Sec. 1. Short title; amendments to Social Security Act; references; table of con-
tents. 
Sec. 2. Purpose. 
Sec. 3. General effective date; exception for State legislation; contingent effec-
tive date; reliance on law. 
TITLE I—FINANCING 
Subtitle A—Funding 
Sec. 101. Extension of CHIP. 
Sec. 102. Allotments for States and territories for fiscal years 2008 through 
2012. 
Sec. 103. Child Enrollment Contingency Fund. 
Sec. 104. CHIP performance bonus payment to offset additional enrollment 
costs resulting from enrollment and retention efforts. 
Sec. 105. 2-year initial availability of CHIP allotments. 
Sec. 106. Making permanent redistribution of unused fiscal year 2005 allot-
ments to address State funding shortfalls; conforming exten-
sion of qualifying State authority; redistribution of unused al-
lotments for subsequent fiscal years. 
Sec. 107. Option for qualifying States to receive the enhanced portion of the 
CHIP matching rate for Medicaid coverage of certain children. 
Sec. 108. One-time appropriation. 
Sec. 109. Improving funding for the territories under CHIP and Medicaid. 
Subtitle B—Focus on Low-Income Children and Pregnant Women 
Sec. 111. State option to cover low-income pregnant women under CHIP 
through a State plan amendment. 
Sec. 112. Phase-out of coverage for nonpregnant childless adults under CHIP; 
conditions for coverage of parents. 
Sec. 113. Elimination of counting Medicaid child presumptive eligibility costs 
against title XXI allotment. 
Sec. 114. Denial of payments for coverage of children with effective family in-
come that exceeds 300 percent of the poverty line. 
Sec. 115. State authority under Medicaid. 
Sec. 116. Preventing substitution of CHIP coverage for private coverage. 
TITLE II—OUTREACH AND ENROLLMENT 
Subtitle A—Outreach and Enrollment Activities 
Sec. 201. Grants and enhanced administrative funding for outreach and enroll-
ment. 
Sec. 202. Increased outreach and enrollment of Indians. 
Sec. 203. State option to rely on findings from an Express Lane agency to con-
duct simplified eligibility determinations. 
Subtitle B—Reducing Barriers to Enrollment 
Sec. 211. Verification of declaration of citizenship or nationality for purposes 
of eligibility for Medicaid and CHIP. 
Sec. 212. Reducing administrative barriers to enrollment. 
Sec. 213. Model of Interstate coordinated enrollment and coverage process.
TITLE III—REDUCING BARRIERS TO PROVIDING PREMIUM 
ASSISTANCE 
Subtitle A—Additional State Option for Providing Premium Assistance 
Sec. 301. Additional State option for providing premium assistance. 
Sec. 302. Outreach, education, and enrollment assistance. 
Subtitle B—Coordinating Premium Assistance With Private Coverage 
Sec. 311. Special enrollment period under group health plans in case of termi-
nation of Medicaid or CHIP coverage or eligibility for assist-
ance in purchase of employment-based coverage; coordination 
of coverage. 
TITLE IV—STRENGTHENING QUALITY OF CARE AND HEALTH 
OUTCOMES 
Sec. 401. Child health quality improvement activities for children enrolled in 
Medicaid or CHIP. 
Sec. 402. Improved availability of public information regarding enrollment of 
children in CHIP and Medicaid. 
Sec. 403. Application of certain managed care quality safeguards to CHIP. 
TITLE V—IMPROVING ACCESS TO BENEFITS 
Sec. 501. Dental benefits. 
Sec. 502. Mental health parity in CHIP plans. 
Sec. 503. Application of prospective payment system for services provided by 
Federally-qualified health centers and rural health clinics. 
Sec. 504. Premium grace period. 
Sec. 505. Demonstration projects relating to diabetes prevention. 
Sec. 506. Clarification of coverage of services provided 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’’). 
Sec. 602. Improving data collection. 
Sec. 603. Updated Federal evaluation of CHIP. 
Sec. 604. Access to records for IG and GAO audits and evaluations. 
Sec. 605. No Federal funding for illegal aliens; disallowance for unauthorized 
expenditures. 
Subtitle B—Miscellaneous Health Provisions 
Sec. 611. Deficit Reduction Act technical corrections. 
Sec. 612. References to title XXI. 
Sec. 613. Prohibiting initiation of new health opportunity account demonstra-
tion programs. 
Sec. 614. County Medicaid health insuring organizations; GAO report on Med-
icaid managed care payment rates. 
Sec. 615. Adjustment in computation of Medicaid FMAP to disregard an ex-
traordinary employer pension contribution. 
Sec. 616. Moratorium on certain payment restrictions.
Sec. 617. Medicaid DSH allotments for Tennessee and Hawaii. 
Sec. 618. Clarification treatment of regional medical center. 
Sec. 619. Extension of SSI web-based asset demonstration project to the Med-
icaid program. 
Subtitle C—Other Provisions 
Sec. 621. Support for injured servicemembers. 
Sec. 622. Outreach regarding health insurance options available to children. 
Sec. 623. Sense of Senate regarding access to affordable and meaningful health 
insurance coverage. 
TITLE VII—REVENUE PROVISIONS 
Sec. 701. Increase in excise tax rate on tobacco products. 
Sec. 702. Administrative improvements. 
Sec. 703. Time for payment of corporate estimated taxes. 
SEC. 2. PURPOSE. 
It is the purpose of this Act to provide dependable 
and stable funding for children’s health insurance under 
titles XXI and XIX of the Social Security Act in order 
to enroll all six million uninsured children who are eligible, 
but not enrolled, for coverage today through such titles. 
SEC. 3. GENERAL EFFECTIVE DATE; EXCEPTION FOR STATE 
LEGISLATION; 
CONTINGENT 
EFFECTIVE 
DATE; RELIANCE ON LAW. 
(a) GENERAL EFFECTIVE DATE.—Unless otherwise 
provided in this Act, subject to subsections (b) through 
(d), this Act (and the amendments made by this Act) shall 
take effect on October 1, 2007, and shall apply to child 
health assistance and medical assistance provided on or 
after that date. 
(b) EXCEPTION FOR STATE LEGISLATION.—In the 
case of a State plan under title XIX or State child health 
plan under XXI of the Social Security Act, which the Sec-
retary of Health and Human Services determines requires 
State legislation in order for the respective plan to meet 
one or more additional requirements imposed by amend-
ments made by this Act, the respective plan shall not be 
regarded as failing to comply with the requirements of 
such title solely on the basis of its failure to meet such 
an additional requirement before the first day of the first 
calendar quarter beginning after the close of the first reg-
ular session of the State legislature that begins after the 
date of enactment of this Act. For purposes of the pre-
vious sentence, in the case of a State that has a 2-year 
legislative session, each year of the session shall be consid-
ered to be a separate regular session of the State legisla-
ture. 
(c) CONTINGENT
EFFECTIVE
DATE
FOR
CHIP 
FUNDING FOR FISCAL YEAR 2008.—Notwithstanding any 
other provision of law, if funds are appropriated under any 
law (other than this Act) to provide allotments to States 
under CHIP for all (or any portion) of fiscal year 2008— 
(1) any amounts that are so appropriated that 
are not so allotted and obligated before the date of 
the enactment of this Act are rescinded; and 
(2) any amount provided for CHIP allotments 
to a State under this Act (and the amendments 
made by this Act) for such fiscal year shall be re-
duced by the amount of such appropriations so allot-
ted and obligated before such date. 
(d) RELIANCE ON LAW.—With respect to amend-
ments made by this Act (other than title VII) that become 
effective as of a date— 
(1) such amendments are effective as of such 
date whether or not regulations implementing such 
amendments have been issued; and 
(2) Federal financial participation for medical 
assistance or child health assistance furnished under 
title XIX or XXI, respectively, of the Social Security 
Act on or after such date by a State in good faith 
reliance on such amendments before the date of pro-
mulgation of final regulations, if any, to carry out 
such amendments (or before the date of guidance, if 
any, regarding the implementation of such amend-
ments) shall not be denied on the basis of the 
State’s failure to comply with such regulations or 
guidance. 
TITLE I—FINANCING 
Subtitle A—Funding 
SEC. 101. EXTENSION OF CHIP. 
Section 2104(a) (42 U.S.C. 1397dd(a)) is amended— 
(1) in paragraph (9), by striking ‘‘and’’ at the 
end;
(2) in paragraph (10), by striking the period at 
the end and inserting a semicolon; and 
(3) by adding at the end the following new 
paragraphs: 
‘‘(11) for fiscal year 2008, $9,125,000,000; 
‘‘(12) for fiscal year 2009, $10,675,000,000; 
‘‘(13) for fiscal year 2010, $11,850,000,000; 
‘‘(14) for fiscal year 2011, $13,750,000,000; 
and 
‘‘(15) for fiscal year 2012, for purposes of mak-
ing 2 semi-annual allotments— 
‘‘(A) $1,150,000,000 for the period begin-
ning on October 1, 2011, and ending on March 
31, 2012, and 
‘‘(B) $1,150,000,000 for the period begin-
ning on April 1, 2012, and ending on Sep-
tember 30, 2012.’’. 
SEC. 102. ALLOTMENTS FOR STATES AND TERRITORIES 
FOR FISCAL YEARS 2008 THROUGH 2012. 
Section 2104 (42 U.S.C. 1397dd) is amended— 
(1) in subsection (b)(1), by striking ‘‘subsection 
(d)’’ and inserting ‘‘subsections (d) and (i)’’; 
(2) in subsection (c)(1), by striking ‘‘subsection 
(d)’’ and inserting ‘‘subsections (d) and (i)(4)’’; and
(3) by adding at the end the following new sub-
section: 
‘‘(i) 
ALLOTMENTS
FOR
FISCAL
YEARS
2008 
THROUGH 2012.— 
‘‘(1) FOR FISCAL YEAR 2008.— 
‘‘(A) FOR THE 50 STATES AND THE DIS-
TRICT
OF
COLUMBIA.—Subject to the suc-
ceeding provisions of this paragraph and para-
graph (4), the Secretary shall allot for fiscal 
year 2008 from the amount made available 
under subsection (a)(11), to each of the 50 
States and the District of Columbia 110 per-
cent of the highest of the following amounts for 
such State or District: 
‘‘(i) The total Federal payments to 
the State under this title for fiscal year 
2007, multiplied by the allotment increase 
factor determined under paragraph (5) for 
fiscal year 2008. 
‘‘(ii) The Federal share of the amount 
allotted to the State for fiscal year 2007 
under subsection (b), multiplied by the al-
lotment increase factor determined under 
paragraph (5) for fiscal year 2008. 
‘‘(iii) Only in the case of—
‘‘(I) a State that received a pay-
ment, redistribution, or allotment 
under paragraph (1), (2), or (4) of 
subsection (h), the amount of the pro-
jected total Federal payments to the 
State under this title for fiscal year 
2007, as determined on the basis of 
the November 2006 estimates certified 
by the State to the Secretary; 
‘‘(II) a State whose projected 
total Federal payments to the State 
under this title for fiscal year 2007, 
as determined on the basis of the May 
2006 estimates certified by the State 
to the Secretary, were at least 
$95,000,000 but not more than 
$96,000,000 higher than the projected 
total Federal payments to the State 
under this title for fiscal year 2007 on 
the basis of the November 2006 esti-
mates, the amount of the projected 
total Federal payments to the State 
under this title for fiscal year 2007 on 
the basis of the May 2006 estimates; 
or
‘‘(III) a State whose projected 
total Federal payments under this 
title for fiscal year 2007, as deter-
mined on the basis of the November 
2006 estimates certified by the State 
to the Secretary, exceeded all amounts 
available to the State for expenditure 
for fiscal year 2007 (including any 
amounts paid, allotted, or redistrib-
uted to the State in prior fiscal 
years), the amount of the projected 
total Federal payments to the State 
under this title for fiscal year 2007, 
as determined on the basis of the No-
vember 2006 estimates certified by 
the State to the Secretary, 
multiplied by the allotment increase factor 
determined under paragraph (5) for fiscal 
year 2008. 
‘‘(iv) The projected total Federal pay-
ments to the State under this title for fis-
cal year 2008, as determined on the basis 
of the August 2007 projections certified by 
the State to the Secretary by not later 
than September 30, 2007.
‘‘(B) FOR
THE
COMMONWEALTHS
AND 
TERRITORIES.—Subject to the succeeding provi-
sions of this paragraph and paragraph (4), the 
Secretary shall allot for fiscal year 2008 from 
the amount made available under subsection 
(a)(11) to each of the commonwealths and ter-
ritories described in subsection (c)(3) an 
amount equal to the highest amount of Federal 
payments to the commonwealth or territory 
under this title for any fiscal year occurring 
during the period of fiscal years 1998 through 
2007, multiplied by the allotment increase fac-
tor determined under paragraph (5) for fiscal 
year 2008, except that subparagraph (B) there-
of shall be applied by substituting ‘the United 
States’ for ‘the State’. 
‘‘(C) DEADLINE AND DATA FOR DETER-
MINING
FISCAL
YEAR
2008
ALLOTMENTS.—In 
computing the amounts under subparagraphs 
(A) and (B) that determine the allotments to 
States for fiscal year 2008, the Secretary shall 
use the most recent data available to the Sec-
retary before the start of that fiscal year. The 
Secretary may adjust such amounts and allot-
ments, as necessary, on the basis of the expend-
iture data for the prior year reported by States 
on CMS Form 64 or CMS Form 21 not later 
than November 30, 2007, but in no case shall 
the Secretary adjust the allotments provided 
under subparagraph (A) or (B) for fiscal year 
2008 after December 31, 2007. 
‘‘(D) 
ADJUSTMENT
FOR
QUALIFYING 
STATES.—In the case of a qualifying State de-
scribed in paragraph (2) of section 2105(g), the 
Secretary shall permit the State to submit re-
vised projection described in subparagraph 
(A)(iv) in order to take into account changes in 
such projections attributable to the application 
of paragraph (4) of such section. 
‘‘(2) FOR FISCAL YEARS 2009 THROUGH 2011.— 
‘‘(A) IN GENERAL.—Subject to paragraphs 
(4) and (6), from the amount made available 
under paragraphs (12) through (14) of sub-
section (a) for each of fiscal years 2009 
through 2011, respectively, the Secretary shall 
compute a State allotment for each State (in-
cluding the District of Columbia and each com-
monwealth and territory) for each such fiscal 
year as follows:
‘‘(i) GROWTH
FACTOR
UPDATE
FOR 
FISCAL YEAR 2009.—For fiscal year 2009, 
the allotment of the State is equal to the 
sum of— 
‘‘(I) the amount of the State al-
lotment under paragraph (1) for fiscal 
year 2008; and 
‘‘(II) the amount of any pay-
ments made to the State under sub-
section (j) for fiscal year 2008, 
multiplied by the allotment increase factor 
under paragraph (5) for fiscal year 2009. 
‘‘(ii) REBASING
IN
FISCAL
YEAR 
2010.—For fiscal year 2010, the allotment 
of the State is equal to the Federal pay-
ments to the State that are attributable to 
(and countable towards) the total amount 
of allotments available under this section 
to the State in fiscal year 2009 (including 
payments made to the State under sub-
section (j) for fiscal year 2009 as well as 
amounts redistributed to the State in fiscal 
year 2009), multiplied by the allotment in-
crease factor under paragraph (5) for fis-
cal year 2010.
‘‘(iii) GROWTH FACTOR UPDATE FOR 
FISCAL YEAR 2011.—For fiscal year 2011, 
the allotment of the State is equal to the 
sum of— 
‘‘(I) the amount of the State al-
lotment under clause (ii) for fiscal 
year 2010; and 
‘‘(II) the amount of any pay-
ments made to the State under sub-
section (j) for fiscal year 2010, 
multiplied by the allotment increase factor 
under paragraph (5) for fiscal year 2011. 
‘‘(3) FOR FISCAL YEAR 2012.— 
‘‘(A) FIRST HALF.—Subject to paragraphs 
(4) and (6), from the amount made available 
under subparagraph (A) of paragraph (15) of 
subsection (a) for the semi-annual period de-
scribed in such paragraph, increased by the 
amount of the appropriation for such period 
under section 108 of the Children’s Health In-
surance Program Reauthorization Act of 2007, 
the Secretary shall compute a State allotment 
for each State (including the District of Colum-
bia and each commonwealth and territory) for 
such semi-annual period in an amount equal to
the first half ratio (described in subparagraph 
(D)) of the amount described in subparagraph 
(C). 
‘‘(B) SECOND
HALF.—Subject to para-
graphs (4) and (6), from the amount made 
available under subparagraph (B) of paragraph 
(15) of subsection (a) for the semi-annual pe-
riod described in such paragraph, the Secretary 
shall compute a State allotment for each State 
(including the District of Columbia and each 
commonwealth and territory) for such semi-an-
nual period in an amount equal to the amount 
made available under such subparagraph, multi-
plied by the ratio of— 
‘‘(i) the amount of the allotment to 
such State under subparagraph (A); to 
‘‘(ii) the total of the amount of all of 
the allotments made available under such 
subparagraph. 
‘‘(C) FULL
YEAR
AMOUNT
BASED
ON 
REBASED AMOUNT.—The amount described in 
this subparagraph for a State is equal to the 
Federal payments to the State that are attrib-
utable to (and countable towards) the total 
amount of allotments available under this sec-
tion to the State in fiscal year 2011 (including 
payments made to the State under subsection 
(j) for fiscal year 2011 as well as amounts re-
distributed to the State in fiscal year 2011), 
multiplied by the allotment increase factor 
under paragraph (5) for fiscal year 2012. 
‘‘(D) FIRST HALF RATIO.—The first half 
ratio described in this subparagraph is the ratio 
of— 
‘‘(i) the sum of— 
‘‘(I) the amount made available 
under subsection (a)(15)(A); and 
‘‘(II) the amount of the appro-
priation for such period under section 
108 of the Children’s Health Insur-
ance Program Reauthorization Act of 
2007; to 
‘‘(ii) the sum of the— 
‘‘(I) amount described in clause 
(i); and 
‘‘(II) the amount made available 
under subsection (a)(15)(B). 
‘‘(4) PRORATION RULE.—If, after the applica-
tion of this subsection without regard to this para-
graph, the sum of the allotments determined under
paragraph (1), (2), or (3) for a fiscal year (or, in 
the case of fiscal year 2012, for a semi-annual pe-
riod in such fiscal year) exceeds the amount avail-
able under subsection (a) for such fiscal year or pe-
riod, the Secretary shall reduce each allotment for 
any State under such paragraph for such fiscal year 
or period on a proportional basis. 
‘‘(5) ALLOTMENT INCREASE FACTOR.—The al-
lotment increase factor under this paragraph for a 
fiscal year is equal to the product of the following: 
‘‘(A) PER CAPITA HEALTH CARE GROWTH 
FACTOR.—1 plus the percentage increase in the 
projected per capita amount of National Health 
Expenditures from the calendar year in which 
the previous fiscal year ends to the calendar 
year in which the fiscal year involved ends, as 
most recently published by the Secretary before 
the beginning of the fiscal year. 
‘‘(B) CHILD
POPULATION
GROWTH
FAC-
TOR.—1 plus the percentage increase (if any) in 
the population of children in the State from 
July 1 in the previous fiscal year to July 1 in 
the fiscal year involved, as determined by the 
Secretary based on the most recent published 
estimates of the Bureau of the Census before
the beginning of the fiscal year involved, plus 1 
percentage point. 
‘‘(6) INCREASE
IN
ALLOTMENT
TO
ACCOUNT 
FOR APPROVED PROGRAM EXPANSIONS.—In the case 
of one of the 50 States or the District of Columbia 
that— 
‘‘(A) has submitted to the Secretary, and 
has approved by the Secretary, a State plan 
amendment or waiver request relating to an ex-
pansion of eligibility for children or benefits 
under this title that becomes effective for a fis-
cal year (beginning with fiscal year 2009 and 
ending with fiscal year 2012); and 
‘‘(B) has submitted to the Secretary, be-
fore the August 31 preceding the beginning of 
the fiscal year, a request for an expansion allot-
ment adjustment under this paragraph for such 
fiscal year that specifies— 
‘‘(i) the additional expenditures that 
are attributable to the eligibility or benefit 
expansion provided under the amendment 
or waiver described in subparagraph (A), 
as certified by the State and submitted to 
the Secretary by not later than August 31
preceding the beginning of the fiscal year; 
and 
‘‘(ii) the extent to which such addi-
tional expenditures are projected to exceed 
the allotment of the State or District for 
the year, 
subject to paragraph (4), the amount of the allot-
ment of the State or District under this subsection 
for such fiscal year shall be increased by the excess 
amount described in subparagraph (B)(i). A State or 
District may only obtain an increase under this 
paragraph for an allotment for fiscal year 2009 or 
fiscal year 2011. 
‘‘(7) AVAILABILITY OF AMOUNTS FOR SEMI-AN-
NUAL PERIODS IN FISCAL YEAR 2012.—Each semi- 
annual allotment made under paragraph (3) for a 
period in fiscal year 2012 shall remain available for 
expenditure under this title for periods after the end 
of such fiscal year in the same manner as if the al-
lotment had been made available for the entire fiscal 
year.’’. 
SEC. 103. CHILD ENROLLMENT CONTINGENCY FUND. 
Section 2104 (42 U.S.C. 1397dd), as amended by 
section 102, is amended by adding at the end the following 
new subsection:
‘‘(j) CHILD ENROLLMENT CONTINGENCY FUND.— 
‘‘(1) ESTABLISHMENT.—There is hereby estab-
lished in the Treasury of the United States a fund 
which shall be known as the ‘Child Enrollment Con-
tingency Fund’ (in this subsection referred to as the 
‘Fund’). Amounts in the Fund shall be available 
without further appropriations for payments under 
this subsection. 
‘‘(2) DEPOSITS INTO FUND.— 
‘‘(A) INITIAL
AND
SUBSEQUENT
APPRO-
PRIATIONS.—Subject to subparagraphs (B) and 
(D), out of any money in the Treasury of the 
United States not otherwise appropriated, there 
are appropriated to the Fund— 
‘‘(i) for fiscal year 2008, an amount 
equal to 20 percent of the amount made 
available under paragraph (11) of sub-
section (a) for the fiscal year; and 
‘‘(ii) for each of fiscal years 2009 
through 2011 (and for each of the semi- 
annual allotment periods for fiscal year 
2012), such sums as are necessary for 
making payments to eligible States for 
such fiscal year or period, but not in excess
of the aggregate cap described in subpara-
graph (B). 
‘‘(B) AGGREGATE CAP.—The total amount 
available for payment from the Fund for each 
of fiscal years 2009 through 2011 (and for each 
of the semi-annual allotment periods for fiscal 
year 2012), taking into account deposits made 
under subparagraph (C), shall not exceed 20 
percent of the amount made available under 
subsection (a) for the fiscal year or period. 
‘‘(C) INVESTMENT
OF
FUND.—The Sec-
retary of the Treasury shall invest, in interest 
bearing securities of the United States, such 
currently available portions of the Fund as are 
not immediately required for payments from the 
Fund. The income derived from these invest-
ments constitutes a part of the Fund. 
‘‘(D) AVAILABILITY
OF
EXCESS
FUNDS 
FOR
PERFORMANCE
BONUSES.—Any amounts 
in excess of the aggregate cap described in sub-
paragraph (B) for a fiscal year or period shall 
be made available for purposes of carrying out 
section 2105(a)(3) for any succeeding fiscal 
year and the Secretary of the Treasury shall re-
duce the amount in the Fund by the amount so 
made available. 
‘‘(3) CHILD ENROLLMENT CONTINGENCY FUND 
PAYMENTS.— 
‘‘(A) IN GENERAL.—If a State’s expendi-
tures under this title in fiscal year 2008, fiscal 
year 2009, fiscal year 2010, fiscal year 2011, or 
a semi-annual allotment period for fiscal year 
2012, exceed the total amount of allotments 
available under this section to the State in the 
fiscal year or period (determined without regard 
to any redistribution it receives under sub-
section (f) that is available for expenditure dur-
ing such fiscal year or period, but including any 
carryover from a previous fiscal year) and if the 
average monthly unduplicated number of chil-
dren enrolled under the State plan under this 
title (including children receiving health care 
coverage through funds under this title pursu-
ant to a waiver under section 1115) during 
such fiscal year or period exceeds its target av-
erage number of such enrollees (as determined 
under subparagraph (B)) for that fiscal year or 
period, subject to subparagraph (D), the Sec-
children who do not have health insurance cov-
erage in the State. 
‘‘(B) AMOUNT FOR ABOVE BASELINE MED-
ICAID CHILD ENROLLMENT COSTS.—Subject to 
subparagraph (E), the amount described in this 
subparagraph for a State for a fiscal year is 
equal to the sum of the following amounts: 
‘‘(i) FIRST
TIER
ABOVE
BASELINE 
MEDICAID ENROLLEES.—An amount equal 
to the number of first tier above baseline 
child enrollees (as determined under sub-
paragraph (C)(i)) under title XIX for the 
State and fiscal year, multiplied by 15 per-
cent of the projected per capita State Med-
icaid expenditures (as determined under 
subparagraph (D)) for the State and fiscal 
year under title XIX. 
‘‘(ii) SECOND TIER ABOVE BASELINE 
MEDICAID ENROLLEES.—An amount equal 
to the number of second tier above baseline 
child enrollees (as determined under sub-
paragraph (C)(ii)) under title XIX for the 
State and fiscal year, multiplied by 62.5 
percent of the projected per capita State 
Medicaid 
expenditures 
(as 
determined
under subparagraph (D)) for the State and 
fiscal year under title XIX. 
‘‘(C) NUMBER OF FIRST AND SECOND TIER 
ABOVE BASELINE CHILD ENROLLEES; BASELINE 
NUMBER OF CHILD ENROLLEES.—For purposes 
of this paragraph: 
‘‘(i) FIRST
TIER
ABOVE
BASELINE 
CHILD ENROLLEES.—The number of first 
tier above baseline child enrollees for a 
State for a fiscal year under title XIX is 
equal to the number (if any, as determined 
by the Secretary) by which— 
‘‘(I) 
the 
monthly 
average 
unduplicated number of qualifying 
children (as defined in subparagraph 
(F)) enrolled during the fiscal year 
under the State plan under title XIX; 
exceeds 
‘‘(II) the baseline number of en-
rollees described in clause (iii) for the 
State and fiscal year under title XIX; 
but not to exceed 3 percent of the baseline 
number of enrollees described in subclause 
(II).
‘‘(ii) SECOND TIER ABOVE BASELINE 
CHILD ENROLLEES.—The number of sec-
ond tier above baseline child enrollees for 
a State for a fiscal year under title XIX is 
equal to the number (if any, as determined 
by the Secretary) by which— 
‘‘(I) 
the 
monthly 
average 
unduplicated number of qualifying 
children (as defined in subparagraph 
(F)) enrolled during the fiscal year 
under title XIX as described in clause 
(i)(I); exceeds 
‘‘(II) the sum of the baseline 
number of child enrollees described in 
clause (iii) for the State and fiscal 
year title XIX, as described in clause 
(i)(II), and the maximum number of 
first tier above baseline child enrollees 
for the State and fiscal year under 
title XIX, as determined under clause 
(i). 
‘‘(iii) BASELINE
NUMBER
OF
CHILD 
ENROLLEES.—Subject 
to 
subparagraph 
(H), the baseline number of child enrollees 
for a State under title XIX—
‘‘(I) for fiscal year 2008 is equal 
to the monthly average unduplicated 
number of qualifying children enrolled 
in the State plan under title XIX dur-
ing fiscal year 2007 increased by the 
population growth for children in that 
State for the year ending on June 30, 
2006 (as estimated by the Bureau of 
the Census) plus 1 percentage point; 
or 
‘‘(II) for a subsequent fiscal year 
is equal to the baseline number of 
child enrollees for the State for the 
previous fiscal year under title XIX, 
increased by the population growth 
for children in that State for the year 
ending on June 30 before the begin-
ning of the fiscal year (as estimated 
by the Bureau of the Census) plus 1 
percentage point. 
‘‘(D) PROJECTED PER CAPITA STATE MED-
ICAID EXPENDITURES.—For purposes of sub-
paragraph (B), the projected per capita State 
Medicaid expenditures for a State and fiscal 
year under title XIX is equal to the average per
making payments under this paragraph, to 
be available until expended. 
‘‘(ii) 
TRANSFERS.—Notwithstanding 
any other provision of this title, the fol-
lowing amounts shall also be available, 
without fiscal year limitation, for making 
payments under this paragraph: 
‘‘(I) 
UNOBLIGATED
NATIONAL 
ALLOTMENT.— 
‘‘(aa) FISCAL
YEARS
2008 
THROUGH 2011.—As of December 
31 of fiscal year 2008, and as of 
December 31 of each succeeding 
fiscal year through fiscal year 
2011, the portion, if any, of the 
amount appropriated under sub-
section (a) for such fiscal year 
that is unobligated for allotment 
to a State under subsection (i) 
for such fiscal year or set aside 
under subsection (a)(3) or (b)(2) 
of section 2111 for such fiscal 
year. 
‘‘(bb) FIRST HALF OF FIS-
CAL YEAR 2012.—As of December
31 of fiscal year 2012, the por-
tion, if any, of the sum of the 
amounts appropriated under sub-
section (a)(15)(A) and under sec-
tion 108 of the Children’s Health 
Insurance Reauthorization Act of 
2007 for the period beginning on 
October 1, 2011, and ending on 
March 31, 2012, that is unobli-
gated for allotment to a State 
under subsection (i) for such fis-
cal year or set aside under sub-
section (b)(2) of section 2111 for 
such fiscal year. 
‘‘(cc) SECOND HALF OF FIS-
CAL YEAR 2012.—As of June 30 
of fiscal year 2012, the portion, 
if any, of the amount appro-
priated 
under 
subsection 
(a)(15)(B) for the period begin-
ning on April 1, 2012, and end-
ing on September 30, 2012, that 
is unobligated for allotment to a 
State under subsection (i) for 
such fiscal year or set aside
under subsection (b)(2) of section 
2111 for such fiscal year. 
‘‘(II) 
UNEXPENDED
ALLOT-
MENTS NOT USED FOR REDISTRIBU-
TION.—As of November 15 of each of 
fiscal years 2009 through 2012, the 
total amount of allotments made to 
States under section 2104 for the sec-
ond preceding fiscal year (third pre-
ceding fiscal year in the case of the 
fiscal year 2006 and 2007 allotments) 
that is not expended or redistributed 
under section 2104(f) during the pe-
riod in which such allotments are 
available for obligation. 
‘‘(III) EXCESS
CHILD
ENROLL-
MENT
CONTINGENCY
FUNDS.—As of 
October 1 of each of fiscal years 2009 
through 2012, any amount in excess 
of the aggregate cap applicable to the 
Child Enrollment Contingency Fund 
for the fiscal year under section 
2104(j). 
‘‘(iii) PROPORTIONAL REDUCTION.—If 
the sum of the amounts otherwise payable
under this paragraph for a fiscal year ex-
ceeds the amount available for the fiscal 
year under this subparagraph, the amount 
to be paid under this paragraph to each 
State shall be reduced proportionally. 
‘‘(F) QUALIFYING CHILDREN DEFINED.— 
For purposes of this subsection, the term 
‘qualifying children’ means children who meet 
the eligibility criteria (including income, cat-
egorical eligibility, age, and immigration status 
criteria) in effect as of July 1, 2007, for enroll-
ment under title XIX, taking into account cri-
teria applied as of such date under title XIX 
pursuant to a waiver under section 1115. 
‘‘(G) APPLICATION
TO
COMMONWEALTHS 
AND TERRITORIES.—The provisions of subpara-
graph (G) of section 2104(j)(3) shall apply with 
respect to payment under this paragraph in the 
same manner as such provisions apply to pay-
ment under such section. 
‘‘(H) APPLICATION TO STATES THAT IM-
PLEMENT A MEDICAID EXPANSION FOR CHIL-
DREN AFTER FISCAL YEAR 2007.—In the case of 
a State that provides coverage under paragraph 
(1) or (2) of section 115(b) of the Children’s
Health Insurance Program Reauthorization Act 
of 2007 for any fiscal year after fiscal year 
2007— 
‘‘(i) any child enrolled in the State 
plan under title XIX through the applica-
tion of such an election shall be dis-
regarded from the determination for the 
State of the monthly average unduplicated 
number of qualifying children enrolled in 
such plan during the first 3 fiscal years in 
which such an election is in effect; and 
‘‘(ii) in determining the baseline num-
ber of child enrollees for the State for any 
fiscal year subsequent to such first 3 fiscal 
years, the baseline number of child enroll-
ees for the State under title XIX for the 
third of such fiscal years shall be the 
monthly average unduplicated number of 
qualifying children enrolled in the State 
plan under title XIX for such third fiscal 
year. 
‘‘(4) ENROLLMENT
AND
RETENTION
PROVI-
SIONS FOR CHILDREN.—For purposes of paragraph 
(3)(A), a State meets the condition of this para-
graph for a fiscal year if it is implementing at least
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), amounts allotted to a State pursuant to 
this section— 
‘‘(A) for each of fiscal years 1998 through 
2007, shall remain available for expenditure by 
the State through the end of the second suc-
ceeding fiscal year; and 
‘‘(B) for fiscal year 2008 and each fiscal 
year thereafter, shall remain available for ex-
penditure by the State through the end of the 
succeeding fiscal year. 
‘‘(2) AVAILABILITY
OF
AMOUNTS
REDISTRIB-
UTED.—Amounts redistributed to a State under sub-
section (f) shall be available for expenditure by the 
State through the end of the fiscal year in which 
they are redistributed.’’. 
SEC. 106. MAKING PERMANENT REDISTRIBUTION OF UN-
USED FISCAL YEAR 2005 ALLOTMENTS TO AD-
DRESS STATE FUNDING SHORTFALLS; CON-
FORMING EXTENSION OF QUALIFYING STATE 
AUTHORITY; REDISTRIBUTION OF UNUSED 
ALLOTMENTS 
FOR 
SUBSEQUENT 
FISCAL 
YEARS. 
(a) REDISTRIBUTION
OF UNUSED FISCAL YEAR 
2005 ALLOTMENTS; EXTENSION OF QUALIFYING STATE
AUTHORITY.—Section 136(e) of Public Law 110–92 is 
amended to read as follows: 
‘‘(e) APPLICABILITY.— 
‘‘(1) REDISTRIBUTION
OF
UNUSED
FISCAL 
YEAR 2005 ALLOTMENTS.—The amendment made by 
subsection (c) shall apply without regard to any limi-
tation under section 106. 
‘‘(2) EXTENSION
OF
QUALIFYING
STATE
AU-
THORITY.—The amendment made by subsection (d) 
shall be in effect through the date of the enactment 
of the Children’s Health Insurance Program Reau-
thorization Act of 2007.’’. 
(b) REDISTRIBUTIONS
OF UNUSED ALLOTMENTS 
FOR FISCAL YEARS AFTER FISCAL YEAR 2005.—Section 
2104(f) (42 U.S.C. 1397dd(f)) is amended— 
(1) by striking ‘‘The Secretary’’ and inserting 
the following: 
‘‘(1) IN GENERAL.—The Secretary’’; 
(2) by striking ‘‘States that have fully expended 
the amount of their allotments under this section.’’ 
and inserting ‘‘States that the Secretary determines 
with respect to the fiscal year for which unused al-
lotments are available for redistribution under this 
subsection, are shortfall States described in para-
graph (2) for such fiscal year, but not to exceed the
amount of the shortfall described in paragraph 
(2)(A) for each such State (as may be adjusted 
under paragraph (2)(C)).’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(2) SHORTFALL STATES DESCRIBED.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), with respect to a fiscal year, a short-
fall State described in this subparagraph is a 
State with a State child health plan approved 
under this title for which the Secretary esti-
mates on the basis of the most recent data 
available to the Secretary, that the projected ex-
penditures under such plan for the State for the 
fiscal year will exceed the sum of— 
‘‘(i) the amount of the State’s allot-
ments for any preceding fiscal years that 
remains available for expenditure and that 
will not be expended by the end of the im-
mediately preceding fiscal year; 
‘‘(ii) the amount (if any) of the child 
enrollment 
contingency 
fund 
payment 
under subsection (j); and 
‘‘(iii) the amount of the State’s allot-
ment for the fiscal year.
‘‘(B) PRORATION RULE.—If the amounts 
available for redistribution under paragraph (1) 
for a fiscal year are less than the total amounts 
of the estimated shortfalls determined for the 
year under subparagraph (A), the amount to be 
redistributed under such paragraph for each 
shortfall State shall be reduced proportionally. 
‘‘(C) RETROSPECTIVE ADJUSTMENT.—The 
Secretary may adjust the estimates and deter-
minations made under paragraph (1) and this 
paragraph with respect to a fiscal year as nec-
essary on the basis of the amounts reported by 
States not later than November 30 of the suc-
ceeding fiscal year, as approved by the Sec-
retary.’’. 
SEC. 107. OPTION FOR QUALIFYING STATES TO RECEIVE 
THE ENHANCED PORTION OF THE CHIP 
MATCHING RATE FOR MEDICAID COVERAGE 
OF CERTAIN CHILDREN. 
Section 2105(g) (42 U.S.C. 1397ee(g)) is amended— 
(1) in paragraph (1)(A), as amended by section 
136(d) of Public Law 110–92— 
(A) by inserting ‘‘subject to paragraph 
(4),’’ after ‘‘Notwithstanding any other provi-
sion of law,’’; and
(B) by striking ‘‘2007, or 2008’’ and in-
serting ‘‘or 2007’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(4) OPTION
FOR
ALLOTMENTS
FOR
FISCAL 
YEARS 2008 THROUGH 2012.— 
‘‘(A) PAYMENT OF ENHANCED PORTION OF 
MATCHING
RATE
FOR
CERTAIN
EXPENDI-
TURES.—In the case of expenditures described 
in subparagraph (B), a qualifying State (as de-
fined in paragraph (2)) may elect to be paid 
from the State’s allotment made under section 
2104 for any of fiscal years 2008 through 2012 
(insofar as the allotment is available to the 
State under subsections (e) and (i) of such sec-
tion) an amount each quarter equal to the addi-
tional amount that would have been paid to the 
State under title XIX with respect to such ex-
penditures if the enhanced FMAP (as deter-
mined under subsection (b)) had been sub-
stituted for the Federal medical assistance per-
centage (as defined in section 1905(b)). 
‘‘(B) EXPENDITURES
DESCRIBED.—For 
purposes of subparagraph (A), the expenditures 
described in this subparagraph are expenditures
made after the date of the enactment of this 
paragraph and during the period in which funds 
are available to the qualifying State for use 
under subparagraph (A), for the provision of 
medical assistance to individuals residing in the 
State who are eligible for medical assistance 
under the State plan under title XIX or under 
a waiver of such plan and who have not at-
tained age 19 (or, if a State has so elected 
under the State plan under title XIX, age 20 
or 21), and whose family income equals or ex-
ceeds 133 percent of the poverty line but does 
not exceed the Medicaid applicable income 
level.’’. 
SEC. 108. ONE-TIME APPROPRIATION. 
There is appropriated to the Secretary, out of any 
money in the Treasury not otherwise appropriated, 
$13,700,000,000 to accompany the allotment made for the 
period beginning on October 1, 2011, and ending on 
March 31, 2012, under section 2104(a)(15)(A) of the So-
cial Security Act (42 U.S.C. 1397dd(a)(15)(A)) (as added 
by section 101), to remain available until expended. Such 
amount shall be used to provide allotments to States under 
paragraph (3) of section 2104(i) of the Social Security Act 
(42 U.S.C. 1397dd(i)), as added by section 102, for the
first 6 months of fiscal year 2012 in the same manner 
as allotments are provided under subsection (a)(15)(A) of 
such section 2104 and subject to the same terms and con-
ditions as apply to the allotments provided from such sub-
section (a)(15)(A). 
SEC. 109. IMPROVING FUNDING FOR THE TERRITORIES 
UNDER CHIP AND MEDICAID. 
(a) REMOVAL OF FEDERAL MATCHING PAYMENTS 
FOR DATA REPORTING SYSTEMS FROM THE OVERALL 
LIMIT ON PAYMENTS TO TERRITORIES UNDER TITLE 
XIX.—Section 1108(g) (42 U.S.C. 1308(g)) is amended 
by adding at the end the following new paragraph: 
‘‘(4) EXCLUSION OF CERTAIN EXPENDITURES 
FROM
PAYMENT
LIMITS.—With respect to fiscal 
years beginning with fiscal year 2008, if Puerto 
Rico, the Virgin Islands, Guam, the Northern Mar-
iana Islands, or American Samoa qualify for a pay-
ment under subparagraph (A)(i), (B), or (F) of sec-
tion 1903(a)(3) for a calendar quarter of such fiscal 
year, the payment shall not be taken into account in 
applying subsection (f) (as increased in accordance 
with paragraphs (1), (2), and (3) of this subsection) 
to such commonwealth or territory for such fiscal 
year.’’.
(b) GAO STUDY AND REPORT.—Not later than Sep-
tember 30, 2009, the Comptroller General of the United 
States shall submit a report to the Committee on Finance 
of the Senate and the Committee on Energy and Com-
merce of the House of Representatives regarding Federal 
funding under Medicaid and CHIP for Puerto Rico, the 
United States Virgin Islands, Guam, American Samoa, 
and the Northern Mariana Islands. The report shall in-
clude the following: 
(1) An analysis of all relevant factors with re-
spect to— 
(A) eligible Medicaid and CHIP popu-
lations in such commonwealths and territories; 
(B) historical and projected spending needs 
of such commonwealths and territories and the 
ability of capped funding streams to respond to 
those spending needs; 
(C) the extent to which Federal poverty 
guidelines are used by such commonwealths and 
territories to determine Medicaid and CHIP eli-
gibility; and 
(D) the extent to which such common-
wealths and territories participate in data col-
lection and reporting related to Medicaid and 
CHIP, including an analysis of territory partici-
pation in the Current Population Survey versus 
the American Community Survey. 
(2) Recommendations regarding methods for 
the collection and reporting of reliable data regard-
ing the enrollment under Medicaid and CHIP of 
children in such commonwealths and territories. 
(3) Recommendations for improving Federal 
funding under Medicaid and CHIP for such com-
monwealths and territories. 
Subtitle B—Focus on Low-Income 
Children and Pregnant Women 
SEC. 111. STATE OPTION TO COVER LOW-INCOME PREG-
NANT WOMEN UNDER CHIP THROUGH A 
STATE PLAN AMENDMENT. 
(a) IN GENERAL.—Title XXI (42 U.S.C. 1397aa et 
seq.), as amended by section 112(a), is amended by adding 
at the end the following new section: 
‘‘SEC. 2112. OPTIONAL COVERAGE OF TARGETED LOW-IN-
COME PREGNANT WOMEN THROUGH A STATE 
PLAN AMENDMENT. 
‘‘(a) IN GENERAL.—Subject to the succeeding provi-
sions of this section, a State may elect through an amend-
ment to its State child health plan under section 2102 to 
provide pregnancy-related assistance under such plan for 
targeted low-income pregnant women.
‘‘(b) CONDITIONS.—A State may only elect the option 
under subsection (a) if the following conditions are satis-
fied: 
‘‘(1) MINIMUM
INCOME
ELIGIBILITY
LEVELS 
FOR PREGNANT WOMEN AND CHILDREN.—The State 
has established an income eligibility level— 
‘‘(A) for pregnant women under subsection 
(a)(10)(A)(i)(III), 
(a)(10)(A)(i)(IV), 
or 
(l)(1)(A) of section 1902 that is at least 185 
percent (or such higher percent as the State 
has in effect with regard to pregnant women 
under this title) of the poverty line applicable to 
a family of the size involved, but in no case 
lower than the percent in effect under any such 
subsection as of July 1, 2007; and 
‘‘(B) for children under 19 years of age 
under this title (or title XIX) that is at least 
200 percent of the poverty line applicable to a 
family of the size involved. 
‘‘(2) NO CHIP INCOME ELIGIBILITY LEVEL FOR 
PREGNANT WOMEN LOWER THAN THE STATE’S MED-
ICAID LEVEL.—The State does not apply an effective 
income level for pregnant women under the State 
plan amendment that is lower than the effective in-
come level (expressed as a percent of the poverty line
and considering applicable income disregards) speci-
fied 
under 
subsection 
(a)(10)(A)(i)(III), 
(a)(10)(A)(i)(IV), or (l)(1)(A) of section 1902, on 
the date of enactment of this paragraph to be eligi-
ble for medical assistance as a pregnant woman. 
‘‘(3) NO COVERAGE FOR HIGHER INCOME PREG-
NANT WOMEN WITHOUT COVERING LOWER INCOME 
PREGNANT
WOMEN.—The State does not provide 
coverage for pregnant women with higher family in-
come without covering pregnant women with a lower 
family income. 
‘‘(4) APPLICATION
OF
REQUIREMENTS
FOR 
COVERAGE OF TARGETED LOW-INCOME CHILDREN.— 
The State provides pregnancy-related assistance for 
targeted low-income pregnant women in the same 
manner, and subject to the same requirements, as 
the State provides child health assistance for tar-
geted low-income children under the State child 
health plan, and in addition to providing child health 
assistance for such women. 
‘‘(5) NO PREEXISTING CONDITION EXCLUSION 
OR WAITING PERIOD.—The State does not apply any 
exclusion of benefits for pregnancy-related assistance 
based on any preexisting condition or any waiting 
period (including any waiting period imposed to
(2) by striking subparagraph (B) and inserting 
the following new subparagraph: 
‘‘(B) [reserved]’’. 
(b) AMENDMENTS TO MEDICAID.— 
(1) ELIGIBILITY
OF
A
NEWBORN.—Section 
1902(e)(4) (42 U.S.C. 1396a(e)(4)) is amended in 
the first sentence by striking ‘‘so long as the child 
is a member of the woman’s household and the 
woman remains (or would remain if pregnant) eligi-
ble for such assistance’’. 
(2) APPLICATION OF QUALIFIED ENTITIES TO 
PRESUMPTIVE ELIGIBILITY FOR PREGNANT WOMEN 
UNDER
MEDICAID.—Section 1920(b) (42 U.S.C. 
1396r–1(b)) is amended by adding after paragraph 
(2) the following flush sentence: 
‘‘The term ‘qualified provider’ also includes a qualified en-
tity, as defined in section 1920A(b)(3).’’. 
SEC. 114. DENIAL OF PAYMENTS FOR COVERAGE OF CHIL-
DREN WITH EFFECTIVE FAMILY INCOME 
THAT EXCEEDS 300 PERCENT OF THE POV-
ERTY LINE. 
(a) IN
GENERAL.—Section 2105(c) (42 U.S.C. 
1397ee(c)) is amended by adding at the end the following 
new paragraph:
103 
dren’s health insurance programs established under 
titles XIX and XXI, the Secretary shall encourage 
the State to take steps to provide for enrollment on 
or near the reservation. Such steps may include out-
reach efforts such as the outstationing of eligibility 
workers, entering into agreements with the Indian 
Health Service, Indian Tribes, Tribal Organizations, 
and Urban Indian Organizations to provide out-
reach, education regarding eligibility and benefits, 
enrollment, and translation services when such serv-
ices are appropriate. 
‘‘(2) CONSTRUCTION.—Nothing in paragraph 
(1) shall be construed as affecting arrangements en-
tered into between States and the Indian Health 
Service, Indian Tribes, Tribal Organizations, or 
Urban Indian Organizations for such Service, 
Tribes, or Organizations to conduct administrative 
activities under such titles. 
‘‘(b) REQUIREMENT
TO
FACILITATE
COOPERA-
TION.—The Secretary, acting through the Centers for 
Medicare & Medicaid Services, shall take such steps as are 
necessary to facilitate cooperation with, and agreements 
between, States and the Indian Health Service, Indian 
Tribes, Tribal Organizations, or Urban Indian Organiza-
tions with respect to the provision of health care items