(c) CONFORMING AMENDMENT.—Section 1903(f)(4) 
(42 U.S.C. 1396b(f)(4)) is amended in the matter pre-
ceding 
subparagraph 
(A) 
by 
inserting 
‘‘1902(a)(10)(A)(ii)(XIX),’’ 
after 
‘‘1902(a)(10)(A)(ii)(XVIII),’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to medical assistance for items and 
services furnished on or after January 1, 2004. 
SEC. 313. TREATMENT OF INPATIENT PSYCHIATRIC HOS-
PITAL SERVICES FOR INDIVIDUALS UNDER 
AGE 21 IN HOME OR COMMUNITY-BASED 
SERVICES WAIVERS. 
(a) IN
GENERAL.—Section 1915(c) (42 U.S.C. 
1396n(c)) is amended—
(1) in paragraph (1)—
(A) in the first sentence, by inserting ‘‘, or 
inpatient psychiatric hospital services for indi-
viduals under age 21,’’ after ‘‘intermediate care 
facility for the mentally retarded’’; and 
(B) in the second sentence, by inserting ‘‘, 
or inpatient psychiatric hospital services for in-
dividuals under age 21’’ before the period; 
(2) in paragraph (2)(B), by striking ‘‘or serv-
ices in an intermediate care facility for the mentally 
retarded’’ each place it appears and inserting ‘‘,
services in an intermediate care facility for the men-
tally retarded, or inpatient psychiatric hospital serv-
ices for individuals under age 21’’; 
(3) by striking paragraph (2)(C) and inserting 
the following: 
‘‘(C) such individuals who are determined to be 
likely to require the level of care provided in a hos-
pital, nursing facility, or intermediate care facility 
for the mentally retarded, or inpatient psychiatric 
hospital services for individuals under age 21, are 
informed of the feasible alternatives, if available 
under the waiver, at the choice of such individuals, 
to the provision of inpatient hospital services, nurs-
ing facility services, services in an intermediate care 
facility for the mentally retarded, or inpatient psy-
chiatric hospital services for individuals under age 
21;’’; and 
(4) in paragraph (7)(A)—
(A) by inserting ‘‘, or inpatient psychiatric 
hospital services for individuals under age 21,’’ 
after ‘‘intermediate care facility for the men-
tally retarded’’; and 
(B) by inserting ‘‘, or who would require 
inpatient psychiatric hospital services for indi-
viduals under age 21’’ before the period.
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) apply with respect to medical assistance 
provided on or after January 1, 2003. 
SEC. 314. DEMONSTRATION OF COVERAGE UNDER THE 
MEDICAID PROGRAM OF CHILDREN WITH PO-
TENTIALLY SEVERE DISABILITIES. 
(a) STATE APPLICATION.—A State may apply to the 
Secretary of Health and Human Services (in this section 
referred to as the ‘‘Secretary’’) for approval of a dem-
onstration project (in this section referred to as a ‘‘dem-
onstration project’’) under which up to a specified max-
imum number of children with a potentially severe dis-
ability (as defined in subsection (b)) are provided medical 
assistance under the State medicaid plan under title XIX 
of the Social Security Act (42 U.S.C. 1396 et seq.). 
(b) CHILD WITH
A POTENTIALLY SEVERE DIS-
ABILITY DEFINED.—
(1) IN
GENERAL.—In this section, the term 
‘‘child with a potentially severe disability’’ means, 
with respect to a demonstration project, an indi-
vidual who—
(A) has not attained 21 years of age; 
(B) has a physical or mental condition, 
disease, disorder (including a congenital birth 
defect or a metabolic condition), injury, or de-
velopmental disability that was incurred before 
the individual attained such age; and 
(C) is reasonably expected, but for the re-
ceipt of medical assistance under the State 
medicaid plan, to reach the level of disability 
defined under section 1614(a)(3) of the Social 
Security Act (42 U.S.C. 1382c(a)(3)), (deter-
mined without regard to the reference to age in 
subparagraph (C) of that section). 
(2) EXCEPTION.—Such term does not include 
an individual who would be considered disabled 
under section 1614(a)(3)(C) of the Social Security 
Act (42 U.S.C. 1382c(a)(3)(C)) (determined without 
regard to the reference to age in that section). 
(c) APPROVAL OF DEMONSTRATION PROJECTS.—
(1) IN GENERAL.—Subject to paragraph (3), 
the Secretary shall approve applications under sub-
section (a) that meet the requirements of paragraph 
(2) and such additional terms and conditions as the 
Secretary may require. The Secretary may waive the 
requirement of section 1902(a)(1) of the Social Se-
curity Act (42 U.S.C. 1396a(a)(1)) to allow for sub-
State demonstrations. 
(2) TERMS AND CONDITIONS OF DEMONSTRA-
TION PROJECTS.—The Secretary may not approve a
demonstration project under this section unless the 
State provides assurances satisfactory to the Sec-
retary that the following conditions are or will be 
met: 
(A) 
INDEPENDENT
EVALUATION.—The 
State provides for an independent evaluation of 
the project to be conducted during fiscal year 
2006. 
(B) CONSULTATION
FOR
DEVELOPMENT 
OF CRITERIA.—The State consults with appro-
priate pediatric health professionals in estab-
lishing the criteria for determining whether a 
child has a potentially severe disability. 
(C) ANNUAL REPORT.—The State submits 
an annual report to the Secretary (in a uniform 
form and manner established by the Secretary) 
on the use of funds provided under the grant 
that includes the following: 
(i) Enrollment and financial statistics 
on—
(I) the total number of children 
with a potentially severe disability en-
rolled in the demonstration project, 
disaggregated by disability;
(II) the services provided by cat-
egory or code and the cost of each 
service so categorized or coded; and 
(III) the number of children en-
rolled in the demonstration project 
who also receive services through pri-
vate insurance. 
(ii) With respect to the report sub-
mitted for fiscal year 2006, the results of 
the 
independent 
evaluation 
conducted 
under subparagraph (A). 
(iii) Such additional information as 
the Secretary may require. 
(3) LIMITATIONS ON FEDERAL FUNDING.—
(A) APPROPRIATION.—
(i) IN GENERAL.—Out of any funds in 
the Treasury not otherwise appropriated, 
there is appropriated to carry out this sec-
tion—
(I) $16,666,000 for each of fiscal 
years 2002 and 2003; and 
(II) $16,667,000 for each of fis-
cal years 2004 through 2007. 
(ii) BUDGET AUTHORITY.—Clause (i) 
constitutes budget authority in advance of
appropriations Acts and represents the ob-
ligation of the Federal Government to pro-
vide for the payment of the amounts ap-
propriated under clause (i). 
(B) LIMITATION
ON
PAYMENTS.—In no 
case may—
(i) the aggregate amount of payments 
made by the Secretary to States under this 
section exceed $100,000,000; 
(ii) the aggregate amount of payments 
made by the Secretary to States for ad-
ministrative expenses relating to the eval-
uations and annual reports required under 
subparagraphs (A) and (C) of paragraph 
(2) 
exceed 
$2,000,000 
of 
such 
$100,000,000; or 
(iii) payments be provided by the Sec-
retary for a fiscal year after fiscal year 
2010. 
(C) FUNDS ALLOCATED TO STATES.—
(i) IN GENERAL.—The Secretary shall 
allocate funds to States based on their ap-
plications and the availability of funds. In 
making such allocations, the Secretary 
shall ensure an equitable distribution of
funds among States with large populations 
and States with small populations. 
(ii) AVAILABILITY.—Funds allocated 
to a State under a grant made under this 
section for a fiscal year shall remain avail-
able until expended. 
(D) FUNDS NOT ALLOCATED TO STATES.—
Funds not allocated to States in the fiscal year 
for which they are appropriated shall remain 
available in succeeding fiscal years for alloca-
tion by the Secretary using the allocation for-
mula established under this section. 
(E) PAYMENTS
TO
STATES.—The Sec-
retary shall pay to each State with a dem-
onstration project approved under this section, 
from its allocation under subparagraph (C), an 
amount for each quarter equal to the Federal 
medical assistance percentage (as defined in 
section 1905(b) of the Social Security Act (42 
U.S.C. 1395d(b))) of expenditures in the quar-
ter for medical assistance provided to children 
with a potentially severe disability. 
(d) RECOMMENDATION.—Not later than October 1, 
2005, the Secretary shall submit a recommendation to the 
Committee on Commerce of the House of Representatives
and the Committee on Finance of the Senate regarding 
whether the demonstration project established under this 
section should be continued after fiscal year 2007. 
(e) STATE DEFINED.—In this section, the term 
‘‘State’’ has the meaning given such term for purposes of 
title XIX of the Social Security Act (42 U.S.C. 1396 et 
seq.). 
SEC. 315. DEVELOPMENT AND SUPPORT OF FAMILY-TO-
FAMILY HEALTH INFORMATION CENTERS. 
Section 501 (42 U.S.C. 701) is amended by adding 
at the end the following new subsection: 
‘‘(c)(1) In addition to amounts appropriated under 
subsection (a) and retained under section 502(a)(1) for 
the purpose of carrying out activities described in sub-
section (a)(2), there is appropriated to the Secretary, out 
of any money in the Treasury not otherwise appropriated, 
for the purpose of enabling the Secretary (through grants, 
contracts, or otherwise) to provide for special projects of 
regional and national significance for the development and 
support of family-to-family health information centers de-
scribed in paragraph (2), $10,000,000 for each of fiscal 
years 2002 through 2007. Funds appropriated under this 
paragraph shall remain available until expended. 
‘‘(2) The family-to-family health information centers 
described in this paragraph are centers that—
‘‘(A) assist families of children with disabilities 
or special health care needs to make informed 
choices about health care in order to promote good 
treatment decisions, cost-effectiveness, and improved 
health outcomes for such children; 
‘‘(B) provide information regarding the health 
care needs of, and resources available for, children 
with disabilities or special health care needs; 
‘‘(C) identify successful health delivery models 
for such children; 
‘‘(D) develop with representatives of health care 
providers, managed care organizations, health care 
purchasers, and appropriate State agencies a model 
for collaboration between families of such children 
and health professionals; 
‘‘(E) provide training and guidance regarding 
caring for such children; 
‘‘(F) conduct outreach activities to the families 
of such children, health professionals, schools, and 
other appropriate entities and individuals; and 
‘‘(G) are staffed by families of children with 
disabilities or special health care needs who have ex-
pertise in Federal and State public and private 
health care systems and health professionals.
‘‘(3) The provisions of this title that are applicable 
to the funds made available to the Secretary under section 
502(a)(1) apply in the same manner to funds made avail-
able to the Secretary under paragraph (1).’’. 
SEC. 316. RESTORATION OF MEDICAID ELIGIBILITY FOR 
CERTAIN SSI BENEFICIARIES. 
(a) IN GENERAL.—Section 1902(a)(10)(A)(i)(II) (42 
U.S.C. 1396a(a)(10)(A)(i)(II)) is amended—
(1) by inserting ‘‘(aa)’’ after ‘‘(II)’’; 
(2) by striking ‘‘or who are’’ and inserting ‘‘, 
(bb) who are’’; and 
(3) by inserting before the comma at the end 
the following: ‘‘, or (cc) who are under 21 years of 
age and with respect to whom supplemental security 
income benefits would be paid under title XVI if 
subparagraphs (A) and (B) of section 1611(c)(7) 
were applied without regard to the phrase ‘the first 
day of the month following’ ’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to medical assistance for items 
and services furnished on or after the first day of the first 
calendar quarter that begins after the date of enactment 
of this Act.
TITLE 
IV—FACILITATING 
PRO-
GRAM ADMINISTRATION AND 
PRESERVING COVERAGE 
SEC. 401. ALLOWING UNIFORM COVERAGE OF ALL LOW IN-
COME AMERICANS. 
(a) IN GENERAL.—Section 1902(a)(10)(A)(ii) of the 
Social Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is 
amended—
(1) by striking ‘‘or’’ at the end of subclause 
(XVII); 
(2) by adding ‘‘or’’ at the end of subclause 
(XVIII); and 
(3) by adding at the end the following new sub-
clause: 
‘‘(XIX) any individual age 21 
through 64 whose family income does 
not exceed 200 percent of the income 
official poverty line (as defined by the 
Office of Management and Budget, 
and revised annually in accordance 
with section 673(2) of the Omnibus 
Budget Reconciliation Act of 1981) 
applicable to a family of the size in-
volved;’’. 
(b) CONFORMING AMENDMENTS.—
(1) Section 1905(a) of such Act (42 U.S.C. 
1396d(a)) is amended, in the matter before para-
graph (1)—
(A) by striking ‘‘or’’ at the end of clause 
(xii); 
(B) by adding ‘‘or’’ at the end of clause 
(xiii); and 
(C) by inserting after clause (xiii) the fol-
lowing new clause: 
‘‘(xii) 
individuals 
described 
in 
section 
1902(a)(10)(A)(ii)(XIX),’’. 
(2) Section 1903(f)(4) of such Act (42 U.S.C. 
1396b(f)(4)) 
is 
amended 
by 
inserting 
‘‘1902(a)(10)(A)(ii)(XIX),’’ 
after 
‘‘1902(a)(10)(A)(ii)(XVIII),’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on October 1, 2003. 
SEC. 402. FACILITATING COVERAGE OF FAMILIES. 
(a) IN GENERAL.—Section 1905(b) of the Social Se-
curity Act (42 U.S.C. 1396d(b)), as amended by sections 
101(a), 303(a), and 304(a), is amended—
(1) by striking ‘‘and’’ before ‘‘(7)’’; and 
(2) by inserting before the period the following: 
‘‘, and (8) the Federal medical assistance percentage 
shall be equal to the enhanced FMAP described in
section 2105(b) with respect to medical assistance 
provided for individuals who are covered under sec-
tion 1925 or section 1931 by virtue of being a par-
ent or other caretaker relative (as defined for pur-
poses of such section) of a child and whose income 
does not exceed the percentage of the income official 
poverty line applicable under section 1902(l)(2)(C) 
to children who are eligible for medical assistance 
under section 1902(l)(1)(D)’’. 
(b) CONSTRUCTION.—Nothing in section 1905(b)(8) 
of the Social Security Act, as added by subsection (a)(2), 
shall be construed as preventing a State from providing 
medicaid benefits for individuals whose income exceeds 
100 percent of the Federal poverty line at the regular 
FMAP. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to medical assistance for items and 
services furnished on or after July 1, 2003. 
SEC. 403. ASSISTANCE WITH COVERAGE OF LEGAL IMMI-
GRANTS UNDER THE MEDICAID PROGRAM 
AND SCHIP. 
(a) MEDICAID PROGRAM.—Section 1903(v) of the 
Social Security Act (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, for aliens who are lawfully re-
siding in the United States (including battered aliens de-
scribed in section 431(c) of such Act) and who are other-
wise eligible for such assistance, within either or both of 
the following eligibility categories: 
‘‘(i) PREGNANT WOMEN.—Women during preg-
nancy (and during the 60-day period beginning on 
the last day of the pregnancy). 
‘‘(ii) CHILDREN.—Children (as defined under 
such plan), 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 subpara-
graph (A), no debt shall accrue under an affidavit of sup-
port 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 unreim-
bursed cost.’’.
(b) SCHIP.—Section 2107(e)(1) of such Act (42 
U.S.C. 1397gg(e)(1)) is amended by redesignating sub-
paragraphs (C) and (D) as subparagraph (D) and (E), 
respectively, and by inserting after subparagraph (B) the 
following new subparagraph: 
‘‘(C) Section 1903(v)(4) (relating to op-
tional coverage of categories of permanent resi-
dent alien children), but only if the State has 
elected to apply such section to the category of 
children under title XIX.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section take effect on October 1, 2003, and apply to 
medical assistance and child health assistance furnished 
on or after such date. 
SEC. 404. FLEXIBILITY IN ELIGIBILITY DETERMINATIONS. 
(a) IN GENERAL.—Section 1902(e) of the Social Se-
curity Act (42 U.S.C. 1396a(e)) is amended by adding at 
the end the following: 
‘‘(13)(A) Subject to the requirements of this para-
graph, at the option of the State, the plan may provide 
that financial eligibility requirements for medical assist-
ance are met for an individual under 19 years of age (or 
such higher age as determined by the State) by using a 
determination (made within a reasonable period, as found 
by the State, before its use for this purpose) of the individ-
ual’s family or household income and resources, notwith-
standing any differences in budget unit, disregards, deem-
ing, or other methodology, by a Federal or State agency 
(or a public or private entity making such determination 
on behalf of such agency) specified by the plan, provided 
that such agency has fiscal liabilities or responsibilities af-
fected or potentially affected by such determinations, pro-
vided that all information furnished by such agency pursu-
ant to this subparagraph is used solely for purposes of 
determining eligibility for medical assistance under the 
State plan approved under this title or for child health 
assistance under a State plan approved under title XXI. 
‘‘(B) Any State electing the option under subpara-
graph (A) shall—
‘‘(i) ensure that if an individual is determined 
under such subparagraph to be not eligible for med-
ical assistance under the State plan approved under 
this title or for child health assistance under a State 
plan under title XXI, the State must subsequently 
determine if such individual is eligible for such as-
sistance using the methodology that would otherwise 
be applicable in determining eligibility for such an 
individual; and 
‘‘(ii) ensure that any information furnished by 
an agency specified in such subparagraph shall be
furnished with reasonable promptness to the agency 
determining eligibility for medical assistance under 
the State plan approved under this title or for child 
health assistance under a State plan approved under 
Title XXI. 
‘‘(C) Nothing in subparagraph (A) shall be construed 
to restrict the ability of an individual under 19 years of 
age (or such higher age as specified by the State) to apply 
for medical assistance under a State plan approved under 
this title or for child health assistance under a State plan 
approved under title XXI under the methodology that 
would otherwise be applicable in determining eligibility for 
such an individual.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) takes effect on October 1, 2003.
Æ