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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1893 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 288
110th CONGRESS
  1st Session
                                S. 1893

To amend title XXI of the Social Security Act to reauthorize the State 
      Children's Health Insurance Program, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                July 27 (legislative day, July 26), 2007

   Mr. Baucus, from the Committee on Finance, reported the following 
     original bill; which was read twice and placed on the calendar

_______________________________________________________________________

                                 A BILL

 
To amend title XXI of the Social Security Act to reauthorize the State 
      Children's Health Insurance 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; AMENDMENTS TO SOCIAL SECURITY ACT; REFERENCES; 
              TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Children's Health 
Insurance Program Reauthorization Act of 2007''.
    (b) Amendments to Social Security Act.--Except as otherwise 
specifically provided, whenever in this Act an amendment is expressed 
in terms of an amendment to or repeal of a section or other provision, 
the reference shall be considered to be made to that section or other 
provision of the Social Security Act.
    (c) References to Medicaid; CHIP; Secretary.--In this Act:
            (1) CHIP.--The term ``CHIP'' means the State Children's 
        Health Insurance Program established under title XXI of the 
        Social Security Act (42 U.S.C. 1397aa et seq.).
            (2) Medicaid.--The term ``Medicaid'' means the program for 
        medical assistance established under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.).
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
    (d) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; amendments to Social Security Act; references; 
                            table of contents.
                       TITLE I--FINANCING OF CHIP

Sec. 101. Extension of CHIP.
Sec. 102. Allotments for the 50 States and the District of Columbia.
Sec. 103. One-time appropriation.
Sec. 104. Improving funding for the territories under CHIP and 
                            Medicaid.
Sec. 105. Incentive bonuses for States.
Sec. 106. Phase-out of coverage for nonpregnant childless adults under 
                            CHIP; conditions for coverage of parents.
Sec. 107. State option to cover low-income pregnant women under CHIP 
                            through a State plan amendment.
Sec. 108. CHIP Contingency fund.
Sec. 109. Two-year availability of allotments; expenditures counted 
                            against oldest allotments.
Sec. 110. Limitation on matching rate for States that propose to cover 
                            children with effective family income that 
                            exceeds 300 percent of the poverty line.
Sec. 111. Option for qualifying States to receive the enhanced portion 
                            of the CHIP matching rate for Medicaid 
                            coverage of certain children.
                   TITLE II--OUTREACH AND ENROLLMENT

Sec. 201. Grants for outreach and enrollment.
Sec. 202. Increased outreach and enrollment of Indians.
Sec. 203. Demonstration project to permit States to rely on findings by 
                            an Express Lane agency to determine 
                            components of a child's eligibility for 
                            Medicaid or CHIP.
Sec. 204. Authorization of certain information disclosures to simplify 
                            health coverage determinations.
               TITLE III--REDUCING BARRIERS TO ENROLLMENT

Sec. 301. Verification of declaration of citizenship or nationality for 
                            purposes of eligibility for Medicaid and 
                            CHIP.
Sec. 302. Reducing administrative barriers to enrollment.
      TITLE IV--REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE

  Subtitle A--Additional State Option for Providing Premium Assistance

Sec. 401. Additional State option for providing premium assistance.
Sec. 402. Outreach, education, and enrollment assistance.
   Subtitle B--Coordinating Premium Assistance With Private Coverage

Sec. 411. Special enrollment period under group health plans in case of 
                            termination of Medicaid or CHIP coverage or 
                            eligibility for assistance in purchase of 
                            employment-based coverage; coordination of 
                            coverage.
 TITLE V--STRENGTHENING QUALITY OF CARE AND HEALTH OUTCOMES OF CHILDREN

Sec. 501. Child health quality improvement activities for children 
                            enrolled in Medicaid or CHIP.
Sec. 502. Improved information regarding access to coverage under CHIP.
Sec. 503. Application of certain managed care quality safeguards to 
                            CHIP.
                        TITLE VI--MISCELLANEOUS

Sec. 601. Technical correction regarding current State authority under 
                            Medicaid.
Sec. 602. Payment error rate measurement (``PERM'').
Sec. 603. Elimination of counting medicaid child presumptive 
                            eligibility costs against title XXI 
                            allotment.
Sec. 604. Improving data collection.
Sec. 605. Deficit Reduction Act technical corrections.
Sec. 606. Elimination of confusing program references.
Sec. 607. Mental health parity in CHIP plans.
Sec. 608. Dental health grants.
Sec. 609. Application of prospective payment system for services 
                            provided by Federally-qualified health 
                            centers and rural health clinics.
                     TITLE VII--REVENUE PROVISIONS

Sec. 701. Increase in excise tax rate on tobacco products.
Sec. 702. Administrative improvements.
Sec. 703. Time for payment of corporate estimated taxes.
                       TITLE VIII--EFFECTIVE DATE

Sec. 801. Effective date.

                       TITLE I--FINANCING OF CHIP

SEC. 101. EXTENSION OF CHIP.

    Section 2104(a) (42 U.S.C. 1397dd(a)) is amended--
            (1) in paragraph (9), by striking ``and'' at the end;
            (2) in paragraph (10), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding at the end the following new paragraphs:
            ``(11) for fiscal year 2008, $9,125,000,000;
            ``(12) for fiscal year 2009, $10,675,000,000;
            ``(13) for fiscal year 2010, $11,850,000,000;
            ``(14) for fiscal year 2011, $13,750,000,000; and
            ``(15) for fiscal year 2012, for purposes of making 2 semi-
        annual allotments--
                    ``(A) $1,750,000,000 for the period beginning on 
                October 1, 2011, and ending on March 31, 2012, and
                    ``(B) $1,750,000,000 for the period beginning on 
                April 1, 2012, and ending on September 30, 2012.''.

SEC. 102. ALLOTMENTS FOR THE 50 STATES AND THE DISTRICT OF COLUMBIA.

    (a) In General.--Section 2104 (42 U.S.C. 1397dd) is amended by 
adding at the end the following new subsection:
    ``(i) Determination of Allotments for the 50 States and the 
District of Columbia for Fiscal Years 2008 Through 2012.--
            ``(1) Computation of allotment.--
                    ``(A) In general.--Subject to the succeeding 
                paragraphs of this subsection, the Secretary shall for 
                each of fiscal years 2008 through 2012 allot to each 
                subsection (b) State from the available national 
                allotment an amount equal to 110 percent of--
                            ``(i) in the case of fiscal year 2008, the 
                        highest of the amounts determined under 
                        paragraph (2);
                            ``(ii) in the case of each of fiscal years 
                        2009 through 2011, the Federal share of the 
                        expenditures determined under subparagraph (B) 
                        for the fiscal year; and
                            ``(iii) beginning with fiscal year 2012, 
                        subject to subparagraph (E), each semi-annual 
                        allotment determined under subparagraph (D).
                    ``(B) Projected state expenditures for the fiscal 
                year.--For purposes of subparagraphs (A)(ii) and (D), 
                the expenditures determined under this subparagraph for 
                a fiscal year are the projected expenditures under the 
                State child health plan for the fiscal year (as 
                certified by the State and submitted to the Secretary 
                by not later than August 31 of the preceding fiscal 
                year).
                    ``(C) Available national allotment.--For purposes 
                of this subsection, the term `available national 
                allotment' means, with respect to any fiscal year, the 
                amount available for allotment under subsection (a) for 
                the fiscal year, reduced by the amount of the 
                allotments made for the fiscal year under subsection 
                (c). Subject to paragraph (3)(B), the available 
                national allotment with respect to the amount available 
                under subsection (a)(15)(A) for fiscal year 2012 shall 
                be increased by the amount of the appropriation for the 
                period beginning on October 1 and ending on March 31 of 
                such fiscal year under section 103 of the Children's 
                Health Insurance Program Reauthorization Act of 2007.
                    ``(D) Semi-annual allotments.--For purposes of 
                subparagraph (A)(iii), the semi-annual allotments 
                determined under this paragraph with respect to a 
                fiscal year are as follows:
                            ``(i) For the period beginning on October 1 
                        and ending on March 31 of the fiscal year, the 
                        Federal share of the portion of the 
                        expenditures determined under subparagraph (B) 
                        for the fiscal year which are allocable to such 
                        period.
                            ``(ii) For the period beginning on April 1 
                        and ending on September 30 of the fiscal year, 
                        the Federal share of the portion of the 
                        expenditures determined under subparagraph (B) 
                        for the fiscal year which are allocable to such 
                        period.
                    ``(E) Availability.--Each semi-annual allotment 
                made under subparagraph (A)(iii) shall remain available 
                for expenditure under this title for periods after the 
                period specified in subparagraph (D) for purposes of 
                determining the allotment in the same manner as the 
                allotment would have been available for expenditure if 
                made for an entire fiscal year.
            ``(2) Special rule for fiscal year 2008.--
                    ``(A) In general.--For purposes of paragraph 
                (1)(A)(i), the amounts determined under this paragraph 
                for fiscal year 2008 are as follows:
                            ``(i) The total Federal payments to the 
                        State under this title for fiscal year 2007, 
                        multiplied by the annual adjustment determined 
                        under subparagraph (B) for fiscal year 2008.
                            ``(ii) The Federal share of the amount 
                        allotted to the State for fiscal year 2007 
                        under subsection (b), multiplied by the annual 
                        adjustment determined under subparagraph (B) 
                        for fiscal year 2008.
                            ``(iii) Only in the case of--
                                    ``(I) a State that received a 
                                payment, redistribution, or allotment 
                                under any of paragraphs (1), (2), or 
                                (4) of subsection (h), the amount of 
                                the projected total Federal payments to 
                                the State under this title for fiscal 
                                year 2007, as determined on the basis 
                                of the November 2006 estimates 
                                certified by the State to the 
                                Secretary;
                                    ``(II) a State whose projected 
                                total Federal payments to the State 
                                under this title for fiscal year 2007, 
                                as determined on the basis of the May 
                                2006 estimates certified by the State 
                                to the Secretary, were at least 
                                $95,000,000 but not more than 
                                $96,000,000 higher than the projected 
                                total Federal payments to the State 
                                under this title for fiscal year 2007 
                                on the basis of the November 2006 
                                estimates, the amount of the projected 
                                total Federal payments to the State 
                                under this title for fiscal year 2007 
                                on the basis of the May 2006 estimates; 
                                or
                                    ``(III) a State whose projected 
                                total Federal payments under this title 
                                for fiscal year 2007, as determined on 
                                the basis of the November 2006 
                                estimates certified by the State to the 
                                Secretary, exceeded all amounts 
                                available to the State for expenditure 
                                for fiscal year 2007 (including any 
                                amounts paid, allotted, or 
                                redistributed to the State in prior 
                                fiscal years), the amount of the 
                                projected total Federal payments to the 
                                State under this title for fiscal year 
                                2007, as determined on the basis of the 
                                November 2006 estimates certified by 
                                the State to the Secretary,
                        multiplied by the annual adjustment determined 
                        under subparagraph (B) for fiscal year 2008.
                            ``(iv) The projected total Federal payments 
                        to the State under this title for fiscal year 
                        2008, as determined on the basis of the August 
                        2007 projections certified by the State to the 
                        Secretary by not later than September 30, 2007.
                    ``(B) Annual adjustment for health care cost growth 
                and child population growth.--The annual adjustment 
                determined under this subparagraph for a fiscal year 
                with respect to a State is equal to the product of the 
                amounts determined under clauses (i) and (ii):
                            ``(i) Per capita health care growth.--1 
                        plus the percentage increase (if any) in the 
                        projected nominal per capita amount of National 
                        Health Expenditures for the calendar year that 
                        begins during the fiscal year involved over the 
                        preceding calendar year, as most recently 
                        published by the Secretary.
                            ``(ii) Child population growth.--1.01 plus 
                        the percentage change in the population of 
                        children under 19 years of age in the State 
                        from July 1 of the fiscal year preceding the 
                        fiscal year involved to July 1 of the fiscal 
                        year involved, as determined by the Secretary 
                        based on the most timely and accurate published 
                        estimates of the Bureau of the Census.
                    ``(C) Definition.--For purposes of subparagraph 
                (B), the term `fiscal year involved' means the fiscal 
                year for which an allotment under this subsection is 
                being determined.
                    ``(D) Proration rule.--If, after the application of 
                this paragraph without regard to this subparagraph, the 
                sum of the State allotments determined under this 
                paragraph for fiscal year 2008 exceeds the available 
                national allotment for fiscal year 2008, the Secretary 
                shall reduce each such allotment on a proportional 
                basis.
            ``(3) Alternative allotments for fiscal years 2009 through 
        2012.--
                    ``(A) In general.--If the sum of the State 
                allotments determined under paragraph (1)(A)(ii) for 
                any of fiscal years 2009 through 2011 exceeds the 
                available national allotment for the fiscal year, the 
                Secretary shall allot to each subsection (b) State from 
                the available national allotment for the fiscal year an 
                amount equal to the product of--
                            ``(i) the available national allotment for 
                        the fiscal year; and
                            ``(ii) the percentage equal to the sum of 
                        the State allotment factors for the fiscal year 
                        determined under paragraph (4) with respect to 
                        the State.
                    ``(B) Special rules beginning in fiscal year 
                2012.--Beginning in fiscal year 2012--
                            ``(i) this paragraph shall be applied 
                        separately with respect to each of the periods 
                        described in clauses (i) and (ii) of paragraph 
                        (1)(D) and the available national allotment for 
                        each such period shall be the amount 
                        appropriated for such period (rather than the 
                        amount appropriated for the entire fiscal 
                        year), reduced by the amount of the allotments 
                        made for the fiscal year under subsection (c) 
                        for each such period, and
                            ``(ii) if--
                                    ``(I) the sum of the State 
                                allotments determined under paragraph 
                                (1)(A)(iii) for either such period 
                                exceeds the amount of such available 
                                national allotment for such period, the 
                                Secretary shall make the allotment for 
                                each State for such period in the same 
                                manner as under subparagraph (A), and
                                    ``(II) the amount of such available 
                                national allotment for either such 
                                period exceeds the sum of the State 
                                allotments determined under paragraph 
                                (1)(A)(iii) for such period, the 
                                Secretary shall increase the allotment 
                                for each State for such period by the 
                                amount that bears the same ratio to 
                                such excess as the State's allotment 
                                determined under paragraph (1)(A)(iii) 
                                for such period (without regard to this 
                                subparagraph) bears to the sum of such 
                                allotments for all States.
            ``(4) Weighted factors.--
                    ``(A) Factors described.--For purposes of paragraph 
                (3), the factors described in this subparagraph are the 
                following:
                            ``(i) Projected state expenditures for the 
                        fiscal year.--The ratio of the projected 
                        expenditures under the State child health plan 
                        for the fiscal year (as certified by the State 
                        to the Secretary by not later than August 31 of 
                        the preceding fiscal year) to the sum of the 
                        projected expenditures under all such plans for 
                        all subsection (b) States for the fiscal year, 
                        multiplied by the applicable percentage weight 
                        assigned under subparagraph (B).
                            ``(ii) Number of low-income children in the 
                        state.--The ratio of the number of low-income 
                        children in the State, as determined on the 
                        basis of the most timely and accurate published 
                        estimates of the Bureau of the Census, to the 
                        sum of the number of low-income children so 
                        determined for all subsection (b) States for 
                        such fiscal year, multiplied by the applicable 
                        percentage weight assigned under subparagraph 
                        (B).
                            ``(iii) Projected state expenditures for 
                        the preceding fiscal year.--The ratio of the 
                        projected expenditures under the State child 
                        health plan for the preceding fiscal year (as 
                        determined on the basis of the projections 
                        certified by the State to the Secretary for 
                        November of the fiscal year), to the sum of the 
                        projected expenditures under all such plans for 
                        all subsection (b) States for such preceding 
                        fiscal year (as so determined), multiplied by 
                        the applicable percentage weight assigned under 
                        subparagraph (B).
                            ``(iv) Actual state expenditures for the 
                        second preceding fiscal year.--The ratio of the 
                        actual expenditures under the State child 
                        health plan for the second preceding fiscal 
                        year, as determined by the Secretary on the 
                        basis of expenditure data reported by States on 
                        CMS Form 64 or CMS Form 21, to such sum of the 
                        actual expenditures under all such plans for 
                        all subsection (b) States for such second 
                        preceding fiscal year, multiplied by the 
                        applicable percentage weight assigned under 
                        subparagraph (B).
                    ``(B) Assignment of weights.--For each of fiscal 
                years 2009 through 2012, the applicable weights 
                assigned under this subparagraph are the following:
                            ``(i) With respect to the factor described 
                        in subparagraph (A)(i), a weight of 75 percent 
                        for each such fiscal year.
                            ``(ii) With respect to the factor described 
                        in subparagraph (A)(ii), a weight of 12\1/2\ 
                        percent for each such fiscal year.
                            ``(iii) With respect to the factor 
                        described in subparagraph (A)(iii), a weight of 
                        7\1/2\ percent for each such fiscal year.
                            ``(iv) With respect to the factor described 
                        in subparagraph (A)(iv), a weight of 5 percent 
                        for each such fiscal year.
            ``(5) Demonstration of need for increased allotment based 
        on projected state expenditures exceeding 10 percent of the 
        preceding fiscal year allotment.--
                    ``(A) In general.--If the projected expenditures 
                under the State child health plan described in 
                paragraph (1)(B) for any of fiscal years 2009 through 
                2012 are at least 10 percent more than the allotment 
                determined for the State for the preceding fiscal year 
                (determined without regard to paragraph (2)(D) or 
                paragraph (3)), and, during the preceding fiscal year, 
                the State did not receive approval for a State plan 
                amendment or waiver to expand coverage under the State 
                child health plan or did not receive a CHIP contingency 
                fund payment under subsection (k)--
                            ``(i) the State shall submit to the 
                        Secretary, by not later than August 31 of the 
                        preceding fiscal year, information relating to 
                        the factors that contributed to the need for 
                        the increase in the State's allotment for the 
                        fiscal year, as well as any other additional 
                        information that the Secretary may require for 
                        the State to demonstrate the need for the 
                        increase in the State's allotment for the 
                        fiscal year;
                            ``(ii) the Secretary shall--
                                    ``(I) review the information 
                                submitted under clause (i);
                                    ``(II) notify the State in writing 
                                within 60 days after receipt of the 
                                information that--
                                            ``(aa) the projected 
                                        expenditures under the State 
                                        child health plan are approved 
                                        or disapproved (and if 
                                        disapproved, the reasons for 
                                        disapproval); or
                                            ``(bb) specified additional 
                                        information is needed; and
                                    ``(III) if the Secretary 
                                disapproved the projected expenditures 
                                or determined additional information is 
                                needed, provide the State with a 
                                reasonable opportunity to submit 
                                additional information to demonstrate 
                                the need for the increase in the 
                                State's allotment for the fiscal year.
                    ``(B) Provisional and final allotment.--In the case 
                of a State described in subparagraph (A) for which the 
                Secretary has not determined by September 30 of a 
                fiscal year whether the State has demonstrated the need 
                for the increase in the State's allotment for the 
                succeeding fiscal year, the Secretary shall provide the 
                State with a provisional allotment for the fiscal year 
                equal to 110 percent of the allotment determined for 
                the State under this subsection for the preceding 
                fiscal year (determined without regard to paragraph 
                (2)(D) or paragraph (3)), and may, not later than 
                November 30 of the fiscal year, adjust the State's 
                allotment (and the allotments of other subsection (b) 
                States), as necessary (and, if applicable, subject to 
                paragraph (3)), on the basis of information submitted 
                by the State in accordance with subparagraph (A).
            ``(6) Special rules.--
                    ``(A) Deadline and data for determining fiscal year 
                2008 allotments.--In computing the amounts under 
                paragraph (2)(A) and subsection (c)(5)(A) that 
                determine the allotments to subsection (b) States and 
                territories for fiscal year 2008, the Secretary shall 
                use the most recent data available to the Secretary 
                before the start of that fiscal year. The Secretary may 
                adjust such amounts and allotments, as necessary, on 
                the basis of the expenditure data for the prior year 
                reported by States on CMS Form 64 or CMS Form 21 not 
                later than November 30, 2007, but in no case shall the 
                Secretary adjust the allotments provided under 
                paragraph (2)(A) or subsection (c)(5)(A) for fiscal 
                year 2008 after December 31, 2007.
                    ``(B) Inclusion of certain expenditures.--
                            ``(i) Projected expenditures of qualifying 
                        states.--Payments made or projected to be made 
                        to a qualifying State described in paragraph 
                        (2) of section 2105(g) for expenditures 
                        described in paragraph (1)(B)(ii) or (4)(B) of 
                        that section shall be included for purposes of 
                        determining the projected expenditures 
                        described in paragraph (1)(B) with respect to 
                        the allotments determined for each of fiscal 
                        years 2009 through 2012 and for purposes of 
                        determining the amounts described in clauses 
                        (i) and (iv) of paragraph (2)(A) with respect 
                        to the allotments determined for fiscal year 
                        2008.
                            ``(ii) Projected expenditures under block 
                        grant set-asides for nonpregnant childless 
                        adults and parents.--Payments projected to be 
                        made to a State under subsection (a) or (b) of 
                        section 2111 shall be included for purposes of 
                        determining the projected expenditures 
                        described in paragraph (1)(B) with respect to 
                        the allotments determined for each of fiscal 
                        years 2009 through 2012 (to the extent such 
                        payments are permitted under such section), 
                        including for purposes of allocating such 
                        expenditures for purposes of clauses (i) and 
                        (ii) of paragraph (1)(D).
            ``(7) Subsection (b) state.--In this paragraph, the term 
        `subsection (b) State' means 1 of the 50 States or the District 
        of Columbia.''.
    (b) Conforming Amendments.--Section 2104 (42 U.S.C. 1397dd) is 
amended--
            (1) in subsection (a), by striking ``subsection (d)'' and 
        inserting ``subsections (d), (h), and (i)'';
            (2) in subsection (b)(1), by striking ``subsection (d)'' 
        and inserting ``subsections (d), (h), and (i)''; and
            (3) in subsection (c)(1), by striking ``subsection (d)'' 
        and inserting ``subsections (d), (h), and (i)''.

SEC. 103. ONE-TIME APPROPRIATION.

    There is appropriated to the Secretary, out of any money in the 
Treasury not otherwise appropriated, $12,500,000,000 to accompany the 
allotment made for the period beginning on October 1, 2011, and ending 
on March 31, 2012, under section 2104(a)(15)(A) of the Social Security 
Act (42 U.S.C. 1397dd(a)(15)(A)) (as added by section 101), to remain 
available until expended. Such amount shall be used to provide 
allotments to States under subsections (c)(5) and (i) of section 2104 
of the Social Security Act (42 U.S.C. 1397dd) for the first 6 months of 
fiscal year 2012 in the same manner as allotments are provided under 
subsection (a)(15)(A) of such section and subject to the same terms and 
conditions as apply to the allotments provided from such subsection 
(a)(15)(A).

SEC. 104. IMPROVING FUNDING FOR THE TERRITORIES UNDER CHIP AND 
              MEDICAID.

    (a) Update of CHIP Allotments.--Section 2104(c) (42 U.S.C. 
1397dd(c)) is amended--
            (1) in paragraph (1), by inserting ``and paragraphs (5) and 
        (6)'' after ``and (i)''; and
            (2) by adding at the end the following new paragraphs:
            ``(5) Annual allotments for territories beginning with 
        fiscal year 2008.--Of the total allotment amount appropriated 
        under subsection (a) for a fiscal year beginning with fiscal 
        year 2008, the Secretary shall allot to each of the 
        commonwealths and territories described in paragraph (3) the 
        following:
                    ``(A) Fiscal year 2008.--For fiscal year 2008, the 
                highest amount of Federal payments to the commonwealth 
                or territory under this title for any fiscal year 
                occurring during the period of fiscal years 1998 
                through 2007, multiplied by the annual adjustment 
                determined under subsection (i)(2)(B) for fiscal year 
                2008, except that clause (ii) thereof shall be applied 
                by substituting `the United States' for `the State'.
                    ``(B) Fiscal years 2009 through 2012.--
                            ``(i) In general.--For each of fiscal years 
                        2009 through 2012, except as provided in clause 
                        (ii), the amount determined under this 
                        paragraph for the preceding fiscal year 
                        multiplied by the annual adjustment determined 
                        under subsection (i)(2)(B) for the fiscal year, 
                        except that clause (ii) thereof shall be 
                        applied by substituting `the United States' for 
                        `the State'.
                            ``(ii) Special rule for fiscal year 2012.--
                        In the case of fiscal year 2012--
                                    ``(I) 89 percent of the amount 
                                allocated to the commonwealth or 
                                territory for such fiscal year (without 
                                regard to this subclause) shall be 
                                allocated for the period beginning on 
                                October 1, 2011, and ending on March 
                                31, 2012, and
                                    ``(II) 11 percent of such amount 
                                shall be allocated for the period 
                                beginning on April 1, 2012, and ending 
                                on September 30, 2012.''.
    (b) Removal of Federal Matching Payments for Data Reporting Systems 
From the Overall Limit on Payments to Territories Under Title XIX.--
Section 1108(g) (42 U.S.C. 1308(g)) is amended by adding at the end the 
following new paragraph:
            ``(4) Exclusion of certain expenditures from payment 
        limits.--With respect to fiscal years beginning with fiscal 
        year 2008, if Puerto Rico, the Virgin Islands, Guam, the 
        Northern Mariana Islands, or American Samoa qualify for a 
        payment under subparagraph (A)(i), (B), or (F) of section 
        1903(a)(3) for a calendar quarter of such fiscal year, the 
        payment shall not be taken into account in applying subsection 
        (f) (as increased in accordance with paragraphs (1), (2), and 
        (3) of this subsection) to such commonwealth or territory for 
        such fiscal year.''.
    (c) GAO Study and Report.--Not later than September 30, 2009, the 
Comptroller General of the United States shall submit a report to the 
appropriate committees of Congress regarding Federal funding under 
Medicaid and CHIP for Puerto Rico, the United States Virgin Islands, 
Guam, American Samoa, and the Northern Mariana Islands. The report 
shall include the following:
            (1) An analysis of all relevant factors with respect to--
                    (A) eligible Medicaid and CHIP populations in such 
                commonwealths and territories;
                    (B) historical and projected spending needs of such 
                commonwealths and territories and the ability of capped 
                funding streams to respond to those spending needs;
                    (C) the extent to which Federal poverty guidelines 
                are used by such commonwealths and territories to 
                determine Medicaid and CHIP eligibility; and
                    (D) the extent to which such commonwealths and 
                territories participate in data collection and 
                reporting related to Medicaid and CHIP, including an 
                analysis of territory participation in the Current 
                Population Survey versus the American Community Survey.
            (2) Recommendations for improving Federal funding under 
        Medicaid and CHIP for such commonwealths and territories.

SEC. 105. INCENTIVE BONUSES FOR STATES.

    (a) In General.--Section 2104 (42 U.S.C. 1397dd), as amended by 
section 102, is amended by adding at the end the following new 
subsection:
    ``(j) Incentive Bonuses.--
            ``(1) Establishment of incentive pool from unobligated 
        national allotment and unexpended state allotments.--
                    ``(A) In general.--There is hereby established in 
                the Treasury of the United States a fund which shall be 
                known as the `CHIP Incentive Bonuses Pool' (in this 
                subsection referred to as the `Incentive Pool'). 
                Amounts in the Incentive Pool are authorized to be 
                appropriated for payments under this subsection and 
                shall remain available until expended.
                    ``(B) Deposits through initial appropriation and 
                transfers of funds.--
                            ``(i) Initial appropriation.--There is 
                        appropriated to the Incentive Pool, out of any 
                        money in the Treasury not otherwise 
                        appropriated, $3,000,000,000 for fiscal year 
                        2008.
                            ``(ii) Transfers.--Notwithstanding any 
                        other provision of law, the following amounts 
                        are hereby appropriated or transferred to, 
                        deposited in, and made available for 
                        expenditure from the Incentive Pool on the 
                        following dates:
                                    ``(I) Unexpended fiscal year 2006 
                                and 2007 allotments.--On December 31, 
                                2007, the sum for all States of the 
                                excess (if any) for each State of--
                                            ``(aa) the aggregate 
                                        allotments provided for the 
                                        State under subsection (b) or 
                                        (c) for fiscal years 2006 and 
                                        2007 that are not expended by 
                                        September 30, 2007, over
                                            ``(bb) an amount equal to 
                                        50 percent of the allotment 
                                        provided for the State under 
                                        subsection (c) or (i) for 
                                        fiscal year 2008 (as determined 
                                        in accordance with subsection 
                                        (i)(6)).
                                    ``(II) Unobligated national 
                                allotment.--
                                            ``(aa) Fiscal years 2008 
                                        through 2011.--On December 31 
                                        of fiscal year 2008, and on 
                                        December 31 of each succeeding 
                                        fiscal year through fiscal year 
                                        2011, the portion, if any, of 
                                        the amount appropriated under 
                                        subsection (a) for such fiscal 
                                        year that is unobligated for 
                                        allotment to a State under 
                                        subsection (c) or (i) for such 
                                        fiscal year or set aside under 
                                        subsection (a)(3) or (b)(2) of 
                                        section 2111 for such fiscal 
                                        year.
                                            ``(bb) First half of fiscal 
                                        year 2012.--On December 31 of 
                                        fiscal year 2012, the portion, 
                                        if any, of the sum of the 
                                        amounts appropriated under 
                                        subsection (a)(15)(A) and under 
                                        section 103 of the Children's 
                                        Health Insurance Program 
                                        Reauthorization Act of 2007 for 
                                        the period beginning on October 
                                        1, 2011, and ending on March 
                                        31, 2012, that is unobligated 
                                        for allotment to a State under 
                                        subsection (c) or (i) for such 
                                        fiscal year or set aside under 
                                        subsection (b)(2) of section 
                                        2111 for such fiscal year.
                                            ``(cc) Second half of 
                                        fiscal year 2012.--On June 30 
                                        of fiscal year 2012, the 
                                        portion, if any, of the amount 
                                        appropriated under subsection 
                                        (a)(15)(B) for the period 
                                        beginning on April 1, 2012, and 
                                        ending on September 30, 2012, 
                                        that is unobligated for 
                                        allotment to a State under 
                                        subsection (c) or (i) for such 
                                        fiscal year or set aside under 
                                        subsection (b)(2) of section 
                                        2111 for such fiscal year.
                                    ``(III) Percentage of state 
                                allotments that are unexpended by the 
                                end of the first year of availability 
                                beginning with the fiscal year 2009 
                                allotments.--On October 1 of each of 
                                fiscal years 2009 through 2012, the sum 
                                for all States for such fiscal year 
                                (the `current fiscal year') of the 
                                excess (if any) for each State of--
                                            ``(aa) the allotment made 
                                        for the State under subsection 
                                        (b), (c), or (i) for the fiscal 
                                        year preceding the current 
                                        fiscal year (reduced by any 
                                        amounts set aside under section 
                                        2111(a)(3)) that is not 
                                        expended by the end of such 
                                        preceding fiscal year, over
                                            ``(bb) an amount equal to 
                                        the applicable percentage (for 
                                        the fiscal year) of the 
                                        allotment made for the State 
                                        under subsection (b), (c), or 
                                        (i) (as so reduced) for such 
                                        preceding fiscal year.
                                For purposes of item (bb), the 
                                applicable percentage is 20 percent for 
                                fiscal year 2009, and 10 percent for 
                                each of fiscal years 2010, 2011, and 
                                2012.
                                    ``(IV) Remainder of state 
                                allotments that are unexpended by the 
                                end of the period of availability 
                                beginning with the fiscal year 2006 
                                allotments.--On October 1 of each of 
                                fiscal years 2009 through 2012, the 
                                total amount of allotments made to 
                                States under subsection (b), (c), or 
                                (i) for the second preceding fiscal 
                                year (third preceding fiscal year in 
                                the case of the fiscal year 2006 
                                allotments) and remaining after the 
                                application of subclause (III) that are 
                                not expended by September 30 of the 
                                preceding fiscal year.
                                    ``(V) Unexpended transitional 
                                coverage block grant for nonpregnant 
                                childless adults.--On October 1, 2009, 
                                any amounts set aside under section 
                                2111(a)(3) that are not expended by 
                                September 30, 2009.
                                    ``(VI)  Excess chip contingency 
                                funds.--
                                            ``(aa) Amounts in excess of 
                                        the aggregate cap.--On October 
                                        1 of each of fiscal years 2010 
                                        through 2012, any amount in 
                                        excess of the aggregate cap 
                                        applicable to the CHIP 
                                        Contingency Fund for the fiscal 
                                        year under subsection 
                                        (k)(2)(B).
                                            ``(bb) Unexpended chip 
                                        contingency fund payments.--On 
                                        October 1 of each of fiscal 
                                        years 2010 through 2012, any 
                                        portion of a CHIP Contingency 
                                        Fund payment made to a State 
                                        that remains unexpended at the 
                                        end of the period for which the 
                                        payment is available for 
                                        expenditure under subsection 
                                        (e)(3).
                                    ``(VII) Extension of availability 
                                for portion of unexpended state 
                                allotments.--The portion of the 
                                allotment made to a State for a fiscal 
                                year that is not transferred to the 
                                Incentive Pool under subclause (I) or 
                                (III) shall remain available for 
                                expenditure by the State only during 
                                the fiscal year in which such transfer 
                                occurs, in accordance with subclause 
                                (IV) and subsection (e)(4).
                    ``(C) Investment of fund.--The Secretary of the 
                Treasury shall invest, in interest bearing securities 
                of the United States, such currently available portions 
                of the Incentive Pool as are not immediately required 
                for payments from the Pool. The income derived from 
                these investments constitutes a part of the Incentive 
                Pool.
            ``(2) Payments to states increasing enrollment.--
                    ``(A) In general.--Subject to paragraph (3)(D), 
                with respect to each of fiscal years 2009 through 2012, 
                the Secretary shall make payments to States from the 
                Incentive Pool determined under subparagraph (B).
                    ``(B) Determination of payments.--If, for any 
                coverage period ending in a fiscal year ending after 
                September 30, 2008, the average monthly enrollment of 
                children in the State plan under title XIX exceeds the 
                baseline monthly average for such period, the payment 
                made for the fiscal year shall be equal to the 
                applicable amount determined under subparagraph (C).
                    ``(C) Applicable amount.--For purposes of 
                subparagraph (B), the applicable amount is the product 
                determined in accordance with the following:
                            ``(i) If such excess with respect to the 
                        number of individuals who are enrolled in the 
                        State plan under title XIX does not exceed 2 
                        percent, the product of $75 and the number of 
                        such individuals included in such excess.
                            ``(ii) If such excess with respect to the 
                        number of individuals who are enrolled in the 
                        State plan under title XIX exceeds 2, but does 
                        not exceed 5 percent, the product of $300 and 
                        the number of such individuals included in such 
                        excess, less the amount of such excess 
                        calculated in clause (i).
                            ``(iii) If such excess with respect to the 
                        number of individuals who are enrolled in the 
                        State plan under title XIX exceeds 5 percent, 
                        the product of $625 and the number of such 
                        individuals included in such excess, less the 
                        sum of the amount of such excess calculated in 
                        clauses (i) and (ii).
                    ``(D) Indexing of dollar amounts.--For each 
                coverage period ending in a fiscal year ending after 
                September 30, 2009, the dollar amounts specified in 
                subparagraph (C) shall be increased by the percentage 
                increase (if any) in the projected nominal per capita 
                amount of National Health Expenditures for the calendar 
                year beginning on January 1 of the coverage period over 
                the preceding coverage period, as most recently 
                published by the Secretary before the beginning of the 
                coverage period involved.
            ``(3) Rules relating to enrollment increases.--For purposes 
        of paragraph (2)(B)--
                    ``(A) Baseline monthly average.--Except as provided 
                in subparagraph (C), the baseline monthly average for 
                any fiscal year for a State is equal to--
                            ``(i) the baseline monthly average for the 
                        preceding fiscal year; multiplied by
                            ``(ii) the sum of 1 plus the sum of--
                                    ``(I) 0.01; and
                                    ``(II) the percentage increase in 
                                the population of low-income children 
                                in the State from the preceding fiscal 
                                year to the fiscal year involved, as 
                                determined by the Secretary based on 
                                the most timely and accurate published 
                                estimates of the Bureau of the Census 
                                before the beginning of the fiscal year 
                                involved.
                    ``(B) Coverage period.--Except as provided in 
                subparagraph (C), the coverage period for any fiscal 
                year consists of the last 2 quarters of the preceding 
                fiscal year and the first 2 quarters of the fiscal 
                year.
                    ``(C) Special rules for fiscal year 2009.--With 
                respect to fiscal year 2009--
                            ``(i) the coverage period for that fiscal 
                        year shall be based on the first 2 quarters of 
                        fiscal year 2009; and
                            ``(ii) the baseline monthly average shall 
                        be--
                                    ``(I) the average monthly 
                                enrollment of low-income children 
                                enrolled in the State's plan under 
                                title XIX for the first 2 quarters of 
                                fiscal year 2007 (as determined over a 
                                6-month period on the basis of the most 
                                recent information reported through the 
                                Medicaid Statistical Information System 
                                (MSIS)); multiplied by
                                    ``(II) the sum of 1 plus the sum 
                                of--
                                            ``(aa) 0.02; and
                                            ``(bb) the percentage 
                                        increase in the population of 
                                        low-income children in the 
                                        State from fiscal year 2007 to 
                                        fiscal year 2009, as determined 
                                        by the Secretary based on the 
                                        most timely and accurate 
                                        published estimates of the 
                                        Bureau of the Census before the 
                                        beginning of the fiscal year 
                                        involved.
                    ``(D) Additional requirement for eligibility for 
                payment.--For purposes of subparagraphs (B) and (C), 
                the average monthly enrollment shall be determined 
                without regard to children who do not meet the income 
                eligibility criteria in effect on July 19, 2007, for 
                enrollment under the State plan under title XIX or 
                under a waiver of such plan.
            ``(4) Time of payment.--Payments under paragraph (2) for 
        any fiscal year shall be made during the last quarter of such 
        year.
            ``(5) Use of payments.--Payments made to a State from the 
        Incentive Pool shall be used for any purpose that the State 
        determines is likely to reduce the percentage of low-income 
        children in the State without health insurance.
            ``(6) Proration rule.--If the amount available for payment 
        from the Incentive Pool is less than the total amount of 
        payments to be made for such fiscal year, the Secretary shall 
        reduce the payments described in paragraph (2) on a 
        proportional basis.
            ``(7) References.--With respect to a State plan under title 
        XIX, any references to a child in this subsection shall include 
        a reference to any individual provided medical assistance under 
        the plan who has not attained age 19 (or, if a State has so 
        elected under such State plan, age 20 or 21).''.
    (b) Redistribution of Unexpended Fiscal Year 2005 Allotments.--
Notwithstanding section 2104(f) of the Social Security Act (42 U.S.C. 
1397dd(f)), with respect to fiscal year 2008, the Secretary shall 
provide for a redistribution under such section from the allotments for 
fiscal year 2005 under subsection (b) and (c) of such section that are 
not expended by the end of fiscal year 2007, to each State described in 
clause (iii) of section 2104(i)(2)(A) of the Social Security Act, as 
added by section 102(a), of an amount that bears the same ratio to such 
unexpended fiscal year 2005 allotments as the ratio of the fiscal year 
2007 allotment determined for each such State under subsection (b) of 
section 2104 of such Act for fiscal year 2007 (without regard to any 
amounts paid, allotted, or redistributed to the State under section 
2104 for any preceding fiscal year) bears to the total amount of the 
fiscal year 2007 allotments for all such States (as so determined).
    (c) Conforming Amendment Eliminating Rules for Redistribution of 
Unexpended Allotments for Fiscal Years After 2005.--Effective January 
1, 2008, section 2104(f) (42 U.S.C. 1397dd(f)) is amended to read as 
follows:
    ``(f) Unallocated Portion of National Allotment and Unused 
Allotments.--For provisions relating to the distribution of portions of 
the unallocated national allotment under subsection (a) for fiscal 
years beginning with fiscal year 2008, and unexpended allotments for 
fiscal years beginning with fiscal year 2006, see subsection (j).''.
    (d) Additional Funding for the Secretary To Improve Timeliness of 
Data Reporting and Analysis for Purposes of Determining Enrollment 
Increases Under Medicaid and CHIP.--
            (1) Appropriation.--There is appropriated, out of any money 
        in the Treasury not otherwise appropriated, $5,000,000 to the 
        Secretary for fiscal year 2008 for the purpose of improving the 
        timeliness of the data reported and analyzed from the Medicaid 
        Statistical Information System (MSIS) for purposes of carrying 
        out section 2104(j)(2)(B) of the Social Security Act (as added 
        by subsection (a)) and to provide guidance to States with 
        respect to any new reporting requirements related to such 
        improvements. Amounts appropriated under this paragraph shall 
        remain available until expended.
            (2) Requirements.--The improvements made by the Secretary 
        under paragraph (1) shall be designed and implemented 
        (including with respect to any necessary guidance for States) 
        so that, beginning no later than October 1, 2008, data 
        regarding the enrollment of low-income children (as defined in 
        section 2110(c)(4) of the Social Security Act (42 U.S.C. 
        1397jj(c)(4)) of a State enrolled in the State plan under 
        Medicaid or the State child health plan under CHIP with respect 
        to a fiscal year shall be collected and analyzed by the 
        Secretary within 6 months of submission.

SEC. 106. PHASE-OUT OF COVERAGE FOR NONPREGNANT CHILDLESS ADULTS UNDER 
              CHIP; CONDITIONS FOR COVERAGE OF PARENTS.

    (a) Phase-Out Rules.--
            (1) In general.--Title XXI (42 U.S.C. 1397aa et seq.) is 
        amended by adding at the end the following new section:

``SEC. 2111. PHASE-OUT OF COVERAGE FOR NONPREGNANT CHILDLESS ADULTS; 
              CONDITIONS FOR COVERAGE OF PARENTS.

    ``(a) Termination of Coverage for Nonpregnant Childless Adults.--
            ``(1) No new chip waivers; automatic extensions at state 
        option through fiscal year 2008.--Notwithstanding section 1115 
        or any other provision of this title, except as provided in 
        this subsection--
                    ``(A) the Secretary shall not on or after the date 
                of the enactment of the Children's Health Insurance 
                Program Reauthorization Act of 2007, approve or renew a 
                waiver, experimental, pilot, or demonstration project 
                that would allow funds made available under this title 
                to be used to provide child health assistance or other 
                health benefits coverage to a nonpregnant childless 
                adult; and
                    ``(B) notwithstanding the terms and conditions of 
                an applicable existing waiver, the provisions of 
                paragraphs (2) and (3) shall apply for purposes of any 
                fiscal year beginning on or after October 1, 2008, in 
                determining the period to which the waiver applies, the 
                individuals eligible to be covered by the waiver, and 
                the amount of the Federal payment under this title.
            ``(2) Termination of chip coverage under applicable 
        existing waivers at the end of fiscal year 2008.--
                    ``(A) In general.--No funds shall be available 
                under this title for child health assistance or other 
                health benefits coverage that is provided to a 
                nonpregnant childless adult under an applicable 
                existing waiver after September 30, 2008.
                    ``(B) Extension upon state request.--If an 
                applicable existing waiver described in subparagraph 
                (A) would otherwise expire before October 1, 2008, and 
                the State requests an extension of such waiver, the 
                Secretary shall grant such an extension, but only 
                through September 30, 2008.
                    ``(C) Application of enhanced fmap.--The enhanced 
                FMAP determined under section 2105(b) shall apply to 
                expenditures under an applicable existing waiver for 
                the provision of child health assistance or other 
                health benefits coverage to a nonpregnant childless 
                adult during fiscal year 2008.
            ``(3) Optional 1-year transitional coverage block grant 
        funded from state allotment.--Subject to paragraph (4)(B), each 
        State for which coverage under an applicable existing waiver is 
        terminated under paragraph (2)(A) may elect to provide 
        nonpregnant childless adults who were provided child health 
        assistance or health benefits coverage under the applicable 
        existing waiver at any time during fiscal year 2008 with such 
        assistance or coverage during fiscal year 2009, as if the 
        authority to provide such assistance or coverage under an 
        applicable existing waiver was extended through that fiscal 
        year, but subject to the following terms and conditions:
                    ``(A) Block grant set aside from state allotment.--
                The Secretary shall set aside for the State an amount 
                equal to the Federal share of the State's projected 
                expenditures under the applicable existing waiver for 
                providing child health assistance or health benefits 
                coverage to all nonpregnant childless adults under such 
                waiver for fiscal year 2008 (as certified by the State 
                and submitted to the Secretary by not later than August 
                31, 2008, and without regard to whether any such 
                individual lost coverage during fiscal year 2008 and 
                was later provided child health assistance or other 
                health benefits coverage under the waiver in that 
                fiscal year), increased by the annual adjustment for 
                fiscal year 2009 determined under section 
                2104(i)(2)(B)(i). The Secretary may adjust the amount 
                set aside under the preceding sentence, as necessary, 
                on the basis of the expenditure data for fiscal year 
                2008 reported by States on CMS Form 64 or CMS Form 21 
                not later than November 30, 2008, but in no case shall 
                the Secretary adjust such amount after December 31, 
                2008.
                    ``(B) No coverage for nonpregnant childless adults 
                who were not covered during fiscal year 2008.--
                            ``(i) FMAP applied to expenditures.--The 
                        Secretary shall pay the State for each quarter 
                        of fiscal year 2009, from the amount set aside 
                        under subparagraph (A), an amount equal to the 
                        Federal medical assistance percentage (as 
                        determined under section 1905(b) without regard 
                        to clause (4) of such section) of expenditures 
                        in the quarter for providing child health 
                        assistance or other health benefits coverage to 
                        a nonpregnant childless adult but only if such 
                        adult was enrolled in the State program under 
                        this title during fiscal year 2008 (without 
                        regard to whether the individual lost coverage 
                        during fiscal year 2008 and was reenrolled in 
                        that fiscal year or in fiscal year 2009).
                            ``(ii) Federal payments limited to amount 
                        of block grant set-aside.--No payments shall be 
                        made to a State for expenditures described in 
                        this subparagraph after the total amount set 
                        aside under subparagraph (A) for fiscal year 
                        2009 has been paid to the State.
            ``(4) State option to apply for medicaid waiver to continue 
        coverage for nonpregnant childless adults.--
                    ``(A) In general.--Each State for which coverage 
                under an applicable existing waiver is terminated under 
                paragraph (2)(A) may submit, not later than June 30, 
                2009, an application to the Secretary for a waiver 
                under section 1115 of the State plan under title XIX to 
                provide medical assistance to a nonpregnant childless 
                adult whose coverage is so terminated (in this 
                subsection referred to as a `Medicaid nonpregnant 
                childless adults waiver').
                    ``(B) Deadline for approval.--The Secretary shall 
                make a decision to approve or deny an application for a 
                Medicaid nonpregnant childless adults waiver submitted 
                under subparagraph (A) within 90 days of the date of 
                the submission of the application. If no decision has 
                been made by the Secretary as of September 30, 2009, on 
                the application of a State for a Medicaid nonpregnant 
                childless adults waiver that was submitted to the 
                Secretary by June 30, 2009, the application shall be 
                deemed approved.
                    ``(C) Standard for budget neutrality.--The budget 
                neutrality requirement applicable with respect to 
                expenditures for medical assistance under a Medicaid 
                nonpregnant childless adults waiver shall--
                            ``(i) in the case of fiscal year 2010, 
                        allow expenditures for medical assistance under 
                        title XIX for all such adults to not exceed the 
                        total amount of payments made to the State 
                        under paragraph (3)(B) for fiscal year 2009, 
                        increased by the percentage increase (if any) 
                        in the projected nominal per capita amount of 
                        National Health Expenditures for calendar year 
                        2010 over calendar year 2009, as most recently 
                        published by the Secretary; and
                            ``(ii) in the case of any succeeding fiscal 
                        year, allow such expenditures to not exceed the 
                        amount in effect under this subparagraph for 
                        the preceding fiscal year, increased by the 
                        percentage increase (if any) in the projected 
                        nominal per capita amount of National Health 
                        Expenditures for the calendar year that begins 
                        during the fiscal year involved over the 
                        preceding calendar year, as most recently 
                        published by the Secretary.
    ``(b) Rules and Conditions for Coverage of Parents of Targeted Low-
Income Children.--
            ``(1) Two-year transition period; automatic extension at 
        state option through fiscal year 2009.--
                    ``(A) No new chip waivers.--Notwithstanding section 
                1115 or any other provision of this title, except as 
                provided in this subsection--
                            ``(i) the Secretary shall not on or after 
                        the date of the enactment of the Children's 
                        Health Insurance Program Reauthorization Act of 
                        2007 approve or renew a waiver, experimental, 
                        pilot, or demonstration project that would 
                        allow funds made available under this title to 
                        be used to provide child health assistance or 
                        other health benefits coverage to a parent of a 
                        targeted low-income child; and
                            ``(ii) notwithstanding the terms and 
                        conditions of an applicable existing waiver, 
                        the provisions of paragraphs (2) and (3) shall 
                        apply for purposes of any fiscal year beginning 
                        on or after October 1, 2009, in determining the 
                        period to which the waiver applies, the 
                        individuals eligible to be covered by the 
                        waiver, and the amount of the Federal payment 
                        under this title.
                    ``(B) Extension upon state request.--If an 
                applicable existing waiver described in subparagraph 
                (A) would otherwise expire before October 1, 2009, and 
                the State requests an extension of such waiver, the 
                Secretary shall grant such an extension, but only, 
                subject to paragraph (2)(A), through September 30, 
                2009.
                    ``(C) Application of enhanced fmap.--The enhanced 
                FMAP determined under section 2105(b) shall apply to 
                expenditures under an applicable existing waiver for 
                the provision of child health assistance or other 
                health benefits coverage to a parent of a targeted low-
                income child during fiscal years 2008 and 2009.
            ``(2) Rules for fiscal years 2010 through 2012.--
                    ``(A) Payments for coverage limited to block grant 
                funded from state allotment.--Any State that provides 
                child health assistance or health benefits coverage 
                under an applicable existing waiver for a parent of a 
                targeted low-income child may elect to continue to 
                provide such assistance or coverage through fiscal year 
                2010, 2011, or 2012, subject to the same terms and 
                conditions that applied under the applicable existing 
                waiver, unless otherwise modified in subparagraph (B).
                    ``(B) Terms and conditions.--
                            ``(i) Block grant set aside from state 
                        allotment.--If the State makes an election 
                        under subparagraph (A), the Secretary shall set 
                        aside for the State for each such fiscal year 
                        an amount equal to the Federal share of 110 
                        percent of the State's projected expenditures 
                        under the applicable existing waiver for 
                        providing child health assistance or health 
                        benefits coverage to all parents of targeted 
                        low-income children enrolled under such waiver 
                        for the fiscal year (as certified by the State 
                        and submitted to the Secretary by not later 
                        than August 31 of the preceding fiscal year). 
                        In the case of fiscal year 2012, the set aside 
                        for any State shall be computed separately for 
                        each period described in clauses (i) and (ii) 
                        of subsection (i))(1)(D) and any increase or 
                        reduction in the allotment for either such 
                        period under subsection (i)(3)(B)(ii) shall be 
                        allocated on a pro rata basis to such set 
                        aside.
                            ``(ii) Payments from block grant.--The 
                        Secretary shall pay the State from the amount 
                        set aside under clause (i) for the fiscal year, 
                        an amount for each quarter of such fiscal year 
                        equal to the applicable percentage determined 
                        under clause (iii) or (iv) for expenditures in 
                        the quarter for providing child health 
                        assistance or other health benefits coverage to 
                        a parent of a targeted low-income child.
                            ``(iii) Enhanced fmap only in fiscal year 
                        2010 for states with significant child outreach 
                        or that achieve child coverage benchmarks; fmap 
                        for any other states.--For purposes of clause 
                        (ii), the applicable percentage for any quarter 
                        of fiscal year 2010 is equal to--
                                    ``(I) the enhanced FMAP determined 
                                under section 2105(b) in the case of a 
                                State that meets the outreach or 
                                coverage benchmarks described in any of 
                                subparagraphs (A), (B), or (C) of 
                                paragraph (3) for fiscal year 2009; or
                                    ``(II) the Federal medical 
                                assistance percentage (as determined 
                                under section 1905(b) without regard to 
                                clause (4) of such section) in the case 
                                of any other State.
                            ``(iv) Amount of federal matching payment 
                        in 2011 or 2012.--For purposes of clause (ii), 
                        the applicable percentage for any quarter of 
                        fiscal year 2011 or 2012 is equal to--
                                    ``(I) the REMAP percentage if the 
                                State met either of the coverage 
                                benchmarks described in subparagraph 
                                (B) or (C) of paragraph (3) for the 
                                preceding fiscal year; or
                                    ``(II) the Federal medical 
                                assistance percentage (as so 
                                determined) in the case of any State to 
                                which subclause (I) does not apply.
                        For purposes of subclause (I), the REMAP 
                        percentage is the percentage which is the sum 
                        of such Federal medical assistance percentage 
                        and a number of percentage points equal to one-
                        half of the difference between such Federal 
                        medical assistance percentage and such enhanced 
                        FMAP.
                            ``(v) No federal payments other than from 
                        block grant set aside.--No payments shall be 
                        made to a State for expenditures described in 
                        clause (ii) after the total amount set aside 
                        under clause (i) for a fiscal year has been 
                        paid to the State.
                            ``(vi) No increase in income eligibility 
                        level for parents.--No payments shall be made 
                        to a State from the amount set aside under 
                        clause (i) for a fiscal year for expenditures 
                        for providing child health assistance or health 
                        benefits coverage to a parent of a targeted 
                        low-income child whose family income exceeds 
                        the income eligibility level applied under the 
                        applicable existing waiver to parents of 
                        targeted low-income children on the date of 
                        enactment of the Children's Health Insurance 
                        Program Reauthorization Act of 2007.
            ``(3) Outreach or coverage benchmarks.--For purposes of 
        paragraph (2), the outreach or coverage benchmarks described in 
        this paragraph are as follows:
                    ``(A) Significant child outreach campaign.--The 
                State--
                            ``(i) was awarded a grant under section 
                        2113 for fiscal year 2009;
                            ``(ii) implemented 1 or more of the process 
                        measures described in section 2104(j)(3)(A)(i) 
                        for such fiscal year; or
                            ``(iii) has submitted a specific plan for 
                        outreach for such fiscal year.
                    ``(B) High-performing state.--The State, on the 
                basis of the most timely and accurate published 
                estimates of the Bureau of the Census, ranks in the 
                lowest \1/3\ of States in terms of the State's 
                percentage of low-income children without health 
                insurance.
                    ``(C) State increasing enrollment of low-income 
                children.--The State qualified for a payment from the 
                Incentive Fund under paragraph (2)(C) of section 
                2104(j) for the most recent coverage period applicable 
                under such section.
            ``(4) Rules of construction.--Nothing in this subsection 
        shall be construed as prohibiting a State from submitting an 
        application to the Secretary for a waiver under section 1115 of 
        the State plan under title XIX to provide medical assistance to 
        a parent of a targeted low-income child that was provided child 
        health assistance or health benefits coverage under an 
        applicable existing waiver.
    ``(c) Applicable Existing Waiver.--For purposes of this section--
            ``(1) In general.--The term `applicable existing waiver' 
        means a waiver, experimental, pilot, or demonstration project 
        under section 1115, grandfathered under section 6102(c)(3) of 
        the Deficit Reduction Act of 2005, or otherwise conducted under 
        authority that--
                    ``(A) would allow funds made available under this 
                title to be used to provide child health assistance or 
                other health benefits coverage to--
                            ``(i) a parent of a targeted low-income 
                        child;
                            ``(ii) a nonpregnant childless adult; or
                            ``(iii) individuals described in both 
                        clauses (i) and (ii); and
                    ``(B) was in effect during fiscal year 2007.
            ``(2) Definitions.--
                    ``(A) Parent.--The term `parent' includes a 
                caretaker relative (as such term is used in carrying 
                out section 1931) and a legal guardian.
                    ``(B) Nonpregnant childless adult.--The term 
                `nonpregnant childless adult' has the meaning given 
                such term by section 2107(f).''.
            (2) Conforming amendments.--
                    (A) Section 2107(f) (42 U.S.C. 1397gg(f)) is 
                amended--
                            (i) by striking ``, the Secretary'' and 
                        inserting ``:
            ``(1) The Secretary'';
                            (ii) in the first sentence, by inserting 
                        ``or a parent (as defined in section 
                        2111(c)(2)(A)), who is not pregnant, of a 
                        targeted low-income child'' before the period;
                            (iii) by striking the second sentence; and
                            (iv) by adding at the end the following new 
                        paragraph:
            ``(2) The Secretary may not approve, extend, renew, or 
        amend a waiver, experimental, pilot, or demonstration project 
        with respect to a State after the date of enactment of the 
        Children's Health Insurance Program Reauthorization Act of 2007 
        that would waive or modify the requirements of section 2111.''.
                    (B) Section 6102(c) of the Deficit Reduction Act of 
                2005 (Public Law 109-171; 120 Stat. 131) is amended by 
                striking ``Nothing'' and inserting ``Subject to section 
                2111 of the Social Security Act, as added by section 
                106(a)(1) of the Children's Health Insurance Program 
                Reauthorization Act of 2007, nothing''.
    (b) GAO Study and Report.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study of whether--
                    (A) the coverage of a parent, a caretaker relative 
                (as such term is used in carrying out section 1931), or 
                a legal guardian of a targeted low-income child under a 
                State health plan under title XXI of the Social 
                Security Act increases the enrollment of, or the 
                quality of care for, children, and
                    (B) such parents, relatives, and legal guardians 
                who enroll in such a plan are more likely to enroll 
                their children in such a plan or in a State plan under 
                title XIX of such Act.
            (2) Report.--Not later than 2 years after the date of the 
        enactment of this Act, the Comptroller General shall report the 
        results of the study to the appropriate committees of Congress, 
        including recommendations (if any) for changes in legislation.

SEC. 107. STATE OPTION TO COVER LOW-INCOME PREGNANT WOMEN UNDER CHIP 
              THROUGH A STATE PLAN AMENDMENT.

    (a) In General.--Title XXI (42 U.S.C. 1397aa et seq.), as amended 
by section 106(a), is amended by adding at the end the following new 
section:

``SEC. 2112. OPTIONAL COVERAGE OF TARGETED LOW-INCOME PREGNANT WOMEN 
              THROUGH A STATE PLAN AMENDMENT.

    ``(a) In General.--Subject to the succeeding provisions of this 
section, a State may elect through an amendment to its State child 
health plan under section 2102 to provide pregnancy-related assistance 
under such plan for targeted low-income pregnant women.
    ``(b) Conditions.--A State may only elect the option under 
subsection (a) if the following conditions are satisfied:
            ``(1) Medicaid income eligibility level for pregnant women 
        of at least 185 percent of poverty.--The State has established 
        an income eligibility level for pregnant women under subsection 
        (a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), or (l)(1)(A) of section 
        1902 that is at least 185 percent of the income official 
        poverty line.
            ``(2) No chip income eligibility level for pregnant women 
        lower than the state's medicaid level.--The State does not 
        apply an effective income level for pregnant women under the 
        State plan amendment that is lower than the effective income 
        level (expressed as a percent of the poverty line and 
        considering applicable income disregards) specified under 
        subsection (a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), or (l)(1)(A) 
        of section 1902, on the date of enactment of this paragraph to 
        be eligible for medical assistance as a pregnant woman.
            ``(3) No coverage for higher income pregnant women without 
        covering lower income pregnant women.--The State does not 
        provide coverage for pregnant women with higher family income 
        without covering pregnant women with a lower family income.
            ``(4) Application of requirements for coverage of targeted 
        low-income children.--The State provides pregnancy-related 
        assistance for targeted low-income pregnant women in the same 
        manner, and subject to the same requirements, as the State 
        provides child health assistance for targeted low-income 
        children under the State child health plan, and in addition to 
        providing child health assistance for such women.
            ``(5) No preexisting condition exclusion or waiting 
        period.--The State does not apply any exclusion of benefits for 
        pregnancy-related assistance based on any preexisting condition 
        or any waiting period (including any waiting period imposed to 
        carry out section 2102(b)(3)(C)) for receipt of such 
        assistance.
            ``(6) Application of cost-sharing protection.--The State 
        provides pregnancy-related assistance to a targeted low-income 
        woman consistent with the cost-sharing protections under 
        section 2103(e) and applies the limitation on total annual 
        aggregate cost sharing imposed under paragraph (3)(B) of such 
        section to the family of such a woman.
    ``(c) Option To Provide Presumptive Eligibility.--A State that 
elects the option under subsection (a) and satisfies the conditions 
described in subsection (b) may elect to apply section 1920 (relating 
to presumptive eligibility for pregnant women) to the State child 
health plan in the same manner as such section applies to the State 
plan under title XIX.
    ``(d) Definitions.--For purposes of this section:
            ``(1) Pregnancy-related assistance.--The term `pregnancy-
        related assistance' has the meaning given the term `child 
        health assistance' in section 2110(a) and includes any medical 
        assistance that the State would provide for a pregnant woman 
        under the State plan under title XIX during pregnancy and the 
        period described in paragraph (2)(A).
            ``(2) Targeted low-income pregnant woman.--The term 
        `targeted low-income pregnant woman' means a woman--
                    ``(A) during pregnancy and through the end of the 
                month in which the 60-day period (beginning on the last 
                day of her pregnancy) ends;
                    ``(B) whose family income does not exceed the 
                income eligibility level established under the State 
                child health plan under this title for a targeted low-
                income child; and
                    ``(C) who satisfies the requirements of paragraphs 
                (1)(A), (1)(C), (2), and (3) of section 2110(b) in the 
                same manner as a child applying for child health 
                assistance would have to satisfy such requirements.
    ``(e) Automatic Enrollment for Children Born to Women Receiving 
Pregnancy-Related Assistance.--If a child is born to a targeted low-
income pregnant woman who was receiving pregnancy-related assistance 
under this section on the date of the child's birth, the child shall be 
deemed to have applied for child health assistance under the State 
child health plan and to have been found eligible for such assistance 
under such plan or to have applied for medical assistance under title 
XIX and to have been found eligible for such assistance under such 
title, as appropriate, on the date of such birth and to remain eligible 
for such assistance until the child attains 1 year of age. During the 
period in which a child is deemed under the preceding sentence to be 
eligible for child health or medical assistance, the child health or 
medical assistance eligibility identification number of the mother 
shall also serve as the identification number of the child, and all 
claims shall be submitted and paid under such number (unless the State 
issues a separate identification number for the child before such 
period expires).
    ``(f) States Providing Assistance Through Other Options.--
            ``(1) Continuation of other options for providing 
        assistance.--The option to provide assistance in accordance 
        with the preceding subsections of this section shall not limit 
        any other option for a State to provide--
                    ``(A) child health assistance through the 
                application of sections 457.10, 457.350(b)(2), 
                457.622(c)(5), and 457.626(a)(3) of title 42, Code of 
                Federal Regulations (as in effect after the final rule 
                adopted by the Secretary and set forth at 67 Fed. Reg. 
                61956-61974 (October 2, 2002)), or
                    ``(B) pregnancy-related services through the 
                application of any waiver authority (as in effect on 
                June 1, 2007).
            ``(2) Clarification of authority to provide postpartum 
        services.--Any State that provides child health assistance 
        under any authority described in paragraph (1) may continue to 
        provide such assistance, as well as postpartum services, 
        through the end of the month in which the 60-day period 
        (beginning on the last day of the pregnancy) ends, in the same 
        manner as such assistance and postpartum services would be 
        provided if provided under the State plan under title XIX, but 
        only if the mother would otherwise satisfy the eligibility 
        requirements that apply under the State child health plan 
        (other than with respect to age) during such period.
            ``(3) No inference.--Nothing in this subsection shall be 
        construed--
                    ``(A) to infer congressional intent regarding the 
                legality or illegality of the content of the sections 
                specified in paragraph (1)(A); or
                    ``(B) to modify the authority to provide pregnancy-
                related services under a waiver specified in paragraph 
                (1)(B).''.
    (b) Additional Conforming Amendments.--
            (1) No cost sharing for pregnancy-related benefits.--
        Section 2103(e)(2) (42 U.S.C. 1397cc(e)(2)) is amended--
                    (A) in the heading, by inserting ``or pregnancy-
                related assistance'' after ``preventive services''; and
                    (B) by inserting before the period at the end the 
                following: ``or for pregnancy-related assistance''.
            (2) No waiting period.--Section 2102(b)(1)(B) (42 U.S.C. 
        1397bb(b)(1)(B)) is amended--
                    (A) in clause (i), by striking ``, and'' at the end 
                and inserting a semicolon;
                    (B) in clause (ii), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following new clause:
                            ``(iii) may not apply a waiting period 
                        (including a waiting period to carry out 
                        paragraph (3)(C)) in the case of a targeted 
                        low-income pregnant woman provided pregnancy-
                        related assistance under section 2112.''.

SEC. 108. CHIP CONTINGENCY FUND.

    Section 2104 (42 U.S.C. 1397dd), as amended by section 105, is 
amended by adding at the end the following new subsection:
    ``(k) CHIP Contingency Fund.--
            ``(1) Establishment.--There is hereby established in the 
        Treasury of the United States a fund which shall be known as 
        the `CHIP Contingency Fund' (in this subsection referred to as 
        the `Fund'). Amounts in the Fund are authorized to be 
        appropriated for payments under this subsection.
            ``(2) Deposits into fund.--
                    ``(A) Initial and subsequent appropriations.--
                Subject to subparagraphs (B) and (E), out of any money 
                in the Treasury of the United States not otherwise 
                appropriated, there are appropriated to the Fund--
                            ``(i) for fiscal year 2009, an amount equal 
                        to 12.5 percent of the available national 
                        allotment under subsection (i)(1)(C) for the 
                        fiscal year; and
                            ``(ii) for each of fiscal years 2010 
                        through 2012, such sums as are necessary for 
                        making payments to eligible States for such 
                        fiscal year, but not in excess of the aggregate 
                        cap described in subparagraph (B).
                    ``(B) Aggregate cap.--Subject to subparagraph (E), 
                the total amount available for payment from the Fund 
                for each of fiscal years 2009 through 2012 (taking into 
                account deposits made under subparagraph (C)), shall 
                not exceed 12.5 percent of the available national 
                allotment under subsection (i)(1)(C) for the fiscal 
                year.
                    ``(C) Investment of fund.--The Secretary of the 
                Treasury shall invest, in interest bearing securities 
                of the United States, such currently available portions 
                of the Fund as are not immediately required for 
                payments from the Fund. The income derived from these 
                investments constitutes a part of the Fund.
                    ``(D) Transfer of excess funds to the incentive 
                fund.--The Secretary of the Treasury shall transfer to, 
                and deposit in, the CHIP Incentive Bonuses Pool 
                established under subsection (j) any amounts in excess 
                of the aggregate cap described in subparagraph (B) for 
                a fiscal year.
                    ``(E) Special rules for amounts set aside for 
                parents and childless adults.--For purposes of 
                subparagraphs (A) and (B)--
                            ``(i) the available national allotment 
                        under subsection (i)(1)(C) shall be reduced by 
                        any amount set aside under section 2111(a)(3) 
                        for block grant payments for transitional 
                        coverage for childless adults; and
                            ``(ii) the Secretary shall establish a 
                        separate account in the Fund for the portion of 
                        any amount appropriated to the Fund for any 
                        fiscal year which is allocable to the portion 
                        of the available national allotment under 
                        subsection (i)(1)(C) which is set aside for the 
                        fiscal year under section 2111(b)(2)(B)(i) for 
                        coverage of parents of low-income children.
                The Secretary shall include in the account established 
                under clause (ii) any income derived under subparagraph 
                (C) which is allocable to amounts in such account.
            ``(3) CHIP contingency fund payments.--
                    ``(A) Payments.--
                            ``(i) In general.--Subject to clauses (ii) 
                        and (iii) and the succeeding subparagraphs of 
                        this paragraph, the Secretary shall pay from 
                        the Fund to a State that is an eligible State 
                        for a month of a fiscal year a CHIP contingency 
                        fund payment equal to the Federal share of the 
                        shortfall determined under subparagraph (D). In 
                        the case of an eligible State under 
                        subparagraph (D)(i), the Secretary shall not 
                        make the payment under this subparagraph until 
                        the State makes, and submits to the Secretary, 
                        a projection of the amount of the shortfall.
                            ``(ii) Separate determinations of 
                        shortfalls.--The Secretary shall separately 
                        compute the shortfall under subparagraph (D) 
                        for expenditures for eligible individuals other 
                        than nonpregnant childless adults and parents 
                        with respect to whom amounts are set aside 
                        under section 2111, for expenditures for such 
                        childless adults, and for expenditures for such 
                        parents.
                            ``(iii) Payments.--
                                    ``(I) Nonpregnant childless 
                                adults.--No payments shall be made from 
                                the Fund for nonpregnant childless 
                                adults with respect to whom amounts are 
                                set aside under section 2111(a)(3).
                                    ``(II) Parents.--Any payments with 
                                respect to any shortfall for parents 
                                who are paid from amounts set aside 
                                under section 2111(b)(2)(B)(i) shall be 
                                made only from the account established 
                                under paragraph (2)(E)(ii) and not from 
                                any other amounts in the Fund. No other 
                                payments may be made from such account.
                            ``(iv) Special rules.--Subparagraphs (B) 
                        and (C) shall be applied separately with 
                        respect to shortfalls described in clause (ii).
                    ``(B) Use of funds.--Amounts paid to an eligible 
                State from the Fund shall be used only to eliminate the 
                Federal share of a shortfall in the State's allotment 
                under subsection (i) for a fiscal year.
                    ``(C) Proration rule.--If the amounts available for 
                payment from the Fund for a fiscal year are less than 
                the total amount of payments determined under 
                subparagraph (A) for the fiscal year, the amount to be 
                paid under such subparagraph to each eligible State 
                shall be reduced proportionally.
                    ``(D) Eligible state.--
                            ``(i) In general.--A State is an eligible 
                        State for a month if the State is a subsection 
                        (b) State (as defined in subsection (i)(7)), 
                        the State requests access to the Fund for the 
                        month, and it is described in clause (ii) or 
                        (iii).
                            ``(ii) Shortfall of federal allotment 
                        funding of not more than 5 percent.--The 
                        Secretary estimates, on the basis of the most 
                        recent data available to the Secretary or 
                        requested from the State by the Secretary, that 
                        the State's allotment for the fiscal year is at 
                        least 95 percent, but less than 100 percent, of 
                        the projected expenditures under the State 
                        child health plan for the State for the fiscal 
                        year determined under subsection (i) (without 
                        regard to incentive bonuses or payments for 
                        which the State is eligible for under 
                        subsection (j)(2) for the fiscal year).
                            ``(iii) Shortfall of federal allotment 
                        funding of more than 5 percent caused by 
                        specific events.--The Secretary estimates, on 
                        the basis of the most recent data available to 
                        the Secretary or requested from the State by 
                        the Secretary, that the State's allotment for 
                        the fiscal year is less than 95 percent of the 
                        projected expenditures under the State child 
                        health plan for the State for the fiscal year 
                        determined under subsection (i) (without regard 
                        to incentive bonuses or payments for which the 
                        State is eligible for under subsection (j)(2) 
                        for the fiscal year) and that such shortfall is 
                        attributable to 1 or more of the following 
                        events:
                                    ``(I) Stafford act or public health 
                                emergency.--The State has--
                                            ``(aa) 1 or more parishes 
                                        or counties for which a major 
                                        disaster has been declared in 
                                        accordance with section 401 of 
                                        the Robert T. Stafford Disaster 
                                        Relief and Emergency Assistance 
                                        Act (42 U.S.C. 5170) and which 
                                        the President has determined 
                                        warrants individual and public 
                                        assistance from the Federal 
                                        Government under such Act; or
                                            ``(bb) a public health 
                                        emergency declared by the 
                                        Secretary under section 319 of 
                                        the Public Health Service Act.
                                    ``(II) State economic downturn.--
                                The State unemployment rate is at least 
                                5.5 percent during any 13-consecutive 
                                week period during the fiscal year and 
                                such rate is at least 120 percent of 
                                the State unemployment rate for the 
                                same period as averaged over the last 3 
                                fiscal years.
                                    ``(III)  Event resulting in rise in 
                                percentage of low-income children 
                                without health insurance.--The State 
                                experienced a recent event that 
                                resulted in an increase in the 
                                percentage of low-income children in 
                                the State without health insurance (as 
                                determined on the basis of the most 
                                timely and accurate published estimates 
                                of the Bureau of the Census) that was 
                                outside the control of the State and 
                                warrants granting the State access to 
                                the Fund (as determined by the 
                                Secretary).
                    ``(E) Payments made to all eligible states on a 
                monthly basis; authority for pro rata payments.--The 
                Secretary shall make monthly payments from the Fund to 
                all States that are determined to be eligible States 
                with respect to a month. If the sum of the payments to 
                be made from the Fund for a month exceed the amount in 
                the Fund, the Secretary shall reduce each such payment 
                on a proportional basis.
                    ``(F) Payments limited to fiscal year of 
                eligibility determination unless new eligibility basis 
                determined.--No State shall receive a CHIP contingency 
                fund payment under this section for a month beginning 
                after September 30 of the fiscal year in which the 
                State is determined to be an eligible State under this 
                subsection, except that in the case of an event 
                described in subclause (I) or (III) of subparagraph 
                (D)(iii) that occurred after July 1 of the fiscal year, 
                any such payment with respect to such event shall 
                remain available until September 30 of the subsequent 
                fiscal year. Nothing in the preceding sentence shall be 
                construed as prohibiting a State from being determined 
                to be an eligible State under this subsection for any 
                fiscal year occurring after a fiscal year in which such 
                a determination is made.
                    ``(G) Exemption from determination of percentage of 
                allotment retained after first year of availability.--
                In no event shall payments made to a State under this 
                subsection be treated as part of the allotment 
                determined for a State for a fiscal year under 
                subsection (i) for purposes of subsection 
                (j)(1)(B)(ii)(III).
                    ``(H) Application of allotment reporting rules.--
                Rules applicable to States for purposes of receiving 
                payments from an allotment determined under subsection 
                (c) or (i) shall apply in the same manner to an 
                eligible State for purposes of receiving a CHIP 
                contingency fund payment under this subsection.
            ``(4) Annual reports.--The Secretary shall annually report 
        to the Congress on the amounts in the Fund, the specific events 
        that caused States to apply for payments from the Fund, and the 
        payments made from the Fund.''.

SEC. 109. TWO-YEAR AVAILABILITY OF ALLOTMENTS; EXPENDITURES COUNTED 
              AGAINST OLDEST ALLOTMENTS.

    Section 2104(e) (42 U.S.C. 1397dd(e)) is amended to read as 
follows:
    ``(e) Availability of Amounts Allotted.--
            ``(1) In general.--Except as provided in subsection 
        (j)(1)(B)(ii)(III), amounts allotted to a State pursuant to 
        this section--
                    ``(A) for each of fiscal years 1998 through 2006, 
                shall remain available for expenditure by the State 
                through the end of the second succeeding fiscal year; 
                and
                    ``(B) for each of fiscal years 2007 through 2012, 
                shall remain available for expenditure by the State 
                only through the end of the succeeding fiscal year for 
                which such amounts are allotted.
            ``(2) Incentive bonuses.--Incentive bonuses paid to a State 
        under subsection (j)(2) for a fiscal year shall remain 
        available for expenditure by the State without limitation.
            ``(3) CHIP contingency fund payments.--Except as provided 
        in paragraph (3)(F) of subsection (k), CHIP Contingency Fund 
        payments made to a State under such subsection for a month of a 
        fiscal year shall remain available for expenditure by the State 
        through the end of the fiscal year.
            ``(4) Rule for counting expenditures against chip 
        contingency fund payments, fiscal year allotments, and 
        incentive bonuses.--
                    ``(A) In general.--Expenditures under the State 
                child health plan made on or after October 1, 2007, 
                shall be counted against--
                            ``(i) first, any CHIP Contingency Fund 
                        payment made to the State under subsection (k) 
                        for the earliest month of the earliest fiscal 
                        year for which the payment remains available 
                        for expenditure; and
                            ``(ii) second, amounts allotted to the 
                        State for the earliest fiscal year for which 
                        amounts remain available for expenditure.
                    ``(B) Incentive bonuses.--A State may elect, but is 
                not required, to count expenditures under the State 
                child health plan against any incentive bonuses paid to 
                the State under subsection (j)(2) for a fiscal year.
                    ``(C) Block grant set-asides.--Expenditures for 
                coverage of--
                            ``(i) nonpregnant childless adults for 
                        fiscal year 2009 shall be counted only against 
                        the amount set aside for such coverage under 
                        section 2111(a)(3); and
                            ``(ii) parents of targeted low-income 
                        children for each of fiscal years 2010 through 
                        2012, shall be counted only against the amount 
                        set aside for such coverage under section 
                        2111(b)(2)(B)(i).''.

SEC. 110. LIMITATION ON MATCHING RATE FOR STATES THAT PROPOSE TO COVER 
              CHILDREN WITH EFFECTIVE FAMILY INCOME THAT EXCEEDS 300 
              PERCENT OF THE POVERTY LINE.

    (a) FMAP Applied to Expenditures.--Section 2105(c) (42 U.S.C. 
1397ee(c)) is amended by adding at the end the following new paragraph:
            ``(8) Limitation on matching rate for expenditures for 
        child health assistance provided to children whose effective 
        family income exceeds 300 percent of the poverty line.--
                    ``(A) FMAP applied to expenditures.--Except as 
                provided in subparagraph (B), for fiscal years 
                beginning with fiscal year 2008, the Federal medical 
                assistance percentage (as determined under section 
                1905(b) without regard to clause (4) of such section) 
                shall be substituted for the enhanced FMAP under 
                subsection (a)(1) with respect to any expenditures for 
                providing child health assistance or health benefits 
                coverage for a targeted low-income child whose 
                effective family income would exceed 300 percent of the 
                poverty line but for the application of a general 
                exclusion of a block of income that is not determined 
                by type of expense or type of income.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                to any State that, on the date of enactment of the 
                Children's Health Insurance Program Reauthorization Act 
                of 2007, has an approved State plan amendment or waiver 
                to provide, or has enacted a State law to submit a 
                State plan amendment to provide, expenditures described 
                in such subparagraph under the State child health 
                plan.''.
    (b) Conforming Amendment.--Section 2105(a)(1) ( 42 U.S.C. 
1397dd(a)(1)) is amended, in the matter preceding subparagraph (A), by 
inserting ``or subsection (c)(8)'' after ``subparagraph (B)''.

SEC. 111. OPTION FOR QUALIFYING STATES TO RECEIVE THE ENHANCED PORTION 
              OF THE CHIP MATCHING RATE FOR MEDICAID COVERAGE OF 
              CERTAIN CHILDREN.

    Section 2105(g) (42 U.S.C. 1397ee(g)) is amended--
            (1) in paragraph (1)(A), by inserting ``subject to 
        paragraph (4),'' after ``Notwithstanding any other provision of 
        law,''; and
            (2) by adding at the end the following new paragraph:
            ``(4) Option for allotments for fiscal years 2008 through 
        2012.--
                    ``(A) Payment of enhanced portion of matching rate 
                for certain expenditures.--In the case of expenditures 
                described in subparagraph (B), a qualifying State (as 
                defined in paragraph (2)) may elect to be paid from the 
                State's allotment made under section 2104 for any of 
                fiscal years 2008 through 2012 (insofar as the 
                allotment is available to the State under subsections 
                (e) and (i) of such section) an amount each quarter 
                equal to the additional amount that would have been 
                paid to the State under title XIX with respect to such 
                expenditures if the enhanced FMAP (as determined under 
                subsection (b)) had been substituted for the Federal 
                medical assistance percentage (as defined in section 
                1905(b)).
                    ``(B) Expenditures described.--For purposes of 
                subparagraph (A), the expenditures described in this 
                subparagraph are expenditures made after the date of 
                the enactment of this paragraph and during the period 
                in which funds are available to the qualifying State 
                for use under subparagraph (A), for the provision of 
                medical assistance to individuals residing in the State 
                who are eligible for medical assistance under the State 
                plan under title XIX or under a waiver of such plan and 
                who have not attained age 19 (or, if a State has so 
                elected under the State plan under title XIX, age 20 or 
                21), and whose family income equals or exceeds 133 
                percent of the poverty line but does not exceed the 
                Medicaid applicable income level.''.

                   TITLE II--OUTREACH AND ENROLLMENT

SEC. 201. GRANTS FOR OUTREACH AND ENROLLMENT.

    (a) Grants.--Title XXI (42 U.S.C. 1397aa et seq.), as amended by 
section 107, is amended by adding at the end the following:

``SEC. 2113. GRANTS TO IMPROVE OUTREACH AND ENROLLMENT.

    ``(a) Outreach and Enrollment Grants; National Campaign.--
            ``(1) In general.--From the amounts appropriated under 
        subsection (g), subject to paragraph (2), the Secretary shall 
        award grants to eligible entities during the period of fiscal 
        years 2008 through 2012 to conduct outreach and enrollment 
        efforts that are designed to increase the enrollment and 
        participation of eligible children under this title and title 
        XIX.
            ``(2) Ten percent set aside for national enrollment 
        campaign.--An amount equal to 10 percent of such amounts shall 
        be used by the Secretary for expenditures during such period to 
        carry out a national enrollment campaign in accordance with 
        subsection (h).
    ``(b) Priority for Award of Grants.--
            ``(1) In general.--In awarding grants under subsection (a), 
        the Secretary shall give priority to eligible entities that--
                    ``(A) propose to target geographic areas with high 
                rates of--
                            ``(i) eligible but unenrolled children, 
                        including such children who reside in rural 
                        areas; or
                            ``(ii) racial and ethnic minorities and 
                        health disparity populations, including those 
                        proposals that address cultural and linguistic 
                        barriers to enrollment; and
                    ``(B) submit the most demonstrable evidence 
                required under paragraphs (1) and (2) of subsection 
                (c).
            ``(2) Ten percent set aside for outreach to indian 
        children.--An amount equal to 10 percent of the funds 
        appropriated under subsection (g) shall be used by the 
        Secretary to award grants to Indian Health Service providers 
        and urban Indian organizations receiving funds under title V of 
        the Indian Health Care Improvement Act (25 U.S.C. 1651 et seq.) 
        for outreach to, and enrollment of, children who are Indians.
    ``(c) Application.--An eligible entity that desires to receive a 
grant under subsection (a) shall submit an application to the Secretary 
in such form and manner, and containing such information, as the 
Secretary may decide. Such application shall include--
            ``(1) evidence demonstrating that the entity includes 
        members who have access to, and credibility with, ethnic or 
        low-income populations in the communities in which activities 
        funded under the grant are to be conducted;
            ``(2) evidence demonstrating that the entity has the 
        ability to address barriers to enrollment, such as lack of 
        awareness of eligibility, stigma concerns and punitive fears 
        associated with receipt of benefits, and other cultural 
        barriers to applying for and receiving child health assistance 
        or medical assistance;
            ``(3) specific quality or outcomes performance measures to 
        evaluate the effectiveness of activities funded by a grant 
        awarded under this section; and
            ``(4) an assurance that the eligible entity shall--
                    ``(A) conduct an assessment of the effectiveness of 
                such activities against the performance measures;
                    ``(B) cooperate with the collection and reporting 
                of enrollment data and other information in order for 
                the Secretary to conduct such assessments; and
                    ``(C) in the case of an eligible entity that is not 
                the State, provide the State with enrollment data and 
                other information as necessary for the State to make 
                necessary projections of eligible children and pregnant 
                women.
    ``(d) Dissemination of Enrollment Data and Information Determined 
From Effectiveness Assessments; Annual Report.--The Secretary shall--
            ``(1) make publicly available the enrollment data and 
        information collected and reported in accordance with 
        subsection (c)(4)(B); and
            ``(2) submit an annual report to Congress on the outreach 
        and enrollment activities conducted with funds appropriated 
        under this section.
    ``(e) Maintenance of Effort for States Awarded Grants; No State 
Match Required.--In the case of a State that is awarded a grant under 
this section--
            ``(1) the State share of funds expended for outreach and 
        enrollment activities under the State child health plan shall 
        not be less than the State share of such funds expended in the 
        fiscal year preceding the first fiscal year for which the grant 
        is awarded; and
            ``(2) no State matching funds shall be required for the 
        State to receive a grant under this section.
    ``(f) Definitions.--In this section:
            ``(1) Eligible entity.--The term `eligible entity' means 
        any of the following:
                    ``(A) A State with an approved child health plan 
                under this title.
                    ``(B) A local government.
                    ``(C) An Indian tribe or tribal consortium, a 
                tribal organization, an urban Indian organization 
                receiving funds under title V of the Indian Health Care 
                Improvement Act (25 U.S.C. 1651 et seq.), or an Indian 
                Health Service provider.
                    ``(D) A Federal health safety net organization.
                    ``(E) A national, State, local, or community-based 
                public or nonprofit private organization, including 
                organizations that use community health workers or 
                community-based doula programs.
                    ``(F) A faith-based organization or consortia, to 
                the extent that a grant awarded to such an entity is 
                consistent with the requirements of section 1955 of the 
                Public Health Service Act (42 U.S.C. 300x-65) relating 
                to a grant award to nongovernmental entities.
                    ``(G) An elementary or secondary school.
            ``(2) Federal health safety net organization.--The term 
        `Federal health safety net organization' means--
                    ``(A) a Federally-qualified health center (as 
                defined in section 1905(l)(2)(B));
                    ``(B) a hospital defined as a disproportionate 
                share hospital for purposes of section 1923;
                    ``(C) a covered entity described in section 
                340B(a)(4) of the Public Health Service Act (42 U.S.C. 
                256b(a)(4)); and
                    ``(D) any other entity or consortium that serves 
                children under a federally funded program, including 
                the special supplemental nutrition program for women, 
                infants, and children (WIC) established under section 
                17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786), 
                the Head Start and Early Head Start programs under the 
                Head Start Act (42 U.S.C. 9801 et seq.), the school 
                lunch program established under the Richard B. Russell 
                National School Lunch Act, and an elementary or 
                secondary school.
            ``(3) Indians; indian tribe; tribal organization; urban 
        indian organization.--The terms `Indian', `Indian tribe', 
        `tribal organization', and `urban Indian organization' have the 
        meanings given such terms in section 4 of the Indian Health 
        Care Improvement Act (25 U.S.C. 1603).
            ``(4) Community health worker.--The term `community health 
        worker' means an individual who promotes health or nutrition 
        within the community in which the individual resides--
                    ``(A) by serving as a liaison between communities 
                and health care agencies;
                    ``(B) by providing guidance and social assistance 
                to community residents;
                    ``(C) by enhancing community residents' ability to 
                effectively communicate with health care providers;
                    ``(D) by providing culturally and linguistically 
                appropriate health or nutrition education;
                    ``(E) by advocating for individual and community 
                health or nutrition needs; and
                    ``(F) by providing referral and followup services.
    ``(g) Appropriation.--There is appropriated, out of any money in 
the Treasury not otherwise appropriated, $100,000,000 for the period of 
fiscal years 2008 through 2012, to remain available until expended, for 
the purpose of awarding grants under this section. Amounts appropriated 
and paid under the authority of this section shall be in addition to 
amounts appropriated under section 2104 and paid to States in 
accordance with section 2105, including with respect to expenditures 
for outreach activities in accordance with subsections (a)(1)(D)(iii) 
and (c)(2)(C) of that section.
    ``(h) National Enrollment Campaign.--From the amounts made 
available under subsection (a)(2), the Secretary shall develop and 
implement a national enrollment campaign to improve the enrollment of 
underserved child populations in the programs established under this 
title and title XIX. Such campaign may include--
            ``(1) the establishment of partnerships with the Secretary 
        of Education and the Secretary of Agriculture to develop 
        national campaigns to link the eligibility and enrollment 
        systems for the assistance programs each Secretary administers 
        that often serve the same children;
            ``(2) the integration of information about the programs 
        established under this title and title XIX in public health 
        awareness campaigns administered by the Secretary;
            ``(3) increased financial and technical support for 
        enrollment hotlines maintained by the Secretary to ensure that 
        all States participate in such hotlines;
            ``(4) the establishment of joint public awareness outreach 
        initiatives with the Secretary of Education and the Secretary 
        of Labor regarding the importance of health insurance to 
        building strong communities and the economy;
            ``(5) the development of special outreach materials for 
        Native Americans or for individuals with limited English 
        proficiency; and
            ``(6) such other outreach initiatives as the Secretary 
        determines would increase public awareness of the programs 
        under this title and title XIX.''.
    (b) Enhanced Administrative Funding for Translation or 
Interpretation Services Under CHIP.--Section 2105(a)(1) (42 U.S.C. 
1397ee(a)(1)), as amended by section 603, is amended--
            (1) in the matter preceding subparagraph (A), by inserting 
        ``(or, in the case of expenditures described in subparagraph 
        (D)(iv), the higher of 75 percent or the sum of the enhanced 
        FMAP plus 5 percentage points)'' after ``enhanced FMAP''; and
            (2) in subparagraph (D)--
                    (A) in clause (iii), by striking ``and'' at the 
                end;
                    (B) by redesignating clause (iv) as clause (v); and
                    (C) by inserting after clause (iii) the following 
                new clause:
                            ``(iv) for translation or interpretation 
                        services in connection with the enrollment and 
                        use of services under this title by individuals 
                        for whom English is not their primary language 
                        (as found necessary by the Secretary for the 
                        proper and efficient administration of the 
                        State plan); and''.
    (c) Nonapplication of Administrative Expenditures Cap.--Section 
2105(c)(2) (42 U.S.C. 1397ee(c)(2)) is amended by adding at the end the 
following:
                    ``(C) Nonapplication to certain expenditures.--The 
                limitation under subparagraph (A) shall not apply with 
                respect to the following expenditures:
                            ``(i) Expenditures funded under section 
                        2113.--Expenditures for outreach and enrollment 
                        activities funded under a grant awarded to the 
                        State under section 2113.''.

SEC. 202. INCREASED OUTREACH AND ENROLLMENT OF INDIANS.

    (a) In General.--Section 1139 (42 U.S.C. 1320b-9) is amended to 
read as follows:

``SEC. 1139. IMPROVED ACCESS TO, AND DELIVERY OF, HEALTH CARE FOR 
              INDIANS UNDER TITLES XIX AND XXI.

    ``(a) Agreements With States for Medicaid and CHIP Outreach On or 
Near Reservations To Increase the Enrollment of Indians in Those 
Programs.--
            ``(1) In general.--In order to improve the access of 
        Indians residing on or near a reservation to obtain benefits 
        under the Medicaid and State children's health insurance 
        programs established under titles XIX and XXI, the Secretary 
        shall encourage the State to take steps to provide for 
        enrollment on or near the reservation. Such steps may include 
        outreach efforts such as the outstationing of eligibility 
        workers, entering into agreements with the Indian Health 
        Service, Indian Tribes, Tribal Organizations, and Urban Indian 
        Organizations to provide outreach, education regarding 
        eligibility and benefits, enrollment, and translation services 
        when such services are appropriate.
            ``(2) Construction.--Nothing in paragraph (1) shall be 
        construed as affecting arrangements entered into between States 
        and the Indian Health Service, Indian Tribes, Tribal 
        Organizations, or Urban Indian Organizations for such Service, 
        Tribes, or Organizations to conduct administrative activities 
        under such titles.
    ``(b) Requirement To Facilitate Cooperation.--The Secretary, acting 
through the Centers for Medicare & Medicaid Services, shall take such 
steps as are necessary to facilitate cooperation with, and agreements 
between, States and the Indian Health Service, Indian Tribes, Tribal 
Organizations, or Urban Indian Organizations with respect to the 
provision of health care items and services to Indians under the 
programs established under title XIX or XXI.
    ``(c) Definition of Indian; Indian Tribe; Indian Health Program; 
Tribal Organization; Urban Indian Organization.--In this section, the 
terms `Indian', `Indian Tribe', `Indian Health Program', `Tribal 
Organization', and `Urban Indian Organization' have the meanings given 
those terms in section 4 of the Indian Health Care Improvement Act.''.
    (b) Nonapplication of 10 Percent Limit on Outreach and Certain 
Other Expenditures.--Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)(C)), 
as added by section 201(c), is amended by adding at the end the 
following new clause:
                            ``(ii) Expenditures to increase outreach 
                        to, and the enrollment of, indian children 
                        under this title and title xix.--Expenditures 
                        for outreach activities to families of Indian 
                        children likely to be eligible for child health 
                        assistance under the plan or medical assistance 
                        under the State plan under title XIX (or under 
                        a waiver of such plan), to inform such families 
                        of the availability of, and to assist them in 
                        enrolling their children in, such plans, 
                        including such activities conducted under 
                        grants, contracts, or agreements entered into 
                        under section 1139(a).''.

SEC. 203. DEMONSTRATION PROGRAM TO PERMIT STATES TO RELY ON FINDINGS BY 
              AN EXPRESS LANE AGENCY TO DETERMINE COMPONENTS OF A 
              CHILD'S ELIGIBILITY FOR MEDICAID OR CHIP.

    (a) Requirement To Conduct Demonstration Program.--
            (1) In general.--The Secretary shall establish a 3-year 
        demonstration program under which up to 10 States shall be 
        authorized to rely on a finding made within the preceding 12 
        months by an Express Lane agency to determine whether a child 
        has met 1 or more of the eligibility requirements, such as 
        income, assets or resources, citizenship status, or other 
        criteria, necessary to determine the child's initial 
        eligibility, eligibility redetermination, or renewal of 
        eligibility, for medical assistance under the State Medicaid 
        plan or child health assistance under the State CHIP plan. A 
        State selected to participate in the demonstration program--
                    (A) shall not be required to direct a child (or a 
                child's family) to submit information or documentation 
                previously submitted by the child or family to an 
                Express Lane agency that the State relies on for its 
                Medicaid or CHIP eligibility determination; and
                    (B) may rely on information from an Express Lane 
                agency when evaluating a child's eligibility for 
                medical assistance under the State Medicaid plan or 
                child health assistance under the State CHIP plan 
                without a separate, independent confirmation of the 
                information at the time of enrollment, redetermination, 
                or renewal.
            (2) Payments to states.--From the amount appropriated under 
        paragraph (1) of subsection (f), after the application of 
        paragraph (2) of that subsection, the Secretary shall pay the 
        States selected to participate in the demonstration program 
        such sums as the Secretary shall determine for expenditures 
        made by the State for systems upgrades and implementation of 
        the demonstration program. In no event shall a payment be made 
        to a State from the amount appropriated under subsection (f) 
        for any expenditures incurred for providing medical assistance 
        or child health assistance to a child enrolled in the State 
        Medicaid plan or the State CHIP plan through reliance on a 
        finding made by an Express Lane agency.
    (b) Requirements; Options for Application.--
            (1) State requirements.--A State selected to participate in 
        the demonstration program established under this section may 
        rely on a finding of an Express Lane agency only if the 
        following conditions are met:
                    (A) Requirement to determine eligibility using 
                regular procedures if child is first found 
                ineligible.--If reliance on a finding from an Express 
                Lane agency results in a child not being found eligible 
                for the State Medicaid plan or the State CHIP plan, the 
                State would be required to determine eligibility under 
                such plan using its regular procedures.
                    (B) Notice.--The State shall inform the families 
                (especially those whose children are enrolled in the 
                State CHIP plan) that they may qualify for lower 
                premium payments or more comprehensive health coverage 
                under the State Medicaid plan if the family's income 
                were directly evaluated for an eligibility 
                determination by the State Medicaid agency, and that, 
                at the family's option, the family may seek an 
                eligibility determination by the State Medicaid agency.
                    (C) Compliance with department of homeland security 
                procedures.--The State may rely on an Express Lane 
                agency finding that a child is a qualified alien as 
                long as the Express Lane agency complies with guidance 
                and regulatory procedures issued by the Secretary of 
                Homeland Security for eligibility determinations of 
                qualified aliens (as defined in subsections (b) and (c) 
                of section 431 of the Personal Responsibility and Work 
                Opportunity Reconciliation Act of 1996 (8 U.S.C. 
                1641)).
                    (D) Verification of citizenship or nationality 
                status.--The State shall satisfy the requirements of 
                section 1902(a)(46)(B) or 2105(c)(9) of the Social 
                Security Act, as applicable (and as added by section 
                301 of this Act) for verifications of citizenship or 
                nationality status.
                    (E) Coding; application to enrollment error 
                rates.--
                            (i) In general.--The State agrees to--
                                    (I) assign such codes as the 
                                Secretary shall require to the children 
                                who are enrolled in the State Medicaid 
                                plan or the State CHIP plan through 
                                reliance on a finding made by an 
                                Express Lane agency for the duration of 
                                the State's participation in the 
                                demonstration program;
                                    (II) annually provide the Secretary 
                                with a statistically valid sample (that 
                                is approved by Secretary) of the 
                                children enrolled in such plans through 
                                reliance on such a finding by 
                                conducting a full Medicaid eligibility 
                                review of the children identified for 
                                such sample for purposes of determining 
                                an eligibility error rate with respect 
                                to the enrollment of such children;
                                    (III) submit the error rate 
                                determined under subclause (II) to the 
                                Secretary;
                                    (IV) if such error rate exceeds 3 
                                percent for either of the first 2 
                                fiscal years in which the State 
                                participates in the demonstration 
                                program, demonstrate to the 
                                satisfaction of the Secretary the 
                                specific corrective actions implemented 
                                by the State to improve upon such error 
                                rate; and
                                    (V) if such error rate exceeds 3 
                                percent for any fiscal year in which 
                                the State participates in the 
                                demonstration program, a reduction in 
                                the amount otherwise payable to the 
                                State under section 1903(a) of the 
                                Social Security Act (42 Secretary 
                                1396b(a)) for quarters for that fiscal 
                                year, equal to the total amount of 
                                erroneous excess payments determined 
                                for the fiscal year only with respect 
                                to the children included in the sample 
                                for the fiscal year that are in excess 
                                of a 3 percent error rate with respect 
                                to such children.
                            (ii) No punitive action based on error 
                        rate.--The Secretary shall not apply the error 
                        rate derived from the sample under clause (i) 
                        to the entire population of children enrolled 
                        in the State Medicaid plan or the State CHIP 
                        plan through reliance on a finding made by an 
                        Express Lane agency, or to the population of 
                        children enrolled in such plans on the basis of 
                        the State's regular procedures for determining 
                        eligibility, or penalize the State on the basis 
                        of such error rate in any manner other than the 
                        reduction of payments provided for under clause 
                        (i)(V).
                            (iii) Rule of construction.--Nothing in 
                        this section shall be construed as relieving a 
                        State that participates in the demonstration 
                        program established under this section from 
                        being subject to a penalty under section 
                        1903(u) of the Social Security Act (42 U.S.C. 
                        1396b(u)) for payments made under the State 
                        Medicaid plan with respect to ineligible 
                        individuals and families that are determined to 
                        exceed the error rate permitted under that 
                        section (as determined without regard to the 
                        error rate determined under clause (i)(II)).
            (2) State options for application.--A State selected to 
        participate in the demonstration program may elect to apply any 
        of the following:
                    (A) Satisfaction of chip screen and enroll 
                requirements.--If the State relies on a finding of an 
                Express Lane agency for purposes of determining 
                eligibility under the State CHIP plan, the State may 
                meet the screen and enroll requirements imposed under 
                subparagraphs (A) and (B) of section 2102(b)(3) of the 
                Social Security Act (42 U.S.C. 1397bb(b)(3)) by using 
                any of the following:
                            (i) Establishing a threshold percentage of 
                        the poverty line that is 30 percentage points 
                        (or such other higher number of percentage 
                        points) as the State determines reflects the 
                        income methodologies of the program 
                        administered by the Express Lane Agency and the 
                        State Medicaid plan.
                            (ii) Providing that a child satisfies all 
                        income requirements for eligibility under the 
                        State Medicaid plan.
                            (iii) Providing that a child has a family 
                        income that exceeds the Medicaid applicable 
                        income level.
                    (B) Presumptive eligibility.--The State may provide 
                for presumptive eligibility under the State CHIP plan 
                for a child who, based on an eligibility determination 
                of an income finding from an Express Lane agency, would 
                qualify for child health assistance under the State 
                CHIP plan. During the period of presumptive 
                eligibility, the State may determine the child's 
                eligibility for child health assistance under the State 
                CHIP plan based on telephone contact with family 
                members, access to data available in electronic or 
                paper format, or other means that minimize to the 
                maximum extent feasible the burden on the family.
                    (C) Automatic enrollment.--
                            (i) In general.--The State may initiate and 
                        determine eligibility for medical assistance 
                        under the State Medicaid plan or for child 
                        health assistance under the State CHIP plan 
                        without a program application from, or on 
                        behalf of, the child based on data obtained 
                        from sources other than the child (or the 
                        child's family), but a child can only be 
                        automatically enrolled in the State Medicaid 
                        plan or the State CHIP plan if the child or the 
                        family affirmatively consents to being enrolled 
                        through affirmation and signature on an Express 
                        Lane agency application.
                            (ii) Information requirement.--A State that 
                        elects the option under clause (i) shall have 
                        procedures in place to inform the child or the 
                        child's family of the services that will be 
                        covered under the State Medicaid plan or the 
                        State CHIP plan (as applicable), appropriate 
                        methods for using such services, premium or 
                        other cost sharing charges (if any) that apply, 
                        medical support obligations created by the 
                        enrollment (if applicable), and the actions the 
                        child or the child's family must take to 
                        maintain enrollment and renew coverage.
                            (iii) Option to waive signatures.--The 
                        State may waive any signature requirements for 
                        enrollment for a child who consents to, or on 
                        whose behalf consent is provided for, 
                        enrollment in the State Medicaid plan or the 
                        State CHIP plan.
            (3) Signature requirements.--In the case of a State 
        selected to participate in the demonstration program--
                    (A) no signature under penalty of perjury shall be 
                required on an application form for medical assistance 
                under the State Medicaid plan or child health 
                assistance under the State CHIP plan to attest to any 
                element of the application for which eligibility is 
                based on information received from an Express Lane 
                agency or a source other than an applicant; and
                    (B) any signature requirement for determination of 
                an application for medical assistance under the State 
                Medicaid plan or child health assistance under the 
                State CHIP plan may be satisfied through an electronic 
                signature.
            (4) Rules of construction.--Nothing in this subsection 
        shall be construed to--
                    (A) relieve a State of the obligation under section 
                1902(a)(5) of the Social Security Act (42 U.S.C. 
                1396a(a)(5)) to determine eligibility for medical 
                assistance under the State Medicaid plan; or
                    (B) prohibit any State options otherwise permitted 
                under Federal law (without regard to this paragraph or 
                the demonstration program established under this 
                section) that are intended to increase the enrollment 
                of eligible children for medical assistance under the 
                State Medicaid plan or child health assistance under 
                the State CHIP plan, including options related to 
                outreach, enrollment, applications, or the 
                determination or redetermination of eligibility.
    (c) Limited Waiver of Other Applicable Requirements.--
            (1) Social security act.--The Secretary shall waive only 
        such requirements of the Social Security Act as the Secretary 
        determines are necessary to carry out the demonstration program 
        established under this section.
            (2) Authorization for participating states to receive 
        certain data directly relevant to determining eligibility and 
        correct amount of assistance.--For provisions relating to the 
        authority of States participating in the demonstration program 
        to receive certain data directly, see section 204(c).
    (d) Evaluation and Report.--
            (1) Evaluation.--The Secretary shall conduct, by grant, 
        contract, or interagency agreement, a comprehensive, 
        independent evaluation of the demonstration program established 
        under this section. Such evaluation shall include an analysis 
        of the effectiveness of the program, and shall include--
                    (A) obtaining a statistically valid sample of the 
                children who were enrolled in the State Medicaid plan 
                or the State CHIP plan through reliance on a finding 
                made by an Express Lane agency and determining the 
                percentage of children who were erroneously enrolled in 
                such plans;
                    (B) determining whether enrolling children in such 
                plans through reliance on a finding made by an Express 
                Lane agency improves the ability of a State to identify 
                and enroll low-income, uninsured children who are 
                eligible but not enrolled in such plans;
                    (C) evaluating the administrative costs or savings 
                related to identifying and enrolling children in such 
                plans through reliance on such findings, and the extent 
                to which such costs differ from the costs that the 
                State otherwise would have incurred to identify and 
                enroll low-income, uninsured children who are eligible 
                but not enrolled in such plans; and
                    (D) any recommendations for legislative or 
                administrative changes that would improve the 
                effectiveness of enrolling children in such plans 
                through reliance on such findings.
            (2) Report to congress.--Not later than September 30, 2012, 
        the Secretary shall submit a report to Congress on the results 
        of the evaluation of the demonstration program established 
        under this section.
    (e) Definitions.--In this section:
            (1) Child; children.--With respect to a State selected to 
        participate in the demonstration program established under this 
        section, the terms ``child'' and ``children'' have the meanings 
        given such terms for purposes of the State plans under titles 
        XIX and XXI of the Social Security Act.
            (2) Express lane agency.--
                    (A) In general.--The term ``Express Lane agency'' 
                means a public agency that--
                            (i) is determined by the State Medicaid 
                        agency or the State CHIP agency (as applicable) 
                        to be capable of making the determinations of 1 
                        or more eligibility requirements described in 
                        subsection (a)(1);
                            (ii) is identified in the State Medicaid 
                        plan or the State CHIP plan; and
                            (iii) notifies the child's family--
                                    (I) of the information which shall 
                                be disclosed in accordance with this 
                                section;
                                    (II) that the information disclosed 
                                will be used solely for purposes of 
                                determining eligibility for medical 
                                assistance under the State Medicaid 
                                plan or for child health assistance 
                                under the State CHIP plan; and
                                    (III) that the family may elect to 
                                not have the information disclosed for 
                                such purposes; and
                            (iv) enters into, or is subject to, an 
                        interagency agreement to limit the disclosure 
                        and use of the information disclosed.
                    (B) Inclusion of specific public agencies.--Such 
                term includes the following:
                            (i) A public agency that determines 
                        eligibility for assistance under any of the 
                        following:
                                    (I) The temporary assistance for 
                                needy families program funded under 
                                part A of title IV of the Social 
                                Security Act (42 U.S.C. 601 et seq.).
                                    (II) A State program funded under 
                                part D of title IV of such Act (42 
                                U.S.C. 651 et seq.).
                                    (III) The State Medicaid plan.
                                    (IV) The State CHIP plan.
                                    (V) The Food Stamp Act of 1977 (7 
                                U.S.C. 2011 et seq.).
                                    (VI) The Head Start Act (42 U.S.C. 
                                9801 et seq.).
                                    (VII) The Richard B. Russell 
                                National School Lunch Act (42 U.S.C. 
                                1751 et seq.).
                                    (VIII) The Child Nutrition Act of 
                                1966 (42 U.S.C. 1771 et seq.).
                                    (IX) The Child Care and Development 
                                Block Grant Act of 1990 (42 U.S.C. 9858 
                                et seq.).
                                    (X) The Stewart B. McKinney 
                                Homeless Assistance Act (42 U.S.C. 
                                11301 et seq.).
                                    (XI) The United States Housing Act 
                                of 1937 (42 U.S.C. 1437 et seq.).
                                    (XII) The Native American Housing 
                                Assistance and Self-Determination Act 
                                of 1996 (25 U.S.C. 4101 et seq.).
                            (ii) A State-specified governmental agency 
                        that has fiscal liability or legal 
                        responsibility for the accuracy of the 
                        eligibility determination findings relied on by 
                        the State.
                            (iii) A public agency that is subject to an 
                        interagency agreement limiting the disclosure 
                        and use of the information disclosed for 
                        purposes of determining eligibility under the 
                        State Medicaid plan or the State CHIP plan.
                    (C) Exclusions.--Such term does not include an 
                agency that determines eligibility for a program 
                established under the Social Services Block Grant 
                established under title XX of the Social Security Act 
                (42 U.S.C. 1397 et seq.) or a private, for-profit 
                organization.
                    (D) Rules of construction.--Nothing in this 
                paragraph shall be construed as--
                            (i) affecting the authority of a State 
                        Medicaid agency to enter into contracts with 
                        nonprofit and for-profit agencies to administer 
                        the Medicaid application process;
                            (ii) exempting a State Medicaid agency from 
                        complying with the requirements of section 
                        1902(a)(4) of the Social Security Act (relating 
                        to merit-based personnel standards for 
                        employees of the State Medicaid agency and 
                        safeguards against conflicts of interest); or
                            (iii) authorizing a State Medicaid agency 
                        that participates in the demonstration program 
                        established under this section to use the 
                        Express Lane option to avoid complying with 
                        such requirements for purposes of making 
                        eligibility determinations under the State 
                        Medicaid plan.
            (3) Medicaid applicable income level.--With respect to a 
        State, the term ``Medicaid applicable income level'' has the 
        meaning given that term for purposes of such State under 
        section 2110(b)(4) of the Social Security Act (42 U.S.C. 
        1397jj(4)).
            (4) Poverty line.--The term ``poverty line'' has the 
        meaning given that term in section 2110(c)(5) of the Social 
        Security Act (42 U.S.C. 1397jj(c)(5)).
            (5) State.--The term ``State'' means 1 of the 50 States or 
        the District of Columbia.
            (6) State chip agency.--The term ``State CHIP agency'' 
        means the State agency responsible for administering the State 
        CHIP plan.
            (7) State chip plan.--The term ``State CHIP plan'' means 
        the State child health plan established under title XXI of the 
        Social Security Act (42 U.S.C. 1397aa et seq.), and includes 
        any waiver of such plan.
            (8) State medicaid agency.--The term ``State Medicaid 
        agency'' means the State agency responsible for administering 
        the State Medicaid plan.
            (9) State medicaid plan.--The term ``State Medicaid plan'' 
        means the State plan established under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.), and includes any waiver 
        of such plan.
    (f) Appropriation.--
            (1) Operational funds.--Out of any funds in the Treasury 
        not otherwise appropriated, there is appropriated to the 
        Secretary to carry out the demonstration program established 
        under this section, $49,000,000 for the period of fiscal years 
        2008 through 2012.
            (2) Evaluation funds.--$5,000,000 of the funds appropriated 
        under paragraph (1) shall be used to conduct the evaluation 
        required under subsection (d).
            (3) Budget authority.--Paragraph (1) constitutes budget 
        authority in advance of appropriations Act and represents the 
        obligation of the Federal Government to provide for the payment 
        to States selected to participate in the demonstration program 
        established under this section of the amounts provided under 
        such paragraph (after the application of paragraph (2)).

SEC. 204. AUTHORIZATION OF CERTAIN INFORMATION DISCLOSURES TO SIMPLIFY 
              HEALTH COVERAGE DETERMINATIONS.

    (a) Authorization of Information Disclosure.--Title XIX (42 U.S.C. 
1396 et seq.) is amended--
            (1) by redesignating section 1939 as section 1940; and
            (2) by inserting after section 1938 the following new 
        section:

            ``authorization to receive pertinent information

    ``Sec. 1939.  (a) In General.--Notwithstanding any other provision 
of law, a Federal or State agency or private entity in possession of 
the sources of data directly relevant to eligibility determinations 
under this title (including eligibility files, information described in 
paragraph (2) or (3) of section 1137(a), vital records information 
about births in any State, and information described in sections 453(i) 
and 1902(a)(25)(I)) is authorized to convey such data or information to 
the State agency administering the State plan under this title, but 
only if such conveyance meets the requirements of subsection (b).
    ``(b) Requirements for Conveyance.--Data or information may be 
conveyed pursuant to this section only if the following requirements 
are met:
            ``(1) The child whose circumstances are described in the 
        data or information (or such child's parent, guardian, 
        caretaker relative, or authorized representative) has either 
        provided advance consent to disclosure or has not objected to 
        disclosure after receiving advance notice of disclosure and a 
        reasonable opportunity to object.
            ``(2) Such data or information are used solely for the 
        purposes of--
                    ``(A) identifying children who are eligible or 
                potentially eligible for medical assistance under this 
                title and enrolling (or attempting to enroll) such 
                children in the State plan; and
                    ``(B) verifying the eligibility of children for 
                medical assistance under the State plan.
            ``(3) An interagency or other agreement, consistent with 
        standards developed by the Secretary--
                    ``(A) prevents the unauthorized use, disclosure, or 
                modification of such data and otherwise meets 
                applicable Federal requirements for safeguarding 
                privacy and data security; and
                    ``(B) requires the State agency administering the 
                State plan to use the data and information obtained 
                under this section to seek to enroll children in the 
                plan.
    ``(c) Criminal Penalty.--A person described in subsection (a) who 
publishes, divulges, discloses, or makes known in any manner, or to any 
extent, not authorized by Federal law, any information obtained under 
this section shall be fined not more than $1,000 or imprisoned not more 
than 1 year, or both, for each such unauthorized activity.
    ``(d) Rule of Construction.--The limitations and requirements that 
apply to disclosure pursuant to this section shall not be construed to 
prohibit the conveyance or disclosure of data or information otherwise 
permitted under Federal law (without regard to this section).''.
    (b) Conforming Amendment to Title XXI.--Section 2107(e)(1) (42 
U.S.C. 1397gg(e)(1)) is amended by adding at the end the following new 
subparagraph:
                    ``(E) Section 1939 (relating to authorization to 
                receive data directly relevant to eligibility 
                determinations).''.
    (c) Authorization for States Participating in the Express Lane 
Demonstration Program To Receive Certain Data Directly Relevant To 
Determining Eligibility and Correct Amount of Assistance.--Only in the 
case of a State selected to participate in the Express Lane 
demonstration program established under section 203, the Secretary 
shall enter into such agreements as are necessary to permit such a 
State to receive data directly relevant to eligibility determinations 
and determining the correct amount of benefits under the State CHIP 
plan or the State Medicaid plan (as such terms are defined in 
paragraphs (7) and (9) section 203(e)) from the following:
            (1) The National Directory of New Hires established under 
        section 453(i) of the Social Security Act (42 U.S.C. 653(i)).
            (2) The National Income Data collected by the Commissioner 
        of Social Security from information described in subparagraphs 
        (A) and (B) of section 6103(l)(7) of the Internal Revenue Code 
        of 1986, in accordance with the requirements of that section.
            (3) Data regarding enrollment in insurance that may help to 
        facilitate outreach and enrollment under the State Medicaid 
        plan, the State CHIP plan, and such other programs as the 
        Secretary may specify.

               TITLE III--REDUCING BARRIERS TO ENROLLMENT

SEC. 301. VERIFICATION OF DECLARATION OF CITIZENSHIP OR NATIONALITY FOR 
              PURPOSES OF ELIGIBILITY FOR MEDICAID AND CHIP.

    (a) State Option To Verify Declaration of Citizenship or 
Nationality for Purposes of Eligibility for Medicaid Through 
Verification of Name and Social Security Number.--
            (1) Alternative to documentation requirement.--
                    (A) In general.--Section 1902 (42 U.S.C. 1396a) is 
                amended--
                            (i) in subsection (a)(46)--
                                    (I) by inserting ``(A)'' after 
                                ``(46)'';
                                    (II) by adding ``and'' after the 
                                semicolon; and
                                    (III) by adding at the end the 
                                following new subparagraph:
            ``(B) provide, with respect to an individual declaring to 
        be a citizen or national of the United States for purposes of 
        establishing eligibility under this title, that the State shall 
        satisfy the requirements of--
                    ``(i) section 1903(x); or
                    ``(ii) subsection (dd);''; and
                            (ii) by adding at the end the following new 
                        subsection:
    ``(dd)(1) For purposes of section 1902(a)(46)(B)(ii), the 
requirements of this subsection with respect to an individual declaring 
to be a citizen or national of the United States for purposes of 
establishing eligibility under this title, are, in lieu of requiring 
the individual to present satisfactory documentary evidence of 
citizenship or nationality under section 1903(x) (if the individual is 
not described in paragraph (2) of that section), as follows:
            ``(A) The State submits the name and social security number 
        of the individual to the Commissioner of Social Security as 
        part of the plan established under paragraph (2).
            ``(B) If the State receives notice from the Commissioner of 
        Social Security that the name or social security number of the 
        individual is invalid, the State--
                    ``(i) notifies the individual of such fact;
                    ``(ii) provides the individual with an opportunity 
                to cure the invalid determination with the Commissioner 
                of Social Security, followed by a period of 90 days 
                from the date on which the notice required under clause 
                (i) is received by the individual to present 
                satisfactory documentary evidence of citizenship or 
                nationality (as defined in section 1903(x)(3)); and
                    ``(iii) disenrolls the individual from the State 
                plan under this title within 30 days after the end of 
                such 90-day period if no such documentary evidence is 
                presented.
    ``(2)(A) Each State electing to satisfy the requirements of this 
subsection for purposes of section 1902(a)(46)(B) shall establish a 
program under which the State submits each month to the Commissioner of 
Social Security for verification the name and social security number of 
each individual enrolled in the State plan under this title that month 
who has attained the age of 1 before the date of the enrollment.
    ``(B) In establishing the State program under this paragraph, the 
State may enter into an agreement with the Commissioner of Social 
Security to provide for the electronic submission and verification of 
the name and social security number of an individual before the 
individual is enrolled in the State plan.
    ``(3)(A) The State agency implementing the plan approved under this 
title shall, at such times and in such form as the Secretary may 
specify, provide information on the percentage each month that the 
invalid names and numbers submitted bears to the total submitted for 
verification.
    ``(B) If, for any fiscal year, the average monthly percentage 
determined under subparagraph (A) is greater than 7 percent--
            ``(i) the State shall develop and adopt a corrective plan 
        to review its procedures for verifying the identities of 
        individuals seeking to enroll in the State plan under this 
        title and to identify and implement changes in such procedures 
        to improve their accuracy; and
            ``(ii) pay to the Secretary an amount equal to the amount 
        which bears the same ratio to the total payments under the 
        State plan for the fiscal year for providing medical assistance 
        to individuals who provided invalid information as the number 
        of individuals with invalid information in excess of 7 percent 
        of such total submitted bears to the total number of 
        individuals with invalid information.
    ``(C) The Secretary may waive, in certain limited cases, all or 
part of the payment under subparagraph (B)(ii) if the State is unable 
to reach the allowable error rate despite a good faith effort by such 
State.
    ``(D) This paragraph shall not apply to a State for a fiscal year 
if there is an agreement described in paragraph (2)(B) in effect as of 
the close of the fiscal year.
    ``(4) Nothing in this subsection shall affect the rights of any 
individual under this title to appeal any disenrollment from a State 
plan.''.
                    (B) Costs of implementing and maintaining system.--
                Section 1903(a)(3) (42 U.S.C. 1396b(a)(3)) is amended--
                            (i) by striking ``plus'' at the end of 
                        subparagraph (E) and inserting ``and'', and
                            (ii) by adding at the end the following new 
                        subparagraph:
                    ``(F)(i) 90 percent of the sums expended during the 
                quarter as are attributable to the design, development, 
                or installation of such mechanized verification and 
                information retrieval systems as the Secretary 
                determines are necessary to implement section 1902(dd) 
                (including a system described in paragraph (2)(B) 
                thereof), and
                    ``(ii) 75 percent of the sums expended during the 
                quarter as are attributable to the operation of systems 
                to which clause (i) applies, plus''.
            (2) Limitation on waiver authority.--Notwithstanding any 
        provision of section 1115 of the Social Security Act (42 U.S.C. 
        1315), or any other provision of law, the Secretary may not 
        waive the requirements of section 1902(a)(46)(B) of such Act 
        (42 U.S.C. 1396a(a)(46)(B)) with respect to a State.
            (3) Conforming amendments.--Section 1903 (42 U.S.C. 1396b) 
        is amended--
                    (A) in subsection (i)(22), by striking ``subsection 
                (x)'' and inserting ``section 1902(a)(46)(B)''; and
                    (B) in subsection (x)(1), by striking ``subsection 
                (i)(22)'' and inserting ``section 1902(a)(46)(B)(i)''.
    (b) Clarification of Requirements Relating to Presentation of 
Satisfactory Documentary Evidence of Citizenship or Nationality.--
            (1) Acceptance of documentary evidence issued by a 
        federally recognized indian tribe.--Section 1903(x)(3)(B) (42 
        U.S.C. 1396b(x)(3)(B)) is amended--
                    (A) by redesignating clause (v) as clause (vi); and
                    (B) by inserting after clause (iv), the following 
                new clause:
            ``(v)(I) Except as provided in subclause (II), a document 
        issued by a federally recognized Indian tribe evidencing 
        membership or enrollment in, or affiliation with, such tribe 
        (such as a tribal enrollment card or certificate of degree of 
        Indian blood).
            ``(II) With respect to those federally recognized Indian 
        tribes located within States having an international border 
        whose membership includes individuals who are not citizens of 
        the United States, the Secretary shall, after consulting with 
        such tribes, issue regulations authorizing the presentation of 
        such other forms of documentation (including tribal 
        documentation, if appropriate) that the Secretary determines to 
        be satisfactory documentary evidence of citizenship or 
        nationality for purposes of satisfying the requirement of this 
        subsection.''.
            (2) Requirement to provide reasonable opportunity to 
        present satisfactory documentary evidence.--Section 1903(x) (42 
        U.S.C. 1396b(x)) is amended by adding at the end the following 
        new paragraph:
    ``(4) In the case of an individual declaring to be a citizen or 
national of the United States with respect to whom a State requires the 
presentation of satisfactory documentary evidence of citizenship or 
nationality under section 1902(a)(46)(B)(i), the individual shall be 
provided at least the reasonable opportunity to present satisfactory 
documentary evidence of citizenship or nationality under this 
subsection as is provided under clauses (i) and (ii) of section 
1137(d)(4)(A) to an individual for the submittal to the State of 
evidence indicating a satisfactory immigration status.''.
            (3) Children born in the united states to mothers eligible 
        for medicaid.--
                    (A) Clarification of rules.--Section 1903(x) (42 
                U.S.C. 1396b(x)), as amended by paragraph (2), is 
                amended--
                            (i) in paragraph (2)--
                                    (I) in subparagraph (C), by 
                                striking ``or'' at the end;
                                    (II) by redesignating subparagraph 
                                (D) as subparagraph (E); and
                                    (III) by inserting after 
                                subparagraph (C) the following new 
                                subparagraph:
            ``(D) pursuant to the application of section 1902(e)(4) 
        (and, in the case of an individual who is eligible for medical 
        assistance on such basis, the individual shall be deemed to 
        have provided satisfactory documentary evidence of citizenship 
        or nationality and shall not be required to provide further 
        documentary evidence on any date that occurs during or after 
        the period in which the individual is eligible for medical 
        assistance on such basis); or''; and
                            (ii) by adding at the end the following new 
                        paragraph:
    ``(5) Nothing in subparagraph (A) or (B) of section 1902(a)(46), 
the preceding paragraphs of this subsection, or the Deficit Reduction 
Act of 2005, including section 6036 of such Act, shall be construed as 
changing the requirement of section 1902(e)(4) that a child born in the 
United States to an alien mother for whom medical assistance for the 
delivery of such child is available as treatment of an emergency 
medical condition pursuant to subsection (v) shall be deemed eligible 
for medical assistance during the first year of such child's life.''.
                    (B) State requirement to issue separate 
                identification number.--Section 1902(e)(4) (42 U.S.C. 
                1396a(e)(4)) is amended by adding at the end the 
                following new sentence: ``Notwithstanding the preceding 
                sentence, in the case of a child who is born in the 
                United States to an alien mother for whom medical 
                assistance for the delivery of the child is made 
                available pursuant to section 1903(v), the State 
                immediately shall issue a separate identification 
                number for the child upon notification by the facility 
                at which such delivery occurred of the child's 
                birth.''.
            (4) Technical amendments.--Section 1903(x)(2) (42 U.S.C. 
        1396b(x)) is amended--
                    (A) in subparagraph (B)--
                            (i) by realigning the left margin of the 
                        matter preceding clause (i) 2 ems to the left; 
                        and
                            (ii) by realigning the left margins of 
                        clauses (i) and (ii), respectively, 2 ems to 
                        the left; and
                    (B) in subparagraph (C)--
                            (i) by realigning the left margin of the 
                        matter preceding clause (i) 2 ems to the left; 
                        and
                            (ii) by realigning the left margins of 
                        clauses (i) and (ii), respectively, 2 ems to 
                        the left.
    (c) Application of Documentation System to CHIP.--
            (1) In general.--Section 2105(c) (42 U.S.C. 1397ee(c)), as 
        amended by section 110(a), is amended by adding at the end the 
        following new paragraph:
            ``(9) Citizenship documentation requirements.--
                    ``(A) In general.--No payment may be made under 
                this section with respect to an individual who has, or 
                is, declared to be a citizen or national of the United 
                States for purposes of establishing eligibility under 
                this title unless the State meets the requirements of 
                section 1902(a)(46)(B) with respect to the individual.
                    ``(B) Enhanced payments.--Notwithstanding 
                subsection (b), the enhanced FMAP with respect to 
                payments under subsection (a) for expenditures 
                described in clause (i) or (ii) of section 
                1903(a)(3)(F) necessary to comply with subparagraph (A) 
                shall in no event be less than 90 percent and 75 
                percent, respectively.''.
            (2) Nonapplication of administrative expenditures cap.--
        Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)(C)), as amended 
        by section 202(b), is amended by adding at the end the 
        following:
                            ``(iii) Expenditures to comply with 
                        citizenship or nationality verification 
                        requirements.--Expenditures necessary for the 
                        State to comply with paragraph (9)(A).''.
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect on October 1, 2008.
            (2) Restoration of eligibility.--In the case of an 
        individual who, during the period that began on July 1, 2006, 
        and ends on October 1, 2008, was determined to be ineligible 
        for medical assistance under a State Medicaid plan, including 
        any waiver of such plan, solely as a result of the application 
        of subsections (i)(22) and (x) of section 1903 of the Social 
        Security Act (as in effect during such period), but who would 
        have been determined eligible for such assistance if such 
        subsections, as amended by subsection (b), had applied to the 
        individual, a State may deem the individual to be eligible for 
        such assistance as of the date that the individual was 
        determined to be ineligible for such medical assistance on such 
        basis.
            (3) Special transition rule for indians.--During the period 
        that begins on July 1, 2006, and ends on the effective date of 
        final regulations issued under subclause (II) of section 
        1903(x)(3)(B)(v) of the Social Security Act (42 U.S.C. 
        1396b(x)(3)(B)(v)) (as added by subsection (b)(1)(B)), an 
        individual who is a member of a federally-recognized Indian 
        tribe described in subclause (II) of that section who presents 
        a document described in subclause (I) of such section that is 
        issued by such Indian tribe, shall be deemed to have presented 
        satisfactory evidence of citizenship or nationality for 
        purposes of satisfying the requirement of subsection (x) of 
        section 1903 of such Act.

SEC. 302. REDUCING ADMINISTRATIVE BARRIERS TO ENROLLMENT.

    Section 2102(b) (42 U.S.C. 1397bb(b)) is amended--
            (1) by redesignating paragraph (4) as paragraph (5); and
            (2) by inserting after paragraph (3) the following new 
        paragraph:
            ``(4) Reduction of administrative barriers to enrollment.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                plan shall include a description of the procedures used 
                to reduce administrative barriers to the enrollment of 
                children and pregnant women who are eligible for 
                medical assistance under title XIX or for child health 
                assistance or health benefits coverage under this 
                title. Such procedures shall be established and revised 
                as often as the State determines appropriate to take 
                into account the most recent information available to 
                the State identifying such barriers.
                    ``(B) Deemed compliance if joint application and 
                renewal process that permits application other than in 
                person.--A State shall be deemed to comply with 
                subparagraph (A) if the State's application and renewal 
                forms and supplemental forms (if any) and information 
                verification process is the same for purposes of 
                establishing and renewing eligibility for children and 
                pregnant women for medical assistance under title XIX 
                and child health assistance under this title, and such 
                process does not require an application to be made in 
                person or a face-to-face interview.''.

      TITLE IV--REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE

  Subtitle A--Additional State Option for Providing Premium Assistance

SEC. 401. ADDITIONAL STATE OPTION FOR PROVIDING PREMIUM ASSISTANCE.

    (a) In General.--Section 2105(c) (42 U.S.C. 1397ee(c)), as amended 
by section 301(c), is amended by adding at the end the following:
            ``(10) State option to offer premium assistance.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this paragraph, a State may elect to 
                offer a premium assistance subsidy (as defined in 
                subparagraph (C)) for qualified employer-sponsored 
                coverage (as defined in subparagraph (B)) to all 
                targeted low-income children who are eligible for child 
                health assistance under the plan and have access to 
                such coverage in accordance with the requirements of 
                this paragraph.
                    ``(B) Qualified employer-sponsored coverage.--
                            ``(i) In general.--Subject to clauses (ii) 
                        and (iii), in this paragraph, the term 
                        `qualified employer-sponsored coverage' means a 
                        group health plan or health insurance coverage 
                        offered through an employer--
                                    ``(I) that qualifies as creditable 
                                coverage as a group health plan under 
                                section 2701(c)(1) of the Public Health 
                                Service Act;
                                    ``(II) for which the employer 
                                contribution toward any premium for 
                                such coverage is at least 40 percent; 
                                and
                                    ``(III) to all individuals in a 
                                manner that would be considered a 
                                nondiscriminatory eligibility 
                                classification for purposes of 
                                paragraph (3)(A)(ii) of section 105(h) 
                                of the Internal Revenue Code of 1986 
                                (but determined without regard to 
                                clause (i) of subparagraph (B) of such 
                                paragraph).
                            ``(ii) Exception.--Such term does not 
                        include coverage consisting of--
                                    ``(I) benefits provided under a 
                                health flexible spending arrangement 
                                (as defined in section 106(c)(2) of the 
                                Internal Revenue Code of 1986); or
                                    ``(II) a high deductible health 
                                plan (as defined in section 223(c)(2) 
                                of such Code) purchased in conjunction 
                                with a health savings account (as 
                                defined under section 223(d) of such 
                                Code).
                            ``(iii) Cost-effectiveness alternative to 
                        required employer contribution.--A group health 
                        plan or health insurance coverage offered 
                        through an employer that would be considered 
                        qualified employer-sponsored coverage but for 
                        the application of clause (i)(II) may be deemed 
                        to satisfy the requirement of such clause if 
                        either of the following applies:
                                    ``(I) Application of child-based or 
                                family-based test.--The State 
                                establishes to the satisfaction of the 
                                Secretary that the cost of such 
                                coverage is less than the expenditures 
                                that the State would have made to 
                                enroll the child or the family (as 
                                applicable) in the State child health 
                                plan.
                                    ``(II) Aggregate program 
                                operational costs do not exceed the 
                                cost of providing coverage under the 
                                state child health plan.--If subclause 
                                (I) does not apply, the State 
                                establishes to the satisfaction of the 
                                Secretary that the aggregate amount of 
                                expenditures by the State for the 
                                purchase of all such coverage for 
                                targeted low-income children under the 
                                State child health plan (including 
                                administrative expenditures) does not 
                                exceed the aggregate amount of 
                                expenditures that the State would have 
                                made for providing coverage under the 
                                State child health plan for all such 
                                children.
                    ``(C) Premium assistance subsidy.--
                            ``(i) In general.--In this paragraph, the 
                        term `premium assistance subsidy' means, with 
                        respect to a targeted low-income child, the 
                        amount equal to the difference between the 
                        employee contribution required for enrollment 
                        only of the employee under qualified employer-
                        sponsored coverage and the employee 
                        contribution required for enrollment of the 
                        employee and the child in such coverage, less 
                        any applicable premium cost-sharing applied 
                        under the State child health plan (subject to 
                        the limitations imposed under section 2103(e), 
                        including the requirement to count the total 
                        amount of the employee contribution required 
                        for enrollment of the employee and the child in 
                        such coverage toward the annual aggregate cost-
                        sharing limit applied under paragraph (3)(B) of 
                        such section).
                            ``(ii) State payment option.--A State may 
                        provide a premium assistance subsidy either as 
                        reimbursement to an employee for out-of-pocket 
                        expenditures or, subject to clause (iii), 
                        directly to the employee's employer.
                            ``(iii) Employer opt-out.--An employer may 
                        notify a State that it elects to opt-out of 
                        being directly paid a premium assistance 
                        subsidy on behalf of an employee. In the event 
                        of such a notification, an employer shall 
                        withhold the total amount of the employee 
                        contribution required for enrollment of the 
                        employee and the child in the qualified 
                        employer-sponsored coverage and the State shall 
                        pay the premium assistance subsidy directly to 
                        the employee.
                            ``(iv) Treatment as child health 
                        assistance.--Expenditures for the provision of 
                        premium assistance subsidies shall be 
                        considered child health assistance described in 
                        paragraph (1)(C) of subsection (a) for purposes 
                        of making payments under that subsection.
                    ``(D) Application of secondary payor rules.--The 
                State shall be a secondary payor for any items or 
                services provided under the qualified employer-
                sponsored coverage for which the State provides child 
                health assistance under the State child health plan.
                    ``(E) Requirement to provide supplemental coverage 
                for benefits and cost-sharing protection provided under 
                the state child health plan.--
                            ``(i) In general.--Notwithstanding section 
                        2110(b)(1)(C), the State shall provide for each 
                        targeted low-income child enrolled in qualified 
                        employer-sponsored coverage, supplemental 
                        coverage consisting of--
                                    ``(I) items or services that are 
                                not covered, or are only partially 
                                covered, under the qualified employer-
                                sponsored coverage; and
                                    ``(II) cost-sharing protection 
                                consistent with section 2103(e).
                            ``(ii) Record keeping requirements.--For 
                        purposes of carrying out clause (i), a State 
                        may elect to directly pay out-of-pocket 
                        expenditures for cost-sharing imposed under the 
                        qualified employer-sponsored coverage and 
                        collect or not collect all or any portion of 
                        such expenditures from the parent of the child.
                    ``(F) Application of waiting period imposed under 
                the state.--Any waiting period imposed under the State 
                child health plan prior to the provision of child 
                health assistance to a targeted low-income child under 
                the State plan shall apply to the same extent to the 
                provision of a premium assistance subsidy for the child 
                under this paragraph.
                    ``(G) Opt-out permitted for any month.--A State 
                shall establish a process for permitting the parent of 
                a targeted low-income child receiving a premium 
                assistance subsidy to disenroll the child from the 
                qualified employer-sponsored coverage and enroll the 
                child in, and receive child health assistance under, 
                the State child health plan, effective on the first day 
                of any month for which the child is eligible for such 
                assistance and in a manner that ensures continuity of 
                coverage for the child.
                    ``(H) Application to parents.--If a State provides 
                child health assistance or health benefits coverage to 
                parents of a targeted low-income child in accordance 
                with section 2111(b), the State may elect to offer a 
                premium assistance subsidy to a parent of a targeted 
                low-income child who is eligible for such a subsidy 
                under this paragraph in the same manner as the State 
                offers such a subsidy for the enrollment of the child 
                in qualified employer-sponsored coverage, except that--
                            ``(i) the amount of the premium assistance 
                        subsidy shall be increased to take into account 
                        the cost of the enrollment of the parent in the 
                        qualified employer-sponsored coverage or, at 
                        the option of the State if the State determines 
                        it cost-effective, the cost of the enrollment 
                        of the child's family in such coverage; and
                            ``(ii) any reference in this paragraph to a 
                        child is deemed to include a reference to the 
                        parent or, if applicable under clause (i), the 
                        family of the child.
                    ``(I) Additional state option for providing premium 
                assistance.--
                            ``(i) In general.--A State may establish an 
                        employer-family premium assistance purchasing 
                        pool for employers with less than 250 employees 
                        who have at least 1 employee who is a pregnant 
                        woman eligible for assistance under the State 
                        child health plan (including through the 
                        application of an option described in section 
                        2112(f)) or a member of a family with at least 
                        1 targeted low-income child and to provide a 
                        premium assistance subsidy under this paragraph 
                        for enrollment in coverage made available 
                        through such pool.
                            ``(ii) Access to choice of coverage.--A 
                        State that elects the option under clause (i) 
                        shall identify and offer access to not less 
                        than 2 private health plans that are health 
                        benefits coverage that is equivalent to the 
                        benefits coverage in a benchmark benefit 
                        package described in section 2103(b) or 
                        benchmark-equivalent coverage that meets the 
                        requirements of section 2103(a)(2) for 
                        employees described in clause (i).
                    ``(J) No effect on previously approved premium 
                assistance programs.--Nothing in this paragraph shall 
                be construed as limiting the authority of a State to 
                offer premium assistance under section 1906, a waiver 
                described in paragraph (2)(B) or (3), a waiver approved 
                under section 1115, or other authority in effect prior 
                to the date of enactment of the Children's Health 
                Insurance Program Reauthorization Act of 2007.
                    ``(K) Notice of availability.--If a State elects to 
                provide premium assistance subsidies in accordance with 
                this paragraph, the State shall--
                            ``(i) include on any application or 
                        enrollment form for child health assistance a 
                        notice of the availability of premium 
                        assistance subsidies for the enrollment of 
                        targeted low-income children in qualified 
                        employer-sponsored coverage;
                            ``(ii) provide, as part of the application 
                        and enrollment process under the State child 
                        health plan, information describing the 
                        availability of such subsidies and how to elect 
                        to obtain such a subsidy; and
                            ``(iii) establish such other procedures as 
                        the State determines necessary to ensure that 
                        parents are fully informed of the choices for 
                        receiving child health assistance under the 
                        State child health plan or through the receipt 
                        of premium assistance subsidies.
                    ``(L) Application to qualified employer-sponsored 
                benchmark coverage.--If a group health plan or health 
                insurance coverage offered through an employer is 
                certified by an actuary as health benefits coverage 
                that is equivalent to the benefits coverage in a 
                benchmark benefit package described in section 2103(b) 
                or benchmark-equivalent coverage that meets the 
                requirements of section 2103(a)(2), the State may 
                provide premium assistance subsidies for enrollment of 
                targeted low-income children in such group health plan 
                or health insurance coverage in the same manner as such 
                subsidies are provided under this paragraph for 
                enrollment in qualified employer-sponsored coverage, 
                but without regard to the requirement to provide 
                supplemental coverage for benefits and cost-sharing 
                protection provided under the State child health plan 
                under subparagraph (E).''.
    (b) Application to Medicaid.--Section 1906 (42 U.S.C. 1396e) is 
amended by inserting after subsection (c) the following:
    ``(d) A State may elect to offer a premium assistance subsidy (as 
defined in section 2105(c)(10)(C)) for qualified employer-sponsored 
coverage (as defined in section 2105(c)(10)(B)) to a child who is 
eligible for medical assistance under the State plan under this title, 
to the parent of such a child, and to a pregnant woman, in the same 
manner as such a subsidy for such coverage may be offered under a State 
child health plan under title XXI in accordance with section 
2105(c)(10) (except that subparagraph (E)(i)(II) of such section shall 
be applied by substituting `1916 or, if applicable, 1916A' for 
`2103(e)').''.
    (c) GAO Study and Report.--Not later than January 1, 2009, the 
Comptroller General of the United States shall study cost and coverage 
issues relating to any State premium assistance programs for which 
Federal matching payments are made under title XIX or XXI of the Social 
Security Act, including under waiver authority, and shall submit a 
report to the appropriate committees of Congress on the results of such 
study.

SEC. 402. OUTREACH, EDUCATION, AND ENROLLMENT ASSISTANCE.

    (a) Requirement To Include Description of Outreach, Education, and 
Enrollment Efforts Related to Premium Assistance Subsidies in State 
Child Health Plan.--Section 2102(c) (42 U.S.C. 1397bb(c)) is amended by 
adding at the end the following new paragraph:
            ``(3) Premium assistance subsidies.--Outreach, education, 
        and enrollment assistance for families of children likely to be 
        eligible for premium assistance subsidies under the State child 
        health plan in accordance with paragraphs (2)(B), (3), or (10) 
        of section 2105(c), or a waiver approved under section 1115, to 
        inform such families of the availability of, and to assist them 
        in enrolling their children in, such subsidies, and for 
        employers likely to provide coverage that is eligible for such 
        subsidies, including the specific, significant resources the 
        State intends to apply to educate employers about the 
        availability of premium assistance subsidies under the State 
        child health plan.''.
    (b) Nonapplication of 10 Percent Limit on Outreach and Certain 
Other Expenditures.--Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)(C)), 
as amended by section 301(c)(2), is amended by adding at the end the 
following new clause:
                            ``(iv) Expenditures for outreach to 
                        increase the enrollment of children under this 
                        title and title xix through premium assistance 
                        subsidies.--Expenditures for outreach 
                        activities to families of children likely to be 
                        eligible for premium assistance subsidies in 
                        accordance with paragraphs (2)(B), (3), or 
                        (10), or a waiver approved under section 1115, 
                        to inform such families of the availability of, 
                        and to assist them in enrolling their children 
                        in, such subsidies, and to employers likely to 
                        provide qualified employer-sponsored coverage 
                        (as defined in subparagraph (B) of such 
                        paragraph).''.

   Subtitle B--Coordinating Premium Assistance With Private Coverage

SEC. 411. SPECIAL ENROLLMENT PERIOD UNDER GROUP HEALTH PLANS IN CASE OF 
              TERMINATION OF MEDICAID OR CHIP COVERAGE OR ELIGIBILITY 
              FOR ASSISTANCE IN PURCHASE OF EMPLOYMENT-BASED COVERAGE; 
              COORDINATION OF COVERAGE.

    (a) Amendments to Internal Revenue Code of 1986.--Section 9801(f) 
of the Internal Revenue Code of 1986 (relating to special enrollment 
periods) is amended by adding at the end the following new paragraph:
            ``(3) Special rules relating to medicaid and chip.--
                    ``(A) In general.--A group health plan shall permit 
                an employee who is eligible, but not enrolled, for 
                coverage under the terms of the plan (or a dependent of 
                such an employee if the dependent is eligible, but not 
                enrolled, for coverage under such terms) to enroll for 
                coverage under the terms of the plan if either of the 
                following conditions is met:
                            ``(i) Termination of medicaid or chip 
                        coverage.--The employee or dependent is covered 
                        under a Medicaid plan under title XIX of the 
                        Social Security Act or under a State child 
                        health plan under title XXI of such Act and 
                        coverage of the employee or dependent under 
                        such a plan is terminated as a result of loss 
                        of eligibility for such coverage and the 
                        employee requests coverage under the group 
                        health plan not later than 60 days after the 
                        date of termination of such coverage.
                            ``(ii) Eligibility for employment 
                        assistance under medicaid or chip.--The 
                        employee or dependent becomes eligible for 
                        assistance, with respect to coverage under the 
                        group health plan under such Medicaid plan or 
                        State child health plan (including under any 
                        waiver or demonstration project conducted under 
                        or in relation to such a plan), if the employee 
                        requests coverage under the group health plan 
                        not later than 60 days after the date the 
                        employee or dependent is determined to be 
                        eligible for such assistance.
                    ``(B) Employee outreach and disclosure.--
                            ``(i) Outreach to employees regarding 
                        availability of medicaid and chip coverage.--
                                    ``(I) In general.--Each employer 
                                that maintains a group health plan in a 
                                State that provides medical assistance 
                                under a State Medicaid plan under title 
                                XIX of the Social Security Act, or 
                                child health assistance under a State 
                                child health plan under title XXI of 
                                such Act, in the form of premium 
                                assistance for the purchase of coverage 
                                under a group health plan, shall 
                                provide to each employee a written 
                                notice informing the employee of 
                                potential opportunities then currently 
                                available in the State in which the 
                                employee resides for premium assistance 
                                under such plans for health coverage of 
                                the employee or the employee's 
                                dependents. For purposes of compliance 
                                with this clause, the employer may use 
                                any State-specific model notice issued 
                                by the Secretary of Labor or the 
                                Secretary of Health and Human Services 
                                in accordance with section 701(f)(3)(B) 
                                of the Employee Retirement Income 
                                Security Act of 1974 (29 U.S.C. 
                                1181(f)(3)(B)).
                                    ``(II) Option to provide concurrent 
                                with provision of summary plan 
                                description.--An employer may provide 
                                the model notice applicable to the 
                                State in which an employee resides 
                                concurrent with the furnishing of the 
                                summary plan description as provided in 
                                section 104(b) of the Employee 
                                Retirement Income Security Act of 1974 
                                (29 U.S.C. 1024).
                            ``(ii) Disclosure about group health plan 
                        benefits to states for medicaid and chip 
                        eligible individuals.--In the case of a 
                        participant or beneficiary of a group health 
                        plan who is covered under a Medicaid plan of a 
                        State under title XIX of the Social Security 
                        Act or under a State child health plan under 
                        title XXI of such Act, the plan administrator 
                        of the group health plan shall disclose to the 
                        State, upon request, information about the 
                        benefits available under the group health plan 
                        in sufficient specificity, as determined under 
                        regulations of the Secretary of Health and 
                        Human Services in consultation with the 
                        Secretary that require use of the model 
                        coverage coordination disclosure form developed 
                        under section 411(b)(2)(C) of the Children's 
                        Health Insurance Program Reauthorization Act of 
                        2007, so as to permit the State to make a 
                        determination (under paragraph (2)(B), (3), or 
                        (10) of section 2105(c) of the Social Security 
                        Act or otherwise) concerning the cost-
                        effectiveness of the State providing medical or 
                        child health assistance through premium 
                        assistance for the purchase of coverage under 
                        such group health plan and in order for the 
                        State to provide supplemental benefits required 
                        under paragraph (10)(E) of such section or 
                        other authority.''.
    (b) Conforming Amendments.--
            (1) Amendments to employee retirement income security 
        act.--
                    (A) In general.--Section 701(f) of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1181(f)) is amended by adding at the end the following 
                new paragraph:
            ``(3) Special rules for application in case of medicaid and 
        chip.--
                    ``(A) In general.--A group health plan, and a 
                health insurance issuer offering group health insurance 
                coverage in connection with a group health plan, shall 
                permit an employee who is eligible, but not enrolled, 
                for coverage under the terms of the plan (or a 
                dependent of such an employee if the dependent is 
                eligible, but not enrolled, for coverage under such 
                terms) to enroll for coverage under the terms of the 
                plan if either of the following conditions is met:
                            ``(i) Termination of medicaid or chip 
                        coverage.--The employee or dependent is covered 
                        under a Medicaid plan under title XIX of the 
                        Social Security Act or under a State child 
                        health plan under title XXI of such Act and 
                        coverage of the employee or dependent under 
                        such a plan is terminated as a result of loss 
                        of eligibility for such coverage and the 
                        employee requests coverage under the group 
                        health plan (or health insurance coverage) not 
                        later than 60 days after the date of 
                        termination of such coverage.
                            ``(ii) Eligibility for employment 
                        assistance under medicaid or chip.--The 
                        employee or dependent becomes eligible for 
                        assistance, with respect to coverage under the 
                        group health plan or health insurance coverage, 
                        under such Medicaid plan or State child health 
                        plan (including under any waiver or 
                        demonstration project conducted under or in 
                        relation to such a plan), if the employee 
                        requests coverage under the group health plan 
                        or health insurance coverage not later than 60 
                        days after the date the employee or dependent 
                        is determined to be eligible for such 
                        assistance.''.
                    ``(B) Coordination with medicaid and chip.--
                            ``(i) Outreach to employees regarding 
                        availability of medicaid and chip coverage.--
                                    ``(I) In general.--Each employer 
                                that maintains a group health plan in a 
                                State that provides medical assistance 
                                under a State Medicaid plan under title 
                                XIX of the Social Security Act, or 
                                child health assistance under a State 
                                child health plan under title XXI of 
                                such Act, in the form of premium 
                                assistance for the purchase of coverage 
                                under a group health plan, shall 
                                provide to each employee a written 
                                notice informing the employee of 
                                potential opportunities then currently 
                                available in the State in which the 
                                employee resides for premium assistance 
                                under such plans for health coverage of 
                                the employee or the employee's 
                                dependents.
                                    ``(II) Model notice.--Not later 
                                than 1 year after the date of enactment 
                                of the Children's Health Insurance 
                                Program Reauthorization Act of 2007, 
                                the Secretary and the Secretary of 
                                Health and Human Services, in 
                                consultation with Directors of State 
                                Medicaid agencies under title XIX of 
                                the Social Security Act and Directors 
                                of State CHIP agencies under title XXI 
                                of such Act, shall jointly develop 
                                national and State-specific model 
                                notices for purposes of subparagraph 
                                (A). The Secretary shall provide 
                                employers with such model notices so as 
                                to enable employers to timely comply 
                                with the requirements of subparagraph 
                                (A). Such model notices shall include 
                                information regarding how an employee 
                                may contact the State in which the 
                                employee resides for additional 
                                information regarding potential 
                                opportunities for such premium 
                                assistance, including how to apply for 
                                such assistance.
                                    ``(III) Option to provide 
                                concurrent with provision of summary 
                                plan description.--An employer may 
                                provide the model notice applicable to 
                                the State in which an employee resides 
                                concurrent with the furnishing of the 
                                summary plan description as provided in 
                                section 104(b).
                            ``(ii) Disclosure about group health plan 
                        benefits to states for medicaid and chip 
                        eligible individuals.--In the case of a 
                        participant or beneficiary of a group health 
                        plan who is covered under a Medicaid plan of a 
                        State under title XIX of the Social Security 
                        Act or under a State child health plan under 
                        title XXI of such Act, the plan administrator 
                        of the group health plan shall disclose to the 
                        State, upon request, information about the 
                        benefits available under the group health plan 
                        in sufficient specificity, as determined under 
                        regulations of the Secretary of Health and 
                        Human Services in consultation with the 
                        Secretary that require use of the model 
                        coverage coordination disclosure form developed 
                        under section 411(b)(2)(C) of the Children's 
                        Health Insurance Program Reauthorization Act of 
                        2007, so as to permit the State to make a 
                        determination (under paragraph (2)(B), (3), or 
                        (10) of section 2105(c) of the Social Security 
                        Act or otherwise) concerning the cost-
                        effectiveness of the State providing medical or 
                        child health assistance through premium 
                        assistance for the purchase of coverage under 
                        such group health plan and in order for the 
                        State to provide supplemental benefits required 
                        under paragraph (10)(E) of such section or 
                        other authority.''.
                    (B) Conforming amendment.--Section 102(b) of the 
                Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1022(b)) is amended--
                            (i) by striking ``and the remedies'' and 
                        inserting ``, the remedies''; and
                            (ii) by inserting before the period the 
                        following: ``, and if the employer so elects 
                        for purposes of complying with section 
                        701(f)(3)(B)(i), the model notice applicable to 
                        the State in which the participants and 
                        beneficiaries reside''.
                    (C) Working group to develop model coverage 
                coordination disclosure form.--
                            (i) Medicaid, chip, and employer-sponsored 
                        coverage coordination working group.--
                                    (I) In general.--Not later than 60 
                                days after the date of enactment of 
                                this Act, the Secretary of Health and 
                                Human Services and the Secretary of 
                                Labor shall jointly establish a 
                                Medicaid, CHIP, and Employer-Sponsored 
                                Coverage Coordination Working Group (in 
                                this subparagraph referred to as the 
                                ``Working Group''). The purpose of the 
                                Working Group shall be to develop the 
                                model coverage coordination disclosure 
                                form described in subclause (II) and to 
                                identify the impediments to the 
                                effective coordination of coverage 
                                available to families that include 
                                employees of employers that maintain 
                                group health plans and members who are 
                                eligible for medical assistance under 
                                title XIX of the Social Security Act or 
                                child health assistance or other health 
                                benefits coverage under title XXI of 
                                such Act.
                                    (II) Model coverage coordination 
                                disclosure form described.--The model 
                                form described in this subclause is a 
                                form for plan administrators of group 
                                health plans to complete for purposes 
                                of permitting a State to determine the 
                                availability and cost-effectiveness of 
                                the coverage available under such plans 
                                to employees who have family members 
                                who are eligible for premium assistance 
                                offered under a State plan under title 
                                XIX or XXI of such Act and to allow for 
                                coordination of coverage for enrollees 
                                of such plans. Such form shall provide 
                                the following information in addition 
                                to such other information as the 
                                Working Group determines appropriate:
                                            (aa) A determination of 
                                        whether the employee is 
                                        eligible for coverage under the 
                                        group health plan.
                                            (bb) The name and contract 
                                        information of the plan 
                                        administrator of the group 
                                        health plan.
                                            (cc) The benefits offered 
                                        under the plan.
                                            (dd) The premiums and cost-
                                        sharing required under the 
                                        plan.
                                            (ee) Any other information 
                                        relevant to coverage under the 
                                        plan.
                            (ii) Membership.--The Working Group shall 
                        consist of not more than 30 members and shall 
                        be composed of representatives of--
                                    (I) the Department of Labor;
                                    (II) the Department of Health and 
                                Human Services;
                                    (III) State directors of the 
                                Medicaid program under title XIX of the 
                                Social Security Act;
                                    (IV) State directors of the State 
                                Children's Health Insurance Program 
                                under title XXI of the Social Security 
                                Act;
                                    (V) employers, including owners of 
                                small businesses and their trade or 
                                industry representatives and certified 
                                human resource and payroll 
                                professionals;
                                    (VI) plan administrators and plan 
                                sponsors of group health plans (as 
                                defined in section 607(1) of the 
                                Employee Retirement Income Security Act 
                                of 1974); and
                                    (VII) children and other 
                                beneficiaries of medical assistance 
                                under title XIX of the Social Security 
                                Act or child health assistance or other 
                                health benefits coverage under title 
                                XXI of such Act.
                            (iii) Compensation.--The members of the 
                        Working Group shall serve without compensation.
                            (iv) Administrative support.--The 
                        Department of Health and Human Services and the 
                        Department of Labor shall jointly provide 
                        appropriate administrative support to the 
                        Working Group, including technical assistance. 
                        The Working Group may use the services and 
                        facilities of either such Department, with or 
                        without reimbursement, as jointly determined by 
                        such Departments.
                            (v) Report.--
                                    (I) Report by working group to the 
                                secretaries.--Not later than 18 months 
                                after the date of the enactment of this 
                                Act, the Working Group shall submit to 
                                the Secretary of Labor and the 
                                Secretary of Health and Human Services 
                                the model form described in clause 
                                (i)(II) along with a report containing 
                                recommendations for appropriate 
                                measures to address the impediments to 
                                the effective coordination of coverage 
                                between group health plans and the 
                                State plans under titles XIX and XXI of 
                                the Social Security Act.
                                    (II) Report by secretaries to the 
                                congress.--Not later than 2 months 
                                after receipt of the report pursuant to 
                                subclause (I), the Secretaries shall 
                                jointly submit a report to each House 
                                of the Congress regarding the 
                                recommendations contained in the report 
                                under such subclause.
                            (vi) Termination.--The Working Group shall 
                        terminate 30 days after the date of the 
                        issuance of its report under clause (v).
                    (D) Effective dates.--The Secretary of Labor and 
                the Secretary of Health and Human Services shall 
                develop the initial model notices under section 
                701(f)(3)(B)(i)(II) of the Employee Retirement Income 
                Security Act of 1974, and the Secretary of Labor shall 
                provide such notices to employers, not later than the 
                date that is 1 year after the date of enactment of this 
                Act, and each employer shall provide the initial annual 
                notices to such employer's employees beginning with the 
                first plan year that begins after the date on which 
                such initial model notices are first issued. The model 
                coverage coordination disclosure form developed under 
                subparagraph (C) shall apply with respect to requests 
                made by States beginning with the first plan year that 
                begins after the date on which such model coverage 
                coordination disclosure form is first issued.
                    (E) Enforcement.--Section 502 of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 1132) 
                is amended--
                            (i) in subsection (a)(6), by striking ``or 
                        (8)'' and inserting ``(8), or (9)''; and
                            (ii) in subsection (c), by redesignating 
                        paragraph (9) as paragraph (10), and by 
                        inserting after paragraph (8) the following:
    ``(9)(A) The Secretary may assess a civil penalty against any 
employer of up to $100 a day from the date of the employer's failure to 
meet the notice requirement of section 701(f)(3)(B)(i)(I). For purposes 
of this subparagraph, each violation with respect to any single 
employee shall be treated as a separate violation.
    ``(B) The Secretary may assess a civil penalty against any plan 
administrator of up to $100 a day from the date of the plan 
administrator's failure to timely provide to any State the information 
required to be disclosed under section 701(f)(3)(B)(ii). For purposes 
of this subparagraph, each violation with respect to any single 
participant or beneficiary shall be treated as a separate violation.''.

 TITLE V--STRENGTHENING QUALITY OF CARE AND HEALTH OUTCOMES OF CHILDREN

SEC. 501. CHILD HEALTH QUALITY IMPROVEMENT ACTIVITIES FOR CHILDREN 
              ENROLLED IN MEDICAID OR CHIP.

    (a) Development of Child Health Quality Measures for Children 
Enrolled in Medicaid or Chip.--Title XI (42 U.S.C. 1301 et seq.) is 
amended by inserting after section 1139 the following new section:

``SEC. 1139A. CHILD HEALTH QUALITY MEASURES.

    ``(a) Development of an Initial Core Set of Health Care Quality 
Measures for Children Enrolled in Medicaid or Chip.--
            ``(1) In general.--Not later than January 1, 2009, the 
        Secretary shall identify and publish for general comment an 
        initial, recommended core set of child health quality measures 
        for use by State programs administered under titles XIX and 
        XXI, health insurance issuers and managed care entities that 
        enter into contracts with such programs, and providers of items 
        and services under such programs.
            ``(2) Identification of initial core measures.--In 
        consultation with the individuals and entities described in 
        subsection (b)(3), the Secretary shall identify existing 
        quality of care measures for children that are in use under 
        public and privately sponsored health care coverage 
        arrangements, or that are part of reporting systems that 
        measure both the presence and duration of health insurance 
        coverage over time.
            ``(3) Recommendations and dissemination.--Based on such 
        existing and identified measures, the Secretary shall publish 
        an initial core set of child health quality measures that 
        includes (but is not limited to) the following:
                    ``(A) The duration of children's health insurance 
                coverage over a 12-month time period.
                    ``(B) The availability of a full range of--
                            ``(i) preventive services, treatments, and 
                        services for acute conditions, including 
                        services to promote healthy birth and prevent 
                        and treat premature birth; and
                            ``(ii) treatments to correct or ameliorate 
                        the effects of chronic physical and mental 
                        conditions in infants, young children, school-
                        age children, and adolescents.
                    ``(C) The availability of care in a range of 
                ambulatory and inpatient health care settings in which 
                such care is furnished.
                    ``(D) The types of measures that, taken together, 
                can be used to estimate the overall national quality of 
                health care for children and to perform comparative 
                analyses of pediatric health care quality and racial, 
                ethnic, and socioeconomic disparities in child health 
                and health care for children.
            ``(4) Encourage voluntary and standardized reporting.--Not 
        later than 2 years after the date of enactment of the 
        Children's Health Insurance Program Reauthorization Act of 
        2007, the Secretary, in consultation with States, shall develop 
        a standardized format for reporting information and procedures 
        and approaches that encourage States to use the initial core 
        measurement set to voluntarily report information regarding the 
        quality of pediatric health care under titles XIX and XXI.
            ``(5) Adoption of best practices in implementing quality 
        programs.--The Secretary shall disseminate information to 
        States regarding best practices among States with respect to 
        measuring and reporting on the quality of health care for 
        children, and shall facilitate the adoption of such best 
        practices. In developing best practices approaches, the 
        Secretary shall give particular attention to State measurement 
        techniques that ensure the timeliness and accuracy of provider 
        reporting, encourage provider reporting compliance, encourage 
        successful quality improvement strategies, and improve 
        efficiency in data collection using health information 
        technology.
            ``(6) Reports to congress.--Not later than January 1, 2010, 
        and every 3 years thereafter, the Secretary shall report to 
        Congress on--
                    ``(A) the status of the Secretary's efforts to 
                improve--
                            ``(i) quality related to the duration and 
                        stability of health insurance coverage for 
                        children under titles XIX and XXI;
                            ``(ii) the quality of children's health 
                        care under such titles, including preventive 
                        health services, health care for acute 
                        conditions, chronic health care, and health 
                        services to ameliorate the effects of physical 
                        and mental conditions and to aid in growth and 
                        development of infants, young children, school-
                        age children, and adolescents with special 
                        health care needs; and
                            ``(iii) the quality of children's health 
                        care under such titles across the domains of 
                        quality, including clinical quality, health 
                        care safety, family experience with health 
                        care, health care in the most integrated 
                        setting, and elimination of racial, ethnic, and 
                        socioeconomic disparities in health and health 
                        care;
                    ``(B) the status of voluntary reporting by States 
                under titles XIX and XXI, utilizing the initial core 
                quality measurement set; and
                    ``(C) any recommendations for legislative changes 
                needed to improve the quality of care provided to 
                children under titles XIX and XXI, including 
                recommendations for quality reporting by States.
            ``(7) Technical assistance.--The Secretary shall provide 
        technical assistance to States to assist them in adopting and 
        utilizing core child health quality measures in administering 
        the State plans under titles XIX and XXI.
            ``(8) Definition of core set.--In this section, the term 
        `core set' means a group of valid, reliable, and evidence-based 
        quality measures that, taken together--
                    ``(A) provide information regarding the quality of 
                health coverage and health care for children;
                    ``(B) address the needs of children throughout the 
                developmental age span; and
                    ``(C) allow purchasers, families, and health care 
                providers to understand the quality of care in relation 
                to the preventive needs of children, treatments aimed 
                at managing and resolving acute conditions, and 
                diagnostic and treatment services whose purpose is to 
                correct or ameliorate physical, mental, or 
                developmental conditions that could, if untreated or 
                poorly treated, become chronic.
    ``(b) Advancing and Improving Pediatric Quality Measures.--
            ``(1) Establishment of pediatric quality measures 
        program.--Not later than January 1, 2010, the Secretary shall 
        establish a pediatric quality measures program to--
                    ``(A) improve and strengthen the initial core child 
                health care quality measures established by the 
                Secretary under subsection (a);
                    ``(B) expand on existing pediatric quality measures 
                used by public and private health care purchasers and 
                advance the development of such new and emerging 
                quality measures; and
                    ``(C) increase the portfolio of evidence-based, 
                consensus pediatric quality measures available to 
                public and private purchasers of children's health care 
                services, providers, and consumers.
            ``(2) Evidence-based measures.--The measures developed 
        under the pediatric quality measures program shall, at a 
        minimum, be--
                    ``(A) evidence-based and, where appropriate, risk 
                adjusted;
                    ``(B) designed to identify and eliminate racial and 
                ethnic disparities in child health and the provision of 
                health care;
                    ``(C) designed to ensure that the data required for 
                such measures is collected and reported in a standard 
                format that permits comparison of quality and data at a 
                State, plan, and provider level;
                    ``(D) periodically updated; and
                    ``(E) responsive to the child health needs, 
                services, and domains of health care quality described 
                in clauses (i), (ii), and (iii) of subsection 
                (a)(6)(A).
            ``(3) Process for pediatric quality measures program.--In 
        identifying gaps in existing pediatric quality measures and 
        establishing priorities for development and advancement of such 
        measures, the Secretary shall consult with--
                    ``(A) States;
                    ``(B) pediatricians, children's hospitals, and 
                other primary and specialized pediatric health care 
                professionals (including members of the allied health 
                professions) who specialize in the care and treatment 
                of children, particularly children with special 
                physical, mental, and developmental health care needs;
                    ``(C) dental professionals, including pediatric 
                dental professionals;
                    ``(D) health care providers that furnish primary 
                health care to children and families who live in urban 
                and rural medically underserved communities or who are 
                members of distinct population sub-groups at heightened 
                risk for poor health outcomes;
                    ``(E) national organizations representing consumers 
                and purchasers of children's health care;
                    ``(F) national organizations and individuals with 
                expertise in pediatric health quality measurement; and
                    ``(G) voluntary consensus standards setting 
                organizations and other organizations involved in the 
                advancement of evidence-based measures of health care.
            ``(4) Developing, validating, and testing a portfolio of 
        pediatric quality measures.--As part of the program to advance 
        pediatric quality measures, the Secretary shall--
                    ``(A) award grants and contracts for the 
                development, testing, and validation of new, emerging, 
                and innovative evidence-based measures for children's 
                health care services across the domains of quality 
                described in clauses (i),(ii), and (iii) of subsection 
                (a)(6)(A); and
                    ``(B) award grants and contracts for--
                            ``(i) the development of consensus on 
                        evidence-based measures for children's health 
                        care services;
                            ``(ii) the dissemination of such measures 
                        to public and private purchasers of health care 
                        for children; and
                            ``(iii) the updating of such measures as 
                        necessary.
            ``(5) Revising, strengthening, and improving initial core 
        measures.--Beginning no later than January 1, 2012, and 
        annually thereafter, the Secretary shall publish recommended 
        changes to the core measures described in subsection (a) that 
        shall reflect the testing, validation, and consensus process 
        for the development of pediatric quality measures described in 
        subsection paragraphs (1) through (4).
            ``(6) Definition of pediatric quality measure.--In this 
        subsection, the term `pediatric quality measure' means a 
        measurement of clinical care that is capable of being examined 
        through the collection and analysis of relevant information, 
        that is developed in order to assess 1 or more aspects of 
        pediatric health care quality in various institutional and 
        ambulatory health care settings, including the structure of the 
        clinical care system, the process of care, the outcome of care, 
        or patient experiences in care.
    ``(c) Annual State Reports Regarding State-Specific Quality of Care 
Measures Applied Under Medicaid or Chip.--
            ``(1) Annual state reports.--Each State with a State plan 
        approved under title XIX or a State child health plan approved 
        under title XXI shall annually report to the Secretary on the--
                    ``(A) State-specific child health quality measures 
                applied by the States under such plans, including 
                measures described in subparagraphs (A) and (B) of 
                subsection (a)(6); and
                    ``(B) State-specific information on the quality of 
                health care furnished to children under such plans, 
                including information collected through external 
                quality reviews of managed care organizations under 
                section 1932 of the Social Security Act (42 U.S.C. 
                1396u-4) and benchmark plans under sections 1937 and 
                2103 of such Act (42 U.S.C. 1396u-7, 1397cc).
            ``(2) Publication.--Not later than September 30, 2009, and 
        annually thereafter, the Secretary shall collect, analyze, and 
        make publicly available the information reported by States 
        under paragraph (1).
    ``(d) Demonstration Projects for Improving the Quality of 
Children's Health Care and the Use of Health Information Technology.--
            ``(1) In general.--During the period of fiscal years 2008 
        through 2012, the Secretary shall award not more than 10 grants 
        to States and child health providers to conduct demonstration 
        projects to evaluate promising ideas for improving the quality 
        of children's health care provided under title XIX or XXI, 
        including projects to--
                    ``(A) experiment with, and evaluate the use of, new 
                measures of the quality of children's health care under 
                such titles (including testing the validity and 
                suitability for reporting of such measures);
                    ``(B) promote the use of health information 
                technology in care delivery for children under such 
                titles;
                    ``(C) evaluate provider-based models which improve 
                the delivery of children's health care services under 
                such titles, including care management for children 
                with chronic conditions and the use of evidence-based 
                approaches to improve the effectiveness, safety, and 
                efficiency of health care services for children; or
                    ``(D) demonstrate the impact of the model 
                electronic health record format for children developed 
                and disseminated under subsection (f) on improving 
                pediatric health, including the effects of chronic 
                childhood health conditions, and pediatric health care 
                quality as well as reducing health care costs.
            ``(2) Requirements.--In awarding grants under this 
        subsection, the Secretary shall ensure that--
                    ``(A) only 1 demonstration project funded under a 
                grant awarded under this subsection shall be conducted 
                in a State; and
                    ``(B) demonstration projects funded under grants 
                awarded under this subsection shall be conducted evenly 
                between States with large urban areas and States with 
                large rural areas.
            ``(3) Authority for multistate projects.--A demonstration 
        project conducted with a grant awarded under this subsection 
        may be conducted on a multistate basis, as needed.
            ``(4) Funding.--$20,000,000 of the amount appropriated 
        under subsection (i) for a fiscal year shall be used to carry 
        out this subsection.
    ``(e) Childhood Obesity Demonstration Project.--
            ``(1) Authority to conduct demonstration.--The Secretary, 
        in consultation with the Administrator of the Centers for 
        Medicare & Medicaid Services, shall conduct a demonstration 
        project to develop a comprehensive and systematic model for 
        reducing childhood obesity by awarding grants to eligible 
        entities to carry out such project. Such model shall--
                    ``(A) identify, through self-assessment, behavioral 
                risk factors for obesity among children;
                    ``(B) identify, through self-assessment, needed 
                clinical preventive and screening benefits among those 
                children identified as target individuals on the basis 
                of such risk factors;
                    ``(C) provide ongoing support to such target 
                individuals and their families to reduce risk factors 
                and promote the appropriate use of preventive and 
                screening benefits; and
                    ``(D) be designed to improve health outcomes, 
                satisfaction, quality of life, and appropriate use of 
                items and services for which medical assistance is 
                available under title XIX or child health assistance is 
                available under title XXI among such target 
                individuals.
            ``(2) Eligibility entities.--For purposes of this 
        subsection, an eligible entity is any of the following:
                    ``(A) A city, county, or Indian tribe.
                    ``(B) A local or tribal educational agency.
                    ``(C) An accredited university, college, or 
                community college.
                    ``(D) A Federally-qualified health center.
                    ``(E) A local health department.
                    ``(F) A health care provider.
                    ``(G) A community-based organization.
                    ``(H) Any other entity determined appropriate by 
                the Secretary, including a consortia or partnership of 
                entities described in any of subparagraphs (A) through 
                (G).
            ``(3) Use of funds.--An eligible entity awarded a grant 
        under this subsection shall use the funds made available under 
        the grant to--
                    ``(A) carry out community-based activities related 
                to reducing childhood obesity, including by--
                            ``(i) forming partnerships with entities, 
                        including schools and other facilities 
                        providing recreational services, to establish 
                        programs for after school and weekend community 
                        activities that are designed to reduce 
                        childhood obesity;
                            ``(ii) forming partnerships with daycare 
                        facilities to establish programs that promote 
                        healthy eating behaviors and physical activity; 
                        and
                            ``(iii) developing and evaluating community 
                        educational activities targeting good nutrition 
                        and promoting healthy eating behaviors;
                    ``(B) carry out age-appropriate school-based 
                activities that are designed to reduce childhood 
                obesity, including by--
                            ``(i) developing and testing educational 
                        curricula and intervention programs designed to 
                        promote healthy eating behaviors and habits in 
                        youth, which may include--
                                    ``(I) after hours physical activity 
                                programs; and
                                    ``(II) science-based interventions 
                                with multiple components to prevent 
                                eating disorders including nutritional 
                                content, understanding and responding 
                                to hunger and satiety, positive body 
                                image development, positive self-esteem 
                                development, and learning life skills 
                                (such as stress management, 
                                communication skills, problemsolving 
                                and decisionmaking skills), as well as 
                                consideration of cultural and 
                                developmental issues, and the role of 
                                family, school, and community;
                            ``(ii) providing education and training to 
                        educational professionals regarding how to 
                        promote a healthy lifestyle and a healthy 
                        school environment for children;
                            ``(iii) planning and implementing a healthy 
                        lifestyle curriculum or program with an 
                        emphasis on healthy eating behaviors and 
                        physical activity; and
                            ``(iv) planning and implementing healthy 
                        lifestyle classes or programs for parents or 
                        guardians, with an emphasis on healthy eating 
                        behaviors and physical activity for children;
                    ``(C) carry out educational, counseling, 
                promotional, and training activities through the local 
                health care delivery systems including by--
                            ``(i) promoting healthy eating behaviors 
                        and physical activity services to treat or 
                        prevent eating disorders, being overweight, and 
                        obesity;
                            ``(ii) providing patient education and 
                        counseling to increase physical activity and 
                        promote healthy eating behaviors;
                            ``(iii) training health professionals on 
                        how to identify and treat obese and overweight 
                        individuals which may include nutrition and 
                        physical activity counseling; and
                            ``(iv) providing community education by a 
                        health professional on good nutrition and 
                        physical activity to develop a better 
                        understanding of the relationship between diet, 
                        physical activity, and eating disorders, 
                        obesity, or being overweight; and
                    ``(D) provide, through qualified health 
                professionals, training and supervision for community 
                health workers to--
                            ``(i) educate families regarding the 
                        relationship between nutrition, eating habits, 
                        physical activity, and obesity;
                            ``(ii) educate families about effective 
                        strategies to improve nutrition, establish 
                        healthy eating patterns, and establish 
                        appropriate levels of physical activity; and
                            ``(iii) educate and guide parents regarding 
                        the ability to model and communicate positive 
                        health behaviors.
            ``(4) Priority.--In awarding grants under paragraph (1), 
        the Secretary shall give priority to awarding grants to 
        eligible entities--
                    ``(A) that demonstrate that they have previously 
                applied successfully for funds to carry out activities 
                that seek to promote individual and community health 
                and to prevent the incidence of chronic disease and 
                that can cite published and peer-reviewed research 
                demonstrating that the activities that the entities 
                propose to carry out with funds made available under 
                the grant are effective;
                    ``(B) that will carry out programs or activities 
                that seek to accomplish a goal or goals set by the 
                State in the Healthy People 2010 plan of the State;
                    ``(C) that provide non-Federal contributions, 
                either in cash or in-kind, to the costs of funding 
                activities under the grants;
                    ``(D) that develop comprehensive plans that include 
                a strategy for extending program activities developed 
                under grants in the years following the fiscal years 
                for which they receive grants under this subsection;
                    ``(E) located in communities that are medically 
                underserved, as determined by the Secretary;
                    ``(F) located in areas in which the average poverty 
                rate is at least 150 percent or higher of the average 
                poverty rate in the State involved, as determined by 
                the Secretary; and
                    ``(G) that submit plans that exhibit multisectoral, 
                cooperative conduct that includes the involvement of a 
                broad range of stakeholders, including--
                            ``(i) community-based organizations;
                            ``(ii) local governments;
                            ``(iii) local educational agencies;
                            ``(iv) the private sector;
                            ``(v) State or local departments of health;
                            ``(vi) accredited colleges, universities, 
                        and community colleges;
                            ``(vii) health care providers;
                            ``(viii) State and local departments of 
                        transportation and city planning; and
                            ``(ix) other entities determined 
                        appropriate by the Secretary.
            ``(5) Program design.--
                    ``(A) Initial design.--Not later than 1 year after 
                the date of enactment of the Children's Health 
                Insurance Program Reauthorization Act of 2007, the 
                Secretary shall design the demonstration project. The 
                demonstration should draw upon promising, innovative 
                models and incentives to reduce behavioral risk 
                factors. The Administrator of the Centers for Medicare 
                & Medicaid Services shall consult with the Director of 
                the Centers for Disease Control and Prevention, the 
                Director of the Office of Minority Health, the heads of 
                other agencies in the Department of Health and Human 
                Services, and such professional organizations, as the 
                Secretary determines to be appropriate, on the design, 
                conduct, and evaluation of the demonstration.
                    ``(B) Number and project areas.--Not later than 2 
                years after the date of enactment of the Children's 
                Health Insurance Program Reauthorization Act of 2007, 
                the Secretary shall award 1 grant that is specifically 
                designed to determine whether programs similar to 
                programs to be conducted by other grantees under this 
                subsection should be implemented with respect to the 
                general population of children who are eligible for 
                child health assistance under State child health plans 
                under title XXI in order to reduce the incidence of 
                childhood obesity among such population.
            ``(6) Report to congress.--Not later than 3 years after the 
        date the Secretary implements the demonstration project under 
        this subsection, the Secretary shall submit to Congress a 
        report that describes the project, evaluates the effectiveness 
        and cost effectiveness of the project, evaluates the 
        beneficiary satisfaction under the project, and includes any 
        such other information as the Secretary determines to be 
        appropriate.
            ``(7) Definitions.--In this subsection:
                    ``(A) Federally-qualified health center.--The term 
                `Federally-qualified health center' has the meaning 
                given that term in section 1905(l)(2)(B).
                    ``(B) Indian tribe.--The term `Indian tribe' has 
                the meaning given that term in section 4 of the Indian 
                Health Care Improvement Act (25 U.S.C. 1603).
                    ``(C) Self-assessment.--The term `self-assessment' 
                means a form that--
                            ``(i) includes questions regarding--
                                    ``(I) behavioral risk factors;
                                    ``(II) needed preventive and 
                                screening services; and
                                    ``(III) target individuals' 
                                preferences for receiving follow-up 
                                information;
                            ``(ii) is assessed using such computer 
                        generated assessment programs; and
                            ``(iii) allows for the provision of such 
                        ongoing support to the individual as the 
                        Secretary determines appropriate.
                    ``(D) Ongoing support.--The term `ongoing support' 
                means--
                            ``(i) to provide any target individual with 
                        information, feedback, health coaching, and 
                        recommendations regarding--
                                    ``(I) the results of a self-
                                assessment given to the individual;
                                    ``(II) behavior modification based 
                                on the self-assessment; and
                                    ``(III) any need for clinical 
                                preventive and screening services or 
                                treatment including medical nutrition 
                                therapy;
                            ``(ii) to provide any target individual 
                        with referrals to community resources and 
                        programs available to assist the target 
                        individual in reducing health risks; and
                            ``(iii) to provide the information 
                        described in clause (i) to a health care 
                        provider, if designated by the target 
                        individual to receive such information.
            ``(8) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection, $25,000,000 
        for the period of fiscal years 2008 through 2012.
    ``(f) Development of Model Electronic Health Record Format for 
Children Enrolled in Medicaid or CHIP.--
            ``(1) In general.--Not later than January 1, 2009, the 
        Secretary shall establish a program to encourage the 
        development and dissemination of a model electronic health 
        record format for children enrolled in the State plan under 
        title XIX or the State child health plan under title XXI that 
        is--
                    ``(A) subject to State laws, accessible to parents, 
                caregivers, and other consumers for the sole purpose of 
                demonstrating compliance with school or leisure 
                activity requirements, such as appropriate 
                immunizations or physicals;
                    ``(B) designed to allow interoperable exchanges 
                that conform with Federal and State privacy and 
                security requirements;
                    ``(C) structured in a manner that permits parents 
                and caregivers to view and understand the extent to 
                which the care their children receive is clinically 
                appropriate and of high quality; and
                    ``(D) capable of being incorporated into, and 
                otherwise compatible with, other standards developed 
                for electronic health records.
            ``(2) Funding.--$5,000,000 of the amount appropriated under 
        subsection (i) for a fiscal year shall be used to carry out 
        this subsection.
    ``(g) Study of Pediatric Health and Health Care Quality Measures.--
            ``(1) In general.--Not later than July 1, 2009, the 
        Institute of Medicine shall study and report to Congress on the 
        extent and quality of efforts to measure child health status 
        and the quality of health care for children across the age span 
        and in relation to preventive care, treatments for acute 
        conditions, and treatments aimed at ameliorating or correcting 
        physical, mental, and developmental conditions in children. In 
        conducting such study and preparing such report, the Institute 
        of Medicine shall--
                    ``(A) consider all of the major national 
                population-based reporting systems sponsored by the 
                Federal Government that are currently in place, 
                including reporting requirements under Federal grant 
                programs and national population surveys and estimates 
                conducted directly by the Federal Government;
                    ``(B) identify the information regarding child 
                health and health care quality that each system is 
                designed to capture and generate, the study and 
                reporting periods covered by each system, and the 
                extent to which the information so generated is made 
                widely available through publication;
                    ``(C) identify gaps in knowledge related to 
                children's health status, health disparities among 
                subgroups of children, the effects of social conditions 
                on children's health status and use and effectiveness 
                of health care, and the relationship between child 
                health status and family income, family stability and 
                preservation, and children's school readiness and 
                educational achievement and attainment; and
                    ``(D) make recommendations regarding improving and 
                strengthening the timeliness, quality, and public 
                transparency and accessibility of information about 
                child health and health care quality.
            ``(2) Funding.--Up to $1,000,000 of the amount appropriated 
        under subsection (i) for a fiscal year shall be used to carry 
        out this subsection.
    ``(h) Rule of Construction.--Notwithstanding any other provision in 
this section, no evidence based quality measure developed, published, 
or used as a basis of measurement or reporting under this section may 
be used to establish an irrebuttable presumption regarding either the 
medical necessity of care or the maximum permissible coverage for any 
individual child who is eligible for and receiving medical assistance 
under title XIX or child health assistance under title XXI .
    ``(i) Appropriation.--Out of any funds in the Treasury not 
otherwise appropriated, there is appropriated for each of fiscal years 
2008 through 2012, $45,000,000 for the purpose of carrying out this 
section (other than subsection (e)). Funds appropriated under this 
subsection shall remain available until expended.''.
    (b) Increased Matching Rate for Collecting and Reporting on Child 
Health Measures.--Section 1903(a)(3)(A) (42 U.S.C. 1396b(a)(3)(A)), is 
amended--
            (1) by striking ``and'' at the end of clause (i); and
            (2) by adding at the end the following new clause:
                    ``(iii) an amount equal to the Federal medical 
                assistance percentage (as defined in section 1905(b)) 
                of so much of the sums expended during such quarter (as 
                found necessary by the Secretary for the proper and 
                efficient administration of the State plan) as are 
                attributable to such developments or modifications of 
                systems of the type described in clause (i) as are 
                necessary for the efficient collection and reporting on 
                child health measures; and''.

SEC. 502. IMPROVED INFORMATION REGARDING ACCESS TO COVERAGE UNDER CHIP.

    (a) Inclusion of Process and Access Measures in Annual State 
Reports.--Section 2108 (42 U.S.C. 1397hh) is amended--
            (1) in subsection (a), in the matter preceding paragraph 
        (1), by striking ``The State'' and inserting ``Subject to 
        subsection (e), the State''; and
            (2) by adding at the end the following new subsection:
    ``(e) Information Required for Inclusion in State Annual Report.--
The State shall include the following information in the annual report 
required under subsection (a):
            ``(1) Eligibility criteria, enrollment, and retention data 
        (including data with respect to continuity of coverage or 
        duration of benefits).
            ``(2) Data regarding the extent to which the State uses 
        process measures with respect to determining the eligibility of 
        children under the State child health plan, including measures 
        such as 12-month continuous eligibility, self-declaration of 
        income for applications or renewals, or presumptive 
        eligibility.
            ``(3) Data regarding denials of eligibility and 
        redeterminations of eligibility.
            ``(4) Data regarding access to primary and specialty 
        services, access to networks of care, and care coordination 
        provided under the State child health plan, using quality care 
        and consumer satisfaction measures included in the Consumer 
        Assessment of Healthcare Providers and Systems (CAHPS) survey.
            ``(5) If the State provides child health assistance in the 
        form of premium assistance for the purchase of coverage under a 
        group health plan, data regarding the provision of such 
        assistance, including the extent to which employer-sponsored 
        health insurance coverage is available for children eligible 
        for child health assistance under the State child health plan, 
        the range of the monthly amount of such assistance provided on 
        behalf of a child or family, the number of children or families 
        provided such assistance on a monthly basis, the income of the 
        children or families provided such assistance, the benefits and 
        cost-sharing protection provided under the State child health 
        plan to supplement the coverage purchased with such premium 
        assistance, the effective strategies the State engages in to 
        reduce any administrative barriers to the provision of such 
        assistance, and, the effects, if any, of the provision of such 
        assistance on preventing the coverage provided under the State 
        child health plan from substituting for coverage provided under 
        employer-sponsored health insurance offered in the State.
            ``(6) To the extent applicable, a description of any State 
        activities that are designed to reduce the number of uncovered 
        children in the State, including through a State health 
        insurance connector program or support for innovative private 
        health coverage initiatives.''.
    (b) GAO Study and Report on Access to Primary and Speciality 
Services.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study of children's access to primary 
        and specialty services under Medicaid and CHIP, including--
                    (A) the extent to which providers are willing to 
                treat children eligible for such programs;
                    (B) information on such children's access to 
                networks of care;
                    (C) geographic availability of primary and 
                specialty services under such programs;
                    (D) the extent to which care coordination is 
                provided for children's care under Medicaid and CHIP; 
                and
                    (E) as appropriate, information on the degree of 
                availability of services for children under such 
                programs.
            (2) Report.--Not later than 2 years after the date of 
        enactment of this Act, the Comptroller General shall submit a 
        report to the appropriate committees of Congress on the study 
        conducted under paragraph (1) that includes recommendations for 
        such Federal and State legislative and administrative changes 
        as the Comptroller General determines are necessary to address 
        any barriers to access to children's care under Medicaid and 
        CHIP that may exist.

SEC. 503. APPLICATION OF CERTAIN MANAGED CARE QUALITY SAFEGUARDS TO 
              CHIP.

    Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)), as amended by section 
204(b), is amended by redesignating subparagraph (E) (as added by such 
section) as subparagraph (F) and by inserting after subparagraph (D) 
the following new subparagraph:
                    ``(E) Subsections (a)(4), (a)(5), (b), (c), (d), 
                and (e) of section 1932 (relating to requirements for 
                managed care).''.

                        TITLE VI--MISCELLANEOUS

SEC. 601. TECHNICAL CORRECTION REGARDING CURRENT STATE AUTHORITY UNDER 
              MEDICAID.

    (a) In General.--Only with respect to expenditures for medical 
assistance under a State Medicaid plan, including any waiver of such 
plan, for fiscal years 2007 and 2008, a State may elect, 
notwithstanding the fourth sentence of subsection (b) of section 1905 
of the Social Security Act (42 U.S.C. 1396d) or subsection (u) of such 
section--
            (1) to cover individuals described in section 
        1902(a)(10)(A)(ii)(IX) of the Social Security Act and, at its 
        option, to apply less restrictive methodologies to such 
        individuals under section 1902(r)(2) of such Act or 
        1931(b)(2)(C) of such Act and thereby receive Federal financial 
        participation for medical assistance for such individuals under 
        title XIX of the Social Security Act; or
            (2) to receive Federal financial participation for 
        expenditures for medical assistance under title XIX of such Act 
        for children described in paragraph (2)(B) or (3) of section 
        1905(u) of such Act based on the Federal medical assistance 
        percentage, as otherwise determined based on the first and 
        third sentences of subsection (b) of section 1905 of the Social 
        Security Act, rather than on the basis of an enhanced FMAP (as 
        defined in section 2105(b) of such Act).
    (b) Repeal.--Effective October 1, 2008, subsection (a) is repealed.
    (c) Hold Harmless.--No State that elects the option described in 
subsection (a) shall be treated as not having been authorized to make 
such election and to receive Federal financial participation for 
expenditures for medical assistance described in that subsection for 
fiscal years 2007 and 2008 as a result of the repeal of the subsection 
under subsection (b).

SEC. 602. PAYMENT ERROR RATE MEASUREMENT (``PERM'').

    (a) Expenditures Related to Compliance With Requirements.--
            (1) Enhanced payments.--Section 2105(c) (42 U.S.C. 
        1397ee(c)), as amended by section 401(a), is amended by adding 
        at the end the following new paragraph:
            ``(11) Enhanced payments.--Notwithstanding subsection (b), 
        the enhanced FMAP with respect to payments under subsection (a) 
        for expenditures related to the administration of the payment 
        error rate measurement (PERM) requirements applicable to the 
        State child health plan in accordance with the Improper 
        Payments Information Act of 2002 and parts 431 and 457 of title 
        42, Code of Federal Regulations (or any related or successor 
        guidance or regulations) shall in no event be less than 90 
        percent.''.
            (2) Exclusion of from cap on administrative expenditures.--
        Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)C)), as amended by 
        section 402(b), is amended by adding at the end the following:
                            ``(v) Payment error rate measurement (perm) 
                        expenditures.--Expenditures related to the 
                        administration of the payment error rate 
                        measurement (PERM) requirements applicable to 
                        the State child health plan in accordance with 
                        the Improper Payments Information Act of 2002 
                        and parts 431 and 457 of title 42, Code of 
                        Federal Regulations (or any related or 
                        successor guidance or regulations).''.
    (b) Final Rule Required To Be in Effect for All States.--
Notwithstanding parts 431 and 457 of title 42, Code of Federal 
Regulations (as in effect on the date of enactment of this Act), the 
Secretary shall not calculate or publish any national or State-specific 
error rate based on the application of the payment error rate 
measurement (in this section referred to as ``PERM'') requirements to 
CHIP until after the date that is 6 months after the date on which a 
final rule implementing such requirements in accordance with the 
requirements of subsection (c) is in effect for all States. Any 
calculation of a national error rate or a State specific error rate 
after such final rule in effect for all States may only be inclusive of 
errors, as defined in such final rule or in guidance issued within a 
reasonable time frame after the effective date for such final rule that 
includes detailed guidance for the specific methodology for error 
determinations.
    (c) Requirements for Final Rule.--For purposes of subsection (b), 
the requirements of this subsection are that the final rule 
implementing the PERM requirements shall include--
            (1) clearly defined criteria for errors for both States and 
        providers;
            (2) a clearly defined process for appealing error 
        determinations by review contractors; and
            (3) clearly defined responsibilities and deadlines for 
        States in implementing any corrective action plans.
    (d) Option for Application of Data for Certain States Under the 
Interim Final Rule.--
            (1) Option for states in first application cycle.--After 
        the final rule implementing the PERM requirements in accordance 
        with the requirements of subsection (c) is in effect for all 
        States, a State for which the PERM requirements were first in 
        effect under an interim final rule for fiscal year 2007 may 
        elect to accept any payment error rate determined in whole or 
        in part for the State on the basis of data for that fiscal year 
        or may elect to not have any payment error rate determined on 
        the basis of such data and, instead, shall be treated as if 
        fiscal year 2010 were the first fiscal year for which the PERM 
        requirements apply to the State.
            (2) Option for states in second application cycle.--If such 
        final rule is not in effect for all States by July 1, 2008, a 
        State for which the PERM requirements were first in effect 
        under an interim final rule for fiscal year 2008 may elect to 
        accept any payment error rate determined in whole or in part 
        for the State on the basis of data for that fiscal year or may 
        elect to not have any payment error rate determined on the 
        basis of such data and, instead, shall be treated as if fiscal 
        year 2011 were the first fiscal year for which the PERM 
        requirements apply to the State.
    (e) Harmonization of MEQC and PERM.--
            (1) Reduction of redundancies.--The Secretary shall review 
        the Medicaid Eligibility Quality Control (in this subsection 
        referred to as the ``MEQC'') requirements with the PERM 
        requirements and coordinate consistent implementation of both 
        sets of requirements, while reducing redundancies.
            (2) State option to apply perm data.--A State may elect, 
        for purposes of determining the erroneous excess payments for 
        medical assistance ratio applicable to the State for a fiscal 
        year under section 1903(u) of the Social Security Act (42 
        U.S.C. 1396b(u)) to substitute data resulting from the 
        application of the PERM requirements to the State after the 
        final rule implementing such requirements is in effect for all 
        States for data obtained from the application of the MEQC 
        requirements to the State with respect to a fiscal year.
    (f) Identification of Improved State-Specific Sample Sizes.--The 
Secretary shall establish State-specific sample sizes for application 
of the PERM requirements with respect to State child health plans for 
fiscal years beginning with fiscal year 2009, on the basis of such 
information as the Secretary determines appropriate. In establishing 
such sample sizes, the Secretary shall, to the greatest extent 
practicable--
            (1) minimize the administrative cost burden on States under 
        Medicaid and CHIP; and
            (2) maintain State flexibility to manage such programs.

SEC. 603. ELIMINATION OF COUNTING MEDICAID CHILD PRESUMPTIVE 
              ELIGIBILITY COSTS AGAINST TITLE XXI ALLOTMENT.

    Section 2105(a)(1) (42 U.S.C. 1397ee(a)(1)) is amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``(or, in the case of expenditures described in subparagraph 
        (B), the Federal medical assistance percentage (as defined in 
        the first sentence of section 1905(b)))''; and
            (2) by striking subparagraph (B) and inserting the 
        following new subparagraph:
                    ``(B) [reserved]''.

SEC. 604. IMPROVING DATA COLLECTION.

    (a) Increased Appropriation.--Section 2109(b)(2) (42 U.S.C. 
1397ii(b)(2)) is amended by striking ``$10,000,000 for fiscal year 
2000'' and inserting ``$20,000,000 for fiscal year 2008''.
    (b) Use of Additional Funds.--Section 2109(b) (42 U.S.C. 
1397ii(b)), as amended by subsection (a), is amended--
            (1) by redesignating paragraph (2) as paragraph (4); and
            (2) by inserting after paragraph (1), the following new 
        paragraphs:
            ``(2) Additional requirements.--In addition to making the 
        adjustments required to produce the data described in paragraph 
        (1), with respect to data collection occurring for fiscal years 
        beginning with fiscal year 2008, in appropriate consultation 
        with the Secretary of Health and Human Services, the Secretary 
        of Commerce shall do the following:
                    ``(A) Make appropriate adjustments to the Current 
                Population Survey to develop more accurate State-
                specific estimates of the number of children enrolled 
                in health coverage under title XIX or this title.
                    ``(B) Make appropriate adjustments to the Current 
                Population Survey to improve the survey estimates used 
                to compile the State-specific and national number of 
                low-income children without health insurance for 
                purposes of determining allotments under subsections 
                (c) and (i) of section 2104 and making payments to 
                States from the CHIP Incentive Bonuses Pool established 
                under subsection (j) of such section, the CHIP 
                Contingency Fund established under subsection (k) of 
                such section, and, to the extent applicable to a State, 
                from the block grant set aside under section 
                2112(b)(2)(A)(i) for each of fiscal years 2010 through 
                2012.
                    ``(C) Include health insurance survey information 
                in the American Community Survey related to children.
                    ``(D) Assess whether American Community Survey 
                estimates, once such survey data are first available, 
                produce more reliable estimates than the Current 
                Population Survey with respect to the purposes 
                described in subparagraph (B).
                    ``(E) On the basis of the assessment required under 
                subparagraph (D), recommend to the Secretary of Health 
                and Human Services whether American Community Survey 
                estimates should be used in lieu of, or in some 
                combination with, Current Population Survey estimates 
                for the purposes described in subparagraph (B).
                    ``(F) Continue making the adjustments described in 
                the last sentence of paragraph (1) with respect to 
                expansion of the sample size used in State sampling 
                units, the number of sampling units in a State, and 
                using an appropriate verification element.
            ``(3) Authority for the secretary of health and human 
        services to transition to the use of all, or some combination 
        of, acs estimates upon recommendation of the secretary of 
        commerce.--If, on the basis of the assessment required under 
        paragraph (2)(D), the Secretary of Commerce recommends to the 
        Secretary of Health and Human Services that American Community 
        Survey estimates should be used in lieu of, or in some 
        combination with, Current Population Survey estimates for the 
        purposes described in paragraph (2)(B), the Secretary of Health 
        and Human Services may provide for a period during which the 
        Secretary may transition from carrying out such purposes 
        through the use of Current Population Survey estimates to the 
        use of American Community Survey estimates (in lieu of, or in 
        combination with the Current Population Survey estimates, as 
        recommended), provided that any such transition is implemented 
        in a manner that is designed to avoid adverse impacts upon 
        States with approved State child health plans under this 
        title.''.

SEC. 605. DEFICIT REDUCTION ACT TECHNICAL CORRECTIONS.

    (a) Determination of Medicaid Patient Days for DSH Computation.--
            (1) In general.--Section 5002 of the Deficit Reduction Act 
        of 2005 (Public Law 109-171, 120 Stat. 31) is amended by adding 
        at the end the following new subsection:
    ``(c) Determination of Medicaid Patient Days for Discharges 
Occurring On or After the Date of Enactment of This Subsection.--For 
discharges occurring on or after the date of enactment of this 
subsection, in determining under section 1886(d)(5)(F)(vi)(II) of the 
Social Security Act (42 U.S.C. 1395ww(d)(5)(F)(vi)(II)) the number of 
the hospital's patient days for the applicable cost reporting period 
which consist of patients who (for such days) were eligible for medical 
assistance under a State plan approved under title XIX, the Secretary 
shall include patient days of patients who are eligible to receive 
inpatient hospital benefits under a demonstration project approved 
under title XI and shall not include patient days under such a project 
if the patient is not eligible to receive inpatient hospital benefits 
under the project.''.
            (2) Conforming amendment.--The last sentence of section 
        1886(d)(5)(F)(vi) of the Social Security Act (42 U.S.C. 
        1395ww(d)(5)(F)(vi)), as added by section 5002(a) of the 
        Deficit Reduction Act of 2005 (Public Law 109-171), is amended 
        by striking ``In determining under subclause (II)'' and 
        inserting ``Subject to section 5002(c) of the Deficit Reduction 
        Act of 2005, in determining under subclause (II)''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on the date of enactment of this Act.
    (b) State Flexibility in Benefit Packages.--
            (1) Clarification of requirement to provide epsdt services 
        for all children in benchmark benefit packages.--Section 
        1937(a)(1) (42 U.S.C. 1396u-7(a)(1)), as inserted by section 
        6044(a) of the Deficit Reduction Act of 2005 (Public Law 109-
        171, 120 Stat. 88), is amended--
                    (A) in subparagraph (A)--
                            (i) in the matter before clause (i), by 
                        striking ``enrollment in coverage that 
                        provides'' and inserting ``coverage that'';
                            (ii) in clause (i), by inserting 
                        ``provides'' after ``(i)''; and
                            (iii) by striking clause (ii) and inserting 
                        the following:
                            ``(ii) for any individual described in 
                        section 1905(a)(4)(B) who is eligible under the 
                        State plan in accordance with paragraphs (10) 
                        and (17) of section 1902(a), consists of the 
                        items and services described in section 
                        1905(a)(4)(B) (relating to early and periodic 
                        screening, diagnostic, and treatment services 
                        defined in section 1905(r)) and provided in 
                        accordance with the requirements of section 
                        1902(a)(43).'';
                    (B) in subparagraph (C)--
                            (i) in the heading, by striking ``wrap-
                        around'' and inserting ``additional''; and
                            (ii) by striking ``wrap-around or''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(E) Rule of construction.--Nothing in this 
                paragraph shall be construed as--
                            ``(i) requiring a State to offer all or any 
                        of the items and services required by 
                        subparagraph (A)(ii) through an issuer of 
                        benchmark coverage described in subsection 
                        (b)(1) or benchmark equivalent coverage 
                        described in subsection (b)(2); or
                            ``(ii) preventing a State from offering all 
                        or any of the items and services required by 
                        subparagraph (A)(ii) through an issuer of 
                        benchmark coverage described in subsection 
                        (b)(1) or benchmark equivalent coverage 
                        described in subsection (b)(2).''.
            (2) Correction of reference to children in foster care 
        receiving child welfare services.--Section 1937(a)(2)(B)(viii) 
        (42 U.S.C. 1396u-7(a)(2)(B)(viii), as inserted by section 
        6044(a) of the Deficit Reduction Act of 2005, is amended by 
        striking ``aid or assistance is made available under part B of 
        title IV to children in foster care and individuals'' and 
        inserting ``child welfare services are made available under 
        part B of title IV on the basis of being a child in foster care 
        or''.
            (3) Transparency.--Section 1937 (42 U.S.C. 1396u-7), as 
        inserted by section 6044(a) of the Deficit Reduction Act of 
        2005, is amended by adding at the end the following:
    ``(c) Publication of Provisions Affected.--Not later than 30 days 
after the date the Secretary approves a State plan amendment to provide 
benchmark benefits in accordance with subsections (a) and (b), the 
Secretary shall publish in the Federal Register and on the Internet 
website of the Centers for Medicare & Medicaid Services, a list of the 
provisions of this title that the Secretary has determined do not apply 
in order to enable the State to carry out such plan amendment and the 
reason for each such determination.''.
            (4) Effective date.--The amendments made by this subsection 
        shall take effect as if included in the amendment made by 
        section 6044(a) of the Deficit Reduction Act of 2005.

SEC. 606. ELIMINATION OF CONFUSING PROGRAM REFERENCES.

    Section 704 of the Medicare, Medicaid, and SCHIP Balanced Budget 
Refinement Act of 1999, as enacted into law by division B of Public Law 
106-113 (113 Stat. 1501A-402) is repealed.

SEC. 607. MENTAL HEALTH PARITY IN CHIP PLANS.

    (a) Assurance of Parity.--Section 2103(c) (42 U.S.C. 1397cc(c)) is 
amended--
            (1) by redesignating paragraph (5) as paragraph (6); and
            (2) by inserting after paragraph (4), the following:
            ``(5) Mental health services parity.--
                    ``(A) In general.--In the case of a State child 
                health plan that provides both medical and surgical 
                benefits and mental health or substance abuse benefits, 
                such plan shall ensure that the financial requirements 
                and treatment limitations applicable to such mental 
                health or substance abuse benefits are no more 
                restrictive than the financial requirements and 
                treatment limitations applied to substantially all 
                medical and surgical benefits covered by the plan.
                    ``(B) Deemed compliance.--To the extent that a 
                State child health plan includes coverage with respect 
                to an individual described in section 1905(a)(4)(B) and 
                covered under the State plan under section 
                1902(a)(10)(A) of the services described in section 
                1905(a)(4)(B) (relating to early and periodic 
                screening, diagnostic, and treatment services defined 
                in section 1905(r)) and provided in accordance with 
                section 1902(a)(43), such plan shall be deemed to 
                satisfy the requirements of subparagraph (A).''.
    (b) Conforming Amendments.--Section 2103 (42 U.S.C. 1397cc) is 
amended--
            (1) in subsection (a), in the matter preceding paragraph 
        (1), by striking ``subsection (c)(5)'' and inserting 
        ``paragraphs (5) and (6) of subsection (c)''; and
            (2) in subsection (c)(2), by striking subparagraph (B) and 
        redesignating subparagraphs (C) and (D) as subparagraphs (B) 
        and (C), respectively.

SEC. 608. DENTAL HEALTH GRANTS.

    Title XXI (42 U.S.C. 1397aa et seq.), as amended by section 201, is 
amended by adding at the end the following:

``SEC. 2114. DENTAL HEALTH GRANTS.

    ``(a) Authority To Award Grants.--
            ``(1) In general.--From the amount appropriated under 
        subsection (e), the Secretary shall award grants from amounts 
        to eligible States for the purpose of carrying out programs and 
        activities that are designed to improve the availability of 
        dental services and strengthen dental coverage for targeted 
        low-income children enrolled in State child health plans.
            ``(2) Eligible state.--In this section, the term `eligible 
        State' means a State with an approved State child health plan 
        under this title that submits an application under subsection 
        (b) that is approved by Secretary.
    ``(b) Application.--An eligible State that desires to receive a 
grant under this paragraph shall submit an application to the Secretary 
in such form and manner, and containing such information, as the 
Secretary may require. Such application shall include--
            ``(1) a detailed description of the programs and activities 
        proposed to be conducted with funds awarded under the grant;
            ``(2) quality and outcomes performance measures to evaluate 
        the effectiveness of such activities; and
            ``(3) an assurance that the State shall--
                    ``(A) conduct an assessment of the effectiveness of 
                such activities against such performance measures; and
                    ``(B) cooperate with the collection and reporting 
                of data and other information determined as a result of 
                conducting such assessments to the Secretary, in such 
                form and manner as the Secretary shall require.
    ``(c) Maintenance of Effort for States Awarded Grants; No State 
Match Required.--In the case of a State that is awarded a grant under 
this section--
            ``(1) the State share of funds expended for dental services 
        under the State child health plan shall not be less than the 
        State share of such funds expended in the fiscal year preceding 
        the first fiscal year for which the grant is awarded; and
            ``(2) no State matching funds shall be required for the 
        State to receive a grant under this section.
    ``(d) Annual Report.--The Secretary shall submit an annual report 
to the appropriate committees of Congress regarding the grants awarded 
under this section that includes--
            ``(1) State specific descriptions of the programs and 
        activities conducted with funds awarded under such grants; and
            ``(2) information regarding the assessments required of 
        States under subsection (b)(3).
    ``(e) Appropriation.--Out of any funds in the Treasury not 
otherwise appropriated, there is appropriated, $200,000,000 for the 
period of fiscal years 2008 through 2012, to remain available until 
expended, for the purpose of awarding grants to States under this 
section. Amounts appropriated and paid under the authority of this 
section shall be in addition to amounts appropriated under section 2104 
and paid to States in accordance with section 2105.''.

SEC. 609. APPLICATION OF PROSPECTIVE PAYMENT SYSTEM FOR SERVICES 
              PROVIDED BY FEDERALLY-QUALIFIED HEALTH CENTERS AND RURAL 
              HEALTH CLINICS.

    (a) Application of Prospective Payment System.--
            (1) In general.--Section 2107(e)(1) (42 U.S.C. 
        1397gg(e)(1)), as amended by sections 204(b) and 503, is 
        amended by inserting after subparagraph (A) the following new 
        subparagraph (and redesignating the succeeding subparagraphs 
        accordingly):
                    ``(B) Section 1902(bb) (relating to payment for 
                services provided by Federally-qualified health centers 
                and rural health clinics).''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to services provided on or after October 1, 2008.
    (b) Transition Grants.--
            (1) Appropriation.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated to the Secretary 
        for fiscal year 2008, $5,000,000, to remain available until 
        expended, for the purpose of awarding grants to States with 
        State child health plans under CHIP that are operated 
        separately from the State Medicaid plan under title XIX of the 
        Social Security Act (including any waiver of such plan), or in 
        combination with the State Medicaid plan, for expenditures 
        related to transitioning to compliance with the requirement of 
        section 2107(e)(1)(B) of the Social Security Act (as added by 
        subsection (a)) to apply the prospective payment system 
        established under section 1902(bb) of the such Act (42 U.S.C. 
        1396a(bb)) to services provided by Federally-qualified health 
        centers and rural health clinics.
            (2) Monitoring and report.--The Secretary shall monitor the 
        impact of the application of such prospective payment system on 
        the States described in paragraph (1) and, not later than 
        October 1, 2010, shall report to Congress on any effect on 
        access to benefits, provider payment rates, or scope of 
        benefits offered by such States as a result of the application 
        of such payment system.

                     TITLE VII--REVENUE PROVISIONS

SEC. 701. INCREASE IN EXCISE TAX RATE ON TOBACCO PRODUCTS.

    (a) Cigars.--Section 5701(a) of the Internal Revenue Code of 1986 
is amended--
            (1) by striking ``$1.828 cents per thousand ($1.594 cents 
        per thousand on cigars removed during 2000 or 2001)'' in 
        paragraph (1) and inserting ``$50.00 per thousand'',
            (2) by striking ``20.719 percent (18.063 percent on cigars 
        removed during 2000 or 2001)'' in paragraph (2) and inserting 
        ``53.13 percent'', and
            (3) by striking ``$48.75 per thousand ($42.50 per thousand 
        on cigars removed during 2000 or 2001)'' in paragraph (2) and 
        inserting ``$10.00 per cigar''.
    (b) Cigarettes.--Section 5701(b) of such Code is amended--
            (1) by striking ``$19.50 per thousand ($17 per thousand on 
        cigarettes removed during 2000 or 2001)'' in paragraph (1) and 
        inserting ``$50.00 per thousand'', and
            (2) by striking ``$40.95 per thousand ($35.70 per thousand 
        on cigarettes removed during 2000 or 2001)'' in paragraph (2) 
        and inserting ``$104.9999 cents per thousand''.
    (c) Cigarette Papers.--Section 5701(c) of such Code is amended by 
striking ``1.22 cents (1.06 cents on cigarette papers removed during 
2000 or 2001)'' and inserting ``3.13 cents''.
    (d) Cigarette Tubes.--Section 5701(d) of such Code is amended by 
striking ``2.44 cents (2.13 cents on cigarette tubes removed during 
2000 or 2001)'' and inserting ``6.26 cents''.
    (e) Smokeless Tobacco.--Section 5701(e) of such Code is amended--
            (1) by striking ``58.5 cents (51 cents on snuff removed 
        during 2000 or 2001)'' in paragraph (1) and inserting 
        ``$1.50'', and
            (2) by striking ``19.5 cents (17 cents on chewing tobacco 
        removed during 2000 or 2001)'' in paragraph (2) and inserting 
        ``50 cents''.
    (f) Pipe Tobacco.--Section 5701(f) of such Code is amended by 
striking ``$1.0969 cents (95.67 cents on pipe tobacco removed during 
2000 or 2001)'' and inserting ``$2.8126 cents''.
    (g) Roll-Your-Own Tobacco.--Section 5701(g) of such Code is amended 
by striking ``$1.0969 cents (95.67 cents on roll-your-own tobacco 
removed during 2000 or 2001)'' and inserting ``$8.8889 cents''.
    (h) Floor Stocks Taxes.--
            (1) Imposition of tax.--On tobacco products and cigarette 
        papers and tubes manufactured in or imported into the United 
        States which are removed before January 1, 2008, and held on 
        such date for sale by any person, there is hereby imposed a tax 
        in an amount equal to the excess of--
                    (A) the tax which would be imposed under section 
                5701 of the Internal Revenue Code of 1986 on the 
                article if the article had been removed on such date, 
                over
                    (B) the prior tax (if any) imposed under section 
                5701 of such Code on such article.
            (2) Credit against tax.--Each person shall be allowed as a 
        credit against the taxes imposed by paragraph (1) an amount 
        equal to $500. Such credit shall not exceed the amount of taxes 
        imposed by paragraph (1) on January 1, 2008, for which such 
        person is liable.
            (3) Liability for tax and method of payment.--
                    (A) Liability for tax.--A person holding tobacco 
                products, cigarette papers, or cigarette tubes on 
                January 1, 2008, to which any tax imposed by paragraph 
                (1) applies shall be liable for such tax.
                    (B) Method of payment.--The tax imposed by 
                paragraph (1) shall be paid in such manner as the 
                Secretary shall prescribe by regulations.
                    (C) Time for payment.--The tax imposed by paragraph 
                (1) shall be paid on or before April 1, 2008.
            (4) Articles in foreign trade zones.--Notwithstanding the 
        Act of June 18, 1934 (commonly known as the Foreign Trade Zone 
        Act, 48 Stat. 998, 19 U.S.C. 81a et seq.) or any other 
        provision of law, any article which is located in a foreign 
        trade zone on January 1, 2008, shall be subject to the tax 
        imposed by paragraph (1) if--
                    (A) internal revenue taxes have been determined, or 
                customs duties liquidated, with respect to such article 
                before such date pursuant to a request made under the 
                1st proviso of section 3(a) of such Act, or
                    (B) such article is held on such date under the 
                supervision of an officer of the United States Customs 
                and Border Protection of the Department of Homeland 
                Security pursuant to the 2d proviso of such section 
                3(a).
            (5) Definitions.--For purposes of this subsection--
                    (A) In general.--Any term used in this subsection 
                which is also used in section 5702 of the Internal 
                Revenue Code of 1986 shall have the same meaning as 
                such term has in such section.
                    (B) Secretary.--The term ``Secretary'' means the 
                Secretary of the Treasury or the Secretary's delegate.
            (6) Controlled groups.--Rules similar to the rules of 
        section 5061(e)(3) of such Code shall apply for purposes of 
        this subsection.
            (7) Other laws applicable.--All provisions of law, 
        including penalties, applicable with respect to the taxes 
        imposed by section 5701 of such Code shall, insofar as 
        applicable and not inconsistent with the provisions of this 
        subsection, apply to the floor stocks taxes imposed by 
        paragraph (1), to the same extent as if such taxes were imposed 
        by such section 5701. The Secretary may treat any person who 
        bore the ultimate burden of the tax imposed by paragraph (1) as 
        the person to whom a credit or refund under such provisions may 
        be allowed or made.
    (i) Effective Date.--The amendments made by this section shall 
apply to articles removed (as defined in section 5702(j) of the 
Internal Revenue Code of 1986) after December 31, 2007.

SEC. 702. ADMINISTRATIVE IMPROVEMENTS.

    (a) Permit, Report, and Record Requirements for Manufacturers and 
Importers of Processed Tobacco.--
            (1) Permits.--
                    (A) Application.--Section 5712 of the Internal 
                Revenue Code of 1986 is amended by inserting ``or 
                processed tobacco'' after ``tobacco products''.
                    (B) Issuance.--Section 5713(a) of such Code is 
                amended by inserting ``or processed tobacco'' after 
                ``tobacco products''.
            (2) Inventories and reports.--
                    (A) Inventories.--Section 5721 of such Code is 
                amended by inserting ``, processed tobacco,'' after 
                ``tobacco products''.
                    (B) Reports.--Section 5722 of such Code is amended 
                by inserting ``, processed tobacco,'' after ``tobacco 
                products''.
            (3) Records.--Section 5741 of such Code is amended by 
        inserting ``, processed tobacco,'' after ``tobacco products''.
            (4) Manufacturer of processed tobacco.--Section 5702 of 
        such Code is amended by adding at the end the following new 
        subsection:
    ``(p) Manufacturer of Processed Tobacco.--
            ``(1) In general.--The term `manufacturer of processed 
        tobacco' means any person who processes any tobacco other than 
        tobacco products.
            ``(2) Processed tobacco.--The processing of tobacco shall 
        not include the farming or growing of tobacco or the handling 
        of tobacco solely for sale, shipment, or delivery to a 
        manufacturer of tobacco products or processed tobacco.''.
            (5) Conforming amendment.--Section 5702(k) of such Code is 
        amended by inserting ``, or any processed tobacco,'' after 
        ``nontaxpaid tobacco products or cigarette papers or tubes''.
            (6) Effective date.--The amendments made by this subsection 
        shall take effect on January 1, 2008.
    (b) Basis for Denial, Suspension, or Revocation of Permits.--
            (1) Denial.--Paragraph (3) of section 5712 of such Code is 
        amended to read as follows:
            ``(3) such person (including, in the case of a corporation, 
        any officer, director, or principal stockholder and, in the 
        case of a partnership, a partner)--
                    ``(A) is, by reason of his business experience, 
                financial standing, or trade connections or by reason 
                of previous or current legal proceedings involving a 
                felony violation of any other provision of Federal 
                criminal law relating to tobacco products, cigarette 
                paper, or cigarette tubes, not likely to maintain 
                operations in compliance with this chapter,
                    ``(B) has been convicted of a felony violation of 
                any provision of Federal or State criminal law relating 
                to tobacco products, cigarette paper, or cigarette 
                tubes, or
                    ``(C) has failed to disclose any material 
                information required or made any material false 
                statement in the application therefor.''.
            (2) Suspension or revocation.--Subsection (b) of section 
        5713 of such Code is amended to read as follows:
    ``(b) Suspension or Revocation.--
            ``(1) Show cause hearing.--If the Secretary has reason to 
        believe that any person holding a permit--
                    ``(A) has not in good faith complied with this 
                chapter, or with any other provision of this title 
                involving intent to defraud,
                    ``(B) has violated the conditions of such permit,
                    ``(C) has failed to disclose any material 
                information required or made any material false 
                statement in the application for such permit,
                    ``(D) has failed to maintain his premises in such 
                manner as to protect the revenue,
                    ``(E) is, by reason of previous or current legal 
                proceedings involving a felony violation of any other 
                provision of Federal criminal law relating to tobacco 
                products, cigarette paper, or cigarette tubes, not 
                likely to maintain operations in compliance with this 
                chapter, or
                    ``(F) has been convicted of a felony violation of 
                any provision of Federal or State criminal law relating 
                to tobacco products, cigarette paper, or cigarette 
                tubes,
        the Secretary shall issue an order, stating the facts charged, 
        citing such person to show cause why his permit should not be 
        suspended or revoked.
            ``(2) Action following hearing.--If, after hearing, the 
        Secretary finds that such person has not shown cause why his 
        permit should not be suspended or revoked, such permit shall be 
        suspended for such period as the Secretary deems proper or 
        shall be revoked.''.
    (c) Application of Internal Revenue Code Statute of Limitations for 
Alcohol and Tobacco Excise Taxes.--Section 514(a) of the Tariff Act of 
1930 (19 U.S.C. 1514(a)) is amended by striking ``and section 520 
(relating to refunds)'' and inserting ``section 520 (relating to 
refunds), and section 6501 of the Internal Revenue Code of 1986 (but 
only with respect to taxes imposed under chapters 51 and 52 of such 
Code)''.
    (d) Expansion of Definition of Roll-Your-Own Tobacco.--
            (1) In general.--Section 5702(o) of the Internal Revenue 
        Code of 1986 is amended by inserting ``or cigars, or for use as 
        wrappers thereof'' before the period at the end.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to articles removed (as defined in section 5702(j) 
        of the Internal Revenue Code of 1986) after December 31, 2007.
    (e) Time of Tax for Unlawfully Manufactured Tobacco Products.--
Section 5703(b)(2) of such Code is amended by adding at the end the 
following new subparagraph:
                    ``(F) Special rule for unlawfully manufactured 
                tobacco products.--In the case of any tobacco products, 
                cigarette paper, or cigarette tubes produced in the 
                United States at any place other than the premises of a 
                manufacturer of tobacco products, cigarette paper, or 
                cigarette tubes that has filed the bond and obtained 
                the permit required under this chapter, tax shall be 
                due and payable immediately upon manufacture.''.

SEC. 703. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

    Subparagraph (B) of section 401(1) of the Tax Increase Prevention 
and Reconciliation Act of 2005 is amended by striking ``114.50 
percent'' and inserting ``113.25 percent''.

                       TITLE VIII--EFFECTIVE DATE

SEC. 801. EFFECTIVE DATE.

    (a) In General.--Unless otherwise provided in this Act, subject to 
subsection (b), the amendments made by this Act shall take effect on 
October 1, 2007, and shall apply to child health assistance and medical 
assistance provided on or after that date without regard to whether or 
not final regulations to carry out such amendments have been 
promulgated by such date.
    (b) Exception for State Legislation.--In the case of a State plan 
under title XIX or XXI of the Social Security Act, which the Secretary 
determines requires State legislation in order for the plan to meet the 
additional requirements imposed by an amendment made by this Act, the 
State plan shall not be regarded as failing to comply with the 
requirements of such Act solely on the basis of its failure to meet 
these additional requirements before the first day of the first 
calendar quarter beginning after the close of the first regular session 
of the State legislature that begins after the date of enactment of 
this Act. For purposes of the preceding sentence, in the case of a 
State that has a 2-year legislative session, each year of the session 
shall be considered to be a separate regular session of the State 
legislature.
                                                       Calendar No. 288

110th CONGRESS

  1st Session

                                S. 1893

_______________________________________________________________________

                                 A BILL

To amend title XXI of the Social Security Act to reauthorize the State 
      Children's Health Insurance Program, and for other purposes.

_______________________________________________________________________

                July 27 (legislative day, July 26), 2007

                 Read twice and placed on the calendar
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