[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2499 Enrolled Bill (ENR)]

:\SENENR\s2499--enr.xml [file 1 of 1]

        S.2499

                       One Hundred Tenth Congress

                                 of the

                        United States of America


                          AT THE FIRST SESSION

          Begun and held at the City of Washington on Thursday,
            the fourth day of January, two thousand and seven


                                 An Act


 
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''.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.