196 
provided under the waiver, the length 
of time that such individuals have re-
ceived such service; 
‘‘(III) a comparison between the 
data described in subclause (I) and 
any comparable data available with 
respect to individuals with respect to 
whom a determination described in 
paragraph (1) has been made and 
with respect to individuals receiving 
institutional care under this title; and 
‘‘(IV) the number of individuals 
who have received home and commu-
nity-based services under the waiver 
during the preceding year.’’. 
(c) NON-APPLICATION OF THE PAPERWORK REDUC-
TION ACT.—Chapter 35 of title 44, United States Code 
(commonly referred to as the ‘‘Paperwork Reduction Act 
of 1995’’), shall not apply to the implementation of the 
amendments made by subsections (a) and (b). 
(d) CMS GUIDANCE TO STATES ON INTERIM COV-
ERAGE UNDER SECTION 1915 HOME AND COMMUNITY- 
BASED SERVICES AUTHORITIES.—Not later than January 
1, 2027, the Secretary of Health and Human Services 
shall issue guidance to the States to clarify how a State 
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may provide, with respect to an individual who is eligible 
for home and community-based services under section 
1915 of the Social Security Act (42 U.S.C. 1396n), cov-
erage of such services pursuant to a provisional written 
plan of care, pending finalization, with respect to such in-
dividual. 
(e) FUNDING.— 
(1) IN GENERAL.—There are appropriated, out 
of any funds in the Treasury not otherwise obli-
gated, $71,000,000 for fiscal year 2025, to remain 
available until expended, to the Secretary of Health 
and Human Services for purposes of carrying out 
subsection (d) and the amendments made by sub-
section (b). 
(2) RESERVATION FOR PLANNING GRANTS.—Of 
the amount appropriated under paragraph (1), the 
Secretary of Health and Human Services shall re-
serve $50,000,000 of such amount to award plan-
ning grants under the demonstration program estab-
lished by the amendments made by subsection (b). 
SEC. 103. REMOVING CERTAIN AGE RESTRICTIONS ON MED-
ICAID ELIGIBILITY FOR WORKING ADULTS 
WITH DISABILITIES. 
(a) MODIFICATION OF OPTIONAL BUY-IN GROUPS.— 
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(1) 
IN
GENERAL.—Section 
1902(a)(10)(A)(ii)(XV) of the Social Security Act 
(42 U.S.C. 1396a(a)(10)(A)(ii)(XV)) is amended by 
striking ‘‘but less than 65,’’. 
(2) 
DEFINITION
MODIFICATION.—Section 
1905(v)(1)(A) of the Social Security Act (42 U.S.C. 
1396d(v)(1)(A)) is amended by striking ‘‘, but less 
than 65,’’. 
(b) APPLICATION
TO CERTAIN STATES.—A State 
that, as of the date of enactment of this Act, provides for 
making medical assistance available to individuals de-
scribed 
in 
subclause 
(XV) 
or 
(XVI) 
of 
section 
1902(a)(10)(A)(ii) of the Social Security Act (42 U.S.C. 
1396a(a)(10)(A)(ii)) shall not be regarded as failing to 
comply with the requirements of either such subclause (as 
amended 
by 
subsection 
(a)(1)) 
or 
with 
section 
1905(v)(1)(A) of the Social Security Act (42 U.S.C. 
1396d(v)(1)(A)) (as amended by subsection (a)(2)) before 
January 1, 2027. 
SEC. 104. MEDICAID STATE PLAN REQUIREMENT FOR DE-
TERMINING RESIDENCY AND COVERAGE FOR 
MILITARY FAMILIES. 
(a) IN GENERAL.—Section 1902 of the Social Secu-
rity Act (42 U.S.C. 1396a) is amended— 
(1) in subsection (a)— 
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(A) in paragraph (86), by striking ‘‘and’’ 
at the end; 
(B) in paragraph (87), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by inserting after paragraph (87), the 
following new paragraph: 
‘‘(88) beginning January 1, 2028, provide, with 
respect to an active duty relocated individual (as de-
fined in subsection (uu)(1))— 
‘‘(A) that, for purposes of determining eli-
gibility for medical assistance under the State 
plan (or waiver of such plan), such active duty 
relocated individual is treated as a resident of 
the State unless such individual voluntarily 
elects not to be so treated for such purposes; 
‘‘(B) that if, at the time of relocation (as 
described in subsection (uu)(1)), such active 
duty relocated individual is on a home and com-
munity-based services waiting list (as defined in 
subsection (uu)(2)), such individual remains on 
such list until— 
‘‘(i) the State completes an assess-
ment and renders a decision with respect 
to the eligibility of such individual to re-
ceive the relevant home and community- 
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based services at the time a slot for such 
services becomes available and, in the case 
such decision is a denial of such eligibility, 
such individual has exhausted the individ-
ual’s opportunity for a fair hearing; or 
‘‘(ii) such individual elects to be re-
moved from such list; and 
‘‘(C) payment for medical assistance fur-
nished under the State plan (or a waiver of the 
plan) on behalf of such active duty relocated in-
dividual in the military service relocation State 
(as referred to in subsection (uu)(1)(B)(i)), to 
the extent that such assistance is available in 
such military service relocation State in accord-
ance with such guidance as the Secretary may 
issue to ensure access to such assistance.’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(uu) ACTIVE DUTY RELOCATED INDIVIDUAL; HOME 
AND COMMUNITY-BASED SERVICES WAITING LIST.—For 
purposes of subsection (a)(88) and this subsection: 
‘‘(1) ACTIVE DUTY RELOCATED INDIVIDUAL.— 
The term ‘active duty relocated individual’ means an 
individual— 
‘‘(A) who— 
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‘‘(i) is enrolled under the State plan 
(or waiver of such plan); or 
‘‘(ii) with respect to an individual de-
scribed in subparagraph (C)(ii), would be 
so 
enrolled 
pursuant 
to 
subsection 
(a)(10)(A)(ii)(VI) if such individual began 
receiving home and community-based serv-
ices; 
‘‘(B) who— 
‘‘(i) is a member of the Armed Forces 
engaged in active duty service and is relo-
cated to another State (in this subsection 
referred to as the ‘military service reloca-
tion State’) by reason of such service; 
‘‘(ii) would be described in clause (i) 
except that the individual stopped being 
engaged in active duty service (including 
by reason of retirement from such service) 
and the last day on which the individual 
was engaged in active duty service oc-
curred not more than 12 months ago; or 
‘‘(iii) is a dependent (as defined by 
the Secretary) of a member described in 
clause (i) or (ii) who relocates to the mili-
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tary service relocation State with such 
member; and 
‘‘(C) who— 
‘‘(i) was receiving home and commu-
nity-based services (as defined in section 
9817(a)(2)(B) of the American Rescue 
Plan Act of 2021) at the time of such relo-
cation; or 
‘‘(ii) if the State maintains a home 
and community-based services waiting list, 
was on such home and community-based 
services waiting list at the time of such re-
location. 
‘‘(2) HOME AND COMMUNITY-BASED SERVICES 
WAITING LIST.—The term ‘home and community- 
based services waiting list’ means, in the case of a 
State that has a limit on the number of individuals 
who may receive home and community-based services 
under section 1115(a), section 1915(c), or section 
1915(j), a list maintained by such State of individ-
uals who are requesting to receive such services 
under 1 or more such sections but for whom the 
State has not yet completed an assessment and ren-
dered a decision with respect to the eligibility of 
such individuals to receive the relevant home and 
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community-based services at the time a slot for such 
services becomes available due to such limit.’’. 
(b) IMPLEMENTATION FUNDING.—There are appro-
priated, out of any funds in the Treasury not otherwise 
obligated, $1,000,000 for each of fiscal years 2025 
through 2029, to remain available until expended, to the 
Secretary of Health and Human Services for purposes of 
implementing the amendments made by subsection (a). 
SEC. 105. ENSURING THE RELIABILITY OF ADDRESS INFOR-
MATION PROVIDED UNDER THE MEDICAID 
PROGRAM. 
(a) IN GENERAL.—Section 1902(a) of the Social Se-
curity Act (42 U.S.C. 1396a(a)), as previously amended 
by this title, is amended— 
(1) in paragraph (87), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (88), by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by inserting after paragraph (88) the fol-
lowing new paragraph: 
‘‘(89) beginning January 1, 2026, provide for a 
process to regularly obtain address information for 
individuals enrolled under such plan (or a waiver of 
such plan) from reliable data sources (as described 
in section 435.919(f)(1)(iii) of title 42, Code of Fed-
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204 
eral Regulations (or a successor regulation)) and act 
on any changes to such an address based on such in-
formation in accordance with such section (or suc-
cessor regulation), except that this paragraph shall 
only apply in the case of the 50 States and the Dis-
trict of Columbia.’’. 
(b) APPLICATION TO CHIP.—Section 2107(e)(1) of 
the Social Security Act (42 U.S.C. 1397gg(e)(1)) is 
amended— 
(1) 
by 
redesignating 
subparagraphs 
(H) 
through (U) as subparagraphs (I) through (V), re-
spectively; and 
(2) by inserting after subparagraph (G) the fol-
lowing new subparagraph: 
‘‘(H) Section 1902(a)(89) (relating to reg-
ularly obtaining address information for enroll-
ees).’’. 
(c) ENSURING TRANSMISSION OF ADDRESS INFOR-
MATION FROM MANAGED CARE ORGANIZATIONS.—Sec-
tion 1932 of the Social Security Act (42 U.S.C. 1396u– 
2) is amended by adding at the end the following new sub-
section: 
‘‘(j) TRANSMISSION OF ADDRESS INFORMATION.— 
Beginning January 1, 2026, each contract under a State 
plan with a managed care entity under section 1903(m) 
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shall provide that the entity transmits to the State any 
address information for an individual enrolled with the en-
tity that is provided to such entity directly from, or 
verified by such entity directly with, such individual.’’. 
SEC. 
106. 
CODIFYING 
CERTAIN 
MEDICAID 
PROVIDER 
SCREENING REQUIREMENTS RELATED TO 
DECEASED PROVIDERS. 
Section 1902(kk)(1) of the Social Security Act (42 
U.S.C. 1396a(kk)(1)) is amended— 
(1) by striking ‘‘The State’’ and inserting: 
‘‘(A) IN GENERAL.—The State’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B) ADDITIONAL
PROVIDER
SCREEN-
ING.—Beginning January 1, 2027, as part of 
the enrollment (or reenrollment or revalidation 
of enrollment) of a provider or supplier under 
this title, and not less frequently than quarterly 
during the period that such provider or supplier 
is so enrolled, the State conducts a check of the 
Death Master File (as such term is defined in 
section 203(d) of the Bipartisan Budget Act of 
2013) to determine whether such provider or 
supplier is deceased.’’. 
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SEC. 107. MODIFYING CERTAIN STATE REQUIREMENTS FOR 
ENSURING DECEASED INDIVIDUALS DO NOT 
REMAIN ENROLLED. 
Section 1902 of the Social Security Act (42 U.S.C. 
1396a), as previously amended by this title, is amended— 
(1) in subsection (a)— 
(A) in paragraph (88), by striking ‘‘; and’’ 
and inserting a semicolon; 
(B) in paragraph (89), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by inserting after paragraph (89) the 
following new paragraph: 
‘‘(90) provide that the State shall comply with 
the eligibility verification requirements under sub-
section (vv), except that this paragraph shall apply 
only in the case of the 50 States and the District 
of Columbia.’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(vv) VERIFICATION OF CERTAIN ELIGIBILITY CRI-
TERIA.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a)(90), the eligibility verification requirements, be-
ginning January 1, 2026, are as follows: 
‘‘(A) QUARTERLY SCREENING TO VERIFY 
ENROLLEE STATUS.—The State shall, not less 
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frequently than quarterly, review the Death 
Master File (as such term is defined in section 
203(d) of the Bipartisan Budget Act of 2013) 
to determine whether any individuals enrolled 
for medical assistance under the State plan (or 
waiver of such plan) are deceased. 
‘‘(B) 
DISENROLLMENT
UNDER
STATE 
PLAN.—If the State determines, based on infor-
mation obtained from the Death Master File, 
that an individual enrolled for medical assist-
ance under the State plan (or waiver of such 
plan) is deceased, the State shall— 
‘‘(i) treat such information as factual 
information confirming the death of a ben-
eficiary for purposes of section 431.213(a) 
of title 42, Code of Federal Regulations (or 
any successor regulation); 
‘‘(ii) disenroll such individual from the 
State plan (or waiver of such plan); and 
‘‘(iii) discontinue any payments for 
medical assistance under this title made on 
behalf of such individual (other than pay-
ments for any items or services furnished 
to such individual prior to the death of 
such individual). 
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‘‘(C) REINSTATEMENT
OF
COVERAGE
IN 
THE EVENT OF ERROR.—If a State determines 
that an individual was misidentified as deceased 
based on information obtained from the Death 
Master File, and was erroneously disenrolled 
from medical assistance under the State plan 
(or waiver of such plan) based on such 
misidentification, the State shall immediately 
reenroll such individual under the State plan 
(or waiver of such plan), retroactive to the date 
of such disenrollment. 
‘‘(2) RULE OF CONSTRUCTION.—Nothing under 
this subsection shall be construed to preclude the 
ability of a State to use other electronic data sources 
to timely identify potentially deceased beneficiaries, 
so long as the State is also in compliance with the 
requirements of this subsection (and all other re-
quirements under this title relating to Medicaid eli-
gibility determination and redetermination).’’. 
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SEC. 108. ONE-YEAR DELAY OF MEDICAID AND CHIP RE-
QUIREMENTS FOR HEALTH SCREENINGS, RE-
FERRALS, AND CASE MANAGEMENT SERV-
ICES FOR ELIGIBLE JUVENILES IN PUBLIC 
INSTITUTIONS; STATE INTERIM WORK PLANS. 
(a) IN GENERAL.—Section 5121(d) of subtitle C of 
title V of division FF of the Consolidated Appropriations 
Act, 2023 (Public Law 117–328) is amended— 
(1) by striking ‘‘The amendments made by this 
section’’ and inserting the following: 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
the amendments made by this section’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) DELAY OF DATE BY WHICH STATES MUST 
COMPLY
WITH
CERTAIN
JUVENILE
JUSTICE-RE-
LATED REQUIREMENTS.—A State shall not be re-
garded as failing to comply with the requirements of 
section 1902(a)(84)(D) or 2102(d)(2) of the Social 
Security 
Act 
(42 
U.S.C. 
1396a(a)(84)(D), 
1397bb(d)(2)) before January 1, 2026.’’. 
(b) CLARIFYING NONAPPLICATION
OF REQUIRE-
MENTS TO INDIVIDUALS IN FEDERAL CUSTODY.— 
(1) MEDICAID.— 
(A) 
Subparagraph 
(D) 
of 
section 
1902(a)(84) of the Social Security Act (42 
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U.S.C. 1396a(a)(84)), as added by section 5121 
of subtitle C of title V of division FF of the 
Consolidated Appropriations Act, 2023 (Public 
Law 117–328), is amended by striking ‘‘an in-
dividual who is an eligible juvenile’’ and insert-
ing ‘‘an individual (other than an individual 
who is in Federal custody, including as an in-
mate in a Federal prison) who is an eligible ju-
venile’’. 
(B) Section 5122(a) of subtitle C of title 
V of division FF of the Consolidated Appropria-
tions Act, 2023 (Public Law 117–328) is 
amended— 
(i) by striking ‘‘paragraph (31)’’ each 
place it appears and inserting ‘‘the last 
numbered paragraph’’; and 
(ii) in paragraph (1), by striking ‘‘an 
individual who is an eligible juvenile’’ and 
inserting ‘‘an individual (other than an in-
dividual who is in Federal custody, includ-
ing as an inmate in a Federal prison) who 
is an eligible juvenile’’. 
(2) CHIP.— 
(A) Subsection (d)(2) of section 2102 of 
the Social Security Act (42 U.S.C. 1397bb), as 
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211 
added by section 5121 of subtitle C of title V 
of division FF of the Consolidated Appropria-
tions Act, 2023 (Public Law 117–328), is 
amended by striking ‘‘a targeted low-income 
child who’’ and inserting ‘‘a targeted low in-
come child (other than a child who is in Federal 
custody, including as an inmate in a Federal 
prison) who’’. 
(B) Section 5122(b)(2) of subtitle C of 
title V of division FF of the Consolidated Ap-
propriations Act, 2023 (Public Law 117–328) 
is amended by striking ‘‘a child who is’’ and in-
serting ‘‘a child (other than a child who is in 
Federal custody, including as an inmate in a 
Federal prison) who is’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect as if enacted on 
December 29, 2022. 
(c) INTERIM WORK PLAN.—Not later than June 30, 
2025, each State (as such term is defined in section 
1101(a)(1) of the Social Security Act (42 U.S.C. 
1301(a)(1)) for purposes of titles XIX and XXI of such 
Act) shall submit to the Secretary of Health and Human 
Services an interim work plan, in such form and con-
taining such information as the Secretary may specify, de-
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212 
scribing the State’s progress towards implementing, and 
its plans to come into compliance with, the requirements 
imposed by the amendments made by section 5121 of sub-
title C of title V of division FF of the Consolidated Appro-
priations Act, 2023 (Public Law 117–328), consistent 
with the guidance issued by the Centers for Medicare & 
Medicaid Services in State Health Official Letter #24– 
004 on July 23, 2024. 
SEC. 109. STATE STUDIES AND HHS REPORT ON COSTS OF 
PROVIDING MATERNITY, LABOR, AND DELIV-
ERY SERVICES. 
(a) STATE STUDY.— 
(1) IN GENERAL.—Not later than 24 months 
after the date of enactment of this Act, and every 
5 years thereafter, each State (as such term is de-
fined in section 1101(a)(1) of the Social Security 
Act (42 U.S.C. 1301(a)(1)) for purposes of titles 
XIX and XXI of such Act) shall conduct a study on 
the costs of providing maternity, labor, and delivery 
services in applicable hospitals (as defined in para-
graph (3)) and submit the results of such study to 
the Secretary of Health and Human Services (re-
ferred to in this section as the ‘‘Secretary’’). 
(2) CONTENT OF STUDY.—A State study re-
quired under paragraph (1) shall include the fol-
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lowing information (to the extent practicable) with 
respect to maternity, labor, and delivery services fur-
nished by applicable hospitals located in the State: 
(A) An estimate of the cost of providing 
maternity, labor, and delivery services at appli-
cable hospitals, based on the expenditures a 
representative sample of such hospitals incurred 
for providing such services during the 2 most 
recent years for which data is available. 
(B) An estimate of the cost of providing 
maternity, labor, and delivery services at appli-
cable hospitals that ceased providing labor and 
delivery services within the past 5 years, based 
on the expenditures a representative sample of 
such hospitals incurred for providing such serv-
ices during the 2 most recent years for which 
data is available. 
(C) To the extent data allows, an analysis 
of the extent to which geographic location, com-
munity demographics, and local economic fac-
tors (as defined by the Secretary) affect the 
cost of providing maternity, labor, and delivery 
services at applicable hospitals, including the 
cost of services that support the provision of 
maternity, labor, and delivery services. 
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(D) The amounts applicable hospitals are 
paid for maternity, labor, and delivery services, 
by geographic location and hospital size, 
under— 
(i) Medicare; 
(ii) the State Medicaid program, in-
cluding payment amounts for such services 
under fee-for-service payment arrange-
ments and under managed care (as appli-
cable); 
(iii) the State CHIP plan, including 
payment amounts for such services under 
fee-for-service payment arrangements and 
under managed care (as applicable); and 
(iv) private health insurance. 
(E) A comparative payment rate anal-
ysis— 
(i) comparing payment rates for ma-
ternity, labor, and delivery services (inclu-
sive of all payments received by applicable 
hospitals for furnishing maternity, labor, 
and delivery services) under the State 
Medicaid fee-for-service program to such 
payment rates for such services under 
Medicare 
(as 
described 
in 
section 
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215 
447.203(b)(3) of title 42, Code of Federal 
Regulations), other Federally-funded or 
State-funded programs (including, to the 
extent data is available, Medicaid managed 
care rates), and to the payment rates for 
such services, to the extent data is avail-
able, of private health insurers within geo-
graphic areas of the State; and 
(ii) analyzing different payment meth-
ods for such services, such as the use of 
bundled payments, quality incentives, and 
low-volume adjustments. 
(F) An evaluation, using such methodology 
and parameters established by the Secretary, of 
whether each hospital located in the State that 
furnishes maternity, labor, and delivery services 
is expected to experience in the next 3 years 
significant changes in particular expenditures 
or types of reimbursement for maternity, labor, 
and delivery services. 
(3) APPLICABLE
HOSPITAL
DEFINED.—For 
purposes of this subsection, the term ‘‘applicable 
hospital’’ means any hospital located in a State that 
meets either of the following criteria: 
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(A) The hospital provides labor and deliv-
ery services and more than 50 percent of the 
hospital’s births (in the most recent year for 
which such data is available) are financed by 
the Medicaid program or CHIP. 
(B) The hospital— 
(i) is located in a rural area (as de-
fined by the Federal Office of Rural 
Health Policy for the purpose of rural 
health grant programs administered by 
such Office); 
(ii) based on the most recent 2 years 
of data available (as determined by the 
Secretary), furnished services for less than 
an average of 300 births per year; and 
(iii) provides labor and delivery serv-
ices. 
(4) ASSISTANCE TO SMALL HOSPITALS IN COM-
PILING
COST
INFORMATION.—There are appro-
priated to the Secretary for fiscal year 2025, 
$10,000,000 for the purpose of providing grants and 
technical assistance to a hospital described in para-
graph (3)(B) to enable such hospital to compile de-
tailed information for use in the State studies re-
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quired under paragraph (1), to remain available 
until expended. 
(5) HHS REPORT
ON
STATE
STUDIES.—For 
each year in which a State is required to conduct a 
study under paragraph (1), the Secretary shall issue, 
not later than 12 months after the date on which 
the State submits to the Secretary the data de-
scribed in such paragraph, a publicly available re-
port that compiles and details the results of such 
study and includes the information described in 
paragraph (2). 
(b) HHS REPORT ON NATIONAL DATA COLLECTION 
FINDINGS.—Not later than 3 years after the date of en-
actment of this Act, the Secretary shall submit to Con-
gress, and make publicly available, a report analyzing the 
first studies conducted by States under subsection (a)(1), 
including recommendations for improving data collection 
on the cost of providing maternity, labor, and delivery 
services. 
(c) IMPLEMENTATION FUNDING.—In addition to the 
amount appropriated under subsection (a)(4), there are 
appropriated, out of any funds in the Treasury not other-
wise obligated, $3,000,000 for fiscal year 2025, to remain 
available until expended, to the Secretary of Health and 
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Human Services for purposes of implementing this sec-
tion. 
SEC. 110. MODIFYING CERTAIN DISPROPORTIONATE SHARE 
HOSPITAL ALLOTMENTS. 
(a) EXTENDING TENNESSEE DSH ALLOTMENTS.— 
Section 1923(f)(6)(A)(vi) of the Social Security Act (42 
U.S.C. 1396r–4(f)(6)(A)(vi)) is amended— 
(1) in the heading, by striking ‘‘2025’’ and in-
serting ‘‘2026 AND FOR THE 1ST QUARTER OF FISCAL 
YEAR 2027’’; 
(2) by striking ‘‘fiscal year 2025’’ and inserting 
‘‘fiscal year 2026’’; and 
(3) by inserting ‘‘, and the DSH allotment for 
Tennessee for the 1st quarter of fiscal year 2027, 
shall be $13,275,000’’ before the period. 
(b) ELIMINATING AND DELAYING DSH ALLOTMENT 
REDUCTIONS.—Section 1923(f) of the Social Security Act 
(42 U.S.C. 1396r–4(f)) is amended— 
(1) in paragraph (7)(A)— 
(A) in clause (i), in the matter preceding 
subclause (I), by striking ‘‘April 1, 2025,’’ and 
all that follows through ‘‘2027’’ and inserting 
‘‘January 1, 2027, and ending September 30, 
2027, and for fiscal year 2028’’; and 
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(B) in clause (ii), by striking ‘‘April 1, 
2025,’’ and all that follows through ‘‘2027’’ and 
inserting ‘‘January 1, 2027, and ending Sep-
tember 30, 2027, and for fiscal year 2028’’; 
and 
(2) in paragraph (8), by striking ‘‘2027’’ and 
inserting ‘‘2028’’. 
SEC. 111. MODIFYING CERTAIN LIMITATIONS ON DIS-
PROPORTIONATE 
SHARE 
HOSPITAL 
PAY-
MENT ADJUSTMENTS UNDER THE MEDICAID 
PROGRAM. 
(a) IN GENERAL.—Section 1923(g) of the Social Se-
curity Act (42 U.S.C. 1396r–4(g)) is amended— 
(1) in paragraph (1)— 
(A) in subparagraph (A)— 
(i) in the matter preceding clause (i), 
by striking ‘‘(other than a hospital de-
scribed in paragraph (2)(B))’’; 
(ii) in clause (i), by inserting ‘‘with 
respect to such hospital and year’’ after 
‘‘described in subparagraph (B)’’; and 
(iii) in clause (ii)— 
(I) in subclause (I), by striking 
‘‘and’’ at the end; 
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(II) in subclause (II), by striking 
the period and inserting ‘‘; and’’; and 
(III) by adding at the end the 
following new subclause: 
‘‘(III) payments made under title 
XVIII or by an applicable plan (as de-
fined in section 1862(b)(8)(F)) for 
such services.’’; and 
(B) in subparagraph (B)— 
(i) in the matter preceding clause (i), 
by striking ‘‘in this clause are’’ and insert-
ing ‘‘in this subparagraph are, with respect 
to a hospital and a year,’’; and 
(ii) by adding at the end the following 
new clause: 
‘‘(iii) Individuals who are eligible for 
medical assistance under the State plan or 
under a waiver of such plan and for whom 
the State plan or waiver is a payor for 
such services after application of benefits 
under title XVIII or under an applicable 
plan (as defined in section 1862(b)(8)(F)), 
but only if the hospital has in the aggre-
gate incurred costs exceeding payments 
under such State plan, waiver, title XVIII, 
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or applicable plan for such services fur-
nished to such individuals during such 
year.’’; 
(2) by striking paragraph (2); 
(3) by redesignating paragraph (3) as para-
graph (2); and 
(4) in paragraph (2), as so redesignated, by 
striking ‘‘Notwithstanding paragraph (2) of this 
subsection (as in effect on October 1, 2021), para-
graph (2)’’ and inserting ‘‘Paragraph (2)’’. 
(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to payment adjustments made under sec-
tion 1923 of the Social Security Act (42 U.S.C. 
1396r–4) for Medicaid State plan rate years begin-
ning on or after the date of enactment of this Act. 
(2) STATE OPTION TO DISTRIBUTE UNSPENT 
DSH ALLOTMENTS FROM PRIOR YEARS UP TO MODI-
FIED CAP.— 
(A) IN
GENERAL.—If, for any Medicaid 
State plan rate year that begins on or after Oc-
tober 1, 2021, and before the date of enactment 
of this Act, a State did not spend the full 
amount of its Federal fiscal year allotment 
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under section 1923 of the Social Security Act 
(42 U.S.C. 1396r–4) applicable to that State 
plan rate year, the State may use the unspent 
portion of such allotment to increase the 
amount of any payment adjustment made to a 
hospital for such rate year, provided that— 
(i) such payment adjustment (as so 
increased) is consistent with subsection (g) 
of such section (as amended by this sec-
tion); and 
(ii) the total amount of all payment 
adjustments for the State plan rate year 
(as so increased) does not exceed the dis-
proportionate share hospital allotment for 
the State and applicable Federal fiscal 
year under subsection (f) of such section. 
(B) NO RECOUPMENT OF PAYMENTS AL-
READY MADE TO HOSPITALS.—A State shall not 
recoup any payment adjustment made by the 
State to a hospital for a Medicaid State plan 
rate year described in subparagraph (A) if such 
payment adjustment is consistent with section 
1923(g) of such Act (42 U.S.C. 1396r–4(g)) as 
in effect on October 1, 2021. 
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(C) AUTHORITY TO PERMIT RETROACTIVE 
MODIFICATION OF STATE PLAN AMENDMENTS 
TO ALLOW FOR INCREASES.— 
(i) IN
GENERAL.—Subject to para-
graph (2), solely for the purpose of allow-
ing a State to increase the amount of a 
payment adjustment to a hospital for a 
Medicaid State plan rate year described in 
subparagraph (A) pursuant to this para-
graph, a State may retroactively modify a 
provision of the Medicaid State plan, a 
waiver of such plan, or a State plan 
amendment that relates to such rate year 
and the Secretary may approve such modi-
fication. 
(ii) DEADLINE.—A State may not 
submit a request for approval of a retro-
active modification to a provision of the 
Medicaid State plan, a waiver of such plan, 
or a State plan amendment for a Medicaid 
State plan rate year after the date by 
which the State is required to submit the 
independent certified audit for that State 
plan rate year as required under section 
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224 
1923(j)(2) of the Social Security Act (42 
U.S.C. 1396r–4(j)(2)). 
(D) REPORTING.—If a State increases a 
payment adjustment made to a hospital for a 
Medicaid State plan rate year pursuant to this 
paragraph, the State shall include information 
on such increased payment adjustment as part 
of the next annual report submitted by the 
State under section 1923(j)(1) of the Social Se-
curity Act (42 U.S.C. 1396r–4(j)(1)). 
SEC. 112. ENSURING ACCURATE PAYMENTS TO PHAR-
MACIES UNDER MEDICAID. 
(a) IN GENERAL.—Section 1927(f) of the Social Se-
curity Act (42 U.S.C. 1396r–8(f)) is amended— 
(1) in paragraph (1)(A)— 
(A) by redesignating clause (ii) as clause 
(iii); and 
(B) by striking ‘‘and’’ after the semicolon 
at the end of clause (i) and all that precedes it 
through ‘‘(1)’’ and inserting the following: 
‘‘(1) DETERMINING PHARMACY ACTUAL ACQUI-
SITION COSTS.—The Secretary shall conduct a sur-
vey of retail community pharmacy drug prices and 
applicable non-retail pharmacy drug prices to deter-
mine national average drug acquisition cost bench-
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marks (as such term is defined by the Secretary) as 
follows: 
‘‘(A) USE
OF
VENDOR.—The Secretary 
may contract services for— 
‘‘(i) with respect to retail community 
pharmacies, the determination of retail 
survey prices of the national average drug 
acquisition cost for covered outpatient 
drugs that represent a nationwide average 
of consumer purchase prices for such 
drugs, net of all discounts, rebates, and 
other price concessions (to the extent any 
information with respect to such discounts, 
rebates, and other price concessions is 
available) based on a monthly survey of 
such pharmacies; and 
‘‘(ii) with respect to applicable non-re-
tail pharmacies— 
‘‘(I) the determination of survey 
prices, separate from the survey prices 
described in clause (i), of the non-re-
tail national average drug acquisition 
cost for covered outpatient drugs that 
represent a nationwide average of con-
sumer purchase prices for such drugs, 
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net of all discounts, rebates, and other 
price concessions (to the extent any 
information with respect to such dis-
counts, rebates, and other price con-
cessions is available) based on a 
monthly survey of such pharmacies; 
and 
‘‘(II) at the discretion of the Sec-
retary, for each type of applicable 
non-retail pharmacy, the determina-
tion of survey prices, separate from 
the survey prices described in clause 
(i) or subclause (I) of this clause, of 
the national average drug acquisition 
cost for such type of pharmacy for 
covered outpatient drugs that rep-
resent a nationwide average of con-
sumer purchase prices for such drugs, 
net of all discounts, rebates, and other 
price concessions (to the extent any 
information with respect to such dis-
counts, rebates, and other price con-
cessions is available) based on a 
monthly survey of such pharmacies; 
and’’; 
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(2) in subparagraph (B) of paragraph (1), by 
striking ‘‘subparagraph (A)(ii)’’ and inserting ‘‘sub-
paragraph (A)(iii)’’; 
(3) in subparagraph (D) of paragraph (1), by 
striking clauses (ii) and (iii) and inserting the fol-
lowing: 
‘‘(ii) The vendor must update the Sec-
retary no less often than monthly on the 
survey prices for covered outpatient drugs. 
‘‘(iii) The vendor must differentiate, 
in collecting and reporting survey data, for 
all cost information collected, whether a 
pharmacy is a retail community pharmacy 
or an applicable non-retail pharmacy, in-
cluding whether such pharmacy is an affil-
iate (as defined in subsection (k)(14)), 
and, in the case of an applicable non-retail 
pharmacy, which type of applicable non-re-
tail pharmacy it is using the relevant phar-
macy type indicators included in the guid-
ance required by subsection (d)(2) of sec-
tion 112 of the Health Improvements, Ex-
tenders, and Reauthorizations Act.’’; 
(4) by adding at the end of paragraph (1) the 
following: 
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‘‘(F) SURVEY
REPORTING.—In order to 
meet the requirement of section 1902(a)(54), a 
State shall require that any retail community 
pharmacy or applicable non-retail pharmacy in 
the State that receives any payment, reimburse-
ment, administrative fee, discount, rebate, or 
other price concession related to the dispensing 
of covered outpatient drugs to individuals re-
ceiving benefits under this title, regardless of 
whether such payment, reimbursement, admin-
istrative fee, discount, rebate, or other price 
concession is received from the State or a man-
aged care entity or other specified entity (as 
such 
terms 
are 
defined 
in 
section 
1903(m)(9)(D)) directly or from a pharmacy 
benefit manager or another entity that has a 
contract with the State or a managed care enti-
ty or other specified entity (as so defined), shall 
respond to surveys conducted under this para-
graph. 
‘‘(G) SURVEY INFORMATION.—Information 
on national drug acquisition prices obtained 
under this paragraph shall be made publicly 
available in a form and manner to be deter-
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mined by the Secretary and shall include at 
least the following: 
‘‘(i) The monthly response rate to the 
survey including a list of pharmacies not in 
compliance with subparagraph (F). 
‘‘(ii) The sampling methodology and 
number of pharmacies sampled monthly. 
‘‘(iii) Information on price concessions 
to pharmacies, including discounts, re-
bates, and other price concessions, to the 
extent that such information may be pub-
licly released and has been collected by the 
Secretary as part of the survey. 
‘‘(H) PENALTIES.— 
‘‘(i) IN GENERAL.—Subject to clauses 
(ii), (iii), and (iv), the Secretary shall en-
force the provisions of this paragraph with 
respect to a pharmacy through the estab-
lishment of civil money penalties applicable 
to a retail community pharmacy or an ap-
plicable non-retail pharmacy. 
‘‘(ii) BASIS
FOR
PENALTIES.—The 
Secretary shall impose a civil money pen-
alty established under this subparagraph 
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on a retail community pharmacy or appli-
cable non-retail pharmacy if— 
‘‘(I) the retail pharmacy or appli-
cable non-retail pharmacy refuses or 
otherwise fails to respond to a request 
for information about prices in con-
nection with a survey under this sub-
section; 
‘‘(II) knowingly provides false in-
formation in response to such a sur-
vey; or 
‘‘(III) otherwise fails to comply 
with the requirements established 
under this paragraph. 
‘‘(iii) 
PARAMETERS
FOR
PEN-
ALTIES.— 
‘‘(I) IN GENERAL.—A civil money 
penalty established under this sub-
paragraph may be assessed with re-
spect to each violation, and with re-
spect to each non-compliant retail 
community pharmacy (including a 
pharmacy that is part of a chain) or 
non-compliant 
applicable 
non-retail 
pharmacy (including a pharmacy that 
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is part of a chain), in an amount not 
to exceed $100,000 for each such vio-
lation. 
‘‘(II) CONSIDERATIONS.—In de-
termining the amount of a civil money 
penalty imposed under this subpara-
graph, the Secretary may consider the 
size, business structure, and type of 
pharmacy involved, as well as the type 
of violation and other relevant factors, 
as determined appropriate by the Sec-
retary. 
‘‘(iv) RULE
OF
APPLICATION.—The 
provisions of section 1128A (other than 
subsections (a) and (b)) shall apply to a 
civil money penalty under this subpara-
graph in the same manner as such provi-
sions apply to a civil money penalty or pro-
ceeding under section 1128A(a). 
‘‘(I) LIMITATION ON USE OF APPLICABLE 
NON-RETAIL
PHARMACY
PRICING
INFORMA-
TION.—No State shall use pricing information 
reported by applicable non-retail pharmacies 
under subparagraph (A)(ii) to develop or inform 
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232 
payment methodologies for retail community 
pharmacies.’’; 
(5) in paragraph (2)— 
(A) in subparagraph (A), by inserting ‘‘, 
including payment rates and methodologies for 
determining 
ingredient 
cost 
reimbursement 
under managed care entities or other specified 
entities (as such terms are defined in section 
1903(m)(9)(D)),’’ after ‘‘under this title’’; and 
(B) in subparagraph (B), by inserting 
‘‘and the basis for such dispensing fees’’ before 
the semicolon; 
(6) by redesignating paragraph (4) as para-
graph (5); 
(7) by inserting after paragraph (3) the fol-
lowing new paragraph: 
‘‘(4) OVERSIGHT.— 
‘‘(A) IN GENERAL.—The Inspector General 
of the Department of Health and Human Serv-
ices shall conduct periodic studies of the survey 
data reported under this subsection, as appro-
priate, including with respect to substantial 
variations in acquisition costs or other applica-
ble costs, as well as with respect to how internal 
transfer prices and related party transactions 
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may influence the costs reported by pharmacies 
that are affiliates (as defined in subsection 
(k)(14)) or are owned by, controlled by, or re-
lated under a common ownership structure with 
a wholesaler, distributor, or other entity that 
acquires covered outpatient drugs relative to 
costs reported by pharmacies not affiliated with 
such entities. The Inspector General shall pro-
vide periodic updates to Congress on the results 
of such studies, as appropriate, in a manner 
that does not disclose trade secrets or other 
proprietary information. 
‘‘(B) APPROPRIATION.—There is appro-
priated to the Inspector General of the Depart-
ment of Health and Human Services, out of 
any money in the Treasury not otherwise ap-
propriated, $5,000,000 for fiscal year 2025, to 
remain available until expended, to carry out 
this paragraph.’’; and 
(8) in paragraph (5), as so redesignated— 
(A) by inserting ‘‘, and $9,000,000 for fis-
cal year 2025 and each fiscal year thereafter,’’ 
after ‘‘2010’’; and 
(B) by inserting ‘‘Funds appropriated 
under this paragraph for fiscal year 2025 and 
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any subsequent fiscal year shall remain avail-
able until expended.’’ after the period. 
(b) DEFINITIONS.—Section 1927(k) of the Social Se-
curity Act (42 U.S.C. 1396r–8(k)) is amended— 
(1) in the matter preceding paragraph (1), by 
striking ‘‘In the section’’ and inserting ‘‘In this sec-
tion’’; and 
(2) by adding at the end the following new 
paragraphs: 
‘‘(12) APPLICABLE NON-RETAIL PHARMACY.— 
The term ‘applicable non-retail pharmacy’ means a 
pharmacy that is licensed as a pharmacy by the 
State and that is not a retail community pharmacy, 
including a pharmacy that dispenses prescription 
medications to patients primarily through mail and 
specialty pharmacies. Such term does not include 
nursing home pharmacies, long-term care facility 
pharmacies, hospital pharmacies, clinics, charitable 
or not-for-profit pharmacies, government phar-
macies, or low dispensing pharmacies (as defined by 
the Secretary). 
‘‘(13) AFFILIATE.—The term ‘affiliate’ means 
any entity that is owned by, controlled by, or related 
under a common ownership structure with a phar-
macy benefit manager or a managed care entity or 
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other specified entity (as such terms are defined in 
section 1903(m)(9)(D)).’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Subject to paragraph (2), 
the amendments made by this section shall take ef-
fect on the first day of the first quarter that begins 
on or after the date that is 6 months after the date 
of enactment of this Act. 
(2) DELAYED
APPLICATION
TO
APPLICABLE 
NON-RETAIL
PHARMACIES.—The pharmacy survey 
requirements established by the amendments to sec-
tion 1927(f) of the Social Security Act (42 U.S.C. 
1396r–8(f)) made by this section shall apply to re-
tail community pharmacies beginning on the effec-
tive date described in paragraph (1), but shall not 
apply to applicable non-retail pharmacies until the 
first day of the first quarter that begins on or after 
the date that is 18 months after the date of enact-
ment of this Act. 
(d) IDENTIFICATION OF APPLICABLE NON-RETAIL 
PHARMACIES.— 
(1) IN GENERAL.—Not later than January 1, 
2026, the Secretary of Health and Human Services 
shall, in consultation with stakeholders as appro-
priate, publish guidance specifying pharmacies that 
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meet the definition of applicable non-retail phar-
macies (as such term is defined in subsection 
(k)(12) of section 1927 of the Social Security Act 
(42 U.S.C. 1396r–8), as added by subsection (b)), 
and that will be subject to the survey requirements 
under subsection (f)(1) of such section, as amended 
by subsection (a). 
(2) INCLUSION
OF
PHARMACY
TYPE
INDICA-
TORS.—The guidance published under paragraph (1) 
shall include pharmacy type indicators to distinguish 
between different types of applicable non-retail phar-
macies, such as pharmacies that dispense prescrip-
tions primarily through the mail and pharmacies 
that dispense prescriptions that require special han-
dling or distribution. An applicable non-retail phar-
macy may be identified through multiple pharmacy 
type indicators. 
(e) IMPLEMENTATION.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of law, the Secretary of Health and 
Human Services may implement the amendments 
made by this section by program instruction or oth-
erwise. 
(2) NONAPPLICATION OF ADMINISTRATIVE PRO-
CEDURE ACT.—Implementation of the amendments 
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made by this section shall be exempt from the re-
quirements of section 553 of title 5, United States 
Code. 
(f) NONAPPLICATION OF PAPERWORK REDUCTION 
ACT.—Chapter 35 of title 44, United States Code, shall 
not apply to any data collection undertaken by the Sec-
retary of Health and Human Services under section 
1927(f) of the Social Security Act (42 U.S.C. 1396r–8(f)), 
as amended by this section. 
SEC. 113. PREVENTING THE USE OF ABUSIVE SPREAD PRIC-
ING IN MEDICAID. 
(a) IN GENERAL.—Section 1927 of the Social Secu-
rity Act (42 U.S.C. 1396r–8) is amended— 
(1) in subsection (e), by adding at the end the 
following new paragraph: 
‘‘(6) TRANSPARENT PRESCRIPTION DRUG PASS- 
THROUGH PRICING REQUIRED.— 
‘‘(A) IN
GENERAL.—A contract between 
the State and a pharmacy benefit manager (re-
ferred to in this paragraph as a ‘PBM’), or a 
contract between the State and a managed care 
entity or other specified entity (as such terms 
are defined in section 1903(m)(9)(D) and col-
lectively referred to in this paragraph as the 
‘entity’) that includes provisions making the en-
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238 
tity responsible for coverage of covered out-
patient drugs dispensed to individuals enrolled 
with the entity, shall require that payment for 
such drugs and related administrative services 
(as applicable), including payments made by a 
PBM on behalf of the State or entity, is based 
on a transparent prescription drug pass- 
through pricing model under which— 
‘‘(i) any payment made by the entity 
or the PBM (as applicable) for such a 
drug— 
‘‘(I) is limited to— 
‘‘(aa) ingredient cost; and 
‘‘(bb) a professional dis-
pensing fee that is not less than 
the professional dispensing fee 
that the State would pay if the 
State were making the payment 
directly in accordance with the 
State plan; 
‘‘(II) is passed through in its en-
tirety (except as reduced under Fed-
eral or State laws and regulations in 
response to instances of waste, fraud, 
or abuse) by the entity or PBM to the 
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