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[111th Congress Public Law 3]
[From the U.S. Government Printing Office]

[DOCID: f:publ003.111]

[[Page 7]]

     CHILDREN'S HEALTH INSURANCE PROGRAM REAUTHORIZATION ACT OF 2009

[[Page 123 STAT. 8]]

Public Law 111-3
111th Congress

                                 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. <<NOTE: Feb. 4, 2009 -  [H.R. 2]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Children's 
Health Insurance Program Reauthorization Act of 2009.>> 
SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; 
                              REFERENCES; TABLE OF CONTENTS.

    (a) <<NOTE: 42 USC 1305 note.>>  Short Title.--This Act may be cited 
as the ``Children's Health Insurance Program Reauthorization Act of 
2009''.

    (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) <<NOTE: 42 USC 1396 note.>>  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 2009 
           through 2013.
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. Two-year initial availability of CHIP allotments.
Sec. 106. Redistribution of unused allotments.
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.

[[Page 123 STAT. 9]]

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.

                    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.
Sec. 214. Permitting States to ensure coverage without a 5-year delay of 
           certain children and pregnant women under the Medicaid 
           program and CHIP.

      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. Clarification of coverage of services provided through school-
           based health centers.
Sec. 506. Medicaid and CHIP Payment and Access Commission.

     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; disallowance for 
           unauthorized expenditures.

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

[[Page 123 STAT. 10]]

Sec. 615. Clarification treatment of regional medical center.
Sec. 616. Extension of Medicaid DSH allotments for Tennessee and Hawaii.
Sec. 617. GAO report on Medicaid managed care payment rates.

                      Subtitle C--Other Provisions

Sec. 621. Outreach regarding health insurance options available to 
           children.
Sec. 622. Sense of the 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. Treasury study concerning magnitude of tobacco smuggling in 
           the United States.
Sec. 704. Time for payment of corporate estimated taxes.

SEC. 2. <<NOTE: 42 USC 1396 note.>> 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. <<NOTE: 42 USC 1396 note.>> 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) through (d), this Act (and the amendments 
made by this Act) shall take effect on April 1, 2009, and shall apply to 
child health assistance and medical assistance provided on or after that 
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 the respective plan 
to meet one or more additional requirements imposed by amendments made 
by this Act, the respective 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) Coordination of CHIP Funding for Fiscal Year 2009.--
Notwithstanding any other provision of law, insofar as funds have been 
appropriated under section 2104(a)(11), 2104(k), or 2104(l) of the 
Social Security Act, as amended by section 201 of Public Law 110-173, to 
provide allotments to States under CHIP for fiscal year 2009--
            (1) any amounts that are so appropriated that are not so 
        allotted and obligated before April 1, 2009 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--

[[Page 123 STAT. 11]]

            (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 (10), by striking ``and'' at the end;
            (2) by amending paragraph (11), by striking ``each of fiscal 
        years 2008 and 2009'' and inserting ``fiscal year 2008''; and
            (3) by adding at the end the following new paragraphs:
            ``(12) for fiscal year 2009, $10,562,000,000;
            ``(13) for fiscal year 2010, $12,520,000,000;
            ``(14) for fiscal year 2011, $13,459,000,000;
            ``(15) for fiscal year 2012, $14,982,000,000; and
            ``(16) for fiscal year 2013, for purposes of making 2 semi-
        annual allotments--
                    ``(A) $2,850,000,000 for the period beginning on 
                October 1, 2012, and ending on March 31, 2013, and
                    ``(B) $2,850,000,000 for the period beginning on 
                April 1, 2013, and ending on September 30, 2013.''.
SEC. 102. ALLOTMENTS FOR STATES AND TERRITORIES FOR FISCAL YEARS 
                        2009 THROUGH 2013.

    Section 2104 (42 U.S.C. 1397dd) is amended--
            (1) in subsection (b)(1), by striking ``subsection (d)'' and 
        inserting ``subsections (d) and (m)'';
            (2) in subsection (c)(1), by striking ``subsection (d)'' and 
        inserting ``subsections (d) and (m)(4)''; and
            (3) by adding at the end the following new subsection:

    ``(m) Allotments for Fiscal Years 2009 Through 2013.--
            ``(1) For fiscal year 2009.--
                    ``(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 2009 from the amount made available 
                under subsection (a)(12), 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 2008, multiplied 
                      by the allotment increase factor determined under 
                      paragraph (5) for fiscal year 2009.

[[Page 123 STAT. 12]]

                          ``(ii) The amount allotted to the State for 
                      fiscal year 2008 under subsection (b), multiplied 
                      by the allotment increase factor determined under 
                      paragraph (5) for fiscal year 2009.
                          ``(iii) <<NOTE: Certification. Deadline.>> The 
                      projected total Federal payments to the State 
                      under this title for fiscal year 2009, as 
                      determined on the basis of the February 2009 
                      projections certified by the State to the 
                      Secretary by not later than March 31, 2009.
                    ``(B) For the commonwealths and territories.-- 
                <<NOTE: Applicability.>> Subject to the succeeding 
                provisions of this paragraph and paragraph (4), the 
                Secretary shall allot for fiscal year 2009 from the 
                amount made available under subsection (a)(12) 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 1999 through 2008, multiplied 
                by the allotment increase factor determined under 
                paragraph (5) for fiscal year 2009, except that 
                subparagraph (B) thereof shall be applied by 
                substituting `the United States' for `the State'.
                    ``(C) 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 a revised projection described in subparagraph 
                (A)(iii) in order to take into account changes in such 
                projections attributable to the application of paragraph 
                (4) of such section.
            ``(2) For fiscal years 2010 through 2012.--
                    ``(A) In general.--Subject to paragraphs (4) and 
                (6), from the amount made available under paragraphs 
                (13) through (15) of subsection (a) for each of fiscal 
                years 2010 through 2012, 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 
                      2010.--For fiscal year 2010, the allotment of the 
                      State is equal to the sum of--
                                    ``(I) the amount of the State 
                                allotment under paragraph (1) for fiscal 
                                year 2009; and
                                    ``(II) the amount of any payments 
                                made to the State under subsection (k), 
                                (l), or (n) for fiscal year 2009,
                      multiplied by the allotment increase factor under 
                      paragraph (5) for fiscal year 2010.
                          ``(ii) Rebasing in fiscal year 2011.--For 
                      fiscal year 2011, the allotment of the 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 2010 
                      (including payments made to the State under 
                      subsection (n) for fiscal year 2010 as well as 
                      amounts redistributed to the State in fiscal year 
                      2010), multiplied by the allotment increase factor 
                      under paragraph (5) for fiscal year 2011.

[[Page 123 STAT. 13]]

                          ``(iii) Growth factor update for fiscal year 
                      2012.--For fiscal year 2012, the allotment of the 
                      State is equal to the sum of--
                                    ``(I) the amount of the State 
                                allotment under clause (ii) for fiscal 
                                year 2011; and
                                    ``(II) the amount of any payments 
                                made to the State under subsection (n) 
                                for fiscal year 2011,
                      multiplied by the allotment increase factor under 
                      paragraph (5) for fiscal year 2012.
            ``(3) For fiscal year 2013.--
                    ``(A) First half.--Subject to paragraphs (4) and 
                (6), from the amount made available under subparagraph 
                (A) of paragraph (16) 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 2009, 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 (16) 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 2012 (including payments made to the 
                State under subsection (n) for fiscal year 2012 as well 
                as amounts redistributed to the State in fiscal year 
                2012), multiplied by the allotment increase factor under 
                paragraph (5) for fiscal year 2013.
                    ``(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)(16)(A); and
                                    ``(II) the amount of the 
                                appropriation for such period under 
                                section 108 of the Children's Health 
                                Insurance Program Reauthorization Act of 
                                2009; to
                          ``(ii) the sum of the--
                                    ``(I) amount described in clause 
                                (i); and

[[Page 123 STAT. 14]]

                                    ``(II) the amount made available 
                                under subsection (a)(16)(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 2013, for a semi-
        annual period 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 program 
        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 
                2010 and ending with fiscal year 2013); 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) <<NOTE: Certification. Deadline.>> 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 
        2010 or fiscal year 2012.
            ``(7) Availability of amounts for semi-annual periods in 
        fiscal year 2013.--Each semi-annual allotment made under

[[Page 123 STAT. 15]]

        paragraph (3) for a period in fiscal year 2013 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.''.
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:
    ``(n) 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 2009, an amount equal to 
                      20 percent of the amount made available under 
                      paragraph (12) of subsection (a) for the fiscal 
                      year; and
                          ``(ii) for each of fiscal years 2010 through 
                      2012 (and for each of the semi-annual allotment 
                      periods for fiscal year 2013), 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 2010 
                through 2012 (and for each of the semi-annual allotment 
                periods for fiscal year 2013), 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 2009, fiscal year 2010, fiscal 
                year 2011, fiscal year 2012, or a semi-annual allotment 
                period for fiscal year 2013, 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

[[Page 123 STAT. 16]]

                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 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 2009 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 2008 increased by the population 
                      growth for children in that State for the year 
                      ending on June 30, 2007 (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 (m)(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 2009 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 
                      2008, increased by the annual percentage increase 
                      in the projected per capita amount of National 
                      Health Expenditures (as estimated by the 
                      Secretary) for 2009; 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

[[Page 123 STAT. 17]]

                      Health Expenditures (as estimated by the 
                      Secretary) for the year in which such subsequent 
                      fiscal year ends.
                    ``(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.-- 
                <<NOTE: Applicability.>> 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 
                territories.--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 2009 and ending with fiscal year 2013), 
                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. <<NOTE: Deadline.>> 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 for above baseline medicaid child 
                enrollment costs.--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) First tier above baseline medicaid 
                      enrollees.--An amount equal to the number of first

[[Page 123 STAT. 18]]

                      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)) for the State and fiscal year under title 
                      XIX.
                          ``(ii) Second tier above baseline medicaid 
                      enrollees.--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 
                      62.5 percent of the projected per capita State 
                      Medicaid expenditures (as determined under 
                      subparagraph (D)) for the State and fiscal year 
                      under title XIX.
                    ``(C) Number of first and second tier above baseline 
                child enrollees; baseline number of child enrollees.--
                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 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 plan under title XIX, 
                                respectively; exceeds
                                    ``(II) the baseline number of 
                                enrollees described in clause (iii) for 
                                the State and fiscal year under title 
                                XIX, respectively;
                      but not to exceed 10 percent 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 enrollees for a State for a fiscal 
                      year under 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 title XIX 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 title XIX, as described in 
                                clause (i)(II), and the maximum number 
                                of first tier above baseline child 
                                enrollees for the State and fiscal year 
                                under title XIX, 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 title XIX--
                                    ``(I) for fiscal year 2009 is equal 
                                to the monthly average unduplicated 
                                number of qualifying children enrolled 
                                in the State plan under title XIX during 
                                fiscal year 2007 increased by the 
                                population growth for children in that 
                                State from 2007 to 2008 (as estimated by 
                                the Bureau of the Census) plus 4 
                                percentage points, and further increased

[[Page 123 STAT. 19]]

                                by the population growth for children in 
                                that State from 2008 to 2009 (as 
                                estimated by the Bureau of the Census) 
                                plus 4 percentage points;
                                    ``(II) for each of fiscal years 
                                2010, 2011, and 2012, is equal to the 
                                baseline number of child enrollees for 
                                the State for the previous fiscal year 
                                under title XIX, increased by the 
                                population growth for children in that 
                                State from the calendar year in which 
                                the respective fiscal year begins to the 
                                succeeding calendar year (as estimated 
                                by the Bureau of the Census) plus 3.5 
                                percentage points;
                                    ``(III) for each of fiscal years 
                                2013, 2014, and 2015, is equal to the 
                                baseline number of child enrollees for 
                                the State for the previous fiscal year 
                                under title XIX, increased by the 
                                population growth for children in that 
                                State from the calendar year in which 
                                the respective fiscal year begins to the 
                                succeeding calendar year (as estimated 
                                by the Bureau of the Census) plus 3 
                                percentage points; and
                                    ``(IV) for a subsequent fiscal year 
                                is equal to the baseline number of child 
                                enrollees for the State for the previous 
                                fiscal year under title XIX, increased 
                                by the population growth for children in 
                                that State from the calendar year in 
                                which the fiscal year involved begins to 
                                the succeeding calendar year (as 
                                estimated by the Bureau of the Census) 
                                plus 2 percentage points.
                    ``(D) Projected per capita state medicaid 
                expenditures.--For purposes of subparagraph (B), 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 Federal 
                medical assistance percentage (as defined in section 
                1905(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 $3,225,000,000 for fiscal year 
                      2009 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

[[Page 123 STAT. 20]]

                      be available, without fiscal year limitation, for 
                      making payments under this paragraph:
                                    ``(I) Unobligated national 
                                allotment.--
                                            ``(aa) Fiscal years 2009 
                                        through 2012.--As of December 31 
                                        of fiscal year 2009, and as of 
                                        December 31 of each succeeding 
                                        fiscal year through fiscal year 
                                        2012, 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 (m) 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 2013.--As of December 31 of 
                                        fiscal year 2013, the portion, 
                                        if any, of the sum of the 
                                        amounts appropriated under 
                                        subsection (a)(16)(A) and under 
                                        section 108 of the Children's 
                                        Health Insurance Reauthorization 
                                        Act of 2009 for the period 
                                        beginning on October 1, 2012, 
                                        and ending on March 31, 2013, 
                                        that is unobligated for 
                                        allotment to a State under 
                                        subsection (m) for such fiscal 
                                        year or set aside under 
                                        subsection (b)(2) of section 
                                        2111 for such fiscal year.
                                            ``(cc) Second half of fiscal 
                                        year 2013.--As of June 30 of 
                                        fiscal year 2013, the portion, 
                                        if any, of the amount 
                                        appropriated under subsection 
                                        (a)(16)(B) for the period 
                                        beginning on April 1, 2013, and 
                                        ending on September 30, 2013, 
                                        that is unobligated for 
                                        allotment to a State under 
                                        subsection (m) 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 2010 through 
                                2013, 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, 2007, and 2008 
                                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 2010 through 2013, 
                                any amount in excess of the aggregate 
                                cap applicable to the Child Enrollment 
                                Contingency Fund for the fiscal year 
                                under section 2104(n).
                                    ``(IV) Unexpended transitional 
                                coverage block grant for nonpregnant 
                                childless adults.--As of October 1, 
                                2011, any amounts set aside under 
                                section 2111(a)(3) that are not expended 
                                by September 30, 2011.
                          ``(iii) Proportional reduction.--If the sum of 
                      the amounts otherwise payable under this paragraph 
                      for

[[Page 123 STAT. 21]]

                      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.--
                          ``(i) In general.--For purposes of this 
                      subsection, subject to clauses (ii) and (iii), the 
                      term `qualifying children' means children who meet 
                      the eligibility criteria (including income, 
                      categorical eligibility, age, and immigration 
                      status criteria) in effect as of July 1, 2008, for 
                      enrollment under title XIX, taking into account 
                      criteria applied as of such date under title XIX 
                      pursuant to a waiver under section 1115.
                          ``(ii) Limitation.--A child described in 
                      clause (i) who is provided medical assistance 
                      during a presumptive eligibility period under 
                      section 1920A shall be considered to be a 
                      `qualifying child' only if the child is determined 
                      to be eligible for medical assistance under title 
                      XIX.
                          ``(iii) Exclusion.--Such term does not include 
                      any children for whom the State has made an 
                      election to provide medical assistance under 
                      paragraph (4) of section 1903(v).
                    ``(G) Application to commonwealths and 
                territories.--The provisions of subparagraph (G) of 
                section 2104(n)(3) shall apply with respect to payment 
                under this paragraph in the same manner as such 
                provisions apply to payment under such section.
                    ``(H)  Application to states that implement a 
                Medicaid expansion for children after fiscal year 
                2008.--In the case of a State that provides coverage 
                under section 115 of the Children's Health Insurance 
                Program Reauthorization Act of 2009 for any fiscal year 
                after fiscal year 2008--
                          ``(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 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 title XIX for the third of such fiscal years 
                      shall be the monthly average unduplicated number 
                      of qualifying children enrolled in the State plan 
                      under title XIX 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 
        5 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

[[Page 123 STAT. 22]]

                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 children 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

[[Page 123 STAT. 23]]

                      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.
                    ``(H) Premium assistance subsidies.--The State is 
                implementing the option of providing premium assistance 
                subsidies under section 2105(c)(10) or section 1906A.''.
SEC. 105. TWO-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 2008, 
                shall remain available for expenditure by the State 
                through the end of the second succeeding fiscal year; 
                and
                    ``(B) for fiscal year 2009 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.

    (a) Beginning With Fiscal Year 2007.--
            (1) In general.--Section 2104(f) (42 U.S.C. 1397dd(f)) is 
        amended--
                    (A) by striking ``The Secretary'' and inserting the 
                following:
            ``(1) In general.--The Secretary'';
                    (B) 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
                    (C) 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

[[Page 123 STAT. 24]]

                      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 (n); 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.-- 
                <<NOTE: Deadline.>> 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.''.
            (2) <<NOTE: 42 USC 1397dd note.>> Effective date.--The 
        amendments made by paragraph (1) shall apply to redistribution 
        of allotments made for fiscal year 2007 and subsequent fiscal 
        years.

    (b) Redistribution of Unused Allotments for Fiscal Year 2006.--
Section 2104(k) (42 U.S.C. 1397dd(k)) is amended--
            (1) in the subsection heading, by striking ``the First 2 
        Quarters of'';
            (2) in paragraph (1), by striking ``the first 2 quarters 
        of''; and
            (3) in paragraph (6)--
                    (A) by striking ``the first 2 quarters of''; and
                    (B) by striking ``March 31'' and inserting 
                ``September 30''.
SEC. 107. OPTION FOR QUALIFYING STATES TO RECEIVE THE ENHANCED 
                        PORTION OF THE CHIP MATCHING RATE FOR 
                        MEDICAID COVERAGE OF CERTAIN CHILDREN.

    (a) In General.--Section 2105(g) (42 U.S.C. 1397ee(g)) is amended--
            (1) in paragraph (1)(A), as amended by section 201(b)(1) of 
        Public Law 110-173--
                    (A) by inserting ``subject to paragraph (4),'' after 
                ``Notwithstanding any other provision of law,''; and
                    (B) by striking ``2008, or 2009'' and inserting ``or 
                2008''; and
            (2) by adding at the end the following new paragraph:
            ``(4) Option for allotments for fiscal years 2009 through 
        2013.--
                    ``(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 2009 through 2013 (insofar as the allotment 
                is available to the State under subsections (e) and (m) 
                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

[[Page 123 STAT. 25]]

                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.''.

    (b) Repeal of Limitation on Availability of Fiscal Year 2009 
Allotments.--Paragraph (2) of section 201(b) of the Medicare, Medicaid, 
and SCHIP Extension Act of 2007 (Public Law 110-173) <<NOTE: 42 USC 
1397ee note.>> is repealed.
SEC. 108. ONE-TIME APPROPRIATION.

    There is appropriated to the Secretary, out of any money in the 
Treasury not otherwise appropriated, $11,706,000,000 to accompany the 
allotment made for the period beginning on October 1, 2012, and ending 
on March 31, 2013, under section 2104(a)(16)(A) of the Social Security 
Act (42 U.S.C. 1397dd(a)(16)(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(m) of the 
Social Security Act (42 U.S.C. 1397dd(i)), as added by section 102, for 
the first 6 months of fiscal year 2013 in the same manner as allotments 
are provided under subsection (a)(16)(A) of such section 2104 and 
subject to the same terms and conditions as apply to the allotments 
provided from such subsection (a)(16)(A).
SEC. 109. IMPROVING FUNDING FOR THE TERRITORIES UNDER CHIP AND 
                        MEDICAID.

    Section 1108(g) (42 U.S.C. 1308(g)) is amended by adding at the end 
the following new paragraph:
            ``(4) Exclusion of certain expenditures from payment 
        limits.--With respect to fiscal years beginning with fiscal year 
        2009, 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.''.

[[Page 123 STAT. 26]]

       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. <<NOTE: 42 USC 1397ll note.>> 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.
    ``(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, 2008; 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 targeted 
        low-income children.--The State provides pregnancy-related 
        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 
        period.--The State does not apply any exclusion of benefits

[[Page 123 STAT. 27]]

        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.

    ``(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 `pregnancy-
        related assistance' has the meaning given the term `child health 
        assistance' in section 2110(a) with respect to an individual 
        during the period described in paragraph (2)(A).
            ``(2) Targeted low-income pregnant woman.--The term 
        `targeted low-income pregnant woman' means an individual--
                    ``(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

[[Page 123 STAT. 28]]

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 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, 2008).
            ``(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.''.

[[Page 123 STAT. 29]]

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. <<NOTE: 42 USC 1397kk.>> 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 2009.--Notwithstanding section 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 2009, 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) <<NOTE: Applicability.>> notwithstanding the 
                terms and conditions of an applicable existing waiver, 
                the provisions of paragraph (2) shall apply for purposes 
                of any period beginning on or after January 1, 2010, 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 existing 
        waivers at the end of 2009.--
                    ``(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 December 31, 2009.
                    ``(B) Extension upon state request.-- 
                <<NOTE: Deadline.>> If an applicable existing waiver 
                described in subparagraph (A) would otherwise expire 
                before January 1, 2010, notwithstanding the requirements 
                of subsections (e) and (f) of section 1115, a State may 
                submit, not later than September 30, 2009, a request to 
                the Secretary for an extension of the waiver. The 
                Secretary shall approve a request for an extension of an 
                applicable existing waiver submitted pursuant to this 
                subparagraph, but only through December 31, 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 nonpregnant childless adult 
                during the period beginning on the date of the enactment 
                of this subsection and ending on December 31, 2009.
            ``(3) State option to apply for medicaid waiver to continue 
        coverage for nonpregnant childless adults.--
                    ``(A) In general.-- <<NOTE: Deadline.>> Each State 
                for which coverage under an applicable existing waiver 
                is terminated under paragraph (2)(A) may submit, not 
                later than September 30,

[[Page 123 STAT. 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 December 31, 2009, on the 
                application of a State for a Medicaid nonpregnant 
                childless adults waiver that was submitted to the 
                Secretary by September 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--
                          ``(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 (2)(B) for fiscal year 2009, increased 
                      by the percentage increase (if any) in the 
                      projected nominal per capita amount of National 
                      Health Expenditures for 2010 over 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 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 period; automatic extension at state option 
        through fiscal year 2011.--
                    ``(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 2009 
                      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 low-income 
                      child; and
                          ``(ii) <<NOTE: Applicability. Effective 
                      date.>> 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, 2011, 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.

[[Page 123 STAT. 31]]

                    ``(B) Extension upon state request.--If an 
                applicable existing waiver described in subparagraph (A) 
                would otherwise expire before October 1, 2011, 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, 2011.
                    ``(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 the third and fourth quarters of fiscal 
                year 2009 and during fiscal years 2010 and 2011.
            ``(2) Rules for fiscal years 2012 through 2013.--
                    ``(A) Payments for coverage limited to block grant 
                funded from state allotment.--Any State that provides 
                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 
                2012 or 2013, 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.-- <<NOTE: Certification. Deadline.>> 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 
                      2013, the set aside for any State shall be 
                      computed separately for each period described in 
                      subparagraphs (A) and (B) of section 2104(a)(16) 
                      and any reduction in the allotment for either such 
                      period under section 2104(m)(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 2012 
                      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 2012 is equal to--
                                    ``(I) the enhanced FMAP determined 
                                under section 2105(b) in the case of a 
                                State that meets

[[Page 123 STAT. 32]]

                                the outreach or coverage benchmarks 
                                described in any of subparagraph (A), 
                                (B), or (C) of paragraph (3) for fiscal 
                                year 2011; 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 
                      2013.--For purposes of clause (ii), the applicable 
                      percentage for any quarter of fiscal year 2013 is 
                      equal to--
                                    ``(I) the REMAP percentage if--
                                            ``(aa) the applicable 
                                        percentage for the State under 
                                        clause (iii) was the enhanced 
                                        FMAP for fiscal year 2012; and
                                            ``(bb) the State met either 
                                        of the coverage benchmarks 
                                        described in subparagraph (B) or 
                                        (C) of paragraph (3) for fiscal 
                                        year 2012; 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 2009.
            ``(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 2011;
                          ``(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

[[Page 123 STAT. 33]]

                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 
        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 2009.
            ``(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 2009 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) <<NOTE: 42 USC 
                1397gg note.>> 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 2009, 
                nothing''.

[[Page 123 STAT. 34]]

    (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 increases 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 2009, the Federal medical assistance 
                percentage

[[Page 123 STAT. 35]]

                (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 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 2009, 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) <<NOTE: 42 USC 1397ee note.>> 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. <<NOTE: 42 USC 1396d note.>> STATE AUTHORITY UNDER 
                        MEDICAID.

    Notwithstanding any other provision of law, including 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, at State option, 
the Secretary shall provide the State with the Federal medical 
assistance percentage determined for the State for Medicaid with respect 
to expenditures described in section 1905(u)(2)(A) of such Act or 
otherwise made to provide medical assistance under Medicaid to a child 
who could be covered by the State under CHIP.

                    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 111, is amended by adding at the end the following:
``SEC. 2113. <<NOTE: 42 USC 1397mm.>> 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 2009 through 2013 to conduct outreach and enrollment

[[Page 123 STAT. 36]]

        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--
                    ``(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--

[[Page 123 STAT. 37]]

            ``(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 Match 
Required for Any Eligible Entity Awarded a Grant.--
            ``(1) State maintenance of effort.--In the case of a State 
        that is awarded a grant under this section, 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.
            ``(2) No matching requirement.--No eligible entity awarded a 
        grant under subsection (a) shall be required to provide any 
        matching funds as a condition for receiving the grant.

    ``(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

[[Page 123 STAT. 38]]

                established under the Richard B. Russell National School 
                Lunch Act, and an elementary or secondary school.
            ``(3) Indians; indian tribe; tribal organization; urban 
        indian 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--
                    ``(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 2009 through 2013, 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.''.

[[Page 123 STAT. 39]]

    (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
                    (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

[[Page 123 STAT. 40]]

        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 
        Organizations, 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

[[Page 123 STAT. 41]]

                (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) or 
                any differences in budget unit, disregard, deeming or 
                other methodology, if the following requirements are 
                met:
                          ``(I) Prohibition on determining children 
                      ineligible 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 
                      requirement.--The State shall satisfy the 
                      requirements under subparagraphs (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)(9), 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

[[Page 123 STAT. 42]]

                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).
                    ``(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.

[[Page 123 STAT. 43]]

                          ``(II) Determination of eligibility.--During 
                      such temporary enrollment period, the State shall 
                      determine the child's eligibility for child health 
                      assistance 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 
                      determination.-- <<NOTE: Procedures.>> 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 in writing, by telephone, orally, 
                through electronic signature, or through any other means 
                specified by the Secretary or by 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

[[Page 123 STAT. 44]]

                      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;
                          
                      ``(II) <<NOTE: Deadline. Statistics.>> 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) <<NOTE: Submission.>> 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

[[Page 123 STAT. 45]]

                except that in applying this paragraph under title XXI, 
                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 and Nutrition Act of 
                                2008 (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.

[[Page 123 STAT. 46]]

                          ``(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) State option to rely on state income tax data or 
        return.--At the option of the State, a finding from an Express 
        Lane agency may include gross income or adjusted gross income 
        shown by State income tax records or returns.
            ``(I) Application.--This paragraph shall not apply with 
        respect to eligibility determinations made after September 30, 
        2013.''.
            (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.--

[[Page 123 STAT. 47]]

            (1) <<NOTE: Grants. Contracts.>> Evaluation.--The Secretary 
        shall conduct, by grant, contract, or interagency agreement, a 
        comprehensive, independent evaluation of the option provided 
        under the amendments made by subsection (a). Such evaluation 
        shall include an analysis of the effectiveness of the option, 
        and shall include--
                    (A) <<NOTE: Statistics.>> 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) <<NOTE: Recommen- dations.>> 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, 2012, 
        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 
                2009 through 2012.
                    (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.--

[[Page 123 STAT. 48]]

            (1) In general.--Title XIX is amended by adding at the end 
        the following new section:
``SEC. 1942. <<NOTE: 42 USC 1396w-2 note.>> 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. <<NOTE: Applicability.>> 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

[[Page 123 STAT. 49]]

        be 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 1942 (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) <<NOTE: 42 USC 1396w-2 note.>> Authorization for States Electing 
Express Lane Option To Receive Certain Data Directly Relevant To 
Determining Eligibility and Correct Amount of Assistance.-- 
<<NOTE: Contracts.>> 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.-- <<NOTE: 42 USC 1396a note.>> The amendments 
made by this section are effective on the date of the enactment of this 
Act.

               Subtitle B--Reducing Barriers to Enrollment

SEC. 211. VERIFICATION OF DECLARATION OF CITIZENSHIP OR 
                        NATIONALITY FOR PURPOSES OF ELIGIBILITY 
                        FOR MEDICAID AND CHIP.

    (a) Alternative State Process for Verification of Declaration of 
Citizenship or Nationality for Purposes of Eligibility for Medicaid.--
            (1) Alternative to documentation requirement.--
                    (A) In general.--Section 1902 (42 U.S.C. 1396a), as 
                amended by section 203(c), is amended--
                          (i) in subsection (a)(46)--

[[Page 123 STAT. 50]]

                                    (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) <<NOTE: Submission.>> 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, or the 
        declaration of citizenship or nationality, of the individual is 
        inconsistent with information in the records maintained by the 
        Commissioner--
                    ``(i) the State makes a reasonable effort to 
                identify and address the causes of such inconsistency, 
                including through typographical or other clerical 
                errors, by contacting the individual to confirm the 
                accuracy of the name or social security number submitted 
                or declaration of citizenship or nationality 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 such inconsistency is not 
                resolved under clause (i), the State--
                          ``(I) <<NOTE: Notification.>> notifies the 
                      individual of such fact;
                          ``(II) <<NOTE: Time period.>> 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 resolve the inconsistency with the Commissioner 
                      of Social Security (and continues to provide the 
                      individual with medical assistance during such 90-
                      day period); and
                          ``(III) <<NOTE: Deadline.>> 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 inconsistency is not resolved.

    ``(2)(A) <<NOTE: Submission. Deadline.>> 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 
at least monthly to the Commissioner of Social Security for comparison 
of the name

[[Page 123 STAT. 51]]

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) and who declares to be a United States citizen or national, 
with information in records maintained by the Commissioner.

    ``(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, through an on-line system or otherwise, 
        for the electronic submission of, and response to, the 
        information submitted under subparagraph (A) for an individual 
        enrolled in the State plan under this title who declares to be 
        citizen or national on at least a monthly basis; or
            ``(ii) to provide for a determination of the consistency of 
        the information submitted with the information maintained in the 
        records of the Commissioner 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).

    ``(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 
inconsistent submissions bears to the total submissions made for 
comparison for such month. For purposes of this subparagraph, a name, 
social security number, or declaration of citizenship or nationality of 
an individual shall be treated as inconsistent and included in the 
determination of such percentage only if--
            ``(i) the information submitted by the individual is not 
        consistent with information in records maintained by the 
        Commissioner of Social Security;
            ``(ii) the inconsistency is not resolved by the State;
            ``(iii) the individual was provided with a reasonable period 
        of time to resolve the inconsistency with the Commissioner of 
        Social Security or provide satisfactory documentation of 
        citizenship status 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--
            ``(i) <<NOTE: Plan. Procedures.>> 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

[[Page 123 STAT. 52]]

        State plan for the fiscal year for providing medical assistance 
        to individuals who provided inconsistent information as the 
        number of individuals with inconsistent information in excess of 
        3 percent of such total submitted bears to the total number of 
        individuals with inconsistent information.

    ``(C) <<NOTE: Waiver authority.>> 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) Subparagraphs (A) and (B) 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 that provides for the 
submission on a real-time basis of the information described in such 
paragraph.
    ``(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 system.--
                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) <<NOTE: 42 USC 1396a note.>> 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)''.
            (4) Appropriation.--Out of any money in the Treasury of the 
        United States not otherwise appropriated, there are appropriated 
        to the Commissioner of Social Security $5,000,000 to remain 
        available until expended to carry out the Commissioner's 
        responsibilities under section 1902(ee) of the Social Security 
        Act, as added by subsection (a).

    (b) Clarification of Requirements Relating to Presentation 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--
                    (A) by redesignating clause (v) as clause (vi); and

[[Page 123 STAT. 53]]

                    (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) <<NOTE: Regulations.>> 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 child born in the United 
States to an alien mother for whom medical assistance for the delivery 
of such child is available as treatment

[[Page 123 STAT. 54]]

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 section 114(a), is amended by adding at the end the 
        following new paragraph:
            ``(9) 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) <<NOTE: 42 USC 1396a note.>> Effective Date.--
            (1) In general.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the amendments made by this section shall take 
                effect on January 1, 2010.

[[Page 123 STAT. 55]]

                    (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.-- <<NOTE: Time period.>> In 
        the case of an individual who, during the period that began on 
        July 1, 2006, and ends on October 1, 2009, 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.-- <<NOTE: Time 
        period.>> 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) <<NOTE: Plan. Procedures.>> 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 
                person.--A State shall be deemed to comply with 
                subparagraph (A) if the State's application and renewal

[[Page 123 STAT. 56]]

                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. <<NOTE: 42 USC 1396 note.>> MODEL OF INTERSTATE 
                        COORDINATED ENROLLMENT AND COVERAGE 
                        PROCESS.

    (a) In General.-- <<NOTE: Deadline.>> 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).
SEC. 214. PERMITTING STATES TO ENSURE COVERAGE WITHOUT A 5-YEAR 
                        DELAY OF CERTAIN CHILDREN AND PREGNANT 
                        WOMEN UNDER THE MEDICAID PROGRAM AND CHIP.

    (a) Medicaid Program.--Section 1903(v) (42 U.S.C. 1396b(v)) is 
amended--
            (1) in paragraph (1), by striking ``paragraph (2)'' and 
        inserting ``paragraphs (2) and (4)''; and
            (2) by adding at the end the following new paragraph:

    ``(4)(A) A State may elect (in a plan amendment under this title) to 
provide medical assistance under this title, notwithstanding sections 
401(a), 402(b), 403, and 421 of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996, to children and pregnant women 
who are lawfully residing in the United States (including battered 
individuals described in section 431(c) of such Act) and who are 
otherwise eligible for such assistance, within either or both of the 
following eligibility categories:
            ``(i) Pregnant women.--Women during pregnancy (and during 
        the 60-day period beginning on the last day of the pregnancy).
            ``(ii) Children.--Individuals under 21 years of age, 
        including optional targeted low-income children described in 
        section 1905(u)(2)(B).

    ``(B) In the case of a State that has elected to provide medical 
assistance to a category of aliens under subparagraph (A), no debt shall 
accrue under an affidavit of support against any sponsor of such an 
alien on the basis of provision of assistance to such category and the 
cost of such assistance shall not be considered as an unreimbursed cost.

[[Page 123 STAT. 57]]

    ``(C) <<NOTE: Verification.>> As part of the State's ongoing 
eligibility redetermination requirements and procedures for an 
individual provided medical assistance as a result of an election by the 
State under subparagraph (A), a State shall verify that the individual 
continues to lawfully reside in the United States using the 
documentation presented to the State by the individual on initial 
enrollment. If the State cannot successfully verify that the individual 
is lawfully residing in the United States in this manner, it shall 
require that the individual provide the State with further documentation 
or other evidence to verify that the individual is lawfully residing in 
the United States.''.

    (b) CHIP.--Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)), as amended 
by sections 203(a)(2) and 203(d)(2), is amended by redesignating 
subparagraphs (E) and (F) as subparagraphs (F) and (G), respectively and 
by inserting after subparagraph (D) the following new subparagraph:
                    ``(E) Paragraph (4) of section 1903(v) (relating to 
                optional coverage of categories of lawfully residing 
                immigrant children or pregnant women), but only if the 
                State has elected to apply such paragraph with respect 
                to such category of children or pregnant women under 
                title XIX.''.

      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) and 211(c), is amended by adding at 
        the end the following:
            ``(10) 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 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--

[[Page 123 STAT. 58]]

                                    ``(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 contribution 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

[[Page 123 STAT. 59]]

                      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.-- 
                <<NOTE: Procedures.>> 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 enrollment 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 employer-sponsored 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

[[Page 123 STAT. 60]]

                          ``(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 2009.
                    ``(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 employer-sponsored coverage;
                          ``(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) <<NOTE: Procedures.>> 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.

[[Page 123 STAT. 61]]

                    ``(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).
                    ``(N) <<NOTE: Applicability.>> Coordination with 
                medicaid.--In the case of a targeted low-income child 
                who receives child health assistance through a State 
                plan under title XIX and who voluntarily elects to 
                receive a premium assistance subsidy under this section, 
                the provisions of section 1906A shall apply and shall 
                supersede any other provisions of this paragraph that 
                are inconsistent with such section.''.
            (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) <<NOTE: 42 USC 1397ee note.>> 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:

                ``premium assistance option for children

    ``Sec. 1906A. <<NOTE: 42 USC 1396e-1.>> (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

[[Page 123 STAT. 62]]

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 
        condition 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 
        employer-sponsored coverage under this section.
            ``(3) Opt-out permitted for any month.-- 
        <<NOTE: Procedures.>> A State shall establish a process for 
        permitting the parent of an individual under age 19 receiving a 
        premium assistance subsidy to

[[Page 123 STAT. 63]]

        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 employer-sponsored 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, 2010, 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, Education, and 
Enrollment Efforts Related to Premium Assistance 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 paragraph (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 211(c)(2), is amended by adding at the end the 
following new clause:
                          ``(iii) 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 paragraph 
                      (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

[[Page 123 STAT. 64]]

                      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 <<NOTE: 26 USC 9801.>> (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) <<NOTE: Deadlines.>> 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.
                    ``(B) Employee outreach and disclosure.--
                          ``(i) Outreach to employees regarding 
                      availability of medicaid and chip coverage.--
                                    ``(I) In general.-- 
                                <<NOTE: Notification.>> 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

[[Page 123 STAT. 65]]

                                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 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 (29 U.S.C. 1024).
                          ``(ii) Disclosure about group health plan 
                      benefits to states for medicaid and chip eligible 
                      individuals.--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 2009, 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.''.

    (b) Conforming Amendments.--
            (1) Amendments to employee retirement income security 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:

[[Page 123 STAT. 66]]

            ``(3) Special rules for application in case of medicaid and 
        chip.--
                    ``(A) <<NOTE: Deadlines.>> 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.-- 
                                <<NOTE: Notification.>> 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.
                                    ``(II) Model notice.-- 
                                <<NOTE: Deadline.>> Not later than 1 
                                year after the date of enactment of the 
                                Children's Health Insurance Program 
                                Reauthorization Act of 2009, 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

[[Page 123 STAT. 67]]

                                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 
                      benefits to states for medicaid and chip eligible 
                      individuals.--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 2009, 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.''.
                    (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''.

[[Page 123 STAT. 68]]

                    (C) <<NOTE: 29 USC 1181 note.>> Working group to 
                develop model coverage coordination disclosure form.--
                          (i) Medicaid, chip, and employer-sponsored 
                      coverage coordination working group.--
                                    (I) In general.-- 
                                <<NOTE: Deadline. Establishment.>> 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 
                                disclosure 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.
                                            (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;

[[Page 123 STAT. 69]]

                                    (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 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.-- 
                <<NOTE: Notification. Deadline. 29 USC 1181 note.>> 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. <<NOTE: Applicability.>> The model coverage 
                coordination disclosure form developed under 
                subparagraph (C) shall apply with respect to requests 
                made by States beginning with the

[[Page 123 STAT. 70]]

                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 
employer 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) <<NOTE: Deadlines.>> 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.

[[Page 123 STAT. 71]]

                    ``(B) Coordination with medicaid and chip.--
                          ``(i) Outreach to employees regarding 
                      availability of medicaid and chip coverage.--
                                    ``(I) In general.-- 
                                <<NOTE: Notification.>> 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 
                      individuals.--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 2009, 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

[[Page 123 STAT. 72]]

                      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. <<NOTE: 42 USC 13206-9a.>> 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.-- <<NOTE: Deadline. Publication.>> Not 
        later than January 1, 2010, 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) <<NOTE: Publication.>> 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:
                    ``(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

[[Page 123 STAT. 73]]

                care quality and racial, ethnic, and socioeconomic 
                disparities in child health and health care for 
                children.
            ``(4) Encourage voluntary and standardized reporting.-- 
        <<NOTE: Procedures.>> Not later than 2 years after the date of 
        enactment of the Children's Health Insurance Program 
        Reauthorization Act of 2009, 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, 2011, 
        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 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--

[[Page 123 STAT. 74]]

                    ``(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.-- 
        <<NOTE: Deadline.>> Not later than January 1, 2011, 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;
                    ``(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;

[[Page 123 STAT. 75]]

                    ``(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.-- <<NOTE: Deadlines. Publication.>> Beginning no later 
        than January 1, 2013, and annually thereafter, the Secretary 
        shall publish recommended 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--

[[Page 123 STAT. 76]]

                    ``(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.-- <<NOTE: Deadlines.>> Not later than 
        September 30, 2010, 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.-- <<NOTE: Time period. Grants.>> During 
        the period of fiscal years 2009 through 2013, 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 conditions 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.

[[Page 123 STAT. 77]]

    ``(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.
                    ``(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--

[[Page 123 STAT. 78]]

                                    ``(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;
                          ``(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--

[[Page 123 STAT. 79]]

                    ``(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;
                          ``(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) <<NOTE: Deadlines.>> 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 2009, 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.-- 
                <<NOTE: Grants.>> Not later than 2 years after the date 
                of enactment of the Children's Health Insurance Program 
                Reauthorization Act of 2009, the Secretary shall award 1 
                grant that is specifically designed

[[Page 123 STAT. 80]]

                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;
                          ``(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 2009 through 2013.

[[Page 123 STAT. 81]]

    ``(f) Development of Model Electronic Health Record Format for 
Children Enrolled in Medicaid or CHIP.--
            ``(1) In general.-- <<NOTE: Deadline.>> Not later than 
        January 1, 2010, 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.-- <<NOTE: Deadline. Reports.>> Not later 
        than July 1, 2010, the Institute of Medicine shall study and 
        report to Congress on the extent 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

[[Page 123 STAT. 82]]

                    ``(D) <<NOTE: Recommen- dations.>> 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 2009 
through 2013, $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 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.

[[Page 123 STAT. 83]]

            ``(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) <<NOTE: 42 USC 1397hh note.>> Standardized Reporting Format.--
            (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 2009 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

[[Page 123 STAT. 84]]

        to report such information in a complete and expeditious manner) 
        so that, beginning no later than October 1, 2009, 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 Speciality 
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 Representatives 
        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 <<NOTE: 42 
USC 1397cc.>> (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) <<NOTE: 42 USC 1397cc note.>> Effective Date.--The amendment 
made by subsection (a) shall apply to contract years for health plans 
beginning on or after July 1, 2009.

                  TITLE V--IMPROVING ACCESS TO BENEFITS

SEC. 501. DENTAL BENEFITS.

    (a) Coverage.--

[[Page 123 STAT. 85]]

            (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 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 
                      coverage.--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) <<NOTE: 42 USC 1397bb note.>> Effective date.--The 
        amendments made by paragraphs (1) and (2) shall apply to 
        coverage of items and services furnished on or after October 1, 
        2009.

    (b) State Option To Provide Dental-Only Supplemental Coverage.--
            (1) In general.--Section 2110(b) (42 U.S.C. 1397jj(b)) is 
        amended--
                    (A) in paragraph (1)(C), by inserting ``, subject to 
                paragraph (5),'' after ``under title XIX or''; and
                    (B) by adding at the end the following new 
                paragraph:

[[Page 123 STAT. 86]]

            ``(5) Option for states with a separate chip program to 
        provide dental-only supplemental coverage.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), in the case of any child who is enrolled in a group 
                health plan or health insurance coverage offered through 
                an employer who would, but for the application of 
                paragraph (1)(C), satisfy the requirements for being a 
                targeted low-income child under a State child health 
                plan that is implemented under this title, a State may 
                waive the application of such paragraph to the child in 
                order to provide--
                          ``(i) dental coverage consistent with the 
                      requirements of subsection (c)(5) of section 2103; 
                      or
                          ``(ii) cost-sharing protection for dental 
                      coverage consistent with such requirements and the 
                      requirements of subsection (e)(3)(B) of such 
                      section.
                    ``(B) Limitation.--A State may limit the application 
                of a waiver of paragraph (1)(C) to children whose family 
                income does not exceed a level specified by the State, 
                so long as the level so specified does not exceed the 
                maximum income level otherwise established for other 
                children under the State child health plan.
                    ``(C) Conditions.--A State may not offer dental-only 
                supplemental coverage under this paragraph unless the 
                State satisfies the following conditions:
                          ``(i) Income eligibility.--The State child 
                      health plan under this title--
                                    ``(I) has the highest income 
                                eligibility standard permitted under 
                                this title (or a waiver) as of January 
                                1, 2009;
                                    ``(II) does not limit the acceptance 
                                of applications for children or impose 
                                any numerical limitation, waiting list, 
                                or similar limitation on the eligibility 
                                of such children for child health 
                                assistance under such State plan; and
                                    ``(III) provides benefits to all 
                                children in the State who apply for and 
                                meet eligibility standards.
                          ``(ii) No more favorable treatment.--The State 
                      child health plan may not provide more favorable 
                      dental coverage or cost-sharing protection for 
                      dental coverage to children provided dental-only 
                      supplemental coverage under this paragraph than 
                      the dental coverage and cost-sharing protection 
                      for dental coverage provided to targeted low-
                      income children who are eligible for the full 
                      range of child health assistance provided under 
                      the State child health plan.''.
            (2) State option to waive waiting period.--Section 
        2102(b)(1)(B) (42 U.S.C. 1397bb(b)(1)(B)), as amended by section 
        111(b)(2), is amended--
                    (A) in clause (ii), by striking ``and'' at the end;
                    (B) in clause (iii), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following new clause:
                          ``(iv) at State option, may not apply a 
                      waiting period in the case of a child provided 
                      dental-only supplemental coverage under section 
                      2110(b)(5).''.

[[Page 123 STAT. 87]]

    (c) <<NOTE: 42 USC 247d-9.>> 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.

    (d) 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 
                (70);
                    (B) by striking the period at the end of paragraph 
                (71) and inserting ``; and''; and
                    (C) by inserting after paragraph (71) the following 
                new paragraph:
            ``(72) provide that the State will not prevent a Federally-
        qualified 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) <<NOTE: 42 USC 1397gg 
        note.>> (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)(72) (relating to limiting FQHC 
                contracting for provision of dental services).''.
            (3) <<NOTE: 42 USC 1396a note.>> Effective date.--The 
        amendments made by this subsection shall take effect on January 
        1, 2009.

    (e) 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 
        children 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

[[Page 123 STAT. 88]]

        such plans under this title shall provide for the reporting of 
        such information by such plans to the State.''.
            (3) <<NOTE: 42 USC 1396a note.>> Effective date.--The 
        amendments made by this subsection shall be effective for annual 
        reports submitted for years beginning after date of enactment.

    (f) <<NOTE: Deadlines. 42 USC 1396 note.>> 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.

    (g) 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 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,''.

    (h) 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

[[Page 123 STAT. 89]]

        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 use disorder 
                benefits, such plan shall ensure that the financial 
                requirements and treatment limitations applicable to 
                such mental health or substance use disorder benefits 
                comply with the requirements of section 2705(a) of the 
                Public Health Service Act in the same manner as such 
                requirements apply to a group health 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 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) <<NOTE: 42 USC 1397gg note.>> Effective date.--The 
        amendment made by paragraph (1) shall apply to services provided 
        on or after October 1, 2009.

    (b) Transition Grants.--
            (1) Appropriation.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated to the Secretary 
        for fiscal year 2009, $5,000,000, to remain available

[[Page 123 STAT. 90]]

        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, 2011, 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
                          ``(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) <<NOTE: 42 USC 1397cc note.>> Effective Date.--The amendment 
made by subsection (a) shall apply to new coverage periods beginning on 
or after the date of the enactment of this Act.
SEC. 505. CLARIFICATION OF COVERAGE OF SERVICES PROVIDED THROUGH 
                        SCHOOL-BASED HEALTH CENTERS.

    (a) In General.--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 (as 
        defined in section 2110(c)(9)).''.

    (b) Definition.--Section 2110(c) (42 U.S.C. 1397jj) is amended by 
adding at the end the following:

[[Page 123 STAT. 91]]

            ``(9) School-based health center.--
                    ``(A) In general.--The term `school-based health 
                center' means a health clinic that--
                          ``(i) is located in or near a school facility 
                      of a school district or board or of an Indian 
                      tribe or tribal organization;
                          ``(ii) is organized through school, community, 
                      and health provider relationships;
                          ``(iii) is administered by a sponsoring 
                      facility;
                          ``(iv) provides through health professionals 
                      primary health services to children in accordance 
                      with State and local law, including laws relating 
                      to licensure and certification; and
                          ``(v) satisfies such other requirements as a 
                      State may establish for the operation of such a 
                      clinic.
                    ``(B) Sponsoring facility.--For purposes of 
                subparagraph (A)(iii), the term `sponsoring facility' 
                includes any of the following:
                          ``(i) A hospital.
                          ``(ii) A public health department.
                          ``(iii) A community health center.
                          ``(iv) A nonprofit health care agency.
                          ``(v) A school or school system.
                          ``(vi) A program administered by the Indian 
                      Health Service or the Bureau of Indian Affairs or 
                      operated by an Indian tribe or a tribal 
                      organization.''.
SEC. 506. MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION.

    (a) In General.--Title XIX (42 U.S.C. 1396 et seq.) is amended by 
inserting before section 1901 the following new section:

            ``medicaid and chip payment and access commission

    ``Sec. 1900. <<NOTE: 42 USC 1396.>> (a) Establishment.--There is 
hereby established the Medicaid and CHIP Payment and Access Commission 
(in this section referred to as `MACPAC').

    ``(b) Duties.--
            ``(1) Review of access policies and annual reports.--MACPAC 
        shall--
                    ``(A) review policies of the Medicaid program 
                established under this title (in this section referred 
                to as `Medicaid') and the State Children's Health 
                Insurance Program established under title XXI (in this 
                section referred to as `CHIP') affecting children's 
                access to covered items and services, including topics 
                described in paragraph (2);
                    ``(B) make recommendations to Congress concerning 
                such access policies;
                    ``(C) by not later than March 1 of each year 
                (beginning with 2010), submit a report to Congress 
                containing the results of such reviews and MACPAC's 
                recommendations concerning such policies; and
                    ``(D) by not later than June 1 of each year 
                (beginning with 2010), submit a report to Congress 
                containing an examination of issues affecting Medicaid 
                and CHIP, including the implications of changes in 
                health care delivery in the United States and in the 
                market for health care services on such programs.

[[Page 123 STAT. 92]]

            ``(2) Specific topics to be reviewed.--Specifically, MACPAC 
        shall review and assess the following:
                    ``(A) Medicaid and chip payment policies.--Payment 
                policies under Medicaid and CHIP, including--
                          ``(i) the factors affecting expenditures for 
                      items and services in different sectors, including 
                      the process for updating hospital, skilled nursing 
                      facility, physician, Federally-qualified health 
                      center, rural health center, and other fees;
                          ``(ii) payment methodologies; and
                          ``(iii) the relationship of such factors and 
                      methodologies to access and quality of care for 
                      Medicaid and CHIP beneficiaries.
                    ``(B) Interaction of medicaid and chip payment 
                policies with health care delivery generally.--The 
                effect of Medicaid and CHIP payment policies on access 
                to items and services for children and other Medicaid 
                and CHIP populations other than under this title or 
                title XXI and the implications of changes in health care 
                delivery in the United States and in the general market 
                for health care items and services on Medicaid and CHIP.
                    ``(C) Other access policies.--The effect of other 
                Medicaid and CHIP policies on access to covered items 
                and services, including policies relating to 
                transportation and language barriers.
            ``(3) Creation of early-warning system.--MACPAC shall create 
        an early-warning system to identify provider shortage areas or 
        any other problems that threaten access to care or the health 
        care status of Medicaid and CHIP beneficiaries.
            ``(4) Comments on certain secretarial reports.--If the 
        Secretary submits to Congress (or a committee of Congress) a 
        report that is required by law and that relates to access 
        policies, including with respect to payment policies, under 
        Medicaid or CHIP, the Secretary shall transmit a copy of the 
        report to MACPAC. MACPAC shall review the report and, not later 
        than 6 months after the date of submittal of the Secretary's 
        report to Congress, shall submit to the appropriate committees 
        of Congress written comments on such report. Such comments may 
        include such recommendations as MACPAC deems appropriate.
            ``(5) Agenda and additional reviews.--MACPAC shall consult 
        periodically with the chairmen and ranking minority members of 
        the appropriate committees of Congress regarding MACPAC's agenda 
        and progress towards achieving the agenda. MACPAC may conduct 
        additional reviews, and submit additional reports to the 
        appropriate committees of Congress, from time to time on such 
        topics relating to the program under this title or title XXI as 
        may be requested by such chairmen and members and as MACPAC 
        deems appropriate.
            ``(6) Availability of reports.--MACPAC shall transmit to the 
        Secretary a copy of each report submitted under this subsection 
        and shall make such reports available to the public.
            ``(7) Appropriate committee of congress.--For purposes of 
        this section, the term `appropriate committees of Congress' 
        means the Committee on Energy and Commerce of the House of 
        Representatives and the Committee on Finance of the Senate.

[[Page 123 STAT. 93]]

            ``(8) Voting and reporting requirements.--With respect to 
        each recommendation contained in a report submitted under 
        paragraph (1), each member of MACPAC shall vote on the 
        recommendation, and MACPAC shall include, by member, the results 
        of that vote in the report containing the recommendation.
            ``(9) Examination of budget consequences.--Before making any 
        recommendations, MACPAC shall examine the budget consequences of 
        such recommendations, directly or through consultation with 
        appropriate expert entities.

    ``(c) Membership.--
            ``(1) Number and appointment.--MACPAC shall be composed of 
        17 members appointed by the Comptroller General of the United 
        States.
            ``(2) Qualifications.--
                    ``(A) In general.--The membership of MACPAC shall 
                include individuals who have had direct experience as 
                enrollees or parents of enrollees in Medicaid or CHIP 
                and individuals with national recognition for their 
                expertise in Federal safety net health programs, health 
                finance and economics, actuarial science, health 
                facility management, health plans and integrated 
                delivery systems, reimbursement of health facilities, 
                health information technology, pediatric physicians, 
                dentists, and other providers of health services, and 
                other related fields, who provide a mix of different 
                professionals, broad geographic representation, and a 
                balance between urban and rural representatives.
                    ``(B) Inclusion.--The membership of MACPAC shall 
                include (but not be limited to) physicians and other 
                health professionals, employers, third-party payers, and 
                individuals with expertise in the delivery of health 
                services. Such membership shall also include consumers 
                representing children, pregnant women, the elderly, and 
                individuals with disabilities, current or former 
                representatives of State agencies responsible for 
                administering Medicaid, and current or former 
                representatives of State agencies responsible for 
                administering CHIP.
                    ``(C) Majority nonproviders.--Individuals who are 
                directly involved in the provision, or management of the 
                delivery, of items and services covered under Medicaid 
                or CHIP shall not constitute a majority of the 
                membership of MACPAC.
                    ``(D) Ethical disclosure.--The Comptroller General 
                of the United States shall establish a system for public 
                disclosure by members of MACPAC of financial and other 
                potential conflicts of interest relating to such 
                members. Members of MACPAC shall be treated as employees 
                of Congress for purposes of applying title I of the 
                Ethics in Government Act of 1978 (Public Law 95-521).
            ``(3) Terms.--
                    ``(A) In general.--The terms of members of MACPAC 
                shall be for 3 years except that the Comptroller General 
                of the United States shall designate staggered terms for 
                the members first appointed.
                    ``(B) Vacancies.--Any member appointed to fill a 
                vacancy occurring before the expiration of the term for 
                which the member's predecessor was appointed shall be

[[Page 123 STAT. 94]]

                appointed only for the remainder of that term. A member 
                may serve after the expiration of that member's term 
                until a successor has taken office. A vacancy in MACPAC 
                shall be filled in the manner in which the original 
                appointment was made.
            ``(4) Compensation.--While serving on the business of MACPAC 
        (including travel time), a member of MACPAC shall be entitled to 
        compensation at the per diem equivalent of the rate provided for 
        level IV of the Executive Schedule under section 5315 of title 
        5, United States Code; and while so serving away from home and 
        the member's regular place of business, a member may be allowed 
        travel expenses, as authorized by the Chairman of MACPAC. 
        Physicians serving as personnel of MACPAC may be provided a 
        physician comparability allowance by MACPAC in the same manner 
        as Government physicians may be provided such an allowance by an 
        agency under section 5948 of title 5, United States Code, and 
        for such purpose subsection (i) of such section shall apply to 
        MACPAC in the same manner as it applies to the Tennessee Valley 
        Authority. For purposes of pay (other than pay of members of 
        MACPAC) and employment benefits, rights, and privileges, all 
        personnel of MACPAC shall be treated as if they were employees 
        of the United States Senate.
            ``(5) Chairman; vice chairman.--The Comptroller General of 
        the United States shall designate a member of MACPAC, at the 
        time of appointment of the member as Chairman and a member as 
        Vice Chairman for that term of appointment, except that in the 
        case of vacancy of the Chairmanship or Vice Chairmanship, the 
        Comptroller General of the United States may designate another 
        member for the remainder of that member's term.
            ``(6) Meetings.--MACPAC shall meet at the call of the 
        Chairman.

    ``(d) Director and Staff; Experts and Consultants.--Subject to such 
review as the Comptroller General of the United States deems necessary 
to assure the efficient administration of MACPAC, MACPAC may--
            ``(1) employ and fix the compensation of an Executive 
        Director (subject to the approval of the Comptroller General of 
        the United States) and such other personnel as may be necessary 
        to carry out its duties (without regard to the provisions of 
        title 5, United States Code, governing appointments in the 
        competitive service);
            ``(2) seek such assistance and support as may be required in 
        the performance of its duties from appropriate Federal 
        departments and agencies;
            ``(3) enter into contracts or make other arrangements, as 
        may be necessary for the conduct of the work of MACPAC (without 
        regard to section 3709 of the Revised Statutes (41 U.S.C. 5));
            ``(4) make advance, progress, and other payments which 
        relate to the work of MACPAC;
            ``(5) provide transportation and subsistence for persons 
        serving without compensation; and
            ``(6) prescribe such rules and regulations as it deems 
        necessary with respect to the internal organization and 
        operation of MACPAC.

[[Page 123 STAT. 95]]

    ``(e) Powers.--
            ``(1) Obtaining official data.--MACPAC may secure directly 
        from any department or agency of the United States information 
        necessary to enable it to carry out this section. Upon request 
        of the Chairman, the head of that department or agency shall 
        furnish that information to MACPAC on an agreed upon schedule.
            ``(2) Data collection.--In order to carry out its functions, 
        MACPAC shall--
                    ``(A) utilize existing information, both published 
                and unpublished, where possible, collected and assessed 
                either by its own staff or under other arrangements made 
                in accordance with this section;
                    ``(B) carry out, or award grants or contracts for, 
                original research and experimentation, where existing 
                information is inadequate; and
                    ``(C) adopt procedures allowing any interested party 
                to submit information for MACPAC's use in making reports 
                and recommendations.
            ``(3) Access of gao to information.--The Comptroller General 
        of the United States shall have unrestricted access to all 
        deliberations, records, and nonproprietary data of MACPAC, 
        immediately upon request.
            ``(4) Periodic audit.--MACPAC shall be subject to periodic 
        audit by the Comptroller General of the United States.

    ``(f) Authorization of Appropriations.--
            ``(1) Request for appropriations.--MACPAC shall submit 
        requests for appropriations in the same manner as the 
        Comptroller General of the United States submits requests for 
        appropriations, but amounts appropriated for MACPAC shall be 
        separate from amounts appropriated for the Comptroller General 
        of the United States.
            ``(2) Authorization.--There are authorized to be 
        appropriated such sums as may be necessary to carry out the 
        provisions of this section.''.

    (b) <<NOTE: 42 USC 1396 note.>> Deadline for Initial Appointments.--
Not later than January 1, 2010, the Comptroller General of the United 
States shall appoint the initial members of the Medicaid and CHIP 
Payment and Access Commission established under section 1900 of the 
Social Security Act (as added by subsection (a)).

    (c) <<NOTE: 42 USC 1396 note.>> Annual Report on Medicaid.--Not 
later than January 1, 2010, and annually thereafter, the Secretary, in 
consultation with the Secretary of the Treasury, the Secretary of Labor, 
and the States (as defined for purposes of Medicaid), shall submit an 
annual report to Congress on the financial status of, enrollment in, and 
spending trends for, Medicaid for the fiscal year ending on September 30 
of the preceding year.

[[Page 123 STAT. 96]]

     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:
            ``(11) 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) <<NOTE: 42 USC 1397ee note.>> 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 
new final rule (in this section referred to as the ``new final rule'') 
promulgated after the date of the enactment of this Act and 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 new final rule in effect for all 
States may only be inclusive of errors, as defined in such new final 
rule or in guidance issued within a reasonable time frame after the 
effective date for such new final rule that includes detailed guidance 
for the specific methodology for error determinations.

    (c) Requirements for New Final Rule.--For purposes of subsection 
(b), the requirements of this subsection are that the new final rule 
implementing the PERM requirements shall--
            (1) include--

[[Page 123 STAT. 97]]

                    (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 
        self-certification 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 Application 
Cycle Under the Interim Final Rule.--After the new 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 or under a final rule for fiscal year 2008 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 or fiscal year 2011 
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 new 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, 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

[[Page 123 STAT. 98]]

        MEQC reviews are based on 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 the first fiscal year that begins on or 
after the date on which the new final rule is in effect for all States, 
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.

    (g) Time for Promulgation of Final Rule.--The final rule 
implementing the PERM requirements under subsection (b) shall be 
promulgated not later than 6 months after the date of enactment of this 
Act.
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 2009''.
    (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 2009, 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(m)(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).

[[Page 123 STAT. 99]]

                    ``(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.
            ``(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) <<NOTE: Contracts.>> 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) <<NOTE: Applicability.>> 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, 2011, 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 2010 for the 
                purpose of conducting the evaluation authorized under 
                this paragraph. Amounts appropriated under this 
                subparagraph shall remain available for expenditure 
                through fiscal year 2012.''.
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

[[Page 123 STAT. 100]]

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 subdivisions thereof, or any 
grantee or contractor of such States or political subdivisions.''.
SEC. 605. <<NOTE: 42 USC 1396 note.>> NO FEDERAL FUNDING FOR 
                        ILLEGAL ALIENS; DISALLOWANCE FOR 
                        UNAUTHORIZED EXPENDITURES.

    Nothing in this Act allows Federal payment for individuals who are 
not legal residents. Titles XI, XIX, and XXI of the Social Security Act 
provide for the disallowance of Federal financial participation for 
erroneous expenditures under Medicaid and under CHIP, respectively.

               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 ``<SUP>wrap-
                around</SUP>'' and inserting ``<SUP>additional</SUP>''; 
                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

[[Page 123 STAT. 101]]

                      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
                          ``(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) <<NOTE: Web site. Federal Register, 
publication. Deadline.>> 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) <<NOTE: 42 USC 1396u-7 note.>> 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) <<NOTE: 42 USC 1397aa note.>> is repealed.
SEC. 613. <<NOTE: 42 USC 1396u-8 note.>> 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. <<NOTE: 42 USC 1396d note.>> 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

[[Page 123 STAT. 102]]

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, 2009, 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 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. 615. <<NOTE: 42 USC 1396b note.>> 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;

[[Page 123 STAT. 103]]

            (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. 616. EXTENSION OF MEDICAID DSH ALLOTMENTS FOR TENNESSEE AND 
                        HAWAII.

    Section 1923(f)(6) (42 U.S.C. 1396r-4(f)(6)), as amended by section 
202 of the Medicare Improvements for Patients and Providers Act of 2008 
(Public Law 110-275) is amended--
            (1) in the paragraph heading, by striking ``2009 and the 
        first calendar quarter of fiscal year 2010'' and inserting 
        ``2011 and the first calendar quarter of fiscal year 2012'';
            (2) in subparagraph (A)--
                    (A) in clause (i)--
                          (i) in the second sentence--
                                    (I) by striking ``and 2009'' and 
                                inserting ``, 2009, 2010, and 2011''; 
                                and
                                    (II) by striking ``such portion 
                                of''; and
                          (ii) in the third sentence, by striking ``2010 
                      for the period ending on December 31, 2009'' and 
                      inserting ``2012 for the period ending on December 
                      31, 2011'';
                    (B) in clause (ii), by striking ``or for a period in 
                fiscal year 2010'' and inserting ``2010, 2011, or for 
                period in fiscal year 2012''; and
                    (C) in clause (iv)--
                          (i) in the clause heading, by striking ``2009 
                      and the first calendar quarter of fiscal year 
                      2010'' and inserting ``2011 and the first calendar 
                      quarter of fiscal year 2012''; and
                          (ii) in each of subclauses (I) and (II), by 
                      striking `` or for a period in fiscal year 2010'' 
                      and inserting ``2010, 2011, or for a period in 
                      fiscal year 2012''; and
            (3) in subparagraph (B)--
                    (A) in clause (i)--
                          (i) in the first sentence, by striking 
                      ``2009'' and inserting ``2011''; and
                          (ii) in the second sentence, by striking 
                      ``2010 for the period ending on December 31, 
                      2009'' and inserting ``2012 for the period ending 
                      on December 31, 2011''.
SEC. 617. GAO REPORT ON 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 
Medicaid are actuarially sound.

[[Page 123 STAT. 104]]

                      Subtitle C--Other Provisions

SEC. 621. <<NOTE: 15 USC 657p.>> 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 
                employer-

[[Page 123 STAT. 105]]

                sponsored cafeteria plans under section 125 of the 
                Internal Revenue Code of 1986;
                    (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. 622. SENSE OF THE 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.

[[Page 123 STAT. 106]]

            (5) The rapid growth in health insurance costs over the last 
        few years has forced many employers, particularly small 
        employers, 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 <<NOTE: 26 USC 5701.>> 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 ``$50.33 per thousand'',
            (2) by striking ``20.719 percent (18.063 percent on cigars 
        removed during 2000 or 2001)'' in paragraph (2) and inserting 
        ``52.75 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 ``40.26 cents 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 ``$50.33 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 ``$105.69 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 ``3.15 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 ``6.30 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 ``$1.51'', 
        and
            (2) by striking ``19.5 cents (17 cents on chewing tobacco 
        removed during 2000 or 2001)'' in paragraph (2) and inserting 
        ``50.33 cents''.

[[Page 123 STAT. 107]]

    (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 ``$2.8311 cents''.
    (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 ``$24.78''.
    (h) <<NOTE: 26 USC 5701 note.>> 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 April 
        1, 2009, 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 April 1, 2009, 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 April 
                1, 2009, to which any tax imposed by paragraph (1) 
                applies shall be liable for such tax.
                    (B) <<NOTE: Regulations.>> 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 August 1, 2009.
            (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 
        April 1, 2009, 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.

[[Page 123 STAT. 108]]

            (6) <<NOTE: Applicability.>> 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) <<NOTE: 26 USC 5701 note.>> 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 March 31, 2009.
SEC. 702. ADMINISTRATIVE IMPROVEMENTS.

    (a) Permit, Inventories, Reports, and Records Requirements for 
Manufacturers and Importers of Processed Tobacco.--
            (1) Permit.--
                    (A) Application.--Section 5712 of the Internal 
                Revenue Code of 1986 <<NOTE: 26 USC 5712.>> is amended 
                by inserting ``or processed tobacco'' after ``tobacco 
                products''.
                    (B) Issuance.--Section 5713(a) of such 
                Code <<NOTE: 26 USC 5713.>> is amended by inserting ``or 
                processed tobacco'' after ``tobacco products''.
            (2) Inventories, reports, and packages.--
                    (A) Inventories.--Section 5721 of such 
                Code <<NOTE: 26 USC 5721.>> is amended by inserting ``, 
                processed tobacco,'' after ``tobacco products''.
                    (B) Reports.--Section 5722 of such Code <<NOTE: 26 
                USC 5722.>> is amended by inserting ``, processed 
                tobacco,'' after ``tobacco products''.
                    (C) Packages, marks, labels, and notices.--Section 
                5723 of such Code <<NOTE: 26 USC 5723.>> is amended by 
                inserting ``, processed tobacco,'' after ``tobacco 
                products'' each place it appears.
            (3) Records.--Section 5741 of such Code <<NOTE: 26 USC 
        5741.>> is amended by inserting ``, processed tobacco,'' after 
        ``tobacco products''.
            (4) Manufacturer of processed tobacco.--Section 5702 of such 
        Code <<NOTE: 26 USC 5702.>> 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 amendments.--
                    (A) Section 5702(h) of such Code is amended by 
                striking ``tobacco products and cigarette papers and 
                tubes'' and inserting ``tobacco products or cigarette 
                papers or tubes or any processed tobacco''.

[[Page 123 STAT. 109]]

                    (B) Sections 5702(j) and 5702(k) of such 
                Code <<NOTE: 26 USC 5702.>> are each amended by 
                inserting ``, or any processed tobacco,'' after 
                ``tobacco products or cigarette papers or tubes''.
            (6) <<NOTE: 26 USC 5702 note.>> Effective date.--The 
        amendments made by this subsection shall take effect on April 1, 
        2009.

    (b) Basis for Denial, Suspension, or Revocation of Permits.--
            (1) Denial.--Paragraph (3) of section 5712 <<NOTE: 26 USC 
        5712.>> of such Code is amended to read as follows:
            ``(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, processed tobacco, 
                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, processed tobacco, 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 <<NOTE: 26 USC 5713.>> is amended to read as 
        follows:

    ``(b) Suspension or Revocation.--
            ``(1) <<NOTE: Order.>> 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, processed tobacco, 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, processed tobacco, 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

[[Page 123 STAT. 110]]

        shall be suspended for such period as the Secretary deems proper 
        or shall be revoked.''.
            (3) <<NOTE: 26 USC 5712 note.>> 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 
        (but only with respect to taxes imposed under chapters 51 and 52 
        of such Code)''.
            (2) <<NOTE: 19 USC 1514 note.>> 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 <<NOTE: 26 USC 5702.>> is amended by inserting ``or 
        cigars, or for use as wrappers thereof'' before the period at 
        the end.
            (2) <<NOTE: 26 USC 5702 note.>> 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 March 31, 2009.

    (e) Time of Tax for Unlawfully Manufactured Tobacco Products.--
            (1) In general.--Section 5703(b)(2) of such Code <<NOTE: 26 
        USC 5703.>> 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 manufactured 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) <<NOTE: 26 USC 5703 note.>> Effective date.--The 
        amendment made by this subsection shall take effect on the date 
        of the enactment of this Act.

    (f) Disclosure.--
            (1) In general.--Paragraph (1) of section 6103(o) of such 
        Code <<NOTE: 26 USC 6103.>> is amended by designating the text 
        as subparagraph (A), moving such text 2 ems to the right, 
        striking ``Returns'' and inserting ``(a) in general.--Returns'', 
        and by inserting after subparagraph (A) (as so redesignated) the 
        following new subparagraph:
                    ``(B) Use in certain proceedings.--Returns and 
                return information disclosed to a Federal agency under 
                subparagraph (A) may be used in an action or proceeding 
                (or in preparation for such action or proceeding) 
                brought under section 625 of the American Jobs Creation 
                Act of 2004 for the collection of any unpaid assessment 
                or penalty arising under such Act.''.
            (2) Conforming amendment.--Section 6103(p)(4) of such Code 
        is amended by striking ``(o)(1)'' both places it appears and 
        inserting ``(o)(1)(A)''.

[[Page 123 STAT. 111]]

            (3) <<NOTE: 26 USC 6103 note.>> Effective date.--The 
        amendments made by this subsection shall apply on or after the 
        date of the enactment of this Act.

    (g) <<NOTE: 26 USC 5711 note.>> Transitional Rule.--Any person who--
            (1) on April 1, 2009 is engaged in business as a 
        manufacturer of processed tobacco or as an importer of processed 
        tobacco, and
            (2) before the end of the 90-day period beginning on such 
        date, submits an application under subchapter B of chapter 52 of 
        such Code to engage in such business, may, notwithstanding such 
        subchapter B, continue to engage in such business pending final 
        action on such application. <<NOTE: Applicability.>> Pending 
        such final action, all provisions of such chapter 52 shall apply 
        to such applicant in the same manner and to the same extent as 
        if such applicant were a holder of a permit under such chapter 
        52 to engage in such business.
SEC. 703. TREASURY STUDY CONCERNING MAGNITUDE OF TOBACCO SMUGGLING 
                        IN THE UNITED STATES.

    Not later than one year after the date of the enactment of this Act, 
the Secretary of the Treasury shall conduct a study concerning the 
magnitude of tobacco smuggling in the United States and submit to 
Congress recommendations for the most effective steps to reduce tobacco 
smuggling. Such study shall also include a review of the loss of Federal 
tax receipts due to illicit tobacco trade in the United States and the 
role of imported tobacco products in the illicit tobacco trade in the 
United States.
SEC. 704. <<NOTE: 26 USC 6655 note.>> TIME FOR PAYMENT OF 
                        CORPORATE ESTIMATED TAXES.

    The percentage under subparagraph (C) of section 401(1) of the Tax 
Increase Prevention and Reconciliation Act of 2005 in effect on the date 
of the enactment of this Act is increased by 0.5 percentage point.

    Approved February 4, 2009.

LEGISLATIVE HISTORY--H.R. 2 (S. 275):
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CONGRESSIONAL RECORD, Vol. 155 (2009):
            Jan. 14, considered and passed House.
            Jan. 26-29, considered and passed Senate, amended.
            Feb. 4, House concurred in Senate amendment.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 44 (2009):
            Feb. 4, Presidential remarks.

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