110TH CONGRESS 

2D SESSION H. R. 5613 

AN ACT 

To extend certain moratoria and impose additional moratoria 

on certain Medicaid regulations through April 1, 2009, 

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, 
2 

•HR 5613 EH

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Protecting the Med3 icaid Safety Net Act of 2008’’. 

4 SEC. 2. MORATORIA ON CERTAIN MEDICAID REGULATIONS. 

5 (a) EXTENSION OF CERTAIN MORATORIA IN PUBLIC

6 LAW 110–28.—Section 7002(a)(1) of the U.S. Troop 

7 Readiness, Veterans’ Care, Katrina Recovery, and Iraq 

8 Accountability Appropriations Act, 2007 (Public Law 

9 110–28) is amended— 

10 (1) by striking ‘‘prior to the date that is 1 year 

11 after the date of enactment of this Act’’ and insert12 ing ‘‘prior to April 1, 2009’’; 

13 (2) in subparagraph (A), by inserting after 

14 ‘‘Federal Regulations)’’ the following: ‘‘or in the 

15 final regulation, relating to such parts, published on 

16 May 29, 2007 (72 Federal Register 29748)’’; and 

17 (3) in subparagraph (C), by inserting before the 

18 period at the end the following: ‘‘, including the pro19 posed regulation published on May 23, 2007 (72 

20 Federal Register 28930)’’. 

21 (b) EXTENSION OF CERTAIN MORATORIA IN PUBLIC

22 LAW 110–173.—Section 206 of the Medicare, Medicaid, 

23 and SCHIP Extension Act of 2007 (Public Law 110–173) 

24 is amended— 

25 (1) by striking ‘‘June 30, 2008’’ and inserting 

26 ‘‘April 1, 2009’’; 
3 

•HR 5613 EH

1 (2) by inserting ‘‘, including the proposed regu2 lation published on August 13, 2007 (72 Federal 

3 Register 45201),’’ after ‘‘rehabilitation services’’; 

4 and 

5 (3) by inserting ‘‘, including the final regulation 

6 published on December 28, 2007 (72 Federal Reg7 ister 73635),’’ after ‘‘school-based transportation’’. 

8 (c) ADDITIONAL MORATORIA.— 

9 (1) IN GENERAL.—Notwithstanding any other 

10 provision of law, the Secretary of Health and 

11 Human Services shall not, prior to April 1, 2009, 

12 take any action (through promulgation of regulation, 

13 issuance of regulatory guidance, use of Federal pay14 ment audit procedures, or other administrative ac15 tion, policy, or practice, including a Medical Assist16 ance Manual transmittal or letter to State Medicaid 

17 directors) to impose any restrictions relating to a 

18 provision described in subparagraph (A), (B), or (C) 

19 of paragraph (2) if such restrictions are more re20 strictive in any aspect than those applied to the re21 spective provision as of the date specified in para22 graph (3) for such provision. 

23 (2) PROVISIONS DESCRIBED.— 
4 

•HR 5613 EH

1 (A) PORTION OF INTERIM FINAL REGULA2 TION RELATING TO MEDICAID TREATMENT OF

3 OPTIONAL CASE MANAGEMENT SERVICES.— 

4 (i) IN GENERAL.—Subject to clause 

5 (ii), the provision described in this sub6 paragraph is the interim final regulation 

7 relating to optional State plan case man8 agement services under the Medicaid pro9 gram published on December 4, 2007 (72 

10 Federal Register 68077) in its entirety. 

11 (ii) EXCEPTION.—The provision de12 scribed in this subparagraph does not in13 clude the portion of such regulation as re14 lates directly to implementing section 

15 1915(g)(2)(A)(ii) of the Social Security 

16 Act, as amended by section 6052 of the 

17 Deficit Reduction Act of 2005 (Public Law 

18 109–171), through the definition of case 

19 management services and targeted case 

20 management services contained in pro21 posed section 440.169 of title 42, Code of 

22 Federal Regulations, but only to the extent 

23 that such portion is not more restrictive 

24 than the policies set forth in the Dear 

25 State Medicaid Director letter on case 
5 

•HR 5613 EH

1 management issued on January 19, 2001 

2 (SMDL #01–013), and with respect to 

3 community transition case management, 

4 the Dear State Medicaid Director letter 

5 issued on July 25, 2000 (Olmstead Update 

6 3). 

7 (B) PROPOSED REGULATION RELATING TO

8 REDEFINITION OF MEDICAID OUTPATIENT HOS9 PITAL SERVICES.—The provision described in 

10 this subparagraph is the proposed regulation re11 lating to clarification of outpatient clinic and 

12 hospital facility services definition and upper 

13 payment limit under the Medicaid program 

14 published on September 28, 2007 (72 Federal 

15 Register 55158) in its entirety. 

16 (C) PORTION OF PROPOSED REGULATION

17 RELATING TO MEDICAID ALLOWABLE PROVIDER

18 TAXES.— 

19 (i) IN GENERAL.—Subject to clause 

20 (ii), the provision described in this sub21 paragraph is the final regulation relating 

22 to health-care-related taxes under the Med23 icaid program published on February 22, 

24 2008 (73 Federal Register 9685) in its en25 tirety. 
6 

•HR 5613 EH

1 (ii) EXCEPTION.—The provision de2 scribed in this subparagraph does not in3 clude the portions of such regulation as re4 late to the following: 

5 (I) REDUCTION IN THRESH6 OLD.—The reduction from 6 percent 

7 to 5.5 percent in the threshold applied 

8 under section 433.68(f)(3)(i) of title 

9 42, Code of Federal Regulations, for 

10 determining whether or not there is 

11 an indirect guarantee to hold a tax12 payer harmless, as required to carry 

13 out section 1903(w)(4)(C)(ii) of the 

14 Social Security Act, as added by sec15 tion 403 of the Medicare Improvement 

16 and Extension Act of 2006 (division 

17 B of Public Law 109–432). 

18 (II) CHANGE IN DEFINITION OF

19 MANAGED CARE.—The change in the 

20 definition of managed care as pro21 posed in the revision of section 

22 433.56(a)(8) of title 42, Code of Fed23 eral Regulations, as required to carry 

24 out section 1903(w)(7)(A)(viii) of the 

25 Social Security Act, as amended by 
7 

•HR 5613 EH

1 section 6051 of the Deficit Reduction 

2 Act of 2005 (Public Law 109–171). 

3 (3) DATE SPECIFIED.—The date specified in 

4 this paragraph for the provision described in— 

5 (A) subparagraph (A) of paragraph (2) is 

6 December 3, 2007; 

7 (B) subparagraph (B) of such paragraph is 

8 September 27, 2007; or 

9 (C) subparagraph (C) of such paragraph is 

10 February 21, 2008. 

11 SEC. 3. FUNDS TO REDUCE MEDICAID FRAUD AND ABUSE. 

12 (a) IN GENERAL.—For purposes of reducing fraud 

13 and abuse in the Medicaid program under title XIX of 

14 the Social Security Act, there is appropriated to the Sec15 retary of Health and Human Services, out of any money 

16 in the Treasury not otherwise appropriated, $25,000,000, 

17 for each fiscal year (beginning with fiscal year 2009). 

18 Amounts appropriated under this section shall remain 

19 available for expenditure until expended and shall be in 

20 addition to any other amounts appropriated or made avail21 able to the Secretary for such purposes with respect to 

22 the Medicaid program. 

23 (b) ANNUAL REPORT.—Not later than September 30 

24 of 2009 and of each subsequent year, the Secretary of 

25 Health and Human Services shall submit to the Com-
8 

•HR 5613 EH

1 mittee on Energy and Commerce of the House of Rep2 resentatives and the Committee on Finance of the Senate 

3 a report on the activities (and the results of such activi4 ties) funded under subsection (a) to reduce waste, fraud, 

5 and abuse in the Medicaid program under title XIX of 

6 the Social Security Act during the previous 12 month pe7 riod, including the amount of funds appropriated under 

8 such subsection (a) for each such activity and an estimate 

9 of the savings to the Medicaid program resulting from 

10 each such activity. 

11 SEC. 4. STUDY AND REPORTS TO CONGRESS. 

12 (a) SECRETARIAL REPORT IDENTIFYING PROB13 LEMS.—Not later than July 1, 2008, the Secretary of 

14 Health and Human Services shall submit to the Com15 mittee on Energy and Commerce of the House of Rep16 resentatives and the Committee on Finance of the Senate 

17 a report that— 

18 (1) outlines the specific problems the Medicaid 

19 regulations referred to in the amendments made by 

20 subsections (a) and (b) of section 2 and in the provi21 sions described in subsection (c)(2) of such section 

22 were intended to address; 

23 (2) detailing how these regulations were de24 signed to address these specific problems; and 
9 

•HR 5613 EH

1 (3) cites the legal authority for such regula2 tions. 

3 (b) INDEPENDENT COMPREHENSIVE STUDY AND RE4 PORT.— 

5 (1) IN GENERAL.—Not later than July 1, 2008, 

6 the Secretary of Health and Human Services shall 

7 enter into a contract with an independent organiza8 tion for the purpose of— 

9 (A) producing a comprehensive report on 

10 the prevalence of the problems outlined in the 

11 report submitted under subsection (a); 

12 (B) identifying strategies in existence to 

13 address these problems; and 

14 (C) assessing the impact of each regulation 

15 referred to in such subsection on each State 

16 and the District of Columbia. 

17 (2) ADDITIONAL MATTER.—The report under 

18 paragraph (1) shall also include— 

19 (A) an identification of which claims for 

20 items and services (including administrative ac21 tivities) under title XIX of the Social Security 

22 Act are not processed through systems de23 scribed in section 1903(r) of such Act; 
10 

•HR 5613 EH

1 (B) an examination of the reasons why 

2 these claims for such items and services are not 

3 processed through such systems; and 

4 (C) recommendations on actions by the 

5 Federal government and the States that can 

6 make claims for such items and services more 

7 accurate and complete consistent with such 

8 title. 

9 (3) DEADLINE.—The report under paragraph 

10 (1) shall be submitted to the Committee on Energy 

11 and Commerce of the House of Representatives and 

12 the Committee on Finance of the Senate not later 

13 than March 1, 2009. 

14 (4) COOPERATION OF STATES.—If the Sec15 retary of Health and Human Services determines 

16 that a State or the District of Columbia has not co17 operated with the independent organization for pur18 poses of the report under this subsection, the Sec19 retary shall reduce the amount paid to the State or 

20 District under section 1903(a) of the Social Security 

21 Act (42 U.S.C. 1396b(a)) by $25,000 for each day 

22 on which the Secretary determines such State or 

23 District has not so cooperated. Such reduction shall 

24 be made through a process that permits the State or 

25 District to challenge the Secretary’s determination. 
11 

•HR 5613 EH

1 (c) FUNDING.— 

2 (1) IN GENERAL.—Out of any money in the 

3 Treasury of the United States not otherwise appro4 priated, there are appropriated to the Secretary 

5 without further appropriation, $5,000,000 to carry 

6 out this section. 

7 (2) AVAILABILITY; AMOUNTS IN ADDITION TO

8 OTHER AMOUNTS APPROPRIATED FOR SUCH ACTIVI9 TIES.—Amounts appropriated pursuant to para10 graph (1) shall— 

11 (A) remain available until expended; and 

12 (B) be in addition to any other amounts 

13 appropriated or made available to the Secretary 

14 of Health and Human Services with respect to 

15 the Medicaid program. 

16 SEC. 5. ASSET VERIFICATION THROUGH ACCESS TO INFOR17 MATION HELD BY FINANCIAL INSTITUTIONS. 

18 (a) ADDITION OF AUTHORITY.—Title XIX of the So19 cial Security Act is amended by inserting after section 

20 1939 the following new section: 

21 ‘‘ASSET VERIFICATION THROUGH ACCESS TO

22 INFORMATION HELD BY FINANCIAL INSTITUTIONS

23 ‘‘SEC. 1940. (a) IMPLEMENTATION.— 

24 ‘‘(1) IN GENERAL.—Subject to the provisions of 

25 this section, each State shall implement an asset 

26 verification program described in subsection (b), for 
12 

•HR 5613 EH

1 purposes of determining or redetermining the eligi2 bility of an individual for medical assistance under 

3 the State plan under this title. 

4 ‘‘(2) PLAN SUBMITTAL.—In order to meet the 

5 requirement of paragraph (1), each State shall— 

6 ‘‘(A) submit not later than a deadline spec7 ified by the Secretary consistent with paragraph 

8 (3), a State plan amendment under this title 

9 that describes how the State intends to imple10 ment the asset verification program; and 

11 ‘‘(B) provide for implementation of such 

12 program for eligibility determinations and rede13 terminations made on or after 6 months after 

14 the deadline established for submittal of such 

15 plan amendment. 

16 ‘‘(3) PHASE-IN.— 

17 ‘‘(A) IN GENERAL.— 

18 ‘‘(i) IMPLEMENTATION IN CURRENT

19 ASSET VERIFICATION DEMO STATES.—The 

20 Secretary shall require those States speci21 fied in subparagraph (C) (to which an 

22 asset verification program has been applied 

23 before the date of the enactment of this 

24 section) to implement an asset verification 
13 

•HR 5613 EH

1 program under this subsection by the end 

2 of fiscal year 2009. 

3 ‘‘(ii) IMPLEMENTATION IN OTHER

4 STATES.—The Secretary shall require 

5 other States to submit and implement an 

6 asset verification program under this sub7 section in such manner as is designed to 

8 result in the application of such programs, 

9 in the aggregate for all such other States, 

10 to enrollment of approximately, but not 

11 less than, the following percentage of en12 rollees, in the aggregate for all such other 

13 States, by the end of the fiscal year in14 volved: 

15 ‘‘(I) 12.5 percent by the end of 

16 fiscal year 2009. 

17 ‘‘(II) 25 percent by the end of 

18 fiscal year 2010. 

19 ‘‘(III) 50 percent by the end of 

20 fiscal year 2011. 

21 ‘‘(IV) 75 percent by the end of 

22 fiscal year 2012. 

23 ‘‘(V) 100 percent by the end of 

24 fiscal year 2013. 
14 

•HR 5613 EH

1 ‘‘(B) CONSIDERATION.—In selecting States 

2 under subparagraph (A)(ii), the Secretary shall 

3 consult with the States involved and take into 

4 account the feasibility of implementing asset 

5 verification programs in each such State. 

6 ‘‘(C) STATES SPECIFIED.—The States 

7 specified in this subparagraph are California, 

8 New York, and New Jersey. 

9 ‘‘(D) CONSTRUCTION.—Nothing in sub10 paragraph (A)(ii) shall be construed as pre11 venting a State from requesting, and the Sec12 retary approving, the implementation of an 

13 asset verification program in advance of the 

14 deadline otherwise established under such sub15 paragraph. 

16 ‘‘(4) EXEMPTION OF TERRITORIES.—This sec17 tion shall only apply to the 50 States and the Dis18 trict of Columbia. 

19 ‘‘(b) ASSET VERIFICATION PROGRAM.— 

20 ‘‘(1) IN GENERAL.—For purposes of this sec21 tion, an asset verification program means a program 

22 described in paragraph (2) under which a State— 

23 ‘‘(A) requires each applicant for, or recipi24 ent of, medical assistance under the State plan 

25 under this title on the basis of being aged, 
15 

•HR 5613 EH

1 blind, or disabled to provide authorization by 

2 such applicant or recipient (and any other per3 son whose resources are material to the deter4 mination of the eligibility of the applicant or re5 cipient for such assistance) for the State to ob6 tain (subject to the cost reimbursement require7 ments of section 1115(a) of the Right to Finan8 cial Privacy Act but at no cost to the applicant 

9 or recipient) from any financial institution 

10 (within the meaning of section 1101(1) of such 

11 Act) any financial record (within the meaning 

12 of section 1101(2) of such Act) held by the in13 stitution with respect to the applicant or recipi14 ent (and such other person, as applicable), 

15 whenever the State determines the record is 

16 needed in connection with a determination with 

17 respect to such eligibility for (or the amount or 

18 extent of) such medical assistance; and 

19 ‘‘(B) uses the authorization provided under 

20 subparagraph (A) to verify the financial re21 sources of such applicant or recipient (and such 

22 other person, as applicable), in order to deter23 mine or redetermine the eligibility of such appli24 cant or recipient for medical assistance under 

25 the State plan. 
16 

•HR 5613 EH

1 ‘‘(2) PROGRAM DESCRIBED.—A program de2 scribed in this paragraph is a program for verifying 

3 individual assets in a manner consistent with the ap4 proach used by the Commissioner of Social Security 

5 under section 1631(e)(1)(B)(ii). 

6 ‘‘(c) DURATION OF AUTHORIZATION.—Notwith7 standing section 1104(a)(1) of the Right to Financial Pri8 vacy Act, an authorization provided to a State under sub9 section (b)(1) shall remain effective until the earliest of— 

10 ‘‘(1) the rendering of a final adverse decision on 

11 the applicant’s application for medical assistance 

12 under the State’s plan under this title; 

13 ‘‘(2) the cessation of the recipient’s eligibility 

14 for such medical assistance; or 

15 ‘‘(3) the express revocation by the applicant or 

16 recipient (or such other person described in sub17 section (b)(1), as applicable) of the authorization, in 

18 a written notification to the State. 

19 ‘‘(d) TREATMENT OF RIGHT TO FINANCIAL PRIVACY

20 ACT REQUIREMENTS.— 

21 ‘‘(1) An authorization obtained by the State 

22 under subsection (b)(1) shall be considered to meet 

23 the requirements of the Right to Financial Privacy 

24 Act for purposes of section 1103(a) of such Act, and 
17 

•HR 5613 EH

1 need not be furnished to the financial institution, 

2 notwithstanding section 1104(a) of such Act. 

3 ‘‘(2) The certification requirements of section 

4 1103(b) of the Right to Financial Privacy Act shall 

5 not apply to requests by the State pursuant to an 

6 authorization provided under subsection (b)(1). 

7 ‘‘(3) A request by the State pursuant to an au8 thorization provided under subsection (b)(1) is 

9 deemed to meet the requirements of section 

10 1104(a)(3) of the Right to Financial Privacy Act 

11 and of section 1102 of such Act, relating to a rea12 sonable description of financial records. 

13 ‘‘(e) REQUIRED DISCLOSURE.—The State shall in14 form any person who provides authorization pursuant to 

15 subsection (b)(1)(A) of the duration and scope of the au16 thorization. 

17 ‘‘(f) REFUSAL OR REVOCATION OF AUTHORIZA18 TION.—If an applicant for, or recipient of, medical assist19 ance under the State plan under this title (or such other 

20 person described in subsection (b)(1), as applicable) re21 fuses to provide, or revokes, any authorization made by 

22 the applicant or recipient (or such other person, as appli23 cable) under subsection (b)(1)(A) for the State to obtain 

24 from any financial institution any financial record, the 
18 

•HR 5613 EH

1 State may, on that basis, determine that the applicant or 

2 recipient is ineligible for medical assistance. 

3 ‘‘(g) USE OF CONTRACTOR.—For purposes of imple4 menting an asset verification program under this section, 

5 a State may select and enter into a contract with a public 

6 or private entity meeting such criteria and qualifications 

7 as the State determines appropriate, consistent with re8 quirements in regulations relating to general contracting 

9 provisions and with section 1903(i)(2). In carrying out ac10 tivities under such contract, such an entity shall be subject 

11 to the same requirements and limitations on use and dis12 closure of information as would apply if the State were 

13 to carry out such activities directly. 

14 ‘‘(h) TECHNICAL ASSISTANCE.—The Secretary shall 

15 provide States with technical assistance to aid in imple16 mentation of an asset verification program under this sec17 tion. 

18 ‘‘(i) REPORTS.—A State implementing an asset 

19 verification program under this section shall furnish to the 

20 Secretary such reports concerning the program, at such 

21 times, in such format, and containing such information 

22 as the Secretary determines appropriate. 

23 ‘‘(j) TREATMENT OF PROGRAM EXPENSES.—Not24 withstanding any other provision of law, reasonable ex25 penses of States in carrying out the program under this 
19 

•HR 5613 EH

1 section shall be treated, for purposes of section 1903(a), 

2 in the same manner as State expenditures specified in 

3 paragraph (7) of such section.’’. 

4 (b) STATE PLAN REQUIREMENTS.—Section 1902(a) 

5 of such Act (42 U.S.C. 1396a(a)) is amended— 

6 (1) in paragraph (69) by striking ‘‘and’’ at the 

7 end; 

8 (2) in paragraph (70) by striking the period at 

9 the end and inserting ‘‘; and’’; and 

10 (3) by inserting after paragraph (70), as so 

11 amended, the following new paragraph: 

12 ‘‘(71) provide that the State will implement an 

13 asset verification program as required under section 

14 1940.’’. 

15 (c) WITHHOLDING OF FEDERAL MATCHING PAY16 MENTS FOR NONCOMPLIANT STATES.—Section 1903(i) of 

17 such Act (42 U.S.C. 1396b(i)) is amended— 

18 (1) in paragraph (22) by striking ‘‘or’’ at the 

19 end; 

20 (2) in paragraph (23) by striking the period at 

21 the end and inserting ‘‘; or’’; and 

22 (3) by adding after paragraph (23) the fol23 lowing new paragraph: 

24 ‘‘(24) if a State is required to implement an 

25 asset verification program under section 1940 and 
20 

•HR 5613 EH

1 fails to implement such program in accordance with 

2 such section, with respect to amounts expended by 

3 such State for medical assistance for individuals 

4 subject to asset verification under such section, un5 less— 

6 ‘‘(A) the State demonstrates to the Sec7 retary’s satisfaction that the State made a good 

8 faith effort to comply; 

9 ‘‘(B) not later than 60 days after the date 

10 of a finding that the State is in noncompliance, 

11 the State submits to the Secretary (and the 

12 Secretary approves) a corrective action plan to 

13 remedy such noncompliance; and 

14 ‘‘(C) not later than 12 months after the 

15 date of such submission (and approval), the 

16 State fulfills the terms of such corrective action 

17 plan.’’. 

18 (d) REPEAL.—Section 4 of Public Law 110–90 is re19 pealed. 

20 SEC. 6. ADJUSTMENT TO PAQI FUND. 

21 Section 1848(l)(2) of the Social Security Act (42 

22 U.S.C. 1395w-4(l)(2)), as amended by section 101(a)(2) 

23 of the Medicare, Medicaid, and SCHIP Extension Act of 

24 2007 (Public Law 110-173), is amended— 

25 (1) in subparagraph (A)(i)— 
21 

•HR 5613 EH

1 (A) in subclause (III), by striking 

2 ‘‘$4,960,000,000’’ and inserting 

3 ‘‘$3,790,000,000’’; and 

4 (B) by adding at the end the following new 

5 subclause: 

6 ‘‘(IV) For expenditures during 

7 2014, an amount equal to 

8 $3,690,000,000.’’; 

9 (2) in subparagraph (A)(ii), by adding at the 

10 end the following new subclause: 

11 ‘‘(IV) 2014.—The amount avail12 able for expenditures during 2014 

13 shall only be available for an adjust14 ment to the update of the conversion 

15 factor under subsection (d) for that 

16 year.’’; and 

17 (3) in subparagraph (B)— 

18 (A) in clause (ii), by striking ‘‘and’’ at the 

19 end; 

20 (B) in clause (iii), by striking the period at 

21 the end and inserting ‘‘; and’’; and 

22 (C) by adding at the end the following new 

23 clause: 
22 

•HR 5613 EH

1 ‘‘(iv) 2014 for payment with respect 

2 to physicians’ services furnished during 

3 2014.’’. 

Passed the House of Representatives April 23, 2008. 

Attest: 

Clerk. 

110TH CONGRESS 

2D SESSION H. R. 5613 

AN ACT 

To extend certain moratoria and impose additional 

through April 1, 2009, and for other purposes. moratoria on certain Medicaid regulations