A bill to amend title XXI of the Social Security Act to eliminate the remainder of funding shortfalls for the State Children's Health Insurance Program (SCHIP) for fiscal year 2007, and for other purposes.

Summary: Amends title XXI (State Children's Health Insurance) (SCHIP) of the Social Security Act (SSA) to provide additional amounts to eliminate the remainder of SCHIP funding shortfalls for FY2007.

Amends SSA title XIX (Medicaid) to require the use of tamper-resistant prescription pads under the Medicaid program.

Repeals the limited continuous enrollment provision for certain beneficiaries under the Medicare Advantage Program.

Denies payments for hospital or ambulatory surgical center services if in their provision there occurred a type of event which should never occur (events that directly harm patients).

SECTION 1. ELIMINATION OF REMAINDER OF SCHIP FUNDING SHORTFALLS FOR 
              FISCAL YEAR 2007.

    (a) In General.--Section 2104(h) of the Social Security Act (42 
U.S.C. 1397dd(h)), as added by section 201(a) of the National 
Institutes of Health Reform Act of 2006 (Public Law 109-482), is 
amended--
            (1) in the heading for paragraph (2), by striking 
        ``remainder of reduction'' and inserting ``part''; and
            (2) by striking paragraph (4) and inserting the following:
            ``(4) Additional amounts to eliminate remainder of fiscal 
        year 2007 funding shortfalls.--
                    ``(A) In general.--The Secretary shall allot to 
                each remaining shortfall State described in 
                subparagraph (B) such amount as the Secretary 
                determines will eliminate the estimated shortfall 
                described in such subparagraph for the State for fiscal 
                year 2007.
                    ``(B) Remaining shortfall state described.--For 
                purposes of subparagraph (A), a remaining shortfall 
                State 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 as of the date of the 
                enactment of this paragraph, that the projected federal 
                expenditures under such plan for the State for fiscal 
                year 2007 will exceed the sum of--
                            ``(i) the amount of the State's allotments 
                        for each of fiscal years 2005 and 2006 that 
                        will not be expended by the end of fiscal year 
                        2006;
                            ``(ii) the amount of the State's allotment 
                        for fiscal year 2007; and
                            ``(iii) the amounts, if any, that are to be 
                        redistributed to the State during fiscal year 
                        2007 in accordance with paragraphs (1) and (2).
                    ``(C) Appropriation; allotment authority.--For the 
                purpose of providing additional allotments to remaining 
                shortfall States under this paragraph there is 
                appropriated, out of any funds in the Treasury not 
                otherwise appropriated, such sums as are necessary for 
                fiscal year 2007. Amounts appropriated pursuant to the 
                preceding sentence are designated as an emergency 
                requirement pursuant to section 402 of H. Con. Res. 95 
                (109th Congress).''.
    (b) Conforming Amendments.--Section 2104(h) of such Act (42 U.S.C. 
1397dd(h)) (as so added), is amended--
            (1) in paragraph (1)(B), by striking ``subject to paragraph 
        (4)(B) and'';
            (2) in paragraph (2)(B), by striking ``subject to paragraph 
        (4)(B) and'';
            (3) in paragraph (5)(A), by striking ``and (3)'' and 
        inserting ``(3), and (4)''; and
            (4) in paragraph (6)--
                    (A) in the first sentence--
                            (i) by inserting ``or allotted'' after 
                        ``redistributed''; and
                            (ii) by inserting ``or allotments'' after 
                        ``redistributions''; and
                    (B) by striking ``and (3)'' and inserting ``(3), 
                and (4)''.

SEC. 2. FUNDING PROVISIONS.

    (a) Requirement for Use of Tamper-Resistant Prescription Pads Under 
the Medicaid Program.--
            (1) In general.--Section 1903(i) of the Social Security Act 
        (42 U.S.C. 1396b(i)) is amended--
                    (A) by striking ``or'' at the end of paragraph 
                (21);
                    (B) by striking the period at the end of paragraph 
                (22) and inserting ``; or''; and
                    (C) by inserting after paragraph (22) the following 
                new paragraph:
            ``(23) with respect to amounts expended for medical 
        assistance for covered outpatient drugs (as defined in section 
        1927(k)(2)) for which the prescription was executed in written 
        (and non-electronic) form unless the prescription was executed 
        on a tamper-resistant pad.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to prescriptions executed after September 30, 2007.
    (b) Repeal of the Limited Continuous Enrollment Provision for 
Certain Beneficiaries Under the Medicare Advantage Program.--
            (1) In general.--Subparagraph (E) of section 1851(e)(2) of 
        the Social Security Act (42 U.S.C. 1395w-21(e)(2)), as added by 
        section 206(a) of division B of the Tax Relief and Health Care 
        Act of 2006 (Public Law 109-432), is repealed.
            (2) Conforming amendment.--Section 1860D-1(b)(1)(B)(iii) of 
        the Social Security Act (42 U.S.C. 1395w-101(b)(1)(B)(iii)), as 
        amended by 206(b) of division B of the Tax Relief and Health 
        Care Act of 2006 (Public Law 109-432), is amended by striking 
        ``subparagraphs (B), (C), and (E)'' and inserting 
        ``subparagraphs (B) and (C)''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on the day after the date of enactment of 
        this Act.
    (c) Denial of Payments for Hospital Services or Ambulatory Surgical 
Center Services That Directly Harm Patients.--
            (1) In general.--Section 1862(a) of the Social Security Act 
        (42 U.S.C. 1395y(a)) is amended--
                    (A) by striking ``or'' at the end of paragraph 
                (21);
                    (B) by striking the period at the end of paragraph 
                (22) and inserting ``; or''; and
                    (C) by inserting after paragraph (22) the following 
                new paragraph:
            ``(23) which are inpatient or outpatient hospital services 
        or facility services furnished in an ambulatory surgical 
        facility if in the provision of such services there occurred a 
        type of event (such as a surgical event, product or device 
        event, patient protection event, care management event, 
        environmental event, or criminal event) which the Secretary has 
        determined, based on a consensus process involving clinicians, 
        quality experts, health care providers, and patients, which 
        should never occur.''.
            (2) Potential application of nqf ``never events'' lists.--
        Nothing in section 1862(a)(23) of the Social Security Act, as 
        inserted by paragraph (1), shall be construed as preventing the 
        Secretary of Health and Human Services from applying all (or a 
        subset of) the events that are listed and endorsed as ``serious 
        reportable events'' (also known as ``never events)'' by the 
        National Quality Forum as of November 16, 2006, (or such 
        subsequent, revised list of such events issued by such Forum as 
        the Secretary may specify) as events described in such section.
            (3) Conforming amendments.--
                    (A) Section 1834(j)(4)(C) of the Social Security 
                Act (42 U.S.C. 1395m(j)(4)(C)) is amended by striking 
                ``or 1862(a)(23)'' after ``1862(a)(1)''.
                    (B) Section 1842(l) of such Act (42 U.S.C. 
                1395u(l)) is amended--
                            (i) in paragraph (1)(A)(iii)--
                                    (I) by striking ``or (II)'' and 
                                inserting ``, (II)''; and
                                    (II) by inserting ``, or (III) 
                                payment under this title is denied 
                                under section 1862(a)(23)'' after 
                                ``section 1154(a)(1)(B)''; and
                            (ii) in paragraph (2), by inserting ``or 
                        1862(a)(23)'' after ``1862(a)(1)''.
                    (C) Section 1866(a)(1)(K) of such Act (42 U.S.C. 
                1395cc(a)(1)(K)) is amended by inserting ``or is denied 
                under section 1862(a)(23)'' after ``1154(a)(1)(B)''.
            (4) Report on disclosure.--Not later than January 1, 2009, 
        the Secretary of Health and Human Services shall submit to 
        Congress a report on a process for public disclosure on never 
        events described in section 1862(a)(24) of the Social Security 
        Act, as inserted by paragraph (1)(C), which will ensure 
        protection of patient privacy and will permit the use of the 
        disclosed information for a root cause analysis to inform the 
        public and the medical community about safety issues involved.
            (5) Effective date.--The amendments made by this subsection 
        shall take effect on the date of the enactment of this Act and 
        shall apply to payments for--
                    (A) inpatient hospital services for discharges 
                occurring on or after October 1, 2007; and
                    (B) outpatient hospital services and facility 
                services in an ambulatory surgical center furnished on 
                or after January 1, 2008.