IIB 
114TH CONGRESS 
2D SESSION 
H. R. 670 
IN THE SENATE OF THE UNITED STATES 
SEPTEMBER 21, 2016 
Received; read twice and referred to the Committee on Finance 
AN ACT 
To amend title XIX of the Social Security Act to extend 
the Medicaid rules regarding supplemental needs trusts 
for Medicaid beneficiaries to trusts established by those 
beneficiaries, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Special Needs Trust Fairness and Medicaid Improve-
ment Act’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Fairness in Medicaid supplemental needs trusts. 
Sec. 3. Medicaid coverage of tobacco cessation services for mothers of 
newborns. 
Sec. 4. Eliminating Federal financial participation with respect to expenditures 
under Medicaid for agents used for cosmetic purposes or hair 
growth. 
Sec. 5. Medicaid Improvement Fund. 
SEC. 2. FAIRNESS IN MEDICAID SUPPLEMENTAL NEEDS 
TRUSTS. 
(a) IN GENERAL.—Section 1917(d)(4)(A) of the So-
cial Security Act (42 U.S.C. 1396p(d)(4)(A)) is amended 
by inserting ‘‘the individual,’’ after ‘‘for the benefit of such 
individual by’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to trusts established on or after 
the date of the enactment of this Act. 
SEC. 3. MEDICAID COVERAGE OF TOBACCO CESSATION 
SERVICES FOR MOTHERS OF NEWBORNS. 
(a) IN GENERAL.—Section 1905(bb) of the Social Se-
curity Act (42 U.S.C. 1396d(bb)) is amended by adding 
at the end the following new paragraph: 
‘‘(4) A woman shall continue to be treated as de-
scribed in this subsection as a pregnant woman through 
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the end of the 1-year period beginning on the date of the 
birth of a child of the woman.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Subsections (a)(2)(B) and (b)(2)(B) of sec-
tion 1916 of the Social Security Act (42 U.S.C. 
1396o) are each amended by inserting ‘‘(and women 
described in section 1905(bb) as pregnant women 
pursuant to paragraph (4) of such section)’’ after 
‘‘tobacco cessation by pregnant women’’. 
(2) Section 1927(d)(2)(F) of the Social Secu-
rity Act (42 U.S.C. 1396r–8(d)(2)(F)) is amended 
by inserting ‘‘(and women described in section 
1905(bb) as pregnant women pursuant to paragraph 
(4) of such section)’’ after ‘‘pregnant women’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Subject to paragraph (2), 
the amendments made by this section shall apply 
with respect to items and services furnished on or 
after the date that is 2 years after the date of the 
enactment of this Act. 
(2) EXCEPTION FOR STATE LEGISLATION.—In 
the case of a State plan under title XIX of the So-
cial Security Act, which the Secretary of Health and 
Human Services determines requires State legisla-
tion in order for the plan to meet any requirement 
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imposed by amendments made by this section, the 
plan shall not be regarded as failing to comply with 
the requirements of such title solely on the basis of 
its failure to meet such an additional requirement 
before the first day of the first calendar quarter be-
ginning after the close of the first regular session of 
the State legislature that begins after the effective 
date specified in paragraph (1). For purposes of the 
previous sentence, in the case of a State that has a 
2-year legislative session, each year of the session 
shall be considered to be a separate regular session 
of the State legislature. 
(d) REPORT.—Not later than 2 years after the date 
of the enactment of this Act, the Inspector General of the 
Department of Health and Human Services shall submit 
to Congress a report that assesses the use of the tobacco 
cessation service benefit under the Medicaid program. 
Such report shall include an assessment of— 
(1) the extent that States are encouraging the 
use of such benefit, such as through promotion of 
beneficiary and provider awareness of such benefit; 
and 
(2) gaps in the delivery of such benefit. 
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SEC. 4. ELIMINATING FEDERAL FINANCIAL PARTICIPATION 
WITH RESPECT TO EXPENDITURES UNDER 
MEDICAID FOR AGENTS USED FOR COSMETIC 
PURPOSES OR HAIR GROWTH. 
(a) IN GENERAL.—Section 1903(i)(21) of the Social 
Security Act (42 U.S.C. 1396b(i)(21)) is amended by in-
serting ‘‘section 1927(d)(2)(C) (relating to drugs when 
used for cosmetic purposes or hair growth), except where 
medically necessary, and’’ after ‘‘drugs described in’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply with respect to calendar quar-
ters beginning on or after the date of the enactment of 
this Act. 
SEC. 5. MEDICAID IMPROVEMENT FUND. 
Section 1941(b) of the Social Security Act (42 U.S.C. 
1396w–1(b)) is amended— 
(1) in paragraph (2)— 
(A) by striking ‘‘under paragraph (1)’’ and 
inserting ‘‘under this subsection’’; and 
(B) by redesignating such paragraph as 
paragraph (3); and 
(2) by inserting after paragraph (1) the fol-
lowing new paragraph: 
‘‘(2) ADDITIONAL
FUNDING.—In addition to 
any funds otherwise made available to the Fund, 
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there shall be available to the Fund, for expendi-
tures from the Fund— 
‘‘(A) for fiscal year 2021, $10,000,000, to 
remain available until expended; and 
‘‘(B) for fiscal year 2022, $14,000,000, to 
remain available until expended.’’. 
Passed the House of Representatives September 20, 
2016. 
Attest: 
KAREN L. HAAS, 
Clerk. 
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