HR 5613 PCS 
(3) by inserting ‘‘, including the final regulation 
published on December 28, 2007 (72 Federal Reg-
ister 73635),’’ after ‘‘school-based transportation’’. 
(c) ADDITIONAL MORATORIA.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of law, the Secretary of Health and 
Human Services shall not, prior to April 1, 2009, 
take any action (through promulgation of regulation, 
issuance of regulatory guidance, use of Federal pay-
ment audit procedures, or other administrative ac-
tion, policy, or practice, including a Medical Assist-
ance Manual transmittal or letter to State Medicaid 
directors) to impose any restrictions relating to a 
provision described in subparagraph (A), (B), or (C) 
of paragraph (2) if such restrictions are more re-
strictive in any aspect than those applied to the re-
spective provision as of the date specified in para-
graph (3) for such provision. 
(2) PROVISIONS DESCRIBED.— 
(A) PORTION OF INTERIM FINAL REGULA-
TION RELATING TO MEDICAID TREATMENT OF 
OPTIONAL CASE MANAGEMENT SERVICES.— 
(i) IN
GENERAL.—Subject to clause 
(ii), the provision described in this sub-
paragraph is the interim final regulation 
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relating to optional State plan case man-
agement services under the Medicaid pro-
gram published on December 4, 2007 (72 
Federal Register 68077) in its entirety. 
(ii) EXCEPTION.—The provision de-
scribed in this subparagraph does not in-
clude the portion of such regulation as re-
lates directly to implementing section 
1915(g)(2)(A)(ii) of the Social Security 
Act, as amended by section 6052 of the 
Deficit Reduction Act of 2005 (Public Law 
109–171), through the definition of case 
management services and targeted case 
management services contained in pro-
posed section 440.169 of title 42, Code of 
Federal Regulations, but only to the extent 
that such portion is not more restrictive 
than the policies set forth in the Dear 
State Medicaid Director letter on case 
management issued on January 19, 2001 
(SMDL #01–013), and with respect to 
community transition case management, 
the Dear State Medicaid Director letter 
issued on July 25, 2000 (Olmstead Update 
3). 
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(B) PROPOSED REGULATION RELATING TO 
REDEFINITION OF MEDICAID OUTPATIENT HOS-
PITAL
SERVICES.—The provision described in 
this subparagraph is the proposed regulation re-
lating to clarification of outpatient clinic and 
hospital facility services definition and upper 
payment limit under the Medicaid program 
published on September 28, 2007 (72 Federal 
Register 55158) in its entirety. 
(C) PORTION OF PROPOSED REGULATION 
RELATING TO MEDICAID ALLOWABLE PROVIDER 
TAXES.— 
(i) IN
GENERAL.—Subject to clause 
(ii), the provision described in this sub-
paragraph is the final regulation relating 
to health-care-related taxes under the Med-
icaid program published on February 22, 
2008 (73 Federal Register 9685) in its en-
tirety. 
(ii) EXCEPTION.—The provision de-
scribed in this subparagraph does not in-
clude the portions of such regulation as re-
late to the following: 
(I) 
REDUCTION
IN
THRESH-
OLD.—The reduction from 6 percent 
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to 5.5 percent in the threshold applied 
under section 433.68(f)(3)(i) of title 
42, Code of Federal Regulations, for 
determining whether or not there is 
an indirect guarantee to hold a tax-
payer harmless, as required to carry 
out section 1903(w)(4)(C)(ii) of the 
Social Security Act, as added by sec-
tion 403 of the Medicare Improvement 
and Extension Act of 2006 (division 
B of Public Law 109–432). 
(II) CHANGE IN DEFINITION OF 
MANAGED CARE.—The change in the 
definition of managed care as pro-
posed in the revision of section 
433.56(a)(8) of title 42, Code of Fed-
eral Regulations, as required to carry 
out section 1903(w)(7)(A)(viii) of the 
Social Security Act, as amended by 
section 6051 of the Deficit Reduction 
Act of 2005 (Public Law 109–171). 
(3) DATE
SPECIFIED.—The date specified in 
this paragraph for the provision described in— 
(A) subparagraph (A) of paragraph (2) is 
December 3, 2007; 
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(B) subparagraph (B) of such paragraph is 
September 27, 2007; or 
(C) subparagraph (C) of such paragraph is 
February 21, 2008. 
SEC. 3. FUNDS TO REDUCE MEDICAID FRAUD AND ABUSE. 
(a) IN GENERAL.—For purposes of reducing fraud 
and abuse in the Medicaid program under title XIX of 
the Social Security Act, there is appropriated to the Sec-
retary of Health and Human Services, out of any money 
in the Treasury not otherwise appropriated, $25,000,000, 
for each fiscal year (beginning with fiscal year 2009). 
Amounts appropriated under this section shall remain 
available for expenditure until expended and shall be in 
addition to any other amounts appropriated or made avail-
able to the Secretary for such purposes with respect to 
the Medicaid program. 
(b) ANNUAL REPORT.—Not later than September 30 
of 2009 and of each subsequent year, the Secretary of 
Health and Human Services shall submit to the Com-
mittee on Energy and Commerce of the House of Rep-
resentatives and the Committee on Finance of the Senate 
a report on the activities (and the results of such activi-
ties) funded under subsection (a) to reduce waste, fraud, 
and abuse in the Medicaid program under title XIX of 
the Social Security Act during the previous 12 month pe-
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riod, including the amount of funds appropriated under 
such subsection (a) for each such activity and an estimate 
of the savings to the Medicaid program resulting from 
each such activity. 
SEC. 4. STUDY AND REPORTS TO CONGRESS. 
(a) SECRETARIAL
REPORT
IDENTIFYING
PROB-
LEMS.—Not later than July 1, 2008, the Secretary of 
Health and Human Services shall submit to the Com-
mittee on Energy and Commerce of the House of Rep-
resentatives and the Committee on Finance of the Senate 
a report that— 
(1) outlines the specific problems the Medicaid 
regulations referred to in the amendments made by 
subsections (a) and (b) of section 2 and in the provi-
sions described in subsection (c)(2) of such section 
were intended to address; 
(2) detailing how these regulations were de-
signed to address these specific problems; and 
(3) cites the legal authority for such regula-
tions. 
(b) INDEPENDENT COMPREHENSIVE STUDY AND RE-
PORT.— 
(1) IN GENERAL.—Not later than July 1, 2008, 
the Secretary of Health and Human Services shall 
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enter into a contract with an independent organiza-
tion for the purpose of— 
(A) producing a comprehensive report on 
the prevalence of the problems outlined in the 
report submitted under subsection (a); 
(B) identifying strategies in existence to 
address these problems; and 
(C) assessing the impact of each regulation 
referred to in such subsection on each State 
and the District of Columbia. 
(2) ADDITIONAL MATTER.—The report under 
paragraph (1) shall also include— 
(A) an identification of which claims for 
items and services (including administrative ac-
tivities) under title XIX of the Social Security 
Act are not processed through systems de-
scribed in section 1903(r) of such Act; 
(B) an examination of the reasons why 
these claims for such items and services are not 
processed through such systems; and 
(C) recommendations on actions by the 
Federal government and the States that can 
make claims for such items and services more 
accurate and complete consistent with such 
title. 
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(3) DEADLINE.—The report under paragraph 
(1) shall be submitted to the Committee on Energy 
and Commerce of the House of Representatives and 
the Committee on Finance of the Senate not later 
than March 1, 2009. 
(4) COOPERATION
OF
STATES.—If the Sec-
retary of Health and Human Services determines 
that a State or the District of Columbia has not co-
operated with the independent organization for pur-
poses of the report under this subsection, the Sec-
retary shall reduce the amount paid to the State or 
District under section 1903(a) of the Social Security 
Act (42 U.S.C. 1396b(a)) by $25,000 for each day 
on which the Secretary determines such State or 
District has not so cooperated. Such reduction shall 
be made through a process that permits the State or 
District to challenge the Secretary’s determination. 
(c) FUNDING.— 
(1) IN GENERAL.—Out of any money in the 
Treasury of the United States not otherwise appro-
priated, there are appropriated to the Secretary 
without further appropriation, $5,000,000 to carry 
out this section. 
(2) AVAILABILITY; AMOUNTS IN ADDITION TO 
OTHER AMOUNTS APPROPRIATED FOR SUCH ACTIVI-
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TIES.—Amounts appropriated pursuant to para-
graph (1) shall— 
(A) remain available until expended; and 
(B) be in addition to any other amounts 
appropriated or made available to the Secretary 
of Health and Human Services with respect to 
the Medicaid program. 
SEC. 5. ASSET VERIFICATION THROUGH ACCESS TO INFOR-
MATION HELD BY FINANCIAL INSTITUTIONS. 
(a) ADDITION OF AUTHORITY.—Title XIX of the So-
cial Security Act is amended by inserting after section 
1939 the following new section: 
‘‘ASSET VERIFICATION THROUGH ACCESS TO 
INFORMATION HELD BY FINANCIAL INSTITUTIONS 
‘‘SEC. 1940. (a) IMPLEMENTATION.— 
‘‘(1) IN GENERAL.—Subject to the provisions of 
this section, each State shall implement an asset 
verification program described in subsection (b), for 
purposes of determining or redetermining the eligi-
bility of an individual for medical assistance under 
the State plan under this title. 
‘‘(2) PLAN SUBMITTAL.—In order to meet the 
requirement of paragraph (1), each State shall— 
‘‘(A) submit not later than a deadline spec-
ified by the Secretary consistent with paragraph 
(3), a State plan amendment under this title 
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that describes how the State intends to imple-
ment the asset verification program; and 
‘‘(B) provide for implementation of such 
program for eligibility determinations and rede-
terminations made on or after 6 months after 
the deadline established for submittal of such 
plan amendment. 
‘‘(3) PHASE-IN.— 
‘‘(A) IN GENERAL.— 
‘‘(i) IMPLEMENTATION
IN
CURRENT 
ASSET VERIFICATION DEMO STATES.—The 
Secretary shall require those States speci-
fied in subparagraph (C) (to which an 
asset verification program has been applied 
before the date of the enactment of this 
section) to implement an asset verification 
program under this subsection by the end 
of fiscal year 2009. 
‘‘(ii) IMPLEMENTATION
IN
OTHER 
STATES.—The 
Secretary 
shall 
require 
other States to submit and implement an 
asset verification program under this sub-
section in such manner as is designed to 
result in the application of such programs, 
in the aggregate for all such other States, 
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to enrollment of approximately, but not 
less than, the following percentage of en-
rollees, in the aggregate for all such other 
States, by the end of the fiscal year in-
volved: 
‘‘(I) 12.5 percent by the end of 
fiscal year 2009. 
‘‘(II) 25 percent by the end of 
fiscal year 2010. 
‘‘(III) 50 percent by the end of 
fiscal year 2011. 
‘‘(IV) 75 percent by the end of 
fiscal year 2012. 
‘‘(V) 100 percent by the end of 
fiscal year 2013. 
‘‘(B) CONSIDERATION.—In selecting States 
under subparagraph (A)(ii), the Secretary shall 
consult with the States involved and take into 
account the feasibility of implementing asset 
verification programs in each such State. 
‘‘(C) STATES
SPECIFIED.—The States 
specified in this subparagraph are California, 
New York, and New Jersey. 
‘‘(D) CONSTRUCTION.—Nothing in sub-
paragraph (A)(ii) shall be construed as pre-
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venting a State from requesting, and the Sec-
retary approving, the implementation of an 
asset verification program in advance of the 
deadline otherwise established under such sub-
paragraph. 
‘‘(4) EXEMPTION OF TERRITORIES.—This sec-
tion shall only apply to the 50 States and the Dis-
trict of Columbia. 
‘‘(b) ASSET VERIFICATION PROGRAM.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, an asset verification program means a program 
described in paragraph (2) under which a State— 
‘‘(A) requires each applicant for, or recipi-
ent of, medical assistance under the State plan 
under this title on the basis of being aged, 
blind, or disabled to provide authorization by 
such applicant or recipient (and any other per-
son whose resources are material to the deter-
mination of the eligibility of the applicant or re-
cipient for such assistance) for the State to ob-
tain (subject to the cost reimbursement require-
ments of section 1115(a) of the Right to Finan-
cial Privacy Act but at no cost to the applicant 
or recipient) from any financial institution 
(within the meaning of section 1101(1) of such 
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Act) any financial record (within the meaning 
of section 1101(2) of such Act) held by the in-
stitution with respect to the applicant or recipi-
ent (and such other person, as applicable), 
whenever the State determines the record is 
needed in connection with a determination with 
respect to such eligibility for (or the amount or 
extent of) such medical assistance; and 
‘‘(B) uses the authorization provided under 
subparagraph (A) to verify the financial re-
sources of such applicant or recipient (and such 
other person, as applicable), in order to deter-
mine or redetermine the eligibility of such appli-
cant or recipient for medical assistance under 
the State plan. 
‘‘(2) PROGRAM
DESCRIBED.—A program de-
scribed in this paragraph is a program for verifying 
individual assets in a manner consistent with the ap-
proach used by the Commissioner of Social Security 
under section 1631(e)(1)(B)(ii). 
‘‘(c) DURATION
OF
AUTHORIZATION.—Notwith-
standing section 1104(a)(1) of the Right to Financial Pri-
vacy Act, an authorization provided to a State under sub-
section (b)(1) shall remain effective until the earliest of— 
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‘‘(1) the rendering of a final adverse decision on 
the applicant’s application for medical assistance 
under the State’s plan under this title; 
‘‘(2) the cessation of the recipient’s eligibility 
for such medical assistance; or 
‘‘(3) the express revocation by the applicant or 
recipient (or such other person described in sub-
section (b)(1), as applicable) of the authorization, in 
a written notification to the State. 
‘‘(d) TREATMENT OF RIGHT TO FINANCIAL PRIVACY 
ACT REQUIREMENTS.— 
‘‘(1) An authorization obtained by the State 
under subsection (b)(1) shall be considered to meet 
the requirements of the Right to Financial Privacy 
Act for purposes of section 1103(a) of such Act, and 
need not be furnished to the financial institution, 
notwithstanding section 1104(a) of such Act. 
‘‘(2) The certification requirements of section 
1103(b) of the Right to Financial Privacy Act shall 
not apply to requests by the State pursuant to an 
authorization provided under subsection (b)(1). 
‘‘(3) A request by the State pursuant to an au-
thorization provided under subsection (b)(1) is 
deemed to meet the requirements of section 
1104(a)(3) of the Right to Financial Privacy Act 
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and of section 1102 of such Act, relating to a rea-
sonable description of financial records. 
‘‘(e) REQUIRED DISCLOSURE.—The State shall in-
form any person who provides authorization pursuant to 
subsection (b)(1)(A) of the duration and scope of the au-
thorization. 
‘‘(f) REFUSAL
OR REVOCATION
OF AUTHORIZA-
TION.—If an applicant for, or recipient of, medical assist-
ance under the State plan under this title (or such other 
person described in subsection (b)(1), as applicable) re-
fuses to provide, or revokes, any authorization made by 
the applicant or recipient (or such other person, as appli-
cable) under subsection (b)(1)(A) for the State to obtain 
from any financial institution any financial record, the 
State may, on that basis, determine that the applicant or 
recipient is ineligible for medical assistance. 
‘‘(g) USE OF CONTRACTOR.—For purposes of imple-
menting an asset verification program under this section, 
a State may select and enter into a contract with a public 
or private entity meeting such criteria and qualifications 
as the State determines appropriate, consistent with re-
quirements in regulations relating to general contracting 
provisions and with section 1903(i)(2). In carrying out ac-
tivities under such contract, such an entity shall be subject 
to the same requirements and limitations on use and dis-
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closure of information as would apply if the State were 
to carry out such activities directly. 
‘‘(h) TECHNICAL ASSISTANCE.—The Secretary shall 
provide States with technical assistance to aid in imple-
mentation of an asset verification program under this sec-
tion. 
‘‘(i) REPORTS.—A State implementing an asset 
verification program under this section shall furnish to the 
Secretary such reports concerning the program, at such 
times, in such format, and containing such information 
as the Secretary determines appropriate. 
‘‘(j) TREATMENT
OF PROGRAM EXPENSES.—Not-
withstanding any other provision of law, reasonable ex-
penses of States in carrying out the program under this 
section shall be treated, for purposes of section 1903(a), 
in the same manner as State expenditures specified in 
paragraph (7) of such section.’’. 
(b) STATE PLAN REQUIREMENTS.—Section 1902(a) 
of such Act (42 U.S.C. 1396a(a)) is amended— 
(1) in paragraph (69) by striking ‘‘and’’ at the 
end; 
(2) in paragraph (70) by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by inserting after paragraph (70), as so 
amended, the following new paragraph: 
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‘‘(71) provide that the State will implement an 
asset verification program as required under section 
1940.’’. 
(c) WITHHOLDING
OF FEDERAL MATCHING PAY-
MENTS FOR NONCOMPLIANT STATES.—Section 1903(i) of 
such Act (42 U.S.C. 1396b(i)) is amended— 
(1) in paragraph (22) by striking ‘‘or’’ at the 
end; 
(2) in paragraph (23) by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by adding after paragraph (23) the fol-
lowing new paragraph: 
‘‘(24) if a State is required to implement an 
asset verification program under section 1940 and 
fails to implement such program in accordance with 
such section, with respect to amounts expended by 
such State for medical assistance for individuals 
subject to asset verification under such section, un-
less— 
‘‘(A) the State demonstrates to the Sec-
retary’s satisfaction that the State made a good 
faith effort to comply; 
‘‘(B) not later than 60 days after the date 
of a finding that the State is in noncompliance, 
the State submits to the Secretary (and the 
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Secretary approves) a corrective action plan to 
remedy such noncompliance; and 
‘‘(C) not later than 12 months after the 
date of such submission (and approval), the 
State fulfills the terms of such corrective action 
plan.’’. 
(d) REPEAL.—Section 4 of Public Law 110–90 is re-
pealed. 
SEC. 6. ADJUSTMENT TO PAQI FUND. 
Section 1848(l)(2) of the Social Security Act (42 
U.S.C. 1395w-4(l)(2)), as amended by section 101(a)(2) 
of the Medicare, Medicaid, and SCHIP Extension Act of 
2007 (Public Law 110-173), is amended— 
(1) in subparagraph (A)(i)— 
(A) 
in 
subclause 
(III), 
by 
striking 
‘‘$4,960,000,000’’ 
and 
inserting 
‘‘$3,790,000,000’’; and 
(B) by adding at the end the following new 
subclause: 
‘‘(IV) For expenditures during 
2014, 
an 
amount 
equal 
to 
$3,690,000,000.’’; 
(2) in subparagraph (A)(ii), by adding at the 
end the following new subclause: 
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‘‘(IV) 2014.—The amount avail-
able for expenditures during 2014 
shall only be available for an adjust-
ment to the update of the conversion 
factor under subsection (d) for that 
year.’’; and 
(3) in subparagraph (B)— 
(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 new 
clause: 
‘‘(iv) 2014 for payment with respect 
to physicians’ services furnished during 
2014.’’. 
Passed the House of Representatives April 23, 2008. 
Attest: 
LORRAINE C. MILLER, 
Clerk. 
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Calendar No. 719 
110TH CONGRESS 
2D SESSION 
H. R. 5613 
AN ACT 
To extend certain moratoria and impose additional 
moratoria 
on 
certain 
Medicaid 
regulations 
through April 1, 2009, and for other purposes. 
APRIL 28, 2008 
Read the second time and placed on the calendar 
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