PUBLIC LAW 110–173—DEC. 29, 2007 

MEDICARE, MEDICAID, AND SCHIP 

EXTENSION ACT OF 2007 


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121 STAT. 2492 PUBLIC LAW 110–173—DEC. 29, 2007 

Public Law 110–173 

110th Congress 

An Act 

To amend titles XVIII, XIX, and XXI of the Social Security Act to extend provisions 

under the Medicare, Medicaid, and SCHIP programs, and for other purposes. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) IN GENERAL.—This Act may be cited as the ‘‘Medicare, 

Medicaid, and SCHIP Extension Act of 2007’’. 

(b) TABLE OF CONTENTS.—The table of contents of this Act 

is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—MEDICARE 

Sec. 101. Increase in physician payment update; extension of the physician quality 

reporting system. 

Sec. 102. Extension of Medicare incentive payment program for physician scarcity 

areas. 

Sec. 103. Extension of floor on work geographic adjustment under the Medicare 

physician fee schedule. 

Sec. 104. Extension of treatment of certain physician pathology services under 

Medicare. 

Sec. 105. Extension of exceptions process for Medicare therapy caps. 

Sec. 106. Extension of payment rule for brachytherapy; extension to therapeutic 

radiopharmaceuticals. 

Sec. 107. Extension of Medicare reasonable costs payments for certain clinical diagnostic laboratory tests furnished to hospital patients in certain rural 

areas. 

Sec. 108. Extension of authority of specialized Medicare Advantage plans for special needs individuals to restrict enrollment. 

Sec. 109. Extension of deadline for application of limitation on extension or renewal 

of Medicare reasonable cost contract plans. 

Sec. 110. Adjustment to the Medicare Advantage stabilization fund. 

Sec. 111. Medicare secondary payor. 

Sec. 112. Payment for part B drugs. 

Sec. 113. Payment rate for certain diagnostic laboratory tests. 

Sec. 114. Long-term care hospitals. 

Sec. 115. Payment for inpatient rehabilitation facility (IRF) services. 

Sec. 116. Extension of accommodation of physicians ordered to active duty in the 

Armed Services. 

Sec. 117. Treatment of certain hospitals. 

Sec. 118. Additional Funding for State Health Insurance Assistance Programs, 

Area Agencies on Aging, and Aging and Disability Resource Centers. 

TITLE II—MEDICAID AND SCHIP 

Sec. 201. Extending SCHIP funding through March 31, 2009. 

Sec. 202. Extension of transitional medical assistance (TMA) and abstinence education program. 

Sec. 203. Extension of qualifying individual (QI) program. 

Sec. 204. Medicaid DSH extension. 

Sec. 205. Improving data collection. 

Sec. 206. Moratorium on certain payment restrictions. 

42 USC 1305 

note. 

Medicare, 

Medicaid, and 

SCHIP Extension 

Act of 2007. 

Dec. 29, 2007 

[S. 2499] 


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PUBLIC LAW 110–173—DEC. 29, 2007 121 STAT. 2493 

TITLE III—MISCELLANEOUS 

Sec. 301. Medicare Payment Advisory Commission status. 

Sec. 302. Special Diabetes Programs for Type I Diabetes and Indians. 

TITLE I—MEDICARE 

SEC. 101. INCREASE IN PHYSICIAN PAYMENT UPDATE; EXTENSION OF 

THE PHYSICIAN QUALITY REPORTING SYSTEM. 

(a) INCREASE IN PHYSICIAN PAYMENT UPDATE.— (1) IN GENERAL.—Section 1848(d) of the Social Security 

Act (42 U.S.C. 1395w–4(d)) is amended— 

(A) in paragraph (4)(B), by striking ‘‘and paragraphs 

(5) and (6)’’ and inserting ‘‘and the succeeding paragraphs 

of this subsection’’; and 

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

‘‘(8) UPDATE FOR A PORTION OF 2008.— ‘‘(A) IN GENERAL.—Subject to paragraph (7)(B), in lieu 

of the update to the single conversion factor established 

in paragraph (1)(C) that would otherwise apply for 2008, 

for the period beginning on January 1, 2008, and ending 

on June 30, 2008, the update to the single conversion 

factor shall be 0.5 percent. 

‘‘(B) NO EFFECT ON COMPUTATION OF CONVERSION

FACTOR FOR THE REMAINING PORTION OF 2008 AND 2009.— The conversion factor under this subsection shall be computed under paragraph (1)(A) for the period beginning on 

July 1, 2008, and ending on December 31, 2008, and for 

2009 and subsequent years as if subparagraph (A) had 

never applied.’’. 

(2) REVISION OF THE PHYSICIAN ASSISTANCE AND QUALITY

INITIATIVE FUND.— (A) REVISION.—Section 1848(l)(2) of the Social Security 

Act (42 U.S.C. 1395w–4(l)(2)) is amended— 

(i) by striking subparagraph (A) and inserting the 

following: 

‘‘(A) AMOUNT AVAILABLE.— ‘‘(i) IN GENERAL.—Subject to clause (ii), there shall 

be available to the Fund the following amounts: 

‘‘(I) For expenditures during 2008, an amount equal to $150,500,000. 

‘‘(II) For expenditures during 2009, an amount equal to $24,500,000. 

‘‘(III) For expenditures during 2013, an amount equal to $4,960,000,000. 

‘‘(ii) LIMITATIONS ON EXPENDITURES.— ‘‘(I) 2008.—The amount available for expenditures during 2008 shall be reduced as provided 

by subparagraph (A) of section 225(c)(1) and section 524 of the Departments of Labor, Health and 

Human Services, and Education, and Related 

Agencies Appropriations Act, 2008 (division G of 

the Consolidated Appropriations Act, 2008). 

‘‘(II) 2009.—The amount available for expenditures during 2009 shall be reduced as provided 

by subparagraph (B) of such section 225(c)(1). 

‘‘(III) 2013.—The amount available for 

expenditures during 2013 shall only be available 


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121 STAT. 2494 PUBLIC LAW 110–173—DEC. 29, 2007 

for an adjustment to the update of the conversion 

factor under subsection (d) for that year.’’; and 

(ii) in subparagraph (B), by striking ‘‘entire amount 

specified in the first sentence of subparagraph (A)’’ 

and all that follows and inserting the following: ‘‘entire 

amount available for expenditures, after application 

of subparagraph (A)(ii), during— 

‘‘(i) 2008 for payment with respect to physicians’ 

services furnished during 2008; 

‘‘(ii) 2009 for payment with respect to physicians’ 

services furnished during 2009; and 

‘‘(iii) 2013 for payment with respect to physicians’ 

services furnished during 2013.’’. 

(B) EFFECTIVE DATE.— 

(i) IN GENERAL.—Subject to clause (ii), the amendments made by subparagraph (A) shall take effect on 

the date of the enactment of this Act. 

(ii) SPECIAL RULE FOR COORDINATION WITH

CONSOLIDATED APPROPRIATIONS ACT, 2008.—If the date 

of the enactment of the Consolidated Appropriations 

Act, 2008, occurs on or after the date described in 

clause (i), the amendments made by subparagraph (A) 

shall be deemed to be made on the day after the 

effective date of sections 225(c)(1) and 524 of the 

Departments of Labor, Health and Human Services, 

and Education, and Related Agencies Appropriations 

Act, 2008 (division G of the Consolidated Appropriations Act, 2008). 

(C) TRANSFER OF FUNDS TO PART B TRUST FUND.— 

Amounts that would have been available to the Physician 

Assistance and Quality Initiative Fund under section 

1848(l)(2) of the Social Security Act (42 U.S.C. 1395w– 

4(l)(2)) for payment with respect to physicians’ services 

furnished prior to January 1, 2013, but for the amendments 

made by subparagraph (A), shall be deposited into, and 

made available for expenditures from, the Federal Supplementary Medical Insurance Trust Fund under section 1841 

of such Act (42 U.S.C. 1395t). 

(b) EXTENSION OF THE PHYSICIAN QUALITY REPORTING

SYSTEM.— 

(1) SYSTEM.—Section 1848(k)(2)(B) of the Social Security 

Act (42 U.S.C. 1395w–4(k)(2)(B)) is amended— 

(A) in the heading, by inserting ‘‘AND 2009’’ after ‘‘2008’’; 

(B) in clause (i), by inserting ‘‘and 2009’’ after ‘‘2008’’; 

and 

(C) in each of clauses (ii) and (iii)— 

(i) by striking ‘‘, 2007’’ and inserting ‘‘of each of 

2007 and 2008’’; and 

(ii) by inserting ‘‘or 2009, as applicable’’ after 

‘‘2008’’. 

(2) REPORTING.—Section 101(c) of division B of the Tax 

Relief and Health Care Act of 2006 (42 U.S.C. 1395w–4 note) 

is amended— 

(A) in the heading, by inserting ‘‘AND 2008’’ after 

‘‘2007’’; 

(B) in paragraph (5), by adding at the end the following: 

42 USC 1395w–4 

note. 

42 USC 1395w–4 

note. 


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PUBLIC LAW 110–173—DEC. 29, 2007 121 STAT. 2495 

‘‘(F) EXTENSION.—For 2008 and 2009, paragraph (3) 

shall not apply, and the Secretary shall establish alternative criteria for satisfactorily reporting under paragraph 

(2) and alternative reporting periods under paragraph 

(6)(C) for reporting groups of measures under paragraph 

(2)(B) of section 1848(k) of the Social Security Act (42 

U.S.C. 1395w–4(k)) and for reporting using the method 

specified in paragraph (4) of such section.’’; and 

(C) in paragraph (6), by striking subparagraph (C) 

and inserting the following new subparagraph: 

‘‘(C) REPORTING PERIOD.—The term ‘reporting period’ 

means— 

‘‘(i) for 2007, the period beginning on July 1, 2007, 

and ending on December 31, 2007; and 

‘‘(ii) for 2008, all of 2008.’’. 

(c) IMPLEMENTATION.—For purposes of carrying out the provisions of, and amendments made by subsections (a) and (b), in 

addition to any amounts otherwise provided in this title, there 

are appropriated to the Centers for Medicare & Medicaid Services 

Program Management Account, out of any money in the Treasury 

not otherwise appropriated, $25,000,000 for the period of fiscal 

years 2008 and 2009. 

SEC. 102. EXTENSION OF MEDICARE INCENTIVE PAYMENT PROGRAM 

FOR PHYSICIAN SCARCITY AREAS. 

Section 1833(u) of the Social Security Act (42 U.S.C. 1395l(u)) 

is amended— 

(1) in paragraph (1), by striking ‘‘before January 1, 2008’’ 

and inserting ‘‘before July 1, 2008’’; and 

(2) in paragraph (4)— 

(A) by redesignating subparagraph (D) as subparagraph (E); and 

(B) by inserting after subparagraph (C) the following 

new subparagraph: 

‘‘(D) SPECIAL RULE.—With respect to physicians’ services furnished on or after January 1, 2008, and before 

July 1, 2008, for purposes of this subsection, the Secretary 

shall use the primary care scarcity counties and the specialty care scarcity counties (as identified under the preceding provisions of this paragraph) that the Secretary 

was using under this subsection with respect to physicians’ 

services furnished on December 31, 2007.’’. 

SEC. 103. EXTENSION OF FLOOR ON WORK GEOGRAPHIC ADJUSTMENT 

UNDER THE MEDICARE PHYSICIAN FEE SCHEDULE. 

Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 

1395w–4(e)(1)(E)), as amended by section 102 of division B of the 

Tax Relief and Health Care Act of 2006, is amended by striking 

‘‘before January 1, 2008’’ and inserting ‘‘before July 1, 2008’’. 

SEC. 104. EXTENSION OF TREATMENT OF CERTAIN PHYSICIAN 

PATHOLOGY SERVICES UNDER MEDICARE. 

Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 

Improvement and Protection Act of 2000 (as enacted into law by 

section 1(a)(6) of Public Law 106–554), as amended by section 

732 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (42 U.S.C. 1395w–4 note) and section 104 

of division B of the Tax Relief and Health Care Act of 2006 (42 

Appropriation 

authorization. 

Criteria. 


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121 STAT. 2496 PUBLIC LAW 110–173—DEC. 29, 2007 

U.S.C. 1395w–4 note), is amended by striking ‘‘and 2007’’ and 

inserting ‘‘2007, and the first 6 months of 2008’’. 

SEC. 105. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE 

THERAPY CAPS. 

Section 1833(g)(5) of the Social Security Act (42 U.S.C. 

1395l(g)(5)) is amended by striking ‘‘December 31, 2007’’ and 

inserting ‘‘June 30, 2008’’. 

SEC. 106. EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY; 

EXTENSION TO THERAPEUTIC RADIOPHARMACEUTICALS. 

(a) EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY.—Section 1833(t)(16)(C) of the Social Security Act (42 U.S.C. 

1395l(t)(16)(C)), as amended by section 107(a) of division B of the 

Tax Relief and Health Care Act of 2006, is amended by striking 

‘‘January 1, 2008’’ and inserting ‘‘July 1, 2008’’. 

(b) PAYMENT FOR THERAPEUTIC RADIOPHARMACEUTICALS.—Section 1833(t)(16)(C) of the Social Security Act (42 U.S.C. 

1395l(t)(16)(C)), as amended by subsection (a), is amended— 

(1) in the heading, by inserting ‘‘AND THERAPEUTIC RADIOPHARMACEUTICALS’’ before ‘‘AT CHARGES’’; 

(2) in the first sentence— 

(A) by inserting ‘‘and for therapeutic radiopharmaceuticals furnished on or after January 1, 2008, and before 

July 1, 2008,’’ after ‘‘July 1, 2008,’’; 

(B) by inserting ‘‘or therapeutic radiopharmaceutical’’ 

after ‘‘the device’’; and 

(C) by inserting ‘‘or therapeutic radiopharmaceutical’’ 

after ‘‘each device’’; and 

(3) in the second sentence, by inserting ‘‘or therapeutic 

radiopharmaceuticals’’ after ‘‘such devices’’. 

SEC. 107. EXTENSION OF MEDICARE REASONABLE COSTS PAYMENTS 

FOR CERTAIN CLINICAL DIAGNOSTIC LABORATORY TESTS 

FURNISHED TO HOSPITAL PATIENTS IN CERTAIN RURAL 

AREAS. 

Section 416(b) of the Medicare Prescription Drug, Improvement, 

and Modernization Act of 2003 (42 U.S.C. 1395l–4), as amended 

by section 105 of division B of the Tax Relief and Health Care 

Act of 2006 (42 U.S.C. 1395l note), is amended by striking ‘‘the 

3-year period beginning on July 1, 2004’’ and inserting ‘‘the period 

beginning on July 1, 2004, and ending on June 30, 2008’’. 

SEC. 108. EXTENSION OF AUTHORITY OF SPECIALIZED MEDICARE 

ADVANTAGE PLANS FOR SPECIAL NEEDS INDIVIDUALS TO 

RESTRICT ENROLLMENT. 

(a) EXTENSION OF AUTHORITY TO RESTRICT ENROLLMENT.—Section 1859(f) of the Social Security Act (42 U.S.C. 1395w–28(f)) 

is amended by striking ‘‘2009’’ and inserting ‘‘2010’’. 

(b) MORATORIUM.— 

(1) AUTHORITY TO DESIGNATE OTHER PLANS AS SPECIALIZED

MA PLANS.—During the period beginning on January 1, 2008, 

and ending on December 31, 2009, the Secretary of Health 

and Human Services shall not exercise the authority provided 

under section 231(d) of the Medicare Prescription Drug, 

Improvement, and Modernization Act of 2003 (42 U.S.C. 

1395w–21 note) to designate other plans as specialized MA 

plans for special needs individuals under part C of title XVIII 

42 USC 1395w– 

21 note. 

42 USC 1395l 

note. 


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PUBLIC LAW 110–173—DEC. 29, 2007 121 STAT. 2497 

of the Social Security Act. The preceding sentence shall not 

apply to plans designated as specialized MA plans for special 

needs individuals under such authority prior to January 1, 

2008. 

(2) ENROLLMENT IN NEW PLANS.—During the period beginning on January 1, 2008, and ending on December 31, 2009, 

the Secretary of Health and Human Services shall not permit 

enrollment of any individual residing in an area in a specialized 

Medicare Advantage plan for special needs individuals under 

part C of title XVIII of the Social Security Act to take effect 

unless that specialized Medicare Advantage plan for special 

needs individuals was available for enrollment for individuals 

residing in that area on January 1, 2008. 

SEC. 109. EXTENSION OF DEADLINE FOR APPLICATION OF LIMITATION 

ON EXTENSION OR RENEWAL OF MEDICARE REASONABLE 

COST CONTRACT PLANS. 

Section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 

1395mm(h)(5)(C)(ii)), in the matter preceding subclause (I), is 

amended by striking ‘‘January 1, 2008’’ and inserting ‘‘January 

1, 2009’’. 

SEC. 110. ADJUSTMENT TO THE MEDICARE ADVANTAGE STABILIZATION FUND. 

Section 1858(e)(2)(A)(i) of the Social Security Act (42 U.S.C. 

1395w–27a(e)(2)(A)(i)), as amended by section 3 of Public Law 110– 

48, is amended by striking ‘‘the Fund’’ and all that follows and 

inserting ‘‘the Fund during 2013, $1,790,000,000.’’ 

SEC. 111. MEDICARE SECONDARY PAYOR. 

(a) IN GENERAL.—Section 1862(b) of the Social Security Act 

(42 U.S.C. 1395y(b)) is amended by adding at the end the following 

new paragraphs: 

‘‘(7) REQUIRED SUBMISSION OF INFORMATION BY GROUP

HEALTH PLANS.— 

‘‘(A) REQUIREMENT.—On and after the first day of the 

first calendar quarter beginning after the date that is 1 

year after the date of the enactment of this paragraph, 

an entity serving as an insurer or third party administrator 

for a group health plan, as defined in paragraph (1)(A)(v), 

and, in the case of a group health plan that is self-insured 

and self-administered, a plan administrator or fiduciary, 

shall— 

‘‘(i) secure from the plan sponsor and plan participants such information as the Secretary shall specify 

for the purpose of identifying situations where the 

group health plan is or has been a primary plan to 

the program under this title; and 

‘‘(ii) submit such information to the Secretary in 

a form and manner (including frequency) specified by 

the Secretary. 

‘‘(B) ENFORCEMENT.— 

‘‘(i) IN GENERAL.—An entity, a plan administrator, 

or a fiduciary described in subparagraph (A) that fails 

to comply with the requirements under such subparagraph shall be subject to a civil money penalty of 

Penalties. 


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121 STAT. 2498 PUBLIC LAW 110–173—DEC. 29, 2007 

$1,000 for each day of noncompliance for each individual for which the information under such subparagraph should have been submitted. The provisions of 

subsections (e) and (k) of section 1128A shall apply 

to a civil money penalty under the previous sentence 

in the same manner as such provisions apply to a 

penalty or proceeding under section 1128A(a). A civil 

money penalty under this clause shall be in addition 

to any other penalties prescribed by law and in addition 

to any Medicare secondary payer claim under this title 

with respect to an individual. 

‘‘(ii) DEPOSIT OF AMOUNTS COLLECTED.—Any 

amounts collected pursuant to clause (i) shall be deposited in the Federal Hospital Insurance Trust Fund 

under section 1817. 

‘‘(C) SHARING OF INFORMATION.—Notwithstanding any 

other provision of law, under terms and conditions established by the Secretary, the Secretary— 

‘‘(i) shall share information on entitlement under 

Part A and enrollment under Part B under this title 

with entities, plan administrators, and fiduciaries 

described in subparagraph (A); 

‘‘(ii) may share the entitlement and enrollment 

information described in clause (i) with entities and 

persons not described in such clause; and 

‘‘(iii) may share information collected under this 

paragraph as necessary for purposes of the proper 

coordination of benefits. 

‘‘(D) IMPLEMENTATION.—Notwithstanding any other 

provision of law, the Secretary may implement this paragraph by program instruction or otherwise. 

‘‘(8) REQUIRED SUBMISSION OF INFORMATION BY OR ON

BEHALF OF LIABILITY INSURANCE (INCLUDING SELF-INSURANCE), 

NO FAULT INSURANCE, AND WORKERS’ COMPENSATION LAWS AND

PLANS.— 

‘‘(A) REQUIREMENT.—On and after the first day of the 

first calendar quarter beginning after the date that is 18 

months after the date of the enactment of this paragraph, 

an applicable plan shall— 

‘‘(i) determine whether a claimant (including an 

individual whose claim is unresolved) is entitled to 

benefits under the program under this title on any 

basis; and 

‘‘(ii) if the claimant is determined to be so entitled, 

submit the information described in subparagraph (B) 

with respect to the claimant to the Secretary in a 

form and manner (including frequency) specified by 

the Secretary. 

‘‘(B) REQUIRED INFORMATION.—The information 

described in this subparagraph is— 

‘‘(i) the identity of the claimant for which the determination under subparagraph (A) was made; and 

‘‘(ii) such other information as the Secretary shall 

specify in order to enable the Secretary to make an 

appropriate determination concerning coordination of 

benefits, including any applicable recovery claim. 

Applicability. 


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PUBLIC LAW 110–173—DEC. 29, 2007 121 STAT. 2499 

‘‘(C) TIMING.—Information shall be submitted under 

subparagraph (A)(ii) within a time specified by the Secretary after the claim is resolved through a settlement, 

judgment, award, or other payment (regardless of whether 

or not there is a determination or admission of liability). 

‘‘(D) CLAIMANT.—For purposes of subparagraph (A), 

the term ‘claimant’ includes— 

‘‘(i) an individual filing a claim directly against 

the applicable plan; and 

‘‘(ii) an individual filing a claim against an individual or entity insured or covered by the applicable 

plan. 

‘‘(E) ENFORCEMENT.— ‘‘(i) IN GENERAL.—An applicable plan that fails 

to comply with the requirements under subparagraph 

(A) with respect to any claimant shall be subject to 

a civil money penalty of $1,000 for each day of noncompliance with respect to each claimant. The provisions of subsections (e) and (k) of section 1128A shall 

apply to a civil money penalty under the previous 

sentence in the same manner as such provisions apply 

to a penalty or proceeding under section 1128A(a). 

A civil money penalty under this clause shall be in 

addition to any other penalties prescribed by law and 

in addition to any Medicare secondary payer claim 

under this title with respect to an individual. 

‘‘(ii) DEPOSIT OF AMOUNTS COLLECTED.—Any 

amounts collected pursuant to clause (i) shall be deposited in the Federal Hospital Insurance Trust Fund. 

‘‘(F) APPLICABLE PLAN.—In this paragraph, the term 

‘applicable plan’ means the following laws, plans, or other 

arrangements, including the fiduciary or administrator for 

such law, plan, or arrangement: 

‘‘(i) Liability insurance (including self-insurance). 

‘‘(ii) No fault insurance. 

‘‘(iii) Workers’ compensation laws or plans. 

‘‘(G) SHARING OF INFORMATION.—The Secretary may 

share information collected under this paragraph as necessary for purposes of the proper coordination of benefits. 

‘‘(H) IMPLEMENTATION.—Notwithstanding any other 

provision of law, the Secretary may implement this paragraph by program instruction or otherwise.’’. 

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

by this section shall be construed to limit the authority of the 

Secretary of Health and Human Services to collect information 

to carry out Medicare secondary payer provisions under title XVIII 

of the Social Security Act, including under parts C and D of such 

title. 

(c) IMPLEMENTATION.—For purposes of implementing paragraphs (7) and (8) of section 1862(b) of the Social Security Act, 

as added by subsection (a), to ensure appropriate payments under 

title XVIII of such Act, the Secretary of Health and Human Services 

shall provide for the transfer, from the Federal Hospital Insurance 

Trust Fund established under section 1817 of the Social Security 

Act (42 U.S.C. 1395i) and the Federal Supplementary Medical Insurance Trust Fund established under section 1841 of such Act (42 

U.S.C. 1395t), in such proportions as the Secretary determines 

Appropriation 

authorization. 

42 USC 1395y 

note. 

Applicability. 

Penalties. 


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121 STAT. 2500 PUBLIC LAW 110–173—DEC. 29, 2007 

appropriate, of $35,000,000 to the Centers for Medicare & Medicaid 

Services Program Management Account for the period of fiscal 

years 2008, 2009, and 2010. 

SEC. 112. PAYMENT FOR PART B DRUGS. 

(a) APPLICATION OF ALTERNATIVE VOLUME WEIGHTING IN COM- PUTATION OF ASP.—Section 1847A(b) of the Social Security Act 

(42 U.S.C. 1395w–3a(b)) is amended— 

(1) in paragraph (1)(A), by inserting ‘‘for a multiple source 

drug furnished before April 1, 2008, or 106 percent of the 

amount determined under paragraph (6) for a multiple source 

drug furnished on or after April 1, 2008’’ after ‘‘paragraph 

(3)’’; 

(2) in each of subparagraphs (A) and (B) of paragraph 

(4), by inserting ‘‘for single source drugs and biologicals furnished before April 1, 2008, and using the methodology applied 

under paragraph (6) for single source drugs and biologicals 

furnished on or after April 1, 2008,’’ after ‘‘paragraph (3)’’; 

and 

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

‘‘(6) USE OF VOLUME-WEIGHTED AVERAGE SALES PRICES IN

CALCULATION OF AVERAGE SALES PRICE.— 

‘‘(A) IN GENERAL.—For all drug products included 

within the same multiple source drug billing and payment 

code, the amount specified in this paragraph is the volumeweighted average of the average sales prices reported under 

section 1927(b)(3)(A)(iii) determined by— 

‘‘(i) computing the sum of the products (for each 

National Drug Code assigned to such drug products) 

of— 

‘‘(I) the manufacturer’s average sales price (as 

defined in subsection (c)), determined by the Secretary without dividing such price by the total 

number of billing units for the National Drug Code 

for the billing and payment code; and 

‘‘(II) the total number of units specified under 

paragraph (2) sold; and 

‘‘(ii) dividing the sum determined under clause 

(i) by the sum of the products (for each National Drug 

Code assigned to such drug products) of— 

‘‘(I) the total number of units specified under 

paragraph (2) sold; and 

‘‘(II) the total number of billing units for the 

National Drug Code for the billing and payment 

code. 

‘‘(B) BILLING UNIT DEFINED.—For purposes of this subsection, the term ‘billing unit’ means the identifiable 

quantity associated with a billing and payment code, as 

established by the Secretary.’’. 

(b) TREATMENT OF CERTAIN DRUGS.—Section 1847A(b) of the 

Social Security Act (42 U.S.C. 1395w–3a(b)), as amended by subsection (a), is amended— 

(1) in paragraph (1), by inserting ‘‘paragraph (7) and’’ after 

‘‘Subject to’’; and 

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

‘‘(7) SPECIAL RULE.—Beginning with April 1, 2008, the payment amount for— 

Effective date. 


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‘‘(A) each single source drug or biological described 

in section 1842(o)(1)(G) that is treated as a multiple source 

drug because of the application of subsection (c)(6)(C)(ii) 

is the lower of— 

‘‘(i) the payment amount that would be determined 

for such drug or biological applying such subsection; 

or 

‘‘(ii) the payment amount that would have been 

determined for such drug or biological if such subsection were not applied; and 

‘‘(B) a multiple source drug described in section 

1842(o)(1)(G) (excluding a drug or biological that is treated 

as a multiple source drug because of the application of 

such subsection) is the lower of— 

‘‘(i) the payment amount that would be determined 

for such drug or biological taking into account the 

application of such subsection; or 

‘‘(ii) the payment amount that would have been 

determined for such drug or biological if such subsection were not applied.’’. 

SEC. 113. PAYMENT RATE FOR CERTAIN DIAGNOSTIC LABORATORY 

TESTS. 

Section 1833(h) of the Social Security Act (42 U.S.C. 1395l(h)) 

is amended by adding at the end the following new paragraph: 

‘‘(9) Notwithstanding any other provision in this part, in the 

case of any diagnostic laboratory test for HbA1c that is labeled 

by the Food and Drug Administration for home use and is furnished 

on or after April 1, 2008, the payment rate for such test shall 

be the payment rate established under this part for a glycated 

hemoglobin test (identified as of October 1, 2007, by HCPCS code 

83036 (and any succeeding codes)).’’. 

SEC. 114. LONG-TERM CARE HOSPITALS. 

(a) DEFINITION OF LONG-TERM CARE HOSPITAL.—Section 1861 

of the Social Security Act (42 U.S.C. 1395x) is amended by adding 

at the end the following new subsection: 

‘‘Long-Term Care Hospital 

‘‘(ccc) The term ‘long-term care hospital’ means a hospital 

which— 

‘‘(1) is primarily engaged in providing inpatient services, 

by or under the supervision of a physician, to Medicare beneficiaries whose medically complex conditions require a long 

hospital stay and programs of care provided by a long-term 

care hospital; 

‘‘(2) has an average inpatient length of stay (as determined 

by the Secretary) of greater than 25 days, or meets the requirements of clause (II) of section 1886(d)(1)(B)(iv); 

‘‘(3) satisfies the requirements of subsection (e); and 

‘‘(4) meets the following facility criteria: 

‘‘(A) the institution has a patient review process, documented in the patient medical record, that screens patients 

prior to admission for appropriateness of admission to a 

long-term care hospital, validates within 48 hours of admission that patients meet admission criteria for long-term 

care hospitals, regularly evaluates patients throughout 


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121 STAT. 2502 PUBLIC LAW 110–173—DEC. 29, 2007 

their stay for continuation of care in a long-term care 

hospital, and assesses the available discharge options when 

patients no longer meet such continued stay criteria; 

‘‘(B) the institution has active physician involvement 

with patients during their treatment through an organized 

medical staff, physician-directed treatment with physician 

on-site availability on a daily basis to review patient 

progress, and consulting physicians on call and capable 

of being at the patient’s side within a moderate period 

of time, as determined by the Secretary; and 

‘‘(C) the institution has interdisciplinary team treatment for patients, requiring interdisciplinary teams of 

health care professionals, including physicians, to prepare 

and carry out an individualized treatment plan for each 

patient.’’. 

(b) STUDY AND REPORT ON LONG-TERM CARE HOSPITAL FACILITY

AND PATIENT CRITERIA.— 

(1) IN GENERAL.—The Secretary of Health and Human 

Services (in this section referred to as the ‘‘Secretary’’) shall 

conduct a study on the establishment of national long-term 

care hospital facility and patient criteria for purposes of determining medical necessity, appropriateness of admission, and 

continued stay at, and discharge from, long-term care hospitals. 

(2) REPORT.—Not later than 18 months after the date of 

the enactment of this Act, the Secretary shall submit to Congress a report on the study conducted under paragraph (1), 

together with recommendations for such legislation and 

administrative actions, including timelines for implementation 

of patient criteria or other actions, as the Secretary determines 

appropriate. 

(3) CONSIDERATIONS.—In conducting the study and preparing the report under this subsection, the Secretary shall 

consider— 

(A) recommendations contained in a report to Congress 

by the Medicare Payment Advisory Commission in June 

2004 for long-term care hospital-specific facility and patient 

criteria to ensure that patients admitted to long-term care 

hospitals are medically complex and appropriate to receive 

long-term care hospital services; and 

(B) ongoing work by the Secretary to evaluate and 

determine the feasibility of such recommendations. 

(c) PAYMENT FOR LONG-TERM CARE HOSPITAL SERVICES.— 

(1) NO APPLICATION OF 25 PERCENT PATIENT THRESHOLD

PAYMENT ADJUSTMENT TO FREESTANDING AND GRANDFATHERED

LTCHS.—The Secretary shall not apply, for cost reporting 

periods beginning on or after the date of the enactment of 

this Act for a 3-year period— 

(A) section 412.536 of title 42, Code of Federal Regulations, or any similar provision, to freestanding long-term 

care hospitals; and 

(B) such section or section 412.534 of title 42, Code 

of Federal Regulations, or any similar provisions, to a 

long-term care hospital identified by the amendment made 

by section 4417(a) of the Balanced Budget Act of 1997 

(Public Law 105–33). 

(2) PAYMENT FOR HOSPITALS-WITHIN-HOSPITALS.— 

42 USC 1395ww 

note. 


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PUBLIC LAW 110–173—DEC. 29, 2007 121 STAT. 2503 

(A) IN GENERAL.—Payment to an applicable long-term 

care hospital or satellite facility which is located in a rural 

area or which is co-located with an urban single or MSA 

dominant hospital under paragraphs (d)(1), (e)(1), and (e)(4) 

of section 412.534 of title 42, Code of Federal Regulations, 

shall not be subject to any payment adjustment under 

such section if no more than 75 percent of the hospital’s 

Medicare discharges (other than discharges described in 

paragraph (d)(2) or (e)(3) of such section) are admitted 

from a co-located hospital. 

(B) CO-LOCATED LONG-TERM CARE HOSPITALS AND SAT- ELLITE FACILITIES.— (i) IN GENERAL.—Payment to an applicable longterm care hospital or satellite facility which is colocated with another hospital shall not be subject to 

any payment adjustment under section 412.534 of title 

42, Code of Federal Regulations, if no more than 50 

percent of the hospital’s Medicare discharges (other 

than discharges described in paragraph (c)(3) of such 

section) are admitted from a co-located hospital. 

(ii) APPLICABLE LONG-TERM CARE HOSPITAL OR SATELLITE FACILITY DEFINED.—In this paragraph, the term 

‘‘applicable long-term care hospital or satellite facility’’ 

means a hospital or satellite facility that is subject 

to the transition rules under section 412.534(g) of title 

42, Code of Federal Regulations. 

(C) EFFECTIVE DATE.—Subparagraphs (A) and (B) shall 

apply to cost reporting periods beginning on or after the 

date of the enactment of this Act for a 3-year period. 

(3) NO APPLICATION OF VERY SHORT-STAY OUTLIER POLICY.— 

The Secretary shall not apply, for the 3-year period beginning 

on the date of the enactment of this Act, the amendments 

finalized on May 11, 2007 (72 Federal Register 26904, 26992) 

made to the short-stay outlier payment provision for longterm care hospitals contained in section 412.529(c)(3)(i) of title 

42, Code of Federal Regulations, or any similar provision. 

(4) NO APPLICATION OF ONE-TIME ADJUSTMENT TO STANDARD

AMOUNT.—The Secretary shall not, for the 3-year period beginning on the date of the enactment of this Act, make the onetime prospective adjustment to long-term care hospital prospective payment rates provided for in section 412.523(d)(3) of title 

42, Code of Federal Regulations, or any similar provision. 

(d) MORATORIUM ON THE ESTABLISHMENT OF LONG-TERM CARE

HOSPITALS, LONG-TERM CARE SATELLITE FACILITIES AND ON THE

INCREASE OF LONG-TERM CARE HOSPITAL BEDS IN EXISTING LONGTERM CARE HOSPITALS OR SATELLITE FACILITIES.— 

(1) IN GENERAL.—During the 3-year period beginning on 

the date of the enactment of this Act, the Secretary shall 

impose a moratorium for purposes of the Medicare program 

under title XVIII of the Social Security Act— 

(A) subject to paragraph (2), on the establishment and 

classification of a long-term care hospital or satellite 

facility, other than an existing long-term care hospital or 

facility; and 

(B) subject to paragraph (3), on an increase of longterm care hospital beds in existing long-term care hospitals 

or satellite facilities. 

42 USC 1395ww 

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121 STAT. 2504 PUBLIC LAW 110–173—DEC. 29, 2007 

(2) EXCEPTION FOR CERTAIN LONG-TERM CARE HOSPITALS.— The moratorium under paragraph (1)(A) shall not apply to 

a long-term care hospital that as of the date of the enactment 

of this Act— 

(A) began its qualifying period for payment as a longterm care hospital under section 412.23(e) of title 42, Code 

of Federal Regulations, on or before the date of the enactment of this Act; 

(B) has a binding written agreement with an outside, 

unrelated party for the actual construction, renovation, 

lease, or demolition for a long-term care hospital, and has 

expended, before the date of the enactment of this Act, 

at least 10 percent of the estimated cost of the project 

(or, if less, $2,500,000); or 

(C) has obtained an approved certificate of need in 

a State where one is required on or before the date of 

the enactment of this Act. 

(3) EXCEPTION FOR BED INCREASES DURING MORATORIUM.— 

(A) IN GENERAL.—Subject to subparagraph (B), the 

moratorium under paragraph (1)(B) shall not apply to an 

increase in beds in an existing hospital or satellite facility 

if the hospital or facility— 

(i) is located in a State where there is only one 

other long-term care hospital; and 

(ii) requests an increase in beds following the closure or the decrease in the number of beds of another 

long-term care hospital in the State. 

(B) NO EFFECT ON CERTAIN LIMITATION.—The exception 

under subparagraph (A) shall not effect the limitation on 

increasing beds under sections 412.22(h)(3) and 412.22(f) 

of title 42, Code of Federal Regulations. 

(4) EXISTING HOSPITAL OR SATELLITE FACILITY DEFINED.— 

For purposes of this subsection, the term ‘‘existing’’ means, 

with respect to a hospital or satellite facility, a hospital or 

satellite facility that received payment under the provisions 

of subpart O of part 412 of title 42, Code of Federal Regulations, 

as of the date of the enactment of this Act. 

(5) JUDICIAL REVIEW.—There shall be no administrative 

or judicial review under section 1869 of the Social Security 

Act (42 U.S.C. 1395ff), section 1878 of such Act (42 U.S.C. 

1395oo), or otherwise, of the application of this subsection by 

the Secretary. 

(e) LONG-TERM CARE HOSPITAL PAYMENT UPDATE.— 

(1) IN GENERAL.—Section 1886 of the Social Security Act 

(42 U.S.C. 1395ww) is amended by adding at the end the 

following new subsection: 

‘‘(m) PROSPECTIVE PAYMENT FOR LONG-TERM CARE HOSPITALS.— 

‘‘(1) REFERENCE TO ESTABLISHMENT AND IMPLEMENTATION

OF SYSTEM.—For provisions related to the establishment and 

implementation of a prospective payment system for payments 

under this title for inpatient hospital services furnished by 

a long-term care hospital described in subsection (d)(1)(B)(iv), 

see section 123 of the Medicare, Medicaid, and SCHIP Balanced 

Budget Refinement Act of 1999 and section 307(b) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000. 


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PUBLIC LAW 110–173—DEC. 29, 2007 121 STAT. 2505 

‘‘(2) UPDATE FOR RATE YEAR 2008.—In implementing the 

system described in paragraph (1) for discharges occurring 

during the rate year ending in 2008 for a hospital, the base 

rate for such discharges for the hospital shall be the same 

as the base rate for discharges for the hospital occurring during 

the rate year ending in 2007.’’. 

(2) DELAYED EFFECTIVE DATE.—Subsection (m)(2) of section 

1886 of the Social Security Act, as added by paragraph (1), 

shall not apply to discharges occurring on or after July 1, 

2007, and before April 1, 2008. 

(f) EXPANDED REVIEW OF MEDICAL NECESSITY.— (1) IN GENERAL.—The Secretary of Health and Human 

Services shall provide, under contracts with one or more appropriate fiscal intermediaries or medicare administrative contractors under section 1874A(a)(4)(G) of the Social Security Act 

(42 U.S.C. 1395kk–1(a)(4)(G)), for reviews of the medical necessity of admissions to long-term care hospitals (described in 

section 1886(d)(1)(B)(iv) of such Act) and continued stay at 

such hospitals, of individuals entitled to, or enrolled for, benefits 

under part A of title XVIII of such Act consistent with this 

subsection. Such reviews shall be made for discharges occurring 

on or after October 1, 2007. 

(2) REVIEW METHODOLOGY.—The medical necessity reviews 

under paragraph (1) shall be conducted on an annual basis 

in accordance with rules specified by the Secretary. Such 

reviews shall— 

(A) provide for a statistically valid and representative 

sample of admissions of such individuals sufficient to provide results at a 95 percent confidence interval; and 

(B) guarantee that at least 75 percent of overpayments 

received by long-term care hospitals for medically unnecessary admissions and continued stays of individuals in longterm care hospitals will be identified and recovered and 

that related days of care will not be counted toward the 

length of stay requirement contained in section 

1886(d)(1)(B)(iv) of the Social Security Act (42 U.S.C. 

1395ww(d)(1)(B)(iv)). 

(3) CONTINUATION OF REVIEWS.—Under contracts under this 

subsection, the Secretary shall establish an error rate with 

respect to such reviews that could require further review of 

the medical necessity of admissions and continued stay in the 

hospital involved and other actions as determined by the Secretary. 

(4) TERMINATION OF REQUIRED REVIEWS.— 

(A) IN GENERAL.—Subject to subparagraph (B), the previous provisions of this subsection shall cease to apply 

for discharges occurring on or after October 1, 2010. 

(B) CONTINUATION.—As of the date specified in 

subparagraph (A), the Secretary shall determine whether 

to continue to guarantee, through continued medical review 

and sampling under this paragraph, recovery of at least 

75 percent of overpayments received by long-term care 

hospitals due to medically unnecessary admissions and 

continued stays. 

(5) FUNDING.—The costs to fiscal intermediaries or medicare administrative contractors conducting the medical necessity reviews under paragraph (1) shall be funded from the 

Contracts. 

Contracts. 

42 USC 1395ww 

note. 

42 USC 1395ww 

note. 


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121 STAT. 2506 PUBLIC LAW 110–173—DEC. 29, 2007 

aggregate overpayments recouped by the Secretary of Health 

and Human Services from long-term care hospitals due to medically unnecessary admissions and continued stays. The Secretary may use an amount not in excess of 40 percent of 

the overpayments recouped under this paragraph to compensate 

the fiscal intermediaries or Medicare administrative contractors 

for the costs of services performed. 

(g) IMPLEMENTATION.—For purposes of carrying out the provisions of, and amendments made by, this title, in addition to any 

amounts otherwise provided in this title, there are appropriated 

to the Centers for Medicare & Medicaid Services Program Management Account, out of any money in the Treasury not otherwise 

appropriated, $35,000,000 for the period of fiscal years 2008 and 

2009. 

SEC. 115. PAYMENT FOR INPATIENT REHABILITATION FACILITY (IRF) 

SERVICES. 

(a) PAYMENT UPDATE.— 

(1) IN GENERAL.—Section 1886(j)(3)(C) of the Social Security 

Act (42 U.S.C. 1395ww(j)(3)(C)) is amended by adding at the 

end the following: ‘‘The increase factor to be applied under 

this subparagraph for each of fiscal years 2008 and 2009 shall 

be 0 percent.’’. 

(2) DELAYED EFFECTIVE DATE.—The amendment made by 

paragraph (1) shall not apply to payment units occurring before 

April 1, 2008. 

(b) INPATIENT REHABILITATION FACILITY CLASSIFICATION CRITERIA.— 

(1) IN GENERAL.—Section 5005 of the Deficit Reduction 

Act of 2005 (Public Law 109–171; 42 U.S.C. 1395ww note) 

is amended— 

(A) in subsection (a), by striking ‘‘apply the applicable 

percent specified in subsection (b)’’ and inserting ‘‘require 

a compliance rate that is no greater than the 60 percent 

compliance rate that became effective for cost reporting 

periods beginning on or after July 1, 2006,’’; and 

(B) by amending subsection (b) to read as follows: 

‘‘(b) CONTINUED USE OF COMORBIDITIES.—For cost reporting 

periods beginning on or after July 1, 2007, the Secretary shall 

include patients with comorbidities as described in section 

412.23(b)(2)(i) of title 42, Code of Federal Regulations (as in effect 

as of January 1, 2007), in the inpatient population that counts 

toward the percent specified in subsection (a).’’. 

(2) EFFECTIVE DATE.—The amendment made by paragraph 

(1)(A) shall apply for cost reporting periods beginning on or 

after July 1, 2007. 

(c) RECOMMENDATIONS FOR CLASSIFYING INPATIENT REHABILITATION HOSPITALS AND UNITS.— 

(1) REPORT TO CONGRESS.—Not later than 18 months after 

the date of the enactment of this Act, the Secretary of Health 

and Human Services, in consultation with physicians (including 

geriatricians and physiatrists), administrators of inpatient 

rehabilitation, acute care hospitals, skilled nursing facilities, 

and other settings providing rehabilitation services, Medicare 

beneficiaries, trade organizations representing inpatient 

rehabilitation hospitals and units and skilled nursing facilities, 

and the Medicare Payment Advisory Commission, shall submit 

42 USC 1395ww 

note. 

42 USC 1395ww 

note. 

Appropriation 

authorization. 


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PUBLIC LAW 110–173—DEC. 29, 2007 121 STAT. 2507 

to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a 

report that includes the following: 

(A) An analysis of Medicare beneficiaries’ access to 

medically necessary rehabilitation services, including the 

potential effect of the 75 percent rule (as defined in paragraph (2)) on access to care. 

(B) An analysis of alternatives or refinements to the 

75 percent rule policy for determining criteria for inpatient 

rehabilitation hospital and unit designation under the 

Medicare program, including alternative criteria which 

would consider a patient’s functional status, diagnosis, comorbidities, and other relevant factors. 

(C) An analysis of the conditions for which individuals 

are commonly admitted to inpatient rehabilitation hospitals 

that are not included as a condition described in section 

412.23(b)(2)(iii) of title 42, Code of Federal Regulations, 

to determine the appropriate setting of care, and any variation in patient outcomes and costs, across settings of 

care, for treatment of such conditions. 

(2) 75 PERCENT RULE DEFINED.—For purposes of this subsection, the term ‘‘75 percent rule’’ means the requirement 

of section 412.23(b)(2) of title 42, Code of Federal Regulations, 

that 75 percent of the patients of a rehabilitation hospital 

or converted rehabilitation unit are in 1 or more of 13 listed 

treatment categories. 

SEC. 116. EXTENSION OF ACCOMMODATION OF PHYSICIANS ORDERED 

TO ACTIVE DUTY IN THE ARMED SERVICES. 

Section 1842(b)(6)(D)(iii) of the Social Security Act (42 U.S.C. 

1395u(b)(6)(D)(iii)), as amended by Public Law 110–54 (121 Stat. 

551) is amended by striking ‘‘January 1, 2008’’ and inserting ‘‘July 

1, 2008’’. 

SEC. 117. TREATMENT OF CERTAIN HOSPITALS. 

(a) EXTENDING CERTAIN MEDICARE HOSPITAL WAGE INDEX

RECLASSIFICATIONS THROUGH FISCAL YEAR 2008.— 

(1) IN GENERAL.—Section 106(a) of division B of the Tax 

Relief and Health Care Act of 2006 (42 U.S.C. 1395 note) 

is amended by striking ‘‘September 30, 2007’’ and inserting 

‘‘September 30, 2008’’. 

(2) SPECIAL EXCEPTION RECLASSIFICATIONS.—The Secretary 

of Health and Human Services shall extend for discharges 

occurring through September 30, 2008, the special exception 

reclassifications made under the authority of section 

1886(d)(5)(I)(i) of the Social Security Act (42 U.S.C. 

1395ww(d)(5)(I)(i)) and contained in the final rule promulgated 

by the Secretary in the Federal Register on August 11, 2004 

(69 Fed. Reg. 49105, 49107). 

(3) USE OF PARTICULAR WAGE INDEX.—For purposes of 

implementation of this subsection, the Secretary shall use the 

hospital wage index that was promulgated by the Secretary 

in the Federal Register on October 10, 2007 (72 Fed. Reg. 

57634), and any subsequent corrections. 

(b) DISREGARDING SECTION 508 HOSPITAL RECLASSIFICATIONS

FOR PURPOSES OF GROUP RECLASSIFICATIONS.—Section 508 of the 

Medicare Prescription Drug, Improvement, and Modernization Act 

42 USC 1395ww 

note. 

42 USC 1395ww 

note. 


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121 STAT. 2508 PUBLIC LAW 110–173—DEC. 29, 2007 

of 2003 (Public Law 108–173, 42 U.S.C. 1395ww note) is amended 

by adding at the end the following new subsection: 

‘‘(g) DISREGARDING HOSPITAL RECLASSIFICATIONS FOR PURPOSES

OF GROUP RECLASSIFICATIONS.—For purposes of the reclassification 

of a group of hospitals in a geographic area under section 1886(d) 

of the Social Security Act for purposes of discharges occurring 

during fiscal year 2008, a hospital reclassified under this section 

(including any such reclassification which is extended under section 

106(a) of the Medicare Improvements and Extension Act of 2006) 

shall not be taken into account and shall not prevent the other 

hospitals in such area from continuing such a group for such purpose.’’. 

(c) CORRECTION OF APPLICATION OF WAGE INDEX DURING TAX

RELIEF AND HEALTH CARE ACT EXTENSION.—In the case of a subsection (d) hospital (as defined for purposes of section 1886 of 

the Social Security Act (42 U.S.C. 1395ww)) with respect to which— 

(1) a reclassification of its wage index for purposes of 

such section was extended for the period beginning on April 

1, 2007, and ending on September 30, 2007, pursuant to subsection (a) of section 106 of division B of the Tax Relief and 

Health Care Act of 2006 (42 U.S.C. 1395 note); and 

(2) the wage index applicable for such hospital during 

such period was lower than the wage index applicable for 

such hospital during the period beginning on October 1, 2006, 

and ending on March 31, 2007, 

the Secretary shall apply the higher wage index that was applicable 

for such hospital during the period beginning on October 1, 2006, 

and ending on March 31, 2007, for the entire fiscal year 2007. 

If the Secretary determines that the application of the preceding 

sentence to a hospital will result in a hospital being owed additional 

reimbursement, the Secretary shall make such payments within 

90 days after the settlement of the applicable cost report. 

SEC. 118. ADDITIONAL FUNDING FOR STATE HEALTH INSURANCE 

ASSISTANCE PROGRAMS, AREA AGENCIES ON AGING, AND 

AGING AND DISABILITY RESOURCE CENTERS. 

(a) STATE HEALTH INSURANCE ASSISTANCE PROGRAMS.— 

(1) IN GENERAL.—The Secretary of Health and Human 

Services shall use amounts made available under paragraph 

(2) to make grants to States for State health insurance assistance programs receiving assistance under section 4360 of the 

Omnibus Budget Reconciliation Act of 1990. 

(2) FUNDING.—For purposes of making grants under this 

subsection, the Secretary shall provide for the transfer, from 

the Federal Hospital Insurance Trust Fund under section 1817 

of the Social Security Act (42 U.S.C. 1395i) and the Federal 

Supplementary Medical Insurance Trust Fund under section 

1841 of such Act (42 U.S.C. 1395t), in the same proportion 

as the Secretary determines under section 1853(f) of such Act 

(42 U.S.C. 1395w–23(f)), of $15,000,000 to the Centers for Medicare & Medicaid Services Program Management Account for 

fiscal year 2008. 

(b) AREA AGENCIES ON AGING AND AGING AND DISABILITY

RESOURCE CENTERS.— 

(1) IN GENERAL.—The Secretary of Health and Human 

Services shall use amounts made available under paragraph 

(2) to make grants— 

Grants. 

Deadline. 

42 USC 1395ww 

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PUBLIC LAW 110–173—DEC. 29, 2007 121 STAT. 2509 

(A) to States for area agencies on aging (as defined 

in section 102 of the Older Americans Act of 1965 (42 

U.S.C. 3002)); and 

(B) to Aging and Disability Resource Centers under 

the Aging and Disability Resource Center grant program. 

(2) FUNDING.—For purposes of making grants under this 

subsection, the Secretary shall provide for the transfer, from 

the Federal Hospital Insurance Trust Fund under section 1817 

of the Social Security Act (42 U.S.C. 1395i) and the Federal 

Supplementary Medical Insurance Trust Fund under section 

1841 of such Act (42 U.S.C. 1395t), in the same proportion 

as the Secretary determines under section 1853(f) of such Act 

(42 U.S.C. 1395w–23(f)), of $5,000,000 to the Centers for Medicare & Medicaid Services Program Management Account for 

the period of fiscal years 2008 through 2009. 

TITLE II—MEDICAID AND SCHIP 

SEC. 201. EXTENDING SCHIP FUNDING THROUGH MARCH 31, 2009. 

(a) THROUGH THE SECOND QUARTER OF FISCAL YEAR 2009.— 

(1) IN GENERAL.—Section 2104 of the Social Security Act 

(42 U.S.C. 1397dd) is amended— 

(A) in subsection (a)— 

(i) by striking ‘‘and’’ at the end of paragraph (9); 

(ii) by striking the period at the end of paragraph 

(10) and inserting ‘‘; and’’; and 

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

‘‘(11) for each of fiscal years 2008 and 2009, 

$5,000,000,000.’’; and 

(B) in subsection (c)(4)(B), by striking ‘‘for fiscal year 

2007’’ and inserting ‘‘for each of fiscal years 2007 through 

2009’’. 

(2) AVAILABILITY OF EXTENDED FUNDING.—Funds made 

available from any allotment made from funds appropriated 

under subsection (a)(11) or (c)(4)(B) of section 2104 of the 

Social Security Act (42 U.S.C. 1397dd) for fiscal year 2008 

or 2009 shall not be available for child health assistance for 

items and services furnished after March 31, 2009, or, if earlier, 

the date of the enactment of an Act that provides funding 

for fiscal years 2008 and 2009, and for one or more subsequent 

fiscal years for the State Children’s Health Insurance Program 

under title XXI of the Social Security Act. 

(3) END OF FUNDING UNDER CONTINUING RESOLUTION.— 

Section 136(a)(2) of Public Law 110–92 is amended by striking 

‘‘after the termination date’’ and all that follows and inserting 

‘‘after the date of the enactment of the Medicare, Medicaid, 

and SCHIP Extension Act of 2007.’’. 

(4) CLARIFICATION OF APPLICATION OF FUNDING UNDER CONTINUING RESOLUTION.—Section 107 of Public Law 110–92 shall 

apply with respect to expenditures made pursuant to section 

136(a)(1) of such Public Law. 

(b) EXTENSION OF TREATMENT OF QUALIFYING STATES; RULES

ON REDISTRIBUTION OF UNSPENT FISCAL YEAR 2005 ALLOTMENTS

MADE PERMANENT.— 

Ante, p. 994. 


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121 STAT. 2510 PUBLIC LAW 110–173—DEC. 29, 2007 

(1) IN GENERAL.—Section 2105(g)(1)(A) of the Social Security Act (42 U.S.C. 1397ee(g)(1)(A)), as amended by subsection 

(d) of section 136 of Public Law 110–92, is amended by striking 

‘‘or 2008’’ and inserting ‘‘2008, or 2009’’. 

(2) APPLICABILITY.—The amendment made by paragraph 

(1) shall be in effect through March 31, 2009. 

(3) CERTAIN RULES MADE PERMANENT.—Subsection (e) of 

section 136 of Public Law 110–92 is repealed. 

(c) ADDITIONAL ALLOTMENTS TO ELIMINATE REMAINING

FUNDING SHORTFALLS THROUGH MARCH 31, 2009.— 

(1) IN GENERAL.—Section 2104 of the Social Security Act 

(42 U.S.C. 1397dd) is amended by adding at the end the following new subsections: 

‘‘(j) ADDITIONAL ALLOTMENTS TO ELIMINATE FUNDING SHORTFALLS FOR FISCAL YEAR 2008.— 

‘‘(1) APPROPRIATION; ALLOTMENT AUTHORITY.—For the purpose of providing additional allotments described in subparagraphs (A) and (B) of paragraph (3), there is appropriated, 

out of any money in the Treasury not otherwise appropriated, 

such sums as may be necessary, not to exceed $1,600,000,000 

for fiscal year 2008. 

‘‘(2) SHORTFALL STATES DESCRIBED.—For purposes of paragraph (3), a shortfall State described in this paragraph is 

a State with a State child health plan approved under this 

title for which the Secretary estimates, on the basis of the 

most recent data available to the Secretary as of November 

30, 2007, that the Federal share amount of the projected 

expenditures under such plan for such State for fiscal year 

2008 will exceed the sum of— 

‘‘(A) the amount of the State’s allotments for each 

of fiscal years 2006 and 2007 that will not be expended 

by the end of fiscal year 2007; 

‘‘(B) the amount, if any, that is to be redistributed 

to the State during fiscal year 2008 in accordance with 

subsection (i); and 

‘‘(C) the amount of the State’s allotment for fiscal year 

2008. 

‘‘(3) ALLOTMENTS.—In addition to the allotments provided 

under subsections (b) and (c), subject to paragraph (4), of the 

amount available for the additional allotments under paragraph 

(1) for fiscal year 2008, the Secretary shall allot— 

‘‘(A) to each shortfall State described in paragraph 

(2) not described in subparagraph (B), such amount as 

the Secretary determines will eliminate the estimated 

shortfall described in such paragraph for the State; and 

‘‘(B) to each commonwealth or territory described in 

subsection (c)(3), an amount equal to the percentage specified in subsection (c)(2) for the commonwealth or territory 

multiplied by 1.05 percent of the sum of the amounts 

determined for each shortfall State under subparagraph 

(A). 

‘‘(4) PRORATION RULE.—If the amounts available for additional allotments under paragraph (1) are less than the total 

of the amounts determined under subparagraphs (A) and (B) 

of paragraph (3), the amounts computed under such subparagraphs shall be reduced proportionally. 

Ante, p. 994. 

42 USC 1397ee 

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PUBLIC LAW 110–173—DEC. 29, 2007 121 STAT. 2511 

‘‘(5) RETROSPECTIVE ADJUSTMENT.—The Secretary may 

adjust the estimates and determinations made to carry out 

this subsection as necessary on the basis of the amounts 

reported by States not later than November 30, 2008, on CMS 

Form 64 or CMS Form 21, as the case may be, and as approved 

by the Secretary. 

‘‘(6) ONE-YEAR AVAILABILITY; NO REDISTRIBUTION OF UNEX- PENDED ADDITIONAL ALLOTMENTS.—Notwithstanding subsections (e) and (f), amounts allotted to a State pursuant to 

this subsection for fiscal year 2008, subject to paragraph (5), 

shall only remain available for expenditure by the State through 

September 30, 2008. Any amounts of such allotments that 

remain unexpended as of such date shall not be subject to 

redistribution under subsection (f). 

‘‘(k) REDISTRIBUTION OF UNUSED FISCAL YEAR 2006 ALLOT- MENTS TO STATES WITH ESTIMATED FUNDING SHORTFALLS DURING

THE FIRST 2 QUARTERS OF FISCAL YEAR 2009.— 

‘‘(1) IN GENERAL.—Notwithstanding subsection (f) and subject to paragraphs (3) and (4), with respect to months beginning 

during the first 2 quarters of fiscal year 2009, the Secretary 

shall provide for a redistribution under such subsection from 

the allotments for fiscal year 2006 under subsection (b) that 

are not expended by the end of fiscal year 2008, to a fiscal 

year 2009 shortfall State described in paragraph (2), such 

amount as the Secretary determines will eliminate the estimated shortfall described in such paragraph for such State 

for the month. 

‘‘(2) FISCAL YEAR 2009 SHORTFALL STATE DESCRIBED.—A 

fiscal year 2009 shortfall State described in this paragraph 

is a State with a State child health plan approved under 

this title for which the Secretary estimates, on a monthly 

basis using the most recent data available to the Secretary 

as of such month, that the Federal share amount of the projected expenditures under such plan for such State for the 

first 2 quarters of fiscal year 2009 will exceed the sum of— 

‘‘(A) the amount of the State’s allotments for each 

of fiscal years 2007 and 2008 that was not expended by 

the end of fiscal year 2008; and 

‘‘(B) the amount of the State’s allotment for fiscal year 

2009. 

‘‘(3) FUNDS REDISTRIBUTED IN THE ORDER IN WHICH STATES

REALIZE FUNDING SHORTFALLS.—The Secretary shall redistribute the amounts available for redistribution under paragraph (1) to fiscal year 2009 shortfall States described in paragraph (2) in the order in which such States realize monthly 

funding shortfalls under this title for fiscal year 2009. The 

Secretary shall only make redistributions under this subsection 

to the extent that there are unexpended fiscal year 2006 allotments under subsection (b) available for such redistributions. 

‘‘(4) PRORATION RULE.—If the amounts available for redistribution under paragraph (1) are less than the total amounts 

of the estimated shortfalls determined for the month under 

that paragraph, the amount computed under such paragraph 

for each fiscal year 2009 shortfall State for the month shall 

be reduced proportionally. 

‘‘(5) RETROSPECTIVE ADJUSTMENT.—The Secretary may 

adjust the estimates and determinations made to carry out 

Deadline. 


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121 STAT. 2512 PUBLIC LAW 110–173—DEC. 29, 2007 

this subsection as necessary on the basis of the amounts 

reported by States not later than May 31, 2009, on CMS Form 

64 or CMS Form 21, as the case may be, and as approved 

by the Secretary. 

‘‘(6) AVAILABILITY; NO FURTHER REDISTRIBUTION.—Notwithstanding subsections (e) and (f), amounts redistributed to a 

State pursuant to this subsection for the first 2 quarters of 

fiscal year 2009 shall only remain available for expenditure 

by the State through March 31, 2009, and any amounts of 

such redistributions that remain unexpended as of such date, 

shall not be subject to redistribution under subsection (f). 

‘‘(l) ADDITIONAL ALLOTMENTS TO ELIMINATE FUNDING SHORT- FALLS FOR THE FIRST 2 QUARTERS OF FISCAL YEAR 2009.— 

‘‘(1) APPROPRIATION; ALLOTMENT AUTHORITY.—For the purpose of providing additional allotments described in subparagraphs (A) and (B) of paragraph (3), there is appropriated, 

out of any money in the Treasury not otherwise appropriated, 

such sums as may be necessary, not to exceed $275,000,000 

for the first 2 quarters of fiscal year 2009. 

‘‘(2) SHORTFALL STATES DESCRIBED.—For purposes of paragraph (3), a shortfall State described in this paragraph is 

a State with a State child health plan approved under this 

title for which the Secretary estimates, on the basis of the 

most recent data available to the Secretary, that the Federal 

share amount of the projected expenditures under such plan 

for such State for the first 2 quarters of fiscal year 2009 

will exceed the sum of— 

‘‘(A) the amount of the State’s allotments for each 

of fiscal years 2007 and 2008 that will not be expended 

by the end of fiscal year 2008; 

‘‘(B) the amount, if any, that is to be redistributed 

to the State during fiscal year 2009 in accordance with 

subsection (k); and 

‘‘(C) the amount of the State’s allotment for fiscal year 

2009. 

‘‘(3) ALLOTMENTS.—In addition to the allotments provided 

under subsections (b) and (c), subject to paragraph (4), of the 

amount available for the additional allotments under paragraph 

(1) for the first 2 quarters of fiscal year 2009, the Secretary 

shall allot— 

‘‘(A) to each shortfall State described in paragraph 

(2) not described in subparagraph (B) such amount as 

the Secretary determines will eliminate the estimated 

shortfall described in such paragraph for the State; and 

‘‘(B) to each commonwealth or territory described in 

subsection (c)(3), an amount equal to the percentage specified in subsection (c)(2) for the commonwealth or territory 

multiplied by 1.05 percent of the sum of the amounts 

determined for each shortfall State under subparagraph 

(A). 

‘‘(4) PRORATION RULE.—If the amounts available for additional allotments under paragraph (1) are less than the total 

of the amounts determined under subparagraphs (A) and (B) 

of paragraph (3), the amounts computed under such subparagraphs shall be reduced proportionally. 

‘‘(5) RETROSPECTIVE ADJUSTMENT.—The Secretary may 

adjust the estimates and determinations made to carry out 

Deadline. 


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PUBLIC LAW 110–173—DEC. 29, 2007 121 STAT. 2513 

this subsection as necessary on the basis of the amounts 

reported by States not later than May 31, 2009, on CMS Form 

64 or CMS Form 21, as the case may be, and as approved 

by the Secretary. 

‘‘(6) AVAILABILITY; NO REDISTRIBUTION OF UNEXPENDED

ADDITIONAL ALLOTMENTS.—Notwithstanding subsections (e) and 

(f), amounts allotted to a State pursuant to this subsection 

for fiscal year 2009, subject to paragraph (5), shall only remain 

available for expenditure by the State through March 31, 2009. 

Any amounts of such allotments that remain unexpended as 

of such date shall not be subject to redistribution under subsection (f).’’. 

SEC. 202. EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA) 

AND ABSTINENCE EDUCATION PROGRAM. 

Section 401 of division B of the Tax Relief and Health Care 

Act of 2006 (Public Law 109–432, 120 Stat. 2994), as amended 

by section 1 of Public Law 110–48 (121 Stat. 244) and section 

2 of the TMA, Abstinence, Education, and QI Programs Extension 

Act of 2007 (Public Law 110–90, 121 Stat. 984), is amended— 

(1) by striking ‘‘December 31, 2007’’ and inserting ‘‘June 

30, 2008’’; and 

(2) by striking ‘‘first quarter’’ and inserting ‘‘third quarter’’ 

each place it appears. 

SEC. 203. EXTENSION OF QUALIFYING INDIVIDUAL (QI) PROGRAM. 

(a) EXTENSION.—Section 1902(a)(10)(E)(iv) of the Social Security 

Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended by striking 

‘‘December 2007’’ and inserting ‘‘June 2008’’. 

(b) EXTENDING TOTAL AMOUNT AVAILABLE FOR ALLOCATION.— 

Section 1933(g)(2) of the Social Security Act (42 U.S.C. 1396u– 

3(g)(2)) is amended— 

(1) in subparagraph (G), by striking ‘‘and’’ at the end; 

(2) in subparagraph (H), by striking the period at the 

end and inserting ‘‘; and’’; and 

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

‘‘(I) for the period that begins on January 1, 2008, 

and ends on June 30, 2008, the total allocation amount 

is $200,000,000.’’. 

SEC. 204. MEDICAID DSH EXTENSION. 

Section 1923(f)(6) of the Social Security Act (42 U.S.C. 1396r– 

4(f)(6)) is amended— 

(1) in the heading, by inserting ‘‘AND PORTIONS OF FISCAL

YEAR 2008’’ after ‘‘FISCAL YEAR 2007’’; and 

(2) in subparagraph (A)— 

(A) in clause (i), by adding at the end (after and below 

subclause (II)) the following: 

‘‘Only with respect to fiscal year 2008 for the period 

ending on June 30, 2008, the DSH allotment for Tennessee for such portion of the fiscal year, notwithstanding such table or terms, shall be 3⁄4 of the amount 

specified in the previous sentence for fiscal year 2007.’’; 

(B) in clause (ii)— 

(i) by inserting ‘‘or for a period in fiscal year 2008 

described in clause (i)’’ after ‘‘fiscal year 2007’’; and 

(ii) by inserting ‘‘or period’’ after ‘‘such fiscal year’’; 

and 

Tennessee. 


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121 STAT. 2514 PUBLIC LAW 110–173—DEC. 29, 2007 

(C) in clause (iv)— 

(i) in the heading, by inserting ‘‘AND FISCAL YEAR

2008’’ after ‘‘FISCAL YEAR 2007’’; 

(ii) in subclause (I)— 

(I) by inserting ‘‘or for a period in fiscal year 

2008 described in clause (i)’’ after ‘‘fiscal year 

2007’’; and 

(II) by inserting ‘‘or period’’ after ‘‘for such 

fiscal year’’; and 

(iii) in subclause (II)— 

(I) by inserting ‘‘or for a period in fiscal year 

2008 described in clause (i)’’ after ‘‘fiscal year 

2007’’; and 

(II) by inserting ‘‘or period’’ after ‘‘such fiscal 

year’’ each place it appears; and 

(3) in subparagraph (B)(i), by adding at the end the following: ‘‘Only with respect to fiscal year 2008 for the period 

ending on June 30, 2008, the DSH allotment for Hawaii for 

such portion of the fiscal year, notwithstanding the table set 

forth in paragraph (2), shall be $7,500,000.’’. 

SEC. 205. IMPROVING DATA COLLECTION. 

Section 2109(b)(2) of the Social Security Act (42 U.S.C. 

1397ii(b)(2)) is amended by inserting before the period at the end 

the following ‘‘(except that only with respect to fiscal year 2008, 

there are appropriated $20,000,000 for the purpose of carrying 

out this subsection, to remain available until expended)’’. 

SEC. 206. MORATORIUM ON CERTAIN PAYMENT RESTRICTIONS. 

Notwithstanding any other provision of law, the Secretary of 

Health and Human Services shall not, prior to June 30, 2008, 

take any action (through promulgation of regulation, issuance of 

regulatory guidance, use of Federal payment audit procedures, or 

other administrative action, policy, or practice, including a Medical 

Assistance Manual transmittal or letter to State Medicaid directors) 

to impose any restrictions relating to coverage or payment under 

title XIX of the Social Security Act for rehabilitation services or 

school-based administration and school-based transportation if such 

restrictions are more restrictive in any aspect than those applied 

to such areas as of July 1, 2007. 

TITLE III—MISCELLANEOUS 

SEC. 301. MEDICARE PAYMENT ADVISORY COMMISSION STATUS. 

Section 1805(a) of the Social Security Act (42 U.S.C. 1395b– 

6(a)) is amended by inserting ‘‘as an agency of Congress’’ after 

‘‘established’’. 

SEC. 302. SPECIAL DIABETES PROGRAMS FOR TYPE I DIABETES AND 

INDIANS. 

(a) SPECIAL DIABETES PROGRAMS FOR TYPE I DIABETES.—Section 330B(b)(2)(C) of the Public Health Service Act (42 U.S.C. 254c– 

2(b)(2)(C)) is amended by striking ‘‘2008’’ and inserting ‘‘2009’’. 

Hawaii. 


jbridges on POFP91QD1 with PUBLIC LAWS
PUBLIC LAW 110–173—DEC. 29, 2007 121 STAT. 2515 

LEGISLATIVE HISTORY—S. 2499: 

CONGRESSIONAL RECORD, Vol. 153 (2007): 

Dec. 18, considered and passed Senate. 

Dec. 19, considered and passed House. 

Æ 

(b) SPECIAL DIABETES PROGRAMS FOR INDIANS.—Section 

330C(c)(2)(C) of the Public Health Service Act (42 U.S.C. 254c– 

3(c)(2)(C)) is amended by striking ‘‘2008’’ and inserting ‘‘2009’’. 

Approved December 29, 2007. 


jbridges on POFP91QD1 with PUBLIC LAWS