999 
SEC. 1646. REQUIRING PROVIDER AND SUPPLIER PAY-
MENTS UNDER MEDICARE TO BE MADE 
THROUGH DIRECT DEPOSIT OR ELECTRONIC 
FUNDS TRANSFER (EFT) AT INSURED DEPOSI-
TORY INSTITUTIONS. 
(a) MEDICARE.—Section 1874 of the Social Security 
Act (42 U.S.C. 1395kk) is amended by adding at the end 
the following new subsection: 
‘‘(e) LIMITATION ON PAYMENT TO PROVIDERS OF 
SERVICES AND SUPPLIERS.—No payment shall be made 
under this title for items and services furnished by a pro-
vider of services or supplier unless each payment to the 
provider of services or supplier is in the form of direct 
deposit or electronic funds transfer to the provider of serv-
ices’ or supplier’s account, as applicable, at a depository 
institution (as defined in section 19(b)(1)(A) of the Fed-
eral Reserve Act.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to each payment made to a pro-
vider of services, provider, or supplier on or after such 
date (not later than July 1, 2012) as the Secretary of 
Health and Human Services shall specify, regardless of 
when the items and services for which such payment is 
made were furnished. 
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SEC. 
1647. 
INSPECTOR 
GENERAL 
FOR 
THE 
HEALTH 
CHOICES ADMINISTRATION. 
(a) ESTABLISHMENT; APPOINTMENT.—There is 
hereby established an Office of Inspector General for the 
Health Choices Administration, to be headed by the In-
spector General for the Health Choices Administration to 
be appointed by the President, by and with the advice and 
consent of the Senate. 
(b) AMENDMENTS TO THE INSPECTOR GENERAL ACT 
OF 1978.— 
(1) APPLICATION TO HEALTH CHOICES ADMIN-
ISTRATION.—Section 12 of the Inspector General 
Act of 1978 (5 U.S.C. App.) is amended— 
(A) in paragraph (1), by striking ‘‘or the 
Federal Cochairpersons of the Commissions es-
tablished under section 15301 of title 40, 
United States Code’’ and inserting ‘‘the Federal 
Cochairpersons of the Commissions established 
under section 15301 of title 40, United States 
Code; or the Commissioner of the Health 
Choices Administration established under sec-
tion 241 of the Affordable Health Care for 
America Act’’; and 
(B) in paragraph (2), by striking ‘‘or the 
Commissions established under section 15301 
of title 40, United States Code’’ and inserting 
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‘‘the Commissions established under section 
15301 of title 40, United States Code, or the 
Health 
Choices 
Administration 
established 
under section 241 of the Affordable Health 
Care for America Act’’. 
(2) SPECIAL PROVISIONS RELATING TO HEALTH 
CHOICES ADMINISTRATION AND HHS.—The Inspec-
tor General Act of 1978 (5 U.S.C. App.) is further 
amended by inserting after section 8L the following 
new section: 
‘‘SEC. 8M SPECIAL PROVISIONS RELATING TO THE HEALTH 
CHOICES ADMINISTRATION AND THE DE-
PARTMENT OF HEALTH AND HUMAN SERV-
ICES. 
‘‘(a) The Inspector General of the Health Choices Ad-
ministration shall— 
‘‘(1) have the authority to conduct, supervise, 
and coordinate audits, evaluations, and investiga-
tions of the programs and operations of the Health 
Choices Administration established under section 
241 of the Affordable Health Care for America Act, 
including matters relating to fraud, abuse, and mis-
conduct in connection with the admission and con-
tinued participation of any health benefits plan par-
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ticipating in the Health Insurance Exchange estab-
lished under section 301 of such Act; 
‘‘(2) have the authority to conduct audits, eval-
uations, and investigations relating to any private 
Exchange-participating health benefits plan, as de-
fined in section 201(c) of such Act; 
‘‘(3) have the authority, in consultation with 
the Office of Inspector General for the Department 
of Health and Human Services and subject to sub-
section (b), to conduct audits, evaluations, and in-
vestigations relating to the public health insurance 
option established under section 321 of such Act; 
and 
‘‘(4) have access to all relevant records nec-
essary to carry out this section, including records re-
lating to claims paid by Exchange-participating 
health benefits plans. 
‘‘(b) Authority granted to the Health Choices Admin-
istration and the Inspector General of the Health Choices 
Administration by the Affordable Health Care for America 
Act does not limit the duties, authorities, and responsibil-
ities of the Office of Inspector General for the Department 
of Health and Human Services, as in existence as of the 
date of the enactment of the Affordable Health Care for 
America Act , to oversee programs and operations of such 
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department. The Office of Inspector General for the De-
partment of Health and Human Services retains primary 
jurisdiction over fraud and abuse in connection with pay-
ments made under the public health insurance option es-
tablished under section 321 of such Act and administered 
by the Department of Health and Human Services.’’. 
(3) APPLICATION
OF
RULE
OF
CONSTRUC-
TION.—Section 8J of the Inspector General Act of 
1978 (5 U.S.C. App.) is amended by striking ‘‘or 
8H’’ and inserting ‘‘, 8H, or 8M’’. 
(c) EFFECTIVE
DATE.—The provisions of and 
amendments made by this section shall take effect on the 
date of the enactment of this Act. 
Subtitle D—Access to Information 
Needed 
to 
Prevent 
Fraud, 
Waste, and Abuse 
SEC. 1651. ACCESS TO INFORMATION NECESSARY TO IDEN-
TIFY FRAUD, WASTE, AND ABUSE. 
(a) GAO ACCESS.—Subchapter II of chapter 7 of 
title 31, United States Code, is amended by adding at the 
end the following: 
‘‘§ 721. Access to certain information 
‘‘No provision of the Social Security Act shall be con-
strued to limit, amend, or supersede the authority of the 
Comptroller General to obtain any information, to inspect 
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any record, or to interview any officer or employee under 
section 716 of this title, including with respect to any in-
formation disclosed to or obtained by the Secretary of 
Health and Human Services under part C or D of title 
XVIII of the Social Security Act.’’. 
(b) ACCESS TO MEDICARE PART D DATA PROGRAM 
INTEGRITY PURPOSES.— 
(1) PROVISION OF INFORMATION AS CONDITION 
OF PAYMENT.—Section 1860D–15(d)(2)(B) of the 
Social 
Security 
Act 
(42 
U.S.C. 
1395w– 
115(d)(2)(B)) is amended— 
(A) by striking ‘‘may be used by officers’’ 
and all that follows through the period and in-
serting ‘‘may be used by—’’; and 
(B) by adding at the end the following 
clauses: 
‘‘(i) officers, employees, and contrac-
tors of the Department of Health and 
Human Services only for the purposes of, 
and to the extent necessary in, carrying 
out this section; and 
‘‘(ii) the Inspector General of the De-
partment of Health and Human Services, 
the Administrator of the Centers for Medi-
care & Medicaid Services, and the Attorney 
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General only for the purposes of protecting 
the integrity of the programs under this 
title and title XIX; conducting the activi-
ties described in section 1893 and subpara-
graphs 
(A) 
through 
(E) 
of 
section 
1128C(a)(1); and for investigation, audit, 
evaluation, oversight, and
law enforce-
ment purposes to the extent consistent 
with applicable law.’’. 
(2) GENERAL DISCLOSURE OF INFORMATION.— 
Section 1860D–15(f)(2) of the Social Security Act 
(42 U.S.C. 1395w–115(f)(2)) is amended— 
(A) by striking ‘‘may be used by officers’’ 
and all that follows through the period and in-
serting ‘‘may be used by—’’; and 
(B) by adding at the end the following sub-
paragraphs: 
‘‘(A) officers, employees, and contractors 
of the Department of Health and Human Serv-
ices only for the purposes of, and to the extent 
necessary in, carrying out this section; and 
‘‘(B) the Inspector General of the Depart-
ment of Health and Human Services, the Ad-
ministrator of the Centers for Medicare & Med-
icaid Services, and the Attorney General only 
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for the purposes of protecting the integrity of 
the programs under this title and title XIX; 
conducting the activities described in section 
1893 and subparagraphs (A) through (E) of 
section 1128C(a)(1); and for investigation, 
audit, evaluation, oversight, and
law enforce-
ment purposes to the extent consistent with ap-
plicable law.’’. 
SEC. 1652. ELIMINATION OF DUPLICATION BETWEEN THE 
HEALTHCARE INTEGRITY AND PROTECTION 
DATA BANK AND THE NATIONAL PRACTI-
TIONER DATA BANK. 
(a) IN GENERAL.—To eliminate duplication between 
the Healthcare Integrity and Protection Data Bank 
(HIPDB) established under section 1128E of the Social 
Security Act and the National Practitioner Data Bank 
(NPBD) established under the Health Care Quality Im-
provement Act of 1986, section 1128E of the Social Secu-
rity Act (42 U.S.C. 1320a-7e) is amended— 
(1) in subsection (a), by striking ‘‘Not later 
than’’ and inserting ‘‘Subject to subsection (h), not 
later than’’; 
(2) in the first sentence of subsection (d)(2), by 
striking ‘‘(other than with respect to requests by 
Federal agencies)’’; and 
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(3) by adding at the end the following new sub-
section: 
‘‘(h) SUNSET OF THE HEALTHCARE INTEGRITY AND 
PROTECTION DATA BANK; TRANSITION PROCESS.—Ef-
fective upon the enactment of this subsection, the Sec-
retary shall implement a process to eliminate duplication 
between the Healthcare Integrity and Protection Data 
Bank (in this subsection referred to as the ‘HIPDB’ es-
tablished pursuant to subsection (a) and the National 
Practitioner Data Bank (in this subsection referred to as 
the ‘NPDB’) as implemented under the Health Care Qual-
ity Improvement Act of 1986 and section 1921 of this Act, 
including systems testing necessary to ensure that infor-
mation formerly collected in the HIPDB will be accessible 
through the NPDB, and other activities necessary to 
eliminate duplication between the two data banks. Upon 
the completion of such process, notwithstanding any other 
provision of law, the Secretary shall cease the operation 
of the HIPDB and shall collect information required to 
be reported under the preceding provisions of this section 
in the NPDB. Except as otherwise provided in this sub-
section, the provisions of subsections (a) through (g) shall 
continue to apply with respect to the reporting of (or fail-
ure to report), access to, and other treatment of the infor-
mation specified in this section.’’. 
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(b) ELIMINATION OF THE RESPONSIBILITY OF THE 
HHS OFFICE OF THE INSPECTOR GENERAL.—Section 
1128C(a)(1) of the Social Security Act (42 U.S.C. 1320a- 
7c(a)(1)) is amended— 
(1) in subparagraph (C), by adding at the end 
‘‘and’’; 
(2) in subparagraph (D), by striking at the end 
‘‘, and’’ and inserting a period; and 
(3) by striking subparagraph (E). 
(c) SPECIAL PROVISION FOR ACCESS TO THE NA-
TIONAL PRACTITIONER DATA BANK BY THE DEPART-
MENT OF VETERANS AFFAIRS.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of law, during the one year period that be-
gins on the effective date specified in subsection 
(e)(1), the information described in paragraph (2) 
shall be available from the National Practitioner 
Data Bank (described in section 1921 of the Social 
Security Act) to the Secretary of Veterans Affairs 
without charge. 
(2) INFORMATION DESCRIBED.—For purposes 
of paragraph (1), the information described in this 
paragraph is the information that would, but for the 
amendments made by this section, have been avail-
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able to the Secretary of Veterans Affairs from the 
Healthcare Integrity and Protection Data Bank. 
(d) FUNDING.—Notwithstanding any provisions of 
this Act, sections 1128E(d)(2) and 1817(k)(3) of the So-
cial Security Act, or any other provision of law, there shall 
be available for carrying out the transition process under 
section 1128E(h) of the Social Security Act over the pe-
riod required to complete such process, and for operation 
of the National Practitioner Data Bank until such process 
is completed, without fiscal year limitation— 
(1) any fees collected pursuant to section 
1128E(d)(2) of such Act; and 
(2) such additional amounts as necessary, from 
appropriations available to the Secretary and to the 
Office of the Inspector General of the Department of 
Health and Human Services under clauses (i) and 
(ii), respectively, of section 1817(k)(3)(A) of such 
Act, for costs of such activities during the first 12 
months following the date of the enactment of this 
Act. 
(e) EFFECTIVE DATE.—The amendments made— 
(1) by subsection (a)(2) shall take effect on the 
first day after the Secretary of Health and Human 
Services certifies that the process implemented pur-
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suant to section 1128E(h) of the Social Security Act 
(as added by subsection (a)(3)) is complete; and 
(2) by subsection (b) shall take effect on the 
earlier of the date specified in paragraph (1) or the 
first day of the second succeeding fiscal year after 
the fiscal year during which this Act is enacted. 
SEC. 1653. COMPLIANCE WITH HIPAA PRIVACY AND SECU-
RITY STANDARDS. 
The provisions of sections 262(a) and 264 of the 
Health Insurance Portability and Accountability Act of 
1996 (and standards promulgated pursuant to such sec-
tions) and the Privacy Act of 1974 shall apply with respect 
to the provisions of this subtitle and amendments made 
by this subtitle. 
TITLE VII—MEDICAID AND CHIP 
SEC. 1. TABLE OF CONTENTS øTEMPORARY¿. 
Sec. 1. Table of contents øTemporary¿. 
Subtitle A—Medicaid and Health Reform 
Sec. 1701. Eligibility for individuals with income below 150 percent of the Fed-
eral poverty level. 
Sec. 1702.
Requirements and special rules for certain Medicaid eligible individ-
uals. 
Sec. 1703. CHIP and Medicaid maintenance of eligibility. 
Sec. 1704. Reduction in Medicaid DSH. 
Sec. 1705. Expanded outstationing. 
Subtitle B—Prevention 
Sec. 1711. Required coverage of preventive services. 
Sec. 1712. Tobacco cessation. 
Sec. 1713. Optional coverage of nurse home visitation services. 
Sec. 1714. State eligibility option for family planning services. 
Subtitle C—Access 
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Sec. 1721. Payments to primary care practitioners. 
Sec. 1722. Medical home pilot program. 
Sec. 1723. Translation or interpretation services. 
Sec. 1724. Optional coverage for freestanding birth center services. 
Sec. 1725. Inclusion of public health clinics under the vaccines for children pro-
gram. 
Sec. 1726. Requiring coverage of services of podiatrists. 
Sec. 1726A. Requiring coverage of services of optometrists. 
Sec. 1727. Therapeutic foster care. 
Sec. 1728. Assuring adequate payment levels for services. 
Sec. 1729. Preserving Medicaid coverage for youths upon release from public 
institutions. 
Sec. 1730. Quality measures for maternity and adult health services under 
Medicaid and CHIP. 
Sec. 1730A. Accountable care organization pilot program. 
Sec. 1730B. FQHC coverage. 
Subtitle D—Coverage 
Sec. 1731. Optional Medicaid coverage of low-income HIV-infected individuals. 
Sec. 1732. Extending transitional Medicaid Assistance (TMA). 
Sec. 1733. Requirement of 12-month continuous coverage under certain CHIP 
programs. 
Sec. 1734. Preventing the application under CHIP of coverage waiting periods 
for certain children. 
Sec. 1735. Adult day health care services. 
Sec. 1736. Medicaid coverage for citizens of Freely Associated States. 
Sec. 1737. Continuing requirement of Medicaid coverage of nonemergency 
transportation to medically necessary services. 
Sec. 1738. State option to disregard certain income in providing continued 
Medicaid coverage for certain individuals with extremely high 
prescription costs. 
Sec. 1739. Provisions relating to community living assistance services and sup-
ports (CLASS). 
Subtitle E—Financing 
Sec. 1741. Payments to pharmacists. 
Sec. 1742. Prescription drug rebates. 
Sec. 1743. Extension of prescription drug discounts to enrollees of Medicaid 
managed care organizations. 
Sec. 1744. Payments for graduate medical education. 
Sec. 1745. Nursing Facility Supplemental Payment Program. 
Sec. 1746. Report on Medicaid payments. 
Sec. 1747. Reviews of Medicaid. 
Sec. 1748. Extension of delay in managed care organization provider tax elimi-
nation. 
Sec. 1749. Extension of ARRA increase in FMAP. 
Subtitle F—Waste, Fraud, and Abuse 
Sec. 1751. Health care acquired conditions. 
Sec. 1752. Evaluations and reports required under Medicaid Integrity Program. 
Sec. 1753. Require providers and suppliers to adopt programs to reduce waste, 
fraud, and abuse. 
Sec. 1754. Overpayments. 
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Sec. 1755. Managed care organizations. 
Sec. 1756. Termination of provider participation under Medicaid and CHIP if 
terminated under Medicare or other State plan or child health 
plan. 
Sec. 1757. Medicaid and CHIP exclusion from participation relating to certain 
ownership, control, and management affiliations. 
Sec. 1758. Requirement to report expanded set of data elements under MMIS 
to detect fraud and abuse. 
Sec. 1759. Billing agents, clearinghouses, or other alternate payees required to 
register under Medicaid. 
Sec. 1760. Denial of payments for litigation-related misconduct. 
Sec. 1761. Mandatory State use of national correct coding initiative. 
Subtitle G—Payments to the Territories 
Sec. 1771. Payment to territories. 
Subtitle H—Miscellaneous 
Sec. 1781. Technical corrections. 
Sec. 1782. Extension of QI program. 
Sec. 1783. Assuring transparency of information. 
Sec. 1784. Medicaid and CHIP Payment and Access Commission. 
Sec. 1785. Outreach and enrollment of Medicaid and CHIP eligible individuals. 
Sec. 1786. Prohibitions on Federal Medicaid and CHIP payment for undocu-
mented aliens. 
Sec. 1787. Demonstration project for stabilization of emergency medical condi-
tions by institutions for mental diseases. 
Sec. 1788. Application of Medicaid Improvement Fund. 
Sec. 1789. Treatment of certain Medicaid brokers. 
Sec. 1790. Rule for changes requiring State legislation. 
Subtitle A—Medicaid and Health 
Reform 
SEC. 1701. ELIGIBILITY FOR INDIVIDUALS WITH INCOME 
BELOW 150 PERCENT OF THE FEDERAL POV-
ERTY LEVEL. 
(a) ELIGIBILITY
FOR NON-TRADITIONAL INDIVID-
UALS WITH INCOME BELOW 150 PERCENT OF THE FED-
ERAL POVERTY LEVEL.— 
(1) FULL MEDICAID BENEFITS FOR NON-MEDI-
CARE
ELIGIBLE
INDIVIDUALS.—Section 
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1902(a)(10)(A)(i) of the Social Security Act (42 
U.S.C. 1396b(a)(10)(A)(i)) is amended— 
(A) by striking ‘‘or’’ at the end of sub-
clause (VI); 
(B) by adding ‘‘or’’ at the end of subclause 
(VII); and 
(C) by adding at the end the following new 
subclause: 
‘‘(VIII) who are under 65 years 
of age, who are not described in a pre-
vious subclause of this clause, who are 
not entitled to hospital insurance ben-
efits under part A of title XVIII, and 
whose 
family 
income 
(determined 
using methodologies and procedures 
specified by the Secretary in consulta-
tion with the Health Choices Commis-
sioner) does not exceed 150 percent of 
the income official poverty line (as de-
fined 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 involved;’’. 
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(2) MEDICARE COST SHARING ASSISTANCE FOR 
MEDICARE-ELIGIBLE
INDIVIDUALS.—Section 
1902(a)(10)(E) 
of 
such 
Act 
(42 
U.S.C. 
1396b(a)(10)(E)) is amended— 
(A) in clause (iii), by striking ‘‘and’’ at the 
end; 
(B) in clause (iv), by adding ‘‘and’’ at the 
end; and 
(C) by adding at the end the following new 
clause: 
‘‘(v) for making medical assistance avail-
able for medicare cost-sharing described in sub-
paragraphs (B) and (C) of section 1905(p)(3), 
for individuals under 65 years of age who would 
be qualified medicare beneficiaries described in 
section 1905(p)(1) but for the fact that their 
income exceeds the income level established by 
the State under section 1905(p)(2) but is less 
than 150 percent of the official poverty line (re-
ferred to in such section) for a family of the 
size involved; and’’. 
(3) INCREASED
FMAP
FOR
NON-TRADITIONAL 
FULL
MEDICAID
ELIGIBLE
INDIVIDUALS.—Section 
1905 of such Act (42 U.S.C. 1396d) is amended— 
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(A) in the first sentence of subsection (b), 
by striking ‘‘and’’ before ‘‘(4)’’ and by inserting 
before the period at the end the following: ‘‘, 
and (5) 100 percent (for periods before 2015 
and 91 percent for periods beginning with 
2015) with respect to amounts described in 
subsection (y)’’; and 
(B) by adding at the end the following new 
subsection: 
‘‘(y) ADDITIONAL EXPENDITURES SUBJECT TO IN-
CREASED FMAP.—For purposes of section 1905(b)(5), 
the amounts described in this subsection are the following: 
‘‘(1) Amounts expended for medical assistance 
for individuals described in subclause (VIII) of sec-
tion 1902(a)(10)(A)(i).’’. 
(4) CONSTRUCTION.—Nothing in this sub-
section shall be construed as not providing for cov-
erage under subparagraph (A)(i)(VIII) or (E)(v) of 
section 1902(a)(10) of the Social Security Act, as 
added by paragraphs (1) and (2), or an increased 
FMAP under the amendments made by paragraph 
(3), for an individual who has been provided medical 
assistance under title XIX of the Act under a dem-
onstration waiver approved under section 1115 of 
such Act or with State funds. 
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(5) CONFORMING AMENDMENTS.— 
(A) Section 1903(f)(4) of the Social Secu-
rity Act (42 U.S.C. 1396b(f)(4)) is amended— 
(i) 
by 
inserting 
‘‘1902(a)(10)(A)(i)(VIII),’’ 
after 
‘‘1902(a)(10)(A)(i)(VII),’’; and 
(ii) by inserting ‘‘1902(a)(10)(E)(v),’’ 
before ‘‘1905(p)(1)’’. 
(B) Section 1905(a) of such Act (42 
U.S.C. 1396d(a)), as amended by sections 
1714(a)(4) and 1731(c), is further amended, in 
the matter preceding paragraph (1)— 
(i) by striking ‘‘or’’ at the end of 
clause (xiv); 
(ii) by adding ‘‘or’’ at the end of 
clause (xv); and 
(iii) by inserting after clause (xv) the 
following: 
‘‘(xvi) individuals described in section 
1902(a)(10)(A)(i)(VIII),’’. 
(b) ELIGIBILITY FOR TRADITIONAL MEDICAID ELI-
GIBLE INDIVIDUALS WITH INCOME NOT EXCEEDING 150 
PERCENT OF THE FEDERAL POVERTY LEVEL .— 
(1) IN GENERAL.—Section 1902(a)(10)(A)(i) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
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1396b(a)(10)(A)(i)), as amended by subsection (a), 
is amended— 
(A) by striking ‘‘or’’ at the end of sub-
clause (VII); and 
(B) by adding at the end the following new 
subclause: 
‘‘(IX) who are over 18, and 
under 65 years of age, who would be 
eligible for medical assistance under 
the State plan under subclause (I) or 
section 1931 (based on the income 
standards, methodologies, and proce-
dures in effect as of June 16, 2009) 
but for income, who are in families 
whose income does not exceed 150 
percent of the income official poverty 
line (as defined by the Office of Man-
agement and Budget, and revised an-
nually in accordance with section 
673(2) of the Omnibus Budget Rec-
onciliation Act of 1981) applicable to 
a family of the size involved; or 
‘‘(X) beginning with 2014, who 
are over 5, and under 19, years of 
age, who would be eligible for medical 
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assistance under the State plan under 
subclause (I) or (VII) (based on the 
income standards, methodologies, and 
procedures in effect as of June 16, 
2009) but for income, who are in fam-
ilies whose income does not exceed 
150 percent of the income official pov-
erty line (as defined by the Office of 
Management and Budget, and revised 
annually in accordance with section 
673(2) of the Omnibus Budget Rec-
onciliation Act of 1981) applicable to 
a family of the size involved; or 
‘‘(XI) beginning with 2014, who 
are under 19 years of age, who are 
not described in subclause (X), and 
who would be eligible for child health 
assistance under a State child health 
plan insofar as such plan provides 
benefits under this title (as described 
in section 2101(a)(2)) based on such 
plan as in effect as of June 16, 2009; 
or’’. 
(2) INCREASED
FMAP
FOR
CERTAIN
TRADI-
TIONAL MEDICAID ELIGIBLE INDIVIDUALS.— 
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(A) INCREASED FMAP FOR ADULTS.—Sec-
tion 1905(y) of such Act (42 U.S.C. 1396d(y)), 
as added by subsection (a)(2)(B), is amended 
by inserting ‘‘or (IX)’’ after ‘‘(VIII)’’. 
(B) ENHANCED FMAP FOR CHILDREN.— 
Section 1905(b)(4) of such Act is amended by 
inserting 
‘‘1902(a)(10)(A)(i)(X), 
1902(a)(10)(A)(i)(XI), or’’ after ‘‘on the basis 
of section’’. 
(3) CONSTRUCTION.—Nothing in this sub-
section shall be construed as not providing for cov-
erage under subclause (IX), (X), or (XI) of section 
1902(a)(10)(A)(i) of the Social Security Act, as 
added by paragraph (1), or an increased or en-
hanced FMAP under the amendments made by 
paragraph (2), for an individual who has been pro-
vided medical assistance under title XIX of the Act 
under a demonstration waiver approved under sec-
tion 1115 of such Act or with State funds. 
(4) 
CONFORMING
AMENDMENT.—Section 
1903(f)(4) of the Social Security Act (42 U.S.C. 
1396b(f)(4)), as amended by subsection (a)(4), is 
amended 
by 
inserting 
‘‘1902(a)(10)(A)(i)(IX), 
1902(a)(10)(A)(i)(X), 1902(a)(10)(A)(i)(XI),’’ after 
‘‘1902(a)(10)(A)(i)(VIII),’’. 
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(c) INCREASED MATCHING RATE FOR TEMPORARY 
COVERAGE OF CERTAIN NEWBORNS.—Section 1905(y) of 
such Act, as added by subsection (a)(3)(B), is amended 
by adding at the end the following: 
‘‘(2) Amounts expended for medical assistance 
for children described in section 305(d)(1) of the Af-
fordable Health Care for America Act during the 
time period specified in such section.’’. 
(d) NETWORK ADEQUACY.—Section 1932(a)(2) of 
the Social Security Act (42 U.S.C. 1396u–2(a)(2)) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(D) ENROLLMENT OF NON-TRADITIONAL 
MEDICAID
ELIGIBLES.—A State may not re-
quire under paragraph (1) the enrollment in a 
managed care entity of an individual described 
in section 1902(a)(10)(A)(i)(VIII) unless the 
State demonstrates, to the satisfaction of the 
Secretary, that the entity, through its provider 
network and other arrangements, has the ca-
pacity to meet the health, mental health, and 
substance abuse needs of such individuals.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the first day of Y1, and 
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shall apply with respect to items and services furnished 
on or after such date. 
SEC. 1702. REQUIREMENTS AND SPECIAL RULES FOR CER-
TAIN MEDICAID ELIGIBLE INDIVIDUALS. 
(a) IN GENERAL.—Title XIX of the Social Security 
Act is amended by adding at the end the following new 
section: 
‘‘ REQUIREMENTS AND SPECIAL RULES FOR CERTAIN 
MEDICAID ELIGIBLE INDIVIDUALS 
‘‘SEC. 1943. (a) COORDINATION WITH NHI EX-
CHANGE
THROUGH
MEMORANDUM
OF
UNDER-
STANDING.— 
‘‘(1) IN GENERAL.—The State shall enter into 
a Medicaid memorandum of understanding described 
in section 305(e)(2) of the Affordable Health Care 
for America Act with the Health Choices Commis-
sioner, acting in consultation with the Secretary, 
with respect to coordinating the implementation of 
the provisions of division A of such Act with the 
State plan under this title in order to ensure the en-
rollment of Medicaid eligible individuals in accept-
able coverage. Nothing in this section shall be con-
strued as permitting such memorandum to modify or 
vitiate any requirement of a State plan under this 
title. 
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‘‘(2) ENROLLMENT
OF
EXCHANGE-REFERRED 
INDIVIDUALS.— 
‘‘(A) NON-TRADITIONAL
INDIVIDUALS.— 
Pursuant to such memorandum the State shall 
accept without further determination the enroll-
ment under this title of an individual deter-
mined by the Commissioner to be a non-tradi-
tional Medicaid eligible individual. The State 
shall not do any redeterminations of eligibility 
for such individuals unless the periodicity of 
such redeterminations is consistent with the pe-
riodicity for redeterminations by the Commis-
sioner of eligibility for affordability credits 
under subtitle C of title II of division A of the 
Affordable Health Care for America Act, as 
specified under such memorandum. 
‘‘(B) TRADITIONAL INDIVIDUALS.—Pursu-
ant to such memorandum, the State shall ac-
cept without further determination the enroll-
ment under this title of an individual deter-
mined by the Commissioner to be a traditional 
Medicaid eligible individual. The State may do 
redeterminations of eligibility of such individual 
consistent with such section and the memo-
randum. 
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‘‘(3) DETERMINATIONS
OF
ELIGIBILITY
FOR 
AFFORDABILITY CREDITS.—If the Commissioner de-
termines that a State Medicaid agency has the ca-
pacity to make determinations of eligibility for af-
fordability credits under subtitle C of title II of divi-
sion A of the Affordable Health Care for America 
Act, under such memorandum— 
‘‘(A) the State Medicaid agency shall con-
duct such determinations for any Exchange-eli-
gible individual who requests such a determina-
tion; 
‘‘(B) in the case that a State Medicaid 
agency determines that an Exchange-eligible in-
dividual is not eligible for affordability credits, 
the agency shall forward the information on the 
basis of which such determination was made to 
the Commissioner; and 
‘‘(C) the Commissioner shall reimburse the 
State Medicaid agency for the costs of con-
ducting such determinations. 
‘‘(4) REFERRALS UNDER MEMORANDUM.—Pur-
suant to such memorandum, if an individual applies 
to the State for assistance in obtaining health cov-
erage and the State determines that the individual 
is not eligible for medical assistance under this title 
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and is not authorized under such memorandum to 
make an determination with respect to eligibility for 
coverage and affordability credits through the 
Health Insurance Exchange, the State shall refer 
the individual to the Commissioner for a determina-
tion of such eligibility and, with the individual’s au-
thorization, provide to the Commissioner information 
obtained by the State as part of the application 
process. 
‘‘(5) ADDITIONAL TERMS.—Such memorandum 
shall include such additional provisions as are nec-
essary to implement efficiently the provisions of this 
section and title II of division A of the Affordable 
Health Care for America Act. 
‘‘(b) TREATMENT OF CERTAIN NEWBORNS.— 
‘‘(1) IN GENERAL.—In the case of a child who 
is deemed under section 305(d) of the Affordable 
Health Care for America Act to be a Medicaid eligi-
ble individual and enrolled under this title pursuant 
to such section, the State shall provide for a deter-
mination, by not later than the end of the period re-
ferred to in paragraph (2) of such section, of the 
child’s eligibility for medical assistance under this 
title. 
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‘‘(2) EXTENDED TREATMENT AS TRADITIONAL 
MEDICAID
ELIGIBLE
INDIVIDUAL.—In accordance 
with paragraph (2) of section 305(d) of the Afford-
able Health Care for America Act, in the case of a 
child described in paragraph (1) of such section who 
at the end of the period referred to in such para-
graph is not otherwise covered under acceptable cov-
erage, the child shall be deemed (until such time as 
the child obtains such coverage or the State other-
wise makes a determination of the child’s eligibility 
for medical assistance under its plan under this title 
pursuant to paragraph (1)) to be a Medicaid eligible 
individual described in section 1902(l)(1)(B). 
‘‘(c) DEFINITIONS.—In this section: 
‘‘(1) MEDICAID
ELIGIBLE
INDIVIDUAL.—The 
term ‘Medicaid eligible individual’ means an indi-
vidual who is eligible for medical assistance under 
Medicaid. 
‘‘(2) TRADITIONAL MEDICAID ELIGIBLE INDI-
VIDUAL.—The term ‘traditional Medicaid eligible in-
dividual’ means a Medicaid eligible individual other 
than an individual who is— 
‘‘(A) a Medicaid eligible individual by rea-
son of the application of subclause (VIII) of 
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section 1902(a)(10)(A)(i) of the Social Security 
Act; or 
‘‘(B) a childless adult not described in sec-
tion 1902(a)(10)(A) or (C) of such Act (as in 
effect as of the day before the date of the en-
actment of this Act). 
‘‘(3) NON-TRADITIONAL
MEDICAID
ELIGIBLE 
INDIVIDUAL.—The term ‘non-traditional Medicaid 
eligible individual’ means a Medicaid eligible indi-
vidual who is not a traditional Medicaid eligible indi-
vidual. 
‘‘(4) MEMORANDUM.—The term ‘memorandum’ 
means a Medicaid memorandum of understanding 
under section 305(e)(2) of the Affordable Health 
Care for America Act. 
‘‘(5) Y1.—The term ‘Y1’ has the meaning given 
such term in section 100(c) of the Affordable Health 
Care for America Act.’’. 
(b) CONFORMING AMENDMENTS TO ERROR RATE.— 
(1) Section 1903(u)(1)(D) of the Social Secu-
rity Act (42 U.S.C. 1396b(u)(1)(D)) is amended by 
adding at the end the following new clause: 
‘‘(vi) In determining the amount of erroneous excess 
payments, there shall not be included any erroneous pay-
ments made that are attributable to an error in an eligi-
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bility determination under subtitle C of title II of division 
A of the Affordable Health Care for America Act.’’. 
(2) Section 2105(c)(11) of such Act (42 U.S.C. 
1397ee(c)(11)) is amended by adding at the end the 
following new sentence: ‘‘Clause (vi) of section 
1903(u)(1)(D) shall apply with respect to the appli-
cation of such requirements under this title and title 
XIX.’’. 
SEC. 1703. CHIP AND MEDICAID MAINTENANCE OF ELIGI-
BILITY. 
(a) CHIP MAINTENANCE OF ELIGIBILITY.—Section 
1902 of the Social Security Act (42 U.S.C. 1396a) is 
amended— 
(1) in subsection (a), as amended by section 
1631(b)(1)(D)— 
(A) by striking ‘‘and’’ at the end of para-
graph (73); 
(B) by striking the period at the end of 
paragraph (74) and inserting ‘‘; and’’; and 
(C) by inserting after paragraph (74) the 
following new paragraph: 
‘‘(75) provide for maintenance of effort under 
the State child health plan under title XXI in ac-
cordance with subsection (gg).’’; and 
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(2) by adding at the end the following new sub-
section: 
‘‘(gg) CHIP MAINTENANCE
OF ELIGIBILITY RE-
QUIREMENT.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
as a condition of its State plan under this title under 
subsection (a)(75) and receipt of any Federal finan-
cial assistance under section 1903(a) for calendar 
quarters beginning after the date of the enactment 
of this subsection and before CHIP MOE termi-
nation date specified in paragraph (3), a State shall 
not have in effect eligibility standards, methodolo-
gies, or procedures under its State child health plan 
under title XXI (including any waiver under such 
title or demonstration project under section 1115) 
that are more restrictive than the eligibility stand-
ards, methodologies, or procedures, respectively, 
under such plan (or waiver) as in effect on June 16, 
2009. 
‘‘(2) LIMITATION.—Paragraph (1) shall not be 
construed as preventing a State from imposing a 
limitation described in section 2110(b)(5)(C)(i)(II) 
for a fiscal year in order to limit expenditures under 
its State child health plan under title XXI to those 
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for which Federal financial participation is available 
under section 2105 for the fiscal year. 
‘‘(3) CHIP MOE TERMINATION DATE.—In para-
graph (1), the ‘CHIP MOE termination date’ for a 
State is the date that is the last day of Y1 (as de-
fined in section 100(c) of the Affordable Health 
Care for America Act). 
‘‘(4) CHIP TRANSITION
REPORT.—Not later 
than December 31, 2011, the Secretary shall submit 
to Congress a report— 
‘‘(A) that compares the benefits packages 
offered under an average State child health 
plan under title XXI in 2011 and to the benefit 
standards initially adopted under section 224(b) 
of the Affordable Health Care for America Act 
and for affordability credits under subtitle C of 
title II of division C of such Act; and 
‘‘(B) that includes such recommendations 
as may be necessary to ensure that— 
‘‘(i) such coverage is at least com-
parable to the coverage provided to chil-
dren under such an average State child 
health plan; and 
‘‘(ii) there are procedures in effect for 
the enrollment of CHIP enrollees (includ-
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ing CHIP-eligible pregnant women) at the 
end of Y1 under this title, into a qualified 
health benefits plan offered through the 
Health Insurance Exchange, or into other 
acceptable coverage (as defined for pur-
poses of such Act) without interruption of 
coverage or a written plan of treatment.’’. 
(b) MEDICAID MAINTENANCE OF EFFORT; SIMPLI-
FYING
AND COORDINATING ELIGIBILITY RULES BE-
TWEEN EXCHANGE AND MEDICAID.— 
(1) IN GENERAL.—Section 1903 of such Act 
(42 U.S.C. 1396b) is amended by adding at the end 
the following new subsection: 
‘‘(aa) MAINTENANCE OF MEDICAID EFFORT; SIMPLI-
FYING
AND COORDINATING ELIGIBILITY RULES BE-
TWEEN
HEALTH
INSURANCE
EXCHANGE
AND
MED-
ICAID.— 
‘‘(1) MAINTENANCE OF EFFORT.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a State is not eligible for payment 
under subsection (a) for a calendar quarter be-
ginning after the date of the enactment of this 
subsection if eligibility standards, methodolo-
gies, or procedures under its plan under this 
title (including any waiver under this title or 
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demonstration project under section 1115) that 
are more restrictive than the eligibility stand-
ards, methodologies, or procedures, respectively, 
under such plan (or waiver) as in effect on 
June 16, 2009. The Secretary shall extend such 
a waiver (including the availability of Federal 
financial participation under such waiver) for 
such period as may be required for a State to 
meet the requirement of the previous sentence. 
‘‘(B) EXCEPTION
FOR
CERTAIN
DEM-
ONSTRATION PROJECTS.—In the case of a State 
demonstration project under section 1115 in ef-
fect on June 16, 2009, that permits individuals 
to be eligible solely to receive a premium or 
cost-sharing subsidy for individual or group 
health insurance coverage, effective for coverage 
provided in Y1— 
‘‘(i) the Secretary shall permit the 
State to amend such waiver to apply more 
restrictive eligibility standards, methodolo-
gies, or procedures with respect to such in-
dividuals under such waiver; and 
‘‘(ii) the application of such more re-
strictive, standards, methodologies, or pro-
cedures under such an amendment shall 
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not be considered in violation of the re-
quirement of subparagraph (A). 
‘‘(2) REMOVAL OF ASSET TEST FOR CERTAIN 
ELIGIBILITY CATEGORIES.— 
‘‘(A) IN GENERAL.—A State is not eligible 
for payment under subsection (a) for a calendar 
quarter beginning on or after the first day of 
Y1 (as defined in section 100(c) of the Afford-
able Health Care for America Act), if the State 
applies any asset or resource test in deter-
mining (or redetermining) eligibility of any indi-
vidual on or after such first day under any of 
the following: 
‘‘(i) Subclause (I), (III), (IV), (VI), 
(VIII), (IX), (X), or (XI) of section 
1902(a)(10)(A)(i). 
‘‘(ii) Subclause (II), (IX), (XIV) or 
(XVII) of section 1902(a)(10)(A)(ii). 
‘‘(iii) Section 1931(b). 
‘‘(B) OVERRIDING CONTRARY PROVISIONS; 
REFERENCES.—The provisions of this title that 
prevent the waiver of an asset or resource test 
described in subparagraph (A) are hereby 
waived. 
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‘‘(C) REFERENCES.—Any reference to a 
provision described in a provision in subpara-
graph (A) shall be deemed to be a reference to 
such provision as modified through the applica-
tion of subparagraphs (A) and (B).’’. 
(2) CONFORMING AMENDMENTS.—(A) Section 
1902(a)(10)(A) 
of 
such 
Act 
(42 
U.S.C. 
1396a(a)(10)(A)) is amended, in the matter before 
clause 
(i), 
by 
inserting 
‘‘subject 
to 
section 
1903(aa)(2),’’ after ‘‘(A)’’. 
(B) Section 1931(b)(1) of such Act (42 U.S.C. 
1396u–1(b)(1)) is amended by inserting ‘‘and sec-
tion 1903(aa)(2)’’ after ‘‘and (3)’’. 
(c) STANDARDS FOR BENCHMARK PACKAGES.—Sec-
tion 1937(b) of such Act (42 U.S.C. 1396u–7(b)) is 
amended— 
(1) in each of paragraphs (1) and (2), by in-
serting ‘‘subject to paragraph (5),’’ after ‘‘subsection 
(a)(1),’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(5) MINIMUM STANDARDS.—Effective January 
1, 2013, any benchmark benefit package (or bench-
mark equivalent coverage under paragraph (2)) 
must meet the minimum benefits and cost-sharing 
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standards of a basic plan offered through the Health 
Insurance Exchange.’’. 
(d) REPEAL OF CHIP.—Section 2104(a) of the So-
cial Security Act is amended by inserting at the end the 
following: 
‘‘No funds shall be appropriated or authorized to be 
appropriated under this section for fiscal year 2014 
and subsequent years.’’. 
SEC. 1704. REDUCTION IN MEDICAID DSH. 
(a) REPORT.— 
(1) IN GENERAL.—Not later than January 1, 
2016, the Secretary of Health and Human Services 
(in this title referred to as the ‘‘Secretary’’) shall 
submit to Congress a report concerning the extent to 
which, based upon the impact of the health care re-
forms carried out under division A in reducing the 
number of uninsured individuals, there is a contin-
ued role for Medicaid DSH. In preparing the report, 
the Secretary shall consult with community-based 
health care networks serving low-income bene-
ficiaries. 
(2) MATTERS TO BE INCLUDED.—The report 
shall include the following: 
(A) 
RECOMMENDATIONS.—Recommenda-
tions regarding— 
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(i) the appropriate targeting of Med-
icaid DSH within States; and 
(ii) the distribution of Medicaid DSH 
among the States, taking into account the 
ratio of the amount of DSH funds allo-
cated to a State to the number of unin-
sured individuals in such State. 
(B) SPECIFICATION OF DSH HEALTH RE-
FORM METHODOLOGY.—The DSH Health Re-
form methodology described in paragraph (2) of 
subsection (b) for purposes of implementing the 
requirements of such subsection. 
(3) COORDINATION WITH MEDICARE DSH RE-
PORT.—The Secretary shall coordinate the report 
under this subsection with the report on Medicare 
DSH under section 1112. 
(4) MEDICAID DSH.—In this section, the term 
‘‘Medicaid DSH’’ means adjustments in payments 
under section 1923 of the Social Security Act for in-
patient hospital services furnished by dispropor-
tionate share hospitals. 
(b) MEDICAID DSH REDUCTIONS.— 
(1) REDUCTIONS.— 
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(A) IN GENERAL.—For each of fiscal years 
2017 through 2019 the Secretary shall effect 
the following reductions: 
(i) REDUCTION DSH ALLOTMENTS.— 
The Secretary shall reduce DSH allot-
ments to States in the amount specified 
under the DSH health reform methodology 
under paragraph (2) for the State for the 
fiscal year. 
(ii) REDUCTIONS IN PAYMENTS.—The 
Secretary shall reduce payments to States 
under section 1903(a) of the Social Secu-
rity Act (42 U.S.C. 1396b(a)) for each cal-
endar quarter in the fiscal year, in the 
manner specified in subparagraph (C), in 
an amount equal to 1⁄4 of the DSH allot-
ment reduction under clause (i) for the 
State for the fiscal year. 
(B) AGGREGATE
REDUCTIONS.—The ag-
gregate reductions in DSH allotments for all 
States under subparagraph (A)(i) shall be equal 
to— 
(i) $1,500,000,000 for fiscal year 
2017; 
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(ii) $2,500,000,000 for fiscal year 
2018; and 
(iii) $6,000,000,000 for fiscal year 
2019. 
The Secretary shall distribute such aggregate 
reduction among States in accordance with 
paragraph (2). 
(C) MANNER OF PAYMENT REDUCTION.— 
The amount of the payment reduction under 
subparagraph (A)(ii) for a State for a quarter 
shall be deemed an overpayment to the State 
under title XIX of the Social Security Act to be 
disallowed against the State’s regular quarterly 
draw for all Medicaid spending under section 
1903(d)(2) 
of 
such 
Act 
(42 
U.S.C. 
1396b(d)(2)). Such a disallowance is not sub-
ject to a reconsideration under 1116(d) of such 
Act (42 U.S.C. 1316(d)). 
(D) DEFINITIONS.—In this section: 
(i) STATE.—The term ‘‘State’’ means 
the 50 States and the District of Colum-
bia. 
(ii) DSH 
ALLOTMENT.—The term 
‘‘DSH allotment’’ means, with respect to a 
State for a fiscal year, the allotment made 
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under section 1923(f) of the Social Secu-
rity Act (42 U.S.C. 1396r–4(f)) to the 
State for the fiscal year. 
(2) DSH HEALTH REFORM METHODOLOGY.— 
The Secretary shall carry out paragraph (1) through 
use of a DSH Health Reform methodology issued by 
the Secretary that imposes the largest percentage re-
ductions on the States that— 
(A) have the lowest percentages of unin-
sured individuals (determined on the basis of 
audited hospital cost reports) during the most 
recent year for which such data are available; 
or 
(B) do not target their DSH payments 
on— 
(i) hospitals with high volumes of 
Medicaid inpatients (as defined in section 
1923(b)(1)(A) of the Social Security Act 
(42 U.S.C. 1396r–4(b)(1)(A)); and 
(ii) hospitals that have high levels of 
uncompensated care (excluding bad debt). 
(3) DSH ALLOTMENT PUBLICATIONS.— 
(A) IN GENERAL.—Not later than the pub-
lication deadline specified in subparagraph (B), 
the Secretary shall publish in the Federal Reg-
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‘‘(7) SPECIAL RULE FOR FISCAL YEARS 2017, 
2018, AND
2019.—For each of fiscal years 2017, 
2018, and 2018, the DSH allotments under this 
subsection are subject to reduction under section 
1704(b) of the Affordable Health Care for America 
Act.’’. 
(2) The second sentence of section 1923(b)(4) 
of such Act (42 U.S.C. 1396r–4(b)(4)) is amended 
by inserting before the period the following: ‘‘or to 
affect the authority of the Secretary to issue and im-
plement the DSH Health Reform methodology under 
section 1704(b)(2) of the Affordable Health Care for 
America Act’’. 
(d) DISPROPORTIONATE SHARE HOSPITALS (DSH) 
AND ESSENTIAL ACCESS HOSPITAL (EAH) NON-DIS-
CRIMINATION.— 
(1) IN GENERAL.—Section 1923(d) of the So-
cial Security Act (42 U.S.C. 1396r-4) is amended by 
adding at the end the following new paragraph: 
‘‘(4) No hospital may be defined or deemed as 
a disproportionate share hospital, or as an essential 
access 
hospital 
(for 
purposes 
of 
subsection 
(f)(6)(A)(iv)), under a State plan under this title or 
subsection (b) of this section (including any dem-
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onstration project under section 1115) unless the 
hospital— 
‘‘(A) provides services to beneficiaries 
under this title without discrimination on the 
ground of race, color, national origin, creed, 
source of payment, status as a beneficiary 
under this title, or any other ground unrelated 
to such beneficiary’s need for the services or the 
availability of the needed services in the hos-
pital; and 
‘‘(B) makes arrangements for, and accepts, 
reimbursement under this title for services pro-
vided to eligible beneficiaries under this title.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to expenditures made 
on or after July 1, 2010. 
SEC. 1705. EXPANDED OUTSTATIONING. 
(a) IN GENERAL.—Section 1902(a)(55) of the Social 
Security Act (42 U.S.C. 1396a(a)(55)) is amended by 
striking 
‘‘under 
subsection 
(a)(10)(A)(i)(IV), 
(a)(10)(A)(i)(VI), 
(a)(10)(A)(i)(VII), 
or 
(a)(10)(A)(ii)(IX)’’ and inserting ‘‘(including receipt and 
processing of applications of individuals for affordability 
credits under subtitle C of title II of division A of the Af-
fordable Health Care for America Act pursuant to a Med-
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icaid memorandum of understanding under section 
1943(a)(1))’’. 
(b) EFFECTIVE DATE.—Except as provided in sec-
tion 1790, the amendment made by subsection (a) shall 
apply to services furnished on or after July 1, 2010, with-
out regard to whether or not final regulations to carry out 
such amendment have been promulgated by such date. 
Subtitle B—Prevention 
SEC. 1711. REQUIRED COVERAGE OF PREVENTIVE SERV-
ICES. 
(a) COVERAGE.—Section 1905 of the Social Security 
Act (42 U.S.C. 1396d), as amended by section 
1701(a)(3)(B), is amended— 
(1) in subsection (a)(4)— 
(A) by striking ‘‘and’’ before ‘‘(C)’’; and 
(B) by inserting before the semicolon at 
the end the following: ‘‘; and (D) preventive 
services described in subsection (z)’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(z) PREVENTIVE SERVICES.—The preventive serv-
ices described in this subsection are services not otherwise 
described in subsection (a) or (r) that the Secretary deter-
mines are— 
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‘‘(1)(A) recommended with a grade of A or B 
by the Task Force for Clinical Preventive Services; 
or 
‘‘(B) vaccines recommended for use as appro-
priate by the Director of the Centers for Disease 
Control and Prevention; and 
‘‘(2) appropriate for individuals entitled to med-
ical assistance under this title.’’. 
(b) ELIMINATION OF COST-SHARING.— 
(1) Subsections (a)(2)(D) and (b)(2)(D) of sec-
tion 1916 of such Act (42 U.S.C. 1396o) are each 
amended by inserting ‘‘preventive services described 
in section 1905(z),’’ after ‘‘emergency services (as 
defined by the Secretary),’’. 
(2) Section 1916A(a)(1) of such Act (42 U.S.C. 
1396o–1 (a)(1)) is amended by inserting ‘‘, preven-
tive services described in section 1905(z),’’ after 
‘‘subsection (c)’’. 
(c) CONFORMING AMENDMENT.—Section 1928 of 
such Act (42 U.S.C. 1396s) is amended— 
(1) in subsection (c)(2)(B)(i), by striking ‘‘the 
advisory committee referred to in subsection (e)’’ 
and inserting ‘‘the Director of the Centers for Dis-
ease Control and Prevention’’; 
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(2) in subsection (e), by striking ‘‘Advisory 
Committee’’ and all that follows and inserting ‘‘Di-
rector of the Centers for Disease Control and Pre-
vention.’’; and 
(3) by striking subsection (g). 
(d) EFFECTIVE DATE.—Except as provided in sec-
tion 1790, the amendments made by this section shall 
apply to services furnished on or after July 1, 2010, with-
out regard to whether or not final regulations to carry out 
such amendments have been promulgated by such date. 
SEC. 1712. TOBACCO CESSATION. 
(a) DROPPING TOBACCO CESSATION EXCLUSION 
FROM
COVERED
OUTPATIENT
DRUGS.—Section 
1927(d)(2) of the Social Security Act (42 U.S.C. 1396r– 
8(d)(2)) is amended— 
(1) by striking subparagraph (E); 
(2) in subparagraph (G), by inserting before the 
period at the end the following: ‘‘, except agents ap-
proved by the Food and Drug Administration for 
purposes of promoting, and when used to promote, 
tobacco cessation’’; and 
(3) 
by 
redesignating 
subparagraphs 
(F) 
through (K) as subparagraphs (E) through (J), re-
spectively. 
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(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to drugs and services furnished 
on or after January 1, 2010. 
SEC. 1713. OPTIONAL COVERAGE OF NURSE HOME VISITA-
TION SERVICES. 
(a) IN GENERAL.—Section 1905 of the Social Secu-
rity Act (42 U.S.C. 1396d), as amended by sections 
1701(a)(3)(B) and 1711(a), is amended— 
(1) in subsection (a)— 
(A) in paragraph (27), by striking ‘‘and’’ 
at the end; 
(B) by redesignating paragraph (28) as 
paragraph (29); and 
(C) by inserting after paragraph (27) the 
following new paragraph: 
‘‘(28) nurse home visitation services (as defined 
in subsection (aa)); and’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(aa) The term ‘nurse home visitation services’ 
means home visits by trained nurses to families with a 
first-time pregnant woman, or a child (under 2 years of 
age), who is eligible for medical assistance under this title, 
but only, to the extent determined by the Secretary based 
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upon evidence, that such services are effective in one or 
more of the following: 
‘‘(1) Improving maternal or child health and 
pregnancy outcomes or increasing birth intervals be-
tween pregnancies. 
‘‘(2) Reducing the incidence of child abuse, ne-
glect, and injury, improving family stability (includ-
ing reduction in the incidence of intimate partner vi-
olence), or reducing maternal and child involvement 
in the criminal justice system. 
‘‘(3) Increasing economic self-sufficiency, em-
ployment advancement, school-readiness, and edu-
cational achievement, or reducing dependence on 
public assistance.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to services furnished on or after 
January 1, 2010. 
(c) CONSTRUCTION.—Nothing in the amendments 
made by this section shall be construed as affecting the 
ability of a State under title XIX or XXI of the Social 
Security Act to provide nurse home visitation services as 
part of another class of items and services falling within 
the definition of medical assistance or child health assist-
ance under the respective title, or as an administrative ex-
penditure for which payment is made under section 
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1903(a) or 2105(a) of such Act, respectively, on or after 
the date of the enactment of this Act. 
SEC. 1714. STATE ELIGIBILITY OPTION FOR FAMILY PLAN-
NING SERVICES. 
(a) 
COVERAGE
AS
OPTIONAL
CATEGORICALLY 
NEEDY GROUP.— 
(1) IN
GENERAL.—Section 1902(a)(10)(A)(ii) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1396a(a)(10)(A)(ii)) is amended— 
(A) in subclause (XVIII), by striking ‘‘or’’ 
at the end; 
(B) in subclause (XIX), by adding ‘‘or’’ at 
the end; and 
(C) by adding at the end the following new 
subclause: 
‘‘(XX) who are described in sub-
section (hh) (relating to individuals 
who meet certain income standards);’’. 
(2) GROUP DESCRIBED.—Section 1902 of such 
Act (42 U.S.C. 1396a), as amended by section 1703, 
is amended by adding at the end the following new 
subsection: 
‘‘(hh)(1) Individuals described in this subsection are 
individuals— 
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‘‘(A) whose income does not exceed an in-
come eligibility level established by the State 
that does not exceed the highest income eligi-
bility level established under the State plan 
under this title (or under its State child health 
plan under title XXI) for pregnant women; and 
‘‘(B) who are not pregnant. 
‘‘(2) At the option of a State, individuals described 
in this subsection may include individuals who, had indi-
viduals applied on or before January 1, 2007, would have 
been made eligible pursuant to the standards and proc-
esses imposed by that State for benefits described in 
clause (XV) of the matter following subparagraph (G) of 
section subsection (a)(10) pursuant to a demonstration 
project waiver granted under section 1115. 
‘‘(3) At the option of a State, for purposes of sub-
section (a)(17)(B), in determining eligibility for services 
under this subsection, the State may consider only the in-
come of the applicant or recipient.’’. 
(3) 
LIMITATION
ON
BENEFITS.—Section 
1902(a)(10) of such Act (42 U.S.C. 1396a(a)(10)) 
is amended in the matter following subparagraph 
(G)— 
(A) by striking ‘‘and (XIV)’’ and inserting 
‘‘(XIV)’’; and 
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(B) by inserting ‘‘, and (XV) the medical 
assistance made available to an individual de-
scribed in subsection (hh) shall be limited to 
family planning services and supplies described 
in section 1905(a)(4)(C) including medical di-
agnosis and treatment services that are pro-
vided pursuant to a family planning service in 
a family planning setting’’ after ‘‘cervical can-
cer’’. 
(4) 
CONFORMING
AMENDMENTS.—Section 
1905(a) of such Act (42 U.S.C. 1396d(a)), as 
amended by section 1731(c), is amended in the mat-
ter preceding paragraph (1)— 
(A) in clause (xiii), by striking ‘‘or’’ at the 
end; 
(B) in clause (xiv), by adding ‘‘or’’ at the 
end; and 
(C) by inserting after clause (xiv) the fol-
lowing: 
‘‘(xv) 
individuals 
described 
in 
section 
1902(hh),’’. 
(b) PRESUMPTIVE ELIGIBILITY.— 
(1) IN GENERAL.—Title XIX of the Social Se-
curity Act (42 U.S.C. 1396 et seq.) is amended by 
inserting after section 1920B the following: 
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‘‘PRESUMPTIVE ELIGIBILITY FOR FAMILY PLANNING 
SERVICES 
‘‘SEC. 1920C. (a) STATE OPTION.—State plan ap-
proved under section 1902 may provide for making med-
ical assistance available to an individual described in sec-
tion 1902(hh) (relating to individuals who meet certain 
income eligibility standard) during a presumptive eligi-
bility period. In the case of an individual described in sec-
tion 1902(hh), such medical assistance shall be limited to 
family planning services and supplies described in 
1905(a)(4)(C) and, at the State’s option, medical diag-
nosis and treatment services that are provided in conjunc-
tion with a family planning service in a family planning 
setting. 
‘‘(b) DEFINITIONS.—For purposes of this section: 
‘‘(1) PRESUMPTIVE ELIGIBILITY PERIOD.—The 
term ‘presumptive eligibility period’ means, with re-
spect to an individual described in subsection (a), 
the period that— 
‘‘(A) begins with the date on which a 
qualified entity determines, on the basis of pre-
liminary information, that the individual is de-
scribed in section 1902(hh); and 
‘‘(B) ends with (and includes) the earlier 
of— 
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‘‘(i) the day on which a determination 
is made with respect to the eligibility of 
such individual for services under the State 
plan; or 
‘‘(ii) in the case of such an individual 
who does not file an application by the last 
day of the month following the month dur-
ing which the entity makes the determina-
tion referred to in subparagraph (A), such 
last day. 
‘‘(2) QUALIFIED ENTITY.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the term ‘qualified entity’ means 
any entity that— 
‘‘(i) is eligible for payments under a 
State plan approved under this title; and 
‘‘(ii) is determined by the State agen-
cy to be capable of making determinations 
of the type described in paragraph (1)(A). 
‘‘(B) RULE OF CONSTRUCTION.—Nothing 
in this paragraph shall be construed as pre-
venting a State from limiting the classes of en-
tities that may become qualified entities in 
order to prevent fraud and abuse. 
‘‘(c) ADMINISTRATION.— 
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‘‘(1) IN GENERAL.—The State agency shall pro-
vide qualified entities with— 
‘‘(A) such forms as are necessary for an 
application to be made by an individual de-
scribed in subsection (a) for medical assistance 
under the State plan; and 
‘‘(B) information on how to assist such in-
dividuals in completing and filing such forms. 
‘‘(2) NOTIFICATION REQUIREMENTS.—A quali-
fied 
entity 
that 
determines 
under 
subsection 
(b)(1)(A) that an individual described in subsection 
(a) is presumptively eligible for medical assistance 
under a State plan shall— 
‘‘(A) notify the State agency of the deter-
mination within 5 working days after the date 
on which determination is made; and 
‘‘(B) inform such individual at the time 
the determination is made that an application 
for medical assistance is required to be made by 
not later than the last day of the month fol-
lowing the month during which the determina-
tion is made. 
‘‘(3) 
APPLICATION
FOR
MEDICAL
ASSIST-
ANCE.—In the case of an individual described in 
subsection (a) who is determined by a qualified enti-
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ty to be presumptively eligible for medical assistance 
under a State plan, the individual shall apply for 
medical assistance by not later than the last day of 
the month following the month during which the de-
termination is made. 
‘‘(d) PAYMENT.—Notwithstanding any other provi-
sion of law, medical assistance that— 
‘‘(1) is furnished to an individual described in 
subsection (a)— 
‘‘(A) during a presumptive eligibility pe-
riod; 
‘‘(B) by a entity that is eligible for pay-
ments under the State plan; and 
‘‘(2) is included in the care and services covered 
by the State plan, 
shall be treated as medical assistance provided by such 
plan for purposes of clause (4) of the first sentence of 
section 1905(b).’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 1902(a)(47) of the Social Se-
curity Act (42 U.S.C. 1396a(a)(47)) is amend-
ed by inserting before the semicolon at the end 
the following: ‘‘and provide for making medical 
assistance available to individuals described in 
subsection (a) of section 1920C during a pre-
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sumptive eligibility period in accordance with 
such section’’. 
(B) Section 1903(u)(1)(D)(v) of such Act 
(42 U.S.C. 1396b(u)(1)(D)(v)) is amended— 
(i) by striking ‘‘or for’’ and inserting 
‘‘for’’; and 
(ii) by inserting before the period the 
following: ‘‘, or for medical assistance pro-
vided to an individual described in sub-
section (a) of section 1920C during a pre-
sumptive eligibility period under such sec-
tion’’. 
(c) CLARIFICATION OF COVERAGE OF FAMILY PLAN-
NING SERVICES AND SUPPLIES.—Section 1937(b) of the 
Social Security Act (42 U.S.C. 1396u–7(b)), as amended 
by section 1703(c)(2), is amended by adding at the end 
the following: 
‘‘(6) COVERAGE OF FAMILY PLANNING SERV-
ICES AND SUPPLIES.—Notwithstanding the previous 
provisions of this section, a State may not provide 
for medical assistance through enrollment of an indi-
vidual with benchmark coverage or benchmark-equiv-
alent coverage under this section unless such cov-
erage includes for any individual described in section 
1905(a)(4)(C), medical assistance for family plan-
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ning services and supplies in accordance with such 
section.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section take effect on the date of the enactment of 
this Act and shall apply to items and services furnished 
on or after such date. 
Subtitle C—Access 
SEC. 1721. PAYMENTS TO PRIMARY CARE PRACTITIONERS. 
(a) IN GENERAL.— 
(1) 
FEE-FOR-SERVICE
PAYMENTS.—Section 
1902 of the Social Security Act (42 U.S.C. 1396b)as 
amended by sections 1703(a), 1714(a), 1731(a), and 
1746, is amended— 
(A) in subsection (a)(13)— 
(i) by striking ‘‘and’’ at the end of 
subparagraph (A); 
(ii) by adding ‘‘and’’ at the end of 
subparagraph (B); and 
(iii) by adding at the end the fol-
lowing new subparagraph: 
‘‘(C) payment for primary care services (as 
defined in subsection (kk)(1)) furnished by phy-
sicians (or for services furnished by other 
health care professionals that would be primary 
care services under such section if furnished by 
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a physician) at a rate not less than 80 percent 
of the payment rate that would be applicable if 
the adjustment described in subsection (kk)(2) 
were to apply to such services and physicians or 
professionals (as the case may be) under part 
B of title XVIII for services furnished in 2010, 
90 percent of such adjusted payment rate for 
services and physicians (or professionals) fur-
nished in 2011, or 100 percent of such adjusted 
payment rate for services and physicians (or 
professionals) furnished in 2012 and each sub-
sequent year;’’; and 
(B) by adding at the end the following new 
subsection: 
‘‘(kk) INCREASED PAYMENT
FOR PRIMARY CARE 
SERVICES.—For purposes of subsection (a)(13)(C): 
‘‘(1) PRIMARY CARE SERVICES DEFINED.—The 
term ‘primary care services’ means evaluation and 
management services, without regard to the specialty 
of the physician furnishing the services, that are 
procedure codes (for services covered under title 
XVIII) for services in the category designated Eval-
uation and Management in the Health Care Com-
mon Procedure Coding System (established by the 
Secretary under section 1848(c)(5) as of December 
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31, 2009, and as subsequently modified by the Sec-
retary). 
‘‘(2) ADJUSTMENT.—The adjustment described 
in this paragraph is the substitution of 1.25 percent 
for the update otherwise provided under section 
1848(d)(4) for each year beginning with 2010.’’. 
(2) 
UNDER
MEDICAID
MANAGED
CARE 
PLANS.—Section 1932(f) of such Act (42 U.S.C. 
1396u–2(f)) is amended— 
(A) in the heading, by adding at the end 
the following: ‘‘; ADEQUACY OF PAYMENT FOR 
PRIMARY CARE SERVICES’’; and 
(B) by inserting before the period at the 
end the following: ‘‘and, in the case of primary 
care 
services 
described 
in 
section 
1902(a)(13)(C), consistent with the minimum 
payment rates specified in such section (regard-
less of the manner in which such payments are 
made, including in the form of capitation or 
partial capitation)’’. 
(b) INCREASE
IN
PAYMENT
USING
INCREASED 
FMAP.—Section 1905(y) of the Social Security Act, as 
added by section 1701(a)(3)(B) and as amended by sec-
tion 1701(c)(2), is amended by adding at the end the fol-
lowing: 
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‘‘(3)(A) The portion of the amounts expended 
for medical assistance for services described in sec-
tion 1902(a)(13)(C) furnished on or after January 
1, 2010, that is attributable to the amount by which 
the minimum payment rate required under such sec-
tion (or, by application, section 1932(f)) exceeds the 
payment rate applicable to such services under the 
State plan as of June 16, 2009. 
‘‘(B) Subparagraph (A) shall not be construed 
as preventing the payment of Federal financial par-
ticipation based on the Federal medical assistance 
percentage for amounts in excess of those specified 
under such subparagraph.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to services furnished on or after 
January 1, 2010. 
SEC. 1722. MEDICAL HOME PILOT PROGRAM. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services shall establish under this section a med-
ical home pilot program under which a State may apply 
to the Secretary for approval of a medical home pilot 
project described in subsection (b) (in this section referred 
to as a ‘‘pilot project’’) for the application of the medical 
home concept under title XIX of the Social Security Act. 
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The pilot program shall operate for a period of up to 5 
years. 
(b) PILOT PROJECT DESCRIBED.— 
(1) IN GENERAL.—A pilot project is a project 
that applies one or more of the medical home models 
described in section 1866F(a)(3) of the Social Secu-
rity Act (as inserted by section 1302(a)) or such 
other model as the Secretary may approve, to indi-
viduals (including medically fragile children and 
high-risk pregnant women) who are eligible for med-
ical assistance under title XIX of the Social Security 
Act. The Secretary shall provide for appropriate co-
ordination of the pilot program under this section 
with the medical home pilot program under section 
1866F of such Act. 
(2) LIMITATION.—A pilot project shall be for a 
duration of not more than 5 years. 
(3) CONSIDERATION
FOR
CERTAIN
TECH-
NOLOGIES.—In considering applications for pilots 
projects under this section, the Secretary may ap-
prove a project which tests the effectiveness of appli-
cations and devices, such as wireless patient man-
agement technologies, that are approved by the Food 
and Drug Administration and enable providers and 
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practitioners to communicate directly with their pa-
tients in managing chronic illness. 
(c) ADDITIONAL INCENTIVES.—In the case of a pilot 
project, the Secretary may— 
(1) 
waive 
the 
requirements 
of 
section 
1902(a)(1) of the Social Security Act (relating to 
statewideness) and section 1902(a)(10)(B) of such 
Act (relating to comparability); and 
(2) increase to up to 90 percent (for the first 
2 years of the pilot program) or 75 percent (for the 
next 3 years) the matching percentage for adminis-
trative expenditures (such as those for community 
care workers). 
(d) MEDICALLY FRAGILE CHILDREN.—In the case of 
a model involving medically fragile children, the model 
shall ensure that the patient-centered medical home serv-
ices received by each child, in addition to fulfilling the re-
quirements under 1866F(b)(1) of the Social Security Act, 
provide for continuous involvement and education of the 
parent or caregiver and for assistance to the child in ob-
taining necessary transitional care if a child’s enrollment 
ceases for any reason. 
(e) EVALUATION; REPORT.— 
(1) EVALUATION.—The Secretary, using the 
criteria described in section 1866F(e)(1) of the So-
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cial Security Act (as inserted by section 1123), shall 
conduct an evaluation of the pilot program under 
this section. 
(2) REPORT.—Not later than 60 days after the 
date of completion of the evaluation under para-
graph (1), the Secretary shall submit to Congress 
and make available to the public a report on the 
findings of the evaluation under such paragraph. 
(f) FUNDING.—The additional Federal financial par-
ticipation resulting from the implementation of the pilot 
program under this section may not exceed in the aggre-
gate $1,235,000,000 over the 5-year period of the pro-
gram. 
SEC. 1723. TRANSLATION OR INTERPRETATION SERVICES. 
(a) IN GENERAL.—Section 1903(a)(2)(E) of the So-
cial Security Act (42 U.S.C. 1396b(a)(2)), as added by 
section 201(b)(2)(A) of the Children’s Health Insurance 
Program Reauthorization Act of 2009 (Public Law 111– 
3), is amended by inserting ‘‘and other individuals’’ after 
‘‘children of families’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to payment for translation or 
interpretation services furnished on or after January 1, 
2010. 
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SEC. 1724. OPTIONAL COVERAGE FOR FREESTANDING 
BIRTH CENTER SERVICES. 
(a) IN GENERAL.—Section 1905 of the Social Secu-
rity Act (42 U.S.C. 1396d), as amended by section 
1713(a), is amended— 
(1) in subsection (a)— 
(A) by redesignating paragraph (29) as 
paragraph (30); 
(B) in paragraph (28), by striking at the 
end ‘‘and’’; and 
(C) by inserting after paragraph (28) the 
following new paragraph: 
‘‘(29) freestanding birth center services (as de-
fined in subsection (l)(3)(A)) and other ambulatory 
services that are offered by a freestanding birth cen-
ter (as defined in subsection (l)(3)(B)) and that are 
otherwise included in the plan; and’’; and 
(2) in subsection (l), by adding at the end the 
following new paragraph: 
‘‘(3)(A) The term ‘freestanding birth center services’ 
means services furnished to an individual at a freestanding 
birth center (as defined in subparagraph (B)), including 
by a licensed birth attendant (as defined in subparagraph 
(C)) at such center. 
‘‘(B) The term ‘freestanding birth center’ means a 
health facility— 
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‘‘(i) that is not a hospital; and 
‘‘(ii) where childbirth is planned to occur away 
from the pregnant woman’s residence. 
‘‘(C) The term ‘licensed birth attendant’ means an 
individual who is licensed or registered by the State in-
volved to provide health care at childbirth and who pro-
vides such care within the scope of practice under which 
the individual is legally authorized to perform such care 
under State law (or the State regulatory mechanism pro-
vided by State law), regardless of whether the individual 
is under the supervision of, or associated with, a physician 
or other health care provider. Nothing in this subpara-
graph shall be construed as changing State law require-
ments applicable to a licensed birth attendant.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to items and services furnished on 
or after the date of the enactment of this Act. 
SEC. 1725. INCLUSION OF PUBLIC HEALTH CLINICS UNDER 
THE VACCINES FOR CHILDREN PROGRAM. 
Section 1928(b)(2)(A)(iii)(I) of the Social Security 
Act (42 U.S.C. 1396s(b)(2)(A)(iii)(I)) is amended— 
(1) by striking ‘‘or a rural health clinic’’ and in-
serting ‘‘, a rural health clinic’’; and 
(2) by inserting ‘‘or a public health clinic,’’ 
after ‘‘‘1905(l)(1)),’’. 
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SEC. 1726. REQUIRING COVERAGE OF SERVICES OF PODIA-
TRISTS. 
(a) IN GENERAL.—Section 1905(a)(5)(A) of the So-
cial Security Act (42 U.S.C. 1396d(a)(5)(A)) is amended 
by striking ‘‘section 1861(r)(1)’’ and inserting ‘‘para-
graphs (1) and (3) of section 1861(r)’’. 
(b) EFFECTIVE DATE.—Except as provided in sec-
tion 1790, the amendment made by subsection (a) shall 
apply to services furnished on or after January 1, 2010. 
SEC. 1726A. REQUIRING COVERAGE OF SERVICES OF OP-
TOMETRISTS. 
(a) IN GENERAL.—Section 1905(a)(5) of the Social 
Security Act (42 U.S.C. 1396d(a)(5)) is amended— 
(1) by striking ‘‘and’’ before ‘‘(B)’’; and 
(2) by inserting before the semicolon at the end 
the following: ‘‘, and (C) medical and other health 
services (as defined in section 1861(s)) as authorized 
by State law, furnished by an optometrist (described 
in section 1861(r)(4)) to the extent such services 
may be performed under State law’’. 
(b) EFFECTIVE DATE.—Except as provided in sec-
tion 1790, the amendments made by subsection (a) shall 
take effect 90 days after the date of the enactment of this 
Act and shall apply to services furnished or other actions 
required on or after such date. 
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SEC. 1727. THERAPEUTIC FOSTER CARE. 
(a) RULE OF CONSTRUCTION.—Nothing in this title 
shall prevent or limit a State from covering therapeutic 
foster care for eligible children in out-of-home placements 
under section 1905(a) of the Social Security Act (42 
U.S.C. 1396d(a)). 
(b) THERAPEUTIC FOSTER CARE DEFINED.—For 
purposes of this section, the term ‘‘therapeutic foster 
care’’ means a foster care program that provides— 
(1) to the child— 
(A) structured daily activities that develop, 
improve, monitor, and reinforce age-appropriate 
social, communications, and behavioral skills; 
(B) crisis intervention and crisis support 
services; 
(C) medication monitoring; 
(D) counseling; and 
(E) case management services; and 
(2) specialized training for the foster parent 
and consultation with the foster parent on the man-
agement of children with mental illnesses and re-
lated health and developmental conditions. 
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SEC. 1728. ASSURING ADEQUATE PAYMENT LEVELS FOR 
SERVICES. 
(a) IN GENERAL.—Title XIX of the Social Security 
Act is amended by inserting after section 1925 the fol-
lowing new section: 
‘‘ASSURING ADEQUATE PAYMENT LEVELS FOR SERVICES 
‘‘SEC. 1926. (a) IN GENERAL.—A State plan under 
this title shall not be considered to meet the requirement 
of section 1902(a)(30)(A) for a year (beginning with 
2011) unless, by not later than April 1 before the begin-
ning of such year, the State submits to the Secretary an 
amendment to the plan that specifies the payment rates 
to be used for such services under the plan in such year 
and includes in such submission such additional data as 
will assist the Secretary in evaluating the State’s compli-
ance with such requirement, including data relating to how 
rates established for payments to medicaid managed care 
organizations under sections 1903(m) and 1932 take into 
account such payment rates. 
‘‘(b) SECRETARIAL REVIEW.—The Secretary, by not 
later than 90 days after the date of submission of a plan 
amendment under subsection (a), shall— 
‘‘(1) review each such amendment for compli-
ance 
with 
the 
requirement 
of 
section 
1902(a)(30)(A); and 
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‘‘(2) approve or disapprove each such amend-
ment. 
If the Secretary disapproves such an amendment, the 
State shall immediately submit a revised amendment that 
meets such requirement.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on the date of the enact-
ment of this Act. 
SEC. 
1729. 
PRESERVING 
MEDICAID 
COVERAGE 
FOR 
YOUTHS UPON RELEASE FROM PUBLIC INSTI-
TUTIONS. 
Section 1902(a) of the Social Security Act (42 U.S.C. 
1396a), as amended by section 1631(b) and 1703(a), is 
amended— 
(1) by striking ‘‘and’’ at the end of paragraph 
(74); 
(2) by striking the period at the end of para-
graph (75) and inserting ‘‘; and’’; and 
(3) by inserting after paragraph (75) the fol-
lowing new paragraph: 
‘‘(76) provide that in the case of any youth who 
is 18 years of age or younger, was enrolled for med-
ical assistance under the State plan immediately be-
fore becoming an inmate of a public institution, is 
18 years of age or younger upon release from such 
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institution, and is eligible for such medical assist-
ance under the State plan at the time of release 
from such institution— 
‘‘(A) during the period such youth is incar-
cerated in a public institution, the State shall 
not terminate eligibility for medical assistance 
under the State plan for such youth; 
‘‘(B) during the period such youth is incar-
cerated in a public institution, the State shall 
establish a process that ensures— 
‘‘(i) that the State does not claim fed-
eral financial participation for services that 
are provided to such youth and that are 
excluded under subsection 1905(a)(28)(A); 
and 
‘‘(ii) that the youth receives medical 
assistance for which federal participation is 
available under this title; 
‘‘(C) on or before the date such youth is 
released from such institution, the State shall 
ensure that such youth is enrolled for medical 
assistance under this title, unless and until 
there is a determination that the individual is 
no longer eligible to be so enrolled; and 
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‘‘(D) the State shall ensure that enroll-
ment under subparagraph (C) will be completed 
before such date so that the youth can access 
medical assistance under this title immediately 
upon leaving the institution.’’ 
SEC. 1730. QUALITY MEASURES FOR MATERNITY AND 
ADULT HEALTH SERVICES UNDER MEDICAID 
AND CHIP. 
Title XI of the Social Security Act (42 U.S.C. 1301 
et seq.) is amended by inserting after section 1139A the 
following new section: 
‘‘SEC. 1139B. QUALITY MEASURES FOR MATERNITY AND 
ADULT HEALTH SERVICES UNDER MEDICAID 
AND CHIP. 
‘‘(a) MATERNITY CARE QUALITY MEASURES UNDER 
MEDICAID AND CHIP.— 
‘‘(1) DEVELOPMENT OF MEASURES.—No later 
than January 1, 2011, the Secretary shall develop 
and publish for comment a proposed set of measures 
that accurately describe the quality of maternity 
care provided under State plans under titles XIX 
and XXI. The Secretary shall publish a final rec-
ommended set of such measures no later than July 
1, 2011. 
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‘‘(2) STANDARDIZED REPORTING FORMAT.—No 
later than January 1, 2012, the Secretary shall de-
velop and publish a standardized reporting format 
for maternity care quality measures for use by State 
programs under titles XIX and XXI to collect data 
from managed care entities and providers and prac-
titioners that participate in such programs and to 
report maternity care quality measures to the Sec-
retary. 
‘‘(b) OTHER ADULT HEALTH QUALITY MEASURES 
UNDER MEDICAID.— 
‘‘(1) DEVELOPMENT OF MEASURES.—The Sec-
retary shall develop quality measures that are not 
otherwise developed under section 1192 for services 
received under State plans under title XIX by indi-
viduals who are 21 years of age or older but have 
not attained age 65. The Secretary shall publish 
such quality measures through notice and comment 
rulemaking. 
‘‘(2) STANDARDIZED
REPORTING
FORMAT.— 
The Secretary shall develop and publish a standard-
ized reporting format for quality measures developed 
under paragraph (1) and section 1192 for services 
furnished under State plans under title XIX to indi-
viduals who are 21 years of age or older but have 
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not attained age 65 for use under such plans and 
State plans under title XXI. The format shall enable 
State agencies administering such plans to collect 
data from managed care entities and providers and 
practitioners that participate in such plans and to 
report quality measures to the Secretary. 
‘‘(c) DEVELOPMENT PROCESS.—With respect to the 
development of quality measures under subsections (a) 
and (b)— 
‘‘(1) USE OF QUALIFIED ENTITIES.—The Sec-
retary may enter into agreements with public, non-
profit, or academic institutions with technical exper-
tise in the area of health quality measurement to as-
sist in such development. The Secretary may carry 
out these agreements by contract, grant, or other-
wise. 
‘‘(2) MULTI-STAKEHOLDER
PRE-RULEMAKING 
INPUT.—The Secretary shall obtain the input of 
stakeholders with respect to such quality measures 
using a process similar to that described in section 
1808(d). 
‘‘(3) COORDINATION.—The Secretary shall co-
ordinate the development of such measures under 
such subsections and with the development of child 
health quality measures under section 1139A. 
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‘‘(d) ANNUAL REPORT TO CONGRESS.—No later than 
January 1, 2013, and annually thereafter, the Secretary 
shall report to the Committee on Energy and Commerce 
of the House of Representatives the Committee on Fi-
nance of the Senate regarding— 
‘‘(1) the availability of reliable data relating to 
the quality of maternity care furnished under State 
plans under titles XIX and XXI; 
‘‘(2) the availability of reliable data relating to 
the quality of services furnished under State plans 
under title XIX to adults who are 21 years of age 
or older but have not attained age 65; and 
‘‘(3) recommendations for improving the quality 
of such care and services furnished under such State 
plans. 
‘‘(e) RULE
OF CONSTRUCTION.—Notwithstanding 
any other provision in this section, no quality measure de-
veloped, 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 ne-
cessity of care or the maximum permissible coverage for 
any individual who receives medical assistance under title 
XIX or child health assistance under title XXI. 
‘‘(f) APPROPRIATION.—For purposes of carrying out 
this section, in addition to funds otherwise available, out 
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of any funds in the Treasury not otherwise appropriated, 
there are appropriated $40,000,000 for the 5-fiscal-year 
period beginning with fiscal year 2010. Funds appro-
priated under this subsection shall remain available until 
expended.’’. 
SEC. 1730A. ACCOUNTABLE CARE ORGANIZATION PILOT 
PROGRAM. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services shall establish under this section an ac-
countable care program under which a State may apply 
to the Secretary for approval of an accountable care orga-
nization pilot program described in subsection (b) (in this 
section referred to as a ‘‘pilot program’’) for the applica-
tion of the accountable care organization concept under 
title XIX of the Social Security Act. 
(b) PILOT PROGRAM DESCRIBED.— 
(1) IN GENERAL.—The pilot program described 
in this subsection is a program that applies one or 
more of the accountable care organization models 
described in section 1866E of the Social Security 
Act, as added by section 1301 of this Act. 
(2) LIMITATION.—The pilot program shall op-
erate for a period of not more than 5 years. 
(c) ADDITIONAL INCENTIVES.—In the case of the 
pilot program under this section, the Secretary may— 
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(1) waive the requirements of— 
(A) section 1902(a)(1) of the Social Secu-
rity Act (relating to statewideness); 
(B) section 1902(a)(10)(B) of such Act 
(relating to comparability); and 
(2) increase the matching percentage for ad-
ministrative expenditures up to— 
(A) 90 percent (for the first 2 years of the 
pilot program); and 
(B) 75 percent (for the next 3 years). 
(d) EVALUATION; REPORT.— 
(1) EVALUATION.—The Secretary shall conduct 
an evaluation of the pilot program under this sec-
tion. In conducting such evaluation, the Secretary 
shall use the criteria used under subsection (g)(1) of 
section 1866E of the Social Security Act (as in-
serted by section 1301 of this Act) to evaluate pilot 
programs under such section. 
(2) REPORT.—Not later than 60 days after the 
date of completion of the evaluation under para-
graph (1), the Secretary shall submit to Congress 
and make available to the public a report on the 
findings of the evaluation under such paragraph. 
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SEC. 1730B. FQHC COVERAGE. 
Section 1905(l)(2)(B) of the Social Security Act (42 
U.S.C. 1396d(l)(2)(B)) is amended— 
(1) by striking ‘‘or’’ at the end of clause (iii); 
(2) by striking the semicolon at the end of 
clause (iv) and inserting ‘‘, and’’; and 
(3) by inserting after clause (iv) the following 
new clause: 
‘‘(v) is receiving a grant under section 399Z–1 
of the Public Health Service Act;’’. 
Subtitle D—Coverage 
SEC. 1731. OPTIONAL MEDICAID COVERAGE OF LOW-IN-
COME HIV-INFECTED INDIVIDUALS. 
(a) IN GENERAL.— Section 1902 of the Social Secu-
rity Act (42 U.S.C. 1396a), as amended by section 
1714(a)(1), is amended— 
(1) in subsection (a)(10)(A)(ii)— 
(A) by striking ‘‘or’’ at the end of sub-
clause (XIX); 
(B) by adding ‘‘or’’ at the end of subclause 
(XX); and 
(C) by adding at the end the following: 
‘‘(XXI) who are described in sub-
section (ii) (relating to HIV-infected 
individuals);’’; and 
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(2) by adding at the end, as amended by sec-
tions 1703 and 1714(a), the following: 
‘‘(ii) Individuals described in this subsection are indi-
viduals not described in subsection (a)(10)(A)(i)— 
‘‘(1) who have HIV infection; 
‘‘(2) whose income (as determined under the 
State plan under this title with respect to disabled 
individuals) does not exceed the maximum amount 
of income a disabled individual described in sub-
section (a)(10)(A)(i) may have and obtain medical 
assistance under the plan; and 
‘‘(3) whose resources (as determined under the 
State plan under this title with respect to disabled 
individuals) do not exceed the maximum amount of 
resources a disabled individual described in sub-
section (a)(10)(A)(i) may have and obtain medical 
assistance under the plan.’’. 
(b) ENHANCED MATCH.—The first sentence of sec-
tion 1905(b) of such Act (42 U.S.C. 1396d(b)) is amended 
by striking ‘‘section 1902(a)(10)(A)(ii)(XVIII)’’ and in-
serting 
‘‘subclause 
(XVIII) 
or 
(XXI) 
of 
section 
1902(a)(10)(A)(ii)’’. 
(c) CONFORMING AMENDMENTS.—Section 1905(a) of 
such Act (42 U.S.C. 1396d(a)) is amended, in the matter 
preceding paragraph (1)— 
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(1) by striking ‘‘or’’ at the end of clause (xii); 
(2) by adding ‘‘or’’ at the end of clause (xiii); 
and 
(3) by inserting after clause (xiii) the following: 
‘‘(xiv) 
individuals 
described 
in 
section 
1902(ii),’’. 
(d) EXEMPTION FROM FUNDING LIMITATION FOR 
TERRITORIES.—Section 1108(g) of the Social Security 
Act (42 U.S.C. 1308(g)) is amended by adding at the end 
the following: 
‘‘(5) DISREGARDING MEDICAL ASSISTANCE FOR 
OPTIONAL
LOW-INCOME
HIV-INFECTED
INDIVID-
UALS.—The limitations under subsection (f) and the 
previous provisions of this subsection shall not apply 
to amounts expended for medical assistance for indi-
viduals described in section 1902(ii) who are only el-
igible for such assistance on the basis of section 
1902(a)(10)(A)(ii)(XXI).’’. 
(e) EFFECTIVE DATE; SUNSET.—The amendments 
made by this section shall apply to expenditures for cal-
endar quarters beginning on or after the date of the enact-
ment of this Act, and before January 1, 2013, without 
regard to whether or not final regulations to carry out 
such amendments have been promulgated by such date. 
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SEC. 1732. EXTENDING TRANSITIONAL MEDICAID ASSIST-
ANCE (TMA). 
Sections 1902(e)(1)(B) and 1925(f) of the Social Se-
curity Act (42 U.S.C. 1396a(e)(1)(B), 1396r–6(f)), as 
amended by section 5004(a)(1) of the American Recovery 
and Reinvestment Act of 2009 (Public Law 111–5), are 
each amended by striking ‘‘December 31, 2010’’ and in-
serting ‘‘December 31, 2012’’. 
SEC. 1733. REQUIREMENT OF 12-MONTH CONTINUOUS COV-
ERAGE UNDER CERTAIN CHIP PROGRAMS. 
(a) IN GENERAL.—Section 2102(b) of the Social Se-
curity Act (42 U.S.C. 1397bb(b)) is amended by adding 
at the end the following new paragraph: 
‘‘(6) REQUIREMENT
FOR
12-MONTH
CONTIN-
UOUS ELIGIBILITY.—In the case of a State child 
health plan that provides child health assistance 
under this title through a means other than de-
scribed in section 2101(a)(2), the plan shall provide 
for implementation under this title of the 12-month 
continuous eligibility option described in section 
1902(e)(12) for targeted low-income children whose 
family income is below 200 percent of the poverty 
line.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to determinations (and redeter-
minations) of eligibility made on or after January 1, 2010. 
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SEC. 1734. PREVENTING THE APPLICATION UNDER CHIP OF 
COVERAGE WAITING PERIODS FOR CERTAIN 
CHILDREN. 
(a) IN GENERAL.—Section 2102(b)(1) of the Social 
Security Act (42 U.S.C. 1397bb(b)(1)) is amended— 
(1) in subparagraph (B)— 
(A) in clause (iii), by striking ‘‘and’’ at the 
end; 
(B) in clause (iv), by striking the period at 
the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
clause: 
‘‘(v) may not apply a waiting period 
(including a waiting period to carry out 
paragraph (3)(C)) in the case of a child 
described in subparagraph (C).’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(C) DESCRIPTION
OF
CHILDREN
NOT 
SUBJECT TO WAITING PERIOD.—For purposes 
of this paragraph, a child described in this sub-
paragraph is a child who, on the date an appli-
cation is submitted for such child for child 
health assistance under this title, meets any of 
the following requirements: 
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‘‘(i) INFANTS
AND
TODDLERS.—The 
child is under two years of age. 
‘‘(ii) LOSS OF GROUP HEALTH PLAN 
COVERAGE.—The child previously had pri-
vate health insurance coverage through a 
group health plan or health insurance cov-
erage offered through an employer and lost 
such coverage due to— 
‘‘(I) termination of an individ-
ual’s employment; 
‘‘(II) a reduction in hours that 
an individual works for an employer; 
‘‘(III) elimination of an individ-
ual’s retiree health benefits; or 
‘‘(IV) termination of an individ-
ual’s group health plan or health in-
surance coverage offered through an 
employer. 
‘‘(iii) UNAFFORDABLE PRIVATE COV-
ERAGE.— 
‘‘(I) IN GENERAL.—The family of 
the child demonstrates that the cost 
of health insurance coverage (includ-
ing the cost of premiums, co-pay-
ments, deductibles, and other cost 
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sharing) for such family exceeds 10 
percent of the income of such family. 
‘‘(II) DETERMINATION OF FAM-
ILY
INCOME.—For purposes of sub-
clause (I), family income shall be de-
termined in the same manner speci-
fied by the State for purposes of de-
termining a child’s eligibility for child 
health assistance under this title.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as of the date that is 90 days 
after the date of the enactment of this Act. 
SEC. 1735. ADULT DAY HEALTH CARE SERVICES. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services shall not— 
(1) withhold, suspend, disallow, or otherwise 
deny Federal financial participation under section 
1903(a) of the Social Security Act (42 U.S.C. 
1396b(a)) for the provision of adult day health care 
services, day activity and health services, or adult 
medical day care services, as defined under a State 
Medicaid plan approved during or before 1994, dur-
ing such period if such services are provided con-
sistent with such definition and the requirements of 
such plan; or 
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(2) withdraw Federal approval of any such 
State plan or part thereof regarding the provision of 
such services (by regulation or otherwise). 
(b) EFFECTIVE DATE.—Subsection (a) shall apply 
with respect to services provided on or after October 1, 
2008. 
SEC. 1736. MEDICAID COVERAGE FOR CITIZENS OF FREELY 
ASSOCIATED STATES. 
(a) IN GENERAL.—Section 402(b)(2) of the Personal 
Responsibility and Work Opportunity Reconciliation Act 
of 1996 (8 U.S.C. 1612(b)(2)) is amended by adding at 
the end the following: 
‘‘(G) MEDICAID EXCEPTION FOR CITIZENS 
OF FREELY ASSOCIATED STATES.—With respect 
to eligibility for benefits for the designated Fed-
eral program defined in paragraph (3)(C) (re-
lating to the Medicaid program), section 401(a) 
and paragraph (1) shall not apply to any indi-
vidual who lawfully resides in 1 of the 50 States 
or the District of Columbia in accordance with 
the Compacts of Free Association between the 
Government of the United States and the Gov-
ernments of the Federated States of Micro-
nesia, the Republic of the Marshall Islands, and 
the Republic of Palau.’’. 
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(b) EXCEPTION TO 5-YEAR LIMITED ELIGIBILITY.— 
Section 403(d) of such Act (8 U.S.C. 1613(d)) is amend-
ed— 
(1) in paragraph (1), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (2), by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(3) 
an 
individual 
described 
in 
section 
402(b)(2)(G), but only with respect to the des-
ignated 
Federal 
program 
defined 
in 
section 
402(b)(3)(C).’’. 
(c) DEFINITION
OF QUALIFIED ALIEN.—Section 
431(b) of such Act (8 U.S.C. 1641(b)) is amended— 
(1) in paragraph (6), by striking ‘‘; or’’ at the 
end and inserting a comma; 
(2) in paragraph (7), by striking the period at 
the end and inserting ‘‘, or’’; and 
(3) by adding at the end the following: 
‘‘(8) an individual who lawfully resides in the 
United States in accordance with a Compact of Free 
Association referred to in section 402(b)(2)(G), but 
only with respect to the designated Federal program 
defined in section 402(b)(3)(C) (relating to the Med-
icaid program).’’. 
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SEC. 1737. CONTINUING REQUIREMENT OF MEDICAID COV-
ERAGE 
OF 
NONEMERGENCY 
TRANSPOR-
TATION TO MEDICALLY NECESSARY SERV-
ICES. 
(a) REQUIREMENT.—Section 1902(a)(10) of the So-
cial Security Act (42 U.S.C. 1396a(a)(10)) is amended— 
(1) in subparagraph (A), in the matter pre-
ceding clause (i), by striking ‘‘and (21)’’ and insert-
ing ‘‘, (21), and (30)’’; and 
(2) in subparagraph (C)(iv), by striking ‘‘and 
(17)’’ and inserting ‘‘, (17), and (30)’’. 
(b) DESCRIPTION OF SERVICES.—Section 1905(a) of 
such Act (42 U.S.C. 1395d(a)), as amended by sections 
1713(a)(1) and 1724(a)(1), is amended— 
(1) in paragraph (29), by striking ‘‘and’’ at the 
end; 
(2) by redesignating paragraph (30) as para-
graph (31) and by striking the comma at the end 
and inserting a semicolon; and 
(3) by inserting after paragraph (29) the fol-
lowing new paragraph: 
‘‘(30) nonemergency transportation to medically 
necessary services, consistent with the requirement 
of section 431.53 of title 42, Code of Federal Regu-
lations, as in effect as of June 1, 2008; and’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act and shall apply to transportation on or after 
such date. 
SEC. 1738. STATE OPTION TO DISREGARD CERTAIN INCOME 
IN PROVIDING CONTINUED MEDICAID COV-
ERAGE FOR CERTAIN INDIVIDUALS WITH EX-
TREMELY HIGH PRESCRIPTION COSTS. 
Section 1902(e) of the Social Security Act (42 U.S.C. 
1396b(e)), as amended by section 203(a) of the Children’s 
Health Insurance Program Reauthorization Act of 2009 
(Public Law 111–3), is amended by adding at the end the 
following new paragraph: 
‘‘(14)(A) At the option of the State, in the case of 
an individual with extremely high prescription drug costs 
described in subparagraph (B) who has been determined 
(without the application of this paragraph) to be eligible 
for medical assistance under this title, the State may, in 
redetermining the individual’s eligibility for medical assist-
ance under this title, disregard any family income of the 
individual to the extent such income is less than an 
amount that is specified by the State and does not exceed 
the amount specified in subparagraph (C), or, if greater, 
income equal to the cost of the orphan drugs described 
in subparagraph (B)(iii). 
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‘‘(B) An individual with extremely high prescription 
drug costs described in this subparagraph for a 12-month 
period is an individual— 
‘‘(i) who is covered under health insurance or a 
health benefits plan that has a maximum lifetime 
limit of not less than $1,000,000 which includes all 
prescription drug coverage; 
‘‘(ii) who has exhausted all available prescrip-
tion drug coverage under the plan as of the begin-
ning of such period; 
‘‘(iii) who incurs (or is reasonably expected to 
incur) on an annual basis during the period costs for 
orphan drugs in excess of the amount specified in 
subparagraph (C) for the period; and 
‘‘(iv) whose annual family income (determined 
without regard to this paragraph) as of the begin-
ning of the period does not exceed 75 percent of the 
amount incurred for such drugs (as described in 
clause (iii)). 
‘‘(C) The amount specified in this subparagraph for 
a 12-month period beginning in— 
‘‘(i) 2009 or 2010, is $200,000; or 
‘‘(ii) a subsequent year, is the amount specified 
in clause (i) (or this subparagraph) for the previous 
year increased by the annual rate of increase in the 
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medical care component of the consumer price index 
(U.S. city average) for the 12-month period ending 
in August of the previous year. 
Any amount computed under clause (ii) that is not a mul-
tiple of $1,000 shall be rounded to the nearest multiple 
of $1,000. 
‘‘(D) In applying this paragraph, amounts incurred 
for prescription drugs for cosmetic purposes shall not be 
taken into account. 
‘‘(E) With respect to an individual described in sub-
paragraph (A), notwithstanding section 1916, the State 
plan— 
‘‘(i) shall provide for the application of cost- 
sharing that is at least nominal as determined under 
section 1916; and 
‘‘(ii) may provide, consistent with section 
1916A, for such additional cost-sharing as does not 
exceed a maximum level of cost-sharing that is speci-
fied by the Secretary and is adjusted by the Sec-
retary on an annual basis. 
‘‘(F) A State electing the option under this para-
graph shall provide for a determination on an individual’s 
application for continued medical assistance under this 
title within 30 days of the date the application if filed with 
the State. 
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‘‘(G) In this paragraph: 
‘‘(i) The term ‘orphan drugs’ means prescrip-
tion drugs designated under section 526 of the Fed-
eral Food, Drug, and Cosmetic Act (21 U.S.C. 
360bb) as a drug for a rare disease or condition. 
‘‘(ii) The term ‘health benefits plan’ includes 
coverage under a plan offered under a State high 
risk pool.’’. 
SEC. 1739. PROVISIONS RELATING TO COMMUNITY LIVING 
ASSISTANCE 
SERVICES 
AND 
SUPPORTS 
(CLASS). 
(a) COORDINATION WITH CLASS PROVISIONS.— 
Section 1902(a) of the Social Security Act (42 U.S.C. 
1396a(a)), as amended by sections 1631(b), 1703(a), 
1729, 1753, 1757(a), 1759(a), 1783(a), and 1907(b), is 
amended— 
(1) in paragraph (80), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (81), by striking the period 
and inserting ‘‘; and’’; and 
(3) by inserting after paragraph (81) the fol-
lowing: 
‘‘(82) provide that the State will comply with 
such regulations regarding the application of pri-
mary and secondary payor rules with respect to indi-
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viduals who are eligible for medical assistance under 
this title and are eligible beneficiaries under the 
CLASS program established under title XXXII of 
the Public Health Service Act as the Secretary shall 
establish.’’. 
(b) ASSURANCE
OF ADEQUATE INFRASTRUCTURE 
FOR THE PROVISION OF PERSONAL CARE ATTENDANT 
WORKERS.—Section 1902(a) of such Act (42 U.S.C. 
1396a(a)), as amended by subsection (a), is amended— 
(1) in paragraph (81), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (82), by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by inserting after paragraph (82), the fol-
lowing: 
‘‘(83) provide that, not later than 2 years after 
the date of enactment of this paragraph, each State 
shall— 
‘‘(A) assess the extent to which entities 
such as providers of home care, home health 
services, home and community service providers, 
public authorities created to provide personal 
care services to individuals eligible for medical 
assistance under the State plan, and nonprofit 
organizations, are serving or have the capacity 
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to serve as fiscal agents for, employers of, and 
providers of employment-related benefits for, 
personal care attendant workers who provide 
personal care services to individuals receiving 
benefits under the CLASS program established 
under title XXXII of the Public Health Service 
Act, including in rural and underserved areas; 
‘‘(B) designate or create such entities to 
serve as fiscal agents for, employers of, and 
providers of employment-related benefits for, 
such workers to ensure an adequate supply of 
the workers for individuals receiving benefits 
under the CLASS program, including in rural 
and underserved areas; and 
‘‘(C) ensure that the designation or cre-
ation of such entities will not negatively alter or 
impede existing programs, models, methods, or 
administration of service delivery that provide 
for consumer controlled or self-directed home 
and community services and further ensure that 
such entities will not impede the ability of indi-
viduals to direct and control their home and 
community services, including the ability to se-
lect, manage, dismiss, co-employ, or employ 
such workers or inhibit such individuals from 
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relying on family members for the provision of 
personal care services.’’. 
(c) INCLUSION OF INFORMATION ON SUPPLEMENTAL 
COVERAGE
IN
THE NATIONAL CLEARINGHOUSE
FOR 
LONG-TERM CARE INFORMATION; EXTENSION OF FUND-
ING.—Section 6021(d) of the Deficit Reduction Act of 
2005 (42 U.S.C. 1396p note) is amended— 
(1) in paragraph (2)(A)— 
(A) in clause (ii), by striking ‘‘and’’ at the 
end; 
(B) in clause (iii), by striking the period at 
the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(iv) include information regarding 
the CLASS program established under 
title XXXII of the Public Health Service 
Act.’’; and 
(2) in paragraph (3)— 
(A) by striking ‘‘2010’’ and inserting 
‘‘2015’’; and 
(B) by adding at the end the following: ‘‘In 
addition to the amount appropriated under the 
previous sentence, there are authorized to be 
appropriated to carry out this subsection, 
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$7,000,000 for each of fiscal years 2011, 2012, 
and 2013.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section take effect on January 1, 2011. 
Subtitle E—Financing 
SEC. 1741. PAYMENTS TO PHARMACISTS. 
(a) PHARMACY REIMBURSEMENT LIMITS.— 
(1) IN GENERAL.—Section 1927(e) of the So-
cial Security Act (42 U.S.C. 1396r–8(e)) is amend-
ed— 
(A) by striking paragraph (5) and insert-
ing the following: 
‘‘(5) USE OF AMP IN UPPER PAYMENT LIM-
ITS.—The Secretary shall calculate the Federal 
upper reimbursement limit established under para-
graph (4) as 130 percent of the weighted average 
(determined on the basis of manufacturer utiliza-
tion) of monthly average manufacturer prices. Noth-
ing in the previous sentence shall be construed as 
preventing the Secretary from performing such cal-
culation using a smoothing process in order to re-
duce significant variations from month to month as 
a result of rebates, discounts, and other pricing 
practices, such as in the manner such a process is 
used by the Secretary in determining the average 
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sales price of a drug or biological under section 
1847A.’’ 
(2) 
DEFINITION
OF
AMP.—Section 
1927(k)(1)(B) of such Act (42 U.S.C. 1396r– 
8(k)(1)(B)) is amended— 
(B) in the heading, by striking ‘‘EX-
TENDED
TO
WHOLESALERS’’ and inserting 
‘‘AND OTHER PAYMENTS’’; and 
(C) by striking ‘‘regard to’’ and all that 
follows through the period and inserting the fol-
lowing: ‘‘regard to— 
‘‘(i) customary prompt pay discounts 
extended to wholesalers; 
‘‘(ii) bona fide service fees paid by 
manufacturers; 
‘‘(iii) reimbursement by manufactur-
ers for recalled, damaged, expired, or oth-
erwise unsalable returned goods, including 
reimbursement for the cost of the goods 
and any reimbursement of costs associated 
with return goods handling and processing, 
reverse logistics, and drug destruction; 
‘‘(iv) sales directly to, or rebates, dis-
counts, or other price concessions provided 
to, pharmacy benefit managers, managed 
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care organizations, health maintenance or-
ganizations, insurers, mail order phar-
macies that are not open to all members of 
the public, or long term care providers, 
provided that these rebates, discounts, or 
price concessions are not passed through to 
retail pharmacies; 
‘‘(v) sales directly to, or rebates, dis-
counts, or other price concessions provided 
to, hospitals, clinics, and physicians, unless 
the drug is an inhalation, infusion, or 
injectable drug, or unless the Secretary de-
termines, as allowed for in Agency admin-
istrative procedures, that it is necessary to 
include such sales, rebates, discounts, and 
price concessions in order to obtain an ac-
curate AMP for the drug. Such a deter-
mination shall not be subject to judicial re-
view; or 
‘‘(vi) rebates, discounts, and other 
price concessions required to be provided 
under agreements under subsections (f) 
and (g) of section 1860D–2(f).’’. 
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(3) MANUFACTURER
REPORTING
REQUIRE-
MENTS.—Section 1927(b)(3)(A) of such Act (42 
U.S.C. 1396r–8(b)(3)(A)) is amended— 
(A) in clause (ii), by striking ‘‘and’’ at the 
end; 
(B) by striking the period at the end of 
clause (iii) and inserting ‘‘; and’’; and 
(C) by inserting after clause (iii) the fol-
lowing new clause: 
‘‘(iv) not later than 30 days after the 
last day of each month of a rebate period 
under the agreement, on the manufactur-
er’s total number of units that are used to 
calculate the monthly average manufac-
turer price for each covered outpatient 
drug.’’. 
(4) AUTHORITY
TO
PROMULGATE
REGULA-
TION.—The Secretary of Health and Human Serv-
ices may promulgate regulations to clarify the re-
quirements for upper payment limits and for the de-
termination of the average manufacturer price in an 
expedited manner. Such regulations may become ef-
fective on an interim final basis, pending oppor-
tunity for public comment. 
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(5) PHARMACY
REIMBURSEMENTS
THROUGH 
DECEMBER 31, 2010.—The specific upper limit under 
section 447.332 of title 42, Code of Federal Regula-
tions (as in effect on December 31, 2006) applicable 
to payments made by a State for multiple source 
drugs under a State Medicaid plan shall continue to 
apply through December 31, 2010, for purposes of 
the availability of Federal financial participation for 
such payments. 
(b) DISCLOSURE OF PRICE INFORMATION TO THE 
PUBLIC.—Section 1927(b)(3) of such Act (42 U.S.C. 
1396r–8(b)(3)) is amended— 
(1) in subparagraph (A)— 
(A) in clause (i), in the matter preceding 
subclause (I), by inserting ‘‘month of a’’ after 
‘‘each’’; and 
(B) in the last sentence, by striking ‘‘and 
shall,’’ and all that follows up to the period; 
and 
(2) in subparagraph (D)(v), by inserting 
‘‘weighted’’ before ‘‘average manufacturer prices’’. 
SEC. 1742. PRESCRIPTION DRUG REBATES. 
(a) ADDITIONAL REBATE FOR NEW FORMULATIONS 
OF EXISTING DRUGS.— 
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(1) IN
GENERAL.—Section 1927(c)(2) of the 
Social Security Act (42 U.S.C. 1396r–8(c)(2)) is 
amended by adding at the end the following new 
subparagraph: 
‘‘(C) TREATMENT
OF
NEW
FORMULA-
TIONS.—In the case of a drug that is a line ex-
tension of a single source drug or an innovator 
multiple source drug that is an oral solid dos-
age form, the rebate obligation with respect to 
such drug under this section shall be the 
amount computed under this section for such 
new drug or, if greater, the product of— 
‘‘(i) the average manufacturer price of 
the line extension of a single source drug 
or an innovator multiple source drug that 
is an oral solid dosage form; 
‘‘(ii) the highest additional rebate 
(calculated as a percentage of average 
manufacturer price) under this section for 
any strength of the original single source 
drug or innovator multiple source drug; 
and 
‘‘(iii) the total number of units of 
each dosage form and strength of the line 
extension product paid for under the State 
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plan in the rebate period (as reported by 
the State). 
In this subparagraph, the term ‘line extension’ 
means, with respect to a drug, a new formula-
tion of the drug, such as an extended release 
formulation.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to drugs dispensed 
after December 31, 2009. 
(b) INCREASE MINIMUM REBATE PERCENTAGE FOR 
SINGLE SOURCE DRUGS.— 
(1) IN GENERAL.—Section 1927(c)(1)(B)(i) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1396r– 
8(c)(1)(B)(i)) is amended— 
(A) in subclause (IV), by striking ‘‘and’’ at 
the end; 
(B) in subclause (V)— 
(i) by inserting ‘‘and before January 
1, 2010’’ after ‘‘December 31, 1995,’’; and 
(ii) by striking the period at the end 
and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subclause: 
‘‘(VI) after December 31, 2009, 
is 23.1 percent.’’. 
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(2) RECAPTURE OF TOTAL SAVINGS DUE TO IN-
CREASE.—Section 1927(b)(1) of such Act is amend-
ed by adding at the end the following new subpara-
graph: 
‘‘(C) SPECIAL RULE FOR INCREASED MIN-
IMUM REBATE PERCENTAGE.— 
‘‘(i) IN GENERAL.—In addition to the 
amounts applied as a reduction under sub-
paragraph (B), for rebate periods begin-
ning on or after January 1, 2010, during 
a fiscal year, the Secretary shall reduce 
payments to a State under section 1903(a) 
in the manner specified in clause (ii), in an 
amount equal to the product of— 
‘‘(I) 100 percent minus the Fed-
eral medical assistance percentage ap-
plicable to the rebate period for the 
State; and 
‘‘(II) the amounts received by the 
State under such subparagraph that 
are attributable (as estimated by the 
Secretary based on utilization and 
other data) to the increase in the min-
imum rebate percentage effected by 
the amendments made by section 
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1742(b)(1) of the Affordable Health 
Care for America Act, taking into ac-
count the additional drugs included 
under the amendments made by sec-
tion 1743 of such Act. 
The Secretary shall adjust such payment 
reduction for a calendar quarter to the ex-
tent the Secretary determines, based upon 
subsequent utilization and other data, that 
the reduction for such quarter was greater 
or less than the amount of payment reduc-
tion that should have been made. 
‘‘(ii) MANNER OF PAYMENT REDUC-
TION.—The amount of the payment reduc-
tion under clause (i) for a State for a 
quarter shall be deemed an overpayment to 
the State under this title to be disallowed 
against the State’s regular quarterly draw 
for all Medicaid spending under section 
1903(d)(2). Such a disallowance is not 
subject 
to 
a 
reconsideration 
under 
1116(d).’’. 
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SEC. 1743. EXTENSION OF PRESCRIPTION DRUG DIS-
COUNTS TO ENROLLEES OF MEDICAID MAN-
AGED CARE ORGANIZATIONS. 
(a) IN GENERAL.—Section 1903(m)(2)(A) of the So-
cial Security Act (42 U.S.C. 1396b(m)(2)(A)) is amend-
ed— 
(1) in clause (xi), by striking ‘‘and’’ at the end; 
(2) in clause (xii), by striking the period at the 
end and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(xiii) such contract provides that the entity 
shall report to the State such information, on such 
timely and periodic basis as specified by the Sec-
retary, as the State may require in order to include, 
in the information submitted by the State to a man-
ufacturer under section 1927(b)(2)(A) and to the 
Secretary under section 1927(b)(2)(C), information 
on covered outpatient drugs dispensed to individuals 
eligible for medical assistance who are enrolled with 
the entity and for which the entity is responsible for 
coverage of such drugs under this subsection.’’. 
(b) CONFORMING AMENDMENTS.—Section 1927 of 
such Act (42 U.S.C. 1396r-8) is amended—— 
(1) in the first sentence of subsection (b)(1)(A), 
by inserting before the period at the end the fol-
lowing: ‘‘, including such drugs dispensed to individ-
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uals enrolled with a medicaid managed care organi-
zation if the organization is responsible for coverage 
of such drugs’’; 
(2) in subsection (b)(2), by adding at the end 
the following new subparagraph: 
‘‘(C) REPORTING ON MMCO DRUGS.—On a 
quarterly basis, each State shall report to the 
Secretary the total amount of rebates in dollars 
received from pharmacy manufacturers for 
drugs provided to individuals enrolled with 
Medicaid managed care organizations that con-
tract under section 1903(m) and such other in-
formation as the Secretary may require to carry 
out paragraph (1)(C) with respect to such re-
bates.’’; and 
(3) in subsection (j)— 
(A) in the heading by striking ‘‘EXEMP-
TION’’ and inserting ‘‘SPECIAL RULES’’; and 
(B) in paragraph (1), by striking ‘‘are not 
subject to the requirements of this section’’ and 
inserting ‘‘are subject to the requirements of 
this section unless such drugs are subject to 
discounts under section 340B of the Public 
Health Service Act’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section take effect on January 1, 2010, and shall 
apply to drugs dispensed on or after such date, without 
regard to whether or not final regulations to carry out 
such amendments have been promulgated by such date. 
SEC. 1744. PAYMENTS FOR GRADUATE MEDICAL EDU-
CATION. 
(a) IN GENERAL.—Section 1905 of the Social Secu-
rity Act (42 U.S.C. 1396d), as amended by sections 
1701(a)(3)(B), 1711(a), and 1713(a), is amended by add-
ing at the end the following new subsection: 
‘‘(bb) PAYMENT
FOR GRADUATE MEDICAL EDU-
CATION.— 
‘‘(1) IN GENERAL.—The term ‘medical assist-
ance’ includes payment for costs of graduate medical 
education consistent with this subsection, whether 
provided in or outside of a hospital. 
‘‘(2) SUBMISSION OF INFORMATION.—For pur-
poses 
of 
paragraph 
(1) 
and 
section 
1902(a)(13)(A)(v), payment for such costs is not 
consistent with this subsection unless— 
‘‘(A) the State submits to the Secretary, in 
a timely manner and on an annual basis speci-
fied by the Secretary, information on total pay-
ments for graduate medical education and how 
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such payments are being used for graduate 
medical education, including— 
‘‘(i) the institutions and programs eli-
gible for receiving the funding; 
‘‘(ii) the manner in which such pay-
ments are calculated; 
‘‘(iii) the types and fields of education 
being supported; 
‘‘(iv) the workforce or other goals to 
which the funding is being applied; 
‘‘(v) State progress in meeting such 
goals; and 
‘‘(vi) such other information as the 
Secretary determines will assist in carrying 
out paragraphs (3) and (4); and 
‘‘(B) such expenditures are made con-
sistent with such goals and requirements as are 
established under paragraph (4). 
‘‘(3) REVIEW OF INFORMATION.—The Secretary 
shall make the information submitted under para-
graph (2) available to the Advisory Committee on 
Health Workforce Evaluation and Assessment (es-
tablished under section 2261 of the Public Health 
Service Act). The Secretary and the Advisory Com-
mittee shall independently review the information 
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submitted under paragraph (2), taking into account 
State and local workforce needs. 
‘‘(4) SPECIFICATION OF GOALS AND REQUIRE-
MENTS.—The Secretary shall specify by rule, ini-
tially published by not later than December 31, 
2011— 
‘‘(A) program goals for the use of funds 
described in paragraph (1), taking into account 
recommendations of the such Advisory Com-
mittee and the goals for approved medical resi-
dency training programs described in section 
1886(h)(1)(B); and 
‘‘(B) requirements for use of such funds 
consistent with such goals. 
Such rule may be effective on an interim basis pend-
ing revision after an opportunity for public com-
ment.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
1902(a)(13)(A) of such Act (42 U.S.C. 1396a(a)(13)(A)), 
as amended by section 1721(a)(1)(A), is amended— 
(1) by striking ‘‘and’’ at the end of clause (iii); 
(2) by striking the semicolon in clause (iv) and 
inserting ‘‘, and’’; and 
(3) by adding at the end the following new 
clause: 
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SEC. 1783. ASSURING TRANSPARENCY OF INFORMATION. 
(a) IN GENERAL.—Section 1902(a) of the Social Se-
curity Act (42 U.S.C. 1396a(a)), as amended by sections 
1631(b), 1703(a), 1729, 1753, 1757(a), 1759(a), and 
1907(b), is amended— 
(1) by striking ‘‘and’’ at the end of paragraph 
(79); 
(2) by striking the period at the end of para-
graph (80) and inserting ‘‘; and’’; and 
(3) by inserting after paragraph (80) the fol-
lowing new paragraph: 
‘‘(81) provide that the State will establish and 
maintain laws, in accordance with the requirements 
of section 1921A, to require disclosure of informa-
tion on hospital charges and quality and to make 
such information available to the public and the Sec-
retary.’’; and 
(4) by inserting after section 1921 the following 
new section: 
‘‘HOSPITAL PRICE TRANSPARENCY 
‘‘SEC. 1921A. (a) IN GENERAL.—The requirements 
referred to in section 1902(a)(81) are that the laws of a 
State must— 
‘‘(1) require reporting to the State (or its 
agent) by each hospital located therein, of informa-
tion on,— 
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