198
such study such recommendations as the Commission con-
siders appropriate.
TITLE 
IV—EXPANSIONS 
OF
HEALTH 
BENEFITS 
AND
OTHER HEALTH INITIATIVES
Subtitle A—Medicaid Benefit
Improvements
SEC. 401. FLOOR ON MEDICAID PAYMENT LEVELS FOR IN-
PATIENT HOSPITAL SERVICES AND PHYSI-
CIANS’ SERVICES.
(a) INPATIENT HOSPITAL SERVICES.—
(1) IN GENERAL.—(A) A State plan under title
XIX of the Social Security Act shall not be consid-
ered 
to 
meet 
the 
requirement 
of 
section
1902(a)(13)(A) of such Act (insofar as it requires
payments to hospitals for inpatient hospital services
that are reasonable and adequate to meet the costs
which must be incurred by efficiently and economi-
cally operated facilities), as of October 1, 1996, un-
less the State has submitted to the Secretary of
Health and Human Services (in this subsection re-
ferred to as the ‘‘Secretary’’), by not later than such
date, an amendment to such plan that assures that,
in the aggregate, the amount of payments for inpa-
tient hospital services provided in subsection (d) hos-
199
pitals (as defined in section 1886(d)(1)(B) of such
Act) under the plan is not less than—
(i) in the case of services furnished during
fiscal year 1997, 80 percent (or, if greater, the
percent specified in subparagraph (B)) of the
amount of payments for such services that
would be made under title XVIII of such Act
(without regard to any deductible imposed
under section 1813(a) of such Act or any limi-
tation on the coverage of inpatient hospital
services under such title) for such services if
covered under such title;
(ii) in the case of services furnished during
fiscal year 1998, 85 percent (or, if greater, the
percent specified in subparagraph (B)) of the
amount of payments for such services that
would be made under title XVIII of such Act
(without regard to any deductible imposed
under section 1813(a) of such Act or any limi-
tation on the coverage of inpatient hospital
services under such title) for such services if
covered under such title; and
(iii) in the case of services furnished dur-
ing any succeeding fiscal year, 90 percent of the
amount of payments for such services that
200
would be made under title XVIII of such Act
(without regard to any deductible imposed
under section 1813(a) of such Act or any limi-
tation on the coverage of inpatient hospital
services under such title) for such services if
covered under such title.
(B) The percent specified in this subparagraph
is the quotient of—
(i) the total payments made under the
State plan under title XIX of the Social Secu-
rity Act in fiscal year 1993 with respect to in-
patient hospital services, divided by
(ii) the amount of payments for such serv-
ices that would be made under title XVIII of
such Act (without regard to any deductible im-
posed under section 1813(a) of such Act or any
limitation on the coverage of inpatient hospital
services under such title) for such services in
such fiscal year if covered under such title,
expressed as a percentage, or, if less, 90 percent.
(C) In computing amounts under subparagraph
(A), the Secretary shall adjust for differences in case
mix, volume, the age and disability of the popu-
lations covered by the two programs, and other rel-
evant factors identified by the Secretary.
201
(2) REVIEW.—The Secretary, by not later than
90 days after the date of submission of a plan
amendment under paragraph (1), shall—
(A) review each such amendment for com-
pliance 
with 
the 
requirement 
of 
section
1902(a)(13)(A) of the Social Security Act; and
(B) approve or disapprove each such
amendment.
If the Secretary disapproves such an amendment,
the State shall immediately submit a revised amend-
ment which meets such requirement.
(3) COLLECTION OF DATA.—The Secretary may
provide for such collection of data on payment for
inpatient hospital services as may be necessary to
carry out this subsection.
(4) NONWAIVABILITY.—The provisions of this
subsection may not be waived by the Secretary.
(b) PHYSICIANS’ SERVICES.—
(1) IN GENERAL.—Section 1902 of the Social
Security Act (42 U.S.C. 1396a) is amended—
(A) in subsection (a)(13)—
(i) by striking ‘‘and’’ at the end of
subparagraph (E);
202
(ii) by striking the semicolon at the
end of subparagraph (F) and inserting ‘‘;
and’’; and
(iii) by adding at the end the follow-
ing new subparagraph:
‘‘(G) for payment for physicians’ services
through a methodology under which the amount
of payment for such services furnished during a
calendar quarter is not less than the amount
specified in subsection (z);’’; and
(B) by adding at the end the following new
subsection:
‘‘(z)(1) For purposes of subsection (a)(13)(G), the
amount specified in this subsection is—
‘‘(A) for physicians’ services furnished during a
calendar quarter in fiscal year 1997, 60 percent (or,
if greater, the percent specified in paragraph (2)) of
the applicable fee schedule amount established under
section 1848 for services furnished in such year,
‘‘(B) for physicians’ services furnished during a
calendar quarter in fiscal year 1998, 70 percent (or,
if greater, the percent specified in subparagraph
(B)) of the applicable fee schedule amount estab-
lished under section 1848 for services furnished in
such year, and
203
‘‘(C) for physicians’ services furnished during a
calendar quarter in a succeeding fiscal year, 90 per-
cent (or, if greater, the percent specified in subpara-
graph (B)) of the applicable fee schedule amount es-
tablished under section 1848 for services furnished
in such year.
‘‘(2) The percent specified in this paragraph is the
quotient of—
‘‘(A) the total payments made under the State
plan under title XIX of the Social Security Act in
fiscal year 1993 for physicians’ services, divided by
‘‘(B) the amount of payments for such services
that would be made under title XVIII of such Act
(without regard to any deductible or coinsurance)
for such services in such fiscal year if covered under
such title,
expressed as a percentage, or, if less, 90 percent.’’.
(2) TRANSMITTAL OF PAYMENT INFORMATION
TO STATES.—Section 1848(i) of such Act (42 U.S.C.
1395w–4(i)) is amended by adding at the end the
following new paragraph:
‘‘(4) TRANSMITTAL OF PHYSICIAN PAYMENT IN-
FORMATION TO STATES.—Not later than August 1
of 1996 (and of each year thereafter), the Secretary
shall transmit such information to the States as is
204
necessary to enable the States to carry out the re-
quirements of section 1902(a)(13)(G) of the Social
Security Act (as added by section 401(b)(1) of the
Health Care Cost Containment and Reform Act of
1993).’’.
(3) RELATION TO PAYMENTS FOR OBSTETRICAL
AND PEDIATRIC SERVICES.—Section 1926 of such
Act (42 U.S.C. 1396r–7) is amended by adding at
the end the following new subsection:
‘‘(e) Payment rates established under this section
with respect to services shall in no case be less than the
minimum payment amounts specified under section
1902(z) with respect to such services. The fact that pay-
ment amounts with respect to such services are consistent
with the payment rates required under such section shall
not be the basis for a determination that the payment
amounts comply with the requirements of this section.’’.
(4) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to payments under
title XIX of the Social Security Act for calendar
quarters beginning on or after October 1, 1997.
SEC. 402. MEDICAID ELIGIBILITY EXPANSION.
(a) IN GENERAL.—
(1) BENEFITS
FOR
LOW-INCOME
INDIVID-
UALS.—Section 1902(a)(10)(A)(i) of the Social Se-
205
curity Act (42 U.S.C. 1396a(a)(10)(A)(i)) is amend-
ed—
(A) by striking ‘‘or’’ at the end of
subclause (VI);
(B) by striking the semicolon at the end of
subclause (VII) and inserting ‘‘, or’’; and
(C) by adding at the end the following new
subclause:
‘‘(VIII) who are described in sub-
section (aa)(1);’’.
(2) INDIVIDUALS DESCRIBED.—
(A) IN GENERAL.—Section 1902 of such
Act (42 U.S.C. 1396a), as amended by section
401(b), is amended by adding at the end the
following new subsection:
‘‘(aa)(1) Individuals described in this paragraph
are—
‘‘(A) for quarters beginning on or after October
1, 1996, women during pregnancy (and during the
60-day period beginning on the last day of the preg-
nancy) or individuals who have not attained 6 years
of age;
‘‘(B) for quarters beginning on or after October
1, 1997, individuals not described in subparagraph
(A) who have not attained 11 years of age;
206
‘‘(C) for quarters beginning on or after October
1, 1998, individuals not described in subparagraph
(A) or (B) who have not attained 19 years of age;
and
‘‘(D) for quarters beginning on or after October
1, 1999, individuals not described in a preceding
subparagraph who have not attained 65 years of
age,
who are not described in any of subclauses (I) through
(VII) of subsection (a)(10)(A)(i) and whose family income
does not exceed the income level described in paragraph
(2) for a family of the size of the family.
‘‘(2)(A) The income level described in this paragraph
is the percent provided under subparagraph (B) of the of-
ficial poverty line (as defined by the Office of Management
and Budget, and revised annually in accordance with sec-
tion 673(2) of the Omnibus Budget Reconciliation Act of
1981) applicable to a family of the size involved.
‘‘(B) The percentage provided in this subparagraph
is—
‘‘(i) for individuals described in subparagraph
(A), (B), or (C) of paragraph (1), 200 percent; and
‘‘(ii) with respect to any other individual, for
purposes of determining eligibility for medical assist-
ance on or after—
207
‘‘(I) October 1, 1999, is 50 percent,
‘‘(II) October 1, 2000, is 100 percent,
‘‘(III) October 1, 2001, is 150 percent,
and
‘‘(IV) October 1, 2002, is 200 percent.
‘‘(3) Notwithstanding subsection (a)(17), for individ-
uals who are eligible for medical assistance because of sub-
section (a)(10)(A)(i)(VIII)—
‘‘(A) no resource standard shall be applied;
‘‘(B) the income standard to be applied is the
appropriate income standard established under para-
graph (2); and
‘‘(C) family income shall be determined in ac-
cordance with the methodology that is not more re-
strictive than the methodology employed under the
State plan under part A or E of title IV (except to
the extent such methodology is inconsistent with
clause (D) of subsection (a)(17)), and costs incurred
for medical care or for any other type of remedial
care shall not be taken into account.
Any different treatment provided under this paragraph for
such individuals shall not, because of subsection (a)(17),
require or permit such treatment for other individuals.
‘‘(4)(A) In the case of any State which is providing
medical assistance to its residents under a waiver granted
208
under section 1115, the Secretary shall require the State
to provide medical assistance for individuals described in
paragraph (1) in the same manner as the State would be
required to provide such assistance for such individuals
if the State had in effect a plan approved under this title.
‘‘(B) In the case of a State which is not one of the
50 States or the District of Columbia, the State need not
meet the requirement of subsection (a)(10)(A)(i)(VIII)
and, for purposes of paragraph (2)(A), the State may sub-
stitute for the percentages provided under such paragraph
any percentages that are less than such percentages.
‘‘(5) The Secretary may not require that an individ-
ual apply for eligibility under subclauses (I) through (VII)
of subsection (a)(10)(A)(i) as a condition of being deter-
mined to be eligible for medical assistance under this title
as an individual described in paragraph (1).’’.
(B) CONFORMING
AMENDMENT.—Section
1905(a) of such Act (42 U.S.C. 1396d(a)) is
amended—
(i) by striking ‘‘or’’ at the end of
clause (ix),
(ii) by adding ‘‘or’’ at the end of
clause (x), and
(iii) by inserting after clause (x) the
following new clause:
209
‘‘(xi) individuals described in section
1902(aa)(1),’’.
(b) RESTRICTIONS ON BENEFITS PROVIDED.—Sec-
tion 1902(a)(10) of such Act (42 U.S.C. 1396a(a)(10))
is amended in the matter following subparagraph (F)—
(1) by striking ‘‘; and (XI) the making’’ and in-
serting ‘‘, (XI) the making’’;
(2) by striking ‘‘and (XI) the medical’’ and in-
serting ‘‘(XII) the medical’’; and
(3) by striking the semicolon at the end and in-
serting the following: ‘‘ and (XIII) the medical as-
sistance required to be made available to an individ-
ual described in subsection (aa)(1) shall not include
nursing facility services, home and community-based
services (as defined in section 1915(d)(5)(C)(i)),
services in an intermediate care facility for the men-
tally retarded, and community supported living ar-
rangements services;’’.
(c) EFFECTIVE DATE.—The amendments made by
subsections (a) and (b) shall apply to quarters beginning
on or after October 1, 1996, without regard to whether
or not regulations to carry out such amendments have
been promulgated by such date.