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Payments made to a designated provider, a team of 
health care professionals operating with such a pro-
vider, or a health team for such services shall be 
treated as medical assistance for purposes of section 
1903(a), except that, during the first 2 fiscal year 
quarters that the State plan amendment is in effect, 
the Federal medical assistance percentage applicable 
to such payments shall be increased by 15 percent-
age points, but in no case may exceed 90 percent. 
‘‘(2) METHODOLOGY.— 
‘‘(A) IN GENERAL.—The State shall speci-
fy in the State plan amendment the method-
ology the State will use for determining pay-
ment for the provision of health home services. 
Such methodology for determining payment— 
‘‘(i) may be tiered to reflect, with re-
spect to each child with medically complex 
conditions provided such services by a des-
ignated provider, a team of health care 
professionals operating with such a pro-
vider, or a health team, the severity or 
number of each such child’s chronic condi-
tions, life-threatening illnesses, disabilities, 
or rare diseases, or the specific capabilities 
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of the provider, team of health care profes-
sionals, or health team; and 
‘‘(ii) shall be established consistent 
with section 1902(a)(30)(A). 
‘‘(B) ALTERNATE MODELS OF PAYMENT.— 
The methodology for determining payment for 
provision of health home services under this 
section shall not be limited to a per-member 
per-month basis and may provide (as proposed 
by the State and subject to approval by the 
Secretary) for alternate models of payment. 
‘‘(3) PLANNING GRANTS.— 
‘‘(A) IN GENERAL.—Beginning October 1, 
2022, the Secretary may award planning grants 
to States for purposes of developing a State 
plan amendment under this section. A planning 
grant awarded to a State under this paragraph 
shall remain available until expended. 
‘‘(B) STATE
CONTRIBUTION.—A State 
awarded a planning grant shall contribute an 
amount equal to the State percentage deter-
mined under section 1905(b) (without regard to 
section 5001 of Public Law 111–5) for each fis-
cal year for which the grant is awarded. 
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‘‘(C) LIMITATION.—The total amount of 
payments made to States under this paragraph 
shall not exceed $5,000,000. 
‘‘(d) COORDINATING CARE.— 
‘‘(1) HOSPITAL NOTIFICATION.—A State with a 
State plan amendment approved under this section 
shall require each hospital that is a participating 
provider under the State plan (or a waiver of such 
plan) to establish procedures for, in the case of a 
child with medically complex conditions who is en-
rolled in a health home pursuant to this section and 
seeks treatment in the emergency department of 
such hospital, notifying the health home of such 
child of such treatment. 
‘‘(2) EDUCATION
WITH
RESPECT
TO
AVAIL-
ABILITY OF HEALTH HOME SERVICES.—In order for 
a State plan amendment to be approved under this 
section, a State shall include in the State plan 
amendment a description of the State’s process for 
educating providers participating in the State plan 
(or a waiver of such plan) on the availability of 
health home services for children with medically 
complex conditions, including the process by which 
such providers can refer such children to a des-
ignated provider, team of health care professionals 
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operating such a provider, or health team for the 
purpose of establishing a health home through which 
such children may receive such services. 
‘‘(3) FAMILY EDUCATION.—In order for a State 
plan amendment to be approved under this section, 
a State shall include in the State plan amendment 
a description of the State’s process for educating 
families with children eligible to receive health home 
services pursuant to this section of the availability of 
such services. Such process shall include the partici-
pation of family-to-family entities or other public or 
private organizations or entities who provide out-
reach and information on the availability of health 
care items and services to families of individuals eli-
gible to receive medical assistance under the State 
plan (or a waiver of such plan). 
‘‘(4) MENTAL
HEALTH
COORDINATION.—A 
State with a State plan amendment approved under 
this section shall consult and coordinate, as appro-
priate, with the Secretary in addressing issues re-
garding the prevention and treatment of mental ill-
ness and substance use among children with medi-
cally complex conditions receiving health home serv-
ices under this section. 
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‘‘(e) GUIDANCE
ON COORDINATING CARE FROM 
OUT-OF-STATE PROVIDERS.— 
‘‘(1) IN GENERAL.—Not later than October 1, 
2020, the Secretary shall issue (and update as the 
Secretary determines necessary) guidance to State 
Medicaid directors on— 
‘‘(A) best practices for using out-of-State 
providers to provide care to children with medi-
cally complex conditions; 
‘‘(B) coordinating care for such children 
provided by such out-of-State providers (includ-
ing when provided in emergency and non-emer-
gency situations); 
‘‘(C) reducing barriers for such children 
receiving care from such providers in a timely 
fashion; and 
‘‘(D) processes for screening and enrolling 
such providers in the respective State plan (or 
a waiver of such plan), including efforts to 
streamline such processes or reduce the burden 
of such processes on such providers. 
‘‘(2) STAKEHOLDER
INPUT.—In carrying out 
paragraph (1), the Secretary shall issue a request 
for information to seek input from children with 
medically complex conditions and their families, 
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States, providers (including children’s hospitals, hos-
pitals, pediatricians, and other providers), managed 
care plans, children’s health groups, family and ben-
eficiary advocates, and other stakeholders with re-
spect to coordinating the care for such children pro-
vided by out-of-State providers. 
‘‘(f) MONITORING.—A State shall include in the State 
plan amendment— 
‘‘(1) a methodology for tracking avoidable hos-
pital readmissions and calculating savings that re-
sult from improved care coordination and manage-
ment under this section; 
‘‘(2) a proposal for use of health information 
technology in providing health home services under 
this section and improving service delivery and co-
ordination across the care continuum (including the 
use of wireless patient technology to improve coordi-
nation and management of care and patient adher-
ence to recommendations made by their provider); 
and 
‘‘(3) a methodology for tracking prompt and 
timely access to medically necessary care for children 
with medically complex conditions from out-of-State 
providers. 
‘‘(g) DATA COLLECTION.— 
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‘‘(1) PROVIDER REPORTING REQUIREMENTS.— 
In order to receive payments from a State under 
subsection (c), a designated provider, a team of 
health care professionals operating with such a pro-
vider, or a health team shall report to the State, at 
such time and in such form and manner as may be 
required by the State, the following information: 
‘‘(A) With respect to each such provider, 
team of health care professionals, or health 
team, the name, National Provider Identifica-
tion number, address, and specific health care 
services offered to be provided to children with 
medically complex conditions who have selected 
such provider, team of health care profes-
sionals, or health team as the health home of 
such children. 
‘‘(B) Information on all applicable meas-
ures for determining the quality of health home 
services provided by such provider, team of 
health care professionals, or health team, in-
cluding, to the extent applicable, child health 
quality measures and measures for centers of 
excellence for children with complex needs de-
veloped under this title, title XXI, and section 
1139A. 
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‘‘(C) Such other information as the Sec-
retary shall specify in guidance. 
When appropriate and feasible, such provider, team 
of health care professionals, or health team, as the 
case may be, shall use health information technology 
in providing the State with such information. 
‘‘(2) STATE REPORTING REQUIREMENTS.— 
‘‘(A) COMPREHENSIVE REPORT.—A State 
with a State plan amendment approved under 
this section shall report to the Secretary (and, 
upon request, to the Medicaid and CHIP Pay-
ment and Access Commission), at such time 
and in such form and manner determined by 
the Secretary to be reasonable and minimally 
burdensome, the following information: 
‘‘(i) Information reported under para-
graph (1). 
‘‘(ii) The number of children with 
medically complex conditions who have se-
lected a health home pursuant to this sec-
tion. 
‘‘(iii) The nature, number, and preva-
lence of chronic conditions, life-threatening 
illnesses, disabilities, or rare diseases that 
such children have. 
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‘‘(iv) The type of delivery systems and 
payment models used to provide services to 
such children under this section. 
‘‘(v) The number and characteristics 
of designated providers, teams of health 
care professionals operating with such pro-
viders, and health teams selected as health 
homes pursuant to this section, including 
the number and characteristics of out-of- 
State providers, teams of health care pro-
fessionals operating with such providers, 
and health teams who have provided health 
care items and services to such children. 
‘‘(vi) The extent to which such chil-
dren receive health care items and services 
under the State plan. 
‘‘(vii) Quality measures developed spe-
cifically with respect to health care items 
and services provided to children with 
medically complex conditions. 
‘‘(B) REPORT ON BEST PRACTICES.—Not 
later than 90 days after a State has a State 
plan amendment approved under this section, 
such State shall submit to the Secretary, and 
make publicly available on the appropriate 
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State website, a report on how the State is im-
plementing guidance issued under subsection 
(e)(1), including through any best practices 
adopted by the State. 
‘‘(h) RULE OF CONSTRUCTION.—Nothing in this sec-
tion may be construed— 
‘‘(1) to require a child with medically complex 
conditions to enroll in a health home under this sec-
tion; 
‘‘(2) to limit the choice of a child with medically 
complex conditions in selecting a designated pro-
vider, team of health care professionals operating 
with such a provider, or health team that meets the 
health home qualification standards established 
under subsection (b) as the child’s health home; or 
‘‘(3) to reduce or otherwise modify— 
‘‘(A) the entitlement of children with medi-
cally complex conditions to early and periodic 
screening, diagnostic, and treatment services 
(as defined in section 1905(r)); or 
‘‘(B) the informing, providing, arranging, 
and reporting requirements of a State under 
section 1902(a)(43). 
‘‘(i) DEFINITIONS.—In this section: 
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‘‘(1) CHILD WITH MEDICALLY COMPLEX CONDI-
TIONS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the term ‘child with medically com-
plex conditions’ means an individual under 21 
years of age who— 
‘‘(i) is eligible for medical assistance 
under the State plan (or under a waiver of 
such plan); and 
‘‘(ii) has at least— 
‘‘(I) one or more chronic condi-
tions that cumulatively affect three or 
more organ systems and severely re-
duces cognitive or physical functioning 
(such as the ability to eat, drink, or 
breathe independently) and that also 
requires the use of medication, dura-
ble medical equipment, therapy, sur-
gery, or other treatments; or 
‘‘(II) one life-limiting illness or 
rare pediatric disease (as defined in 
section 529(a)(3) of the Federal 
Food, Drug, and Cosmetic Act (21 
U.S.C. 360ff(a)(3))). 
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‘‘(B) RULE OF CONSTRUCTION.—Nothing 
in this paragraph shall prevent the Secretary 
from establishing higher levels as to the number 
or severity of chronic, life threatening illnesses, 
disabilities, rare diseases or mental health con-
ditions for purposes of determining eligibility 
for receipt of health home services under this 
section. 
‘‘(2) CHRONIC CONDITION.—The term ‘chronic 
condition’ means a serious, long-term physical, men-
tal, or developmental disability or disease, including 
the following: 
‘‘(A) Cerebral palsy. 
‘‘(B) Cystic fibrosis. 
‘‘(C) HIV/AIDS. 
‘‘(D) Blood diseases, such as anemia or 
sickle cell disease. 
‘‘(E) Muscular dystrophy. 
‘‘(F) Spina bifida. 
‘‘(G) Epilepsy. 
‘‘(H) Severe autism spectrum disorder. 
‘‘(I) Serious emotional disturbance or seri-
ous mental health illness. 
‘‘(3) HEALTH HOME.—The term ‘health home’ 
means a designated provider (including a provider 
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that operates in coordination with a team of health 
care professionals) or a health team selected by a 
child with medically complex conditions (or the fam-
ily of such child) to provide health home services. 
‘‘(4) HEALTH HOME SERVICES.— 
‘‘(A) IN
GENERAL.—The term ‘health 
home services’ means comprehensive and timely 
high-quality services described in subparagraph 
(B) that are provided by a designated provider, 
a team of health care professionals operating 
with such a provider, or a health team. 
‘‘(B) SERVICES DESCRIBED.—The services 
described in this subparagraph shall include— 
‘‘(i) comprehensive care management; 
‘‘(ii) care coordination, health pro-
motion, and providing access to the full 
range of pediatric specialty and sub-
specialty medical services, including serv-
ices from out-of-State providers, as medi-
cally necessary; 
‘‘(iii) comprehensive transitional care, 
including appropriate follow-up, from inpa-
tient to other settings; 
‘‘(iv) patient and family support (in-
cluding authorized representatives); 
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‘‘(v) referrals to community and social 
support services, if relevant; and 
‘‘(vi) use of health information tech-
nology to link services, as feasible and ap-
propriate. 
‘‘(5) DESIGNATED PROVIDER.—The term ‘des-
ignated provider’ means a physician (including a pe-
diatrician or a pediatric specialty or subspecialty 
provider), children’s hospital, clinical practice or 
clinical group practice, prepaid inpatient health plan 
or prepaid ambulatory health plan (as defined by the 
Secretary), rural clinic, community health center, 
community mental health center, home health agen-
cy, or any other entity or provider that is deter-
mined by the State and approved by the Secretary 
to be qualified to be a health home for children with 
medically complex conditions on the basis of docu-
mentation evidencing that the entity has the sys-
tems, expertise, and infrastructure in place to pro-
vide health home services. Such term may include 
providers who are employed by, or affiliated with, a 
children’s hospital. 
‘‘(6) 
TEAM
OF
HEALTH
CARE
PROFES-
SIONALS.—The term ‘team of health care profes-
sionals’ means a team of health care professionals 
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(as described in the State plan amendment under 
this section) that may— 
‘‘(A) include— 
‘‘(i) physicians and other profes-
sionals, such as pediatricians or pediatric 
specialty or subspecialty providers, nurse 
care coordinators, dietitians, nutritionists, 
social workers, behavioral health profes-
sionals, physical therapists, occupational 
therapists, speech pathologists, nurses, in-
dividuals with experience in medical sup-
portive technologies, or any professionals 
determined to be appropriate by the State 
and approved by the Secretary; 
‘‘(ii) an entity or individual who is 
designated to coordinate such a team; and 
‘‘(iii) 
community 
health 
workers, 
translators, and other individuals with cul-
turally-appropriate expertise; and 
‘‘(B) be freestanding, virtual, or based at 
a children’s hospital, hospital, community 
health center, community mental health center, 
rural clinic, clinical practice or clinical group 
practice, academic health center, or any entity 
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determined to be appropriate by the State and 
approved by the Secretary. 
‘‘(7) HEALTH TEAM.—The term ‘health team’ 
has the meaning given such term for purposes of 
section 3502 of Public Law 111–148.’’. 
TITLE II—OTHER MEDICAID 
SEC. 201. EXTENSION OF MONEY FOLLOWS THE PERSON 
REBALANCING DEMONSTRATION. 
(a) GENERAL FUNDING.—Section 6071(h) of the 
Deficit Reduction Act of 2005 (42 U.S.C. 1396a note) is 
amended— 
(1) in paragraph (1)— 
(A) in subparagraph (D), by striking 
‘‘and’’ after the semicolon; 
(B) in subparagraph (E), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(F) 
subject 
to 
paragraph 
(3), 
$112,000,000 for fiscal year 2019.’’; 
(2) in paragraph (2)— 
(A) by striking ‘‘Amounts made’’ and in-
serting ‘‘Subject to paragraph (3), amounts 
made’’; and 
(B) by striking ‘‘September 30, 2016’’ and 
inserting ‘‘September 30, 2021’’; and 
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(3) by adding at the end the following new 
paragraph: 
‘‘(3) SPECIAL RULE FOR FY 2019.—Funds ap-
propriated under paragraph (1)(F) shall be made 
available for grants to States only if such States 
have an approved MFP demonstration project under 
this section as of December 31, 2018.’’. 
(b) FUNDING FOR QUALITY ASSURANCE AND IM-
PROVEMENT; TECHNICAL
ASSISTANCE; OVERSIGHT.— 
Section 6071(f) of the Deficit Reduction Act of 2005 (42 
U.S.C. 1396a note) is amended by striking paragraph (2) 
and inserting the following: 
‘‘(2) FUNDING.—From the amounts appro-
priated under subsection (h)(1)(F) for fiscal year 
2019, $500,000 shall be available to the Secretary 
for such fiscal year to carry out this subsection.’’. 
(c) TECHNICAL AMENDMENT.—Section 6071(b) of 
the Deficit Reduction Act of 2005 (42 U.S.C. 1396a note) 
is amended by adding at the end the following: 
‘‘(10) 
SECRETARY.—The 
term 
‘Secretary’ 
means the Secretary of Health and Human Serv-
ices.’’. 
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SEC. 202. EXTENSION OF PROTECTION FOR MEDICAID RE-
CIPIENTS OF HOME AND COMMUNITY-BASED 
SERVICES AGAINST SPOUSAL IMPOVERISH-
MENT. 
(a) IN GENERAL.—Section 2404 of Public Law 111– 
148 (42 U.S.C. 1396r–5 note) is amended by striking ‘‘the 
5-year period that begins on January 1, 2014,’’ and in-
serting ‘‘the period beginning on January 1, 2014, and 
ending on March 31, 2019,’’. 
(b) RULE OF CONSTRUCTION.— 
(1) PROTECTING STATE SPOUSAL INCOME AND 
ASSET
DISREGARD
FLEXIBILITY
UNDER
WAIVERS 
AND PLAN AMENDMENTS.—Nothing in section 2404 
of Public Law 111–148 (42 U.S.C. 1396r–5 note) or 
section 1924 of the Social Security Act (42 U.S.C. 
1396r–5) shall be construed as prohibiting a State 
from disregarding an individual’s spousal income 
and assets under a State waiver or plan amendment 
described in paragraph (2) for purposes of making 
determinations of eligibility for home and commu-
nity-based services or home and community-based 
attendant services and supports under such waiver 
or plan amendment. 
(2) STATE WAIVER OR PLAN AMENDMENT DE-
SCRIBED.—A State waiver or plan amendment de-
scribed in this paragraph is any of the following: 
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(A) A waiver or plan amendment to pro-
vide medical assistance for home and commu-
nity-based services under a waiver or plan 
amendment under subsection (c), (d), or (i) of 
section 1915 of the Social Security Act (42 
U.S.C. 1396n) or under section 1115 of such 
Act (42 U.S.C. 1315). 
(B) A plan amendment to provide medical 
assistance for home and community-based serv-
ices for individuals by reason of being deter-
mined eligible under section 1902(a)(10)(C) of 
such Act (42 U.S.C. 1396a(a)(10)(C)) or by 
reason of section 1902(f) of such Act (42 
U.S.C. 1396a(f)) or otherwise on the basis of a 
reduction of income based on costs incurred for 
medical or other remedial care under which the 
State disregarded the income and assets of the 
individual’s spouse in determining the initial 
and ongoing financial eligibility of an individual 
for such services in place of the spousal impov-
erishment provisions applied under section 1924 
of such Act (42 U.S.C. 1396r–5). 
(C) A plan amendment to provide medical 
assistance for home and community-based at-
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tendant services and supports under section 
1915(k) of such Act (42 U.S.C. 1396n(k)). 
SEC. 203. REDUCTION IN FMAP AFTER 2020 FOR STATES 
WITHOUT ASSET VERIFICATION PROGRAM. 
Section 1940 of the Social Security Act (42 U.S.C. 
1396w) is amended by adding at the end the following 
new subsection: 
‘‘(k) REDUCTION IN FMAP AFTER 2020 FOR NON- 
COMPLIANT STATES.— 
‘‘(1) IN GENERAL.—With respect to a calendar 
quarter beginning on or after January 1, 2021, the 
Federal medical assistance percentage otherwise de-
termined under section 1905(b) for a non-compliant 
State shall be reduced— 
‘‘(A) for calendar quarters in 2021 and 
2022, by 0.12 percentage points; 
‘‘(B) for calendar quarters in 2023, by 
0.25 percentage points; 
‘‘(C) for calendar quarters in 2024, by 
0.35 percentage points; and 
‘‘(D) for calendar quarters in 2025 and 
each year thereafter, by 0.5 percentage points. 
‘‘(2) NON-COMPLIANT
STATE
DEFINED.—For 
purposes of this subsection, the term ‘non-compliant 
State’ means a State— 
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‘‘(A) that is one of the 50 States or the 
District of Columbia; 
‘‘(B) with respect to which the Secretary 
has not approved a State plan amendment sub-
mitted under subsection (a)(2); and 
‘‘(C) that is not operating, on an ongoing 
basis, an asset verification program in accord-
ance with this section.’’. 
SEC. 204. DENIAL OF FFP FOR CERTAIN EXPENDITURES RE-
LATING TO VACUUM ERECTION SYSTEMS 
AND PENILE PROSTHETIC IMPLANTS. 
(a) IN GENERAL.—Section 1903(i) of the Social Se-
curity Act (42 U.S.C. 1396b(i)) is amended by inserting 
after paragraph (11) the following: 
‘‘(12) with respect to any amounts expended 
for— 
‘‘(A) a vacuum erection system that is not 
medically necessary; or 
‘‘(B) the insertion, repair, or removal and 
replacement of a penile prosthetic implant (un-
less such insertion, repair, or removal and re-
placement is medically necessary); or’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply with respect to items and serv-
ices furnished on or after January 1, 2019. 
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HR 7217 RDS
SEC. 205. MEDICAID IMPROVEMENT FUND. 
Section 1941(b)(1) of the Social Security Act (42 
U.S.C. 
1396w–1(b)(1)) 
is 
amended 
by 
striking 
‘‘$31,000,000’’ and inserting ‘‘$9,000,000’’. 
SEC. 206. PREVENTING THE MISCLASSIFICATION OF DRUGS 
UNDER THE MEDICAID DRUG REBATE PRO-
GRAM. 
(a) APPLICATION OF CIVIL MONEY PENALTY FOR 
MISCLASSIFICATION
OF
COVERED
OUTPATIENT 
DRUGS.— 
(1) IN GENERAL.—Section 1927(b)(3) of the 
Social Security Act (42 U.S.C. 1396r–8(b)(3)) is 
amended— 
(A) in the paragraph heading, by inserting 
‘‘AND DRUG PRODUCT’’ after ‘‘PRICE’’; 
(B) in subparagraph (A)— 
(i) in clause (ii), by striking ‘‘; and’’ 
at the end and inserting a semicolon; 
(ii) in clause (iii), by striking the pe-
riod at the end and inserting a semicolon; 
(iii) in clause (iv), by striking the 
semicolon at the end and inserting ‘‘; 
and’’; and 
(iv) by inserting after clause (iv) the 
following new clause: 
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‘‘(v) not later than 30 days after the 
last day of each month of a rebate period 
under the agreement, such drug product 
information as the Secretary shall require 
for each of the manufacturer’s covered out-
patient drugs.’’; and 
(C) in subparagraph (C)— 
(i) in clause (ii), by inserting ‘‘, in-
cluding information related to drug pric-
ing, drug product information, and data 
related to drug pricing or drug product in-
formation,’’ after ‘‘provides false informa-
tion’’; and 
(ii) by adding at the end the following 
new clauses: 
‘‘(iii) 
MISCLASSIFIED
OR 
MISREPORTED INFORMATION.— 
‘‘(I) IN
GENERAL.—Any manu-
facturer with an agreement under this 
section that knowingly (as defined in 
section 1003.110 of title 42, Code of 
Federal Regulations (or any successor 
regulation)) misclassifies a covered 
outpatient drug, such as by knowingly 
submitting incorrect drug category in-
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formation, is subject to a civil money 
penalty for each covered outpatient 
drug that is misclassified in an 
amount not to exceed 2 times the 
amount of the difference, as deter-
mined by the Secretary, between— 
‘‘(aa) the total amount of 
rebates that the manufacturer 
paid with respect to the drug to 
all States for all rebate periods 
during 
which 
the 
drug 
was 
misclassified; and 
‘‘(bb) the total amount of 
rebates that the manufacturer 
would have been required to pay, 
as determined by the Secretary, 
with respect to the drug to all 
States for all rebate periods dur-
ing 
which 
the 
drug 
was 
misclassified if the drug had been 
correctly classified. 
‘‘(II) OTHER
PENALTIES
AND 
RECOVERY
OF
UNDERPAID
RE-
BATES.—The civil money penalties de-
scribed in subclause (I) are in addi-
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