[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2499 Considered and Passed Senate (CPS)]







110th CONGRESS
  1st Session
                                S. 2499

   To amend titles XVIII, XIX, and XXI of the Social Security Act to 
extend provisions under the Medicare, Medicaid, and SCHIP programs, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 18, 2007

  Mr. Baucus (for himself and Mr. Grassley) introduced the following 
bill; which was read twice, considered, read the third time, and passed

_______________________________________________________________________

                                 A BILL


 
   To amend titles XVIII, XIX, and XXI of the Social Security Act to 
extend provisions under the Medicare, Medicaid, and SCHIP programs, 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; TABLE OF CONTENTS.

    (a) In General.--This Act may be cited as the ``Medicare, Medicaid, 
and SCHIP Extension Act of 2007''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                           TITLE I--MEDICARE

Sec. 101. Increase in physician payment update; extension of the 
                            physician quality reporting system.
Sec. 102. Extension of Medicare incentive payment program for physician 
                            scarcity areas.
Sec. 103. Extension of floor on work geographic adjustment under the 
                            Medicare physician fee schedule.
Sec. 104. Extension of treatment of certain physician pathology 
                            services under Medicare.
Sec. 105. Extension of exceptions process for Medicare therapy caps.
Sec. 106. Extension of payment rule for brachytherapy; extension to 
                            therapeutic radiopharmaceuticals.
Sec. 107. Extension of Medicare reasonable costs payments for certain 
                            clinical diagnostic laboratory tests 
                            furnished to hospital patients in certain 
                            rural areas.
Sec. 108. Extension of authority of specialized Medicare Advantage 
                            plans for special needs individuals to 
                            restrict enrollment.
Sec. 109. Extension of deadline for application of limitation on 
                            extension or renewal of Medicare reasonable 
                            cost contract plans.
Sec. 110. Adjustment to the Medicare Advantage stabilization fund.
Sec. 111. Medicare secondary payor.
Sec. 112. Payment for part B drugs.
Sec. 113. Payment rate for certain diagnostic laboratory tests.
Sec. 114. Long-term care hospitals.
Sec. 115. Payment for inpatient rehabilitation facility (IRF) services.
Sec. 116. Extension of accommodation of physicians ordered to active 
                            duty in the Armed Services.
Sec. 117. Treatment of certain hospitals.
Sec. 118. Additional Funding for State Health Insurance Assistance 
                            Programs, Area Agencies on Aging, and Aging 
                            and Disability Resource Centers.
                      TITLE II--MEDICAID AND SCHIP

Sec. 201. Extending SCHIP funding through March 31, 2009.
Sec. 202. Extension of transitional medical assistance (TMA) and 
                            abstinence education program.
Sec. 203. Extension of qualifying individual (QI) program.
Sec. 204. Medicaid DSH extension.
Sec. 205. Improving data collection.
Sec. 206. Moratorium on certain payment restrictions.
                        TITLE III--MISCELLANEOUS

Sec. 301. Medicare Payment Advisory Commission status.
Sec. 302. Special Diabetes Programs for Type I Diabetes and Indians.

                           TITLE I--MEDICARE

SEC. 101. INCREASE IN PHYSICIAN PAYMENT UPDATE; EXTENSION OF THE 
              PHYSICIAN QUALITY REPORTING SYSTEM.

    (a) Increase in Physician Payment Update.--
            (1) In general.--Section 1848(d) of the Social Security Act 
        (42 U.S.C. 1395w-4(d)) is amended--
                    (A) in paragraph (4)(B), by striking ``and 
                paragraphs (5) and (6)'' and inserting ``and the 
                succeeding paragraphs of this subsection''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(8) Update for a portion of 2008.--
                    ``(A) In general.--Subject to paragraph (7)(B), in 
                lieu of the update to the single conversion factor 
                established in paragraph (1)(C) that would otherwise 
                apply for 2008, for the period beginning on January 1, 
                2008, and ending on June 30, 2008, the update to the 
                single conversion factor shall be 0.5 percent.
                    ``(B) No effect on computation of conversion factor 
                for the remaining portion of 2008 and 2009.--The 
                conversion factor under this subsection shall be 
                computed under paragraph (1)(A) for the period 
                beginning on July 1, 2008, and ending on December 31, 
                2008, and for 2009 and subsequent years as if 
                subparagraph (A) had never applied.''.
            (2) Revision of the physician assistance and quality 
        initiative fund.--
                    (A) Revision.--Section 1848(l)(2) of the Social 
                Security Act (42 U.S.C. 1395w-4(l)(2)) is amended--
                            (i) by striking subparagraph (A) and 
                        inserting the following:
                    ``(A) Amount available.--
                            ``(i) In general.--Subject to clause (ii), 
                        there shall be available to the Fund the 
                        following amounts:
                                    ``(I) For expenditures during 2008, 
                                an amount equal to $150,500,000.
                                    ``(II) For expenditures during 
                                2009, an amount equal to $24,500,000.
                                    ``(III) For expenditures during 
                                2013, an amount equal to 
                                $4,960,000,000.
                            ``(ii) Limitations on expenditures.--
                                    ``(I) 2008.--The amount available 
                                for expenditures during 2008 shall be 
                                reduced as provided by subparagraph (A) 
                                of section 225(c)(1) and section 524 of 
                                the Departments of Labor, Health and 
                                Human Services, and Education, and 
                                Related Agencies Appropriations Act, 
                                2008 (division G of the Consolidated 
                                Appropriations Act, 2008).
                                    ``(II) 2009.--The amount available 
                                for expenditures during 2009 shall be 
                                reduced as provided by subparagraph (B) 
                                of such section 225(c)(1).
                                    ``(III) 2013.--The amount available 
                                for expenditures during 2013 shall only 
                                be available for an adjustment to the 
                                update of the conversion factor under 
                                subsection (d) for that year.''; and
                            (ii) in subparagraph (B), by striking 
                        ``entire amount specified in the first sentence 
                        of subparagraph (A)'' and all that follows and 
                        inserting the following: ``entire amount 
                        available for expenditures, after application 
                        of subparagraph (A)(ii), during--
                            ``(i) 2008 for payment with respect to 
                        physicians' services furnished during 2008;
                            ``(ii) 2009 for payment with respect to 
                        physicians' services furnished during 2009; and
                            ``(iii) 2013 for payment with respect to 
                        physicians' services furnished during 2013.''.
                    (B) Effective date.--
                            (i) In general.--Subject to clause (ii), 
                        the amendments made by subparagraph (A) shall 
                        take effect on the date of the enactment of 
                        this Act.
                            (ii) Special rule for coordination with 
                        consolidated appropriations act, 2008.--If the 
                        date of the enactment of the Consolidated 
                        Appropriations Act, 2008, occurs on or after 
                        the date described in clause (i), the 
                        amendments made by subparagraph (A) shall be 
                        deemed to be made on the day after the 
                        effective date of sections 225(c)(1) and 524 of 
                        the Departments of Labor, Health and Human 
                        Services, and Education, and Related Agencies 
                        Appropriations Act, 2008 (division G of the 
                        Consolidated Appropriations Act, 2008).
                    (C) Transfer of funds to part b trust fund.--
                Amounts that would have been available to the Physician 
                Assistance and Quality Initiative Fund under section 
                1848(l)(2) of the Social Security Act (42 U.S.C. 1395w-
                4(l)(2)) for payment with respect to physicians' 
                services furnished prior to January 1, 2013, but for 
                the amendments made by subparagraph (A), shall be 
                deposited into, and made available for expenditures 
                from, the Federal Supplementary Medical Insurance Trust 
                Fund under section 1841 of such Act (42 U.S.C. 1395t).
    (b) Extension of the Physician Quality Reporting System.--
            (1) System.--Section 1848(k)(2)(B) of the Social Security 
        Act (42 U.S.C. 1395w-4(k)(2)(B)) is amended--
                    (A) in the heading, by inserting ``and 2009'' after 
                ``2008'';
                    (B) in clause (i), by inserting ``and 2009'' after 
                ``2008''; and
                    (C) in each of clauses (ii) and (iii)--
                            (i) by striking ``, 2007'' and inserting 
                        ``of each of 2007 and 2008''; and
                            (ii) by inserting ``or 2009, as 
                        applicable'' after ``2008''.
            (2) Reporting.--Section 101(c) of division B of the Tax 
        Relief and Health Care Act of 2006 (42 U.S.C. 1395w-4 note) is 
        amended--
                    (A) in the heading, by inserting ``and 2008'' after 
                ``2007'';
                    (B) in paragraph (5), by adding at the end the 
                following:
                    ``(F) Extension.--For 2008 and 2009, paragraph (3) 
                shall not apply, and the Secretary shall establish 
                alternative criteria for satisfactorily reporting under 
                paragraph (2) and alternative reporting periods under 
                paragraph (6)(C) for reporting groups of measures under 
                paragraph (2)(B) of section 1848(k) of the Social 
                Security Act (42 U.S.C. 1395w-4(k)) and for reporting 
                using the method specified in paragraph (4) of such 
                section.''; and
                    (C) in paragraph (6), by striking subparagraph (C) 
                and inserting the following new subparagraph:
                    ``(C) Reporting period.--The term `reporting 
                period' means--
                            ``(i) for 2007, the period beginning on 
                        July 1, 2007, and ending on December 31, 2007; 
                        and
                            ``(ii) for 2008, all of 2008.''.
    (c) Implementation.--For purposes of carrying out the provisions 
of, and amendments made by subsections (a) and (b), in addition to any 
amounts otherwise provided in this title, there are appropriated to the 
Centers for Medicare & Medicaid Services Program Management Account, 
out of any money in the Treasury not otherwise appropriated, 
$25,000,000 for the period of fiscal years 2008 and 2009.

SEC. 102. EXTENSION OF MEDICARE INCENTIVE PAYMENT PROGRAM FOR PHYSICIAN 
              SCARCITY AREAS.

    Section 1833(u) of the Social Security Act (42 U.S.C. 1395l(u)) is 
amended--
            (1) in paragraph (1), by striking ``before January 1, 
        2008'' and inserting ``before July 1, 2008''; and
            (2) in paragraph (4)--
                    (A) by redesignating subparagraph (D) as 
                subparagraph (E); and
                    (B) by inserting after subparagraph (C) the 
                following new subparagraph:
                    ``(D) Special rule.--With respect to physicians' 
                services furnished on or after January 1, 2008, and 
                before July 1, 2008, for purposes of this subsection, 
                the Secretary shall use the primary care scarcity 
                counties and the specialty care scarcity counties (as 
                identified under the preceding provisions of this 
                paragraph) that the Secretary was using under this 
                subsection with respect to physicians' services 
                furnished on December 31, 2007.''.

SEC. 103. EXTENSION OF FLOOR ON WORK GEOGRAPHIC ADJUSTMENT UNDER THE 
              MEDICARE PHYSICIAN FEE SCHEDULE.

    Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 1395w-
4(e)(1)(E)), as amended by section 102 of division B of the Tax Relief 
and Health Care Act of 2006, is amended by striking ``before January 1, 
2008'' and inserting ``before July 1, 2008''.

SEC. 104. EXTENSION OF TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY 
              SERVICES UNDER MEDICARE.

    Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (as enacted into law by section 
1(a)(6) of Public Law 106-554), as amended by section 732 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(42 U.S.C. 1395w-4 note) and section 104 of division B of the Tax 
Relief and Health Care Act of 2006 (42 U.S.C. 1395w-4 note), is amended 
by striking ``and 2007'' and inserting ``2007, and the first 6 months 
of 2008''.

SEC. 105. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE THERAPY CAPS.

    Section 1833(g)(5) of the Social Security Act (42 U.S.C. 
1395l(g)(5)) is amended by striking ``December 31, 2007'' and inserting 
``June 30, 2008''.

SEC. 106. EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY; EXTENSION TO 
              THERAPEUTIC RADIOPHARMACEUTICALS.

    (a) Extension of Payment Rule for Brachytherapy.--Section 
1833(t)(16)(C) of the Social Security Act (42 U.S.C. 1395l(t)(16)(C)), 
as amended by section 107(a) of division B of the Tax Relief and Health 
Care Act of 2006, is amended by striking ``January 1, 2008'' and 
inserting ``July 1, 2008''.
    (b) Payment for Therapeutic Radiopharmaceuticals.--Section 
1833(t)(16)(C) of the Social Security Act (42 U.S.C. 1395l(t)(16)(C)), 
as amended by subsection (a), is amended--
            (1) in the heading, by inserting ``and therapeutic 
        radiopharmaceuticals'' before ``at charges'';
            (2) in the first sentence--
                    (A) by inserting ``and for therapeutic 
                radiopharmaceuticals furnished on or after January 1, 
                2008, and before July 1, 2008,'' after ``July 1, 
                2008,'';
                    (B) by inserting ``or therapeutic 
                radiopharmaceutical'' after ``the device''; and
                    (C) by inserting ``or therapeutic 
                radiopharmaceutical'' after ``each device''; and
            (3) in the second sentence, by inserting ``or therapeutic 
        radiopharmaceuticals'' after ``such devices''.

SEC. 107. EXTENSION OF MEDICARE REASONABLE COSTS PAYMENTS FOR CERTAIN 
              CLINICAL DIAGNOSTIC LABORATORY TESTS FURNISHED TO 
              HOSPITAL PATIENTS IN CERTAIN RURAL AREAS.

    Section 416(b) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (42 U.S.C. 1395l-4), as amended by section 
105 of division B of the Tax Relief and Health Care Act of 2006 (42 
U.S.C. 1395l note), is amended by striking ``the 3-year period 
beginning on July 1, 2004'' and inserting ``the period beginning on 
July 1, 2004, and ending on June 30, 2008''.

SEC. 108. EXTENSION OF AUTHORITY OF SPECIALIZED MEDICARE ADVANTAGE 
              PLANS FOR SPECIAL NEEDS INDIVIDUALS TO RESTRICT 
              ENROLLMENT.

    (a) Extension of Authority To Restrict Enrollment.--Section 1859(f) 
of the Social Security Act (42 U.S.C. 1395w-28(f)) is amended by 
striking ``2009'' and inserting ``2010''.
    (b) Moratorium.--
            (1) Authority to designate other plans as specialized ma 
        plans.--During the period beginning on January 1, 2008, and 
        ending on December 31, 2009, the Secretary of Health and Human 
        Services shall not exercise the authority provided under 
        section 231(d) of the Medicare Prescription Drug, Improvement, 
        and Modernization Act of 2003 (42 U.S.C. 1395w-21 note) to 
        designate other plans as specialized MA plans for special needs 
        individuals under part C of title XVIII of the Social Security 
        Act. The preceding sentence shall not apply to plans designated 
        as specialized MA plans for special needs individuals under 
        such authority prior to January 1, 2008.
            (2) Enrollment in new plans.--During the period beginning 
        on January 1, 2008, and ending on December 31, 2009, the 
        Secretary of Health and Human Services shall not permit 
        enrollment of any individual residing in an area in a 
        specialized Medicare Advantage plan for special needs 
        individuals under part C of title XVIII of the Social Security 
        Act to take effect unless that specialized Medicare Advantage 
        plan for special needs individuals was available for enrollment 
        for individuals residing in that area on January 1, 2008.

SEC. 109. EXTENSION OF DEADLINE FOR APPLICATION OF LIMITATION ON 
              EXTENSION OR RENEWAL OF MEDICARE REASONABLE COST CONTRACT 
              PLANS.

    Section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)(C)(ii)), in the matter preceding subclause (I), is amended 
by striking ``January 1, 2008'' and inserting ``January 1, 2009''.

SEC. 110. ADJUSTMENT TO THE MEDICARE ADVANTAGE STABILIZATION FUND.

    Section 1858(e)(2)(A)(i) of the Social Security Act (42 U.S.C. 
1395w-27a(e)(2)(A)(i)), as amended by section 3 of Public Law 110-48, 
is amended by striking ``the Fund'' and all that follows and inserting 
``the Fund during 2013, $1,790,000,000.''

SEC. 111. MEDICARE SECONDARY PAYOR.

    (a) In General.--Section 1862(b) of the Social Security Act (42 
U.S.C. 1395y(b)) is amended by adding at the end the following new 
paragraphs:
            ``(7) Required submission of information by group health 
        plans.--
                    ``(A) Requirement.--On and after the first day of 
                the first calendar quarter beginning after the date 
                that is 1 year after the date of the enactment of this 
                paragraph, an entity serving as an insurer or third 
                party administrator for a group health plan, as defined 
                in paragraph (1)(A)(v), and, in the case of a group 
                health plan that is self-insured and self-administered, 
                a plan administrator or fiduciary, shall--
                            ``(i) secure from the plan sponsor and plan 
                        participants such information as the Secretary 
                        shall specify for the purpose of identifying 
                        situations where the group health plan is or 
                        has been a primary plan to the program under 
                        this title; and
                            ``(ii) submit such information to the 
                        Secretary in a form and manner (including 
                        frequency) specified by the Secretary.
                    ``(B) Enforcement.--
                            ``(i) In general.--An entity, a plan 
                        administrator, or a fiduciary described in 
                        subparagraph (A) that fails to comply with the 
                        requirements under such subparagraph shall be 
                        subject to a civil money penalty of $1,000 for 
                        each day of noncompliance for each individual 
                        for which the information under such 
                        subparagraph should have been submitted. The 
                        provisions of subsections (e) and (k) of 
                        section 1128A shall apply to a civil money 
                        penalty under the previous sentence in the same 
                        manner as such provisions apply to a penalty or 
                        proceeding under section 1128A(a). A civil 
                        money penalty under this clause shall be in 
                        addition to any other penalties prescribed by 
                        law and in addition to any Medicare secondary 
                        payer claim under this title with respect to an 
                        individual.
                            ``(ii) Deposit of amounts collected.--Any 
                        amounts collected pursuant to clause (i) shall 
                        be deposited in the Federal Hospital Insurance 
                        Trust Fund under section 1817.
                    ``(C) Sharing of information.--Notwithstanding any 
                other provision of law, under terms and conditions 
                established by the Secretary, the Secretary--
                            ``(i) shall share information on 
                        entitlement under Part A and enrollment under 
                        Part B under this title with entities, plan 
                        administrators, and fiduciaries described in 
                        subparagraph (A);
                            ``(ii) may share the entitlement and 
                        enrollment information described in clause (i) 
                        with entities and persons not described in such 
                        clause; and
                            ``(iii) may share information collected 
                        under this paragraph as necessary for purposes 
                        of the proper coordination of benefits.
                    ``(D) Implementation.--Notwithstanding any other 
                provision of law, the Secretary may implement this 
                paragraph by program instruction or otherwise.
            ``(8) Required submission of information by or on behalf of 
        liability insurance (including self-insurance), no fault 
        insurance, and workers' compensation laws and plans.--
                    ``(A) Requirement.--On and after the first day of 
                the first calendar quarter beginning after the date 
                that is 18 months after the date of the enactment of 
                this paragraph, an applicable plan shall--
                            ``(i) determine whether a claimant 
                        (including an individual whose claim is 
                        unresolved) is entitled to benefits under the 
                        program under this title on any basis; and
                            ``(ii) if the claimant is determined to be 
                        so entitled, submit the information described 
                        in subparagraph (B) with respect to the 
                        claimant to the Secretary in a form and manner 
                        (including frequency) specified by the 
                        Secretary.
                    ``(B) Required information.--The information 
                described in this subparagraph is--
                            ``(i) the identity of the claimant for 
                        which the determination under subparagraph (A) 
                        was made; and
                            ``(ii) such other information as the 
                        Secretary shall specify in order to enable the 
                        Secretary to make an appropriate determination 
                        concerning coordination of benefits, including 
                        any applicable recovery claim.
                    ``(C) Timing.--Information shall be submitted under 
                subparagraph (A)(ii) within a time specified by the 
                Secretary after the claim is resolved through a 
                settlement, judgment, award, or other payment 
                (regardless of whether or not there is a determination 
                or admission of liability).
                    ``(D) Claimant.--For purposes of subparagraph (A), 
                the term `claimant' includes--
                            ``(i) an individual filing a claim directly 
                        against the applicable plan; and
                            ``(ii) an individual filing a claim against 
                        an individual or entity insured or covered by 
                        the applicable plan.
                    ``(E) Enforcement.--
                            ``(i) In general.--An applicable plan that 
                        fails to comply with the requirements under 
                        subparagraph (A) with respect to any claimant 
                        shall be subject to a civil money penalty of 
                        $1,000 for each day of noncompliance with 
                        respect to each claimant. The provisions of 
                        subsections (e) and (k) of section 1128A shall 
                        apply to a civil money penalty under the 
                        previous sentence in the same manner as such 
                        provisions apply to a penalty or proceeding 
                        under section 1128A(a). A civil money penalty 
                        under this clause shall be in addition to any 
                        other penalties prescribed by law and in 
                        addition to any Medicare secondary payer claim 
                        under this title with respect to an individual.
                            ``(ii) Deposit of amounts collected.--Any 
                        amounts collected pursuant to clause (i) shall 
                        be deposited in the Federal Hospital Insurance 
                        Trust Fund.
                    ``(F) Applicable plan.--In this paragraph, the term 
                `applicable plan' means the following laws, plans, or 
                other arrangements, including the fiduciary or 
                administrator for such law, plan, or arrangement:
                            ``(i) Liability insurance (including self-
                        insurance).
                            ``(ii) No fault insurance.
                            ``(iii) Workers' compensation laws or 
                        plans.
                    ``(G) Sharing of information.--The Secretary may 
                share information collected under this paragraph as 
                necessary for purposes of the proper coordination of 
                benefits.
                    ``(H) Implementation.--Notwithstanding any other 
                provision of law, the Secretary may implement this 
                paragraph by program instruction or otherwise.''.
    (b) Rule of Construction.--Nothing in the amendments made by this 
section shall be construed to limit the authority of the Secretary of 
Health and Human Services to collect information to carry out Medicare 
secondary payer provisions under title XVIII of the Social Security 
Act, including under parts C and D of such title.
    (c) Implementation.--For purposes of implementing paragraphs (7) 
and (8) of section 1862(b) of the Social Security Act, as added by 
subsection (a), to ensure appropriate payments under title XVIII of 
such Act, the Secretary of Health and Human Services shall provide for 
the transfer, from the Federal Hospital Insurance Trust Fund 
established under section 1817 of the Social Security Act (42 U.S.C. 
1395i) and the Federal Supplementary Medical Insurance Trust Fund 
established under section 1841 of such Act (42 U.S.C. 1395t), in such 
proportions as the Secretary determines appropriate, of $35,000,000 to 
the Centers for Medicare & Medicaid Services Program Management Account 
for the period of fiscal years 2008, 2009, and 2010.

SEC. 112. PAYMENT FOR PART B DRUGS.

    (a) Application of Alternative Volume Weighting in Computation of 
ASP.--Section 1847A(b) of the Social Security Act (42 U.S.C. 1395w-
3a(b)) is amended--
            (1) in paragraph (1)(A), by inserting ``for a multiple 
        source drug furnished before April 1, 2008, or 106 percent of 
        the amount determined under paragraph (6) for a multiple source 
        drug furnished on or after April 1, 2008'' after ``paragraph 
        (3)'';
            (2) in each of subparagraphs (A) and (B) of paragraph (4), 
        by inserting ``for single source drugs and biologicals 
        furnished before April 1, 2008, and using the methodology 
        applied under paragraph (6) for single source drugs and 
        biologicals furnished on or after April 1, 2008,'' after 
        ``paragraph (3)''; and
            (3) by adding at the end the following new paragraph:
            ``(6) Use of volume-weighted average sales prices in 
        calculation of average sales price.--
                    ``(A) In general.--For all drug products included 
                within the same multiple source drug billing and 
                payment code, the amount specified in this paragraph is 
                the volume-weighted average of the average sales prices 
                reported under section 1927(b)(3)(A)(iii) determined 
                by--
                            ``(i) computing the sum of the products 
                        (for each National Drug Code assigned to such 
                        drug products) of--
                                    ``(I) the manufacturer's average 
                                sales price (as defined in subsection 
                                (c)), determined by the Secretary 
                                without dividing such price by the 
                                total number of billing units for the 
                                National Drug Code for the billing and 
                                payment code; and
                                    ``(II) the total number of units 
                                specified under paragraph (2) sold; and
                            ``(ii) dividing the sum determined under 
                        clause (i) by the sum of the products (for each 
                        National Drug Code assigned to such drug 
                        products) of--
                                    ``(I) the total number of units 
                                specified under paragraph (2) sold; and
                                    ``(II) the total number of billing 
                                units for the National Drug Code for 
                                the billing and payment code.
                    ``(B) Billing unit defined.--For purposes of this 
                subsection, the term `billing unit' means the 
                identifiable quantity associated with a billing and 
                payment code, as established by the Secretary.''.
    (b) Treatment of Certain Drugs.--Section 1847A(b) of the Social 
Security Act (42 U.S.C. 1395w-3a(b)), as amended by subsection (a), is 
amended--
            (1) in paragraph (1), by inserting ``paragraph (7) and'' 
        after ``Subject to''; and
            (2) by adding at the end the following new paragraph:
            ``(7) Special rule.--Beginning with April 1, 2008, the 
        payment amount for--
                    ``(A) each single source drug or biological 
                described in section 1842(o)(1)(G) that is treated as a 
                multiple source drug because of the application of 
                subsection (c)(6)(C)(ii) is the lower of--
                            ``(i) the payment amount that would be 
                        determined for such drug or biological applying 
                        such subsection; or
                            ``(ii) the payment amount that would have 
                        been determined for such drug or biological if 
                        such subsection were not applied; and
                    ``(B) a multiple source drug described in section 
                1842(o)(1)(G) (excluding a drug or biological that is 
                treated as a multiple source drug because of the 
                application of such subsection) is the lower of--
                            ``(i) the payment amount that would be 
                        determined for such drug or biological taking 
                        into account the application of such 
                        subsection; or
                            ``(ii) the payment amount that would have 
                        been determined for such drug or biological if 
                        such subsection were not applied.''.

SEC. 113. PAYMENT RATE FOR CERTAIN DIAGNOSTIC LABORATORY TESTS.

    Section 1833(h) of the Social Security Act (42 U.S.C. 1395l(h)) is 
amended by adding at the end the following new paragraph:
    ``(9) Notwithstanding any other provision in this part, in the case 
of any diagnostic laboratory test for HbA1c that is labeled by the Food 
and Drug Administration for home use and is furnished on or after April 
1, 2008, the payment rate for such test shall be the payment rate 
established under this part for a glycated hemoglobin test (identified 
as of October 1, 2007, by HCPCS code 83036 (and any succeeding 
codes)).''.

SEC. 114. LONG-TERM CARE HOSPITALS.

    (a) Definition of Long-Term Care Hospital.--Section 1861 of the 
Social Security Act (42 U.S.C. 1395x) is amended by adding at the end 
the following new subsection:

                       ``Long-Term Care Hospital

    ``(ccc) The term `long-term care hospital' means a hospital which--
            ``(1) is primarily engaged in providing inpatient services, 
        by or under the supervision of a physician, to Medicare 
        beneficiaries whose medically complex conditions require a long 
        hospital stay and programs of care provided by a long-term care 
        hospital;
            ``(2) has an average inpatient length of stay (as 
        determined by the Secretary) of greater than 25 days, or meets 
        the requirements of clause (II) of section 1886(d)(1)(B)(iv);
            ``(3) satisfies the requirements of subsection (e); and
            ``(4) meets the following facility criteria:
                    ``(A) the institution has a patient review process, 
                documented in the patient medical record, that screens 
                patients prior to admission for appropriateness of 
                admission to a long-term care hospital, validates 
                within 48 hours of admission that patients meet 
                admission criteria for long-term care hospitals, 
                regularly evaluates patients throughout their stay for 
                continuation of care in a long-term care hospital, and 
                assesses the available discharge options when patients 
                no longer meet such continued stay criteria;
                    ``(B) the institution has active physician 
                involvement with patients during their treatment 
                through an organized medical staff, physician-directed 
                treatment with physician on-site availability on a 
                daily basis to review patient progress, and consulting 
                physicians on call and capable of being at the 
                patient's side within a moderate period of time, as 
                determined by the Secretary; and
                    ``(C) the institution has interdisciplinary team 
                treatment for patients, requiring interdisciplinary 
                teams of health care professionals, including 
                physicians, to prepare and carry out an individualized 
                treatment plan for each patient.''.
    (b) Study and Report on Long-Term Care Hospital Facility and 
Patient Criteria.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        conduct a study on the establishment of national long-term care 
        hospital facility and patient criteria for purposes of 
        determining medical necessity, appropriateness of admission, 
        and continued stay at, and discharge from, long-term care 
        hospitals.
            (2) Report.--Not later than 18 months after the date of the 
        enactment of this Act, the Secretary shall submit to Congress a 
        report on the study conducted under paragraph (1), together 
        with recommendations for such legislation and administrative 
        actions, including timelines for implementation of patient 
        criteria or other actions, as the Secretary determines 
        appropriate.
            (3) Considerations.--In conducting the study and preparing 
        the report under this subsection, the Secretary shall 
        consider--
                    (A) recommendations contained in a report to 
                Congress by the Medicare Payment Advisory Commission in 
                June 2004 for long-term care hospital-specific facility 
                and patient criteria to ensure that patients admitted 
                to long-term care hospitals are medically complex and 
                appropriate to receive long-term care hospital 
                services; and
                    (B) ongoing work by the Secretary to evaluate and 
                determine the feasibility of such recommendations.
    (c) Payment for Long-Term Care Hospital Services.--
            (1) No application of 25 percent patient threshold payment 
        adjustment to freestanding and grandfathered ltchs.--The 
        Secretary shall not apply, for cost reporting periods beginning 
        on or after the date of the enactment of this Act for a 3-year 
        period--
                    (A) section 412.536 of title 42, Code of Federal 
                Regulations, or any similar provision, to freestanding 
                long-term care hospitals; and
                    (B) such section or section 412.534 of title 42, 
                Code of Federal Regulations, or any similar provisions, 
                to a long-term care hospital identified by the 
                amendment made by section 4417(a) of the Balanced 
                Budget Act of 1997 (Public Law 105-33).
            (2) Payment for hospitals-within-hospitals.--
                    (A) In general.--Payment to an applicable long-term 
                care hospital or satellite facility which is located in 
                a rural area or which is co-located with an urban 
                single or MSA dominant hospital under paragraphs 
                (d)(1), (e)(1), and (e)(4) of section 412.534 of title 
                42, Code of Federal Regulations, shall not be subject 
                to any payment adjustment under such section if no more 
                than 75 percent of the hospital's Medicare discharges 
                (other than discharges described in paragraph (d)(2) or 
                (e)(3) of such section) are admitted from a co-located 
                hospital.
                    (B) Co-located long-term care hospitals and 
                satellite facilities.--
                            (i) In general.--Payment to an applicable 
                        long-term care hospital or satellite facility 
                        which is co-located with another hospital shall 
                        not be subject to any payment adjustment under 
                        section 412.534 of title 42, Code of Federal 
                        Regulations, if no more than 50 percent of the 
                        hospital's Medicare discharges (other than 
                        discharges described in paragraph (c)(3) of 
                        such section) are admitted from a co-located 
                        hospital.
                            (ii) Applicable long-term care hospital or 
                        satellite facility defined.--In this paragraph, 
                        the term ``applicable long-term care hospital 
                        or satellite facility'' means a hospital or 
                        satellite facility that is subject to the 
                        transition rules under section 412.534(g) of 
                        title 42, Code of Federal Regulations.
                    (C) Effective date.--Subparagraphs (A) and (B) 
                shall apply to cost reporting periods beginning on or 
                after the date of the enactment of this Act for a 3-
                year period.
            (3) No application of very short-stay outlier policy.--The 
        Secretary shall not apply, for the 3-year period beginning on 
        the date of the enactment of this Act, the amendments finalized 
        on May 11, 2007 (72 Federal Register 26904, 26992) made to the 
        short-stay outlier payment provision for long-term care 
        hospitals contained in section 412.529(c)(3)(i) of title 42, 
        Code of Federal Regulations, or any similar provision.
            (4) No application of one-time adjustment to standard 
        amount.--The Secretary shall not, for the 3-year period 
        beginning on the date of the enactment of this Act, make the 
        one-time prospective adjustment to long-term care hospital 
        prospective payment rates provided for in section 412.523(d)(3) 
        of title 42, Code of Federal Regulations, or any similar 
        provision.
    (d) Moratorium on the Establishment of Long-Term Care Hospitals, 
Long-Term Care Satellite Facilities and on the Increase of Long-Term 
Care Hospital Beds in Existing Long-Term Care Hospitals or Satellite 
Facilities.--
            (1) In general.--During the 3-year period beginning on the 
        date of the enactment of this Act, the Secretary shall impose a 
        moratorium for purposes of the Medicare program under title 
        XVIII of the Social Security Act--
                    (A) subject to paragraph (2), on the establishment 
                and classification of a long-term care hospital or 
                satellite facility, other than an existing long-term 
                care hospital or facility; and
                    (B) subject to paragraph (3), on an increase of 
                long-term care hospital beds in existing long-term care 
                hospitals or satellite facilities.
            (2) Exception for certain long-term care hospitals.--The 
        moratorium under paragraph (1)(A) shall not apply to a long-
        term care hospital that as of the date of the enactment of this 
        Act--
                    (A) began its qualifying period for payment as a 
                long-term care hospital under section 412.23(e) of 
                title 42, Code of Federal Regulations, on or before the 
                date of the enactment of this Act;
                    (B) has a binding written agreement with an 
                outside, unrelated party for the actual construction, 
                renovation, lease, or demolition for a long-term care 
                hospital, and has expended, before the date of the 
                enactment of this Act, at least 10 percent of the 
                estimated cost of the project (or, if less, 
                $2,500,000); or
                    (C) has obtained an approved certificate of need in 
                a State where one is required on or before the date of 
                the enactment of this Act.
            (3) Exception for bed increases during moratorium.--
                    (A) In general.--Subject to subparagraph (B), the 
                moratorium under paragraph (1)(B) shall not apply to an 
                increase in beds in an existing hospital or satellite 
                facility if the hospital or facility--
                            (i) is located in a State where there is 
                        only one other long-term care hospital; and
                            (ii) requests an increase in beds following 
                        the closure or the decrease in the number of 
                        beds of another long-term care hospital in the 
                        State.
                    (B) No effect on certain limitation.--The exception 
                under subparagraph (A) shall not effect the limitation 
                on increasing beds under sections 412.22(h)(3) and 
                412.22(f) of title 42, Code of Federal Regulations.
            (4) Existing hospital or satellite facility defined.--For 
        purposes of this subsection, the term ``existing'' means, with 
        respect to a hospital or satellite facility, a hospital or 
        satellite facility that received payment under the provisions 
        of subpart O of part 412 of title 42, Code of Federal 
        Regulations, as of the date of the enactment of this Act.
            (5) Judicial review.--There shall be no administrative or 
        judicial review under section 1869 of the Social Security Act 
        (42 U.S.C. 1395ff), section 1878 of such Act (42 U.S.C. 
        1395oo), or otherwise, of the application of this subsection by 
        the Secretary.
    (e) Long-Term Care Hospital Payment Update.--
            (1) In general.--Section 1886 of the Social Security Act 
        (42 U.S.C. 1395ww) is amended by adding at the end the 
        following new subsection:
    ``(m) Prospective Payment for Long-Term Care Hospitals.--
            ``(1) Reference to establishment and implementation of 
        system.--For provisions related to the establishment and 
        implementation of a prospective payment system for payments 
        under this title for inpatient hospital services furnished by a 
        long-term care hospital described in subsection (d)(1)(B)(iv), 
        see section 123 of the Medicare, Medicaid, and SCHIP Balanced 
        Budget Refinement Act of 1999 and section 307(b) of the 
        Medicare, Medicaid, and SCHIP Benefits Improvement and 
        Protection Act of 2000.
            ``(2) Update for rate year 2008.--In implementing the 
        system described in paragraph (1) for discharges occurring 
        during the rate year ending in 2008 for a hospital, the base 
        rate for such discharges for the hospital shall be the same as 
        the base rate for discharges for the hospital occurring during 
        the rate year ending in 2007.''.
            (2) Delayed effective date.--Subsection (m)(2) of section 
        1886 of the Social Security Act, as added by paragraph (1), 
        shall not apply to discharges occurring on or after July 1, 
        2007, and before April 1, 2008.
    (f) Expanded Review of Medical Necessity.--
            (1) In general.--The Secretary of Health and Human Services 
        shall provide, under contracts with one or more appropriate 
        fiscal intermediaries or medicare administrative contractors 
        under section 1874A(a)(4)(G) of the Social Security Act (42 
        U.S.C. 1395kk-1(a)(4)(G)), for reviews of the medical necessity 
        of admissions to long-term care hospitals (described in section 
        1886(d)(1)(B)(iv) of such Act) and continued stay at such 
        hospitals, of individuals entitled to, or enrolled for, 
        benefits under part A of title XVIII of such Act consistent 
        with this subsection. Such reviews shall be made for discharges 
        occurring on or after October 1, 2007.
            (2) Review methodology.--The medical necessity reviews 
        under paragraph (1) shall be conducted on an annual basis in 
        accordance with rules specified by the Secretary. Such reviews 
        shall--
                    (A) provide for a statistically valid and 
                representative sample of admissions of such individuals 
                sufficient to provide results at a 95 percent 
                confidence interval; and
                    (B) guarantee that at least 75 percent of 
                overpayments received by long-term care hospitals for 
                medically unnecessary admissions and continued stays of 
                individuals in long-term care hospitals will be 
                identified and recovered and that related days of care 
                will not be counted toward the length of stay 
                requirement contained in section 1886(d)(1)(B)(iv) of 
                the Social Security Act (42 U.S.C. 
                1395ww(d)(1)(B)(iv)).
            (3) Continuation of reviews.--Under contracts under this 
        subsection, the Secretary shall establish an error rate with 
        respect to such reviews that could require further review of 
        the medical necessity of admissions and continued stay in the 
        hospital involved and other actions as determined by the 
        Secretary.
            (4) Termination of required reviews.--
                    (A) In general.--Subject to subparagraph (B), the 
                previous provisions of this subsection shall cease to 
                apply for discharges occurring on or after October 1, 
                2010.
                    (B) Continuation.--As of the date specified in 
                subparagraph (A), the Secretary shall determine whether 
                to continue to guarantee, through continued medical 
                review and sampling under this paragraph, recovery of 
                at least 75 percent of overpayments received by long-
                term care hospitals due to medically unnecessary 
                admissions and continued stays.
            (5) Funding.--The costs to fiscal intermediaries or 
        medicare administrative contractors conducting the medical 
        necessity reviews under paragraph (1) shall be funded from the 
        aggregate overpayments recouped by the Secretary of Health and 
        Human Services from long-term care hospitals due to medically 
        unnecessary admissions and continued stays. The Secretary may 
        use an amount not in excess of 40 percent of the overpayments 
        recouped under this paragraph to compensate the fiscal 
        intermediaries or Medicare administrative contractors for the 
        costs of services performed.
    (g) Implementation.--For purposes of carrying out the provisions 
of, and amendments made by, this title, in addition to any amounts 
otherwise provided in this title, there are appropriated to the Centers 
for Medicare & Medicaid Services Program Management Account, out of any 
money in the Treasury not otherwise appropriated, $35,000,000 for the 
period of fiscal years 2008 and 2009.

SEC. 115. PAYMENT FOR INPATIENT REHABILITATION FACILITY (IRF) SERVICES.

    (a) Payment Update.--
            (1) In general.--Section 1886(j)(3)(C) of the Social 
        Security Act (42 U.S.C. 1395ww(j)(3)(C)) is amended by adding 
        at the end the following: ``The increase factor to be applied 
        under this subparagraph for each of fiscal years 2008 and 2009 
        shall be 0 percent.''.
            (2) Delayed effective date.--The amendment made by 
        paragraph (1) shall not apply to payment units occurring before 
        April 1, 2008.
    (b) Inpatient Rehabilitation Facility Classification Criteria.--
            (1) In general.--Section 5005 of the Deficit Reduction Act 
        of 2005 (Public Law 109-171; 42 U.S.C. 1395ww note) is 
        amended--
                    (A) in subsection (a), by striking ``apply the 
                applicable percent specified in subsection (b)'' and 
                inserting ``require a compliance rate that is no 
                greater than the 60 percent compliance rate that became 
                effective for cost reporting periods beginning on or 
                after July 1, 2006,''; and
                    (B) by amending subsection (b) to read as follows:
    ``(b) Continued Use of Comorbidities.--For cost reporting periods 
beginning on or after July 1, 2007, the Secretary shall include 
patients with comorbidities as described in section 412.23(b)(2)(i) of 
title 42, Code of Federal Regulations (as in effect as of January 1, 
2007), in the inpatient population that counts toward the percent 
specified in subsection (a).''.
            (2) Effective date.--The amendment made by paragraph (1)(A) 
        shall apply for cost reporting periods beginning on or after 
        July 1, 2007.
    (c) Recommendations for Classifying Inpatient Rehabilitation 
Hospitals and Units.--
            (1) Report to congress.--Not later than 18 months after the 
        date of the enactment of this Act, the Secretary of Health and 
        Human Services, in consultation with physicians (including 
        geriatricians and physiatrists), administrators of inpatient 
        rehabilitation, acute care hospitals, skilled nursing 
        facilities, and other settings providing rehabilitation 
        services, Medicare beneficiaries, trade organizations 
        representing inpatient rehabilitation hospitals and units and 
        skilled nursing facilities, and the Medicare Payment Advisory 
        Commission, shall submit to the Committee on Ways and Means of 
        the House of Representatives and the Committee on Finance of 
        the Senate a report that includes the following:
                    (A) An analysis of Medicare beneficiaries' access 
                to medically necessary rehabilitation services, 
                including the potential effect of the 75 percent rule 
                (as defined in paragraph (2)) on access to care.
                    (B) An analysis of alternatives or refinements to 
                the 75 percent rule policy for determining criteria for 
                inpatient rehabilitation hospital and unit designation 
                under the Medicare program, including alternative 
                criteria which would consider a patient's functional 
                status, diagnosis, co-morbidities, and other relevant 
                factors.
                    (C) An analysis of the conditions for which 
                individuals are commonly admitted to inpatient 
                rehabilitation hospitals that are not included as a 
                condition described in section 412.23(b)(2)(iii) of 
                title 42, Code of Federal Regulations, to determine the 
                appropriate setting of care, and any variation in 
                patient outcomes and costs, across settings of care, 
                for treatment of such conditions.
            (2) 75 percent rule defined.--For purposes of this 
        subsection, the term ``75 percent rule'' means the requirement 
        of section 412.23(b)(2) of title 42, Code of Federal 
        Regulations, that 75 percent of the patients of a 
        rehabilitation hospital or converted rehabilitation unit are in 
        1 or more of 13 listed treatment categories.

SEC. 116. EXTENSION OF ACCOMMODATION OF PHYSICIANS ORDERED TO ACTIVE 
              DUTY IN THE ARMED SERVICES.

    Section 1842(b)(6)(D)(iii) of the Social Security Act (42 U.S.C. 
1395u(b)(6)(D)(iii)), as amended by Public Law 110-54 (121 Stat. 551) 
is amended by striking ``January 1, 2008'' and inserting ``July 1, 
2008''.

SEC. 117. TREATMENT OF CERTAIN HOSPITALS.

    (a) Extending Certain Medicare Hospital Wage Index 
Reclassifications Through Fiscal Year 2008.--
            (1) In general.--Section 106(a) of division B of the Tax 
        Relief and Health Care Act of 2006 (42 U.S.C. 1395 note) is 
        amended by striking ``September 30, 2007'' and inserting 
        ``September 30, 2008''.
            (2) Special exception reclassifications.--The Secretary of 
        Health and Human Services shall extend for discharges occurring 
        through September 30, 2008, the special exception 
        reclassifications made under the authority of section 
        1886(d)(5)(I)(i) of the Social Security Act (42 U.S.C. 
        1395ww(d)(5)(I)(i)) and contained in the final rule promulgated 
        by the Secretary in the Federal Register on August 11, 2004 (69 
        Fed. Reg. 49105, 49107).
            (3) Use of particular wage index.--For purposes of 
        implementation of this subsection, the Secretary shall use the 
        hospital wage index that was promulgated by the Secretary in 
        the Federal Register on October 10, 2007 (72 Fed. Reg. 57634), 
        and any subsequent corrections.
    (b) Disregarding Section 508 Hospital Reclassifications for 
Purposes of Group Reclassifications.--Section 508 of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173, 42 U.S.C. 1395ww note) is amended by adding at the end the 
following new subsection:
    ``(g) Disregarding Hospital Reclassifications for Purposes of Group 
Reclassifications.--For purposes of the reclassification of a group of 
hospitals in a geographic area under section 1886(d) of the Social 
Security Act for purposes of discharges occurring during fiscal year 
2008, a hospital reclassified under this section (including any such 
reclassification which is extended under section 106(a) of the Medicare 
Improvements and Extension Act of 2006) shall not be taken into account 
and shall not prevent the other hospitals in such area from continuing 
such a group for such purpose.''.
    (c) Correction of Application of Wage Index During Tax Relief and 
Health Care Act Extension.--In the case of a subsection (d) hospital 
(as defined for purposes of section 1886 of the Social Security Act (42 
U.S.C. 1395ww)) with respect to which--
            (1) a reclassification of its wage index for purposes of 
        such section was extended for the period beginning on April 1, 
        2007, and ending on September 30, 2007, pursuant to subsection 
        (a) of section 106 of division B of the Tax Relief and Health 
        Care Act of 2006 (42 U.S.C. 1395 note); and
            (2) the wage index applicable for such hospital during such 
        period was lower than the wage index applicable for such 
        hospital during the period beginning on October 1, 2006, and 
        ending on March 31, 2007,
the Secretary shall apply the higher wage index that was applicable for 
such hospital during the period beginning on October 1, 2006, and 
ending on March 31, 2007, for the entire fiscal year 2007. If the 
Secretary determines that the application of the preceding sentence to 
a hospital will result in a hospital being owed additional 
reimbursement, the Secretary shall make such payments within 90 days 
after the settlement of the applicable cost report.

SEC. 118. ADDITIONAL FUNDING FOR STATE HEALTH INSURANCE ASSISTANCE 
              PROGRAMS, AREA AGENCIES ON AGING, AND AGING AND 
              DISABILITY RESOURCE CENTERS.

    (a) State Health Insurance Assistance Programs.--
            (1) In general.--The Secretary of Health and Human Services 
        shall use amounts made available under paragraph (2) to make 
        grants to States for State health insurance assistance programs 
        receiving assistance under section 4360 of the Omnibus Budget 
        Reconciliation Act of 1990.
            (2) Funding.--For purposes of making grants under this 
        subsection, the Secretary shall provide for the transfer, from 
        the Federal Hospital Insurance Trust Fund under section 1817 of 
        the Social Security Act (42 U.S.C. 1395i) and the Federal 
        Supplementary Medical Insurance Trust Fund under section 1841 
        of such Act (42 U.S.C. 1395t), in the same proportion as the 
        Secretary determines under section 1853(f) of such Act (42 
        U.S.C. 1395w-23(f)), of $15,000,000 to the Centers for Medicare 
        & Medicaid Services Program Management Account for fiscal year 
        2008.
    (b) Area Agencies on Aging and Aging and Disability Resource 
Centers.--
            (1) In general.--The Secretary of Health and Human Services 
        shall use amounts made available under paragraph (2) to make 
        grants--
                    (A) to States for area agencies on aging (as 
                defined in section 102 of the Older Americans Act of 
                1965 (42 U.S.C. 3002)); and
                    (B) to Aging and Disability Resource Centers under 
                the Aging and Disability Resource Center grant program.
            (2) Funding.--For purposes of making grants under this 
        subsection, the Secretary shall provide for the transfer, from 
        the Federal Hospital Insurance Trust Fund under section 1817 of 
        the Social Security Act (42 U.S.C. 1395i) and the Federal 
        Supplementary Medical Insurance Trust Fund under section 1841 
        of such Act (42 U.S.C. 1395t), in the same proportion as the 
        Secretary determines under section 1853(f) of such Act (42 
        U.S.C. 1395w-23(f)), of $5,000,000 to the Centers for Medicare 
        & Medicaid Services Program Management Account for the period 
        of fiscal years 2008 through 2009.

                      TITLE II--MEDICAID AND SCHIP

SEC. 201. EXTENDING SCHIP FUNDING THROUGH MARCH 31, 2009.

    (a) Through the Second Quarter of Fiscal Year 2009.--
            (1) In general.--Section 2104 of the Social Security Act 
        (42 U.S.C. 1397dd) is amended--
                    (A) in subsection (a)--
                            (i) by striking ``and'' at the end of 
                        paragraph (9);
                            (ii) by striking the period at the end of 
                        paragraph (10) and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new paragraph:
            ``(11) for each of fiscal years 2008 and 2009, 
        $5,000,000,000.''; and
                    (B) in subsection (c)(4)(B), by striking ``for 
                fiscal year 2007'' and inserting ``for each of fiscal 
                years 2007 through 2009''.
            (2) Availability of extended funding.--Funds made available 
        from any allotment made from funds appropriated under 
        subsection (a)(11) or (c)(4)(B) of section 2104 of the Social 
        Security Act (42 U.S.C. 1397dd) for fiscal year 2008 or 2009 
        shall not be available for child health assistance for items 
        and services furnished after March 31, 2009, or, if earlier, 
        the date of the enactment of an Act that provides funding for 
        fiscal years 2008 and 2009, and for one or more subsequent 
        fiscal years for the State Children's Health Insurance Program 
        under title XXI of the Social Security Act.
            (3) End of funding under continuing resolution.--Section 
        136(a)(2) of Public Law 110-92 is amended by striking ``after 
        the termination date'' and all that follows and inserting 
        ``after the date of the enactment of the Medicare, Medicaid, 
        and SCHIP Extension Act of 2007.''.
            (4) Clarification of application of funding under 
        continuing resolution.--Section 107 of Public Law 110-92 shall 
        apply with respect to expenditures made pursuant to section 
        136(a)(1) of such Public Law.
    (b) Extension of Treatment of Qualifying States; Rules on 
Redistribution of Unspent Fiscal Year 2005 Allotments Made Permanent.--
            (1) In general.--Section 2105(g)(1)(A) of the Social 
        Security Act (42 U.S.C. 1397ee(g)(1)(A)), as amended by 
        subsection (d) of section 136 of Public Law 110-92, is amended 
        by striking ``or 2008'' and inserting ``2008, or 2009''.
            (2) Applicability.--The amendment made by paragraph (1) 
        shall be in effect through March 31, 2009.
            (3) Certain rules made permanent.--Subsection (e) of 
        section 136 of Public Law 110-92 is repealed.
    (c) Additional Allotments To Eliminate Remaining Funding Shortfalls 
Through March 31, 2009.--
            (1) In general.--Section 2104 of the Social Security Act 
        (42 U.S.C. 1397dd) is amended by adding at the end the 
        following new subsections:
    ``(j) Additional Allotments To Eliminate Funding Shortfalls for 
Fiscal Year 2008.--
            ``(1) Appropriation; allotment authority.--For the purpose 
        of providing additional allotments described in subparagraphs 
        (A) and (B) of paragraph (3), there is appropriated, out of any 
        money in the Treasury not otherwise appropriated, such sums as 
        may be necessary, not to exceed $1,600,000,000 for fiscal year 
        2008.
            ``(2) Shortfall states described.--For purposes of 
        paragraph (3), a shortfall State described in this paragraph is 
        a State with a State child health plan approved under this 
        title for which the Secretary estimates, on the basis of the 
        most recent data available to the Secretary as of November 30, 
        2007, that the Federal share amount of the projected 
        expenditures under such plan for such State for fiscal year 
        2008 will exceed the sum of--
                    ``(A) the amount of the State's allotments for each 
                of fiscal years 2006 and 2007 that will not be expended 
                by the end of fiscal year 2007;
                    ``(B) the amount, if any, that is to be 
                redistributed to the State during fiscal year 2008 in 
                accordance with subsection (i); and
                    ``(C) the amount of the State's allotment for 
                fiscal year 2008.
            ``(3) Allotments.--In addition to the allotments provided 
        under subsections (b) and (c), subject to paragraph (4), of the 
        amount available for the additional allotments under paragraph 
        (1) for fiscal year 2008, the Secretary shall allot--
                    ``(A) to each shortfall State described in 
                paragraph (2) not described in subparagraph (B), such 
                amount as the Secretary determines will eliminate the 
                estimated shortfall described in such paragraph for the 
                State; and
                    ``(B) to each commonwealth or territory described 
                in subsection (c)(3), an amount equal to the percentage 
                specified in subsection (c)(2) for the commonwealth or 
                territory multiplied by 1.05 percent of the sum of the 
                amounts determined for each shortfall State under 
                subparagraph (A).
            ``(4) Proration rule.--If the amounts available for 
        additional allotments under paragraph (1) are less than the 
        total of the amounts determined under subparagraphs (A) and (B) 
        of paragraph (3), the amounts computed under such subparagraphs 
        shall be reduced proportionally.
            ``(5) Retrospective adjustment.--The Secretary may adjust 
        the estimates and determinations made to carry out this 
        subsection as necessary on the basis of the amounts reported by 
        States not later than November 30, 2008, on CMS Form 64 or CMS 
        Form 21, as the case may be, and as approved by the Secretary.
            ``(6) One-year availability; no redistribution of 
        unexpended additional allotments.--Notwithstanding subsections 
        (e) and (f), amounts allotted to a State pursuant to this 
        subsection for fiscal year 2008, subject to paragraph (5), 
        shall only remain available for expenditure by the State 
        through September 30, 2008. Any amounts of such allotments that 
        remain unexpended as of such date shall not be subject to 
        redistribution under subsection (f).
    ``(k) Redistribution of Unused Fiscal Year 2006 Allotments to 
States With Estimated Funding Shortfalls During the First 2 Quarters of 
Fiscal Year 2009.--
            ``(1) In general.--Notwithstanding subsection (f) and 
        subject to paragraphs (3) and (4), with respect to months 
        beginning during the first 2 quarters of fiscal year 2009, the 
        Secretary shall provide for a redistribution under such 
        subsection from the allotments for fiscal year 2006 under 
        subsection (b) that are not expended by the end of fiscal year 
        2008, to a fiscal year 2009 shortfall State described in 
        paragraph (2), such amount as the Secretary determines will 
        eliminate the estimated shortfall described in such paragraph 
        for such State for the month.
            ``(2) Fiscal year 2009 shortfall state described.--A fiscal 
        year 2009 shortfall State described in this paragraph is a 
        State with a State child health plan approved under this title 
        for which the Secretary estimates, on a monthly basis using the 
        most recent data available to the Secretary as of such month, 
        that the Federal share amount of the projected expenditures 
        under such plan for such State for the first 2 quarters of 
        fiscal year 2009 will exceed the sum of--
                    ``(A) the amount of the State's allotments for each 
                of fiscal years 2007 and 2008 that was not expended by 
                the end of fiscal year 2008; and
                    ``(B) the amount of the State's allotment for 
                fiscal year 2009.
            ``(3) Funds redistributed in the order in which states 
        realize funding shortfalls.--The Secretary shall redistribute 
        the amounts available for redistribution under paragraph (1) to 
        fiscal year 2009 shortfall States described in paragraph (2) in 
        the order in which such States realize monthly funding 
        shortfalls under this title for fiscal year 2009. The Secretary 
        shall only make redistributions under this subsection to the 
        extent that there are unexpended fiscal year 2006 allotments 
        under subsection (b) available for such redistributions.
            ``(4) Proration rule.--If the amounts available for 
        redistribution under paragraph (1) are less than the total 
        amounts of the estimated shortfalls determined for the month 
        under that paragraph, the amount computed under such paragraph 
        for each fiscal year 2009 shortfall State for the month shall 
        be reduced proportionally.
            ``(5) Retrospective adjustment.--The Secretary may adjust 
        the estimates and determinations made to carry out this 
        subsection as necessary on the basis of the amounts reported by 
        States not later than May 31, 2009, on CMS Form 64 or CMS Form 
        21, as the case may be, and as approved by the Secretary.
            ``(6) Availability; no further redistribution.--
        Notwithstanding subsections (e) and (f), amounts redistributed 
        to a State pursuant to this subsection for the first 2 quarters 
        of fiscal year 2009 shall only remain available for expenditure 
        by the State through March 31, 2009, and any amounts of such 
        redistributions that remain unexpended as of such date, shall 
        not be subject to redistribution under subsection (f).
    ``(l) Additional Allotments To Eliminate Funding Shortfalls for the 
First 2 Quarters of Fiscal Year 2009.--
            ``(1) Appropriation; allotment authority.--For the purpose 
        of providing additional allotments described in subparagraphs 
        (A) and (B) of paragraph (3), there is appropriated, out of any 
        money in the Treasury not otherwise appropriated, such sums as 
        may be necessary, not to exceed $275,000,000 for the first 2 
        quarters of fiscal year 2009.
            ``(2) Shortfall states described.--For purposes of 
        paragraph (3), a shortfall State described in this paragraph is 
        a State with a State child health plan approved under this 
        title for which the Secretary estimates, on the basis of the 
        most recent data available to the Secretary, that the Federal 
        share amount of the projected expenditures under such plan for 
        such State for the first 2 quarters of fiscal year 2009 will 
        exceed the sum of--
                    ``(A) the amount of the State's allotments for each 
                of fiscal years 2007 and 2008 that will not be expended 
                by the end of fiscal year 2008;
                    ``(B) the amount, if any, that is to be 
                redistributed to the State during fiscal year 2009 in 
                accordance with subsection (k); and
                    ``(C) the amount of the State's allotment for 
                fiscal year 2009.
            ``(3) Allotments.--In addition to the allotments provided 
        under subsections (b) and (c), subject to paragraph (4), of the 
        amount available for the additional allotments under paragraph 
        (1) for the first 2 quarters of fiscal year 2009, the Secretary 
        shall allot--
                    ``(A) to each shortfall State described in 
                paragraph (2) not described in subparagraph (B) such 
                amount as the Secretary determines will eliminate the 
                estimated shortfall described in such paragraph for the 
                State; and
                    ``(B) to each commonwealth or territory described 
                in subsection (c)(3), an amount equal to the percentage 
                specified in subsection (c)(2) for the commonwealth or 
                territory multiplied by 1.05 percent of the sum of the 
                amounts determined for each shortfall State under 
                subparagraph (A).
            ``(4) Proration rule.--If the amounts available for 
        additional allotments under paragraph (1) are less than the 
        total of the amounts determined under subparagraphs (A) and (B) 
        of paragraph (3), the amounts computed under such subparagraphs 
        shall be reduced proportionally.
            ``(5) Retrospective adjustment.--The Secretary may adjust 
        the estimates and determinations made to carry out this 
        subsection as necessary on the basis of the amounts reported by 
        States not later than May 31, 2009, on CMS Form 64 or CMS Form 
        21, as the case may be, and as approved by the Secretary.
            ``(6) Availability; no redistribution of unexpended 
        additional allotments.--Notwithstanding subsections (e) and 
        (f), amounts allotted to a State pursuant to this subsection 
        for fiscal year 2009, subject to paragraph (5), shall only 
        remain available for expenditure by the State through March 31, 
        2009. Any amounts of such allotments that remain unexpended as 
        of such date shall not be subject to redistribution under 
        subsection (f).''.

SEC. 202. EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA) AND 
              ABSTINENCE EDUCATION PROGRAM.

    Section 401 of division B of the Tax Relief and Health Care Act of 
2006 (Public Law 109-432, 120 Stat. 2994), as amended by section 1 of 
Public Law 110-48 (121 Stat. 244) and section 2 of the TMA, Abstinence, 
Education, and QI Programs Extension Act of 2007 (Public Law 110-90, 
121 Stat. 984), is amended--
            (1) by striking ``December 31, 2007'' and inserting ``June 
        30, 2008''; and
            (2) by striking ``first quarter'' and inserting ``third 
        quarter'' each place it appears.

SEC. 203. EXTENSION OF QUALIFYING INDIVIDUAL (QI) PROGRAM.

    (a) Extension.--Section 1902(a)(10)(E)(iv) of the Social Security 
Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended by striking ``December 
2007'' and inserting ``June 2008''.
    (b) Extending Total Amount Available for Allocation.--Section 
1933(g)(2) of the Social Security Act (42 U.S.C. 1396u-3(g)(2)) is 
amended--
            (1) in subparagraph (G), by striking ``and'' at the end;
            (2) in subparagraph (H), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(I) for the period that begins on January 1, 
                2008, and ends on June 30, 2008, the total allocation 
                amount is $200,000,000.''.

SEC. 204. MEDICAID DSH EXTENSION.

    Section 1923(f)(6) of the Social Security Act (42 U.S.C. 1396r-
4(f)(6)) is amended--
            (1) in the heading, by inserting ``and portions of fiscal 
        year 2008'' after ``fiscal year 2007''; and
            (2) in subparagraph (A)--
                    (A) in clause (i), by adding at the end (after and 
                below subclause (II)) the following:
                        ``Only with respect to fiscal year 2008 for the 
                        period ending on June 30, 2008, the DSH 
                        allotment for Tennessee for such portion of the 
                        fiscal year, notwithstanding such table or 
                        terms, shall be \3/4\ of the amount specified 
                        in the previous sentence for fiscal year 
                        2007.'';
                    (B) in clause (ii)--
                            (i) by inserting ``or for a period in 
                        fiscal year 2008 described in clause (i)'' 
                        after ``fiscal year 2007''; and
                            (ii) by inserting ``or period'' after 
                        ``such fiscal year''; and
                    (C) in clause (iv)--
                            (i) in the heading, by inserting ``and 
                        fiscal year 2008'' after ``fiscal year 2007'';
                            (ii) in subclause (I)--
                                    (I) by inserting ``or for a period 
                                in fiscal year 2008 described in clause 
                                (i)'' after ``fiscal year 2007''; and
                                    (II) by inserting ``or period'' 
                                after ``for such fiscal year''; and
                            (iii) in subclause (II)--
                                    (I) by inserting ``or for a period 
                                in fiscal year 2008 described in clause 
                                (i)'' after ``fiscal year 2007''; and
                                    (II) by inserting ``or period'' 
                                after ``such fiscal year'' each place 
                                it appears; and
            (3) in subparagraph (B)(i), by adding at the end the 
        following: ``Only with respect to fiscal year 2008 for the 
        period ending on June 30, 2008, the DSH allotment for Hawaii 
        for such portion of the fiscal year, notwithstanding the table 
        set forth in paragraph (2), shall be $7,500,000.''.

SEC. 205. IMPROVING DATA COLLECTION.

    Section 2109(b)(2) of the Social Security Act (42 U.S.C. 
1397ii(b)(2)) is amended by inserting before the period at the end the 
following ``(except that only with respect to fiscal year 2008, there 
are appropriated $20,000,000 for the purpose of carrying out this 
subsection, to remain available until expended)''.

SEC. 206. MORATORIUM ON CERTAIN PAYMENT RESTRICTIONS.

    Notwithstanding any other provision of law, the Secretary of Health 
and Human Services shall not, prior to June 30, 2008, 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 coverage or payment under title XIX of the 
Social Security Act for rehabilitation services or school-based 
administration and school-based transportation if such restrictions are 
more restrictive in any aspect than those applied to such areas as of 
July 1, 2007.

                        TITLE III--MISCELLANEOUS

SEC. 301. MEDICARE PAYMENT ADVISORY COMMISSION STATUS.

    Section 1805(a) of the Social Security Act (42 U.S.C. 1395b-6(a)) 
is amended by inserting ``as an agency of Congress'' after 
``established''.

SEC. 302. SPECIAL DIABETES PROGRAMS FOR TYPE I DIABETES AND INDIANS.

    (a) Special Diabetes Programs for Type I Diabetes.--Section 
330B(b)(2)(C) of the Public Health Service Act (42 U.S.C. 254c-
2(b)(2)(C)) is amended by striking ``2008'' and inserting ``2009''.
    (b) Special Diabetes Programs for Indians.--Section 330C(c)(2)(C) 
of the Public Health Service Act (42 U.S.C. 254c-3(c)(2)(C)) is amended 
by striking ``2008'' and inserting ``2009''.
                                 <all>