H. R. 2 

One Hundred Eleventh Congress 

of the 

United States of America 

AT THE FIRST SESSION 

Begun and held at the City of Washington on Tuesday, 

the sixth day of January, two thousand and nine 

An Act 

To amend title XXI of the Social Security Act to extend and improve the 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 2009’’. 

(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 CHIP; MEDICAID; 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 of this Act 

is as follows: 

Sec. 1. Short title; amendments to Social Security Act; references; table of contents. 

Sec. 2. Purpose. 

Sec. 3. General effective date; exception for State legislation; contingent effective 

date; reliance on law. 

TITLE I—FINANCING 

Subtitle A—Funding 

Sec. 101. Extension of CHIP. 

Sec. 102. Allotments for States and territories for fiscal years 2009 through 2013. 

Sec. 103. Child Enrollment Contingency Fund. 

Sec. 104. CHIP performance bonus payment to offset additional enrollment costs 

resulting from enrollment and retention efforts. 

Sec. 105. Two-year initial availability of CHIP allotments. 

Sec. 106. Redistribution of unused allotments. 

Sec. 107. Option for qualifying States to receive the enhanced portion of the CHIP 

matching rate for Medicaid coverage of certain children. 

Sec. 108. One-time appropriation. 

Sec. 109. Improving funding for the territories under CHIP and Medicaid. 

Subtitle B—Focus on Low-Income Children and Pregnant Women 

Sec. 111. State option to cover low-income pregnant women under CHIP through 

a State plan amendment. 
H. R. 2—2 

Sec. 112. Phase-out of coverage for nonpregnant childless adults under CHIP; conditions for coverage of parents. 

Sec. 113. Elimination of counting Medicaid child presumptive eligibility costs 

against title XXI allotment. 

Sec. 114. Limitation on matching rate for States that propose to cover children with 

effective family income that exceeds 300 percent of the poverty line. 

Sec. 115. State authority under Medicaid. 

TITLE II—OUTREACH AND ENROLLMENT 

Subtitle A—Outreach and Enrollment Activities 

Sec. 201. Grants and enhanced administrative funding for outreach and enrollment. 

Sec. 202. Increased outreach and enrollment of Indians. 

Sec. 203. State option to rely on findings from an Express Lane agency to conduct 

simplified eligibility determinations. 

Subtitle B—Reducing Barriers to Enrollment 

Sec. 211. Verification of declaration of citizenship or nationality for purposes of eligibility for Medicaid and CHIP. 

Sec. 212. Reducing administrative barriers to enrollment. 

Sec. 213. Model of Interstate coordinated enrollment and coverage process. 

Sec. 214. Permitting States to ensure coverage without a 5-year delay of certain 

children and pregnant women under the Medicaid program and CHIP. 

TITLE III—REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE 

Subtitle A—Additional State Option for Providing Premium Assistance 

Sec. 301. Additional State option for providing premium assistance. 

Sec. 302. Outreach, education, and enrollment assistance. 

Subtitle B—Coordinating Premium Assistance With Private Coverage 

Sec. 311. 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 IV—STRENGTHENING QUALITY OF CARE AND HEALTH OUTCOMES 

Sec. 401. Child health quality improvement activities for children enrolled in Medicaid or CHIP. 

Sec. 402. Improved availability of public information regarding enrollment of children in CHIP and Medicaid. 

Sec. 403. Application of certain managed care quality safeguards to CHIP. 

TITLE V—IMPROVING ACCESS TO BENEFITS 

Sec. 501. Dental benefits. 

Sec. 502. Mental health parity in CHIP plans. 

Sec. 503. Application of prospective payment system for services provided by Federally-qualified health centers and rural health clinics. 

Sec. 504. Premium grace period. 

Sec. 505. Clarification of coverage of services provided through school-based health 

centers. 

Sec. 506. Medicaid and CHIP Payment and Access Commission. 

TITLE VI—PROGRAM INTEGRITY AND OTHER MISCELLANEOUS 

PROVISIONS 

Subtitle A—Program Integrity and Data Collection 

Sec. 601. Payment error rate measurement (‘‘PERM’’). 

Sec. 602. Improving data collection. 

Sec. 603. Updated Federal evaluation of CHIP. 

Sec. 604. Access to records for IG and GAO audits and evaluations. 

Sec. 605. No Federal funding for illegal aliens; disallowance for unauthorized expenditures. 

Subtitle B—Miscellaneous Health Provisions 

Sec. 611. Deficit Reduction Act technical corrections. 

Sec. 612. References to title XXI. 

Sec. 613. Prohibiting initiation of new health opportunity account demonstration 

programs. 

Sec. 614. Adjustment in computation of Medicaid FMAP to disregard an extraordinary employer pension contribution. 
H. R. 2—3 

Sec. 615. Clarification treatment of regional medical center. 

Sec. 616. Extension of Medicaid DSH allotments for Tennessee and Hawaii. 

Sec. 617. GAO report on Medicaid managed care payment rates. 

Subtitle C—Other Provisions 

Sec. 621. Outreach regarding health insurance options available to children. 

Sec. 622. Sense of the Senate regarding access to affordable and meaningful health 

insurance coverage. 

TITLE VII—REVENUE PROVISIONS 

Sec. 701. Increase in excise tax rate on tobacco products. 

Sec. 702. Administrative improvements. 

Sec. 703. Treasury study concerning magnitude of tobacco smuggling in the United 

States. 

Sec. 704. Time for payment of corporate estimated taxes. 

SEC. 2. PURPOSE. 

It is the purpose of this Act to provide dependable and stable 

funding for children’s health insurance under titles XXI and XIX 

of the Social Security Act in order to enroll all six million uninsured 

children who are eligible, but not enrolled, for coverage today 

through such titles. 

SEC. 3. GENERAL EFFECTIVE DATE; EXCEPTION FOR STATE LEGISLATION; CONTINGENT EFFECTIVE DATE; RELIANCE ON LAW. 

(a) GENERAL EFFECTIVE DATE.—Unless otherwise provided in 

this Act, subject to subsections (b) through (d), this Act (and the 

amendments made by this Act) shall take effect on April 1, 2009, 

and shall apply to child health assistance and medical assistance 

provided on or after that date. 

(b) EXCEPTION FOR STATE LEGISLATION.—In the case of a State 

plan under title XIX or State child health plan under XXI of 

the Social Security Act, which the Secretary of Health and Human 

Services determines requires State legislation in order for the 

respective plan to meet one or more additional requirements 

imposed by amendments made by this Act, the respective plan 

shall not be regarded as failing to comply with the requirements 

of such title solely on the basis of its failure to meet such an 

additional requirement 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 previous 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. 

(c) COORDINATION OF CHIP FUNDING FOR FISCAL YEAR 2009.— 

Notwithstanding any other provision of law, insofar as funds have 

been appropriated under section 2104(a)(11), 2104(k), or 2104(l) 

of the Social Security Act, as amended by section 201 of Public 

Law 110–173, to provide allotments to States under CHIP for 

fiscal year 2009— 

(1) any amounts that are so appropriated that are not 

so allotted and obligated before April 1, 2009 are rescinded; 

and 

(2) any amount provided for CHIP allotments to a State 

under this Act (and the amendments made by this Act) for 

such fiscal year shall be reduced by the amount of such appropriations so allotted and obligated before such date. 

(d) RELIANCE ON LAW.—With respect to amendments made 

by this Act (other than title VII) that become effective as of a 

date— 
H. R. 2—4 

(1) such amendments are effective as of such date whether 

or not regulations implementing such amendments have been 

issued; and 

(2) Federal financial participation for medical assistance 

or child health assistance furnished under title XIX or XXI, 

respectively, of the Social Security Act on or after such date 

by a State in good faith reliance on such amendments before 

the date of promulgation of final regulations, if any, to carry 

out such amendments (or before the date of guidance, if any, 

regarding the implementation of such amendments) shall not 

be denied on the basis of the State’s failure to comply with 

such regulations or guidance. 

TITLE I—FINANCING 

Subtitle A—Funding 

SEC. 101. EXTENSION OF CHIP. 

Section 2104(a) (42 U.S.C. 1397dd(a)) is amended— 

(1) in paragraph (10), by striking ‘‘and’’ at the end; 

(2) by amending paragraph (11), by striking ‘‘each of fiscal 

years 2008 and 2009’’ and inserting ‘‘fiscal year 2008’’; and 

(3) by adding at the end the following new paragraphs: 

‘‘(12) for fiscal year 2009, $10,562,000,000; 

‘‘(13) for fiscal year 2010, $12,520,000,000; 

‘‘(14) for fiscal year 2011, $13,459,000,000; 

‘‘(15) for fiscal year 2012, $14,982,000,000; and 

‘‘(16) for fiscal year 2013, for purposes of making 2 semiannual allotments— 

‘‘(A) $2,850,000,000 for the period beginning on October 

1, 2012, and ending on March 31, 2013, and 

‘‘(B) $2,850,000,000 for the period beginning on April 

1, 2013, and ending on September 30, 2013.’’. 

SEC. 102. ALLOTMENTS FOR STATES AND TERRITORIES FOR FISCAL 

YEARS 2009 THROUGH 2013. 

Section 2104 (42 U.S.C. 1397dd) is amended— 

(1) in subsection (b)(1), by striking ‘‘subsection (d)’’ and 

inserting ‘‘subsections (d) and (m)’’; 

(2) in subsection (c)(1), by striking ‘‘subsection (d)’’ and 

inserting ‘‘subsections (d) and (m)(4)’’; and 

(3) by adding at the end the following new subsection: 

‘‘(m) ALLOTMENTS FOR FISCAL YEARS 2009 THROUGH 2013.— 

‘‘(1) FOR FISCAL YEAR 2009.— 

‘‘(A) FOR THE 50 STATES AND THE DISTRICT OF

COLUMBIA.—Subject to the succeeding provisions of this 

paragraph and paragraph (4), the Secretary shall allot 

for fiscal year 2009 from the amount made available under 

subsection (a)(12), to each of the 50 States and the District 

of Columbia 110 percent of the highest of the following 

amounts for such State or District: 

‘‘(i) The total Federal payments to the State under 

this title for fiscal year 2008, multiplied by the allotment increase factor determined under paragraph (5) 

for fiscal year 2009. 
H. R. 2—5 

‘‘(ii) The amount allotted to the State for fiscal 

year 2008 under subsection (b), multiplied by the allotment increase factor determined under paragraph (5) 

for fiscal year 2009. 

‘‘(iii) The projected total Federal payments to the 

State under this title for fiscal year 2009, as determined on the basis of the February 2009 projections 

certified by the State to the Secretary by not later 

than March 31, 2009. 

‘‘(B) FOR THE COMMONWEALTHS AND TERRITORIES.— 

Subject to the succeeding provisions of this paragraph and 

paragraph (4), the Secretary shall allot for fiscal year 2009 

from the amount made available under subsection (a)(12) 

to each of the commonwealths and territories described 

in subsection (c)(3) an amount equal to 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 1999 through 2008, multiplied by 

the allotment increase factor determined under paragraph 

(5) for fiscal year 2009, except that subparagraph (B) 

thereof shall be applied by substituting ‘the United States’ 

for ‘the State’. 

‘‘(C) ADJUSTMENT FOR QUALIFYING STATES.—In the case 

of a qualifying State described in paragraph (2) of section 

2105(g), the Secretary shall permit the State to submit 

a revised projection described in subparagraph (A)(iii) in 

order to take into account changes in such projections 

attributable to the application of paragraph (4) of such 

section. 

‘‘(2) FOR FISCAL YEARS 2010 THROUGH 2012.— 

‘‘(A) IN GENERAL.—Subject to paragraphs (4) and (6), 

from the amount made available under paragraphs (13) 

through (15) of subsection (a) for each of fiscal years 2010 

through 2012, respectively, the Secretary shall compute 

a State allotment for each State (including the District 

of Columbia and each commonwealth and territory) for 

each such fiscal year as follows: 

‘‘(i) GROWTH FACTOR UPDATE FOR FISCAL YEAR

2010.—For fiscal year 2010, the allotment of the State 

is equal to the sum of— 

‘‘(I) the amount of the State allotment under 

paragraph (1) for fiscal year 2009; and 

‘‘(II) the amount of any payments made to 

the State under subsection (k), (l), or (n) for fiscal 

year 2009, 

multiplied by the allotment increase factor under paragraph (5) for fiscal year 2010. 

‘‘(ii) REBASING IN FISCAL YEAR 2011.—For fiscal year 

2011, the allotment of the State is equal to the Federal 

payments to the State that are attributable to (and 

countable towards) the total amount of allotments 

available under this section to the State in fiscal year 

2010 (including payments made to the State under 

subsection (n) for fiscal year 2010 as well as amounts 

redistributed to the State in fiscal year 2010), multiplied by the allotment increase factor under paragraph 

(5) for fiscal year 2011. 
H. R. 2—6 

‘‘(iii) GROWTH FACTOR UPDATE FOR FISCAL YEAR

2012.—For fiscal year 2012, the allotment of the State 

is equal to the sum of— 

‘‘(I) the amount of the State allotment under 

clause (ii) for fiscal year 2011; and 

‘‘(II) the amount of any payments made to 

the State under subsection (n) for fiscal year 2011, 

multiplied by the allotment increase factor under paragraph (5) for fiscal year 2012. 

‘‘(3) FOR FISCAL YEAR 2013.— 

‘‘(A) FIRST HALF.—Subject to paragraphs (4) and (6), 

from the amount made available under subparagraph (A) 

of paragraph (16) of subsection (a) for the semi-annual 

period described in such paragraph, increased by the 

amount of the appropriation for such period under section 

108 of the Children’s Health Insurance Program Reauthorization Act of 2009, the Secretary shall compute a State 

allotment for each State (including the District of Columbia 

and each commonwealth and territory) for such semiannual period in an amount equal to the first half ratio 

(described in subparagraph (D)) of the amount described 

in subparagraph (C). 

‘‘(B) SECOND HALF.—Subject to paragraphs (4) and (6), 

from the amount made available under subparagraph (B) 

of paragraph (16) of subsection (a) for the semi-annual 

period described in such paragraph, the Secretary shall 

compute a State allotment for each State (including the 

District of Columbia and each commonwealth and territory) 

for such semi-annual period in an amount equal to the 

amount made available under such subparagraph, multiplied by the ratio of— 

‘‘(i) the amount of the allotment to such State 

under subparagraph (A); to 

‘‘(ii) the total of the amount of all of the allotments 

made available under such subparagraph. 

‘‘(C) FULL YEAR AMOUNT BASED ON REBASED AMOUNT.— 

The amount described in this subparagraph for a State 

is equal to the Federal payments to the State that are 

attributable to (and countable towards) the total amount 

of allotments available under this section to the State 

in fiscal year 2012 (including payments made to the State 

under subsection (n) for fiscal year 2012 as well as amounts 

redistributed to the State in fiscal year 2012), multiplied 

by the allotment increase factor under paragraph (5) for 

fiscal year 2013. 

‘‘(D) FIRST HALF RATIO.—The first half ratio described 

in this subparagraph is the ratio of— 

‘‘(i) the sum of— 

‘‘(I) the amount made available under subsection (a)(16)(A); and 

‘‘(II) the amount of the appropriation for such 

period under section 108 of the Children’s Health 

Insurance Program Reauthorization Act of 2009; 

to 

‘‘(ii) the sum of the— 

‘‘(I) amount described in clause (i); and 
H. R. 2—7 

‘‘(II) the amount made available under subsection (a)(16)(B). 

‘‘(4) PRORATION RULE.—If, after the application of this subsection without regard to this paragraph, the sum of the allotments determined under paragraph (1), (2), or (3) for a fiscal 

year (or, in the case of fiscal year 2013, for a semi-annual 

period in such fiscal year) exceeds the amount available under 

subsection (a) for such fiscal year or period, the Secretary 

shall reduce each allotment for any State under such paragraph 

for such fiscal year or period on a proportional basis. 

‘‘(5) ALLOTMENT INCREASE FACTOR.—The allotment increase 

factor under this paragraph for a fiscal year is equal to the 

product of the following: 

‘‘(A) PER CAPITA HEALTH CARE GROWTH FACTOR.—1 plus 

the percentage increase in the projected per capita amount 

of National Health Expenditures from the calendar year 

in which the previous fiscal year ends to the calendar 

year in which the fiscal year involved ends, as most recently 

published by the Secretary before the beginning of the 

fiscal year. 

‘‘(B) CHILD POPULATION GROWTH FACTOR.—1 plus the 

percentage increase (if any) in the population of children 

in the State from July 1 in the previous fiscal year to 

July 1 in the fiscal year involved, as determined by the 

Secretary based on the most recent published estimates 

of the Bureau of the Census before the beginning of the 

fiscal year involved, plus 1 percentage point. 

‘‘(6) INCREASE IN ALLOTMENT TO ACCOUNT FOR APPROVED

PROGRAM EXPANSIONS.—In the case of one of the 50 States 

or the District of Columbia that— 

‘‘(A) has submitted to the Secretary, and has approved 

by the Secretary, a State plan amendment or waiver 

request relating to an expansion of eligibility for children 

or benefits under this title that becomes effective for a 

fiscal year (beginning with fiscal year 2010 and ending 

with fiscal year 2013); and 

‘‘(B) has submitted to the Secretary, before the August 

31 preceding the beginning of the fiscal year, a request 

for an expansion allotment adjustment under this paragraph for such fiscal year that specifies— 

‘‘(i) the additional expenditures that are attributable to the eligibility or benefit expansion provided 

under the amendment or waiver described in subparagraph (A), as certified by the State and submitted 

to the Secretary by not later than August 31 preceding 

the beginning of the fiscal year; and 

‘‘(ii) the extent to which such additional expenditures are projected to exceed the allotment of the State 

or District for the year, 

subject to paragraph (4), the amount of the allotment of the 

State or District under this subsection for such fiscal year 

shall be increased by the excess amount described in subparagraph (B)(i). A State or District may only obtain an increase 

under this paragraph for an allotment for fiscal year 2010 

or fiscal year 2012. 

‘‘(7) AVAILABILITY OF AMOUNTS FOR SEMI-ANNUAL PERIODS

IN FISCAL YEAR 2013.—Each semi-annual allotment made under 
H. R. 2—8 

paragraph (3) for a period in fiscal year 2013 shall remain 

available for expenditure under this title for periods after the 

end of such fiscal year in the same manner as if the allotment 

had been made available for the entire fiscal year.’’. 

SEC. 103. CHILD ENROLLMENT CONTINGENCY FUND. 

Section 2104 (42 U.S.C. 1397dd), as amended by section 102, 

is amended by adding at the end the following new subsection: 

‘‘(n) CHILD ENROLLMENT CONTINGENCY FUND.— 

‘‘(1) ESTABLISHMENT.—There is hereby established in the 

Treasury of the United States a fund which shall be known 

as the ‘Child Enrollment Contingency Fund’ (in this subsection 

referred to as the ‘Fund’). Amounts in the Fund shall be available without further appropriations for payments under this 

subsection. 

‘‘(2) DEPOSITS INTO FUND.— 

‘‘(A) INITIAL AND SUBSEQUENT APPROPRIATIONS.—Subject to subparagraphs (B) and (D), 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 20 

percent of the amount made available under paragraph 

(12) of subsection (a) for the fiscal year; and 

‘‘(ii) for each of fiscal years 2010 through 2012 

(and for each of the semi-annual allotment periods 

for fiscal year 2013), such sums as are necessary for 

making payments to eligible States for such fiscal year 

or period, but not in excess of the aggregate cap 

described in subparagraph (B). 

‘‘(B) AGGREGATE CAP.—The total amount available for 

payment from the Fund for each of fiscal years 2010 

through 2012 (and for each of the semi-annual allotment 

periods for fiscal year 2013), taking into account deposits 

made under subparagraph (C), shall not exceed 20 percent 

of the amount made available under subsection (a) for 

the fiscal year or period. 

‘‘(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) AVAILABILITY OF EXCESS FUNDS FOR PERFORMANCE

BONUSES.—Any amounts in excess of the aggregate cap 

described in subparagraph (B) for a fiscal year or period 

shall be made available for purposes of carrying out section 

2105(a)(3) for any succeeding fiscal year and the Secretary 

of the Treasury shall reduce the amount in the Fund by 

the amount so made available. 

‘‘(3) CHILD ENROLLMENT CONTINGENCY FUND PAYMENTS.— 

‘‘(A) IN GENERAL.—If a State’s expenditures under this 

title in fiscal year 2009, fiscal year 2010, fiscal year 2011, 

fiscal year 2012, or a semi-annual allotment period for 

fiscal year 2013, exceed the total amount of allotments 

available under this section to the State in the fiscal year 

or period (determined without regard to any redistribution 
H. R. 2—9 

it receives under subsection (f) that is available for expenditure during such fiscal year or period, but including any 

carryover from a previous fiscal year) and if the average 

monthly unduplicated number of children enrolled under 

the State plan under this title (including children receiving 

health care coverage through funds under this title pursuant to a waiver under section 1115) during such fiscal 

year or period exceeds its target average number of such 

enrollees (as determined under subparagraph (B)) for that 

fiscal year or period, subject to subparagraph (D), the Secretary shall pay to the State from the Fund an amount 

equal to the product of— 

‘‘(i) the amount by which such average monthly 

caseload exceeds such target number of enrollees; and 

‘‘(ii) the projected per capita expenditures under 

the State child health plan (as determined under 

subparagraph (C) for the fiscal year), multiplied by 

the enhanced FMAP (as defined in section 2105(b)) 

for the State and fiscal year involved (or in which 

the period occurs). 

‘‘(B) TARGET AVERAGE NUMBER OF CHILD ENROLLEES.— 

In this paragraph, the target average number of child 

enrollees for a State— 

‘‘(i) for fiscal year 2009 is equal to the monthly 

average unduplicated number of children enrolled in 

the State child health plan under this title (including 

such children receiving health care coverage through 

funds under this title pursuant to a waiver under 

section 1115) during fiscal year 2008 increased by the 

population growth for children in that State for the 

year ending on June 30, 2007 (as estimated by the 

Bureau of the Census) plus 1 percentage point; or 

‘‘(ii) for a subsequent fiscal year (or semi-annual 

period occurring in a fiscal year) is equal to the target 

average number of child enrollees for the State for 

the previous fiscal year increased by the child population growth factor described in subsection (m)(5)(B) 

for the State for the prior fiscal year. 

‘‘(C) PROJECTED PER CAPITA EXPENDITURES.—For purposes of subparagraph (A)(ii), the projected per capita 

expenditures under a State child health plan— 

‘‘(i) for fiscal year 2009 is equal to the average 

per capita expenditures (including both State and Federal financial participation) under such plan for the 

targeted low-income children counted in the average 

monthly caseload for purposes of this paragraph during 

fiscal year 2008, increased by the annual percentage 

increase in the projected per capita amount of National 

Health Expenditures (as estimated by the Secretary) 

for 2009; or 

‘‘(ii) for a subsequent fiscal year (or semi-annual 

period occurring in a fiscal year) is equal to the projected per capita expenditures under such plan for 

the previous fiscal year (as determined under clause 

(i) or this clause) increased by the annual percentage 

increase in the projected per capita amount of National 
H. R. 2—10 

Health Expenditures (as estimated by the Secretary) 

for the year in which such subsequent fiscal year ends. 

‘‘(D) PRORATION RULE.—If the amounts available for 

payment from the Fund for a fiscal year or period are 

less than the total amount of payments determined under 

subparagraph (A) for the fiscal year or period, the amount 

to be paid under such subparagraph to each eligible State 

shall be reduced proportionally. 

‘‘(E) TIMELY PAYMENT; RECONCILIATION.—Payment 

under this paragraph for a fiscal year or period shall be 

made before the end of the fiscal year or period based 

upon the most recent data for expenditures and enrollment 

and the provisions of subsection (e) of section 2105 shall 

apply to payments under this subsection in the same 

manner as they apply to payments under such section. 

‘‘(F) CONTINUED REPORTING.—For purposes of this 

paragraph and subsection (f), the State shall submit to 

the Secretary the State’s projected Federal expenditures, 

even if the amount of such expenditures exceeds the total 

amount of allotments available to the State in such fiscal 

year or period. 

‘‘(G) APPLICATION TO COMMONWEALTHS AND TERRITORIES.—No payment shall be made under this paragraph 

to a commonwealth or territory described in subsection 

(c)(3) until such time as the Secretary determines that 

there are in effect methods, satisfactory to the Secretary, 

for the collection and reporting of reliable data regarding 

the enrollment of children described in subparagraphs (A) 

and (B) in order to accurately determine the commonwealth’s or territory’s eligibility for, and amount of payment, under this paragraph.’’. 

SEC. 104. CHIP PERFORMANCE BONUS PAYMENT TO OFFSET ADDITIONAL ENROLLMENT COSTS RESULTING FROM ENROLLMENT AND RETENTION EFFORTS. 

Section 2105(a) (42 U.S.C. 1397ee(a)) is amended by adding 

at the end the following new paragraphs: 

‘‘(3) PERFORMANCE BONUS PAYMENT TO OFFSET ADDITIONAL

MEDICAID AND CHIP CHILD ENROLLMENT COSTS RESULTING FROM

ENROLLMENT AND RETENTION EFFORTS.— 

‘‘(A) IN GENERAL.—In addition to the payments made 

under paragraph (1), for each fiscal year (beginning with 

fiscal year 2009 and ending with fiscal year 2013), the 

Secretary shall pay from amounts made available under 

subparagraph (E), to each State that meets the condition 

under paragraph (4) for the fiscal year, an amount equal 

to the amount described in subparagraph (B) for the State 

and fiscal year. The payment under this paragraph shall 

be made, to a State for a fiscal year, as a single payment 

not later than the last day of the first calendar quarter 

of the following fiscal year. 

‘‘(B) AMOUNT FOR ABOVE BASELINE MEDICAID CHILD

ENROLLMENT COSTS.—Subject to subparagraph (E), the 

amount described in this subparagraph for a State for 

a fiscal year is equal to the sum of the following amounts: 

‘‘(i) FIRST TIER ABOVE BASELINE MEDICAID

ENROLLEES.—An amount equal to the number of first 
H. R. 2—11 

tier above baseline child enrollees (as determined 

under subparagraph (C)(i)) under title XIX for the 

State and fiscal year, multiplied by 15 percent of the 

projected per capita State Medicaid expenditures (as 

determined under subparagraph (D)) for the State and 

fiscal year under title XIX. 

‘‘(ii) SECOND TIER ABOVE BASELINE MEDICAID

ENROLLEES.—An amount equal to the number of second 

tier above baseline child enrollees (as determined 

under subparagraph (C)(ii)) under title XIX for the 

State and fiscal year, multiplied by 62.5 percent of 

the projected per capita State Medicaid expenditures 

(as determined under subparagraph (D)) for the State 

and fiscal year under title XIX. 

‘‘(C) NUMBER OF FIRST AND SECOND TIER ABOVE BASELINE CHILD ENROLLEES; BASELINE NUMBER OF CHILD

ENROLLEES.—For purposes of this paragraph: 

‘‘(i) FIRST TIER ABOVE BASELINE CHILD

ENROLLEES.—The number of first tier above baseline 

child enrollees for a State for a fiscal year under title 

XIX is equal to the number (if any, as determined 

by the Secretary) by which— 

‘‘(I) the monthly average unduplicated number 

of qualifying children (as defined in subparagraph 

(F)) enrolled during the fiscal year under the State 

plan under title XIX, respectively; exceeds 

‘‘(II) the baseline number of enrollees 

described in clause (iii) for the State and fiscal 

year under title XIX, respectively; 

but not to exceed 10 percent of the baseline number 

of enrollees described in subclause (II). 

‘‘(ii) SECOND TIER ABOVE BASELINE CHILD

ENROLLEES.—The number of second tier above baseline 

child enrollees for a State for a fiscal year under title 

XIX is equal to the number (if any, as determined 

by the Secretary) by which— 

‘‘(I) the monthly average unduplicated number 

of qualifying children (as defined in subparagraph 

(F)) enrolled during the fiscal year under title XIX 

as described in clause (i)(I); exceeds 

‘‘(II) the sum of the baseline number of child 

enrollees described in clause (iii) for the State 

and fiscal year under title XIX, as described in 

clause (i)(II), and the maximum number of first 

tier above baseline child enrollees for the State 

and fiscal year under title XIX, as determined 

under clause (i). 

‘‘(iii) BASELINE NUMBER OF CHILD ENROLLEES.— 

Subject to subparagraph (H), the baseline number of 

child enrollees for a State under title XIX— 

‘‘(I) for fiscal year 2009 is equal to the monthly 

average unduplicated number of qualifying children enrolled in the State plan under title XIX 

during fiscal year 2007 increased by the population 

growth for children in that State from 2007 to 

2008 (as estimated by the Bureau of the Census) 

plus 4 percentage points, and further increased 
H. R. 2—12 

by the population growth for children in that State 

from 2008 to 2009 (as estimated by the Bureau 

of the Census) plus 4 percentage points; 

‘‘(II) for each of fiscal years 2010, 2011, and 

2012, is equal to the baseline number of child 

enrollees for the State for the previous fiscal year 

under title XIX, increased by the population 

growth for children in that State from the calendar 

year in which the respective fiscal year begins 

to the succeeding calendar year (as estimated by 

the Bureau of the Census) plus 3.5 percentage 

points; 

‘‘(III) for each of fiscal years 2013, 2014, and 

2015, is equal to the baseline number of child 

enrollees for the State for the previous fiscal year 

under title XIX, increased by the population 

growth for children in that State from the calendar 

year in which the respective fiscal year begins 

to the succeeding calendar year (as estimated by 

the Bureau of the Census) plus 3 percentage 

points; and 

‘‘(IV) for a subsequent fiscal year is equal to 

the baseline number of child enrollees for the State 

for the previous fiscal year under title XIX, 

increased by the population growth for children 

in that State from the calendar year in which 

the fiscal year involved begins to the succeeding 

calendar year (as estimated by the Bureau of the 

Census) plus 2 percentage points. 

‘‘(D) PROJECTED PER CAPITA STATE MEDICAID EXPENDITURES.—For purposes of subparagraph (B), the projected 

per capita State Medicaid expenditures for a State and 

fiscal year under title XIX is equal to the average per 

capita expenditures (including both State and Federal 

financial participation) for children under the State plan 

under such title, including under waivers but not including 

such children eligible for assistance by virtue of the receipt 

of benefits under title XVI, for the most recent fiscal year 

for which actual data are available (as determined by the 

Secretary), increased (for each subsequent fiscal year up 

to and including the fiscal year involved) by the annual 

percentage increase in per capita amount of National 

Health Expenditures (as estimated by the Secretary) for 

the calendar year in which the respective subsequent fiscal 

year ends and multiplied by a State matching percentage 

equal to 100 percent minus the Federal medical assistance 

percentage (as defined in section 1905(b)) for the fiscal 

year involved. 

‘‘(E) AMOUNTS AVAILABLE FOR PAYMENTS.— 

‘‘(i) INITIAL APPROPRIATION.—Out of any money in 

the Treasury not otherwise appropriated, there are 

appropriated $3,225,000,000 for fiscal year 2009 for 

making payments under this paragraph, to be available 

until expended. 

‘‘(ii) TRANSFERS.—Notwithstanding any other 

provision of this title, the following amounts shall also 
H. R. 2—13 

be available, without fiscal year limitation, for making 

payments under this paragraph: 

‘‘(I) UNOBLIGATED NATIONAL ALLOTMENT.— 

‘‘(aa) FISCAL YEARS 2009 THROUGH 2012.— 

As of December 31 of fiscal year 2009, and 

as of December 31 of each succeeding fiscal 

year through fiscal year 2012, 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 

(m) 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 2013.— 

As of December 31 of fiscal year 2013, the 

portion, if any, of the sum of the amounts 

appropriated under subsection (a)(16)(A) and 

under section 108 of the Children’s Health 

Insurance Reauthorization Act of 2009 for the 

period beginning on October 1, 2012, and 

ending on March 31, 2013, that is unobligated 

for allotment to a State under subsection (m) 

for such fiscal year or set aside under subsection (b)(2) of section 2111 for such fiscal 

year. 

‘‘(cc) SECOND HALF OF FISCAL YEAR 2013.— 

As of June 30 of fiscal year 2013, the portion, 

if any, of the amount appropriated under subsection (a)(16)(B) for the period beginning on 

April 1, 2013, and ending on September 30, 

2013, that is unobligated for allotment to a 

State under subsection (m) for such fiscal year 

or set aside under subsection (b)(2) of section 

2111 for such fiscal year. 

‘‘(II) UNEXPENDED ALLOTMENTS NOT USED FOR

REDISTRIBUTION.—As of November 15 of each of 

fiscal years 2010 through 2013, the total amount 

of allotments made to States under section 2104 

for the second preceding fiscal year (third preceding fiscal year in the case of the fiscal year 

2006, 2007, and 2008 allotments) that is not 

expended or redistributed under section 2104(f) 

during the period in which such allotments are 

available for obligation. 

‘‘(III) EXCESS CHILD ENROLLMENT CONTINGENCY FUNDS.—As of October 1 of each of fiscal 

years 2010 through 2013, any amount in excess 

of the aggregate cap applicable to the Child Enrollment Contingency Fund for the fiscal year under 

section 2104(n). 

‘‘(IV) UNEXPENDED TRANSITIONAL COVERAGE

BLOCK GRANT FOR NONPREGNANT CHILDLESS

ADULTS.—As of October 1, 2011, any amounts set 

aside under section 2111(a)(3) that are not 

expended by September 30, 2011. 

‘‘(iii) PROPORTIONAL REDUCTION.—If the sum of the 

amounts otherwise payable under this paragraph for 
H. R. 2—14 

a fiscal year exceeds the amount available for the 

fiscal year under this subparagraph, the amount to 

be paid under this paragraph to each State shall be 

reduced proportionally. 

‘‘(F) QUALIFYING CHILDREN DEFINED.— 

‘‘(i) IN GENERAL.—For purposes of this subsection, 

subject to clauses (ii) and (iii), the term ‘qualifying 

children’ means children who meet the eligibility criteria (including income, categorical eligibility, age, and 

immigration status criteria) in effect as of July 1, 2008, 

for enrollment under title XIX, taking into account 

criteria applied as of such date under title XIX pursuant to a waiver under section 1115. 

‘‘(ii) LIMITATION.—A child described in clause (i) 

who is provided medical assistance during a presumptive eligibility period under section 1920A shall be 

considered to be a ‘qualifying child’ only if the child 

is determined to be eligible for medical assistance 

under title XIX. 

‘‘(iii) EXCLUSION.—Such term does not include any 

children for whom the State has made an election 

to provide medical assistance under paragraph (4) of 

section 1903(v). 

‘‘(G) APPLICATION TO COMMONWEALTHS AND TERRITORIES.—The provisions of subparagraph (G) of section 

2104(n)(3) shall apply with respect to payment under this 

paragraph in the same manner as such provisions apply 

to payment under such section. 

‘‘(H) APPLICATION TO STATES THAT IMPLEMENT A MEDICAID EXPANSION FOR CHILDREN AFTER FISCAL YEAR 2008.— 

In the case of a State that provides coverage under section 

115 of the Children’s Health Insurance Program Reauthorization Act of 2009 for any fiscal year after fiscal year 

2008— 

‘‘(i) any child enrolled in the State plan under 

title XIX through the application of such an election 

shall be disregarded from the determination for the 

State of the monthly average unduplicated number 

of qualifying children enrolled in such plan during 

the first 3 fiscal years in which such an election is 

in effect; and 

‘‘(ii) in determining the baseline number of child 

enrollees for the State for any fiscal year subsequent 

to such first 3 fiscal years, the baseline number of 

child enrollees for the State under title XIX for the 

third of such fiscal years shall be the monthly average 

unduplicated number of qualifying children enrolled 

in the State plan under title XIX for such third fiscal 

year. 

‘‘(4) ENROLLMENT AND RETENTION PROVISIONS FOR CHILDREN.—For purposes of paragraph (3)(A), a State meets the 

condition of this paragraph for a fiscal year if it is implementing 

at least 5 of the following enrollment and retention provisions 

(treating each subparagraph as a separate enrollment and 

retention provision) throughout the entire fiscal year: 

‘‘(A) CONTINUOUS ELIGIBILITY.—The State has elected 

the option of continuous eligibility for a full 12 months 
H. R. 2—15 

for all children described in section 1902(e)(12) under title 

XIX under 19 years of age, as well as applying such policy 

under its State child health plan under this title. 

‘‘(B) LIBERALIZATION OF ASSET REQUIREMENTS.—The 

State meets the requirement specified in either of the following clauses: 

‘‘(i) ELIMINATION OF ASSET TEST.—The State does 

not apply any asset or resource test for eligibility for 

children under title XIX or this title. 

‘‘(ii) ADMINISTRATIVE VERIFICATION OF ASSETS.— 

The State— 

‘‘(I) permits a parent or caretaker relative who 

is applying on behalf of a child for medical assistance under title XIX or child health assistance 

under this title to declare and certify by signature 

under penalty of perjury information relating to 

family assets for purposes of determining and 

redetermining financial eligibility; and 

‘‘(II) takes steps to verify assets through 

means other than by requiring documentation from 

parents and applicants except in individual cases 

of discrepancies or where otherwise justified. 

‘‘(C) ELIMINATION OF IN-PERSON INTERVIEW REQUIRE- MENT.—The State does not require an application of a 

child for medical assistance under title XIX (or for child 

health assistance under this title), including an application 

for renewal of such assistance, to be made in person nor 

does the State require a face-to-face interview, unless there 

are discrepancies or individual circumstances justifying an 

in-person application or face-to-face interview. 

‘‘(D) USE OF JOINT APPLICATION FOR MEDICAID AND

CHIP.—The application form and supplemental forms (if 

any) and information verification process is the same for 

purposes of establishing and renewing eligibility for children for medical assistance under title XIX and child health 

assistance under this title. 

‘‘(E) AUTOMATIC RENEWAL (USE OF ADMINISTRATIVE

RENEWAL).— 

‘‘(i) IN GENERAL.—The State provides, in the case 

of renewal of a child’s eligibility for medical assistance 

under title XIX or child health assistance under this 

title, a pre-printed form completed by the State based 

on the information available to the State and notice 

to the parent or caretaker relative of the child that 

eligibility of the child will be renewed and continued 

based on such information unless the State is provided 

other information. Nothing in this clause shall be construed as preventing a State from verifying, through 

electronic and other means, the information so provided. 

‘‘(ii) SATISFACTION THROUGH DEMONSTRATED USE

OF EX PARTE PROCESS.—A State shall be treated as 

satisfying the requirement of clause (i) if renewal of 

eligibility of children under title XIX or this title is 

determined without any requirement for an in-person 

interview, unless sufficient information is not in the 

State’s possession and cannot be acquired from other 
H. R. 2—16 

sources (including other State agencies) without the 

participation of the applicant or the applicant’s parent 

or caretaker relative. 

‘‘(F) PRESUMPTIVE ELIGIBILITY FOR CHILDREN.—The 

State is implementing section 1920A under title XIX as 

well as, pursuant to section 2107(e)(1), under this title. 

‘‘(G) EXPRESS LANE.—The State is implementing the 

option described in section 1902(e)(13) under title XIX as 

well as, pursuant to section 2107(e)(1), under this title. 

‘‘(H) PREMIUM ASSISTANCE SUBSIDIES.—The State is 

implementing the option of providing premium assistance 

subsidies under section 2105(c)(10) or section 1906A.’’. 

SEC. 105. TWO-YEAR INITIAL AVAILABILITY OF CHIP 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 paragraph (2), 

amounts allotted to a State pursuant to this section— 

‘‘(A) for each of fiscal years 1998 through 2008, shall 

remain available for expenditure by the State through the 

end of the second succeeding fiscal year; and 

‘‘(B) for fiscal year 2009 and each fiscal year thereafter, 

shall remain available for expenditure by the State through 

the end of the succeeding fiscal year. 

‘‘(2) AVAILABILITY OF AMOUNTS REDISTRIBUTED.—Amounts 

redistributed to a State under subsection (f) shall be available 

for expenditure by the State through the end of the fiscal 

year in which they are redistributed.’’. 

SEC. 106. REDISTRIBUTION OF UNUSED ALLOTMENTS. 

(a) BEGINNING WITH FISCAL YEAR 2007.— 

(1) IN GENERAL.—Section 2104(f) (42 U.S.C. 1397dd(f)) is 

amended— 

(A) by striking ‘‘The Secretary’’ and inserting the following: 

‘‘(1) IN GENERAL.—The Secretary’’; 

(B) by striking ‘‘States that have fully expended the 

amount of their allotments under this section.’’ and 

inserting ‘‘States that the Secretary determines with 

respect to the fiscal year for which unused allotments are 

available for redistribution under this subsection, are shortfall States described in paragraph (2) for such fiscal year, 

but not to exceed the amount of the shortfall described 

in paragraph (2)(A) for each such State (as may be adjusted 

under paragraph (2)(C)).’’; and 

(C) by adding at the end the following new paragraph: 

‘‘(2) SHORTFALL STATES DESCRIBED.— 

‘‘(A) IN GENERAL.—For purposes of paragraph (1), with 

respect to a fiscal year, a shortfall State described in this 

subparagraph is a State with a State child health plan 

approved under this title for which the Secretary estimates 

on the basis of the most recent data available to the Secretary, that the projected expenditures under such plan 

for the State for the fiscal year will exceed the sum of— 

‘‘(i) the amount of the State’s allotments for any 

preceding fiscal years that remains available for 
H. R. 2—17 

expenditure and that will not be expended by the end 

of the immediately preceding fiscal year; 

‘‘(ii) the amount (if any) of the child enrollment 

contingency fund payment under subsection (n); and 

‘‘(iii) the amount of the State’s allotment for the 

fiscal year. 

‘‘(B) PRORATION RULE.—If the amounts available for 

redistribution under paragraph (1) for a fiscal year are 

less than the total amounts of the estimated shortfalls 

determined for the year under subparagraph (A), the 

amount to be redistributed under such paragraph for each 

shortfall State shall be reduced proportionally. 

‘‘(C) RETROSPECTIVE ADJUSTMENT.—The Secretary may 

adjust the estimates and determinations made under paragraph (1) and this paragraph with respect to a fiscal year 

as necessary on the basis of the amounts reported by 

States not later than November 30 of the succeeding fiscal 

year, as approved by the Secretary.’’. 

(2) EFFECTIVE DATE.—The amendments made by paragraph 

(1) shall apply to redistribution of allotments made for fiscal 

year 2007 and subsequent fiscal years. 

(b) REDISTRIBUTION OF UNUSED ALLOTMENTS FOR FISCAL YEAR

2006.—Section 2104(k) (42 U.S.C. 1397dd(k)) is amended— 

(1) in the subsection heading, by striking ‘‘THE FIRST 2 

QUARTERS OF’’; 

(2) in paragraph (1), by striking ‘‘the first 2 quarters of’’; 

and 

(3) in paragraph (6)— 

(A) by striking ‘‘the first 2 quarters of’’; and 

(B) by striking ‘‘March 31’’ and inserting ‘‘September 

30’’. 

SEC. 107. OPTION FOR QUALIFYING STATES TO RECEIVE THE 

ENHANCED PORTION OF THE CHIP MATCHING RATE FOR 

MEDICAID COVERAGE OF CERTAIN CHILDREN. 

(a) IN GENERAL.—Section 2105(g) (42 U.S.C. 1397ee(g)) is 

amended— 

(1) in paragraph (1)(A), as amended by section 201(b)(1) 

of Public Law 110–173— 

(A) by inserting ‘‘subject to paragraph (4),’’ after ‘‘Notwithstanding any other provision of law,’’; and 

(B) by striking ‘‘2008, or 2009’’ and inserting ‘‘or 2008’’; 

and 

(2) by adding at the end the following new paragraph: 

‘‘(4) OPTION FOR ALLOTMENTS FOR FISCAL YEARS 2009

THROUGH 2013.— 

‘‘(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 2009 through 2013 (insofar as the allotment 

is available to the State under subsections (e) and (m) 

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 
H. R. 2—18 

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.’’. 

(b) REPEAL OF LIMITATION ON AVAILABILITY OF FISCAL YEAR

2009 ALLOTMENTS.—Paragraph (2) of section 201(b) of the Medicare, 

Medicaid, and SCHIP Extension Act of 2007 (Public Law 110– 

173) is repealed. 

SEC. 108. ONE-TIME APPROPRIATION. 

There is appropriated to the Secretary, out of any money in 

the Treasury not otherwise appropriated, $11,706,000,000 to accompany the allotment made for the period beginning on October 1, 

2012, and ending on March 31, 2013, under section 2104(a)(16)(A) 

of the Social Security Act (42 U.S.C. 1397dd(a)(16)(A)) (as added 

by section 101), to remain available until expended. Such amount 

shall be used to provide allotments to States under paragraph 

(3) of section 2104(m) of the Social Security Act (42 U.S.C. 

1397dd(i)), as added by section 102, for the first 6 months of 

fiscal year 2013 in the same manner as allotments are provided 

under subsection (a)(16)(A) of such section 2104 and subject to 

the same terms and conditions as apply to the allotments provided 

from such subsection (a)(16)(A). 

SEC. 109. IMPROVING FUNDING FOR THE TERRITORIES UNDER CHIP 

AND MEDICAID. 

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 

2009, 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.’’. 
H. R. 2—19 

Subtitle B—Focus on Low-Income Children 

and Pregnant Women 

SEC. 111. 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 112(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) MINIMUM INCOME ELIGIBILITY LEVELS FOR PREGNANT

WOMEN AND CHILDREN.—The State has established an income 

eligibility level— 

‘‘(A) 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 (or such higher percent as 

the State has in effect with regard to pregnant women 

under this title) of the poverty line applicable to a family 

of the size involved, but in no case lower than the percent 

in effect under any such subsection as of July 1, 2008; 

and 

‘‘(B) for children under 19 years of age under this 

title (or title XIX) that is at least 200 percent of the 

poverty line applicable to a family of the size involved. 

‘‘(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 TAR- GETED LOW-INCOME CHILDREN.—The State provides pregnancyrelated 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 lowincome 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 
H. R. 2—20 

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. 

‘‘(7) NO WAITING LIST FOR CHILDREN.—The State does not 

impose, with respect to the enrollment under the State child 

health plan of targeted low-income children during the quarter, 

any enrollment cap or other numerical limitation on enrollment, 

any waiting list, any procedures designed to delay the consideration of applications for enrollment, or similar limitation with 

respect to enrollment. 

‘‘(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) with respect to an individual during the period described in paragraph (2)(A). 

‘‘(2) TARGETED LOW-INCOME PREGNANT WOMAN.—The term 

‘targeted low-income pregnant woman’ means an individual— 

‘‘(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 exceeds 185 percent (or, if 

higher, the percent applied under subsection (b)(1)(A)) of 

the poverty line applicable to a family of the size involved, 

but 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 
H. R. 2—21 

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, 2008). 

‘‘(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 pregnancyrelated 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 PREGNANCYRELATED 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.’’. 
H. R. 2—22 

SEC. 112. 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 2009.—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 2009, 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 paragraph (2) 

shall apply for purposes of any period beginning on or 

after January 1, 2010, 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 2009.— 

‘‘(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 December 31, 

2009. 

‘‘(B) EXTENSION UPON STATE REQUEST.—If an applicable 

existing waiver described in subparagraph (A) would otherwise expire before January 1, 2010, notwithstanding the 

requirements of subsections (e) and (f) of section 1115, 

a State may submit, not later than September 30, 2009, 

a request to the Secretary for an extension of the waiver. 

The Secretary shall approve a request for an extension 

of an applicable existing waiver submitted pursuant to 

this subparagraph, but only through December 31, 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 nonpregnant childless adult during the period 

beginning on the date of the enactment of this subsection 

and ending on December 31, 2009. 

‘‘(3) 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 September 30, 
H. R. 2—23 

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 December 31, 2009, on the 

application of a State for a Medicaid nonpregnant childless 

adults waiver that was submitted to the Secretary by September 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 (2)(B) for fiscal 

year 2009, increased by the percentage increase (if 

any) in the projected nominal per capita amount of 

National Health Expenditures for 2010 over 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 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 PERIOD; AUTOMATIC EXTENSION AT STATE

OPTION THROUGH FISCAL YEAR 2011.— 

‘‘(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 2009 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 lowincome 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, 2011, 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. 
H. R. 2—24 

‘‘(B) EXTENSION UPON STATE REQUEST.—If an applicable 

existing waiver described in subparagraph (A) would otherwise expire before October 1, 2011, 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, 2011. 

‘‘(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 

the third and fourth quarters of fiscal year 2009 and during 

fiscal years 2010 and 2011. 

‘‘(2) RULES FOR FISCAL YEARS 2012 THROUGH 2013.— 

‘‘(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 2012 or 2013, 

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 2013, the set aside 

for any State shall be computed separately for each 

period described in subparagraphs (A) and (B) of section 2104(a)(16) and any reduction in the allotment 

for either such period under section 2104(m)(4) 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 2012

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 

2012 is equal to— 

‘‘(I) the enhanced FMAP determined under 

section 2105(b) in the case of a State that meets 
H. R. 2—25 

the outreach or coverage benchmarks described 

in any of subparagraph (A), (B), or (C) of paragraph 

(3) for fiscal year 2011; 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

2013.—For purposes of clause (ii), the applicable 

percentage for any quarter of fiscal year 2013 is equal 

to— 

‘‘(I) the REMAP percentage if— 

‘‘(aa) the applicable percentage for the 

State under clause (iii) was the enhanced 

FMAP for fiscal year 2012; and 

‘‘(bb) the State met either of the coverage 

benchmarks described in subparagraph (B) or 

(C) of paragraph (3) for fiscal year 2012; 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 2009. 

‘‘(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 2011; 

‘‘(ii) implemented 1 or more of the enrollment and 

retention provisions described in section 2105(a)(4) 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 
H. R. 2—26 

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 performance bonus 

payment under section 2105(a)(3)(B) for the most recent 

fiscal year 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 2009. 

‘‘(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 

2009 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 112 

of the Children’s Health Insurance Program Reauthorization Act of 2009, nothing’’. 
H. R. 2—27 

(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 Committee on Finance of the 

Senate and the Committee on Energy and Commerce of the 

House of Representatives, including recommendations (if any) 

for changes in legislation. 

SEC. 113. ELIMINATION OF COUNTING MEDICAID CHILD PRESUMPTIVE 

ELIGIBILITY COSTS AGAINST TITLE XXI ALLOTMENT. 

(a) IN GENERAL.—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]’’. 

(b) AMENDMENTS TO MEDICAID.— (1) ELIGIBILITY OF A NEWBORN.—Section 1902(e)(4) (42 

U.S.C. 1396a(e)(4)) is amended in the first sentence by striking 

‘‘so long as the child is a member of the woman’s household 

and the woman remains (or would remain if pregnant) eligible 

for such assistance’’. 

(2) APPLICATION OF QUALIFIED ENTITIES TO PRESUMPTIVE

ELIGIBILITY FOR PREGNANT WOMEN UNDER MEDICAID.—Section 

1920(b) (42 U.S.C. 1396r–1(b)) is amended by adding after 

paragraph (2) the following flush sentence: 

‘‘The term ‘qualified provider’ also includes a qualified entity, as 

defined in section 1920A(b)(3).’’. 

SEC. 114. 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 2009, the Federal medical assistance percentage 
H. R. 2—28 

(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 2009, 

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) RULE OF CONSTRUCTION.—Nothing in the amendments made 

by this section shall be construed as— 

(1) changing any income eligibility level for children under 

title XXI of the Social Security Act; or 

(2) changing the flexibility provided States under such 

title to establish the income eligibility level for targeted lowincome children under a State child health plan and the methodologies used by the State to determine income or assets 

under such plan. 

SEC. 115. STATE AUTHORITY UNDER MEDICAID. 

Notwithstanding any other provision of law, including 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, at 

State option, the Secretary shall provide the State with the Federal 

medical assistance percentage determined for the State for Medicaid 

with respect to expenditures described in section 1905(u)(2)(A) of 

such Act or otherwise made to provide medical assistance under 

Medicaid to a child who could be covered by the State under 

CHIP. 

TITLE II—OUTREACH AND 

ENROLLMENT 

Subtitle A—Outreach and Enrollment 

Activities 

SEC. 201. GRANTS AND ENHANCED ADMINISTRATIVE FUNDING FOR 

OUTREACH AND ENROLLMENT. 

(a) GRANTS.—Title XXI (42 U.S.C. 1397aa et seq.), as amended 

by section 111, is amended by adding at the end the following: 

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

‘‘(a) OUTREACH AND ENROLLMENT GRANTS; NATIONAL CAM- PAIGN.— 

‘‘(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 2009 through 2013 to conduct outreach and enrollment 
H. R. 2—29 

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 lowincome 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— 
H. R. 2—30 

‘‘(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 MATCH REQUIRED FOR ANY ELIGIBLE ENTITY AWARDED A

GRANT.— 

‘‘(1) STATE MAINTENANCE OF EFFORT.—In the case of a 

State that is awarded a grant under this section, 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. 

‘‘(2) NO MATCHING REQUIREMENT.—No eligible entity 

awarded a grant under subsection (a) shall be required to 

provide any matching funds as a condition for receiving the 

grant. 

‘‘(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 
H. R. 2—31 

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 2009 through 2013, 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.’’. 
H. R. 2—32 

(b) ENHANCED ADMINISTRATIVE FUNDING FOR TRANSLATION OR

INTERPRETATION SERVICES UNDER CHIP AND MEDICAID.— (1) CHIP.—Section 2105(a)(1) (42 U.S.C. 1397ee(a)(1)), as 

amended by section 113, is amended— 

(A) 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 

(B) in subparagraph (D)— 

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

(ii) by redesignating clause (iv) as clause (v); and 

(iii) by inserting after clause (iii) the following 

new clause: 

‘‘(iv) for translation or interpretation services in 

connection with the enrollment of, retention of, 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’’. 

(2) MEDICAID.— (A) USE OF MEDICAID FUNDS.—Section 1903(a)(2) (42 

U.S.C. 1396b(a)(2)) is amended by adding at the end the 

following new subparagraph: 

‘‘(E) an amount equal to 75 percent 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 translation or interpretation services in connection with the enrollment of, retention 

of, and use of services under this title by, children of families 

for whom English is not the primary language; plus’’. 

(B) USE OF COMMUNITY HEALTH WORKERS FOR OUT- REACH ACTIVITIES.— (i) IN GENERAL.—Section 2102(c)(1) of such Act 

(42 U.S.C. 1397bb(c)(1)) is amended by inserting 

‘‘(through community health workers and others)’’ after 

‘‘Outreach’’. 

(ii) IN FEDERAL EVALUATION.—Section 2108(c)(3)(B) 

of such Act (42 U.S.C. 1397hh(c)(3)(B)) is amended 

by inserting ‘‘(such as through community health 

workers and others)’’ after ‘‘including practices’’. 

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 
H. R. 2—33 

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) (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 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. STATE OPTION TO RELY ON FINDINGS FROM AN EXPRESS 

LANE AGENCY TO CONDUCT SIMPLIFIED ELIGIBILITY 

DETERMINATIONS. 

(a) APPLICATION UNDER MEDICAID AND CHIP PROGRAMS.— 

(1) MEDICAID.—Section 1902(e) (42 U.S.C. 1396a(e)) is 

amended by adding at the end the following: 

‘‘(13) EXPRESS LANE OPTION.— 

‘‘(A) IN GENERAL.— 

‘‘(i) OPTION TO USE A FINDING FROM AN EXPRESS LANE

AGENCY.—At the option of the State, the State plan may 

provide that in determining eligibility under this title for 

a child (as defined in subparagraph (G)), the State may 

rely on a finding made within a reasonable period (as 

determined by the State) from an Express Lane agency 
H. R. 2—34 

(as defined in subparagraph (F)) when it determines 

whether a child satisfies one or more components of eligibility for medical assistance under this title. The State 

may rely on a finding from an Express Lane agency notwithstanding sections 1902(a)(46)(B) and 1137(d) or any 

differences in budget unit, disregard, deeming or other 

methodology, if the following requirements are met: 

‘‘(I) PROHIBITION ON DETERMINING CHILDREN INELIGIBLE FOR COVERAGE.—If a finding from an Express 

Lane agency would result in a determination that a 

child does not satisfy an eligibility requirement for 

medical assistance under this title and for child health 

assistance under title XXI, the State shall determine 

eligibility for assistance using its regular procedures. 

‘‘(II) NOTICE REQUIREMENT.—For any child who 

is found eligible for medical assistance under the State 

plan under this title or child health assistance under 

title XXI and who is subject to premiums based on 

an Express Lane agency’s finding of such child’s income 

level, the State shall provide notice that the child 

may qualify for lower premium payments if evaluated 

by the State using its regular policies and of the procedures for requesting such an evaluation. 

‘‘(III) COMPLIANCE WITH SCREEN AND ENROLL

REQUIREMENT.—The State shall satisfy the requirements under subparagraphs (A) and (B) of section 

2102(b)(3) (relating to screen and enroll) before 

enrolling a child in child health assistance under title 

XXI. At its option, the State may fulfill such requirements in accordance with either option provided under 

subparagraph (C) of this paragraph. 

‘‘(IV) VERIFICATION OF CITIZENSHIP OR NATIONALITY

STATUS.—The State shall satisfy the requirements of 

section 1902(a)(46)(B) or 2105(c)(9), as applicable for 

verifications of citizenship or nationality status. 

‘‘(V) CODING.—The State meets the requirements 

of subparagraph (E). 

‘‘(ii) OPTION TO APPLY TO RENEWALS AND REDETERMINATIONS.—The State may apply the provisions of this paragraph when conducting initial determinations of eligibility, 

redeterminations of eligibility, or both, as described in the 

State plan. 

‘‘(B) RULES OF CONSTRUCTION.—Nothing in this paragraph 

shall be construed— 

‘‘(i) to limit or prohibit a State from taking any actions 

otherwise permitted under this title or title XXI in determining eligibility for or enrolling children into medical 

assistance under this title or child health assistance under 

title XXI; or 

‘‘(ii) to modify the limitations in section 1902(a)(5) concerning the agencies that may make a determination of 

eligibility for medical assistance under this title. 

‘‘(C) OPTIONS FOR SATISFYING THE SCREEN AND ENROLL

REQUIREMENT.— 

‘‘(i) IN GENERAL.—With respect to a child whose eligibility for medical assistance under this title or for child 

health assistance under title XXI has been evaluated by 
H. R. 2—35 

a State agency using an income finding from an Express 

Lane agency, a State may carry out its duties under subparagraphs (A) and (B) of section 2102(b)(3) (relating to 

screen and enroll) in accordance with either clause (ii) 

or clause (iii). 

‘‘(ii) ESTABLISHING A SCREENING THRESHOLD.— 

‘‘(I) IN GENERAL.—Under this clause, the State 

establishes a screening threshold set as a percentage 

of the Federal poverty level that exceeds the highest 

income threshold applicable under this title to the 

child by a minimum of 30 percentage points or, at 

State option, a higher number of percentage points 

that reflects the value (as determined by the State 

and described in the State plan) of any differences 

between income methodologies used by the program 

administered by the Express Lane agency and the 

methodologies used by the State in determining eligibility for medical assistance under this title. 

‘‘(II) CHILDREN WITH INCOME NOT ABOVE

THRESHOLD.—If the income of a child does not exceed 

the screening threshold, the child is deemed to satisfy 

the income eligibility criteria for medical assistance 

under this title regardless of whether such child would 

otherwise satisfy such criteria. 

‘‘(III) CHILDREN WITH INCOME ABOVE THRESHOLD.— 

If the income of a child exceeds the screening threshold, 

the child shall be considered to have an income above 

the Medicaid applicable income level described in section 2110(b)(4) and to satisfy the requirement under 

section 2110(b)(1)(C) (relating to the requirement that 

CHIP matching funds be used only for children not 

eligible for Medicaid). If such a child is enrolled in 

child health assistance under title XXI, the State shall 

provide the parent, guardian, or custodial relative with 

the following: 

‘‘(aa) Notice that the child may be eligible 

to receive medical assistance under the State plan 

under this title if evaluated for such assistance 

under the State’s regular procedures and notice 

of the process through which a parent, guardian, 

or custodial relative can request that the State 

evaluate the child’s eligibility for medical assistance under this title using such regular procedures. 

‘‘(bb) A description of differences between the 

medical assistance provided under this title and 

child health assistance under title XXI, including 

differences in cost-sharing requirements and covered benefits. 

‘‘(iii) TEMPORARY ENROLLMENT IN CHIP PENDING SCREEN

AND ENROLL.— 

‘‘(I) IN GENERAL.—Under this clause, a State 

enrolls a child in child health assistance under title 

XXI for a temporary period if the child appears eligible 

for such assistance based on an income finding by 

an Express Lane agency. 
H. R. 2—36 

‘‘(II) DETERMINATION OF ELIGIBILITY.—During such 

temporary enrollment period, the State shall determine 

the child’s eligibility for child health assistance under 

title XXI or for medical assistance under this title 

in accordance with this clause. 

‘‘(III) PROMPT FOLLOW UP.—In making such a 

determination, the State shall take prompt action to 

determine whether the child should be enrolled in medical assistance under this title or child health assistance under title XXI pursuant to subparagraphs (A) 

and (B) of section 2102(b)(3) (relating to screen and 

enroll). 

‘‘(IV) REQUIREMENT FOR SIMPLIFIED DETERMINATION.—In making such a determination, the State shall 

use procedures that, to the maximum feasible extent, 

reduce the burden imposed on the individual of such 

determination. Such procedures may not require the 

child’s parent, guardian, or custodial relative to provide 

or verify information that already has been provided 

to the State agency by an Express Lane agency or 

another source of information unless the State agency 

has reason to believe the information is erroneous. 

‘‘(V) AVAILABILITY OF CHIP MATCHING FUNDS

DURING TEMPORARY ENROLLMENT PERIOD.—Medical 

assistance for items and services that are provided 

to a child enrolled in title XXI during a temporary 

enrollment period under this clause shall be treated 

as child health assistance under such title. 

‘‘(D) OPTION FOR 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 in writing, 

by telephone, orally, through electronic signature, or 

through any other means specified by the Secretary or 

by signature on an Express Lane agency application, if 

the requirement of clause (ii) is met. 

‘‘(ii) INFORMATION REQUIREMENT.—The requirement of 

this clause is that the State informs the parent, guardian, 

or custodial relative of the child of the services that will 

be covered, appropriate methods for using such services, 

premium or other cost sharing charges (if any) that apply, 

medical support obligations (under section 1912(a)) created 

by enrollment (if applicable), and the actions the parent, 

guardian, or relative must take to maintain enrollment 

and renew coverage. 

‘‘(E) CODING; APPLICATION TO ENROLLMENT ERROR RATES.— ‘‘(i) IN GENERAL.—For purposes of subparagraph (A)(iv), 

the requirement of this subparagraph for a State is that 

the State agrees to— 

‘‘(I) assign such codes as the Secretary shall 

require to the children who are enrolled in the State 
H. R. 2—37 

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 election under this paragraph; 

‘‘(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 

(as described in clause (iv)) with respect to the enrollment of such children (and shall not include such children in any data or samples used for purposes of 

complying with a Medicaid Eligibility Quality Control 

(MEQC) review or a payment error rate measurement 

(PERM) requirement); 

‘‘(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 elects 

to apply this paragraph, 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 elects to apply this 

paragraph, a reduction in the amount otherwise payable to the State under section 1903(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 paragraph shall be construed as relieving a State that elects 

to apply this paragraph from being subject to a penalty 

under section 1903(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)). 

‘‘(iv) ERROR RATE DEFINED.—In this subparagraph, the 

term ‘error rate’ means the rate of erroneous excess payments for medical assistance (as defined in section 

1903(u)(1)(D)) for the period involved, except that such 

payments shall be limited to individuals for which eligibility determinations are made under this paragraph and 
H. R. 2—38 

except that in applying this paragraph under title XXI, 

there shall be substituted for references to provisions of 

this title corresponding provisions within title XXI. 

‘‘(F) EXPRESS LANE AGENCY.— 

‘‘(i) IN GENERAL.—In this paragraph, 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 one or more eligibility 

requirements described in subparagraph (A)(i); 

‘‘(II) is identified in the State Medicaid plan or 

the State CHIP plan; and 

‘‘(III) notifies the child’s family— 

‘‘(aa) of the information which shall be disclosed in accordance with this paragraph; 

‘‘(bb) 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 

‘‘(cc) 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. 

‘‘(ii) INCLUSION OF SPECIFIC PUBLIC AGENCIES.—Such 

term includes the following: 

‘‘(I) A public agency that determines eligibility for 

assistance under any of the following: 

‘‘(aa) The temporary assistance for needy families program funded under part A of title IV. 

‘‘(bb) A State program funded under part D 

of title IV. 

‘‘(cc) The State Medicaid plan. 

‘‘(dd) The State CHIP plan. 

‘‘(ee) The Food and Nutrition Act of 2008 (7 

U.S.C. 2011 et seq.). 

‘‘(ff) The Head Start Act (42 U.S.C. 9801 et 

seq.). 

‘‘(gg) The Richard B. Russell National School 

Lunch Act (42 U.S.C. 1751 et seq.). 

‘‘(hh) The Child Nutrition Act of 1966 (42 

U.S.C. 1771 et seq.). 

‘‘(ii) The Child Care and Development Block 

Grant Act of 1990 (42 U.S.C. 9858 et seq.). 

‘‘(jj) The Stewart B. McKinney Homeless 

Assistance Act (42 U.S.C. 11301 et seq.). 

‘‘(kk) The United States Housing Act of 1937 

(42 U.S.C. 1437 et seq.). 

‘‘(ll) 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. 
H. R. 2—39 

‘‘(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. 

‘‘(iii) 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 or a private, for-profit organization. 

‘‘(iv) RULES OF CONSTRUCTION.—Nothing in this paragraph shall be construed as— 

‘‘(I) exempting a State Medicaid agency from complying with the requirements of section 1902(a)(4) 

relating to merit-based personnel standards for 

employees of the State Medicaid agency and safeguards 

against conflicts of interest); or 

‘‘(II) authorizing a State Medicaid agency that 

elects to use Express Lane agencies under this 

subparagraph to use the Express Lane option to avoid 

complying with such requirements for purposes of 

making eligibility determinations under the State Medicaid plan. 

‘‘(v) ADDITIONAL DEFINITIONS.—In this paragraph: 

‘‘(I) STATE.—The term ‘State’ means 1 of the 50 

States or the District of Columbia. 

‘‘(II) STATE CHIP AGENCY.—The term ‘State CHIP 

agency’ means the State agency responsible for administering the State CHIP plan. 

‘‘(III) STATE CHIP PLAN.—The term ‘State CHIP 

plan’ means the State child health plan established 

under title XXI and includes any waiver of such plan. 

‘‘(IV) STATE MEDICAID AGENCY.—The term ‘State 

Medicaid agency’ means the State agency responsible 

for administering the State Medicaid plan. 

‘‘(V) STATE MEDICAID PLAN.—The term ‘State Medicaid plan’ means the State plan established under 

title XIX and includes any waiver of such plan. 

‘‘(G) CHILD DEFINED.—For purposes of this paragraph, the 

term ‘child’ means an individual under 19 years of age, or, 

at the option of a State, such higher age, not to exceed 21 

years of age, as the State may elect. 

‘‘(H) STATE OPTION TO RELY ON STATE INCOME TAX DATA

OR RETURN.—At the option of the State, a finding from an 

Express Lane agency may include gross income or adjusted 

gross income shown by State income tax records or returns. 

‘‘(I) APPLICATION.—This paragraph shall not apply with 

respect to eligibility determinations made after September 30, 

2013.’’. 

(2) CHIP.—Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is 

amended by redesignating subparagraphs (B), (C), and (D) as 

subparagraphs (C), (D), and (E), respectively, and by inserting 

after subparagraph (A) the following new subparagraph: 

‘‘(B) Section 1902(e)(13) (relating to the State option 

to rely on findings from an Express Lane agency to help 

evaluate a child’s eligibility for medical assistance).’’. 

(b) EVALUATION AND REPORT.— 
H. R. 2—40 

(1) EVALUATION.—The Secretary shall conduct, by grant, 

contract, or interagency agreement, a comprehensive, independent evaluation of the option provided under the amendments made by subsection (a). Such evaluation shall include 

an analysis of the effectiveness of the option, 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 under paragraph (1). 

(3) FUNDING.— 

(A) IN GENERAL.—Out of any funds in the Treasury 

not otherwise appropriated, there is appropriated to the 

Secretary to carry out the evaluation under this subsection 

$5,000,000 for the period of fiscal years 2009 through 2012. 

(B) BUDGET AUTHORITY.—Subparagraph (A) constitutes 

budget authority in advance of appropriations Act and represents the obligation of the Federal Government to provide 

for the payment of such amount to conduct the evaluation 

under this subsection. 

(c) ELECTRONIC TRANSMISSION OF INFORMATION.—Section 1902 

(42 U.S.C. 1396a) is amended by adding at the end the following 

new subsection: 

‘‘(dd) ELECTRONIC TRANSMISSION OF INFORMATION.—If the State 

agency determining eligibility for medical assistance under this 

title or child health assistance under title XXI verifies an element 

of eligibility based on information from an Express Lane Agency 

(as defined in subsection (e)(13)(F)), or from another public agency, 

then the applicant’s signature under penalty of perjury shall not 

be required as to such element. Any signature requirement for 

an application for medical assistance may be satisfied through 

an electronic signature, as defined in section 1710(1) of the Government Paperwork Elimination Act (44 U.S.C. 3504 note). The requirements of subparagraphs (A) and (B) of section 1137(d)(2) may 

be met through evidence in digital or electronic form.’’. 

(d) AUTHORIZATION OF INFORMATION DISCLOSURE.— 
H. R. 2—41 

(1) IN GENERAL.—Title XIX is amended by adding at the 

end the following new section: 

‘‘SEC. 1942. AUTHORIZATION TO RECEIVE RELEVANT INFORMATION. 

‘‘(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 maintained by Express Lane 

agencies described in section 1902(e)(13)(F), 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, to the extent such conveyance meets the requirements 

of subsection (b). 

‘‘(b) REQUIREMENTS FOR CONVEYANCE.—Data or information 

may be conveyed pursuant to subsection (a) only if the following 

requirements are met: 

‘‘(1) The individual whose circumstances are described in 

the data or information (or such individual’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 individuals who are eligible or potentially eligible for medical assistance under this title and 

enrolling or attempting to enroll such individuals in the 

State plan; and 

‘‘(B) verifying the eligibility of individuals 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 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 individuals in the plan. 

‘‘(c) PENALTIES FOR IMPROPER DISCLOSURE.— 

‘‘(1) CIVIL MONEY PENALTY.—A private entity described in 

the subsection (a) that publishes, discloses, or makes known 

in any manner, or to any extent not authorized by Federal 

law, any information obtained under this section is subject 

to a civil money penalty in an amount equal to $10,000 for 

each such unauthorized publication or disclosure. The provisions of section 1128A (other than subsections (a) and (b) and 

the second sentence of subsection (f)) shall apply to a civil 

money penalty under this paragraph in the same manner as 

such provisions apply to a penalty or proceeding under section 

1128A(a). 

‘‘(2) CRIMINAL PENALTY.—A private entity described in the 

subsection (a) that willfully publishes, discloses, or makes 

known in any manner, or to any extent not authorized by 

Federal law, any information obtained under this section shall 
H. R. 2—42 

be fined not more than $10,000 or imprisoned not more than 

1 year, or both, for each such unauthorized publication or 

disclosure. 

‘‘(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).’’. 

(2) CONFORMING AMENDMENT TO TITLE XXI.—Section 

2107(e)(1) (42 U.S.C. 1397gg(e)(1)), as amended by subsection 

(a)(2), is amended by adding at the end the following new 

subparagraph: 

‘‘(F) Section 1942 (relating to authorization to receive 

data directly relevant to eligibility determinations).’’. 

(3) CONFORMING AMENDMENT TO PROVIDE ACCESS TO DATA

ABOUT ENROLLMENT IN INSURANCE FOR PURPOSES OF EVALU- ATING APPLICATIONS AND FOR CHIP.—Section 1902(a)(25)(I)(i) 

(42 U.S.C. 1396a(a)(25)(I)(i)) is amended— 

(A) by inserting ‘‘(and, at State option, individuals 

who apply or whose eligibility for medical assistance is 

being evaluated in accordance with section 1902(e)(13)(D))’’ 

after ‘‘with respect to individuals who are eligible’’; and 

(B) by inserting ‘‘under this title (and, at State option, 

child health assistance under title XXI)’’ after ‘‘the State 

plan’’. 

(e) AUTHORIZATION FOR STATES ELECTING EXPRESS LANE

OPTION TO RECEIVE CERTAIN DATA DIRECTLY RELEVANT TO DETER- MINING ELIGIBILITY AND CORRECT AMOUNT OF ASSISTANCE.—The 

Secretary shall enter into such agreements as are necessary to 

permit a State that elects the Express Lane option under section 

1902(e)(13) of the Social Security Act to receive data directly relevant to eligibility determinations and determining the correct 

amount of benefits under a State child health plan under CHIP 

or a State plan under Medicaid 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) 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. 

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

are effective on the date of the enactment of this Act. 

Subtitle B—Reducing Barriers to 

Enrollment 

SEC. 211. VERIFICATION OF DECLARATION OF CITIZENSHIP OR 

NATIONALITY FOR PURPOSES OF ELIGIBILITY FOR MEDICAID AND CHIP. 

(a) ALTERNATIVE STATE PROCESS FOR VERIFICATION OF DEC- LARATION OF CITIZENSHIP OR NATIONALITY FOR PURPOSES OF ELIGIBILITY FOR MEDICAID.— 

(1) ALTERNATIVE TO DOCUMENTATION REQUIREMENT.— 

(A) IN GENERAL.—Section 1902 (42 U.S.C. 1396a), as 

amended by section 203(c), is amended— 

(i) in subsection (a)(46)— 
H. R. 2—43 

(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 (ee);’’; and 

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

‘‘(ee)(1) For purposes of subsection (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 program established under paragraph (2). 

‘‘(B) If the State receives notice from the Commissioner 

of Social Security that the name or social security number, 

or the declaration of citizenship or nationality, of the individual 

is inconsistent with information in the records maintained by 

the Commissioner— 

‘‘(i) the State makes a reasonable effort to identify 

and address the causes of such inconsistency, including 

through typographical or other clerical errors, by contacting 

the individual to confirm the accuracy of the name or 

social security number submitted or declaration of citizenship or nationality and by taking such additional actions 

as the Secretary, through regulation or other guidance, 

or the State may identify, and continues to provide the 

individual with medical assistance while making such 

effort; and 

‘‘(ii) in the case such inconsistency is not resolved 

under clause (i), the State— 

‘‘(I) notifies the individual of such fact; 

‘‘(II) provides the individual with a period of 90 

days from the date on which the notice required under 

subclause (I) is received by the individual to either 

present satisfactory documentary evidence of citizenship or nationality (as defined in section 1903(x)(3)) 

or resolve the inconsistency with the Commissioner 

of Social Security (and continues to provide the individual with medical assistance during such 90-day 

period); 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 or if such inconsistency is not resolved. 

‘‘(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 at least monthly to 

the Commissioner of Social Security for comparison of the name 
H. R. 2—44 

and social security number, of each individual newly enrolled in 

the State plan under this title that month who is not described 

in section 1903(x)(2) and who declares to be a United States citizen 

or national, with information in records maintained by the Commissioner. 

‘‘(B) In establishing the State program under this paragraph, 

the State may enter into an agreement with the Commissioner 

of Social Security— 

‘‘(i) to provide, through an on-line system or otherwise, 

for the electronic submission of, and response to, the information submitted under subparagraph (A) for an individual 

enrolled in the State plan under this title who declares to 

be citizen or national on at least a monthly basis; or 

‘‘(ii) to provide for a determination of the consistency of 

the information submitted with the information maintained 

in the records of the Commissioner through such other method 

as agreed to by the State and the Commissioner and approved 

by the Secretary, provided that such method is no more burdensome for individuals to comply with than any burdens that 

may apply under a method described in clause (i). 

‘‘(C) The program established under this paragraph shall provide that, in the case of any individual who is required to submit 

a social security number to the State under subparagraph (A) 

and who is unable to provide the State with such number, shall 

be provided with at least the reasonable opportunity to present 

satisfactory documentary evidence of citizenship or nationality (as 

defined in section 1903(x)(3)) 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)(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 inconsistent submissions bears to the total submissions 

made for comparison for such month. For purposes of this subparagraph, a name, social security number, or declaration of citizenship 

or nationality of an individual shall be treated as inconsistent 

and included in the determination of such percentage only if— 

‘‘(i) the information submitted by the individual is not 

consistent with information in records maintained by the 

Commissioner of Social Security; 

‘‘(ii) the inconsistency is not resolved by the State; 

‘‘(iii) the individual was provided with a reasonable period 

of time to resolve the inconsistency with the Commissioner 

of Social Security or provide satisfactory documentation of citizenship status and did not successfully resolve such inconsistency; and 

‘‘(iv) payment has been made for an item or service furnished to the individual under this title. 

‘‘(B) If, for any fiscal year, the average monthly percentage 

determined under subparagraph (A) is greater than 3 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 
H. R. 2—45 

State plan for the fiscal year for providing medical assistance 

to individuals who provided inconsistent information as the 

number of individuals with inconsistent information in excess 

of 3 percent of such total submitted bears to the total number 

of individuals with inconsistent 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) Subparagraphs (A) and (B) 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 that provides 

for the submission on a real-time basis of the information described 

in such paragraph. 

‘‘(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(ee) (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)’’. 

(4) APPROPRIATION.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there are 

appropriated to the Commissioner of Social Security $5,000,000 

to remain available until expended to carry out the Commissioner’s responsibilities under section 1902(ee) of the Social 

Security Act, as added by subsection (a). 

(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 
H. R. 2—46 

(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 
H. R. 2—47 

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 114(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: 

‘‘(ii) 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.— 

(A) IN GENERAL.—Except as provided in subparagraph 

(B), the amendments made by this section shall take effect 

on January 1, 2010. 
H. R. 2—48 

(B) TECHNICAL AMENDMENTS.—The amendments made 

by— 

(i) paragraphs (1), (2), and (3) of subsection (b) 

shall take effect as if included in the enactment of 

section 6036 of the Deficit Reduction Act of 2005 

(Public Law 109–171; 120 Stat. 80); and 

(ii) paragraph (4) of subsection (b) shall take effect 

as if included in the enactment of section 405 of division B of the Tax Relief and Health Care Act of 2006 

(Public Law 109–432; 120 Stat. 2996). 

(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, 2009, 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. 212. 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 
H. R. 2—49 

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 faceto-face interview.’’. 

SEC. 213. MODEL OF INTERSTATE COORDINATED ENROLLMENT AND 

COVERAGE PROCESS. 

(a) IN GENERAL.—In order to assure continuity of coverage 

of low-income children under the Medicaid program and the State 

Children’s Health Insurance Program (CHIP), not later than 18 

months after the date of the enactment of this Act, the Secretary 

of Health and Human Services, in consultation with State Medicaid 

and CHIP directors and organizations representing program beneficiaries, shall develop a model process for the coordination of the 

enrollment, retention, and coverage under such programs of children 

who, because of migration of families, emergency evacuations, natural or other disasters, public health emergencies, educational 

needs, or otherwise, frequently change their State of residency 

or otherwise are temporarily located outside of the State of their 

residency. 

(b) REPORT TO CONGRESS.—After development of such model 

process, the Secretary of Health and Human Services shall submit 

to Congress a report describing additional steps or authority needed 

to make further improvements to coordinate the enrollment, retention, and coverage under CHIP and Medicaid of children described 

in subsection (a). 

SEC. 214. PERMITTING STATES TO ENSURE COVERAGE WITHOUT A 

5-YEAR DELAY OF CERTAIN CHILDREN AND PREGNANT 

WOMEN UNDER THE MEDICAID PROGRAM AND CHIP. 

(a) MEDICAID PROGRAM.—Section 1903(v) (42 U.S.C. 1396b(v)) 

is amended— 

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

inserting ‘‘paragraphs (2) and (4)’’; and 

(2) by adding at the end the following new paragraph: 

‘‘(4)(A) A State may elect (in a plan amendment under this 

title) to provide medical assistance under this title, notwithstanding 

sections 401(a), 402(b), 403, and 421 of the Personal Responsibility 

and Work Opportunity Reconciliation Act of 1996, to children and 

pregnant women who are lawfully residing in the United States 

(including battered individuals described in section 431(c) of such 

Act) and who are otherwise eligible for such assistance, within 

either or both of the following eligibility categories: 

‘‘(i) PREGNANT WOMEN.—Women during pregnancy (and 

during the 60-day period beginning on the last day of the 

pregnancy). 

‘‘(ii) CHILDREN.—Individuals under 21 years of age, 

including optional targeted low-income children described in 

section 1905(u)(2)(B). 

‘‘(B) In the case of a State that has elected to provide medical 

assistance to a category of aliens under subparagraph (A), no debt 

shall accrue under an affidavit of support against any sponsor 

of such an alien on the basis of provision of assistance to such 

category and the cost of such assistance shall not be considered 

as an unreimbursed cost. 
H. R. 2—50 

‘‘(C) As part of the State’s ongoing eligibility redetermination 

requirements and procedures for an individual provided medical 

assistance as a result of an election by the State under subparagraph (A), a State shall verify that the individual continues to 

lawfully reside in the United States using the documentation presented to the State by the individual on initial enrollment. If 

the State cannot successfully verify that the individual is lawfully 

residing in the United States in this manner, it shall require 

that the individual provide the State with further documentation 

or other evidence to verify that the individual is lawfully residing 

in the United States.’’. 

(b) CHIP.—Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)), as 

amended by sections 203(a)(2) and 203(d)(2), is amended by redesignating subparagraphs (E) and (F) as subparagraphs (F) and (G), 

respectively and by inserting after subparagraph (D) the following 

new subparagraph: 

‘‘(E) Paragraph (4) of section 1903(v) (relating to 

optional coverage of categories of lawfully residing 

immigrant children or pregnant women), but only if the 

State has elected to apply such paragraph with respect 

to such category of children or pregnant women under 

title XIX.’’. 

TITLE III—REDUCING BARRIERS TO 

PROVIDING PREMIUM ASSISTANCE 

Subtitle A—Additional State Option for 

Providing Premium Assistance 

SEC. 301. ADDITIONAL STATE OPTION FOR PROVIDING PREMIUM 

ASSISTANCE. 

(a) CHIP.— 

(1) IN GENERAL.—Section 2105(c) (42 U.S.C. 1397ee(c)), as 

amended by sections 114(a) and 211(c), is amended by adding 

at the end the following: 

‘‘(10) STATE OPTION TO OFFER PREMIUM ASSISTANCE.— 

‘‘(A) IN GENERAL.—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. No subsidy shall be provided to a targeted low-income child under this paragraph 

unless the child (or the child’s parent) voluntarily elects 

to receive such a subsidy. A State may not require such 

an election as a condition of receipt of child health assistance. 

‘‘(B) QUALIFIED EMPLOYER-SPONSORED COVERAGE.— 

‘‘(i) IN GENERAL.—Subject to clause (ii), in this 

paragraph, the term ‘qualified employer-sponsored coverage’ means a group health plan or health insurance 

coverage offered through an employer— 
H. R. 2—51 

‘‘(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) that is offered 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), without regard 

to whether the plan is purchased in conjunction 

with a health savings account (as defined under 

section 223(d) of such Code). 

‘‘(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 
H. R. 2—52 

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 costsharing 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 employersponsored 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 employersponsored 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 
H. R. 2—53 

‘‘(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 benchmarkequivalent coverage that meets the requirements of 

section 2103(a)(2) for employees described in clause 

(i). 

‘‘(iii) CLARIFICATION OF PAYMENT FOR ADMINISTRATIVE EXPENDITURES.—Nothing in this subparagraph 

shall be construed as permitting payment under this 

section for administrative expenditures attributable to 

the establishment or operation of such pool, except 

to the extent that such payment would otherwise be 

permitted under this title. 

‘‘(J) NO EFFECT ON PREMIUM ASSISTANCE WAIVER PROGRAMS.—Nothing in this paragraph shall be construed as 

limiting the authority of a State to offer premium assistance under section 1906 or 1906A, 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 2009. 

‘‘(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 employersponsored 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. 
H. R. 2—54 

‘‘(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). 

‘‘(M) SATISFACTION OF COST-EFFECTIVENESS TEST.—Premium assistance subsidies for qualified employer-sponsored 

coverage offered under this paragraph shall be deemed 

to meet the requirement of subparagraph (A) of paragraph 

(3). 

‘‘(N) COORDINATION WITH MEDICAID.—In the case of 

a targeted low-income child who receives child health 

assistance through a State plan under title XIX and who 

voluntarily elects to receive a premium assistance subsidy 

under this section, the provisions of section 1906A shall 

apply and shall supersede any other provisions of this 

paragraph that are inconsistent with such section.’’. 

(2) DETERMINATION OF COST-EFFECTIVENESS FOR PREMIUM

ASSISTANCE OR PURCHASE OF FAMILY COVERAGE.— (A) IN GENERAL.—Section 2105(c)(3)(A) (42 U.S.C. 

1397ee(c)(3)(A)) is amended by striking ‘‘relative to’’ and 

all that follows through the comma and inserting ‘‘relative 

to 

‘‘(i) the amount of expenditures under the State 

child health plan, including administrative expenditures, that the State would have made to provide comparable coverage of the targeted low-income child 

involved or the family involved (as applicable); or 

‘‘(ii) the aggregate amount of expenditures that 

the State would have made under the State child 

health plan, including administrative expenditures, for 

providing coverage under such plan for all such children or families.’’. 

(B) NONAPPLICATION TO PREVIOUSLY APPROVED COV- ERAGE.—The amendment made by subparagraph (A) shall 

not apply to coverage the purchase of which has been 

approved by the Secretary under section 2105(c)(3) of the 

Social Security Act prior to the date of enactment of this 

Act. 

(b) MEDICAID.—Title XIX is amended by inserting after section 

1906 the following new section: 

‘‘PREMIUM ASSISTANCE OPTION FOR CHILDREN

‘‘SEC. 1906A. (a) IN GENERAL.—A State may elect to offer a 

premium assistance subsidy (as defined in subsection (c)) for qualified employer-sponsored coverage (as defined in subsection (b)) to 
H. R. 2—55 

all individuals under age 19 who are entitled to medical assistance 

under this title (and to the parent of such an individual) who 

have access to such coverage if the State meets the requirements 

of this section. 

‘‘(b) QUALIFIED EMPLOYER-SPONSORED COVERAGE.— 

‘‘(1) IN GENERAL.—Subject to paragraph (2)), in this paragraph, the term ‘qualified employer-sponsored coverage’ means 

a group health plan or health insurance coverage offered 

through an employer— 

‘‘(A) that qualifies as creditable coverage as a group 

health plan under section 2701(c)(1) of the Public Health 

Service Act; 

‘‘(B) for which the employer contribution toward any 

premium for such coverage is at least 40 percent; and 

‘‘(C) that is offered 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). 

‘‘(2) EXCEPTION.—Such term does not include coverage consisting of— 

‘‘(A) benefits provided under a health flexible spending 

arrangement (as defined in section 106(c)(2) of the Internal 

Revenue Code of 1986); or 

‘‘(B) a high deductible health plan (as defined in section 

223(c)(2) of such Code), without regard to whether the 

plan is purchased in conjunction with a health savings 

account (as defined under section 223(d) of such Code). 

‘‘(3) TREATMENT AS THIRD PARTY LIABILITY.—The State shall 

treat the coverage provided under qualified employer-sponsored 

coverage as a third party liability under section 1902(a)(25). 

‘‘(c) PREMIUM ASSISTANCE SUBSIDY.—In this section, the term 

‘premium assistance subsidy’ means the amount of the employee 

contribution for enrollment in the qualified employer-sponsored coverage by the individual under age 19 or by the individual’s family. 

Premium assistance subsidies under this section shall be considered, 

for purposes of section 1903(a), to be a payment for medical assistance. 

‘‘(d) VOLUNTARY PARTICIPATION.— 

‘‘(1) EMPLOYERS.—Participation by an employer in a premium assistance subsidy offered by a State under this section 

shall be voluntary. 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. 

‘‘(2) BENEFICIARIES.—No subsidy shall be provided to an 

individual under age 19 under this section unless the individual 

(or the individual’s parent) voluntarily elects to receive such 

a subsidy. A State may not require such an election as a 

condition of receipt of medical assistance. State may not require, 

as a condition of an individual under age 19 (or the individual’s 

parent) being or remaining eligible for medical assistance under 

this title, apply for enrollment in qualified employer-sponsored 

coverage under this section. 

‘‘(3) OPT-OUT PERMITTED FOR ANY MONTH.—A State shall 

establish a process for permitting the parent of an individual 

under age 19 receiving a premium assistance subsidy to 
H. R. 2—56 

disenroll the individual from the qualified employer-sponsored 

coverage. 

‘‘(e) REQUIREMENT TO PAY PREMIUMS AND COST-SHARING AND

PROVIDE SUPPLEMENTAL COVERAGE.—In the case of the participation of an individual under age 19 (or the individual’s parent) 

in a premium assistance subsidy under this section for qualified 

employer-sponsored coverage, the State shall provide for payment 

of all enrollee premiums for enrollment in such coverage and all 

deductibles, coinsurance, and other cost-sharing obligations for 

items and services otherwise covered under the State plan under 

this title (exceeding the amount otherwise permitted under section 

1916 or, if applicable, section 1916A). The fact that an individual 

under age 19 (or a parent) elects to enroll in qualified employersponsored coverage under this section shall not change the individual’s (or parent’s) eligibility for medical assistance under the State 

plan, except insofar as section 1902(a)(25) provides that payments 

for such assistance shall first be made under such coverage.’’. 

(c) GAO STUDY AND REPORT.—Not later than January 1, 2010, 

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 Committee on Finance 

of the Senate and the Committee on Energy and Commerce of 

the House of Representatives on the results of such study. 

SEC. 302. 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.—In the case of a State 

that provides for premium assistance subsidies under the State 

child health plan in accordance with paragraph (2)(B), (3), 

or (10) of section 2105(c), or a waiver approved under section 

1115, outreach, education, and enrollment assistance for families of children likely to be eligible for such subsidies, 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 211(c)(2), is amended by 

adding at the end the following new clause: 

‘‘(iii) 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 paragraph (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 
H. R. 2—57 

employers likely to provide qualified employer-sponsored coverage (as defined in subparagraph (B) of such 

paragraph), but not to exceed an amount equal to 

1.25 percent of the maximum amount permitted to 

be expended under subparagraph (A) for items 

described in subsection (a)(1)(D).’’. 

Subtitle B—Coordinating Premium 

Assistance With Private Coverage 

SEC. 311. 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 COV- ERAGE.—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 
H. R. 2—58 

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 

developed in accordance with section 

701(f)(3)(B)(i)(II) of the Employee Retirement 

Income Security Act of 1974 (29 U.S.C. 

1181(f)(3)(B)(i)(II)). 

‘‘(II) OPTION TO PROVIDE CONCURRENT WITH

PROVISION OF PLAN MATERIALS TO EMPLOYEE.—An 

employer may provide the model notice applicable 

to the State in which an employee resides concurrent with the furnishing of materials notifying the 

employee of health plan eligibility, concurrent with 

materials provided to the employee in connection 

with an open season or election process conducted 

under the plan, or 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 

311(b)(1)(C) of the Children’s Health Insurance Program Reauthorization Act of 2009, 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 SECU- RITY 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: 
H. R. 2—59 

‘‘(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 

2009, 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 
H. R. 2—60 

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 PLAN MATERIALS TO EMPLOYEE.—An 

employer may provide the model notice applicable 

to the State in which an employee resides concurrent with the furnishing of materials notifying the 

employee of health plan eligibility, concurrent with 

materials provided to the employee in connection 

with an open season or election process conducted 

under the plan, or 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 

311(b)(1)(C) of the Children’s Health Insurance Program Reauthorization Act of 2009, 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’’. 
H. R. 2—61 

(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; 
H. R. 2—62 

(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); 

(VII) health insurance issuers; and 

(VIII) 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 
H. R. 2—63 

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.’’. 

(2) AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.—Section 

2701(f) of the Public Health Service Act (42 U.S.C. 300gg(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. 
H. R. 2—64 

‘‘(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. For 

purposes of compliance with this subclause, the 

employer may use any State-specific model notice 

developed in accordance with section 

701(f)(3)(B)(i)(II) of the Employee Retirement 

Income Security Act of 1974 (29 U.S.C. 

1181(f)(3)(B)(i)(II)). 

‘‘(II) OPTION TO PROVIDE CONCURRENT WITH

PROVISION OF PLAN MATERIALS TO EMPLOYEE.—An 

employer may provide the model notice applicable 

to the State in which an employee resides concurrent with the furnishing of materials notifying the 

employee of health plan eligibility, concurrent with 

materials provided to the employee in connection 

with an open season or election process conducted 

under the plan, or concurrent with the furnishing 

of the summary plan description as provided in 

section 104(b) of the Employee Retirement Income 

Security Act of 1974. 

‘‘(ii) DISCLOSURE ABOUT GROUP HEALTH PLAN BENEFITS TO STATES FOR MEDICAID AND CHIP ELIGIBLE

INDIVIDUALS.—In the case of an enrollee in 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 311(b)(1)(C) 

of the Children’s Health Insurance Reauthorization Act 

of 2009, 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 
H. R. 2—65 

supplemental benefits required under paragraph 

(10)(E) of such section or other authority.’’. 

TITLE IV—STRENGTHENING QUALITY 

OF CARE AND HEALTH OUTCOMES 

SEC. 401. 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, 2010, 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 and effectiveness of a full range 

of— 

‘‘(i) preventive services, treatments, and services 

for acute conditions, including services to promote 

healthy birth, prevent and treat premature birth, and 

detect the presence or risk of physical or mental conditions that could adversely affect growth and development; and 

‘‘(ii) treatments to correct or ameliorate the effects 

of physical and mental conditions, including chronic 

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, including children with special needs, 

and to perform comparative analyses of pediatric health 
H. R. 2—66 

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 2009, 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, 

2011, 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— 
H. R. 2—67 

‘‘(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, 2011, 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; 
H. R. 2—68 

‘‘(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 children, 

including children with disabilities and children with 

chronic conditions; 

‘‘(F) national organizations representing consumers and 

purchasers of children’s health care; 

‘‘(G) national organizations and individuals with expertise in pediatric health quality measurement; and 

‘‘(H) 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 evidencebased 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, 2013, 

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. 

‘‘(7) CONSTRUCTION.—Nothing in this section shall be construed as supporting the restriction of coverage, under title 

XIX or XXI or otherwise, to only those services that are evidence-based. 

‘‘(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— 
H. R. 2—69 

‘‘(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, 2010, 

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 2009 

through 2013, 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. 
H. R. 2—70 

‘‘(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— 
H. R. 2—71 

‘‘(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— 
H. R. 2—72 

‘‘(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 2009, 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 2009, the Secretary shall award 1 grant that is specifically designed 
H. R. 2—73 

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 selfassessment; 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 2009 through 2013. 
H. R. 2—74 

‘‘(f) DEVELOPMENT OF MODEL ELECTRONIC HEALTH RECORD

FORMAT FOR CHILDREN ENROLLED IN MEDICAID OR CHIP.— 

‘‘(1) IN GENERAL.—Not later than January 1, 2010, 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, 2010, 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 
H. R. 2—75 

‘‘(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 2009 through 2013, $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. 402. IMPROVED AVAILABILITY OF PUBLIC INFORMATION 

REGARDING ENROLLMENT OF CHILDREN IN CHIP AND 

MEDICAID. 

(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. 
H. R. 2—76 

‘‘(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 costsharing 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) STANDARDIZED REPORTING FORMAT.— 

(1) IN GENERAL.—Not later than 1 year after the date 

of enactment of this Act, the Secretary shall specify a standardized format for States to use for reporting the information 

required under section 2108(e) of the Social Security Act, as 

added by subsection (a)(2). 

(2) TRANSITION PERIOD FOR STATES.—Each State that is 

required to submit a report under subsection (a) of section 

2108 of the Social Security Act that includes the information 

required under subsection (e) of such section may use up to 

3 reporting periods to transition to the reporting of such 

information in accordance with the standardized format specified by the Secretary under paragraph (1). 

(c) 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 2009 for the purpose of 

improving the timeliness of the data reported and analyzed 

from the Medicaid Statistical Information System (MSIS) for 

purposes of providing more timely data on enrollment and 

eligibility of children under Medicaid and CHIP 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 
H. R. 2—77 

to report such information in a complete and expeditious 

manner) so that, beginning no later than October 1, 2009, 

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. 

(d) 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 Committee on Finance of the Senate and the Committee 

on Energy and Commerce of the House of Representatives 

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. 403. APPLICATION OF CERTAIN MANAGED CARE QUALITY SAFEGUARDS TO CHIP. 

(a) IN GENERAL.—Section 2103(f) of Social Security Act (42 

U.S.C. 1397bb(f)) is amended by adding at the end the following 

new paragraph: 

‘‘(3) COMPLIANCE WITH MANAGED CARE REQUIREMENTS.— 

The State child health plan shall provide for the application 

of subsections (a)(4), (a)(5), (b), (c), (d), and (e) of section 1932 

(relating to requirements for managed care) to coverage, State 

agencies, enrollment brokers, managed care entities, and managed care organizations under this title in the same manner 

as such subsections apply to coverage and such entities and 

organizations under title XIX.’’. 

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

shall apply to contract years for health plans beginning on or 

after July 1, 2009. 

TITLE V—IMPROVING ACCESS TO 

BENEFITS 

SEC. 501. DENTAL BENEFITS. 

(a) COVERAGE.— 
H. R. 2—78 

(1) IN GENERAL.—Section 2103 (42 U.S.C. 1397cc) is 

amended— 

(A) in subsection (a)— 

(i) in the matter before paragraph (1), by striking 

‘‘subsection (c)(5)’’ and inserting ‘‘paragraphs (5) and 

(7) of subsection (c)’’; and 

(ii) in paragraph (1), by inserting ‘‘at least’’ after 

‘‘that is’’; and 

(B) in subsection (c)— 

(i) by redesignating paragraph (5) as paragraph 

(7); and 

(ii) by inserting after paragraph (4), the following: 

‘‘(5) DENTAL BENEFITS.— 

‘‘(A) IN GENERAL.—The child health assistance provided 

to a targeted low-income child shall include coverage of 

dental services necessary to prevent disease and promote 

oral health, restore oral structures to health and function, 

and treat emergency conditions. 

‘‘(B) PERMITTING USE OF DENTAL BENCHMARK PLANS

BY CERTAIN STATES.—A State may elect to meet the requirement of subparagraph (A) through dental coverage that 

is equivalent to a benchmark dental benefit package 

described in subparagraph (C). 

‘‘(C) BENCHMARK DENTAL BENEFIT PACKAGES.—The 

benchmark dental benefit packages are as follows: 

‘‘(i) FEHBP CHILDREN’S DENTAL COVERAGE.—A 

dental benefits plan under chapter 89A of title 5, 

United States Code, that has been selected most frequently by employees seeking dependent coverage, 

among such plans that provide such dependent coverage, in either of the previous 2 plan years. 

‘‘(ii) STATE EMPLOYEE DEPENDENT DENTAL COVERAGE.—A dental benefits plan that is offered and 

generally available to State employees in the State 

involved and that has been selected most frequently 

by employees seeking dependent coverage, among such 

plans that provide such dependent coverage, in either 

of the previous 2 plan years. 

‘‘(iii) COVERAGE OFFERED THROUGH COMMERCIAL

DENTAL PLAN.—A dental benefits plan that has the 

largest insured commercial, non-medicaid enrollment 

of dependent covered lives of such plans that is offered 

in the State involved.’’. 

(2) ASSURING ACCESS TO CARE.—Section 2102(a)(7)(B) (42 

U.S.C. 1397bb(c)(2)) is amended by inserting ‘‘and services 

described in section 2103(c)(5)’’ after ‘‘emergency services’’. 

(3) EFFECTIVE DATE.—The amendments made by paragraphs (1) and (2) shall apply to coverage of items and services 

furnished on or after October 1, 2009. 

(b) STATE OPTION TO PROVIDE DENTAL-ONLY SUPPLEMENTAL

COVERAGE.— 

(1) IN GENERAL.—Section 2110(b) (42 U.S.C. 1397jj(b)) is 

amended— 

(A) in paragraph (1)(C), by inserting ‘‘, subject to paragraph (5),’’ after ‘‘under title XIX or’’; and 

(B) by adding at the end the following new paragraph: 
H. R. 2—79 

‘‘(5) OPTION FOR STATES WITH A SEPARATE CHIP PROGRAM

TO PROVIDE DENTAL-ONLY SUPPLEMENTAL COVERAGE.— 

‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and 

(C), in the case of any child who is enrolled in a group 

health plan or health insurance coverage offered through 

an employer who would, but for the application of paragraph (1)(C), satisfy the requirements for being a targeted 

low-income child under a State child health plan that is 

implemented under this title, a State may waive the 

application of such paragraph to the child in order to 

provide— 

‘‘(i) dental coverage consistent with the requirements of subsection (c)(5) of section 2103; or 

‘‘(ii) cost-sharing protection for dental coverage 

consistent with such requirements and the requirements of subsection (e)(3)(B) of such section. 

‘‘(B) LIMITATION.—A State may limit the application 

of a waiver of paragraph (1)(C) to children whose family 

income does not exceed a level specified by the State, 

so long as the level so specified does not exceed the maximum income level otherwise established for other children 

under the State child health plan. 

‘‘(C) CONDITIONS.—A State may not offer dental-only 

supplemental coverage under this paragraph unless the 

State satisfies the following conditions: 

‘‘(i) INCOME ELIGIBILITY.—The State child health 

plan under this title— 

‘‘(I) has the highest income eligibility standard 

permitted under this title (or a waiver) as of 

January 1, 2009; 

‘‘(II) does not limit the acceptance of applications for children or impose any numerical limitation, waiting list, or similar limitation on the eligibility of such children for child health assistance 

under such State plan; and 

‘‘(III) provides benefits to all children in the 

State who apply for and meet eligibility standards. 

‘‘(ii) NO MORE FAVORABLE TREATMENT.—The State 

child health plan may not provide more favorable 

dental coverage or cost-sharing protection for dental 

coverage to children provided dental-only supplemental 

coverage under this paragraph than the dental coverage and cost-sharing protection for dental coverage 

provided to targeted low-income children who are 

eligible for the full range of child health assistance 

provided under the State child health plan.’’. 

(2) STATE OPTION TO WAIVE WAITING PERIOD.—Section 

2102(b)(1)(B) (42 U.S.C. 1397bb(b)(1)(B)), as amended by section 

111(b)(2), is amended— 

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

(B) in clause (iii), by striking the period and inserting 

‘‘; and’’; and 

(C) by adding at the end the following new clause: 

‘‘(iv) at State option, may not apply a waiting 

period in the case of a child provided dental-only 

supplemental coverage under section 2110(b)(5).’’. 
H. R. 2—80 

(c) DENTAL EDUCATION FOR PARENTS OF NEWBORNS.—The Secretary shall develop and implement, through entities that fund 

or provide perinatal care services to targeted low-income children 

under a State child health plan under title XXI of the Social 

Security Act, a program to deliver oral health educational materials 

that inform new parents about risks for, and prevention of, early 

childhood caries and the need for a dental visit within their 

newborn’s first year of life. 

(d) PROVISION OF DENTAL SERVICES THROUGH FQHCS.— 

(1) MEDICAID.—Section 1902(a) (42 U.S.C. 1396a(a)) is 

amended— 

(A) by striking ‘‘and’’ at the end of paragraph (70); 

(B) by striking the period at the end of paragraph 

(71) and inserting ‘‘; and’’; and 

(C) by inserting after paragraph (71) the following 

new paragraph: 

‘‘(72) provide that the State will not prevent a Federallyqualified health center from entering into contractual relationships with private practice dental providers in the provision 

of Federally-qualified health center services.’’. 

(2) CHIP.—Section 2107(e)(1) (42 U.S.C. 1397g(e)(1)), as 

amended by subsections (a)(2) and (d)(2) of section 203, is 

amended by inserting after subparagraph (B) the following 

new subparagraph (and redesignating the succeeding subparagraphs accordingly): 

‘‘(C) Section 1902(a)(72) (relating to limiting FQHC 

contracting for provision of dental services).’’. 

(3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect on January 1, 2009. 

(e) REPORTING INFORMATION ON DENTAL HEALTH.— 

(1) MEDICAID.—Section 1902(a)(43)(D)(iii) (42 U.S.C. 

1396a(a)(43)(D)(iii)) is amended by inserting ‘‘and other 

information relating to the provision of dental services to such 

children described in section 2108(e)’’ after ‘‘receiving dental 

services,’’. 

(2) CHIP.—Section 2108 (42 U.S.C. 1397hh) is amended 

by adding at the end the following new subsection: 

‘‘(e) INFORMATION ON DENTAL CARE FOR CHILDREN.— 

‘‘(1) IN GENERAL.—Each annual report under subsection 

(a) shall include the following information with respect to care 

and services described in section 1905(r)(3) provided to targeted 

low-income children enrolled in the State child health plan 

under this title at any time during the year involved: 

‘‘(A) The number of enrolled children by age grouping 

used for reporting purposes under section 1902(a)(43). 

‘‘(B) For children within each such age grouping, 

information of the type contained in questions 12(a)–(c) 

of CMS Form 416 (that consists of the number of enrolled 

targeted low income children who receive any, preventive, 

or restorative dental care under the State plan). 

‘‘(C) For the age grouping that includes children 8 

years of age, the number of such children who have received 

a protective sealant on at least one permanent molar tooth. 

‘‘(2) INCLUSION OF INFORMATION ON ENROLLEES IN MANAGED

CARE PLANS.—The information under paragraph (1) shall 

include information on children who are enrolled in managed 

care plans and other private health plans and contracts with 
H. R. 2—81 

such plans under this title shall provide for the reporting 

of such information by such plans to the State.’’. 

(3) EFFECTIVE DATE.—The amendments made by this subsection shall be effective for annual reports submitted for years 

beginning after date of enactment. 

(f) IMPROVED ACCESSIBILITY OF DENTAL PROVIDER INFORMATION

TO ENROLLEES UNDER MEDICAID AND CHIP.—The Secretary shall— 

(1) work with States, pediatric dentists, and other dental 

providers (including providers that are, or are affiliated with, 

a school of dentistry) to include, not later than 6 months after 

the date of the enactment of this Act, on the Insure Kids 

Now website (http://www.insurekidsnow.gov/) and hotline (1– 

877–KIDS–NOW) (or on any successor websites or hotlines) 

a current and accurate list of all such dentists and providers 

within each State that provide dental services to children 

enrolled in the State plan (or waiver) under Medicaid or the 

State child health plan (or waiver) under CHIP, and shall 

ensure that such list is updated at least quarterly; and 

(2) work with States to include, not later than 6 months 

after the date of the enactment of this Act, a description of 

the dental services provided under each State plan (or waiver) 

under Medicaid and each State child health plan (or waiver) 

under CHIP on such Insure Kids Now website, and shall ensure 

that such list is updated at least annually. 

(g) INCLUSION OF STATUS OF EFFORTS TO IMPROVE DENTAL

CARE IN REPORTS ON THE QUALITY OF CHILDREN’S HEALTH CARE

UNDER MEDICAID AND CHIP.—Section 1139A(a), as added by section 

401(a), is amended— 

(1) in paragraph (3)(B)(ii), by inserting ‘‘and, with respect 

to dental care, conditions requiring the restoration of teeth, 

relief of pain and infection, and maintenance of dental health’’ 

after ‘‘chronic conditions’’; and 

(2) in paragraph (6)(A)(ii), by inserting ‘‘dental care,’’ after 

‘‘preventive health services,’’. 

(h) GAO STUDY AND REPORT.— 

(1) STUDY.—The Comptroller General of the United States 

shall provide for a study that examines— 

(A) access to dental services by children in underserved 

areas; 

(B) children’s access to oral health care, including 

preventive and restorative services, under Medicaid and 

CHIP, including— 

(i) the extent to which dental providers are willing 

to treat children eligible for such programs; 

(ii) information on such children’s access to networks of care, including such networks that serve special needs children; and 

(iii) geographic availability of oral health care, 

including preventive and restorative services, under 

such programs; and 

(C) the feasibility and appropriateness of using qualified mid-level dental health providers, in coordination with 

dentists, to improve access for children to oral health services and public health overall. 

(2) REPORT.—Not later than 18 months year after the date 

of the enactment of this Act, the Comptroller General shall 

submit to Congress a report on the study conducted under 
H. R. 2—82 

paragraph (1). The report shall include recommendations for 

such Federal and State legislative and administrative changes 

as the Comptroller General determines are necessary to address 

any barriers to access to oral health care, including preventive 

and restorative services, under Medicaid and CHIP that may 

exist. 

SEC. 502. MENTAL HEALTH PARITY IN CHIP PLANS. 

(a) ASSURANCE OF PARITY.—Section 2103(c) (42 U.S.C. 

1397cc(c)), as amended by section 501(a)(1)(B), is amended by 

inserting after paragraph (5), the following: 

‘‘(6) 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 use disorder benefits, such 

plan shall ensure that the financial requirements and treatment limitations applicable to such mental health or substance use disorder benefits comply with the requirements 

of section 2705(a) of the Public Health Service Act in the 

same manner as such requirements apply to a group health 

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), as amended by section 501(a)(1)(A)(i), 

in the matter preceding paragraph (1), by inserting ‘‘, (6),’’ 

after ‘‘(5)’’; and 

(2) in subsection (c)(2), by striking subparagraph (B) and 

redesignating subparagraphs (C) and (D) as subparagraphs (B) 

and (C), respectively. 

SEC. 503. 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 section 501(c)(2) is amended by 

inserting after subparagraph (C) the following new subparagraph (and redesignating the succeeding subparagraphs accordingly): 

‘‘(D) 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, 

2009. 

(b) TRANSITION GRANTS.— 

(1) APPROPRIATION.—Out of any funds in the Treasury 

not otherwise appropriated, there is appropriated to the Secretary for fiscal year 2009, $5,000,000, to remain available 
H. R. 2—83 

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)(D) 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, 2011, 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. 

SEC. 504. PREMIUM GRACE PERIOD. 

(a) IN GENERAL.—Section 2103(e)(3) (42 U.S.C. 1397cc(e)(3)) 

is amended by adding at the end the following new subparagraph: 

‘‘(C) PREMIUM GRACE PERIOD.—The State child health 

plan— 

‘‘(i) shall afford individuals enrolled under the plan 

a grace period of at least 30 days from the beginning 

of a new coverage period to make premium payments 

before the individual’s coverage under the plan may 

be terminated; and 

‘‘(ii) shall provide to such an individual, not later 

than 7 days after the first day of such grace period, 

notice— 

‘‘(I) that failure to make a premium payment 

within the grace period will result in termination 

of coverage under the State child health plan; and 

‘‘(II) of the individual’s right to challenge the 

proposed termination pursuant to the applicable 

Federal regulations. 

For purposes of clause (i), the term ‘new coverage period’ 

means the month immediately following the last month 

for which the premium has been paid.’’. 

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

shall apply to new coverage periods beginning on or after the 

date of the enactment of this Act. 

SEC. 505. CLARIFICATION OF COVERAGE OF SERVICES PROVIDED 

THROUGH SCHOOL-BASED HEALTH CENTERS. 

(a) IN GENERAL.—Section 2103(c) (42 U.S.C. 1397cc(c)), as 

amended by section 501(a)(1)(B), is amended by adding at the 

end the following new paragraph: 

‘‘(8) AVAILABILITY OF COVERAGE FOR ITEMS AND SERVICES

FURNISHED THROUGH SCHOOL-BASED HEALTH CENTERS.— 

Nothing in this title shall be construed as limiting a State’s 

ability to provide child health assistance for covered items 

and services that are furnished through school-based health 

centers (as defined in section 2110(c)(9)).’’. 

(b) DEFINITION.—Section 2110(c) (42 U.S.C. 1397jj) is amended 

by adding at the end the following: 
H. R. 2—84 

‘‘(9) SCHOOL-BASED HEALTH CENTER.— 

‘‘(A) IN GENERAL.—The term ‘school-based health 

center’ means a health clinic that— 

‘‘(i) is located in or near a school facility of a 

school district or board or of an Indian tribe or tribal 

organization; 

‘‘(ii) is organized through school, community, and 

health provider relationships; 

‘‘(iii) is administered by a sponsoring facility; 

‘‘(iv) provides through health professionals primary 

health services to children in accordance with State 

and local law, including laws relating to licensure and 

certification; and 

‘‘(v) satisfies such other requirements as a State 

may establish for the operation of such a clinic. 

‘‘(B) SPONSORING FACILITY.—For purposes of subparagraph (A)(iii), the term ‘sponsoring facility’ includes any 

of the following: 

‘‘(i) A hospital. 

‘‘(ii) A public health department. 

‘‘(iii) A community health center. 

‘‘(iv) A nonprofit health care agency. 

‘‘(v) A school or school system. 

‘‘(vi) A program administered by the Indian Health 

Service or the Bureau of Indian Affairs or operated 

by an Indian tribe or a tribal organization.’’. 

SEC. 506. MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION. 

(a) IN GENERAL.—Title XIX (42 U.S.C. 1396 et seq.) is amended 

by inserting before section 1901 the following new section: 

‘‘MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION

‘‘SEC. 1900. (a) ESTABLISHMENT.—There is hereby established 

the Medicaid and CHIP Payment and Access Commission (in this 

section referred to as ‘MACPAC’). 

‘‘(b) DUTIES.— 

‘‘(1) REVIEW OF ACCESS POLICIES AND ANNUAL REPORTS.— 

MACPAC shall— 

‘‘(A) review policies of the Medicaid program established under this title (in this section referred to as ‘Medicaid’) and the State Children’s Health Insurance Program 

established under title XXI (in this section referred to 

as ‘CHIP’) affecting children’s access to covered items and 

services, including topics described in paragraph (2); 

‘‘(B) make recommendations to Congress concerning 

such access policies; 

‘‘(C) by not later than March 1 of each year (beginning 

with 2010), submit a report to Congress containing the 

results of such reviews and MACPAC’s recommendations 

concerning such policies; and 

‘‘(D) by not later than June 1 of each year (beginning 

with 2010), submit a report to Congress containing an 

examination of issues affecting Medicaid and CHIP, 

including the implications of changes in health care 

delivery in the United States and in the market for health 

care services on such programs. 
H. R. 2—85 

‘‘(2) SPECIFIC TOPICS TO BE REVIEWED.—Specifically, 

MACPAC shall review and assess the following: 

‘‘(A) MEDICAID AND CHIP PAYMENT POLICIES.—Payment 

policies under Medicaid and CHIP, including— 

‘‘(i) the factors affecting expenditures for items 

and services in different sectors, including the process 

for updating hospital, skilled nursing facility, physician, Federally-qualified health center, rural health 

center, and other fees; 

‘‘(ii) payment methodologies; and 

‘‘(iii) the relationship of such factors and methodologies to access and quality of care for Medicaid 

and CHIP beneficiaries. 

‘‘(B) INTERACTION OF MEDICAID AND CHIP PAYMENT POLICIES WITH HEALTH CARE DELIVERY GENERALLY.—The effect 

of Medicaid and CHIP payment policies on access to items 

and services for children and other Medicaid and CHIP 

populations other than under this title or title XXI and 

the implications of changes in health care delivery in the 

United States and in the general market for health care 

items and services on Medicaid and CHIP. 

‘‘(C) OTHER ACCESS POLICIES.—The effect of other Medicaid and CHIP policies on access to covered items and 

services, including policies relating to transportation and 

language barriers. 

‘‘(3) CREATION OF EARLY-WARNING SYSTEM.—MACPAC shall 

create an early-warning system to identify provider shortage 

areas or any other problems that threaten access to care or 

the health care status of Medicaid and CHIP beneficiaries. 

‘‘(4) COMMENTS ON CERTAIN SECRETARIAL REPORTS.—If the 

Secretary submits to Congress (or a committee of Congress) 

a report that is required by law and that relates to access 

policies, including with respect to payment policies, under Medicaid or CHIP, the Secretary shall transmit a copy of the 

report to MACPAC. MACPAC shall review the report and, 

not later than 6 months after the date of submittal of the 

Secretary’s report to Congress, shall submit to the appropriate 

committees of Congress written comments on such report. Such 

comments may include such recommendations as MACPAC 

deems appropriate. 

‘‘(5) AGENDA AND ADDITIONAL REVIEWS.—MACPAC shall 

consult periodically with the chairmen and ranking minority 

members of the appropriate committees of Congress regarding 

MACPAC’s agenda and progress towards achieving the agenda. 

MACPAC may conduct additional reviews, and submit additional reports to the appropriate committees of Congress, from 

time to time on such topics relating to the program under 

this title or title XXI as may be requested by such chairmen 

and members and as MACPAC deems appropriate. 

‘‘(6) AVAILABILITY OF REPORTS.—MACPAC shall transmit 

to the Secretary a copy of each report submitted under this 

subsection and shall make such reports available to the public. 

‘‘(7) APPROPRIATE COMMITTEE OF CONGRESS.—For purposes 

of this section, the term ‘appropriate committees of Congress’ 

means the Committee on Energy and Commerce of the House 

of Representatives and the Committee on Finance of the Senate. 
H. R. 2—86 

‘‘(8) VOTING AND REPORTING REQUIREMENTS.—With respect 

to each recommendation contained in a report submitted under 

paragraph (1), each member of MACPAC shall vote on the 

recommendation, and MACPAC shall include, by member, the 

results of that vote in the report containing the recommendation. 

‘‘(9) EXAMINATION OF BUDGET CONSEQUENCES.—Before 

making any recommendations, MACPAC shall examine the 

budget consequences of such recommendations, directly or 

through consultation with appropriate expert entities. 

‘‘(c) MEMBERSHIP.— 

‘‘(1) NUMBER AND APPOINTMENT.—MACPAC shall be composed of 17 members appointed by the Comptroller General 

of the United States. 

‘‘(2) QUALIFICATIONS.— 

‘‘(A) IN GENERAL.—The membership of MACPAC shall 

include individuals who have had direct experience as 

enrollees or parents of enrollees in Medicaid or CHIP and 

individuals with national recognition for their expertise 

in Federal safety net health programs, health finance and 

economics, actuarial science, health facility management, 

health plans and integrated delivery systems, reimbursement of health facilities, health information technology, 

pediatric physicians, dentists, and other providers of health 

services, and other related fields, who provide a mix of 

different professionals, broad geographic representation, 

and a balance between urban and rural representatives. 

‘‘(B) INCLUSION.—The membership of MACPAC shall 

include (but not be limited to) physicians and other health 

professionals, employers, third-party payers, and individuals with expertise in the delivery of health services. Such 

membership shall also include consumers representing children, pregnant women, the elderly, and individuals with 

disabilities, current or former representatives of State agencies responsible for administering Medicaid, and current 

or former representatives of State agencies responsible for 

administering CHIP. 

‘‘(C) MAJORITY NONPROVIDERS.—Individuals who are 

directly involved in the provision, or management of the 

delivery, of items and services covered under Medicaid 

or CHIP shall not constitute a majority of the membership 

of MACPAC. 

‘‘(D) ETHICAL DISCLOSURE.—The Comptroller General 

of the United States shall establish a system for public 

disclosure by members of MACPAC of financial and other 

potential conflicts of interest relating to such members. 

Members of MACPAC shall be treated as employees of 

Congress for purposes of applying title I of the Ethics 

in Government Act of 1978 (Public Law 95–521). 

‘‘(3) TERMS.— 

‘‘(A) IN GENERAL.—The terms of members of MACPAC 

shall be for 3 years except that the Comptroller General 

of the United States shall designate staggered terms for 

the members first appointed. 

‘‘(B) VACANCIES.—Any member appointed to fill a 

vacancy occurring before the expiration of the term for 

which the member’s predecessor was appointed shall be 
H. R. 2—87 

appointed only for the remainder of that term. A member 

may serve after the expiration of that member’s term until 

a successor has taken office. A vacancy in MACPAC shall 

be filled in the manner in which the original appointment 

was made. 

‘‘(4) COMPENSATION.—While serving on the business of 

MACPAC (including travel time), a member of MACPAC shall 

be entitled to compensation at the per diem equivalent of the 

rate provided for level IV of the Executive Schedule under 

section 5315 of title 5, United States Code; and while so serving 

away from home and the member’s regular place of business, 

a member may be allowed travel expenses, as authorized by 

the Chairman of MACPAC. Physicians serving as personnel 

of MACPAC may be provided a physician comparability allowance by MACPAC in the same manner as Government physicians may be provided such an allowance by an agency under 

section 5948 of title 5, United States Code, and for such purpose 

subsection (i) of such section shall apply to MACPAC in the 

same manner as it applies to the Tennessee Valley Authority. 

For purposes of pay (other than pay of members of MACPAC) 

and employment benefits, rights, and privileges, all personnel 

of MACPAC shall be treated as if they were employees of 

the United States Senate. 

‘‘(5) CHAIRMAN; VICE CHAIRMAN.—The Comptroller General 

of the United States shall designate a member of MACPAC, 

at the time of appointment of the member as Chairman and 

a member as Vice Chairman for that term of appointment, 

except that in the case of vacancy of the Chairmanship or 

Vice Chairmanship, the Comptroller General of the United 

States may designate another member for the remainder of 

that member’s term. 

‘‘(6) MEETINGS.—MACPAC shall meet at the call of the 

Chairman. 

‘‘(d) DIRECTOR AND STAFF; EXPERTS AND CONSULTANTS.—Subject to such review as the Comptroller General of the United States 

deems necessary to assure the efficient administration of MACPAC, 

MACPAC may— 

‘‘(1) employ and fix the compensation of an Executive 

Director (subject to the approval of the Comptroller General 

of the United States) and such other personnel as may be 

necessary to carry out its duties (without regard to the provisions of title 5, United States Code, governing appointments 

in the competitive service); 

‘‘(2) seek such assistance and support as may be required 

in the performance of its duties from appropriate Federal 

departments and agencies; 

‘‘(3) enter into contracts or make other arrangements, as 

may be necessary for the conduct of the work of MACPAC 

(without regard to section 3709 of the Revised Statutes (41 

U.S.C. 5)); 

‘‘(4) make advance, progress, and other payments which 

relate to the work of MACPAC; 

‘‘(5) provide transportation and subsistence for persons 

serving without compensation; and 

‘‘(6) prescribe such rules and regulations as it deems necessary with respect to the internal organization and operation 

of MACPAC. 
H. R. 2—88 

‘‘(e) POWERS.— 

‘‘(1) OBTAINING OFFICIAL DATA.—MACPAC may secure 

directly from any department or agency of the United States 

information necessary to enable it to carry out this section. 

Upon request of the Chairman, the head of that department 

or agency shall furnish that information to MACPAC on an 

agreed upon schedule. 

‘‘(2) DATA COLLECTION.—In order to carry out its functions, 

MACPAC shall— 

‘‘(A) utilize existing information, both published and 

unpublished, where possible, collected and assessed either 

by its own staff or under other arrangements made in 

accordance with this section; 

‘‘(B) carry out, or award grants or contracts for, original 

research and experimentation, where existing information 

is inadequate; and 

‘‘(C) adopt procedures allowing any interested party 

to submit information for MACPAC’s use in making reports 

and recommendations. 

‘‘(3) ACCESS OF GAO TO INFORMATION.—The Comptroller 

General of the United States shall have unrestricted access 

to all deliberations, records, and nonproprietary data of 

MACPAC, immediately upon request. 

‘‘(4) PERIODIC AUDIT.—MACPAC shall be subject to periodic 

audit by the Comptroller General of the United States. 

‘‘(f) AUTHORIZATION OF APPROPRIATIONS.— 

‘‘(1) REQUEST FOR APPROPRIATIONS.—MACPAC shall submit 

requests for appropriations in the same manner as the Comptroller General of the United States submits requests for appropriations, but amounts appropriated for MACPAC shall be separate from amounts appropriated for the Comptroller General 

of the United States. 

‘‘(2) AUTHORIZATION.—There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this section.’’. 

(b) DEADLINE FOR INITIAL APPOINTMENTS.—Not later than 

January 1, 2010, the Comptroller General of the United States 

shall appoint the initial members of the Medicaid and CHIP Payment and Access Commission established under section 1900 of 

the Social Security Act (as added by subsection (a)). 

(c) ANNUAL REPORT ON MEDICAID.—Not later than January 

1, 2010, and annually thereafter, the Secretary, in consultation 

with the Secretary of the Treasury, the Secretary of Labor, and 

the States (as defined for purposes of Medicaid), shall submit an 

annual report to Congress on the financial status of, enrollment 

in, and spending trends for, Medicaid for the fiscal year ending 

on September 30 of the preceding year. 
H. R. 2—89 

TITLE VI—PROGRAM INTEGRITY AND 

OTHER MISCELLANEOUS PROVISIONS 

Subtitle A—Program Integrity and Data 

Collection 

SEC. 601. 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 301(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 302(b)), is amended by adding at the end 

the following: 

‘‘(iv) 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 Statespecific 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 new final rule (in this section referred to as 

the ‘‘new final rule’’) promulgated after the date of the enactment 

of this Act and 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 new final rule in effect for all States may only 

be inclusive of errors, as defined in such new final rule or in 

guidance issued within a reasonable time frame after the effective 

date for such new final rule that includes detailed guidance for 

the specific methodology for error determinations. 

(c) REQUIREMENTS FOR NEW FINAL RULE.—For purposes of 

subsection (b), the requirements of this subsection are that the 

new final rule implementing the PERM requirements shall— 

(1) include— 
H. R. 2—90 

(A) clearly defined criteria for errors for both States 

and providers; 

(B) a clearly defined process for appealing error determinations by— 

(i) review contractors; or 

(ii) the agency and personnel described in section 

431.974(a)(2) of title 42, Code of Federal Regulations, 

as in effect on September 1, 2007, responsible for the 

development, direction, implementation, and evaluation of eligibility reviews and associated activities; and 

(C) clearly defined responsibilities and deadlines for 

States in implementing any corrective action plans; and 

(2) provide that the payment error rate determined for 

a State shall not take into account payment errors resulting 

from the State’s verification of an applicant’s self-declaration 

or self-certification of eligibility for, and the correct amount 

of, medical assistance or child health assistance, if the State 

process for verifying an applicant’s self-declaration or self-certification satisfies the requirements for such process applicable 

under regulations promulgated by the Secretary or otherwise 

approved by the Secretary. 

(d) OPTION FOR APPLICATION OF DATA FOR STATES IN FIRST

APPLICATION CYCLE UNDER THE INTERIM FINAL RULE.—After the 

new 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 or under a 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 2010 or 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 new 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. 

(3) STATE OPTION TO APPLY MEQC DATA.—For purposes of 

satisfying the requirements of subpart Q of part 431 of title 

42, Code of Federal Regulations, relating to Medicaid eligibility 

reviews, a State may elect to substitute data obtained through 

MEQC reviews conducted in accordance with section 1903(u) 

of the Social Security Act (42 U.S.C. 1396b(u)) for data required 

for purposes of PERM requirements, but only if the State 
H. R. 2—91 

MEQC reviews are based on a broad, representative sample 

of Medicaid applicants or enrollees in the States. 

(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 the first fiscal 

year that begins on or after the date on which the new final 

rule is in effect for all States, 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. 

(g) TIME FOR PROMULGATION OF FINAL RULE.—The final rule 

implementing the PERM requirements under subsection (b) shall 

be promulgated not later than 6 months after the date of enactment 

of this Act. 

SEC. 602. 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 2009’’. 

(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 2009, 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 determine the child population growth factor under section 2104(m)(5)(B) and any other data necessary for carrying out this title. 

‘‘(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). 
H. R. 2—92 

‘‘(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 COMBINA- TION OF, ACS ESTIMATES UPON RECOMMENDATION OF THE SEC- RETARY 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, in consultation with the States, 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. 603. UPDATED FEDERAL EVALUATION OF CHIP. 

Section 2108(c) (42 U.S.C. 1397hh(c)) is amended by striking 

paragraph (5) and inserting the following: 

‘‘(5) SUBSEQUENT EVALUATION USING UPDATED INFORMA- TION.— ‘‘(A) IN GENERAL.—The Secretary, directly or through 

contracts or interagency agreements, shall conduct an independent subsequent evaluation of 10 States with approved 

child health plans. 

‘‘(B) SELECTION OF STATES AND MATTERS INCLUDED.— Paragraphs (2) and (3) shall apply to such subsequent 

evaluation in the same manner as such provisions apply 

to the evaluation conducted under paragraph (1). 

‘‘(C) SUBMISSION TO CONGRESS.—Not later than 

December 31, 2011, the Secretary shall submit to Congress 

the results of the evaluation conducted under this paragraph. 

‘‘(D) FUNDING.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there 

are appropriated $10,000,000 for fiscal year 2010 for the 

purpose of conducting the evaluation authorized under this 

paragraph. Amounts appropriated under this subparagraph 

shall remain available for expenditure through fiscal year 

2012.’’. 

SEC. 604. ACCESS TO RECORDS FOR IG AND GAO AUDITS AND EVALUATIONS. 

Section 2108(d) (42 U.S.C. 1397hh(d)) is amended to read as 

follows: 

‘‘(d) ACCESS TO RECORDS FOR IG AND GAO AUDITS AND EVALUATIONS.—For the purpose of evaluating and auditing the program 

established under this title, or title XIX, the Secretary, the Office 

of Inspector General, and the Comptroller General shall have access 
H. R. 2—93 

to any books, accounts, records, correspondence, and other documents that are related to the expenditure of Federal funds under 

this title and that are in the possession, custody, or control of 

States receiving Federal funds under this title or political subdivisions thereof, or any grantee or contractor of such States or political 

subdivisions.’’. 

SEC. 605. NO FEDERAL FUNDING FOR ILLEGAL ALIENS; DISALLOWANCE FOR UNAUTHORIZED EXPENDITURES. 

Nothing in this Act allows Federal payment for individuals 

who are not legal residents. Titles XI, XIX, and XXI of the Social 

Security Act provide for the disallowance of Federal financial 

participation for erroneous expenditures under Medicaid and under 

CHIP, respectively. 

Subtitle B—Miscellaneous Health 

Provisions 

SEC. 611. DEFICIT REDUCTION ACT TECHNICAL CORRECTIONS. 

(a) CLARIFICATION OF REQUIREMENT TO PROVIDE EPSDT SERV- ICES FOR ALL CHILDREN IN BENCHMARK BENEFIT PACKAGES UNDER

MEDICAID.—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— 

(1) in subparagraph (A)— 

(A) in the matter before clause (i)— 

(i) by striking ‘‘Notwithstanding any other provision of this title’’ and inserting ‘‘Notwithstanding section 1902(a)(1) (relating to statewideness), section 

1902(a)(10)(B) (relating to comparability) and any other 

provision of this title which would be directly contrary 

to the authority under this section and subject to subsection (E)’’; and 

(ii) by striking ‘‘enrollment in coverage that provides’’ and inserting ‘‘coverage that’’; 

(B) in clause (i), by inserting ‘‘provides’’ after ‘‘(i)’’; 

and 

(C) 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).’’; 

(2) in subparagraph (C)— 

(A) in the heading, by striking ‘‘WRAP-AROUND’’ and 

inserting ‘‘ADDITIONAL’’; and 

(B) by striking ‘‘wrap-around or’’; and 

(3) 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 
H. R. 2—94 

in subsection (b)(1) or benchmark equivalent coverage 

described in subsection (b)(2); 

‘‘(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); or 

‘‘(iii) affecting a child’s entitlement to care and 

services described in subsections (a)(4)(B) and (r) of 

section 1905 and provided in accordance with section 

1902(a)(43) whether provided through benchmark coverage, benchmark equivalent coverage, or otherwise.’’. 

(b) 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’’. 

(c) 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.—With respect to 

a State plan amendment to provide benchmark benefits in accordance with subsections (a) and (b) that is approved by the Secretary, 

the Secretary shall publish 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 the plan amendment and the 

reason for each such determination on the date such approval 

is made, and shall publish such list in the Federal Register and 

not later than 30 days after such date of approval.’’. 

(d) EFFECTIVE DATE.—The amendments made by subsections 

(a), (b), and (c) of this section shall take effect as if included 

in the amendment made by section 6044(a) of the Deficit Reduction 

Act of 2005. 

SEC. 612. REFERENCES TO TITLE XXI. 

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. 613. PROHIBITING INITIATION OF NEW HEALTH OPPORTUNITY 

ACCOUNT DEMONSTRATION PROGRAMS. 

After the date of the enactment of this Act, the Secretary 

of Health and Human Services may not approve any new demonstration programs under section 1938 of the Social Security Act 

(42 U.S.C. 1396u–8). 

SEC. 614. ADJUSTMENT IN COMPUTATION OF MEDICAID FMAP TO DISREGARD AN EXTRAORDINARY EMPLOYER PENSION CONTRIBUTION. 

(a) IN GENERAL.—Only for purposes of computing the FMAP 

(as defined in subsection (e)) for a State for a fiscal year (beginning 

with fiscal year 2006) and applying the FMAP under title XIX 

of the Social Security Act, any significantly disproportionate 
H. R. 2—95 

employer pension or insurance fund contribution described in subsection (b) shall be disregarded in computing the per capita income 

of such State, but shall not be disregarded in computing the per 

capita income for the continental United States (and Alaska) and 

Hawaii. 

(b) SIGNIFICANTLY DISPROPORTIONATE EMPLOYER PENSION AND

INSURANCE FUND CONTRIBUTION.— 

(1) IN GENERAL.—For purposes of this section, a significantly disproportionate employer pension and insurance fund 

contribution described in this subsection with respect to a State 

is any identifiable employer contribution towards pension or 

other employee insurance funds that is estimated to accrue 

to residents of such State for a calendar year (beginning with 

calendar year 2003) if the increase in the amount so estimated 

exceeds 25 percent of the total increase in personal income 

in that State for the year involved. 

(2) DATA TO BE USED.—For estimating and adjustment 

a FMAP already calculated as of the date of the enactment 

of this Act for a State with a significantly disproportionate 

employer pension and insurance fund contribution, the Secretary shall use the personal income data set originally used 

in calculating such FMAP. 

(3) SPECIAL ADJUSTMENT FOR NEGATIVE GROWTH.—If in any 

calendar year the total personal income growth in a State 

is negative, an employer pension and insurance fund contribution for the purposes of calculating the State’s FMAP for a 

calendar year shall not exceed 125 percent of the amount 

of such contribution for the previous calendar year for the 

State. 

(c) HOLD HARMLESS.—No State shall have its FMAP for a 

fiscal year reduced as a result of the application of this section. 

(d) REPORT.—Not later than May 15, 2009, the Secretary shall 

submit to the Congress a report on the problems presented by 

the current treatment of pension and insurance fund contributions 

in the use of Bureau of Economic Affairs calculations for the FMAP 

and for Medicaid and on possible alternative methodologies to mitigate such problems. 

(e) FMAP DEFINED.—For purposes of this section, the term 

‘‘FMAP’’ means the Federal medical assistance percentage, as 

defined in section 1905(b) of the Social Security Act (42 U.S.C. 

1396(d)). 

SEC. 615. CLARIFICATION TREATMENT OF REGIONAL MEDICAL 

CENTER. 

(a) IN GENERAL.—Nothing in section 1903(w) of the Social 

Security Act (42 U.S.C. 1396b(w)) shall be construed by the Secretary of Health and Human Services as prohibiting a State’s use 

of funds as the non-Federal share of expenditures under title XIX 

of such Act where such funds are transferred from or certified 

by a publicly-owned regional medical center located in another 

State and described in subsection (b), so long as the Secretary 

determines that such use of funds is proper and in the interest 

of the program under title XIX. 

(b) CENTER DESCRIBED.—A center described in this subsection 

is a publicly-owned regional medical center that— 

(1) provides level 1 trauma and burn care services; 

(2) provides level 3 neonatal care services; 
H. R. 2—96 

(3) is obligated to serve all patients, regardless of ability 

to pay; 

(4) is located within a Standard Metropolitan Statistical 

Area (SMSA) that includes at least 3 States; 

(5) provides services as a tertiary care provider for patients 

residing within a 125-mile radius; and 

(6) meets the criteria for a disproportionate share hospital 

under section 1923 of such Act (42 U.S.C. 1396r–4) in at least 

one State other than the State in which the center is located. 

SEC. 616. EXTENSION OF MEDICAID DSH ALLOTMENTS FOR TENNESSEE AND HAWAII. 

Section 1923(f)(6) (42 U.S.C. 1396r–4(f)(6)), as amended by 

section 202 of the Medicare Improvements for Patients and Providers Act of 2008 (Public Law 110–275) is amended— 

(1) in the paragraph heading, by striking ‘‘2009 AND THE

FIRST CALENDAR QUARTER OF FISCAL YEAR 2010’’ and inserting 

‘‘2011 AND THE FIRST CALENDAR QUARTER OF FISCAL YEAR 2012’’; 

(2) in subparagraph (A)— 

(A) in clause (i)— 

(i) in the second sentence— 

(I) by striking ‘‘and 2009’’ and inserting ‘‘, 

2009, 2010, and 2011’’; and 

(II) by striking ‘‘such portion of’’; and 

(ii) in the third sentence, by striking ‘‘2010 for 

the period ending on December 31, 2009’’ and inserting 

‘‘2012 for the period ending on December 31, 2011’’; 

(B) in clause (ii), by striking ‘‘or for a period in fiscal 

year 2010’’ and inserting ‘‘2010, 2011, or for period in 

fiscal year 2012’’; and 

(C) in clause (iv)— 

(i) in the clause heading, by striking ‘‘2009 AND

THE FIRST CALENDAR QUARTER OF FISCAL YEAR 2010’’ 

and inserting ‘‘2011 AND THE FIRST CALENDAR QUARTER

OF FISCAL YEAR 2012’’; and 

(ii) in each of subclauses (I) and (II), by striking 

‘‘ or for a period in fiscal year 2010’’ and inserting 

‘‘2010, 2011, or for a period in fiscal year 2012’’; and 

(3) in subparagraph (B)— 

(A) in clause (i)— 

(i) in the first sentence, by striking ‘‘2009’’ and 

inserting ‘‘2011’’; and 

(ii) in the second sentence, by striking ‘‘2010 for 

the period ending on December 31, 2009’’ and inserting 

‘‘2012 for the period ending on December 31, 2011’’. 

SEC. 617. GAO REPORT ON MEDICAID MANAGED CARE PAYMENT 

RATES. 

Not later than 18 months after the date of the enactment 

of this Act, the Comptroller General of the United States shall 

submit a report to the Committee on Finance of the Senate and 

the Committee on Energy and Commerce of the House of Representatives analyzing the extent to which State payment rates for medicaid managed care organizations under Medicaid are actuarially 

sound. 
H. R. 2—97 

Subtitle C—Other Provisions 

SEC. 621. OUTREACH REGARDING HEALTH INSURANCE OPTIONS 

AVAILABLE TO CHILDREN. 

(a) DEFINITIONS.—In this section— 

(1) the terms ‘‘Administration’’ and ‘‘Administrator’’ means 

the Small Business Administration and the Administrator 

thereof, respectively; 

(2) the term ‘‘certified development company’’ means a 

development company participating in the program under title 

V of the Small Business Investment Act of 1958 (15 U.S.C. 

695 et seq.); 

(3) the term ‘‘Medicaid program’’ means the program established under title XIX of the Social Security Act (42 U.S.C. 

1396 et seq.); 

(4) the term ‘‘Service Corps of Retired Executives’’ means 

the Service Corps of Retired Executives authorized by section 

8(b)(1) of the Small Business Act (15 U.S.C. 637(b)(1)); 

(5) the term ‘‘small business concern’’ has the meaning 

given that term in section 3 of the Small Business Act (15 

U.S.C. 632); 

(6) the term ‘‘small business development center’’ means 

a small business development center described in section 21 

of the Small Business Act (15 U.S.C. 648); 

(7) the term ‘‘State’’ has the meaning given that term 

for purposes of title XXI of the Social Security Act (42 U.S.C. 

1397aa et seq.); 

(8) the term ‘‘State Children’s Health Insurance Program’’ 

means the State Children’s Health Insurance Program established under title XXI of the Social Security Act (42 U.S.C. 

1397aa et seq.); 

(9) the term ‘‘task force’’ means the task force established 

under subsection (b)(1); and 

(10) the term ‘‘women’s business center’’ means a women’s 

business center described in section 29 of the Small Business 

Act (15 U.S.C. 656). 

(b) ESTABLISHMENT OF TASK FORCE.— 

(1) ESTABLISHMENT.—There is established a task force to 

conduct a nationwide campaign of education and outreach for 

small business concerns regarding the availability of coverage 

for children through private insurance options, the Medicaid 

program, and the State Children’s Health Insurance Program. 

(2) MEMBERSHIP.—The task force shall consist of the 

Administrator, the Secretary of Health and Human Services, 

the Secretary of Labor, and the Secretary of the Treasury. 

(3) RESPONSIBILITIES.—The campaign conducted under this 

subsection shall include— 

(A) efforts to educate the owners of small business 

concerns about the value of health coverage for children; 

(B) information regarding options available to the 

owners and employees of small business concerns to make 

insurance more affordable, including Federal and State 

tax deductions and credits for health care-related expenses 

and health insurance expenses and Federal tax exclusion 

for health insurance options available under employer- 
H. R. 2—98 

sponsored cafeteria plans under section 125 of the Internal 

Revenue Code of 1986; 

(C) efforts to educate the owners of small business 

concerns about assistance available through public programs; and 

(D) efforts to educate the owners and employees of 

small business concerns regarding the availability of the 

hotline operated as part of the Insure Kids Now program 

of the Department of Health and Human Services. 

(4) IMPLEMENTATION.—In carrying out this subsection, the 

task force may— 

(A) use any business partner of the Administration, 

including— 

(i) a small business development center; 

(ii) a certified development company; 

(iii) a women’s business center; and 

(iv) the Service Corps of Retired Executives; 

(B) enter into— 

(i) a memorandum of understanding with a 

chamber of commerce; and 

(ii) a partnership with any appropriate small business concern or health advocacy group; and 

(C) designate outreach programs at regional offices 

of the Department of Health and Human Services to work 

with district offices of the Administration. 

(5) WEBSITE.—The Administrator shall ensure that links 

to information on the eligibility and enrollment requirements 

for the Medicaid program and State Children’s Health Insurance Program of each State are prominently displayed on the 

website of the Administration. 

(6) REPORT.— 

(A) IN GENERAL.—Not later than 2 years after the 

date of enactment of this Act, and every 2 years thereafter, 

the Administrator shall submit to the Committee on Small 

Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives 

a report on the status of the nationwide campaign conducted under paragraph (1). 

(B) CONTENTS.—Each report submitted under subparagraph (A) shall include a status update on all efforts made 

to educate owners and employees of small business concerns on options for providing health insurance for children 

through public and private alternatives. 

SEC. 622. SENSE OF THE SENATE REGARDING ACCESS TO AFFORDABLE 

AND MEANINGFUL HEALTH INSURANCE COVERAGE. 

(a) FINDINGS.—The Senate finds the following: 

(1) There are approximately 45 million Americans currently 

without health insurance. 

(2) More than half of uninsured workers are employed 

by businesses with less than 25 employees or are self-employed. 

(3) Health insurance premiums continue to rise at more 

than twice the rate of inflation for all consumer goods. 

(4) Individuals in the small group and individual health 

insurance markets usually pay more for similar coverage than 

those in the large group market. 
H. R. 2—99 

(5) The rapid growth in health insurance costs over the 

last few years has forced many employers, particularly small 

employers, to increase deductibles and co-pays or to drop coverage completely. 

(b) SENSE OF THE SENATE.—The Senate— 

(1) recognizes the necessity to improve affordability and 

access to health insurance for all Americans; 

(2) acknowledges the value of building upon the existing 

private health insurance market; and 

(3) affirms its intent to enact legislation this year that, 

with appropriate protection for consumers, improves access to 

affordable and meaningful health insurance coverage for 

employees of small businesses and individuals by— 

(A) facilitating pooling mechanisms, including pooling 

across State lines, and 

(B) providing assistance to small businesses and 

individuals, including financial assistance and tax incentives, for the purchase of private insurance coverage. 

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 ‘‘$50.33 per thousand’’, 

(2) by striking ‘‘20.719 percent (18.063 percent on cigars 

removed during 2000 or 2001)’’ in paragraph (2) and inserting 

‘‘52.75 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 ‘‘40.26 cents 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 ‘‘$50.33 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 ‘‘$105.69 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 ‘‘3.15 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 ‘‘6.30 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 ‘‘$1.51’’, 

and 

(2) by striking ‘‘19.5 cents (17 cents on chewing tobacco 

removed during 2000 or 2001)’’ in paragraph (2) and inserting 

‘‘50.33 cents’’. 
H. R. 2—100 

(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 ‘‘$2.8311 cents’’. 

(g) ROLL-YOUR-OWN TOBACCO.—Section 5701(g) of such Code 

is amended by striking ‘‘$1.0969 cents (95.67 cents on roll-yourown tobacco removed during 2000 or 2001)’’ and inserting ‘‘$24.78’’. 

(h) FLOOR STOCKS TAXES.— 

(1) IMPOSITION OF TAX.—On tobacco products (other than 

cigars described in section 5701(a)(2) of the Internal Revenue 

Code of 1986) and cigarette papers and tubes manufactured 

in or imported into the United States which are removed before 

April 1, 2009, 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 such Code 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 April 1, 2009, 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 April 1, 2009, 

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 August 1, 2009. 

(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 April 1, 2009, 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. 
H. R. 2—101 

(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 March 31, 2009. 

SEC. 702. ADMINISTRATIVE IMPROVEMENTS. 

(a) PERMIT, INVENTORIES, REPORTS, AND RECORDS REQUIREMENTS FOR MANUFACTURERS AND IMPORTERS OF PROCESSED

TOBACCO.— 

(1) PERMIT.— 

(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, REPORTS, AND PACKAGES.— 

(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’’. 

(C) PACKAGES, MARKS, LABELS, AND NOTICES.—Section 

5723 of such Code is amended by inserting ‘‘, processed 

tobacco,’’ after ‘‘tobacco products’’ each place it appears. 

(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 AMENDMENTS.— 

(A) Section 5702(h) of such Code is amended by striking 

‘‘tobacco products and cigarette papers and tubes’’ and 

inserting ‘‘tobacco products or cigarette papers or tubes 

or any processed tobacco’’. 
H. R. 2—102 

(B) Sections 5702(j) and 5702(k) of such Code are each 

amended by inserting ‘‘, or any processed tobacco,’’ after 

‘‘tobacco products or cigarette papers or tubes’’. 

(6) EFFECTIVE DATE.—The amendments made by this subsection shall take effect on April 1, 2009. 

(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, processed tobacco, 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, processed tobacco, 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, processed tobacco, 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, processed tobacco, 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 
H. R. 2—103 

shall be suspended for such period as the Secretary deems 

proper or shall be revoked.’’. 

(3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect on the date of the enactment of this 

Act. 

(c) APPLICATION OF INTERNAL REVENUE CODE STATUTE OF

LIMITATIONS FOR ALCOHOL AND TOBACCO EXCISE TAXES.— 

(1) IN GENERAL.—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)’’. 

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to articles imported after the date of the 

enactment of this Act. 

(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 March 

31, 2009. 

(e) TIME OF TAX FOR UNLAWFULLY MANUFACTURED TOBACCO

PRODUCTS.— 

(1) IN GENERAL.—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 manufactured 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.’’. 

(2) EFFECTIVE DATE.—The amendment made by this subsection shall take effect on the date of the enactment of this 

Act. 

(f) DISCLOSURE.— 

(1) IN GENERAL.—Paragraph (1) of section 6103(o) of such 

Code is amended by designating the text as subparagraph 

(A), moving such text 2 ems to the right, striking ‘‘Returns’’ 

and inserting ‘‘(A) IN GENERAL.—Returns’’, and by inserting 

after subparagraph (A) (as so redesignated) the following new 

subparagraph: 

‘‘(B) USE IN CERTAIN PROCEEDINGS.—Returns and 

return information disclosed to a Federal agency under 

subparagraph (A) may be used in an action or proceeding 

(or in preparation for such action or proceeding) brought 

under section 625 of the American Jobs Creation Act of 

2004 for the collection of any unpaid assessment or penalty 

arising under such Act.’’. 

(2) CONFORMING AMENDMENT.—Section 6103(p)(4) of such 

Code is amended by striking ‘‘(o)(1)’’ both places it appears 

and inserting ‘‘(o)(1)(A)’’. 
H. R. 2—104 

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply on or after the date of the enactment of 

this Act. 

(g) TRANSITIONAL RULE.—Any person who— 

(1) on April 1, 2009 is engaged in business as a manufacturer of processed tobacco or as an importer of processed 

tobacco, and 

(2) before the end of the 90-day period beginning on such 

date, submits an application under subchapter B of chapter 

52 of such Code to engage in such business, may, notwithstanding such subchapter B, continue to engage in such business pending final action on such application. Pending such 

final action, all provisions of such chapter 52 shall apply to 

such applicant in the same manner and to the same extent 

as if such applicant were a holder of a permit under such 

chapter 52 to engage in such business. 

SEC. 703. TREASURY STUDY CONCERNING MAGNITUDE OF TOBACCO 

SMUGGLING IN THE UNITED STATES. 

Not later than one year after the date of the enactment of 

this Act, the Secretary of the Treasury shall conduct a study concerning the magnitude of tobacco smuggling in the United States 

and submit to Congress recommendations for the most effective 

steps to reduce tobacco smuggling. Such study shall also include 

a review of the loss of Federal tax receipts due to illicit tobacco 

trade in the United States and the role of imported tobacco products 

in the illicit tobacco trade in the United States. 

SEC. 704. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES. 

The percentage under subparagraph (C) of section 401(1) of 

the Tax Increase Prevention and Reconciliation Act of 2005 in 

effect on the date of the enactment of this Act is increased by 

0.5 percentage point. 

Speaker of the House of Representatives. 

Vice President of the United States and

President of the Senate.