plan if payment for such item, service, or ad-
ministrative cost was included in the determina-
tion of a prepaid capitation or other risk-based 
rate of payment to an entity under a contract 
pursuant to section 1903(m).’’. 
(B) 
CONFORMING
AMENDMENT.—The 
third sentence of section 1903(i) of such Act 
(42 U.S.C. 1396b(i)), as amended by subsection 
(a)(1)(C), is amended by striking ‘‘and (24)’’ 
and inserting ‘‘(24), and (25)’’. 
(c) ALLOWABLE SHARE OF FFP WITH RESPECT TO 
PAYMENT FOR SERVICES FURNISHED IN OR THROUGH AN 
EDUCATIONAL
PROGRAM
OR
SETTING.—Section 
1903(w)(6) of the Social Security Act (42 U.S.C. 
1396b(w)(6)) is amended— 
(1) in subparagraph (A), by inserting ‘‘subject 
to subparagraph (C),’’ after ‘‘subsection,’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(C) In the case of any Federal financial participa-
tion paid under subsection (a) with respect to an expendi-
ture for an item or service provided under the plan, or 
for any administrative cost incurred to carry out the plan, 
that is furnished in or through an educational program 
or setting, the State shall provide that— 
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‘‘(i) if 0 percent of the expenditure was made 
or the cost was incurred directly by the State, the 
State shall pay the local educational agency in the 
State or the lead agency in the State with responsi-
bility for administering part C of the Individuals 
with Disabilities Education Act that made the ex-
penditure or incurred the cost (and, if applicable, 
any consortium of public agencies that incurred 
costs in connection with the collection or submission 
of claims for such expenditures or costs), 100 per-
cent (divided, as appropriate, between such agencies 
and such a consortium, if applicable) of the amount 
of the Federal financial participation; and 
‘‘(ii) if 100 or any lesser percent of the expendi-
ture was made or the cost was directly incurred by 
the State, the State shall retain only such percent-
age of the Federal financial participation paid for 
the expenditure or cost as does not exceed the per-
centage of such expenditure or cost that was funded 
by State revenues that are dedicated solely for the 
provision of such medical assistance (and shall pay 
out of any remaining percentage of such Federal fi-
nancial participation, the percentage due to the local 
educational agency in the State or the lead agency 
in the State with responsibility for administering 
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part C of the Individuals with Disabilities Education 
Act that made or incurred the remaining percentage 
of such expenditure or cost (and, if applicable, any 
consortium of public agencies that incurred costs in 
connection with the collection or submission of 
claims for such expenditures or costs)).’’. 
(d) ASSURANCE OF REIMBURSEMENT FOR ADMINIS-
TRATIVE, ENROLLMENT, AND OUTREACH ACTIVITIES 
CONDUCTED BY LOCAL EDUCATIONAL AGENCIES.— 
(1) MEDICAID.—Section 1902 of the Social Se-
curity Act (42 U.S.C. 1396a) is amended by insert-
ing after subsection (j) the following new subsection: 
‘‘(k) Nothing in this title shall be construed as au-
thorizing the Secretary to prohibit the State agency with 
responsibility for the administration or supervision of the 
administration of the State plan from entering into inter-
agency agreements with local educational agencies under 
which such local educational agencies shall be reimbursed 
for the Federal share of amounts expended for administra-
tive, enrollment, and outreach activities for which payment 
is made to the State under section 1903(a)(7), including 
with respect to such activities as are conducted for pur-
poses of satisfying the requirements of subsection 
(a)(43).’’. 
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(2) SCHIP.—Section 2107(e)(1) of the Social 
Security Act (42 U.S.C. 1397gg(e)(1)) is amended— 
(A) by redesignating subparagraphs (B) 
through (D) as subparagraphs (C) through (E), 
respectively; and 
(B) by inserting after subparagraph (A) 
the following new subparagraph: 
‘‘(B) Section 1902(k) (relating to inter-
agency agreements with local educational agen-
cies for reimbursement for expenditures for ad-
ministrative, enrollment, and outreach activi-
ties).’’. 
(e) CLARIFICATION OF COVERAGE OF EPSDT AND 
ITEMS AND SERVICES FURNISHED TO A DISABLED CHILD 
PURSUANT TO SECTION 504 OF THE REHABILITATION 
ACT OF 1973; DEFINITION OF ‘‘EDUCATIONAL PROGRAM 
OR SETTING’’.—Section 1903(c) of the Social Security Act 
(42 U.S.C. 1396b(c)) is amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(c)’’; 
(2) by striking ‘‘Education Act or’’ and insert-
ing ‘‘Education Act,’’; 
(3) by inserting ‘‘, or furnished to a child with 
a disability pursuant to section 504 of the Rehabili-
tation Act of 1973’’ before the period; and 
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(4) by adding at the end the following new 
paragraphs: 
‘‘(2) Nothing in this title shall be construed as pro-
hibiting or restricting, or authorizing the Secretary to pro-
hibit or restrict, payment under subsection (a) for the fol-
lowing items or services furnished in or through an edu-
cational program or setting, or costs incurred with respect 
to the furnishing of such items or services: 
‘‘(A) Medical assistance for items or services 
described in section 1905(a)(4)(B) (relating to early 
and periodic screening, diagnostic, and treatment 
services defined in section 1905(r)) and costs in-
curred for providing such items or services in ac-
cordance 
with 
the 
requirements 
of 
section 
1902(a)(43). 
‘‘(B) Costs incurred for providing services re-
lated to the administration of the State plan, includ-
ing providing information regarding the availability 
of, and eligibility for, medical assistance under the 
plan, and assistance with determinations of eligi-
bility and enrollment and redeterminations of eligi-
bility under the plan. 
‘‘(3) Nothing in this title shall be construed as pro-
hibiting or restricting, or authorizing the Secretary to pro-
hibit or restrict, payment under subsection (a) for medical 
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