Title: IMPROVE Act
Policy area: Health

Summary:
Improving Medicaid Programs and Opportunities for Eligible Beneficiaries Act or the IMPROVE Act
This bill establishes a state Medicaid option to provide for medical assistance with respect to coordinated care provided through a health home (i.e., a designated provider or team of health-care professionals) for children with medically complex conditions. States must determine payment methodologies in accordance with specified requirements; payments also temporarily qualify for an enhanced federal matching rate.
The bill also makes a series of reductions relating to federal Medicaid expenditures. Among other changes, the bill reduces the federal matching rate for states that do not have required asset-verification programs for determining Medicaid eligibility.
Further, drug manufacturers with Medicaid rebate agreements for covered outpatient drugs must disclose drug product information. Manufacturers are subject to civil penalties for knowingly misclassifying drugs. Manufacturers are also required to compensate for rebates that were initially underpaid as a result of misclassification (whether or not such misclassification was committed knowingly).
Finally, the bill excludes specified wheelchairs and associated accessories from Medicare's competitive acquisition program (in which rates are set through a competitive bidding program rather than by an established fee schedule).

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7217 Introduced in House (IH)]

<DOC>






115th CONGRESS
  2d Session
                                H. R. 7217

 To amend title XIX of the Social Security Act to provide States with 
  the option of providing coordinated care for children with complex 
   medical conditions through a health home, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            December 6, 2018

   Mr. Barton (for himself, Ms. Castor of Florida, Mr. Guthrie, Mrs. 
   Dingell, and Mr. Upton) introduced the following bill; which was 
 referred to the Committee on Energy and Commerce, and in addition to 
   the Committee on Ways and Means, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To amend title XIX of the Social Security Act to provide States with 
  the option of providing coordinated care for children with complex 
   medical conditions through a health home, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Improving Medicaid Programs and 
Opportunities for Eligible Beneficiaries Act'' or the ``IMPROVE Act''.

                           TITLE I--ACE KIDS

SEC. 101. STATE OPTION TO PROVIDE COORDINATED CARE THROUGH A HEALTH 
              HOME FOR CHILDREN WITH MEDICALLY COMPLEX CONDITIONS.

    Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) is 
amended by inserting after section 1945 the following new section:

``SEC. 1945A. STATE OPTION TO PROVIDE COORDINATED CARE THROUGH A HEALTH 
              HOME FOR CHILDREN WITH MEDICALLY COMPLEX CONDITIONS.

    ``(a) In General.--Notwithstanding section 1902(a)(1) (relating to 
statewideness) and section 1902(a)(10)(B) (relating to comparability), 
beginning October 1, 2022, a State, at its option as a State plan 
amendment, may provide for medical assistance under this title to 
children with medically complex conditions who choose to enroll in a 
health home under this section by selecting a designated provider, a 
team of health care professionals operating with such a provider, or a 
health team as the child's health home for purposes of providing the 
child with health home services.
    ``(b) Health Home Qualification Standards.--The Secretary shall 
establish standards for qualification as a health home for purposes of 
this section. Such standards shall include requiring designated 
providers, teams of health care professionals operating with such 
providers, and health teams to demonstrate to the State the ability to 
do the following:
            ``(1) Coordinate prompt care for children with medically 
        complex conditions, including access to pediatric emergency 
        services at all times.
            ``(2) Develop an individualized comprehensive pediatric 
        family-centered care plan for children with medically complex 
        conditions that accommodates patient preferences.
            ``(3) Work in a culturally and linguistically appropriate 
        manner with the family of a child with medically complex 
        conditions to develop and incorporate into such child's care 
        plan, in a manner consistent with the needs of the child and 
        the choices of the child's family, ongoing home care, 
        community-based pediatric primary care, pediatric inpatient 
        care, social support services, and local hospital pediatric 
        emergency care.
            ``(4) Coordinate access to--
                    ``(A) subspecialized pediatric services and 
                programs for children with medically complex 
                conditions, including the most intensive diagnostic, 
                treatment, and critical care levels as medically 
                necessary; and
                    ``(B) palliative services if the State provides 
                such services under the State plan (or a waiver of such 
                plan).
            ``(5) Coordinate care for children with medically complex 
        conditions with out-of-State providers furnishing care to such 
        children to the maximum extent practicable for the families of 
        such children and where medically necessary, in accordance with 
        guidance issued under subsection (e)(1) and section 431.52 of 
        title 42, Code of Federal Regulations.
            ``(6) Collect and report information under subsection 
        (g)(1).
    ``(c) Payments.--
            ``(1) In general.--A State shall provide a designated 
        provider, a team of health care professionals operating with 
        such a provider, or a health team with payments for the 
        provision of health home services to each child with medically 
        complex conditions that selects such provider, team of health 
        care professionals, or health team as the child's health home. 
        Payments made to a designated provider, a team of health care 
        professionals operating with such a provider, or a health team 
        for such services shall be treated as medical assistance for 
        purposes of section 1903(a), except that, during the first 2 
        fiscal year quarters that the State plan amendment is in 
        effect, the Federal medical assistance percentage applicable to 
        such payments shall be increased by 15 percentage points, but 
        in no case may exceed 90 percent.
            ``(2) Methodology.--
                    ``(A) In general.--The State shall specify in the 
                State plan amendment the methodology the State will use 
                for determining payment for the provision of health 
                home services. Such methodology for determining 
                payment--
                            ``(i) may be tiered to reflect, with 
                        respect to each child with medically complex 
                        conditions provided such services by a 
                        designated provider, a team of health care 
                        professionals operating with such a provider, 
                        or a health team, the severity or number of 
                        each such child's chronic conditions, life-
                        threatening illnesses, disabilities, or rare 
                        diseases, or the specific capabilities of the 
                        provider, team of health care professionals, or 
                        health team; and
                            ``(ii) shall be established consistent with 
                        section 1902(a)(30)(A).
                    ``(B) Alternate models of payment.--The methodology 
                for determining payment for provision of health home 
                services under this section shall not be limited to a 
                per-member per-month basis and may provide (as proposed 
                by the State and subject to approval by the Secretary) 
                for alternate models of payment.
            ``(3) Planning grants.--
                    ``(A) In general.--Beginning October 1, 2022, the 
                Secretary may award planning grants to States for 
                purposes of developing a State plan amendment under 
                this section. A planning grant awarded to a State under 
                this paragraph shall remain available until expended.
                    ``(B) State contribution.--A State awarded a 
                planning grant shall contribute an amount equal to the 
                State percentage determined under section 1905(b) 
                (without regard to section 5001 of Public Law 111-5) 
                for each fiscal year for which the grant is awarded.
                    ``(C) Limitation.--The total amount of payments 
                made to States under this paragraph shall not exceed 
                $5,000,000.
    ``(d) Coordinating Care.--
            ``(1) Hospital notification.--A State with a State plan 
        amendment approved under this section shall require each 
        hospital that is a participating provider under the State plan 
        (or a waiver of such plan) to establish procedures for, in the 
        case of a child with medically complex conditions who is 
        enrolled in a health home pursuant to this section and seeks 
        treatment in the emergency department of such hospital, 
        notifying the health home of such child of such treatment.
            ``(2) Education with respect to availability of health home 
        services.--In order for a State plan amendment to be approved 
        under this section, a State shall include in the State plan 
        amendment a description of the State's process for educating 
        providers participating in the State plan (or a waiver of such 
        plan) on the availability of health home services for children 
        with medically complex conditions, including the process by 
        which such providers can refer such children to a designated 
        provider, team of health care professionals operating such a 
        provider, or health team for the purpose of establishing a 
        health home through which such children may receive such 
        services.
            ``(3) Family education.--In order for a State plan 
        amendment to be approved under this section, a State shall 
        include in the State plan amendment a description of the 
        State's process for educating families with children eligible 
        to receive health home services pursuant to this section of the 
        availability of such services. Such process shall include the 
        participation of family-to-family entities or other public or 
        private organizations or entities who provide outreach and 
        information on the availability of health care items and 
        services to families of individuals eligible to receive medical 
        assistance under the State plan (or a waiver of such plan).
            ``(4) Mental health coordination.--A State with a State 
        plan amendment approved under this section shall consult and 
        coordinate, as appropriate, with the Secretary in addressing 
        issues regarding the prevention and treatment of mental illness 
        and substance use among children with medically complex 
        conditions receiving health home services under this section.
    ``(e) Guidance on Coordinating Care From Out-of-State Providers.--
            ``(1) In general.--Not later than October 1, 2020, the 
        Secretary shall issue (and update as the Secretary determines 
        necessary) guidance to State Medicaid directors on--
                    ``(A) best practices for using out-of-State 
                providers to provide care to children with medically 
                complex conditions;
                    ``(B) coordinating care for such children provided 
                by such out-of-State providers (including when provided 
                in emergency and non-emergency situations);
                    ``(C) reducing barriers for such children receiving 
                care from such providers in a timely fashion; and
                    ``(D) processes for screening and enrolling such 
                providers in the respective State plan (or a waiver of 
                such plan), including efforts to streamline such 
                processes or reduce the burden of such processes on 
                such providers.
            ``(2) Stakeholder input.--In carrying out paragraph (1), 
        the Secretary shall issue a request for information to seek 
        input from children with medically complex conditions and their 
        families, States, providers (including children's hospitals, 
        hospitals, pediatricians, and other providers), managed care 
        plans, children's health groups, family and beneficiary 
        advocates, and other stakeholders with respect to coordinating 
        the care for such children provided by out-of-State providers.
    ``(f) Monitoring.--A State shall include in the State plan 
amendment--
            ``(1) a methodology for tracking avoidable hospital 
        readmissions and calculating savings that result from improved 
        care coordination and management under this section;
            ``(2) a proposal for use of health information technology 
        in providing health home services under this section and 
        improving service delivery and coordination across the care 
        continuum (including the use of wireless patient technology to 
        improve coordination and management of care and patient 
        adherence to recommendations made by their provider); and
            ``(3) a methodology for tracking prompt and timely access 
        to medically necessary care for children with medically complex 
        conditions from out-of-State providers.
    ``(g) Data Collection.--
            ``(1) Provider reporting requirements.--In order to receive 
        payments from a State under subsection (c), a designated 
        provider, a team of health care professionals operating with 
        such a provider, or a health team shall report to the State, at 
        such time and in such form and manner as may be required by the 
        State, the following information:
                    ``(A) With respect to each such provider, team of 
                health care professionals, or health team, the name, 
                National Provider Identification number, address, and 
                specific health care services offered to be provided to 
                children with medically complex conditions who have 
                selected such provider, team of health care 
                professionals, or health team as the health home of 
                such children.
                    ``(B) Information on all applicable measures for 
                determining the quality of health home services 
                provided by such provider, team of health care 
                professionals, or health team, including, to the extent 
                applicable, child health quality measures and measures 
                for centers of excellence for children with complex 
                needs developed under this title, title XXI, and 
                section 1139A.
                    ``(C) Such other information as the Secretary shall 
                specify in guidance.
        When appropriate and feasible, such provider, team of health 
        care professionals, or health team, as the case may be, shall 
        use health information technology in providing the State with 
        such information.
            ``(2) State reporting requirements.--
                    ``(A) Comprehensive report.--A State with a State 
                plan amendment approved under this section shall report 
                to the Secretary (and, upon request, to the Medicaid 
                and CHIP Payment and Access Commission), at such time 
                and in such form and manner determined by the Secretary 
                to be reasonable and minimally burdensome, the 
                following information:
                            ``(i) Information reported under paragraph 
                        (1).
                            ``(ii) The number of children with 
                        medically complex conditions who have selected 
                        a health home pursuant to this section.
                            ``(iii) The nature, number, and prevalence 
                        of chronic conditions, life-threatening 
                        illnesses, disabilities, or rare diseases that 
                        such children have.
                            ``(iv) The type of delivery systems and 
                        payment models used to provide services to such 
                        children under this section.
                            ``(v) The number and characteristics of 
                        designated providers, teams of health care 
                        professionals operating with such providers, 
                        and health teams selected as health homes 
                        pursuant to this section, including the number 
                        and characteristics of out-of-State providers, 
                        teams of health care professionals operating 
                        with such providers, and health teams who have 
                        provided health care items and services to such 
                        children.
                            ``(vi) The extent to which such children 
                        receive health care items and services under 
                        the State plan.
                            ``(vii) Quality measures developed 
                        specifically with respect to health care items 
                        and services provided to children with 
                        medically complex conditions.
                    ``(B) Report on best practices.--Not later than 90 
                days after a State has a State plan amendment approved 
                under this section, such State shall submit to the 
                Secretary, and make publicly available on the 
                appropriate State website, a report on how the State is 
                implementing guidance issued under subsection (e)(1), 
                including through any best practices adopted by the 
                State.
    ``(h) Rule of Construction.--Nothing in this section may be 
construed--
            ``(1) to require a child with medically complex conditions 
        to enroll in a health home under this section;
            ``(2) to limit the choice of a child with medically complex 
        conditions in selecting a designated provider, team of health 
        care professionals operating with such a provider, or health 
        team that meets the health home qualification standards 
        established under subsection (b) as the child's health home; or
            ``(3) to reduce or otherwise modify--
                    ``(A) the entitlement of children with medically 
                complex conditions to early and periodic screening, 
                diagnostic, and treatment services (as defined in 
                section 1905(r)); or
                    ``(B) the informing, providing, arranging, and 
                reporting requirements of a State under section 
                1902(a)(43).
    ``(i) Definitions.--In this section:
            ``(1) Child with medically complex conditions.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term `child with medically complex conditions' means an 
                individual under 21 years of age who--
                            ``(i) is eligible for medical assistance 
                        under the State plan (or under a waiver of such 
                        plan); and
                            ``(ii) has at least--
                                    ``(I) one or more chronic 
                                conditions that cumulatively affect 
                                three or more organ systems and 
                                severely reduces cognitive or physical 
                                functioning (such as the ability to 
                                eat, drink, or breathe independently) 
                                and that also requires the use of 
                                medication, durable medical equipment, 
                                therapy, surgery, or other treatments; 
                                or
                                    ``(II) one life-limiting illness or 
                                rare pediatric disease (as defined in 
                                section 529(a)(3) of the Federal Food, 
                                Drug, and Cosmetic Act (21 U.S.C. 
                                360ff(a)(3))).
                    ``(B) Rule of construction.--Nothing in this 
                paragraph shall prevent the Secretary from establishing 
                higher levels as to the number or severity of chronic, 
                life threatening illnesses, disabilities, rare diseases 
                or mental health conditions for purposes of determining 
                eligibility for receipt of health home services under 
                this section.
            ``(2) Chronic condition.--The term `chronic condition' 
        means a serious, long-term physical, mental, or developmental 
        disability or disease, including the following:
                    ``(A) Cerebral palsy.
                    ``(B) Cystic fibrosis.
                    ``(C) HIV/AIDS.
                    ``(D) Blood diseases, such as anemia or sickle cell 
                disease.
                    ``(E) Muscular dystrophy.
                    ``(F) Spina bifida.
                    ``(G) Epilepsy.
                    ``(H) Severe autism spectrum disorder.
                    ``(I) Serious emotional disturbance or serious 
                mental health illness.
            ``(3) Health home.--The term `health home' means a 
        designated provider (including a provider that operates in 
        coordination with a team of health care professionals) or a 
        health team selected by a child with medically complex 
        conditions (or the family of such child) to provide health home 
        services.
            ``(4) Health home services.--
                    ``(A) In general.--The term `health home services' 
                means comprehensive and timely high-quality services 
                described in subparagraph (B) that are provided by a 
                designated provider, a team of health care 
                professionals operating with such a provider, or a 
                health team.
                    ``(B) Services described.--The services described 
                in this subparagraph shall include--
                            ``(i) comprehensive care management;
                            ``(ii) care coordination, health promotion, 
                        and providing access to the full range of 
                        pediatric specialty and subspecialty medical 
                        services, including services from out-of-State 
                        providers, as medically necessary;
                            ``(iii) comprehensive transitional care, 
                        including appropriate follow-up, from inpatient 
                        to other settings;
                            ``(iv) patient and family support 
                        (including authorized representatives);
                            ``(v) referrals to community and social 
                        support services, if relevant; and
                            ``(vi) use of health information technology 
                        to link services, as feasible and appropriate.
            ``(5) Designated provider.--The term `designated provider' 
        means a physician (including a pediatrician or a pediatric 
        specialty or subspecialty provider), children's hospital, 
        clinical practice or clinical group practice, prepaid inpatient 
        health plan or prepaid ambulatory health plan (as defined by 
        the Secretary), rural clinic, community health center, 
        community mental health center, home health agency, or any 
        other entity or provider that is determined by the State and 
        approved by the Secretary to be qualified to be a health home 
        for children with medically complex conditions on the basis of 
        documentation evidencing that the entity has the systems, 
        expertise, and infrastructure in place to provide health home 
        services. Such term may include providers who are employed by, 
        or affiliated with, a children's hospital.
            ``(6) Team of health care professionals.--The term `team of 
        health care professionals' means a team of health care 
        professionals (as described in the State plan amendment under 
        this section) that may--
                    ``(A) include--
                            ``(i) physicians and other professionals, 
                        such as pediatricians or pediatric specialty or 
                        subspecialty providers, nurse care 
                        coordinators, dietitians, nutritionists, social 
                        workers, behavioral health professionals, 
                        physical therapists, occupational therapists, 
                        speech pathologists, nurses, individuals with 
                        experience in medical supportive technologies, 
                        or any professionals determined to be 
                        appropriate by the State and approved by the 
                        Secretary;
                            ``(ii) an entity or individual who is 
                        designated to coordinate such a team; and
                            ``(iii) community health workers, 
                        translators, and other individuals with 
                        culturally-appropriate expertise; and
                    ``(B) be freestanding, virtual, or based at a 
                children's hospital, hospital, community health center, 
                community mental health center, rural clinic, clinical 
                practice or clinical group practice, academic health 
                center, or any entity determined to be appropriate by 
                the State and approved by the Secretary.
            ``(7) Health team.--The term `health team' has the meaning 
        given such term for purposes of section 3502 of Public Law 111-
        148.''.

                        TITLE II--OTHER MEDICAID

SEC. 201. EXTENSION OF MONEY FOLLOWS THE PERSON REBALANCING 
              DEMONSTRATION.

    (a) General Funding.--Section 6071(h) of the Deficit Reduction Act 
of 2005 (42 U.S.C. 1396a note) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (D), by striking ``and'' after 
                the semicolon;
                    (B) in subparagraph (E), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(F) subject to paragraph (3), $112,000,000 for 
                fiscal year 2019.'';
            (2) in paragraph (2)--
                    (A) by striking ``Amounts made'' and inserting 
                ``Subject to paragraph (3), amounts made''; and
                    (B) by striking ``September 30, 2016'' and 
                inserting ``September 30, 2021''; and
            (3) by adding at the end the following new paragraph:
            ``(3) Special rule for fy 2019.--Funds appropriated under 
        paragraph (1)(F) shall be made available for grants to States 
        only if such States have an approved MFP demonstration project 
        under this section as of December 31, 2018.''.
    (b) Funding for Quality Assurance and Improvement; Technical 
Assistance; Oversight.--Section 6071(f) of the Deficit Reduction Act of 
2005 (42 U.S.C. 1396a note) is amended by striking paragraph (2) and 
inserting the following:
            ``(2) Funding.--From the amounts appropriated under 
        subsection (h)(1)(F) for fiscal year 2019, $500,000 shall be 
        available to the Secretary for such fiscal year to carry out 
        this subsection.''.
    (c) Technical Amendment.--Section 6071(b) of the Deficit Reduction 
Act of 2005 (42 U.S.C. 1396a note) is amended by adding at the end the 
following:
            ``(10) Secretary.--The term `Secretary' means the Secretary 
        of Health and Human Services.''.

SEC. 202. EXTENSION OF PROTECTION FOR MEDICAID RECIPIENTS OF HOME AND 
              COMMUNITY-BASED SERVICES AGAINST SPOUSAL IMPOVERISHMENT.

    (a) In General.--Section 2404 of Public Law 111-148 (42 U.S.C. 
1396r-5 note) is amended by striking ``the 5-year period that begins on 
January 1, 2014,'' and inserting ``the period beginning on January 1, 
2014, and ending on March 31, 2019,''.
    (b) Rule of Construction.--
            (1) Protecting state spousal income and asset disregard 
        flexibility under waivers and plan amendments.--Nothing in 
        section 2404 of Public Law 111-148 (42 U.S.C. 1396r-5 note) or 
        section 1924 of the Social Security Act (42 U.S.C. 1396r-5) 
        shall be construed as prohibiting a State from disregarding an 
        individual's spousal income and assets under a State waiver or 
        plan amendment described in paragraph (2) for purposes of 
        making determinations of eligibility for home and community-
        based services or home and community-based attendant services 
        and supports under such waiver or plan amendment.
            (2) State waiver or plan amendment described.--A State 
        waiver or plan amendment described in this paragraph is any of 
        the following:
                    (A) A waiver or plan amendment to provide medical 
                assistance for home and community-based services under 
                a waiver or plan amendment under subsection (c), (d), 
                or (i) of section 1915 of the Social Security Act (42 
                U.S.C. 1396n) or under section 1115 of such Act (42 
                U.S.C. 1315).
                    (B) A plan amendment to provide medical assistance 
                for home and community-based services for individuals 
                by reason of being determined eligible under section 
                1902(a)(10)(C) of such Act (42 U.S.C. 1396a(a)(10)(C)) 
                or by reason of section 1902(f) of such Act (42 U.S.C. 
                1396a(f)) or otherwise on the basis of a reduction of 
                income based on costs incurred for medical or other 
                remedial care under which the State disregarded the 
                income and assets of the individual's spouse in 
                determining the initial and ongoing financial 
                eligibility of an individual for such services in place 
                of the spousal impoverishment provisions applied under 
                section 1924 of such Act (42 U.S.C. 1396r-5).
                    (C) A plan amendment to provide medical assistance 
                for home and community-based attendant services and 
                supports under section 1915(k) of such Act (42 U.S.C. 
                1396n(k)).

SEC. 203. REDUCTION IN FMAP AFTER 2020 FOR STATES WITHOUT ASSET 
              VERIFICATION PROGRAM.

    Section 1940 of the Social Security Act (42 U.S.C. 1396w) is 
amended by adding at the end the following new subsection:
    ``(k) Reduction in FMAP After 2020 for Non-Compliant States.--
            ``(1) In general.--With respect to a calendar quarter 
        beginning on or after January 1, 2021, the Federal medical 
        assistance percentage otherwise determined under section 
        1905(b) for a non-compliant State shall be reduced--
                    ``(A) for calendar quarters in 2021 and 2022, by 
                0.12 percentage points;
                    ``(B) for calendar quarters in 2023, by 0.25 
                percentage points;
                    ``(C) for calendar quarters in 2024, by 0.35 
                percentage points; and
                    ``(D) for calendar quarters in 2025 and each year 
                thereafter, by 0.5 percentage points.
            ``(2) Non-compliant state defined.--For purposes of this 
        subsection, the term `non-compliant State' means a State--
                    ``(A) that is one of the 50 States or the District 
                of Columbia;
                    ``(B) with respect to which the Secretary has not 
                approved a State plan amendment submitted under 
                subsection (a)(2); and
                    ``(C) that is not operating, on an ongoing basis, 
                an asset verification program in accordance with this 
                section.''.

SEC. 204. DENIAL OF FFP FOR CERTAIN EXPENDITURES RELATING TO VACUUM 
              ERECTION SYSTEMS AND PENILE PROSTHETIC IMPLANTS.

    (a) In General.--Section 1903(i) of the Social Security Act (42 
U.S.C. 1396b(i)) is amended by inserting after paragraph (11) the 
following:
            ``(12) with respect to any amounts expended for--
                    ``(A) a vacuum erection system that is not 
                medically necessary; or
                    ``(B) the insertion, repair, or removal and 
                replacement of a penile prosthetic implant (unless such 
                insertion, repair, or removal and replacement is 
                medically necessary); or''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to items and services furnished on or after January 
1, 2019.

SEC. 205. MEDICAID IMPROVEMENT FUND.

    Section 1941(b)(1) of the Social Security Act (42 U.S.C. 1396w-
1(b)(1)) is amended by striking ``$31,000,000'' and inserting 
``$9,000,000''.

SEC. 206. PREVENTING THE MISCLASSIFICATION OF DRUGS UNDER THE MEDICAID 
              DRUG REBATE PROGRAM.

    (a) Application of Civil Money Penalty for Misclassification of 
Covered Outpatient Drugs.--
            (1) In general.--Section 1927(b)(3) of the Social Security 
        Act (42 U.S.C. 1396r-8(b)(3)) is amended--
                    (A) in the paragraph heading, by inserting ``and 
                drug product'' after ``price'';
                    (B) in subparagraph (A)--
                            (i) in clause (ii), by striking ``; and'' 
                        at the end and inserting a semicolon;
                            (ii) in clause (iii), by striking the 
                        period at the end and inserting a semicolon;
                            (iii) in clause (iv), by striking the 
                        semicolon at the end and inserting ``; and''; 
                        and
                            (iv) by inserting after clause (iv) the 
                        following new clause:
                            ``(v) not later than 30 days after the last 
                        day of each month of a rebate period under the 
                        agreement, such drug product information as the 
                        Secretary shall require for each of the 
                        manufacturer's covered outpatient drugs.''; and
                    (C) in subparagraph (C)--
                            (i) in clause (ii), by inserting ``, 
                        including information related to drug pricing, 
                        drug product information, and data related to 
                        drug pricing or drug product information,'' 
                        after ``provides false information''; and
                            (ii) by adding at the end the following new 
                        clauses:
                            ``(iii) Misclassified or misreported 
                        information.--
                                    ``(I) In general.--Any manufacturer 
                                with an agreement under this section 
                                that knowingly (as defined in section 
                                1003.110 of title 42, Code of Federal 
                                Regulations (or any successor 
                                regulation)) misclassifies a covered 
                                outpatient drug, such as by knowingly 
                                submitting incorrect drug category 
                                information, is subject to a civil 
                                money penalty for each covered 
                                outpatient drug that is misclassified 
                                in an amount not to exceed 2 times the 
                                amount of the difference, as determined 
                                by the Secretary, between--
                                            ``(aa) the total amount of 
                                        rebates that the manufacturer 
                                        paid with respect to the drug 
                                        to all States for all rebate 
                                        periods during which the drug 
                                        was misclassified; and
                                            ``(bb) the total amount of 
                                        rebates that the manufacturer 
                                        would have been required to 
                                        pay, as determined by the 
                                        Secretary, with respect to the 
                                        drug to all States for all 
                                        rebate periods during which the 
                                        drug was misclassified if the 
                                        drug had been correctly 
                                        classified.
                                    ``(II) Other penalties and recovery 
                                of underpaid rebates.--The civil money 
                                penalties described in subclause (I) 
                                are in addition to other penalties as 
                                may be prescribed by law and any other 
                                recovery of the underlying underpayment 
                                for rebates due under this section or 
                                the terms of the rebate agreement as 
                                determined by the Secretary.
                            ``(iv) Increasing oversight and 
                        enforcement.--Each year the Secretary shall 
                        retain, in addition to any amount retained by 
                        the Secretary to recoup investigation and 
                        litigation costs related to the enforcement of 
                        the civil money penalties under this 
                        subparagraph and subsection (c)(4)(B)(ii)(III), 
                        an amount equal to 25 percent of the total 
                        amount of civil money penalties collected under 
                        this subparagraph and subsection 
                        (c)(4)(B)(ii)(III) for the year, and such 
                        retained amount shall be available to the 
                        Secretary, without further appropriation and 
                        until expended, for activities related to the 
                        oversight and enforcement of this section and 
                        agreements under this section, including--
                                    ``(I) improving drug data reporting 
                                systems;
                                    ``(II) evaluating and ensuring 
                                manufacturer compliance with rebate 
                                obligations; and
                                    ``(III) oversight and enforcement 
                                related to ensuring that manufacturers 
                                accurately and fully report drug 
                                information, including data related to 
                                drug classification.''; and
                            (iii) in subparagraph (D)--
                                    (I) in clause (iv), by striking ``, 
                                and'' and inserting a comma;
                                    (II) in clause (v), by striking 
                                ``subsection (f).'' and inserting 
                                ``subsection (f), and''; and
                                    (III) by inserting after clause (v) 
                                the following new clause:
                            ``(vi) in the case of categories of drug 
                        product or classification information that were 
                        not considered confidential by the Secretary on 
                        the day before the date of the enactment of the 
                        IMPROVE Act.''.
            (2) Technical amendments.--
                    (A) Section 1903(i)(10) of the Social Security Act 
                (42 U.S.C. 1396b(i)(10)) is amended--
                            (i) in subparagraph (C)--
                                    (I) by adjusting the left margin so 
                                as to align with the left margin of 
                                subparagraph (B); and
                                    (II) by striking ``, and'' and 
                                inserting a semicolon;
                            (ii) in subparagraph (D), by striking ``; 
                        or'' and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(E) with respect to any amount expended for a 
                covered outpatient drug for which a suspension under 
                section 1927(c)(4)(B)(ii)(II) is in effect; or''.
                    (B) Section 1927(b)(3)(C)(ii) of the Social 
                Security Act (42 U.S.C. 1396r-8(b)(3)(C)(ii)) is 
                amended by striking ``subsections (a) and (b)'' and 
                inserting ``subsections (a), (b), (f)(3), and (f)(4)''.
    (b) Recovery of Unpaid Rebate Amounts Due to Misclassification of 
Covered Outpatient Drugs.--
            (1) In general.--Section 1927(c) of the Social Security Act 
        (42 U.S.C. 1396r-8(c)) is amended by adding at the end the 
        following new paragraph:
            ``(4) Recovery of unpaid rebate amounts due to 
        misclassification of covered outpatient drugs.--
                    ``(A) In general.--If the Secretary determines that 
                a manufacturer with an agreement under this section 
                paid a lower per-unit rebate amount to a State for a 
                rebate period as a result of the misclassification by 
                the manufacturer of a covered outpatient drug (without 
                regard to whether the manufacturer knowingly made the 
                misclassification or should have known that the 
                misclassification would be made) than the per-unit 
                rebate amount that the manufacturer would have paid to 
                the State if the drug had been correctly classified, 
                the manufacturer shall pay to the State an amount equal 
                to the product of--
                            ``(i) the difference between--
                                    ``(I) the per-unit rebate amount 
                                paid to the State for the period; and
                                    ``(II) the per-unit rebate amount 
                                that the manufacturer would have paid 
                                to the State for the period, as 
                                determined by the Secretary, if the 
                                drug had been correctly classified; and
                            ``(ii) the total units of the drug paid for 
                        under the State plan in the period.
                    ``(B) Authority to correct misclassifications.--
                            ``(i) In general.--If the Secretary 
                        determines that a manufacturer with an 
                        agreement under this section has misclassified 
                        a covered outpatient drug (without regard to 
                        whether the manufacturer knowingly made the 
                        misclassification or should have known that the 
                        misclassification would be made), the Secretary 
                        shall notify the manufacturer of the 
                        misclassification and require the manufacturer 
                        to correct the misclassification in a timely 
                        manner.
                            ``(ii) Enforcement.--If, after receiving 
                        notice of a misclassification from the 
                        Secretary under clause (i), a manufacturer 
                        fails to correct the misclassification by such 
                        time as the Secretary shall require, until the 
                        manufacturer makes such correction, the 
                        Secretary may--
                                    ``(I) correct the misclassification 
                                on behalf of the manufacturer;
                                    ``(II) suspend the misclassified 
                                drug and the drug's status as a covered 
                                outpatient drug under the 
                                manufacturer's national rebate 
                                agreement; or
                                    ``(III) impose a civil money 
                                penalty (which shall be in addition to 
                                any other recovery or penalty which may 
                                be available under this section or any 
                                other provision of law) for each rebate 
                                period during which the drug is 
                                misclassified not to exceed an amount 
                                equal to the product of--
                                            ``(aa) the total number of 
                                        units of each dosage form and 
                                        strength of such misclassified 
                                        drug paid for under any State 
                                        plan during such a rebate 
                                        period; and
                                            ``(bb) 23.1 percent of the 
                                        average manufacturer price for 
                                        the dosage form and strength of 
                                        such misclassified drug.
                    ``(C) Reporting and transparency.--
                            ``(i) In general.--The Secretary shall 
                        submit a report to Congress on at least an 
                        annual basis that includes information on the 
                        covered outpatient drugs that have been 
                        identified as misclassified, the steps taken to 
                        reclassify such drugs, the actions the 
                        Secretary has taken to ensure the payment of 
                        any rebate amounts which were unpaid as a 
                        result of such misclassification, and a 
                        disclosure of expenditures from the fund 
                        created in subsection (b)(3)(C)(iv), including 
                        an accounting of how such funds have been 
                        allocated and spent in accordance with such 
                        subsection.
                            ``(ii) Public access.--The Secretary shall 
                        make the information contained in the report 
                        required under clause (i) available to the 
                        public on a timely basis.
                    ``(D) Other penalties and actions.--Actions taken 
                and penalties imposed under this paragraph shall be in 
                addition to other remedies available to the Secretary 
                including terminating the manufacturer's rebate 
                agreement for noncompliance with the terms of such 
                agreement and shall not exempt a manufacturer from, or 
                preclude the Secretary from pursuing, any civil money 
                penalty under this title or title XI, or any other 
                penalty or action as may be prescribed by law.''.
            (2) Offset of recovered amounts against medical 
        assistance.--Section 1927(b)(1)(B) of the Social Security Act 
        (42 U.S.C. 1396r-8(b)(1)(B)) is amended by inserting ``, 
        including amounts received by a State under subsection 
        (c)(4),'' after ``in any quarter''.
    (c) Clarifying Definitions.--Section 1927(k)(7)(A) of the Social 
Security Act (42 U.S.C. 1396r-8(k)(7)(A)) is amended--
            (1) by striking ``an original new drug application'' and 
        inserting ``a new drug application'' each place it appears;
            (2) in clause (i), by inserting ``but including a drug 
        product approved for marketing as a non-prescription drug that 
        is regarded as a covered outpatient drug under paragraph (4)'' 
        after ``drug described in paragraph (5)'';
            (3) in clause (ii), by striking ``was originally marketed'' 
        and inserting ``is marketed''; and
            (4) in clause (iv)--
                    (A) by inserting ``, including a drug product 
                approved for marketing as a non-prescription drug that 
                is regarded as a covered outpatient drug under 
                paragraph (4),'' after ``covered outpatient drug''; and
                    (B) by adding at the end the following new 
                sentence: ``Such term also includes a covered 
                outpatient drug that is a biological product licensed, 
                produced, or distributed under a biologics license 
                application approved by the Food and Drug 
                Administration.''.
    (d) Exclusion of Manufacturers for Knowing Misclassification of 
Covered Outpatient Drugs.--Section 1128(b) of the Social Security Act 
(42 U.S.C. 1320a-7(b)) is amended by adding at the end the following 
new paragraph:
            ``(17) Knowingly misclassifying covered outpatient drugs.--
        Any manufacturer or officer, director, agent, or managing 
        employee of such manufacturer that knowingly misclassifies a 
        covered outpatient drug under an agreement under section 1927, 
        knowingly fails to correct such misclassification, or knowingly 
        provides false information related to drug pricing, drug 
        product information, or data related to drug pricing or drug 
        product information.''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act, and shall apply to 
covered outpatient drugs supplied by manufacturers under agreements 
under section 1927 of the Social Security Act (42 U.S.C. 1396r-8) on or 
after such date.

                          TITLE III--MEDICARE

SEC. 301. EXCLUSION OF COMPLEX REHABILITATIVE MANUAL WHEELCHAIRS FROM 
              MEDICARE COMPETITIVE ACQUISITION PROGRAM; NON-APPLICATION 
              OF MEDICARE FEE-SCHEDULE ADJUSTMENTS FOR CERTAIN 
              WHEELCHAIR ACCESSORIES AND CUSHIONS.

    (a) Exclusion of Complex Rehabilitative Manual Wheelchairs From 
Competitive Acquisition Program.--Section 1847(a)(2)(A) of the Social 
Security Act (42 U.S.C. 1395w-3(a)(2)(A)) is amended--
            (1) by inserting ``, complex rehabilitative manual 
        wheelchairs (as determined by the Secretary), and certain 
        manual wheelchairs (identified, as of October 1, 2018, by HCPCS 
        codes E1235, E1236, E1237, E1238, and K0008 or any successor to 
        such codes)'' after ``group 3 or higher''; and
            (2) by striking ``such wheelchairs'' and inserting ``such 
        complex rehabilitative power wheelchairs, complex 
        rehabilitative manual wheelchairs, and certain manual 
        wheelchairs''.
    (b) Non-Application of Medicare Fee Schedule Adjustments for 
Wheelchair Accessories and Seat and Back Cushions When Furnished in 
Connection With Complex Rehabilitative Manual Wheelchairs.--
            (1) In general.--Notwithstanding any other provision of 
        law, the Secretary of Health and Human Services shall not, 
        during the period beginning on January 1, 2019, and ending on 
        June 30, 2020, use information on the payment determined under 
        the competitive acquisition programs under section 1847 of the 
        Social Security Act (42 U.S.C. 1395w-3) to adjust the payment 
        amount that would otherwise be recognized under section 
        1834(a)(1)(B)(ii) of such Act (42 U.S.C. 1395m(a)(1)(B)(ii)) 
        for wheelchair accessories (including seating systems) and seat 
        and back cushions when furnished in connection with complex 
        rehabilitative manual wheelchairs (as determined by the 
        Secretary), and certain manual wheelchairs (identified, as of 
        October 1, 2018, by HCPCS codes E1235, E1236, E1237, E1238, and 
        K0008 or any successor to such codes).
            (2) Implementation.--Notwithstanding any other provision of 
        law, the Secretary may implement this subsection by program 
        instruction or otherwise.
                                 <all>