H. R. 1839 

One Hundred Sixteenth Congress 

of the 

United States of America 

AT THE FIRST SESSION 

Begun and held at the City of Washington on Thursday, 

the third day of January, two thousand and nineteen 

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. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Medicaid Services Investment 

and Accountability Act of 2019’’. 

SEC. 2. EXTENSION OF PROTECTION FOR MEDICAID RECIPIENTS OF 

HOME AND COMMUNITY-BASED SERVICES AGAINST 

SPOUSAL IMPOVERISHMENT. 

(a) IN GENERAL.—Section 2404 of Public Law 111–148 (42 

U.S.C. 1396r–5 note), as amended by section 3(a) of the Medicaid 

Extenders Act of 2019 (Public Law 116–3), is amended by striking 

‘‘March 31, 2019’’ and inserting ‘‘September 30, 2019’’. 

(b) RULE OF CONSTRUCTION.— 

(1) PROTECTING STATE SPOUSAL INCOME AND ASSET DISREGARD FLEXIBILITY UNDER WAIVERS AND PLAN AMENDMENTS.— 

Nothing in section 2404 of Public Law 111–148 (42 U.S.C. 

1396r–5 note) or section 1924 of the Social Security Act (42 

U.S.C. 1396r–5) shall be construed as prohibiting a State from 

disregarding an individual’s spousal income and assets under 

a State waiver or plan amendment described in paragraph 

(2) for purposes of making determinations of eligibility for 

home and community-based services or home and communitybased attendant services and supports under such waiver or 

plan amendment. 

(2) STATE WAIVER OR PLAN AMENDMENT DESCRIBED.—A 

State waiver or plan amendment described in this paragraph 

is any of the following: 

(A) A waiver or plan amendment to provide medical 

assistance for home and community-based services under 

a waiver or plan amendment under subsection (c), (d), 

or (i) of section 1915 of the Social Security Act (42 U.S.C. 

1396n) or under section 1115 of such Act (42 U.S.C. 1315). 

(B) A plan amendment to provide medical assistance 

for home and community-based services for individuals by 

reason of being determined eligible under section 

1902(a)(10)(C) of such Act (42 U.S.C. 1396a(a)(10)(C)) or 

by reason of section 1902(f) of such Act (42 U.S.C. 1396a(f)) 
H. R. 1839—2 

or otherwise on the basis of a reduction of income based 

on costs incurred for medical or other remedial care under 

which the State disregarded the income and assets of the 

individual’s spouse in determining the initial and ongoing 

financial eligibility of an individual for such services in 

place of the spousal impoverishment provisions applied 

under section 1924 of such Act (42 U.S.C. 1396r–5). 

(C) A plan amendment to provide medical assistance 

for home and community-based attendant services and supports under section 1915(k) of such Act (42 U.S.C. 

1396n(k)). 

SEC. 3. STATE OPTION TO PROVIDE COORDINATED CARE THROUGH 

A HEALTH HOME FOR CHILDREN WITH MEDICALLY COMPLEX CONDITIONS. 

Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) 

is amended by inserting after section 1945 the following new section: 

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

THROUGH A HEALTH HOME FOR CHILDREN WITH MEDICALLY COMPLEX CONDITIONS. 

‘‘(a) IN GENERAL.—Notwithstanding section 1902(a)(1) (relating 

to statewideness) and section 1902(a)(10)(B) (relating to comparability), beginning October 1, 2022, a State, at its option as 

a State plan amendment, may provide for medical assistance under 

this title to children with medically complex conditions who choose 

to enroll in a health home under this section by selecting a designated provider, a team of health care professionals operating 

with such a provider, or a health team as the child’s health home 

for purposes of providing the child with health home services. 

‘‘(b) HEALTH HOME QUALIFICATION STANDARDS.—The Secretary 

shall establish standards for qualification as a health home for 

purposes of this section. Such standards shall include requiring 

designated providers, teams of health care professionals operating 

with such providers, and health teams to demonstrate to the State 

the ability to do the following: 

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

complex conditions, including access to pediatric emergency 

services at all times. 

‘‘(2) Develop an individualized comprehensive pediatric 

family-centered care plan for children with medically complex 

conditions that accommodates patient preferences. 

‘‘(3) Work in a culturally and linguistically appropriate 

manner with the family of a child with medically complex 

conditions to develop and incorporate into such child’s care 

plan, in a manner consistent with the needs of the child and 

the choices of the child’s family, ongoing home care, communitybased pediatric primary care, pediatric inpatient care, social 

support services, and local hospital pediatric emergency care. 

‘‘(4) Coordinate access to— 

‘‘(A) subspecialized pediatric services and programs for 

children with medically complex conditions, including the 

most intensive diagnostic, treatment, and critical care 

levels as medically necessary; and 

‘‘(B) palliative services if the State provides such services under the State plan (or a waiver of such plan). 

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

conditions with out-of-State providers furnishing care to such 
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children to the maximum extent practicable for the families 

of such children and where medically necessary, in accordance 

with guidance issued under subsection (e)(1) and section 431.52 

of title 42, Code of Federal Regulations. 

‘‘(6) Collect and report information under subsection (g)(1). 

‘‘(c) PAYMENTS.— 

‘‘(1) IN GENERAL.—A State shall provide a designated provider, a team of health care professionals operating with such 

a provider, or a health team with payments for the provision 

of health home services to each child with medically complex 

conditions that selects such provider, team of health care professionals, or health team as the child’s health home. Payments 

made to a designated provider, a team of health care professionals operating with such a provider, or a health team for 

such services shall be treated as medical assistance for purposes 

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

quarters that the State plan amendment is in effect, the Federal 

medical assistance percentage applicable to such payments 

shall be increased by 15 percentage points, but in no case 

may exceed 90 percent. 

‘‘(2) METHODOLOGY.— 

‘‘(A) IN GENERAL.—The State shall specify in the State 

plan amendment the methodology the State will use for 

determining payment for the provision of health home services. Such methodology for determining payment— 

‘‘(i) may be tiered to reflect, with respect to each 

child with medically complex conditions provided such 

services by a designated provider, a team of health 

care professionals operating with such a provider, or 

a health team, the severity or number of each such 

child’s chronic conditions, life-threatening illnesses, 

disabilities, or rare diseases, or the specific capabilities 

of the provider, team of health care professionals, or 

health team; and 

‘‘(ii) shall be established consistent with section 

1902(a)(30)(A). 

‘‘(B) ALTERNATE MODELS OF PAYMENT.—The methodology for determining payment for provision of health home 

services under this section shall not be limited to a permember per-month basis and may provide (as proposed 

by the State and subject to approval by the Secretary) 

for alternate models of payment. 

‘‘(3) PLANNING GRANTS.— 

‘‘(A) IN GENERAL.—Beginning October 1, 2022, the Secretary may award planning grants to States for purposes 

of developing a State plan amendment under this section. 

A planning grant awarded to a State under this paragraph 

shall remain available until expended. 

‘‘(B) STATE CONTRIBUTION.—A State awarded a planning grant shall contribute an amount equal to the State 

percentage determined under section 1905(b) (without 

regard to section 5001 of Public Law 111–5) for each fiscal 

year for which the grant is awarded. 

‘‘(C) LIMITATION.—The total amount of payments made 

to States under this paragraph shall not exceed $5,000,000. 

‘‘(d) COORDINATING CARE.— 
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‘‘(1) HOSPITAL NOTIFICATION.—A State with a State plan 

amendment approved under this section shall require each 

hospital that is a participating provider under the State plan 

(or a waiver of such plan) to establish procedures for, in the 

case of a child with medically complex conditions who is enrolled 

in a health home pursuant to this section and seeks treatment 

in the emergency department of such hospital, notifying the 

health home of such child of such treatment. 

‘‘(2) EDUCATION WITH RESPECT TO AVAILABILITY OF HEALTH

HOME SERVICES.—In order for a State plan amendment to be 

approved under this section, a State shall include in the State 

plan amendment a description of the State’s process for educating providers participating in the State plan (or a waiver 

of such plan) on the availability of health home services for 

children with medically complex conditions, including the 

process by which such providers can refer such children to 

a designated provider, team of health care professionals operating such a provider, or health team for the purpose of establishing a health home through which such children may receive 

such services. 

‘‘(3) FAMILY EDUCATION.—In order for a State plan amendment to be approved under this section, a State shall include 

in the State plan amendment a description of the State’s process 

for educating families with children eligible to receive health 

home services pursuant to this section of the availability of 

such services. Such process shall include the participation of 

family-to-family entities or other public or private organizations 

or entities who provide outreach and information on the availability of health care items and services to families of individuals eligible to receive medical assistance under the State plan 

(or a waiver of such plan). 

‘‘(4) MENTAL HEALTH COORDINATION.—A State with a State 

plan amendment approved under this section shall consult and 

coordinate, as appropriate, with the Secretary in addressing 

issues regarding the prevention and treatment of mental illness 

and substance use among children with medically complex 

conditions receiving health home services under this section. 

‘‘(e) GUIDANCE ON COORDINATING CARE FROM OUT-OF-STATE

PROVIDERS.— 

‘‘(1) IN GENERAL.—Not later than October 1, 2020, the 

Secretary shall issue (and update as the Secretary determines 

necessary) guidance to State Medicaid directors on— 

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

provide care to children with medically complex conditions; 

‘‘(B) coordinating care for such children provided by 

such out-of-State providers (including when provided in 

emergency and non-emergency situations); 

‘‘(C) reducing barriers for such children receiving care 

from such providers in a timely fashion; and 

‘‘(D) processes for screening and enrolling such providers in the respective State plan (or a waiver of such 

plan), including efforts to streamline such processes or 

reduce the burden of such processes on such providers. 

‘‘(2) STAKEHOLDER INPUT.—In carrying out paragraph (1), 

the Secretary shall issue a request for information to seek 

input from children with medically complex conditions and 

their families, States, providers (including children’s hospitals, 
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hospitals, pediatricians, and other providers), managed care 

plans, children’s health groups, family and beneficiary advocates, and other stakeholders with respect to coordinating the 

care for such children provided by out-of-State providers. 

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

amendment— 

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

days and reductions in the total cost of care resulting from 

improved care coordination and management under this section; 

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

in providing health home services under this section and 

improving service delivery and coordination across the care 

continuum (including the use of wireless patient technology 

to improve coordination and management of care and patient 

adherence to recommendations made by their provider); and 

‘‘(3) a methodology for tracking prompt and timely access 

to medically necessary care for children with medically complex 

conditions from out-of-State providers. 

‘‘(g) DATA COLLECTION.— 

‘‘(1) PROVIDER REPORTING REQUIREMENTS.—In order to 

receive payments from a State under subsection (c), a designated provider, a team of health care professionals operating 

with such a provider, or a health team shall report to the 

State, at such time and in such form and manner as may 

be required by the State, the following information: 

‘‘(A) With respect to each such provider, team of health 

care professionals, or health team, the name, National 

Provider Identification number, address, and specific health 

care services offered to be provided to children with medically complex conditions who have selected such provider, 

team of health care professionals, or health team as the 

health home of such children. 

‘‘(B) Information on all applicable measures for determining the quality of health home services provided by 

such provider, team of health care professionals, or health 

team, including, to the extent applicable, child health 

quality measures and measures for centers of excellence 

for children with complex needs developed under this title, 

title XXI, and section 1139A. 

‘‘(C) Such other information as the Secretary shall 

specify in guidance. 

When appropriate and feasible, such provider, team of health 

care professionals, or health team, as the case may be, shall 

use health information technology in providing the State with 

such information. 

‘‘(2) STATE REPORTING REQUIREMENTS.— ‘‘(A) COMPREHENSIVE REPORT.—A State with a State 

plan amendment approved under this section shall report 

to the Secretary (and, upon request, to the Medicaid and 

CHIP Payment and Access Commission), at such time and 

in such form and manner determined by the Secretary 

to be reasonable and minimally burdensome, the following 

information: 

‘‘(i) Information reported under paragraph (1). 

‘‘(ii) The number of children with medically complex conditions who have selected a health home pursuant to this section. 
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‘‘(iii) The nature, number, and prevalence of 

chronic conditions, life-threatening illnesses, disabilities, or rare diseases that such children have. 

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

models used to provide services to such children under 

this section. 

‘‘(v) The number and characteristics of designated 

providers, teams of health care professionals operating 

with such providers, and health teams selected as 

health homes pursuant to this section, including the 

number and characteristics of out-of-State providers, 

teams of health care professionals operating with such 

providers, and health teams who have provided health 

care items and services to such children. 

‘‘(vi) The extent to which such children receive 

health care items and services under the State plan. 

‘‘(vii) Quality measures developed specifically with 

respect to health care items and services provided to 

children with medically complex conditions. 

‘‘(B) REPORT ON BEST PRACTICES.—Not later than 90 

days after a State has a State plan amendment approved 

under this section, such State shall submit to the Secretary, 

and make publicly available on the appropriate State 

website, a report on how the State is implementing guidance issued under subsection (e)(1), including through any 

best practices adopted by the State. 

‘‘(h) RULE OF CONSTRUCTION.—Nothing in this section may 

be construed— 

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

to enroll in a health home under this section; 

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

conditions in selecting a designated provider, team of health 

care professionals operating with such a provider, or health 

team that meets the health home qualification standards established under subsection (b) as the child’s health home; or 

‘‘(3) to reduce or otherwise modify— 

‘‘(A) the entitlement of children with medically complex 

conditions to early and periodic screening, diagnostic, and 

treatment services (as defined in section 1905(r)); or 

‘‘(B) the informing, providing, arranging, and reporting 

requirements of a State under section 1902(a)(43). 

‘‘(i) DEFINITIONS.—In this section: 

‘‘(1) CHILD WITH MEDICALLY COMPLEX CONDITIONS.— 

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

term ‘child with medically complex conditions’ means an 

individual under 21 years of age who— 

‘‘(i) is eligible for medical assistance under the 

State plan (or under a waiver of such plan); and 

‘‘(ii) has at least— 

‘‘(I) one or more chronic conditions that 

cumulatively affect three or more organ systems 

and severely reduces cognitive or physical functioning (such as the ability to eat, drink, or breathe 

independently) and that also requires the use of 

medication, durable medical equipment, therapy, 

surgery, or other treatments; or 
H. R. 1839—7 

‘‘(II) one life-limiting illness or rare pediatric 

disease (as defined in section 529(a)(3) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

360ff(a)(3))). 

‘‘(B) RULE OF CONSTRUCTION.—Nothing in this paragraph shall prevent the Secretary from establishing higher 

levels as to the number or severity of chronic, life threatening illnesses, disabilities, rare diseases or mental health 

conditions for purposes of determining eligibility for receipt 

of health home services under this section. 

‘‘(2) CHRONIC CONDITION.—The term ‘chronic condition’ 

means a serious, long-term physical, mental, or developmental 

disability or disease, including the following: 

‘‘(A) Cerebral palsy. 

‘‘(B) Cystic fibrosis. 

‘‘(C) HIV/AIDS. 

‘‘(D) Blood diseases, such as anemia or sickle cell disease. 

‘‘(E) Muscular dystrophy. 

‘‘(F) Spina bifida. 

‘‘(G) Epilepsy. 

‘‘(H) Severe autism spectrum disorder. 

‘‘(I) Serious emotional disturbance or serious mental 

health illness. 

‘‘(3) HEALTH HOME.—The term ‘health home’ means a designated provider (including a provider that operates in coordination with a team of health care professionals) or a health 

team selected by a child with medically complex conditions 

(or the family of such child) to provide health home services. 

‘‘(4) HEALTH HOME SERVICES.— 

‘‘(A) IN GENERAL.—The term ‘health home services’ 

means comprehensive and timely high-quality services 

described in subparagraph (B) that are provided by a designated provider, a team of health care professionals operating with such a provider, or a health team. 

‘‘(B) SERVICES DESCRIBED.—The services described in 

this subparagraph shall include— 

‘‘(i) comprehensive care management; 

‘‘(ii) care coordination, health promotion, and providing access to the full range of pediatric specialty 

and subspecialty medical services, including services 

from out-of-State providers, as medically necessary; 

‘‘(iii) comprehensive transitional care, including 

appropriate follow-up, from inpatient to other settings; 

‘‘(iv) patient and family support (including authorized representatives); 

‘‘(v) referrals to community and social support services, if relevant; and 

‘‘(vi) use of health information technology to link 

services, as feasible and appropriate. 

‘‘(5) DESIGNATED PROVIDER.—The term ‘designated provider’ 

means a physician (including a pediatrician or a pediatric specialty or subspecialty provider), children’s hospital, clinical practice or clinical group practice, prepaid inpatient health plan 

or prepaid ambulatory health plan (as defined by the Secretary), 

rural clinic, community health center, community mental health 

center, home health agency, or any other entity or provider 
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that is determined by the State and approved by the Secretary 

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

complex conditions on the basis of documentation evidencing 

that the entity has the systems, expertise, and infrastructure 

in place to provide health home services. Such term may include 

providers who are employed by, or affiliated with, a children’s 

hospital. 

‘‘(6) TEAM OF HEALTH CARE PROFESSIONALS.—The term 

‘team of health care professionals’ means a team of health 

care professionals (as described in the State plan amendment 

under this section) that may— 

‘‘(A) include— 

‘‘(i) physicians and other professionals, such as 

pediatricians or pediatric specialty or subspecialty providers, nurse care coordinators, dietitians, nutritionists, social workers, behavioral health professionals, 

physical therapists, occupational therapists, speech 

pathologists, nurses, individuals with experience in 

medical supportive technologies, or any professionals 

determined to be appropriate by the State and 

approved by the Secretary; 

‘‘(ii) an entity or individual who is designated to 

coordinate such a team; and 

‘‘(iii) community health workers, translators, and 

other individuals with culturally-appropriate expertise; 

and 

‘‘(B) be freestanding, virtual, or based at a children’s 

hospital, hospital, community health center, community 

mental health center, rural clinic, clinical practice or clinical group practice, academic health center, or any entity 

determined to be appropriate by the State and approved 

by the Secretary. 

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

meaning given such term for purposes of section 3502 of Public 

Law 111–148.’’. 

SEC. 4. EXTENSION OF THE COMMUNITY MENTAL HEALTH SERVICES 

DEMONSTRATION PROGRAM. 

Section 223(d)(3) of the Protecting Access to Medicare Act of 

2014 (42 U.S.C. 1396a note) is amended by striking ‘‘for 2-year 

demonstration programs under this subsection’’ and inserting ‘‘to 

conduct demonstration programs under this subsection for 2 years 

or through June 30, 2019, whichever is longer’’. 

SEC. 5. ADDITIONAL FUNDING FOR THE MONEY FOLLOWS THE PERSON 

REBALANCING DEMONSTRATION. 

Section 6071(h)(1)(F) of the Deficit Reduction Act of 2005 (42 

U.S.C. 1396a note) is amended by striking ‘‘$112,000,000’’ and 

inserting ‘‘132,000,000’’. 

SEC. 6. PREVENTING THE MISCLASSIFICATION OF DRUGS UNDER THE 

MEDICAID DRUG REBATE PROGRAM. 

(a) APPLICATION OF CIVIL MONEY PENALTY FOR

MISCLASSIFICATION OF COVERED OUTPATIENT DRUGS.— 

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

Act (42 U.S.C. 1396r–8(b)(3)) is amended— 

(A) in the paragraph heading, by inserting ‘‘AND DRUG

PRODUCT’’ after ‘‘PRICE’’; 
H. R. 1839—9 

(B) in subparagraph (A)— 

(i) in clause (ii), by striking ‘‘; and’’ at the end 

and inserting a semicolon; 

(ii) in clause (iii), by striking the period at the 

end and inserting a semicolon; 

(iii) in clause (iv), by striking the semicolon at 

the end and inserting ‘‘; and’’; and 

(iv) by inserting after clause (iv) the following new 

clause: 

‘‘(v) not later than 30 days after the last day of 

each month of a rebate period under the agreement, 

such drug product information as the Secretary shall 

require for each of the manufacturer’s covered outpatient drugs.’’; and 

(C) in subparagraph (C)— 

(i) in clause (ii), by inserting ‘‘, including information related to drug pricing, drug product information, 

and data related to drug pricing or drug product 

information,’’ after ‘‘provides false information’’; 

(ii) by adding at the end the following new clauses: 

‘‘(iii) MISCLASSIFIED DRUG PRODUCT OR

MISREPORTED INFORMATION.— 

‘‘(I) IN GENERAL.—Any manufacturer with an 

agreement under this section that knowingly (as 

defined in section 1003.110 of title 42, Code of 

Federal Regulations (or any successor regulation)) 

misclassifies a covered outpatient drug, such as 

by knowingly submitting incorrect drug product 

information, is subject to a civil money penalty 

for each covered outpatient drug that is 

misclassified in an amount not to exceed 2 times 

the amount of the difference between— 

‘‘(aa) the total amount of rebates that the 

manufacturer paid with respect to the drug 

to all States for all rebate periods during 

which the drug was misclassified; and 

‘‘(bb) the total amount of rebates that the 

manufacturer would have been required to 

pay, as determined by the Secretary using 

drug product information provided by the 

manufacturer, with respect to the drug to all 

States for all rebate periods during which the 

drug was misclassified if the drug had been 

correctly classified. 

‘‘(II) OTHER PENALTIES AND RECOVERY OF

UNDERPAID REBATES.—The civil money penalties 

described in subclause (I) are in addition to other 

penalties as may be prescribed by law and any 

other recovery of the underlying underpayment 

for rebates due under this section or the terms 

of the rebate agreement as determined by the Secretary. 

‘‘(iv) INCREASING OVERSIGHT AND ENFORCEMENT.— 

Each year the Secretary shall retain, in addition to 

any amount retained by the Secretary to recoup investigation and litigation costs related to the enforcement 

of the civil money penalties under this subparagraph 
H. R. 1839—10 

and subsection (c)(4)(B)(ii)(III), an amount equal to 

25 percent of the total amount of civil money penalties 

collected under this subparagraph and subsection 

(c)(4)(B)(ii)(III) for the year, and such retained amount 

shall be available to the Secretary, without further 

appropriation and until expended, for activities related 

to the oversight and enforcement of this section and 

agreements under this section, including— 

‘‘(I) improving drug data reporting systems; 

‘‘(II) evaluating and ensuring manufacturer 

compliance with rebate obligations; and 

‘‘(III) oversight and enforcement related to 

ensuring that manufacturers accurately and fully 

report drug information, including data related to 

drug classification.’’; and 

(iii) in subparagraph (D)— 

(I) in clause (iv), by striking ‘‘, and’’ and 

inserting a comma; 

(II) in clause (v), by striking the period and 

inserting ‘‘, and’’; and 

(III) by inserting after clause (v) the following 

new clause: 

‘‘(vi) in the case of categories of drug product or 

classification information that were not considered confidential by the Secretary on the day before the date 

of the enactment of this clause.’’. 

(2) TECHNICAL AMENDMENTS.— 

(A) Section 1903(i)(10) of the Social Security Act (42 

U.S.C. 1396b(i)(10)) is amended— 

(i) in subparagraph (C)— 

(I) by adjusting the left margin so as to align 

with the left margin of subparagraph (B); and 

(II) by striking ‘‘, and’’ and inserting a semicolon; 

(ii) in subparagraph (D), by striking ‘‘; or’’ and 

inserting ‘‘; and’’; and 

(iii) by adding at the end the following new 

subparagraph: 

‘‘(E) with respect to any amount expended for a covered 

outpatient drug for which a suspension under section 

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

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

(42 U.S.C. 1396r–8(b)(3)(C)(ii)) is amended by striking ‘‘subsections (a) and (b)’’ and inserting ‘‘subsections (a), (b), 

(f)(3), and (f)(4)’’. 

(b) RECOVERY OF UNPAID REBATE AMOUNTS DUE TO

MISCLASSIFICATION OF COVERED OUTPATIENT DRUGS.— (1) IN GENERAL.—Section 1927(c) of the Social Security 

Act (42 U.S.C. 1396r–8(c)) is amended by adding at the end 

the following new paragraph: 

‘‘(4) RECOVERY OF UNPAID REBATE AMOUNTS DUE TO

MISCLASSIFICATION OF COVERED OUTPATIENT DRUGS.— 

‘‘(A) IN GENERAL.—If the Secretary determines that 

a manufacturer with an agreement under this section paid 

a lower per-unit rebate amount to a State for a rebate 

period as a result of the misclassification by the manufacturer of a covered outpatient drug (without regard to 
H. R. 1839—11 

whether the manufacturer knowingly made the 

misclassification or should have known that the 

misclassification would be made) than the per-unit rebate 

amount that the manufacturer would have paid to the 

State if the drug had been correctly classified, the manufacturer shall pay to the State an amount equal to the product 

of— 

‘‘(i) the difference between— 

‘‘(I) the per-unit rebate amount paid to the 

State for the period; and 

‘‘(II) the per-unit rebate amount that the 

manufacturer would have paid to the State for 

the period, as determined by the Secretary, if the 

drug had been correctly classified; and 

‘‘(ii) the total units of the drug paid for under 

the State plan in the period. 

‘‘(B) AUTHORITY TO CORRECT MISCLASSIFICATIONS.— 

‘‘(i) IN GENERAL.—If the Secretary determines that 

a manufacturer with an agreement under this section 

has misclassified a covered outpatient drug (without 

regard to whether the manufacturer knowingly made 

the misclassification or should have known that the 

misclassification would be made), the Secretary shall 

notify the manufacturer of the misclassification and 

require the manufacturer to correct the 

misclassification in a timely manner. 

‘‘(ii) ENFORCEMENT.—If, after receiving notice of 

a misclassification from the Secretary under clause 

(i), a manufacturer fails to correct the misclassification 

by such time as the Secretary shall require, until the 

manufacturer makes such correction, the Secretary 

may do any or all of the following: 

‘‘(I) Correct the misclassification, using drug 

product information provided by the manufacturer, 

on behalf of the manufacturer. 

‘‘(II) Suspend the misclassified drug and the 

drug’s status as a covered outpatient drug under 

the manufacturer’s national rebate agreement, and 

exclude the misclassified drug from Federal financial participation in accordance with section 

1903(i)(10)(E). 

‘‘(III) Impose a civil money penalty (which 

shall be in addition to any other recovery or penalty which may be available under this section 

or any other provision of law) for each rebate 

period during which the drug is misclassified not 

to exceed an amount equal to the product of— 

‘‘(aa) the total number of units of each 

dosage form and strength of such misclassified 

drug paid for under any State plan during 

such a rebate period; and 

‘‘(bb) 23.1 percent of the average manufacturer price for the dosage form and strength 

of such misclassified drug. 

‘‘(C) REPORTING AND TRANSPARENCY.— 

‘‘(i) IN GENERAL.—The Secretary shall submit a 

report to Congress on at least an annual basis that 
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includes information on the covered outpatient drugs 

that have been identified as misclassified, any steps 

taken to reclassify such drugs, the actions the Secretary has taken to ensure the payment of any rebate 

amounts which were unpaid as a result of such 

misclassification, and a disclosure of expenditures from 

the fund created in subsection (b)(3)(C)(iv), including 

an accounting of how such funds have been allocated 

and spent in accordance with such subsection. 

‘‘(ii) PUBLIC ACCESS.—The Secretary shall make 

the information contained in the report required under 

clause (i) available to the public on a timely basis. 

‘‘(D) OTHER PENALTIES AND ACTIONS.—Actions taken 

and penalties imposed under this clause shall be in addition 

to other remedies available to the Secretary including 

terminating the manufacturer’s rebate agreement for noncompliance with the terms of such agreement and shall 

not exempt a manufacturer from, or preclude the Secretary 

from pursuing, any civil money penalty under this title 

or title XI, or any other penalty or action as may be 

prescribed by law.’’. 

(2) OFFSET OF RECOVERED AMOUNTS AGAINST MEDICAL

ASSISTANCE.—Section 1927(b)(1)(B) of the Social Security Act 

(42 U.S.C. 1396r–8(b)(1)(B)) is amended by inserting ‘‘, 

including amounts received by a State under subsection (c)(4),’’ 

after ‘‘in any quarter’’. 

(c) CLARIFYING DEFINITIONS.—Section 1927(k) of the Social 

Security Act (42 U.S.C. 1396r–8(k)) is amended— 

(1) in paragraph (2)(A), by striking ‘‘paragraph (5)’’ and 

inserting ‘‘paragraph (4)’’; and 

(2) in paragraph (7)(A)— 

(A) by striking ‘‘an original new drug application’’ and 

inserting ‘‘a new drug application’’ each place it appears; 

(B) in clause (i), by striking ‘‘(not including any drug 

described in paragraph (5))’’ and inserting ‘‘, including a 

drug product approved for marketing as a non-prescription 

drug that is regarded as a covered outpatient drug under 

paragraph (4),’’; 

(C) in clause (ii)— 

(i) by striking ‘‘was originally marketed’’ and 

inserting ‘‘is marketed’’; and 

(ii) by inserting ‘‘, unless the Secretary determines 

that a narrow exception applies (as described in section 

447.502 of title 42, Code of Federal Regulations (or 

any successor regulation))’’ before the period; and 

(D) in clause (iv)— 

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

approved for marketing as a non-prescription drug that 

is regarded as a covered outpatient drug under paragraph (4),’’ after ‘‘covered outpatient drug’’; 

(ii) by inserting ‘‘unless the Secretary determines 

that a narrow exception applies (as described in section 

447.502 of title 42, Code of Federal Regulations (or 

any successor regulation))’’ after ‘‘under the new drug 

application’’; and 

(iii) by adding at the end the following new sentence: ‘‘Such term also includes a covered outpatient 
H. R. 1839—13 

drug that is a biological product licensed, produced, 

or distributed under a biologics license application 

approved by the Food and Drug Administration.’’. 

(d) EXCLUSION OF MANUFACTURERS FOR KNOWING

MISCLASSIFICATION OF COVERED OUTPATIENT DRUGS.—Section 

1128(b) of the Social Security Act (42 U.S.C. 1320a–7(b)) is amended 

by adding at the end the following new paragraph: 

‘‘(17) KNOWINGLY MISCLASSIFYING COVERED OUTPATIENT

DRUGS.—Any manufacturer or officer, director, agent, or managing employee of such manufacturer that knowingly 

misclassifies a covered outpatient drug under an agreement 

under section 1927, knowingly fails to correct such 

misclassification, or knowingly provides false information 

related to drug pricing, drug product information, or data 

related to drug pricing or drug product information.’’. 

(e) EFFECTIVE DATE.—The amendments made by this section 

shall take effect on the date of the enactment of this Act, and 

shall apply to covered outpatient drugs supplied by manufacturers 

under agreements under section 1927 of the Social Security Act 

(42 U.S.C. 1396r–8) on or after such date. 

SEC. 7. EXTENSION OF THIRD-PARTY LIABILITY PERIOD FOR CHILD 

SUPPORT SERVICES. 

(a) IN GENERAL.—Section 202(a)(2) of the Bipartisan Budget 

Act of 2013 (Public Law 113–67) is amended by striking ‘‘90 days’’ 

and inserting ‘‘100 days’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall take effect on the date of the enactment of this Act. 

SEC. 8. DENIAL OF FFP FOR CERTAIN EXPENDITURES RELATING TO 

VACUUM ERECTION SYSTEMS AND PENILE PROSTHETIC 

IMPLANTS. 

(a) IN GENERAL.—Section 1903(i) of the Social Security Act 

(42 U.S.C. 1396b(i)) is amended by inserting after paragraph (11) 

the following: 

‘‘(12) with respect to any amounts expended for— 

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

necessary; or 

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

of a penile prosthetic implant (unless such insertion, repair, 

or removal and replacement is medically necessary); or’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall apply with respect to items and services furnished on or 

after January 1, 2020. 

SEC. 9. DETERMINATION OF BUDGETARY EFFECTS. 

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

with the Statutory Pay-As-You-Go Act of 2010, shall be determined 

by reference to the latest statement titled ‘‘Budgetary Effects of 

PAYGO Legislation’’ for this Act, submitted for printing in the 
H. R. 1839—14 

Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior 

to the vote on passage. 

Speaker of the House of Representatives. 

Vice President of the United States and

President of the Senate.