the amount described in subparagraph (A), was 
necessary. 
‘‘(3) TRANSPORTATION SERVICES.— 
‘‘(A) IN
GENERAL.—In the case of an 
amount expended by, or on behalf of, the State 
for furnishing in or through an educational pro-
gram or setting a transportation service for an 
individual who has not attained age 21 and who 
is eligible for medical assistance under the 
State plan, the State mush establish that— 
‘‘(i) a medical need for transportation 
is specifically listed in the individualized 
education program for the individual estab-
lished pursuant to part B of the Individ-
uals with Disabilities Education Act or, in 
the case of an infant or a toddler with a 
disability, in the individualized family serv-
ice plan established for such infant or tod-
dler pursuant to part C of such Act, or is 
furnished to the individual pursuant to sec-
tion 504 of the Rehabilitation Act of 1973; 
‘‘(ii) the vehicle used to furnish such 
transportation service is specially equipped 
or staffed to accommodate individuals who 
have not attained age 21 with develop-
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mental, physical, or mental health needs; 
and 
‘‘(iii) payment for such service is 
made only for costs directly attributable to 
costs associated with transporting individ-
uals who have not attained age 21 and 
whose developmental, physical, or mental 
health needs require transport in such a 
vehicle in order to receive the services for 
which medical assistance is provided under 
the State plan. 
‘‘(B) RULE OF CONSTRUCTION.—Nothing 
in subparagraph (A) shall be construed as 
modifying the obligation of a State to ensure 
that an individual who has not attained age 21 
and who is eligible for medical assistance under 
the State plan receives necessary transportation 
services to and from a provider of medical as-
sistance in or through a program or setting 
other than an educational program or setting.’’. 
(b) REQUIREMENTS FOR THE PROVISION OF ITEMS 
AND SERVICES THROUGH MEDICAID MANAGED CARE OR-
GANIZATIONS.— 
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(1) CONTRACTUAL
REQUIREMENTS.—Section 
1903(m)(2) of the Social Security Act (42 U.S.C. 
1396b(m)(2)) is amended— 
(A) in subparagraph (A), by inserting after 
clause (i) the following new clause: 
‘‘(ii) the contract with the entity satisfies the 
requirements of subparagraph (C) (relating to pay-
ment for, and coverage of, such services under an in-
dividual’s education program, an individualized fam-
ily service plan, or when furnished in or through an 
educational program or setting);’’; and 
(B) by inserting after subparagraph (B), 
the following new subparagraph: 
‘‘(C) For purposes of clause (ii) of subparagraph (A), 
the requirements of this subparagraph are the following: 
‘‘(i) The contract with the entity specifies the 
coverage and payment responsibilities of the entity 
in relation to medical assistance for items and serv-
ices that are covered under the State plan and in-
cluded in the contract, when such items and services 
are furnished in or through an educational program 
or setting. 
‘‘(ii) In any case in which the entity is obligated 
under the contract to pay for items and services cov-
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ered under the State plan, the contract with the en-
tity requires the entity to— 
‘‘(I) enter into a provider network service 
agreement with the qualified provider or pro-
viders furnishing such items or services in or 
through an educational program or setting; 
‘‘(II) promptly pay such providers at a rate 
that is at least equal to the rate that would be 
paid to a provider furnishing the same service 
in a non-educational program or setting; and 
‘‘(III) treat as final and binding deter-
minations by State licensed providers or pro-
viders eligible for reimbursement under the 
State plan working in an educational program 
or setting regarding the medical necessity of an 
item or service. 
‘‘(iii) The contract with the entity specifies the 
obligation of the entity to ensure that providers of 
items or services that are furnished in or through an 
educational program or setting refer children fur-
nished such items or services to the entity and its 
provider network for additional services that are not 
available in or through such program or setting but 
that are covered under the State plan and included 
in the entity’s contract with the State. 
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‘‘(iv) The contract with the entity requires, with 
respect to payment for, and coverage of, services for 
which the entity is responsible for, that the entity 
must demonstrate that the entity has established 
procedures to— 
‘‘(I) ensure coordination between the State, 
a local educational agency and the lead agency 
in the State with responsibility for admin-
istering part C of the Individuals with Disabil-
ities Education Act with respect to those serv-
ices for an individual who has not attained age 
21 and who is eligible for medical assistance 
under the State plan (including an individual 
who has an individualized education program 
established pursuant to part B of the Individ-
uals with Disabilities Education Act or other-
wise or an infant or toddler with a disability 
who has an individualized family service plan 
established pursuant to part C of such Act) 
which are required for the individual under the 
individual’s education program or the individ-
ualized family service plan, or are furnished to 
the individual pursuant to section 504 of the 
Rehabilitation Act of 1973 and which are not 
specifically included in the services required 
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under the contract, but are the responsibility of 
the State, a local educational agency, or the 
lead agency in the State with responsibility for 
administering part C of the Individuals with 
Disabilities Education Act; and 
‘‘(II) prevent duplication of services and 
payments under this title with respect to items 
and services covered under the State plan that 
are furnished in or through an educational pro-
gram or setting to such individuals enrolled 
under the contract.’’. 
(2) 
PROHIBITION
ON
DUPLICATIVE
PAY-
MENTS.— 
(A) IN GENERAL.—Section 1903(i) of the 
Social Security Act (42 U.S.C. 1396b(i)), as 
amended by subsection (a), is amended— 
(i) in paragraph (24)(B), by striking 
the period and inserting ‘‘; or’’; and 
(ii) by inserting after paragraph (24) 
the following new paragraph: 
‘‘(25) with respect to any amount ex-
pended under the State plan for an item, serv-
ice, or administrative cost for which payment is 
or may be made directly to a person or entity 
(including a State, local educational agency, or 
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