212 
‘‘(ix) other entities determined appro-
priate by the Secretary. 
‘‘(5) PROGRAM DESIGN.— 
‘‘(A) INITIAL DESIGN.—Not later than 1 
year after the date of enactment of the Chil-
dren’s Health Insurance Program Reauthoriza-
tion Act of 2007, the Secretary shall design the 
demonstration 
project. 
The 
demonstration 
should draw upon promising, innovative models 
and incentives to reduce behavioral risk factors. 
The Administrator of the Centers for Medicare 
& Medicaid Services shall consult with the Di-
rector of the Centers for Disease Control and 
Prevention, the Director of the Office of Minor-
ity Health, the heads of other agencies in the 
Department of Health and Human Services, 
and such professional organizations, as the Sec-
retary determines to be appropriate, on the de-
sign, conduct, and evaluation of the demonstra-
tion. 
‘‘(B) NUMBER AND PROJECT AREAS.—Not 
later than 2 years after the date of enactment 
of the Children’s Health Insurance Program 
Reauthorization Act of 2007, the Secretary 
shall award 1 grant that is specifically designed 
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213 
to determine whether programs similar to pro-
grams to be conducted by other grantees under 
this subsection should be implemented with re-
spect to the general population of children who 
are eligible for child health assistance under 
State child health plans under title XXI in 
order to reduce the incidence of childhood obe-
sity among such population. 
‘‘(6) REPORT TO CONGRESS.—Not later than 3 
years after the date the Secretary implements the 
demonstration project under this subsection, the 
Secretary shall submit to Congress a report that de-
scribes the project, evaluates the effectiveness and 
cost effectiveness of the project, evaluates the bene-
ficiary satisfaction under the project, and includes 
any such other information as the Secretary deter-
mines to be appropriate. 
‘‘(7) DEFINITIONS.—In this subsection: 
‘‘(A) 
FEDERALLY-QUALIFIED
HEALTH 
CENTER.—The term ‘Federally-qualified health 
center’ has the meaning given that term in sec-
tion 1905(l)(2)(B). 
‘‘(B) INDIAN
TRIBE.—The term ‘Indian 
tribe’ has the meaning given that term in sec-
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214 
tion 4 of the Indian Health Care Improvement 
Act (25 U.S.C. 1603). 
‘‘(C) SELF-ASSESSMENT.—The term ‘self- 
assessment’ means a form that— 
‘‘(i) includes questions regarding— 
‘‘(I) behavioral risk factors; 
‘‘(II) 
needed 
preventive 
and 
screening services; and 
‘‘(III) target individuals’ pref-
erences for receiving follow-up infor-
mation; 
‘‘(ii) is assessed using such computer 
generated assessment programs; and 
‘‘(iii) allows for the provision of such 
ongoing support to the individual as the 
Secretary determines appropriate. 
‘‘(D) ONGOING SUPPORT.—The term ‘on-
going support’ means— 
‘‘(i) to provide any target individual 
with information, feedback, health coach-
ing, and recommendations regarding— 
‘‘(I) the results of a self-assess-
ment given to the individual; 
‘‘(II) behavior modification based 
on the self-assessment; and 
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215 
‘‘(III) any need for clinical pre-
ventive and screening services or 
treatment including medical nutrition 
therapy; 
‘‘(ii) to provide any target individual 
with referrals to community resources and 
programs available to assist the target in-
dividual in reducing health risks; and 
‘‘(iii) to provide the information de-
scribed in clause (i) to a health care pro-
vider, if designated by the target individual 
to receive such information. 
‘‘(8) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is authorized to be appropriated to carry out 
this subsection, $25,000,000 for the period of fiscal 
years 2008 through 2012. 
‘‘(f) 
DEVELOPMENT
OF
MODEL
ELECTRONIC 
HEALTH RECORD FORMAT FOR CHILDREN ENROLLED IN 
MEDICAID OR CHIP.— 
‘‘(1) IN GENERAL.—Not later than January 1, 
2009, the Secretary shall establish a program to en-
courage the development and dissemination of a 
model electronic health record format for children 
enrolled in the State plan under title XIX or the 
State child health plan under title XXI that is— 
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216 
‘‘(A) subject to State laws, accessible to 
parents, caregivers, and other consumers for 
the sole purpose of demonstrating compliance 
with school or leisure activity requirements, 
such as appropriate immunizations or physicals; 
‘‘(B) designed to allow interoperable ex-
changes that conform with Federal and State 
privacy and security requirements; 
‘‘(C) structured in a manner that permits 
parents and caregivers to view and understand 
the extent to which the care their children re-
ceive is clinically appropriate and of high qual-
ity; and 
‘‘(D) capable of being incorporated into, 
and otherwise compatible with, other standards 
developed for electronic health records. 
‘‘(2) FUNDING.—$5,000,000 of the amount ap-
propriated under subsection (i) for a fiscal year shall 
be used to carry out this subsection. 
‘‘(g) STUDY OF PEDIATRIC HEALTH AND HEALTH 
CARE QUALITY MEASURES.— 
‘‘(1) IN
GENERAL.—Not later than July 1, 
2009, the Institute of Medicine shall study and re-
port to Congress on the extent and quality of efforts 
to measure child health status and the quality of 
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217 
health care for children across the age span and in 
relation to preventive care, treatments for acute con-
ditions, and treatments aimed at ameliorating or 
correcting physical, mental, and developmental con-
ditions in children. In conducting such study and 
preparing such report, the Institute of Medicine 
shall— 
‘‘(A) consider all of the major national 
population-based reporting systems sponsored 
by the Federal Government that are currently 
in place, including reporting requirements 
under Federal grant programs and national 
population surveys and estimates conducted di-
rectly by the Federal Government; 
‘‘(B) identify the information regarding 
child health and health care quality that each 
system is designed to capture and generate, the 
study and reporting periods covered by each 
system, and the extent to which the information 
so generated is made widely available through 
publication; 
‘‘(C) identify gaps in knowledge related to 
children’s health status, health disparities 
among subgroups of children, the effects of so-
cial conditions on children’s health status and 
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218 
use and effectiveness of health care, and the re-
lationship between child health status and fam-
ily income, family stability and preservation, 
and children’s school readiness and educational 
achievement and attainment; and 
‘‘(D) make recommendations regarding im-
proving and strengthening the timeliness, qual-
ity, and public transparency and accessibility of 
information about child health and health care 
quality. 
‘‘(2) FUNDING.—Up to $1,000,000 of the 
amount appropriated under subsection (i) for a fis-
cal year shall be used to carry out this subsection. 
‘‘(h) RULE
OF CONSTRUCTION.—Notwithstanding 
any other provision in this section, no evidence based qual-
ity measure developed, published, or used as a basis of 
measurement or reporting under this section may be used 
to establish an irrebuttable presumption regarding either 
the medical necessity of care or the maximum permissible 
coverage for any individual child who is eligible for and 
receiving medical assistance under title XIX or child 
health assistance under title XXI. 
‘‘(i) APPROPRIATION.—Out of any funds in the 
Treasury not otherwise appropriated, there is appro-
priated for each of fiscal years 2008 through 2012, 
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219 
$45,000,000 for the purpose of carrying out this section 
(other than subsection (e)). Funds appropriated under 
this subsection shall remain available until expended.’’. 
(b) INCREASED MATCHING RATE FOR COLLECTING 
AND REPORTING ON CHILD HEALTH MEASURES.—Sec-
tion 1903(a)(3)(A) (42 U.S.C. 1396b(a)(3)(A)), is amend-
ed— 
(1) by striking ‘‘and’’ at the end of clause (i); 
and 
(2) by adding at the end the following new 
clause: 
‘‘(iii) an amount equal to the Federal med-
ical assistance percentage (as defined in section 
1905(b)) of so much of the sums expended dur-
ing such quarter (as found necessary by the 
Secretary for the proper and efficient adminis-
tration of the State plan) as are attributable to 
such developments or modifications of systems 
of the type described in clause (i) as are nec-
essary for the efficient collection and reporting 
on child health measures; and’’. 
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220 
SEC. 402. IMPROVED AVAILABILITY OF PUBLIC INFORMA-
TION REGARDING ENROLLMENT OF CHIL-
DREN IN CHIP AND MEDICAID. 
(a) INCLUSION OF PROCESS AND ACCESS MEASURES 
IN ANNUAL STATE REPORTS.—Section 2108 (42 U.S.C. 
1397hh) is amended— 
(1) in subsection (a), in the matter preceding 
paragraph (1), by striking ‘‘The State’’ and insert-
ing ‘‘Subject to subsection (e), the State’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(e) INFORMATION REQUIRED FOR INCLUSION IN 
STATE ANNUAL REPORT.—The State shall include the fol-
lowing information in the annual report required under 
subsection (a): 
‘‘(1) Eligibility criteria, enrollment, and reten-
tion data (including data with respect to continuity 
of coverage or duration of benefits). 
‘‘(2) Data regarding the extent to which the 
State uses process measures with respect to deter-
mining the eligibility of children under the State 
child health plan, including measures such as 12- 
month continuous eligibility, self-declaration of in-
come for applications or renewals, or presumptive 
eligibility. 
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221 
‘‘(3) Data regarding denials of eligibility and 
redeterminations of eligibility. 
‘‘(4) Data regarding access to primary and spe-
cialty services, access to networks of care, and care 
coordination provided under the State child health 
plan, using quality care and consumer satisfaction 
measures included in the Consumer Assessment of 
Healthcare Providers and Systems (CAHPS) survey. 
‘‘(5) If the State provides child health assist-
ance in the form of premium assistance for the pur-
chase of coverage under a group health plan, data 
regarding the provision of such assistance, including 
the extent to which employer-sponsored health insur-
ance coverage is available for children eligible for 
child health assistance under the State child health 
plan, the range of the monthly amount of such as-
sistance provided on behalf of a child or family, the 
number of children or families provided such assist-
ance on a monthly basis, the income of the children 
or families provided such assistance, the benefits 
and cost-sharing protection provided under the State 
child health plan to supplement the coverage pur-
chased with such premium assistance, the effective 
strategies the State engages in to reduce any admin-
istrative barriers to the provision of such assistance, 
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222 
and, the effects, if any, of the provision of such as-
sistance on preventing the coverage provided under 
the State child health plan from substituting for cov-
erage provided under employer-sponsored health in-
surance offered in the State. 
‘‘(6) To the extent applicable, a description of 
any State activities that are designed to reduce the 
number of uncovered children in the State, including 
through a State health insurance connector program 
or support for innovative private health coverage ini-
tiatives.’’. 
(b) STANDARDIZED REPORTING FORMAT.— 
(1) IN GENERAL.—Not later than 1 year after 
the date of enactment of this Act, the Secretary 
shall specify a standardized format for States to use 
for reporting the information required under section 
2108(e) of the Social Security Act, as added by sub-
section (a)(2). 
(2) TRANSITION
PERIOD
FOR
STATES.—Each 
State that is required to submit a report under sub-
section (a) of section 2108 of the Social Security Act 
that includes the information required under sub-
section (e) of such section may use up to 3 reporting 
periods to transition to the reporting of such infor-
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223 
mation in accordance with the standardized format 
specified by the Secretary under paragraph (1). 
(c) ADDITIONAL FUNDING FOR THE SECRETARY TO 
IMPROVE TIMELINESS OF DATA REPORTING AND ANAL-
YSIS FOR PURPOSES OF DETERMINING ENROLLMENT IN-
CREASES UNDER MEDICAID AND CHIP.— 
(1) APPROPRIATION.—There is appropriated, 
out of any money in the Treasury not otherwise ap-
propriated, $5,000,000 to the Secretary for fiscal 
year 2008 for the purpose of improving the timeli-
ness of the data reported and analyzed from the 
Medicaid Statistical Information System (MSIS) for 
purposes of providing more timely data on enroll-
ment and eligibility of children under Medicaid and 
CHIP and to provide guidance to States with re-
spect to any new reporting requirements related to 
such improvements. Amounts appropriated under 
this paragraph shall remain available until expended. 
(2) REQUIREMENTS.—The improvements made 
by the Secretary under paragraph (1) shall be de-
signed and implemented (including with respect to 
any necessary guidance for States to report such in-
formation in a complete and expeditious manner) so 
that, beginning no later than October 1, 2008, data 
regarding the enrollment of low-income children (as 
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224 
defined in section 2110(c)(4) of the Social Security 
Act (42 U.S.C. 1397jj(c)(4)) of a State enrolled in 
the State plan under Medicaid or the State child 
health plan under CHIP with respect to a fiscal year 
shall be collected and analyzed by the Secretary 
within 6 months of submission. 
(d) GAO STUDY AND REPORT ON ACCESS TO PRI-
MARY AND SPECIALITY SERVICES.— 
(1) IN GENERAL.—The Comptroller General of 
the United States shall conduct a study of children’s 
access to primary and specialty services under Med-
icaid and CHIP, including— 
(A) the extent to which providers are will-
ing to treat children eligible for such programs; 
(B) information on such children’s access 
to networks of care; 
(C) geographic availability of primary and 
specialty services under such programs; 
(D) the extent to which care coordination 
is provided for children’s care under Medicaid 
and CHIP; and 
(E) as appropriate, information on the de-
gree of availability of services for children under 
such programs. 
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225 
(2) REPORT.—Not later than 2 years after the 
date of enactment of this Act, the Comptroller Gen-
eral shall submit a report to the Committee on Fi-
nance of the Senate and the Committee on Energy 
and Commerce of the House of Representatives on 
the study conducted under paragraph (1) that in-
cludes recommendations for such Federal and State 
legislative and administrative changes as the Comp-
troller General determines are necessary to address 
any barriers to access to children’s care under Med-
icaid and CHIP that may exist. 
SEC. 403. APPLICATION OF CERTAIN MANAGED CARE 
QUALITY SAFEGUARDS TO CHIP. 
(a) IN GENERAL.—Section 2103(f) of Social Security 
Act (42 U.S.C. 1397bb(f)) is amended by adding at the 
end the following new paragraph: 
‘‘(3) COMPLIANCE WITH MANAGED CARE RE-
QUIREMENTS.—The State child health plan shall 
provide for the application of subsections (a)(4), 
(a)(5), (b), (c), (d), and (e) of section 1932 (relating 
to requirements for managed care) to coverage, 
State agencies, enrollment brokers, managed care 
entities, and managed care organizations under this 
title in the same manner as such subsections apply 
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226 
to coverage and such entities and organizations 
under title XIX.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to contract years for health 
plans beginning on or after July 1, 2008. 
TITLE V—IMPROVING ACCESS 
TO BENEFITS 
SEC. 501. DENTAL BENEFITS. 
(a) COVERAGE.— 
(1) IN
GENERAL.—Section 2103 (42 U.S.C. 
1397cc) is amended— 
(A) in subsection (a)— 
(i) in the matter before paragraph 
(1), by striking ‘‘subsection (c)(5)’’ and in-
serting ‘‘paragraphs (5) and (7) of sub-
section (c)’’; and 
(ii) in paragraph (1), by inserting ‘‘at 
least’’ after ‘‘that is’’; and 
(B) in subsection (c)— 
(i) by redesignating paragraph (5) as 
paragraph (7); and 
(ii) by inserting after paragraph (4), 
the following: 
‘‘(5) DENTAL BENEFITS.— 
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‘‘(A) IN GENERAL.—The child health as-
sistance provided to a targeted low-income child 
shall include coverage of dental services nec-
essary to prevent disease and promote oral 
health, restore oral structures to health and 
function, and treat emergency conditions. 
‘‘(B) 
PERMITTING
USE
OF
DENTAL 
BENCHMARK
PLANS
BY
CERTAIN
STATES.—A 
State may elect to meet the requirement of sub-
paragraph (A) through dental coverage that is 
equivalent to a benchmark dental benefit pack-
age described in subparagraph (C). 
‘‘(C) BENCHMARK DENTAL BENEFIT PACK-
AGES.—The benchmark dental benefit packages 
are as follows: 
‘‘(i) FEHBP CHILDREN’S
DENTAL 
COVERAGE.—A dental benefits plan under 
chapter 89A of title 5, United States Code, 
that has been selected most frequently by 
employees seeking dependent coverage, 
among such plans that provide such de-
pendent coverage, in either of the previous 
2 plan years. 
‘‘(ii) STATE
EMPLOYEE
DEPENDENT 
DENTAL
COVERAGE.—A dental benefits 
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228 
plan that is offered and generally available 
to State employees in the State involved 
and that has been selected most frequently 
by employees seeking dependent coverage, 
among such plans that provide such de-
pendent coverage, in either of the previous 
2 plan years. 
‘‘(iii) COVERAGE OFFERED THROUGH 
COMMERCIAL
DENTAL
PLAN.—A dental 
benefits plan that has the largest insured 
commercial, non-medicaid enrollment of 
dependent covered lives of such plans that 
is offered in the State involved.’’. 
(2) ASSURING
ACCESS
TO
CARE.—Section 
2102(a)(7)(B) (42 U.S.C. 1397bb(c)(2)) is amended 
by inserting ‘‘and services described in section 
2103(c)(5)’’ after ‘‘emergency services’’. 
(3) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall apply to coverage of items 
and services furnished on or after October 1, 2008. 
(b) 
DENTAL
EDUCATION
FOR
PARENTS
OF 
NEWBORNS.—The Secretary shall develop and implement, 
through entities that fund or provide perinatal care serv-
ices to targeted low-income children under a State child 
health plan under title XXI of the Social Security Act, 
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229 
a program to deliver oral health educational materials that 
inform new parents about risks for, and prevention of, 
early childhood caries and the need for a dental visit with-
in their newborn’s first year of life. 
(c) PROVISION
OF DENTAL SERVICES THROUGH 
FQHCS.— 
(1) MEDICAID.—Section 1902(a) (42 U.S.C. 
1396a(a)) is amended— 
(A) by striking ‘‘and’’ at the end of para-
graph (69); 
(B) by striking the period at the end of 
paragraph (70) and inserting ‘‘; and’’; and 
(C) by inserting after paragraph (70) the 
following new paragraph: 
‘‘(71) provide that the State will not prevent a 
Federally-qualified health center from entering into 
contractual relationships with private practice dental 
providers in the provision of Federally-qualified 
health center services.’’. 
(2) CHIP.—Section 2107(e)(1) (42 U.S.C. 
1397g(e)(1)), as amended by subsections (a)(2) and 
(d)(2) of section 203, is amended by inserting after 
subparagraph (B) the following new subparagraph 
(and redesignating the succeeding subparagraphs ac-
cordingly): 
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230 
‘‘(C) Section 1902(a)(71) (relating to lim-
iting FQHC contracting for provision of dental 
services).’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect on January 1, 
2008. 
(d) 
REPORTING
INFORMATION
ON
DENTAL 
HEALTH.— 
(1) 
MEDICAID.—Section 
1902(a)(43)(D)(iii) 
(42 U.S.C. 1396a(a)(43)(D)(iii)) is amended by in-
serting ‘‘and other information relating to the provi-
sion of dental services to such children described in 
section 2108(e)’’ after ‘‘receiving dental services,’’. 
(2) CHIP.—Section 2108 (42 U.S.C. 1397hh) 
is amended by adding at the end the following new 
subsection: 
‘‘(e) INFORMATION ON DENTAL CARE FOR CHIL-
DREN.— 
‘‘(1) IN GENERAL.—Each annual report under 
subsection (a) shall include the following information 
with respect to care and services described in section 
1905(r)(3) provided to targeted low-income children 
enrolled in the State child health plan under this 
title at any time during the year involved: 
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231 
‘‘(A) The number of enrolled children by 
age grouping used for reporting purposes under 
section 1902(a)(43). 
‘‘(B) For children within each such age 
grouping, information of the type contained in 
questions 12(a)–(c) of CMS Form 416 (that 
consists of the number of enrolled targeted low 
income children who receive any, preventive, or 
restorative dental care under the State plan). 
‘‘(C) For the age grouping that includes 
children 8 years of age, the number of such 
children who have received a protective sealant 
on at least one permanent molar tooth. 
‘‘(2) INCLUSION OF INFORMATION ON ENROLL-
EES IN MANAGED CARE PLANS.—The information 
under paragraph (1) shall include information on 
children who are enrolled in managed care plans and 
other private health plans and contracts with such 
plans under this title shall provide for the reporting 
of such information by such plans to the State.’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall be effective for annual re-
ports submitted for years beginning after date of en-
actment. 
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(e) IMPROVED ACCESSIBILITY OF DENTAL PROVIDER 
INFORMATION TO ENROLLEES UNDER MEDICAID AND 
CHIP.—The Secretary shall— 
(1) work with States, pediatric dentists, and 
other dental providers (including providers that are, 
or are affiliated with, a school of dentistry) to in-
clude, not later than 6 months after the date of the 
enactment of this Act, on the Insure Kids Now 
website (http://www.insurekidsnow.gov/) and hotline 
(1–877–KIDS–NOW) (or on any successor websites 
or hotlines) a current and accurate list of all such 
dentists and providers within each State that provide 
dental services to children enrolled in the State plan 
(or waiver) under Medicaid or the State child health 
plan (or waiver) under CHIP, and shall ensure that 
such list is updated at least quarterly; and 
(2) work with States to include, not later than 
6 months after the date of the enactment of this 
Act, a description of the dental services provided 
under each State plan (or waiver) under Medicaid 
and each State child health plan (or waiver) under 
CHIP on such Insure Kids Now website, and shall 
ensure that such list is updated at least annually. 
(f) INCLUSION OF STATUS OF EFFORTS TO IMPROVE 
DENTAL CARE IN REPORTS ON THE QUALITY OF CHIL-
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233 
DREN’S HEALTH CARE UNDER MEDICAID AND CHIP.— 
Section 1139A(a), as added by section 401(a), is amend-
ed— 
(1) in paragraph (3)(B)(ii), by inserting ‘‘and, 
with respect to dental care, conditions requiring the 
restoration of teeth, relief of pain and infection, and 
maintenance of dental health’’ after ‘‘chronic condi-
tions’’; and 
(2) in paragraph (6)(A)(ii), by inserting ‘‘dental 
care,’’ after ‘‘preventive health services,’’. 
(g) GAO STUDY AND REPORT.— 
(1) STUDY.—The Comptroller General of the 
United States shall provide for a study that exam-
ines— 
(A) access to dental services by children in 
underserved areas; 
(B) children’s access to oral health care, 
including preventive and restorative services, 
under Medicaid and CHIP, including— 
(i) the extent to which dental pro-
viders are willing to treat children eligible 
for such programs; 
(ii) information on such children’s ac-
cess to networks of care, including such 
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234 
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: 
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‘‘(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 abuse benefits, such plan shall ensure 
that the financial requirements and treatment 
limitations applicable to such mental health or 
substance abuse benefits are no more restrictive 
than the financial requirements and treatment 
limitations applied to substantially all medical 
and surgical benefits covered by the 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— 
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(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, 2008. 
(b) TRANSITION GRANTS.— 
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(1) APPROPRIATION.—Out of any funds in the 
Treasury not otherwise appropriated, there is appro-
priated to the Secretary for fiscal year 2008, 
$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, 
2010, 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. 
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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-
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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 January 1, 2009. 
SEC. 505. DEMONSTRATION PROJECTS RELATING TO DIA-
BETES PREVENTION. 
There is authorized to be appropriated $15,000,000 
during the period of fiscal years 2008 through 2012 to 
fund demonstration projects in up to 10 States over 3 
years for voluntary incentive programs to promote chil-
dren’s receipt of relevant screenings and improvements in 
healthy eating and physical activity with the aim of reduc-
ing the incidence of type 2 diabetes. Such programs may 
involve reductions in cost-sharing or premiums when chil-
dren receive regular screening and reach certain bench-
marks in healthy eating and physical activity. Under such 
programs, a State may also provide financial bonuses for 
partnerships with entities, such as schools, which increase 
their education and efforts with respect to reducing the 
incidence of type 2 diabetes and may also devise incentives 
for providers serving children covered under this title and 
title XIX to perform relevant screening and counseling re-
garding healthy eating and physical activity. Upon comple-
tion of these demonstrations, the Secretary shall provide 
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240 
a report to Congress on the results of the State dem-
onstration projects and the degree to which they helped 
improve health outcomes related to type 2 diabetes in chil-
dren in those States. 
SEC. 506. 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.’’. 
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.— 
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241 
(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: 
‘‘(12) 
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 
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 
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242 
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 final rule implementing such require-
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 final 
rule in effect for all States may only be inclusive of errors, 
as defined in such final rule or in guidance issued within 
a reasonable time frame after the effective date for such 
final rule that includes detailed guidance for the specific 
methodology for error determinations. 
(c) REQUIREMENTS FOR FINAL RULE.—For pur-
poses of subsection (b), the requirements of this sub-
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243 
section are that the 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 
(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 
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244 
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 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 may elect to ac-
cept 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 deter-
mined on the basis of such data and, instead, shall be 
treated as if fiscal year 2010 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. 
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245 
(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 final rule implementing such requirements 
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, 
as in effect on September 1, 2007, relating to Med-
icaid eligibility reviews, a State may elect to sub-
stitute data obtained through MEQC reviews con-
ducted in accordance with section 1903(u) of the So-
cial Security Act (42 U.S.C. 1396b(u)) for data re-
quired for purposes of PERM requirements, but only 
if the State MEQC reviews are based on a broad, 
representative sample of Medicaid applicants or en-
rollees in the States. 
(f) IDENTIFICATION OF IMPROVED STATE-SPECIFIC 
SAMPLE SIZES.—The Secretary shall establish State-spe-
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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 2008’’. 
(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 
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247 
data collection occurring for fiscal years beginning 
with fiscal year 2008, 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(i)(5)(B) and any other data necessary for 
carrying out this title. 
‘‘(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). 
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248 
‘‘(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 
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 
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249 
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.— 
‘‘(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 
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250 
same manner as such provisions apply to the 
evaluation conducted under paragraph (1). 
‘‘(C) SUBMISSION
TO
CONGRESS.—Not 
later than December 31, 2010, 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 2009 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 2011.’’. 
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 
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251 
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; DIS-
ALLOWANCE FOR UNAUTHORIZED EXPENDI-
TURES. 
Nothing in this Act allows Federal payment for indi-
viduals who are not legal residents. Titles XI, XIX, and 
XXI of the Social Security Act provide for the disallow-
ance of Federal financial participation for erroneous ex-
penditures under Medicaid and under CHIP, respectively. 
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)— 
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(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’’; 
(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 
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253 
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 
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-
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254 
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 Def-
icit 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’’. 
(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 
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255 
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. 
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. COUNTY MEDICAID HEALTH INSURING ORGANI-
ZATIONS; GAO REPORT ON MEDICAID MAN-
AGED CARE PAYMENT RATES. 
(a) IN GENERAL.—Section 9517(c)(3) of the Consoli-
dated Omnibus Budget Reconciliation Act of 1985 (42 
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256 
U.S.C. 1396b note), as added by section 4734 of the Om-
nibus Budget Reconciliation Act of 1990 and as amended 
by section 704 of the Medicare, Medicaid, and SCHIP 
Benefits Improvement and Protection Act of 2000, is 
amended— 
(1) in subparagraph (A), by inserting ‘‘, in the 
case of any health insuring organization described in 
such subparagraph that is operated by a public enti-
ty established by Ventura County, and in the case 
of any health insuring organization described in such 
subparagraph that is operated by a public entity es-
tablished by Merced County’’ after ‘‘described in 
subparagraph (B)’’; and 
(2) in subparagraph (C), by striking ‘‘14 per-
cent’’ and inserting ‘‘16 percent’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall take effect on the date of the enact-
ment of this Act. 
(c) GAO REPORT ON ACTUARIAL SOUNDNESS OF 
MEDICAID MANAGED CARE PAYMENT RATES.—Not later 
than 18 months after the date of the enactment of this 
Act, the Comptroller General of the United States shall 
submit a report to the Committee on Finance of the Sen-
ate and the Committee on Energy and Commerce of the 
House of Representatives analyzing the extent to which 
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257 
State payment rates for medicaid managed care organiza-
tions under title XIX of the Social Security Act are actu-
arially sound. 
SEC. 615. 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 
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-
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258 
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. 
(d) REPORT.—Not later than May 15, 2008, the Sec-
retary shall submit to the Congress a report on the prob-
lems presented by the current treatment of pension and 
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259 
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. 616. MORATORIUM ON CERTAIN PAYMENT RESTRIC-
TIONS. 
Notwithstanding any other provision of law, the Sec-
retary of Health and Human Services shall not, prior to 
January 1, 2010, take any action (through promulgation 
of regulation, issuance of regulatory guidance, use of fed-
eral payment audit procedures, or other administrative ac-
tion, policy, or practice, including a Medical Assistance 
Manual transmittal or letter to State Medicaid directors) 
to restrict coverage or payment under title XIX of the So-
cial Security Act for rehabilitation services, or school- 
based administration, transportation, or medical services 
if such restrictions are more restrictive in any aspect than 
those applied to such coverage or payment as of July 1, 
2007. 
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260 
SEC. 617. MEDICAID DSH ALLOTMENTS FOR TENNESSEE 
AND HAWAII. 
(a) TENNESSEE.—The DSH allotments for Ten-
nessee for each fiscal year beginning with fiscal year 2008 
under subsection (f)(3) of section 1923 of the Social Secu-
rity Act (42 U.S.C. 1396r–4) are deemed to be 
$30,000,000. The Secretary of Health and Human Serv-
ices may impose a limitation on the total amount of pay-
ments made to hospitals under the TennCare Section 
1115 waiver only to the extent that such limitation is nec-
essary to ensure that a hospital does not receive payment 
in excess of the amounts described in subsection (f) of 
such section or as necessary to ensure that the waiver re-
mains budget neutral. 
(b) HAWAII.—Section 1923(f)(6) (42 U.S.C. 1396r– 
4(f)(6)) is amended— 
(1) in the paragraph heading, by striking ‘‘FOR 
FISCAL YEAR 2007’’; and 
(2) in subparagraph (B)— 
(A) in clause (i), by striking ‘‘Only with re-
spect to fiscal year 2007’’ and inserting ‘‘With 
respect to each of fiscal years 2007 and 2008’’; 
(B) by redesignating clause (ii) as clause 
(iv); and 
(C) by inserting after clause (i), the fol-
lowing new clauses: 
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261 
‘‘(ii) TREATMENT
AS
A
LOW-DSH 
STATE.—With respect to fiscal year 2009 
and each fiscal year thereafter, notwith-
standing the table set forth in paragraph 
(2), the DSH allotment for Hawaii shall be 
increased in the same manner as allot-
ments for low DSH States are increased 
for such fiscal year under clauses (ii) and 
(iii) of paragraph (5)(B). 
‘‘(iii) 
CERTAIN
HOSPITAL
PAY-
MENTS.—The Secretary may not impose a 
limitation on the total amount of payments 
made to hospitals under the QUEST sec-
tion 1115 Demonstration Project except to 
the extent that such limitation is necessary 
to ensure that a hospital does not receive 
payments in excess of the amounts de-
scribed in subsection (g), or as necessary 
to ensure that such payments under the 
waiver and such payments pursuant to the 
allotment provided in this section do not, 
in the aggregate in any year, exceed the 
amount that the Secretary determines is 
equal to the Federal medical assistance 
percentage component attributable to dis-
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262 
proportionate share hospital payment ad-
justments for such year that is reflected in 
the budget neutrality provision of the 
QUEST Demonstration Project.’’. 
SEC. 618. 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. 
(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; 
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263 
(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. 619. EXTENSION OF SSI WEB-BASED ASSET DEM-
ONSTRATION PROJECT TO THE MEDICAID 
PROGRAM. 
(a) IN GENERAL.—Beginning on October 1, 2012, 
the Secretary of Health and Human Services shall provide 
for the application to asset eligibility determinations under 
the Medicaid program under title XIX of the Social Secu-
rity Act of the automated, secure, web-based asset 
verification request and response process being applied for 
determining eligibility for benefits under the Supplemental 
Security Income (SSI) program under title XVI of such 
Act under a demonstration project conducted under the 
authority of section 1631(e)(1)(B)(ii) of such Act (42 
U.S.C. 1383(e)(1)(B)(ii)). 
(b) LIMITATION.—Such application shall only extend 
to those States in which such demonstration project is op-
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270 
‘‘(B) BOTH LIMITATIONS APPLICABLE.—If 
the leave taken by the husband and wife in-
cludes leave described in paragraph (1), the 
limitation in paragraph (1) shall apply to the 
leave described in paragraph (1).’’. 
(E) CERTIFICATION.—Section 103 of such 
Act (29 U.S.C. 2613) is amended by adding at 
the end the following: 
‘‘(f) CERTIFICATION FOR SERVICEMEMBER FAMILY 
LEAVE.—An employer may require that a request for 
leave under section 102(a)(3) be supported by a certifi-
cation issued at such time and in such manner as the Sec-
retary may by regulation prescribe.’’. 
(F) FAILURE TO RETURN.—Section 104(c) 
of such Act (29 U.S.C. 2614(c)) is amended— 
(i) in paragraph (2)(B)(i), by insert-
ing ‘‘or under section 102(a)(3)’’ before 
the semicolon; and 
(ii) in paragraph (3)(A)— 
(I) in clause (i), by striking ‘‘or’’ 
at the end; 
(II) in clause (ii), by striking the 
period and inserting ‘‘; or’’; and 
(III) by adding at the end the 
following: 
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