[Congressional Record (Bound Edition), Volume 153 (2007), Part 7]
[Senate]
[Pages 10510-10525]
[From the U.S. Government Publishing Office, www.gpo.gov]




  STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS--APRIL 25, 2007

      By Mr. ROCKEFELLER (for himself, Ms. Snowe, and Mr. Kennedy):
  S. 1224. A bill to amend title XXI of the Social Security Act to 
reauthorize the State Children's Health Insurance Program, and for 
other purposes; to the Committee on Finance.
  Mr. KENNEDY. Mr. President, when we enacted the Children's Health 
Insurance Program a decade ago, we made a promise to low-income working 
families to assist them in obtaining health insurance coverage for 
their children, and we must continue to keep that promise. Today, with 
Senators Rockefeller and Snowe, I am pleased to introduce The 
Children's Health Insurance Program Reauthorization Act of 2007.
  CHIP has been a significant success, and has made a real difference 
in many children's lives. Over the past decade, the percentage of 
uninsured children has dropped dramatically, even though more and more 
of their parents have been losing coverage because employers decide to 
reduce it or drop it entirely.
  In its first year, the program enrolled nearly a million children, 
and enrollment has grown ever since. Average monthly enrollment is now 
4 million, and over 6 million have been enrolled for at least part of 
the year.
  We know CHIP has made a difference in the lives of millions of 
children, but we also know that this is no time to rest on past 
success. We can and must do more to enroll the 6 million uninsured 
children who are eligible but not enrolled for CHIP and Medicaid, and 
to expand coverage so that all children can obtain the health care they 
need.
  The bill we are introducing today reauthorizes the program and it 
will make sure that states have enough funds to provide health care to 
all children who need this assistance. No parents should be faced with 
the impossible decision of whether they can afford to take their sick 
child to the doctor.
  The bill establishes a strong, reliable financing structure for CHIP. 
It more than doubles the Federal resources currently available over the 
next 5 years for covering children through CHIP. It ensures that all 
states will have the Federal matching funds needed both to sustain 
their existing programs and to move forward to cover the millions of 
children who are eligible for CHIP and Medicaid but remain unenrolled.
  Millions of uninsured children in America isn't just wrong. It's 
unacceptable. We need to act now in getting to guarantee them the 
health coverage they need.
  This bill adopts a variety of approaches to help states increase 
their enrollment. It strengthens CHIP by expanding the current program, 
improving its outreach, and making sure that all children have access 
to dental care and mental health services, so that good health care can 
be a reality for every child in America.
  Quality health care for children isn't just a good option or a nice 
idea. It's not merely something we wish we could do. It's something we 
have to do. It's an obligation. We started earlier this year by 
pledging what is needed in the budget, but we also need a CHIP 
reauthorization that gives children the coverage we've promised them 
for the healthy future they deserve. The bill we're introducing today 
does that.
  There's a reason the CHIP program has always enjoyed bipartisan 
support. It's because all of us know how important it is that all 
children have the chance to get a healthy start in life. I look forward 
to working to make sure all children get the health care they need, and 
I urge my colleagues to support this bill.
  Mr. ROCKEFELLER. Mr. President, this week is Cover the Uninsured 
Week.

[[Page 10511]]

And, I cannot think of a more appropriate time to introduce the 
legislation that Senators Olympia Snowe, Ted Kennedy, and I introduced 
yesterday--the Children's Health Insurance Program (CHIP) 
Reauthorization Act of 2007 (S. 1224). There are more than 45 million 
uninsured people in our country today, and 9 million of them--20 
percent--are children. This is an embarrassing statistic for the 
wealthiest country in the world, and it has catastrophic consequences 
for our children.
  In 1964, when I first came to West Virginia as a VISTA volunteer in 
Emmons, I was shocked to learn that many of the school-age children 
living there had never been to a dentist before. I made raising health 
care standards one of my first priorities in Emmons, and we ultimately 
got a bus to bring children to the Tiskelwah grade school in Charleston 
for dental care. Now, more than 30 years later, there are still 
children in West Virginia and throughout the Nation without access to 
adequate dental care.
  Several weeks ago, millions across the country mourned the death of 
twelve year old Deamonte Driver, whose lack of dental care led to fatal 
brain infection. His death was a sad reminder of how our country 
continues to fail in its efforts to ensure access to vital medical care 
for our nation's youth. Yet, Deamonte was not the only child to succumb 
to the perils of inadequate health coverage. There are countless other 
children who have suffered the same fate. We must make universal 
coverage for children a national priority and reauthorization of CHIP 
is the first step in that process.
  When CHIP was established in 1997, nearly 10 million children were 
uninsured. Congress responded by making a landmark, bipartisan 
commitment to help states provide comprehensive health insurance 
coverage to millions of these children. As a result, 6 million children 
have access to medical benefits through CHIP that they would have 
otherwise been forced to do without. I am proud to have been a part of 
CHIP's creation, and I am especially proud of the progress this program 
has made in providing working families an affordable and dependable 
option for protecting the health and well-being of their children. A 
healthy start in life is a necessary component in preparing our 
children to lead healthy, happy and productive lives in the future.
  Today, however, we find ourselves in a situation strikingly similar 
to the dilemma we faced in 1997--more than 9 million children are 
currently without health insurance in this country. In fact, in 2005, 
the number of uninsured children increased for the first time since 
CHIP was enacted. This means that, despite our best efforts, we have 
taken a step backwards in terms of covering children. We cannot allow 
this trend to continue. Instead, we must make covering children a top 
priority--just like we did in 1997.
  The CHIP Reauthorization Act makes health insurance coverage for 
children a priority. Not only does this important legislation renew and 
strengthen the commitment we made to our working families 10 years ago; 
it also provides significant new Federal resources for states to reach 
the 6 million additional children who are currently eligible for 
Medicaid and CHIP, but unenrolled. With many states already leading the 
charge on children's health and the additional federal support this 
legislation provides them, the Nation will be able to take another 
substantial step forward toward ensuring that all of America's children 
have comprehensive health insurance.
  Our bill strengthens the underlying CHIP financing formula to provide 
states a stable and reliable source of funding for their efforts to 
cover more uninsured children. It also combines a variety of 
approaches, such as Express Lane eligibility, to help states enroll 
more uninsured kids who are currently eligible for CHIP or Medicaid. 
These innovative approaches will allow states to reach millions of 
additional children, particularly in rural parts of the country.
  I am especially proud of our efforts to permit states to provide more 
meaningful coverage for children by including other vital benefits like 
dental care and mental health services. I have already talked about the 
importance of oral health for a child, but I'd also like to say 
something about children's mental health. I spend a lot of time with 
veterans, many who suffer from Post-Traumatic Stress Disorder (PTSD), 
and when those veterans get home, their children often suffer as well. 
We also need to consider the mental health of our children more 
broadly. Children are living in very tough times. They face enormous 
amounts of mental pressure from a variety of sources. If the Virginia 
Tech tragedy taught us anything, it taught us that we need to hug our 
children everyday and that we need to get appropriate help for our 
children when they have mental health needs, no matter how big or 
small.
  While I had hoped that we could require Early Periodic Screening 
Diagnostic and Treatment (EPDST) services as part of this bill, I 
believe we were able to reach an appropriate compromise that will help 
us to achieve broad bipartisan support. I am still as committed as I 
ever have been to including EPDST services in CHIP. However, Senators 
Snowe, Kennedy, and I wanted to craft a bill that could pass the 
Senate, and we believe we have achieved that objective.
  A final component of our legislation that I would like to highlight 
are the important steps we take to develop child-focused quality 
measures that will directly improve the coverage provided to children 
enrolled in CHIP. We establish a new child health quality initiative to 
enhance data collection, identify best practices, develop a pediatric 
electronic medical record, and disseminate health quality information. 
We hope this new initiative will greatly improve the health outcomes of 
children.
  In closing, I'd like for our country to get to the point where we 
never have to have another Cover the Uninsured Week again. Of course I 
greatly appreciate all the wonderful work the Robert Wood Johnson 
Foundation has done over the years to raise awareness about the 
uninsured problem. My hope is that we will eventually have universal 
coverage for all. Certainly, we can take the first step toward 
achieving that goal by providing health care coverage for all of our 
Nation's children.
  With this reauthorization bill, Congress now has an opportunity to 
make profound positive changes in the lives of millions of American 
children and their families. I urge my colleagues to join us in 
supporting the passage of the CHIP Reauthorization Act of 2007.
  I ask that the text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1224

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

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

       (a) Short Title.--This Act may be cited as the ``Children's 
     Health Insurance Program (CHIP) 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) 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; table of 
              contents.
Sec. 2. Findings.

     TITLE I--MAKING CHILDREN'S HEALTH COVERAGE A NATIONAL PRIORITY

Sec. 101. Providing necessary funding for CHIP.

                   TITLE II--IMPROVING CHIP FINANCING

Sec. 201. State CHIP allotments that are responsive to health care 
              costs, population growth, and the needs of low-income 
              uninsured children.

[[Page 10512]]

Sec. 202. 2-year initial availability of CHIP allotments for all States 
              and territories
Sec. 203. Establishment of timely and responsive redistribution 
              process.
Sec. 204. Improving funding for the territories under CHIP and 
              Medicaid.
Sec. 205. Extension of authority for qualifying States to use CHIP 
              allotments for certain Medicaid expenditures.
Sec. 206. State option to expand coverage of children under CHIP up to 
              300 percent of the poverty line.
Sec. 207. Requiring responsible CHIP enrollment growth.

 TITLE III--ENROLLING UNINSURED CHILDREN ELIGIBLE FOR CHIP AND MEDICAID

Sec. 301. ``Express Lane'' option for States to determine components of 
              a child's eligibility for Medicaid or CHIP.
Sec. 302. Information technology connections to simplify health 
              coverage determinations.
Sec. 303. Enhanced administrative funding for translation or 
              interpretation services.
Sec. 304. Enhanced assistance with coverage costs for States with 
              increasing or high coverage rates among children.
Sec. 305. Elimination of counting Medicaid child presumptive 
              eligibility costs against title XXI allotment.
Sec. 306. State option to require certain individuals to present 
              satisfactory documentary evidence of proof of citizenship 
              or nationality for purposes of eligibility for Medicaid.

                 TITLE IV--START HEALTHY, STAY HEALTHY

Sec. 401. State option to expand or add coverage of certain pregnant 
              women under Medicaid and CHIP.
Sec. 402. Coordination with the maternal and child health program.
Sec. 403. Optional coverage of legal immigrants under Medicaid and 
              CHIP.
Sec. 404. Improving benchmark coverage options.
Sec. 405. Requiring coverage of dental and mental health services.
Sec. 406. Clarification of requirement to provide EPSDT services for 
              all children in benchmark benefit packages under 
              Medicaid.
Sec. 407. Childhood obesity demonstration project.

         TITLE V--IMPROVING ACCESS TO HEALTH CARE FOR CHILDREN

Sec. 501. Promoting children's access to covered health services.
Sec. 502. Institute of Medicine study and report on children's access 
              to health care.

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

Sec. 601. Strengthening child health quality improvement activities.
Sec. 602. Application of certain managed care quality safeguards to 
              CHIP.

                     TITLE VII--OTHER IMPROVEMENTS

Sec. 701. Strengthening premium assistance programs.
Sec. 702. Permitting coverage of children of State employees.
Sec. 703. Improving data collection.
Sec. 704. Moratorium on application of PERM requirements related to 
              eligibility reviews during period of independent study 
              and report.
Sec. 705. Elimination of confusing program references.

                       TITLE VIII--EFFECTIVE DATE

Sec. 801. Effective date.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The state children's health insurance program (chip) 
     and medicaid have greatly improved children's coverage rates 
     and access to needed health care services.--
       (A) CHIP and Medicaid serve as the critical health care 
     safety net for 34,000,000 children over the course of a year, 
     with 28,000,000 children enrolled in Medicaid and more than 
     6,000,000 children enrolled in CHIP.
       (B) CHIP and Medicaid have accounted for a \1/3\ decline in 
     the rate of uninsured low-income children since 1997.
       (C) During the recent economic downturn, and as the number 
     of uninsured people has climbed to the highest number ever 
     recorded in the United States, CHIP and Medicaid offset 
     losses in employer-sponsored coverage that affected children 
     and parents alike.
       (D) While the number of children living in low-income 
     families increased between 2000 and 2005, the number of 
     uninsured children fell due to Medicaid and CHIP.
       (E) Children enrolled in CHIP or Medicaid are much more 
     likely to have a usual source of care than uninsured 
     children, and are much more likely than uninsured children to 
     receive well-child care, see a doctor during the year, and 
     get dental care. Studies have found that children enrolled in 
     public insurance programs experienced significant improvement 
     in measures of school performance.
       (F) Since CHIP was created, coverage rates have increased 
     significantly among children of all ethnic and racial groups.
       (G) According to one Federal evaluation of CHIP, uninsured 
     children who gained coverage through the program received 
     more preventive care, and their parents reported better 
     access to providers and improved communications with their 
     children's doctors.
       (2) Even with the success of chip and medicaid, more needs 
     to be done to improve the health status of our nation's 
     children.--
       (A) There are currently 9,000,000 uninsured children under 
     age 19, accounting for nearly 20 percent of our Nation's 
     uninsured.
       (B) Approximately 7 out of every 10 uninsured children are 
     eligible for CHIP or Medicaid.
       (C) The cost of unmet health needs among children extends 
     beyond measurable health system costs. For example, problems 
     that could be prevented, managed, or treated with regular 
     access to care can become more serious, resulting in lower 
     school attendance and increased health care costs.
       (D) Reducing the number of uninsured children in our 
     country is an essential first step to improve health status. 
     CHIP reauthorization presents an opportunity to secure health 
     care coverage for more children who are eligible for CHIP or 
     Medicaid but not yet enrolled.
       (3) We must maintain coverage for the children currently 
     enrolled in chip.--
       (A) When CHIP was created in 1997, Congress allocated 
     $40,000,000,000 for the 10-year authorization.
       (B) At current funding levels, nearly 2,000,000 children 
     are at risk of losing their CHIP coverage over the next 5 
     years because the current CHIP financing structure is 
     inadequate and States are facing CHIP funding shortfalls.
       (C) We must eliminate Federal funding shortfalls by 
     providing States with significant new Federal resources for 
     children's health coverage.
       (D) CHIP reauthorization offers an opportunity to increase 
     CHIP funding and to provide stable, predictable Federal 
     funding so that States not only have the ability to maintain 
     their current caseloads but also to expand coverage to 
     currently unenrolled children.
       (4) We must reach the uninsured children who are already 
     eligible for chip or medicaid but unenrolled.--
       (A) More than 6,000,000 uninsured children are eligible for 
     CHIP or Medicaid at any point during the year.
       (B) In some States, it is estimated that up to 50 percent 
     of children covered through CHIP do not remain in the program 
     due to reenrollment barriers.
       (C) Difficult renewal policies and reenrollment barriers 
     make seamless coverage in CHIP unattainable. Studies indicate 
     that as many as 67 percent of children who were eligible but 
     not enrolled in CHIP or Medicaid had applied for coverage but 
     were denied eligibility due to procedural issues.
       (D) States have tools at their disposal to streamline 
     enrollment procedures, but further Federal changes would help 
     States reach more children.
       (E) Insuring parents is an effective way to increase 
     children's participation in public programs and to increase 
     children's access to health care services.
       (F) To reduce the number of uninsured children, improve our 
     children's health, and continue our progress in reducing 
     health disparities, the reauthorization of CHIP should 
     provide States with the tools and resources necessary to 
     identify, enroll, and maintain coverage for children who are 
     eligible for CHIP or Medicaid.
       (5) We must support and encourage states that are leading 
     the way with initiatives to cover more children.--
       (A) States in every region of the country are seeking to 
     move forward in covering more children, either by reaching 
     already eligible children or further expanding eligibility.
       (B) The Federal government should serve as a partner in 
     these efforts by providing sufficient funding to solidify and 
     strengthen this momentum.
       (6) We must promote high-quality health care that promotes 
     children's healthy development.--
       (A) Children and adolescents deserve better quality care 
     than what they currently receive.
       (B) Most States report using some kind of measure to 
     evaluate and improve the quality of care children receive 
     through their CHIP and Medicaid programs. However, State 
     efforts are often hampered by budget constraints, limitations 
     on information technology systems, and a need for improved 
     measurement tools and performance measurement standards.
       (C) As we improve access to health coverage as part of CHIP 
     reauthorization, Congress also has an opportunity to enhance 
     quality by improving and standardizing data collection 
     efforts.

[[Page 10513]]

       (7) We must support policies that strengthen and expand 
     health insurance coverage.--
       (A) There are more than 46,000,000 uninsured Americans 
     today.
       (B) No one who is currently covered should lose coverage 
     because of changes to CHIP or Medicaid as part of the 
     reauthorization of CHIP.
       (C) Coverage of parents through family coverage waivers 
     furthers the objectives of CHIP in that it promotes 
     children's enrollment, positively impacts children's 
     utilization of services, and improves family well-being.
       (D) Coverage of parents through family coverage waivers is 
     also consistent with long-standing CHIP policy - the explicit 
     authorization in the CHIP statute for the Secretary to grant 
     waivers that are consistent with the objectives of CHIP, the 
     parent waiver guidelines for CHIP issued by the Secretary, 
     and the flexibility broadly accorded states through CHIP.
       (E) Parent coverage waivers have been granted to States 
     that have made a commitment to cover children first and then 
     to use funding to cover low-income parents.
       (F) Research indicates that having an uninsured parent not 
     only decreases the likelihood that a child will have a well-
     child visit, it also decreases the likelihood that a child 
     will see any medical provider at all.
       (G) We strongly support maintaining the current flexibility 
     under CHIP that permits family coverage through waivers to 
     cover parents, while assuring that children remain the 
     primary focus of CHIP.

     TITLE I--MAKING CHILDREN'S HEALTH COVERAGE A NATIONAL PRIORITY

     SEC. 101. PROVIDING NECESSARY FUNDING FOR CHIP.

       Section 2104(a) (42 U.S.C. 1397dd(a)) is amended--
       (1) in paragraph (9), by striking ``and'' at the end;
       (2) in paragraph (10), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following new paragraphs:
       ``(11) for fiscal year 2008, $8,525,000,000;
       ``(12) for fiscal year 2009, $10,075,000,000;
       ``(13) for fiscal year 2010, $11,250,000,000;
       ``(14) for fiscal year 2011, $13,150,000,000;
       ``(15) for fiscal year 2012, $15,400,000,000; and
       ``(16) for fiscal year 2013 and each fiscal year 
     thereafter, the total allotment amount appropriated under 
     this subsection for the preceding fiscal year, multiplied by 
     the adjustment determined for such fiscal year under 
     subsection (i)(2)(C).''.

                   TITLE II--IMPROVING CHIP FINANCING

     SEC. 201. STATE CHIP ALLOTMENTS THAT ARE RESPONSIVE TO HEALTH 
                   CARE COSTS, POPULATION GROWTH, AND THE NEEDS OF 
                   LOW-INCOME UNINSURED CHILDREN.

       (a) In General.--Section 2104 (42 U.S.C. 1397dd) is amended 
     by adding at the end the following new subsection:
       ``(i) Annual Allotments for States Other Than Territories 
     Beginning With Fiscal Year 2008.--
       ``(1) In general.--Subject to paragraph (4), of the total 
     allotment amount appropriated under subsection (a) for a 
     fiscal year beginning with fiscal year 2008 and remaining 
     available after the application of subsection (j) and 
     subsection (c)(5), the Secretary shall allot to each State 
     (as defined for purposes of this subsection in paragraph (5)) 
     the sum of the following:
       ``(A) The coverage factor, as determined under paragraph 
     (2), based on the State's prior spending adjusted for health 
     care cost growth and child population growth.
       ``(B) The uninsured children factor, as determined under 
     paragraph (3), based on the number of low-income children 
     without health insurance in the State, adjusted for 
     geographic variation in health care costs.
       ``(2) Coverage factor.--
       ``(A) In general.--For purposes of paragraph (1)(A), 
     subject to subparagraphs (B) and (D), the coverage factor 
     determined for a State is equal to the following:
       ``(i) Fiscal year 2008.--For fiscal year 2008, the higher 
     of the following:

       ``(I) The total Federal payments to the State under this 
     title for fiscal year 2007, multiplied by the annual 
     adjustment determined under subparagraph (C) for that fiscal 
     year.
       ``(II) The amount allotted to the State for fiscal year 
     2007 under subsection (b), multiplied by the annual 
     adjustment determined under subparagraph (C) for that fiscal 
     year.
       ``(III) The projected total Federal payments to the State 
     under this title for fiscal year 2007, as reported by the 
     State to the Secretary by the State as of November 2006 (or 
     the projected total Federal payments to the State under this 
     title for fiscal year 2007 as reported by the State to the 
     Secretary as of May 2006 if the projected total Federal 
     payments to the State under this title for such fiscal year 
     were at least $95,000,000 higher than such projected payments 
     as of November 2006), multiplied by the annual adjustment 
     determined under subparagraph (C) for that fiscal year.
       ``(IV) The projected total Federal payments to the State 
     under this title for fiscal year 2008, as reported by the 
     State to the Secretary by the State as of February 2007.

       ``(ii) Fiscal year 2009.--For fiscal year 2009, the amount 
     determined under clause (i), multiplied by the annual 
     adjustment determined under subparagraph (C) for that fiscal 
     year.
       ``(iii) Fiscal year 2010 and each second succeeding fiscal 
     year; providing for rebasing.--Subject to subparagraphs (B) 
     and (D), for fiscal year 2010 and each second succeeding 
     fiscal year, the total Federal payments to the State under 
     this title for the previous fiscal year attributable to any 
     allotments available to the State in such fiscal year under 
     paragraph (1) and subsection (b) multiplied by the annual 
     adjustment determined under subparagraph (C) for that fiscal 
     year.
       ``(iv) Fiscal year 2011 and each second succeeding fiscal 
     year.--For fiscal year 2011 and each second succeeding fiscal 
     year, the amount determined under clause (iii) for the 
     preceding fiscal year, multiplied by the annual adjustment 
     determined under subparagraph (C) for the State for that 
     fiscal year.
       ``(B) Limitation and minimums.--
       ``(i) In general.--Subject to clause (ii), if the total of 
     the coverage factors determined under subparagraph (A) for 
     all States exceed in any fiscal year the total allotment 
     amount under subsection (a) for a fiscal year beginning with 
     fiscal year 2008 remaining available after the application of 
     subsections (c)(5) and (j)(2)(C), each State's coverage 
     factor shall be equal to the total allotment amount under 
     subsection (a) for a fiscal year remaining available after 
     application of such subsections, multiplied by the ratio of--

       ``(I) the amount of the State's coverage factor determined 
     under subparagraph (A); to
       ``(II) the total of such coverage factors for all States 
     for such fiscal year.

       ``(ii) Mimimum coverage factor.--At a minimum, the coverage 
     factor for a State for a fiscal year shall not be less than 
     the lesser of--

       ``(I) the State's total Federal payments attributable to 
     any allotments available to the State in the prior fiscal 
     year under paragraph (1) and subsection (b), multiplied by 
     the annual adjustment determined under subparagraph (C) for 
     that fiscal year; and
       ``(II) the total allotment for the State under paragraph 
     (1) for the prior fiscal year, multiplied by the annual 
     adjustment determined under subparagraph (C) for that fiscal 
     year.

       ``(C) Annual adjustment for health care cost growth and 
     child population growth.--The annual adjustment with respect 
     to a State for any fiscal year 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 such fiscal year over the 
     preceding fiscal year, as most recently published by the 
     Secretary before the beginning of the fiscal year involved.
       ``(ii) Child population growth.--1.01 plus the percentage 
     increase in the population of children under 19 years of age 
     in the United States from July 1 of the previous fiscal year 
     to July 1 of the fiscal year involved, as determined by the 
     Secretary based on the most recent published estimates of the 
     Bureau of the Census before the beginning of the fiscal year 
     involved.
       ``(D) Rebasing rule for fiscal year 2010 and each second 
     succeeding fiscal year for certain states.--
       ``(i) In general.--For fiscal year 2010 and each second 
     succeeding fiscal year, a State receiving reallocated funds 
     under subsection (j) in the prior fiscal year shall receive 
     an additional spending amount equal to the proportion 
     (determined under clause (ii)) of the total allotment amount 
     under subsection (a) for such fiscal year remaining available 
     after the application of subsections (c)(5) and (j)(2)(C), 
     and subparagraphs (A) and (B), if any, multiplied by the 
     ratio of--

       ``(I) the total Federal payments to the State under this 
     title for the previous fiscal year attributable to any funds 
     made available to the State in the previous fiscal year under 
     subsection (j), multiplied by the annual adjustment 
     determined under subparagraph (C) for the fiscal year; to
       ``(II) the total of such payments for all States for the 
     previous fiscal year.

       ``(ii) Proportion.--For purposes of clause (i), the 
     proportion shall equal--

       ``(I) for fiscal year 2010, 20 percent; and
       ``(II) for fiscal year 2012 and each second succeeding 
     fiscal year, 40 percent.

       ``(3) Uninsured children factor.--
       ``(A) In general.--For purposes of paragraph (1)(B), 
     subject to subparagraph (B), the uninsured children factor 
     for a State is equal to the total allotment amount under 
     subsection (a) for a fiscal year beginning with fiscal year 
     2008, remaining available after application of subsections 
     (c)(5) and (j)(2)(C) and paragraph (2), multiplied by the 
     following:
       ``(i) Fiscal year 2008 and each second succeeding fiscal 
     year.--In the case of fiscal year 2008, and each second 
     succeeding fiscal year, the ratio of--

       ``(I) the uninsured children adjustment for the State 
     determined under subparagraph (B); to
       ``(II) the sum of the uninsured children adjustments for 
     all States determined under subparagraph (B).

[[Page 10514]]

       ``(ii) Fiscal year 2009 and each second succeeding fiscal 
     year.--In the case of fiscal year 2009, and each second 
     succeeding fiscal year, the ratio determined under clause (i) 
     for the previous fiscal year.
       ``(B) Uninsured children adjustment.--The uninsured 
     children adjustment determined under this subparagraph for a 
     State is equal to the product of the following:
       ``(i) Number of low-income children without health 
     insurance.--The average of the number of low-income children 
     under 19 years of age in the State with no health insurance 
     for a fiscal year, as reported and defined in the 2 most 
     recent March supplement to the Current Population Survey of 
     the Bureau of the Census available prior to the beginning of 
     such fiscal year.
       ``(ii) Geographic variation in health care costs.--The 
     adjustment for geographic variation in health care costs, as 
     determined under subsection (b)(3).
       ``(4) Data.--In computing the amounts under paragraphs (2) 
     and (3) and subsection (c)(5) that determine the allotments 
     to States for each fiscal year, the Secretary shall use the 
     most recent expenditure data for the prior year available to 
     the Secretary before the start of each 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 of each fiscal year but in no case 
     shall the Secretary adjust the allotments provided under this 
     subsection or subsection (c)(5) for a fiscal year after 
     December 31 of such year.
       ``(5) State defined.--In this subsection, the term `State' 
     means one 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)''; and
       (2) in subsection (b)--
       (A) in paragraph (1), by striking ``subsection (d)'' and 
     inserting ``subsections (d), (h), and (i)''; and
       (B) in paragraph (3)(A), by inserting ``and subsection 
     (i)(3)(D)(ii)'' after ``paragraph (1)(A)(ii)''.
       (3) in subsection (c)(1), by striking ``subsection (d)'' 
     and inserting ``subsections (d), (h), and (i)''.

     SEC. 202. 2-YEAR INITIAL AVAILABILITY OF CHIP ALLOTMENTS FOR 
                   ALL STATES AND TERRITORIES.

       Section 2104(e) (42 U.S.C. 1397dd(e)) is amended to read as 
     follows:
       ``(e) Availability of Amounts Allotted.--Subject to 
     paragraphs (3) and (4) of subsection (j), amounts allotted to 
     a State pursuant to subsections (b), (c), or (i)--
       ``(1) for each of fiscal years 1998 through 2007, shall 
     remain available for expenditure by the State through the end 
     of the second succeeding fiscal year; and
       ``(2) for fiscal year 2008 and each fiscal year thereafter, 
     shall remain available for expenditure by the State through 
     the end of the succeeding fiscal year.''.

     SEC. 203. ESTABLISHMENT OF TIMELY AND RESPONSIVE 
                   REDISTRIBUTION PROCESS.

       (a) In General.--Section 2104 (42 U.S.C. 1397dd), as 
     amended by section 201, is amended by adding at the end the 
     following new subsection:
       ``(j) Timely and Responsive Redistributions Beginning With 
     Fiscal Year 2008.--
       ``(1) Reallocation to states facing federal funding 
     shortfalls.--
       ``(A) In general.--Notwithstanding subsection (f), in each 
     fiscal year quarter of fiscal year 2008 and each subsequent 
     fiscal year, the Secretary shall reallocate to a shortfall 
     State described in subparagraph (D) from the funds available 
     under paragraph (2) an amount equal to the projected amount 
     of the shortfall for the fiscal year. The Secretary shall 
     only make such a reallocation under this paragraph to the 
     extent that there are amounts available under paragraph (2).
       ``(B) Proration rule.--If the amounts available under 
     paragraph (2) for any fiscal year quarter for reallocation 
     under subparagraph (A) are less than the total shortfall 
     amounts for the fiscal year determined under subparagraph 
     (A), the reallocated amount to each shortfall State shall be 
     reduced proportionally.
       ``(C) Availability of reallocated funds.--Any funds made 
     available to a shortfall State described in subparagraph (D) 
     shall remain available to such State through the end of the 
     fiscal year in which such funds are reallocated.
       ``(D) Shortfall state described.--For purposes of 
     subparagraph (A), a shortfall State is a State (as defined in 
     subsection (i)(5)) that has a State child health plan 
     approved under this title (or waiver of such title approved 
     by the Secretary) for which the Secretary estimates on a 
     quarterly basis using the most recent data available to the 
     Secretary as of such quarter, that the projected expenditures 
     under such plan (or waiver) for the State for the fiscal year 
     will exceed the sum of--
       ``(i) the amount of the allotments provided under 
     subsection (b) or (i) in fiscal years preceding such fiscal 
     year that remain available to the State;
       ``(ii) the amount of the allotment under subsection (i) for 
     such fiscal year to the State; and
       ``(iii) the amount of any reallocated funds made available 
     under subparagraph (A) in previous quarters of such fiscal 
     year to the State.
       ``(2) Amounts available for reallocation.--Amounts 
     available for reallocation in any fiscal year under this 
     subsection shall equal the sum of the following:
       ``(A) Any allotments remaining unexpended after the period 
     of availability under subsection (e).
       ``(B) Any amounts available for reallocation and remaining 
     unexpended at the end of the previous fiscal year under 
     paragraph (3).
       ``(C) Subject to paragraph (4), 5 percent of the total 
     amount available under subsection (a) for such fiscal year.
       ``(3) Continued availability of unexpended reallocated 
     funds.--Any unexpended amounts reallocated to a shortfall 
     State remaining available after the period of availability 
     under paragraph (1)(C) and any amounts available for 
     redistribution in a fiscal year that are not reallocated to a 
     shortfall State because the total amount available for 
     reallocation exceeds the total of all reallocated amounts 
     under paragraph (1)(A) shall remain available for 
     reallocation until expended.
       ``(4) Limits on withholding from total allotments for 
     purposes of reallocation.--If the Secretary determines that 
     the total amounts available for reallocation under paragraph 
     (2) for a fiscal year exceeds 10 percent of the total amount 
     available under subsection (a) for that fiscal year, the 
     Secretary shall reduce the percentage under paragraph (2)(C) 
     accordingly so that the total amount available for 
     reallocation under paragraph (2) for the fiscal year does not 
     exceed 10 percent of the total amount available under 
     subsection (a) for such fiscal year.''.

     SEC. 204. 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 ``subsection (d)''; 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 and remaining available after the application of 
     subsection (j), 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)(C) for 
     the fiscal year.
       ``(B) Fiscal year 2009 and succeeding fiscal years.--For 
     fiscal year 2009 and each succeeding fiscal year, the amount 
     determined under clause (i), multiplied by the annual 
     adjustment determined under subsection (i)(2)(C) for the 
     fiscal year.
       ``(6) Redistributions for territories facing federal 
     funding shortfalls.--Notwithstanding subsection (f), the 
     Secretary shall determine an appropriate procedure for 
     reallocating to each commonwealth or territory described in 
     paragraph (3) that would, with respect to each fiscal year 
     quarter of fiscal year 2008 be a shortfall State described in 
     subsection (j)(1)(D) if such subsection applied to such 
     commonwealth or territory, from the funds available under 
     subsection (j)(2) for such fiscal year, the same proportion 
     as the proportion of the commonwealth's or territory's 
     allotment under paragraph (2 ) to such percentage (not to 
     exceed 1.05 percent) as the Secretary determines appropriate 
     of such funds.''.
       (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 year 2008 and each fiscal 
     year thereafter, if Puerto Rico, the Virgin Islands, Guam, 
     the Northern Mariana Islands, or American Samoa qualify for a 
     payment under subparagraph (A)(i), (A) (iii), (A)(iv), or (B) 
     of section 1903(a)(3) for a calendar quarter of such fiscal 
     year, the limitation on expenditures under title XIX for such 
     commonwealth or territory otherwise determined under 
     subsection (f) and this subsection for such fiscal year shall 
     be determined without regard to such payment.''.
       (c) GAO Study and Report.--Not later than September 30, 
     2009, the Comptroller General of the United States shall 
     submit a report to Congress regarding Federal funding under 
     Medicaid and the State Children's Health Insurance Program 
     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--

[[Page 10515]]

       (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 the State Children's Health Insurance Program 
     for such commonwealths and territories.

     SEC. 205. EXTENSION OF AUTHORITY FOR QUALIFYING STATES TO USE 
                   CHIP ALLOTMENTS FOR CERTAIN MEDICAID 
                   EXPENDITURES.

       Section 2105(g)(1)(A) (42 U.S.C. 1397ee(g)(1)(A)), as 
     amended by section 201(b) of the National Institutes of 
     Health Reform Act of 2006 (Public Law 109-482) is amended by 
     striking ``not more than 20 percent of any allotment under 
     section 2104 for fiscal year 1998, 1999, 2000, 2001, 2004, 
     2005, 2006, or 2007'' and inserting ``any allotment under 
     subsection (b) or (i) of section 2104 for a fiscal year''.

     SEC. 206. STATE OPTION TO EXPAND COVERAGE OF CHILDREN UNDER 
                   CHIP UP TO 300 PERCENT OF THE POVERTY LINE.

       Section 2110(b)(1)(B) (42 U.S.C. 1397jj(b)(1)(B)) is 
     amended--
       (1) in clause (i), by striking ``, or'' at the end and 
     inserting a semicolon;
       (2) in clause (ii)(III), by striking ``and'' at the end and 
     inserting ``or''; and
       (3) by adding at the end the following new clause:
       ``(iii) is a child--
       ``(I) whose family income (as determined under the State 
     child health plan) does not exceed 300 percent of the poverty 
     line for a family of the size involved; or
       ``(II) whose family income exceeds 300 percent of the 
     poverty line but does not exceed 50 percentage points above 
     the effective income level (expressed as a percent of the 
     poverty line and considering applicable income disregards) 
     applied under the State child health plan on the date of 
     enactment of this clause; and''.

     SEC. 207. REQUIRING RESPONSIBLE CHIP ENROLLMENT GROWTH.

       (a) Limitation on Approval of Proposed Plan Amendments.--
     Section 2106(b)(3)(B) (42 U.S.C. 1397ff(b)(3)(B)) is amended 
     by adding at the end the following new clause:
       ``(iii) Amendments to expand eligibility beyond highest 
     income eligibility permitted.--Any plan amendment that would 
     allow funds made available under this title to be used to 
     provide child health assistance or other health benefits 
     coverage for a child whose family income exceeds the highest 
     income eligibility level permitted under section 
     2110(b)(1)(B)(iii) (in this clause referred to as an 
     `expansion amendment') may not take effect, and shall not 
     remain in effect, unless the Secretary determines that the 
     following conditions are met:

       ``(I) Uninsured rate for low-income children is below the 
     national average.--With respect to each fiscal year in which 
     the expansion amendment is in effect, the percentage of low-
     income children without private health coverage who are 
     uninsured is below the national average percentage of such 
     children, for the most recent year for which such data is 
     available (as determined by the Secretary on the basis of the 
     2 most recent Annual Social and Economic Supplements of the 
     Current Population Survey of the Bureau of the Census).
       ``(II) Open enrollment; maintenance of eligibility 
     standards.--The State does not impose any numerical 
     limitation, waiting list, or similar limitation on 
     eligibility for targeted low-income children described in 
     section 2110(b)(1)(B)(iii) under the State child health plan, 
     or to make more restrictive the eligibility standards for 
     such children, while the expansion amendment is in effect.
       ``(III) Implementation of simplified outreach and 
     enrollment procedures.--The State submitting the expansion 
     amendment has implemented procedures to effectively enroll 
     and retain children eligible for medical assistance under 
     title XIX and children eligible for child health assistance 
     under this title by adopting and effectively implementing 
     with respect to such children at least 3 of the following 
     policies and procedures under title XIX and this title:

       ``(aa) Joint application and renewal process that permits 
     application other than in person.--The 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 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.
       ``(bb) No assets test.--The State does not apply any assets 
     test for eligibility under title XIX and this title with 
     respect to children.
       ``(cc) 12-months continuous eligibility.--The State has 
     elected the option of continuous eligibility for a full 12 
     months for children described in section 1902(e)(12) under 
     title XIX, and applies such option under this title.
       ``(dd) Presumptive eligibility for children.--The State has 
     implemented the option, for purposes of title XIX and this 
     title, of applying presumptive eligibility for children in 
     accordance with sections 1920A and 2107(e)(1)(F).

       ``(IV) Annual reporting of measures of quality of health 
     care for children.--The State satisfies the requirements of 
     section 1905(y)(2)(B)(iv) (relating to annual reporting of 
     measures of quality of health care for children under title 
     XIX and this title).''.

       (b) Application to Waivers.--Section 2107(f) (42 U.S.C. 
     1397gg(f)) is amended--
       (1) by striking ``, the Secretary'' and inserting ``:
       ``(1) The Secretary''; and
       (2) by adding at the end the following new paragraph:
       ``(2) The Secretary may not approve a waiver, experimental, 
     pilot, or demonstration project with respect to a State that 
     would allow funds made available under this title to be used 
     to provide child health assistance or other health benefits 
     coverage for a child whose family income exceeds the highest 
     income eligibility level permitted under section 
     2110(b)(1)(B)(iii) (in this paragraph referred to as an 
     `expansion waiver') unless the Secretary determines that the 
     conditions described in each of subclauses (I) through (IV) 
     of section 2106(b)(3)(B)(iii) are met (and determines on an 
     ongoing basis, that such conditions continue to be met while 
     the expansion waiver is in effect).''.

 TITLE III--ENROLLING UNINSURED CHILDREN ELIGIBLE FOR CHIP AND MEDICAID

     SEC. 301. ``EXPRESS LANE'' OPTION FOR STATES TO DETERMINE 
                   COMPONENTS OF A CHILD'S ELIGIBILITY FOR 
                   MEDICAID OR CHIP.

       (a) Medicaid.--Section 1902(e) (42 U.S.C. 1396a(e)) is 
     amended by adding at the end the following new paragraph:
       ``(13)(A)(i) At the option of the State, notwithstanding 
     any other provision of law, including subsection (a)(46)(B) 
     and sections 1137(d) and 1903(x), the State may rely on a 
     determination made within a reasonable period (as determined 
     by the State) by an Express Lane agency (as defined in 
     subparagraph (F)(i)) to determine whether an individual has 
     met the income, assets or resources, or citizenship status 
     criteria for eligibility for medical assistance under this 
     title (including under a waiver of the requirements of this 
     title).
       ``(ii) The option under clause (i) shall apply to 
     redeterminations or renewals of eligibility for medical 
     assistance, as well as to initial applications for such 
     assistance.
       ``(iii) The option under clause (i) shall apply to a child 
     who is under an age specified by the State (not to exceed 21 
     years of age) and, at State option, may also apply to an 
     individual who is not a child.
       ``(B) Nothing in this paragraph shall be construed to 
     relieve a State of the obligation to determine eligibility 
     for medical assistance under this title if an individual is 
     determined ineligible for such assistance on the basis of 
     information furnished pursuant to this paragraph.
       ``(C) A State shall inform an individual (or, in the case 
     of a child, the family of the child) enrolled in the State 
     plan under this title and required to pay premiums for such 
     enrollment based on an income determination furnished to the 
     State pursuant to this paragraph that the individual or 
     family may qualify for lower premium payments if directly 
     evaluated for eligibility by the State Medicaid agency.
       ``(D) If a State applies the eligibility process described 
     in subparagraph (A) to individuals eligible for medical 
     assistance under this title, the State may, at its option, 
     implement its duties under subparagraphs (A) and (B) of 
     section 2102(b)(3) using either or both of the following 
     approaches:
       ``(i) The State may--
       ``(I) establish a threshold percentage of the Federal 
     poverty level (that shall exceed the income eligibility level 
     applicable for a population of individuals under this title 
     by 30 percentage points (as a fraction of the Federal poverty 
     level) or such other higher number of percentage points as 
     the State determines reflects the typical application of 
     income methodologies by the program administered by the 
     Express Lane agency and the State plan under this title); and
       ``(II) provide that, with respect to any individual within 
     such population whom an Express Lane agency determines has 
     income that does not exceed such threshold percentage for 
     such population, such individual is eligible for medical 
     assistance under this title (regardless of whether such 
     individual would otherwise be determined to be eligible to 
     receive such assistance).
     In exercising the approach under this clause, a State shall 
     inform families whose children are enrolled in a State child 
     health plan under title XXI based on having family income 
     above the threshold described in subclause (I) that they may 
     qualify for medical assistance under this title and, at their 
     option, can seek a regular eligibility determination for such 
     assistance for their child,

[[Page 10516]]

     and that if their child is determined to be eligible for such 
     assistance, the child may receive health benefits coverage 
     that is more affordable and comprehensive than the coverage 
     that would be provided to the child under the State child 
     health plan.
       ``(ii) Regardless of whether a State otherwise provides for 
     presumptive eligibility under section 1920A, a State may 
     provide presumptive eligibility under this title, consistent 
     with subsection (e) of section 1920A, to a child who, based 
     on a determination by an Express Lane agency, would qualify 
     for child health assistance under a State child health plan 
     under title XXI. During such presumptive eligibility period, 
     the State may determine the child's eligibility for medical 
     assistance under this title, pursuant to subparagraph (A) of 
     section 2102(b)(3), based on telephone contact with family 
     members, access to data available in electronic or paper 
     form, and other means of gathering information that are less 
     burdensome to the family than completing an application form 
     on behalf of the child. The procedures described in the 
     previous sentence may be used regardless of whether the State 
     uses similar procedures under other circumstances for 
     purposes of determining eligibility for medical assistance 
     under this title.
       ``(E)(i) At the option of a State, an individual determined 
     to be eligible for medical assistance pursuant to 
     subparagraph (A), (C), or (D) or other procedures through 
     which eligibility is determined based on data obtained from 
     sources other than the individual, may receive medical 
     assistance under this title if such individual (or, in the 
     case of an individual under age 19 (or if the State elects 
     the option under subparagraph (A), age 20 or 21) who is not 
     authorized to consent to medical care, the individual's 
     parent, guardian, or other caretaker relative) has 
     acknowledged notice of such determination and has consented 
     to being enrolled in the State plan under this title. The 
     State (at its option) may waive any otherwise applicable 
     requirements for signatures by or on behalf of an individual 
     who has so consented.
       ``(ii) In the case of an individual enrolled pursuant to 
     clause (i), the State shall inform the individual (or, in the 
     case of an individual under age 19 (or if the State elects 
     the option under subparagraph (A), age 20 or 21), the 
     individual's parent, guardian, or other caretaker relative) 
     about the significance of such enrollment, including 
     appropriate methods to access covered services.
       ``(F) In this paragraph, the term `Express Lane agency' 
     means a Federal or State agency, or a public or private 
     entity making such determination on behalf of such agency, 
     specified by the plan, including an agency administering the 
     State program funded under part A of title IV, the State 
     child health plan under title XXI, the Food Stamp Act of 
     1977, the Richard B. Russell National School Lunch Act, or 
     the Child Nutrition Act of 1966, notwithstanding any 
     differences in budget unit, disregard, deeming, or other 
     methodology, but only if--
       ``(i) the agency or entity has fiscal liabilities or 
     responsibilities affected by such determination;
       ``(ii) the agency or entity notifies the child's family--
       ``(I) of the information which shall be disclosed in 
     accordance with this paragraph;
       ``(II) that the information disclosed will be used solely 
     for purposes of determining eligibility for medical 
     assistance under this title or for child health assistance 
     under title XXI;
       ``(III) that interagency agreements limit the use of such 
     information to such purposes; and
       ``(IV) that the family may elect to not have the 
     information disclosed for such purposes; and
       ``(iii) the requirements of section 1939 are satisfied.''.
       (b) CHIP.--Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is 
     amended by redesignating subparagraphs (B) through (D) as 
     subparagraphs (C) through (E), respectively, and by inserting 
     after subparagraph (A) the following new subparagraph:
       ``(B) Section 1902(e)(13) (relating to the State option to 
     base a determination of a child's eligibility for assistance 
     on determinations made by an agency other than the State 
     Medicaid agency.''.
       (c) Presumptive Eligibility.--Section 1920A(b)(3)(A)(i) (42 
     U.S.C. 1396r-1a(b)(3)(A)(i)) is amended by striking ``or 
     (IV)'' and inserting ``(IV) is an agency or entity described 
     in section 1902(e)(13)(F), or (V)''.
       (d) Signature Requirements.--Section 1902(a) (42 U.S.C. 
     1396a(a)) is amended by adding at the end the following new 
     sentence: ``Notwithstanding any other provision of law, a 
     signature under penalty of perjury shall not be required on 
     an application form for medical assistance as to any element 
     of eligibility for which eligibility is based on information 
     received from a source other than an applicant, rather than 
     on representations from the applicant. Notwithstanding any 
     other provision of law, any signature requirement for an 
     application for medical assistance may be satisfied through 
     an electronic signature, as defined in section 1710(1) of the 
     Government Paperwork Elimination Act (44 U.S.C. 3504 
     note).''.

     SEC. 302. INFORMATION TECHNOLOGY CONNECTIONS TO SIMPLIFY 
                   HEALTH COVERAGE DETERMINATIONS.

       (a) Enhanced Administrative Funding for Information 
     Technology Used to Simplify Eligibility Determinations.--
     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) 75 percent of so much of the sums expended during 
     such quarter as are attributable to information technology 
     needed to conduct data matches or for the exchange of 
     electronic information with an Express Lane agency (as 
     defined in 1902(e)(13)(F)) as the Secretary determines is 
     directly related to reducing the need for an individual 
     undergoing an eligibility determination for medical 
     assistance under this title or child health assistance under 
     title XXI (including a determination of a renewal of 
     eligibility for such assistance) to provide information 
     previously submitted by or on behalf of the individual to 
     such agency, and''.
       (b) Authorization of Information Disclosure.--
       (1) In general.--Title XIX (42 U.S.C. 1396 et seq.) is 
     amended--
       (A) by redesignating section 1939 as section 1940; and
       (B) 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 potentially pertinent to 
     eligibility determinations under this title (including 
     eligibility files maintained by Express Lane agencies 
     described in section 1902(e)(13)(F), information described in 
     paragraph (2) or (3) of section 1137(a), vital records 
     information about births in any State, and information 
     described in sections 453(i) and 1902(a)(25)(I)) is 
     authorized to convey such data or information to the State 
     agency administering the State plan under this title, if--
       ``(1) such data or information are used only to establish 
     or verify eligibility or provide coverage under this title; 
     and
       ``(2) an interagency or other agreement, consistent with 
     standards developed by the Secretary, prevents the 
     unauthorized use, disclosure, or modification of such data 
     and otherwise meets applicable Federal requirements 
     safeguarding privacy and data security.
       ``(b) Requirements for Conveyance.--Data or information may 
     be conveyed pursuant to this section only if the following 
     requirements are met:
       ``(1) The individual whose circumstances are described in 
     the data or information (or such individual's parent, 
     guardian, caretaker relative, or authorized representative) 
     has either provided advance consent to disclosure or has not 
     objected to disclosure after receiving advance notice of 
     disclosure and a reasonable opportunity to object.
       ``(2) Such data or information are used solely for the 
     purposes of--
       ``(A) identifying individuals who are eligible or 
     potentially eligible for medical assistance under this title 
     and enrolling such individuals in the State plan; and
       ``(B) verifying the eligibility of individuals for medical 
     assistance under the State plan.
       ``(3) An interagency or other agreement, consistent with 
     standards developed by the Secretary--
       ``(A) prevents the unauthorized use, disclosure, or 
     modification of such data and otherwise meets applicable 
     Federal requirements safeguarding privacy and data security; 
     and
       ``(B) requires the State agency administering the State 
     plan to use the data and information obtained under this 
     section to seek to enroll individuals in the plan.
       ``(c) Criminal Penalty.--A person described in the 
     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).''.
       (2) Conforming amendment to title xxi.--Section 2107(e)(1) 
     (42 U.S.C. 1397gg(e)(1)), as amended by section 301(b), is 
     amended by adding at the end the following new subparagraph:
       ``(F) Section 1939 (relating to authorization to receive 
     data potentially pertinent to eligibility determinations).''.
       (3) Conforming amendment to assure access to national new 
     hires database.--Section 453(i)(1) (42 U.S.C. 653(i)(1)) is 
     amended by striking ``and programs funded under part A'' and 
     inserting ``, programs funded under part A, and State plans 
     approved under title XIX or XXI''.
       (4) Conforming amendment to provide chip programs with 
     access to national income data.--Section 6103(l)(7)(D)(ii) of 
     the

[[Page 10517]]

     Internal Revenue Code of 1986 is amended by inserting ``or 
     title XXI'' after ``title XIX''.
       (5) Conforming amendment to provide access to data about 
     enrollment in insurance for purposes of evaluating 
     applications and for chip.--Section 1902(a)(25)(I)(i) (42 
     U.S.C. 1396a(a)(25)(I)(i)) is amended--
       (A) by inserting ``(and, at State option, individuals who 
     are potentially eligible or who apply)'' after ``with respect 
     to individuals who are eligible''; and
       (B) by inserting ``under this title (and, at State option, 
     child health assistance under title XXI)'' after ``the State 
     plan''.

     SEC. 303. ENHANCED ADMINISTRATIVE FUNDING FOR TRANSLATION OR 
                   INTERPRETATION SERVICES.

       Section 1903(a)(2) (42 U.S.C. 1396b(a)(2)) is amended by 
     adding at the end the following new subparagraph:
       ``(E) an amount equal to 75 percent of so much of the sums 
     expended during such quarter (as found necessary by the 
     Secretary for the proper and efficient administration of the 
     State plan) as are attributable to translation or 
     interpretation services in connection with the enrollment and 
     use of services under this title by individuals for whom 
     English is not their primary language; plus''.

     SEC. 304. ENHANCED ASSISTANCE WITH COVERAGE COSTS FOR STATES 
                   WITH INCREASING OR HIGH COVERAGE RATES AMONG 
                   CHILDREN.

       Section 1905 (42 U.S.C. 1396d) is amended--
       (1) in subsection (b), in the first sentence--
       (A) by striking ``and (4)'' and inserting ``(4)''; and
       (B) by inserting ``, and (5) the Federal medical assistance 
     percentage with respect to medical assistance provided to 
     individuals who have not attained age 19 for a fiscal year 
     shall be increased, notwithstanding the previous clauses of 
     this sentence, in the case of a State that meets the 
     conditions described in subparagraph (A) of subsection (y)(1) 
     in the preceding fiscal year by the number of percentage 
     points determined under subparagraph (B) of that subsection, 
     in the case of a State that is described in subparagraph (A) 
     of subsection (y)(2) in the preceding fiscal year, by the 
     number of percentage points determined under subparagraph (D) 
     of that subsection, and, in the case of a State described in 
     both such subparagraphs in the preceding fiscal year, by the 
     greater of the number of percentage points determined under 
     paragraph (1)(B) or (2)(D) of subsection (y)'' before the 
     period; and
       (2) by adding at the end the following new subsection:
       ``(y) Determination of Increase in FMAP for Medical 
     Assistance for Children for Certain States.--
       ``(1) For states significantly increasing enrollment of 
     eligible children.--
       ``(A) Significant increase in enrollment of eligible 
     children.--
       ``(i) In general.--For purposes of clause (5) of the first 
     sentence of subsection (b), a State described in this 
     paragraph is a State that satisfies the reporting 
     requirements described in clause (iii) and has a percentage 
     increase in the child caseload in the reference year over the 
     initial reference year that exceeds the benchmark rate of 
     growth.
       ``(ii) Definitions.--For purposes of clause (i):

       ``(I) Child caseload.--The term `child caseload' means the 
     average monthly enrollment of individuals under age 19 in the 
     State plan under this title or under a waiver of such title, 
     as determined by the Secretary.
       ``(II) Initial reference year.--The term `initial reference 
     year' means the 12-month period preceding August 1, 2007.
       ``(III) Reference year.--The term `reference year' means, 
     with respect to a fiscal year, the 12-month period preceding 
     August 1 of such fiscal year.
       ``(IV) Benchmark rate of growth.--The term `benchmark rate 
     of growth' means, with respect to a fiscal year, the product 
     of the projected rate of growth of children in Medicaid at 
     time of enactment, multiplied by the number of fiscal years 
     that have elapsed since the initial reference year.
       ``(V) Projected rate of growth of children in medicaid at 
     time of enactment.--The term `projected rate of growth of 
     children in Medicaid at time of enactment' means the average 
     annual rate of growth for children enrolled in all State 
     plans under this title (or under waivers of such title) 
     during the period beginning with fiscal year 2007 and ending 
     with fiscal year 2010, as projected in March 2007 by the 
     Director of the Congressional Budget Office.

       ``(iii) State reporting requirements.--The State shall 
     submit to the Secretary such data relating to the average 
     monthly enrollment of individuals who have not attained age 
     19 under this title and title XXI (including under waivers of 
     such titles) as the Secretary shall specify for the purpose 
     of increasing under clause (5) of subsection (b) the Federal 
     medical assistance percentage for a State for a fiscal year 
     in accordance with this subsection.
       ``(B) Determination of increase.--
       ``(i) In general.--Subject to clause (ii), for purposes of 
     clause (5) of the first sentence of subsection (b), in the 
     case of a State described in subparagraph (A), the number of 
     percentage points determined under this subparagraph is equal 
     to the percentage increase in the State child caseload 
     determined for purposes of subparagraph (A)(i).
       ``(ii) Limitation on increase.--In no event may the Federal 
     medical assistance percentage for a State for a fiscal year 
     exceed 85 percent as a result of an increase under this 
     paragraph.
       ``(C) Secretarial responsibilities.--
       ``(i) Review and verification of child caseload data.--The 
     Secretary shall review the child caseload data provided by 
     States for purposes of this paragraph and shall conduct data 
     matches on a periodic basis to verify the child caseloads 
     determined for States.
       ``(ii) Notice to states.--Not later than September 30 of 
     each fiscal year beginning with fiscal year 2008, the 
     Secretary shall inform each State on the extent to which the 
     child caseload in the most recent reference year exceeds or 
     does not exceed the benchmark rate of growth for such fiscal 
     year.
       ``(2) For states that have achieved at least a high 
     participation rate for coverage of uninsured low-income 
     children.--
       ``(A) In general.--For purposes of clause (5) of the first 
     sentence of subsection (b), a State described in this 
     paragraph is a State--
       ``(i) for which the percentage of low-income children 
     without private health coverage who are uninsured (as 
     determined under subparagraph (D)) is at least 90 percent; 
     and
       ``(ii) that satisfies the conditions described in 
     subparagraph (B) (with respect to coverage of children under 
     this title and title XXI) and paragraph (1)(A)(iii).
       ``(B) Conditions described.--The conditions described in 
     this subparagraph are the following:
       ``(i) Continuous eligibility requirement.--The State has 
     elected the option of continuous eligibility for a full 12 
     months for children described in section 1902(e)(12) under 
     this title, as well as applying such policy under its State 
     child health plan under title XXI.
       ``(ii) No waiting list for title xxi.--The State does not 
     impose any numerical limitation, waiting list, or similar 
     limitation on eligibility for assistance under title XXI and 
     has not imposed any such limitation or list within the 
     preceding 3 years.
       ``(iii) No assets test.--The State does not apply any 
     assets test for eligibility under this title or title XXI 
     with respect to children.
       ``(iv) Annual reporting of measures of quality of health 
     care for children.--The State annually reports on the 
     measures required under section 601 of the Children's Health 
     Insurance Program (CHIP) Reauthorization Act of 2007 with 
     respect to the quality of health care for children under the 
     State plan under this title and the State child health plan 
     under title XXI or is otherwise determined by the Secretary 
     to have implemented a comprehensive system for gathering 
     information and reporting on the quality of health care for 
     children enrolled under such plans.
       ``(C) Determination of increase.--
       ``(i) In general.--Subject to clause (ii), for purposes of 
     clause (5) of the first sentence of subsection (b), in the 
     case of a State described in subparagraph (A), the number of 
     percentage points determined under this subparagraph is equal 
     to the number of percentage points by which the percentage 
     described in subparagraph (A)(i) exceeds 90 percent.
       ``(ii) Limitation on increase.--In no event may the Federal 
     medical assistance percentage for a State for a fiscal year 
     exceed 85 percent as a result of an increase under this 
     paragraph.
       ``(D) Secretarial responsibilities.--
       ``(i) Determination of state rates.--The rates described in 
     subparagraph (A)(i) shall be determined by the Secretary on 
     the basis of the 2 most recent Annual Social and Economic 
     Supplements of the Current Population Survey of the Bureau of 
     the Census.
       ``(ii) Notice to states.--Not later than September 30 of 
     each fiscal year beginning with fiscal year 2008, the 
     Secretary shall inform each State on the extent to which the 
     State's participation rate among uninsured low-income 
     children exceeds or does not exceed 90 percent.
       ``(3) Increase in cap on payments to territories.--If 
     Puerto Rico, the Virgin Islands, Guam, the Northern Mariana 
     Islands, or American Samoa qualify for an increase in the 
     Federal medical assistance percentage under subsection (b)(5) 
     for a fiscal year, the additional Federal financial 
     participation under this title that results from such 
     increase shall not be counted towards the limitation on total 
     payments under this title for such commonwealth or territory 
     otherwise determined under subsections (f) and (g) of section 
     1108.
       ``(4) Scope of application.--The increase in the Federal 
     medical assistance percentage under subsection (b)(5) shall 
     only apply for purposes of payments under section 1903 with 
     respect to medical assistance provided to individuals who 
     have not attained age 19 and shall not apply with respect 
     to--
       ``(A) disproportionate share hospital payments described in 
     section 1923;
       ``(B) payments under title IV or XXI; or
       ``(C) any payments under this title that are based on the 
     enhanced FMAP described in section 2105(b).''.

[[Page 10518]]



     SEC. 305. 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. 306. STATE OPTION TO REQUIRE CERTAIN INDIVIDUALS TO 
                   PRESENT SATISFACTORY DOCUMENTARY EVIDENCE OF 
                   PROOF OF CITIZENSHIP OR NATIONALITY FOR 
                   PURPOSES OF ELIGIBILITY FOR MEDICAID.

       (a) In General.--Section 1902(a)(46) (42 U.S.C. 
     1396a(a)(46)) is amended--
       (1) by inserting ``(A)'' after ``(46)'';
       (2) by adding ``and'' after the semicolon; and
       (3) by adding at the end the following new subparagraph:
       ``(B) at the option of the State and subject to section 
     1903(x), require that, with respect to an individual (other 
     than an individual described in section 1903(x)(1)) who 
     declares to be a citizen or national of the United States for 
     purposes of establishing initial eligibility for medical 
     assistance under this title (or, at State option, for 
     purposes of renewing or redetermining such eligibility to the 
     extent that such satisfactory documentary evidence of 
     citizenship or nationality has not yet been presented), there 
     is presented satisfactory documentary evidence of citizenship 
     or nationality of the individual (using criteria determined 
     by the State, which shall be no more restrictive than the 
     criteria used by the Social Security Administration to 
     determine citizenship, and which shall accept as such 
     evidence 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, and, 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, such other forms of documentation (including tribal 
     documentation, if appropriate) that the Secretary, after 
     consulting with such tribes, determines to be satisfactory 
     documentary evidence of citizenship or nationality for 
     purposes of satisfying the requirement of this 
     subparagraph));''.
       (b) 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.
       (c) Conforming Amendments.--Section 1903 (42 U.S.C. 1396b) 
     is amended--
       (1) in subsection (i)--
       (A) in paragraph (20), by adding ``or'' after the 
     semicolon;
       (B) in paragraph (21), by striking ``; or'' and inserting a 
     period; and
       (C) by striking paragraph (22); and
       (2) in subsection (x) (as amended by section 405(c)(1)(A) 
     of division B of the Tax Relief and Health Care Act of 2006 
     (Public Law 109-432))--
       (A) by striking paragraphs (1) and (3);
       (B) by redesignating paragraph (2) as paragraph (1);
       (C) in paragraph (1), as so redesignated, by striking 
     ``paragraph (1)'' and inserting ``section 1902(a)(46)(B)''; 
     and
       (D) by adding at the end the following new paragraph:
       ``(2) 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), the individual shall be provided at least the 
     reasonable opportunity to present satisfactory documentary 
     evidence of citizenship or nationality under this subsection 
     as is provided under clauses (i) and (ii) of section 
     1137(d)(4)(A) to an individual for the submittal to the State 
     of evidence indicating a satisfactory immigration status.''.
       (d) Clarification of Rules for Children Born in the United 
     States to Mothers Eligible for Medicaid.--Section 1903(x) (42 
     U.S.C. 1396b(x)), as amended by subsection (c)(2), is 
     amended--
       (1) in paragraph (1)--
       (A) in subparagraph (C), by striking ``or'' at the end;
       (B) by redesignating subparagraph (D) as subparagraph (E); 
     and
       (C) 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
       (2) by adding at the end the following new paragraph:
       ``(3) 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.''.
       (e) Effective Date.--
       (1) Retroactive application.--The amendments made by this 
     section shall take effect as if included in the enactment of 
     the Deficit Reduction Act of 2005 (Public Law 109-171; 120 
     Stat. 4).
       (2) Restoration of eligibility.--In the case of an 
     individual who, during the period that began on July 1, 2006, 
     and ends on the date of enactment of this Act, was determined 
     to be ineligible for medical assistance under a State 
     Medicaid program 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 this section, 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.

                 TITLE IV--START HEALTHY, STAY HEALTHY

     SEC. 401. STATE OPTION TO EXPAND OR ADD COVERAGE OF CERTAIN 
                   PREGNANT WOMEN UNDER MEDICAID AND CHIP.

       (a) Medicaid.--
       (1) Authority to expand coverage.--Section 1902(l)(2)(A)(i) 
     (42 U.S.C. 1396a(l)(2)(A)(i)) is amended by inserting ``(or 
     such higher percentage as the State may elect for purposes of 
     expenditures for medical assistance for pregnant women 
     described in section 1905(u)(4)(A))'' after ``185 percent''.
       (2) Enhanced matching funds available if certain conditions 
     met.--Section 1905 (42 U.S.C. 1396d) is amended--
       (A) in the fourth sentence of subsection (b), by striking 
     ``or subsection (u)(3)'' and inserting ``, (u)(3), or 
     (u)(4)''; and
       (B) in subsection (u)--
       (i) by redesignating paragraph (4) as paragraph (5); and
       (ii) by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) For purposes of the fourth sentence of subsection (b) 
     and section 2105(a), the expenditures described in this 
     paragraph are the following:
       ``(A) Certain pregnant women.--If the conditions described 
     in subparagraph (B) are met, expenditures for medical 
     assistance for pregnant women described in subsection (n) or 
     in section 1902(l)(1)(A) in a family the income of which 
     exceeds 185 percent of the poverty line, but does not exceed 
     the income eligibility level established under title XXI for 
     a targeted low-income child.
       ``(B) Conditions.--The conditions described in this 
     subparagraph are the following:
       ``(i) The State plans under this title and title XXI do not 
     provide coverage for pregnant women described in subparagraph 
     (A) with higher family income without covering such pregnant 
     women with a lower family income.
       ``(ii) The State does not apply an effective income level 
     for pregnant women that is lower than the effective income 
     level (expressed as a percent of the poverty line and 
     considering applicable income disregards) specified under the 
     State plan under subsection (a)(10)(A)(i)(III) or (l)(2)(A) 
     of section 1902, on the date of enactment of this paragraph 
     to be eligible for medical assistance as a pregnant woman.
       ``(C) Definition of poverty line.--In this subsection, the 
     term `poverty line' has the meaning given such term in 
     section 2110(c)(5).''.
       (3) Payment from title xxi allotment for medicaid expansion 
     costs.--Section 2105(a)(1) (42 U.S.C. 1397ee(a)(1)), as 
     amended by section 305, is amended by striking subparagraph 
     (B) and inserting the following new subparagraph:
       ``(B) for the portion of the payments made for expenditures 
     described in section 1905(u)(4)(A) that represents the 
     additional amount paid for such expenditures as a result of 
     the enhanced FMAP being substituted for the Federal medical 
     assistance percentage of such expenditures;''.
       (b) CHIP.--
       (1) Coverage.--Title XXI (42 U.S.C. 1397aa et seq.) is 
     amended by adding at the end the following new section:

     ``SEC. 2111. OPTIONAL COVERAGE OF TARGETED LOW-INCOME 
                   PREGNANT WOMEN.

       ``(a) Optional Coverage.--Notwithstanding any other 
     provision of this title, a State may provide for coverage, 
     through an amendment to its State child health plan under 
     section 2102, of pregnancy-related assistance for targeted 
     low-income pregnant

[[Page 10519]]

     women in accordance with this section, but only if--
       ``(1) the State has established an income eligibility level 
     for pregnant women under subsection (a)(10)(A)(i)(III) or 
     (l)(2)(A) of section 1902 that is at least 185 percent of the 
     income official poverty line; and
       ``(2) the State meets the conditions described in section 
     1905(u)(4)(B).
       ``(b) Definitions.--For purposes of this title:
       ``(1) Pregnancy-related assistance.--The term `pregnancy-
     related assistance' has the meaning given the term `child 
     health assistance' in section 2110(a) as if any reference to 
     targeted low-income children were a reference to targeted 
     low-income pregnant women.
       ``(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 exceeds 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) or (l)(2)(A) of section 1902, 
     on January 1, 2008, to be eligible for medical assistance as 
     a pregnant woman under title XIX but does not exceed the 
     income eligibility level established under the State child 
     health plan under this title for a targeted low-income child; 
     and
       ``(C) who satisfies the requirements of paragraphs (1)(A), 
     (1)(C), (2), and (3) of section 2110(b) in the same manner as 
     a child applying for child health assistance would have to 
     satisfy such requirements.
       ``(c) References to Terms and Special Rules.--In the case 
     of, and with respect to, a State providing for coverage of 
     pregnancy-related assistance to targeted low-income pregnant 
     women under subsection (a), the following special rules 
     apply:
       ``(1) Any reference in this title (other than in subsection 
     (b)) to a targeted low-income child is deemed to include a 
     reference to a targeted low-income pregnant woman.
       ``(2) Any such reference to child health assistance with 
     respect to such women is deemed a reference to pregnancy-
     related assistance.
       ``(3) Any such reference to a child is deemed a reference 
     to a woman during pregnancy and the period described in 
     subsection (b)(2)(A).
       ``(4) In applying section 2102(b)(3)(B), any reference to 
     children found through screening to be eligible for medical 
     assistance under the State Medicaid plan under title XIX is 
     deemed a reference to pregnant women.
       ``(5) There shall be no exclusion of benefits for services 
     described in subsection (b)(1) based on any preexisting 
     condition and no waiting period (including any waiting period 
     imposed to carry out section 2102(b)(3)(C)) shall apply.
       ``(6) In applying section 2103(e)(3)(B) in the case of a 
     pregnant woman provided coverage under this section, the 
     limitation on total annual aggregate cost sharing shall be 
     applied to such pregnant woman.
       ``(7) The reference in section 2107(e)(1)(F) to section 
     1920A (relating to presumptive eligibility for children) is 
     deemed a reference to section 1920 (relating to presumptive 
     eligibility for pregnant women).
       ``(d) 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).''.
       (2) Additional conforming amendments.--
       (A) No cost sharing for pregnancy-related benefits.--
     Section 2103(e)(2) (42 U.S.C. 1397cc(e)(2)) is amended--
       (i) in the heading, by inserting ``or pregnancy-related 
     services'' after ``preventive services''; and
       (ii) by inserting before the period at the end the 
     following: ``or for pregnancy-related services''.
       (B) No waiting period.--Section 2102(b)(1)(B) (42 U.S.C. 
     1397bb(b)(1)(B)) is amended--
       (i) in clause (i), by striking ``, and'' at the end and 
     inserting a semicolon;
       (ii) in clause (ii), by striking the period at the end and 
     inserting ``; and''; and
       (iii) 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.''.
       (c) Other Amendments to Medicaid.--
       (1) Eligibility of a newborn.--Section 1902(e)(4) (42 
     U.S.C. 1396a(e)(4)) is amended in the first sentence by 
     striking ``so long as the child is a member of the woman's 
     household and the woman remains (or would remain if pregnant) 
     eligible for such assistance''.
       (2) Application of qualified entities to presumptive 
     eligibility for pregnant women under medicaid.--Section 
     1920(b) (42 U.S.C. 1396r-1(b)) is amended by adding after 
     paragraph (2) the following new flush sentence:

     ``The term `qualified provider' includes a qualified entity 
     as defined in section 1920A(b)(3).''.

     SEC. 402. COORDINATION WITH THE MATERNAL AND CHILD HEALTH 
                   PROGRAM.

       (a) In General.--Section 2102(b)(3) (42 U.S.C. 
     1397bb(b)(3)) is amended--
       (1) in subparagraph (D), by striking ``and'' at the end;
       (2) in subparagraph (E), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(F) that operations and activities under this title are 
     developed and implemented in consultation and coordination 
     with the program operated by the State under title V in areas 
     including outreach and enrollment, benefits and services, 
     service delivery standards, public health and social service 
     agency relationships, and quality assurance and data 
     reporting.''.
       (b) Conforming Medicaid Amendment.--Section 1902(a)(11) (42 
     U.S.C. 1396a(a)(11)) is amended--
       (1) by striking ``and'' before ``(C)''; and
       (2) by inserting before the semicolon at the end the 
     following: ``, and (D) provide that operations and activities 
     under this title are developed and implemented in 
     consultation and coordination with the program operated by 
     the State under title V in areas including outreach and 
     enrollment, benefits and services, service delivery 
     standards, public health and social service agency 
     relationships, and quality assurance and data reporting''.

     SEC. 403. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS UNDER 
                   MEDICAID AND CHIP.

       (a) Medicaid Program.--Section 1903(v) (42 U.S.C. 1396b(v)) 
     is amended--
       (1) in paragraph (1), by striking ``paragraph (2)'' and 
     inserting ``paragraphs (2) and (4)''; and
       (2) by adding at the end the following new paragraph:
       ``(4)(A) A State may elect (in a plan amendment under this 
     title) to provide medical assistance under this title, 
     notwithstanding sections 401(a), 402(b), 403, and 421 of the 
     Personal Responsibility and Work Opportunity Reconciliation 
     Act of 1996, for aliens who are lawfully residing in the 
     United States (including battered aliens described in section 
     431(c) of such Act) and who are otherwise eligible for such 
     assistance, within either or both of the following 
     eligibility categories:
       ``(i) Pregnant women.--Women during pregnancy (and during 
     the 60-day period beginning on the last day of the 
     pregnancy).
       ``(ii) Children.--Individuals under 21 years of age, 
     including optional targeted low-income children described in 
     section 1905(u)(2)(B).
       ``(B) In the case of a State that has elected to provide 
     medical assistance to a category of aliens under subparagraph 
     (A), no debt shall accrue under an affidavit of support 
     against any sponsor of such an alien on the basis of 
     provision of assistance to such category and the cost of such 
     assistance shall not be considered as an unreimbursed 
     cost.''.
       (b) CHIP.--Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)), as 
     amended by sections 301(b) and 302(b)(2), is amended by 
     redesignating subparagraphs (D), (E), and (F) as 
     subparagraphs (E), (F), and (G), respectively, and by 
     inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) Section 1903(v)(4) (relating to optional coverage of 
     categories of lawfully residing immigrant children), but only 
     if the State has elected to apply such section to the 
     category of children under title XIX.''.

     SEC. 404. IMPROVING BENCHMARK COVERAGE OPTIONS.

       (a) Limitation on Use of Secretary-Approved Coverage.--
     Section 2103(a)(4) (42 U.S.C. 1397cc(a)(4)) is amended by 
     striking the period at the end and inserting ``, but only if 
     such determination was made before March 1, 2007.''.
       (b) State Employee Coverage Benchmark.--Section 2103(b)(2) 
     (42 U.S.C. 1397(b)(2)) is amended--
       (1) by striking ``A health benefits coverage plan'' and 
     inserting ``The health benefits coverage plan''; and
       (2) by inserting ``and that has the largest enrollment 
     among such employees with dependent coverage in either of the 
     previous 2 plan years'' before the period.

     SEC. 405. REQUIRING COVERAGE OF DENTAL AND MENTAL HEALTH 
                   SERVICES.

       (a) Required Coverage of Dental and Mental Health 
     Services.--Section 2103 (42 U.S.C. 1397cc(c)) is amended--

[[Page 10520]]

       (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)--
       (A) by redesignating paragraph (5) as paragraph (6); and
       (B) by inserting after paragraph (4), the following new 
     paragraph:
       ``(5) Other required services.--The child health assistance 
     provided to a targeted low-income child shall include 
     coverage of the following:
       ``(A) Dental services.--Dental services described in 
     section 1905(r)(3) and provided in accordance with section 
     1902(a)(43).
       ``(B) Mental health services.--Mental health services.''.
       (b) State Child Health Plan Requirement.--Section 
     2102(a)(7)(B) (42 U.S.C. 1397bb(c)(2)) is amended by 
     inserting ``and services described in section 2103(c)(5)'' 
     after ``emergency services''
       (c) Conforming Amendments.--Section 2103(c)(2) (42 U.S.C. 
     1397cc(c)(2)) is amended--
       (1) by striking subparagraph (B); and
       (2) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (B) and (C), respectively.

     SEC. 406. CLARIFICATION OF REQUIREMENT TO PROVIDE EPSDT 
                   SERVICES FOR ALL CHILDREN IN BENCHMARK BENEFIT 
                   PACKAGES UNDER MEDICAID.

       (a) In General.--Section 1937(a)(1), as inserted by section 
     6044(a) of the Deficit Reduction Act of 2005, is amended--
       (1) in subparagraph (A)--
       (A) in the matter before clause (i), by striking 
     ``Notwithstanding any other provision of this title'' and 
     inserting ``Subject to subparagraph (E)''; and
       (B) by striking ``enrollment in coverage that provides'' 
     and all that follows and inserting ``benchmark coverage 
     described in subsection (b)(1) or benchmark equivalent 
     coverage described in subsection (b)(2).'';
       (2) by striking subparagraph (C) and inserting the 
     following new subparagraph:
       ``(C) State option to provide additional benefits.--A 
     State, at its option, may provide such additional benefits to 
     benchmark coverage described in subsection (b)(1) or 
     benchmark equivalent coverage described in subsection (b)(2) 
     as the State may specify.''; and
       (3) by adding at the end the following new subparagraph:
       ``(E) Requiring coverage of epsdt services.--Nothing in 
     this paragraph shall be construed as affecting a child's 
     entitlement to care and services described in subsections 
     (a)(4)(B) and (r) of section 1905 and provided in accordance 
     with section 1903(a)(43) whether provided through benchmark 
     coverage, benchmark equivalent coverage, or otherwise.''.
       (b) 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. 407. CHILDHOOD OBESITY DEMONSTRATION PROJECT.

       (a) 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--
       (1) identify, through self-assessment, behavioral risk 
     factors for obesity among children;
       (2) identify, through self-assessment, needed clinical 
     preventive and screening benefits among those children 
     identified as target individuals on the basis of such risk 
     factors;
       (3) 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
       (4) 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 of 
     the Social Security Act or child health assistance is 
     available under title XXI of such Act among such target 
     individuals.
       (b) Eligibility Entities.--For purposes of this section, an 
     eligible entity is any of the following:
       (1) A city, county, or Indian tribe.
       (2) A local or tribal educational agency.
       (3) An accredited university, college, or community 
     college.
       (4) A federally-qualified health center.
       (5) A local health department.
       (6) A health care provider.
       (7) A community-based organization.
       (8) Any other entity determined appropriate by the 
     Secretary, including a consortia or partnership of entities 
     described in any of paragraphs (1) through (7).
       (c) Use of Funds.--An eligible entity awarded a grant under 
     this section shall use the funds made available under the 
     grant to--
       (1) carry out community-based activities related to 
     reducing childhood obesity, including by--
       (A) 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;
       (B) forming partnerships with daycare facilities to 
     establish programs that promote healthy eating behaviors and 
     physical activity; and
       (C) developing and evaluating community educational 
     activities targeting good nutrition and promoting healthy 
     eating behaviors;
       (2) carry out age-appropriate school-based activities that 
     are designed to reduce childhood obesity, including by--
       (A) 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, problem-solving and decisionmaking 
     skills), as well as consideration of cultural and 
     developmental issues, and the role of family, school, and 
     community;
       (B) providing education and training to educational 
     professionals regarding how to promote a healthy lifestyle 
     and a healthy school environment for children;
       (C) planning and implementing a healthy lifestyle 
     curriculum or program with an emphasis on healthy eating 
     behaviors and physical activity; and
       (D) planning and implementing healthy lifestyle classes or 
     programs for parents or guardians, with an emphasis on 
     healthy eating behaviors and physical activity for children;
       (3) carry out activities through the local health care 
     delivery systems including by--
       (A) promoting healthy eating behaviors and physical 
     activity services to treat or prevent eating disorders, being 
     overweight, and obesity;
       (B) providing patient education and counseling to increase 
     physical activity and promote healthy eating behaviors;
       (C) training health professionals on how to identify and 
     treat obese and overweight individuals which may include 
     nutrition and physical activity counseling; and
       (D) 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
       (4) provide, through qualified health professionals, 
     training and supervision for community health workers to--
       (A) educate families regarding the relationship between 
     nutrition, eating habits, physical activity, and obesity;
       (B) educate families about effective strategies to improve 
     nutrition, establish healthy eating patterns, and establish 
     appropriate levels of physical activity; and
       (C) educate and guide parents regarding the ability to 
     model and communicate positive health behaviors.
       (d) Priority.--In awarding grants under subsection (a), the 
     Secretary shall give priority to awarding grants to eligible 
     entities--
       (1) 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;
       (2) 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;
       (3) that provide non-Federal contributions, either in cash 
     or inkind, to the costs of funding activities under the 
     grants;
       (4) 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 section;
       (5) located in communities that are medically underserved, 
     as determined by the Secretary;
       (6) 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
       (7) that submit plans that exhibit multisectoral, 
     cooperative conduct that includes the involvement of a broad 
     range of stakeholders, including--
       (A) community-based organizations;
       (B) local governments;
       (C) local educational agencies;
       (D) the private sector;
       (E) State or local departments of health;
       (F) accredited colleges, universities, and community 
     colleges;
       (G) health care providers;
       (H) State and local departments of transportation and city 
     planning; and
       (I) other entities determined appropriate by the Secretary.
       (e) Program Design.--
       (1) Initial design.--Not later than 1 year after the date 
     of enactment of this Act, the

[[Page 10521]]

     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.
       (2) Number and project areas.--Not later than 2 years after 
     the date of enactment of this Act, 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 section 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 of the Social Security Act in order to 
     reduce the incidence of childhood obesity among such 
     population.
       (f) Report to Congress.--Not later than 3 years after the 
     date the Secretary implements the demonstration project under 
     this section, 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.
       (g) Definitions.--In this section:
       (1) Federally-qualified health center.--The term 
     ``Federally-qualified health center'' has the meaning given 
     that term in section 1905(l)(2)(B) of the Social Security Act 
     (42 U.S.C. 1396d(l)(2)(B)).
       (2) 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).
       (3) Self-assessment.--The term ``self-assessment'' means a 
     form that--
       (A) includes questions regarding--
       (i) behavioral risk factors;
       (ii) needed preventive and screening services; and
       (iii) target individuals' preferences for receiving follow-
     up information;
       (B) is assessed using such computer generated assessment 
     programs; and
       (C) allows for the provision of such ongoing support to the 
     individual as the Secretary determines appropriate.
       (4) Ongoing support.--The term ``ongoing support'' means--
       (A) to provide any target individual with information, 
     feedback, health coaching, and recommendations regarding--
       (i) the results of a self-assessment given to the 
     individual;
       (ii) behavior modification based on the self-assessment; 
     and
       (iii) any need for clinical preventive and screening 
     services or treatment including medical nutrition therapy;
       (B) to provide any target individual with referrals to 
     community resources and programs available to assist the 
     target individual in reducing health risks; and
       (C) to provide the information described in subparagraph 
     (A) to a health care provider, if designated by the target 
     individual to receive such information.
       (h) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, $25,000,000 for 
     each of fiscal years 2008 through 2012.

         TITLE V--IMPROVING ACCESS TO HEALTH CARE FOR CHILDREN

     SEC. 501. PROMOTING CHILDREN'S ACCESS TO COVERED HEALTH 
                   SERVICES.

       (a) Medicaid and CHIP Payment and Access Commission.--Title 
     XIX (42 U.S.C. 1396 et seq.) is amended by inserting before 
     section 1901 the following new section:


           ``MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION

       ``Sec. 1900.  (a) Establishment.--There is hereby 
     established the Medicaid and CHIP Payment and Access 
     Commission (in this section referred to as `MACPAC').
       ``(b) Duties.--
       ``(1) Review of access policies and annual reports.--MACPAC 
     shall--
       ``(A) review policies of the Medicaid program established 
     under this title (in this section referred to as `Medicaid') 
     and the State Children's Health Insurance Program established 
     under title XXI (in this section referred to as `CHIP') 
     affecting children's access to covered items and services, 
     including topics described in paragraph (2);
       ``(B) make recommendations to Congress concerning such 
     access policies;
       ``(C) by not later than March 1 of each year (beginning 
     with 2009), submit a report to Congress containing the 
     results of such reviews and MACPAC's recommendations 
     concerning such policies; and
       ``(D) by not later than June 1 of each year (beginning with 
     2009), submit a report to Congress containing an examination 
     of issues affecting Medicaid and CHIP, including the 
     implications of changes in health care delivery in the United 
     States and in the market for health care services on such 
     programs.
       ``(2) Specific topics to be reviewed.--Specifically, MACPAC 
     shall review and assess the following:
       ``(A) Medicaid and chip payment policies.--Payment policies 
     under Medicaid and CHIP, including--
       ``(i) the factors affecting expenditures for items and 
     services in different sectors, including the process for 
     updating hospital, skilled nursing facility, physician, 
     Federally-qualified health center, rural health center, and 
     other fees;
       ``(ii) payment methodologies; and
       ``(iii) the relationship of such factors and methodologies 
     to access and quality of care for Medicaid and CHIP 
     beneficiaries.
       ``(B) Interaction of medicaid and chip payment policies 
     with health care delivery generally.--The effect of Medicaid 
     and CHIP payment policies on access to items and services for 
     children and other Medicaid and CHIP populations other than 
     under this title or title XXI and the implications of changes 
     in health care delivery in the United States and in the 
     general market for health care items and services on Medicaid 
     and CHIP.
       ``(C) Other access policies.--The effect of other Medicaid 
     and CHIP policies on access to covered items and services, 
     including policies relating to transportation and language 
     barriers.
       ``(3) Creation of early-warning system.--MACPAC shall 
     create an early-warning system to identify provider shortage 
     areas or any other problems that threaten access to care or 
     the health care status of Medicaid and CHIP beneficiaries.
       ``(4) Comments on certain secretarial reports.--If the 
     Secretary submits to Congress (or a committee of Congress) a 
     report that is required by law and that relates to access 
     policies, including with respect to payment policies, under 
     Medicaid or CHIP, the Secretary shall transmit a copy of the 
     report to MACPAC. MACPAC shall review the report and, not 
     later than 6 months after the date of submittal of the 
     Secretary's report to Congress, shall submit to the 
     appropriate committees of Congress written comments on such 
     report. Such comments may include such recommendations as 
     MACPAC deems appropriate.
       ``(5) Agenda and additional reviews.--MACPAC shall consult 
     periodically with the chairmen and ranking minority members 
     of the appropriate committees of Congress regarding MACPAC's 
     agenda and progress towards achieving the agenda. MACPAC may 
     conduct additional reviews, and submit additional reports to 
     the appropriate committees of Congress, from time to time on 
     such topics relating to the program under this title or title 
     XXI as may be requested by such chairmen and members and as 
     MACPAC deems appropriate.
       ``(6) Availability of reports.--MACPAC shall transmit to 
     the Secretary a copy of each report submitted under this 
     subsection and shall make such reports available to the 
     public.
       ``(7) Appropriate committee of congress.--For purposes of 
     this section, the term `appropriate committees of Congress' 
     means the Committee on Energy and Commerce of the House of 
     Representatives and the Committee on Finance of the Senate.
       ``(8) Voting and reporting requirements.--With respect to 
     each recommendation contained in a report submitted under 
     paragraph (1), each member of MACPAC shall vote on the 
     recommendation, and MACPAC shall include, by member, the 
     results of that vote in the report containing the 
     recommendation.
       ``(9) Examination of budget consequences.--Before making 
     any recommendations, MACPAC shall examine the budget 
     consequences of such recommendations, directly or through 
     consultation with appropriate expert entities.
       ``(c) Membership.--
       ``(1) Number and appointment.--MACPAC shall be composed of 
     17 members appointed by the Comptroller General of the United 
     States.
       ``(2) Qualifications.--
       ``(A) In general.--The membership of MACPAC shall include 
     individuals who have had direct experience as enrollees or 
     parents of enrollees in Medicaid or CHIP and individuals with 
     national recognition for their expertise in Federal safety 
     net health programs, health finance and economics, actuarial 
     science, health facility management, health plans and 
     integrated delivery systems, reimbursement of health 
     facilities, health information technology, pediatric 
     physicians, dentists, and other providers of health services, 
     and other related fields, who provide a mix of different 
     professionals, broad geographic representation, and a balance 
     between urban and rural representatives.
       ``(B) Inclusion.--The membership of MACPAC shall include 
     (but not be limited to) physicians and other health 
     professionals, employers, third-party payers, and individuals 
     with expertise in the delivery of health services. Such 
     membership shall also include consumers representing 
     children, pregnant women, the elderly, and individuals with 
     disabilities, current or former representatives of State 
     agencies responsible for administering Medicaid, and current 
     or former representatives of State agencies responsible for 
     administering CHIP.
       ``(C) Majority nonproviders.--Individuals who are directly 
     involved in the provision, or

[[Page 10522]]

     management of the delivery, of items and services covered 
     under Medicaid or CHIP shall not constitute a majority of the 
     membership of MACPAC.
       ``(D) Ethical disclosure.--The Comptroller General of the 
     United States shall establish a system for public disclosure 
     by members of MACPAC of financial and other potential 
     conflicts of interest relating to such members. Members of 
     MACPAC shall be treated as employees of Congress for purposes 
     of applying title I of the Ethics in Government Act of 1978 
     (Public Law 95-521).
       ``(3) Terms.--
       ``(A) In general.--The terms of members of MACPAC shall be 
     for 3 years except that the Comptroller General of the United 
     States shall designate staggered terms for the members first 
     appointed.
       ``(B) Vacancies.--Any member appointed to fill a vacancy 
     occurring before the expiration of the term for which the 
     member's predecessor was appointed shall be appointed only 
     for the remainder of that term. A member may serve after the 
     expiration of that member's term until a successor has taken 
     office. A vacancy in MACPAC shall be filled in the manner in 
     which the original appointment was made.
       ``(4) Compensation.--While serving on the business of 
     MACPAC (including travel time), a member of MACPAC shall be 
     entitled to compensation at the per diem equivalent of the 
     rate provided for level IV of the Executive Schedule under 
     section 5315 of title 5, United States Code; and while so 
     serving away from home and the member's regular place of 
     business, a member may be allowed travel expenses, as 
     authorized by the Chairman of MACPAC. Physicians serving as 
     personnel of MACPAC may be provided a physician comparability 
     allowance by MACPAC in the same manner as Government 
     physicians may be provided such an allowance by an agency 
     under section 5948 of title 5, United States Code, and for 
     such purpose subsection (i) of such section shall apply to 
     MACPAC in the same manner as it applies to the Tennessee 
     Valley Authority. For purposes of pay (other than pay of 
     members of MACPAC) and employment benefits, rights, and 
     privileges, all personnel of MACPAC shall be treated as if 
     they were employees of the United States Senate.
       ``(5) Chairman; vice chairman.--The Comptroller General of 
     the United States shall designate a member of MACPAC, at the 
     time of appointment of the member as Chairman and a member as 
     Vice Chairman for that term of appointment, except that in 
     the case of vacancy of the Chairmanship or Vice Chairmanship, 
     the Comptroller General of the United States may designate 
     another member for the remainder of that member's term.
       ``(6) Meetings.--MACPAC shall meet at the call of the 
     Chairman.
       ``(d) Director and Staff; Experts and Consultants.--Subject 
     to such review as the Comptroller General of the United 
     States deems necessary to assure the efficient administration 
     of MACPAC, MACPAC may--
       ``(1) employ and fix the compensation of an Executive 
     Director (subject to the approval of the Comptroller General 
     of the United States) and such other personnel as may be 
     necessary to carry out its duties (without regard to the 
     provisions of title 5, United States Code, governing 
     appointments in the competitive service);
       ``(2) seek such assistance and support as may be required 
     in the performance of its duties from appropriate Federal 
     departments and agencies;
       ``(3) enter into contracts or make other arrangements, as 
     may be necessary for the conduct of the work of MACPAC 
     (without regard to section 3709 of the Revised Statutes (41 
     U.S.C. 5));
       ``(4) make advance, progress, and other payments which 
     relate to the work of MACPAC;
       ``(5) provide transportation and subsistence for persons 
     serving without compensation; and
       ``(6) prescribe such rules and regulations as it deems 
     necessary with respect to the internal organization and 
     operation of MACPAC.
       ``(e) Powers.--
       ``(1) Obtaining official data.--MACPAC may secure directly 
     from any department or agency of the United States 
     information necessary to enable it to carry out this section. 
     Upon request of the Chairman, the head of that department or 
     agency shall furnish that information to MACPAC on an agreed 
     upon schedule.
       ``(2) Data collection.--In order to carry out its 
     functions, MACPAC shall--
       ``(A) utilize existing information, both published and 
     unpublished, where possible, collected and assessed either by 
     its own staff or under other arrangements made in accordance 
     with this section;
       ``(B) carry out, or award grants or contracts for, original 
     research and experimentation, where existing information is 
     inadequate; and
       ``(C) adopt procedures allowing any interested party to 
     submit information for MACPAC's use in making reports and 
     recommendations.
       ``(3) Access of gao to information.--The Comptroller 
     General of the United States shall have unrestricted access 
     to all deliberations, records, and nonproprietary data of 
     MACPAC, immediately upon request.
       ``(4) Periodic audit.--MACPAC shall be subject to periodic 
     audit by the Comptroller General of the United States.
       ``(f) Authorization of Appropriations.--
       ``(1) Request for appropriations.--MACPAC shall submit 
     requests for appropriations in the same manner as the 
     Comptroller General of the United States submits requests for 
     appropriations, but amounts appropriated for MACPAC shall be 
     separate from amounts appropriated for the Comptroller 
     General of the United States.
       ``(2) Authorization.--There are authorized to be 
     appropriated such sums as may be necessary to carry out the 
     provisions of this section.''.
       (b) Deadline for Initial Appointments.--Not later than 
     January 1, 2008, the Comptroller General of the United States 
     shall appoint the initial members of the Medicaid and CHIP 
     Payment and Access Commission established under section 1900 
     of the Social Security Act (as added by subsection (a)).

     SEC. 502. INSTITUTE OF MEDICINE STUDY AND REPORT ON 
                   CHILDREN'S ACCESS TO HEALTH CARE.

       (a) Study.--
       (1) In general.--The Secretary shall enter into a contract 
     with the Institute of Medicine of the National Academy of 
     Sciences (in this section referred to as the ``Institute''), 
     to update the data and analyses of the June 1998 report of 
     the Institute entitled, ``America's Children: Health 
     Insurance and Access to Care''. Specifically, the Institute 
     shall--
       (A) examine the extent of health insurance coverage for 
     children in the United States; and
       (B) analyze the extent to which there is evidence of the 
     relationship between health insurance coverage and children's 
     access to health care.
       (2) Requirement.--In carrying out the study required under 
     paragraph (1), the Institute shall focus on a broad range of 
     providers that offer health care services to children, 
     including (but not limited to) providers of oral health care 
     services and mental health care services.
       (3) Support.--The Secretary shall provide to the Institute 
     any relevant data available to the Secretary during the 
     period in which the study required under paragraph (1) is 
     conducted.
       (b) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Secretary and the Institute shall 
     submit a report to Congress on the results of the study 
     conducted under subsection (a).
       (c) Appropriations.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated for fiscal year 
     2008 such sums as may be necessary for the purpose of 
     carrying out this section, not to exceed $1,000,000. Funds 
     appropriated under this subsection shall remain available 
     until expended.

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

     SEC. 601. STRENGTHENING CHILD HEALTH QUALITY IMPROVEMENT 
                   ACTIVITIES.

       (a) Updating and Enhancement of Quality of Care Measures 
     for Children.--
       (1) In general.--Not later than January 1, 2009, the 
     Secretary shall do the following:
       (A) Update and enhance quality measures.--In consultation 
     with States, providers, and child health experts, update and 
     enhance the HEDIS measures and other measures that the 
     Secretary recommends States use to annually report on the 
     quality of health care for children enrolled in Medicaid or 
     CHIP to include additional and more comprehensive information 
     with respect to health care delivered to children in both 
     ambulatory and inpatient care settings, that can be used to 
     develop national quality measures and perform comparative 
     analyses.
       (B) Encourage voluntary reporting.--In consultation with 
     States, develop procedures to encourage States to voluntarily 
     report the same set of measures with respect to the quality 
     of health care for children under Medicaid and CHIP.
       (C) Adoption of best practices.--Develop programs to 
     identify best practices with respect to the quality of health 
     care for children and facilitate the adoption of such best 
     practices, including in areas such as provider reporting 
     compliance, successful quality improvement strategies, and 
     improved efficiency in data collection using health 
     information technology.
       (D) Technical assistance.--Provide technical assistance to 
     States to help them comply with the measures updated in 
     accordance with subparagraph (A) and adopt the best practices 
     identified in accordance with subparagraph (C).
       (b) Dissemination of Health Quality Information.--
       (1) State-specific report on child health quality 
     measures.--Not later than January 1, 2008, and annually 
     thereafter, the Secretary shall collect, analyze, and make 
     publicly available State-specific data on child health 
     quality measures, including State-specific data collected on 
     external quality review activities related to managed care 
     organizations under Medicaid and CHIP.
       (2) Reports to congress.--Not later than January 1, 2008, 
     and every 3 years thereafter, the Secretary shall report to 
     Congress on--
       (A) the status of the Secretary's efforts to improve--

[[Page 10523]]

       (i) children's health care, including children's needs with 
     respect to preventive, acute, and chronic health care; and
       (ii) all domains of quality, including safety, family 
     experience of care, and elimination of disparities; and
       (B) the quality of care furnished to ameliorate at least 1 
     type of physical, mental, or developmental condition 
     recognized as having an effect on growth and development in 
     children and adolescents.
       (c) Development, Endorsement, and Updating of Child-
     Specific Health Quality Measures.--
       (1) In general.--Not later than January 1, 2009, the 
     Secretary shall establish a program to support the 
     development of quality measures for children's health care 
     services.
       (2) Authority to award grants and contracts.--As part of 
     such program, the Secretary shall award grants and contracts 
     for the--
       (A) development of new child health quality measures to 
     supplement or replace, as appropriate, the HEDIS measures 
     updated and enhanced in accordance with subsection (a)(1)(A);
       (B) advancement (through validation and consensus among the 
     entities described in paragraph (3)) of such new measures and 
     of child health quality measures used as of the date of 
     enactment of this Act; and
       (C) updating of such measures as necessary.
       (3) Consultation required.--In carrying out the program 
     required under this subsection, the Secretary shall consult 
     with the following:
       (A) Establishment of areas of need and priorities.--For 
     purposes of identifying gaps in child health quality measures 
     used as of the date of enactment of this Act and establishing 
     priorities for development:
       (i) States.
       (ii) National pediatric organizations.
       (iii) Consumers.
       (iv) Other entities with expertise in pediatric quality 
     measures, such as quality improvement organizations.
       (B) Establishment of portfolio of measures.--For purposes 
     of developing a portfolio of child health quality measures 
     for use by States, other purchasers, and providers, an 
     organization involved in the advancement of consensus on 
     evidence-based measures of health care, such as the National 
     Quality Forum.
       (C) Establishment of medicaid and chip core pediatric 
     quality measures.--For purposes of identifying a core 
     pediatric data set that includes specific quality measures 
     for Medicaid and CHIP, States, health care providers, 
     consumers, purchasers, child health experts, and public and 
     private organizations with experience and expertise in the 
     outreach and enrollment of children in public and private 
     health insurance programs.
       (4) Specific requirements for medicaid and chip pediatric 
     quality measures.--
       (A) Core pediatric data set.--The core pediatric data set 
     identified under paragraph (3)(C) shall include specific 
     quality measures for Medicaid and CHIP, including with 
     respect to at least the following:
       (i) State-specific quality measures for Medicaid and CHIP 
     (including State-specific data on enrollment and retention of 
     eligible children; coordination of Medicaid and CHIP 
     children's coverage; measures of children's access to 
     preventive, acute and chronic care, including the 
     availability of providers and adequacy of provider payments 
     relative to private coverage).
       (ii) Quality measures and data for health plans and 
     providers at the State, plan, and provider levels of care.
       (B) Quality measures.--In identifying quality measures for 
     Medicaid and CHIP, the Secretary shall--
       (i) identify measures specific to managed care plans and 
     providers of primary care case management services;
       (ii) build on the core set of quality measures reported by 
     States as of the date of enactment of this Act, including the 
     HEDIS measures and evidence-based measures (to the extent 
     such measures are available);
       (iii) assure that the measures identified are selected from 
     measures that have been approved through an independent 
     process that includes a broad consensus determined by a 
     voluntary, standard setting organization, with broad 
     participation by providers, patient advocates, health plans, 
     and purchasers;
       (iv) assure that the measures place an emphasis on physical 
     and mental conditions for which amelioration is necessary to 
     promote growth and development;
       (v) assure that the measures are evidence-based and risk 
     adjusted;
       (vi) assure that the measures are designed to identify and 
     eliminate racial and ethnic disparities in the provision of 
     care;
       (vii) assure 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; and
       (viii) periodically update such measures.
       (d) Demonstration Projects for Improving the Quality of 
     Children's Health Care and the Use of Health Information 
     Technology.--
       (1) In general.--The Secretary shall award grants to States 
     and child health providers to conduct demonstration projects 
     to evaluate promising ideas for improving the quality of 
     children's health care, including projects to--
       (A) experiment with, and evaluate the use of, new measures 
     of the quality of children's health care (including testing 
     the validity and suitability for reporting of such measures);
       (B) promote the use of health information technology in 
     care delivery for children; or
       (C) evaluate value-based purchasing of health care services 
     for children.
       (2) Authority for multi-state projects.--A demonstration 
     project conducted with a grant awarded under this subsection 
     may be conducted on a multi-State basis, as needed.
       (e) Increased Matching Rate for Collecting and Reporting on 
     Child Health Measures.--Section 1903(a)(3)(A) (42 U.S.C. 
     1396b(a)(3)(A)), as amended by section 302, is amended--
       (1) by striking ``and'' at the end of clause (ii); and
       (2) by adding at the end the following new clause:
       ``(iv) an amount equal to 75 percent of so much of the sums 
     expended during such quarter (as found necessary by the 
     Secretary for the proper and efficient administration of the 
     State plan) as are attributable to 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''.
       (f) Development of Model Electronic Health Record for 
     Children.--Not later than January 1, 2009, the Secretary 
     shall establish a program to encourage the development and 
     dissemination of a model electronic health record for 
     children. Such model electronic health record should be--
       (1) subject to State laws, accessible to parents and other 
     consumers for the sole purpose of demonstrating compliance 
     with school or leisure activity requirements, such as 
     appropriate immunizations or physicals; and
       (2) designed to allow interoperable exchanges that conform 
     with Federal and State privacy and security requirements.
       (g) Definition of HEDIS Measures.--In this section, the 
     term ``HEDIS measures'' means the Health Plan Employer Data 
     and Information Set (HEDIS) measures established by the 
     National Committee for Quality Assurance (NCQA).
       (h) Appropriations.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated for each of 
     fiscal years 2008 through 2012, $20,000,000 for the purpose 
     of carrying out this section. Funds appropriated under this 
     subsection shall remain available until expended.

     SEC. 602. APPLICATION OF CERTAIN MANAGED CARE QUALITY 
                   SAFEGUARDS TO CHIP.

       Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)), as amended by 
     sections 301(b), 302(b)(2), and 403(b), is amended by 
     redesignating subparagraph (G) as subparagraph (H), and by 
     inserting after subparagraph (F) the following new 
     subparagraph:
       ``(G) Subsections (a)(5), (b), (c), (d), and (e) of section 
     1932 (relating to requirements for managed care).''.

                     TITLE VII--OTHER IMPROVEMENTS

     SEC. 701. STRENGTHENING PREMIUM ASSISTANCE PROGRAMS.

       (a) Improving the Cost-Effectiveness Standard.--Section 
     2105(c)(3) (42 U.S.C. 1397ee(c)(3)) is amended--
       (1) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii) and indenting appropriately;
       (2) by striking ``Payment may be made'' and inserting the 
     following:
       ``(A) In general.--Subject to the succeeding provisions of 
     this paragraph, payment may be made''; and
       (3) by adding at the end the following new subparagraph:
       ``(B) Improvements in cost-effectiveness measure.--
       ``(i) Application of family-based test.--Coverage described 
     in subparagraph (A) shall be deemed cost-effective if 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 family 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.--In the case of a State that does not establish cost-
     effectiveness under clause (i), payment may not be made under 
     subsection (a)(1) for the purchase of any coverage described 
     in subparagraph (A) for a family unless the State establishes 
     to the satisfaction of the Secretary that the aggregate 
     amount of expenditures by the State for the purchase of all 
     such coverage (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 families.''.
       (b) Disclosure of Group Health Plan Benefits.--Section 
     2105(c)(3) (42 U.S.C. 1397ee(c)(3)), as amended by 
     subsections (a) and (b), is amended by adding at the end the 
     following new subparagraph:

[[Page 10524]]

       ``(D) Disclosure of group health plan benefits.--
     Notwithstanding any other provision of law, the plan 
     administrator of a group health plan in which participants or 
     beneficiaries are covered under a State plan under title XIX 
     or this title, shall disclose to the State, upon request, 
     information about the benefits available under the group 
     health plan in sufficient specificity so that the State may 
     determine--
       ``(i) whether purchasing coverage for the participant or 
     beneficiary under the group health plan meets the cost-
     effectiveness standard applied under subparagraph (B); and
       ``(ii) what additional benefits and cost-sharing assistance 
     must be provided to ensure that the participant or 
     beneficiary receives through the provision of additional 
     benefits by the State, benefits that are equivalent to the 
     coverage that would be provided to such participant or 
     beneficiary under such State plan.''.
       (c) Approval of Section 1115 Waivers for Premium 
     Assistance.--Section 1115 (42 U.S.C. 1315) is amended by 
     inserting after subsection (c), the following new subsection:
       ``(d) In approving a request by a State for an 
     experimental, pilot, or demonstration project under this 
     section with respect to the purchase of private insurance for 
     individuals eligible for assistance under title XIX or XXI, 
     the Secretary shall not waive compliance with requirements of 
     such titles or treat expenditures under the project as 
     expenditures under the State plans approved under such titles 
     unless the State demonstrates both of the following:
       ``(1) The fact that an individual is enrolled in a group 
     health plan or an insurance plan purchased on the individual 
     market shall not change the individual's eligibility for 
     assistance under the such State plans.
       ``(2) The cost to the Federal Government and State of 
     purchasing private insurance for the individual (including 
     administrative costs), as well as any additional costs 
     incurred in providing items and services covered under such 
     State plans but not through the private insurance for such 
     individual, does not exceed, on an average per individual 
     basis, the cost of providing coverage to the individual 
     directly under such State plans.''.
       (d) 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 State premium assistance 
     programs for which Federal matching payments are made under 
     title XIX or XXI of the Social Security Act and submit a 
     report to Congress on the results of such study.

     SEC. 702. PERMITTING COVERAGE OF CHILDREN OF EMPLOYEES OF A 
                   PUBLIC AGENCY IN THE STATE.

       Section 2110(b) (42 U.S.C. 1397jj(b)) is amended--
       (1) in paragraph (2)(B), by inserting ``except as provided 
     in paragraph (5),'' before ``a child''; and
       (2) by adding at the end the following new paragraph:
       ``(5) Exceptions to exclusion of children of employees of a 
     public agency in the state.--
       ``(A) In general.--A child shall not be considered to be 
     described in paragraph (2)(B) if--
       ``(i) the public agency that employs a member of the 
     child's family to which such paragraph applies satisfies 
     subparagraph (B); or
       ``(ii) subparagraph (C) applies to such child.
       ``(B) Maintenance of effort with respect to per person 
     agency contribution for family coverage.--For purposes of 
     subparagraph (A)(i), a public agency satisfies this 
     subparagraph if the amount of annual agency expenditures made 
     on behalf of each employee enrolled in health coverage paid 
     for by the agency that includes dependent coverage for the 
     most recent State fiscal year is not less than the amount of 
     such expenditures made by the agency for the 1997 State 
     fiscal year, increased by the percentage increase in the 
     medical care expenditure category of the Consumer Price Index 
     for All-Urban Consumers (all items: U.S. City Average) for 
     such preceding fiscal year.
       ``(C) Hardship exception.--For purposes of subparagraph 
     (A)(ii), this subparagraph applies to a child if the State 
     determines, on a case-by-case basis, that the annual 
     aggregate amount of premiums and cost-sharing imposed for 
     coverage of the family of the child would exceed 5 percent of 
     such family's income for the year involved.''.

     SEC. 703. 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 (3); and
       (2) by inserting after paragraph (1), the following new 
     paragraph:
       ``(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 sections 
     1905(y)(2)(A)(i), 2106(b)(3)(B)(iii)(I), and 
     2104(i)(3)(D)(i).
       ``(C) Assist in the incorporation of 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 for 
     purposes of section 2104(i)(3)(D)(i).
       ``(E) Recommend to the Secretary of Health and Human 
     Services whether American Community Survey estimates should 
     be used for purposes of 2104(i)(3)(D)(i).
       ``(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.''.

     SEC. 704. MORATORIUM ON APPLICATION OF PERM REQUIREMENTS 
                   RELATED TO ELIGIBILITY REVIEWS DURING PERIOD OF 
                   INDEPENDENT STUDY AND REPORT.

       (a) Moratorium.--Notwithstanding parts 431 and 457 of title 
     42, Code of Federal Regulations, or any other provision of 
     law, except as provided in paragraph (2), during the period 
     that begins on the date of enactment of this Act and ends on 
     the final effective date for the regulations required under 
     subsection (c), the Secretary shall not apply the payment 
     error rate measurement (PERM) requirements related to 
     eligibility reviews imposed under such parts with respect to 
     Medicaid or CHIP.
       (b) Study and Report.--
       (1) Institute of medicine study.--The Secretary shall enter 
     into a contract with the Institute of Medicine of the 
     National Academy of Sciences (in this section referred to as 
     the ``Institute'') to conduct an independent study of the 
     payment error rate measurement (PERM) requirements related to 
     eligibility reviews imposed under parts 431 and 457 of title 
     42, Code of Federal Regulations with respect to Medicaid and 
     CHIP and established in accordance with the Improper Payments 
     Information Act of 2002 (Public Law 107-300). Such study 
     shall examine and develop recommendations for modifying such 
     requirements in order to--
       (A) minimize the administrative cost burden on States under 
     Medicaid and CHIP;
       (B) avoid inadvertent error findings with respect to such 
     programs despite compliance with Federal and State policies 
     and procedures in effect as of the date of the submission of 
     the claim or action that led to such finding;
       (C) maintain State flexibility to manage such programs; and
       (D) ensure that such requirements do not interfere with 
     State efforts to simplify application and renewal procedures 
     that increase enrollment in Medicaid and CHIP and do not 
     reduce beneficiary participation in such programs.
       (2) Support.--The Secretary shall provide the Institute 
     with any relevant data available to the Secretary during the 
     period in which the study required under paragraph (1) is 
     conducted.
       (3) Report.--Not later than the date that is 18 months 
     after the date of enactment of this Act, the Institute shall 
     submit to the Secretary and Congress a report on the results 
     of the study conducted under this subsection.
       (c) Regulations.--Not later than 6 months after the date on 
     which the report required under subsection (b)(3) has been 
     submitted to the Secretary, the Secretary, after taking into 
     consideration the recommendations contained in the report, 
     shall promulgate such regulations revising the PERM 
     requirements as the Secretary determines are appropriate.
       (d) Appropriations.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated for fiscal year 
     2008 such sums as may be necessary for the purpose of 
     carrying out this section, not to exceed $1,000,000. Funds 
     appropriated under this subsection shall remain available 
     until expended.

     SEC. 705. 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.

                       TITLE VIII--EFFECTIVE DATE

     SEC. 801. EFFECTIVE DATE.

       (a) In General.--Unless otherwise provided, 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

[[Page 10525]]

     to whether or not final regulations to carry out such 
     amendments have been promulgated by such date.
       (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.

                          ____________________