H. R. 2015—261
‘‘(I) receives, after the veteran has been determined to
be eligible for medical assistance under the State plan under
this title, a veteran’s pension in excess of $90 per month,
and
‘‘(II) resides in a State veterans home with respect to
which the Secretary of Veterans Affairs makes per diem pay-
ments for nursing home care pursuant to section 1741(a) of
title 38, United States Code,
any such pension payment, including any payment made due to
the need for aid and attendance, or for unreimbursed medical
expenses, that is in excess of $90 per month shall be counted
as income only for the purpose of applying such excess payment
to the State veterans home’s cost of providing nursing home care
to the veteran.
‘‘(ii) The provisions of clause (i) shall apply with respect to
a surviving spouse of a veteran who does not have a child in
the same manner as they apply to a veteran described in such
clause.’’.
(b) EFFECTIVE DATE.—The amendments made by this section
shall apply on and after October 1, 1997.
CHAPTER 3—FEDERAL PAYMENTS TO STATES
SEC. 4721. REFORMING DISPROPORTIONATE SHARE PAYMENTS UNDER
STATE MEDICAID PROGRAMS.
(a) ADJUSTMENT OF STATE DSH ALLOTMENTS.—
(1) IN
GENERAL.—Section 1923(f) (42 U.S.C. 1396r–4(f))
is amended to read as follows:
‘‘(f) LIMITATION ON FEDERAL FINANCIAL PARTICIPATION.—
‘‘(1) IN
GENERAL.—Payment under section 1903(a) shall
not be made to a State with respect to any payment adjustment
made under this section for hospitals in a State for quarters
in a fiscal year in excess of the disproportionate share hospital
(in this subsection referred to as ‘DSH’) allotment for the State
for the fiscal year, as specified in paragraphs (2) and (3).
‘‘(2) STATE
DSH
ALLOTMENTS
FOR
FISCAL
YEARS
1998
THROUGH 2002.—The DSH allotment for a State for each fiscal
year during the period beginning with fiscal year 1998 and
ending with fiscal year 2002 is determined in accordance with
the following table:
State or District
DSH Allotment (in millions of dollars)
FY 98
FY 99
FY 00
FY 01
FY 02
Alabama
293
269
248
246
246
Alaska
Arizona
Arkansas
California
1,085
1,068
986
931
877
Colorado
Connecticut
200
194
164
160
160
Delaware
District of Colum-
bia
Florida
207
203
197
188
160
Georgia
253
248
241
228
215
Hawaii
Idaho
Illinois
203
199
193
182
172
H. R. 2015—262
State or District
DSH Allotment (in millions of dollars)
FY 98
FY 99
FY 00
FY 01
FY 02
Indiana
201
197
191
181
171
Iowa
Kansas
Kentucky
137
134
130
123
116
Louisiana
880
795
713
658
631
Maine
103
Maryland
Massachusetts
288
282
273
259
244
Michigan
249
244
237
224
212
Minnesota
Mississippi
143
141
136
129
122
Missouri
436
423
379
379
379
Montana
0.2
0.2
0.2
0.2
0.2
Nebraska
Nevada
New Hampshire
140
136
130
130
130
New Jersey
600
582
515
515
515
New Mexico
New York
1,512
1,482
1,436
1,361
1,285
North Carolina
278
272
264
250
236
North Dakota
Ohio
382
374
363
344
325
Oklahoma
Oregon
Pennsylvania
529
518
502
476
449
Rhode Island
South Carolina
313
303
262
262
262
South Dakota
Tennessee
Texas
979
950
806
765
765
Utah
Vermont
Virginia
Washington
174
171
166
157
148
West Virginia
Wisconsin
Wyoming
0.
‘‘(3) STATE
DSH
ALLOTMENTS
FOR
FISCAL
YEAR
2003
AND
THEREAFTER.—
‘‘(A) IN GENERAL.—The DSH allotment for any State
for fiscal year 2003 and each succeeding fiscal year is
equal to the DSH allotment for the State for the preceding
fiscal year under paragraph (2) or this paragraph,
increased, subject to subparagraph (B), by the percentage
change in the consumer price index for all urban consumers
(all items; U.S. city average), for the previous fiscal year.
‘‘(B) LIMITATION.—The DSH allotment for a State shall
not be increased under subparagraph (A) for a fiscal year
to the extent that such an increase would result in the
DSH allotment for the year exceeding the greater of—
‘‘(i) the DSH allotment for the previous year, or
‘‘(ii) 12 percent of the total amount of expenditures
under the State plan for medical assistance during
the fiscal year.
‘‘(4) DEFINITION OF STATE.— In this subsection, the term
‘State’ means the 50 States and the District of Columbia.’’.
(2) EFFECTIVE DATE.—The amendment made by paragraph
(1) shall apply to payment adjustments attributable to DSH
allotments for fiscal years beginning with fiscal year 1998.
H. R. 2015—263
(b) LIMITATION ON PAYMENTS TO INSTITUTIONS FOR MENTAL
DISEASES.—Section 1923 of the Social Security Act (42 U.S.C.
1396r–4) is amended by adding at the end the following:
‘‘(h) LIMITATION ON CERTAIN STATE DSH EXPENDITURES.—
‘‘(1) IN
GENERAL.—Payment under section 1903(a) shall
not be made to a State with respect to any payment adjustments
made under this section for quarters in a fiscal year (beginning
with fiscal year 1998) to institutions for mental diseases or
other mental health facilities, to the extent the aggregate of
such adjustments in the fiscal year exceeds the lesser of the
following:
‘‘(A) 1995 IMD DSH PAYMENT ADJUSTMENTS.—The total
State DSH expenditures that are attributable to fiscal year
1995 for payments to institutions for mental diseases and
other mental health facilities (based on reporting data
specified by the State on HCFA Form 64 as mental health
DSH, and as approved by the Secretary).
‘‘(B) APPLICABLE PERCENTAGE OF 1995 TOTAL DSH PAY-
MENT ALLOTMENT.—The amount of such payment adjust-
ments which are equal to the applicable percentage of
the Federal share of payment adjustments made to hos-
pitals in the State under subsection (c) that are attributable
to the 1995 DSH allotment for the State for payments
to institutions for mental diseases and other mental health
facilities (based on reporting data specified by the State
on HCFA Form 64 as mental health DSH, and as approved
by the Secretary).
‘‘(2) APPLICABLE PERCENTAGE.—
‘‘(A) IN GENERAL.—For purposes of paragraph (1), the
applicable percentage with respect to—
‘‘(i) each of fiscal years 1998, 1999, and 2000, is
the percentage determined under subparagraph (B);
or
‘‘(ii) a succeeding fiscal year is the lesser of the
percentage determined under subparagraph (B) or the
following percentage:
‘‘(I) For fiscal year 2001, 50 percent.
‘‘(II) For fiscal year 2002, 40 percent.
‘‘(III) For each succeeding fiscal year, 33 per-
cent.
‘‘(B) 1995 PERCENTAGE.—The percentage determined
under this subparagraph is the ratio (determined as a
percentage) of—
‘‘(i) the Federal share of payment adjustments
made to hospitals in the State under subsection (c)
that are attributable to the 1995 DSH allotment for
the State (as reported by the State not later than
January 1, 1997, on HCFA Form 64, and as approved
by the Secretary) for payments to institutions for men-
tal diseases and other mental health facilities, to
‘‘(ii) the State 1995 DSH spending amount.
‘‘(C) STATE 1995 DSH SPENDING AMOUNT.—For purposes
of subparagraph (B)(ii), the ‘State 1995 DSH spending
amount’, with respect to a State, is the Federal medical
assistance percentage (for fiscal year 1995) of the payment
adjustments made under subsection (c) under the State
plan that are attributable to the fiscal year 1995 DSH
H. R. 2015—264
allotment for the State (as reported by the State not later
than January 1, 1997, on HCFA Form 64, and as approved
by the Secretary).’’.
(c) DESCRIPTION OF TARGETING PAYMENTS.—Section 1923(a)(2)
(42 U.S.C. 1396r–4(a)(2)) is amended by adding at the end the
following:
‘‘(D) A State plan under this title shall not be considered
to meet the requirements of section 1902(a)(13)(A)(iv) (insofar
as it requires payments to hospitals to take into account the
situation of hospitals that serve a disproportionate number
of low-income patients with special needs), as of October 1,
1998, unless the State has submitted to the Secretary by such
date a description of the methodology used by the State to
identify and to make payments to disproportionate share hos-
pitals, including children’s hospitals, on the basis of the propor-
tion of low-income and medicaid patients served by such hos-
pitals. The State shall provide an annual report to the Secretary
describing the disproportionate share payments to each such
disproportionate share hospital.’’.
(d) DIRECT PAYMENT BY STATE FOR MANAGED CARE ENROLL-
EES.—Section 1923 (42 U.S.C. 1396r–4) is amended by adding at
the end the following:
‘‘(i) REQUIREMENT FOR DIRECT PAYMENT.—
‘‘(1) IN GENERAL.—No payment may be made under section
1903(a)(1) with respect to a payment adjustment made under
this section, for services furnished by a hospital on or after
October 1, 1997, with respect to individuals eligible for medical
assistance under the State plan who are enrolled with a man-
aged care entity (as defined in section 1932(a)(1)(B)) or under
any other managed care arrangement unless a payment, equal
to the amount of the payment adjustment—
‘‘(A) is made directly to the hospital by the State;
and
‘‘(B) is not used to determine the amount of a prepaid
capitation payment under the State plan to the entity
or arrangement with respect to such individuals.
‘‘(2) EXCEPTION FOR CURRENT ARRANGEMENTS.—Paragraph
(1) shall not apply to a payment adjustment provided pursuant
to a payment arrangement in effect on July 1, 1997.’’.
(e) 
TRANSITION
RULE.—Effective 
July 
1, 
1997, 
section
1923(g)(2)(A) of the Social Security Act (42 U.S.C. 1396r–4(g)(2)(A))
shall be applied to the State of California as though—
(1) ‘‘(or that begins on or after July 1, 1997, and before
July 1, 1999)’’ were inserted in such section after ‘‘January
1, 1995,’’; and
(2) ‘‘(or 175 percent in the case of a State fiscal year
that begins on or after July 1, 1997, and before July 1, 1999)’’
were inserted in such section after ‘‘200 percent’’.
SEC. 4722. TREATMENT OF STATE TAXES IMPOSED ON CERTAIN HOS-
PITALS.
(a) EXCEPTION FROM TAX DOES NOT DISQUALIFY AS BROAD-
BASED TAX.—Section 1903(w)(3) (42 U.S.C. 1396b(w)(3)) is amend-
ed—
(1) in subparagraph (B), by striking ‘‘and (E)’’ and inserting
‘‘(E), and (F)’’; and
(2) by adding at the end the following:
H. R. 2015—265
‘‘(F) In no case shall a tax not qualify as a broad-based health
care related tax under this paragraph because it does not apply
to a hospital that is described in section 501(c)(3) of the Internal
Revenue Code of 1986 and exempt from taxation under section
501(a) of such Code and that does not accept payment under the
State plan under this title or under title XVIII.’’.
(b) REDUCTION IN FEDERAL FINANCIAL PARTICIPATION IN CASE
OF IMPOSITION OF TAX.—Section 1903(b) (42 U.S.C. 1396b(b)), as
amended by section 4707(b), is amended by adding at the end
the following:
‘‘(5) Notwithstanding the preceding provisions of this section,
the amount determined under subsection (a)(1) for any State shall
be decreased in a quarter by the amount of any health care related
taxes (described in section 1902(w)(3)(A)) that are imposed on a
hospital described in subsection (w)(3)(F) in that quarter.’’.
(c) WAIVER OF CERTAIN PROVIDER TAX PROVISIONS.—Notwith-
standing any other provision of law, taxes, fees, or assessments,
as defined in section 1903(w)(3)(A) of the Social Security Act (42
U.S.C. 1396b(w)(3)(A)), that were collected by the State of New
York from a health care provider before June 1, 1997, and for
which a waiver of the provisions of subparagraph (B) or (C) of
section 1903(w)(3) of such Act has been applied for, or that would,
but for this subsection require that such a waiver be applied for,
in accordance with subparagraph (E) of such section, and, (if so
applied for) upon which action by the Secretary of Health and
Human Services (including any judicial review of any such proceed-
ing) has not been completed as of July 23, 1997, are deemed
to be permissible health care related taxes and in compliance with
the requirements of subparagraphs (B) and (C) of section 1903(w)(3)
of such Act.
(d) EFFECTIVE DATE.—The amendments made by subsection
(a) shall apply to taxes imposed before, on, or after the date of
the enactment of this Act and the amendment made by subsection
(b) shall apply to taxes imposed on or after such date.
SEC. 4723. ADDITIONAL FUNDING FOR STATE EMERGENCY HEALTH
SERVICES FURNISHED TO UNDOCUMENTED ALIENS.
(a) TOTAL AMOUNT AVAILABLE
FOR ALLOTMENT.—There are
available for allotments under this section for each of the 4 consecu-
tive fiscal years (beginning with fiscal year 1998) $25,000,000 for
payments to certain States under this section.
(b) STATE ALLOTMENT AMOUNT.—
(1) IN
GENERAL.—The Secretary of Health and Human
Services shall compute an allotment for each fiscal year begin-
ning with fiscal year 1998 and ending with fiscal year 2001
for each of the 12 States with the highest number of undocu-
mented aliens. The amount of such allotment for each such
State for a fiscal year shall bear the same ratio to the total
amount available for allotments under subsection (a) for the
fiscal year as the ratio of the number of undocumented aliens
in the State in the fiscal year bears to the total of such numbers
for all such States for such fiscal year. The amount of allotment
to a State provided under this paragraph for a fiscal year
that is not paid out under subsection (c) shall be available
for payment during the subsequent fiscal year.
(2) DETERMINATION.—For purposes of paragraph (1), the
number of undocumented aliens in a State under this section
H. R. 2015—266
shall be determined based on estimates of the resident illegal
alien population residing in each State prepared by the Statis-
tics Division of the Immigration and Naturalization Service
as of October 1992 (or as of such later date if such date
is at least 1 year before the beginning of the fiscal year
involved).
(c) USE OF FUNDS.—From the allotments made under subsection
(b), the Secretary shall pay to each State amounts the State dem-
onstrates were paid by the State (or by a political subdivision
of the State) for emergency health services furnished to undocu-
mented aliens.
(d) STATE DEFINED.—For purposes of this section, the term
‘‘State’’ includes the District of Columbia.
(e) STATE
ENTITLEMENT.—This section constitutes budget
authority in advance of appropriations Acts and represents the
obligation of the Federal Government to provide for the payment
to States of amounts provided under this section.
SEC. 4724. ELIMINATION OF WASTE, FRAUD, AND ABUSE.
(a) BAN ON SPENDING FOR NONHEALTH RELATED ITEMS.—Sec-
tion 1903(i) (42 U.S.C. 1396b(i)) is amended—
(1) in paragraphs (2) and (16), by striking the period at
the end and inserting ‘‘; or’’;
(2) in paragraphs (10)(B), (11), and (13), by adding ‘‘or’’
at the end; and
(3) by inserting after paragraph (16), the following:
‘‘(17) with respect to any amount expended for roads,
bridges, stadiums, or any other item or service not covered
under a State plan under this title.’’.
(b) SURETY BOND REQUIREMENT
FOR HOME HEALTH AGEN-
CIES.—
(1) IN GENERAL.—Section 1903(i) (42 U.S.C. 1396b(i)), as
amended by subsection (a), is amended—
(A) in paragraph (17), by striking the period at the
end and inserting ‘‘; or’’; and
(B) by inserting after paragraph (17), the following:
‘‘(18) with respect to any amount expended for home health
care services provided by an agency or organization unless
the agency or organization provides the State agency on a
continuing basis a surety bond in a form specified by the
Secretary under paragraph (7) of section 1861(o) and in an
amount that is not less than $50,000 or such comparable surety
bond as the Secretary may permit under the last sentence
of such section.’’.
(2) EFFECTIVE DATE.—The amendments made by paragraph
(1) shall apply to home health care services furnished on or
after January 1, 1998.
(c) CONFLICT OF INTEREST SAFEGUARDS.—
(1) 
IN
GENERAL.—Section 
1902(a)(4)(C) 
(42 
U.S.C.
1396a(a)(4)(C)) is amended—
(A) by striking ‘‘and (C)’’ and inserting ‘‘(C)’’;
(B) by striking ‘‘local officer or employee’’ and inserting
‘‘local officer, employee, or independent contractor’’;
(C) by striking ‘‘such an officer or employee’’ the first
2 places it appears and inserting ‘‘such an officer, employee,
or contractor’’; and
H. R. 2015—267
(D) by inserting before the semicolon the following:
‘‘, and (D) that each State or local officer, employee, or
independent contractor who is responsible for selecting,
awarding, or otherwise obtaining items and services under
the State plan shall be subject to safeguards against con-
flicts of interest that are at least as stringent as the safe-
guards that apply under section 27 of the Office of Federal
Procurement Policy Act (41 U.S.C. 423) to persons described
in subsection (a)(2) of such section of that Act’’.
(2) EFFECTIVE DATE.—The amendments made by paragraph
(1) shall take effect on January 1, 1998.
(d) AUTHORITY TO REFUSE TO ENTER INTO MEDICAID AGREE-
MENTS WITH INDIVIDUALS OR ENTITIES CONVICTED OF FELONIES.—
Section 1902(a)(23) (42 U.S.C. 1396(a)) is amended—
(1) by striking ‘‘except as provided in subsection (g) and
in section 1915 and except in the case of Puerto Rico, the
Virgin Islands, and Guam,’’; and
(2) by inserting before the semicolon at the end the follow-
ing: ‘‘, except as provided in subsection (g) and in section
1915, except that this paragraph shall not apply in the case
of Puerto Rico, the Virgin Islands, and Guam, and except that
nothing in this paragraph shall be construed as requiring a
State to provide medical assistance for such services furnished
by a person or entity convicted of a felony under Federal
or State law for an offense which the State agency determines
is inconsistent with the best interests of beneficiaries under
the State plan’’.
(e) MONITORING PAYMENTS FOR DUAL ELIGIBLES.—The Adminis-
trator of the Health Care Financing Administration shall develop
mechanisms to improve the monitoring of, and to prevent, inappro-
priate payments under the medicaid program under title XIX of
the Social Security Act (42 U.S.C. 1396 et seq.) in the case of
individuals who are dually eligible for benefits under such program
and under the medicare program under title XVIII of such Act
(42 U.S.C. 1395 et seq.).
(f) BENEFICIARY AND PROGRAM PROTECTION AGAINST WASTE,
FRAUD, AND ABUSE.—Section 1902(a) (42 U.S.C. 1396a(a)) is amend-
ed—
(1) by striking ‘‘and’’ at the end of paragraph (62);
(2) by striking the period at the end of paragraph (63)
and inserting ‘‘; and’’; and
(3) by inserting after paragraph (63) the following:
‘‘(64) provide, not later than 1 year after the date of the
enactment of this paragraph, a mechanism to receive reports
from beneficiaries and others and compile data concerning
alleged instances of waste, fraud, and abuse relating to the
operation of this title;’’.
(g) DISCLOSURE OF INFORMATION AND SURETY BOND REQUIRE-
MENT FOR SUPPLIERS OF DURABLE MEDICAL EQUIPMENT.—
(1) REQUIREMENT.—Section 1902(a) (42 U.S.C. 1396a(a)),
as amended by subsection (f), is amended—
(A) by striking ‘‘and’’ at the end of paragraph (63);
(B) by striking the period at the end of paragraph
(64) and inserting ‘‘; and’’; and
(C) by inserting after paragraph (64) the following:
‘‘(65) provide that the State shall issue provider numbers
for all suppliers of medical assistance consisting of durable
H. R. 2015—268
medical equipment, as defined in section 1861(n), and the State
shall not issue or renew such a supplier number for any such
supplier unless—
‘‘(A)(i) full and complete information as to the identity
of each person with an ownership or control interest (as
defined in section 1124(a)(3)) in the supplier or in any
subcontractor (as defined by the Secretary in regulations)
in which the supplier directly or indirectly has a 5 percent
or more ownership interest; and
‘‘(ii) to the extent determined to be feasible under
regulations of the Secretary, the name of any disclosing
entity (as defined in section 1124(a)(2)) with respect to
which a person with such an ownership or control interest
in the supplier is a person with such an ownership or
control interest in the disclosing entity; and
‘‘(B) a surety bond in a form specified by the Secretary
under section 1834(a)(16)(B) and in an amount that is
not less than $50,000 or such comparable surety bond
as the Secretary may permit under the second sentence
of such section.’’.
(2) EFFECTIVE DATE.—The amendments made by paragraph
(1) shall apply to suppliers of medical assistance consisting
of durable medical equipment furnished on or after January
1, 1998.
SEC. 4725. INCREASED FMAPS.
(a) ALASKA.—Notwithstanding the first sentence of section
1905(b) of the Social Security Act (42 U.S.C. 1396d(b)), the Federal
medical assistance percentage determined under such sentence for
Alaska shall be 59.8 percent but only with respect to—
(1) items and services furnished under a State plan under
title XIX or under a State child health plan under title XXI
of such Act during fiscal years 1998, 1999, and 2000;
(2) payments made on a capitation or other risk-basis under
such titles for coverage occurring during such period; and
(3) payments under title XIX of such Act attributable to
DSH allotments for such State determined under section 1923(f)
of such Act (42 U.S.C. 1396r–4(f)) for such fiscal years.
(b) DISTRICT OF COLUMBIA.—
(1) IN GENERAL.—The first sentence of section 1905(b) (42
U.S.C. 1396d(b)) is amended—
(A) by striking ‘‘and (2)’’ and inserting ‘‘, (2)’’, and
(B) by inserting before the period at the end the follow-
ing: ‘‘, and (3) for purposes of this title and title XXI,
the Federal medical assistance percentage for the District
of Columbia shall be 70 percent’’.
(2) EFFECTIVE DATE.—The amendments made by paragraph
(1) shall apply to—
(A) items and services furnished on or after October
1, 1997;
(B) payments made on a capitation or other risk-basis
for coverage occurring on or after such date; and
(C) payments attributable to DSH allotments for such
States determined under section 1923(f) of such Act (42
U.S.C. 1396r–4(f)) for fiscal years beginning with fiscal
year 1998.
H. R. 2015—269
SEC. 4726. INCREASE IN PAYMENT LIMITATION FOR TERRITORIES.
Section 1108 (42 U.S.C. 1308) is amended—
(1) in subsection (f), by striking ‘‘The’’ and inserting ‘‘Sub-
ject to subsection (g), the’’; and
(2) by adding at the end the following:
‘‘(g) MEDICAID PAYMENTS
TO TERRITORIES
FOR FISCAL YEAR
1998 AND THEREAFTER.—
‘‘(1) FISCAL YEAR 1998.—With respect to fiscal year 1998,
the amounts otherwise determined for Puerto Rico, the Virgin
Islands, Guam, the Northern Mariana Islands, and American
Samoa under subsection (f) for such fiscal year shall be
increased by the following amounts:
‘‘(A) For Puerto Rico, $30,000,000.
‘‘(B) For the Virgin Islands, $750,000.
‘‘(C) For Guam, $750,000.
‘‘(D) For the Northern Mariana Islands, $500,000.
‘‘(E) For American Samoa, $500,000.
‘‘(2) FISCAL YEAR 1999 AND THEREAFTER.—Notwithstanding
subsection (f), with respect to fiscal year 1999 and any fiscal
year thereafter, the total amount certified by the Secretary
under title XIX for payment to—
‘‘(A) Puerto Rico shall not exceed the sum of the amount
provided in this subsection for the preceding fiscal year
increased by the percentage increase in the medical care
component of the Consumer Price Index for all urban
consumers (as published by the Bureau of Labor Statistics)
for the 12-month period ending in March preceding the
beginning of the fiscal year, rounded to the nearest
$100,000;
‘‘(B) the Virgin Islands shall not exceed the sum of
the amount provided in this subsection for the preceding
fiscal year increased by the percentage increase referred
to in subparagraph (A), rounded to the nearest $10,000;
‘‘(C) Guam shall not exceed the sum of the amount
provided in this subsection for the preceding fiscal year
increased by the percentage increase referred to in subpara-
graph (A), rounded to the nearest $10,000;
‘‘(D) the Northern Mariana Islands shall not exceed
the sum of the amount provided in this subsection for
the preceding fiscal year increased by the percentage
increase referred to in subparagraph (A), rounded to the
nearest $10,000; and
‘‘(E) American Samoa shall not exceed the sum of the
amount provided in this subsection for the preceding fiscal
year increased by the percentage increase referred to in
subparagraph (A), rounded to the nearest $10,000.’’.
CHAPTER 4—ELIGIBILITY
SEC. 4731. STATE OPTION OF CONTINUOUS ELIGIBILITY FOR 12
MONTHS; CLARIFICATION OF STATE OPTION TO COVER
CHILDREN.
(a) CONTINUOUS
ELIGIBILITY
OPTION.—Section 1902(e) (42
U.S.C. 1396a(e)) is amended by adding at the end the following
new paragraph:
‘‘(12) At the option of the State, the plan may provide that
an individual who is under an age specified by the State (not
H. R. 2015—270
to exceed 19 years of age) and who is determined to be eligible
for benefits under a State plan approved under this title under
subsection (a)(10)(A) shall remain eligible for those benefits until
the earlier of—
‘‘(A) the end of a period (not to exceed 12 months) following
the determination; or
‘‘(B) the time that the individual exceeds that age.’’.
(b) CLARIFICATION OF STATE OPTION TO COVER ALL CHILDREN
UNDER
19 YEARS
OF
AGE.—Section 1902(l)(1)(D) (42 U.S.C.
1396a(l)(1)(D)) is amended by inserting ‘‘(or, at the option of a
State, after any earlier date)’’ after ‘‘children born after September
30, 1983’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall apply to medical assistance for items and services furnished
on or after October 1, 1997.
SEC. 4732. PAYMENT OF PART B PREMIUMS.
(a) 
ELIGIBILITY.—Section 
1902(a)(10)(E) 
(42 
U.S.C.
1396a(a)(10)(E)) is amended—
(1) by striking ‘‘and’’ at the end of clause (ii); and
(2) by inserting after clause (iii) the following:
‘‘(iv) subject to sections 1933 and 1905(p)(4), for making
medical assistance available (but only for premiums pay-
able with respect to months during the period beginning
with January 1998, and ending with December 2002)—
‘‘(I) for medicare cost-sharing described in section
1905(p)(3)(A)(ii) for individuals who would be qualified
medicare beneficiaries described in section 1905(p)(1)
but for the fact that their income exceeds the income
level established by the State under section 1905(p)(2)
and is at least 120 percent, but less than 135 percent,
of the official poverty line (referred to in such section)
for a family of the size involved and who are not
otherwise eligible for medical assistance under the
State plan, and
‘‘(II) for the portion of medicare cost-sharing
described in section 1905(p)(3)(A)(ii) that is attrib-
utable to the operation of the amendments made by
(and subsection (e)(3) of) section 4611 of the Balanced
Budget Act of 1997 for individuals who would be
described in subclause (I) if ‘135 percent’ and ‘175
percent’ were substituted for ‘120 percent’ and ‘135
percent’ respectively; and’’.
(b) CONFORMING
AMENDMENT.—Section 1905(b) (42 U.S.C.
1396d(b)) is amended by striking ‘‘The term’’ and inserting ‘‘Subject
to section 1933(d), the term’’.
(c) TERMS AND CONDITIONS OF COVERAGE.—Title XIX (42 U.S.C.
1395 et seq.), as amended by section 4701(a), is amended by
redesignating section 1933 as section 1934 and by inserting after
section 1932 the following new section:
‘‘STATE COVERAGE OF MEDICARE COST-SHARING FOR ADDITIONAL
LOW-INCOME MEDICARE BENEFICIARIES
‘‘SEC. 1933. (a) IN GENERAL.—A State plan under this title
shall provide, under section 1902(a)(10)(E)(iv) and subject to the
succeeding provisions of this section and through a plan amend-
ment, for medical assistance for payment of the cost of medicare
H. R. 2015—271
cost-sharing described in such section on behalf of all individuals
described in such section (in this section referred to as ‘qualifying
individuals’) who are selected to receive such assistance under
subsection (b).
‘‘(b) SELECTION
OF QUALIFYING INDIVIDUALS.—A State shall
select qualifying individuals, and provide such individuals with
assistance, under this section consistent with the following:
‘‘(1) ALL QUALIFYING INDIVIDUALS MAY APPLY.—The State
shall permit all qualifying individuals to apply for assistance
during a calendar year.
‘‘(2) SELECTION ON FIRST-COME, FIRST-SERVED BASIS.—
‘‘(A) IN GENERAL.—For each calendar year (beginning
with 1998), from (and to the extent of) the amount of
the allocation under subsection (c) for the State for the
fiscal year ending in such calendar year, the State shall
select qualifying individuals who apply for the assistance
in the order in which they apply.
‘‘(B) CARRYOVER.—For calendar years after 1998, the
State shall give preference to individuals who were pro-
vided such assistance (or other assistance described in sec-
tion 1902(a)(10)(E)) in the last month of the previous year
and who continue to be (or become) qualifying individuals.
‘‘(3) LIMIT ON NUMBER OF INDIVIDUALS BASED ON ALLOCA-
TION.—The State shall limit the number of qualifying individ-
uals selected with respect to assistance in a calendar year
so that the aggregate amount of such assistance provided to
such individuals in such year is estimated to be equal to (but
not exceed) the State’s allocation under subsection (c) for the
fiscal year ending in such calendar year.
‘‘(4) RECEIPT OF ASSISTANCE DURING DURATION OF YEAR.—
If a qualifying individual is selected to receive assistance under
this section for a month in year, the individual is entitled
to receive such assistance for the remainder of the year if
the individual continues to be a qualifying individual. The
fact that an individual is selected to receive assistance under
this section at any time during a year does not entitle the
individual to continued assistance for any succeeding year.
‘‘(c) ALLOCATION.—
‘‘(1) TOTAL ALLOCATION.—The total amount available for
allocation under this section for—
‘‘(A) fiscal year 1998 is $200,000,000;
‘‘(B) fiscal year 1999 is $250,000,000;
‘‘(C) fiscal year 2000 is $300,000,000;
‘‘(D) fiscal year 2001 is $350,000,000; and
‘‘(E) fiscal year 2002 is $400,000,000.
‘‘(2) ALLOCATION TO STATES.—The Secretary shall provide
for the allocation of the total amount described in paragraph
(1) for a fiscal year, among the States that executed a plan
amendment in accordance with subsection (a), based upon the
Secretary’s estimate of the ratio of—
‘‘(A) an amount equal to the sum of—
‘‘(i) twice the total number of individuals described
in section 1902(a)(10)(E)(iv)(I) in the State, and
‘‘(ii) the total number of individuals described in
section 1902(a)(10)(E)(iv)(II) in the State; to
‘‘(B) the sum of the amounts computed under subpara-
graph (A) for all eligible States.
H. R. 2015—272
‘‘(d) APPLICABLE FMAP.—With respect to assistance described
in section 1902(a)(10)(E)(iv) furnished in a State for calendar quar-
ters in a calendar year —
‘‘(1) to the extent that such assistance does not exceed
the State’s allocation under subsection (c) for the fiscal year
ending in the calendar year, the Federal medical assistance
percentage shall be equal to 100 percent; and
‘‘(2) to the extent that such assistance exceeds such alloca-
tion, the Federal medical assistance percentage is 0 percent.
‘‘(e) LIMITATION ON ENTITLEMENT.—Except as specifically pro-
vided under this section, nothing in this title shall be construed
as establishing any entitlement of individuals described in section
1902(a)(10)(E)(iv) to assistance described in such section.
‘‘(f) COVERAGE OF COSTS THROUGH PART B OF THE MEDICARE
PROGRAM.—For each fiscal year, the Secretary shall provide for
the transfer from the Federal Supplementary Medical Insurance
Trust Fund under section 1841 to the appropriate account in the
Treasury that provides for payments under section 1903(a) with
respect to medical assistance provided under this section, of an
amount equivalent to the total of the amount of payments made
under such section that is attributable to this section and such
transfer shall be treated as an expenditure from such Trust Fund
for purposes of section 1839.’’.
SEC. 4733. STATE OPTION TO PERMIT WORKERS WITH DISABILITIES
TO BUY INTO MEDICAID.
Section 1902(a)(10)(A)(ii) (42 U.S.C. 1396a(a)(10)(A)(ii)) is
amended—
(1) in subclause (XI), by striking ‘‘or’’ at the end;
(2) in subclause (XII), by adding ‘‘or’’ at the end; and
(3) by adding at the end the following:
‘‘(XIII) who are in families whose income is
less than 250 percent of the income official poverty
line (as defined by the Office of Management and
Budget, and revised annually in accordance with
section 673(2) of the Omnibus Budget Reconcili-
ation Act of 1981) applicable to a family of the
size involved, and who but for earnings in excess
of the limit established under section 1905(q)(2)(B),
would be considered to be receiving supplemental
security income (subject, notwithstanding section
1916, to payment of premiums or other cost-shar-
ing charges (set on a sliding scale based on income)
that the State may determine);’’.
SEC. 4734. PENALTY FOR FRAUDULENT ELIGIBILITY.
Section 1128B(a) (42 U.S.C. 1320a–7b(a)), as amended by sec-
tion 217 of the Health Insurance Portability and Accountability
Act of 1996 (Public Law 104–191; 110 Stat. 2008), is amended—
(1) by striking paragraph (6) and inserting the following:
‘‘(6) for a fee knowingly and willfully counsels or assists
an individual to dispose of assets (including by any transfer
in trust) in order for the individual to become eligible for
medical assistance under a State plan under title XIX, if dispos-
ing of the assets results in the imposition of a period of ineli-
gibility for such assistance under section 1917(c),’’; and
(2) in clause (ii) of the matter following such paragraph,
by striking ‘‘failure, or conversion by any other person’’ and
H. R. 2015—273
inserting ‘‘failure, conversion, or provision of counsel or assist-
ance by any other person’’.
SEC. 4735. TREATMENT OF CERTAIN SETTLEMENT PAYMENTS.
(a) IN GENERAL.—Notwithstanding any other provision of law,
the payments described in subsection (b) shall not be considered
income or resources in determining eligibility for, or the amount
of benefits under, a State plan of medical assistance approved
under title XIX of the Social Security Act.
(b) PAYMENTS DESCRIBED.—The payments described in this sub-
section are—
(1) payments made from any fund established pursuant
to a class settlement in the case of Susan Walker v. Bayer
Corporation, et al., 96–C–5024 (N.D. Ill.); and
(2) payments made pursuant to a release of all claims
in a case—
(A) that is entered into in lieu of the class settlement
referred to in paragraph (1); and
(B) that is signed by all affected parties in such case
on or before the later of—
(i) December 31, 1997, or
(ii) the date that is 270 days after the date on
which such release is first sent to the persons (or
the legal representative of such persons) to whom the
payment is to be made.
CHAPTER 5—BENEFITS
SEC. 4741. ELIMINATION OF REQUIREMENT TO PAY FOR PRIVATE
INSURANCE.
(a) REPEAL
OF STATE PLAN PROVISION.—Section 1902(a)(25)
(42 U.S.C. 1396a(a)(25)) is amended—
(1) by striking subparagraph (G); and
(2) by redesignating subparagraphs (H) and (I) as subpara-
graphs (G) and (H), respectively.
(b) MAKING PROVISION OPTIONAL.—Section 1906 (42 U.S.C.
1396e) is amended—
(1) in subsection (a)—
(A) by striking ‘‘For purposes of section 1902(a)(25)(G)
and subject to subsection (d), each’’ and inserting ‘‘Each’’;
(B) in paragraph (1), by striking ‘‘shall’’ and inserting
‘‘may’’; and
(C) in paragraph (2), by striking ‘‘shall’’ and inserting
‘‘may’’; and
(2) by striking subsection (d).
(c) EFFECTIVE DATE.—The amendments made by this section
shall take effect on the date of the enactment of this Act.
SEC. 4742. PHYSICIAN QUALIFICATION REQUIREMENTS.
(a) IN GENERAL.—Section 1903(i) (42 U.S.C. 1396b(i)) is amend-
ed by striking paragraph (12).
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall apply to services furnished on or after the date of the enact-
ment of this Act.
H. R. 2015—274
SEC. 4743. ELIMINATION OF REQUIREMENT OF PRIOR INSTITUTIONAL-
IZATION WITH RESPECT TO HABILITATION SERVICES
FURNISHED UNDER A WAIVER FOR HOME OR COMMU-
NITY-BASED SERVICES.
(a) IN GENERAL.—Section 1915(c)(5) (42 U.S.C. 1396n(c)(5)) is
amended, in the matter preceding subparagraph (A), by striking
‘‘, with respect to individuals who receive such services after dis-
charge from a nursing facility or intermediate care facility for
the mentally retarded’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
apply to services furnished on or after October 1, 1997.
SEC. 4744. STUDY AND REPORT ON EPSDT BENEFIT.
(a) STUDY.—
(1) IN
GENERAL.—The Secretary of Health and Human
Services, in consultation with Governors, directors of State
medicaid programs, the American Academy of Actuaries, and
representatives 
of 
appropriate 
provider 
and 
beneficiary
organizations, shall conduct a study of the provision of early
and periodic screening, diagnostic, and treatment services
under the medicaid program under title XIX of the Social
Security Act in accordance with the requirements of section
1905(r) of such Act (42 U.S.C. 1396d(r)).
(2) REQUIRED CONTENTS.—The study conducted under para-
graph (1) shall include examination of the actuarial value of
the provision of such services under the medicaid program
and an examination of the portions of such actuarial value
that are attributable to paragraph (5) of section 1905(r) of
such Act and to the second sentence of such section.
(b) REPORT.—Not later than 12 months after the date of the
enactment of this Act, the Secretary of Health and Human Services
shall submit a report to Congress on the results of the study
conducted under subsection (a).
CHAPTER 6—ADMINISTRATION AND MISCELLANEOUS
SEC. 4751. ELIMINATION OF DUPLICATIVE INSPECTION OF CARE
REQUIREMENTS FOR ICFS/MR AND MENTAL HOSPITALS.
(a) 
MENTAL
HOSPITALS.—Section 
1902(a)(26) 
(42 
U.S.C.
1396a(a)(26)) is amended—
(1) by striking ‘‘provide—
‘‘(A) with respect to each patient’’ and inserting ‘‘pro-
vide, with respect to each patient’’; and
(2) by striking subparagraphs (B) and (C).
(b) ICFS/MR.—Section 1902(a)(31) (42 U.S.C. 1396a(a)(31)) is
amended—
(1) by striking ‘‘provide—
‘‘(A) with respect to each patient’’ and inserting ‘‘pro-
vide, with respect to each patient’’; and
(2) by striking subparagraphs (B) and (C).
(c) EFFECTIVE DATE.—The amendments made by this section
take effect on the date of the enactment of this Act.
SEC. 4752. ALTERNATIVE SANCTIONS FOR NONCOMPLIANT ICFS/MR.
(a) 
IN
GENERAL.—Section 
1902(i)(1)(B) 
(42 
U.S.C.
1396a(i)(1)(B)) is amended by striking ‘‘provide’’ and inserting
‘‘establish alternative remedies if the State demonstrates to the
H. R. 2015—275
Secretary’s satisfaction that the alternative remedies are effective
in deterring noncompliance and correcting deficiencies, and may
provide’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
takes effect on the date of the enactment of this Act.
SEC. 4753. MODIFICATION OF MMIS REQUIREMENTS.
(a) IN GENERAL.—Section 1903(r) (42 U.S.C. 1396b(r)) is amend-
ed—
(1) by striking all that precedes paragraph (5) and inserting
the following:
‘‘(r)(1) In order to receive payments under subsection (a) for
use of automated data systems in administration of the State plan
under this title, a State must have in operation mechanized claims
processing and information retrieval systems that meet the require-
ments of this subsection and that the Secretary has found—
‘‘(A) are adequate to provide efficient, economical, and effec-
tive administration of such State plan;
‘‘(B) are compatible with the claims processing and informa-
tion retrieval systems used in the administration of title XVIII,
and for this purpose—
‘‘(i) have a uniform identification coding system
for providers, other payees, and beneficiaries under
this title or title XVIII;
‘‘(ii) provide liaison between States and carriers
and intermediaries with agreements under title XVIII
to facilitate timely exchange of appropriate data; and
‘‘(iii) provide for exchange of data between the
States and the Secretary with respect to persons sanc-
tioned under this title or title XVIII;
‘‘(C) are capable of providing accurate and timely data;
‘‘(D) are complying with the applicable provisions of part
C of title XI;
‘‘(E) are designed to receive provider claims in standard
formats to the extent specified by the Secretary; and
‘‘(F) effective for claims filed on or after January 1, 1999,
provide for electronic transmission of claims data in the format
specified by the Secretary and consistent with the Medicaid
Statistical Information System (MSIS) (including detailed
individual enrollee encounter data and other information that
the Secretary may find necessary).’’;
(2) in paragraph (5)—
(A) by striking subparagraph (B);
(B) by striking all that precedes clause (i) and inserting
the following:
‘‘(2) In order to meet the requirements of this paragraph,
mechanized claims processing and information retrieval systems
must meet the following requirements:’’;
(C) in clause (iii), by striking ‘‘under paragraph (6)’’;
and
(D) by redesignating clauses (i) through (iii) as para-
graphs (A) through (C); and
(3) by striking paragraphs (6), (7), and (8).
(b) CONFORMING AMENDMENTS.—Section 1902(a)(25)(A)(ii) (42
U.S.C. 1396a(a)(25)(A)(ii)) is amended by striking all that follows
‘‘shall’’ and inserting the following: ‘‘be integrated with, and be
H. R. 2015—277
‘‘(ii) TIMING OF DETERMINATION.—In no case shall
a determination on a petition submitted under clause
(i) be made prior to the expiration of the 1-year period
beginning on the date on which the name of the peti-
tioner was added to the registry under subparagraph
(C).’’.
(c) RETROACTIVE REVIEW.—The procedures developed by a State
under the amendments made by subsection (a) and (b) shall permit
an individual to petition for a review of any finding made by
a State under section 1819(g)(1)(C) or 1919(g)(1)(C) of the Social
Security Act (42 U.S.C. 1395i-3(g)(1)(C) or 1396r(g)(1)(C)) after
January 1, 1995.
SEC. 4756. MEDICALLY ACCEPTED INDICATION.
Section 1927(g)(1)(B)(i) (42 U.S.C. 1396r–8(g)(1)(B)(i)) is amend-
ed—
(1) by striking ‘‘and’’ at the end of subclause (II),
(2) by redesignating subclause (III) as subclause (IV), and
(3) by inserting after subclause (II) the following:
‘‘(III) the DRUGDEX Information System;
and’’.
SEC. 4757. CONTINUATION OF STATE-WIDE SECTION 1115 MEDICAID
WAIVERS.
(a) IN GENERAL.—Section 1115 (42 U.S.C. 1315) is amended
by adding at the end the following new subsection:
‘‘(e)(1) The provisions of this subsection shall apply to the
extension of any State-wide comprehensive demonstration project
(in this subsection referred to as ‘waiver project’) for which a waiver
of compliance with requirements of title XIX is granted under
subsection (a).
‘‘(2) During the 6-month period ending 1 year before the date
the waiver under subsection (a) with respect to a waiver project
would otherwise expire, the chief executive officer of the State
which is operating the project may submit to the Secretary a
written request for an extension, of up to 3 years, of the project.
‘‘(3) If the Secretary fails to respond to the request within
6 months after the date it is submitted, the request is deemed
to have been granted.
‘‘(4) If such a request is granted, the deadline for submittal
of a final report under the waiver project is deemed to have been
extended until the date that is 1 year after the date the waiver
project would otherwise have expired.
‘‘(5) The Secretary shall release an evaluation of each such
project not later than 1 year after the date of receipt of the final
report.
‘‘(6) Subject to paragraphs (4) and (7), the extension of a waiver
project under this subsection shall be on the same terms and
conditions (including applicable terms and conditions relating to
quality and access of services, budget neutrality, data and reporting
requirements, and special population protections) that applied to
the project before its extension under this subsection.
‘‘(7) If an original condition of approval of a waiver project
was that Federal expenditures under the project not exceed the
Federal expenditures that would otherwise have been made, the
Secretary shall take such steps as may be necessary to ensure
that, in the extension of the project under this subsection, such
condition continues to be met. In applying the previous sentence,
H. R. 2015—278
the Secretary shall take into account the Secretary’s best estimate
of rates of change in expenditures at the time of the extension.’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall apply to demonstration projects initially approved before, on,
or after the date of the enactment of this Act.
SEC. 4758. EXTENSION OF MORATORIUM.
Section 6408(a)(3) of the Omnibus Budget Reconciliation Act
of 1989, as amended by section 13642 of the Omnibus Budget
Reconciliation Act of 1993, is amended by striking ‘‘December 31,
1995’’ and inserting ‘‘December 31, 2002’’.
SEC. 4759. EXTENSION OF EFFECTIVE DATE FOR STATE LAW AMEND-
MENT.
In the case of a State plan under title XIX of the Social
Security Act which the Secretary of Health and Human Services
determines requires State legislation in order for the plan to meet
the additional requirements imposed by the amendments made
by a provision of this subtitle, the State plan shall not be regarded
as failing to comply with the requirements of such title solely
on the basis of its failure to meet these additional requirements
before the first day of the first calendar quarter beginning after
the close of the first regular session of the State legislature that
begins after the date of the enactment of this Act. For purposes
of the previous sentence, in the case of a State that has a 2-
year legislative session, each year of the session is considered
to be a separate regular session of the State legislature.
Subtitle I—Programs of All-Inclusive Care
for the Elderly (PACE)
SEC. 4801. COVERAGE OF PACE UNDER THE MEDICARE PROGRAM.
Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.)
is amended by adding at the end the following new section:
‘‘PAYMENTS TO, AND COVERAGE OF BENEFITS UNDER, PROGRAMS OF
ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)
‘‘SEC. 1894. (a) RECEIPT OF BENEFITS THROUGH ENROLLMENT
IN PACE PROGRAM; DEFINITIONS
FOR PACE PROGRAM RELATED
TERMS.—
‘‘(1) BENEFITS THROUGH ENROLLMENT IN A PACE PROGRAM.—
In accordance with this section, in the case of an individual
who is entitled to benefits under part A or enrolled under
part B and who is a PACE program eligible individual (as
defined in paragraph (5)) with respect to a PACE program
offered by a PACE provider under a PACE program agree-
ment—
‘‘(A) the individual may enroll in the program under
this section; and
‘‘(B) so long as the individual is so enrolled and in
accordance with regulations—
‘‘(i) the individual shall receive benefits under this
title solely through such program; and
‘‘(ii) the PACE provider is entitled to payment
under and in accordance with this section and such
agreement for provision of such benefits.
H. R. 2015—279
‘‘(2) PACE PROGRAM DEFINED.—For purposes of this section,
the term ‘PACE program’ means a program of all-inclusive
care for the elderly that meets the following requirements:
‘‘(A) OPERATION.—The entity operating the program
is a PACE provider (as defined in paragraph (3)).
‘‘(B) COMPREHENSIVE BENEFITS.—The program provides
comprehensive health care services to PACE program
eligible individuals in accordance with the PACE program
agreement and regulations under this section.
‘‘(C) TRANSITION.—In the case of an individual who
is enrolled under the program under this section and whose
enrollment ceases for any reason (including that the
individual no longer qualifies as a PACE program eligible
individual, the termination of a PACE program agreement,
or otherwise), the program provides assistance to the
individual in obtaining necessary transitional care through
appropriate referrals and making the individual’s medical
records available to new providers.
‘‘(3) PACE PROVIDER DEFINED.—
‘‘(A) IN GENERAL.—For purposes of this section, the
term ‘PACE provider’ means an entity that—
‘‘(i) subject to subparagraph (B), is (or is a distinct
part of) a public entity or a private, nonprofit entity
organized for charitable purposes under section
501(c)(3) of the Internal Revenue Code of 1986; and
‘‘(ii) has entered into a PACE program agreement
with respect to its operation of a PACE program.
‘‘(B) TREATMENT OF PRIVATE, FOR-PROFIT PROVIDERS.—
Clause (i) of subparagraph (A) shall not apply—
‘‘(i) to entities subject to a demonstration project
waiver under subsection (h); and
‘‘(ii) after the date the report under section 4804(b)
of the Balanced Budget Act of 1997 is submitted, unless
the Secretary determines that any of the findings
described in subparagraph (A), (B), (C), or (D) of para-
graph (2) of such section are true.
‘‘(4) PACE PROGRAM AGREEMENT DEFINED.—For purposes
of this section, the term ‘PACE program agreement’ means,
with respect to a PACE provider, an agreement, consistent
with this section, section 1934 (if applicable), and regulations
promulgated to carry out such sections, between the PACE
provider and the Secretary, or an agreement between the PACE
provider and a State administering agency for the operation
of a PACE program by the provider under such sections.
‘‘(5) PACE PROGRAM ELIGIBLE INDIVIDUAL DEFINED.—For
purposes of this section, the term ‘PACE program eligible
individual’ means, with respect to a PACE program, an individ-
ual who—
‘‘(A) is 55 years of age or older;
‘‘(B) subject to subsection (c)(4), is determined under
subsection (c) to require the level of care required under
the State medicaid plan for coverage of nursing facility
services;
‘‘(C) resides in the service area of the PACE program;
and
H. R. 2015—280
‘‘(D) meets such other eligibility conditions as may
be imposed under the PACE program agreement for the
program under subsection (e)(2)(A)(ii).
‘‘(6) PACE PROTOCOL.—For purposes of this section, the
term ‘PACE protocol’ means the Protocol for the Program of
All-inclusive Care for the Elderly (PACE), as published by
On Lok, Inc., as of April 14, 1995, or any successor protocol
that may be agreed upon between the Secretary and On Lok,
Inc.
‘‘(7) PACE DEMONSTRATION WAIVER PROGRAM DEFINED.—
For purposes of this section, the term ‘PACE demonstration
waiver program’ means a demonstration program under either
of the following sections (as in effect before the date of their
repeal):
‘‘(A) Section 603(c) of the Social Security Amendments
of 1983 (Public Law 98–21), as extended by section 9220
of the Consolidated Omnibus Budget Reconciliation Act
of 1985 (Public Law 99–272).
‘‘(B) Section 9412(b) of the Omnibus Budget Reconcili-
ation Act of 1986 (Public Law 99–509).
‘‘(8) STATE ADMINISTERING AGENCY DEFINED.—For purposes
of this section, the term ‘State administering agency’ means,
with respect to the operation of a PACE program in a State,
the agency of that State (which may be the single agency
responsible for administration of the State plan under title
XIX in the State) responsible for administering PACE program
agreements under this section and section 1934 in the State.
‘‘(9) TRIAL PERIOD DEFINED.—
‘‘(A) IN GENERAL.—For purposes of this section, the
term ‘trial period’ means, with respect to a PACE program
operated by a PACE provider under a PACE program
agreement, the first 3 contract years under such agreement
with respect to such program.
‘‘(B) TREATMENT OF ENTITIES PREVIOUSLY OPERATING
PACE DEMONSTRATION WAIVER PROGRAMS.—Each contract
year (including a year occurring before the effective date
of this section) during which an entity has operated a
PACE demonstration waiver program shall be counted
under subparagraph (A) as a contract year during which
the entity operated a PACE program as a PACE provider
under a PACE program agreement.
‘‘(10) REGULATIONS.—For purposes of this section, the term
‘regulations’ refers to interim final or final regulations promul-
gated under subsection (f) to carry out this section and section
1934.
‘‘(b) SCOPE OF BENEFITS; BENEFICIARY SAFEGUARDS.—
‘‘(1) IN GENERAL.—Under a PACE program agreement, a
PACE provider shall—
‘‘(A) provide to PACE program eligible individuals
enrolled with the provider, regardless of source of payment
and directly or under contracts with other entities, at a
minimum—
‘‘(i) all items and services covered under this title
(for individuals enrolled under this section) and all
items and services covered under title XIX, but without
any limitation or condition as to amount, duration,