A bill to amend title XIX of the Social Security Act to improve the provision of rehabilitation services and case management and targeted case management services under the Medicaid program, and for other purposes.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicaid Services 
Restoration Act of 2008''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
              TITLE I--REHABILITATIVE SERVICES PROTECTIONS

Sec. 101. Inclusion of therapeutic foster care as medical assistance.
Sec. 102. Reasonable and efficient payment methodologies for 
                            rehabilitative services.
Sec. 103. Inclusion of attainment and retention of functional status in 
                            rehabilitative services.
Sec. 104. Clarification of coverage of EPSDT services for children 
                            receiving inpatient psychiatric hospital 
                            services.
Sec. 105. Third party liability clarification relating to diagnostic, 
                            screening, preventive, and rehabilitative 
                            services.
Sec. 106. Effective date.
   TITLE II--CASE MANAGEMENT AND TARGETED CASE MANAGEMENT PROTECTIONS

Sec. 201. Third party liability clarification relating to case 
                            management and targeted case management.
Sec. 202. Reasonable and efficient payment methodologies for case 
                            management services.
Sec. 203. Protecting health and safety.
Sec. 204. Codification of Olmstead standard; protecting children.
Sec. 205. Assuring appropriate case management.
Sec. 206. Effective date.

              TITLE I--REHABILITATIVE SERVICES PROTECTIONS

SEC. 101. INCLUSION OF THERAPEUTIC FOSTER CARE AS MEDICAL ASSISTANCE.

    Section 1905 of the Social Security Act (42 U.S.C. 1396d) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (27), by striking ``and'' at the 
                end;
                    (B) by redesignating paragraph (28) as paragraph 
                (29); and
                    (C) by inserting after paragraph (27) the following 
                new paragraph:
            ``(28) therapeutic foster care services described in 
        subsection (y); and''; and
            (2) by adding at the end the following new subsection:
    ``(y)(1) For purposes of subsection (a)(28), therapeutic foster 
care services described in this subsection are services provided for 
children who have not attained age 21, and, as a result of mental 
illness, other emotional or behavioral disorders, medically fragile 
conditions, or developmental disabilities need the level of care 
normally provided in an institution (including a psychiatric 
residential treatment facility) or nursing facility but who can be 
cared for in a community placement, through therapeutic foster care 
programs that--
            ``(A) are licensed by the State and accredited by the Joint 
        Commission on Accreditation of Healthcare Organizations, the 
        Commission on Accreditation of Rehabilitation Facilities, or 
        the Council on Accreditation;
            ``(B) provide structured daily activities, including the 
        development, improvement, monitoring, and reinforcing of age-
        appropriate social, communication and behavioral skills, crisis 
        intervention and crisis support services, medication 
        monitoring, counseling, and case management, and may furnish 
        other intensive community services; and
            ``(C) provide foster care parents with specialized training 
        and consultation in the management of children with mental 
        illness, other emotional or behavioral disorders, medically 
        fragile conditions, or developmental disabilities, and specific 
        additional training on the needs of each child provided such 
        services.
    ``(2) In the case of a child in State custody or for whom the State 
makes foster care maintenance payments under part E of title IV such 
services shall not include room and board.''.

SEC. 102. REASONABLE AND EFFICIENT PAYMENT METHODOLOGIES FOR 
              REHABILITATIVE SERVICES.

    Section 1905(a)(13) of the Social Security Act (42 U.S.C. 
1396d(a)(13)), as amended by section 103, is amended by inserting 
``(and which reimbursement for, in the case of rehabilitative services, 
may be made through the establishment of reasonable and efficient 
payment methodologies, including fee-for-service payments, case rates, 
daily rates, or other forms of capitated payment'' after ``status''.

SEC. 103. INCLUSION OF ATTAINMENT AND RETENTION OF FUNCTIONAL STATUS IN 
              REHABILITATIVE SERVICES.

    Section 1905(a)(13) of the Social Security Act (42 U.S.C. 
1396d(a)(13)) is amended by striking ``and restoration of an individual 
to the best possible functional level'' and inserting ``, restoration 
of an individual to the best possible functional level, or attainment 
or retention of the individual's best possible functional status''.

SEC. 104. CLARIFICATION OF COVERAGE OF EPSDT SERVICES FOR CHILDREN 
              RECEIVING INPATIENT PSYCHIATRIC HOSPITAL SERVICES.

    Section 1905(h)(1) of the Social Security Act (42 U.S.C. 
1396d(h)(1)) is amended--
            (1) in subparagraph (B), by striking ``and'' at the end;
            (2) in subparagraph (C), by adding ``and'' after the 
        semicolon; and
            (3) by inserting after subparagraph (C), the following new 
        subparagraph:
            ``(D) services described in subsection (r) which are 
        provided on an inpatient or outpatient basis to an individual 
        receiving inpatient services described in subparagraph (A), 
        (B), or (C).''.

SEC. 105. THIRD PARTY LIABILITY CLARIFICATION RELATING TO DIAGNOSTIC, 
              SCREENING, PREVENTIVE, AND REHABILITATIVE SERVICES.

    Section 1903(c) of the Social Security Act (42 U.S.C. 1396b(c)) is 
amended--
            (1) by inserting ``(1)'' after ``(c)''; and
            (2) by adding at the end the following new paragraph:
    ``(2) Nothing in this title shall be construed as prohibiting or 
restricting, or authorizing the Secretary to prohibit or restrict, 
payment under subsection (a) for medical assistance for services 
provided under section 1905(a)(13) to eligible individuals furnished by 
qualified providers under non-medical programs, provided, however, a 
State or local agency administering such plan shall comply with section 
1902(a)(25).''.

SEC. 106. EFFECTIVE DATE.

    The amendments made by this title shall take effect as if enacted 
on July 1, 2008.

   TITLE II--CASE MANAGEMENT AND TARGETED CASE MANAGEMENT PROTECTIONS

SEC. 201. THIRD PARTY LIABILITY CLARIFICATION RELATING TO CASE 
              MANAGEMENT AND TARGETED CASE MANAGEMENT.

    Section 1903(c) of the Social Security Act (42 U.S.C. 1396b(c)), as 
amended by section 105, is amended by adding at the end the following 
new paragraph:
    ``(3) Nothing in this title shall be construed as prohibiting or 
restricting, or authorizing the Secretary to prohibit or restrict 
payment under subsection (a) for medical assistance for services 
provided under section 1915 (g) to eligible individuals furnished by 
qualified providers under non-medical programs, provided, however, a 
State or local agency administering such plan shall comply with section 
1902(a)(25).''.

SEC. 202. REASONABLE AND EFFICIENT PAYMENT METHODOLOGIES FOR CASE 
              MANAGEMENT SERVICES.

    Section 1915(g)(4) of the Social Security Act (42 U.S.C. 
1396n(g)(4)) is amended by adding at the end the following new 
subparagraph:
    ``(C) Reimbursement for case management and targeted case 
management services may be made through the establishment of reasonable 
and efficient payment methodologies including fee-for-service payments, 
case rates, daily rates, or other forms of capitated payment.''.

SEC. 203. PROTECTING HEALTH AND SAFETY.

    Section 1915(c)(4) of the Social Security Act (42 U.S.C. 
1396n(c)(4)) is amended by adding after the second sentence the 
following new sentence: ``For the purpose of developing and monitoring 
the implementation of the written plan of care required under paragraph 
(1), and to assure the health and welfare of individuals, the State may 
require case management services for each beneficiary and may limit the 
case managers available with respect to case management services for 
eligible individuals in order to ensure that the case managers for such 
individuals are capable of ensuring that such individuals receive 
needed services.''.

SEC. 204. CODIFICATION OF OLMSTEAD STANDARD; PROTECTING CHILDREN.

    Section 1915(g)(2)(A) of the Social Security Act (42 U.S.C. 
1396n(g)(2)(A)) is amended--
            (1) in clause (i), by striking ``services which will'' and 
        all that follows through the period and inserting ``services 
        furnished to assist individuals, eligible under the State plan 
        who reside in a community setting or are transitioning to a 
        community setting, in gaining access to needed medical, social, 
        educational, and other services. Such services may be offered 
        by staff of non-medical programs or those who contract with 
        non-medical programs, so long as such individuals are qualified 
        providers under the State plan under this title and the case 
        management services are distinct from the direct services of 
        the non-medical program.'';
            (2) by redesignating clause (ii) as clause (iii); and
            (3) by inserting after clause (i) (as amended by paragraph 
        (1)), the following new clause:
            ``(ii) For purposes of providing case management services, 
        individuals (other than individuals who have attained age 22 
        but not attained age 65 and are patients in an institution for 
        mental diseases or individuals who are inmates of public 
        institutions) may be considered to be transitioning to a 
        community setting for up to the last 180 days of an 
        institutional stay.''.

SEC. 205. ASSURING APPROPRIATE CASE MANAGEMENT.

    Section 1915(g)(4) of the Social Security Act (42 U.S.C. 
1396n(g)(4)), as amended by section 202, is amended by adding at the 
end the following:
    ``(D) Nothing in this subsection shall be construed as prohibiting 
a State from providing case management or targeted case management 
services, as defined in subparagraphs (A) and (B), respectively, of 
paragraph (2), through multiple case managers to any individual who 
qualifies for medical assistance under the State plan, or to specific 
classes of individuals, or to individuals who reside in specified 
areas, selected by the State pursuant to this subsection.''.

SEC. 206. EFFECTIVE DATE.

    The amendments made by this title shall take effect as if enacted 
on December 4, 2007.

Summary: Medicaid Services Restoration Act of 2008 - Amends title XIX (Medicaid) of the Social Security Act to extend medical assistance coverage to therapeutic foster care services. Allows reasonable and efficient payment methodologies, including fee-for-service payments, case rates, daily rates, or other forms of capitated payment, as means of reimbursement for rehabilitative services. Includes medical or remedial services for attainment and retention of functional status among rehabilitative services. Includes among inpatient psychiatric hospital services for children early and periodic screening, diagnostic, and treatment services. Allows payment for medical assistance for diagnostic, screening, preventive, and rehabilitative services or optional targeted case management services furnished by qualified providers under non-medical programs, provided a state or local agency administering such plan complies with certain requirements. Allows reasonable and efficient payment methodologies for reimbursement for case management and targeted case management services. Authorizes the state to: (1) require case management services for each beneficiary. And (2) limit the case managers available in order to ensure that the case managers for eligible individuals are capable of ensuring that such individuals receive needed services. Allows staff of non-medical programs, or contractors with non-medical programs, to offer such services, so long as: (1) such individuals are state-qualified providers. And (2) the case management services are distinct from the non-medical program's direct services. Redefines case management services to mean those furnished to assist eligible individuals, who reside in a community setting or are transitioning to a community setting, in gaining access to needed medical, social, educational, and other services. Allows a state to provide case management or targeted case management services through multiple case managers to: (1) any qualified individual, (2) specific classes of individuals. Or (3) individuals who reside in specified areas selected by the state.