To reinstate the crowd out policy agreed to in section 116 of H.R. 3963 (CHIPRA II), as agreed to and passed by the House and Senate.

TEXT OF AMENDMENTS

SA 39. Mr. REID (for Mr. Baucus) proposed an amendment to the bill
H.R. 2, to amend title XXI of the Social Security Act to extend and
improve the Children's Health Insurance Program, and for other
purposes; as follows:

Strike all after the enacting clause and insert the
following:

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 otherwise
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.
Sec. 112. Phase-out of coverage for nonpregnant childless adults under
CHIP; conditions for coverage of parents.
Sec. 113. Elimination of counting Medicaid child presumptive
eligibility costs against title XXI allotment.

[[Page S901]]

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
enrollment.
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 eligibility 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 Medicaid or CHIP.
Sec. 402. Improved availability of public information regarding
enrollment of children 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 Federally-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 expenditures.

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
extraordinary employer pension contribution.
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
LEGISLATION; 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
appropriations 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--
(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 allotment
increase factor determined under paragraph (5) for fiscal
year 2009.

[[Page S902]]

``(ii) The amount allotted to the State for fiscal year
2008 under subsection (b), multiplied by the allotment
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 determined 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 paragraph
(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),
multiplied by the allotment increase factor under paragraph
(5) for fiscal year 2011.
``(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 paragraph
(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 Reauthorization 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, multiplied 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 subsection
(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
``(II) the amount made available under subsection
(a)(16)(B).

``(4) Proration rule.--If, after the application of this
subsection without regard to this paragraph, the sum of the
allotments 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 paragraph for such
fiscal year that specifies--
``(i) the additional expenditures that are attributable to
the eligibility or benefit expansion provided under the
amendment or waiver described in subparagraph (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 expenditures 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
subparagraph (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
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
available without further appropriations for payments under
this subsection.
``(2) Deposits into fund.--
``(A) Initial and subsequent appropriations.--Subject to
subparagraphs (B) and (D), out of any money in the Treasury
of the United States not otherwise appropriated, 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 constitutes a part of
the Fund.

[[Page S903]]

``(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 it
receives under subsection (f) that is available for
expenditure 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 pursuant
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 Secretary 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 population growth factor
described in subsection (m)(5)(B) for the State for the prior
fiscal year.
``(C) Projected per capita expenditures.--For purposes 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 Federal
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 projected 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 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 territories.--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 commonwealth's or territory's
eligibility for, and amount of payment, under this
paragraph.''.

SEC. 104. CHIP PERFORMANCE BONUS PAYMENT TO OFFSET ADDITIONAL
ENROLLMENT COSTS RESULTING FROM ENROLLMENT 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 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 baseline 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 children 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 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 expenditures.--
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

[[Page S904]]

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 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 subsection (a) for such fiscal
year that is unobligated 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 subsection (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 subsection (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 preceding
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 contingency 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
Enrollment 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 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 criteria (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 pursuant to a waiver under section 1115.
``(ii) Limitation.--A child described in clause (i) who is
provided medical assistance during a presumptive 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 territories.--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 Medicaid
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 Reauthorization 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 children.--
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 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 following
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 assistance 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 requirement.--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 children 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 construed as preventing a State from verifying,
through electronic and other means, the information so
provided.
``(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 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

[[Page S905]]

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
following:
``(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 shortfall
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
Secretary, 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 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 paragraph (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
``Notwithstanding 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 expenditures 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 additional 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 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
accompany 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.''.

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
PREGNANT 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
subsection (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 targeted
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
for pregnancy-related assistance based on any preexisting
condition 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 section 2103(e) and applies the limitation on total
annual aggregate cost sharing imposed under paragraph (3)(B)
of such section to the family of such a woman.
``(7) No waiting list for children.--The State does not
impose, with respect to the

[[Page S906]]

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 consideration 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
conditions 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 `pregnancy-
related assistance' has the meaning given the term `child
health assistance' in section 2110(a) with respect to an
individual 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
pregnancy-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 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
paragraph (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
following: ``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 provided pregnancy-related
assistance under section 2112.''.

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 otherwise
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 continue
coverage for nonpregnant childless adults.--
``(A) In general.--Each State for which coverage under an
applicable existing waiver is terminated under paragraph
(2)(A) may submit, not later than September 30, 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 September 30, 2009, the
application shall be deemed approved.
``(C) Standard for budget neutrality.--The budget
neutrality requirement applicable with respect to
expenditures for medical assistance under a Medicaid
nonpregnant childless adults waiver shall--
``(i) in the case of fiscal year 2010, allow expenditures
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.--

[[Page S907]]

``(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 paragraphs (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.
``(B) Extension upon state request.--If an applicable
existing waiver described in subparagraph (A) would otherwise
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 allotment.--If the
State makes an election under subparagraph (A), the Secretary
shall set aside for the State for each such fiscal year an
amount equal to the Federal 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
certified 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 section 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 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 assistance or health
benefits coverage to a parent of a targeted low-income child
whose family income exceeds the income eligibility level
applied under the applicable existing waiver to parents of
targeted low-income children 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 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
section--
``(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 `nonpregnant
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 pregnant, 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 paragraph:
``(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 Reauthorization Act of
2009, nothing''.
(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--

[[Page S908]]

(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 PROPOSE
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 poverty line.--
``(A) FMAP applied to expenditures.--Except as provided in
subparagraph (B), for fiscal years beginning with fiscal year
2009, the Federal medical assistance percentage (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 provide, 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
methodologies 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 Security 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 Campaign.--
``(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
efforts that are designed to increase the enrollment and
participation 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
accordance 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 disparity
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
appropriated 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 information, as the Secretary may decide.
Such application shall include--
``(1) evidence demonstrating that the entity includes
members 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--
``(1) make publicly available the enrollment data and
information collected and reported in accordance with
subsection (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
State Match Required.--In the case of a State that is awarded
a grant under this section--
``(1) 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; and
``(2) no State matching funds shall be required for the
State to receive a grant under this section.
``(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 provider.
``(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 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).

[[Page S909]]

``(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
effectively communicate with health care providers;
``(D) by providing culturally and linguistically
appropriate 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 appropriated 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 established 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
systems 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
awareness campaigns administered by the Secretary;
``(3) increased financial and technical support for
enrollment 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
proficiency; and
``(6) such other outreach initiatives as the Secretary
determines would increase public awareness of the programs
under this title and title XIX.''.
(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 necessary 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
interpretation 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 outreach
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 Outreach
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 into agreements with the Indian Health
Service, Indian Tribes, Tribal Organizations, and Urban
Indian Organizations to provide 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
Secretary, acting through the Centers for Medicare & Medicaid
Services, 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
Program; Tribal Organization; Urban Indian Organization.--In
this section, the terms `Indian', `Indian Tribe', `Indian
Health Program', `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 activities 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 (as defined in
subparagraph (F)) when it determines whether a child
satisfies one or more components of eligibility for medical
assistance under this title. The State may rely on a finding
from an Express Lane agency notwithstanding 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 ineligible 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 procedures for requesting such an evaluation.
``(III) Compliance with screen and enroll requirement.--The
State shall satisfy the requirements 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
requirements 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 redeterminations.--
The State may apply the

[[Page S910]]

provisions of this paragraph 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
determining 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)
concerning 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
eligibility for medical assistance under this title or for
child health assistance under title XXI has been evaluated by
a State agency using an income finding from an Express Lane
agency, a State may carry out its duties under subparagraphs
(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 eligibility 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 section 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 assistance under
this title using such regular procedures.
``(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 covered 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.
``(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 medical assistance under this
title or child health assistance under title XXI pursuant to
subparagraphs (A) and (B) of section 2102(b)(3) (relating to
screen and enroll).
``(IV) Requirement for simplified determination.--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 determine
eligibility for medical assistance under the State Medicaid
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 and 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 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 paragraph;
``(II) annually provide the Secretary with a statistically
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 eligibility 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 enrollment of such children (and shall not
include such children 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 subclause
(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 satisfaction 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 payable to the State under
section 1903(a) for quarters for that fiscal year, equal to
the total amount of erroneous 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 paragraph
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 permitted 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 payments 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 eligibility determinations
are made under this paragraph and 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 disclosed 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:

[[Page S911]]

``(aa) The temporary assistance for needy families 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.
``(III) A public agency that is subject to an interagency
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 paragraph
shall be construed as--
``(I) exempting a State Medicaid agency from complying 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 Medicaid 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 administering 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 Medicaid 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) 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.--
(1) Evaluation.--The Secretary shall conduct, by grant,
contract, or interagency agreement, a comprehensive,
independent evaluation of the option provided under the
amendments 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 administrative
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 represents 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 Government
Paperwork Elimination Act (44 U.S.C. 3504 note). The
requirements 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.--
(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 provided 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
purposes of--
``(A) identifying individuals who are eligible or
potentially 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
modification of such data and otherwise meets applicable
Federal 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
provisions 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 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
requirements 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).''.

[[Page S912]]

(3) Conforming amendment to provide access to data about
enrollment in insurance for purposes of evaluating
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 Determining
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 relevant 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
MEDICAID AND CHIP.

(a) Alternative State Process for Verification of
Declaration of Citizenship or Nationality for Purposes of
Eligibility 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)--

(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 subsection:
``(ee)(1) For purposes of subsection (a)(46)(B)(ii), the
requirements 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 citizenship 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 citizenship 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 citizenship or
nationality (as defined in section 1903(x)(3)) or resolve the
inconsistency with the Commissioner of Social Security (and
continues to provide the individual 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 presented 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 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 Commissioner.
``(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
information 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
burdensome 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
provide 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 subparagraph, 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 citizenship status and did not successfully
resolve such inconsistency; and
``(iv) payment has been made for an item or service
furnished 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
individuals 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
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 information
retrieval systems as the Secretary determines are necessary
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

[[Page S913]]

(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 Commissioner's responsibilities under section 1902(ee) of
the Social Security Act, as added by subsection (a).
(b) Clarification of Requirements Relating to Presentation
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
(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
membership 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 individual shall be provided at least
the reasonable opportunity to present satisfactory
documentary evidence of citizenship or nationality 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 evidence 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 paragraph:
``(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 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 identification
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 subsection (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.
(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 division 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
individual 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 subsections, 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
individual who is a member of a federally-recognized Indian
tribe described in subclause (II) of that section who
presents a document described in subclause (I) of such
section that is issued by such Indian tribe, shall be deemed
to have presented satisfactory 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
paragraph:
``(4) Reduction of administrative barriers to enrollment.--
``(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 children 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 procedures 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 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 beneficiaries, shall develop a model
process for the coordination of the enrollment, retention,
and coverage under such programs of

[[Page S914]]

children who, because of migration of families, emergency
evacuations, natural 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, retention, 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.
``(C) A State shall demonstrate that the State requires an
individual provided medical assistance as a result of an
election by the State under subparagraph (A), to provide the
State, as part of the State's ongoing eligibility
redetermination requirements and procedures, with
documentation or other evidence 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
redesignating 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 premium
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 provided 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 assistance.
``(B) Qualified employer-sponsored coverage.--
``(i) In general.--Subject to clause (ii), in this
paragraph, the term `qualified employer-sponsored coverage'
means a group health plan or health insurance coverage
offered through an employer--

``(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 nondiscriminatory 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 coverage
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 `premium
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 contribution 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 coverage 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, subject 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-
sponsored 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 described in paragraph
(1)(C) of subsection (a) for purposes 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 coverage for
benefits and cost-sharing protection provided 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-sponsored 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 purposes of
carrying out clause (i), a State may elect to directly pay
out-of-pocket expenditures for cost-sharing imposed under the
qualified employer-sponsored 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 parents 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 paragraph 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
``(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

[[Page S915]]

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 equivalent 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 administrative
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 programs.--
Nothing in this paragraph shall be construed as limiting the
authority of a State to offer premium assistance 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 enactment of the
Children's Health Insurance Program Reauthorization Act of
2009.
``(K) Notice of availability.--If a State elects to provide
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 enrollment
process under the State child health plan, information
describing the availability of such subsidies 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 assistance
under the State child health plan or through the receipt of
premium assistance subsidies.
``(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 coverage 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 paragraph for enrollment in qualified employer-
sponsored coverage, but without regard to the requirement to
provide supplemental coverage for benefits and cost-sharing
protection provided under the State child health plan under
subparagraph (E).
``(M) Satisfaction of cost-effectiveness test.--Premium
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 expenditures, that the
State would have made to provide comparable 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 children or families.''.
(B) Nonapplication to previously approved coverage.--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 qualified employer-sponsored coverage (as defined in
subsection (b)) to 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
paragraph, 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
determined without regard to clause (i) of subparagraph (B)
of such paragraph).
``(2) Exception.--Such term does not include coverage
consisting 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 coverage 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 assistance.
``(d) Voluntary Participation.--
``(1) Employers.--Participation by an employer in a premium
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 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
participation 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 individual'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
programs 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,
Education, and Enrollment Efforts Related to Premium
Assistance 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 families 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.''.

[[Page S916]]

(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 children likely to be eligible for
premium assistance subsidies 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 employers likely to provide qualified employer-
sponsored 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
PURCHASE OF EMPLOYMENT-BASED COVERAGE;
COORDINATION OF COVERAGE.

(a) Amendments to Internal Revenue Code of 1986.--Section
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 coverage.--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 availability of
medicaid and chip coverage.--

``(I) In general.--Each employer that maintains 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 potential 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
concurrent 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 benefits to
states for medicaid and chip eligible individuals.--In the
case of a participant or beneficiary 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
Program 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 Security Act or
otherwise) concerning 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
supplemental benefits required under paragraph (10)(E) of
such section or other authority.''.
(b) Conforming Amendments.--
(1) Amendments to employee retirement income security
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 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 coverage.--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 coverage, 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 availability of
medicaid and chip coverage.--

``(I) In general.--Each employer that maintains 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 potential 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 Directors
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 notices for purposes of subparagraph (A). The
Secretary 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 premium
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
concurrent 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 benefits to
states for medicaid and chip eligible individuals.--In the
case of a participant or beneficiary 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
Program 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 Security Act or
otherwise) concerning the cost-effectiveness of the State
providing medical or child health assistance through

[[Page S917]]

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 complying with
section 701(f)(3)(B)(i), the model notice applicable to the
State in which the participants and beneficiaries reside''.
(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 coverage 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 disclosure 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 coverage 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 coverage under the
plan.
(ii) Membership.--The Working Group shall consist of not
more than 30 members and shall be composed 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;
(V) employers, including owners of small businesses and
their trade or industry representatives 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 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.

(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 without reimbursement, as jointly determined by such
Departments.
(v) Report.--

(I) Report by working group to the secretaries.--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 measures 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 congress.--Not later than
2 months after receipt of the report pursuant to subclause
(I), the Secretaries 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 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 information required to be disclosed under section
701(f)(3)(B)(ii). For purposes 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 coverage.--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 coverage, 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 availability of
medicaid and chip coverage.--

``(I) In general.--Each employer that maintains 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 potential 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
concurrent 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 benefits to
states for medicaid and chip eligible individuals.--In the
case of an enrollee in a group health plan who is covered

[[Page S918]]

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
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 Security Act or otherwise)
concerning 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 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
following 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
consultation with the individuals and entities described in
subsection (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 publish
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 coverage
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 conditions that could
adversely affect growth and development; and
``(ii) treatments to correct or ameliorate the effects of
physical and mental conditions, including chronic conditions,
in infants, young children, school-age children, 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 care quality
and racial, ethnic, and socioeconomic disparities 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 information 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 efficiency 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 children, 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 socioeconomic 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--
``(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 providers
to understand the quality of care in relation to the
preventive needs of children, treatments aimed at managing
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 Measures.--
``(1) Establishment of pediatric quality measures
program.--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
minimum, 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
primary and specialized pediatric health care professionals
(including members of the allied health professions) who
specialize in the care and treatment of children,
particularly children with special physical, mental, and
developmental health care needs;
``(C) dental professionals, including pediatric dental
professionals;
``(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 expertise
in pediatric health quality measurement; and
``(H) voluntary consensus standards setting organizations
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

[[Page S919]]

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 recommended
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 pediatric 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
construed as supporting the restriction of coverage, under
title XIX or XXI or otherwise, to only those services that
are evidence-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--
``(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 Information
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
demonstration 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
conditions and the use of evidence-based approaches to
improve the effectiveness, safety, and efficiency of health
care services for children; or
``(D) demonstrate the impact of the model electronic health
record format for children developed and disseminated 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
subsection, 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 demonstration
project conducted with a grant awarded under this subsection
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.
``(e) Childhood Obesity Demonstration Project.--
``(1) Authority to conduct demonstration.--The Secretary,
in consultation with the Administrator of the Centers for
Medicare & Medicaid Services, shall conduct a demonstration
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, satisfaction,
quality of life, and appropriate use of items and services
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 services, to
establish programs for after school and weekend community
activities that are designed to reduce childhood obesity;
``(ii) forming partnerships with daycare facilities to
establish programs that promote healthy eating behaviors and
physical activity; and
``(iii) developing and evaluating community educational
activities targeting good nutrition and promoting 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--

``(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 development, positive self-esteem development, and
learning life skills (such as stress management,
communication skills, problemsolving and decisionmaking
skills), as well as consideration of cultural and
developmental issues, and the role of family, school, and
community;

``(ii) providing education and training to educational
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 physical
activity services to treat or prevent eating disorders, 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 identify
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--
``(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

[[Page S920]]

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
underserved, 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 community
colleges;
``(vii) health care providers;
``(viii) State and local departments of transportation 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 Program
Reauthorization Act of 2009, the Secretary shall design the
demonstration project. The demonstration should draw upon
promising, innovative models and incentives 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 appropriate, on the design, conduct, and evaluation of
the demonstration.
``(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 Secretary
shall award 1 grant that is specifically designed to
determine whether programs similar to programs to be
conducted by other grantees under this subsection should be
implemented with respect to the general population of
children who are eligible for child health assistance 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 support to
the individual as the Secretary determines appropriate.
``(D) Ongoing support.--The term `ongoing support' means--
``(i) to provide any target individual with information,
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 authorized
to be appropriated to carry out this subsection, $25,000,000
for the period of fiscal years 2009 through 2013.
``(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
development 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,
caregivers, and other consumers for the sole purpose of
demonstrating 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 requirements
under Federal grant programs and national population 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 covered by each
system, and the extent to which the information so generated
is made widely available through publication;
``(C) identify gaps in knowledge related to children's
health status, health disparities among subgroups of
children, 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
``(D) make recommendations regarding improving and
strengthening the timeliness, quality, and public
transparency and accessibility of information about child
health and health care quality.
``(2) Funding.--Up to $1,000,000 of the amount appropriated
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
developed, 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

[[Page S921]]

to continuity of coverage or duration 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
measures such as 12-month continuous eligibility, self-
declaration of income for applications or renewals, or
presumptive eligibility.
``(3) Data regarding denials of eligibility and
redeterminations of eligibility.
``(4) Data regarding access to primary and specialty
services, access to networks of care, and care coordination
provided under the State child health plan, using quality
care and consumer satisfaction measures included in the
Consumer Assessment 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
assistance, 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 insurance 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
standardized 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
specified by the Secretary under paragraph (1).
(c) Additional Funding for the Secretary To Improve
Timeliness of Data Reporting and Analysis for Purposes of
Determining 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 requirements
related to such improvements. Amounts appropriated under this
paragraph shall remain available until expended.
(2) Requirements.--The improvements made by the Secretary
under paragraph (1) shall be designed and implemented
(including with respect to any necessary guidance for States
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
Speciality 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
availability of services for children under such programs.
(2) Report.--Not later than 2 years after the date of
enactment 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 recommendations 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
SAFEGUARDS 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 managed 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.--
(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 requirement 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 frequently by employees seeking
dependent coverage, among such plans that provide such
dependent coverage, in either of the previous 2 plan years.
``(ii) State employee dependent dental coverage.--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 paragraphs (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
paragraph (5),'' after ``under title XIX or''; and
(B) by adding at the end the following new paragraph:
``(5) State option 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 paragraph (1)(C), satisfy
the requirements for being a targeted low-income child under
the State child health plan, a State may waive the
application of such paragraph to the child in order to
provide--
``(i) dental coverage consistent with the requirements of
subsection (c)(5) of section 2103; or
``(ii) cost-sharing protection for dental coverage
consistent with such requirements and the requirements 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 maximum 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:

[[Page S922]]

``(i) Income eligibility.--The State child health plan
(whether implemented under title XIX or 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 applications for
children or impose any numerical limitation, waiting list, or
similar limitation on the eligibility 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 coverage 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).''.
(3) Application of enhanced match under medicaid.--Section
1905 (42 U.S.C. 1396d) is amended--
(A) in subsection (b), in the fourth sentence, by striking
``or subsection (u)(3)'' and inserting ``, (u)(3), or
(u)(4)''; and
(B) in subsection (u)--
(i) by redesignating paragraph (4) as paragraph (5); and
(ii) by inserting after paragraph (3) the following new
paragraph:
``(4) For purposes of subsection (b), the expenditures
described in this paragraph are expenditures for dental-only
supplemental coverage for children described in section
2110(b)(5).''.
(c) Dental Education for Parents of Newborns.--The
Secretary 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
relationships 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 subparagraphs
accordingly):
``(C) Section 1902(a)(72) (relating to limiting FQHC
contracting for provision of dental services).''.
(3) Effective date.--The amendments made by this subsection
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 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 subsection
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 networks of
care, including such networks that serve special 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 qualified
mid-level dental health providers, in coordination with
dentists, to improve access for children to oral health
services 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
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 treatment
limitations applicable to such mental health or substance 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.

[[Page S923]]

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
subparagraph (and redesignating the succeeding subparagraphs
accordingly):
``(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
Secretary for fiscal year 2009, $5,000,000, to remain
available 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
expenditures related to transitioning to compliance with the
requirement 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
benefits 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:
``(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 subparagraph
(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 established
under this title (in this section referred to as `Medicaid')
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.
``(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, physician,
Federally-qualified health center, rural health center, and
other fees;
``(ii) payment methodologies; and
``(iii) the relationship of such factors and methodologies
to access and quality of care for Medicaid and CHIP
beneficiaries.
``(B) Interaction of medicaid and chip payment policies
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 Medicaid
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
Medicaid 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 additional 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.
``(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
recommendation.
``(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 composed 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

[[Page S924]]

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, reimbursement 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 individuals
with expertise in the delivery of health services. Such
membership shall also include consumers representing
children, pregnant women, the elderly, and individuals with
disabilities, current or former representatives of State
agencies 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 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
allowance by MACPAC in the same manner as Government
physicians 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.--Subject
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
provisions 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
necessary with respect to the internal organization and
operation of MACPAC.
``(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
Comptroller General of the United States submits requests for
appropriations, but amounts appropriated for MACPAC shall be
separate from amounts appropriated for the Comptroller
General of the United States.
``(2) Authorization.--There are authorized to be
appropriated such sums as may be necessary to carry out the
provisions 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
Payment 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.

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 Requirements.--
(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 subsection
(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 expenditures.--
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 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).''.
(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'') requirements 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--
(A) clearly defined criteria for errors for both States and
providers;
(B) a clearly defined process for appealing error
determinations by--

[[Page S925]]

(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 evaluation 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-certification 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 subsection
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 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 practicable--
(1) minimize the administrative cost burden on States under
Medicaid and CHIP; and
(2) maintain State flexibility to manage such programs.

SEC. 602. IMPROVING DATA COLLECTION.

(a) Increased Appropriation.--Section 2109(b)(2) (42 U.S.C.
1397ii(b)(2)) is amended by striking ``$10,000,000 for fiscal
year 2000'' and inserting ``$20,000,000 for fiscal year
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 section
2104(m)(5)(B) and any other data necessary for carrying out
this title.
``(C) Include health insurance survey information in the
American Community Survey related to children.
``(D) Assess whether American Community Survey estimates,
once such survey data are first available, produce more
reliable estimates than the Current Population Survey with
respect to the purposes described in subparagraph (B).
``(E) On the basis of the assessment required under
subparagraph (D), recommend to the Secretary of Health and
Human Services whether American Community Survey estimates
should be used in lieu of, or in some combination with,
Current Population Survey estimates for the purposes
described in subparagraph (B).
``(F) Continue making the adjustments described in the last
sentence of paragraph (1) with respect to expansion of the
sample size used in State sampling units, the number of
sampling units in a State, and using an appropriate
verification element.
``(3) Authority for the secretary of health and human
services to transition to the use of all, or some combination
of, acs estimates upon recommendation of the secretary 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 consultation 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 estimates 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 information.--
``(A) In general.--The Secretary, directly or through
contracts or interagency agreements, shall conduct an
independent 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 paragraph.
``(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
EVALUATIONS.

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
Evaluations.--For the purpose of evaluating and auditing the
program established under this title, or title XIX, the
Secretary, the Office of Inspector General, and the
Comptroller General shall have access to any books, accounts,
records, correspondence, and other documents 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
subdivisions thereof, or any grantee or contractor of such
States or political subdivisions.''.

SEC. 605. NO FEDERAL FUNDING FOR ILLEGAL ALIENS; DISALLOWANCE
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 Services
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 provision of
this title'' and inserting ``Notwithstanding section
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 subsection
(E)''; and
(ii) by striking ``enrollment in coverage that provides''
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

[[Page S926]]

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 paragraph
shall be construed as--
``(i) requiring a State to offer all or any of the items
and services required by subparagraph (A)(ii) through an
issuer of benchmark coverage described in subsection (b)(1)
or benchmark equivalent coverage described in subsection
(b)(2);
``(ii) preventing a State from offering all or any of the
items and services required by subparagraph (A)(ii) through
an issuer of benchmark coverage described in subsection
(b)(1) or benchmark equivalent coverage described in
subsection (b)(2); or
``(iii) affecting a child's entitlement to care and
services described in subsections (a)(4)(B) and (r) of
section 1905 and provided in accordance with section
1902(a)(43) whether provided through benchmark coverage,
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
accordance 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
demonstration programs under section 1938 of the Social
Security Act (42 U.S.C. 1396u-8).

SEC. 614. ADJUSTMENT IN COMPUTATION OF MEDICAID FMAP TO
DISREGARD AN EXTRAORDINARY EMPLOYER PENSION
CONTRIBUTION.

(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 employer pension or insurance fund
contribution described in subsection (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
significantly 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
Secretary 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 contribution
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 mitigate 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
Secretary 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;
(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 TENNESSEE
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
Providers 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
Representatives analyzing the extent to which State payment
rates for medicaid managed care organizations under Medicaid
are actuarially sound.

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
established 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));

[[Page S927]]

(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
established 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-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 programs;
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 business
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
Insurance 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 Committee on Small
Business of the House of Representatives a report on the
status of the nationwide campaign conducted under paragraph
(1).
(B) Contents.--Each report submitted under subparagraph (A)
shall include a status update on all efforts made to educate
owners and employees of small business concerns 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.
(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
coverage 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
incentives, 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
paragraph (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''.
(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 products,
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 paragraph (1)
shall be paid in such manner as the Secretary shall prescribe
by regulations.
(C) Time for payment.--The tax imposed by paragraph (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 supervision
of an officer of the United States Customs and Border
Protection of the Department of Homeland Security pursuant 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 Secretary
of the Treasury or the Secretary's delegate.
(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

[[Page S928]]

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 ultimate 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 Requirements
for Manufacturers and Importers of Processed Tobacco.--
(1) Permit.--
(A) Application.--Section 5712 of the Internal Revenue 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
manufacturer 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''.
(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 subsection
shall take effect on April 1, 2009.
(b) Basis for Denial, Suspension, or Revocation of
Permits.--
(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 compliance 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
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 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 shall
be suspended for such period as the Secretary deems proper or
shall be revoked.''.
(3) Effective date.--The amendments made by this subsection
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 subsection
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 subsection
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 subsection
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)''.
(3) Effective date.--The amendments made by this subsection
shall apply on or after the date of the enactment of this
Act.
(g) Transitional Rule.--Any person who--
(1) on April 1 is engaged in business as a manufacturer 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, notwithstanding
such subchapter B, continue to engage in such business
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
concerning 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.
______

SA 40. Mr. McCONNELL (for himself, Mr. Kyl, Mr. Vitter, Mr.
Chambliss, Mr. Bunning, Mr. Gregg, Mr. Coburn, Mr. Burr, Mr. Isakson,
Mr. Graham, Mr. Inhofe, Mr. Cornyn, Mr. Brownback, Mr. Cochran, Mr.
Ensign, Mr. Thune, Mr. DeMint, Mr. Bennett, Mr. Barrasso, Mr. Enzi, and
Mr. Wicker) proposed an amendment to amendment SA 39 proposed by Mr.
Reid (for Mr. Baucus) to the bill H.R. 2, to amend title XXI of the
Social Security Act to extend and improve the Children's Health
Insurance Program, and for other purposes; as follows:

[[Page S929]]

In lieu of the matter proposed to be inserted insert

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Kids First
Act''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Reauthorization through fiscal year 2013.
Sec. 3. Allotments for the 50 States and the District of Columbia based
on expenditures and numbers of low-income children.
Sec. 4. Limitations on matching rates for populations other than low-
income children or pregnant women covered through a
section 1115 waiver.
Sec. 5. Prohibition on new section 1115 waivers for coverage of adults
other than pregnant women.
Sec. 6. Standardization of determination of family income for targeted
low-income children under title XXI and optional targeted
low-income children under title XIX.
Sec. 7. Grants for outreach and enrollment.
Sec. 8. Improved State option for offering premium assistance for
coverage of children through private plans under SCHIP
and Medicaid.
Sec. 9. Treatment of unborn children.
Sec. 10. 50 percent matching rate for all Medicaid administrative
costs.
Sec. 11. Reduction in payments for Medicaid administrative costs to
prevent duplication of such payments under TANF.
Sec. 12. Elimination of waiver of certain Medicaid provider tax
provisions.
Sec. 13. Elimination of special payments for certain public hospitals.
Sec. 14. Effective date; coordination of funding for fiscal year 2009.

SEC. 2. REAUTHORIZATION THROUGH FISCAL YEAR 2013.

(a) Increase in National Allotment.--Section 2104 of the
Social Security Act (42 U.S.C. 1397dd(a)) is amended--
(1) in subsection (a)--
(A) by striking ``and'' at the end of paragraph (10);
(B) in paragraph (11)--
(i) by striking ``each of fiscal years 2008 and 2009'' and
inserting ``fiscal year 2008''; and
(ii) by striking the period at the end and inserting a
semicolon; and
(C) by adding at the end the following new paragraphs:
``(12) for fiscal year 2009, $7,780,000,000;
``(13) for fiscal year 2010, $8,044,000,000;
``(14) for fiscal year 2011, $8,568,000,000;
``(15) for fiscal year 2012, $9,032,000,000; and
``(16) for fiscal year 2013, $9,505,000,000.''; and
(2) in subsection (c)(4)(B), by striking ``2009'' and
inserting ``2008, $62,000,000 for fiscal year 2009,
$64,000,000 for fiscal year 2010, $68,000,000 for fiscal year
2011, $72,000,000 for fiscal year 2012, and $75,000,000 for
fiscal year 2013''.
(b) Repeal of Limitation on Availability of Funding for
Fiscal Years 2008 and 2009.--Section 201 of the Medicare,
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
173) is amended--
(1) in subsection (a), by striking paragraph (2) and
redesignating paragraphs (3) and (4), as paragraphs (2) and
(3) respectively; and
(2) in subsection (b), by striking paragraph (2).

SEC. 3. ALLOTMENTS FOR THE 50 STATES AND THE DISTRICT OF
COLUMBIA BASED ON EXPENDITURES AND NUMBERS OF
LOW-INCOME CHILDREN.

(a) In General.--Section 2104 of the Social Security Act
(42 U.S.C. 1397dd) is amended by adding at the end the
following new subsection:
``(m) Determination of Allotments for the 50 States and the
District of Columbia for Fiscal Years 2009 Through 2013.--
``(1) In general.--Notwithstanding the preceding provisions
of this subsection and subject to paragraph (3), the
Secretary shall allot to each subsection (b) State for each
of fiscal years 2009 through 2013, the amount determined for
the fiscal year that is equal to the product of--
``(A) the amount available for allotment under subsection
(a) for the fiscal year, reduced by the amount of allotments
made under subsection (c) (determined without regard to
paragraph (4) thereof) for the fiscal year; and
``(B) the sum of the State allotment factors determined
under paragraph (2) with respect to the State and weighted in
accordance with subparagraph (B) of that paragraph for the
fiscal year.
``(2) State allotment factors.--
``(A) In general.--For purposes of paragraph (1)(B), the
State allotment factors are the following:
``(i) The ratio of the projected expenditures for targeted
low-income children under the State child health plan and
pregnant women under a waiver of such plan for the fiscal
year to the sum of such projected expenditures for all States
for the fiscal year, multiplied by the applicable percentage
weight assigned under subparagraph (B).
``(ii) The ratio of the number of low-income children who
have not attained age 19 with no health insurance coverage in
the State, as determined by the Secretary on the basis of the
arithmetic average of the number of such children for the 3
most recent Annual Social and Economic Supplements to the
Current Population Survey of the Bureau of the Census
available before the beginning of the calendar year before
such fiscal year begins, to the sum of the number of such
children determined for all States for such fiscal year,
multiplied by the applicable percentage weight assigned under
subparagraph (B).
``(iii) The ratio of the projected expenditures for
targeted low-income children under the State child health
plan and pregnant women under a waiver of such plan for the
preceding fiscal year to the sum of such projected
expenditures for all States for such preceding fiscal year,
multiplied by the applicable percentage weight assigned under
subparagraph (B).
``(iv) The ratio of the actual expenditures for targeted
low-income children under the State child health plan and
pregnant women under a waiver of such plan for the second
preceding fiscal year to the sum of such actual expenditures
for all States for such second preceding fiscal year,
multiplied by the applicable percentage weight assigned under
subparagraph (B).
``(B) Assignment of weights.--For each of fiscal years 2009
through 2013, the following percentage weights shall be
applied to the ratios determined under subparagraph (A) for
each such fiscal year:
``(i) 40 percent for the ratio determined under
subparagraph (A)(i).
``(ii) 5 percent for the ratio determined under
subparagraph (A)(ii).
``(iii) 50 percent for the ratio determined under
subparagraph (A)(iii).
``(iv) 5 percent for the ratio determined under
subparagraph (A)(iv).
``(C) Determination of projected and actual expenditures.--
For purposes of subparagraph (A):
``(i) Projected expenditures.--The projected expenditures
described in clauses (i) and (iii) of such subparagraph with
respect to a fiscal year shall be determined on the basis of
amounts reported by States to the Secretary on the May 15th
submission of Form CMS-37 and Form CMS-21B submitted not
later than June 30th of the fiscal year preceding such year.
``(ii) Actual expenditures.--The actual expenditures
described in clause (iv) of such subparagraph with respect to
a second preceding fiscal year shall be determined on the
basis of amounts reported by States to the Secretary on Form
CMS-64 and Form CMS-21 submitted not later than November 30
of the preceding fiscal year.''.
(b) 2-Year Availability of Allotments; Expenditures Counted
Against Oldest Allotments.--Section 2104(e) of the Social
Security Act (42 U.S.C. 1397dd(e)) is amended to read as
follows:
``(e) Availability of Amounts Allotted.--
``(1) In general.--Except as provided in the succeeding
paragraphs of this subsection, 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 each of fiscal years 2009 through 2013, shall
remain available for expenditure by the State only through
the end of the fiscal year succeeding the fiscal year for
which such amounts are allotted.
``(2) Elimination of redistribution of allotments not
expended within 3 years.--Notwithstanding subsection (f),
amounts allotted to a State under this section for fiscal
years beginning with fiscal year 2009 that remain unexpended
as of the end of the fiscal year succeeding the fiscal year
for which the amounts are allotted shall not be redistributed
to other States and shall revert to the Treasury on October 1
of the third succeeding fiscal year.
``(3) Rule for counting expenditures against fiscal year
allotments.--Expenditures under the State child health plan
made on or after April 1, 2009, shall be counted against
allotments for the earliest fiscal year for which funds are
available for expenditure under this subsection.''.
(c) Conforming Amendments.--
(1) Section 2104(b)(1) of the Social Security Act (42
U.S.C. 1397dd(b)(1)) is amended by striking ``subsection
(d)'' and inserting ``the succeeding subsections of this
section''.
(2) Section 2104(f) of such Act (42 U.S.C. 1397dd(f)) is
amended by striking ``The'' and inserting ``Subject to
subsection (e)(2), the''.

SEC. 4. LIMITATIONS ON MATCHING RATES FOR POPULATIONS OTHER
THAN LOW-INCOME CHILDREN OR PREGNANT WOMEN
COVERED THROUGH A SECTION 1115 WAIVER.

(a) Limitation on Payments.--Section 2105(c) of the Social
Security Act (42 U.S.C. 1397ee(c)) is amended by adding at
the end the following new paragraph:
``(8) Limitations on matching rate for populations other
than targeted low-income children or pregnant women covered
through a section 1115 waiver.--For child health assistance
or health benefits coverage furnished in any fiscal year
beginning with fiscal year 2010:
``(A) FMAP applied to payments for coverage of children or
pregnant women covered through a section 1115 waiver enrolled
in the state child health plan on the date of enactment of
the kids first act and whose gross family income is
determined to exceed the income eligibility

[[Page S930]]

level specified for a targeted low-income child.--
Notwithstanding subsections (b)(1)(B) and (d) of section
2110, in the case of any individual described in subsection
(c) of section 105 of the Kids First Act who the State elects
to continue to provide child health assistance for under the
State child health plan in accordance with the requirements
of such subsection, the Federal medical assistance percentage
(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 such assistance.
``(B) FMAP applied to payments only for nonpregnant
childless adults and parents and caretaker relatives enrolled
under a section 1115 waiver on the date of enactment of the
kids first act.--The Federal medical assistance percentage
(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 payments for
child health assistance or health benefits coverage provided
under the State child health plan for any of the following:
``(i) Parents or caretaker relatives enrolled under a
waiver on the date of enactment of the kids first act.--A
nonpregnant parent or a nonpregnant caretaker relative of a
targeted low-income child who is enrolled in the State child
health plan under a waiver, experimental, pilot, or
demonstration project on the date of enactment of the Kids
First Act and whose family income does not exceed the income
eligibility applied under such waiver with respect to that
population on such date.
``(ii) Nonpregnant childless adults enrolled under a waiver
on such date.--A nonpregnant childless adult enrolled in the
State child health plan under a waiver, experimental, pilot,
or demonstration project described in section 6102(c)(3) of
the Deficit Reduction Act of 2005 (42 U.S.C. 1397gg note) on
the date of enactment of the Kids First Act and whose family
income does not exceed the income eligibility applied under
such waiver with respect to that population on such date.
``(iii) No replacement enrollees.--Nothing in clauses (i)
or (ii) shall be construed as authorizing a State to provide
child health assistance or health benefits coverage under a
waiver described in either such clause to a nonpregnant
parent or a nonpregnant caretaker relative of a targeted low-
income child, or a nonpregnant childless adult, who is not
enrolled under the waiver on the date of enactment of the
Kids First Act.
``(C) No federal payment for any new nonpregnant adult
enrollees or for such enrollees who no longer satisfy income
eligibility requirements.--Payment shall not be made under
this section for child health assistance or other health
benefits coverage provided under the State child health plan
or under a waiver under section 1115 for any of the
following:
``(i) Parents or caretaker relatives under a section 1115
waiver approved after the date of enactment of the kids first
act.--A nonpregnant parent or a nonpregnant caretaker
relative of a targeted low-income child under a waiver,
experimental, pilot, or demonstration project that is
approved on or after the date of enactment of the Kids First
Act.
``(ii) Parents, caretaker relatives, and nonpregnant
childless adults whose family income exceeds the income
eligibility level specified under a section 1115 waiver
approved prior to the kids first act.--Any nonpregnant parent
or a nonpregnant caretaker relative of a targeted low-income
child whose family income exceeds the income eligibility
level referred to in subparagraph (B)(i), and any nonpregnant
childless adult whose family income exceeds the income
eligibility level referred to in subparagraph (B)(ii).
``(iii) Nonpregnant childless adults, parents, or caretaker
relatives not enrolled under a section 1115 waiver on the
date of enactment of the kids first act.--Any nonpregnant
parent or a nonpregnant caretaker relative of a targeted low-
income child who is not enrolled in the State child health
plan under a section 1115 waiver, experimental, pilot, or
demonstration project referred to in subparagraph (B)(i) on
the date of enactment of the Kids First Act, and any
nonpregnant childless adult who is not enrolled in the State
child health plan under a section 1115 waiver, experimental,
pilot, or demonstration project referred to in subparagraph
(B)(ii)(I) on such date.
``(D) Definition of caretaker relative.--In this
subparagraph, the term `caretaker relative' has the meaning
given that term for purposes of carrying out section 1931.
``(E) Rule of construction.--Nothing in this paragraph
shall be construed as implying that payments for coverage of
populations for which the Federal medical assistance
percentage (as so determined) is to be substituted for the
enhanced FMAP under subsection (a)(1) in accordance with this
paragraph are to be made from funds other than the allotments
determined for a State under section 2104.''.
(b) Conforming Amendment.--Section 2105(a)(1) of the Social
Security Act ( 42 U.S.C. 1397dd(a)(1)) is amended, in the
matter preceding subparagraph (A), by inserting ``or
subsection (c)(8)'' after ``subparagraph (B)''.

SEC. 5. PROHIBITION ON NEW SECTION 1115 WAIVERS FOR COVERAGE
OF ADULTS OTHER THAN PREGNANT WOMEN.

(a) In General.--Section 2107(f) of the Social Security Act
(42 U.S.C. 1397gg(f)) is amended--
(1) by striking ``, the Secretary'' and inserting ``:
``(1) The Secretary''; and
(2) by adding at the end the following new paragraphs:
``(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
Kids First Act that would allow funds made available under
this title to be used to provide child health assistance or
other health benefits coverage for any other adult other than
a pregnant woman whose family income does not exceed the
income eligibility level specified for a targeted low-income
child in that State under a waiver or project approved as of
such date.
``(3) 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
Kids First Act that would waive or modify the requirements of
section 2105(c)(8).''.
(b) Clarification of Authority for Coverage of Pregnant
Women.--Section 2106 of the Social Security Act (42 U.S.C.
1397ff) is amended by adding at the end the following new
subsection:
``(f) No Authority To Cover Pregnant Women Through State
Plan.--For purposes of this title, a State may provide
assistance to a pregnant woman under the State child health
plan only--
``(1) by virtue of a waiver under section 1115; or
``(2) 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 on the date of
enactment of the Kids First Act).''.
(c) Assurance of Notice to Affected Enrollees.--The
Secretary of Health and Human Services shall establish
procedures to ensure that States provide adequate public
notice for parents, caretaker relatives, and nonpregnant
childless adults whose eligibility for child health
assistance or health benefits coverage under a waiver under
section 1115 of the Social Security Act will be terminated as
a result of the amendments made by subsection (a), and that
States otherwise adhere to regulations of the Secretary
relating to procedures for terminating waivers under section
1115 of the Social Security Act.

SEC. 6. STANDARDIZATION OF DETERMINATION OF FAMILY INCOME FOR
TARGETED LOW-INCOME CHILDREN UNDER TITLE XXI
AND OPTIONAL TARGETED LOW-INCOME CHILDREN UNDER
TITLE XIX.

(a) Eligibility Based on Gross Income.--
(1) In general.--Section 2110 of the Social Security Act
(42 U.S.C. 1397jj) is amended--
(A) in subsection (b)(1)(A), by inserting ``in accordance
with subsection (d)'' after ``State plan''; and
(B) by adding at the end the following new subsection:
``(d) Standardization of Determination of Family Income.--A
State shall determine family income for purposes of
determining income eligibility for child health assistance or
other health benefits coverage under the State child health
plan (or under a waiver of such plan under section 1115)
solely on the basis of the gross income (as defined by the
Secretary) of the family.''.
(2) Prohibition on waiver of requirements.--Section 2107(f)
(42 U.S.C. 1397gg(f)), as amended by section 5(a), is amended
by adding at the end the following new paragraph:
``(4) The Secretary may not approve a waiver, experimental,
pilot, or demonstration project with respect to a State after
the date of enactment of the Kids First Act that would waive
or modify the requirements of section 2110(d) (relating to
determining income eligibility on the basis of gross income)
and regulations promulgated to carry out such
requirements.''.
(b) Regulations.--Not later than 90 days after the date of
enactment of this Act, the Secretary of Health and Human
Services shall promulgate interim final regulations defining
gross income for purposes of section 2110(d) of the Social
Security Act, as added by subsection (a).
(c) Application to Current Enrollees.--The interim final
regulations promulgated under subsection (b) shall not be
used to determine the income eligibility of any individual
enrolled in a State child health plan under title XXI of the
Social Security Act on the date of enactment of this Act
before the date on which such eligibility of the individual
is required to be redetermined under the plan as in effect on
such date. In the case of any individual enrolled in such
plan on such date who, solely as a result of the application
of subsection (d) of section 2110 of the Social Security Act
(as added by subsection (a)) and the regulations promulgated
under subsection (b), is determined to be ineligible for
child health assistance under the State child health plan, a
State may elect, subject to substitution of the Federal
medical assistance percentage for the enhanced FMAP under
section 2105(c)(8)(A) of the Social Security Act (as added by
section 4(a)), to continue to provide the individual with
such assistance for so long as the individual otherwise would
be eligible for such assistance and the individual's family
income, if determined under the income and resource standards
and methodologies applicable under the State child health
plan on September 30,

[[Page S931]]

2008, would not exceed the income eligibility level
applicable to the individual under the State child health
plan.

SEC. 7. GRANTS FOR OUTREACH AND ENROLLMENT.

(a) Grants.--Title XXI of the Social Security Act (42
U.S.C. 1397aa et seq.) is amended by adding at the end the
following:

``SEC. 2111. GRANTS TO IMPROVE OUTREACH AND ENROLLMENT.

``(a) Outreach and Enrollment Grants; National Campaign.--
``(1) In general.--From the amounts appropriated for a
fiscal year under subsection (f), subject to paragraph (2),
the Secretary shall award grants to eligible entities to
conduct outreach and enrollment efforts that are designed to
increase the enrollment and participation of eligible
children under this title and title XIX.
``(2) 10 percent set aside for national enrollment
campaign.--An amount equal to 10 percent of such amounts for
the fiscal year shall be used by the Secretary for
expenditures during the fiscal year to carry out a national
enrollment campaign in accordance with subsection (g).
``(b) Award of Grants.--
``(1) Priority for awarding.--
``(A) In general.--In awarding grants under subsection (a),
the Secretary shall give priority to eligible entities that--
``(i) 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 disparity
populations, including those proposals that address cultural
and linguistic barriers to enrollment; and

``(ii) submit the most demonstrable evidence required under
paragraphs (1) and (2) of subsection (c).
``(B) 10 percent set aside for outreach to indian
children.--An amount equal to 10 percent of the funds
appropriated under subsection (f) for a fiscal year 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.
``(2) 2-year availability.--A grant awarded under this
section for a fiscal year shall remain available for
expenditure through the end of the succeeding fiscal year.
``(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 information, as the Secretary may decide.
Such application shall include--
``(1) evidence demonstrating that the entity includes
members 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.
``(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) Supplement, Not Supplant.--Federal funds awarded
under this section shall be used to supplement, not supplant,
non-Federal funds that are otherwise available for activities
funded under this section.
``(e) 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 provider.
``(D) A Federal health safety net organization.
``(E) A State, national, local, or community-based public
or nonprofit private organization.
``(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
non-governmental entities.
``(G) An elementary or secondary school.
``(H) A national, local, or community-based public or
nonprofit private organization, including organizations that
use community health workers or community-based doula
programs.
``(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 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
effectively communicate with health care providers;
``(D) by providing culturally and linguistically
appropriate health or nutrition education;
``(E) by advocating for individual and community health or
nutrition needs; and
``(F) by providing referral and followup services.
``(f) Appropriation.--
``(1) In general.--There is appropriated, out of any money
in the Treasury not otherwise appropriated, for the purpose
of awarding grants under this section--
``(A) $100,000,000 for each of fiscal years 2009 and 2010;
``(B) $75,000,000 for each of fiscal years 2011 and 2012;
and
``(C) $50,000,000 for fiscal year 2013.
``(2) Grants in addition to other amounts paid.--Amounts
appropriated and paid under the authority of this section
shall be in addition to amounts appropriated 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.
``(g) National Enrollment Campaign.--From the amounts made
available under subsection (a)(2) for a fiscal year, the
Secretary shall develop and implement a national enrollment
campaign to improve the enrollment of underserved child
populations in the programs established 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
systems 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
awareness campaigns administered by the Secretary;
``(3) increased financial and technical support for
enrollment 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
proficiency; and
``(6) such other outreach initiatives as the Secretary
determines would increase public awareness of the programs
under this title and title XIX.''.
(b) Nonapplication of Administrative Expenditures Cap.--
Section 2105(c)(2) of the Social Security Act (42 U.S.C.
1397ee(c)(2)) is amended by adding at the end the following:
``(C) Nonapplication to expenditures for outreach and
enrollment.--The limitation under subparagraph (A) shall not
apply with respect to expenditures for outreach activities
under section 2102(c)(1), or for enrollment activities, for
children eligible for child health assistance under the State
child health plan or medical assistance under the State plan
under title XIX.''.

SEC. 8. IMPROVED STATE OPTION FOR OFFERING PREMIUM ASSISTANCE
FOR COVERAGE OF CHILDREN THROUGH PRIVATE PLANS
UNDER SCHIP AND MEDICAID.

(a) In General.--Section 2105(c) of the Social Security Act
(42 U.S.C. 1397ee(c)), as amended by section 4(a) is amended
by adding at the end the following:
``(9) Additional state option for offering premium
assistance.--
``(A) In general.--Subject to the succeeding provisions of
this paragraph, a State

[[Page S932]]

may elect to offer a premium assistance subsidy (as defined
in subparagraph (C)) for qualified 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.
``(B) Qualified coverage.--In this paragraph, the term
`qualified coverage' means the following:
``(i) Qualified employer sponsored coverage.--

``(I) In general.--A group health plan or health insurance
coverage offered through an employer that is--

``(aa) substantially equivalent 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);
``(bb) made similarly available to all of the employer's
employees and for which the employer makes a contribution to
the premium that is not less for employees receiving a
premium assistance subsidy under any option available under
the State child health plan under this title or the State
plan under title XIX to provide such assistance than the
employer contribution provided for all other employees; and
``(cc) cost-effective, as determined under subclause (II).

``(II) Cost-effectiveness.--A group health plan or health
insurance coverage offered through an employer shall be
considered to be cost-effective if--

``(aa) the marginal premium cost to purchase family
coverage through the employer is less than the State cost of
providing child health assistance through the State child
health plan for all the children in the family who are
targeted low-income children; or
``(bb) the marginal premium cost between individual
coverage and purchasing family coverage through the employer
is not greater than 175 percent of the cost to the State to
provide child health assistance through the State child
health plan for a targeted low-income child.
``(ii) Qualified non-group coverage.--Health insurance
coverage offered to individuals in the non-group health
insurance market that is substantially equivalent 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).
``(iii) High deductible health plan.--A high deductible
health plan (as defined in section 223(c)(2) of the Internal
Revenue Code of 1986) purchased through 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 `premium
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 contribution 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 annual aggregate cost-sharing limit applied
under section 2103(e)(3)(B).
``(ii) State payment option.--Subject to clause (iii), a
State may provide a premium assistance subsidy directly to an
employer or as reimbursement to an employee for out-of-pocket
expenditures.
``(iii) Requirement for direct payment to employee.--A
State shall not pay a premium assistance subsidy directly to
the employee, unless the State has established procedures to
ensure that the targeted low-income child on whose behalf
such payments are made are actually enrolled in the qualified
employer sponsored coverage.
``(iv) Treatment as child health assistance.--Expenditures
for the provision of premium assistance subsidies shall be
considered child health assistance described in paragraph
(1)(C) of subsection (a) for purposes of making payments
under that subsection.
``(v) State option to require acceptance of subsidy.--A
State may condition the provision of child health assistance
under the State child health plan for a targeted low-income
child on the receipt of a premium assistance subsidy for
enrollment in qualified employer sponsored coverage if the
State determines the provision of such a subsidy to be more
cost-effective in accordance with subparagraph (B)(ii).
``(vi) Not treated as income.--Notwithstanding any other
provision of law, a premium assistance subsidy provided in
accordance with this paragraph shall not be treated as income
to the child or the parent of the child for whom such subsidy
is provided.
``(D) No requirement to provide supplemental coverage for
benefits and additional cost-sharing protection provided
under the state child health plan.--
``(i) In general.--A State that elects the option to
provide a premium assistance subsidy under this paragraph
shall not be required to provide a targeted low-income child
enrolled in qualified employer sponsored coverage with
supplemental coverage for items or services that are not
covered, or are only partially covered, under the qualified
employer sponsored coverage or cost-sharing protection other
than the protection required under section 2103(e)(3)(B).
``(ii) Notice of cost-sharing requirements.--A State shall
provide a targeted low-income child or the parent of such a
child (as appropriate) who is provided with a premium
assistance subsidy in accordance with this paragraph with
notice of the cost-sharing requirements and limitations
imposed under the qualified employer sponsored coverage in
which the child is enrolled upon the enrollment of the child
in such coverage and annually thereafter.
``(iii) Record keeping requirements.--A State may require a
parent of a targeted low-income child that is enrolled in
qualified employer-sponsored coverage to bear the
responsibility for keeping track of out-of-pocket
expenditures incurred for cost-sharing imposed under such
coverage and to notify the State when the limit on such
expenditures imposed under section 2103(e)(3)(B) has been
reached for a year from the effective date of enrollment for
such year.
``(iv) State option for reimbursement.--A State may
retroactively reimburse a parent of a targeted low-income
child for out-of-pocket expenditures incurred after reaching
the 5 percent cost-sharing limitation imposed under section
2103(e)(3)(B) for a year.
``(E) 6-month waiting period required.--A State shall
impose at least a 6-month waiting period from the time an
individual is enrolled in private health insurance prior to
the provision of a premium assistance subsidy for a targeted
low-income child in accordance with this paragraph.
``(F) Non application of waiting period for enrollment in
the state medicaid plan or the state child health plan.--A
targeted low-income child provided a premium assistance
subsidy in accordance with this paragraph who loses
eligibility for such subsidy shall not be treated as having
been enrolled in private health insurance coverage for
purposes of applying any waiting period imposed under the
State child health plan or the State plan under title XIX for
the enrollment of the child under such plan.
``(G) Assurance of special enrollment period under group
health plans in case of eligibility for premium subsidy
assistance.--No payment shall be made under subsection (a)
for amounts expended for the provision of premium assistance
subsidies under this paragraph unless a State provides
assurances to the Secretary that the State has in effect laws
requiring a group health plan, a health insurance issuer
offering group health insurance coverage in connection with a
group health plan, and a self-funded health plan, to permit
an employee who is eligible, but not enrolled, for coverage
under the terms of the plan (or a child of such an employee
if the child is eligible, but not enrolled, for coverage
under such terms) to enroll for coverage under the terms of
the plan if the employee's child becomes eligible for a
premium assistance subsidy under this paragraph.
``(H) No effect on previously approved premium assistance
programs.--Nothing in this paragraph shall be construed as
limiting the authority of a State to offer premium assistance
under section 1906, a waiver described in paragraph (2)(B) or
(3), a waiver approved under section 1115, or other authority
in effect on February 1, 2009.
``(I) Notice of availability.--A 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 enrollment
process under the State child health plan, information
describing the availability of such subsidies 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 informed of
the availability of such subsidies under the State child
health plan.''.
(b) Application to Medicaid.--Section 1906 of the Social
Security Act (42 U.S.C. 1396e) is amended by inserting after
subsection (c) the following:
``(d) The provisions of section 2105(c)(9) shall apply to a
child who is eligible for medical assistance under the State
plan in the same manner as such provisions apply to a
targeted low-income child under a State child health plan
under title XXI. Section 1902(a)(34) shall not apply to a
child who is provided a premium assistance subsidy under the
State plan in accordance with the preceding sentence.''.

SEC. 9. TREATMENT OF UNBORN CHILDREN.

(a) Codification of Current Regulations.--Section
2110(c)(1) of the Social Security Act (42 U.S.C.
1397jj(c)(1)) is amended by striking the period at the end
and inserting the following: ``, and includes, at the option
of a State, an unborn child. For purposes of the previous
sentence, the term `unborn child' means a member of the
species Homo sapiens, at any stage of development, who is
carried in the womb.''.
(b) Clarifications Regarding Coverage of Mothers.--Section
2103 (42 U.S.C. 1397cc) is amended by adding at the end the
following new subsection:
``(g) Clarifications Regarding Authority To Provide
Postpartum Services and Maternal Health Care.--Any State that
provides child health assistance to an unborn child under the
option described in section 2110(c)(1) may--
``(1) continue to provide such assistance to the mother, as
well as postpartum services, through the end of the month in
which the

[[Page S933]]

60-day period (beginning on the last day of pregnancy) ends;
and
``(2) in the interest of the child to be born, have
flexibility in defining and providing services to benefit
either the mother or unborn child consistent with the health
of both.''.

SEC. 10. 50 PERCENT MATCHING RATE FOR ALL MEDICAID
ADMINISTRATIVE COSTS.

Section 1903(a) of the Social Security Act (42 U.S.C.
1396b(a)) is amended--
(1) by striking paragraph (2);
(2) by redesignating paragraph (3)(E) as paragraph (2) and
re-locating and indenting it appropriately;
(3) in paragraph (2), as so redesignated, by redesignating
clauses (i) and (ii) as subparagraphs (A) and (B), and
indenting them appropriately;
(4) by striking paragraphs (3) and (4);
(5) in paragraph (5), by striking ``which are attributable
to the offering, arranging, and furnishing'' and inserting
``which are for the medical assistance costs of furnishing'';
(6) by striking paragraph (6);
(7) in paragraph (7), by striking ``subject to section
1919(g)(3)(B),''; and
(8) by redesignating paragraphs (5) and (7) as paragraphs
(3) and (4), respectively.

SEC. 11. REDUCTION IN PAYMENTS FOR MEDICAID ADMINISTRATIVE
COSTS TO PREVENT DUPLICATION OF SUCH PAYMENTS
UNDER TANF.

Section 1903 of the Social Security Act (42 U.S.C. 1396b)
is amended--
(1) in subsection (a)(7), by striking ``section
1919(g)(3)(B)'' and inserting ``subsection (h)'';
(2) in subsection (a)(2)(D) by inserting ``, subject to
subsection (g)(3)(C) of such section'' after ``as are
attributable to State activities under section 1919(g)''; and
(3) by adding after subsection (g) the following new
subsection:
``(h) Reduction in Payments for Administrative Costs To
Prevent Duplication of Payments Under Title IV.--Beginning
with the calendar quarter commencing April 1, 2009, the
Secretary shall reduce the amount paid to each State under
subsection (a)(7) for each quarter by an amount equal to \1/
4\ of the annualized amount determined for the Medicaid
program under section 16(k)(2)(B) of the Food Stamp Act of
1977 (7 U.S.C. 2025(k)(2)(B)).''.

SEC. 12. ELIMINATION OF WAIVER OF CERTAIN MEDICAID PROVIDER
TAX PROVISIONS.

Effective October 1, 2009, subsection (c) of section 4722
of the Balanced Budget Act of 1997 (Public Law 105-33; 111
Stat. 515) is repealed.

SEC. 13. ELIMINATION OF SPECIAL PAYMENTS FOR CERTAIN PUBLIC
HOSPITALS.

Effective October 1, 2009, subsection (d) of section 701 of
the Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, as enacted into law by section
1(a)(6) of Public Law 106-554 (42 U.S.C. 1396r-4 note), is
repealed.

SEC. 14. EFFECTIVE DATE; COORDINATION OF FUNDING FOR FISCAL
YEAR 2009.

(a) In General.--Unless otherwise specified, subject to
subsection (b), the amendments made by this Act shall take
effect on the date of enactment of this Act.
(b) Delay if State Legislation Required.--In the case of a
State child health plan under title XXI of the Social
Security Act or a waiver of such plan under section 1115 of
such Act which the Secretary of Health and Human Services
determines requires State legislation (other than legislation
appropriating funds) in order for the plan or waiver to meet
the additional requirements imposed by the amendments made by
this Act, the State child health plan or waiver shall not be
regarded as failing to comply with the requirements of such
title XXI solely on the basis of its failure to meet such
additional requirements 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 the 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 such session shall be
deemed to be a separate regular session of the State
legislature.
(c) Coordination of Funding for Fiscal Year 2009.--
Notwithstanding any other provision of law, insofar as funds
have been appropriated under section 2104(a)(11) of the
Social Security Act, as amended by section 201(a) of Public
Law 110-173 and in effect on January 1, 2009, to provide
allotments to States under title XXI of the Social Security
Act for fiscal year 2009--
(1) any amounts that are so appropriated that are not so
allotted and obligated before the date of the enactment of
this Act are rescinded; and
(2) any amount provided for allotments under title XXI of
such Act to a State under the amendments made by this Act for
such fiscal year shall be reduced by the amount of such
appropriations so allotted and obligated before such date.
______

SA 41. Mr. GRASSLEY (for himself, Mr. Hatch, Mr. Roberts, Mr. Vitter,
and Mr. Chambliss) proposed an amendment to amendment SA 39 proposed by
Mr. Reid (for Mr. Baucus) to the bill H.R. 2, to amend title XXI of the
Social Security Act to extend and improve the Children's Health
Insurance Program, and for other purposes; as follows:

Strike section 214 and insert the following:

SEC. 214. INCREASED FUNDING FOR ENROLLMENT OF UNINSURED LOW
INCOME AMERICAN CHILDREN.

Section 2105(a)(3)(E) (42 U.S.C. 1397ee(a)(3)(E)), as added
by section 104, is amended by adding at the end the
following:
``(iv) Increase in bonus payments for fiscal years 2012
through 2019.--With respect to each of fiscal years 2012
through 2019:

``(I) Clause (i) of subparagraph (B) shall be applied by
substituting `38 percent' for `15 percent'.
``(II) Clause (ii) of subparagraph (B) shall be applied by
substituting `70 percent' for `62.5 percent'.

______

SA 42. Mr. DeMINT submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

At the appropriate place, add the following:

TITLE _--HEALTH CARE CHOICE

SEC. _01. SHORT TITLE OF TITLE.

This title may be cited as ``Health Care Choice Act of
2009''.

SEC. _02. SPECIFICATION OF CONSTITUTIONAL AUTHORITY FOR
ENACTMENT OF LAW.

This title is enacted pursuant to the power granted
Congress under article I, section 8, clause 3, of the United
States Constitution.

SEC. _03. FINDINGS.

Congress finds the following:
(1) The application of numerous and significant variations
in State law impacts the ability of insurers to offer, and
individuals to obtain, affordable individual health insurance
coverage, thereby impeding commerce in individual health
insurance coverage.
(2) Individual health insurance coverage is increasingly
offered through the Internet, other electronic means, and by
mail, all of which are inherently part of interstate
commerce.
(3) In response to these issues, it is appropriate to
encourage increased efficiency in the offering of individual
health insurance coverage through a collaborative approach by
the States in regulating this coverage.
(4) The establishment of risk-retention groups has provided
a successful model for the sale of insurance across State
lines, as the acts establishing those groups allow insurance
to be sold in multiple States but regulated by a single
State.

SEC. _04. COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH
INSURANCE COVERAGE.

(a) In General.--Title XXVII of the Public Health Service
Act (42 U.S.C. 300gg et seq.) is amended by adding at the end
the following new part:

``PART D--COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE COVERAGE

``SEC. 2795. DEFINITIONS.

``In this part:
``(1) Primary state.--The term `primary State' means, with
respect to individual health insurance coverage offered by a
health insurance issuer, the State designated by the issuer
as the State whose covered laws shall govern the health
insurance issuer in the sale of such coverage under this
part. An issuer, with respect to a particular policy, may
only designate one such State as its primary State with
respect to all such coverage it offers. Such an issuer may
not change the designated primary State with respect to
individual health insurance coverage once the policy is
issued, except that such a change may be made upon renewal of
the policy. With respect to such designated State, the issuer
is deemed to be doing business in that State.
``(2) Secondary state.--The term `secondary State' means,
with respect to individual health insurance coverage offered
by a health insurance issuer, any State that is not the
primary State. In the case of a health insurance issuer that
is selling a policy in, or to a resident of, a secondary
State, the issuer is deemed to be doing business in that
secondary State.
``(3) Health insurance issuer.--The term `health insurance
issuer' has the meaning given such term in section
2791(b)(2), except that such an issuer must be licensed in
the primary State and be qualified to sell individual health
insurance coverage in that State.
``(4) Individual health insurance coverage.--The term
`individual health insurance coverage' means health insurance
coverage offered in the individual market, as defined in
section 2791(e)(1).
``(5) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or
official or officials designated by the State to enforce the
requirements of this title for the State with respect to the
issuer.
``(6) Hazardous financial condition.--The term `hazardous
financial condition' means that, based on its present or
reasonably anticipated financial condition, a health
insurance issuer is unlikely to be able--
``(A) to meet obligations to policyholders with respect to
known claims and reasonably anticipated claims; or
``(B) to pay other obligations in the normal course of
business.

[[Page S934]]

``(7) Covered laws.--
``(A) In general.--The term `covered laws' means the laws,
rules, regulations, agreements, and orders governing the
insurance business pertaining to--
``(i) individual health insurance coverage issued by a
health insurance issuer;
``(ii) the offer, sale, rating (including medical
underwriting), renewal, and issuance of individual health
insurance coverage to an individual;
``(iii) the provision to an individual in relation to
individual health insurance coverage of health care and
insurance related services;
``(iv) the provision to an individual in relation to
individual health insurance coverage of management,
operations, and investment activities of a health insurance
issuer; and
``(v) the provision to an individual in relation to
individual health insurance coverage of loss control and
claims administration for a health insurance issuer with
respect to liability for which the issuer provides insurance.
``(B) Exception.--Such term does not include any law, rule,
regulation, agreement, or order governing the use of care or
cost management techniques, including any requirement related
to provider contracting, network access or adequacy, health
care data collection, or quality assurance.
``(8) State.--The term `State' means the 50 States and
includes the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, American Samoa, and the Northern Mariana
Islands.
``(9) Unfair claims settlement practices.--The term `unfair
claims settlement practices' means only the following
practices:
``(A) Knowingly misrepresenting to claimants and insured
individuals relevant facts or policy provisions relating to
coverage at issue.
``(B) Failing to acknowledge with reasonable promptness
pertinent communications with respect to claims arising under
policies.
``(C) Failing to adopt and implement reasonable standards
for the prompt investigation and settlement of claims arising
under policies.
``(D) Failing to effectuate prompt, fair, and equitable
settlement of claims submitted in which liability has become
reasonably clear.
``(E) Refusing to pay claims without conducting a
reasonable investigation.
``(F) Failing to affirm or deny coverage of claims within a
reasonable period of time after having completed an
investigation related to those claims.
``(G) A pattern or practice of compelling insured
individuals or their beneficiaries to institute suits to
recover amounts due under its policies by offering
substantially less than the amounts ultimately recovered in
suits brought by them.
``(H) A pattern or practice of attempting to settle or
settling claims for less than the amount that a reasonable
person would believe the insured individual or his or her
beneficiary was entitled by reference to written or printed
advertising material accompanying or made part of an
application.
``(I) Attempting to settle or settling claims on the basis
of an application that was materially altered without notice
to, or knowledge or consent of, the insured.
``(J) Failing to provide forms necessary to present claims
within 15 calendar days of a requests with reasonable
explanations regarding their use.
``(K) Attempting to cancel a policy in less time than that
prescribed in the policy or by the law of the primary State.
``(10) Fraud and abuse.--The term `fraud and abuse' means
an act or omission committed by a person who, knowingly and
with intent to defraud, commits, or conceals any material
information concerning, one or more of the following:
``(A) Presenting, causing to be presented or preparing with
knowledge or belief that it will be presented to or by an
insurer, a reinsurer, broker or its agent, false information
as part of, in support of or concerning a fact material to
one or more of the following:
``(i) An application for the issuance or renewal of an
insurance policy or reinsurance contract.
``(ii) The rating of an insurance policy or reinsurance
contract.
``(iii) A claim for payment or benefit pursuant to an
insurance policy or reinsurance contract.
``(iv) Premiums paid on an insurance policy or reinsurance
contract.
``(v) Payments made in accordance with the terms of an
insurance policy or reinsurance contract.
``(vi) A document filed with the commissioner or the chief
insurance regulatory official of another jurisdiction.
``(vii) The financial condition of an insurer or reinsurer.
``(viii) The formation, acquisition, merger,
reconsolidation, dissolution or withdrawal from one or more
lines of insurance or reinsurance in all or part of a State
by an insurer or reinsurer.
``(ix) The issuance of written evidence of insurance.
``(x) The reinstatement of an insurance policy.
``(B) Solicitation or acceptance of new or renewal
insurance risks on behalf of an insurer, reinsurer or other
person engaged in the business of insurance by a person who
knows or should know that the insurer or other person
responsible for the risk is insolvent at the time of the
transaction.
``(C) Transaction of the business of insurance in violation
of laws requiring a license, certificate of authority or
other legal authority for the transaction of the business of
insurance.
``(D) Attempt to commit, aiding or abetting in the
commission of, or conspiracy to commit the acts or omissions
specified in this paragraph.

``SEC. 2796. APPLICATION OF LAW.

``(a) In General.--The covered laws of the primary State
shall apply to individual health insurance coverage offered
by a health insurance issuer in the primary State and in any
secondary State, but only if the coverage and issuer comply
with the conditions of this section with respect to the
offering of coverage in any secondary State.
``(b) Exemptions From Covered Laws in a Secondary State.--
Except as provided in this section, a health insurance issuer
with respect to its offer, sale, rating (including medical
underwriting), renewal, and issuance of individual health
insurance coverage in any secondary State is exempt from any
covered laws of the secondary State (and any rules,
regulations, agreements, or orders sought or issued by such
State under or related to such covered laws) to the extent
that such laws would--
``(1) make unlawful, or regulate, directly or indirectly,
the operation of the health insurance issuer operating in the
secondary State, except that any secondary State may require
such an issuer--
``(A) to pay, on a nondiscriminatory basis, applicable
premium and other taxes (including high risk pool
assessments) which are levied on insurers and surplus lines
insurers, brokers, or policyholders under the laws of the
State;
``(B) to register with and designate the State insurance
commissioner as its agent solely for the purpose of receiving
service of legal documents or process;
``(C) to submit to an examination of its financial
condition by the State insurance commissioner in any State in
which the issuer is doing business to determine the issuer's
financial condition, if--
``(i) the State insurance commissioner of the primary State
has not done an examination within the period recommended by
the National Association of Insurance Commissioners; and
``(ii) any such examination is conducted in accordance with
the examiners' handbook of the National Association of
Insurance Commissioners and is coordinated to avoid
unjustified duplication and unjustified repetition;
``(D) to comply with a lawful order issued--
``(i) in a delinquency proceeding commenced by the State
insurance commissioner if there has been a finding of
financial impairment under subparagraph (C); or
``(ii) in a voluntary dissolution proceeding;
``(E) to comply with an injunction issued by a court of
competent jurisdiction, upon a petition by the State
insurance commissioner alleging that the issuer is in
hazardous financial condition;
``(F) to participate, on a nondiscriminatory basis, in any
insurance insolvency guaranty association or similar
association to which a health insurance issuer in the State
is required to belong;
``(G) to comply with any State law regarding fraud and
abuse (as defined in section 2795(10)), except that if the
State seeks an injunction regarding the conduct described in
this subparagraph, such injunction must be obtained from a
court of competent jurisdiction;
``(H) to comply with any State law regarding unfair claims
settlement practices (as defined in section 2795(9)); or
``(I) to comply with the applicable requirements for
independent review under section 2798 with respect to
coverage offered in the State;
``(2) require any individual health insurance coverage
issued by the issuer to be countersigned by an insurance
agent or broker residing in that Secondary State; or
``(3) otherwise discriminate against the issuer issuing
insurance in both the primary State and in any secondary
State.
``(c) Clear and Conspicuous Disclosure.--A health insurance
issuer shall provide the following notice, in 12-point bold
type, in any insurance coverage offered in a secondary State
under this part by such a health insurance issuer and at
renewal of the policy, with the 5 blank spaces therein being
appropriately filled with the name of the health insurance
issuer, the name of primary State, the name of the secondary
State, the name of the secondary State, and the name of the
secondary State, respectively, for the coverage concerned:
This policy is issued by _____ and is governed by the laws
and regulations of the State of _____, and it has met all the
laws of that State as determined by that State's Department
of Insurance. This policy may be less expensive than others
because it is not subject to all of the insurance laws and
regulations of the State of _____, including coverage of some
services or benefits mandated by the law of the State of
_____. Additionally, this policy is not subject to all of the
consumer protection laws or restrictions on rate changes of
the State of _____. As with all insurance products, before
purchasing this policy, you should carefully review the
policy and determine what health care services the policy
covers and what benefits it provides, including any
exclusions, limitations, or conditions for such services or
benefits.''.
``(d) Prohibition on Certain Reclassifications and Premium
Increases.--

[[Page S935]]

``(1) In general.--For purposes of this section, a health
insurance issuer that provides individual health insurance
coverage to an individual under this part in a primary or
secondary State may not upon renewal--
``(A) move or reclassify the individual insured under the
health insurance coverage from the class such individual is
in at the time of issue of the contract based on the health-
status related factors of the individual; or
``(B) increase the premiums assessed the individual for
such coverage based on a health status-related factor or
change of a health status-related factor or the past or
prospective claim experience of the insured individual.
``(2) Construction.--Nothing in paragraph (1) shall be
construed to prohibit a health insurance issuer--
``(A) from terminating or discontinuing coverage or a class
of coverage in accordance with subsections (b) and (c) of
section 2742;
``(B) from raising premium rates for all policy holders
within a class based on claims experience;
``(C) from changing premiums or offering discounted
premiums to individuals who engage in wellness activities at
intervals prescribed by the issuer, if such premium changes
or incentives--
``(i) are disclosed to the consumer in the insurance
contract;
``(ii) are based on specific wellness activities that are
not applicable to all individuals; and
``(iii) are not obtainable by all individuals to whom
coverage is offered;
``(D) from reinstating lapsed coverage; or
``(E) from retroactively adjusting the rates charged an
insured individual if the initial rates were set based on
material misrepresentation by the individual at the time of
issue.
``(e) Prior Offering of Policy in Primary State.--A health
insurance issuer may not offer for sale individual health
insurance coverage in a secondary State unless that coverage
is currently offered for sale in the primary State.
``(f) Licensing of Agents or Brokers for Health Insurance
Issuers.--Any State may require that a person acting, or
offering to act, as an agent or broker for a health insurance
issuer with respect to the offering of individual health
insurance coverage obtain a license from that State, with
commissions or other compensation subject to the provisions
of the laws of that State, except that a State may not impose
any qualification or requirement which discriminates against
a nonresident agent or broker.
``(g) Documents for Submission to State Insurance
Commissioner.--Each health insurance issuer issuing
individual health insurance coverage in both primary and
secondary States shall submit--
``(1) to the insurance commissioner of each State in which
it intends to offer such coverage, before it may offer
individual health insurance coverage in such State--
``(A) a copy of the plan of operation or feasibility study
or any similar statement of the policy being offered and its
coverage (which shall include the name of its primary State
and its principal place of business);
``(B) written notice of any change in its designation of
its primary State; and
``(C) written notice from the issuer of the issuer's
compliance with all the laws of the primary State; and
``(2) to the insurance commissioner of each secondary State
in which it offers individual health insurance coverage, a
copy of the issuer's quarterly financial statement submitted
to the primary State, which statement shall be certified by
an independent public accountant and contain a statement of
opinion on loss and loss adjustment expense reserves made
by--
``(A) a member of the American Academy of Actuaries; or
``(B) a qualified loss reserve specialist.
``(h) Power of Courts to Enjoin Conduct.--Nothing in this
section shall be construed to affect the authority of any
Federal or State court to enjoin--
``(1) the solicitation or sale of individual health
insurance coverage by a health insurance issuer to any person
or group who is not eligible for such insurance; or
``(2) the solicitation or sale of individual health
insurance coverage that violates the requirements of the law
of a secondary State which are described in subparagraphs (A)
through (H) of section 2796(b)(1).
``(i) Power of Secondary States to Take Administrative
Action.--Nothing in this section shall be construed to affect
the authority of any State to enjoin conduct in violation of
that State's laws described in section 2796(b)(1).
``(j) State Powers to Enforce State Laws.--
``(1) In general.--Subject to the provisions of subsection
(b)(1)(G) (relating to injunctions) and paragraph (2),
nothing in this section shall be construed to affect the
authority of any State to make use of any of its powers to
enforce the laws of such State with respect to which a health
insurance issuer is not exempt under subsection (b).
``(2) Courts of competent jurisdiction.--If a State seeks
an injunction regarding the conduct described in paragraphs
(1) and (2) of subsection (h), such injunction must be
obtained from a Federal or State court of competent
jurisdiction.
``(k) States' Authority to Sue.--Nothing in this section
shall affect the authority of any State to bring action in
any Federal or State court.
``(l) Generally Applicable Laws.--Nothing in this section
shall be construed to affect the applicability of State laws
generally applicable to persons or corporations.
``(m) Guaranteed Availability of Coverage to Hipaa Eligible
Individuals.--To the extent that a health insurance issuer is
offering coverage in a primary State that does not
accommodate residents of secondary States or does not provide
a working mechanism for residents of a secondary State, and
the issuer is offering coverage under this part in such
secondary State which has not adopted a qualified high risk
pool as its acceptable alternative mechanism (as defined in
section 2744(c)(2)), the issuer shall, with respect to any
individual health insurance coverage offered in a secondary
State under this part, comply with the guaranteed
availability requirements for eligible individuals in section
2741.

``SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR BEFORE
ISSUER MAY SELL INTO SECONDARY STATES.

``A health insurance issuer may not offer, sell, or issue
individual health insurance coverage in a secondary State if
the State insurance commissioner does not use a risk-based
capital formula for the determination of capital and surplus
requirements for all health insurance issuers.

``SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

``(a) Right to External Appeal.--A health insurance issuer
may not offer, sell, or issue individual health insurance
coverage in a secondary State under the provisions of this
title unless----
``(1) both the secondary State and the primary State have
legislation or regulations in place establishing an
independent review process for individuals who are covered by
individual health insurance coverage, or
``(2) in any case in which the requirements of subparagraph
(A) are not met with respect to the either of such States,
the issuer provides an independent review mechanism
substantially identical (as determined by the applicable
State authority of such State) to that prescribed in the
`Health Carrier External Review Model Act' of the National
Association of Insurance Commissioners for all individuals
who purchase insurance coverage under the terms of this part,
except that, under such mechanism, the review is conducted by
an independent medical reviewer, or a panel of such
reviewers, with respect to whom the requirements of
subsection (b) are met.
``(b) Qualifications of Independent Medical Reviewers.--In
the case of any independent review mechanism referred to in
subsection (a)(2)--
``(1) In general.--In referring a denial of a claim to an
independent medical reviewer, or to any panel of such
reviewers, to conduct independent medical review, the issuer
shall ensure that--
``(A) each independent medical reviewer meets the
qualifications described in paragraphs (2) and (3);
``(B) with respect to each review, each reviewer meets the
requirements of paragraph (4) and the reviewer, or at least 1
reviewer on the panel, meets the requirements described in
paragraph (5); and
``(C) compensation provided by the issuer to each reviewer
is consistent with paragraph (6).
``(2) Licensure and expertise.--Each independent medical
reviewer shall be a physician (allopathic or osteopathic) or
health care professional who--
``(A) is appropriately credentialed or licensed in 1 or
more States to deliver health care services; and
``(B) typically treats the condition, makes the diagnosis,
or provides the type of treatment under review.
``(3) Independence.--
``(A) In general.--Subject to subparagraph (B), each
independent medical reviewer in a case shall--
``(i) not be a related party (as defined in paragraph (7));
``(ii) not have a material familial, financial, or
professional relationship with such a party; and
``(iii) not otherwise have a conflict of interest with such
a party (as determined under regulations).
``(B) Exception.--Nothing in subparagraph (A) shall be
construed to--
``(i) prohibit an individual, solely on the basis of
affiliation with the issuer, from serving as an independent
medical reviewer if--

``(I) a non-affiliated individual is not reasonably
available;
``(II) the affiliated individual is not involved in the
provision of items or services in the case under review;
``(III) the fact of such an affiliation is disclosed to the
issuer and the enrollee (or authorized representative) and
neither party objects; and
``(IV) the affiliated individual is not an employee of the
issuer and does not provide services exclusively or primarily
to or on behalf of the issuer;

``(ii) prohibit an individual who has staff privileges at
the institution where the treatment involved takes place from
serving as an independent medical reviewer merely on the
basis of such affiliation if the affiliation is disclosed to
the issuer and the enrollee (or authorized representative),
and neither party objects; or
``(iii) prohibit receipt of compensation by an independent
medical reviewer from an entity if the compensation is
provided consistent with paragraph (6).
``(4) Practicing health care professional in same field.--

[[Page S936]]

``(A) In general.--In a case involving treatment, or the
provision of items or services--
``(i) by a physician, a reviewer shall be a practicing
physician (allopathic or osteopathic) of the same or similar
specialty, as a physician who, acting within the appropriate
scope of practice within the State in which the service is
provided or rendered, typically treats the condition, makes
the diagnosis, or provides the type of treatment under
review; or
``(ii) by a non-physician health care professional, the
reviewer, or at least 1 member of the review panel, shall be
a practicing non-physician health care professional of the
same or similar specialty as the non-physician health care
professional who, acting within the appropriate scope of
practice within the State in which the service is provided or
rendered, typically treats the condition, makes the
diagnosis, or provides the type of treatment under review.
``(B) Practicing defined.--For purposes of this paragraph,
the term `practicing' means, with respect to an individual
who is a physician or other health care professional, that
the individual provides health care services to individual
patients on average at least 2 days per week.
``(5) Pediatric expertise.--In the case of an external
review relating to a child, a reviewer shall have expertise
under paragraph (2) in pediatrics.
``(6) Limitations on reviewer compensation.--Compensation
provided by the issuer to an independent medical reviewer in
connection with a review under this section shall--
``(A) not exceed a reasonable level; and
``(B) not be contingent on the decision rendered by the
reviewer.
``(7) Related party defined.--For purposes of this section,
the term `related party' means, with respect to a denial of a
claim under a coverage relating to an enrollee, any of the
following:
``(A) The issuer involved, or any fiduciary, officer,
director, or employee of the issuer.
``(B) The enrollee (or authorized representative).
``(C) The health care professional that provides the items
or services involved in the denial.
``(D) The institution at which the items or services (or
treatment) involved in the denial are provided.
``(E) The manufacturer of any drug or other item that is
included in the items or services involved in the denial.
``(F) Any other party determined under any regulations to
have a substantial interest in the denial involved.
``(8) Definitions.--For purposes of this subsection:
``(A) Enrollee.--The term `enrollee' means, with respect to
health insurance coverage offered by a health insurance
issuer, an individual enrolled with the issuer to receive
such coverage.
``(B) Health care professional.--The term `health care
professional' means an individual who is licensed,
accredited, or certified under State law to provide specified
health care services and who is operating within the scope of
such licensure, accreditation, or certification.

``SEC. 2799. ENFORCEMENT.

``(a) In General.--Subject to subsection (b), with respect
to specific individual health insurance coverage the primary
State for such coverage has sole jurisdiction to enforce the
primary State's covered laws in the primary State and any
secondary State.
``(b) Secondary State's Authority.--Nothing in subsection
(a) shall be construed to affect the authority of a secondary
State to enforce its laws as set forth in the exception
specified in section 2796(b)(1).
``(c) Court Interpretation.--In reviewing action initiated
by the applicable secondary State authority, the court of
competent jurisdiction shall apply the covered laws of the
primary State.
``(d) Notice of Compliance Failure.--In the case of
individual health insurance coverage offered in a secondary
State that fails to comply with the covered laws of the
primary State, the applicable State authority of the
secondary State may notify the applicable State authority of
the primary State.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to individual health insurance coverage offered,
issued, or sold after the date that is one year after the
date of the enactment of this Act.
(c) Gao Ongoing Study and Reports.--
(1) Study.--The Comptroller General of the United States
shall conduct an ongoing study concerning the effect of the
amendment made by subsection (a) on--
(A) the number of uninsured and under-insured;
(B) the availability and cost of health insurance policies
for individuals with pre-existing medical conditions;
(C) the availability and cost of health insurance policies
generally;
(D) the elimination or reduction of different types of
benefits under health insurance policies offered in different
States; and
(E) cases of fraud or abuse relating to health insurance
coverage offered under such amendment and the resolution of
such cases.
(2) Annual reports.--The Comptroller General shall submit
to Congress an annual report, after the end of each of the 5
years following the effective date of the amendment made by
subsection (a), on the ongoing study conducted under
paragraph (1).

SEC. _05. SEVERABILITY.

If any provision of this title or the application of such
provision to any person or circumstance is held to be
unconstitutional, the remainder of this title and the
application of the provisions of such to any other person or
circumstance shall not be affected.
______

SA 43. Mr. DeMINT submitted an amendment intended to be proposed to
amendment SA 39 proposed by Mr. Reid (for Mr. Baucus) to the bill H.R.
2, to amend title XXI of the Social Security Act to extend and improve
the Children's Health Insurance Program, and for other purposes; as
follows:

At the appropriate place, add the following:

SEC. __. REQUIRED COST-SHARING FOR HIGHER INCOME INDIVIDUALS.

Section 2103(e) (42 U.S.C. 1397cc(e)) is amended--
(1) in paragraph (3)(B), by striking ``and (2)'' and
inserting ``, (2), and (5)'';
(2) in paragraph (4), by striking ``Nothing'' and inserting
``Except as provided in paragraph (5), nothing''; and
(3) by adding at the end the following new paragraph:
``(5) Required cost-sharing for higher income
individuals.--Subject to paragraphs (1)(B) and (2), a State
child health plan shall impose premiums, deductibles,
coinsurance, and other cost-sharing (regardless of whether
such plan is implemented under this title, title XIX, or
both) for any targeted low-income child or other individual
enrolled in the plan whose family income exceeds 200 percent
of the poverty line in a manner that is consistent with the
authority and limitations for imposing cost-sharing under
section 1916A.''.
______

SA 44. Mr. DeMINT (for himself and Mr. Vitter) submitted an amendment
intended to be proposed by him to the bill H.R. 2, to amend title XXI
of the Social Security Act to extend and improve the Children's Health
Insurance Program, and for other purposes; which was ordered to lie on
the table; as follows:

At the appropriate place, insert the following:

SEC. --. PROHIBITION ON CONSIDERATION OF REVENUE PROVISIONS
WITHOUT CERTIFICATION OF TAX BURDEN EFFECTS.

(a) In General.--It shall not be in order to consider a
bill, resolution, amendment, or conference report that
proposes any provision amending the Internal Revenue Code of
1986 or affecting the application of such Code unless the
Joint Committee on Taxation provides a written certification
that such provision does not increase the net yearly tax
burden for any family whose taxable income for any taxable
year to which such provision applies is less than $250,000.
(b) Supermajority Waiver and Appeal.--
(1) Waiver.--A point of order raised under subsection (a)
may be waived or suspended in the Senate only by an
affirmative vote of two-thirds of the Members, duly chosen
and sworn.
(2) Appeal.--An affirmative vote of two-thirds of the
Members of the Senate, duly chosen and sworn, shall be
required in the Senate to sustain an appeal of the ruling of
the Chair on a point of order raised under subsection (a).
(c) Definition.--For purposes of this section, the term
``family'' means a married couple filing jointly or an
individual filing as a head of household.
______

SA 45. Mr. HATCH (for himself, Mr. Grassley, and Mr. Wicker) proposed
an amendment to amendment SA 39 proposed by Mr. Reid (for Mr. Baucus)
to the bill H.R. 2, to amend title XXI of the Social Security Act to
extend and improve the Children's Health Insurance Program, and for
other purposes; as follows:

On page 136, between lines 15 and 16, insert the following:
(c) Condition for Federal Matching Payments.--
(1) In general.--Section 1903(i) (42 U.S.C. 1396b(i)) is
amended--
(A) in paragraph (23), by striking ``or'' after the
semicolon;
(B) in paragraph (24)(C), by striking the period and
inserting ``; or''; and
(C) by inserting after paragraph (24)(C), the following:
``(25) with respect to amounts expended for medical
assistance for an immigrant child or pregnant woman under an
election made pursuant to paragraph (4) of subsection (v) for
any fiscal year quarter occurring before the first fiscal
year quarter for which the State demonstrates to the
Secretary (on the basis of the best data reasonably available
to the Secretary and in accordance with such techniques for
sampling and estimating as the Secretary determines
appropriate) that the State has enrolled in the State plan
under this title, the State child health plan under title
XXI, or under a waiver of either such plan, at least 95
percent of the children who reside in the State, whose family
income (as determined without regard to the application of
any general exclusion or disregard of a block of income that
is not determined by type of expense or type of income
(regardless of whether such an exclusion or disregard is

[[Page S937]]

permitted under section 1902(r))) does not exceed 200 percent
of the poverty line (as defined in section 2110(c)(5)), and
who are eligible for medical assistance under the State plan
under this title or child health assistance or health
benefits coverage under the State child health plan under
title XXI.''.
(2) Application to chip.--Section 2107(e)(1)(E) (42 U.S.C.
1397gg(e)(1)(E)) (as amended by section 503(a)(1)) is amended
by striking ``and (17)'' and inserting ``(17), and (25)''.
______

SA 46. Mr. KYL submitted an amendment intended to be proposed by him
to the bill H.R. 2, to amend title XXI of the Social Security Act to
extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 76, after line 23, add the following:

SEC. 116. PREVENTING SUBSTITUTION OF CHIP COVERAGE FOR
PRIVATE COVERAGE.

(a) Findings.--
(1) Congress agrees with the President that low-income
children should be the first priority of all States in
providing child health assistance under CHIP.
(2) Congress agrees with the President and the
Congressional Budget Office that the substitution of CHIP
coverage for private coverage occurs more frequently for
children in families at higher income levels.
(3) Congress agrees with the President that it is
appropriate that States that expand CHIP eligibility to
children at higher income levels should have achieved a high
level of health benefits coverage for low-income children and
should implement strategies to address such substitution.
(4) Congress concludes that the policies specified in this
section (and the amendments made by this section) are the
appropriate policies to address these issues.
(b) Analyses of Best Practices and Methodology in
Addressing Crowd-Out.--
(1) GAO report.--Not later than 18 months after the date of
the enactment of this Act, the Comptroller General of the
United States shall submit to the Committee on Finance of the
Senate and the Committee on Energy and Commerce of the House
of Representatives and the Secretary a report describing the
best practices by States in addressing the issue of CHIP
crowd-out. Such report shall include analyses of--
(A) the impact of different geographic areas, including
urban and rural areas, on CHIP crowd-out;
(B) the impact of different State labor markets on CHIP
crowd-out;
(C) the impact of different strategies for addressing CHIP
crowd-out;
(D) the incidence of crowd-out for children with different
levels of family income; and
(E) the relationship (if any) between changes in the
availability and affordability of dependent coverage under
employer-sponsored health insurance and CHIP crowd-out.
(2) IOM report on methodology.--The Secretary shall enter
into an arrangement with the Institute of Medicine under
which the Institute submits to the Committee on Finance of
the Senate and the Committee on Energy and Commerce of the
House of Representatives and the Secretary, not later than 18
months after the date of the enactment of this Act, a report
on--
(A) the most accurate, reliable, and timely way to
measure--
(i) on a State-by-State basis, the rate of public and
private health benefits coverage among low-income children
with family income that does not exceed 200 percent of the
poverty line; and
(ii) CHIP crowd-out, including in the case of children with
family income that exceeds 200 percent of the poverty line;
and
(B) the least burdensome way to gather the necessary data
to conduct the measurements described in subparagraph (A).
Out of any money in the Treasury not otherwise appropriated,
there are hereby appropriated $2,000,000 to carry out this
paragraph for the period ending September 30, 2010.
(3) Incorporation of definitions.--In this section, the
terms ``CHIP crowd-out'', ``children'', ``poverty line'', and
``State'' have the meanings given such terms for purposes of
CHIP.
(4) Definition of chip crowd-out.--Section 2110(c) (42
U.S.C. 1397jj(c)) is amended by adding at the end the
following:
``(9) CHIP crowd-out.--The term `CHIP crowd-out' means the
substitution of--
``(A) health benefits coverage for a child under this
title, for
``(B) health benefits coverage for the child other than
under this title or title XIX.''.
(c) Development of Best Practice Recommendations.--Section
2107 (42 U.S.C. 1397gg) is amended by adding at the end the
following:
``(g) Development of Best Practice Recommendations.--Within
6 months after the date of receipt of the reports under
subsections (a) and (b) of section 116 of the Children's
Health Insurance Program Reauthorization Act of 2009, the
Secretary, in consultation with States, including Medicaid
and CHIP directors in States, shall publish in the Federal
Register, and post on the public website for the Department
of Health and Human Services--
``(1) recommendations regarding best practices for States
to use to address CHIP crowd-out; and
``(2) uniform standards for data collection by States to
measure and report--
``(A) health benefits coverage for children with family
income below 200 percent of the poverty line; and
``(B) on CHIP crowd-out, including for children with family
income that exceeds 200 percent of the poverty line.
The Secretary, in consultation with States, including
Medicaid and CHIP directors in States, may from time to time
update the best practice recommendations and uniform
standards set published under paragraphs (1) and (2) and
shall provide for publication and posting of such updated
recommendations and standards.''.
(d) Requirement To Address CHIP Crowd-Out; Secretarial
Review.--Section 2106 (42 U.S.C. 1397ff) is amended by adding
at the end the following:
``(f) Requirement To Address CHIP Crowd-Out; Secretarial
Review.--
``(1) In general.--Not later than 6 months after the best
practice application date described in paragraph (2), each
State that has a State child health plan shall submit to the
Secretary a State plan amendment describing how the State--
``(A) will address CHIP crowd-out; and
``(B) will incorporate recommended best practices referred
to in such paragraph.
``(2) Best practice application date.--The best practice
application date described in this paragraph is the date that
is 6 months after the date of publication of recommendations
regarding best practices under section 2107(g)(1).
``(3) Secretarial review.--The Secretary shall--
``(A) review each State plan amendment submitted under
paragraph (1);
``(B) determine whether the amendment incorporates
recommended best practices referred to in paragraph (2);
``(C) in the case of a higher income eligibility State (as
defined in section 2105(c)(9)(B)), determine whether the
State meets the enrollment targets required under reference
section 2105(c)(9)(C); and
``(D) notify the State of such determinations.''.
(e) Limitation on Payments for States Covering Higher
Income Children.--
(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) Limitation on payments for states covering higher
income children.--
``(A) Determinations.--
``(i) In general.--The Secretary shall determine, for each
State that is a higher income eligibility State as of April 1
of 2011 and each subsequent year, whether the State meets the
target rate of coverage of low-income children required under
subparagraph (C) and shall notify the State in that month of
such determination.
``(ii) Determination of failure.--If the Secretary
determines in such month that a higher income eligibility
State does not meet such target rate of coverage, subject to
subparagraph (E), no payment shall be made as of October 1 of
such year on or after October 1, 2011, under this section for
child health assistance provided for higher-income children
(as defined in subparagraph (D)) under the State child health
plan unless and until the State establishes it is in
compliance with such requirement.
``(B) Higher income eligibility state.--A higher income
eligibility State described in this clause is a State that--
``(i) applies under its State child health plan an
eligibility income standard for targeted low-income children
that exceeds 300 percent of the poverty line; or
``(ii) because of the application of a general exclusion of
a block of income that is not determined by type of expense
or type of income, applies an effective income standard under
the State child health plan for such children that exceeds
300 percent of the poverty line.
``(C) Requirement for target rate of coverage of low-income
children.--
``(i) In general.--The requirement of this subparagraph for
a State is that the rate of health benefits coverage (both
private and public) for low-income children in the State is
not statistically significantly (at a p=0.05 level) less than
the target rate of coverage specified in clause (ii).
``(ii) Target rate.--The target rate of coverage specified
in this clause is the average rate (determined by the
Secretary) of health benefits coverage (both private and
public) as of January 1, 2011, among the 10 of the 50 States
and the District of Columbia with the highest percentage of
health benefits coverage (both private and public) for low-
income children.
``(iii) Standards for data.--In applying this subparagraph,
rates of health benefits coverage for States shall be
determined using the uniform standards identified by the
Secretary under section 2107(g)(2).
``(D) Higher-income child.--For purposes of this paragraph,
the term `higher income child' means, with respect to a State
child health plan, a targeted low-income child whose family
income--
``(i) exceeds 300 percent of the poverty line; or
``(ii) would exceed 300 percent of the poverty line if
there were not taken into account any general exclusion
described in subparagraph (B)(ii).
``(E) Notice and opportunity to comply with target rate.--
If the Secretary makes a determination described in
subparagraph (A)(ii) in April of a year, the Secretary--
``(i) shall provide the State with the opportunity to
submit and implement a corrective

[[Page S938]]

action plan for the State to come into compliance with the
requirement of subparagraph (C) before October 1 of such
year;
``(ii) shall not effect a denial of payment under
subparagraph (A) on the basis of such determination before
October 1 of such year; and
``(iii) shall not effect such a denial if the Secretary
determines that there is a reasonable likelihood that the
implementation of such a correction action plan will bring
the State into compliance with the requirement of
subparagraph (C).''.
(2) Construction.--Nothing in the amendment made by
paragraph (1) or this section this shall be construed as
authorizing the Secretary to limit payments under title XXI
of the Social Security Act in the case of a State that is not
a higher income eligibility State (as defined in section
2105(c)(9)(B) of such Act, as added by paragraph (1)).
(f) Treatment of Medical Support Orders.--Section 2102(b)
(42 U.S.C. 1397bb(c)) is amended by adding at the end the
following:
``(5) Treatment of medical support orders.--
``(A) In general.--Nothing in this title shall be construed
to allow the Secretary to require that a State deny
eligibility for child health assistance to a child who is
otherwise eligible on the basis of the existence of a valid
medical support order being in effect.
``(B) State election.--A State may elect to limit
eligibility for child health assistance to a targeted low-
income child on the basis of the existence of a valid medical
support order on the child's behalf, but only if the State
does not deny such eligibility for a child on such basis if
the child asserts that the order is not being complied with
for any of the reasons described in subparagraph (C) unless
the State demonstrates that none of such reasons applies in
the case involved.
``(C) Reasons for noncompliance.--The reasons described in
this subparagraph for noncompliance with a medical support
order with respect to a child are that the child is not being
provided health benefits coverage pursuant to such order
because--
``(i) of failure of the noncustodial parent to comply with
the order;
``(ii) of the failure of an employer, group health plan or
health insurance issuer to comply with such order; or
``(iii) the child resides in a geographic area in which
benefits under the health benefits coverage are generally
unavailable.''.
(g) Effective Date of Amendments; Consistency of
Policies.--The amendments made by this section shall take
effect as if enacted on August 16, 2007. The Secretary may
not impose (or continue in effect) any requirement, prevent
the implementation of any provision, or condition the
approval of any provision under any State child health plan,
State plan amendment, or waiver request on the basis of any
policy or interpretation relating to CHIP crowd-out,
coordination with other sources of coverage, target rate of
coverage, or medical support order other than under the
amendments made by this section. In the case of a State plan
amendment which was denied on or after August 16, 2007, on
the basis of any such policy or interpretation in effect
before the date of the enactment of this Act, if the State
submits a modification of such State plan amendment that
complies with title XXI of the Social Security Act as amended
by this Act, such submitted State plan amendment, as so
modified, shall be considered as if it had been submitted (as
so modified) as of the date of its original submission, but
such State plan amendment shall not be effective before the
date of the enactment of this Act.
______

SA 47. Mr. COBURN (for himself and Mr. Thune) submitted an amendment
intended to be proposed by him to the bill H.R. 2, to amend title XXI
of the Social Security Act to extend and improve the Children's Health
Insurance Program, and for other purposes; which was ordered to lie on
the table; as follows:

On page 153, between lines 3 and 4, insert the following:
(c) Required Offering of Premium Assistance for Coverage of
Children Through Private Plans Under SCHIP and Medicaid if
the State Expands Their Program Beyond Current Eligibility
Levels.--
(1) In general.--Section 2105(c) (42 U.S.C. 1397ee(c)), as
amended by section 601, is amended by adding at the end the
following:
``(12) Required offering of premium assistance.--
``(A) In general.--Notwithstanding any other provision of
this title, the child health assistance provided to any child
whose family income exceeds the income eligibility level in
effect under the State children's plan as of January 1, 2009,
shall consist of a State premium assistance subsidy (as
defined in subparagraph (C)) for qualified coverage (as
defined in subparagraph (B)) in accordance with the
requirements of this paragraph.
``(B) Qualified coverage.--In this paragraph, the term
`qualified coverage' means the following:
``(i) Qualified employer sponsored coverage.--

``(I) In general.--A group health plan or health insurance
coverage offered through an employer that is--

``(aa) substantially equivalent 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);
``(bb) made similarly available to all of the employer's
employees and for which the employer makes a contribution to
the premium that is not less for employees receiving a
premium assistance subsidy under any option available under
the State child health plan under this title or the State
plan under title XIX to provide such assistance than the
employer contribution provided for all other employees; and
``(cc) cost-effective, as determined under subclause (II).

``(II) Cost-effectiveness.--A group health plan or health
insurance coverage offered through an employer shall be
considered to be cost-effective if--

``(aa) the marginal premium cost to purchase family
coverage through the employer is less than the State cost of
providing child health assistance through the State child
health plan for all the children in the family who are
targeted low-income children; or
``(bb) the marginal premium cost between individual
coverage and purchasing family coverage through the employer
is not greater than 175 percent of the cost to the State to
provide child health assistance through the State child
health plan for a targeted low-income child.
``(ii) Qualified non-group coverage.--Health insurance
coverage offered to individuals in the non-group health
insurance market that is substantially equivalent 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).
``(iii) High deductible health plan.--A high deductible
health plan (as defined in section 223(c)(2) of the Internal
Revenue Code of 1986) purchased through 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 `premium
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 contribution 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 annual aggregate cost-sharing limit applied
under section 2103(e)(3)(B).
``(ii) State payment option.--Subject to clause (iii), a
State may provide a premium assistance subsidy directly to an
employer or as reimbursement to an employee for out-of-pocket
expenditures.
``(iii) Requirement for direct payment to employee.--A
State shall not pay a premium assistance subsidy directly to
the employee, unless the State has established procedures to
ensure that the targeted low-income child on whose behalf
such payments are made are actually enrolled in the qualified
employer sponsored coverage.
``(iv) Treatment as child health assistance.--Expenditures
for the provision of premium assistance subsidies shall be
considered child health assistance described in paragraph
(1)(C) of subsection (a) for purposes of making payments
under that subsection.
``(v) State option to require acceptance of subsidy.--A
State may condition the provision of child health assistance
under the State child health plan for a targeted low-income
child on the receipt of a premium assistance subsidy for
enrollment in qualified employer sponsored coverage if the
State determines the provision of such a subsidy to be more
cost-effective in accordance with subparagraph (B)(ii).
``(vi) Not treated as income.--Notwithstanding any other
provision of law, a premium assistance subsidy provided in
accordance with this paragraph shall not be treated as income
to the child or the parent of the child for whom such subsidy
is provided.
``(D) No requirement to provide supplemental coverage for
benefits and additional cost-sharing protection provided
under the state child health plan.--
``(i) In general.--A State that elects the option to
provide a premium assistance subsidy under this paragraph
shall not be required to provide a targeted low-income child
enrolled in qualified employer sponsored coverage with
supplemental coverage for items or services that are not
covered, or are only partially covered, under the qualified
employer sponsored coverage or cost-sharing protection other
than the protection required under section 2103(e)(3)(B).
``(ii) Notice of cost-sharing requirements.--A State shall
provide a targeted low-income child or the parent of such a
child (as appropriate) who is provided with a premium
assistance subsidy in accordance with this paragraph with
notice of the cost-sharing requirements and limitations
imposed under the qualified employer sponsored coverage in
which the child is enrolled upon the enrollment of the child
in such coverage and annually thereafter.
``(iii) Record keeping requirements.--A State may require a
parent of a targeted low-income child that is enrolled in
qualified employer-sponsored coverage to bear the
responsibility for keeping track of out-of-pocket
expenditures incurred for cost-sharing imposed under such
coverage and to notify the State when the limit on such
expenditures imposed under section 2103(e)(3)(B) has been
reached for a year from the effective date of enrollment for
such year.

[[Page S939]]

``(iv) State option for reimbursement.--A State may
retroactively reimburse a parent of a targeted low-income
child for out-of-pocket expenditures incurred after reaching
the 5 percent cost-sharing limitation imposed under section
2103(e)(3)(B) for a year.
``(E) 6-month waiting period required.--A State shall
impose at least a 6-month waiting period from the time an
individual is enrolled in private health insurance prior to
the provision of a premium assistance subsidy for a targeted
low-income child in accordance with this paragraph.
``(F) Non application of waiting period for enrollment in
the state medicaid plan or the state child health plan.--A
targeted low-income child provided a premium assistance
subsidy in accordance with this paragraph who loses
eligibility for such subsidy shall not be treated as having
been enrolled in private health insurance coverage for
purposes of applying any waiting period imposed under the
State child health plan or the State plan under title XIX for
the enrollment of the child under such plan.
``(G) Assurance of special enrollment period under group
health plans in case of eligibility for premium subsidy
assistance.--No payment shall be made under subsection (a)
for amounts expended for the provision of premium assistance
subsidies under this paragraph unless a State provides
assurances to the Secretary that the State has in effect laws
requiring a group health plan, a health insurance issuer
offering group health insurance coverage in connection with a
group health plan, and a self-funded health plan, to permit
an employee who is eligible, but not enrolled, for coverage
under the terms of the plan (or a child of such an employee
if the child is eligible, but not enrolled, for coverage
under such terms) to enroll for coverage under the terms of
the plan if the employee's child becomes eligible for a
premium assistance subsidy under this paragraph.
``(H) No effect on previously approved premium assistance
programs.--Nothing in this paragraph shall be construed as
limiting the authority of a State to offer premium assistance
under section 1906, a waiver described in paragraph (2)(B) or
(3), a waiver approved under section 1115, or other authority
in effect on February 1, 2009.
``(I) Notice of availability.--A 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 enrollment
process under the State child health plan, information
describing the availability of such subsidies 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 informed of
the availability of such subsidies under the State child
health plan.''.
(2) Application to medicaid.--Section 1906 (42 U.S.C.
1396e) is amended by inserting after subsection (c) the
following:
``(d) The provisions of section 2105(c)(12) shall apply to
a child who is eligible for medical assistance under the
State plan in the same manner as such provisions apply to a
targeted low-income child under a State child health plan
under title XXI. Section 1902(a)(34) shall not apply to a
child who is provided a premium assistance subsidy under the
State plan in accordance with the preceding sentence.''.
______

SA 48. Mr. COBURN submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

At the appropriate place, insert the following:

SEC. __. COMPLIANCE WITH STATE PARENTAL NOTIFICATION AND
CONSENT LAWS.

Notwithstanding any other provision of law, no Federal
funds shall be made available under this Act (or an amendment
made by this Act) to a health care provider to reimburse such
provider for services provided to a minor unless such
provider complies with all applicable parental notification
and consent laws of the State of residence of the minor.
______

SA 49. Mr. COBURN submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

Strike section 602 and insert the following:

SEC. 602. LIMITATION ON EXPANSION.

Section 2105(c)(8) (42 U.S.C. 1397ee(c)(8)), as added by
section 114(a), is amended by adding at the end the
following:
``(C) Requirement.--Notwithstanding subparagraphs (A) and
(B), on or after the date of enactment of this subparagraph,
the Secretary may not approve a State plan amendment or
waiver for child health assistance or health benefits to
children whose family income exceeds 300 percent of the
poverty line unless the improper payment rate for Medicaid
and CHIP (as measured by the payment error rate measurement
(PERM)) is equal to or is less than 3.5 percent.''.
______

SA 50. Mr. COBURN submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

At the end of section 601, add the following:
(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.
______

SA 51. Mr. GRASSLEY submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 93, between lines 16 and 17, insert the following:

``(VI) Attestation.--The State requires that an application
for medical assistance under this title or for child health
assistance under title XXI shall not be complete until the
parent or guardian of the child for whose eligibility the
State is relying on a finding from an Express Lane agency
attests under penalty of perjury that the information
provided to verify the citizenship or nationality of the
child is accurate, to the best of the parent's or guardian's
knowledge.

______

SA 52. Mr. GRASSLEY submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 130, between lines 7 and 8, insert the following:
(d) GAO Study and Report.--The Comptroller General or the
United States shall study and report to Congress on the
extent to which States use the option to provide presumptive
eligibility for medical assistance under Medicaid or child
health assistance under CHIP to avoid complying with the
verification of citizenship or nationality documentation
requirements of section 1903(x) of the Social Security Act or
any other eligibility requirements for receipt of medical
assistance or child health assistance.
______

SA 53. Mr. GRASSLEY submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 93, between lines 16 and 17, insert the following:

``(VI) Notice and affirmative consent.--The State requires
an Express Lane Agency to provide affirmative notice and
obtain consent in the form of a signature from all potential
enrollees in the State plan under this title or title XXI (or
the parent or guardian of a potential enrollee, in the case
of a child under age 18) that the information gathered for
purposes of applying for a specific program administered by
the Express Lane Agency may also be used for purposes of
determining one or more components of eligibility for medical
assistance under this title or for child health assistance
under title XXI.

______

SA 54. Mr. GRASSLEY submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 93, lines 12 and 13, strike ``1902(a)(46)(B) or
2105(c)(9), as applicable'' and insert ``1903(x)''.
______

SA 55. Mr. GRASSLEY submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

Beginning on page 121, strike line 20, and all that follows
through page 122, line 20, and insert the following:
``(B) Payments under the State plan for providing medical
assistance to individuals who provided inconsistent
information and were provided with a reasonable period of
time to resolve the inconsistency under this subsection or
under section 1903(x)(4) shall be included in the
determination of the State's erroneous excess payments for
medical assistance ratio under section 1903(u).
______

SA 56. Mr. GRASSLEY submitted an amendment intended to be proposed by

[[Page S940]]

him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 135, strike lines 14 through 20, and insert the
following:
``(B) In the case of a State that has elected to provide
medical assistance to a category of individuals under
subparagraph (A), the Secretary may impose a debt under an
affidavit of support against any sponsor of such an
individual on the basis of the provision of medical
assistance to such individual, consisting of all or a portion
of the cost of providing such assistance, which may include a
reasonable fee, and which shall be considered as an
unreimbursed cost, subject to such limit on the total amount
of debt as the Secretary may establish.
______

SA 57. Mr. GRASSLEY submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

Strike section 601.
______

SA 58. Mr. WEBB (for himself, Mrs. Hagan, and Mr. Sanders) submitted
an amendment intended to be proposed by him to the bill H.R. 2, to
amend title XXI of the Social Security Act to extend and improve the
Children's Health Insurance Program, and for other purposes; which was
ordered to lie on the table; as follows:

Beginning on page 271, line 9, strike all through page 273,
line 8, and insert the following:

SEC. 700. INCOME OF PARTNERS FOR PERFORMING INVESTMENT
MANAGEMENT SERVICES TREATED AS ORDINARY INCOME
RECEIVED FOR PERFORMANCE OF SERVICES.

(a) In General.--Part I of subchapter K of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new section:

``SEC. 710. SPECIAL RULES FOR PARTNERS PROVIDING INVESTMENT
MANAGEMENT SERVICES TO PARTNERSHIP.

``(a) Treatment of Distributive Share of Partnership
Items.--For purposes of this title, in the case of an
investment services partnership interest--
``(1) In general.--Notwithstanding section 702(b)--
``(A) any net income with respect to such interest for any
partnership taxable year shall be treated as ordinary income
for the performance of services, and
``(B) any net loss with respect to such interest for such
year, to the extent not disallowed under paragraph (2) for
such year, shall be treated as an ordinary loss.

All items of income, gain, deduction, and loss which are
taken into account in computing net income or net loss shall
be treated as ordinary income or ordinary loss (as the case
may be).
``(2) Treatment of losses.--
``(A) Limitation.--Any net loss with respect to such
interest shall be allowed for any partnership taxable year
only to the extent that such loss does not exceed the excess
(if any) of--
``(i) the aggregate net income with respect to such
interest for all prior partnership taxable years, over
``(ii) the aggregate net loss with respect to such interest
not disallowed under this subparagraph for all prior
partnership taxable years.
``(B) Carryforward.--Any net loss for any partnership
taxable year which is not allowed by reason of subparagraph
(A) shall be treated as an item of loss with respect to such
partnership interest for the succeeding partnership taxable
year.
``(C) Basis adjustment.--No adjustment to the basis of a
partnership interest shall be made on account of any net loss
which is not allowed by reason of subparagraph (A).
``(D) Exception for basis attributable to purchase of a
partnership interest.--In the case of an investment services
partnership interest acquired by purchase, paragraph (1)(B)
shall not apply to so much of any net loss with respect to
such interest for any taxable year as does not exceed the
excess of--
``(i) the basis of such interest immediately after such
purchase, over
``(ii) the aggregate net loss with respect to such interest
to which paragraph (1)(B) did not apply by reason of this
subparagraph for all prior taxable years.

Any net loss to which paragraph (1)(B) does not apply by
reason of this subparagraph shall not be taken into account
under subparagraph (A).
``(E) Prior partnership years.--Any reference in this
paragraph to prior partnership taxable years shall only
include prior partnership taxable years to which this section
applies.
``(3) Net income and loss.--For purposes of this section--
``(A) Net income.--The term `net income' means, with
respect to any investment services partnership interest, for
any partnership taxable year, the excess (if any) of--
``(i) all items of income and gain taken into account by
the holder of such interest under section 702 with respect to
such interest for such year, over
``(ii) all items of deduction and loss so taken into
account.
``(B) Net loss.--The term `net loss' means with respect to
such interest for such year, the excess (if any) of the
amount described in subparagraph (A)(ii) over the amount
described in subparagraph (A)(i).
``(b) Dispositions of Partnership Interests.--
``(1) Gain.--Any gain on the disposition of an investment
services partnership interest shall be treated as ordinary
income for the performance of services.
``(2) Loss.--Any loss on the disposition of an investment
services partnership interest shall be treated as an ordinary
loss to the extent of the excess (if any) of--
``(A) the aggregate net income with respect to such
interest for all partnership taxable years, over
``(B) the aggregate net loss with respect to such interest
allowed under subsection (a)(2) for all partnership taxable
years.
``(3) Disposition of portion of interest.--In the case of
any disposition of an investment services partnership
interest, the amount of net loss which otherwise would have
(but for subsection (a)(2)(C)) applied to reduce the basis of
such interest shall be disregarded for purposes of this
section for all succeeding partnership taxable years.
``(4) Distributions of partnership property.--In the case
of any distribution of property by a partnership with respect
to any investment services partnership interest held by a
partner--
``(A) the excess (if any) of--
``(i) the fair market value of such property at the time of
such distribution, over
``(ii) the adjusted basis of such property in the hands of
the partnership,
shall be taken into account as an increase in such partner's
distributive share of the taxable income of the partnership
(except to the extent such excess is otherwise taken into
account in determining the taxable income of the
partnership),
``(B) such property shall be treated for purposes of
subpart B of part II as money distributed to such partner in
an amount equal to such fair market value, and
``(C) the basis of such property in the hands of such
partner shall be such fair market value.

Subsection (b) of section 734 shall be applied without regard
to the preceding sentence.
``(5) Application of section 751.--In applying section
751(a), an investment services partnership interest shall be
treated as an inventory item.
``(c) Investment Services Partnership Interest.--For
purposes of this section--
``(1) In general.--The term `investment services
partnership interest' means any interest in a partnership
which is held by any person if such person provides (directly
or indirectly) a substantial quantity of any of the following
services with respect to the assets of the partnership in the
conduct of the trade or business of providing such services:
``(A) Advising as to the advisability of investing in,
purchasing, or selling any specified asset.
``(B) Managing, acquiring, or disposing of any specified
asset.
``(C) Arranging financing with respect to acquiring
specified assets.
``(D) Any activity in support of any service described in
subparagraphs (A) through (C).
For purposes of this paragraph, the term `specified asset'
means securities (as defined in section 475(c)(2) without
regard to the last sentence thereof), real estate,
commodities (as defined in section 475(e)(2))), or options or
derivative contracts with respect to securities (as so
defined), real estate, or commodities (as so defined).
``(2) Exception for certain capital interests.--
``(A) In general.--If--
``(i) a portion of an investment services partnership
interest is acquired on account of a contribution of invested
capital, and
``(ii) the partnership makes a reasonable allocation of
partnership items between the portion of the distributive
share that is with respect to invested capital and the
portion of such distributive share that is not with respect
to invested capital,

then subsection (a) shall not apply to the portion of the
distributive share that is with respect to invested capital.
An allocation will not be treated as reasonable for purposes
of this subparagraph if such allocation would result in the
partnership allocating a greater portion of income to
invested capital than any other partner not providing
services would have been allocated with respect to the same
amount of invested capital.
``(B) Special rule for dispositions.--In any case to which
subparagraph (A) applies, subsection (b) shall not apply to
any gain or loss allocable to invested capital. The portion
of any gain or loss attributable to invested capital is the
proportion of such gain or loss which is based on the
distributive share of gain or loss that would have been
allocable to invested capital under subparagraph (A) if the
partnership sold all of its assets immediately before the
disposition.
``(C) Invested capital.--For purposes of this paragraph,
the term `invested capital' means, the fair market value at
the time of contribution of any money or other property
contributed to the partnership.
``(D) Treatment of certain loans.--
``(i) Proceeds of partnership loans not treated as invested
capital of service providing partners.--For purposes of this
paragraph, an investment services partnership interest shall
not be treated as acquired

[[Page S941]]

on account of a contribution of invested capital to the
extent that such capital is attributable to the proceeds of
any loan or other advance made or guaranteed, directly or
indirectly, by any partner or the partnership.
``(ii) Loans from nonservice providing partners to the
partnership treated as invested capital.--For purposes of
this paragraph, any loan or other advance to the partnership
made or guaranteed, directly or indirectly, by a partner not
providing services to the partnership shall be treated as
invested capital of such partner and amounts of income and
loss treated as allocable to invested capital shall be
adjusted accordingly.
``(d) Other Income and Gain in Connection With Investment
Management Services.--
``(1) In general.--If--
``(A) a person performs (directly or indirectly) investment
management services for any entity,
``(B) such person holds a disqualified interest with
respect to such entity, and
``(C) the value of such interest (or payments thereunder)
is substantially related to the amount of income or gain
(whether or not realized) from the assets with respect to
which the investment management services are performed,

any income or gain with respect to such interest shall be
treated as ordinary income for the performance of services.
Rules similar to the rules of subsection (c)(2) shall apply
where such interest was acquired on account of invested
capital in such entity.
``(2) Definitions.--For purposes of this subsection--
``(A) Disqualified interest.--The term `disqualified
interest' means, with respect to any entity--
``(i) any interest in such entity other than indebtedness,
``(ii) convertible or contingent debt of such entity,
``(iii) any option or other right to acquire property
described in clause (i) or (ii), and
``(iv) any derivative instrument entered into (directly or
indirectly) with such entity or any investor in such entity.

Such term shall not include a partnership interest and shall
not include stock in a taxable corporation.
``(B) Taxable corporation.--The term `taxable corporation'
means--
``(i) a domestic C corporation, or
``(ii) a foreign corporation subject to a comprehensive
foreign income tax.
``(C) Investment management services.--The term `investment
management services' means a substantial quantity of any of
the services described in subsection (c)(1) which are
provided in the conduct of the trade or business of providing
such services.
``(D) Comprehensive foreign income tax.--The term
`comprehensive foreign income tax' means, with respect to any
foreign corporation, the income tax of a foreign country if--
``(i) such corporation is eligible for the benefits of a
comprehensive income tax treaty between such foreign country
and the United States, or
``(ii) such corporation demonstrates to the satisfaction of
the Secretary that such foreign country has a comprehensive
income tax.
``(e) Regulations.--The Secretary shall prescribe such
regulations as are necessary or appropriate to carry out the
purposes of this section, including regulations to--
``(1) prevent the avoidance of the purposes of this
section, and
``(2) coordinate this section with the other provisions of
this subchapter.
``(f) Cross Reference.--For 40 percent no fault penalty on
certain underpayments due to the avoidance of this section,
see section 6662.''.
(b) Application to Real Estate Investment Trusts.--
(1) In general.--Subsection (c) of section 856 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new paragraph:
``(9) Exception from recharacterization of income from
investment services partnership interests.--
``(A) In general.--Paragraphs (2), (3), and (4) shall be
applied without regard to section 710 (relating to special
rules for partners providing investment management services
to partnership).
``(B) Special rule for partnerships owned by reits.--
Section 7704 shall be applied without regard to section 710
in the case of a partnership which meets each of the
following requirements:
``(i) Such partnership is treated as publicly traded under
section 7704 solely by reason of interests in such
partnership being convertible into interests in a real estate
investment trust which is publicly traded.
``(ii) 50 percent or more of the capital and profits
interests of such partnership are owned, directly or
indirectly, at all times during the taxable year by such real
estate investment trust (determined with the application of
section 267(c)).
``(iii) Such partnership meets the requirements of
paragraphs (2), (3), and (4) (applied without regard to
section 710).''.
(2) Conforming amendment.--Paragraph (4) of section 7704(d)
of such Code is amended by inserting ``(determined without
regard to section 856(c)(8))'' after ``856(c)(2)''.
(c) Imposition of Penalty on Underpayments.--
(1) In general.--Subsection (b) of section 6662 of the
Internal Revenue Code of 1986 is amended by inserting after
paragraph (5) the following new paragraph:
``(6) The application of subsection (d) of section 710 or
the regulations prescribed under section 710(e) to prevent
the avoidance of the purposes of section 710.''.
(2) Amount of penalty.--
(A) In general.--Section 6662 of such Code is amended by
adding at the end the following new subsection:
``(i) Increase in Penalty in Case of Property Transferred
for Investment Management Services.--In the case of any
portion of an underpayment to which this section applies by
reason of subsection (b)(6), subsection (a) shall be applied
with respect to such portion by substituting `40 percent' for
`20 percent'.''.
(B) Conforming amendments.--Subparagraph (B) of section
6662A(e)(2) of such Code is amended--
(i) by striking ``section 6662(h)'' and inserting
``subsection (h) or (i) of section 6662'', and
(ii) by striking ``gross valuation misstatement penalty''
in the heading and inserting ``certain increased underpayment
penalties''.
(3) Reasonable cause exception not applicable.--Subsection
(c) of section 6664 of such Code is amended--
(A) by redesignating paragraphs (2) and (3) as paragraphs
(3) and (4), respectively,
(B) by striking ``paragraph (2)'' in paragraph (4), as so
redesignated, and inserting ``paragraph (3)'', and
(C) by inserting after paragraph (1) the following new
paragraph:
``(2) Exception.--Paragraph (1) shall not apply to any
portion of an underpayment to which this section applies by
reason of subsection (b)(6).''.
(d) Conforming Amendments.--
(1) Subsection (d) of section 731 of the Internal Revenue
Code of 1986 is amended by inserting ``section 710(b)(4)
(relating to distributions of partnership property),'' before
``section 736''.
(2) Section 741 of such Code is amended by inserting ``or
section 710 (relating to special rules for partners providing
investment management services to partnership)'' before the
period at the end.
(3) Paragraph (13) of section 1402(a) of such Code is
amended--
(A) by striking ``other than guaranteed'' and inserting
``other than--
``(A) guaranteed'',
(B) by striking the semicolon at the end and inserting ``,
and'', and
(C) by adding at the end the following new subparagraph:
``(B) any income treated as ordinary income under section
710 received by an individual who provides investment
management services (as defined in section 710(d)(2));''.
(4) Paragraph (12) of section 211(a) of the Social Security
Act is amended--
(A) by striking ``other than guaranteed'' and inserting
``other than--
``(A) guaranteed'',
(B) by striking the semicolon at the end and inserting ``,
and'', and
(C) by adding at the end the following new subparagraph:
``(B) any income treated as ordinary income under section
710 of the Internal Revenue Code of 1986 received by an
individual who provides investment management services (as
defined in section 710(d)(2) of such Code);''.
(5) The table of sections for part I of subchapter K of
chapter 1 of such Code is amended by adding at the end the
following new item:

``Sec. 710. Special rules for partners providing investment management
services to partnership.''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to taxable years ending after January 27, 2009.
(2) Partnership taxable years which include effective
date.--In applying section 710(a) of the Internal Revenue
Code of 1986 (as added by this section) in the case of any
partnership taxable year which includes January 27, 2009, the
amount of the net income referred to in such section shall be
treated as being the lesser of the net income for the entire
partnership taxable year or the net income determined by only
taking into account items attributable to the portion of the
partnership taxable year which is after such date.
(3) Dispositions of partnership interests.--Section 710(b)
of the Internal Revenue Code of 1986 (as added by this
section) shall apply to dispositions and distributions after
January 27, 2009.
(4) Other income and gain in connection with investment
management services.--Section 710(d) of such Code (as added
by this section) shall take effect on January 27, 2009.
(5) Publicly traded partnerships.--For purposes of applying
section 7704, the amendments made by this section shall apply
to taxable years beginning after December 31, 2010.

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
paragraph (1) and inserting ``$38.05 per thousand'',
(2) by striking ``20.719 percent (18.063 percent on cigars
removed during 2000 or 2001)'' in paragraph (2) and inserting
``39.9 percent'', and
(3) by striking ``$48.75 per thousand ($42.50 per thousand
on cigars removed during 2000

[[Page S942]]

or 2001)'' in paragraph (2) and inserting ``30.44 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 ``$38.05 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 ``$79.91 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 ``2.38
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 ``4.76
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
``$1.142 cents'', and
(2) by striking ``19.5 cents (17 cents on chewing tobacco
removed during 2000 or 2001)'' in paragraph (2) and inserting
``38.05 cents''.
(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 ``$2.1404
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
``$18.73''.
______

SA 59. Mr. VITTER submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

Strike section 114 and insert the following:

SEC. 114. CHIP GROSS INCOME ELIGIBILITY CEILING.

(a) Application of CHIP Eligibility Ceiling.--
(1) In general.--Section 2110 (42 U.S.C. 1397jj) is
amended--
(A) in subsection (b)(1)--
(i) by striking ``and'' at the end of subparagraph (B);
(ii) by striking the period at the end of subparagraph (C)
and inserting ``; and''; and
(iii) by adding at the end the following new subparagraph:
``(D) whose gross family income (as defined in subsection
(c)(9)) does not exceed 250 percent of the poverty line.'';
and
(B) in subsection (c), by adding at the end the following
new paragraph:
``(9) Gross family income.--
``(A) In general.--Subject to subparagraph (B), the term
`gross family income' means, with respect to an individual,
gross income (as defined by the Secretary in regulations) for
the members of the individual's family. For purposes of the
previous sentence, in defining `gross income' the Secretary
shall, to the maximum extent practicable, include income from
whatever source, other than amounts deducted under section
62(a)(1) of the Internal Revenue Code of 1986.
``(B) Income disregards authorized.--A State may provide,
through a State plan amendment and with the approval of the
Secretary, for the disregard from gross family income of one
or more amounts so long as the total amount of such
disregards for a family does not exceed $250 per month, or
$3,000 per year.''.
(2) Denial of federal matching payments for state schip
expenditures for individuals with gross family income above
250 percent of the poverty line.--Section 2105(c) (42 U.S.C.
1397ee(c)) is amended by adding at the end the following new
paragraph:
``(8) Denial of payments for expenditures for child health
assistance for individuals whose gross family income exceeds
250 percent of the poverty line.--No payment may be made
under this section, for any expenditures for providing child
health assistance or health benefits coverage under a State
child health plan under this title, including under a waiver
under section 1115, with respect to an individual whose gross
family income (as defined in section 2110(c)(9)) exceeds 250
percent of the poverty line.''.
(b) Effective Date; Transition.--
(1) In general.--Subject to paragraph (2), the amendments
made by this section shall apply to payments made for items
and services furnished on or after the first day of the first
calendar quarter beginning more than 90 days after the date
of the enactment of this Act.
(2) Transition.--The amendments made by--
(A) subsection (a)(1) shall not apply to an individual who
was receiving, or was determined eligible to receive, child
health assistance or health benefits coverage under a State
child health plan under title XXI of the Social Security Act,
including under a waiver under section 1115 of such Act, as
of the day before the date of the enactment of this Act,
until such date as the individual is determined ineligible
using income standards or methodologies in place as of the
day before the date of the enactment of this Act; and
(B) subsection (a)(2) shall not apply to payment for items
and services furnished to an individual described in
subparagraph (B).
______

SA 60. Mr. WICKER (for himself and Mr. Cochran) submitted an
amendment intended to be proposed by him to the bill H.R. 2, to amend
title XXI of the Social Security Act to extend and improve the
Children's Health Insurance Program, and for other purposes; which was
ordered to lie on the table; as follows:

On page 76, after line 23, add the following:

SEC. 116. ASSURING COVERAGE OF LOW-INCOME CHILDREN.

Section 2105(c) (42 U.S.C. 1397ee(c)), as amended by
section 601(a)(1), is amended by adding at the end the
following new paragraph:
``(12) No payments to any state for expenditures for child
health assistance or health benefits coverage for individuals
whose gross family income exceeds 200 percent of the poverty
line until at least 90 percent of all united states eligible
children whose gross family income does not exceed 200
percent of the poverty line are enrolled in medicaid or chip
.--Notwithstanding any other provision of this title or title
XIX, for fiscal year quarters beginning on or after January
1, 2009, no payments shall be made to any State under
subsection (a)(1) or section 1903(a) on the basis of the
enhanced FMAP for providing child health assistance or health
benefits coverage for any individual whose gross family
income (as defined by the Secretary) exceeds 200 percent of
the poverty line for any fiscal year quarter that begins
before the date on which the Secretary certifies to Congress
that at least 90 percent of all children in the United States
whose gross family income (as so defined) does not exceed 200
percent of the poverty line, and who are eligible for child
health assistance under a State child health plan under this
title or for medical assistance under a State plan under
title XIX (or under a waiver of such plans), are enrolled in
such plans.''.
______

SA 61. Mr. BINGAMAN submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 130, strike lines 8 through 13, and insert the
following:
(d) Applicability; General Effective Date.--
(1) Condition for application.--
(A) In general.--
(i) General effective date.--Subject to clause (ii), except
as provided in subparagraph (B), the amendments made by this
section shall take effect on January 1, 2010.
(ii) Certification requirement.--Notwithstanding any other
provision of law, no State with a State plan under Medicaid
or a State child health plan under CHIP shall be required to
comply with section 1902(a)(46)(B) or 2105(c)(9) of the
Social Security Act before the date on which the Secretary
and the Commissioner of Social Security jointly certify that
a significant number of United States citizens, including
citizen children, who are eligible for coverage under such
plans will not lose that coverage as a result of the
application of such requirements. For purposes of the
preceding sentence, the Secretary and the Commissioner of
Social Security shall determine what is a significant number
of such citizens on the basis of the best estimates available
of the number of non-citizens that the application of such
requirements may prevent from fraudulently obtaining
assistance under such plans, compared to the best estimates
available of the number of United States citizens that may be
inappropriately disenrolled from, or prevented from enrolling
in, such plans as a result of the application of such
requirements.
(iii) Extension of prescription drug discounts to enrollees
of medicaid managed care organizations.--Section
1903(m)(2)(A) (42 U.S.C. 1396b(m)(2)(A)) is amended--

(I) In general.--

(aa) in clause (xi), by striking ``and'' at the end;
(bb) in clause (xii), by striking the period at the end and
inserting ``; and''; and
(cc) by adding at the end the following:
``(xiii) such contract provides that (I) payment for
covered outpatient drugs dispensed to individuals eligible
for medical assistance who are enrolled with the entity shall
be subject to the same rebate required by the agreement
entered into under section 1927 as the State is subject to
and that the State shall allow the entity to collect such
rebates from manufacturers, and (II) capitation rates paid to
the entity shall be based on actual cost experience related
to rebates and subject to the Federal regulations requiring
actuarially sound rates.''.

(II) Conforming amendments.--Section 1927 (42 U.S.C. 1396r-
8) is amended--

(aa) in subsection (d)--
(AA) in paragraph (1), by adding at the end the following:
``(C) Notwithstanding the subparagraphs (A) and (B)--
``(i) a medicaid managed care organization with a contract
under section 1903(m) may exclude or otherwise restrict
coverage of a covered outpatient drug on the basis of
policies or practices of the organization, such as

[[Page S943]]

those affecting utilization management, formulary adherence,
and cost sharing or dispute resolution, in lieu of any State
policies or practices relating to the exclusion or
restriction of coverage of such drugs; and
``(ii) nothing in this section or paragraph (2)(A)(xiii) of
section 1903(m) shall be construed as requiring a medicaid
managed care organization with a contract under such section
to maintain the same such polices and practices as those
established by the State for purposes of individuals who
receive medical assistance for covered outpatient drugs on a
fee-for service basis.''; and
(bb) in paragraph (4), by inserting after subparagraph (E)
the following:
``(F) Notwithstanding the preceding subparagraphs of this
paragraph, any formulary established by medicaid managed care
organization with a contract under section 1903(m) may be
based on positive inclusion of drugs selected by a formulary
committee consisting of physicians, pharmacists, and other
individuals with appropriate clinical experience as long as
drugs excluded from the formulary are available through prior
authorization, as described in paragraph (5).''; and
(cc) in subsection (j), by striking paragraph (1) and
inserting the following:
``(1) Covered outpatients drugs are not subject to the
requirements of this section if such drugs are--
``(A) dispensed by a health maintenance organization other
than a medicaid managed care organization with a contract
under section 1903(m); and
``(B) subject to discounts under section 340B of the Public
Health Service Act.''.

(III) Effective date.--The amendments made by this
subsection take effect on the date of enactment of this Act
and apply to rebate agreements entered into or renewed under
section 1927 of the Social Security Act (42 U.S.C. 1396r-8)
on or after such date.

(iv) Increased funding for the medicaid improvement fund.--
[Review with CBO to specify numbers and whether savings all
go to 2014 or also to 2015 through 2018]Section 1941(b)(1)(A)
(42 U.S.C. 1936w-1(b)(1)(A)) is amended by striking
``$100,000,000'' and inserting ``$____''.
______

SA 62. Mr. BINGAMAN submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 108, between lines 3 and 4, insert the following:
``(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.''.
______

SA 63. Mr. BINGAMAN submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 99, beginning on line 8 strike ``through'' and all
that follows through ``application,'' on line 10, and insert
``in writing, by telephone, orally, through electronic
signature, or through any other means specified by the
Secretary and''.
On page 108, between lines 3 and 4, insert the following:
``(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.''.
______

SA 64. Mr. BINGAMAN submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 99, beginning on line 8 strike ``through'' and all
that follows through ``application,'' on line 10, and insert
``in writing, by telephone, orally, through electronic
signature, or through any other means specified by the
Secretary and''.
______

SA 65. Mr. MARTINEZ (for himself, Mr. Vitter, Mr. Wicker, Mr.
Bunning, Mr. Enzi, Mr. Coburn, Mr. Johanns, Mr. Brownback, Mr. Inhofe,
Mr. Chambliss, and Mr. DeMint) submitted an amendment intended to be
proposed by him to the bill H.R. 2, to amend title XXI of the Social
Security Act to extend and improve the Children's Health Insurance
Program, and for other purposes; which was ordered to lie on the table;
as follows:

At the appropriate place, insert the following:

SEC. __. RESTORATION OF PROHIBITION ON FUNDING OF
NONGOVERNMENTAL ORGANIZATIONS THAT PROMOTE
ABORTION AS A METHOD OF BIRTH CONTROL (``MEXICO
CITY POLICY'').

Notwithstanding any other provision of law, regulation, or
policy, including the memorandum issued by the President on
January 23, 2009, to the Administrator of the United States
Agency for International Development, titled ``Mexico City
Policy and Assistance for Voluntary Family Planning,'' no
funds authorized under part I of the Foreign Assistance Act
of 1961 (22 U.S.C. 2151 et seq.) for population planning
activities or other population or family planning assistance
may be made available for any private, nongovernmental, or
multilateral organization that performs or actively promotes
abortion as a method of birth control.
______

SA 66. Mr. CORNYN submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

Strike section 114 and insert the following:

SEC. 114. DENIAL OF PAYMENTS FOR COVERAGE OF CHILDREN WITH
EFFECTIVE FAMILY INCOME THAT EXCEEDS 200
PERCENT OF THE POVERTY LINE.

(a) In General.--Section 2105(c) (42 U.S.C. 1397ee(c)) is
amended by adding at the end the following new paragraph:
``(8) Denial of payments for expenditures for child health
assistance for children whose effective family income exceeds
200 percent of the poverty line.--For child health assistance
furnished after the date of the enactment of this paragraph,
no payment shall be made under this section for any
expenditures for providing child health assistance or health
benefits coverage for a targeted low-income child whose
family income (as determined without regard to the
application of any general exclusion or disregard of a block
of income that is not determined by type of expense or type
of income (regardless of whether such an exclusion or
disregard is permitted under section 1902(r))) would exceed
200 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) Grants to States.--
(1) In general.--From amounts appropriated under paragraph
(2), the Secretary shall make grants to States as follows:
(A) 75 percent of such amounts shall be directed toward
increasing coverage for low-income children under CHIP.
(B) 25 percent of such amounts shall be directed toward
activities assisting States, especially States with a high
percentage of eligible, but not enrolled children, in
outreach and enrollment activities under CHIP, such as--
(i) improving and simplifying enrollment systems,
including--

(I) increasing staffing and computer systems to meet
Federal and State standards;
(II) decreasing turn-around time while maintaining program
integrity; and

(ii) improving outreach and application assistance,
including--

(I) connecting children with a medical home and keeping
them healthy;
(II) developing systems to identify, inform, and fix
enrollment system problems;
(III) supporting awareness of, and access to, other
critical health programs;
(IV) pursuing new performance goals to cut ``procedural
denials'' to the lowest possible level; and
(V) coordinating community- and school-based outreach
programs.

(2) Funding.--There is appropriated to provide grants under
paragraph (1) an amount equal to the amount of Federal funds
that the Director of the Congressional Budget Office
certifies would have been expended for the period beginning
April 1, 2009, and ending September 30, 2013, if section 114
(relating to limitation on matching rate for States that
propose to cover children with effective family income that
exceeds 300 percent of the poverty line) of S. 275 (111th
Congress) as reported by the Committee on Finance of the
Senate and placed on the Senate calendar on January 16, 2009,
had been enacted.
______

SA 67. Mr. CORNYN submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 45, between lines 17 and 18, insert the following:
``(3) Limitation.--
``(A) In general.--A State shall not be a shortfall State
described in paragraph (2) if the State provides coverage
under this title to children whose family income (as
determined without regard to the application of any general
exclusion or disregard of a block of income that is not
determined by type of expense or type of income (regardless
of whether such an exclusion or disregard is permitted under
section 1902(r))) exceeds 200 percent of the poverty line.
``(B) Grants to states with unspent funds.--Of any funds
that are not redistributed under this subsection because of
the application of subparagraph (A), the Secretary shall make
grants to States as follows:
``(i) 75 percent of such funds shall be directed toward
increasing coverage under this title for low-income children.

[[Page S944]]

``(ii) 25 percent of such funds shall be directed toward
activities assisting States, especially States with a high
percentage of eligible, but not enrolled children, in
outreach and enrollment activities under this title, such
as--

``(I) improving and simplifying enrollment systems,
including--

``(aa) increasing staffing and computer systems to meet
Federal and State standards;
``(bb) decreasing turn-around time while maintaining
program integrity; and

``(II) improving outreach and application assistance,
including--

``(aa) connecting children with a medical home and keeping
them healthy;
``(bb) developing systems to identify, inform, and fix
enrollment system problems;
``(cc) supporting awareness of, and access to, other
critical health programs;
``(dd) pursuing new performance goals to cut `procedural
denials' to the lowest possible level; and
``(ee) coordinating community- and school-based outreach
programs.''.
______

SA 68. Mr. GRASSLEY submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 75, beginning on line 13, strike ``whose'' and all
that follows through line 17, and insert the following:
``whose family income would exceed 300 percent of the poverty
line (determined without regard to any block or other income
disregard and without excluding any type of expense
(regardless, in the case of child health assistance or health
benefits coverage provided in the form of coverage under a
Medicaid program under paragraph (2) of section 2101(a) (or a
combination of the coverage options under paragraphs (1) and
(2) of such section) of whether such a disregard or exclusion
is permitted under section 1902(r)).''.
______

SA 69. Mr. GRASSLEY submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

Beginning on page 75, strike line 18 and all that follows
through page 76, line 2.
______

SA 70. Mr. GRASSLEY submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

Strike section 114 and insert the following:

SEC. 114. DENIAL OF PAYMENTS FOR COVERAGE OF CHILDREN WITH
EFFECTIVE FAMILY INCOME THAT EXCEEDS 300
PERCENT OF THE POVERTY LINE.

Section 2105(c) (42 U.S.C. 1397ee(c)) is amended by adding
at the end the following new paragraph:
``(8) Denial of payments for expenditures for child health
assistance for children whose effective family income exceeds
300 percent of the poverty line.--For child health assistance
furnished after the date of the enactment of this paragraph,
no payment shall be made under this section for 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.''.
______

SA 71. Mr. GRASSLEY submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``SCHIP Funding Extension Act
of 2009''.

SEC. 2. FUNDING THROUGH FISCAL YEAR 2010.

(a) Through Fiscal Year 2010.--
(1) In general.--Section 2104 of the Social Security Act
(42 U.S.C. 1397dd(a)), as amended by section 201(a)(1) of the
Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public
Law 110-173) is amended--
(A) in subsection (a)(11), by striking ``and 2009'' and
inserting ``through 2010''; and
(B) in subsection (c)(4)(B), by striking ``2009'' and
inserting ``2010''.
(2) Availability of extended funding.--Funds made available
from any allotment made from funds appropriated under
subsection (a)(11) or (c)(4)(B) of section 2104 of the Social
Security Act (42 U.S.C. 1397dd) for fiscal year 2009 or 2010
shall not be available for child health assistance for items
and services furnished after September 30, 2010.
(b) Additional Allotments To Maintain SCHIP Programs
Through Fiscal Year 2010.--Section 2104 of the Social
Security Act (42 U.S.C. 1397dd) is amended by striking
subsection (l) and inserting the following new subsections:
``(l) Additional Allotments To Maintain SCHIP Programs for
Fiscal Year 2009.--
``(1) Appropriation; allotment authority.--For the purpose
of providing additional allotments described in subparagraphs
(A) and (B) of paragraph (3), there is appropriated, out of
any money in the Treasury not otherwise appropriated, such
sums as may be necessary, not to exceed $3,000,000,000 for
fiscal year 2009.
``(2) Shortfall states described.--For purposes of
paragraph (3), a shortfall State described in this paragraph
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 Secretary, that the Federal
share amount of the projected expenditures under such plan
for such State for fiscal year 2009 will exceed the sum of--
``(A) the amount of the State's allotments for each of
fiscal years 2007 and 2008 that will not be expended by the
end of fiscal year 2008;
``(B) the amount, if any, that is to be redistributed to
the State during fiscal year 2009 in accordance with
subsection (f); and
``(C) the amount of the State's allotment for fiscal year
2009.
``(3) Allotments.--In addition to the allotments provided
under subsections (b) and (c), subject to paragraph (4), of
the amount available for the additional allotments under
paragraph (1) for fiscal year 2009, the Secretary shall
allot--
``(A) to each shortfall State described in paragraph (2)
not described in subparagraph (B), such amount as the
Secretary determines will eliminate the estimated shortfall
described in such paragraph for the State; and
``(B) to each commonwealth or territory described in
subsection (c)(3), an amount equal to the percentage
specified in subsection (c)(2) for the commonwealth or
territory multiplied by 1.05 percent of the sum of the
amounts determined for each shortfall State under
subparagraph (A).
``(4) Proration rule.--If the amounts available for
additional allotments under paragraph (1) are less than the
total of the amounts determined under subparagraphs (A) and
(B) of paragraph (3), the amounts computed under such
subparagraphs shall be reduced proportionally.
``(5) Retrospective adjustment.--The Secretary may adjust
the estimates and determinations made to carry out this
subsection as necessary on the basis of the amounts reported
by States not later than November 30, 2008, on CMS Form 64 or
CMS Form 21, as the case may be, and as approved by the
Secretary.
``(6) One-year availability; no redistribution of
unexpended additional allotments.--Notwithstanding
subsections (e) and (f), amounts allotted to a State pursuant
to this subsection for fiscal year 2009, subject to paragraph
(5), shall only remain available for expenditure by the State
through September 30, 2009. Any amounts of such allotments
that remain unexpended as of such date shall not be subject
to redistribution under subsection (f).
``(m) Additional Allotments To Maintain SCHIP Programs for
Fiscal Year 2010.--
``(1) Appropriation; allotment authority.--For the purpose
of providing additional allotments described in subparagraphs
(A) and (B) of paragraph (3), there is appropriated, out of
any money in the Treasury not otherwise appropriated, such
sums as may be necessary, not to exceed $4,000,000,000 for
fiscal year 2010.
``(2) Shortfall states described.--For purposes of
paragraph (3), a shortfall State described in this paragraph
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 Secretary, that the Federal
share amount of the projected expenditures under such plan
for such State for fiscal year 2010 will exceed the sum of--
``(A) the amount of the State's allotments for each of
fiscal years 2008 and 2009 that will not be expended by the
end of fiscal year 2009;
``(B) the amount, if any, that is to be redistributed to
the State during fiscal year 2010 in accordance with
subsection (f); and
``(C) the amount of the State's allotment for fiscal year
2010.
``(3) Allotments.--In addition to the allotments provided
under subsections (b) and (c), subject to paragraph (4), of
the amount available for the additional allotments under
paragraph (1) for fiscal year 2010, the Secretary shall
allot--
``(A) to each shortfall State described in paragraph (2)
not described in subparagraph (B) such amount as the
Secretary determines will eliminate the estimated shortfall
described in such paragraph for the State; and
``(B) to each commonwealth or territory described in
subsection (c)(3), an amount equal to the percentage
specified in subsection (c)(2) for the commonwealth or
territory multiplied by 1.05 percent of the sum of the
amounts determined for each shortfall State under
subparagraph (A).
``(4) Proration rule.--If the amounts available for
additional allotments under paragraph (1) are less than the
total of the amounts determined under subparagraphs (A) and
(B) of paragraph (3), the amounts

[[Page S945]]

computed under such subparagraphs shall be reduced
proportionally.
``(5) Retrospective adjustment.--The Secretary may adjust
the estimates and determinations made to carry out this
subsection as necessary on the basis of the amounts reported
by States not later than November 30, 2010, on CMS Form 64 or
CMS Form 21, as the case may be, and as approved by the
Secretary.
``(6) Availability; no redistribution of unexpended
additional allotments.--Notwithstanding subsections (e) and
(f), amounts allotted to a State pursuant to this subsection
for fiscal year 2010, subject to paragraph (5), shall only
remain available for expenditure by the State through
September 30, 2010. Any amounts of such allotments that
remain unexpended as of such date shall not be subject to
redistribution under subsection (f).''.
(c) Extension of Treatment of Qualifying States.--
(1) In general.--Section 2105(g)(1)(A) of the Social
Security Act (42 U.S.C. 1397ee(g)(1)(A)) is amended by
striking ``or 2009'' and inserting ``2009, or 2010''.
(2) Applicability.--The amendment made by paragraph (1)
shall be in effect through September 30, 2010.
(3) 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.
______

SA 72. Mr. GRASSLEY submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 153, between lines 12 and 13, insert the following:
(d) Requirement for States Covering Children Whose Income
Exceeds 200 Percent of the Poverty Line to Offer Premium
Assistance for All Families of Targeted Low-Income
Children.--
(1) In general.--Section 2102(a) (42 U.S.C. 1397b(a)) is
amended--
(A) in paragraph (6), by striking ``and'' at the end;
(B) in paragraph (7), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following new paragraph:
``(8) effective for plan years beginning on or after
October 1, 2009, in the case of a State that provides child
health assistance for any targeted low-income child with a
family gross income (determined without regard to any block
or other income disregard and without excluding any type of
expense (regardless, in the case of child health assistance
or health benefits coverage provided in the form of coverage
under a Medicaid program under paragraph (2) of section
2101(a) (or a combination of the coverage options under
paragraphs (1) and (2) of such section) of whether such a
disregard or exclusion is permitted under section 1902(r)))
that exceeds 200 percent of the poverty line, how the plan
shall offer child health assistance in the form of premium
assistance to all targeted low-income children who have
access to private health insurance coverage or coverage under
a group health plan.''.
______

SA 73. Mr. GRASSLEY submitted an amendment intended to be proposed by
him to the bill H.R. 2, to amend title XXI of the Social Security Act
to extend and improve the Children's Health Insurance Program, and for
other purposes; which was ordered to lie on the table; as follows:

Beginning on page 58, strike line 14 and all that follows
through page 62, line 17, and insert the following:
``(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 the first
day of the first month that begins after the 6-month
termination period, 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 6 months after the date of the enactment of
this act.--
``(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 the last day of the
6-month termination period.
``(B) Extension upon state request.--If an applicable
existing waiver described in subparagraph (A) would otherwise
expire before the date described in paragraph (1)(A),
notwithstanding the requirements of subsections (e) and (f)
of section 1115, a State may submit, not later than 30 days
after the date of enactment of this Act, 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 the last day of the 6-month termination period.
``(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 6-month termination
period.
``(3) State option to apply for medicaid waiver to continue
coverage for nonpregnant childless adults.--
(A) In general.--Each State for which coverage under an
applicable existing waiver is terminated under paragraph
(2)(A) may submit, not later than 90 days after the date of
enactment of this Act, 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 the last day of the 6-month termination
period, on the application of a State for a Medicaid
nonpregnant childless adults waiver that was submitted to the
Secretary by the date described in subparagraph (A), the
application shall be deemed approved.
``(C) Standard for budget neutrality.--The budget
neutrality requirement applicable with respect to
expenditures for medical assistance under a Medicaid
nonpregnant childless adults waiver shall--
``(i) in the case of any period of fiscal year 2009 in
which such waiver is in effect, allow expenditures 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 any previous corresponding period in
fiscal year 2009, increased by the percentage increase (if
any) in the projected nominal per capita amount of National
Health Expenditures for 2009 over 2008, as most recently
published by the Secretary;
``(ii) in the case of fiscal year 2010, allow expenditures
for medical assistance under title XIX for all such adults to
not exceed the sum of the total amount of payments made to
the State under paragraph (2)(B) for fiscal year 2009 and
under title XIX for any period of fiscal year 2009 in which
such waiver is in effect, 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
``(iii) 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.
``(4) 6-month termination period.--In this subsection, the
term ``6-month termination period'' means the period that
begins with the first day of the first month that begins on
or after the date of enactment of this Act and ends on the
last day of the 5th succeeding month.

____________________