I 

112TH CONGRESS 

1ST SESSION H. R. 2013 

To empower States with programmatic flexibility and financial predictability 

to improve their Medicaid programs and State Children’s Health Insurance Programs by ensuring better health care for low-income pregnant 

women, children, and families, and for elderly individuals and disabled 

individuals in need of long-term care services and supports, whose income 

and resources are insufficient to meet the costs of necessary medical 

services. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 26, 2011 

Mr. NUNES introduced the following bill; which was referred to the Committee 

on Energy and Commerce, and in addition to the Committees on Ways 

and Means, Education and the Workforce, House Administration, Natural Resources, the Judiciary, Rules, and Appropriations, for a period to 

be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee 

concerned 

A BILL 

To empower States with programmatic flexibility and financial predictability to improve their Medicaid programs 

and State Children’s Health Insurance Programs by ensuring better health care for low-income pregnant 

women, children, and families, and for elderly individuals 

and disabled individuals in need of long-term care services and supports, whose income and resources are insufficient to meet the costs of necessary medical services. 


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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Medicaid Improvement and State Empowerment Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Sustainable Medicaid and CHIP programs that meet the needs of each 

State. 

‘‘PART B—TAXPAYER-PROVIDED PASS-THROUGH FUNDING OF HEALTH

CARE GRANTS TO STATES FOR PREGNANT WOMEN, LOW-INCOME CHILDREN, AND LOW-INCOME FAMILIES AND FOR LONG-TERM CARE SERVICES

AND SUPPORTS FOR LOW-INCOME ELDERLY OR DISABLED INDIVIDUALS

‘‘Sec. 1950. Purposes; application. 

‘‘Sec. 1951. State plans. 

‘‘Sec. 1952. Grants to States. 

‘‘Sec. 1953. Use of grants. 

‘‘Sec. 1954. Administrative provisions. 

‘‘Sec. 1955. Penalties. 

‘‘Sec. 1956. Appeal of adverse decision. 

‘‘Sec. 1957. Annual Reports. 

‘‘Sec. 1958. Definitions. 

Sec. 3. Medical malpractice reform State incentive fund. 

Sec. 4. Repeals. 

Sec. 5. Development of new formula for Federal financial participation for 

State child support and welfare programs to replace the 

FMAP. 

8 SEC. 2. SUSTAINABLE MEDICAID AND CHIP PROGRAMS 

9 THAT MEET THE NEEDS OF EACH STATE. 

10 (a) IN GENERAL.—Title XIX of the Social Security 

11 Act (42 U.S.C. 1396 et seq.) is amended— 

12 (1) by inserting after section 1900, the fol13 lowing: 


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1 ‘‘PART A—FMAP-BASED ACUTE CARE STATE HEALTH

2 PROGRAMS FOR THE ELDERLY AND DISABLED’’; 

3 and 

4 (2) by adding at the end the following: 

5 ‘‘PART B—TAXPAYER-PROVIDED PASS-THROUGH FUND6 ING OF HEALTH CARE GRANTS TO STATES FOR

7 PREGNANT WOMEN, LOW-INCOME CHILDREN, AND

8 LOW-INCOME FAMILIES AND FOR LONG-TERM CARE

9 SERVICES AND SUPPORTS FOR LOW-INCOME EL10 DERLY OR DISABLED INDIVIDUALS

11 ‘‘PURPOSES; APPLICATION

12 ‘‘SEC. 1950. (a) IN GENERAL.—The purposes of this 

13 part are to empower States with programmatic flexibility 

14 and financial predictability in designing and operating 

15 State programs to— 

16 ‘‘(1) provide medical assistance for pregnant 

17 women, low-income children, and low-income families 

18 with children whose income and resources are insuf19 ficient to meet the costs of necessary medical serv20 ices and rehabilitation and other services to help 

21 such women, children, and families attain or retain 

22 capability for independence or self-care; and 

23 ‘‘(2) provide long-term care services and sup24 ports for low-income elderly or disabled individuals 

25 whose income and resources are insufficient to meet 


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1 the costs of such services and supports and rehabili2 tation and other services to help such individuals at3 tain or retain capability for independence or self4 care. 

5 ‘‘(b) APPLICATION.— 

6 ‘‘(1) IN GENERAL.—Except as provided in para7 graph (2) and section 1951(a)(1)(B)(iv), with re8 spect to a State, on and after January 1, 2013: 

9 ‘‘(A) Medical assistance for pregnant 

10 women, low-income children, or low-income fam11 ilies with children shall be provided only in ac12 cordance with the provisions of this part and 

13 the provisions of title XI applicable to the provi14 sion of such assistance. 

15 ‘‘(B) Long-term care services and supports 

16 for low-income elderly or disabled individuals 

17 (including dual eligible individuals) shall only be 

18 provided in accordance with the provisions of 

19 this part and the provisions of title XI applica20 ble to the provision of such services and sup21 ports. 

22 ‘‘(C) The provisions of part A of this title 

23 shall no longer apply to a State program estab24 lished under this title to provide medical assist25 ance for pregnant women, low-income children, 


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1 or low-income families with children or to pro2 vide long-term care services and supports to 

3 low-income elderly or disabled individuals and 

4 the provisions of any drug rebate agreement 

5 that is in effect under section 1927 on that 

6 date that relate to the provision of medical as7 sistance for covered outpatient drugs for such 

8 women, children, or families or to the provision 

9 of long-term care services and supports for low10 income elderly or disabled individuals are termi11 nated as of such effective date. 

12 ‘‘(D) A targeted low-income child or a par13 ent of such a child who would be eligible for 

14 child health assistance or health benefits cov15 erage under a State child health plan under 

16 title XXI on June 30, 2012, shall no longer re17 ceive such assistance or benefits under title 

18 XXI and shall be eligible for medical assistance 

19 under a State program funded under this part 

20 only to the extent the child or parent satisfies 

21 the eligibility criteria established by the State in 

22 its State plan under section 1951. Federal 

23 funds appropriated for making payments under 

24 title XXI or for administering title XXI that 


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1 are unobligated on January 1, 2013, are re2 scinded on that date. 

3 ‘‘(E) No payment shall be made under sec4 tion 1903(a) to a State with respect to any dis5 proportionate share payment adjustment made 

6 under section 1923 on or after January 1, 

7 2013. 

8 ‘‘(F) In the case of a State conducting a 

9 waiver under section 1115 or other authority to 

10 provide medical assistance for pregnant women, 

11 low-income children, or low-income families with 

12 children under a State program established 

13 under this title or to provide long-term care 

14 services and supports for low-income elderly or 

15 disabled individuals that is in effect on such 

16 date, the State may elect to terminate the waiv17 er as of January 1, 2013, or may submit a re18 quest to continue to provide medical assistance 

19 or long-term care services and supports for 

20 such individuals in accordance with the terms of 

21 the waiver. The Secretary shall approve a re22 quest of a State with such a waiver to extend 

23 the waiver for additional periods so long as the 

24 total amount of Federal funds paid to the State 

25 to conduct the waiver does not exceed the 


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1 amount of Federal funds that would be paid to 

2 the State under this part if the waiver were not 

3 conducted and medical assistance or long-term 

4 care services and supports are provided under 

5 the waiver consistent with the requirements of 

6 this part. 

7 ‘‘(2) HOLD HARMLESS PROVISIONS.— 

8 ‘‘(A) ACUTE CARE FOR LOW-INCOME EL9 DERLY AND DISABLED.— 

10 ‘‘(i) IN GENERAL.—The provisions of 

11 part A shall apply to State expenditures 

12 attributable to the provision of medical as13 sistance for acute care for low-income el14 derly or disabled individuals (including 

15 dual eligible individuals) on and after Jan16 uary 1, 2013. 

17 ‘‘(ii) RULE OF CONSTRUCTION.— 

18 Clause (i) shall not be construed as affect19 ing— 

20 ‘‘(I) the termination under para21 graph (1)(E) of payments under sec22 tion 1903(a) for disproportionate 

23 share hospital adjustment payments 

24 under section 1923; or 


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1 ‘‘(II) State flexibility to provide 

2 dual eligible individuals with medical 

3 assistance for acute care through en4 rollment in a managed care entity 

5 under the amendment made by section 

6 2(b) of the Medicaid Improvement 

7 and State Empowerment Act. 

8 ‘‘(B) COMMONWEALTHS AND TERRI9 TORIES.—This part shall not apply to the Com10 monwealth of Puerto Rico, the United States 

11 Virgin Islands, Guam, the Commonwealth of 

12 the Northen Mariana Islands, and American 

13 Samoa. Any program to provide medical assist14 ance established under this title by any such 

15 commonwealth or territory shall be operated in 

16 accordance with the provisions of part A of this 

17 title and subsections (f) and (g) of section 

18 1108. 

19 ‘‘(C) VACCINES FOR CHILDREN PRO20 GRAM.—The program for the distribution of pe21 diatric vaccines established under section 1928 

22 shall continue to be operated in accordance with 

23 the provisions of that section. 

24 ‘‘(c) BUDGET AUTHORITY.—This part constitutes 

25 budget authority in advance of appropriations Acts and 


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1 represents the obligation of the Federal Government to 

2 provide for the payment to States of amounts provided 

3 under section 1952. 

4 ‘‘(d) NONENTITLEMENT.—This part shall not be in5 terpreted to entitle any individual or family to medical as6 sistance under any State program funded under this part 

7 or to entitle any provider or entity to payment for the pro8 vision of items or services under any State program fund9 ed under this part. 

10 ‘‘STATE PLANS

11 ‘‘SEC. 1951. (a) IN GENERAL.—In order to receive 

12 a grant under section 1952 for a year and for the purpose 

13 of ensuring transparency with respect to the expenditure 

14 of Federal revenues, a State shall submit to the Secretary 

15 a plan that includes the following: 

16 ‘‘(1) OUTLINE OF MEDICAL ASSISTANCE PRO17 GRAM.— 

18 ‘‘(A) GENERAL PROVISIONS.—A written 

19 document that outlines how the State intends to 

20 conduct a program, designed to serve all polit21 ical subdivisions in the State (not necessarily in 

22 a uniform manner), that provides— 

23 ‘‘(i) medical assistance to pregnant 

24 women, low-income children, and low-in25 come families with children whose income 

26 and resources are insufficient to meet the 


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1 costs of necessary medical services, and re2 habilitation and other services to help such 

3 women, children, and families attain or re4 tain capability for independence or self5 care; and 

6 ‘‘(ii) long-term care services and sup7 ports for low-income elderly or disabled in8 dividuals whose income and resources are 

9 insufficient to meet the costs of such serv10 ices and supports and rehabilitation and 

11 other services to help such individuals at12 tain or retain capability for independence 

13 or self-care. 

14 ‘‘(B) SPECIAL PROVISIONS.— 

15 ‘‘(i) The document shall set forth ob16 jective criteria for— 

17 ‘‘(I) the determination of eligi18 bility for medical assistance and for 

19 long-term care services and supports 

20 (which may be based on standards re21 lating to income, family composition, 

22 patient population, health status, or 

23 age); and 

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1 cluding an explanation of how the 

2 State will provide opportunities for re3 cipients and providers who have been 

4 adversely affected to be heard in a 

5 State administrative or appeal proc6 ess. 

7 ‘‘(ii) The document shall include a de8 scription of— 

9 ‘‘(I) the benefits to be provided, 

10 which, in the case of medical assist11 ance, shall at a minimum be of the 

12 types listed in paragraph (1) of sec13 tion 8904(a) of title 5, United States 

14 Code; and 

15 ‘‘(II) the amount (if any) of pre16 miums, deductibles, coinsurance, or 

17 other cost sharing imposed. 

18 ‘‘(iii) The document shall include a 

19 description of how medical assistance and 

20 long-term care services and supports will 

21 be provided under the State plan, such as 

22 through contracts with health maintenance 

23 organizations, managed care organizations, 

24 or regional preferred provider organization 

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1 for-counseling programs, family health care 

2 scholarships, or health savings accounts, 

3 the provision of consumer-driven health 

4 vouchers, or any other health coverage ben5 efit delivery design determined by the 

6 State as appropriate for achieving the pur7 pose of this part. 

8 ‘‘(iv) The document shall indicate how 

9 the State shall satisfy the requirements of 

10 sections 1902(a)(46) (relating to 

11 verification of declarations of citizenship, 

12 nationality, or satisfactory immigration 

13 status). 

14 ‘‘(2) CERTIFICATION OF THE ADMINISTRATION

15 OF THE PROGRAM.—A certification by the Governor 

16 of the State specifying which State agency or agen17 cies will administer and supervise the State plan 

18 under this part, which shall include assurances that 

19 local governments and private sector organizations— 

20 ‘‘(A) have been consulted regarding the 

21 plan and design of the provision of medical as22 sistance and long-term care services and sup23 ports in the State so that such assistance and 

24 services and supports are provided in a manner 

25 appropriate to local populations; and 


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1 ‘‘(B) have had at least 45 days to submit 

2 comments on such plan and design. 

3 ‘‘(3) CERTIFICATION THAT THE STATE WILL

4 PROVIDE MEDICAL ASSISTANCE TO CHILDREN IN

5 FOSTER CARE AND ADOPTION ASSISTANCE PRO6 GRAM.—A certification by the Governor of the State 

7 that the State will take such actions as are nec8 essary to ensure that children receiving assistance 

9 under part E of title IV are eligible for medical as10 sistance under the State plan under this part. 

11 ‘‘(4) CERTIFICATION THAT THE STATE WILL

12 PROVIDE INDIANS WITH EQUITABLE ACCESS TO AS13 SISTANCE.—A certification by the Governor of the 

14 State that the State will provide each member of an 

15 Indian tribe who is domiciled in the State with equi16 table access to medical assistance and to long-term 

17 care services and supports under the State plan 

18 under this part. 

19 ‘‘(5) CERTIFICATION OF STANDARDS AND PRO20 CEDURES TO ENSURE AGAINST PROGRAM FRAUD, 

21 WASTE, AND ABUSE.—A certification by the Gov22 ernor of the State that the State has established and 

23 is enforcing standards and procedures to ensure 

24 against program fraud, waste, and abuse, including 

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1 flicts of interest among individuals responsible for 

2 the administration and supervision of the State pro3 gram, kickbacks, and the use of political patronage. 

4 ‘‘(b) PLAN AMENDMENTS.—Within 30 days after a 

5 State amends a plan submitted pursuant to subsection (a), 

6 the State shall notify the Secretary of the amendment. 

7 ‘‘(c) PUBLIC AVAILABILITY OF STATE PLAN SUM8 MARY.—The State shall make a summary of any plan or 

9 plan amendment submitted by the State under this section 

10 publicly available on a website and through such other 

11 means as the State determines appropriate. 

12 ‘‘(d) LIMITATION ON SECRETARIAL AUTHORITY.— 

13 The Secretary may only review a State plan or plan 

14 amendment submitted under this section for the purpose 

15 of confirming that a State has submitted the required doc16 umentation. The Secretary shall not have any authority 

17 to approve or deny a State plan or plan amendment sub18 mitted under this section or to otherwise inhibit or control 

19 the expenditure of grants paid to a State under section 

20 1952. 

21 ‘‘GRANTS TO STATES

22 ‘‘SEC. 1952. (a) ESTABLISHMENT OF SUSTAINABLE

23 MEDICAID FUNDING FOR STATES.— 

24 ‘‘(1) IN GENERAL.—Beginning January 1, 

25 2013, and annually thereafter, each State that has 


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1 submitted a plan under section 1951 shall be enti2 tled to receive from the Secretary for each 12-month 

3 period, a grant in an amount equal to the State 

4 health grant determined for the State for the period 

5 under subsection (b). 

6 ‘‘(2) TERMINATION OF OLD MEDICAID AND

7 CHIP FUNDING.—No payment shall be made by the 

8 Secretary to any State under part A of this title or 

9 under title XXI for State expenditures attributable 

10 to providing on or after January 1, 2013— 

11 ‘‘(A) medical assistance (as defined in sec12 tion 1905(a)), child health assistance (as de13 fined in section 2110(a)), or health benefits 

14 coverage for pregnant women, low-income chil15 dren, or low-income families with children; or 

16 ‘‘(B) long-term care services and supports 

17 for elderly or disabled individuals. 

18 ‘‘(b) TAXPAYER-PROVIDED PASS-THROUGH FUND19 ING OF HEALTH GRANTS TO STATES.— 

20 ‘‘(1) APPROPRIATION.—For the purpose of 

21 making health grants to States under this part, 

22 there is appropriated, out of any money in the 

23 Treasury not otherwise appropriated— 


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1 ‘‘(A) for the 12-month period beginning 

2 January 1, 2013, an amount equal to the prod3 uct of— 

4 ‘‘(i) the base appropriation amount 

5 determined under paragraph (3); and 

6 ‘‘(ii) the appropriation increase factor 

7 determined under paragraph (4) for the 

8 period; and 

9 ‘‘(B) for each 12-month period thereafter, 

10 an amount equal to the amount appropriated 

11 under this paragraph for the preceding 12- 

12 month period, increased by the appropriation 

13 increase factor determined under paragraph (4) 

14 for the period. 

15 ‘‘(2) AMOUNT OF GRANTS.— 

16 ‘‘(A) BASED ON POVERTY POPULATION.— 

17 For each 12-month period beginning on and 

18 after January 1, 2013, the Secretary shall pay 

19 each State an amount equal to the product of— 

20 ‘‘(i) the amount appropriated under 

21 paragraph (1) for the period; and 

22 ‘‘(ii) the ratio of the number of indi23 viduals residing in the State whose income 

24 does not exceed 100 percent of the poverty 

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1 volved to the number of such individuals in 

2 all States that have submitted a plan 

3 under section 1951 for the period (based 

4 on data for the most recent 12-month pe5 riod for which data is available). 

6 ‘‘(B) PRO RATA ADJUSTMENTS.—The Sec7 retary shall make pro rata increases or reduc8 tions in the amounts determined for States 

9 under subparagraph (A) for a period as nec10 essary to ensure that the total amount appro11 priated for the period is allotted among all 

12 States and that the total amount of all health 

13 grants for States determined for a period does 

14 not exceed the amount appropriated for the pe15 riod. 

16 ‘‘(3) BASE APPROPRIATION AMOUNT.—The base 

17 appropriation amount determined under this para18 graph is the product of— 

19 ‘‘(A) $165,000,000,000; 

20 ‘‘(B) the appropriation increase factor de21 termined under paragraph (4) with respect to 

22 the 12-month period beginning on January 1, 

23 2011; and 

24 ‘‘(C) the appropriation increase factor de25 termined under paragraph (4) with respect to 


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1 the 12-month period beginning on January 1, 

2 2012. 

3 ‘‘(4) APPROPRIATION INCREASE FACTOR.—The 

4 appropriation increase factor determined under this 

5 paragraph for a 12-month period is equal to the sum 

6 of 1 plus the sum of following: 

7 ‘‘(A) CPI-U GROWTH FACTOR.—The per8 centage increase, if any, in the consumer price 

9 index for all urban consumers (all items; United 

10 States city average) published by the Bureau of 

11 Labor Statistics, or the successor index thereto, 

12 for the fiscal year ending on September 30 of 

13 the preceding 12-month period. 

14 ‘‘(B) POPULATION GROWTH FACTOR.—The 

15 percentage increase (if any) in the population of 

16 the United States for the fiscal year ending on 

17 September 30 of the preceding 12-month pe18 riod, as determined by the Secretary based on 

19 the most recent published estimates of the Bu20 reau of the Census. 

21 ‘‘(c) AVAILABILITY.—A health grant paid to a State 

22 under this section for a period shall remain available until 

23 expended. 

24 ‘‘(d) REPORTS TO CONGRESS.—Not later than Janu25 ary 1 of 2018, and of every 5 years thereafter, the CompVerDate Mar 15 2010 04:14 Jun 02, 2011 Jkt 099200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\H2013.IH H2013

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1 troller General of the United States shall submit a report 

2 to Congress that includes an analysis of changes among 

3 the States in the population of individuals described in 

4 each clause of subsection (b)(2)(A) and such recommenda5 tions for legislative changes to the health grant distribu6 tion formula applied under subsection (b)(2) as the Comp7 troller General determines appropriate to achieve the pur8 pose of this part and ensure a fair distribution of the Fed9 eral funds appropriated to carry out this part among the 

10 States. 

11 ‘‘USE OF GRANTS

12 ‘‘SEC. 1953. (a) GENERAL RULE.—A State to which 

13 a grant is made under section 1952 may use the grant 

14 in any manner that is reasonably demonstrated to accom15 plish the purpose of this part. 

16 ‘‘(b) LIMITATION ON USE OF GRANT FOR ADMINIS17 TRATIVE PURPOSES.— 

18 ‘‘(1) LIMITATION.—A State to which a grant is 

19 made under section 1952 shall not expend more 

20 than 5 percent of the grant for administrative pur21 poses. 

22 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

23 apply to the use of a grant for expenditures related 

24 to preventing or eliminating waste, fraud, or abuse, 

25 and expenditures for information technology and 


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1 computerization needed for tracking or monitoring 

2 required by or under this part. 

3 ‘‘ADMINISTRATIVE PROVISIONS

4 ‘‘SEC. 1954. (a) PAYMENTS TO STATES.— 

5 ‘‘(1) QUARTERLY PAYMENTS.—The Secretary 

6 shall pay each health grant payable to a State under 

7 section 1952 in quarterly installments, subject to 

8 this section. 

9 ‘‘(2) COMPUTATION AND CERTIFICATION OF

10 PAYMENTS TO STATES.— 

11 ‘‘(A) COMPUTATION.—The Secretary shall 

12 estimate the amount to be paid to each State 

13 for each quarter under this part, with such esti14 mate to be based on a report filed by the State 

15 containing an estimate by the State of the total 

16 sum to be expended by the State in the quarter 

17 under the State program funded under this 

18 part and such other information as the Sec19 retary may find necessary. 

20 ‘‘(B) CERTIFICATION.—The Secretary of 

21 Health and Human Services shall certify to the 

22 Secretary of the Treasury the amount estimated 

23 under subparagraph (A) with respect to a 

24 State, reduced or increased to the extent of any 

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1 mines was made under this part to the State 

2 for any prior quarter and with respect to which 

3 adjustment has not been made under this para4 graph. 

5 ‘‘(3) PAYMENT METHOD.—Upon receipt of a 

6 certification under paragraph (2)(B) with respect to 

7 a State, the Secretary of the Treasury shall, through 

8 the Fiscal Service of the Department of the Treas9 ury and before audit or settlement by the General 

10 Accounting Office, pay to the State, at the time or 

11 times fixed by the Secretary of Health and Human 

12 Services, the amount so certified. 

13 ‘‘(b) NO WAIVER AUTHORITY.—Except as provided 

14 in section 1950(b)(1)(F), the Secretary may not waive any 

15 provision of this part under section 1115 or any other au16 thority. 

17 ‘‘(c) LIMITATION ON FEDERAL AUTHORITY.—No of18 ficer or employee of the Federal Government may regulate 

19 the conduct of States under this part or enforce any provi20 sion of this part, except to the extent expressly provided 

21 in this part. 

22 ‘‘PENALTIES

23 ‘‘SEC. 1955. (a) IN GENERAL.—Subject to this sec24 tion: 


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1 ‘‘(1) USE OF GRANT IN VIOLATION OF THIS

2 PART.— 

3 ‘‘(A) GENERAL PENALTY.—If an audit 

4 conducted under chapter 75 of title 31, United 

5 States Code, finds that an amount paid to a 

6 State under section 1952 for a period has been 

7 used in violation of this part, the Secretary 

8 shall reduce the grant payable to the State 

9 under that section for the immediately suc10 ceeding period by the amount so used. 

11 ‘‘(B) ENHANCED PENALTY FOR INTEN12 TIONAL VIOLATIONS.—If the State does not 

13 prove to the satisfaction of the Secretary that 

14 the State did not intend to use the amount in 

15 violation of this part, the Secretary shall fur16 ther reduce the grant payable to the State 

17 under section 1952 for the immediately suc18 ceeding period by an amount equal to 5 percent 

19 of the State health grant determined for that 

20 period. 

21 ‘‘(2) FAILURE TO SUBMIT REQUIRED RE22 PORT.—If the Secretary determines that a State has 

23 not, within 45 days after the end of a period for 

24 which a grant is made under section 1952, sub25 mitted the report required by section 1957 for the 


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1 period, the Secretary shall reduce the grant payable 

2 to the State under section 1952 for the immediately 

3 succeeding period by an amount equal to 5 percent 

4 of the State health grant determined for that period. 

5 ‘‘(b) REASONABLE CAUSE EXCEPTION.—The Sec6 retary may not impose a penalty on a State under sub7 section (a) with respect to a requirement if the Secretary 

8 determines that the State has reasonable cause for failing 

9 to comply with the requirement. 

10 ‘‘(c) CORRECTIVE COMPLIANCE PLAN.— 

11 ‘‘(1) IN GENERAL.— 

12 ‘‘(A) NOTIFICATION OF VIOLATION.—Be13 fore imposing a penalty against a State under 

14 subsection (a) with respect to a violation of this 

15 part, the Secretary shall notify the State of the 

16 violation and allow the State the opportunity to 

17 enter into a corrective compliance plan in ac18 cordance with this subsection which outlines 

19 how the State will correct or discontinue, as ap20 propriate, the violation and how the State will 

21 insure continuing compliance with this part. 

22 ‘‘(B) 60-DAY PERIOD TO PROPOSE A COR23 RECTIVE COMPLIANCE PLAN.—During the 60- 

24 day period that begins on the date the State re25 ceives a notice provided under subparagraph 


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1 (A) with respect to a violation, the State may 

2 submit to the Federal Government a corrective 

3 compliance plan to correct or discontinue, as 

4 appropriate, the violation. 

5 ‘‘(C) CONSULTATION ABOUT MODIFICA6 TIONS.—During the 60-day period that begins 

7 with the date the Secretary receives a corrective 

8 compliance plan submitted by a State in accord9 ance with subparagraph (B), the Secretary may 

10 consult with the State on modifications to the 

11 plan. 

12 ‘‘(D) ACCEPTANCE OF PLAN.—A corrective 

13 compliance plan submitted by a State in accord14 ance with subparagraph (B) is deemed to be ac15 cepted by the Secretary if the Secretary does 

16 not accept or reject the plan during 60-day pe17 riod that begins on the date the plan is sub18 mitted. 

19 ‘‘(2) EFFECT OF CORRECTING OR DIS20 CONTINUING VIOLATION.—The Secretary may not 

21 impose any penalty under subsection (a) with re22 spect to any violation covered by a State corrective 

23 compliance plan accepted by the Secretary if the 

24 State corrects or discontinues, as appropriate, the 

25 violation pursuant to the plan. 


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1 ‘‘(3) EFFECT OF FAILING TO CORRECT OR DIS2 CONTINUE VIOLATION.—The Secretary shall assess 

3 some or all of a penalty imposed on a State under 

4 subsection (a) with respect to a violation if the State 

5 does not, in a timely manner, correct or discontinue, 

6 as appropriate, the violation pursuant to a State cor7 rective compliance plan accepted by the Secretary. 

8 ‘‘(d) LIMITATION ON AMOUNT OF PENALTIES.— 

9 ‘‘(1) IN GENERAL.—In imposing the penalties 

10 described in subsection (a), the Secretary shall not 

11 reduce any health grant payable to a State for a pe12 riod by more than 10 percent. 

13 ‘‘(2) CARRYFORWARD OF UNRECOVERED PEN14 ALTIES.—To the extent that paragraph (1) of this 

15 subsection prevents the Secretary from recovering 

16 during a period the full amount of penalties imposed 

17 on a State under subsection (a) of this section for 

18 a prior period, the Secretary shall apply any remain19 ing amount of such penalties to the health grant 

20 payable to the State under section 1952 for the im21 mediately succeeding period. 

22 ‘‘APPEAL OF ADVERSE DECISION

23 ‘‘SEC. 1956. (a) IN GENERAL.—Within 5 days after 

24 the date the Secretary takes any adverse action under this 

25 part with respect to a State, the Secretary shall notify the 

26 Governor of the State of the adverse action, including any 


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1 action with respect to the State plan submitted under sec2 tion 1951 or the imposition of a penalty under section 

3 1955. 

4 ‘‘(b) ADMINISTRATIVE REVIEW.— 

5 ‘‘(1) IN GENERAL.—Within 60 days after the 

6 date a State receives notice under subsection (a) of 

7 an adverse action, the State may appeal the action, 

8 in whole or in part, to the Departmental Appeals 

9 Board established in the Department of Health and 

10 Human Services (in this section referred to as the 

11 ‘Board’) by filing an appeal with the Board. 

12 ‘‘(2) PROCEDURAL RULES.—The Board shall 

13 consider an appeal filed by a State under paragraph 

14 (1) on the basis of such documentation as the State 

15 may submit and as the Board may require to sup16 port the final decision of the Board. In deciding 

17 whether to uphold an adverse action or any portion 

18 of such an action, the Board shall conduct a thor19 ough review of the issues and take into account all 

20 relevant evidence. The Board shall make a final de21 termination with respect to an appeal filed under 

22 paragraph (1) not less than 60 days after the date 

23 the appeal is filed. 

24 ‘‘(c) JUDICIAL REVIEW OF ADVERSE DECISION.— 


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1 ‘‘(1) IN GENERAL.—Within 90 days after the 

2 date of a final decision by the Board under this sec3 tion with respect to an adverse action taken against 

4 a State, the State may obtain judicial review of the 

5 final decision (and the findings incorporated into the 

6 final decision) by filing an action in— 

7 ‘‘(A) the district court of the United States 

8 for the judicial district in which the principal or 

9 headquarters office of the State agency is lo10 cated; or 

11 ‘‘(B) the United States District Court for 

12 the District of Columbia. 

13 ‘‘(2) PROCEDURAL RULES.—The district court 

14 in which an action is filed under paragraph (1) shall 

15 review the final decision of the Board on the record 

16 established in the administrative proceeding, in ac17 cordance with the standards of review prescribed by 

18 subparagraphs (A) through (E) of section 706(2) of 

19 title 5, United States Code. The review shall be on 

20 the basis of the documents and supporting data sub21 mitted to the Board. 

22 ‘‘ANNUAL REPORTS

23 ‘‘SEC. 1957. Each State shall submit an annual re24 port to the Secretary that describes the State’s expendi25 tures of the amount paid to the State under section 1952 

26 for the most recently ended period, and includes the numVerDate Mar 15 2010 04:14 Jun 02, 2011 Jkt 099200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\H2013.IH H2013

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1 ber of individuals provided medical assistance and the 

2 number of individuals provided long-term care services 

3 and supports under the State plan under this part and 

4 such other information as the Secretary may require. The 

5 Secretary shall submit to Congress copies of all State re6 ports submitted under this section with respect to a pe7 riod. 

8 ‘‘DEFINITIONS

9 ‘‘SEC. 1958. In this part: 

10 ‘‘(1) DISABLED INDIVIDUAL.—The term ‘dis11 abled individual’ means an individual who would be 

12 considered disabled under section 1614(a)(3) or 

13 under criteria applied under the State plan under 

14 part A (as in effect on March 22, 2010). 

15 ‘‘(2) DUAL ELIGIBLE.—The term ‘dual eligible 

16 individual’ means an individual who is entitled to, or 

17 enrolled for, benefits under part A of title XVIII of 

18 the Social Security Act, or enrolled for benefits 

19 under part B of title XVIII of such Act, and is eligi20 ble for medical assistance under a State plan under 

21 this title or under a waiver of such plan (as in effect 

22 on March 22, 2010). 

23 ‘‘(3) ELDERLY INDIVIDUAL.—The term ‘elderly 

24 individual’ means an individual who has attained age 

25 65 or the age specified in section 226(a)(1), which26 ever is greater. 


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1 ‘‘(4) LONG-TERM CARE SERVICES AND SUP2 PORTS.— 

3 ‘‘(A) IN GENERAL.—The term ‘long-term 

4 care services and supports’ means any of the 

5 services or supports described in subparagraph 

6 (B) that may be provided in a nursing facility, 

7 an institution, a home, or other setting. 

8 ‘‘(B) SERVICES AND SUPPORTS DE9 SCRIBED.—For purposes of subparagraph (A), 

10 the services and supports described in this sub11 paragraph include assistive technology, adaptive 

12 equipment, remote monitoring equipment, case 

13 management for the aged, case management for 

14 individuals with disabilities, nursing home serv15 ices, long-term rehabilitative services necessary 

16 to restore functional abilities, services provided 

17 in intermediate care facilities for people with 

18 disabilities, habilitation services (including adult 

19 day care programs), community treatment 

20 teams for individuals with mental illness, home 

21 health services, services provided in an institu22 tion for mental disease, a Program of All-Inclu23 sive Care for the Elderly (PACE), personal care 

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1 portive employment, training skills necessary to 

2 assist the individual in achieving or maintaining 

3 independence, training of family members in4 cluding foster parents in supportive and behav5 ioral modification skills, ongoing and periodic 

6 training to maintain life skills, transitional care 

7 including room and board not to exceed 60 days 

8 within a 12-month period. 

9 ‘‘(5) LOW-INCOME.—The term ‘low-income’ 

10 means income (as determined under standards es11 tablished by the State) that does not exceed such 

12 percentage of the poverty line for a family of the size 

13 involved as the State shall establish. 

14 ‘‘(6) MEDICAL ASSISTANCE.—The term ‘med15 ical assistance’ means health care coverage, as deter16 mined by a State and described in the State plan in 

17 accordance with section 1951(a)(1)(B)(ii). 

18 ‘‘(7) POVERTY LINE DEFINED.—The term ‘pov19 erty line’ has the meaning given such term in section 

20 673(2) of the Community Services Block Grant Act 

21 (42 U.S.C. 9902(2)), including any revision required 

22 by such section. 

23 ‘‘(8) PREGNANT WOMAN.—The term ‘pregnant 

24 woman’ includes a woman during the 60-day period 

25 beginning on the last day of the pregnancy. 


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1 ‘‘(9) STATE.—The term ‘State’ means each of 

2 the 50 States and the District of Columbia.’’. 

3 (b) REMOVAL OF BARRIER TO PROVIDING DUAL ELI4 GIBLE INDIVIDUALS WITH ACUTE CARE THROUGH A

5 MANAGED CARE ENTITY.— 

6 (1) IN GENERAL.—Section 1932(a)(2) of the 

7 Social Security Act (42 U.S.C. 1396u–2(a)(2)) is 

8 amended by striking subparagraph (B). 

9 (2) EFFECTIVE DATE.—The amendment made 

10 by paragraph (1) takes effect on January 1, 2013. 

11 SEC. 3. MEDICAL MALPRACTICE REFORM STATE INCEN12 TIVE FUND. 

13 (a) GRANTS.—The Secretary of Health and Human 

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

15 shall award grants to eligible States to assist such States 

16 in implementing State-based medical malpractice reforms. 

17 (b) ELIGIBILITY.— 

18 (1) IN GENERAL.—To be eligible to receive a 

19 grant under subsection (a), a State shall— 

20 (A) submit to the Secretary an application, 

21 at such time, in such manner, and containing 

22 such information as the Secretary may require; 

23 and 

24 (B) shall certify, as part of the application 

25 under subparagraph (A), that the State has 


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1 carried out activities, including enacting State 

2 laws, that have been demonstrated to lower 

3 medical malpractice claim or premiums costs 

4 for physicians or to lower health care costs for 

5 patients. 

6 (2) STUDY.—As part of a certification provided 

7 under paragraph (1)(B), the State shall include the 

8 results of at least one longitudinal, empirically based 

9 study that demonstrates cost reductions of the type 

10 described in such paragraph. Such results shall be 

11 provided in a manner that enables the Comptroller 

12 General of the United States to make a determina13 tion as to whether such results are the reasonable 

14 and demonstrable conclusion of the State activities 

15 involved. 

16 (3) TYPES OF LAWS.—Laws described in para17 graph (1)(B) may include caps on non-economic 

18 damages, the establishment of health courts, the es19 tablishment of a comprehensive patient compensa20 tion program, providing for administrative deter21 minations of compensation, providing for early of22 fers, establishing safe harbors for the practice of evi23 dence-based medicine, or other demonstrated meth24 ods to reduce costs. 


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1 (c) AUTHORIZATION OF APPROPRIATIONS.—There is 

2 authorized to be appropriated to carry out this section— 

3 (1) $500,000,000 for the period of fiscal years 

4 2012 through 2016; and 

5 (2) $500,000,000 for the period of fiscal years 

6 2017 through 2021. 

7 (d) SUNSET.—The authority established under this 

8 section shall not apply after September 30, 2021. 

9 SEC. 4. REPEALS. 

10 (a) PPACA AND THE HEALTH CARE-RELATED PRO11 VISIONS IN THE HEALTH CARE AND EDUCATION REC12 ONCILIATION ACT OF 2010.— 

13 (1) IN GENERAL.—Except as provided in para14 graph (2): 

15 (A) Effective as of the enactment of Public 

16 Law 111–148, such Act is repealed, and the 

17 provisions of law amended or repealed by such 

18 Act are restored or revived as if such Act had 

19 not been enacted. 

20 (B) Effective as of the enactment of the 

21 Health Care and Education Reconciliation Act 

22 of 2010 (Public Law 111–152), title I and sub23 title B of title II of such Act are repealed, and 

24 the provisions of law amended or repealed by 

25 such title or subtitle, respectively, are restored 


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1 or revived as if such title and subtitle had not 

2 been enacted. 

3 (2) NONAPPLICATION TO PROGRAM INTEGRITY

4 PROVISIONS.—The repeals under paragraph (1) do 

5 not apply to the provisions of, and amendments 

6 made by the following: 

7 (A) Section 2801 of Public Law 111–148 

8 (relating to MACPAC). 

9 (B) Title IV of Public Law 111–148 (re10 lating to transparency and program integrity). 

11 (C) Subtitle D of title I of Public Law 

12 111–152 (relating to reducing fraud, waste, and 

13 abuse). 

14 (b) REPEAL OF ARRA MAINTENANCE OF EFFORT.— 

15 Subsection (f) of section 5001 of the American Recovery 

16 and Reinvestment Act of 2009 (Public Law 111–5) is 

17 amended by striking paragraph (1). 

18 (c) CHIP.—Effective January 1, 2013, title XXI of 

19 the Social Security Act (42 U.S.C. 1397aa et seq.) is re20 pealed. 


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1 SEC. 5. DEVELOPMENT OF NEW FORMULA FOR FEDERAL 

2 FINANCIAL PARTICIPATION FOR STATE 

3 CHILD SUPPORT AND WELFARE PROGRAMS 

4 TO REPLACE THE FMAP. 

5 Not later than January 1, 2012, the Secretary of 

6 Health and Human Services, in consultation with the 

7 States, shall establish a new formula for payments made 

8 to or received from States under parts D and E of title 

9 IV of the Social Security Act that are based on the Fed10 eral medical assistance percentage applicable to the State 

11 under title XIX of the Social Security Act. On and after 

12 January 1, 2013, the Federal medical assistance percent13 age shall only be used for purposes of making payments 

14 to States under part A of title XIX of that Act for expend15 itures attributable to providing medical assistance for el16 derly individuals, disabled individual, and dual eligible in17 dividuals in accordance with section 1958 of such Act (as 

18 added by section 3). Payments made to or received from 

19 a State under parts D or E of title IV of such Act shall 

20 be made on and after January 1, 2013, by applying the 

21 formula developed by the Secretary of Health and Human 

22 Services under this section in lieu of the Federal medical 

23 assistance percentage. 

Æ 


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