SEC. 2. APPLICATION OF UNEXPENDED MEDICAID DSH AL-
LOTMENTS FOR INCREASED ALLOTMENTS 
FOR LOW DSH STATES AND FOR HEALTH 
NETWORK ACCESS GRANTS. 
(a) ESTABLISHMENT
OF
DSH REDISTRIBUTION 
POOL FROM UNEXPENDED MEDICAID DSH ALLOT-
MENTS.—Subsection (f) of section 1923 of the Social Se-
curity Act (42 U.S.C. 1396r–4) is amended— 
(1) by redesignating paragraph (7) as para-
graph (8); and 
(2) by inserting after paragraph (6) the fol-
lowing new paragraph: 
‘‘(7) DSH REDISTRIBUTION POOL FROM POR-
TION OF UNEXPENDED DSH ALLOTMENTS TO FUND 
INCREASE IN ALLOTMENTS FOR LOW DSH STATES 
AND HEALTH NETWORK ACCESS GRANTS.— 
‘‘(A) ESTABLISHMENT.—There is estab-
lished a DSH redistribution pool in the amount 
provided under this paragraph. Such amount 
shall be determined by the Secretary at the be-
ginning of each fiscal year and the Secretary 
may adjust such amount in subsequent fiscal 
years to take into account errors in estimates 
made for previous fiscal years. The amount in 
such pool shall be available for obligation and 
expenditure without fiscal year limitation. 
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‘‘(B) ADDITION OF UNEXPENDED DSH AL-
LOTMENTS.—At the beginning of each fiscal 
year (beginning with fiscal year 2009), there 
shall be added to the DSH redistribution pool 
an amount equal to the amount by which— 
‘‘(i) the total of the DSH allotments 
for all States for the third preceding fiscal 
year; exceeded 
‘‘(ii) the total Federal financial par-
ticipation under this title attributable to 
such allotments for such fiscal year. 
‘‘(C) REDUCTION FOR EXPENDITURES RE-
SULTING FROM INCREASED ALLOTMENTS FOR 
LOW DSH STATES AND FOR HEALTH NETWORK 
ACCESS GRANTS.—At the beginning of each fis-
cal year (beginning with fiscal year 2010), there 
shall be subtracted from the DSH redistribu-
tion pool an amount equal to the sum of— 
‘‘(i) the aggregate increase in Federal 
financial participation under this title at-
tributable to the amendments made by sec-
tion 2(b) of the Strengthening the Safety 
Net Act of 2008 for the previous fiscal 
year; and 
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‘‘(ii) the amount obligated on grants 
under subsection (k) for such previous fis-
cal year.’’. 
(b) INCREASE IN DSH ALLOTMENTS FOR LOW DSH 
STATES; QUALIFICATION OF LOW DSH STATES BASED 
ON FISCAL YEAR 2004 DATA.—Subsection (f)(5) of such 
section is amended— 
(1) in subparagraph (B)— 
(A) by striking ‘‘and’’ at the end of clause 
(ii); 
(B) in clause (iii)— 
(i) by striking ‘‘2009’’ and inserting 
‘‘2014’’; 
(ii) by inserting ‘‘, subject to subpara-
graph (D),’’ after ‘‘shall be’’; and 
(iii) by redesignating such clause as 
clause (iv); and 
(C) by inserting after clause (ii) the fol-
lowing new clause: 
‘‘(iii) each succeeding fiscal year be-
fore fiscal year 2014 shall be, subject to 
subparagraph (D), the DSH allotment for 
the State for the previous fiscal year in-
creased by 19.5 percent; and’’; and 
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(2) by adding at the end the following new sub-
paragraphs: 
‘‘(C) ADDITIONAL STATES COVERED FOR 
FISCAL YEAR 2009 AND SUBSEQUENT YEARS.— 
In the case of a State not described in subpara-
graph (B) in which the total expenditures under 
the State plan (including Federal and State 
shares) for disproportionate share hospital ad-
justments under this section for fiscal year 
2004, as reported to the Administrator of the 
Centers for Medicare & Medicaid Services as of 
August 31, 2007, is greater than 0 but less 
than 3 percent of the State’s total amount of 
expenditures under the State plan for medical 
assistance during the fiscal year, the DSH al-
lotment for the State with respect to— 
‘‘(i) fiscal year 2009 and any suc-
ceeding fiscal year before fiscal year 2014 
shall be, subject to subparagraph (D), the 
DSH allotment for the State for the pre-
vious fiscal year increased by 19.5 percent; 
and 
‘‘(ii) any subsequent fiscal year shall 
be, subject to subparagraph (D), the DSH 
allotment for the State for the previous fis-
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smartinez on PRODPC60 with BILLS
cal year subject to an increase for inflation 
as provided in paragraph (3)(A). 
‘‘(D) 
LIMITATION
ON
INCREASES
TO 
AMOUNT
AVAILABLE
FROM
DSH
REDISTRIBU-
TION POOL.—If the Secretary estimates for a 
fiscal year (beginning with fiscal year 2009) 
that— 
‘‘(i) the amount of additional expendi-
tures in the fiscal year resulting from the 
application of an increase in DSH allot-
ments under subparagraphs (B) and (C) 
beginning with fiscal year 2009 of 19.5 
percent (instead of the application of an 
increase for inflation as provided in para-
graph (3)(A)), exceeds 
‘‘(ii) the amount available for obliga-
tion from the DSH redistribution pool 
under paragraph (7) for the fiscal year, 
the Secretary shall reduce the increase in the 
DSH allotments otherwise provided under such 
subparagraphs for the fiscal year in a pro-rata 
manner so that the amount of additional ex-
penditures in the fiscal year resulting from the 
application of such subparagraphs is equal to 
the amount described in clause (ii) for the fiscal 
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year. A reduction in a DSH allotment for a 
State under this subparagraph shall not affect 
the computation of the DSH allotment for the 
State under subparagraph (B) or (C) for the 
subsequent fiscal year.’’. 
(c) DEMONSTRATION GRANTS TO HEALTH ACCESS 
NETWORKS.—Such section is further amended by adding 
at the end the following new subsection: 
‘‘(k) DEMONSTRATION GRANTS TO HEALTH ACCESS 
NETWORKS.— 
‘‘(1) IN GENERAL.—From the amount of funds 
made available under paragraph (6)(A) for a fiscal 
year, the Secretary shall award demonstration 
grants under this subsection to health access net-
works for such fiscal year for the purpose of improv-
ing access, quality, and continuity of care for unin-
sured individuals through better coordination of care 
by the network. 
‘‘(2) HEALTH ACCESS NETWORK DEFINED.— 
‘‘(A) IN GENERAL.—In this subsection, the 
term ‘health access network’ means an entity 
representing a collection of safety net providers, 
including hospitals, community health centers, 
public health departments, physicians, safety 
net health plans, federally qualified health cen-
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ters, or other recognized safety net providers, 
that— 
‘‘(i) is organized for the purpose of re-
structuring and improving the access, qual-
ity, and continuity of care to the uninsured 
and underinsured; and 
‘‘(ii) offers patients access to all levels 
of care, including primary, outpatient, spe-
cialty, certain ancillary services, and acute 
inpatient care, within a community or 
across a broad spectrum of providers 
across a service region or State. 
‘‘(B) INCLUSION
OF
SECTION
330
NET-
WORKS AND PLANS.—Such term includes net-
works and plans that meet the requirements for 
funding under section 330(e)(1)(C) of the Pub-
lic 
Health 
Service 
Act 
(42 
U.S.C. 
254b(e)(1)(C)). 
‘‘(C) INCLUSION OF INTEGRATED HEALTH 
CARE SYSTEMS.— 
‘‘(i) IN GENERAL.—Such term also in-
cludes an integrated health care system 
(including a pediatric system). 
‘‘(ii) DEFINITION.—For purposes of 
this subparagraph, the term ‘integrated 
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health care system (including a pediatric 
system)’ means a health care provider 
that— 
‘‘(I) is organized to provide care 
in a coordinated fashion; and 
‘‘(II) assures access to a full 
range of primary, specialty, and hos-
pital care, to uninsured and under-in-
sured individuals, as appropriate. 
‘‘(3) APPLICATION AND PLAN REQUIREMENT.— 
‘‘(A) IN GENERAL.—In order to be eligible 
for a grant under this subsection, a health ac-
cess network shall— 
‘‘(i) submit an application, in such 
form and manner as the Secretary shall 
specify; 
‘‘(ii) submit with such application a 
plan that meets the requirements of sub-
paragraph (B); 
‘‘(iii) identify in such plan measurable 
performance targets for at least 3 of the 
goals described in subparagraph (B); and 
‘‘(iv) agree that a portion of the pay-
ment of grant funds for patient care serv-
ices after the first year for which such pay-
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ment is made shall be contingent upon the 
health access network demonstrating suc-
cess in achieving such targets. 
‘‘(B) PLAN REQUIREMENTS.—A health ac-
cess network that desires a grant under this 
subsection shall submit a plan to the Secretary 
that details how the network intends through 
the grant— 
‘‘(i) to manage costs associated with 
the provision of health care services to un-
insured 
and 
underinsured 
individuals 
served by the network; 
‘‘(ii) to improve access to, and the 
availability of, health care services provided 
to uninsured and underinsured individuals 
served by the network; 
‘‘(iii) to enhance the quality and co-
ordination of health care services provided 
to uninsured and underinsured individuals 
served by the network; 
‘‘(iv) to improve the health status of 
uninsured and underinsured individuals 
served by the network; and 
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‘‘(v) to reduce health disparities in the 
population of uninsured and underinsured 
individuals served by the network. 
Nothing in this paragraph shall be construed as 
requiring a health access network operating in 
a State to operate on a Statewide basis or oth-
erwise to serve all uninsured and underinsured 
individuals in area served. 
‘‘(C) AUTHORITY
TO
LIMIT
NUMBER
OF 
GRANTS.—In awarding grants under this sub-
section, the Secretary may limit the grants in 
a manner so that each grantee is able to pro-
vide patient care services to the number of un-
insured individuals specified by each network in 
its grant application. 
‘‘(4) USE OF FUNDS.— 
‘‘(A) IN GENERAL.—A health access net-
work that receives funds under a grant under 
this subsection shall expend an amount equal to 
at least 90 percent of such funds for the provi-
sion of (or payment for) direct patient care 
services. 
‘‘(B) RULE OF CONSTRUCTION REGARDING 
DIRECT
PATIENT
CARE
SERVICES.—For pur-
poses of subparagraph (A), the term ‘direct pa-
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tient care services’ means, with respect to a 
health access network, services, such as spe-
cialty medical care and diagnostic services, that 
are not available or are insufficiently available 
through the network’s providers other than 
under a grant under this subsection. 
‘‘(C) 
PREFERENCE
FOR
SERVICES 
THROUGH
SAFETY
NET
PROVIDERS.—In pur-
chasing direct patient care services for unin-
sured and underinsured individuals under a 
grant under this subsection, health access net-
works shall, to the maximum extent feasible, 
endeavor to purchase such services from safety 
net providers. 
‘‘(5) SUPPLEMENT, NOT
SUPPLANT.—Funds 
paid to a health access network under a grant under 
this subsection shall supplement and not supplant, 
other Federal or State payments that are made to 
the network to support the provision of health care 
services to low-income or uninsured patients. 
‘‘(6) FUNDING.— 
‘‘(A) AVAILABILITY OF FUNDS FROM DSH 
REDISTRIBUTION POOL.—To carry out this sub-
section there is hereby made available for each 
fiscal year (beginning with fiscal year 2009 and 
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ending with fiscal year 2013) and appropriated 
from the DSH redistribution pool established 
under subsection (d)(7), an amount equal to— 
‘‘(i) the amount available for obliga-
tion from such pool in such fiscal year, re-
duced by 
‘‘(ii) the Secretary’s estimate of the 
aggregate increase in Federal financial 
participation under this title for the fiscal 
year that will be attributable to the amend-
ments made by section 2(b) of the 
Strengthening the Safety Net Act of 2008. 
‘‘(B) TREATMENT
OF
GRANT
FUNDS.— 
Payments to a health access network under a 
grant under this subsection shall not be treated 
as a disproportionate share hospital payment 
adjustments under this section and shall not be 
counted against the DSH allotment for any 
State. 
‘‘(C) NO STATE MATCHING REQUIRED.— 
Nothing in this subsection shall be construed as 
requiring a State to provide for any State 
matching funds to receive funds under this sub-
section. 
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