```

[110th Congress Public Law 173]
[From the U.S. Government Printing Office]

[DOCID: f:publ173.110]

[[Page 2491]]

           MEDICARE, MEDICAID, AND SCHIP EXTENSION ACT OF 2007

[[Page 121 STAT. 2492]]

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 <<NOTE: Dec. 29, 2007 -  [S. 2499]>> other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress <<NOTE: Medicare, Medicaid, and 
SCHIP Extension Act of 2007.>> assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) In <<NOTE: 42 USC 1305 note.>> 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.

[[Page 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

[[Page 121 STAT. 2494]]

                                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 <<NOTE: 42 USC 1395w-4 note.>> 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 <<NOTE: 42 USC 1395w-4 note.>> 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:

[[Page 121 STAT. 2495]]

                    ``(F) Extension.--For 2008 and 
                2009, <<NOTE: Criteria.>> 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 <<NOTE: Appropriation 
authorization.>> 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

[[Page 121 STAT. 2496]]

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. <<NOTE: 42 USC 1395l note.>> 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) <<NOTE: 42 USC 1395w-21 note.>> 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

[[Page 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 <<NOTE: Penalties.>> 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

[[Page 121 STAT. 2498]]

                      $1,000 for each day of noncompliance for each 
                      individual for which the information under such 
                      subparagraph should have been 
                      submitted. <<NOTE: Applicability.>> 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.

[[Page 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 <<NOTE: Penalties.>> 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. <<NOTE: Applicability.>> 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 <<NOTE: 42 USC 1395y note.>> 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 <<NOTE: Appropriation 
authorization.>> 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

[[Page 121 STAT. 2500]]

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 Computation 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 
                volume-weighted 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 <<NOTE: Effective date.>> rule.--Beginning 
        with April 1, 2008, the payment amount for--

[[Page 121 STAT. 2501]]

                    ``(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

[[Page 121 STAT. 2502]]

                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 <<NOTE: 42 USC 1395ww note.>> 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.--

[[Page 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 
                satellite facilities.--
                          (i) In general.--Payment to an applicable 
                      long-term care hospital or satellite facility 
                      which is co-located 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 long-term 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 
        one-time 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 <<NOTE: 42 USC 1395ww note.>> 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 Long-Term 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 
                long-term care hospital beds in existing long-term care 
                hospitals or satellite facilities.

[[Page 121 STAT. 2504]]

            (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 
                long-term 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.

[[Page 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 <<NOTE: 42 USC 1395ww note.>> 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 <<NOTE: 42 USC 1395ww note.>> Review of Medical 
Necessity.--
            (1) In <<NOTE: Contracts.>> 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 long-term 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 <<NOTE: Contracts.>> 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

[[Page 121 STAT. 2506]]

        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 <<NOTE: Appropriation 
authorization.>> 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 <<NOTE: 42 USC 1395ww note.>> 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 <<NOTE: 42 USC 1395ww note.>> 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

[[Page 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, co-morbidities, 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 <<NOTE: 42 USC 1395ww note.>> 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 <<NOTE: 42 USC 1395ww note.>> 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

[[Page 121 STAT. 2508]]

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 <<NOTE: 42 USC 1395ww note.>> 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 <<NOTE: Deadline.>> 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. <<NOTE: Grants.>> 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--

[[Page 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 <<NOTE: Ante, p. 
        994.>> 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.--

[[Page 121 STAT. 2510]]

            (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 <<NOTE: 42 USC 1397ee 
        note.>> 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 <<NOTE: Ante, p. 994.>> 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.

[[Page 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 unexpended 
        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 Allotments 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 <<NOTE: Deadline.>> adjustment.--The 
        Secretary may adjust the estimates and determinations made to 
        carry out

[[Page 121 STAT. 2512]]

        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 Shortfalls 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 <<NOTE: Deadline.>> adjustment.--The 
        Secretary may adjust the estimates and determinations made to 
        carry out

[[Page 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 <<NOTE: Tennessee.>> 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

[[Page 121 STAT. 2514]]

                    (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 <<NOTE: Hawaii.>> 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''.

[[Page 121 STAT. 2515]]

    (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.

LEGISLATIVE HISTORY--S. 2499:
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CONGRESSIONAL RECORD, Vol. 153 (2007):
            Dec. 18, considered and passed Senate.
            Dec. 19, considered and passed House.

                                  <all>
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