II 

116TH CONGRESS 

1ST SESSION H. R. 1839 

IN THE SENATE OF THE UNITED STATES 

MARCH 26, 2019 

Received 

AN ACT 

To amend title XIX to extend protection for Medicaid recipients of home and community-based services against 

spousal impoverishment, establish a State Medicaid option to provide coordinated care to children with complex 

medical conditions through health homes, prevent the 

misclassification of drugs for purposes of the Medicaid 

drug rebate program, and for other purposes. 


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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 This Act may be cited as the ‘‘Medicaid Services In5 vestment and Accountability Act of 2019’’. 

6 SEC. 2. EXTENSION OF PROTECTION FOR MEDICAID RE7 CIPIENTS OF HOME AND COMMUNITY-BASED 

8 SERVICES AGAINST SPOUSAL IMPOVERISH9 MENT. 

10 (a) IN GENERAL.—Section 2404 of Public Law 111– 

11 148 (42 U.S.C. 1396r–5 note), as amended by section 3(a) 

12 of the Medicaid Extenders Act of 2019 (Public Law 116– 

13 3), is amended by striking ‘‘March 31, 2019’’ and insert14 ing ‘‘September 30, 2019’’. 

15 (b) RULE OF CONSTRUCTION.— 

16 (1) PROTECTING STATE SPOUSAL INCOME AND

17 ASSET DISREGARD FLEXIBILITY UNDER WAIVERS

18 AND PLAN AMENDMENTS.—Nothing in section 2404 

19 of Public Law 111–148 (42 U.S.C. 1396r–5 note) or 

20 section 1924 of the Social Security Act (42 U.S.C. 

21 1396r–5) shall be construed as prohibiting a State 

22 from disregarding an individual’s spousal income 

23 and assets under a State waiver or plan amendment 

24 described in paragraph (2) for purposes of making 

25 determinations of eligibility for home and commuVerDate Sep 11 2014 00:21 Apr 03, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1839.RDS H1839

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1 nity-based services or home and community-based 

2 attendant services and supports under such waiver 

3 or plan amendment. 

4 (2) STATE WAIVER OR PLAN AMENDMENT DE5 SCRIBED.—A State waiver or plan amendment de6 scribed in this paragraph is any of the following: 

7 (A) A waiver or plan amendment to pro8 vide medical assistance for home and commu9 nity-based services under a waiver or plan 

10 amendment under subsection (c), (d), or (i) of 

11 section 1915 of the Social Security Act (42 

12 U.S.C. 1396n) or under section 1115 of such 

13 Act (42 U.S.C. 1315). 

14 (B) A plan amendment to provide medical 

15 assistance for home and community-based serv16 ices for individuals by reason of being deter17 mined eligible under section 1902(a)(10)(C) of 

18 such Act (42 U.S.C. 1396a(a)(10)(C)) or by 

19 reason of section 1902(f) of such Act (42 

20 U.S.C. 1396a(f)) or otherwise on the basis of a 

21 reduction of income based on costs incurred for 

22 medical or other remedial care under which the 

23 State disregarded the income and assets of the 

24 individual’s spouse in determining the initial 

25 and ongoing financial eligibility of an individual 


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1 for such services in place of the spousal impov2 erishment provisions applied under section 1924 

3 of such Act (42 U.S.C. 1396r–5). 

4 (C) A plan amendment to provide medical 

5 assistance for home and community-based at6 tendant services and supports under section 

7 1915(k) of such Act (42 U.S.C. 1396n(k)). 

8 SEC. 3. STATE OPTION TO PROVIDE COORDINATED CARE 

9 THROUGH A HEALTH HOME FOR CHILDREN 

10 WITH MEDICALLY COMPLEX CONDITIONS. 

11 Title XIX of the Social Security Act (42 U.S.C. 1396 

12 et seq.) is amended by inserting after section 1945 the 

13 following new section: 

14 ‘‘SEC. 1945A. STATE OPTION TO PROVIDE COORDINATED 

15 CARE THROUGH A HEALTH HOME FOR CHIL16 DREN WITH MEDICALLY COMPLEX CONDI17 TIONS. 

18 ‘‘(a) IN GENERAL.—Notwithstanding section 

19 1902(a)(1) (relating to statewideness) and section 

20 1902(a)(10)(B) (relating to comparability), beginning Oc21 tober 1, 2022, a State, at its option as a State plan 

22 amendment, may provide for medical assistance under this 

23 title to children with medically complex conditions who 

24 choose to enroll in a health home under this section by 

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1 fessionals operating with such a provider, or a health team 

2 as the child’s health home for purposes of providing the 

3 child with health home services. 

4 ‘‘(b) HEALTH HOME QUALIFICATION STANDARDS.— 

5 The Secretary shall establish standards for qualification 

6 as a health home for purposes of this section. Such stand7 ards shall include requiring designated providers, teams 

8 of health care professionals operating with such providers, 

9 and health teams to demonstrate to the State the ability 

10 to do the following: 

11 ‘‘(1) Coordinate prompt care for children with 

12 medically complex conditions, including access to pe13 diatric emergency services at all times. 

14 ‘‘(2) Develop an individualized comprehensive 

15 pediatric family-centered care plan for children with 

16 medically complex conditions that accommodates pa17 tient preferences. 

18 ‘‘(3) Work in a culturally and linguistically ap19 propriate manner with the family of a child with 

20 medically complex conditions to develop and incor21 porate into such child’s care plan, in a manner con22 sistent with the needs of the child and the choices 

23 of the child’s family, ongoing home care, community24 based pediatric primary care, pediatric inpatient 


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1 care, social support services, and local hospital pedi2 atric emergency care. 

3 ‘‘(4) Coordinate access to— 

4 ‘‘(A) subspecialized pediatric services and 

5 programs for children with medically complex 

6 conditions, including the most intensive diag7 nostic, treatment, and critical care levels as 

8 medically necessary; and 

9 ‘‘(B) palliative services if the State pro10 vides such services under the State plan (or a 

11 waiver of such plan). 

12 ‘‘(5) Coordinate care for children with medically 

13 complex conditions with out-of-State providers fur14 nishing care to such children to the maximum extent 

15 practicable for the families of such children and 

16 where medically necessary, in accordance with guid17 ance issued under subsection (e)(1) and section 

18 431.52 of title 42, Code of Federal Regulations. 

19 ‘‘(6) Collect and report information under sub20 section (g)(1). 

21 ‘‘(c) PAYMENTS.— 

22 ‘‘(1) IN GENERAL.—A State shall provide a des23 ignated provider, a team of health care professionals 

24 operating with such a provider, or a health team 

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1 ices to each child with medically complex conditions 

2 that selects such provider, team of health care pro3 fessionals, or health team as the child’s health home. 

4 Payments made to a designated provider, a team of 

5 health care professionals operating with such a pro6 vider, or a health team for such services shall be 

7 treated as medical assistance for purposes of section 

8 1903(a), except that, during the first 2 fiscal year 

9 quarters that the State plan amendment is in effect, 

10 the Federal medical assistance percentage applicable 

11 to such payments shall be increased by 15 percent12 age points, but in no case may exceed 90 percent. 

13 ‘‘(2) METHODOLOGY.— 

14 ‘‘(A) IN GENERAL.—The State shall speci15 fy in the State plan amendment the method16 ology the State will use for determining pay17 ment for the provision of health home services. 

18 Such methodology for determining payment— 

19 ‘‘(i) may be tiered to reflect, with re20 spect to each child with medically complex 

21 conditions provided such services by a des22 ignated provider, a team of health care 

23 professionals operating with such a pro24 vider, or a health team, the severity or 

25 number of each such child’s chronic condiVerDate Sep 11 2014 00:21 Apr 03, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1839.RDS H1839

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1 tions, life-threatening illnesses, disabilities, 

2 or rare diseases, or the specific capabilities 

3 of the provider, team of health care profes4 sionals, or health team; and 

5 ‘‘(ii) shall be established consistent 

6 with section 1902(a)(30)(A). 

7 ‘‘(B) ALTERNATE MODELS OF PAYMENT.— 

8 The methodology for determining payment for 

9 provision of health home services under this 

10 section shall not be limited to a per-member 

11 per-month basis and may provide (as proposed 

12 by the State and subject to approval by the 

13 Secretary) for alternate models of payment. 

14 ‘‘(3) PLANNING GRANTS.— 

15 ‘‘(A) IN GENERAL.—Beginning October 1, 

16 2022, the Secretary may award planning grants 

17 to States for purposes of developing a State 

18 plan amendment under this section. A planning 

19 grant awarded to a State under this paragraph 

20 shall remain available until expended. 

21 ‘‘(B) STATE CONTRIBUTION.—A State 

22 awarded a planning grant shall contribute an 

23 amount equal to the State percentage deter24 mined under section 1905(b) (without regard to 


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1 section 5001 of Public Law 111–5) for each fis2 cal year for which the grant is awarded. 

3 ‘‘(C) LIMITATION.—The total amount of 

4 payments made to States under this paragraph 

5 shall not exceed $5,000,000. 

6 ‘‘(d) COORDINATING CARE.— 

7 ‘‘(1) HOSPITAL NOTIFICATION.—A State with a 

8 State plan amendment approved under this section 

9 shall require each hospital that is a participating 

10 provider under the State plan (or a waiver of such 

11 plan) to establish procedures for, in the case of a 

12 child with medically complex conditions who is en13 rolled in a health home pursuant to this section and 

14 seeks treatment in the emergency department of 

15 such hospital, notifying the health home of such 

16 child of such treatment. 

17 ‘‘(2) EDUCATION WITH RESPECT TO AVAIL18 ABILITY OF HEALTH HOME SERVICES.—In order for 

19 a State plan amendment to be approved under this 

20 section, a State shall include in the State plan 

21 amendment a description of the State’s process for 

22 educating providers participating in the State plan 

23 (or a waiver of such plan) on the availability of 

24 health home services for children with medically 

25 complex conditions, including the process by which 


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1 such providers can refer such children to a des2 ignated provider, team of health care professionals 

3 operating such a provider, or health team for the 

4 purpose of establishing a health home through which 

5 such children may receive such services. 

6 ‘‘(3) FAMILY EDUCATION.—In order for a State 

7 plan amendment to be approved under this section, 

8 a State shall include in the State plan amendment 

9 a description of the State’s process for educating 

10 families with children eligible to receive health home 

11 services pursuant to this section of the availability of 

12 such services. Such process shall include the partici13 pation of family-to-family entities or other public or 

14 private organizations or entities who provide out15 reach and information on the availability of health 

16 care items and services to families of individuals eli17 gible to receive medical assistance under the State 

18 plan (or a waiver of such plan). 

19 ‘‘(4) MENTAL HEALTH COORDINATION.—A 

20 State with a State plan amendment approved under 

21 this section shall consult and coordinate, as appro22 priate, with the Secretary in addressing issues re23 garding the prevention and treatment of mental ill24 ness and substance use among children with mediVerDate Sep 11 2014 00:21 Apr 03, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1839.RDS H1839

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1 cally complex conditions receiving health home serv2 ices under this section. 

3 ‘‘(e) GUIDANCE ON COORDINATING CARE FROM

4 OUT-OF-STATE PROVIDERS.— 

5 ‘‘(1) IN GENERAL.—Not later than October 1, 

6 2020, the Secretary shall issue (and update as the 

7 Secretary determines necessary) guidance to State 

8 Medicaid directors on— 

9 ‘‘(A) best practices for using out-of-State 

10 providers to provide care to children with medi11 cally complex conditions; 

12 ‘‘(B) coordinating care for such children 

13 provided by such out-of-State providers (includ14 ing when provided in emergency and non-emer15 gency situations); 

16 ‘‘(C) reducing barriers for such children 

17 receiving care from such providers in a timely 

18 fashion; and 

19 ‘‘(D) processes for screening and enrolling 

20 such providers in the respective State plan (or 

21 a waiver of such plan), including efforts to 

22 streamline such processes or reduce the burden 

23 of such processes on such providers. 

24 ‘‘(2) STAKEHOLDER INPUT.—In carrying out 

25 paragraph (1), the Secretary shall issue a request 


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1 for information to seek input from children with 

2 medically complex conditions and their families, 

3 States, providers (including children’s hospitals, hos4 pitals, pediatricians, and other providers), managed 

5 care plans, children’s health groups, family and ben6 eficiary advocates, and other stakeholders with re7 spect to coordinating the care for such children pro8 vided by out-of-State providers. 

9 ‘‘(f) MONITORING.—A State shall include in the State 

10 plan amendment— 

11 ‘‘(1) a methodology for tracking reductions in 

12 inpatient days and reductions in the total cost of 

13 care resulting from improved care coordination and 

14 management under this section; 

15 ‘‘(2) a proposal for use of health information 

16 technology in providing health home services under 

17 this section and improving service delivery and co18 ordination across the care continuum (including the 

19 use of wireless patient technology to improve coordi20 nation and management of care and patient adher21 ence to recommendations made by their provider); 

22 and 

23 ‘‘(3) a methodology for tracking prompt and 

24 timely access to medically necessary care for children 


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1 with medically complex conditions from out-of-State 

2 providers. 

3 ‘‘(g) DATA COLLECTION.— 

4 ‘‘(1) PROVIDER REPORTING REQUIREMENTS.— 

5 In order to receive payments from a State under 

6 subsection (c), a designated provider, a team of 

7 health care professionals operating with such a pro8 vider, or a health team shall report to the State, at 

9 such time and in such form and manner as may be 

10 required by the State, the following information: 

11 ‘‘(A) With respect to each such provider, 

12 team of health care professionals, or health 

13 team, the name, National Provider Identifica14 tion number, address, and specific health care 

15 services offered to be provided to children with 

16 medically complex conditions who have selected 

17 such provider, team of health care profes18 sionals, or health team as the health home of 

19 such children. 

20 ‘‘(B) Information on all applicable meas21 ures for determining the quality of health home 

22 services provided by such provider, team of 

23 health care professionals, or health team, in24 cluding, to the extent applicable, child health 

25 quality measures and measures for centers of 


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1 excellence for children with complex needs de2 veloped under this title, title XXI, and section 

3 1139A. 

4 ‘‘(C) Such other information as the Sec5 retary shall specify in guidance. 

6 When appropriate and feasible, such provider, team 

7 of health care professionals, or health team, as the 

8 case may be, shall use health information technology 

9 in providing the State with such information. 

10 ‘‘(2) STATE REPORTING REQUIREMENTS.— 

11 ‘‘(A) COMPREHENSIVE REPORT.—A State 

12 with a State plan amendment approved under 

13 this section shall report to the Secretary (and, 

14 upon request, to the Medicaid and CHIP Pay15 ment and Access Commission), at such time 

16 and in such form and manner determined by 

17 the Secretary to be reasonable and minimally 

18 burdensome, the following information: 

19 ‘‘(i) Information reported under para20 graph (1). 

21 ‘‘(ii) The number of children with 

22 medically complex conditions who have se23 lected a health home pursuant to this sec24 tion. 


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1 ‘‘(iii) The nature, number, and preva2 lence of chronic conditions, life-threatening 

3 illnesses, disabilities, or rare diseases that 

4 such children have. 

5 ‘‘(iv) The type of delivery systems and 

6 payment models used to provide services to 

7 such children under this section. 

8 ‘‘(v) The number and characteristics 

9 of designated providers, teams of health 

10 care professionals operating with such pro11 viders, and health teams selected as health 

12 homes pursuant to this section, including 

13 the number and characteristics of out-of14 State providers, teams of health care pro15 fessionals operating with such providers, 

16 and health teams who have provided health 

17 care items and services to such children. 

18 ‘‘(vi) The extent to which such chil19 dren receive health care items and services 

20 under the State plan. 

21 ‘‘(vii) Quality measures developed spe22 cifically with respect to health care items 

23 and services provided to children with 

24 medically complex conditions. 


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1 ‘‘(B) REPORT ON BEST PRACTICES.—Not 

2 later than 90 days after a State has a State 

3 plan amendment approved under this section, 

4 such State shall submit to the Secretary, and 

5 make publicly available on the appropriate 

6 State website, a report on how the State is im7 plementing guidance issued under subsection 

8 (e)(1), including through any best practices 

9 adopted by the State. 

10 ‘‘(h) RULE OF CONSTRUCTION.—Nothing in this sec11 tion may be construed— 

12 ‘‘(1) to require a child with medically complex 

13 conditions to enroll in a health home under this sec14 tion; 

15 ‘‘(2) to limit the choice of a child with medically 

16 complex conditions in selecting a designated pro17 vider, team of health care professionals operating 

18 with such a provider, or health team that meets the 

19 health home qualification standards established 

20 under subsection (b) as the child’s health home; or 

21 ‘‘(3) to reduce or otherwise modify— 

22 ‘‘(A) the entitlement of children with medi23 cally complex conditions to early and periodic 

24 screening, diagnostic, and treatment services 

25 (as defined in section 1905(r)); or 


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1 ‘‘(B) the informing, providing, arranging, 

2 and reporting requirements of a State under 

3 section 1902(a)(43). 

4 ‘‘(i) DEFINITIONS.—In this section: 

5 ‘‘(1) CHILD WITH MEDICALLY COMPLEX CONDI6 TIONS.— 

7 ‘‘(A) IN GENERAL.—Subject to subpara8 graph (B), the term ‘child with medically com9 plex conditions’ means an individual under 21 

10 years of age who— 

11 ‘‘(i) is eligible for medical assistance 

12 under the State plan (or under a waiver of 

13 such plan); and 

14 ‘‘(ii) has at least— 

15 ‘‘(I) one or more chronic condi16 tions that cumulatively affect three or 

17 more organ systems and severely re18 duces cognitive or physical functioning 

19 (such as the ability to eat, drink, or 

20 breathe independently) and that also 

21 requires the use of medication, dura22 ble medical equipment, therapy, sur23 gery, or other treatments; or 

24 ‘‘(II) one life-limiting illness or 

25 rare pediatric disease (as defined in 


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1 section 529(a)(3) of the Federal 

2 Food, Drug, and Cosmetic Act (21 

3 U.S.C. 360ff(a)(3))). 

4 ‘‘(B) RULE OF CONSTRUCTION.—Nothing 

5 in this paragraph shall prevent the Secretary 

6 from establishing higher levels as to the number 

7 or severity of chronic, life threatening illnesses, 

8 disabilities, rare diseases or mental health con9 ditions for purposes of determining eligibility 

10 for receipt of health home services under this 

11 section. 

12 ‘‘(2) CHRONIC CONDITION.—The term ‘chronic 

13 condition’ means a serious, long-term physical, men14 tal, or developmental disability or disease, including 

15 the following: 

16 ‘‘(A) Cerebral palsy. 

17 ‘‘(B) Cystic fibrosis. 

18 ‘‘(C) HIV/AIDS. 

19 ‘‘(D) Blood diseases, such as anemia or 

20 sickle cell disease. 

21 ‘‘(E) Muscular dystrophy. 

22 ‘‘(F) Spina bifida. 

23 ‘‘(G) Epilepsy. 

24 ‘‘(H) Severe autism spectrum disorder. 


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1 ‘‘(I) Serious emotional disturbance or seri2 ous mental health illness. 

3 ‘‘(3) HEALTH HOME.—The term ‘health home’ 

4 means a designated provider (including a provider 

5 that operates in coordination with a team of health 

6 care professionals) or a health team selected by a 

7 child with medically complex conditions (or the fam8 ily of such child) to provide health home services. 

9 ‘‘(4) HEALTH HOME SERVICES.— 

10 ‘‘(A) IN GENERAL.—The term ‘health 

11 home services’ means comprehensive and timely 

12 high-quality services described in subparagraph 

13 (B) that are provided by a designated provider, 

14 a team of health care professionals operating 

15 with such a provider, or a health team. 

16 ‘‘(B) SERVICES DESCRIBED.—The services 

17 described in this subparagraph shall include— 

18 ‘‘(i) comprehensive care management; 

19 ‘‘(ii) care coordination, health pro20 motion, and providing access to the full 

21 range of pediatric specialty and sub22 specialty medical services, including serv23 ices from out-of-State providers, as medi24 cally necessary; 


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1 ‘‘(iii) comprehensive transitional care, 

2 including appropriate follow-up, from inpa3 tient to other settings; 

4 ‘‘(iv) patient and family support (in5 cluding authorized representatives); 

6 ‘‘(v) referrals to community and social 

7 support services, if relevant; and 

8 ‘‘(vi) use of health information tech9 nology to link services, as feasible and ap10 propriate. 

11 ‘‘(5) DESIGNATED PROVIDER.—The term ‘des12 ignated provider’ means a physician (including a pe13 diatrician or a pediatric specialty or subspecialty 

14 provider), children’s hospital, clinical practice or 

15 clinical group practice, prepaid inpatient health plan 

16 or prepaid ambulatory health plan (as defined by the 

17 Secretary), rural clinic, community health center, 

18 community mental health center, home health agen19 cy, or any other entity or provider that is deter20 mined by the State and approved by the Secretary 

21 to be qualified to be a health home for children with 

22 medically complex conditions on the basis of docu23 mentation evidencing that the entity has the sys24 tems, expertise, and infrastructure in place to pro25 vide health home services. Such term may include 


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1 providers who are employed by, or affiliated with, a 

2 children’s hospital. 

3 ‘‘(6) TEAM OF HEALTH CARE PROFES4 SIONALS.—The term ‘team of health care profes5 sionals’ means a team of health care professionals 

6 (as described in the State plan amendment under 

7 this section) that may— 

8 ‘‘(A) include— 

9 ‘‘(i) physicians and other profes10 sionals, such as pediatricians or pediatric 

11 specialty or subspecialty providers, nurse 

12 care coordinators, dietitians, nutritionists, 

13 social workers, behavioral health profes14 sionals, physical therapists, occupational 

15 therapists, speech pathologists, nurses, in16 dividuals with experience in medical sup17 portive technologies, or any professionals 

18 determined to be appropriate by the State 

19 and approved by the Secretary; 

20 ‘‘(ii) an entity or individual who is 

21 designated to coordinate such a team; and 

22 ‘‘(iii) community health workers, 

23 translators, and other individuals with cul24 turally-appropriate expertise; and 


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1 ‘‘(B) be freestanding, virtual, or based at 

2 a children’s hospital, hospital, community 

3 health center, community mental health center, 

4 rural clinic, clinical practice or clinical group 

5 practice, academic health center, or any entity 

6 determined to be appropriate by the State and 

7 approved by the Secretary. 

8 ‘‘(7) HEALTH TEAM.—The term ‘health team’ 

9 has the meaning given such term for purposes of 

10 section 3502 of Public Law 111–148.’’. 

11 SEC. 4. EXTENSION OF THE COMMUNITY MENTAL HEALTH 

12 SERVICES DEMONSTRATION PROGRAM. 

13 Section 223(d)(3) of the Protecting Access to Medi14 care Act of 2014 (42 U.S.C. 1396a note) is amended by 

15 striking ‘‘for 2-year demonstration programs under this 

16 subsection’’ and inserting ‘‘to conduct demonstration pro17 grams under this subsection for 2 years or through June 

18 30, 2019, whichever is longer’’. 

19 SEC. 5. ADDITIONAL FUNDING FOR THE MONEY FOLLOWS 

20 THE PERSON REBALANCING DEMONSTRA21 TION. 

22 Section 6071(h)(1)(F) of the Deficit Reduction Act 

23 of 2005 (42 U.S.C. 1396a note) is amended by striking 

24 ‘‘$112,000,000’’ and inserting ‘‘132,000,000’’. 


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1 SEC. 6. PREVENTING THE MISCLASSIFICATION OF DRUGS 

2 UNDER THE MEDICAID DRUG REBATE PRO3 GRAM. 

4 (a) APPLICATION OF CIVIL MONEY PENALTY FOR

5 MISCLASSIFICATION OF COVERED OUTPATIENT

6 DRUGS.— 

7 (1) IN GENERAL.—Section 1927(b)(3) of the 

8 Social Security Act (42 U.S.C. 1396r–8(b)(3)) is 

9 amended— 

10 (A) in the paragraph heading, by inserting 

11 ‘‘AND DRUG PRODUCT’’ after ‘‘PRICE’’; 

12 (B) in subparagraph (A)— 

13 (i) in clause (ii), by striking ‘‘; and’’ 

14 at the end and inserting a semicolon; 

15 (ii) in clause (iii), by striking the pe16 riod at the end and inserting a semicolon; 

17 (iii) in clause (iv), by striking the 

18 semicolon at the end and inserting ‘‘; 

19 and’’; and 

20 (iv) by inserting after clause (iv) the 

21 following new clause: 

22 ‘‘(v) not later than 30 days after the 

23 last day of each month of a rebate period 

24 under the agreement, such drug product 

25 information as the Secretary shall require 


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1 for each of the manufacturer’s covered out2 patient drugs.’’; and 

3 (C) in subparagraph (C)— 

4 (i) in clause (ii), by inserting ‘‘, in5 cluding information related to drug pric6 ing, drug product information, and data 

7 related to drug pricing or drug product in8 formation,’’ after ‘‘provides false informa9 tion’’; 

10 (ii) by adding at the end the following 

11 new clauses: 

12 ‘‘(iii) MISCLASSIFIED DRUG PRODUCT

13 OR MISREPORTED INFORMATION.— 

14 ‘‘(I) IN GENERAL.—Any manu15 facturer with an agreement under this 

16 section that knowingly (as defined in 

17 section 1003.110 of title 42, Code of 

18 Federal Regulations (or any successor 

19 regulation)) misclassifies a covered 

20 outpatient drug, such as by knowingly 

21 submitting incorrect drug product in22 formation, is subject to a civil money 

23 penalty for each covered outpatient 

24 drug that is misclassified in an 


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1 amount not to exceed 2 times the 

2 amount of the difference between— 

3 ‘‘(aa) the total amount of 

4 rebates that the manufacturer 

5 paid with respect to the drug to 

6 all States for all rebate periods 

7 during which the drug was 

8 misclassified; and 

9 ‘‘(bb) the total amount of 

10 rebates that the manufacturer 

11 would have been required to pay, 

12 as determined by the Secretary 

13 using drug product information 

14 provided by the manufacturer, 

15 with respect to the drug to all 

16 States for all rebate periods dur17 ing which the drug was 

18 misclassified if the drug had been 

19 correctly classified. 

20 ‘‘(II) OTHER PENALTIES AND

21 RECOVERY OF UNDERPAID RE22 BATES.—The civil money penalties de23 scribed in subclause (I) are in addi24 tion to other penalties as may be pre25 scribed by law and any other recovery 


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1 of the underlying underpayment for 

2 rebates due under this section or the 

3 terms of the rebate agreement as de4 termined by the Secretary. 

5 ‘‘(iv) INCREASING OVERSIGHT AND

6 ENFORCEMENT.—Each year the Secretary 

7 shall retain, in addition to any amount re8 tained by the Secretary to recoup inves9 tigation and litigation costs related to the 

10 enforcement of the civil money penalties 

11 under this subparagraph and subsection 

12 (c)(4)(B)(ii)(III), an amount equal to 25 

13 percent of the total amount of civil money 

14 penalties collected under this subparagraph 

15 and subsection (c)(4)(B)(ii)(III) for the 

16 year, and such retained amount shall be 

17 available to the Secretary, without further 

18 appropriation and until expended, for ac19 tivities related to the oversight and en20 forcement of this section and agreements 

21 under this section, including— 

22 ‘‘(I) improving drug data report23 ing systems; 


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1 ‘‘(II) evaluating and ensuring 

2 manufacturer compliance with rebate 

3 obligations; and 

4 ‘‘(III) oversight and enforcement 

5 related to ensuring that manufactur6 ers accurately and fully report drug 

7 information, including data related to 

8 drug classification.’’; and 

9 (iii) in subparagraph (D)— 

10 (I) in clause (iv), by striking ‘‘, 

11 and’’ and inserting a comma; 

12 (II) in clause (v), by striking the 

13 period and inserting ‘‘, and’’; and 

14 (III) by inserting after clause (v) 

15 the following new clause: 

16 ‘‘(vi) in the case of categories of drug 

17 product or classification information that 

18 were not considered confidential by the 

19 Secretary on the day before the date of the 

20 enactment of this clause.’’. 

21 (2) TECHNICAL AMENDMENTS.— 

22 (A) Section 1903(i)(10) of the Social Secu23 rity Act (42 U.S.C. 1396b(i)(10)) is amended— 

24 (i) in subparagraph (C)— 


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1 (I) by adjusting the left margin 

2 so as to align with the left margin of 

3 subparagraph (B); and 

4 (II) by striking ‘‘, and’’ and in5 serting a semicolon; 

6 (ii) in subparagraph (D), by striking 

7 ‘‘; or’’ and inserting ‘‘; and’’; and 

8 (iii) by adding at the end the fol9 lowing new subparagraph: 

10 ‘‘(E) with respect to any amount expended for 

11 a covered outpatient drug for which a suspension 

12 under section 1927(c)(4)(B)(ii)(II) is in effect; or’’. 

13 (B) Section 1927(b)(3)(C)(ii) of the Social 

14 Security Act (42 U.S.C. 1396r–8(b)(3)(C)(ii)) 

15 is amended by striking ‘‘subsections (a) and 

16 (b)’’ and inserting ‘‘subsections (a), (b), (f)(3), 

17 and (f)(4)’’. 

18 (b) RECOVERY OF UNPAID REBATE AMOUNTS DUE

19 TO MISCLASSIFICATION OF COVERED OUTPATIENT

20 DRUGS.— 

21 (1) IN GENERAL.—Section 1927(c) of the So22 cial Security Act (42 U.S.C. 1396r–8(c)) is amended 

23 by adding at the end the following new paragraph: 


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1 ‘‘(4) RECOVERY OF UNPAID REBATE AMOUNTS

2 DUE TO MISCLASSIFICATION OF COVERED OUT3 PATIENT DRUGS.— 

4 ‘‘(A) IN GENERAL.—If the Secretary deter5 mines that a manufacturer with an agreement 

6 under this section paid a lower per-unit rebate 

7 amount to a State for a rebate period as a re8 sult of the misclassification by the manufac9 turer of a covered outpatient drug (without re10 gard to whether the manufacturer knowingly 

11 made the misclassification or should have 

12 known that the misclassification would be 

13 made) than the per-unit rebate amount that the 

14 manufacturer would have paid to the State if 

15 the drug had been correctly classified, the man16 ufacturer shall pay to the State an amount 

17 equal to the product of— 

18 ‘‘(i) the difference between— 

19 ‘‘(I) the per-unit rebate amount 

20 paid to the State for the period; and 

21 ‘‘(II) the per-unit rebate amount 

22 that the manufacturer would have 

23 paid to the State for the period, as 

24 determined by the Secretary, if the 

25 drug had been correctly classified; and 


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1 ‘‘(ii) the total units of the drug paid 

2 for under the State plan in the period. 

3 ‘‘(B) AUTHORITY TO CORRECT

4 MISCLASSIFICATIONS.— 

5 ‘‘(i) IN GENERAL.—If the Secretary 

6 determines that a manufacturer with an 

7 agreement under this section has 

8 misclassified a covered outpatient drug 

9 (without regard to whether the manufac10 turer knowingly made the misclassification 

11 or should have known that the 

12 misclassification would be made), the Sec13 retary shall notify the manufacturer of the 

14 misclassification and require the manufac15 turer to correct the misclassification in a 

16 timely manner. 

17 ‘‘(ii) ENFORCEMENT.—If, after receiv18 ing notice of a misclassification from the 

19 Secretary under clause (i), a manufacturer 

20 fails to correct the misclassification by 

21 such time as the Secretary shall require, 

22 until the manufacturer makes such correc23 tion, the Secretary may do any or all of 

24 the following: 


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1 ‘‘(I) Correct the misclassification, 

2 using drug product information pro3 vided by the manufacturer, on behalf 

4 of the manufacturer. 

5 ‘‘(II) Suspend the misclassified 

6 drug and the drug’s status as a cov7 ered outpatient drug under the manu8 facturer’s national rebate agreement, 

9 and exclude the misclassified drug 

10 from Federal financial participation in 

11 accordance with section 

12 1903(i)(10)(E). 

13 ‘‘(III) Impose a civil money pen14 alty (which shall be in addition to any 

15 other recovery or penalty which may 

16 be available under this section or any 

17 other provision of law) for each rebate 

18 period during which the drug is 

19 misclassified not to exceed an amount 

20 equal to the product of— 

21 ‘‘(aa) the total number of 

22 units of each dosage form and 

23 strength of such misclassified 

24 drug paid for under any State 


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1 plan during such a rebate period; 

2 and 

3 ‘‘(bb) 23.1 percent of the av4 erage manufacturer price for the 

5 dosage form and strength of such 

6 misclassified drug. 

7 ‘‘(C) REPORTING AND TRANSPARENCY.— 

8 ‘‘(i) IN GENERAL.—The Secretary 

9 shall submit a report to Congress on at 

10 least an annual basis that includes infor11 mation on the covered outpatient drugs 

12 that have been identified as misclassified, 

13 any steps taken to reclassify such drugs, 

14 the actions the Secretary has taken to en15 sure the payment of any rebate amounts 

16 which were unpaid as a result of such 

17 misclassification, and a disclosure of ex18 penditures from the fund created in sub19 section (b)(3)(C)(iv), including an account20 ing of how such funds have been allocated 

21 and spent in accordance with such sub22 section. 

23 ‘‘(ii) PUBLIC ACCESS.—The Secretary 

24 shall make the information contained in 


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1 the report required under clause (i) avail2 able to the public on a timely basis. 

3 ‘‘(D) OTHER PENALTIES AND ACTIONS.— 

4 Actions taken and penalties imposed under this 

5 clause shall be in addition to other remedies 

6 available to the Secretary including terminating 

7 the manufacturer’s rebate agreement for non8 compliance with the terms of such agreement 

9 and shall not exempt a manufacturer from, or 

10 preclude the Secretary from pursuing, any civil 

11 money penalty under this title or title XI, or 

12 any other penalty or action as may be pre13 scribed by law.’’. 

14 (2) OFFSET OF RECOVERED AMOUNTS AGAINST

15 MEDICAL ASSISTANCE.—Section 1927(b)(1)(B) of 

16 the Social Security Act (42 U.S.C. 1396r– 

17 8(b)(1)(B)) is amended by inserting ‘‘, including 

18 amounts received by a State under subsection 

19 (c)(4),’’ after ‘‘in any quarter’’. 

20 (c) CLARIFYING DEFINITIONS.—Section 1927(k) of 

21 the Social Security Act (42 U.S.C. 1396r–8(k)) is amend22 ed— 

23 (1) in paragraph (2)(A), by striking ‘‘paragraph 

24 (5)’’ and inserting ‘‘paragraph (4)’’; and 

25 (2) in paragraph (7)(A)— 


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1 (A) by striking ‘‘an original new drug ap2 plication’’ and inserting ‘‘a new drug applica3 tion’’ each place it appears; 

4 (B) in clause (i), by striking ‘‘(not includ5 ing any drug described in paragraph (5))’’ and 

6 inserting ‘‘, including a drug product approved 

7 for marketing as a non-prescription drug that is 

8 regarded as a covered outpatient drug under 

9 paragraph (4),’’; 

10 (C) in clause (ii)— 

11 (i) by striking ‘‘was originally mar12 keted’’ and inserting ‘‘is marketed’’; and 

13 (ii) by inserting ‘‘, unless the Sec14 retary determines that a narrow exception 

15 applies (as described in section 447.502 of 

16 title 42, Code of Federal Regulations (or 

17 any successor regulation))’’ before the pe18 riod; and 

19 (D) in clause (iv)— 

20 (i) by inserting ‘‘, including a drug 

21 product approved for marketing as a non22 prescription drug that is regarded as a 

23 covered outpatient drug under paragraph 

24 (4),’’ after ‘‘covered outpatient drug’’; 


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1 (ii) by inserting ‘‘unless the Secretary 

2 determines that a narrow exception applies 

3 (as described in section 447.502 of title 

4 42, Code of Federal Regulations (or any 

5 successor regulation))’’ after ‘‘under the 

6 new drug application’’; and 

7 (iii) by adding at the end the fol8 lowing new sentence: ‘‘Such term also in9 cludes a covered outpatient drug that is a 

10 biological product licensed, produced, or 

11 distributed under a biologics license appli12 cation approved by the Food and Drug Ad13 ministration.’’. 

14 (d) EXCLUSION OF MANUFACTURERS FOR KNOWING

15 MISCLASSIFICATION OF COVERED OUTPATIENT

16 DRUGS.—Section 1128(b) of the Social Security Act (42 

17 U.S.C. 1320a–7(b)) is amended by adding at the end the 

18 following new paragraph: 

19 ‘‘(17) KNOWINGLY MISCLASSIFYING COVERED

20 OUTPATIENT DRUGS.—Any manufacturer or officer, 

21 director, agent, or managing employee of such man22 ufacturer that knowingly misclassifies a covered out23 patient drug under an agreement under section 

24 1927, knowingly fails to correct such 

25 misclassification, or knowingly provides false inforVerDate Sep 11 2014 00:21 Apr 03, 2019 Jkt 089200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\H1839.RDS H1839

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1 mation related to drug pricing, drug product infor2 mation, or data related to drug pricing or drug 

3 product information.’’. 

4 (e) EFFECTIVE DATE.—The amendments made by 

5 this section shall take effect on the date of the enactment 

6 of this Act, and shall apply to covered outpatient drugs 

7 supplied by manufacturers under agreements under sec8 tion 1927 of the Social Security Act (42 U.S.C. 1396r– 

9 8) on or after such date. 

10 SEC. 7. EXTENSION OF THIRD-PARTY LIABILITY PERIOD 

11 FOR CHILD SUPPORT SERVICES. 

12 (a) IN GENERAL.—Section 202(a)(2) of the Bipar13 tisan Budget Act of 2013 (Public Law 113–67) is amend14 ed by striking ‘‘90 days’’ and inserting ‘‘100 days’’. 

15 (b) EFFECTIVE DATE.—The amendment made by 

16 this section shall take effect on the date of the enactment 

17 of this Act. 

18 SEC. 8. DENIAL OF FFP FOR CERTAIN EXPENDITURES RE19 LATING TO VACUUM ERECTION SYSTEMS 

20 AND PENILE PROSTHETIC IMPLANTS. 

21 (a) IN GENERAL.—Section 1903(i) of the Social Se22 curity Act (42 U.S.C. 1396b(i)) is amended by inserting 

23 after paragraph (11) the following: 

24 ‘‘(12) with respect to any amounts expended 

25 for— 


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1 ‘‘(A) a vacuum erection system that is not 

2 medically necessary; or 

3 ‘‘(B) the insertion, repair, or removal and 

4 replacement of a penile prosthetic implant (un5 less such insertion, repair, or removal and re6 placement is medically necessary); or’’. 

7 (b) EFFECTIVE DATE.—The amendment made by 

8 subsection (a) shall apply with respect to items and serv9 ices furnished on or after January 1, 2020. 

10 SEC. 9. DETERMINATION OF BUDGETARY EFFECTS. 

11 The budgetary effects of this Act, for the purpose of 

12 complying with the Statutory Pay-As-You-Go Act of 2010, 

13 shall be determined by reference to the latest statement 

14 titled ‘‘Budgetary Effects of PAYGO Legislation’’ for this 

15 Act, submitted for printing in the Congressional Record 

16 by the Chairman of the House Budget Committee, pro17 vided that such statement has been submitted prior to the 

18 vote on passage. 

Passed the House of Representatives March 25, 

2019. 

Attest: CHERYL L. JOHNSON, 

Clerk. 


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