the lead agency in the State with responsibility 
for administering part C of the Individuals with 
Disabilities Education Act) under the State 
plan if payment for such item, service, or ad-
ministrative cost was included in the determina-
tion of a prepaid capitation or other risk-based 
rate of payment to an entity under a contract 
pursuant to section 1903(m).’’. 
(B) 
CONFORMING
AMENDMENT.—The 
third sentence of section 1903(i) of such Act 
(42 U.S.C. 1396b(i)), as amended by subsection 
(a)(1)(C), is amended by striking ‘‘and (24)’’ 
and inserting ‘‘(24), and (25)’’. 
(c) ALLOWABLE SHARE OF FFP WITH RESPECT TO 
PAYMENT FOR SERVICES FURNISHED IN OR THROUGH 
AN
EDUCATIONAL
PROGRAM
OR
SETTING.—Section 
1903(w)(6) of the Social Security Act (42 U.S.C. 
1396b(w)(6)) is amended— 
(1) in subparagraph (A), by inserting ‘‘subject 
to subparagraph (C),’’ after ‘‘subsection,’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(C) In the case of any Federal financial participa-
tion paid under subsection (a) with respect to an expendi-
ture for an item or service provided under the plan, or 
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for any administrative cost incurred to carry out the plan, 
that is furnished in or through an educational program 
or setting, the State shall provide that— 
‘‘(i) if 0 percent of the expenditure was made 
or the cost was incurred directly by the State, the 
State shall pay the local educational agency in the 
State or the lead agency in the State with responsi-
bility for administering part C of the Individuals 
with Disabilities Education Act that made the ex-
penditure or incurred the cost (and, if applicable, 
any consortium of public agencies that incurred 
costs in connection with the collection or submission 
of claims for such expenditures or costs), 100 per-
cent (divided, as appropriate, between such agencies 
and such a consortium, if applicable) of the amount 
of the Federal financial participation; and 
‘‘(ii) if 100 or any lesser percent of the expendi-
ture was made or the cost was directly incurred by 
the State, the State shall retain only such percent-
age of the Federal financial participation paid for 
the expenditure or cost as does not exceed the per-
centage of such expenditure or cost that was funded 
by State revenues that are dedicated solely for the 
provision of such medical assistance (and shall pay 
out of any remaining percentage of such Federal fi-
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nancial participation, the percentage due to the local 
educational agency in the State or the lead agency 
in the State with responsibility for administering 
part C of the Individuals with Disabilities Education 
Act that made or incurred the remaining percentage 
of such expenditure or cost (and, if applicable, any 
consortium of public agencies that incurred costs in 
connection with the collection or submission of 
claims for such expenditures or costs)).’’. 
(d) ASSURANCE OF REIMBURSEMENT FOR ADMINIS-
TRATIVE, ENROLLMENT, AND OUTREACH ACTIVITIES 
CONDUCTED BY LOCAL EDUCATIONAL AGENCIES.— 
(1) MEDICAID.—Section 1902 of the Social Se-
curity Act (42 U.S.C. 1396a) is amended by insert-
ing after subsection (j) the following new subsection: 
‘‘(k) Nothing in this title shall be construed as au-
thorizing the Secretary to prohibit the State agency with 
responsibility for the administration or supervision of the 
administration of the State plan from entering into inter-
agency agreements with local educational agencies under 
which such local educational agencies shall be reimbursed 
for the Federal share of amounts expended for administra-
tive, enrollment, and outreach activities for which payment 
is made to the State under section 1903(a)(7), including 
with respect to such activities as are conducted for pur-
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poses of satisfying the requirements of subsection 
(a)(43).’’. 
(2) SCHIP.—Section 2107(e)(1) of the Social 
Security Act (42 U.S.C. 1397gg(e)(1)) is amended— 
(A) by redesignating subparagraphs (B) 
through (D) as subparagraphs (C) through (E), 
respectively; and 
(B) by inserting after subparagraph (A) 
the following new subparagraph: 
‘‘(B) Section 1902(k) (relating to inter-
agency agreements with local educational agen-
cies for reimbursement for expenditures for ad-
ministrative, enrollment, and outreach activi-
ties).’’. 
(e) CLARIFICATION OF COVERAGE OF EPSDT AND 
ITEMS AND SERVICES FURNISHED TO A DISABLED CHILD 
PURSUANT TO SECTION 504 OF THE REHABILITATION 
ACT OF 1973; DEFINITION OF ‘‘EDUCATIONAL PROGRAM 
OR SETTING’’.—Section 1903(c) of the Social Security Act 
(42 U.S.C. 1396b(c)) is amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(c)’’; 
(2) by striking ‘‘Education Act or’’ and insert-
ing ‘‘Education Act,’’; 
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(3) by inserting ‘‘, or furnished to a child with 
a disability pursuant to section 504 of the Rehabili-
tation Act of 1973’’ before the period; and 
(4) by adding at the end the following new 
paragraphs: 
‘‘(2) Nothing in this title shall be construed as pro-
hibiting or restricting, or authorizing the Secretary to pro-
hibit or restrict, payment under subsection (a) for the fol-
lowing items or services furnished in or through an edu-
cational program or setting, or costs incurred with respect 
to the furnishing of such items or services: 
‘‘(A) Medical assistance for items or services 
described in section 1905(a)(4)(B) (relating to early 
and periodic screening, diagnostic, and treatment 
services defined in section 1905(r)) and costs in-
curred for providing such items or services in ac-
cordance 
with 
the 
requirements 
of 
section 
1902(a)(43). 
‘‘(B) Costs incurred for providing services re-
lated to the administration of the State plan, includ-
ing providing information regarding the availability 
of, and eligibility for, medical assistance under the 
plan, and assistance with determinations of eligi-
bility and enrollment and redeterminations of eligi-
bility under the plan. 
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‘‘(3) Nothing in this title shall be construed as pro-
hibiting or restricting, or authorizing the Secretary to pro-
hibit or restrict, payment under subsection (a) for medical 
assistance furnished in or through an educational program 
or setting or costs described in paragraph (2)(B) solely 
because— 
‘‘(A) the State utilizes an all-inclusive payment 
arrangement in making payments for medical assist-
ance described in subsections (a) or (r) of section 
1905; or 
‘‘(B) the State utilizes a cost allocation system 
that meets Federal requirements when paying for 
the cost of services described in section 1902(a)(43) 
or other administrative services directly related to 
the administration of the State plan. 
‘‘(4)(A) For purposes of this title, the term ‘edu-
cational program or setting’ means any location in which 
the items or services included in a child’s individualized 
education plan established pursuant to part B of the Indi-
viduals with Disabilities Education Act or otherwise, or 
in an infant’s or toddler’s individualized family service 
plan established pursuant to part C of such Act, are deliv-
ered, including the home, child care setting, or school of 
the child, infant, or toddler. 
‘‘(B) Such term includes— 
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‘‘(i) any location in which an evaluation or as-
sessment is conducted, in accordance with the re-
quirements of section 1902(a)(43) and subsections 
(a)(4)(B) and (r) of section 1905, to determine if a 
child is a child with a disability under section 614 
of the Individuals with Disabilities Education Act 
(20 U.S.C. 1414) who requires an individualized 
education program (IEP) under section 614(d) of 
such Act (20 U.S.C. 1414(d)) or if an infant or tod-
dler is an infant or toddler with a disability under 
section 
635(a)(3) 
of 
such 
Act 
(20 
U.S.C. 
1435(a)(3)) who requires an individualized family 
service plan under section 636 of such Act (20 
U.S.C. 1436) and any location in which a reevalua-
tion or reassessment of such a determination is con-
ducted; and 
‘‘(ii) for purposes of subsection (m)(2)(C), any 
location in which items or services described in sec-
tion 1905(a)(4)(B) (relating to early and periodic 
screening, diagnostic, and treatment services defined 
in section 1905(r)) are delivered and costs are in-
curred for providing such items or services in ac-
cordance 
with 
the 
requirements 
of 
section 
1902(a)(43).’’. 
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(f) ASSURANCE
OF COMPLIANCE WITH FEDERAL 
AND STATE REQUIREMENTS.—Section 1902(a) of the So-
cial Security Act (42 U.S.C. 1396a(a)) is amended— 
(1) in paragraph (69), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (70)(B)(iv), by striking the 
period at the end and inserting ‘‘; and’’; and 
(3) by inserting after paragraph (70), the fol-
lowing new paragraph: 
‘‘(71) provide that— 
‘‘(A) the State will establish procedures to 
ensure that— 
‘‘(i) any provider of an item or service 
covered under the plan that is furnished in 
or through an educational program or set-
ting complies with all Federal and State 
requirements applicable to providers of 
such items or services under the plan; and 
‘‘(ii) any educational entity that is en-
gaged in the provision of an activity de-
scribed in paragraph (43) or any other ac-
tivity that is directly related to the admin-
istration of the plan complies with all Fed-
eral and State requirements applicable for 
payment for such activity; and 
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‘‘(B) the State will not furnish medical as-
sistance for an item or service covered under 
the plan in or through an educational program 
or setting, or undertake any activity described 
in paragraph (43) or any other activity that is 
directly related to the administration of the 
plan in or through such a program or setting, 
unless the entity responsible for providing the 
item or service, or undertaking such an activity, 
in or through the educational program or set-
ting will be paid under the State plan for the 
costs related to the furnishing of such item or 
service or the undertaking of such activity.’’. 
(g) UNIFORM METHODOLOGY
FOR EDUCATIONAL 
PROGRAM OR SETTING-BASED CLAIMS.— 
(1) IN GENERAL.—Not later than 90 days after 
the date of enactment of this Act, the Secretary of 
Health and Human Services and the Secretary of 
Education, acting jointly and in consultation with 
State medicaid directors, State educational agencies, 
local educational agencies, and State agencies with 
responsibility for administering part C of the Indi-
viduals with Disabilities Education Act, shall develop 
and implement a uniform methodology for claims for 
payment of medical assistance and related adminis-
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trative costs furnished under title XIX of the Social 
Security Act in an educational program or setting. 
(2) REQUIREMENTS.—The methodology devel-
oped under paragraph (1)— 
(A) shall not prohibit or restrict payment 
for medical assistance and administrative activi-
ties that are provided or conducted in accord-
ance with section 1903(c) of the Social Security 
Act (42 U.S.C. 1396b(c)); and 
(B) with respect to administrative costs, 
shall be based on— 
(i) standards related to time studies 
and population estimates; and 
(ii) a national standard for deter-
mining payment for such costs. 
(h) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of enactment of 
this Act and shall apply to items and services provided 
and expenditures made on or after such date, without re-
gard to whether implementing regulations are in effect. 
Æ 
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