educational
professionals regarding how to promote a healthy lifestyle
and a healthy school environment for children;
``(iii) planning and implementing a healthy lifestyle
curriculum or program with an emphasis on healthy eating
behaviors and physical activity; and
``(iv) planning and implementing healthy lifestyle
classes or programs for parents or guardians, with an
emphasis on healthy eating behaviors and physical activity
for children;
``(C) carry out educational, counseling, promotional, and
training activities through the local health care delivery
systems including by--
``(i) promoting healthy eating behaviors and physical
activity services to treat or prevent eating disorders,
being overweight, and obesity;
``(ii) providing patient education and counseling to
increase physical activity and promote healthy eating
behaviors;
``(iii) training health professionals on how to
identify and treat obese and overweight individuals which
may include nutrition and physical activity counseling; and
``(iv) providing community education by a health
professional on good nutrition and physical activity to
develop a better understanding of the relationship between
diet, physical activity, and eating disorders, obesity, or
being overweight; and
``(D) provide, through qualified health professionals,
training and supervision for community health workers to--
``(i) educate families regarding the relationship
between nutrition, eating habits, physical activity, and
obesity;
``(ii) educate families about effective strategies to
improve nutrition, establish healthy eating patterns, and
establish appropriate levels of physical activity; and
``(iii) educate and guide parents regarding the ability
to model and communicate positive health behaviors.
``(4) Priority.--In awarding grants under paragraph (1), the
Secretary shall give priority to awarding grants to eligible
entities--
``(A) that demonstrate that they have previously applied
successfully for funds to carry out activities that seek to
promote individual and community health and to prevent the
incidence of chronic disease and that can cite published and
peer-reviewed research demonstrating that the activities that
the entities propose to carry out with funds made available
under the grant are effective;
``(B) that will carry out programs or activities that seek
to accomplish a goal or goals set by the State in the Healthy
People 2010 plan of the State;
``(C) that provide non-Federal contributions, either in
cash or in-kind, to the costs of funding activities under the
grants;
``(D) that develop comprehensive plans that include a
strategy for extending program activities developed under
grants in the years following the fiscal years for which they
receive grants under this subsection;
``(E) located in communities that are medically
underserved, as determined by the Secretary;
``(F) located in areas in which the average poverty rate is
at least 150 percent or higher of the average poverty rate in
the State involved, as determined by the Secretary; and
``(G) that submit plans that exhibit multisectoral,
cooperative conduct that includes the involvement of a broad
range of stakeholders, including--
``(i) community-based organizations;
``(ii) local governments;
``(iii) local educational agencies;
``(iv) the private sector;
``(v) State or local departments of health;
``(vi) accredited colleges, universities, and community
colleges;
``(vii) health care providers;
``(viii) State and local departments of transportation
and city planning; and
``(ix) other entities determined appropriate by the
Secretary.
``(5) Program design.--
``(A) Initial design.--Not later than 1 year after the date
of enactment of the Children's Health Insurance Program
Reauthorization Act of 2007, the Secretary shall design the
demonstration project. The demonstration should draw upon
promising, innovative models and incentives to reduce
behavioral risk factors. The Administrator of the Centers for
Medicare & Medicaid Services shall consult with the Director of
the Centers for Disease Control and Prevention, the Director of
the Office of Minority Health, the heads of other agencies in
the Department of Health and Human Services, and such
professional organizations, as the Secretary determines to be
appropriate, on the design, conduct, and evaluation of the
demonstration.
``(B) Number and project areas.--Not later than 2 years
after the date of enactment of the Children's Health Insurance
Program Reauthorization Act of 2007, the Secretary shall award
1 grant that is specifically designed to determine whether
programs similar to programs to be conducted by other grantees
under this subsection should be implemented with respect to the
general population of children who are eligible for child
health assistance under State child health plans under title
XXI in order to reduce the incidence of childhood obesity among
such population.
``(6) Report to congress.--Not later than 3 years after the
date the Secretary implements the demonstration project under this
subsection, the Secretary shall submit to Congress a report that
describes the project, evaluates the effectiveness and cost
effectiveness of the project, evaluates the beneficiary
satisfaction under the project, and includes any such other
information as the Secretary determines to be appropriate.
``(7) Definitions.--In this subsection:
``(A) Federally-qualified health center.--The term
`Federally-qualified health center' has the meaning given that
term in section 1905(l)(2)(B).
``(B) Indian tribe.--The term `Indian tribe' has the
meaning given that term in section 4 of the Indian Health Care
Improvement Act (25 U.S.C. 1603).
``(C) Self-assessment.--The term `self-assessment' means a
form that--
``(i) includes questions regarding--
``(I) behavioral risk factors;
``(II) needed preventive and screening services;
and
``(III) target individuals' preferences for
receiving follow-up information;
``(ii) is assessed using such computer generated
assessment programs; and
``(iii) allows for the provision of such ongoing
support to the individual as the Secretary determines
appropriate.
``(D) Ongoing support.--The term `ongoing support' means--
``(i) to provide any target individual with
information, feedback, health coaching, and recommendations
regarding--
``(I) the results of a self-assessment given to the
individual;
``(II) behavior modification based on the self-
assessment; and
``(III) any need for clinical preventive and
screening services or treatment including medical
nutrition therapy;
``(ii) to provide any target individual with referrals
to community resources and programs available to assist the
target individual in reducing health risks; and
``(iii) to provide the information described in clause
(i) to a health care provider, if designated by the target
individual to receive such information.
``(8) Authorization of appropriations.--There is authorized to
be appropriated to carry out this subsection, $25,000,000 for the
period of fiscal years 2008 through 2012.
``(f) Development of Model Electronic Health Record Format for
Children Enrolled in Medicaid or CHIP.--
``(1) In general.--Not later than January 1, 2009, the
Secretary shall establish a program to encourage the development
and dissemination of a model electronic health record format for
children enrolled in the State plan under title XIX or the State
child health plan under title XXI that is--
``(A) subject to State laws, accessible to parents,
caregivers, and other consumers for the sole purpose of
demonstrating compliance with school or leisure activity
requirements, such as appropriate immunizations or physicals;
``(B) designed to allow interoperable exchanges that
conform with Federal and State privacy and security
requirements;
``(C) structured in a manner that permits parents and
caregivers to view and understand the extent to which the care
their children receive is clinically appropriate and of high
quality; and
``(D) capable of being incorporated into, and otherwise
compatible with, other standards developed for electronic
health records.
``(2) Funding.--$5,000,000 of the amount appropriated under
subsection (i) for a fiscal year shall be used to carry out this
subsection.
``(g) Study of Pediatric Health and Health Care Quality Measures.--
``(1) In general.--Not later than July 1, 2009, the Institute
of Medicine shall study and report to Congress on the extent and
quality of efforts to measure child health status and the quality
of health care for children across the age span and in relation to
preventive care, treatments for acute conditions, and treatments
aimed at ameliorating or correcting physical, mental, and
developmental conditions in children. In conducting such study and
preparing such report, the Institute of Medicine shall--
``(A) consider all of the major national population-based
reporting systems sponsored by the Federal Government that are
currently in place, including reporting requirements under
Federal grant programs and national population surveys and
estimates conducted directly by the Federal Government;
``(B) identify the information regarding child health and
health care quality that each system is designed to capture and
generate, the study and reporting periods covered by each
system, and the extent to which the information so generated is
made widely available through publication;
``(C) identify gaps in knowledge related to children's
health status, health disparities among subgroups of children,
the effects of social conditions on children's health status
and use and effectiveness of health care, and the relationship
between child health status and family income, family stability
and preservation, and children's school readiness and
educational achievement and attainment; and
``(D) make recommendations regarding improving and
strengthening the timeliness, quality, and public transparency
and accessibility of information about child health and health
care quality.
``(2) Funding.--Up to $1,000,000 of the amount appropriated
under subsection (i) for a fiscal year shall be used to carry out
this subsection.
``(h) Rule of Construction.--Notwithstanding any other provision in
this section, no evidence based quality measure developed, published,
or used as a basis of measurement or reporting under this section may
be used to establish an irrebuttable presumption regarding either the
medical necessity of care or the maximum permissible coverage for any
individual child who is eligible for and receiving medical assistance
under title XIX or child health assistance under title XXI.
``(i) Appropriation.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated for each of fiscal years
2008 through 2012, $45,000,000 for the purpose of carrying out this
section (other than subsection (e)). Funds appropriated under this
subsection shall remain available until expended.''.
(b) Increased Matching Rate for Collecting and Reporting on Child
Health Measures.--Section 1903(a)(3)(A) (42 U.S.C. 1396b(a)(3)(A)), is
amended--
(1) by striking ``and'' at the end of clause (i); and
(2) by adding at the end the following new clause:
``(iii) an amount equal to the Federal medical assistance
percentage (as defined in section 1905(b)) of so much of the
sums expended during such quarter (as found necessary by the
Secretary for the proper and efficient administration of the
State plan) as are attributable to such developments or
modifications of systems of the type described in clause (i) as
are necessary for the efficient collection and reporting on
child health measures; and''.
SEC. 402. IMPROVED AVAILABILITY OF PUBLIC INFORMATION REGARDING
ENROLLMENT OF CHILDREN IN CHIP AND MEDICAID.
(a) Inclusion of Process and Access Measures in Annual State
Reports.--Section 2108 (42 U.S.C. 1397hh) is amended--
(1) in subsection (a), in the matter preceding paragraph (1),
by striking ``The State'' and inserting ``Subject to subsection
(e), the State''; and
(2) by adding at the end the following new subsection:
``(e) Information Required for Inclusion in State Annual Report.--
The State shall include the following information in the annual report
required under subsection (a):
``(1) Eligibility criteria, enrollment, and retention data
(including data with respect to continuity of coverage or duration
of benefits).
``(2) Data regarding the extent to which the State uses process
measures with respect to determining the eligibility of children
under the State child health plan, including measures such as 12-
month continuous eligibility, self-declaration of income for
applications or renewals, or presumptive eligibility.
``(3) Data regarding denials of eligibility and
redeterminations of eligibility.
``(4) Data regarding access to primary and specialty services,
access to networks of care, and care coordination provided under
the State child health plan, using quality care and consumer
satisfaction measures included in the Consumer Assessment of
Healthcare Providers and Systems (CAHPS) survey.
``(5) If the State provides child health assistance in the form
of premium assistance for the purchase of coverage under a group
health plan, data regarding the provision of such assistance,
including the extent to which employer-sponsored health insurance
coverage is available for children eligible for child health
assistance under the State child health plan, the range of the
monthly amount of such assistance provided on behalf of a child or
family, the number of children or families provided such assistance
on a monthly basis, the income of the children or families provided
such assistance, the benefits and cost-sharing protection provided
under the State child health plan to supplement the coverage
purchased with such premium assistance, the effective strategies
the State engages in to reduce any administrative barriers to the
provision of such assistance, and, the effects, if any, of the
provision of such assistance on preventing the coverage provided
under the State child health plan from substituting for coverage
provided under employer-sponsored health insurance offered in the
State.
``(6) To the extent applicable, a description of any State
activities that are designed to reduce the number of uncovered
children in the State, including through a State health insurance
connector program or support for innovative private health coverage
initiatives.''.
(b) Standardized Reporting Format.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall specify a standardized
format for States to use for reporting the information required
under section 2108(e) of the Social Security Act, as added by
subsection (a)(2).
(2) Transition period for states.--Each State that is required
to submit a report under subsection (a) of section 2108 of the
Social Security Act that includes the information required under
subsection (e) of such section may use up to 3 reporting periods to
transition to the reporting of such information in accordance with
the standardized format specified by the Secretary under paragraph
(1).
(c) Additional Funding for the Secretary To Improve Timeliness of
Data Reporting and Analysis for Purposes of Determining Enrollment
Increases Under Medicaid and CHIP.--
(1) Appropriation.--There is appropriated, out of any money in
the Treasury not otherwise appropriated, $5,000,000 to the
Secretary for fiscal year 2008 for the purpose of improving the
timeliness of the data reported and analyzed from the Medicaid
Statistical Information System (MSIS) for purposes of providing
more timely data on enrollment and eligibility of children under
Medicaid and CHIP and to provide guidance to States with respect to
any new reporting requirements related to such improvements.
Amounts appropriated under this paragraph shall remain available
until expended.
(2) Requirements.--The improvements made by the Secretary under
paragraph (1) shall be designed and implemented (including with
respect to any necessary guidance for States to report such
information in a complete and expeditious manner) so that,
beginning no later than October 1, 2008, data regarding the
enrollment of low-income children (as defined in section 2110(c)(4)
of the Social Security Act (42 U.S.C. 1397jj(c)(4)) of a State
enrolled in the State plan under Medicaid or the State child health
plan under CHIP with respect to a fiscal year shall be collected
and analyzed by the Secretary within 6 months of submission.
(d) GAO Study and Report on Access to Primary and Speciality
Services.--
(1) In general.--The Comptroller General of the United States
shall conduct a study of children's access to primary and specialty
services under Medicaid and CHIP, including--
(A) the extent to which providers are willing to treat
children eligible for such programs;
(B) information on such children's access to networks of
care;
(C) geographic availability of primary and specialty
services under such programs;
(D) the extent to which care coordination is provided for
children's care under Medicaid and CHIP; and
(E) as appropriate, information on the degree of
availability of services for children under such programs.
(2) Report.--Not later than 2 years after the date of enactment
of this Act, the Comptroller General shall submit a report to the
Committee on Finance of the Senate and the Committee on Energy and
Commerce of the House of Representatives on the study conducted
under paragraph (1) that includes recommendations for such Federal
and State legislative and administrative changes as the Comptroller
General determines are necessary to address any barriers to access
to children's care under Medicaid and CHIP that may exist.
SEC. 403. APPLICATION OF CERTAIN MANAGED CARE QUALITY SAFEGUARDS TO
CHIP.
(a) In General.--Section 2103(f) of Social Security Act (42 U.S.C.
1397bb(f)) is amended by adding at the end the following new paragraph:
``(3) Compliance with managed care requirements.--The State
child health plan shall provide for the application of subsections
(a)(4), (a)(5), (b), (c), (d), and (e) of section 1932 (relating to
requirements for managed care) to coverage, State agencies,
enrollment brokers, managed care entities, and managed care
organizations under this title in the same manner as such
subsections apply to coverage and such entities and organizations
under title XIX.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to contract years for health plans beginning on or after July 1,
2008.
TITLE V--IMPROVING ACCESS TO BENEFITS
SEC. 501. DENTAL BENEFITS.
(a) Coverage.--
(1) In general.--Section 2103 (42 U.S.C. 1397cc) is amended--
(A) in subsection (a)--
(i) in the matter before paragraph (1), by striking
``subsection (c)(5)'' and inserting ``paragraphs (5) and
(7) of subsection (c)''; and
(ii) in paragraph (1), by inserting ``at least'' after
``that is''; and
(B) in subsection (c)--
(i) by redesignating paragraph (5) as paragraph (7);
and
(ii) by inserting after paragraph (4), the following:
``(5) Dental benefits.--
``(A) In general.--The child health assistance provided to
a targeted low-income child shall include coverage of dental
services necessary to prevent disease and promote oral health,
restore oral structures to health and function, and treat
emergency conditions.
``(B) Permitting use of dental benchmark plans by certain
states.--A State may elect to meet the requirement of
subparagraph (A) through dental coverage that is equivalent to
a benchmark dental benefit package described in subparagraph
(C).
``(C) Benchmark dental benefit packages.--The benchmark
dental benefit packages are as follows:
``(i) FEHBP children's dental coverage.--A dental
benefits plan under chapter 89A of title 5, United States
Code, that has been selected most frequently by employees
seeking dependent coverage, among such plans that provide
such dependent coverage, in either of the previous 2 plan
years.
``(ii) State employee dependent dental coverage.--A
dental benefits plan that is offered and generally
available to State employees in the State involved and that
has been selected most frequently by employees seeking
dependent coverage, among such plans that provide such
dependent coverage, in either of the previous 2 plan years.
``(iii) Coverage offered through commercial dental
plan.--A dental benefits plan that has the largest insured
commercial, non-medicaid enrollment of dependent covered
lives of such plans that is offered in the State
involved.''.
(2) Assuring access to care.--Section 2102(a)(7)(B) (42 U.S.C.
1397bb(c)(2)) is amended by inserting ``and services described in
section 2103(c)(5)'' after ``emergency services''.
(3) Effective date.--The amendments made by paragraph (1) shall
apply to coverage of items and services furnished on or after
October 1, 2008.
(b) Dental Education for Parents of Newborns.--The Secretary shall
develop and implement, through entities that fund or provide perinatal
care services to targeted low-income children under a State child
health plan under title XXI of the Social Security Act, a program to
deliver oral health educational materials that inform new parents about
risks for, and prevention of, early childhood caries and the need for a
dental visit within their newborn's first year of life.
(c) Provision of Dental Services Through FQHCs.--
(1) Medicaid.--Section 1902(a) (42 U.S.C. 1396a(a)) is
amended--
(A) by striking ``and'' at the end of paragraph (69);
(B) by striking the period at the end of paragraph (70) and
inserting ``; and''; and
(C) by inserting after paragraph (70) the following new
paragraph:
``(71) provide that the State will not prevent a Federally-
qualified health center from entering into contractual
relationships with private practice dental providers in the
provision of Federally-qualified health center services.''.
(2) CHIP.--Section 2107(e)(1) (42 U.S.C. 1397g(e)(1)), as
amended by subsections (a)(2) and (d)(2) of section 203, is amended
by inserting after subparagraph (B) the following new subparagraph
(and redesignating the succeeding subparagraphs accordingly):
``(C) Section 1902(a)(71) (relating to limiting FQHC
contracting for provision of dental services).''.
(3) Effective date.--The amendments made by this subsection
shall take effect on January 1, 2008.
(d) Reporting Information on Dental Health.--
(1) Medicaid.--Section 1902(a)(43)(D)(iii) (42 U.S.C.
1396a(a)(43)(D)(iii)) is amended by inserting ``and other
information relating to the provision of dental services to such
children described in section 2108(e)'' after ``receiving dental
services,''.
(2) CHIP.--Section 2108 (42 U.S.C. 1397hh) is amended by adding
at the end the following new subsection:
``(e) Information on Dental Care for Children.--
``(1) In general.--Each annual report under subsection (a)
shall include the following information with respect to care and
services described in section 1905(r)(3) provided to targeted low-
income children enrolled in the State child health plan under this
title at any time during the year involved:
``(A) The number of enrolled children by age grouping used
for reporting purposes under section 1902(a)(43).
``(B) For children within each such age grouping,
information of the type contained in questions 12(a)-(c) of CMS
Form 416 (that consists of the number of enrolled targeted low
income children who receive any, preventive, or restorative
dental care under the State plan).
``(C) For the age grouping that includes children 8 years
of age, the number of such children who have received a
protective sealant on at least one permanent molar tooth.
``(2) Inclusion of information on enrollees in managed care
plans.--The information under paragraph (1) shall include
information on children who are enrolled in managed care plans and
other private health plans and contracts with such plans under this
title shall provide for the reporting of such information by such
plans to the State.''.
(3) Effective date.--The amendments made by this subsection
shall be effective for annual reports submitted for years beginning
after date of enactment.
(e) Improved Accessibility of Dental Provider Information to
Enrollees Under Medicaid and CHIP.--The Secretary shall--
(1) work with States, pediatric dentists, and other dental
providers (including providers that are, or are affiliated with, a
school of dentistry) to include, not later than 6 months after the
date of the enactment of this Act, on the Insure Kids Now website
(http://www.insurekidsnow.gov/) and hotline (1-877-KIDS-NOW) (or on
any successor websites or hotlines) a current and accurate list of
all such dentists and providers within each State that provide
dental services to children enrolled in the State plan (or waiver)
under Medicaid or the State child health plan (or waiver) under
CHIP, and shall ensure that such list is updated at least
quarterly; and
(2) work with States to include, not later than 6 months after
the date of the enactment of this Act, a description of the dental
services provided under each State plan (or waiver) under Medicaid
and each State child health plan (or waiver) under CHIP on such
Insure Kids Now website, and shall ensure that such list is updated
at least annually.
(f) Inclusion of Status of Efforts To Improve Dental Care in
Reports on the Quality of Children's Health Care Under Medicaid and
CHIP.--Section 1139A(a), as added by section 401(a), is amended--
(1) in paragraph (3)(B)(ii), by inserting ``and, with respect
to dental care, conditions requiring the restoration of teeth,
relief of pain and infection, and maintenance of dental health''
after ``chronic conditions''; and
(2) in paragraph (6)(A)(ii), by inserting ``dental care,''
after ``preventive health services,''.
(g) GAO Study and Report.--
(1) Study.--The Comptroller General of the United States shall
provide for a study that examines--
(A) access to dental services by children in underserved
areas;
(B) children's access to oral health care, including
preventive and restorative services, under Medicaid and CHIP,
including--
(i) the extent to which dental providers are willing to
treat children eligible for such programs;
(ii) information on such children's access to networks
of care, including such networks that serve special needs
children; and
(iii) geographic availability of oral health care,
including preventive and restorative services, under such
programs; and
(C) the feasibility and appropriateness of using qualified
mid-level dental health providers, in coordination with
dentists, to improve access for children to oral health
services and public health overall.
(2) Report.--Not later than 18 months year after the date of
the enactment of this Act, the Comptroller General shall submit to
Congress a report on the study conducted under paragraph (1). The
report shall include recommendations for such Federal and State
legislative and administrative changes as the Comptroller General
determines are necessary to address any barriers to access to oral
health care, including preventive and restorative services, under
Medicaid and CHIP that may exist.
SEC. 502. MENTAL HEALTH PARITY IN CHIP PLANS.
(a) Assurance of Parity.--Section 2103(c) (42 U.S.C. 1397cc(c)), as
amended by section 501(a)(1)(B), is amended by inserting after
paragraph (5), the following:
``(6) Mental health services parity.--
``(A) In general.--In the case of a State child health plan
that provides both medical and surgical benefits and mental
health or substance abuse benefits, such plan shall ensure that
the financial requirements and treatment limitations applicable
to such mental health or substance abuse benefits are no more
restrictive than the financial requirements and treatment
limitations applied to substantially all medical and surgical
benefits covered by the plan.
``(B) Deemed compliance.--To the extent that a State child
health plan includes coverage with respect to an individual
described in section 1905(a)(4)(B) and covered under the State
plan under section 1902(a)(10)(A) of the services described in
section 1905(a)(4)(B) (relating to early and periodic
screening, diagnostic, and treatment services defined in
section 1905(r)) and provided in accordance with section
1902(a)(43), such plan shall be deemed to satisfy the
requirements of subparagraph (A).''.
(b) Conforming Amendments.--Section 2103 (42 U.S.C. 1397cc) is
amended--
(1) in subsection (a), as amended by section 501(a)(1)(A)(i),
in the matter preceding paragraph (1), by inserting ``, (6),''
after ``(5)''; and
(2) in subsection (c)(2), by striking subparagraph (B) and
redesignating subparagraphs (C) and (D) as subparagraphs (B) and
(C), respectively.
SEC. 503. APPLICATION OF PROSPECTIVE PAYMENT SYSTEM FOR SERVICES
PROVIDED BY FEDERALLY-QUALIFIED HEALTH CENTERS AND RURAL HEALTH
CLINICS.
(a) Application of Prospective Payment System.--
(1) In general.--Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)),
as amended by section 501(c)(2) is amended by inserting after
subparagraph (C) the following new subparagraph (and redesignating
the succeeding subparagraphs accordingly):
``(D) Section 1902(bb) (relating to payment for services
provided by Federally-qualified health centers and rural health
clinics).''.
(2) Effective date.--The amendment made by paragraph (1) shall
apply to services provided on or after October 1, 2008.
(b) Transition Grants.--
(1) Appropriation.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated to the Secretary for
fiscal year 2008, $5,000,000, to remain available until expended,
for the purpose of awarding grants to States with State child
health plans under CHIP that are operated separately from the State
Medicaid plan under title XIX of the Social Security Act (including
any waiver of such plan), or in combination with the State Medicaid
plan, for expenditures related to transitioning to compliance with
the requirement of section 2107(e)(1)(D) of the Social Security Act
(as added by subsection (a)) to apply the prospective payment
system established under section 1902(bb) of the such Act (42
U.S.C. 1396a(bb)) to services provided by Federally-qualified
health centers and rural health clinics.
(2) Monitoring and report.--The Secretary shall monitor the
impact of the application of such prospective payment system on the
States described in paragraph (1) and, not later than October 1,
2010, shall report to Congress on any effect on access to benefits,
provider payment rates, or scope of benefits offered by such States
as a result of the application of such payment system.
SEC. 504. PREMIUM GRACE PERIOD.
(a) In General.--Section 2103(e)(3) (42 U.S.C. 1397cc(e)(3)) is
amended by adding at the end the following new subparagraph:
``(C) Premium grace period.--The State child health plan--
``(i) shall afford individuals enrolled under the plan
a grace period of at least 30 days from the beginning of a
new coverage period to make premium payments before the
individual's coverage under the plan may be terminated; and
``(ii) shall provide to such an individual, not later
than 7 days after the first day of such grace period,
notice--
``(I) that failure to make a premium payment within
the grace period will result in termination of coverage
under the State child health plan; and
``(II) of the individual's right to challenge the
proposed termination pursuant to the applicable Federal
regulations.
For purposes of clause (i), the term `new coverage period'
means the month immediately following the last month for which
the premium has been paid.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to new coverage periods beginning on or after January 1, 2009.
SEC. 505. DEMONSTRATION PROJECTS RELATING TO DIABETES PREVENTION.
There is authorized to be appropriated $15,000,000 during the
period of fiscal years 2008 through 2012 to fund demonstration projects
in up to 10 States over 3 years for voluntary incentive programs to
promote children's receipt of relevant screenings and improvements in
healthy eating and physical activity with the aim of reducing the
incidence of type 2 diabetes. Such programs may involve reductions in
cost-sharing or premiums when children receive regular screening and
reach certain benchmarks in healthy eating and physical activity. Under
such programs, a State may also provide financial bonuses for
partnerships with entities, such as schools, which increase their
education and efforts with respect to reducing the incidence of type 2
diabetes and may also devise incentives for providers serving children
covered under this title and title XIX to perform relevant screening
and counseling regarding healthy eating and physical activity. Upon
completion of these demonstrations, the Secretary shall provide a
report to Congress on the results of the State demonstration projects
and the degree to which they helped improve health outcomes related to
type 2 diabetes in children in those States.
SEC. 506. CLARIFICATION OF COVERAGE OF SERVICES PROVIDED THROUGH
SCHOOL-BASED HEALTH CENTERS.
Section 2103(c) (42 U.S.C. 1397cc(c)), as amended by section
501(a)(1)(B), is amended by adding at the end the following new
paragraph:
``(8) Availability of coverage for items and services furnished
through school-based health centers.--Nothing in this title shall
be construed as limiting a State's ability to provide child health
assistance for covered items and services that are furnished
through school-based health centers.''.
TITLE VI--PROGRAM INTEGRITY AND OTHER MISCELLANEOUS PROVISIONS
Subtitle A--Program Integrity and Data Collection
SEC. 601. PAYMENT ERROR RATE MEASUREMENT (``PERM'').
(a) Expenditures Related to Compliance With Requirements.--
(1) Enhanced payments.--Section 2105(c) (42 U.S.C. 1397ee(c)),
as amended by section 301(a), is amended by adding at the end the
following new paragraph:
``(12) Enhanced payments.--Notwithstanding subsection (b), the
enhanced FMAP with respect to payments under subsection (a) for
expenditures related to the administration of the payment error
rate measurement (PERM) requirements applicable to the State child
health plan in accordance with the Improper Payments Information
Act of 2002 and parts 431 and 457 of title 42, Code of Federal
Regulations (or any related or successor guidance or regulations)
shall in no event be less than 90 percent.''.
(2) Exclusion of from cap on administrative expenditures.--
Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)C)), as amended by
section 302(b)), is amended by adding at the end the following:
``(iv) Payment error rate measurement (perm)
expenditures.--Expenditures related to the administration
of the payment error rate measurement (PERM) requirements
applicable to the State child health plan in accordance
with the Improper Payments Information Act of 2002 and
parts 431 and 457 of title 42, Code of Federal Regulations
(or any related or successor guidance or regulations).''.
(b) Final Rule Required To Be in Effect for All States.--
Notwithstanding parts 431 and 457 of title 42, Code of Federal
Regulations (as in effect on the date of enactment of this Act), the
Secretary shall not calculate or publish any national or State-specific
error rate based on the application of the payment error rate
measurement (in this section referred to as ``PERM'') requirements to
CHIP until after the date that is 6 months after the date on which a
final rule implementing such requirements in accordance with the
requirements of subsection (c) is in effect for all States. Any
calculation of a national error rate or a State specific error rate
after such final rule in effect for all States may only be inclusive of
errors, as defined in such final rule or in guidance issued within a
reasonable time frame after the effective date for such final rule that
includes detailed guidance for the specific methodology for error
determinations.
(c) Requirements for Final Rule.--For purposes of subsection (b),
the requirements of this subsection are that the final rule
implementing the PERM requirements shall--
(1) include--
(A) clearly defined criteria for errors for both States and
providers;
(B) a clearly defined process for appealing error
determinations by--
(i) review contractors; or
(ii) the agency and personnel described in section
431.974(a)(2) of title 42, Code of Federal Regulations, as
in effect on September 1, 2007, responsible for the
development, direction, implementation, and evaluation of
eligibility reviews and associated activities; and
(C) clearly defined responsibilities and deadlines for
States in implementing any corrective action plans; and
(2) provide that the payment error rate determined for a State
shall not take into account payment errors resulting from the
State's verification of an applicant's self-declaration or self-
certification of eligibility for, and the correct amount of,
medical assistance or child health assistance, if the State process
for verifying an applicant's self-declaration or self-certification
satisfies the requirements for such process applicable under
regulations promulgated by the Secretary or otherwise approved by
the Secretary.
(d) Option for Application of Data for States in First Application
Cycle Under the Interim Final Rule.--After the final rule implementing
the PERM requirements in accordance with the requirements of subsection
(c) is in effect for all States, a State for which the PERM
requirements were first in effect under an interim final rule for
fiscal year 2007 may elect to accept any payment error rate determined
in whole or in part for the State on the basis of data for that fiscal
year or may elect to not have any payment error rate determined on the
basis of such data and, instead, shall be treated as if fiscal year
2010 were the first fiscal year for which the PERM requirements apply
to the State.
(e) Harmonization of MEQC and PERM.--
(1) Reduction of redundancies.--The Secretary shall review the
Medicaid Eligibility Quality Control (in this subsection referred
to as the ``MEQC'') requirements with the PERM requirements and
coordinate consistent implementation of both sets of requirements,
while reducing redundancies.
(2) State option to apply perm data.--A State may elect, for
purposes of determining the erroneous excess payments for medical
assistance ratio applicable to the State for a fiscal year under
section 1903(u) of the Social Security Act (42 U.S.C. 1396b(u)) to
substitute data resulting from the application of the PERM
requirements to the State after the final rule implementing such
requirements is in effect for all States for data obtained from the
application of the MEQC requirements to the State with respect to a
fiscal year.
(3) State option to apply meqc data.--For purposes of
satisfying the requirements of subpart Q of part 431 of title 42,
Code of Federal Regulations, as in effect on September 1, 2007,
relating to Medicaid eligibility reviews, a State may elect to
substitute data obtained through MEQC reviews conducted in
accordance with section 1903(u) of the Social Security Act (42
U.S.C. 1396b(u)) for data required for purposes of PERM
requirements, but only if the State MEQC reviews are based on a
broad, representative sample of Medicaid applicants or enrollees in
the States.
(f) Identification of Improved State-Specific Sample Sizes.--The
Secretary shall establish State-specific sample sizes for application
of the PERM requirements with respect to State child health plans for
fiscal years beginning with fiscal year 2009, on the basis of such
information as the Secretary determines appropriate. In establishing
such sample sizes, the Secretary shall, to the greatest extent
practicable--
(1) minimize the administrative cost burden on States under
Medicaid and CHIP; and
(2) maintain State flexibility to manage such programs.
SEC. 602. IMPROVING DATA COLLECTION.
(a) Increased Appropriation.--Section 2109(b)(2) (42 U.S.C.
1397ii(b)(2)) is amended by striking ``$10,000,000 for fiscal year
2000'' and inserting ``$20,000,000 for fiscal year 2008''.
(b) Use of Additional Funds.--Section 2109(b) (42 U.S.C.
1397ii(b)), as amended by subsection (a), is amended--
(1) by redesignating paragraph (2) as paragraph (4); and
(2) by inserting after paragraph (1), the following new
paragraphs:
``(2) Additional requirements.--In addition to making the
adjustments required to produce the data described in paragraph
(1), with respect to data collection occurring for fiscal years
beginning with fiscal year 2008, in appropriate consultation with
the Secretary of Health and Human Services, the Secretary of
Commerce shall do the following:
``(A) Make appropriate adjustments to the Current
Population Survey to develop more accurate State-specific
estimates of the number of children enrolled in health coverage
under title XIX or this title.
``(B) Make appropriate adjustments to the Current
Population Survey to improve the survey estimates used to
determine the child population growth factor under section
2104(i)(5)(B) and any other data necessary for carrying out
this title.
``(C) Include health insurance survey information in the
American Community Survey related to children.
``(D) Assess whether American Community Survey estimates,
once such survey data are first available, produce more
reliable estimates than the Current Population Survey with
respect to the purposes described in subparagraph (B).
``(E) On the basis of the assessment required under
subparagraph (D), recommend to the Secretary of Health and
Human Services whether American Community Survey estimates
should be used in lieu of, or in some combination with, Current
Population Survey estimates for the purposes described in
subparagraph (B).
``(F) Continue making the adjustments described in the last
sentence of paragraph (1) with respect to expansion of the
sample size used in State sampling units, the number of
sampling units in a State, and using an appropriate
verification element.
``(3) Authority for the secretary of health and human services
to transition to the use of all, or some combination of, acs
estimates upon recommendation of the secretary of commerce.--If, on
the basis of the assessment required under paragraph (2)(D), the
Secretary of Commerce recommends to the Secretary of Health and
Human Services that American Community Survey estimates should be
used in lieu of, or in some combination with, Current Population
Survey estimates for the purposes described in paragraph (2)(B),
the Secretary of Health and Human Services, in consultation with
the States, may provide for a period during which the Secretary may
transition from carrying out such purposes through the use of
Current Population Survey estimates to the use of American
Community Survey estimates (in lieu of, or in combination with the
Current Population Survey estimates, as recommended), provided that
any such transition is implemented in a manner that is designed to
avoid adverse impacts upon States with approved State child health
plans under this title.''.
SEC. 603. UPDATED FEDERAL EVALUATION OF CHIP.
Section 2108(c) (42 U.S.C. 1397hh(c)) is amended by striking
paragraph (5) and inserting the following:
``(5) Subsequent evaluation using updated information.--
``(A) In general.--The Secretary, directly or through
contracts or interagency agreements, shall conduct an
independent subsequent evaluation of 10 States with approved
child health plans.
``(B) Selection of states and matters included.--Paragraphs
(2) and (3) shall apply to such subsequent evaluation in the
same manner as such provisions apply to the evaluation
conducted under paragraph (1).
``(C) Submission to congress.--Not later than December 31,
2010, the Secretary shall submit to Congress the results of the
evaluation conducted under this paragraph.
``(D) Funding.--Out of any money in the Treasury of the
United States not otherwise appropriated, there are
appropriated $10,000,000 for fiscal year 2009 for the purpose
of conducting the evaluation authorized under this paragraph.
Amounts appropriated under this subparagraph shall remain
available for expenditure through fiscal year 2011.''.
SEC. 604. ACCESS TO RECORDS FOR IG AND GAO AUDITS AND EVALUATIONS.
Section 2108(d) (42 U.S.C. 1397hh(d)) is amended to read as
follows:
``(d) Access to Records for IG and GAO Audits and Evaluations.--For
the purpose of evaluating and auditing the program established under
this title, or title XIX, the Secretary, the Office of Inspector
General, and the Comptroller General shall have access to any books,
accounts, records, correspondence, and other documents that are related
to the expenditure of Federal funds under this title and that are in
the possession, custody, or control of States receiving Federal funds
under this title or political subdivisions thereof, or any grantee or
contractor of such States or political subdivisions.''.
SEC. 605. NO FEDERAL FUNDING FOR ILLEGAL ALIENS.
Nothing in this Act allows Federal payment for individuals who are
not legal residents.
Subtitle B--Miscellaneous Health Provisions
SEC. 611. DEFICIT REDUCTION ACT TECHNICAL CORRECTIONS.
(a) Clarification of Requirement to Provide EPSDT Services for All
Children in Benchmark Benefit Packages Under Medicaid.--Section
1937(a)(1) (42 U.S.C. 1396u-7(a)(1)), as inserted by section 6044(a) of
the Deficit Reduction Act of 2005 (Public Law 109-171, 120 Stat. 88),
is amended--
(1) in subparagraph (A)--
(A) in the matter before clause (i)--
(i) by striking ``Notwithstanding any other provision
of this title'' and inserting ``Notwithstanding section
1902(a)(1) (relating to statewideness), section
1902(a)(10)(B) (relating to comparability) and any other
provision of this title which would be directly contrary to
the authority under this section and subject to subsection
(E)''; and
(ii) by striking ``enrollment in coverage that
provides'' and inserting ``coverage that'';
(B) in clause (i), by inserting ``provides'' after ``(i)'';
and
(C) by striking clause (ii) and inserting the following:
``(ii) for any individual described in section
1905(a)(4)(B) who is eligible under the State plan in
accordance with paragraphs (10) and (17) of section
1902(a), consists of the items and services described in
section 1905(a)(4)(B) (relating to early and periodic
screening, diagnostic, and treatment services defined in
section 1905(r)) and provided in accordance with the
requirements of section 1902(a)(43).'';
(2) in subparagraph (C)--
(A) in the heading, by striking ``wrap-around'' and
inserting ``additional''; and
(B) by striking ``wrap-around or''; and
(3) by adding at the end the following new subparagraph:
``(E) Rule of construction.--Nothing in this paragraph
shall be construed as--
``(i) requiring a State to offer all or any of the
items and services required by subparagraph (A)(ii) through
an issuer of benchmark coverage described in subsection
(b)(1) or benchmark equivalent coverage described in
subsection (b)(2);
``(ii) preventing a State from offering all or any of
the items and services required by subparagraph (A)(ii)
through an issuer of benchmark coverage described in
subsection (b)(1) or benchmark equivalent coverage
described in subsection (b)(2); or
``(iii) affecting a child's entitlement to care and
services described in subsections (a)(4)(B) and (r) of
section 1905 and provided in accordance with section
1902(a)(43) whether provided through benchmark coverage,
benchmark equivalent coverage, or otherwise.''.
(b) Correction of Reference to Children in Foster Care Receiving
Child Welfare Services.--Section 1937(a)(2)(B)(viii) (42 U.S.C. 1396u-
7(a)(2)(B)(viii), as inserted by section 6044(a) of the Deficit
Reduction Act of 2005, is amended by striking ``aid or assistance is
made available under part B of title IV to children in foster care and
individuals'' and inserting ``child welfare services are made available
under part B of title IV on the basis of being a child in foster care
or''.
(c) Transparency.--Section 1937 (42 U.S.C. 1396u-7), as inserted by
section 6044(a) of the Deficit Reduction Act of 2005, is amended by
adding at the end the following:
``(c) Publication of Provisions Affected.--With respect to a State
plan amendment to provide benchmark benefits in accordance with
subsections (a) and (b) that is approved by the Secretary, the
Secretary shall publish on the Internet website of the Centers for
Medicare & Medicaid Services, a list of the provisions of this title
that the Secretary has determined do not apply in order to enable the
State to carry out the plan amendment and the reason for each such
determination on the date such approval is made, and shall publish such
list in the Federal Register and not later than 30 days after such date
of approval.''.
(d) Effective Date.--The amendments made by subsections (a), (b),
and (c) of this section shall take effect as if included in the
amendment made by section 6044(a) of the Deficit Reduction Act of 2005.
SEC. 612. REFERENCES TO TITLE XXI.
Section 704 of the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999, as enacted into law by division B of Public Law
106-113 (113 Stat. 1501A-402) is repealed.
SEC. 613. PROHIBITING INITIATION OF NEW HEALTH OPPORTUNITY ACCOUNT
DEMONSTRATION PROGRAMS.
After the date of the enactment of this Act, the Secretary of
Health and Human Services may not approve any new demonstration
programs under section 1938 of the Social Security Act (42 U.S.C.
1396u-8).
SEC. 614. COUNTY MEDICAID HEALTH INSURING ORGANIZATIONS; GAO REPORT
ON MEDICAID MANAGED CARE PAYMENT RATES.
(a) In General.--Section 9517(c)(3) of the Consolidated Omnibus
Budget Reconciliation Act of 1985 (42 U.S.C. 1396b note), as added by
section 4734 of the Omnibus Budget Reconciliation Act of 1990 and as
amended by section 704 of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000, is amended--
(1) in subparagraph (A), by inserting ``, in the case of any
health insuring organization described in such subparagraph that is
operated by a public entity established by Ventura County, and in
the case of any health insuring organization described in such
subparagraph that is operated by a public entity established by
Merced County'' after ``described in subparagraph (B)''; and
(2) in subparagraph (C), by striking ``14 percent'' and
inserting ``16 percent''.
(b) Effective Date.--The amendments made by subsection (a) shall
take effect on the date of the enactment of this Act.
(c) GAO Report on Actuarial Soundness of Medicaid Managed Care
Payment Rates.--Not later than 18 months after the date of the
enactment of this Act, the Comptroller General of the United States
shall submit a report to the Committee on Finance of the Senate and the
Committee on Energy and Commerce of the House of Representatives
analyzing the extent to which State payment rates for medicaid managed
care organizations under title XIX of the Social Security Act are
actuarially sound.
SEC. 615. ADJUSTMENT IN COMPUTATION OF MEDICAID FMAP TO DISREGARD
AN EXTRAORDINARY EMPLOYER PENSION CONTRIBUTION.
(a) In General.--Only for purposes of computing the FMAP (as
defined in subsection (e)) for a State for a fiscal year (beginning
with fiscal year 2006) and applying the FMAP under title XIX of the
Social Security Act, any significantly disproportionate employer
pension or insurance fund contribution described in subsection (b)
shall be disregarded in computing the per capita income of such State,
but shall not be disregarded in computing the per capita income for the
continental United States (and Alaska) and Hawaii.
(b) Significantly Disproportionate Employer Pension and Insurance
Fund Contribution.--
(1) In general.--For purposes of this section, a significantly
disproportionate employer pension and insurance fund contribution
described in this subsection with respect to a State is any
identifiable employer contribution towards pension or other
employee insurance funds that is estimated to accrue to residents
of such State for a calendar year (beginning with calendar year
2003) if the increase in the amount so estimated exceeds 25 percent
of the total increase in personal income in that State for the year
involved.
(2) Data to be used.--For estimating and adjustment a FMAP
already calculated as of the date of the enactment of this Act for
a State with a significantly disproportionate employer pension and
insurance fund contribution, the Secretary shall use the personal
income data set originally used in calculating such FMAP.
(3) Special adjustment for negative growth.--If in any calendar
year the total personal income growth in a State is negative, an
employer pension and insurance fund contribution for the purposes
of calculating the State's FMAP for a calendar year shall not
exceed 125 percent of the amount of such contribution for the
previous calendar year for the State.
(c) Hold Harmless.--No State shall have its FMAP for a fiscal year
reduced as a result of the application of this section.
(d) Report.--Not later than May 15, 2008, the Secretary shall
submit to the Congress a report on the problems presented by the
current treatment of pension and insurance fund contributions in the
use of Bureau of Economic Affairs calculations for the FMAP and for
Medicaid and on possible alternative methodologies to mitigate such
problems.
(e) FMAP Defined.--For purposes of this section, the term ``FMAP''
means the Federal medical assistance percentage, as defined in section
1905(b) of the Social Security Act (42 U.S.C. 1396(d)).
SEC. 616. MORATORIUM ON CERTAIN PAYMENT RESTRICTIONS.
Notwithstanding any other provision of law, the Secretary of Health
and Human Services shall not, prior to May 28, 2008, take any action
(through promulgation of regulation, issuance of regulatory guidance,
use of federal payment audit procedures, or other administrative
action, policy, or practice, including a Medical Assistance Manual
transmittal or letter to State Medicaid directors) to restrict coverage
or payment under title XIX of the Social Security Act for
rehabilitation services, or school-based administration,
transportation, or medical services if such restrictions are more
restrictive in any aspect than those applied to such coverage or
payment as of July 1, 2007.
SEC. 617. MEDICAID DSH ALLOTMENTS FOR TENNESSEE AND HAWAII.
(a) Tennessee.--The DSH allotments for Tennessee for each fiscal
year beginning with fiscal year 2008 under subsection (f)(3) of section
1923 of the Social Security Act (42 U.S.C. 1396r-4) are deemed to be
$30,000,000. The Secretary of Health and Human Services may impose a
limitation on the total amount of payments made to hospitals under the
TennCare Section 1115 waiver only to the extent that such limitation is
necessary to ensure that a hospital does not receive payment in excess
of the amounts described in subsection (f) of such section or as
necessary to ensure that the waiver remains budget neutral.
(b) Hawaii.--Section 1923(f)(6) (42 U.S.C. 1396r-4(f)(6)) is
amended--
(1) in the paragraph heading, by striking ``for fiscal year
2007''; and
(2) in subparagraph (B)--
(A) in clause (i), by striking ``Only with respect to
fiscal year 2007'' and inserting ``With respect to each of
fiscal years 2007 and 2008'';
(B) by redesignating clause (ii) as clause (iv); and
(C) by inserting after clause (i), the following new
clauses:
``(ii) Treatment as a low-dsh state.--With respect to
fiscal year 2009 and each fiscal year thereafter,
notwithstanding the table set forth in paragraph (2), the
DSH allotment for Hawaii shall be increased in the same
manner as allotments for low DSH States are increased for
such fiscal year under clauses (ii) and (iii) of paragraph
(5)(B).
``(iii) Certain hospital payments.--The Secretary may
not impose a limitation on the total amount of payments
made to hospitals under the QUEST section 1115
Demonstration Project except to the extent that such
limitation is necessary to ensure that a hospital does not
receive payments in excess of the amounts described in
subsection (g), or as necessary to ensure that such
payments under the waiver and such payments pursuant to the
allotment provided in this section do not, in the aggregate
in any year, exceed the amount that the Secretary
determines is equal to the Federal medical assistance
percentage component attributable to disproportionate share
hospital payment adjustments for such year that is
reflected in the budget neutrality provision of the QUEST
Demonstration Project.''.
SEC. 618. CLARIFICATION TREATMENT OF REGIONAL MEDICAL CENTER.
(a) In General.--Nothing in section 1903(w) of the Social Security
Act (42 U.S.C. 1396b(w)) shall be construed by the Secretary of Health
and Human Services as prohibiting a State's use of funds as the non-
Federal share of expenditures under title XIX of such Act where such
funds are transferred from or certified by a publicly-owned regional
medical center located in another State and described in subsection
(b), so long as the Secretary determines that such use of funds is
proper and in the interest of the program under title XIX.
(b) Center Described.--A center described in this subsection is a
publicly-owned regional medical center that--
(1) provides level 1 trauma and burn care services;
(2) provides level 3 neonatal care services;
(3) is obligated to serve all patients, regardless of ability
to pay;
(4) is located within a Standard Metropolitan Statistical Area
(SMSA) that includes at least 3 States;
(5) provides services as a tertiary care provider for patients
residing within a 125-mile radius; and
(6) meets the criteria for a disproportionate share hospital
under section 1923 of such Act (42 U.S.C. 1396r-4) in at least one
State other than the State in which the center is located.
SEC. 619. EXTENSION OF SSI WEB-BASED ASSET DEMONSTRATION PROJECT TO
THE MEDICAID PROGRAM.
(a) In General.--Beginning on October 1, 2012, the Secretary of
Health and Human Services shall provide for the application to asset
eligibility determinations under the Medicaid program under title XIX
of the Social Security Act of the automated, secure, web-based asset
verification request and response process being applied for determining
eligibility for benefits under the Supplemental Security Income (SSI)
program under title XVI of such Act under a demonstration project
conducted under the authority of section 1631(e)(1)(B)(ii) of such Act
(42 U.S.C. 1383(e)(1)(B)(ii)).
(b) Limitation.--Such application shall only extend to those States
in which such demonstration project is operating and only for the
period in which such project is otherwise provided.
(c) Rules of Application.--For purposes of carrying out subsection
(a), notwithstanding any other provision of law, information obtained
from a financial institution that is used for purposes of eligibility
determinations under such demonstration project with respect to the
Secretary of Health and Human Services under the SSI program may also
be shared and used by States for purposes of eligibility determinations
under the Medicaid program. In applying section 1631(e)(1)(B)(ii) of
the Social Security Act under this subsection, references to the
Commissioner of Social Security and benefits under title XVI of such
Act shall be treated as including a reference to a State described in
subsection (b) and medical assistance under title XIX of such Act
provided by such a State.
Subtitle C--Other Provisions
SEC. 621. SUPPORT FOR INJURED SERVICEMEMBERS.
(a) Short Title.--This section may be cited as the ``Support for
Injured Servicemembers Act''.
(b) Servicemember Family Leave.--
(1) Definitions.--Section 101 of the Family and Medical Leave
Act of 1993 (29 U.S.C. 2611) is amended by adding at the end the
following:
``(14) Active duty.--The term `active duty' means duty under a
call or order to active duty under a provision of law referred to
in section 101(a)(13)(B) of title 10, United States Code.
``(15) Covered servicemember.--The term `covered servicemember'
means a member of the Armed Forces, including a member of the
National Guard or a Reserve, who is undergoing medical treatment,
recuperation, or therapy, is otherwise in medical hold or medical
holdover status, or is otherwise on the temporary disability
retired list, for a serious injury or illness.
``(16) Medical hold or medical holdover status.--The term
`medical hold or medical holdover status' means--
``(A) the status of a member of the Armed Forces, including
a member of the National Guard or a Reserve, assigned or
attached to a military hospital for medical care; and
``(B) the status of a member of a reserve component of the
Armed Forces who is separated, whether pre-deployment or post-
deployment, from the member's unit while in need of health care
based on a medical condition identified while the member is on
active duty in the Armed Forces.
``(17) Next of kin.--The term `next of kin', used with respect
to an individual, means the nearest blood relative of that
individual.
``(18) Serious injury or illness.--The term `serious injury or
illness', in the case of a member of the Armed Forces, means an
injury or illness incurred by the member in line of duty on active
duty in the Armed Forces that may render the member medically unfit
to perform the duties of the member's office, grade, rank, or
rating.''.
(2) Entitlement to leave.--Section 102(a) of such Act (29
U.S.C. 2612(a)) is amended by adding at the end the following:
``(3) Servicemember family leave.--Subject to section 103, an
eligible employee who is the spouse, son, daughter, parent, or next
of kin of a covered servicemember shall be entitled to a total of
26 workweeks of leave during a 12-month period to care for the
servicemember. The leave described in this paragraph shall only be
available during a single 12-month period.
``(4) Combined leave total.--During the single 12-month period
described in paragraph (3), an eligible employee shall be entitled
to a combined total of 26 workweeks of leave under paragraphs (1)
and (3). Nothing in this paragraph shall be construed to limit the
availability of leave under paragraph (1) during any other 12-month
period.''.
(3) Requirements relating to leave.--
(A) Schedule.--Section 102(b) of such Act (29 U.S.C.
2612(b)) is amended--
(i) in paragraph (1), in the second sentence--
(I) by striking ``section 103(b)(5)'' and inserting
``subsection (b)(5) or (f) (as appropriate) of section
103''; and
(II) by inserting ``or under subsection (a)(3)''
after ``subsection (a)(1)''; and
(ii) in paragraph (2), by inserting ``or under
subsection (a)(3)'' after ``subsection (a)(1)''.
(B) Substitution of paid leave.--Section 102(d) of such Act
(29 U.S.C. 2612(d)) is amended--
(i) in paragraph (1)--
(I) by inserting ``(or 26 workweeks in the case of
leave provided under subsection (a)(3))'' after ``12
workweeks'' the first place it appears; and
(II) by inserting ``(or 26 workweeks, as
appropriate)'' after ``12 workweeks'' the second place
it appears; and
(ii) in paragraph (2)(B), by adding at the end the
following: ``An eligible employee may elect, or an employer
may require the employee, to substitute any of the accrued
paid vacation leave, personal leave, family leave, or
medical or sick leave of the employee for leave provided
under subsection (a)(3) for any part of the 26-week period
of such leave under such subsection.''.
(C) Notice.--Section 102(e)(2) of such Act (29 U.S.C.
2612(e)(2)) is amended by inserting ``or under subsection
(a)(3)'' after ``subsection (a)(1)''.
(D) Spouses employed by same employer.--Section 102(f) of
such Act (29 U.S.C. 2612(f)) is amended--
(i) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), and aligning the margins of the
subparagraphs with the margins of section 102(e)(2)(A);
(ii) by striking ``In any'' and inserting the
following:
``(1) In general.--In any''; and
(iii) by adding at the end the following:
``(2) Servicemember family leave.--
``(A) In general.--The aggregate number of workweeks of
leave to which both that husband and wife may be entitled under
subsection (a) may be limited to 26 workweeks during the single
12-month period described in subsection (a)(3) if the leave
is--
``(i) leave under subsection (a)(3); or
``(ii) a combination of leave under subsection (a)(3)
and leave described in paragraph (1).
``(B) Both limitations applicable.--If the leave taken by
the husband and wife includes leave described in paragraph (1),
the limitation in paragraph (1) shall apply to the leave
described in paragraph (1).''.
(E) Certification.--Section 103 of such Act (29 U.S.C.
2613) is amended by adding at the end the following:
``(f) Certification for Servicemember Family Leave.--An employer
may require that a request for leave under section 102(a)(3) be
supported by a certification issued at such time and in such manner as
the Secretary may by regulation prescribe.''.
(F) Failure to return.--Section 104(c) of such Act (29
U.S.C. 2614(c)) is amended--
(i) in paragraph (2)(B)(i), by inserting ``or under
section 102(a)(3)'' before the semicolon; and
(ii) in paragraph (3)(A)--
(I) in clause (i), by striking ``or'' at the end;
(II) in clause (ii), by striking the period and
inserting ``; or''; and
(III) by adding at the end the following:
``(iii) a certification issued by the health care
provider of the servicemember being cared for by the
employee, in the case of an employee unable to return to
work because of a condition specified in section
102(a)(3).''.
(G) Enforcement.--Section 107 of such Act (29 U.S.C. 2617)
is amended, in subsection (a)(1)(A)(i)(II), by inserting ``(or
26 weeks, in a case involving leave under section 102(a)(3))''
after ``12 weeks''.
(H) Instructional employees.--Section 108 of such Act (29
U.S.C. 2618) is amended, in subsections (c)(1), (d)(2), and
(d)(3), by inserting ``or under section 102(a)(3)'' after
``section 102(a)(1)''.
(c) Servicemember Family Leave for Civil Service Employees.--
(1) Definitions.--Section 6381 of title 5, United States Code,
is amended--
(A) in paragraph (5), by striking ``and'' at the end;
(B) in paragraph (6), by striking the period and inserting
``; and''; and
(C) by adding at the end the following:
``(7) the term `active duty' means duty under a call or order
to active duty under a provision of law referred to in section
101(a)(13)(B) of title 10, United States Code;
``(8) the term `covered servicemember' means a member of the
Armed Forces, including a member of the National Guard or a
Reserve, who is undergoing medical treatment, recuperation, or
therapy, is otherwise in medical hold or medical holdover status,
or is otherwise on the temporary disability retired list, for a
serious injury or illness;
``(9) the term `medical hold or medical holdover status'
means--
``(A) the status of a member of the Armed Forces, including
a member of the National Guard or a Reserve, assigned or
attached to a military hospital for medical care; and
``(B) the status of a member of a reserve component of the
Armed Forces who is separated, whether pre-deployment or post-
deployment, from the member's unit while in need of health care
based on a medical condition identified while the member is on
active duty in the Armed Forces;
``(10) the term `next of kin', used with respect to an
individual, means the nearest blood relative of that individual;
and
``(11) the term `serious injury or illness', in the case of a
member of the Armed Forces, means an injury or illness incurred by
the member in line of duty on active duty in the Armed Forces that
may render the member medically unfit to perform the duties of the
member's office, grade, rank, or rating.''.
(2) Entitlement to leave.--Section 6382(a) of such title is
amended by adding at the end the following:
``(3) Subject to section 6383, an employee who is the spouse,
son, daughter, parent, or next of kin of a covered servicemember
shall be entitled to a total of 26 administrative workweeks of
leave during a 12-month period to care for the servicemember. The
leave described in this paragraph shall only be available during a
single 12-month period.
``(4) During the single 12-month period described in paragraph
(3), an employee shall be entitled to a combined total of 26
administrative workweeks of leave under paragraphs (1) and (3).
Nothing in this paragraph shall be construed to limit the
availability of leave under paragraph (1) during any other 12-month
period.''.
(3) Requirements relating to leave.--
(A) Schedule.--Section 6382(b) of such title is amended--
(i) in paragraph (1), in the second sentence--
(I) by striking ``section 6383(b)(5)'' and
inserting ``subsection (b)(5) or (f) (as appropriate)
of section 6383''; and
(II) by inserting ``or under subsection (a)(3)''
after ``subsection (a)(1)''; and
(ii) in paragraph (2), by inserting ``or under
subsection (a)(3)'' after ``subsection (a)(1)''.
(B) Substitution of paid leave.--Section 6382(d) of such
title is amended by adding at the end the following: ``An
employee may elect to substitute for leave under subsection
(a)(3) any of the employee's accrued or accumulated annual or
sick leave under subchapter I for any part of the 26-week
period of leave under such subsection.''.
(C) Notice.--Section 6382(e) of such title is amended by
inserting ``or under subsection (a)(3)'' after ``subsection
(a)(1)''.
(D) Certification.--Section 6383 of such title is amended
by adding at the end the following:
``(f) An employing agency may require that a request for leave
under section 6382(a)(3) be supported by a certification issued at such
time and in such manner as the Office of Personnel Management may by
regulation prescribe.''.
SEC. 622. MILITARY FAMILY JOB PROTECTION.
(a) Short Title.--This section may be cited as the ``Military
Family Job Protection Act''.
(b) Prohibition on Discrimination in Employment Against Certain
Family Members Caring for Recovering Members of the Armed Forces.--A
family member of a recovering servicemember described in subsection (c)
shall not be denied retention in employment, promotion, or any benefit
of employment by an employer on the basis of the family member's
absence from employment as described in that subsection, for a period
of not more than 52 workweeks.
(c) Covered Family Members.--A family member described in this
subsection is a family member of a recovering servicemember who is--
(1) on invitational orders while caring for the recovering
servicemember;
(2) a non-medical attendee caring for the recovering
servicemember; or
(3) receiving per diem payments from the Department of Defense
while caring for the recovering servicemember.
(d) Treatment of Actions.--An employer shall be considered to have
engaged in an action prohibited by subsection (b) with respect to a
person described in that subsection if the absence from employment of
the person as described in that subsection is a motivating factor in
the employer's action, unless the employer can prove that the action
would have been taken in the absence of the absence of employment of
the person.
(e) Definitions.--In this section:
(1) Benefit of employment.--The term ``benefit of employment''
has the meaning given such term in section 4303 of title 38, United
States Code.
(2) Caring for.--The term ``caring for'', used with respect to
a recovering servicemember, means providing personal, medical, or
convalescent care to the recovering servicemember, under
circumstances that substantially interfere with an employee's
ability to work.
(3) Employer.--The term ``employer'' has the meaning given such
term in section 4303 of title 38, United States Code, except that
the term does not include any person who is not considered to be an
employer under title I of the Family and Medical Leave Act of 1993
(29 U.S.C. 2611 et seq.) because the person does not meet the
requirements of section 101(4)(A)(i) of such Act (29 U.S.C.
2611(4)(A)(i)).
(4) Family member.--The term ``family member'', with respect to
a recovering servicemember, has the meaning given that term in
section 411h(b) of title 37, United States Code.
(5) Recovering servicemember.--The term ``recovering
servicemember'' means a member of the Armed Forces, including a
member of the National Guard or a Reserve, who is undergoing
medical treatment, recuperation, or therapy, or is otherwise in
medical hold or medical holdover status, for an injury, illness, or
disease incurred or aggravated while on active duty in the Armed
Forces.
SEC. 623. OUTREACH REGARDING HEALTH INSURANCE OPTIONS AVAILABLE TO
CHILDREN.
(a) Definitions.--In this section--
(1) the terms ``Administration'' and ``Administrator'' means
the Small Business Administration and the Administrator thereof,
respectively;
(2) the term ``certified development company'' means a
development company participating in the program under title V of
the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.);
(3) the term ``Medicaid program'' means the program established
under title XIX of the Social Security Act (42 U.S.C. 1396 et
seq.);
(4) the term ``Service Corps of Retired Executives'' means the
Service Corps of Retired Executives authorized by section 8(b)(1)
of the Small Business Act (15 U.S.C. 637(b)(1));
(5) the term ``small business concern'' has the meaning given
that term in section 3 of the Small Business Act (15 U.S.C. 632);
(6) the term ``small business development center'' means a
small business development center described in section 21 of the
Small Business Act (15 U.S.C. 648);
(7) the term ``State'' has the meaning given that term for
purposes of title XXI of the Social Security Act (42 U.S.C. 1397aa
et seq.);
(8) the term ``State Children's Health Insurance Program''
means the State Children's Health Insurance Program established
under title XXI of the Social Security Act (42 U.S.C. 1397aa et
seq.);
(9) the term ``task force'' means the task force established
under subsection (b)(1); and
(10) the term ``women's business center'' means a women's
business center described in section 29 of the Small Business Act
(15 U.S.C. 656).
(b) Establishment of Task Force.--
(1) Establishment.--There is established a task force to
conduct a nationwide campaign of education and outreach for small
business concerns regarding the availability of coverage for
children through private insurance options, the Medicaid program,
and the State Children's Health Insurance Program.
(2) Membership.--The task force shall consist of the
Administrator, the Secretary of Health and Human Services, the
Secretary of Labor, and the Secretary of the Treasury.
(3) Responsibilities.--The campaign conducted under this
subsection shall include--
(A) efforts to educate the owners of small business
concerns about the value of health coverage for children;
(B) information regarding options available to the owners
and employees of small business concerns to make insurance more
affordable, including Federal and State tax deductions and
credits for health care-related expenses and health insurance
expenses and Federal tax exclusion for health insurance options
available under employer-sponsored cafeteria plans under
section 125 of the Internal Revenue Code of 1986;
(C) efforts to educate the owners of small business
concerns about assistance available through public programs;
and
(D) efforts to educate the owners and employees of small
business concerns regarding the availability of the hotline
operated as part of the Insure Kids Now program of the
Department of Health and Human Services.
(4) Implementation.--In carrying out this subsection, the task
force may--
(A) use any business partner of the Administration,
including--
(i) a small business development center;
(ii) a certified development company;
(iii) a women's business center; and
(iv) the Service Corps of Retired Executives;
(B) enter into--
(i) a memorandum of understanding with a chamber of
commerce; and
(ii) a partnership with any appropriate small business
concern or health advocacy group; and
(C) designate outreach programs at regional offices of the
Department of Health and Human Services to work with district
offices of the Administration.
(5) Website.--The Administrator shall ensure that links to
information on the eligibility and enrollment requirements for the
Medicaid program and State Children's Health Insurance Program of
each State are prominently displayed on the website of the
Administration.
(6) Report.--
(A) In general.--Not later than 2 years after the date of
enactment of this Act, and every 2 years thereafter, the
Administrator shall submit to the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report on the status
of the nationwide campaign conducted under paragraph (1).
(B) Contents.--Each report submitted under subparagraph (A)
shall include a status update on all efforts made to educate
owners and employees of small business concerns on options for
providing health insurance for children through public and
private alternatives.
SEC. 624. SENSE OF SENATE REGARDING ACCESS TO AFFORDABLE AND
MEANINGFUL HEALTH INSURANCE COVERAGE.
(a) Findings.--The Senate finds the following:
(1) There are approximately 45 million Americans currently
without health insurance.
(2) More than half of uninsured workers are employed by
businesses with less than 25 employees or are self-employed.
(3) Health insurance premiums continue to rise at more than
twice the rate of inflation for all consumer goods.
(4) Individuals in the small group and individual health
insurance markets usually pay more for similar coverage than those
in the large group market.
(5) The rapid growth in health insurance costs over the last
few years has forced many employers, particularly small employers,
to increase deductibles and co-pays or to drop coverage completely.
(b) Sense of the Senate.--The Senate--
(1) recognizes the necessity to improve affordability and
access to health insurance for all Americans;
(2) acknowledges the value of building upon the existing
private health insurance market; and
(3) affirms its intent to enact legislation this year that,
with appropriate protection for consumers, improves access to
affordable and meaningful health insurance coverage for employees
of small businesses and individuals by--
(A) facilitating pooling mechanisms, including pooling
across State lines, and
(B) providing assistance to small businesses and
individuals, including financial assistance and tax incentives,
for the purchase of private insurance coverage.
TITLE VII--REVENUE PROVISIONS
SEC. 701. INCREASE IN EXCISE TAX RATE ON TOBACCO PRODUCTS.
(a) Cigars.--Section 5701(a) of the Internal Revenue Code of 1986
is amended--
(1) by striking ``$1.828 cents per thousand ($1.594 cents per
thousand on cigars removed during 2000 or 2001)'' in paragraph (1)
and inserting ``$50.00 per thousand'',
(2) by striking ``20.719 percent (18.063 percent on cigars
removed during 2000 or 2001)'' in paragraph (2) and inserting
``52.988 percent'', and
(3) by striking ``$48.75 per thousand ($42.50 per thousand on
cigars removed during 2000 or 2001)'' in paragraph (2) and
inserting ``$3.00 per cigar''.
(b) Cigarettes.--Section 5701(b) of such Code is amended--
(1) by striking ``$19.50 per thousand ($17 per thousand on
cigarettes removed during 2000 or 2001)'' in paragraph (1) and
inserting ``$50.00 per thousand'', and
(2) by striking ``$40.95 per thousand ($35.70 per thousand on
cigarettes removed during 2000 or 2001)'' in paragraph (2) and
inserting ``$105.00 per thousand''.
(c) Cigarette Papers.--Section 5701(c) of such Code is amended by
striking ``1.22 cents (1.06 cents on cigarette papers removed during
2000 or 2001)'' and inserting ``3.13 cents''.
(d) Cigarette Tubes.--Section 5701(d) of such Code is amended by
striking ``2.44 cents (2.13 cents on cigarette tubes removed during
2000 or 2001)'' and inserting ``6.26 cents''.
(e) Smokeless Tobacco.--Section 5701(e) of such Code is amended--
(1) by striking ``58.5 cents (51 cents on snuff removed during
2000 or 2001)'' in paragraph (1) and inserting ``$1.50'', and
(2) by striking ``19.5 cents (17 cents on chewing tobacco
removed during 2000 or 2001)'' in paragraph (2) and inserting ``50
cents''.
(f) Pipe Tobacco.--Section 5701(f) of such Code is amended by
striking ``$1.0969 cents (95.67 cents on pipe tobacco removed during
2000 or 2001)'' and inserting ``$2.8126 cents''.
(g) Roll-Your-Own Tobacco.--Section 5701(g) of such Code is amended
by striking ``$1.0969 cents (95.67 cents on roll-your-own tobacco
removed during 2000 or 2001)'' and inserting ``$8.8889 cents''.
(h) Floor Stocks Taxes.--
(1) Imposition of tax.--On tobacco products (other than cigars
described in section 5701(a)(2) of the Internal Revenue Code of
1986) and cigarette papers and tubes manufactured in or imported
into the United States which are removed before January 1, 2008,
and held on such date for sale by any person, there is hereby
imposed a tax in an amount equal to the excess of--
(A) the tax which would be imposed under section 5701 of
such Code on the article if the article had been removed on
such date, over
(B) the prior tax (if any) imposed under section 5701 of
such Code on such article.
(2) Credit against tax.--Each person shall be allowed as a
credit against the taxes imposed by paragraph (1) an amount equal
to $500. Such credit shall not exceed the amount of taxes imposed
by paragraph (1) on January 1, 2008, for which such person is
liable.
(3) Liability for tax and method of payment.--
(A) Liability for tax.--A person holding tobacco products,
cigarette papers, or cigarette tubes on January 1, 2008, to
which any tax imposed by paragraph (1) applies shall be liable
for such tax.
(B) Method of payment.--The tax imposed by paragraph (1)
shall be paid in such manner as the Secretary shall prescribe
by regulations.
(C) Time for payment.--The tax imposed by paragraph (1)
shall be paid on or before April 1, 2008.
(4) Articles in foreign trade zones.--Notwithstanding the Act
of June 18, 1934 (commonly known as the Foreign Trade Zone Act, 48
Stat. 998, 19 U.S.C. 81a et seq.) or any other provision of law,
any article which is located in a foreign trade zone on January 1,
2008, shall be subject to the tax imposed by paragraph (1) if--
(A) internal revenue taxes have been determined, or customs
duties liquidated, with respect to such article before such
date pursuant to a request made under the 1st proviso of
section 3(a) of such Act, or
(B) such article is held on such date under the supervision
of an officer of the United States Customs and Border
Protection of the Department of Homeland Security pursuant to
the 2d proviso of such section 3(a).
(5) Definitions.--For purposes of this subsection--
(A) In general.--Any term used in this subsection which is
also used in section 5702 of the Internal Revenue Code of 1986
shall have the same meaning as such term has in such section.
(B) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury or the Secretary's delegate.
(6) Controlled groups.--Rules similar to the rules of section
5061(e)(3) of such Code shall apply for purposes of this
subsection.
(7) Other laws applicable.--All provisions of law, including
penalties, applicable with respect to the taxes imposed by section
5701 of such Code shall, insofar as applicable and not inconsistent
with the provisions of this subsection, apply to the floor stocks
taxes imposed by paragraph (1), to the same extent as if such taxes
were imposed by such section 5701. The Secretary may treat any
person who bore the ultimate burden of the tax imposed by paragraph
(1) as the person to whom a credit or refund under such provisions
may be allowed or made.
(i) Effective Date.--The amendments made by this section shall
apply to articles removed (as defined in section 5702(j) of the
Internal Revenue Code of 1986) after December 31, 2007.
SEC. 702. ADMINISTRATIVE IMPROVEMENTS.
(a) Permit, Report, and Record Requirements for Manufacturers and
Importers of Processed Tobacco.--
(1) Permits.--
(A) Application.--Section 5712 of the Internal Revenue Code
of 1986 is amended by inserting ``or processed tobacco'' after
``tobacco products''.
(B) Issuance.--Section 5713(a) of such Code is amended by
inserting ``or processed tobacco'' after ``tobacco products''.
(2) Inventories and reports.--
(A) Inventories.--Section 5721 of such Code is amended by
inserting ``, processed tobacco,'' after ``tobacco products''.
(B) Reports.--Section 5722 of such Code is amended by
inserting ``, processed tobacco,'' after ``tobacco products''.
(3) Records.--Section 5741 of such Code is amended by inserting
``, processed tobacco,'' after ``tobacco products''.
(4) Manufacturer of processed tobacco.--Section 5702 of such
Code is amended by adding at the end the following new subsection:
``(p) Manufacturer of Processed Tobacco.--
``(1) In general.--The term `manufacturer of processed tobacco'
means any person who processes any tobacco other than tobacco
products.
``(2) Processed tobacco.--The processing of tobacco shall not
include the farming or growing of tobacco or the handling of
tobacco solely for sale, shipment, or delivery to a manufacturer of
tobacco products or processed tobacco.''.
(5) Conforming amendment.--Section 5702(k) of such Code is
amended by inserting ``, or any processed tobacco,'' after
``nontaxpaid tobacco products or cigarette papers or tubes''.
(6) Effective date.--The amendments made by this subsection
shall take effect on January 1, 2008.
(b) Basis for Denial, Suspension, or Revocation of Permits.--
(1) Denial.--Paragraph (3) of section 5712 of such Code is
amended to read as follows:
``(3) such person (including, in the case of a corporation, any
officer, director, or principal stockholder and, in the case of a
partnership, a partner)--
``(A) is, by reason of his business experience, financial
standing, or trade connections or by reason of previous or
current legal proceedings involving a felony violation of any
other provision of Federal criminal law relating to tobacco
products, cigarette paper, or cigarette tubes, not likely to
maintain operations in compliance with this chapter,
``(B) has been convicted of a felony violation of any
provision of Federal or State criminal law relating to tobacco
products, cigarette paper, or cigarette tubes, or
``(C) has failed to disclose any material information
required or made any material false statement in the
application therefor.''.
(2) Suspension or revocation.--Subsection (b) of section 5713
of such Code is amended to read as follows:
``(b) Suspension or Revocation.--
``(1) Show cause hearing.--If the Secretary has reason to
believe that any person holding a permit--
``(A) has not in good faith complied with this chapter, or
with any other provision of this title involving intent to
defraud,
``(B) has violated the conditions of such permit,
``(C) has failed to disclose any material information
required or made any material false statement in the
application for such permit,
``(D) has failed to maintain his premises in such manner as
to protect the revenue,
``(E) is, by reason of previous or current legal
proceedings involving a felony violation of any other provision
of Federal criminal law relating to tobacco products, cigarette
paper, or cigarette tubes, not likely to maintain operations in
compliance with this chapter, or
``(F) has been convicted of a felony violation of any
provision of Federal or State criminal law relating to tobacco
products, cigarette paper, or cigarette tubes,
the Secretary shall issue an order, stating the facts charged,
citing such person to show cause why his permit should not be
suspended or revoked.
``(2) Action following hearing.--If, after hearing, the
Secretary finds that such person has not shown cause why his permit
should not be suspended or revoked, such permit shall be suspended
for such period as the Secretary deems proper or shall be
revoked.''.
(3) Effective date.--The amendments made by this subsection
shall take effect on the date of the enactment of this Act.
(c) Application of Internal Revenue Code Statute of Limitations for
Alcohol and Tobacco Excise Taxes.--
(1) In general.--Section 514(a) of the Tariff Act of 1930 (19
U.S.C. 1514(a)) is amended by striking ``and section 520 (relating
to refunds)'' and inserting ``section 520 (relating to refunds),
and section 6501 of the Internal Revenue Code of 1986 (but only
with respect to taxes imposed under chapters 51 and 52 of such
Code)''.
(2) Effective date.--The amendment made by this subsection
shall apply to articles imported after the date of the enactment of
this Act.
(d) Expansion of Definition of Roll-Your-Own Tobacco.--
(1) In general.--Section 5702(o) of the Internal Revenue Code
of 1986 is amended by inserting ``or cigars, or for use as wrappers
thereof'' before the period at the end.
(2) Effective date.--The amendment made by this subsection
shall apply to articles removed (as defined in section 5702(j) of
the Internal Revenue Code of 1986) after December 31, 2007.
(e) Time of Tax for Unlawfully Manufactured Tobacco Products.--
(1) In general.--Section 5703(b)(2) of such Code is amended by
adding at the end the following new subparagraph:
``(F) Special rule for unlawfully manufactured tobacco
products.--In the case of any tobacco products, cigarette
paper, or cigarette tubes produced in the United States at any
place other than the premises of a manufacturer of tobacco
products, cigarette paper, or cigarette tubes that has filed
the bond and obtained the permit required under this chapter,
tax shall be due and payable immediately upon manufacture.''.
(2) Effective date.--The amendment made by this subsection
shall take effect on the date of the enactment of this Act.
SEC. 703. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
Subparagraph (B) of section 401(1) of the Tax Increase Prevention
and Reconciliation Act of 2005 is amended by striking ``114.75
percent'' and inserting ``113.75 percent''.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.