are members of the same affiliated group (as 
defined by the Secretary under paragraph 
(4)(H)(ii)) and the reference resident level for 
each such hospital shall be the reference resi-
dent level with respect to the cost reporting pe-
riod that results in the smallest difference be-
tween the reference resident level and the other-
wise applicable resident limit.’’. 
SEC. 5. CONTINUED INCLUSION OF ORPHAN DRUGS IN DEF-
INITION OF COVERED OUTPATIENT DRUGS 
WITH RESPECT TO CHILDREN’S HOSPITALS 
UNDER THE 340B DRUG DISCOUNT PROGRAM. 
(a) DEFINITION OF COVERED OUTPATIENT DRUG.— 
(1) AMENDMENT.—Subsection (e) of section 
340B of the Public Health Service Act (42 U.S.C. 
256b) is amended by striking ‘‘covered entities de-
scribed in subparagraph (M)’’ and inserting ‘‘cov-
ered entities described in subparagraph (M) (other 
than a children’s hospital described in subparagraph 
(M))’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall take effect as if included in 
the enactment of section 2302 of the Health Care 
and Education Reconciliation Act of 2010 (Public 
Law 111–152).
(b) TECHNICAL AMENDMENT.—Subparagraph (B) of 
section 1927(a)(5) of the Social Security Act (42 U.S.C. 
1396r–8(a)(5)) is amended by striking ‘‘and a children’s 
hospital’’ and all that follows through the end of the sub-
paragraph and inserting a period. 
SEC. 6. MEDICAID AND CHIP TECHNICAL CORRECTIONS. 
(a) REPEAL OF EXCLUSION OF CERTAIN INDIVID-
UALS AND ENTITIES FROM MEDICAID.—Section 6502 of 
Public Law 111–148 is repealed and the provisions of law 
amended by such section are restored as if such section 
had never been enacted. Nothing in the previous sentence 
shall affect the execution or placement of the insertion 
made by section 6503 of such Act. 
(b) INCOME LEVEL FOR CERTAIN CHILDREN UNDER 
MEDICAID.—Effective as if included in the enactment of 
Public Law 111–148, section 2001(a)(5)(B) of such Act 
is amended by striking all that follows ‘‘is amended’’ and 
inserting the following: ‘‘by inserting after ‘100 percent’ 
the following: ‘(or, beginning January 1, 2014, 133 per-
cent)’.’’. 
(c) CALCULATION AND PUBLICATION OF PAYMENT 
ERROR RATE MEASUREMENT FOR CERTAIN YEARS.— 
Section 601(b) of the Children’s Health Insurance Pro-
gram Reauthorization Act of 2009 (Public Law 111–3) 
is amended by adding at the end the following: ‘‘The Sec-
retary is not required under this subsection to calculate 
or publish a national or a State-specific error rate for fis-
cal year 2009 or fiscal year 2010.’’. 
(d) CORRECTIONS TO EXCEPTIONS TO EXCLUSION 
OF
CHILDREN
OF
CERTAIN
EMPLOYEES.—Section 
2110(b)(6) of the Social Security Act (42 U.S.C. 
1397jj(b)(6)) is amended— 
(1) in subparagraph (B)— 
(A) by striking ‘‘PER
PERSON’’ in the 
heading; and 
(B) by striking ‘‘each employee’’ and in-
serting ‘‘employees’’; and 
(2) in subparagraph (C), by striking ‘‘, on a 
case-by-case basis,’’. 
(e) ELECTRONIC HEALTH RECORDS.—Effective as if 
included in the enactment of section 4201(a)(2) of the 
American Recovery and Reinvestment Act of 2009 (Public 
Law 111–5), section 1903(t) of the Social Security Act 
(42 U.S.C. 1396b(t)) is amended— 
(1) in paragraph (3)(E), by striking ‘‘reduced 
by any payment that is made to such Medicaid pro-
vider from any other source (other than under this 
subsection or by a State or local government)’’ and 
inserting ‘‘reduced by the average payment the Sec-
retary estimates will be made to such Medicaid pro-
viders (determined on a percentage or other basis 
for such classes or types of providers as the Sec-
retary may specify) from other sources (other than 
under this subsection, or by the Federal government 
or a State or local government)’’; and 
(2) in paragraph (6)(B), by inserting before the 
period the following: ‘‘and shall be determined to 
have met such responsibility to the extent that the 
payment to the Medicaid provider is not in excess of 
85 percent of the net average allowable cost’’. 
(f) CORRECTIONS OF DESIGNATIONS.— 
(1) Section 1902 of the Social Security Act (42 
U.S.C. 1396a) is amended— 
(A) in subsection (a)(10), in the matter 
following subparagraph (G), by striking ‘‘and’’ 
before ‘‘(XVI) the medical’’ and by striking 
‘‘(XVI) if’’ and inserting ‘‘(XVII) if’’; and 
(B) in subsection (ii)(2), by striking 
‘‘(XV)’’ and inserting ‘‘(XVI)’’. 
(2) Section 2107(e)(1) of the Social Security 
Act (42 U.S.C. 1397gg(e)(1)) is amended by redes-
ignating the subparagraph (N) of that section added 
by 2101(e) of Public Law 111–148 as subparagraph 
(O).
SEC. 7. FUNDING FOR CLAIMS REPROCESSING. 
For purposes of carrying out the provisions of, and 
amendments made by, this Act that relate to title XVIII 
of the Social Security Act, and other provisions relating 
to such title that involve reprocessing of claims, there are 
appropriated to the Secretary of Health and Human Serv-
ices for the Centers for Medicare & Medicaid Services Pro-
gram Management Account, from amounts in the general 
fund of the Treasury not otherwise appropriated, 
$95,000,000. Amounts appropriated under the preceding 
sentence shall remain available until expended. 
SEC. 8. EXTENSION OF SECTION 508 RECLASSIFICATIONS. 
(a) IN GENERAL.—Section 106(a) of division B of 
the Tax Relief and Health Care Act of 2006 (42 U.S.C. 
1395 note), as amended by section 117 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 
110–173), section 124 of the Medicare Improvements for 
Patients and Providers Act of 2008 (Public Law 110– 
275), and sections 3137(a) and 10317 of Public Law 111– 
148, is amended by striking ‘‘September 30, 2010’’ and 
inserting ‘‘September 30, 2011’’. 
(b) CONFORMING AMENDMENT.—Section 117(a)(3) 
of the Medicare, Medicaid, and SCHIP Extension Act of 
2007 (Public Law 110–173), is amended by inserting ‘‘in 
fiscal years 2008 and 2009’’ after ‘‘For purposes of imple-
mentation of this subsection’’.
SEC. 9. REVISION TO THE MEDICARE IMPROVEMENT FUND. 
Section 1898(b)(1) of the Social Security Act (42 
U.S.C. 1395iii(b)(1)) is amended by striking subpara-
graphs (A) and (B) and inserting the following subpara-
graphs: 
‘‘(A) fiscal year 2015, $0; 
‘‘(B) fiscal year 2016, $125,000,000; 
and’’. 
SEC. 10. PAYGO COMPLIANCE. 
The budgetary effects of this Act, for the purpose of 
complying with the Statutory Pay-As-You-Go Act of 2010, 
shall be determined by reference to the latest statement 
titled ‘‘Budgetary Effects of PAYGO Legislation’’ for this 
Act, submitted for printing in the Congressional Record 
by the Chairman of the House Budget Committee, pro-
vided that such statement has been submitted prior to the 
vote on passage. 
Passed the House of Representatives July 14, 2010. 
Attest: 
Clerk.