I 
115TH CONGRESS 
1ST SESSION H. R. 2404 
To amend titles XVIII and XIX of the Social Security Act to make improve-
ments to the treatment of the United States territories under the Medi-
care and Medicaid programs, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 8, 2017 
Ms. PLASKETT (for herself, Ms. BORDALLO, Mrs. RADEWAGEN, Mr. SERRANO, 
and Ms. VELA´ZQUEZ) introduced the following bill; which was referred to 
the Committee on Energy and Commerce, and in addition to the Com-
mittee on Ways and Means, for a period to be subsequently determined 
by the Speaker, in each case for consideration of such provisions as fall 
within the jurisdiction of the committee concerned 
A BILL 
To amend titles XVIII and XIX of the Social Security Act 
to make improvements to the treatment of the United 
States territories under the Medicare and Medicaid pro-
grams, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Improving the Treatment of the U.S. Territories Under 
Federal Health Programs Act of 2017’’. 
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(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—MEDICAID 
Sec. 101. Elimination of general Medicaid funding limitations (‘‘cap’’) for terri-
tories. 
Sec. 102. Elimination of specific Federal medical assistance percentage 
(FMAP) limitation for territories. 
Sec. 103. Application of Medicaid waiver authority to all of the territories. 
Sec. 104. Permitting Medicaid DSH allotments for territories. 
TITLE II—MEDICARE 
Subtitle A—Part A 
Sec. 201. Calculation of Medicare DSH payments for IPPS hospitals in Puerto 
Rico. 
Sec. 202. Rebasing target amount for hospitals in territories. 
Sec. 203. Medicare DSH target adjustment for hospitals in territories. 
Subtitle B—Part B 
Sec. 211. Application of part B deemed enrollment process to residents of 
Puerto Rico; special enrollment period and limit on late enroll-
ment penalties. 
Subtitle C—Medicare Advantage (Part C) 
Sec. 221. Adjustment in benchmark for low-base payment counties in Puerto 
Rico. 
Subtitle D—Part D 
Sec. 231. Improved use of allocated prescription drug funds by territories. 
Sec. 232. Report on treatment of territories under Medicare part D. 
TITLE III—MISCELLANEOUS 
Sec. 301. Modified treatment of territories with respect to application of ACA 
annual health insurance provider fees. 
Sec. 302. Medicaid and CHIP territory transparency and information. 
Sec. 303. Report on exclusion of territories from Exchanges. 
TITLE I—MEDICAID 
SEC. 101. ELIMINATION OF GENERAL MEDICAID FUNDING 
LIMITATIONS (‘‘CAP’’) FOR TERRITORIES. 
(a) IN GENERAL.—Section 1108 of the Social Secu-
rity Act (42 U.S.C. 1308) is amended— 
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(1) in subsection (f), in the matter before para-
graph (1), by striking ‘‘subsection (g)’’ and inserting 
‘‘subsections (g) and (h)’’; 
(2) in subsection (g)(2), in the matter before 
subparagraph (A), by inserting ‘‘and subsection (h)’’ 
after ‘‘paragraphs (3) and (5)’’; and 
(3) by adding at the end the following new sub-
section: 
‘‘(h) SUNSET OF MEDICAID FUNDING LIMITATIONS 
FOR PUERTO RICO, THE VIRGIN ISLANDS
OF
THE 
UNITED STATES, GUAM, THE NORTHERN MARIANA IS-
LANDS, AND AMERICAN SAMOA.—Subsections (f) and (g) 
shall not apply to Puerto Rico, the Virgin Islands of the 
United States, Guam, the Northern Mariana Islands, and 
American Samoa beginning with fiscal year 2019.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1902(j) of the Social Security Act 
(42 U.S.C. 1396a(j)) is amended by striking ‘‘, the 
limitation in section 1108(f),’’. 
(2) Section 1903(u) of the Social Security Act 
(42 U.S.C. 1396b(u)) is amended by striking para-
graph (4). 
(3) Section 1323(c)(1) of the Patient Protection 
and Affordable Care Act (42 U.S.C. 18043(c)(1)) is 
amended by striking ‘‘2019’’ and inserting ‘‘2018’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply beginning with fiscal year 2019. 
SEC. 102. ELIMINATION OF SPECIFIC FEDERAL MEDICAL 
ASSISTANCE PERCENTAGE (FMAP) LIMITA-
TION FOR TERRITORIES. 
Section 1905(b) of the Social Security Act (42 U.S.C. 
1396d(b)) is amended, in clause (2), by inserting ‘‘for fis-
cal years before fiscal year 2019’’ after ‘‘American 
Samoa’’. 
SEC. 103. APPLICATION OF MEDICAID WAIVER AUTHORITY 
TO ALL OF THE TERRITORIES. 
(a) IN GENERAL.—Section 1902(j) of the Social Se-
curity Act (42 U.S.C. 1396a(j)) is amended— 
(1) by striking ‘‘American Samoa and the 
Northern Mariana Islands’’ and inserting ‘‘Puerto 
Rico, the Virgin Islands of the United States, Guam, 
the Northern Mariana Islands, and American 
Samoa’’; 
(2) by striking ‘‘American Samoa or the North-
ern Mariana Islands’’ and inserting ‘‘Puerto Rico, 
the Virgin Islands of the United States, Guam, the 
Northern Mariana Islands, or American Samoa’’; 
(3) by inserting ‘‘(1)’’ after ‘‘(j)’’; 
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(4) by inserting ‘‘except as otherwise provided 
in this subsection,’’ after ‘‘Notwithstanding any 
other requirement of this title’’; and 
(5) by adding at the end the following: 
‘‘(2) The Secretary may not waive under this sub-
section the requirement of subsection (a)(10)(A)(i)(IX) 
(relating to coverage of adults formerly under foster care) 
with respect to any territory.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply beginning October 1, 2018. 
SEC. 104. PERMITTING MEDICAID DSH ALLOTMENTS FOR 
TERRITORIES. 
Section 1923(f) of the Social Security Act (42 U.S.C. 
1396) is amended— 
(1) in paragraph (6), by adding at the end the 
following new subparagraph: 
‘‘(C) TERRITORIES.— 
‘‘(i) FISCAL
YEAR
2019.—For fiscal 
year 2019, the DSH allotment for Puerto 
Rico, the Virgin Islands of the United 
States, Guam, the Northern Mariana Is-
lands, and American Samoa shall bear the 
same ratio to $150,000,000 as the ratio of 
the number of individuals who are low-in-
come or uninsured and residing in such re-
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spective territory (as estimated from time 
to time by the Secretary) bears to the 
sums of the number of such individuals re-
siding in all of the territories. 
‘‘(ii) SUBSEQUENT
FISCAL
YEAR.— 
For each subsequent fiscal year, the DSH 
allotment for each such territory is subject 
to an increase in accordance with para-
graph (2).’’; and 
(2) in paragraph (9), by inserting before the pe-
riod at the end the following: ‘‘, and includes, begin-
ning with fiscal year 2019, Puerto Rico, the Virgin 
Islands of the United States, Guam, the Northern 
Mariana Islands, and American Samoa’’. 
TITLE II—MEDICARE 
Subtitle A—Part A 
SEC. 201. CALCULATION OF MEDICARE DSH PAYMENTS FOR 
IPPS HOSPITALS IN PUERTO RICO. 
Section 1886(d)(9)(D)(iii) of the Social Security Act 
(42 U.S.C. 1395ww(d)(9)(D)(iii)) is amended to read as 
follows: 
‘‘(iii) Subparagraph (F) (relating to dispropor-
tionate share payments), including application of 
subsection (r), except that for this purpose— 
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‘‘(I) the sum described in clause (ii) of this 
subparagraph shall be substituted for the sum 
referred to in paragraph (5)(F)(ii)(I); and 
‘‘(II) for discharges occurring on or after 
October 1, 2017, subclause (I) of paragraph 
(5)(F)(vi) shall be applied by substituting for 
the numerator described in such subclause the 
number of subsection (d) Puerto Rico hospital’s 
patient days for the cost reporting period in-
volved which were made up of patients who (for 
such days) were entitled to benefits under part 
A of this title and were— 
‘‘(aa) entitled to supplementary secu-
rity income benefits (excluding any State 
supplementation) under title XVI of this 
Act; 
‘‘(bb) eligible for medical assistance 
under a State plan under title XIX; or 
‘‘(cc) receiving aid or assistance under 
any plan of the State approved under title 
I, X, XIV, or XVI.’’. 
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SEC. 202. REBASING TARGET AMOUNT FOR HOSPITALS IN 
TERRITORIES. 
Section 1886(b)(3) of the Social Security Act (42 
U.S.C. 1395ww(b)(3)) is amended by adding at the end 
the following new subparagraph: 
‘‘(M)(i) For each cost reporting period be-
ginning on or after October 1, 2017, in the case 
of a hospital located in a territory of the United 
States, there shall be substituted for the target 
amount otherwise determined under subpara-
graph (A) the rebased target amount (as de-
fined in clause (ii)), if such substitution results 
in an amount of payment under this section to 
the hospital for such period that is greater than 
the amount of payment that would be made 
under this section to the hospital for such pe-
riod if this subparagraph were not to apply. 
‘‘(ii) For purposes of this subparagraph, 
the term ‘rebased target amount’ has the mean-
ing given the term ‘target amount’ in subpara-
graph (A), except that— 
‘‘(I) there shall be substituted for the 
base cost reporting period the 12-month 
cost reporting period beginning during fis-
cal year 2015; 
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‘‘(II) any reference in subparagraph 
(A)(i) to the ‘first such cost reporting pe-
riod’ is deemed a reference to the first cost 
reporting period beginning on or after Oc-
tober 1, 2017; and 
‘‘(III) the applicable percentage in-
crease shall only be applied under subpara-
graph (B)(ii) for cost reporting periods be-
ginning on or after October 1, 2017. 
‘‘(iii) Nothing in this subparagraph shall 
affect any rebasing request by a hospital for 
any cost reporting period beginning during a 
fiscal year before fiscal year 2015.’’. 
SEC. 203. MEDICARE DSH TARGET ADJUSTMENT FOR HOS-
PITALS IN TERRITORIES. 
Section 1886(b)(3) of the Social Security Act (42 
U.S.C. 1395ww(b)(3)), as amended by section 202, is fur-
ther amended by adding at the end the following new sub-
paragraph: 
‘‘(N)(i) For each cost reporting period be-
ginning on or after October 1, 2017, in the case 
of a hospital that is located in a territory of the 
United States other than Puerto Rico and that 
would be a subsection (d) hospital if it were lo-
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cated in one of the 50 States, the target 
amount shall be increased by— 
‘‘(I) in the case that such hospital has 
a disproportionate patient percentage of 
not less than 15 percent and not greater 
than 40 percent, 10 percent; and 
‘‘(II) in the case that such hospital 
has a disproportionate patient percentage 
of greater than 40 percent, 10 percent plus 
60 percent of the number of percentage 
points by which such hospital’s dispropor-
tionate patient percentage exceeds 40 per-
cent. 
‘‘(ii) For purposes of this subparagraph, 
the term ‘disproportionate patient percentage’ 
has the meaning given such term in subsection 
(d)(5)(F)(vi), except that in applying such 
meaning any reference under such subsection to 
individuals entitled to supplementary security 
income under title XVI shall be deemed for pur-
poses of this subparagraph to include individ-
uals— 
‘‘(I) eligible for medical assistance 
under a State plan under title XIX; or 
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‘‘(II) receiving aid or assistance under 
any plan of the territory approved under 
title I, X, XIV, or XVI.’’. 
Subtitle B—Part B 
SEC. 211. APPLICATION OF PART B DEEMED ENROLLMENT 
PROCESS TO RESIDENTS OF PUERTO RICO; 
SPECIAL ENROLLMENT PERIOD AND LIMIT 
ON LATE ENROLLMENT PENALTIES. 
(a) APPLICATION OF PART B DEEMED ENROLLMENT 
PROCESS
TO RESIDENTS
OF PUERTO RICO.—Section 
1837(f)(3) of the Social Security Act (42 U.S.C. 
1395p(f)(3)) is amended by striking ‘‘, exclusive of Puerto 
Rico’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to individuals whose initial en-
rollment period under section 1837(d) of the Social Secu-
rity Act begins on or after the first day of the effective 
month, specified by the Secretary of Health and Human 
Services under section 1839(j)(1)(C) of such Act, as added 
by subsection (c)(2). 
(c) TRANSITION PROVIDING SPECIAL ENROLLMENT 
PERIOD AND LIMIT ON LATE ENROLLMENT PENALTIES 
FOR CERTAIN MEDICARE BENEFICIARIES.—Section 1839 
of the Social Security Act (42 U.S.C. 1395r) is amend-
ed— 
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(1) in the first sentence of subsection (b), by in-
serting ‘‘subject to section 1839(j)(2),’’ after ‘‘sub-
section (i)(4) or (l) of section 1837,’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(j) SPECIAL RULES FOR CERTAIN RESIDENTS OF 
PUERTO RICO.— 
‘‘(1) SPECIAL ENROLLMENT PERIOD, COVERAGE 
PERIOD FOR RESIDENTS WHO ARE ELIGIBLE BUT 
NOT ENROLLED.— 
‘‘(A) IN GENERAL.—In the case of a tran-
sition individual (as defined in paragraph (3)) 
who is not enrolled under this part as of the 
day before the first day of the effective month 
(as defined in subparagraph (C)), the Secretary 
shall provide for a special enrollment period 
under section 1837 of 7 months beginning with 
such effective month during which the indi-
vidual may be enrolled under this part. 
‘‘(B) COVERAGE PERIOD.—In the case of 
such an individual who enrolls during such spe-
cial enrollment period, the coverage period 
under section 1838 shall begin on the first day 
of the second month after the month in which 
the individual enrolls. 
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‘‘(C) EFFECTIVE
MONTH
DEFINED.—In 
this section, the term ‘effective month’ means a 
month, not earlier than October 2018 and not 
later than January 2019, specified by the Sec-
retary. 
‘‘(2) REDUCTION IN LATE ENROLLMENT PEN-
ALTIES
FOR
CURRENT
ENROLLEES
AND
INDIVID-
UALS ENROLLING DURING TRANSITION.— 
‘‘(A) IN GENERAL.—In the case of a tran-
sition individual who is enrolled under this part 
as of the day before the first day of the effec-
tive month or who enrolls under this part on or 
after the date of the enactment of this sub-
section but before the end of the special enroll-
ment period under paragraph (1)(A), the 
amount of the late enrollment penalty imposed 
under section 1839(b) shall be recalculated by 
reducing the penalty to 15 percent of the pen-
alty otherwise established. 
‘‘(B) APPLICATION.—Subparagraph (A) 
shall be applied in the case of a transition indi-
vidual who— 
‘‘(i) is enrolled under this part as of 
the month before the effective month, for 
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premiums for months beginning with such 
effective month; or 
‘‘(ii) enrolls under this part on or 
after the date of the enactment of this Act 
and before the end of the special enroll-
ment period under paragraph (1)(A), for 
premiums for months during the coverage 
period under this part which occur during 
or after the effective month. 
‘‘(C) LOSS OF REDUCTION IF INDIVIDUAL 
TERMINATES
ENROLLMENT.—Subparagraph 
(A) shall not apply to a transition individual if 
the individual terminates enrollment under this 
part after the end of the special enrollment pe-
riod under paragraph (1). 
‘‘(3) TRANSITION
INDIVIDUAL
DEFINED.—In 
this section, the term ‘transition individual’ means 
an individual who resides in Puerto Rico and who 
would have been deemed enrolled under this part 
pursuant to section 1837(f) before the first day of 
the effective month but for the fact that the indi-
vidual was a resident of Puerto Rico, regardless of 
whether the individual is enrolled under this part as 
of such first day.’’. 
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