H. R. 3963—89 
process for verifying an applicant’s self-declaration or self-cer-
tification satisfies the requirements for such process applicable 
under regulations promulgated by the Secretary or otherwise 
approved by the Secretary. 
(d) OPTION FOR APPLICATION OF DATA FOR STATES IN FIRST 
APPLICATION CYCLE UNDER THE INTERIM FINAL RULE.—After the 
final rule implementing the PERM requirements in accordance 
with the requirements of subsection (c) is in effect for all States, 
a State for which the PERM requirements were first in effect 
under an interim final rule for fiscal year 2007 may elect to accept 
any payment error rate determined in whole or in part for the 
State on the basis of data for that fiscal year or may elect to 
not have any payment error rate determined on the basis of such 
data and, instead, shall be treated as if fiscal year 2010 were 
the first fiscal year for which the PERM requirements apply to 
the State. 
(e) HARMONIZATION OF MEQC AND PERM.— 
(1) REDUCTION
OF
REDUNDANCIES.—The Secretary shall 
review the Medicaid Eligibility Quality Control (in this sub-
section referred to as the ‘‘MEQC’’) requirements with the 
PERM requirements and coordinate consistent implementation 
of both sets of requirements, while reducing redundancies. 
(2) STATE OPTION TO APPLY PERM DATA.—A State may elect, 
for purposes of determining the erroneous excess payments 
for medical assistance ratio applicable to the State for a fiscal 
year under section 1903(u) of the Social Security Act (42 U.S.C. 
1396b(u)) to substitute data resulting from the application of 
the PERM requirements to the State after the final rule imple-
menting such requirements is in effect for all States for data 
obtained from the application of the MEQC requirements to 
the State with respect to a fiscal year. 
(3) STATE OPTION TO APPLY MEQC DATA.—For purposes of 
satisfying the requirements of subpart Q of part 431 of title 
42, Code of Federal Regulations, as in effect on September 
1, 2007, relating to Medicaid eligibility reviews, a State may 
elect to substitute data obtained through MEQC reviews con-
ducted in accordance with section 1903(u) of the Social Security 
Act (42 U.S.C. 1396b(u)) for data required for purposes of 
PERM requirements, but only if the State MEQC reviews are 
based on a broad, representative sample of Medicaid applicants 
or enrollees in the States. 
(f) IDENTIFICATION
OF
IMPROVED
STATE-SPECIFIC
SAMPLE 
SIZES.—The Secretary shall establish State-specific sample sizes 
for application of the PERM requirements with respect to State 
child health plans for fiscal years beginning with fiscal year 2009, 
on the basis of such information as the Secretary determines appro-
priate. In establishing such sample sizes, the Secretary shall, to 
the greatest extent practicable— 
(1) minimize the administrative cost burden on States 
under Medicaid and CHIP; and 
(2) maintain State flexibility to manage such programs. 
SEC. 602. IMPROVING DATA COLLECTION. 
(a) INCREASED APPROPRIATION.—Section 2109(b)(2) (42 U.S.C. 
1397ii(b)(2)) is amended by striking ‘‘$10,000,000 for fiscal year 
2000’’ and inserting ‘‘$20,000,000 for fiscal year 2008’’.
H. R. 3963—90 
(b) USE OF ADDITIONAL FUNDS.—Section 2109(b) (42 U.S.C. 
1397ii(b)), as amended by subsection (a), is amended— 
(1) by redesignating paragraph (2) as paragraph (4); and 
(2) by inserting after paragraph (1), the following new 
paragraphs: 
‘‘(2) ADDITIONAL
REQUIREMENTS.—In addition to making 
the adjustments required to produce the data described in 
paragraph (1), with respect to data collection occurring for 
fiscal years beginning with fiscal year 2008, in appropriate 
consultation with the Secretary of Health and Human Services, 
the Secretary of Commerce shall do the following: 
‘‘(A) Make appropriate adjustments to the Current 
Population Survey to develop more accurate State-specific 
estimates of the number of children enrolled in health 
coverage under title XIX or this title. 
‘‘(B) Make appropriate adjustments to the Current 
Population Survey to improve the survey estimates used 
to determine the child population growth factor under sec-
tion 2104(i)(5)(B) and any other data necessary for carrying 
out this title. 
‘‘(C) Include health insurance survey information in 
the American Community Survey related to children. 
‘‘(D) Assess whether American Community Survey esti-
mates, once such survey data are first available, produce 
more reliable estimates than the Current Population 
Survey with respect to the purposes described in subpara-
graph (B). 
‘‘(E) On the basis of the assessment required under 
subparagraph (D), recommend to the Secretary of Health 
and Human Services whether American Community Survey 
estimates should be used in lieu of, or in some combination 
with, Current Population Survey estimates for the purposes 
described in subparagraph (B). 
‘‘(F) Continue making the adjustments described in 
the last sentence of paragraph (1) with respect to expansion 
of the sample size used in State sampling units, the number 
of sampling units in a State, and using an appropriate 
verification element. 
‘‘(3) AUTHORITY FOR THE SECRETARY OF HEALTH AND HUMAN 
SERVICES TO TRANSITION TO THE USE OF ALL, OR SOME COMBINA-
TION OF, ACS ESTIMATES UPON RECOMMENDATION OF THE SEC-
RETARY
OF
COMMERCE.—If, on the basis of the assessment 
required under paragraph (2)(D), the Secretary of Commerce 
recommends to the Secretary of Health and Human Services 
that American Community Survey estimates should be used 
in lieu of, or in some combination with, Current Population 
Survey estimates for the purposes described in paragraph 
(2)(B), the Secretary of Health and Human Services, in con-
sultation with the States, may provide for a period during 
which the Secretary may transition from carrying out such 
purposes through the use of Current Population Survey esti-
mates to the use of American Community Survey estimates 
(in lieu of, or in combination with the Current Population 
Survey estimates, as recommended), provided that any such 
transition is implemented in a manner that is designed to 
avoid adverse impacts upon States with approved State child 
health plans under this title.’’.
H. R. 3963—91 
SEC. 603. UPDATED FEDERAL EVALUATION OF CHIP. 
Section 2108(c) (42 U.S.C. 1397hh(c)) is amended by striking 
paragraph (5) and inserting the following: 
‘‘(5) SUBSEQUENT
EVALUATION
USING
UPDATED
INFORMA-
TION.— 
‘‘(A) IN GENERAL.—The Secretary, directly or through 
contracts or interagency agreements, shall conduct an inde-
pendent subsequent evaluation of 10 States with approved 
child health plans. 
‘‘(B) SELECTION OF STATES AND MATTERS INCLUDED.— 
Paragraphs (2) and (3) shall apply to such subsequent 
evaluation in the same manner as such provisions apply 
to the evaluation conducted under paragraph (1). 
‘‘(C) SUBMISSION
TO
CONGRESS.—Not later than 
December 31, 2010, the Secretary shall submit to Congress 
the results of the evaluation conducted under this para-
graph. 
‘‘(D) FUNDING.—Out of any money in the Treasury 
of the United States not otherwise appropriated, there 
are appropriated $10,000,000 for fiscal year 2009 for the 
purpose of conducting the evaluation authorized under this 
paragraph. Amounts appropriated under this subparagraph 
shall remain available for expenditure through fiscal year 
2011.’’. 
SEC. 604. ACCESS TO RECORDS FOR IG AND GAO AUDITS AND EVALUA-
TIONS. 
Section 2108(d) (42 U.S.C. 1397hh(d)) is amended to read as 
follows: 
‘‘(d) ACCESS TO RECORDS FOR IG AND GAO AUDITS AND EVALUA-
TIONS.—For the purpose of evaluating and auditing the program 
established under this title, or title XIX, the Secretary, the Office 
of Inspector General, and the Comptroller General shall have access 
to any books, accounts, records, correspondence, and other docu-
ments that are related to the expenditure of Federal funds under 
this title and that are in the possession, custody, or control of 
States receiving Federal funds under this title or political subdivi-
sions thereof, or any grantee or contractor of such States or political 
subdivisions.’’. 
SEC. 605. NO FEDERAL FUNDING FOR ILLEGAL ALIENS; DISALLOW-
ANCE FOR UNAUTHORIZED EXPENDITURES. 
Nothing in this Act allows Federal payment for individuals 
who are not legal residents. Titles XI, XIX, and XXI of the Social 
Security Act provide for the disallowance of Federal financial 
participation for erroneous expenditures under Medicaid and under 
CHIP, respectively. 
Subtitle B—Miscellaneous Health 
Provisions 
SEC. 611. DEFICIT REDUCTION ACT TECHNICAL CORRECTIONS. 
(a) CLARIFICATION OF REQUIREMENT TO PROVIDE EPSDT SERV-
ICES FOR ALL CHILDREN IN BENCHMARK BENEFIT PACKAGES UNDER 
MEDICAID.—Section 
1937(a)(1) 
(42 
U.S.C. 
1396u–7(a)(1)), 
as
H. R. 3963—92 
inserted by section 6044(a) of the Deficit Reduction Act of 2005 
(Public Law 109–171, 120 Stat. 88), is amended— 
(1) in subparagraph (A)— 
(A) in the matter before clause (i)— 
(i) by striking ‘‘Notwithstanding any other provi-
sion of this title’’ and inserting ‘‘Notwithstanding sec-
tion 1902(a)(1) (relating to statewideness), section 
1902(a)(10)(B) (relating to comparability) and any other 
provision of this title which would be directly contrary 
to the authority under this section and subject to sub-
section (E)’’; and 
(ii) by striking ‘‘enrollment in coverage that pro-
vides’’ and inserting ‘‘coverage that’’; 
(B) in clause (i), by inserting ‘‘provides’’ after ‘‘(i)’’; 
and 
(C) by striking clause (ii) and inserting the following: 
‘‘(ii) for any individual described in section 
1905(a)(4)(B) who is eligible under the State plan in 
accordance with paragraphs (10) and (17) of section 
1902(a), consists of the items and services described 
in section 1905(a)(4)(B) (relating to early and periodic 
screening, diagnostic, and treatment services defined 
in section 1905(r)) and provided in accordance with 
the requirements of section 1902(a)(43).’’; 
(2) in subparagraph (C)— 
(A) in the heading, by striking ‘‘WRAP-AROUND’’ and 
inserting ‘‘ADDITIONAL’’; and 
(B) by striking ‘‘wrap-around or’’; and 
(3) by adding at the end the following new subparagraph: 
‘‘(E) RULE OF CONSTRUCTION.—Nothing in this para-
graph shall be construed as— 
‘‘(i) requiring a State to offer all or any of the 
items and services required by subparagraph (A)(ii) 
through an issuer of benchmark coverage described 
in subsection (b)(1) or benchmark equivalent coverage 
described in subsection (b)(2); 
‘‘(ii) preventing a State from offering all or any 
of the items and services required by subparagraph 
(A)(ii) through an issuer of benchmark coverage 
described in subsection (b)(1) or benchmark equivalent 
coverage described in subsection (b)(2); or 
‘‘(iii) affecting a child’s entitlement to care and 
services described in subsections (a)(4)(B) and (r) of 
section 1905 and provided in accordance with section 
1902(a)(43) whether provided through benchmark cov-
erage, benchmark equivalent coverage, or otherwise.’’. 
(b) CORRECTION OF REFERENCE TO CHILDREN IN FOSTER CARE 
RECEIVING CHILD WELFARE SERVICES.—Section 1937(a)(2)(B)(viii) 
(42 U.S.C. 1396u–7(a)(2)(B)(viii), as inserted by section 6044(a) 
of the Deficit Reduction Act of 2005, is amended by striking ‘‘aid 
or assistance is made available under part B of title IV to children 
in foster care and individuals’’ and inserting ‘‘child welfare services 
are made available under part B of title IV on the basis of being 
a child in foster care or’’. 
(c) TRANSPARENCY.—Section 1937 (42 U.S.C. 1396u–7), as 
inserted by section 6044(a) of the Deficit Reduction Act of 2005, 
is amended by adding at the end the following: