Children's Health Insurance Program Reauthorization Act of 2009
PL 111-3 (H.R.2), enacted 02/04/2009

123 STAT. 8 
PUBLIC LAW 111–3—FEB. 4, 2009 
Public Law 111–3 
111th Congress 
An Act 
To amend title XXI of the Social Security Act to extend and improve the Children’s 
Health Insurance Program, 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; AMENDMENTS TO SOCIAL SECURITY ACT; 
REFERENCES; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the ‘‘Children’s 
Health Insurance Program Reauthorization Act of 2009’’. 
(b) AMENDMENTS TO SOCIAL SECURITY ACT.—Except as other-
wise specifically provided, whenever in this Act an amendment 
is expressed in terms of an amendment to or repeal of a section 
or other provision, the reference shall be considered to be made 
to that section or other provision of the Social Security Act. 
(c) REFERENCES TO CHIP; MEDICAID; SECRETARY.—In this Act: 
(1) CHIP.—The term ‘‘CHIP’’ means the State Children’s 
Health Insurance Program established under title XXI of the 
Social Security Act (42 U.S.C. 1397aa et seq.). 
(2) MEDICAID.—The term ‘‘Medicaid’’ means the program 
for medical assistance established under title XIX of the Social 
Security Act (42 U.S.C. 1396 et seq.). 
(3) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 
of Health and Human Services. 
(d) TABLE OF CONTENTS.—The table of contents of this Act 
is as follows: 
Sec. 1. Short title; amendments to Social Security Act; references; table of contents. 
Sec. 2. Purpose. 
Sec. 3. General effective date; exception for State legislation; contingent effective 
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 2009 through 2013. 
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. Two-year initial availability of CHIP allotments. 
Sec. 106. Redistribution of unused allotments. 
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. 
42 USC 1396 
note. 
42 USC 1305 
note. 
Children’s Health 
Insurance 
Program 
Reauthorization 
Act of 2009. 
Feb. 4, 2009 
[H.R. 2] 
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123 STAT. 9 
PUBLIC LAW 111–3—FEB. 4, 2009 
Sec. 112. Phase-out of coverage for nonpregnant childless adults under CHIP; con-
ditions for coverage of parents. 
Sec. 113. Elimination of counting Medicaid child presumptive eligibility costs 
against title XXI allotment. 
Sec. 114. Limitation on matching rate for States that propose to cover children with 
effective family income that exceeds 300 percent of the poverty line. 
Sec. 115. State authority under Medicaid. 
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 conduct 
simplified eligibility determinations. 
Subtitle B—Reducing Barriers to Enrollment 
Sec. 211. Verification of declaration of citizenship or nationality for purposes of eli-
gibility for Medicaid and CHIP. 
Sec. 212. Reducing administrative barriers to enrollment. 
Sec. 213. Model of Interstate coordinated enrollment and coverage process. 
Sec. 214. Permitting States to ensure coverage without a 5-year delay of certain 
children and pregnant women under the Medicaid program and CHIP. 
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 termination 
of Medicaid or CHIP coverage or eligibility for assistance 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 Med-
icaid or CHIP. 
Sec. 402. Improved availability of public information regarding enrollment of chil-
dren 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 Feder-
ally-qualified health centers and rural health clinics. 
Sec. 504. Premium grace period. 
Sec. 505. Clarification of coverage of services provided through school-based health 
centers. 
Sec. 506. Medicaid and CHIP Payment and Access Commission. 
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 ex-
penditures. 
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 demonstration 
programs. 
Sec. 614. Adjustment in computation of Medicaid FMAP to disregard an extraor-
dinary employer pension contribution. 
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123 STAT. 10 
PUBLIC LAW 111–3—FEB. 4, 2009 
Sec. 615. Clarification treatment of regional medical center. 
Sec. 616. Extension of Medicaid DSH allotments for Tennessee and Hawaii. 
Sec. 617. GAO report on Medicaid managed care payment rates. 
Subtitle C—Other Provisions 
Sec. 621. Outreach regarding health insurance options available to children. 
Sec. 622. Sense of the 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. Treasury study concerning magnitude of tobacco smuggling in the United 
States. 
Sec. 704. 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 LEGISLA-
TION; 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 April 1, 2009, 
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 Secretary of Health and Human 
Services determines requires State legislation in order for the 
respective plan to meet one or more additional requirements 
imposed by amendments 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 regular session of 
the State legislature that begins after the date of enactment of 
this Act. For purposes of the previous sentence, in the case of 
a State that has a 2-year legislative session, each year of the 
session shall be considered to be a separate regular session of 
the State legislature. 
(c) COORDINATION OF CHIP FUNDING FOR FISCAL YEAR 2009.— 
Notwithstanding any other provision of law, insofar as funds have 
been appropriated under section 2104(a)(11), 2104(k), or 2104(l) 
of the Social Security Act, as amended by section 201 of Public 
Law 110–173, to provide allotments to States under CHIP for 
fiscal year 2009— 
(1) any amounts that are so appropriated that are not 
so allotted and obligated before April 1, 2009 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 reduced by the amount of such appro-
priations so allotted and obligated before such date. 
(d) RELIANCE
ON LAW.—With respect to amendments made 
by this Act (other than title VII) that become effective as of a 
date— 
42 USC 1396 
note. 
42 USC 1396 
note. 
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123 STAT. 11 
PUBLIC LAW 111–3—FEB. 4, 2009 
(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 promulgation of final regulations, if any, to carry 
out such amendments (or before the date of guidance, if any, 
regarding the implementation of such amendments) 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 (10), by striking ‘‘and’’ at the end; 
(2) by amending paragraph (11), by striking ‘‘each of fiscal 
years 2008 and 2009’’ and inserting ‘‘fiscal year 2008’’; and 
(3) by adding at the end the following new paragraphs: 
‘‘(12) for fiscal year 2009, $10,562,000,000; 
‘‘(13) for fiscal year 2010, $12,520,000,000; 
‘‘(14) for fiscal year 2011, $13,459,000,000; 
‘‘(15) for fiscal year 2012, $14,982,000,000; and 
‘‘(16) for fiscal year 2013, for purposes of making 2 semi- 
annual allotments— 
‘‘(A) $2,850,000,000 for the period beginning on October 
1, 2012, and ending on March 31, 2013, and 
‘‘(B) $2,850,000,000 for the period beginning on April 
1, 2013, and ending on September 30, 2013.’’. 
SEC. 102. ALLOTMENTS FOR STATES AND TERRITORIES FOR FISCAL 
YEARS 2009 THROUGH 2013. 
Section 2104 (42 U.S.C. 1397dd) is amended— 
(1) in subsection (b)(1), by striking ‘‘subsection (d)’’ and 
inserting ‘‘subsections (d) and (m)’’; 
(2) in subsection (c)(1), by striking ‘‘subsection (d)’’ and 
inserting ‘‘subsections (d) and (m)(4)’’; and 
(3) by adding at the end the following new subsection: 
‘‘(m) ALLOTMENTS FOR FISCAL YEARS 2009 THROUGH 2013.— 
‘‘(1) FOR FISCAL YEAR 2009.— 
‘‘(A) FOR
THE
50
STATES
AND
THE
DISTRICT
OF 
COLUMBIA.—Subject to the succeeding provisions of this 
paragraph and paragraph (4), the Secretary shall allot 
for fiscal year 2009 from the amount made available under 
subsection (a)(12), to each of the 50 States and the District 
of Columbia 110 percent 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 2008, multiplied by the allot-
ment increase factor determined under paragraph (5) 
for fiscal year 2009. 
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123 STAT. 12 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(ii) The amount allotted to the State for fiscal 
year 2008 under subsection (b), multiplied by the allot-
ment increase factor determined under paragraph (5) 
for fiscal year 2009. 
‘‘(iii) The projected total Federal payments to the 
State under this title for fiscal year 2009, as deter-
mined on the basis of the February 2009 projections 
certified by the State to the Secretary by not later 
than March 31, 2009. 
‘‘(B) FOR
THE
COMMONWEALTHS
AND
TERRITORIES.— 
Subject to the succeeding provisions of this paragraph and 
paragraph (4), the Secretary shall allot for fiscal year 2009 
from the amount made available under subsection (a)(12) 
to each of the commonwealths and territories 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 1999 through 2008, multiplied by 
the allotment increase factor determined under paragraph 
(5) for fiscal year 2009, except that subparagraph (B) 
thereof shall be applied by substituting ‘the United States’ 
for ‘the State’. 
‘‘(C) ADJUSTMENT FOR QUALIFYING STATES.—In the case 
of a qualifying State described in paragraph (2) of section 
2105(g), the Secretary shall permit the State to submit 
a revised projection described in subparagraph (A)(iii) in 
order to take into account changes in such projections 
attributable to the application of paragraph (4) of such 
section. 
‘‘(2) FOR FISCAL YEARS 2010 THROUGH 2012.— 
‘‘(A) IN GENERAL.—Subject to paragraphs (4) and (6), 
from the amount made available under paragraphs (13) 
through (15) of subsection (a) for each of fiscal years 2010 
through 2012, respectively, the Secretary shall compute 
a State allotment for each State (including the District 
of Columbia and each commonwealth and territory) for 
each such fiscal year as follows: 
‘‘(i) GROWTH
FACTOR
UPDATE
FOR
FISCAL
YEAR 
2010.—For fiscal year 2010, the allotment of the State 
is equal to the sum of— 
‘‘(I) the amount of the State allotment under 
paragraph (1) for fiscal year 2009; and 
‘‘(II) the amount of any payments made to 
the State under subsection (k), (l), or (n) for fiscal 
year 2009, 
multiplied by the allotment increase factor under para-
graph (5) for fiscal year 2010. 
‘‘(ii) REBASING IN FISCAL YEAR 2011.—For fiscal year 
2011, the allotment of the State is equal to the Federal 
payments 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 
2010 (including payments made to the State under 
subsection (n) for fiscal year 2010 as well as amounts 
redistributed to the State in fiscal year 2010), multi-
plied by the allotment increase factor under paragraph 
(5) for fiscal year 2011. 
Applicability. 
Certification. 
Deadline. 
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123 STAT. 13 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(iii) GROWTH
FACTOR
UPDATE
FOR
FISCAL
YEAR 
2012.—For fiscal year 2012, the allotment of the State 
is equal to the sum of— 
‘‘(I) the amount of the State allotment under 
clause (ii) for fiscal year 2011; and 
‘‘(II) the amount of any payments made to 
the State under subsection (n) for fiscal year 2011, 
multiplied by the allotment increase factor under para-
graph (5) for fiscal year 2012. 
‘‘(3) FOR FISCAL YEAR 2013.— 
‘‘(A) FIRST HALF.—Subject to paragraphs (4) and (6), 
from the amount made available under subparagraph (A) 
of paragraph (16) of subsection (a) for the semi-annual 
period described in such paragraph, increased by the 
amount of the appropriation for such period under section 
108 of the Children’s Health Insurance Program Reauthor-
ization Act of 2009, the Secretary shall compute a State 
allotment for each State (including the District of Columbia 
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 paragraphs (4) and (6), 
from the amount made available under subparagraph (B) 
of paragraph (16) of subsection (a) for the semi-annual 
period 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-annual 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 
attributable to (and countable towards) the total amount 
of allotments available under this section to the State 
in fiscal year 2012 (including payments made to the State 
under subsection (n) for fiscal year 2012 as well as amounts 
redistributed to the State in fiscal year 2012), multiplied 
by the allotment increase factor under paragraph (5) for 
fiscal year 2013. 
‘‘(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 sub-
section (a)(16)(A); and 
‘‘(II) the amount of the appropriation for such 
period under section 108 of the Children’s Health 
Insurance Program Reauthorization Act of 2009; 
to 
‘‘(ii) the sum of the— 
‘‘(I) amount described in clause (i); and 
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123 STAT. 14 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(II) the amount made available under sub-
section (a)(16)(B). 
‘‘(4) PRORATION RULE.—If, after the application of this sub-
section without regard to this paragraph, the sum of the allot-
ments determined under paragraph (1), (2), or (3) for a fiscal 
year (or, in the case of fiscal year 2013, for a semi-annual 
period in such fiscal year) exceeds the amount available under 
subsection (a) for such fiscal year or period, 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 allotment 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 FACTOR.—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 expansion of eligibility for children 
or benefits under this title that becomes effective for a 
fiscal year (beginning with fiscal year 2010 and ending 
with fiscal year 2013); and 
‘‘(B) has submitted to the Secretary, before the August 
31 preceding the beginning of the fiscal year, a request 
for an expansion allotment adjustment under this para-
graph for such fiscal year that specifies— 
‘‘(i) the additional expenditures that are attrib-
utable to the eligibility or benefit expansion provided 
under the amendment or waiver described in subpara-
graph (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 additional expendi-
tures are projected to exceed the allotment of the State 
or District for the year, 
subject to paragraph (4), the amount of the allotment of the 
State or District under this subsection for such fiscal year 
shall be increased by the excess amount described in subpara-
graph (B)(i). A State or District may only obtain an increase 
under this paragraph for an allotment for fiscal year 2010 
or fiscal year 2012. 
‘‘(7) AVAILABILITY OF AMOUNTS FOR SEMI-ANNUAL PERIODS 
IN FISCAL YEAR 2013.—Each semi-annual allotment made under 
Certification. 
Deadline. 
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123 STAT. 15 
PUBLIC LAW 111–3—FEB. 4, 2009 
paragraph (3) for a period in fiscal year 2013 shall remain 
available for expenditure under this title for periods after the 
end of such fiscal year in the same manner as if the allotment 
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: 
‘‘(n) CHILD ENROLLMENT CONTINGENCY FUND.— 
‘‘(1) ESTABLISHMENT.—There is hereby established in the 
Treasury of the United States a fund which shall be known 
as the ‘Child Enrollment Contingency Fund’ (in this subsection 
referred to as the ‘Fund’). Amounts in the Fund shall be avail-
able without further appropriations for payments under this 
subsection. 
‘‘(2) DEPOSITS INTO FUND.— 
‘‘(A) INITIAL AND SUBSEQUENT APPROPRIATIONS.—Sub-
ject to subparagraphs (B) and (D), out of any money in 
the Treasury of the United States not otherwise appro-
priated, there are appropriated to the Fund— 
‘‘(i) for fiscal year 2009, an amount equal to 20 
percent of the amount made available under paragraph 
(12) of subsection (a) for the fiscal year; and 
‘‘(ii) for each of fiscal years 2010 through 2012 
(and for each of the semi-annual allotment periods 
for fiscal year 2013), 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 subparagraph (B). 
‘‘(B) AGGREGATE CAP.—The total amount available for 
payment from the Fund for each of fiscal years 2010 
through 2012 (and for each of the semi-annual allotment 
periods for fiscal year 2013), 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 Secretary 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 investments con-
stitutes a part of the Fund. 
‘‘(D) AVAILABILITY OF EXCESS FUNDS FOR PERFORMANCE 
BONUSES.—Any amounts in excess of the aggregate cap 
described in subparagraph (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 reduce the amount in the Fund by 
the amount so made available. 
‘‘(3) CHILD ENROLLMENT CONTINGENCY FUND PAYMENTS.— 
‘‘(A) IN GENERAL.—If a State’s expenditures under this 
title in fiscal year 2009, fiscal year 2010, fiscal year 2011, 
fiscal year 2012, or a semi-annual allotment period for 
fiscal year 2013, 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 
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123 STAT. 16 
PUBLIC LAW 111–3—FEB. 4, 2009 
it receives under subsection (f) that is available for expendi-
ture during such fiscal year or period, but including any 
carryover from a previous fiscal year) and if the average 
monthly unduplicated number of children 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 average number of such 
enrollees (as determined under subparagraph (B)) for that 
fiscal year or period, subject to subparagraph (D), the Sec-
retary shall pay to the State from the Fund an amount 
equal to the product of— 
‘‘(i) the amount by which such average monthly 
caseload exceeds such target number of enrollees; and 
‘‘(ii) the projected per capita expenditures under 
the State child health plan (as determined under 
subparagraph (C) for the fiscal year), multiplied by 
the enhanced FMAP (as defined in section 2105(b)) 
for the State and fiscal year involved (or in which 
the period occurs). 
‘‘(B) TARGET AVERAGE NUMBER OF CHILD ENROLLEES.— 
In this paragraph, the target average number of child 
enrollees for a State— 
‘‘(i) for fiscal year 2009 is equal to the monthly 
average unduplicated number of children enrolled in 
the State child health plan under this title (including 
such children receiving health care coverage through 
funds under this title pursuant to a waiver under 
section 1115) during fiscal year 2008 increased by the 
population growth for children in that State for the 
year ending on June 30, 2007 (as estimated by the 
Bureau of the Census) plus 1 percentage point; or 
‘‘(ii) for a subsequent fiscal year (or semi-annual 
period occurring in a fiscal year) is equal to the target 
average number of child enrollees for the State for 
the previous fiscal year increased by the child popu-
lation growth factor described in subsection (m)(5)(B) 
for the State for the prior fiscal year. 
‘‘(C) PROJECTED PER CAPITA EXPENDITURES.—For pur-
poses of subparagraph (A)(ii), the projected per capita 
expenditures under a State child health plan— 
‘‘(i) for fiscal year 2009 is equal to the average 
per capita expenditures (including both State and Fed-
eral financial participation) under such plan for the 
targeted low-income children counted in the average 
monthly caseload for purposes of this paragraph during 
fiscal year 2008, increased by the annual percentage 
increase in the projected per capita amount of National 
Health Expenditures (as estimated by the Secretary) 
for 2009; or 
‘‘(ii) for a subsequent fiscal year (or semi-annual 
period occurring in a fiscal year) is equal to the pro-
jected per capita expenditures under such plan for 
the previous fiscal year (as determined under clause 
(i) or this clause) increased by the annual percentage 
increase in the projected per capita amount of National 
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123 STAT. 17 
PUBLIC LAW 111–3—FEB. 4, 2009 
Health Expenditures (as estimated by the Secretary) 
for the year in which such subsequent fiscal year ends. 
‘‘(D) PRORATION RULE.—If the amounts available for 
payment from the Fund for a fiscal year or period are 
less than the total amount of payments determined under 
subparagraph (A) for the fiscal year or period, the amount 
to be paid under such subparagraph to each eligible State 
shall be reduced proportionally. 
‘‘(E) TIMELY
PAYMENT; 
RECONCILIATION.—Payment 
under this paragraph for a fiscal year or period shall be 
made before the end of the fiscal year or period based 
upon the most recent data for expenditures and enrollment 
and the provisions of subsection (e) of section 2105 shall 
apply to payments under this subsection in the same 
manner as they apply to payments under such section. 
‘‘(F) CONTINUED
REPORTING.—For purposes of this 
paragraph and subsection (f), the State shall submit to 
the Secretary the State’s projected Federal expenditures, 
even if the amount of such expenditures exceeds the total 
amount of allotments available to the State in such fiscal 
year or period. 
‘‘(G) APPLICATION
TO
COMMONWEALTHS
AND
TERRI-
TORIES.—No payment shall be made under this paragraph 
to a commonwealth or territory described in subsection 
(c)(3) until such time as the Secretary determines that 
there are in effect methods, satisfactory to the Secretary, 
for the collection and reporting of reliable data regarding 
the enrollment of children described in subparagraphs (A) 
and (B) in order to accurately determine the common-
wealth’s or territory’s eligibility for, and amount of pay-
ment, under this paragraph.’’. 
SEC. 104. CHIP PERFORMANCE BONUS PAYMENT TO OFFSET ADDI-
TIONAL ENROLLMENT COSTS RESULTING FROM ENROLL-
MENT AND RETENTION EFFORTS. 
Section 2105(a) (42 U.S.C. 1397ee(a)) is amended by adding 
at the end the following new paragraphs: 
‘‘(3) PERFORMANCE BONUS PAYMENT TO OFFSET ADDITIONAL 
MEDICAID AND CHIP CHILD ENROLLMENT COSTS RESULTING FROM 
ENROLLMENT AND RETENTION EFFORTS.— 
‘‘(A) IN GENERAL.—In addition to the payments made 
under paragraph (1), for each fiscal year (beginning with 
fiscal year 2009 and ending with fiscal year 2013), the 
Secretary shall pay from amounts made available under 
subparagraph (E), to each State that meets the condition 
under paragraph (4) for the fiscal year, an amount equal 
to the amount described in subparagraph (B) for the State 
and fiscal year. The payment under this paragraph shall 
be made, to a State for a fiscal year, as a single payment 
not later than the last day of the first calendar quarter 
of the following fiscal year. 
‘‘(B) AMOUNT
FOR
ABOVE
BASELINE
MEDICAID
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 
Deadline. 
Applicability. 
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123 STAT. 18 
PUBLIC LAW 111–3—FEB. 4, 2009 
tier above baseline child enrollees (as determined 
under subparagraph (C)(i)) under title XIX for the 
State and fiscal year, multiplied by 15 percent of the 
projected per capita State Medicaid 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 subparagraph (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 BASE-
LINE
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, respectively; exceeds 
‘‘(II) 
the 
baseline 
number 
of 
enrollees 
described in clause (iii) for the State and fiscal 
year under title XIX, respectively; 
but not to exceed 10 percent of the baseline number 
of enrollees described in subclause (II). 
‘‘(ii) 
SECOND
TIER
ABOVE
BASELINE
CHILD 
ENROLLEES.—The number of second 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 under 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 2009 is equal to the monthly 
average unduplicated number of qualifying chil-
dren enrolled in the State plan under title XIX 
during fiscal year 2007 increased by the population 
growth for children in that State from 2007 to 
2008 (as estimated by the Bureau of the Census) 
plus 4 percentage points, and further increased 
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123 STAT. 19 
PUBLIC LAW 111–3—FEB. 4, 2009 
by the population growth for children in that State 
from 2008 to 2009 (as estimated by the Bureau 
of the Census) plus 4 percentage points; 
‘‘(II) for each of fiscal years 2010, 2011, and 
2012, 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 from the calendar 
year in which the respective fiscal year begins 
to the succeeding calendar year (as estimated by 
the Bureau of the Census) plus 3.5 percentage 
points; 
‘‘(III) for each of fiscal years 2013, 2014, and 
2015, 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 from the calendar 
year in which the respective fiscal year begins 
to the succeeding calendar year (as estimated by 
the Bureau of the Census) plus 3 percentage 
points; and 
‘‘(IV) 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 from the calendar year in which 
the fiscal year involved begins to the succeeding 
calendar year (as estimated by the Bureau of the 
Census) plus 2 percentage points. 
‘‘(D) PROJECTED PER CAPITA STATE MEDICAID EXPENDI-
TURES.—For purposes of subparagraph (B), the projected 
per capita State Medicaid expenditures for a State and 
fiscal year under title XIX is equal to the average per 
capita expenditures (including both State and Federal 
financial participation) for children under the State plan 
under such title, including under waivers but not including 
such children eligible for assistance by virtue of the receipt 
of benefits under title XVI, for the most recent fiscal year 
for which actual data are available (as determined by the 
Secretary), increased (for each subsequent fiscal year up 
to and including the fiscal year involved) by the annual 
percentage increase in per capita amount of National 
Health Expenditures (as estimated by the Secretary) for 
the calendar year in which the respective subsequent fiscal 
year ends and multiplied by a State matching percentage 
equal to 100 percent minus the Federal medical assistance 
percentage (as defined in section 1905(b)) for the fiscal 
year involved. 
‘‘(E) AMOUNTS AVAILABLE FOR PAYMENTS.— 
‘‘(i) INITIAL APPROPRIATION.—Out of any money in 
the Treasury not otherwise appropriated, there are 
appropriated $3,225,000,000 for fiscal year 2009 for 
making payments under this paragraph, to be available 
until expended. 
‘‘(ii) 
TRANSFERS.—Notwithstanding 
any 
other 
provision of this title, the following amounts shall also 
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123 STAT. 20 
PUBLIC LAW 111–3—FEB. 4, 2009 
be available, without fiscal year limitation, for making 
payments under this paragraph: 
‘‘(I) UNOBLIGATED NATIONAL ALLOTMENT.— 
‘‘(aa) FISCAL YEARS 2009 THROUGH 2012.— 
As of December 31 of fiscal year 2009, and 
as of December 31 of each succeeding fiscal 
year through fiscal year 2012, the portion, if 
any, of the amount appropriated under sub-
section (a) for such fiscal year that is unobli-
gated for allotment to a State under subsection 
(m) 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 FISCAL YEAR 2013.— 
As of December 31 of fiscal year 2013, the 
portion, if any, of the sum of the amounts 
appropriated under subsection (a)(16)(A) and 
under section 108 of the Children’s Health 
Insurance Reauthorization Act of 2009 for the 
period beginning on October 1, 2012, and 
ending on March 31, 2013, that is unobligated 
for allotment to a State under subsection (m) 
for such fiscal year or set aside under sub-
section (b)(2) of section 2111 for such fiscal 
year. 
‘‘(cc) SECOND HALF OF FISCAL YEAR 2013.— 
As of June 30 of fiscal year 2013, the portion, 
if any, of the amount appropriated under sub-
section (a)(16)(B) for the period beginning on 
April 1, 2013, and ending on September 30, 
2013, that is unobligated for allotment to a 
State under subsection (m) for such fiscal year 
or set aside under subsection (b)(2) of section 
2111 for such fiscal year. 
‘‘(II) UNEXPENDED ALLOTMENTS NOT USED FOR 
REDISTRIBUTION.—As of November 15 of each of 
fiscal years 2010 through 2013, the total amount 
of allotments made to States under section 2104 
for the second preceding fiscal year (third pre-
ceding fiscal year in the case of the fiscal year 
2006, 2007, and 2008 allotments) that is not 
expended or redistributed under section 2104(f) 
during the period in which such allotments are 
available for obligation. 
‘‘(III) EXCESS
CHILD
ENROLLMENT
CONTIN-
GENCY FUNDS.—As of October 1 of each of fiscal 
years 2010 through 2013, any amount in excess 
of the aggregate cap applicable to the Child Enroll-
ment Contingency Fund for the fiscal year under 
section 2104(n). 
‘‘(IV) UNEXPENDED
TRANSITIONAL
COVERAGE 
BLOCK
GRANT
FOR
NONPREGNANT
CHILDLESS 
ADULTS.—As of October 1, 2011, any amounts set 
aside under section 2111(a)(3) that are not 
expended by September 30, 2011. 
‘‘(iii) PROPORTIONAL REDUCTION.—If the sum of the 
amounts otherwise payable under this paragraph for 
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123 STAT. 21 
PUBLIC LAW 111–3—FEB. 4, 2009 
a fiscal year exceeds 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.— 
‘‘(i) IN GENERAL.—For purposes of this subsection, 
subject to clauses (ii) and (iii), the term ‘qualifying 
children’ means children who meet the eligibility cri-
teria (including income, categorical eligibility, age, and 
immigration status criteria) in effect as of July 1, 2008, 
for enrollment under title XIX, taking into account 
criteria applied as of such date under title XIX pursu-
ant to a waiver under section 1115. 
‘‘(ii) LIMITATION.—A child described in clause (i) 
who is provided medical assistance during a presump-
tive eligibility period under section 1920A shall be 
considered to be a ‘qualifying child’ only if the child 
is determined to be eligible for medical assistance 
under title XIX. 
‘‘(iii) EXCLUSION.—Such term does not include any 
children for whom the State has made an election 
to provide medical assistance under paragraph (4) of 
section 1903(v). 
‘‘(G) APPLICATION
TO
COMMONWEALTHS
AND
TERRI-
TORIES.—The provisions of subparagraph (G) of section 
2104(n)(3) shall apply with respect to payment under this 
paragraph in the same manner as such provisions apply 
to payment under such section. 
‘‘(H) APPLICATION TO STATES THAT IMPLEMENT A MED-
ICAID EXPANSION FOR CHILDREN AFTER FISCAL YEAR 2008.— 
In the case of a State that provides coverage under section 
115 of the Children’s Health Insurance Program Reauthor-
ization Act of 2009 for any fiscal year after fiscal year 
2008— 
‘‘(i) any child enrolled in the State plan under 
title XIX through the application of such an election 
shall be disregarded 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 number of child 
enrollees for the State for any fiscal year subsequent 
to such first 3 fiscal years, the baseline number of 
child enrollees 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 PROVISIONS FOR CHIL-
DREN.—For purposes of paragraph (3)(A), a State meets the 
condition of this paragraph for a fiscal year if it is implementing 
at least 5 of the following enrollment and retention provisions 
(treating each subparagraph as a separate enrollment and 
retention provision) throughout the entire fiscal year: 
‘‘(A) CONTINUOUS ELIGIBILITY.—The State has elected 
the option of continuous eligibility for a full 12 months 
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123 STAT. 22 
PUBLIC LAW 111–3—FEB. 4, 2009 
for all children described in section 1902(e)(12) under title 
XIX under 19 years of age, as well as applying such policy 
under its State child health plan under this title. 
‘‘(B) LIBERALIZATION
OF
ASSET
REQUIREMENTS.—The 
State meets the requirement specified in either of the fol-
lowing clauses: 
‘‘(i) ELIMINATION OF ASSET TEST.—The State does 
not apply any asset or resource test for eligibility for 
children under title XIX or this title. 
‘‘(ii) ADMINISTRATIVE
VERIFICATION
OF
ASSETS.— 
The State— 
‘‘(I) permits a parent or caretaker relative who 
is applying on behalf of a child for medical assist-
ance under title XIX or child health assistance 
under this title to declare and certify by signature 
under penalty of perjury information relating to 
family assets for purposes of determining and 
redetermining financial eligibility; and 
‘‘(II) takes steps to verify assets through 
means other than by requiring documentation from 
parents and applicants except in individual cases 
of discrepancies or where otherwise justified. 
‘‘(C) ELIMINATION OF IN-PERSON INTERVIEW REQUIRE-
MENT.—The State does not require an application of a 
child for medical assistance under title XIX (or for child 
health assistance under this title), including an application 
for renewal of such assistance, to be made in person nor 
does the State require a face-to-face interview, unless there 
are discrepancies or individual circumstances justifying an 
in-person application or face-to-face interview. 
‘‘(D) USE
OF
JOINT
APPLICATION
FOR
MEDICAID
AND 
CHIP.—The application form and supplemental forms (if 
any) and information verification process is the same for 
purposes of establishing and renewing eligibility for chil-
dren for medical assistance under title XIX and child health 
assistance under this title. 
‘‘(E) AUTOMATIC
RENEWAL
(USE
OF
ADMINISTRATIVE 
RENEWAL).— 
‘‘(i) IN GENERAL.—The State provides, in the case 
of renewal of a child’s eligibility for medical assistance 
under title XIX or child health assistance under this 
title, a pre-printed form completed by the State based 
on the information available to the State and notice 
to the parent or caretaker relative of the child that 
eligibility of the child will be renewed and continued 
based on such information unless the State is provided 
other information. Nothing in this clause shall be con-
strued as preventing a State from verifying, through 
electronic and other means, the information so pro-
vided. 
‘‘(ii) SATISFACTION THROUGH DEMONSTRATED USE 
OF EX PARTE PROCESS.—A State shall be treated as 
satisfying the requirement of clause (i) if renewal of 
eligibility of children under title XIX or this title is 
determined without any requirement for an in-person 
interview, unless sufficient information is not in the 
State’s possession and cannot be acquired from other 
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123 STAT. 23 
PUBLIC LAW 111–3—FEB. 4, 2009 
sources (including other State agencies) without the 
participation of the applicant or the applicant’s parent 
or caretaker relative. 
‘‘(F) PRESUMPTIVE
ELIGIBILITY
FOR
CHILDREN.—The 
State is implementing section 1920A under title XIX as 
well as, pursuant to section 2107(e)(1), under this title. 
‘‘(G) EXPRESS LANE.—The State is implementing the 
option described in section 1902(e)(13) under title XIX as 
well as, pursuant to section 2107(e)(1), under this title. 
‘‘(H) PREMIUM
ASSISTANCE
SUBSIDIES.—The State is 
implementing the option of providing premium assistance 
subsidies under section 2105(c)(10) or section 1906A.’’. 
SEC. 105. TWO-YEAR INITIAL AVAILABILITY OF CHIP ALLOTMENTS. 
Section 2104(e) (42 U.S.C. 1397dd(e)) is amended to read as 
follows: 
‘‘(e) AVAILABILITY OF AMOUNTS ALLOTTED.— 
‘‘(1) IN GENERAL.—Except as provided in paragraph (2), 
amounts allotted to a State pursuant to this section— 
‘‘(A) for each of fiscal years 1998 through 2008, shall 
remain available for expenditure by the State through the 
end of the second succeeding fiscal year; and 
‘‘(B) for fiscal year 2009 and each fiscal year thereafter, 
shall remain available for expenditure by the State through 
the end of the succeeding fiscal year. 
‘‘(2) AVAILABILITY OF AMOUNTS REDISTRIBUTED.—Amounts 
redistributed to a State under subsection (f) shall be available 
for expenditure by the State through the end of the fiscal 
year in which they are redistributed.’’. 
SEC. 106. REDISTRIBUTION OF UNUSED ALLOTMENTS. 
(a) BEGINNING WITH FISCAL YEAR 2007.— 
(1) IN GENERAL.—Section 2104(f) (42 U.S.C. 1397dd(f)) is 
amended— 
(A) by striking ‘‘The Secretary’’ and inserting the fol-
lowing: 
‘‘(1) IN GENERAL.—The Secretary’’; 
(B) 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 allotments are 
available for redistribution under this subsection, are short-
fall States described in paragraph (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 
(C) by adding at the end the following new paragraph: 
‘‘(2) SHORTFALL STATES DESCRIBED.— 
‘‘(A) IN GENERAL.—For purposes of paragraph (1), with 
respect to a fiscal year, a shortfall State described in this 
subparagraph is a State with a State child health plan 
approved under this title for which the Secretary estimates 
on the basis of the most recent data available to the Sec-
retary, that the projected expenditures under such plan 
for the State for the fiscal year will exceed the sum of— 
‘‘(i) the amount of the State’s allotments for any 
preceding fiscal years that remains available for 
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123 STAT. 24 
PUBLIC LAW 111–3—FEB. 4, 2009 
expenditure and that will not be expended by the end 
of the immediately preceding fiscal year; 
‘‘(ii) the amount (if any) of the child enrollment 
contingency fund payment under subsection (n); and 
‘‘(iii) the amount of the State’s allotment 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 determinations made under para-
graph (1) and this paragraph with respect to a fiscal year 
as necessary on the basis of the amounts reported by 
States not later than November 30 of the succeeding fiscal 
year, as approved by the Secretary.’’. 
(2) EFFECTIVE DATE.—The amendments made by paragraph 
(1) shall apply to redistribution of allotments made for fiscal 
year 2007 and subsequent fiscal years. 
(b) REDISTRIBUTION OF UNUSED ALLOTMENTS FOR FISCAL YEAR 
2006.—Section 2104(k) (42 U.S.C. 1397dd(k)) is amended— 
(1) in the subsection heading, by striking ‘‘THE FIRST 2 
QUARTERS OF’’; 
(2) in paragraph (1), by striking ‘‘the first 2 quarters of’’; 
and 
(3) in paragraph (6)— 
(A) by striking ‘‘the first 2 quarters of’’; and 
(B) by striking ‘‘March 31’’ and inserting ‘‘September 
30’’. 
SEC. 107. OPTION FOR QUALIFYING STATES TO RECEIVE THE 
ENHANCED PORTION OF THE CHIP MATCHING RATE FOR 
MEDICAID COVERAGE OF CERTAIN CHILDREN. 
(a) IN GENERAL.—Section 2105(g) (42 U.S.C. 1397ee(g)) is 
amended— 
(1) in paragraph (1)(A), as amended by section 201(b)(1) 
of Public Law 110–173— 
(A) by inserting ‘‘subject to paragraph (4),’’ after ‘‘Not-
withstanding any other provision of law,’’; and 
(B) by striking ‘‘2008, or 2009’’ and inserting ‘‘or 2008’’; 
and 
(2) by adding at the end the following new paragraph: 
‘‘(4) OPTION
FOR
ALLOTMENTS
FOR
FISCAL
YEARS
2009 
THROUGH 2013.— 
‘‘(A) PAYMENT
OF
ENHANCED
PORTION
OF
MATCHING 
RATE FOR CERTAIN EXPENDITURES.—In the case of expendi-
tures described in subparagraph (B), a qualifying State 
(as defined in paragraph (2)) may elect to be paid from 
the State’s allotment made under section 2104 for any 
of fiscal years 2009 through 2013 (insofar as the allotment 
is available to the State under subsections (e) and (m) 
of such section) 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 expenditures if the 
enhanced FMAP (as determined under subsection (b)) had 
42 USC 1397dd 
note. 
Deadline. 
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123 STAT. 25 
PUBLIC LAW 111–3—FEB. 4, 2009 
been substituted for the Federal medical assistance 
percentage (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 attained 
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 exceeds 133 percent of the poverty line but does 
not exceed the Medicaid applicable income level.’’. 
(b) REPEAL OF LIMITATION ON AVAILABILITY OF FISCAL YEAR 
2009 ALLOTMENTS.—Paragraph (2) of section 201(b) of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110– 
173) is repealed. 
SEC. 108. ONE-TIME APPROPRIATION. 
There is appropriated to the Secretary, out of any money in 
the Treasury not otherwise appropriated, $11,706,000,000 to accom-
pany the allotment made for the period beginning on October 1, 
2012, and ending on March 31, 2013, under section 2104(a)(16)(A) 
of the Social Security Act (42 U.S.C. 1397dd(a)(16)(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(m) of the Social Security Act (42 U.S.C. 
1397dd(i)), as added by section 102, for the first 6 months of 
fiscal year 2013 in the same manner as allotments are provided 
under subsection (a)(16)(A) of such section 2104 and subject to 
the same terms and conditions as apply to the allotments provided 
from such subsection (a)(16)(A). 
SEC. 109. IMPROVING FUNDING FOR THE TERRITORIES UNDER CHIP 
AND MEDICAID. 
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 
2009, if Puerto Rico, the Virgin Islands, Guam, the Northern 
Mariana Islands, or American Samoa qualify for a payment 
under subparagraph (A)(i), (B), or (F) of section 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.’’. 
42 USC 1397ee 
note. 
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123 STAT. 26 
PUBLIC LAW 111–3—FEB. 4, 2009 
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. 
(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-INCOME PREG-
NANT WOMEN THROUGH A STATE PLAN AMENDMENT. 
‘‘(a) IN GENERAL.—Subject to the succeeding provisions of this 
section, a State may elect through an amendment 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 satisfied: 
‘‘(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, 2008; 
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 MEDICAID LEVEL.—The State 
does not apply an effective income level for pregnant women 
under the State plan amendment that is lower than the effective 
income level (expressed as a percent of the poverty line and 
considering applicable income disregards) specified under sub-
section (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 eligible 
for medical assistance as a pregnant woman. 
‘‘(3) NO COVERAGE FOR HIGHER INCOME PREGNANT WOMEN 
WITHOUT
COVERING
LOWER
INCOME
PREGNANT
WOMEN.—The 
State does not provide coverage for pregnant women with 
higher family income without covering pregnant women with 
a lower family income. 
‘‘(4) APPLICATION OF REQUIREMENTS FOR COVERAGE OF TAR-
GETED 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 targeted 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 
42 USC 1397ll 
note. 
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123 STAT. 27 
PUBLIC LAW 111–3—FEB. 4, 2009 
for pregnancy-related assistance based on any preexisting condi-
tion or any waiting period (including any waiting period 
imposed to carry out section 2102(b)(3)(C)) for receipt of such 
assistance. 
‘‘(6) APPLICATION OF COST-SHARING PROTECTION.—The State 
provides pregnancy-related assistance to a targeted low-income 
woman consistent with the cost-sharing protections under sec-
tion 2103(e) and applies the limitation on total annual aggre-
gate cost sharing imposed under paragraph (3)(B) of such sec-
tion to the family of such a woman. 
‘‘(7) NO WAITING LIST FOR CHILDREN.—The State does not 
impose, with respect to the enrollment under the State child 
health plan of targeted low-income children during the quarter, 
any enrollment cap or other numerical limitation on enrollment, 
any waiting list, any procedures designed to delay the consider-
ation of applications for enrollment, or similar limitation with 
respect to enrollment. 
‘‘(c) OPTION TO PROVIDE PRESUMPTIVE ELIGIBILITY.—A State 
that elects the option under subsection (a) and satisfies the condi-
tions described in subsection (b) may elect to apply section 1920 
(relating to presumptive eligibility for pregnant women) to the 
State child health plan in the same manner as such section applies 
to the State plan under title XIX. 
‘‘(d) DEFINITIONS.—For purposes of this section: 
‘‘(1) PREGNANCY-RELATED
ASSISTANCE.—The term ‘preg-
nancy-related assistance’ has the meaning given the term ‘child 
health assistance’ in section 2110(a) with respect to an indi-
vidual during the period described in paragraph (2)(A). 
‘‘(2) TARGETED LOW-INCOME PREGNANT WOMAN.—The term 
‘targeted low-income pregnant woman’ means an individual— 
‘‘(A) during pregnancy and through the end of the 
month in which the 60-day period (beginning on the last 
day of her pregnancy) ends; 
‘‘(B) whose family income exceeds 185 percent (or, if 
higher, the percent applied under subsection (b)(1)(A)) of 
the poverty line applicable to a family of the size involved, 
but does not exceed the income eligibility level established 
under the State child health plan under this title for a 
targeted low-income child; and 
‘‘(C) who satisfies the requirements of paragraphs 
(1)(A), (1)(C), (2), and (3) of section 2110(b) in the same 
manner as a child applying for child health assistance 
would have to satisfy such requirements. 
‘‘(e) AUTOMATIC ENROLLMENT FOR CHILDREN BORN TO WOMEN 
RECEIVING PREGNANCY-RELATED ASSISTANCE.—If a child is born 
to a targeted low-income pregnant woman who was receiving preg-
nancy-related assistance under this section on the date of the child’s 
birth, the child shall be deemed to have applied for child health 
assistance under the State child health plan and to have been 
found eligible for such assistance under such plan or to have applied 
for medical assistance under title XIX and to have been found 
eligible for such assistance under such title, as appropriate, on 
the date of such birth and to remain eligible for such assistance 
until the child attains 1 year of age. During the period in which 
a child is deemed under the preceding sentence to be eligible for 
child health or medical assistance, the child health or medical 
assistance eligibility identification number of the mother shall also 
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123 STAT. 28 
PUBLIC LAW 111–3—FEB. 4, 2009 
serve as the identification number of the child, and all claims 
shall be submitted and paid under such number (unless the State 
issues a separate identification number for the child before such 
period expires). 
‘‘(f) STATES PROVIDING ASSISTANCE THROUGH OTHER OPTIONS.— 
‘‘(1) CONTINUATION
OF
OTHER
OPTIONS
FOR
PROVIDING 
ASSISTANCE.—The option to provide assistance in accordance 
with the preceding subsections of this section shall not limit 
any other option for a State to provide— 
‘‘(A) child health assistance through the application 
of 
sections 
457.10, 
457.350(b)(2), 
457.622(c)(5), 
and 
457.626(a)(3) of title 42, Code of Federal Regulations (as 
in effect after the final rule adopted by the Secretary and 
set forth at 67 Fed. Reg. 61956–61974 (October 2, 2002)), 
or 
‘‘(B) pregnancy-related services through the application 
of any waiver authority (as in effect on June 1, 2008). 
‘‘(2) CLARIFICATION OF AUTHORITY TO PROVIDE POSTPARTUM 
SERVICES.—Any State that provides child health assistance 
under any authority described in paragraph (1) may continue 
to provide such assistance, as well as postpartum services, 
through the end of the month in which the 60-day period 
(beginning on the last day of the pregnancy) ends, in the 
same manner as such assistance and postpartum services would 
be provided if provided under the State plan under title XIX, 
but only if the mother would otherwise satisfy the eligibility 
requirements that apply under the State child health plan 
(other than with respect to age) during such period. 
‘‘(3) NO INFERENCE.—Nothing in this subsection shall be 
construed— 
‘‘(A) to infer congressional intent regarding the legality 
or illegality of the content of the sections specified in para-
graph (1)(A); or 
‘‘(B) to modify the authority to provide pregnancy- 
related services under a waiver specified in paragraph 
(1)(B).’’. 
(b) ADDITIONAL CONFORMING AMENDMENTS.— 
(1) NO COST SHARING FOR PREGNANCY-RELATED BENEFITS.— 
Section 2103(e)(2) (42 U.S.C. 1397cc(e)(2)) is amended— 
(A) in the heading, by inserting ‘‘OR
PREGNANCY- 
RELATED
ASSISTANCE’’ after ‘‘PREVENTIVE
SERVICES’’; and 
(B) by inserting before the period at the end the fol-
lowing: ‘‘or for pregnancy-related assistance’’. 
(2) NO WAITING PERIOD.—Section 2102(b)(1)(B) (42 U.S.C. 
1397bb(b)(1)(B)) is amended— 
(A) in clause (i), by striking ‘‘, and’’ at the end and 
inserting a semicolon; 
(B) in clause (ii), by striking the period at the end 
and inserting ‘‘; and’’; and 
(C) by adding at the end the following new clause: 
‘‘(iii) may not apply a waiting period (including 
a waiting period to carry out paragraph (3)(C)) in the 
case of a targeted low-income pregnant woman pro-
vided pregnancy-related assistance under section 
2112.’’. 
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123 STAT. 29 
PUBLIC LAW 111–3—FEB. 4, 2009 
SEC. 112. PHASE-OUT OF COVERAGE FOR NONPREGNANT CHILDLESS 
ADULTS UNDER CHIP; CONDITIONS FOR COVERAGE OF 
PARENTS. 
(a) PHASE-OUT RULES.— 
(1) IN GENERAL.—Title XXI (42 U.S.C. 1397aa et seq.) is 
amended by adding at the end the following new section: 
‘‘SEC. 2111. PHASE-OUT OF COVERAGE FOR NONPREGNANT CHILDLESS 
ADULTS; CONDITIONS FOR COVERAGE OF PARENTS. 
‘‘(a) TERMINATION OF COVERAGE FOR NONPREGNANT CHILDLESS 
ADULTS.— 
‘‘(1) NO
NEW
CHIP
WAIVERS; AUTOMATIC
EXTENSIONS
AT 
STATE OPTION THROUGH 2009.—Notwithstanding section 1115 
or any other provision of this title, except as provided in this 
subsection— 
‘‘(A) the Secretary shall not on or after the date of 
the enactment of the Children’s Health Insurance Program 
Reauthorization Act of 2009, approve or renew a waiver, 
experimental, pilot, or demonstration project that would 
allow funds made available under this title to be used 
to provide child health assistance or other health benefits 
coverage to a nonpregnant childless adult; and 
‘‘(B) notwithstanding the terms and conditions of an 
applicable existing waiver, the provisions of paragraph (2) 
shall apply for purposes of any period beginning on or 
after January 1, 2010, in determining the period to which 
the waiver applies, the individuals eligible to be covered 
by the waiver, and the amount of the Federal payment 
under this title. 
‘‘(2) TERMINATION OF CHIP COVERAGE UNDER APPLICABLE 
EXISTING WAIVERS AT THE END OF 2009.— 
‘‘(A) IN GENERAL.—No funds shall be available under 
this title for child health assistance or other health benefits 
coverage that is provided to a nonpregnant childless adult 
under an applicable existing waiver after December 31, 
2009. 
‘‘(B) EXTENSION UPON STATE REQUEST.—If an applicable 
existing waiver described in subparagraph (A) would other-
wise expire before January 1, 2010, notwithstanding the 
requirements of subsections (e) and (f) of section 1115, 
a State may submit, not later than September 30, 2009, 
a request to the Secretary for an extension of the waiver. 
The Secretary shall approve a request for an extension 
of an applicable existing waiver submitted pursuant to 
this subparagraph, but only through December 31, 2009. 
‘‘(C) APPLICATION OF ENHANCED FMAP.—The enhanced 
FMAP determined under section 2105(b) shall apply to 
expenditures under an applicable existing waiver for the 
provision of child health assistance or other health benefits 
coverage to a nonpregnant childless adult during the period 
beginning on the date of the enactment of this subsection 
and ending on December 31, 2009. 
‘‘(3) STATE OPTION TO APPLY FOR MEDICAID WAIVER TO CON-
TINUE COVERAGE FOR NONPREGNANT CHILDLESS ADULTS.— 
‘‘(A) IN GENERAL.—Each State for which coverage under 
an applicable existing waiver is terminated under para-
graph (2)(A) may submit, not later than September 30, 
Deadline. 
Deadline. 
Applicability. 
42 USC 1397kk. 
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123 STAT. 30 
PUBLIC LAW 111–3—FEB. 4, 2009 
2009, an application to the Secretary for a waiver under 
section 1115 of the State plan under title XIX to provide 
medical assistance to a nonpregnant childless adult whose 
coverage is so terminated (in this subsection referred to 
as a ‘Medicaid nonpregnant childless adults waiver’). 
‘‘(B) DEADLINE
FOR
APPROVAL.—The Secretary shall 
make a decision to approve or deny an application for 
a Medicaid nonpregnant childless adults waiver submitted 
under subparagraph (A) within 90 days of the date of 
the submission of the application. If no decision has been 
made by the Secretary as of December 31, 2009, on the 
application of a State for a Medicaid nonpregnant childless 
adults waiver that was submitted to the Secretary by Sep-
tember 30, 2009, the application shall be deemed approved. 
‘‘(C) STANDARD FOR BUDGET NEUTRALITY.—The budget 
neutrality requirement applicable with respect to expendi-
tures for medical assistance under a Medicaid nonpregnant 
childless adults waiver shall— 
‘‘(i) in the case of fiscal year 2010, allow expendi-
tures for medical assistance under title XIX for all 
such adults to not exceed the total amount of payments 
made to the State under paragraph (2)(B) for fiscal 
year 2009, increased by the percentage increase (if 
any) in the projected nominal per capita amount of 
National Health Expenditures for 2010 over 2009, as 
most recently published by the Secretary; and 
‘‘(ii) in the case of any succeeding fiscal year, allow 
such expenditures to not exceed the amount in effect 
under this subparagraph for the preceding fiscal year, 
increased by the percentage increase (if any) in the 
projected nominal per capita amount of National 
Health Expenditures for the calendar year that begins 
during the year involved over the preceding calendar 
year, as most recently published by the Secretary. 
‘‘(b) RULES AND CONDITIONS FOR COVERAGE OF PARENTS OF 
TARGETED LOW-INCOME CHILDREN.— 
‘‘(1) TWO-YEAR
PERIOD; AUTOMATIC
EXTENSION
AT
STATE 
OPTION THROUGH FISCAL YEAR 2011.— 
‘‘(A) NO NEW CHIP WAIVERS.—Notwithstanding section 
1115 or any other provision of this title, except as provided 
in this subsection— 
‘‘(i) the Secretary shall not on or after the date 
of the enactment of the Children’s Health Insurance 
Program Reauthorization Act of 2009 approve or renew 
a waiver, experimental, pilot, or demonstration project 
that would allow funds made available under this title 
to be used to provide child health assistance or other 
health benefits coverage to a parent of a targeted low- 
income child; and 
‘‘(ii) notwithstanding the terms and conditions of 
an applicable existing waiver, the provisions of para-
graphs (2) and (3) shall apply for purposes of any 
fiscal year beginning on or after October 1, 2011, in 
determining the period to which the waiver applies, 
the individuals eligible to be covered by the waiver, 
and the amount of the Federal payment under this 
title. 
Applicability. 
Effective date. 
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123 STAT. 31 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(B) EXTENSION UPON STATE REQUEST.—If an applicable 
existing waiver described in subparagraph (A) would other-
wise expire before October 1, 2011, and the State requests 
an extension of such waiver, the Secretary shall grant 
such an extension, but only, subject to paragraph (2)(A), 
through September 30, 2011. 
‘‘(C) APPLICATION OF ENHANCED FMAP.—The enhanced 
FMAP determined under section 2105(b) shall apply to 
expenditures under an applicable existing waiver for the 
provision of child health assistance or other health benefits 
coverage to a parent of a targeted low-income child during 
the third and fourth quarters of fiscal year 2009 and during 
fiscal years 2010 and 2011. 
‘‘(2) RULES FOR FISCAL YEARS 2012 THROUGH 2013.— 
‘‘(A) PAYMENTS FOR COVERAGE LIMITED TO BLOCK GRANT 
FUNDED FROM STATE ALLOTMENT.—Any State that provides 
child health assistance or health benefits coverage under 
an applicable existing waiver for a parent of a targeted 
low-income child may elect to continue to provide such 
assistance or coverage through fiscal year 2012 or 2013, 
subject to the same terms and conditions that applied 
under the applicable existing waiver, unless otherwise 
modified in subparagraph (B). 
‘‘(B) TERMS AND CONDITIONS.— 
‘‘(i) BLOCK GRANT SET ASIDE FROM STATE ALLOT-
MENT.—If the State makes an election under subpara-
graph (A), the Secretary shall set aside for the State 
for each such fiscal year an amount equal to the Fed-
eral share of 110 percent of the State’s projected 
expenditures under the applicable existing waiver for 
providing child health assistance or health benefits 
coverage to all parents of targeted low-income children 
enrolled under such waiver for the fiscal year (as cer-
tified by the State and submitted to the Secretary 
by not later than August 31 of the preceding fiscal 
year). In the case of fiscal year 2013, the set aside 
for any State shall be computed separately for each 
period described in subparagraphs (A) and (B) of sec-
tion 2104(a)(16) and any reduction in the allotment 
for either such period under section 2104(m)(4) shall 
be allocated on a pro rata basis to such set aside. 
‘‘(ii) PAYMENTS FROM BLOCK GRANT.—The Secretary 
shall pay the State from the amount set aside under 
clause (i) for the fiscal year, an amount for each quarter 
of such fiscal year equal to the applicable percentage 
determined under clause (iii) or (iv) for expenditures 
in the quarter for providing child health assistance 
or other health benefits coverage to a parent of a 
targeted low-income child. 
‘‘(iii) ENHANCED FMAP ONLY IN FISCAL YEAR 2012 
FOR
STATES
WITH
SIGNIFICANT
CHILD
OUTREACH
OR 
THAT ACHIEVE CHILD COVERAGE BENCHMARKS; FMAP FOR 
ANY OTHER STATES.—For purposes of clause (ii), the 
applicable percentage for any quarter of fiscal year 
2012 is equal to— 
‘‘(I) the enhanced FMAP determined under 
section 2105(b) in the case of a State that meets 
Certification. 
Deadline. 
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123 STAT. 32 
PUBLIC LAW 111–3—FEB. 4, 2009 
the outreach or coverage benchmarks described 
in any of subparagraph (A), (B), or (C) of paragraph 
(3) for fiscal year 2011; or 
‘‘(II) the Federal medical assistance percentage 
(as determined under section 1905(b) without 
regard to clause (4) of such section) in the case 
of any other State. 
‘‘(iv) AMOUNT OF FEDERAL MATCHING PAYMENT IN 
2013.—For purposes of clause (ii), the applicable 
percentage for any quarter of fiscal year 2013 is equal 
to— 
‘‘(I) the REMAP percentage if— 
‘‘(aa) the applicable percentage for the 
State under clause (iii) was the enhanced 
FMAP for fiscal year 2012; and 
‘‘(bb) the State met either of the coverage 
benchmarks described in subparagraph (B) or 
(C) of paragraph (3) for fiscal year 2012; or 
‘‘(II) the Federal medical assistance percentage 
(as so determined) in the case of any State to 
which subclause (I) does not apply. 
For purposes of subclause (I), the REMAP percentage 
is the percentage which is the sum of such Federal 
medical assistance percentage and a number of 
percentage points equal to one-half of the difference 
between such Federal medical assistance percentage 
and such enhanced FMAP. 
‘‘(v) NO
FEDERAL
PAYMENTS
OTHER
THAN
FROM 
BLOCK GRANT SET ASIDE.—No payments shall be made 
to a State for expenditures described in clause (ii) 
after the total amount set aside under clause (i) for 
a fiscal year has been paid to the State. 
‘‘(vi) NO INCREASE IN INCOME ELIGIBILITY LEVEL 
FOR PARENTS.—No payments shall be made to a State 
from the amount set aside under clause (i) for a fiscal 
year for expenditures for providing child health assist-
ance or health benefits coverage to a parent of a tar-
geted low-income child whose family income exceeds 
the income eligibility level applied under the applicable 
existing waiver to parents of targeted low-income chil-
dren on the date of enactment of the Children’s Health 
Insurance Program Reauthorization Act of 2009. 
‘‘(3) OUTREACH OR COVERAGE BENCHMARKS.—For purposes 
of paragraph (2), the outreach or coverage benchmarks 
described in this paragraph are as follows: 
‘‘(A) SIGNIFICANT
CHILD
OUTREACH
CAMPAIGN.—The 
State— 
‘‘(i) was awarded a grant under section 2113 for 
fiscal year 2011; 
‘‘(ii) implemented 1 or more of the enrollment and 
retention provisions described in section 2105(a)(4) for 
such fiscal year; or 
‘‘(iii) has submitted a specific plan for outreach 
for such fiscal year. 
‘‘(B) HIGH-PERFORMING STATE.—The State, on the basis 
of the most timely and accurate published estimates of 
the Bureau of the Census, ranks in the lowest 1⁄3 of States 
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123 STAT. 33 
PUBLIC LAW 111–3—FEB. 4, 2009 
in terms of the State’s percentage of low-income children 
without health insurance. 
‘‘(C) STATE INCREASING ENROLLMENT OF LOW-INCOME 
CHILDREN.—The State qualified for a performance bonus 
payment under section 2105(a)(3)(B) for the most recent 
fiscal year applicable under such section. 
‘‘(4) RULES OF CONSTRUCTION.—Nothing in this subsection 
shall be construed as prohibiting a State from submitting an 
application to the Secretary for a waiver under section 1115 
of the State plan under title XIX to provide medical assistance 
to a parent of a targeted low-income child that was provided 
child health assistance or health benefits coverage under an 
applicable existing waiver. 
‘‘(c) APPLICABLE EXISTING WAIVER.—For purposes of this sec-
tion— 
‘‘(1) IN
GENERAL.—The term ‘applicable existing waiver’ 
means a waiver, experimental, pilot, or demonstration project 
under section 1115, grandfathered under section 6102(c)(3) of 
the Deficit Reduction Act of 2005, or otherwise conducted under 
authority that— 
‘‘(A) would allow funds made available under this title 
to be used to provide child health assistance or other health 
benefits coverage to— 
‘‘(i) a parent of a targeted low-income child; 
‘‘(ii) a nonpregnant childless adult; or 
‘‘(iii) individuals described in both clauses (i) and 
(ii); and 
‘‘(B) was in effect during fiscal year 2009. 
‘‘(2) DEFINITIONS.— 
‘‘(A) PARENT.—The term ‘parent’ includes a caretaker 
relative (as such term is used in carrying out section 1931) 
and a legal guardian. 
‘‘(B) NONPREGNANT CHILDLESS ADULT.—The term ‘non-
pregnant childless adult’ has the meaning given such term 
by section 2107(f).’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 2107(f) (42 U.S.C. 1397gg(f)) is amended— 
(i) by striking ‘‘, the Secretary’’ and inserting ‘‘: 
‘‘(1) The Secretary’’; 
(ii) in the first sentence, by inserting ‘‘or a parent 
(as defined in section 2111(c)(2)(A)), who is not preg-
nant, of a targeted low-income child’’ before the period; 
(iii) by striking the second sentence; and 
(iv) by adding at the end the following new para-
graph: 
‘‘(2) The Secretary may not approve, extend, renew, or 
amend a waiver, experimental, pilot, or demonstration project 
with respect to a State after the date of enactment of the 
Children’s Health Insurance Program Reauthorization Act of 
2009 that would waive or modify the requirements of section 
2111.’’. 
(B) Section 6102(c) of the Deficit Reduction Act of 
2005 (Public Law 109–171; 120 Stat. 131) is amended 
by striking ‘‘Nothing’’ and inserting ‘‘Subject to section 
2111 of the Social Security Act, as added by section 112 
of the Children’s Health Insurance Program Reauthoriza-
tion Act of 2009, nothing’’. 
42 USC 1397gg 
note. 
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123 STAT. 34 
PUBLIC LAW 111–3—FEB. 4, 2009 
(b) GAO STUDY AND REPORT.— 
(1) IN GENERAL.—The Comptroller General of the United 
States shall conduct a study of whether— 
(A) the coverage of a parent, a caretaker relative (as 
such term is used in carrying out section 1931), or a legal 
guardian of a targeted low-income child under a State 
health plan under title XXI of the Social Security Act 
increases the enrollment of, or the quality of care for, 
children, and 
(B) such parents, relatives, and legal guardians who 
enroll in such a plan are more likely to enroll their children 
in such a plan or in a State plan under title XIX of 
such Act. 
(2) REPORT.—Not later than 2 years after the date of the 
enactment of this Act, the Comptroller General shall report 
the results of the study to the Committee on Finance of the 
Senate and the Committee on Energy and Commerce of the 
House of Representatives, including recommendations (if any) 
for changes in legislation. 
SEC. 113. ELIMINATION OF COUNTING MEDICAID CHILD PRESUMPTIVE 
ELIGIBILITY COSTS AGAINST TITLE XXI ALLOTMENT. 
(a) IN GENERAL.—Section 2105(a)(1) (42 U.S.C. 1397ee(a)(1)) 
is amended— 
(1) in the matter preceding subparagraph (A), by striking 
‘‘(or, in the case of expenditures described in subparagraph 
(B), the Federal medical assistance percentage (as defined in 
the first sentence of section 1905(b)))’’; and 
(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) eligible 
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 entity, as 
defined in section 1920A(b)(3).’’. 
SEC. 114. LIMITATION ON MATCHING RATE FOR STATES THAT PRO-
POSE TO COVER CHILDREN WITH EFFECTIVE FAMILY 
INCOME THAT EXCEEDS 300 PERCENT OF THE POVERTY 
LINE. 
(a) FMAP APPLIED
TO EXPENDITURES.—Section 2105(c) (42 
U.S.C. 1397ee(c)) is amended by adding at the end the following 
new paragraph: 
‘‘(8) LIMITATION ON MATCHING RATE FOR EXPENDITURES FOR 
CHILD
HEALTH
ASSISTANCE
PROVIDED
TO
CHILDREN
WHOSE 
EFFECTIVE FAMILY INCOME EXCEEDS 300 PERCENT OF THE POV-
ERTY LINE.— 
‘‘(A) FMAP APPLIED TO EXPENDITURES.—Except as pro-
vided in subparagraph (B), for fiscal years beginning with 
fiscal year 2009, the Federal medical assistance percentage 
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123 STAT. 35 
PUBLIC LAW 111–3—FEB. 4, 2009 
(as determined under section 1905(b) without regard to 
clause (4) of such section) shall be substituted for the 
enhanced FMAP under subsection (a)(1) with respect to 
any expenditures for providing child health assistance or 
health benefits coverage for a targeted low-income child 
whose effective family income would exceed 300 percent 
of the poverty line but for the application of a general 
exclusion of a block of income that is not determined by 
type of expense or type of income. 
‘‘(B) EXCEPTION.—Subparagraph (A) shall not apply 
to any State that, on the date of enactment of the Children’s 
Health Insurance Program Reauthorization Act of 2009, 
has an approved State plan amendment or waiver to pro-
vide, or has enacted a State law to submit a State plan 
amendment to provide, expenditures described in such 
subparagraph under the State child health plan.’’. 
(b) RULE OF CONSTRUCTION.—Nothing in the amendments made 
by this section shall be construed as— 
(1) changing any income eligibility level for children under 
title XXI of the Social Security Act; or 
(2) changing the flexibility provided States under such 
title to establish the income eligibility level for targeted low- 
income children under a State child health plan and the meth-
odologies used by the State to determine income or assets 
under such plan. 
SEC. 115. STATE AUTHORITY UNDER MEDICAID. 
Notwithstanding any other provision of law, including the 
fourth sentence of subsection (b) of section 1905 of the Social Secu-
rity Act (42 U.S.C. 1396d) or subsection (u) of such section, at 
State option, the Secretary shall provide the State with the Federal 
medical assistance percentage determined for the State for Medicaid 
with respect to expenditures described in section 1905(u)(2)(A) of 
such Act or otherwise made to provide medical assistance under 
Medicaid to a child who could be covered by the State under 
CHIP. 
TITLE II—OUTREACH AND 
ENROLLMENT 
Subtitle A—Outreach and Enrollment 
Activities 
SEC. 201. GRANTS AND ENHANCED ADMINISTRATIVE FUNDING FOR 
OUTREACH AND ENROLLMENT. 
(a) GRANTS.—Title XXI (42 U.S.C. 1397aa et seq.), as amended 
by section 111, is amended by adding at the end the following: 
‘‘SEC. 2113. GRANTS TO IMPROVE OUTREACH AND ENROLLMENT. 
‘‘(a) OUTREACH
AND ENROLLMENT GRANTS; NATIONAL CAM-
PAIGN.— 
‘‘(1) IN GENERAL.—From the amounts appropriated under 
subsection (g), subject to paragraph (2), the Secretary shall 
award grants to eligible entities during the period of fiscal 
years 2009 through 2013 to conduct outreach and enrollment 
42 USC 1397mm. 
42 USC 1396d 
note. 
42 USC 1397ee 
note. 
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123 STAT. 36 
PUBLIC LAW 111–3—FEB. 4, 2009 
efforts that are designed to increase the enrollment and partici-
pation of eligible children under this title and title XIX. 
‘‘(2) TEN PERCENT SET ASIDE FOR NATIONAL ENROLLMENT 
CAMPAIGN.—An amount equal to 10 percent of such amounts 
shall be used by the Secretary for expenditures during such 
period to carry out a national enrollment campaign in accord-
ance with subsection (h). 
‘‘(b) PRIORITY FOR AWARD OF GRANTS.— 
‘‘(1) IN GENERAL.—In awarding grants under subsection 
(a), the Secretary shall give priority to eligible entities that— 
‘‘(A) propose to target geographic areas with high rates 
of— 
‘‘(i) eligible but unenrolled children, including such 
children who reside in rural areas; or 
‘‘(ii) racial and ethnic minorities and health dis-
parity populations, including those proposals that 
address cultural and linguistic barriers to enrollment; 
and 
‘‘(B) submit the most demonstrable evidence required 
under paragraphs (1) and (2) of subsection (c). 
‘‘(2) TEN
PERCENT
SET
ASIDE
FOR
OUTREACH
TO
INDIAN 
CHILDREN.—An amount equal to 10 percent of the funds appro-
priated under subsection (g) shall be used by the Secretary 
to award grants to Indian Health Service providers and urban 
Indian organizations receiving funds under title V of the Indian 
Health Care Improvement Act (25 U.S.C. 1651 et seq.) for 
outreach to, and enrollment of, children who are Indians. 
‘‘(c) APPLICATION.—An eligible entity that desires to receive 
a grant under subsection (a) shall submit an application to the 
Secretary in such form and manner, and containing such informa-
tion, as the Secretary may decide. Such application shall include— 
‘‘(1) evidence demonstrating that the entity includes mem-
bers who have access to, and credibility with, ethnic or low- 
income populations in the communities in which activities 
funded under the grant are to be conducted; 
‘‘(2) evidence demonstrating that the entity has the ability 
to address barriers to enrollment, such as lack of awareness 
of eligibility, stigma concerns and punitive fears associated 
with receipt of benefits, and other cultural barriers to applying 
for and receiving child health assistance or medical assistance; 
‘‘(3) specific quality or outcomes performance measures to 
evaluate the effectiveness of activities funded by a grant 
awarded under this section; and 
‘‘(4) an assurance that the eligible entity shall— 
‘‘(A) conduct an assessment of the effectiveness of such 
activities against the performance measures; 
‘‘(B) cooperate with the collection and reporting of 
enrollment data and other information in order for the 
Secretary to conduct such assessments; and 
‘‘(C) in the case of an eligible entity that is not the 
State, provide the State with enrollment data and other 
information as necessary for the State to make necessary 
projections of eligible children and pregnant women. 
‘‘(d) DISSEMINATION OF ENROLLMENT DATA AND INFORMATION 
DETERMINED
FROM
EFFECTIVENESS
ASSESSMENTS; 
ANNUAL 
REPORT.—The Secretary shall— 
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123 STAT. 37 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(1) make publicly available the enrollment data and 
information collected and reported in accordance with sub-
section (c)(4)(B); and 
‘‘(2) submit an annual report to Congress on the outreach 
and enrollment activities conducted with funds appropriated 
under this section. 
‘‘(e) MAINTENANCE OF EFFORT FOR STATES AWARDED GRANTS; 
NO MATCH REQUIRED
FOR ANY ELIGIBLE ENTITY AWARDED
A 
GRANT.— 
‘‘(1) STATE
MAINTENANCE
OF
EFFORT.—In the case of a 
State that is awarded a grant under this section, the State 
share of funds expended for outreach and enrollment activities 
under the State child health plan shall not be less than the 
State share of such funds expended in the fiscal year preceding 
the first fiscal year for which the grant is awarded. 
‘‘(2) NO
MATCHING
REQUIREMENT.—No eligible entity 
awarded a grant under subsection (a) shall be required to 
provide any matching funds as a condition for receiving the 
grant. 
‘‘(f) DEFINITIONS.—In this section: 
‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible entity’ means any 
of the following: 
‘‘(A) A State with an approved child health plan under 
this title. 
‘‘(B) A local government. 
‘‘(C) An Indian tribe or tribal consortium, a tribal 
organization, an urban Indian organization receiving funds 
under title V of the Indian Health Care Improvement Act 
(25 U.S.C. 1651 et seq.), or an Indian Health Service pro-
vider. 
‘‘(D) A Federal health safety net organization. 
‘‘(E) A national, State, local, or community-based public 
or nonprofit private organization, including organizations 
that use community health workers or community-based 
doula programs. 
‘‘(F) A faith-based organization or consortia, to the 
extent that a grant awarded to such an entity is consistent 
with the requirements of section 1955 of the Public Health 
Service Act (42 U.S.C. 300x–65) relating to a grant award 
to nongovernmental entities. 
‘‘(G) An elementary or secondary school. 
‘‘(2) FEDERAL
HEALTH
SAFETY
NET
ORGANIZATION.—The 
term ‘Federal health safety net organization’ means— 
‘‘(A) a Federally-qualified health center (as defined in 
section 1905(l)(2)(B)); 
‘‘(B) a hospital defined as a disproportionate share 
hospital for purposes of section 1923; 
‘‘(C) a covered entity described in section 340B(a)(4) 
of the Public Health Service Act (42 U.S.C. 256b(a)(4)); 
and 
‘‘(D) any other entity or consortium that serves children 
under a federally funded program, including the special 
supplemental nutrition program for women, infants, and 
children (WIC) established under section 17 of the Child 
Nutrition Act of 1966 (42 U.S.C. 1786), the Head Start 
and Early Head Start programs under the Head Start 
Act (42 U.S.C. 9801 et seq.), the school lunch program 
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123 STAT. 38 
PUBLIC LAW 111–3—FEB. 4, 2009 
established under the Richard B. Russell National School 
Lunch Act, and an elementary or secondary school. 
‘‘(3) INDIANS; INDIAN TRIBE; TRIBAL ORGANIZATION; URBAN 
INDIAN ORGANIZATION.—The terms ‘Indian’, ‘Indian tribe’, ‘tribal 
organization’, and ‘urban Indian organization’ have the 
meanings given such terms in section 4 of the Indian Health 
Care Improvement Act (25 U.S.C. 1603). 
‘‘(4) COMMUNITY HEALTH WORKER.—The term ‘community 
health worker’ means an individual who promotes health or 
nutrition within the community in which the individual 
resides— 
‘‘(A) by serving as a liaison between communities and 
health care agencies; 
‘‘(B) by providing guidance and social assistance to 
community residents; 
‘‘(C) by enhancing community residents’ ability to effec-
tively communicate with health care providers; 
‘‘(D) by providing culturally and linguistically appro-
priate health or nutrition education; 
‘‘(E) by advocating for individual and community health 
or nutrition needs; and 
‘‘(F) by providing referral and followup services. 
‘‘(g) APPROPRIATION.—There is appropriated, out of any money 
in the Treasury not otherwise appropriated, $100,000,000 for the 
period of fiscal years 2009 through 2013, for the purpose of awarding 
grants under this section. Amounts appropriated and paid under 
the authority of this section shall be in addition to amounts appro-
priated under section 2104 and paid to States in accordance with 
section 2105, including with respect to expenditures for outreach 
activities in accordance with subsections (a)(1)(D)(iii) and (c)(2)(C) 
of that section. 
‘‘(h) NATIONAL ENROLLMENT CAMPAIGN.—From the amounts 
made available under subsection (a)(2), the Secretary shall develop 
and implement a national enrollment campaign to improve the 
enrollment of underserved child populations in the programs estab-
lished under this title and title XIX. Such campaign may include— 
‘‘(1) the establishment of partnerships with the Secretary 
of Education and the Secretary of Agriculture to develop 
national campaigns to link the eligibility and enrollment sys-
tems for the assistance programs each Secretary administers 
that often serve the same children; 
‘‘(2) the integration of information about the programs 
established under this title and title XIX in public health aware-
ness campaigns administered by the Secretary; 
‘‘(3) increased financial and technical support for enroll-
ment hotlines maintained by the Secretary to ensure that all 
States participate in such hotlines; 
‘‘(4) the establishment of joint public awareness outreach 
initiatives with the Secretary of Education and the Secretary 
of Labor regarding the importance of health insurance to 
building strong communities and the economy; 
‘‘(5) the development of special outreach materials for 
Native Americans or for individuals with limited English pro-
ficiency; and 
‘‘(6) such other outreach initiatives as the Secretary deter-
mines would increase public awareness of the programs under 
this title and title XIX.’’. 
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123 STAT. 39 
PUBLIC LAW 111–3—FEB. 4, 2009 
(b) ENHANCED ADMINISTRATIVE FUNDING FOR TRANSLATION OR 
INTERPRETATION SERVICES UNDER CHIP AND MEDICAID.— 
(1) CHIP.—Section 2105(a)(1) (42 U.S.C. 1397ee(a)(1)), as 
amended by section 113, is amended— 
(A) in the matter preceding subparagraph (A), by 
inserting ‘‘(or, in the case of expenditures described in 
subparagraph (D)(iv), the higher of 75 percent or the sum 
of the enhanced FMAP plus 5 percentage points)’’ after 
‘‘enhanced FMAP’’; and 
(B) in subparagraph (D)— 
(i) in clause (iii), by striking ‘‘and’’ at the end; 
(ii) by redesignating clause (iv) as clause (v); and 
(iii) by inserting after clause (iii) the following 
new clause: 
‘‘(iv) for translation or interpretation services in 
connection with the enrollment of, retention of, and 
use of services under this title by, individuals for whom 
English is not their primary language (as found nec-
essary by the Secretary for the proper and efficient 
administration of the State plan); and’’. 
(2) MEDICAID.— 
(A) USE OF MEDICAID FUNDS.—Section 1903(a)(2) (42 
U.S.C. 1396b(a)(2)) is amended by adding at the end the 
following new subparagraph: 
‘‘(E) an amount equal to 75 percent of so much of the 
sums expended during such quarter (as found necessary by 
the Secretary for the proper and efficient administration of 
the State plan) as are attributable to translation or interpreta-
tion services in connection with the enrollment of, retention 
of, and use of services under this title by, children of families 
for whom English is not the primary language; plus’’. 
(B) USE OF COMMUNITY HEALTH WORKERS FOR OUT-
REACH ACTIVITIES.— 
(i) IN
GENERAL.—Section 2102(c)(1) of such Act 
(42 U.S.C. 1397bb(c)(1)) is amended by inserting 
‘‘(through community health workers and others)’’ after 
‘‘Outreach’’. 
(ii) IN FEDERAL EVALUATION.—Section 2108(c)(3)(B) 
of such Act (42 U.S.C. 1397hh(c)(3)(B)) is amended 
by inserting ‘‘(such as through community health 
workers and others)’’ after ‘‘including practices’’. 
SEC. 202. INCREASED OUTREACH AND ENROLLMENT OF INDIANS. 
(a) IN GENERAL.—Section 1139 (42 U.S.C. 1320b–9) is amended 
to read as follows: 
‘‘SEC. 1139. IMPROVED ACCESS TO, AND DELIVERY OF, HEALTH CARE 
FOR INDIANS UNDER TITLES XIX AND XXI. 
‘‘(a) AGREEMENTS WITH STATES FOR MEDICAID AND CHIP OUT-
REACH ON OR NEAR RESERVATIONS TO INCREASE THE ENROLLMENT 
OF INDIANS IN THOSE PROGRAMS.— 
‘‘(1) IN GENERAL.—In order to improve the access of Indians 
residing on or near a reservation to obtain benefits under 
the Medicaid and State children’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 outreach 
efforts such as the outstationing of eligibility workers, entering 
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123 STAT. 40 
PUBLIC LAW 111–3—FEB. 4, 2009 
into agreements with the Indian Health Service, Indian Tribes, 
Tribal Organizations, and Urban Indian Organizations to pro-
vide outreach, education regarding eligibility and benefits, 
enrollment, and translation services when such services are 
appropriate. 
‘‘(2) CONSTRUCTION.—Nothing in paragraph (1) shall be 
construed as affecting arrangements entered 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 COOPERATION.—The Sec-
retary, acting through the Centers for Medicare & Medicaid Serv-
ices, 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 
Organizations with respect to the provision of health care items 
and services to Indians under the programs established under title 
XIX or XXI. 
‘‘(c) DEFINITION OF INDIAN; INDIAN TRIBE; INDIAN HEALTH PRO-
GRAM; TRIBAL ORGANIZATION; URBAN INDIAN ORGANIZATION.—In 
this section, the terms ‘Indian’, ‘Indian Tribe’, ‘Indian Health Pro-
gram’, ‘Tribal Organization’, and ‘Urban Indian Organization’ have 
the meanings given those terms in section 4 of the Indian Health 
Care Improvement Act.’’. 
(b) NONAPPLICATION OF 10 PERCENT LIMIT ON OUTREACH AND 
CERTAIN
OTHER
EXPENDITURES.—Section 2105(c)(2) (42 U.S.C. 
1397ee(c)(2)) is amended by adding at the end the following: 
‘‘(C) NONAPPLICATION TO CERTAIN EXPENDITURES.—The 
limitation under subparagraph (A) shall not apply with 
respect to the following expenditures: 
‘‘(i) EXPENDITURES TO INCREASE OUTREACH TO, AND 
THE
ENROLLMENT
OF, INDIAN
CHILDREN
UNDER
THIS 
TITLE AND TITLE xix.—Expenditures for outreach activi-
ties to families of Indian children likely to be eligible 
for child health assistance under the plan or medical 
assistance under the State plan under title XIX (or 
under a waiver of such plan), to inform such families 
of the availability of, and to assist them in enrolling 
their children in, such plans, including such activities 
conducted under grants, contracts, or agreements 
entered into under section 1139(a).’’. 
SEC. 203. STATE OPTION TO RELY ON FINDINGS FROM AN EXPRESS 
LANE AGENCY TO CONDUCT SIMPLIFIED ELIGIBILITY 
DETERMINATIONS. 
(a) APPLICATION UNDER MEDICAID AND CHIP PROGRAMS.— 
(1) MEDICAID.—Section 1902(e) (42 U.S.C. 1396a(e)) is 
amended by adding at the end the following: 
‘‘(13) EXPRESS LANE OPTION.— 
‘‘(A) IN GENERAL.— 
‘‘(i) OPTION TO USE A FINDING FROM AN EXPRESS LANE 
AGENCY.—At the option of the State, the State plan may 
provide that in determining eligibility under this title for 
a child (as defined in subparagraph (G)), the State may 
rely on a finding made within a reasonable period (as 
determined by the State) from an Express Lane agency 
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123 STAT. 41 
PUBLIC LAW 111–3—FEB. 4, 2009 
(as defined in subparagraph (F)) when it determines 
whether a child satisfies one or more components of eligi-
bility for medical assistance under this title. The State 
may rely on a finding from an Express Lane agency not-
withstanding sections 1902(a)(46)(B) and 1137(d) or any 
differences in budget unit, disregard, deeming or other 
methodology, if the following requirements are met: 
‘‘(I) PROHIBITION ON DETERMINING CHILDREN INELI-
GIBLE FOR COVERAGE.—If a finding from an Express 
Lane agency would result in a determination that a 
child does not satisfy an eligibility requirement for 
medical assistance under this title and for child health 
assistance under title XXI, the State shall determine 
eligibility for assistance using its regular procedures. 
‘‘(II) NOTICE
REQUIREMENT.—For any child who 
is found eligible for medical assistance under the State 
plan under this title or child health assistance under 
title XXI and who is subject to premiums based on 
an Express Lane agency’s finding of such child’s income 
level, the State shall provide notice that the child 
may qualify for lower premium payments if evaluated 
by the State using its regular policies and of the proce-
dures for requesting such an evaluation. 
‘‘(III) COMPLIANCE
WITH
SCREEN
AND
ENROLL 
REQUIREMENT.—The State shall satisfy the require-
ments under subparagraphs (A) and (B) of section 
2102(b)(3) (relating to screen and enroll) before 
enrolling a child in child health assistance under title 
XXI. At its option, the State may fulfill such require-
ments in accordance with either option provided under 
subparagraph (C) of this paragraph. 
‘‘(IV) VERIFICATION OF CITIZENSHIP OR NATIONALITY 
STATUS.—The State shall satisfy the requirements of 
section 1902(a)(46)(B) or 2105(c)(9), as applicable for 
verifications of citizenship or nationality status. 
‘‘(V) CODING.—The State meets the requirements 
of subparagraph (E). 
‘‘(ii) OPTION TO APPLY TO RENEWALS AND REDETERMINA-
TIONS.—The State may apply the provisions of this para-
graph when conducting initial determinations of eligibility, 
redeterminations of eligibility, or both, as described in the 
State plan. 
‘‘(B) RULES OF CONSTRUCTION.—Nothing in this paragraph 
shall be construed— 
‘‘(i) to limit or prohibit a State from taking any actions 
otherwise permitted under this title or title XXI in deter-
mining eligibility for or enrolling children into medical 
assistance under this title or child health assistance under 
title XXI; or 
‘‘(ii) to modify the limitations in section 1902(a)(5) con-
cerning the agencies that may make a determination of 
eligibility for medical assistance under this title. 
‘‘(C) OPTIONS
FOR
SATISFYING
THE
SCREEN
AND
ENROLL 
REQUIREMENT.— 
‘‘(i) IN GENERAL.—With respect to a child whose eligi-
bility for medical assistance under this title or for child 
health assistance under title XXI has been evaluated by 
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123 STAT. 42 
PUBLIC LAW 111–3—FEB. 4, 2009 
a State agency using an income finding from an Express 
Lane agency, a State may carry out its duties under sub-
paragraphs (A) and (B) of section 2102(b)(3) (relating to 
screen and enroll) in accordance with either clause (ii) 
or clause (iii). 
‘‘(ii) ESTABLISHING A SCREENING THRESHOLD.— 
‘‘(I) IN
GENERAL.—Under this clause, the State 
establishes a screening threshold set as a percentage 
of the Federal poverty level that exceeds the highest 
income threshold applicable under this title to the 
child by a minimum of 30 percentage points or, at 
State option, a higher number of percentage points 
that reflects the value (as determined by the State 
and described in the State plan) of any differences 
between income methodologies used by the program 
administered by the Express Lane agency and the 
methodologies used by the State in determining eligi-
bility for medical assistance under this title. 
‘‘(II) 
CHILDREN
WITH
INCOME
NOT
ABOVE 
THRESHOLD.—If the income of a child does not exceed 
the screening threshold, the child is deemed to satisfy 
the income eligibility criteria for medical assistance 
under this title regardless of whether such child would 
otherwise satisfy such criteria. 
‘‘(III) CHILDREN WITH INCOME ABOVE THRESHOLD.— 
If the income of a child exceeds the screening threshold, 
the child shall be considered to have an income above 
the Medicaid applicable income level described in sec-
tion 2110(b)(4) and to satisfy the requirement under 
section 2110(b)(1)(C) (relating to the requirement that 
CHIP matching funds be used only for children not 
eligible for Medicaid). If such a child is enrolled in 
child health assistance under title XXI, the State shall 
provide the parent, guardian, or custodial relative with 
the following: 
‘‘(aa) Notice that the child may be eligible 
to receive medical assistance under the State plan 
under this title if evaluated for such assistance 
under the State’s regular procedures and notice 
of the process through which a parent, guardian, 
or custodial relative can request that the State 
evaluate the child’s eligibility for medical assist-
ance under this title using such regular proce-
dures. 
‘‘(bb) A description of differences between the 
medical assistance provided under this title and 
child health assistance under title XXI, including 
differences in cost-sharing requirements and cov-
ered benefits. 
‘‘(iii) TEMPORARY ENROLLMENT IN CHIP PENDING SCREEN 
AND ENROLL.— 
‘‘(I) IN
GENERAL.—Under this clause, a State 
enrolls a child in child health assistance under title 
XXI for a temporary period if the child appears eligible 
for such assistance based on an income finding by 
an Express Lane agency. 
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123 STAT. 43 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(II) DETERMINATION OF ELIGIBILITY.—During such 
temporary enrollment period, the State shall determine 
the child’s eligibility for child health assistance under 
title XXI or for medical assistance under this title 
in accordance with this clause. 
‘‘(III) PROMPT
FOLLOW
UP.—In making such a 
determination, the State shall take prompt action to 
determine whether the child should be enrolled in med-
ical assistance under this title or child health assist-
ance under title XXI pursuant to subparagraphs (A) 
and (B) of section 2102(b)(3) (relating to screen and 
enroll). 
‘‘(IV) REQUIREMENT
FOR
SIMPLIFIED
DETERMINA-
TION.—In making such a determination, the State shall 
use procedures that, to the maximum feasible extent, 
reduce the burden imposed on the individual of such 
determination. Such procedures may not require the 
child’s parent, guardian, or custodial relative to provide 
or verify information that already has been provided 
to the State agency by an Express Lane agency or 
another source of information unless the State agency 
has reason to believe the information is erroneous. 
‘‘(V) AVAILABILITY
OF
CHIP
MATCHING
FUNDS 
DURING
TEMPORARY
ENROLLMENT
PERIOD.—Medical 
assistance for items and services that are provided 
to a child enrolled in title XXI during a temporary 
enrollment period under this clause shall be treated 
as child health assistance under such title. 
‘‘(D) OPTION FOR AUTOMATIC ENROLLMENT.— 
‘‘(i) IN GENERAL.—The State may initiate and deter-
mine eligibility for medical assistance under the State Med-
icaid plan or for child health assistance under the State 
CHIP plan without a program application from, or on behalf 
of, the child based on data obtained from sources other 
than the child (or the child’s family), but a child can only 
be automatically enrolled in the State Medicaid plan or 
the State CHIP plan if the child or the family affirmatively 
consents to being enrolled through affirmation in writing, 
by telephone, orally, through electronic signature, or 
through any other means specified by the Secretary or 
by signature on an Express Lane agency application, if 
the requirement of clause (ii) is met. 
‘‘(ii) INFORMATION REQUIREMENT.—The requirement of 
this clause is that the State informs the parent, guardian, 
or custodial relative of the child of the services that will 
be covered, appropriate methods for using such services, 
premium or other cost sharing charges (if any) that apply, 
medical support obligations (under section 1912(a)) created 
by enrollment (if applicable), and the actions the parent, 
guardian, or relative must take to maintain enrollment 
and renew coverage. 
‘‘(E) CODING; APPLICATION TO ENROLLMENT ERROR RATES.— 
‘‘(i) IN GENERAL.—For purposes of subparagraph (A)(iv), 
the requirement of this subparagraph for a State is that 
the State agrees to— 
‘‘(I) assign such codes as the Secretary shall 
require to the children who are enrolled in the State 
Procedures. 
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123 STAT. 44 
PUBLIC LAW 111–3—FEB. 4, 2009 
Medicaid plan or the State CHIP plan through reliance 
on a finding made by an Express Lane agency for 
the duration of the State’s election under this para-
graph; 
‘‘(II) annually provide the Secretary with a statis-
tically valid sample (that is approved by Secretary) 
of the children enrolled in such plans through reliance 
on such a finding by conducting a full Medicaid eligi-
bility review of the children identified for such sample 
for purposes of determining an eligibility error rate 
(as described in clause (iv)) with respect to the enroll-
ment of such children (and shall not include such chil-
dren in any data or samples used for purposes of 
complying with a Medicaid Eligibility Quality Control 
(MEQC) review or a payment error rate measurement 
(PERM) requirement); 
‘‘(III) submit the error rate determined under sub-
clause (II) to the Secretary; 
‘‘(IV) if such error rate exceeds 3 percent for either 
of the first 2 fiscal years in which the State elects 
to apply this paragraph, demonstrate to the satisfac-
tion of the Secretary the specific corrective actions 
implemented by the State to improve upon such error 
rate; and 
‘‘(V) if such error rate exceeds 3 percent for any 
fiscal year in which the State elects to apply this 
paragraph, a reduction in the amount otherwise pay-
able to the State under section 1903(a) for quarters 
for that fiscal year, equal to the total amount of erro-
neous excess payments determined for the fiscal year 
only with respect to the children included in the sample 
for the fiscal year that are in excess of a 3 percent 
error rate with respect to such children. 
‘‘(ii) NO
PUNITIVE
ACTION
BASED
ON
ERROR
RATE.— 
The Secretary shall not apply the error rate derived from 
the sample under clause (i) to the entire population of 
children enrolled in the State Medicaid plan or the State 
CHIP plan through reliance on a finding made by an 
Express Lane agency, or to the population of children 
enrolled in such plans on the basis of the State’s regular 
procedures for determining eligibility, or penalize the State 
on the basis of such error rate in any manner other than 
the reduction of payments provided for under clause (i)(V). 
‘‘(iii) RULE OF CONSTRUCTION.—Nothing in this para-
graph shall be construed as relieving a State that elects 
to apply this paragraph from being subject to a penalty 
under section 1903(u), for payments made under the State 
Medicaid plan with respect to ineligible individuals and 
families that are determined to exceed the error rate per-
mitted under that section (as determined without regard 
to the error rate determined under clause (i)(II)). 
‘‘(iv) ERROR RATE DEFINED.—In this subparagraph, the 
term ‘error rate’ means the rate of erroneous excess pay-
ments for medical assistance (as defined in section 
1903(u)(1)(D)) for the period involved, except that such 
payments shall be limited to individuals for which eligi-
bility determinations are made under this paragraph and 
Submission. 
Deadline. 
Statistics. 
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123 STAT. 45 
PUBLIC LAW 111–3—FEB. 4, 2009 
except that in applying this paragraph under title XXI, 
there shall be substituted for references to provisions of 
this title corresponding provisions within title XXI. 
‘‘(F) EXPRESS LANE AGENCY.— 
‘‘(i) IN GENERAL.—In this paragraph, the term ‘Express 
Lane agency’ means a public agency that— 
‘‘(I) is determined by the State Medicaid agency 
or the State CHIP agency (as applicable) to be capable 
of making the determinations of one or more eligibility 
requirements described in subparagraph (A)(i); 
‘‘(II) is identified in the State Medicaid plan or 
the State CHIP plan; and 
‘‘(III) notifies the child’s family— 
‘‘(aa) of the information which shall be dis-
closed in accordance with this paragraph; 
‘‘(bb) that the information disclosed will be 
used solely for purposes of determining eligibility 
for medical assistance under the State Medicaid 
plan or for child health assistance under the State 
CHIP plan; and 
‘‘(cc) that the family may elect to not have 
the information disclosed for such purposes; and 
‘‘(IV) enters into, or is subject to, an interagency 
agreement to limit the disclosure and use of the 
information disclosed. 
‘‘(ii) INCLUSION OF SPECIFIC PUBLIC AGENCIES.—Such 
term includes the following: 
‘‘(I) A public agency that determines eligibility for 
assistance under any of the following: 
‘‘(aa) The temporary assistance for needy fami-
lies program funded under part A of title IV. 
‘‘(bb) A State program funded under part D 
of title IV. 
‘‘(cc) The State Medicaid plan. 
‘‘(dd) The State CHIP plan. 
‘‘(ee) The Food and Nutrition Act of 2008 (7 
U.S.C. 2011 et seq.). 
‘‘(ff) The Head Start Act (42 U.S.C. 9801 et 
seq.). 
‘‘(gg) The Richard B. Russell National School 
Lunch Act (42 U.S.C. 1751 et seq.). 
‘‘(hh) The Child Nutrition Act of 1966 (42 
U.S.C. 1771 et seq.). 
‘‘(ii) The Child Care and Development Block 
Grant Act of 1990 (42 U.S.C. 9858 et seq.). 
‘‘(jj) The Stewart B. McKinney Homeless 
Assistance Act (42 U.S.C. 11301 et seq.). 
‘‘(kk) The United States Housing Act of 1937 
(42 U.S.C. 1437 et seq.). 
‘‘(ll) The Native American Housing Assistance 
and Self-Determination Act of 1996 (25 U.S.C. 
4101 et seq.). 
‘‘(II) A State-specified governmental agency that 
has fiscal liability or legal responsibility for the 
accuracy of the eligibility determination findings relied 
on by the State. 
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123 STAT. 46 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(III) A public agency that is subject to an inter-
agency agreement limiting the disclosure and use of 
the information disclosed for purposes of determining 
eligibility under the State Medicaid plan or the State 
CHIP plan. 
‘‘(iii) EXCLUSIONS.—Such term does not include an 
agency that determines eligibility for a program established 
under the Social Services Block Grant established under 
title XX or a private, for-profit organization. 
‘‘(iv) RULES OF CONSTRUCTION.—Nothing in this para-
graph shall be construed as— 
‘‘(I) exempting a State Medicaid agency from com-
plying with the requirements of section 1902(a)(4) 
relating to merit-based personnel standards for 
employees of the State Medicaid agency and safeguards 
against conflicts of interest); or 
‘‘(II) authorizing a State Medicaid agency that 
elects to use Express Lane agencies under this 
subparagraph to use the Express Lane option to avoid 
complying with such requirements for purposes of 
making eligibility determinations under the State Med-
icaid plan. 
‘‘(v) ADDITIONAL DEFINITIONS.—In this paragraph: 
‘‘(I) STATE.—The term ‘State’ means 1 of the 50 
States or the District of Columbia. 
‘‘(II) STATE CHIP AGENCY.—The term ‘State CHIP 
agency’ means the State agency responsible for admin-
istering the State CHIP plan. 
‘‘(III) STATE CHIP PLAN.—The term ‘State CHIP 
plan’ means the State child health plan established 
under title XXI and includes any waiver of such plan. 
‘‘(IV) STATE MEDICAID AGENCY.—The term ‘State 
Medicaid agency’ means the State agency responsible 
for administering the State Medicaid plan. 
‘‘(V) STATE MEDICAID PLAN.—The term ‘State Med-
icaid plan’ means the State plan established under 
title XIX and includes any waiver of such plan. 
‘‘(G) CHILD DEFINED.—For purposes of this paragraph, the 
term ‘child’ means an individual under 19 years of age, or, 
at the option of a State, such higher age, not to exceed 21 
years of age, as the State may elect. 
‘‘(H) STATE OPTION TO RELY ON STATE INCOME TAX DATA 
OR RETURN.—At the option of the State, a finding from an 
Express Lane agency may include gross income or adjusted 
gross income shown by State income tax records or returns. 
‘‘(I) APPLICATION.—This paragraph shall not apply with 
respect to eligibility determinations made after September 30, 
2013.’’. 
(2) CHIP.—Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is 
amended by redesignating subparagraphs (B), (C), and (D) as 
subparagraphs (C), (D), and (E), respectively, and by inserting 
after subparagraph (A) the following new subparagraph: 
‘‘(B) Section 1902(e)(13) (relating to the State option 
to rely on findings from an Express Lane agency to help 
evaluate a child’s eligibility for medical assistance).’’. 
(b) EVALUATION AND REPORT.— 
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123 STAT. 47 
PUBLIC LAW 111–3—FEB. 4, 2009 
(1) EVALUATION.—The Secretary shall conduct, by grant, 
contract, or interagency agreement, a comprehensive, inde-
pendent evaluation of the option provided under the amend-
ments made by subsection (a). Such evaluation shall include 
an analysis of the effectiveness of the option, and shall 
include— 
(A) obtaining a statistically valid sample of the children 
who were enrolled in the State Medicaid plan or the State 
CHIP plan through reliance on a finding made by an 
Express Lane agency and determining the percentage of 
children who were erroneously enrolled in such plans; 
(B) determining whether enrolling children in such 
plans through reliance on a finding made by an Express 
Lane agency improves the ability of a State to identify 
and enroll low-income, uninsured children who are eligible 
but not enrolled in such plans; 
(C) evaluating the administrative costs or savings 
related to identifying and enrolling children in such plans 
through reliance on such findings, and the extent to which 
such costs differ from the costs that the State otherwise 
would have incurred to identify and enroll low-income, 
uninsured children who are eligible but not enrolled in 
such plans; and 
(D) any recommendations for legislative or administra-
tive changes that would improve the effectiveness of 
enrolling children in such plans through reliance on such 
findings. 
(2) REPORT TO CONGRESS.—Not later than September 30, 
2012, the Secretary shall submit a report to Congress on the 
results of the evaluation under paragraph (1). 
(3) FUNDING.— 
(A) IN GENERAL.—Out of any funds in the Treasury 
not otherwise appropriated, there is appropriated to the 
Secretary to carry out the evaluation under this subsection 
$5,000,000 for the period of fiscal years 2009 through 2012. 
(B) BUDGET AUTHORITY.—Subparagraph (A) constitutes 
budget authority in advance of appropriations Act and rep-
resents the obligation of the Federal Government to provide 
for the payment of such amount to conduct the evaluation 
under this subsection. 
(c) ELECTRONIC TRANSMISSION OF INFORMATION.—Section 1902 
(42 U.S.C. 1396a) is amended by adding at the end the following 
new subsection: 
‘‘(dd) ELECTRONIC TRANSMISSION OF INFORMATION.—If the State 
agency determining eligibility for medical assistance under this 
title or child health assistance under title XXI verifies an element 
of eligibility based on information from an Express Lane Agency 
(as defined in subsection (e)(13)(F)), or from another public agency, 
then the applicant’s signature under penalty of perjury shall not 
be required as to such element. Any signature requirement for 
an application for medical assistance may be satisfied through 
an electronic signature, as defined in section 1710(1) of the Govern-
ment Paperwork Elimination Act (44 U.S.C. 3504 note). The require-
ments of subparagraphs (A) and (B) of section 1137(d)(2) may 
be met through evidence in digital or electronic form.’’. 
(d) AUTHORIZATION OF INFORMATION DISCLOSURE.— 
Recommenda- 
tions. 
Statistics. 
Grants. 
Contracts. 
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123 STAT. 48 
PUBLIC LAW 111–3—FEB. 4, 2009 
(1) IN GENERAL.—Title XIX is amended by adding at the 
end the following new section: 
‘‘SEC. 1942. AUTHORIZATION TO RECEIVE RELEVANT INFORMATION. 
‘‘(a) IN GENERAL.—Notwithstanding any other provision of law, 
a Federal or State agency or private entity in possession of the 
sources of data directly relevant to eligibility determinations under 
this title (including eligibility files maintained by Express Lane 
agencies described in section 1902(e)(13)(F), information described 
in paragraph (2) or (3) of section 1137(a), vital records information 
about births in any State, and information described in sections 
453(i) and 1902(a)(25)(I)) is authorized to convey such data or 
information to the State agency administering the State plan under 
this title, to the extent such conveyance meets the requirements 
of subsection (b). 
‘‘(b) REQUIREMENTS
FOR CONVEYANCE.—Data or information 
may be conveyed pursuant to subsection (a) only if the following 
requirements are met: 
‘‘(1) The individual whose circumstances are described in 
the data or information (or such individual’s parent, guardian, 
caretaker relative, or authorized representative) has either pro-
vided advance consent to disclosure or has not objected to 
disclosure after receiving advance notice of disclosure and a 
reasonable opportunity to object. 
‘‘(2) Such data or information are used solely for the pur-
poses of— 
‘‘(A) identifying individuals who are eligible or poten-
tially eligible for medical assistance under this title and 
enrolling or attempting to enroll such individuals in the 
State plan; and 
‘‘(B) verifying the eligibility of individuals for medical 
assistance under the State plan. 
‘‘(3) An interagency or other agreement, consistent with 
standards developed by the Secretary— 
‘‘(A) prevents the unauthorized use, disclosure, or modi-
fication of such data and otherwise meets applicable Fed-
eral requirements safeguarding privacy and data security; 
and 
‘‘(B) requires the State agency administering the State 
plan to use the data and information obtained under this 
section to seek to enroll individuals in the plan. 
‘‘(c) PENALTIES FOR IMPROPER DISCLOSURE.— 
‘‘(1) CIVIL MONEY PENALTY.—A private entity described in 
the subsection (a) that publishes, discloses, or makes known 
in any manner, or to any extent not authorized by Federal 
law, any information obtained under this section is subject 
to a civil money penalty in an amount equal to $10,000 for 
each such unauthorized publication or disclosure. The provi-
sions of section 1128A (other than subsections (a) and (b) and 
the second sentence of subsection (f)) shall apply to a civil 
money penalty under this paragraph in the same manner as 
such provisions apply to a penalty or proceeding under section 
1128A(a). 
‘‘(2) CRIMINAL PENALTY.—A private entity described in the 
subsection (a) that willfully publishes, discloses, or makes 
known in any manner, or to any extent not authorized by 
Federal law, any information obtained under this section shall 
Applicability. 
42 USC 1396w–2 
note. 
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123 STAT. 49 
PUBLIC LAW 111–3—FEB. 4, 2009 
be fined not more than $10,000 or imprisoned not more than 
1 year, or both, for each such unauthorized publication or 
disclosure. 
‘‘(d) RULE
OF CONSTRUCTION.—The limitations and require-
ments that apply to disclosure pursuant to this section shall not 
be construed to prohibit the conveyance or disclosure of data or 
information otherwise permitted under Federal law (without regard 
to this section).’’. 
(2) CONFORMING
AMENDMENT
TO
TITLE
XXI.—Section 
2107(e)(1) (42 U.S.C. 1397gg(e)(1)), as amended by subsection 
(a)(2), is amended by adding at the end the following new 
subparagraph: 
‘‘(F) Section 1942 (relating to authorization to receive 
data directly relevant to eligibility determinations).’’. 
(3) CONFORMING AMENDMENT TO PROVIDE ACCESS TO DATA 
ABOUT ENROLLMENT IN INSURANCE FOR PURPOSES OF EVALU-
ATING
APPLICATIONS
AND
FOR
CHIP.—Section 1902(a)(25)(I)(i) 
(42 U.S.C. 1396a(a)(25)(I)(i)) is amended— 
(A) by inserting ‘‘(and, at State option, individuals 
who apply or whose eligibility for medical assistance is 
being evaluated in accordance with section 1902(e)(13)(D))’’ 
after ‘‘with respect to individuals who are eligible’’; and 
(B) by inserting ‘‘under this title (and, at State option, 
child health assistance under title XXI)’’ after ‘‘the State 
plan’’. 
(e) AUTHORIZATION
FOR
STATES
ELECTING
EXPRESS
LANE 
OPTION TO RECEIVE CERTAIN DATA DIRECTLY RELEVANT TO DETER-
MINING ELIGIBILITY AND CORRECT AMOUNT OF ASSISTANCE.—The 
Secretary shall enter into such agreements as are necessary to 
permit a State that elects the Express Lane option under section 
1902(e)(13) of the Social Security Act to receive data directly rel-
evant to eligibility determinations and determining the correct 
amount of benefits under a State child health plan under CHIP 
or a State plan under Medicaid from the following: 
(1) The National Directory of New Hires established under 
section 453(i) of the Social Security Act (42 U.S.C. 653(i)). 
(2) Data regarding enrollment in insurance that may help 
to facilitate outreach and enrollment under the State Medicaid 
plan, the State CHIP plan, and such other programs as the 
Secretary may specify. 
(f) EFFECTIVE DATE.—The amendments made by this section 
are effective on the date of the enactment of this Act. 
Subtitle B—Reducing Barriers to 
Enrollment 
SEC. 211. VERIFICATION OF DECLARATION OF CITIZENSHIP OR 
NATIONALITY FOR PURPOSES OF ELIGIBILITY FOR MED-
ICAID AND CHIP. 
(a) ALTERNATIVE STATE PROCESS FOR VERIFICATION OF DEC-
LARATION OF CITIZENSHIP OR NATIONALITY FOR PURPOSES OF ELIGI-
BILITY FOR MEDICAID.— 
(1) ALTERNATIVE TO DOCUMENTATION REQUIREMENT.— 
(A) IN GENERAL.—Section 1902 (42 U.S.C. 1396a), as 
amended by section 203(c), is amended— 
(i) in subsection (a)(46)— 
42 USC 1396a 
note. 
Contracts. 
42 USC 1396w–2 
note. 
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123 STAT. 50 
PUBLIC LAW 111–3—FEB. 4, 2009 
(I) by inserting ‘‘(A)’’ after ‘‘(46)’’; 
(II) by adding ‘‘and’’ after the semicolon; and 
(III) by adding at the end the following new 
subparagraph: 
‘‘(B) provide, with respect to an individual declaring to 
be a citizen or national of the United States for purposes 
of establishing eligibility under this title, that the State shall 
satisfy the requirements of— 
‘‘(i) section 1903(x); or 
‘‘(ii) subsection (ee);’’; and 
(ii) by adding at the end the following new sub-
section: 
‘‘(ee)(1) For purposes of subsection (a)(46)(B)(ii), the require-
ments of this subsection with respect to an individual declaring 
to be a citizen or national of the United States for purposes of 
establishing eligibility under this title, are, in lieu of requiring 
the individual to present satisfactory documentary evidence of citi-
zenship or nationality under section 1903(x) (if the individual is 
not described in paragraph (2) of that section), as follows: 
‘‘(A) The State submits the name and social security 
number of the individual to the Commissioner of Social Security 
as part of the program established under paragraph (2). 
‘‘(B) If the State receives notice from the Commissioner 
of Social Security that the name or social security number, 
or the declaration of citizenship or nationality, of the individual 
is inconsistent with information in the records maintained by 
the Commissioner— 
‘‘(i) the State makes a reasonable effort to identify 
and address the causes of such inconsistency, including 
through typographical or other clerical errors, by contacting 
the individual to confirm the accuracy of the name or 
social security number submitted or declaration of citizen-
ship or nationality and by taking such additional actions 
as the Secretary, through regulation or other guidance, 
or the State may identify, and continues to provide the 
individual with medical assistance while making such 
effort; and 
‘‘(ii) in the case such inconsistency is not resolved 
under clause (i), the State— 
‘‘(I) notifies the individual of such fact; 
‘‘(II) provides the individual with a period of 90 
days from the date on which the notice required under 
subclause (I) is received by the individual to either 
present satisfactory documentary evidence of citizen-
ship or nationality (as defined in section 1903(x)(3)) 
or resolve the inconsistency with the Commissioner 
of Social Security (and continues to provide the indi-
vidual with medical assistance during such 90-day 
period); and 
‘‘(III) disenrolls the individual from the State plan 
under this title within 30 days after the end of such 
90-day period if no such documentary evidence is pre-
sented or if such inconsistency is not resolved. 
‘‘(2)(A) Each State electing to satisfy the requirements of this 
subsection for purposes of section 1902(a)(46)(B) shall establish 
a program under which the State submits at least monthly to 
the Commissioner of Social Security for comparison of the name 
Submission. 
Deadline. 
Deadline. 
Time period. 
Notification. 
Submission. 
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123 STAT. 51 
PUBLIC LAW 111–3—FEB. 4, 2009 
and social security number, of each individual newly enrolled in 
the State plan under this title that month who is not described 
in section 1903(x)(2) and who declares to be a United States citizen 
or national, with information in records maintained by the Commis-
sioner. 
‘‘(B) In establishing the State program under this paragraph, 
the State may enter into an agreement with the Commissioner 
of Social Security— 
‘‘(i) to provide, through an on-line system or otherwise, 
for the electronic submission of, and response to, the informa-
tion submitted under subparagraph (A) for an individual 
enrolled in the State plan under this title who declares to 
be citizen or national on at least a monthly basis; or 
‘‘(ii) to provide for a determination of the consistency of 
the information submitted with the information maintained 
in the records of the Commissioner through such other method 
as agreed to by the State and the Commissioner and approved 
by the Secretary, provided that such method is no more burden-
some for individuals to comply with than any burdens that 
may apply under a method described in clause (i). 
‘‘(C) The program established under this paragraph shall pro-
vide that, in the case of any individual who is required to submit 
a social security number to the State under subparagraph (A) 
and who is unable to provide the State with such number, shall 
be provided with at least the reasonable opportunity to present 
satisfactory documentary evidence of citizenship or nationality (as 
defined in section 1903(x)(3)) as is provided under clauses (i) and 
(ii) of section 1137(d)(4)(A) to an individual for the submittal to 
the State of evidence indicating a satisfactory immigration status. 
‘‘(3)(A) The State agency implementing the plan approved under 
this title shall, at such times and in such form as the Secretary 
may specify, provide information on the percentage each month 
that the inconsistent submissions bears to the total submissions 
made for comparison for such month. For purposes of this subpara-
graph, a name, social security number, or declaration of citizenship 
or nationality of an individual shall be treated as inconsistent 
and included in the determination of such percentage only if— 
‘‘(i) the information submitted by the individual is not 
consistent with information in records maintained by the 
Commissioner of Social Security; 
‘‘(ii) the inconsistency is not resolved by the State; 
‘‘(iii) the individual was provided with a reasonable period 
of time to resolve the inconsistency with the Commissioner 
of Social Security or provide satisfactory documentation of citi-
zenship status and did not successfully resolve such inconsist-
ency; and 
‘‘(iv) payment has been made for an item or service fur-
nished to the individual under this title. 
‘‘(B) If, for any fiscal year, the average monthly percentage 
determined under subparagraph (A) is greater than 3 percent— 
‘‘(i) the State shall develop and adopt a corrective plan 
to review its procedures for verifying the identities of individ-
uals seeking to enroll in the State plan under this title and 
to identify and implement changes in such procedures to 
improve their accuracy; and 
‘‘(ii) pay to the Secretary an amount equal to the amount 
which bears the same ratio to the total payments under the 
Plans. 
Procedures. 
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123 STAT. 52 
PUBLIC LAW 111–3—FEB. 4, 2009 
State plan for the fiscal year for providing medical assistance 
to individuals who provided inconsistent information as the 
number of individuals with inconsistent information in excess 
of 3 percent of such total submitted bears to the total number 
of individuals with inconsistent information. 
‘‘(C) The Secretary may waive, in certain limited cases, all 
or part of the payment under subparagraph (B)(ii) if the State 
is unable to reach the allowable error rate despite a good faith 
effort by such State. 
‘‘(D) Subparagraphs (A) and (B) shall not apply to a State 
for a fiscal year if there is an agreement described in paragraph 
(2)(B) in effect as of the close of the fiscal year that provides 
for the submission on a real-time basis of the information described 
in such paragraph. 
‘‘(4) Nothing in this subsection shall affect the rights of any 
individual under this title to appeal any disenrollment from a 
State plan.’’. 
(B) 
COSTS
OF
IMPLEMENTING
AND
MAINTAINING 
SYSTEM.—Section 1903(a)(3) (42 U.S.C. 1396b(a)(3)) is 
amended— 
(i) by striking ‘‘plus’’ at the end of subparagraph 
(E) and inserting ‘‘and’’, and 
(ii) by adding at the end the following new 
subparagraph: 
‘‘(F)(i) 90 percent of the sums expended during the 
quarter as are attributable to the design, development, 
or installation of such mechanized verification and informa-
tion retrieval systems as the Secretary determines are nec-
essary to implement section 1902(ee) (including a system 
described in paragraph (2)(B) thereof), and 
‘‘(ii) 75 percent of the sums expended during the 
quarter as are attributable to the operation of systems 
to which clause (i) applies, plus’’. 
(2) LIMITATION ON WAIVER AUTHORITY.—Notwithstanding 
any provision of section 1115 of the Social Security Act (42 
U.S.C. 1315), or any other provision of law, the Secretary 
may not waive the requirements of section 1902(a)(46)(B) of 
such Act (42 U.S.C. 1396a(a)(46)(B)) with respect to a State. 
(3) CONFORMING AMENDMENTS.—Section 1903 (42 U.S.C. 
1396b) is amended— 
(A) in subsection (i)(22), by striking ‘‘subsection (x)’’ 
and inserting ‘‘section 1902(a)(46)(B)’’; and 
(B) in subsection (x)(1), by striking ‘‘subsection (i)(22)’’ 
and inserting ‘‘section 1902(a)(46)(B)(i)’’. 
(4) APPROPRIATION.—Out of any money in the Treasury 
of the United States not otherwise appropriated, there are 
appropriated to the Commissioner of Social Security $5,000,000 
to remain available until expended to carry out the Commis-
sioner’s responsibilities under section 1902(ee) of the Social 
Security Act, as added by subsection (a). 
(b) CLARIFICATION
OF REQUIREMENTS RELATING
TO PRESEN-
TATION OF SATISFACTORY DOCUMENTARY EVIDENCE OF CITIZENSHIP 
OR NATIONALITY.— 
(1) ACCEPTANCE OF DOCUMENTARY EVIDENCE ISSUED BY A 
FEDERALLY
RECOGNIZED
INDIAN
TRIBE.—Section 1903(x)(3)(B) 
(42 U.S.C. 1396b(x)(3)(B)) is amended— 
(A) by redesignating clause (v) as clause (vi); and 
42 USC 1396a 
note. 
Waiver authority. 
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123 STAT. 53 
PUBLIC LAW 111–3—FEB. 4, 2009 
(B) by inserting after clause (iv), the following new 
clause: 
‘‘(v)(I) Except as provided in subclause (II), a document 
issued by a federally recognized Indian tribe evidencing mem-
bership or enrollment in, or affiliation with, such tribe (such 
as a tribal enrollment card or certificate of degree of Indian 
blood). 
‘‘(II) With respect to those federally recognized Indian tribes 
located within States having an international border whose 
membership includes individuals who are not citizens of the 
United States, the Secretary shall, after consulting with such 
tribes, issue regulations authorizing the presentation of such 
other forms of documentation (including tribal documentation, 
if appropriate) that the Secretary determines to be satisfactory 
documentary evidence of citizenship or nationality for purposes 
of satisfying the requirement of this subsection.’’. 
(2) REQUIREMENT TO PROVIDE REASONABLE OPPORTUNITY 
TO PRESENT SATISFACTORY DOCUMENTARY EVIDENCE.—Section 
1903(x) (42 U.S.C. 1396b(x)) is amended by adding at the 
end the following new paragraph: 
‘‘(4) In the case of an individual declaring to be a citizen 
or national of the United States with respect to whom a State 
requires the presentation of satisfactory documentary evidence of 
citizenship or nationality under section 1902(a)(46)(B)(i), the indi-
vidual shall be provided at least the reasonable opportunity to 
present satisfactory documentary evidence of citizenship or nation-
ality under this subsection as is provided under clauses (i) and 
(ii) of section 1137(d)(4)(A) to an individual for the submittal to 
the State of evidence indicating a satisfactory immigration status.’’. 
(3) CHILDREN BORN IN THE UNITED STATES TO MOTHERS 
ELIGIBLE FOR MEDICAID.— 
(A) CLARIFICATION
OF
RULES.—Section 1903(x) (42 
U.S.C. 1396b(x)), as amended by paragraph (2), is 
amended— 
(i) in paragraph (2)— 
(I) in subparagraph (C), by striking ‘‘or’’ at 
the end; 
(II) by redesignating subparagraph (D) as 
subparagraph (E); and 
(III) by inserting after subparagraph (C) the 
following new subparagraph: 
‘‘(D) pursuant to the application of section 1902(e)(4) (and, 
in the case of an individual who is eligible for medical assistance 
on such basis, the individual shall be deemed to have provided 
satisfactory documentary evidence of citizenship or nationality 
and shall not be required to provide further documentary evi-
dence on any date that occurs during or after the period in 
which the individual is eligible for medical assistance on such 
basis); or’’; and 
(ii) by adding at the end the following new para-
graph: 
‘‘(5) Nothing in subparagraph (A) or (B) of section 1902(a)(46), 
the preceding paragraphs of this subsection, or the Deficit Reduction 
Act of 2005, including section 6036 of such Act, shall be construed 
as changing the requirement of section 1902(e)(4) that a child 
born in the United States to an alien mother for whom medical 
assistance for the delivery of such child is available as treatment 
Regulations. 
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123 STAT. 54 
PUBLIC LAW 111–3—FEB. 4, 2009 
of an emergency medical condition pursuant to subsection (v) shall 
be deemed eligible for medical assistance during the first year 
of such child’s life.’’. 
(B) STATE REQUIREMENT TO ISSUE SEPARATE IDENTI-
FICATION
NUMBER.—Section 
1902(e)(4) 
(42 
U.S.C. 
1396a(e)(4)) is amended by adding at the end the following 
new sentence: ‘‘Notwithstanding the preceding sentence, 
in the case of a child who is born in the United States 
to an alien mother for whom medical assistance for the 
delivery of the child is made available pursuant to section 
1903(v), the State immediately shall issue a separate 
identification number for the child upon notification by 
the facility at which such delivery occurred of the child’s 
birth.’’. 
(4) TECHNICAL AMENDMENTS.—Section 1903(x)(2) (42 U.S.C. 
1396b(x)) is amended— 
(A) in subparagraph (B)— 
(i) by realigning the left margin of the matter 
preceding clause (i) 2 ems to the left; and 
(ii) by realigning the left margins of clauses (i) 
and (ii), respectively, 2 ems to the left; and 
(B) in subparagraph (C)— 
(i) by realigning the left margin of the matter 
preceding clause (i) 2 ems to the left; and 
(ii) by realigning the left margins of clauses (i) 
and (ii), respectively, 2 ems to the left. 
(c) APPLICATION OF DOCUMENTATION SYSTEM TO CHIP.— 
(1) IN GENERAL.—Section 2105(c) (42 U.S.C. 1397ee(c)), as 
amended by section 114(a), is amended by adding at the end 
the following new paragraph: 
‘‘(9) CITIZENSHIP DOCUMENTATION REQUIREMENTS.— 
‘‘(A) IN GENERAL.—No payment may be made under 
this section with respect to an individual who has, or 
is, declared to be a citizen or national of the United States 
for purposes of establishing eligibility under this title 
unless the State meets the requirements of section 
1902(a)(46)(B) with respect to the individual. 
‘‘(B) ENHANCED
PAYMENTS.—Notwithstanding sub-
section (b), the enhanced FMAP with respect to payments 
under subsection (a) for expenditures described in clause 
(i) or (ii) of section 1903(a)(3)(F) necessary to comply with 
subparagraph (A) shall in no event be less than 90 percent 
and 75 percent, respectively.’’. 
(2) NONAPPLICATION
OF
ADMINISTRATIVE
EXPENDITURES 
CAP.—Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)(C)), as 
amended by section 202(b), is amended by adding at the end 
the following: 
‘‘(ii) EXPENDITURES TO COMPLY WITH CITIZENSHIP 
OR
NATIONALITY
VERIFICATION
REQUIREMENTS.— 
Expenditures necessary for the State to comply with 
paragraph (9)(A).’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.— 
(A) IN GENERAL.—Except as provided in subparagraph 
(B), the amendments made by this section shall take effect 
on January 1, 2010. 
42 USC 1396a 
note. 
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123 STAT. 55 
PUBLIC LAW 111–3—FEB. 4, 2009 
(B) TECHNICAL AMENDMENTS.—The amendments made 
by— 
(i) paragraphs (1), (2), and (3) of subsection (b) 
shall take effect as if included in the enactment of 
section 6036 of the Deficit Reduction Act of 2005 
(Public Law 109–171; 120 Stat. 80); and 
(ii) paragraph (4) of subsection (b) shall take effect 
as if included in the enactment of section 405 of divi-
sion B of the Tax Relief and Health Care Act of 2006 
(Public Law 109–432; 120 Stat. 2996). 
(2) RESTORATION OF ELIGIBILITY.—In the case of an indi-
vidual who, during the period that began on July 1, 2006, 
and ends on October 1, 2009, was determined to be ineligible 
for medical assistance under a State Medicaid plan, including 
any waiver of such plan, solely as a result of the application 
of subsections (i)(22) and (x) of section 1903 of the Social 
Security Act (as in effect during such period), but who would 
have been determined eligible for such assistance if such sub-
sections, as amended by subsection (b), had applied to the 
individual, a State may deem the individual to be eligible 
for such assistance as of the date that the individual was 
determined to be ineligible for such medical assistance on such 
basis. 
(3) SPECIAL TRANSITION RULE FOR INDIANS.—During the 
period that begins on July 1, 2006, and ends on the effective 
date of final regulations issued under subclause (II) of section 
1903(x)(3)(B)(v) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1396b(x)(3)(B)(v)) (as added by subsection (b)(1)(B)), an indi-
vidual who is a member of a federally-recognized Indian tribe 
described in subclause (II) of that section who presents a docu-
ment described in subclause (I) of such section that is issued 
by such Indian tribe, shall be deemed to have presented satis-
factory evidence of citizenship or nationality for purposes of 
satisfying the requirement of subsection (x) of section 1903 
of such Act. 
SEC. 212. REDUCING ADMINISTRATIVE BARRIERS TO ENROLLMENT. 
Section 2102(b) (42 U.S.C. 1397bb(b)) is amended— 
(1) by redesignating paragraph (4) as paragraph (5); and 
(2) by inserting after paragraph (3) the following new para-
graph: 
‘‘(4) REDUCTION OF ADMINISTRATIVE BARRIERS TO ENROLL-
MENT.— 
‘‘(A) IN GENERAL.—Subject to subparagraph (B), the 
plan shall include a description of the procedures used 
to reduce administrative barriers to the enrollment of chil-
dren and pregnant women who are eligible for medical 
assistance under title XIX or for child health assistance 
or health benefits coverage under this title. Such proce-
dures shall be established and revised as often as the 
State determines appropriate to take into account the most 
recent information available to the State identifying such 
barriers. 
‘‘(B) DEEMED COMPLIANCE IF JOINT APPLICATION AND 
RENEWAL PROCESS THAT PERMITS APPLICATION OTHER THAN 
IN
PERSON.—A State shall be deemed to comply with 
subparagraph (A) if the State’s application and renewal 
Plans. 
Procedures. 
Time period. 
Time period. 
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123 STAT. 56 
PUBLIC LAW 111–3—FEB. 4, 2009 
forms and supplemental forms (if any) and information 
verification process is the same for purposes of establishing 
and renewing eligibility for children and pregnant women 
for medical assistance under title XIX and child health 
assistance under this title, and such process does not 
require an application to be made in person or a face- 
to-face interview.’’. 
SEC. 213. MODEL OF INTERSTATE COORDINATED ENROLLMENT AND 
COVERAGE PROCESS. 
(a) IN GENERAL.—In order to assure continuity of coverage 
of low-income children under the Medicaid program and the State 
Children’s Health Insurance Program (CHIP), not later than 18 
months after the date of the enactment of this Act, the Secretary 
of Health and Human Services, in consultation with State Medicaid 
and CHIP directors and organizations representing program bene-
ficiaries, shall develop a model process for the coordination of the 
enrollment, retention, and coverage under such programs of children 
who, because of migration of families, emergency evacuations, nat-
ural or other disasters, public health emergencies, educational 
needs, or otherwise, frequently change their State of residency 
or otherwise are temporarily located outside of the State of their 
residency. 
(b) REPORT TO CONGRESS.—After development of such model 
process, the Secretary of Health and Human Services shall submit 
to Congress a report describing additional steps or authority needed 
to make further improvements to coordinate the enrollment, reten-
tion, and coverage under CHIP and Medicaid of children described 
in subsection (a). 
SEC. 214. PERMITTING STATES TO ENSURE COVERAGE WITHOUT A 
5-YEAR DELAY OF CERTAIN CHILDREN AND PREGNANT 
WOMEN UNDER THE MEDICAID PROGRAM AND CHIP. 
(a) MEDICAID PROGRAM.—Section 1903(v) (42 U.S.C. 1396b(v)) 
is amended— 
(1) in paragraph (1), by striking ‘‘paragraph (2)’’ and 
inserting ‘‘paragraphs (2) and (4)’’; and 
(2) by adding at the end the following new paragraph: 
‘‘(4)(A) A State may elect (in a plan amendment under this 
title) to provide medical assistance under this title, notwithstanding 
sections 401(a), 402(b), 403, and 421 of the Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996, to children and 
pregnant women who are lawfully residing in the United States 
(including battered individuals described in section 431(c) of such 
Act) and who are otherwise eligible for such assistance, within 
either or both of the following eligibility categories: 
‘‘(i) PREGNANT
WOMEN.—Women during pregnancy (and 
during the 60-day period beginning on the last day of the 
pregnancy). 
‘‘(ii) CHILDREN.—Individuals under 21 years of age, 
including optional targeted low-income children described in 
section 1905(u)(2)(B). 
‘‘(B) In the case of a State that has elected to provide medical 
assistance to a category of aliens under subparagraph (A), no debt 
shall accrue under an affidavit of support against any sponsor 
of such an alien on the basis of provision of assistance to such 
category and the cost of such assistance shall not be considered 
as an unreimbursed cost. 
Deadline. 
42 USC 1396 
note. 
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123 STAT. 57 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(C) As part of the State’s ongoing eligibility redetermination 
requirements and procedures for an individual provided medical 
assistance as a result of an election by the State under subpara-
graph (A), a State shall verify that the individual continues to 
lawfully reside in the United States using the documentation pre-
sented to the State by the individual on initial enrollment. If 
the State cannot successfully verify that the individual is lawfully 
residing in the United States in this manner, it shall require 
that the individual provide the State with further documentation 
or other evidence to verify that the individual is lawfully residing 
in the United States.’’. 
(b) CHIP.—Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)), as 
amended by sections 203(a)(2) and 203(d)(2), is amended by redesig-
nating subparagraphs (E) and (F) as subparagraphs (F) and (G), 
respectively and by inserting after subparagraph (D) the following 
new subparagraph: 
‘‘(E) Paragraph (4) of section 1903(v) (relating to 
optional coverage of categories of lawfully residing 
immigrant children or pregnant women), but only if the 
State has elected to apply such paragraph with respect 
to such category of children or pregnant women under 
title XIX.’’. 
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. 
(a) CHIP.— 
(1) IN GENERAL.—Section 2105(c) (42 U.S.C. 1397ee(c)), as 
amended by sections 114(a) and 211(c), is amended by adding 
at the end the following: 
‘‘(10) STATE OPTION TO OFFER PREMIUM ASSISTANCE.— 
‘‘(A) IN GENERAL.—A State may elect to offer a pre-
mium assistance subsidy (as defined in subparagraph (C)) 
for qualified employer-sponsored coverage (as defined in 
subparagraph (B)) to all targeted low-income children who 
are eligible for child health assistance under the plan and 
have access to such coverage in accordance with the 
requirements of this paragraph. No subsidy shall be pro-
vided to a targeted low-income child under this paragraph 
unless the child (or the child’s parent) voluntarily elects 
to receive such a subsidy. A State may not require such 
an election as a condition of receipt of child health assist-
ance. 
‘‘(B) QUALIFIED EMPLOYER-SPONSORED COVERAGE.— 
‘‘(i) IN
GENERAL.—Subject to clause (ii), in this 
paragraph, the term ‘qualified employer-sponsored cov-
erage’ means a group health plan or health insurance 
coverage offered through an employer— 
Verification. 
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123 STAT. 58 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(I) that qualifies as creditable coverage as 
a group health plan under section 2701(c)(1) of 
the Public Health Service Act; 
‘‘(II) for which the employer contribution 
toward any premium for such coverage is at least 
40 percent; and 
‘‘(III) that is offered to all individuals in a 
manner that would be considered a nondiscrim-
inatory eligibility classification for purposes of 
paragraph (3)(A)(ii) of section 105(h) of the 
Internal Revenue Code of 1986 (but determined 
without regard to clause (i) of subparagraph (B) 
of such paragraph). 
‘‘(ii) EXCEPTION.—Such term does not include cov-
erage consisting of— 
‘‘(I) benefits provided under a health flexible 
spending arrangement (as defined in section 
106(c)(2) of the Internal Revenue Code of 1986); 
or 
‘‘(II) a high deductible health plan (as defined 
in section 223(c)(2) of such Code), without regard 
to whether the plan is purchased in conjunction 
with a health savings account (as defined under 
section 223(d) of such Code). 
‘‘(C) PREMIUM ASSISTANCE SUBSIDY.— 
‘‘(i) IN GENERAL.—In this paragraph, the term ‘pre-
mium assistance subsidy’ means, with respect to a 
targeted low-income child, the amount equal to the 
difference between the employee contribution required 
for enrollment only of the employee under qualified 
employer-sponsored coverage and the employee con-
tribution required for enrollment of the employee and 
the child in such coverage, less any applicable premium 
cost-sharing applied under the State child health plan 
(subject to the limitations imposed under section 
2103(e), including the requirement to count the total 
amount of the employee contribution required for 
enrollment of the employee and the child in such cov-
erage toward the annual aggregate cost-sharing limit 
applied under paragraph (3)(B) of such section). 
‘‘(ii) STATE PAYMENT OPTION.—A State may provide 
a premium assistance subsidy either as reimbursement 
to an employee for out-of-pocket expenditures or, sub-
ject to clause (iii), directly to the employee’s employer. 
‘‘(iii) EMPLOYER OPT-OUT.—An employer may notify 
a State that it elects to opt-out of being directly paid 
a premium assistance subsidy on behalf of an 
employee. In the event of such a notification, an 
employer shall withhold the total amount of the 
employee contribution required for enrollment of the 
employee and the child in the qualified employer-spon-
sored coverage and the State shall pay the premium 
assistance subsidy directly to the employee. 
‘‘(iv) TREATMENT AS CHILD HEALTH ASSISTANCE.— 
Expenditures for the provision of premium assistance 
subsidies shall be considered child health assistance 
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123 STAT. 59 
PUBLIC LAW 111–3—FEB. 4, 2009 
described in paragraph (1)(C) of subsection (a) for pur-
poses of making payments under that subsection. 
‘‘(D) APPLICATION OF SECONDARY PAYOR RULES.—The 
State shall be a secondary payor for any items or services 
provided under the qualified employer-sponsored coverage 
for which the State provides child health assistance under 
the State child health plan. 
‘‘(E) REQUIREMENT
TO
PROVIDE
SUPPLEMENTAL
COV-
ERAGE FOR BENEFITS AND COST-SHARING PROTECTION PRO-
VIDED UNDER THE STATE CHILD HEALTH PLAN.— 
‘‘(i) 
IN
GENERAL.—Notwithstanding 
section 
2110(b)(1)(C), the State shall provide for each targeted 
low-income child enrolled in qualified employer-spon-
sored coverage, supplemental coverage consisting of— 
‘‘(I) items or services that are not covered, 
or are only partially covered, under the qualified 
employer-sponsored coverage; and 
‘‘(II) cost-sharing protection consistent with 
section 2103(e). 
‘‘(ii) RECORD
KEEPING
REQUIREMENTS.—For pur-
poses of carrying out clause (i), a State may elect 
to directly pay out-of-pocket expenditures for cost- 
sharing imposed under the qualified employer-spon-
sored coverage and collect or not collect all or any 
portion of such expenditures from the parent of the 
child. 
‘‘(F) APPLICATION OF WAITING PERIOD IMPOSED UNDER 
THE STATE.—Any waiting period imposed under the State 
child health plan prior to the provision of child health 
assistance to a targeted low-income child under the State 
plan shall apply to the same extent to the provision of 
a premium assistance subsidy for the child under this 
paragraph. 
‘‘(G) OPT-OUT PERMITTED FOR ANY MONTH.—A State 
shall establish a process for permitting the parent of a 
targeted low-income child receiving a premium assistance 
subsidy to disenroll the child from the qualified employer- 
sponsored coverage and enroll the child in, and receive 
child health assistance under, the State child health plan, 
effective on the first day of any month for which the child 
is eligible for such assistance and in a manner that ensures 
continuity of coverage for the child. 
‘‘(H) APPLICATION
TO
PARENTS.—If a State provides 
child health assistance or health benefits coverage to par-
ents of a targeted low-income child in accordance with 
section 2111(b), the State may elect to offer a premium 
assistance subsidy to a parent of a targeted low-income 
child who is eligible for such a subsidy under this para-
graph in the same manner as the State offers such a 
subsidy for the enrollment of the child in qualified 
employer-sponsored coverage, except that— 
‘‘(i) the amount of the premium assistance subsidy 
shall be increased to take into account the cost of 
the enrollment of the parent in the qualified employer- 
sponsored coverage or, at the option of the State if 
the State determines it cost-effective, the cost of the 
enrollment of the child’s family in such coverage; and 
Procedures. 
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123 STAT. 60 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(ii) any reference in this paragraph to a child 
is deemed to include a reference to the parent or, 
if applicable under clause (i), the family of the child. 
‘‘(I) ADDITIONAL STATE OPTION FOR PROVIDING PREMIUM 
ASSISTANCE.— 
‘‘(i) IN
GENERAL.—A State may establish an 
employer-family premium assistance purchasing pool 
for employers with less than 250 employees who have 
at least 1 employee who is a pregnant woman eligible 
for assistance under the State child health plan 
(including through the application of an option 
described in section 2112(f)) or a member of a family 
with at least 1 targeted low-income child and to provide 
a premium assistance subsidy under this paragraph 
for enrollment in coverage made available through such 
pool. 
‘‘(ii) ACCESS
TO
CHOICE
OF
COVERAGE.—A State 
that elects the option under clause (i) shall identify 
and offer access to not less than 2 private health 
plans that are health benefits coverage that is equiva-
lent to the benefits coverage in a benchmark benefit 
package described in section 2103(b) or benchmark- 
equivalent coverage that meets the requirements of 
section 2103(a)(2) for employees described in clause 
(i). 
‘‘(iii) CLARIFICATION OF PAYMENT FOR ADMINISTRA-
TIVE
EXPENDITURES.—Nothing in this subparagraph 
shall be construed as permitting payment under this 
section for administrative expenditures attributable to 
the establishment or operation of such pool, except 
to the extent that such payment would otherwise be 
permitted under this title. 
‘‘(J) NO EFFECT ON PREMIUM ASSISTANCE WAIVER PRO-
GRAMS.—Nothing in this paragraph shall be construed as 
limiting the authority of a State to offer premium assist-
ance under section 1906 or 1906A, a waiver described 
in paragraph (2)(B) or (3), a waiver approved under section 
1115, or other authority in effect prior to the date of enact-
ment of the Children’s Health Insurance Program 
Reauthorization Act of 2009. 
‘‘(K) NOTICE OF AVAILABILITY.—If a State elects to pro-
vide premium assistance subsidies in accordance with this 
paragraph, the State shall— 
‘‘(i) include on any application or enrollment form 
for child health assistance a notice of the availability 
of premium assistance subsidies for the enrollment 
of targeted low-income children in qualified employer- 
sponsored coverage; 
‘‘(ii) provide, as part of the application and enroll-
ment process under the State child health plan, 
information describing the availability of such sub-
sidies and how to elect to obtain such a subsidy; and 
‘‘(iii) establish such other procedures as the State 
determines necessary to ensure that parents are fully 
informed of the choices for receiving child health assist-
ance under the State child health plan or through 
the receipt of premium assistance subsidies. 
Procedures. 
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123 STAT. 61 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(L) APPLICATION TO QUALIFIED EMPLOYER-SPONSORED 
BENCHMARK COVERAGE.—If a group health plan or health 
insurance coverage offered through an employer is certified 
by an actuary as health benefits coverage that is equivalent 
to the benefits coverage in a benchmark benefit package 
described in section 2103(b) or benchmark-equivalent cov-
erage that meets the requirements of section 2103(a)(2), 
the State may provide premium assistance subsidies for 
enrollment of targeted low-income children in such group 
health plan or health insurance coverage in the same 
manner as such subsidies are provided under this para-
graph for enrollment in qualified employer-sponsored cov-
erage, but without regard to the requirement to provide 
supplemental coverage for benefits and cost-sharing protec-
tion provided under the State child health plan under 
subparagraph (E). 
‘‘(M) SATISFACTION OF COST-EFFECTIVENESS TEST.—Pre-
mium assistance subsidies for qualified employer-sponsored 
coverage offered under this paragraph shall be deemed 
to meet the requirement of subparagraph (A) of paragraph 
(3). 
‘‘(N) COORDINATION
WITH
MEDICAID.—In the case of 
a targeted low-income child who receives child health 
assistance through a State plan under title XIX and who 
voluntarily elects to receive a premium assistance subsidy 
under this section, the provisions of section 1906A shall 
apply and shall supersede any other provisions of this 
paragraph that are inconsistent with such section.’’. 
(2) DETERMINATION OF COST-EFFECTIVENESS FOR PREMIUM 
ASSISTANCE OR PURCHASE OF FAMILY COVERAGE.— 
(A) IN
GENERAL.—Section 2105(c)(3)(A) (42 U.S.C. 
1397ee(c)(3)(A)) is amended by striking ‘‘relative to’’ and 
all that follows through the comma and inserting ‘‘relative 
to 
‘‘(i) the amount of expenditures under the State 
child health plan, including administrative expendi-
tures, that the State would have made to provide com-
parable coverage of the targeted low-income child 
involved or the family involved (as applicable); or 
‘‘(ii) the aggregate amount of expenditures that 
the State would have made under the State child 
health plan, including administrative expenditures, for 
providing coverage under such plan for all such chil-
dren or families.’’. 
(B) NONAPPLICATION
TO
PREVIOUSLY
APPROVED
COV-
ERAGE.—The amendment made by subparagraph (A) shall 
not apply to coverage the purchase of which has been 
approved by the Secretary under section 2105(c)(3) of the 
Social Security Act prior to the date of enactment of this 
Act. 
(b) MEDICAID.—Title XIX is amended by inserting after section 
1906 the following new section: 
‘‘PREMIUM ASSISTANCE OPTION FOR CHILDREN 
‘‘SEC. 1906A. (a) IN GENERAL.—A State may elect to offer a 
premium assistance subsidy (as defined in subsection (c)) for quali-
fied employer-sponsored coverage (as defined in subsection (b)) to 
42 USC 1396e–1. 
42 USC 1397ee 
note. 
Applicability. 
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123 STAT. 62 
PUBLIC LAW 111–3—FEB. 4, 2009 
all individuals under age 19 who are entitled to medical assistance 
under this title (and to the parent of such an individual) who 
have access to such coverage if the State meets the requirements 
of this section. 
‘‘(b) QUALIFIED EMPLOYER-SPONSORED COVERAGE.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2)), in this para-
graph, the term ‘qualified employer-sponsored coverage’ means 
a group health plan or health insurance coverage offered 
through an employer— 
‘‘(A) that qualifies as creditable coverage as a group 
health plan under section 2701(c)(1) of the Public Health 
Service Act; 
‘‘(B) for which the employer contribution toward any 
premium for such coverage is at least 40 percent; and 
‘‘(C) that is offered to all individuals in a manner 
that would be considered a nondiscriminatory eligibility 
classification for purposes of paragraph (3)(A)(ii) of section 
105(h) of the Internal Revenue Code of 1986 (but deter-
mined without regard to clause (i) of subparagraph (B) 
of such paragraph). 
‘‘(2) EXCEPTION.—Such term does not include coverage con-
sisting of— 
‘‘(A) benefits provided under a health flexible spending 
arrangement (as defined in section 106(c)(2) of the Internal 
Revenue Code of 1986); or 
‘‘(B) a high deductible health plan (as defined in section 
223(c)(2) of such Code), without regard to whether the 
plan is purchased in conjunction with a health savings 
account (as defined under section 223(d) of such Code). 
‘‘(3) TREATMENT AS THIRD PARTY LIABILITY.—The State shall 
treat the coverage provided under qualified employer-sponsored 
coverage as a third party liability under section 1902(a)(25). 
‘‘(c) PREMIUM ASSISTANCE SUBSIDY.—In this section, the term 
‘premium assistance subsidy’ means the amount of the employee 
contribution for enrollment in the qualified employer-sponsored cov-
erage by the individual under age 19 or by the individual’s family. 
Premium assistance subsidies under this section shall be considered, 
for purposes of section 1903(a), to be a payment for medical assist-
ance. 
‘‘(d) VOLUNTARY PARTICIPATION.— 
‘‘(1) EMPLOYERS.—Participation by an employer in a pre-
mium assistance subsidy offered by a State under this section 
shall be voluntary. An employer may notify a State that it 
elects to opt-out of being directly paid a premium assistance 
subsidy on behalf of an employee. 
‘‘(2) BENEFICIARIES.—No subsidy shall be provided to an 
individual under age 19 under this section unless the individual 
(or the individual’s parent) voluntarily elects to receive such 
a subsidy. A State may not require such an election as a 
condition of receipt of medical assistance. State may not require, 
as a condition of an individual under age 19 (or the individual’s 
parent) being or remaining eligible for medical assistance under 
this title, apply for enrollment in qualified employer-sponsored 
coverage under this section. 
‘‘(3) OPT-OUT PERMITTED FOR ANY MONTH.—A State shall 
establish a process for permitting the parent of an individual 
under age 19 receiving a premium assistance subsidy to 
Procedures. 
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123 STAT. 63 
PUBLIC LAW 111–3—FEB. 4, 2009 
disenroll the individual from the qualified employer-sponsored 
coverage. 
‘‘(e) REQUIREMENT TO PAY PREMIUMS AND COST-SHARING AND 
PROVIDE SUPPLEMENTAL COVERAGE.—In the case of the participa-
tion of an individual under age 19 (or the individual’s parent) 
in a premium assistance subsidy under this section for qualified 
employer-sponsored coverage, the State shall provide for payment 
of all enrollee premiums for enrollment in such coverage and all 
deductibles, coinsurance, and other cost-sharing obligations for 
items and services otherwise covered under the State plan under 
this title (exceeding the amount otherwise permitted under section 
1916 or, if applicable, section 1916A). The fact that an individual 
under age 19 (or a parent) elects to enroll in qualified employer- 
sponsored coverage under this section shall not change the individ-
ual’s (or parent’s) eligibility for medical assistance under the State 
plan, except insofar as section 1902(a)(25) provides that payments 
for such assistance shall first be made under such coverage.’’. 
(c) GAO STUDY AND REPORT.—Not later than January 1, 2010, 
the Comptroller General of the United States shall study cost 
and coverage issues relating to any State premium assistance pro-
grams for which Federal matching payments are made under title 
XIX or XXI of the Social Security Act, including under waiver 
authority, and shall submit a report to the Committee on Finance 
of the Senate and the Committee on Energy and Commerce of 
the House of Representatives on the results of such study. 
SEC. 302. OUTREACH, EDUCATION, AND ENROLLMENT ASSISTANCE. 
(a) REQUIREMENT TO INCLUDE DESCRIPTION OF OUTREACH, EDU-
CATION, AND ENROLLMENT EFFORTS RELATED TO PREMIUM ASSIST-
ANCE SUBSIDIES IN STATE CHILD HEALTH PLAN.—Section 2102(c) 
(42 U.S.C. 1397bb(c)) is amended by adding at the end the following 
new paragraph: 
‘‘(3) PREMIUM ASSISTANCE SUBSIDIES.—In the case of a State 
that provides for premium assistance subsidies under the State 
child health plan in accordance with paragraph (2)(B), (3), 
or (10) of section 2105(c), or a waiver approved under section 
1115, outreach, education, and enrollment assistance for fami-
lies of children likely to be eligible for such subsidies, to inform 
such families of the availability of, and to assist them in 
enrolling their children in, such subsidies, and for employers 
likely to provide coverage that is eligible for such subsidies, 
including the specific, significant resources the State intends 
to apply to educate employers about the availability of premium 
assistance subsidies under the State child health plan.’’. 
(b) NONAPPLICATION OF 10 PERCENT LIMIT ON OUTREACH AND 
CERTAIN OTHER EXPENDITURES.—Section 2105(c)(2)(C) (42 U.S.C. 
1397ee(c)(2)(C)), as amended by section 211(c)(2), is amended by 
adding at the end the following new clause: 
‘‘(iii) EXPENDITURES FOR OUTREACH TO INCREASE 
THE ENROLLMENT OF CHILDREN UNDER THIS TITLE AND 
TITLE xix THROUGH PREMIUM ASSISTANCE SUBSIDIES.— 
Expenditures for outreach activities to families of chil-
dren likely to be eligible for premium assistance sub-
sidies in accordance with paragraph (2)(B), (3), or (10), 
or a waiver approved under section 1115, to inform 
such families of the availability of, and to assist them 
in enrolling their children in, such subsidies, and to 
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123 STAT. 64 
PUBLIC LAW 111–3—FEB. 4, 2009 
employers likely to provide qualified employer-spon-
sored coverage (as defined in subparagraph (B) of such 
paragraph), but not to exceed an amount equal to 
1.25 percent of the maximum amount permitted to 
be expended under subparagraph (A) for items 
described in subsection (a)(1)(D).’’. 
Subtitle B—Coordinating Premium 
Assistance With Private Coverage 
SEC. 311. SPECIAL ENROLLMENT PERIOD UNDER GROUP HEALTH 
PLANS IN CASE OF TERMINATION OF MEDICAID OR CHIP 
COVERAGE OR ELIGIBILITY FOR ASSISTANCE IN PUR-
CHASE OF EMPLOYMENT-BASED COVERAGE; COORDINA-
TION OF COVERAGE. 
(a) AMENDMENTS TO INTERNAL REVENUE CODE OF 1986.—Sec-
tion 9801(f) of the Internal Revenue Code of 1986 (relating to 
special enrollment periods) is amended by adding at the end the 
following new paragraph: 
‘‘(3) SPECIAL
RULES
RELATING
TO
MEDICAID
AND
CHIP.— 
‘‘(A) IN GENERAL.—A group health plan shall permit 
an employee who is eligible, but not enrolled, for coverage 
under the terms of the plan (or a dependent of such an 
employee if the dependent is eligible, but not enrolled, 
for coverage under such terms) to enroll for coverage under 
the terms of the plan if either of the following conditions 
is met: 
‘‘(i) TERMINATION
OF
MEDICAID
OR
CHIP
COV-
ERAGE.—The employee or dependent is covered under 
a Medicaid plan under title XIX of the Social Security 
Act or under a State child health plan under title 
XXI of such Act and coverage of the employee or 
dependent under such a plan is terminated as a result 
of loss of eligibility for such coverage and the employee 
requests coverage under the group health plan not 
later than 60 days after the date of termination of 
such coverage. 
‘‘(ii) ELIGIBILITY
FOR
EMPLOYMENT
ASSISTANCE 
UNDER MEDICAID OR CHIP.—The employee or dependent 
becomes eligible for assistance, with respect to coverage 
under the group health plan under such Medicaid plan 
or State child health plan (including under any waiver 
or demonstration project conducted under or in relation 
to such a plan), if the employee requests coverage 
under the group health plan not later than 60 days 
after the date the employee or dependent is determined 
to be eligible for such assistance. 
‘‘(B) EMPLOYEE OUTREACH AND DISCLOSURE.— 
‘‘(i) OUTREACH TO EMPLOYEES REGARDING AVAIL-
ABILITY OF MEDICAID AND CHIP COVERAGE.— 
‘‘(I) IN GENERAL.—Each employer that main-
tains a group health plan in a State that provides 
medical assistance under a State Medicaid plan 
under title XIX of the Social Security Act, or child 
health assistance under a State child health plan 
under title XXI of such Act, in the form of premium 
Notification. 
Deadlines. 
26 USC 9801. 
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123 STAT. 65 
PUBLIC LAW 111–3—FEB. 4, 2009 
assistance for the purchase of coverage under a 
group health plan, shall provide to each employee 
a written notice informing the employee of poten-
tial opportunities then currently available in the 
State in which the employee resides for premium 
assistance under such plans for health coverage 
of the employee or the employee’s dependents. For 
purposes of compliance with this clause, the 
employer may use any State-specific model notice 
developed 
in 
accordance 
with 
section 
701(f)(3)(B)(i)(II) of the Employee Retirement 
Income 
Security 
Act 
of 
1974 
(29 
U.S.C. 
1181(f)(3)(B)(i)(II)). 
‘‘(II) OPTION
TO
PROVIDE
CONCURRENT
WITH 
PROVISION OF PLAN MATERIALS TO EMPLOYEE.—An 
employer may provide the model notice applicable 
to the State in which an employee resides concur-
rent with the furnishing of materials notifying the 
employee of health plan eligibility, concurrent with 
materials provided to the employee in connection 
with an open season or election process conducted 
under the plan, or concurrent with the furnishing 
of the summary plan description as provided in 
section 104(b) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1024). 
‘‘(ii) DISCLOSURE ABOUT GROUP HEALTH PLAN BENE-
FITS
TO
STATES
FOR
MEDICAID
AND
CHIP
ELIGIBLE 
INDIVIDUALS.—In the case of a participant or bene-
ficiary of a group health plan who is covered under 
a Medicaid plan of a State under title XIX of the 
Social Security Act or under a State child health plan 
under title XXI of such Act, the plan administrator 
of the group health plan shall disclose to the State, 
upon request, information about the benefits available 
under the group health plan in sufficient specificity, 
as determined under regulations of the Secretary of 
Health and Human Services in consultation with the 
Secretary that require use of the model coverage 
coordination disclosure form developed under section 
311(b)(1)(C) of the Children’s Health Insurance Pro-
gram Reauthorization Act of 2009, so as to permit 
the State to make a determination (under paragraph 
(2)(B), (3), or (10) of section 2105(c) of the Social Secu-
rity Act or otherwise) concerning the cost-effectiveness 
of the State providing medical or child health assist-
ance through premium assistance for the purchase of 
coverage under such group health plan and in order 
for the State to provide supplemental benefits required 
under paragraph (10)(E) of such section or other 
authority.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECU-
RITY ACT.— 
(A) IN
GENERAL.—Section 701(f) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1181(f)) 
is amended by adding at the end the following new para-
graph: 
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123 STAT. 66 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(3) SPECIAL RULES FOR APPLICATION IN CASE OF MEDICAID 
AND CHIP.— 
‘‘(A) IN GENERAL.—A group health plan, and a health 
insurance issuer offering group health insurance coverage 
in connection with a group health plan, shall permit an 
employee who is eligible, but not enrolled, for coverage 
under the terms of the plan (or a dependent of such an 
employee if the dependent is eligible, but not enrolled, 
for coverage under such terms) to enroll for coverage under 
the terms of the plan if either of the following conditions 
is met: 
‘‘(i) TERMINATION
OF
MEDICAID
OR
CHIP
COV-
ERAGE.—The employee or dependent is covered under 
a Medicaid plan under title XIX of the Social Security 
Act or under a State child health plan under title 
XXI of such Act and coverage of the employee or 
dependent under such a plan is terminated as a result 
of loss of eligibility for such coverage and the employee 
requests coverage under the group health plan (or 
health insurance coverage) not later than 60 days after 
the date of termination of such coverage. 
‘‘(ii) ELIGIBILITY
FOR
EMPLOYMENT
ASSISTANCE 
UNDER MEDICAID OR CHIP.—The employee or dependent 
becomes eligible for assistance, with respect to coverage 
under the group health plan or health insurance cov-
erage, under such Medicaid plan or State child health 
plan (including under any waiver or demonstration 
project conducted under or in relation to such a plan), 
if the employee requests coverage under the group 
health plan or health insurance coverage not later 
than 60 days after the date the employee or dependent 
is determined to be eligible for such assistance. 
‘‘(B) COORDINATION WITH MEDICAID AND CHIP.— 
‘‘(i) OUTREACH TO EMPLOYEES REGARDING AVAIL-
ABILITY OF MEDICAID AND CHIP COVERAGE.— 
‘‘(I) IN GENERAL.—Each employer that main-
tains a group health plan in a State that provides 
medical assistance under a State Medicaid plan 
under title XIX of the Social Security Act, or child 
health assistance under a State child health plan 
under title XXI of such Act, in the form of premium 
assistance for the purchase of coverage under a 
group health plan, shall provide to each employee 
a written notice informing the employee of poten-
tial opportunities then currently available in the 
State in which the employee resides for premium 
assistance under such plans for health coverage 
of the employee or the employee’s dependents. 
‘‘(II) MODEL NOTICE.—Not later than 1 year 
after the date of enactment of the Children’s 
Health Insurance Program Reauthorization Act of 
2009, the Secretary and the Secretary of Health 
and Human Services, in consultation with Direc-
tors of State Medicaid agencies under title XIX 
of the Social Security Act and Directors of State 
CHIP agencies under title XXI of such Act, shall 
jointly develop national and State-specific model 
Deadline. 
Notification. 
Deadlines. 
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123 STAT. 67 
PUBLIC LAW 111–3—FEB. 4, 2009 
notices for purposes of subparagraph (A). The Sec-
retary shall provide employers with such model 
notices so as to enable employers to timely comply 
with the requirements of subparagraph (A). Such 
model notices shall include information regarding 
how an employee may contact the State in which 
the employee resides for additional information 
regarding potential opportunities for such pre-
mium assistance, including how to apply for such 
assistance. 
‘‘(III) OPTION TO PROVIDE CONCURRENT WITH 
PROVISION OF PLAN MATERIALS TO EMPLOYEE.—An 
employer may provide the model notice applicable 
to the State in which an employee resides concur-
rent with the furnishing of materials notifying the 
employee of health plan eligibility, concurrent with 
materials provided to the employee in connection 
with an open season or election process conducted 
under the plan, or concurrent with the furnishing 
of the summary plan description as provided in 
section 104(b). 
‘‘(ii) DISCLOSURE ABOUT GROUP HEALTH PLAN BENE-
FITS
TO
STATES
FOR
MEDICAID
AND
CHIP
ELIGIBLE 
INDIVIDUALS.—In the case of a participant or bene-
ficiary of a group health plan who is covered under 
a Medicaid plan of a State under title XIX of the 
Social Security Act or under a State child health plan 
under title XXI of such Act, the plan administrator 
of the group health plan shall disclose to the State, 
upon request, information about the benefits available 
under the group health plan in sufficient specificity, 
as determined under regulations of the Secretary of 
Health and Human Services in consultation with the 
Secretary that require use of the model coverage 
coordination disclosure form developed under section 
311(b)(1)(C) of the Children’s Health Insurance Pro-
gram Reauthorization Act of 2009, so as to permit 
the State to make a determination (under paragraph 
(2)(B), (3), or (10) of section 2105(c) of the Social Secu-
rity Act or otherwise) concerning the cost-effectiveness 
of the State providing medical or child health assist-
ance through premium assistance for the purchase of 
coverage under such group health plan and in order 
for the State to provide supplemental benefits required 
under paragraph (10)(E) of such section or other 
authority.’’. 
(B) CONFORMING AMENDMENT.—Section 102(b) of the 
Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1022(b)) is amended— 
(i) by striking ‘‘and the remedies’’ and inserting 
‘‘, the remedies’’; and 
(ii) by inserting before the period the following: 
‘‘, and if the employer so elects for purposes of com-
plying with section 701(f)(3)(B)(i), the model notice 
applicable to the State in which the participants and 
beneficiaries reside’’. 
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123 STAT. 68 
PUBLIC LAW 111–3—FEB. 4, 2009 
(C) WORKING
GROUP
TO
DEVELOP
MODEL
COVERAGE 
COORDINATION DISCLOSURE FORM.— 
(i) MEDICAID, CHIP, AND
EMPLOYER-SPONSORED 
COVERAGE COORDINATION WORKING GROUP.— 
(I) IN GENERAL.—Not later than 60 days after 
the date of enactment of this Act, the Secretary 
of Health and Human Services and the Secretary 
of Labor shall jointly establish a Medicaid, CHIP, 
and Employer-Sponsored Coverage Coordination 
Working Group (in this subparagraph referred to 
as the ‘‘Working Group’’). The purpose of the 
Working Group shall be to develop the model cov-
erage coordination disclosure form described in 
subclause (II) and to identify the impediments to 
the effective coordination of coverage available to 
families that include employees of employers that 
maintain group health plans and members who 
are eligible for medical assistance under title XIX 
of the Social Security Act or child health assistance 
or other health benefits coverage under title XXI 
of such Act. 
(II) MODEL COVERAGE COORDINATION DISCLO-
SURE FORM DESCRIBED.—The model form described 
in this subclause is a form for plan administrators 
of group health plans to complete for purposes 
of permitting a State to determine the availability 
and cost-effectiveness of the coverage available 
under such plans to employees who have family 
members who are eligible for premium assistance 
offered under a State plan under title XIX or XXI 
of such Act and to allow for coordination of cov-
erage for enrollees of such plans. Such form shall 
provide the following information in addition to 
such other information as the Working Group 
determines appropriate: 
(aa) A determination of whether the 
employee is eligible for coverage under the 
group health plan. 
(bb) The name and contract information 
of the plan administrator of the group health 
plan. 
(cc) The benefits offered under the plan. 
(dd) The premiums and cost-sharing 
required under the plan. 
(ee) Any other information relevant to cov-
erage under the plan. 
(ii) MEMBERSHIP.—The Working Group shall con-
sist of not more than 30 members and shall be com-
posed of representatives of— 
(I) the Department of Labor; 
(II) the Department of Health and Human 
Services; 
(III) State directors of the Medicaid program 
under title XIX of the Social Security Act; 
(IV) State directors of the State Children’s 
Health Insurance Program under title XXI of the 
Social Security Act; 
Deadline. 
Establishment. 
29 USC 1181 
note. 
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123 STAT. 69 
PUBLIC LAW 111–3—FEB. 4, 2009 
(V) employers, including owners of small 
businesses and their trade or industry representa-
tives and certified human resource and payroll 
professionals; 
(VI) plan administrators and plan sponsors 
of group health plans (as defined in section 607(1) 
of the Employee Retirement Income Security Act 
of 1974); 
(VII) health insurance issuers; and 
(VIII) children and other beneficiaries of med-
ical assistance under title XIX of the Social Secu-
rity Act or child health assistance or other health 
benefits coverage under title XXI of such Act. 
(iii) COMPENSATION.—The members of the Working 
Group shall serve without compensation. 
(iv) ADMINISTRATIVE SUPPORT.—The Department of 
Health and Human Services and the Department of 
Labor shall jointly provide appropriate administrative 
support to the Working Group, including technical 
assistance. The Working Group may use the services 
and facilities of either such Department, with or with-
out reimbursement, as jointly determined by such 
Departments. 
(v) REPORT.— 
(I) REPORT BY WORKING GROUP TO THE SECRE-
TARIES.—Not later than 18 months after the date 
of the enactment of this Act, the Working Group 
shall submit to the Secretary of Labor and the 
Secretary of Health and Human Services the model 
form described in clause (i)(II) along with a report 
containing recommendations for appropriate meas-
ures to address the impediments to the effective 
coordination of coverage between group health 
plans and the State plans under titles XIX and 
XXI of the Social Security Act. 
(II) REPORT
BY
SECRETARIES
TO
THE
CON-
GRESS.—Not later than 2 months after receipt of 
the report pursuant to subclause (I), the Secre-
taries shall jointly submit a report to each House 
of the Congress regarding the recommendations 
contained in the report under such subclause. 
(vi) TERMINATION.—The Working Group shall 
terminate 30 days after the date of the issuance of 
its report under clause (v). 
(D) EFFECTIVE
DATES.—The Secretary of Labor and 
the Secretary of Health and Human Services shall develop 
the initial model notices under section 701(f)(3)(B)(i)(II) 
of the Employee Retirement Income Security Act of 1974, 
and the Secretary of Labor shall provide such notices to 
employers, not later than the date that is 1 year after 
the date of enactment of this Act, and each employer shall 
provide the initial annual notices to such employer’s 
employees beginning with the first plan year that begins 
after the date on which such initial model notices are 
first issued. The model coverage coordination disclosure 
form developed under subparagraph (C) shall apply with 
respect to requests made by States beginning with the 
Applicability. 
Notification. 
Deadline. 
29 USC 1181 
note. 
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123 STAT. 70 
PUBLIC LAW 111–3—FEB. 4, 2009 
first plan year that begins after the date on which such 
model coverage coordination disclosure form is first issued. 
(E) ENFORCEMENT.—Section 502 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1132) 
is amended— 
(i) in subsection (a)(6), by striking ‘‘or (8)’’ and 
inserting ‘‘(8), or (9)’’; and 
(ii) in subsection (c), by redesignating paragraph 
(9) as paragraph (10), and by inserting after paragraph 
(8) the following: 
‘‘(9)(A) The Secretary may assess a civil penalty against any 
employer of up to $100 a day from the date of the employer’s 
failure to meet the notice requirement of section 701(f)(3)(B)(i)(I). 
For purposes of this subparagraph, each violation with respect 
to any single employee shall be treated as a separate violation. 
‘‘(B) The Secretary may assess a civil penalty against any 
plan administrator of up to $100 a day from the date of the plan 
administrator’s failure to timely provide to any State the informa-
tion required to be disclosed under section 701(f)(3)(B)(ii). For pur-
poses of this subparagraph, each violation with respect to any 
single participant or beneficiary shall be treated as a separate 
violation.’’. 
(2) AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.—Section 
2701(f) of the Public Health Service Act (42 U.S.C. 300gg(f)) 
is amended by adding at the end the following new paragraph: 
‘‘(3) SPECIAL RULES FOR APPLICATION IN CASE OF MEDICAID 
AND CHIP.— 
‘‘(A) IN GENERAL.—A group health plan, and a health 
insurance issuer offering group health insurance coverage 
in connection with a group health plan, shall permit an 
employee who is eligible, but not enrolled, for coverage 
under the terms of the plan (or a dependent of such an 
employee if the dependent is eligible, but not enrolled, 
for coverage under such terms) to enroll for coverage under 
the terms of the plan if either of the following conditions 
is met: 
‘‘(i) TERMINATION
OF
MEDICAID
OR
CHIP
COV-
ERAGE.—The employee or dependent is covered under 
a Medicaid plan under title XIX of the Social Security 
Act or under a State child health plan under title 
XXI of such Act and coverage of the employee or 
dependent under such a plan is terminated as a result 
of loss of eligibility for such coverage and the employee 
requests coverage under the group health plan (or 
health insurance coverage) not later than 60 days after 
the date of termination of such coverage. 
‘‘(ii) ELIGIBILITY
FOR
EMPLOYMENT
ASSISTANCE 
UNDER MEDICAID OR CHIP.—The employee or dependent 
becomes eligible for assistance, with respect to coverage 
under the group health plan or health insurance cov-
erage, under such Medicaid plan or State child health 
plan (including under any waiver or demonstration 
project conducted under or in relation to such a plan), 
if the employee requests coverage under the group 
health plan or health insurance coverage not later 
than 60 days after the date the employee or dependent 
is determined to be eligible for such assistance. 
Deadlines. 
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123 STAT. 71 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(B) COORDINATION WITH MEDICAID AND CHIP.— 
‘‘(i) OUTREACH TO EMPLOYEES REGARDING AVAIL-
ABILITY OF MEDICAID AND CHIP COVERAGE.— 
‘‘(I) IN GENERAL.—Each employer that main-
tains a group health plan in a State that provides 
medical assistance under a State Medicaid plan 
under title XIX of the Social Security Act, or child 
health assistance under a State child health plan 
under title XXI of such Act, in the form of premium 
assistance for the purchase of coverage under a 
group health plan, shall provide to each employee 
a written notice informing the employee of poten-
tial opportunities then currently available in the 
State in which the employee resides for premium 
assistance under such plans for health coverage 
of the employee or the employee’s dependents. For 
purposes of compliance with this subclause, the 
employer may use any State-specific model notice 
developed 
in 
accordance 
with 
section 
701(f)(3)(B)(i)(II) of the Employee Retirement 
Income 
Security 
Act 
of 
1974 
(29 
U.S.C. 
1181(f)(3)(B)(i)(II)). 
‘‘(II) OPTION
TO
PROVIDE
CONCURRENT
WITH 
PROVISION OF PLAN MATERIALS TO EMPLOYEE.—An 
employer may provide the model notice applicable 
to the State in which an employee resides concur-
rent with the furnishing of materials notifying the 
employee of health plan eligibility, concurrent with 
materials provided to the employee in connection 
with an open season or election process conducted 
under the plan, or concurrent with the furnishing 
of the summary plan description as provided in 
section 104(b) of the Employee Retirement Income 
Security Act of 1974. 
‘‘(ii) DISCLOSURE ABOUT GROUP HEALTH PLAN BENE-
FITS
TO
STATES
FOR
MEDICAID
AND
CHIP
ELIGIBLE 
INDIVIDUALS.—In the case of an enrollee in a group 
health plan who is covered under a Medicaid plan 
of a State under title XIX of the Social Security Act 
or under a State child health plan under title XXI 
of such Act, the plan administrator of the group health 
plan shall disclose to the State, upon request, informa-
tion about the benefits available under the group 
health plan in sufficient specificity, as determined 
under regulations of the Secretary of Health and 
Human Services in consultation with the Secretary 
that require use of the model coverage coordination 
disclosure form developed under section 311(b)(1)(C) 
of the Children’s Health Insurance Reauthorization Act 
of 2009, so as to permit the State to make a determina-
tion (under paragraph (2)(B), (3), or (10) of section 
2105(c) of the Social Security Act or otherwise) con-
cerning the cost-effectiveness of the State providing 
medical or child health assistance through premium 
assistance for the purchase of coverage under such 
group health plan and in order for the State to provide 
Notification. 
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123 STAT. 72 
PUBLIC LAW 111–3—FEB. 4, 2009 
supplemental benefits required under paragraph 
(10)(E) of such section or other authority.’’. 
TITLE IV—STRENGTHENING QUALITY 
OF CARE AND HEALTH OUTCOMES 
SEC. 401. CHILD HEALTH QUALITY IMPROVEMENT ACTIVITIES FOR 
CHILDREN ENROLLED IN MEDICAID OR CHIP. 
(a) DEVELOPMENT OF CHILD HEALTH QUALITY MEASURES FOR 
CHILDREN ENROLLED IN MEDICAID OR CHIP.—Title XI (42 U.S.C. 
1301 et seq.) is amended by inserting after section 1139 the fol-
lowing new section: 
‘‘SEC. 1139A. CHILD HEALTH QUALITY MEASURES. 
‘‘(a) DEVELOPMENT OF AN INITIAL CORE SET OF HEALTH CARE 
QUALITY MEASURES
FOR CHILDREN ENROLLED
IN MEDICAID
OR 
CHIP.— 
‘‘(1) IN GENERAL.—Not later than January 1, 2010, the 
Secretary shall identify and publish for general comment an 
initial, recommended core set of child health quality measures 
for use by State programs administered under titles XIX and 
XXI, health insurance issuers and managed care entities that 
enter into contracts with such programs, and providers of items 
and services under such programs. 
‘‘(2) IDENTIFICATION OF INITIAL CORE MEASURES.—In con-
sultation with the individuals and entities described in sub-
section (b)(3), the Secretary shall identify existing quality of 
care measures for children that are in use under public and 
privately sponsored health care coverage arrangements, or that 
are part of reporting systems that measure both the presence 
and duration of health insurance coverage over time. 
‘‘(3) RECOMMENDATIONS
AND
DISSEMINATION.—Based on 
such existing and identified measures, the Secretary shall pub-
lish an initial core set of child health quality measures that 
includes (but is not limited to) the following: 
‘‘(A) The duration of children’s health insurance cov-
erage over a 12-month time period. 
‘‘(B) The availability and effectiveness of a full range 
of— 
‘‘(i) preventive services, treatments, and services 
for acute conditions, including services to promote 
healthy birth, prevent and treat premature birth, and 
detect the presence or risk of physical or mental condi-
tions that could adversely affect growth and develop-
ment; and 
‘‘(ii) treatments to correct or ameliorate the effects 
of physical and mental conditions, including chronic 
conditions, in infants, young children, school-age chil-
dren, and adolescents. 
‘‘(C) The availability of care in a range of ambulatory 
and inpatient health care settings in which such care is 
furnished. 
‘‘(D) The types of measures that, taken together, can 
be used to estimate the overall national quality of health 
care for children, including children with special needs, 
and to perform comparative analyses of pediatric health 
Publication. 
Deadline. 
Publication. 
42 USC 
13206–9a. 
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123 STAT. 73 
PUBLIC LAW 111–3—FEB. 4, 2009 
care quality and racial, ethnic, and socioeconomic dispari-
ties in child health and health care for children. 
‘‘(4) 
ENCOURAGE
VOLUNTARY
AND
STANDARDIZED 
REPORTING.—Not later than 2 years after the date of enactment 
of the Children’s Health Insurance Program Reauthorization 
Act of 2009, the Secretary, in consultation with States, shall 
develop a standardized format for reporting information and 
procedures and approaches that encourage States to use the 
initial core measurement set to voluntarily report information 
regarding the quality of pediatric health care under titles XIX 
and XXI. 
‘‘(5) ADOPTION
OF
BEST
PRACTICES
IN
IMPLEMENTING 
QUALITY PROGRAMS.—The Secretary shall disseminate informa-
tion to States regarding best practices among States with 
respect to measuring and reporting on the quality of health 
care for children, and shall facilitate the adoption of such 
best practices. In developing best practices approaches, the 
Secretary shall give particular attention to State measurement 
techniques that ensure the timeliness and accuracy of provider 
reporting, encourage provider reporting compliance, encourage 
successful quality improvement strategies, and improve effi-
ciency in data collection using health information technology. 
‘‘(6) REPORTS TO CONGRESS.—Not later than January 1, 
2011, and every 3 years thereafter, the Secretary shall report 
to Congress on— 
‘‘(A) the status of the Secretary’s efforts to improve— 
‘‘(i) quality related to the duration and stability 
of health insurance coverage for children under titles 
XIX and XXI; 
‘‘(ii) the quality of children’s health care under 
such titles, including preventive health services, health 
care for acute conditions, chronic health care, and 
health services to ameliorate the effects of physical 
and mental conditions and to aid in growth and 
development of infants, young children, school-age chil-
dren, and adolescents with special health care needs; 
and 
‘‘(iii) the quality of children’s health care under 
such titles across the domains of quality, including 
clinical quality, health care safety, family experience 
with health care, health care in the most integrated 
setting, and elimination of racial, ethnic, and socio-
economic disparities in health and health care; 
‘‘(B) the status of voluntary reporting by States under 
titles XIX and XXI, utilizing the initial core quality 
measurement set; and 
‘‘(C) any recommendations for legislative changes 
needed to improve the quality of care provided to children 
under titles XIX and XXI, including recommendations for 
quality reporting by States. 
‘‘(7) TECHNICAL ASSISTANCE.—The Secretary shall provide 
technical assistance to States to assist them in adopting and 
utilizing core child health quality measures in administering 
the State plans under titles XIX and XXI. 
‘‘(8) DEFINITION OF CORE SET.—In this section, the term 
‘core set’ means a group of valid, reliable, and evidence-based 
quality measures that, taken together— 
Deadline. 
Procedures. 
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123 STAT. 74 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(A) provide information regarding the quality of health 
coverage and health care for children; 
‘‘(B) address the needs of children throughout the 
developmental age span; and 
‘‘(C) allow purchasers, families, and health care pro-
viders to understand the quality of care in relation to 
the preventive needs of children, treatments aimed at man-
aging and resolving acute conditions, and diagnostic and 
treatment services whose purpose is to correct or ameliorate 
physical, mental, or developmental conditions that could, 
if untreated or poorly treated, become chronic. 
‘‘(b) ADVANCING
AND IMPROVING PEDIATRIC QUALITY MEAS-
URES.— 
‘‘(1) ESTABLISHMENT OF PEDIATRIC QUALITY MEASURES PRO-
GRAM.—Not later than January 1, 2011, the Secretary shall 
establish a pediatric quality measures program to— 
‘‘(A) improve and strengthen the initial core child 
health care quality measures established by the Secretary 
under subsection (a); 
‘‘(B) expand on existing pediatric quality measures 
used by public and private health care purchasers and 
advance the development of such new and emerging quality 
measures; and 
‘‘(C) increase the portfolio of evidence-based, consensus 
pediatric quality measures available to public and private 
purchasers of children’s health care services, providers, 
and consumers. 
‘‘(2) EVIDENCE-BASED MEASURES.—The measures developed 
under the pediatric quality measures program shall, at a min-
imum, be— 
‘‘(A) evidence-based and, where appropriate, risk 
adjusted; 
‘‘(B) designed to identify and eliminate racial and 
ethnic disparities in child health and the provision of health 
care; 
‘‘(C) designed to ensure that the data required for 
such measures is collected and reported in a standard 
format that permits comparison of quality and data at 
a State, plan, and provider level; 
‘‘(D) periodically updated; and 
‘‘(E) responsive to the child health needs, services, 
and domains of health care quality described in clauses 
(i), (ii), and (iii) of subsection (a)(6)(A). 
‘‘(3) PROCESS FOR PEDIATRIC QUALITY MEASURES PROGRAM.— 
In identifying gaps in existing pediatric quality measures and 
establishing priorities for development and advancement of 
such measures, the Secretary shall consult with— 
‘‘(A) States; 
‘‘(B) pediatricians, children’s hospitals, and other pri-
mary and specialized pediatric health care professionals 
(including members of the allied health professions) who 
specialize in the care and treatment of children, particu-
larly children with special physical, mental, and develop-
mental health care needs; 
‘‘(C) dental professionals, including pediatric dental 
professionals; 
Deadline. 
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123 STAT. 75 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(D) health care providers that furnish primary health 
care to children and families who live in urban and rural 
medically underserved communities or who are members 
of distinct population sub-groups at heightened risk for 
poor health outcomes; 
‘‘(E) national organizations representing children, 
including children with disabilities and children with 
chronic conditions; 
‘‘(F) national organizations representing consumers and 
purchasers of children’s health care; 
‘‘(G) national organizations and individuals with exper-
tise in pediatric health quality measurement; and 
‘‘(H) voluntary consensus standards setting organiza-
tions and other organizations involved in the advancement 
of evidence-based measures of health care. 
‘‘(4) DEVELOPING, VALIDATING, AND TESTING A PORTFOLIO 
OF PEDIATRIC QUALITY MEASURES.—As part of the program to 
advance pediatric quality measures, the Secretary shall— 
‘‘(A) award grants and contracts for the development, 
testing, and validation of new, emerging, and innovative 
evidence-based measures for children’s health care services 
across the domains of quality described in clauses (i), (ii), 
and (iii) of subsection (a)(6)(A); and 
‘‘(B) award grants and contracts for— 
‘‘(i) the development of consensus on evidence- 
based measures for children’s health care services; 
‘‘(ii) the dissemination of such measures to public 
and private purchasers of health care for children; 
and 
‘‘(iii) the updating of such measures as necessary. 
‘‘(5) REVISING, STRENGTHENING, AND
IMPROVING
INITIAL 
CORE MEASURES.—Beginning no later than January 1, 2013, 
and annually thereafter, the Secretary shall publish rec-
ommended changes to the core measures described in subsection 
(a) that shall reflect the testing, validation, and consensus 
process for the development of pediatric quality measures 
described in subsection paragraphs (1) through (4). 
‘‘(6) DEFINITION OF PEDIATRIC QUALITY MEASURE.—In this 
subsection, the term ‘pediatric quality measure’ means a 
measurement of clinical care that is capable of being examined 
through the collection and analysis of relevant information, 
that is developed in order to assess 1 or more aspects of pedi-
atric health care quality in various institutional and ambulatory 
health care settings, including the structure of the clinical 
care system, the process of care, the outcome of care, or patient 
experiences in care. 
‘‘(7) CONSTRUCTION.—Nothing in this section shall be con-
strued as supporting the restriction of coverage, under title 
XIX or XXI or otherwise, to only those services that are evi-
dence-based. 
‘‘(c) ANNUAL
STATE
REPORTS
REGARDING
STATE-SPECIFIC 
QUALITY OF CARE MEASURES APPLIED UNDER MEDICAID OR CHIP.— 
‘‘(1) ANNUAL
STATE
REPORTS.—Each State with a State 
plan approved under title XIX or a State child health plan 
approved under title XXI shall annually report to the Secretary 
on the— 
Deadlines. 
Publication. 
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123 STAT. 76 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(A) State-specific child health quality measures 
applied by the States under such plans, including measures 
described in subparagraphs (A) and (B) of subsection (a)(6); 
and 
‘‘(B) State-specific information on the quality of health 
care furnished to children under such plans, including 
information collected through external quality reviews of 
managed care organizations under section 1932 of the 
Social Security Act (42 U.S.C. 1396u–4) and benchmark 
plans under sections 1937 and 2103 of such Act (42 U.S.C. 
1396u–7, 1397cc). 
‘‘(2) PUBLICATION.—Not later than September 30, 2010, 
and annually thereafter, the Secretary shall collect, analyze, 
and make publicly available the information reported by States 
under paragraph (1). 
‘‘(d) DEMONSTRATION PROJECTS FOR IMPROVING THE QUALITY 
OF CHILDREN’S HEALTH CARE AND THE USE OF HEALTH INFORMA-
TION TECHNOLOGY.— 
‘‘(1) IN GENERAL.—During the period of fiscal years 2009 
through 2013, the Secretary shall award not more than 10 
grants to States and child health providers to conduct dem-
onstration projects to evaluate promising ideas for improving 
the quality of children’s health care provided under title XIX 
or XXI, including projects to— 
‘‘(A) experiment with, and evaluate the use of, new 
measures of the quality of children’s health care under 
such titles (including testing the validity and suitability 
for reporting of such measures); 
‘‘(B) promote the use of health information technology 
in care delivery for children under such titles; 
‘‘(C) evaluate provider-based models which improve the 
delivery of children’s health care services under such titles, 
including care management for children with chronic condi-
tions and the use of evidence-based approaches to improve 
the effectiveness, safety, and efficiency of health care serv-
ices for children; or 
‘‘(D) demonstrate the impact of the model electronic 
health record format for children developed and dissemi-
nated under subsection (f) on improving pediatric health, 
including the effects of chronic childhood health conditions, 
and pediatric health care quality as well as reducing health 
care costs. 
‘‘(2) REQUIREMENTS.—In awarding grants under this sub-
section, the Secretary shall ensure that— 
‘‘(A) only 1 demonstration project funded under a grant 
awarded under this subsection shall be conducted in a 
State; and 
‘‘(B) demonstration projects funded under grants 
awarded under this subsection shall be conducted evenly 
between States with large urban areas and States with 
large rural areas. 
‘‘(3) AUTHORITY FOR MULTISTATE PROJECTS.—A demonstra-
tion project conducted with a grant awarded under this sub-
section may be conducted on a multistate basis, as needed. 
‘‘(4) FUNDING.—$20,000,000 of the amount appropriated 
under subsection (i) for a fiscal year shall be used to carry 
out this subsection. 
Time period. 
Grants. 
Deadlines. 
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123 STAT. 77 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(e) CHILDHOOD OBESITY DEMONSTRATION PROJECT.— 
‘‘(1) AUTHORITY TO CONDUCT DEMONSTRATION.—The Sec-
retary, in consultation with the Administrator of the Centers 
for Medicare & Medicaid Services, shall conduct a demonstra-
tion project to develop a comprehensive and systematic model 
for reducing childhood obesity by awarding grants to eligible 
entities to carry out such project. Such model shall— 
‘‘(A) identify, through self-assessment, behavioral risk 
factors for obesity among children; 
‘‘(B) identify, through self-assessment, needed clinical 
preventive and screening benefits among those children 
identified as target individuals on the basis of such risk 
factors; 
‘‘(C) provide ongoing support to such target individuals 
and their families to reduce risk factors and promote the 
appropriate use of preventive and screening benefits; and 
‘‘(D) be designed to improve health outcomes, satisfac-
tion, quality of life, and appropriate use of items and serv-
ices for which medical assistance is available under title 
XIX or child health assistance is available under title XXI 
among such target individuals. 
‘‘(2) ELIGIBILITY ENTITIES.—For purposes of this subsection, 
an eligible entity is any of the following: 
‘‘(A) A city, county, or Indian tribe. 
‘‘(B) A local or tribal educational agency. 
‘‘(C) An accredited university, college, or community 
college. 
‘‘(D) A Federally-qualified health center. 
‘‘(E) A local health department. 
‘‘(F) A health care provider. 
‘‘(G) A community-based organization. 
‘‘(H) Any other entity determined appropriate by the 
Secretary, including a consortia or partnership of entities 
described in any of subparagraphs (A) through (G). 
‘‘(3) USE OF FUNDS.—An eligible entity awarded a grant 
under this subsection shall use the funds made available under 
the grant to— 
‘‘(A) carry out community-based activities related to 
reducing childhood obesity, including by— 
‘‘(i) forming partnerships with entities, including 
schools and other facilities providing recreational serv-
ices, to establish programs for after school and weekend 
community activities that are designed to reduce child-
hood obesity; 
‘‘(ii) forming partnerships with daycare facilities 
to establish programs that promote healthy eating 
behaviors and physical activity; and 
‘‘(iii) developing and evaluating community edu-
cational activities targeting good nutrition and pro-
moting healthy eating behaviors; 
‘‘(B) carry out age-appropriate school-based activities 
that are designed to reduce childhood obesity, including 
by— 
‘‘(i) developing and testing educational curricula 
and intervention programs designed to promote healthy 
eating behaviors and habits in youth, which may 
include— 
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123 STAT. 78 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(I) after hours physical activity programs; and 
‘‘(II) science-based interventions with multiple 
components to prevent eating disorders including 
nutritional content, understanding and responding 
to hunger and satiety, positive body image develop-
ment, 
positive 
self-esteem 
development, 
and 
learning life skills (such as stress management, 
communication skills, problemsolving and decision-
making skills), as well as consideration of cultural 
and developmental issues, and the role of family, 
school, and community; 
‘‘(ii) providing education and training to edu-
cational professionals regarding how to promote a 
healthy lifestyle and a healthy school environment for 
children; 
‘‘(iii) planning and implementing a healthy lifestyle 
curriculum or program with an emphasis on healthy 
eating behaviors and physical activity; and 
‘‘(iv) planning and implementing healthy lifestyle 
classes or programs for parents or guardians, with 
an emphasis on healthy eating behaviors and physical 
activity for children; 
‘‘(C) carry out educational, counseling, promotional, 
and training activities through the local health care 
delivery systems including by— 
‘‘(i) promoting healthy eating behaviors and phys-
ical activity services to treat or prevent eating dis-
orders, being overweight, and obesity; 
‘‘(ii) providing patient education and counseling 
to increase physical activity and promote healthy 
eating behaviors; 
‘‘(iii) training health professionals on how to iden-
tify and treat obese and overweight individuals which 
may include nutrition and physical activity counseling; 
and 
‘‘(iv) providing community education by a health 
professional on good nutrition and physical activity 
to develop a better understanding of the relationship 
between diet, physical activity, and eating disorders, 
obesity, or being overweight; and 
‘‘(D) provide, through qualified health professionals, 
training and supervision for community health workers 
to— 
‘‘(i) educate families regarding the relationship 
between nutrition, eating habits, physical activity, and 
obesity; 
‘‘(ii) educate families about effective strategies to 
improve nutrition, establish healthy eating patterns, 
and establish appropriate levels of physical activity; 
and 
‘‘(iii) educate and guide parents regarding the 
ability to model and communicate positive health 
behaviors. 
‘‘(4) PRIORITY.—In awarding grants under paragraph (1), 
the Secretary shall give priority to awarding grants to eligible 
entities— 
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123 STAT. 79 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(A) that demonstrate that they have previously 
applied successfully for funds to carry out activities that 
seek to promote individual and community health and to 
prevent the incidence of chronic disease and that can cite 
published and peer-reviewed research demonstrating that 
the activities that the entities propose to carry out with 
funds made available under the grant are effective; 
‘‘(B) that will carry out programs or activities that 
seek to accomplish a goal or goals set by the State in 
the Healthy People 2010 plan of the State; 
‘‘(C) that provide non-Federal contributions, either in 
cash or in-kind, to the costs of funding activities under 
the grants; 
‘‘(D) that develop comprehensive plans that include 
a strategy for extending program activities developed under 
grants in the years following the fiscal years for which 
they receive grants under this subsection; 
‘‘(E) located in communities that are medically under-
served, as determined by the Secretary; 
‘‘(F) located in areas in which the average poverty 
rate is at least 150 percent or higher of the average poverty 
rate in the State involved, as determined by the Secretary; 
and 
‘‘(G) that submit plans that exhibit multisectoral, 
cooperative conduct that includes the involvement of a 
broad range of stakeholders, including— 
‘‘(i) community-based organizations; 
‘‘(ii) local governments; 
‘‘(iii) local educational agencies; 
‘‘(iv) the private sector; 
‘‘(v) State or local departments of health; 
‘‘(vi) accredited colleges, universities, and commu-
nity colleges; 
‘‘(vii) health care providers; 
‘‘(viii) State and local departments of transpor-
tation and city planning; and 
‘‘(ix) other entities determined appropriate by the 
Secretary. 
‘‘(5) PROGRAM DESIGN.— 
‘‘(A) INITIAL DESIGN.—Not later than 1 year after the 
date of enactment of the Children’s Health Insurance Pro-
gram Reauthorization Act of 2009, the Secretary shall 
design the demonstration project. The demonstration 
should draw upon promising, innovative models and incen-
tives to reduce behavioral risk factors. The Administrator 
of the Centers for Medicare & Medicaid Services shall 
consult with the Director of the Centers for Disease Control 
and Prevention, the Director of the Office of Minority 
Health, the heads of other agencies in the Department 
of Health and Human Services, and such professional 
organizations, as the Secretary determines to be appro-
priate, on the design, conduct, and evaluation of the dem-
onstration. 
‘‘(B) NUMBER AND PROJECT AREAS.—Not later than 2 
years after the date of enactment of the Children’s Health 
Insurance Program Reauthorization Act of 2009, the Sec-
retary shall award 1 grant that is specifically designed 
Grants. 
Deadlines. 
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123 STAT. 80 
PUBLIC LAW 111–3—FEB. 4, 2009 
to determine whether programs similar to programs to 
be conducted by other grantees under this subsection 
should be implemented with respect to the general popu-
lation of children who are eligible for child health assist-
ance under State child health plans under title XXI in 
order to reduce the incidence of childhood obesity among 
such population. 
‘‘(6) REPORT TO CONGRESS.—Not later than 3 years after 
the date the Secretary implements the demonstration project 
under this subsection, the Secretary shall submit to Congress 
a report that describes the project, evaluates the effectiveness 
and cost effectiveness of the project, evaluates the beneficiary 
satisfaction under the project, and includes any such other 
information as the Secretary determines to be appropriate. 
‘‘(7) DEFINITIONS.—In this subsection: 
‘‘(A) FEDERALLY-QUALIFIED HEALTH CENTER.—The term 
‘Federally-qualified health center’ has the meaning given 
that term in section 1905(l)(2)(B). 
‘‘(B) INDIAN TRIBE.—The term ‘Indian tribe’ has the 
meaning given that term in section 4 of the Indian Health 
Care Improvement Act (25 U.S.C. 1603). 
‘‘(C) SELF-ASSESSMENT.—The term ‘self-assessment’ 
means a form that— 
‘‘(i) includes questions regarding— 
‘‘(I) behavioral risk factors; 
‘‘(II) needed preventive and screening services; 
and 
‘‘(III) 
target 
individuals’ 
preferences 
for 
receiving follow-up information; 
‘‘(ii) is assessed using such computer generated 
assessment programs; and 
‘‘(iii) allows for the provision of such ongoing sup-
port to the individual as the Secretary determines 
appropriate. 
‘‘(D) ONGOING SUPPORT.—The term ‘ongoing support’ 
means— 
‘‘(i) to provide any target individual with informa-
tion, feedback, health coaching, and recommendations 
regarding— 
‘‘(I) the results of a self-assessment given to 
the individual; 
‘‘(II) behavior modification based on the self- 
assessment; and 
‘‘(III) any need for clinical preventive and 
screening services or treatment including medical 
nutrition therapy; 
‘‘(ii) to provide any target individual with referrals 
to community resources and programs available to 
assist the target individual in reducing health risks; 
and 
‘‘(iii) to provide the information described in clause 
(i) to a health care provider, if designated by the target 
individual to receive such information. 
‘‘(8) AUTHORIZATION OF APPROPRIATIONS.—There is author-
ized to be appropriated to carry out this subsection, $25,000,000 
for the period of fiscal years 2009 through 2013. 
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123 STAT. 81 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(f) DEVELOPMENT
OF MODEL ELECTRONIC HEALTH RECORD 
FORMAT FOR CHILDREN ENROLLED IN MEDICAID OR CHIP.— 
‘‘(1) IN GENERAL.—Not later than January 1, 2010, the 
Secretary shall establish a program to encourage the develop-
ment and dissemination of a model electronic health record 
format for children enrolled in the State plan under title XIX 
or the State child health plan under title XXI that is— 
‘‘(A) subject to State laws, accessible to parents, care-
givers, and other consumers for the sole purpose of dem-
onstrating compliance with school or leisure activity 
requirements, such as appropriate immunizations or 
physicals; 
‘‘(B) designed to allow interoperable exchanges that 
conform with Federal and State privacy and security 
requirements; 
‘‘(C) structured in a manner that permits parents and 
caregivers to view and understand the extent to which 
the care their children receive is clinically appropriate and 
of high quality; and 
‘‘(D) capable of being incorporated into, and otherwise 
compatible with, other standards developed for electronic 
health records. 
‘‘(2) FUNDING.—$5,000,000 of the amount appropriated 
under subsection (i) for a fiscal year shall be used to carry 
out this subsection. 
‘‘(g) STUDY OF PEDIATRIC HEALTH AND HEALTH CARE QUALITY 
MEASURES.— 
‘‘(1) IN GENERAL.—Not later than July 1, 2010, the Institute 
of Medicine shall study and report to Congress on the extent 
and quality of efforts to measure child health status and the 
quality of health care for children across the age span and 
in relation to preventive care, treatments for acute conditions, 
and treatments aimed at ameliorating or correcting physical, 
mental, and developmental conditions in children. In conducting 
such study and preparing such report, the Institute of Medicine 
shall— 
‘‘(A) consider all of the major national population-based 
reporting systems sponsored by the Federal Government 
that are currently in place, including reporting require-
ments under Federal grant programs and national popu-
lation surveys and estimates conducted directly by the 
Federal Government; 
‘‘(B) identify the information regarding child health 
and health care quality that each system is designed to 
capture and generate, the study and reporting periods cov-
ered by each system, and the extent to which the informa-
tion so generated is made widely available through publica-
tion; 
‘‘(C) identify gaps in knowledge related to children’s 
health status, health disparities among subgroups of chil-
dren, the effects of social conditions on children’s health 
status and use and effectiveness of health care, and the 
relationship between child health status and family income, 
family stability and preservation, and children’s school 
readiness and educational achievement and attainment; 
and 
Deadline. 
Reports. 
Deadline. 
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123 STAT. 82 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(D) make recommendations regarding improving and 
strengthening the timeliness, quality, and public trans-
parency and accessibility of information about child health 
and health care quality. 
‘‘(2) FUNDING.—Up to $1,000,000 of the amount appro-
priated under subsection (i) for a fiscal year shall be used 
to carry out this subsection. 
‘‘(h) RULE
OF
CONSTRUCTION.—Notwithstanding any other 
provision in this section, no evidence based quality measure devel-
oped, published, or used as a basis of measurement or reporting 
under this section may be used to establish an irrebuttable 
presumption regarding either the medical necessity of care or the 
maximum permissible coverage for any individual child who is 
eligible for and receiving medical assistance under title XIX or 
child health assistance under title XXI. 
‘‘(i) APPROPRIATION.—Out of any funds in the Treasury not 
otherwise appropriated, there is appropriated for each of fiscal 
years 2009 through 2013, $45,000,000 for the purpose of carrying 
out this section (other than subsection (e)). Funds appropriated 
under this subsection shall remain available until expended.’’. 
(b) 
INCREASED
MATCHING
RATE
FOR
COLLECTING
AND 
REPORTING ON CHILD HEALTH MEASURES.—Section 1903(a)(3)(A) 
(42 U.S.C. 1396b(a)(3)(A)), is amended— 
(1) by striking ‘‘and’’ at the end of clause (i); and 
(2) by adding at the end the following new clause: 
‘‘(iii) an amount equal to the Federal medical assistance 
percentage (as defined in section 1905(b)) of so much of 
the sums expended during such quarter (as found necessary 
by the Secretary for the proper and efficient administration 
of the State plan) as are attributable to such developments 
or modifications of systems of the type described in clause 
(i) as are necessary for the efficient collection and reporting 
on child health measures; and’’. 
SEC. 
402. 
IMPROVED 
AVAILABILITY 
OF 
PUBLIC 
INFORMATION 
REGARDING ENROLLMENT OF CHILDREN IN CHIP AND 
MEDICAID. 
(a) INCLUSION OF PROCESS AND ACCESS MEASURES IN ANNUAL 
STATE REPORTS.—Section 2108 (42 U.S.C. 1397hh) is amended— 
(1) in subsection (a), in the matter preceding paragraph 
(1), by striking ‘‘The State’’ and inserting ‘‘Subject to subsection 
(e), the State’’; and 
(2) by adding at the end the following new subsection: 
‘‘(e) INFORMATION REQUIRED FOR INCLUSION IN STATE ANNUAL 
REPORT.—The State shall include the following information in the 
annual report required under subsection (a): 
‘‘(1) Eligibility criteria, enrollment, and retention data 
(including data with respect to continuity of coverage or dura-
tion of benefits). 
‘‘(2) Data regarding the extent to which the State uses 
process measures with respect to determining the eligibility 
of children under the State child health plan, including meas-
ures such as 12-month continuous eligibility, self-declaration 
of income for applications or renewals, or presumptive eligi-
bility. 
‘‘(3) Data regarding denials of eligibility and redetermina-
tions of eligibility. 
Recommenda- 
tions. 
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123 STAT. 83 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(4) Data regarding access to primary and specialty serv-
ices, access to networks of care, and care coordination provided 
under the State child health plan, using quality care and con-
sumer satisfaction measures included in the Consumer Assess-
ment of Healthcare Providers and Systems (CAHPS) survey. 
‘‘(5) If the State provides child health assistance in the 
form of premium assistance for the purchase of coverage under 
a group health plan, data regarding the provision of such assist-
ance, including the extent to which employer-sponsored health 
insurance coverage is available for children eligible for child 
health assistance under the State child health plan, the range 
of the monthly amount of such assistance provided on behalf 
of a child or family, the number of children or families provided 
such assistance on a monthly basis, the income of the children 
or families provided such assistance, the benefits and cost- 
sharing protection provided under the State child health plan 
to supplement the coverage purchased with such premium 
assistance, the effective strategies the State engages in to 
reduce any administrative barriers to the provision of such 
assistance, and, the effects, if any, of the provision of such 
assistance on preventing the coverage provided under the State 
child health plan from substituting for coverage provided under 
employer-sponsored health insurance offered in the State. 
‘‘(6) To the extent applicable, a description of any State 
activities that are designed to reduce the number of uncovered 
children in the State, including through a State health insur-
ance connector program or support for innovative private health 
coverage initiatives.’’. 
(b) STANDARDIZED REPORTING FORMAT.— 
(1) IN
GENERAL.—Not later than 1 year after the date 
of enactment of this Act, the Secretary shall specify a standard-
ized format for States to use for reporting the information 
required under section 2108(e) of the Social Security Act, as 
added by subsection (a)(2). 
(2) TRANSITION PERIOD FOR STATES.—Each State that is 
required to submit a report under subsection (a) of section 
2108 of the Social Security Act that includes the information 
required under subsection (e) of such section may use up to 
3 reporting periods to transition to the reporting of such 
information in accordance with the standardized format speci-
fied by the Secretary under paragraph (1). 
(c) ADDITIONAL FUNDING FOR THE SECRETARY TO IMPROVE TIME-
LINESS OF DATA REPORTING AND ANALYSIS FOR PURPOSES OF DETER-
MINING ENROLLMENT INCREASES UNDER MEDICAID
AND CHIP.— 
(1) APPROPRIATION.—There is appropriated, out of any 
money in the Treasury not otherwise appropriated, $5,000,000 
to the Secretary for fiscal year 2009 for the purpose of 
improving the timeliness of the data reported and analyzed 
from the Medicaid Statistical Information System (MSIS) for 
purposes of providing more timely data on enrollment and 
eligibility of children under Medicaid and CHIP and to provide 
guidance to States with respect to any new reporting require-
ments related to such improvements. Amounts appropriated 
under this paragraph shall remain available until expended. 
(2) REQUIREMENTS.—The improvements made by the Sec-
retary under paragraph (1) shall be designed and implemented 
(including with respect to any necessary guidance for States 
42 USC 1397hh 
note. 
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123 STAT. 84 
PUBLIC LAW 111–3—FEB. 4, 2009 
to report such information in a complete and expeditious 
manner) so that, beginning no later than October 1, 2009, 
data regarding the enrollment of low-income children (as 
defined in section 2110(c)(4) of the Social Security Act (42 
U.S.C. 1397jj(c)(4)) of a State enrolled in the State plan under 
Medicaid or the State child health plan under CHIP with 
respect to a fiscal year shall be collected and analyzed by 
the Secretary within 6 months of submission. 
(d) GAO STUDY AND REPORT ON ACCESS TO PRIMARY AND SPE-
CIALITY SERVICES.— 
(1) IN GENERAL.—The Comptroller General of the United 
States shall conduct a study of children’s access to primary 
and specialty services under Medicaid and CHIP, including— 
(A) the extent to which providers are willing to treat 
children eligible for such programs; 
(B) information on such children’s access to networks 
of care; 
(C) geographic availability of primary and specialty 
services under such programs; 
(D) the extent to which care coordination is provided 
for children’s care under Medicaid and CHIP; and 
(E) as appropriate, information on the degree of avail-
ability of services for children under such programs. 
(2) REPORT.—Not later than 2 years after the date of enact-
ment of this Act, the Comptroller General shall submit a report 
to the Committee on Finance of the Senate and the Committee 
on Energy and Commerce of the House of Representatives 
on the study conducted under paragraph (1) that includes rec-
ommendations for such Federal and State legislative and 
administrative changes as the Comptroller General determines 
are necessary to address any barriers to access to children’s 
care under Medicaid and CHIP that may exist. 
SEC. 403. APPLICATION OF CERTAIN MANAGED CARE QUALITY SAFE-
GUARDS TO CHIP. 
(a) IN GENERAL.—Section 2103(f) of Social Security Act (42 
U.S.C. 1397bb(f)) is amended by adding at the end the following 
new paragraph: 
‘‘(3) COMPLIANCE WITH MANAGED CARE REQUIREMENTS.— 
The State child health plan shall provide for the application 
of subsections (a)(4), (a)(5), (b), (c), (d), and (e) of section 1932 
(relating to requirements for managed care) to coverage, State 
agencies, enrollment brokers, managed care entities, and man-
aged care organizations under this title in the same manner 
as such subsections apply to coverage and such entities and 
organizations under title XIX.’’. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to contract years for health plans beginning on or 
after July 1, 2009. 
TITLE V—IMPROVING ACCESS TO 
BENEFITS 
SEC. 501. DENTAL BENEFITS. 
(a) COVERAGE.— 
42 USC 1397cc 
note. 
42 USC 1397cc. 
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123 STAT. 85 
PUBLIC LAW 111–3—FEB. 4, 2009 
(1) IN
GENERAL.—Section 2103 (42 U.S.C. 1397cc) is 
amended— 
(A) in subsection (a)— 
(i) in the matter before paragraph (1), by striking 
‘‘subsection (c)(5)’’ and inserting ‘‘paragraphs (5) and 
(7) of subsection (c)’’; and 
(ii) in paragraph (1), by inserting ‘‘at least’’ after 
‘‘that is’’; and 
(B) in subsection (c)— 
(i) by redesignating paragraph (5) as paragraph 
(7); and 
(ii) by inserting after paragraph (4), the following: 
‘‘(5) DENTAL BENEFITS.— 
‘‘(A) IN GENERAL.—The child health assistance provided 
to a targeted low-income child shall include coverage of 
dental services necessary to prevent disease and promote 
oral health, restore oral structures to health and function, 
and treat emergency conditions. 
‘‘(B) PERMITTING USE OF DENTAL BENCHMARK PLANS 
BY CERTAIN STATES.—A State may elect to meet the require-
ment of subparagraph (A) through dental coverage that 
is equivalent to a benchmark dental benefit package 
described in subparagraph (C). 
‘‘(C) BENCHMARK
DENTAL
BENEFIT
PACKAGES.—The 
benchmark dental benefit packages are as follows: 
‘‘(i) FEHBP CHILDREN’S
DENTAL
COVERAGE.—A 
dental benefits plan under chapter 89A of title 5, 
United States Code, that has been selected most fre-
quently by employees seeking dependent coverage, 
among such plans that provide such dependent cov-
erage, in either of the previous 2 plan years. 
‘‘(ii) STATE
EMPLOYEE
DEPENDENT
DENTAL
COV-
ERAGE.—A dental benefits plan that is offered and 
generally available to State employees in the State 
involved and that has been selected most frequently 
by employees seeking dependent coverage, among such 
plans that provide such dependent coverage, in either 
of the previous 2 plan years. 
‘‘(iii) COVERAGE
OFFERED
THROUGH
COMMERCIAL 
DENTAL PLAN.—A dental benefits plan that has the 
largest insured commercial, non-medicaid enrollment 
of dependent covered lives of such plans that is offered 
in the State involved.’’. 
(2) ASSURING ACCESS TO CARE.—Section 2102(a)(7)(B) (42 
U.S.C. 1397bb(c)(2)) is amended by inserting ‘‘and services 
described in section 2103(c)(5)’’ after ‘‘emergency services’’. 
(3) EFFECTIVE
DATE.—The amendments made by para-
graphs (1) and (2) shall apply to coverage of items and services 
furnished on or after October 1, 2009. 
(b) STATE OPTION TO PROVIDE DENTAL-ONLY SUPPLEMENTAL 
COVERAGE.— 
(1) IN GENERAL.—Section 2110(b) (42 U.S.C. 1397jj(b)) is 
amended— 
(A) in paragraph (1)(C), by inserting ‘‘, subject to para-
graph (5),’’ after ‘‘under title XIX or’’; and 
(B) by adding at the end the following new paragraph: 
42 USC 1397bb 
note. 
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123 STAT. 86 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(5) OPTION FOR STATES WITH A SEPARATE CHIP PROGRAM 
TO PROVIDE DENTAL-ONLY SUPPLEMENTAL COVERAGE.— 
‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and 
(C), in the case of any child who is enrolled in a group 
health plan or health insurance coverage offered through 
an employer who would, but for the application of para-
graph (1)(C), satisfy the requirements for being a targeted 
low-income child under a State child health plan that is 
implemented under this title, a State may waive the 
application of such paragraph to the child in order to 
provide— 
‘‘(i) dental coverage consistent with the require-
ments of subsection (c)(5) of section 2103; or 
‘‘(ii) cost-sharing protection for dental coverage 
consistent with such requirements and the require-
ments of subsection (e)(3)(B) of such section. 
‘‘(B) LIMITATION.—A State may limit the application 
of a waiver of paragraph (1)(C) to children whose family 
income does not exceed a level specified by the State, 
so long as the level so specified does not exceed the max-
imum income level otherwise established for other children 
under the State child health plan. 
‘‘(C) CONDITIONS.—A State may not offer dental-only 
supplemental coverage under this paragraph unless the 
State satisfies the following conditions: 
‘‘(i) INCOME ELIGIBILITY.—The State child health 
plan under this title— 
‘‘(I) has the highest income eligibility standard 
permitted under this title (or a waiver) as of 
January 1, 2009; 
‘‘(II) does not limit the acceptance of applica-
tions for children or impose any numerical limita-
tion, waiting list, or similar limitation on the eligi-
bility of such children for child health assistance 
under such State plan; and 
‘‘(III) provides benefits to all children in the 
State who apply for and meet eligibility standards. 
‘‘(ii) NO MORE FAVORABLE TREATMENT.—The State 
child health plan may not provide more favorable 
dental coverage or cost-sharing protection for dental 
coverage to children provided dental-only supplemental 
coverage under this paragraph than the dental cov-
erage and cost-sharing protection for dental coverage 
provided to targeted low-income children who are 
eligible for the full range of child health assistance 
provided under the State child health plan.’’. 
(2) STATE
OPTION
TO
WAIVE
WAITING
PERIOD.—Section 
2102(b)(1)(B) (42 U.S.C. 1397bb(b)(1)(B)), as amended by section 
111(b)(2), is amended— 
(A) in clause (ii), by striking ‘‘and’’ at the end; 
(B) in clause (iii), by striking the period and inserting 
‘‘; and’’; and 
(C) by adding at the end the following new clause: 
‘‘(iv) at State option, may not apply a waiting 
period in the case of a child provided dental-only 
supplemental coverage under section 2110(b)(5).’’. 
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123 STAT. 87 
PUBLIC LAW 111–3—FEB. 4, 2009 
(c) DENTAL EDUCATION FOR PARENTS OF NEWBORNS.—The Sec-
retary shall develop and implement, through entities that fund 
or provide perinatal care services to targeted low-income children 
under a State child health plan under title XXI of the Social 
Security Act, a program to deliver oral health educational materials 
that inform new parents about risks for, and prevention of, early 
childhood caries and the need for a dental visit within their 
newborn’s first year of life. 
(d) PROVISION OF DENTAL SERVICES THROUGH FQHCS.— 
(1) MEDICAID.—Section 1902(a) (42 U.S.C. 1396a(a)) is 
amended— 
(A) by striking ‘‘and’’ at the end of paragraph (70); 
(B) by striking the period at the end of paragraph 
(71) and inserting ‘‘; and’’; and 
(C) by inserting after paragraph (71) the following 
new paragraph: 
‘‘(72) provide that the State will not prevent a Federally- 
qualified health center from entering into contractual relation-
ships with private practice dental providers in the provision 
of Federally-qualified health center services.’’. 
(2) CHIP.—Section 2107(e)(1) (42 U.S.C. 1397g(e)(1)), as 
amended by subsections (a)(2) and (d)(2) of section 203, is 
amended by inserting after subparagraph (B) the following 
new subparagraph (and redesignating the succeeding subpara-
graphs accordingly): 
‘‘(C) Section 1902(a)(72) (relating to limiting FQHC 
contracting for provision of dental services).’’. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall take effect on January 1, 2009. 
(e) REPORTING INFORMATION ON DENTAL HEALTH.— 
(1) 
MEDICAID.—Section 
1902(a)(43)(D)(iii) 
(42 
U.S.C. 
1396a(a)(43)(D)(iii)) is amended by inserting ‘‘and other 
information relating to the provision of dental services to such 
children described in section 2108(e)’’ after ‘‘receiving dental 
services,’’. 
(2) CHIP.—Section 2108 (42 U.S.C. 1397hh) is amended 
by adding at the end the following new subsection: 
‘‘(e) INFORMATION ON DENTAL CARE FOR CHILDREN.— 
‘‘(1) IN GENERAL.—Each annual report under subsection 
(a) shall include the following information with respect to care 
and services described in section 1905(r)(3) provided to targeted 
low-income children enrolled in the State child health plan 
under this title at any time during the year involved: 
‘‘(A) The number of enrolled children by age grouping 
used for reporting purposes under section 1902(a)(43). 
‘‘(B) For children within each such age grouping, 
information of the type contained in questions 12(a)–(c) 
of CMS Form 416 (that consists of the number of enrolled 
targeted low income children who receive any, preventive, 
or restorative dental care under the State plan). 
‘‘(C) For the age grouping that includes children 8 
years of age, the number of such children who have received 
a protective sealant on at least one permanent molar tooth. 
‘‘(2) INCLUSION OF INFORMATION ON ENROLLEES IN MANAGED 
CARE
PLANS.—The information under paragraph (1) shall 
include information on children who are enrolled in managed 
care plans and other private health plans and contracts with 
42 USC 1396a 
note. 
42 USC 1397gg 
note. 
42 USC 247d–9. 
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123 STAT. 88 
PUBLIC LAW 111–3—FEB. 4, 2009 
such plans under this title shall provide for the reporting 
of such information by such plans to the State.’’. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall be effective for annual reports submitted for years 
beginning after date of enactment. 
(f) IMPROVED ACCESSIBILITY OF DENTAL PROVIDER INFORMATION 
TO ENROLLEES UNDER MEDICAID AND CHIP.—The Secretary shall— 
(1) work with States, pediatric dentists, and other dental 
providers (including providers that are, or are affiliated with, 
a school of dentistry) to include, not later than 6 months after 
the date of the enactment of this Act, on the Insure Kids 
Now website (http://www.insurekidsnow.gov/) and hotline (1– 
877–KIDS–NOW) (or on any successor websites or hotlines) 
a current and accurate list of all such dentists and providers 
within each State that provide dental services to children 
enrolled in the State plan (or waiver) under Medicaid or the 
State child health plan (or waiver) under CHIP, and shall 
ensure that such list is updated at least quarterly; and 
(2) work with States to include, not later than 6 months 
after the date of the enactment of this Act, a description of 
the dental services provided under each State plan (or waiver) 
under Medicaid and each State child health plan (or waiver) 
under CHIP on such Insure Kids Now website, and shall ensure 
that such list is updated at least annually. 
(g) INCLUSION OF STATUS OF EFFORTS TO IMPROVE DENTAL 
CARE IN REPORTS ON THE QUALITY OF CHILDREN’S HEALTH CARE 
UNDER MEDICAID AND CHIP.—Section 1139A(a), as added by section 
401(a), is amended— 
(1) in paragraph (3)(B)(ii), by inserting ‘‘and, with respect 
to dental care, conditions requiring the restoration of teeth, 
relief of pain and infection, and maintenance of dental health’’ 
after ‘‘chronic conditions’’; and 
(2) in paragraph (6)(A)(ii), by inserting ‘‘dental care,’’ after 
‘‘preventive health services,’’. 
(h) GAO STUDY AND REPORT.— 
(1) STUDY.—The Comptroller General of the United States 
shall provide for a study that examines— 
(A) access to dental services by children in underserved 
areas; 
(B) children’s access to oral health care, including 
preventive and restorative services, under Medicaid and 
CHIP, including— 
(i) the extent to which dental providers are willing 
to treat children eligible for such programs; 
(ii) information on such children’s access to net-
works of care, including such networks that serve spe-
cial needs children; and 
(iii) geographic availability of oral health care, 
including preventive and restorative services, under 
such programs; and 
(C) the feasibility and appropriateness of using quali-
fied mid-level dental health providers, in coordination with 
dentists, to improve access for children to oral health serv-
ices and public health overall. 
(2) REPORT.—Not later than 18 months year after the date 
of the enactment of this Act, the Comptroller General shall 
submit to Congress a report on the study conducted under 
Deadlines. 
42 USC 1396 
note. 
42 USC 1396a 
note. 
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123 STAT. 89 
PUBLIC LAW 111–3—FEB. 4, 2009 
paragraph (1). The report shall include recommendations for 
such Federal and State legislative and administrative changes 
as the Comptroller General determines are necessary to address 
any barriers to access to oral health care, including preventive 
and restorative services, under Medicaid and CHIP that may 
exist. 
SEC. 502. MENTAL HEALTH PARITY IN CHIP PLANS. 
(a) ASSURANCE
OF
PARITY.—Section 2103(c) (42 U.S.C. 
1397cc(c)), as amended by section 501(a)(1)(B), is amended by 
inserting after paragraph (5), the following: 
‘‘(6) MENTAL HEALTH SERVICES PARITY.— 
‘‘(A) IN GENERAL.—In the case of a State child health 
plan that provides both medical and surgical benefits and 
mental health or substance use disorder benefits, such 
plan shall ensure that the financial requirements and treat-
ment limitations applicable to such mental health or sub-
stance use disorder benefits comply with the requirements 
of section 2705(a) of the Public Health Service Act in the 
same manner as such requirements apply to a group health 
plan. 
‘‘(B) DEEMED COMPLIANCE.—To the extent that a State 
child health plan includes coverage with respect to an 
individual described in section 1905(a)(4)(B) and covered 
under the State plan under section 1902(a)(10)(A) of the 
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 
section 1902(a)(43), such plan shall be deemed to satisfy 
the requirements of subparagraph (A).’’. 
(b) CONFORMING
AMENDMENTS.—Section 2103 (42 U.S.C. 
1397cc) is amended— 
(1) in subsection (a), as amended by section 501(a)(1)(A)(i), 
in the matter preceding paragraph (1), by inserting ‘‘, (6),’’ 
after ‘‘(5)’’; and 
(2) in subsection (c)(2), by striking subparagraph (B) and 
redesignating subparagraphs (C) and (D) as subparagraphs (B) 
and (C), respectively. 
SEC. 503. APPLICATION OF PROSPECTIVE PAYMENT SYSTEM FOR 
SERVICES PROVIDED BY FEDERALLY-QUALIFIED HEALTH 
CENTERS AND RURAL HEALTH CLINICS. 
(a) APPLICATION OF PROSPECTIVE PAYMENT SYSTEM.— 
(1) 
IN
GENERAL.—Section 
2107(e)(1) 
(42 
U.S.C. 
1397gg(e)(1)), as amended by section 501(c)(2) is amended by 
inserting after subparagraph (C) the following new subpara-
graph (and redesignating the succeeding subparagraphs accord-
ingly): 
‘‘(D) Section 1902(bb) (relating to payment for services 
provided by Federally-qualified health centers and rural 
health clinics).’’. 
(2) EFFECTIVE DATE.—The amendment made by paragraph 
(1) shall apply to services provided on or after October 1, 
2009. 
(b) TRANSITION GRANTS.— 
(1) APPROPRIATION.—Out of any funds in the Treasury 
not otherwise appropriated, there is appropriated to the Sec-
retary for fiscal year 2009, $5,000,000, to remain available 
42 USC 1397gg 
note. 
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123 STAT. 90 
PUBLIC LAW 111–3—FEB. 4, 2009 
until expended, for the purpose of awarding grants to States 
with State child health plans under CHIP that are operated 
separately from the State Medicaid plan under title XIX of 
the Social Security Act (including any waiver of such plan), 
or in combination with the State Medicaid plan, for expendi-
tures related to transitioning to compliance with the require-
ment of section 2107(e)(1)(D) of the Social Security Act (as 
added by subsection (a)) to apply the prospective payment 
system established under section 1902(bb) of the such Act (42 
U.S.C. 1396a(bb)) to services provided by Federally-qualified 
health centers and rural health clinics. 
(2) MONITORING AND REPORT.—The Secretary shall monitor 
the impact of the application of such prospective payment 
system on the States described in paragraph (1) and, not later 
than October 1, 2011, shall report to Congress on any effect 
on access to benefits, provider payment rates, or scope of bene-
fits offered by such States as a result of the application of 
such payment system. 
SEC. 504. PREMIUM GRACE PERIOD. 
(a) IN GENERAL.—Section 2103(e)(3) (42 U.S.C. 1397cc(e)(3)) 
is amended by adding at the end the following new subparagraph: 
‘‘(C) PREMIUM GRACE PERIOD.—The State child health 
plan— 
‘‘(i) shall afford individuals enrolled under the plan 
a grace period of at least 30 days from the beginning 
of a new coverage period to make premium payments 
before the individual’s coverage under the plan may 
be terminated; and 
‘‘(ii) shall provide to such an individual, not later 
than 7 days after the first day of such grace period, 
notice— 
‘‘(I) that failure to make a premium payment 
within the grace period will result in termination 
of coverage under the State child health plan; and 
‘‘(II) of the individual’s right to challenge the 
proposed termination pursuant to the applicable 
Federal regulations. 
For purposes of clause (i), the term ‘new coverage period’ 
means the month immediately following the last month 
for which the premium has been paid.’’. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to new coverage periods beginning on or after the 
date of the enactment of this Act. 
SEC. 505. CLARIFICATION OF COVERAGE OF SERVICES PROVIDED 
THROUGH SCHOOL-BASED HEALTH CENTERS. 
(a) IN GENERAL.—Section 2103(c) (42 U.S.C. 1397cc(c)), as 
amended by section 501(a)(1)(B), is amended by adding at the 
end the following new paragraph: 
‘‘(8) AVAILABILITY OF COVERAGE FOR ITEMS AND SERVICES 
FURNISHED
THROUGH
SCHOOL-BASED
HEALTH
CENTERS.— 
Nothing in this title shall be construed as limiting a State’s 
ability to provide child health assistance for covered items 
and services that are furnished through school-based health 
centers (as defined in section 2110(c)(9)).’’. 
(b) DEFINITION.—Section 2110(c) (42 U.S.C. 1397jj) is amended 
by adding at the end the following: 
42 USC 1397cc 
note. 
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123 STAT. 91 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(9) SCHOOL-BASED HEALTH CENTER.— 
‘‘(A) IN
GENERAL.—The term ‘school-based health 
center’ means a health clinic that— 
‘‘(i) is located in or near a school facility of a 
school district or board or of an Indian tribe or tribal 
organization; 
‘‘(ii) is organized through school, community, and 
health provider relationships; 
‘‘(iii) is administered by a sponsoring facility; 
‘‘(iv) provides through health professionals primary 
health services to children in accordance with State 
and local law, including laws relating to licensure and 
certification; and 
‘‘(v) satisfies such other requirements as a State 
may establish for the operation of such a clinic. 
‘‘(B) SPONSORING FACILITY.—For purposes of subpara-
graph (A)(iii), the term ‘sponsoring facility’ includes any 
of the following: 
‘‘(i) A hospital. 
‘‘(ii) A public health department. 
‘‘(iii) A community health center. 
‘‘(iv) A nonprofit health care agency. 
‘‘(v) A school or school system. 
‘‘(vi) A program administered by the Indian Health 
Service or the Bureau of Indian Affairs or operated 
by an Indian tribe or a tribal organization.’’. 
SEC. 506. MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION. 
(a) IN GENERAL.—Title XIX (42 U.S.C. 1396 et seq.) is amended 
by inserting before section 1901 the following new section: 
‘‘MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION 
‘‘SEC. 1900. (a) ESTABLISHMENT.—There is hereby established 
the Medicaid and CHIP Payment and Access Commission (in this 
section referred to as ‘MACPAC’). 
‘‘(b) DUTIES.— 
‘‘(1) REVIEW OF ACCESS POLICIES AND ANNUAL REPORTS.— 
MACPAC shall— 
‘‘(A) review policies of the Medicaid program estab-
lished under this title (in this section referred to as ‘Med-
icaid’) and the State Children’s Health Insurance Program 
established under title XXI (in this section referred to 
as ‘CHIP’) affecting children’s access to covered items and 
services, including topics described in paragraph (2); 
‘‘(B) make recommendations to Congress concerning 
such access policies; 
‘‘(C) by not later than March 1 of each year (beginning 
with 2010), submit a report to Congress containing the 
results of such reviews and MACPAC’s recommendations 
concerning such policies; and 
‘‘(D) by not later than June 1 of each year (beginning 
with 2010), submit a report to Congress containing an 
examination of issues affecting Medicaid and CHIP, 
including the implications of changes in health care 
delivery in the United States and in the market for health 
care services on such programs. 
42 USC 1396. 
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123 STAT. 92 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(2) SPECIFIC
TOPICS
TO
BE
REVIEWED.—Specifically, 
MACPAC shall review and assess the following: 
‘‘(A) MEDICAID AND CHIP PAYMENT POLICIES.—Payment 
policies under Medicaid and CHIP, including— 
‘‘(i) the factors affecting expenditures for items 
and services in different sectors, including the process 
for updating hospital, skilled nursing facility, physi-
cian, Federally-qualified health center, rural health 
center, and other fees; 
‘‘(ii) payment methodologies; and 
‘‘(iii) the relationship of such factors and meth-
odologies to access and quality of care for Medicaid 
and CHIP beneficiaries. 
‘‘(B) INTERACTION OF MEDICAID AND CHIP PAYMENT POLI-
CIES WITH HEALTH CARE DELIVERY GENERALLY.—The effect 
of Medicaid and CHIP payment policies on access to items 
and services for children and other Medicaid and CHIP 
populations other than under this title or title XXI and 
the implications of changes in health care delivery in the 
United States and in the general market for health care 
items and services on Medicaid and CHIP. 
‘‘(C) OTHER ACCESS POLICIES.—The effect of other Med-
icaid and CHIP policies on access to covered items and 
services, including policies relating to transportation and 
language barriers. 
‘‘(3) CREATION OF EARLY-WARNING SYSTEM.—MACPAC shall 
create an early-warning system to identify provider shortage 
areas or any other problems that threaten access to care or 
the health care status of Medicaid and CHIP beneficiaries. 
‘‘(4) COMMENTS ON CERTAIN SECRETARIAL REPORTS.—If the 
Secretary submits to Congress (or a committee of Congress) 
a report that is required by law and that relates to access 
policies, including with respect to payment policies, under Med-
icaid or CHIP, the Secretary shall transmit a copy of the 
report to MACPAC. MACPAC shall review the report and, 
not later than 6 months after the date of submittal of the 
Secretary’s report to Congress, shall submit to the appropriate 
committees of Congress written comments on such report. Such 
comments may include such recommendations as MACPAC 
deems appropriate. 
‘‘(5) AGENDA
AND
ADDITIONAL
REVIEWS.—MACPAC shall 
consult periodically with the chairmen and ranking minority 
members of the appropriate committees of Congress regarding 
MACPAC’s agenda and progress towards achieving the agenda. 
MACPAC may conduct additional reviews, and submit addi-
tional reports to the appropriate committees of Congress, from 
time to time on such topics relating to the program under 
this title or title XXI as may be requested by such chairmen 
and members and as MACPAC deems appropriate. 
‘‘(6) AVAILABILITY OF REPORTS.—MACPAC shall transmit 
to the Secretary a copy of each report submitted under this 
subsection and shall make such reports available to the public. 
‘‘(7) APPROPRIATE COMMITTEE OF CONGRESS.—For purposes 
of this section, the term ‘appropriate committees of Congress’ 
means the Committee on Energy and Commerce of the House 
of Representatives and the Committee on Finance of the Senate. 
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123 STAT. 93 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(8) VOTING AND REPORTING REQUIREMENTS.—With respect 
to each recommendation contained in a report submitted under 
paragraph (1), each member of MACPAC shall vote on the 
recommendation, and MACPAC shall include, by member, the 
results of that vote in the report containing the recommenda-
tion. 
‘‘(9) EXAMINATION
OF
BUDGET
CONSEQUENCES.—Before 
making any recommendations, MACPAC shall examine the 
budget consequences of such recommendations, directly or 
through consultation with appropriate expert entities. 
‘‘(c) MEMBERSHIP.— 
‘‘(1) NUMBER AND APPOINTMENT.—MACPAC shall be com-
posed of 17 members appointed by the Comptroller General 
of the United States. 
‘‘(2) QUALIFICATIONS.— 
‘‘(A) IN GENERAL.—The membership of MACPAC shall 
include individuals who have had direct experience as 
enrollees or parents of enrollees in Medicaid or CHIP and 
individuals with national recognition for their expertise 
in Federal safety net health programs, health finance and 
economics, actuarial science, health facility management, 
health plans and integrated delivery systems, reimburse-
ment of health facilities, health information technology, 
pediatric physicians, dentists, and other providers of health 
services, and other related fields, who provide a mix of 
different professionals, broad geographic representation, 
and a balance between urban and rural representatives. 
‘‘(B) INCLUSION.—The membership of MACPAC shall 
include (but not be limited to) physicians and other health 
professionals, employers, third-party payers, and individ-
uals with expertise in the delivery of health services. Such 
membership shall also include consumers representing chil-
dren, pregnant women, the elderly, and individuals with 
disabilities, current or former representatives of State agen-
cies responsible for administering Medicaid, and current 
or former representatives of State agencies responsible for 
administering CHIP. 
‘‘(C) MAJORITY
NONPROVIDERS.—Individuals who are 
directly involved in the provision, or management of the 
delivery, of items and services covered under Medicaid 
or CHIP shall not constitute a majority of the membership 
of MACPAC. 
‘‘(D) ETHICAL DISCLOSURE.—The Comptroller General 
of the United States shall establish a system for public 
disclosure by members of MACPAC of financial and other 
potential conflicts of interest relating to such members. 
Members of MACPAC shall be treated as employees of 
Congress for purposes of applying title I of the Ethics 
in Government Act of 1978 (Public Law 95–521). 
‘‘(3) TERMS.— 
‘‘(A) IN GENERAL.—The terms of members of MACPAC 
shall be for 3 years except that the Comptroller General 
of the United States shall designate staggered terms for 
the members first appointed. 
‘‘(B) VACANCIES.—Any member appointed to fill a 
vacancy occurring before the expiration of the term for 
which the member’s predecessor was appointed shall be 
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123 STAT. 94 
PUBLIC LAW 111–3—FEB. 4, 2009 
appointed only for the remainder of that term. A member 
may serve after the expiration of that member’s term until 
a successor has taken office. A vacancy in MACPAC shall 
be filled in the manner in which the original appointment 
was made. 
‘‘(4) COMPENSATION.—While serving on the business of 
MACPAC (including travel time), a member of MACPAC shall 
be entitled to compensation at the per diem equivalent of the 
rate provided for level IV of the Executive Schedule under 
section 5315 of title 5, United States Code; and while so serving 
away from home and the member’s regular place of business, 
a member may be allowed travel expenses, as authorized by 
the Chairman of MACPAC. Physicians serving as personnel 
of MACPAC may be provided a physician comparability allow-
ance by MACPAC in the same manner as Government physi-
cians may be provided such an allowance by an agency under 
section 5948 of title 5, United States Code, and for such purpose 
subsection (i) of such section shall apply to MACPAC in the 
same manner as it applies to the Tennessee Valley Authority. 
For purposes of pay (other than pay of members of MACPAC) 
and employment benefits, rights, and privileges, all personnel 
of MACPAC shall be treated as if they were employees of 
the United States Senate. 
‘‘(5) CHAIRMAN; VICE CHAIRMAN.—The Comptroller General 
of the United States shall designate a member of MACPAC, 
at the time of appointment of the member as Chairman and 
a member as Vice Chairman for that term of appointment, 
except that in the case of vacancy of the Chairmanship or 
Vice Chairmanship, the Comptroller General of the United 
States may designate another member for the remainder of 
that member’s term. 
‘‘(6) MEETINGS.—MACPAC shall meet at the call of the 
Chairman. 
‘‘(d) DIRECTOR AND STAFF; EXPERTS AND CONSULTANTS.—Sub-
ject to such review as the Comptroller General of the United States 
deems necessary to assure the efficient administration of MACPAC, 
MACPAC may— 
‘‘(1) employ and fix the compensation of an Executive 
Director (subject to the approval of the Comptroller General 
of the United States) and such other personnel as may be 
necessary to carry out its duties (without regard to the provi-
sions of title 5, United States Code, governing appointments 
in the competitive service); 
‘‘(2) seek such assistance and support as may be required 
in the performance of its duties from appropriate Federal 
departments and agencies; 
‘‘(3) enter into contracts or make other arrangements, as 
may be necessary for the conduct of the work of MACPAC 
(without regard to section 3709 of the Revised Statutes (41 
U.S.C. 5)); 
‘‘(4) make advance, progress, and other payments which 
relate to the work of MACPAC; 
‘‘(5) provide transportation and subsistence for persons 
serving without compensation; and 
‘‘(6) prescribe such rules and regulations as it deems nec-
essary with respect to the internal organization and operation 
of MACPAC. 
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123 STAT. 95 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(e) POWERS.— 
‘‘(1) OBTAINING
OFFICIAL
DATA.—MACPAC may secure 
directly from any department or agency of the United States 
information necessary to enable it to carry out this section. 
Upon request of the Chairman, the head of that department 
or agency shall furnish that information to MACPAC on an 
agreed upon schedule. 
‘‘(2) DATA COLLECTION.—In order to carry out its functions, 
MACPAC shall— 
‘‘(A) utilize existing information, both published and 
unpublished, where possible, collected and assessed either 
by its own staff or under other arrangements made in 
accordance with this section; 
‘‘(B) carry out, or award grants or contracts for, original 
research and experimentation, where existing information 
is inadequate; and 
‘‘(C) adopt procedures allowing any interested party 
to submit information for MACPAC’s use in making reports 
and recommendations. 
‘‘(3) ACCESS OF GAO TO INFORMATION.—The Comptroller 
General of the United States shall have unrestricted access 
to all deliberations, records, and nonproprietary data of 
MACPAC, immediately upon request. 
‘‘(4) PERIODIC AUDIT.—MACPAC shall be subject to periodic 
audit by the Comptroller General of the United States. 
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.— 
‘‘(1) REQUEST FOR APPROPRIATIONS.—MACPAC shall submit 
requests for appropriations in the same manner as the Comp-
troller General of the United States submits requests for appro-
priations, but amounts appropriated for MACPAC shall be sepa-
rate from amounts appropriated for the Comptroller General 
of the United States. 
‘‘(2) AUTHORIZATION.—There are authorized to be appro-
priated such sums as may be necessary to carry out the provi-
sions of this section.’’. 
(b) DEADLINE
FOR INITIAL APPOINTMENTS.—Not later than 
January 1, 2010, the Comptroller General of the United States 
shall appoint the initial members of the Medicaid and CHIP Pay-
ment and Access Commission established under section 1900 of 
the Social Security Act (as added by subsection (a)). 
(c) ANNUAL REPORT ON MEDICAID.—Not later than January 
1, 2010, and annually thereafter, the Secretary, in consultation 
with the Secretary of the Treasury, the Secretary of Labor, and 
the States (as defined for purposes of Medicaid), shall submit an 
annual report to Congress on the financial status of, enrollment 
in, and spending trends for, Medicaid for the fiscal year ending 
on September 30 of the preceding year. 
42 USC 1396 
note. 
42 USC 1396 
note. 
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123 STAT. 96 
PUBLIC LAW 111–3—FEB. 4, 2009 
TITLE VI—PROGRAM INTEGRITY AND 
OTHER MISCELLANEOUS PROVISIONS 
Subtitle A—Program Integrity and Data 
Collection 
SEC. 601. PAYMENT ERROR RATE MEASUREMENT (‘‘PERM’’). 
(a) EXPENDITURES RELATED TO COMPLIANCE WITH REQUIRE-
MENTS.— 
(1) ENHANCED
PAYMENTS.—Section 2105(c) (42 U.S.C. 
1397ee(c)), as amended by section 301(a), is amended by adding 
at the end the following new paragraph: 
‘‘(11) ENHANCED
PAYMENTS.—Notwithstanding subsection 
(b), the enhanced FMAP with respect to payments under sub-
section (a) for expenditures related to the administration of 
the payment error rate measurement (PERM) requirements 
applicable to the State child health plan in accordance with 
the Improper Payments Information Act of 2002 and parts 
431 and 457 of title 42, Code of Federal Regulations (or any 
related or successor guidance or regulations) shall in no event 
be less than 90 percent.’’. 
(2) EXCLUSION OF FROM CAP ON ADMINISTRATIVE EXPENDI-
TURES.—Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)C)), as 
amended by section 302(b)), is amended by adding at the end 
the following: 
‘‘(iv) PAYMENT ERROR RATE MEASUREMENT (PERM) 
EXPENDITURES.—Expenditures related to the adminis-
tration of the payment error rate measurement 
(PERM) requirements applicable to the State child 
health plan in accordance with the Improper Payments 
Information Act of 2002 and parts 431 and 457 of 
title 42, Code of Federal Regulations (or any related 
or successor guidance or regulations).’’. 
(b) FINAL RULE REQUIRED TO BE IN EFFECT FOR ALL STATES.— 
Notwithstanding parts 431 and 457 of title 42, Code of Federal 
Regulations (as in effect on the date of enactment of this Act), 
the Secretary shall not calculate or publish any national or State- 
specific error rate based on the application of the payment error 
rate measurement (in this section referred to as ‘‘PERM’’) require-
ments to CHIP until after the date that is 6 months after the 
date on which a new final rule (in this section referred to as 
the ‘‘new final rule’’) promulgated after the date of the enactment 
of this Act and implementing such requirements in accordance 
with the requirements of subsection (c) is in effect for all States. 
Any calculation of a national error rate or a State specific error 
rate after such new final rule in effect for all States may only 
be inclusive of errors, as defined in such new final rule or in 
guidance issued within a reasonable time frame after the effective 
date for such new final rule that includes detailed guidance for 
the specific methodology for error determinations. 
(c) REQUIREMENTS
FOR NEW FINAL RULE.—For purposes of 
subsection (b), the requirements of this subsection are that the 
new final rule implementing the PERM requirements shall— 
(1) include— 
42 USC 1397ee 
note. 
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123 STAT. 97 
PUBLIC LAW 111–3—FEB. 4, 2009 
(A) clearly defined criteria for errors for both States 
and providers; 
(B) a clearly defined process for appealing error deter-
minations by— 
(i) review contractors; or 
(ii) the agency and personnel described in section 
431.974(a)(2) of title 42, Code of Federal Regulations, 
as in effect on September 1, 2007, responsible for the 
development, direction, implementation, and evalua-
tion of eligibility reviews and associated activities; and 
(C) clearly defined responsibilities and deadlines for 
States in implementing any corrective action plans; and 
(2) provide that the payment error rate determined for 
a State shall not take into account payment errors resulting 
from the State’s verification of an applicant’s self-declaration 
or self-certification of eligibility for, and the correct amount 
of, medical assistance or child health assistance, if the State 
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 
new 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 or under a final 
rule for fiscal year 2008 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 or fiscal year 2011 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 new final rule 
implementing 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, relating to Medicaid eligibility 
reviews, a State may elect to substitute data obtained through 
MEQC reviews conducted 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 
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123 STAT. 98 
PUBLIC LAW 111–3—FEB. 4, 2009 
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 the first fiscal 
year that begins on or after the date on which the new final 
rule is in effect for all States, on the basis of such information 
as the Secretary determines appropriate. In establishing such 
sample sizes, the Secretary shall, to the greatest extent prac-
ticable— 
(1) minimize the administrative cost burden on States 
under Medicaid and CHIP; and 
(2) maintain State flexibility to manage such programs. 
(g) TIME FOR PROMULGATION OF FINAL RULE.—The final rule 
implementing the PERM requirements under subsection (b) shall 
be promulgated not later than 6 months after the date of enactment 
of this Act. 
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 2009’’. 
(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 2009, 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(m)(5)(B) and any other data necessary for car-
rying 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). 
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123 STAT. 99 
PUBLIC LAW 111–3—FEB. 4, 2009 
‘‘(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.’’. 
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, 2011, 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 2010 for the 
purpose of conducting the evaluation authorized under this 
paragraph. Amounts appropriated under this subparagraph 
shall remain available for expenditure through fiscal year 
2012.’’. 
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 
Applicability. 
Contracts. 
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123 STAT. 100 
PUBLIC LAW 111–3—FEB. 4, 2009 
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 
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 
42 USC 1396 
note. 
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123 STAT. 101 
PUBLIC LAW 111–3—FEB. 4, 2009 
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: 
‘‘(c) PUBLICATION OF PROVISIONS AFFECTED.—With respect to 
a State plan amendment to provide benchmark benefits in accord-
ance with subsections (a) and (b) that is approved by the Secretary, 
the Secretary shall publish on the Internet website of the Centers 
for Medicare & Medicaid Services, a list of the provisions of this 
title that the Secretary has determined do not apply in order 
to enable the State to carry out the plan amendment and the 
reason for each such determination on the date such approval 
is made, and shall publish such list in the Federal Register and 
not later than 30 days after such date of approval.’’. 
(d) EFFECTIVE DATE.—The amendments made by subsections 
(a), (b), and (c) of this section shall take effect as if included 
in the amendment made by section 6044(a) of the Deficit Reduction 
Act of 2005. 
SEC. 612. REFERENCES TO TITLE XXI. 
Section 704 of the Medicare, Medicaid, and SCHIP Balanced 
Budget Refinement Act of 1999, as enacted into law by division 
B of Public Law 106–113 (113 Stat. 1501A–402) is repealed. 
SEC. 613. PROHIBITING INITIATION OF NEW HEALTH OPPORTUNITY 
ACCOUNT DEMONSTRATION PROGRAMS. 
After the date of the enactment of this Act, the Secretary 
of Health and Human Services may not approve any new dem-
onstration programs under section 1938 of the Social Security Act 
(42 U.S.C. 1396u–8). 
SEC. 614. ADJUSTMENT IN COMPUTATION OF MEDICAID FMAP TO DIS-
REGARD AN EXTRAORDINARY EMPLOYER PENSION CON-
TRIBUTION. 
(a) IN GENERAL.—Only for purposes of computing the FMAP 
(as defined in subsection (e)) for a State for a fiscal year (beginning 
with fiscal year 2006) and applying the FMAP under title XIX 
of the Social Security Act, any significantly disproportionate 
42 USC 1396d 
note. 
42 USC 1396u–8 
note. 
42 USC 1397aa 
note. 
42 USC 1396u–7 
note. 
Web site. 
List. 
Federal Register, 
publication. 
Deadline. 
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123 STAT. 102 
PUBLIC LAW 111–3—FEB. 4, 2009 
employer pension or insurance fund contribution described in sub-
section (b) shall be disregarded in computing the per capita income 
of such State, but shall not be disregarded in computing the per 
capita income for the continental United States (and Alaska) and 
Hawaii. 
(b) SIGNIFICANTLY DISPROPORTIONATE EMPLOYER PENSION AND 
INSURANCE FUND CONTRIBUTION.— 
(1) IN GENERAL.—For purposes of this section, a signifi-
cantly disproportionate employer pension and insurance fund 
contribution described in this subsection with respect to a State 
is any identifiable employer contribution towards pension or 
other employee insurance funds that is estimated to accrue 
to residents of such State for a calendar year (beginning with 
calendar year 2003) if the increase in the amount so estimated 
exceeds 25 percent of the total increase in personal income 
in that State for the year involved. 
(2) DATA
TO
BE
USED.—For estimating and adjustment 
a FMAP already calculated as of the date of the enactment 
of this Act for a State with a significantly disproportionate 
employer pension and insurance fund contribution, the Sec-
retary shall use the personal income data set originally used 
in calculating such FMAP. 
(3) SPECIAL ADJUSTMENT FOR NEGATIVE GROWTH.—If in any 
calendar year the total personal income growth in a State 
is negative, an employer pension and insurance fund contribu-
tion for the purposes of calculating the State’s FMAP for a 
calendar year shall not exceed 125 percent of the amount 
of such contribution for the previous calendar year for the 
State. 
(c) HOLD HARMLESS.—No State shall have its FMAP for a 
fiscal year reduced as a result of the application of this section. 
(d) REPORT.—Not later than May 15, 2009, the Secretary shall 
submit to the Congress a report on the problems presented by 
the current treatment of pension and insurance fund contributions 
in the use of Bureau of Economic Affairs calculations for the FMAP 
and for Medicaid and on possible alternative methodologies to miti-
gate such problems. 
(e) FMAP DEFINED.—For purposes of this section, the term 
‘‘FMAP’’ means the Federal medical assistance percentage, as 
defined in section 1905(b) of the Social Security Act (42 U.S.C. 
1396(d)). 
SEC. 615. CLARIFICATION TREATMENT OF REGIONAL MEDICAL 
CENTER. 
(a) IN GENERAL.—Nothing in section 1903(w) of the Social 
Security Act (42 U.S.C. 1396b(w)) shall be construed by the Sec-
retary of Health and Human Services as prohibiting a State’s use 
of funds as the non-Federal share of expenditures under title XIX 
of such Act where such funds are transferred from or certified 
by a publicly-owned regional medical center located in another 
State and described in subsection (b), so long as the Secretary 
determines that such use of funds is proper and in the interest 
of the program under title XIX. 
(b) CENTER DESCRIBED.—A center described in this subsection 
is a publicly-owned regional medical center that— 
(1) provides level 1 trauma and burn care services; 
(2) provides level 3 neonatal care services; 
42 USC 1396b 
note. 
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123 STAT. 103 
PUBLIC LAW 111–3—FEB. 4, 2009 
(3) is obligated to serve all patients, regardless of ability 
to pay; 
(4) is located within a Standard Metropolitan Statistical 
Area (SMSA) that includes at least 3 States; 
(5) provides services as a tertiary care provider for patients 
residing within a 125-mile radius; and 
(6) meets the criteria for a disproportionate share hospital 
under section 1923 of such Act (42 U.S.C. 1396r–4) in at least 
one State other than the State in which the center is located. 
SEC. 616. EXTENSION OF MEDICAID DSH ALLOTMENTS FOR TEN-
NESSEE AND HAWAII. 
Section 1923(f)(6) (42 U.S.C. 1396r–4(f)(6)), as amended by 
section 202 of the Medicare Improvements for Patients and Pro-
viders Act of 2008 (Public Law 110–275) is amended— 
(1) in the paragraph heading, by striking ‘‘2009 AND THE 
FIRST CALENDAR QUARTER OF FISCAL YEAR 2010’’ and inserting 
‘‘2011 AND THE FIRST CALENDAR QUARTER OF FISCAL YEAR 2012’’; 
(2) in subparagraph (A)— 
(A) in clause (i)— 
(i) in the second sentence— 
(I) by striking ‘‘and 2009’’ and inserting ‘‘, 
2009, 2010, and 2011’’; and 
(II) by striking ‘‘such portion of’’; and 
(ii) in the third sentence, by striking ‘‘2010 for 
the period ending on December 31, 2009’’ and inserting 
‘‘2012 for the period ending on December 31, 2011’’; 
(B) in clause (ii), by striking ‘‘or for a period in fiscal 
year 2010’’ and inserting ‘‘2010, 2011, or for period in 
fiscal year 2012’’; and 
(C) in clause (iv)— 
(i) in the clause heading, by striking ‘‘2009 AND 
THE FIRST CALENDAR QUARTER OF FISCAL YEAR 2010’’ 
and inserting ‘‘2011 AND THE FIRST CALENDAR QUARTER 
OF FISCAL YEAR 2012’’; and 
(ii) in each of subclauses (I) and (II), by striking 
‘‘ or for a period in fiscal year 2010’’ and inserting 
‘‘2010, 2011, or for a period in fiscal year 2012’’; and 
(3) in subparagraph (B)— 
(A) in clause (i)— 
(i) in the first sentence, by striking ‘‘2009’’ and 
inserting ‘‘2011’’; and 
(ii) in the second sentence, by striking ‘‘2010 for 
the period ending on December 31, 2009’’ and inserting 
‘‘2012 for the period ending on December 31, 2011’’. 
SEC. 617. GAO REPORT ON MEDICAID MANAGED CARE PAYMENT 
RATES. 
Not later than 18 months after the date of the enactment 
of this Act, 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 Commerce of the House of Represent-
atives analyzing the extent to which State payment rates for med-
icaid managed care organizations under Medicaid are actuarially 
sound. 
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123 STAT. 104 
PUBLIC LAW 111–3—FEB. 4, 2009 
Subtitle C—Other Provisions 
SEC. 621. OUTREACH REGARDING HEALTH INSURANCE OPTIONS 
AVAILABLE TO CHILDREN. 
(a) DEFINITIONS.—In this section— 
(1) the terms ‘‘Administration’’ and ‘‘Administrator’’ means 
the Small Business Administration and the Administrator 
thereof, respectively; 
(2) the term ‘‘certified development company’’ means a 
development company participating in the program under title 
V of the Small Business Investment Act of 1958 (15 U.S.C. 
695 et seq.); 
(3) the term ‘‘Medicaid program’’ means the program estab-
lished under title XIX of the Social Security Act (42 U.S.C. 
1396 et seq.); 
(4) the term ‘‘Service Corps of Retired Executives’’ means 
the Service Corps of Retired Executives authorized by section 
8(b)(1) of the Small Business Act (15 U.S.C. 637(b)(1)); 
(5) the term ‘‘small business concern’’ has the meaning 
given that term in section 3 of the Small Business Act (15 
U.S.C. 632); 
(6) the term ‘‘small business development center’’ means 
a small business development center described in section 21 
of the Small Business Act (15 U.S.C. 648); 
(7) the term ‘‘State’’ has the meaning given that term 
for purposes of title XXI of the Social Security Act (42 U.S.C. 
1397aa et seq.); 
(8) the term ‘‘State Children’s Health Insurance Program’’ 
means the State Children’s Health Insurance Program estab-
lished under title XXI of the Social Security Act (42 U.S.C. 
1397aa et seq.); 
(9) the term ‘‘task force’’ means the task force established 
under subsection (b)(1); and 
(10) the term ‘‘women’s business center’’ means a women’s 
business center described in section 29 of the Small Business 
Act (15 U.S.C. 656). 
(b) ESTABLISHMENT OF TASK FORCE.— 
(1) ESTABLISHMENT.—There is established a task force to 
conduct a nationwide campaign of education and outreach for 
small business concerns regarding the availability of coverage 
for children through private insurance options, the Medicaid 
program, and the State Children’s Health Insurance Program. 
(2) MEMBERSHIP.—The task force shall consist of the 
Administrator, the Secretary of Health and Human Services, 
the Secretary of Labor, and the Secretary of the Treasury. 
(3) RESPONSIBILITIES.—The campaign conducted under this 
subsection shall include— 
(A) efforts to educate the owners of small business 
concerns about the value of health coverage for children; 
(B) information regarding options available to the 
owners and employees of small business concerns to make 
insurance more affordable, including Federal and State 
tax deductions and credits for health care-related expenses 
and health insurance expenses and Federal tax exclusion 
for health insurance options available under employer- 
15 USC 657p. 
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123 STAT. 105 
PUBLIC LAW 111–3—FEB. 4, 2009 
sponsored cafeteria plans under section 125 of the Internal 
Revenue Code of 1986; 
(C) efforts to educate the owners of small business 
concerns about assistance available through public pro-
grams; and 
(D) efforts to educate the owners and employees of 
small business concerns regarding the availability of the 
hotline operated as part of the Insure Kids Now program 
of the Department of Health and Human Services. 
(4) IMPLEMENTATION.—In carrying out this subsection, the 
task force may— 
(A) use any business partner of the Administration, 
including— 
(i) a small business development center; 
(ii) a certified development company; 
(iii) a women’s business center; and 
(iv) the Service Corps of Retired Executives; 
(B) enter into— 
(i) a memorandum of understanding with a 
chamber of commerce; and 
(ii) a partnership with any appropriate small busi-
ness concern or health advocacy group; and 
(C) designate outreach programs at regional offices 
of the Department of Health and Human Services to work 
with district offices of the Administration. 
(5) WEBSITE.—The Administrator shall ensure that links 
to information on the eligibility and enrollment requirements 
for the Medicaid program and State Children’s Health Insur-
ance Program of each State are prominently displayed on the 
website of the Administration. 
(6) REPORT.— 
(A) IN
GENERAL.—Not later than 2 years after the 
date of enactment of this Act, and every 2 years thereafter, 
the Administrator shall submit to the Committee on Small 
Business and Entrepreneurship of the Senate and the Com-
mittee on Small Business of the House of Representatives 
a report on the status of the nationwide campaign con-
ducted under paragraph (1). 
(B) CONTENTS.—Each report submitted under subpara-
graph (A) shall include a status update on all efforts made 
to educate owners and employees of small business con-
cerns on options for providing health insurance for children 
through public and private alternatives. 
SEC. 622. SENSE OF THE SENATE REGARDING ACCESS TO AFFORDABLE 
AND MEANINGFUL HEALTH INSURANCE COVERAGE. 
(a) FINDINGS.—The Senate finds the following: 
(1) There are approximately 45 million Americans currently 
without health insurance. 
(2) More than half of uninsured workers are employed 
by businesses with less than 25 employees or are self-employed. 
(3) Health insurance premiums continue to rise at more 
than twice the rate of inflation for all consumer goods. 
(4) Individuals in the small group and individual health 
insurance markets usually pay more for similar coverage than 
those in the large group market. 
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123 STAT. 106 
PUBLIC LAW 111–3—FEB. 4, 2009 
(5) The rapid growth in health insurance costs over the 
last few years has forced many employers, particularly small 
employers, to increase deductibles and co-pays or to drop cov-
erage completely. 
(b) SENSE OF THE SENATE.—The Senate— 
(1) recognizes the necessity to improve affordability and 
access to health insurance for all Americans; 
(2) acknowledges the value of building upon the existing 
private health insurance market; and 
(3) affirms its intent to enact legislation this year that, 
with appropriate protection for consumers, improves access to 
affordable and meaningful health insurance coverage for 
employees of small businesses and individuals by— 
(A) facilitating pooling mechanisms, including pooling 
across State lines, and 
(B) providing assistance to small businesses and 
individuals, including financial assistance and tax incen-
tives, for the purchase of private insurance coverage. 
TITLE VII—REVENUE PROVISIONS 
SEC. 701. INCREASE IN EXCISE TAX RATE ON TOBACCO PRODUCTS. 
(a) CIGARS.—Section 5701(a) of the Internal Revenue Code of 
1986 is amended— 
(1) by striking ‘‘$1.828 cents per thousand ($1.594 cents 
per thousand on cigars removed during 2000 or 2001)’’ in para-
graph (1) and inserting ‘‘$50.33 per thousand’’, 
(2) by striking ‘‘20.719 percent (18.063 percent on cigars 
removed during 2000 or 2001)’’ in paragraph (2) and inserting 
‘‘52.75 percent’’, and 
(3) by striking ‘‘$48.75 per thousand ($42.50 per thousand 
on cigars removed during 2000 or 2001)’’ in paragraph (2) 
and inserting ‘‘40.26 cents per cigar’’. 
(b) CIGARETTES.—Section 5701(b) of such Code is amended— 
(1) by striking ‘‘$19.50 per thousand ($17 per thousand 
on cigarettes removed during 2000 or 2001)’’ in paragraph 
(1) and inserting ‘‘$50.33 per thousand’’, and 
(2) by striking ‘‘$40.95 per thousand ($35.70 per thousand 
on cigarettes removed during 2000 or 2001)’’ in paragraph 
(2) and inserting ‘‘$105.69 per thousand’’. 
(c) CIGARETTE
PAPERS.—Section 5701(c) of such Code is 
amended by striking ‘‘1.22 cents (1.06 cents on cigarette papers 
removed during 2000 or 2001)’’ and inserting ‘‘3.15 cents’’. 
(d) CIGARETTE
TUBES.—Section 5701(d) of such Code is 
amended by striking ‘‘2.44 cents (2.13 cents on cigarette tubes 
removed during 2000 or 2001)’’ and inserting ‘‘6.30 cents’’. 
(e) SMOKELESS TOBACCO.—Section 5701(e) of such Code is 
amended— 
(1) by striking ‘‘58.5 cents (51 cents on snuff removed 
during 2000 or 2001)’’ in paragraph (1) and inserting ‘‘$1.51’’, 
and 
(2) by striking ‘‘19.5 cents (17 cents on chewing tobacco 
removed during 2000 or 2001)’’ in paragraph (2) and inserting 
‘‘50.33 cents’’. 
26 USC 5701. 
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123 STAT. 107 
PUBLIC LAW 111–3—FEB. 4, 2009 
(f) PIPE TOBACCO.—Section 5701(f) of such Code is amended 
by striking ‘‘$1.0969 cents (95.67 cents on pipe tobacco removed 
during 2000 or 2001)’’ and inserting ‘‘$2.8311 cents’’. 
(g) ROLL-YOUR-OWN TOBACCO.—Section 5701(g) of such Code 
is amended by striking ‘‘$1.0969 cents (95.67 cents on roll-your- 
own tobacco removed during 2000 or 2001)’’ and inserting ‘‘$24.78’’. 
(h) FLOOR STOCKS TAXES.— 
(1) IMPOSITION OF TAX.—On tobacco products (other than 
cigars described in section 5701(a)(2) of the Internal Revenue 
Code of 1986) and cigarette papers and tubes manufactured 
in or imported into the United States which are removed before 
April 1, 2009, and held on such date for sale by any person, 
there is hereby imposed a tax in an amount equal to the 
excess of— 
(A) the tax which would be imposed under section 
5701 of such Code on the article if the article had been 
removed on such date, over 
(B) the prior tax (if any) imposed under section 5701 
of such Code on such article. 
(2) CREDIT AGAINST TAX.—Each person shall be allowed 
as a credit against the taxes imposed by paragraph (1) an 
amount equal to $500. Such credit shall not exceed the amount 
of taxes imposed by paragraph (1) on April 1, 2009, for which 
such person is liable. 
(3) LIABILITY FOR TAX AND METHOD OF PAYMENT.— 
(A) LIABILITY FOR TAX.—A person holding tobacco prod-
ucts, cigarette papers, or cigarette tubes on April 1, 2009, 
to which any tax imposed by paragraph (1) applies shall 
be liable for such tax. 
(B) METHOD OF PAYMENT.—The tax imposed by para-
graph (1) shall be paid in such manner as the Secretary 
shall prescribe by regulations. 
(C) TIME FOR PAYMENT.—The tax imposed by para-
graph (1) shall be paid on or before August 1, 2009. 
(4) ARTICLES IN FOREIGN TRADE ZONES.—Notwithstanding 
the Act of June 18, 1934 (commonly known as the Foreign 
Trade Zone Act, 48 Stat. 998, 19 U.S.C. 81a et seq.) or any 
other provision of law, any article which is located in a foreign 
trade zone on April 1, 2009, shall be subject to the tax imposed 
by paragraph (1) if— 
(A) internal revenue taxes have been determined, or 
customs duties liquidated, with respect to such article 
before such date pursuant to a request made under the 
1st proviso of section 3(a) of such Act, or 
(B) such article is held on such date under the super-
vision of an officer of the United States Customs and Border 
Protection of the Department of Homeland Security pursu-
ant to the 2d proviso of such section 3(a). 
(5) DEFINITIONS.—For purposes of this subsection— 
(A) IN GENERAL.—Any term used in this subsection 
which is also used in section 5702 of the Internal Revenue 
Code of 1986 shall have the same meaning as such term 
has in such section. 
(B) SECRETARY.—The term ‘‘Secretary’’ means the Sec-
retary of the Treasury or the Secretary’s delegate. 
Regulations. 
26 USC 5701 
note. 
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123 STAT. 108 
PUBLIC LAW 111–3—FEB. 4, 2009 
(6) CONTROLLED GROUPS.—Rules similar to the rules of 
section 5061(e)(3) of such Code shall apply for purposes of 
this subsection. 
(7) OTHER
LAWS
APPLICABLE.—All provisions of law, 
including penalties, applicable with respect to the taxes imposed 
by section 5701 of such Code shall, insofar as applicable and 
not inconsistent with the provisions of this subsection, apply 
to the floor stocks taxes imposed by paragraph (1), to the 
same extent as if such taxes were imposed by such section 
5701. The Secretary may treat any person who bore the ulti-
mate burden of the tax imposed by paragraph (1) as the person 
to whom a credit or refund under such provisions may be 
allowed or made. 
(i) EFFECTIVE DATE.—The amendments made by this section 
shall apply to articles removed (as defined in section 5702(j) of 
the Internal Revenue Code of 1986) after March 31, 2009. 
SEC. 702. ADMINISTRATIVE IMPROVEMENTS. 
(a) PERMIT, INVENTORIES, REPORTS, AND RECORDS REQUIRE-
MENTS
FOR
MANUFACTURERS
AND
IMPORTERS
OF
PROCESSED 
TOBACCO.— 
(1) PERMIT.— 
(A) APPLICATION.—Section 5712 of the Internal Rev-
enue Code of 1986 is amended by inserting ‘‘or processed 
tobacco’’ after ‘‘tobacco products’’. 
(B) ISSUANCE.—Section 5713(a) of such Code is 
amended by inserting ‘‘or processed tobacco’’ after ‘‘tobacco 
products’’. 
(2) INVENTORIES, REPORTS, AND PACKAGES.— 
(A) INVENTORIES.—Section 5721 of such Code is 
amended by inserting ‘‘, processed tobacco,’’ after ‘‘tobacco 
products’’. 
(B) REPORTS.—Section 5722 of such Code is amended 
by inserting ‘‘, processed tobacco,’’ after ‘‘tobacco products’’. 
(C) PACKAGES, MARKS, LABELS, AND NOTICES.—Section 
5723 of such Code is amended by inserting ‘‘, processed 
tobacco,’’ after ‘‘tobacco products’’ each place it appears. 
(3) RECORDS.—Section 5741 of such Code is amended by 
inserting ‘‘, processed tobacco,’’ after ‘‘tobacco products’’. 
(4) MANUFACTURER OF PROCESSED TOBACCO.—Section 5702 
of such Code is amended by adding at the end the following 
new subsection: 
‘‘(p) MANUFACTURER OF PROCESSED TOBACCO.— 
‘‘(1) IN
GENERAL.—The term ‘manufacturer of processed 
tobacco’ means any person who processes any tobacco other 
than tobacco products. 
‘‘(2) PROCESSED TOBACCO.—The processing of tobacco shall 
not include the farming or growing of tobacco or the handling 
of tobacco solely for sale, shipment, or delivery to a manufac-
turer of tobacco products or processed tobacco.’’. 
(5) CONFORMING AMENDMENTS.— 
(A) Section 5702(h) of such Code is amended by striking 
‘‘tobacco products and cigarette papers and tubes’’ and 
inserting ‘‘tobacco products or cigarette papers or tubes 
or any processed tobacco’’. 
26 USC 5702. 
26 USC 5741. 
26 USC 5723. 
26 USC 5722. 
26 USC 5721. 
26 USC 5713. 
26 USC 5712. 
26 USC 5701 
note. 
Applicability. 
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123 STAT. 109 
PUBLIC LAW 111–3—FEB. 4, 2009 
(B) Sections 5702(j) and 5702(k) of such Code are each 
amended by inserting ‘‘, or any processed tobacco,’’ after 
‘‘tobacco products or cigarette papers or tubes’’. 
(6) EFFECTIVE DATE.—The amendments made by this sub-
section shall take effect on April 1, 2009. 
(b) BASIS FOR DENIAL, SUSPENSION, OR REVOCATION OF PER-
MITS.— 
(1) DENIAL.—Paragraph (3) of section 5712 of such Code 
is amended to read as follows: 
‘‘(3) such person (including, in the case of a corporation, 
any officer, director, or principal stockholder and, in the case 
of a partnership, a partner)— 
‘‘(A) is, by reason of his business experience, financial 
standing, or trade connections or by reason of previous 
or current legal proceedings involving a felony violation 
of any other provision of Federal criminal law relating 
to tobacco products, processed tobacco, cigarette paper, or 
cigarette tubes, not likely to maintain operations in compli-
ance with this chapter, 
‘‘(B) has been convicted of a felony violation of any 
provision of Federal or State criminal law relating to 
tobacco products, processed tobacco, cigarette paper, or 
cigarette tubes, or 
‘‘(C) has failed to disclose any material information 
required or made any material false statement in the 
application therefor.’’. 
(2) SUSPENSION OR REVOCATION.—Subsection (b) of section 
5713 of such Code is amended to read as follows: 
‘‘(b) SUSPENSION OR REVOCATION.— 
‘‘(1) SHOW CAUSE HEARING.—If the Secretary has reason 
to believe that any person holding a permit— 
‘‘(A) has not in good faith complied with this chapter, 
or with any other provision of this title involving intent 
to defraud, 
‘‘(B) has violated the conditions of such permit, 
‘‘(C) has failed to disclose any material information 
required or made any material false statement in the 
application for such permit, 
‘‘(D) has failed to maintain his premises in such 
manner as to protect the revenue, 
‘‘(E) is, by reason of previous or current legal pro-
ceedings involving a felony violation of any other provision 
of Federal criminal law relating to tobacco products, proc-
essed tobacco, cigarette paper, or cigarette tubes, not likely 
to maintain operations in compliance with this chapter, 
or 
‘‘(F) has been convicted of a felony violation of any 
provision of Federal or State criminal law relating to 
tobacco products, processed tobacco, cigarette paper, or 
cigarette tubes, 
the Secretary shall issue an order, stating the facts charged, 
citing such person to show cause why his permit should not 
be suspended or revoked. 
‘‘(2) ACTION FOLLOWING HEARING.—If, after hearing, the 
Secretary finds that such person has not shown cause why 
his permit should not be suspended or revoked, such permit 
Order. 
26 USC 5713. 
26 USC 5712. 
26 USC 5702 
note. 
26 USC 5702. 
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123 STAT. 110 
PUBLIC LAW 111–3—FEB. 4, 2009 
shall be suspended for such period as the Secretary deems 
proper or shall be revoked.’’. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall take effect on the date of the enactment of this 
Act. 
(c) APPLICATION
OF INTERNAL REVENUE CODE STATUTE
OF 
LIMITATIONS FOR ALCOHOL AND TOBACCO EXCISE TAXES.— 
(1) IN GENERAL.—Section 514(a) of the Tariff Act of 1930 
(19 U.S.C. 1514(a)) is amended by striking ‘‘and section 520 
(relating to refunds)’’ and inserting ‘‘section 520 (relating to 
refunds), and section 6501 of the Internal Revenue Code of 
1986 (but only with respect to taxes imposed under chapters 
51 and 52 of such Code)’’. 
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall apply to articles imported after the date of the 
enactment of this Act. 
(d) EXPANSION OF DEFINITION OF ROLL-YOUR-OWN TOBACCO.— 
(1) IN GENERAL.—Section 5702(o) of the Internal Revenue 
Code of 1986 is amended by inserting ‘‘or cigars, or for use 
as wrappers thereof’’ before the period at the end. 
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall apply to articles removed (as defined in section 
5702(j) of the Internal Revenue Code of 1986) after March 
31, 2009. 
(e) TIME OF TAX FOR UNLAWFULLY MANUFACTURED TOBACCO 
PRODUCTS.— 
(1) IN
GENERAL.—Section 5703(b)(2) of such Code is 
amended by adding at the end the following new subparagraph: 
‘‘(F) SPECIAL RULE FOR UNLAWFULLY MANUFACTURED 
TOBACCO PRODUCTS.—In the case of any tobacco products, 
cigarette paper, or cigarette tubes manufactured in the 
United States at any place other than the premises of 
a manufacturer of tobacco products, cigarette paper, or 
cigarette tubes that has filed the bond and obtained the 
permit required under this chapter, tax shall be due and 
payable immediately upon manufacture.’’. 
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall take effect on the date of the enactment of this 
Act. 
(f) DISCLOSURE.— 
(1) IN GENERAL.—Paragraph (1) of section 6103(o) of such 
Code is amended by designating the text as subparagraph 
(A), moving such text 2 ems to the right, striking ‘‘Returns’’ 
and inserting ‘‘(A)
IN
GENERAL.—Returns’’, and by inserting 
after subparagraph (A) (as so redesignated) the following new 
subparagraph: 
‘‘(B) USE
IN
CERTAIN
PROCEEDINGS.—Returns and 
return information disclosed to a Federal agency under 
subparagraph (A) may be used in an action or proceeding 
(or in preparation for such action or proceeding) brought 
under section 625 of the American Jobs Creation Act of 
2004 for the collection of any unpaid assessment or penalty 
arising under such Act.’’. 
(2) CONFORMING AMENDMENT.—Section 6103(p)(4) of such 
Code is amended by striking ‘‘(o)(1)’’ both places it appears 
and inserting ‘‘(o)(1)(A)’’. 
26 USC 6103. 
26 USC 5703 
note. 
26 USC 5703. 
26 USC 5702 
note. 
26 USC 5702. 
19 USC 1514 
note. 
26 USC 5712 
note. 
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123 STAT. 111 
PUBLIC LAW 111–3—FEB. 4, 2009 
LEGISLATIVE HISTORY—H.R. 2 (S. 275): 
CONGRESSIONAL RECORD, Vol. 155 (2009): 
Jan. 14, considered and passed House. 
Jan. 26–29, considered and passed Senate, amended. 
Feb. 4, House concurred in Senate amendment. 
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 44 (2009): 
Feb. 4, Presidential remarks. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply on or after the date of the enactment of 
this Act. 
(g) TRANSITIONAL RULE.—Any person who— 
(1) on April 1, 2009 is engaged in business as a manufac-
turer of processed tobacco or as an importer of processed 
tobacco, and 
(2) before the end of the 90-day period beginning on such 
date, submits an application under subchapter B of chapter 
52 of such Code to engage in such business, may, notwith-
standing such subchapter B, continue to engage in such busi-
ness pending final action on such application. Pending such 
final action, all provisions of such chapter 52 shall apply to 
such applicant in the same manner and to the same extent 
as if such applicant were a holder of a permit under such 
chapter 52 to engage in such business. 
SEC. 703. TREASURY STUDY CONCERNING MAGNITUDE OF TOBACCO 
SMUGGLING IN THE UNITED STATES. 
Not later than one year after the date of the enactment of 
this Act, the Secretary of the Treasury shall conduct a study con-
cerning the magnitude of tobacco smuggling in the United States 
and submit to Congress recommendations for the most effective 
steps to reduce tobacco smuggling. Such study shall also include 
a review of the loss of Federal tax receipts due to illicit tobacco 
trade in the United States and the role of imported tobacco products 
in the illicit tobacco trade in the United States. 
SEC. 704. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES. 
The percentage under subparagraph (C) of section 401(1) of 
the Tax Increase Prevention and Reconciliation Act of 2005 in 
effect on the date of the enactment of this Act is increased by 
0.5 percentage point. 
Approved February 4, 2009. 
26 USC 6655 
note. 
Applicability. 
26 USC 5711 
note. 
26 USC 6103 
note. 
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