1021 
tions) and the Privacy Act of 1974 shall apply with respect 
to the provisions of this subtitle and amendments made 
by this subtitle. 
SEC. 1654. DISCLOSURE OF MEDICARE FRAUD AND ABUSE 
HOTLINE NUMBER ON EXPLANATION OF BEN-
EFITS. 
(a) IN GENERAL.—Section 1804 of the Social Secu-
rity Act (42 U.S.C. 1395b–2) is amended by adding at 
the end the following new subsection: 
‘‘(d) Any statement or notice containing an expla-
nation of the benefits available under this title, including 
the notice required by subsection (a), distributed for peri-
ods after July 1, 2011, shall prominently display in a man-
ner prescribed by the Secretary a separate toll-free tele-
phone number maintained by the Secretary for the receipt 
of complaints and information about waste, fraud, and 
abuse in the provision or billing of services under this 
title.’’. 
(b) CONFORMING AMENDMENTS.—Section 1804(c) 
of the Social Security Act (42 U.S.C. 1395b–2(c)) is 
amended— 
(1) in paragraph (2), by adding ‘‘and’’ at the 
end; 
(2) in paragraph (3), by striking ‘‘; and’’ and 
inserting a period; and
1022 
(3) by striking paragraph (4). 
TITLE VII—MEDICAID AND CHIP 
Subtitle A—Medicaid and Health 
Reform 
SEC. 1701. ELIGIBILITY FOR INDIVIDUALS WITH INCOME 
BELOW 150 PERCENT OF THE FEDERAL POV-
ERTY LEVEL. 
(a) ELIGIBILITY
FOR NON-TRADITIONAL INDIVID-
UALS WITH INCOME BELOW 150 PERCENT OF THE FED-
ERAL POVERTY LEVEL.— 
(1) FULL MEDICAID BENEFITS FOR NON-MEDI-
CARE
ELIGIBLE
INDIVIDUALS.—Section 
1902(a)(10)(A)(i) of the Social Security Act (42 
U.S.C. 1396b(a)(10)(A)(i)) is amended— 
(A) by striking ‘‘or’’ at the end of sub-
clause (VI); 
(B) by adding ‘‘or’’ at the end of subclause 
(VII); and 
(C) by adding at the end the following new 
subclause: 
‘‘(VIII) who are under 65 years 
of age, who are not described in a pre-
vious subclause of this clause, who are 
not entitled to hospital insurance ben-
efits under part A of title XVIII, and
1023 
whose 
family 
income 
(determined 
using methodologies and procedures 
specified by the Secretary in consulta-
tion with the Health Choices Commis-
sioner) does not exceed 150 percent of 
the income official poverty line (as de-
fined by the Office of Management 
and Budget, and revised annually in 
accordance with section 673(2) of the 
Omnibus Budget Reconciliation Act of 
1981) applicable to a family of the 
size involved;’’. 
(2) MEDICARE COST SHARING ASSISTANCE FOR 
MEDICARE-ELIGIBLE
INDIVIDUALS.—Section 
1902(a)(10)(E) 
of 
such 
Act 
(42 
U.S.C. 
1396b(a)(10)(E)) is amended— 
(A) in clause (iii), by striking ‘‘and’’ at the 
end; 
(B) in clause (iv), by adding ‘‘and’’ at the 
end; and 
(C) by adding at the end the following new 
clause: 
‘‘(v) for making medical assistance avail-
able for medicare cost-sharing described in sub-
paragraphs (B) and (C) of section 1905(p)(3),
1024 
for individuals under 65 years of age 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) but is less 
than 150 percent of the official poverty line (re-
ferred to in such section) for a family of the 
size involved; and’’. 
(3) INCREASED
FMAP
FOR
NON-TRADITIONAL 
FULL
MEDICAID
ELIGIBLE
INDIVIDUALS.—Section 
1905 of such Act (42 U.S.C. 1396d) is amended— 
(A) in the first sentence of subsection (b), 
by striking ‘‘and’’ before ‘‘(4)’’ and by inserting 
before the period at the end the following: ‘‘, 
and (5) 100 percent (for periods before 2015 
and 91 percent for periods beginning with 
2015) with respect to amounts described in 
subsection (y)’’; and 
(B) by adding at the end the following new 
subsection: 
‘‘(y) ADDITIONAL EXPENDITURES SUBJECT TO IN-
CREASED FMAP.—For purposes of section 1905(b)(5), 
the amounts described in this subsection are the following:
1025 
‘‘(1) Amounts expended for medical assistance 
for individuals described in subclause (VIII) of sec-
tion 1902(a)(10)(A)(i).’’. 
(4) CONSTRUCTION.—Nothing in this sub-
section shall be construed as not providing for cov-
erage under subparagraph (A)(i)(VIII) or (E)(v) of 
section 1902(a)(10) of the Social Security Act, as 
added by paragraphs (1) and (2), or an increased 
FMAP under the amendments made by paragraph 
(3), for an individual who has been provided medical 
assistance under title XIX of the Act under a dem-
onstration waiver approved under section 1115 of 
such Act or with State funds. 
(5) CONFORMING AMENDMENTS.— 
(A) Section 1903(f)(4) of the Social Secu-
rity Act (42 U.S.C. 1396b(f)(4)) is amended— 
(i) 
by 
inserting 
‘‘1902(a)(10)(A)(i)(VIII),’’ 
after 
‘‘1902(a)(10)(A)(i)(VII),’’; and 
(ii) by inserting ‘‘1902(a)(10)(E)(v),’’ 
before ‘‘1905(p)(1)’’. 
(B) Section 1905(a) of such Act (42 
U.S.C. 1396d(a)), as amended by sections 
1714(a)(4) and 1731(c), is further amended, in 
the matter preceding paragraph (1)—
1026 
(i) by striking ‘‘or’’ at the end of 
clause (xiv); 
(ii) by adding ‘‘or’’ at the end of 
clause (xv); and 
(iii) by inserting after clause (xv) the 
following: 
‘‘(xvi) individuals described in section 
1902(a)(10)(A)(i)(VIII),’’. 
(b) ELIGIBILITY FOR TRADITIONAL MEDICAID ELI-
GIBLE INDIVIDUALS WITH INCOME NOT EXCEEDING 150 
PERCENT OF THE FEDERAL POVERTY LEVEL .— 
(1) IN GENERAL.—Section 1902(a)(10)(A)(i) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1396b(a)(10)(A)(i)), as amended by subsection (a), 
is amended— 
(A) by striking ‘‘or’’ at the end of sub-
clause (VII); and 
(B) by adding at the end the following new 
subclauses: 
‘‘(IX) who are over 18, and 
under 65 years of age, who would be 
eligible for medical assistance under 
the State plan under subclause (I) or 
section 1931 (based on the income 
standards, methodologies, and proce-
1027 
dures in effect as of June 16, 2009) 
but for income, who are in families 
whose income does not exceed 150 
percent of the income official poverty 
line (as defined by the Office of Man-
agement and Budget, and revised an-
nually in accordance with section 
673(2) of the Omnibus Budget Rec-
onciliation Act of 1981) applicable to 
a family of the size involved; or 
‘‘(X) beginning with 2014, who 
are under 19, years of age, who would 
be eligible for medical assistance 
under the State plan under subclause 
(I), (IV) (insofar as it relates to sub-
section (l)(1)(B)), (VI), or (VII) 
(based on the income standards, 
methodologies, and procedures in ef-
fect as of June 16, 2009) but for in-
come, who are in families whose in-
come does not exceed 150 percent of 
the income official poverty line (as de-
fined by the Office of Management 
and Budget, and revised annually in 
accordance with section 673(2) of the
1028 
Omnibus Budget Reconciliation Act of 
1981) applicable to a family of the 
size involved; or 
‘‘(XI) beginning with 2014, who 
are under 19 years of age, who are 
not described in subclause (X), and 
who would be eligible for child health 
assistance under a State child health 
plan insofar as such plan provides 
benefits under this title (as described 
in section 2101(a)(2)) based on such 
plan as in effect as of June 16, 2009; 
or’’. 
(2) INCREASED
FMAP
FOR
CERTAIN
TRADI-
TIONAL MEDICAID ELIGIBLE INDIVIDUALS.— 
(A) INCREASED FMAP FOR ADULTS.—Sec-
tion 1905(y) of such Act (42 U.S.C. 1396d(y)), 
as added by subsection (a)(2)(B), is amended 
by inserting ‘‘or (IX)’’ after ‘‘(VIII)’’. 
(B) ENHANCED FMAP FOR CHILDREN.— 
Section 1905(b)(4) of such Act is amended by 
inserting 
‘‘1902(a)(10)(A)(i)(X), 
1902(a)(10)(A)(i)(XI), or’’ after ‘‘on the basis 
of section’’.
1029 
(3) CONSTRUCTION.—Nothing in this sub-
section shall be construed as not providing for cov-
erage under subclause (IX), (X), or (XI) of section 
1902(a)(10)(A)(i) of the Social Security Act, as 
added by paragraph (1), or an increased or en-
hanced FMAP under the amendments made by 
paragraph (2), for an individual who has been pro-
vided medical assistance under title XIX of the Act 
under a demonstration waiver approved under sec-
tion 1115 of such Act or with State funds. 
(4) 
CONFORMING
AMENDMENT.—Section 
1903(f)(4) of the Social Security Act (42 U.S.C. 
1396b(f)(4)), as amended by subsection (a)(4), is 
amended 
by 
inserting 
‘‘1902(a)(10)(A)(i)(IX), 
1902(a)(10)(A)(i)(X), 1902(a)(10)(A)(i)(XI),’’ after 
‘‘1902(a)(10)(A)(i)(VIII),’’. 
(c) INCREASED MATCHING RATE FOR TEMPORARY 
COVERAGE OF CERTAIN NEWBORNS.—Section 1905(y) of 
such Act, as added by subsection (a)(3)(B), is amended 
by adding at the end the following: 
‘‘(2) Amounts expended for medical assistance 
for children described in section 305(d)(1) of the Af-
fordable Health Care for America Act during the 
time period specified in such section.’’.
1030 
(d) NETWORK ADEQUACY.—Section 1932(a)(2) of 
the Social Security Act (42 U.S.C. 1396u–2(a)(2)) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(D) ENROLLMENT OF NON-TRADITIONAL 
MEDICAID
ELIGIBLES.—A State may not re-
quire under paragraph (1) the enrollment in a 
managed care entity of an individual described 
in section 1902(a)(10)(A)(i)(VIII) unless the 
State demonstrates, to the satisfaction of the 
Secretary, that the entity, through its provider 
network and other arrangements, has the ca-
pacity to meet the health, mental health, and 
substance abuse needs of such individuals.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the first day of Y1, and 
shall apply with respect to items and services furnished 
on or after such date. 
SEC. 1702. REQUIREMENTS AND SPECIAL RULES FOR CER-
TAIN MEDICAID ELIGIBLE INDIVIDUALS. 
(a) IN GENERAL.—Title XIX of the Social Security 
Act is amended by adding at the end the following new 
section:
1031 
‘‘REQUIREMENTS AND SPECIAL RULES FOR CERTAIN 
MEDICAID ELIGIBLE INDIVIDUALS 
‘‘SEC. 1943. (a) COORDINATION WITH NHI EX-
CHANGE
THROUGH
MEMORANDUM
OF
UNDER-
STANDING.— 
‘‘(1) IN GENERAL.—The State shall enter into 
a Medicaid memorandum of understanding described 
in section 305(e)(2) of the Affordable Health Care 
for America Act with the Health Choices Commis-
sioner, acting in consultation with the Secretary, 
with respect to coordinating the implementation of 
the provisions of division A of such Act with the 
State plan under this title in order to ensure the en-
rollment of Medicaid eligible individuals in accept-
able coverage. Nothing in this section shall be con-
strued as permitting such memorandum to modify or 
vitiate any requirement of a State plan under this 
title. 
‘‘(2) ENROLLMENT
OF
EXCHANGE-REFERRED 
INDIVIDUALS.— 
‘‘(A) NON-TRADITIONAL
INDIVIDUALS.— 
Pursuant to such memorandum the State shall 
accept without further determination the enroll-
ment under this title of an individual deter-
mined by the Commissioner to be a non-tradi-
1032 
tional Medicaid eligible individual. The State 
shall not do any redeterminations of eligibility 
for such individuals unless the periodicity of 
such redeterminations is consistent with the pe-
riodicity for redeterminations by the Commis-
sioner of eligibility for affordability credits 
under subtitle C of title II of division A of the 
Affordable Health Care for America Act, as 
specified under such memorandum. 
‘‘(B) TRADITIONAL INDIVIDUALS.—Pursu-
ant to such memorandum, the State shall ac-
cept without further determination the enroll-
ment under this title of an individual deter-
mined by the Commissioner to be a traditional 
Medicaid eligible individual. The State may do 
redeterminations of eligibility of such individual 
consistent with such section and the memo-
randum. 
‘‘(3) DETERMINATIONS
OF
ELIGIBILITY
FOR 
AFFORDABILITY CREDITS.—If the Commissioner de-
termines that a State Medicaid agency has the ca-
pacity to make determinations of eligibility for af-
fordability credits under subtitle C of title II of divi-
sion A of the Affordable Health Care for America 
Act, under such memorandum—
1033 
‘‘(A) the State Medicaid agency shall con-
duct such determinations for any Exchange-eli-
gible individual who requests such a determina-
tion; 
‘‘(B) in the case that a State Medicaid 
agency determines that an Exchange-eligible in-
dividual is not eligible for affordability credits, 
the agency shall forward the information on the 
basis of which such determination was made to 
the Commissioner; and 
‘‘(C) the Commissioner shall reimburse the 
State Medicaid agency for the costs of con-
ducting such determinations. 
‘‘(4) REFERRALS UNDER MEMORANDUM.—Pur-
suant to such memorandum, if an individual applies 
to the State for assistance in obtaining health cov-
erage and the State determines that the individual 
is not eligible for medical assistance under this title 
and is not authorized under such memorandum to 
make an determination with respect to eligibility for 
coverage and affordability credits through the 
Health Insurance Exchange, the State shall refer 
the individual to the Commissioner for a determina-
tion of such eligibility and, with the individual’s au-
thorization, provide to the Commissioner information
1034 
obtained by the State as part of the application 
process. 
‘‘(5) ADDITIONAL TERMS.—Such memorandum 
shall include such additional provisions as are nec-
essary to implement efficiently the provisions of this 
section and title II of division A of the Affordable 
Health Care for America Act. 
‘‘(b) TREATMENT OF CERTAIN NEWBORNS.— 
‘‘(1) IN GENERAL.—In the case of a child who 
is deemed under section 305(d) of the Affordable 
Health Care for America Act to be a Medicaid eligi-
ble individual and enrolled under this title pursuant 
to such section, the State shall provide for a deter-
mination, by not later than the end of the period re-
ferred to in paragraph (2) of such section, of the 
child’s eligibility for medical assistance under this 
title. 
‘‘(2) EXTENDED TREATMENT AS TRADITIONAL 
MEDICAID
ELIGIBLE
INDIVIDUAL.—In accordance 
with paragraph (2) of section 305(d) of the Afford-
able Health Care for America Act, in the case of a 
child described in paragraph (1) of such section who 
at the end of the period referred to in such para-
graph is not otherwise covered under acceptable cov-
erage, the child shall be deemed (until such time as
1035 
the child obtains such coverage or the State other-
wise makes a determination of the child’s eligibility 
for medical assistance under its plan under this title 
pursuant to paragraph (1)) to be a Medicaid eligible 
individual described in section 1902(l)(1)(B). 
‘‘(c) DEFINITIONS.—In this section: 
‘‘(1) MEDICAID
ELIGIBLE
INDIVIDUAL.—The 
term ‘Medicaid eligible individual’ means an indi-
vidual who is eligible for medical assistance under 
Medicaid. 
‘‘(2) TRADITIONAL MEDICAID ELIGIBLE INDI-
VIDUAL.—The term ‘traditional Medicaid eligible in-
dividual’ means a Medicaid eligible individual other 
than an individual who is— 
‘‘(A) a Medicaid eligible individual by rea-
son of the application of subclause (VIII) of 
section 1902(a)(10)(A)(i) of the Social Security 
Act; or 
‘‘(B) a childless adult not described in sec-
tion 1902(a)(10)(A) or (C) of such Act (as in 
effect as of the day before the date of the en-
actment of this Act). 
‘‘(3) NON-TRADITIONAL
MEDICAID
ELIGIBLE 
INDIVIDUAL.—The term ‘non-traditional Medicaid 
eligible individual’ means a Medicaid eligible indi-
1036 
vidual who is not a traditional Medicaid eligible indi-
vidual. 
‘‘(4) MEMORANDUM.—The term ‘memorandum’ 
means a Medicaid memorandum of understanding 
under section 305(e)(2) of the Affordable Health 
Care for America Act. 
‘‘(5) Y1.—The term ‘Y1’ has the meaning given 
such term in section 100(c) of the Affordable Health 
Care for America Act.’’. 
(b) CONFORMING AMENDMENTS TO ERROR RATE.— 
(1) Section 1903(u)(1)(D) of the Social Secu-
rity Act (42 U.S.C. 1396b(u)(1)(D)) is amended by 
adding at the end the following new clause: 
‘‘(vi) In determining the amount of erroneous excess 
payments, there shall not be included any erroneous pay-
ments made that are attributable to an error in an eligi-
bility determination under subtitle C of title II of division 
A of the Affordable Health Care for America Act.’’. 
(2) Section 2105(c)(11) of such Act (42 U.S.C. 
1397ee(c)(11)) is amended by adding at the end the 
following new sentence: ‘‘Clause (vi) of section 
1903(u)(1)(D) shall apply with respect to the appli-
cation of such requirements under this title and title 
XIX.’’.
1038 
nation date specified in paragraph (3), a State shall 
not have in effect eligibility standards, methodolo-
gies, or procedures under its State child health plan 
under title XXI (including any waiver under such 
title or demonstration project under section 1115) 
that are more restrictive than the eligibility stand-
ards, methodologies, or procedures, respectively, 
under such plan (or waiver) as in effect on June 16, 
2009. 
‘‘(2) LIMITATION.—Paragraph (1) shall not be 
construed as preventing a State from imposing a 
limitation described in section 2110(b)(5)(C)(i)(II) 
for a fiscal year in order to limit expenditures under 
its State child health plan under title XXI to those 
for which Federal financial participation is available 
under section 2105 for the fiscal year. 
‘‘(3) CHIP MOE TERMINATION DATE.—In para-
graph (1), the ‘CHIP MOE termination date’ for a 
State is the date that is the last day of Y1 (as de-
fined in section 100(c) of the Affordable Health 
Care for America Act). 
‘‘(4) CHIP TRANSITION
REPORT.—Not later 
than December 31, 2011, the Secretary shall submit 
to Congress a report—
1039 
‘‘(A) that compares the benefits packages 
offered under an average State child health 
plan under title XXI in 2011 and to the benefit 
standards initially adopted under section 224(b) 
of the Affordable Health Care for America Act 
and for affordability credits under subtitle C of 
title II of division C of such Act; and 
‘‘(B) that includes such recommendations 
as may be necessary to ensure that— 
‘‘(i) such coverage is at least com-
parable to the coverage provided to chil-
dren under such an average State child 
health plan; and 
‘‘(ii) there are procedures in effect for 
the enrollment of CHIP enrollees (includ-
ing CHIP-eligible pregnant women) at the 
end of Y1 under this title, into a qualified 
health benefits plan offered through the 
Health Insurance Exchange, or into other 
acceptable coverage (as defined for pur-
poses of such Act) without interruption of 
coverage or a written plan of treatment.’’. 
(b) MEDICAID MAINTENANCE OF EFFORT; SIMPLI-
FYING
AND COORDINATING ELIGIBILITY RULES BE-
TWEEN EXCHANGE AND MEDICAID.—
1040 
(1) IN GENERAL.—Section 1903 of such Act 
(42 U.S.C. 1396b) is amended by adding at the end 
the following new subsection: 
‘‘(aa) MAINTENANCE OF MEDICAID EFFORT; SIMPLI-
FYING
AND COORDINATING ELIGIBILITY RULES BE-
TWEEN
HEALTH
INSURANCE
EXCHANGE
AND
MED-
ICAID.— 
‘‘(1) MAINTENANCE OF EFFORT.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a State is not eligible for payment 
under subsection (a) for a calendar quarter be-
ginning after the date of the enactment of this 
subsection if eligibility standards, methodolo-
gies, or procedures under its plan under this 
title (including any waiver under this title or 
demonstration project under section 1115) that 
are more restrictive than the eligibility stand-
ards, methodologies, or procedures, respectively, 
under such plan (or waiver) as in effect on 
June 16, 2009. The Secretary shall extend such 
a waiver (including the availability of Federal 
financial participation under such waiver) for 
such period as may be required for a State to 
meet the requirement of the previous sentence.
1041 
‘‘(B) EXCEPTION
FOR
CERTAIN
DEM-
ONSTRATION PROJECTS.—In the case of a State 
demonstration project under section 1115 in ef-
fect on June 16, 2009, that permits individuals 
to be eligible solely to receive a premium or 
cost-sharing subsidy for individual or group 
health insurance coverage, effective for coverage 
provided in Y1— 
‘‘(i) the Secretary shall permit the 
State to amend such waiver to apply more 
restrictive eligibility standards, methodolo-
gies, or procedures with respect to such in-
dividuals under such waiver; and 
‘‘(ii) the application of such more re-
strictive, standards, methodologies, or pro-
cedures under such an amendment shall 
not be considered in violation of the re-
quirement of subparagraph (A). 
‘‘(2) REMOVAL OF ASSET TEST FOR CERTAIN 
ELIGIBILITY CATEGORIES.— 
‘‘(A) IN GENERAL.—A State is not eligible 
for payment under subsection (a) for a calendar 
quarter beginning on or after the first day of 
Y1 (as defined in section 100(c) of the Afford-
able Health Care for America Act), if the State
1042 
applies any asset or resource test in deter-
mining (or redetermining) eligibility of any indi-
vidual on or after such first day under any of 
the following: 
‘‘(i) Subclause (I), (III), (IV), (VI), 
(VIII), (IX), (X), or (XI) of section 
1902(a)(10)(A)(i). 
‘‘(ii) Subclause (II), (IX), (XIV) or 
(XVII) of section 1902(a)(10)(A)(ii). 
‘‘(iii) Section 1931(b). 
‘‘(B) OVERRIDING CONTRARY PROVISIONS; 
REFERENCES.—The provisions of this title that 
prevent the waiver of an asset or resource test 
described in subparagraph (A) are hereby 
waived. 
‘‘(C) REFERENCES.—Any reference to a 
provision described in a provision in subpara-
graph (A) shall be deemed to be a reference to 
such provision as modified through the applica-
tion of subparagraphs (A) and (B).’’. 
(2) CONFORMING AMENDMENTS.—(A) Section 
1902(a)(10)(A) 
of 
such 
Act 
(42 
U.S.C. 
1396a(a)(10)(A)) is amended, in the matter before 
clause 
(i), 
by 
inserting 
‘‘subject 
to 
section 
1903(aa)(2),’’ after ‘‘(A)’’.
1043 
(B) Section 1931(b)(1) of such Act (42 U.S.C. 
1396u–1(b)(1)) is amended by inserting ‘‘and sec-
tion 1903(aa)(2)’’ after ‘‘and (3)’’. 
(c) STANDARDS FOR BENCHMARK PACKAGES.—Sec-
tion 1937(b) of such Act (42 U.S.C. 1396u–7(b)) is 
amended— 
(1) in each of paragraphs (1) and (2), by in-
serting ‘‘subject to paragraph (5),’’ after ‘‘subsection 
(a)(1),’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(5) MINIMUM STANDARDS.—Effective January 
1, 2013, any benchmark benefit package (or bench-
mark equivalent coverage under paragraph (2)) 
must meet the minimum benefits and cost-sharing 
standards of a basic plan offered through the Health 
Insurance Exchange.’’. 
(d) REPEAL OF CHIP.—Section 2104(a) of the So-
cial Security Act is amended by inserting at the end the 
following: 
‘‘No funds shall be appropriated or authorized to be 
appropriated under this section for fiscal year 2014 
and subsequent years.’’. 
SEC. 1704. REDUCTION IN MEDICAID DSH. 
(a) REPORT.—
1044 
(1) IN GENERAL.—Not later than January 1, 
2016, the Secretary of Health and Human Services 
(in this title referred to as the ‘‘Secretary’’) shall 
submit to Congress a report concerning the extent to 
which, based upon the impact of the health care re-
forms carried out under division A in reducing the 
number of uninsured individuals, there is a contin-
ued role for Medicaid DSH. In preparing the report, 
the Secretary shall consult with community-based 
health care networks serving low-income bene-
ficiaries. 
(2) MATTERS TO BE INCLUDED.—The report 
shall include the following: 
(A) 
RECOMMENDATIONS.—Recommenda-
tions regarding— 
(i) the appropriate targeting of Med-
icaid DSH within States; and 
(ii) the distribution of Medicaid DSH 
among the States, taking into account the 
ratio of the amount of DSH funds allo-
cated to a State to the number of unin-
sured individuals in such State. 
(B) SPECIFICATION OF DSH HEALTH RE-
FORM METHODOLOGY.—The DSH Health Re-
form methodology described in paragraph (2) of
1045 
subsection (b) for purposes of implementing the 
requirements of such subsection. 
(3) COORDINATION WITH MEDICARE DSH RE-
PORT.—The Secretary shall coordinate the report 
under this subsection with the report on Medicare 
DSH under section 1112. 
(4) MEDICAID DSH.—In this section, the term 
‘‘Medicaid DSH’’ means adjustments in payments 
under section 1923 of the Social Security Act for in-
patient hospital services furnished by dispropor-
tionate share hospitals. 
(b) MEDICAID DSH REDUCTIONS.— 
(1) REDUCTIONS.— 
(A) IN GENERAL.—For each of fiscal years 
2017 through 2019 the Secretary shall effect 
the following reductions: 
(i) REDUCTION DSH ALLOTMENTS.— 
The Secretary shall reduce DSH allot-
ments to States in the amount specified 
under the DSH health reform methodology 
under paragraph (2) for the State for the 
fiscal year. 
(ii) REDUCTIONS IN PAYMENTS.—The 
Secretary shall reduce payments to States 
under section 1903(a) of the Social Secu-
1046 
rity Act (42 U.S.C. 1396b(a)) for each cal-
endar quarter in the fiscal year, in the 
manner specified in subparagraph (C), in 
an amount equal to 1⁄4 of the DSH allot-
ment reduction under clause (i) for the 
State for the fiscal year. 
(B) AGGREGATE
REDUCTIONS.—The ag-
gregate reductions in DSH allotments for all 
States under subparagraph (A)(i) shall be equal 
to— 
(i) $1,500,000,000 for fiscal year 
2017; 
(ii) $2,500,000,000 for fiscal year 
2018; and 
(iii) $6,000,000,000 for fiscal year 
2019. 
The Secretary shall distribute such aggregate 
reduction among States in accordance with 
paragraph (2). 
(C) MANNER OF PAYMENT REDUCTION.— 
The amount of the payment reduction under 
subparagraph (A)(ii) for a State for a quarter 
shall be deemed an overpayment to the State 
under title XIX of the Social Security Act to be 
disallowed against the State’s regular quarterly
1047 
draw for all Medicaid spending under section 
1903(d)(2) 
of 
such 
Act 
(42 
U.S.C. 
1396b(d)(2)). Such a disallowance is not sub-
ject to a reconsideration under 1116(d) of such 
Act (42 U.S.C. 1316(d)). 
(D) DEFINITIONS.—In this section: 
(i) STATE.—The term ‘‘State’’ means 
the 50 States and the District of Colum-
bia. 
(ii) DSH 
ALLOTMENT.—The term 
‘‘DSH allotment’’ means, with respect to a 
State for a fiscal year, the allotment made 
under section 1923(f) of the Social Secu-
rity Act (42 U.S.C. 1396r–4(f)) to the 
State for the fiscal year. 
(2) DSH HEALTH REFORM METHODOLOGY.— 
The Secretary shall carry out paragraph (1) through 
use of a DSH Health Reform methodology issued by 
the Secretary that imposes the largest percentage re-
ductions on the States that— 
(A) have the lowest percentages of unin-
sured individuals (determined on the basis of 
audited hospital cost reports) during the most 
recent year for which such data are available; 
or
1048 
(B) do not target their DSH payments 
on— 
(i) hospitals with high volumes of 
Medicaid inpatients (as defined in section 
1923(b)(1)(A) of the Social Security Act 
(42 U.S.C. 1396r–4(b)(1)(A)); and 
(ii) hospitals that have high levels of 
uncompensated care (excluding bad debt). 
(3) DSH ALLOTMENT PUBLICATIONS.— 
(A) IN GENERAL.—Not later than the pub-
lication deadline specified in subparagraph (B), 
the Secretary shall publish in the Federal Reg-
ister a notice specifying the DSH allotment to 
each State under 1923(f) of the Social Security 
Act for the respective fiscal year specified in 
such subparagraph, consistent with the applica-
tion of the DSH Health Reform methodology 
described in paragraph (2). 
(B) PUBLICATION DEADLINE.—The publi-
cation deadline specified in this subparagraph 
is— 
(i) January 1, 2016, with respect to 
DSH allotments described in subparagraph 
(A) for fiscal year 2017;
1049 
(ii) January 1, 2017, with respect to 
DSH allotments described in subparagraph 
(A) for fiscal year 2018; and 
(iii) January 1, 2018, with respect to 
DSH allotments described in subparagraph 
(A) for fiscal year 2019. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 1923(f) of the Social Security Act 
(42 U.S.C. 1396r–4(f)) is amended— 
(A) by redesignating paragraph (7) as 
paragraph (8); and 
(B) by inserting after paragraph (6) the 
following new paragraph: 
‘‘(7) SPECIAL RULE FOR FISCAL YEARS 2017, 
2018, AND
2019.—For each of fiscal years 2017, 
2018, and 2018, the DSH allotments under this 
subsection are subject to reduction under section 
1704(b) of the Affordable Health Care for America 
Act.’’. 
(2) The second sentence of section 1923(b)(4) 
of such Act (42 U.S.C. 1396r–4(b)(4)) is amended 
by inserting before the period the following: ‘‘or to 
affect the authority of the Secretary to issue and im-
plement the DSH Health Reform methodology under
1050 
section 1704(b)(2) of the Affordable Health Care for 
America Act’’. 
(d) DISPROPORTIONATE SHARE HOSPITALS (DSH) 
AND ESSENTIAL ACCESS HOSPITAL (EAH) NON-DIS-
CRIMINATION.— 
(1) IN GENERAL.—Section 1923(d) of the So-
cial Security Act (42 U.S.C. 1396r–4) is amended 
by adding at the end the following new paragraph: 
‘‘(4) No hospital may be defined or deemed as 
a disproportionate share hospital, or as an essential 
access 
hospital 
(for 
purposes 
of 
subsection 
(f)(6)(A)(iv)), under a State plan under this title or 
subsection (b) of this section (including any dem-
onstration project under section 1115) unless the 
hospital— 
‘‘(A) provides services to beneficiaries 
under this title without discrimination on the 
ground of race, color, national origin, creed, 
source of payment, status as a beneficiary 
under this title, or any other ground unrelated 
to such beneficiary’s need for the services or the 
availability of the needed services in the hos-
pital; and