SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicaid Flexibility Act of 1995''.

SEC. 2. BLOCK GRANTS TO THE STATES FOR HEALTH CARE SERVICES TO NEEDY 
              INDIVIDUALS.

    Title XIX of the Social Security Act (42 U.S.C. 1396-1396V) is 
amended to read as follows:

 ``TITLE XIX--BLOCK GRANTS TO STATES FOR HEALTH CARE SERVICES TO NEEDY 
                              INDIVIDUALS

                       ``purpose; implementation

    ``Sec. 1901. (a) Purpose.--The purpose of this title is to 
strengthen families by helping them move from dependence on government 
benefits to economic independence by consolidating Federal assistance 
to the States for health care services and assistance to needy 
individuals into a single grant for such purpose, thereby giving States 
maximum flexibility to--
            ``(1) require beneficiaries who are parents to ensure that 
        their school-age children attend school;
            ``(2) require minors who are beneficiaries to attend 
        school;
            ``(3) require parent beneficiaries to ensure that their 
        children receive the full complement of childhood 
        immunizations;
            ``(4) limit the amount of time able-bodied beneficiaries 
        may receive assistance;
            ``(5) require beneficiaries not to use illegal drugs or 
        abuse other drugs;
            ``(6) require each mother to identify the father of any 
        child for whom she seeks assistance;
            ``(7) deny assistance to illegal aliens;
            ``(8) require individuals who sponsor the residency of 
        legal aliens to support those they sponsor; and
            ``(9) involve religious and charitable organizations, 
        voluntary associations, civic groups, community organizations, 
        nonprofit entities, benevolent and fraternal orders, 
        philanthropic entities, and other groups in the private sector, 
        as appropriate, in the provision of health care services and 
        assistance to needy individuals with the funding States receive 
        under this title.
    ``(b) Implementation.--This purpose shall be implemented in 
accordance with conditions in each State and as determined by State 
law.

                          ``payments to states

    ``Sec. 1902. (a) Amount.--
            ``(1) In general.--Each State shall, subject to the 
        requirements of this title, be entitled to receive quarterly 
        payments for fiscal years 1996, 1997, 1998, 1999, and 2000 in 
        an amount equal to 25 percent of the annual amount determined 
        under paragraph (2) for such fiscal year for carrying out the 
        purpose described in section 1901.
            ``(2) Annual amount.--The annual amount determined under 
        this paragraph is equal to--
                    ``(A) in fiscal year 1996, 105 percent of the 
                amount received by a State in fiscal year 1995 under 
                this title (as in effect in fiscal year 1995); and
                    ``(B) in each fiscal year thereafter, 105 percent 
                of the amount received by a State in the preceding 
                fiscal year under this title (as in effect in such 
                preceding fiscal year).
    ``(b) Funding Requirements.--The Secretary of the Treasury shall 
make quarterly payments described in subsection (a)(1) directly to each 
State in accordance with section 6503 of title 31, United States Code.
    ``(c) Expenditure of Funds; Rainy Day Fund.--Amounts received by a 
State under this title for any fiscal year shall be expended by the 
State in such fiscal year or in the succeeding fiscal year; except for 
such amounts as the State deems necessary to set aside in a separate 
account to provide, without fiscal limitation, for unexpected levels of 
assistance during periods of high unemployment or other events which 
cause unexpected increases in the need for health care services or 
assistance for needy individuals. Any amounts remaining in such 
segregated accounts after fiscal year
 2000 shall be expended by a State for the purpose described in section 
1901 of this title as in effect in fiscal year 2000.
    ``(d) Authority To Use Portion of Grant for Other Purposes.--
            ``(1) In general.--A State may use not more than 30 percent 
        of the annual amount paid to the State under this title for a 
        fiscal year to carry out a State program pursuant to any or all 
        of the following provisions of law:
                    ``(A) Part A of title IV of this Act.
                    ``(B) Title XVI of this Act.
                    ``(C) The Food Stamp Act.
            ``(2) Applicable rules.--Any amount paid to the State under 
        this title that is used to carry out a State program pursuant 
        to a provision of law specified in paragraph (1) shall not be 
        subject to the requirements of this title, but shall be subject 
        to the requirements that apply to Federal funds provided 
        directly under the provision of law to carry out the program.

               ``administrative and fiscal accountability

    ``Sec. 1903. (a) Audits; Reimbursement.--
            ``(1) Audits.--
                    ``(A) In general.--A State shall, not less than 
                annually, audit the State expenditures from amounts 
                received under this title. Such audit shall--
                            ``(i) determine the extent to which such 
                        expenditures were or were not expended in 
                        accordance with this title; and
                            ``(ii) be conducted by an approved entity 
                        (as defined in subparagraph (B)) in accordance 
                        with generally accepted auditing principles.
                    ``(B) Approved entity.--For purposes of 
                subparagraph (A), the term `approved entity' means an 
                entity that is--
                            ``(i) approved by the Secretary of the 
                        Treasury;
                            ``(ii) approved by the chief executive 
                        officer of the State; and
                            ``(iii) independent of any agency 
                        administering activities or services funded 
                        under this title.
            ``(2) Reimbursement.--
                    ``(A) In general.--Not later than 30 days following 
                the completion of an audit under this subsection, a 
                State shall submit a copy of the audit to the State 
                legislature and to the Secretary of the Treasury.
                    ``(B) Repayment.--Each State shall pay to the 
                United States amounts ultimately found by the approved 
                entity under paragraph (1)(A) not to have been expended 
                in accordance with this title plus 10 percent of such 
                amount as a penalty, or the Secretary of the Treasury 
                may offset such amounts plus the 10 percent penalty 
                against any other amount in any other year that the 
                State may be entitled to receive under this title.
    ``(b) Additional Accounting Requirements.--The provisions of 
chapter 75 of title 31, United States Code, shall apply to the audit 
requirements of this section.
    ``(c) Reporting Requirements; Form, Contents.--
            ``(1) Annual reports.--A State shall prepare comprehensive 
        annual reports on the activities carried out with amounts 
        received by the State under this title.
            ``(2) Content.--Reports prepared under this section--
                    ``(A) shall be for the most recently completed 
                fiscal year;
                    ``(B) shall be in accordance with generally 
                accepted accounting principles, including the 
                provisions of chapter 75 of title 31, United States 
                Code;
                    ``(C) shall include the results of the most recent 
                audit conducted in accordance with the requirements of 
                paragraph (a) of this section; and
                    ``(D) shall be in such form and contain such other 
                information as the State deems necessary--
                            ``(i) to provided an accurate description 
                        of such activities; and
                            ``(ii) to secure a complete record of the 
                        purposes for which amounts were expended in 
                        accordance with this title.
            ``(3) Copies.--A State shall make copies of the reports 
        required under this section available for public inspection 
        within the State. Copies also shall be provided upon request to 
        any interested public agency, and each such agency may provide 
        its views on such reports to the Congress.
    ``(d) Administrative Supervision.--
            ``(1) Role of the secretary of the treasury.--
                    ``(A) In general.--The Secretary of the Treasury 
                shall supervise the amounts received under this title 
                in accordance with subparagraph (B).
                    ``(B) Limited supervision--The supervision by the 
                Secretary of the Treasury shall be limited to--
                            ``(i) making quarterly payments to the 
                        States in accordance with section 1902(b);
                            ``(ii) approving the entities referred to 
                        in subsection (a)(1)(B); and
                            ``(iii) withholding payment to a State 
                        based on the findings of such an entity in 
                        accordance with subsection (a)(2)(B).
            ``(2) Other federal supervision.--No administrative officer 
        or agency of the United States, other than the Secretary of the 
        Treasury and, as provided for in section 1904, the Attorney 
        General, shall supervise the amounts received by the States 
        under this title or the use of such amounts by the States.
    ``(e) Limited Federal Oversight.--With the exception of the 
Department of the Treasury as provided for in this section and section 
1904 of this title, no Federal department or agency may promulgate 
regulations or issue rules regarding the purpose of this title.

                     ``nondiscrimination provisions

    ``Sec. 1904. (a) No Discrimination Against Individuals.--No 
individual shall be excluded from participation in, denied the benefits 
of, or subjected to discrimination under any program or activity funded 
in whole or in part with amounts received under this title on the basis 
of such individual's--
            ``(1) disability under section 504 of the Rehabilitation 
        Act of 1973 (29 U.S.C. 794);
            ``(2) sex under title IX of the Education Amendments of 
        1972 (20 U.S.C. 1681 et seq.); or
            ``(3) race, color, or national origin under title VI of the 
        Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.).
    ``(b) Compliance.--If the Secretary of the Treasury determines that 
a State, or an entity that has received funds from amounts received by 
the State under this title, has failed to comply with a provision of 
law referred to in subsection (a), except as provided for in section 
1905 of this title, the Secretary of the Treasury shall notify the 
chief executive officer of the State and shall request the officer to 
secure compliance with such provision of law. If, not later than 60 
days after receiving such notification, the chief executive officer 
fails or refuses to secure compliance, the Secretary of the Treasury 
may--
            ``(1) refer the matter to the Attorney General with a 
        recommendation that an appropriate civil action be instituted;
            ``(2) exercise the powers and functions provided under 
        title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et 
        seq.), title IX of the Education Amendments of 1972 (20 U.S.C. 
        1681 et seq.); or section 505 of the Rehabilitation Act of 1973 
        (29 U.S.C. 794a), (as applicable); or
            ``(3) take such other action as may be provided by law.
    ``(c) Authority of Attorney General; Civil Actions.--When a matter 
is referred to the Attorney General pursuant to subsection (b)(1), or 
if the Attorney General has reason to believe that an entity is engaged 
in a pattern or practice in violation of a provision of law referred to 
in subsection (a), the Attorney General may bring a civil action in an 
appropriate district court of the United States for such relief as may 
be appropriate, including injunctive relief.

    ``nondiscrimination and institutional safeguards for religious 
                               providers

    ``Sec. 1905. (a) Purpose.--The purpose of this section is to allow 
the participation of religious and charitable organizations as 
providers of health care services and assistance under this title 
without impairing or diminishing the religious character or freedom of 
such organizations.
    ``(b) Nondiscrimination.--Religious organizations are eligible as 
providers of health care services and assistance as provided for under 
this title. Neither the Federal Government nor a State receiving funds 
under this title shall discriminate against an organization which is or 
applies to be a provider of health care services and assistance on the 
basis that the organization has a religious mission or purpose.
    ``(c) Religious Character and Freedom.--
            ``(1) In general.--Nothwithstanding any other provision of 
        law, any religious organization participating as a provider of 
        health care services and assistance funded under this title 
        shall retain its independence from Federal, State, and local 
        governments, including such organization's control over the 
        definition, development, practice, and expression of its 
        religious beliefs. Such
         an organization may select, employ, promote, discipline, and 
dismiss its clerics and other ecclesiastics, directors, officers, 
employees, and volunteers on the basis of religion, a religious belief, 
or a religious practice. However, a religious organization shall not 
deny a needy individual health care services and assistance funded 
under this title on the basis of religion, a religious belief, or 
refusal to participate in a religious practice.
            ``(2) Additional safeguards.--Neither the Federal 
        Government nor a State shall require a religious provider of 
        health care services and assistance to--
                    ``(A) alter its form of internal governance, or 
                form a separate, nonprofit corporation to receive and 
                administer the assistance funded under this title; or
                    ``(B) alter real estate of facilities used to 
                provide such assistance, including but not limited to 
                the removal of religious art, icons, scripture, or 
                other symbols;
        in order to be eligible to be a provider of health care 
        services and assistance funded under this title.
            ``(3) Fiscal accountability.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), any religious organization providing 
                assistance funded under this title shall be subject to 
                the same regulations as other providers to account in 
                accord with generally accepted auditing principles for 
                the use of such funds provided under this title.
                    ``(B) Limited audit.--Religious organizations may 
                segregate Federal funds provided under this title into 
                separate accounts, and then only the financial 
                assistance provided with those funds shall be subject 
                to audit.
    ``(d) Compliance.--A religious organization which has its rights 
under this section violated may enforce its claim by asserting a civil 
action for such relief as may be appropriate, including injunctive 
relief or damages, in an appropriate district court of the United 
States against the entity or agency that commits such violation.
    ``(e) Rights of Beneficiaries of Assistance.--
            ``(1) In general.--If a beneficiary has a bona fide 
        objection to the religious character of the organization or 
        institution from which the beneficiary is receiving health care 
        services and assistance funded under this title, each State 
        shall provide such beneficiary a certificate, redeemable with 
        any other provider of assistance funded under this title, for 
        services the value of which is no less than the value of the 
        funding received by the religious provider from a State to 
        provide assistance funded under this title for such individual.
            ``(2) Prohibition on providing cash in exchange for 
        certificates.--No provider of assistance funded under this 
        title shall provide a beneficiary a cash amount in exchange for 
        a certificate provided for under paragraph (1).

                         ``emergency assistance

    ``Sec. 1906. (a) In General.--Health care services and assistance 
funded under this title must be provided to a citizen, legal resident, 
or an alien who is not lawfully admitted for permanent residence or 
otherwise permanently residing in the United States under color of law, 
if--
            ``(1) such services and assistance are necessary for the 
        treatment of an emergency medical condition;
            ``(2) such person otherwise meets the eligibility 
        requirements for health care services and assistance under the 
        State program funded under this title; and
            ``(3) such services and assistance are not related to an 
        organ transplant procedure.
    ``(b) Emergency Medical Condition.--For purposes of this section, 
the term `emergency medical condition' means a medical condition 
(including emergency labor and delivery) manifesting itself by acute 
symptoms of sufficient severity (including severe pain) such that the 
absence of immediate medical attention could reasonably be expected to 
result in--
            ``(1) placing the patient's health in serious jeopardy;
            ``(2) serious impairment to bodily functions; or
            ``(3) serious dysfunction of any bodily organ or part.''.

SEC 3. CONFORMING AMENDMENTS TO THE BUDGET ACT.

    Section 255(h) of the Balanced Budget and Emergency Deficit Control 
Act of 1985 (2 U.S.C. 905(h)) is amended by striking ``Grants to States 
for Medicaid (75-0512-0-1-551);'' and inserting ``Block grants to 
States for health care services to needy individuals;''.

SEC. 4. EFFECTIVE DATE.

    The amendments made by this Act shall take effect on October 1, 
1995.
Medicaid Flexibility Act of 1995 - Amends title XIX (Medicaid) of the Social Security Act to replace the Medicaid program with a program of block grants to States for health care services to needy individuals.
Medicaid Flexibility Act of 1995