personal and environmental barriers created by 
the disability; and 
‘‘(ii) to restore skills to the individual for 
independent living, socialization, and effective 
life management. 
‘‘(C) Such services are furnished by an indi-
vidual or entity that— 
‘‘(i) is legally authorized to furnish such 
services under State law (or the State regu-
latory mechanism provided by State law) or 
meets such certification requirements that the 
Secretary may impose; and 
‘‘(ii) meets such other requirements as the 
Secretary may impose to assure the quality of 
the intensive outpatient services provided.’’. 
(c) PAYMENT.— 
(1) IN
GENERAL.—With respect to intensive 
outpatient 
services 
(as 
defined 
in 
section 
1861(ddd)(1) of the Social Security Act (as added 
by subsection (b)) furnished under the medicare pro-
gram, the amount of payment under such Act for 
such services shall be 80 percent of— 
(A) during 2008 and 2009, the reasonable 
costs of furnishing such services; and 
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(B) on or after January 1, 2010, the 
amount of payment established for such serv-
ices under the prospective payment system es-
tablished by the Secretary under paragraph (2) 
for such services. 
(2) ESTABLISHMENT OF PPS.— 
(A) IN GENERAL.—With respect to inten-
sive outpatient services (as defined in section 
1861(ddd)(1)) of the Social Security Act (as 
added by subsection (b)) furnished under the 
medicare program on or after January 1, 2010, 
the Secretary of Health and Human Services 
(in this paragraph referred to as the ‘‘Sec-
retary’’) shall establish a prospective payment 
system for payment for such services. Such sys-
tem shall include an adequate patient classifica-
tion system that reflects the differences in pa-
tient resource use and costs and shall provide 
for an annual update to the rates of payment 
established under the system. 
(B) ADJUSTMENTS.—In establishing the 
system under subparagraph (A), the Secretary 
shall provide for adjustments in the prospective 
payment amount for variations in wage and 
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wage-related costs, case mix, and such other 
factors as the Secretary determines appropriate. 
(C) COLLECTION OF DATA AND EVALUA-
TION.—In developing the system described in 
subparagraph (A), the Secretary may require 
providers of services under the medicare pro-
gram to submit such information to the Sec-
retary as the Secretary may require to develop 
the system, including the most recently avail-
able data. 
(D) REPORTS
TO
CONGRESS.—Not later 
than October 1 of each of 2008 and 2009, the 
Secretary shall submit to Congress a report on 
the progress of the Secretary in establishing the 
prospective payment system under this para-
graph. 
(d) 
CONFORMING
AMENDMENTS.—(1) 
Section 
1835(a)(2) of the Social Security Act (42 U.S.C. 
1395n(a)(2)) is amended— 
(A) in subparagraph (E), by striking ‘‘and’’ at 
the end; 
(B) in subparagraph (F), by striking the period 
at the end and inserting ‘‘; and’’; and 
(C) by inserting after subparagraph (F) the fol-
lowing new subparagraph: 
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‘‘(G) in the case of intensive outpatient 
services, (i) that those services are reasonably 
expected to improve or maintain the individual’s 
condition and functional level and to prevent re-
lapse or hospitalization, (ii) an individualized, 
written plan for furnishing such services has 
been established by a physician and is reviewed 
periodically by a physician or, to the extent per-
mitted under the laws of the State in which the 
services are furnished, a non-physician mental 
health professional, and (iii) such services are 
or were furnished while the individual is or was 
under the care of a physician or, to the extent 
permitted under the law of the State in which 
the services are furnished, a non-physician men-
tal health professional.’’. 
(2) Section 1861(s)(2)(B) of the Social Security Act 
(42 U.S.C. 1395x(s)(2)(B)) is amended by inserting ‘‘and 
intensive outpatient services’’ after ‘‘partial hospitalization 
services’’. 
(3) Section 1861(ff)(1) of the Social Security Act (42 
U.S.C. 1395x(ff)(1)) is amended— 
(A) by inserting ‘‘or, to the extent permitted 
under the law of the State in which the services are 
furnished, a non-physician mental health profes-
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sional,’’ after ‘‘under the supervision of a physician’’ 
and after ‘‘periodically reviewed by a physician’’; and 
(B) by striking ‘‘physician’s’’ and inserting ‘‘pa-
tient’s’’. 
(4) Section 1861(cc) of the Social Security Act (42 
U.S.C. 1395x(cc)) is amended— 
(A) in paragraph (1), in the matter preceding 
subparagraph (A), by striking ‘‘physician—’’ and in-
serting ‘‘physician or, to the extent permitted under 
the law of the State in which the services are fur-
nished, a non-physician mental health professional— 
’’; and 
(B) in paragraph (2)(E), by inserting before 
the semicolon at the end the following: ‘‘, except that 
a patient receiving social and psychological services 
under paragraph (1)(D) may be under the care of 
a non-physician mental health professional with re-
spect to such services to the extent permitted under 
the law of the State in which the services are fur-
nished’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to items and services furnished on 
or after January 1, 2008. 
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TITLE 
III—IMPROVING 
BENE-
FICIARY ACCESS TO MEDI-
CARE-COVERED SERVICES 
SEC. 301. EXCLUDING CLINICAL SOCIAL WORKER SERVICES 
FROM COVERAGE UNDER THE MEDICARE 
SKILLED NURSING FACILITY PROSPECTIVE 
PAYMENT SYSTEM AND CONSOLIDATED PAY-
MENT. 
(a) IN GENERAL.—Section 1888(e)(2)(A)(ii) of the 
Social Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is 
amended by inserting ‘‘clinical social worker services,’’ 
after ‘‘qualified psychologist services,’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
1861(hh)(2) of the Social Security Act (42 U.S.C. 
1395x(hh)(2)) is amended by striking ‘‘and other than 
services furnished to an inpatient of a skilled nursing facil-
ity which the facility is required to provide as a require-
ment for participation’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to items and services furnished on 
or after January 1, 2008. 
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SEC. 302. COVERAGE OF MARRIAGE AND FAMILY THERA-
PIST SERVICES. 
(a) COVERAGE OF SERVICES.—Section 1861(s)(2) of 
the Social Security Act (42 U.S.C. 1395x(s)(2)) is amend-
ed— 
(1) in subparagraph (Z), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (AA), by adding ‘‘and’’ at 
the end; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(BB) marriage and family therapist services 
(as defined in subsection (eee));’’. 
(b) DEFINITION.—Section 1861 of the Social Secu-
rity Act (42 U.S.C. 1395x), as amended by sections 
201(b) and 202(b), is amended by adding at the end the 
following new subsection: 
‘‘(eee) MARRIAGE AND FAMILY THERAPIST SERV-
ICES.—(1) The term ‘marriage and family therapist serv-
ices’ means services performed by a marriage and family 
therapist (as defined in paragraph (2)) for the diagnosis 
and treatment of mental illnesses, which the marriage and 
family therapist is legally authorized to perform under 
State law (or the State regulatory mechanism provided by 
State law) of the State in which such services are per-
formed, provided such services are covered under this title, 
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