I 

116TH CONGRESS 

1ST SESSION H. R. 1839 

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. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 21, 2019 

Mr. RUIZ (for himself, Mr. SCHRADER, Mr. MULLIN, and Mr. UPTON) introduced the following bill; which was referred to the Committee on Energy 

and Commerce 

A BILL 

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. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Medicaid Services In3 vestment and Accountability Act of 2019’’. 

4 SEC. 2. EXTENSION OF PROTECTION FOR MEDICAID RE5 CIPIENTS OF HOME AND COMMUNITY-BASED 

6 SERVICES AGAINST SPOUSAL IMPOVERISH7 MENT. 

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

9 148 (42 U.S.C. 1396r–5 note), as amended by section 3(a) 

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

11 3), is amended by striking ‘‘March 31, 2019’’ and insert12 ing ‘‘September 30, 2019’’. 

13 (b) RULE OF CONSTRUCTION.— 

14 (1) PROTECTING STATE SPOUSAL INCOME AND

15 ASSET DISREGARD FLEXIBILITY UNDER WAIVERS

16 AND PLAN AMENDMENTS.—Nothing in section 2404 

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

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

19 1396r–5) shall be construed as prohibiting a State 

20 from disregarding an individual’s spousal income 

21 and assets under a State waiver or plan amendment 

22 described in paragraph (2) for purposes of making 

23 determinations of eligibility for home and commu24 nity-based services or home and community-based 

25 attendant services and supports under such waiver 

26 or plan amendment. 


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1 (2) STATE WAIVER OR PLAN AMENDMENT DE2 SCRIBED.—A State waiver or plan amendment de3 scribed in this paragraph is any of the following: 

4 (A) A waiver or plan amendment to pro5 vide medical assistance for home and commu6 nity-based services under a waiver or plan 

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

8 section 1915 of the Social Security Act (42 

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

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

11 (B) A plan amendment to provide medical 

12 assistance for home and community-based serv13 ices for individuals by reason of being deter14 mined eligible under section 1902(a)(10)(C) of 

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

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

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

18 reduction of income based on costs incurred for 

19 medical or other remedial care under which the 

20 State disregarded the income and assets of the 

21 individual’s spouse in determining the initial 

22 and ongoing financial eligibility of an individual 

23 for such services in place of the spousal impov24 erishment provisions applied under section 1924 

25 of such Act (42 U.S.C. 1396r–5). 


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1 (C) A plan amendment to provide medical 

2 assistance for home and community-based at3 tendant services and supports under section 

4 1915(k) of such Act (42 U.S.C. 1396n(k)). 

5 SEC. 3. STATE OPTION TO PROVIDE COORDINATED CARE 

6 THROUGH A HEALTH HOME FOR CHILDREN 

7 WITH MEDICALLY COMPLEX CONDITIONS. 

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

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

10 following new section: 

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

12 CARE THROUGH A HEALTH HOME FOR CHIL13 DREN WITH MEDICALLY COMPLEX CONDI14 TIONS. 

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

16 1902(a)(1) (relating to statewideness) and section 

17 1902(a)(10)(B) (relating to comparability), beginning Oc18 tober 1, 2022, a State, at its option as a State plan 

19 amendment, may provide for medical assistance under this 

20 title to children with medically complex conditions who 

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

22 selecting a designated provider, a team of health care pro23 fessionals operating with such a provider, or a health team 

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

25 child with health home services. 


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

2 The Secretary shall establish standards for qualification 

3 as a health home for purposes of this section. Such stand4 ards shall include requiring designated providers, teams 

5 of health care professionals operating with such providers, 

6 and health teams to demonstrate to the State the ability 

7 to do the following: 

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

9 medically complex conditions, including access to pe10 diatric emergency services at all times. 

11 ‘‘(2) Develop an individualized comprehensive 

12 pediatric family-centered care plan for children with 

13 medically complex conditions that accommodates pa14 tient preferences. 

15 ‘‘(3) Work in a culturally and linguistically ap16 propriate manner with the family of a child with 

17 medically complex conditions to develop and incor18 porate into such child’s care plan, in a manner con19 sistent with the needs of the child and the choices 

20 of the child’s family, ongoing home care, community21 based pediatric primary care, pediatric inpatient 

22 care, social support services, and local hospital pedi23 atric emergency care. 

24 ‘‘(4) Coordinate access to— 


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1 ‘‘(A) subspecialized pediatric services and 

2 programs for children with medically complex 

3 conditions, including the most intensive diag4 nostic, treatment, and critical care levels as 

5 medically necessary; and 

6 ‘‘(B) palliative services if the State pro7 vides such services under the State plan (or a 

8 waiver of such plan). 

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

10 complex conditions with out-of-State providers fur11 nishing care to such children to the maximum extent 

12 practicable for the families of such children and 

13 where medically necessary, in accordance with guid14 ance issued under subsection (e)(1) and section 

15 431.52 of title 42, Code of Federal Regulations. 

16 ‘‘(6) Collect and report information under sub17 section (g)(1). 

18 ‘‘(c) PAYMENTS.— 

19 ‘‘(1) IN GENERAL.—A State shall provide a des20 ignated provider, a team of health care professionals 

21 operating with such a provider, or a health team 

22 with payments for the provision of health home serv23 ices to each child with medically complex conditions 

24 that selects such provider, team of health care pro25 fessionals, or health team as the child’s health home. 


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1 Payments made to a designated provider, a team of 

2 health care professionals operating with such a pro3 vider, or a health team for such services shall be 

4 treated as medical assistance for purposes of section 

5 1903(a), except that, during the first 2 fiscal year 

6 quarters that the State plan amendment is in effect, 

7 the Federal medical assistance percentage applicable 

8 to such payments shall be increased by 15 percent9 age points, but in no case may exceed 90 percent. 

10 ‘‘(2) METHODOLOGY.— 

11 ‘‘(A) IN GENERAL.—The State shall speci12 fy in the State plan amendment the method13 ology the State will use for determining pay14 ment for the provision of health home services. 

15 Such methodology for determining payment— 

16 ‘‘(i) may be tiered to reflect, with re17 spect to each child with medically complex 

18 conditions provided such services by a des19 ignated provider, a team of health care 

20 professionals operating with such a pro21 vider, or a health team, the severity or 

22 number of each such child’s chronic condi23 tions, life-threatening illnesses, disabilities, 

24 or rare diseases, or the specific capabilities 


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1 of the provider, team of health care profes2 sionals, or health team; and 

3 ‘‘(ii) shall be established consistent 

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

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

6 The methodology for determining payment for 

7 provision of health home services under this 

8 section shall not be limited to a per-member 

9 per-month basis and may provide (as proposed 

10 by the State and subject to approval by the 

11 Secretary) for alternate models of payment. 

12 ‘‘(3) PLANNING GRANTS.— 

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

14 2022, the Secretary may award planning grants 

15 to States for purposes of developing a State 

16 plan amendment under this section. A planning 

17 grant awarded to a State under this paragraph 

18 shall remain available until expended. 

19 ‘‘(B) STATE CONTRIBUTION.—A State 

20 awarded a planning grant shall contribute an 

21 amount equal to the State percentage deter22 mined under section 1905(b) (without regard to 

23 section 5001 of Public Law 111–5) for each fis24 cal year for which the grant is awarded. 


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

2 payments made to States under this paragraph 

3 shall not exceed $5,000,000. 

4 ‘‘(d) COORDINATING CARE.— 

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

6 State plan amendment approved under this section 

7 shall require each hospital that is a participating 

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

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

10 child with medically complex conditions who is en11 rolled in a health home pursuant to this section and 

12 seeks treatment in the emergency department of 

13 such hospital, notifying the health home of such 

14 child of such treatment. 

15 ‘‘(2) EDUCATION WITH RESPECT TO AVAIL16 ABILITY OF HEALTH HOME SERVICES.—In order for 

17 a State plan amendment to be approved under this 

18 section, a State shall include in the State plan 

19 amendment a description of the State’s process for 

20 educating providers participating in the State plan 

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

22 health home services for children with medically 

23 complex conditions, including the process by which 

24 such providers can refer such children to a des25 ignated provider, team of health care professionals 


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1 operating such a provider, or health team for the 

2 purpose of establishing a health home through which 

3 such children may receive such services. 

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

5 plan amendment to be approved under this section, 

6 a State shall include in the State plan amendment 

7 a description of the State’s process for educating 

8 families with children eligible to receive health home 

9 services pursuant to this section of the availability of 

10 such services. Such process shall include the partici11 pation of family-to-family entities or other public or 

12 private organizations or entities who provide out13 reach and information on the availability of health 

14 care items and services to families of individuals eli15 gible to receive medical assistance under the State 

16 plan (or a waiver of such plan). 

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

18 State with a State plan amendment approved under 

19 this section shall consult and coordinate, as appro20 priate, with the Secretary in addressing issues re21 garding the prevention and treatment of mental ill22 ness and substance use among children with medi23 cally complex conditions receiving health home serv24 ices under this section. 


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1 ‘‘(e) GUIDANCE ON COORDINATING CARE FROM

2 OUT-OF-STATE PROVIDERS.— 

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

4 2020, the Secretary shall issue (and update as the 

5 Secretary determines necessary) guidance to State 

6 Medicaid directors on— 

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

8 providers to provide care to children with medi9 cally complex conditions; 

10 ‘‘(B) coordinating care for such children 

11 provided by such out-of-State providers (includ12 ing when provided in emergency and non-emer13 gency situations); 

14 ‘‘(C) reducing barriers for such children 

15 receiving care from such providers in a timely 

16 fashion; and 

17 ‘‘(D) processes for screening and enrolling 

18 such providers in the respective State plan (or 

19 a waiver of such plan), including efforts to 

20 streamline such processes or reduce the burden 

21 of such processes on such providers. 

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

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

24 for information to seek input from children with 

25 medically complex conditions and their families, 


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1 States, providers (including children’s hospitals, hos2 pitals, pediatricians, and other providers), managed 

3 care plans, children’s health groups, family and ben4 eficiary advocates, and other stakeholders with re5 spect to coordinating the care for such children pro6 vided by out-of-State providers. 

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

8 plan amendment— 

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

10 inpatient days and reductions in the total cost of 

11 care resulting from improved care coordination and 

12 management under this section; 

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

14 technology in providing health home services under 

15 this section and improving service delivery and co16 ordination across the care continuum (including the 

17 use of wireless patient technology to improve coordi18 nation and management of care and patient adher19 ence to recommendations made by their provider); 

20 and 

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

22 timely access to medically necessary care for children 

23 with medically complex conditions from out-of-State 

24 providers. 

25 ‘‘(g) DATA COLLECTION.— 


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1 ‘‘(1) PROVIDER REPORTING REQUIREMENTS.— 

2 In order to receive payments from a State under 

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

4 health care professionals operating with such a pro5 vider, or a health team shall report to the State, at 

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

7 required by the State, the following information: 

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

9 team of health care professionals, or health 

10 team, the name, National Provider Identifica11 tion number, address, and specific health care 

12 services offered to be provided to children with 

13 medically complex conditions who have selected 

14 such provider, team of health care profes15 sionals, or health team as the health home of 

16 such children. 

17 ‘‘(B) Information on all applicable meas18 ures for determining the quality of health home 

19 services provided by such provider, team of 

20 health care professionals, or health team, in21 cluding, to the extent applicable, child health 

22 quality measures and measures for centers of 

23 excellence for children with complex needs de24 veloped under this title, title XXI, and section 

25 1139A. 


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1 ‘‘(C) Such other information as the Sec2 retary shall specify in guidance. 

3 When appropriate and feasible, such provider, team 

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

5 case may be, shall use health information technology 

6 in providing the State with such information. 

7 ‘‘(2) STATE REPORTING REQUIREMENTS.— 

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

9 with a State plan amendment approved under 

10 this section shall report to the Secretary (and, 

11 upon request, to the Medicaid and CHIP Pay12 ment and Access Commission), at such time 

13 and in such form and manner determined by 

14 the Secretary to be reasonable and minimally 

15 burdensome, the following information: 

16 ‘‘(i) Information reported under para17 graph (1). 

18 ‘‘(ii) The number of children with 

19 medically complex conditions who have se20 lected a health home pursuant to this sec21 tion. 

22 ‘‘(iii) The nature, number, and preva23 lence of chronic conditions, life-threatening 

24 illnesses, disabilities, or rare diseases that 

25 such children have. 


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

2 payment models used to provide services to 

3 such children under this section. 

4 ‘‘(v) The number and characteristics 

5 of designated providers, teams of health 

6 care professionals operating with such pro7 viders, and health teams selected as health 

8 homes pursuant to this section, including 

9 the number and characteristics of out-of10 State providers, teams of health care pro11 fessionals operating with such providers, 

12 and health teams who have provided health 

13 care items and services to such children. 

14 ‘‘(vi) The extent to which such chil15 dren receive health care items and services 

16 under the State plan. 

17 ‘‘(vii) Quality measures developed spe18 cifically with respect to health care items 

19 and services provided to children with 

20 medically complex conditions. 

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

22 later than 90 days after a State has a State 

23 plan amendment approved under this section, 

24 such State shall submit to the Secretary, and 

25 make publicly available on the appropriate 


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1 State website, a report on how the State is im2 plementing guidance issued under subsection 

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

4 adopted by the State. 

5 ‘‘(h) RULE OF CONSTRUCTION.—Nothing in this sec6 tion may be construed— 

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

8 conditions to enroll in a health home under this sec9 tion; 

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

11 complex conditions in selecting a designated pro12 vider, team of health care professionals operating 

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

14 health home qualification standards established 

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

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

17 ‘‘(A) the entitlement of children with medi18 cally complex conditions to early and periodic 

19 screening, diagnostic, and treatment services 

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

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

22 and reporting requirements of a State under 

23 section 1902(a)(43). 

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


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1 ‘‘(1) CHILD WITH MEDICALLY COMPLEX CONDI2 TIONS.— 

3 ‘‘(A) IN GENERAL.—Subject to subpara4 graph (B), the term ‘child with medically com5 plex conditions’ means an individual under 21 

6 years of age who— 

7 ‘‘(i) is eligible for medical assistance 

8 under the State plan (or under a waiver of 

9 such plan); and 

10 ‘‘(ii) has at least— 

11 ‘‘(I) one or more chronic condi12 tions that cumulatively affect three or 

13 more organ systems and severely re14 duces cognitive or physical functioning 

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

16 breathe independently) and that also 

17 requires the use of medication, dura18 ble medical equipment, therapy, sur19 gery, or other treatments; or 

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

21 rare pediatric disease (as defined in 

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

23 Food, Drug, and Cosmetic Act (21 

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


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

2 in this paragraph shall prevent the Secretary 

3 from establishing higher levels as to the number 

4 or severity of chronic, life threatening illnesses, 

5 disabilities, rare diseases or mental health con6 ditions for purposes of determining eligibility 

7 for receipt of health home services under this 

8 section. 

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

10 condition’ means a serious, long-term physical, men11 tal, or developmental disability or disease, including 

12 the following: 

13 ‘‘(A) Cerebral palsy. 

14 ‘‘(B) Cystic fibrosis. 

15 ‘‘(C) HIV/AIDS. 

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

17 sickle cell disease. 

18 ‘‘(E) Muscular dystrophy. 

19 ‘‘(F) Spina bifida. 

20 ‘‘(G) Epilepsy. 

21 ‘‘(H) Severe autism spectrum disorder. 

22 ‘‘(I) Serious emotional disturbance or seri23 ous mental health illness. 

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

25 means a designated provider (including a provider 


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1 that operates in coordination with a team of health 

2 care professionals) or a health team selected by a 

3 child with medically complex conditions (or the fam4 ily of such child) to provide health home services. 

5 ‘‘(4) HEALTH HOME SERVICES.— 

6 ‘‘(A) IN GENERAL.—The term ‘health 

7 home services’ means comprehensive and timely 

8 high-quality services described in subparagraph 

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

10 a team of health care professionals operating 

11 with such a provider, or a health team. 

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

13 described in this subparagraph shall include— 

14 ‘‘(i) comprehensive care management; 

15 ‘‘(ii) care coordination, health pro16 motion, and providing access to the full 

17 range of pediatric specialty and sub18 specialty medical services, including serv19 ices from out-of-State providers, as medi20 cally necessary; 

21 ‘‘(iii) comprehensive transitional care, 

22 including appropriate follow-up, from inpa23 tient to other settings; 

24 ‘‘(iv) patient and family support (in25 cluding authorized representatives); 


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1 ‘‘(v) referrals to community and social 

2 support services, if relevant; and 

3 ‘‘(vi) use of health information tech4 nology to link services, as feasible and ap5 propriate. 

6 ‘‘(5) DESIGNATED PROVIDER.—The term ‘des7 ignated provider’ means a physician (including a pe8 diatrician or a pediatric specialty or subspecialty 

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

10 clinical group practice, prepaid inpatient health plan 

11 or prepaid ambulatory health plan (as defined by the 

12 Secretary), rural clinic, community health center, 

13 community mental health center, home health agen14 cy, or any other entity or provider that is deter15 mined by the State and approved by the Secretary 

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

17 medically complex conditions on the basis of docu18 mentation evidencing that the entity has the sys19 tems, expertise, and infrastructure in place to pro20 vide health home services. Such term may include 

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

22 children’s hospital. 

23 ‘‘(6) TEAM OF HEALTH CARE PROFES24 SIONALS.—The term ‘team of health care profes25 sionals’ means a team of health care professionals 


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1 (as described in the State plan amendment under 

2 this section) that may— 

3 ‘‘(A) include— 

4 ‘‘(i) physicians and other profes5 sionals, such as pediatricians or pediatric 

6 specialty or subspecialty providers, nurse 

7 care coordinators, dietitians, nutritionists, 

8 social workers, behavioral health profes9 sionals, physical therapists, occupational 

10 therapists, speech pathologists, nurses, in11 dividuals with experience in medical sup12 portive technologies, or any professionals 

13 determined to be appropriate by the State 

14 and approved by the Secretary; 

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

16 designated to coordinate such a team; and 

17 ‘‘(iii) community health workers, 

18 translators, and other individuals with cul19 turally-appropriate expertise; and 

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

21 a children’s hospital, hospital, community 

22 health center, community mental health center, 

23 rural clinic, clinical practice or clinical group 

24 practice, academic health center, or any entity 


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1 determined to be appropriate by the State and 

2 approved by the Secretary. 

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

4 has the meaning given such term for purposes of 

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

6 SEC. 4. EXTENSION OF THE COMMUNITY MENTAL HEALTH 

7 SERVICES DEMONSTRATION PROGRAM. 

8 Section 223(d)(3) of the Protecting Access to Medi9 care Act of 2014 (42 U.S.C. 1396a note) is amended by 

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

11 subsection’’ and inserting ‘‘to conduct demonstration pro12 grams under this subsection for 2 years or through June 

13 30, 2019, whichever is longer’’. 

14 SEC. 5. ADDITIONAL FUNDING FOR THE MONEY FOLLOWS 

15 THE PERSON REBALANCING DEMONSTRA16 TION. 

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

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

19 ‘‘$112,000,000’’ and inserting ‘‘132,000,000’’. 

20 SEC. 6. PREVENTING THE MISCLASSIFICATION OF DRUGS 

21 UNDER THE MEDICAID DRUG REBATE PRO22 GRAM. 

23 (a) APPLICATION OF CIVIL MONEY PENALTY FOR

24 MISCLASSIFICATION OF COVERED OUTPATIENT

25 DRUGS.— 


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

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

3 amended— 

4 (A) in the paragraph heading, by inserting 

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

6 (B) in subparagraph (A)— 

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

8 at the end and inserting a semicolon; 

9 (ii) in clause (iii), by striking the pe10 riod at the end and inserting a semicolon; 

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

12 semicolon at the end and inserting ‘‘; 

13 and’’; and 

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

15 following new clause: 

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

17 last day of each month of a rebate period 

18 under the agreement, such drug product 

19 information as the Secretary shall require 

20 for each of the manufacturer’s covered out21 patient drugs.’’; and 

22 (C) in subparagraph (C)— 

23 (i) in clause (ii), by inserting ‘‘, in24 cluding information related to drug pric25 ing, drug product information, and data 


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1 related to drug pricing or drug product in2 formation,’’ after ‘‘provides false informa3 tion’’; 

4 (ii) by adding at the end the following 

5 new clauses: 

6 ‘‘(iii) MISCLASSIFIED DRUG PRODUCT

7 OR MISREPORTED INFORMATION.— 

8 ‘‘(I) IN GENERAL.—Any manu9 facturer with an agreement under this 

10 section that knowingly (as defined in 

11 section 1003.110 of title 42, Code of 

12 Federal Regulations (or any successor 

13 regulation)) misclassifies a covered 

14 outpatient drug, such as by knowingly 

15 submitting incorrect drug product in16 formation, is subject to a civil money 

17 penalty for each covered outpatient 

18 drug that is misclassified in an 

19 amount not to exceed 2 times the 

20 amount of the difference between— 

21 ‘‘(aa) the total amount of 

22 rebates that the manufacturer 

23 paid with respect to the drug to 

24 all States for all rebate periods 


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1 during which the drug was 

2 misclassified; and 

3 ‘‘(bb) the total amount of 

4 rebates that the manufacturer 

5 would have been required to pay, 

6 as determined by the Secretary 

7 using drug product information 

8 provided by the manufacturer, 

9 with respect to the drug to all 

10 States for all rebate periods dur11 ing which the drug was 

12 misclassified if the drug had been 

13 correctly classified. 

14 ‘‘(II) OTHER PENALTIES AND

15 RECOVERY OF UNDERPAID RE16 BATES.—The civil money penalties de17 scribed in subclause (I) are in addi18 tion to other penalties as may be pre19 scribed by law and any other recovery 

20 of the underlying underpayment for 

21 rebates due under this section or the 

22 terms of the rebate agreement as de23 termined by the Secretary. 

24 ‘‘(iv) INCREASING OVERSIGHT AND

25 ENFORCEMENT.—Each year the Secretary 


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1 shall retain, in addition to any amount re2 tained by the Secretary to recoup inves3 tigation and litigation costs related to the 

4 enforcement of the civil money penalties 

5 under this subparagraph and subsection 

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

7 percent of the total amount of civil money 

8 penalties collected under this subparagraph 

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

10 year, and such retained amount shall be 

11 available to the Secretary, without further 

12 appropriation and until expended, for ac13 tivities related to the oversight and en14 forcement of this section and agreements 

15 under this section, including— 

16 ‘‘(I) improving drug data report17 ing systems; 

18 ‘‘(II) evaluating and ensuring 

19 manufacturer compliance with rebate 

20 obligations; and 

21 ‘‘(III) oversight and enforcement 

22 related to ensuring that manufactur23 ers accurately and fully report drug 

24 information, including data related to 

25 drug classification.’’; and 


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1 (iii) in subparagraph (D)— 

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

3 and’’ and inserting a comma; 

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

5 period and inserting ‘‘, and’’; and 

6 (III) by inserting after clause (v) 

7 the following new clause: 

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

9 product or classification information that 

10 were not considered confidential by the 

11 Secretary on the day before the date of the 

12 enactment of this clause.’’. 

13 (2) TECHNICAL AMENDMENTS.— 

14 (A) Section 1903(i)(10) of the Social Secu15 rity Act (42 U.S.C. 1396b(i)(10)) is amended— 

16 (i) in subparagraph (C)— 

17 (I) by adjusting the left margin 

18 so as to align with the left margin of 

19 subparagraph (B); and 

20 (II) by striking ‘‘, and’’ and in21 serting a semicolon; 

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

23 ‘‘; or’’ and inserting ‘‘; and’’; and 

24 (iii) by adding at the end the fol25 lowing new subparagraph: 


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1 ‘‘(E) with respect to any amount expended 

2 for a covered outpatient drug for which a sus3 pension under section 1927(c)(4)(B)(ii)(II) is in 

4 effect; or’’. 

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

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

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

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

9 and (f)(4)’’. 

10 (b) RECOVERY OF UNPAID REBATE AMOUNTS DUE

11 TO MISCLASSIFICATION OF COVERED OUTPATIENT

12 DRUGS.— 

13 (1) IN GENERAL.—Section 1927(c) of the So14 cial Security Act (42 U.S.C. 1396r–8(c)) is amended 

15 by adding at the end the following new paragraph: 

16 ‘‘(4) RECOVERY OF UNPAID REBATE AMOUNTS

17 DUE TO MISCLASSIFICATION OF COVERED OUT18 PATIENT DRUGS.— 

19 ‘‘(A) IN GENERAL.—If the Secretary deter20 mines that a manufacturer with an agreement 

21 under this section paid a lower per-unit rebate 

22 amount to a State for a rebate period as a re23 sult of the misclassification by the manufac24 turer of a covered outpatient drug (without re25 gard to whether the manufacturer knowingly 


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1 made the misclassification or should have 

2 known that the misclassification would be 

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

4 manufacturer would have paid to the State if 

5 the drug had been correctly classified, the man6 ufacturer shall pay to the State an amount 

7 equal to the product of— 

8 ‘‘(i) the difference between— 

9 ‘‘(I) the per-unit rebate amount 

10 paid to the State for the period; and 

11 ‘‘(II) the per-unit rebate amount 

12 that the manufacturer would have 

13 paid to the State for the period, as 

14 determined by the Secretary, if the 

15 drug had been correctly classified; and 

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

17 for under the State plan in the period. 

18 ‘‘(B) AUTHORITY TO CORRECT

19 MISCLASSIFICATIONS.— 

20 ‘‘(i) IN GENERAL.—If the Secretary 

21 determines that a manufacturer with an 

22 agreement under this section has 

23 misclassified a covered outpatient drug 

24 (without regard to whether the manufac25 turer knowingly made the misclassification 


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1 or should have known that the 

2 misclassification would be made), the Sec3 retary shall notify the manufacturer of the 

4 misclassification and require the manufac5 turer to correct the misclassification in a 

6 timely manner. 

7 ‘‘(ii) ENFORCEMENT.—If, after receiv8 ing notice of a misclassification from the 

9 Secretary under clause (i), a manufacturer 

10 fails to correct the misclassification by 

11 such time as the Secretary shall require, 

12 until the manufacturer makes such correc13 tion, the Secretary may do any or all of 

14 the following: 

15 ‘‘(I) Correct the misclassification, 

16 using drug product information pro17 vided by the manufacturer, on behalf 

18 of the manufacturer. 

19 ‘‘(II) Suspend the misclassified 

20 drug and the drug’s status as a cov21 ered outpatient drug under the manu22 facturer’s national rebate agreement, 

23 and exclude the misclassified drug 

24 from Federal financial participation in 


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1 accordance with section 

2 1903(i)(10)(E). 

3 ‘‘(III) Impose a civil money pen4 alty (which shall be in addition to any 

5 other recovery or penalty which may 

6 be available under this section or any 

7 other provision of law) for each rebate 

8 period during which the drug is 

9 misclassified not to exceed an amount 

10 equal to the product of— 

11 ‘‘(aa) the total number of 

12 units of each dosage form and 

13 strength of such misclassified 

14 drug paid for under any State 

15 plan during such a rebate period; 

16 and 

17 ‘‘(bb) 23.1 percent of the av18 erage manufacturer price for the 

19 dosage form and strength of such 

20 misclassified drug. 

21 ‘‘(C) REPORTING AND TRANSPARENCY.— 

22 ‘‘(i) IN GENERAL.—The Secretary 

23 shall submit a report to Congress on at 

24 least an annual basis that includes infor25 mation on the covered outpatient drugs 


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1 that have been identified as misclassified, 

2 any steps taken to reclassify such drugs, 

3 the actions the Secretary has taken to en4 sure the payment of any rebate amounts 

5 which were unpaid as a result of such 

6 misclassification, and a disclosure of ex7 penditures from the fund created in sub8 section (b)(3)(C)(iv), including an account9 ing of how such funds have been allocated 

10 and spent in accordance with such sub11 section. 

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

13 shall make the information contained in 

14 the report required under clause (i) avail15 able to the public on a timely basis. 

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

17 Actions taken and penalties imposed under this 

18 clause shall be in addition to other remedies 

19 available to the Secretary including terminating 

20 the manufacturer’s rebate agreement for non21 compliance with the terms of such agreement 

22 and shall not exempt a manufacturer from, or 

23 preclude the Secretary from pursuing, any civil 

24 money penalty under this title or title XI, or 


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1 any other penalty or action as may be pre2 scribed by law.’’. 

3 (2) OFFSET OF RECOVERED AMOUNTS AGAINST

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

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

6 8(b)(1)(B)) is amended by inserting ‘‘, including 

7 amounts received by a State under subsection 

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

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

10 the Social Security Act (42 U.S.C. 1396r–8(k)) is amend11 ed— 

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

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

14 (2) in paragraph (7)(A)— 

15 (A) by striking ‘‘an original new drug ap16 plication’’ and inserting ‘‘a new drug applica17 tion’’ each place it appears; 

18 (B) in clause (i), by striking ‘‘(not includ19 ing any drug described in paragraph (5))’’ and 

20 inserting ‘‘, including a drug product approved 

21 for marketing as a non-prescription drug that is 

22 regarded as a covered outpatient drug under 

23 paragraph (4),’’; 

24 (C) in clause (ii)— 


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1 (i) by striking ‘‘was originally mar2 keted’’ and inserting ‘‘is marketed’’; and 

3 (ii) by inserting ‘‘, unless the Sec4 retary determines that a narrow exception 

5 applies (as described in section 447.502 of 

6 title 42, Code of Federal Regulations (or 

7 any successor regulation))’’ before the pe8 riod; and 

9 (D) in clause (iv)— 

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

11 product approved for marketing as a non12 prescription drug that is regarded as a 

13 covered outpatient drug under paragraph 

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

15 (ii) by inserting ‘‘unless the Secretary 

16 determines that a narrow exception applies 

17 (as described in section 447.502 of title 

18 42, Code of Federal Regulations (or any 

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

20 new drug application’’; and 

21 (iii) by adding at the end the fol22 lowing new sentence: ‘‘Such term also in23 cludes a covered outpatient drug that is a 

24 biological product licensed, produced, or 

25 distributed under a biologics license appliVerDate Sep 11 2014 19:31 Mar 22, 2019 Jkt 089200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\H1839.IH H1839

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1 cation approved by the Food and Drug Ad2 ministration.’’. 

3 (d) EXCLUSION OF MANUFACTURERS FOR KNOWING

4 MISCLASSIFICATION OF COVERED OUTPATIENT

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

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

7 following new paragraph: 

8 ‘‘(17) KNOWINGLY MISCLASSIFYING COVERED

9 OUTPATIENT DRUGS.—Any manufacturer or officer, 

10 director, agent, or managing employee of such man11 ufacturer that knowingly misclassifies a covered out12 patient drug under an agreement under section 

13 1927, knowingly fails to correct such misclassifica14 tion, or knowingly provides false information related 

15 to drug pricing, drug product information, or data 

16 related to drug pricing or drug product informa17 tion.’’. 

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

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

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

21 supplied by manufacturers under agreements under sec22 tion 1927 of the Social Security Act (42 U.S.C. 1396r– 

23 8) on or after such date. 


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

2 FOR CHILD SUPPORT SERVICES. 

3 (a) IN GENERAL.—Section 202(a)(2) of the Bipar4 tisan Budget Act of 2013 (Public Law 113–67) is amend5 ed by striking ‘‘90 days’’ and inserting ‘‘100 days’’. 

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

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

8 of this Act. 

9 SEC. 8. DENIAL OF FFP FOR CERTAIN EXPENDITURES RE10 LATING TO VACUUM ERECTION SYSTEMS 

11 AND PENILE PROSTHETIC IMPLANTS. 

12 (a) IN GENERAL.—Section 1903(i) of the Social Se13 curity Act (42 U.S.C. 1396b(i)) is amended by inserting 

14 after paragraph (11) the following: 

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

16 for— 

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

18 medically necessary; or 

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

20 replacement of a penile prosthetic implant (un21 less such insertion, repair, or removal and re22 placement is medically necessary); or’’. 

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

24 subsection (a) shall apply with respect to items and serv25 ices furnished on or after January 1, 2020. 

Æ 


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