59–008 

110TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 110–346 

PROVIDING FOR THE CONSIDERATION OF THE SENATE AMENDMENTS TO 

THE BILL (H.R. 976) TO AMEND THE INTERNAL REVENUE CODE OF 1986 

TO PROVIDE TAX RELIEF FOR SMALL BUSINESSES, AND FOR OTHER 

PURPOSES 

SEPTEMBER 24, 2007.—Referred to the House Calendar and ordered to be printed 

Mr. MCGOVERN, from the Committee on Rules, 

submitted the following 

R E P O R T 

[To accompany H. Res. 675] 

The Committee on Rules, having had under consideration House 

Resolution 675, by a record vote of 8 to 4, report the same to the 

House with the recommendation that the resolution be adopted. 

SUMMARY OF PROVISIONS OF THE RESOLUTION

The resolution provides for consideration of the Senate amendments to the bill, H.R. 976, to amend the Internal Revenue Code 

of 1986 to provide tax relief for small businesses, and for other purposes. The resolution provides that it is in order for the chairman 

of the Committee on Energy and Commerce to make a motion that 

the House concur in each of the Senate amendments to H.R. 976 

with the respective amendment printed in this report. 

The resolution waives all points of order against the motion except those arising under clause 10 of rule XXI. The resolution provides that the Senate amendments and the motion shall be considered as read. It further provides that the motion shall be debatable 

for one hour equally divided among and controlled by the chairman 

and ranking minority member of the Committee on Energy and 

Commerce and the chairman and ranking minority member of the 

Committee on Ways and Means. 

EXPLANATION OF WAIVERS

Although the rule waives all points of order against the motion 

(except those arising under clause 10 of rule XXI), the Committee 

is not aware of any points of order against the motion. The waiver 

of all points of order against the motion is prophylactic in nature. 


bajohnson on PROD1PC69 with REPORTS
2 

COMMITTEE VOTES

The results of each record vote on an amendment or motion to 

report, together with the names of those voting for and against, are 

printed below: 

Rules Committee record vote No. 310 

Date: September 24, 2007. 

Measure: Senate amendment to H.R. 976. 

Motion by: Mr. Dreier. 

Summary of motion: To amend the rule and provide for an 

amendment to the motion to concur to be offered by Rep. Barton 

of Texas and to be debatable by a proponent and an opponent for 

ten minutes each. 

Results: Defeated 4–8. 

Vote by Members: Hastings (FL)—Nay; Matsui—Nay; Cardoza—

Nay; Welch—Nay; Castor—Nay; Arcuri—Nay; Sutton—Nay; 

Dreier—Yea; Diaz-Balart—Yea; Hastings (WA)—Yea; Sessions—

Yea; Slaughter—Nay. 

Rules Committee record vote No. 311 

Date: September 24, 2007. 

Measure: Senate amendment to H.R. 976. 

Motion by: Mr. Dreier. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Barton of Texas, an amendment 

in the nature of a substitute that would reauthorize and fully fund 

the existing SCHIP program for an additional 18 months to be debated by a proponent and an opponent for 20 minutes each. 

Results: Defeated 4–8. 

Vote by Members: Hastings (FL)—Nay; Matsui—Nay; Cardoza—

Nay; Welch—Nay; Castor—Nay; Arcuri—Nay; Sutton—Nay; 

Dreier—Yea; Diaz-Balart—Yea; Hastings (WA)—Yea; Sessions—

Yea; Slaughter—Nay. 

Rules Committee record vote No. 312 

Date: September 24, 2007. 

Measure: Senate amendment to H.R. 976. 

Motion by: Mr. Diaz-Balart. 

Summary of motion: To make in order and provide appropriate 

waivers for an amendment by Rep. Diaz-Balart that would allow 

states the option to provide Medicaid and SCHIP coverage to all eligible, legally present, children and pregnant women. 

Results: Defeated 4–8. 

Vote by Members: Hastings (FL)—Nay; Matsui—Nay; Cardoza—

Nay; Welch—Nay; Castor—Nay; Arcuri—Nay; Sutton—Nay; 

Dreier—Yea; Diaz-Balart—Yea; Hastings (WA)—Yea; Sessions—

Yea; Slaughter—Nay. 

Rules Committee record vote No. 313 

Date: September 24, 2007. 

Measure: Senate amendment to H.R. 976. 

Motion by: Mr. Sessions. 


bajohnson on PROD1PC69 with REPORTS
3 

Summary of motion: To amend the rule to waive all points of 

order against the motion except those arising under clause 9 and 

10 of rule XXI. 

Results: Defeated 4–8. 

Vote by Members: Hastings (FL)—Nay; Matsui—Nay; Cardoza— Nay; Welch—Nay; Castor—Nay; Arcuri—Nay; Sutton—Nay; 

Dreier—Yea; Diaz-Balart—Yea; Hastings (WA)—Yea; Sessions— Yea; Slaughter—Nay. 

Rules Committee record vote No. 314 

Date: September 24, 2007. 

Measure: Senate amendment to H.R. 976. 

Motion by: Mr. Hastings (FL). 

Summary of motion: To grant the rule. 

Results: Adopted 8–4. 

Vote by Members: Hastings (FL)—Yea; Matsui—Yea; Cardoza— Yea; Welch—Yea; Castor—Yea; Arcuri—Yea; Sutton—Yea; 

Dreier—Nay; Diaz-Balart—Nay; Hastings (WA)—Nay; Sessions— Nay; Slaughter—Yea. 

SUMMARY OF THE HOUSE AMENDMENTS TO THE SENATE AMENDMENTS

TO H.R. 976

The amendment reauthorizes the Children’s Health Insurance 

Program, investing an additional $35 billion over five years for 

CHIP’s financing and health insurance coverage for low-income 

children. The amendment provides that dental coverage should be 

available to children enrolled in CHIP. The amendment provides 

coverage to pregnant women as a new state option as well as preserving the options to cover them through a state waiver or 

through regulation. The amendment prohibits new waivers to cover 

parents in the CHIP program. States that have received waivers to 

cover low-income parents under CHIP will be allowed to transition 

parents into a separate block grant. 

The amendment retains the current law prohibition of waivers to 

allow coverage of childless adults. Currently covered childless 

adults will transition off CHIP. For states that have received CHIP 

waivers to cover childless adults, the amendment terminates those 

waivers after a one-year period, provides temporary Medicaid funding for already-enrolled adults, and allows states to apply for a 

Medicaid waiver for coverage. 

Under the financing structure, states that face a funding shortfall and meet enrollment goals will receive an adjustment payment 

to ensure that no child who is eligible for Medicaid or CHIP is denied coverage or placed on a waiting list. The formula also sets in 

place new overall caps on federal funding to ensure the program’s 

expenditures do not exceed the amounts authorized. 

The amendment provides $100 million in grants for new outreach 

activities to states, local governments, schools, community-based 

organizations, safety-net providers and others. The amendment establishes a new quality child health initiative to develop and implement quality measures and improve state reporting of quality data. 

Finally, the amendment allows states to offer a premium assistance subsidy for qualified, cost-effective employer-sponsored coverage to children eligible for CHIP and who have access to such 

coverage. 


bajohnson on PROD1PC69 with REPORTS
4 

TEXT OF THE HOUSE AMENDMENTS TO THE SENATE AMENDMENTS TO

H.R. 976

In lieu of the matter proposed to be inserted to the text of the 

Act, insert the following: 

SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; 

REFERENCES; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as ‘‘Children’s Health 

Insurance Program Reauthorization Act of 2007’’. 

(b) AMENDMENTS TO SOCIAL SECURITY ACT.—Except as otherwise 

specifically provided, whenever in this Act an amendment is expressed in terms of an amendment to or repeal of a section or other 

provision, the reference shall be considered to be made to that section or other provision of the Social Security Act. 

(c) REFERENCES TO CHIP; MEDICAID; SECRETARY.—In this Act: 

(1) CHIP.—The term ‘‘CHIP’’ means the State Children’s 

Health Insurance Program established under title XXI of the 

Social Security Act (42 U.S.C. 1397aa et seq.). 

(2) MEDICAID.—The term ‘‘Medicaid’’ means the program for 

medical assistance established under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.). 

(3) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Health and Human Services. 

(d) TABLE OF CONTENTS.—The table of contents of this Act is as 

follows: 

Sec. 1. Short title; amendments to Social Security Act; references; table of contents. 

Sec. 2. Purpose. 

Sec. 3. General effective date; exception for State legislation; contingent effective 

date; reliance on law. 

TITLE I—FINANCING 

Subtitle A—Funding 

Sec. 101. Extension of CHIP. 

Sec. 102. Allotments for States and territories for fiscal years 2008 through 2012. 

Sec. 103. Child Enrollment Contingency Fund. 

Sec. 104. CHIP performance bonus payment to offset additional enrollment costs 

resulting from enrollment and retention efforts. 

Sec. 105. 2–year initial availability of CHIP allotments. 

Sec. 106. Redistribution of unused allotments to address State funding shortfalls. 

Sec. 107. Option for qualifying States to receive the enhanced portion of the CHIP 

matching rate for Medicaid coverage of certain children. 

Sec. 108. One-time appropriation. 

Sec. 109. Improving funding for the territories under CHIP and Medicaid. 

Subtitle B—Focus on Low-Income Children and Pregnant Women 

Sec. 111. State option to cover low-income pregnant women under CHIP through 

a State plan amendment. 

Sec. 112. Phase-Out of coverage for nonpregnant childless adults under CHIP; conditions for coverage of parents. 

Sec. 113. Elimination of counting Medicaid child presumptive eligibility costs 

against Title XXI allotment. 

Sec. 114. Limitation on matching rate for States that propose to cover children with 

effective family income that exceeds 300 percent of the poverty line. 

Sec. 115. State authority under Medicaid. 

Sec. 116. Preventing substitution of CHIP coverage for private coverage. 


bajohnson on PROD1PC69 with REPORTS
5 

TITLE II—OUTREACH AND ENROLLMENT 

Subtitle A—Outreach and Enrollment Activities 

Sec. 201. Grants and enhanced administrative funding for outreach and enrollment. 

Sec. 202. Increased outreach and enrollment of Indians. 

Sec. 203. State option to rely on findings from an Express Lane agency to conduct 

simplified eligibility determinations. 

Subtitle B—Reducing Barriers to Enrollment 

Sec. 211. Verification of declaration of citizenship or nationality for purposes of eligibility for Medicaid and CHIP. 

Sec. 212. Reducing administrative barriers to enrollment. 

Sec. 213. Model of Interstate coordinated enrollment and coverage process. 

TITLE III—REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE 

Subtitle A—Additional State Option for Providing Premium Assistance 

Sec. 301. Additional State option for providing premium assistance. 

Sec. 302. Outreach, education, and enrollment assistance. 

Subtitle B—Coordinating Premium Assistance With Private Coverage 

Sec. 311. Special enrollment period under group health plans in case of termination 

of Medicaid or CHIP coverage or eligibility for assistance in purchase 

of employment-based coverage; coordination of coverage. 

TITLE IV—STRENGTHENING QUALITY OF CARE AND HEALTH OUTCOMES 

Sec. 401. Child health quality improvement activities for children enrolled in Medicaid or CHIP. 

Sec. 402. Improved availability of public information regarding enrollment of children in CHIP and Medicaid. 

Sec. 403. Application of certain managed care quality safeguards to CHIP. 

TITLE V—IMPROVING ACCESS TO BENEFITS 

Sec. 501. Dental benefits. 

Sec. 502. Mental health parity in CHIP plans. 

Sec. 503. Application of prospective payment system for services provided by Federally-Qualified Health Centers and rural health clinics. 

Sec. 504. Premium grace period. 

Sec. 505. Demonstration projects relating to diabetes prevention. 

Sec. 506. Clarification of coverage of services provided through school-based health 

centers. 

TITLE VI—PROGRAM INTEGRITY AND OTHER MISCELLANEOUS 

PROVISIONS 

Subtitle A—Program Integrity and Data Collection 

Sec. 601. Payment error rate measurement (‘‘PERM’’). 

Sec. 602. Improving data collection. 

Sec. 603. Updated Federal evaluation of CHIP. 

Sec. 604. Access to records for IG and GAO audits and evaluations. 

Sec. 605. No Federal funding for illegal aliens. 

Subtitle B—Miscellaneous Health Provisions 

Sec. 611. Deficit Reduction Act technical corrections. 

Sec. 612. References to title XXI. 

Sec. 613. Prohibiting initiation of new health opportunity account demonstration 

programs. 

Sec. 614. County medicaid health insuring organizations; GAO report on Medicaid 

managed care payment rates. 

Sec. 615. Adjustment in computation of Medicaid FMAP to disregard an extraordinary employer pension contribution. 

Sec. 616. Moratorium on certain payment restrictions. 

Sec. 617. Medicaid DSH allotments for Tennessee and Hawaii. 

Sec. 618. Clarification treatment of regional medical center. 

Sec. 619. Extension of SSI web-based asset demonstration project to the Medicaid 

program. 


bajohnson on PROD1PC69 with REPORTS
6 

Subtitle C—Other Provisions 

Sec. 621. Support for injured servicemembers. 

Sec. 622. Military family job protection. 

Sec. 623. Outreach regarding health insurance options available to children. 

Sec. 624. Sense of Senate regarding access to affordable and meaningful health insurance coverage. 

TITLE VII—REVENUE PROVISIONS 

Sec. 701. Increase in excise tax rate on tobacco products. 

Sec. 702. Administrative improvements. 

Sec. 703. Time for payment of corporate estimated taxes. 

SEC. 2. PURPOSE. 

It is the purpose of this Act to provide dependable and stable 

funding for children’s health insurance under titles XXI and XIX 

of the Social Security Act in order to enroll all six million uninsured children who are eligible, but not enrolled, for coverage today 

through such titles. 

SEC. 3. GENERAL EFFECTIVE DATE; EXCEPTION FOR STATE LEGISLATION; CONTINGENT EFFECTIVE DATE; RELIANCE ON LAW. 

(a) GENERAL EFFECTIVE DATE.—Unless otherwise provided in 

this Act, subject to subsections (b) and (c), this Act (and the amendments made by this Act) shall take effect on October 1, 2007, and 

shall apply to child health assistance and medical assistance provided on or after that date without regard to whether or not final 

regulations to carry out this Act (or such amendments) have been 

promulgated by such date. 

(b) EXCEPTION FOR STATE LEGISLATION.—In the case of a State 

plan under title XIX or State child health plan under XXI of the 

Social Security Act, which the Secretary of Health and Human 

Services determines requires State legislation in order for respective plan to meet one or more additional requirements imposed by 

amendments made by this Act, the respective State plan shall not 

be regarded as failing to comply with the requirements of such title 

solely on the basis of its failure to meet such an additional requirement before the first day of the first calendar quarter beginning 

after the close of the first regular session of the State legislature 

that begins after the date of enactment of this Act. For purposes 

of the previous sentence, in the case of a State that has a 2–year 

legislative session, each year of the session shall be considered to 

be a separate regular session of the State legislature. 

(c) CONTINGENT EFFECTIVE DATE FOR CHIP FUNDING FOR FISCAL

YEAR 2008.—Notwithstanding any other provision of law, if funds 

are appropriated under any law (other than this Act) to provide allotments to States under CHIP for all (or any portion) of fiscal year 

2008—

(1) any amounts that are so appropriated that are not so allotted and obligated before the date of the enactment of this 

Act are rescinded; and 

(2) any amount provided for CHIP allotments to a State 

under this Act (and the amendments made by this Act) for 

such fiscal year shall be reduced by the amount of such appropriations so allotted and obligated before such date. 

(d) RELIANCE ON LAW.—With respect to amendments made by 

this Act (other than title VII) that become effective as of a date—


bajohnson on PROD1PC69 with REPORTS
7 

(1) such amendments are effective as of such date whether 

or not regulations implementing such amendments have been 

issued; and 

(2) Federal financial participation for medical assistance or 

child health assistance furnished under title XIX or XXI, respectively, of the Social Security Act on or after such date by 

a State in good faith reliance on such amendments before the 

date of promulgation of final regulations, if any, to carry out 

such amendments (or before the date of guidance, if any, regarding the implementation of such amendments) shall not be 

denied on the basis of the State’s failure to comply with such 

regulations or guidance. 

TITLE I—FINANCING 

Subtitle A—Funding 

SEC. 101. EXTENSION OF CHIP. 

Section 2104(a) (42 U.S.C. 1397dd(a)) is amended— (1) in paragraph (9), by striking ‘‘and’’ at the end; 

(2) in paragraph (10), by striking the period at the end and 

inserting a semicolon; and 

(3) by adding at the end the following new paragraphs: 

‘‘(11) for fiscal year 2008, $9,125,000,000; 

‘‘(12) for fiscal year 2009, $10,675,000,000; 

‘‘(13) for fiscal year 2010, $11,850,000,000; 

‘‘(14) for fiscal year 2011, $13,750,000,000; and 

‘‘(15) for fiscal year 2012, for purposes of making 2 semi-annual allotments— ‘‘(A) $1,750,000,000 for the period beginning on October 

1, 2011, and ending on March 31, 2012, and ‘‘(B) $1,750,000,000 for the period beginning on April 1, 

2012, and ending on September 30, 2012.’’. 

SEC. 102. ALLOTMENTS FOR STATES AND TERRITORIES FOR FISCAL 

YEARS 2008 THROUGH 2012. 

Section 2104 (42 U.S.C. 1397dd) is amended—

(1) in subsection (b)(1), by striking ‘‘subsection (d)’’ and inserting ‘‘subsections (d) and (i)’’; 

(2) in subsection (c)(1), by striking ‘‘subsection (d)’’ and inserting ‘‘subsections (d) and (i)(4)’’; and 

(3) by adding at the end the following new subsection: 

‘‘(i) ALLOTMENTS FOR FISCAL YEARS 2008 THROUGH 2012.—

‘‘(1) FOR FISCAL YEAR 2008.—

‘‘(A) FOR THE 50 STATES AND THE DISTRICT OF COLUMBIA.—Subject to the succeeding provisions of this paragraph and paragraph (4), the Secretary shall allot for fiscal 

year 2008 from the amount made available under subsection (a)(11), to each of the 50 States and the District of 

Columbia 110 percent of the highest of the following 

amounts for such State or District: 

‘‘(i) The total Federal payments to the State under 

this title for fiscal year 2007, multiplied by the allotment increase factor determined under paragraph (5) 

for fiscal year 2008. 


bajohnson on PROD1PC69 with REPORTS
8 

‘‘(ii) The Federal share of the amount allotted to the 

State for fiscal year 2007 under subsection (b), multiplied by the allotment increase factor determined 

under paragraph (5) for fiscal year 2008. 

‘‘(iii) Only in the case of—

‘‘(I) a State that received a payment, redistribution, or allotment under any of paragraphs (1), (2), 

or (4) of subsection (h), the amount of the projected total Federal payments to the State under 

this title for fiscal year 2007, as determined on 

the basis of the November 2006 estimates certified 

by the State to the Secretary; 

‘‘(II) a State whose projected total Federal payments to the State under this title for fiscal year 

2007, as determined on the basis of the May 2006 

estimates certified by the State to the Secretary, 

were at least $95,000,000 but not more than 

$96,000,000 higher than the projected total Federal payments to the State under this title for fiscal year 2007 on the basis of the November 2006 

estimates, the amount of the projected total Federal payments to the State under this title for fiscal year 2007 on the basis of the May 2006 estimates; or 

‘‘(III) a State whose projected total Federal payments under this title for fiscal year 2007, as determined on the basis of the November 2006 estimates certified by the State to the Secretary, exceeded all amounts available to the State for expenditure for fiscal year 2007 (including any 

amounts paid, allotted, or redistributed to the 

State in prior fiscal years), the amount of the projected total Federal payments to the State under 

this title for fiscal year 2007, as determined on 

the basis of the November 2006 estimates certified 

by the State to the Secretary, 

multiplied by the allotment increase factor determined 

under paragraph (5) for fiscal year 2008. 

‘‘(iv) The projected total Federal payments to the 

State under this title for fiscal year 2008, as determined on the basis of the August 2007 projections certified by the State to the Secretary by not later than 

September 30, 2007. 

‘‘(B) FOR THE COMMONWEALTHS AND TERRITORIES.—Subject to the succeeding provisions of this paragraph and 

paragraph (4), the Secretary shall allot for fiscal year 2008 

from the amount made available under subsection (a)(11) 

to each of the commonwealths and territories described in 

subsection (c)(3) an amount equal to the highest amount of 

Federal payments to the commonwealth or territory under 

this title for any fiscal year occurring during the period of 

fiscal years 1998 through 2007, multiplied by the allotment increase factor determined under paragraph (5) for 

fiscal year 2008, except that subparagraph (B) thereof 


bajohnson on PROD1PC69 with REPORTS
9 

shall be applied by substituting ‘the United States’ for ‘the 

State’. 

‘‘(C) DEADLINE AND DATA FOR DETERMINING FISCAL YEAR

2008 ALLOTMENTS.—In computing the amounts under subparagraphs (A) and (B) that determine the allotments to 

States for fiscal year 2008, the Secretary shall use the 

most recent data available to the Secretary before the start 

of that fiscal year. The Secretary may adjust such amounts 

and allotments, as necessary, on the basis of the expenditure data for the prior year reported by States on CMS 

Form 64 or CMS Form 21 not later than November 30, 

2007, but in no case shall the Secretary adjust the allotments provided under subparagraph (A) or (B) for fiscal 

year 2008 after December 31, 2007. 

‘‘(D) ADJUSTMENT FOR QUALIFYING STATES.—In the case 

of a qualifying State described in paragraph (2) of section 

2105(g), the Secretary shall permit the State to submit revised projection described in subparagraph (A)(iv) in order 

to take into account changes in such projections attributable to the application of paragraph (4) of such section. 

‘‘(2) FOR FISCAL YEARS 2009 THROUGH 2011.—

‘‘(A) IN GENERAL.—Subject to paragraphs (4) and (6), 

from the amount made available under paragraphs (12) 

through (14) of subsection (a) for each of fiscal years 2009 

through 2011, respectively, the Secretary shall compute a 

State allotment for each State (including the District of 

Columbia and each commonwealth and territory) for each 

such fiscal year as follows: 

‘‘(i) GROWTH FACTOR UPDATE FOR FISCAL YEAR 2009.—

For fiscal year 2009, the allotment of the State is 

equal to the sum of—

‘‘(I) the amount of the State allotment under 

paragraph (1) for fiscal year 2008; and 

‘‘(II) the amount of any payments made to the 

State under subsection (j) for fiscal year 2008, 

multiplied by the allotment increase factor under 

paragraph (5) for fiscal year 2009. 

‘‘(ii) REBASING IN FISCAL YEAR 2010.—For fiscal year 

2010, the allotment of a State is equal to the Federal 

payments to the State that are attributable to (and 

countable towards) the total amount of allotments 

available under this section to the State in fiscal year 

2009 (including payments made to the State under 

subsection (j) for fiscal year 2009 as well as amounts 

redistributed to the State in fiscal year 2009) multiplied by the allotment increase factor under paragraph 

(5) for fiscal year 2010. 

‘‘(iii) GROWTH FACTOR UPDATE FOR FISCAL YEAR

2011.—For fiscal year 2011, the allotment of the State 

is equal to the sum of—

‘‘(I) the amount of the State allotment under 

clause (ii) for fiscal year 2010; and 

‘‘(II) the amount of any payments made to the 

State under subsection (j) for fiscal year 2010, 


bajohnson on PROD1PC69 with REPORTS
10 

multiplied by the allotment increase factor under 

paragraph (5) for fiscal year 2011. ‘‘(3) FOR FISCAL YEAR 2012.— ‘‘(A) FIRST HALF.—Subject to paragraphs (4) and (6), 

from the amount made available under subparagraph (A) 

of paragraph (15) of subsection (a) for the semi-annual period described in such paragraph, increased by the amount 

of the appropriation for such period under section 108 of 

the Children’s Health Insurance Program Reauthorization 

Act of 2007, the Secretary shall compute a State allotment 

for each State (including the District of Columbia and each 

commonwealth and territory) for such semi-annual period 

in an amount equal to the first half ratio (described in subparagraph (D)) of the amount described in subparagraph 

(C). ‘‘(B) SECOND HALF.—Subject to paragraphs (4) and (6), 

from the amount made available under subparagraph (B) 

of paragraph (15) of subsection (a) for the semi-annual period described in such paragraph, the Secretary shall compute a State allotment for each State (including the District of Columbia and each commonwealth and territory) 

for such semi-annual period in an amount equal to the 

amount made available under such subparagraph multiplied by the ratio of—

‘‘(i) the amount of the allotment to such State under 

subparagraph (A); to 

‘‘(ii) the total of the amount of all of the allotments 

made available under such subparagraph. 

‘‘(C) FULL YEAR AMOUNT BASED ON REBASED AMOUNT.—

The amount described in this subparagraph for a State is 

equal to the Federal payments to the State that are attributable to (and countable towards) the total amount of allotments available under this section to the State in fiscal 

year 2011 (including payments made to the State under 

subsection (j) for fiscal year 2011 as well as amounts redistributed to the State in fiscal year 2011) multiplied by the 

allotment increase factor under paragraph (5) for fiscal 

year 2012. ‘‘(D) FIRST HALF RATIO.—The first half ratio described in 

this subparagraph is the ratio of— ‘‘(i) the sum of— ‘‘(I) the amount made available under subsection (a)(15)(A); and ‘‘(II) the amount of the appropriation for such 

period under section 108 of the Children’s Health 

Insurance Program Reauthorization Act of 2007; 

to ‘‘(ii) the sum of the— ‘‘(I) amount described in clause (i); and 

‘‘(II) the amount made available under subsection (a)(15)(B). 

‘‘(4) PRORATION RULE.—If, after the application of this subsection without regard to this paragraph, the sum of the allotments determined under paragraph (1), (2), or (3) for a fiscal 

year (or, in the case of fiscal year 2012, for a semi-annual peVerDate Aug 31 2005 05:23 Sep 25, 2007 Jkt 059008 PO 00000 Frm 00012 Fmt 6659 Sfmt 6602 E:\HR\OC\HR346.XXX HR346

bajohnson on PROD1PC69 with REPORTS
11 

riod in such fiscal year) exceeds the amount available under 

subsection (a) for such fiscal year or period, the Secretary shall 

reduce each allotment for any State under such paragraph for 

such fiscal year or period on a proportional basis. ‘‘(5) ALLOTMENT INCREASE FACTOR.—The allotment increase 

factor under this paragraph for a fiscal year is equal to the 

product of the following: ‘‘(A) PER CAPITA HEALTH CARE GROWTH FACTOR.—1 plus 

the percentage increase in the projected per capita amount 

of National Health Expenditures from the calendar year in 

which the previous fiscal year ends to the calendar year in 

which the fiscal year involved ends, as most recently published by the Secretary before the beginning of the fiscal 

year. ‘‘(B) CHILD POPULATION GROWTH FACTOR.—1 plus the 

percentage increase (if any) in the population of children 

in the State from July 1 in the previous fiscal year to July 

1 in the fiscal year involved, as determined by the Secretary based on the most recent published estimates of the 

Bureau of the Census before the beginning of the fiscal 

year involved, plus 1 percentage point. 

‘‘(6) INCREASE IN ALLOTMENT TO ACCOUNT FOR APPROVED PRO- GRAM EXPANSIONS.—In the case of one of the 50 States or the 

District of Columbia that— ‘‘(A) has submitted to the Secretary, and has approved 

by the Secretary, a State plan amendment or waiver request relating to an expansion of eligibility for children or 

benefits under this title that becomes effective for a fiscal 

year (beginning with fiscal year 2009 and ending with fiscal year 2012); and ‘‘(B) has submitted to the Secretary, before the August 

31 preceding the beginning of the fiscal year, a request for 

an expansion allotment adjustment under this paragraph 

for such fiscal year that specifies—

‘‘(i) the additional expenditures that are attributable 

to the eligibility or benefit expansion provided under 

the amendment or waiver described in subparagraph 

(A), as certified by the State and submitted to the Secretary by not later than August 31 preceding the beginning of the fiscal year; and 

‘‘(ii) the extent to which such additional expenditures are projected to exceed the allotment of the State 

or District for the year, 

subject to paragraph (4), the amount of the allotment of the 

State or District under this subsection for such fiscal year shall 

be increased by the excess amount described in subparagraph 

(B)(i). A State or District may only obtain an increase under 

this paragraph for an allotment for fiscal year 2009 or fiscal 

year 2011. 

‘‘(7) AVAILABILITY OF AMOUNTS FOR SEMI-ANNUAL PERIODS IN

FISCAL YEAR 2012.—Each semi-annual allotment made under 

paragraph (3) for a period in fiscal year 2012 shall remain 

available for expenditure under this title for periods after the 

end of such fiscal year in the same manner as if the allotment 

had been made available for the entire fiscal year.’’. 


bajohnson on PROD1PC69 with REPORTS
12 

SEC. 103. CHILD ENROLLMENT CONTINGENCY FUND. 

Section 2104 (42 U.S.C. 1397dd), as amended by section 102, is 

amended by adding at the end the following new subsection: 

‘‘(j) CHILD ENROLLMENT CONTINGENCY FUND.—

‘‘(1) ESTABLISHMENT.—There is hereby established in the 

Treasury of the United States a fund which shall be known as 

the ‘Child Enrollment Contingency Fund’ (in this subsection referred to as the ‘Fund’). Amounts in the Fund shall be available without further appropriations for payments under this 

subsection. 

‘‘(2) DEPOSITS INTO FUND.— ‘‘(A) INITIAL AND SUBSEQUENT APPROPRIATIONS.—Subject 

to subparagraphs (B) and (D), out of any money in the 

Treasury of the United States not otherwise appropriated, 

there are appropriated to the Fund— ‘‘(i) for fiscal year 2008, an amount equal to 20 percent of the amount made available under paragraph 

(11) of subsection (a) for the fiscal year; and ‘‘(ii) for each of fiscal years 2009 through 2011 (and 

for each of the semi-annual allotment periods for fiscal 

year 2012) , such sums as are necessary for making 

payments to eligible States for such fiscal year or period, but not in excess of the aggregate cap described 

in subparagraph (B). ‘‘(B) AGGREGATE CAP.—The total amount available for 

payment from the Fund for each of fiscal years 2009 

through 2011 (and for each of the semi-annual allotment 

periods for fiscal year 2012), taking into account deposits 

made under subparagraph (C), shall not exceed 20 percent 

of the amount made available under subsection (a) for the 

fiscal year or period. 

‘‘(C) INVESTMENT OF FUND.—The Secretary of the Treasury shall invest, in interest bearing securities of the 

United States, such currently available portions of the 

Fund as are not immediately required for payments from 

the Fund. The income derived from these investments constitutes a part of the Fund. 

‘‘(D) AVAILABILITY OF EXCESS FUNDS FOR PERFORMANCE

BONUSES.—Any amounts in excess of the aggregate cap described in subparagraph (B) for a fiscal year or period shall 

be made available for purposes of carrying out section 

2105(a)(3) for any succeeding fiscal year and the Secretary 

of the Treasury shall reduce the amount in the Fund by 

the amount so made available. 

‘‘(3) CHILD ENROLLMENT CONTINGENCY FUND PAYMENTS.—

‘‘(A) IN GENERAL.—If a State’s expenditures under this 

title in fiscal year 2008, fiscal year 2009, fiscal year 2010, 

fiscal year 2011, or a semi-annual allotment period for fiscal year 2012, exceed the total amount of allotments available under this section to the State in the fiscal year or period (determined without regard to any redistribution it receives under subsection (f) that is available for expenditure 

during such fiscal year or period, but including any carryover from a previous fiscal year) and if the average monthly unduplicated number of children enrolled under the 


bajohnson on PROD1PC69 with REPORTS
13 

State plan under this title (including children receiving 

health care coverage through funds under this title pursuant to a waiver under section 1115) during such fiscal year 

or period exceeds its target average number of such enrollees (as determined under subparagraph (B)) for that fiscal 

year or period, subject to subparagraph (D), the Secretary 

shall pay to the State from the Fund an amount equal to 

the product of—

‘‘(i) the amount by which such average monthly 

caseload exceeds such target number of enrollees; and 

‘‘(ii) the projected per capita expenditures under the 

State child health plan (as determined under subparagraph (C) for the fiscal year), multiplied by the enhanced FMAP (as defined in section 2105(b)) for the 

State and fiscal year involved (or in which the period 

occurs). 

‘‘(B) TARGET AVERAGE NUMBER OF CHILD ENROLLEES.—In 

this paragraph, the target average number of child enrollees for a State—

‘‘(i) for fiscal year 2008 is equal to the monthly average unduplicated number of children enrolled in the 

State child health plan under this title (including such 

children receiving health care coverage through funds 

under this title pursuant to a waiver under section 

1115) during fiscal year 2007 increased by the population growth for children in that State for the year 

ending on June 30, 2006 (as estimated by the Bureau 

of the Census) plus 1 percentage point; or 

‘‘(ii) for a subsequent fiscal year (or semi-annual period occurring in a fiscal year) is equal to the target 

average number of child enrollees for the State for the 

previous fiscal year increased by the child population 

growth factor described in subsection (i)(5)(B) for the 

State for the prior fiscal year. 

‘‘(C) PROJECTED PER CAPITA EXPENDITURES.—For purposes of subparagraph (A)(ii), the projected per capita expenditures under a State child health plan—

‘‘(i) for fiscal year 2008 is equal to the average per 

capita expenditures (including both State and Federal 

financial participation) under such plan for the targeted low-income children counted in the average 

monthly caseload for purposes of this paragraph during fiscal year 2007, increased by the annual percentage increase in the projected per capita amount of National Health Expenditures (as estimated by the Secretary) for 2008; or 

‘‘(ii) for a subsequent fiscal year (or semi-annual period occurring in a fiscal year) is equal to the projected 

per capita expenditures under such plan for the previous fiscal year (as determined under clause (i) or 

this clause) increased by the annual percentage increase in the projected per capita amount of National 

Health Expenditures (as estimated by the Secretary) 

for the year in which such subsequent fiscal year ends. 


bajohnson on PROD1PC69 with REPORTS
14 

‘‘(D) PRORATION RULE.—If the amounts available for payment from the Fund for a fiscal year or period are less 

than the total amount of payments determined under subparagraph (A) for the fiscal year or period, the amount to 

be paid under such subparagraph to each eligible State 

shall be reduced proportionally. ‘‘(E) TIMELY PAYMENT; RECONCILIATION.—Payment under 

this paragraph for a fiscal year or period shall be made before the end of the fiscal year or period based upon the 

most recent data for expenditures and enrollment and the 

provisions of subsection (e) of section 2105 shall apply to 

payments under this subsection in the same manner as 

they apply to payments under such section. ‘‘(F) CONTINUED REPORTING.—For purposes of this paragraph and subsection (f), the State shall submit to the Secretary the State’s projected Federal expenditures, even if 

the amount of such expenditures exceeds the total amount 

of allotments available to the State in such fiscal year or 

period. 

‘‘(G) APPLICATION TO COMMONWEALTHS AND TERRI- TORIES.—No payment shall be made under this paragraph 

to a commonwealth or territory described in subsection 

(c)(3) until such time as the Secretary determines that 

there are in effect methods, satisfactory to the Secretary, 

for the collection and reporting of reliable data regarding 

the enrollment of children described in subparagraphs (A) 

and (B) in order to accurately determine the commonwealth’s or territory’s eligibility for, and amount of payment, under this paragraph.’’. 

SEC. 104. CHIP PERFORMANCE BONUS PAYMENT TO OFFSET ADDITIONAL ENROLLMENT COSTS RESULTING FROM ENROLLMENT AND RETENTION EFFORTS. 

Section 2105(a) (42 U.S.C. 1397ee(a)) is amended by adding at 

the end the following new paragraphs: ‘‘(3) PERFORMANCE BONUS PAYMENT TO OFFSET ADDITIONAL

MEDICAID AND CHIP CHILD ENROLLMENT COSTS RESULTING FROM

ENROLLMENT AND RETENTION EFFORTS.— ‘‘(A) IN GENERAL.—In addition to the payments made 

under paragraph (1), for each fiscal year (beginning with 

fiscal year 2008 and ending with fiscal year 2012) the Secretary shall pay from amounts made available under subparagraph (E), to each State that meets the condition 

under paragraph (4) for the fiscal year, an amount equal 

to the amount described in subparagraph (B) for the State 

and fiscal year. The payment under this paragraph shall 

be made, to a State for a fiscal year, as a single payment 

not later than the last day of the first calendar quarter of 

the following fiscal year. ‘‘(B) AMOUNT.—Subject to subparagraph (E), the amount 

described in this subparagraph for a State for a fiscal year 

is equal to the sum of the following amounts: ‘‘(i) FOR ABOVE BASELINE MEDICAID CHILD ENROLL- MENT COSTS.—

‘‘(I) FIRST TIER ABOVE BASELINE MEDICAID ENROLLEES.—An amount equal to the number of first 


bajohnson on PROD1PC69 with REPORTS
15 

tier above baseline child enrollees (as determined 

under subparagraph (C)(i)) under title XIX for the 

State and fiscal year multiplied by 15 percent of 

the projected per capita State Medicaid expenditures (as determined under subparagraph (D)(i)) 

for the State and fiscal year under title XIX. ‘‘(II) SECOND TIER ABOVE BASELINE MEDICAID EN- ROLLEES.—An amount equal to the number of second tier above baseline child enrollees (as determined under subparagraph (C)(ii)) under title XIX 

for the State and fiscal year multiplied by 60 percent of the projected per capita State Medicaid expenditures (as determined under subparagraph 

(D)(i)) for the State and fiscal year under title 

XIX. ‘‘(ii) FOR ABOVE BASELINE CHIP ENROLLMENT

COSTS.—

‘‘(I) FIRST TIER ABOVE BASELINE CHIP ENROLLEES.—An amount equal to the number of first tier 

above baseline child enrollees under this title (as 

determined under subparagraph (C)(i)) for the 

State and fiscal year multiplied by 10 percent of 

the projected per capita State CHIP expenditures 

(as determined under subparagraph (D)(ii)) for the 

State and fiscal year under this title. 

‘‘(II) SECOND TIER ABOVE BASELINE CHIP ENROLL- EES.—An amount equal to the number of second 

tier above baseline child enrollees under this title 

(as determined under subparagraph (C)(ii)) for the 

State and fiscal year multiplied by 40 percent of 

the projected per capita State CHIP expenditures 

(as determined under subparagraph (D)(ii)) for the 

State and fiscal year under this title. ‘‘(C) NUMBER OF FIRST AND SECOND TIER ABOVE BASELINE

CHILD ENROLLEES; BASELINE NUMBER OF CHILD ENROLL- EES.—For purposes of this paragraph: 

‘‘(i) FIRST TIER ABOVE BASELINE CHILD ENROLLEES.— The number of first tier above baseline child enrollees 

for a State for a fiscal year under this title or title XIX 

is equal to the number (if any, as determined by the 

Secretary) by which— ‘‘(I) the monthly average unduplicated number 

of qualifying children (as defined in subparagraph 

(F)) enrolled during the fiscal year under the 

State child health plan under this title or under 

the State plan under title XIX, respectively; exceeds ‘‘(II) the baseline number of enrollees described 

in clause (iii) for the State and fiscal year under 

this title or title XIX, respectively; 

but not to exceed 3 percent (in the case of title XIX) 

or 7.5 percent (in the case of this title) of the baseline 

number of enrollees described in subclause (II). 

‘‘(ii) SECOND TIER ABOVE BASELINE CHILD ENROLLEES.—The number of second tier above baseline child 


bajohnson on PROD1PC69 with REPORTS
16 

enrollees for a State for a fiscal year under this title 

or title XIX is equal to the number (if any, as determined by the Secretary) by which— ‘‘(I) the monthly average unduplicated number 

of qualifying children (as defined in subparagraph 

(F)) enrolled during the fiscal year under this title 

or under title XIX, respectively, as described in 

clause (i)(I); exceeds ‘‘(II) the sum of the baseline number of child enrollees described in clause (iii) for the State and 

fiscal year under this title or title XIX, respectively, as described in clause (i)(II), and the maximum number of first tier above baseline child enrollees for the State and fiscal year under this 

title or title XIX, respectively, as determined 

under clause (i). ‘‘(iii) BASELINE NUMBER OF CHILD ENROLLEES.—Subject to subparagraph (H), the baseline number of child 

enrollees for a State under this title or title XIX—

‘‘(I) for fiscal year 2008 is equal to the monthly 

average unduplicated number of qualifying children enrolled in the State child health plan under 

this title or in the State plan under title XIX, respectively, during fiscal year 2007 increased by 

the population growth for children in that State 

for the year ending on June 30, 2006 (as estimated by the Bureau of the Census) plus 1 percentage point; or 

‘‘(II) for a subsequent fiscal year is equal to the 

baseline number of child enrollees for the State 

for the previous fiscal year under this title or title 

XIX, respectively, increased by the population 

growth for children in that State for the year ending on June 30 before the beginning of the fiscal 

year (as estimated by the Bureau of the Census) 

plus 1 percentage point. ‘‘(D) PROJECTED PER CAPITA STATE EXPENDITURES.—For 

purposes of subparagraph (B)— ‘‘(i) PROJECTED PER CAPITA STATE MEDICAID EXPENDI- TURES.—The projected per capita State Medicaid expenditures for a State and fiscal year under title XIX 

is equal to the average per capita expenditures (including both State and Federal financial participation) 

for children under the State plan under such title, including under waivers but not including such children 

eligible for assistance by virtue of the receipt of benefits under title XVI, for the most recent fiscal year for 

which actual data are available (as determined by the 

Secretary), increased (for each subsequent fiscal year 

up to and including the fiscal year involved) by the annual percentage increase in per capita amount of National Health Expenditures (as estimated by the Secretary) for the calendar year in which the respective 

subsequent fiscal year ends and multiplied by a State 

matching percentage equal to 100 percent minus the 


bajohnson on PROD1PC69 with REPORTS
17 

Federal medical assistance percentage (as defined in 

section 1905(b)) for the fiscal year involved. ‘‘(ii) PROJECTED PER CAPITA STATE CHIP EXPENDI- TURES.—The projected per capita State CHIP expenditures for a State and fiscal year under this title is 

equal to the average per capita expenditures (including both State and Federal financial participation) for 

children under the State child health plan under this 

title, including under waivers, for the most recent fiscal year for which actual data are available (as determined by the Secretary), increased (for each subsequent fiscal year up to and including the fiscal year involved) by the annual percentage increase in per capita amount of National Health Expenditures (as estimated by the Secretary) for the calendar year in which 

the respective subsequent fiscal year ends and multiplied by a State matching percentage equal to 100 percent minus the enhanced FMAP (as defined in section 

2105(b)) for the fiscal year involved. ‘‘(E) AMOUNTS AVAILABLE FOR PAYMENTS.—

‘‘(i) INITIAL APPROPRIATION.—Out of any money in 

the Treasury not otherwise appropriated, there are appropriated $3,000,000,000 for fiscal year 2008 for making payments under this paragraph, to be available 

until expended. ‘‘(ii) TRANSFERS.—Notwithstanding any other provision of this title, the following amounts shall also be 

available, without fiscal year limitation, for making 

payments under this paragraph: ‘‘(I) UNOBLIGATED NATIONAL ALLOTMENT.—

‘‘(aa) FISCAL YEARS 2008 THROUGH 2011.—As 

of December 31 of fiscal year 2008, and as of 

December 31 of each succeeding fiscal year 

through fiscal year 2011, the portion, if any, 

of the amount appropriated under subsection 

(a) for such fiscal year that is unobligated for 

allotment to a State under subsection (i) for 

such fiscal year or set aside under subsection 

(a)(3) or (b)(2) of section 2111 for such fiscal 

year. 

‘‘(bb) FIRST HALF OF FISCAL YEAR 2012.—As 

of December 31 of fiscal year 2012, the portion, if any, of the sum of the amounts appropriated under subsection (a)(15)(A) and under 

section 108 of the Children’s Health Insurance Reauthorization Act of 2007 for the period beginning on October 1, 2011, and ending 

on March 31, 2012, that is unobligated for allotment to a State under subsection (i) for 

such fiscal year or set aside under subsection 

(b)(2) of section 2111 for such fiscal year. ‘‘(cc) SECOND HALF OF FISCAL YEAR 2012.—As 

of June 30 of fiscal year 2012, the portion, if 

any, of the amount appropriated under subsection (a)(15)(B) for the period beginning on 


bajohnson on PROD1PC69 with REPORTS
18 

April 1, 2012, and ending on September 30, 

2012, that is unobligated for allotment to a 

State under subsection (i) for such fiscal year 

or set aside under subsection (b)(2) of section 

2111 for such fiscal year. ‘‘(II) UNEXPENDED ALLOTMENTS NOT USED FOR

REDISTRIBUTION.—As of November 15 of each of 

fiscal years 2009 through 2012, the total amount 

of allotments made to States under section 2104 

for the second preceding fiscal year (third preceding fiscal year in the case of the fiscal year 

2006 and 2007 allotments) that is not expended or 

redistributed under section 2104(f) during the period in which such allotments are available for obligation. ‘‘(III) EXCESS CHILD ENROLLMENT CONTINGENCY

FUNDS.—As of October 1 of each of fiscal years 

2009 through 2012, any amount in excess of the 

aggregate cap applicable to the Child Enrollment 

Contingency Fund for the fiscal year under section 

2104(j). 

‘‘(IV) UNEXPENDED TRANSITIONAL COVERAGE

BLOCK GRANT FOR NONPREGNANT CHILDLESS

ADULTS.—As of October 1, 2009, any amounts set 

aside under section 2111(a)(3) that are not expended by September 30, 2009. ‘‘(iii) PROPORTIONAL REDUCTION.—If the sum of the 

amounts otherwise payable under this paragraph for a 

fiscal year exceeds the amount available for the fiscal 

year under this subparagraph, the amount to be paid 

under this paragraph to each State shall be reduced 

proportionally. ‘‘(F) QUALIFYING CHILDREN DEFINED.—For purposes of 

this subsection, the term ‘qualifying children’ means, with 

respect to this title or title XIX, children who meet the eligibility criteria (including income, categorical eligibility, 

age, and immigration status criteria) in effect as of July 1, 

2007, for enrollment under this title or title XIX, respectively, taking into account criteria applied as of such date 

under this title or title XIX, respectively, pursuant to a 

waiver under section 1115. ‘‘(G) APPLICATION TO COMMONWEALTHS AND TERRITORIES.—The provisions of subparagraph (H) of section 

2104(j)(3) shall apply with respect to payments under this 

paragraph in the same manner as such provisions apply to 

payment under such section. 

‘‘(H) APPLICATION TO STATES THAT IMPLEMENT A MED- ICAID EXPANSION FOR CHILDREN AFTER FISCAL YEAR 2007.—

In the case of a State that provides coverage under paragraph (1) or (2) of section 115(b) of the Children’s Health 

Insurance Program Reauthorization Act of 2007 for any 

fiscal year after fiscal year 2007—

‘‘(i) any child enrolled in the State plan under title 

XIX through the application of such an election shall 

be disregarded from the determination for the State of 


bajohnson on PROD1PC69 with REPORTS
19 

the monthly average unduplicated number of qualifying children enrolled in such plan during the first 3 

fiscal years in which such an election is in effect; and ‘‘(ii) in determining the baseline number of child enrollees for the State for any fiscal year subsequent to 

such first 3 fiscal years, the baseline number of child 

enrollees for the State under this title or title XIX for 

the third of such fiscal years shall be the monthly average unduplicated number of qualifying children enrolled in the State child health plan under this title or 

in the State plan under title XIX, respectively, for 

such third fiscal year. ‘‘(4) ENROLLMENT AND RETENTION PROVISIONS FOR CHILDREN.—For purposes of paragraph (3)(A), a State meets the 

condition of this paragraph for a fiscal year if it is implementing at least 4 of the following enrollment and retention 

provisions (treating each subparagraph as a separate enrollment and retention provision) throughout the entire fiscal 

year: 

‘‘(A) CONTINUOUS ELIGIBILITY.—The State has elected 

the option of continuous eligibility for a full 12 months for 

all children described in section 1902(e)(12) under title XIX 

under 19 years of age, as well as applying such policy 

under its State child health plan under this title. 

‘‘(B) LIBERALIZATION OF ASSET REQUIREMENTS.—The 

State meets the requirement specified in either of the following clauses: ‘‘(i) ELIMINATION OF ASSET TEST.—The State does not 

apply any asset or resource test for eligibility for children under title XIX or this title. ‘‘(ii) ADMINISTRATIVE VERIFICATION OF ASSETS.—The 

State—

‘‘(I) permits a parent or caretaker relative who 

is applying on behalf of a child for medical assistance under title XIX or child health assistance 

under this title to declare and certify by signature 

under penalty of perjury information relating to 

family assets for purposes of determining and redetermining financial eligibility; and 

‘‘(II) takes steps to verify assets through means 

other than by requiring documentation from parents and applicants except in individual cases of 

discrepancies or where otherwise justified. 

‘‘(C) ELIMINATION OF IN-PERSON INTERVIEW REQUIREMENT.—The State does not require an application of a 

child for medical assistance under title XIX (or for child 

health assistance under this title), including an application 

for renewal of such assistance, to be made in person nor 

does the State require a face-to-face interview, unless 

there are discrepancies or individual circumstances justifying an in-person application or face-to-face interview. ‘‘(D) USE OF JOINT APPLICATION FOR MEDICAID AND

CHIP.—The application form and supplemental forms (if 

any) and information verification process is the same for 

purposes of establishing and renewing eligibility for chilVerDate Aug 31 2005 05:23 Sep 25, 2007 Jkt 059008 PO 00000 Frm 00021 Fmt 6659 Sfmt 6602 E:\HR\OC\HR346.XXX HR346

bajohnson on PROD1PC69 with REPORTS
20 

dren for medical assistance under title XIX and child 

health assistance under this title. 

‘‘(E) AUTOMATIC RENEWAL (USE OF ADMINISTRATIVE RENEWAL).—

‘‘(i) IN GENERAL.—The State provides, in the case of 

renewal of a child’s eligibility for medical assistance 

under title XIX or child health assistance under this 

title, a pre-printed form completed by the State based 

on the information available to the State and notice to 

the parent or caretaker relative of the child that eligibility of the child will be renewed and continued based 

on such information unless the State is provided other 

information. Nothing in this clause shall be construed 

as preventing a State from verifying, through electronic and other means, the information so provided. 

‘‘(ii) SATISFACTION THROUGH DEMONSTRATED USE OF

EX PARTE PROCESS.—A State shall be treated as satisfying the requirement of clause (i) if renewal of eligibility of children under title XIX or this title is determined without any requirement for an in-person interview, unless sufficient information is not in the State’s 

possession and cannot be acquired from other sources 

(including other State agencies) without the participation of the applicant or the applicant’s parent or caretaker relative. 

‘‘(F) PRESUMPTIVE ELIGIBILITY FOR CHILDREN.—The State 

is implementing section 1920A under title XIX as well as, 

pursuant to section 2107(e)(1), under this title. 

‘‘(G) EXPRESS LANE.—The State is implementing the option described in section 1902(e)(13) under title XIX as 

well as, pursuant to section 2107(e)(1), under this title.’’. 

SEC. 105. 2–YEAR INITIAL AVAILABILITY OF CHIP ALLOTMENTS. 

Section 2104(e) (42 U.S.C. 1397dd(e)) is amended to read as follows: 

‘‘(e) AVAILABILITY OF AMOUNTS ALLOTTED.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), 

amounts allotted to a State pursuant to this section—

‘‘(A) for each of fiscal years 1998 through 2007, shall remain available for expenditure by the State through the 

end of the second succeeding fiscal year; and 

‘‘(B) for fiscal year 2008 and each fiscal year thereafter, 

shall remain available for expenditure by the State 

through the end of the succeeding fiscal year. 

‘‘(2) AVAILABILITY OF AMOUNTS REDISTRIBUTED.—Amounts redistributed to a State under subsection (f) shall be available for 

expenditure by the State through the end of the fiscal year in 

which they are redistributed.’’. 

SEC. 106. REDISTRIBUTION OF UNUSED ALLOTMENTS TO ADDRESS 

STATE FUNDING SHORTFALLS. 

(a) FISCAL YEAR 2005 ALLOTMENTS.— (1) IN GENERAL.—Notwithstanding section 2104(f) of the Social Security Act (42 U.S.C. 1397dd(f)), subject to paragraph 

(2), with respect to fiscal year 2008, the Secretary shall provide 

for a redistribution under such section from the allotments for 


bajohnson on PROD1PC69 with REPORTS
21 

fiscal year 2005 under subsection (b) and (c) of such section 

that are not expended by the end of fiscal year 2007, to each 

State described in clause (iii) of section 2104(i)(1)(A) of the Social Security Act, as added by section 102, of an amount that 

bears the same ratio to such unexpended fiscal year 2005 allotments as the ratio of the fiscal year 2007 allotment determined 

for each such State under subsection (b) of section 2104 of such 

Act for fiscal year 2007 (without regard to any amounts paid, 

allotted, or redistributed to the State under section 2104 for 

any preceding fiscal year) bears to the total amount of the fiscal year 2007 allotments for all such States (as so determined). 

(2) CONTINGENCY.—Paragraph (1) shall not apply if the redistribution described in such paragraph has occurred as of the 

date of the enactment of this Act. 

(b) ALLOTMENTS FOR SUBSEQUENT FISCAL YEARS.—Section 

2104(f) (42 U.S.C. 1397dd(f)) is amended—

(1) by striking ‘‘The Secretary’’ and inserting the following: 

‘‘(1) IN GENERAL.—The Secretary’’; 

(2) by striking ‘‘States that have fully expended the amount 

of their allotments under this section.’’ and inserting ‘‘States 

that the Secretary determines with respect to the fiscal year 

for which unused allotments are available for redistribution 

under this subsection, are shortfall States described in paragraph (2) for such fiscal year, but not to exceed the amount of 

the shortfall described in paragraph (2)(A) for each such State 

(as may be adjusted under paragraph (2)(C)).’’; and 

(3) by adding at the end the following new paragraph: 

‘‘(2) SHORTFALL STATES DESCRIBED.— ‘‘(A) IN GENERAL.—For purposes of paragraph (1), with 

respect to a fiscal year, a shortfall State described in this 

subparagraph 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, that the projected expenditures under such plan for 

the State for the fiscal year will exceed the sum of— ‘‘(i) the amount of the State’s allotments for any preceding fiscal years that remains available for expenditure and that will not be expended by the end of the 

immediately preceding fiscal year; ‘‘(ii) the amount (if any) of the child enrollment contingency fund payment under subsection (j); and ‘‘(iii) the amount of the State’s allotment for the fiscal year. ‘‘(B) PRORATION RULE.—If the amounts available for redistribution under paragraph (1) for a fiscal year are less 

than the total amounts of the estimated shortfalls determined for the year under subparagraph (A), the amount to 

be redistributed under such paragraph for each shortfall 

State shall be reduced proportionally. ‘‘(C) RETROSPECTIVE ADJUSTMENT.—The Secretary may 

adjust the estimates and determinations made under paragraph (1) and this paragraph with respect to a fiscal year 

as necessary on the basis of the amounts reported by 

States not later than November 30 of the succeeding fiscal 

year, as approved by the Secretary.’’. 


bajohnson on PROD1PC69 with REPORTS
22 

SEC. 107. OPTION FOR QUALIFYING STATES TO RECEIVE THE ENHANCED PORTION OF THE CHIP MATCHING RATE FOR 

MEDICAID COVERAGE OF CERTAIN CHILDREN. 

Section 2105(g) (42 U.S.C. 1397ee(g)) is amended— (1) in paragraph (1)(A), by inserting ‘‘subject to paragraph 

(4),’’ after ‘‘Notwithstanding any other provision of law,’’; and 

(2) by adding at the end the following new paragraph: 

‘‘(4) OPTION FOR ALLOTMENTS FOR FISCAL YEARS 2008

THROUGH 2012.— ‘‘(A) PAYMENT OF ENHANCED PORTION OF MATCHING RATE

FOR CERTAIN EXPENDITURES.—In the case of expenditures 

described in subparagraph (B), a qualifying State (as defined in paragraph (2)) may elect to be paid from the 

State’s allotment made under section 2104 for any of fiscal 

years 2008 through 2012 (insofar as the allotment is available to the State under subsections (e) and (i) of such section) an amount each quarter equal to the additional 

amount that would have been paid to the State under title 

XIX with respect to such expenditures if the enhanced 

FMAP (as determined under subsection (b)) had been substituted for the Federal medical assistance percentage (as 

defined in section 1905(b)). 

‘‘(B) EXPENDITURES DESCRIBED.—For purposes of subparagraph (A), the expenditures described in this subparagraph are expenditures made after the date of the enactment of this paragraph and during the period in which 

funds are available to the qualifying State for use under 

subparagraph (A), for the provision of medical assistance 

to individuals residing in the State who are eligible for 

medical assistance under the State plan under title XIX or 

under a waiver of such plan and who have not attained 

age 19 (or, if a State has so elected under the State plan 

under title XIX, age 20 or 21), and whose family income 

equals or exceeds 133 percent of the poverty line but does 

not exceed the Medicaid applicable income level.’’. 

SEC. 108. ONE-TIME APPROPRIATION. 

There is appropriated to the Secretary, out of any money in the Treasury not otherwise appropriated, $12,500,000,000 to accompany the allotment made for the period beginning on October 1, 

2011, and ending on March 31, 2012, under section 2104(a)(15)(A) 

of the Social Security Act (42 U.S.C. 1397dd(a)(15)(A)) (as added by 

section 101), to remain available until expended. Such amount 

shall be used to provide allotments to States under paragraph (3) 

of section 2104(i) of the Social Security Act (42 U.S.C. 1397dd(i)), 

as added by section 102, for the first 6 months of fiscal year 2012 

in the same manner as allotments are provided under subsection 

(a)(15)(A) of such section 2104 and subject to the same terms and 

conditions as apply to the allotments provided from such subsection 

(a)(15)(A). 

SEC. 109. IMPROVING FUNDING FOR THE TERRITORIES UNDER CHIP 

AND MEDICAID. 

(a) REMOVAL OF FEDERAL MATCHING PAYMENTS FOR DATA REPORTING SYSTEMS FROM THE OVERALL LIMIT ON PAYMENTS TO TERRITORIES UNDER TITLE XIX.—Section 1108(g) (42 U.S.C. 1308(g)) is 

amended by adding at the end the following new paragraph: 


bajohnson on PROD1PC69 with REPORTS
23 

‘‘(4) EXCLUSION OF CERTAIN EXPENDITURES FROM PAYMENT

LIMITS.—With respect to fiscal years beginning with fiscal year 

2008, if Puerto Rico, the Virgin Islands, Guam, the Northern 

Mariana Islands, or American Samoa qualify for a payment 

under subparagraph (A)(i), (B), or (F) of section 1903(a)(3) for 

a calendar quarter of such fiscal year, the payment shall not 

be taken into account in applying subsection (f) (as increased 

in accordance with paragraphs (1), (2), and (3) of this subsection) to such commonwealth or territory for such fiscal 

year.’’. 

(b) GAO STUDY AND REPORT.—Not later than September 30, 

2009, the Comptroller General of the United States shall submit a 

report to the Committee on Finance of the Senate and the Committee on Energy and Commerce of the House of Representatives 

regarding Federal funding under Medicaid and CHIP for Puerto 

Rico, the United States Virgin Islands, Guam, American Samoa, 

and the Northern Mariana Islands. The report shall include the following: 

(1) An analysis of all relevant factors with respect to—

(A) eligible Medicaid and CHIP populations in such commonwealths and territories; 

(B) historical and projected spending needs of such commonwealths and territories and the ability of capped funding streams to respond to those spending needs; 

(C) the extent to which Federal poverty guidelines are 

used by such commonwealths and territories to determine 

Medicaid and CHIP eligibility; and 

(D) the extent to which such commonwealths and territories participate in data collection and reporting related 

to Medicaid and CHIP, including an analysis of territory 

participation in the Current Population Survey versus the 

American Community Survey. 

(2) Recommendations regarding methods for the collection 

and reporting of reliable data regarding the enrollment under 

Medicaid and CHIP of children in such commonwealths and 

territories 

(3) Recommendations for improving Federal funding under 

Medicaid and CHIP for such commonwealths and territories. 

Subtitle B—Focus on Low-Income Children 

and Pregnant Women 

SEC. 111. STATE OPTION TO COVER LOW-INCOME PREGNANT WOMEN 

UNDER CHIP THROUGH A STATE PLAN AMENDMENT. 

(a) IN GENERAL.—Title XXI (42 U.S.C. 1397aa et seq.), as amended by section 112(a), is amended by adding at the end the following 

new section: 

‘‘SEC. 2112. OPTIONAL COVERAGE OF TARGETED LOW-INCOME PREGNANT WOMEN THROUGH A STATE PLAN AMENDMENT. 

‘‘(a) IN GENERAL.—Subject to the succeeding provisions of this 

section, a State may elect through an amendment to its State child 

health plan under section 2102 to provide pregnancy-related assistance under such plan for targeted low-income pregnant women. 


bajohnson on PROD1PC69 with REPORTS
24 

‘‘(b) CONDITIONS.—A State may only elect the option under subsection (a) if the following conditions are satisfied: ‘‘(1) MINIMUM INCOME ELIGIBILITY LEVELS FOR PREGNANT

WOMEN AND CHILDREN.—The State has established an income 

eligibility level— ‘‘(A) for pregnant women under subsection 

(a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), or (l)(1)(A) of section 1902 

that is at least 185 percent (or such higher percent as the 

State has in effect with regard to pregnant women under 

this title) of the poverty line applicable to a family of the 

size involved, but in no case lower than the percent in effect under any such subsection as of July 1, 2007; and ‘‘(B) for children under 19 years of age under this title 

(or title XIX) that is at least 200 percent of the poverty 

line applicable to a family of the size involved. ‘‘(2) NO CHIP INCOME ELIGIBILITY LEVEL FOR PREGNANT

WOMEN LOWER THAN THE STATE’S MEDICAID LEVEL.—The State 

does not apply an effective income level for pregnant women 

under the State plan amendment that is lower than the effective income level (expressed as a percent of the poverty line 

and considering applicable income disregards) specified under 

subsection (a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), or (l)(1)(A) of section 1902, on the date of enactment of this paragraph to be eligible for medical assistance as a pregnant woman. 

‘‘(3) NO COVERAGE FOR HIGHER INCOME PREGNANT WOMEN

WITHOUT COVERING LOWER INCOME PREGNANT WOMEN.—The 

State does not provide coverage for pregnant women with higher family income without covering pregnant women with a 

lower family income. ‘‘(4) APPLICATION OF REQUIREMENTS FOR COVERAGE OF TAR- GETED LOW-INCOME CHILDREN.—The State provides pregnancyrelated assistance for targeted low-income pregnant women in 

the same manner, and subject to the same requirements, as 

the State provides child health assistance for targeted low-income children under the State child health plan, and in addition to providing child health assistance for such women. 

‘‘(5) NO PREEXISTING CONDITION EXCLUSION OR WAITING PE- RIOD.—The State does not apply any exclusion of benefits for 

pregnancy-related assistance based on any preexisting condition or any waiting period (including any waiting period imposed to carry out section 2102(b)(3)(C)) for receipt of such assistance. ‘‘(6) APPLICATION OF COST-SHARING PROTECTION.—The State 

provides pregnancy-related assistance to a targeted low-income 

woman consistent with the cost-sharing protections under section 2103(e) and applies the limitation on total annual aggregate cost sharing imposed under paragraph (3)(B) of such section to the family of such a woman. 

‘‘(7) NO WAITING LIST FOR CHILDREN.—The State does not impose, with respect to the enrollment under the State child 

health plan of targeted low-income children during the quarter, 

any enrollment cap or other numerical limitation on enrollment, any waiting list, any procedures designed to delay the 

consideration of applications for enrollment, or similar limitation with respect to enrollment. 


bajohnson on PROD1PC69 with REPORTS
25 

‘‘(c) OPTION TO PROVIDE PRESUMPTIVE ELIGIBILITY.—A State that 

elects the option under subsection (a) and satisfies the conditions 

described in subsection (b) may elect to apply section 1920 (relating 

to presumptive eligibility for pregnant women) to the State child 

health plan in the same manner as such section applies to the 

State plan under title XIX. 

‘‘(d) DEFINITIONS.—For purposes of this section: 

‘‘(1) PREGNANCY-RELATED ASSISTANCE.—The term ‘pregnancyrelated assistance’ has the meaning given the term ‘child 

health assistance’ in section 2110(a) and includes any medical 

assistance that the State would provide for a pregnant woman 

under the State plan under title XIX during the period described in paragraph (2)(A). 

‘‘(2) TARGETED LOW-INCOME PREGNANT WOMAN.—The term 

‘targeted low-income pregnant woman’ means a woman—

‘‘(A) during pregnancy and through the end of the month 

in which the 60–day period (beginning on the last day of 

her pregnancy) ends; 

‘‘(B) whose family income exceeds 185 percent (or, if 

higher, the percent applied under subsection (b)(1)(A)) of 

the poverty line applicable to a family of the size involved, 

but does not exceed the income eligibility level established 

under the State child health plan under this title for a targeted low-income child; and 

‘‘(C) who satisfies the requirements of paragraphs (1)(A), 

(1)(C), (2), and (3) of section 2110(b) in the same manner 

as a child applying for child health assistance would have 

to satisfy such requirements. 

‘‘(e) AUTOMATIC ENROLLMENT FOR CHILDREN BORN TO WOMEN

RECEIVING PREGNANCY-RELATED ASSISTANCE.—If a child is born to 

a targeted low-income pregnant woman who was receiving pregnancy-related assistance under this section on the date of the 

child’s birth, the child shall be deemed to have applied for child 

health assistance under the State child health plan and to have 

been found eligible for such assistance under such plan or to have 

applied for medical assistance under title XIX and to have been 

found eligible for such assistance under such title, as appropriate, 

on the date of such birth and to remain eligible for such assistance 

until the child attains 1 year of age. During the period in which 

a child is deemed under the preceding sentence to be eligible for 

child health or medical assistance, the child health or medical assistance eligibility identification number of the mother shall also 

serve as the identification number of the child, and all claims shall 

be submitted and paid under such number (unless the State issues 

a separate identification number for the child before such period 

expires). 

‘‘(f) STATES PROVIDING ASSISTANCE THROUGH OTHER OPTIONS.—

‘‘(1) CONTINUATION OF OTHER OPTIONS FOR PROVIDING ASSISTANCE.—The option to provide assistance in accordance with the 

preceding subsections of this section shall not limit any other 

option for a State to provide—

‘‘(A) child health assistance through the application of 

sections 457.10, 457.350(b)(2), 457.622(c)(5), and 

457.626(a)(3) of title 42, Code of Federal Regulations (as in 


bajohnson on PROD1PC69 with REPORTS
26 

effect after the final rule adopted by the Secretary and set 

forth at 67 Fed. Reg. 61956–61974 (October 2, 2002)), or 

‘‘(B) pregnancy-related services through the application 

of any waiver authority (as in effect on June 1, 2007). 

‘‘(2) CLARIFICATION OF AUTHORITY TO PROVIDE POSTPARTUM

SERVICES.—Any State that provides child health assistance 

under any authority described in paragraph (1) may continue 

to provide such assistance, as well as postpartum services, 

through the end of the month in which the 60–day period (beginning on the last day of the pregnancy) ends, in the same 

manner as such assistance and postpartum services would be 

provided if provided under the State plan under title XIX, but 

only if the mother would otherwise satisfy the eligibility requirements that apply under the State child health plan (other 

than with respect to age) during such period. 

‘‘(3) NO INFERENCE.—Nothing in this subsection shall be construed—

‘‘(A) to infer congressional intent regarding the legality 

or illegality of the content of the sections specified in paragraph (1)(A); or 

‘‘(B) to modify the authority to provide pregnancy-related 

services under a waiver specified in paragraph (1)(B).’’. 

(b) ADDITIONAL CONFORMING AMENDMENTS.—

(1) NO COST SHARING FOR PREGNANCY-RELATED BENEFITS.—

Section 2103(e)(2) (42 U.S.C. 1397cc(e)(2)) is amended—

(A) in the heading, by inserting ‘‘OR PREGNANCY-RELATED ASSISTANCE’’ after ‘‘PREVENTIVE SERVICES’’; and 

(B) by inserting before the period at the end the following: ‘‘or for pregnancy-related assistance’’. 

(2) NO WAITING PERIOD.—Section 2102(b)(1)(B) (42 U.S.C. 

1397bb(b)(1)(B)) is amended—

(A) in clause (i), by striking ‘‘, and’’ at the end and inserting a semicolon; 

(B) in clause (ii), by striking the period at the end and 

inserting ‘‘; and’’; and 

(C) by adding at the end the following new clause: 

‘‘(iii) may not apply a waiting period (including a 

waiting period to carry out paragraph (3)(C)) in the 

case of a targeted low-income pregnant woman provided pregnancy-related assistance under section 

2112.’’. 

SEC. 112. PHASE-OUT OF COVERAGE FOR NONPREGNANT CHILDLESS 

ADULTS UNDER CHIP; CONDITIONS FOR COVERAGE OF 

PARENTS. 

(a) PHASE-OUT RULES.—

(1) IN GENERAL.—Title XXI (42 U.S.C. 1397aa et seq.) is 

amended by adding at the end the following new section: 

‘‘SEC. 2111. PHASE-OUT OF COVERAGE FOR NONPREGNANT CHILDLESS ADULTS; CONDITIONS FOR COVERAGE OF PARENTS. 

‘‘(a) TERMINATION OF COVERAGE FOR NONPREGNANT CHILDLESS

ADULTS.—

‘‘(1) NO NEW CHIP WAIVERS; AUTOMATIC EXTENSIONS AT STATE

OPTION THROUGH FISCAL YEAR 2008.—Notwithstanding section 


bajohnson on PROD1PC69 with REPORTS
27 

1115 or any other provision of this title, except as provided in 

this subsection— ‘‘(A) the Secretary shall not on or after the date of the 

enactment of the Children’s Health Insurance Program Reauthorization Act of 2007, approve or renew a waiver, experimental, pilot, or demonstration project that would 

allow funds made available under this title to be used to 

provide child health assistance or other health benefits 

coverage to a nonpregnant childless adult; and ‘‘(B) notwithstanding the terms and conditions of an applicable existing waiver, the provisions of paragraphs (2) 

and (3) shall apply for purposes of any fiscal year beginning on or after October 1, 2008, in determining the period 

to which the waiver applies, the individuals eligible to be 

covered by the waiver, and the amount of the Federal payment under this title. ‘‘(2) TERMINATION OF CHIP COVERAGE UNDER APPLICABLE EX- ISTING WAIVERS AT THE END OF FISCAL YEAR 2008.— ‘‘(A) IN GENERAL.—No funds shall be available under 

this title for child health assistance or other health benefits coverage that is provided to a nonpregnant childless 

adult under an applicable existing waiver after September 

30, 2008. 

‘‘(B) EXTENSION UPON STATE REQUEST.—If an applicable 

existing waiver described in subparagraph (A) would otherwise expire before October 1, 2008, and the State requests an extension of such waiver, the Secretary shall 

grant such an extension, but only through September 30, 

2008. ‘‘(C) APPLICATION OF ENHANCED FMAP.—The enhanced 

FMAP determined under section 2105(b) shall apply to expenditures under an applicable existing waiver for the provision of child health assistance or other health benefits 

coverage to a nonpregnant childless adult during fiscal 

year 2008. ‘‘(3) OPTIONAL 1–YEAR TRANSITIONAL COVERAGE BLOCK GRANT

FUNDED FROM STATE ALLOTMENT.—Subject to paragraph (4)(B), 

each State for which coverage under an applicable existing 

waiver is terminated under paragraph (2)(A) may elect to provide nonpregnant childless adults who were provided child 

health assistance or health benefits coverage under the applicable existing waiver at any time during fiscal year 2008 with 

such assistance or coverage during fiscal year 2009, as if the 

authority to provide such assistance or coverage under an applicable existing waiver was extended through that fiscal year, 

but subject to the following terms and conditions: ‘‘(A) BLOCK GRANT SET ASIDE FROM STATE ALLOTMENT.—

The Secretary shall set aside for the State an amount 

equal to the Federal share of the State’s projected expenditures under the applicable existing waiver for providing 

child health assistance or health benefits coverage to all 

nonpregnant childless adults under such waiver for fiscal 

year 2008 (as certified by the State and submitted to the 

Secretary by not later than August 31, 2008, and without 

regard to whether any such individual lost coverage during 


bajohnson on PROD1PC69 with REPORTS
28 

fiscal year 2008 and was later provided child health assistance or other health benefits coverage under the waiver in 

that fiscal year), increased by the annual adjustment for 

fiscal year 2009 determined under section 2104(i)(5)(A). 

The Secretary may adjust the amount set aside under the 

preceding sentence, as necessary, on the basis of the expenditure data for fiscal year 2008 reported by States on 

CMS Form 64 or CMS Form 21 not later than November 

30, 2008, but in no case shall the Secretary adjust such 

amount after December 31, 2008. 

‘‘(B) NO COVERAGE FOR NONPREGNANT CHILDLESS ADULTS

WHO WERE NOT COVERED DURING FISCAL YEAR 2008.—

‘‘(i) FMAP APPLIED TO EXPENDITURES.—The Secretary shall pay the State for each quarter of fiscal 

year 2009, from the amount set aside under subparagraph (A), an amount equal to the Federal medical assistance percentage (as determined under section 

1905(b) without regard to clause (4) of such section) of 

expenditures in the quarter for providing child health 

assistance or other health benefits coverage to a nonpregnant childless adult but only if such adult was enrolled in the State program under this title during fiscal year 2008 (without regard to whether the individual lost coverage during fiscal year 2008 and was 

reenrolled in that fiscal year or in fiscal year 2009). 

‘‘(ii) FEDERAL PAYMENTS LIMITED TO AMOUNT OF

BLOCK GRANT SET-ASIDE.—No payments shall be made 

to a State for expenditures described in this subparagraph after the total amount set aside under subparagraph (A) for fiscal year 2009 has been paid to the 

State. 

‘‘(4) STATE OPTION TO APPLY FOR MEDICAID WAIVER TO CONTINUE COVERAGE FOR NONPREGNANT CHILDLESS ADULTS.—

‘‘(A) IN GENERAL.—Each State for which coverage under 

an applicable existing waiver is terminated under paragraph (2)(A) may submit, not later than June 30, 2009, an 

application to the Secretary for a waiver under section 

1115 of the State plan under title XIX to provide medical 

assistance to a nonpregnant childless adult whose coverage 

is so terminated (in this subsection referred to as a ‘Medicaid nonpregnant childless adults waiver’). 

‘‘(B) DEADLINE FOR APPROVAL.—The Secretary shall 

make a decision to approve or deny an application for a 

Medicaid nonpregnant childless adults waiver submitted 

under subparagraph (A) within 90 days of the date of the 

submission of the application. If no decision has been made 

by the Secretary as of September 30, 2009, on the application of a State for a Medicaid nonpregnant childless adults 

waiver that was submitted to the Secretary by June 30, 

2009, the application shall be deemed approved. 

‘‘(C) STANDARD FOR BUDGET NEUTRALITY.—The budget 

neutrality requirement applicable with respect to expenditures for medical assistance under a Medicaid nonpregnant childless adults waiver shall—


bajohnson on PROD1PC69 with REPORTS
29 

‘‘(i) in the case of fiscal year 2010, allow expenditures for medical assistance under title XIX for all 

such adults to not exceed the total amount of payments made to the State under paragraph (3)(B) for 

fiscal year 2009, increased by the percentage increase 

(if any) in the projected nominal per capita amount of 

National Health Expenditures for calendar year 2010 

over calendar year 2009, as most recently published by 

the Secretary; and ‘‘(ii) in the case of any succeeding fiscal year, allow 

such expenditures to not exceed the amount in effect 

under this subparagraph for the preceding fiscal year, 

increased by the percentage increase (if any) in the 

projected nominal per capita amount of National 

Health Expenditures for the calendar year that begins 

during the fiscal year involved over the preceding calendar year, as most recently published by the Secretary. ‘‘(b) RULES AND CONDITIONS FOR COVERAGE OF PARENTS OF TARGETED LOW-INCOME CHILDREN.—

‘‘(1) TWO-YEAR TRANSITION PERIOD; AUTOMATIC EXTENSION AT

STATE OPTION THROUGH FISCAL YEAR 2009.— ‘‘(A) NO NEW CHIP WAIVERS.—Notwithstanding section 

1115 or any other provision of this title, except as provided 

in this subsection— ‘‘(i) the Secretary shall not on or after the date of 

the enactment of the Children’s Health Insurance Program Reauthorization Act of 2007 approve or renew a 

waiver, experimental, pilot, or demonstration project 

that would allow funds made available under this title 

to be used to provide child health assistance or other 

health benefits coverage to a parent of a targeted lowincome child; and ‘‘(ii) notwithstanding the terms and conditions of an 

applicable existing waiver, the provisions of paragraphs (2) and (3) shall apply for purposes of any fiscal year beginning on or after October 1, 2009, in determining the period to which the waiver applies, the 

individuals eligible to be covered by the waiver, and 

the amount of the Federal payment under this title. 

‘‘(B) EXTENSION UPON STATE REQUEST.—If an applicable 

existing waiver described in subparagraph (A) would otherwise expire before October 1, 2009, and the State requests an extension of such waiver, the Secretary shall 

grant such an extension, but only, subject to paragraph 

(2)(A), through September 30, 2009. 

‘‘(C) APPLICATION OF ENHANCED FMAP.—The enhanced 

FMAP determined under section 2105(b) shall apply to expenditures under an applicable existing waiver for the provision of child health assistance or other health benefits 

coverage to a parent of a targeted low-income child during 

fiscal years 2008 and 2009. ‘‘(2) RULES FOR FISCAL YEARS 2010 THROUGH 2012.—

‘‘(A) PAYMENTS FOR COVERAGE LIMITED TO BLOCK GRANT

FUNDED FROM STATE ALLOTMENT.—Any State that provides 


bajohnson on PROD1PC69 with REPORTS
30 

child health assistance or health benefits coverage under 

an applicable existing waiver for a parent of a targeted 

low-income child may elect to continue to provide such assistance or coverage through fiscal year 2010, 2011, or 

2012, subject to the same terms and conditions that applied under the applicable existing waiver, unless otherwise modified in subparagraph (B). 

‘‘(B) TERMS AND CONDITIONS.—

‘‘(i) BLOCK GRANT SET ASIDE FROM STATE ALLOTMENT.—If the State makes an election under subparagraph (A), the Secretary shall set aside for the State 

for each such fiscal year an amount equal to the Federal share of 110 percent of the State’s projected expenditures under the applicable existing waiver for 

providing child health assistance or health benefits 

coverage to all parents of targeted low-income children 

enrolled under such waiver for the fiscal year (as certified by the State and submitted to the Secretary by 

not later than August 31 of the preceding fiscal year). 

In the case of fiscal year 2012, the set aside for any 

State shall be computed separately for each period described in subparagraphs (A) and (B) of section 

2104(a)(15) and any reduction in the allotment for either such period under section 2104(i)(4) shall be allocated on a pro rata basis to such set aside. 

‘‘(ii) PAYMENTS FROM BLOCK GRANT.—The Secretary 

shall pay the State from the amount set aside under 

clause (i) for the fiscal year, an amount for each quarter of such fiscal year equal to the applicable percentage determined under clause (iii) or (iv) for expenditures in the quarter for providing child health assistance or other health benefits coverage to a parent of 

a targeted low-income child. 

‘‘(iii) ENHANCED FMAP ONLY IN FISCAL YEAR 2010 FOR

STATES WITH SIGNIFICANT CHILD OUTREACH OR THAT

ACHIEVE CHILD COVERAGE BENCHMARKS; FMAP FOR ANY

OTHER STATES.—For purposes of clause (ii), the applicable percentage for any quarter of fiscal year 2010 is 

equal to—

‘‘(I) the enhanced FMAP determined under section 2105(b) in the case of a State that meets the 

outreach or coverage benchmarks described in any 

of subparagraphs (A), (B), or (C) of paragraph (3) 

for fiscal year 2009; or 

‘‘(II) the Federal medical assistance percentage 

(as determined under section 1905(b) without regard to clause (4) of such section) in the case of 

any other State. 

‘‘(iv) AMOUNT OF FEDERAL MATCHING PAYMENT IN

2011 OR 2012.—For purposes of clause (ii), the applicable percentage for any quarter of fiscal year 2011 or 

2012 is equal to—

‘‘(I) the REMAP percentage if—


bajohnson on PROD1PC69 with REPORTS
31 

‘‘(aa) the applicable percentage for the State 

under clause (iii) was the enhanced FMAP for 

fiscal year 2009; and ‘‘(bb) the State met either of the coverage 

benchmarks described in subparagraph (B) or 

(C) of paragraph (3) for the preceding fiscal 

year; or ‘‘(II) the Federal medical assistance percentage 

(as so determined) in the case of any State to 

which subclause (I) does not apply. 

For purposes of subclause (I), the REMAP percentage 

is the percentage which is the sum of such Federal 

medical assistance percentage and a number of percentage points equal to one-half of the difference between such Federal medical assistance percentage and 

such enhanced FMAP. ‘‘(v) NO FEDERAL PAYMENTS OTHER THAN FROM

BLOCK GRANT SET ASIDE.—No payments shall be made 

to a State for expenditures described in clause (ii) 

after the total amount set aside under clause (i) for a 

fiscal year has been paid to the State. ‘‘(vi) NO INCREASE IN INCOME ELIGIBILITY LEVEL FOR

PARENTS.—No payments shall be made to a State from 

the amount set aside under clause (i) for a fiscal year 

for expenditures for providing child health assistance 

or health benefits coverage to a parent of a targeted 

low-income child whose family income exceeds the income eligibility level applied under the applicable existing waiver to parents of targeted low-income children on the date of enactment of the Children’s Health 

Insurance Program Reauthorization Act of 2007. ‘‘(3) OUTREACH OR COVERAGE BENCHMARKS.—For purposes of 

paragraph (2), the outreach or coverage benchmarks described 

in this paragraph are as follows: ‘‘(A) SIGNIFICANT CHILD OUTREACH CAMPAIGN.—The 

State—

‘‘(i) was awarded a grant under section 2113 for fiscal year 2009; ‘‘(ii) implemented 1 or more of the enrollment and 

retention provisions described in section 2105(a)(4) for 

such fiscal year; or ‘‘(iii) has submitted a specific plan for outreach for 

such fiscal year. ‘‘(B) HIGH-PERFORMING STATE.—The State, on the basis 

of the most timely and accurate published estimates of the 

Bureau of the Census, ranks in the lowest 1⁄3 of States in 

terms of the State’s percentage of low-income children 

without health insurance. 

‘‘(C) STATE INCREASING ENROLLMENT OF LOW-INCOME

CHILDREN.—The State qualified for a performance bonus 

payment under section 2105(a)(3)(B) for the most recent 

fiscal year applicable under such section. 

‘‘(4) RULES OF CONSTRUCTION.—Nothing in this subsection 

shall be construed as prohibiting a State from submitting an 

application to the Secretary for a waiver under section 1115 of 


bajohnson on PROD1PC69 with REPORTS
32 

the State plan under title XIX to provide medical assistance to 

a parent of a targeted low-income child that was provided child 

health assistance or health benefits coverage under an applicable existing waiver. 

‘‘(c) APPLICABLE EXISTING WAIVER.—For purposes of this section—

‘‘(1) IN GENERAL.—The term ‘applicable existing waiver’

means a waiver, experimental, pilot, or demonstration project 

under section 1115, grandfathered under section 6102(c)(3) of 

the Deficit Reduction Act of 2005, or otherwise conducted 

under authority that—

‘‘(A) would allow funds made available under this title to 

be used to provide child health assistance or other health 

benefits coverage to—

‘‘(i) a parent of a targeted low-income child; 

‘‘(ii) a nonpregnant childless adult; or 

‘‘(iii) individuals described in both clauses (i) and 

(ii); and 

‘‘(B) was in effect during fiscal year 2007. 

‘‘(2) DEFINITIONS.—

‘‘(A) PARENT.—The term ‘parent’ includes a caretaker 

relative (as such term is used in carrying out section 1931) 

and a legal guardian. 

‘‘(B) NONPREGNANT CHILDLESS ADULT.—The term ‘nonpregnant childless adult’ has the meaning given such term 

by section 2107(f).’’. 

(2) CONFORMING AMENDMENTS.—

(A) Section 2107(f) (42 U.S.C. 1397gg(f)) is amended—

(i) by striking ‘‘, the Secretary’’ and inserting ‘‘: 

‘‘(1) The Secretary’’; 

(ii) in the first sentence, by inserting ‘‘or a parent 

(as defined in section 2111(c)(2)(A)), who is not pregnant, of a targeted low-income child’’ before the period; 

(iii) by striking the second sentence; and 

(iv) by adding at the end the following new paragraph: 

‘‘(2) The Secretary may not approve, extend, renew, or 

amend a waiver, experimental, pilot, or demonstration project 

with respect to a State after the date of enactment of the Children’s Health Insurance Program Reauthorization Act of 2007 

that would waive or modify the requirements of section 2111.’’. 

(B) Section 6102(c) of the Deficit Reduction Act of 2005 

(Public Law 109–171; 120 Stat. 131) is amended by striking ‘‘Nothing’’ and inserting ‘‘Subject to section 2111 of the 

Social Security Act, as added by section 112 of the Children’s Health Insurance Program Reauthorization Act of 

2007, nothing’’. 

(b) GAO STUDY AND REPORT.—

(1) IN GENERAL.—The Comptroller General of the United 

States shall conduct a study of whether—

(A) the coverage of a parent, a caretaker relative (as 

such term is used in carrying out section 1931), or a legal 

guardian of a targeted low-income child under a State 

health plan under title XXI of the Social Security Act inVerDate Aug 31 2005 05:23 Sep 25, 2007 Jkt 059008 PO 00000 Frm 00034 Fmt 6659 Sfmt 6602 E:\HR\OC\HR346.XXX HR346

bajohnson on PROD1PC69 with REPORTS
33 

creases the enrollment of, or the quality of care for, children, and 

(B) such parents, relatives, and legal guardians who enroll in such a plan are more likely to enroll their children 

in such a plan or in a State plan under title XIX of such 

Act. 

(2) REPORT.—Not later than 2 years after the date of the enactment of this Act, the Comptroller General shall report the 

results of the study to the Committee on Finance of the Senate 

and the Committee on Energy and Commerce of the House of 

Representatives, including recommendations (if any) for 

changes in legislation. 

SEC. 113. ELIMINATION OF COUNTING MEDICAID CHILD PRESUMPTIVE ELIGIBILITY COSTS AGAINST TITLE XXI ALLOTMENT. 

(a) IN GENERAL.—Section 2105(a)(1) (42 U.S.C. 1397ee(a)(1)) is 

amended—

(1) in the matter preceding subparagraph (A), by striking 

‘‘(or, in the case of expenditures described in subparagraph (B), 

the Federal medical assistance percentage (as defined in the 

first sentence of section 1905(b)))’’; and 

(2) by striking subparagraph (B) and inserting the following 

new subparagraph: 

‘‘(B) [reserved]’’. 

(b) AMENDMENTS TO MEDICAID.—

(1) ELIGIBILITY OF A NEWBORN.—Section 1902(e)(4) (42 

U.S.C. 1396a(e)(4)) is amended in the first sentence by striking 

‘‘so long as the child is a member of the woman’s household 

and the woman remains (or would remain if pregnant) eligible 

for such assistance’’. 

(2) APPLICATION OF QUALIFIED ENTITIES TO PRESUMPTIVE ELIGIBILITY FOR PREGNANT WOMEN UNDER MEDICAID.—Section 

1920(b) (42 U.S.C. 1396r–1(b)) is amended by adding after 

paragraph (2) the following flush sentence: 

‘‘The term ‘qualified provider’ also includes a qualified entity, as 

defined in section 1920A(b)(3).’’. 

SEC. 114. LIMITATION ON MATCHING RATE FOR STATES THAT PROPOSE TO COVER CHILDREN WITH EFFECTIVE FAMILY INCOME THAT EXCEEDS 300 PERCENT OF THE POVERTY 

LINE. 

(a) FMAP APPLIED TO EXPENDITURES.—Section 2105(c) (42 

U.S.C. 1397ee(c)) is amended by adding at the end the following 

new paragraph: 

‘‘(8) LIMITATION ON MATCHING RATE FOR EXPENDITURES FOR

CHILD HEALTH ASSISTANCE PROVIDED TO CHILDREN WHOSE EFFECTIVE FAMILY INCOME EXCEEDS 300 PERCENT OF THE POVERTY

LINE.—

‘‘(A) FMAP APPLIED TO EXPENDITURES.—Except as provided in subparagraph (B), for fiscal years beginning with 

fiscal year 2008, the Federal medical assistance percentage 

(as determined under section 1905(b) without regard to 

clause (4) of such section) shall be substituted for the enhanced FMAP under subsection (a)(1) with respect to any 

expenditures for providing child health assistance or 

health benefits coverage for a targeted low-income child 

whose effective family income would exceed 300 percent of 


bajohnson on PROD1PC69 with REPORTS
34 

the poverty line but for the application of a general exclusion of a block of income that is not determined by type 

of expense or type of income. 

‘‘(B) EXCEPTION.—Subparagraph (A) shall not apply to 

any State that, on the date of enactment of the Children’s 

Health Insurance Program Reauthorization Act of 2007, 

has an approved State plan amendment or waiver to provide, or has enacted a State law to submit a State plan 

amendment to provide, expenditures described in such 

subparagraph under the State child health plan.’’. 

(b) RULE OF CONSTRUCTION.—Nothing in the amendments made 

by this section shall be construed as—

(1) changing any income eligibility level for children under 

title XXI of the Social Security Act; or 

(2) changing the flexibility provided States under such title 

to establish the income eligibility level for targeted low-income 

children under a State child health plan and the methodologies 

used by the State to determine income or assets under such 

plan. 

SEC. 115. STATE AUTHORITY UNDER MEDICAID. 

(a) STATE AUTHORITY TO EXPAND INCOME OR RESOURCE ELIGIBILITY LEVELS FOR CHILDREN.—Nothing in this Act, the amendments made by this Act, or title XIX of the Social Security Act, including paragraph (2)(B) of section 1905(u) of such Act, shall be 

construed as limiting the flexibility afforded States under such title 

to increase the income or resource eligibility levels for children 

under a State plan or waiver under such title. 

(b) STATE AUTHORITY TO RECEIVE PAYMENTS UNDER MEDICAID

FOR PROVIDING MEDICAL ASSISTANCE TO CHILDREN ELIGIBLE AS A

RESULT OF AN INCOME OR RESOURCE ELIGIBILITY LEVEL EXPANSION.—A State may, notwithstanding the fourth sentence of subsection (b) of section 1905 of the Social Security Act (42 U.S.C. 

1396d) or subsection (u) of such section—

(1) cover individuals described in section 

1902(a)(10)(A)(ii)(IX) of the Social Security Act and thereby receive Federal financial participation for medical assistance for 

such individuals under title XIX of the Social Security Act; or 

(2) receive Federal financial participation for expenditures 

for medical assistance under Medicaid for children described in 

paragraph (2)(B) or (3) of section 1905(u) of such Act based on 

the Federal medical assistance percentage, as otherwise determined based on the first and third sentences of subsection (b) 

of section 1905 of the Social Security Act, rather than on the 

basis of an enhanced FMAP (as defined in section 2105(b) of 

such Act). 

SEC. 116. PREVENTING SUBSTITUTION OF CHIP COVERAGE FOR PRIVATE COVERAGE. 

(a) FINDINGS.—

(1) Congress agrees with the President that low-income children should be the first priority of all States in providing child 

health assistance under CHIP. 

(2) Congress agrees with the President and the Congressional Budget Office that the substitution of CHIP coverage for 


bajohnson on PROD1PC69 with REPORTS
35 

private coverage occurs more frequently for children in families 

at higher income levels. 

(3) Congress agrees with the President that it is appropriate 

that States that expand CHIP eligibility to children at higher 

income levels should have achieved a high level of health benefits coverage for low-income children and should implement 

strategies to address such substitution. 

(4) Congress concludes that the policies specified in this section (and the amendments made by this section) are the appropriate policies to address these issues. 

(b) ANALYSES OF BEST PRACTICES AND METHODOLOGY IN ADDRESSING CROWD-OUT.—

(1) GAO REPORT.—Not later than 18 months after the date 

of the enactment of this Act, the Comptroller General of the 

United States shall submit to the Committee on Finance of the 

Senate and the Committee on Energy and Commerce of the 

House of Representatives and the Secretary a report describing 

the best practices by States in addressing the issue of CHIP 

crowd-out. Such report shall include analyses of—

(A) the impact of different geographic areas, including 

urban and rural areas, on CHIP crowd-out; 

(B) the impact of different State labor markets on CHIP 

crowd-out; 

(C) the impact of different strategies for addressing 

CHIP crowd-out; 

(D) the incidence of crowd-out for children with different 

levels of family income; and 

(E) the relationship (if any) between changes in the 

availability and affordability of dependent coverage under 

employer-sponsored health insurance and CHIP crowd-out. 

(2) IOM REPORT ON METHODOLOGY.—The Secretary shall 

enter into an arrangement with the Institute of Medicine 

under which the Institute submits to the Committee on Finance of the Senate and the Committee on Energy and Commerce of the House of Representatives and the Secretary, not 

later than 18 months after the date of the enactment of this 

Act, a report on—

(A) the most accurate, reliable, and timely way to measure—

(i) on a State-by-State basis, the rate of public and 

private health benefits coverage among low-income 

children with family income that does not exceed 200 

percent of the poverty line; and 

(ii) CHIP crowd-out, including in the case of children 

with family income that exceeds 200 percent of the 

poverty line; and 

(B) the least burdensome way to gather the necessary 

data to conduct the measurements described in subparagraph (A). 

Out of any money in the Treasury not otherwise appropriated, 

there are hereby appropriated $2,000,000 to carry out this 

paragraph for the period ending September 30, 2009. 

(3) INCORPORATION OF DEFINITIONS.—In this section, the 

terms ‘‘CHIP crowd-out’’, ‘‘children’’, ‘‘poverty line’’, and ‘‘State’’

have the meanings given such terms for purposes of CHIP. 


bajohnson on PROD1PC69 with REPORTS
36 

(4) DEFINITION OF CHIP CROWD-OUT.—Section 2110(c) (42 

U.S.C. 1397jj(c)) is amended by adding at the end the following: 

‘‘(9) CHIP CROWD-OUT.—The term ‘CHIP crowd-out’ means 

the substitution of—

‘‘(A) health benefits coverage for a child under this title, 

for 

‘‘(B) health benefits coverage for the child other than 

under this title or title XIX.’’. 

(c) DEVELOPMENT OF BEST PRACTICE RECOMMENDATIONS.—Section 2107 (42 U.S.C. 1397gg) is amended by adding at the end the 

following: 

‘‘(g) DEVELOPMENT OF BEST PRACTICE RECOMMENDATIONS.—

Within 6 months after the date of receipt of the reports under subsections (a) and (b) of section 116 of the Children’s Health Insurance Program Reauthorization Act of 2007, the Secretary, in consultation with States, including Medicaid and CHIP directors in 

States, shall publish in the Federal Register, and post on the public 

website for the Department of Health and Human Services—

‘‘(1) recommendations regarding best practices for States to 

use to address CHIP crowd-out; and 

‘‘(2) uniform standards for data collection by States to measure and report—

‘‘(A) health benefits coverage for children with family income below 200 percent of the poverty line; and 

‘‘(B) on CHIP crowd-out, including for children with family income that exceeds 200 percent of the poverty line. 

The Secretary, in consultation with States, including Medicaid and 

CHIP directors in States, may from time to time update the best 

practice recommendations and uniform standards set published 

under paragraphs (1) and (2) and shall provide for publication and 

posting of such updated recommendations and standards.’’. 

(d) REQUIREMENT TO ADDRESS CHIP CROWD-OUT; SECRETARIAL

REVIEW.—Section 2106 (42 U.S.C. 1397ff) is amended by adding at 

the end the following: 

‘‘(f) REQUIREMENT TO ADDRESS CHIP CROWD-OUT; SECRETARIAL

REVIEW.—

‘‘(1) IN GENERAL.—Each State that, on or after the best practice application date described in paragraph (3), submits a plan 

amendment (or waiver request) to provide for eligibility for 

child health assistance under the State child health plan for 

higher income children described in section 2105(c)(9)(D) (relating to children whose effective family income exceeds 300 percent of the poverty line) shall include with such plan amendment or request a description of how the State—

‘‘(A) will address CHIP crowd-out for such children; and 

‘‘(B) will incorporate recommended best practices referred to in such paragraph. 

‘‘(2) APPLICATION TO CERTAIN STATES.—Each State that, as of 

the best practice application date described in paragraph (3), 

has a State child health plan that provides (whether under the 

plan or through a waiver) for eligibility for child health assistance for children referred to in paragraph (1) shall submit to 

the Secretary, not later than 6 months after the date of such 


bajohnson on PROD1PC69 with REPORTS
37 

application, a State plan amendment describing how the 

State—

‘‘(A) will address CHIP crowd-out for such children; and 

‘‘(B) will incorporate recommended best practices referred to in such paragraph. ‘‘(3) BEST PRACTICE APPLICATION DATE.—The best practice application date described in this paragraph is the date that is 

6 months after the date of publication of recommendations regarding best practices under section 2107(g)(1). ‘‘(4) SECRETARIAL REVIEW.—The Secretary shall— ‘‘(A) review each State plan amendment or waiver request submitted under paragraph (1) or (2); ‘‘(B) determine whether the amendment or request incorporates recommended best practices referred to in paragraph (3); ‘‘(C) determine whether the State meets the enrollment 

targets required under reference section 2105(c)(9)(C); and ‘‘(D) notify the State of such determinations.’’. (e) LIMITATION ON PAYMENTS FOR STATES COVERING HIGHER INCOME CHILDREN.—Section 2105(c) (42 U.S.C. 1397ee(c)), as amended by section 114(a), is amended by adding at the end the following 

new subsection: 

‘‘(9) LIMITATION ON PAYMENTS FOR STATES COVERING HIGHER

INCOME CHILDREN.— ‘‘(A) DETERMINATIONS.— ‘‘(i) IN GENERAL.—The Secretary shall determine, for 

each State that is a higher income eligibility State as 

of April 1 of 2010 and each subsequent year, whether 

the State meets the target rate of coverage of low-income children required under subparagraph (C) and 

shall notify the State in that month of such determination. ‘‘(ii) DETERMINATION OF FAILURE.—If the Secretary 

determines in such month that a higher income eligibility State does not meet such target rate of coverage, 

subject to subparagraph (E), no payment shall be 

made as of October 1 of such year on or after October 

1, 2010, under this section for child health assistance 

provided for higher-income children (as defined in subparagraph (D)) under the State child health plan unless and until the State establishes it is in compliance 

with such requirement. ‘‘(B) HIGHER INCOME ELIGIBILITY STATE.—A higher income eligibility State described in this clause is a State 

that—

‘‘(i) applies under its State child health plan an eligibility income standard for targeted low-income children that exceeds 300 percent of the poverty line; or 

‘‘(ii) because of the application of a general exclusion 

of a block of income that is not determined by type of 

expense or type of income, applies an effective income 

standard under the State child health plan for such 

children that exceeds 300 percent of the poverty line. 

‘‘(C) REQUIREMENT FOR TARGET RATE OF COVERAGE OF

LOW-INCOME CHILDREN.—


bajohnson on PROD1PC69 with REPORTS
38 

‘‘(i) IN GENERAL.—The requirement of this subparagraph for a State is that the rate of health benefits 

coverage (both private and public) for low-income children in the State is not statistically significantly (at a 

p=0.05 level) less than the target rate of coverage 

specified in clause (ii). ‘‘(ii) TARGET RATE.—The target rate of coverage specified in this clause is the average rate (determined by 

the Secretary) of health benefits coverage (both private 

and public) as of January 1, 2010, among the 10 of the 

50 States and the District of Columbia with the highest percentage of health benefits coverage (both private and public) for low-income children. ‘‘(iii) STANDARDS FOR DATA.— In applying this subparagraph, rates of health benefits coverage for States 

shall be determined using the uniform standards identified by the Secretary under section 2107(g)(2). 

‘‘(D) HIGHER-INCOME CHILD.—For purposes of this paragraph, the term ‘higher income child’ means, with respect 

to a State child health plan, a targeted low-income child 

whose family income— ‘‘(i) exceeds 300 percent of the poverty line; or 

‘‘(ii) would exceed 300 percent of the poverty line if 

there were not taken into account any general exclusion described in subparagraph (B)(ii). ‘‘(E) NOTICE AND OPPORTUNITY TO COMPLY WITH TARGET

RATE.—If the Secretary makes a determination described 

in subparagraph (A)(ii) in April of a year, the Secretary— ‘‘(i) shall provide the State with the opportunity to 

submit and implement a corrective action plan for the 

State to come into compliance with the requirement of 

subparagraph (C) before October 1 of such year; ‘‘(ii) shall not effect a denial of payment under subparagraph (A) on the basis of such determination before October 1 of such year; and 

‘‘(iii) shall not effect such a denial if the Secretary 

determines that there is a reasonable likelihood that 

the implementation of such a correction action plan 

will bring the State into compliance with the requirement of subparagraph (C).’’. 

(f) TREATMENT OF MEDICAL SUPPORT ORDERS.—Section 2102(b) 

(42 U.S.C. 1397bb(c)) is amended by adding at the end the following:: 

‘‘(5) TREATMENT OF MEDICAL SUPPORT ORDERS.—

‘‘(A) IN GENERAL.—Nothing in this title shall be construed to allow the Secretary to require that a State deny 

eligibility for child health assistance to a child who is otherwise eligible on the basis of the existence of a valid medical support order being in effect. ‘‘(B) STATE ELECTION.—A State may elect to limit eligibility for child health assistance to a targeted low-income 

child on the basis of the existence of a valid medical support order on the child’s behalf, but only if the State does 

not deny such eligibility for a child on such basis if the 

child asserts that the order is not being complied with for 


bajohnson on PROD1PC69 with REPORTS
39 

any of the reasons described in subparagraph (C) unless 

the State demonstrates that none of such reasons applies 

in the case involved. ‘‘(C) REASONS FOR NONCOMPLIANCE.—The reasons described in this subparagraph for noncompliance with a 

medical support order with respect to a child are that the 

child is not being provided health benefits coverage pursuant to such order because— ‘‘(i) of failure of the noncustodial parent to comply 

with the order; ‘‘(ii) of the failure of an employer, group health plan 

or health insurance issuer to comply with such order; 

or 

‘‘(iii) the child resides in a geographic area in which 

benefits under the health benefits coverage are generally unavailable.’’. 

(g) EFFECTIVE DATE OF AMENDMENTS; CONSISTENCY OF POLICIES.—The amendments made by this section shall take effect as 

if enacted on August 16, 2007. The Secretary may not impose (or 

continue in effect) any requirement, prevent the implementation of 

any provision, or condition the approval of any provision under any 

State child health plan, State plan amendment, or waiver request 

on the basis of any policy or interpretation relating to CHIP crowdout or medical support order other than under the amendments 

made by this section. 

TITLE II—OUTREACH AND 

ENROLLMENT 

Subtitle A—Outreach and Enrollment 

Activities 

SEC. 201. GRANTS AND ENHANCED ADMINISTRATIVE FUNDING FOR 

OUTREACH AND ENROLLMENT. 

(a) GRANTS.—Title XXI (42 U.S.C. 1397aa et seq.), as amended 

by section 107, is amended by adding at the end the following: 

‘‘SEC. 2113. GRANTS TO IMPROVE OUTREACH AND ENROLLMENT. 

‘‘(a) OUTREACH AND ENROLLMENT GRANTS; NATIONAL CAMPAIGN.—

‘‘(1) IN GENERAL.—From the amounts appropriated under 

subsection (g), subject to paragraph (2), the Secretary shall 

award grants to eligible entities during the period of fiscal 

years 2008 through 2012 to conduct outreach and enrollment 

efforts that are designed to increase the enrollment and participation of eligible children under this title and title XIX. 

‘‘(2) TEN PERCENT SET ASIDE FOR NATIONAL ENROLLMENT

CAMPAIGN.—An amount equal to 10 percent of such amounts 

shall be used by the Secretary for expenditures during such period to carry out a national enrollment campaign in accordance 

with subsection (h). 

‘‘(b) PRIORITY FOR AWARD OF GRANTS.—

‘‘(1) IN GENERAL.—In awarding grants under subsection (a), 

the Secretary shall give priority to eligible entities that—


bajohnson on PROD1PC69 with REPORTS
40 

‘‘(A) propose to target geographic areas with high rates 

of— ‘‘(i) eligible but unenrolled children, including such 

children who reside in rural areas; or ‘‘(ii) racial and ethnic minorities and health disparity populations, including those proposals that address cultural and linguistic barriers to enrollment; 

and ‘‘(B) submit the most demonstrable evidence required 

under paragraphs (1) and (2) of subsection (c). ‘‘(2) TEN PERCENT SET ASIDE FOR OUTREACH TO INDIAN CHILDREN.—An amount equal to 10 percent of the funds appropriated under subsection (g) shall be used by the Secretary to 

award grants to Indian Health Service providers and urban Indian organizations receiving funds under title V of the Indian 

Health Care Improvement Act (25 U.S.C. 1651 et seq.) for outreach to, and enrollment of, children who are Indians. 

‘‘(c) APPLICATION.—An eligible entity that desires to receive a 

grant under subsection (a) shall submit an application to the Secretary in such form and manner, and containing such information, 

as the Secretary may decide. Such application shall include— ‘‘(1) evidence demonstrating that the entity includes members who have access to, and credibility with, ethnic or low-income populations in the communities in which activities funded under the grant are to be conducted; ‘‘(2) evidence demonstrating that the entity has the ability to 

address barriers to enrollment, such as lack of awareness of 

eligibility, stigma concerns and punitive fears associated with 

receipt of benefits, and other cultural barriers to applying for 

and receiving child health assistance or medical assistance; ‘‘(3) specific quality or outcomes performance measures to 

evaluate the effectiveness of activities funded by a grant 

awarded under this section; and ‘‘(4) an assurance that the eligible entity shall—

‘‘(A) conduct an assessment of the effectiveness of such 

activities against the performance measures; 

‘‘(B) cooperate with the collection and reporting of enrollment data and other information in order for the Secretary 

to conduct such assessments; and 

‘‘(C) in the case of an eligible entity that is not the State, 

provide the State with enrollment data and other information as necessary for the State to make necessary projections of eligible children and pregnant women. 

‘‘(d) DISSEMINATION OF ENROLLMENT DATA AND INFORMATION DETERMINED FROM EFFECTIVENESS ASSESSMENTS; ANNUAL REPORT.—

The Secretary shall—

‘‘(1) make publicly available the enrollment data and information collected and reported in accordance with subsection 

(c)(4)(B); and ‘‘(2) submit an annual report to Congress on the outreach 

and enrollment activities conducted with funds appropriated 

under this section. ‘‘(e) MAINTENANCE OF EFFORT FOR STATES AWARDED GRANTS; NO

STATE MATCH REQUIRED.—In the case of a State that is awarded 

a grant under this section—


bajohnson on PROD1PC69 with REPORTS
41 

‘‘(1) the State share of funds expended for outreach and enrollment activities under the State child health plan shall not 

be less than the State share of such funds expended in the fiscal year preceding the first fiscal year for which the grant is 

awarded; and ‘‘(2) no State matching funds shall be required for the State 

to receive a grant under this section. ‘‘(f) DEFINITIONS.—In this section: ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible entity’ means any 

of the following: ‘‘(A) A State with an approved child health plan under 

this title. ‘‘(B) A local government. 

‘‘(C) An Indian tribe or tribal consortium, a tribal organization, an urban Indian organization receiving funds 

under title V of the Indian Health Care Improvement Act 

(25 U.S.C. 1651 et seq.), or an Indian Health Service provider. ‘‘(D) A Federal health safety net organization. 

‘‘(E) A national, State, local, or community-based public 

or nonprofit private organization, including organizations 

that use community health workers or community-based 

doula programs. ‘‘(F) A faith-based organization or consortia, to the extent that a grant awarded to such an entity is consistent 

with the requirements of section 1955 of the Public Health 

Service Act (42 U.S.C. 300x–65) relating to a grant award 

to nongovernmental entities. ‘‘(G) An elementary or secondary school. ‘‘(2) FEDERAL HEALTH SAFETY NET ORGANIZATION.—The term 

‘Federal health safety net organization’ means—

‘‘(A) a Federally-qualified health center (as defined in 

section 1905(l)(2)(B)); ‘‘(B) a hospital defined as a disproportionate share hospital for purposes of section 1923; ‘‘(C) a covered entity described in section 340B(a)(4) of 

the Public Health Service Act (42 U.S.C. 256b(a)(4)); and ‘‘(D) any other entity or consortium that serves children 

under a federally funded program, including the special 

supplemental nutrition program for women, infants, and 

children (WIC) established under section 17 of the Child 

Nutrition Act of 1966 (42 U.S.C. 1786), the Head Start and 

Early Head Start programs under the Head Start Act (42 

U.S.C. 9801 et seq.), the school lunch program established 

under the Richard B. Russell National School Lunch Act, 

and an elementary or secondary school. ‘‘(3) INDIANS; INDIAN TRIBE; TRIBAL ORGANIZATION; URBAN IN- DIAN ORGANIZATION.—The terms ‘Indian’, ‘Indian tribe’, ‘tribal 

organization’, and ‘urban Indian organization’ have the meanings given such terms in section 4 of the Indian Health Care 

Improvement Act (25 U.S.C. 1603). 

‘‘(4) COMMUNITY HEALTH WORKER.—The term ‘community 

health worker’ means an individual who promotes health or 

nutrition within the community in which the individual resides—


bajohnson on PROD1PC69 with REPORTS
42 

‘‘(A) by serving as a liaison between communities and 

health care agencies; ‘‘(B) by providing guidance and social assistance to community residents; ‘‘(C) by enhancing community residents’’ ability to effectively communicate with health care providers; ‘‘(D) by providing culturally and linguistically appropriate health or nutrition education; ‘‘(E) by advocating for individual and community health 

or nutrition needs; and ‘‘(F) by providing referral and followup services. ‘‘(g) APPROPRIATION.—There is appropriated, out of any money in 

the Treasury not otherwise appropriated, $100,000,000 for the period of fiscal years 2008 through 2012, for the purpose of awarding 

grants under this section. Amounts appropriated and paid under 

the authority of this section shall be in addition to amounts appropriated under section 2104 and paid to States in accordance with 

section 2105, including with respect to expenditures for outreach 

activities in accordance with subsections (a)(1)(D)(iii) and (c)(2)(C) 

of that section. 

‘‘(h) NATIONAL ENROLLMENT CAMPAIGN.—From the amounts 

made available under subsection (a)(2), the Secretary shall develop 

and implement a national enrollment campaign to improve the enrollment of underserved child populations in the programs established under this title and title XIX. Such campaign may include— ‘‘(1) the establishment of partnerships with the Secretary of 

Education and the Secretary of Agriculture to develop national 

campaigns to link the eligibility and enrollment systems for 

the assistance programs each Secretary administers that often 

serve the same children; ‘‘(2) the integration of information about the programs established under this title and title XIX in public health awareness 

campaigns administered by the Secretary; ‘‘(3) increased financial and technical support for enrollment 

hotlines maintained by the Secretary to ensure that all States 

participate in such hotlines; 

‘‘(4) the establishment of joint public awareness outreach initiatives with the Secretary of Education and the Secretary of 

Labor regarding the importance of health insurance to building 

strong communities and the economy; 

‘‘(5) the development of special outreach materials for Native 

Americans or for individuals with limited English proficiency; 

and 

‘‘(6) such other outreach initiatives as the Secretary determines would increase public awareness of the programs under 

this title and title XIX.’’. 

(b) ENHANCED ADMINISTRATIVE FUNDING FOR TRANSLATION OR

INTERPRETATION SERVICES UNDER CHIP AND MEDICAID.—

(1) CHIP.—Section 2105(a)(1) (42 U.S.C. 1397ee(a)(1)), as 

amended by section 113, is amended—

(A) in the matter preceding subparagraph (A), by inserting ‘‘(or, in the case of expenditures described in subparagraph (D)(iv), the higher of 75 percent or the sum of the 

enhanced FMAP plus 5 percentage points)’’ after ‘‘enhanced FMAP’’; and 


bajohnson on PROD1PC69 with REPORTS
43 

(B) in subparagraph (D)—

(i) in clause (iii), by striking ‘‘and’’ at the end; 

(ii) by redesignating clause (iv) as clause (v); and 

(iii) by inserting after clause (iii) the following new 

clause: 

‘‘(iv) for translation or interpretation services in connection with the enrollment of, retention of, and use of 

services under this title by, individuals for whom 

English is not their primary language (as found necessary by the Secretary for the proper and efficient administration of the State plan); and’’. 

(2) MEDICAID.—

(A) USE OF MEDICAID FUNDS.—Section 1903(a)(2) (42 

U.S.C. 1396b(a)(2)) is amended by adding at the end the 

following new subparagraph: 

‘‘(E) an amount equal to 75 percent of so much of the sums 

expended during such quarter (as found necessary by the Secretary for the proper and efficient administration of the State 

plan) as are attributable to translation or interpretation services in connection with the enrollment of, retention of, and use 

of services under this title by, children of families for whom 

English is not the primary language; plus’’. 

(B) USE OF COMMUNITY HEALTH WORKERS FOR OUTREACH

ACTIVITIES.—

(i) IN GENERAL.—Section 2102(c)(1) of such Act (42 

U.S.C. 1397bb(c)(1)) is amended by inserting ‘‘(through 

community health workers and others)’’ after ‘‘Outreach’’. 

(ii) IN FEDERAL EVALUATION.—Section 2108(c)(3)(B) 

of such Act (42 U.S.C. 1397hh(c)(3)(B)) is amended by 

inserting ‘‘(such as through community health workers 

and others)’’ after ‘‘including practices’’. 

SEC. 202. INCREASED OUTREACH AND ENROLLMENT OF INDIANS. 

(a) IN GENERAL.—Section 1139 (42 U.S.C. 1320b–9) is amended 

to read as follows: 

‘‘SEC. 1139. IMPROVED ACCESS TO, AND DELIVERY OF, HEALTH CARE 

FOR INDIANS UNDER TITLES XIX AND XXI. 

‘‘(a) AGREEMENTS WITH STATES FOR MEDICAID AND CHIP OUTREACH ON OR NEAR RESERVATIONS TO INCREASE THE ENROLLMENT

OF INDIANS IN THOSE PROGRAMS.—

‘‘(1) IN GENERAL.—In order to improve the access of Indians 

residing on or near a reservation to obtain benefits under the 

Medicaid and State children’s health insurance programs established under titles XIX and XXI, the Secretary shall encourage the State to take steps to provide for enrollment on or near 

the reservation. Such steps may include outreach efforts such 

as the outstationing of eligibility workers, entering into agreements with the Indian Health Service, Indian Tribes, Tribal 

Organizations, and Urban Indian Organizations to provide outreach, education regarding eligibility and benefits, enrollment, 

and translation services when such services are appropriate. ‘‘(2) CONSTRUCTION.—Nothing in paragraph (1) shall be construed as affecting arrangements entered into between States 

and the Indian Health Service, Indian Tribes, Tribal OrganizaVerDate Aug 31 2005 05:23 Sep 25, 2007 Jkt 059008 PO 00000 Frm 00045 Fmt 6659 Sfmt 6602 E:\HR\OC\HR346.XXX HR346

bajohnson on PROD1PC69 with REPORTS
44 

tions, or Urban Indian Organizations for such Service, Tribes, 

or Organizations to conduct administrative activities under 

such titles. 

‘‘(b) REQUIREMENT TO FACILITATE COOPERATION.—The Secretary, 

acting through the Centers for Medicare & Medicaid Services, shall 

take such steps as are necessary to facilitate cooperation with, and 

agreements between, States and the Indian Health Service, Indian 

Tribes, Tribal Organizations, or Urban Indian Organizations with 

respect to the provision of health care items and services to Indians 

under the programs established under title XIX or XXI. 

‘‘(c) DEFINITION OF INDIAN; INDIAN TRIBE; INDIAN HEALTH PROGRAM; TRIBAL ORGANIZATION; URBAN INDIAN ORGANIZATION.—In 

this section, the terms ‘Indian’, ‘Indian Tribe’, ‘Indian Health Program’, ‘Tribal Organization’, and ‘Urban Indian Organization’ have 

the meanings given those terms in section 4 of the Indian Health 

Care Improvement Act.’’. 

(b) NONAPPLICATION OF 10 PERCENT LIMIT ON OUTREACH AND

CERTAIN OTHER EXPENDITURES.—Section 2105(c)(2) (42 U.S.C. 

1397ee(c)(2)) is amended by adding at the end the following: 

‘‘(C) NONAPPLICATION TO CERTAIN EXPENDITURES.—The 

limitation under subparagraph (A) shall not apply with respect to the following expenditures: 

‘‘(i) EXPENDITURES TO INCREASE OUTREACH TO, AND

THE ENROLLMENT OF, INDIAN CHILDREN UNDER THIS

TITLE AND TITLE xix.—Expenditures for outreach activities to families of Indian children likely to be eligible for child health assistance under the plan or medical assistance under the State plan under title XIX 

(or under a waiver of such plan), to inform such families of the availability of, and to assist them in enrolling their children in, such plans, including such activities conducted under grants, contracts, or agreements 

entered into under section 1139(a).’’. 

SEC. 203. STATE OPTION TO RELY ON FINDINGS FROM AN EXPRESS 

LANE AGENCY TO CONDUCT SIMPLIFIED ELIGIBILITY DETERMINATIONS. 

(a) APPLICATION UNDER MEDICAID AND CHIP PROGRAMS.—

(1) MEDICAID.—Section 1902(e) (42 U.S.C. 1396a(e)) is 

amended by adding at the end the following: 

‘‘(13) EXPRESS LANE OPTION.—

‘‘(A) IN GENERAL.—

‘‘(i) OPTION TO USE A FINDING FROM AN EXPRESS LANE

AGENCY.—At the option of the State, the State plan may 

provide that in determining eligibility under this title for 

a child (as defined in subparagraph (G)), the State may 

rely on a finding made within a reasonable period (as determined by the State) from an Express Lane agency (as 

defined in subparagraph (F)) when it determines whether 

a child satisfies one or more components of eligibility for 

medical assistance under this title. The State may rely on 

a finding from an Express Lane agency notwithstanding 

sections 1902(a)(46)(B) and 1137(d) and any differences in 

budget unit, disregard, deeming or other methodology, if 

the following requirements are met: 


bajohnson on PROD1PC69 with REPORTS
45 

‘‘(I) PROHIBITION ON DETERMINING CHILDREN INELI- GIBLE FOR COVERAGE.—If a finding from an Express 

Lane agency would result in a determination that a 

child does not satisfy an eligibility requirement for 

medical assistance under this title and for child health 

assistance under title XXI, the State shall determine 

eligibility for assistance using its regular procedures. ‘‘(II) NOTICE REQUIREMENT.—For any child who is 

found eligible for medical assistance under the State 

plan under this title or child health assistance under 

title XXI and who is subject to premiums based on an 

Express Lane agency’s finding of such child’s income 

level, the State shall provide notice that the child may 

qualify for lower premium payments if evaluated by 

the State using its regular policies and of the procedures for requesting such an evaluation. ‘‘(III) COMPLIANCE WITH SCREEN AND ENROLL RE- QUIREMENT.—The State shall satisfy the requirements 

under (A) and (B) of section 2102(b)(3) (relating to 

screen and enroll) before enrolling a child in child 

health assistance under title XXI. At its option, the 

State may fulfill such requirements in accordance with 

either option provided under subparagraph (C) of this 

paragraph. ‘‘(IV) VERIFICATION OF CITIZENSHIP OR NATIONALITY

STATUS.—The State shall satisfy the requirements of 

section 1902(a)(46)(B) or 2105(c)(10), as applicable for 

verifications of citizenship or nationality status. ‘‘(V) CODING.—The State meets the requirements of 

subparagraph (E). 

‘‘(ii) OPTION TO APPLY TO RENEWALS AND REDETERMINATIONS.—The State may apply the provisions of this paragraph when conducting initial determinations of eligibility, 

redeterminations of eligibility, or both, as described in the 

State plan. ‘‘(B) RULES OF CONSTRUCTION.—Nothing in this paragraph 

shall be construed— ‘‘(i) to limit or prohibit a State from taking any actions 

otherwise permitted under this title or title XXI in determining eligibility for or enrolling children into medical assistance under this title or child health assistance under 

title XXI; or ‘‘(ii) to modify the limitations in section 1902(a)(5) concerning the agencies that may make a determination of eligibility for medical assistance under this title. ‘‘(C) OPTIONS FOR SATISFYING THE SCREEN AND ENROLL REQUIREMENT.—

‘‘(i) IN GENERAL.—With respect to a child whose eligibility for medical assistance under this title or for child 

health assistance under title XXI has been evaluated by a 

State agency using an income finding from an Express 

Lane agency, a State may carry out its duties under subparagraphs (A) and (B) of section 2102(b)(3) (relating to 

screen and enroll) in accordance with either clause (ii) or 

clause (iii). 


bajohnson on PROD1PC69 with REPORTS
46 

‘‘(ii) ESTABLISHING A SCREENING THRESHOLD.—

‘‘(I) IN GENERAL.—Under this clause, the State establishes a screening threshold set as a percentage of 

the Federal poverty level that exceeds the highest income threshold applicable under this title to the child 

by a minimum of 30 percentage points or, at State option, a higher number of percentage points that reflects the value (as determined by the State and described in the State plan) of any differences between 

income methodologies used by the program administered by the Express Lane agency and the methodologies used by the State in determining eligibility for 

medical assistance under this title. 

‘‘(II) CHILDREN WITH INCOME NOT ABOVE THRESHOLD.—If the income of a child does not exceed the 

screening threshold, the child is deemed to satisfy the 

income eligibility criteria for medical assistance under 

this title regardless of whether such child would otherwise satisfy such criteria. 

‘‘(III) CHILDREN WITH INCOME ABOVE THRESHOLD.—If 

the income of a child exceeds the screening threshold, 

the child shall be considered to have an income above 

the Medicaid applicable income level described in section 2110(b)(4) and to satisfy the requirement under 

section 2110(b)(1)(C) (relating to the requirement that 

CHIP matching funds be used only for children not eligible for Medicaid). If such a child is enrolled in child 

health assistance under title XXI, the State shall provide the parent, guardian, or custodial relative with 

the following: 

‘‘(aa) Notice that the child may be eligible to receive medical assistance under the State plan 

under this title if evaluated for such assistance 

under the State’s regular procedures and notice of 

the process through which a parent, guardian, or 

custodial relative can request that the State 

evaluate the child’s eligibility for medical assistance under this title using such regular procedures. 

‘‘(bb) A description of differences between the 

medical assistance provided under this title and 

child health assistance under title XXI, including 

differences in cost-sharing requirements and covered benefits. 

‘‘(iii) TEMPORARY ENROLLMENT IN CHIP PENDING SCREEN

AND ENROLL.—

‘‘(I) IN GENERAL.—Under this clause, a State enrolls 

a child in child health assistance under title XXI for 

a temporary period if the child appears eligible for 

such assistance based on an income finding by an Express Lane agency. 

‘‘(II) DETERMINATION OF ELIGIBILITY.—During such 

temporary enrollment period, the State shall determine the child’s eligibility for child health assistance 


bajohnson on PROD1PC69 with REPORTS
47 

under title XXI or for medical assistance under this 

title in accordance with this clause. ‘‘(III) PROMPT FOLLOW UP.—In making such a determination, the State shall take prompt action to determine whether the child should be enrolled in medical 

assistance under this title or child health assistance 

under title XXI pursuant to subparagraphs (A) and (B) 

of section 2102(b)(3) (relating to screen and enroll). ‘‘(IV) REQUIREMENT FOR SIMPLIFIED DETERMINA- TION.—In making such a determination, the State 

shall use procedures that, to the maximum feasible extent, reduce the burden imposed on the individual of 

such determination. Such procedures may not require 

the child’s parent, guardian, or custodial relative to 

provide or verify information that already has been 

provided to the State agency by an Express Lane 

agency or another source of information unless the 

State agency has reason to believe the information is 

erroneous. ‘‘(V) AVAILABILITY OF CHIP MATCHING FUNDS DURING

TEMPORARY ENROLLMENT PERIOD.—Medical assistance 

for items and services that are provided to a child enrolled in title XXI during a temporary enrollment period under this clause shall be treated as child health 

assistance under such title. ‘‘(D) OPTION FOR AUTOMATIC ENROLLMENT.— ‘‘(i) IN GENERAL.—The State may initiate and determine 

eligibility for medical assistance under the State Medicaid 

plan or for child health assistance under the State CHIP 

plan without a program application from, or on behalf of, 

the child based on data obtained from sources other than 

the child (or the child’s family), but a child can only be 

automatically enrolled in the State Medicaid plan or the 

State CHIP plan if the child or the family affirmatively 

consents to being enrolled through affirmation and signature on an Express Lane agency application, if the requirement of clause (ii) is met. 

‘‘(ii) INFORMATION REQUIREMENT.—The requirement of 

this clause is that the State informs the parent, guardian, 

or custodial relative of the child of the services that will 

be covered, appropriate methods for using such services, 

premium or other cost sharing charges (if any) that apply, 

medical support obligations (under section 1912(a)) created 

by enrollment (if applicable), and the actions the parent, 

guardian, or relative must take to maintain enrollment 

and renew coverage. ‘‘(E) CODING; APPLICATION TO ENROLLMENT ERROR RATES.—

‘‘(i) IN GENERAL.—For purposes of subparagraph (A)(iv), 

the requirement of this subparagraph for a State is that 

the State agrees to—

‘‘(I) assign such codes as the Secretary shall require 

to the children who are enrolled in the State Medicaid 

plan or the State CHIP plan through reliance on a 

finding made by an Express Lane agency for the duration of the State’s election under this paragraph; 


bajohnson on PROD1PC69 with REPORTS
48 

‘‘(II) annually provide the Secretary with a statistically valid sample (that is approved by Secretary) of 

the children enrolled in such plans through reliance on 

such a finding by conducting a full Medicaid eligibility 

review of the children identified for such sample for 

purposes of determining an eligibility error rate (as 

described in clause (iv)) with respect to the enrollment 

of such children (and shall not include such children 

in any data or samples used for purposes of complying 

with a Medicaid Eligibility Quality Control (MEQC) 

review or a payment error rate measurement (PERM) 

requirement); 

‘‘(III) submit the error rate determined under subclause (II) to the Secretary; 

‘‘(IV) if such error rate exceeds 3 percent for either 

of the first 2 fiscal years in which the State elects to 

apply this paragraph, demonstrate to the satisfaction 

of the Secretary the specific corrective actions implemented by the State to improve upon such error rate; 

and 

‘‘(V) if such error rate exceeds 3 percent for any fiscal year in which the State elects to apply this paragraph, a reduction in the amount otherwise payable to 

the State under section 1903(a) for quarters for that 

fiscal year, equal to the total amount of erroneous excess payments determined for the fiscal year only with 

respect to the children included in the sample for the 

fiscal year that are in excess of a 3 percent error rate 

with respect to such children. 

‘‘(ii) NO PUNITIVE ACTION BASED ON ERROR RATE.—The 

Secretary shall not apply the error rate derived from the 

sample under clause (i) to the entire population of children 

enrolled in the State Medicaid plan or the State CHIP 

plan through reliance on a finding made by an Express 

Lane agency, or to the population of children enrolled in 

such plans on the basis of the State’s regular procedures 

for determining eligibility, or penalize the State on the 

basis of such error rate in any manner other than the reduction of payments provided for under clause (i)(V). 

‘‘(iii) RULE OF CONSTRUCTION.—Nothing in this paragraph shall be construed as relieving a State that elects to 

apply this paragraph from being subject to a penalty under 

section 1903(u), for payments made under the State Medicaid plan with respect to ineligible individuals and families that are determined to exceed the error rate permitted 

under that section (as determined without regard to the 

error rate determined under clause (i)(II)). 

‘‘(iv) ERROR RATE DEFINED.—In this subparagraph, the 

term ‘error rate’ means the rate of erroneous excess payments for medical assistance (as defined in section 

1903(u)(1)(D)) for the period involved, except that such 

payments shall be limited to individuals for which eligibility determinations are made under this paragraph and 

except that in applying this paragraph under title XXI, 


bajohnson on PROD1PC69 with REPORTS
49 

there shall be substituted for references to provisions of 

this title corresponding provisions within title XXI. ‘‘(F) EXPRESS LANE AGENCY.— ‘‘(i) IN GENERAL.—In this paragraph, the term ‘Express 

Lane agency’ means a public agency that— ‘‘(I) is determined by the State Medicaid agency or 

the State CHIP agency (as applicable) to be capable of 

making the determinations of one or more eligibility 

requirements described in subparagraph (A)(i); ‘‘(II) is identified in the State Medicaid plan or the 

State CHIP plan; and ‘‘(III) notifies the child’s family— ‘‘(aa) of the information which shall be disclosed 

in accordance with this paragraph; ‘‘(bb) that the information disclosed will be used 

solely for purposes of determining eligibility for 

medical assistance under the State Medicaid plan 

or for child health assistance under the State 

CHIP plan; and ‘‘(cc) that the family may elect to not have the 

information disclosed for such purposes; and ‘‘(IV) enters into, or is subject to, an interagency 

agreement to limit the disclosure and use of the information disclosed. ‘‘(ii) INCLUSION OF SPECIFIC PUBLIC AGENCIES.—Such 

term includes the following: ‘‘(I) A public agency that determines eligibility for 

assistance under any of the following: ‘‘(aa) The temporary assistance for needy families program funded under part A of title IV. ‘‘(bb) A State program funded under part D of 

title IV. ‘‘(cc) The State Medicaid plan. 

‘‘(dd) The State CHIP plan. 

‘‘(ee) The Food Stamp Act of 1977 (7 U.S.C. 

2011 et seq.). 

‘‘(ff) The Head Start Act (42 U.S.C. 9801 et 

seq.). 

‘‘(gg) The Richard B. Russell National School 

Lunch Act (42 U.S.C. 1751 et seq.). 

‘‘(hh) The Child Nutrition Act of 1966 (42 U.S.C. 

1771 et seq.). 

‘‘(ii) The Child Care and Development Block 

Grant Act of 1990 (42 U.S.C. 9858 et seq.). 

‘‘(jj) The Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11301 et seq.). 

‘‘(kk) The United States Housing Act of 1937 (42 

U.S.C. 1437 et seq.). 

‘‘(ll) The Native American Housing Assistance 

and Self-Determination Act of 1996 (25 U.S.C. 

4101 et seq.). 

‘‘(II) A State-specified governmental agency that has 

fiscal liability or legal responsibility for the accuracy of 

the eligibility determination findings relied on by the 

State. 


bajohnson on PROD1PC69 with REPORTS
50 

‘‘(III) A public agency that is subject to an interagency agreement limiting the disclosure and use of 

the information disclosed for purposes of determining 

eligibility under the State Medicaid plan or the State 

CHIP plan. 

‘‘(iii) EXCLUSIONS.—Such term does not include an agency that determines eligibility for a program established 

under the Social Services Block Grant established under 

title XX or a private, for-profit organization. 

‘‘(iv) RULES OF CONSTRUCTION.—Nothing in this paragraph shall be construed as—

‘‘(I) exempting a State Medicaid agency from complying with the requirements of section 1902(a)(4) relating to merit-based personnel standards for employees of the State Medicaid agency and safeguards 

against conflicts of interest); or 

‘‘(II) authorizing a State Medicaid agency that elects 

to use Express Lane agencies under this subparagraph 

to use the Express Lane option to avoid complying 

with such requirements for purposes of making eligibility determinations under the State Medicaid plan. 

‘‘(v) ADDITIONAL DEFINITIONS.—In this paragraph: 

‘‘(I) STATE.—The term ‘State’ means 1 of the 50 

States or the District of Columbia. 

‘‘(II) STATE CHIP AGENCY.—The term ‘State CHIP 

agency’ means the State agency responsible for administering the State CHIP plan. 

‘‘(III) STATE CHIP PLAN.—The term ‘State CHIP 

plan’ means the State child health plan established 

under title XXI and includes any waiver of such plan. 

‘‘(IV) STATE MEDICAID AGENCY.—The term ‘State 

Medicaid agency’ means the State agency responsible 

for administering the State Medicaid plan. 

‘‘(V) STATE MEDICAID PLAN.—The term ‘State Medicaid plan’ means the State plan established under 

title XIX and includes any waiver of such plan. 

‘‘(G) CHILD DEFINED.—For purposes of this paragraph, the 

term ‘child’ means an individual under 19 years of age, or, at 

the option of a State, such higher age, not to exceed 21 years 

of age, as the State may elect. 

‘‘(H) APPLICATION.—This paragraph shall not apply to with 

respect to eligibility determinations made after September 30, 

2012.’’. 

(2) CHIP.—Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is 

amended by redesignating subparagraphs (B), (C), and (D) as 

subparagraphs (C), (D), and (E), respectively, and by inserting 

after subparagraph (A) the following new subparagraph: 

‘‘(B) Section 1902(e)(13) (relating to the State option to 

rely on findings from an Express Lane agency to help 

evaluate a child’s eligibility for medical assistance).’’. 

(b) EVALUATION AND REPORT.—

(1) EVALUATION.—The Secretary shall conduct, by grant, contract, or interagency agreement, a comprehensive, independent 

evaluation of the option provided under the amendments made 


bajohnson on PROD1PC69 with REPORTS
51 

by subsection (a). Such evaluation shall include an analysis of 

the effectiveness of the option, and shall include— (A) obtaining a statistically valid sample of the children 

who were enrolled in the State Medicaid plan or the State 

CHIP plan through reliance on a finding made by an Express Lane agency and determining the percentage of children who were erroneously enrolled in such plans; 

(B) determining whether enrolling children in such plans 

through reliance on a finding made by an Express Lane 

agency improves the ability of a State to identify and enroll low-income, uninsured children who are eligible but 

not enrolled in such plans; 

(C) evaluating the administrative costs or savings related to identifying and enrolling children in such plans 

through reliance on such findings, and the extent to which 

such costs differ from the costs that the State otherwise 

would have incurred to identify and enroll low-income, uninsured children who are eligible but not enrolled in such 

plans; and 

(D) any recommendations for legislative or administrative changes that would improve the effectiveness of enrolling children in such plans through reliance on such 

findings. 

(2) REPORT TO CONGRESS.—Not later than September 30, 

2011, the Secretary shall submit a report to Congress on the 

results of the evaluation under paragraph (1). 

(3) FUNDING.— (A) IN GENERAL.—Out of any funds in the Treasury not 

otherwise appropriated, there is appropriated to the Secretary to carry out the evaluation under this subsection 

$5,000,000 for the period of fiscal years 2008 through 

2011. 

(B) BUDGET AUTHORITY.—Subparagraph (A) constitutes 

budget authority in advance of appropriations Act and represents the obligation of the Federal Government to provide for the payment of such amount to conduct the evaluation under this subsection. 

(c) ELECTRONIC TRANSMISSION OF INFORMATION.—Section 1902 

(42 U.S.C. 1396a) is amended by adding at the end the following 

new subsection: ‘‘(dd) ELECTRONIC TRANSMISSION OF INFORMATION.—If the State 

agency determining eligibility for medical assistance under this 

title or child health assistance under title XXI verifies an element 

of eligibility based on information from an Express Lane Agency 

(as defined in subsection (e)(13)(F)), or from another public agency, 

then the applicant’s signature under penalty of perjury shall not be 

required as to such element. Any signature requirement for an application for medical assistance may be satisfied through an electronic signature, as defined in section 1710(1) of the Government 

Paperwork Elimination Act (44 U.S.C. 3504 note). The requirements of subparagraphs (A) and (B) of section 1137(d)(2) may be 

met through evidence in digital or electronic form.’’. (d) AUTHORIZATION OF INFORMATION DISCLOSURE.—

(1) IN GENERAL.—Title XIX is amended—

(A) by redesignating section 1939 as section 1940; and 


bajohnson on PROD1PC69 with REPORTS
52 

(B) by inserting after section 1938 the following new section: 

‘‘SEC. 1939. AUTHORIZATION TO RECEIVE RELEVANT INFORMATION. 

‘‘(a) IN GENERAL.—Notwithstanding any other provision of law, a 

Federal or State agency or private entity in possession of the 

sources of data directly relevant to eligibility determinations under 

this title (including eligibility files maintained by Express Lane 

agencies described in section 1902(e)(13)(F), information described 

in paragraph (2) or (3) of section 1137(a), vital records information 

about births in any State, and information described in sections 

453(i) and 1902(a)(25)(I)) is authorized to convey such data or information to the State agency administering the State plan under this 

title, to the extent such conveyance meets the requirements of subsection (b). ‘‘(b) REQUIREMENTS FOR CONVEYANCE.—Data or information may 

be conveyed pursuant to subsection (a) only if the following requirements are met: ‘‘(1) The individual whose circumstances are described in the 

data or information (or such individual’s parent, guardian, 

caretaker relative, or authorized representative) has either provided advance consent to disclosure or has not objected to disclosure after receiving advance notice of disclosure and a reasonable opportunity to object. ‘‘(2) Such data or information are used solely for the purposes of—

‘‘(A) identifying individuals who are eligible or potentially eligible for medical assistance under this title and 

enrolling or attempting to enroll such individuals in the 

State plan; and ‘‘(B) verifying the eligibility of individuals for medical assistance under the State plan. ‘‘(3) An interagency or other agreement, consistent with 

standards developed by the Secretary— ‘‘(A) prevents the unauthorized use, disclosure, or modification of such data and otherwise meets applicable Federal requirements safeguarding privacy and data security; 

and ‘‘(B) requires the State agency administering the State 

plan to use the data and information obtained under this 

section to seek to enroll individuals in the plan. ‘‘(c) PENALTIES FOR IMPROPER DISCLOSURE.—

‘‘(1) CIVIL MONEY PENALTY.—A private entity described in the 

subsection (a) that publishes, discloses, or makes known in any 

manner, or to any extent not authorized by Federal law, any 

information obtained under this section is subject to a civil 

money penalty in an amount equal to $10,000 for each such 

unauthorized publication or disclosure. The provisions of section 1128A (other than subsections (a) and (b) and the second 

sentence of subsection (f)) shall apply to a civil money penalty 

under this paragraph in the same manner as such provisions 

apply to a penalty or proceeding under section 1128A(a). 

‘‘(2) CRIMINAL PENALTY.—A private entity described in the 

subsection (a) that willfully publishes, discloses, or makes 

known in any manner, or to any extent not authorized by Federal law, any information obtained under this section shall be 


bajohnson on PROD1PC69 with REPORTS
53 

fined not more than $10,000 or imprisoned not more than 1 

year, or both, for each such unauthorized publication or disclosure. 

‘‘(d) RULE OF CONSTRUCTION.—The limitations and requirements 

that apply to disclosure pursuant to this section shall not be construed to prohibit the conveyance or disclosure of data or information otherwise permitted under Federal law (without regard to this 

section).’’. 

(2) CONFORMING AMENDMENT TO TITLE XXI.—Section 

2107(e)(1) (42 U.S.C. 1397gg(e)(1)), as amended by subsection 

(a)(2), is amended by adding at the end the following new subparagraph: 

‘‘(F) Section 1939 (relating to authorization to receive 

data directly relevant to eligibility determinations).’’. 

(3) CONFORMING AMENDMENT TO PROVIDE ACCESS TO DATA

ABOUT ENROLLMENT IN INSURANCE FOR PURPOSES OF EVALUATING APPLICATIONS AND FOR CHIP.—Section 1902(a)(25)(I)(i) 

(42 U.S.C. 1396a(a)(25)(I)(i)) is amended—

(A) by inserting ‘‘(and, at State option, individuals who 

apply or whose eligibility for medical assistance is being 

evaluated in accordance with section 1902(e)(13)(D))’’ after 

‘‘with respect to individuals who are eligible’’; and 

(B) by inserting ‘‘under this title (and, at State option, 

child health assistance under title XXI)’’ after ‘‘the State 

plan’’. 

(e) AUTHORIZATION FOR STATES ELECTING EXPRESS LANE OPTION

TO RECEIVE CERTAIN DATA DIRECTLY RELEVANT TO DETERMINING

ELIGIBILITY AND CORRECT AMOUNT OF ASSISTANCE.—The Secretary 

shall enter into such agreements as are necessary to permit a State 

that elects the Express Lane option under section 1902(e)(13) of the 

Social Security Act to receive data directly relevant to eligibility determinations and determining the correct amount of benefits under 

a State child health plan under CHIP or a State plan under Medicaid from the following: 

(1) The National Directory of New Hires established under 

section 453(i) of the Social Security Act (42 U.S.C. 653(i)). 

(2) Data regarding enrollment in insurance that may help to 

facilitate outreach and enrollment under the State Medicaid 

plan, the State CHIP plan, and such other programs as the 

Secretary may specify. 

(f) EFFECTIVE DATE.—The amendments made by this section are 

effective on January 1, 2008. 

Subtitle B—Reducing Barriers to 

Enrollment 

SEC. 211. VERIFICATION OF DECLARATION OF CITIZENSHIP OR NATIONALITY FOR PURPOSES OF ELIGIBILITY FOR MEDICAID AND CHIP. 

(a) STATE OPTION TO VERIFY DECLARATION OF CITIZENSHIP OR

NATIONALITY FOR PURPOSES OF ELIGIBILITY FOR MEDICAID

THROUGH VERIFICATION OF NAME AND SOCIAL SECURITY NUM- BER.—

(1) ALTERNATIVE TO DOCUMENTATION REQUIREMENT.—


bajohnson on PROD1PC69 with REPORTS
54 

(A) IN GENERAL.—Section 1902 (42 U.S.C. 1396a), as 

amended by section 203(c), is amended—

(i) in subsection (a)(46)—

(I) by inserting ‘‘(A)’’ after ‘‘(46)’’; 

(II) by adding ‘‘and’’ after the semicolon; and 

(III) by adding at the end the following new subparagraph: 

‘‘(B) provide, with respect to an individual declaring to be a 

citizen or national of the United States for purposes of establishing eligibility under this title, that the State shall satisfy 

the requirements of—

‘‘(i) section 1903(x); or 

‘‘(ii) subsection (ee);’’; and 

(ii) by adding at the end the following new subsection: 

‘‘(ee)(1) For purposes of subsection (a)(46)(B)(ii), the requirements 

of this subsection with respect to an individual declaring to be a 

citizen or national of the United States for purposes of establishing 

eligibility under this title, are, in lieu of requiring the individual 

to present satisfactory documentary evidence of citizenship or nationality under section 1903(x) (if the individual is not described in 

paragraph (2) of that section), as follows: 

‘‘(A) The State submits the name and social security number 

of the individual to the Commissioner of Social Security as part 

of the program established under paragraph (2). 

‘‘(B) If the State receives notice from the Commissioner of 

Social Security that the name or social security number of the 

individual is invalid—

‘‘(i) the State makes a reasonable effort to identify and 

address the causes of such invalid match, including 

through typographical or other clerical errors, by contacting the individual to confirm the accuracy of the name 

or social security number, respectively, submitted, and by 

taking such additional actions as the Secretary, through 

regulation or other guidance, or the State may identify, 

and continues to provide the individual with medical assistance while making such effort; and 

‘‘(ii) in the case that the name or social security number 

of the individual remains invalid after such reasonable efforts, the State—

‘‘(I) notifies the individual of such fact; 

‘‘(II) provides the individual with a period of 90 days 

from the date on which the notice required under subclause (I) is received by the individual to either 

present satisfactory documentary evidence of citizenship or nationality (as defined in section 1903(x)(3)) or 

cure the invalid determination with the Commissioner 

of Social Security (and continues to provide the individual with medical assistance during such 90–day period); and 

‘‘(III) disenrolls the individual from the State plan 

under this title within 30 days after the end of such 

90–day period if no such documentary evidence is presented or if such invalid determination is not cured. 


bajohnson on PROD1PC69 with REPORTS
55 

‘‘(2)(A) Each State electing to satisfy the requirements of this 

subsection for purposes of section 1902(a)(46)(B) shall establish a 

program under which the State submits each month to the Commissioner of Social Security for verification the name and social security number of each individual newly enrolled in the State plan 

under this title that month who is not described in section 

1903(x)(2). ‘‘(B) In establishing the State program under this paragraph, the 

State may enter into an agreement with the Commissioner of Social Security— ‘‘(i) to provide for the electronic submission and verification, 

through an on-line system or otherwise, of the name and social 

security number of an individual enrolled in the State plan 

under this title; ‘‘(ii) to submit to the Commissioner the names and social security numbers of such individuals on a batch basis, provided 

that such batches are submitted at least on a monthly basis; 

or ‘‘(iii) to provide for the verification of the names and social 

security numbers of such individuals through such other method as agreed to by the State and the Commissioner and approved by the Secretary, provided that such method is no more 

burdensome for individuals to comply with than any burdens 

that may apply under a method described in clause (i) or (ii). ‘‘(C) The program established under this paragraph shall provide 

that, in the case of any individual who is required to submit a social security number to the State under subparagraph (A) and who 

is unable to provide the State with such number, shall be provided 

with at least the reasonable opportunity to present satisfactory documentary evidence of citizenship or nationality (as defined in section 1903(x)(3)) as is provided under clauses (i) and (ii) of section 

1137(d)(4)(A) to an individual for the submittal to the State of evidence indicating a satisfactory immigration status. ‘‘(3)(A) The State agency implementing the plan approved under 

this title shall, at such times and in such form as the Secretary 

may specify, provide information on the percentage each month 

that the invalid names and numbers submitted bears to the total 

submitted for verification. For purposes of the previous sentence, a 

name or social security number of an individual shall be treated as 

invalid and included in the determination of such percentage only 

if—

‘‘(i) the name or social security number, respectively, submitted by the individual does not match Social Security Administration records; 

‘‘(ii) the inconsistency between the name or number, respectively, so submitted and the Social Security Administration 

records could not be resolved by the State; 

‘‘(iii) the individual was provided with a reasonable period of 

time to resolve the inconsistency with the Social Security Administration or provide satisfactory documentation of citizenship and did not successfully resolve such inconsistency; and 

‘‘(iv) payment has been made for an item or service furnished 

to the individual under this title. 

‘‘(B) If, for any fiscal year, the average monthly percentage determined under subparagraph (A) is greater than 3 percent—


bajohnson on PROD1PC69 with REPORTS
56 

‘‘(i) the State shall develop and adopt a corrective plan to review its procedures for verifying the identities of individuals 

seeking to enroll in the State plan under this title and to identify and implement changes in such procedures to improve 

their accuracy; and ‘‘(ii) pay to the Secretary an amount equal to the amount 

which bears the same ratio to the total payments under the 

State plan for the fiscal year for providing medical assistance 

to individuals who provided invalid information as the number 

of individuals with invalid information in excess of 3 percent 

of such total submitted bears to the total number of individuals 

with invalid information. ‘‘(C) The Secretary may waive, in certain limited cases, all or 

part of the payment under subparagraph (B)(ii) if the State is unable to reach the allowable error rate despite a good faith effort by 

such State. ‘‘(D) This paragraph shall not apply to a State for a fiscal year 

if there is an agreement described in paragraph (2)(B) in effect as 

of the close of the fiscal year. ‘‘(4) Nothing in this subsection shall affect the rights of any individual under this title to appeal any disenrollment from a State 

plan.’’. (B) COSTS OF IMPLEMENTING AND MAINTAINING SYS- TEM.—Section 1903(a)(3) (42 U.S.C. 1396b(a)(3)) is amended— (i) by striking ‘‘plus’’ at the end of subparagraph (E) 

and inserting ‘‘and’’, and 

(ii) by adding at the end the following new subparagraph: ‘‘(F)(i) 90 percent of the sums expended during the quarter as are attributable to the design, development, or installation of such mechanized verification and information 

retrieval systems as the Secretary determines are necessary to implement section 1902(ee) (including a system 

described in paragraph (2)(B) thereof), and 

‘‘(ii) 75 percent of the sums expended during the quarter 

as are attributable to the operation of systems to which 

clause (i) applies, plus’’. 

(2) LIMITATION ON WAIVER AUTHORITY.—Notwithstanding any 

provision of section 1115 of the Social Security Act (42 U.S.C. 

1315), or any other provision of law, the Secretary may not 

waive the requirements of section 1902(a)(46)(B) of such Act 

(42 U.S.C. 1396a(a)(46)(B)) with respect to a State. 

(3) CONFORMING AMENDMENTS.—Section 1903 (42 U.S.C. 

1396b) is amended—

(A) in subsection (i)(22), by striking ‘‘subsection (x)’’ and 

inserting ‘‘section 1902(a)(46)(B)’’; and 

(B) in subsection (x)(1), by striking ‘‘subsection (i)(22)’’

and inserting ‘‘section 1902(a)(46)(B)(i)’’. (b) CLARIFICATION OF REQUIREMENTS RELATING TO PRESEN- TATION OF SATISFACTORY DOCUMENTARY EVIDENCE OF CITIZENSHIP

OR NATIONALITY.— (1) ACCEPTANCE OF DOCUMENTARY EVIDENCE ISSUED BY A

FEDERALLY RECOGNIZED INDIAN TRIBE.—Section 1903(x)(3)(B) 

(42 U.S.C. 1396b(x)(3)(B)) is amended—


bajohnson on PROD1PC69 with REPORTS
57 

(A) by redesignating clause (v) as clause (vi); and 

(B) by inserting after clause (iv), the following new 

clause: ‘‘(v)(I) Except as provided in subclause (II), a document 

issued by a federally recognized Indian tribe evidencing membership or enrollment in, or affiliation with, such tribe (such as 

a tribal enrollment card or certificate of degree of Indian 

blood). ‘‘(II) With respect to those federally recognized Indian tribes 

located within States having an international border whose 

membership includes individuals who are not citizens of the 

United States, the Secretary shall, after consulting with such 

tribes, issue regulations authorizing the presentation of such 

other forms of documentation (including tribal documentation, 

if appropriate) that the Secretary determines to be satisfactory 

documentary evidence of citizenship or nationality for purposes 

of satisfying the requirement of this subsection.’’. (2) REQUIREMENT TO PROVIDE REASONABLE OPPORTUNITY TO

PRESENT SATISFACTORY DOCUMENTARY EVIDENCE.—Section 

1903(x) (42 U.S.C. 1396b(x)) is amended by adding at the end 

the following new paragraph: 

‘‘(4) In the case of an individual declaring to be a citizen or national of the United States with respect to whom a State requires 

the presentation of satisfactory documentary evidence of citizenship 

or nationality under section 1902(a)(46)(B)(i), the individual shall 

be provided at least the reasonable opportunity to present satisfactory documentary evidence of citizenship or nationality under this 

subsection as is provided under clauses (i) and (ii) of section 

1137(d)(4)(A) to an individual for the submittal to the State of evidence indicating a satisfactory immigration status.’’. 

(3) CHILDREN BORN IN THE UNITED STATES TO MOTHERS ELIGIBLE FOR MEDICAID.—

(A) CLARIFICATION OF RULES.—Section 1903(x) (42 U.S.C. 

1396b(x)), as amended by paragraph (2), is amended— (i) in paragraph (2)— (I) in subparagraph (C), by striking ‘‘or’’ at the 

end; 

(II) by redesignating subparagraph (D) as subparagraph (E); and 

(III) by inserting after subparagraph (C) the following new subparagraph: ‘‘(D) pursuant to the application of section 1902(e)(4) (and, in 

the case of an individual who is eligible for medical assistance 

on such basis, the individual shall be deemed to have provided 

satisfactory documentary evidence of citizenship or nationality 

and shall not be required to provide further documentary evidence on any date that occurs during or after the period in 

which the individual is eligible for medical assistance on such 

basis); or’’; and 

(ii) by adding at the end the following new paragraph: 

‘‘(5) Nothing in subparagraph (A) or (B) of section 1902(a)(46), 

the preceding paragraphs of this subsection, or the Deficit Reduction Act of 2005, including section 6036 of such Act, shall be construed as changing the requirement of section 1902(e)(4) that a 


bajohnson on PROD1PC69 with REPORTS
58 

child born in the United States to an alien mother for whom medical assistance for the delivery of such child is available as treatment of an emergency medical condition pursuant to subsection (v) 

shall be deemed eligible for medical assistance during the first year 

of such child’s life.’’. 

(B) STATE REQUIREMENT TO ISSUE SEPARATE IDENTIFICATION NUMBER.—Section 1902(e)(4) (42 U.S.C. 1396a(e)(4)) 

is amended by adding at the end the following new sentence: ‘‘Notwithstanding the preceding sentence, in the 

case of a child who is born in the United States to an alien 

mother for whom medical assistance for the delivery of the 

child is made available pursuant to section 1903(v), the 

State immediately shall issue a separate identification 

number for the child upon notification by the facility at 

which such delivery occurred of the child’s birth.’’. 

(4) TECHNICAL AMENDMENTS.—Section 1903(x)(2) (42 U.S.C. 

1396b(x)) is amended—

(A) in subparagraph (B)—

(i) by realigning the left margin of the matter preceding clause (i) 2 ems to the left; and 

(ii) by realigning the left margins of clauses (i) and 

(ii), respectively, 2 ems to the left; and 

(B) in subparagraph (C)—

(i) by realigning the left margin of the matter preceding clause (i) 2 ems to the left; and 

(ii) by realigning the left margins of clauses (i) and 

(ii), respectively, 2 ems to the left. 

(c) APPLICATION OF DOCUMENTATION SYSTEM TO CHIP.—

(1) IN GENERAL.—Section 2105(c) (42 U.S.C. 1397ee(c)), as 

amended by sections 114(a) and 116(c), is amended by adding 

at the end the following new paragraph: 

‘‘(10) CITIZENSHIP DOCUMENTATION REQUIREMENTS.—

‘‘(A) IN GENERAL.—No payment may be made under this 

section with respect to an individual who has, or is, declared to be a citizen or national of the United States for 

purposes of establishing eligibility under this title unless 

the State meets the requirements of section 1902(a)(46)(B) 

with respect to the individual. 

‘‘(B) ENHANCED PAYMENTS.—Notwithstanding subsection 

(b), the enhanced FMAP with respect to payments under 

subsection (a) for expenditures described in clause (i) or (ii) 

of section 1903(a)(3)(F) necessary to comply with subparagraph (A) shall in no event be less than 90 percent and 75 

percent, respectively.’’. 

(2) NONAPPLICATION OF ADMINISTRATIVE EXPENDITURES

CAP.—Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)(C)), as 

amended by section 202(b), is amended by adding at the end 

the following: 

‘‘(ii) EXPENDITURES TO COMPLY WITH CITIZENSHIP OR

NATIONALITY VERIFICATION REQUIREMENTS.—Expenditures necessary for the State to comply with paragraph (9)(A).’’. 

(d) EFFECTIVE DATE.—

(1) IN GENERAL.—


bajohnson on PROD1PC69 with REPORTS
59 

(A) IN GENERAL.—Except as provided in subparagraph 

(B), the amendments made by this section shall take effect 

on October 1, 2008. 

(B) TECHNICAL AMENDMENTS.—The amendments made 

by— (i) paragraphs (1), (2), and (3) of subsection (b) shall 

take effect as if included in the enactment of section 

6036 of the Deficit Reduction Act of 2005 (Public Law 

109–171; 120 Stat. 80); and 

(ii) paragraph (4) of subsection (b) shall take effect 

as if included in the enactment of section 405 of division B of the Tax Relief and Health Care Act of 2006 

(Public Law 109–432; 120 Stat. 2996). 

(2) RESTORATION OF ELIGIBILITY.—In the case of an individual who, during the period that began on July 1, 2006, and 

ends on October 1, 2008, was determined to be ineligible for 

medical assistance under a State Medicaid plan, including any 

waiver of such plan, solely as a result of the application of subsections (i)(22) and (x) of section 1903 of the Social Security 

Act (as in effect during such period), but who would have been 

determined eligible for such assistance if such subsections, as 

amended by subsection (b), had applied to the individual, a 

State may deem the individual to be eligible for such assistance as of the date that the individual was determined to be 

ineligible for such medical assistance on such basis. 

(3) SPECIAL TRANSITION RULE FOR INDIANS.—During the period that begins on July 1, 2006, and ends on the effective date 

of final regulations issued under subclause (II) of section 

1903(x)(3)(B)(v) of the Social Security Act (42 U.S.C. 

1396b(x)(3)(B)(v)) (as added by subsection (b)(1)(B)), an individual who is a member of a federally-recognized Indian tribe 

described in subclause (II) of that section who presents a document described in subclause (I) of such section that is issued 

by such Indian tribe, shall be deemed to have presented satisfactory evidence of citizenship or nationality for purposes of 

satisfying the requirement of subsection (x) of section 1903 of 

such Act. 

SEC. 212. REDUCING ADMINISTRATIVE BARRIERS TO ENROLLMENT. 

Section 2102(b) (42 U.S.C. 1397bb(b)) is amended— (1) by redesignating paragraph (4) as paragraph (5); and 

(2) by inserting after paragraph (3) the following new paragraph: 

‘‘(4) REDUCTION OF ADMINISTRATIVE BARRIERS TO ENROLLMENT.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), the plan 

shall include a description of the procedures used to reduce 

administrative barriers to the enrollment of children and 

pregnant women who are eligible for medical assistance 

under title XIX or for child health assistance or health 

benefits coverage under this title. Such procedures shall be 

established and revised as often as the State determines 

appropriate to take into account the most recent information available to the State identifying such barriers. 

‘‘(B) DEEMED COMPLIANCE IF JOINT APPLICATION AND RENEWAL PROCESS THAT PERMITS APPLICATION OTHER THAN IN


bajohnson on PROD1PC69 with REPORTS
60 

PERSON.—A State shall be deemed to comply with subparagraph (A) if the State’s application and renewal forms and 

supplemental forms (if any) and information verification 

process is the same for purposes of establishing and renewing eligibility for children and pregnant women for 

medical assistance under title XIX and child health assistance under this title, and such process does not require an 

application to be made in person or a face-to-face interview.’’. 

SEC. 213. MODEL OF INTERSTATE COORDINATED ENROLLMENT AND 

COVERAGE PROCESS. 

(a) IN GENERAL.—In order to assure continuity of coverage of 

low-income children under the Medicaid program and the State 

Children’s Health Insurance Program (CHIP), not later than 18 

months after the date of the enactment of this Act, the Secretary 

of Health and Human Services, in consultation with State Medicaid 

and CHIP directors and organizations representing program beneficiaries, shall develop a model process for the coordination of the 

enrollment, retention, and coverage under such programs of children who, because of migration of families, emergency evacuations, 

natural or other disasters, public health emergencies, educational 

needs, or otherwise, frequently change their State of residency or 

otherwise are temporarily located outside of the State of their residency. 

(b) REPORT TO CONGRESS.—After development of such model 

process, the Secretary of Health and Human Services shall submit 

to Congress a report describing additional steps or authority needed to make further improvements to coordinate the enrollment, retention, and coverage under CHIP and Medicaid of children described in subsection (a). 

TITLE III—REDUCING BARRIERS TO 

PROVIDING PREMIUM ASSISTANCE 

Subtitle A—Additional State Option for 

Providing Premium Assistance 

SEC. 301. ADDITIONAL STATE OPTION FOR PROVIDING PREMIUM ASSISTANCE. 

(a) CHIP.—

(1) IN GENERAL.—Section 2105(c) (42 U.S.C. 1397ee(c)), as 

amended by sections 114(a), 116(c), and 211(c), is amended by 

adding at the end the following: 

‘‘(11) STATE OPTION TO OFFER PREMIUM ASSISTANCE.—

‘‘(A) IN GENERAL.—A State may elect to offer a premium 

assistance subsidy (as defined in subparagraph (C)) for 

qualified employer-sponsored coverage (as defined in subparagraph (B)) to all targeted low-income children who are 

eligible for child health assistance under the plan and 

have access to such coverage in accordance with the requirements of this paragraph. No subsidy shall be provided to a targeted low-income child under this paragraph 

unless the child (or the child’s parent) voluntarily elects to 


bajohnson on PROD1PC69 with REPORTS
61 

receive such a subsidy. A State may not require such an 

election as a condition of receipt of child health assistance. ‘‘(B) QUALIFIED EMPLOYER-SPONSORED COVERAGE.— ‘‘(i) IN GENERAL.—Subject to clause (ii), in this paragraph, the term ‘qualified employer-sponsored coverage’ means a group health plan or health insurance 

coverage offered through an employer— ‘‘(I) that qualifies as creditable coverage as a 

group health plan under section 2701(c)(1) of the 

Public Health Service Act; ‘‘(II) for which the employer contribution toward 

any premium for such coverage is at least 40 percent; and ‘‘(III) that is offered to all individuals in a manner that would be considered a nondiscriminatory 

eligibility classification for purposes of paragraph 

(3)(A)(ii) of section 105(h) of the Internal Revenue 

Code of 1986 (but determined without regard to 

clause (i) of subparagraph (B) of such paragraph). ‘‘(ii) EXCEPTION.—Such term does not include coverage consisting of—

‘‘(I) benefits provided under a health flexible 

spending arrangement (as defined in section 

106(c)(2) of the Internal Revenue Code of 1986); or 

‘‘(II) a high deductible health plan (as defined in 

section 223(c)(2) of such Code), without regard to 

whether the plan is purchased in conjunction with 

a health savings account (as defined under section 

223(d) of such Code). 

‘‘(C) PREMIUM ASSISTANCE SUBSIDY.—

‘‘(i) IN GENERAL.—In this paragraph, the term ‘premium assistance subsidy’ means, with respect to a targeted low-income child, the amount equal to the difference between the employee contribution required 

for enrollment only of the employee under qualified 

employer-sponsored coverage and the employee contribution required for enrollment of the employee and 

the child in such coverage, less any applicable premium cost-sharing applied under the State child 

health plan (subject to the limitations imposed under 

section 2103(e), including the requirement to count the 

total amount of the employee contribution required for 

enrollment of the employee and the child in such coverage toward the annual aggregate cost-sharing limit 

applied under paragraph (3)(B) of such section). 

‘‘(ii) STATE PAYMENT OPTION.—A State may provide 

a premium assistance subsidy either as reimbursement to an employee for out-of-pocket expenditures or, 

subject to clause (iii), directly to the employee’s employer. ‘‘(iii) EMPLOYER OPT-OUT.—An employer may notify 

a State that it elects to opt-out of being directly paid 

a premium assistance subsidy on behalf of an employee. In the event of such a notification, an employer 

shall withhold the total amount of the employee conVerDate Aug 31 2005 05:23 Sep 25, 2007 Jkt 059008 PO 00000 Frm 00063 Fmt 6659 Sfmt 6602 E:\HR\OC\HR346.XXX HR346

bajohnson on PROD1PC69 with REPORTS
62 

tribution required for enrollment of the employee and 

the child in the qualified employer-sponsored coverage 

and the State shall pay the premium assistance subsidy directly to the employee. ‘‘(iv) TREATMENT AS CHILD HEALTH ASSISTANCE.—Expenditures for the provision of premium assistance 

subsidies shall be considered child health assistance 

described in paragraph (1)(C) of subsection (a) for purposes of making payments under that subsection. ‘‘(D) APPLICATION OF SECONDARY PAYOR RULES.—The 

State shall be a secondary payor for any items or services 

provided under the qualified employer-sponsored coverage 

for which the State provides child health assistance under 

the State child health plan. ‘‘(E) REQUIREMENT TO PROVIDE SUPPLEMENTAL COVERAGE

FOR BENEFITS AND COST-SHARING PROTECTION PROVIDED

UNDER THE STATE CHILD HEALTH PLAN.—

‘‘(i) IN GENERAL.—Notwithstanding section 

2110(b)(1)(C), the State shall provide for each targeted 

low-income child enrolled in qualified employer-sponsored coverage, supplemental coverage consisting of— ‘‘(I) items or services that are not covered, or are 

only partially covered, under the qualified employer-sponsored coverage; and ‘‘(II) cost-sharing protection consistent with section 2103(e). ‘‘(ii) RECORD KEEPING REQUIREMENTS.—For purposes 

of carrying out clause (i), a State may elect to directly 

pay out-of-pocket expenditures for cost-sharing imposed under the qualified employer-sponsored coverage and collect or not collect all or any portion of 

such expenditures from the parent of the child. ‘‘(F) APPLICATION OF WAITING PERIOD IMPOSED UNDER

THE STATE.—Any waiting period imposed under the State 

child health plan prior to the provision of child health assistance to a targeted low-income child under the State 

plan shall apply to the same extent to the provision of a 

premium assistance subsidy for the child under this paragraph. 

‘‘(G) OPT-OUT PERMITTED FOR ANY MONTH.—A State shall 

establish a process for permitting the parent of a targeted 

low-income child receiving a premium assistance subsidy 

to disenroll the child from the qualified employer-sponsored coverage and enroll the child in, and receive child 

health assistance under, the State child health plan, effective on the first day of any month for which the child is 

eligible for such assistance and in a manner that ensures 

continuity of coverage for the child. 

‘‘(H) APPLICATION TO PARENTS.—If a State provides child 

health assistance or health benefits coverage to parents of 

a targeted low-income child in accordance with section 

2111(b), the State may elect to offer a premium assistance 

subsidy to a parent of a targeted low-income child who is 

eligible for such a subsidy under this paragraph in the 

same manner as the State offers such a subsidy for the enVerDate Aug 31 2005 05:23 Sep 25, 2007 Jkt 059008 PO 00000 Frm 00064 Fmt 6659 Sfmt 6602 E:\HR\OC\HR346.XXX HR346

bajohnson on PROD1PC69 with REPORTS
63 

rollment of the child in qualified employer-sponsored coverage, except that—

‘‘(i) the amount of the premium assistance subsidy 

shall be increased to take into account the cost of the 

enrollment of the parent in the qualified employersponsored coverage or, at the option of the State if the 

State determines it cost-effective, the cost of the enrollment of the child’s family in such coverage; and 

‘‘(ii) any reference in this paragraph to a child is 

deemed to include a reference to the parent or, if applicable under clause (i), the family of the child. 

‘‘(I) ADDITIONAL STATE OPTION FOR PROVIDING PREMIUM

ASSISTANCE.—

‘‘(i) IN GENERAL.—A State may establish an employer-family premium assistance purchasing pool for 

employers with less than 250 employees who have at 

least 1 employee who is a pregnant woman eligible for 

assistance under the State child health plan (including 

through the application of an option described in section 2112(f)) or a member of a family with at least 1 

targeted low-income child and to provide a premium 

assistance subsidy under this paragraph for enrollment in coverage made available through such pool. 

‘‘(ii) ACCESS TO CHOICE OF COVERAGE.—A State that 

elects the option under clause (i) shall identify and 

offer access to not less than 2 private health plans 

that are health benefits coverage that is equivalent to 

the benefits coverage in a benchmark benefit package 

described in section 2103(b) or benchmark-equivalent 

coverage that meets the requirements of section 

2103(a)(2) for employees described in clause (i). 

‘‘(iii) CLARIFICATION OF PAYMENT FOR ADMINISTRATIVE EXPENDITURES.—Nothing in this subparagraph 

shall be construed as permitting payment under this 

section for administrative expenditures attributable to 

the establishment or operation of such pool, except to 

the extent that such payment would otherwise be permitted under this title. 

‘‘(J) NO EFFECT ON PREMIUM ASSISTANCE WAIVER PROGRAMS.—Nothing in this paragraph shall be construed as 

limiting the authority of a State to offer premium assistance under section 1906 or 1906A, a waiver described in 

paragraph (2)(B) or (3), a waiver approved under section 

1115, or other authority in effect prior to the date of enactment of the Children’s Health Insurance Program Reauthorization Act of 2007. 

‘‘(K) NOTICE OF AVAILABILITY.—If a State elects to provide premium assistance subsidies in accordance with this 

paragraph, the State shall—

‘‘(i) include on any application or enrollment form 

for child health assistance a notice of the availability 

of premium assistance subsidies for the enrollment of 

targeted low-income children in qualified employersponsored coverage; 


bajohnson on PROD1PC69 with REPORTS
64 

‘‘(ii) provide, as part of the application and enrollment process under the State child health plan, information describing the availability of such subsidies 

and how to elect to obtain such a subsidy; and 

‘‘(iii) establish such other procedures as the State 

determines necessary to ensure that parents are fully 

informed of the choices for receiving child health assistance under the State child health plan or through 

the receipt of premium assistance subsidies. 

‘‘(L) APPLICATION TO QUALIFIED EMPLOYER-SPONSORED

BENCHMARK COVERAGE.—If a group health plan or health 

insurance coverage offered through an employer is certified 

by an actuary as health benefits coverage that is equivalent to the benefits coverage in a benchmark benefit package described in section 2103(b) or benchmark-equivalent 

coverage that meets the requirements of section 2103(a)(2), 

the State may provide premium assistance subsidies for 

enrollment of targeted low-income children in such group 

health plan or health insurance coverage in the same manner as such subsidies are provided under this paragraph 

for enrollment in qualified employer-sponsored coverage, 

but without regard to the requirement to provide supplemental coverage for benefits and cost-sharing protection 

provided under the State child health plan under subparagraph (E). 

‘‘(M) SATISFACTION OF COST-EFFECTIVENESS TEST.—Premium assistance subsidies for qualified employer-sponsored coverage offered under this paragraph shall be 

deemed to meet the requirement of subparagraph (A) of 

paragraph (3).’’. 

(2) DETERMINATION OF COST-EFFECTIVENESS FOR PREMIUM ASSISTANCE OR PURCHASE OF FAMILY COVERAGE.—

(A) IN GENERAL.—Section 2105(c)(3)(A) (42 U.S.C. 

1397ee(c)(3)(A)) is amended by striking ‘‘relative to’’ and 

all that follows through the comma and inserting ‘‘relative 

to 

‘‘(i) the amount of expenditures under the State 

child health plan, including administrative expenditures, that the State would have made to provide comparable coverage of the targeted low-income child involved or the family involved (as applicable); or 

‘‘(ii) the aggregate amount of expenditures that the 

State would have made under the State child health 

plan, including administrative expenditures, for providing coverage under such plan for all such children 

or families.’’. 

(B) NONAPPLICATION TO PREVIOUSLY APPROVED COVERAGE.—The amendment made by subparagraph (A) shall 

not apply to coverage the purchase of which has been approved by the Secretary under section 2105(c)(3) of the Social Security Act prior to the date of enactment of this Act. 

(b) MEDICAID.—Title XIX is amended by inserting after section 

1906 the following new section: 


bajohnson on PROD1PC69 with REPORTS
65 

‘‘PREMIUM ASSISTANCE OPTION FOR CHILDREN

‘‘SEC. 1906A. (a) IN GENERAL.—A State may elect to offer a premium assistance subsidy (as defined in subsection (c)) for qualified 

employer-sponsored coverage (as defined in subsection (b)) to all individuals under age 19 who are entitled to medical assistance 

under this title (and to the parent of such an individual) who have 

access to such coverage if the State meets the requirements of this 

section. 

‘‘(b) QUALIFIED EMPLOYER-SPONSORED COVERAGE.—

‘‘(1) IN GENERAL.—Subject to paragraph (2)), in this paragraph, the term ‘qualified employer-sponsored coverage’ means 

a group health plan or health insurance coverage offered 

through an employer—

‘‘(A) that qualifies as creditable coverage as a group 

health plan under section 2701(c)(1) of the Public Health 

Service Act; 

‘‘(B) for which the employer contribution toward any premium for such coverage is at least 40 percent; and 

‘‘(C) that is offered to all individuals in a manner that 

would be considered a nondiscriminatory eligibility classification for purposes of paragraph (3)(A)(ii) of section 

105(h) of the Internal Revenue Code of 1986 (but determined without regard to clause (i) of subparagraph (B) of 

such paragraph). 

‘‘(2) EXCEPTION.—Such term does not include coverage consisting of—

‘‘(A) benefits provided under a health flexible spending 

arrangement (as defined in section 106(c)(2) of the Internal 

Revenue Code of 1986); or 

‘‘(B) a high deductible health plan (as defined in section 

223(c)(2) of such Code), without regard to whether the plan 

is purchased in conjunction with a health savings account 

(as defined under section 223(d) of such Code). 

‘‘(3) TREATMENT AS THIRD PARTY LIABILITY.—The State shall 

treat the coverage provided under qualified employer-sponsored coverage as a third party liability under section 

1902(a)(25). 

‘‘(c) PREMIUM ASSISTANCE SUBSIDY.—In this section, the term 

‘premium assistance subsidy’ means the amount of the employee 

contribution for enrollment in the qualified employer-sponsored 

coverage by the individual under age 19 or by the individual’s family. Premium assistance subsidies under this section shall be considered, for purposes of section 1903(a), to be a payment for medical assistance. 

‘‘(d) VOLUNTARY PARTICIPATION.—

‘‘(1) EMPLOYERS.—Participation by an employer in a premium assistance subsidy offered by a State under this section 

shall be voluntary. An employer may notify a State that it 

elects to opt-out of being directly paid a premium assistance 

subsidy on behalf of an employee. 

‘‘(2) BENEFICIARIES.—No subsidy shall be provided to an individual under age 19 under this section unless the individual 

(or the individual’s parent) voluntarily elects to receive such a 

subsidy. A State may not require such an election as a condiVerDate Aug 31 2005 05:23 Sep 25, 2007 Jkt 059008 PO 00000 Frm 00067 Fmt 6659 Sfmt 6602 E:\HR\OC\HR346.XXX HR346

bajohnson on PROD1PC69 with REPORTS
66 

tion of receipt of medical assistance. State may not require, as 

a condition of an individual under age 19 (or the individual’s 

parent) being or remaining eligible for medical assistance 

under this title, apply for enrollment in qualified employersponsored coverage under this section. ‘‘(3) OPT-OUT PERMITTED FOR ANY MONTH.—A State shall establish a process for permitting the parent of an individual 

under age 19 receiving a premium assistance subsidy to 

disenroll the individual from the qualified employer-sponsored 

coverage. ‘‘(e) REQUIREMENT TO PAY PREMIUMS AND COST-SHARING AND

PROVIDE SUPPLEMENTAL COVERAGE.—In the case of the participation of an individual under age 19 (or the individual’s parent) in 

a premium assistance subsidy under this section for qualified employer-sponsored coverage, the State shall provide for payment of 

all enrollee premiums for enrollment in such coverage and all 

deductibles, coinsurance, and other cost-sharing obligations for 

items and services otherwise covered under the State plan under 

this title (exceeding the amount otherwise permitted under section 

1916 or, if applicable, section 1916A). The fact that an individual 

under age 19 (or a parent) elects to enroll in qualified employersponsored coverage under this section shall not change the individual’s (or parent’s) eligibility for medical assistance under the State 

plan, except insofar as section 1902(a)(25) provides that payments 

for such assistance shall first be made under such coverage.’’. (c) GAO STUDY AND REPORT.—Not later than January 1, 2009, 

the Comptroller General of the United States shall study cost and 

coverage issues relating to any State premium assistance programs 

for which Federal matching payments are made under title XIX or 

XXI of the Social Security Act, including under waiver authority, 

and shall submit a report to the Committee on Finance of the Senate and the Committee on Energy and Commerce of the House of 

Representatives on the results of such study. 

SEC. 302. OUTREACH, EDUCATION, AND ENROLLMENT ASSISTANCE. 

(a) REQUIREMENT TO INCLUDE DESCRIPTION OF OUTREACH, EDU- CATION, AND ENROLLMENT EFFORTS RELATED TO PREMIUM ASSIST- ANCE SUBSIDIES IN STATE CHILD HEALTH PLAN.—Section 2102(c) 

(42 U.S.C. 1397bb(c)) is amended by adding at the end the following new paragraph: ‘‘(3) PREMIUM ASSISTANCE SUBSIDIES.—In the case of a State 

that provides for premium assistance subsidies under the State 

child health plan in accordance with paragraphs (2)(B), (3), or 

(10) of section 2105(c), or a waiver approved under section 

1115, outreach, education, and enrollment assistance for families of children likely to be eligible for such subsidies, to inform 

such families of the availability of, and to assist them in enrolling their children in, such subsidies, and for employers likely 

to provide coverage that is eligible for such subsidies, including 

the specific, significant resources the State intends to apply to 

educate employers about the availability of premium assistance 

subsidies under the State child health plan.’’. 

(b) NONAPPLICATION OF 10 PERCENT LIMIT ON OUTREACH AND

CERTAIN OTHER EXPENDITURES.—Section 2105(c)(2)(C) (42 U.S.C. 

1397ee(c)(2)(C)), as amended by section 301(c)(2), is amended by 

adding at the end the following new clause: 


bajohnson on PROD1PC69 with REPORTS
67 

‘‘(iv) EXPENDITURES FOR OUTREACH TO INCREASE THE

ENROLLMENT OF CHILDREN UNDER THIS TITLE AND

TITLE xix THROUGH PREMIUM ASSISTANCE SUBSIDIES.— Expenditures for outreach activities to families of children likely to be eligible for premium assistance subsidies in accordance with paragraphs (2)(B), (3), or 

(10), or a waiver approved under section 1115, to inform such families of the availability of, and to assist 

them in enrolling their children in, such subsidies, and 

to employers likely to provide qualified employer-sponsored coverage (as defined in subparagraph (B) of such 

paragraph), but not to exceed an amount equal to 1.25 

percent of the maximum amount permitted to be expended under subparagraph (A) for items described in 

subsection (a)(1)(D)..’’. 

Subtitle B—Coordinating Premium 

Assistance With Private Coverage 

SEC. 311. SPECIAL ENROLLMENT PERIOD UNDER GROUP HEALTH 

PLANS IN CASE OF TERMINATION OF MEDICAID OR CHIP 

COVERAGE OR ELIGIBILITY FOR ASSISTANCE IN PURCHASE OF EMPLOYMENT-BASED COVERAGE; COORDINATION OF COVERAGE. 

(a) AMENDMENTS TO INTERNAL REVENUE CODE OF 1986.—Section 

9801(f) of the Internal Revenue Code of 1986 (relating to special 

enrollment periods) is amended by adding at the end the following 

new paragraph: ‘‘(3) SPECIAL RULES RELATING TO MEDICAID AND CHIP.— ‘‘(A) IN GENERAL.—A group health plan shall permit an 

employee who is eligible, but not enrolled, for coverage 

under the terms of the plan (or a dependent of such an employee if the dependent is eligible, but not enrolled, for coverage under such terms) to enroll for coverage under the 

terms of the plan if either of the following conditions is 

met: 

‘‘(i) TERMINATION OF MEDICAID OR CHIP COVERAGE.—

The employee or dependent is covered under a Medicaid plan under title XIX of the Social Security Act or 

under a State child health plan under title XXI of such 

Act and coverage of the employee or dependent under 

such a plan is terminated as a result of loss of eligibility for such coverage and the employee requests coverage under the group health plan not later than 60 

days after the date of termination of such coverage. 

‘‘(ii) ELIGIBILITY FOR EMPLOYMENT ASSISTANCE

UNDER MEDICAID OR CHIP.—The employee or dependent becomes eligible for assistance, with respect to coverage under the group health plan under such Medicaid plan or State child health plan (including under 

any waiver or demonstration project conducted under 

or in relation to such a plan), if the employee requests 

coverage under the group health plan not later than 

60 days after the date the employee or dependent is 

determined to be eligible for such assistance. 


bajohnson on PROD1PC69 with REPORTS
68 

‘‘(B) EMPLOYEE OUTREACH AND DISCLOSURE.— ‘‘(i) OUTREACH TO EMPLOYEES REGARDING AVAIL- ABILITY OF MEDICAID AND CHIP COVERAGE.— ‘‘(I) IN GENERAL.—Each employer that maintains a group health plan in a State that provides 

medical assistance under a State Medicaid plan 

under title XIX of the Social Security Act, or child 

health assistance under a State child health plan 

under title XXI of such Act, in the form of premium assistance for the purchase of coverage 

under a group health plan, shall provide to each 

employee a written notice informing the employee 

of potential opportunities then currently available 

in the State in which the employee resides for premium assistance under such plans for health coverage of the employee or the employee’s dependents. For purposes of compliance with this clause, 

the employer may use any State-specific model notice developed in accordance with section 

701(f)(3)(B)(i)(II) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 

1181(f)(3)(B)(i)(II)). ‘‘(II) OPTION TO PROVIDE CONCURRENT WITH PRO- VISION OF PLAN MATERIALS TO EMPLOYEE.—An employer may provide the model notice applicable to 

the State in which an employee resides concurrent 

with the furnishing of materials notifying the employee of health plan eligibility, concurrent with 

materials provided to the employee in connection 

with an open season or election process conducted 

under the plan, or concurrent with the furnishing 

of the summary plan description as provided in 

section 104(b) of the Employee Retirement Income 

Security Act of 1974 (29 U.S.C. 1024).. 

‘‘(ii) DISCLOSURE ABOUT GROUP HEALTH PLAN BENE- FITS TO STATES FOR MEDICAID AND CHIP ELIGIBLE INDI- VIDUALS.—In the case of a participant or beneficiary of 

a group health plan who is covered under a Medicaid 

plan of a State under title XIX of the Social Security 

Act or under a State child health plan under title XXI 

of such Act, the plan administrator of the group health 

plan shall disclose to the State, upon request, information about the benefits available under the group 

health plan in sufficient specificity, as determined 

under regulations of the Secretary of Health and 

Human Services in consultation with the Secretary 

that require use of the model coverage coordination 

disclosure form developed under section 311(b)(1)(C) of 

the Children’s Health Insurance Program Reauthorization Act of 2007, so as to permit the State to make 

a determination (under paragraph (2)(B), (3), or (10) of 

section 2105(c) of the Social Security Act or otherwise) 

concerning the cost-effectiveness of the State providing 

medical or child health assistance through premium 

assistance for the purchase of coverage under such 


bajohnson on PROD1PC69 with REPORTS
69 

group health plan and in order for the State to provide 

supplemental benefits required under paragraph 

(10)(E) of such section or other authority.’’. (b) CONFORMING AMENDMENTS.— (1) AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECU- RITY ACT.— (A) IN GENERAL.—Section 701(f) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181(f)) is 

amended by adding at the end the following new paragraph: ‘‘(3) SPECIAL RULES FOR APPLICATION IN CASE OF MEDICAID

AND CHIP.—

‘‘(A) IN GENERAL.—A group health plan, and a health insurance issuer offering group health insurance coverage in 

connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under 

the terms of the plan (or a dependent of such an employee 

if the dependent is eligible, but not enrolled, for coverage 

under such terms) to enroll for coverage under the terms 

of the plan if either of the following conditions is met: 

‘‘(i) TERMINATION OF MEDICAID OR CHIP COVERAGE.— The employee or dependent is covered under a Medicaid plan under title XIX of the Social Security Act or 

under a State child health plan under title XXI of such 

Act and coverage of the employee or dependent under 

such a plan is terminated as a result of loss of eligibility for such coverage and the employee requests coverage under the group health plan (or health insurance coverage) not later than 60 days after the date of 

termination of such coverage. ‘‘(ii) ELIGIBILITY FOR EMPLOYMENT ASSISTANCE

UNDER MEDICAID OR CHIP.—The employee or dependent becomes eligible for assistance, with respect to coverage under the group health plan or health insurance 

coverage, under such Medicaid plan or State child 

health plan (including under any waiver or demonstration project conducted under or in relation to such a 

plan), if the employee requests coverage under the 

group health plan or health insurance coverage not 

later than 60 days after the date the employee or dependent is determined to be eligible for such assistance. ‘‘(B) COORDINATION WITH MEDICAID AND CHIP.—

‘‘(i) OUTREACH TO EMPLOYEES REGARDING AVAILABILITY OF MEDICAID AND CHIP COVERAGE.—

‘‘(I) IN GENERAL.—Each employer that maintains a group health plan in a State that provides 

medical assistance under a State Medicaid plan 

under title XIX of the Social Security Act, or child 

health assistance under a State child health plan 

under title XXI of such Act, in the form of premium assistance for the purchase of coverage 

under a group health plan, shall provide to each 

employee a written notice informing the employee 

of potential opportunities then currently available 


bajohnson on PROD1PC69 with REPORTS
70 

in the State in which the employee resides for premium assistance under such plans for health coverage of the employee or the employee’s dependents. ‘‘(II) MODEL NOTICE.—Not later than 1 year 

after the date of enactment of the Children’s 

Health Insurance Program Reauthorization Act of 

2007, the Secretary and the Secretary of Health 

and Human Services, in consultation with Directors of State Medicaid agencies under title XIX of 

the Social Security Act and Directors of State 

CHIP agencies under title XXI of such Act, shall 

jointly develop national and State-specific model 

notices for purposes of subparagraph (A). The Secretary shall provide employers with such model 

notices so as to enable employers to timely comply 

with the requirements of subparagraph (A). Such 

model notices shall include information regarding 

how an employee may contact the State in which 

the employee resides for additional information regarding potential opportunities for such premium 

assistance, including how to apply for such assistance. ‘‘(III) OPTION TO PROVIDE CONCURRENT WITH

PROVISION OF PLAN MATERIALS TO EMPLOYEE.—An 

employer may provide the model notice applicable 

to the State in which an employee resides concurrent with the furnishing of materials notifying the 

employee of health plan eligibility, concurrent 

with materials provided to the employee in connection with an open season or election process 

conducted under the plan, or concurrent with the 

furnishing of the summary plan description as 

provided in section 104(b).. 

‘‘(ii) DISCLOSURE ABOUT GROUP HEALTH PLAN BENE- FITS TO STATES FOR MEDICAID AND CHIP ELIGIBLE INDI- VIDUALS.—In the case of a participant or beneficiary of 

a group health plan who is covered under a Medicaid 

plan of a State under title XIX of the Social Security 

Act or under a State child health plan under title XXI 

of such Act, the plan administrator of the group health 

plan shall disclose to the State, upon request, information about the benefits available under the group 

health plan in sufficient specificity, as determined 

under regulations of the Secretary of Health and 

Human Services in consultation with the Secretary 

that require use of the model coverage coordination 

disclosure form developed under section 311(b)(1)(C) of 

the Children’s Health Insurance Program Reauthorization Act of 2007, so as to permit the State to make 

a determination (under paragraph (2)(B), (3), or (10) of 

section 2105(c) of the Social Security Act or otherwise) 

concerning the cost-effectiveness of the State providing 

medical or child health assistance through premium 

assistance for the purchase of coverage under such 


bajohnson on PROD1PC69 with REPORTS
71 

group health plan and in order for the State to provide 

supplemental benefits required under paragraph 

(10)(E) of such section or other authority.’’. (B) CONFORMING AMENDMENT.—Section 102(b) of the 

Employee Retirement Income Security Act of 1974 (29 

U.S.C. 1022(b)) is amended— (i) by striking ‘‘and the remedies’’ and inserting ‘‘, the remedies’’; and 

(ii) by inserting before the period the following: ‘‘, and if the employer so elects for purposes of complying 

with section 701(f)(3)(B)(i), the model notice applicable 

to the State in which the participants and beneficiaries reside’’. (C) WORKING GROUP TO DEVELOP MODEL COVERAGE COORDINATION DISCLOSURE FORM.—

(i) MEDICAID, CHIP, AND EMPLOYER-SPONSORED COVERAGE COORDINATION WORKING GROUP.—

(I) IN GENERAL.—Not later than 60 days after 

the date of enactment of this Act, the Secretary of 

Health and Human Services and the Secretary of 

Labor shall jointly establish a Medicaid, CHIP, 

and Employer-Sponsored Coverage Coordination 

Working Group (in this subparagraph referred to 

as the ‘‘Working Group’’). The purpose of the 

Working Group shall be to develop the model coverage coordination disclosure form described in 

subclause (II) and to identify the impediments to 

the effective coordination of coverage available to 

families that include employees of employers that 

maintain group health plans and members who 

are eligible for medical assistance under title XIX 

of the Social Security Act or child health assistance or other health benefits coverage under title 

XXI of such Act. 

(II) MODEL COVERAGE COORDINATION DISCLO- SURE FORM DESCRIBED.—The model form described 

in this subclause is a form for plan administrators 

of group health plans to complete for purposes of 

permitting a State to determine the availability 

and cost-effectiveness of the coverage available 

under such plans to employees who have family 

members who are eligible for premium assistance 

offered under a State plan under title XIX or XXI 

of such Act and to allow for coordination of coverage for enrollees of such plans. Such form shall 

provide the following information in addition to 

such other information as the Working Group determines appropriate: 

(aa) A determination of whether the employee is eligible for coverage under the group 

health plan. 

(bb) The name and contract information of 

the plan administrator of the group health 

plan. 

(cc) The benefits offered under the plan. 


bajohnson on PROD1PC69 with REPORTS
72 

(dd) The premiums and cost-sharing required under the plan. 

(ee) Any other information relevant to coverage under the plan. 

(ii) MEMBERSHIP.—The Working Group shall consist 

of not more than 30 members and shall be composed 

of representatives of—

(I) the Department of Labor; 

(II) the Department of Health and Human Services; 

(III) State directors of the Medicaid program 

under title XIX of the Social Security Act; 

(IV) State directors of the State Children’s 

Health Insurance Program under title XXI of the 

Social Security Act; 

(V) employers, including owners of small businesses and their trade or industry representatives 

and certified human resource and payroll professionals; 

(VI) plan administrators and plan sponsors of 

group health plans (as defined in section 607(1) of 

the Employee Retirement Income Security Act of 

1974); 

(VII) health insurance issuers; and 

(VIII) children and other beneficiaries of medical assistance under title XIX of the Social Security Act or child health assistance or other health 

benefits coverage under title XXI of such Act. 

(iii) COMPENSATION.—The members of the Working 

Group shall serve without compensation. 

(iv) ADMINISTRATIVE SUPPORT.—The Department of 

Health and Human Services and the Department of 

Labor shall jointly provide appropriate administrative 

support to the Working Group, including technical assistance. The Working Group may use the services and 

facilities of either such Department, with or without 

reimbursement, as jointly determined by such Departments. 

(v) REPORT.—

(I) REPORT BY WORKING GROUP TO THE SECRETARIES.—Not later than 18 months after the date 

of the enactment of this Act, the Working Group 

shall submit to the Secretary of Labor and the 

Secretary of Health and Human Services the 

model form described in clause (i)(II) along with a 

report containing recommendations for appropriate measures to address the impediments to 

the effective coordination of coverage between 

group health plans and the State plans under titles XIX and XXI of the Social Security Act. 

(II) REPORT BY SECRETARIES TO THE CONGRESS.—Not later than 2 months after receipt of 

the report pursuant to subclause (I), the Secretaries shall jointly submit a report to each House 


bajohnson on PROD1PC69 with REPORTS
73 

of the Congress regarding the recommendations 

contained in the report under such subclause. 

(vi) TERMINATION.—The Working Group shall terminate 30 days after the date of the issuance of its report under clause (v). 

(D) EFFECTIVE DATES.—The Secretary of Labor and the 

Secretary of Health and Human Services shall develop the 

initial model notices under section 701(f)(3)(B)(i)(II) of the 

Employee Retirement Income Security Act of 1974, and the 

Secretary of Labor shall provide such notices to employers, 

not later than the date that is 1 year after the date of enactment of this Act, and each employer shall provide the 

initial annual notices to such employer’s employees beginning with the first plan year that begins after the date on 

which such initial model notices are first issued. The 

model coverage coordination disclosure form developed 

under subparagraph (C) shall apply with respect to requests made by States beginning with the first plan year 

that begins after the date on which such model coverage 

coordination disclosure form is first issued. 

(E) ENFORCEMENT.—Section 502 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132) is 

amended— (i) in subsection (a)(6), by striking ‘‘or (8)’’ and inserting ‘‘(8), or (9)’’; and 

(ii) in subsection (c), by redesignating paragraph (9) 

as paragraph (10), and by inserting after paragraph 

(8) the following: ‘‘(9)(A) The Secretary may assess a civil penalty against any em- ployer of up to $100 a day from the date of the employer’s failure 

to meet the notice requirement of section 701(f)(3)(B)(i)(I). For purposes of this subparagraph, each violation with respect to any single employee shall be treated as a separate violation. ‘‘(B) The Secretary may assess a civil penalty against any plan 

administrator of up to $100 a day from the date of the plan administrator’s failure to timely provide to any State the information required to be disclosed under section 701(f)(3)(B)(ii). For purposes of 

this subparagraph, each violation with respect to any single participant or beneficiary shall be treated as a separate violation.’’. 

(2) AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.—Section 

2701(f) of the Public Health Service Act (42 U.S.C. 300gg(f)) is 

amended by adding at the end the following new paragraph: 

‘‘(3) SPECIAL RULES FOR APPLICATION IN CASE OF MEDICAID

AND CHIP.—

‘‘(A) IN GENERAL.—A group health plan, and a health insurance issuer offering group health insurance coverage in 

connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under 

the terms of the plan (or a dependent of such an employee 

if the dependent is eligible, but not enrolled, for coverage 

under such terms) to enroll for coverage under the terms 

of the plan if either of the following conditions is met: ‘‘(i) TERMINATION OF MEDICAID OR CHIP COVERAGE.—

The employee or dependent is covered under a Medicaid plan under title XIX of the Social Security Act or 


bajohnson on PROD1PC69 with REPORTS
74 

under a State child health plan under title XXI of such 

Act and coverage of the employee or dependent under 

such a plan is terminated as a result of loss of eligibility for such coverage and the employee requests coverage under the group health plan (or health insurance coverage) not later than 60 days after the date of 

termination of such coverage. ‘‘(ii) ELIGIBILITY FOR EMPLOYMENT ASSISTANCE

UNDER MEDICAID OR CHIP.—The employee or dependent becomes eligible for assistance, with respect to coverage under the group health plan or health insurance 

coverage, under such Medicaid plan or State child 

health plan (including under any waiver or demonstration project conducted under or in relation to such a 

plan), if the employee requests coverage under the 

group health plan or health insurance coverage not 

later than 60 days after the date the employee or dependent is determined to be eligible for such assistance. ‘‘(B) COORDINATION WITH MEDICAID AND CHIP.—

‘‘(i) OUTREACH TO EMPLOYEES REGARDING AVAIL- ABILITY OF MEDICAID AND CHIP COVERAGE.— ‘‘(I) IN GENERAL.—Each employer that maintains a group health plan in a State that provides 

medical assistance under a State Medicaid plan 

under title XIX of the Social Security Act, or child 

health assistance under a State child health plan 

under title XXI of such Act, in the form of premium assistance for the purchase of coverage 

under a group health plan, shall provide to each 

employee a written notice informing the employee 

of potential opportunities then currently available 

in the State in which the employee resides for premium assistance under such plans for health coverage of the employee or the employee’s dependents. For purposes of compliance with this subclause, the employer may use any State-specific 

model notice developed in accordance with section 

701(f)(3)(B)(i)(II) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 

1181(f)(3)(B)(i)(II)). 

‘‘(II) OPTION TO PROVIDE CONCURRENT WITH PROVISION OF PLAN MATERIALS TO EMPLOYEE.—An employer may provide the model notice applicable to 

the State in which an employee resides concurrent 

with the furnishing of materials notifying the employee of health plan eligibility, concurrent with 

materials provided to the employee in connection 

with an open season or election process conducted 

under the plan, or concurrent with the furnishing 

of the summary plan description as provided in 

section 104(b) of the Employee Retirement Income 

Security Act of 1974. ‘‘(ii) DISCLOSURE ABOUT GROUP HEALTH PLAN BENEFITS TO STATES FOR MEDICAID AND CHIP ELIGIBLE INDIVerDate Aug 31 2005 05:23 Sep 25, 2007 Jkt 059008 PO 00000 Frm 00076 Fmt 6659 Sfmt 6602 E:\HR\OC\HR346.XXX HR346

bajohnson on PROD1PC69 with REPORTS
75 

VIDUALS.—In the case of an enrollee in a group health 

plan who is covered under a Medicaid plan of a State 

under title XIX of the Social Security Act or under a 

State child health plan under title XXI of such Act, 

the plan administrator of the group health plan shall 

disclose to the State, upon request, information about 

the benefits available under the group health plan in 

sufficient specificity, as determined under regulations 

of the Secretary of Health and Human Services in consultation with the Secretary that require use of the 

model coverage coordination disclosure form developed 

under section 311(b)(1)(C) of the Children’s Health Insurance Reauthorization Act of 2007, so as to permit 

the State to make a determination (under paragraph 

(2)(B), (3), or (10) of section 2105(c) of the Social Security Act or otherwise) concerning the cost-effectiveness 

of the State providing medical or child health assistance through premium assistance for the purchase of 

coverage under such group health plan and in order 

for the State to provide supplemental benefits required 

under paragraph (10)(E) of such section or other authority.’’. 

TITLE IV—STRENGTHENING QUALITY 

OF CARE AND HEALTH OUTCOMES 

SEC. 401. CHILD HEALTH QUALITY IMPROVEMENT ACTIVITIES FOR 

CHILDREN ENROLLED IN MEDICAID OR CHIP. 

(a) DEVELOPMENT OF CHILD HEALTH QUALITY MEASURES FOR

CHILDREN ENROLLED IN MEDICAID OR CHIP.—Title XI (42 U.S.C. 

1301 et seq.) is amended by inserting after section 1139 the following new section: 

‘‘SEC. 1139A. CHILD HEALTH QUALITY MEASURES. 

‘‘(a) DEVELOPMENT OF AN INITIAL CORE SET OF HEALTH CARE

QUALITY MEASURES FOR CHILDREN ENROLLED IN MEDICAID OR

CHIP.—

‘‘(1) IN GENERAL.—Not later than January 1, 2009, the Secretary shall identify and publish for general comment an initial, recommended core set of child health quality measures for 

use by State programs administered under titles XIX and XXI, 

health insurance issuers and managed care entities that enter 

into contracts with such programs, and providers of items and 

services under such programs. 

‘‘(2) IDENTIFICATION OF INITIAL CORE MEASURES.—In consultation with the individuals and entities described in subsection (b)(3), the Secretary shall identify existing quality of 

care measures for children that are in use under public and 

privately sponsored health care coverage arrangements, or that 

are part of reporting systems that measure both the presence 

and duration of health insurance coverage over time. 

‘‘(3) RECOMMENDATIONS AND DISSEMINATION.—Based on such 

existing and identified measures, the Secretary shall publish 

an initial core set of child health quality measures that includes (but is not limited to) the following: 


bajohnson on PROD1PC69 with REPORTS
76 

‘‘(A) The duration of children’s health insurance coverage 

over a 12–month time period. ‘‘(B) The availability and effectiveness of a full range 

of— ‘‘(i) preventive services, treatments, and services for 

acute conditions, including services to promote healthy 

birth, prevent and treat premature birth, and detect 

the presence or risk of physical or mental conditions 

that could adversely affect growth and development; 

and ‘‘(ii) treatments to correct or ameliorate the effects of 

physical and mental conditions, including chronic conditions, in infants, young children, school-age children, 

and adolescents. ‘‘(C) The availability of care in a range of ambulatory 

and inpatient health care settings in which such care is 

furnished. ‘‘(D) The types of measures that, taken together, can be 

used to estimate the overall national quality of health care 

for children, including children with special needs, and to 

perform comparative analyses of pediatric health care 

quality and racial, ethnic, and socioeconomic disparities in 

child health and health care for children. ‘‘(4) ENCOURAGE VOLUNTARY AND STANDARDIZED REPORT- ING.—Not later than 2 years after the date of enactment of the 

Children’s Health Insurance Program Reauthorization Act of 

2007, the Secretary, in consultation with States, shall develop 

a standardized format for reporting information and procedures and approaches that encourage States to use the initial 

core measurement set to voluntarily report information regarding the quality of pediatric health care under titles XIX and 

XXI. ‘‘(5) ADOPTION OF BEST PRACTICES IN IMPLEMENTING QUALITY

PROGRAMS.—The Secretary shall disseminate information to 

States regarding best practices among States with respect to 

measuring and reporting on the quality of health care for children, and shall facilitate the adoption of such best practices. In 

developing best practices approaches, the Secretary shall give 

particular attention to State measurement techniques that ensure the timeliness and accuracy of provider reporting, encourage provider reporting compliance, encourage successful quality improvement strategies, and improve efficiency in data collection using health information technology. 

‘‘(6) REPORTS TO CONGRESS.—Not later than January 1, 2010, 

and every 3 years thereafter, the Secretary shall report to Congress on—

‘‘(A) the status of the Secretary’s efforts to improve—

‘‘(i) quality related to the duration and stability of 

health insurance coverage for children under titles 

XIX and XXI; ‘‘(ii) the quality of children’s health care under such 

titles, including preventive health services, health care 

for acute conditions, chronic health care, and health 

services to ameliorate the effects of physical and mental conditions and to aid in growth and development 


bajohnson on PROD1PC69 with REPORTS
77 

of infants, young children, school-age children, and 

adolescents with special health care needs; and 

‘‘(iii) the quality of children’s health care under such 

titles across the domains of quality, including clinical 

quality, health care safety, family experience with 

health care, health care in the most integrated setting, 

and elimination of racial, ethnic, and socioeconomic 

disparities in health and health care; 

‘‘(B) the status of voluntary reporting by States under titles XIX and XXI, utilizing the initial core quality measurement set; and 

‘‘(C) any recommendations for legislative changes needed 

to improve the quality of care provided to children under 

titles XIX and XXI, including recommendations for quality 

reporting by States. 

‘‘(7) TECHNICAL ASSISTANCE.—The Secretary shall provide 

technical assistance to States to assist them in adopting and 

utilizing core child health quality measures in administering 

the State plans under titles XIX and XXI. 

‘‘(8) DEFINITION OF CORE SET.—In this section, the term ‘core 

set’ means a group of valid, reliable, and evidence-based quality measures that, taken together—

‘‘(A) provide information regarding the quality of health 

coverage and health care for children; 

‘‘(B) address the needs of children throughout the developmental age span; and 

‘‘(C) allow purchasers, families, and health care providers to understand the quality of care in relation to the 

preventive needs of children, treatments aimed at managing and resolving acute conditions, and diagnostic and 

treatment services whose purpose is to correct or ameliorate physical, mental, or developmental conditions that 

could, if untreated or poorly treated, become chronic. 

‘‘(b) ADVANCING AND IMPROVING PEDIATRIC QUALITY MEASURES.—

‘‘(1) ESTABLISHMENT OF PEDIATRIC QUALITY MEASURES PROGRAM.—Not later than January 1, 2010, the Secretary shall establish a pediatric quality measures program to—

‘‘(A) improve and strengthen the initial core child health 

care quality measures established by the Secretary under 

subsection (a); 

‘‘(B) expand on existing pediatric quality measures used 

by public and private health care purchasers and advance 

the development of such new and emerging quality measures; and 

‘‘(C) increase the portfolio of evidence-based, consensus 

pediatric quality measures available to public and private 

purchasers of children’s health care services, providers, 

and consumers. 

‘‘(2) EVIDENCE-BASED MEASURES.—The measures developed 

under the pediatric quality measures program shall, at a minimum, be—

‘‘(A) evidence-based and, where appropriate, risk adjusted; 


bajohnson on PROD1PC69 with REPORTS
78 

‘‘(B) designed to identify and eliminate racial and ethnic 

disparities in child health and the provision of health care; ‘‘(C) designed to ensure that the data required for such 

measures is collected and reported in a standard format 

that permits comparison of quality and data at a State, 

plan, and provider level; ‘‘(D) periodically updated; and 

‘‘(E) responsive to the child health needs, services, and 

domains of health care quality described in clauses (i), (ii), 

and (iii) of subsection (a)(6)(A). ‘‘(3) PROCESS FOR PEDIATRIC QUALITY MEASURES PROGRAM.— In identifying gaps in existing pediatric quality measures and 

establishing priorities for development and advancement of 

such measures, the Secretary shall consult with— ‘‘(A) States; 

‘‘(B) pediatricians, children’s hospitals, and other primary and specialized pediatric health care professionals 

(including members of the allied health professions) who 

specialize in the care and treatment of children, particularly children with special physical, mental, and developmental health care needs; ‘‘(C) dental professionals, including pediatric dental professionals; ‘‘(D) health care providers that furnish primary health 

care to children and families who live in urban and rural 

medically underserved communities or who are members 

of distinct population sub-groups at heightened risk for 

poor health outcomes; ‘‘(E) national organizations representing children, including children with disabilities and children with chronic 

conditions; ‘‘(F) national organizations representing consumers and 

purchasers of children’s health care; ‘‘(G) national organizations and individuals with expertise in pediatric health quality measurement; and 

‘‘(H) voluntary consensus standards setting organizations and other organizations involved in the advancement 

of evidence-based measures of health care. 

‘‘(4) DEVELOPING, VALIDATING, AND TESTING A PORTFOLIO OF

PEDIATRIC QUALITY MEASURES.—As part of the program to advance pediatric quality measures, the Secretary shall—

‘‘(A) award grants and contracts for the development, 

testing, and validation of new, emerging, and innovative 

evidence-based measures for children’s health care services 

across the domains of quality described in clauses (i), (ii), 

and (iii) of subsection (a)(6)(A); and 

‘‘(B) award grants and contracts for—

‘‘(i) the development of consensus on evidence-based 

measures for children’s health care services; ‘‘(ii) the dissemination of such measures to public 

and private purchasers of health care for children; and ‘‘(iii) the updating of such measures as necessary. ‘‘(5) REVISING, STRENGTHENING, AND IMPROVING INITIAL CORE

MEASURES.—Beginning no later than January 1, 2012, and annually thereafter, the Secretary shall publish recommended 


bajohnson on PROD1PC69 with REPORTS
79 

changes to the core measures described in subsection (a) that 

shall reflect the testing, validation, and consensus process for 

the development of pediatric quality measures described in 

subsection paragraphs (1) through (4). ‘‘(6) DEFINITION OF PEDIATRIC QUALITY MEASURE.—In this 

subsection, the term ‘pediatric quality measure’ means a measurement of clinical care that is capable of being examined 

through the collection and analysis of relevant information, 

that is developed in order to assess 1 or more aspects of pediatric health care quality in various institutional and ambulatory health care settings, including the structure of the clinical 

care system, the process of care, the outcome of care, or patient 

experiences in care. ‘‘(7) CONSTRUCTION.—Nothing in this section shall be construed as supporting the restriction of coverage, under title 

XIX or XXI or otherwise, to only those services that are evidence-based. 

‘‘(c) ANNUAL STATE REPORTS REGARDING STATE-SPECIFIC QUALITY

OF CARE MEASURES APPLIED UNDER MEDICAID OR CHIP.—

‘‘(1) ANNUAL STATE REPORTS.—Each State with a State plan 

approved under title XIX or a State child health plan approved 

under title XXI shall annually report to the Secretary on the—

‘‘(A) State-specific child health quality measures applied 

by the States under such plans, including measures described in subparagraphs (A) and (B) of subsection (a)(6); 

and 

‘‘(B) State-specific information on the quality of health 

care furnished to children under such plans, including information collected through external quality reviews of 

managed care organizations under section 1932 of the Social Security Act (42 U.S.C. 1396u–4) and benchmark 

plans under sections 1937 and 2103 of such Act (42 U.S.C. 

1396u–7, 1397cc). ‘‘(2) PUBLICATION.—Not later than September 30, 2009, and 

annually thereafter, the Secretary shall collect, analyze, and 

make publicly available the information reported by States 

under paragraph (1). 

‘‘(d) DEMONSTRATION PROJECTS FOR IMPROVING THE QUALITY OF

CHILDREN’S HEALTH CARE AND THE USE OF HEALTH INFORMATION

TECHNOLOGY.—

‘‘(1) IN GENERAL.—During the period of fiscal years 2008 

through 2012, the Secretary shall award not more than 10 

grants to States and child health providers to conduct demonstration projects to evaluate promising ideas for improving 

the quality of children’s health care provided under title XIX 

or XXI, including projects to—

‘‘(A) experiment with, and evaluate the use of, new 

measures of the quality of children’s health care under 

such titles (including testing the validity and suitability 

for reporting of such measures); ‘‘(B) promote the use of health information technology in 

care delivery for children under such titles; ‘‘(C) evaluate provider-based models which improve the 

delivery of children’s health care services under such titles, 

including care management for children with chronic conVerDate Aug 31 2005 05:23 Sep 25, 2007 Jkt 059008 PO 00000 Frm 00081 Fmt 6659 Sfmt 6602 E:\HR\OC\HR346.XXX HR346

bajohnson on PROD1PC69 with REPORTS
80 

ditions and the use of evidence-based approaches to improve the effectiveness, safety, and efficiency of health care 

services for children; or ‘‘(D) demonstrate the impact of the model electronic 

health record format for children developed and disseminated under subsection (f) on improving pediatric health, 

including the effects of chronic childhood health conditions, 

and pediatric health care quality as well as reducing 

health care costs. ‘‘(2) REQUIREMENTS.—In awarding grants under this subsection, the Secretary shall ensure that— ‘‘(A) only 1 demonstration project funded under a grant 

awarded under this subsection shall be conducted in a 

State; and ‘‘(B) demonstration projects funded under grants awarded under this subsection shall be conducted evenly between States with large urban areas and States with large 

rural areas. ‘‘(3) AUTHORITY FOR MULTISTATE PROJECTS.—A demonstration project conducted with a grant awarded under this subsection may be conducted on a multistate basis, as needed. 

‘‘(4) FUNDING.—$20,000,000 of the amount appropriated 

under subsection (i) for a fiscal year shall be used to carry out 

this subsection. ‘‘(e) CHILDHOOD OBESITY DEMONSTRATION PROJECT.— ‘‘(1) AUTHORITY TO CONDUCT DEMONSTRATION.—The Secretary, in consultation with the Administrator of the Centers 

for Medicare & Medicaid Services, shall conduct a demonstration project to develop a comprehensive and systematic model 

for reducing childhood obesity by awarding grants to eligible 

entities to carry out such project. Such model shall— ‘‘(A) identify, through self-assessment, behavioral risk 

factors for obesity among children; ‘‘(B) identify, through self-assessment, needed clinical 

preventive and screening benefits among those children 

identified as target individuals on the basis of such risk 

factors; 

‘‘(C) provide ongoing support to such target individuals 

and their families to reduce risk factors and promote the 

appropriate use of preventive and screening benefits; and 

‘‘(D) be designed to improve health outcomes, satisfaction, quality of life, and appropriate use of items and services for which medical assistance is available under title 

XIX or child health assistance is available under title XXI 

among such target individuals. 

‘‘(2) ELIGIBILITY ENTITIES.—For purposes of this subsection, 

an eligible entity is any of the following: 

‘‘(A) A city, county, or Indian tribe. 

‘‘(B) A local or tribal educational agency. 

‘‘(C) An accredited university, college, or community college. ‘‘(D) A Federally-qualified health center. 

‘‘(E) A local health department. 

‘‘(F) A health care provider. 

‘‘(G) A community-based organization. 


bajohnson on PROD1PC69 with REPORTS
81 

‘‘(H) Any other entity determined appropriate by the 

Secretary, including a consortia or partnership of entities 

described in any of subparagraphs (A) through (G). 

‘‘(3) USE OF FUNDS.—An eligible entity awarded a grant 

under this subsection shall use the funds made available under 

the grant to—

‘‘(A) carry out community-based activities related to reducing childhood obesity, including by—

‘‘(i) forming partnerships with entities, including 

schools and other facilities providing recreational services, to establish programs for after school and weekend community activities that are designed to reduce 

childhood obesity; 

‘‘(ii) forming partnerships with daycare facilities to 

establish programs that promote healthy eating behaviors and physical activity; and 

‘‘(iii) developing and evaluating community educational activities targeting good nutrition and promoting healthy eating behaviors; 

‘‘(B) carry out age-appropriate school-based activities 

that are designed to reduce childhood obesity, including 

by—

‘‘(i) developing and testing educational curricula and 

intervention programs designed to promote healthy 

eating behaviors and habits in youth, which may include—

‘‘(I) after hours physical activity programs; and 

‘‘(II) science-based interventions with multiple 

components to prevent eating disorders including 

nutritional content, understanding and responding 

to hunger and satiety, positive body image development, positive self-esteem development, and 

learning life skills (such as stress management, 

communication skills, problemsolving and decisionmaking skills), as well as consideration of cultural and developmental issues, and the role of 

family, school, and community; 

‘‘(ii) providing education and training to educational 

professionals regarding how to promote a healthy lifestyle and a healthy school environment for children; 

‘‘(iii) planning and implementing a healthy lifestyle 

curriculum or program with an emphasis on healthy 

eating behaviors and physical activity; and 

‘‘(iv) planning and implementing healthy lifestyle 

classes or programs for parents or guardians, with an 

emphasis on healthy eating behaviors and physical activity for children; 

‘‘(C) carry out educational, counseling, promotional, and 

training activities through the local health care delivery 

systems including by—

‘‘(i) promoting healthy eating behaviors and physical 

activity services to treat or prevent eating disorders, 

being overweight, and obesity; 


bajohnson on PROD1PC69 with REPORTS
82 

‘‘(ii) providing patient education and counseling to 

increase physical activity and promote healthy eating 

behaviors; ‘‘(iii) training health professionals on how to identify 

and treat obese and overweight individuals which may 

include nutrition and physical activity counseling; and ‘‘(iv) providing community education by a health 

professional on good nutrition and physical activity to 

develop a better understanding of the relationship between diet, physical activity, and eating disorders, 

obesity, or being overweight; and ‘‘(D) provide, through qualified health professionals, 

training and supervision for community health workers 

to— ‘‘(i) educate families regarding the relationship between nutrition, eating habits, physical activity, and 

obesity; ‘‘(ii) educate families about effective strategies to improve nutrition, establish healthy eating patterns, and 

establish appropriate levels of physical activity; and ‘‘(iii) educate and guide parents regarding the ability 

to model and communicate positive health behaviors. ‘‘(4) PRIORITY.—In awarding grants under paragraph (1), the 

Secretary shall give priority to awarding grants to eligible entities— ‘‘(A) that demonstrate that they have previously applied 

successfully for funds to carry out activities that seek to 

promote individual and community health and to prevent 

the incidence of chronic disease and that can cite published and peer-reviewed research demonstrating that the 

activities that the entities propose to carry out with funds 

made available under the grant are effective; ‘‘(B) that will carry out programs or activities that seek 

to accomplish a goal or goals set by the State in the 

Healthy People 2010 plan of the State; 

‘‘(C) that provide non-Federal contributions, either in 

cash or in-kind, to the costs of funding activities under the 

grants; 

‘‘(D) that develop comprehensive plans that include a 

strategy for extending program activities developed under 

grants in the years following the fiscal years for which 

they receive grants under this subsection; 

‘‘(E) located in communities that are medically underserved, as determined by the Secretary; 

‘‘(F) located in areas in which the average poverty rate 

is at least 150 percent or higher of the average poverty 

rate in the State involved, as determined by the Secretary; 

and 

‘‘(G) that submit plans that exhibit multisectoral, cooperative conduct that includes the involvement of a broad 

range of stakeholders, including—

‘‘(i) community-based organizations; 

‘‘(ii) local governments; 

‘‘(iii) local educational agencies; 

‘‘(iv) the private sector; 


bajohnson on PROD1PC69 with REPORTS
83 

‘‘(v) State or local departments of health; 

‘‘(vi) accredited colleges, universities, and community colleges; 

‘‘(vii) health care providers; 

‘‘(viii) State and local departments of transportation 

and city planning; and 

‘‘(ix) other entities determined appropriate by the 

Secretary. 

‘‘(5) PROGRAM DESIGN.—

‘‘(A) INITIAL DESIGN.—Not later than 1 year after the 

date of enactment of the Children’s Health Insurance Program Reauthorization Act of 2007, the Secretary shall design the demonstration project. The demonstration should 

draw upon promising, innovative models and incentives to 

reduce behavioral risk factors. The Administrator of the 

Centers for Medicare & Medicaid Services shall consult 

with the Director of the Centers for Disease Control and 

Prevention, the Director of the Office of Minority Health, 

the heads of other agencies in the Department of Health 

and Human Services, and such professional organizations, 

as the Secretary determines to be appropriate, on the design, conduct, and evaluation of the demonstration. 

‘‘(B) NUMBER AND PROJECT AREAS.—Not later than 2 

years after the date of enactment of the Children’s Health 

Insurance Program Reauthorization Act of 2007, the Secretary shall award 1 grant that is specifically designed to 

determine whether programs similar to programs to be 

conducted by other grantees under this subsection should 

be implemented with respect to the general population of 

children who are eligible for child health assistance under 

State child health plans under title XXI in order to reduce 

the incidence of childhood obesity among such population. 

‘‘(6) REPORT TO CONGRESS.—Not later than 3 years after the 

date the Secretary implements the demonstration project 

under this subsection, the Secretary shall submit to Congress 

a report that describes the project, evaluates the effectiveness 

and cost effectiveness of the project, evaluates the beneficiary 

satisfaction under the project, and includes any such other information as the Secretary determines to be appropriate. 

‘‘(7) DEFINITIONS.—In this subsection: 

‘‘(A) FEDERALLY-QUALIFIED HEALTH CENTER.—The term 

‘Federally-qualified health center’ has the meaning given 

that term in section 1905(l)(2)(B). 

‘‘(B) INDIAN TRIBE.—The term ‘Indian tribe’ has the 

meaning given that term in section 4 of the Indian Health 

Care Improvement Act (25 U.S.C. 1603). 

‘‘(C) SELF-ASSESSMENT.—The term ‘self-assessment’

means a form that—

‘‘(i) includes questions regarding—

‘‘(I) behavioral risk factors; 

‘‘(II) needed preventive and screening services; 

and 

‘‘(III) target individuals’’ preferences for receiving follow-up information; 


bajohnson on PROD1PC69 with REPORTS
84 

‘‘(ii) is assessed using such computer generated assessment programs; and ‘‘(iii) allows for the provision of such ongoing support 

to the individual as the Secretary determines appropriate. ‘‘(D) ONGOING SUPPORT.—The term ‘ongoing support’ means—

‘‘(i) to provide any target individual with information, feedback, health coaching, and recommendations 

regarding— ‘‘(I) the results of a self-assessment given to the 

individual; ‘‘(II) behavior modification based on the self-assessment; and ‘‘(III) any need for clinical preventive and 

screening services or treatment including medical 

nutrition therapy; ‘‘(ii) to provide any target individual with referrals 

to community resources and programs available to assist the target individual in reducing health risks; and ‘‘(iii) to provide the information described in clause 

(i) to a health care provider, if designated by the target individual to receive such information. ‘‘(8) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this subsection, 

$25,000,000 for the period of fiscal years 2008 through 2012. ‘‘(f) DEVELOPMENT OF MODEL ELECTRONIC HEALTH RECORD FOR- MAT FOR CHILDREN ENROLLED IN MEDICAID OR CHIP.— ‘‘(1) IN GENERAL.—Not later than January 1, 2009, the Secretary shall establish a program to encourage the development 

and dissemination of a model electronic health record format 

for children enrolled in the State plan under title XIX or the 

State child health plan under title XXI that is— ‘‘(A) subject to State laws, accessible to parents, caregivers, and other consumers for the sole purpose of demonstrating compliance with school or leisure activity requirements, such as appropriate immunizations or 

physicals; ‘‘(B) designed to allow interoperable exchanges that conform with Federal and State privacy and security requirements; ‘‘(C) structured in a manner that permits parents and 

caregivers to view and understand the extent to which the 

care their children receive is clinically appropriate and of 

high quality; and ‘‘(D) capable of being incorporated into, and otherwise 

compatible with, other standards developed for electronic 

health records. ‘‘(2) FUNDING.—$5,000,000 of the amount appropriated under 

subsection (i) for a fiscal year shall be used to carry out this 

subsection. ‘‘(g) STUDY OF PEDIATRIC HEALTH AND HEALTH CARE QUALITY

MEASURES.—

‘‘(1) IN GENERAL.—Not later than July 1, 2009, the Institute 

of Medicine shall study and report to Congress on the extent 


bajohnson on PROD1PC69 with REPORTS
85 

and quality of efforts to measure child health status and the 

quality of health care for children across the age span and in 

relation to preventive care, treatments for acute conditions, 

and treatments aimed at ameliorating or correcting physical, 

mental, and developmental conditions in children. In conducting such study and preparing such report, the Institute of 

Medicine shall— ‘‘(A) consider all of the major national population-based 

reporting systems sponsored by the Federal Government 

that are currently in place, including reporting requirements under Federal grant programs and national population surveys and estimates conducted directly by the 

Federal Government; ‘‘(B) identify the information regarding child health and 

health care quality that each system is designed to capture 

and generate, the study and reporting periods covered by 

each system, and the extent to which the information so 

generated is made widely available through publication; ‘‘(C) identify gaps in knowledge related to children’s 

health status, health disparities among subgroups of children, the effects of social conditions on children’s health 

status and use and effectiveness of health care, and the relationship between child health status and family income, 

family stability and preservation, and children’s school 

readiness and educational achievement and attainment; 

and ‘‘(D) make recommendations regarding improving and 

strengthening the timeliness, quality, and public transparency and accessibility of information about child health 

and health care quality. ‘‘(2) FUNDING.—Up to $1,000,000 of the amount appropriated 

under subsection (i) for a fiscal year shall be used to carry out 

this subsection. ‘‘(h) RULE OF CONSTRUCTION.—Notwithstanding any other provision in this section, no evidence based quality measure developed, 

published, or used as a basis of measurement or reporting under 

this section may be used to establish an irrebuttable presumption 

regarding either the medical necessity of care or the maximum permissible coverage for any individual child who is eligible for and receiving medical assistance under title XIX or child health assistance under title XXI . 

‘‘(i) APPROPRIATION.—Out of any funds in the Treasury not otherwise appropriated, there is appropriated for each of fiscal years 

2008 through 2012, $45,000,000 for the purpose of carrying out this 

section (other than subsection (e)). Funds appropriated under this 

subsection shall remain available until expended.’’. 

(b) INCREASED MATCHING RATE FOR COLLECTING AND REPORTING

ON CHILD HEALTH MEASURES.—Section 1903(a)(3)(A) (42 U.S.C. 

1396b(a)(3)(A)), is amended—

(1) by striking ‘‘and’’ at the end of clause (i); and 

(2) by adding at the end the following new clause: 

‘‘(iii) an amount equal to the Federal medical assistance 

percentage (as defined in section 1905(b)) of so much of the 

sums expended during such quarter (as found necessary by 

the Secretary for the proper and efficient administration of 


bajohnson on PROD1PC69 with REPORTS
86 

the State plan) as are attributable to such developments or 

modifications of systems of the type described in clause (i) 

as are necessary for the efficient collection and reporting 

on child health measures; and’’. 

SEC. 402. IMPROVED AVAILABILITY OF PUBLIC INFORMATION REGARDING ENROLLMENT OF CHILDREN IN CHIP AND MEDICAID. 

(a) INCLUSION OF PROCESS AND ACCESS MEASURES IN ANNUAL

STATE REPORTS.—Section 2108 (42 U.S.C. 1397hh) is amended— (1) in subsection (a), in the matter preceding paragraph (1), 

by striking ‘‘The State’’ and inserting ‘‘Subject to subsection (e), 

the State’’; and 

(2) by adding at the end the following new subsection: ‘‘(e) INFORMATION REQUIRED FOR INCLUSION IN STATE ANNUAL

REPORT.—The State shall include the following information in the 

annual report required under subsection (a): 

‘‘(1) Eligibility criteria, enrollment, and retention data (including data with respect to continuity of coverage or duration 

of benefits). 

‘‘(2) Data regarding the extent to which the State uses process measures with respect to determining the eligibility of children under the State child health plan, including measures 

such as 12–month continuous eligibility, self-declaration of income for applications or renewals, or presumptive eligibility. 

‘‘(3) Data regarding denials of eligibility and redeterminations of eligibility. 

‘‘(4) Data regarding access to primary and specialty services, 

access to networks of care, and care coordination provided 

under the State child health plan, using quality care and consumer satisfaction measures included in the Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey. 

‘‘(5) If the State provides child health assistance in the form 

of premium assistance for the purchase of coverage under a 

group health plan, data regarding the provision of such assistance, including the extent to which employer-sponsored health 

insurance coverage is available for children eligible for child 

health assistance under the State child health plan, the range 

of the monthly amount of such assistance provided on behalf 

of a child or family, the number of children or families provided such assistance on a monthly basis, the income of the 

children or families provided such assistance, the benefits and 

cost-sharing protection provided under the State child health 

plan to supplement the coverage purchased with such premium 

assistance, the effective strategies the State engages in to reduce any administrative barriers to the provision of such assistance, and, the effects, if any, of the provision of such assistance on preventing the coverage provided under the State child 

health plan from substituting for coverage provided under employer-sponsored health insurance offered in the State. ‘‘(6) To the extent applicable, a description of any State activities that are designed to reduce the number of uncovered 

children in the State, including through a State health insurance connector program or support for innovative private 

health coverage initiatives.’’. 

(b) STANDARDIZED REPORTING FORMAT.—


bajohnson on PROD1PC69 with REPORTS
87 

(1) IN GENERAL.—Not later than 1 year after the date of enactment of this Act, the Secretary shall specify a standardized 

format for States to use for reporting the information required 

under section 2108(e) of the Social Security Act, as added by 

subsection (a)(2). 

(2) TRANSITION PERIOD FOR STATES.—Each State that is required to submit a report under subsection (a) of section 2108 

of the Social Security Act that includes the information required under subsection (e) of such section may use up to 3 reporting periods to transition to the reporting of such information in accordance with the standardized format specified by 

the Secretary under paragraph (1). 

(c) ADDITIONAL FUNDING FOR THE SECRETARY TO IMPROVE TIMELINESS OF DATA REPORTING AND ANALYSIS FOR PURPOSES OF DETERMINING ENROLLMENT INCREASES UNDER MEDICAID AND CHIP.—

(1) APPROPRIATION.—There is appropriated, out of any money 

in the Treasury not otherwise appropriated, $5,000,000 to the 

Secretary for fiscal year 2008 for the purpose of improving the 

timeliness of the data reported and analyzed from the Medicaid Statistical Information System (MSIS) for purposes of 

providing more timely data on enrollment and eligibility of 

children under Medicaid and CHIP and to provide guidance to 

States with respect to any new reporting requirements related 

to such improvements. Amounts appropriated under this paragraph shall remain available until expended. 

(2) REQUIREMENTS.—The improvements made by the Secretary under paragraph (1) shall be designed and implemented 

(including with respect to any necessary guidance for States to 

report such information in a complete and expeditious manner) 

so that, beginning no later than October 1, 2008, data regarding the enrollment of low-income children (as defined in section 

2110(c)(4) of the Social Security Act (42 U.S.C. 1397jj(c)(4)) of 

a State enrolled in the State plan under Medicaid or the State 

child health plan under CHIP with respect to a fiscal year 

shall be collected and analyzed by the Secretary within 6 

months of submission. 

(d) GAO STUDY AND REPORT ON ACCESS TO PRIMARY AND SPE- CIALITY SERVICES.— (1) IN GENERAL.—The Comptroller General of the United 

States shall conduct a study of children’s access to primary and 

specialty services under Medicaid and CHIP, including— (A) the extent to which providers are willing to treat 

children eligible for such programs; 

(B) information on such children’s access to networks of 

care; 

(C) geographic availability of primary and specialty services under such programs; 

(D) the extent to which care coordination is provided for 

children’s care under Medicaid and CHIP; and 

(E) as appropriate, information on the degree of availability of services for children under such programs. 

(2) REPORT.—Not later than 2 years after the date of enactment of this Act, the Comptroller General shall submit a report to the Committee on Finance of the Senate and the Committee on Energy and Commerce of the House of RepresentaVerDate Aug 31 2005 05:23 Sep 25, 2007 Jkt 059008 PO 00000 Frm 00089 Fmt 6659 Sfmt 6602 E:\HR\OC\HR346.XXX HR346

bajohnson on PROD1PC69 with REPORTS
88 

tives on the study conducted under paragraph (1) that includes 

recommendations for such Federal and State legislative and 

administrative changes as the Comptroller General determines 

are necessary to address any barriers to access to children’s 

care under Medicaid and CHIP that may exist. 

SEC. 403. APPLICATION OF CERTAIN MANAGED CARE QUALITY SAFEGUARDS TO CHIP. 

(a) IN GENERAL.—Section 2103(f) of Social Security Act (42 

U.S.C. 1397bb(f)) is amended by adding at the end the following 

new paragraph: ‘‘(3) COMPLIANCE WITH MANAGED CARE REQUIREMENTS.—The 

State child health plan shall provide for the application of subsections (a)(4), (a)(5), (b), (c), (d), and (e) of section 1932 (relating to requirements for managed care) to coverage, State agencies, enrollment brokers, managed care entities, and managed 

care organizations under this title in the same manner as such 

subsections apply to coverage and such entities and organizations under title XIX.’’. (b) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall apply to contract years for health plans beginning on or after 

July 1, 2008. 

TITLE V—IMPROVING ACCESS TO 

BENEFITS 

SEC. 501. DENTAL BENEFITS. 

(a) COVERAGE.— (1) IN GENERAL.—Section 2103 (42 U.S.C. 1397cc) is amended— (A) in subsection (a)— (i) in the matter before paragraph (1), by striking ‘‘subsection (c)(5)’’ and inserting ‘‘paragraphs (5) and 

(7) of subsection (c)’’; and 

(ii) in paragraph (1), by inserting ‘‘at least’’ after 

‘‘that is’’; and 

(B) in subsection (c)—

(i) by redesignating paragraph (5) as paragraph (7); 

and 

(ii) by inserting after paragraph (4), the following: 

‘‘(5) DENTAL BENEFITS.—

‘‘(A) IN GENERAL.—The child health assistance provided 

to a targeted low-income child shall include coverage of 

dental services necessary to prevent disease and promote 

oral health, restore oral structures to health and function, 

and treat emergency conditions. 

‘‘(B) PERMITTING USE OF DENTAL BENCHMARK PLANS BY

CERTAIN STATES.—A State may elect to meet the requirement of subparagraph (A) through dental coverage that is 

equivalent to a benchmark dental benefit package described in subparagraph (C). 

‘‘(C) BENCHMARK DENTAL BENEFIT PACKAGES.—The 

benchmark dental benefit packages are as follows: ‘‘(i) FEHBP CHILDREN’S DENTAL COVERAGE.—A dental benefits plan under chapter 89A of title 5, United 


bajohnson on PROD1PC69 with REPORTS
89 

States Code, that has been selected most frequently by 

employees seeking dependent coverage, among such 

plans that provide such dependent coverage, in either 

of the previous 2 plan years. ‘‘(ii) STATE EMPLOYEE DEPENDENT DENTAL COV- ERAGE.—A dental benefits plan that is offered and 

generally available to State employees in the State involved and that has been selected most frequently by 

employees seeking dependent coverage, among such 

plans that provide such dependent coverage, in either 

of the previous 2 plan years. ‘‘(iii) COVERAGE OFFERED THROUGH COMMERCIAL

DENTAL PLAN.—A dental benefits plan that has the 

largest insured commercial, non-medicaid enrollment 

of dependent covered lives of such plans that is offered 

in the State involved.’’. 

(2) ASSURING ACCESS TO CARE.—Section 2102(a)(7)(B) (42 

U.S.C. 1397bb(c)(2)) is amended by inserting ‘‘and services described in section 2103(c)(5)’’ after ‘‘emergency services’’. 

(3) EFFECTIVE DATE.—The amendments made by paragraph 

(1) shall apply to coverage of items and services furnished on 

or after October 1, 2008. 

(b) DENTAL EDUCATION FOR PARENTS OF NEWBORNS.—The Secretary shall develop and implement, through entities that fund or 

provide perinatal care services to targeted low-income children 

under a State child health plan under title XXI of the Social Security Act, a program to deliver oral health educational materials 

that inform new parents about risks for, and prevention of, early 

childhood caries and the need for a dental visit within their 

newborn’s first year of life. 

(c) PROVISION OF DENTAL SERVICES THROUGH FQHCS.— (1) MEDICAID.—Section 1902(a) (42 U.S.C. 1396a(a)) is 

amended— (A) by striking ‘‘and’’ at the end of paragraph (69); 

(B) by striking the period at the end of paragraph (70) 

and inserting ‘‘; and’’; and 

(C) by inserting after paragraph (70) the following new 

paragraph: ‘‘(71) provide that the State will not prevent a Federallyqualified health center from entering into contractual relationships with private practice dental providers in the provision of 

Federally-qualified health center services.’’. (2) CHIP.—Section 2107(e)(1) (42 U.S.C. 1397g(e)(1)), as 

amended by subsections (a)(2) and (d)(2) of section 203, is 

amended by inserting after subparagraph (B) the following 

new subparagraph (and redesignating the succeeding subparagraphs accordingly): ‘‘(C) Section 1902(a)(71) (relating to limiting FQHC contracting for provision of dental services).’’. (3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect on January 1, 2008. 

(d) REPORTING INFORMATION ON DENTAL HEALTH.— (1) MEDICAID.—Section 1902(a)(43)(D)(iii) (42 U.S.C. 

1396a(a)(43)(D)(iii)) is amended by inserting ‘‘and other information relating to the provision of dental services to such chilVerDate Aug 31 2005 05:23 Sep 25, 2007 Jkt 059008 PO 00000 Frm 00091 Fmt 6659 Sfmt 6602 E:\HR\OC\HR346.XXX HR346

bajohnson on PROD1PC69 with REPORTS
90 

dren described in section 2108(e)’’ after ‘‘receiving dental services,’’. (2) CHIP.—Section 2108 (42 U.S.C. 1397hh) is amended by 

adding at the end the following new subsection: ‘‘(e) INFORMATION ON DENTAL CARE FOR CHILDREN.— ‘‘(1) IN GENERAL.—Each annual report under subsection (a) 

shall include the following information with respect to care and 

services described in section 1905(r)(3) provided to targeted 

low-income children enrolled in the State child health plan 

under this title at any time during the year involved: ‘‘(A) The number of enrolled children by age grouping 

used for reporting purposes under section 1902(a)(43). ‘‘(B) For children within each such age grouping, information of the type contained in questions 12(a)–(c) of CMS 

Form 416 (that consists of the number of enrolled targeted 

low income children who receive any, preventive, or restorative dental care under the State plan). ‘‘(C) For the age grouping that includes children 8 years 

of age, the number of such children who have received a 

protective sealant on at least one permanent molar tooth. ‘‘(2) INCLUSION OF INFORMATION ON ENROLLEES IN MANAGED

CARE PLANS.—The information under paragraph (1) shall include information on children who are enrolled in managed 

care plans and other private health plans and contracts with 

such plans under this title shall provide for the reporting of 

such information by such plans to the State.’’. (3) EFFECTIVE DATE.—The amendments made by this subsection shall be effective for annual reports submitted for years 

beginning after date of enactment. 

(e) IMPROVED ACCESSIBILITY OF DENTAL PROVIDER INFORMATION

TO ENROLLEES UNDER MEDICAID AND CHIP.—The Secretary 

shall—

(1) work with States, pediatric dentists, and other dental 

providers (including providers that are, or are affiliated with, 

a school of dentistry) to include, not later than 6 months after 

the date of the enactment of this Act, on the Insure Kids Now 

website (http://www.insurekidsnow.gov/) and hotline (1–877–

KIDS–NOW) (or on any successor websites or hotlines) a current and accurate list of all such dentists and providers within 

each State that provide dental services to children enrolled in 

the State plan (or waiver) under Medicaid or the State child 

health plan (or waiver) under CHIP, and shall ensure that 

such list is updated at least quarterly; and 

(2) work with States to include, not later than 6 months 

after the date of the enactment of this Act, a description of the 

dental services provided under each State plan (or waiver) 

under Medicaid and each State child health plan (or waiver) 

under CHIP on such Insure Kids Now website, and shall ensure that such list is updated at least annually. 

(f) INCLUSION OF STATUS OF EFFORTS TO IMPROVE DENTAL CARE

IN REPORTS ON THE QUALITY OF CHILDREN’S HEALTH CARE UNDER

MEDICAID AND CHIP.—Section 1139A(a), as added by section 

401(a), is amended— (1) in paragraph (3)(B)(ii), by inserting ‘‘and, with respect to 

dental care, conditions requiring the restoration of teeth, relief 


bajohnson on PROD1PC69 with REPORTS
91 

of pain and infection, and maintenance of dental health’’ after 

‘‘chronic conditions’’; and 

(2) in paragraph (6)(A)(ii), by inserting ‘‘dental care,’’ after 

‘‘preventive health services,’’. 

(g) GAO STUDY AND REPORT.—

(1) STUDY.—The Comptroller General of the United States 

shall provide for a study that examines—

(A) access to dental services by children in underserved 

areas; 

(B) children’s access to oral health care, including preventive and restorative services, under Medicaid and 

CHIP, including—

(i) the extent to which dental providers are willing 

to treat children eligible for such programs; 

(ii) information on such children’s access to networks of care, including such networks that serve special needs children; and 

(iii) geographic availability of oral health care, including preventive and restorative services, under 

such programs; and 

(C) the feasibility and appropriateness of using qualified 

mid-level dental health providers, in coordination with 

dentists, to improve access for children to oral health services and public health overall. 

(2) REPORT.—Not later than 18 months year after the date 

of the enactment of this Act, the Comptroller General shall 

submit to Congress a report on the study conducted under 

paragraph (1). The report shall include recommendations for 

such Federal and State legislative and administrative changes 

as the Comptroller General determines are necessary to address any barriers to access to oral health care, including preventive and restorative services, under Medicaid and CHIP 

that may exist. 

SEC. 502. MENTAL HEALTH PARITY IN CHIP PLANS. 

(a) ASSURANCE OF PARITY.—Section 2103(c) (42 U.S.C. 1397cc(c)), 

as amended by section 501(a)(1)(B), is amended by inserting after 

paragraph (5), the following: 

‘‘(6) MENTAL HEALTH SERVICES PARITY.—

‘‘(A) IN GENERAL.—In the case of a State child health 

plan that provides both medical and surgical benefits and 

mental health or substance abuse benefits, such plan shall 

ensure that the financial requirements and treatment limitations applicable to such mental health or substance 

abuse benefits are no more restrictive than the financial 

requirements and treatment limitations applied to substantially all medical and surgical benefits covered by the 

plan. 

‘‘(B) DEEMED COMPLIANCE.—To the extent that a State 

child health plan includes coverage with respect to an individual described in section 1905(a)(4)(B) and covered under 

the State plan under section 1902(a)(10)(A) of the services 

described in section 1905(a)(4)(B) (relating to early and 

periodic screening, diagnostic, and treatment services defined in section 1905(r)) and provided in accordance with 


bajohnson on PROD1PC69 with REPORTS
92 

section 1902(a)(43), such plan shall be deemed to satisfy 

the requirements of subparagraph (A).’’. (b) CONFORMING AMENDMENTS.—Section 2103 (42 U.S.C. 1397cc) 

is amended— (1) in subsection (a), as amended by section 501(a)(1)(A)(i), in 

the matter preceding paragraph (1), by inserting ‘‘, (6),’’ after ‘‘(5)’’; and 

(2) in subsection (c)(2), by striking subparagraph (B) and redesignating subparagraphs (C) and (D) as subparagraphs (B) 

and (C), respectively. 

SEC. 503. APPLICATION OF PROSPECTIVE PAYMENT SYSTEM FOR 

SERVICES PROVIDED BY FEDERALLY-QUALIFIED HEALTH 

CENTERS AND RURAL HEALTH CLINICS. 

(a) APPLICATION OF PROSPECTIVE PAYMENT SYSTEM.— (1) IN GENERAL.—Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)), 

as amended by section 501(c)(2) is amended by inserting after 

subparagraph (C) the following new subparagraph (and redesignating the succeeding subparagraphs accordingly): ‘‘(D) Section 1902(bb) (relating to payment for services 

provided by Federally-qualified health centers and rural 

health clinics).’’. (2) EFFECTIVE DATE.—The amendment made by paragraph 

(1) shall apply to services provided on or after October 1, 2008. 

(b) TRANSITION GRANTS.— (1) APPROPRIATION.—Out of any funds in the Treasury not 

otherwise appropriated, there is appropriated to the Secretary 

for fiscal year 2008, $5,000,000, to remain available until expended, for the purpose of awarding grants to States with 

State child health plans under CHIP that are operated separately from the State Medicaid plan under title XIX of the Social Security Act (including any waiver of such plan), or in 

combination with the State Medicaid plan, for expenditures related to transitioning to compliance with the requirement of 

section 2107(e)(1)(D) of the Social Security Act (as added by 

subsection (a)) to apply the prospective payment system established under section 1902(bb) of the such Act (42 U.S.C. 

1396a(bb)) to services provided by Federally-qualified health 

centers and rural health clinics. 

(2) MONITORING AND REPORT.—The Secretary shall monitor 

the impact of the application of such prospective payment system on the States described in paragraph (1) and, not later 

than October 1, 2010, shall report to Congress on any effect on 

access to benefits, provider payment rates, or scope of benefits 

offered by such States as a result of the application of such 

payment system. 

SEC. 504. PREMIUM GRACE PERIOD. 

(a) IN GENERAL.—Section 2103(e)(3) (42 U.S.C. 1397cc(e)(3)) is 

amended by adding at the end the following new subparagraph: 

‘‘(C) PREMIUM GRACE PERIOD.—The State child health 

plan—

‘‘(i) shall afford individuals enrolled under the plan 

a grace period of at least 30 days from the beginning 

of a new coverage period to make premium payments 

before the individual’s coverage under the plan may be 

terminated; and 


bajohnson on PROD1PC69 with REPORTS
93 

‘‘(ii) shall provide to such an individual, not later 

than 7 days after the first day of such grace period, 

notice—

‘‘(I) that failure to make a premium payment 

within the grace period will result in termination 

of coverage under the State child health plan; and 

‘‘(II) of the individual’s right to challenge the 

proposed termination pursuant to the applicable 

Federal regulations. 

For purposes of clause (i), the term ‘new coverage period’

means the month immediately following the last month for 

which the premium has been paid.’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall apply to new coverage periods beginning on or after January 

1, 2009. 

SEC. 505. DEMONSTRATION PROJECTS RELATING TO DIABETES PREVENTION. 

There is authorized to be appropriated $15,000,000 during the 

period of fiscal years 2008 through 2012 to fund demonstration 

projects in up to 10 States over 3 years for voluntary incentive programs to promote children’s receipt of relevant screenings and improvements in healthy eating and physical activity with the aim of 

reducing the incidence of type 2 diabetes. Such programs may involve reductions in cost-sharing or premiums when children receive 

regular screening and reach certain benchmarks in healthy eating 

and physical activity. Under such programs, a State may also provide financial bonuses for partnerships with entities, such as 

schools, which increase their education and efforts with respect to 

reducing the incidence of type 2 diabetes and may also devise incentives for providers serving children covered under this title and 

title XIX to perform relevant screening and counseling regarding 

healthy eating and physical activity. Upon completion of these 

demonstrations, the Secretary shall provide a report to Congress on 

the results of the State demonstration projects and the degree to 

which they helped improve health outcomes related to type 2 diabetes in children in those States. 

SEC. 506. CLARIFICATION OF COVERAGE OF SERVICES PROVIDED 

THROUGH SCHOOL-BASED HEALTH CENTERS. 

Section 2103(c) (42 U.S.C. 1397cc(c)), as amended by section 

501(a)(1)(B), is amended by adding at the end the following new 

paragraph: 

‘‘(8) AVAILABILITY OF COVERAGE FOR ITEMS AND SERVICES

FURNISHED THROUGH SCHOOL-BASED HEALTH CENTERS.—Nothing in this title shall be construed as limiting a State’s ability 

to provide child health assistance for covered items and services that are furnished through school-based health centers.’’. 


bajohnson on PROD1PC69 with REPORTS
94 

TITLE VI—PROGRAM INTEGRITY AND 

OTHER MISCELLANEOUS PROVISIONS 

Subtitle A—Program Integrity and Data 

Collection 

SEC. 601. PAYMENT ERROR RATE MEASUREMENT (‘‘PERM’’). 

(a) EXPENDITURES RELATED TO COMPLIANCE WITH REQUIREMENTS.—

(1) ENHANCED PAYMENTS.—Section 2105(c) (42 U.S.C. 

1397ee(c)), as amended by section 301(a), is amended by adding at the end the following new paragraph: 

‘‘(12) ENHANCED PAYMENTS.—Notwithstanding subsection (b), 

the enhanced FMAP with respect to payments under subsection (a) for expenditures related to the administration of the 

payment error rate measurement (PERM) requirements applicable to the State child health plan in accordance with the Improper Payments Information Act of 2002 and parts 431 and 

457 of title 42, Code of Federal Regulations (or any related or 

successor guidance or regulations) shall in no event be less 

than 90 percent.’’. 

(2) EXCLUSION OF FROM CAP ON ADMINISTRATIVE EXPENDITURES.—Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)C)), as 

amended by section 302(b)), is amended by adding at the end 

the following: 

‘‘(iv) PAYMENT ERROR RATE MEASUREMENT (PERM) EXPENDITURES.—Expenditures related to the administration of the payment error rate measurement (PERM) 

requirements applicable to the State child health plan 

in accordance with the Improper Payments Information Act of 2002 and parts 431 and 457 of title 42, 

Code of Federal Regulations (or any related or successor guidance or regulations).’’. 

(b) FINAL RULE REQUIRED TO BE IN EFFECT FOR ALL STATES.—

Notwithstanding parts 431 and 457 of title 42, Code of Federal 

Regulations (as in effect on the date of enactment of this Act), the 

Secretary shall not calculate or publish any national or State-specific error rate based on the application of the payment error rate 

measurement (in this section referred to as ‘‘PERM’’) requirements 

to CHIP until after the date that is 6 months after the date on 

which a final rule implementing such requirements in accordance 

with the requirements of subsection (c) is in effect for all States. 

Any calculation of a national error rate or a State specific error 

rate after such final rule in effect for all States may only be inclusive of errors, as defined in such final rule or in guidance issued 

within a reasonable time frame after the effective date for such 

final rule that includes detailed guidance for the specific methodology for error determinations. 

(c) REQUIREMENTS FOR FINAL RULE.—For purposes of subsection 

(b), the requirements of this subsection are that the final rule implementing the PERM requirements shall—

(1) include—


bajohnson on PROD1PC69 with REPORTS
95 

(A) clearly defined criteria for errors for both States and 

providers; 

(B) a clearly defined process for appealing error determinations by— (i) review contractors; or 

(ii) the agency and personnel described in section 

431.974(a)(2) of title 42, Code of Federal Regulations, 

as in effect on September 1, 2007, responsible for the 

development, direction, implementation, and evaluation of eligibility reviews and associated activities; and 

(C) clearly defined responsibilities and deadlines for 

States in implementing any corrective action plans; and 

(2) provide that the payment error rate determined for a 

State shall not take into account payment errors resulting from 

the State’s verification of an applicant’s self-declaration or selfcertification of eligibility for, and the correct amount of, medical assistance or child health assistance, if the State process 

for verifying an applicant’s self-declaration or self-certification 

satisfies the requirements for such process applicable under 

regulations promulgated by the Secretary or otherwise approved by the Secretary. 

(d) OPTION FOR APPLICATION OF DATA FOR STATES IN FIRST AP- PLICATION CYCLE UNDER THE INTERIM FINAL RULE.—After the final 

rule implementing the PERM requirements in accordance with the 

requirements of subsection (c) is in effect for all States, a State for 

which the PERM requirements were first in effect under an interim 

final rule for fiscal year 2007 may elect to accept any payment 

error rate determined in whole or in part for the State on the basis 

of data for that fiscal year or may elect to not have any payment 

error rate determined on the basis of such data and, instead, shall 

be treated as if fiscal year 2010 were the first fiscal year for which 

the PERM requirements apply to the State. 

(e) HARMONIZATION OF MEQC AND PERM.— (1) REDUCTION OF REDUNDANCIES.—The Secretary shall review the Medicaid Eligibility Quality Control (in this subsection referred to as the ‘‘MEQC’’) requirements with the 

PERM requirements and coordinate consistent implementation 

of both sets of requirements, while reducing redundancies. 

(2) STATE OPTION TO APPLY PERM DATA.—A State may elect, 

for purposes of determining the erroneous excess payments for 

medical assistance ratio applicable to the State for a fiscal year 

under section 1903(u) of the Social Security Act (42 U.S.C. 

1396b(u)) to substitute data resulting from the application of 

the PERM requirements to the State after the final rule implementing such requirements is in effect for all States for data 

obtained from the application of the MEQC requirements to 

the State with respect to a fiscal year. 

(3) STATE OPTION TO APPLY MEQC DATA.—For purposes of satisfying the requirements of subpart Q of part 431 of title 42, 

Code of Federal Regulations, as in effect on September 1, 2007, 

relating to Medicaid eligibility reviews, a State may elect to 

substitute data obtained through MEQC reviews conducted in 

accordance with section 1903(u) of the Social Security Act (42 

U.S.C. 1396b(u)) for data required for purposes of PERM requirements, but only if the State MEQC reviews are based on 


bajohnson on PROD1PC69 with REPORTS
96 

a broad, representative sample of Medicaid applicants or enrollees in the States. 

(f) IDENTIFICATION OF IMPROVED STATE-SPECIFIC SAMPLE SIZES.—

The Secretary shall establish State-specific sample sizes for application of the PERM requirements with respect to State child health 

plans for fiscal years beginning with fiscal year 2009, on the basis 

of such information as the Secretary determines appropriate. In establishing such sample sizes, the Secretary shall, to the greatest 

extent practicable—

(1) minimize the administrative cost burden on States under 

Medicaid and CHIP; and 

(2) maintain State flexibility to manage such programs. 

SEC. 602. IMPROVING DATA COLLECTION. 

(a) INCREASED APPROPRIATION.—Section 2109(b)(2) (42 U.S.C. 

1397ii(b)(2)) is amended by striking ‘‘$10,000,000 for fiscal year 

2000’’ and inserting ‘‘$20,000,000 for fiscal year 2008’’. 

(b) USE OF ADDITIONAL FUNDS.—Section 2109(b) (42 U.S.C. 

1397ii(b)), as amended by subsection (a), is amended—

(1) by redesignating paragraph (2) as paragraph (4); and 

(2) by inserting after paragraph (1), the following new paragraphs: 

‘‘(2) ADDITIONAL REQUIREMENTS.—In addition to making the 

adjustments required to produce the data described in paragraph (1), with respect to data collection occurring for fiscal 

years beginning with fiscal year 2008, in appropriate consultation with the Secretary of Health and Human Services, the 

Secretary of Commerce shall do the following: 

‘‘(A) Make appropriate adjustments to the Current Population Survey to develop more accurate State-specific estimates of the number of children enrolled in health coverage under title XIX or this title. 

‘‘(B) Make appropriate adjustments to the Current Population Survey to improve the survey estimates used to determine the child population growth factor under section 

2104(i)(5)(B) and any other data necessary for carrying out 

this title. 

‘‘(C) Include health insurance survey information in the 

American Community Survey related to children. 

‘‘(D) Assess whether American Community Survey estimates, once such survey data are first available, produce 

more reliable estimates than the Current Population Survey with respect to the purposes described in subparagraph (B). 

‘‘(E) On the basis of the assessment required under subparagraph (D), recommend to the Secretary of Health and 

Human Services whether American Community Survey estimates should be used in lieu of, or in some combination 

with, Current Population Survey estimates for the purposes described in subparagraph (B). 

‘‘(F) Continue making the adjustments described in the 

last sentence of paragraph (1) with respect to expansion of 

the sample size used in State sampling units, the number 

of sampling units in a State, and using an appropriate 

verification element. 


bajohnson on PROD1PC69 with REPORTS
97 

‘‘(3) AUTHORITY FOR THE SECRETARY OF HEALTH AND HUMAN

SERVICES TO TRANSITION TO THE USE OF ALL, OR SOME COMBINATION OF, ACS ESTIMATES UPON RECOMMENDATION OF THE

SECRETARY OF COMMERCE.—If, on the basis of the assessment 

required under paragraph (2)(D), the Secretary of Commerce 

recommends to the Secretary of Health and Human Services 

that American Community Survey estimates should be used in 

lieu of, or in some combination with, Current Population Survey estimates for the purposes described in paragraph (2)(B), 

the Secretary of Health and Human Services, in consultation 

with the States, may provide for a period during which the 

Secretary may transition from carrying out such purposes 

through the use of Current Population Survey estimates to the 

use of American Community Survey estimates (in lieu of, or in 

combination with the Current Population Survey estimates, as 

recommended), provided that any such transition is implemented in a manner that is designed to avoid adverse impacts 

upon States with approved State child health plans under this 

title.’’. 

SEC. 603. UPDATED FEDERAL EVALUATION OF CHIP. 

Section 2108(c) (42 U.S.C. 1397hh(c)) is amended by striking 

paragraph (5) and inserting the following: 

‘‘(5) SUBSEQUENT EVALUATION USING UPDATED INFORMATION.—

‘‘(A) IN GENERAL.—The Secretary, directly or through 

contracts or interagency agreements, shall conduct an 

independent subsequent evaluation of 10 States with approved child health plans. 

‘‘(B) SELECTION OF STATES AND MATTERS INCLUDED.—

Paragraphs (2) and (3) shall apply to such subsequent 

evaluation in the same manner as such provisions apply to 

the evaluation conducted under paragraph (1). 

‘‘(C) SUBMISSION TO CONGRESS.—Not later than December 31, 2010, the Secretary shall submit to Congress the 

results of the evaluation conducted under this paragraph. 

‘‘(D) FUNDING.—Out of any money in the Treasury of the 

United States not otherwise appropriated, there are appropriated $10,000,000 for fiscal year 2009 for the purpose of 

conducting the evaluation authorized under this paragraph. Amounts appropriated under this subparagraph 

shall remain available for expenditure through fiscal year 

2011.’’. 

SEC. 604. ACCESS TO RECORDS FOR IG AND GAO AUDITS AND EVALUATIONS. 

Section 2108(d) (42 U.S.C. 1397hh(d)) is amended to read as follows: 

‘‘(d) ACCESS TO RECORDS FOR IG AND GAO AUDITS AND EVALUATIONS.—For the purpose of evaluating and auditing the program 

established under this title, or title XIX, the Secretary, the Office 

of Inspector General, and the Comptroller General shall have access to any books, accounts, records, correspondence, and other documents that are related to the expenditure of Federal funds under 

this title and that are in the possession, custody, or control of 

States receiving Federal funds under this title or political subdiviVerDate Aug 31 2005 05:23 Sep 25, 2007 Jkt 059008 PO 00000 Frm 00099 Fmt 6659 Sfmt 6602 E:\HR\OC\HR346.XXX HR346

bajohnson on PROD1PC69 with REPORTS
98 

sions thereof, or any grantee or contractor of such States or political subdivisions.’’. 

SEC. 605. NO FEDERAL FUNDING FOR ILLEGAL ALIENS. 

Nothing in this Act allows Federal payment for individuals who 

are not legal residents. 

Subtitle B—Miscellaneous Health 

Provisions 

SEC. 611. DEFICIT REDUCTION ACT TECHNICAL CORRECTIONS. 

(a) CLARIFICATION OF REQUIREMENT TO PROVIDE EPSDT SERVICES FOR ALL CHILDREN IN BENCHMARK BENEFIT PACKAGES UNDER

MEDICAID.—Section 1937(a)(1) (42 U.S.C. 1396u–7(a)(1)), as inserted by section 6044(a) of the Deficit Reduction Act of 2005 (Public Law 109–171, 120 Stat. 88), is amended—

(1) in subparagraph (A)—

(A) in the matter before clause (i)—

(i) by striking ‘‘Notwithstanding any other provision 

of this title’’ and inserting ‘‘Notwithstanding section 

1902 (a) (1) (relating to statewideness), section 1902 

(a)(10)(B)(relating to comparability) and any other provision of this title which would be directly contrary to 

the authority under this section and subject to subsection (E)’’; and 

(ii) by striking ‘‘enrollment in coverage that provides’’ and inserting ‘‘coverage that’’; 

(B) in clause (i), by inserting ‘‘provides’’ after ‘‘(i)’’; and 

(C) by striking clause (ii) and inserting the following: 

‘‘(ii) for any individual described in section 

1905(a)(4)(B) who is eligible under the State plan in 

accordance with paragraphs (10) and (17) of section 

1902(a), consists of the items and services described in 

section 1905(a)(4)(B) (relating to early and periodic 

screening, diagnostic, and treatment services defined 

in section 1905(r)) and provided in accordance with 

the requirements of section 1902(a)(43).’’; 

(2) in subparagraph (C)—

(A) in the heading, by striking ‘‘wrap-around’’ and inserting 

‘‘additional’’; and 

(B) by striking ‘‘wrap-around or’’; and 

(3) by adding at the end the following new subparagraph: 

‘‘(E) RULE OF CONSTRUCTION.—Nothing in this paragraph shall be construed as—

‘‘(i) requiring a State to offer all or any of the items 

and services required by subparagraph (A)(ii) through 

an issuer of benchmark coverage described in subsection (b)(1) or benchmark equivalent coverage described in subsection (b)(2); 

‘‘(ii) preventing a State from offering all or any of 

the items and services required by subparagraph 

(A)(ii) through an issuer of benchmark coverage described in subsection (b)(1) or benchmark equivalent 

coverage described in subsection (b)(2); or 


bajohnson on PROD1PC69 with REPORTS
99 

‘‘(iii) affecting a child’s entitlement to care and services described in subsections (a)(4)(B) and (r) of section 

1905 and provided in accordance with section 

1902(a)(43) whether provided through benchmark coverage, benchmark equivalent coverage, or otherwise.’’. 

(b) CORRECTION OF REFERENCE TO CHILDREN IN FOSTER CARE

RECEIVING CHILD WELFARE SERVICES.—Section 1937(a)(2)(B)(viii) 

(42 U.S.C. 1396u–7(a)(2)(B)(viii), as inserted by section 6044(a) of 

the Deficit Reduction Act of 2005, is amended by striking ‘‘aid or 

assistance is made available under part B of title IV to children in 

foster care and individuals’’ and inserting ‘‘child welfare services 

are made available under part B of title IV on the basis of being 

a child in foster care or’’. 

(c) TRANSPARENCY.—Section 1937 (42 U.S.C. 1396u–7), as inserted by section 6044(a) of the Deficit Reduction Act of 2005, is 

amended by adding at the end the following: 

‘‘(c) PUBLICATION OF PROVISIONS AFFECTED.—With respect to a 

State plan amendment to provide benchmark benefits in accordance with subsections (a) and (b) that is approved by the Secretary, 

the Secretary shall publish on the Internet website of the Centers 

for Medicare & Medicaid Services, a list of the provisions of this 

title that the Secretary has determined do not apply in order to enable the State to carry out the plan amendment and the reason for 

each such determination on the date such approval is made, and 

shall publish such list in the Federal Register and not later than 

30 days after such date of approval..’’. 

(d) EFFECTIVE DATE.—The amendments made by subsections (a), 

(b), and (c) of this section shall take effect as if included in the 

amendment made by section 6044(a) of the Deficit Reduction Act 

of 2005. 

SEC. 612. REFERENCES TO TITLE XXI. 

Section 704 of the Medicare, Medicaid, and SCHIP Balanced 

Budget Refinement Act of 1999, as enacted into law by division B 

of Public Law 106–113 (113 Stat. 1501A–402) is repealed. 

SEC. 613. PROHIBITING INITIATION OF NEW HEALTH OPPORTUNITY 

ACCOUNT DEMONSTRATION PROGRAMS. 

After the date of the enactment of this Act, the Secretary of 

Health and Human Services may not approve any new demonstration programs under section 1938 of the Social Security Act (42 

U.S.C. 1396u–8). 

SEC. 614. COUNTY MEDICAID HEALTH INSURING ORGANIZATIONS; 

GAO REPORT ON MEDICAID MANAGED CARE PAYMENT 

RATES. 

(a) IN GENERAL.—Section 9517(c)(3) of the Consolidated Omnibus 

Budget Reconciliation Act of 1985 (42 U.S.C. 1396b note), as added 

by section 4734 of the Omnibus Budget Reconciliation Act of 1990 

and as amended by section 704 of the Medicare, Medicaid, and 

SCHIP Benefits Improvement and Protection Act of 2000, is 

amended— (1) in subparagraph (A), by inserting ‘‘, in the case of any 

health insuring organization described in such subparagraph 

that is operated by a public entity established by Ventura 

County, and in the case of any health insuring organization described in such subparagraph that is operated by a public entiVerDate Aug 31 2005 05:23 Sep 25, 2007 Jkt 059008 PO 00000 Frm 00101 Fmt 6659 Sfmt 6602 E:\HR\OC\HR346.XXX HR346

bajohnson on PROD1PC69 with REPORTS
100 

ty established by Merced County’’ after ‘‘described in subparagraph (B)’’; and 

(2) in subparagraph (C), by striking ‘‘14 percent’’ and inserting ‘‘16 percent’’. 

(b) EFFECTIVE DATE.—The amendments made by subsection (a) 

shall take effect on the date of the enactment of this Act. 

(c) GAO REPORT ON ACTUARIAL SOUNDNESS OF MEDICAID MANAGED CARE PAYMENT RATES.—Not later than 18 months after the 

date of the enactment of this Act, the Comptroller General of the 

United States shall submit a report to the Committee on Finance 

of the Senate and the Committee on Energy and Commerce of the 

House of Representatives analyzing the extent to which State payment rates for medicaid managed care organizations under title 

XIX of the Social Security Act are actuarially sound. 

SEC. 615. ADJUSTMENT IN COMPUTATION OF MEDICAID FMAP TO DISREGARD AN EXTRAORDINARY EMPLOYER PENSION CONTRIBUTION. 

(a) IN GENERAL.—Only for purposes of computing the FMAP (as 

defined in subsection (e)) for a State for a fiscal year (beginning 

with fiscal year 2006) and applying the FMAP under title XIX of 

the Social Security Act, any significantly disproportionate employer 

pension or insurance fund contribution described in subsection (b) 

shall be disregarded in computing the per capita income of such 

State, but shall not be disregarded in computing the per capita income for the continental United States (and Alaska) and Hawaii. 

(b) SIGNIFICANTLY DISPROPORTIONATE EMPLOYER PENSION AND

INSURANCE FUND CONTRIBUTION.—

(1) IN GENERAL.—For purposes of this section, a significantly 

disproportionate employer pension and insurance fund contribution described in this subsection with respect to a State 

is any identifiable employer contribution towards pension or 

other employee insurance funds that is estimated to accrue to 

residents of such State for a calendar year (beginning with calendar year 2003) if the increase in the amount so estimated exceeds 25 percent of the total increase in personal income in 

that State for the year involved. 

(2) DATA TO BE USED.—For estimating and adjustment a 

FMAP already calculated as of the date of the enactment of 

this Act for a State with a significantly disproportionate employer pension and insurance fund contribution, the Secretary 

shall use the personal income data set originally used in calculating such FMAP. 

(3) SPECIAL ADJUSTMENT FOR NEGATIVE GROWTH.—If in any 

calendar year the total personal income growth in a State is 

negative, an employer pension and insurance fund contribution 

for the purposes of calculating the State’s FMAP for a calendar 

year shall not exceed 125 percent of the amount of such contribution for the previous calendar year for the State. 

(c) HOLD HARMLESS.—No State shall have its FMAP for a fiscal 

year reduced as a result of the application of this section. 

(d) REPORT.—Not later than May 15, 2008, the Secretary shall 

submit to the Congress a report on the problems presented by the 

current treatment of pension and insurance fund contributions in 

the use of Bureau of Economic Affairs calculations for the FMAP 


bajohnson on PROD1PC69 with REPORTS
101 

and for Medicaid and on possible alternative methodologies to mitigate such problems. 

(e) FMAP DEFINED.—For purposes of this section, the term 

‘‘FMAP’’ means the Federal medical assistance percentage, as defined in section 1905(b) of the Social Security Act (42 U.S.C. 

1396(d)). 

SEC. 616. MORATORIUM ON CERTAIN PAYMENT RESTRICTIONS. 

Notwithstanding any other provision of law, the Secretary of 

Health and Human Services shall not, prior to May 28, 2008, take 

any action (through promulgation of regulation, issuance of regulatory guidance, use of federal payment audit procedures, or other 

administrative action, policy, or practice, including a Medical Assistance Manual transmittal or letter to State Medicaid directors) 

to restrict coverage or payment under title XIX of the Social Security Act for rehabilitation services, or school-based administration, 

transportation, or medical services if such restrictions are more restrictive in any aspect than those applied to such coverage or payment as of July 1, 2007. 

SEC. 617. MEDICAID DSH ALLOTMENTS FOR TENNESSEE AND HAWAII. 

(a) TENNESSEE.—The DSH allotments for Tennessee for each fiscal year beginning with fiscal year 2008 under subsection (f)(3) of 

section 1923 of the Social Security Act (42 U.S.C. 1396r–4) are 

deemed to be $30,000,000. The Secretary of Health and Human 

Services may impose a limitation on the total amount of payments 

made to hospitals under the TennCare Section 1115 waiver only to 

the extent that such limitation is necessary to ensure that a hospital does not receive payment in excess of the amounts described 

in subsection (f) of such section or as necessary to ensure that the 

waiver remains budget neutral. 

(b) HAWAII.—Section 1923(f)(6) (42 U.S.C. 1396r–4(f)(6)) is 

amended—

(1) in the paragraph heading, by striking ‘‘FOR FISCAL YEAR

2007’’; and 

(2) in subparagraph (B)—

(A) in clause (i), by striking ‘‘Only with respect to fiscal 

year 2007’’ and inserting ‘‘With respect to each of fiscal 

years 2007 and 2008’’; 

(B) by redesignating clause (ii) as clause (iv); and 

(C) by inserting after clause (i), the following new 

clauses: 

‘‘(ii) TREATMENT AS A LOW-DSH STATE.—With respect 

to fiscal year 2009 and each fiscal year thereafter, notwithstanding the table set forth in paragraph (2), the 

DSH allotment for Hawaii shall be increased in the 

same manner as allotments for low DSH States are increased for such fiscal year under clauses (ii) and (iii) 

of paragraph (5)(B). 

‘‘(iii) CERTAIN HOSPITAL PAYMENTS.—The Secretary 

may not impose a limitation on the total amount of 

payments made to hospitals under the QUEST section 

1115 Demonstration Project except to the extent that 

such limitation is necessary to ensure that a hospital 

does not receive payments in excess of the amounts 

described in subsection (g), or as necessary to ensure 


bajohnson on PROD1PC69 with REPORTS
102 

that such payments under the waiver and such payments pursuant to the allotment provided in this section do not, in the aggregate in any year, exceed the 

amount that the Secretary determines is equal to the 

Federal medical assistance percentage component attributable to disproportionate share hospital payment 

adjustments for such year that is reflected in the 

budget neutrality provision of the QUEST Demonstration Project.’’. 

SEC. 618. CLARIFICATION TREATMENT OF REGIONAL MEDICAL CENTER. 

(a) IN GENERAL.—Nothing in section 1903(w) of the Social Security Act (42 U.S.C. 1396b(w)) shall be construed by the Secretary 

of Health and Human Services as prohibiting a State’s use of funds 

as the non-Federal share of expenditures under title XIX of such 

Act where such funds are transferred from or certified by a publicly-owned regional medical center located in another State and 

described in subsection (b), so long as the Secretary determines 

that such use of funds is proper and in the interest of the program 

under title XIX. 

(b) CENTER DESCRIBED.—A center described in this subsection is 

a publicly-owned regional medical center that— (1) provides level 1 trauma and burn care services; 

(2) provides level 3 neonatal care services; 

(3) is obligated to serve all patients, regardless of ability to 

pay; 

(4) is located within a Standard Metropolitan Statistical 

Area (SMSA) that includes at least 3 States; 

(5) provides services as a tertiary care provider for patients 

residing within a 125–mile radius; and 

(6) meets the criteria for a disproportionate share hospital 

under section 1923 of such Act (42 U.S.C. 1396r–4) in at least 

one State other than the State in which the center is located. 

SEC. 619. EXTENSION OF SSI WEB-BASED ASSET DEMONSTRATION 

PROJECT TO THE MEDICAID PROGRAM. 

(a) IN GENERAL.—Beginning on October 1, 2012, the Secretary of 

Health and Human Services shall provide for the application to 

asset eligibility determinations under the Medicaid program under 

title XIX of the Social Security Act of the automated, secure, webbased asset verification request and response process being applied 

for determining eligibility for benefits under the Supplemental Security Income (SSI) program under title XVI of such Act under a 

demonstration project conducted under the authority of section 

1631(e)(1)(B)(ii) of such Act (42 U.S.C. 1383(e)(1)(B)(ii)). 

(b) LIMITATION.—Such application shall only extend to those 

States in which such demonstration project is operating and only 

for the period in which such project is otherwise provided. 

(c) RULES OF APPLICATION.—For purposes of carrying out subsection (a), notwithstanding any other provision of law, information 

obtained from a financial institution that is used for purposes of 

eligibility determinations under such demonstration project with 

respect to the Secretary of Health and Human Services under the 

SSI program may also be shared and used by States for purposes 

of eligibility determinations under the Medicaid program. In applying section 1631(e)(1)(B)(ii) of the Social Security Act under this 


bajohnson on PROD1PC69 with REPORTS
103 

subsection, references to the Commissioner of Social Security and 

benefits under title XVI of such Act shall be treated as including 

a reference to a State described in subsection (b) and medical assistance under title XIX of such Act provided by such a State. 

Subtitle C—Other Provisions 

SEC. 621. SUPPORT FOR INJURED SERVICEMEMBERS. 

(a) SHORT TITLE.—This section may be cited as the ‘‘Support for 

Injured Servicemembers Act’’. 

(b) SERVICEMEMBER FAMILY LEAVE.—

(1) DEFINITIONS.—Section 101 of the Family and Medical 

Leave Act of 1993 (29 U.S.C. 2611) is amended by adding at 

the end the following: 

‘‘(14) ACTIVE DUTY.—The term ‘active duty’ means duty 

under a call or order to active duty under a provision of law 

referred to in section 101(a)(13)(B) of title 10, United States 

Code. 

‘‘(15) COVERED SERVICEMEMBER.—The term ‘covered 

servicemember’ means a member of the Armed Forces, including a member of the National Guard or a Reserve, who is undergoing medical treatment, recuperation, or therapy, is otherwise in medical hold or medical holdover status, or is otherwise 

on the temporary disability retired list, for a serious injury or 

illness. 

‘‘(16) MEDICAL HOLD OR MEDICAL HOLDOVER STATUS.—The 

term ‘medical hold or medical holdover status’ means—

‘‘(A) the status of a member of the Armed Forces, including a member of the National Guard or a Reserve, assigned or attached to a military hospital for medical care; 

and 

‘‘(B) the status of a member of a reserve component of 

the Armed Forces who is separated, whether pre-deployment or post-deployment, from the member’s unit while in 

need of health care based on a medical condition identified 

while the member is on active duty in the Armed Forces. 

‘‘(17) NEXT OF KIN.—The term ‘next of kin’, used with respect 

to an individual, means the nearest blood relative of that individual. 

‘‘(18) SERIOUS INJURY OR ILLNESS.—The term ‘serious injury 

or illness’, in the case of a member of the Armed Forces, means 

an injury or illness incurred by the member in line of duty on 

active duty in the Armed Forces that may render the member 

medically unfit to perform the duties of the member’s office, 

grade, rank, or rating.’’. 

(2) ENTITLEMENT TO LEAVE.—Section 102(a) of such Act (29 

U.S.C. 2612(a)) is amended by adding at the end the following: 

‘‘(3) SERVICEMEMBER FAMILY LEAVE.—Subject to section 103, 

an eligible employee who is the spouse, son, daughter, parent, 

or next of kin of a covered servicemember shall be entitled to 

a total of 26 workweeks of leave during a 12–month period to 

care for the servicemember. The leave described in this paragraph shall only be available during a single 12–month period. 


bajohnson on PROD1PC69 with REPORTS
104 

‘‘(4) COMBINED LEAVE TOTAL.—During the single 12–month 

period described in paragraph (3), an eligible employee shall be 

entitled to a combined total of 26 workweeks of leave under 

paragraphs (1) and (3). Nothing in this paragraph shall be construed to limit the availability of leave under paragraph (1) 

during any other 12–month period.’’. (3) REQUIREMENTS RELATING TO LEAVE.— (A) SCHEDULE.—Section 102(b) of such Act (29 U.S.C. 

2612(b)) is amended— (i) in paragraph (1), in the second sentence— (I) by striking ‘‘section 103(b)(5)’’ and inserting ‘‘subsection (b)(5) or (f) (as appropriate) of section 

103’’; and 

(II) by inserting ‘‘or under subsection (a)(3)’’ after ‘‘subsection (a)(1)’’; and 

(ii) in paragraph (2), by inserting ‘‘or under subsection (a)(3)’’ after ‘‘subsection (a)(1)’’. (B) SUBSTITUTION OF PAID LEAVE.—Section 102(d) of 

such Act (29 U.S.C. 2612(d)) is amended— (i) in paragraph (1)— (I) by inserting ‘‘(or 26 workweeks in the case of 

leave provided under subsection (a)(3))’’ after ‘‘12 

workweeks’’ the first place it appears; and 

(II) by inserting ‘‘(or 26 workweeks, as appropriate)’’ after ‘‘12 workweeks’’ the second place it 

appears; and 

(ii) in paragraph (2)(B), by adding at the end the following: ‘‘An eligible employee may elect, or an employer may require the employee, to substitute any of 

the accrued paid vacation leave, personal leave, family 

leave, or medical or sick leave of the employee for 

leave provided under subsection (a)(3) for any part of 

the 26–week period of such leave under such subsection.’’. 

(C) NOTICE.—Section 102(e)(2) of such Act (29 U.S.C. 

2612(e)(2)) is amended by inserting ‘‘or under subsection 

(a)(3)’’ after ‘‘subsection (a)(1)’’. (D) SPOUSES EMPLOYED BY SAME EMPLOYER.—Section 

102(f) of such Act (29 U.S.C. 2612(f)) is amended— (i) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), and aligning the margins of 

the subparagraphs with the margins of section 

102(e)(2)(A); 

(ii) by striking ‘‘In any’’ and inserting the following: ‘‘(1) IN GENERAL.—In any’’; and 

(iii) by adding at the end the following: 

‘‘(2) SERVICEMEMBER FAMILY LEAVE.—

‘‘(A) IN GENERAL.—The aggregate number of workweeks 

of leave to which both that husband and wife may be entitled under subsection (a) may be limited to 26 workweeks 

during the single 12–month period described in subsection 

(a)(3) if the leave is—

‘‘(i) leave under subsection (a)(3); or 

‘‘(ii) a combination of leave under subsection (a)(3) 

and leave described in paragraph (1). 


bajohnson on PROD1PC69 with REPORTS
105 

‘‘(B) BOTH LIMITATIONS APPLICABLE.—If the leave taken 

by the husband and wife includes leave described in paragraph (1), the limitation in paragraph (1) shall apply to 

the leave described in paragraph (1).’’. (E) CERTIFICATION.—Section 103 of such Act (29 U.S.C. 

2613) is amended by adding at the end the following: ‘‘(f) CERTIFICATION FOR SERVICEMEMBER FAMILY LEAVE.—An employer may require that a request for leave under section 102(a)(3) 

be supported by a certification issued at such time and in such 

manner as the Secretary may by regulation prescribe.’’. (F) FAILURE TO RETURN.—Section 104(c) of such Act (29 

U.S.C. 2614(c)) is amended— (i) in paragraph (2)(B)(i), by inserting ‘‘or under section 102(a)(3)’’ before the semicolon; and 

(ii) in paragraph (3)(A)— (I) in clause (i), by striking ‘‘or’’ at the end; 

(II) in clause (ii), by striking the period and inserting ‘‘; or’’; and 

(III) by adding at the end the following: ‘‘(iii) a certification issued by the health care provider of the servicemember being cared for by the employee, in the case of an employee unable to return to 

work because of a condition specified in section 

102(a)(3).’’. (G) ENFORCEMENT.—Section 107 of such Act (29 U.S.C. 

2617) is amended, in subsection (a)(1)(A)(i)(II), by inserting 

‘‘(or 26 weeks, in a case involving leave under section 

102(a)(3))’’ after ‘‘12 weeks’’. (H) INSTRUCTIONAL EMPLOYEES.—Section 108 of such Act 

(29 U.S.C. 2618) is amended, in subsections (c)(1), (d)(2), 

and (d)(3), by inserting ‘‘or under section 102(a)(3)’’ after 

‘‘section 102(a)(1)’’. 

(c) SERVICEMEMBER FAMILY LEAVE FOR CIVIL SERVICE EMPLOY- EES.—

(1) DEFINITIONS.—Section 6381 of title 5, United States 

Code, is amended— (A) in paragraph (5), by striking ‘‘and’’ at the end; 

(B) in paragraph (6), by striking the period and inserting ‘‘; and’’; and 

(C) by adding at the end the following: ‘‘(7) the term ‘active duty’ means duty under a call or order 

to active duty under a provision of law referred to in section 

101(a)(13)(B) of title 10, United States Code; ‘‘(8) the term ‘covered servicemember’ means a member of 

the Armed Forces, including a member of the National Guard 

or a Reserve, who is undergoing medical treatment, recuperation, or therapy, is otherwise in medical hold or medical holdover status, or is otherwise on the temporary disability retired 

list, for a serious injury or illness; ‘‘(9) the term ‘medical hold or medical holdover status’’

means—

‘‘(A) the status of a member of the Armed Forces, including a member of the National Guard or a Reserve, assigned or attached to a military hospital for medical care; 

and 


bajohnson on PROD1PC69 with REPORTS
106 

‘‘(B) the status of a member of a reserve component of 

the Armed Forces who is separated, whether pre-deployment or post-deployment, from the member’s unit while in 

need of health care based on a medical condition identified 

while the member is on active duty in the Armed Forces; 

‘‘(10) the term ‘next of kin’, used with respect to an individual, means the nearest blood relative of that individual; and 

‘‘(11) the term ‘serious injury or illness’, in the case of a 

member of the Armed Forces, means an injury or illness incurred by the member in line of duty on active duty in the 

Armed Forces that may render the member medically unfit to 

perform the duties of the member’s office, grade, rank, or rating.’’. 

(2) ENTITLEMENT TO LEAVE.—Section 6382(a) of such title is 

amended by adding at the end the following: 

‘‘(3) Subject to section 6383, an employee who is the spouse, 

son, daughter, parent, or next of kin of a covered 

servicemember shall be entitled to a total of 26 administrative 

workweeks of leave during a 12–month period to care for the 

servicemember. The leave described in this paragraph shall 

only be available during a single 12–month period. 

‘‘(4) During the single 12–month period described in paragraph (3), an employee shall be entitled to a combined total of 

26 administrative workweeks of leave under paragraphs (1) 

and (3). Nothing in this paragraph shall be construed to limit 

the availability of leave under paragraph (1) during any other 

12–month period.’’. 

(3) REQUIREMENTS RELATING TO LEAVE.—

(A) SCHEDULE.—Section 6382(b) of such title is amended—

(i) in paragraph (1), in the second sentence—

(I) by striking ‘‘section 6383(b)(5)’’ and inserting 

‘‘subsection (b)(5) or (f) (as appropriate) of section 

6383’’; and 

(II) by inserting ‘‘or under subsection (a)(3)’’

after ‘‘subsection (a)(1)’’; and 

(ii) in paragraph (2), by inserting ‘‘or under subsection (a)(3)’’ after ‘‘subsection (a)(1)’’. 

(B) SUBSTITUTION OF PAID LEAVE.—Section 6382(d) of 

such title is amended by adding at the end the following: 

‘‘An employee may elect to substitute for leave under subsection (a)(3) any of the employee’s accrued or accumulated 

annual or sick leave under subchapter I for any part of the 

26–week period of leave under such subsection.’’. 

(C) NOTICE.—Section 6382(e) of such title is amended by 

inserting ‘‘or under subsection (a)(3)’’ after ‘‘subsection 

(a)(1)’’. 

(D) CERTIFICATION.—Section 6383 of such title is amended by adding at the end the following: 

‘‘(f) An employing agency may require that a request for leave 

under section 6382(a)(3) be supported by a certification issued at 

such time and in such manner as the Office of Personnel Management may by regulation prescribe.’’. 


bajohnson on PROD1PC69 with REPORTS
107 

SEC. 622. MILITARY FAMILY JOB PROTECTION. 

(a) SHORT TITLE.—This section may be cited as the ‘‘Military 

Family Job Protection Act’’. 

(b) PROHIBITION ON DISCRIMINATION IN EMPLOYMENT AGAINST

CERTAIN FAMILY MEMBERS CARING FOR RECOVERING MEMBERS OF

THE ARMED FORCES.—A family member of a recovering 

servicemember described in subsection (c) shall not be denied retention in employment, promotion, or any benefit of employment by 

an employer on the basis of the family member’s absence from employment as described in that subsection, for a period of not more 

than 52 workweeks. 

(c) COVERED FAMILY MEMBERS.—A family member described in 

this subsection is a family member of a recovering servicemember 

who is—

(1) on invitational orders while caring for the recovering 

servicemember; 

(2) a non-medical attendee caring for the recovering 

servicemember; or 

(3) receiving per diem payments from the Department of Defense while caring for the recovering servicemember. 

(d) TREATMENT OF ACTIONS.—An employer shall be considered to 

have engaged in an action prohibited by subsection (b) with respect 

to a person described in that subsection if the absence from employment of the person as described in that subsection is a motivating factor in the employer’s action, unless the employer can 

prove that the action would have been taken in the absence of the 

absence of employment of the person. 

(e) DEFINITIONS.—In this section: 

(1) BENEFIT OF EMPLOYMENT.—The term ‘‘benefit of employment’’ has the meaning given such term in section 4303 of title 

38, United States Code. 

(2) CARING FOR.—The term ‘‘caring for’’, used with respect to 

a recovering servicemember, means providing personal, medical, or convalescent care to the recovering servicemember, 

under circumstances that substantially interfere with an employee’s ability to work. 

(3) EMPLOYER.—The term ‘‘employer’’ has the meaning given 

such term in section 4303 of title 38, United States Code, except that the term does not include any person who is not considered to be an employer under title I of the Family and Medical Leave Act of 1993 (29 U.S.C. 2611 et seq.) because the person does not meet the requirements of section 101(4)(A)(i) of 

such Act (29 U.S.C. 2611(4)(A)(i)). 

(4) FAMILY MEMBER.—The term ‘‘family member’’, with respect to a recovering servicemember, has the meaning given 

that term in section 411h(b) of title 37, United States Code. 

(5) RECOVERING SERVICEMEMBER.—The term ‘‘recovering 

servicemember’’ means a member of the Armed Forces, including a member of the National Guard or a Reserve, who is undergoing medical treatment, recuperation, or therapy, or is otherwise in medical hold or medical holdover status, for an injury, illness, or disease incurred or aggravated while on active 

duty in the Armed Forces. 


bajohnson on PROD1PC69 with REPORTS
108 

SEC. 623. OUTREACH REGARDING HEALTH INSURANCE OPTIONS 

AVAILABLE TO CHILDREN. 

(a) DEFINITIONS.—In this section—

(1) the terms ‘‘Administration’’ and ‘‘Administrator’’ means 

the Small Business Administration and the Administrator 

thereof, respectively; 

(2) the term ‘‘certified development company’’ means a development company participating in the program under title V of 

the Small Business Investment Act of 1958 (15 U.S.C. 695 et 

seq.); 

(3) the term ‘‘Medicaid program’’ means the program established under title XIX of the Social Security Act (42 U.S.C. 

1396 et seq.); 

(4) the term ‘‘Service Corps of Retired Executives’’ means the 

Service Corps of Retired Executives authorized by section 

8(b)(1) of the Small Business Act (15 U.S.C. 637(b)(1)); 

(5) the term ‘‘small business concern’’ has the meaning given 

that term in section 3 of the Small Business Act (15 U.S.C. 

632); 

(6) the term ‘‘small business development center’’ means a 

small business development center described in section 21 of 

the Small Business Act (15 U.S.C. 648); 

(7) the term ‘‘State’’ has the meaning given that term for 

purposes of title XXI of the Social Security Act (42 U.S.C. 

1397aa et seq.); 

(8) the term ‘‘State Children’s Health Insurance Program’’

means the State Children’s Health Insurance Program established under title XXI of the Social Security Act (42 U.S.C. 

1397aa et seq.); 

(9) the term ‘‘task force’’ means the task force established 

under subsection (b)(1); and 

(10) the term ‘‘women’s business center’’ means a women’s 

business center described in section 29 of the Small Business 

Act (15 U.S.C. 656). 

(b) ESTABLISHMENT OF TASK FORCE.—

(1) ESTABLISHMENT.—There is established a task force to 

conduct a nationwide campaign of education and outreach for 

small business concerns regarding the availability of coverage 

for children through private insurance options, the Medicaid 

program, and the State Children’s Health Insurance Program. 

(2) MEMBERSHIP.—The task force shall consist of the Administrator, the Secretary of Health and Human Services, the Secretary of Labor, and the Secretary of the Treasury. 

(3) RESPONSIBILITIES.—The campaign conducted under this 

subsection shall include—

(A) efforts to educate the owners of small business concerns about the value of health coverage for children; 

(B) information regarding options available to the owners and employees of small business concerns to make insurance more affordable, including Federal and State tax 

deductions and credits for health care-related expenses 

and health insurance expenses and Federal tax exclusion 

for health insurance options available under employersponsored cafeteria plans under section 125 of the Internal 

Revenue Code of 1986; 


bajohnson on PROD1PC69 with REPORTS
109 

(C) efforts to educate the owners of small business concerns about assistance available through public programs; 

and 

(D) efforts to educate the owners and employees of small 

business concerns regarding the availability of the hotline 

operated as part of the Insure Kids Now program of the 

Department of Health and Human Services. 

(4) IMPLEMENTATION.—In carrying out this subsection, the 

task force may— (A) use any business partner of the Administration, including—

(i) a small business development center; 

(ii) a certified development company; 

(iii) a women’s business center; and 

(iv) the Service Corps of Retired Executives; 

(B) enter into— (i) a memorandum of understanding with a chamber 

of commerce; and 

(ii) a partnership with any appropriate small business concern or health advocacy group; and 

(C) designate outreach programs at regional offices of 

the Department of Health and Human Services to work 

with district offices of the Administration. 

(5) WEBSITE.—The Administrator shall ensure that links to 

information on the eligibility and enrollment requirements for 

the Medicaid program and State Children’s Health Insurance 

Program of each State are prominently displayed on the 

website of the Administration. 

(6) REPORT.—

(A) IN GENERAL.—Not later than 2 years after the date 

of enactment of this Act, and every 2 years thereafter, the 

Administrator shall submit to the Committee on Small 

Business and Entrepreneurship of the Senate and the 

Committee on Small Business of the House of Representatives a report on the status of the nationwide campaign 

conducted under paragraph (1). 

(B) CONTENTS.—Each report submitted under subparagraph (A) shall include a status update on all efforts made 

to educate owners and employees of small business concerns on options for providing health insurance for children through public and private alternatives. 

SEC. 624. SENSE OF SENATE REGARDING ACCESS TO AFFORDABLE 

AND MEANINGFUL HEALTH INSURANCE COVERAGE. 

(a) FINDINGS.—The Senate finds the following: 

(1) There are approximately 45 million Americans currently 

without health insurance. 

(2) More than half of uninsured workers are employed by 

businesses with less than 25 employees or are self-employed. 

(3) Health insurance premiums continue to rise at more than 

twice the rate of inflation for all consumer goods. 

(4) Individuals in the small group and individual health insurance markets usually pay more for similar coverage than 

those in the large group market. 

(5) The rapid growth in health insurance costs over the last 

few years has forced many employers, particularly small emVerDate Aug 31 2005 05:23 Sep 25, 2007 Jkt 059008 PO 00000 Frm 00111 Fmt 6659 Sfmt 6602 E:\HR\OC\HR346.XXX HR346

bajohnson on PROD1PC69 with REPORTS
110 

ployers, to increase deductibles and co-pays or to drop coverage 

completely. 

(b) SENSE OF THE SENATE.—The Senate—

(1) recognizes the necessity to improve affordability and access to health insurance for all Americans; 

(2) acknowledges the value of building upon the existing private health insurance market; and 

(3) affirms its intent to enact legislation this year that, with 

appropriate protection for consumers, improves access to affordable and meaningful health insurance coverage for employees of small businesses and individuals by—

(A) facilitating pooling mechanisms, including pooling 

across State lines, and 

(B) providing assistance to small businesses and individuals, including financial assistance and tax incentives, for 

the purchase of private insurance coverage. 

TITLE VII—REVENUE PROVISIONS 

SEC. 701. INCREASE IN EXCISE TAX RATE ON TOBACCO PRODUCTS. 

(a) CIGARS.—Section 5701(a) of the Internal Revenue Code of 

1986 is amended—

(1) by striking ‘‘$1.828 cents per thousand ($1.594 cents per 

thousand on cigars removed during 2000 or 2001)’’ in paragraph (1) and inserting ‘‘$50.00 per thousand’’, 

(2) by striking ‘‘20.719 percent (18.063 percent on cigars removed during 2000 or 2001)’’ in paragraph (2) and inserting 

‘‘52.988 percent’’, and 

(3) by striking ‘‘$48.75 per thousand ($42.50 per thousand on 

cigars removed during 2000 or 2001)’’ in paragraph (2) and inserting ‘‘$3.00 per cigar’’. 

(b) CIGARETTES.—Section 5701(b) of such Code is amended—

(1) by striking ‘‘$19.50 per thousand ($17 per thousand on 

cigarettes removed during 2000 or 2001)’’ in paragraph (1) and 

inserting ‘‘$50.00 per thousand’’, and 

(2) by striking ‘‘$40.95 per thousand ($35.70 per thousand on 

cigarettes removed during 2000 or 2001)’’ in paragraph (2) and 

inserting ‘‘$105.00 per thousand’’. 

(c) CIGARETTE PAPERS.—Section 5701(c) of such Code is amended 

by striking ‘‘1.22 cents (1.06 cents on cigarette papers removed during 2000 or 2001)’’ and inserting ‘‘3.13 cents’’. 

(d) CIGARETTE TUBES.—Section 5701(d) of such Code is amended 

by striking ‘‘2.44 cents (2.13 cents on cigarette tubes removed during 2000 or 2001)’’ and inserting ‘‘6.26 cents’’. 

(e) SMOKELESS TOBACCO.—Section 5701(e) of such Code is 

amended—

(1) by striking ‘‘58.5 cents (51 cents on snuff removed during 

2000 or 2001)’’ in paragraph (1) and inserting ‘‘$1.50’’, and 

(2) by striking ‘‘19.5 cents (17 cents on chewing tobacco removed during 2000 or 2001)’’ in paragraph (2) and inserting ‘‘50 cents’’. (f) PIPE TOBACCO.—Section 5701(f) of such Code is amended by 

striking ‘‘$1.0969 cents (95.67 cents on pipe tobacco removed during 

2000 or 2001)’’ and inserting ‘‘$2.8126 cents’’. 


bajohnson on PROD1PC69 with REPORTS
111 

(g) ROLL-YOUR-OWN TOBACCO.—Section 5701(g) of such Code is 

amended by striking ‘‘$1.0969 cents (95.67 cents on roll-your-own 

tobacco removed during 2000 or 2001)’’ and inserting ‘‘$8.8889 

cents’’. 

(h) FLOOR STOCKS TAXES.—

(1) IMPOSITION OF TAX.—On tobacco products (other than cigars described in section 5701(a)(2) of the Internal Revenue 

Code of 1986) and cigarette papers and tubes manufactured in 

or imported into the United States which are removed before 

January 1, 2008, and held on such date for sale by any person, 

there is hereby imposed a tax in an amount equal to the excess 

of—

(A) the tax which would be imposed under section 5701 

of such Code on the article if the article had been removed 

on such date, over 

(B) the prior tax (if any) imposed under section 5701 of 

such Code on such article. 

(2) CREDIT AGAINST TAX.—Each person shall be allowed as a 

credit against the taxes imposed by paragraph (1) an amount 

equal to $500. Such credit shall not exceed the amount of taxes 

imposed by paragraph (1) on January 1, 2008, for which such 

person is liable. 

(3) LIABILITY FOR TAX AND METHOD OF PAYMENT.—

(A) LIABILITY FOR TAX.—A person holding tobacco products, cigarette papers, or cigarette tubes on January 1, 

2008, to which any tax imposed by paragraph (1) applies 

shall be liable for such tax. 

(B) METHOD OF PAYMENT.—The tax imposed by paragraph (1) shall be paid in such manner as the Secretary 

shall prescribe by regulations. 

(C) TIME FOR PAYMENT.—The tax imposed by paragraph 

(1) shall be paid on or before April 1, 2008. 

(4) ARTICLES IN FOREIGN TRADE ZONES.—Notwithstanding 

the Act of June 18, 1934 (commonly known as the Foreign 

Trade Zone Act, 48 Stat. 998, 19 U.S.C. 81a et seq.) or any 

other provision of law, any article which is located in a foreign 

trade zone on January 1, 2008, shall be subject to the tax imposed by paragraph (1) if—

(A) internal revenue taxes have been determined, or customs duties liquidated, with respect to such article before 

such date pursuant to a request made under the 1st proviso of section 3(a) of such Act, or 

(B) such article is held on such date under the supervision of an officer of the United States Customs and Border Protection of the Department of Homeland Security 

pursuant to the 2d proviso of such section 3(a). 

(5) DEFINITIONS.—For purposes of this subsection—

(A) IN GENERAL.—Any term used in this subsection 

which is also used in section 5702 of the Internal Revenue 

Code of 1986 shall have the same meaning as such term 

has in such section. 

(B) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of the Treasury or the Secretary’s delegate. 


bajohnson on PROD1PC69 with REPORTS
112 

(6) CONTROLLED GROUPS.—Rules similar to the rules of section 5061(e)(3) of such Code shall apply for purposes of this 

subsection. 

(7) OTHER LAWS APPLICABLE.—All provisions of law, including penalties, applicable with respect to the taxes imposed by 

section 5701 of such Code shall, insofar as applicable and not 

inconsistent with the provisions of this subsection, apply to the 

floor stocks taxes imposed by paragraph (1), to the same extent 

as if such taxes were imposed by such section 5701. The Secretary may treat any person who bore the ultimate burden of 

the tax imposed by paragraph (1) as the person to whom a 

credit or refund under such provisions may be allowed or 

made. 

(i) EFFECTIVE DATE.—The amendments made by this section 

shall apply to articles removed (as defined in section 5702(j) of the 

Internal Revenue Code of 1986) after December 31, 2007. 

SEC. 702. ADMINISTRATIVE IMPROVEMENTS. 

(a) PERMIT, REPORT, AND RECORD REQUIREMENTS FOR MANUFACTURERS AND IMPORTERS OF PROCESSED TOBACCO.—

(1) PERMITS.—

(A) APPLICATION.—Section 5712 of the Internal Revenue 

Code of 1986 is amended by inserting ‘‘or processed tobacco’’ after ‘‘tobacco products’’. 

(B) ISSUANCE.—Section 5713(a) of such Code is amended 

by inserting ‘‘or processed tobacco’’ after ‘‘tobacco products’’. 

(2) INVENTORIES AND REPORTS.—

(A) INVENTORIES.—Section 5721 of such Code is amended by inserting ‘‘, processed tobacco,’’ after ‘‘tobacco products’’. 

(B) REPORTS.—Section 5722 of such Code is amended by 

inserting ‘‘, processed tobacco,’’ after ‘‘tobacco products’’. 

(3) RECORDS.—Section 5741 of such Code is amended by inserting ‘‘, processed tobacco,’’ after ‘‘tobacco products’’. 

(4) MANUFACTURER OF PROCESSED TOBACCO.—Section 5702 of 

such Code is amended by adding at the end the following new 

subsection: 

‘‘(p) MANUFACTURER OF PROCESSED TOBACCO.—

‘‘(1) IN GENERAL.—The term ‘manufacturer of processed tobacco’ means any person who processes any tobacco other than 

tobacco products. 

‘‘(2) PROCESSED TOBACCO.—The processing of tobacco shall 

not include the farming or growing of tobacco or the handling 

of tobacco solely for sale, shipment, or delivery to a manufacturer of tobacco products or processed tobacco.’’. 

(5) CONFORMING AMENDMENT.—Section 5702(k) of such Code 

is amended by inserting ‘‘, or any processed tobacco,’’ after 

‘‘nontaxpaid tobacco products or cigarette papers or tubes’’. 

(6) EFFECTIVE DATE.—The amendments made by this subsection shall take effect on January 1, 2008. 

(b) BASIS FOR DENIAL, SUSPENSION, OR REVOCATION OF PERMITS.—

(1) DENIAL.—Paragraph (3) of section 5712 of such Code is 

amended to read as follows: 


bajohnson on PROD1PC69 with REPORTS
113 

‘‘(3) such person (including, in the case of a corporation, any 

officer, director, or principal stockholder and, in the case of a 

partnership, a partner)—

‘‘(A) is, by reason of his business experience, financial 

standing, or trade connections or by reason of previous or 

current legal proceedings involving a felony violation of 

any other provision of Federal criminal law relating to tobacco products, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with this chapter, 

‘‘(B) has been convicted of a felony violation of any provision of Federal or State criminal law relating to tobacco 

products, cigarette paper, or cigarette tubes, or 

‘‘(C) has failed to disclose any material information required or made any material false statement in the application therefor.’’. 

(2) SUSPENSION OR REVOCATION.—Subsection (b) of section 

5713 of such Code is amended to read as follows: 

‘‘(b) SUSPENSION OR REVOCATION.—

‘‘(1) SHOW CAUSE HEARING.—If the Secretary has reason to 

believe that any person holding a permit—

‘‘(A) has not in good faith complied with this chapter, or 

with any other provision of this title involving intent to defraud, 

‘‘(B) has violated the conditions of such permit, 

‘‘(C) has failed to disclose any material information required or made any material false statement in the application for such permit, 

‘‘(D) has failed to maintain his premises in such manner 

as to protect the revenue, 

‘‘(E) is, by reason of previous or current legal proceedings involving a felony violation of any other provision 

of Federal criminal law relating to tobacco products, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with this chapter, or 

‘‘(F) has been convicted of a felony violation of any provision of Federal or State criminal law relating to tobacco 

products, cigarette paper, or cigarette tubes, 

the Secretary shall issue an order, stating the facts charged, 

citing such person to show cause why his permit should not be 

suspended or revoked. 

‘‘(2) ACTION FOLLOWING HEARING.—If, after hearing, the Secretary finds that such person has not shown cause why his permit should not be suspended or revoked, such permit shall be 

suspended for such period as the Secretary deems proper or 

shall be revoked.’’. 

(3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect on the date of the enactment of this 

Act. 

(c) APPLICATION OF INTERNAL REVENUE CODE STATUTE OF LIMITATIONS FOR ALCOHOL AND TOBACCO EXCISE TAXES.—

(1) IN GENERAL.—Section 514(a) of the Tariff Act of 1930 (19 

U.S.C. 1514(a)) is amended by striking ‘‘and section 520 (relating to refunds)’’ and inserting ‘‘section 520 (relating to refunds), and section 6501 of the Internal Revenue Code of 1986 


bajohnson on PROD1PC69 with REPORTS
114 

(but only with respect to taxes imposed under chapters 51 and 

52 of such Code)’’. (2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to articles imported after the date of the enactment of this Act. 

(d) EXPANSION OF DEFINITION OF ROLL-YOUR-OWN TOBACCO.— (1) IN GENERAL.—Section 5702(o) of the Internal Revenue 

Code of 1986 is amended by inserting ‘‘or cigars, or for use as 

wrappers thereof’’ before the period at the end. 

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to articles removed (as defined in section 

5702(j) of the Internal Revenue Code of 1986) after December 

31, 2007. 

(e) TIME OF TAX FOR UNLAWFULLY MANUFACTURED TOBACCO

PRODUCTS.—

(1) IN GENERAL.—Section 5703(b)(2) of such Code is amended 

by adding at the end the following new subparagraph: 

‘‘(F) SPECIAL RULE FOR UNLAWFULLY MANUFACTURED TOBACCO PRODUCTS.—In the case of any tobacco products, cigarette paper, or cigarette tubes produced in the United 

States at any place other than the premises of a manufacturer of tobacco products, cigarette paper, or cigarette 

tubes that has filed the bond and obtained the permit required under this chapter, tax shall be due and payable 

immediately upon manufacture.’’. 

(2) EFFECTIVE DATE.—The amendment made by this subsection shall take effect on the date of the enactment of this 

Act. 

SEC. 703. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES. 

Subparagraph (B) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 is amended by striking ‘‘114.75 

percent’’ and inserting ‘‘113.75 percent’’. 

In lieu of the matter proposed to be inserted to the title of the 

Act, insert the following: ‘‘An Act to amend title XXI of the Social 

Security Act to extend and improve the Children’s Health Insurance Program, and for other purposes.’’. 

Æ 


bajohnson on PROD1PC69 with REPORTS