226 
networks that serve special needs children; 
and 
(iii) geographic availability of oral 
health care, including preventive and re-
storative services, under such programs; 
and 
(C) the feasibility and appropriateness of 
using qualified mid-level dental health pro-
viders, in coordination with dentists, to improve 
access for children to oral health services and 
public health overall. 
(2) REPORT.—Not later than 18 months year 
after the date of the enactment of this Act, the 
Comptroller General shall submit to Congress a re-
port on the study conducted under paragraph (1). 
The report shall include recommendations for such 
Federal and State legislative and administrative 
changes as the Comptroller General determines are 
necessary to address any barriers to access to oral 
health care, including preventive and restorative 
services, under Medicaid and CHIP that may exist. 
SEC. 502. MENTAL HEALTH PARITY IN CHIP PLANS. 
(a) ASSURANCE OF PARITY.—Section 2103(c) (42 
U.S.C. 1397cc(c)), as amended by section 501(a)(1)(B), 
is amended by inserting after paragraph (5), the following:
227 
‘‘(6) MENTAL HEALTH SERVICES PARITY.— 
‘‘(A) IN GENERAL.—In the case of a State 
child health plan that provides both medical 
and surgical benefits and mental health or sub-
stance use disorder benefits, such plan shall en-
sure that the financial requirements and treat-
ment limitations applicable to such mental 
health or substance use disorder benefits com-
ply with the requirements of section 2705(a) of 
the Public Health Service Act in the same man-
ner as such requirements apply to a group 
health plan. 
‘‘(B) DEEMED COMPLIANCE.—To the ex-
tent that a State child health plan includes cov-
erage with respect to an individual described in 
section 1905(a)(4)(B) and covered under the 
State plan under section 1902(a)(10)(A) of the 
services described in section 1905(a)(4)(B) (re-
lating to early and periodic screening, diag-
nostic, and treatment services defined in section 
1905(r)) and provided in accordance with sec-
tion 1902(a)(43), such plan shall be deemed to 
satisfy the requirements of subparagraph (A).’’. 
(b) CONFORMING AMENDMENTS.—Section 2103 (42 
U.S.C. 1397cc) is amended—
228 
(1) in subsection (a), as amended by section 
501(a)(1)(A)(i), in the matter preceding paragraph 
(1), by inserting ‘‘, (6),’’ after ‘‘(5)’’; and 
(2) in subsection (c)(2), by striking subpara-
graph (B) and redesignating subparagraphs (C) and 
(D) as subparagraphs (B) and (C), respectively. 
SEC. 503. APPLICATION OF PROSPECTIVE PAYMENT SYS-
TEM FOR SERVICES PROVIDED BY FEDER-
ALLY-QUALIFIED 
HEALTH 
CENTERS 
AND 
RURAL HEALTH CLINICS. 
(a) APPLICATION OF PROSPECTIVE PAYMENT SYS-
TEM.— 
(1) IN
GENERAL.—Section 2107(e)(1) (42 
U.S.C. 1397gg(e)(1)), as amended by section 
501(c)(2) is amended by inserting after subpara-
graph (C) the following new subparagraph (and re-
designating the succeeding subparagraphs accord-
ingly): 
‘‘(D) Section 1902(bb) (relating to pay-
ment for services provided by Federally-quali-
fied health centers and rural health clinics).’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to services provided on 
or after October 1, 2009. 
(b) TRANSITION GRANTS.—
229 
(1) APPROPRIATION.—Out of any funds in the 
Treasury not otherwise appropriated, there is appro-
priated to the Secretary for fiscal year 2009, 
$5,000,000, to remain available until expended, for 
the purpose of awarding grants to States with State 
child health plans under CHIP that are operated 
separately from the State Medicaid plan under title 
XIX of the Social Security Act (including any waiver 
of such plan), or in combination with the State Med-
icaid plan, for expenditures related to transitioning 
to compliance with the requirement of section 
2107(e)(1)(D) of the Social Security Act (as added 
by subsection (a)) to apply the prospective payment 
system established under section 1902(bb) of the 
such Act (42 U.S.C. 1396a(bb)) to services provided 
by Federally-qualified health centers and rural 
health clinics. 
(2) MONITORING AND REPORT.—The Secretary 
shall monitor the impact of the application of such 
prospective payment system on the States described 
in paragraph (1) and, not later than October 1, 
2011, shall report to Congress on any effect on ac-
cess to benefits, provider payment rates, or scope of 
benefits offered by such States as a result of the ap-
plication of such payment system.
230 
SEC. 504. PREMIUM GRACE PERIOD. 
(a) IN GENERAL.—Section 2103(e)(3) (42 U.S.C. 
1397cc(e)(3)) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(C) PREMIUM GRACE PERIOD.—The State 
child health plan— 
‘‘(i) shall afford individuals enrolled 
under the plan a grace period of at least 
30 days from the beginning of a new cov-
erage period to make premium payments 
before the individual’s coverage under the 
plan may be terminated; and 
‘‘(ii) shall provide to such an indi-
vidual, not later than 7 days after the first 
day of such grace period, notice— 
‘‘(I) that failure to make a pre-
mium payment within the grace pe-
riod will result in termination of cov-
erage under the State child health 
plan; and 
‘‘(II) of the individual’s right to 
challenge the proposed termination 
pursuant to the applicable Federal 
regulations. 
For purposes of clause (i), the term ‘new cov-
erage period’ means the month immediately fol-
231 
lowing the last month for which the premium 
has been paid.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to new coverage periods begin-
ning on or after the date of the enactment of this Act. 
SEC. 505. CLARIFICATION OF COVERAGE OF SERVICES 
PROVIDED 
THROUGH 
SCHOOL-BASED 
HEALTH CENTERS. 
Section 2103(c) (42 U.S.C. 1397cc(c)), as amended 
by section 501(a)(1)(B), is amended by adding at the end 
the following new paragraph: 
‘‘(8) AVAILABILITY OF COVERAGE FOR ITEMS 
AND
SERVICES
FURNISHED
THROUGH
SCHOOL- 
BASED
HEALTH
CENTERS.—Nothing in this title 
shall be construed as limiting a State’s ability to 
provide child health assistance for covered items and 
services that are furnished through school-based 
health centers.’’.
232 
TITLE VI—PROGRAM INTEGRITY 
AND OTHER MISCELLANEOUS 
PROVISIONS 
Subtitle A—Program Integrity and 
Data Collection 
SEC. 601. PAYMENT ERROR RATE MEASUREMENT (‘‘PERM’’). 
(a) EXPENDITURES RELATED TO COMPLIANCE WITH 
REQUIREMENTS.— 
(1) ENHANCED
PAYMENTS.—Section 2105(c) 
(42 U.S.C. 1397ee(c)), as amended by section 
301(a), is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(11) 
ENHANCED
PAYMENTS.—Notwith-
standing subsection (b), the enhanced FMAP with 
respect to payments under subsection (a) for ex-
penditures related to the administration of the pay-
ment error rate measurement (PERM) requirements 
applicable to the State child health plan in accord-
ance with the Improper Payments Information Act 
of 2002 and parts 431 and 457 of title 42, Code of 
Federal Regulations (or any related or successor 
guidance or regulations) shall in no event be less 
than 90 percent.’’. 
(2) EXCLUSION OF FROM CAP ON ADMINISTRA-
TIVE
EXPENDITURES.—Section 2105(c)(2)(C) (42
233 
U.S.C. 1397ee(c)(2)C)), as amended by section 
302(b)), is amended by adding at the end the fol-
lowing: 
‘‘(iv) PAYMENT
ERROR
RATE
MEAS-
UREMENT
(PERM)
EXPENDITURES.—Ex-
penditures related to the administration of 
the payment error rate measurement 
(PERM) requirements applicable to the 
State child health plan in accordance with 
the Improper Payments Information Act of 
2002 and parts 431 and 457 of title 42, 
Code of Federal Regulations (or any re-
lated or successor guidance or regula-
tions).’’. 
(b) FINAL RULE REQUIRED TO BE IN EFFECT FOR 
ALL STATES.—Notwithstanding parts 431 and 457 of 
title 42, Code of Federal Regulations (as in effect on the 
date of enactment of this Act), the Secretary shall not cal-
culate or publish any national or State-specific error rate 
based on the application of the payment error rate meas-
urement (in this section referred to as ‘‘PERM’’) require-
ments to CHIP until after the date that is 6 months after 
the date on which a new final rule (in this section referred 
to as the ‘‘new final rule’’) promulgated after the date of 
the enactment of this Act and implementing such require-
234 
ments in accordance with the requirements of subsection 
(c) is in effect for all States. Any calculation of a national 
error rate or a State specific error rate after such new 
final rule in effect for all States may only be inclusive of 
errors, as defined in such new final rule or in guidance 
issued within a reasonable time frame after the effective 
date for such new final rule that includes detailed guid-
ance for the specific methodology for error determinations. 
(c) REQUIREMENTS FOR NEW FINAL RULE.—For 
purposes of subsection (b), the requirements of this sub-
section are that the new final rule implementing the 
PERM requirements shall— 
(1) include— 
(A) clearly defined criteria for errors for 
both States and providers; 
(B) a clearly defined process for appealing 
error determinations by— 
(i) review contractors; or 
(ii) the agency and personnel de-
scribed in section 431.974(a)(2) of title 42, 
Code of Federal Regulations, as in effect 
on September 1, 2007, responsible for the 
development, 
direction, 
implementation, 
and evaluation of eligibility reviews and as-
sociated activities; and
235 
(C) clearly defined responsibilities and 
deadlines for States in implementing any cor-
rective action plans; and 
(2) provide that the payment error rate deter-
mined for a State shall not take into account pay-
ment errors resulting from the State’s verification of 
an applicant’s self-declaration or self-certification of 
eligibility for, and the correct amount of, medical as-
sistance or child health assistance, if the State proc-
ess for verifying an applicant’s self-declaration or 
self-certification satisfies the requirements for such 
process applicable under regulations promulgated by 
the Secretary or otherwise approved by the Sec-
retary. 
(d) OPTION FOR APPLICATION OF DATA FOR STATES 
IN FIRST APPLICATION CYCLE UNDER
THE INTERIM 
FINAL RULE.—After the new final rule implementing the 
PERM requirements in accordance with the requirements 
of subsection (c) is in effect for all States, a State for 
which the PERM requirements were first in effect under 
an interim final rule for fiscal year 2007 or under a final 
rule for fiscal year 2008 may elect to accept any payment 
error rate determined in whole or in part for the State 
on the basis of data for that fiscal year or may elect to 
not have any payment error rate determined on the basis
236 
of such data and, instead, shall be treated as if fiscal year 
2010 or fiscal year 2011 were the first fiscal year for 
which the PERM requirements apply to the State. 
(e) HARMONIZATION OF MEQC AND PERM.— 
(1) REDUCTION OF REDUNDANCIES.—The Sec-
retary shall review the Medicaid Eligibility Quality 
Control (in this subsection referred to as the 
‘‘MEQC’’) requirements with the PERM require-
ments and coordinate consistent implementation of 
both 
sets 
of 
requirements, 
while 
reducing 
redundancies. 
(2) STATE OPTION TO APPLY PERM DATA.—A 
State may elect, for purposes of determining the er-
roneous excess payments for medical assistance ratio 
applicable to the State for a fiscal year under section 
1903(u) of the Social Security Act (42 U.S.C. 
1396b(u)) to substitute data resulting from the ap-
plication of the PERM requirements to the State 
after the new final rule implementing such require-
ments is in effect for all States for data obtained 
from the application of the MEQC requirements to 
the State with respect to a fiscal year. 
(3) STATE OPTION TO APPLY MEQC DATA.—For 
purposes of satisfying the requirements of subpart Q 
of part 431 of title 42, Code of Federal Regulations,
237 
relating to Medicaid eligibility reviews, a State may 
elect to substitute data obtained through MEQC re-
views conducted in accordance with section 1903(u) 
of the Social Security Act (42 U.S.C. 1396b(u)) for 
data required for purposes of PERM requirements, 
but only if the State MEQC reviews are based on a 
broad, representative sample of Medicaid applicants 
or enrollees in the States. 
(f) IDENTIFICATION OF IMPROVED STATE-SPECIFIC 
SAMPLE SIZES.—The Secretary shall establish State-spe-
cific sample sizes for application of the PERM require-
ments with respect to State child health plans for fiscal 
years beginning with fiscal year 2009, on the basis of such 
information as the Secretary determines appropriate. In 
establishing such sample sizes, the Secretary shall, to the 
greatest extent practicable— 
(1) minimize the administrative cost burden on 
States under Medicaid and CHIP; and 
(2) maintain State flexibility to manage such 
programs. 
SEC. 602. IMPROVING DATA COLLECTION. 
(a) 
INCREASED
APPROPRIATION.—Section 
2109(b)(2) (42 U.S.C. 1397ii(b)(2)) is amended by strik-
ing ‘‘$10,000,000 for fiscal year 2000’’ and inserting 
‘‘$20,000,000 for fiscal year 2009’’.
238 
(b) USE OF ADDITIONAL FUNDS.—Section 2109(b) 
(42 U.S.C. 1397ii(b)), as amended by subsection (a), is 
amended— 
(1) by redesignating paragraph (2) as para-
graph (4); and 
(2) by inserting after paragraph (1), the fol-
lowing new paragraphs: 
‘‘(2) ADDITIONAL REQUIREMENTS.—In addition 
to making the adjustments required to produce the 
data described in paragraph (1), with respect to 
data collection occurring for fiscal years beginning 
with fiscal year 2009, in appropriate consultation 
with the Secretary of Health and Human Services, 
the Secretary of Commerce shall do the following: 
‘‘(A) Make appropriate adjustments to the 
Current Population Survey to develop more ac-
curate State-specific estimates of the number of 
children enrolled in health coverage under title 
XIX or this title. 
‘‘(B) Make appropriate adjustments to the 
Current Population Survey to improve the sur-
vey estimates used to determine the child popu-
lation 
growth 
factor 
under 
section 
2104(m)(5)(B) and any other data necessary 
for carrying out this title.
239 
‘‘(C) Include health insurance survey infor-
mation in the American Community Survey re-
lated to children. 
‘‘(D) Assess whether American Community 
Survey estimates, once such survey data are 
first available, produce more reliable estimates 
than the Current Population Survey with re-
spect to the purposes described in subparagraph 
(B). 
‘‘(E) On the basis of the assessment re-
quired under subparagraph (D), recommend to 
the Secretary of Health and Human Services 
whether American Community Survey estimates 
should be used in lieu of, or in some combina-
tion with, Current Population Survey estimates 
for the purposes described in subparagraph (B). 
‘‘(F) Continue making the adjustments de-
scribed in the last sentence of paragraph (1) 
with respect to expansion of the sample size 
used in State sampling units, the number of 
sampling units in a State, and using an appro-
priate verification element. 
‘‘(3) AUTHORITY
FOR
THE
SECRETARY
OF 
HEALTH AND HUMAN SERVICES TO TRANSITION TO 
THE USE OF ALL, OR SOME COMBINATION OF, ACS
240 
ESTIMATES UPON RECOMMENDATION OF THE SEC-
RETARY OF COMMERCE.—If, on the basis of the as-
sessment required under paragraph (2)(D), the Sec-
retary of Commerce recommends to the Secretary of 
Health and Human Services that American Commu-
nity Survey estimates should be used in lieu of, or 
in some combination with, Current Population Sur-
vey estimates for the purposes described in para-
graph (2)(B), the Secretary of Health and Human 
Services, in consultation with the States, may pro-
vide for a period during which the Secretary may 
transition from carrying out such purposes through 
the use of Current Population Survey estimates to 
the use of American Community Survey estimates 
(in lieu of, or in combination with the Current Popu-
lation Survey estimates, as recommended), provided 
that any such transition is implemented in a manner 
that is designed to avoid adverse impacts upon 
States with approved State child health plans under 
this title.’’. 
SEC. 603. UPDATED FEDERAL EVALUATION OF CHIP. 
Section 2108(c) (42 U.S.C. 1397hh(c)) is amended 
by striking paragraph (5) and inserting the following: 
‘‘(5) SUBSEQUENT
EVALUATION
USING
UP-
DATED INFORMATION.—
241 
‘‘(A) IN
GENERAL.—The Secretary, di-
rectly or through contracts or interagency 
agreements, shall conduct an independent sub-
sequent evaluation of 10 States with approved 
child health plans. 
‘‘(B) SELECTION
OF
STATES
AND
MAT-
TERS INCLUDED.—Paragraphs (2) and (3) shall 
apply to such subsequent evaluation in the 
same manner as such provisions apply to the 
evaluation conducted under paragraph (1). 
‘‘(C) SUBMISSION
TO
CONGRESS.—Not 
later than December 31, 2011, the Secretary 
shall submit to Congress the results of the eval-
uation conducted under this paragraph. 
‘‘(D) FUNDING.—Out of any money in the 
Treasury of the United States not otherwise ap-
propriated, there are appropriated $10,000,000 
for fiscal year 2010 for the purpose of con-
ducting the evaluation authorized under this 
paragraph. Amounts appropriated under this 
subparagraph shall remain available for expend-
iture through fiscal year 2012.’’.
242 
SEC. 604. ACCESS TO RECORDS FOR IG AND GAO AUDITS 
AND EVALUATIONS. 
Section 2108(d) (42 U.S.C. 1397hh(d)) is amended 
to read as follows: 
‘‘(d) ACCESS TO RECORDS FOR IG AND GAO AUDITS 
AND EVALUATIONS.—For the purpose of evaluating and 
auditing the program established under this title, or title 
XIX, the Secretary, the Office of Inspector General, and 
the Comptroller General shall have access to any books, 
accounts, records, correspondence, and other documents 
that are related to the expenditure of Federal funds under 
this title and that are in the possession, custody, or control 
of States receiving Federal funds under this title or polit-
ical subdivisions thereof, or any grantee or contractor of 
such States or political subdivisions.’’. 
SEC. 605. NO FEDERAL FUNDING FOR ILLEGAL ALIENS. 
Nothing in this Act allows Federal payment for indi-
viduals who are not lawfully residing in the United States. 
Titles XI, XIX, and XXI of the Social Security Act pro-
vide for the disallowance of Federal financial participation 
for erroneous expenditures under Medicaid and under 
CHIP, respectively.
243 
Subtitle B—Miscellaneous Health 
Provisions 
SEC. 611. DEFICIT REDUCTION ACT TECHNICAL CORREC-
TIONS. 
(a) CLARIFICATION OF REQUIREMENT TO PROVIDE 
EPSDT SERVICES FOR ALL CHILDREN IN BENCHMARK 
BENEFIT
PACKAGES
UNDER
MEDICAID.—Section 
1937(a)(1) (42 U.S.C. 1396u–7(a)(1)), as inserted by sec-
tion 6044(a) of the Deficit Reduction Act of 2005 (Public 
Law 109–171, 120 Stat. 88), is amended— 
(1) in subparagraph (A)— 
(A) in the matter before clause (i)— 
(i) by striking ‘‘Notwithstanding any 
other provision of this title’’ and inserting 
‘‘Notwithstanding section 1902(a)(1) (re-
lating 
to 
statewideness), 
section 
1902(a)(10)(B) (relating to comparability) 
and any other provision of this title which 
would be directly contrary to the authority 
under this section and subject to sub-
section (E)’’; and 
(ii) by striking ‘‘enrollment in cov-
erage that provides’’ and inserting ‘‘cov-
erage that’’;
244 
(B) in clause (i), by inserting ‘‘provides’’ 
after ‘‘(i)’’; and 
(C) by striking clause (ii) and inserting the 
following: 
‘‘(ii) for any individual described in 
section 1905(a)(4)(B) who is eligible under 
the State plan in accordance with para-
graphs (10) and (17) of section 1902(a), 
consists of the items and services described 
in section 1905(a)(4)(B) (relating to early 
and periodic screening, diagnostic, and 
treatment 
services 
defined 
in 
section 
1905(r)) and provided in accordance with 
the requirements of section 1902(a)(43).’’; 
(2) in subparagraph (C)— 
(A) in the heading, by striking ‘‘WRAP- 
AROUND’’ and inserting ‘‘ADDITIONAL’’; and 
(B) by striking ‘‘wrap-around or’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(E) RULE OF CONSTRUCTION.—Nothing 
in this paragraph shall be construed as— 
‘‘(i) requiring a State to offer all or 
any of the items and services required by 
subparagraph (A)(ii) through an issuer of
245 
benchmark coverage described in sub-
section (b)(1) or benchmark equivalent 
coverage described in subsection (b)(2); 
‘‘(ii) preventing a State from offering 
all or any of the items and services re-
quired by subparagraph (A)(ii) through an 
issuer of benchmark coverage described in 
subsection (b)(1) or benchmark equivalent 
coverage described in subsection (b)(2); or 
‘‘(iii) affecting a child’s entitlement to 
care and services described in subsections 
(a)(4)(B) and (r) of section 1905 and pro-
vided 
in 
accordance 
with 
section 
1902(a)(43) whether provided through 
benchmark coverage, benchmark equivalent 
coverage, or otherwise.’’. 
(b) CORRECTION OF REFERENCE TO CHILDREN IN 
FOSTER CARE RECEIVING CHILD WELFARE SERVICES.— 
Section 
1937(a)(2)(B)(viii) 
(42 
U.S.C. 
1396u– 
7(a)(2)(B)(viii)), as inserted by section 6044(a) of the 
Deficit Reduction Act of 2005, is amended by striking 
‘‘aid or assistance is made available under part B of title 
IV to children in foster care and individuals’’ and inserting 
‘‘child welfare services are made available under part B 
of title IV on the basis of being a child in foster care or’’.
246 
(c) TRANSPARENCY.—Section 1937 (42 U.S.C. 
1396u–7), as inserted by section 6044(a) of the Deficit 
Reduction Act of 2005, is amended by adding at the end 
the following: 
‘‘(c) PUBLICATION
OF PROVISIONS AFFECTED.— 
With respect to a State plan amendment to provide bench-
mark benefits in accordance with subsections (a) and (b) 
that is approved by the Secretary, the Secretary shall pub-
lish on the Internet website of the Centers for Medicare 
& Medicaid Services, a list of the provisions of this title 
that the Secretary has determined do not apply in order 
to enable the State to carry out the plan amendment and 
the reason for each such determination on the date such 
approval is made, and shall publish such list in the Fed-
eral Register and not later than 30 days after such date 
of approval.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
subsections (a), (b), and (c) of this section shall take effect 
as if included in the amendment made by section 6044(a) 
of the Deficit Reduction Act of 2005. 
SEC. 612. REFERENCES TO TITLE XXI. 
Section 704 of the Medicare, Medicaid, and SCHIP 
Balanced Budget Refinement Act of 1999, as enacted into 
law by division B of Public Law 106–113 (113 Stat. 
1501A–402) is repealed.
247 
SEC. 613. PROHIBITING INITIATION OF NEW HEALTH OP-
PORTUNITY ACCOUNT DEMONSTRATION PRO-
GRAMS. 
After the date of the enactment of this Act, the Sec-
retary of Health and Human Services may not approve 
any new demonstration programs under section 1938 of 
the Social Security Act (42 U.S.C. 1396u–8). 
SEC. 614. ADJUSTMENT IN COMPUTATION OF MEDICAID 
FMAP TO DISREGARD AN EXTRAORDINARY 
EMPLOYER PENSION CONTRIBUTION. 
(a) IN GENERAL.—Only for purposes of computing 
the FMAP (as defined in subsection (e)) for a State for 
a fiscal year (beginning with fiscal year 2006) and apply-
ing the FMAP under title XIX of the Social Security Act, 
any significantly disproportionate employer pension or in-
surance fund contribution described in subsection (b) shall 
be disregarded in computing the per capita income of such 
State, but shall not be disregarded in computing the per 
capita income for the continental United States (and Alas-
ka) and Hawaii. 
(b) SIGNIFICANTLY DISPROPORTIONATE EMPLOYER 
PENSION AND INSURANCE FUND CONTRIBUTION.— 
(1) IN GENERAL.—For purposes of this section, 
a significantly disproportionate employer pension 
and insurance fund contribution described in this 
subsection with respect to a State is any identifiable
248 
employer contribution towards pension or other em-
ployee insurance funds that is estimated to accrue to 
residents of such State for a calendar year (begin-
ning with calendar year 2003) if the increase in the 
amount so estimated exceeds 25 percent of the total 
increase in personal income in that State for the 
year involved. 
(2) DATA TO BE USED.—For estimating and 
adjustment a FMAP already calculated as of the 
date of the enactment of this Act for a State with 
a significantly disproportionate employer pension 
and insurance fund contribution, the Secretary shall 
use the personal income data set originally used in 
calculating such FMAP. 
(3) SPECIAL
ADJUSTMENT
FOR
NEGATIVE 
GROWTH.—If in any calendar year the total personal 
income growth in a State is negative, an employer 
pension and insurance fund contribution for the pur-
poses of calculating the State’s FMAP for a cal-
endar year shall not exceed 125 percent of the 
amount of such contribution for the previous cal-
endar year for the State. 
(c) HOLD HARMLESS.—No State shall have its 
FMAP for a fiscal year reduced as a result of the applica-
tion of this section.
249 
(d) REPORT.—Not later than May 15, 2009, the Sec-
retary shall submit to the Congress a report on the prob-
lems presented by the current treatment of pension and 
insurance fund contributions in the use of Bureau of Eco-
nomic Affairs calculations for the FMAP and for Medicaid 
and on possible alternative methodologies to mitigate such 
problems. 
(e) FMAP DEFINED.—For purposes of this section, 
the term ‘‘FMAP’’ means the Federal medical assistance 
percentage, as defined in section 1905(b) of the Social Se-
curity Act (42 U.S.C. 1396(d)). 
SEC. 615. CLARIFICATION TREATMENT OF REGIONAL MED-
ICAL CENTER. 
(a) IN GENERAL.—Nothing in section 1903(w) of the 
Social Security Act (42 U.S.C. 1396b(w)) shall be con-
strued by the Secretary of Health and Human Services 
as prohibiting a State’s use of funds as the non-Federal 
share of expenditures under title XIX of such Act where 
such funds are transferred from or certified by a publicly- 
owned regional medical center located in another State 
and described in subsection (b), so long as the Secretary 
determines that such use of funds is proper and in the 
interest of the program under title XIX.
250 
(b) CENTER DESCRIBED.—A center described in this 
subsection is a publicly-owned regional medical center 
that— 
(1) provides level 1 trauma and burn care serv-
ices; 
(2) provides level 3 neonatal care services; 
(3) is obligated to serve all patients, regardless 
of ability to pay; 
(4) is located within a Standard Metropolitan 
Statistical Area (SMSA) that includes at least 3 
States; 
(5) provides services as a tertiary care provider 
for patients residing within a 125-mile radius; and 
(6) meets the criteria for a disproportionate 
share hospital under section 1923 of such Act (42 
U.S.C. 1396r–4) in at least one State other than the 
State in which the center is located. 
SEC. 616. EXTENSION OF MEDICAID DSH ALLOTMENTS FOR 
TENNESSEE AND HAWAII. 
Section 1923(f)(6) (42 U.S.C. 1396r–4(f)(6)), as 
amended by section 202 of the Medicare Improvements 
for Patients and Providers Act of 2008 (Public Law 110– 
275) is amended— 
(1) in the paragraph heading, by striking ‘‘2009 
AND
THE
FIRST
CALENDAR
QUARTER
OF
FISCAL
251 
YEAR 2010’’ and inserting ‘‘2011 AND THE FIRST CAL-
ENDAR QUARTER OF FISCAL YEAR 2012’’; 
(2) in subparagraph (A)— 
(A) in clause (i)— 
(i) in the second sentence— 
(I) by striking ‘‘and 2009’’ and 
inserting ‘‘, 2009, 2010, and 2011’’; 
and 
(II) by striking ‘‘such portion 
of’’; and 
(ii) in the third sentence, by striking 
‘‘2010 for the period ending on December 
31, 2009’’ and inserting ‘‘2012 for the pe-
riod ending on December 31, 2011’’; 
(B) in clause (ii), by striking ‘‘or for a pe-
riod in fiscal year 2010’’ and inserting ‘‘2010, 
2011, or for period in fiscal year 2012’’; and 
(C) in clause (iv)— 
(i) in the clause heading, by striking 
‘‘2009 AND THE FIRST CALENDAR QUARTER 
OF FISCAL YEAR 2010’’ and inserting ‘‘2011 
AND THE FIRST CALENDAR QUARTER OF 
FISCAL YEAR 2012’’; and 
(ii) in each of subclauses (I) and (II), 
by striking ‘‘ or for a period in fiscal year
252 
2010’’ and inserting ‘‘2010, 2011, or for a 
period in fiscal year 2012’’; and 
(3) in subparagraph (B)— 
(A) in clause (i)— 
(i) in the first sentence, by striking 
‘‘2009’’ and inserting ‘‘2011’’; and 
(ii) in the second sentence, by striking 
‘‘2010 for the period ending on December 
31, 2009’’ and inserting ‘‘2012 for the pe-
riod ending on December 31, 2011’’. 
Subtitle C—Other Provisions 
SEC. 621. OUTREACH REGARDING HEALTH INSURANCE OP-
TIONS AVAILABLE TO CHILDREN. 
(a) DEFINITIONS.—In this section— 
(1) the terms ‘‘Administration’’ and ‘‘Adminis-
trator’’ means the Small Business Administration 
and the Administrator thereof, respectively; 
(2) the term ‘‘certified development company’’ 
means a development company participating in the 
program under title V of the Small Business Invest-
ment Act of 1958 (15 U.S.C. 695 et seq.); 
(3) the term ‘‘Medicaid program’’ means the 
program established under title XIX of the Social 
Security Act (42 U.S.C. 1396 et seq.);
253 
(4) the term ‘‘Service Corps of Retired Execu-
tives’’ means the Service Corps of Retired Execu-
tives authorized by section 8(b)(1) of the Small 
Business Act (15 U.S.C. 637(b)(1)); 
(5) the term ‘‘small business concern’’ has the 
meaning given that term in section 3 of the Small 
Business Act (15 U.S.C. 632); 
(6) the term ‘‘small business development cen-
ter’’ means a small business development center de-
scribed in section 21 of the Small Business Act (15 
U.S.C. 648); 
(7) the term ‘‘State’’ has the meaning given 
that term for purposes of title XXI of the Social Se-
curity Act (42 U.S.C. 1397aa et seq.); 
(8) the term ‘‘State Children’s Health Insur-
ance Program’’ means the State Children’s Health 
Insurance Program established under title XXI of 
the Social Security Act (42 U.S.C. 1397aa et seq.); 
(9) the term ‘‘task force’’ means the task force 
established under subsection (b)(1); and 
(10) the term ‘‘women’s business center’’ means 
a women’s business center described in section 29 of 
the Small Business Act (15 U.S.C. 656). 
(b) ESTABLISHMENT OF TASK FORCE.—
254 
(1) ESTABLISHMENT.—There is established a 
task force to conduct a nationwide campaign of edu-
cation and outreach for small business concerns re-
garding the availability of coverage for children 
through private insurance options, the Medicaid pro-
gram, and the State Children’s Health Insurance 
Program. 
(2) MEMBERSHIP.—The task force shall consist 
of the Administrator, the Secretary of Health and 
Human Services, the Secretary of Labor, and the 
Secretary of the Treasury. 
(3) RESPONSIBILITIES.—The campaign con-
ducted under this subsection shall include— 
(A) efforts to educate the owners of small 
business concerns about the value of health cov-
erage for children; 
(B) information regarding options available 
to the owners and employees of small business 
concerns to make insurance more affordable, in-
cluding Federal and State tax deductions and 
credits for health care-related expenses and 
health insurance expenses and Federal tax ex-
clusion for health insurance options available 
under employer-sponsored cafeteria plans under
255 
section 125 of the Internal Revenue Code of 
1986; 
(C) efforts to educate the owners of small 
business concerns about assistance available 
through public programs; and 
(D) efforts to educate the owners and em-
ployees of small business concerns regarding 
the availability of the hotline operated as part 
of the Insure Kids Now program of the Depart-
ment of Health and Human Services. 
(4) IMPLEMENTATION.—In carrying out this 
subsection, the task force may— 
(A) use any business partner of the Ad-
ministration, including— 
(i) a small business development cen-
ter; 
(ii) a certified development company; 
(iii) a women’s business center; and 
(iv) the Service Corps of Retired Ex-
ecutives; 
(B) enter into— 
(i) a memorandum of understanding 
with a chamber of commerce; and
256 
(ii) a partnership with any appro-
priate small business concern or health ad-
vocacy group; and 
(C) designate outreach programs at re-
gional offices of the Department of Health and 
Human Services to work with district offices of 
the Administration. 
(5) WEBSITE.—The Administrator shall ensure 
that links to information on the eligibility and enroll-
ment requirements for the Medicaid program and 
State Children’s Health Insurance Program of each 
State are prominently displayed on the website of 
the Administration. 
(6) REPORT.— 
(A) IN GENERAL.—Not later than 2 years 
after the date of enactment of this Act, and 
every 2 years thereafter, the Administrator 
shall submit to the Committee on Small Busi-
ness and Entrepreneurship of the Senate and 
the Committee on Small Business of the House 
of Representatives a report on the status of the 
nationwide campaign conducted under para-
graph (1). 
(B) CONTENTS.—Each report submitted 
under subparagraph (A) shall include a status
257 
update on all efforts made to educate owners 
and employees of small business concerns on 
options for providing health insurance for chil-
dren through public and private alternatives. 
SEC. 622. SENSE OF THE SENATE REGARDING ACCESS TO 
AFFORDABLE AND MEANINGFUL HEALTH IN-
SURANCE COVERAGE. 
(a) FINDINGS.—The Senate finds the following: 
(1) There are approximately 45 million Ameri-
cans currently without health insurance. 
(2) More than half of uninsured workers are 
employed by businesses with less than 25 employees 
or are self-employed. 
(3) Health insurance premiums continue to rise 
at more than twice the rate of inflation for all con-
sumer goods. 
(4) Individuals in the small group and indi-
vidual health insurance markets usually pay more 
for similar coverage than those in the large group 
market. 
(5) The rapid growth in health insurance costs 
over the last few years has forced many employers, 
particularly small employers, to increase deductibles 
and co-pays or to drop coverage completely. 
(b) SENSE OF THE SENATE.—The Senate—
258 
(1) recognizes the necessity to improve afford-
ability and access to health insurance for all Ameri-
cans; 
(2) acknowledges the value of building upon the 
existing private health insurance market; and 
(3) affirms its intent to enact legislation this 
year that, with appropriate protection for con-
sumers, improves access to affordable and meaning-
ful health insurance coverage for employees of small 
businesses and individuals by— 
(A) facilitating pooling mechanisms, in-
cluding pooling across State lines, and 
(B) providing assistance to small busi-
nesses and individuals, including financial as-
sistance and tax incentives, for the purchase of 
private insurance coverage. 
SEC. 623. LIMITATION ON MEDICARE EXCEPTION TO THE 
PROHIBITION ON CERTAIN PHYSICIAN RE-
FERRALS FOR HOSPITALS. 
(a) IN GENERAL.—Section 1877 (42 U.S.C. 1395nn) 
is amended— 
(1) in subsection (d)(2)— 
(A) in subparagraph (A), by striking 
‘‘and’’ at the end;
259 
(B) in subparagraph (B), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(C) in the case where the entity is a hos-
pital, the hospital meets the requirements of 
paragraph (3)(D).’’; 
(2) in subsection (d)(3)— 
(A) in subparagraph (B), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (C), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(D) the hospital meets the requirements 
described in subsection (i)(1).’’; and 
(3) by adding at the end the following new sub-
section: 
‘‘(i) REQUIREMENTS FOR HOSPITALS TO QUALIFY 
FOR RURAL PROVIDER AND HOSPITAL EXCEPTION TO 
OWNERSHIP OR INVESTMENT PROHIBITION.— 
‘‘(1) REQUIREMENTS
DESCRIBED.—For pur-
poses of subsection (d)(3)(D), the requirements de-
scribed in this paragraph for a hospital are as fol-
lows:
260 
‘‘(A) PROVIDER
AGREEMENT.—The hos-
pital had— 
‘‘(i) physician ownership or invest-
ment on January 1, 2009; and 
‘‘(ii) a provider agreement under sec-
tion 1866 in effect on such date. 
‘‘(B) PROHIBITION ON PHYSICIAN OWNER-
SHIP OR INVESTMENT.—The percentage of the 
total value of the ownership or investment in-
terests held in the hospital, or in an entity 
whose assets include the hospital, by physician 
owners or investors in the aggregate does not 
exceed such percentage as of the date of enact-
ment of this subsection. 
‘‘(C) PROHIBITION ON EXPANSION OF FA-
CILITY CAPACITY.—Except as provided in para-
graph (3), the number of operating rooms, pro-
cedure rooms, and beds of the hospital at any 
time on or after the date of the enactment of 
this subsection are no greater than the number 
of operating rooms, procedure rooms, and beds 
as of such date. 
‘‘(D) PREVENTING CONFLICTS OF INTER-
EST.—