400
‘‘(19) Abortion only if necessary to save the life
of the mother or if the pregnancy is the result of an
act of rape or incest.
‘‘(20) Dental services.
‘‘(21) Inpatient substance abuse treatment
services and residential substance abuse treatment
services.
‘‘(22) Outpatient substance abuse treatment
services.
‘‘(23) Case management services.
‘‘(24) Care coordination services.
‘‘(25) Physical therapy, occupational therapy,
and services for individuals with speech, hearing,
and language disorders.
‘‘(26) Hospice care.
‘‘(27) Any other medical, diagnostic, screening,
preventive, restorative, remedial, therapeutic, or re-
habilitative services (whether in a facility, home,
school, or other setting) if recognized by State law
and only if the service is—
‘‘(A) prescribed by or furnished by a physi-
cian or other licensed or registered practitioner
within the scope of practice as defined by State
law,
401
‘‘(B) performed under the general super-
vision or at the direction of a physician, or
‘‘(C) furnished by a health care facility
that is operated by a State or local government
or is licensed under State law and operating
within the scope of the license.
‘‘(28) Premiums for private health care insur-
ance coverage, including private long-term care in-
surance coverage.
‘‘(29) Medical transportation.
‘‘(30) Medicare cost-sharing (as defined in sub-
section (c)).
‘‘(31) Enabling services (such as transpor-
tation, translation, and outreach services) only if de-
signed to increase the accessibility of primary and
preventive health care services for eligible low-in-
come individuals.
‘‘(32) Federally-qualified health center services
(as defined in subsection (f)(2)(A)).
‘‘(33) Rural health clinic services (as defined in
subsection (f)(1)).
‘‘(34) Physician assistant services.
‘‘(35) Any other health care services or items
specified by the Secretary and not excluded under
this section.
402
‘‘(b) ELIGIBLE LOW-INCOME INDIVIDUAL.—
‘‘(1) STATE PLAN ELIGIBILITY STANDARDS.—
‘‘(A) IN GENERAL.—The term ‘eligible low-
income individual’ means an individual—
‘‘(i) who has been determined eligible
by the State for medical assistance under
the State plan and is not an inmate of a
public institution (except as a patient in a
State psychiatric hospital), and
‘‘(ii) whose family income (as deter-
mined under the plan) does not exceed a
percentage (specified in the State plan and
not to exceed 275 percent) of the poverty
line for a family of the size involved.
‘‘(B) CONTINUATION OF KATIE BECKETT
ELIGIBILITY.—At the option of a State, sub-
paragraph (A)(ii) shall not apply in the case of
an individual who—
‘‘(i) is 18 years of age or younger and
qualifies as a disabled individual under sec-
tion 1614(a); and
‘‘(ii) with respect to whom there has
been a determination by the State that—
‘‘(I) the individual requires a
level of care provided in a hospital,
403
nursing facility, or intermediate care
facility for the mentally retarded; and
‘‘(II) it is appropriate to provide
such care for the individual outside
such an institution.
‘‘(2) AMOUNT OF INCOME.—In determining the
amount of income under paragraph (1)(B), a State
may exclude costs incurred for medical care or other
types of remedial care recognized by the State.
‘‘(3) COMPUTATION OF INCOME FOR CERTAIN
CHILDREN.—In determining the amount of family
income under paragraph (1)(B) in the case of a
child described in section 1501(a)(1)(F), the State
shall only count the income of the child and not that
of the family in which the child is placed.
‘‘(c) MEDICARE COST-SHARING.—For purposes of
this title, the term ‘medicare cost-sharing’ means any of
the following:
‘‘(1)(A) Premiums under section 1839.
‘‘(B) Premiums under section 1818 or 1818A.
‘‘(2) Coinsurance under title XVIII (including
coinsurance described in section 1813).
‘‘(3) Deductibles established under title XVIII
(including those described in sections 1813 and
1833(b)).
404
‘‘(4) The difference between the amount that is
paid under section 1833(a) and the amount that
would be paid under such section if any reference to
‘80 percent’ therein were deemed a reference to ‘100
percent’.
‘‘(5) Premiums for enrollment of an individual
with an eligible organization under section 1876.
‘‘(d) ADDITIONAL DEFINITIONS.—For purposes of
this title:
‘‘(1) CHILD.—The term ‘child’ means an indi-
vidual under 19 years of age.
‘‘(2) ELDERLY INDIVIDUAL.—The term ‘elderly
individual’ means an individual who has attained re-
tirement age, as defined under section 216(l)(1).
‘‘(3) POVERTY LINE DEFINED.—The term ‘pov-
erty line’ has the meaning given such term in section
673(2) of the Community Services Block Grant Act
(42 U.S.C. 9902(2)), including any revision required
by such section.
‘‘(4) PREGNANT WOMAN.—The term ‘pregnant
woman’ includes a woman during the 60-day period
beginning on the last day of the pregnancy.
‘‘(e) EPSDT SERVICES.—In this title, the term
‘EPSDT services’ means the following items and services:
‘‘(1) Screening services—
405
‘‘(A) which are provided—
‘‘(i) at intervals which meet reason-
able standards of medical and dental prac-
tice, as determined by the State after con-
sultation with recognized medical and den-
tal organizations involved in child health
care and, with respect to immunizations
under section 1501(a)(2)(G) in accordance
with the schedule referred to in such sec-
tion for pediatric vaccines, and
‘‘(ii) at such other intervals, indicated
as medically necessary, to determine the
existence of certain physical or mental ill-
nesses or conditions; and
‘‘(B) which shall at a minimum include—
‘‘(i) a comprehensive health and devel-
opmental history (including assessment of
both physical and mental health develop-
ment),
‘‘(ii) a comprehensive unclothed phys-
ical exam,
‘‘(iii) appropriate immunizations (ac-
cording to the schedule referred to in sec-
tion 1501(a)(2)(G) for pediatric vaccines)
according to age and health history,
406
‘‘(iv) laboratory tests (including lead
blood level assessment appropriate for age
and risk factors), and
‘‘(v) health education (including antic-
ipatory guidance).
‘‘(2) Vision services—
‘‘(A) which are provided—
‘‘(i) at intervals which meet reason-
able standards of medical practice, as de-
termined by the State after consultation
with recognized medical organizations in-
volved in child health care, and
‘‘(ii) at such other intervals, indicated
as medically necessary, to determine the
existence of a suspected illness or condi-
tion; and
‘‘(B) which shall at a minimum include di-
agnosis and treatment for defects in vision, in-
cluding eyeglasses.
‘‘(3) Dental services—
‘‘(A) which are provided—
‘‘(i) at intervals which meet reason-
able standards of dental practice, as deter-
mined by the State after consultation with
407
recognized dental organizations involved in
child health care, and
‘‘(ii) at such other intervals, indicated
as medically necessary, to determine the
existence of a suspected illness or condi-
tion; and
‘‘(B) which shall at a minimum include re-
lief of pain and infections, restoration of teeth,
and maintenance of dental health.
‘‘(4) Hearing services—
‘‘(A) which are provided—
‘‘(i) at intervals which meet reason-
able standards of medical practice, as de-
termined by the State after consultation
with recognized medical organizations in-
volved in child health care, and
‘‘(ii) at such other intervals, indicated
as medically necessary, to determine the
existence of a suspected illness or condi-
tion; and
‘‘(B) which shall at a minimum include di-
agnosis and treatment for defects in hearing,
including hearing aids.
‘‘(f) CENTER AND CLINIC SERVICES.—In this title:
408
‘‘(1) RURAL HEALTH CLINIC RELATED DEFINI-
TIONS.—The terms ‘rural health clinic services’ and
‘rural health clinic’ have the meanings given such
terms in section 1861(aa), except that (A) clause (ii)
of section 1861(aa)(2) shall not apply to such terms,
and (B) the physician arrangement required under
section 1861(aa)(2)(B) shall only apply with respect
to rural health clinic services and, with respect to
other ambulatory care services, the physician ar-
rangement required shall be only such as may be re-
quired under the State plan for those services.
‘‘(2) FEDERALLY-QUALIFIED HEALTH CENTER
RELATED DEFINITIONS.—
‘‘(A) SERVICES.—The term ‘Federally-
qualified health center services’ means services
of the type described in subparagraphs (A)
through (C) of section 1861(aa)(1), and any
other ambulatory care services which are other-
wise included in the State plan, when furnished
to an individual as a patient of a Federally-
qualified health center and, for this purpose,
any reference to a rural health clinic or a physi-
cian described in section 1861(aa)(2)(B) is
deemed a reference to a Federally-qualified
409
health center or a physician at the center, re-
spectively.
‘‘(B) CENTER.—The term ‘Federally-quali-
fied health center’ means a entity which—
‘‘(i) is receiving a grant under section
329, 330, 340, or 340A of the Public
Health Service Act,
‘‘(ii)(I) is receiving funding from such
a grant under a contract with the recipient
of such a grant, and
‘‘(II) meets the requirements to re-
ceive a grant under section 329, 330, 340,
or 340A of such Act,
‘‘(iii) based on the recommendation of
the Health Resources and Services Admin-
istration within the Public Health Service,
is determined by the Secretary to meet the
requirements for receiving such a grant, or
‘‘(iv) was treated by the Secretary, for
purposes of part B of title XVIII, as a
comprehensive Federally funded health
center as of January 1, 1990;
and includes an outpatient health program or
facility operated by a tribe or tribal organiza-
tion under the Indian Self-Determination Act
410
(Public Law 93–638) or by an urban Indian or-
ganization receiving funds under title V of the
Indian Health Care Improvement Act for the
provision of primary health services. In apply-
ing clause (ii), the Secretary may waive any re-
quirement referred to in such clause for up to
2 years for good cause shown.
‘‘(g) MEDICALLY-RELATED SERVICES.—In this title,
the term ‘medically-related services’ means services rea-
sonably related to, or in direct support of, the State’s at-
tainment of one or more of the strategic objectives and
performance goals established under section 1521, but
does not include items and services included on the list
under subsection (a).
‘‘SEC. 1572. TREATMENT OF TERRITORIES.
‘‘Notwithstanding any other requirement of this title,
the Secretary may waive or modify any requirement of this
title with respect to the medical assistance program for
a State other than the 50 States and the District of Co-
lumbia, other than a waiver of—
‘‘(1) the applicable Federal medical assistance
percentage,
‘‘(2) the limitation on total payments in a fiscal
year to the amount of the allotment under section
1511(c), or
411
‘‘(3) the requirement that payment may be
made for medical assistance only with respect to
amounts expended by the State for care and services
described in section 1571(a) and medically-related
services (as defined in section 1571(g)).
‘‘SEC. 1573. DESCRIPTION OF TREATMENT OF INDIAN
HEALTH SERVICE FACILITIES.
‘‘In the case of a State in which one or more facilities
of the Indian Health Service is located or in which a facil-
ity of an Indian health program described in section
1512(f)(3) is located, the State plan shall include a de-
scription of—
‘‘(1) what provision (if any) has been made for
payment for items and services furnished by such fa-
cilities, and
‘‘(2) the manner in which medical assistance for
low-income eligible individuals who are Indians will
be provided, as determined by the State in consulta-
tion with the appropriate Indian tribes and tribal or-
ganizations.
‘‘SEC. 1574. APPLICATION OF CERTAIN GENERAL PROVI-
SIONS.
‘‘The following sections in part A of title XI shall
apply to States under this title in the same manner as
they applied to a State under title XIX:
412
‘‘(1) Section 1101(a)(1) (relating to definition
of State).
‘‘(2) Section 1116 (relating to administrative
and judicial review), but only insofar as consistent
with the provisions of part B.
‘‘(3) Section 1124 (relating to disclosure of
ownership and related information).
‘‘(4) Section 1126 (relating to disclosure of in-
formation about certain convicted individuals).
‘‘(5) Section 1128B(d) (relating to criminal
penalties for certain additional charges).
‘‘(6) Section 1132 (relating to periods within
which claims must be filed).
‘‘SEC. 1575. OPTIONAL MASTER DRUG REBATE AGREE-
MENTS.
‘‘(a) REQUIREMENT FOR MANUFACTURER TO ENTER
INTO AGREEMENT.—
‘‘(1) 
IN
GENERAL.—Pursuant 
to 
section
1513(f), in order for payment to be made to a State
under part B for medical assistance for covered out-
patient drugs of a manufacturer, the manufacturer
shall enter into and have in effect a master rebate
agreement described in subsection (b) with the Sec-
retary on behalf of States electing to participate in
the agreement.
413
‘‘(2) COVERAGE
OF
DRUGS
NOT
COVERED
UNDER REBATE AGREEMENTS.—Nothing in this sec-
tion shall be construed to prohibit a State in its dis-
cretion from providing coverage under its State plan
of a covered outpatient drug for which no rebate
agreement is in effect under this section.
‘‘(3) EFFECT ON EXISTING AGREEMENTS.—If a
State has a rebate agreement in effect with a manu-
facturer on the date of the enactment of this section
which provides for a minimum aggregate rebate
equal to or greater than the minimum aggregate re-
bate which would otherwise be paid under the mas-
ter agreement under this section, at the option of
the State—
‘‘(A) such agreement shall be considered to
meet the requirements of the master rebate
agreement, and
‘‘(B) the State shall be considered to have
elected to participate in the master rebate
agreement.
‘‘(4) LIMITATION ON PRICES OF DRUGS PUR-
CHASED BY COVERED ENTITIES.—
‘‘(A) AGREEMENT
WITH
SECRETARY.—A
manufacturer meets the requirements of this
paragraph if the manufacturer has entered into
414
an agreement with the Secretary that meets the
requirements of section 340B of the Public
Health Service Act with respect to covered out-
patient drugs purchased by a covered entity on
or after the first day of the first month that be-
gins after the date of the enactment of title VI
of the Veterans Health Care Act of 1992.
‘‘(B) COVERED ENTITY DEFINED.—In this
subsection, the term ‘covered entity’ means an
entity described in subsection (a)(4) of section
340B of the Public Health Service Act if the
entity furnishes the drugs to patients at a cost
no greater than acquisition cost plus such dis-
pensing fee as may be allowable as determined
by the Office of Drug Pricing in the Public
Health Service.
‘‘(C) ESTABLISHMENT
OF
ALTERNATIVE
MECHANISM
TO
ENSURE
AGAINST
DUPLICATE
DISCOUNTS
OR
REBATES.—If the Secretary
does not establish a mechanism under section
340B(a)(5)(A) of the Public Health Service Act
within 12 months of the date of the enactment
of such section, the following requirements shall
apply:
415
‘‘(i) Each covered entity shall inform
the single State agency under this title
when it is seeking reimbursement for medi-
cal assistance with respect to a unit of any
covered outpatient drug which is subject to
an agreement under section 340B(a) of
such Act.
‘‘(ii) Each such single State agency
shall provide a means by which a covered
entity shall indicate on any drug reim-
bursement claims form (or format, where
electronic claims management is used) that
a unit of the drug that is the subject of the
form is subject to an agreement under sec-
tion 340B of such Act, and not submit to
any manufacturer a claim for a rebate pay-
ment under subsection (b) with respect to
such a drug.
‘‘(D) EFFECT
OF
SUBSEQUENT
AMEND-
MENTS.—In determining whether an agreement
under subparagraph (A) meets the require-
ments of section 340B of the Public Health
Service Act, the Secretary shall not take into
account any amendments to such section that
416
are enacted after the enactment of title VI of
the Veterans Health Care Act of 1992.
‘‘(E) DETERMINATION OF COMPLIANCE.—
A manufacturer is deemed to meet the require-
ments of this paragraph if the manufacturer es-
tablishes to the satisfaction of the Secretary
that the manufacturer would comply (and has
offered to comply) with the provisions of section
340B of the Public Health Service Act (as in
effect immediately after the enactment title VI
of the Veterans Health Care Act of 1992), and
would have entered into an agreement under
such section (as such section was in effect at
such time), but for a legislative change in such
section after such enactment.
‘‘(b) TERMS OF REBATE AGREEMENT.—
‘‘(1) PERIODIC REBATES.—The master rebate
agreement under this section shall require the manu-
facturer to provide, to the State plan of each State
participating in the agreement, a rebate for a rebate
period in an amount specified in subsection (c) for
covered outpatient drugs of the manufacturer dis-
pensed after the effective date of the agreement, for
which payment was made under the plan for such
period. Such rebate shall be paid by the manufac-
417
turer not later than 30 days after the date of receipt
of the information described in paragraph (2) for
the period involved.
‘‘(2) STATE PROVISION OF INFORMATION.—
‘‘(A) STATE RESPONSIBILITY.—Each State
participating in the master rebate agreement
shall report to each manufacturer not later
than 60 days after the end of each rebate pe-
riod and in a form consistent with a standard
reporting format established by the Secretary,
information on the total number of units of
each dosage form and strength and package
size of each covered outpatient drug, for which
payment was made under the State plan for the
period, and shall promptly transmit a copy of
such report to the Secretary.
‘‘(B) AUDITS.—A manufacturer may audit
the information provided (or required to be pro-
vided) under subparagraph (A). Adjustments to
rebates shall be made to the extent that infor-
mation indicates that utilization was greater or
less than the amount previously specified.
‘‘(3) MANUFACTURER PROVISION OF PRICE IN-
FORMATION.—
418
‘‘(A) IN
GENERAL.—Each manufacturer
which is subject to the master rebate agreement
under this section shall report to the Sec-
retary—
‘‘(i) not later than 30 days after the
last day of each rebate period under the
agreement, on the average manufacturer
price (as defined in subsection (i)(1)) and,
for single source drugs and innovator mul-
tiple source drugs, the manufacturer’s best
price (as defined in subsection (c)(1)(C))
for each covered outpatient drug for the
rebate period under the agreement, and
‘‘(ii) not later than 30 days after the
date of entering into an agreement under
this section, on the average manufacturer
price (as defined in subsection (i)(1)) as of
October 1, 1990, for each of the manufac-
turer’s covered outpatient drugs.
‘‘(B) VERIFICATION SURVEYS OF AVERAGE
MANUFACTURER
PRICE.—The Secretary may
survey wholesalers and manufacturers that di-
rectly distribute their covered outpatient drugs,
when necessary, to verify manufacturer prices
reported under subparagraph (A). The Sec-
419
retary may impose a civil monetary penalty in
an amount not to exceed $10,000 on a whole-
saler, manufacturer, or direct seller, if the
wholesaler, manufacturer, or direct seller of a
covered outpatient drug refuses a request for
information by the Secretary in connection with
a survey under this subparagraph. The provi-
sions of section 1128A (other than subsections
(a) (with respect to amounts of penalties or ad-
ditional assessments) and (b)) shall apply to a
civil money penalty under this subparagraph in
the same manner as such provisions apply to a
penalty or proceeding under section 1128A(a).
‘‘(C) PENALTIES.—
‘‘(i) FAILURE TO PROVIDE TIMELY IN-
FORMATION.—In the case of a manufac-
turer which is subject to the master rebate
agreement that fails to provide information
required under subparagraph (A) on a
timely basis, the amount of the penalty
shall be $10,000 for each day in which
such information has not been provided
and such amount shall be paid to the
Treasury. If such information is not re-
ported within 90 days of the deadline im-
420
posed, the agreement shall be suspended
for services furnished after the end of such
90-day period and until the date such in-
formation is reported (but in no case shall
such suspension be for a period of less
than 30 days).
‘‘(ii) 
FALSE
INFORMATION.—Any
manufacturer which is subject to the mas-
ter rebate agreement, or a wholesaler or
direct seller, that knowingly provides false
information under subparagraph (A) or
(B) is subject to a civil money penalty in
an amount not to exceed $100,000 for
each item of false information. Any such
civil money penalty shall be in addition to
other penalties as may be prescribed by
law. The provisions of section 1128A
(other than subsections (a) and (b)) shall
apply to a civil money penalty under this
subparagraph in the same manner as such
provisions apply to a penalty or proceeding
under section 1128A(a).
‘‘(D) 
CONFIDENTIALITY
OF
INFORMA-
TION.—Notwithstanding any other provision of
law, information disclosed by manufacturers or
421
wholesalers under this paragraph or under an
agreement with the Secretary of Veterans Af-
fairs described in section 1513(f) is confidential
and shall not be disclosed by the Secretary or
the Secretary of Veterans Affairs or a State
agency (or contractor therewith) in a form
which discloses the identity of a specific manu-
facturer or wholesaler or the prices charged for
drugs by such manufacturer or wholesaler, ex-
cept—
‘‘(i) as the Secretary determines to be
necessary to carry out this section,
‘‘(ii) to permit the Comptroller Gen-
eral to review the information provided,
and
‘‘(iii) to permit the Director of the
Congressional Budget Office to review the
information provided.
‘‘(4) LENGTH OF AGREEMENT.—
‘‘(A) IN
GENERAL.—The master rebate
agreement under this section shall be effective
for an initial period of not less than 1 year and
shall be automatically renewed for a period of
not less than 1 year unless terminated under
subparagraph (B).
422
‘‘(B) TERMINATION.—
‘‘(i) BY THE SECRETARY.—The Sec-
retary may provide for termination of the
master rebate agreement with respect to a
manufacturer for violation of the require-
ments of the agreement or other good
cause shown. Such termination shall not be
effective earlier than 60 days after the
date of notice of such termination. The
Secretary shall provide, upon request, a
manufacturer with a hearing concerning
such a termination, but such hearing shall
not delay the effective date of the termi-
nation. Failure of a State to provide any
advance notice of such a termination as re-
quired by regulation shall not affect the
State’s right to terminate coverage of the
drugs affected by such termination as of
the effective date of such termination.
‘‘(ii) BY A MANUFACTURER.—A man-
ufacturer may terminate its participation
in the master rebate agreement under this
section for any reason. Any such termi-
nation shall not be effective until the cal-
endar quarter beginning at least 60 days
429
strength of the drug for the period,
exceeds
‘‘(II) the average manufacturer
price for such dosage form and
strength for the calendar quarter be-
ginning July 1, 1990 (without regard
to whether or not the drug has been
sold or transferred to an entity, in-
cluding a division or subsidiary of the
manufacturer, after the first day of
such quarter), increased by the per-
centage by which the Consumer Price
Index for All Urban Consumers (Unit-
ed States city average) for the month
before the month in which the rebate
period begins exceeds such index for
September 1990.
‘‘(B) TREATMENT OF SUBSEQUENTLY AP-
PROVED DRUGS.—In the case of a covered out-
patient drug approved by the Food and Drug
Administration after October 1, 1990, clause
(ii)(II) of subparagraph (A) shall be applied by
substituting ‘the first full calendar quarter after
the day on which the drug was first marketed’
for ‘the calendar quarter beginning July 1,