Short title

This Act may be cited as the

Protecting the Medicaid Safety Net Act of 2008

Moratoria on certain Medicaid regulations

(a)

Extension of certain moratoria in Public Law 110–28

Section 7002(a)(1) of the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (Public Law 110–28) is amended— (1)by striking prior to the date that is 1 year after the date of enactment of this Act and inserting prior to April 1, 2009; (2)in subparagraph (A), by inserting after Federal Regulations) the following: or in the final regulation, relating to such parts, published on May 29, 2007 (72 Federal Register 29748); and (3)in subparagraph (C), by inserting before the period at the end the following: , including the proposed regulation published on May 23, 2007 (72 Federal Register 28930). (b)

Extension of certain moratoria in Public Law 110–173

Section 206 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110–173) is amended— (1)by striking June 30, 2008 and inserting April 1, 2009; (2)by inserting , including the proposed regulation published on August 13, 2007 (72 Federal Register 45201), after rehabilitation services; and (3)by inserting , including the final regulation published on December 28, 2007 (72 Federal Register 73635), after school-based transportation. (c)

Additional moratoria

(1)

In general

Notwithstanding any other provision of law, the Secretary of Health and Human Services shall not, prior to April 1, 2009, 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 impose any restrictions relating to a provision described in subparagraph (A), (B), or (C) of paragraph (2) if such restrictions are more restrictive in any aspect than those applied to the respective provision as of the date specified in paragraph (3) for such provision. (2)

Provisions described

(A)

Portion of interim final regulation relating to Medicaid treatment of optional case management services

(i)

In general

Subject to clause (ii), the provision described in this subparagraph is the interim final regulation relating to optional State plan case management services under the Medicaid program published on December 4, 2007 (72 Federal Register 68077) in its entirety. (ii)

Exception

The provision described in this subparagraph does not include the portion of such regulation as relates directly to implementing section 1915(g)(2)(A)(ii) of the Social Security Act, as amended by section 6052 of the Deficit Reduction Act of 2005 (Public Law 109–171), through the definition of case management services and targeted case management services contained in proposed section 440.169 of title 42, Code of Federal Regulations, but only to the extent that such portion is not more restrictive than the policies set forth in the Dear State Medicaid Director letter on case management issued on January 19, 2001 (SMDL #01–013), and with respect to community transition case management, the Dear State Medicaid Director letter issued on July 25, 2000 (Olmstead Update 3). (B)

Proposed regulation relating to redefinition of Medicaid outpatient hospital services

The provision described in this subparagraph is the proposed regulation relating to clarification of outpatient clinic and hospital facility services definition and upper payment limit under the Medicaid program published on September 28, 2007 (72 Federal Register 55158) in its entirety. (C)

Portion of proposed regulation relating to Medicaid allowable provider taxes

(i)

In general

Subject to clause (ii), the provision described in this subparagraph is the final regulation relating to health-care-related taxes under the Medicaid program published on February 22, 2008 (73 Federal Register 9685) in its entirety. (ii)

Exception

The provision described in this subparagraph does not include the portions of such regulation as relate to the following: (I)

Reduction in threshold

The reduction from 6 percent to 5.5 percent in the threshold applied under section 433.68(f)(3)(i) of title 42, Code of Federal Regulations, for determining whether or not there is an indirect guarantee to hold a taxpayer harmless, as required to carry out section 1903(w)(4)(C)(ii) of the Social Security Act, as added by section 403 of the Medicare Improvement and Extension Act of 2006 (division B of Public Law 109–432). (II)

Change in definition of managed care

The change in the definition of managed care as proposed in the revision of section 433.56(a)(8) of title 42, Code of Federal Regulations, as required to carry out section 1903(w)(7)(A)(viii) of the Social Security Act, as amended by section 6051 of the Deficit Reduction Act of 2005 (Public Law 109–171). (3)

Date specified

The date specified in this paragraph for the provision described in— (A)subparagraph (A) of paragraph (2) is December 3, 2007; (B)subparagraph (B) of such paragraph is September 27, 2007; or (C)subparagraph (C) of such paragraph is February 21, 2008.

Funds to reduce Medicaid fraud and abuse

(a)

In general

For purposes of reducing fraud and abuse in the Medicaid program under title XIX of the Social Security Act, there is appropriated to the Secretary of Health and Human Services, out of any money in the Treasury not otherwise appropriated, $25,000,000, for each fiscal year (beginning with fiscal year 2009). Amounts appropriated under this section shall remain available for expenditure until expended and shall be in addition to any other amounts appropriated or made available to the Secretary for such purposes with respect to the Medicaid program. (b)

Annual report

Not later than September 30 of 2009 and of each subsequent year, the Secretary of Health and Human Services shall submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate a report on the activities (and the results of such activities) funded under subsection (a) to reduce waste, fraud, and abuse in the Medicaid program under title XIX of the Social Security Act during the previous 12 month period, including the amount of funds appropriated under such subsection (a) for each such activity and an estimate of the savings to the Medicaid program resulting from each such activity.

Study and reports to Congress

(a)

Secretarial report identifying problems

Not later than July 1, 2008, the Secretary of Health and Human Services shall submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate a report that— (1)outlines the specific problems the Medicaid regulations referred to in the amendments made by subsections (a) and (b) of section 2 and in the provisions described in subsection (c)(2) of such section were intended to address; (2)detailing how these regulations were designed to address these specific problems; and (3)cites the legal authority for such regulations. (b)

Independent comprehensive study and report

(1)

In general

Not later than July 1, 2008, the Secretary of Health and Human Services shall enter into a contract with an independent organization for the purpose of— (A)producing a comprehensive report on the prevalence of the problems outlined in the report submitted under subsection (a); (B)identifying strategies in existence to address these problems; and (C)assessing the impact of each regulation referred to in such subsection on each State and the District of Columbia. (2)

Additional matter

The report under paragraph (1) shall also include— (A)an identification of which claims for items and services (including administrative activities) under title XIX of the Social Security Act are not processed through systems described in section 1903(r) of such Act; (B)an examination of the reasons why these claims for such items and services are not processed through such systems; and (C)recommendations on actions by the Federal government and the States that can make claims for such items and services more accurate and complete consistent with such title. (3)

Deadline

The report under paragraph (1) shall be submitted to the Committee on Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate not later than March 1, 2009. (4)

Cooperation of States

If the Secretary of Health and Human Services determines that a State or the District of Columbia has not cooperated with the independent organization for purposes of the report under this subsection, the Secretary shall reduce the amount paid to the State or District under section 1903(a) of the Social Security Act (42 U.S.C. 1396b(a)) by $25,000 for each day on which the Secretary determines such State or District has not so cooperated. Such reduction shall be made through a process that permits the State or District to challenge the Secretary’s determination. (c)

Funding

(1)

In general

Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated to the Secretary without further appropriation, $5,000,000 to carry out this section. (2)

Availability; amounts in addition to other amounts appropriated for such activities

Amounts appropriated pursuant to paragraph (1) shall— (A)remain available until expended; and (B)be in addition to any other amounts appropriated or made available to the Secretary of Health and Human Services with respect to the Medicaid program.

Asset verification through access to information held by financial institutions

(a)

Addition of authority

Title XIX of the Social Security Act is amended by inserting after section 1939 the following new section:

1940.

Asset verification through access to information held by financial institutions

(a)

Implementation

(1)

In general

Subject to the provisions of this section, each State shall implement an asset verification program described in subsection (b), for purposes of determining or redetermining the eligibility of an individual for medical assistance under the State plan under this title. (2)

Plan submittal

In order to meet the requirement of paragraph (1), each State shall— (A)submit not later than a deadline specified by the Secretary consistent with paragraph (3), a State plan amendment under this title that describes how the State intends to implement the asset verification program; and (B)provide for implementation of such program for eligibility determinations and redeterminations made on or after 6 months after the deadline established for submittal of such plan amendment. (3)

Phase-in

(A)

In general

(i)

Implementation in current asset verification demo States

The Secretary shall require those States specified in subparagraph (C) (to which an asset verification program has been applied before the date of the enactment of this section) to implement an asset verification program under this subsection by the end of fiscal year 2009. (ii)

Implementation in other States

The Secretary shall require other States to submit and implement an asset verification program under this subsection in such manner as is designed to result in the application of such programs, in the aggregate for all such other States, to enrollment of approximately, but not less than, the following percentage of enrollees, in the aggregate for all such other States, by the end of the fiscal year involved: (I)12.5 percent by the end of fiscal year 2009. (II)25 percent by the end of fiscal year 2010. (III)50 percent by the end of fiscal year 2011. (IV)75 percent by the end of fiscal year 2012. (V)100 percent by the end of fiscal year 2013. (B)

Consideration

In selecting States under subparagraph (A)(ii), the Secretary shall consult with the States involved and take into account the feasibility of implementing asset verification programs in each such State. (C)

States specified

The States specified in this subparagraph are California, New York, and New Jersey. (D)

Construction

Nothing in subparagraph (A)(ii) shall be construed as preventing a State from requesting, and the Secretary approving, the implementation of an asset verification program in advance of the deadline otherwise established under such subparagraph. (4)

Exemption of territories

This section shall only apply to the 50 States and the District of Columbia. (b)

Asset verification program

(1)

In general

For purposes of this section, an asset verification program means a program described in paragraph (2) under which a State— (A)requires each applicant for, or recipient of, medical assistance under the State plan under this title on the basis of being aged, blind, or disabled to provide authorization by such applicant or recipient (and any other person whose resources are material to the determination of the eligibility of the applicant or recipient for such assistance) for the State to obtain (subject to the cost reimbursement requirements of section 1115(a) of the Right to Financial Privacy Act but at no cost to the applicant or recipient) from any financial institution (within the meaning of section 1101(1) of such Act) any financial record (within the meaning of section 1101(2) of such Act) held by the institution with respect to the applicant or recipient (and such other person, as applicable), whenever the State determines the record is needed in connection with a determination with respect to such eligibility for (or the amount or extent of) such medical assistance; and (B)uses the authorization provided under subparagraph (A) to verify the financial resources of such applicant or recipient (and such other person, as applicable), in order to determine or redetermine the eligibility of such applicant or recipient for medical assistance under the State plan. (2)

Program described

A program described in this paragraph is a program for verifying individual assets in a manner consistent with the approach used by the Commissioner of Social Security under section 1631(e)(1)(B)(ii). (c)

Duration of authorization

Notwithstanding section 1104(a)(1) of the Right to Financial Privacy Act, an authorization provided to a State under subsection (b)(1) shall remain effective until the earliest of— (1)the rendering of a final adverse decision on the applicant’s application for medical assistance under the State’s plan under this title; (2)the cessation of the recipient’s eligibility for such medical assistance; or (3)the express revocation by the applicant or recipient (or such other person described in subsection (b)(1), as applicable) of the authorization, in a written notification to the State. (d)

Treatment of right to financial privacy act requirements

(1)An authorization obtained by the State under subsection (b)(1) shall be considered to meet the requirements of the Right to Financial Privacy Act for purposes of section 1103(a) of such Act, and need not be furnished to the financial institution, notwithstanding section 1104(a) of such Act. (2)The certification requirements of section 1103(b) of the Right to Financial Privacy Act shall not apply to requests by the State pursuant to an authorization provided under subsection (b)(1). (3)A request by the State pursuant to an authorization provided under subsection (b)(1) is deemed to meet the requirements of section 1104(a)(3) of the Right to Financial Privacy Act and of section 1102 of such Act, relating to a reasonable description of financial records. (e)

Required disclosure

The State shall inform any person who provides authorization pursuant to subsection (b)(1)(A) of the duration and scope of the authorization. (f)

Refusal or revocation of authorization

If an applicant for, or recipient of, medical assistance under the State plan under this title (or such other person described in subsection (b)(1), as applicable) refuses to provide, or revokes, any authorization made by the applicant or recipient (or such other person, as applicable) under subsection (b)(1)(A) for the State to obtain from any financial institution any financial record, the State may, on that basis, determine that the applicant or recipient is ineligible for medical assistance. (g)

Use of contractor

For purposes of implementing an asset verification program under this section, a State may select and enter into a contract with a public or private entity meeting such criteria and qualifications as the State determines appropriate, consistent with requirements in regulations relating to general contracting provisions and with section 1903(i)(2). In carrying out activities under such contract, such an entity shall be subject to the same requirements and limitations on use and disclosure of information as would apply if the State were to carry out such activities directly. (h)

Technical assistance

The Secretary shall provide States with technical assistance to aid in implementation of an asset verification program under this section. (i)

Reports

A State implementing an asset verification program under this section shall furnish to the Secretary such reports concerning the program, at such times, in such format, and containing such information as the Secretary determines appropriate. (j)

Treatment of program expenses

Notwithstanding any other provision of law, reasonable expenses of States in carrying out the program under this section shall be treated, for purposes of section 1903(a), in the same manner as State expenditures specified in paragraph (7) of such section.

(b)

State plan requirements

Section 1902(a) of such Act (42 U.S.C. 1396a(a)) is amended— (1)in paragraph (69) by striking and at the end; (2)in paragraph (70) by striking the period at the end and inserting ; and; and (3)by inserting after paragraph (70), as so amended, the following new paragraph:

(71)provide that the State will implement an asset verification program as required under section 1940.

(c)

Withholding of federal matching payments for noncompliant states

Section 1903(i) of such Act (42 U.S.C. 1396b(i)) is amended— (1)in paragraph (22) by striking or at the end; (2)in paragraph (23) by striking the period at the end and inserting ; or; and (3)by adding after paragraph (23) the following new paragraph:

(24)if a State is required to implement an asset verification program under section 1940 and fails to implement such program in accordance with such section, with respect to amounts expended by such State for medical assistance for individuals subject to asset verification under such section, unless— (A)the State demonstrates to the Secretary’s satisfaction that the State made a good faith effort to comply; (B)not later than 60 days after the date of a finding that the State is in noncompliance, the State submits to the Secretary (and the Secretary approves) a corrective action plan to remedy such noncompliance; and (C)not later than 12 months after the date of such submission (and approval), the State fulfills the terms of such corrective action plan.

(d)

Repeal

Section 4 of Public Law 110–90 is repealed.

Adjustment to PAQI Fund

Section 1848(l)(2) of the Social Security Act (42 U.S.C. 1395w-4(l)(2)), as amended by section 101(a)(2) of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is amended— (1)in subparagraph (A)(i)— (A)in subclause (III), by striking $4,960,000,000 and inserting $3,790,000,000; and (B)by adding at the end the following new subclause:

(IV)For expenditures during 2014, an amount equal to $3,690,000,000.

;

(2)in subparagraph (A)(ii), by adding at the end the following new subclause:

(IV)

2014

The amount available for expenditures during 2014 shall only be available for an adjustment to the update of the conversion factor under subsection (d) for that year.

; and

(3)in subparagraph (B)— (A)in clause (ii), by striking and at the end; (B)in clause (iii), by striking the period at the end and inserting ; and; and (C)by adding at the end the following new clause:

(iv)2014 for payment with respect to physicians' services furnished during 2014.