```

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1839 Enrolled Bill (ENR)]

        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 
    community-based 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)) 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, community-based 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 
    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 per-member 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.--
        ``(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, 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.
                ``(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
                    ``(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 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'';
            (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 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 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 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 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 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.
```