A bill to extend by one year the moratorium on implementation of a rule relating to the Federal-State financial partnership under Medicaid and the State Children's Health Insurance Program and on finalization of a rule regarding graduate medical education under Medicaid and to include a moratorium on the finalization of the outpatient Medicaid rule making similar changes.

Summary: Amends the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act of 1997 to extend by one year the moratorium on: (1) implementation of a specified rule relating to the federal-state financial partnership under titles XIX (Medicaid) and XXI (State Children's Health Insurance Program (SCHIP)) of the Social Security Act; and (2) the finalization of a certain proposed rule regarding the authority of states to make payments related to graduate medical education (GME payments).

Imposes a one-year moratorium on finalization or implementation of a certain proposed rule regarding the scope of permissible Medicaid payments that redefines outpatient hospitals and specifies methodologies for calculation of the outpatient services upper payment limit.

SECTION 1. EXTENSION OF MORATORIUM ON IMPLEMENTATION OF RULE RELATING 
              TO THE FEDERAL-STATE FINANCIAL PARTNERSHIP UNDER MEDICAID 
              AND SCHIP AND ON FINALIZATION OF A RULE RELATING TO THE 
              TREATMENT OF GRADUATE MEDICAL EDUCATION UNDER MEDICAID; 
              MORATORIUM ON THE FINALIZATION OF THE OUTPATIENT MEDICAID 
              RULE MAKING SIMILAR CHANGE.

    (a) Findings.--Congress makes the following findings:
            (1) A proposed rule was published on January 18, 2007, on 
        pages 2236 through 2248 of volume 72, Federal Register, and a 
        rule purporting to finalize that rule was published on May 29, 
        2007, on pages 29748 through 29836 of volume 72, Federal 
        Register (relating to parts 433, 447, and 457 of title 42, Code 
        of Federal Regulations). This rule would significantly change 
        the Federal-State financial partnership under the Medicaid and 
        the State Children's Health Insurance Programs by--
                    (A) imposing a cost limit on payments made under 
                such programs to governmentally operated providers;
                    (B) limiting the permissible sources of the non-
                Federal shares required under such programs and the 
                types of entities permitted to contribute to such 
                shares; and
                    (C) imposing new requirements on participating 
                providers and States under such programs.
            (2) A proposed rule was published on May 23, 2007, on pages 
        28930 through 28936 of volume 72, Federal Register (relating to 
        parts 438 and 447 of title 42, Code of Federal Regulations) 
        that would significantly change the scope of permissible 
        payments under Medicaid by removing the ability for States to 
        make payments related to graduate medical education.
            (3) Permitting these rules to take effect would drastically 
        alter the Federal-State financial partnership in Medicaid and 
        the State Children's Health Insurance Programs, undermine the 
        discretion traditionally accorded States, and have a negative 
        impact on States, providers, and beneficiaries in the following 
        manner:
                    (A) Implementation of the rule regarding the 
                Federal-State financial partnership would force 
                billions of dollars of payment reductions, thus 
                hampering the ability of impacted providers to provide 
                essential services including allowing those providers 
                to be ready and available for emergency situations and 
                to provide care to the increasing numbers of uninsured.
                    (B) Implementation of the rule regarding graduate 
                medical education would force billions of dollars in 
                payment reductions to teaching hospitals, thus 
                hampering the ability of those providers to provide 
                essential services including the education of the next 
                generation of medical professionals despite a shortage 
                of medical professionals.
            (4) By including a one-year moratorium in the U.S. Troop 
        Readiness, Veterans' Care, Katrina Recovery, and Iraq 
        Accountability Appropriations Act of 2007, Congress intended to 
        forestall administrative action to allow itself time to assess 
        the proposals and consider alternatives that would not 
        negatively impact States, providers, and beneficiaries.
            (5) After Congressional approval of the moratorium 
        contained in the U.S. Troop Readiness, Veterans' Care, Katrina 
        Recovery, and Iraq Accountability Appropriations Act of 2007, 
        the Centers for Medicare & Medicaid Services on May 25, 2007, 
        submitted for publication its final rule, which was not 
        significantly different from the January proposed regulation.
            (6) The publication of a final rule in May regarding the 
        Federal-State financial partnership was not anticipated by 
        Congress and accelerates the negative impact on States, 
        providers, and beneficiaries, thus undermining the intent of 
        the moratorium passed by Congress.
            (7) The publication of a proposed rule in May regarding 
        graduate medical education was not anticipated by Congress and 
        undermines the intent of the moratorium passed by Congress.
            (8) A proposed rule was published on September 28, 2007, on 
        pages 55158 through 55166 of volume 72, Federal Register 
        (relating to parts 440 and 447 of title 42, Code of Federal 
        Regulations) that would significantly change the scope of 
        permissible payments under Medicaid by redefining outpatient 
        hospital services and dictating methodologies for calculation 
        of the outpatient services upper payment limit.
            (9) Congress did not anticipate continued changes after the 
        moratorium to reduce State flexibility to make adequate 
        Medicaid payments.
            (10) Expansion and extension of the moratorium is necessary 
        to effectuate Congressional intent.
    (b) Extension of Prohibition.--Section 7002(a)(1) of the U.S. Troop 
Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability 
Appropriations Act of 2007 (Public Law 110-28) is amended--
            (1) by striking ``1 year'' and inserting ``2 years'';
            (2) by inserting ``or (D)'' after ``described in 
        subparagraph (A)'' in subparagraph (B);
            (3) by striking ``or'' at the end of subparagraph (B);
            (4) by striking the period at the end of subparagraph (C) 
        and inserting ``; or''; and
            (5) by inserting at the end the following:
                    ``(D) finalize or otherwise implement provisions 
                contained in the proposed rule published on September 
                28, 2007, on pages 55158 through 55166 of volume 72, 
                Federal Register (relating to parts 440 and 447 of 
                title 42, Code of Federal Regulations).''.