H. R. 3963 
One Hundred Tenth Congress 
of the 
United States of America 
AT THE FIRST SESSION 
Begun and held at the City of Washington on Thursday, 
the fourth day of January, two thousand and seven 
An Act 
To amend title XXI of the Social Security Act to extend and improve the Children’s 
Health Insurance Program, and for other purposes. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; 
REFERENCES; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as ‘‘Children’s Health 
Insurance Program Reauthorization Act of 2007’’. 
(b) AMENDMENTS TO SOCIAL SECURITY ACT.—Except as other-
wise specifically provided, whenever in this Act an amendment 
is expressed in terms of an amendment to or repeal of a section 
or other provision, the reference shall be considered to be made 
to that section or other provision of the Social Security Act. 
(c) REFERENCES TO CHIP; MEDICAID; SECRETARY.—In this Act: 
(1) CHIP.—The term ‘‘CHIP’’ means the State Children’s 
Health Insurance Program established under title XXI of the 
Social Security Act (42 U.S.C. 1397aa et seq.). 
(2) MEDICAID.—The term ‘‘Medicaid’’ means the program 
for medical assistance established under title XIX of the Social 
Security Act (42 U.S.C. 1396 et seq.). 
(3) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 
of Health and Human Services. 
(d) TABLE OF CONTENTS.—The table of contents of this Act 
is as follows: 
Sec. 1. Short title; amendments to Social Security Act; references; table of contents. 
Sec. 2. Purpose. 
Sec. 3. General effective date; exception for State legislation; contingent effective 
date; reliance on law. 
TITLE I—FINANCING 
Subtitle A—Funding 
Sec. 101. Extension of CHIP. 
Sec. 102. Allotments for States and territories for fiscal years 2008 through 2012. 
Sec. 103. Child Enrollment Contingency Fund. 
Sec. 104. CHIP performance bonus payment to offset additional enrollment costs 
resulting from enrollment and retention efforts. 
Sec. 105. Two-year initial availability of CHIP allotments. 
Sec. 106. Making permanent redistribution of unused fiscal year 2005 allotments to 
address State funding shortfalls; conforming extension of qualifying 
State authority; redistribution of unused allotments for subsequent fis-
cal years. 
Sec. 107. Option for qualifying States to receive the enhanced portion of the CHIP 
matching rate for Medicaid coverage of certain children. 
Sec. 108. One-time appropriation. 
Sec. 109. Improving funding for the territories under CHIP and Medicaid.
H. R. 3963—2 
Subtitle B—Focus on Low-Income Children and Pregnant Women 
Sec. 111. State option to cover low-income pregnant women under CHIP through 
a State plan amendment. 
Sec. 112. Phase-out of coverage for nonpregnant childless adults under CHIP; con-
ditions for coverage of parents. 
Sec. 113. Elimination of counting Medicaid child presumptive eligibility costs 
against title XXI allotment. 
Sec. 114. Denial of payments for coverage of children with effective family income 
that exceeds 300 percent of the poverty line. 
Sec. 115. State authority under Medicaid. 
Sec. 116. Preventing substitution of CHIP coverage for private coverage. 
TITLE II—OUTREACH AND ENROLLMENT 
Subtitle A—Outreach and Enrollment Activities 
Sec. 201. Grants and enhanced administrative funding for outreach and enroll-
ment. 
Sec. 202. Increased outreach and enrollment of Indians. 
Sec. 203. State option to rely on findings from an Express Lane agency to conduct 
simplified eligibility determinations. 
Subtitle B—Reducing Barriers to Enrollment 
Sec. 211. Verification of declaration of citizenship or nationality for purposes of eli-
gibility for Medicaid and CHIP. 
Sec. 212. Reducing administrative barriers to enrollment. 
Sec. 213. Model of Interstate coordinated enrollment and coverage process. 
TITLE III—REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE 
Subtitle A—Additional State Option for Providing Premium Assistance 
Sec. 301. Additional State option for providing premium assistance. 
Sec. 302. Outreach, education, and enrollment assistance. 
Subtitle B—Coordinating Premium Assistance With Private Coverage 
Sec. 311. Special enrollment period under group health plans in case of termination 
of Medicaid or CHIP coverage or eligibility for assistance in purchase of 
employment-based coverage; coordination of coverage. 
TITLE IV—STRENGTHENING QUALITY OF CARE AND HEALTH OUTCOMES 
Sec. 401. Child health quality improvement activities for children enrolled in Med-
icaid or CHIP. 
Sec. 402. Improved availability of public information regarding enrollment of chil-
dren in CHIP and Medicaid. 
Sec. 403. Application of certain managed care quality safeguards to CHIP. 
TITLE V—IMPROVING ACCESS TO BENEFITS 
Sec. 501. Dental benefits. 
Sec. 502. Mental health parity in CHIP plans. 
Sec. 503. Application of prospective payment system for services provided by Feder-
ally-qualified health centers and rural health clinics. 
Sec. 504. Premium grace period. 
Sec. 505. Demonstration projects relating to diabetes prevention. 
Sec. 506. Clarification of coverage of services provided through school-based health 
centers. 
TITLE VI—PROGRAM INTEGRITY AND OTHER MISCELLANEOUS 
PROVISIONS 
Subtitle A—Program Integrity and Data Collection 
Sec. 601. Payment error rate measurement (‘‘PERM’’). 
Sec. 602. Improving data collection. 
Sec. 603. Updated Federal evaluation of CHIP. 
Sec. 604. Access to records for IG and GAO audits and evaluations. 
Sec. 605. No Federal funding for illegal aliens; disallowance for unauthorized ex-
penditures. 
Subtitle B—Miscellaneous Health Provisions 
Sec. 611. Deficit Reduction Act technical corrections. 
Sec. 612. References to title XXI. 
Sec. 613. Prohibiting initiation of new health opportunity account demonstration 
programs.
H. R. 3963—3 
Sec. 614. County Medicaid health insuring organizations; GAO report on Medicaid 
managed care payment rates. 
Sec. 615. Adjustment in computation of Medicaid FMAP to disregard an extraor-
dinary employer pension contribution. 
Sec. 616. Moratorium on certain payment restrictions. 
Sec. 617. Medicaid DSH allotments for Tennessee and Hawaii. 
Sec. 618. Clarification treatment of regional medical center. 
Sec. 619. Extension of SSI web-based asset demonstration project to the Medicaid 
program. 
Subtitle C—Other Provisions 
Sec. 621. Support for injured servicemembers. 
Sec. 622. Outreach regarding health insurance options available to children. 
Sec. 623. Sense of Senate regarding access to affordable and meaningful health in-
surance coverage. 
TITLE VII—REVENUE PROVISIONS 
Sec. 701. Increase in excise tax rate on tobacco products. 
Sec. 702. Administrative improvements. 
Sec. 703. Time for payment of corporate estimated taxes. 
SEC. 2. PURPOSE. 
It is the purpose of this Act to provide dependable and stable 
funding for children’s health insurance under titles XXI and XIX 
of the Social Security Act in order to enroll all six million uninsured 
children who are eligible, but not enrolled, for coverage today 
through such titles. 
SEC. 3. GENERAL EFFECTIVE DATE; EXCEPTION FOR STATE LEGISLA-
TION; CONTINGENT EFFECTIVE DATE; RELIANCE ON LAW. 
(a) GENERAL EFFECTIVE DATE.—Unless otherwise provided in 
this Act, subject to subsections (b) through (d), this Act (and the 
amendments made by this Act) shall take effect on October 1, 
2007, and shall apply to child health assistance and medical assist-
ance provided on or after that date. 
(b) EXCEPTION FOR STATE LEGISLATION.—In the case of a State 
plan under title XIX or State child health plan under XXI of 
the Social Security Act, which the Secretary of Health and Human 
Services determines requires State legislation in order for the 
respective plan to meet one or more additional requirements 
imposed by amendments made by this Act, the respective plan 
shall not be regarded as failing to comply with the requirements 
of such title solely on the basis of its failure to meet such an 
additional requirement before the first day of the first calendar 
quarter beginning after the close of the first regular session of 
the State legislature that begins after the date of enactment of 
this Act. For purposes of the previous sentence, in the case of 
a State that has a 2-year legislative session, each year of the 
session shall be considered to be a separate regular session of 
the State legislature. 
(c) CONTINGENT EFFECTIVE DATE
FOR CHIP FUNDING
FOR 
FISCAL YEAR 2008.—Notwithstanding any other provision of law, 
if funds are appropriated under any law (other than this Act) 
to provide allotments to States under CHIP for all (or any portion) 
of fiscal year 2008— 
(1) any amounts that are so appropriated that are not 
so allotted and obligated before the date of the enactment 
of this Act are rescinded; and 
(2) any amount provided for CHIP allotments to a State 
under this Act (and the amendments made by this Act) for 
such fiscal year shall be reduced by the amount of such appro-
priations so allotted and obligated before such date.
H. R. 3963—4 
(d) RELIANCE
ON LAW.—With respect to amendments made 
by this Act (other than title VII) that become effective as of a 
date— 
(1) such amendments are effective as of such date whether 
or not regulations implementing such amendments have been 
issued; and 
(2) Federal financial participation for medical assistance 
or child health assistance furnished under title XIX or XXI, 
respectively, of the Social Security Act on or after such date 
by a State in good faith reliance on such amendments before 
the date of promulgation of final regulations, if any, to carry 
out such amendments (or before the date of guidance, if any, 
regarding the implementation of such amendments) shall not 
be denied on the basis of the State’s failure to comply with 
such regulations or guidance. 
TITLE I—FINANCING 
Subtitle A—Funding 
SEC. 101. EXTENSION OF CHIP. 
Section 2104(a) (42 U.S.C. 1397dd(a)) is amended— 
(1) in paragraph (9), by striking ‘‘and’’ at the end; 
(2) in paragraph (10), by striking the period at the end 
and inserting a semicolon; and 
(3) by adding at the end the following new paragraphs: 
‘‘(11) for fiscal year 2008, $9,125,000,000; 
‘‘(12) for fiscal year 2009, $10,675,000,000; 
‘‘(13) for fiscal year 2010, $11,850,000,000; 
‘‘(14) for fiscal year 2011, $13,750,000,000; and 
‘‘(15) for fiscal year 2012, for purposes of making 2 semi- 
annual allotments— 
‘‘(A) $1,150,000,000 for the period beginning on October 
1, 2011, and ending on March 31, 2012, and 
‘‘(B) $1,150,000,000 for the period beginning on April 
1, 2012, and ending on September 30, 2012.’’. 
SEC. 102. ALLOTMENTS FOR STATES AND TERRITORIES FOR FISCAL 
YEARS 2008 THROUGH 2012. 
Section 2104 (42 U.S.C. 1397dd) is amended— 
(1) in subsection (b)(1), by striking ‘‘subsection (d)’’ and 
inserting ‘‘subsections (d) and (i)’’; 
(2) in subsection (c)(1), by striking ‘‘subsection (d)’’ and 
inserting ‘‘subsections (d) and (i)(4)’’; and 
(3) by adding at the end the following new subsection: 
‘‘(i) ALLOTMENTS
FOR FISCAL YEARS 2008 THROUGH 2012.— 
‘‘(1) FOR FISCAL YEAR 2008.— 
‘‘(A) FOR
THE
STATES
AND
THE
DISTRICT
OF 
COLUMBIA.—Subject to the succeeding provisions of this 
paragraph and paragraph (4), the Secretary shall allot 
for fiscal year 2008 from the amount made available under 
subsection (a)(11), to each of the 50 States and the District 
of Columbia 110 percent of the highest of the following 
amounts for such State or District:
H. R. 3963—5 
‘‘(i) The total Federal payments to the State under 
this title for fiscal year 2007, multiplied by the allot-
ment increase factor determined under paragraph (5) 
for fiscal year 2008. 
‘‘(ii) The Federal share of the amount allotted to 
the State for fiscal year 2007 under subsection (b), 
multiplied by the allotment increase factor determined 
under paragraph (5) for fiscal year 2008. 
‘‘(iii) Only in the case of— 
‘‘(I) a State that received a payment, redis-
tribution, or allotment under paragraph (1), (2), 
or (4) of subsection (h), the amount of the projected 
total Federal payments to the State under this 
title for fiscal year 2007, as determined on the 
basis of the November 2006 estimates certified 
by the State to the Secretary; 
‘‘(II) a State whose projected total Federal pay-
ments to the State under this title for fiscal year 
2007, as determined on the basis of the May 2006 
estimates certified by the State to the Secretary, 
were at least $95,000,000 but not more than 
$96,000,000 higher than the projected total Fed-
eral payments to the State under this title for 
fiscal year 2007 on the basis of the November 
2006 estimates, the amount of the projected total 
Federal payments to the State under this title 
for fiscal year 2007 on the basis of the May 2006 
estimates; or 
‘‘(III) a State whose projected total Federal 
payments under this title for fiscal year 2007, 
as determined on the basis of the November 2006 
estimates certified by the State to the Secretary, 
exceeded all amounts available to the State for 
expenditure for fiscal year 2007 (including any 
amounts paid, allotted, or redistributed to the 
State in prior fiscal years), the amount of the 
projected total Federal payments to the State 
under this title for fiscal year 2007, as determined 
on the basis of the November 2006 estimates cer-
tified by the State to the Secretary, 
multiplied by the allotment increase factor determined 
under paragraph (5) for fiscal year 2008. 
‘‘(iv) The projected total Federal payments to the 
State under this title for fiscal year 2008, as deter-
mined on the basis of the August 2007 projections 
certified by the State to the Secretary by not later 
than September 30, 2007. 
‘‘(B) FOR
THE
COMMONWEALTHS
AND
TERRITORIES.— 
Subject to the succeeding provisions of this paragraph and 
paragraph (4), the Secretary shall allot for fiscal year 2008 
from the amount made available under subsection (a)(11) 
to each of the commonwealths and territories described 
in subsection (c)(3) an amount equal to the highest amount 
of Federal payments to the commonwealth or territory 
under this title for any fiscal year occurring during the 
period of fiscal years 1998 through 2007, multiplied by 
the allotment increase factor determined under paragraph
H. R. 3963—6 
(5) for fiscal year 2008, except that subparagraph (B) 
thereof shall be applied by substituting ‘the United States’ 
for ‘the State’. 
‘‘(C) DEADLINE
AND
DATA
FOR
DETERMINING
FISCAL 
YEAR 2008 ALLOTMENTS.—In computing the amounts under 
subparagraphs (A) and (B) that determine the allotments 
to States for fiscal year 2008, the Secretary shall use the 
most recent data available to the Secretary before the 
start of that fiscal year. The Secretary may adjust such 
amounts and allotments, as necessary, on the basis of 
the expenditure data for the prior year reported by States 
on CMS Form 64 or CMS Form 21 not later than November 
30, 2007, but in no case shall the Secretary adjust the 
allotments provided under subparagraph (A) or (B) for fiscal 
year 2008 after December 31, 2007. 
‘‘(D) ADJUSTMENT FOR QUALIFYING STATES.—In the case 
of a qualifying State described in paragraph (2) of section 
2105(g), the Secretary shall permit the State to submit 
revised projection described in subparagraph (A)(iv) in 
order to take into account changes in such projections 
attributable to the application of paragraph (4) of such 
section. 
‘‘(2) FOR FISCAL YEARS 2009 THROUGH 2011.— 
‘‘(A) IN GENERAL.—Subject to paragraphs (4) and (6), 
from the amount made available under paragraphs (12) 
through (14) of subsection (a) for each of fiscal years 2009 
through 2011, respectively, the Secretary shall compute 
a State allotment for each State (including the District 
of Columbia and each commonwealth and territory) for 
each such fiscal year as follows: 
‘‘(i) GROWTH
FACTOR
UPDATE
FOR
FISCAL
YEAR 
2009.—For fiscal year 2009, the allotment of the State 
is equal to the sum of— 
‘‘(I) the amount of the State allotment under 
paragraph (1) for fiscal year 2008; and 
‘‘(II) the amount of any payments made to 
the State under subsection (j) for fiscal year 2008, 
multiplied by the allotment increase factor under para-
graph (5) for fiscal year 2009. 
‘‘(ii) REBASING IN FISCAL YEAR 2010.—For fiscal year 
2010, the allotment of the State is equal to the Federal 
payments to the State that are attributable to (and 
countable towards) the total amount of allotments 
available under this section to the State in fiscal year 
2009 (including payments made to the State under 
subsection (j) for fiscal year 2009 as well as amounts 
redistributed to the State in fiscal year 2009), multi-
plied by the allotment increase factor under paragraph 
(5) for fiscal year 2010. 
‘‘(iii) GROWTH
FACTOR
UPDATE
FOR
FISCAL
YEAR 
2011.—For fiscal year 2011, the allotment of the State 
is equal to the sum of— 
‘‘(I) the amount of the State allotment under 
clause (ii) for fiscal year 2010; and 
‘‘(II) the amount of any payments made to 
the State under subsection (j) for fiscal year 2010,
H. R. 3963—7 
multiplied by the allotment increase factor under para-
graph (5) for fiscal year 2011. 
‘‘(3) FOR FISCAL YEAR 2012.— 
‘‘(A) FIRST HALF.—Subject to paragraphs (4) and (6), 
from the amount made available under subparagraph (A) 
of paragraph (15) of subsection (a) for the semi-annual 
period described in such paragraph, increased by the 
amount of the appropriation for such period under section 
108 of the Children’s Health Insurance Program Reauthor-
ization Act of 2007, the Secretary shall compute a State 
allotment for each State (including the District of Columbia 
and each commonwealth and territory) for such semi- 
annual period in an amount equal to the first half ratio 
(described in subparagraph (D)) of the amount described 
in subparagraph (C). 
‘‘(B) SECOND HALF.—Subject to paragraphs (4) and (6), 
from the amount made available under subparagraph (B) 
of paragraph (15) of subsection (a) for the semi-annual 
period described in such paragraph, the Secretary shall 
compute a State allotment for each State (including the 
District of Columbia and each commonwealth and territory) 
for such semi-annual period in an amount equal to the 
amount made available under such subparagraph, multi-
plied by the ratio of— 
‘‘(i) the amount of the allotment to such State 
under subparagraph (A); to 
‘‘(ii) the total of the amount of all of the allotments 
made available under such subparagraph. 
‘‘(C) FULL YEAR AMOUNT BASED ON REBASED AMOUNT.— 
The amount described in this subparagraph for a State 
is equal to the Federal payments to the State that are 
attributable to (and countable towards) the total amount 
of allotments available under this section to the State 
in fiscal year 2011 (including payments made to the State 
under subsection (j) for fiscal year 2011 as well as amounts 
redistributed to the State in fiscal year 2011), multiplied 
by the allotment increase factor under paragraph (5) for 
fiscal year 2012. 
‘‘(D) FIRST HALF RATIO.—The first half ratio described 
in this subparagraph is the ratio of— 
‘‘(i) the sum of— 
‘‘(I) the amount made available under sub-
section (a)(15)(A); and 
‘‘(II) the amount of the appropriation for such 
period under section 108 of the Children’s Health 
Insurance Program Reauthorization Act of 2007; 
to 
‘‘(ii) the sum of the— 
‘‘(I) amount described in clause (i); and 
‘‘(II) the amount made available under sub-
section (a)(15)(B). 
‘‘(4) PRORATION RULE.—If, after the application of this sub-
section without regard to this paragraph, the sum of the allot-
ments determined under paragraph (1), (2), or (3) for a fiscal 
year (or, in the case of fiscal year 2012, for a semi-annual 
period in such fiscal year) exceeds the amount available under 
subsection (a) for such fiscal year or period, the Secretary
H. R. 3963—8 
shall reduce each allotment for any State under such paragraph 
for such fiscal year or period on a proportional basis. 
‘‘(5) ALLOTMENT INCREASE FACTOR.—The allotment increase 
factor under this paragraph for a fiscal year is equal to the 
product of the following: 
‘‘(A) PER CAPITA HEALTH CARE GROWTH FACTOR.—1 plus 
the percentage increase in the projected per capita amount 
of National Health Expenditures from the calendar year 
in which the previous fiscal year ends to the calendar 
year in which the fiscal year involved ends, as most recently 
published by the Secretary before the beginning of the 
fiscal year. 
‘‘(B) CHILD POPULATION GROWTH FACTOR.—1 plus the 
percentage increase (if any) in the population of children 
in the State from July 1 in the previous fiscal year to 
July 1 in the fiscal year involved, as determined by the 
Secretary based on the most recent published estimates 
of the Bureau of the Census before the beginning of the 
fiscal year involved, plus 1 percentage point. 
‘‘(6) INCREASE IN ALLOTMENT TO ACCOUNT FOR APPROVED 
PROGRAM EXPANSIONS.—In the case of one of the 50 States 
or the District of Columbia that— 
‘‘(A) has submitted to the Secretary, and has approved 
by the Secretary, a State plan amendment or waiver 
request relating to an expansion of eligibility for children 
or benefits under this title that becomes effective for a 
fiscal year (beginning with fiscal year 2009 and ending 
with fiscal year 2012); and 
‘‘(B) has submitted to the Secretary, before the August 
31 preceding the beginning of the fiscal year, a request 
for an expansion allotment adjustment under this para-
graph for such fiscal year that specifies— 
‘‘(i) the additional expenditures that are attrib-
utable to the eligibility or benefit expansion provided 
under the amendment or waiver described in subpara-
graph (A), as certified by the State and submitted 
to the Secretary by not later than August 31 preceding 
the beginning of the fiscal year; and 
‘‘(ii) the extent to which such additional expendi-
tures are projected to exceed the allotment of the State 
or District for the year, 
subject to paragraph (4), the amount of the allotment of the 
State or District under this subsection for such fiscal year 
shall be increased by the excess amount described in subpara-
graph (B)(i). A State or District may only obtain an increase 
under this paragraph for an allotment for fiscal year 2009 
or fiscal year 2011. 
‘‘(7) AVAILABILITY OF AMOUNTS FOR SEMI-ANNUAL PERIODS 
IN FISCAL YEAR 2012.—Each semi-annual allotment made under 
paragraph (3) for a period in fiscal year 2012 shall remain 
available for expenditure under this title for periods after the 
end of such fiscal year in the same manner as if the allotment 
had been made available for the entire fiscal year.’’. 
SEC. 103. CHILD ENROLLMENT CONTINGENCY FUND. 
Section 2104 (42 U.S.C. 1397dd), as amended by section 102, 
is amended by adding at the end the following new subsection:
H. R. 3963—9 
‘‘(j) CHILD ENROLLMENT CONTINGENCY FUND.— 
‘‘(1) ESTABLISHMENT.—There is hereby established in the 
Treasury of the United States a fund which shall be known 
as the ‘Child Enrollment Contingency Fund’ (in this subsection 
referred to as the ‘Fund’). Amounts in the Fund shall be avail-
able without further appropriations for payments under this 
subsection. 
‘‘(2) DEPOSITS INTO FUND.— 
‘‘(A) INITIAL AND SUBSEQUENT APPROPRIATIONS.—Sub-
ject to subparagraphs (B) and (D), out of any money in 
the Treasury of the United States not otherwise appro-
priated, there are appropriated to the Fund— 
‘‘(i) for fiscal year 2008, an amount equal to 20 
percent of the amount made available under paragraph 
(11) of subsection (a) for the fiscal year; and 
‘‘(ii) for each of fiscal years 2009 through 2011 
(and for each of the semi-annual allotment periods 
for fiscal year 2012), such sums as are necessary for 
making payments to eligible States for such fiscal year 
or period, but not in excess of the aggregate cap 
described in subparagraph (B). 
‘‘(B) AGGREGATE CAP.—The total amount available for 
payment from the Fund for each of fiscal years 2009 
through 2011 (and for each of the semi-annual allotment 
periods for fiscal year 2012), taking into account deposits 
made under subparagraph (C), shall not exceed 20 percent 
of the amount made available under subsection (a) for 
the fiscal year or period. 
‘‘(C) INVESTMENT
OF
FUND.—The Secretary of the 
Treasury shall invest, in interest bearing securities of the 
United States, such currently available portions of the 
Fund as are not immediately required for payments from 
the Fund. The income derived from these investments con-
stitutes a part of the Fund. 
‘‘(D) AVAILABILITY OF EXCESS FUNDS FOR PERFORMANCE 
BONUSES.—Any amounts in excess of the aggregate cap 
described in subparagraph (B) for a fiscal year or period 
shall be made available for purposes of carrying out section 
2105(a)(3) for any succeeding fiscal year and the Secretary 
of the Treasury shall reduce the amount in the Fund by 
the amount so made available. 
‘‘(3) CHILD ENROLLMENT CONTINGENCY FUND PAYMENTS.— 
‘‘(A) IN GENERAL.—If a State’s expenditures under this 
title in fiscal year 2008, fiscal year 2009, fiscal year 2010, 
fiscal year 2011, or a semi-annual allotment period for 
fiscal year 2012, exceed the total amount of allotments 
available under this section to the State in the fiscal year 
or period (determined without regard to any redistribution 
it receives under subsection (f) that is available for expendi-
ture during such fiscal year or period, but including any 
carryover from a previous fiscal year) and if the average 
monthly unduplicated number of children enrolled under 
the State plan under this title (including children receiving 
health care coverage through funds under this title pursu-
ant to a waiver under section 1115) during such fiscal 
year or period exceeds its target average number of such 
enrollees (as determined under subparagraph (B)) for that
H. R. 3963—10 
fiscal year or period, subject to subparagraph (D), the Sec-
retary shall pay to the State from the Fund an amount 
equal to the product of— 
‘‘(i) the amount by which such average monthly 
caseload exceeds such target number of enrollees; and 
‘‘(ii) the projected per capita expenditures under 
the State child health plan (as determined under 
subparagraph (C) for the fiscal year), multiplied by 
the enhanced FMAP (as defined in section 2105(b)) 
for the State and fiscal year involved (or in which 
the period occurs). 
‘‘(B) TARGET AVERAGE NUMBER OF CHILD ENROLLEES.— 
In this paragraph, the target average number of child 
enrollees for a State— 
‘‘(i) for fiscal year 2008 is equal to the monthly 
average unduplicated number of children enrolled in 
the State child health plan under this title (including 
such children receiving health care coverage through 
funds under this title pursuant to a waiver under 
section 1115) during fiscal year 2007 increased by the 
population growth for children in that State for the 
year ending on June 30, 2006 (as estimated by the 
Bureau of the Census) plus 1 percentage point; or 
‘‘(ii) for a subsequent fiscal year (or semi-annual 
period occurring in a fiscal year) is equal to the target 
average number of child enrollees for the State for 
the previous fiscal year increased by the child popu-
lation growth factor described in subsection (i)(5)(B) 
for the State for the prior fiscal year. 
‘‘(C) PROJECTED PER CAPITA EXPENDITURES.—For pur-
poses of subparagraph (A)(ii), the projected per capita 
expenditures under a State child health plan— 
‘‘(i) for fiscal year 2008 is equal to the average 
per capita expenditures (including both State and Fed-
eral financial participation) under such plan for the 
targeted low-income children counted in the average 
monthly caseload for purposes of this paragraph during 
fiscal year 2007, increased by the annual percentage 
increase in the projected per capita amount of National 
Health Expenditures (as estimated by the Secretary) 
for 2008; or 
‘‘(ii) for a subsequent fiscal year (or semi-annual 
period occurring in a fiscal year) is equal to the pro-
jected per capita expenditures under such plan for 
the previous fiscal year (as determined under clause 
(i) or this clause) increased by the annual percentage 
increase in the projected per capita amount of National 
Health Expenditures (as estimated by the Secretary) 
for the year in which such subsequent fiscal year ends. 
‘‘(D) PRORATION RULE.—If the amounts available for 
payment from the Fund for a fiscal year or period are 
less than the total amount of payments determined under 
subparagraph (A) for the fiscal year or period, the amount 
to be paid under such subparagraph to each eligible State 
shall be reduced proportionally. 
‘‘(E) TIMELY
PAYMENT; 
RECONCILIATION.—Payment 
under this paragraph for a fiscal year or period shall be
H. R. 3963—11 
made before the end of the fiscal year or period based 
upon the most recent data for expenditures and enrollment 
and the provisions of subsection (e) of section 2105 shall 
apply to payments under this subsection in the same 
manner as they apply to payments under such section. 
‘‘(F) CONTINUED
REPORTING.—For purposes of this 
paragraph and subsection (f), the State shall submit to 
the Secretary the State’s projected Federal expenditures, 
even if the amount of such expenditures exceeds the total 
amount of allotments available to the State in such fiscal 
year or period. 
‘‘(G) APPLICATION
TO
COMMONWEALTHS
AND
TERRI-
TORIES.—No payment shall be made under this paragraph 
to a commonwealth or territory described in subsection 
(c)(3) until such time as the Secretary determines that 
there are in effect methods, satisfactory to the Secretary, 
for the collection and reporting of reliable data regarding 
the enrollment of children described in subparagraphs (A) 
and (B) in order to accurately determine the common-
wealth’s or territory’s eligibility for, and amount of pay-
ment, under this paragraph.’’. 
SEC. 104. CHIP PERFORMANCE BONUS PAYMENT TO OFFSET ADDI-
TIONAL ENROLLMENT COSTS RESULTING FROM ENROLL-
MENT AND RETENTION EFFORTS. 
Section 2105(a) (42 U.S.C. 1397ee(a)) is amended by adding 
at the end the following new paragraphs: 
‘‘(3) PERFORMANCE BONUS PAYMENT TO OFFSET ADDITIONAL 
MEDICAID AND CHIP CHILD ENROLLMENT COSTS RESULTING FROM 
ENROLLMENT AND RETENTION EFFORTS.— 
‘‘(A) IN GENERAL.—In addition to the payments made 
under paragraph (1), for each fiscal year (beginning with 
fiscal year 2008 and ending with fiscal year 2012), the 
Secretary shall pay from amounts made available under 
subparagraph (E), to each State that meets the condition 
under paragraph (4) for the fiscal year, an amount equal 
to the amount described in subparagraph (B) for the State 
and fiscal year. The payment under this paragraph shall 
be made, to a State for a fiscal year, as a single payment 
not later than the last day of the first calendar quarter 
of the following fiscal year. Payments made under this 
paragraph may only be used to reduce the number of 
low-income children who do not have health insurance 
coverage in the State. 
‘‘(B) AMOUNT
FOR
ABOVE
BASELINE
MEDICAID
CHILD 
ENROLLMENT
COSTS.—Subject to subparagraph (E), the 
amount described in this subparagraph for a State for 
a fiscal year is equal to the sum of the following amounts: 
‘‘(i) 
FIRST
TIER
ABOVE
BASELINE
MEDICAID 
ENROLLEES.—An amount equal to the number of first 
tier above baseline child enrollees (as determined 
under subparagraph (C)(i)) under title XIX for the 
State and fiscal year, multiplied by 15 percent of the 
projected per capita State Medicaid expenditures (as 
determined under subparagraph (D)) for the State and 
fiscal year under title XIX.
H. R. 3963—12 
‘‘(ii) SECOND
TIER
ABOVE
BASELINE
MEDICAID 
ENROLLEES.—An amount equal to the number of second 
tier above baseline child enrollees (as determined 
under subparagraph (C)(ii)) under title XIX for the 
State and fiscal year, multiplied by 62.5 percent of 
the projected per capita State Medicaid expenditures 
(as determined under subparagraph (D)) for the State 
and fiscal year under title XIX. 
‘‘(C) NUMBER OF FIRST AND SECOND TIER ABOVE BASE-
LINE
CHILD
ENROLLEES; 
BASELINE
NUMBER
OF
CHILD 
ENROLLEES.—For purposes of this paragraph: 
‘‘(i) 
FIRST
TIER
ABOVE
BASELINE
CHILD 
ENROLLEES.—The number of first tier above baseline 
child enrollees for a State for a fiscal year under title 
XIX is equal to the number (if any, as determined 
by the Secretary) by which— 
‘‘(I) the monthly average unduplicated number 
of qualifying children (as defined in subparagraph 
(F)) enrolled during the fiscal year under the State 
plan under title XIX; exceeds 
‘‘(II) 
the 
baseline 
number 
of 
enrollees 
described in clause (iii) for the State and fiscal 
year under title XIX; 
but not to exceed 3 percent of the baseline number 
of enrollees described in subclause (II). 
‘‘(ii) 
SECOND
TIER
ABOVE
BASELINE
CHILD 
ENROLLEES.—The number of second tier above baseline 
child enrollees for a State for a fiscal year under title 
XIX is equal to the number (if any, as determined 
by the Secretary) by which— 
‘‘(I) the monthly average unduplicated number 
of qualifying children (as defined in subparagraph 
(F)) enrolled during the fiscal year under title XIX 
as described in clause (i)(I); exceeds 
‘‘(II) the sum of the baseline number of child 
enrollees described in clause (iii) for the State 
and fiscal year title XIX, as described in clause 
(i)(II), and the maximum number of first tier above 
baseline child enrollees for the State and fiscal 
year under title XIX, as determined under clause 
(i). 
‘‘(iii) BASELINE
NUMBER
OF
CHILD
ENROLLEES.— 
Subject to subparagraph (H), the baseline number of 
child enrollees for a State under title XIX— 
‘‘(I) for fiscal year 2008 is equal to the monthly 
average unduplicated number of qualifying chil-
dren enrolled in the State plan under title XIX 
during fiscal year 2007 increased by the population 
growth for children in that State for the year 
ending on June 30, 2006 (as estimated by the 
Bureau of the Census) plus 1 percentage point; 
or 
‘‘(II) for a subsequent fiscal year is equal to 
the baseline number of child enrollees for the State 
for the previous fiscal year under title XIX, 
increased by the population growth for children 
in that State for the year ending on June 30 before
H. R. 3963—13 
the beginning of the fiscal year (as estimated by 
the Bureau of the Census) plus 1 percentage point. 
‘‘(D) PROJECTED PER CAPITA STATE MEDICAID EXPENDI-
TURES.—For purposes of subparagraph (B), the projected 
per capita State Medicaid expenditures for a State and 
fiscal year under title XIX is equal to the average per 
capita expenditures (including both State and Federal 
financial participation) for children under the State plan 
under such title, including under waivers but not including 
such children eligible for assistance by virtue of the receipt 
of benefits under title XVI, for the most recent fiscal year 
for which actual data are available (as determined by the 
Secretary), increased (for each subsequent fiscal year up 
to and including the fiscal year involved) by the annual 
percentage increase in per capita amount of National 
Health Expenditures (as estimated by the Secretary) for 
the calendar year in which the respective subsequent fiscal 
year ends and multiplied by a State matching percentage 
equal to 100 percent minus the Federal medical assistance 
percentage (as defined in section 1905(b)) for the fiscal 
year involved. 
‘‘(E) AMOUNTS AVAILABLE FOR PAYMENTS.— 
‘‘(i) INITIAL APPROPRIATION.—Out of any money in 
the Treasury not otherwise appropriated, there are 
appropriated $3,000,000,000 for fiscal year 2008 for 
making payments under this paragraph, to be available 
until expended. 
‘‘(ii) 
TRANSFERS.—Notwithstanding 
any 
other 
provision of this title, the following amounts shall also 
be available, without fiscal year limitation, for making 
payments under this paragraph: 
‘‘(I) UNOBLIGATED NATIONAL ALLOTMENT.— 
‘‘(aa) FISCAL YEARS 2008 THROUGH 2011.— 
As of December 31 of fiscal year 2008, and 
as of December 31 of each succeeding fiscal 
year through fiscal year 2011, the portion, if 
any, of the amount appropriated under sub-
section (a) for such fiscal year that is unobli-
gated for allotment to a State under subsection 
(i) for such fiscal year or set aside under sub-
section (a)(3) or (b)(2) of section 2111 for such 
fiscal year. 
‘‘(bb) FIRST HALF OF FISCAL YEAR 2012.— 
As of December 31 of fiscal year 2012, the 
portion, if any, of the sum of the amounts 
appropriated under subsection (a)(15)(A) and 
under section 108 of the Children’s Health 
Insurance Reauthorization Act of 2007 for the 
period beginning on October 1, 2011, and 
ending on March 31, 2012, that is unobligated 
for allotment to a State under subsection (i) 
for such fiscal year or set aside under sub-
section (b)(2) of section 2111 for such fiscal 
year. 
‘‘(cc) SECOND HALF OF FISCAL YEAR 2012.— 
As of June 30 of fiscal year 2012, the portion,
H. R. 3963—14 
if any, of the amount appropriated under sub-
section (a)(15)(B) for the period beginning on 
April 1, 2012, and ending on September 30, 
2012, that is unobligated for allotment to a 
State under subsection (i) for such fiscal year 
or set aside under subsection (b)(2) of section 
2111 for such fiscal year. 
‘‘(II) UNEXPENDED ALLOTMENTS NOT USED FOR 
REDISTRIBUTION.—As of November 15 of each of 
fiscal years 2009 through 2012, the total amount 
of allotments made to States under section 2104 
for the second preceding fiscal year (third pre-
ceding fiscal year in the case of the fiscal year 
2006 and 2007 allotments) that is not expended 
or redistributed under section 2104(f) during the 
period in which such allotments are available for 
obligation. 
‘‘(III) EXCESS
CHILD
ENROLLMENT
CONTIN-
GENCY FUNDS.—As of October 1 of each of fiscal 
years 2009 through 2012, any amount in excess 
of the aggregate cap applicable to the Child Enroll-
ment Contingency Fund for the fiscal year under 
section 2104(j). 
‘‘(iii) PROPORTIONAL REDUCTION.—If the sum of the 
amounts otherwise payable under this paragraph for 
a fiscal year exceeds the amount available for the 
fiscal year under this subparagraph, the amount to 
be paid under this paragraph to each State shall be 
reduced proportionally. 
‘‘(F) QUALIFYING CHILDREN DEFINED.—For purposes of 
this subsection, the term ‘qualifying children’ means chil-
dren who meet the eligibility criteria (including income, 
categorical eligibility, age, and immigration status criteria) 
in effect as of July 1, 2007, for enrollment under title 
XIX, taking into account criteria applied as of such date 
under title XIX pursuant to a waiver under section 1115. 
‘‘(G) APPLICATION
TO
COMMONWEALTHS
AND
TERRI-
TORIES.—The provisions of subparagraph (G) of section 
2104(j)(3) shall apply with respect to payment under this 
paragraph in the same manner as such provisions apply 
to payment under such section. 
‘‘(H) APPLICATION TO STATES THAT IMPLEMENT A MED-
ICAID EXPANSION FOR CHILDREN AFTER FISCAL YEAR 2007.— 
In the case of a State that provides coverage under para-
graph (1) or (2) of section 115(b) of the Children’s Health 
Insurance Program Reauthorization Act of 2007 for any 
fiscal year after fiscal year 2007— 
‘‘(i) any child enrolled in the State plan under 
title XIX through the application of such an election 
shall be disregarded from the determination for the 
State of the monthly average unduplicated number 
of qualifying children enrolled in such plan during 
the first 3 fiscal years in which such an election is 
in effect; and 
‘‘(ii) in determining the baseline number of child 
enrollees for the State for any fiscal year subsequent 
to such first 3 fiscal years, the baseline number of
H. R. 3963—15 
child enrollees for the State under title XIX for the 
third of such fiscal years shall be the monthly average 
unduplicated number of qualifying children enrolled 
in the State plan under title XIX for such third fiscal 
year. 
‘‘(4) ENROLLMENT AND RETENTION PROVISIONS FOR CHIL-
DREN.—For purposes of paragraph (3)(A), a State meets the 
condition of this paragraph for a fiscal year if it is implementing 
at least 5 of the following enrollment and retention provisions 
(treating each subparagraph as a separate enrollment and 
retention provision) throughout the entire fiscal year: 
‘‘(A) CONTINUOUS ELIGIBILITY.—The State has elected 
the option of continuous eligibility for a full 12 months 
for all children described in section 1902(e)(12) under title 
XIX under 19 years of age, as well as applying such policy 
under its State child health plan under this title. 
‘‘(B) LIBERALIZATION
OF
ASSET
REQUIREMENTS.—The 
State meets the requirement specified in either of the fol-
lowing clauses: 
‘‘(i) ELIMINATION OF ASSET TEST.—The State does 
not apply any asset or resource test for eligibility for 
children under title XIX or this title. 
‘‘(ii) ADMINISTRATIVE
VERIFICATION
OF
ASSETS.— 
The State— 
‘‘(I) permits a parent or caretaker relative who 
is applying on behalf of a child for medical assist-
ance under title XIX or child health assistance 
under this title to declare and certify by signature 
under penalty of perjury information relating to 
family assets for purposes of determining and 
redetermining financial eligibility; and 
‘‘(II) takes steps to verify assets through 
means other than by requiring documentation from 
parents and applicants except in individual cases 
of discrepancies or where otherwise justified. 
‘‘(C) ELIMINATION OF IN-PERSON INTERVIEW REQUIRE-
MENT.—The State does not require an application of a 
child for medical assistance under title XIX (or for child 
health assistance under this title), including an application 
for renewal of such assistance, to be made in person nor 
does the State require a face-to-face interview, unless there 
are discrepancies or individual circumstances justifying an 
in-person application or face-to-face interview. 
‘‘(D) USE
OF
JOINT
APPLICATION
FOR
MEDICAID
AND 
CHIP.—The application form and supplemental forms (if 
any) and information verification process is the same for 
purposes of establishing and renewing eligibility for chil-
dren for medical assistance under title XIX and child health 
assistance under this title. 
‘‘(E) AUTOMATIC
RENEWAL
(USE
OF
ADMINISTRATIVE 
RENEWAL).— 
‘‘(i) IN GENERAL.—The State provides, in the case 
of renewal of a child’s eligibility for medical assistance 
under title XIX or child health assistance under this 
title, a pre-printed form completed by the State based 
on the information available to the State and notice 
to the parent or caretaker relative of the child that
H. R. 3963—16 
eligibility of the child will be renewed and continued 
based on such information unless the State is provided 
other information. Nothing in this clause shall be con-
strued as preventing a State from verifying, through 
electronic and other means, the information so pro-
vided. 
‘‘(ii) SATISFACTION THROUGH DEMONSTRATED USE 
OF EX PARTE PROCESS.—A State shall be treated as 
satisfying the requirement of clause (i) if renewal of 
eligibility of children under title XIX or this title is 
determined without any requirement for an in-person 
interview, unless sufficient information is not in the 
State’s possession and cannot be acquired from other 
sources (including other State agencies) without the 
participation of the applicant or the applicant’s parent 
or caretaker relative. 
‘‘(F) PRESUMPTIVE
ELIGIBILITY
FOR
CHILDREN.—The 
State is implementing section 1920A under title XIX as 
well as, pursuant to section 2107(e)(1), under this title. 
‘‘(G) EXPRESS LANE.—The State is implementing the 
option described in section 1902(e)(13) under title XIX as 
well as, pursuant to section 2107(e)(1), under this title. 
‘‘(H) PREMIUM
ASSISTANCE
SUBSIDIES.—The State is 
implementing the option of providing premium assistance 
subsidies under section 2105(c)(11) or section 1906A.’’. 
SEC. 105. TWO-YEAR INITIAL AVAILABILITY OF CHIP ALLOTMENTS. 
Section 2104(e) (42 U.S.C. 1397dd(e)) is amended to read as 
follows: 
‘‘(e) AVAILABILITY OF AMOUNTS ALLOTTED.— 
‘‘(1) IN GENERAL.—Except as provided in paragraph (2), 
amounts allotted to a State pursuant to this section— 
‘‘(A) for each of fiscal years 1998 through 2007, shall 
remain available for expenditure by the State through the 
end of the second succeeding fiscal year; and 
‘‘(B) for fiscal year 2008 and each fiscal year thereafter, 
shall remain available for expenditure by the State through 
the end of the succeeding fiscal year. 
‘‘(2) AVAILABILITY OF AMOUNTS REDISTRIBUTED.—Amounts 
redistributed to a State under subsection (f) shall be available 
for expenditure by the State through the end of the fiscal 
year in which they are redistributed.’’. 
SEC. 106. MAKING PERMANENT REDISTRIBUTION OF UNUSED FISCAL 
YEAR 2005 ALLOTMENTS TO ADDRESS STATE FUNDING 
SHORTFALLS; CONFORMING EXTENSION OF QUALIFYING 
STATE AUTHORITY; REDISTRIBUTION OF UNUSED ALLOT-
MENTS FOR SUBSEQUENT FISCAL YEARS. 
(a) REDISTRIBUTION OF UNUSED FISCAL YEAR 2005 ALLOTMENTS; 
EXTENSION OF QUALIFYING STATE AUTHORITY.—Section 136(e) of 
Public Law 110–92 is amended to read as follows: 
‘‘(e) APPLICABILITY.— 
‘‘(1) REDISTRIBUTION OF UNUSED FISCAL YEAR 2005 ALLOT-
MENTS.—The amendment made by subsection (c) shall apply 
without regard to any limitation under section 106. 
‘‘(2) EXTENSION
OF
QUALIFYING
STATE
AUTHORITY.—The 
amendment made by subsection (d) shall be in effect through
H. R. 3963—17 
the date of the enactment of the Children’s Health Insurance 
Program Reauthorization Act of 2007.’’. 
(b) REDISTRIBUTIONS
OF UNUSED ALLOTMENTS
FOR FISCAL 
YEARS
AFTER
FISCAL
YEAR
2005.—Section 2104(f) (42 U.S.C. 
1397dd(f)) is amended— 
(1) by striking ‘‘The Secretary’’ and inserting the following: 
‘‘(1) IN GENERAL.—The Secretary’’; 
(2) by striking ‘‘States that have fully expended the amount 
of their allotments under this section.’’ and inserting ‘‘States 
that the Secretary determines with respect to the fiscal year 
for which unused allotments are available for redistribution 
under this subsection, are shortfall States described in para-
graph (2) for such fiscal year, but not to exceed the amount 
of the shortfall described in paragraph (2)(A) for each such 
State (as may be adjusted under paragraph (2)(C)).’’; and 
(3) by adding at the end the following new paragraph: 
‘‘(2) SHORTFALL STATES DESCRIBED.— 
‘‘(A) IN GENERAL.—For purposes of paragraph (1), with 
respect to a fiscal year, a shortfall State described in this 
subparagraph is a State with a State child health plan 
approved under this title for which the Secretary estimates 
on the basis of the most recent data available to the Sec-
retary, that the projected expenditures under such plan 
for the State for the fiscal year will exceed the sum of— 
‘‘(i) the amount of the State’s allotments for any 
preceding fiscal years that remains available for 
expenditure and that will not be expended by the end 
of the immediately preceding fiscal year; 
‘‘(ii) the amount (if any) of the child enrollment 
contingency fund payment under subsection (j); and 
‘‘(iii) the amount of the State’s allotment for the 
fiscal year. 
‘‘(B) PRORATION RULE.—If the amounts available for 
redistribution under paragraph (1) for a fiscal year are 
less than the total amounts of the estimated shortfalls 
determined for the year under subparagraph (A), the 
amount to be redistributed under such paragraph for each 
shortfall State shall be reduced proportionally. 
‘‘(C) RETROSPECTIVE ADJUSTMENT.—The Secretary may 
adjust the estimates and determinations made under para-
graph (1) and this paragraph with respect to a fiscal year 
as necessary on the basis of the amounts reported by 
States not later than November 30 of the succeeding fiscal 
year, as approved by the Secretary.’’. 
SEC. 107. OPTION FOR QUALIFYING STATES TO RECEIVE THE 
ENHANCED PORTION OF THE CHIP MATCHING RATE FOR 
MEDICAID COVERAGE OF CERTAIN CHILDREN. 
Section 2105(g) (42 U.S.C. 1397ee(g)) is amended— 
(1) in paragraph (1)(A), as amended by section 136(d) of 
Public Law 110–92— 
(A) by inserting ‘‘subject to paragraph (4),’’ after ‘‘Not-
withstanding any other provision of law,’’; and 
(B) by striking ‘‘2007, or 2008’’ and inserting ‘‘or 2007’’; 
and 
(2) by adding at the end the following new paragraph:
H. R. 3963—18 
‘‘(4) OPTION
FOR
ALLOTMENTS
FOR
FISCAL
YEARS
2008 
THROUGH 2012.— 
‘‘(A) PAYMENT
OF
ENHANCED
PORTION
OF
MATCHING 
RATE FOR CERTAIN EXPENDITURES.—In the case of expendi-
tures described in subparagraph (B), a qualifying State 
(as defined in paragraph (2)) may elect to be paid from 
the State’s allotment made under section 2104 for any 
of fiscal years 2008 through 2012 (insofar as the allotment 
is available to the State under subsections (e) and (i) of 
such section) an amount each quarter equal to the addi-
tional amount that would have been paid to the State 
under title XIX with respect to such expenditures if the 
enhanced FMAP (as determined under subsection (b)) had 
been substituted for the Federal medical assistance 
percentage (as defined in section 1905(b)). 
‘‘(B) 
EXPENDITURES
DESCRIBED.—For 
purposes 
of 
subparagraph (A), the expenditures described in this 
subparagraph are expenditures made after the date of the 
enactment of this paragraph and during the period in which 
funds are available to the qualifying State for use under 
subparagraph (A), for the provision of medical assistance 
to individuals residing in the State who are eligible for 
medical assistance under the State plan under title XIX 
or under a waiver of such plan and who have not attained 
age 19 (or, if a State has so elected under the State plan 
under title XIX, age 20 or 21), and whose family income 
equals or exceeds 133 percent of the poverty line but does 
not exceed the Medicaid applicable income level.’’. 
SEC. 108. ONE-TIME APPROPRIATION. 
There is appropriated to the Secretary, out of any money in 
the Treasury not otherwise appropriated, $13,700,000,000 to accom-
pany the allotment made for the period beginning on October 1, 
2011, and ending on March 31, 2012, under section 2104(a)(15)(A) 
of the Social Security Act (42 U.S.C. 1397dd(a)(15)(A)) (as added 
by section 101), to remain available until expended. Such amount 
shall be used to provide allotments to States under paragraph 
(3) of section 2104(i) of the Social Security Act (42 U.S.C. 1397dd(i)), 
as added by section 102, for the first 6 months of fiscal year 
2012 in the same manner as allotments are provided under sub-
section (a)(15)(A) of such section 2104 and subject to the same 
terms and conditions as apply to the allotments provided from 
such subsection (a)(15)(A). 
SEC. 109. IMPROVING FUNDING FOR THE TERRITORIES UNDER CHIP 
AND MEDICAID. 
(a) REMOVAL
OF FEDERAL MATCHING PAYMENTS
FOR DATA 
REPORTING SYSTEMS FROM THE OVERALL LIMIT ON PAYMENTS TO 
TERRITORIES UNDER TITLE XIX.—Section 1108(g) (42 U.S.C. 1308(g)) 
is amended by adding at the end the following new paragraph: 
‘‘(4) EXCLUSION OF CERTAIN EXPENDITURES FROM PAYMENT 
LIMITS.—With respect to fiscal years beginning with fiscal year 
2008, if Puerto Rico, the Virgin Islands, Guam, the Northern 
Mariana Islands, or American Samoa qualify for a payment 
under subparagraph (A)(i), (B), or (F) of section 1903(a)(3) 
for a calendar quarter of such fiscal year, the payment shall 
not be taken into account in applying subsection (f) (as 
increased in accordance with paragraphs (1), (2), and (3) of
H. R. 3963—19 
this subsection) to such commonwealth or territory for such 
fiscal year.’’. 
(b) GAO STUDY AND REPORT.—Not later than September 30, 
2009, the Comptroller General of the United States shall submit 
a report to the Committee on Finance of the Senate and the Com-
mittee on Energy and Commerce of the House of Representatives 
regarding Federal funding under Medicaid and CHIP for Puerto 
Rico, the United States Virgin Islands, Guam, American Samoa, 
and the Northern Mariana Islands. The report shall include the 
following: 
(1) An analysis of all relevant factors with respect to— 
(A) eligible Medicaid and CHIP populations in such 
commonwealths and territories; 
(B) historical and projected spending needs of such 
commonwealths and territories and the ability of capped 
funding streams to respond to those spending needs; 
(C) the extent to which Federal poverty guidelines 
are used by such commonwealths and territories to deter-
mine Medicaid and CHIP eligibility; and 
(D) the extent to which such commonwealths and terri-
tories participate in data collection and reporting related 
to Medicaid and CHIP, including an analysis of territory 
participation in the Current Population Survey versus the 
American Community Survey. 
(2) Recommendations regarding methods for the collection 
and reporting of reliable data regarding the enrollment under 
Medicaid and CHIP of children in such commonwealths and 
territories. 
(3) Recommendations for improving Federal funding under 
Medicaid and CHIP for such commonwealths and territories. 
Subtitle B—Focus on Low-Income Children 
and Pregnant Women 
SEC. 111. STATE OPTION TO COVER LOW-INCOME PREGNANT WOMEN 
UNDER CHIP THROUGH A STATE PLAN AMENDMENT. 
(a) IN GENERAL.—Title XXI (42 U.S.C. 1397aa et seq.), as 
amended by section 112(a), is amended by adding at the end the 
following new section: 
‘‘SEC. 2112. OPTIONAL COVERAGE OF TARGETED LOW-INCOME PREG-
NANT WOMEN THROUGH A STATE PLAN AMENDMENT. 
‘‘(a) IN GENERAL.—Subject to the succeeding provisions of this 
section, a State may elect through an amendment to its State 
child health plan under section 2102 to provide pregnancy-related 
assistance under such plan for targeted low-income pregnant 
women. 
‘‘(b) CONDITIONS.—A State may only elect the option under 
subsection (a) if the following conditions are satisfied: 
‘‘(1) MINIMUM INCOME ELIGIBILITY LEVELS FOR PREGNANT 
WOMEN AND CHILDREN.—The State has established an income 
eligibility level— 
‘‘(A) 
for 
pregnant 
women 
under 
subsection 
(a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), or (l)(1)(A) of section 1902 
that is at least 185 percent (or such higher percent as 
the State has in effect with regard to pregnant women