[Congressional Record Volume 153, Number 127 (Friday, August 3, 2007)]
[Senate]
[Pages S10953-S10977]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 SMALL BUSINESS TAX RELIEF ACT OF 2007

  On Thursday, August 2, 2007, the Senate passed H.R. 976, as amended, 
as follows:

                                H.R. 976

         Resolved, That the bill from the House of Representatives 
     (H.R. 976) entitled ``An Act to amend the Internal Revenue 
     Code of 1986 to provide tax relief for small businesses, and 
     for other purposes.'', do pass with the following amendments:
       Strike out all after the enacting clause and insert:

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

       (a) Short Title.--This Act may be cited as the ``Children's 
     Health Insurance Program Reauthorization Act of 2007''.
       (b) Amendments to Social Security Act.--Except as otherwise 
     specifically provided, whenever in this Act an amendment is 
     expressed in terms of an amendment to or repeal of a section 
     or other provision, the reference shall be considered to be 
     made to that section or other provision of the Social 
     Security Act.
       (c) References to Medicaid; CHIP; Secretary.--In this Act:
       (1) CHIP.--The term ``CHIP'' means the State Children's 
     Health Insurance Program established under title XXI of the 
     Social Security Act (42 U.S.C. 1397aa et seq.).
       (2) Medicaid.--The term ``Medicaid'' means the program for 
     medical assistance established under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.).
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (d) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; amendments to Social Security Act; references; 
              table of contents.

                       TITLE I--FINANCING OF CHIP

Sec. 101. Extension of CHIP.
Sec. 102. Allotments for the 50 States and the District of Columbia.
Sec. 103. One-time appropriation.
Sec. 104. Improving funding for the territories under CHIP and 
              Medicaid.
Sec. 105. Incentive bonuses for States.
Sec. 106. Phase-out of coverage for nonpregnant childless adults under 
              CHIP; conditions for coverage of parents.
Sec. 107. State option to cover low-income pregnant women under CHIP 
              through a State plan amendment.
Sec. 108. CHIP Contingency fund.
Sec. 109. Two-year availability of allotments; expenditures counted 
              against oldest allotments.
Sec. 110. Limitation on matching rate for States that propose to cover 
              children with effective family income that exceeds 300 
              percent of the poverty line.
Sec. 111. Option for qualifying States to receive the enhanced portion 
              of the CHIP matching rate for Medicaid coverage of 
              certain children.

                   TITLE II--OUTREACH AND ENROLLMENT

Sec. 201. Grants for outreach and enrollment.
Sec. 202. Increased outreach and enrollment of Indians.
Sec. 203. Demonstration program to permit States to rely on findings by 
              an Express Lane agency to determine components of a 
              child's eligibility for Medicaid or CHIP.
Sec. 204. Authorization of certain information disclosures to simplify 
              health coverage determinations.

               TITLE III--REDUCING BARRIERS TO ENROLLMENT

Sec. 301. Verification of declaration of citizenship or nationality for 
              purposes of eligibility for Medicaid and CHIP.
Sec. 302. Reducing administrative barriers to enrollment.

      TITLE IV--REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE

  Subtitle A--Additional State Option for Providing Premium Assistance

Sec. 401. Additional State option for providing premium assistance.
Sec. 402. Outreach, education, and enrollment assistance.

   Subtitle B--Coordinating Premium Assistance With Private Coverage

Sec. 411. Special enrollment period under group health plans in case of 
              termination of Medicaid or CHIP coverage or eligibility 
              for assistance in purchase of employment-based coverage; 
              coordination of coverage.

 TITLE V--STRENGTHENING QUALITY OF CARE AND HEALTH OUTCOMES OF CHILDREN

Sec. 501. Child health quality improvement activities for children 
              enrolled in Medicaid or CHIP.
Sec. 502. Improved information regarding access to coverage under CHIP.
Sec. 503. Application of certain managed care quality safeguards to 
              CHIP.

                        TITLE VI--MISCELLANEOUS

Sec. 601. Technical correction regarding current State authority under 
              Medicaid.
Sec. 602. Payment error rate measurement (``PERM'').
Sec. 603. Elimination of counting medicaid child presumptive 
              eligibility costs against title XXI allotment.
Sec. 604. Improving data collection.
Sec. 605. Deficit Reduction Act technical corrections.
Sec. 606. Elimination of confusing program references.
Sec. 607. Mental health parity in CHIP plans.
Sec. 608. Dental health grants.
Sec. 609. Application of prospective payment system for services 
              provided by Federally-qualified health centers and rural 
              health clinics.
Sec. 610. Support for injured servicemembers.
Sec. 611. Military family job protection.
Sec. 612. Sense of Senate regarding access to affordable and meaningful 
              health insurance coverage.
Sec. 613. Demonstraion projects relating to diabetes prevention.
Sec. 614. Outreach regarding health insurance options available to 
              children.

                     TITLE VII--REVENUE PROVISIONS

Sec. 701. Increase in excise tax rate on tobacco products.
Sec. 702. Administrative improvements.
Sec. 703. Time for payment of corporate estimated taxes.

                       TITLE VIII--EFFECTIVE DATE

Sec. 801. Effective date.

                       TITLE I--FINANCING OF CHIP

     SEC. 101. EXTENSION OF CHIP.

       Section 2104(a) (42 U.S.C. 1397dd(a)) is amended--
       (1) in paragraph (9), by striking ``and'' at the end;
       (2) in paragraph (10), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following new paragraphs:

[[Page S10954]]

       ``(11) for fiscal year 2008, $9,125,000,000;
       ``(12) for fiscal year 2009, $10,675,000,000;
       ``(13) for fiscal year 2010, $11,850,000,000;
       ``(14) for fiscal year 2011, $13,750,000,000; and
       ``(15) for fiscal year 2012, for purposes of making 2 semi-
     annual allotments--
       ``(A) $1,750,000,000 for the period beginning on October 1, 
     2011, and ending on March 31, 2012, and
       ``(B) $1,750,000,000 for the period beginning on April 1, 
     2012, and ending on September 30, 2012.''.

     SEC. 102. ALLOTMENTS FOR THE 50 STATES AND THE DISTRICT OF 
                   COLUMBIA.

       (a) In General.--Section 2104 (42 U.S.C. 1397dd) is amended 
     by adding at the end the following new subsection:
       ``(i) Determination of Allotments for the 50 States and the 
     District of Columbia for Fiscal Years 2008 Through 2012.--
       ``(1) Computation of allotment.--
       ``(A) In general.--Subject to the succeeding paragraphs of 
     this subsection, the Secretary shall for each of fiscal years 
     2008 through 2012 allot to each subsection (b) State from the 
     available national allotment an amount equal to 110 percent 
     of--
       ``(i) in the case of fiscal year 2008, the highest of the 
     amounts determined under paragraph (2);
       ``(ii) in the case of each of fiscal years 2009 through 
     2011, the Federal share of the expenditures determined under 
     subparagraph (B) for the fiscal year; and
       ``(iii) beginning with fiscal year 2012, subject to 
     subparagraph (E), each semi-annual allotment determined under 
     subparagraph (D).
       ``(B) Projected state expenditures for the fiscal year.--
     For purposes of subparagraphs (A)(ii) and (D), the 
     expenditures determined under this subparagraph for a fiscal 
     year are the projected expenditures under the State child 
     health plan for the fiscal year (as certified by the State 
     and submitted to the Secretary by not later than August 31 of 
     the preceding fiscal year).
       ``(C) Available national allotment.--For purposes of this 
     subsection, the term `available national allotment' means, 
     with respect to any fiscal year, the amount available for 
     allotment under subsection (a) for the fiscal year, reduced 
     by the amount of the allotments made for the fiscal year 
     under subsection (c). Subject to paragraph (3)(B), the 
     available national allotment with respect to the amount 
     available under subsection (a)(15)(A) for fiscal year 2012 
     shall be increased by the amount of the appropriation for the 
     period beginning on October 1 and ending on March 31 of such 
     fiscal year under section 103 of the Children's Health 
     Insurance Program Reauthorization Act of 2007.
       ``(D) Semi-annual allotments.--For purposes of subparagraph 
     (A)(iii), the semi-annual allotments determined under this 
     paragraph with respect to a fiscal year are as follows:
       ``(i) For the period beginning on October 1 and ending on 
     March 31 of the fiscal year, the Federal share of the portion 
     of the expenditures determined under subparagraph (B) for the 
     fiscal year which are allocable to such period.
       ``(ii) For the period beginning on April 1 and ending on 
     September 30 of the fiscal year, the Federal share of the 
     portion of the expenditures determined under subparagraph (B) 
     for the fiscal year which are allocable to such period.
       ``(E) Availability.--Each semi-annual allotment made under 
     subparagraph (A)(iii) shall remain available for expenditure 
     under this title for periods after the period specified in 
     subparagraph (D) for purposes of determining the allotment in 
     the same manner as the allotment would have been available 
     for expenditure if made for an entire fiscal year.
       ``(2) Special rule for fiscal year 2008.--
       ``(A) In general.--For purposes of paragraph (1)(A)(i), the 
     amounts determined under this paragraph for fiscal year 2008 
     are as follows:
       ``(i) The total Federal payments to the State under this 
     title for fiscal year 2007, multiplied by the annual 
     adjustment determined under subparagraph (B) for fiscal year 
     2008.
       ``(ii) The Federal share of the amount allotted to the 
     State for fiscal year 2007 under subsection (b), multiplied 
     by the annual adjustment determined under subparagraph (B) 
     for fiscal year 2008.
       ``(iii) Only in the case of--

       ``(I) a State that received a payment, redistribution, or 
     allotment under any of paragraphs (1), (2), or (4) of 
     subsection (h), the amount of the projected total Federal 
     payments to the State under this title for fiscal year 2007, 
     as determined on the basis of the November 2006 estimates 
     certified by the State to the Secretary;
       ``(II) a State whose projected total Federal payments to 
     the State under this title for fiscal year 2007, as 
     determined on the basis of the May 2006 estimates certified 
     by the State to the Secretary, were at least $95,000,000 but 
     not more than $96,000,000 higher than the projected total 
     Federal payments to the State under this title for fiscal 
     year 2007 on the basis of the November 2006 estimates, the 
     amount of the projected total Federal payments to the State 
     under this title for fiscal year 2007 on the basis of the May 
     2006 estimates; or
       ``(III) a State whose projected total Federal payments 
     under this title for fiscal year 2007, as determined on the 
     basis of the November 2006 estimates certified by the State 
     to the Secretary, exceeded all amounts available to the State 
     for expenditure for fiscal year 2007 (including any amounts 
     paid, allotted, or redistributed to the State in prior fiscal 
     years), the amount of the projected total Federal payments to 
     the State under this title for fiscal year 2007, as 
     determined on the basis of the November 2006 estimates 
     certified by the State to the Secretary,

     multiplied by the annual adjustment determined under 
     subparagraph (B) for fiscal year 2008.
       ``(iv) The projected total Federal payments to the State 
     under this title for fiscal year 2008, as determined on the 
     basis of the August 2007 projections certified by the State 
     to the Secretary by not later than September 30, 2007.
       ``(B) Annual adjustment for health care cost growth and 
     child population growth.--The annual adjustment determined 
     under this subparagraph for a fiscal year with respect to a 
     State is equal to the product of the amounts determined under 
     clauses (i) and (ii):
       ``(i) Per capita health care growth.--1 plus the percentage 
     increase (if any) in the projected nominal per capita amount 
     of National Health Expenditures for the calendar year that 
     begins during the fiscal year involved over the preceding 
     calendar year, as most recently published by the Secretary.
       ``(ii) Child population growth.--1.01 plus the percentage 
     change in the population of children under 19 years of age in 
     the State from July 1 of the fiscal year preceding the fiscal 
     year involved to July 1 of the fiscal year involved, as 
     determined by the Secretary based on the most timely and 
     accurate published estimates of the Bureau of the Census.
       ``(C) Definition.--For purposes of subparagraph (B), the 
     term `fiscal year involved' means the fiscal year for which 
     an allotment under this subsection is being determined.
       ``(D) Proration rule.--If, after the application of this 
     paragraph without regard to this subparagraph, the sum of the 
     State allotments determined under this paragraph for fiscal 
     year 2008 exceeds the available national allotment for fiscal 
     year 2008, the Secretary shall reduce each such allotment on 
     a proportional basis.
       ``(3) Alternative allotments for fiscal years 2009 through 
     2012.--
       ``(A) In general.--If the sum of the State allotments 
     determined under paragraph (1)(A)(ii) for any of fiscal years 
     2009 through 2011 exceeds the available national allotment 
     for the fiscal year, the Secretary shall allot to each 
     subsection (b) State from the available national allotment 
     for the fiscal year an amount equal to the product of--
       ``(i) the available national allotment for the fiscal year; 
     and
       ``(ii) the percentage equal to the sum of the State 
     allotment factors for the fiscal year determined under 
     paragraph (4) with respect to the State.
       ``(B) Special rules beginning in fiscal year 2012.--
     Beginning in fiscal year 2012--
       ``(i) this paragraph shall be applied separately with 
     respect to each of the periods described in clauses (i) and 
     (ii) of paragraph (1)(D) and the available national allotment 
     for each such period shall be the amount appropriated for 
     such period (rather than the amount appropriated for the 
     entire fiscal year), reduced by the amount of the allotments 
     made for the fiscal year under subsection (c) for each such 
     period, and
       ``(ii) if--

       ``(I) the sum of the State allotments determined under 
     paragraph (1)(A)(iii) for either such period exceeds the 
     amount of such available national allotment for such period, 
     the Secretary shall make the allotment for each State for 
     such period in the same manner as under subparagraph (A), and
       ``(II) the amount of such available national allotment for 
     either such period exceeds the sum of the State allotments 
     determined under paragraph (1)(A)(iii) for such period, the 
     Secretary shall increase the allotment for each State for 
     such period by the amount that bears the same ratio to such 
     excess as the State's allotment determined under paragraph 
     (1)(A)(iii) for such period (without regard to this 
     subparagraph) bears to the sum of such allotments for all 
     States.

       ``(4) Weighted factors.--
       ``(A) Factors described.--For purposes of paragraph (3), 
     the factors described in this subparagraph are the following:
       ``(i) Projected state expenditures for the fiscal year.--
     The ratio of the projected expenditures under the State child 
     health plan for the fiscal year (as certified by the State to 
     the Secretary by not later than August 31 of the preceding 
     fiscal year) to the sum of the projected expenditures under 
     all such plans for all subsection (b) States for the fiscal 
     year, multiplied by the applicable percentage weight assigned 
     under subparagraph (B).
       ``(ii) Number of low-income children in the state.--The 
     ratio of the number of low-income children in the State, as 
     determined on the basis of the most timely and accurate 
     published estimates of the Bureau of the Census, to the sum 
     of the number of low-income children so determined for all 
     subsection (b) States for such fiscal year, multiplied by the 
     applicable percentage weight assigned under subparagraph (B).
       ``(iii) Projected state expenditures for the preceding 
     fiscal year.--The ratio of the projected expenditures under 
     the State child health plan for the preceding fiscal year (as 
     determined on the basis of the projections certified by the 
     State to the Secretary for November of the fiscal year), to 
     the sum of the projected expenditures under all such plans 
     for all subsection (b) States for such preceding fiscal year 
     (as so determined), multiplied by the applicable percentage 
     weight assigned under subparagraph (B).
       ``(iv) Actual state expenditures for the second preceding 
     fiscal year.--The ratio of the actual expenditures under the 
     State child health plan for the second preceding fiscal year, 
     as determined by the Secretary on the basis of expenditure 
     data reported by States on CMS Form 64 or CMS Form 21, to 
     such sum of the actual expenditures under all such plans for 
     all subsection (b) States for such second preceding fiscal 
     year, multiplied by the applicable percentage weight assigned 
     under subparagraph (B).
       ``(B) Assignment of weights.--For each of fiscal years 2009 
     through 2012, the applicable weights assigned under this 
     subparagraph are the following:
       ``(i) With respect to the factor described in subparagraph 
     (A)(i), a weight of 75 percent for each such fiscal year.

[[Page S10955]]

       ``(ii) With respect to the factor described in subparagraph 
     (A)(ii), a weight of 12\1/2\ percent for each such fiscal 
     year.
       ``(iii) With respect to the factor described in 
     subparagraph (A)(iii), a weight of 7\1/2\ percent for each 
     such fiscal year.
       ``(iv) With respect to the factor described in subparagraph 
     (A)(iv), a weight of 5 percent for each such fiscal year.
       ``(5) Demonstration of need for increased allotment based 
     on projected state expenditures exceeding 10 percent of the 
     preceding fiscal year allotment.--
       ``(A) In general.--If the projected expenditures under the 
     State child health plan described in paragraph (1)(B) for any 
     of fiscal years 2009 through 2012 are at least 10 percent 
     more than the allotment determined for the State for the 
     preceding fiscal year (determined without regard to paragraph 
     (2)(D) or paragraph (3)), and, during the preceding fiscal 
     year, the State did not receive approval for a State plan 
     amendment or waiver to expand coverage under the State child 
     health plan or did not receive a CHIP contingency fund 
     payment under subsection (k)--
       ``(i) the State shall submit to the Secretary, by not later 
     than August 31 of the preceding fiscal year, information 
     relating to the factors that contributed to the need for the 
     increase in the State's allotment for the fiscal year, as 
     well as any other additional information that the Secretary 
     may require for the State to demonstrate the need for the 
     increase in the State's allotment for the fiscal year;
       ``(ii) the Secretary shall--

       ``(I) review the information submitted under clause (i);
       ``(II) notify the State in writing within 60 days after 
     receipt of the information that--

       ``(aa) the projected expenditures under the State child 
     health plan are approved or disapproved (and if disapproved, 
     the reasons for disapproval); or
       ``(bb) specified additional information is needed; and

       ``(III) if the Secretary disapproved the projected 
     expenditures or determined additional information is needed, 
     provide the State with a reasonable opportunity to submit 
     additional information to demonstrate the need for the 
     increase in the State's allotment for the fiscal year.

       ``(B) Provisional and final allotment.--In the case of a 
     State described in subparagraph (A) for which the Secretary 
     has not determined by September 30 of a fiscal year whether 
     the State has demonstrated the need for the increase in the 
     State's allotment for the succeeding fiscal year, the 
     Secretary shall provide the State with a provisional 
     allotment for the fiscal year equal to 110 percent of the 
     allotment determined for the State under this subsection for 
     the preceding fiscal year (determined without regard to 
     paragraph (2)(D) or paragraph (3)), and may, not later than 
     November 30 of the fiscal year, adjust the State's allotment 
     (and the allotments of other subsection (b) States), as 
     necessary (and, if applicable, subject to paragraph (3)), on 
     the basis of information submitted by the State in accordance 
     with subparagraph (A).
       ``(6) Special rules.--
       ``(A) Deadline and data for determining fiscal year 2008 
     allotments.--In computing the amounts under paragraph (2)(A) 
     and subsection (c)(5)(A) that determine the allotments to 
     subsection (b) States and territories for fiscal year 2008, 
     the Secretary shall use the most recent data available to the 
     Secretary before the start of that fiscal year. The Secretary 
     may adjust such amounts and allotments, as necessary, on the 
     basis of the expenditure data for the prior year reported by 
     States on CMS Form 64 or CMS Form 21 not later than November 
     30, 2007, but in no case shall the Secretary adjust the 
     allotments provided under paragraph (2)(A) or subsection 
     (c)(5)(A) for fiscal year 2008 after December 31, 2007.
       ``(B) Inclusion of certain expenditures.--
       ``(i) Projected expenditures of qualifying states.--
     Payments made or projected to be made to a qualifying State 
     described in paragraph (2) of section 2105(g) for 
     expenditures described in paragraph (1)(B)(ii) or (4)(B) of 
     that section shall be included for purposes of determining 
     the projected expenditures described in paragraph (1)(B) with 
     respect to the allotments determined for each of fiscal years 
     2009 through 2012 and for purposes of determining the amounts 
     described in clauses (i) and (iv) of paragraph (2)(A) with 
     respect to the allotments determined for fiscal year 2008.
       ``(ii) Projected expenditures under block grant set-asides 
     for nonpregnant childless adults and parents.--Payments 
     projected to be made to a State under subsection (a) or (b) 
     of section 2111 shall be included for purposes of determining 
     the projected expenditures described in paragraph (1)(B) with 
     respect to the allotments determined for each of fiscal years 
     2009 through 2012 (to the extent such payments are permitted 
     under such section), including for purposes of allocating 
     such expenditures for purposes of clauses (i) and (ii) of 
     paragraph (1)(D).
       ``(7) Subsection (b) state.--In this subsection, the term 
     `subsection (b) State' means 1 of the 50 States or the 
     District of Columbia.''.
       (b) Conforming Amendments.--Section 2104 (42 U.S.C. 1397dd) 
     is amended--
       (1) in subsection (a), by striking ``subsection (d)'' and 
     inserting ``subsections (d), (h), and (i)'';
       (2) in subsection (b)(1), by striking ``subsection (d)'' 
     and inserting ``subsections (d), (h), and (i)''; and
       (3) in subsection (c)(1), by striking ``subsection (d)'' 
     and inserting ``subsections (d), (h), and (i)''.

     SEC. 103. ONE-TIME APPROPRIATION.

       There is appropriated to the Secretary, out of any money in 
     the Treasury not otherwise appropriated, $12,500,000,000 to 
     accompany the allotment made for the period beginning on 
     October 1, 2011, and ending on March 31, 2012, under section 
     2104(a)(15)(A) of the Social Security Act (42 U.S.C. 
     1397dd(a)(15)(A)) (as added by section 101), to remain 
     available until expended. Such amount shall be used to 
     provide allotments to States under subsections (c)(5) and (i) 
     of section 2104 of the Social Security Act (42 U.S.C. 1397dd) 
     for the first 6 months of fiscal year 2012 in the same manner 
     as allotments are provided under subsection (a)(15)(A) of 
     such section and subject to the same terms and conditions as 
     apply to the allotments provided from such subsection 
     (a)(15)(A).

     SEC. 104. IMPROVING FUNDING FOR THE TERRITORIES UNDER CHIP 
                   AND MEDICAID.

       (a) Update of CHIP Allotments.--Section 2104(c) (42 U.S.C. 
     1397dd(c)) is amended--
       (1) in paragraph (1), by inserting ``and paragraphs (5) and 
     (6)'' after ``and (i)''; and
       (2) by adding at the end the following new paragraphs:
       ``(5) Annual allotments for territories beginning with 
     fiscal year 2008.--Of the total allotment amount appropriated 
     under subsection (a) for a fiscal year beginning with fiscal 
     year 2008, the Secretary shall allot to each of the 
     commonwealths and territories described in paragraph (3) the 
     following:
       ``(A) Fiscal year 2008.--For fiscal year 2008, the highest 
     amount of Federal payments to the commonwealth or territory 
     under this title for any fiscal year occurring during the 
     period of fiscal years 1998 through 2007, multiplied by the 
     annual adjustment determined under subsection (i)(2)(B) for 
     fiscal year 2008, except that clause (ii) thereof shall be 
     applied by substituting `the United States' for `the State'.
       ``(B) Fiscal years 2009 through 2012.--
       ``(i) In general.--For each of fiscal years 2009 through 
     2012, except as provided in clause (ii), the amount 
     determined under this paragraph for the preceding fiscal year 
     multiplied by the annual adjustment determined under 
     subsection (i)(2)(B) for the fiscal year, except that clause 
     (ii) thereof shall be applied by substituting `the United 
     States' for `the State'.
       ``(ii) Special rule for fiscal year 2012.--In the case of 
     fiscal year 2012--

       ``(I) 89 percent of the amount allocated to the 
     commonwealth or territory for such fiscal year (without 
     regard to this subclause) shall be allocated for the period 
     beginning on October 1, 2011, and ending on March 31, 2012, 
     and
       ``(II) 11 percent of such amount shall be allocated for the 
     period beginning on April 1, 2012, and ending on September 
     30, 2012.''.

       (b) Removal of Federal Matching Payments for Data Reporting 
     Systems From the Overall Limit on Payments to Territories 
     Under Title XIX.--Section 1108(g) (42 U.S.C. 1308(g)) is 
     amended by adding at the end the following new paragraph:
       ``(4) Exclusion of certain expenditures from payment 
     limits.--With respect to fiscal years beginning with fiscal 
     year 2008, if Puerto Rico, the Virgin Islands, Guam, the 
     Northern Mariana Islands, or American Samoa qualify for a 
     payment under subparagraph (A)(i), (B), or (F) of section 
     1903(a)(3) for a calendar quarter of such fiscal year, the 
     payment shall not be taken into account in applying 
     subsection (f) (as increased in accordance with paragraphs 
     (1), (2), and (3) of this subsection) to such commonwealth or 
     territory for such fiscal year.''.
       (c) GAO Study and Report.--Not later than September 30, 
     2009, the Comptroller General of the United States shall 
     submit a report to the appropriate committees of Congress 
     regarding Federal funding under Medicaid and CHIP for Puerto 
     Rico, the United States Virgin Islands, Guam, American Samoa, 
     and the Northern Mariana Islands. The report shall include 
     the following:
       (1) An analysis of all relevant factors with respect to--
       (A) eligible Medicaid and CHIP populations in such 
     commonwealths and territories;
       (B) historical and projected spending needs of such 
     commonwealths and territories and the ability of capped 
     funding streams to respond to those spending needs;
       (C) the extent to which Federal poverty guidelines are used 
     by such commonwealths and territories to determine Medicaid 
     and CHIP eligibility; and
       (D) the extent to which such commonwealths and territories 
     participate in data collection and reporting related to 
     Medicaid and CHIP, including an analysis of territory 
     participation in the Current Population Survey versus the 
     American Community Survey.
       (2) Recommendations for improving Federal funding under 
     Medicaid and CHIP for such commonwealths and territories.

     SEC. 105. INCENTIVE BONUSES FOR STATES.

       (a) In General.--Section 2104 (42 U.S.C. 1397dd), as 
     amended by section 102, is amended by adding at the end the 
     following new subsection:
       ``(j) Incentive Bonuses.--
       ``(1) Establishment of incentive pool from unobligated 
     national allotment and unexpended state allotments.--
       ``(A) In general.--There is hereby established in the 
     Treasury of the United States a fund which shall be known as 
     the `CHIP Incentive Bonuses Pool' (in this subsection 
     referred to as the `Incentive Pool'). Amounts in the 
     Incentive Pool are authorized to be appropriated for payments 
     under this subsection and shall remain available until 
     expended.
       ``(B) Deposits through initial appropriation and transfers 
     of funds.--
       ``(i) Initial appropriation.--There is appropriated to the 
     Incentive Pool, out of any money in the Treasury not 
     otherwise appropriated, $3,000,000,000 for fiscal year 2008.
       ``(ii) Transfers.--Notwithstanding any other provision of 
     law, the following amounts are

[[Page S10956]]

     hereby appropriated or transferred to, deposited in, and made 
     available for expenditure from the Incentive Pool on the 
     following dates:

       ``(I) Unexpended fiscal year 2006 and 2007 allotments.--On 
     December 31, 2007, the sum for all States of the excess (if 
     any) for each State of--

       ``(aa) the aggregate allotments provided for the State 
     under subsection (b) or (c) for fiscal years 2006 and 2007 
     that are not expended by September 30, 2007, over
       ``(bb) an amount equal to 50 percent of the allotment 
     provided for the State under subsection (c) or (i) for fiscal 
     year 2008 (as determined in accordance with subsection 
     (i)(6)).

       ``(II) Unobligated national allotment.--

       ``(aa) Fiscal years 2008 through 2011.--On December 31 of 
     fiscal year 2008, and on December 31 of each succeeding 
     fiscal year through fiscal year 2011, the portion, if any, of 
     the amount appropriated under subsection (a) for such fiscal 
     year that is unobligated for allotment to a State under 
     subsection (c) or (i) for such fiscal year or set aside under 
     subsection (a)(3) or (b)(2) of section 2111 for such fiscal 
     year.
       ``(bb) First half of fiscal year 2012.--On December 31 of 
     fiscal year 2012, the portion, if any, of the sum of the 
     amounts appropriated under subsection (a)(15)(A) and under 
     section 103 of the Children's Health Insurance Program 
     Reauthorization Act of 2007 for the period beginning on 
     October 1, 2011, and ending on March 31, 2012, that is 
     unobligated for allotment to a State under subsection (c) or 
     (i) for such fiscal year or set aside under subsection (b)(2) 
     of section 2111 for such fiscal year.
       ``(cc) Second half of fiscal year 2012.--On June 30 of 
     fiscal year 2012, the portion, if any, of the amount 
     appropriated under subsection (a)(15)(B) for the period 
     beginning on April 1, 2012, and ending on September 30, 2012, 
     that is unobligated for allotment to a State under subsection 
     (c) or (i) for such fiscal year or set aside under subsection 
     (b)(2) of section 2111 for such fiscal year.

       ``(III) Percentage of state allotments that are unexpended 
     by the end of the first year of availability beginning with 
     the fiscal year 2009 allotments.--On October 1 of each of 
     fiscal years 2009 through 2012, the sum for all States for 
     such fiscal year (the `current fiscal year') of the excess 
     (if any) for each State of--

       ``(aa) the allotment made for the State under subsection 
     (b), (c), or (i) for the fiscal year preceding the current 
     fiscal year (reduced by any amounts set aside under section 
     2111(a)(3)) that is not expended by the end of such preceding 
     fiscal year, over
       ``(bb) an amount equal to the applicable percentage (for 
     the fiscal year) of the allotment made for the State under 
     subsection (b), (c), or (i) (as so reduced) for such 
     preceding fiscal year.

     For purposes of item (bb), the applicable percentage is 20 
     percent for fiscal year 2009, and 10 percent for each of 
     fiscal years 2010, 2011, and 2012.
       ``(IV) Remainder of state allotments that are unexpended by 
     the end of the period of availability beginning with the 
     fiscal year 2006 allotments.--On October 1 of each of fiscal 
     years 2009 through 2012, the total amount of allotments made 
     to States under subsection (b), (c), or (i) for the second 
     preceding fiscal year (third preceding fiscal year in the 
     case of the fiscal year 2006 allotments) and remaining after 
     the application of subclause (III) that are not expended by 
     September 30 of the preceding fiscal year.
       ``(V) Unexpended transitional coverage block grant for 
     nonpregnant childless adults.--On October 1, 2009, any 
     amounts set aside under section 2111(a)(3) that are not 
     expended by September 30, 2009.
       ``(VI)  Excess chip contingency funds.--

       ``(aa) Amounts in excess of the aggregate cap.--On October 
     1 of each of fiscal years 2010 through 2012, any amount in 
     excess of the aggregate cap applicable to the CHIP 
     Contingency Fund for the fiscal year under subsection 
     (k)(2)(B).
       ``(bb) Unexpended chip contingency fund payments.--On 
     October 1 of each of fiscal years 2010 through 2012, any 
     portion of a CHIP Contingency Fund payment made to a State 
     that remains unexpended at the end of the period for which 
     the payment is available for expenditure under subsection 
     (e)(3).

       ``(VII) Extension of availability for portion of unexpended 
     state allotments.--The portion of the allotment made to a 
     State for a fiscal year that is not transferred to the 
     Incentive Pool under subclause (I) or (III) shall remain 
     available for expenditure by the State only during the fiscal 
     year in which such transfer occurs, in accordance with 
     subclause (IV) and subsection (e)(4).

       ``(C) Investment of fund.--The Secretary of the Treasury 
     shall invest, in interest bearing securities of the United 
     States, such currently available portions of the Incentive 
     Pool as are not immediately required for payments from the 
     Pool. The income derived from these investments constitutes a 
     part of the Incentive Pool.
       ``(2) Payments to states increasing enrollment.--
       ``(A) In general.--Subject to paragraph (3)(D), with 
     respect to each of fiscal years 2009 through 2012, the 
     Secretary shall make payments to States from the Incentive 
     Pool determined under subparagraph (B).
       ``(B) Determination of payments.--If, for any coverage 
     period ending in a fiscal year ending after September 30, 
     2008, the average monthly enrollment of children in the State 
     plan under title XIX exceeds the baseline monthly average for 
     such period, the payment made for the fiscal year shall be 
     equal to the applicable amount determined under subparagraph 
     (C).
       ``(C) Applicable amount.--For purposes of subparagraph (B), 
     the applicable amount is the product determined in accordance 
     with the following:
       ``(i) If such excess with respect to the number of 
     individuals who are enrolled in the State plan under title 
     XIX does not exceed 2 percent, the product of $75 and the 
     number of such individuals included in such excess.
       ``(ii) If such excess with respect to the number of 
     individuals who are enrolled in the State plan under title 
     XIX exceeds 2, but does not exceed 5 percent, the product of 
     $300 and the number of such individuals included in such 
     excess, less the amount of such excess calculated in clause 
     (i).
       ``(iii) If such excess with respect to the number of 
     individuals who are enrolled in the State plan under title 
     XIX exceeds 5 percent, the product of $625 and the number of 
     such individuals included in such excess, less the sum of the 
     amount of such excess calculated in clauses (i) and (ii).
       ``(D) Indexing of dollar amounts.--For each coverage period 
     ending in a fiscal year ending after September 30, 2009, the 
     dollar amounts specified in subparagraph (C) shall be 
     increased by the percentage increase (if any) in the 
     projected nominal per capita amount of National Health 
     Expenditures for the calendar year beginning on January 1 of 
     the coverage period over the preceding coverage period, as 
     most recently published by the Secretary before the beginning 
     of the coverage period involved.
       ``(3) Rules relating to enrollment increases.--For purposes 
     of paragraph (2)(B)--
       ``(A) Baseline monthly average.--Except as provided in 
     subparagraph (C), the baseline monthly average for any fiscal 
     year for a State is equal to--
       ``(i) the baseline monthly average for the preceding fiscal 
     year; multiplied by
       ``(ii) the sum of 1 plus the sum of--

       ``(I) 0.01; and
       ``(II) the percentage increase in the population of low-
     income children in the State from the preceding fiscal year 
     to the fiscal year involved, as determined by the Secretary 
     based on the most timely and accurate published estimates of 
     the Bureau of the Census before the beginning of the fiscal 
     year involved.

       ``(B) Coverage period.--Except as provided in subparagraph 
     (C), the coverage period for any fiscal year consists of the 
     last 2 quarters of the preceding fiscal year and the first 2 
     quarters of the fiscal year.
       ``(C) Special rules for fiscal year 2009.--With respect to 
     fiscal year 2009--
       ``(i) the coverage period for that fiscal year shall be 
     based on the first 2 quarters of fiscal year 2009; and
       ``(ii) the baseline monthly average shall be--

       ``(I) the average monthly enrollment of low-income children 
     enrolled in the State's plan under title XIX for the first 2 
     quarters of fiscal year 2007 (as determined over a 6-month 
     period on the basis of the most recent information reported 
     through the Medicaid Statistical Information System (MSIS)); 
     multiplied by
       ``(II) the sum of 1 plus the sum of--

       ``(aa) 0.02; and
       ``(bb) the percentage increase in the population of low-
     income children in the State from fiscal year 2007 to fiscal 
     year 2009, as determined by the Secretary based on the most 
     timely and accurate published estimates of the Bureau of the 
     Census before the beginning of the fiscal year involved.
       ``(D) Additional requirement for eligibility for payment.--
     For purposes of subparagraphs (B) and (C), the average 
     monthly enrollment shall be determined without regard to 
     children who do not meet the income eligibility criteria in 
     effect on July 19, 2007, for enrollment under the State plan 
     under title XIX or under a waiver of such plan.
       ``(4) Time of payment.--Payments under paragraph (2) for 
     any fiscal year shall be made during the last quarter of such 
     year.
       ``(5) Use of payments.--Payments made to a State from the 
     Incentive Pool shall be used for any purpose that the State 
     determines is likely to reduce the percentage of low-income 
     children in the State without health insurance.
       ``(6) Proration rule.--If the amount available for payment 
     from the Incentive Pool is less than the total amount of 
     payments to be made for such fiscal year, the Secretary shall 
     reduce the payments described in paragraph (2) on a 
     proportional basis.
       ``(7) References.--With respect to a State plan under title 
     XIX, any references to a child in this subsection shall 
     include a reference to any individual provided medical 
     assistance under the plan who has not attained age 19 (or, if 
     a State has so elected under such State plan, age 20 or 
     21).''.
       (b) Redistribution of Unexpended Fiscal Year 2005 
     Allotments.--Notwithstanding section 2104(f) of the Social 
     Security Act (42 U.S.C. 1397dd(f)), with respect to fiscal 
     year 2008, the Secretary shall provide for a redistribution 
     under such section from the allotments for fiscal year 2005 
     under subsection (b) and (c) of such section that are not 
     expended by the end of fiscal year 2007, to each State 
     described in clause (iii) of section 2104(i)(2)(A) of the 
     Social Security Act, as added by section 102(a), of an amount 
     that bears the same ratio to such unexpended fiscal year 2005 
     allotments as the ratio of the fiscal year 2007 allotment 
     determined for each such State under subsection (b) of 
     section 2104 of such Act for fiscal year 2007 (without regard 
     to any amounts paid, allotted, or redistributed to the State 
     under section 2104 for any preceding fiscal year) bears to 
     the total amount of the fiscal year 2007 allotments for all 
     such States (as so determined).
       (c) Conforming Amendment Eliminating Rules for 
     Redistribution of Unexpended Allotments for Fiscal Years 
     After 2005.--Effective January 1, 2008, section 2104(f) (42 
     U.S.C. 1397dd(f)) is amended to read as follows:

[[Page S10957]]

       ``(f) Unallocated Portion of National Allotment and Unused 
     Allotments.--For provisions relating to the distribution of 
     portions of the unallocated national allotment under 
     subsection (a) for fiscal years beginning with fiscal year 
     2008, and unexpended allotments for fiscal years beginning 
     with fiscal year 2006, see subsection (j).''.
       (d) Additional Funding for the Secretary To Improve 
     Timeliness of Data Reporting and Analysis for Purposes of 
     Determining Enrollment Increases Under Medicaid and CHIP.--
       (1) Appropriation.--There is appropriated, out of any money 
     in the Treasury not otherwise appropriated, $5,000,000 to the 
     Secretary for fiscal year 2008 for the purpose of improving 
     the timeliness of the data reported and analyzed from the 
     Medicaid Statistical Information System (MSIS) for purposes 
     of carrying out section 2104(j)(2)(B) of the Social Security 
     Act (as added by subsection (a)) and to provide guidance to 
     States with respect to any new reporting requirements related 
     to such improvements. Amounts appropriated under this 
     paragraph shall remain available until expended.
       (2) Requirements.--The improvements made by the Secretary 
     under paragraph (1) shall be designed and implemented 
     (including with respect to any necessary guidance for States) 
     so that, beginning no later than October 1, 2008, data 
     regarding the enrollment of low-income children (as defined 
     in section 2110(c)(4) of the Social Security Act (42 U.S.C. 
     1397jj(c)(4)) of a State enrolled in the State plan under 
     Medicaid or the State child health plan under CHIP with 
     respect to a fiscal year shall be collected and analyzed by 
     the Secretary within 6 months of submission.

     SEC. 106. PHASE-OUT OF COVERAGE FOR NONPREGNANT CHILDLESS 
                   ADULTS UNDER CHIP; CONDITIONS FOR COVERAGE OF 
                   PARENTS.

       (a) Phase-Out Rules.--
       (1) In general.--Title XXI (42 U.S.C. 1397aa et seq.) is 
     amended by adding at the end the following new section:

     ``SEC. 2111. PHASE-OUT OF COVERAGE FOR NONPREGNANT CHILDLESS 
                   ADULTS; CONDITIONS FOR COVERAGE OF PARENTS.

       ``(a) Termination of Coverage for Nonpregnant Childless 
     Adults.--
       ``(1) No new chip waivers; automatic extensions at state 
     option through fiscal year 2008.--Notwithstanding section 
     1115 or any other provision of this title, except as provided 
     in this subsection--
       ``(A) the Secretary shall not on or after the date of the 
     enactment of the Children's Health Insurance Program 
     Reauthorization Act of 2007, approve or renew a waiver, 
     experimental, pilot, or demonstration project that would 
     allow funds made available under this title to be used to 
     provide child health assistance or other health benefits 
     coverage to a nonpregnant childless adult; and
       ``(B) notwithstanding the terms and conditions of an 
     applicable existing waiver, the provisions of paragraphs (2) 
     and (3) shall apply for purposes of any fiscal year beginning 
     on or after October 1, 2008, in determining the period to 
     which the waiver applies, the individuals eligible to be 
     covered by the waiver, and the amount of the Federal payment 
     under this title.
       ``(2) Termination of chip coverage under applicable 
     existing waivers at the end of fiscal year 2008.--
       ``(A) In general.--No funds shall be available under this 
     title for child health assistance or other health benefits 
     coverage that is provided to a nonpregnant childless adult 
     under an applicable existing waiver after September 30, 2008.
       ``(B) Extension upon state request.--If an applicable 
     existing waiver described in subparagraph (A) would otherwise 
     expire before October 1, 2008, and the State requests an 
     extension of such waiver, the Secretary shall grant such an 
     extension, but only through September 30, 2008.
       ``(C) Application of enhanced fmap.--The enhanced FMAP 
     determined under section 2105(b) shall apply to expenditures 
     under an applicable existing waiver for the provision of 
     child health assistance or other health benefits coverage to 
     a nonpregnant childless adult during fiscal year 2008.
       ``(3) Optional 1-year transitional coverage block grant 
     funded from state allotment.--Subject to paragraph (4)(B), 
     each State for which coverage under an applicable existing 
     waiver is terminated under paragraph (2)(A) may elect to 
     provide nonpregnant childless adults who were provided child 
     health assistance or health benefits coverage under the 
     applicable existing waiver at any time during fiscal year 
     2008 with such assistance or coverage during fiscal year 
     2009, as if the authority to provide such assistance or 
     coverage under an applicable existing waiver was extended 
     through that fiscal year, but subject to the following terms 
     and conditions:
       ``(A) Block grant set aside from state allotment.--The 
     Secretary shall set aside for the State an amount equal to 
     the Federal share of the State's projected expenditures under 
     the applicable existing waiver for providing child health 
     assistance or health benefits coverage to all nonpregnant 
     childless adults under such waiver for fiscal year 2008 (as 
     certified by the State and submitted to the Secretary by not 
     later than August 31, 2008, and without regard to whether any 
     such individual lost coverage during fiscal year 2008 and was 
     later provided child health assistance or other health 
     benefits coverage under the waiver in that fiscal year), 
     increased by the annual adjustment for fiscal year 2009 
     determined under section 2104(i)(2)(B)(i). The Secretary may 
     adjust the amount set aside under the preceding sentence, as 
     necessary, on the basis of the expenditure data for fiscal 
     year 2008 reported by States on CMS Form 64 or CMS Form 21 
     not later than November 30, 2008, but in no case shall the 
     Secretary adjust such amount after December 31, 2008.
       ``(B) No coverage for nonpregnant childless adults who were 
     not covered during fiscal year 2008.--
       ``(i) FMAP applied to expenditures.--The Secretary shall 
     pay the State for each quarter of fiscal year 2009, from the 
     amount set aside under subparagraph (A), an amount equal to 
     the Federal medical assistance percentage (as determined 
     under section 1905(b) without regard to clause (4) of such 
     section) of expenditures in the quarter for providing child 
     health assistance or other health benefits coverage to a 
     nonpregnant childless adult but only if such adult was 
     enrolled in the State program under this title during fiscal 
     year 2008 (without regard to whether the individual lost 
     coverage during fiscal year 2008 and was reenrolled in that 
     fiscal year or in fiscal year 2009).
       ``(ii) Federal payments limited to amount of block grant 
     set-aside.--No payments shall be made to a State for 
     expenditures described in this subparagraph after the total 
     amount set aside under subparagraph (A) for fiscal year 2009 
     has been paid to the State.
       ``(4) State option to apply for medicaid waiver to continue 
     coverage for nonpregnant childless adults.--
       ``(A) In general.--Each State for which coverage under an 
     applicable existing waiver is terminated under paragraph 
     (2)(A) may submit, not later than June 30, 2009, an 
     application to the Secretary for a waiver under section 1115 
     of the State plan under title XIX to provide medical 
     assistance to a nonpregnant childless adult whose coverage is 
     so terminated (in this subsection referred to as a `Medicaid 
     nonpregnant childless adults waiver').
       ``(B) Deadline for approval.--The Secretary shall make a 
     decision to approve or deny an application for a Medicaid 
     nonpregnant childless adults waiver submitted under 
     subparagraph (A) within 90 days of the date of the submission 
     of the application. If no decision has been made by the 
     Secretary as of September 30, 2009, on the application of a 
     State for a Medicaid nonpregnant childless adults waiver that 
     was submitted to the Secretary by June 30, 2009, the 
     application shall be deemed approved.
       ``(C) Standard for budget neutrality.--The budget 
     neutrality requirement applicable with respect to 
     expenditures for medical assistance under a Medicaid 
     nonpregnant childless adults waiver shall--
       ``(i) in the case of fiscal year 2010, allow expenditures 
     for medical assistance under title XIX for all such adults to 
     not exceed the total amount of payments made to the State 
     under paragraph (3)(B) for fiscal year 2009, increased by the 
     percentage increase (if any) in the projected nominal per 
     capita amount of National Health Expenditures for calendar 
     year 2010 over calendar year 2009, as most recently published 
     by the Secretary; and
       ``(ii) in the case of any succeeding fiscal year, allow 
     such expenditures to not exceed the amount in effect under 
     this subparagraph for the preceding fiscal year, increased by 
     the percentage increase (if any) in the projected nominal per 
     capita amount of National Health Expenditures for the 
     calendar year that begins during the fiscal year involved 
     over the preceding calendar year, as most recently published 
     by the Secretary.
       ``(b) Rules and Conditions for Coverage of Parents of 
     Targeted Low-Income Children.--
       ``(1) Two-year transition period; automatic extension at 
     state option through fiscal year 2009.--
       ``(A) No new chip waivers.--Notwithstanding section 1115 or 
     any other provision of this title, except as provided in this 
     subsection--
       ``(i) the Secretary shall not on or after the date of the 
     enactment of the Children's Health Insurance Program 
     Reauthorization Act of 2007 approve or renew a waiver, 
     experimental, pilot, or demonstration project that would 
     allow funds made available under this title to be used to 
     provide child health assistance or other health benefits 
     coverage to a parent of a targeted low-income child; and
       ``(ii) notwithstanding the terms and conditions of an 
     applicable existing waiver, the provisions of paragraphs (2) 
     and (3) shall apply for purposes of any fiscal year beginning 
     on or after October 1, 2009, in determining the period to 
     which the waiver applies, the individuals eligible to be 
     covered by the waiver, and the amount of the Federal payment 
     under this title.
       ``(B) Extension upon state request.--If an applicable 
     existing waiver described in subparagraph (A) would otherwise 
     expire before October 1, 2009, and the State requests an 
     extension of such waiver, the Secretary shall grant such an 
     extension, but only, subject to paragraph (2)(A), through 
     September 30, 2009.
       ``(C) Application of enhanced fmap.--The enhanced FMAP 
     determined under section 2105(b) shall apply to expenditures 
     under an applicable existing waiver for the provision of 
     child health assistance or other health benefits coverage to 
     a parent of a targeted low-income child during fiscal years 
     2008 and 2009.
       ``(2) Rules for fiscal years 2010 through 2012.--
       ``(A) Payments for coverage limited to block grant funded 
     from state allotment.--Any State that provides child health 
     assistance or health benefits coverage under an applicable 
     existing waiver for a parent of a targeted low-income child 
     may elect to continue to provide such assistance or coverage 
     through fiscal year 2010, 2011, or 2012, subject to the same 
     terms and conditions that applied under the applicable 
     existing waiver, unless otherwise modified in subparagraph 
     (B).
       ``(B) Terms and conditions.--
       ``(i) Block grant set aside from state allotment.--If the 
     State makes an election under subparagraph (A), the Secretary 
     shall set aside

[[Page S10958]]

     for the State for each such fiscal year an amount equal to 
     the Federal share of 110 percent of the State's projected 
     expenditures under the applicable existing waiver for 
     providing child health assistance or health benefits coverage 
     to all parents of targeted low-income children enrolled under 
     such waiver for the fiscal year (as certified by the State 
     and submitted to the Secretary by not later than August 31 of 
     the preceding fiscal year). In the case of fiscal year 2012, 
     the set aside for any State shall be computed separately for 
     each period described in clauses (i) and (ii) of subsection 
     (i))(1)(D) and any increase or reduction in the allotment for 
     either such period under subsection (i)(3)(B)(ii) shall be 
     allocated on a pro rata basis to such set aside.
       ``(ii) Payments from block grant.--The Secretary shall pay 
     the State from the amount set aside under clause (i) for the 
     fiscal year, an amount for each quarter of such fiscal year 
     equal to the applicable percentage determined under clause 
     (iii) or (iv) for expenditures in the quarter for providing 
     child health assistance or other health benefits coverage to 
     a parent of a targeted low-income child.
       ``(iii) Enhanced fmap only in fiscal year 2010 for states 
     with significant child outreach or that achieve child 
     coverage benchmarks; fmap for any other states.--For purposes 
     of clause (ii), the applicable percentage for any quarter of 
     fiscal year 2010 is equal to--

       ``(I) the enhanced FMAP determined under section 2105(b) in 
     the case of a State that meets the outreach or coverage 
     benchmarks described in any of subparagraphs (A), (B), or (C) 
     of paragraph (3) for fiscal year 2009; or
       ``(II) the Federal medical assistance percentage (as 
     determined under section 1905(b) without regard to clause (4) 
     of such section) in the case of any other State.

       ``(iv) Amount of federal matching payment in 2011 or 
     2012.--For purposes of clause (ii), the applicable percentage 
     for any quarter of fiscal year 2011 or 2012 is equal to--

       ``(I) the REMAP percentage if--

       ``(aa) the applicable percentage for the State under clause 
     (iii) was the enhanced FMAP for fiscal year 2009; and
       ``(bb) the State met either of the coverage benchmarks 
     described in subparagraph (B) or (C) of paragraph (3) for the 
     preceding fiscal year; or

       ``(II) the Federal medical assistance percentage (as so 
     determined) in the case of any State to which subclause (I) 
     does not apply.

     For purposes of subclause (I), the REMAP percentage is the 
     percentage which is the sum of such Federal medical 
     assistance percentage and a number of percentage points equal 
     to one-half of the difference between such Federal medical 
     assistance percentage and such enhanced FMAP.
       ``(v) No federal payments other than from block grant set 
     aside.--No payments shall be made to a State for expenditures 
     described in clause (ii) after the total amount set aside 
     under clause (i) for a fiscal year has been paid to the 
     State.
       ``(vi) No increase in income eligibility level for 
     parents.--No payments shall be made to a State from the 
     amount set aside under clause (i) for a fiscal year for 
     expenditures for providing child health assistance or health 
     benefits coverage to a parent of a targeted low-income child 
     whose family income exceeds the income eligibility level 
     applied under the applicable existing waiver to parents of 
     targeted low-income children on the date of enactment of the 
     Children's Health Insurance Program Reauthorization Act of 
     2007.
       ``(3) Outreach or coverage benchmarks.--For purposes of 
     paragraph (2), the outreach or coverage benchmarks described 
     in this paragraph are as follows:
       ``(A) Significant child outreach campaign.--The State--
       ``(i) was awarded a grant under section 2113 for fiscal 
     year 2009;
       ``(ii) implemented 1 or more of the process measures 
     described in section 2104(j)(3)(A)(i) for such fiscal year; 
     or
       ``(iii) has submitted a specific plan for outreach for such 
     fiscal year.
       ``(B) High-performing state.--The State, on the basis of 
     the most timely and accurate published estimates of the 
     Bureau of the Census, ranks in the lowest \1/3\ of States in 
     terms of the State's percentage of low-income children 
     without health insurance.
       ``(C) State increasing enrollment of low-income children.--
     The State qualified for a payment from the Incentive Fund 
     under clause (ii) or (iii) of paragraph (2)(C) of section 
     2104(j) for the most recent coverage period applicable under 
     such section.
       ``(4) Rules of construction.--Nothing in this subsection 
     shall be construed as prohibiting a State from submitting an 
     application to the Secretary for a waiver under section 1115 
     of the State plan under title XIX to provide medical 
     assistance to a parent of a targeted low-income child that 
     was provided child health assistance or health benefits 
     coverage under an applicable existing waiver.
       ``(c) Applicable Existing Waiver.--For purposes of this 
     section--
       ``(1) In general.--The term `applicable existing waiver' 
     means a waiver, experimental, pilot, or demonstration project 
     under section 1115, grandfathered under section 6102(c)(3) of 
     the Deficit Reduction Act of 2005, or otherwise conducted 
     under authority that--
       ``(A) would allow funds made available under this title to 
     be used to provide child health assistance or other health 
     benefits coverage to--
       ``(i) a parent of a targeted low-income child;
       ``(ii) a nonpregnant childless adult; or
       ``(iii) individuals described in both clauses (i) and (ii); 
     and
       ``(B) was in effect during fiscal year 2007.
       ``(2) Definitions.--
       ``(A) Parent.--The term `parent' includes a caretaker 
     relative (as such term is used in carrying out section 1931) 
     and a legal guardian.
       ``(B) Nonpregnant childless adult.--The term `nonpregnant 
     childless adult' has the meaning given such term by section 
     2107(f).''.
       (2) Conforming amendments.--
       (A) Section 2107(f) (42 U.S.C. 1397gg(f)) is amended--
       (i) by striking ``, the Secretary'' and inserting ``:
       ``(1) The Secretary'';
       (ii) in the first sentence, by inserting ``or a parent (as 
     defined in section 2111(c)(2)(A)), who is not pregnant, of a 
     targeted low-income child'' before the period;
       (iii) by striking the second sentence; and
       (iv) by adding at the end the following new paragraph:
       ``(2) The Secretary may not approve, extend, renew, or 
     amend a waiver, experimental, pilot, or demonstration project 
     with respect to a State after the date of enactment of the 
     Children's Health Insurance Program Reauthorization Act of 
     2007 that would waive or modify the requirements of section 
     2111.''.
       (B) Section 6102(c) of the Deficit Reduction Act of 2005 
     (Public Law 109-171; 120 Stat. 131) is amended by striking 
     ``Nothing'' and inserting ``Subject to section 2111 of the 
     Social Security Act, as added by section 106(a)(1) of the 
     Children's Health Insurance Program Reauthorization Act of 
     2007, nothing''.
       (b) GAO Study and Report.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study of whether--
       (A) the coverage of a parent, a caretaker relative (as such 
     term is used in carrying out section 1931), or a legal 
     guardian of a targeted low-income child under a State health 
     plan under title XXI of the Social Security Act increases the 
     enrollment of, or the quality of care for, children, and
       (B) such parents, relatives, and legal guardians who enroll 
     in such a plan are more likely to enroll their children in 
     such a plan or in a State plan under title XIX of such Act.
       (2) Report.--Not later than 2 years after the date of the 
     enactment of this Act, the Comptroller General shall report 
     the results of the study to the appropriate committees of 
     Congress, including recommendations (if any) for changes in 
     legislation.

     SEC. 107. STATE OPTION TO COVER LOW-INCOME PREGNANT WOMEN 
                   UNDER CHIP THROUGH A STATE PLAN AMENDMENT.

       (a) In General.--Title XXI (42 U.S.C. 1397aa et seq.), as 
     amended by section 106(a), is amended by adding at the end 
     the following new section:

     ``SEC. 2112. OPTIONAL COVERAGE OF TARGETED LOW-INCOME 
                   PREGNANT WOMEN THROUGH A STATE PLAN AMENDMENT.

       ``(a) In General.--Subject to the succeeding provisions of 
     this section, a State may elect through an amendment to its 
     State child health plan under section 2102 to provide 
     pregnancy-related assistance under such plan for targeted 
     low-income pregnant women.
       ``(b) Conditions.--A State may only elect the option under 
     subsection (a) if the following conditions are satisfied:
       ``(1) Medicaid income eligibility level for pregnant women 
     of at least 185 percent of poverty.--The State has 
     established an income eligibility level for pregnant women 
     under subsection (a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), or 
     (l)(1)(A) of section 1902 that is at least 185 percent of the 
     income official poverty line.
       ``(2) No chip income eligibility level for pregnant women 
     lower than the state's medicaid level.--The State does not 
     apply an effective income level for pregnant women under the 
     State plan amendment that is lower than the effective income 
     level (expressed as a percent of the poverty line and 
     considering applicable income disregards) specified under 
     subsection (a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), or 
     (l)(1)(A) of section 1902, on the date of enactment of this 
     paragraph to be eligible for medical assistance as a pregnant 
     woman.
       ``(3) No coverage for higher income pregnant women without 
     covering lower income pregnant women.--The State does not 
     provide coverage for pregnant women with higher family income 
     without covering pregnant women with a lower family income.
       ``(4) Application of requirements for coverage of targeted 
     low-income children.--The State provides pregnancy-related 
     assistance for targeted low-income pregnant women in the same 
     manner, and subject to the same requirements, as the State 
     provides child health assistance for targeted low-income 
     children under the State child health plan, and in addition 
     to providing child health assistance for such women.
       ``(5) No preexisting condition exclusion or waiting 
     period.--The State does not apply any exclusion of benefits 
     for pregnancy-related assistance based on any preexisting 
     condition or any waiting period (including any waiting period 
     imposed to carry out section 2102(b)(3)(C)) for receipt of 
     such assistance.
       ``(6) Application of cost-sharing protection.--The State 
     provides pregnancy-related assistance to a targeted low-
     income woman consistent with the cost-sharing protections 
     under section 2103(e) and applies the limitation on total 
     annual aggregate cost sharing imposed under paragraph (3)(B) 
     of such section to the family of such a woman.
       ``(c) Option To Provide Presumptive Eligibility.--A State 
     that elects the option under subsection (a) and satisfies the 
     conditions described in subsection (b) may elect to apply 
     section 1920 (relating to presumptive eligibility for 
     pregnant women) to the State child health plan in the same 
     manner as such section applies to the State plan under title 
     XIX.

[[Page S10959]]

       ``(d) Definitions.--For purposes of this section:
       ``(1) Pregnancy-related assistance.--The term `pregnancy-
     related assistance' has the meaning given the term `child 
     health assistance' in section 2110(a) and includes any 
     medical assistance that the State would provide for a 
     pregnant woman under the State plan under title XIX during 
     pregnancy and the period described in paragraph (2)(A).
       ``(2) Targeted low-income pregnant woman.--The term 
     `targeted low-income pregnant woman' means a woman--
       ``(A) during pregnancy and through the end of the month in 
     which the 60-day period (beginning on the last day of her 
     pregnancy) ends;
       ``(B) whose family income does not exceed the income 
     eligibility level established under the State child health 
     plan under this title for a targeted low-income child; and
       ``(C) who satisfies the requirements of paragraphs (1)(A), 
     (1)(C), (2), and (3) of section 2110(b) in the same manner as 
     a child applying for child health assistance would have to 
     satisfy such requirements.
       ``(e) Automatic Enrollment for Children Born to Women 
     Receiving Pregnancy-Related Assistance.--If a child is born 
     to a targeted low-income pregnant woman who was receiving 
     pregnancy-related assistance under this section on the date 
     of the child's birth, the child shall be deemed to have 
     applied for child health assistance under the State child 
     health plan and to have been found eligible for such 
     assistance under such plan or to have applied for medical 
     assistance under title XIX and to have been found eligible 
     for such assistance under such title, as appropriate, on the 
     date of such birth and to remain eligible for such assistance 
     until the child attains 1 year of age. During the period in 
     which a child is deemed under the preceding sentence to be 
     eligible for child health or medical assistance, the child 
     health or medical assistance eligibility identification 
     number of the mother shall also serve as the identification 
     number of the child, and all claims shall be submitted and 
     paid under such number (unless the State issues a separate 
     identification number for the child before such period 
     expires).
       ``(f) States Providing Assistance Through Other Options.--
       ``(1) Continuation of other options for providing 
     assistance.--The option to provide assistance in accordance 
     with the preceding subsections of this section shall not 
     limit any other option for a State to provide--
       ``(A) child health assistance through the application of 
     sections 457.10, 457.350(b)(2), 457.622(c)(5), and 
     457.626(a)(3) of title 42, Code of Federal Regulations (as in 
     effect after the final rule adopted by the Secretary and set 
     forth at 67 Fed. Reg. 61956-61974 (October 2, 2002)), or
       ``(B) pregnancy-related services through the application of 
     any waiver authority (as in effect on June 1, 2007).
       ``(2) Clarification of authority to provide postpartum 
     services.--Any State that provides child health assistance 
     under any authority described in paragraph (1) may continue 
     to provide such assistance, as well as postpartum services, 
     through the end of the month in which the 60-day period 
     (beginning on the last day of the pregnancy) ends, in the 
     same manner as such assistance and postpartum services would 
     be provided if provided under the State plan under title XIX, 
     but only if the mother would otherwise satisfy the 
     eligibility requirements that apply under the State child 
     health plan (other than with respect to age) during such 
     period.
       ``(3) No inference.--Nothing in this subsection shall be 
     construed--
       ``(A) to infer congressional intent regarding the legality 
     or illegality of the content of the sections specified in 
     paragraph (1)(A); or
       ``(B) to modify the authority to provide pregnancy-related 
     services under a waiver specified in paragraph (1)(B).''.
       (b) Additional Conforming Amendments.--
       (1) No cost sharing for pregnancy-related benefits.--
     Section 2103(e)(2) (42 U.S.C. 1397cc(e)(2)) is amended--
       (A) in the heading, by inserting ``or pregnancy-related 
     assistance'' after ``preventive services''; and
       (B) by inserting before the period at the end the 
     following: ``or for pregnancy-related assistance''.
       (2) No waiting period.--Section 2102(b)(1)(B) (42 U.S.C. 
     1397bb(b)(1)(B)) is amended--
       (A) in clause (i), by striking ``, and'' at the end and 
     inserting a semicolon;
       (B) in clause (ii), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following new clause:
       ``(iii) may not apply a waiting period (including a waiting 
     period to carry out paragraph (3)(C)) in the case of a 
     targeted low-income pregnant woman provided pregnancy-related 
     assistance under section 2112.''.

     SEC. 108. CHIP CONTINGENCY FUND.

       Section 2104 (42 U.S.C. 1397dd), as amended by section 105, 
     is amended by adding at the end the following new subsection:
       ``(k) CHIP Contingency Fund.--
       ``(1) Establishment.--There is hereby established in the 
     Treasury of the United States a fund which shall be known as 
     the `CHIP Contingency Fund' (in this subsection referred to 
     as the `Fund'). Amounts in the Fund are authorized to be 
     appropriated for payments under this subsection.
       ``(2) Deposits into fund.--
       ``(A) Initial and subsequent appropriations.--Subject to 
     subparagraphs (B) and (E), out of any money in the Treasury 
     of the United States not otherwise appropriated, there are 
     appropriated to the Fund--
       ``(i) for fiscal year 2009, an amount equal to 12.5 percent 
     of the available national allotment under subsection 
     (i)(1)(C) for the fiscal year; and
       ``(ii) for each of fiscal years 2010 through 2012, such 
     sums as are necessary for making payments to eligible States 
     for such fiscal year, but not in excess of the aggregate cap 
     described in subparagraph (B).
       ``(B) Aggregate cap.--Subject to subparagraph (E), the 
     total amount available for payment from the Fund for each of 
     fiscal years 2009 through 2012 (taking into account deposits 
     made under subparagraph (C)), shall not exceed 12.5 percent 
     of the available national allotment under subsection 
     (i)(1)(C) for the fiscal year.
       ``(C) Investment of fund.--The Secretary of the Treasury 
     shall invest, in interest bearing securities of the United 
     States, such currently available portions of the Fund as are 
     not immediately required for payments from the Fund. The 
     income derived from these investments constitutes a part of 
     the Fund.
       ``(D) Transfer of excess funds to the incentive fund.--The 
     Secretary of the Treasury shall transfer to, and deposit in, 
     the CHIP Incentive Bonuses Pool established under subsection 
     (j) any amounts in excess of the aggregate cap described in 
     subparagraph (B) for a fiscal year.
       ``(E) Special rules for amounts set aside for parents and 
     childless adults.--For purposes of subparagraphs (A) and 
     (B)--
       ``(i) the available national allotment under subsection 
     (i)(1)(C) shall be reduced by any amount set aside under 
     section 2111(a)(3) for block grant payments for transitional 
     coverage for childless adults; and
       ``(ii) the Secretary shall establish a separate account in 
     the Fund for the portion of any amount appropriated to the 
     Fund for any fiscal year which is allocable to the portion of 
     the available national allotment under subsection (i)(1)(C) 
     which is set aside for the fiscal year under section 
     2111(b)(2)(B)(i) for coverage of parents of low-income 
     children.

     The Secretary shall include in the account established under 
     clause (ii) any income derived under subparagraph (C) which 
     is allocable to amounts in such account.
       ``(3) CHIP contingency fund payments.--
       ``(A) Payments.--
       ``(i) In general.--Subject to clauses (ii) and (iii) and 
     the succeeding subparagraphs of this paragraph, the Secretary 
     shall pay from the Fund to a State that is an eligible State 
     for a month of a fiscal year a CHIP contingency fund payment 
     equal to the Federal share of the shortfall determined under 
     subparagraph (D). In the case of an eligible State under 
     subparagraph (D)(i), the Secretary shall not make the payment 
     under this subparagraph until the State makes, and submits to 
     the Secretary, a projection of the amount of the shortfall.
       ``(ii) Separate determinations of shortfalls.--The 
     Secretary shall separately compute the shortfall under 
     subparagraph (D) for expenditures for eligible individuals 
     other than nonpregnant childless adults and parents with 
     respect to whom amounts are set aside under section 2111, for 
     expenditures for such childless adults, and for expenditures 
     for such parents.
       ``(iii) Payments.--

       ``(I) Nonpregnant childless adults.--No payments shall be 
     made from the Fund for nonpregnant childless adults with 
     respect to whom amounts are set aside under section 
     2111(a)(3).
       ``(II) Parents.--Any payments with respect to any shortfall 
     for parents who are paid from amounts set aside under section 
     2111(b)(2)(B)(i) shall be made only from the account 
     established under paragraph (2)(E)(ii) and not from any other 
     amounts in the Fund. No other payments may be made from such 
     account.

       ``(iv) Special rules.--Subparagraphs (B) and (C) shall be 
     applied separately with respect to shortfalls described in 
     clause (ii).
       ``(B) Use of funds.--Amounts paid to an eligible State from 
     the Fund shall be used only to eliminate the Federal share of 
     a shortfall in the State's allotment under subsection (i) for 
     a fiscal year.
       ``(C) Proration rule.--If the amounts available for payment 
     from the Fund for a fiscal year are less than the total 
     amount of payments determined under subparagraph (A) for the 
     fiscal year, the amount to be paid under such subparagraph to 
     each eligible State shall be reduced proportionally.
       ``(D) Eligible state.--
       ``(i) In general.--A State is an eligible State for a month 
     if the State is a subsection (b) State (as defined in 
     subsection (i)(7)), the State requests access to the Fund for 
     the month, and it is described in clause (ii) or (iii).
       ``(ii) Shortfall of federal allotment funding of not more 
     than 5 percent.--The Secretary estimates, on the basis of the 
     most recent data available to the Secretary or requested from 
     the State by the Secretary, that the State's allotment for 
     the fiscal year is at least 95 percent, but less than 100 
     percent, of the projected expenditures under the State child 
     health plan for the State for the fiscal year determined 
     under subsection (i) (without regard to incentive bonuses or 
     payments for which the State is eligible for under subsection 
     (j)(2) for the fiscal year).
       ``(iii) Shortfall of federal allotment funding of more than 
     5 percent caused by specific events.--The Secretary 
     estimates, on the basis of the most recent data available to 
     the Secretary or requested from the State by the Secretary, 
     that the State's allotment for the fiscal year is less than 
     95 percent of the projected expenditures under the State 
     child health plan for the State for the fiscal year 
     determined under subsection (i) (without regard to incentive 
     bonuses or payments for which the State is eligible for under 
     subsection (j)(2) for the fiscal year) and that such 
     shortfall is attributable to 1 or more of the following 
     events:

       ``(I) Stafford act or public health emergency.--The State 
     has--

       ``(aa) 1 or more parishes or counties for which a major 
     disaster has been declared in accordance with section 401 of 
     the Robert T. Stafford

[[Page S10960]]

     Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170) 
     and which the President has determined warrants individual 
     and public assistance from the Federal Government under such 
     Act; or
       ``(bb) a public health emergency declared by the Secretary 
     under section 319 of the Public Health Service Act.

       ``(II) State economic downturn.--The State unemployment 
     rate is at least 5.5 percent during any 3-month period during 
     the fiscal year and such rate is at least 120 percent of the 
     State unemployment rate for the same period as averaged over 
     the last 3 fiscal years.
       ``(III)  Event resulting in rise in percentage of low-
     income children without health insurance.--The State 
     experienced a recent event that resulted in an increase in 
     the percentage of low-income children in the State without 
     health insurance (as determined on the basis of the most 
     timely and accurate published estimates of the Bureau of the 
     Census) that was outside the control of the State and 
     warrants granting the State access to the Fund (as determined 
     by the Secretary).

       ``(E) Payments made to all eligible states on a monthly 
     basis; authority for pro rata payments.--The Secretary shall 
     make monthly payments from the Fund to all States that are 
     determined to be eligible States with respect to a month. If 
     the sum of the payments to be made from the Fund for a month 
     exceed the amount in the Fund, the Secretary shall reduce 
     each such payment on a proportional basis.
       ``(F) Payments limited to fiscal year of eligibility 
     determination unless new eligibility basis determined.--No 
     State shall receive a CHIP contingency fund payment under 
     this section for a month beginning after September 30 of the 
     fiscal year in which the State is determined to be an 
     eligible State under this subsection, except that in the case 
     of an event described in subclause (I) or (III) of 
     subparagraph (D)(iii) that occurred after July 1 of the 
     fiscal year, any such payment with respect to such event 
     shall remain available until September 30 of the subsequent 
     fiscal year. Nothing in the preceding sentence shall be 
     construed as prohibiting a State from being determined to be 
     an eligible State under this subsection for any fiscal year 
     occurring after a fiscal year in which such a determination 
     is made.
       ``(G) Exemption from determination of percentage of 
     allotment retained after first year of availability.--In no 
     event shall payments made to a State under this subsection be 
     treated as part of the allotment determined for a State for a 
     fiscal year under subsection (i) for purposes of subsection 
     (j)(1)(B)(ii)(III).
       ``(H) Application of allotment reporting rules.--Rules 
     applicable to States for purposes of receiving payments from 
     an allotment determined under subsection (c) or (i) shall 
     apply in the same manner to an eligible State for purposes of 
     receiving a CHIP contingency fund payment under this 
     subsection.
       ``(4) Annual reports.--The Secretary shall annually report 
     to the Congress on the amounts in the Fund, the specific 
     events that caused States to apply for payments from the 
     Fund, and the payments made from the Fund.''.

     SEC. 109. TWO-YEAR AVAILABILITY OF ALLOTMENTS; EXPENDITURES 
                   COUNTED AGAINST OLDEST ALLOTMENTS.

       Section 2104(e) (42 U.S.C. 1397dd(e)) is amended to read as 
     follows:
       ``(e) Availability of Amounts Allotted.--
       ``(1) In general.--Except as provided in subsection 
     (j)(1)(B)(ii)(III), amounts allotted to a State pursuant to 
     this section--
       ``(A) for each of fiscal years 1998 through 2006, shall 
     remain available for expenditure by the State through the end 
     of the second succeeding fiscal year; and
       ``(B) for each of fiscal years 2007 through 2012, shall 
     remain available for expenditure by the State only through 
     the end of the succeeding fiscal year for which such amounts 
     are allotted.
       ``(2) Incentive bonuses.--Incentive bonuses paid to a State 
     under subsection (j)(2) for a fiscal year shall remain 
     available for expenditure by the State without limitation.
       ``(3) CHIP contingency fund payments.--Except as provided 
     in paragraph (3)(F) of subsection (k), CHIP Contingency Fund 
     payments made to a State under such subsection for a month of 
     a fiscal year shall remain available for expenditure by the 
     State through the end of the fiscal year.
       ``(4) Rule for counting expenditures against chip 
     contingency fund payments, fiscal year allotments, and 
     incentive bonuses.--
       ``(A) In general.--Expenditures under the State child 
     health plan made on or after October 1, 2007, shall be 
     counted against--
       ``(i) first, any CHIP Contingency Fund payment made to the 
     State under subsection (k) for the earliest month of the 
     earliest fiscal year for which the payment remains available 
     for expenditure; and
       ``(ii) second, amounts allotted to the State for the 
     earliest fiscal year for which amounts remain available for 
     expenditure.
       ``(B) Incentive bonuses.--A State may elect, but is not 
     required, to count expenditures under the State child health 
     plan against any incentive bonuses paid to the State under 
     subsection (j)(2) for a fiscal year.
       ``(C) Block grant set-asides.--Expenditures for coverage 
     of--
       ``(i) nonpregnant childless adults for fiscal year 2009 
     shall be counted only against the amount set aside for such 
     coverage under section 2111(a)(3); and
       ``(ii) parents of targeted low-income children for each of 
     fiscal years 2010 through 2012, shall be counted only against 
     the amount set aside for such coverage under section 
     2111(b)(2)(B)(i).''.

     SEC. 110. LIMITATION ON MATCHING RATE FOR STATES THAT PROPOSE 
                   TO COVER CHILDREN WITH EFFECTIVE FAMILY INCOME 
                   THAT EXCEEDS 300 PERCENT OF THE POVERTY LINE.

       (a) FMAP Applied to Expenditures.--Section 2105(c) (42 
     U.S.C. 1397ee(c)) is amended by adding at the end the 
     following new paragraph:
       ``(8) Limitation on matching rate for expenditures for 
     child health assistance provided to children whose effective 
     family income exceeds 300 percent of the poverty line.--
       ``(A) FMAP applied to expenditures.--Except as provided in 
     subparagraph (B), for fiscal years beginning with fiscal year 
     2008, the Federal medical assistance percentage (as 
     determined under section 1905(b) without regard to clause (4) 
     of such section) shall be substituted for the enhanced FMAP 
     under subsection (a)(1) with respect to any expenditures for 
     providing child health assistance or health benefits coverage 
     for a targeted low-income child whose effective family income 
     would exceed 300 percent of the poverty line but for the 
     application of a general exclusion of a block of income that 
     is not determined by type of expense or type of income.
       ``(B) Exception.--Subparagraph (A) shall not apply to any 
     State that, on the date of enactment of the Children's Health 
     Insurance Program Reauthorization Act of 2007, has an 
     approved State plan amendment or waiver to provide, or has 
     enacted a State law to submit a State plan amendment to 
     provide, expenditures described in such subparagraph under 
     the State child health plan.''.
       (b) Conforming Amendment.--Section 2105(a)(1) (42 U.S.C. 
     1397dd(a)(1)) is amended, in the matter preceding 
     subparagraph (A), by inserting ``or subsection (c)(8)'' after 
     ``subparagraph (B)''.

     SEC. 111. OPTION FOR QUALIFYING STATES TO RECEIVE THE 
                   ENHANCED PORTION OF THE CHIP MATCHING RATE FOR 
                   MEDICAID COVERAGE OF CERTAIN CHILDREN.

       Section 2105(g) (42 U.S.C. 1397ee(g)) is amended--
       (1) in paragraph (1)(A), by inserting ``subject to 
     paragraph (4),'' after ``Notwithstanding any other provision 
     of law,''; and
       (2) by adding at the end the following new paragraph:
       ``(4) Option for allotments for fiscal years 2008 through 
     2012.--
       ``(A) Payment of enhanced portion of matching rate for 
     certain expenditures.--In the case of expenditures described 
     in subparagraph (B), a qualifying State (as defined in 
     paragraph (2)) may elect to be paid from the State's 
     allotment made under section 2104 for any of fiscal years 
     2008 through 2012 (insofar as the allotment is available to 
     the State under subsections (e) and (i) of such section) an 
     amount each quarter equal to the additional amount that would 
     have been paid to the State under title XIX with respect to 
     such expenditures if the enhanced FMAP (as determined under 
     subsection (b)) had been substituted for the Federal medical 
     assistance percentage (as defined in section 1905(b)).
       ``(B) Expenditures described.--For purposes of subparagraph 
     (A), the expenditures described in this subparagraph are 
     expenditures made after the date of the enactment of this 
     paragraph and during the period in which funds are available 
     to the qualifying State for use under subparagraph (A), for 
     the provision of medical assistance to individuals residing 
     in the State who are eligible for medical assistance under 
     the State plan under title XIX or under a waiver of such plan 
     and who have not attained age 19 (or, if a State has so 
     elected under the State plan under title XIX, age 20 or 21), 
     and whose family income equals or exceeds 133 percent of the 
     poverty line but does not exceed the Medicaid applicable 
     income level.''.

                   TITLE II--OUTREACH AND ENROLLMENT

     SEC. 201. GRANTS FOR OUTREACH AND ENROLLMENT.

       (a) Grants.--Title XXI (42 U.S.C. 1397aa et seq.), as 
     amended by section 107, is amended by adding at the end the 
     following:

     ``SEC. 2113. GRANTS TO IMPROVE OUTREACH AND ENROLLMENT.

       ``(a) Outreach and Enrollment Grants; National Campaign.--
       ``(1) In general.--From the amounts appropriated under 
     subsection (g), subject to paragraph (2), the Secretary shall 
     award grants to eligible entities during the period of fiscal 
     years 2008 through 2012 to conduct outreach and enrollment 
     efforts that are designed to increase the enrollment and 
     participation of eligible children under this title and title 
     XIX.
       ``(2) Ten percent set aside for national enrollment 
     campaign.--An amount equal to 10 percent of such amounts 
     shall be used by the Secretary for expenditures during such 
     period to carry out a national enrollment campaign in 
     accordance with subsection (h).
       ``(b) Priority for Award of Grants.--
       ``(1) In general.--In awarding grants under subsection (a), 
     the Secretary shall give priority to eligible entities that--
       ``(A) propose to target geographic areas with high rates 
     of--
       ``(i) eligible but unenrolled children, including such 
     children who reside in rural areas; or
       ``(ii) racial and ethnic minorities and health disparity 
     populations, including those proposals that address cultural 
     and linguistic barriers to enrollment; and
       ``(B) submit the most demonstrable evidence required under 
     paragraphs (1) and (2) of subsection (c).
       ``(2) Ten percent set aside for outreach to indian 
     children.--An amount equal to 10 percent of the funds 
     appropriated under subsection (g) shall be used by the 
     Secretary to award grants to Indian Health Service providers 
     and urban Indian organizations receiving funds under title V 
     of the Indian Health Care Improvement Act (25 U.S.C. 1651 et 
     seq.) for outreach to, and enrollment of, children who are 
     Indians.

[[Page S10961]]

       ``(c) Application.--An eligible entity that desires to 
     receive a grant under subsection (a) shall submit an 
     application to the Secretary in such form and manner, and 
     containing such information, as the Secretary may decide. 
     Such application shall include--
       ``(1) evidence demonstrating that the entity includes 
     members who have access to, and credibility with, ethnic or 
     low-income populations in the communities in which activities 
     funded under the grant are to be conducted;
       ``(2) evidence demonstrating that the entity has the 
     ability to address barriers to enrollment, such as lack of 
     awareness of eligibility, stigma concerns and punitive fears 
     associated with receipt of benefits, and other cultural 
     barriers to applying for and receiving child health 
     assistance or medical assistance;
       ``(3) specific quality or outcomes performance measures to 
     evaluate the effectiveness of activities funded by a grant 
     awarded under this section; and
       ``(4) an assurance that the eligible entity shall--
       ``(A) conduct an assessment of the effectiveness of such 
     activities against the performance measures;
       ``(B) cooperate with the collection and reporting of 
     enrollment data and other information in order for the 
     Secretary to conduct such assessments; and
       ``(C) in the case of an eligible entity that is not the 
     State, provide the State with enrollment data and other 
     information as necessary for the State to make necessary 
     projections of eligible children and pregnant women.
       ``(d) Dissemination of Enrollment Data and Information 
     Determined From Effectiveness Assessments; Annual Report.--
     The Secretary shall--
       ``(1) make publicly available the enrollment data and 
     information collected and reported in accordance with 
     subsection (c)(4)(B); and
       ``(2) submit an annual report to Congress on the outreach 
     and enrollment activities conducted with funds appropriated 
     under this section.
       ``(e) Maintenance of Effort for States Awarded Grants; No 
     State Match Required.--In the case of a State that is awarded 
     a grant under this section--
       ``(1) the State share of funds expended for outreach and 
     enrollment activities under the State child health plan shall 
     not be less than the State share of such funds expended in 
     the fiscal year preceding the first fiscal year for which the 
     grant is awarded; and
       ``(2) no State matching funds shall be required for the 
     State to receive a grant under this section.
       ``(f) Definitions.--In this section:
       ``(1) Eligible entity.--The term `eligible entity' means 
     any of the following:
       ``(A) A State with an approved child health plan under this 
     title.
       ``(B) A local government.
       ``(C) An Indian tribe or tribal consortium, a tribal 
     organization, an urban Indian organization receiving funds 
     under title V of the Indian Health Care Improvement Act (25 
     U.S.C. 1651 et seq.), or an Indian Health Service provider.
       ``(D) A Federal health safety net organization.
       ``(E) A national, State, local, or community-based public 
     or nonprofit private organization, including organizations 
     that use community health workers or community-based doula 
     programs.
       ``(F) A faith-based organization or consortia, to the 
     extent that a grant awarded to such an entity is consistent 
     with the requirements of section 1955 of the Public Health 
     Service Act (42 U.S.C. 300x-65) relating to a grant award to 
     nongovernmental entities.
       ``(G) An elementary or secondary school.
       ``(2) Federal health safety net organization.--The term 
     `Federal health safety net organization' means--
       ``(A) a Federally-qualified health center (as defined in 
     section 1905(l)(2)(B));
       ``(B) a hospital defined as a disproportionate share 
     hospital for purposes of section 1923;
       ``(C) a covered entity described in section 340B(a)(4) of 
     the Public Health Service Act (42 U.S.C. 256b(a)(4)); and
       ``(D) any other entity or consortium that serves children 
     under a federally funded program, including the special 
     supplemental nutrition program for women, infants, and 
     children (WIC) established under section 17 of the Child 
     Nutrition Act of 1966 (42 U.S.C. 1786), the Head Start and 
     Early Head Start programs under the Head Start Act (42 U.S.C. 
     9801 et seq.), the school lunch program established under the 
     Richard B. Russell National School Lunch Act, and an 
     elementary or secondary school.
       ``(3) Indians; indian tribe; tribal organization; urban 
     indian organization.--The terms `Indian', `Indian tribe', 
     `tribal organization', and `urban Indian organization' have 
     the meanings given such terms in section 4 of the Indian 
     Health Care Improvement Act (25 U.S.C. 1603).
       ``(4) Community health worker.--The term `community health 
     worker' means an individual who promotes health or nutrition 
     within the community in which the individual resides--
       ``(A) by serving as a liaison between communities and 
     health care agencies;
       ``(B) by providing guidance and social assistance to 
     community residents;
       ``(C) by enhancing community residents' ability to 
     effectively communicate with health care providers;
       ``(D) by providing culturally and linguistically 
     appropriate health or nutrition education;
       ``(E) by advocating for individual and community health or 
     nutrition needs; and
       ``(F) by providing referral and followup services.
       ``(g) Appropriation.--There is appropriated, out of any 
     money in the Treasury not otherwise appropriated, 
     $100,000,000 for the period of fiscal years 2008 through 
     2012, to remain available until expended, for the purpose of 
     awarding grants under this section. Amounts appropriated and 
     paid under the authority of this section shall be in addition 
     to amounts appropriated under section 2104 and paid to States 
     in accordance with section 2105, including with respect to 
     expenditures for outreach activities in accordance with 
     subsections (a)(1)(D)(iii) and (c)(2)(C) of that section.
       ``(h) National Enrollment Campaign.--From the amounts made 
     available under subsection (a)(2), the Secretary shall 
     develop and implement a national enrollment campaign to 
     improve the enrollment of underserved child populations in 
     the programs established under this title and title XIX. Such 
     campaign may include--
       ``(1) the establishment of partnerships with the Secretary 
     of Education and the Secretary of Agriculture to develop 
     national campaigns to link the eligibility and enrollment 
     systems for the assistance programs each Secretary 
     administers that often serve the same children;
       ``(2) the integration of information about the programs 
     established under this title and title XIX in public health 
     awareness campaigns administered by the Secretary;
       ``(3) increased financial and technical support for 
     enrollment hotlines maintained by the Secretary to ensure 
     that all States participate in such hotlines;
       ``(4) the establishment of joint public awareness outreach 
     initiatives with the Secretary of Education and the Secretary 
     of Labor regarding the importance of health insurance to 
     building strong communities and the economy;
       ``(5) the development of special outreach materials for 
     Native Americans or for individuals with limited English 
     proficiency; and
       ``(6) such other outreach initiatives as the Secretary 
     determines would increase public awareness of the programs 
     under this title and title XIX.''.
       (b) Enhanced Administrative Funding for Translation or 
     Interpretation Services Under CHIP.--Section 2105(a)(1) (42 
     U.S.C. 1397ee(a)(1)), as amended by section 603, is amended--
       (1) in the matter preceding subparagraph (A), by inserting 
     ``(or, in the case of expenditures described in subparagraph 
     (D)(iv), the higher of 75 percent or the sum of the enhanced 
     FMAP plus 5 percentage points)'' after ``enhanced FMAP''; and
       (2) in subparagraph (D)--
       (A) in clause (iii), by striking ``and'' at the end;
       (B) by redesignating clause (iv) as clause (v); and
       (C) by inserting after clause (iii) the following new 
     clause:
       ``(iv) for translation or interpretation services in 
     connection with the enrollment and use of services under this 
     title by individuals for whom English is not their primary 
     language (as found necessary by the Secretary for the proper 
     and efficient administration of the State plan); and''.
       (c) Nonapplication of Administrative Expenditures Cap.--
     Section 2105(c)(2) (42 U.S.C. 1397ee(c)(2)) is amended by 
     adding at the end the following:
       ``(C) Nonapplication to certain expenditures.--The 
     limitation under subparagraph (A) shall not apply with 
     respect to the following expenditures:
       ``(i) Expenditures funded under section 2113.--Expenditures 
     for outreach and enrollment activities funded under a grant 
     awarded to the State under section 2113.''.

     SEC. 202. INCREASED OUTREACH AND ENROLLMENT OF INDIANS.

       (a) In General.--Section 1139 (42 U.S.C. 1320b-9) is 
     amended to read as follows:

     ``SEC. 1139. IMPROVED ACCESS TO, AND DELIVERY OF, HEALTH CARE 
                   FOR INDIANS UNDER TITLES XIX AND XXI.

       ``(a) Agreements With States for Medicaid and CHIP Outreach 
     On or Near Reservations To Increase the Enrollment of Indians 
     in Those Programs.--
       ``(1) In general.--In order to improve the access of 
     Indians residing on or near a reservation to obtain benefits 
     under the Medicaid and State children's health insurance 
     programs established under titles XIX and XXI, the Secretary 
     shall encourage the State to take steps to provide for 
     enrollment on or near the reservation. Such steps may include 
     outreach efforts such as the outstationing of eligibility 
     workers, entering into agreements with the Indian Health 
     Service, Indian Tribes, Tribal Organizations, and Urban 
     Indian Organizations to provide outreach, education regarding 
     eligibility and benefits, enrollment, and translation 
     services when such services are appropriate.
       ``(2) Construction.--Nothing in paragraph (1) shall be 
     construed as affecting arrangements entered into between 
     States and the Indian Health Service, Indian Tribes, Tribal 
     Organizations, or Urban Indian Organizations for such 
     Service, Tribes, or Organizations to conduct administrative 
     activities under such titles.
       ``(b) Requirement To Facilitate Cooperation.--The 
     Secretary, acting through the Centers for Medicare & Medicaid 
     Services, shall take such steps as are necessary to 
     facilitate cooperation with, and agreements between, States 
     and the Indian Health Service, Indian Tribes, Tribal 
     Organizations, or Urban Indian Organizations with respect to 
     the provision of health care items and services to Indians 
     under the programs established under title XIX or XXI.
       ``(c) Definition of Indian; Indian Tribe; Indian Health 
     Program; Tribal Organization; Urban Indian Organization.--In 
     this section, the terms `Indian', `Indian Tribe', `Indian 
     Health Program', `Tribal Organization', and `Urban Indian 
     Organization' have the meanings

[[Page S10962]]

     given those terms in section 4 of the Indian Health Care 
     Improvement Act.''.
       (b) Nonapplication of 10 Percent Limit on Outreach and 
     Certain Other Expenditures.--Section 2105(c)(2)(C) (42 U.S.C. 
     1397ee(c)(2)(C)), as added by section 201(c), is amended by 
     adding at the end the following new clause:
       ``(ii) Expenditures to increase outreach to, and the 
     enrollment of, indian children under this title and title 
     xix.--Expenditures for outreach activities to families of 
     Indian children likely to be eligible for child health 
     assistance under the plan or medical assistance under the 
     State plan under title XIX (or under a waiver of such plan), 
     to inform such families of the availability of, and to assist 
     them in enrolling their children in, such plans, including 
     such activities conducted under grants, contracts, or 
     agreements entered into under section 1139(a).''.

     SEC. 203. DEMONSTRATION PROGRAM TO PERMIT STATES TO RELY ON 
                   FINDINGS BY AN EXPRESS LANE AGENCY TO DETERMINE 
                   COMPONENTS OF A CHILD'S ELIGIBILITY FOR 
                   MEDICAID OR CHIP.

       (a) Requirement To Conduct Demonstration Program.--
       (1) In general.--The Secretary shall establish a 3-year 
     demonstration program under which up to 10 States shall be 
     authorized to rely on a finding made within the preceding 12 
     months by an Express Lane agency to determine whether a child 
     has met 1 or more of the eligibility requirements, such as 
     income, assets or resources, citizenship status, or other 
     criteria, necessary to determine the child's initial 
     eligibility, eligibility redetermination, or renewal of 
     eligibility, for medical assistance under the State Medicaid 
     plan or child health assistance under the State CHIP plan. A 
     State selected to participate in the demonstration program--
       (A) shall not be required to direct a child (or a child's 
     family) to submit information or documentation previously 
     submitted by the child or family to an Express Lane agency 
     that the State relies on for its Medicaid or CHIP eligibility 
     determination; and
       (B) may rely on information from an Express Lane agency 
     when evaluating a child's eligibility for medical assistance 
     under the State Medicaid plan or child health assistance 
     under the State CHIP plan without a separate, independent 
     confirmation of the information at the time of enrollment, 
     redetermination, or renewal.
       (2) Payments to states.--From the amount appropriated under 
     paragraph (1) of subsection (f), after the application of 
     paragraph (2) of that subsection, the Secretary shall pay the 
     States selected to participate in the demonstration program 
     such sums as the Secretary shall determine for expenditures 
     made by the State for systems upgrades and implementation of 
     the demonstration program. In no event shall a payment be 
     made to a State from the amount appropriated under subsection 
     (f) for any expenditures incurred for providing medical 
     assistance or child health assistance to a child enrolled in 
     the State Medicaid plan or the State CHIP plan through 
     reliance on a finding made by an Express Lane agency.
       (b) Requirements; Options for Application.--
       (1) State requirements.--A State selected to participate in 
     the demonstration program established under this section may 
     rely on a finding of an Express Lane agency only if the 
     following conditions are met:
       (A) Requirement to determine eligibility using regular 
     procedures if child is first found ineligible.--If reliance 
     on a finding from an Express Lane agency results in a child 
     not being found eligible for the State Medicaid plan or the 
     State CHIP plan, the State would be required to determine 
     eligibility under such plan using its regular procedures.
       (B) Notice.--The State shall inform the families 
     (especially those whose children are enrolled in the State 
     CHIP plan) that they may qualify for lower premium payments 
     or more comprehensive health coverage under the State 
     Medicaid plan if the family's income were directly evaluated 
     for an eligibility determination by the State Medicaid 
     agency, and that, at the family's option, the family may seek 
     an eligibility determination by the State Medicaid agency.
       (C) Compliance with department of homeland security 
     procedures.--The State may rely on an Express Lane agency 
     finding that a child is a qualified alien as long as the 
     Express Lane agency complies with guidance and regulatory 
     procedures issued by the Secretary of Homeland Security for 
     eligibility determinations of qualified aliens (as defined in 
     subsections (b) and (c) of section 431 of the Personal 
     Responsibility and Work Opportunity Reconciliation Act of 
     1996 (8 U.S.C. 1641)).
       (D) Verification of citizenship or nationality status.--The 
     State shall satisfy the requirements of section 
     1902(a)(46)(B) or 2105(c)(9) of the Social Security Act, as 
     applicable (and as added by section 301 of this Act) for 
     verifications of citizenship or nationality status.
       (E) Coding; application to enrollment error rates.--
       (i) In general.--The State agrees to--

       (I) assign such codes as the Secretary shall require to the 
     children who are enrolled in the State Medicaid plan or the 
     State CHIP plan through reliance on a finding made by an 
     Express Lane agency for the duration of the State's 
     participation in the demonstration program;
       (II) annually provide the Secretary with a statistically 
     valid sample (that is approved by Secretary) of the children 
     enrolled in such plans through reliance on such a finding by 
     conducting a full Medicaid eligibility review of the children 
     identified for such sample for purposes of determining an 
     eligibility error rate with respect to the enrollment of such 
     children;
       (III) submit the error rate determined under subclause (II) 
     to the Secretary;
       (IV) if such error rate exceeds 3 percent for either of the 
     first 2 fiscal years in which the State participates in the 
     demonstration program, demonstrate to the satisfaction of the 
     Secretary the specific corrective actions implemented by the 
     State to improve upon such error rate; and
       (V) if such error rate exceeds 3 percent for any fiscal 
     year in which the State participates in the demonstration 
     program, a reduction in the amount otherwise payable to the 
     State under section 1903(a) of the Social Security Act (42 
     Secretary 1396b(a)) for quarters for that fiscal year, equal 
     to the total amount of erroneous excess payments determined 
     for the fiscal year only with respect to the children 
     included in the sample for the fiscal year that are in excess 
     of a 3 percent error rate with respect to such children.

       (ii) No punitive action based on error rate.--The Secretary 
     shall not apply the error rate derived from the sample under 
     clause (i) to the entire population of children enrolled in 
     the State Medicaid plan or the State CHIP plan through 
     reliance on a finding made by an Express Lane agency, or to 
     the population of children enrolled in such plans on the 
     basis of the State's regular procedures for determining 
     eligibility, or penalize the State on the basis of such error 
     rate in any manner other than the reduction of payments 
     provided for under clause (i)(V).
       (iii) Rule of construction.--Nothing in this section shall 
     be construed as relieving a State that participates in the 
     demonstration program established under this section from 
     being subject to a penalty under section 1903(u) of the 
     Social Security Act (42 U.S.C. 1396b(u)) for payments made 
     under the State Medicaid plan with respect to ineligible 
     individuals and families that are determined to exceed the 
     error rate permitted under that section (as determined 
     without regard to the error rate determined under clause 
     (i)(II)).
       (2) State options for application.--A State selected to 
     participate in the demonstration program may elect to apply 
     any of the following:
       (A) Satisfaction of chip screen and enroll requirements.--
     If the State relies on a finding of an Express Lane agency 
     for purposes of determining eligibility under the State CHIP 
     plan, the State may meet the screen and enroll requirements 
     imposed under subparagraphs (A) and (B) of section 2102(b)(3) 
     of the Social Security Act (42 U.S.C. 1397bb(b)(3)) by using 
     any of the following:
       (i) Establishing a threshold percentage of the poverty line 
     that is 30 percentage points (or such other higher number of 
     percentage points) as the State determines reflects the 
     income methodologies of the program administered by the 
     Express Lane Agency and the State Medicaid plan.
       (ii) Providing that a child satisfies all income 
     requirements for eligibility under the State Medicaid plan.
       (iii) Providing that a child has a family income that 
     exceeds the Medicaid applicable income level.
       (B) Presumptive eligibility.--The State may provide for 
     presumptive eligibility under the State CHIP plan for a child 
     who, based on an eligibility determination of an income 
     finding from an Express Lane agency, would qualify for child 
     health assistance under the State CHIP plan. During the 
     period of presumptive eligibility, the State may determine 
     the child's eligibility for child health assistance under the 
     State CHIP plan based on telephone contact with family 
     members, access to data available in electronic or paper 
     format, or other means that minimize to the maximum extent 
     feasible the burden on the family.
       (C) Automatic enrollment.--
       (i) In general.--The State may initiate and determine 
     eligibility for medical assistance under the State Medicaid 
     plan or for child health assistance under the State CHIP plan 
     without a program application from, or on behalf of, the 
     child based on data obtained from sources other than the 
     child (or the child's family), but a child can only be 
     automatically enrolled in the State Medicaid plan or the 
     State CHIP plan if the child or the family affirmatively 
     consents to being enrolled through affirmation and signature 
     on an Express Lane agency application.
       (ii) Information requirement.--A State that elects the 
     option under clause (i) shall have procedures in place to 
     inform the child or the child's family of the services that 
     will be covered under the State Medicaid plan or the State 
     CHIP plan (as applicable), appropriate methods for using such 
     services, premium or other cost sharing charges (if any) that 
     apply, medical support obligations created by the enrollment 
     (if applicable), and the actions the child or the child's 
     family must take to maintain enrollment and renew coverage.
       (iii) Option to waive signatures.--The State may waive any 
     signature requirements for enrollment for a child who 
     consents to, or on whose behalf consent is provided for, 
     enrollment in the State Medicaid plan or the State CHIP plan.
       (3) Signature requirements.--In the case of a State 
     selected to participate in the demonstration program--
       (A) no signature under penalty of perjury shall be required 
     on an application form for medical assistance under the State 
     Medicaid plan or child health assistance under the State CHIP 
     plan to attest to any element of the application for which 
     eligibility is based on information received from an Express 
     Lane agency or a source other than an applicant; and
       (B) any signature requirement for determination of an 
     application for medical assistance under the State Medicaid 
     plan or child health assistance under the State CHIP plan may 
     be satisfied through an electronic signature.

[[Page S10963]]

       (4) Rules of construction.--Nothing in this subsection 
     shall be construed to--
       (A) relieve a State of the obligation under section 
     1902(a)(5) of the Social Security Act (42 U.S.C. 1396a(a)(5)) 
     to determine eligibility for medical assistance under the 
     State Medicaid plan; or
       (B) prohibit any State options otherwise permitted under 
     Federal law (without regard to this paragraph or the 
     demonstration program established under this section) that 
     are intended to increase the enrollment of eligible children 
     for medical assistance under the State Medicaid plan or child 
     health assistance under the State CHIP plan, including 
     options related to outreach, enrollment, applications, or the 
     determination or redetermination of eligibility.
       (c) Limited Waiver of Other Applicable Requirements.--
       (1) Social security act.--The Secretary shall waive only 
     such requirements of the Social Security Act as the Secretary 
     determines are necessary to carry out the demonstration 
     program established under this section.
       (2) Authorization for participating states to receive 
     certain data directly relevant to determining eligibility and 
     correct amount of assistance.--For provisions relating to the 
     authority of States participating in the demonstration 
     program to receive certain data directly, see section 204(c).
       (d) Evaluation and Report.--
       (1) Evaluation.--The Secretary shall conduct, by grant, 
     contract, or interagency agreement, a comprehensive, 
     independent evaluation of the demonstration program 
     established under this section. Such evaluation shall include 
     an analysis of the effectiveness of the program, and shall 
     include--
       (A) obtaining a statistically valid sample of the children 
     who were enrolled in the State Medicaid plan or the State 
     CHIP plan through reliance on a finding made by an Express 
     Lane agency and determining the percentage of children who 
     were erroneously enrolled in such plans;
       (B) determining whether enrolling children in such plans 
     through reliance on a finding made by an Express Lane agency 
     improves the ability of a State to identify and enroll low-
     income, uninsured children who are eligible but not enrolled 
     in such plans;
       (C) evaluating the administrative costs or savings related 
     to identifying and enrolling children in such plans through 
     reliance on such findings, and the extent to which such costs 
     differ from the costs that the State otherwise would have 
     incurred to identify and enroll low-income, uninsured 
     children who are eligible but not enrolled in such plans; and
       (D) any recommendations for legislative or administrative 
     changes that would improve the effectiveness of enrolling 
     children in such plans through reliance on such findings.
       (2) Report to congress.--Not later than September 30, 2012, 
     the Secretary shall submit a report to Congress on the 
     results of the evaluation of the demonstration program 
     established under this section.
       (e) Definitions.--In this section:
       (1) Child; children.--With respect to a State selected to 
     participate in the demonstration program established under 
     this section, the terms ``child'' and ``children'' have the 
     meanings given such terms for purposes of the State plans 
     under titles XIX and XXI of the Social Security Act.
       (2) Express lane agency.--
       (A) In general.--The term ``Express Lane agency'' means a 
     public agency that--
       (i) is determined by the State Medicaid agency or the State 
     CHIP agency (as applicable) to be capable of making the 
     determinations of 1 or more eligibility requirements 
     described in subsection (a)(1);
       (ii) is identified in the State Medicaid plan or the State 
     CHIP plan; and
       (iii) notifies the child's family--

       (I) of the information which shall be disclosed in 
     accordance with this section;
       (II) that the information disclosed will be used solely for 
     purposes of determining eligibility for medical assistance 
     under the State Medicaid plan or for child health assistance 
     under the State CHIP plan; and
       (III) that the family may elect to not have the information 
     disclosed for such purposes; and

       (iv) enters into, or is subject to, an interagency 
     agreement to limit the disclosure and use of the information 
     disclosed.
       (B) Inclusion of specific public agencies.--Such term 
     includes the following:
       (i) A public agency that determines eligibility for 
     assistance under any of the following:

       (I) The temporary assistance for needy families program 
     funded under part A of title IV of the Social Security Act 
     (42 U.S.C. 601 et seq.).
       (II) A State program funded under part D of title IV of 
     such Act (42 U.S.C. 651 et seq.).
       (III) The State Medicaid plan.
       (IV) The State CHIP plan.
       (V) The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.).
       (VI) The Head Start Act (42 U.S.C. 9801 et seq.).
       (VII) The Richard B. Russell National School Lunch Act (42 
     U.S.C. 1751 et seq.).
       (VIII) The Child Nutrition Act of 1966 (42 U.S.C. 1771 et 
     seq.).
       (IX) The Child Care and Development Block Grant Act of 1990 
     (42 U.S.C. 9858 et seq.).
       (X) The Stewart B. McKinney Homeless Assistance Act (42 
     U.S.C. 11301 et seq.).
       (XI) The United States Housing Act of 1937 (42 U.S.C. 1437 
     et seq.).
       (XII) The Native American Housing Assistance and Self-
     Determination Act of 1996 (25 U.S.C. 4101 et seq.).

       (ii) A State-specified governmental agency that has fiscal 
     liability or legal responsibility for the accuracy of the 
     eligibility determination findings relied on by the State.
       (iii) A public agency that is subject to an interagency 
     agreement limiting the disclosure and use of the information 
     disclosed for purposes of determining eligibility under the 
     State Medicaid plan or the State CHIP plan.
       (C) Exclusions.--Such term does not include an agency that 
     determines eligibility for a program established under the 
     Social Services Block Grant established under title XX of the 
     Social Security Act (42 U.S.C. 1397 et seq.) or a private, 
     for-profit organization.
       (D) Rules of construction.--Nothing in this paragraph shall 
     be construed as--
       (i) affecting the authority of a State Medicaid agency to 
     enter into contracts with nonprofit and for-profit agencies 
     to administer the Medicaid application process;
       (ii) exempting a State Medicaid agency from complying with 
     the requirements of section 1902(a)(4) of the Social Security 
     Act (relating to merit-based personnel standards for 
     employees of the State Medicaid agency and safeguards against 
     conflicts of interest); or
       (iii) authorizing a State Medicaid agency that participates 
     in the demonstration program established under this section 
     to use the Express Lane option to avoid complying with such 
     requirements for purposes of making eligibility 
     determinations under the State Medicaid plan.
       (3) Medicaid applicable income level.--With respect to a 
     State, the term ``Medicaid applicable income level'' has the 
     meaning given that term for purposes of such State under 
     section 2110(b)(4) of the Social Security Act (42 U.S.C. 
     1397jj(4)).
       (4) Poverty line.--The term ``poverty line'' has the 
     meaning given that term in section 2110(c)(5) of the Social 
     Security Act (42 U.S.C. 1397jj(c)(5)).
       (5) State.--The term ``State'' means 1 of the 50 States or 
     the District of Columbia.
       (6) State chip agency.--The term ``State CHIP agency'' 
     means the State agency responsible for administering the 
     State CHIP plan.
       (7) State chip plan.--The term ``State CHIP plan'' means 
     the State child health plan established under title XXI of 
     the Social Security Act (42 U.S.C. 1397aa et seq.), and 
     includes any waiver of such plan.
       (8) State medicaid agency.--The term ``State Medicaid 
     agency'' means the State agency responsible for administering 
     the State Medicaid plan.
       (9) State medicaid plan.--The term ``State Medicaid plan'' 
     means the State plan established under title XIX of the 
     Social Security Act (42 U.S.C. 1396 et seq.), and includes 
     any waiver of such plan.
       (f) Appropriation.--
       (1) Operational funds.--Out of any funds in the Treasury 
     not otherwise appropriated, there is appropriated to the 
     Secretary to carry out the demonstration program established 
     under this section, $49,000,000 for the period of fiscal 
     years 2008 through 2012.
       (2) Evaluation funds.--$5,000,000 of the funds appropriated 
     under paragraph (1) shall be used to conduct the evaluation 
     required under subsection (d).
       (3) Budget authority.--Paragraph (1) constitutes budget 
     authority in advance of appropriations Act and represents the 
     obligation of the Federal Government to provide for the 
     payment to States selected to participate in the 
     demonstration program established under this section of the 
     amounts provided under such paragraph (after the application 
     of paragraph (2)).

     SEC. 204. AUTHORIZATION OF CERTAIN INFORMATION DISCLOSURES TO 
                   SIMPLIFY HEALTH COVERAGE DETERMINATIONS.

       (a) Authorization of Information Disclosure.--Title XIX (42 
     U.S.C. 1396 et seq.) is amended--
       (1) by redesignating section 1939 as section 1940; and
       (2) by inserting after section 1938 the following new 
     section:


            ``AUTHORIZATION TO RECEIVE PERTINENT INFORMATION

       ``Sec. 1939.  (a) In General.--Notwithstanding any other 
     provision of law, a Federal or State agency or private entity 
     in possession of the sources of data directly relevant to 
     eligibility determinations under this title (including 
     eligibility files, information described in paragraph (2) or 
     (3) of section 1137(a), vital records information about 
     births in any State, and information described in sections 
     453(i) and 1902(a)(25)(I)) is authorized to convey such data 
     or information to the State agency administering the State 
     plan under this title, but only if such conveyance meets the 
     requirements of subsection (b).
       ``(b) Requirements for Conveyance.--Data or information may 
     be conveyed pursuant to this section only if the following 
     requirements are met:
       ``(1) The child whose circumstances are described in the 
     data or information (or such child's parent, guardian, 
     caretaker relative, or authorized representative) has either 
     provided advance consent to disclosure or has not objected to 
     disclosure after receiving advance notice of disclosure and a 
     reasonable opportunity to object.
       ``(2) Such data or information are used solely for the 
     purposes of--

[[Page S10964]]

       ``(A) identifying children who are eligible or potentially 
     eligible for medical assistance under this title and 
     enrolling (or attempting to enroll) such children in the 
     State plan; and
       ``(B) verifying the eligibility of children for medical 
     assistance under the State plan.
       ``(3) An interagency or other agreement, consistent with 
     standards developed by the Secretary--
       ``(A) prevents the unauthorized use, disclosure, or 
     modification of such data and otherwise meets applicable 
     Federal requirements for safeguarding privacy and data 
     security; and
       ``(B) requires the State agency administering the State 
     plan to use the data and information obtained under this 
     section to seek to enroll children in the plan.
       ``(c) Criminal Penalty.--A person described in subsection 
     (a) who publishes, divulges, discloses, or makes known in any 
     manner, or to any extent, not authorized by Federal law, any 
     information obtained under this section shall be fined not 
     more than $1,000 or imprisoned not more than 1 year, or both, 
     for each such unauthorized activity.
       ``(d) Rule of Construction.--The limitations and 
     requirements that apply to disclosure pursuant to this 
     section shall not be construed to prohibit the conveyance or 
     disclosure of data or information otherwise permitted under 
     Federal law (without regard to this section).''.
       (b) Conforming Amendment to Title XXI.--Section 2107(e)(1) 
     (42 U.S.C. 1397gg(e)(1)) is amended by adding at the end the 
     following new subparagraph:
       ``(E) Section 1939 (relating to authorization to receive 
     data directly relevant to eligibility determinations).''.
       (c) Authorization for States Participating in the Express 
     Lane Demonstration Program To Receive Certain Data Directly 
     Relevant To Determining Eligibility and Correct Amount of 
     Assistance.--Only in the case of a State selected to 
     participate in the Express Lane demonstration program 
     established under section 203, the Secretary shall enter into 
     such agreements as are necessary to permit such a State to 
     receive data directly relevant to eligibility determinations 
     and determining the correct amount of benefits under the 
     State CHIP plan or the State Medicaid plan (as such terms are 
     defined in paragraphs (7) and (9) section 203(e)) from the 
     following:
       (1) The National Directory of New Hires established under 
     section 453(i) of the Social Security Act (42 U.S.C. 653(i)).
       (2) Data regarding enrollment in insurance that may help to 
     facilitate outreach and enrollment under the State Medicaid 
     plan, the State CHIP plan, and such other programs as the 
     Secretary may specify.

               TITLE III--REDUCING BARRIERS TO ENROLLMENT

     SEC. 301. VERIFICATION OF DECLARATION OF CITIZENSHIP OR 
                   NATIONALITY FOR PURPOSES OF ELIGIBILITY FOR 
                   MEDICAID AND CHIP.

       (a) State Option To Verify Declaration of Citizenship or 
     Nationality for Purposes of Eligibility for Medicaid Through 
     Verification of Name and Social Security Number.--
       (1) Alternative to documentation requirement.--
       (A) In general.--Section 1902 (42 U.S.C. 1396a) is 
     amended--
       (i) in subsection (a)(46)--

       (I) by inserting ``(A)'' after ``(46)'';
       (II) by adding ``and'' after the semicolon; and
       (III) by adding at the end the following new subparagraph:

       ``(B) provide, with respect to an individual declaring to 
     be a citizen or national of the United States for purposes of 
     establishing eligibility under this title, that the State 
     shall satisfy the requirements of--
       ``(i) section 1903(x); or
       ``(ii) subsection (dd);''; and
       (ii) by adding at the end the following new subsection:
       ``(dd)(1) For purposes of subsection (a)(46)(B)(ii), the 
     requirements of this subsection with respect to an individual 
     declaring to be a citizen or national of the United States 
     for purposes of establishing eligibility under this title, 
     are, in lieu of requiring the individual to present 
     satisfactory documentary evidence of citizenship or 
     nationality under section 1903(x) (if the individual is not 
     described in paragraph (2) of that section), as follows:
       ``(A) The State submits the name and social security number 
     of the individual to the Commissioner of Social Security as 
     part of the plan established under paragraph (2).
       ``(B) If the State receives notice from the Commissioner of 
     Social Security that the name or social security number of 
     the individual is invalid, the State--
       ``(i) notifies the individual of such fact;
       (ii) provides the individual with a period of 90 days from 
     the date on which the notice required under clause (i) is 
     received by the individual to either present satisfactory 
     documentary evidence of citizenship or nationality (as 
     defined in section 1903(x)(3)) or cure the invalid 
     determination with the Commissioner of Social Security; and
       ``(iii) disenrolls the individual from the State plan under 
     this title within 30 days after the end of such 90-day period 
     if no such documentary evidence is presented.
       ``(2)(A) Each State electing to satisfy the requirements of 
     this subsection for purposes of section 1902(a)(46)(B) shall 
     establish a program under which the State submits each month 
     to the Commissioner of Social Security for verification the 
     name and social security number of each individual enrolled 
     in the State plan under this title that month who has 
     attained the age of 1 before the date of the enrollment.
       ``(B) In establishing the State program under this 
     paragraph, the State may enter into an agreement with the 
     Commissioner of Social Security to provide for the electronic 
     submission and verification of the name and social security 
     number of an individual before the individual is enrolled in 
     the State plan.
       ``(3)(A) The State agency implementing the plan approved 
     under this title shall, at such times and in such form as the 
     Secretary may specify, provide information on the percentage 
     each month that the invalid names and numbers submitted bears 
     to the total submitted for verification.
       ``(B) If, for any fiscal year, the average monthly 
     percentage determined under subparagraph (A) is greater than 
     7 percent--
       ``(i) the State shall develop and adopt a corrective plan 
     to review its procedures for verifying the identities of 
     individuals seeking to enroll in the State plan under this 
     title and to identify and implement changes in such 
     procedures to improve their accuracy; and
       ``(ii) pay to the Secretary an amount equal to the amount 
     which bears the same ratio to the total payments under the 
     State plan for the fiscal year for providing medical 
     assistance to individuals who provided invalid information as 
     the number of individuals with invalid information in excess 
     of 7 percent of such total submitted bears to the total 
     number of individuals with invalid information.
       ``(C) The Secretary may waive, in certain limited cases, 
     all or part of the payment under subparagraph (B)(ii) if the 
     State is unable to reach the allowable error rate despite a 
     good faith effort by such State.
       ``(D) This paragraph shall not apply to a State for a 
     fiscal year if there is an agreement described in paragraph 
     (2)(B) in effect as of the close of the fiscal year.
       ``(4) Nothing in this subsection shall affect the rights of 
     any individual under this title to appeal any disenrollment 
     from a State plan.''.
       (B) Costs of implementing and maintaining system.--Section 
     1903(a)(3) (42 U.S.C. 1396b(a)(3)) is amended--
       (i) by striking ``plus'' at the end of subparagraph (E) and 
     inserting ``and'', and
       (ii) by adding at the end the following new subparagraph:
       ``(F)(i) 90 percent of the sums expended during the quarter 
     as are attributable to the design, development, or 
     installation of such mechanized verification and information 
     retrieval systems as the Secretary determines are necessary 
     to implement section 1902(dd) (including a system described 
     in paragraph (2)(B) thereof), and
       ``(ii) 75 percent of the sums expended during the quarter 
     as are attributable to the operation of systems to which 
     clause (i) applies, plus''.
       (2) Limitation on waiver authority.--Notwithstanding any 
     provision of section 1115 of the Social Security Act (42 
     U.S.C. 1315), or any other provision of law, the Secretary 
     may not waive the requirements of section 1902(a)(46)(B) of 
     such Act (42 U.S.C. 1396a(a)(46)(B)) with respect to a State.
       (3) Conforming amendments.--Section 1903 (42 U.S.C. 1396b) 
     is amended--
       (A) in subsection (i)(22), by striking ``subsection (x)'' 
     and inserting ``section 1902(a)(46)(B)''; and
       (B) in subsection (x)(1), by striking ``subsection 
     (i)(22)'' and inserting ``section 1902(a)(46)(B)(i)''.
       (b) Clarification of Requirements Relating to Presentation 
     of Satisfactory Documentary Evidence of Citizenship or 
     Nationality.--
       (1) Acceptance of documentary evidence issued by a 
     federally recognized indian tribe.--Section 1903(x)(3)(B) (42 
     U.S.C. 1396b(x)(3)(B)) is amended--
       (A) by redesignating clause (v) as clause (vi); and
       (B) by inserting after clause (iv), the following new 
     clause:
       ``(v)(I) Except as provided in subclause (II), a document 
     issued by a federally recognized Indian tribe evidencing 
     membership or enrollment in, or affiliation with, such tribe 
     (such as a tribal enrollment card or certificate of degree of 
     Indian blood).
       ``(II) With respect to those federally recognized Indian 
     tribes located within States having an international border 
     whose membership includes individuals who are not citizens of 
     the United States, the Secretary shall, after consulting with 
     such tribes, issue regulations authorizing the presentation 
     of such other forms of documentation (including tribal 
     documentation, if appropriate) that the Secretary determines 
     to be satisfactory documentary evidence of citizenship or 
     nationality for purposes of satisfying the requirement of 
     this subsection.''.
       (2) Requirement to provide reasonable opportunity to 
     present satisfactory documentary evidence.--Section 1903(x) 
     (42 U.S.C. 1396b(x)) is amended by adding at the end the 
     following new paragraph:
       ``(4) In the case of an individual declaring to be a 
     citizen or national of the United States with respect to whom 
     a State requires the presentation of satisfactory documentary 
     evidence of citizenship or nationality under section 
     1902(a)(46)(B)(i), the individual shall be provided at least 
     the reasonable opportunity to present satisfactory 
     documentary evidence of citizenship or nationality under this 
     subsection as is provided under clauses (i) and (ii) of

[[Page S10965]]

     section 1137(d)(4)(A) to an individual for the submittal to 
     the State of evidence indicating a satisfactory immigration 
     status.''.
       (3) Children born in the united states to mothers eligible 
     for medicaid.--
       (A) Clarification of rules.--Section 1903(x) (42 U.S.C. 
     1396b(x)), as amended by paragraph (2), is amended--
       (i) in paragraph (2)--

       (I) in subparagraph (C), by striking ``or'' at the end;
       (II) by redesignating subparagraph (D) as subparagraph (E); 
     and
       (III) by inserting after subparagraph (C) the following new 
     subparagraph:

       ``(D) pursuant to the application of section 1902(e)(4) 
     (and, in the case of an individual who is eligible for 
     medical assistance on such basis, the individual shall be 
     deemed to have provided satisfactory documentary evidence of 
     citizenship or nationality and shall not be required to 
     provide further documentary evidence on any date that occurs 
     during or after the period in which the individual is 
     eligible for medical assistance on such basis); or''; and
       (ii) by adding at the end the following new paragraph:
       ``(5) Nothing in subparagraph (A) or (B) of section 
     1902(a)(46), the preceding paragraphs of this subsection, or 
     the Deficit Reduction Act of 2005, including section 6036 of 
     such Act, shall be construed as changing the requirement of 
     section 1902(e)(4) that a child born in the United States to 
     an alien mother for whom medical assistance for the delivery 
     of such child is available as treatment of an emergency 
     medical condition pursuant to subsection (v) shall be deemed 
     eligible for medical assistance during the first year of such 
     child's life.''.
       (B) State requirement to issue separate identification 
     number.--Section 1902(e)(4) (42 U.S.C. 1396a(e)(4)) is 
     amended by adding at the end the following new sentence: 
     ``Notwithstanding the preceding sentence, in the case of a 
     child who is born in the United States to an alien mother for 
     whom medical assistance for the delivery of the child is made 
     available pursuant to section 1903(v), the State immediately 
     shall issue a separate identification number for the child 
     upon notification by the facility at which such delivery 
     occurred of the child's birth.''.
       (4) Technical amendments.--Section 1903(x)(2) (42 U.S.C. 
     1396b(x)) is amended--
       (A) in subparagraph (B)--
       (i) by realigning the left margin of the matter preceding 
     clause (i) 2 ems to the left; and
       (ii) by realigning the left margins of clauses (i) and 
     (ii), respectively, 2 ems to the left; and
       (B) in subparagraph (C)--
       (i) by realigning the left margin of the matter preceding 
     clause (i) 2 ems to the left; and
       (ii) by realigning the left margins of clauses (i) and 
     (ii), respectively, 2 ems to the left.
       (c) Application of Documentation System to CHIP.--
       (1) In general.--Section 2105(c) (42 U.S.C. 1397ee(c)), as 
     amended by section 110(a), is amended by adding at the end 
     the following new paragraph:
       ``(9) Citizenship documentation requirements.--
       ``(A) In general.--No payment may be made under this 
     section with respect to an individual who has, or is, 
     declared to be a citizen or national of the United States for 
     purposes of establishing eligibility under this title unless 
     the State meets the requirements of section 1902(a)(46)(B) 
     with respect to the individual.
       ``(B) Enhanced payments.--Notwithstanding subsection (b), 
     the enhanced FMAP with respect to payments under subsection 
     (a) for expenditures described in clause (i) or (ii) of 
     section 1903(a)(3)(F) necessary to comply with subparagraph 
     (A) shall in no event be less than 90 percent and 75 percent, 
     respectively.''.
       (2) Nonapplication of administrative expenditures cap.--
     Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)(C)), as amended 
     by section 202(b), is amended by adding at the end the 
     following:
       ``(iii) Expenditures to comply with citizenship or 
     nationality verification requirements.--Expenditures 
     necessary for the State to comply with paragraph (9)(A).''.
       (d) Effective Date.--
       (1) In general.--
       (A) In general.--Except as provided in subparagraph (B), 
     the amendments made by this section shall take effect on 
     October 1, 2008.
       (B) Technical amendments.--The amendments made by--
       (i) paragraphs (1), (2), and (3) of subsection (b) shall 
     take effect as if included in the enactment of section 6036 
     of the Deficit Reduction Act of 2005 (Public Law 109-171; 120 
     Stat. 80); and
       (ii) paragraph (4) of subsection (b) shall take effect as 
     if included in the enactment of section 405 of division B of 
     the Tax Relief and Health Care Act of 2006 (Public Law 109-
     432; 120 Stat. 2996).
       (2) Restoration of eligibility.--In the case of an 
     individual who, during the period that began on July 1, 2006, 
     and ends on October 1, 2008, was determined to be ineligible 
     for medical assistance under a State Medicaid plan, including 
     any waiver of such plan, solely as a result of the 
     application of subsections (i)(22) and (x) of section 1903 of 
     the Social Security Act (as in effect during such period), 
     but who would have been determined eligible for such 
     assistance if such subsections, as amended by subsection (b), 
     had applied to the individual, a State may deem the 
     individual to be eligible for such assistance as of the date 
     that the individual was determined to be ineligible for such 
     medical assistance on such basis.
       (3) Special transition rule for indians.--During the period 
     that begins on July 1, 2006, and ends on the effective date 
     of final regulations issued under subclause (II) of section 
     1903(x)(3)(B)(v) of the Social Security Act (42 U.S.C. 
     1396b(x)(3)(B)(v)) (as added by subsection (b)(1)(B)), an 
     individual who is a member of a federally-recognized Indian 
     tribe described in subclause (II) of that section who 
     presents a document described in subclause (I) of such 
     section that is issued by such Indian tribe, shall be deemed 
     to have presented satisfactory evidence of citizenship or 
     nationality for purposes of satisfying the requirement of 
     subsection (x) of section 1903 of such Act.

     SEC. 302. REDUCING ADMINISTRATIVE BARRIERS TO ENROLLMENT.

       Section 2102(b) (42 U.S.C. 1397bb(b)) is amended--
       (1) by redesignating paragraph (4) as paragraph (5); and
       (2) by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) Reduction of administrative barriers to enrollment.--
       ``(A) In general.--Subject to subparagraph (B), the plan 
     shall include a description of the procedures used to reduce 
     administrative barriers to the enrollment of children and 
     pregnant women who are eligible for medical assistance under 
     title XIX or for child health assistance or health benefits 
     coverage under this title. Such procedures shall be 
     established and revised as often as the State determines 
     appropriate to take into account the most recent information 
     available to the State identifying such barriers.
       ``(B) Deemed compliance if joint application and renewal 
     process that permits application other than in person.--A 
     State shall be deemed to comply with subparagraph (A) if the 
     State's application and renewal forms and supplemental forms 
     (if any) and information verification process is the same for 
     purposes of establishing and renewing eligibility for 
     children and pregnant women for medical assistance under 
     title XIX and child health assistance under this title, and 
     such process does not require an application to be made in 
     person or a face-to-face interview.''.

      TITLE IV--REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE

  Subtitle A--Additional State Option for Providing Premium Assistance

     SEC. 401. ADDITIONAL STATE OPTION FOR PROVIDING PREMIUM 
                   ASSISTANCE.

       (a) In General.--Section 2105(c) (42 U.S.C. 1397ee(c)), as 
     amended by section 301(c), is amended by adding at the end 
     the following:
       ``(10) State option to offer premium assistance.--
       ``(A) In general.--Subject to the succeeding provisions of 
     this paragraph, a State may elect to offer a premium 
     assistance subsidy (as defined in subparagraph (C)) for 
     qualified employer-sponsored coverage (as defined in 
     subparagraph (B)) to all targeted low-income children who are 
     eligible for child health assistance under the plan and have 
     access to such coverage in accordance with the requirements 
     of this paragraph.
       ``(B) Qualified employer-sponsored coverage.--
       ``(i) In general.--Subject to clauses (ii) and (iii), in 
     this paragraph, the term `qualified employer-sponsored 
     coverage' means a group health plan or health insurance 
     coverage offered through an employer--

       ``(I) that qualifies as creditable coverage as a group 
     health plan under section 2701(c)(1) of the Public Health 
     Service Act;
       ``(II) for which the employer contribution toward any 
     premium for such coverage is at least 40 percent; and
       ``(III) to all individuals in a manner that would be 
     considered a nondiscriminatory eligibility classification for 
     purposes of paragraph (3)(A)(ii) of section 105(h) of the 
     Internal Revenue Code of 1986 (but determined without regard 
     to clause (i) of subparagraph (B) of such paragraph).

       ``(ii) Exception.--Such term does not include coverage 
     consisting of--

       ``(I) benefits provided under a health flexible spending 
     arrangement (as defined in section 106(c)(2) of the Internal 
     Revenue Code of 1986); or
       ``(II) a high deductible health plan (as defined in section 
     223(c)(2) of such Code) purchased in conjunction with a 
     health savings account (as defined under section 223(d) of 
     such Code).

       ``(iii) Cost-effectiveness alternative to required employer 
     contribution.--A group health plan or health insurance 
     coverage offered through an employer that would be considered 
     qualified employer-sponsored coverage but for the application 
     of clause (i)(II) may be deemed to satisfy the requirement of 
     such clause if either of the following applies:

       ``(I) Application of child-based or family-based test.--The 
     State establishes to the satisfaction of the Secretary that 
     the cost of such coverage is less than the expenditures that 
     the State would have made to enroll the child or the family 
     (as applicable) in the State child health plan.
       ``(II) Aggregate program operational costs do not exceed 
     the cost of providing coverage under the state child health 
     plan.--If subclause (I) does not apply, the

[[Page S10966]]

     State establishes to the satisfaction of the Secretary that 
     the aggregate amount of expenditures by the State for the 
     purchase of all such coverage for targeted low-income 
     children under the State child health plan (including 
     administrative expenditures) does not exceed the aggregate 
     amount of expenditures that the State would have made for 
     providing coverage under the State child health plan for all 
     such children.

       ``(C) Premium assistance subsidy.--
       ``(i) In general.--In this paragraph, the term `premium 
     assistance subsidy' means, with respect to a targeted low-
     income child, the amount equal to the difference between the 
     employee contribution required for enrollment only of the 
     employee under qualified employer-sponsored coverage and the 
     employee contribution required for enrollment of the employee 
     and the child in such coverage, less any applicable premium 
     cost-sharing applied under the State child health plan 
     (subject to the limitations imposed under section 2103(e), 
     including the requirement to count the total amount of the 
     employee contribution required for enrollment of the employee 
     and the child in such coverage toward the annual aggregate 
     cost-sharing limit applied under paragraph (3)(B) of such 
     section).
       ``(ii) State payment option.--A State may provide a premium 
     assistance subsidy either as reimbursement to an employee for 
     out-of-pocket expenditures or, subject to clause (iii), 
     directly to the employee's employer.
       ``(iii) Employer opt-out.--An employer may notify a State 
     that it elects to opt-out of being directly paid a premium 
     assistance subsidy on behalf of an employee. In the event of 
     such a notification, an employer shall withhold the total 
     amount of the employee contribution required for enrollment 
     of the employee and the child in the qualified employer-
     sponsored coverage and the State shall pay the premium 
     assistance subsidy directly to the employee.
       ``(iv) Treatment as child health assistance.--Expenditures 
     for the provision of premium assistance subsidies shall be 
     considered child health assistance described in paragraph 
     (1)(C) of subsection (a) for purposes of making payments 
     under that subsection.
       ``(D) Application of secondary payor rules.--The State 
     shall be a secondary payor for any items or services provided 
     under the qualified employer-sponsored coverage for which the 
     State provides child health assistance under the State child 
     health plan.
       ``(E) Requirement to provide supplemental coverage for 
     benefits and cost-sharing protection provided under the state 
     child health plan.--
       ``(i) In general.--Notwithstanding section 2110(b)(1)(C), 
     the State shall provide for each targeted low-income child 
     enrolled in qualified employer-sponsored coverage, 
     supplemental coverage consisting of--

       ``(I) items or services that are not covered, or are only 
     partially covered, under the qualified employer-sponsored 
     coverage; and
       ``(II) cost-sharing protection consistent with section 
     2103(e).

       ``(ii) Record keeping requirements.--For purposes of 
     carrying out clause (i), a State may elect to directly pay 
     out-of-pocket expenditures for cost-sharing imposed under the 
     qualified employer-sponsored coverage and collect or not 
     collect all or any portion of such expenditures from the 
     parent of the child.
       ``(F) Application of waiting period imposed under the 
     state.--Any waiting period imposed under the State child 
     health plan prior to the provision of child health assistance 
     to a targeted low-income child under the State plan shall 
     apply to the same extent to the provision of a premium 
     assistance subsidy for the child under this paragraph.
       ``(G) Opt-out permitted for any month.--A State shall 
     establish a process for permitting the parent of a targeted 
     low-income child receiving a premium assistance subsidy to 
     disenroll the child from the qualified employer-sponsored 
     coverage and enroll the child in, and receive child health 
     assistance under, the State child health plan, effective on 
     the first day of any month for which the child is eligible 
     for such assistance and in a manner that ensures continuity 
     of coverage for the child.
       ``(H) Application to parents.--If a State provides child 
     health assistance or health benefits coverage to parents of a 
     targeted low-income child in accordance with section 2111(b), 
     the State may elect to offer a premium assistance subsidy to 
     a parent of a targeted low-income child who is eligible for 
     such a subsidy under this paragraph in the same manner as the 
     State offers such a subsidy for the enrollment of the child 
     in qualified employer-sponsored coverage, except that--
       ``(i) the amount of the premium assistance subsidy shall be 
     increased to take into account the cost of the enrollment of 
     the parent in the qualified employer-sponsored coverage or, 
     at the option of the State if the State determines it cost-
     effective, the cost of the enrollment of the child's family 
     in such coverage; and
       ``(ii) any reference in this paragraph to a child is deemed 
     to include a reference to the parent or, if applicable under 
     clause (i), the family of the child.
       ``(I) Additional state option for providing premium 
     assistance.--
       ``(i) In general.--A State may establish an employer-family 
     premium assistance purchasing pool for employers with less 
     than 250 employees who have at least 1 employee who is a 
     pregnant woman eligible for assistance under the State child 
     health plan (including through the application of an option 
     described in section 2112(f)) or a member of a family with at 
     least 1 targeted low-income child and to provide a premium 
     assistance subsidy under this paragraph for enrollment in 
     coverage made available through such pool.
       ``(ii) Access to choice of coverage.--A State that elects 
     the option under clause (i) shall identify and offer access 
     to not less than 2 private health plans that are health 
     benefits coverage that is equivalent to the benefits coverage 
     in a benchmark benefit package described in section 2103(b) 
     or benchmark-equivalent coverage that meets the requirements 
     of section 2103(a)(2) for employees described in clause (i).
       ``(J) No effect on premium assistance waiver programs.--
     Nothing in this paragraph shall be construed as limiting the 
     authority of a State to offer premium assistance under 
     section 1906, a waiver described in paragraph (2)(B) or (3), 
     a waiver approved under section 1115, or other authority in 
     effect prior to the date of enactment of the Children's 
     Health Insurance Program Reauthorization Act of 2007.
       ``(K) Notice of availability.--If a State elects to provide 
     premium assistance subsidies in accordance with this 
     paragraph, the State shall--
       ``(i) include on any application or enrollment form for 
     child health assistance a notice of the availability of 
     premium assistance subsidies for the enrollment of targeted 
     low-income children in qualified employer-sponsored coverage;
       ``(ii) provide, as part of the application and enrollment 
     process under the State child health plan, information 
     describing the availability of such subsidies and how to 
     elect to obtain such a subsidy; and
       ``(iii) establish such other procedures as the State 
     determines necessary to ensure that parents are fully 
     informed of the choices for receiving child health assistance 
     under the State child health plan or through the receipt of 
     premium assistance subsidies.
       ``(L) Application to qualified employer-sponsored benchmark 
     coverage.--If a group health plan or health insurance 
     coverage offered through an employer is certified by an 
     actuary as health benefits coverage that is equivalent to the 
     benefits coverage in a benchmark benefit package described in 
     section 2103(b) or benchmark-equivalent coverage that meets 
     the requirements of section 2103(a)(2), the State may provide 
     premium assistance subsidies for enrollment of targeted low-
     income children in such group health plan or health insurance 
     coverage in the same manner as such subsidies are provided 
     under this paragraph for enrollment in qualified employer-
     sponsored coverage, but without regard to the requirement to 
     provide supplemental coverage for benefits and cost-sharing 
     protection provided under the State child health plan under 
     subparagraph (E).''.
       (b) Application to Medicaid.--Section 1906 (42 U.S.C. 
     1396e) is amended by inserting after subsection (c) the 
     following:
       ``(d) A State may elect to offer a premium assistance 
     subsidy (as defined in section 2105(c)(10)(C)) for qualified 
     employer-sponsored coverage (as defined in section 
     2105(c)(10)(B)) to a child who is eligible for medical 
     assistance under the State plan under this title, to the 
     parent of such a child, and to a pregnant woman, in the same 
     manner as such a subsidy for such coverage may be offered 
     under a State child health plan under title XXI in accordance 
     with section 2105(c)(10) (except that subparagraph (E)(i)(II) 
     of such section shall be applied by substituting `1916 or, if 
     applicable, 1916A' for `2103(e)').''.
       (c) GAO Study and Report.--Not later than January 1, 2009, 
     the Comptroller General of the United States shall study cost 
     and coverage issues relating to any State premium assistance 
     programs for which Federal matching payments are made under 
     title XIX or XXI of the Social Security Act, including under 
     waiver authority, and shall submit a report to the 
     appropriate committees of Congress on the results of such 
     study.

     SEC. 402. OUTREACH, EDUCATION, AND ENROLLMENT ASSISTANCE.

       (a) Requirement To Include Description of Outreach, 
     Education, and Enrollment Efforts Related to Premium 
     Assistance Subsidies in State Child Health Plan.--Section 
     2102(c) (42 U.S.C. 1397bb(c)) is amended by adding at the end 
     the following new paragraph:
       ``(3) Premium assistance subsidies.--Outreach, education, 
     and enrollment assistance for families of children likely to 
     be eligible for premium assistance subsidies under the State 
     child health plan in accordance with paragraphs (2)(B), (3), 
     or (10) of section 2105(c), or a waiver approved under 
     section 1115, to inform such families of the availability of, 
     and to assist them in enrolling their children in, such 
     subsidies, and for employers likely to provide coverage that 
     is eligible for such subsidies, including the specific, 
     significant resources the State intends to apply to educate 
     employers about the availability of premium assistance 
     subsidies under the State child health plan.''.
       (b) Nonapplication of 10 Percent Limit on Outreach and 
     Certain Other Expenditures.--Section 2105(c)(2)(C) (42 U.S.C. 
     1397ee(c)(2)(C)), as amended by section 301(c)(2), is amended 
     by adding at the end the following new clause:
       ``(iv) Expenditures for outreach to increase the enrollment 
     of children under this title and title xix through premium

[[Page S10967]]

     assistance subsidies.--Expenditures for outreach activities 
     to families of children likely to be eligible for premium 
     assistance subsidies in accordance with paragraphs (2)(B), 
     (3), or (10), or a waiver approved under section 1115, to 
     inform such families of the availability of, and to assist 
     them in enrolling their children in, such subsidies, and to 
     employers likely to provide qualified employer-sponsored 
     coverage (as defined in subparagraph (B) of such 
     paragraph).''.

   Subtitle B--Coordinating Premium Assistance With Private Coverage

     SEC. 411. SPECIAL ENROLLMENT PERIOD UNDER GROUP HEALTH PLANS 
                   IN CASE OF TERMINATION OF MEDICAID OR CHIP 
                   COVERAGE OR ELIGIBILITY FOR ASSISTANCE IN 
                   PURCHASE OF EMPLOYMENT-BASED COVERAGE; 
                   COORDINATION OF COVERAGE.

       (a) Amendments to Internal Revenue Code of 1986.--Section 
     9801(f) of the Internal Revenue Code of 1986 (relating to 
     special enrollment periods) is amended by adding at the end 
     the following new paragraph:
       ``(3) Special rules relating to medicaid and chip.--
       ``(A) In general.--A group health plan shall permit an 
     employee who is eligible, but not enrolled, for coverage 
     under the terms of the plan (or a dependent of such an 
     employee if the dependent is eligible, but not enrolled, for 
     coverage under such terms) to enroll for coverage under the 
     terms of the plan if either of the following conditions is 
     met:
       ``(i) Termination of medicaid or chip coverage.--The 
     employee or dependent is covered under a Medicaid plan under 
     title XIX of the Social Security Act or under a State child 
     health plan under title XXI of such Act and coverage of the 
     employee or dependent under such a plan is terminated as a 
     result of loss of eligibility for such coverage and the 
     employee requests coverage under the group health plan not 
     later than 60 days after the date of termination of such 
     coverage.
       ``(ii) Eligibility for employment assistance under medicaid 
     or chip.--The employee or dependent becomes eligible for 
     assistance, with respect to coverage under the group health 
     plan under such Medicaid plan or State child health plan 
     (including under any waiver or demonstration project 
     conducted under or in relation to such a plan), if the 
     employee requests coverage under the group health plan not 
     later than 60 days after the date the employee or dependent 
     is determined to be eligible for such assistance.
       ``(B) Employee outreach and disclosure.--
       ``(i) Outreach to employees regarding availability of 
     medicaid and chip coverage.--

       ``(I) In general.--Each employer that maintains a group 
     health plan in a State that provides medical assistance under 
     a State Medicaid plan under title XIX of the Social Security 
     Act, or child health assistance under a State child health 
     plan under title XXI of such Act, in the form of premium 
     assistance for the purchase of coverage under a group health 
     plan, shall provide to each employee a written notice 
     informing the employee of potential opportunities then 
     currently available in the State in which the employee 
     resides for premium assistance under such plans for health 
     coverage of the employee or the employee's dependents. For 
     purposes of compliance with this clause, the employer may use 
     any State-specific model notice developed in accordance with 
     section 701(f)(3)(B)(i)(II) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1181(f)(3)(B)(i)(II)).
       ``(II) Option to provide concurrent with provision of 
     summary plan description.--An employer may provide the model 
     notice applicable to the State in which an employee resides 
     concurrent with the furnishing of the summary plan 
     description as provided in section 104(b) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1024).

       ``(ii) Disclosure about group health plan benefits to 
     states for medicaid and chip eligible individuals.--In the 
     case of a participant or beneficiary of a group health plan 
     who is covered under a Medicaid plan of a State under title 
     XIX of the Social Security Act or under a State child health 
     plan under title XXI of such Act, the plan administrator of 
     the group health plan shall disclose to the State, upon 
     request, information about the benefits available under the 
     group health plan in sufficient specificity, as determined 
     under regulations of the Secretary of Health and Human 
     Services in consultation with the Secretary that require use 
     of the model coverage coordination disclosure form developed 
     under section 411(b)(1)(C) of the Children's Health Insurance 
     Program Reauthorization Act of 2007, so as to permit the 
     State to make a determination (under paragraph (2)(B), (3), 
     or (10) of section 2105(c) of the Social Security Act or 
     otherwise) concerning the cost-effectiveness of the State 
     providing medical or child health assistance through premium 
     assistance for the purchase of coverage under such group 
     health plan and in order for the State to provide 
     supplemental benefits required under paragraph (10)(E) of 
     such section or other authority.''.
       (b) Conforming Amendments.--
       (1) Amendments to employee retirement income security 
     act.--
       (A) In general.--Section 701(f) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1181(f)) is amended by 
     adding at the end the following new paragraph:
       ``(3) Special rules for application in case of medicaid and 
     chip.--
       ``(A) In general.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage in 
     connection with a group health plan, shall permit an employee 
     who is eligible, but not enrolled, for coverage under the 
     terms of the plan (or a dependent of such an employee if the 
     dependent is eligible, but not enrolled, for coverage under 
     such terms) to enroll for coverage under the terms of the 
     plan if either of the following conditions is met:
       ``(i) Termination of medicaid or chip coverage.--The 
     employee or dependent is covered under a Medicaid plan under 
     title XIX of the Social Security Act or under a State child 
     health plan under title XXI of such Act and coverage of the 
     employee or dependent under such a plan is terminated as a 
     result of loss of eligibility for such coverage and the 
     employee requests coverage under the group health plan (or 
     health insurance coverage) not later than 60 days after the 
     date of termination of such coverage.
       ``(ii) Eligibility for employment assistance under medicaid 
     or chip.--The employee or dependent becomes eligible for 
     assistance, with respect to coverage under the group health 
     plan or health insurance coverage, under such Medicaid plan 
     or State child health plan (including under any waiver or 
     demonstration project conducted under or in relation to such 
     a plan), if the employee requests coverage under the group 
     health plan or health insurance coverage not later than 60 
     days after the date the employee or dependent is determined 
     to be eligible for such assistance.
       ``(B) Coordination with medicaid and chip.--
       ``(i) Outreach to employees regarding availability of 
     medicaid and chip coverage.--

       ``(I) In general.--Each employer that maintains a group 
     health plan in a State that provides medical assistance under 
     a State Medicaid plan under title XIX of the Social Security 
     Act, or child health assistance under a State child health 
     plan under title XXI of such Act, in the form of premium 
     assistance for the purchase of coverage under a group health 
     plan, shall provide to each employee a written notice 
     informing the employee of potential opportunities then 
     currently available in the State in which the employee 
     resides for premium assistance under such plans for health 
     coverage of the employee or the employee's dependents.
       ``(II) Model notice.--Not later than 1 year after the date 
     of enactment of the Children's Health Insurance Program 
     Reauthorization Act of 2007, the Secretary and the Secretary 
     of Health and Human Services, in consultation with Directors 
     of State Medicaid agencies under title XIX of the Social 
     Security Act and Directors of State CHIP agencies under title 
     XXI of such Act, shall jointly develop national and State-
     specific model notices for purposes of subparagraph (A). The 
     Secretary shall provide employers with such model notices so 
     as to enable employers to timely comply with the requirements 
     of subparagraph (A). Such model notices shall include 
     information regarding how an employee may contact the State 
     in which the employee resides for additional information 
     regarding potential opportunities for such premium 
     assistance, including how to apply for such assistance.
       ``(III) Option to provide concurrent with provision of 
     summary plan description.--An employer may provide the model 
     notice applicable to the State in which an employee resides 
     concurrent with the furnishing of the summary plan 
     description as provided in section 104(b).

       ``(ii) Disclosure about group health plan benefits to 
     states for medicaid and chip eligible individuals.--In the 
     case of a participant or beneficiary of a group health plan 
     who is covered under a Medicaid plan of a State under title 
     XIX of the Social Security Act or under a State child health 
     plan under title XXI of such Act, the plan administrator of 
     the group health plan shall disclose to the State, upon 
     request, information about the benefits available under the 
     group health plan in sufficient specificity, as determined 
     under regulations of the Secretary of Health and Human 
     Services in consultation with the Secretary that require use 
     of the model coverage coordination disclosure form developed 
     under section 411(b)(1)(C) of the Children's Health Insurance 
     Program Reauthorization Act of 2007, so as to permit the 
     State to make a determination (under paragraph (2)(B), (3), 
     or (10) of section 2105(c) of the Social Security Act or 
     otherwise) concerning the cost-effectiveness of the State 
     providing medical or child health assistance through premium 
     assistance for the purchase of coverage under such group 
     health plan and in order for the State to provide 
     supplemental benefits required under paragraph (10)(E) of 
     such section or other authority.''.
       (B) Conforming amendment.--Section 102(b) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1022(b)) is 
     amended--
       (i) by striking ``and the remedies'' and inserting ``, the 
     remedies''; and
       (ii) by inserting before the period the following: ``, and 
     if the employer so elects for purposes of complying with 
     section 701(f)(3)(B)(i), the model notice applicable to the 
     State in which the participants and beneficiaries reside''.
       (C) Working group to develop model coverage coordination 
     disclosure form.--
       (i) Medicaid, chip, and employer-sponsored coverage 
     coordination working group.--

       (I) In general.--Not later than 60 days after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services and the Secretary of Labor shall jointly establish a 
     Medicaid, CHIP, and Employer-Sponsored Coverage Coordination 
     Working Group (in this subparagraph referred to as the 
     ``Working Group''). The purpose of the Working Group shall be 
     to develop the model coverage coordination disclosure form 
     described in subclause (II) and to identify the impediments 
     to the effective coordination of coverage available to 
     families that include employees of employers that maintain 
     group health

[[Page S10968]]

     plans and members who are eligible for medical assistance 
     under title XIX of the Social Security Act or child health 
     assistance or other health benefits coverage under title XXI 
     of such Act.
       (II) Model coverage coordination disclosure form 
     described.--The model form described in this subclause is a 
     form for plan administrators of group health plans to 
     complete for purposes of permitting a State to determine the 
     availability and cost-effectiveness of the coverage available 
     under such plans to employees who have family members who are 
     eligible for premium assistance offered under a State plan 
     under title XIX or XXI of such Act and to allow for 
     coordination of coverage for enrollees of such plans. Such 
     form shall provide the following information in addition to 
     such other information as the Working Group determines 
     appropriate:

       (aa) A determination of whether the employee is eligible 
     for coverage under the group health plan.
       (bb) The name and contract information of the plan 
     administrator of the group health plan.
       (cc) The benefits offered under the plan.
       (dd) The premiums and cost-sharing required under the plan.
       (ee) Any other information relevant to coverage under the 
     plan.
       (ii) Membership.--The Working Group shall consist of not 
     more than 30 members and shall be composed of representatives 
     of--

       (I) the Department of Labor;
       (II) the Department of Health and Human Services;
       (III) State directors of the Medicaid program under title 
     XIX of the Social Security Act;
       (IV) State directors of the State Children's Health 
     Insurance Program under title XXI of the Social Security Act;
       (V) employers, including owners of small businesses and 
     their trade or industry representatives and certified human 
     resource and payroll professionals;
       (VI) plan administrators and plan sponsors of group health 
     plans (as defined in section 607(1) of the Employee 
     Retirement Income Security Act of 1974);
       (VII) health insurance issuers; and
       (VIII) children and other beneficiaries of medical 
     assistance under title XIX of the Social Security Act or 
     child health assistance or other health benefits coverage 
     under title XXI of such Act.

       (iii) Compensation.--The members of the Working Group shall 
     serve without compensation.
       (iv) Administrative support.--The Department of Health and 
     Human Services and the Department of Labor shall jointly 
     provide appropriate administrative support to the Working 
     Group, including technical assistance. The Working Group may 
     use the services and facilities of either such Department, 
     with or without reimbursement, as jointly determined by such 
     Departments.
       (v) Report.--

       (I) Report by working group to the secretaries.--Not later 
     than 18 months after the date of the enactment of this Act, 
     the Working Group shall submit to the Secretary of Labor and 
     the Secretary of Health and Human Services the model form 
     described in clause (i)(II) along with a report containing 
     recommendations for appropriate measures to address the 
     impediments to the effective coordination of coverage between 
     group health plans and the State plans under titles XIX and 
     XXI of the Social Security Act.
       (II) Report by secretaries to the congress.--Not later than 
     2 months after receipt of the report pursuant to subclause 
     (I), the Secretaries shall jointly submit a report to each 
     House of the Congress regarding the recommendations contained 
     in the report under such subclause.

       (vi) Termination.--The Working Group shall terminate 30 
     days after the date of the issuance of its report under 
     clause (v).
       (D) Effective dates.--The Secretary of Labor and the 
     Secretary of Health and Human Services shall develop the 
     initial model notices under section 701(f)(3)(B)(i)(II) of 
     the Employee Retirement Income Security Act of 1974, and the 
     Secretary of Labor shall provide such notices to employers, 
     not later than the date that is 1 year after the date of 
     enactment of this Act, and each employer shall provide the 
     initial annual notices to such employer's employees beginning 
     with the first plan year that begins after the date on which 
     such initial model notices are first issued. The model 
     coverage coordination disclosure form developed under 
     subparagraph (C) shall apply with respect to requests made by 
     States beginning with the first plan year that begins after 
     the date on which such model coverage coordination disclosure 
     form is first issued.
       (E) Enforcement.--Section 502 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1132) is amended--
       (i) in subsection (a)(6), by striking ``or (8)'' and 
     inserting ``(8), or (9)''; and
       (ii) in subsection (c), by redesignating paragraph (9) as 
     paragraph (10), and by inserting after paragraph (8) the 
     following:
       ``(9)(A) The Secretary may assess a civil penalty against 
     any employer of up to $100 a day from the date of the 
     employer's failure to meet the notice requirement of section 
     701(f)(3)(B)(i)(I). For purposes of this subparagraph, each 
     violation with respect to any single employee shall be 
     treated as a separate violation.
       ``(B) The Secretary may assess a civil penalty against any 
     plan administrator of up to $100 a day from the date of the 
     plan administrator's failure to timely provide to any State 
     the information required to be disclosed under section 
     701(f)(3)(B)(ii). For purposes of this subparagraph, each 
     violation with respect to any single participant or 
     beneficiary shall be treated as a separate violation.''.
       (2) Amendments to public health service act.--Section 
     2701(f) of the Public Health Service Act (42 U.S.C. 300gg(f)) 
     is amended by adding at the end the following new paragraph:
       ``(3) Special rules for application in case of medicaid and 
     chip.--
       ``(A) In general.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage in 
     connection with a group health plan, shall permit an employee 
     who is eligible, but not enrolled, for coverage under the 
     terms of the plan (or a dependent of such an employee if the 
     dependent is eligible, but not enrolled, for coverage under 
     such terms) to enroll for coverage under the terms of the 
     plan if either of the following conditions is met:
       ``(i) Termination of medicaid or chip coverage.--The 
     employee or dependent is covered under a Medicaid plan under 
     title XIX of the Social Security Act or under a State child 
     health plan under title XXI of such Act and coverage of the 
     employee or dependent under such a plan is terminated as a 
     result of loss of eligibility for such coverage and the 
     employee requests coverage under the group health plan (or 
     health insurance coverage) not later than 60 days after the 
     date of termination of such coverage.
       ``(ii) Eligibility for employment assistance under medicaid 
     or chip.--The employee or dependent becomes eligible for 
     assistance, with respect to coverage under the group health 
     plan or health insurance coverage, under such Medicaid plan 
     or State child health plan (including under any waiver or 
     demonstration project conducted under or in relation to such 
     a plan), if the employee requests coverage under the group 
     health plan or health insurance coverage not later than 60 
     days after the date the employee or dependent is determined 
     to be eligible for such assistance.
       ``(B) Coordination with medicaid and chip.--
       ``(i) Outreach to employees regarding availability of 
     medicaid and chip coverage.--

       ``(I) In general.--Each employer that maintains a group 
     health plan in a State that provides medical assistance under 
     a State Medicaid plan under title XIX of the Social Security 
     Act, or child health assistance under a State child health 
     plan under title XXI of such Act, in the form of premium 
     assistance for the purchase of coverage under a group health 
     plan, shall provide to each employee a written notice 
     informing the employee of potential opportunities then 
     currently available in the State in which the employee 
     resides for premium assistance under such plans for health 
     coverage of the employee or the employee's dependents. For 
     purposes of compliance with this subclause, the employer may 
     use any State-specific model notice developed in accordance 
     with section 701(f)(3)(B)(i)(II) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1181(f)(3)(B)(i)(II)).
       ``(II) Option to provide concurrent with provision of 
     summary plan description.--An employer may provide the model 
     notice applicable to the State in which an employee resides 
     concurrent with the furnishing of the summary plan 
     description as provided in section 104(b) of the Employee 
     Retirement Income Security Act of 1974.

       ``(ii) Disclosure about group health plan benefits to 
     states for medicaid and chip eligible individuals.--In the 
     case of an enrollee in a group health plan who is covered 
     under a Medicaid plan of a State under title XIX of the 
     Social Security Act or under a State child health plan under 
     title XXI of such Act, the plan administrator of the group 
     health plan shall disclose to the State, upon request, 
     information about the benefits available under the group 
     health plan in sufficient specificity, as determined under 
     regulations of the Secretary of Health and Human Services in 
     consultation with the Secretary that require use of the model 
     coverage coordination disclosure form developed under section 
     411(b)(1)(C) of the Children's Health Insurance 
     Reauthorization Act of 2007, so as to permit the State to 
     make a determination (under paragraph (2)(B), (3), or (10) of 
     section 2105(c) of the Social Security Act or otherwise) 
     concerning the cost-effectiveness of the State providing 
     medical or child health assistance through premium assistance 
     for the purchase of coverage under such group health plan and 
     in order for the State to provide supplemental benefits 
     required under paragraph (10)(E) of such section or other 
     authority.''.

 TITLE V--STRENGTHENING QUALITY OF CARE AND HEALTH OUTCOMES OF CHILDREN

     SEC. 501. CHILD HEALTH QUALITY IMPROVEMENT ACTIVITIES FOR 
                   CHILDREN ENROLLED IN MEDICAID OR CHIP.

       (a) Development of Child Health Quality Measures for 
     Children Enrolled in Medicaid or Chip.--Title XI (42 U.S.C. 
     1301 et seq.) is amended by inserting after section 1139 the 
     following new section:

     ``SEC. 1139A. CHILD HEALTH QUALITY MEASURES.

       ``(a) Development of an Initial Core Set of Health Care 
     Quality Measures for Children Enrolled in Medicaid or Chip.--
       ``(1) In general.--Not later than January 1, 2009, the 
     Secretary shall identify and publish for general comment an 
     initial, recommended core set of child health quality 
     measures for use by State programs administered under titles 
     XIX and XXI, health insurance issuers and managed care 
     entities that enter into contracts with such programs, and 
     providers of items and services under such programs.
       ``(2) Identification of initial core measures.--In 
     consultation with the individuals and entities described in 
     subsection (b)(3), the Secretary shall identify existing 
     quality of care measures for children that are in use under 
     public and privately sponsored health care coverage 
     arrangements, or that are part of reporting systems that 
     measure both the presence and duration of health insurance 
     coverage over time.

[[Page S10969]]

       ``(3) Recommendations and dissemination.--Based on such 
     existing and identified measures, the Secretary shall publish 
     an initial core set of child health quality measures that 
     includes (but is not limited to) the following:
       ``(A) The duration of children's health insurance coverage 
     over a 12-month time period.
       ``(B) The availability of a full range of--
       ``(i) preventive services, treatments, and services for 
     acute conditions, including services to promote healthy birth 
     and prevent and treat premature birth; and
       ``(ii) treatments to correct or ameliorate the effects of 
     chronic physical and mental conditions in infants, young 
     children, school-age children, and adolescents.
       ``(C) The availability of care in a range of ambulatory and 
     inpatient health care settings in which such care is 
     furnished.
       ``(D) The types of measures that, taken together, can be 
     used to estimate the overall national quality of health care 
     for children and to perform comparative analyses of pediatric 
     health care quality and racial, ethnic, and socioeconomic 
     disparities in child health and health care for children.
       ``(4) Encourage voluntary and standardized reporting.--Not 
     later than 2 years after the date of enactment of the 
     Children's Health Insurance Program Reauthorization Act of 
     2007, the Secretary, in consultation with States, shall 
     develop a standardized format for reporting information and 
     procedures and approaches that encourage States to use the 
     initial core measurement set to voluntarily report 
     information regarding the quality of pediatric health care 
     under titles XIX and XXI.
       ``(5) Adoption of best practices in implementing quality 
     programs.--The Secretary shall disseminate information to 
     States regarding best practices among States with respect to 
     measuring and reporting on the quality of health care for 
     children, and shall facilitate the adoption of such best 
     practices. In developing best practices approaches, the 
     Secretary shall give particular attention to State 
     measurement techniques that ensure the timeliness and 
     accuracy of provider reporting, encourage provider reporting 
     compliance, encourage successful quality improvement 
     strategies, and improve efficiency in data collection using 
     health information technology.
       ``(6) Reports to congress.--Not later than January 1, 2010, 
     and every 3 years thereafter, the Secretary shall report to 
     Congress on--
       ``(A) the status of the Secretary's efforts to improve--
       ``(i) quality related to the duration and stability of 
     health insurance coverage for children under titles XIX and 
     XXI;
       ``(ii) the quality of children's health care under such 
     titles, including preventive health services, health care for 
     acute conditions, chronic health care, and health services to 
     ameliorate the effects of physical and mental conditions and 
     to aid in growth and development of infants, young children, 
     school-age children, and adolescents with special health care 
     needs; and
       ``(iii) the quality of children's health care under such 
     titles across the domains of quality, including clinical 
     quality, health care safety, family experience with health 
     care, health care in the most integrated setting, and 
     elimination of racial, ethnic, and socioeconomic disparities 
     in health and health care;
       ``(B) the status of voluntary reporting by States under 
     titles XIX and XXI, utilizing the initial core quality 
     measurement set; and
       ``(C) any recommendations for legislative changes needed to 
     improve the quality of care provided to children under titles 
     XIX and XXI, including recommendations for quality reporting 
     by States.
       ``(7) Technical assistance.--The Secretary shall provide 
     technical assistance to States to assist them in adopting and 
     utilizing core child health quality measures in administering 
     the State plans under titles XIX and XXI.
       ``(8) Definition of core set.--In this section, the term 
     `core set' means a group of valid, reliable, and evidence-
     based quality measures that, taken together--
       ``(A) provide information regarding the quality of health 
     coverage and health care for children;
       ``(B) address the needs of children throughout the 
     developmental age span; and
       ``(C) allow purchasers, families, and health care providers 
     to understand the quality of care in relation to the 
     preventive needs of children, treatments aimed at managing 
     and resolving acute conditions, and diagnostic and treatment 
     services whose purpose is to correct or ameliorate physical, 
     mental, or developmental conditions that could, if untreated 
     or poorly treated, become chronic.
       ``(b) Advancing and Improving Pediatric Quality Measures.--
       ``(1) Establishment of pediatric quality measures 
     program.--Not later than January 1, 2010, the Secretary shall 
     establish a pediatric quality measures program to--
       ``(A) improve and strengthen the initial core child health 
     care quality measures established by the Secretary under 
     subsection (a);
       ``(B) expand on existing pediatric quality measures used by 
     public and private health care purchasers and advance the 
     development of such new and emerging quality measures; and
       ``(C) increase the portfolio of evidence-based, consensus 
     pediatric quality measures available to public and private 
     purchasers of children's health care services, providers, and 
     consumers.
       ``(2) Evidence-based measures.--The measures developed 
     under the pediatric quality measures program shall, at a 
     minimum, be--
       ``(A) evidence-based and, where appropriate, risk adjusted;
       ``(B) designed to identify and eliminate racial and ethnic 
     disparities in child health and the provision of health care;
       ``(C) designed to ensure that the data required for such 
     measures is collected and reported in a standard format that 
     permits comparison of quality and data at a State, plan, and 
     provider level;
       ``(D) periodically updated; and
       ``(E) responsive to the child health needs, services, and 
     domains of health care quality described in clauses (i), 
     (ii), and (iii) of subsection (a)(6)(A).
       ``(3) Process for pediatric quality measures program.--In 
     identifying gaps in existing pediatric quality measures and 
     establishing priorities for development and advancement of 
     such measures, the Secretary shall consult with--
       ``(A) States;
       ``(B) pediatricians, children's hospitals, and other 
     primary and specialized pediatric health care professionals 
     (including members of the allied health professions) who 
     specialize in the care and treatment of children, 
     particularly children with special physical, mental, and 
     developmental health care needs;
       ``(C) dental professionals, including pediatric dental 
     professionals;
       ``(D) health care providers that furnish primary health 
     care to children and families who live in urban and rural 
     medically underserved communities or who are members of 
     distinct population sub-groups at heightened risk for poor 
     health outcomes;
       ``(E) national organizations representing consumers and 
     purchasers of children's health care;
       ``(F) national organizations and individuals with expertise 
     in pediatric health quality measurement; and
       ``(G) voluntary consensus standards setting organizations 
     and other organizations involved in the advancement of 
     evidence-based measures of health care.
       ``(4) Developing, validating, and testing a portfolio of 
     pediatric quality measures.--As part of the program to 
     advance pediatric quality measures, the Secretary shall--
       ``(A) award grants and contracts for the development, 
     testing, and validation of new, emerging, and innovative 
     evidence-based measures for children's health care services 
     across the domains of quality described in clauses (i), (ii), 
     and (iii) of subsection (a)(6)(A); and
       ``(B) award grants and contracts for--
       ``(i) the development of consensus on evidence-based 
     measures for children's health care services;
       ``(ii) the dissemination of such measures to public and 
     private purchasers of health care for children; and
       ``(iii) the updating of such measures as necessary.
       ``(5) Revising, strengthening, and improving initial core 
     measures.--Beginning no later than January 1, 2012, and 
     annually thereafter, the Secretary shall publish recommended 
     changes to the core measures described in subsection (a) that 
     shall reflect the testing, validation, and consensus process 
     for the development of pediatric quality measures described 
     in subsection paragraphs (1) through (4).
       ``(6) Definition of pediatric quality measure.--In this 
     subsection, the term `pediatric quality measure' means a 
     measurement of clinical care that is capable of being 
     examined through the collection and analysis of relevant 
     information, that is developed in order to assess 1 or more 
     aspects of pediatric health care quality in various 
     institutional and ambulatory health care settings, including 
     the structure of the clinical care system, the process of 
     care, the outcome of care, or patient experiences in care.
       ``(c) Annual State Reports Regarding State-Specific Quality 
     of Care Measures Applied Under Medicaid or Chip.--
       ``(1) Annual state reports.--Each State with a State plan 
     approved under title XIX or a State child health plan 
     approved under title XXI shall annually report to the 
     Secretary on the--
       ``(A) State-specific child health quality measures applied 
     by the States under such plans, including measures described 
     in subparagraphs (A) and (B) of subsection (a)(6); and
       ``(B) State-specific information on the quality of health 
     care furnished to children under such plans, including 
     information collected through external quality reviews of 
     managed care organizations under section 1932 of the Social 
     Security Act (42 U.S.C. 1396u-4) and benchmark plans under 
     sections 1937 and 2103 of such Act (42 U.S.C. 1396u-7, 
     1397cc).
       ``(2) Publication.--Not later than September 30, 2009, and 
     annually thereafter, the Secretary shall collect, analyze, 
     and make publicly available the information reported by 
     States under paragraph (1).
       ``(d) Demonstration Projects for Improving the Quality of 
     Children's Health Care and the Use of Health Information 
     Technology.--
       ``(1) In general.--During the period of fiscal years 2008 
     through 2012, the Secretary shall award not more than 10 
     grants to States and child health providers to conduct 
     demonstration projects to evaluate promising ideas for 
     improving the quality of children's health care provided 
     under title XIX or XXI, including projects to--
       ``(A) experiment with, and evaluate the use of, new 
     measures of the quality of children's health care under such 
     titles (including testing the validity and suitability for 
     reporting of such measures);
       ``(B) promote the use of health information technology in 
     care delivery for children under such titles;
       ``(C) evaluate provider-based models which improve the 
     delivery of children's health care services under such 
     titles, including care management for children with chronic 
     conditions and the use of evidence-based approaches to 
     improve the effectiveness, safety, and efficiency of health 
     care services for children; or

[[Page S10970]]

       ``(D) demonstrate the impact of the model electronic health 
     record format for children developed and disseminated under 
     subsection (f) on improving pediatric health, including the 
     effects of chronic childhood health conditions, and pediatric 
     health care quality as well as reducing health care costs.
       ``(2) Requirements.--In awarding grants under this 
     subsection, the Secretary shall ensure that--
       ``(A) only 1 demonstration project funded under a grant 
     awarded under this subsection shall be conducted in a State; 
     and
       ``(B) demonstration projects funded under grants awarded 
     under this subsection shall be conducted evenly between 
     States with large urban areas and States with large rural 
     areas.
       ``(3) Authority for multistate projects.--A demonstration 
     project conducted with a grant awarded under this subsection 
     may be conducted on a multistate basis, as needed.
       ``(4) Funding.--$20,000,000 of the amount appropriated 
     under subsection (i) for a fiscal year shall be used to carry 
     out this subsection.
       ``(e) Childhood Obesity Demonstration Project.--
       ``(1) Authority to conduct demonstration.--The Secretary, 
     in consultation with the Administrator of the Centers for 
     Medicare & Medicaid Services, shall conduct a demonstration 
     project to develop a comprehensive and systematic model for 
     reducing childhood obesity by awarding grants to eligible 
     entities to carry out such project. Such model shall--
       ``(A) identify, through self-assessment, behavioral risk 
     factors for obesity among children;
       ``(B) identify, through self-assessment, needed clinical 
     preventive and screening benefits among those children 
     identified as target individuals on the basis of such risk 
     factors;
       ``(C) provide ongoing support to such target individuals 
     and their families to reduce risk factors and promote the 
     appropriate use of preventive and screening benefits; and
       ``(D) be designed to improve health outcomes, satisfaction, 
     quality of life, and appropriate use of items and services 
     for which medical assistance is available under title XIX or 
     child health assistance is available under title XXI among 
     such target individuals.
       ``(2) Eligibility entities.--For purposes of this 
     subsection, an eligible entity is any of the following:
       ``(A) A city, county, or Indian tribe.
       ``(B) A local or tribal educational agency.
       ``(C) An accredited university, college, or community 
     college.
       ``(D) A Federally-qualified health center.
       ``(E) A local health department.
       ``(F) A health care provider.
       ``(G) A community-based organization.
       ``(H) Any other entity determined appropriate by the 
     Secretary, including a consortia or partnership of entities 
     described in any of subparagraphs (A) through (G).
       ``(3) Use of funds.--An eligible entity awarded a grant 
     under this subsection shall use the funds made available 
     under the grant to--
       ``(A) carry out community-based activities related to 
     reducing childhood obesity, including by--
       ``(i) forming partnerships with entities, including schools 
     and other facilities providing recreational services, to 
     establish programs for after school and weekend community 
     activities that are designed to reduce childhood obesity;
       ``(ii) forming partnerships with daycare facilities to 
     establish programs that promote healthy eating behaviors and 
     physical activity; and
       ``(iii) developing and evaluating community educational 
     activities targeting good nutrition and promoting healthy 
     eating behaviors;
       ``(B) carry out age-appropriate school-based activities 
     that are designed to reduce childhood obesity, including by--
       ``(i) developing and testing educational curricula and 
     intervention programs designed to promote healthy eating 
     behaviors and habits in youth, which may include--

       ``(I) after hours physical activity programs; and
       ``(II) science-based interventions with multiple components 
     to prevent eating disorders including nutritional content, 
     understanding and responding to hunger and satiety, positive 
     body image development, positive self-esteem development, and 
     learning life skills (such as stress management, 
     communication skills, problemsolving and decisionmaking 
     skills), as well as consideration of cultural and 
     developmental issues, and the role of family, school, and 
     community;

       ``(ii) providing education and training to educational 
     professionals regarding how to promote a healthy lifestyle 
     and a healthy school environment for children;
       ``(iii) planning and implementing a healthy lifestyle 
     curriculum or program with an emphasis on healthy eating 
     behaviors and physical activity; and
       ``(iv) planning and implementing healthy lifestyle classes 
     or programs for parents or guardians, with an emphasis on 
     healthy eating behaviors and physical activity for children;
       ``(C) carry out educational, counseling, promotional, and 
     training activities through the local health care delivery 
     systems including by--
       ``(i) promoting healthy eating behaviors and physical 
     activity services to treat or prevent eating disorders, being 
     overweight, and obesity;
       ``(ii) providing patient education and counseling to 
     increase physical activity and promote healthy eating 
     behaviors;
       ``(iii) training health professionals on how to identify 
     and treat obese and overweight individuals which may include 
     nutrition and physical activity counseling; and
       ``(iv) providing community education by a health 
     professional on good nutrition and physical activity to 
     develop a better understanding of the relationship between 
     diet, physical activity, and eating disorders, obesity, or 
     being overweight; and
       ``(D) provide, through qualified health professionals, 
     training and supervision for community health workers to--
       ``(i) educate families regarding the relationship between 
     nutrition, eating habits, physical activity, and obesity;
       ``(ii) educate families about effective strategies to 
     improve nutrition, establish healthy eating patterns, and 
     establish appropriate levels of physical activity; and
       ``(iii) educate and guide parents regarding the ability to 
     model and communicate positive health behaviors.
       ``(4) Priority.--In awarding grants under paragraph (1), 
     the Secretary shall give priority to awarding grants to 
     eligible entities--
       ``(A) that demonstrate that they have previously applied 
     successfully for funds to carry out activities that seek to 
     promote individual and community health and to prevent the 
     incidence of chronic disease and that can cite published and 
     peer-reviewed research demonstrating that the activities that 
     the entities propose to carry out with funds made available 
     under the grant are effective;
       ``(B) that will carry out programs or activities that seek 
     to accomplish a goal or goals set by the State in the Healthy 
     People 2010 plan of the State;
       ``(C) that provide non-Federal contributions, either in 
     cash or in-kind, to the costs of funding activities under the 
     grants;
       ``(D) that develop comprehensive plans that include a 
     strategy for extending program activities developed under 
     grants in the years following the fiscal years for which they 
     receive grants under this subsection;
       ``(E) located in communities that are medically 
     underserved, as determined by the Secretary;
       ``(F) located in areas in which the average poverty rate is 
     at least 150 percent or higher of the average poverty rate in 
     the State involved, as determined by the Secretary; and
       ``(G) that submit plans that exhibit multisectoral, 
     cooperative conduct that includes the involvement of a broad 
     range of stakeholders, including--
       ``(i) community-based organizations;
       ``(ii) local governments;
       ``(iii) local educational agencies;
       ``(iv) the private sector;
       ``(v) State or local departments of health;
       ``(vi) accredited colleges, universities, and community 
     colleges;
       ``(vii) health care providers;
       ``(viii) State and local departments of transportation and 
     city planning; and
       ``(ix) other entities determined appropriate by the 
     Secretary.
       ``(5) Program design.--
       ``(A) Initial design.--Not later than 1 year after the date 
     of enactment of the Children's Health Insurance Program 
     Reauthorization Act of 2007, the Secretary shall design the 
     demonstration project. The demonstration should draw upon 
     promising, innovative models and incentives to reduce 
     behavioral risk factors. The Administrator of the Centers for 
     Medicare & Medicaid Services shall consult with the Director 
     of the Centers for Disease Control and Prevention, the 
     Director of the Office of Minority Health, the heads of other 
     agencies in the Department of Health and Human Services, and 
     such professional organizations, as the Secretary determines 
     to be appropriate, on the design, conduct, and evaluation of 
     the demonstration.
       ``(B) Number and project areas.--Not later than 2 years 
     after the date of enactment of the Children's Health 
     Insurance Program Reauthorization Act of 2007, the Secretary 
     shall award 1 grant that is specifically designed to 
     determine whether programs similar to programs to be 
     conducted by other grantees under this subsection should be 
     implemented with respect to the general population of 
     children who are eligible for child health assistance under 
     State child health plans under title XXI in order to reduce 
     the incidence of childhood obesity among such population.
       ``(6) Report to congress.--Not later than 3 years after the 
     date the Secretary implements the demonstration project under 
     this subsection, the Secretary shall submit to Congress a 
     report that describes the project, evaluates the 
     effectiveness and cost effectiveness of the project, 
     evaluates the beneficiary satisfaction under the project, and 
     includes any such other information as the Secretary 
     determines to be appropriate.
       ``(7) Definitions.--In this subsection:
       ``(A) Federally-qualified health center.--The term 
     `Federally-qualified health center' has the meaning given 
     that term in section 1905(l)(2)(B).
       ``(B) Indian tribe.--The term `Indian tribe' has the 
     meaning given that term in section 4 of the Indian Health 
     Care Improvement Act (25 U.S.C. 1603).
       ``(C) Self-assessment.--The term `self-assessment' means a 
     form that--
       ``(i) includes questions regarding--

       ``(I) behavioral risk factors;
       ``(II) needed preventive and screening services; and
       ``(III) target individuals' preferences for receiving 
     follow-up information;

       ``(ii) is assessed using such computer generated assessment 
     programs; and
       ``(iii) allows for the provision of such ongoing support to 
     the individual as the Secretary determines appropriate.
       ``(D) Ongoing support.--The term `ongoing support' means--
       ``(i) to provide any target individual with information, 
     feedback, health coaching, and recommendations regarding--

       ``(I) the results of a self-assessment given to the 
     individual;
       ``(II) behavior modification based on the self-assessment; 
     and

[[Page S10971]]

       ``(III) any need for clinical preventive and screening 
     services or treatment including medical nutrition therapy;

       ``(ii) to provide any target individual with referrals to 
     community resources and programs available to assist the 
     target individual in reducing health risks; and
       ``(iii) to provide the information described in clause (i) 
     to a health care provider, if designated by the target 
     individual to receive such information.
       ``(8) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection, $25,000,000 
     for the period of fiscal years 2008 through 2012.
       ``(f) Development of Model Electronic Health Record Format 
     for Children Enrolled in Medicaid or CHIP.--
       ``(1) In general.--Not later than January 1, 2009, the 
     Secretary shall establish a program to encourage the 
     development and dissemination of a model electronic health 
     record format for children enrolled in the State plan under 
     title XIX or the State child health plan under title XXI that 
     is--
       ``(A) subject to State laws, accessible to parents, 
     caregivers, and other consumers for the sole purpose of 
     demonstrating compliance with school or leisure activity 
     requirements, such as appropriate immunizations or physicals;
       ``(B) designed to allow interoperable exchanges that 
     conform with Federal and State privacy and security 
     requirements;
       ``(C) structured in a manner that permits parents and 
     caregivers to view and understand the extent to which the 
     care their children receive is clinically appropriate and of 
     high quality; and
       ``(D) capable of being incorporated into, and otherwise 
     compatible with, other standards developed for electronic 
     health records.
       ``(2) Funding.--$5,000,000 of the amount appropriated under 
     subsection (i) for a fiscal year shall be used to carry out 
     this subsection.
       ``(g) Study of Pediatric Health and Health Care Quality 
     Measures.--
       ``(1) In general.--Not later than July 1, 2009, the 
     Institute of Medicine shall study and report to Congress on 
     the extent and quality of efforts to measure child health 
     status and the quality of health care for children across the 
     age span and in relation to preventive care, treatments for 
     acute conditions, and treatments aimed at ameliorating or 
     correcting physical, mental, and developmental conditions in 
     children. In conducting such study and preparing such report, 
     the Institute of Medicine shall--
       ``(A) consider all of the major national population-based 
     reporting systems sponsored by the Federal Government that 
     are currently in place, including reporting requirements 
     under Federal grant programs and national population surveys 
     and estimates conducted directly by the Federal Government;
       ``(B) identify the information regarding child health and 
     health care quality that each system is designed to capture 
     and generate, the study and reporting periods covered by each 
     system, and the extent to which the information so generated 
     is made widely available through publication;
       ``(C) identify gaps in knowledge related to children's 
     health status, health disparities among subgroups of 
     children, the effects of social conditions on children's 
     health status and use and effectiveness of health care, and 
     the relationship between child health status and family 
     income, family stability and preservation, and children's 
     school readiness and educational achievement and attainment; 
     and
       ``(D) make recommendations regarding improving and 
     strengthening the timeliness, quality, and public 
     transparency and accessibility of information about child 
     health and health care quality.
       ``(2) Funding.--Up to $1,000,000 of the amount appropriated 
     under subsection (i) for a fiscal year shall be used to carry 
     out this subsection.
       ``(h) Rule of Construction.--Notwithstanding any other 
     provision in this section, no evidence based quality measure 
     developed, published, or used as a basis of measurement or 
     reporting under this section may be used to establish an 
     irrebuttable presumption regarding either the medical 
     necessity of care or the maximum permissible coverage for any 
     individual child who is eligible for and receiving medical 
     assistance under title XIX or child health assistance under 
     title XXI .
       ``(i) Appropriation.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated for each of 
     fiscal years 2008 through 2012, $45,000,000 for the purpose 
     of carrying out this section (other than subsection (e)). 
     Funds appropriated under this subsection shall remain 
     available until expended.''.
       (b) Increased Matching Rate for Collecting and Reporting on 
     Child Health Measures.--Section 1903(a)(3)(A) (42 U.S.C. 
     1396b(a)(3)(A)), is amended--
       (1) by striking ``and'' at the end of clause (i); and
       (2) by adding at the end the following new clause:
       ``(iii) an amount equal to the Federal medical assistance 
     percentage (as defined in section 1905(b)) of so much of the 
     sums expended during such quarter (as found necessary by the 
     Secretary for the proper and efficient administration of the 
     State plan) as are attributable to such developments or 
     modifications of systems of the type described in clause (i) 
     as are necessary for the efficient collection and reporting 
     on child health measures; and''.

     SEC. 502. IMPROVED INFORMATION REGARDING ACCESS TO COVERAGE 
                   UNDER CHIP.

       (a) Inclusion of Process and Access Measures in Annual 
     State Reports.--Section 2108 (42 U.S.C. 1397hh) is amended--
       (1) in subsection (a), in the matter preceding paragraph 
     (1), by striking ``The State'' and inserting ``Subject to 
     subsection (e), the State''; and
       (2) by adding at the end the following new subsection:
       ``(e) Information Required for Inclusion in State Annual 
     Report.--The State shall include the following information in 
     the annual report required under subsection (a):
       ``(1) Eligibility criteria, enrollment, and retention data 
     (including data with respect to continuity of coverage or 
     duration of benefits).
       ``(2) Data regarding the extent to which the State uses 
     process measures with respect to determining the eligibility 
     of children under the State child health plan, including 
     measures such as 12-month continuous eligibility, self-
     declaration of income for applications or renewals, or 
     presumptive eligibility.
       ``(3) Data regarding denials of eligibility and 
     redeterminations of eligibility.
       ``(4) Data regarding access to primary and specialty 
     services, access to networks of care, and care coordination 
     provided under the State child health plan, using quality 
     care and consumer satisfaction measures included in the 
     Consumer Assessment of Healthcare Providers and Systems 
     (CAHPS) survey.
       ``(5) If the State provides child health assistance in the 
     form of premium assistance for the purchase of coverage under 
     a group health plan, data regarding the provision of such 
     assistance, including the extent to which employer-sponsored 
     health insurance coverage is available for children eligible 
     for child health assistance under the State child health 
     plan, the range of the monthly amount of such assistance 
     provided on behalf of a child or family, the number of 
     children or families provided such assistance on a monthly 
     basis, the income of the children or families provided such 
     assistance, the benefits and cost-sharing protection provided 
     under the State child health plan to supplement the coverage 
     purchased with such premium assistance, the effective 
     strategies the State engages in to reduce any administrative 
     barriers to the provision of such assistance, and, the 
     effects, if any, of the provision of such assistance on 
     preventing the coverage provided under the State child health 
     plan from substituting for coverage provided under employer-
     sponsored health insurance offered in the State.
       ``(6) To the extent applicable, a description of any State 
     activities that are designed to reduce the number of 
     uncovered children in the State, including through a State 
     health insurance connector program or support for innovative 
     private health coverage initiatives.''.
       (b) GAO Study and Report on Access to Primary and 
     Speciality Services.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study of children's access to primary 
     and specialty services under Medicaid and CHIP, including--
       (A) the extent to which providers are willing to treat 
     children eligible for such programs;
       (B) information on such children's access to networks of 
     care;
       (C) geographic availability of primary and specialty 
     services under such programs;
       (D) the extent to which care coordination is provided for 
     children's care under Medicaid and CHIP; and
       (E) as appropriate, information on the degree of 
     availability of services for children under such programs.
       (2) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Comptroller General shall submit a 
     report to the appropriate committees of Congress on the study 
     conducted under paragraph (1) that includes recommendations 
     for such Federal and State legislative and administrative 
     changes as the Comptroller General determines are necessary 
     to address any barriers to access to children's care under 
     Medicaid and CHIP that may exist.

     SEC. 503. APPLICATION OF CERTAIN MANAGED CARE QUALITY 
                   SAFEGUARDS TO CHIP.

       Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)), as amended by 
     section 204(b), is amended by redesignating subparagraph (E) 
     (as added by such section) as subparagraph (F) and by 
     inserting after subparagraph (D) the following new 
     subparagraph:
       ``(E) Subsections (a)(4), (a)(5), (b), (c), (d), and (e) of 
     section 1932 (relating to requirements for managed care).''.

                        TITLE VI--MISCELLANEOUS

     SEC. 601. TECHNICAL CORRECTION REGARDING CURRENT STATE 
                   AUTHORITY UNDER MEDICAID.

       (a) In General.--Only with respect to expenditures for 
     medical assistance under a State Medicaid plan, including any 
     waiver of such plan, for fiscal years 2007 and 2008, a State 
     may elect, notwithstanding the fourth sentence of subsection 
     (b) of section 1905 of the Social Security Act (42 U.S.C. 
     1396d) or subsection (u) of such section--
       (1) to cover individuals described in section 
     1902(a)(10)(A)(ii)(IX) of the Social Security Act and, at its 
     option, to apply less restrictive methodologies to such 
     individuals under section 1902(r)(2) of such Act or 
     1931(b)(2)(C) of such Act and thereby receive Federal 
     financial participation for medical assistance for such 
     individuals under title XIX of the Social Security Act; or
       (2) to receive Federal financial participation for 
     expenditures for medical assistance under title XIX of such 
     Act for children described in paragraph (2)(B) or (3) of 
     section 1905(u) of such Act based on the Federal medical 
     assistance percentage, as otherwise determined based on the 
     first and third sentences of subsection (b) of section 1905 
     of the Social Security Act, rather than on the basis of an 
     enhanced FMAP (as defined in section 2105(b) of such Act).
       (b) Repeal.--Effective October 1, 2008, subsection (a) is 
     repealed.
       (c) Hold Harmless.--No State that elects the option 
     described in subsection (a) shall be treated as not having 
     been authorized to make such election and to receive Federal 
     financial participation for expenditures for medical 
     assistance

[[Page S10972]]

     described in that subsection for fiscal years 2007 and 2008 
     as a result of the repeal of the subsection under subsection 
     (b).

     SEC. 602. PAYMENT ERROR RATE MEASUREMENT (``PERM'').

       (a) Expenditures Related to Compliance With Requirements.--
       (1) Enhanced payments.--Section 2105(c) (42 U.S.C. 
     1397ee(c)), as amended by section 401(a), is amended by 
     adding at the end the following new paragraph:
       ``(11) Enhanced payments.--Notwithstanding subsection (b), 
     the enhanced FMAP with respect to payments under subsection 
     (a) for expenditures related to the administration of the 
     payment error rate measurement (PERM) requirements applicable 
     to the State child health plan in accordance with the 
     Improper Payments Information Act of 2002 and parts 431 and 
     457 of title 42, Code of Federal Regulations (or any related 
     or successor guidance or regulations) shall in no event be 
     less than 90 percent.''.
       (2) Exclusion of from cap on administrative expenditures.--
     Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)C)), as amended 
     by section 402(b), is amended by adding at the end the 
     following:
       ``(v) Payment error rate measurement (perm) expenditures.--
     Expenditures related to the administration of the payment 
     error rate measurement (PERM) requirements applicable to the 
     State child health plan in accordance with the Improper 
     Payments Information Act of 2002 and parts 431 and 457 of 
     title 42, Code of Federal Regulations (or any related or 
     successor guidance or regulations).''.
       (b) Final Rule Required To Be in Effect for All States.--
     Notwithstanding parts 431 and 457 of title 42, Code of 
     Federal Regulations (as in effect on the date of enactment of 
     this Act), the Secretary shall not calculate or publish any 
     national or State-specific error rate based on the 
     application of the payment error rate measurement (in this 
     section referred to as ``PERM'') requirements to CHIP until 
     after the date that is 6 months after the date on which a 
     final rule implementing such requirements in accordance with 
     the requirements of subsection (c) is in effect for all 
     States. Any calculation of a national error rate or a State 
     specific error rate after such final rule in effect for all 
     States may only be inclusive of errors, as defined in such 
     final rule or in guidance issued within a reasonable time 
     frame after the effective date for such final rule that 
     includes detailed guidance for the specific methodology for 
     error determinations.
       (c) Requirements for Final Rule.--For purposes of 
     subsection (b), the requirements of this subsection are that 
     the final rule implementing the PERM requirements shall 
     include--
       (1) clearly defined criteria for errors for both States and 
     providers;
       (2) a clearly defined process for appealing error 
     determinations by review contractors; and
       (3) clearly defined responsibilities and deadlines for 
     States in implementing any corrective action plans.
       (d) Option for Application of Data for Certain States Under 
     the Interim Final Rule.--
       (1) Option for states in first application cycle.--After 
     the final rule implementing the PERM requirements in 
     accordance with the requirements of subsection (c) is in 
     effect for all States, a State for which the PERM 
     requirements were first in effect under an interim final rule 
     for fiscal year 2007 may elect to accept any payment error 
     rate determined in whole or in part for the State on the 
     basis of data for that fiscal year or may elect to not have 
     any payment error rate determined on the basis of such data 
     and, instead, shall be treated as if fiscal year 2010 were 
     the first fiscal year for which the PERM requirements apply 
     to the State.
       (2) Option for states in second application cycle.--If such 
     final rule is not in effect for all States by July 1, 2008, a 
     State for which the PERM requirements were first in effect 
     under an interim final rule for fiscal year 2008 may elect to 
     accept any payment error rate determined in whole or in part 
     for the State on the basis of data for that fiscal year or 
     may elect to not have any payment error rate determined on 
     the basis of such data and, instead, shall be treated as if 
     fiscal year 2011 were the first fiscal year for which the 
     PERM requirements apply to the State.
       (e) Harmonization of MEQC and PERM.--
       (1) Reduction of redundancies.--The Secretary shall review 
     the Medicaid Eligibility Quality Control (in this subsection 
     referred to as the ``MEQC'') requirements with the PERM 
     requirements and coordinate consistent implementation of both 
     sets of requirements, while reducing redundancies.
       (2) State option to apply perm data.--A State may elect, 
     for purposes of determining the erroneous excess payments for 
     medical assistance ratio applicable to the State for a fiscal 
     year under section 1903(u) of the Social Security Act (42 
     U.S.C. 1396b(u)) to substitute data resulting from the 
     application of the PERM requirements to the State after the 
     final rule implementing such requirements is in effect for 
     all States for data obtained from the application of the MEQC 
     requirements to the State with respect to a fiscal year.
       (f) Identification of Improved State-Specific Sample 
     Sizes.--The Secretary shall establish State-specific sample 
     sizes for application of the PERM requirements with respect 
     to State child health plans for fiscal years beginning with 
     fiscal year 2009, on the basis of such information as the 
     Secretary determines appropriate. In establishing such sample 
     sizes, the Secretary shall, to the greatest extent 
     practicable--
       (1) minimize the administrative cost burden on States under 
     Medicaid and CHIP; and
       (2) maintain State flexibility to manage such programs.

     SEC. 603. ELIMINATION OF COUNTING MEDICAID CHILD PRESUMPTIVE 
                   ELIGIBILITY COSTS AGAINST TITLE XXI ALLOTMENT.

       Section 2105(a)(1) (42 U.S.C. 1397ee(a)(1)) is amended--
       (1) in the matter preceding subparagraph (A), by striking 
     ``(or, in the case of expenditures described in subparagraph 
     (B), the Federal medical assistance percentage (as defined in 
     the first sentence of section 1905(b)))''; and
       (2) by striking subparagraph (B) and inserting the 
     following new subparagraph:
       ``(B) [reserved]''.

     SEC. 604. IMPROVING DATA COLLECTION.

       (a) Increased Appropriation.--Section 2109(b)(2) (42 U.S.C. 
     1397ii(b)(2)) is amended by striking ``$10,000,000 for fiscal 
     year 2000'' and inserting ``$20,000,000 for fiscal year 
     2008''.
       (b) Use of Additional Funds.--Section 2109(b) (42 U.S.C. 
     1397ii(b)), as amended by subsection (a), is amended--
       (1) by redesignating paragraph (2) as paragraph (4); and
       (2) by inserting after paragraph (1), the following new 
     paragraphs:
       ``(2) Additional requirements.--In addition to making the 
     adjustments required to produce the data described in 
     paragraph (1), with respect to data collection occurring for 
     fiscal years beginning with fiscal year 2008, in appropriate 
     consultation with the Secretary of Health and Human Services, 
     the Secretary of Commerce shall do the following:
       ``(A) Make appropriate adjustments to the Current 
     Population Survey to develop more accurate State-specific 
     estimates of the number of children enrolled in health 
     coverage under title XIX or this title.
       ``(B) Make appropriate adjustments to the Current 
     Population Survey to improve the survey estimates used to 
     compile the State-specific and national number of low-income 
     children without health insurance for purposes of determining 
     allotments under subsections (c) and (i) of section 2104 and 
     making payments to States from the CHIP Incentive Bonuses 
     Pool established under subsection (j) of such section, the 
     CHIP Contingency Fund established under subsection (k) of 
     such section, and, to the extent applicable to a State, from 
     the block grant set aside under section 2111(b)(2)(B)(i) for 
     each of fiscal years 2010 through 2012.
       ``(C) Include health insurance survey information in the 
     American Community Survey related to children.
       ``(D) Assess whether American Community Survey estimates, 
     once such survey data are first available, produce more 
     reliable estimates than the Current Population Survey with 
     respect to the purposes described in subparagraph (B).
       ``(E) On the basis of the assessment required under 
     subparagraph (D), recommend to the Secretary of Health and 
     Human Services whether American Community Survey estimates 
     should be used in lieu of, or in some combination with, 
     Current Population Survey estimates for the purposes 
     described in subparagraph (B).
       ``(F) Continue making the adjustments described in the last 
     sentence of paragraph (1) with respect to expansion of the 
     sample size used in State sampling units, the number of 
     sampling units in a State, and using an appropriate 
     verification element.
       ``(3) Authority for the secretary of health and human 
     services to transition to the use of all, or some combination 
     of, acs estimates upon recommendation of the secretary of 
     commerce.--If, on the basis of the assessment required under 
     paragraph (2)(D), the Secretary of Commerce recommends to the 
     Secretary of Health and Human Services that American 
     Community Survey estimates should be used in lieu of, or in 
     some combination with, Current Population Survey estimates 
     for the purposes described in paragraph (2)(B), the Secretary 
     of Health and Human Services may provide for a period during 
     which the Secretary may transition from carrying out such 
     purposes through the use of Current Population Survey 
     estimates to the use of American Community Survey estimates 
     (in lieu of, or in combination with the Current Population 
     Survey estimates, as recommended), provided that any such 
     transition is implemented in a manner that is designed to 
     avoid adverse impacts upon States with approved State child 
     health plans under this title.''.

     SEC. 605. DEFICIT REDUCTION ACT TECHNICAL CORRECTIONS.

       (a) State Flexibility in Benefit Packages.--
       (1) Clarification of requirement to provide epsdt services 
     for all children in benchmark benefit packages.--Section 
     1937(a)(1) (42 U.S.C. 1396u-7(a)(1)), as inserted by section 
     6044(a) of the Deficit Reduction Act of 2005 (Public Law 109-
     171, 120 Stat. 88), is amended--
       (A) in subparagraph (A)--
       (i) in the matter before clause (i), by striking 
     ``enrollment in coverage that provides'' and inserting 
     ``coverage that'';
       (ii) in clause (i), by inserting ``provides'' after 
     ``(i)''; and
       (iii) by striking clause (ii) and inserting the following:
       ``(ii) for any individual described in section 
     1905(a)(4)(B) who is eligible under the State plan in 
     accordance with paragraphs (10) and (17) of section 1902(a), 
     consists of the items and services described in section 
     1905(a)(4)(B) (relating to early and periodic screening, 
     diagnostic, and treatment services defined in section 
     1905(r)) and provided in accordance with the requirements of 
     section 1902(a)(43).'';
       (B) in subparagraph (C)--
       (i) in the heading, by striking ``wrap-around'' and 
     inserting ``additional''; and
       (ii) by striking ``wrap-around or''; and
       (C) by adding at the end the following new subparagraph:

[[Page S10973]]

       ``(E) Rule of construction.--Nothing in this paragraph 
     shall be construed as--
       ``(i) requiring a State to offer all or any of the items 
     and services required by subparagraph (A)(ii) through an 
     issuer of benchmark coverage described in subsection (b)(1) 
     or benchmark equivalent coverage described in subsection 
     (b)(2); or
       ``(ii) preventing a State from offering all or any of the 
     items and services required by subparagraph (A)(ii) through 
     an issuer of benchmark coverage described in subsection 
     (b)(1) or benchmark equivalent coverage described in 
     subsection (b)(2).''.
       (2) Correction of reference to children in foster care 
     receiving child welfare services.--Section 
     1937(a)(2)(B)(viii) (42 U.S.C. 1396u-7(a)(2)(B)(viii), as 
     inserted by section 6044(a) of the Deficit Reduction Act of 
     2005, is amended by striking ``aid or assistance is made 
     available under part B of title IV to children in foster care 
     and individuals'' and inserting ``child welfare services are 
     made available under part B of title IV on the basis of being 
     a child in foster care or''.
       (3) Transparency.--Section 1937 (42 U.S.C. 1396u-7), as 
     inserted by section 6044(a) of the Deficit Reduction Act of 
     2005, is amended by adding at the end the following:
       ``(c) Publication of Provisions Affected.--Not later than 
     30 days after the date the Secretary approves a State plan 
     amendment to provide benchmark benefits in accordance with 
     subsections (a) and (b), the Secretary shall publish in the 
     Federal Register and on the Internet website of the Centers 
     for Medicare & Medicaid Services, a list of the provisions of 
     this title that the Secretary has determined do not apply in 
     order to enable the State to carry out such plan amendment 
     and the reason for each such determination.''.
       (4) Effective date.--The amendments made by this subsection 
     shall take effect as if included in the amendment made by 
     section 6044(a) of the Deficit Reduction Act of 2005.

     SEC. 606. ELIMINATION OF CONFUSING PROGRAM REFERENCES.

       Section 704 of the Medicare, Medicaid, and SCHIP Balanced 
     Budget Refinement Act of 1999, as enacted into law by 
     division B of Public Law 106-113 (113 Stat. 1501A-402) is 
     repealed.

     SEC. 607. MENTAL HEALTH PARITY IN CHIP PLANS.

       (a) Assurance of Parity.--Section 2103(c) (42 U.S.C. 
     1397cc(c)) is amended--
       (1) by redesignating paragraph (5) as paragraph (6); and
       (2) by inserting after paragraph (4), the following:
       ``(5) Mental health services parity.--
       ``(A) In general.--In the case of a State child health plan 
     that provides both medical and surgical benefits and mental 
     health or substance abuse benefits, such plan shall ensure 
     that the financial requirements and treatment limitations 
     applicable to such mental health or substance abuse benefits 
     are no more restrictive than the financial requirements and 
     treatment limitations applied to substantially all medical 
     and surgical benefits covered by the plan.
       ``(B) Deemed compliance.--To the extent that a State child 
     health plan includes coverage with respect to an individual 
     described in section 1905(a)(4)(B) and covered under the 
     State plan under section 1902(a)(10)(A) of the services 
     described in section 1905(a)(4)(B) (relating to early and 
     periodic screening, diagnostic, and treatment services 
     defined in section 1905(r)) and provided in accordance with 
     section 1902(a)(43), such plan shall be deemed to satisfy the 
     requirements of subparagraph (A).''.
       (b) Conforming Amendments.--Section 2103 (42 U.S.C. 1397cc) 
     is amended--
       (1) in subsection (a), in the matter preceding paragraph 
     (1), by striking ``subsection (c)(5)'' and inserting 
     ``paragraphs (5) and (6) of subsection (c)''; and
       (2) in subsection (c)(2), by striking subparagraph (B) and 
     redesignating subparagraphs (C) and (D) as subparagraphs (B) 
     and (C), respectively.

     SEC. 608. DENTAL HEALTH GRANTS.

       (a) In General.--Title XXI (42 U.S.C. 1397aa et seq.), as 
     amended by section 201, is amended by adding at the end the 
     following:

     ``SEC. 2114. DENTAL HEALTH GRANTS.

       ``(a) Authority To Award Grants.--
       ``(1) In general.--From the amount appropriated under 
     subsection (f), the Secretary shall award grants from amounts 
     to eligible States for the purpose of carrying out programs 
     and activities that are designed to improve the availability 
     of dental services and strengthen dental coverage for 
     targeted low-income children enrolled in State child health 
     plans.
       ``(2) Eligible state.--In this section, the term `eligible 
     State' means a State with an approved State child health plan 
     under this title that submits an application under subsection 
     (b) that is approved by Secretary.
       ``(b) Application.--An eligible State that desires to 
     receive a grant under this paragraph shall submit an 
     application to the Secretary in such form and manner, and 
     containing such information, as the Secretary may require. 
     Such application shall include--
       ``(1) a detailed description of--
       ``(A) the dental services (if any) covered under the State 
     child health plan; and
       ``(B) how the State intends to improve dental coverage and 
     services during fiscal years 2008 through 2012;
       ``(2) a detailed description of the programs and activities 
     proposed to be conducted with funds awarded under the grant;
       ``(3) quality and outcomes performance measures to evaluate 
     the effectiveness of such activities; and
       ``(4) an assurance that the State shall--
       ``(A) conduct an assessment of the effectiveness of such 
     activities against such performance measures; and
       ``(B) cooperate with the collection and reporting of data 
     and other information determined as a result of conducting 
     such assessments to the Secretary, in such form and manner as 
     the Secretary shall require.
       ``(c) Use of Funds.--The programs and activities described 
     in subsection (a)(1) may include the provision of enhanced 
     dental coverage under the State child health plan.
       ``(d) Maintenance of Effort for States Awarded Grants; No 
     State Match Required.--In the case of a State that is awarded 
     a grant under this section--
       ``(1) the State share of funds expended for dental services 
     under the State child health plan shall not be less than the 
     State share of such funds expended in the fiscal year 
     preceding the first fiscal year for which the grant is 
     awarded; and
       ``(2) no State matching funds shall be required for the 
     State to receive a grant under this section.
       ``(e) Annual Report.--The Secretary shall submit an annual 
     report to the appropriate committees of Congress regarding 
     the grants awarded under this section that includes--
       ``(1) State specific descriptions of the programs and 
     activities conducted with funds awarded under such grants; 
     and
       ``(2) information regarding the assessments required of 
     States under subsection (b)(4).
       ``(f) Appropriation.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated, $200,000,000 
     for the period of fiscal years 2008 through 2012, to remain 
     available until expended, for the purpose of awarding grants 
     to States under this section. Amounts appropriated and paid 
     under the authority of this section shall be in addition to 
     amounts appropriated under section 2104 and paid to States in 
     accordance with section 2105.''.
       (b) Improved Accessibility of Dental Provider Information 
     More Accessible to Enrollees Under Medicaid and CHIP.--The 
     Secretary shall--
       (1) work with States, pediatric dentists, and other dental 
     providers to include on the Insure Kids Now website (http://
www.insurekidsnow.gov/) and hotline (1-877-KIDS-NOW) a 
     current and accurate list of all dentists and other dental 
     providers within each State that provide dental services to 
     children enrolled in the State plan (or waiver) under 
     Medicaid or the State child health plan (or waiver) under 
     CHIP, and shall ensure that such list is updated at least 
     quarterly; and
       (2) work with States to include a description of the dental 
     services provided under each State plan (or waiver) under 
     Medicaid and each State child health plan (or waiver) under 
     CHIP on such Insure Kids Now website.
       (c) GAO Study and Report on Access to Oral Health Care, 
     Including Preventive and Restorative Services.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study of children's access to oral 
     health care, including preventive and restorative services, 
     under Medicaid and CHIP, including--
       (A) the extent to which providers are willing to treat 
     children eligible for such programs;
       (B) information on such children's access to networks of 
     care;
       (C) geographic availability of oral health care, including 
     preventive and restorative services, under such programs; and
       (D) as appropriate, information on the degree of 
     availability of oral health care, including preventive and 
     restorative services, for children under such programs.
       (2) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Comptroller General shall submit a 
     report to the appropriate committees of Congress on the study 
     conducted under paragraph (1) that includes recommendations 
     for such Federal and State legislative and administrative 
     changes as the Comptroller General determines are necessary 
     to address any barriers to access to oral health care, 
     including preventive and restorative services, under Medicaid 
     and CHIP that may exist.
       (d) Inclusion of Status of Efforts To Improve Dental Care 
     in Reports on the Quality of Children's Health Care Under 
     Medicaid and CHIP.--Section 1139A(a)(6)(ii), as added by 
     section 501(a), is amended by inserting ``dental care,'' 
     after ``preventive health services,''.

     SEC. 609. APPLICATION OF PROSPECTIVE PAYMENT SYSTEM FOR 
                   SERVICES PROVIDED BY FEDERALLY-QUALIFIED HEALTH 
                   CENTERS AND RURAL HEALTH CLINICS.

       (a) Application of Prospective Payment System.--
       (1) In general.--Section 2107(e)(1) (42 U.S.C. 
     1397gg(e)(1)), as amended by sections 204(b) and 503, is 
     amended by inserting after subparagraph (A) the following new 
     subparagraph (and redesignating the succeeding subparagraphs 
     accordingly):
       ``(B) Section 1902(bb) (relating to payment for services 
     provided by Federally-qualified health centers and rural 
     health clinics).''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to services provided on or after October 1, 2008.
       (b) Transition Grants.--
       (1) Appropriation.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated to the 
     Secretary for fiscal year 2008, $5,000,000, to remain 
     available until expended, for the purpose of awarding grants 
     to States with State child health plans under CHIP that are 
     operated separately from the State Medicaid plan under title 
     XIX of the Social Security Act (including any waiver of such 
     plan), or in combination with the State Medicaid plan, for 
     expenditures related to transitioning to compliance with the 
     requirement of section 2107(e)(1)(B) of the Social Security 
     Act (as

[[Page S10974]]

     added by subsection (a)) to apply the prospective payment 
     system established under section 1902(bb) of the such Act (42 
     U.S.C. 1396a(bb)) to services provided by Federally-qualified 
     health centers and rural health clinics.
       (2) Monitoring and report.--The Secretary shall monitor the 
     impact of the application of such prospective payment system 
     on the States described in paragraph (1) and, not later than 
     October 1, 2010, shall report to Congress on any effect on 
     access to benefits, provider payment rates, or scope of 
     benefits offered by such States as a result of the 
     application of such payment system.

     SEC. 610. SUPPORT FOR INJURED SERVICEMEMBERS.

       (a) Short Title.--This section may be cited as the 
     ``Support for Injured Servicemembers Act''.
       (b) Servicemember Family Leave.--
       (1) Definitions.--Section 101 of the Family and Medical 
     Leave Act of 1993 (29 U.S.C. 2611) is amended by adding at 
     the end the following:
       ``(14) Active duty.--The term `active duty' means duty 
     under a call or order to active duty under a provision of law 
     referred to in section 101(a)(13)(B) of title 10, United 
     States Code.
       ``(15) Covered servicemember.--The term `covered 
     servicemember' means a member of the Armed Forces, including 
     a member of the National Guard or a Reserve, who is 
     undergoing medical treatment, recuperation, or therapy, is 
     otherwise in medical hold or medical holdover status, or is 
     otherwise on the temporary disability retired list, for a 
     serious injury or illness.
       ``(16) Medical hold or medical holdover status.--The term 
     `medical hold or medical holdover status' means--
       ``(A) the status of a member of the Armed Forces, including 
     a member of the National Guard or a Reserve, assigned or 
     attached to a military hospital for medical care; and
       ``(B) the status of a member of a reserve component of the 
     Armed Forces who is separated, whether pre-deployment or 
     post-deployment, from the member's unit while in need of 
     health care based on a medical condition identified while the 
     member is on active duty in the Armed Forces.
       ``(17) Next of kin.--The term `next of kin', used with 
     respect to an individual, means the nearest blood relative of 
     that individual.
       ``(18) Serious injury or illness.--The term `serious injury 
     or illness', in the case of a member of the Armed Forces, 
     means an injury or illness incurred by the member in line of 
     duty on active duty in the Armed Forces that may render the 
     member medically unfit to perform the duties of the member's 
     office, grade, rank, or rating.''.
       (2) Entitlement to leave.--Section 102(a) of such Act (29 
     U.S.C. 2612(a)) is amended by adding at the end the 
     following:
       ``(3) Servicemember family leave.--Subject to section 103, 
     an eligible employee who is the spouse, son, daughter, 
     parent, or next of kin of a covered servicemember shall be 
     entitled to a total of 26 workweeks of leave during a 12-
     month period to care for the servicemember. The leave 
     described in this paragraph shall only be available during a 
     single 12-month period.
       ``(4) Combined leave total.--During the single 12-month 
     period described in paragraph (3), an eligible employee shall 
     be entitled to a combined total of 26 workweeks of leave 
     under paragraphs (1) and (3). Nothing in this paragraph shall 
     be construed to limit the availability of leave under 
     paragraph (1) during any other 12-month period.''.
       (3) Requirements relating to leave.--
       (A) Schedule.--Section 102(b) of such Act (29 U.S.C. 
     2612(b)) is amended--
       (i) in paragraph (1), in the second sentence--

       (I) by striking ``section 103(b)(5)'' and inserting 
     ``subsection (b)(5) or (f) (as appropriate) of section 103''; 
     and
       (II) by inserting ``or under subsection (a)(3)'' after 
     ``subsection (a)(1)''; and

       (ii) in paragraph (2), by inserting ``or under subsection 
     (a)(3)'' after ``subsection (a)(1)''.
       (B) Substitution of paid leave.--Section 102(d) of such Act 
     (29 U.S.C. 2612(d)) is amended--
       (i) in paragraph (1)--

       (I) by inserting ``(or 26 workweeks in the case of leave 
     provided under subsection (a)(3))'' after ``12 workweeks'' 
     the first place it appears; and
       (II) by inserting ``(or 26 workweeks, as appropriate)'' 
     after ``12 workweeks'' the second place it appears; and

       (ii) in paragraph (2)(B), by adding at the end the 
     following: ``An eligible employee may elect, or an employer 
     may require the employee, to substitute any of the accrued 
     paid vacation leave, personal leave, family leave, or medical 
     or sick leave of the employee for leave provided under 
     subsection (a)(3) for any part of the 26-week period of such 
     leave under such subsection.''.
       (C) Notice.--Section 102(e)(2) of such Act (29 U.S.C. 
     2612(e)(2)) is amended by inserting ``or under subsection 
     (a)(3)'' after ``subsection (a)(1)''.
       (D) Spouses employed by same employer.--Section 102(f) of 
     such Act (29 U.S.C. 2612(f)) is amended--
       (i) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), and aligning the margins of the 
     subparagraphs with the margins of section 102(e)(2)(A);
       (ii) by striking ``In any'' and inserting the following:
       ``(1) In general.--In any''; and
       (iii) by adding at the end the following:
       ``(2) Servicemember family leave.--
       ``(A) In general.--The aggregate number of workweeks of 
     leave to which both that husband and wife may be entitled 
     under subsection (a) may be limited to 26 workweeks during 
     the single 12-month period described in subsection (a)(3) if 
     the leave is--
       ``(i) leave under subsection (a)(3); or
       ``(ii) a combination of leave under subsection (a)(3) and 
     leave described in paragraph (1).
       ``(B) Both limitations applicable.--If the leave taken by 
     the husband and wife includes leave described in paragraph 
     (1), the limitation in paragraph (1) shall apply to the leave 
     described in paragraph (1).''.
       (E) Certification.--Section 103 of such Act (29 U.S.C. 
     2613) is amended by adding at the end the following:
       ``(f) Certification for Servicemember Family Leave.--An 
     employer may require that a request for leave under section 
     102(a)(3) be supported by a certification issued at such time 
     and in such manner as the Secretary may by regulation 
     prescribe.''.
       (F) Failure to return.--Section 104(c) of such Act (29 
     U.S.C. 2614(c)) is amended--
       (i) in paragraph (2)(B)(i), by inserting ``or under section 
     102(a)(3)'' before the semicolon; and
       (ii) in paragraph (3)(A)--

       (I) in clause (i), by striking ``or'' at the end;
       (II) in clause (ii), by striking the period and inserting 
     ``; or''; and
       (III) by adding at the end the following:

       ``(iii) a certification issued by the health care provider 
     of the servicemember being cared for by the employee, in the 
     case of an employee unable to return to work because of a 
     condition specified in section 102(a)(3).''.
       (G) Enforcement.--Section 107 of such Act (29 U.S.C. 2617) 
     is amended, in subsection (a)(1)(A)(i)(II), by inserting 
     ``(or 26 weeks, in a case involving leave under section 
     102(a)(3))'' after ``12 weeks''.
       (H) Instructional employees.--Section 108 of such Act (29 
     U.S.C. 2618) is amended, in subsections (c)(1), (d)(2), and 
     (d)(3), by inserting ``or under section 102(a)(3)'' after 
     ``section 102(a)(1)''.
       (c) Servicemember Family Leave for Civil Service 
     Employees.--
       (1) Definitions.--Section 6381 of title 5, United States 
     Code, is amended--
       (A) in paragraph (5), by striking ``and'' at the end;
       (B) in paragraph (6), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(7) the term `active duty' means duty under a call or 
     order to active duty under a provision of law referred to in 
     section 101(a)(13)(B) of title 10, United States Code;
       ``(8) the term `covered servicemember' means a member of 
     the Armed Forces, including a member of the National Guard or 
     a Reserve, who is undergoing medical treatment, recuperation, 
     or therapy, is otherwise in medical hold or medical holdover 
     status, or is otherwise on the temporary disability retired 
     list, for a serious injury or illness;
       ``(9) the term `medical hold or medical holdover status' 
     means--
       ``(A) the status of a member of the Armed Forces, including 
     a member of the National Guard or a Reserve, assigned or 
     attached to a military hospital for medical care; and
       ``(B) the status of a member of a reserve component of the 
     Armed Forces who is separated, whether pre-deployment or 
     post-deployment, from the member's unit while in need of 
     health care based on a medical condition identified while the 
     member is on active duty in the Armed Forces;
       ``(10) the term `next of kin', used with respect to an 
     individual, means the nearest blood relative of that 
     individual; and
       ``(11) the term `serious injury or illness', in the case of 
     a member of the Armed Forces, means an injury or illness 
     incurred by the member in line of duty on active duty in the 
     Armed Forces that may render the member medically unfit to 
     perform the duties of the member's office, grade, rank, or 
     rating.''.
       (2) Entitlement to leave.--Section 6382(a) of such title is 
     amended by adding at the end the following:
       ``(3) Subject to section 6383, an employee who is the 
     spouse, son, daughter, parent, or next of kin of a covered 
     servicemember shall be entitled to a total of 26 
     administrative workweeks of leave during a 12-month period to 
     care for the servicemember. The leave described in this 
     paragraph shall only be available during a single 12-month 
     period.
       ``(4) During the single 12-month period described in 
     paragraph (3), an employee shall be entitled to a combined 
     total of 26 administrative workweeks of leave under 
     paragraphs (1) and (3). Nothing in this paragraph shall be 
     construed to limit the availability of leave under paragraph 
     (1) during any other 12-month period.''.
       (3) Requirements relating to leave.--
       (A) Schedule.--Section 6382(b) of such title is amended--
       (i) in paragraph (1), in the second sentence--

       (I) by striking ``section 6383(b)(5)'' and inserting 
     ``subsection (b)(5) or (f) (as appropriate) of section 
     6383''; and
       (II) by inserting ``or under subsection (a)(3)'' after 
     ``subsection (a)(1)''; and

       (ii) in paragraph (2), by inserting ``or under subsection 
     (a)(3)'' after ``subsection (a)(1)''.
       (B) Substitution of paid leave.--Section 6382(d) of such 
     title is amended by adding at the end the following: ``An 
     employee may elect to substitute for leave under subsection 
     (a)(3) any of the employee's accrued or accumulated annual or 
     sick leave under subchapter I for any part of the 26-week 
     period of leave under such subsection.''.
       (C) Notice.--Section 6382(e) of such title is amended by 
     inserting ``or under subsection (a)(3)'' after ``subsection 
     (a)(1)''.
       (D) Certification.--Section 6383 of such title is amended 
     by adding at the end the following:
       ``(f) An employing agency may require that a request for 
     leave under section 6382(a)(3) be supported by a 
     certification issued at such time and in such manner as the 
     Office of Personnel Management may by regulation 
     prescribe.''.

[[Page S10975]]

     SEC. 611. MILITARY FAMILY JOB PROTECTION.

       (a) Short Title.--This section may be cited as the 
     ``Military Family Job Protection Act''.
       (b) Prohibition on Discrimination in Employment Against 
     Certain Family Members Caring for Recovering Members of the 
     Armed Forces.--A family member of a recovering servicemember 
     described in subsection (c) shall not be denied retention in 
     employment, promotion, or any benefit of employment by an 
     employer on the basis of the family member's absence from 
     employment as described in that subsection, for a period of 
     not more than 52 workweeks.
       (c) Covered Family Members.--A family member described in 
     this subsection is a family member of a recovering 
     servicemember who is--
       (1) on invitational orders while caring for the recovering 
     servicemember;
       (2) a non-medical attendee caring for the recovering 
     servicemember; or
       (3) receiving per diem payments from the Department of 
     Defense while caring for the recovering servicemember.
       (d) Treatment of Actions.--An employer shall be considered 
     to have engaged in an action prohibited by subsection (b) 
     with respect to a person described in that subsection if the 
     absence from employment of the person as described in that 
     subsection is a motivating factor in the employer's action, 
     unless the employer can prove that the action would have been 
     taken in the absence of the absence of employment of the 
     person.
       (e) Definitions.--In this section:
       (1) Benefit of employment.--The term ``benefit of 
     employment'' has the meaning given such term in section 4303 
     of title 38, United States Code.
       (2) Caring for.--The term ``caring for'', used with respect 
     to a recovering servicemember, means providing personal, 
     medical, or convalescent care to the recovering 
     servicemember, under circumstances that substantially 
     interfere with an employee's ability to work.
       (3) Employer.--The term ``employer'' has the meaning given 
     such term in section 4303 of title 38, United States Code, 
     except that the term does not include any person who is not 
     considered to be an employer under title I of the Family and 
     Medical Leave Act of 1993 (29 U.S.C. 2611 et seq.) because 
     the person does not meet the requirements of section 
     101(4)(A)(i) of such Act (29 U.S.C. 2611(4)(A)(i)).
       (4) Family member.--The term ``family member'', with 
     respect to a recovering servicemember, has the meaning given 
     that term in section 411h(b) of title 37, United States Code.
       (5) Recovering servicemember.--The term ``recovering 
     servicemember'' means a member of the Armed Forces, including 
     a member of the National Guard or a Reserve, who is 
     undergoing medical treatment, recuperation, or therapy, or is 
     otherwise in medical hold or medical holdover status, for an 
     injury, illness, or disease incurred or aggravated while on 
     active duty in the Armed Forces.

     SEC. 612. SENSE OF SENATE REGARDING ACCESS TO AFFORDABLE AND 
                   MEANINGFUL HEALTH INSURANCE COVERAGE.

       (a) Findings.--The Senate finds the following:
       (1) There are approximately 45 million Americans currently 
     without health insurance.
       (2) More than half of uninsured workers are employed by 
     businesses with less than 25 employees or are self-employed.
       (3) Health insurance premiums continue to rise at more than 
     twice the rate of inflation for all consumer goods.
       (4) Individuals in the small group and individual health 
     insurance markets usually pay more for similar coverage than 
     those in the large group market.
       (5) The rapid growth in health insurance costs over the 
     last few years has forced many employers, particularly small 
     employers, to increase deductibles and co-pays or to drop 
     coverage completely.
       (b) Sense of the Senate.--The Senate--
       (1) recognizes the necessity to improve affordability and 
     access to health insurance for all Americans;
       (2) acknowledges the value of building upon the existing 
     private health insurance market; and
       (3) affirms its intent to enact legislation this year that, 
     with appropriate protection for consumers, improves access to 
     affordable and meaningful health insurance coverage for 
     employees of small businesses and individuals by--
       (A) facilitating pooling mechanisms, including pooling 
     across State lines, and
       (B) providing assistance to small businesses and 
     individuals, including financial assistance and tax 
     incentives, for the purchase of private insurance coverage.

     SEC. 613. DEMONSTRATION PROJECTS RELATING TO DIABETES 
                   PREVENTION.

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

     SEC. 614. OUTREACH REGARDING HEALTH INSURANCE OPTIONS 
                   AVAILABLE TO CHILDREN.

       (a) Definitions.--In this section--
       (1) the terms ``Administration'' and ``Administrator'' 
     means the Small Business Administration and the Administrator 
     thereof, respectively;
       (2) the term ``certified development company'' means a 
     development company participating in the program under title 
     V of the Small Business Investment Act of 1958 (15 U.S.C. 695 
     et seq.);
       (3) the term ``Medicaid program'' means the program 
     established under title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.);
       (4) the term ``Service Corps of Retired Executives'' means 
     the Service Corps of Retired Executives authorized by section 
     8(b)(1) of the Small Business Act (15 U.S.C. 637(b)(1));
       (5) the term ``small business concern'' has the meaning 
     given that term in section 3 of the Small Business Act (15 
     U.S.C. 632);
       (6) the term ``small business development center'' means a 
     small business development center described in section 21 of 
     the Small Business Act (15 U.S.C. 648);
       (7) the term ``State'' has the meaning given that term for 
     purposes of title XXI of the Social Security Act (42 U.S.C. 
     1397aa et seq.);
       (8) the term ``State Children's Health Insurance Program'' 
     means the State Children's Health Insurance Program 
     established under title XXI of the Social Security Act (42 
     U.S.C. 1397aa et seq.);
       (9) the term ``task force'' means the task force 
     established under subsection (b)(1); and
       (10) the term ``women's business center'' means a women's 
     business center described in section 29 of the Small Business 
     Act (15 U.S.C. 656).
       (b) Establishment of Task Force.--
       (1) Establishment.--There is established a task force to 
     conduct a nationwide campaign of education and outreach for 
     small business concerns regarding the availability of 
     coverage for children through private insurance options, the 
     Medicaid program, and the State Children's Health Insurance 
     Program.
       (2) Membership.--The task force shall consist of the 
     Administrator, the Secretary of Health and Human Services, 
     the Secretary of Labor, and the Secretary of the Treasury.
       (3) Responsibilities.--The campaign conducted under this 
     subsection shall include--
       (A) efforts to educate the owners of small business 
     concerns about the value of health coverage for children;
       (B) information regarding options available to the owners 
     and employees of small business concerns to make insurance 
     more affordable, including Federal and State tax deductions 
     and credits for health care-related expenses and health 
     insurance expenses and Federal tax exclusion for health 
     insurance options available under employer-sponsored 
     cafeteria plans under section 125 of the Internal Revenue 
     Code of 1986;
       (C) efforts to educate the owners of small business 
     concerns about assistance available through public programs; 
     and
       (D) efforts to educate the owners and employees of small 
     business concerns regarding the availability of the hotline 
     operated as part of the Insure Kids Now program of the 
     Department of Health and Human Services.
       (4) Implementation.--In carrying out this subsection, the 
     task force may--
       (A) use any business partner of the Administration, 
     including--
       (i) a small business development center;
       (ii) a certified development company;
       (iii) a women's business center; and
       (iv) the Service Corps of Retired Executives;
       (B) enter into--
       (i) a memorandum of understanding with a chamber of 
     commerce; and
       (ii) a partnership with any appropriate small business 
     concern or health advocacy group; and
       (C) designate outreach programs at regional offices of the 
     Department of Health and Human Services to work with district 
     offices of the Administration.
       (5) Website.--The Administrator shall ensure that links to 
     information on the eligibility and enrollment requirements 
     for the Medicaid program and State Children's Health 
     Insurance Program of each State are prominently displayed on 
     the website of the Administration.
       (6) Report.--
       (A) In general.--Not later than 2 years after the date of 
     enactment of this Act, and every 2 years thereafter, the 
     Administrator shall submit to the Committee on Small Business 
     and Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives a report on the 
     status of the nationwide campaign conducted under paragraph 
     (1).
       (B) Contents.--Each report submitted under subparagraph (A) 
     shall include a status update on all efforts made to educate 
     owners and employees of small business concerns on options 
     for providing health insurance for children through public 
     and private alternatives.

                     TITLE VII--REVENUE PROVISIONS

     SEC. 701. INCREASE IN EXCISE TAX RATE ON TOBACCO PRODUCTS.

       (a) Cigars.--Section 5701(a) of the Internal Revenue Code 
     of 1986 is amended--
       (1) by striking ``$1.828 cents per thousand ($1.594 cents 
     per thousand on cigars removed during 2000 or 2001)'' in 
     paragraph (1) and inserting ``$50.00 per thousand'',
       (2) by striking ``20.719 percent (18.063 percent on cigars 
     removed during 2000 or 2001)'' in paragraph (2) and inserting 
     ``53.13 percent'', and
       (3) by striking ``$48.75 per thousand ($42.50 per thousand 
     on cigars removed during 2000 or 2001)'' in paragraph (2) and 
     inserting ``$3.00 per cigar''.
       (b) Cigarettes.--Section 5701(b) of such Code is amended--

[[Page S10976]]

       (1) by striking ``$19.50 per thousand ($17 per thousand on 
     cigarettes removed during 2000 or 2001)'' in paragraph (1) 
     and inserting ``$50.00 per thousand'', and
       (2) by striking ``$40.95 per thousand ($35.70 per thousand 
     on cigarettes removed during 2000 or 2001)'' in paragraph (2) 
     and inserting ``$104.9999 cents per thousand''.
       (c) Cigarette Papers.--Section 5701(c) of such Code is 
     amended by striking ``1.22 cents (1.06 cents on cigarette 
     papers removed during 2000 or 2001)'' and inserting ``3.13 
     cents''.
       (d) Cigarette Tubes.--Section 5701(d) of such Code is 
     amended by striking ``2.44 cents (2.13 cents on cigarette 
     tubes removed during 2000 or 2001)'' and inserting ``6.26 
     cents''.
       (e) Smokeless Tobacco.--Section 5701(e) of such Code is 
     amended--
       (1) by striking ``58.5 cents (51 cents on snuff removed 
     during 2000 or 2001)'' in paragraph (1) and inserting 
     ``$1.50'', and
       (2) by striking ``19.5 cents (17 cents on chewing tobacco 
     removed during 2000 or 2001)'' in paragraph (2) and inserting 
     ``50 cents''.
       (f) Pipe Tobacco.--Section 5701(f) of such Code is amended 
     by striking ``$1.0969 cents (95.67 cents on pipe tobacco 
     removed during 2000 or 2001)'' and inserting ``$2.8126 
     cents''.
       (g) Roll-Your-Own Tobacco.--Section 5701(g) of such Code is 
     amended by striking ``$1.0969 cents (95.67 cents on roll-
     your-own tobacco removed during 2000 or 2001)'' and inserting 
     ``$8.8889 cents''.
       (h) Floor Stocks Taxes.--
       (1) Imposition of tax.--On tobacco products and cigarette 
     papers and tubes manufactured in or imported into the United 
     States which are removed before January 1, 2008, and held on 
     such date for sale by any person, there is hereby imposed a 
     tax in an amount equal to the excess of--
       (A) the tax which would be imposed under section 5701 of 
     the Internal Revenue Code of 1986 on the article if the 
     article had been removed on such date, over
       (B) the prior tax (if any) imposed under section 5701 of 
     such Code on such article.
       (2) Credit against tax.--Each person shall be allowed as a 
     credit against the taxes imposed by paragraph (1) an amount 
     equal to $500. Such credit shall not exceed the amount of 
     taxes imposed by paragraph (1) on January 1, 2008, for which 
     such person is liable.
       (3) Liability for tax and method of payment.--
       (A) Liability for tax.--A person holding tobacco products, 
     cigarette papers, or cigarette tubes on January 1, 2008, to 
     which any tax imposed by paragraph (1) applies shall be 
     liable for such tax.
       (B) Method of payment.--The tax imposed by paragraph (1) 
     shall be paid in such manner as the Secretary shall prescribe 
     by regulations.
       (C) Time for payment.--The tax imposed by paragraph (1) 
     shall be paid on or before April 1, 2008.
       (4) Articles in foreign trade zones.--Notwithstanding the 
     Act of June 18, 1934 (commonly known as the Foreign Trade 
     Zone Act, 48 Stat. 998, 19 U.S.C. 81a et seq.) or any other 
     provision of law, any article which is located in a foreign 
     trade zone on January 1, 2008, shall be subject to the tax 
     imposed by paragraph (1) if--
       (A) internal revenue taxes have been determined, or customs 
     duties liquidated, with respect to such article before such 
     date pursuant to a request made under the 1st proviso of 
     section 3(a) of such Act, or
       (B) such article is held on such date under the supervision 
     of an officer of the United States Customs and Border 
     Protection of the Department of Homeland Security pursuant to 
     the 2d proviso of such section 3(a).
       (5) Definitions.--For purposes of this subsection--
       (A) In general.--Any term used in this subsection which is 
     also used in section 5702 of the Internal Revenue Code of 
     1986 shall have the same meaning as such term has in such 
     section.
       (B) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury or the Secretary's delegate.
       (6) Controlled groups.--Rules similar to the rules of 
     section 5061(e)(3) of such Code shall apply for purposes of 
     this subsection.
       (7) Other laws applicable.--All provisions of law, 
     including penalties, applicable with respect to the taxes 
     imposed by section 5701 of such Code shall, insofar as 
     applicable and not inconsistent with the provisions of this 
     subsection, apply to the floor stocks taxes imposed by 
     paragraph (1), to the same extent as if such taxes were 
     imposed by such section 5701. The Secretary may treat any 
     person who bore the ultimate burden of the tax imposed by 
     paragraph (1) as the person to whom a credit or refund under 
     such provisions may be allowed or made.
       (i) Effective Date.--The amendments made by this section 
     shall apply to articles removed (as defined in section 
     5702(j) of the Internal Revenue Code of 1986) after December 
     31, 2007.

     SEC. 702. ADMINISTRATIVE IMPROVEMENTS.

       (a) Permit, Report, and Record Requirements for 
     Manufacturers and Importers of Processed Tobacco.--
       (1) Permits.--
       (A) Application.--Section 5712 of the Internal Revenue Code 
     of 1986 is amended by inserting ``or processed tobacco'' 
     after ``tobacco products''.
       (B) Issuance.--Section 5713(a) of such Code is amended by 
     inserting ``or processed tobacco'' after ``tobacco 
     products''.
       (2) Inventories and reports.--
       (A) Inventories.--Section 5721 of such Code is amended by 
     inserting ``, processed tobacco,'' after ``tobacco 
     products''.
       (B) Reports.--Section 5722 of such Code is amended by 
     inserting ``, processed tobacco,'' after ``tobacco 
     products''.
       (3) Records.--Section 5741 of such Code is amended by 
     inserting ``, processed tobacco,'' after ``tobacco 
     products''.
       (4) Manufacturer of processed tobacco.--Section 5702 of 
     such Code is amended by adding at the end the following new 
     subsection:
       ``(p) Manufacturer of Processed Tobacco.--
       ``(1) In general.--The term `manufacturer of processed 
     tobacco' means any person who processes any tobacco other 
     than tobacco products.
       ``(2) Processed tobacco.--The processing of tobacco shall 
     not include the farming or growing of tobacco or the handling 
     of tobacco solely for sale, shipment, or delivery to a 
     manufacturer of tobacco products or processed tobacco.''.
       (5) Conforming amendment.--Section 5702(k) of such Code is 
     amended by inserting ``, or any processed tobacco,'' after 
     ``nontaxpaid tobacco products or cigarette papers or tubes''.
       (6) Effective date.--The amendments made by this subsection 
     shall take effect on January 1, 2008.
       (b) Basis for Denial, Suspension, or Revocation of 
     Permits.--
       (1) Denial.--Paragraph (3) of section 5712 of such Code is 
     amended to read as follows:
       ``(3) such person (including, in the case of a corporation, 
     any officer, director, or principal stockholder and, in the 
     case of a partnership, a partner)--
       ``(A) is, by reason of his business experience, financial 
     standing, or trade connections or by reason of previous or 
     current legal proceedings involving a felony violation of any 
     other provision of Federal criminal law relating to tobacco 
     products, cigarette paper, or cigarette tubes, not likely to 
     maintain operations in compliance with this chapter,
       ``(B) has been convicted of a felony violation of any 
     provision of Federal or State criminal law relating to 
     tobacco products, cigarette paper, or cigarette tubes, or
       ``(C) has failed to disclose any material information 
     required or made any material false statement in the 
     application therefor.''.
       (2) Suspension or revocation.--Subsection (b) of section 
     5713 of such Code is amended to read as follows:
       ``(b) Suspension or Revocation.--
       ``(1) Show cause hearing.--If the Secretary has reason to 
     believe that any person holding a permit--
       ``(A) has not in good faith complied with this chapter, or 
     with any other provision of this title involving intent to 
     defraud,
       ``(B) has violated the conditions of such permit,
       ``(C) has failed to disclose any material information 
     required or made any material false statement in the 
     application for such permit,
       ``(D) has failed to maintain his premises in such manner as 
     to protect the revenue,
       ``(E) is, by reason of previous or current legal 
     proceedings involving a felony violation of any other 
     provision of Federal criminal law relating to tobacco 
     products, cigarette paper, or cigarette tubes, not likely to 
     maintain operations in compliance with this chapter, or
       ``(F) has been convicted of a felony violation of any 
     provision of Federal or State criminal law relating to 
     tobacco products, cigarette paper, or cigarette tubes,

     the Secretary shall issue an order, stating the facts 
     charged, citing such person to show cause why his permit 
     should not be suspended or revoked.
       ``(2) Action following hearing.--If, after hearing, the 
     Secretary finds that such person has not shown cause why his 
     permit should not be suspended or revoked, such permit shall 
     be suspended for such period as the Secretary deems proper or 
     shall be revoked.''.
       (c) Application of Internal Revenue Code Statute of 
     Limitations for Alcohol and Tobacco Excise Taxes.--Section 
     514(a) of the Tariff Act of 1930 (19 U.S.C. 1514(a)) is 
     amended by striking ``and section 520 (relating to refunds)'' 
     and inserting ``section 520 (relating to refunds), and 
     section 6501 of the Internal Revenue Code of 1986 (but only 
     with respect to taxes imposed under chapters 51 and 52 of 
     such Code)''.
       (d) Expansion of Definition of Roll-Your-Own Tobacco.--
       (1) In general.--Section 5702(o) of the Internal Revenue 
     Code of 1986 is amended by inserting ``or cigars, or for use 
     as wrappers thereof'' before the period at the end.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to articles removed (as defined in section 
     5702(j) of the Internal Revenue Code of 1986) after December 
     31, 2007.
       (e) Time of Tax for Unlawfully Manufactured Tobacco 
     Products.--Section 5703(b)(2) of such Code is amended by 
     adding at the end the following new subparagraph:
       ``(F) Special rule for unlawfully manufactured tobacco 
     products.--In the case of any tobacco products, cigarette 
     paper, or cigarette tubes produced in the United States at 
     any place other than the premises of a manufacturer of 
     tobacco products, cigarette paper, or cigarette tubes that 
     has filed the bond and obtained the permit required under 
     this chapter, tax shall be due and payable immediately upon 
     manufacture.''.

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

       Subparagraph (B) of section 401(1) of the Tax Increase 
     Prevention and Reconciliation Act of 2005 is amended by 
     striking ``114.50 percent'' and inserting ``113.25 percent''.

                       TITLE VIII--EFFECTIVE DATE

     SEC. 801. EFFECTIVE DATE.

       (a) In General.--Unless otherwise provided in this Act, 
     subject to subsection (b), the amendments made by this Act 
     shall take effect on October 1, 2007, and shall apply to 
     child health assistance and medical assistance provided on or 
     after that date without regard to whether or not final 
     regulations to carry out such amendments have been 
     promulgated by such date.

[[Page S10977]]

       (b) Exception for State Legislation.--In the case of a 
     State plan under title XIX or XXI of the Social Security Act, 
     which the Secretary determines requires State legislation in 
     order for the plan to meet the additional requirements 
     imposed by an amendment made by this Act, the State plan 
     shall not be regarded as failing to comply with the 
     requirements of such Act solely on the basis of its failure 
     to meet these additional requirements before the first day of 
     the first calendar quarter beginning after the close of the 
     first regular session of the State legislature that begins 
     after the date of enactment of this Act. For purposes of the 
     preceding sentence, in the case of a State that has a 2-year 
     legislative session, each year of the session shall be 
     considered to be a separate regular session of the State 
     legislature.
       Amend the title so as to read: ``An Act to amend title XXI 
     of the Social Security Act to reauthorize the State 
     Children's Health Insurance Program, and for other 
     purposes.''.

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