[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3963 Placed on Calendar Senate (PCS)]






                                                       Calendar No. 450
110th CONGRESS
  1st Session
                                H. R. 3963


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 25, 2007

                    Received and read the first time

                            October 26, 2007

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 AN ACT


 
To amend title XXI of the Social Security Act to extend and improve the 
      Children's Health Insurance Program, and for other purposes.

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

SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; REFERENCES; 
              TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as ``Children's Health 
Insurance Program Reauthorization Act of 2007''.
    (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 2008 
                            through 2012.
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. 2-year initial availability of CHIP allotments.
Sec. 106. Making permanent redistribution of unused fiscal year 2005 
                            allotments to address State funding 
                            shortfalls; conforming extension of 
                            qualifying State authority; redistribution 
                            of unused allotments for subsequent fiscal 
                            years.
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.
Sec. 114. Denial of payments for coverage of children with effective 
                            family income that exceeds 300 percent of 
                            the poverty line.
Sec. 115. State authority under Medicaid.
Sec. 116. Preventing substitution of CHIP coverage for private 
                            coverage.
                   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.
      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. Demonstration projects relating to diabetes prevention.
Sec. 506. Clarification of coverage of services provided through 
                            school-based health centers.
     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. County Medicaid health insuring organizations; GAO report on 
                            Medicaid managed care payment rates.
Sec. 615. Adjustment in computation of Medicaid FMAP to disregard an 
                            extraordinary employer pension 
                            contribution.
Sec. 616. Moratorium on certain payment restrictions.
Sec. 617. Medicaid DSH allotments for Tennessee and Hawaii.
Sec. 618. Clarification treatment of regional medical center.
Sec. 619. Extension of SSI web-based asset demonstration project to the 
                            Medicaid program.
                      Subtitle C--Other Provisions

Sec. 621. Support for injured servicemembers.
Sec. 622. Outreach regarding health insurance options available to 
                            children.
Sec. 623. Sense of 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. 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 October 1, 2007, 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) Contingent Effective Date for CHIP Funding for Fiscal Year 
2008.--Notwithstanding any other provision of law, if funds are 
appropriated under any law (other than this Act) to provide allotments 
to States under CHIP for all (or any portion) of fiscal year 2008--
            (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 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 (9), by striking ``and'' at the end;
            (2) in paragraph (10), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding at the end the following new paragraphs:
            ``(11) for fiscal year 2008, $9,125,000,000;
            ``(12) for fiscal year 2009, $10,675,000,000;
            ``(13) for fiscal year 2010, $11,850,000,000;
            ``(14) for fiscal year 2011, $13,750,000,000; and
            ``(15) for fiscal year 2012, for purposes of making 2 semi-
        annual allotments--
                    ``(A) $1,150,000,000 for the period beginning on 
                October 1, 2011, and ending on March 31, 2012, and
                    ``(B) $1,150,000,000 for the period beginning on 
                April 1, 2012, and ending on September 30, 2012.''.

SEC. 102. ALLOTMENTS FOR STATES AND TERRITORIES FOR FISCAL YEARS 2008 
              THROUGH 2012.

    Section 2104 (42 U.S.C. 1397dd) is amended--
            (1) in subsection (b)(1), by striking ``subsection (d)'' 
        and inserting ``subsections (d) and (i)'';
            (2) in subsection (c)(1), by striking ``subsection (d)'' 
        and inserting ``subsections (d) and (i)(4)''; and
            (3) by adding at the end the following new subsection:
    ``(i) Allotments for Fiscal Years 2008 Through 2012.--
            ``(1) For fiscal year 2008.--
                    ``(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 2008 from the amount made available 
                under subsection (a)(11), 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 2007, 
                        multiplied by the allotment increase factor 
                        determined under paragraph (5) for fiscal year 
                        2008.
                            ``(ii) The Federal share of the amount 
                        allotted to the State for fiscal year 2007 
                        under subsection (b), multiplied by the 
                        allotment increase factor determined under 
                        paragraph (5) for fiscal year 2008.
                            ``(iii) Only in the case of--
                                    ``(I) a State that received a 
                                payment, redistribution, or allotment 
                                under paragraph (1), (2), or (4) of 
                                subsection (h), the amount of the 
                                projected total Federal payments to the 
                                State under this title for fiscal year 
                                2007, as determined on the basis of the 
                                November 2006 estimates certified by 
                                the State to the Secretary;
                                    ``(II) a State whose projected 
                                total Federal payments to the State 
                                under this title for fiscal year 2007, 
                                as determined on the basis of the May 
                                2006 estimates certified by the State 
                                to the Secretary, were at least 
                                $95,000,000 but not more than 
                                $96,000,000 higher than the projected 
                                total Federal payments to the State 
                                under this title for fiscal year 2007 
                                on the basis of the November 2006 
                                estimates, the amount of the projected 
                                total Federal payments to the State 
                                under this title for fiscal year 2007 
                                on the basis of the May 2006 estimates; 
                                or
                                    ``(III) a State whose projected 
                                total Federal payments under this title 
                                for fiscal year 2007, as determined on 
                                the basis of the November 2006 
                                estimates certified by the State to the 
                                Secretary, exceeded all amounts 
                                available to the State for expenditure 
                                for fiscal year 2007 (including any 
                                amounts paid, allotted, or 
                                redistributed to the State in prior 
                                fiscal years), the amount of the 
                                projected total Federal payments to the 
                                State under this title for fiscal year 
                                2007, as determined on the basis of the 
                                November 2006 estimates certified by 
                                the State to the Secretary,
                        multiplied by the allotment increase factor 
                        determined under paragraph (5) for fiscal year 
                        2008.
                            ``(iv) The projected total Federal payments 
                        to the State under this title for fiscal year 
                        2008, as determined on the basis of the August 
                        2007 projections certified by the State to the 
                        Secretary by not later than September 30, 2007.
                    ``(B) For the commonwealths and territories.--
                Subject to the succeeding provisions of this paragraph 
                and paragraph (4), the Secretary shall allot for fiscal 
                year 2008 from the amount made available under 
                subsection (a)(11) 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 
                1998 through 2007, multiplied by the allotment increase 
                factor determined under paragraph (5) for fiscal year 
                2008, except that subparagraph (B) thereof shall be 
                applied by substituting `the United States' for `the 
                State'.
                    ``(C) Deadline and data for determining fiscal year 
                2008 allotments.--In computing the amounts under 
                subparagraphs (A) and (B) that determine the allotments 
                to States for fiscal year 2008, the Secretary shall use 
                the most recent data available to the Secretary before 
                the start of that fiscal year. The Secretary may adjust 
                such amounts and allotments, as necessary, on the basis 
                of the expenditure data for the prior year reported by 
                States on CMS Form 64 or CMS Form 21 not later than 
                November 30, 2007, but in no case shall the Secretary 
                adjust the allotments provided under subparagraph (A) 
                or (B) for fiscal year 2008 after December 31, 2007.
                    ``(D) 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 revised projection described in 
                subparagraph (A)(iv) in order to take into account 
                changes in such projections attributable to the 
                application of paragraph (4) of such section.
            ``(2) For fiscal years 2009 through 2011.--
                    ``(A) In general.--Subject to paragraphs (4) and 
                (6), from the amount made available under paragraphs 
                (12) through (14) of subsection (a) for each of fiscal 
                years 2009 through 2011, 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 
                        2009.--For fiscal year 2009, the allotment of 
                        the State is equal to the sum of--
                                    ``(I) the amount of the State 
                                allotment under paragraph (1) for 
                                fiscal year 2008; and
                                    ``(II) the amount of any payments 
                                made to the State under subsection (j) 
                                for fiscal year 2008,
                        multiplied by the allotment increase factor 
                        under paragraph (5) for fiscal year 2009.
                            ``(ii) Rebasing in fiscal year 2010.--For 
                        fiscal year 2010, 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 2009 
                        (including payments made to the State under 
                        subsection (j) for fiscal year 2009 as well as 
                        amounts redistributed to the State in fiscal 
                        year 2009), multiplied by the allotment 
                        increase factor under paragraph (5) for fiscal 
                        year 2010.
                            ``(iii) Growth factor update for fiscal 
                        year 2011.--For fiscal year 2011, the allotment 
                        of the State is equal to the sum of--
                                    ``(I) the amount of the State 
                                allotment under clause (ii) for fiscal 
                                year 2010; and
                                    ``(II) the amount of any payments 
                                made to the State under subsection (j) 
                                for fiscal year 2010,
                        multiplied by the allotment increase factor 
                        under paragraph (5) for fiscal year 2011.
            ``(3) For fiscal year 2012.--
                    ``(A) First half.--Subject to paragraphs (4) and 
                (6), from the amount made available under subparagraph 
                (A) of paragraph (15) 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 2007, 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 (15) 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 2011 (including payments made 
                to the State under subsection (j) for fiscal year 2011 
                as well as amounts redistributed to the State in fiscal 
                year 2011), multiplied by the allotment increase factor 
                under paragraph (5) for fiscal year 2012.
                    ``(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)(15)(A); and
                                    ``(II) the amount of the 
                                appropriation for such period under 
                                section 108 of the Children's Health 
                                Insurance Program Reauthorization Act 
                                of 2007; to
                            ``(ii) the sum of the--
                                    ``(I) amount described in clause 
                                (i); and
                                    ``(II) the amount made available 
                                under subsection (a)(15)(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 2012, 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 
                2009 and ending with fiscal year 2012); 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 
        2009 or fiscal year 2011.
            ``(7) Availability of amounts for semi-annual periods in 
        fiscal year 2012.--Each semi-annual allotment made under 
        paragraph (3) for a period in fiscal year 2012 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:
    ``(j) 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 2008, an amount equal 
                        to 20 percent of the amount made available 
                        under paragraph (11) of subsection (a) for the 
                        fiscal year; and
                            ``(ii) for each of fiscal years 2009 
                        through 2011 (and for each of the semi-annual 
                        allotment periods for fiscal year 2012), 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 2009 
                through 2011 (and for each of the semi-annual allotment 
                periods for fiscal year 2012), 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.
                    ``(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 2008, fiscal year 2009, 
                fiscal year 2010, fiscal year 2011, or a semi-annual 
                allotment period for fiscal year 2012, 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 2008 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 2007 increased by the 
                        population growth for children in that State 
                        for the year ending on June 30, 2006 (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 (i)(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 2008 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 2007, increased by the annual 
                        percentage increase in the projected per capita 
                        amount of National Health Expenditures (as 
                        estimated by the Secretary) for 2008; 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 2008 and ending with fiscal year 
                2012), 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. Payments made under this 
                paragraph may only be used to reduce the number of low-
                income children who do not have health insurance 
                coverage in the State.
                    ``(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; 
                                exceeds
                                    ``(II) the baseline number of 
                                enrollees described in clause (iii) for 
                                the State and fiscal year under title 
                                XIX;
                        but not to exceed 3 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 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 2008 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 for the year ending on June 
                                30, 2006 (as estimated by the Bureau of 
                                the Census) plus 1 percentage point; or
                                    ``(II) 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 for the year 
                                ending on June 30 before the beginning 
                                of the fiscal year (as estimated by the 
                                Bureau of the Census) plus 1 percentage 
                                point.
                    ``(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 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 
                        $3,000,000,000 for fiscal year 2008 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 2008 
                                        through 2011.--As of December 
                                        31 of fiscal year 2008, and as 
                                        of December 31 of each 
                                        succeeding fiscal year through 
                                        fiscal year 2011, 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 (i) 
                                        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 2012.--As of December 31 
                                        of fiscal year 2012, the 
                                        portion, if any, of the sum of 
                                        the amounts appropriated under 
                                        subsection (a)(15)(A) and under 
                                        section 108 of the Children's 
                                        Health Insurance 
                                        Reauthorization Act of 2007 for 
                                        the period beginning on October 
                                        1, 2011, and ending on March 
                                        31, 2012, that is unobligated 
                                        for allotment to a State under 
                                        subsection (i) for such fiscal 
                                        year or set aside under 
                                        subsection (b)(2) of section 
                                        2111 for such fiscal year.
                                            ``(cc) Second half of 
                                        fiscal year 2012.--As of June 
                                        30 of fiscal year 2012, the 
                                        portion, if any, of the amount 
                                        appropriated under subsection 
                                        (a)(15)(B) for the period 
                                        beginning on April 1, 2012, and 
                                        ending on September 30, 2012, 
                                        that is unobligated for 
                                        allotment to a State under 
                                        subsection (i) 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 
                                2009 through 2012, 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 and 
                                2007 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 2009 through 2012, 
                                any amount in excess of the aggregate 
                                cap applicable to the Child Enrollment 
                                Contingency Fund for the fiscal year 
                                under section 2104(j).
                            ``(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.--For purposes of 
                this subsection, 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, 2007, for 
                enrollment under title XIX, taking into account 
                criteria applied as of such date under title XIX 
                pursuant to a waiver under section 1115.
                    ``(G) Application to commonwealths and 
                territories.--The provisions of subparagraph (G) of 
                section 2104(j)(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 
                2007.--In the case of a State that provides coverage 
                under paragraph (1) or (2) of section 115(b) of the 
                Children's Health Insurance Program Reauthorization Act 
                of 2007 for any fiscal year after fiscal year 2007--
                            ``(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)(11) or section 
                1906A.''.

SEC. 105. 2-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 2007, 
                shall remain available for expenditure by the State 
                through the end of the second succeeding fiscal year; 
                and
                    ``(B) for fiscal year 2008 and each fiscal year 
                thereafter, shall remain available for expenditure by 
                the State through the end of the succeeding fiscal 
                year.
            ``(2) Availability of amounts redistributed.--Amounts 
        redistributed to a State under subsection (f) shall be 
        available for expenditure by the State through the end of the 
        fiscal year in which they are redistributed.''.

SEC. 106. MAKING PERMANENT REDISTRIBUTION OF UNUSED FISCAL YEAR 2005 
              ALLOTMENTS TO ADDRESS STATE FUNDING SHORTFALLS; 
              CONFORMING EXTENSION OF QUALIFYING STATE AUTHORITY; 
              REDISTRIBUTION OF UNUSED ALLOTMENTS FOR SUBSEQUENT FISCAL 
              YEARS.

    (a) Redistribution of Unused Fiscal Year 2005 Allotments; Extension 
of Qualifying State Authority.--Section 136(e) of Public Law 110-92 is 
amended to read as follows:
    ``(e) Applicability.--
            ``(1) Redistribution of unused fiscal year 2005 
        allotments.--The amendment made by subsection (c) shall apply 
        without regard to any limitation under section 106.
            ``(2) Extension of qualifying state authority.--The 
        amendment made by subsection (d) shall be in effect through the 
        date of the enactment of the Children's Health Insurance 
        Program Reauthorization Act of 2007.''.
    (b) Redistributions of Unused Allotments for Fiscal Years After 
Fiscal Year 2005.--Section 2104(f) (42 U.S.C. 1397dd(f)) is amended--
            (1) by striking ``The Secretary'' and inserting the 
        following:
            ``(1) In general.--The Secretary'';
            (2) 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
            (3) 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 (j); 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.''.

SEC. 107. OPTION FOR QUALIFYING STATES TO RECEIVE THE ENHANCED PORTION 
              OF THE CHIP MATCHING RATE FOR MEDICAID COVERAGE OF 
              CERTAIN CHILDREN.

    Section 2105(g) (42 U.S.C. 1397ee(g)) is amended--
            (1) in paragraph (1)(A), as amended by section 136(d) of 
        Public Law 110-92--
                    (A) by inserting ``subject to paragraph (4),'' 
                after ``Notwithstanding any other provision of law,''; 
                and
                    (B) by striking ``2007, or 2008'' and inserting 
                ``or 2007''; and
            (2) by adding at the end the following new paragraph:
            ``(4) Option for allotments for fiscal years 2008 through 
        2012.--
                    ``(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 2008 through 2012 (insofar as the 
                allotment is available to the State under subsections 
                (e) and (i) 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.''.

SEC. 108. ONE-TIME APPROPRIATION.

    There is appropriated to the Secretary, out of any money in the 
Treasury not otherwise appropriated, $13,700,000,000 to accompany the 
allotment made for the period beginning on October 1, 2011, and ending 
on March 31, 2012, under section 2104(a)(15)(A) of the Social Security 
Act (42 U.S.C. 1397dd(a)(15)(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(i) of the 
Social Security Act (42 U.S.C. 1397dd(i)), as added by section 102, for 
the first 6 months of fiscal year 2012 in the same manner as allotments 
are provided under subsection (a)(15)(A) of such section 2104 and 
subject to the same terms and conditions as apply to the allotments 
provided from such subsection (a)(15)(A).

SEC. 109. IMPROVING FUNDING FOR THE TERRITORIES UNDER CHIP AND 
              MEDICAID.

    (a) Removal of Federal Matching Payments for Data Reporting Systems 
From the Overall Limit on Payments to Territories Under Title XIX.--
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 2008, 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.''.
    (b) GAO Study and Report.--Not later than September 30, 2009, 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 regarding Federal funding 
under Medicaid and CHIP for Puerto Rico, the United States Virgin 
Islands, Guam, American Samoa, and the Northern Mariana Islands. The 
report shall include the following:
            (1) An analysis of all relevant factors with respect to--
                    (A) eligible Medicaid and CHIP populations in such 
                commonwealths and territories;
                    (B) historical and projected spending needs of such 
                commonwealths and territories and the ability of capped 
                funding streams to respond to those spending needs;
                    (C) the extent to which Federal poverty guidelines 
                are used by such commonwealths and territories to 
                determine Medicaid and CHIP eligibility; and
                    (D) the extent to which such commonwealths and 
                territories participate in data collection and 
                reporting related to Medicaid and CHIP, including an 
                analysis of territory participation in the Current 
                Population Survey versus the American Community Survey.
            (2) Recommendations regarding methods for the collection 
        and reporting of reliable data regarding the enrollment under 
        Medicaid and CHIP of children in such commonwealths and 
        territories.
            (3) Recommendations for improving Federal funding under 
        Medicaid and CHIP for such commonwealths and territories.

      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, 2007; 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 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, 2007).
            ``(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 2008.--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 2007, 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, 2009, 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 2008.--
                    ``(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, 2008.
                    ``(B) Extension upon state request.--If an 
                applicable existing waiver described in subparagraph 
                (A) would otherwise expire before January 1, 2009, and 
                the State requests an extension of such waiver, the 
                Secretary shall grant such an extension, but only 
                through December 31, 2008.
                    ``(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, 
                2008.
            ``(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, 2008, 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, 2008, on 
                the application of a State for a Medicaid nonpregnant 
                childless adults waiver that was submitted to the 
                Secretary by September 30, 2008, 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 2009, 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 (3)(B) for 2008, 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; and
                            ``(ii) in the case of any succeeding year, 
                        allow such expenditures to not exceed the 
                        amount in effect under this subparagraph for 
                        the preceding year, increased by the percentage 
                        increase (if any) in the projected nominal per 
                        capita amount of National Health Expenditures 
                        for the year involved over the preceding year, 
                        as most recently published by the Secretary.
    ``(b) Rules and Conditions for Coverage of Parents of Targeted Low-
Income Children.--
            ``(1) Two-year transition period; automatic extension at 
        state option through fiscal year 2009.--
                    ``(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 
                        2007 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, 2009, 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, 2009, 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, 
                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 parent of a targeted low-
                income child during fiscal years 2008 and 2009.
            ``(2) Rules for fiscal years 2010 through 2012.--
                    ``(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 
                2010, 2011, or 2012, 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 2012, the set aside 
                        for any State shall be computed separately for 
                        each period described in subparagraphs (A) and 
                        (B) of section 2104(a)(15) and any reduction in 
                        the allotment for either such period under 
                        section 2104(i)(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 
                        2010 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 2010 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 2009; 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 2011 or 2012.--For purposes of clause (ii), 
                        the applicable percentage for any quarter of 
                        fiscal year 2011 or 2012 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 2009; and
                                            ``(bb) the State met either 
                                        of the coverage benchmarks 
                                        described in subparagraph (B) 
                                        or (C) of paragraph (3) for the 
                                        preceding fiscal year; 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 2007.
            ``(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 2009;
                            ``(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 on October 1, 2007.
            ``(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 2007 
        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 2007, 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--
            (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. DENIAL OF PAYMENTS FOR COVERAGE OF CHILDREN WITH EFFECTIVE 
              FAMILY INCOME THAT EXCEEDS 300 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 
        300 percent of the poverty line.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), 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.
                    ``(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 2007, has an approved State plan amendment or waiver 
                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.

    (a) State Authority To Expand Income or Resource Eligibility Levels 
for Children.--Nothing in this Act, the amendments made by this Act, or 
title XIX of the Social Security Act, including paragraph (2)(B) of 
section 1905(u) of such Act, shall be construed as limiting the 
flexibility afforded States under such title to increase the income or 
resource eligibility levels for children under a State plan or waiver 
under such title.
    (b) State Authority To Receive Payments Under Medicaid for 
Providing Medical Assistance to Children Eligible as a Result of an 
Income or Resource Eligibility Level Expansion.--A State may, 
notwithstanding 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--
            (1) cover individuals described in section 
        1902(a)(10)(A)(ii)(IX) of the Social Security Act and thereby 
        receive Federal financial participation for medical assistance 
        for such individuals under title XIX of the Social Security 
        Act; or
            (2) receive Federal financial participation for 
        expenditures for medical assistance under Medicaid for children 
        described in paragraph (2)(B) or (3) of section 1905(u) of such 
        Act based on the Federal medical assistance percentage, as 
        otherwise determined based on the first and third sentences of 
        subsection (b) of section 1905 of the Social Security Act, 
        rather than on the basis of an enhanced FMAP (as defined in 
        section 2105(b) of such Act).

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, 2009.
            (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 2007, 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 subsection:
            ``(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 2010 
                        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, 2010, 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, 2010, 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 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 of Health and Human Services 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 and the exception described in subparagraph 
(B) of section 2105(c)(8) of the Social Security Act, as added by 
section 114(a), shall not apply to such State plan amendment.

                   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 2008 through 2012 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).
            ``(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 2008 through 2012, 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) and 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)(10), 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 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:
                                    ``(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 Stamp Act of 1977 
                                (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 to with 
        respect to eligibility determinations made after September 30, 
        2012.''.
            (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, 2011, 
        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 
                2008 through 2011.
                    (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--
                    (A) by redesignating section 1939 as section 1940; 
                and
                    (B) by inserting after section 1938 the following 
                new section:

``SEC. 1939. 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 1939 (relating to authorization to 
                receive data directly relevant to eligibility 
                determinations).''.
            (3) Conforming amendment to provide access to data about 
        enrollment in insurance for purposes of 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 January 1, 2008.

              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
                    (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 sections 114(a) and 116(c), is amended by adding at 
        the end the following new paragraph:
            ``(10) 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 October 1, 2008.
                    (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, 2008, 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 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).

      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), 116(c), and 211(c), is amended by 
        adding at the end the following:
            ``(11) 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 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 2007.
                    ``(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, 2009, 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.''.
    (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 301(c)(2), is amended by adding at the end the 
following new clause:
                            ``(iv) 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 
                        2007, 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 2007, 
                                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 
                        2007, 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 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 
                        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 2007, 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, 2009, 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 
        2007, 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, 2010, 
        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, 2010, 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 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, 2012, 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, 2009, 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 2008 
        through 2012, 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 
                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 2007, 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 2007, 
                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 2008 through 2012.
    ``(f) Development of Model Electronic Health Record Format for 
Children Enrolled in Medicaid or CHIP.--
            ``(1) In general.--Not later than January 1, 2009, 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, 2009, 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 
2008 through 2012, $45,000,000 for the purpose of carrying out this 
section (other than subsection (e)). Funds appropriated under this 
subsection shall remain available until expended.''.
    (b) Increased Matching Rate for Collecting and Reporting on Child 
Health Measures.--Section 1903(a)(3)(A) (42 U.S.C. 1396b(a)(3)(A)), is 
amended--
            (1) by striking ``and'' at the end of clause (i); and
            (2) by adding at the end the following new clause:
                    ``(iii) an amount equal to the Federal medical 
                assistance percentage (as defined in section 1905(b)) 
                of so much of the sums expended during such quarter (as 
                found necessary by the Secretary for the proper and 
                efficient administration of the State plan) as are 
                attributable to such developments or modifications of 
                systems of the type described in clause (i) as are 
                necessary for the efficient collection and reporting on 
                child health measures; and''.

SEC. 402. IMPROVED AVAILABILITY OF PUBLIC INFORMATION REGARDING 
              ENROLLMENT OF CHILDREN IN CHIP AND MEDICAID.

    (a) Inclusion of Process and Access Measures in Annual State 
Reports.--Section 2108 (42 U.S.C. 1397hh) is amended--
            (1) in subsection (a), in the matter preceding paragraph 
        (1), by striking ``The State'' and inserting ``Subject to 
        subsection (e), the State''; and
            (2) by adding at the end the following new subsection:
    ``(e) Information Required for Inclusion in State Annual Report.--
The State shall include the following information in the annual report 
required under subsection (a):
            ``(1) Eligibility criteria, enrollment, and retention data 
        (including data with respect to continuity of coverage or 
        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 2008 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, 2008, 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, 
2008.

                 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 paragraph (1) 
        shall apply to coverage of items and services furnished on or 
        after October 1, 2008.
    (b) 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.
    (c) 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 
                (69);
                    (B) by striking the period at the end of paragraph 
                (70) and inserting ``; and''; and
                    (C) by inserting after paragraph (70) the following 
                new paragraph:
            ``(71) 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)(71) (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, 2008.
    (d) 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.
    (e) 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.
    (f) 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,''.
    (g) 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 abuse benefits, 
                such plan shall ensure that the financial requirements 
                and treatment limitations applicable to such mental 
                health or substance abuse benefits are no more 
                restrictive than the financial requirements and 
                treatment limitations applied to substantially all 
                medical and surgical benefits covered by the plan.
                    ``(B) Deemed compliance.--To the extent that a 
                State child health plan includes coverage with respect 
                to an individual described in section 1905(a)(4)(B) and 
                covered under the State plan under section 
                1902(a)(10)(A) of the services described in section 
                1905(a)(4)(B) (relating to early and periodic 
                screening, diagnostic, and treatment services defined 
                in section 1905(r)) and provided in accordance with 
                section 1902(a)(43), such plan shall be deemed to 
                satisfy the requirements of subparagraph (A).''.
    (b) Conforming Amendments.--Section 2103 (42 U.S.C. 1397cc) is 
amended--
            (1) in subsection (a), as amended by section 
        501(a)(1)(A)(i), in the matter preceding paragraph (1), by 
        inserting ``, (6),'' after ``(5)''; and
            (2) in subsection (c)(2), by striking subparagraph (B) and 
        redesignating subparagraphs (C) and (D) as subparagraphs (B) 
        and (C), respectively.

SEC. 503. APPLICATION OF PROSPECTIVE PAYMENT SYSTEM FOR SERVICES 
              PROVIDED BY FEDERALLY-QUALIFIED HEALTH CENTERS AND RURAL 
              HEALTH CLINICS.

    (a) Application of Prospective Payment System.--
            (1) In general.--Section 2107(e)(1) (42 U.S.C. 
        1397gg(e)(1)), as amended by section 501(c)(2) is amended by 
        inserting after subparagraph (C) the following new 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, 2008.
    (b) Transition Grants.--
            (1) Appropriation.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated to the Secretary 
        for fiscal year 2008, $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, 2010, 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 January 1, 2009.

SEC. 505. DEMONSTRATION PROJECTS RELATING TO DIABETES PREVENTION.

    There is authorized to be appropriated $15,000,000 during the 
period of fiscal years 2008 through 2012 to fund demonstration projects 
in up to 10 States over 3 years for voluntary incentive programs to 
promote children's receipt of relevant screenings and improvements in 
healthy eating and physical activity with the aim of reducing the 
incidence of type 2 diabetes. Such programs may involve reductions in 
cost-sharing or premiums when children receive regular screening and 
reach certain benchmarks in healthy eating and physical activity. Under 
such programs, a State may also provide financial bonuses for 
partnerships with entities, such as schools, which increase their 
education and efforts with respect to reducing the incidence of type 2 
diabetes and may also devise incentives for providers serving children 
covered under this title and title XIX to perform relevant screening 
and counseling regarding healthy eating and physical activity. Upon 
completion of these demonstrations, the Secretary shall provide a 
report to Congress on the results of the State demonstration projects 
and the degree to which they helped improve health outcomes related to 
type 2 diabetes in children in those States.

SEC. 506. CLARIFICATION OF COVERAGE OF SERVICES PROVIDED THROUGH 
              SCHOOL-BASED HEALTH CENTERS.

    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.''.

     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:
            ``(12) 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 
final rule 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 final rule in effect for all States may only be inclusive of 
errors, as defined in such final rule or in guidance issued within a 
reasonable time frame after the effective date for such final rule that 
includes detailed guidance for the specific methodology for error 
determinations.
    (c) Requirements for Final Rule.--For purposes of subsection (b), 
the requirements of this subsection are that the 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--
                            (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 final rule implementing 
the PERM requirements in accordance with the requirements of subsection 
(c) is in effect for all States, a State for which the PERM 
requirements were first in effect under an interim final rule for 
fiscal year 2007 may elect to accept any payment error rate determined 
in whole or in part for the State on the basis of data for that fiscal 
year or may elect to not have any payment error rate determined on the 
basis of such data and, instead, shall be treated as if fiscal year 
2010 were the first fiscal year for which the PERM requirements apply 
to the State.
    (e) Harmonization of MEQC and PERM.--
            (1) Reduction of redundancies.--The Secretary shall review 
        the Medicaid Eligibility Quality Control (in this 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 
        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, as in effect on September 1, 
        2007, 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 fiscal year 2009, 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 2008''.
    (b) Use of Additional Funds.--Section 2109(b) (42 U.S.C. 
1397ii(b)), as amended by subsection (a), is amended--
            (1) by redesignating paragraph (2) as paragraph (4); and
            (2) by inserting after paragraph (1), the following new 
        paragraphs:
            ``(2) Additional requirements.--In addition to making the 
        adjustments required to produce the data described in paragraph 
        (1), with respect to data collection occurring for fiscal years 
        beginning with fiscal year 2008, in appropriate consultation 
        with the Secretary of Health and Human Services, the Secretary 
        of Commerce shall do the following:
                    ``(A) Make appropriate adjustments to the Current 
                Population Survey to develop more accurate State-
                specific estimates of the number of children enrolled 
                in health coverage under title XIX or this title.
                    ``(B) Make appropriate adjustments to the Current 
                Population Survey to improve the survey estimates used 
                to determine the child population growth factor under 
                section 2104(i)(5)(B) and any other data necessary for 
                carrying out this title.
                    ``(C) Include health insurance survey information 
                in the American Community Survey related to children.
                    ``(D) Assess whether American Community Survey 
                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, 2010, 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 2009 for the 
                purpose of conducting the evaluation authorized under 
                this paragraph. Amounts appropriated under this 
                subparagraph shall remain available for expenditure 
                through fiscal year 2011.''.

SEC. 604. ACCESS TO RECORDS FOR IG AND GAO AUDITS AND 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 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. COUNTY MEDICAID HEALTH INSURING ORGANIZATIONS; GAO REPORT ON 
              MEDICAID MANAGED CARE PAYMENT RATES.

    (a) In General.--Section 9517(c)(3) of the Consolidated Omnibus 
Budget Reconciliation Act of 1985 (42 U.S.C. 1396b note), as added by 
section 4734 of the Omnibus Budget Reconciliation Act of 1990 and as 
amended by section 704 of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000, is amended--
            (1) in subparagraph (A), by inserting ``, in the case of 
        any health insuring organization described in such subparagraph 
        that is operated by a public entity established by Ventura 
        County, and in the case of any health insuring organization 
        described in such subparagraph that is operated by a public 
        entity established by Merced County'' after ``described in 
        subparagraph (B)''; and
            (2) in subparagraph (C), by striking ``14 percent'' and 
        inserting ``16 percent''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on the date of the enactment of this Act.
    (c) GAO Report on Actuarial Soundness of 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 title XIX of the Social Security Act are 
actuarially sound.

SEC. 615. 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, 2008, 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. 616. MORATORIUM ON CERTAIN PAYMENT RESTRICTIONS.

    Notwithstanding any other provision of law, the Secretary of Health 
and Human Services shall not, prior to January 1, 2010, take any action 
(through promulgation of regulation, issuance of regulatory guidance, 
use of federal payment audit procedures, or other administrative 
action, policy, or practice, including a Medical Assistance Manual 
transmittal or letter to State Medicaid directors) to restrict coverage 
or payment under title XIX of the Social Security Act for 
rehabilitation services, or school-based administration, 
transportation, or medical services if such restrictions are more 
restrictive in any aspect than those applied to such coverage or 
payment as of July 1, 2007.

SEC. 617. MEDICAID DSH ALLOTMENTS FOR TENNESSEE AND HAWAII.

    (a) Tennessee.--The DSH allotments for Tennessee for each fiscal 
year beginning with fiscal year 2008 under subsection (f)(3) of section 
1923 of the Social Security Act (42 U.S.C. 1396r-4) are deemed to be 
$30,000,000. The Secretary of Health and Human Services may impose a 
limitation on the total amount of payments made to hospitals under the 
TennCare Section 1115 waiver only to the extent that such limitation is 
necessary to ensure that a hospital does not receive payment in excess 
of the amounts described in subsection (f) of such section or as 
necessary to ensure that the waiver remains budget neutral.
    (b) Hawaii.--Section 1923(f)(6) (42 U.S.C. 1396r-4(f)(6)) is 
amended--
            (1) in the paragraph heading, by striking ``for fiscal year 
        2007''; and
            (2) in subparagraph (B)--
                    (A) in clause (i), by striking ``Only with respect 
                to fiscal year 2007'' and inserting ``With respect to 
                each of fiscal years 2007 and 2008'';
                    (B) by redesignating clause (ii) as clause (iv); 
                and
                    (C) by inserting after clause (i), the following 
                new clauses:
                            ``(ii) Treatment as a low-dsh state.--With 
                        respect to fiscal year 2009 and each fiscal 
                        year thereafter, notwithstanding the table set 
                        forth in paragraph (2), the DSH allotment for 
                        Hawaii shall be increased in the same manner as 
                        allotments for low DSH States are increased for 
                        such fiscal year under clauses (ii) and (iii) 
                        of paragraph (5)(B).
                            ``(iii) Certain hospital payments.--The 
                        Secretary may not impose a limitation on the 
                        total amount of payments made to hospitals 
                        under the QUEST section 1115 Demonstration 
                        Project except to the extent that such 
                        limitation is necessary to ensure that a 
                        hospital does not receive payments in excess of 
                        the amounts described in subsection (g), or as 
                        necessary to ensure that such payments under 
                        the waiver and such payments pursuant to the 
                        allotment provided in this section do not, in 
                        the aggregate in any year, exceed the amount 
                        that the Secretary determines is equal to the 
                        Federal medical assistance percentage component 
                        attributable to disproportionate share hospital 
                        payment adjustments for such year that is 
                        reflected in the budget neutrality provision of 
                        the QUEST Demonstration Project.''.

SEC. 618. 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. 619. EXTENSION OF SSI WEB-BASED ASSET DEMONSTRATION PROJECT TO THE 
              MEDICAID PROGRAM.

    (a) In General.--Beginning on October 1, 2012, the Secretary of 
Health and Human Services shall provide for the application to asset 
eligibility determinations under the Medicaid program under title XIX 
of the Social Security Act of the automated, secure, web-based asset 
verification request and response process being applied for determining 
eligibility for benefits under the Supplemental Security Income (SSI) 
program under title XVI of such Act under a demonstration project 
conducted under the authority of section 1631(e)(1)(B)(ii) of such Act 
(42 U.S.C. 1383(e)(1)(B)(ii)).
    (b) Limitation.--Such application shall only extend to those States 
in which such demonstration project is operating and only for the 
period in which such project is otherwise provided.
    (c) Rules of Application.--For purposes of carrying out subsection 
(a), notwithstanding any other provision of law, information obtained 
from a financial institution that is used for purposes of eligibility 
determinations under such demonstration project with respect to the 
Secretary of Health and Human Services under the SSI program may also 
be shared and used by States for purposes of eligibility determinations 
under the Medicaid program. In applying section 1631(e)(1)(B)(ii) of 
the Social Security Act under this subsection, references to the 
Commissioner of Social Security and benefits under title XVI of such 
Act shall be treated as including a reference to a State described in 
subsection (b) and medical assistance under title XIX of such Act 
provided by such a State.

                      Subtitle C--Other Provisions

SEC. 621. SUPPORT FOR INJURED SERVICEMEMBERS.

    (a) Short Title.--This section may be cited as the ``Support for 
Injured Servicemembers Act''.
    (b) Servicemember Family Leave.--
            (1) Definitions.--Section 101 of the Family and Medical 
        Leave Act of 1993 (29 U.S.C. 2611) is amended by adding at the 
        end the following:
            ``(14) Active duty.--The term `active duty' means duty 
        under a call or order to active duty under a provision of law 
        referred to in section 101(a)(13)(B) of title 10, United States 
        Code.
            ``(15) Covered servicemember.--The term `covered 
        servicemember' means a member of the Armed Forces, including a 
        member of the National Guard or a Reserve, who is undergoing 
        medical treatment, recuperation, or therapy, is otherwise in 
        medical hold or medical holdover status, or is otherwise on the 
        temporary disability retired list, for a serious injury or 
        illness.
            ``(16) Medical hold or medical holdover status.--The term 
        `medical hold or medical holdover status' means--
                    ``(A) the status of a member of the Armed Forces, 
                including a member of the National Guard or a Reserve, 
                assigned or attached to a military hospital for medical 
                care; and
                    ``(B) the status of a member of a reserve component 
                of the Armed Forces who is separated, whether pre-
                deployment or post-deployment, from the member's unit 
                while in need of health care based on a medical 
                condition identified while the member is on active duty 
                in the Armed Forces.
            ``(17) Next of kin.--The term `next of kin', used with 
        respect to an individual, means the nearest blood relative of 
        that individual.
            ``(18) Serious injury or illness.--The term `serious injury 
        or illness', in the case of a member of the Armed Forces, means 
        an injury or illness incurred by the member in line of duty on 
        active duty in the Armed Forces that may render the member 
        medically unfit to perform the duties of the member's office, 
        grade, rank, or rating.''.
            (2) Entitlement to leave.--Section 102(a) of such Act (29 
        U.S.C. 2612(a)) is amended by adding at the end the following:
            ``(3) Servicemember family leave.--Subject to section 103, 
        an eligible employee who is the spouse, son, daughter, parent, 
        or next of kin of a covered servicemember shall be entitled to 
        a total of 26 workweeks of leave during a 12-month period to 
        care for the servicemember. The leave described in this 
        paragraph shall only be available during a single 12-month 
        period.
            ``(4) Combined leave total.--During the single 12-month 
        period described in paragraph (3), an eligible employee shall 
        be entitled to a combined total of 26 workweeks of leave under 
        paragraphs (1) and (3). Nothing in this paragraph shall be 
        construed to limit the availability of leave under paragraph 
        (1) during any other 12-month period.''.
            (3) Requirements relating to leave.--
                    (A) Schedule.--Section 102(b) of such Act (29 
                U.S.C. 2612(b)) is amended--
                            (i) in paragraph (1), in the second 
                        sentence--
                                    (I) by striking ``section 
                                103(b)(5)'' and inserting ``subsection 
                                (b)(5) or (f) (as appropriate) of 
                                section 103''; and
                                    (II) by inserting ``or under 
                                subsection (a)(3)'' after ``subsection 
                                (a)(1)''; and
                            (ii) in paragraph (2), by inserting ``or 
                        under subsection (a)(3)'' after ``subsection 
                        (a)(1)''.
                    (B) Substitution of paid leave.--Section 102(d) of 
                such Act (29 U.S.C. 2612(d)) is amended--
                            (i) in paragraph (1)--
                                    (I) by inserting ``(or 26 workweeks 
                                in the case of leave provided under 
                                subsection (a)(3))'' after ``12 
                                workweeks'' the first place it appears; 
                                and
                                    (II) by inserting ``(or 26 
                                workweeks, as appropriate)'' after ``12 
                                workweeks'' the second place it 
                                appears; and
                            (ii) in paragraph (2)(B), by adding at the 
                        end the following: ``An eligible employee may 
                        elect, or an employer may require the employee, 
                        to substitute any of the accrued paid vacation 
                        leave, personal leave, family leave, or medical 
                        or sick leave of the employee for leave 
                        provided under subsection (a)(3) for any part 
                        of the 26-week period of such leave under such 
                        subsection.''.
                    (C) Notice.--Section 102(e)(2) of such Act (29 
                U.S.C. 2612(e)(2)) is amended by inserting ``or under 
                subsection (a)(3)'' after ``subsection (a)(1)''.
                    (D) Spouses employed by same employer.--Section 
                102(f) of such Act (29 U.S.C. 2612(f)) is amended--
                            (i) by redesignating paragraphs (1) and (2) 
                        as subparagraphs (A) and (B), and aligning the 
                        margins of the subparagraphs with the margins 
                        of section 102(e)(2)(A);
                            (ii) by striking ``In any'' and inserting 
                        the following:
            ``(1) In general.--In any''; and
                            (iii) by adding at the end the following:
            ``(2) Servicemember family leave.--
                    ``(A) In general.--The aggregate number of 
                workweeks of leave to which both that husband and wife 
                may be entitled under subsection (a) may be limited to 
                26 workweeks during the single 12-month period 
                described in subsection (a)(3) if the leave is--
                            ``(i) leave under subsection (a)(3); or
                            ``(ii) a combination of leave under 
                        subsection (a)(3) and leave described in 
                        paragraph (1).
                    ``(B) Both limitations applicable.--If the leave 
                taken by the husband and wife includes leave described 
                in paragraph (1), the limitation in paragraph (1) shall 
                apply to the leave described in paragraph (1).''.
                    (E) Certification.--Section 103 of such Act (29 
                U.S.C. 2613) is amended by adding at the end the 
                following:
    ``(f) Certification for Servicemember Family Leave.--An employer 
may require that a request for leave under section 102(a)(3) be 
supported by a certification issued at such time and in such manner as 
the Secretary may by regulation prescribe.''.
                    (F) Failure to return.--Section 104(c) of such Act 
                (29 U.S.C. 2614(c)) is amended--
                            (i) in paragraph (2)(B)(i), by inserting 
                        ``or under section 102(a)(3)'' before the 
                        semicolon; and
                            (ii) in paragraph (3)(A)--
                                    (I) in clause (i), by striking 
                                ``or'' at the end;
                                    (II) in clause (ii), by striking 
                                the period and inserting ``; or''; and
                                    (III) by adding at the end the 
                                following:
                            ``(iii) a certification issued by the 
                        health care provider of the servicemember being 
                        cared for by the employee, in the case of an 
                        employee unable to return to work because of a 
                        condition specified in section 102(a)(3).''.
                    (G) Enforcement.--Section 107 of such Act (29 
                U.S.C. 2617) is amended, in subsection 
                (a)(1)(A)(i)(II), by inserting ``(or 26 weeks, in a 
                case involving leave under section 102(a)(3))'' after 
                ``12 weeks''.
                    (H) Instructional employees.--Section 108 of such 
                Act (29 U.S.C. 2618) is amended, in subsections (c)(1), 
                (d)(2), and (d)(3), by inserting ``or under section 
                102(a)(3)'' after ``section 102(a)(1)''.
    (c) Servicemember Family Leave for Civil Service Employees.--
            (1) Definitions.--Section 6381 of title 5, United States 
        Code, is amended--
                    (A) in paragraph (5), by striking ``and'' at the 
                end;
                    (B) in paragraph (6), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(7) the term `active duty' means duty under a call or 
        order to active duty under a provision of law referred to in 
        section 101(a)(13)(B) of title 10, United States Code;
            ``(8) the term `covered servicemember' means a member of 
        the Armed Forces, including a member of the National Guard or a 
        Reserve, who is undergoing medical treatment, recuperation, or 
        therapy, is otherwise in medical hold or medical holdover 
        status, or is otherwise on the temporary disability retired 
        list, for a serious injury or illness;
            ``(9) the term `medical hold or medical holdover status' 
        means--
                    ``(A) the status of a member of the Armed Forces, 
                including a member of the National Guard or a Reserve, 
                assigned or attached to a military hospital for medical 
                care; and
                    ``(B) the status of a member of a reserve component 
                of the Armed Forces who is separated, whether pre-
                deployment or post-deployment, from the member's unit 
                while in need of health care based on a medical 
                condition identified while the member is on active duty 
                in the Armed Forces;
            ``(10) the term `next of kin', used with respect to an 
        individual, means the nearest blood relative of that 
        individual; and
            ``(11) the term `serious injury or illness', in the case of 
        a member of the Armed Forces, means an injury or illness 
        incurred by the member in line of duty on active duty in the 
        Armed Forces that may render the member medically unfit to 
        perform the duties of the member's office, grade, rank, or 
        rating.''.
            (2) Entitlement to leave.--Section 6382(a) of such title is 
        amended by adding at the end the following:
            ``(3) Subject to section 6383, an employee who is the 
        spouse, son, daughter, parent, or next of kin of a covered 
        servicemember shall be entitled to a total of 26 administrative 
        workweeks of leave during a 12-month period to care for the 
        servicemember. The leave described in this paragraph shall only 
        be available during a single 12-month period.
            ``(4) During the single 12-month period described in 
        paragraph (3), an employee shall be entitled to a combined 
        total of 26 administrative workweeks of leave under paragraphs 
        (1) and (3). Nothing in this paragraph shall be construed to 
        limit the availability of leave under paragraph (1) during any 
        other 12-month period.''.
            (3) Requirements relating to leave.--
                    (A) Schedule.--Section 6382(b) of such title is 
                amended--
                            (i) in paragraph (1), in the second 
                        sentence--
                                    (I) by striking ``section 
                                6383(b)(5)'' and inserting ``subsection 
                                (b)(5) or (f) (as appropriate) of 
                                section 6383''; and
                                    (II) by inserting ``or under 
                                subsection (a)(3)'' after ``subsection 
                                (a)(1)''; and
                            (ii) in paragraph (2), by inserting ``or 
                        under subsection (a)(3)'' after ``subsection 
                        (a)(1)''.
                    (B) Substitution of paid leave.--Section 6382(d) of 
                such title is amended by adding at the end the 
                following: ``An employee may elect to substitute for 
                leave under subsection (a)(3) any of the employee's 
                accrued or accumulated annual or sick leave under 
                subchapter I for any part of the 26-week period of 
                leave under such subsection.''.
                    (C) Notice.--Section 6382(e) of such title is 
                amended by inserting ``or under subsection (a)(3)'' 
                after ``subsection (a)(1)''.
                    (D) Certification.--Section 6383 of such title is 
                amended by adding at the end the following:
    ``(f) An employing agency may require that a request for leave 
under section 6382(a)(3) be supported by a certification issued at such 
time and in such manner as the Office of Personnel Management may by 
regulation prescribe.''.

SEC. 622. 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));
            (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. 623. SENSE OF 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 ``$50.00 per thousand'',
            (2) by striking ``20.719 percent (18.063 percent on cigars 
        removed during 2000 or 2001)'' in paragraph (2) and inserting 
        ``52.988 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 ``$3.00 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 ``$50.00 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 ``$105.00 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 ``3.13 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 ``6.26 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 
        ``$1.50'', and
            (2) by striking ``19.5 cents (17 cents on chewing tobacco 
        removed during 2000 or 2001)'' in paragraph (2) and inserting 
        ``50 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 ``$2.8126 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 ``$8.8889 cents''.
    (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 
        January 1, 2008, 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 January 1, 2008, 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 
                January 1, 2008, 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 April 1, 2008.
            (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 January 1, 2008, 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 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 December 31, 2007.

SEC. 702. ADMINISTRATIVE IMPROVEMENTS.

    (a) Permit, Report, and Record Requirements for Manufacturers and 
Importers of Processed Tobacco.--
            (1) Permits.--
                    (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 and reports.--
                    (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''.
            (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 amendment.--Section 5702(k) of such Code is 
        amended by inserting ``, or any processed tobacco,'' after 
        ``nontaxpaid tobacco products or cigarette papers or tubes''.
            (6) Effective date.--The amendments made by this subsection 
        shall take effect on January 1, 2008.
    (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, 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, 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, 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, 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 December 31, 2007.
    (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 produced 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.

SEC. 703. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

    Subparagraph (B) of section 401(1) of the Tax Increase Prevention 
and Reconciliation Act of 2005 is amended by striking ``114.75 
percent'' and inserting ``113.75 percent''.

            Passed the House of Representatives October 25, 2007.

            Attest:

                                            LORRAINE C. MILLER,

                                                                 Clerk.
                                                       Calendar No. 450

110th CONGRESS

  1st Session

                               H. R. 3963

_______________________________________________________________________

                                 AN ACT

To amend title XXI of the Social Security Act to extend and improve the 
      Children's Health Insurance Program, and for other purposes.

_______________________________________________________________________

                            October 26, 2007

            Read the second time and placed on the calendar