To amend titles XIX and XXI of the Social Security Act to clarify and ensure that the authority granted to the Secretary of Health and Human Services under section 1115 of that Act is used solely to promote the objectives of the Medicaid and State children's health insurance programs, and for other purposes.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicaid and CHIP 
Safety Net Preservation Act of 2004''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings; purposes; rule of construction.
Sec. 3. Clarification that Section 1115 authority does not permit a cap 
                            on Federal financial participation.
Sec. 4. Clarification that section 1115 authority does not permit 
                            elimination of, or modification limiting, 
                            individual entitlement.
Sec. 5. Clarification that section 1115 authority does not permit 
                            elimination or modification of requirements 
                            relating to EPSDT services.
Sec. 6. Clarification that section 1115 authority does not permit 
                            elimination or modification of requirements 
                            relating to certain safety-net services.
Sec. 7. Improvement of the process for the development and approval of 
                            medicaid and CHIP demonstration projects.
Sec. 8. Effective date.

SEC. 2. FINDINGS; PURPOSES; RULE OF CONSTRUCTION.

    (a) Findings.--Congress makes the following findings:
            (1) Certain requirements of titles XIX and XXI of the 
        Social Security Act (42 U.S.C. 1396 et seq., 1397aa et seq.) 
        are central to the overall objectives of the medicaid and State 
        children's health insurance programs and are not properly 
        subject to waiver, modification, or disregard under the 
        authority of section 1115 of the Social Security Act (42 U.S.C. 
        1315).
            (2) Some of the requirements of titles XIX and XXI of the 
        Social Security Act that promote the overall objectives of the 
        medicaid and State children's health insurance programs have 
        been waived, modified, or otherwise disregarded by the 
        Secretary of Health and Human Services under such section 1115, 
        despite the explicit requirement in that section that certain 
        requirements of the medicaid and State children's health 
        insurance programs only may be waived, modified, or disregarded 
        for the purpose of approving an experimental, pilot, or 
        demonstration project if the waiver, modification, or disregard 
        ``is likely to assist in promoting the objectives'' of those 
        programs.
    (b) Purposes.--The purposes of this Act are the following:
            (1) To clarify that certain requirements of titles XIX and 
        XXI of the Social Security Act (42 U.S.C. 1396 et seq., 1397aa 
        et seq.), which are among those critical to achieving the 
        objectives of the medicaid and State children's health 
        insurance programs, may not be waived, modified, or otherwise 
        disregarded by the Secretary of Health and Human Services under 
        the authority of section 1115 of the Social Security Act (42 
        U.S.C. 1315).
            (2) To ensure that the authority granted to the Secretary 
        of Health and Human Services under section 1115 of the Social 
        Security Act (42 U.S.C. 1315) with respect to the medicaid and 
        State children's health insurance programs for the purpose of 
        approving experimental, pilot, or demonstration projects is not 
        used inappropriately.
    (c) Rule of Construction.--Nothing in this Act or the amendments 
made by this Act shall be construed to--
            (1) authorize the waiver, modification, or other disregard 
        of any provision of title XIX or XXI of the Social Security Act 
        (42 U.S.C. 1396 et seq., 1397aa et seq.); or
            (2) imply congressional approval of any demonstration 
        project affecting the medicaid program under title XIX of the 
        Social Security Act or the State children's health insurance 
        program under title XXI of such Act that has been approved by 
        the Secretary of Health and Human Services as of the date of 
        enactment of this Act.

SEC. 3. CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT PERMIT A CAP 
              ON FEDERAL FINANCIAL PARTICIPATION.

    Title XIX of the Social Security Act is amended by inserting after 
section 1925 the following:

            ``clarifications of authority under section 1115

    ``Sec. 1926. (a) Clarification That Section 1115 Authority Does not 
Permit a Cap on Federal Financial Participation.--The Secretary may not 
impose or approve under the authority of section 1115 a cap, 
limitation, or other restriction on payment under section 1903(a) to a 
State for amounts expended as medical assistance in accordance with the 
requirements of this title.''.

SEC. 4. CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT PERMIT 
              ELIMINATION OF, OR MODIFICATION LIMITING, INDIVIDUAL 
              ENTITLEMENT.

    Section 1926 of the Social Security Act, as added by section 3, is 
amended by adding at the end the following:
    ``(b) Clarification That Section 1115 Authority Does not Permit 
Elimination of, or Modification Limiting, Individual Entitlement.--The 
Secretary may not approve or impose under the authority of section 1115 
an elimination of, or modification limiting, the entitlement 
(established under section 1902(a), 1905(a), or otherwise) of an 
individual to receive any medical assistance for which Federal 
financial participation is claimed under this title.''.

SEC. 5. CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT PERMIT 
              ELIMINATION OR MODIFICATION OF REQUIREMENTS RELATING TO 
              EPSDT SERVICES.

    Section 1926 of the Social Security Act, as added by section 3 and 
amended by section 4, is amended by adding at the end the following:
    ``(c) Clarification That Section 1115 Authority Does not Permit 
Elimination or Modification of Requirements Relating to EPSDT 
Services.--The Secretary may not impose or approve under the authority 
of section 1115 an elimination or modification of the amount, duration, 
or scope of the services described in section 1905(a)(4)(B) (relating 
to early and periodic screening, diagnostic, and treatment services (as 
defined in section 1905(r))) or of the requirements of subparagraphs 
(A) through (C) of section 1902(a)(43).''.

SEC. 6. CLARIFICATION THAT SECTION 1115 AUTHORITY DOES NOT PERMIT 
              ELIMINATION OR MODIFICATION OF REQUIREMENTS RELATING TO 
              CERTAIN SAFETY-NET SERVICES.

    Section 1926 of the Social Security Act, as added by section 3 and 
amended by sections 4 and 5, is amended by adding at the end the 
following:
    ``(d) Clarification That Section 1115 Authority Does not Permit 
Elimination or Modification of Requirements Relating to Certain Safety-
Net Services.--The Secretary may not impose or approve under the 
authority of section 1115 an elimination or modification of the amount, 
duration, or scope of the services described in subparagraphs (B) and 
(C) of section 1905(a)(2) (relating to services provided by a rural 
health clinic (as defined in section 1905(l)(1)) and services provided 
by a Federally-qualified health center (as defined in section 
1905(l)(2))) or of the requirements of section 1902(bb) (relating to 
payment for such services).''.

SEC. 7. IMPROVEMENT OF THE PROCESS FOR THE DEVELOPMENT AND APPROVAL OF 
              MEDICAID AND CHIP DEMONSTRATION PROJECTS.

    Section 1115 of the Social Security Act (42 U.S.C. 1315) is amended 
by inserting after subsection (c) the following:
    ``(d) In the case of any experimental, pilot, or demonstration 
project under subsection (a) to assist in promoting the objectives of 
title XIX or XXI in a State that would result in a substantive change 
in eligibility, enrollment, benefits, financing, or cost-sharing (to 
the extent permitted under section 1916(f)) with respect to a State 
program under title XIX or XXI (in this subsection referred to as a 
`demonstration project') the following shall apply:
            ``(1) The Secretary may not approve a proposal for a 
        demonstration project, or for an amendment of a demonstration 
        project, submitted by a State on or after the date of enactment 
        of this subsection, unless the State requesting approval 
        certifies that the State provided reasonable public notice and 
        a reasonable opportunity for receipt and consideration of 
        public comment on the proposal prior to submission of the 
        proposal to the Secretary. Such notice shall include--
                    ``(A) the proposal;
                    ``(B) the methodologies underlying the proposal;
                    ``(C) the justifications for the proposal;
                    ``(D) the State's projections regarding the likely 
                effect and impact of the proposal on individuals 
                eligible for assistance and providers or suppliers of 
                items or services under title XIX or XXI (including 
                under any demonstration project conducted in 
                conjunction with either of those titles); and
                    ``(E) the State's assumptions on which the 
                projections described in subparagraph (D) are based.
            ``(2) With respect to any proposal for a demonstration 
        project, or for an amendment or extension of a demonstration 
        project, which has not been approved or disapproved by the 
        Secretary as of the date of enactment of this subsection, the 
        Secretary shall--
                    ``(A) provide public notice in the Federal Register 
                and on the Internet website of the Centers for Medicare 
                Medicaid Services of the proposal, any revisions of the 
                proposal, and any conditions for the financing or 
                approval of the proposal;
                    ``(B) provide adequate opportunity for public 
                comment on the proposal, any revisions of the proposal, 
                and any such conditions;
                    ``(C) approve such proposal, any revisions of the 
                proposal, and any such conditions only if, after 
                consideration of the public comments received, the 
                Secretary determines that the proposal, any revisions 
                of the proposal, and any such conditions are likely to 
                assist in promoting the objectives of title XIX or XXI 
                and identifies in writing the basis for such 
                determination; and
                    ``(D) publish on such website all documentation 
                relating to the proposal (including the written 
                determination required under subparagraph (C)), any 
                revisions of the proposal, and any such conditions, 
                including if the proposal, any revisions of the 
                proposal, and any such conditions are approved--
                            ``(i) the final terms and conditions for 
                        the demonstration project; and
                            ``(ii) a list identifying each provision of 
                        title XIX or XXI, and each regulation relating 
                        to either such title, with which compliance is 
                        waived, modified, or otherwise disregarded or 
                        for which costs that would otherwise not be 
                        permitted under such title will be allowed.''.

SEC. 8. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), the 
amendments made by sections 3 through 6 shall apply to the approval on 
or after the date of enactment of this Act of--
            (1) a waiver, experimental, pilot, or demonstration project 
        under section 1115 of the Social Security Act (42 U.S.C. 1315); 
        and
            (2) an amendment or extension of such a project.
    (b) Exception.--The amendment made by section 5 shall not apply 
with respect to any extension of approval of a waiver, experimental, 
pilot, or demonstration project with respect to title XIX of the Social 
Security Act that was first approved before 1994 and that provides a 
comprehensive and preventive child health program under such project 
that includes screening, diagnosis, and treatment of children who have 
not attained age 21.

Summary: Medicaid and CHIP Safety Net Preservation Act of 2004 - Amends title XIX (Medicaid) of the Social Security Act (SSA) with respect to the authority of the Secretary of Health and Human Services to: (1) conduct research and demonstration projects under several programs, including Medicaid and SCHIP under SSA title XXI. And (2) waive certain statutory requirements for conducting these projects without congressional review. Prohibits the Secretary from imposing or approving under such authority: (1) a cap, limitation, or other restriction on payment to a State for amounts expended as medical assistance under the Medicaid program. (2) an elimination of, or modification limiting, the entitlement of an individual to receive any medical assistance for which Federal financial participation is claimed under Medicaid. (3) an elimination or modification of the amount, duration, or scope of early and periodic screening, diagnostic, and treatment services. Or (4) an elimination or modification of the amount, duration, or scope of certain safety-net services, including those of a rural health clinic and a federally-qualified health center. Amends SSA title XI to establish public notice and comment requirements for States and the Secretary with respect to any State proposal for an experimental, pilot, or demonstration project to assist in promoting Medicaid or SCHIP objectives that would result in a substantive change in eligibility, enrollment, benefits, financing, or cost-sharing under a State program.