79–006 

115TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 115–731 

RURAL DEVELOPMENT OF OPIOID CAPACITY SERVICES 

ACT 

JUNE 12, 2018.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. WALDEN, from the Committee on Energy and Commerce, 

submitted the following 

R E P O R T 

[To accompany H.R. 5477] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Energy and Commerce, to whom was referred 

the bill (H.R. 5477) to amend title XIX of the Social Security Act 

to provide for a demonstration project to increase substance use 

provider capacity under the Medicaid program, having considered 

the same, report favorably thereon with an amendment and recommend that the bill as amended do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 6 

Background and Need for Legislation .................................................................... 6 

Committee Action .................................................................................................... 8 

Committee Votes ...................................................................................................... 9 

Oversight Findings and Recommendations ........................................................... 9 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 9 

Congressional Budget Office Estimate ................................................................... 9 

Federal Mandates Statement ................................................................................. 31 

Statement of General Performance Goals and Objectives .................................... 31 

Duplication of Federal Programs ............................................................................ 31 

Committee Cost Estimate ....................................................................................... 31 

Earmark, Limited Tax Benefits, and Limited Tariff Benefits ............................. 32 

Disclosure of Directed Rule Makings ..................................................................... 32 

Advisory Committee Statement .............................................................................. 32 

Applicability to Legislative Branch ........................................................................ 32 

Section-by-Section Analysis of the Legislation ...................................................... 32 

Changes in Existing Law Made by the Bill, as Reported ..................................... 32 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 


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SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Rural Development of Opioid Capacity Services Act’’ 

or the ‘‘Rural DOCS Act’’. 

SEC. 2. DEMONSTRATION PROJECT TO INCREASE SUBSTANCE USE PROVIDER CAPACITY 

UNDER THE MEDICAID PROGRAM. 

Section 1903 of the Social Security Act (42 U.S.C. 1396b) is amended by adding 

at the end the following new subsection: 

‘‘(aa) DEMONSTRATION PROJECT TO INCREASE SUBSTANCE USE PROVIDER CAPAC- ITY.— ‘‘(1) IN GENERAL.—Not later than the date that is 180 days after the date of 

the enactment of this section, the Secretary shall, in consultation, as appropriate, with the Director of the Agency for Healthcare Research and Quality and 

the Assistant Secretary for Mental Health and Substance Use, conduct a 5-year 

demonstration project for the purpose described in paragraph (2) under which 

the Secretary shall— 

‘‘(A) for the first 18-month period of such project, award planning grants 

described in paragraph (3); and 

‘‘(B) for the remaining 42-month period of such project, provide to each 

State selected under paragraph (4) payments in accordance with paragraph 

(5). 

‘‘(2) PURPOSE.—The purpose described in this paragraph is for each State selected under paragraph (4) to increase the treatment capacity of providers participating under the State plan (or a waiver of such plan) to provide substance 

use disorder treatment or recovery services under such plan (or waiver) through 

the following activities: 

‘‘(A) For the purpose described in paragraph (3)(C)(i), activities that support an ongoing assessment of the behavioral health treatment needs of the 

State, taking into account the matters described in subclauses (I) through 

(IV) of such paragraph. 

‘‘(B) Activities that, taking into account the results of the assessment described in subparagraph (A), support the recruitment, training, and provision of technical assistance for providers participating under the State plan 

(or a waiver of such plan) that offer substance use disorder treatment or 

recovery services. 

‘‘(C) Improved reimbursement for and expansion of, through the provision 

of education, training, and technical assistance, the number or treatment 

capacity of providers participating under the State plan (or waiver) that— 

‘‘(i) are authorized to dispense drugs approved by the Food and Drug 

Administration for individuals with a substance use disorder who need 

withdrawal management or maintenance treatment for such disorder; 

‘‘(ii) have in effect a registration or waiver under section 303(g) of the 

Controlled Substances Act for purposes of dispensing narcotic drugs to 

individuals for maintenance treatment or detoxification treatment and 

are in compliance with any regulation promulgated by the Assistant 

Secretary for Mental Health and Substance Use for purposes of carrying out the requirements of such section 303(g); and 

‘‘(iii) are qualified under applicable State law to provide substance 

use disorder treatment or recovery services. 

‘‘(D) Improved reimbursement for and expansion of, through the provision 

of education, training, and technical assistance, the number or treatment 

capacity of providers participating under the State plan (or waiver) that 

have the qualifications to address the treatment or recovery needs of— 

‘‘(i) individuals enrolled under the State plan (or a waiver of such 

plan) who have neonatal abstinence syndrome, in accordance with 

guidelines issued by the American Academy of Pediatrics and American 

College of Obstetricians and Gynecologists relating to maternal care 

and infant care with respect to neonatal abstinence syndrome; 

‘‘(ii) pregnant women, postpartum women, and infants, particularly 

the concurrent treatment, as appropriate, and comprehensive case 

management of pregnant women, postpartum women and infants, enrolled under the State plan (or a waiver of such plan); 

‘‘(iii) adolescents and young adults between the ages of 12 and 21 enrolled under the State plan (or a waiver of such plan); or 

‘‘(iv) American Indian and Alaska Native individuals enrolled under 

the State plan (or a waiver of such plan). 

‘‘(3) PLANNING GRANTS.— 

‘‘(A) IN GENERAL.—The Secretary shall, with respect to the first 18-month 

period of the demonstration project conducted under paragraph (1), award 

planning grants to at least 10 States selected in accordance with subparaVerDate Sep 11 2014 08:07 Jun 16, 2018 Jkt 079006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6621 E:\HR\OC\HR731.XXX HR731

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graph (B) for purposes of preparing an application described in paragraph 

(4)(C) and carrying out the activities described in subparagraph (C). 

‘‘(B) SELECTION.—In selecting States for purposes of this paragraph, the 

Secretary shall— 

‘‘(i) select States that have a State plan (or waiver of the State plan) 

approved under this title; 

‘‘(ii) select States in a manner that ensures geographic diversity; and 

‘‘(iii) give preference to States with a prevalence of substance use disorders (in particular opioid use disorders) that is comparable to or higher than the national average prevalence, as measured by aggregate per 

capita drug overdoses, or any other measure that the Secretary deems 

appropriate. 

‘‘(C) ACTIVITIES DESCRIBED.—Activities described in this subparagraph 

are, with respect to a State, each of the following: 

‘‘(i) Activities that support the development of an initial assessment 

of the behavioral health treatment needs of the State to determine the 

extent to which providers are needed (including the types of such providers and geographic area of need) to improve the network of providers that treat substance use disorders under the State plan (or waiver), including the following: 

‘‘(I) An estimate of the number of individuals enrolled under the 

State plan (or a waiver of such plan) who have a substance use disorder. 

‘‘(II) Information on the capacity of providers to provide substance use disorder treatment or recovery services to individuals 

enrolled under the State plan (or waiver), including information on 

providers who provide such services and their participation under 

the State plan (or waiver). 

‘‘(III) Information on the gap in substance use disorder treatment 

or recovery services under the State plan (or waiver) based on the 

information described in subclauses (I) and (II). 

‘‘(IV) Projections regarding the extent to which the State participating under the demonstration project would increase the number 

of providers offering substance use disorder treatment or recovery 

services under the State plan (or waiver) during the period of the 

demonstration project. 

‘‘(ii) Activities that, taking into account the results of the assessment 

described in clause (i), support the development of State infrastructure 

to, with respect to the provision of substance use disorder treatment or 

recovery services under the State plan (or a waiver of such plan), recruit prospective providers and provide training and technical assistance to such providers. 

‘‘(D) FUNDING.—For purposes of subparagraph (A), there is appropriated, 

out of any funds in the Treasury not otherwise appropriated, $50,000,000, 

to remain available until expended. 

‘‘(4) POST-PLANNING STATES.— 

‘‘(A) IN GENERAL.—The Secretary shall, with respect to the remaining 42- 

month period of the demonstration project conducted under paragraph (1), 

select not more than 5 States in accordance with subparagraph (B) for purposes of carrying out the activities described in paragraph (2) and receiving 

payments in accordance with paragraph (5). 

‘‘(B) SELECTION.—In selecting States for purposes of this paragraph, the 

Secretary shall— 

‘‘(i) select States that received a planning grant under paragraph (3); 

‘‘(ii) select States that submit to the Secretary an application in accordance with the requirements in subparagraph (C), taking into consideration the quality of each such application; 

‘‘(iii) select States in a manner that ensures geographic diversity; and 

‘‘(iv) give preference to States with a prevalence of substance use disorders (in particular opioid use disorders) that is comparable to or higher than the national average prevalence, as measured by aggregate per 

capita drug overdoses, or any other measure that the Secretary deems 

appropriate. 

‘‘(C) APPLICATIONS.— 

‘‘(i) IN GENERAL.—A State seeking to be selected for purposes of this 

paragraph shall submit to the Secretary, at such time and in such form 

and manner as the Secretary requires, an application that includes 

such information, provisions, and assurances, as the Secretary may require, in addition to the following: 


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‘‘(I) A proposed process for carrying out the ongoing assessment 

described in paragraph (2)(A), taking into account the results of the 

initial assessment described in paragraph (3)(C)(i). 

‘‘(II) A review of reimbursement methodologies and other policies 

related to substance use disorder treatment or recovery services 

under the State plan (or waiver) that may create barriers to increasing the number of providers delivering such services. 

‘‘(III) The development of a plan, taking into account activities 

carried out under paragraph (3)(C)(ii), that will result in long-term 

and sustainable provider networks under the State plan (or waiver) 

that will offer a continuum of care for substance use disorders. 

Such plan shall include the following: 

‘‘(aa) Specific activities to increase the number of providers 

(including providers that specialize in providing substance use 

disorder treatment or recovery services, hospitals, health care 

systems, Federally qualified health centers, and, as applicable, 

certified community behavioral health clinics) that offer substance use disorder treatment, recovery, or support services, 

including short-term detoxification services, outpatient substance use disorder services, and evidence-based peer recovery 

services. 

‘‘(bb) Strategies that will incentivize providers described in 

subparagraphs (C) and (D) of paragraph (2) to obtain the necessary training, education, and support to deliver substance 

use disorder treatment or recovery services in the State. 

‘‘(cc) Milestones and timeliness for implementing activities 

set forth in the plan. 

‘‘(dd) Specific measurable targets for increasing the substance use disorder treatment and recovery provider network 

under the State plan (or a waiver of such plan). 

‘‘(IV) A proposed process for reporting the information required 

under paragraph (6)(A), including information to assess the effectiveness of the efforts of the State to expand the capacity of providers to deliver substance use disorder treatment or recovery services during the period of the demonstration project under this subsection. 

‘‘(V) The expected financial impact of the demonstration project 

under this subsection on the State. 

‘‘(VI) A description of all funding sources available to the State 

to provide substance use disorder treatment or recovery services in 

the State. 

‘‘(VII) A preliminary plan for how the State will sustain any increase in the capacity of providers to deliver substance use disorder 

treatment or recovery services resulting from the demonstration 

project under this subsection after the termination of such demonstration project. 

‘‘(VIII) A description of how the State will coordinate the goals 

of the demonstration project with any waiver received pursuant to 

section 1115 for the delivery of substance use services under the 

State plan, as applicable. 

‘‘(ii) CONSULTATION.—In completing an application under clause (i), a 

State shall consult with relevant stakeholders, including Medicaid 

managed care plans, health care providers, and Medicaid beneficiary 

advocates, and include in such application a description of such consultation. 

‘‘(5) PAYMENT.— 

‘‘(A) IN GENERAL.—For each quarter occurring during the period for which 

the demonstration project is conducted (after the first 18 months of such 

period), the Secretary shall pay under this subsection, subject to subparagraphs (C) and (D), to each State selected under paragraph (4) an amount 

equal to 80 percent of so much of the qualified sums expended during such 

quarter. 

‘‘(B) QUALIFIED SUMS DEFINED.—For purposes of subparagraph (A), the 

term ‘qualified sums’ means, with respect to a State and a quarter, the 

amount equal to the amount (if any) by which the sums expended by the 

State during such quarter attributable to substance use treatment or recovery services furnished by providers participating under the State plan (or 

a waiver of such plan) exceeds 1/4 of such sums expended by the State durVerDate Sep 11 2014 08:07 Jun 16, 2018 Jkt 079006 PO 00000 Frm 00004 Fmt 6659 Sfmt 6621 E:\HR\OC\HR731.XXX HR731

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ing fiscal year 2018 attributable to substance use treatment or recovery 

services. 

‘‘(C) NON-DUPLICATION OF PAYMENT.—In the case that payment is made 

under subparagraph (A) with respect to expenditures for substance use 

treatment or recovery services furnished by providers participating under 

the State plan (or a waiver of such plan), payment may not also be made 

under subsection (a) with respect to expenditures for the same services so 

furnished. 

‘‘(D) CONDITIONS.—In the case of a State selected under paragraph (4) 

that provides substance use disorder treatment and recovery services under 

a waiver under section 1115, such State shall, as a condition of receiving 

payments under subparagraph (A)— 

‘‘(i) coordinate such services under such waiver with substance use 

disorder treatment and recovery services provided under the demonstration project under this subsection; and 

‘‘(ii) take such actions as appropriate under the demonstration project 

to expand such services under such waiver. 

‘‘(6) REPORTS.— ‘‘(A) STATE REPORTS.—A State receiving payments under paragraph (5) 

shall, for the period of the demonstration project under this subsection, submit to the Secretary a quarterly report, with respect to expenditures for 

substance use treatment or recovery services for which payment is made to 

the State under this subsection, on the following: 

‘‘(i) The specific activities with respect to which payment under this 

subsection was provided. 

‘‘(ii) The number of providers that delivered substance use disorder 

treatment or recovery services in the State under the demonstration 

project compared to the estimated number of providers that would have 

otherwise delivered such services in the absence of such demonstration 

project. 

‘‘(iii) The number of individuals enrolled under the State plan (or a 

waiver of such plan) who received substance use disorder treatment or 

recovery services under the demonstration project compared to the estimated number of such individuals who would have otherwise received 

such services in the absence of such demonstration project. 

‘‘(iv) Other matters as determined by the Secretary. 

‘‘(B) CMS REPORTS.— 

‘‘(i) INITIAL REPORT.—Not later than October 1, 2020, the Administrator of the Centers for Medicare & Medicaid Services shall, in consultation with the Director of the Agency for Healthcare Research and 

Quality and the Assistant Secretary for Mental Health and Substance 

Use, submit to Congress an initial report on— 

‘‘(I) the States awarded planning grants under paragraph (3); 

‘‘(II) the criteria used in such selection; and 

‘‘(III) the activities carried out by such States under such planning grants. 

‘‘(ii) INTERIM REPORT.—Not later than October 1, 2022, the Administrator of the Centers for Medicare & Medicaid Services shall, in consultation with the Director of the Agency for Healthcare Research and 

Quality and the Assistant Secretary for Mental Health and Substance 

Use, submit to Congress an interim report— 

‘‘(I) on activities carried out under the demonstration project 

under this subsection; 

‘‘(II) on the extent to which States selected under paragraph (4) 

have achieved the stated goals submitted in their applications 

under subparagraph (C) of such paragraph; 

‘‘(III) with a description of the strengths and limitations of such 

demonstration project; and 

‘‘(IV) with a plan for the sustainability of such project. 

‘‘(iii) FINAL REPORT.—Not later than October 1, 2024, the Administrator of the Centers for Medicare & Medicaid Services shall, in consultation with the Director of the Agency for Healthcare Research and 

Quality and the Assistant Secretary for Mental Health and Substance 

Use, submit to Congress a final report— 

‘‘(I) providing updates on the matters reported in the interim report under clause (ii); 

‘‘(II) including a description of any changes made with respect to 

the demonstration project under this subsection after the submission of such interim report; and 


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1 Centers for Disease Control and Prevention. ‘‘Drug Overdose Death Data.’’ December 19, 

2017. Available at https://www.cdc.gov/drugoverdose/data/statedeaths.html. 2Dowell, D., Arias E., Kochanek K. et al. ‘‘Contribution of Opioid-Involved Poisoning to the 

Change in Life Expectancy in the United States, 2000–2015.’’ JAMA, September 2017. Available 

at https://jamanetwork.com/journals/jama/fullarticle/2654372. 3 American Action Forum. ‘‘The Labor Force and Output Consequences of the Opioid Crisis.’’ 

March 27, 2018. Available at https://www.americanactionforum.org/research/labor-force-outputconsequences-opioid-crisis/. 4 American Enterprise Institute. ‘‘The Geographic Variation in the Cost of the Opioid 

Crisis’’. Available at https://www.aei.org/wp-content/uploads/2018/03/Geographic_Variation_ in_Cost_of_Opioid_Crisis.pdf. 5Kaiser Family Foundation, ‘‘A Look at How the Opioid Crisis Has Affected People with Employer Coverage,’’ April 2018. Available online at: https://www.kff.org/health-costs/press-release/ 

‘‘(III) evaluating such demonstration project. 

‘‘(C) AHRQ REPORT.—Not later than three years after the date of the enactment of this subsection, the Director of the Agency for Healthcare Research and Quality shall submit to Congress a summary on the experiences 

of States awarded planning grants under paragraph (3) and States selected 

under paragraph (4). 

‘‘(7) DATA SHARING AND BEST PRACTICES.—During the period of the demonstration project under this subsection, the Secretary shall, in collaboration with 

States selected under paragraph (4), facilitate data sharing and the development of best practices between such States and States that were not so selected. 

‘‘(8) CMS FUNDING.—There is appropriated, out of any funds in the Treasury not otherwise appropriated, $5,000,000 to the Centers for Medicare & Medicaid 

Services for purposes of implementing this subsection. Such amount shall remain available until expended.’’. 

PURPOSE AND SUMMARY

H.R. 5477 was introduced on April 11, 2018, by Rep. Tom 

O’Halleran (D–AZ). The bill requires the Centers for Medicare and 

Medicaid Services (CMS) to carry out a demonstration project to 

provide an enhanced federal matching rate for state Medicaid expenditures related to the expansion of substance-use treatment and 

recovery services. 

BACKGROUND AND NEED FOR LEGISLATION

Deaths due to overdoses of opioids and other drugs have ravaged 

American communities. According to the Centers for Disease Control and Prevention (CDC), on average, 1,000 people are treated for 

opioid misuse in emergency departments per day, an average of 

115 Americans die per day, and opioid-related overdoses have increased steadily since 1999.1

While the impacts to Americans’ health outcomes are staggering, 

the opioid crisis has negatively impacted society in numerous ways. 

The Centers for Disease Control and Prevention note that life expectancy dropped in 2015 and 2106 and that one of the reasons 

was an increase in unintentional injuries, a category that includes 

drug overdoses.2 The opioid crisis has also resulted in a contraction 

in the labor force by almost 1 million workers in the years between 

1999 and 2015, which resulted in a loss of $702 billion in real output.3 In 2015, the total economic burden of the opioid epidemic was 

estimated to be $504 billion.4 While all states were negatively impacted, there is geographic variation in the burden. West Virginia 

had the greatest loss per person ($4,378) and Nebraska had the 

lowest loss per person ($394).4 One recent analysis found that the 

annual cost for private sector employers for treating opioid addiction and overdoses has increased more than eight-fold since 2004, 

and more than one in five persons aged 55 to 64 had at least one 

opioid prescription in 2016.5


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analysis-cost-of-treating-opioid-addiction-rose-rapidly-for-large-employers-as-the-number-of-prescriptions-has-declined/. 6Government Accountability Office, ‘‘Medicaid: States Fund Services for Adults in Institutions 

for Mental Disease Using a Variety of Strategies,’’ GAO–17–652, August 2017. Available at 

https://www.gao.gov/assets/690/686456.pdf. 7Medicaid and CHIP Payment and Access Commission, ‘‘Medicaid and the Opioid Epidemic,’’ 

Chapter 2 in June 2017 Report to Congress on Medicaid and CHIP. Available at: https:// 

www.macpac.gov/wp-content/uploads/2017/06/Medicaid-and-the-Opioid-Epidemic.pdf. 8Kaiser Family Foundation. ‘‘Medicaid’s Role in Addressing the Opioid Epidemic.’’ Available 

at https://www.kff.org/infographic/medicaids-role-in-addressing-opioid-epidemic/. 9Kaiser Family Foundation. ‘‘Medicaid’s Role in Addressing the Opioid Epidemic.’’ Available 

at https://www.kff.org/infographic/medicaids-role-in-addressing-opioid-epidemic/. 10Medicaid and CHIP Payment and Access Commission, ‘‘Medicaid and the Opioid Epidemic,’’ 

Chapter 2 in June 2017 Report to Congress on Medicaid and CHIP. Available at: https:// 

www.macpac.gov/wp-content/uploads/2017/06/Medicaid-and-the-Opioid-Epidemic.pdf. 11See SAMHSA website. Available at: https://www.samhsa.gov/medication-assisted-treatment. 

Medicaid is the largest source of federal funding for behavioral 

health services—mental health and substance use disorder services—with nearly $71 billion in projected 2017 spending.6 As the 

Medicaid and CHIP Payment and Access Commission (MACPAC) 

stated in 2017, ‘‘the opioid epidemic, which has reached most communities across the U.S., disproportionately affects Medicaid beneficiaries.’’ 7 Of the two million non-elderly Americans with opioid 

addiction, Medicaid provides health coverage for an estimated 38 

percent of this population, which is the largest percentage of any 

insurer type.8 Medicaid provides care to 4 in 10 adults with opioid 

use disorder and compared to other insurance types, provides a significantly higher percentage of inpatient and outpatient substance 

use disorder treatment.9

MACPAC found that ‘‘Medicaid beneficiaries are prescribed pain 

relievers at higher rates than those with other sources of insurance. They also have a higher risk of overdose and other negative 

outcomes, from both prescription opioids and illegal opioids such as 

heroin and illicitly manufactured fentanyl.’’ 10 Not only are the 

number of Medicaid beneficiaries with opioid misuse disproportionately high, so too are the number of overdoses. Studies from North 

Carolina and Washington indicate high rates of opioid-related 

deaths for the Medicaid population (33 percent and 45 percent, respectively). 

For treatment, Medicaid has several pharmacy and medical benefits for treating opioid use disorder that vary by state. A primary 

pharmaceutical treatment offered to patients with opioid abuse 

and/or substance use disorder is medication-assisted treatment 

(MAT). The Substance Abuse and Mental Health Services Administration (SAMHSA) describes MAT as ‘‘the use of FDA-approved 

medications, in combination with counseling and behavioral therapies, to provide a ‘‘whole-patient’’ approach to the treatment of substance use disorders.’’ 11

Non-pharmaceutical treatment of opioid use disorder in Medicaid 

occurs in inpatient, outpatient, residential, and community-based 

settings. MACPAC’s 2017 analysis found that ‘‘Medicaid is responding to the opioid crisis by covering treatment, innovating in the delivery of care, and working with other state agencies to reduce misuse of prescription opioids.’’ State Medicaid programs adopt strategies and design their programs to meet the needs of their Medicaid 

beneficiaries resulting in variations in covered treatment services 

and settings. It is important state Medicaid programs provide a 

continuum of care to serve the needs of Medicaid beneficiaries. 


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12 Cummings, J.R., Wen, H., Ko, M. & Druss, B.G., ‘‘Race/Ethnicity and Geographic Access to 

Medicaid Substance Use Disorder Treatment facilities in the United States,’’ Journal of the 

American Medical Association, Psychiatry, February 2014, 71(2), 190–196. 13 Jones, C.M, Campopiano, M., Baldwin, G. & McCance-Katz, E. ‘‘National and State Treatment Need and Capacity for Opioid Agonist Medication-Assisted Treatment,’’ American Journal 

of Public Health, August 2015, 105(8), 55–63. 14 Abraham, A.J., Andrews, C.M., Yingling, M.E. & Shannon, J. ‘‘Geographic Disparities in 

Availability of Opioid Use Disorder Treatment for Medicaid Enrollees,’’ Health Services Research, February 2018, 53(1), 389–404. 

However, as MACPAC noted, ‘‘there are gaps in the continuum 

of care, and states vary in the extent to which they cover needed 

treatment.’’ One of the barriers to appropriate treatment consistently identified by Medicaid directors and health policy experts is 

a statutory prohibition on federal Medicaid matching funds for paying for care for certain Medicaid beneficiaries in Institutions for 

Mental Diseases (IMD). As MACPAC has explained, ‘‘the Medicaid 

IMD exclusion acts a barrier for individuals with an opioid use disorder to receive residential treatment, which, depending on an individual’s treatment plan, may be the most appropriate setting for 

care.’’ Given these and other findings, there continues to be an opportunity for Congress and state Medicaid programs to work to improve access to timely, high-quality treatment across the continuum of care. 

One of the barriers to appropriate substance use disorder treatment consistently identified by Medicaid directors and health policy 

experts is a shortage of providers. A shortage of providers creates 

barriers for Medicaid beneficiaries to access treatment. Approximately 40 percent of U.S. counties lack a single outpatient addiction treatment program that accepts any Medicaid enrollees.12 In 

2012, 96 percent of states, including the District of Columbia, had 

opioid abuse or dependence rates higher than their current 

buprenorphine treatment capacity rates.13 In addition to the shortage of providers, most opioid treatment programs are located in 

urban areas, which causes significant regional disparities within 

and among states.14

COMMITTEE ACTION

On April 11 and 12, 2018, the Subcommittee on Health held a 

hearing on H.R. 5477. The Subcommittee received testimony from: 

• Kimberly Brandt, Principal Deputy Administrator for Operations, Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services; 

• Michael Botticelli, Executive Director, Grayken Center for 

Addiction, Boston Medical Center; 

• Toby Douglas, Senior Vice President, Medicaid Solutions, 

Centene Corporation; 

• David Guth, Chief Executive Officer, Centerstone; 

• John Kravitz, Chief Information Officer, Geisinger Health 

System; and, 

• Sam Srivastava, Chief Executive Officer, Magellan Health. 

On May 17, 2018, the full Committee on Energy and Commerce 

met in open markup session and ordered H.R. 5477, as amended, 

favorably reported to the House by a voice vote. 


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COMMITTEE VOTES

Clause 3(b) of rule XIII requires the Committee to list the record 

votes on the motion to report legislation and amendments thereto. 

There were no record votes taken in connection with ordering H.R. 

5477 reported. 

OVERSIGHT FINDINGS AND RECOMMENDATIONS

Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of rule 

XIII, the Committee held a hearing and made findings that are reflected in this report. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

Pursuant to clause 3(c)(2) of rule XIII, the Committee finds that 

H.R. 5477 would result in no new or increased budget authority, 

entitlement authority, or tax expenditures or revenues. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII, the following is the cost 

estimate provided by the Congressional Budget Office pursuant to 

section 402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, June 6, 2018. 

Hon. GREG WALDEN, 

Chairman, Committee on Energy and Commerce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed document with cost estimates for the opioid-related legislation ordered to be reported on May 9 and May 17, 

2018. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Tom Bradley and 

Chad Chirico. 

Sincerely, 

MARK P. HADLEY

(For Keith Hall, Director). 

Enclosure. 

Opioid Legislation 

Summary: On May 9 and May 17, 2018, the House Committee 

on Energy and Commerce ordered 59 bills to be reported related to 

the nation’s response to the opioid epidemic. Generally, the bills 

would: 

• Provide grants to facilities and providers that treat people 

with substance use disorders, 

• Direct various agencies within the Department of Health 

and Human Services (HHS) to explore nonopioid approaches to 

treating pain and to educate providers about those alternatives, 

• Modify requirements under Medicaid and Medicare for 

prescribing controlled substances, 


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• Expand Medicaid coverage for substance abuse treatment, 

and • Direct the Food and Drug Administration (FDA) to modify 

its oversight of opioid drugs and other medications that are 

used to manage pain. 

Because of the large number of related bills ordered reported by 

the Committee, CBO is publishing a single comprehensive document that includes estimates for each piece of legislation. 

CBO estimates that enacting 20 of the bills would affect direct 

spending, and 2 of the bills would affect revenues; therefore, payas-you-go procedures apply for those bills. 

CBO estimates that enacting H.R. 4998, the Health Insurance for 

Former Foster Youth Act, would increase net direct spending by 

more than $2.5 billion and on-budget deficits by more than $5 billion in at least one of the four consecutive 10-year periods beginning in 2029. None of the remaining 58 bills included in this estimate would increase net direct spending by more than $2.5 billion 

or on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2029. 

One of the bills reviewed for this document, H.R. 5795, would impose both intergovernmental and private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). CBO estimates that the costs of those mandates on public and private entities would fall below the thresholds in UMRA ($80 million and 

$160 million, respectively, in 2018, adjusted annually for inflation). 

Five bills, H.R. 5228, H.R. 5333, H.R. 5554, H.R. 5687, and H.R. 

5811, would impose private-sector mandates as defined in UMRA. 

CBO estimates that the costs of the mandates in three of the bills 

(H.R. 5333, H.R. 5554, and H.R. 5811) would not exceed the UMRA 

threshold for private entities. Because CBO is uncertain how federal agencies would implement new authority granted in the other 

two bills, H.R. 5228 and H.R. 5687, CBO cannot determine whether 

the costs of those mandates would exceed the UMRA threshold. 

Estimated cost to the Federal Government: The estimates in this 

document do not include the effects of interactions among the bills. 

If all 59 bills were combined and enacted as one piece of legislation, 

the budgetary effects would be different from the sum of the estimates in this document, although CBO expects that any such differences would be small. The costs of this legislation fall within 

budget functions 550 (health), 570 (Medicare), 750 (administration 

of justice), and 800 (general government). 

Basis of estimate: For this estimate, CBO assumes that all of the 

legislation will be enacted late in 2018 and that authorized and estimated amounts will be appropriated each year. Outlays for discretionary programs are estimated based on historical spending patterns for similar programs. 

Uncertainty 

CBO aims to produce estimates that generally reflect the middle 

of a range of the most likely budgetary outcomes that would result 

if the legislation was enacted. Because data on the utilization of 

mental health and substance abuse treatment under Medicaid and 

Medicare is scarce, CBO cannot precisely predict how patients or 

providers would respond to some policy changes or what budgetary 

effects would result. In addition, several of the bills would give the 


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Department of Health and Human Services (HHS) considerable 

latitude in designing and implementing policies. Budgetary effects 

could differ from those provided in CBO’s analyses depending on 

those decisions. 

Direct spending and revenues 

Table 1 lists the 22 bills of the 59 ordered to be reported that 

would affect direct spending or revenues. 


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TABLE 1.—ESTIMATED CHANGES IN MANDATORY SPENDING AND REVENUES 

By fiscal year, in millions of dollars— 

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2019– 2023 2019–2028 

INCREASES OR DECREASES (¥) IN DIRECT SPENDING 

Legislation Primarily Affecting Medicaid: 

H.R. 1925, At-Risk Youth Medicaid Protection Act of 2017 ................... 0 * 5 5 5 10 10 10 10 10 10 25 75 H.R. 4998, Health Insurance for Former Foster Youth Act ...................... 0 0 0 0 0 * 10 21 33 46 61 * 171 H.R. 5477, Rural Development of Opioid Capacity Services Act ............ 0 13 35 58 68 83 27 9 3 3 3 256 301 H.R. 5583, a bill to amend title XI of the Social Security Act to require 

States to annually report on certain adult health quality measures, and for other purposes ........................................................................ 0 * * * * * * * * * * * * 

H.R. 5797, IMD CARE Act ........................................................................ 0 38 158 251 265 279 0 0 0 0 0 991 991 H.R. 5799, Medicaid DRUG Improvement Act a ....................................... 0 * * 1 1 1 1 1 1 1 1 2 5 

H.R. 5801, Medicaid Providers Are Required To Note Experiences in 

Record Systems to Help In-Need Patients (PARTNERSHIP) Act a ........ 0 * * * * * * * * * * * * 

H.R. 5808, Medicaid Pharmaceutical Home Act of 2018 a ..................... 0 * ¥1 ¥1 ¥1 ¥1 ¥2 ¥2 ¥2 ¥2 ¥2 ¥4 ¥13 

H.R. 5810, Medicaid Health HOME Act .................................................... 0 94 58 62 56 52 48 43 38 32 25 323 509 

Legislation Primarily Affecting Medicare: 

H.R. 3528, Every Prescription Conveyed Securely Act ............................. 0 0 0 ¥24 ¥35 ¥33 ¥30 ¥33 ¥32 ¥31 ¥32 ¥92 ¥250 

H.R. 4841, Standardizing Electronic Prior Authorization for Safe Prescribing Act of 2018 ............................................................................ 0 0 0 * * * * * * * * * * H.R. 5603, Access to Telehealth Services for Opioid Use Disorders Act 0 2 * * * 1 1 1 2 2 2 3 11 H.R. 5605, Advancing High Quality Treatment for Opioid Use Disorders 

in Medicare Act .................................................................................... 0 0 0 15 26 24 23 23 10 1 * 65 122 

H.R. 5675, a bill to amend title XVIII of the Social Security Act to require prescription drug plan sponsors under the Medicare program 

to establish drug management programs for at-risk beneficiaries ... 0 0 0 ¥6 ¥7 ¥7 ¥7 ¥8 ¥9 ¥9 ¥11 ¥20 ¥64 

H.R. 5684, Protecting Seniors From Opioid Abuse Act ............................ 0 0 0 * * * * * * * * * * H.R. 5796, Responsible Education Achieves Care and Healthy Outcomes for Users’ Treatment Act of 2018 ............................................ 0 10 25 50 10 5 0 0 0 0 0 100 100 H.R. 5798, Opioid Screening and Chronic Pain Management Alternatives for Seniors Act ........................................................................ 0 0 * 1 1 1 1 1 1 1 1 2 5 H.R. 5804, Post-Surgical Injections as an Opioid Alternative Act a ....... 0 0 25 30 25 20 10 5 0 0 0 100 115 

H.R. 5809, Postoperative Opioid Prevention Act of 2018 ........................ 0 0 0 0 10 15 20 25 30 35 45 25 180 

Legislation Primarily Affecting the Food and Drug Administration: 


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H.R. 5333, Over-the-Counter Monograph Safety, Innovation, and Reform Act of 2018 a ............................................................................... 0 0 * * * * * * * * * * * 

INCREASES OR DECREASES (¥) IN REVENUES b

H.R. 5752, Stop Illicit Drug Importation Act of 2018 ............................. 0 * * * * * * * * * * * * 

Annual amounts may not sum to totals because of rounding. * = between ¥$500,000 and $500,000. Budget authority is equivalent to outlays. a This bill also would affect spending subject to appropriation. b One additional bill, H.R. 5228, the Stop Counterfeit Drugs by Regulating and Enhancing Enforcement Now Act, would have a negligible effect on revenues. 


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Legislation Primarily Affecting Medicaid. The following nine bills 

would affect direct spending for the Medicaid program. 

H.R. 1925, the At-Risk Youth Medicaid Protection Act of 2017, 

would require states to suspend, rather than terminate, Medicaid 

eligibility for juvenile enrollees (generally under 21 years of age) 

who become inmates of public correctional institutions. States also 

would have to redetermine those enrollees’ Medicaid eligibility before their release and restore their coverage upon release if they 

qualify for the program. States would be required to process Medicaid applications submitted by or on behalf of juveniles in public 

correctional institutions who were not enrolled in Medicaid before 

becoming inmates and ensure that Medicaid coverage is provided 

when they are released if they are found to be eligible. On the 

basis of an analysis of juvenile incarceration trends and of the per 

enrollee spending for Medicaid foster care children, who have a 

similar health profile to incarcerated juveniles, CBO estimates that 

implementing the bill would cost $75 million over the 2019–2028 

period. 

H.R. 4998, the Health Insurance for Former Foster Youth Act, 

would require states to provide Medicaid coverage to adults up to 

age 25 who had aged out of foster care in any state. Under current 

law, such coverage is mandatory only if the former foster care 

youth has aged out in the state in which the individual applies for 

coverage. The policy also would apply to former foster children who 

had been in foster care upon turning 14 years of age but subsequently left foster care to enter into a legal guardianship with a 

kinship caregiver. The provisions would take effect respect for foster youth who turn 18 on or after January 1, 2023. On the basis 

of spending for Medicaid foster care children and data from the 

Census Bureau regarding annual migration rates between states, 

CBO estimates that implementing the bill would cost $171 million 

over the 2019–2028 period. 

H.R. 5477, the Rural Development of Opioid Capacity Services 

Act, would direct the Secretary of HHS to conduct a five-year demonstration to increase the number and ability of providers participating in Medicaid to provide treatment for substance use disorders. On the basis of an analysis of federal and state spending 

for treatment of substance use disorders and the prevalence of such 

disorders, CBO estimates that enacting the bill would increase direct spending by $301 million over the 2019–2028 period. 

H.R. 5583, a bill to amend title XI of the Social Security Act to 

require States to annually report on certain adult health quality 

measures, and for other purposes, would require states to include 

behavioral health indicators in their annual reports on the quality 

of care under Medicaid. Although the bill would add a requirement 

for states, CBO estimates that its enactment would not have a significant budgetary effect because most states have systems in place 

for reporting such measures to the federal government. 

H.R. 5797, the IMD CARE Act, would expand Medicaid coverage 

for people with opioid use disorder who are in institutions for mental disease (IMDs) for up to 30 days per year. Under a current-law 

policy known as the IMD exclusion, the federal government generally does not make matching payments to state Medicaid programs for most services provided by IMDs to adults between the 

ages of 21 and 64. Recent administrative changes have made fedVerDate Sep 11 2014 08:07 Jun 16, 2018 Jkt 079006 PO 00000 Frm 00014 Fmt 6659 Sfmt 6602 E:\HR\OC\HR731.XXX HR731

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eral financing for IMDs available in limited circumstances, but the 

statutory prohibition remains in place. CBO analyzed several data 

sets, primarily those collected by the Substance Abuse and Mental 

Health Services Administration (SAMHSA), to estimate current 

federal spending under Medicaid for IMD services and to estimate 

spending under H.R. 5797. Using that analysis, CBO estimates 

that enacting H.R. 5797 would increase direct spending by $991 

million over the 2019–2028 period. 

H.R. 5799, the Medicaid DRUG Improvement Act, would require 

state Medicaid programs to implement additional reviews of opioid 

prescriptions, monitor concurrent prescribing of opioids and certain 

other drugs, and monitor use of antipsychotic drugs by children. 

CBO estimates that the bill would increase direct spending by $5 

million over 2019–2028 period to cover the administrative costs of 

complying with those requirements. On the basis of stakeholder 

feedback, CBO expects that the bill would not have a significant effect on Medicaid spending for prescription drugs because many of 

the bill’s requirements would duplicate current efforts to curb 

opioid and antipsychotic drug use. (If enacted, H.R. 5799 also 

would affect spending subject to appropriation; CBO has not completed an estimate of that amount.) 

H.R. 5801, the Medicaid Providers Are Required To Note Experiences in Record Systems to Help-In-Need Patients (PARTNERSHIP) 

Act, would require providers who are permitted to prescribe controlled substances and who participate in Medicaid to query prescription drug monitoring programs (PDMPs) before prescribing 

controlled substances to Medicaid patients. PDMPs are statewide 

electronic databases that collect data on controlled substances dispensed in the state. The bill also would require PDMPs to comply 

with certain data and system criteria, and it would provide additional federal matching funds to certain states to help cover administrative costs. On the basis of a literature review and stakeholder 

feedback, CBO estimates that the net budgetary effect of enacting 

H.R. 5801 would be insignificant. Costs for states to come into compliance with the systems and administrative requirements would 

be roughly offset by savings from small reductions in the number 

of controlled substances paid for by Medicaid under the proposal. 

(If enacted, H.R. 5801 also would affect spending subject to appropriation; CBO has not completed an estimate of that amount.) 

H.R. 5808, the Medicaid Pharmaceutical Home Act of 2018, 

would require state Medicaid programs to operate pharmacy programs that would identify people at high risk of abusing controlled 

substances and require those patients to use a limited number of 

providers and pharmacies. Although nearly all state Medicaid programs currently meet such a requirement, a small number of highrisk Medicaid beneficiaries are not now monitored. Based on an 

analysis of information about similar state and federal programs, 

CBO estimates that net Medicaid spending under the bill would decrease by $13 million over the 2019–2028 period. That amount represents a small increase in administrative costs and a small reduction in the number of controlled substances paid for by Medicaid 

under the proposal. (If enacted, H.R. 5808 also would affect spending subject to appropriation; CBO has not completed an estimate 

of that amount.) 


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H.R. 5810, the Medicaid Health HOME Act, would allow states 

to receive six months of enhanced federal Medicaid funding for programs that coordinate care for people with substance use disorders. 

Based on enrollment and spending data from states that currently 

participate in Medicaid’s Health Homes program, CBO estimates 

that the expansion would cost approximately $469 million over the 

2019–2028 period. The bill also would require states to cover all 

FDA-approved drugs used in medication-assisted treatment for five 

years, although states could seek a waiver from that requirement. 

(Medication-assisted treatment combines behavioral therapy and 

pharmaceutical treatment for substance use disorders.) Under current law, states already cover most FDA-approved drugs used in 

such programs in some capacity, although a few exclude methadone 

dispensed by opioid treatment programs. CBO estimates that a 

small share of those states would begin to cover methadone if this 

bill was enacted at a federal cost of about $39 million over the 

2019–2028 period. In sum, CBO estimates that the enacting H.R. 

5810 would increase direct spending by $509 million over the 

2019–2028 period. 

Legislation Primarily Affecting Medicare. The following ten bills 

would affect direct spending for the Medicare program. 

H.R. 3528, the Every Prescription Conveyed Securely Act, would 

require prescriptions for controlled substances covered under Medicare Part D to be transmitted electronically, starting on January 

1, 2021. Based on CBO’s analysis of prescription drug spending, 

spending for controlled substances is a small share of total drug 

spending. CBO also assumes a small share of those prescriptions 

would not be filled because they are not converted to an electronic 

format. Therefore, CBO expects that enacting H.R. 3528 would reduce the number of prescriptions filled and estimates that Medicare spending would be reduced by $250 million over the 2019– 

2028 period. 

H.R. 4841, the Standardizing Electronic Prior Authorization for 

Safe Prescribing Act of 2018, would require health care professionals to submit prior authorization requests electronically, starting on January 1, 2021, for drugs covered under Medicare Part D. 

Taking into account that many prescribers already use electronic 

methods to submit such requests, CBO estimates that enacting 

H.R. 4841 would not significantly affect direct spending for Part D. 

H.R. 5603, the Access to Telehealth Services for Opioid Use Disorders Act, would permit the Secretary of HHS to lift current geographic and other restrictions on coverage of telehealth services 

under Medicare for treatment of substance use disorders or co-occurring mental health disorders. Under the bill, the Secretary of 

HHS would be directed to encourage other payers to coordinate 

payments for opioid use disorder treatments and to evaluate the 

extent to which the demonstration reduces hospitalizations, increases the use of medication-assisted treatments, and improves 

the health outcomes of individuals with opioid use disorders during 

and after the demonstration. Based on current use of Medicare 

telehealth services for treatment of substance use disorders, CBO 

estimates that expanding that coverage would increase direct 

spending by $11 million over the 2019–2028 period. 

H.R. 5605, the Advancing High Quality Treatment for Opioid Use 

Disorders in Medicare Act, would establish a five-year demonstraVerDate Sep 11 2014 08:07 Jun 16, 2018 Jkt 079006 PO 00000 Frm 00016 Fmt 6659 Sfmt 6602 E:\HR\OC\HR731.XXX HR731

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tion program to increase access to treatment for opioid use disorder. The demonstration would provide incentive payments and 

funding for care management services based on criteria such as patient engagement, use of evidence-based treatments, and treatment 

length and intensity. Under the bill, the Secretary of HHS would 

be directed to encourage other payers to coordinate payments for 

opioid use disorder treatments and to evaluate the extent to which 

the demonstration reduces hospitalizations, increases the use of 

medication-assisted treatments, and improves the health outcomes 

of individuals with opioid use disorders during and after the demonstration. Based on historical utilization of opioid use disorder 

treatments and projected spending on incentive payments and care 

management fees, CBO estimates that increased use of treatment 

services and the demonstration’s incentive payments would increase direct spending by $122 million over the 2019–2028 period. 

H.R. 5675, a bill to amend title XVIII of the Social Security Act 

to require prescription drug plan sponsors under the Medicare program to establish drug management programs for at-risk beneficiaries, would require Part D prescription drug plans to provide 

drug management programs for Medicare beneficiaries who are at 

risk for prescription drug abuse. (Under current law, Part D plans 

are permitted but not required to establish such programs as of 

2019.) Based on an analysis of the number of plans currently providing those programs, CBO estimates that enacting H.R. 5675 

would lower federal spending by $64 million over the 2019–2028 

period by reducing the number of prescriptions filled and Medicare’s payments for controlled substances. 

H.R. 5684, the Protecting Seniors From Opiod Abuse Act, would 

expand medication therapy management programs under Medicare 

Part D to include beneficiaries who are at risk for prescription drug 

abuse. Because relatively few beneficiaries would be affected by 

this bill, CBO estimates that its enactment would not significantly 

affect direct spending for Part D. 

H.R. 5796, the Responsible Education Achieves Care and Healthy 

Outcomes for Users’ Treatment Act of 2018, would allow the Secretary of HHS to award grants to certain organizations that provide technical assistance and education to high-volume prescribers 

of opioids. The bill would appropriate $100 million for fiscal year 

2019. Based on historical spending patterns for similar activities, 

CBO estimates that implementing H.R. 5796 would cost $100 million over the 2019–2028 period. 

H.R. 5798, the Opioid Screening and Chronic Pain Management 

Alternatives for Seniors Act, would add an assessment of current 

opioid prescriptions and screening for opioid use disorder to the 

Welcome to Medicare Initial Preventive Physical Examination. 

Based on historical use of the examinations and pain management 

alternatives, CBO expects that enacting the bill would increase use 

of pain management services and estimates that direct spending 

would increase by $5 million over the 2019–2028 period. 

H.R. 5804, the Post-Surgical Injections as an Opioid Alternative 

Act, would freeze the Medicare payment rate for certain analgesic 

injections provided in ambulatory surgical centers (ASCs). (For injections identified by specific billing codes, Medicare would pay the 

2016 rate, which is higher than the current rate, during the 2020– 

2024 period.) Based on current utilization in the ASC setting, CBO 


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estimates that enacting the legislation would increase direct spending by about $115 million over the 2019–2028 period. (If enacted, 

H.R. 5804 also would affect spending subject to appropriation; see 

Table 3.) 

H.R. 5809, the Postoperative Opioid Prevention Act of 2018, 

would create an additional payment under Medicare for nonopioid 

analgesics. Under current law, certain new drugs and devices may 

receive an additional payment—separate from the bundled payment for a surgical procedure—in outpatient hospital departments 

and ambulatory surgical centers. The bill would allow nonopioid 

analgesics to qualify for a five-year period of additional payments. 

Based on its assessment of current spending for analgesics and on 

the probability of new nonopioid analgesics coming to market, CBO 

estimates that H.R. 5809 would increase direct spending by about 

$180 million over the 2019–2028 period. 

Legislation Primarily Affecting the Food and Drug Administration. One bill related to the FDA would affect direct spending. 

H.R. 5333, the Over-the-Counter Monograph Safety, Innovation, 

and Reform Act of 2018, would change the way that the FDA regulates the marketing of over-the-counter (OTC) medicines, and it 

would authorize that agency to grant 18 months of exclusive market protection for certain qualifying OTC drugs, thus delaying the 

entry of other versions of the same qualifying OTC product. Medicaid currently provides some coverage for OTC medicines, but only 

if a medicine is the least costly alternative in its drug class. On the 

basis of stakeholder feedback, CBO expects that delaying the availability of additional OTC versions of a drug would not significantly 

affect the average net price paid by Medicaid. As a result, CBO estimates that enacting H.R. 5333 would have a negligible effect on 

the federal budget. (If enacted, H.R. 5333 also would affect spending subject to appropriation; see Table 3.) 

Legislation with Revenue Effects. Two bills would affect revenues. However, CBO estimates that one bill, H.R. 5228, the Stop 

Counterfeit Drugs by Regulating and Enhancing Enforcement Now 

Act, would have only a negligible effect. 

H.R. 5752, the Stop Illicit Drug Importation Act of 2018, would 

amend the Federal, Food, Drug, and Cosmetic Act (FDCA) to 

strengthen the FDA’s seizure powers and enhance its authority to 

detain, refuse, seize, or destroy illegal products offered for import. 

The legislation would subject more people to debarment under the 

FDCA and thus increase the potential for violations, and subsequently, the assessment of civil penalties, which are recorded in 

the budget as revenues. CBO estimates that those collections would 

result in an insignificant increase in revenues. Because H.R. 5752 

would prohibit the importation of drugs that are in the process of 

being scheduled, it also could reduce amounts collected in customs 

duties. CBO anticipates that the result would be a negligible decrease in revenues. With those results taken together, CBO estimates, enacting H.R. 5752 would generate an insignificant net increase in revenues over the 2019–2028 period. 

Spending subject to appropriation 

For this document, CBO has grouped bills with spending that 

would be subject to appropriation into four general categories: 

• Bills that would have no budgetary effect, 


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• Bills with provisions that would authorize specified 

amounts to be appropriated (see Table 2), 

• Bills with provisions for which CBO has estimated an authorization of appropriations (see Table 3), and 

• Bills with provisions that would affect spending subject to 

appropriation for which CBO has not yet completed an estimate. 

No Budgetary Effect. CBO estimates that 6 of the 59 bills would 

have no effect on direct spending, revenues, or spending subject to 

appropriation. 

H.R. 3192, the CHIP Mental Health Parity Act, would require all 

Children’s Health Insurance Program (CHIP) plans to cover mental 

health and substance abuse treatment. In addition, states would 

not be allowed to impose financial or utilization limits on mental 

health treatment that are lower than limits placed on physical 

health treatment. Based on information from the Centers for Medicare and Medicaid Services, CBO estimates that enacting the bill 

would have no budgetary effect because all CHIP enrollees are already in plans that meet those requirements. 

H.R. 3331, a bill to amend title XI of the Social Security Act to 

promote testing of incentive payments for behavioral health providers for adoption and use of certified electronic health record technology, would give the Center for Medicare and Medicaid Innovation (CMMI) explicit authorization to test a program offering incentive payments to behavioral health providers that adopt and use 

certified electronic health record technology. Because it is already 

clear to CMMI that it has that authority, CBO estimates that enacting the legislation would not affect federal spending. 

H.R. 5202, the Ensuring Patient Access to Substance Use Disorder Treatments Act of 2018, would clarify permission for pharmacists to deliver controlled substances to providers under certain 

circumstances. Because this provision would codify current practice, CBO estimates that H.R. 5202 would not affect direct spending or revenues during the 2019–2028 period. 

H.R. 5685, the Medicare Opioid Safety Education Act of 2018, 

would require the Secretary of HHS to include information on 

opioid use, pain management, and nonopioid pain management 

treatments in future editions of Medicare & You, the program’s 

handbook for beneficiaries, starting on January 1, 2019. Because 

H.R. 5685 would add information to an existing administrative document, CBO estimates that enacting the bill would have no budgetary effect. 

H.R. 5686, the Medicare Clear Health Options in Care for Enrollees Act of 2018, would require prescription drug plans that provide 

coverage under Medicare Part D to furnish information to beneficiaries about the risks of opioid use and the availability of alternative treatments for pain. CBO estimates that enacting the bill 

would not affect direct spending because the required activities 

would not impose significant administrative costs. 

H.R. 5716, the Commit to Opioid Medical Prescriber Accountability and Safety for Seniors Act, would require the Secretary of 

HHS on an annual basis to identify high prescribers of opioids and 

furnish them with information about proper prescribing methods. 

Because HHS already has the capacity to meet those requirements, 


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CBO estimates that enacting that provision would not impose additional administrative costs on the agency. 

Specified Authorizations. Table 2 lists the ten bills that would 

authorize specified amounts to be appropriated over the 2019–2023 

period. Spending from those authorized amounts would be subject 

to appropriation. 

TABLE 2.—ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR BILLS WITH SPECIFIED 

AUTHORIZATIONS 

By fiscal year, in millions of dollars— 

2018 2019 2020 2021 2022 2023 2019– 

2023 

INCREASES IN SPENDING SUBJECT TO APPROPRIATION 

H.R. 4684, Ensuring Access to Quality Sober Living Act: 

Authorization Level ........................................................... 0 3 0 0 0 0 3 

Estimated Outlays ............................................................ 0 1 2 * * * 3 

H.R. 5102, Substance Use Disorder Workforce Loan Repayment Act of 2018: 

Authorization Level ........................................................... 0 25 25 25 25 25 125 

Estimated Outlays ............................................................ 0 9 19 23 25 25 100 

H.R. 5176, Preventing Overdoses While in Emergency Rooms 

Act of 2018: 

Authorization Level ........................................................... 0 50 0 0 0 0 50 

Estimated Outlays ............................................................ 0 16 26 6 2 1 50 

H.R. 5197, Alternatives to Opioids (ALTO) in the Emergency 

Department Act: 

Authorization Level ........................................................... 0 10 10 10 0 0 30 

Estimated Outlays ............................................................ 0 3 8 10 7 2 30 

H.R. 5261, Treatment, Education, and Community Help to 

Combat Addiction Act of 2018: 

Authorization Level ........................................................... 0 4 4 4 4 4 20 

Estimated Outlays ............................................................ 0 1 3 4 4 4 16 

H.R. 5327, Comprehensive Opioid Recovery Centers Act of 

2018: 

Authorization Level ........................................................... 0 10 10 10 10 10 50 

Estimated Outlays ............................................................ 0 3 8 10 10 10 41 

H.R. 5329, Poison Center Network Enhancement Act of 2018: 

Authorization Level ........................................................... 0 30 30 30 30 30 151 

Estimated Outlays ............................................................ 0 12 25 29 29 29 125 

H.R. 5353, Eliminating Opioid-Related Infectious Diseases 

Act of 2018: 

Authorization Level ........................................................... 0 40 40 40 40 40 200 

Estimated Outlays ............................................................ 0 15 34 38 39 40 166 

H.R. 5580, Surveillance and Testing of Opioids to Prevent 

Fentanyl Deaths Act of 2018: 

Authorization Level ........................................................... 30 30 30 30 30 0 120 

Estimated Outlays ............................................................ 0 11 25 29 29 19 113 

H.R. 5587, Peer Support Communities of Recovery Act: 

Authorization Level ........................................................... 0 15 15 15 15 15 75 

Estimated Outlays ............................................................ 0 5 13 14 15 15 62 

Annual amounts may not sum to totals because of rounding. * = between zero and $500,000. 

H.R. 4684, the Ensuring Access to Quality Sober Living Act, 

would direct the Secretary of HHS to develop and disseminate best 

practices for organizations that operate housing designed for people 

recovering from substance use disorders. The bill would authorize 

a total of $3 million over the 2019–2021 period for that purpose. 

Based on historical spending patterns for similar activities, CBO 

estimates that implementing H.R. 4684 would cost $3 million over 

the 2019–2023 period. 

H.R. 5102, the Substance Use Disorder Workforce Loan Repayment Act of 2018, would establish a loan repayment program for 


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mental health professionals who practice in areas with few mental 

health providers or with high rates of death from overdose and 

would authorize $25 million per year over the 2019–2028 period for 

that purpose. Based on historical spending patterns for similar activities, CBO estimates that implementing H.R. 5102 would cost 

$100 million over the 2019–2023 period; the remaining amounts 

would be spent in years after 2023. 

H.R. 5176, the Preventing Overdoses While in Emergency Rooms 

Act of 2018, would require the Secretary of HHS to develop protocols and a grant program for health care providers to address the 

needs of people who survive a drug overdose, and it would authorize $50 million in 2019 for that purpose. Based on historical spending patterns for similar activities, CBO estimates that implementing H.R. 5176 would cost $50 million over the 2019–2023 period. 

H.R. 5197, the Alternatives to Opioids (ALTO) in the Emergency 

Department Act, would direct the Secretary of HHS to carry out a 

demonstration program for hospitals and emergency departments 

to develop alternative protocols for pain management that limit the 

use of opioids and would authorize $10 million annually in grants 

for fiscal years 2019 through 2021. Based on historical spending 

patterns for similar programs, CBO estimates that implementing 

H.R. 5197 would cost $30 million over the 2019–2023 period. 

H.R. 5261, the Treatment, Education, and Community Help to 

Combat Addiction Act of 2018, would direct the Secretary of HHS 

to designate regional centers of excellence to improve the training 

of health professionals who treat substance use disorders. The bill 

would authorize $4 million annually for grants to those programs 

over the 2019–2023 period. Based on historical spending patterns 

for similar activities, CBO estimates that implementing H.R. 5261 

would cost $16 million over the 2019–2023 period; the remaining 

amounts would be spent in years after 2023. 

H.R. 5327, the Comprehensive Opioid Recovery Centers Act of 

2018, would direct the Secretary of HHS to award grants to at 

least 10 providers that offer treatment services for people with 

opioid use disorder, and it would authorize $10 million per year 

over the 2019–2023 period for that purpose. Based on historical 

spending patterns for similar activities, CBO estimates that implementing H.R. 5327 would cost $41 million over the 2019–2023 period; the remaining amounts would be spent in years after 2023. 

H.R. 5329, the Poison Center Network Enhancement Act of 2018, 

would reauthorize the poison control center toll-free number, national media campaign, and grant program under the Public 

Health Service Act. Among other actions, H.R. 5329 would increase 

the share of poison control center funding that could be provided 

by federal grants. The bill would authorize a total of about $30 million per year over the 2019–2023 period. Based on historical spending patterns for similar activities, CBO estimates that implementing H.R. 5329 would cost $125 million over the 2019–2023 period; the remaining amounts would be spent in years after 2023. 

H.R 5353, the Eliminating Opioid Related Infectious Diseases Act 

of 2018, would amend the Public Health Service Act by broadening 

the focus of surveillance and education programs from preventing 

and treating hepatitis C virus to preventing and treating infections 

associated with injection drug use. It would authorize $40 million 


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per year over 2019–2023 period for that purpose. Based on historical spending patterns for similar activities, CBO estimates that 

implementing H.R. 5353 would cost $166 million over the 2019– 

2023 period; the remaining amounts would be spent in years after 

2023. 

H.R. 5580, the Surveillance and Testing of Opioids to Prevent 

Fentanyl Deaths Act of 2018, would establish a grant program for 

public health laboratories that conduct testing for fentanyl and 

other synthetic opioids. It also would direct the Centers for Disease 

Control and Prevention to expand its drug surveillance program, 

with a particular focus on collecting data on fentanyl. The bill 

would authorize a total of $30 million per year over the 2018–2022 

period for those activities. Based on historical spending patterns for 

similar activities, CBO estimates that implementing H.R. 5580 

would cost $113 million over the 2019–2023 period; the remaining 

amounts would be spent in years after 2023. 

H.R. 5587, Peer Support Communities of Recovery Act, would direct the Secretary of HHS to award grants to nonprofit organizations that support community-based, peer-delivered support, including technical support for the establishment of recovery community organizations, independent, nonprofit groups led by people in 

recovery and their families. The bill would authorize $15 million 

per year for the 2019–2023 period. Based on historical spending 

patterns for similar activities, CBO estimates that implementing 

H.R. 5587 would cost $62 million over the 2019–2023 period; the 

remaining amounts would be spent in years after 2023. 

Estimated Authorizations. Table 3 shows CBO’s estimates of the 

appropriations that would be necessary to implement 19 of the 

bills. Spending would be subject to appropriation of those amounts. 

H.R. 449, the Synthetic Drug Awareness Act of 2018, would require the Surgeon General to report to the Congress on the health 

effects of synthetic psychoactive drugs on children between the 

ages of 12 and 18. Based on spending patterns for similar activities, CBO estimates that implementing H.R. 449 would cost approximately $1 million over the 2019–2023 period. 

H.R. 4005, the Medicaid Reentry Act, would direct the Secretary 

of HHS to convene a group of stakeholders to develop and report 

to the Congress on best practices for addressing issues related to 

health care faced by those returning from incarceration to their 

communities. The bill also would require the Secretary to issue a 

letter to state Medicaid directors about relevant demonstration 

projects. Based on an analysis of anticipated workload, CBO estimates that implementing H.R. 4005 would cost less than $500,000 

over the 2018–2023 period. 

H.R. 4275, the Empowering Pharmacists in the Fight Against 

Opioid Abuse Act, would require the Secretary of HHS to develop 

and disseminate materials for training pharmacists, health care 

practitioners, and the public about the circumstances under which 

a pharmacist may decline to fill a prescription. Based on historical 

spending patterns for similar activities, CBO estimates that costs 

to the federal government for the development and distribution of 

those materials would not be significant. 


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TABLE 3.—ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR BILLS WITH ESTIMATED 

AUTHORIZATIONS 

By fiscal year, in millions of dollars— 

2018 2019 2020 2021 2022 2023 2019– 

2023 

INCREASES IN SPENDING SUBJECT TO APPROPRIATION 

H.R. 449, Synthetic Drug Awareness Act of 2018: 

Estimated Authorization Level .............................................. 0 * * * 0 0 1 

Estimated Outlays ................................................................. 0 * * * 0 0 1 

H.R. 4005, Medicaid Reentry Act: 

Estimated Authorization Level .............................................. * * 0 0 0 0 * 

Estimated Outlays ................................................................. * * 0 0 0 0 * 

H.R. 4275, Empowering Pharmacists in the Fight Against Opioid 

Abuse Act: 

Estimated Authorization Level .............................................. 0 * * * * * * 

Estimated Outlays ................................................................. 0 * * * * * * 

H.R. 5009, Jessie’s Law: 

Estimated Authorization Level .............................................. 0 * * * * * * 

Estimated Outlays ................................................................. 0 * * * * * * 

H.R. 5041, Safe Disposal of Unused Medication Act: 

Estimated Authorization Level .............................................. 0 * * * * * * 

Estimated Outlays ................................................................. 0 * * * * * * 

H.R. 5272, Reinforcing Evidence-Based Standards Under Law in 

Treating Substance Abuse Act of 2018: 

Estimated Authorization Level .............................................. 0 1 1 1 1 1 4 

Estimated Outlays ................................................................. 0 1 1 1 1 1 4 

H.R. 5333, Over-the-Counter Monograph Safety, Innovation, and 

Reform Act of 2018: a

Food and Drug Administration: 

Collections from fees: 

Estimated Authorization Level ............................ 0 ¥22 ¥22 ¥26 ¥35 ¥42 ¥147 

Estimated Outlays ............................................... 0 ¥22 ¥22 ¥26 ¥35 ¥42 ¥147 

Spending of fees: 

Estimated Authorization Level ............................ 0 22 22 26 35 42 147 

Estimated Outlays ............................................... 0 6 17 30 44 41 137 

Net effect on FDA: 

Estimated Authorization Level ............................ 0 0 0 0 0 0 0 

Estimated Outlays ............................................... 0 ¥17 ¥6 4 9 * ¥10 

Government Accountability Office: 

Estimated Authorization Level ..................................... 0 0 0 0 0 * * 

Estimated Outlays ........................................................ 0 0 0 0 0 * * 

Total, H.R. 5333: 

Estimated Authorization Level ..................................... 0 0 0 0 0 * * 

Estimated Outlays ........................................................ 0 ¥17 ¥6 4 9 * ¥10 

H.R. 5473, Better Pain Management Through Better Data Act of 

2018: 

Estimated Authorization Level .............................................. 0 * * * * 0 1 

Estimated Outlays ................................................................. 0 * * * * * 1 

H.R. 5483, Special Registration for Telemedicine Clarification 

Act of 2018: 

Estimated Authorization Level .............................................. 0 * * * * * * 

Estimated Outlays ................................................................. 0 * * * * * * 

H.R. 5554, Animal Drug and Animal Generic Drug User Fee 

Amendments of 2018: 

Collections from fees: 

Animal drug fees ......................................................... 0 ¥30 ¥31 ¥32 ¥33 ¥34 ¥159 

Generic animal drug fees ............................................ 0 ¥18 ¥19 ¥19 ¥20 ¥21 ¥97 

Total, Estimated Authorization Level .................. 0 ¥49 ¥50 ¥51 ¥53 ¥55 ¥257 

Total, Estimated Outlays ..................................... 0 ¥40 ¥50 ¥51 ¥53 ¥55 ¥257 

Spending of fees: 

Animal drug fees ......................................................... 0 30 31 32 33 34 159 

Generic animal drug fees ............................................ 0 18 19 19 20 21 97 

Total, Estimated Authorization Level .................. 0 49 50 51 53 55 257 

Total, Estimated Outlays ..................................... 0 39 47 51 52 54 243 


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TABLE 3.—ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR BILLS WITH ESTIMATED 

AUTHORIZATIONS—Continued 

By fiscal year, in millions of dollars— 

2018 2019 2020 2021 2022 2023 2019– 

2023 

Net changes in fees: 

Estimated Authorization Level ..................................... 0 0 0 0 0 0 0 

Estimated Outlays ........................................................ 0 ¥10 ¥3 * * * ¥14 

Other effects: 

Estimated Authorization Level ..................................... 0 3 1 1 1 1 6 

Estimated Outlays ........................................................ 0 2 1 1 1 1 6 

Total, H.R. 5554: 

Estimated Authorization Level ..................................... 0 3 1 1 1 1 6 

Estimated Outlays ........................................................ 0 ¥8 ¥2 1 * * ¥8 

H.R. 5582, Abuse Deterrent Access Act of 2018: 

Estimated Authorization Level .............................................. 0 0 * 0 0 0 * 

Estimated Outlays ................................................................. 0 0 * 0 0 0 * 

H.R. 5590, Opioid Addiction Action Plan Act: 

Estimated Authorization Level .............................................. * * * * * * 2 

Estimated Outlays ................................................................. * * * * * * 2 

H.R. 5687, Securing Opioids and Unused Narcotics with Deliberate Disposal and Packaging Act of 2018: 

Estimated Authorization Level .............................................. 0 * * * * * * 

Estimated Outlays ................................................................. 0 * * * * * * 

H.R. 5715, Strengthening Partnerships to Prevent Opioid Abuse 

Act: 

Estimated Authorization Level .............................................. 0 2 2 2 2 2 9 

Estimated Outlays ................................................................. 0 2 2 2 2 2 9 

H.R. 5789, a bill to require the Secretary of Health and Human 

Services to issue guidance to improve care for infants with 

neonatal abstinence syndrome and their mothers, and to require the Comptroller General of the United States to conduct 

a study on gaps in Medicaid coverage for pregnant and 

postpartum women with substance use disorder: 

Estimated Authorization Level .............................................. 0 2 0 0 0 0 2 

Estimated Outlays ................................................................. 0 2 0 0 0 0 2 

H.R. 5795, Overdose Prevention and Patient Safety Act: 

Estimated Authorization Level .............................................. 0 1 0 0 0 0 1 

Estimated Outlays ................................................................. 0 1 0 0 0 0 1 

H.R. 5800, Medicaid IMD ADDITIONAL INFO Act: 

Estimated Authorization Level .............................................. 0 1 0 0 0 0 1 

Estimated Outlays ................................................................. 0 * * 0 0 0 1 

H.R. 5804, Post-Surgical Injections as an Opioid Alternative 

Act: a

Estimated Authorization Level .............................................. 0 0 0 0 1 1 1 

Estimated Outlays ................................................................. 0 0 0 0 1 1 1 

H.R. 5811, a bill to amend the Federal Food, Drug, and Cosmetic Act with respect to postapproval study requirements 

for certain controlled substances, and for other purposes: 

Estimated Authorization Level .............................................. 0 * * * * * * 

Estimated Outlays ................................................................. 0 * * * * * * 

Annual amounts may not sum to totals because of rounding. * = between ¥$500,000 and $500,000. a This bill also would affect mandatory spending (see Table 1). 

H.R. 5009, Jessie’s Law, would require HHS, in collaboration 

with outside experts, to develop best practices for displaying information about opioid use disorder in a patient’s medical record. 

HHS also would be required to develop and disseminate written 

materials annually to health care providers about what disclosures 

could be made while still complying with federal laws that govern 

health care privacy. Based on spending patterns for similar activities, CBO estimates that implementing H.R. 5009 would have an 

insignificant effect on spending over the 2019–2023 period. 


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H.R. 5041, the Safe Disposal of Unused Medication Act, would require hospice programs to have written policies and procedures for 

the disposal of controlled substances after a patient’s death. Certain licensed employees of hospice programs would be permitted to 

assist in the disposal of controlled substances that were lawfully 

dispensed. Using information from the Department of Justice 

(DOJ), CBO estimates that implementing the bill would cost less 

than $500,000 over the 2019–2023 period. 

H.R. 5272, the Reinforcing Evidence-Based Standards Under Law 

in Treating Substance Abuse Act of 2018, would require the newly 

established National Mental Health and Substance Use Policy Laboratory to issue guidance to applicants for SAMHSA grants that 

support evidence-based practices. Using information from HHS 

about the historical cost of similar activities, CBO estimates that 

enacting this bill would cost approximately $4 million over the 

2019–2023 period. 

H.R. 5333, the Over-the-Counter Monograph Safety, Innovation, 

and Reform Act of 2018, would change the FDA’s oversight of the 

commercial marketing of OTC medicines and authorize the collection and spending of fees through 2023 to cover the costs of expediting the FDA’s administrative procedures for certain regulatory 

activities relating to OTC products. Under H.R. 5333, CBO estimates, the FDA would assess about $147 million in fees over the 

2019–2023 period that could be collected and made available for obligation only to the extent and in the amounts provided in advance 

in appropriation acts. Because the FDA could spend those fees, 

CBO estimates that the estimated budget authority for collections 

and spending would offset each other exactly in each year, although CBO expects that spending initially would lag behind collections. Assuming appropriation action consistent with the bill, 

CBO estimates that implementing H.R. 5333 would reduce net discretionary outlays by $10 million over the 2019–2023 period, primarily because of that lag. The bill also would require the Government Accountability Office to study exclusive market protections 

for certain qualifying OTC drugs authorized by the bill—a provision that CBO estimates would cost less than $500,000. (If enacted, 

H.R. 5333 also would affect mandatory spending; see Table 1.) 

H.R. 5473, the Better Pain Management Through Better Data Act 

of 2018, would require that the FDA conduct a public meeting and 

issue guidance to industry addressing data collection and labeling 

for medical products that reduce pain while enabling the reduction, 

replacement, or avoidance of oral opioids. Using information from 

the agency, CBO estimates that implementing H.R. 5473 would 

cost about $1 million over the 2019–2023 period. 

H.R. 5483, the Special Registration for Telemedicine Clarification 

Act of 2018, would direct DOJ, within one year of the bill’s enactment, to issue regulations concerning the practice of telemedicine 

(for remote diagnosis and treatment of patients). Using information 

from DOJ, CBO estimates that implementing the bill would cost 

less than $500,000 over the 2019–2023 period. 

H.R. 5554, the Animal Drug and Animal Generic Drug User Fee 

Amendments of 2018, would authorize the FDA to collect and spend 

fees to cover the cost of expedited approval for the development and 

marketing of certain drugs for use in animals. The legislation 

would extend through fiscal year 2023, and make several changes 


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to, the FDA’s existing approval processes and fee programs for 

brand-name and generic veterinary drugs, which expire at the end 

of fiscal year 2018. CBO estimates that implementing H.R. 5554 

would reduce net discretionary outlays by $8 million over the 

2019–2023 period, primarily because the spending of fees lags 

somewhat behind their collection. 

Fees authorized under the bill would supplement funds appropriated to cover the FDA’s cost of reviewing certain applications 

and investigational submissions for brand-name and generic drugs 

for use in animals. Those fees could be collected and made available for obligation only to the extent and in the amounts provided 

in advance in appropriation acts. Under H.R. 5554, CBO estimates, 

the FDA would assess about $257 million in fees over the 2019– 

2023 period. Because the FDA could spend those funds, CBO estimates that budget authority for collections and spending would offset each other exactly in each year. CBO estimates that the delay 

between collecting and spending fees under the reauthorized programs would reduce net discretionary outlays by $14 million over 

the 2019–2023 period, assuming appropriation actions consistent 

with the bill. 

Enacting H.R. 5554 would increase the FDA’s workload because 

the legislation would expand eligibility for conditional approval for 

certain drugs. The agency’s administrative costs also would increase because of regulatory activities required by a provision concerning petitions for additives intended for use in animal food. H.R. 

5554 also would require the FDA to publish guidance or produce 

regulations on a range of topics, transmit a report to the Congress, 

and hold public meetings. CBO expects that the costs associated 

with those activities would not be covered by fees, and it estimates 

that implementing such provisions would cost $6 million over the 

2019–2023 period. 

H.R. 5582, the Abuse Deterrent Access Act of 2018, would require 

the Secretary of HHS to report to the Congress on existing barriers 

to access to ‘‘abuse-deterrent opioid formulations’’ by Medicare Part 

C and D beneficiaries. Such formulations make the drugs more difficult to dissolve for injection, for example, and thus can impede 

their abuse. Assuming the availability of appropriated funds and 

based on historical spending patterns for similar activities, CBO estimates that implementing the legislation would cost less than 

$500,000 over the 2019–2023 period. 

H.R. 5590, the Opioid Addiction Action Plan Act, would require 

the Secretary of HHS to develop an action plan by January 1, 2019, 

for increasing access to medication-assisted treatment among Medicare and Medicaid enrollees. The bill also would require HHS to 

convene a stakeholder meeting and issue a request for information 

within three months of enactment, and to submit a report to the 

Congress by June 1, 2019. Based on historical spending patterns 

for similar activities, CBO estimates that implementing H.R. 5590 

would cost approximately $2 million over the 2019–2023 period. 

H.R. 5687, the Securing Opioids and Unused Narcotics with Deliberate Disposal and Packaging Act of 2018, would permit the FDA 

to require certain packaging and disposal technologies, controls, or 

measures to mitigate the risk of abuse and misuse of drugs. Based 

on information from the FDA, CBO estimates that implementing 

H.R. 5687 would not significantly affect spending over the 2019– 


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2023 period. This bill would also require that the GAO study the 

effectiveness and use of packaging technologies for controlled substances—a provision that CBO estimates would cost less than 

$500,000. 

H.R. 5715, the Strengthening Partnerships to Prevent Opioid 

Abuse Act, would require the Secretary of HHS to establish a secure Internet portal to allow HHS, Medicare Advantage plans, and 

Medicare Part D plans to exchange information about fraud, waste, 

and abuse among providers and suppliers no later than two years 

after enactment. H.R. 5715 also would require organizations with 

Medicare Advantage contracts to submit information on investigations related to providers suspected of prescribing large volumes of 

opioids through a process established by the Secretary no later 

than January 2021. Based on historical spending patterns for similar activities, CBO estimates that implementing H.R. 5715 would 

cost approximately $9 million over the 2019–2023 period. 

H.R. 5789, a bill to require the Secretary of Health and Human 

Services to issue guidance to improve care for infants with neonatal 

abstinence syndrome and their mothers, and to require the Comptroller General of the United States to conduct a study on gaps in 

Medicaid coverage for pregnant and postpartum women with substance use disorder, would direct the Secretary of HHS to issue 

guidance to states on best practices under Medicaid and CHIP for 

treating infants with neonatal abstinence syndrome. H.R. 5789 also 

would direct the Government Accountability Office to study Medicaid coverage for pregnant and postpartum women with substance 

use disorders. Based on information from HHS and historical 

spending patterns for similar activities, CBO estimates that enacting H.R. 5789 would cost approximately $2 million over the 2019– 

2023 period. 

H.R. 5795, the Overdose Prevention and Patient Safety Act, would 

amend the Public Health Service Act so that requirements pertaining to the confidentiality and disclosure of medical records relating to substance use disorders align with the provisions of the 

Health Insurance Portability and Accountability Act of 1996. The 

bill would require the Office of the Secretary of HHS to issue regulations prohibiting discrimination based on data disclosed from 

such medical records, to issue regulations requiring covered entities 

to provide written notice of privacy practices, and to develop model 

training programs and materials for health care providers and patients and their families. Based on spending patterns for similar 

activities, CBO estimates that implementing H.R. 5795 would cost 

approximately $1 million over the 2019–2023 period. 

H.R. 5800, Medicaid IMD ADDITIONAL INFO Act, would direct 

the Medicaid and CHIP Payment and Access Commission to study 

institutions for mental diseases in a representative sample of 

states. Based on information from the commission about the cost 

of similar work, CBO estimates that implementing H.R. 5800 

would cost about $1 million over the 2019–2023 period. 

H.R. 5804, the Post-Surgical Injections as an Opioid Alternative 

Act, would freeze the Medicare payment rate for certain analgesic 

injections provided in ambulatory surgical centers. The bill also 

would mandate two studies of Medicare coding and payments arising from enactment of this legislation. Based on the cost of similar 

activities, CBO estimates that those reports would cost $1 million 


dlhill on DSK3GLQ082PROD with HEARING
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over the 2019–2023 period. (If enacted, H.R. 5804 also would affect 

mandatory spending; see Table 1.) 

H.R. 5811, a bill to amend the Federal Food, Drug, and Cosmetic 

Act with respect to postapproval study requirements for certain controlled substances, and for other purposes, would allow the FDA to 

require that pharmaceutical manufacturers study certain drugs 

after they are approved to assess any potential reduction in those 

drugs’ effectiveness for the conditions of use prescribed, recommended, or suggested in labeling. CBO anticipates that implementing H.R. 5811 would not significantly affect the FDA’s costs 

over the 2019–2023 period. 

Other Authorizations. The following nine bills would increase authorization levels, but CBO has not completed estimates of 

amounts. All authorizations would be subject to future appropriation action. • H.R. 4284, Indexing Narcotics, Fentanyl, and Opioids Act 

of 2017 • H.R. 5002, Advancing Cutting Edge Research Act • H.R. 5228, Stop Counterfeit Drugs by Regulating and Enhancing Enforcement Now Act (see Table 1 for an estimate of 

the revenue effects of H.R. 5228) • H.R. 5752, Stop Illicit Drug Importation Act of 2018 (see 

Table 1 for an estimate of the revenue effects of H.R. 5752) • H.R. 5799, Medicaid DRUG Improvement Act (see Table 1 

for an estimate of the direct spending effects of H.R. 5799) • H.R. 5801, Medicaid Providers and Pharmacists Are Required to Note Experiences in Record Systems to Help In-Need 

Patients (PARTNERSHIP) Act (see Table 1 for an estimate of 

the direct spending effects of H.R. 5801) • H.R. 5806, 21st Century Tools for Pain and Addiction 

Treatments Act • H.R. 5808, Medicaid Pharmaceutical Home Act of 2018 

(see Table 1 for an estimate of the direct spending effects of 

H.R. 5808) 

• H.R. 5812, Creating Opportunities that Necessitate New 

and Enhanced Connections That Improve Opioid Navigation 

Strategies Act (CONNECTIONS) Act 

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act 

of 2010 establishes budget-reporting and enforcement procedures 

for legislation affecting direct spending or revenues. Twenty-two of 

the bills discussed in this document contain direct spending or revenues and are subject to pay-as-you-go procedures. Details about 

the amount of direct spending and revenues in those bills can be 

found in Table 1. 

Increase in long-term direct spending and deficits: CBO estimates that enacting H.R. 4998, the Health Insurance for Former 

Foster Youth Act, would increase net direct spending by more than 

$2.5 billion and on-budget deficits by more than $5 billion in at 

least one of the four consecutive 10-year periods beginning in 2029. 

CBO estimates that none of the remaining 58 bills included in 

this estimate would increase net direct spending by more than $2.5 

billion or on-budget deficits by more than $5 billion in any of the 

four consecutive 10-year periods beginning in 2029. 

Mandates: One of the 59 bills included in this document, H.R. 

5795, would impose both intergovernmental and private-sector 


dlhill on DSK3GLQ082PROD with HEARING
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mandates as defined in UMRA. CBO estimates that the costs of 

that bill’s mandates on public and private entities would fall below 

UMRA’s thresholds ($80 million and $160 million, respectively, for 

public- and private-sector entities in 2018, adjusted annually for inflation). 

In addition, five bills would impose private-sector mandates as 

defined in UMRA. CBO estimates that the costs of the mandates 

in three of those bills (H.R. 5333, H.R. 5554, and H.R. 5811) would 

fall below the UMRA threshold. Because CBO does not know how 

federal agencies would implement new authority granted in the 

other two of those five bills, H.R. 5228 and 5687, CBO cannot determine whether the costs of their mandates would exceed the 

threshold. 

For large entitlement grant programs, including Medicaid and 

CHIP, UMRA defines an increase in the stringency of conditions on 

states or localities as an intergovernmental mandate if the affected 

governments lack authority to offset those costs while continuing to 

provide required services. Because states possess significant flexibility to alter their responsibilities within Medicaid and CHIP, the 

requirements imposed by various bills in the markup on state administration of those programs would not constitute mandates as 

defined in UMRA. 

Mandates Affecting Public and Private Entities 

H.R. 5795, the Overdose Prevention and Patient Safety Act, would 

impose intergovernmental and private-sector mandates by requiring entities that provide treatment for substance use disorders to 

notify patients of their privacy rights and also to notify patients in 

the event that the confidentiality of their records is breached. In 

certain circumstances, H.R. 5795 also would prohibit public and 

private entities from denying entry to treatment on the basis of information in patient health records. Those requirements would either supplant or narrowly expand responsibilities under existing 

law, and compliance with them would not impose significant additional costs. CBO estimates that the costs of the mandates would 

fall below the annual thresholds established in UMRA. 

Mandates Affecting Private Entities 

Five bills included in this document would impose private-sector 

mandates: 

H.R. 5228, the Stop Counterfeit Drugs by Regulating and Enhancing Enforcement Now Act, would require drug distributors to 

cease distributing any drug that the Secretary of HHS determines 

might present an imminent or substantial hazard to public health. 

CBO cannot determine what drugs could be subject to such an 

order nor can it determine how private entities would respond. 

Consequently, CBO cannot determine whether the aggregate cost 

of the mandate would exceed the annual threshold for private-sector mandates. 

H.R. 5333, the Over-the-Counter Monograph Safety, Innovation, 

and Reform Act of 2018, would require developers and manufacturers of OTC drugs to pay certain fees to the FDA. CBO estimates 

that about $30 million would be collected each year, on average, for 

a total of $147 million over the 2019–2023 period. Those amounts 


dlhill on DSK3GLQ082PROD with HEARING
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would not exceed the annual threshold for private-sector mandates 

in any year during that period. 

H.R. 5554, the Animal Drug and Animal Generic Drug User Fee 

Amendments of 2018, would require developers and manufacturers 

of brand-name and generic veterinary drugs to pay application, 

product, establishment, and sponsor fees to the FDA. CBO estimates that about $51 million would be collected annually, on average, for a total of $257 million over the 2019–2023 period. Those 

amounts would not exceed the annual threshold for private-sector 

mandates in any year during that period. 

H.R. 5687, the Securing Opioids and Unused Narcotics with Deliberate Disposal and Packaging Act of 2018, would permit the Secretary of HHS to require drug developers and manufacturers to implement new packaging and disposal technology for certain drugs. 

Based on information from the agency, CBO expects that the Secretary would use the new regulatory authority provided in the bill; 

however, it is uncertain how or when those requirements would be 

implemented. Consequently, CBO cannot determine whether the 

aggregate cost of the mandate would exceed the annual threshold 

for private entities. 

H.R. 5811, a bill to amend the Federal Food, Drug, and Cosmetic 

Act with respect to postapproval study requirements for certain controlled substances, and for other purposes, would expand an existing mandate that requires drug developers to conduct postapproval 

studies or clinical trials for certain drugs. Under current law, in 

certain instances, the FDA can require studies or clinical trials 

after a drug has been approved. H.R. 5811 would permit the FDA 

to use that authority if the reduction in a drug’s effectiveness 

meant that its benefits no longer outweighed its costs. CBO estimates that the incremental cost of the mandate would fall below 

the annual threshold established in UMRA because of the small 

number of drugs affected and the narrow expansion of the authority that exists under current law. 

None of the remaining 53 bills included in this document would 

impose an intergovernmental or private-sector mandate. 

Previous CBO estimate: On June 6, 2018, CBO issued an estimate for seven opioid-related bills ordered reported by the House 

Committee on Ways and Means on May 16, 2018. Two of those bills 

contain provisions that are identical or similar to the legislation ordered reported by the Committee on Energy and Commerce, and 

for those provisions, CBO’s estimates are the same. 

In particular, five bills listed in this estimate contain provisions 

that are identical or similar to those in several sections of H.R. 

5773, the Preventing Addiction for Susceptible Seniors Act of 2018: 

• H.R. 5675, which would require prescription drug plans to 

implement drug management programs, is identical to section 2 of 

H.R. 5773. 

• H.R. 4841, regarding electronic prior authorization for prescriptions under Medicare’s Part D, is similar to section 3 of H.R. 

5773. 

• H.R. 5715, which would mandate the creation of a new Internet portal to allow various stakeholders to exchange information, 

is identical to section 4 of H.R. 5773. 

• H.R. 5684, which would expand medication therapy management, is the same as section 5 of H.R. 5773. 


dlhill on DSK3GLQ082PROD with HEARING
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• H.R. 5716, regarding prescriber notification, is identical to 

section 6 of H.R. 5773. 

In addition, in this estimate, a provision related to Medicare beneficiary education in H.R. 5686, the Medicare Clear Health Options 

in Care for Enrollees Act of 2018, is the same as a provision in section 2 of H.R. 5775, the Providing Reliable Options for Patients and 

Educational Resources Act of 2018, in CBO’s estimate for the Committee on Ways and Means. 

Estimate prepared by: Federal Costs: Rebecca Yip (Centers for 

Disease Control and Prevention), Mark Grabowicz (Drug Enforcement Agency), Julia Christensen, Ellen Werble (Food and Drug Administration), Emily King, Andrea Noda, Lisa Ramirez-Branum, 

Robert Stewart (Medicaid and Children’s Health Insurance Program), Philippa Haven, Lara Robillard, Colin Yee, Rebecca Yip 

(Medicare), Philippa Haven (National Institutes of Health), Alice 

Burns, Andrea Noda (Office of the Secretary of the Department of 

Health and Human Services), Philippa Haven, Lori Housman, 

Emily King (Substance Abuse and Mental Health Services Administration, Health Resources and Services Administration); Federal 

Revenues: Jacob Fabian, Peter Huether, and Cecilia Pastrone; Fact 

Checking: Zachary Byrum and Kate Kelly; Mandates: Andrew 

Laughlin. 

Estimate reviewed by: Tom Bradley, Chief, Health Systems and 

Medicare Cost Estimates Unit; Chad M. Chirico, Chief, Low-Income 

Health Programs and Prescription Drugs Cost Estimates Unit; 

Sarah Masi, Special Assistant for Health; Susan Willie, Chief, 

Mandates Unit; Leo Lex, Deputy Assistant Director for Budget 

Analysis; Theresa A. Gullo, Assistant Director for Budget Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII, the general performance 

goal or objective of this legislation is to authorize a demonstration 

project to expand treatment capacity of current and new Medicaid 

providers. 

DUPLICATION OF FEDERAL PROGRAMS

Pursuant to clause 3(c)(5) of rule XIII, no provision of H.R. 5477 

is known to be duplicative of another Federal program, including 

any program that was included in a report to Congress pursuant 

to section 21 of Public Law 111–139 or the most recent Catalog of 

Federal Domestic Assistance. 

COMMITTEE COST ESTIMATE

Pursuant to clause 3(d)(1) of rule XIII, the Committee adopts as 

its own the cost estimate prepared by the Director of the Congressional Budget Office pursuant to section 402 of the Congressional 

Budget Act of 1974. 


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EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the Committee 

finds that H.R. 5477 contains no earmarks, limited tax benefits, or 

limited tariff benefits. 

DISCLOSURE OF DIRECTED RULE MAKINGS

Pursuant to section 3(i) of H.Res. 5, the Committee finds that 

H.R. 5477 contains no directed rule makings. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

Section 1 provides that the Act may be cited as the ‘‘Rural Development of Opioid Capacity Services Act’’ or the ‘‘Rural DOCS Act.’’ 

Section 2. Demonstration project to increase substance use provider 

capacity under the Medicaid Program 

Section 2 amends section 1903 of the Social Security Act. Section 

2 authorizes a demonstration project to expand treatment capacity 

of current and new Medicaid providers through expanding technical assistance to Medicaid providers for Medicaid billing and substance use disorder education and allowing states to receive enhanced matching dollars to raise reimbursement rates for providers 

delivering SUD services. Section 2 includes planning grants for at 

least ten states to develop applications for the demonstration 

project and recruit prospective Medicaid providers. 

Section 2 allows for five states to participate in the demonstration and receive an enhanced FMAP. These five states would be eligible to receive an 80 percent match for new spending on activities 

in the demonstration. 

Finally, section 2 requires the states and CMS to conduct robust 

evaluations of the demonstrations and requires a report detailing 

best practices. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italic 

and existing law in which no change is proposed is shown in 

roman): 


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SOCIAL SECURITY ACT 

* * * * * * * 

TITLE XIX—GRANTS TO STATES FOR MEDICAL ASSISTANCE 

PROGRAMS 

* * * * * * * 

PAYMENT TO STATES

SEC. 1903. (a) From the sums appropriated therefor, the Secretary (except as otherwise provided in this section) shall pay to 

each State which has a plan approved under this title, for each 

quarter, beginning with the quarter commencing January 1, 1966— 

(1) an amount equal to the Federal medical assistance percentage (as defined in section 1905(b), subject to subsections (g) 

and (j) of this section and subsection 1923(f)) of the total 

amount expended during such quarter as medical assistance 

under the State plan; plus 

(2)(A) an amount equal to 75 per centum 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 compensation or training of 

skilled professional medical personnel, and staff directly supporting such personnel, of the State agency or any other public 

agency; plus 

(B) notwithstanding paragraph (1) or subparagraph (A), with 

respect to amounts expended for nursing aide training and 

competency evaluation programs, and competency evaluation 

programs, described in section 1919(e)(1) (including the costs 

for nurse aides to complete such competency evaluation programs), regardless of whether the programs are provided in or 

outside nursing facilities or of the skill of the personnel involved in such programs, an amount equal to 50 percent (or, 

for calendar quarters beginning on or after July 1, 1988, and 

before October 1, 1990, the lesser of 90 percent or the Federal 

medical assistance percentage plus 25 percentage points) 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 programs; 

plus 

(C) 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 preadmission screening and resident review activities conducted by the State under section 

1919(e)(7); plus 

(D) for each calendar quarter during— 

(i) fiscal year 1991, an amount equal to 90 percent, 

(ii) fiscal year 1992, an amount equal to 85 percent, 

(iii) fiscal year 1993, an amount equal to 80 percent, and 

(iv) fiscal year 1994 and thereafter, 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 


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administration of the State plan) as are attributable to State 

activities under section 1919(g); plus 

(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 

(3) an amount equal to— 

(A)(i) 90 per centum of so much of the sums expended 

during such quarter as are attributable to the design, development, or installation of such mechanized claims processing and information retrieval systems as the Secretary 

determines are likely to provide more efficient, economical, 

and effective administration of the plan and to be compatible with the claims processing and information retrieval 

systems utilized in the administration of title XVIII, including the State’s share of the cost of installing such a 

system to be used jointly in the administration of such 

State’s plan and the plan of any other State approved 

under this title, 

(ii) 90 per centum of so much of the sums expended during any such quarter in the fiscal year ending June 30, 

1972, or the fiscal year ending June 30, 1973, as are attributable to the design, development, or installation of 

cost determination systems for State-owned general hospitals (except that the total amount paid to all States 

under this clause for either such fiscal year shall not exceed $150,000), and 

(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 

(B) 75 per centum of so much of the sums expended during such quarter as are attributable to the operation of 

systems (whether such systems are operated directly by 

the State or by another person under a contract with the 

State) of the type described in subparagraph (A)(i) (whether or not designed, developed, or installed with assistance 

under such subparagraph) which are approved by the Secretary and which include provision for prompt written notice to each individual who is furnished services covered by 

the plan, or to each individual in a sample group of individuals who are furnished such services, of the specific 

services (other than confidential services) so covered, the 

name of the person or persons furnishing the services, the 

date or dates on which the services were furnished, and 

the amount of the payment or payments made under the 

plan on account of the services; and 


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(C)(i) 75 per centum of the sums expended with respect 

to costs incurred during such quarter (as found necessary 

by the Secretary for the proper and efficient administration of the State plan) as are attributable to the performance of medical and utilization review by a utilization and 

quality control peer review organization or by an entity 

which meets the requirements of section 1152, as determined by the Secretary, under a contract entered into 

under section 1902(d); and 

(ii) 75 percent of the sums expended with respect to 

costs incurred during such quarter (as found necessary by 

the Secretary for the proper and efficient administration of 

the State plan) as are attributable to the performance of 

independent external reviews conducted under section 

1932(c)(2); and 

(D) 75 percent of so much of the sums expended by the 

State plan during a quarter in 1991, 1992, or 1993, as the 

Secretary determines is attributable to the statewide adoption of a drug use review program which conforms to the 

requirements of section 1927(g); 

(E) 50 percent of the sums expended with respect to 

costs incurred during such quarter as are attributable to 

providing— 

(i) services to identify and educate individuals who 

are likely to be eligible for medical assistance under 

this title and who have Sickle Cell Disease or who are 

carriers of the sickle cell gene, including education regarding how to identify such individuals; or 

(ii) education regarding the risks of stroke and other 

complications, as well as the prevention of stroke and 

other complications, in individuals who are likely to be 

eligible for medical assistance under this title and who 

have Sickle Cell Disease; and 

(F)(i) 100 percent of so much of the sums expended during such quarter as are attributable to payments to Medicaid providers described in subsection (t)(1) to encourage 

the adoption and use of certified EHR technology; and 

(ii) 90 percent of so much of the sums expended during 

such quarter as are attributable to payments for reasonable administrative expenses related to the administration 

of payments described in clause (i) if the State meets the 

condition described in subsection (t)(9); plus 

(H)(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 

(4) an amount equal to 100 percent of the sums expended 

during the quarter which are attributable to the costs of the 

implementation and operation of the immigration status 

verification system described in section 1137(d); plus 


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(5) an amount equal to 90 per centum of the sums expended 

during such quarter which are attributable to the offering, arranging, and furnishing (directly or on a contract basis) of family planning services and supplies; 

(6) subject to subsection (b)(3), an amount equal to— 

(A) 90 per centum of the sums expended during such a 

quarter within the twelve-quarter period beginning with 

the first quarter in which a payment is made to the State 

pursuant to this paragraph, and 

(B) 75 per centum of the sums expended during each 

succeeding calendar quarter, 

with respect to costs incurred during such quarter (as found 

necessary by the Secretary for the elimination of fraud in the 

provision and administration of medical assistance provided 

under the State plan) which are attributable to the establishment and operation of (including the training of personnel employed by) a State medicaid fraud control unit (described in 

subsection (q)); plus 

(7) subject to section 1919(g)(3)(B), an amount equal to 50 

per centum of the remainder of the amounts expended during 

such quarter as found necessary by the Secretary for the proper and efficient administration of the State plan. 

(b)(1) Notwithstanding the preceding provisions of this section, 

the amount determined under subsection (a)(1) for any State for 

any quarter beginning after December 31, 1969, shall not take into 

account any amounts expended as medical assistance with respect 

to individuals aged 65 or over and disabled individuals entitled to 

hospital insurance benefits under title XVIII which would not have 

been so expended if the individuals involved had been enrolled in 

the insurance program established by part B of title XVIII, other 

than amounts expended under provisions of the plan of such State 

required by section 1902(a)(34). 

(2) For limitation on Federal participation for capital expenditures which are out of conformity with a comprehensive plan of a 

State or areawide planning agency, see section 1122. 

(3) The amount of funds which the Secretary is otherwise obligated to pay a State during a quarter under subsection (a)(6) may 

not exceed the higher of— 

(A) $125,000, or 

(B) one-quarter of 1 per centum of the sums expended by the 

Federal, State, and local governments during the previous 

quarter in carrying out the State’s plan under this title. 

(4) Amounts expended by a State for the use of an enrollment 

broker in marketing medicaid managed care organizations and 

other managed care entities to eligible individuals under this title 

shall be considered, for purposes of subsection (a)(7), to be necessary for the proper and efficient administration of the State plan 

but only if the following conditions are met with respect to the 

broker: 

(A) The broker is independent of any such entity and of any 

health care providers (whether or not any such provider participates in the State plan under this title) that provide coverage of services in the same State in which the broker is conducting enrollment activities. 


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(B) No person who is an owner, employee, consultant, or has 

a contract with the broker either has any direct or indirect financial interest with such an entity or health care provider or 

has been excluded from participation in the program under 

this title or title XVIII or debarred by any Federal agency, or 

subject to a civil money penalty under this Act. 

(5) Notwithstanding the preceding provisions of this section, the 

amount determined under subsection (a)(1) for any State shall be 

decreased in a quarter by the amount of any health care related 

taxes (described in section 1902(w)(3)(A)) that are imposed on a 

hospital described in subsection (w)(3)(F) in that quarter. 

(c) Nothing in this title shall be construed as prohibiting or restricting, or authorizing the Secretary to prohibit or restrict, payment under subsection (a) for medical assistance for covered services furnished to a child with a disability because such services are 

included in the child’s individualized education program established pursuant to part B of the Individuals with Disabilities Education Act or furnished to an infant or toddler with a disability because such services are included in the child’s individualized family 

service plan adopted pursuant to part C of such Act. 

(d)(1) Prior to the beginning of each quarter, the Secretary shall 

estimate the amount to which a State will be entitled under subsections (a) and (b) for such quarter, such estimates to be based on 

(A) a report filed by the State containing its estimate of the total 

sum to be expended in such quarter in accordance with the provisions of such subsections, and stating the amount appropriated or 

made available by the State and its political subdivisions for such 

expenditures in such quarter, and if such amount is less than the 

State’s proportionate share of the total sum of such estimated expenditures, the source or sources from which the difference is expected to be derived, and (B) such other investigation as the Secretary may find necessary. 

(2)(A) The Secretary shall then pay to the State, in such installments as he may determine, the amount so estimated, reduced or 

increased to the extent of any overpayment or underpayment which 

the Secretary determines was made under this section to such 

State for any prior quarter and with respect to which adjustment 

has not already been made under this subsection. 

(B) Expenditures for which payments were made to the State 

under subsection (a) shall be treated as an overpayment to the extent that the State or local agency administering such plan has 

been reimbursed for such expenditures by a third party pursuant 

to the provisions of its plan in compliance with section 1902(a)(25). 

(C) For purposes of this subsection, when an overpayment is discovered, which was made by a State to a person or other entity, 

the State shall have a period of 1 year in which to recover or attempt to recover such overpayment before adjustment is made in 

the Federal payment to such State on account of such overpayment. Except as otherwise provided in subparagraph (D), the adjustment in the Federal payment shall be made at the end of the 

1-year period, whether or not recovery was made. 

(D)(i) In any case where the State is unable to recover a debt 

which represents an overpayment (or any portion thereof) made to 

a person or other entity on account of such debt having been discharged in bankruptcy or otherwise being uncollectable, no adjustVerDate Sep 11 2014 08:07 Jun 16, 2018 Jkt 079006 PO 00000 Frm 00037 Fmt 6659 Sfmt 6602 E:\HR\OC\HR731.XXX HR731

dlhill on DSK3GLQ082PROD with HEARING
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ment shall be made in the Federal payment to such State on account of such overpayment (or portion thereof). 

(ii) In any case where the State is unable to recover a debt which 

represents an overpayment (or any portion thereof) made to a person or other entity due to fraud within 1 year of discovery because 

there is not a final determination of the amount of the overpayment under an administrative or judicial process (as applicable), including as a result of a judgment being under appeal, no adjustment shall be made in the Federal payment to such State on account of such overpayment (or portion thereof) before the date that 

is 30 days after the date on which a final judgment (including, if 

applicable, a final determination on an appeal) is made. 

(3)(A) The pro rata share to which the United States is equitably 

entitled, as determined by the Secretary, of the net amount recovered during any quarter by the State or any political subdivision 

thereof with respect to medical assistance furnished under the 

State plan shall be considered an overpayment to be adjusted 

under this subsection. 

(B)(i) Subparagraph (A) and paragraph (2)(B) shall not apply to 

any amount recovered or paid to a State as part of the comprehensive settlement of November 1998 between manufacturers of tobacco products, as defined in section 5702(d) of the Internal Revenue Code of 1986, and State Attorneys General, or as part of any 

individual State settlement or judgment reached in litigation initiated or pursued by a State against one or more such manufacturers. 

(ii) Except as provided in subsection (i)(19), a State may use 

amounts recovered or paid to the State as part of a comprehensive 

or individual settlement, or a judgment, described in clause (i) for 

any expenditures determined appropriate by the State. 

(4) Upon the making of any estimate by the Secretary under this 

subsection, any appropriations available for payments under this 

section shall be deemed obligated. 

(5) In any case in which the Secretary estimates that there has 

been an overpayment under this section to a State on the basis of 

a claim by such State that has been disallowed by the Secretary 

under section 1116(d), and such State disputes such disallowance, 

the amount of the Federal payment in controversy shall, at the option of the State, be retained by such State or recovered by the Secretary pending a final determination with respect to such payment 

amount. If such final determination is to the effect that any 

amount was properly disallowed, and the State chose to retain payment of the amount in controversy, the Secretary shall offset, from 

any subsequent payments made to such State under this title, an 

amount equal to the proper amount of the disallowance plus interest on such amount disallowed for the period beginning on the date 

such amount was disallowed and ending on the date of such final 

determination at a rate (determined by the Secretary) based on the 

average of the bond equivalent of the weekly 90-day treasury bill 

auction rates during such period. 

(6)(A) Each State (as defined in subsection (w)(7)(D)) shall include, in the first report submitted under paragraph (1) after the 

end of each fiscal year, information related to— 

(i) provider-related donations made to the State or units of 

local government during such fiscal year, and 


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(ii) health care related taxes collected by the State or such 

units during such fiscal year. 

(B) Each State shall include, in the first report submitted under 

paragraph (1) after the end of each fiscal year, information related 

to the total amount of payment adjustments made, and the amount 

of payment adjustments made to individual providers (by provider), 

under section 1923(c) during such fiscal year. 

(e) A State plan approved under this title may include, as a cost 

with respect to hospital services under the plan under this title, 

periodic expenditures made to reflect transitional allowances established with respect to a hospital closure or conversion under section 

1884. 

(f)(1)(A) Except as provided in paragraph (4), payment under the 

preceding provisions of this section shall not be made with respect 

to any amount expended as medical assistance in a calendar quarter, in any State, for any member of a family the annual income 

of which exceeds the applicable income limitation determined 

under this paragraph. 

(B)(i) Except as provided in clause (ii) of this subparagraph, the 

applicable income limitation with respect to any family is the 

amount determined, in accordance with standards prescribed by 

the Secretary, to be equivalent to 1331⁄3 percent of the highest 

amount which would ordinarily be paid to a family of the same size 

without any income or resources, in the form of money payments, 

under the plan of the State approved under part A of title IV of 

this Act. 

(ii) If the Secretary finds that the operation of a uniform maximum limits payments to families of more than one size, he may 

adjust the amount otherwise determined under clause (i) to take 

account of families of different sizes. 

(C) The total amount of any applicable income limitation deter- mined under subparagraph (B) shall, if it is not a multiple of $100 

or such other amount as the Secretary may prescribe, be rounded 

to the next higher multiple of $100 or such other amount, as the 

case may be. 

(2)(A) In computing a family’s income for purposes of paragraph 

(1), there shall be excluded any costs (whether in the form of insurance premiums or otherwise and regardless of whether such costs 

are reimbursed under another public program of the State or political subdivision thereof) incurred by such family for medical care 

or for any other type of remedial care recognized under State law 

or, (B) notwithstanding section 1916 at State option, an amount 

paid by such family, at the family’s option, to the State, provided 

that the amount, when combined with costs incurred in prior 

months, is sufficient when excluded from the family’s income to reduce such family’s income below the applicable income limitation 

described in paragraph (1). The amount of State expenditures for 

which medical assistance is available under subsection (a)(1) will 

be reduced by amounts paid to the State pursuant to this subparagraph. 

(3) For purposes of paragraph (1)(B), in the case of a family consisting of only one individual, the ‘‘highest amount which would ordinarily be paid’’ to such family under the State’s plan approved 

under part A of title IV of this Act shall be the amount determined 

by the State agency (on the basis of reasonable relationship to the 


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amounts payable under such plan to families consisting of two or 

more persons) to be the amount of the aid which would ordinarily 

be payable under such plan to a family (without any income or resources) consisting of one person if such plan provided for aid to 

such a family. 

(4) The limitations on payment imposed by the preceding provisions of this subsection shall not apply with respect to any amount 

expended by a State as medical assistance for any individual described in section 1902(a)(10)(A)(i)(III), 1902(a)(10)(A)(i)(IV), 

1902(a)(10)(A)(i)(V), 1902(a)(10)(A)(i)(VI), 1902(a)(10)(A)(i)(VII), 

1902(a)(10)(A)(i)(VIII),1902(a)(10)(A)(i)(IX), 1902(a)(10)(A)(ii)(IX), 

1902(a)(10)(A)(ii)(X), 1902(a)(10)(A)(ii)(XIII), 1902(a)(10)(A)(ii)(XIV), 

or 1902(a)(10)(A)(ii)(XV), 1902(a)(10)(A)(ii)(XVI), 

1902(a)(10)(A)(ii)(XVII), 1902(a)(10)(A)(ii)(XVIII), 

1902(a)(10)(A)(ii)(XIX), 1902(a)(10)(A)(ii)(XX), 

1902(a)(10)(A)(ii)(XXI), 1902(a)(10)(A)(ii)(XXII), 1905(p)(1) or for 

any individual— 

(A) who is receiving aid or assistance under any plan of the 

State approved under title I, X, XIV or XVI, or part A of title 

IV, or with respect to whom supplemental security income benefits are being paid under title XVI, or 

(B) who is not receiving such aid or assistance, and with respect to whom such benefits are not being paid, but (i) is eligible to receive such aid or assistance, or to have such benefits 

paid with respect to him, or (ii) would be eligible to receive 

such aid or assistance, or to have such benefits paid with respect to him if he were not in a medical institution, or 

(C) with respect to whom there is being paid, or who is eligible, or would be eligible if he were not in a medical institution, 

to have paid with respect to him, a State supplementary payment and is eligible for medical assistance equal in amount, 

duration, and scope to the medical assistance made available 

to individuals described in section 1902(a)(10)(A), or who is a 

PACE program eligible individual enrolled in a PACE program 

under section 1934, but only if the income of such individual 

(as determined under section 1612, but without regard to subsection (b) thereof) does not exceed 300 percent of the supplemental security income benefit rate established by section 

1611(b)(1), 

at the time of the provision of the medical assistance giving rise 

to such expenditure. 

(g)(1) Subject to paragraph (3), with respect to amounts paid for 

the following services furnished under the State plan after June 30, 

1973 (other than services furnished pursuant to a contract with a 

health maintenance organization as defined in section 1876 or 

which is a qualified health maintenance organization (as defined in 

section 1310(d) of the Public Health Service Act)), the Federal medical assistance percentage shall be decreased as follows: After an 

individual has received inpatient hospital services or services in an 

intermediate care facility for the mentally retarded for 60 days or 

inpatient mental hospital services for 90 days (whether or not such 

days are consecutive), during any fiscal year, the Federal medical 

assistance percentage with respect to amounts paid for any such 

care furnished thereafter to such individual shall be decreased by 

a per centum thereof (determined under paragraph (5)) unless the 


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State agency responsible for the administration of the plan makes 

a showing satisfactory to the Secretary that, with respect to each 

calendar quarter for which the State submits a request for payment at the full Federal medical assistance percentage for amounts 

paid for inpatient hospital services or services in an intermediate 

care facility for the mentally retarded furnished beyond 60 days (or 

inpatient mental hospital services furnished beyond 90 days), such 

State has an effective program of medical review of the care of patients in mental hospitals and intermediate care facilities for the 

mentally retarded pursuant to paragraphs (26) and (31) of section 

1902(a) whereby the professional management of each case is reviewed and evaluated at least annually by independent professional review teams. In determining the number of days on which 

an individual has received services described in this subsection, 

there shall not be counted any days with respect to which such individual is entitled to have payments made (in whole or in part) 

on his behalf under section 1812. 

(2) The Secretary shall, as part of his validation procedures 

under this subsection, conduct timely sample onsite surveys of private and public institutions in which recipients of medical assistance may receive care and services under a State plan approved 

under this title, and his findings with respect to such surveys (as 

well as the showings of the State agency required under this subsection) shall be made available for public inspection. 

(3)(A) No reduction in the Federal medical assistance percentage 

of a State otherwise required to be imposed under this subsection 

shall take effect— 

(i) if such reduction is due to the State’s unsatisfactory or invalid showing made with respect to a calendar quarter beginning before January 1, 1977; 

(ii) before January 1, 1978; 

(iii) unless a notice of such reduction has been provided to 

the State at least 30 days before the date such reduction takes 

effect; or 

(iv) due to the State’s unsatisfactory or invalid showing made 

with respect to a calendar quarter beginning after September 

30, 1977, unless notice of such reduction has been provided to 

the State no later than the first day of the fourth calendar 

quarter following the calendar quarter with respect to which 

such showing was made. 

(B) The Secretary shall waive application of any reduction in the 

Federal medical assistance percentage of a State otherwise required to be imposed under paragraph (1) because a showing by the 

State, made under such paragraph with respect to a calendar quarter ending after January 1, 1977, and before January 1, 1978, is 

determined to be either unsatisfactory under such paragraph or invalid under paragraph (2), if the Secretary determines that the 

State’s showing made under paragraph (1) with respect to any calendar quarter ending on or before December 31, 1978, is satisfactory under such paragraph and is valid under paragraph (2). 

(4)(A) The Secretary may not find the showing of a State, with 

respect to a calendar quarter under paragraph (1), to be satisfactory if the showing is submitted to the Secretary later than the 

30th day after the last day of the calendar quarter, unless the 


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State demonstrates to the satisfaction of the Secretary good cause 

for not meeting such deadline. 

(B) The Secretary shall find a showing of a State, with respect 

to a calendar quarter under paragraph (1), to be satisfactory under 

such paragraph with respect to the requirement that the State conduct annual onsite inspections in mental hospitals and intermediate care facilities for the mentally retarded under paragraphs 

(26) and (31) of section 1902(a), if the showing demonstrates that 

the State has conducted such an onsite inspection during the 12- 

month period ending on the last date of the calendar quarter— 

(i) in each of not less than 98 per centum of the number of 

such hospitals and facilities requiring such inspection, and 

(ii) in every such hospital or facility which has 200 or more 

beds, 

and that, with respect to such hospitals and facilities not inspected 

within such period, the State has exercised good faith and due diligence in attempting to conduct such inspection, or if the State demonstrates to the satisfaction of the Secretary that it would have 

made such a showing but for failings of a technical nature only. 

(5) In the case of a State’s unsatisfactory or invalid showing 

made with respect to a type of facility or institutional services in 

a calendar quarter, the per centum amount of the reduction of the 

State’s Federal medical assistance percentage for that type of services under paragraph (1) is equal to 331⁄3 per centum multiplied by 

a fraction, the denominator of which is equal to the total number 

of patients receiving that type of services in that quarter under the 

State plan in facilities or institutions for which a showing was required to be made under this subsection, and the numerator of 

which is equal to the number of such patients receiving such type 

of services in that quarter in those facilities or institutions for 

which a satisfactory and valid showing was not made for that calendar quarter. 

(6)(A) Recertifications required under section 1902(a)(44) shall be 

conducted at least every 60 days in the case of inpatient hospital 

services. 

(B) Such recertifications in the case of services in an intermediate care facility for the mentally retarded shall be conducted 

at least— 

(i) 60 days after the date of the initial certification, 

(ii) 180 days after the date of the initial certification, 

(iii) 12 months after the date of the initial certification, 

(iv) 18 months after the date of the initial certification, 

(v) 24 months after the date of the initial certification, and 

(vi) every 12 months thereafter. 

(C) For purposes of determining compliance with the schedule established by this paragraph, a recertification shall be considered to 

have been done on a timely basis if it was performed not later than 

10 days after the date the recertification was otherwise required 

and the State establishes good cause why the physician or other 

person making such recertification did not meet such schedule. 

(i) Payment under the preceding provisions of this section shall 

not be made— 

(1) for organ transplant procedures unless the State plan 

provides for written standards respecting the coverage of such 

procedures and unless such standards provide that— 


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(A) similarly situated individuals are treated alike; and 

(B) any restriction, on the facilities or practitioners 

which may provide such procedures, is consistent with the 

accessibility of high quality care to individuals eligible for 

the procedures under the State plan; or 

(2) with respect to any amount expended for an item or service (other than an emergency item or service, not including 

items or services furnished in an emergency room of a hospital) 

furnished— 

(A) under the plan by any individual or entity during 

any period when the individual or entity is excluded from 

participation under title V, XVIII, or XX or under this title 

pursuant to section 1128, 1128A, 1156, or 1842(j)(2); 

(B) at the medical direction or on the prescription of a 

physician, during the period when such physician is excluded from participation under title V, XVIII, or XX or 

under this title pursuant to section 1128, 1128A, 1156, or 

1842(j)(2) and when the person furnishing such item or 

service knew or had reason to know of the exclusion (after 

a reasonable time period after reasonable notice has been 

furnished to the person); 

(C) by any individual or entity to whom the State has 

failed to suspend payments under the plan during any period when there is pending an investigation of a credible 

allegation of fraud against the individual or entity, as determined by the State in accordance with regulations promulgated by the Secretary for purposes of section 1862(o) 

and this subparagraph, unless the State determines in accordance with such regulations there is good cause not to 

suspend such payments; 

(D) beginning on July 1, 2018, under the plan by any 

provider of services or person whose participation in the 

State plan is terminated (as described in section 

1902(kk)(8)) after the date that is 60 days after the date 

on which such termination is included in the database or 

other system under section 1902(ll); or 

(E) with respect to any amount expended for such an 

item or service furnished during calendar quarters beginning on or after October 1, 2017, subject to section 

1902(kk)(4)(A)(ii)(II), within a geographic area that is subject to a moratorium imposed under section 1866(j)(7) by 

a provider or supplier that meets the requirements specified in subparagraph (C)(iii) of such section, during the period of such moratorium; or 

(3) with respect to any amount expended for inpatient hospital services furnished under the plan (other than amounts attributable to the special situation of a hospital which serves a 

disproportionate number of low income patients with special 

needs) to the extent that such amount exceeds the hospital’s 

customary charges with respect to such services or (if such 

services are furnished under the plan by a public institution 

free of charge or at nominal charges to the public) exceeds an 

amount determined on the basis of those items (specified in 

regulations prescribed by the Secretary) included in the deterVerDate Sep 11 2014 08:07 Jun 16, 2018 Jkt 079006 PO 00000 Frm 00043 Fmt 6659 Sfmt 6602 E:\HR\OC\HR731.XXX HR731

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mination of such payment which the Secretary finds will provide fair compensation to such institution for such services; or 

(4) with respect to any amount expended for care or services 

furnished under the plan by a hospital unless such hospital 

has in effect a utilization review plan which meets the requirements imposed by section 1861(k) for purposes of title XVIII; 

and if such hospital has in effect such a utilization review plan 

for purposes of title XVIII, such plan shall serve as the plan 

required by this subsection (with the same standards and procedures and the same review committee or group) as a condition of payment under this title; the Secretary is authorized to 

waive the requirements of this paragraph if the State agency 

demonstrates to his satisfaction that it has in operation utilization review procedures which are superior in their effectiveness 

to the procedures required under section 1861(k); or 

(5) with respect to any amount expended for any drug product for which payment may not be made under part B of title 

XVIII because of section 1862(c); or 

(6) with respect to any amount expended for inpatient hospital tests (other than in emergency situations) not specifically 

ordered by the attending physician or other responsible practitioner; or 

(7) with respect to any amount expended for clinical diagnostic laboratory tests performed by a physician, independent 

laboratory, or hospital, to the extent such amount exceeds the 

amount that would be recognized under section 1833(h) for 

such tests performed for an individual enrolled under part B 

of title XVIII; or 

(8) with respect to any amount expended for medical assistance (A) for nursing facility services to reimburse (or otherwise 

compensate) a nursing facility for payment of a civil money 

penalty imposed under section 1919(h) or (B) for home and 

community care to reimburse (or otherwise compensate) a provider of such care for payment of a civil money penalty imposed under this title or title XI or for legal expenses in defense of an exclusion or civil money penalty under this title or 

title XI if there is no reasonable legal ground for the provider’s 

case; or 

(10)(A) with respect to covered outpatient drugs unless there 

is a rebate agreement in effect under section 1927 with respect 

to such drugs or unless section 1927(a)(3) applies, 

(B) with respect to any amount expended for an innovator 

multiple source drug (as defined in section 1927(k)) dispensed 

on or after July 1, 1991, if, under applicable State law, a less 

expensive multiple source drug could have been dispensed, but 

only to the extent that such amount exceeds the upper payment limit for such multiple source drug; 

(C) with respect to covered outpatient drugs described in 

section 1927(a)(7), unless information respecting utilization data and coding on such drugs that is required to be 

submitted under such section is submitted in accordance 

with such section, and 

(D) with respect to any amount expended for reimbursement 

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ceived payment under this title (other than with respect to a 

reasonable restocking fee for such drug); or 

(11) with respect to any amount expended for physicians’ 

services furnished on or after the first day of the first quarter 

beginning more than 60 days after the date of establishment 

of the physician identifier system under section 1902(x), unless 

the claim for the services includes the unique physician identifier provided under such system; or 

(13) with respect to any amount expended to reimburse (or 

otherwise compensate) a nursing facility for payment of legal 

expenses associated with any action initiated by the facility 

that is dismissed on the basis that no reasonable legal ground 

existed for the institution of such action; or 

(14) with respect to any amount expended on administrative 

costs to carry out the program under section 1928; or 

(15) with respect to any amount expended for a single-antigen vaccine and its administration in any case in which the administration of a combined-antigen vaccine was medically appropriate (as determined by the Secretary); or 

(16) with respect to any amount expended for which funds 

may not be used under the Assisted Suicide Funding Restriction Act of 1997; or 

(17) with respect to any amount expended for roads, bridges, 

stadiums, or any other item or service not covered under a 

State plan under this title; or 

(18) with respect to any amount expended for home health 

care services provided by an agency or organization unless the 

agency or organization provides the State agency on a continuing basis a surety bond in a form specified by the Secretary under paragraph (7) of section 1861(o) and in an 

amount that is not less than $50,000 or such comparable surety bond as the Secretary may permit under the last sentence 

of such section; or 

(19) with respect to any amount expended on administrative 

costs to initiate or pursue litigation described in subsection 

(d)(3)(B); 

(20) with respect to amounts expended for medical assistance 

provided to an individual described in subclause (XV) or (XVI) 

of section 1902(a)(10)(A)(ii) for a fiscal year unless the State 

demonstrates to the satisfaction of the Secretary that the level 

of State funds expended for such fiscal year for programs to enable working individuals with disabilities to work (other than 

for such medical assistance) is not less than the level expended 

for such programs during the most recent State fiscal year ending before the date of the enactment of this paragraph; 

(21) with respect to amounts expended for covered outpatient 

drugs described in section 1927(d)(2)(C) (relating to drugs 

when used for cosmetic purposes or hair growth), except where 

medically necessary, and section 1927(d)(2)(K) (relating to 

drugs when used for treatment of sexual or erectile dysfunction); 

(22) with respect to amounts expended for medical assistance 

for an individual who declares under section 1137(d)(1)(A) to be 

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lishing eligibility for benefits under this title, unless the requirement of section 1902(a)(46)(B) is met; 

(23) with respect to amounts expended for medical assistance 

for covered outpatient drugs (as defined in section 1927(k)(2)) 

for which the prescription was executed in written (and nonelectronic) form unless the prescription was executed on a tamper-resistant pad; 

(24) if a State is required to implement an asset verification 

program under section 1940 and fails to implement such program in accordance with such section, with respect to amounts 

expended by such State for medical assistance for individuals 

subject to asset verification under such section, unless— 

(A) the State demonstrates to the Secretary’s satisfaction 

that the State made a good faith effort to comply; 

(B) not later than 60 days after the date of a finding 

that the State is in noncompliance, the State submits to 

the Secretary (and the Secretary approves) a corrective action plan to remedy such noncompliance; and 

(C) not later than 12 months after the date of such submission (and approval), the State fulfills the terms of such 

corrective action plan; 

(25) with respect to any amounts expended for medical assistance for individuals for whom the State does not report enrollee encounter data (as defined by the Secretary) to the Medicaid Statistical Information System (MSIS) in a timely manner (as determined by the Secretary); 

(26) with respect to any amounts expended for medical assistance for individuals described in subclause (VIII) of subsection (a)(10)(A)(i) other than medical assistance provided 

through benchmark coverage described in section 1937(b)(1) or 

benchmark equivalent coverage described in section 1937(b)(2); 

or 

(27) with respect to any amounts expended by the State on 

the basis of a fee schedule for items described in section 

1861(n) and furnished on or after January 1, 2018, as determined in the aggregate with respect to each class of such items 

as defined by the Secretary, in excess of the aggregate amount, 

if any, that would be paid for such items within such class on 

a fee-for-service basis under the program under part B of title 

XVIII, including, as applicable, under a competitive acquisition 

program under section 1847 in an area of the State. 

Nothing in paragraph (1) shall be construed as permitting a State 

to provide services under its plan under this title that are not reasonable in amount, duration, and scope to achieve their purpose. 

Paragraphs (1), (2), (16), (17), and (18) shall apply with respect to 

items or services furnished and amounts expended by or through 

a managed care entity (as defined in section 1932(a)(1)(B)) in the 

same manner as such paragraphs apply to items or services furnished and amounts expended directly by the State. 

(j) Notwithstanding the preceding provisions of this section, the 

amount determined under subsection (a)(1) for any State for any 

quarter shall be adjusted in accordance with section 1914. 

(k) The Secretary is authorized to provide at the request of any 

State (and without cost to such State) such technical and actuarial 

assistance as may be necessary to assist such State to contract 


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with any medicaid managed care organization which meets the requirements of subsection (m) of this section for the purpose of providing medical care and services to individuals who are entitled to 

medical assistance under this title. 

(l)(1) Subject to paragraphs (3) and (4), with respect to any 

amount expended for personal care services or home health care 

services requiring an in-home visit by a provider that are provided 

under a State plan under this title (or under a waiver of the plan) 

and furnished in a calendar quarter beginning on or after January 

1, 2019 (or, in the case of home health care services, on or after 

January 1, 2023), unless a State requires the use of an electronic 

visit verification system for such services furnished in such quarter 

under the plan or such waiver, the Federal medical assistance percentage shall be reduced— 

(A) in the case of personal care services— 

(i) for calendar quarters in 2019 and 2020, by .25 percentage points; 

(ii) for calendar quarters in 2021, by .5 percentage 

points; 

(iii) for calendar quarters in 2022, by .75 percentage 

points; and 

(iv) for calendar quarters in 2023 and each year thereafter, by 1 percentage point; and 

(B) in the case of home health care services— 

(i) for calendar quarters in 2023 and 2024, by .25 percentage points; 

(ii) for calendar quarters in 2025, by .5 percentage 

points; 

(iii) for calendar quarters in 2026, by .75 percentage 

points; and 

(iv) for calendar quarters in 2027 and each year thereafter, by 1 percentage point. 

(2) Subject to paragraphs (3) and (4), in implementing the requirement for the use of an electronic visit verification system 

under paragraph (1), a State shall— 

(A) consult with agencies and entities that provide personal 

care services, home health care services, or both under the 

State plan (or under a waiver of the plan) to ensure that such 

system— 

(i) is minimally burdensome; 

(ii) takes into account existing best practices and electronic visit verification systems in use in the State; and 

(iii) is conducted in accordance with the requirements of 

HIPAA privacy and security law (as defined in section 

3009 of the Public Health Service Act); 

(B) take into account a stakeholder process that includes 

input from beneficiaries, family caregivers, individuals who 

furnish personal care services or home health care services, 

and other stakeholders, as determined by the State in accordance with guidance from the Secretary; and 

(C) ensure that individuals who furnish personal care services, home health care services, or both under the State plan 

(or under a waiver of the plan) are provided the opportunity 

for training on the use of such system. 


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(3) Paragraphs (1) and (2) shall not apply in the case of a State 

that, as of the date of the enactment of this subsection, requires 

the use of any system for the electronic verification of visits conducted as part of both personal care services and home health care 

services, so long as the State continues to require the use of such 

system with respect to the electronic verification of such visits. 

(4)(A) In the case of a State described in subparagraph (B), the 

reduction under paragraph (1) shall not apply— 

(i) in the case of personal care services, for calendar quarters 

in 2019; and 

(ii) in the case of home health care services, for calendar 

quarters in 2023. 

(B) For purposes of subparagraph (A), a State described in this 

subparagraph is a State that demonstrates to the Secretary that 

the State— 

(i) has made a good faith effort to comply with the requirements of paragraphs (1) and (2) (including by taking steps to 

adopt the technology used for an electronic visit verification 

system); and 

(ii) in implementing such a system, has encountered unavoidable system delays. 

(5) In this subsection: 

(A) The term ‘‘electronic visit verification system’’ means, 

with respect to personal care services or home health care 

services, a system under which visits conducted as part of such 

services are electronically verified with respect to— 

(i) the type of service performed; 

(ii) the individual receiving the service; 

(iii) the date of the service; 

(iv) the location of service delivery; 

(v) the individual providing the service; and 

(vi) the time the service begins and ends. 

(B) The term ‘‘home health care services’’ means services described in section 1905(a)(7) provided under a State plan under 

this title (or under a waiver of the plan). 

(C) The term ‘‘personal care services’’ means personal care 

services provided under a State plan under this title (or under 

a waiver of the plan), including services provided under section 

1905(a)(24), 1915(c), 1915(i), 1915(j), or 1915(k) or under a 

wavier under section 1115. 

(6)(A) In the case in which a State requires personal care service 

and home health care service providers to utilize an electronic visit 

verification system operated by the State or a contractor on behalf 

of the State, the Secretary shall pay to the State, for each quarter, 

an amount equal to 90 per centum of so much of the sums expended during such quarter as are attributable to the design, development, or installation of such system, and 75 per centum of so 

much of the sums for the operation and maintenance of such system. 

(B) Subparagraph (A) shall not apply in the case in which a State 

requires personal care service and home health care service providers to utilize an electronic visit verification system that is not 

operated by the State or a contractor on behalf of the State. 

(m)(1)(A) The term ‘‘medicaid managed care organization’’ means 

a health maintenance organization, an eligible organization with a 


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contract under section 1876 or a Medicare+Choice organization 

with a contract under part C of title XVIII, a provider sponsored 

organization, or any other public or private organization, which 

meets the requirement of section 1902(w) and— 

(i) makes services it provides to individuals eligible for benefits under this title accessible to such individuals, within the 

area served by the organization, to the same extent as such 

services are made accessible to individuals (eligible for medical 

assistance under the State plan) not enrolled with the organization, and 

(ii) has made adequate provision against the risk of insolvency, which provision is satisfactory to the State, meets the 

requirements of subparagraph (C)(i) (if applicable), and which 

assures that individuals eligible for benefits under this title 

are in no case held liable for debts of the organization in case 

of the organization’s insolvency. 

An organization that is a qualified health maintenance organization (as defined in section 1310(d) of the Public Health Service Act) 

is deemed to meet the requirements of clauses (i) and (ii). 

(B) The duties and functions of the Secretary, insofar as they involve making determinations as to whether an organization is a 

medicaid managed care organization within the meaning of subparagraph (A), shall be integrated with the administration of section 1312 (a) and (b) of the Public Health Service Act. 

(C)(i) Subject to clause (ii), a provision meets the requirements 

of this subparagraph for an organization if the organization meets 

solvency standards established by the State for private health 

maintenance organizations or is licensed or certified by the State 

as a risk-bearing entity. 

(ii) Clause (i) shall not apply to an organization if— 

(I) the organization is not responsible for the provision (directly or through arrangements with providers of services) of 

inpatient hospital services and physicians’ services; 

(II) the organization is a public entity; 

(III) the solvency of the organization is guaranteed by the 

State; or 

(IV) the organization is (or is controlled by) one or more Federally-qualified health centers and meets solvency standards 

established by the State for such an organization. 

For purposes of subclause (IV), the term ‘‘control’’ means the possession, whether direct or indirect, of the power to direct or cause 

the direction of the management and policies of the organization 

through membership, board representation, or an ownership interest equal to or greater than 50.1 percent. 

(2)(A) Except as provided in subparagraphs (B), (C), and (G), no 

payment shall be made under this title to a State with respect to 

expenditures incurred by it for payment (determined under a prepaid capitation basis or under any other risk basis) for services provided by any entity (including a health insuring organization) 

which is responsible for the provision (directly or through arrangements with providers of services) of inpatient hospital services and 

any other service described in paragraph (2), (3), (4), (5), or (7) of 

section 1905(a) or for the provision of any three or more of the services described in such paragraphs unless— 


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(i) the Secretary has determined that the entity is a medicaid managed care organization organization as defined in 

paragraph (1); 

(iii) such services are provided for the benefit of individuals 

eligible for benefits under this title in accordance with a contract between the State and the entity under which prepaid 

payments to the entity are made on an actuarially sound basis 

and under which the Secretary must provide prior approval for 

contracts providing for expenditures in excess of $1,000,000 for 

1998 and, for a subsequent year, the amount established under 

this clause for the previous year increased by the percentage 

increase in the consumer price index for all urban consumers 

over the previous year; 

(iv) such contract provides that the Secretary and the State 

(or any person or organization designated by either) shall have 

the right to audit and inspect any books and records of the entity (and of any subcontractor) that pertain (I) to the ability of 

the entity to bear the risk of potential financial losses, or (II) 

to services performed or determinations of amounts payable 

under the contract; 

(v) such contract provides that in the entity’s enrollment, reenrollment, or disenrollment of individuals who are eligible for 

benefits under this title and eligible to enroll, reenroll, or 

disenroll with the entity pursuant to the contract, the entity 

will not discriminate among such individuals on the basis of 

their health status or requirements for health care services; 

(vi) such contract (I) permits individuals who have elected 

under the plan to enroll with the entity for provision of such 

benefits to terminate such enrollment in accordance with section 1932(a)(4), and (II) provides for notification in accordance 

with such section of each such individual, at the time of the 

individual’s enrollment, of such right to terminate such enrollment; 

(vii) such contract provides that, in the case of medically necessary services which were provided (I) to an individual enrolled with the entity under the contract and entitled to benefits with respect to such services under the State’s plan and 

(II) other than through the organization because the services 

were immediately required due to an unforeseen illness, injury, 

or condition, either the entity or the State provides for reimbursement with respect to those services, 

(viii) such contract provides for disclosure of information in 

accordance with section 1124 and paragraph (4) of this subsection; 

(ix) such contract provides, in the case of an entity that has 

entered into a contract for the provision of services with a Federally-qualified health center or a rural health clinic, that the 

entity shall provide payment that is not less than the level and 

amount of payment which the entity would make for the services if the services were furnished by a provider which is not 

a Federally-qualified health center or a rural health clinic; 

(x) any physician incentive plan that it operates meets the 

requirements described in section 1876(i)(8); 

(xi) such contract provides for maintenance of sufficient patient encounter data to identify the physician who delivers 


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services to patients and for the provision of such data to the 

State at a frequency and level of detail to be specified by the 

Secretary; 

(xii) such contract, and the entity complies with the applicable requirements of section 1932; and 

(xiii) such contract provides that (I) covered outpatient 

drugs dispensed to individuals eligible for medical assistance who are enrolled with the entity shall be subject to 

the same rebate required by the agreement entered into 

under section 1927 as the State is subject to and that the 

State shall collect such rebates from manufacturers, (II) 

capitation rates paid to the entity shall be based on actual 

cost experience related to rebates and subject to the Federal regulations requiring actuarially sound rates, and (III) 

the entity shall report to the State, on such timely and 

periodic basis as specified by the Secretary in order to include in the information submitted by the State to a manufacturer and the Secretary under section 1927(b)(2)(A), 

information on the total number of units of each dosage 

form and strength and package size by National Drug 

Code of each covered outpatient drug dispensed to individuals eligible for medical assistance who are enrolled with 

the entity and for which the entity is responsible for coverage of such drug under this subsection (other than covered outpatient drugs that under subsection (j)(1) of section 1927 are not subject to the requirements of that section) and such other data as the Secretary determines necessary to carry out this subsection. 

(B) Subparagraph (A) except with respect to clause (ix) of subparagraph (A), does not apply with respect to payments under this 

title to a State with respect to expenditures incurred by it for payment for services provided by an entity which— (i)(I) received a grant of at least $100,000 in the fiscal year 

ending June 30, 1976, under section 329(d)(1)(A) or 330(d)(1) 

of the Public Health Service Act, and for the period beginning 

July 1, 1976, and ending on the expiration of the period for 

which payments are to be made under this title has been the 

recipient of a grant under either such section; and 

(II) provides to its enrollees, on a prepaid capitation risk 

basis or on any other risk basis, all of the services and benefits 

described in paragraphs (1), (2), (3), (4)(C), and (5) of section 

1905(a) and, to the extent required by section 1902(a)(10)(D) to 

be provided under a State plan for medical assistance, the 

services and benefits described in paragraph (7) of section 

1905(a); or 

(ii) is a nonprofit primary health care entity located in a 

rural area (as defined by the Appalachian Regional Commission)— 

(I) which received in the fiscal year ending June 30, 

1976, at least $100,000 (by grant, subgrant, or subcontract) under the Appalachian Regional Development 

Act of 1965, and 

(II) for the period beginning July 1, 1976, and ending on 

the expiration of the period for which payments are to be 

made under this title either has been the recipient of a 


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grant, subgrant, or subcontract under such Act or has provided services under a contract (initially entered into during a year in which the entity was the recipient of such a 

grant, subgrant, or subcontract) with a State agency under 

this title on a prepaid capitation risk basis or on any other 

risk basis; or 

(iii) which has contracted with the single State agency for 

the provision of services (but not including inpatient hospital 

services) to persons eligible under this title on a prepaid risk 

basis prior to 1970. 

(G) In the case of an entity which is receiving (and has received during the previous two years) a grant of at least $100,000 under 

section 329(d)(1)(A) or 330(d)(1) of the Public Health Service Act or 

is receiving (and has received during the previous two years) at 

least $100,000 (by grant, subgrant, or subcontract) under the Appalachian Regional Development Act of 1965, clause (i) of subparagraph (A) shall not apply. 

(H) In the case of an individual who— 

(i) in a month is eligible for benefits under this title and enrolled with a medicaid managed care organization with a contract under this paragraph or with a primary care case manager with a contract described in section 1905(t)(3), 

(ii) in the next month (or in the next 2 months) is not eligible 

for such benefits, but 

(iii) in the succeeding month is again eligible for such benefits, 

the State plan, subject to subparagraph (A)(vi), may enroll the individual for that succeeding month with the organization described 

in clause (i) if the organization continues to have a contract under 

this paragraph with the State or with the manager described in 

such clause if the manager continues to have a contract described 

in section 1905(t)(3) with the State. 

(3) No payment shall be made under this title to a State with respect to expenditures incurred by the State for payment for services provided by a managed care entity (as defined under section 

1932(a)(1)) under the State plan under this title (or under a waiver 

of the plan) unless the State— 

(A) beginning on July 1, 2018, has a contract with such entity that complies with the requirement specified in section 

1932(d)(5); and 

(B) beginning on January 1, 2018, complies with the requirement specified in section 1932(d)(6)(A). 

(4)(A) Each medicaid managed care organization which is not a 

qualified health maintenance organization (as defined in section 

1310(d) of the Public Health Service Act) must report to the State 

and, upon request, to the Secretary, the Inspector General of the 

Department of Health and Human Services, and the Comptroller 

General a description of transactions between the organization and 

a party in interest (as defined in section 1318(b) of such Act), including the following transactions: 

(i) Any sale or exchange, or leasing of any property between 

the organization and such a party. 

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ployees for services provided in the normal course of their employment. 

(iii) Any lending of money or other extension of credit between the organization and such a party. 

The State or Secretary may require that information reported respecting an organization which controls, or is controlled by, or is 

under common control with, another entity be in the form of a consolidated financial statement for the organization and such entity. 

(B) Each organization shall make the information reported pursuant to subparagraph (A) available to its enrollees upon reasonable request. 

(5)(A) If the Secretary determines that an entity with a contract 

under this subsection— 

(i) fails substantially to provide medically necessary items 

and services that are required (under law or under the contract) to be provided to an individual covered under the contract, if the failure has adversely affected (or has substantial 

likelihood of adversely affecting) the individual; 

(ii) imposes premiums on individuals enrolled under this 

subsection in excess of the premiums permitted under this 

title; 

(iii) acts to discriminate among individuals in violation of the 

provision of paragraph (2)(A)(v), including expulsion or refusal 

to re-enroll an individual or engaging in any practice that 

would reasonably be expected to have the effect of denying or 

discouraging enrollment (except as permitted by this subsection) by eligible individuals with the organization whose 

medical condition or history indicates a need for substantial future medical services; 

(iv) misrepresents or falsifies information that is furnished— 

(I) to the Secretary or the State under this subsection, 

or 

(II) to an individual or to any other entity under this 

subsection, or 

(v) fails to comply with the requirements of section 

1876(i)(8), 

the Secretary may provide, in addition to any other remedies available under law, for any of the remedies described in subparagraph 

(B). 

(B) The remedies described in this subparagraph are— 

(i) civil money penalties of not more than $25,000 for each 

determination under subparagraph (A), or, with respect to a 

determination under clause (iii) or (iv)(I) of such subparagraph, 

of not more than $100,000 for each such determination, plus, 

with respect to a determination under subparagraph (A)(ii), 

double the excess amount charged in violation of such subparagraph (and the excess amount charged shall be deducted from 

the penalty and returned to the individual concerned), and 

plus, with respect to a determination under subparagraph 

(A)(iii), $15,000 for each individual not enrolled as a result of 

a practice described in such subparagraph, or 

(ii) denial of payment to the State for medical assistance furnished under the contract under this subsection for individuals 

enrolled after the date the Secretary notifies the organization 

of a determination under subparagraph (A) and until the SecVerDate Sep 11 2014 08:07 Jun 16, 2018 Jkt 079006 PO 00000 Frm 00053 Fmt 6659 Sfmt 6602 E:\HR\OC\HR731.XXX HR731

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54 

retary is satisfied that the basis for such determination has 

been corrected and is not likely to recur. 

The provisions of section 1128A (other than subsections (a) and (b)) 

shall apply to a civil money penalty under clause (i) in the same 

manner as such provisions apply to a penalty or proceeding under 

section 1128A(a). 

(6)(A) For purposes of this subsection and section 1902(e)(2)(A), 

in the case of the State of New Jersey, the term ‘‘contract’’ shall 

be deemed to include an undertaking by the State agency, in the 

State plan under this title, to operate a program meeting all requirements of this subsection. 

(B) The undertaking described in subparagraph (A) must provide— 

(i) for the establishment of a separate entity responsible for 

the operation of a program meeting the requirements of this 

subsection, which entity may be a subdivision of the State 

agency administering the State plan under this title; 

(ii) for separate accounting for the funds used to operate 

such program; and 

(iii) for setting the capitation rates and any other payment 

rates for services provided in accordance with this subsection 

using a methodology satisfactory to the Secretary designed to 

ensure that total Federal matching payments under this title 

for such services will be lower than the matching payments 

that would be made for the same services, if provided under 

the State plan on a fee for service basis to an actuarially equivalent population. 

(C) The undertaking described in subparagraph (A) shall be subject to approval (and annual re-approval) by the Secretary in the 

same manner as a contract under this subsection. 

(D) The undertaking described in subparagraph (A) shall not be 

eligible for a waiver under section 1915(b). 

(o) Notwithstanding the preceding provisions of this section, no 

payment shall be made to a State under the preceding provisions 

of this section for expenditures for medical assistance provided for 

an individual under its State plan approved under this title to the 

extent that a private insurer (as defined by the Secretary by regulation and including a group health plan (as defined in section 

607(1) of the Employee Retirement Income Security Act of 1974), 

a service benefit plan, and a health maintenance organization) 

would have been obligated to provide such assistance but for a provision of its insurance contract which has the effect of limiting or 

excluding such obligation because the individual is eligible for or 

is provided medical assistance under the plan. 

(p)(1) When a political subdivision of a State makes, for the State 

of which it is a political subdivision, or one State makes, for another State, the enforcement and collection of rights of support or 

payment assigned under section 1912, pursuant to a cooperative arrangement under such section (either within or outside of such 

State), there shall be paid to such political subdivision or such 

other State from amounts which would otherwise represent the 

Federal share of payments for medical assistance provided to the 

eligible individuals on whose behalf such enforcement and collection was made, an amount equal to 15 percent of any amount collected which is attributable to such rights of support or payment. 


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(2) Where more than one jurisdiction is involved in such enforcement or collection, the amount of the incentive payment determined under paragraph (1) shall be allocated among the jurisdictions in a manner to be prescribed by the Secretary. 

(q) For the purposes of this section, the term ‘‘State medicaid 

fraud control unit’’ means a single identifiable entity of the State 

government which the Secretary certifies (and annually recertifies) 

as meeting the following requirements: 

(1) The entity (A) is a unit of the office of the State Attorney 

General or of another department of State government which 

possesses statewide authority to prosecute individuals for 

criminal violations, (B) is in a State the constitution of which 

does not provide for the criminal prosecution of individuals by 

a statewide authority and has formal procedures, approved by 

the Secretary, that (i) assure its referral of suspected criminal 

violations relating to the program under this title to the appropriate authority or authorities in the State for prosecution and 

(ii) assure its assistance of, and coordination with, such authority or authorities in such prosecutions, or (C) has a formal 

working relationship with the office of the State Attorney General and has formal procedures (including procedures for its referral of suspected criminal violations to such office) which are 

approved by the Secretary and which provide effective coordination of activities between the entity and such office with respect to the detection, investigation, and prosecution of suspected criminal violations relating to the program under this 

title. 

(2) The entity is separate and distinct from the single State 

agency that administers or supervises the administration of 

the State plan under this title. 

(3) The entity’s function is conducting a statewide program 

for the investigation and prosecution of violations of all applicable State laws regarding any and all aspects of fraud in connection with (A) any aspect of the provision of medical assistance and the activities of providers of such assistance under 

the State plan under this title; and (B) upon the approval of 

the Inspector General of the relevant Federal agency, any aspect of the provision of health care services and activities of 

providers of such services under any Federal health care program (as defined in section 1128B(f)(1)), if the suspected fraud 

or violation of law in such case or investigation is primarily related to the State plan under this title. 

(4)(A) The entity has— 

(i) procedures for reviewing complaints of abuse or neglect of patients in health care facilities which receive payments under the State plan under this title; 

(ii) at the option of the entity, procedures for reviewing 

complaints of abuse or neglect of patients residing in board 

and care facilities; and 

(iii) procedures for acting upon such complaints under 

the criminal laws of the State or for referring such complaints to other State agencies for action. 

(B) For purposes of this paragraph, the term ‘‘board and care 

facility’’ means a residential setting which receives payment 

(regardless of whether such payment is made under the State 


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plan under this title) from or on behalf of two or more unrelated adults who reside in such facility, and for whom one or 

both of the following is provided: 

(i) Nursing care services provided by, or under the supervision of, a registered nurse, licensed practical nurse, or 

licensed nursing assistant. 

(ii) A substantial amount of personal care services that 

assist residents with the activities of daily living, including 

personal hygiene, dressing, bathing, eating, toileting, ambulation, transfer, positioning, self-medication, body care, 

travel to medical services, essential shopping, meal preparation, laundry, and housework. 

(5) The entity provides for the collection, or referral for collection to a single State agency, of overpayments that are made 

under the State plan or under any Federal health care program (as so defined) to health care facilities and that are discovered by the entity in carrying out its activities. All funds 

collected in accordance with this paragraph shall be credited 

exclusively to, and available for expenditure under, the Federal 

health care program (including the State plan under this title) 

that was subject to the activity that was the basis for the collection. 

(6) The entity employs such auditors, attorneys, investigators, and other necessary personnel and is organized in such 

a manner as is necessary to promote the effective and efficient 

conduct of the entity’s activities. 

(7) The entity submits to the Secretary an application and 

annual reports containing such information as the Secretary 

determines, by regulation, to be necessary to determine whether the entity meets the other requirements of this subsection. 

(r)(1) In order to receive payments under subsection (a) for use 

of automated data systems in administration of the State plan 

under this title, a State must, in addition to meeting the requirements of paragraph (3), have in operation mechanized claims processing and information retrieval systems that meet the requirements of this subsection and that the Secretary has found— 

(A) are adequate to provide efficient, economical, and effective administration of such State plan; 

(B) are compatible with the claims processing and information retrieval systems used in the administration of title XVIII, 

and for this purpose— 

(i) have a uniform identification coding system for providers, other payees, and beneficiaries under this title or 

title XVIII; 

(ii) provide liaison between States and carriers and 

intermediaries with agreements under title XVIII to facilitate timely exchange of appropriate data; 

(iii) provide for exchange of data between the States and 

the Secretary with respect to persons sanctioned under 

this title or title XVIII; and 

(iv) effective for claims filed on or after October 1, 2010, 

incorporate compatible methodologies of the National Correct Coding Initiative administered by the Secretary (or 

any successor initiative to promote correct coding and to 

control improper coding leading to inappropriate payment) 


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and such other methodologies of that Initiative (or such 

other national correct coding methodologies) as the Secretary identifies in accordance with paragraph (4); 

(C) are capable of providing accurate and timely data; 

(D) are complying with the applicable provisions of part C of 

title XI; 

(E) are designed to receive provider claims in standard formats to the extent specified by the Secretary; and 

(F) effective for claims filed on or after January 1, 1999, provide for electronic transmission of claims data in the format 

specified by the Secretary and consistent with the Medicaid 

Statistical Information System (MSIS) (including detailed individual enrollee encounter data and other information that the 

Secretary may find necessary and including, for data submitted to the Secretary on or after January 1, 2010, data elements from the automated data system that the Secretary determines to be necessary for program integrity, program oversight, and administration, at such frequency as the Secretary 

shall determine). 

(2) In order to meet the requirements of this paragraph, mechanized claims processing and information retrieval systems must 

meet the following requirements: 

(A) The systems must be capable of developing provider, physician, and patient profiles which are sufficient to provide specific information as to the use of covered types of services and 

items, including prescribed drugs. 

(B) The State must provide that information on probable 

fraud or abuse which is obtained from, or developed by, the 

systems, is made available to the State’s medicaid fraud control unit (if any) certified under subsection (q) of this section. 

(C) The systems must meet all performance standards and 

other requirements for initial approval developed by the Secretary. 

(3) In order to meet the requirements of this paragraph, a State 

must have in operation an eligibility determination system which 

provides for data matching through the Public Assistance Reporting Information System (PARIS) facilitated by the Secretary (or 

any successor system), including matching with medical assistance 

programs operated by other States. 

(4) For purposes of paragraph (1)(B)(iv), the Secretary shall do 

the following: 

(A) Not later than September 1, 2010: 

(i) Identify those methodologies of the National Correct 

Coding Initiative administered by the Secretary (or any 

successor initiative to promote correct coding and to control improper coding leading to inappropriate payment) 

which are compatible to claims filed under this title. 

(ii) Identify those methodologies of such Initiative (or 

such other national correct coding methodologies) that 

should be incorporated into claims filed under this title 

with respect to items or services for which States provide 

medical assistance under this title and no national correct 

coding methodologies have been established under such 

Initiative with respect to title XVIII. 

(iii) Notify States of— 


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(I) the methodologies identified under subparagraphs (A) and (B) (and of any other national correct 

coding methodologies identified under subparagraph 

(B)); and 

(II) how States are to incorporate such methodologies into claims filed under this title. 

(B) Not later than March 1, 2011, submit a report to Congress that includes the notice to States under clause (iii) of 

subparagraph (A) and an analysis supporting the identification 

of the methodologies made under clauses (i) and (ii) of subparagraph (A). 

(s) Notwithstanding the preceding provisions of this section, no 

payment shall be made to a State under this section for expenditures for medical assistance under the State plan consisting of a 

designated health service (as defined in subsection (h)(6) of section 

1877) furnished to an individual on the basis of a referral that 

would result in the denial of payment for the service under title 

XVIII if such title provided for coverage of such service to the same 

extent and under the same terms and conditions as under the 

State plan, and subsections (f) and (g)(5) of such section shall apply 

to a provider of such a designated health service for which payment 

may be made under this title in the same manner as such subsections apply to a provider of such a service for which payment 

may be made under such title. 

(t)(1) For purposes of subsection (a)(3)(F), the payments described 

in this paragraph to encourage the adoption and use of certified 

EHR technology are payments made by the State in accordance 

with this subsection — 

(A) to Medicaid providers described in paragraph (2)(A) not 

in excess of 85 percent of net average allowable costs (as defined in paragraph (3)(E)) for certified EHR technology (and 

support services including maintenance and training that is 

for, or is necessary for the adoption and operation of, such 

technology) with respect to such providers; and 

(B) to Medicaid providers described in paragraph (2)(B) not 

in excess of the maximum amount permitted under paragraph 

(5) for the provider involved. 

(2) In this subsection and subsection (a)(3)(F), the term ‘‘Medicaid provider’’ means— 

(A) an eligible professional (as defined in paragraph (3)(B))— 

(i) who is not hospital-based and has at least 30 percent 

of the professional’s patient volume (as estimated in accordance with a methodology established by the Secretary) 

attributable to individuals who are receiving medical assistance under this title; 

(ii) who is not described in clause (i), who is a pediatrician, who is not hospital-based, and who has at least 20 

percent of the professional’s patient volume (as estimated 

in accordance with a methodology established by the Secretary) attributable to individuals who are receiving medical assistance under this title; and 

(iii) who practices predominantly in a Federally qualified 

health center or rural health clinic and has at least 30 percent of the professional’s patient volume (as estimated in 

accordance with a methodology established by the SecVerDate Sep 11 2014 08:07 Jun 16, 2018 Jkt 079006 PO 00000 Frm 00058 Fmt 6659 Sfmt 6602 E:\HR\OC\HR731.XXX HR731

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retary) attributable to needy individuals (as defined in 

paragraph (3)(F)); and 

(B)(i) a children’s hospital, or 

(ii) an acute-care hospital that is not described in clause (i) 

and that has at least 10 percent of the hospital’s patient volume (as estimated in accordance with a methodology established by the Secretary) attributable to individuals who are receiving medical assistance under this title. 

An eligible professional shall not qualify as a Medicaid provider 

under this subsection unless any right to payment under sections 

1848(o) and 1853(l) with respect to the eligible professional has 

been waived in a manner specified by the Secretary. For purposes 

of calculating patient volume under subparagraph (A)(iii), insofar 

as it is related to uncompensated care, the Secretary may require 

the adjustment of such uncompensated care data so that it would 

be an appropriate proxy for charity care, including a downward adjustment to eliminate bad debt data from uncompensated care. In 

applying subparagraphs (A) and (B)(ii), the methodology established by the Secretary for patient volume shall include individuals 

enrolled in a Medicaid managed care plan (under section 1903(m) 

or section 1932). 

(3) In this subsection and subsection (a)(3)(F): 

(A) The term ‘‘certified EHR technology’’ means a qualified 

electronic health record (as defined in 3000(13) of the Public 

Health Service Act) that is certified pursuant to section 

3001(c)(5) of such Act as meeting standards adopted under section 3004 of such Act that are applicable to the type of record 

involved (as determined by the Secretary, such as an ambulatory electronic health record for office-based physicians or an 

inpatient hospital electronic health record for hospitals). 

(B) The term ‘‘eligible professional’’ means a— 

(i) physician; 

(ii) dentist; 

(iii) certified nurse mid-wife; 

(iv) nurse practitioner; and 

(v) physician assistant insofar as the assistant is practicing in a rural health clinic that is led by a physician assistant or is practicing in a Federally qualified health center that is so led. 

(C) The term ‘‘average allowable costs’’ means, with respect 

to certified EHR technology of Medicaid providers described in 

paragraph (2)(A) for— 

(i) the first year of payment with respect to such a provider, the average costs for the purchase and initial implementation or upgrade of such technology (and support 

services including training that is for, or is necessary for 

the adoption and initial operation of, such technology) for 

such providers, as determined by the Secretary based upon 

studies conducted under paragraph (4)(C); and 

(ii) a subsequent year of payment with respect to such 

a provider, the average costs not described in clause (i) relating to the operation, maintenance, and use of such technology for such providers, as determined by the Secretary 

based upon studies conducted under paragraph (4)(C). 


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(D) The term ‘‘hospital-based’’ means, with respect to an eligible professional, a professional (such as a pathologist, anesthesiologist, or emergency physician) who furnishes substantially all of the individual’s professional services in a hospital 

inpatient or emergency room setting and through the use of 

the facilities and equipment, including qualified electronic 

health records, of the hospital. The determination of whether 

an eligible professional is a hospital-based eligible professional 

shall be made on the basis of the site of service (as defined by 

the Secretary) and without regard to any employment or billing arrangement between the eligible professional and any 

other provider. 

(E) The term ‘‘net average allowable costs’’ means, with respect to a Medicaid provider described in paragraph (2)(A), average allowable costs reduced by the average payment the Secretary estimates will be made to such Medicaid providers (determined on a percentage or other basis for such classes or 

types of providers as the Secretary may specify) from other 

sources (other than under this subsection, or by the Federal 

government or a State or local government) that is directly attributable to payment for certified EHR technology or support 

services described in subparagraph (C). 

(F) The term ‘‘needy individual’’ means, with respect to a 

Medicaid provider, an individual— 

(i) who is receiving assistance under this title; 

(ii) who is receiving assistance under title XXI; 

(iii) who is furnished uncompensated care by the provider; or 

(iv) for whom charges are reduced by the provider on a 

sliding scale basis based on an individual’s ability to pay. 

(4)(A) With respect to a Medicaid provider described in paragraph (2)(A), subject to subparagraph (B), in no case shall— 

(i) the net average allowable costs under this subsection 

for the first year of payment (which may not be later than 

2016), which is intended to cover the costs described in 

paragraph (3)(C)(i), exceed $25,000 (or such lesser amount 

as the Secretary determines based on studies conducted 

under subparagraph (C)); 

(ii) the net average allowable costs under this subsection 

for a subsequent year of payment, which is intended to 

cover costs described in paragraph (3)(C)(ii), exceed 

$10,000; and 

(iii) payments be made for costs described in clause (ii) 

after 2021 or over a period of longer than 5 years. 

(B) In the case of Medicaid provider described in paragraph 

(2)(A)(ii), the dollar amounts specified in subparagraph (A) shall be 

2⁄3 of the dollar amounts otherwise specified. 

(C) For the purposes of determining average allowable costs 

under this subsection, the Secretary shall study the average costs 

to Medicaid providers described in paragraph (2)(A) of purchase 

and initial implementation and upgrade of certified EHR technology described in paragraph (3)(C)(i) and the average costs to 

such providers of operations, maintenance, and use of such technology described in paragraph (3)(C)(ii). In determining such costs 


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for such providers, the Secretary may utilize studies of such 

amounts submitted by States. 

(5)(A) In no case shall the payments described in paragraph 

(1)(B) with respect to a Medicaid provider described in paragraph 

(2)(B) exceed— 

(i) in the aggregate the product of— 

(I) the overall hospital EHR amount for the provider 

computed under subparagraph (B); and 

(II) the Medicaid share for such provider computed 

under subparagraph (C); 

(ii) in any year 50 percent of the product described in clause 

(i); and 

(iii) in any 2-year period 90 percent of such product. 

(B) For purposes of this paragraph, the overall hospital EHR 

amount, with respect to a Medicaid provider, is the sum of the applicable amounts specified in section 1886(n)(2)(A) for such provider 

for the first 4 payment years (as estimated by the Secretary) determined as if the Medicare share specified in clause (ii) of such section were 1. The Secretary shall establish, in consultation with the 

State, the overall hospital EHR amount for each such Medicaid 

provider eligible for payments under paragraph (1)(B). For purposes of this subparagraph in computing the amounts under section 1886(n)(2)(C) for payment years after the first payment year, 

the Secretary shall assume that in subsequent payment years discharges increase at the average annual rate of growth of the most 

recent 3 years for which discharge data are available per year. 

(C) The Medicaid share computed under this subparagraph, for 

a Medicaid provider for a period specified by the Secretary, shall 

be calculated in the same manner as the Medicare share under section 1886(n)(2)(D) for such a hospital and period, except that there 

shall be substituted for the numerator under clause (i) of such section the amount that is equal to the number of inpatient-bed-days 

(as established by the Secretary) which are attributable to individuals who are receiving medical assistance under this title and who 

are not described in section 1886(n)(2)(D)(i). In computing inpatient-bed-days under the previous sentence, the Secretary shall 

take into account inpatient-bed-days attributable to inpatient-beddays that are paid for individuals enrolled in a Medicaid managed 

care plan (under section 1903(m) or section 1932). 

(D) In no case may the payments described in paragraph (1)(B) 

with respect to a Medicaid provider described in paragraph (2)(B) 

be paid— 

(i) for any year beginning after 2016 unless the provider has 

been provided payment under paragraph (1)(B) for the previous year; and 

(ii) over a period of more than 6 years of payment. 

(6) Payments described in paragraph (1) are not in accordance 

with this subsection unless the following requirements are met: 

(A)(i) The State provides assurances satisfactory to the Secretary that amounts received under subsection (a)(3)(F) with 

respect to payments to a Medicaid provider are paid, subject to 

clause (ii), directly to such provider (or to an employer or facility to which such provider has assigned payments) without any 

deduction or rebate. 


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(ii) Amounts described in clause (i) may also be paid to an 

entity promoting the adoption of certified EHR technology, as 

designated by the State, if participation in such a payment arrangement is voluntary for the eligible professional involved 

and if such entity does not retain more than 5 percent of such 

payments for costs not related to certified EHR technology (and 

support services including maintenance and training) that is 

for, or is necessary for the operation of, such technology. 

(B) A Medicaid provider described in paragraph (2)(A) is responsible for payment of the remaining 15 percent of the net 

average allowable cost and shall be determined to have met 

such responsibility to the extent that the payment to the Medicaid provider is not in excess of 85 percent of the net average 

allowable cost. 

(C)(i) Subject to clause (ii), with respect to payments to a 

Medicaid provider— 

(I) for the first year of payment to the Medicaid provider 

under this subsection, the Medicaid provider demonstrates 

that it is engaged in efforts to adopt, implement, or upgrade certified EHR technology; and 

(II) for a year of payment, other than the first year of 

payment to the Medicaid provider under this subsection, 

the Medicaid provider demonstrates meaningful use of certified EHR technology through a means that is approved 

by the State and acceptable to the Secretary, and that may 

be based upon the methodologies applied under section 

1848(o) or 1886(n). 

(ii) In the case of a Medicaid provider who has completed 

adopting, implementing, or upgrading such technology prior to 

the first year of payment to the Medicaid provider under this 

subsection, clause (i)(I) shall not apply and clause (i)(II) shall 

apply to each year of payment to the Medicaid provider under 

this subsection, including the first year of payment. 

(D) To the extent specified by the Secretary, the certified 

EHR technology is compatible with State or Federal administrative management systems. 

For purposes of subparagraph (B), a Medicaid provider described in 

paragraph (2)(A) may accept payments for the costs described in 

such subparagraph from a State or local government. For purposes 

of subparagraph (C), in establishing the means described in such 

subparagraph, which may include clinical quality reporting to the 

State, the State shall ensure that populations with unique needs, 

such as children, are appropriately addressed. 

(7) With respect to Medicaid providers described in paragraph 

(2)(A), the Secretary shall ensure coordination of payment with respect to such providers under sections 1848(o) and 1853(l) and 

under this subsection to assure no duplication of funding. Such coordination shall include, to the extent practicable, a data matching 

process between State Medicaid agencies and the Centers for Medicare & Medicaid Services using national provider identifiers. For 

such purposes, the Secretary may require the submission of such 

data relating to payments to such Medicaid providers as the Secretary may specify. 

(8) In carrying out paragraph (6)(C), the State and Secretary 

shall seek, to the maximum extent practicable, to avoid duplicative 


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requirements from Federal and State governments to demonstrate 

meaningful use of certified EHR technology under this title and 

title XVIII. In doing so, the Secretary may deem satisfaction of requirements for such meaningful use for a payment year under title 

XVIII to be sufficient to qualify as meaningful use under this subsection. The Secretary may also specify the reporting periods under 

this subsection in order to carry out this paragraph. 

(9) In order to be provided Federal financial participation under 

subsection (a)(3)(F)(ii), a State must demonstrate to the satisfaction 

of the Secretary, that the State— 

(A) is using the funds provided for the purposes of administering payments under this subsection, including tracking of 

meaningful use by Medicaid providers; 

(B) is conducting adequate oversight of the program under 

this subsection, including routine tracking of meaningful use 

attestations and reporting mechanisms; and 

(C) is pursuing initiatives to encourage the adoption of certified EHR technology to promote health care quality and the 

exchange of health care information under this title, subject to 

applicable laws and regulations governing such exchange. 

(10) The Secretary shall periodically submit reports to the Committee on Energy and Commerce of the House of Representatives 

and the Committee on Finance of the Senate on status, progress, 

and oversight of payments described in paragraph (1), including 

steps taken to carry out paragraph (7). Such reports shall also describe the extent of adoption of certified EHR technology among 

Medicaid providers resulting from the provisions of this subsection 

and any improvements in health outcomes, clinical quality, or efficiency resulting from such adoption. 

(u)(1)(A) Notwithstanding subsection (a)(1), if the ratio of a 

State’s erroneous excess payments for medical assistance (as defined in subparagraph (D)) to its total expenditures for medical assistance under the State plan approved under this title exceeds 

0.03, for the period consisting of the third and fourth quarters of 

fiscal year 1983, or for any full fiscal year thereafter, then the Secretary shall make no payment for such period or fiscal year with 

respect to so much of such erroneous excess payments as exceeds 

such allowable error rate of 0.03. 

(B) The Secretary may waive, in certain limited cases, all or part 

of the reduction required under subparagraph (A) with respect to 

any State if such State is unable to reach the allowable error rate 

for a period or fiscal year despite a good faith effort by such State. 

(C) In estimating the amount to be paid to a State under subsection (d), the Secretary shall take into consideration the limitation on Federal financial participation imposed by subparagraph 

(A) and shall reduce the estimate he makes under subsection (d)(1), 

for purposes of payment to the State under subsection (d)(3), in 

light of any expected erroneous excess payments for medical assistance (estimated in accordance with such criteria, including sampling procedures, as he may prescribe and subject to subsequent 

adjustment, if necessary, under subsection (d)(2)). 

(D)(i) For purposes of this subsection, the term ‘‘erroneous excess 

payments for medical assistance’’ means the total of— 

(I) payments under the State plan with respect to ineligible 

individuals and families, and 


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(II) overpayments on behalf of eligible individuals and families by reason of error in determining the amount of expenditures for medical care required of an individual or family as a 

condition of eligibility. 

(ii) In determining the amount of erroneous excess payments for 

medical assistance to an ineligible individual or family under 

clause (i)(I), if such ineligibility is the result of an error in determining the amount of the resources of such individual or family, 

the amount of the erroneous excess payment shall be the smaller 

of (I) the amount of the payment with respect to such individual 

or family, or (II) the difference between the actual amount of such 

resources and the allowable resource level established under the 

State plan. 

(iii) In determining the amount of erroneous excess payments for 

medical assistance to an individual or family under clause (i)(II), 

the amount of the erroneous excess payment shall be the smaller 

of (I) the amount of the payment on behalf of the individual or family, or (II) the difference between the actual amount incurred for 

medical care by the individual or family and the amount which 

should have been incurred in order to establish eligibility for medical assistance. 

(iv) In determining the amount of erroneous excess payments, 

there shall not be included any error resulting from a failure of an 

individual to cooperate or give correct information with respect to 

third-party liability as required under section 1912(a)(1)(C) or 

402(a)(26)(C) or with respect to payments made in violation of section 1906. 

(v) In determining the amount of erroneous excess payments, 

there shall not be included any erroneous payments made for ambulatory prenatal care provided during a presumptive eligibility period (as defined in section 1920(b)(1)), for items and services described in subsection (a) of section 1920A provided to a child during 

a presumptive eligibility period under such section, for medical assistance provided to an individual described in subsection (a) of section 1920B during a presumptive eligibility period under such section, or for medical assistance provided to an individual during a 

presumptive eligibility period resulting from a determination of 

presumptive eligibility made by a hospital that elects under section 

1902(a)(47)(B) to be a qualified entity for such purpose. 

(E) For purposes of subparagraph (D), there shall be excluded, in 

determining both erroneous excess payments for medical assistance 

and total expenditures for medical assistance— 

(i) payments with respect to any individual whose eligibility 

therefor was determined exclusively by the Secretary under an 

agreement pursuant to section 1634 and such other classes of 

individuals as the Secretary may by regulation prescribe whose 

eligibility was determined in part under such an agreement; 

and 

(ii) payments made as the result of a technical error. 

(2) The State agency administering the plan approved under this 

title shall, at such times and in such form as the Secretary may 

specify, provide information on the rates of erroneous excess payments made (or expected, with respect to future periods specified 

by the Secretary) in connection with its administration of such 


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plan, together with any other data he requests that are reasonably 

necessary for him to carry out the provisions of this subsection. 

(3)(A) If a State fails to cooperate with the Secretary in providing 

information necessary to carry out this subsection, the Secretary, 

directly or through contractual or such other arrangements as he 

may find appropriate, shall establish the error rates for that State 

on the basis of the best data reasonably available to him and in 

accordance with such techniques for sampling and estimating as he 

finds appropriate. 

(B) In any case in which it is necessary for the Secretary to exercise his authority under subparagraph (A) to determine a State’s 

error rates for a fiscal year, the amount that would otherwise be 

payable to such State under this title for quarters in such year 

shall be reduced by the costs incurred by the Secretary in making 

(directly or otherwise) such determination. 

(4) This subsection shall not apply with respect to Puerto Rico, 

Guam, the Virgin Islands, the Northern Mariana Islands, or American Samoa. 

(v)(1) Notwithstanding the preceding provisions of this section, 

except as provided in paragraphs (2) and (4), no payment may be 

made to a State under this section for medical assistance furnished 

to an alien who is not lawfully admitted for permanent residence 

or otherwise permanently residing in the United States under color 

of law. 

(2) Payment shall be made under this section for care and services that are furnished to an alien described in paragraph (1) only 

if— 

(A) such care and services are necessary for the treatment of 

an emergency medical condition of the alien, 

(B) such alien otherwise meets the eligibility requirements 

for medical assistance under the State plan approved under 

this title (other than the requirement of the receipt of aid or 

assistance under title IV, supplemental security income benefits under title XVI, or a State supplementary payment), and 

(C) such care and services are not related to an organ transplant procedure. 

(3) For purposes of this subsection, the term ‘‘emergency medical 

condition’’ means a medical condition (including emergency labor 

and delivery) manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate 

medical attention could reasonably be expected to result in— 

(A) placing the patient’s health in serious jeopardy, 

(B) serious impairment to bodily functions, or 

(C) serious dysfunction of any bodily organ or part. 

(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). 


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(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. 

(C) 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. 

(w)(1)(A) Notwithstanding the previous provisions of this section, 

for purposes of determining the amount to be paid to a State (as 

defined in paragraph (7)(D)) under subsection (a)(1) for quarters in 

any fiscal year, the total amount expended during such fiscal year 

as medical assistance under the State plan (as determined without 

regard to this subsection) shall be reduced by the sum of any revenues received by the State (or by a unit of local government in the 

State) during the fiscal year— 

(i) from provider-related donations (as defined in paragraph 

(2)(A)), other than— 

(I) bona fide provider-related donations (as defined in 

paragraph (2)(B)), and 

(II) donations described in paragraph (2)(C); 

(ii) from health care related taxes (as defined in paragraph 

(3)(A)), other than broad-based health care related taxes (as 

defined in paragraph (3)(B)); 

(iii) from a broad-based health care related tax, if there is in 

effect a hold harmless provision (described in paragraph (4)) 

with respect to the tax; or 

(iv) only with respect to State fiscal years (or portions thereof) occurring on or after January 1, 1992, and before October 

1, 1995, from broad-based health care related taxes to the extent the amount of such taxes collected exceeds the limit established under paragraph (5). 

(B) Notwithstanding the previous provisions of this section, for 

purposes of determining the amount to be paid to a State under 

subsection (a)(7) for all quarters in a Federal fiscal year (beginning 

with fiscal year 1993), the total amount expended during the fiscal 

year for administrative expenditures under the State plan (as determined without regard to this subsection) shall be reduced by the 

sum of any revenues received by the State (or by a unit of local 

government in the State) during such quarters from donations described in paragraph (2)(C), to the extent the amount of such donations exceeds 10 percent of the amounts expended under the State 


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plan under this title during the fiscal year for purposes described 

in paragraphs (2), (3), (4), (6), and (7) of subsection (a). 

(C)(i) Except as otherwise provided in clause (ii), subparagraph 

(A)(i) shall apply to donations received on or after January 1, 1992. 

(ii) Subject to the limits described in clause (iii) and subparagraph (E), subparagraph (A)(i) shall not apply to donations received 

before the effective date specified in subparagraph (F) if such donations are received under programs in effect or as described in State 

plan amendments or related documents submitted to the Secretary 

by September 30, 1991, and applicable to State fiscal year 1992, as 

demonstrated by State plan amendments, written agreements, 

State budget documentation, or other documentary evidence in existence on that date. 

(iii) In applying clause (ii) in the case of donations received in 

State fiscal year 1993, the maximum amount of such donations to 

which such clause may be applied may not exceed the total amount 

of such donations received in the corresponding period in State fiscal year 1992 (or not later than 5 days after the last day of the corresponding period). 

(D)(i) Except as otherwise provided in clause (ii), subparagraphs 

(A)(ii) and (A)(iii) shall apply to taxes received on or after January 

1, 1992. 

(ii) Subparagraphs (A)(ii) and (A)(iii) shall not apply to impermissible taxes (as defined in clause (iii)) received before the effective 

date specified in subparagraph (F) to the extent the taxes (including the tax rate or base) were in effect, or the legislation or regulations imposing such taxes were enacted or adopted, as of November 

22, 1991. 

(iii) In this subparagraph and subparagraph (E), the term ‘‘impermissible tax’’ means a health care related tax for which a reduction may be made under clause (ii) or (iii) of subparagraph (A). 

(E)(i) In no case may the total amount of donations and taxes 

permitted under the exception provided in subparagraphs (C)(ii) 

and (D)(ii) for the portion of State fiscal year 1992 occurring during 

calendar year 1992 exceed the limit under paragraph (5) minus the 

total amount of broad-based health care related taxes received in 

the portion of that fiscal year. 

(ii) In no case may the total amount of donations and taxes permitted under the exception provided in subparagraphs (C)(ii) and 

(D)(ii) for State fiscal year 1993 exceed the limit under paragraph 

(5) minus the total amount of broad-based health care related taxes 

received in that fiscal year. 

(F) In this paragraph in the case of a State— 

(i) except as provided in clause (iii), with a State fiscal year 

beginning on or before July 1, the effective date is October 1, 

1992, 

(ii) except as provided in clause (iii), with a State fiscal year 

that begins after July 1, the effective date is January 1, 1993, 

or 

(iii) with a State legislature which is not scheduled to have 

a regular legislative session in 1992, with a State legislature 

which is not scheduled to have a regular legislative session in 

1993, or with a provider-specific tax enacted on November 4, 

1991, the effective date is July 1, 1993. 


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(2)(A) In this subsection (except as provided in paragraph (6)), 

the term ‘‘provider-related donation’’ means any donation or other 

voluntary payment (whether in cash or in kind) made (directly or 

indirectly) to a State or unit of local government by— 

(i) a health care provider (as defined in paragraph (7)(B)), 

(ii) an entity related to a health care provider (as defined in 

paragraph (7)(C)), or 

(iii) an entity providing goods or services under the State 

plan for which payment is made to the State under paragraph 

(2), (3), (4), (6), or (7) of subsection (a). 

(B) For purposes of paragraph (1)(A)(i)(I), the term ‘‘bona fide 

provider-related donation’’ means a provider-related donation that 

has no direct or indirect relationship (as determined by the Secretary) to payments made under this title to that provider, to providers furnishing the same class of items and services as that provider, or to any related entity, as established by the State to the 

satisfaction of the Secretary. The Secretary may by regulation 

specify types of provider-related donations described in the previous sentence that will be considered to be bona fide provider-related donations. 

(C) For purposes of paragraph (1)(A)(i)(II), donations described in 

this subparagraph are funds expended by a hospital, clinic, or similar entity for the direct cost (including costs of training and of preparing and distributing outreach materials) of State or local agency 

personnel who are stationed at the hospital, clinic, or entity to determine the eligibility of individuals for medical assistance under 

this title and to provide outreach services to eligible or potentially 

eligible individuals. 

(3)(A) In this subsection (except as provided in paragraph (6)), 

the term ‘‘health care related tax’’ means a tax (as defined in paragraph (7)(F)) that— 

(i) is related to health care items or services, or to the provision of, the authority to provide, or payment for, such items or 

services, or 

(ii) is not limited to such items or services but provides for 

treatment of individuals or entities that are providing or paying for such items or services that is different from the treatment provided to other individuals or entities. 

In applying clause (i), a tax is considered to relate to health care 

items or services if at least 85 percent of the burden of such tax 

falls on health care providers. 

(B) In this subsection, the term ‘‘broad-based health care related 

tax’’ means a health care related tax which is imposed with respect 

to a class of health care items or services (as described in paragraph (7)(A)) or with respect to providers of such items or services 

and which, except as provided in subparagraphs (D), (E), and (F)— 

(i) is imposed at least with respect to all items or services 

in the class furnished by all non-Federal, nonpublic providers 

in the State (or, in the case of a tax imposed by a unit of local 

government, the area over which the unit has jurisdiction) or 

is imposed with respect to all non-Federal, nonpublic providers 

in the class; and 

(ii) is imposed uniformly (in accordance with subparagraph 

(C)). 


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(C)(i) Subject to clause (ii), for purposes of subparagraph (B)(ii), 

a tax is considered to be imposed uniformly if— 

(I) in the case of a tax consisting of a licensing fee or similar 

tax on a class of health care items or services (or providers of 

such items or services), the amount of the tax imposed is the 

same for every provider providing items or services within the 

class; 

(II) in the case of a tax consisting of a licensing fee or similar 

tax imposed on a class of health care items or services (or providers of such services) on the basis of the number of beds (licensed or otherwise) of the provider, the amount of the tax is 

the same for each bed of each provider of such items or services in the class; 

(III) in the case of a tax based on revenues or receipts with 

respect to a class of items or services (or providers of items or 

services) the tax is imposed at a uniform rate for all items and 

services (or providers of such items of services) in the class on 

all the gross revenues or receipts, or net operating revenues, 

relating to the provision of all such items or services (or all 

such providers) in the State (or, in the case of a tax imposed 

by a unit of local government within the State, in the area over 

which the unit has jurisdiction); or 

(IV) in the case of any other tax, the State establishes to the 

satisfaction of the Secretary that the tax is imposed uniformly. 

(ii) Subject to subparagraphs (D) and (E), a tax imposed with respect to a class of health care items and services is not considered 

to be imposed uniformly if the tax provides for any credits, exclusions, or deductions which have as their purpose or effect the return to providers of all or a portion of the tax paid in a manner 

that is inconsistent with subclauses (I) and (II) of subparagraph 

(E)(ii) or provides for a hold harmless provision described in paragraph (4). 

(D) A tax imposed with respect to a class of health care items 

and services is considered to be imposed uniformly— 

(i) notwithstanding that the tax is not imposed with respect 

to items or services (or the providers thereof) for which payment is made under a State plan under this title or title XVIII, 

or 

(ii) in the case of a tax described in subparagraph (C)(i)(III), 

notwithstanding that the tax provides for exclusion (in whole 

or in part) of revenues or receipts from a State plan under this 

title or title XVIII. 

(E)(i) A State may submit an application to the Secretary requesting that the Secretary treat a tax as a broad-based health 

care related tax, notwithstanding that the tax does not apply to all 

health care items or services in class (or all providers of such items 

and services), provides for a credit, deduction, or exclusion, is not 

applied uniformly, or otherwise does not meet the requirements of 

subparagraph (B) or (C). Permissible waivers may include exemptions for rural or sole-community providers. 

(ii) The Secretary shall approve such an application if the State 

establishes to the satisfaction of the Secretary that— 

(I) the net impact of the tax and associated expenditures 

under this title as proposed by the State is generally redistributive in nature, and 


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(II) the amount of the tax is not directly correlated to payments under this title for items or services with respect to 

which the tax is imposed. 

The Secretary shall by regulation specify types of credits, exclusions, and deductions that will be considered to meet the requirements of this subparagraph. 

(F) In no case shall a tax not qualify as a broad-based health 

care related tax under this paragraph because it does not apply to 

a hospital that is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) 

of such Code and that does not accept payment under the State 

plan under this title or under title XVIII. 

(4) For purposes of paragraph (1)(A)(iii), there is in effect a hold 

harmless provision with respect to a broad-based health care related tax imposed with respect to a class of items or services if the 

Secretary determines that any of the following applies: 

(A) The State or other unit of government imposing the tax 

provides (directly or indirectly) for a payment (other than 

under this title) to taxpayers and the amount of such payment 

is positively correlated either to the amount of such tax or to 

the difference between the amount of the tax and the amount 

of payment under the State plan. 

(B) All or any portion of the payment made under this title 

to the taxpayer varies based only upon the amount of the total 

tax paid. 

(C)(i) The State or other unit of government imposing the tax 

provides (directly or indirectly) for any payment, offset, or 

waiver that guarantees to hold taxpayers harmless for any portion of the costs of the tax. 

(ii) For purposes of clause (i), a determination of the existence of an indirect guarantee shall be made under paragraph 

(3)(i) of section 433.68(f) of title 42, Code of Federal Regulations, as in effect on November 1, 2006, except that for portions 

of fiscal years beginning on or after January 1, 2008, and before October 1, 2011, ‘‘5.5 percent’’ shall be substituted for ‘‘6 

percent’’ each place it appears. 

The provisions of this paragraph shall not prevent use of the tax 

to reimburse health care providers in a class for expenditures 

under this title nor preclude States from relying on such reimbursement to justify or explain the tax in the legislative process. 

(5)(A) For purposes of this subsection, the limit under this subparagraph with respect to a State is an amount equal to 25 percent 

(or, if greater, the State base percentage, as defined in subparagraph (B)) of the non-Federal share of the total amount expended 

under the State plan during a State fiscal year (or portion thereof), 

as it would be determined pursuant to paragraph (1)(A) without regard to paragraph (1)(A)(iv). 

(B)(i) In subparagraph (A), the term ‘‘State base percentage’’ 

means, with respect to a State, an amount (expressed as a percentage) equal to— 

(I) the total of the amount of health care related taxes 

(whether or not broad-based) and the amount of provider-related donations (whether or not bona fide) projected to be collected (in accordance with clause (ii)) during State fiscal year 

1992, divided by 


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(II) the non-Federal share of the total amount estimated to 

be expended under the State plan during such State fiscal 

year. 

(ii) For purposes of clause (i)(I), in the case of a tax that is not 

in effect throughout State fiscal year 1992 or the rate (or base) of 

which is increased during such fiscal year, the Secretary shall 

project the amount to be collected during such fiscal year as if the 

tax (or increase) were in effect during the entire State fiscal year. 

(C)(i) The total amount of health care related taxes under subparagraph (B)(i)(I) shall be determined by the Secretary based on 

only those taxes (including the tax rate or base) which were in effect, or for which legislation or regulations imposing such taxes 

were enacted or adopted, as of November 22, 1991. 

(ii) The amount of provider-related donations under subparagraph (B)(i)(I) shall be determined by the Secretary based on programs in effect on September 30, 1991, and applicable to State fiscal year 1992, as demonstrated by State plan amendments, written 

agreements, State budget documentation, or other documentary 

evidence in existence on that date. 

(iii) The amount of expenditures described in subparagraph 

(B)(i)(II) shall be determined by the Secretary based on the best 

data available as of the date of the enactment of this subsection. 

(6)(A) Notwithstanding the provisions of this subsection, the Secretary may not restrict States’ use of funds where such funds are 

derived from State or local taxes (or funds appropriated to State 

university teaching hospitals) transferred from or certified by units 

of government within a State as the non-Federal share of expenditures under this title, regardless of whether the unit of government 

is also a health care provider, except as provided in section 

1902(a)(2), unless the transferred funds are derived by the unit of 

government from donations or taxes that would not otherwise be 

recognized as the non-Federal share under this section. 

(B) For purposes of this subsection, funds the use of which the 

Secretary may not restrict under subparagraph (A) shall not be 

considered to be a provider-related donation or a health care related tax. 

(7) For purposes of this subsection: 

(A) Each of the following shall be considered a separate class 

of health care items and services: 

(i) Inpatient hospital services. 

(ii) Outpatient hospital services. 

(iii) Nursing facility services (other than services of intermediate care facilities for the mentally retarded). 

(iv) Services of intermediate care facilities for the mentally retarded. 

(v) Physicians’ services. 

(vi) Home health care services. 

(vii) Outpatient prescription drugs. 

(viii) Services of managed care organizations (including 

health maintenance organizations, preferred provider organizations, and such other similar organizations as the Secretary may specify by regulation). 

(ix) Such other classification of health care items and 

services consistent with this subparagraph as the Secretary may establish by regulation. 


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(B) The term ‘‘health care provider’’ means an individual or 

person that receives payments for the provision of health care 

items or services. 

(C) An entity is considered to be ‘‘related’’ to a health care 

provider if the entity— 

(i) is an organization, association, corporation or partnership formed by or on behalf of health care providers; 

(ii) is a person with an ownership or control interest (as 

defined in section 1124(a)(3)) in the provider; 

(iii) is the employee, spouse, parent, child, or sibling of 

the provider (or of a person described in clause (ii)); or 

(iv) has a similar, close relationship (as defined in regulations) to the provider. 

(D) The term ‘‘State’’ means only the 50 States and the District of Columbia but does not include any State whose entire 

program under this title is operated under a waiver granted 

under section 1115. 

(E) The ‘‘State fiscal year’’ means, with respect to a specified 

year, a State fiscal year ending in that specified year. 

(F) The term ‘‘tax’’ includes any licensing fee, assessment, or 

other mandatory payment, but does not include payment of a 

criminal or civil fine or penalty (other than a fine or penalty 

imposed in lieu of or instead of a fee, assessment, or other 

mandatory payment). 

(G) The term ‘‘unit of local government’’ means, with respect 

to a State, a city, county, special purpose district, or other governmental unit in the State. 

(x)(1) For purposes of section 1902(a)(46)(B)(i), the requirement 

of this subsection is, with respect to an individual declaring to be 

a citizen or national of the United States, that, subject to paragraph (2), there is presented satisfactory documentary evidence of 

citizenship or nationality (as defined in paragraph (3)) of the individual. 

(2) The requirement of paragraph (1) shall not apply to an individual declaring to be a citizen or national of the United States 

who is eligible for medical assistance under this title— 

(A) and is entitled to or enrolled for benefits under any part 

of title XVIII; 

(B) and is receiving— 

(i) disability insurance benefits under section 223 or 

monthly insurance benefits under section 202 based on 

such individual’s disability (as defined in section 223(d)); 

or 

(ii) supplemental security income benefits under title 

XVI; 

(C) and with respect to whom— 

(i) child welfare services are made available under part 

B of title IV on the basis of being a child in foster care; 

or 

(ii) adoption or foster care assistance is made available 

under part E of title IV; 

(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 


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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 

(E) on such basis as the Secretary may specify under which 

satisfactory documentary evidence of citizenship or nationality 

has been previously presented. 

(3)(A) For purposes of this subsection, the term ‘‘satisfactory documentary evidence of citizenship or nationality’’ means— 

(i) any document described in subparagraph (B); or 

(ii) a document described in subparagraph (C) and a document described in subparagraph (D). 

(B) The following are documents described in this subparagraph: 

(i) A United States passport. 

(ii) Form N–550 or N–570 (Certificate of Naturalization). 

(iii) Form N–560 or N–561 (Certificate of United States Citizenship). 

(iv) A valid State-issued driver’s license or other identity document described in section 274A(b)(1)(D) of the Immigration 

and Nationality Act, but only if the State issuing the license 

or such document requires proof of United States citizenship 

before issuance of such license or document or obtains a social 

security number from the applicant and verifies before certification that such number is valid and assigned to the applicant 

who is a citizen. 

(v)(I) Except as provided in subclause (II), a document issued 

by a federally recognized Indian tribe evidencing membership 

or enrollment in, or affiliation with, such tribe (such as a tribal 

enrollment card or certificate of degree of Indian blood). 

(II) With respect to those federally recognized Indian tribes 

located within States having an international border whose 

membership includes individuals who are not citizens of the 

United States, the Secretary shall, after consulting with such 

tribes, issue regulations authorizing the presentation of such 

other forms of documentation (including tribal documentation, 

if appropriate) that the Secretary determines to be satisfactory 

documentary evidence of citizenship or nationality for purposes 

of satisfying the requirement of this subsection. 

(vi) Such other document as the Secretary may specify, by 

regulation, that provides proof of United States citizenship or 

nationality and that provides a reliable means of documentation of personal identity. 

(C) The following are documents described in this subparagraph: 

(i) A certificate of birth in the United States. 

(ii) Form FS–545 or Form DS–1350 (Certification of Birth 

Abroad). 

(iii) Form I–197 (United States Citizen Identification Card). 

(iv) Form FS–240 (Report of Birth Abroad of a Citizen of the 

United States). 

(v) Such other document (not described in subparagraph 

(B)(iv)) as the Secretary may specify that provides proof of 

United States citizenship or nationality. 

(D) The following are documents described in this subparagraph: 

(i) Any identity document described in section 274A(b)(1)(D) 

of the Immigration and Nationality Act. 


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(ii) Any other documentation of personal identity of such 

other type as the Secretary finds, by regulation, provides a reliable means of identification. 

(E) A reference in this paragraph to a form includes a reference 

to any successor form. 

(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. 

(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 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. 

(y) PAYMENTS FOR ESTABLISHMENT OF ALTERNATE NON-EMER- GENCY SERVICES PROVIDERS.— (1) PAYMENTS.—In addition to the payments otherwise provided under subsection (a), subject to paragraph (2), the Secretary shall provide for payments to States under such subsection for the establishment of alternate non-emergency service providers (as defined in section 1916A(e)(5)(B)), or networks 

of such providers. 

(2) LIMITATION.—The total amount of payments under this 

subsection shall not exceed $50,000,000 during the 4-year period beginning with 2006. This subsection constitutes budget 

authority in advance of appropriations Acts and represents the 

obligation of the Secretary to provide for the payment of 

amounts provided under this subsection. 

(3) PREFERENCE.—In providing for payments to States under 

this subsection, the Secretary shall provide preference to 

States that establish, or provide for, alternate non-emergency 

services providers or networks of such providers that— 

(A) serve rural or underserved areas where beneficiaries 

under this title may not have regular access to providers 

of primary care services; or 

(B) are in partnership with local community hospitals. 

(4) FORM AND MANNER OF PAYMENT.—Payment to a State 

under this subsection shall be made only upon the filing of 

such application in such form and in such manner as the Secretary shall specify. Payment to a State under this subsection 

shall be made in the same manner as other payments under 

section 1903(a). 

(z) MEDICAID TRANSFORMATION PAYMENTS.— (1) IN GENERAL.—In addition to the payments provided 

under subsection (a), subject to paragraph (4), the Secretary 

shall provide for payments to States for the adoption of innovaVerDate Sep 11 2014 08:07 Jun 16, 2018 Jkt 079006 PO 00000 Frm 00074 Fmt 6659 Sfmt 6602 E:\HR\OC\HR731.XXX HR731

dlhill on DSK3GLQ082PROD with HEARING
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tive methods to improve the effectiveness and efficiency in providing medical assistance under this title. 

(2) PERMISSIBLE USES OF FUNDS.—The following are examples of innovative methods for which funds provided under this 

subsection may be used: 

(A) Methods for reducing patient error rates through the 

implementation and use of electronic health records, electronic clinical decision support tools, or e-prescribing programs. 

(B) Methods for improving rates of collection from estates of amounts owed under this title. 

(C) Methods for reducing waste, fraud, and abuse under 

the program under this title, such as reducing improper 

payment rates as measured by annual payment error rate 

measurement (PERM) project rates. 

(D) Implementation of a medication risk management 

program as part of a drug use review program under section 1927(g). 

(E) Methods in reducing, in clinically appropriate ways, 

expenditures under this title for covered outpatient drugs, 

particularly in the categories of greatest drug utilization, 

by increasing the utilization of generic drugs through the 

use of education programs and other incentives to promote 

greater use of generic drugs. 

(F) Methods for improving access to primary and specialty physician care for the uninsured using integrated 

university-based hospital and clinic systems. 

(3) APPLICATION; TERMS AND CONDITIONS.— 

(A) IN GENERAL.—No payments shall be made to a State 

under this subsection unless the State applies to the Secretary for such payments in a form, manner, and time 

specified by the Secretary. 

(B) TERMS AND CONDITIONS.—Such payments are made 

under such terms and conditions consistent with this subsection as the Secretary prescribes. 

(C) ANNUAL REPORT.—Payment to a State under this 

subsection is conditioned on the State submitting to the 

Secretary an annual report on the programs supported by 

such payment. Such report shall include information on— 

(i) the specific uses of such payment; 

(ii) an assessment of quality improvements and clinical outcomes under such programs; and 

(iii) estimates of cost savings resulting from such 

programs. 

(4) FUNDING.— 

(A) LIMITATION ON FUNDS.—The total amount of payments under this subsection shall be equal to, and shall 

not exceed— 

(i) $75,000,000 for fiscal year 2007; and 

(ii) $75,000,000 for fiscal year 2008. 

This subsection constitutes budget authority in advance of 

appropriations Acts and represents the obligation of the 

Secretary to provide for the payment of amounts provided 

under this subsection. 


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(B) ALLOCATION OF FUNDS.—The Secretary shall specify 

a method for allocating the funds made available under 

this subsection among States. Such method shall provide 

preference for States that design programs that target 

health providers that treat significant numbers of Medicaid beneficiaries. Such method shall provide that not less 

than 25 percent of such funds shall be allocated among 

States the population of which (as determined according to 

data collected by the United States Census Bureau) as of 

July 1, 2004, was more than 105 percent of the population 

of the respective State (as so determined) as of April 1, 

2000. 

(C) FORM AND MANNER OF PAYMENT.—Payment to a 

State under this subsection shall be made in the same 

manner as other payments under section 1903(a). There is 

no requirement for State matching funds to receive payments under this subsection. 

(5) MEDICATION RISK MANAGEMENT PROGRAM.— (A) IN GENERAL.—For purposes of this subsection, the 

term ‘‘medication risk management program’’ means a program for targeted beneficiaries that ensures that covered 

outpatient drugs are appropriately used to optimize therapeutic outcomes through improved medication use and to 

reduce the risk of adverse events. 

(B) ELEMENTS.—Such program may include the following 

elements: 

(i) The use of established principles and standards 

for drug utilization review and best practices to analyze prescription drug claims of targeted beneficiaries 

and identify outlier physicians. 

(ii) On an ongoing basis provide outlier physicians— 

(I) a comprehensive pharmacy claims history for 

each targeted beneficiary under their care; 

(II) information regarding the frequency and 

cost of relapses and hospitalizations of targeted 

beneficiaries under the physician’s care; and 

(III) applicable best practice guidelines and empirical references. 

(iii) Monitor outlier physician’s prescribing, such as 

failure to refill, dosage strengths, and provide incentives and information to encourage the adoption of 

best clinical practices. 

(C) TARGETED BENEFICIARIES.—For purposes of this 

paragraph, the term ‘‘targeted beneficiaries’’ means Medicaid eligible beneficiaries who are identified as having 

high prescription drug costs and medical costs, such as individuals with behavioral disorders or multiple chronic diseases who are taking multiple medications. 

(aa) DEMONSTRATION PROJECT TO INCREASE SUBSTANCE USE

PROVIDER CAPACITY.— (1) IN GENERAL.—Not later than the date that is 180 days 

after the date of the enactment of this section, the Secretary 

shall, in consultation, as appropriate, with the Director of the 

Agency for Healthcare Research and Quality and the Assistant 

Secretary for Mental Health and Substance Use, conduct a 5- 


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year demonstration project for the purpose described in paragraph (2) under which the Secretary shall— 

(A) for the first 18-month period of such project, award 

planning grants described in paragraph (3); and 

(B) for the remaining 42-month period of such project, 

provide to each State selected under paragraph (4) payments in accordance with paragraph (5). 

(2) PURPOSE.—The purpose described in this paragraph is for 

each State selected under paragraph (4) to increase the treatment capacity of providers participating under the State plan 

(or a waiver of such plan) to provide substance use disorder 

treatment or recovery services under such plan (or waiver) 

through the following activities: 

(A) For the purpose described in paragraph (3)(C)(i), activities that support an ongoing assessment of the behavioral health treatment needs of the State, taking into account the matters described in subclauses (I) through (IV) 

of such paragraph. 

(B) Activities that, taking into account the results of the 

assessment described in subparagraph (A), support the recruitment, training, and provision of technical assistance 

for providers participating under the State plan (or a waiver of such plan) that offer substance use disorder treatment 

or recovery services. 

(C) Improved reimbursement for and expansion of, 

through the provision of education, training, and technical 

assistance, the number or treatment capacity of providers 

participating under the State plan (or waiver) that— 

(i) are authorized to dispense drugs approved by the 

Food and Drug Administration for individuals with a 

substance use disorder who need withdrawal management or maintenance treatment for such disorder; 

(ii) have in effect a registration or waiver under section 303(g) of the Controlled Substances Act for purposes of dispensing narcotic drugs to individuals for 

maintenance treatment or detoxification treatment and 

are in compliance with any regulation promulgated by 

the Assistant Secretary for Mental Health and Substance Use for purposes of carrying out the requirements of such section 303(g); and 

(iii) are qualified under applicable State law to provide substance use disorder treatment or recovery services. 

(D) Improved reimbursement for and expansion of, 

through the provision of education, training, and technical 

assistance, the number or treatment capacity of providers 

participating under the State plan (or waiver) that have the 

qualifications to address the treatment or recovery needs 

of— 

(i) individuals enrolled under the State plan (or a 

waiver of such plan) who have neonatal abstinence 

syndrome, in accordance with guidelines issued by the 

American Academy of Pediatrics and American College 

of Obstetricians and Gynecologists relating to maternal 


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care and infant care with respect to neonatal abstinence syndrome; 

(ii) pregnant women, postpartum women, and infants, particularly the concurrent treatment, as appropriate, and comprehensive case management of pregnant women, post–partum women and infants, enrolled 

under the State plan (or a waiver of such plan); 

(iii) adolescents and young adults between the ages 

of 12 and 21 enrolled under the State plan (or a waiver 

of such plan); or 

(iv) American Indian and Alaska Native individuals 

enrolled under the State plan (or a waiver of such 

plan). 

(3) PLANNING GRANTS.— 

(A) IN GENERAL.—The Secretary shall, with respect to the 

first 18-month period of the demonstration project conducted under paragraph (1), award planning grants to at 

least 10 States selected in accordance with subparagraph 

(B) for purposes of preparing an application described in 

paragraph (4)(C) and carrying out the activities described 

in subparagraph (C). 

(B) SELECTION.—In selecting States for purposes of this 

paragraph, the Secretary shall— 

(i) select States that have a State plan (or waiver of 

the State plan) approved under this title; 

(ii) select States in a manner that ensures geographic 

diversity; and 

(iii) give preference to States with a prevalence of 

substance use disorders (in particular opioid use disorders) that is comparable to or higher than the national average prevalence, as measured by aggregate 

per capita drug overdoses, or any other measure that 

the Secretary deems appropriate. 

(C) ACTIVITIES DESCRIBED.—Activities described in this 

subparagraph are, with respect to a State, each of the following: 

(i) Activities that support the development of an initial assessment of the behavioral health treatment 

needs of the State to determine the extent to which providers are needed (including the types of such providers 

and geographic area of need) to improve the network of 

providers that treat substance use disorders under the 

State plan (or waiver), including the following: 

(I) An estimate of the number of individuals enrolled under the State plan (or a waiver of such 

plan) who have a substance use disorder. 

(II) Information on the capacity of providers to 

provide substance use disorder treatment or recovery services to individuals enrolled under the State 

plan (or waiver), including information on providers who provide such services and their participation under the State plan (or waiver). 

(III) Information on the gap in substance use 

disorder treatment or recovery services under the 


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State plan (or waiver) based on the information 

described in subclauses (I) and (II). 

(IV) Projections regarding the extent to which 

the State participating under the demonstration 

project would increase the number of providers offering substance use disorder treatment or recovery 

services under the State plan (or waiver) during 

the period of the demonstration project. 

(ii) Activities that, taking into account the results of 

the assessment described in clause (i), support the development of State infrastructure to, with respect to the 

provision of substance use disorder treatment or recovery services under the State plan (or a waiver of such 

plan), recruit prospective providers and provide training and technical assistance to such providers. 

(D) FUNDING.—For purposes of subparagraph (A), there 

is appropriated, out of any funds in the Treasury not otherwise appropriated, $50,000,000, to remain available until 

expended. 

(4) POST-PLANNING STATES.— (A) IN GENERAL.—The Secretary shall, with respect to the 

remaining 42-month period of the demonstration project 

conducted under paragraph (1), select not more than 5 

States in accordance with subparagraph (B) for purposes of 

carrying out the activities described in paragraph (2) and 

receiving payments in accordance with paragraph (5). 

(B) SELECTION.—In selecting States for purposes of this 

paragraph, the Secretary shall— 

(i) select States that received a planning grant under 

paragraph (3); 

(ii) select States that submit to the Secretary an application in accordance with the requirements in subparagraph (C), taking into consideration the quality of 

each such application; 

(iii) select States in a manner that ensures geographic diversity; and 

(iv) give preference to States with a prevalence of 

substance use disorders (in particular opioid use disorders) that is comparable to or higher than the national average prevalence, as measured by aggregate 

per capita drug overdoses, or any other measure that 

the Secretary deems appropriate. 

(C) APPLICATIONS.— 

(i) IN GENERAL.—A State seeking to be selected for 

purposes of this paragraph shall submit to the Secretary, at such time and in such form and manner as 

the Secretary requires, an application that includes 

such information, provisions, and assurances, as the 

Secretary may require, in addition to the following: 

(I) A proposed process for carrying out the ongoing assessment described in paragraph (2)(A), taking into account the results of the initial assessment described in paragraph (3)(C)(i). 

(II) A review of reimbursement methodologies 

and other policies related to substance use disorder 


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treatment or recovery services under the State plan 

(or waiver) that may create barriers to increasing 

the number of providers delivering such services. 

(III) The development of a plan, taking into account activities carried out under paragraph 

(3)(C)(ii), that will result in long-term and sustainable provider networks under the State plan (or 

waiver) that will offer a continuum of care for substance use disorders. Such plan shall include the 

following: 

(aa) Specific activities to increase the number of providers (including providers that specialize in providing substance use disorder 

treatment or recovery services, hospitals, 

health care systems, Federally qualified health 

centers, and, as applicable, certified community behavioral health clinics) that offer substance use disorder treatment, recovery, or 

support services, including short-term detoxification services, outpatient substance use disorder services, and evidence-based peer recovery services. 

(bb) Strategies that will incentivize providers described in subparagraphs (C) and (D) 

of paragraph (2) to obtain the necessary training, education, and support to deliver substance use disorder treatment or recovery services in the State. 

(cc) Milestones and timeliness for implementing activities set forth in the plan. 

(dd) Specific measurable targets for increasing the substance use disorder treatment and 

recovery provider network under the State 

plan (or a waiver of such plan). 

(IV) A proposed process for reporting the information required under paragraph (6)(A), including 

information to assess the effectiveness of the efforts 

of the State to expand the capacity of providers to 

deliver substance use disorder treatment or recovery services during the period of the demonstration 

project under this subsection. 

(V) The expected financial impact of the demonstration project under this subsection on the 

State. 

(VI) A description of all funding sources available to the State to provide substance use disorder 

treatment or recovery services in the State. 

(VII) A preliminary plan for how the State will 

sustain any increase in the capacity of providers to 

deliver substance use disorder treatment or recovery services resulting from the demonstration 

project under this subsection after the termination 

of such demonstration project. 

(VIII) A description of how the State will coordinate the goals of the demonstration project with 


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any waiver received pursuant to section 1115 for 

the delivery of substance use services under the 

State plan, as applicable. 

(ii) CONSULTATION.—In completing an application 

under clause (i), a State shall consult with relevant 

stakeholders, including Medicaid managed care plans, 

health care providers, and Medicaid beneficiary advocates, and include in such application a description of 

such consultation. 

(5) PAYMENT.— 

(A) IN GENERAL.—For each quarter occurring during the 

period for which the demonstration project is conducted 

(after the first 18 months of such period), the Secretary 

shall pay under this subsection, subject to subparagraphs 

(C) and (D), to each State selected under paragraph (4) an 

amount equal to 80 percent of so much of the qualified 

sums expended during such quarter. 

(B) QUALIFIED SUMS DEFINED.—For purposes of subparagraph (A), the term ‘‘qualified sums’’ means, with respect to 

a State and a quarter, the amount equal to the amount (if 

any) by which the sums expended by the State during such 

quarter attributable to substance use treatment or recovery 

services furnished by providers participating under the 

State plan (or a waiver of such plan) exceeds 1/4 of such 

sums expended by the State during fiscal year 2018 attributable to substance use treatment or recovery services. 

(C) NON-DUPLICATION OF PAYMENT.—In the case that 

payment is made under subparagraph (A) with respect to 

expenditures for substance use treatment or recovery services furnished by providers participating under the State 

plan (or a waiver of such plan), payment may not also be 

made under subsection (a) with respect to expenditures for 

the same services so furnished. 

(D) CONDITIONS.—In the case of a State selected under 

paragraph (4) that provides substance use disorder treatment and recovery services under a waiver under section 

1115, such State shall, as a condition of receiving payments 

under subparagraph (A)— 

(i) coordinate such services under such waiver with 

substance use disorder treatment and recovery services 

provided under the demonstration project under this 

subsection; and 

(ii) take such actions as appropriate under the demonstration project to expand such services under such 

waiver. 

(6) REPORTS.— 

(A) STATE REPORTS.—A State receiving payments under 

paragraph (5) shall, for the period of the demonstration 

project under this subsection, submit to the Secretary a 

quarterly report, with respect to expenditures for substance 

use treatment or recovery services for which payment is 

made to the State under this subsection, on the following: 

(i) The specific activities with respect to which payment under this subsection was provided. 


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(ii) The number of providers that delivered substance 

use disorder treatment or recovery services in the State 

under the demonstration project compared to the estimated number of providers that would have otherwise 

delivered such services in the absence of such demonstration project. 

(iii) The number of individuals enrolled under the 

State plan (or a waiver of such plan) who received substance use disorder treatment or recovery services 

under the demonstration project compared to the estimated number of such individuals who would have 

otherwise received such services in the absence of such 

demonstration project. 

(iv) Other matters as determined by the Secretary. 

(B) CMS REPORTS.— (i) INITIAL REPORT.—Not later than October 1, 2020, 

the Administrator of the Centers for Medicare & Medicaid Services shall, in consultation with the Director 

of the Agency for Healthcare Research and Quality and 

the Assistant Secretary for Mental Health and Substance Use, submit to Congress an initial report on— 

(I) the States awarded planning grants under 

paragraph (3); 

(II) the criteria used in such selection; and 

(III) the activities carried out by such States 

under such planning grants. 

(ii) INTERIM REPORT.—Not later than October 1, 

2022, the Administrator of the Centers for Medicare & 

Medicaid Services shall, in consultation with the Director of the Agency for Healthcare Research and Quality 

and the Assistant Secretary for Mental Health and 

Substance Use, submit to Congress an interim report— 

(I) on activities carried out under the demonstration project under this subsection; 

(II) on the extent to which States selected under 

paragraph (4) have achieved the stated goals submitted in their applications under subparagraph 

(C) of such paragraph; 

(III) with a description of the strengths and limitations of such demonstration project; and 

(IV) with a plan for the sustainability of such 

project. 

(iii) FINAL REPORT.—Not later than October 1, 2024, 

the Administrator of the Centers for Medicare & Medicaid Services shall, in consultation with the Director 

of the Agency for Healthcare Research and Quality and 

the Assistant Secretary for Mental Health and Substance Use, submit to Congress a final report— 

(I) providing updates on the matters reported in 

the interim report under clause (ii); 

(II) including a description of any changes made 

with respect to the demonstration project under 

this subsection after the submission of such interim report; and 

(III) evaluating such demonstration project. 


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(C) AHRQ REPORT.—Not later than three years after the 

date of the enactment of this subsection, the Director of the 

Agency for Healthcare Research and Quality shall submit 

to Congress a summary on the experiences of States awarded planning grants under paragraph (3) and States selected under paragraph (4). 

(7) DATA SHARING AND BEST PRACTICES.—During the period 

of the demonstration project under this subsection, the Secretary shall, in collaboration with States selected under paragraph (4), facilitate data sharing and the development of best 

practices between such States and States that were not so selected. 

(8) CMS FUNDING.—There is appropriated, out of any funds in the Treasury not otherwise appropriated, $5,000,000 to the 

Centers for Medicare & Medicaid Services for purposes of implementing this subsection. Such amount shall remain available until expended. 

* * * * * * * 

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