(6) PATIENT-CENTERED MEDICAL HOME QUALI-
FICATION.—The PC–MH qualification is a process 
whereby an interested practice will voluntarily sub-
mit information to an objective external private-sec-
tor entity that is recognized and deemed by the state 
or by the Secretary to make the determination as to 
whether the practice has the attributes of a qualified 
PC–MH based on standards the Secretary shall es-
tablish. 
(c) REPORT AND EVALUATION.—States shall submit 
an annual report to the Secretary that describes initiatives 
it has taken to encourage the provision of care through 
a patient-centered medical home as described in this sec-
tion. 
TITLE III—INCREASING HEALTH 
CARE COVERAGE 
Subtitle A—Medicaid and SCHIP 
SEC. 301. STATE OPTION TO OFFER MEDICAID COVERAGE 
BASED ON NEED. 
(a) STATE OPTION.—Section 1902(a)(10)(A)(ii) of 
the Social Security Act (42 U.S.C. 1396a) is amended— 
(1) by striking ‘‘or’’ at the end of subclause 
(XVIII); 
(2) by adding ‘‘or’’ at the end of subclause 
(XIX); and 
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(3) by adding at the end the following: 
‘‘(XX) who are not otherwise eli-
gible for medical assistance under this 
title and whose income does not ex-
ceed such income level as the State 
may establish, expressed as a percent-
age (not to exceed 100) of the income 
official poverty line (as defined by the 
Office of Management and Budget, 
and revised annually in accordance 
with section 673(2) of the Omnibus 
Budget Reconciliation Act of 1981) 
applicable to a family of the size in-
volved;’’. 
(b) INCREASED FMAP.—Section 1905 of the Social 
Security Act (42 U.S.C. 1396d) is amended— 
(1) in the first sentence of subsection (b)— 
(A) by striking ‘‘and (4)’’ and inserting 
‘‘(4)’’; and 
(B) by inserting before the period the fol-
lowing: ‘‘, and (5) in the case of a State that 
meets the conditions described in paragraph (1) 
of subsection (y), the Federal medical assist-
ance percentage shall be equal to the need- 
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based enhanced FMAP described in paragraph 
(2) of subsection (y)’’; and 
(2) by adding at the end the following: 
‘‘(y)(1) For purposes of clause (5) of the first sen-
tence of subsection (b), the conditions described in this 
subsection are the following: 
‘‘(A) The State provides medical assistance to 
individuals 
described 
in 
subsection 
(a)(10)(A)(ii)(XX). 
‘‘(B) The State uses streamlined enrollment 
and outreach measures to all individuals described in 
subparagraph (A) including— 
‘‘(i) the same application and retention 
procedures (such as 1-page enrollment forms 
and enrollment by mail) used by the majority of 
State programs under title XXI during the pre-
ceding year; and 
‘‘(ii) outreach efforts proportional in scope 
and reasonably expected effectiveness to those 
employed by the State during a comparable 
stage of implementation of the State’s program 
under title XXI. 
‘‘(C) The State applies eligibility standards and 
methodologies under this title with respect to indi-
viduals residing in the State who have not attained 
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age 65 that are not more restrictive (as determined 
under section 1902(a)(10)(C)(i)(III)) than the 
standards and methodologies that applied under this 
title with respect to such individuals as of July 1, 
2007. 
‘‘(2)(A) For purposes of clause (5) of the first sen-
tence of subsection (b), the need-based enhanced FMAP 
for a State for a fiscal year, is equal to the Federal med-
ical assistance percentage (as defined in the first sentence 
of subsection (b)) for the State increased, subject to sub-
paragraph (B), by such percentage increase as would com-
pensate all States for the additional expenditures that 
would be incurred by all States if the States were to pro-
vide medical assistance to all individuals whose income 
does not exceed 100 percent of the income official poverty 
line (as defined by the Office of Management and Budget, 
and revised annually in accordance with section 673(2) of 
the Omnibus Budget Reconciliation Act of 1981) applica-
ble to a family of the size involved and who are eligible 
for such assistance only on the basis of section 
1902(a)(10)(A)(ii)(XX). 
‘‘(B) In the case of a State that provides medical as-
sistance 
to 
individuals 
described 
in 
section 
1902(a)(10)(A)(ii)(XX) but limits such assistance to indi-
viduals with income at or below a percentage of the income 
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official poverty line (as defined by the Office of Manage-
ment and Budget, and revised annually in accordance with 
section 673(2) of the Omnibus Budget Reconciliation Act 
of 1981) applicable to a family of the size involved that 
is less than 100, the Secretary shall reduce the need-based 
enhanced FMAP otherwise determined for the State under 
subparagraph (A) by a proportion based on the national 
income distribution of all individuals in all States who are 
(regardless of whether such individuals are enrolled under 
this title) eligible for medical assistance only on the basis 
of section 1902(a)(10)(A)(ii)(XX).’’. 
(c) CONFORMING AMENDMENTS.—Section 1905(a) of 
the Social Security Act (42 U.S.C. 1396d(a)) is amended 
in the matter preceding paragraph (1)— 
(1) by striking ‘‘or’’ at the end of clause (xii); 
(2) by adding ‘‘or’’ at the end of clause (xiii); 
and 
(3) by inserting after clause (xiii) the following: 
‘‘(xiv) individuals who are eligible for medical 
assistance 
on 
the 
basis 
of 
section 
1902(a)(10)(A)(ii)(XX);’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section take effect on October 1, 2008, and apply to 
medical assistance provided on or after that date, without 
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