pursuant to subsection (d)(4)(C) may not increase 
the cumulative, net Federal budget deficit during the 
multi-year operation of all the State applications 
contained therein, taking into account such applica-
tions’ impact on Federal mandatory and discre-
tionary spending, Federal revenue, and Federal tax 
expenditures. 
(f) FUNDING.— 
(1) IN GENERAL.—The Secretary shall provide 
a grant to a State that has an application approved 
under subsection (e) to enable such State to carry 
out an innovative State health program in the State, 
to the extent that such a grant is included in the 
recommendation of the Commission. 
(2) AMOUNT
OF
GRANT.—The amount of a 
grant provided to a State under paragraph (1) shall 
be determined based upon the recommendations of 
the Commission, subject to the amount appropriated 
under subsection (k). 
(3) PERFORMANCE-BASED
FUNDING
ALLOCA-
TION.—In awarding grants under paragraph (1), the 
Commission shall direct the Secretary to— 
(A) fund a balanced diversity of ap-
proaches as provided for by the Commission in 
subsection (c)(1)(B); and 
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(B) link allocations to the State to the 
meeting of the goals and performance measures 
relating to health care coverage and health care 
costs established under this Act through the 
State project application process. 
(4) REPORT.—One year prior to the end of the 
5-year period beginning on the date on which the 
first State begins to implement a plan approved 
under subsection (e), the Commission shall prepare 
and submit to the appropriate committees of Con-
gress, a report on the progress made by States in 
meeting the goals of expanded coverage and cost 
containment through performance measures estab-
lished during the 5-year period of the State plan. 
Such report may contain the recommendation of the 
Commission concerning any future action that Con-
gress should take concerning health care reform, in-
cluding whether or not to extend the program estab-
lished under this subsection. 
(g) MONITORING AND EVALUATION.— 
(1) ANNUAL REPORTS AND PARTICIPATION BY 
STATES.—Each State that has received a program 
approval shall— 
(A) submit to the Commission an annual 
report based on the period representing the re-
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spective State’s fiscal year, detailing compliance 
with the requirements established by the Com-
mission and the Secretary in the approval and 
in this section; and 
(B) participate in the annual meeting 
under subsection (c)(4)(C). 
(2) EVALUATIONS BY COMMISSION.—The Com-
mission shall prepare and submit to the Congress 
annual reports that shall contain— 
(A) a description of the effects of the re-
forms undertaken in States receiving approvals 
under this section; 
(B) a description of the recommendations 
of the Commission and actions taken based on 
these recommendations; 
(C) an independent evaluation of the effec-
tiveness of such reforms in— 
(i) expanding health care coverage for 
State residents; and 
(ii) reducing or containing health care 
costs in the States, 
as well as other relevant or significant findings; 
(D) recommendations regarding the advis-
ability of increasing Federal financial assistance 
for State ongoing or future health program ini-
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tiatives, including the amount and source of 
such assistance; and 
(E) as required by the Commission or the 
Secretary under this section, a periodic, inde-
pendent evaluation of the program. 
(h) NONCOMPLIANCE.— 
(1) CORRECTIVE ACTION PLANS.—If a State is 
not in compliance with a requirement of this section, 
the Commission, on recommendation of the Sec-
retary, shall develop a corrective action plan for such 
State. 
(2) TERMINATION.—The Commission, on rec-
ommendation of the Secretary, may revoke any pro-
gram granted under this section. Such decisions 
shall be subject to a petition for reconsideration and 
appeal pursuant to regulations established by the 
Secretary. 
(i) RELATIONSHIP TO FEDERAL PROGRAMS.— 
(1) IN GENERAL.—Nothing in this Act, or in 
section 1115 of the Social Security Act (42 U.S.C. 
1315) shall be construed as authorizing the Sec-
retary, the Commission, a State, or any other person 
or entity to alter or affect in any way the provisions 
of title XIX of such Act (42 U.S.C. 1396 et seq.) 
or the regulations implementing such title. 
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(2) MAINTENANCE OF EFFORT.—No payment 
may be made under subsection (f)(1) if the State 
adopts criteria for benefits or criteria for standards 
and methodologies for purposes of determining an 
individual’s eligibility for medical assistance under 
the State plan under title XIX that are more restric-
tive than those required under Federal law and ap-
plied as of the date of enactment of this Act. 
(j) MISCELLANEOUS PROVISIONS.— 
(1) 
APPLICATION
OF
CERTAIN
REQUIRE-
MENTS.— 
(A) RESTRICTION
ON
APPLICATION
OF 
PREEXISTING CONDITION EXCLUSIONS.— 
(i) IN GENERAL.—Subject to subpara-
graph (B), a State shall not permit the im-
position of any preexisting condition exclu-
sion for covered benefits under a program 
or project under this section. 
(ii) GROUP
HEALTH
PLANS
AND 
GROUP HEALTH INSURANCE COVERAGE.— 
If the State program or project provides 
for benefits through payment for, or a con-
tract with, a group health plan or group 
health insurance coverage, the program or 
project may permit the imposition of a pre-
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existing condition exclusion but only inso-
far and to the extent that such exclusion is 
permitted under the applicable provisions 
of part 7 of subtitle B of title I of the Em-
ployee Retirement Income Security Act of 
1974 and title XXVII of the Public Health 
Service Act. 
(B) COMPLIANCE WITH OTHER REQUIRE-
MENTS.—Coverage offered under the program 
or project shall comply with the requirements of 
subpart 2 of part A of title XXVII of the Public 
Health Service Act insofar as such require-
ments apply with respect to a health insurance 
issuer that offers group health insurance cov-
erage. 
(2) 
PREVENTION
OF
DUPLICATIVE
PAY-
MENTS.— 
(A) OTHER HEALTH PLANS.—No payment 
shall be made to a State under subsection (f)(1) 
for expenditures for health assistance provided 
for an individual to the extent that a private in-
surer (as defined by the Secretary by regulation 
and including a group health plan (as defined 
in section 607(1) of the Employee Retirement 
Income Security Act of 1974), a service benefit 
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plan, and a health maintenance organization) 
would have been obligated to provide such as-
sistance but for a provision of its insurance con-
tract which has the effect of limiting or exclud-
ing such obligation because the individual is eli-
gible for or is provided health assistance under 
the plan. 
(B) OTHER
FEDERAL
GOVERNMENTAL 
PROGRAMS.—Except as provided in any other 
provision of law, no payment shall be made to 
a State under subsection (f)(1) for expenditures 
for health assistance provided for an individual 
to the extent that payment has been made or 
can reasonably be expected to be made prompt-
ly (as determined in accordance with regula-
tions) under any other federally operated or fi-
nanced health care insurance program. For 
purposes of this paragraph, rules similar to the 
rules 
for 
overpayments 
under 
section 
1903(d)(2) of the Social Security Act shall 
apply. 
(3) APPLICATION OF CERTAIN GENERAL PROVI-
SIONS.—The following provisions of the Social Secu-
rity Act shall apply to States under subsection (f)(1) 
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in the same manner as they apply to a State under 
such title XIX: 
(A) TITLE XIX PROVISIONS.— 
(i) Section 1902(a)(4)(C) (relating to 
conflict of interest standards). 
(ii) Paragraphs (2), (16), and (17) of 
section 1903(i) (relating to limitations on 
payment). 
(iii) Section 1903(w) (relating to limi-
tations on provider taxes and donations). 
(iv) Section 1920A (relating to pre-
sumptive eligibility for children). 
(B) TITLE XI PROVISIONS.— 
(i) Section 1116 (relating to adminis-
trative and judicial review), but only inso-
far as consistent with this title. 
(ii) Section 1124 (relating to disclo-
sure of ownership and related informa-
tion). 
(iii) Section 1126 (relating to disclo-
sure of information about certain convicted 
individuals). 
(iv) Section 1128A (relating to civil 
monetary penalties). 
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(v) Section 1128B(d) (relating to 
criminal penalties for certain additional 
charges). 
(vi) Section 1132 (relating to periods 
within which claims must be filed). 
(4) RELATION TO HIPAA.—Health benefits cov-
erage provided under a State program or project 
under this section shall be treated as creditable cov-
erage for purposes of part 7 of subtitle B of title I 
of the Employee Retirement Income Security Act of 
1974, title XXVII of the Public Health Service Act, 
and subtitle K of the Internal Revenue Code of 
1986. 
(k) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section, 
such sums as may be necessary in each fiscal year. 
Amounts appropriated for a fiscal year under this sub-
section and not expended may be used in subsequent fiscal 
years to carry out this section. 
Æ 
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