[Congressional Record (Bound Edition), Volume 155 (2009), Part 2]
[Senate]
[Pages 1592-1639]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 39. Mr. REID (for Mr. Baucus) proposed an amendment to the bill 
H.R. 2, to amend title XXI of the Social Security Act to extend and 
improve the Children's Health Insurance Program, and for other 
purposes; as follows:

       Strike all after the enacting clause and insert the 
     following:

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

       (a) Short Title.--This Act may be cited as the ``Children's 
     Health Insurance Program Reauthorization Act of 2009''.
       (b) Amendments to Social Security Act.--Except as otherwise 
     specifically provided, whenever in this Act an amendment is 
     expressed in terms of an amendment to or repeal of a section 
     or other provision, the reference shall be considered to be 
     made to that section or other provision of the Social 
     Security Act.
       (c) References to CHIP; Medicaid; 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 of this Act 
     is as follows:

Sec. 1. Short title; amendments to Social Security Act; references; 
              table of contents.
Sec. 2. Purpose.
Sec. 3. General effective date; exception for State legislation; 
              contingent effective date; reliance on law.

                           TITLE I--FINANCING

                          Subtitle A--Funding

Sec. 101. Extension of CHIP.
Sec. 102. Allotments for States and territories for fiscal years 2009 
              through 2013.
Sec. 103. Child Enrollment Contingency Fund.
Sec. 104. CHIP performance bonus payment to offset additional 
              enrollment costs resulting from enrollment and retention 
              efforts.
Sec. 105. Two-year initial availability of CHIP allotments.
Sec. 106. Redistribution of unused allotments.
Sec. 107. Option for qualifying States to receive the enhanced portion 
              of the CHIP matching rate for Medicaid coverage of 
              certain children.
Sec. 108. One-time appropriation.
Sec. 109. Improving funding for the territories under CHIP and 
              Medicaid.

      Subtitle B--Focus on Low-Income Children and Pregnant Women

Sec. 111. State option to cover low-income pregnant women under CHIP 
              through a State plan amendment.
Sec. 112. Phase-out of coverage for nonpregnant childless adults under 
              CHIP; conditions for coverage of parents.
Sec. 113. Elimination of counting Medicaid child presumptive 
              eligibility costs against title XXI allotment.
Sec. 114. Limitation on matching rate for States that propose to cover 
              children with effective family income that exceeds 300 
              percent of the poverty line.
Sec. 115. State authority under Medicaid.

                   TITLE II--OUTREACH AND ENROLLMENT

             Subtitle A--Outreach and Enrollment Activities

Sec. 201. Grants and enhanced administrative funding for outreach and 
              enrollment.
Sec. 202. Increased outreach and enrollment of Indians.

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Sec. 203. State option to rely on findings from an Express Lane agency 
              to conduct simplified eligibility determinations.

              Subtitle B--Reducing Barriers to Enrollment

Sec. 211. Verification of declaration of citizenship or nationality for 
              purposes of eligibility for Medicaid and CHIP.
Sec. 212. Reducing administrative barriers to enrollment.
Sec. 213. Model of Interstate coordinated enrollment and coverage 
              process.
Sec. 214. Permitting States to ensure coverage without a 5-year delay 
              of certain children and pregnant women under the Medicaid 
              program and CHIP.

      TITLE III--REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE

  Subtitle A--Additional State Option for Providing Premium Assistance

Sec. 301. Additional State option for providing premium assistance.
Sec. 302. Outreach, education, and enrollment assistance.

   Subtitle B--Coordinating Premium Assistance With Private Coverage

Sec. 311. Special enrollment period under group health plans in case of 
              termination of Medicaid or CHIP coverage or eligibility 
              for assistance in purchase of employment-based coverage; 
              coordination of coverage.

      TITLE IV--STRENGTHENING QUALITY OF CARE AND HEALTH OUTCOMES

Sec. 401. Child health quality improvement activities for children 
              enrolled in Medicaid or CHIP.
Sec. 402. Improved availability of public information regarding 
              enrollment of children in CHIP and Medicaid.
Sec. 403. Application of certain managed care quality safeguards to 
              CHIP.

                 TITLE V--IMPROVING ACCESS TO BENEFITS

Sec. 501. Dental benefits.
Sec. 502. Mental health parity in CHIP plans.
Sec. 503. Application of prospective payment system for services 
              provided by Federally-qualified health centers and rural 
              health clinics.
Sec. 504. Premium grace period.
Sec. 505. Clarification of coverage of services provided through 
              school-based health centers.
Sec. 506. Medicaid and CHIP Payment and Access Commission.

     TITLE VI--PROGRAM INTEGRITY AND OTHER MISCELLANEOUS PROVISIONS

           Subtitle A--Program Integrity and Data Collection

Sec. 601. Payment error rate measurement (``PERM'').
Sec. 602. Improving data collection.
Sec. 603. Updated Federal evaluation of CHIP.
Sec. 604. Access to records for IG and GAO audits and evaluations.
Sec. 605. No Federal funding for illegal aliens; disallowance for 
              unauthorized expenditures.

              Subtitle B--Miscellaneous Health Provisions

Sec. 611. Deficit Reduction Act technical corrections.
Sec. 612. References to title XXI.
Sec. 613. Prohibiting initiation of new health opportunity account 
              demonstration programs.
Sec. 614. Adjustment in computation of Medicaid FMAP to disregard an 
              extraordinary employer pension contribution.
Sec. 615. Clarification treatment of regional medical center.
Sec. 616. Extension of Medicaid DSH allotments for Tennessee and 
              Hawaii.
Sec. 617. GAO report on Medicaid managed care payment rates.

                      Subtitle C--Other Provisions

Sec. 621. Outreach regarding health insurance options available to 
              children.
Sec. 622. Sense of the Senate regarding access to affordable and 
              meaningful health insurance coverage.

                     TITLE VII--REVENUE PROVISIONS

Sec. 701. Increase in excise tax rate on tobacco products.
Sec. 702. Administrative improvements.
Sec. 703. Treasury study concerning magnitude of tobacco smuggling in 
              the United States.
Sec. 704. Time for payment of corporate estimated taxes.

     SEC. 2. PURPOSE.

       It is the purpose of this Act to provide dependable and 
     stable funding for children's health insurance under titles 
     XXI and XIX of the Social Security Act in order to enroll all 
     six million uninsured children who are eligible, but not 
     enrolled, for coverage today through such titles.

     SEC. 3. GENERAL EFFECTIVE DATE; EXCEPTION FOR STATE 
                   LEGISLATION; CONTINGENT EFFECTIVE DATE; 
                   RELIANCE ON LAW.

       (a) General Effective Date.--Unless otherwise provided in 
     this Act, subject to subsections (b) through (d), this Act 
     (and the amendments made by this Act) shall take effect on 
     April 1, 2009, and shall apply to child health assistance and 
     medical assistance provided on or after that date.
       (b) Exception for State Legislation.--In the case of a 
     State plan under title XIX or State child health plan under 
     XXI of the Social Security Act, which the Secretary of Health 
     and Human Services determines requires State legislation in 
     order for the respective plan to meet one or more additional 
     requirements imposed by amendments made by this Act, the 
     respective plan shall not be regarded as failing to comply 
     with the requirements of such title solely on the basis of 
     its failure to meet such an additional requirement 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 previous 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.
       (c) Coordination of CHIP Funding for Fiscal Year 2009.--
     Notwithstanding any other provision of law, insofar as funds 
     have been appropriated under section 2104(a)(11), 2104(k), or 
     2104(l) of the Social Security Act, as amended by section 201 
     of Public Law 110-173, to provide allotments to States under 
     CHIP for fiscal year 2009--
       (1) any amounts that are so appropriated that are not so 
     allotted and obligated before April 1, 2009 are rescinded; 
     and
       (2) any amount provided for CHIP allotments to a State 
     under this Act (and the amendments made by this Act) for such 
     fiscal year shall be reduced by the amount of such 
     appropriations so allotted and obligated before such date.
       (d) Reliance on Law.--With respect to amendments made by 
     this Act (other than title VII) that become effective as of a 
     date--
       (1) such amendments are effective as of such date whether 
     or not regulations implementing such amendments have been 
     issued; and
       (2) Federal financial participation for medical assistance 
     or child health assistance furnished under title XIX or XXI, 
     respectively, of the Social Security Act on or after such 
     date by a State in good faith reliance on such amendments 
     before the date of promulgation of final regulations, if any, 
     to carry out such amendments (or before the date of guidance, 
     if any, regarding the implementation of such amendments) 
     shall not be denied on the basis of the State's failure to 
     comply with such regulations or guidance.

                           TITLE I--FINANCING

                          Subtitle A--Funding

     SEC. 101. EXTENSION OF CHIP.

       Section 2104(a) (42 U.S.C. 1397dd(a)) is amended--
       (1) in paragraph (10), by striking ``and'' at the end;
       (2) by amending paragraph (11), by striking ``each of 
     fiscal years 2008 and 2009'' and inserting ``fiscal year 
     2008''; and
       (3) by adding at the end the following new paragraphs:
       ``(12) for fiscal year 2009, $10,562,000,000;
       ``(13) for fiscal year 2010, $12,520,000,000;
       ``(14) for fiscal year 2011, $13,459,000,000;
       ``(15) for fiscal year 2012, $14,982,000,000; and
       ``(16) for fiscal year 2013, for purposes of making 2 semi-
     annual allotments--
       ``(A) $2,850,000,000 for the period beginning on October 1, 
     2012, and ending on March 31, 2013, and
       ``(B) $2,850,000,000 for the period beginning on April 1, 
     2013, and ending on September 30, 2013.''.

     SEC. 102. ALLOTMENTS FOR STATES AND TERRITORIES FOR FISCAL 
                   YEARS 2009 THROUGH 2013.

       Section 2104 (42 U.S.C. 1397dd) is amended--
       (1) in subsection (b)(1), by striking ``subsection (d)'' 
     and inserting ``subsections (d) and (m)'';
       (2) in subsection (c)(1), by striking ``subsection (d)'' 
     and inserting ``subsections (d) and (m)(4)''; and
       (3) by adding at the end the following new subsection:
       ``(m) Allotments for Fiscal Years 2009 Through 2013.--
       ``(1) For fiscal year 2009.--
       ``(A) For the 50 states and the district of columbia.--
     Subject to the succeeding provisions of this paragraph and 
     paragraph (4), the Secretary shall allot for fiscal year 2009 
     from the amount made available under subsection (a)(12), to 
     each of the 50 States and the District of Columbia 110 
     percent of the highest of the following amounts for such 
     State or District:
       ``(i) The total Federal payments to the State under this 
     title for fiscal year 2008, multiplied by the allotment 
     increase factor determined under paragraph (5) for fiscal 
     year 2009.
       ``(ii) The amount allotted to the State for fiscal year 
     2008 under subsection (b), multiplied by the allotment 
     increase factor determined under paragraph (5) for fiscal 
     year 2009.
       ``(iii) The projected total Federal payments to the State 
     under this title for fiscal year 2009, as determined on the 
     basis of the

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     February 2009 projections certified by the State to the 
     Secretary by not later than March 31, 2009.
       ``(B) For the commonwealths and territories.--Subject to 
     the succeeding provisions of this paragraph and paragraph 
     (4), the Secretary shall allot for fiscal year 2009 from the 
     amount made available under subsection (a)(12) to each of the 
     commonwealths and territories described in subsection (c)(3) 
     an amount equal to 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 1999 through 
     2008, multiplied by the allotment increase factor determined 
     under paragraph (5) for fiscal year 2009, except that 
     subparagraph (B) thereof shall be applied by substituting 
     `the United States' for `the State'.
       ``(C) Adjustment for qualifying states.--In the case of a 
     qualifying State described in paragraph (2) of section 
     2105(g), the Secretary shall permit the State to submit a 
     revised projection described in subparagraph (A)(iii) in 
     order to take into account changes in such projections 
     attributable to the application of paragraph (4) of such 
     section.
       ``(2) For fiscal years 2010 through 2012.--
       ``(A) In general.--Subject to paragraphs (4) and (6), from 
     the amount made available under paragraphs (13) through (15) 
     of subsection (a) for each of fiscal years 2010 through 2012, 
     respectively, the Secretary shall compute a State allotment 
     for each State (including the District of Columbia and each 
     commonwealth and territory) for each such fiscal year as 
     follows:
       ``(i) Growth factor update for fiscal year 2010.--For 
     fiscal year 2010, the allotment of the State is equal to the 
     sum of--

       ``(I) the amount of the State allotment under paragraph (1) 
     for fiscal year 2009; and
       ``(II) the amount of any payments made to the State under 
     subsection (k), (l), or (n) for fiscal year 2009,

     multiplied by the allotment increase factor under paragraph 
     (5) for fiscal year 2010.
       ``(ii) Rebasing in fiscal year 2011.--For fiscal year 2011, 
     the allotment of the State is equal to the Federal payments 
     to the State that are attributable to (and countable towards) 
     the total amount of allotments available under this section 
     to the State in fiscal year 2010 (including payments made to 
     the State under subsection (n) for fiscal year 2010 as well 
     as amounts redistributed to the State in fiscal year 2010), 
     multiplied by the allotment increase factor under paragraph 
     (5) for fiscal year 2011.
       ``(iii) Growth factor update for fiscal year 2012.--For 
     fiscal year 2012, the allotment of the State is equal to the 
     sum of--

       ``(I) the amount of the State allotment under clause (ii) 
     for fiscal year 2011; and
       ``(II) the amount of any payments made to the State under 
     subsection (n) for fiscal year 2011,

     multiplied by the allotment increase factor under paragraph 
     (5) for fiscal year 2012.
       ``(3) For fiscal year 2013.--
       ``(A) First half.--Subject to paragraphs (4) and (6), from 
     the amount made available under subparagraph (A) of paragraph 
     (16) of subsection (a) for the semi-annual period described 
     in such paragraph, increased by the amount of the 
     appropriation for such period under section 108 of the 
     Children's Health Insurance Program Reauthorization Act of 
     2009, the Secretary shall compute a State allotment for each 
     State (including the District of Columbia and each 
     commonwealth and territory) for such semi-annual period in an 
     amount equal to the first half ratio (described in 
     subparagraph (D)) of the amount described in subparagraph 
     (C).
       ``(B) Second half.--Subject to paragraphs (4) and (6), from 
     the amount made available under subparagraph (B) of paragraph 
     (16) of subsection (a) for the semi-annual period described 
     in such paragraph, the Secretary shall compute a State 
     allotment for each State (including the District of Columbia 
     and each commonwealth and territory) for such semi-annual 
     period in an amount equal to the amount made available under 
     such subparagraph, multiplied by the ratio of--
       ``(i) the amount of the allotment to such State under 
     subparagraph (A); to
       ``(ii) the total of the amount of all of the allotments 
     made available under such subparagraph.
       ``(C) Full year amount based on rebased amount.--The amount 
     described in this subparagraph for a State is equal to the 
     Federal payments to the State that are attributable to (and 
     countable towards) the total amount of allotments available 
     under this section to the State in fiscal year 2012 
     (including payments made to the State under subsection (n) 
     for fiscal year 2012 as well as amounts redistributed to the 
     State in fiscal year 2012), multiplied by the allotment 
     increase factor under paragraph (5) for fiscal year 2013.
       ``(D) First half ratio.--The first half ratio described in 
     this subparagraph is the ratio of--
       ``(i) the sum of--

       ``(I) the amount made available under subsection 
     (a)(16)(A); and
       ``(II) the amount of the appropriation for such period 
     under section 108 of the Children's Health Insurance Program 
     Reauthorization Act of 2009; to

       ``(ii) the sum of the--

       ``(I) amount described in clause (i); and
       ``(II) the amount made available under subsection 
     (a)(16)(B).

       ``(4) Proration rule.--If, after the application of this 
     subsection without regard to this paragraph, the sum of the 
     allotments determined under paragraph (1), (2), or (3) for a 
     fiscal year (or, in the case of fiscal year 2013, for a semi-
     annual period in such fiscal year) exceeds the amount 
     available under subsection (a) for such fiscal year or 
     period, the Secretary shall reduce each allotment for any 
     State under such paragraph for such fiscal year or period on 
     a proportional basis.
       ``(5) Allotment increase factor.--The allotment increase 
     factor under this paragraph for a fiscal year is equal to the 
     product of the following:
       ``(A) Per capita health care growth factor.--1 plus the 
     percentage increase in the projected per capita amount of 
     National Health Expenditures from the calendar year in which 
     the previous fiscal year ends to the calendar year in which 
     the fiscal year involved ends, as most recently published by 
     the Secretary before the beginning of the fiscal year.
       ``(B) Child population growth factor.--1 plus the 
     percentage increase (if any) in the population of children in 
     the State from July 1 in the previous fiscal year to July 1 
     in 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, 
     plus 1 percentage point.
       ``(6) Increase in allotment to account for approved program 
     expansions.--In the case of one of the 50 States or the 
     District of Columbia that--
       ``(A) has submitted to the Secretary, and has approved by 
     the Secretary, a State plan amendment or waiver request 
     relating to an expansion of eligibility for children or 
     benefits under this title that becomes effective for a fiscal 
     year (beginning with fiscal year 2010 and ending with fiscal 
     year 2013); and
       ``(B) has submitted to the Secretary, before the August 31 
     preceding the beginning of the fiscal year, a request for an 
     expansion allotment adjustment under this paragraph for such 
     fiscal year that specifies--
       ``(i) the additional expenditures that are attributable to 
     the eligibility or benefit expansion provided under the 
     amendment or waiver described in subparagraph (A), as 
     certified by the State and submitted to the Secretary by not 
     later than August 31 preceding the beginning of the fiscal 
     year; and
       ``(ii) the extent to which such additional expenditures are 
     projected to exceed the allotment of the State or District 
     for the year,

     subject to paragraph (4), the amount of the allotment of the 
     State or District under this subsection for such fiscal year 
     shall be increased by the excess amount described in 
     subparagraph (B)(i). A State or District may only obtain an 
     increase under this paragraph for an allotment for fiscal 
     year 2010 or fiscal year 2012.
       ``(7) Availability of amounts for semi-annual periods in 
     fiscal year 2013.--Each semi-annual allotment made under 
     paragraph (3) for a period in fiscal year 2013 shall remain 
     available for expenditure under this title for periods after 
     the end of such fiscal year in the same manner as if the 
     allotment had been made available for the entire fiscal 
     year.''.

     SEC. 103. CHILD ENROLLMENT CONTINGENCY FUND.

       Section 2104 (42 U.S.C. 1397dd), as amended by section 102, 
     is amended by adding at the end the following new subsection:
       ``(n) Child Enrollment Contingency Fund.--
       ``(1) Establishment.--There is hereby established in the 
     Treasury of the United States a fund which shall be known as 
     the `Child Enrollment Contingency Fund' (in this subsection 
     referred to as the `Fund'). Amounts in the Fund shall be 
     available without further appropriations for payments under 
     this subsection.
       ``(2) Deposits into fund.--
       ``(A) Initial and subsequent appropriations.--Subject to 
     subparagraphs (B) and (D), out of any money in the Treasury 
     of the United States not otherwise appropriated, there are 
     appropriated to the Fund--
       ``(i) for fiscal year 2009, an amount equal to 20 percent 
     of the amount made available under paragraph (12) of 
     subsection (a) for the fiscal year; and
       ``(ii) for each of fiscal years 2010 through 2012 (and for 
     each of the semi-annual allotment periods for fiscal year 
     2013), such sums as are necessary for making payments to 
     eligible States for such fiscal year or period, but not in 
     excess of the aggregate cap described in subparagraph (B).
       ``(B) Aggregate cap.--The total amount available for 
     payment from the Fund for each of fiscal years 2010 through 
     2012 (and for each of the semi-annual allotment periods for 
     fiscal year 2013), taking into account deposits made under 
     subparagraph (C), shall not exceed 20 percent of the amount 
     made available under subsection (a) for the fiscal year or 
     period.
       ``(C) Investment of fund.--The Secretary of the Treasury 
     shall invest, in interest bearing securities of the United 
     States, such currently available portions of the Fund as are 
     not immediately required for payments from

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     the Fund. The income derived from these investments 
     constitutes a part of the Fund.
       ``(D) Availability of excess funds for performance 
     bonuses.--Any amounts in excess of the aggregate cap 
     described in subparagraph (B) for a fiscal year or period 
     shall be made available for purposes of carrying out section 
     2105(a)(3) for any succeeding fiscal year and the Secretary 
     of the Treasury shall reduce the amount in the Fund by the 
     amount so made available.
       ``(3) Child enrollment contingency fund payments.--
       ``(A) In general.--If a State's expenditures under this 
     title in fiscal year 2009, fiscal year 2010, fiscal year 
     2011, fiscal year 2012, or a semi-annual allotment period for 
     fiscal year 2013, exceed the total amount of allotments 
     available under this section to the State in the fiscal year 
     or period (determined without regard to any redistribution it 
     receives under subsection (f) that is available for 
     expenditure during such fiscal year or period, but including 
     any carryover from a previous fiscal year) and if the average 
     monthly unduplicated number of children enrolled under the 
     State plan under this title (including children receiving 
     health care coverage through funds under this title pursuant 
     to a waiver under section 1115) during such fiscal year or 
     period exceeds its target average number of such enrollees 
     (as determined under subparagraph (B)) for that fiscal year 
     or period, subject to subparagraph (D), the Secretary shall 
     pay to the State from the Fund an amount equal to the product 
     of--
       ``(i) the amount by which such average monthly caseload 
     exceeds such target number of enrollees; and
       ``(ii) the projected per capita expenditures under the 
     State child health plan (as determined under subparagraph (C) 
     for the fiscal year), multiplied by the enhanced FMAP (as 
     defined in section 2105(b)) for the State and fiscal year 
     involved (or in which the period occurs).
       ``(B) Target average number of child enrollees.--In this 
     paragraph, the target average number of child enrollees for a 
     State--
       ``(i) for fiscal year 2009 is equal to the monthly average 
     unduplicated number of children enrolled in the State child 
     health plan under this title (including such children 
     receiving health care coverage through funds under this title 
     pursuant to a waiver under section 1115) during fiscal year 
     2008 increased by the population growth for children in that 
     State for the year ending on June 30, 2007 (as estimated by 
     the Bureau of the Census) plus 1 percentage point; or
       ``(ii) for a subsequent fiscal year (or semi-annual period 
     occurring in a fiscal year) is equal to the target average 
     number of child enrollees for the State for the previous 
     fiscal year increased by the child population growth factor 
     described in subsection (m)(5)(B) for the State for the prior 
     fiscal year.
       ``(C) Projected per capita expenditures.--For purposes of 
     subparagraph (A)(ii), the projected per capita expenditures 
     under a State child health plan--
       ``(i) for fiscal year 2009 is equal to the average per 
     capita expenditures (including both State and Federal 
     financial participation) under such plan for the targeted 
     low-income children counted in the average monthly caseload 
     for purposes of this paragraph during fiscal year 2008, 
     increased by the annual percentage increase in the projected 
     per capita amount of National Health Expenditures (as 
     estimated by the Secretary) for 2009; or
       ``(ii) for a subsequent fiscal year (or semi-annual period 
     occurring in a fiscal year) is equal to the projected per 
     capita expenditures under such plan for the previous fiscal 
     year (as determined under clause (i) or this clause) 
     increased by the annual percentage increase in the projected 
     per capita amount of National Health Expenditures (as 
     estimated by the Secretary) for the year in which such 
     subsequent fiscal year ends.
       ``(D) Proration rule.--If the amounts available for payment 
     from the Fund for a fiscal year or period are less than the 
     total amount of payments determined under subparagraph (A) 
     for the fiscal year or period, the amount to be paid under 
     such subparagraph to each eligible State shall be reduced 
     proportionally.
       ``(E) Timely payment; reconciliation.--Payment under this 
     paragraph for a fiscal year or period shall be made before 
     the end of the fiscal year or period based upon the most 
     recent data for expenditures and enrollment and the 
     provisions of subsection (e) of section 2105 shall apply to 
     payments under this subsection in the same manner as they 
     apply to payments under such section.
       ``(F) Continued reporting.--For purposes of this paragraph 
     and subsection (f), the State shall submit to the Secretary 
     the State's projected Federal expenditures, even if the 
     amount of such expenditures exceeds the total amount of 
     allotments available to the State in such fiscal year or 
     period.
       ``(G) Application to commonwealths and territories.--No 
     payment shall be made under this paragraph to a commonwealth 
     or territory described in subsection (c)(3) until such time 
     as the Secretary determines that there are in effect methods, 
     satisfactory to the Secretary, for the collection and 
     reporting of reliable data regarding the enrollment of 
     children described in subparagraphs (A) and (B) in order to 
     accurately determine the commonwealth's or territory's 
     eligibility for, and amount of payment, under this 
     paragraph.''.

     SEC. 104. CHIP PERFORMANCE BONUS PAYMENT TO OFFSET ADDITIONAL 
                   ENROLLMENT COSTS RESULTING FROM ENROLLMENT AND 
                   RETENTION EFFORTS.

       Section 2105(a) (42 U.S.C. 1397ee(a)) is amended by adding 
     at the end the following new paragraphs:
       ``(3) Performance bonus payment to offset additional 
     medicaid and chip child enrollment costs resulting from 
     enrollment and retention efforts.--
       ``(A) In general.--In addition to the payments made under 
     paragraph (1), for each fiscal year (beginning with fiscal 
     year 2009 and ending with fiscal year 2013), the Secretary 
     shall pay from amounts made available under subparagraph (E), 
     to each State that meets the condition under paragraph (4) 
     for the fiscal year, an amount equal to the amount described 
     in subparagraph (B) for the State and fiscal year. The 
     payment under this paragraph shall be made, to a State for a 
     fiscal year, as a single payment not later than the last day 
     of the first calendar quarter of the following fiscal year.
       ``(B) Amount for above baseline medicaid child enrollment 
     costs.--Subject to subparagraph (E), the amount described in 
     this subparagraph for a State for a fiscal year is equal to 
     the sum of the following amounts:
       ``(i) First tier above baseline medicaid enrollees.--An 
     amount equal to the number of first tier above baseline child 
     enrollees (as determined under subparagraph (C)(i)) under 
     title XIX for the State and fiscal year, multiplied by 15 
     percent of the projected per capita State Medicaid 
     expenditures (as determined under subparagraph (D)) for the 
     State and fiscal year under title XIX.
       ``(ii) Second tier above baseline medicaid enrollees.--An 
     amount equal to the number of second tier above baseline 
     child enrollees (as determined under subparagraph (C)(ii)) 
     under title XIX for the State and fiscal year, multiplied by 
     62.5 percent of the projected per capita State Medicaid 
     expenditures (as determined under subparagraph (D)) for the 
     State and fiscal year under title XIX.
       ``(C) Number of first and second tier above baseline child 
     enrollees; baseline number of child enrollees.--For purposes 
     of this paragraph:
       ``(i) First tier above baseline child enrollees.--The 
     number of first tier above baseline child enrollees for a 
     State for a fiscal year under title XIX is equal to the 
     number (if any, as determined by the Secretary) by which--

       ``(I) the monthly average unduplicated number of qualifying 
     children (as defined in subparagraph (F)) enrolled during the 
     fiscal year under the State plan under title XIX, 
     respectively; exceeds
       ``(II) the baseline number of enrollees described in clause 
     (iii) for the State and fiscal year under title XIX, 
     respectively;

     but not to exceed 10 percent of the baseline number of 
     enrollees described in subclause (II).
       ``(ii) Second tier above baseline child enrollees.--The 
     number of second tier above baseline child enrollees for a 
     State for a fiscal year under title XIX is equal to the 
     number (if any, as determined by the Secretary) by which--

       ``(I) the monthly average unduplicated number of qualifying 
     children (as defined in subparagraph (F)) enrolled during the 
     fiscal year under title XIX as described in clause (i)(I); 
     exceeds
       ``(II) the sum of the baseline number of child enrollees 
     described in clause (iii) for the State and fiscal year under 
     title XIX, as described in clause (i)(II), and the maximum 
     number of first tier above baseline child enrollees for the 
     State and fiscal year under title XIX, as determined under 
     clause (i).

       ``(iii) Baseline number of child enrollees.--Subject to 
     subparagraph (H), the baseline number of child enrollees for 
     a State under title XIX--

       ``(I) for fiscal year 2009 is equal to the monthly average 
     unduplicated number of qualifying children enrolled in the 
     State plan under title XIX during fiscal year 2007 increased 
     by the population growth for children in that State from 2007 
     to 2008 (as estimated by the Bureau of the Census) plus 4 
     percentage points, and further increased by the population 
     growth for children in that State from 2008 to 2009 (as 
     estimated by the Bureau of the Census) plus 4 percentage 
     points;
       ``(II) for each of fiscal years 2010, 2011, and 2012, is 
     equal to the baseline number of child enrollees for the State 
     for the previous fiscal year under title XIX, increased by 
     the population growth for children in that State from the 
     calendar year in which the respective fiscal year begins to 
     the succeeding calendar year (as estimated by the Bureau of 
     the Census) plus 3.5 percentage points;
       ``(III) for each of fiscal years 2013, 2014, and 2015, is 
     equal to the baseline number of child enrollees for the State 
     for the previous fiscal year under title XIX, increased by 
     the population growth for children in that State from the 
     calendar year in which the respective fiscal year begins to 
     the succeeding calendar year (as estimated by the Bureau of 
     the Census) plus 3 percentage points; and
       ``(IV) for a subsequent fiscal year is equal to the 
     baseline number of child enrollees for

[[Page 1596]]

     the State for the previous fiscal year under title XIX, 
     increased by the population growth for children in that State 
     from the calendar year in which the fiscal year involved 
     begins to the succeeding calendar year (as estimated by the 
     Bureau of the Census) plus 2 percentage points.

       ``(D) Projected per capita state medicaid expenditures.--
     For purposes of subparagraph (B), the projected per capita 
     State Medicaid expenditures for a State and fiscal year under 
     title XIX is equal to the average per capita expenditures 
     (including both State and Federal financial participation) 
     for children under the State plan under such title, including 
     under waivers but not including such children eligible for 
     assistance by virtue of the receipt of benefits under title 
     XVI, for the most recent fiscal year for which actual data 
     are available (as determined by the Secretary), increased 
     (for each subsequent fiscal year up to and including the 
     fiscal year involved) by the annual percentage increase in 
     per capita amount of National Health Expenditures (as 
     estimated by the Secretary) for the calendar year in which 
     the respective subsequent fiscal year ends and multiplied by 
     a State matching percentage equal to 100 percent minus the 
     Federal medical assistance percentage (as defined in section 
     1905(b)) for the fiscal year involved.
       ``(E) Amounts available for payments.--
       ``(i) Initial appropriation.--Out of any money in the 
     Treasury not otherwise appropriated, there are appropriated 
     $3,225,000,000 for fiscal year 2009 for making payments under 
     this paragraph, to be available until expended.
       ``(ii) Transfers.--Notwithstanding any other provision of 
     this title, the following amounts shall also be available, 
     without fiscal year limitation, for making payments under 
     this paragraph:

       ``(I) Unobligated national allotment.--

       ``(aa) Fiscal years 2009 through 2012.--As of December 31 
     of fiscal year 2009, and as of December 31 of each succeeding 
     fiscal year through fiscal year 2012, the portion, if any, of 
     the amount appropriated under subsection (a) for such fiscal 
     year that is unobligated for allotment to a State under 
     subsection (m) for such fiscal year or set aside under 
     subsection (a)(3) or (b)(2) of section 2111 for such fiscal 
     year.
       ``(bb) First half of fiscal year 2013.--As of December 31 
     of fiscal year 2013, the portion, if any, of the sum of the 
     amounts appropriated under subsection (a)(16)(A) and under 
     section 108 of the Children's Health Insurance 
     Reauthorization Act of 2009 for the period beginning on 
     October 1, 2012, and ending on March 31, 2013, that is 
     unobligated for allotment to a State under subsection (m) for 
     such fiscal year or set aside under subsection (b)(2) of 
     section 2111 for such fiscal year.
       ``(cc) Second half of fiscal year 2013.--As of June 30 of 
     fiscal year 2013, the portion, if any, of the amount 
     appropriated under subsection (a)(16)(B) for the period 
     beginning on April 1, 2013, and ending on September 30, 2013, 
     that is unobligated for allotment to a State under subsection 
     (m) for such fiscal year or set aside under subsection (b)(2) 
     of section 2111 for such fiscal year.

       ``(II) Unexpended allotments not used for redistribution.--
     As of November 15 of each of fiscal years 2010 through 2013, 
     the total amount of allotments made to States under section 
     2104 for the second preceding fiscal year (third preceding 
     fiscal year in the case of the fiscal year 2006, 2007, and 
     2008 allotments) that is not expended or redistributed under 
     section 2104(f) during the period in which such allotments 
     are available for obligation.
       ``(III) Excess child enrollment contingency funds.--As of 
     October 1 of each of fiscal years 2010 through 2013, any 
     amount in excess of the aggregate cap applicable to the Child 
     Enrollment Contingency Fund for the fiscal year under section 
     2104(n).
       ``(IV) Unexpended transitional coverage block grant for 
     nonpregnant childless adults.--As of October 1, 2011, any 
     amounts set aside under section 2111(a)(3) that are not 
     expended by September 30, 2011.

       ``(iii) Proportional reduction.--If the sum of the amounts 
     otherwise payable under this paragraph for a fiscal year 
     exceeds the amount available for the fiscal year under this 
     subparagraph, the amount to be paid under this paragraph to 
     each State shall be reduced proportionally.
       ``(F) Qualifying children defined.--
       ``(i) In general.--For purposes of this subsection, subject 
     to clauses (ii) and (iii), the term `qualifying children' 
     means children who meet the eligibility criteria (including 
     income, categorical eligibility, age, and immigration status 
     criteria) in effect as of July 1, 2008, for enrollment under 
     title XIX, taking into account criteria applied as of such 
     date under title XIX pursuant to a waiver under section 1115.
       ``(ii) Limitation.--A child described in clause (i) who is 
     provided medical assistance during a presumptive eligibility 
     period under section 1920A shall be considered to be a 
     `qualifying child' only if the child is determined to be 
     eligible for medical assistance under title XIX.
       ``(iii) Exclusion.--Such term does not include any children 
     for whom the State has made an election to provide medical 
     assistance under paragraph (4) of section 1903(v).
       ``(G) Application to commonwealths and territories.--The 
     provisions of subparagraph (G) of section 2104(n)(3) shall 
     apply with respect to payment under this paragraph in the 
     same manner as such provisions apply to payment under such 
     section.
       ``(H)  Application to states that implement a Medicaid 
     expansion for children after fiscal year 2008.--In the case 
     of a State that provides coverage under section 115 of the 
     Children's Health Insurance Program Reauthorization Act of 
     2009 for any fiscal year after fiscal year 2008--
       ``(i) any child enrolled in the State plan under title XIX 
     through the application of such an election shall be 
     disregarded from the determination for the State of the 
     monthly average unduplicated number of qualifying children 
     enrolled in such plan during the first 3 fiscal years in 
     which such an election is in effect; and
       ``(ii) in determining the baseline number of child 
     enrollees for the State for any fiscal year subsequent to 
     such first 3 fiscal years, the baseline number of child 
     enrollees for the State under title XIX for the third of such 
     fiscal years shall be the monthly average unduplicated number 
     of qualifying children enrolled in the State plan under title 
     XIX for such third fiscal year.
       ``(4) Enrollment and retention provisions for children.--
     For purposes of paragraph (3)(A), a State meets the condition 
     of this paragraph for a fiscal year if it is implementing at 
     least 5 of the following enrollment and retention provisions 
     (treating each subparagraph as a separate enrollment and 
     retention provision) throughout the entire fiscal year:
       ``(A) Continuous eligibility.--The State has elected the 
     option of continuous eligibility for a full 12 months for all 
     children described in section 1902(e)(12) under title XIX 
     under 19 years of age, as well as applying such policy under 
     its State child health plan under this title.
       ``(B) Liberalization of asset requirements.--The State 
     meets the requirement specified in either of the following 
     clauses:
       ``(i) Elimination of asset test.--The State does not apply 
     any asset or resource test for eligibility for children under 
     title XIX or this title.
       ``(ii) Administrative verification of assets.--The State--

       ``(I) permits a parent or caretaker relative who is 
     applying on behalf of a child for medical assistance under 
     title XIX or child health assistance under this title to 
     declare and certify by signature under penalty of perjury 
     information relating to family assets for purposes of 
     determining and redetermining financial eligibility; and
       ``(II) takes steps to verify assets through means other 
     than by requiring documentation from parents and applicants 
     except in individual cases of discrepancies or where 
     otherwise justified.

       ``(C) Elimination of in-person interview requirement.--The 
     State does not require an application of a child for medical 
     assistance under title XIX (or for child health assistance 
     under this title), including an application for renewal of 
     such assistance, to be made in person nor does the State 
     require a face-to-face interview, unless there are 
     discrepancies or individual circumstances justifying an in-
     person application or face-to-face interview.
       ``(D) Use of joint application for medicaid and chip.--The 
     application form 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.
       ``(E) Automatic renewal (use of administrative renewal).--
       ``(i) In general.--The State provides, in the case of 
     renewal of a child's eligibility for medical assistance under 
     title XIX or child health assistance under this title, a pre-
     printed form completed by the State based on the information 
     available to the State and notice to the parent or caretaker 
     relative of the child that eligibility of the child will be 
     renewed and continued based on such information unless the 
     State is provided other information. Nothing in this clause 
     shall be construed as preventing a State from verifying, 
     through electronic and other means, the information so 
     provided.
       ``(ii) Satisfaction through demonstrated use of ex parte 
     process.--A State shall be treated as satisfying the 
     requirement of clause (i) if renewal of eligibility of 
     children under title XIX or this title is determined without 
     any requirement for an in-person interview, unless sufficient 
     information is not in the State's possession and cannot be 
     acquired from other sources (including other State agencies) 
     without the participation of the applicant or the applicant's 
     parent or caretaker relative.
       ``(F) Presumptive eligibility for children.--The State is 
     implementing section 1920A under title XIX as well as, 
     pursuant to section 2107(e)(1), under this title.
       ``(G) Express lane.--The State is implementing the option 
     described in section 1902(e)(13) under title XIX as well as, 
     pursuant to section 2107(e)(1), under this title.
       ``(H) Premium assistance subsidies.--The State is 
     implementing the option of providing premium assistance 
     subsidies under section 2105(c)(10) or section 1906A.''.

[[Page 1597]]



     SEC. 105. TWO-YEAR INITIAL AVAILABILITY OF CHIP ALLOTMENTS.

       Section 2104(e) (42 U.S.C. 1397dd(e)) is amended to read as 
     follows:
       ``(e) Availability of Amounts Allotted.--
       ``(1) In general.--Except as provided in paragraph (2), 
     amounts allotted to a State pursuant to this section--
       ``(A) for each of fiscal years 1998 through 2008, shall 
     remain available for expenditure by the State through the end 
     of the second succeeding fiscal year; and
       ``(B) for fiscal year 2009 and each fiscal year thereafter, 
     shall remain available for expenditure by the State through 
     the end of the succeeding fiscal year.
       ``(2) Availability of amounts redistributed.--Amounts 
     redistributed to a State under subsection (f) shall be 
     available for expenditure by the State through the end of the 
     fiscal year in which they are redistributed.''.

     SEC. 106. REDISTRIBUTION OF UNUSED ALLOTMENTS.

       (a) Beginning With Fiscal Year 2007.--
       (1) In general.--Section 2104(f) (42 U.S.C. 1397dd(f)) is 
     amended--
       (A) by striking ``The Secretary'' and inserting the 
     following:
       ``(1) In general.--The Secretary'';
       (B) by striking ``States that have fully expended the 
     amount of their allotments under this section.'' and 
     inserting ``States that the Secretary determines with respect 
     to the fiscal year for which unused allotments are available 
     for redistribution under this subsection, are shortfall 
     States described in paragraph (2) for such fiscal year, but 
     not to exceed the amount of the shortfall described in 
     paragraph (2)(A) for each such State (as may be adjusted 
     under paragraph (2)(C)).''; and
       (C) by adding at the end the following new paragraph:
       ``(2) Shortfall states described.--
       ``(A) In general.--For purposes of paragraph (1), with 
     respect to a fiscal year, a shortfall State described in this 
     subparagraph is a State with a State child health plan 
     approved under this title for which the Secretary estimates 
     on the basis of the most recent data available to the 
     Secretary, that the projected expenditures under such plan 
     for the State for the fiscal year will exceed the sum of--
       ``(i) the amount of the State's allotments for any 
     preceding fiscal years that remains available for expenditure 
     and that will not be expended by the end of the immediately 
     preceding fiscal year;
       ``(ii) the amount (if any) of the child enrollment 
     contingency fund payment under subsection (n); and
       ``(iii) the amount of the State's allotment for the fiscal 
     year.
       ``(B) Proration rule.--If the amounts available for 
     redistribution under paragraph (1) for a fiscal year are less 
     than the total amounts of the estimated shortfalls determined 
     for the year under subparagraph (A), the amount to be 
     redistributed under such paragraph for each shortfall State 
     shall be reduced proportionally.
       ``(C) Retrospective adjustment.--The Secretary may adjust 
     the estimates and determinations made under paragraph (1) and 
     this paragraph with respect to a fiscal year as necessary on 
     the basis of the amounts reported by States not later than 
     November 30 of the succeeding fiscal year, as approved by the 
     Secretary.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall apply to redistribution of allotments made for fiscal 
     year 2007 and subsequent fiscal years.
       (b) Redistribution of Unused Allotments for Fiscal Year 
     2006.--Section 2104(k) (42 U.S.C. 1397dd(k)) is amended--
       (1) in the subsection heading, by striking ``the First 2 
     Quarters of'';
       (2) in paragraph (1), by striking ``the first 2 quarters 
     of''; and
       (3) in paragraph (6)--
       (A) by striking ``the first 2 quarters of''; and
       (B) by striking ``March 31'' and inserting ``September 
     30''.

     SEC. 107. OPTION FOR QUALIFYING STATES TO RECEIVE THE 
                   ENHANCED PORTION OF THE CHIP MATCHING RATE FOR 
                   MEDICAID COVERAGE OF CERTAIN CHILDREN.

       (a) In General.--Section 2105(g) (42 U.S.C. 1397ee(g)) is 
     amended--
       (1) in paragraph (1)(A), as amended by section 201(b)(1) of 
     Public Law 110-173--
       (A) by inserting ``subject to paragraph (4),'' after 
     ``Notwithstanding any other provision of law,''; and
       (B) by striking ``2008, or 2009'' and inserting ``or 
     2008''; and
       (2) by adding at the end the following new paragraph:
       ``(4) Option for allotments for fiscal years 2009 through 
     2013.--
       ``(A) Payment of enhanced portion of matching rate for 
     certain expenditures.--In the case of expenditures described 
     in subparagraph (B), a qualifying State (as defined in 
     paragraph (2)) may elect to be paid from the State's 
     allotment made under section 2104 for any of fiscal years 
     2009 through 2013 (insofar as the allotment is available to 
     the State under subsections (e) and (m) of such section) an 
     amount each quarter equal to the additional amount that would 
     have been paid to the State under title XIX with respect to 
     such expenditures if the enhanced FMAP (as determined under 
     subsection (b)) had been substituted for the Federal medical 
     assistance percentage (as defined in section 1905(b)).
       ``(B) Expenditures described.--For purposes of subparagraph 
     (A), the expenditures described in this subparagraph are 
     expenditures made after the date of the enactment of this 
     paragraph and during the period in which funds are available 
     to the qualifying State for use under subparagraph (A), for 
     the provision of medical assistance to individuals residing 
     in the State who are eligible for medical assistance under 
     the State plan under title XIX or under a waiver of such plan 
     and who have not attained age 19 (or, if a State has so 
     elected under the State plan under title XIX, age 20 or 21), 
     and whose family income equals or exceeds 133 percent of the 
     poverty line but does not exceed the Medicaid applicable 
     income level.''.
       (b) Repeal of Limitation on Availability of Fiscal Year 
     2009 Allotments.--Paragraph (2) of section 201(b) of the 
     Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
     Law 110-173) is repealed.

     SEC. 108. ONE-TIME APPROPRIATION.

       There is appropriated to the Secretary, out of any money in 
     the Treasury not otherwise appropriated, $11,706,000,000 to 
     accompany the allotment made for the period beginning on 
     October 1, 2012, and ending on March 31, 2013, under section 
     2104(a)(16)(A) of the Social Security Act (42 U.S.C. 
     1397dd(a)(16)(A)) (as added by section 101), to remain 
     available until expended. Such amount shall be used to 
     provide allotments to States under paragraph (3) of section 
     2104(m) of the Social Security Act (42 U.S.C. 1397dd(i)), as 
     added by section 102, for the first 6 months of fiscal year 
     2013 in the same manner as allotments are provided under 
     subsection (a)(16)(A) of such section 2104 and subject to the 
     same terms and conditions as apply to the allotments provided 
     from such subsection (a)(16)(A).

     SEC. 109. IMPROVING FUNDING FOR THE TERRITORIES UNDER CHIP 
                   AND MEDICAID.

       Section 1108(g) (42 U.S.C. 1308(g)) is amended by adding at 
     the end the following new paragraph:
       ``(4) Exclusion of certain expenditures from payment 
     limits.--With respect to fiscal years beginning with fiscal 
     year 2009, if Puerto Rico, the Virgin Islands, Guam, the 
     Northern Mariana Islands, or American Samoa qualify for a 
     payment under subparagraph (A)(i), (B), or (F) of section 
     1903(a)(3) for a calendar quarter of such fiscal year, the 
     payment shall not be taken into account in applying 
     subsection (f) (as increased in accordance with paragraphs 
     (1), (2), and (3) of this subsection) to such commonwealth or 
     territory for such fiscal year.''.

      Subtitle B--Focus on Low-Income Children and Pregnant Women

     SEC. 111. STATE OPTION TO COVER LOW-INCOME PREGNANT WOMEN 
                   UNDER CHIP THROUGH A STATE PLAN AMENDMENT.

       (a) In General.--Title XXI (42 U.S.C. 1397aa et seq.), as 
     amended by section 112(a), is amended by adding at the end 
     the following new section:

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

       ``(a) In General.--Subject to the succeeding provisions of 
     this section, a State may elect through an amendment to its 
     State child health plan under section 2102 to provide 
     pregnancy-related assistance under such plan for targeted 
     low-income pregnant women.
       ``(b) Conditions.--A State may only elect the option under 
     subsection (a) if the following conditions are satisfied:
       ``(1) Minimum income eligibility levels for pregnant women 
     and children.--The State has established an income 
     eligibility level--
       ``(A) for pregnant women under subsection 
     (a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), or (l)(1)(A) of 
     section 1902 that is at least 185 percent (or such higher 
     percent as the State has in effect with regard to pregnant 
     women under this title) of the poverty line applicable to a 
     family of the size involved, but in no case lower than the 
     percent in effect under any such subsection as of July 1, 
     2008; and
       ``(B) for children under 19 years of age under this title 
     (or title XIX) that is at least 200 percent of the poverty 
     line applicable to a family of the size involved.
       ``(2) No chip income eligibility level for pregnant women 
     lower than the state's medicaid level.--The State does not 
     apply an effective income level for pregnant women under the 
     State plan amendment that is lower than the effective income 
     level (expressed as a percent of the poverty line and 
     considering applicable income disregards) specified under 
     subsection (a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), or 
     (l)(1)(A) of section 1902, on the date of enactment of this 
     paragraph to be eligible for medical assistance as a pregnant 
     woman.
       ``(3) No coverage for higher income pregnant women without 
     covering lower income pregnant women.--The State does not 
     provide coverage for pregnant women with

[[Page 1598]]

     higher family income without covering pregnant women with a 
     lower family income.
       ``(4) Application of requirements for coverage of targeted 
     low-income children.--The State provides pregnancy-related 
     assistance for targeted low-income pregnant women in the same 
     manner, and subject to the same requirements, as the State 
     provides child health assistance for targeted low-income 
     children under the State child health plan, and in addition 
     to providing child health assistance for such women.
       ``(5) No preexisting condition exclusion or waiting 
     period.--The State does not apply any exclusion of benefits 
     for pregnancy-related assistance based on any preexisting 
     condition or any waiting period (including any waiting period 
     imposed to carry out section 2102(b)(3)(C)) for receipt of 
     such assistance.
       ``(6) Application of cost-sharing protection.--The State 
     provides pregnancy-related assistance to a targeted low-
     income woman consistent with the cost-sharing protections 
     under section 2103(e) and applies the limitation on total 
     annual aggregate cost sharing imposed under paragraph (3)(B) 
     of such section to the family of such a woman.
       ``(7) No waiting list for children.--The State does not 
     impose, with respect to the enrollment under the State child 
     health plan of targeted low-income children during the 
     quarter, any enrollment cap or other numerical limitation on 
     enrollment, any waiting list, any procedures designed to 
     delay the consideration of applications for enrollment, or 
     similar limitation with respect to enrollment.
       ``(c) Option To Provide Presumptive Eligibility.--A State 
     that elects the option under subsection (a) and satisfies the 
     conditions described in subsection (b) may elect to apply 
     section 1920 (relating to presumptive eligibility for 
     pregnant women) to the State child health plan in the same 
     manner as such section applies to the State plan under title 
     XIX.
       ``(d) Definitions.--For purposes of this section:
       ``(1) Pregnancy-related assistance.--The term `pregnancy-
     related assistance' has the meaning given the term `child 
     health assistance' in section 2110(a) with respect to an 
     individual during the period described in paragraph (2)(A).
       ``(2) Targeted low-income pregnant woman.--The term 
     `targeted low-income pregnant woman' means an individual--
       ``(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 185 percent (or, if 
     higher, the percent applied under subsection (b)(1)(A)) of 
     the poverty line applicable to a family of the size involved, 
     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.
       ``(e) Automatic Enrollment for Children Born to Women 
     Receiving Pregnancy-Related Assistance.--If a child is born 
     to a targeted low-income pregnant woman who was receiving 
     pregnancy-related assistance under this section on the date 
     of the child's birth, the child shall be deemed to have 
     applied for child health assistance under the State child 
     health plan and to have been found eligible for such 
     assistance under such plan or to have applied for medical 
     assistance under title XIX and to have been found eligible 
     for such assistance under such title, as appropriate, on the 
     date of such birth and to remain eligible for such assistance 
     until the child attains 1 year of age. During the period in 
     which a child is deemed under the preceding sentence to be 
     eligible for child health or medical assistance, the child 
     health or medical assistance eligibility identification 
     number of the mother shall also serve as the identification 
     number of the child, and all claims shall be submitted and 
     paid under such number (unless the State issues a separate 
     identification number for the child before such period 
     expires).
       ``(f) States Providing Assistance Through Other Options.--
       ``(1) Continuation of other options for providing 
     assistance.--The option to provide assistance in accordance 
     with the preceding subsections of this section shall not 
     limit any other option for a State to provide--
       ``(A) child health assistance through the application of 
     sections 457.10, 457.350(b)(2), 457.622(c)(5), and 
     457.626(a)(3) of title 42, Code of Federal Regulations (as in 
     effect after the final rule adopted by the Secretary and set 
     forth at 67 Fed. Reg. 61956-61974 (October 2, 2002)), or
       ``(B) pregnancy-related services through the application of 
     any waiver authority (as in effect on June 1, 2008).
       ``(2) Clarification of authority to provide postpartum 
     services.--Any State that provides child health assistance 
     under any authority described in paragraph (1) may continue 
     to provide such assistance, as well as postpartum services, 
     through the end of the month in which the 60-day period 
     (beginning on the last day of the pregnancy) ends, in the 
     same manner as such assistance and postpartum services would 
     be provided if provided under the State plan under title XIX, 
     but only if the mother would otherwise satisfy the 
     eligibility requirements that apply under the State child 
     health plan (other than with respect to age) during such 
     period.
       ``(3) No inference.--Nothing in this subsection shall be 
     construed--
       ``(A) to infer congressional intent regarding the legality 
     or illegality of the content of the sections specified in 
     paragraph (1)(A); or
       ``(B) to modify the authority to provide pregnancy-related 
     services under a waiver specified in paragraph (1)(B).''.
       (b) Additional Conforming Amendments.--
       (1) No cost sharing for pregnancy-related benefits.--
     Section 2103(e)(2) (42 U.S.C. 1397cc(e)(2)) is amended--
       (A) in the heading, by inserting ``OR PREGNANCY-RELATED 
     ASSISTANCE'' after ``PREVENTIVE SERVICES''; and
       (B) by inserting before the period at the end the 
     following: ``or for pregnancy-related assistance''.
       (2) No waiting period.--Section 2102(b)(1)(B) (42 U.S.C. 
     1397bb(b)(1)(B)) is amended--
       (A) in clause (i), by striking ``, and'' at the end and 
     inserting a semicolon;
       (B) in clause (ii), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following new clause:
       ``(iii) may not apply a waiting period (including a waiting 
     period to carry out paragraph (3)(C)) in the case of a 
     targeted low-income pregnant woman provided pregnancy-related 
     assistance under section 2112.''.

     SEC. 112. PHASE-OUT OF COVERAGE FOR NONPREGNANT CHILDLESS 
                   ADULTS UNDER CHIP; CONDITIONS FOR COVERAGE OF 
                   PARENTS.

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

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

       ``(a) Termination of Coverage for Nonpregnant Childless 
     Adults.--
       ``(1) No new chip waivers; automatic extensions at state 
     option through 2009.--Notwithstanding section 1115 or any 
     other provision of this title, except as provided in this 
     subsection--
       ``(A) the Secretary shall not on or after the date of the 
     enactment of the Children's Health Insurance Program 
     Reauthorization Act of 2009, approve or renew a waiver, 
     experimental, pilot, or demonstration project that would 
     allow funds made available under this title to be used to 
     provide child health assistance or other health benefits 
     coverage to a nonpregnant childless adult; and
       ``(B) notwithstanding the terms and conditions of an 
     applicable existing waiver, the provisions of paragraph (2) 
     shall apply for purposes of any period beginning on or after 
     January 1, 2010, in determining the period to which the 
     waiver applies, the individuals eligible to be covered by the 
     waiver, and the amount of the Federal payment under this 
     title.
       ``(2) Termination of chip coverage under applicable 
     existing waivers at the end of 2009.--
       ``(A) In general.--No funds shall be available under this 
     title for child health assistance or other health benefits 
     coverage that is provided to a nonpregnant childless adult 
     under an applicable existing waiver after December 31, 2009.
       ``(B) Extension upon state request.--If an applicable 
     existing waiver described in subparagraph (A) would otherwise 
     expire before January 1, 2010, notwithstanding the 
     requirements of subsections (e) and (f) of section 1115, a 
     State may submit, not later than September 30, 2009, a 
     request to the Secretary for an extension of the waiver. The 
     Secretary shall approve a request for an extension of an 
     applicable existing waiver submitted pursuant to this 
     subparagraph, but only through December 31, 2009.
       ``(C) Application of enhanced fmap.--The enhanced FMAP 
     determined under section 2105(b) shall apply to expenditures 
     under an applicable existing waiver for the provision of 
     child health assistance or other health benefits coverage to 
     a nonpregnant childless adult during the period beginning on 
     the date of the enactment of this subsection and ending on 
     December 31, 2009.
       ``(3) State option to apply for medicaid waiver to continue 
     coverage for nonpregnant childless adults.--
       ``(A) In general.--Each State for which coverage under an 
     applicable existing waiver is terminated under paragraph 
     (2)(A) may submit, not later than September 30, 2009, an 
     application to the Secretary for a waiver under section 1115 
     of the State plan under title XIX to provide medical 
     assistance to a nonpregnant childless adult whose coverage is 
     so terminated (in this subsection referred to as a `Medicaid 
     nonpregnant childless adults waiver').
       ``(B) Deadline for approval.--The Secretary shall make a 
     decision to approve or deny an application for a Medicaid 
     nonpregnant childless adults waiver submitted under

[[Page 1599]]

     subparagraph (A) within 90 days of the date of the submission 
     of the application. If no decision has been made by the 
     Secretary as of December 31, 2009, on the application of a 
     State for a Medicaid nonpregnant childless adults waiver that 
     was submitted to the Secretary by September 30, 2009, the 
     application shall be deemed approved.
       ``(C) Standard for budget neutrality.--The budget 
     neutrality requirement applicable with respect to 
     expenditures for medical assistance under a Medicaid 
     nonpregnant childless adults waiver shall--
       ``(i) in the case of fiscal year 2010, allow expenditures 
     for medical assistance under title XIX for all such adults to 
     not exceed the total amount of payments made to the State 
     under paragraph (2)(B) for fiscal year 2009, increased by the 
     percentage increase (if any) in the projected nominal per 
     capita amount of National Health Expenditures for 2010 over 
     2009, as most recently published by the Secretary; and
       ``(ii) in the case of any succeeding fiscal year, allow 
     such expenditures to not exceed the amount in effect under 
     this subparagraph for the preceding fiscal year, increased by 
     the percentage increase (if any) in the projected nominal per 
     capita amount of National Health Expenditures for the 
     calendar year that begins during the year involved over the 
     preceding calendar year, as most recently published by the 
     Secretary.
       ``(b) Rules and Conditions for Coverage of Parents of 
     Targeted Low-Income Children.--
       ``(1) Two-year period; automatic extension at state option 
     through fiscal year 2011.--
       ``(A) No new chip waivers.--Notwithstanding section 1115 or 
     any other provision of this title, except as provided in this 
     subsection--
       ``(i) the Secretary shall not on or after the date of the 
     enactment of the Children's Health Insurance Program 
     Reauthorization Act of 2009 approve or renew a waiver, 
     experimental, pilot, or demonstration project that would 
     allow funds made available under this title to be used to 
     provide child health assistance or other health benefits 
     coverage to a parent of a targeted low-income child; and
       ``(ii) notwithstanding the terms and conditions of an 
     applicable existing waiver, the provisions of paragraphs (2) 
     and (3) shall apply for purposes of any fiscal year beginning 
     on or after October 1, 2011, in determining the period to 
     which the waiver applies, the individuals eligible to be 
     covered by the waiver, and the amount of the Federal payment 
     under this title.
       ``(B) Extension upon state request.--If an applicable 
     existing waiver described in subparagraph (A) would otherwise 
     expire before October 1, 2011, and the State requests an 
     extension of such waiver, the Secretary shall grant such an 
     extension, but only, subject to paragraph (2)(A), through 
     September 30, 2011.
       ``(C) Application of enhanced fmap.--The enhanced FMAP 
     determined under section 2105(b) shall apply to expenditures 
     under an applicable existing waiver for the provision of 
     child health assistance or other health benefits coverage to 
     a parent of a targeted low-income child during the third and 
     fourth quarters of fiscal year 2009 and during fiscal years 
     2010 and 2011.
       ``(2) Rules for fiscal years 2012 through 2013.--
       ``(A) Payments for coverage limited to block grant funded 
     from state allotment.--Any State that provides child health 
     assistance or health benefits coverage under an applicable 
     existing waiver for a parent of a targeted low-income child 
     may elect to continue to provide such assistance or coverage 
     through fiscal year 2012 or 2013, subject to the same terms 
     and conditions that applied under the applicable existing 
     waiver, unless otherwise modified in subparagraph (B).
       ``(B) Terms and conditions.--
       ``(i) Block grant set aside from state allotment.--If the 
     State makes an election under subparagraph (A), the Secretary 
     shall set aside for the State for each such fiscal year an 
     amount equal to the Federal share of 110 percent of the 
     State's projected expenditures under the applicable existing 
     waiver for providing child health assistance or health 
     benefits coverage to all parents of targeted low-income 
     children enrolled under such waiver for the fiscal year (as 
     certified by the State and submitted to the Secretary by not 
     later than August 31 of the preceding fiscal year). In the 
     case of fiscal year 2013, the set aside for any State shall 
     be computed separately for each period described in 
     subparagraphs (A) and (B) of section 2104(a)(16) and any 
     reduction in the allotment for either such period under 
     section 2104(m)(4) shall be allocated on a pro rata basis to 
     such set aside.
       ``(ii) Payments from block grant.--The Secretary shall pay 
     the State from the amount set aside under clause (i) for the 
     fiscal year, an amount for each quarter of such fiscal year 
     equal to the applicable percentage determined under clause 
     (iii) or (iv) for expenditures in the quarter for providing 
     child health assistance or other health benefits coverage to 
     a parent of a targeted low-income child.
       ``(iii) Enhanced fmap only in fiscal year 2012 for states 
     with significant child outreach or that achieve child 
     coverage benchmarks; fmap for any other states.--For purposes 
     of clause (ii), the applicable percentage for any quarter of 
     fiscal year 2012 is equal to--

       ``(I) the enhanced FMAP determined under section 2105(b) in 
     the case of a State that meets the outreach or coverage 
     benchmarks described in any of subparagraph (A), (B), or (C) 
     of paragraph (3) for fiscal year 2011; or
       ``(II) the Federal medical assistance percentage (as 
     determined under section 1905(b) without regard to clause (4) 
     of such section) in the case of any other State.

       ``(iv) Amount of federal matching payment in 2013.--For 
     purposes of clause (ii), the applicable percentage for any 
     quarter of fiscal year 2013 is equal to--

       ``(I) the REMAP percentage if--

       ``(aa) the applicable percentage for the State under clause 
     (iii) was the enhanced FMAP for fiscal year 2012; and
       ``(bb) the State met either of the coverage benchmarks 
     described in subparagraph (B) or (C) of paragraph (3) for 
     fiscal year 2012; or

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

     For purposes of subclause (I), the REMAP percentage is the 
     percentage which is the sum of such Federal medical 
     assistance percentage and a number of percentage points equal 
     to one-half of the difference between such Federal medical 
     assistance percentage and such enhanced FMAP.
       ``(v) No federal payments other than from block grant set 
     aside.--No payments shall be made to a State for expenditures 
     described in clause (ii) after the total amount set aside 
     under clause (i) for a fiscal year has been paid to the 
     State.
       ``(vi) No increase in income eligibility level for 
     parents.--No payments shall be made to a State from the 
     amount set aside under clause (i) for a fiscal year for 
     expenditures for providing child health assistance or health 
     benefits coverage to a parent of a targeted low-income child 
     whose family income exceeds the income eligibility level 
     applied under the applicable existing waiver to parents of 
     targeted low-income children on the date of enactment of the 
     Children's Health Insurance Program Reauthorization Act of 
     2009.
       ``(3) Outreach or coverage benchmarks.--For purposes of 
     paragraph (2), the outreach or coverage benchmarks described 
     in this paragraph are as follows:
       ``(A) Significant child outreach campaign.--The State--
       ``(i) was awarded a grant under section 2113 for fiscal 
     year 2011;
       ``(ii) implemented 1 or more of the enrollment and 
     retention provisions described in section 2105(a)(4) for such 
     fiscal year; or
       ``(iii) has submitted a specific plan for outreach for such 
     fiscal year.
       ``(B) High-performing state.--The State, on the basis of 
     the most timely and accurate published estimates of the 
     Bureau of the Census, ranks in the lowest \1/3\ of States in 
     terms of the State's percentage of low-income children 
     without health insurance.
       ``(C) State increasing enrollment of low-income children.--
     The State qualified for a performance bonus payment under 
     section 2105(a)(3)(B) for the most recent fiscal year 
     applicable under such section.
       ``(4) Rules of construction.--Nothing in this subsection 
     shall be construed as prohibiting a State from submitting an 
     application to the Secretary for a waiver under section 1115 
     of the State plan under title XIX to provide medical 
     assistance to a parent of a targeted low-income child that 
     was provided child health assistance or health benefits 
     coverage under an applicable existing waiver.
       ``(c) Applicable Existing Waiver.--For purposes of this 
     section--
       ``(1) In general.--The term `applicable existing waiver' 
     means a waiver, experimental, pilot, or demonstration project 
     under section 1115, grandfathered under section 6102(c)(3) of 
     the Deficit Reduction Act of 2005, or otherwise conducted 
     under authority that--
       ``(A) would allow funds made available under this title to 
     be used to provide child health assistance or other health 
     benefits coverage to--
       ``(i) a parent of a targeted low-income child;
       ``(ii) a nonpregnant childless adult; or
       ``(iii) individuals described in both clauses (i) and (ii); 
     and
       ``(B) was in effect during fiscal year 2009.
       ``(2) Definitions.--
       ``(A) Parent.--The term `parent' includes a caretaker 
     relative (as such term is used in carrying out section 1931) 
     and a legal guardian.
       ``(B) Nonpregnant childless adult.--The term `nonpregnant 
     childless adult' has the meaning given such term by section 
     2107(f).''.
       (2) Conforming amendments.--
       (A) Section 2107(f) (42 U.S.C. 1397gg(f)) is amended--
       (i) by striking ``, the Secretary'' and inserting ``:
       ``(1) The Secretary'';
       (ii) in the first sentence, by inserting ``or a parent (as 
     defined in section 2111(c)(2)(A)), who is not pregnant, of a 
     targeted low-income child'' before the period;
       (iii) by striking the second sentence; and
       (iv) by adding at the end the following new paragraph:

[[Page 1600]]

       ``(2) The Secretary may not approve, extend, renew, or 
     amend a waiver, experimental, pilot, or demonstration project 
     with respect to a State after the date of enactment of the 
     Children's Health Insurance Program Reauthorization Act of 
     2009 that would waive or modify the requirements of section 
     2111.''.
       (B) Section 6102(c) of the Deficit Reduction Act of 2005 
     (Public Law 109-171; 120 Stat. 131) is amended by striking 
     ``Nothing'' and inserting ``Subject to section 2111 of the 
     Social Security Act, as added by section 112 of the 
     Children's Health Insurance Program Reauthorization Act of 
     2009, nothing''.
       (b) GAO Study and Report.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study of whether--
       (A) the coverage of a parent, a caretaker relative (as such 
     term is used in carrying out section 1931), or a legal 
     guardian of a targeted low-income child under a State health 
     plan under title XXI of the Social Security Act increases the 
     enrollment of, or the quality of care for, children, and
       (B) such parents, relatives, and legal guardians who enroll 
     in such a plan are more likely to enroll their children in 
     such a plan or in a State plan under title XIX of such Act.
       (2) Report.--Not later than 2 years after the date of the 
     enactment of this Act, the Comptroller General shall report 
     the results of the study to the Committee on Finance of the 
     Senate and the Committee on Energy and Commerce of the House 
     of Representatives, including recommendations (if any) for 
     changes in legislation.

     SEC. 113. ELIMINATION OF COUNTING MEDICAID CHILD PRESUMPTIVE 
                   ELIGIBILITY COSTS AGAINST TITLE XXI ALLOTMENT.

       (a) In General.--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]''.
       (b) 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 flush sentence:
     ``The term `qualified provider' also includes a qualified 
     entity, as defined in section 1920A(b)(3).''.

     SEC. 114. LIMITATION ON MATCHING RATE FOR STATES THAT PROPOSE 
                   TO COVER CHILDREN WITH EFFECTIVE FAMILY INCOME 
                   THAT EXCEEDS 300 PERCENT OF THE POVERTY LINE.

       (a) FMAP Applied to Expenditures.--Section 2105(c) (42 
     U.S.C. 1397ee(c)) is amended by adding at the end the 
     following new paragraph:
       ``(8) Limitation on matching rate for expenditures for 
     child health assistance provided to children whose effective 
     family income exceeds 300 percent of the poverty line.--
       ``(A) FMAP applied to expenditures.--Except as provided in 
     subparagraph (B), for fiscal years beginning with fiscal year 
     2009, the Federal medical assistance percentage (as 
     determined under section 1905(b) without regard to clause (4) 
     of such section) shall be substituted for the enhanced FMAP 
     under subsection (a)(1) with respect to any expenditures for 
     providing child health assistance or health benefits coverage 
     for a targeted low-income child whose effective family income 
     would exceed 300 percent of the poverty line but for the 
     application of a general exclusion of a block of income that 
     is not determined by type of expense or type of income.
       ``(B) Exception.--Subparagraph (A) shall not apply to any 
     State that, on the date of enactment of the Children's Health 
     Insurance Program Reauthorization Act of 2009, has an 
     approved State plan amendment or waiver to provide, or has 
     enacted a State law to submit a State plan amendment to 
     provide, expenditures described in such subparagraph under 
     the State child health plan.''.
       (b) Rule of Construction.--Nothing in the amendments made 
     by this section shall be construed as--
       (1) changing any income eligibility level for children 
     under title XXI of the Social Security Act; or
       (2) changing the flexibility provided States under such 
     title to establish the income eligibility level for targeted 
     low-income children under a State child health plan and the 
     methodologies used by the State to determine income or assets 
     under such plan.

     SEC. 115. STATE AUTHORITY UNDER MEDICAID.

       Notwithstanding any other provision of law, including the 
     fourth sentence of subsection (b) of section 1905 of the 
     Social Security Act (42 U.S.C. 1396d) or subsection (u) of 
     such section, at State option, the Secretary shall provide 
     the State with the Federal medical assistance percentage 
     determined for the State for Medicaid with respect to 
     expenditures described in section 1905(u)(2)(A) of such Act 
     or otherwise made to provide medical assistance under 
     Medicaid to a child who could be covered by the State under 
     CHIP.

                   TITLE II--OUTREACH AND ENROLLMENT

             Subtitle A--Outreach and Enrollment Activities

     SEC. 201. GRANTS AND ENHANCED ADMINISTRATIVE FUNDING FOR 
                   OUTREACH AND ENROLLMENT.

       (a) Grants.--Title XXI (42 U.S.C. 1397aa et seq.), as 
     amended by section 111, is amended by adding at the end the 
     following:

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

       ``(a) Outreach and Enrollment Grants; National Campaign.--
       ``(1) In general.--From the amounts appropriated under 
     subsection (g), subject to paragraph (2), the Secretary shall 
     award grants to eligible entities during the period of fiscal 
     years 2009 through 2013 to conduct outreach and enrollment 
     efforts that are designed to increase the enrollment and 
     participation of eligible children under this title and title 
     XIX.
       ``(2) Ten percent set aside for national enrollment 
     campaign.--An amount equal to 10 percent of such amounts 
     shall be used by the Secretary for expenditures during such 
     period to carry out a national enrollment campaign in 
     accordance with subsection (h).
       ``(b) Priority for Award of Grants.--
       ``(1) In general.--In awarding grants under subsection (a), 
     the Secretary shall give priority to eligible entities that--
       ``(A) propose to target geographic areas with high rates 
     of--
       ``(i) eligible but unenrolled children, including such 
     children who reside in rural areas; or
       ``(ii) racial and ethnic minorities and health disparity 
     populations, including those proposals that address cultural 
     and linguistic barriers to enrollment; and
       ``(B) submit the most demonstrable evidence required under 
     paragraphs (1) and (2) of subsection (c).
       ``(2) Ten percent set aside for outreach to indian 
     children.--An amount equal to 10 percent of the funds 
     appropriated under subsection (g) shall be used by the 
     Secretary to award grants to Indian Health Service providers 
     and urban Indian organizations receiving funds under title V 
     of the Indian Health Care Improvement Act (25 U.S.C. 1651 et 
     seq.) for outreach to, and enrollment of, children who are 
     Indians.
       ``(c) Application.--An eligible entity that desires to 
     receive a grant under subsection (a) shall submit an 
     application to the Secretary in such form and manner, and 
     containing such information, as the Secretary may decide. 
     Such application shall include--
       ``(1) evidence demonstrating that the entity includes 
     members who have access to, and credibility with, ethnic or 
     low-income populations in the communities in which activities 
     funded under the grant are to be conducted;
       ``(2) evidence demonstrating that the entity has the 
     ability to address barriers to enrollment, such as lack of 
     awareness of eligibility, stigma concerns and punitive fears 
     associated with receipt of benefits, and other cultural 
     barriers to applying for and receiving child health 
     assistance or medical assistance;
       ``(3) specific quality or outcomes performance measures to 
     evaluate the effectiveness of activities funded by a grant 
     awarded under this section; and
       ``(4) an assurance that the eligible entity shall--
       ``(A) conduct an assessment of the effectiveness of such 
     activities against the performance measures;
       ``(B) cooperate with the collection and reporting of 
     enrollment data and other information in order for the 
     Secretary to conduct such assessments; and
       ``(C) in the case of an eligible entity that is not the 
     State, provide the State with enrollment data and other 
     information as necessary for the State to make necessary 
     projections of eligible children and pregnant women.
       ``(d) Dissemination of Enrollment Data and Information 
     Determined From Effectiveness Assessments; Annual Report.--
     The Secretary shall--
       ``(1) make publicly available the enrollment data and 
     information collected and reported in accordance with 
     subsection (c)(4)(B); and
       ``(2) submit an annual report to Congress on the outreach 
     and enrollment activities conducted with funds appropriated 
     under this section.
       ``(e) Maintenance of Effort for States Awarded Grants; No 
     State Match Required.--In the case of a State that is awarded 
     a grant under this section--
       ``(1) the State share of funds expended for outreach and 
     enrollment activities under the State child health plan shall 
     not be less than the State share of such funds expended in 
     the fiscal year preceding the first fiscal year for which the 
     grant is awarded; and
       ``(2) no State matching funds shall be required for the 
     State to receive a grant under this section.
       ``(f) Definitions.--In this section:
       ``(1) Eligible entity.--The term `eligible entity' means 
     any of the following:

[[Page 1601]]

       ``(A) A State with an approved child health plan under this 
     title.
       ``(B) A local government.
       ``(C) An Indian tribe or tribal consortium, a tribal 
     organization, an urban Indian organization receiving funds 
     under title V of the Indian Health Care Improvement Act (25 
     U.S.C. 1651 et seq.), or an Indian Health Service provider.
       ``(D) A Federal health safety net organization.
       ``(E) A national, State, local, or community-based public 
     or nonprofit private organization, including organizations 
     that use community health workers or community-based doula 
     programs.
       ``(F) A faith-based organization or consortia, to the 
     extent that a grant awarded to such an entity is consistent 
     with the requirements of section 1955 of the Public Health 
     Service Act (42 U.S.C. 300x-65) relating to a grant award to 
     nongovernmental entities.
       ``(G) An elementary or secondary school.
       ``(2) Federal health safety net organization.--The term 
     `Federal health safety net organization' means--
       ``(A) a Federally-qualified health center (as defined in 
     section 1905(l)(2)(B));
       ``(B) a hospital defined as a disproportionate share 
     hospital for purposes of section 1923;
       ``(C) a covered entity described in section 340B(a)(4) of 
     the Public Health Service Act (42 U.S.C. 256b(a)(4)); and
       ``(D) any other entity or consortium that serves children 
     under a federally funded program, including the special 
     supplemental nutrition program for women, infants, and 
     children (WIC) established under section 17 of the Child 
     Nutrition Act of 1966 (42 U.S.C. 1786), the Head Start and 
     Early Head Start programs under the Head Start Act (42 U.S.C. 
     9801 et seq.), the school lunch program established under the 
     Richard B. Russell National School Lunch Act, and an 
     elementary or secondary school.
       ``(3) Indians; indian tribe; tribal organization; urban 
     indian organization.--The terms `Indian', `Indian tribe', 
     `tribal organization', and `urban Indian organization' have 
     the meanings given such terms in section 4 of the Indian 
     Health Care Improvement Act (25 U.S.C. 1603).
       ``(4) Community health worker.--The term `community health 
     worker' means an individual who promotes health or nutrition 
     within the community in which the individual resides--
       ``(A) by serving as a liaison between communities and 
     health care agencies;
       ``(B) by providing guidance and social assistance to 
     community residents;
       ``(C) by enhancing community residents' ability to 
     effectively communicate with health care providers;
       ``(D) by providing culturally and linguistically 
     appropriate health or nutrition education;
       ``(E) by advocating for individual and community health or 
     nutrition needs; and
       ``(F) by providing referral and followup services.
       ``(g) Appropriation.--There is appropriated, out of any 
     money in the Treasury not otherwise appropriated, 
     $100,000,000 for the period of fiscal years 2009 through 
     2013, for the purpose of awarding grants under this section. 
     Amounts appropriated and paid under the authority of this 
     section shall be in addition to amounts appropriated under 
     section 2104 and paid to States in accordance with section 
     2105, including with respect to expenditures for outreach 
     activities in accordance with subsections (a)(1)(D)(iii) and 
     (c)(2)(C) of that section.
       ``(h) National Enrollment Campaign.--From the amounts made 
     available under subsection (a)(2), the Secretary shall 
     develop and implement a national enrollment campaign to 
     improve the enrollment of underserved child populations in 
     the programs established under this title and title XIX. Such 
     campaign may include--
       ``(1) the establishment of partnerships with the Secretary 
     of Education and the Secretary of Agriculture to develop 
     national campaigns to link the eligibility and enrollment 
     systems for the assistance programs each Secretary 
     administers that often serve the same children;
       ``(2) the integration of information about the programs 
     established under this title and title XIX in public health 
     awareness campaigns administered by the Secretary;
       ``(3) increased financial and technical support for 
     enrollment hotlines maintained by the Secretary to ensure 
     that all States participate in such hotlines;
       ``(4) the establishment of joint public awareness outreach 
     initiatives with the Secretary of Education and the Secretary 
     of Labor regarding the importance of health insurance to 
     building strong communities and the economy;
       ``(5) the development of special outreach materials for 
     Native Americans or for individuals with limited English 
     proficiency; and
       ``(6) such other outreach initiatives as the Secretary 
     determines would increase public awareness of the programs 
     under this title and title XIX.''.
       (b) Enhanced Administrative Funding for Translation or 
     Interpretation Services Under CHIP and Medicaid.--
       (1) CHIP.--Section 2105(a)(1) (42 U.S.C. 1397ee(a)(1)), as 
     amended by section 113, is amended--
       (A) in the matter preceding subparagraph (A), by inserting 
     ``(or, in the case of expenditures described in subparagraph 
     (D)(iv), the higher of 75 percent or the sum of the enhanced 
     FMAP plus 5 percentage points)'' after ``enhanced FMAP''; and
       (B) in subparagraph (D)--
       (i) in clause (iii), by striking ``and'' at the end;
       (ii) by redesignating clause (iv) as clause (v); and
       (iii) by inserting after clause (iii) the following new 
     clause:
       ``(iv) for translation or interpretation services in 
     connection with the enrollment of, retention of, and use of 
     services under this title by, individuals for whom English is 
     not their primary language (as found necessary by the 
     Secretary for the proper and efficient administration of the 
     State plan); and''.
       (2) Medicaid.--
       (A) Use of medicaid funds.--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 of, 
     retention of, and use of services under this title by, 
     children of families for whom English is not the primary 
     language; plus''.
       (B) Use of community health workers for outreach 
     activities.--
       (i) In general.--Section 2102(c)(1) of such Act (42 U.S.C. 
     1397bb(c)(1)) is amended by inserting ``(through community 
     health workers and others)'' after ``Outreach''.
       (ii) In federal evaluation.--Section 2108(c)(3)(B) of such 
     Act (42 U.S.C. 1397hh(c)(3)(B)) is amended by inserting 
     ``(such as through community health workers and others)'' 
     after ``including practices''.

     SEC. 202. INCREASED OUTREACH AND ENROLLMENT OF INDIANS.

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

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

       ``(a) Agreements With States for Medicaid and CHIP Outreach 
     On or Near Reservations To Increase the Enrollment of Indians 
     in Those Programs.--
       ``(1) In general.--In order to improve the access of 
     Indians residing on or near a reservation to obtain benefits 
     under the Medicaid and State children's health insurance 
     programs established under titles XIX and XXI, the Secretary 
     shall encourage the State to take steps to provide for 
     enrollment on or near the reservation. Such steps may include 
     outreach efforts such as the outstationing of eligibility 
     workers, entering into agreements with the Indian Health 
     Service, Indian Tribes, Tribal Organizations, and Urban 
     Indian Organizations to provide outreach, education regarding 
     eligibility and benefits, enrollment, and translation 
     services when such services are appropriate.
       ``(2) Construction.--Nothing in paragraph (1) shall be 
     construed as affecting arrangements entered into between 
     States and the Indian Health Service, Indian Tribes, Tribal 
     Organizations, or Urban Indian Organizations for such 
     Service, Tribes, or Organizations to conduct administrative 
     activities under such titles.
       ``(b) Requirement To Facilitate Cooperation.--The 
     Secretary, acting through the Centers for Medicare & Medicaid 
     Services, shall take such steps as are necessary to 
     facilitate cooperation with, and agreements between, States 
     and the Indian Health Service, Indian Tribes, Tribal 
     Organizations, or Urban Indian Organizations with respect to 
     the provision of health care items and services to Indians 
     under the programs established under title XIX or XXI.
       ``(c) Definition of Indian; Indian Tribe; Indian Health 
     Program; Tribal Organization; Urban Indian Organization.--In 
     this section, the terms `Indian', `Indian Tribe', `Indian 
     Health Program', `Tribal Organization', and `Urban Indian 
     Organization' have the meanings given those terms in section 
     4 of the Indian Health Care Improvement Act.''.
       (b) Nonapplication of 10 Percent Limit on Outreach and 
     Certain Other Expenditures.--Section 2105(c)(2) (42 U.S.C. 
     1397ee(c)(2)) is amended by adding at the end the following:
       ``(C) Nonapplication to certain expenditures.--The 
     limitation under subparagraph (A) shall not apply with 
     respect to the following expenditures:
       ``(i) Expenditures to increase outreach to, and the 
     enrollment of, indian children under this title and title 
     xix.--Expenditures for outreach activities to families of 
     Indian children likely to be eligible for child health 
     assistance under the plan or medical assistance under the 
     State plan under title XIX (or under a waiver of such plan), 
     to inform such families of the availability of, and to assist 
     them in enrolling their children in, such plans, including 
     such activities conducted under grants, contracts, or 
     agreements entered into under section 1139(a).''.

     SEC. 203. STATE OPTION TO RELY ON FINDINGS FROM AN EXPRESS 
                   LANE AGENCY TO CONDUCT SIMPLIFIED ELIGIBILITY 
                   DETERMINATIONS.

       (a) Application Under Medicaid and CHIP Programs.--

[[Page 1602]]

       (1) Medicaid.--Section 1902(e) (42 U.S.C. 1396a(e)) is 
     amended by adding at the end the following:
       ``(13) Express Lane Option.--
       ``(A) In general.--
       ``(i) Option to use a finding from an express lane 
     agency.--At the option of the State, the State plan may 
     provide that in determining eligibility under this title for 
     a child (as defined in subparagraph (G)), the State may rely 
     on a finding made within a reasonable period (as determined 
     by the State) from an Express Lane agency (as defined in 
     subparagraph (F)) when it determines whether a child 
     satisfies one or more components of eligibility for medical 
     assistance under this title. The State may rely on a finding 
     from an Express Lane agency notwithstanding sections 
     1902(a)(46)(B) and 1137(d) or any differences in budget unit, 
     disregard, deeming or other methodology, if the following 
     requirements are met:
       ``(I) Prohibition on determining children ineligible for 
     coverage.--If a finding from an Express Lane agency would 
     result in a determination that a child does not satisfy an 
     eligibility requirement for medical assistance under this 
     title and for child health assistance under title XXI, the 
     State shall determine eligibility for assistance using its 
     regular procedures.
       ``(II) Notice requirement.--For any child who is found 
     eligible for medical assistance under the State plan under 
     this title or child health assistance under title XXI and who 
     is subject to premiums based on an Express Lane agency's 
     finding of such child's income level, the State shall provide 
     notice that the child may qualify for lower premium payments 
     if evaluated by the State using its regular policies and of 
     the procedures for requesting such an evaluation.
       ``(III) Compliance with screen and enroll requirement.--The 
     State shall satisfy the requirements under subparagraphs (A) 
     and (B) of section 2102(b)(3) (relating to screen and enroll) 
     before enrolling a child in child health assistance under 
     title XXI. At its option, the State may fulfill such 
     requirements in accordance with either option provided under 
     subparagraph (C) of this paragraph.
       ``(IV) Verification of citizenship or nationality status.--
     The State shall satisfy the requirements of section 
     1902(a)(46)(B) or 2105(c)(9), as applicable for verifications 
     of citizenship or nationality status.
       ``(V) Coding.--The State meets the requirements of 
     subparagraph (E).
       ``(ii) Option to apply to renewals and redeterminations.--
     The State may apply the provisions of this paragraph when 
     conducting initial determinations of eligibility, 
     redeterminations of eligibility, or both, as described in the 
     State plan.
       ``(B) Rules of construction.--Nothing in this paragraph 
     shall be construed--
       ``(i) to limit or prohibit a State from taking any actions 
     otherwise permitted under this title or title XXI in 
     determining eligibility for or enrolling children into 
     medical assistance under this title or child health 
     assistance under title XXI; or
       ``(ii) to modify the limitations in section 1902(a)(5) 
     concerning the agencies that may make a determination of 
     eligibility for medical assistance under this title.
       ``(C) Options for satisfying the screen and enroll 
     requirement.--
       ``(i) In general.--With respect to a child whose 
     eligibility for medical assistance under this title or for 
     child health assistance under title XXI has been evaluated by 
     a State agency using an income finding from an Express Lane 
     agency, a State may carry out its duties under subparagraphs 
     (A) and (B) of section 2102(b)(3) (relating to screen and 
     enroll) in accordance with either clause (ii) or clause 
     (iii).
       ``(ii) Establishing a screening threshold.--
       ``(I) In general.--Under this clause, the State establishes 
     a screening threshold set as a percentage of the Federal 
     poverty level that exceeds the highest income threshold 
     applicable under this title to the child by a minimum of 30 
     percentage points or, at State option, a higher number of 
     percentage points that reflects the value (as determined by 
     the State and described in the State plan) of any differences 
     between income methodologies used by the program administered 
     by the Express Lane agency and the methodologies used by the 
     State in determining eligibility for medical assistance under 
     this title.
       ``(II) Children with income not above threshold.--If the 
     income of a child does not exceed the screening threshold, 
     the child is deemed to satisfy the income eligibility 
     criteria for medical assistance under this title regardless 
     of whether such child would otherwise satisfy such criteria.
       ``(III) Children with income above threshold.--If the 
     income of a child exceeds the screening threshold, the child 
     shall be considered to have an income above the Medicaid 
     applicable income level described in section 2110(b)(4) and 
     to satisfy the requirement under section 2110(b)(1)(C) 
     (relating to the requirement that CHIP matching funds be used 
     only for children not eligible for Medicaid). If such a child 
     is enrolled in child health assistance under title XXI, the 
     State shall provide the parent, guardian, or custodial 
     relative with the following:

       ``(aa) Notice that the child may be eligible to receive 
     medical assistance under the State plan under this title if 
     evaluated for such assistance under the State's regular 
     procedures and notice of the process through which a parent, 
     guardian, or custodial relative can request that the State 
     evaluate the child's eligibility for medical assistance under 
     this title using such regular procedures.
       ``(bb) A description of differences between the medical 
     assistance provided under this title and child health 
     assistance under title XXI, including differences in cost-
     sharing requirements and covered benefits.

       ``(iii) Temporary enrollment in chip pending screen and 
     enroll.--
       ``(I) In general.--Under this clause, a State enrolls a 
     child in child health assistance under title XXI for a 
     temporary period if the child appears eligible for such 
     assistance based on an income finding by an Express Lane 
     agency.
       ``(II) Determination of eligibility.--During such temporary 
     enrollment period, the State shall determine the child's 
     eligibility for child health assistance under title XXI or 
     for medical assistance under this title in accordance with 
     this clause.
       ``(III) Prompt follow up.--In making such a determination, 
     the State shall take prompt action to determine whether the 
     child should be enrolled in medical assistance under this 
     title or child health assistance under title XXI pursuant to 
     subparagraphs (A) and (B) of section 2102(b)(3) (relating to 
     screen and enroll).
       ``(IV) Requirement for simplified determination.--In making 
     such a determination, the State shall use procedures that, to 
     the maximum feasible extent, reduce the burden imposed on the 
     individual of such determination. Such procedures may not 
     require the child's parent, guardian, or custodial relative 
     to provide or verify information that already has been 
     provided to the State agency by an Express Lane agency or 
     another source of information unless the State agency has 
     reason to believe the information is erroneous.
       ``(V) Availability of chip matching funds during temporary 
     enrollment period.--Medical assistance for items and services 
     that are provided to a child enrolled in title XXI during a 
     temporary enrollment period under this clause shall be 
     treated as child health assistance under such title.
       ``(D) Option for automatic enrollment.--
       ``(i) In general.--The State may initiate and determine 
     eligibility for medical assistance under the State Medicaid 
     plan or for child health assistance under the State CHIP plan 
     without a program application from, or on behalf of, the 
     child based on data obtained from sources other than the 
     child (or the child's family), but a child can only be 
     automatically enrolled in the State Medicaid plan or the 
     State CHIP plan if the child or the family affirmatively 
     consents to being enrolled through affirmation and signature 
     on an Express Lane agency application, if the requirement of 
     clause (ii) is met.
       ``(ii) Information requirement.--The requirement of this 
     clause is that the State informs the parent, guardian, or 
     custodial relative of the child of the services that will be 
     covered, appropriate methods for using such services, premium 
     or other cost sharing charges (if any) that apply, medical 
     support obligations (under section 1912(a)) created by 
     enrollment (if applicable), and the actions the parent, 
     guardian, or relative must take to maintain enrollment and 
     renew coverage.
       ``(E) Coding; application to enrollment error rates.--
       ``(i) In general.--For purposes of subparagraph (A)(iv), 
     the requirement of this subparagraph for a State is that the 
     State agrees to--
       ``(I) assign such codes as the Secretary shall require to 
     the children who are enrolled in the State Medicaid plan or 
     the State CHIP plan through reliance on a finding made by an 
     Express Lane agency for the duration of the State's election 
     under this paragraph;
       ``(II) annually provide the Secretary with a statistically 
     valid sample (that is approved by Secretary) of the children 
     enrolled in such plans through reliance on such a finding by 
     conducting a full Medicaid eligibility review of the children 
     identified for such sample for purposes of determining an 
     eligibility error rate (as described in clause (iv)) with 
     respect to the enrollment of such children (and shall not 
     include such children in any data or samples used for 
     purposes of complying with a Medicaid Eligibility Quality 
     Control (MEQC) review or a payment error rate measurement 
     (PERM) requirement);
       ``(III) submit the error rate determined under subclause 
     (II) to the Secretary;
       ``(IV) if such error rate exceeds 3 percent for either of 
     the first 2 fiscal years in which the State elects to apply 
     this paragraph, demonstrate to the satisfaction of the 
     Secretary the specific corrective actions implemented by the 
     State to improve upon such error rate; and
       ``(V) if such error rate exceeds 3 percent for any fiscal 
     year in which the State elects to apply this paragraph, a 
     reduction in the amount otherwise payable to the State under 
     section 1903(a) for quarters for that fiscal year, equal to 
     the total amount of erroneous excess payments determined for 
     the fiscal year only with respect to the children included in 
     the sample for the fiscal year

[[Page 1603]]

     that are in excess of a 3 percent error rate with respect to 
     such children.
       ``(ii) No punitive action based on error rate.--The 
     Secretary shall not apply the error rate derived from the 
     sample under clause (i) to the entire population of children 
     enrolled in the State Medicaid plan or the State CHIP plan 
     through reliance on a finding made by an Express Lane agency, 
     or to the population of children enrolled in such plans on 
     the basis of the State's regular procedures for determining 
     eligibility, or penalize the State on the basis of such error 
     rate in any manner other than the reduction of payments 
     provided for under clause (i)(V).
       ``(iii) Rule of construction.--Nothing in this paragraph 
     shall be construed as relieving a State that elects to apply 
     this paragraph from being subject to a penalty under section 
     1903(u), for payments made under the State Medicaid plan with 
     respect to ineligible individuals and families that are 
     determined to exceed the error rate permitted under that 
     section (as determined without regard to the error rate 
     determined under clause (i)(II)).
       ``(iv) Error rate defined.--In this subparagraph, the term 
     `error rate' means the rate of erroneous excess payments for 
     medical assistance (as defined in section 1903(u)(1)(D)) for 
     the period involved, except that such payments shall be 
     limited to individuals for which eligibility determinations 
     are made under this paragraph and except that in applying 
     this paragraph under title XXI, there shall be substituted 
     for references to provisions of this title corresponding 
     provisions within title XXI.
       ``(F) Express lane agency.--
       ``(i) In general.--In this paragraph, the term `Express 
     Lane agency' means a public agency that--
       ``(I) is determined by the State Medicaid agency or the 
     State CHIP agency (as applicable) to be capable of making the 
     determinations of one or more eligibility requirements 
     described in subparagraph (A)(i);
       ``(II) is identified in the State Medicaid plan or the 
     State CHIP plan; and
       ``(III) notifies the child's family--

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

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

       ``(aa) The temporary assistance for needy families program 
     funded under part A of title IV.
       ``(bb) A State program funded under part D of title IV.
       ``(cc) The State Medicaid plan.
       ``(dd) The State CHIP plan.

       ``(ee) The Food and Nutrition Act of 2008 (7 U.S.C. 2011 et 
     seq.).
       ``(ff) The Head Start Act (42 U.S.C. 9801 et seq.).
       ``(gg) The Richard B. Russell National School Lunch Act (42 
     U.S.C. 1751 et seq.).
       ``(hh) The Child Nutrition Act of 1966 (42 U.S.C. 1771 et 
     seq.).
       ``(ii) The Child Care and Development Block Grant Act of 
     1990 (42 U.S.C. 9858 et seq.).
       ``(jj) The Stewart B. McKinney Homeless Assistance Act (42 
     U.S.C. 11301 et seq.).
       ``(kk) The United States Housing Act of 1937 (42 U.S.C. 
     1437 et seq.).
       ``(ll) The Native American Housing Assistance and Self-
     Determination Act of 1996 (25 U.S.C. 4101 et seq.).

       ``(II) A State-specified governmental agency that has 
     fiscal liability or legal responsibility for the accuracy of 
     the eligibility determination findings relied on by the 
     State.
       ``(III) A public agency that is subject to an interagency 
     agreement limiting the disclosure and use of the information 
     disclosed for purposes of determining eligibility under the 
     State Medicaid plan or the State CHIP plan.
       ``(iii) Exclusions.--Such term does not include an agency 
     that determines eligibility for a program established under 
     the Social Services Block Grant established under title XX or 
     a private, for-profit organization.
       ``(iv) Rules of construction.--Nothing in this paragraph 
     shall be construed as--
       ``(I) exempting a State Medicaid agency from complying with 
     the requirements of section 1902(a)(4) relating to merit-
     based personnel standards for employees of the State Medicaid 
     agency and safeguards against conflicts of interest); or
       ``(II) authorizing a State Medicaid agency that elects to 
     use Express Lane agencies under this subparagraph to use the 
     Express Lane option to avoid complying with such requirements 
     for purposes of making eligibility determinations under the 
     State Medicaid plan.
       ``(v) Additional definitions.--In this paragraph:
       ``(I) State.--The term `State' means 1 of the 50 States or 
     the District of Columbia.
       ``(II) State chip agency.--The term `State CHIP agency' 
     means the State agency responsible for administering the 
     State CHIP plan.
       ``(III) State chip plan.--The term `State CHIP plan' means 
     the State child health plan established under title XXI and 
     includes any waiver of such plan.
       ``(IV) State medicaid agency.--The term `State Medicaid 
     agency' means the State agency responsible for administering 
     the State Medicaid plan.
       ``(V) State medicaid plan.--The term `State Medicaid plan' 
     means the State plan established under title XIX and includes 
     any waiver of such plan.
       ``(G) Child defined.--For purposes of this paragraph, the 
     term `child' means an individual under 19 years of age, or, 
     at the option of a State, such higher age, not to exceed 21 
     years of age, as the State may elect.
       ``(H) Application.--This paragraph shall not apply with 
     respect to eligibility determinations made after September 
     30, 2013.''.
       (2) CHIP.--Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is 
     amended by redesignating subparagraphs (B), (C), and (D) as 
     subparagraphs (C), (D), and (E), respectively, and by 
     inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) Section 1902(e)(13) (relating to the State option to 
     rely on findings from an Express Lane agency to help evaluate 
     a child's eligibility for medical assistance).''.
       (b) Evaluation and Report.--
       (1) Evaluation.--The Secretary shall conduct, by grant, 
     contract, or interagency agreement, a comprehensive, 
     independent evaluation of the option provided under the 
     amendments made by subsection (a). Such evaluation shall 
     include an analysis of the effectiveness of the option, and 
     shall include--
       (A) obtaining a statistically valid sample of the children 
     who were enrolled in the State Medicaid plan or the State 
     CHIP plan through reliance on a finding made by an Express 
     Lane agency and determining the percentage of children who 
     were erroneously enrolled in such plans;
       (B) determining whether enrolling children in such plans 
     through reliance on a finding made by an Express Lane agency 
     improves the ability of a State to identify and enroll low-
     income, uninsured children who are eligible but not enrolled 
     in such plans;
       (C) evaluating the administrative costs or savings related 
     to identifying and enrolling children in such plans through 
     reliance on such findings, and the extent to which such costs 
     differ from the costs that the State otherwise would have 
     incurred to identify and enroll low-income, uninsured 
     children who are eligible but not enrolled in such plans; and
       (D) any recommendations for legislative or administrative 
     changes that would improve the effectiveness of enrolling 
     children in such plans through reliance on such findings.
       (2) Report to congress.--Not later than September 30, 2012, 
     the Secretary shall submit a report to Congress on the 
     results of the evaluation under paragraph (1).
       (3) Funding.--
       (A) In general.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated to the 
     Secretary to carry out the evaluation under this subsection 
     $5,000,000 for the period of fiscal years 2009 through 2012.
       (B) Budget authority.--Subparagraph (A) constitutes budget 
     authority in advance of appropriations Act and represents the 
     obligation of the Federal Government to provide for the 
     payment of such amount to conduct the evaluation under this 
     subsection.
       (c) Electronic Transmission of Information.--Section 1902 
     (42 U.S.C. 1396a) is amended by adding at the end the 
     following new subsection:
       ``(dd) Electronic Transmission of Information.--If the 
     State agency determining eligibility for medical assistance 
     under this title or child health assistance under title XXI 
     verifies an element of eligibility based on information from 
     an Express Lane Agency (as defined in subsection (e)(13)(F)), 
     or from another public agency, then the applicant's signature 
     under penalty of perjury shall not be required as to such 
     element. 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). The 
     requirements of subparagraphs (A) and (B) of section 
     1137(d)(2) may be met through evidence in digital or 
     electronic form.''.
       (d) Authorization of Information Disclosure.--
       (1) In general.--Title XIX is amended by adding at the end 
     the following new section:

     ``SEC. 1942. AUTHORIZATION TO RECEIVE RELEVANT INFORMATION.

       ``(a) In General.--Notwithstanding any other provision of 
     law, a Federal or State agency or private entity in 
     possession of the sources of data directly relevant to 
     eligibility determinations under this title (including 
     eligibility files 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

[[Page 1604]]

     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, to the extent such conveyance meets 
     the requirements of subsection (b).
       ``(b) Requirements for Conveyance.--Data or information may 
     be conveyed pursuant to subsection (a) 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 or attempting to enroll 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) Penalties for Improper Disclosure.--
       ``(1) Civil money penalty.--A private entity described in 
     the subsection (a) that publishes, discloses, or makes known 
     in any manner, or to any extent not authorized by Federal 
     law, any information obtained under this section is subject 
     to a civil money penalty in an amount equal to $10,000 for 
     each such unauthorized publication or disclosure. The 
     provisions of section 1128A (other than subsections (a) and 
     (b) and the second sentence of subsection (f)) shall apply to 
     a civil money penalty under this paragraph in the same manner 
     as such provisions apply to a penalty or proceeding under 
     section 1128A(a).
       ``(2) Criminal penalty.--A private entity described in the 
     subsection (a) that willfully publishes, 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 $10,000 or imprisoned not more 
     than 1 year, or both, for each such unauthorized publication 
     or disclosure.
       ``(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 subsection (a)(2), is 
     amended by adding at the end the following new subparagraph:
       ``(F) Section 1942 (relating to authorization to receive 
     data directly relevant to eligibility determinations).''.
       (3) 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 
     apply or whose eligibility for medical assistance is being 
     evaluated in accordance with section 1902(e)(13)(D))'' 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''.
       (e) Authorization for States Electing Express Lane Option 
     To Receive Certain Data Directly Relevant To Determining 
     Eligibility and Correct Amount of Assistance.--The Secretary 
     shall enter into such agreements as are necessary to permit a 
     State that elects the Express Lane option under section 
     1902(e)(13) of the Social Security Act to receive data 
     directly relevant to eligibility determinations and 
     determining the correct amount of benefits under a State 
     child health plan under CHIP or a State plan under Medicaid 
     from the following:
       (1) The National Directory of New Hires established under 
     section 453(i) of the Social Security Act (42 U.S.C. 653(i)).
       (2) Data regarding enrollment in insurance that may help to 
     facilitate outreach and enrollment under the State Medicaid 
     plan, the State CHIP plan, and such other programs as the 
     Secretary may specify.
       (f) Effective Date.--The amendments made by this section 
     are effective on the date of the enactment of this Act.

              Subtitle B--Reducing Barriers to Enrollment

     SEC. 211. VERIFICATION OF DECLARATION OF CITIZENSHIP OR 
                   NATIONALITY FOR PURPOSES OF ELIGIBILITY FOR 
                   MEDICAID AND CHIP.

       (a) Alternative State Process for Verification of 
     Declaration of Citizenship or Nationality for Purposes of 
     Eligibility for Medicaid.--
       (1) Alternative to documentation requirement.--
       (A) In general.--Section 1902 (42 U.S.C. 1396a), as amended 
     by section 203(c), is amended--
       (i) in subsection (a)(46)--

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

       ``(B) provide, with respect to an individual declaring to 
     be a citizen or national of the United States for purposes of 
     establishing eligibility under this title, that the State 
     shall satisfy the requirements of--
       ``(i) section 1903(x); or
       ``(ii) subsection (ee);''; and
       (ii) by adding at the end the following new subsection:
       ``(ee)(1) For purposes of subsection (a)(46)(B)(ii), the 
     requirements of this subsection with respect to an individual 
     declaring to be a citizen or national of the United States 
     for purposes of establishing eligibility under this title, 
     are, in lieu of requiring the individual to present 
     satisfactory documentary evidence of citizenship or 
     nationality under section 1903(x) (if the individual is not 
     described in paragraph (2) of that section), as follows:
       ``(A) The State submits the name and social security number 
     of the individual to the Commissioner of Social Security as 
     part of the program established under paragraph (2).
       ``(B) If the State receives notice from the Commissioner of 
     Social Security that the name or social security number, or 
     the declaration of citizenship or nationality, of the 
     individual is inconsistent with information in the records 
     maintained by the Commissioner--
       ``(i) the State makes a reasonable effort to identify and 
     address the causes of such inconsistency, including through 
     typographical or other clerical errors, by contacting the 
     individual to confirm the accuracy of the name or social 
     security number submitted or declaration of citizenship or 
     nationality and by taking such additional actions as the 
     Secretary, through regulation or other guidance, or the State 
     may identify, and continues to provide the individual with 
     medical assistance while making such effort; and
       ``(ii) in the case such inconsistency is not resolved under 
     clause (i), the State--
       ``(I) notifies the individual of such fact;
       ``(II) provides the individual with a period of 90 days 
     from the date on which the notice required under subclause 
     (I) is received by the individual to either present 
     satisfactory documentary evidence of citizenship or 
     nationality (as defined in section 1903(x)(3)) or resolve the 
     inconsistency with the Commissioner of Social Security (and 
     continues to provide the individual with medical assistance 
     during such 90-day period); and
       ``(III) disenrolls the individual from the State plan under 
     this title within 30 days after the end of such 90-day period 
     if no such documentary evidence is presented or if such 
     inconsistency is not resolved.
       ``(2)(A) Each State electing to satisfy the requirements of 
     this subsection for purposes of section 1902(a)(46)(B) shall 
     establish a program under which the State submits at least 
     monthly to the Commissioner of Social Security for comparison 
     of the name and social security number, of each individual 
     newly enrolled in the State plan under this title that month 
     who is not described in section 1903(x)(2) and who declares 
     to be a United States citizen or national, with information 
     in records maintained by the Commissioner.
       ``(B) In establishing the State program under this 
     paragraph, the State may enter into an agreement with the 
     Commissioner of Social Security--
       ``(i) to provide, through an on-line system or otherwise, 
     for the electronic submission of, and response to, the 
     information submitted under subparagraph (A) for an 
     individual enrolled in the State plan under this title who 
     declares to be citizen or national on at least a monthly 
     basis; or
       ``(ii) to provide for a determination of the consistency of 
     the information submitted with the information maintained in 
     the records of the Commissioner through such other method as 
     agreed to by the State and the Commissioner and approved by 
     the Secretary, provided that such method is no more 
     burdensome for individuals to comply with than any burdens 
     that may apply under a method described in clause (i).
       ``(C) The program established under this paragraph shall 
     provide that, in the case of any individual who is required 
     to submit a social security number to the State under 
     subparagraph (A) and who is unable to provide the State with 
     such number, shall be provided with at least the reasonable 
     opportunity to present satisfactory documentary evidence of 
     citizenship or nationality (as defined in section 1903(x)(3)) 
     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.
       ``(3)(A) The State agency implementing the plan approved 
     under this title shall, at such times and in such form as the 
     Secretary may specify, provide information on the percentage 
     each month that the inconsistent submissions bears to the 
     total submissions made for comparison for such month. For 
     purposes of this subparagraph, a name, social security

[[Page 1605]]

     number, or declaration of citizenship or nationality of an 
     individual shall be treated as inconsistent and included in 
     the determination of such percentage only if--
       ``(i) the information submitted by the individual is not 
     consistent with information in records maintained by the 
     Commissioner of Social Security;
       ``(ii) the inconsistency is not resolved by the State;
       ``(iii) the individual was provided with a reasonable 
     period of time to resolve the inconsistency with the 
     Commissioner of Social Security or provide satisfactory 
     documentation of citizenship status and did not successfully 
     resolve such inconsistency; and
       ``(iv) payment has been made for an item or service 
     furnished to the individual under this title.
       ``(B) If, for any fiscal year, the average monthly 
     percentage determined under subparagraph (A) is greater than 
     3 percent--
       ``(i) the State shall develop and adopt a corrective plan 
     to review its procedures for verifying the identities of 
     individuals seeking to enroll in the State plan under this 
     title and to identify and implement changes in such 
     procedures to improve their accuracy; and
       ``(ii) pay to the Secretary an amount equal to the amount 
     which bears the same ratio to the total payments under the 
     State plan for the fiscal year for providing medical 
     assistance to individuals who provided inconsistent 
     information as the number of individuals with inconsistent 
     information in excess of 3 percent of such total submitted 
     bears to the total number of individuals with inconsistent 
     information.
       ``(C) The Secretary may waive, in certain limited cases, 
     all or part of the payment under subparagraph (B)(ii) if the 
     State is unable to reach the allowable error rate despite a 
     good faith effort by such State.
       ``(D) Subparagraphs (A) and (B) shall not apply to a State 
     for a fiscal year if there is an agreement described in 
     paragraph (2)(B) in effect as of the close of the fiscal year 
     that provides for the submission on a real-time basis of the 
     information described in such paragraph.
       ``(4) Nothing in this subsection shall affect the rights of 
     any individual under this title to appeal any disenrollment 
     from a State plan.''.
       (B) Costs of implementing and maintaining system.--Section 
     1903(a)(3) (42 U.S.C. 1396b(a)(3)) is amended--
       (i) by striking ``plus'' at the end of subparagraph (E) and 
     inserting ``and'', and
       (ii) by adding at the end the following new subparagraph:
       ``(F)(i) 90 percent of the sums expended during the quarter 
     as are attributable to the design, development, or 
     installation of such mechanized verification and information 
     retrieval systems as the Secretary determines are necessary 
     to implement section 1902(ee) (including a system described 
     in paragraph (2)(B) thereof), and
       ``(ii) 75 percent of the sums expended during the quarter 
     as are attributable to the operation of systems to which 
     clause (i) applies, plus''.
       (2) Limitation on waiver authority.--Notwithstanding any 
     provision of section 1115 of the Social Security Act (42 
     U.S.C. 1315), or any other provision of law, the Secretary 
     may not waive the requirements of section 1902(a)(46)(B) of 
     such Act (42 U.S.C. 1396a(a)(46)(B)) with respect to a State.
       (3) Conforming amendments.--Section 1903 (42 U.S.C. 1396b) 
     is amended--
       (A) in subsection (i)(22), by striking ``subsection (x)'' 
     and inserting ``section 1902(a)(46)(B)''; and
       (B) in subsection (x)(1), by striking ``subsection 
     (i)(22)'' and inserting ``section 1902(a)(46)(B)(i)''.
       (4) Appropriation.--Out of any money in the Treasury of the 
     United States not otherwise appropriated, there are 
     appropriated to the Commissioner of Social Security 
     $5,000,000 to remain available until expended to carry out 
     the Commissioner's responsibilities under section 1902(ee) of 
     the Social Security Act, as added by subsection (a).
       (b) Clarification of Requirements Relating to Presentation 
     of Satisfactory Documentary Evidence of Citizenship or 
     Nationality.--
       (1) Acceptance of documentary evidence issued by a 
     federally recognized indian tribe.--Section 1903(x)(3)(B) (42 
     U.S.C. 1396b(x)(3)(B)) is amended--
       (A) by redesignating clause (v) as clause (vi); and
       (B) by inserting after clause (iv), the following new 
     clause:
       ``(v)(I) Except as provided in subclause (II), a document 
     issued by a federally recognized Indian tribe evidencing 
     membership or enrollment in, or affiliation with, such tribe 
     (such as a tribal enrollment card or certificate of degree of 
     Indian blood).
       ``(II) With respect to those federally recognized Indian 
     tribes located within States having an international border 
     whose membership includes individuals who are not citizens of 
     the United States, the Secretary shall, after consulting with 
     such tribes, issue regulations authorizing the presentation 
     of such other forms of documentation (including tribal 
     documentation, if appropriate) that the Secretary determines 
     to be satisfactory documentary evidence of citizenship or 
     nationality for purposes of satisfying the requirement of 
     this subsection.''.
       (2) Requirement to provide reasonable opportunity to 
     present satisfactory documentary evidence.--Section 1903(x) 
     (42 U.S.C. 1396b(x)) is amended by adding at the end the 
     following new paragraph:
       ``(4) In the case of an individual declaring to be a 
     citizen or national of the United States with respect to whom 
     a State requires the presentation of satisfactory documentary 
     evidence of citizenship or nationality under section 
     1902(a)(46)(B)(i), the individual shall be provided at least 
     the reasonable opportunity to present satisfactory 
     documentary evidence of citizenship or nationality under this 
     subsection as is provided under clauses (i) and (ii) of 
     section 1137(d)(4)(A) to an individual for the submittal to 
     the State of evidence indicating a satisfactory immigration 
     status.''.
       (3) Children born in the united states to mothers eligible 
     for medicaid.--
       (A) Clarification of rules.--Section 1903(x) (42 U.S.C. 
     1396b(x)), as amended by paragraph (2), is amended--
       (i) in paragraph (2)--

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

       ``(D) pursuant to the application of section 1902(e)(4) 
     (and, in the case of an individual who is eligible for 
     medical assistance on such basis, the individual shall be 
     deemed to have provided satisfactory documentary evidence of 
     citizenship or nationality and shall not be required to 
     provide further documentary evidence on any date that occurs 
     during or after the period in which the individual is 
     eligible for medical assistance on such basis); or''; and
       (ii) by adding at the end the following new paragraph:
       ``(5) Nothing in subparagraph (A) or (B) of section 
     1902(a)(46), the preceding paragraphs of this subsection, or 
     the Deficit Reduction Act of 2005, including section 6036 of 
     such Act, shall be construed as changing the requirement of 
     section 1902(e)(4) that a child born in the United States to 
     an alien mother for whom medical assistance for the delivery 
     of such child is available as treatment of an emergency 
     medical condition pursuant to subsection (v) shall be deemed 
     eligible for medical assistance during the first year of such 
     child's life.''.
       (B) State requirement to issue separate identification 
     number.--Section 1902(e)(4) (42 U.S.C. 1396a(e)(4)) is 
     amended by adding at the end the following new sentence: 
     ``Notwithstanding the preceding sentence, in the case of a 
     child who is born in the United States to an alien mother for 
     whom medical assistance for the delivery of the child is made 
     available pursuant to section 1903(v), the State immediately 
     shall issue a separate identification number for the child 
     upon notification by the facility at which such delivery 
     occurred of the child's birth.''.
       (4) Technical amendments.--Section 1903(x)(2) (42 U.S.C. 
     1396b(x)) is amended--
       (A) in subparagraph (B)--
       (i) by realigning the left margin of the matter preceding 
     clause (i) 2 ems to the left; and
       (ii) by realigning the left margins of clauses (i) and 
     (ii), respectively, 2 ems to the left; and
       (B) in subparagraph (C)--
       (i) by realigning the left margin of the matter preceding 
     clause (i) 2 ems to the left; and
       (ii) by realigning the left margins of clauses (i) and 
     (ii), respectively, 2 ems to the left.
       (c) Application of Documentation System to CHIP.--
       (1) In general.--Section 2105(c) (42 U.S.C. 1397ee(c)), as 
     amended by section 114(a), is amended by adding at the end 
     the following new paragraph:
       ``(9) Citizenship documentation requirements.--
       ``(A) In general.--No payment may be made under this 
     section with respect to an individual who has, or is, 
     declared to be a citizen or national of the United States for 
     purposes of establishing eligibility under this title unless 
     the State meets the requirements of section 1902(a)(46)(B) 
     with respect to the individual.
       ``(B) Enhanced payments.--Notwithstanding subsection (b), 
     the enhanced FMAP with respect to payments under subsection 
     (a) for expenditures described in clause (i) or (ii) of 
     section 1903(a)(3)(F) necessary to comply with subparagraph 
     (A) shall in no event be less than 90 percent and 75 percent, 
     respectively.''.
       (2) Nonapplication of administrative expenditures cap.--
     Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)(C)), as amended 
     by section 202(b), is amended by adding at the end the 
     following:
       ``(ii) Expenditures to comply with citizenship or 
     nationality verification requirements.--Expenditures 
     necessary for the State to comply with paragraph (9)(A).''.
       (d) Effective Date.--
       (1) In general.--
       (A) In general.--Except as provided in subparagraph (B), 
     the amendments made by

[[Page 1606]]

     this section shall take effect on January 1, 2010.
       (B) Technical amendments.--The amendments made by--
       (i) paragraphs (1), (2), and (3) of subsection (b) shall 
     take effect as if included in the enactment of section 6036 
     of the Deficit Reduction Act of 2005 (Public Law 109-171; 120 
     Stat. 80); and
       (ii) paragraph (4) of subsection (b) shall take effect as 
     if included in the enactment of section 405 of division B of 
     the Tax Relief and Health Care Act of 2006 (Public Law 109-
     432; 120 Stat. 2996).
       (2) Restoration of eligibility.--In the case of an 
     individual who, during the period that began on July 1, 2006, 
     and ends on October 1, 2009, was determined to be ineligible 
     for medical assistance under a State Medicaid plan, including 
     any waiver of such plan, solely as a result of the 
     application of subsections (i)(22) and (x) of section 1903 of 
     the Social Security Act (as in effect during such period), 
     but who would have been determined eligible for such 
     assistance if such subsections, as amended by subsection (b), 
     had applied to the individual, a State may deem the 
     individual to be eligible for such assistance as of the date 
     that the individual was determined to be ineligible for such 
     medical assistance on such basis.
       (3) Special transition rule for indians.--During the period 
     that begins on July 1, 2006, and ends on the effective date 
     of final regulations issued under subclause (II) of section 
     1903(x)(3)(B)(v) of the Social Security Act (42 U.S.C. 
     1396b(x)(3)(B)(v)) (as added by subsection (b)(1)(B)), an 
     individual who is a member of a federally-recognized Indian 
     tribe described in subclause (II) of that section who 
     presents a document described in subclause (I) of such 
     section that is issued by such Indian tribe, shall be deemed 
     to have presented satisfactory evidence of citizenship or 
     nationality for purposes of satisfying the requirement of 
     subsection (x) of section 1903 of such Act.

     SEC. 212. REDUCING ADMINISTRATIVE BARRIERS TO ENROLLMENT.

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

     SEC. 213. MODEL OF INTERSTATE COORDINATED ENROLLMENT AND 
                   COVERAGE PROCESS.

       (a) In General.--In order to assure continuity of coverage 
     of low-income children under the Medicaid program and the 
     State Children's Health Insurance Program (CHIP), not later 
     than 18 months after the date of the enactment of this Act, 
     the Secretary of Health and Human Services, in consultation 
     with State Medicaid and CHIP directors and organizations 
     representing program beneficiaries, shall develop a model 
     process for the coordination of the enrollment, retention, 
     and coverage under such programs of children who, because of 
     migration of families, emergency evacuations, natural or 
     other disasters, public health emergencies, educational 
     needs, or otherwise, frequently change their State of 
     residency or otherwise are temporarily located outside of the 
     State of their residency.
       (b) Report to Congress.--After development of such model 
     process, the Secretary of Health and Human Services shall 
     submit to Congress a report describing additional steps or 
     authority needed to make further improvements to coordinate 
     the enrollment, retention, and coverage under CHIP and 
     Medicaid of children described in subsection (a).

     SEC. 214. PERMITTING STATES TO ENSURE COVERAGE WITHOUT A 5-
                   YEAR DELAY OF CERTAIN CHILDREN AND PREGNANT 
                   WOMEN UNDER THE MEDICAID PROGRAM 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, to children and pregnant women who are lawfully 
     residing in the United States (including battered individuals 
     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.
       ``(C) A State shall demonstrate that the State requires an 
     individual provided medical assistance as a result of an 
     election by the State under subparagraph (A), to provide the 
     State, as part of the State's ongoing eligibility 
     redetermination requirements and procedures, with 
     documentation or other evidence that the individual is 
     lawfully residing in the United States.''.
       (b) CHIP.--Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)), as 
     amended by sections 203(a)(2) and 203(d)(2), is amended by 
     redesignating subparagraphs (E) and (F) as subparagraphs (F) 
     and (G), respectively and by inserting after subparagraph (D) 
     the following new subparagraph:
       ``(E) Paragraph (4) of section 1903(v) (relating to 
     optional coverage of categories of lawfully residing 
     immigrant children or pregnant women), but only if the State 
     has elected to apply such paragraph with respect to such 
     category of children or pregnant women under title XIX.''.

      TITLE III--REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE

  Subtitle A--Additional State Option for Providing Premium Assistance

     SEC. 301. ADDITIONAL STATE OPTION FOR PROVIDING PREMIUM 
                   ASSISTANCE.

       (a) CHIP.--
       (1) In general.--Section 2105(c) (42 U.S.C. 1397ee(c)), as 
     amended by sections 114(a) and 211(c), is amended by adding 
     at the end the following:
       ``(10) State option to offer premium assistance.--
       ``(A) In general.--A State may elect to offer a premium 
     assistance subsidy (as defined in subparagraph (C)) for 
     qualified employer-sponsored coverage (as defined in 
     subparagraph (B)) to all targeted low-income children who are 
     eligible for child health assistance under the plan and have 
     access to such coverage in accordance with the requirements 
     of this paragraph. No subsidy shall be provided to a targeted 
     low-income child under this paragraph unless the child (or 
     the child's parent) voluntarily elects to receive such a 
     subsidy. A State may not require such an election as a 
     condition of receipt of child health assistance.
       ``(B) Qualified employer-sponsored coverage.--
       ``(i) In general.--Subject to clause (ii), in this 
     paragraph, the term `qualified employer-sponsored coverage' 
     means a group health plan or health insurance coverage 
     offered through an employer--

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

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

       ``(I) benefits provided under a health flexible spending 
     arrangement (as defined in section 106(c)(2) of the Internal 
     Revenue Code of 1986); or
       ``(II) a high deductible health plan (as defined in section 
     223(c)(2) of such Code), without regard to whether the plan 
     is purchased in conjunction with a health savings account (as 
     defined under section 223(d) of such Code).

       ``(C) Premium assistance subsidy.--
       ``(i) In general.--In this paragraph, the term `premium 
     assistance subsidy' means, with respect to a targeted low-
     income child, the amount equal to the difference between the 
     employee contribution required for enrollment only of the 
     employee under qualified employer-sponsored coverage and the 
     employee contribution required for enrollment of the employee 
     and the child in such coverage, less any applicable premium 
     cost-sharing applied under the State child health plan 
     (subject to the limitations imposed under section 2103(e), 
     including the requirement to count the total amount of the 
     employee contribution required for enrollment

[[Page 1607]]

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

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

       ``(ii) Record keeping requirements.--For purposes of 
     carrying out clause (i), a State may elect to directly pay 
     out-of-pocket expenditures for cost-sharing imposed under the 
     qualified employer-sponsored coverage and collect or not 
     collect all or any portion of such expenditures from the 
     parent of the child.
       ``(F) Application of waiting period imposed under the 
     state.--Any waiting period imposed under the State child 
     health plan prior to the provision of child health assistance 
     to a targeted low-income child under the State plan shall 
     apply to the same extent to the provision of a premium 
     assistance subsidy for the child under this paragraph.
       ``(G) Opt-out permitted for any month.--A State shall 
     establish a process for permitting the parent of a targeted 
     low-income child receiving a premium assistance subsidy to 
     disenroll the child from the qualified employer-sponsored 
     coverage and enroll the child in, and receive child health 
     assistance under, the State child health plan, effective on 
     the first day of any month for which the child is eligible 
     for such assistance and in a manner that ensures continuity 
     of coverage for the child.
       ``(H) Application to parents.--If a State provides child 
     health assistance or health benefits coverage to parents of a 
     targeted low-income child in accordance with section 2111(b), 
     the State may elect to offer a premium assistance subsidy to 
     a parent of a targeted low-income child who is eligible for 
     such a subsidy under this paragraph in the same manner as the 
     State offers such a subsidy for the enrollment of the child 
     in qualified employer-sponsored coverage, except that--
       ``(i) the amount of the premium assistance subsidy shall be 
     increased to take into account the cost of the enrollment of 
     the parent in the qualified employer-sponsored coverage or, 
     at the option of the State if the State determines it cost-
     effective, the cost of the enrollment of the child's family 
     in such coverage; and
       ``(ii) any reference in this paragraph to a child is deemed 
     to include a reference to the parent or, if applicable under 
     clause (i), the family of the child.
       ``(I) Additional state option for providing premium 
     assistance.--
       ``(i) In general.--A State may establish an employer-family 
     premium assistance purchasing pool for employers with less 
     than 250 employees who have at least 1 employee who is a 
     pregnant woman eligible for assistance under the State child 
     health plan (including through the application of an option 
     described in section 2112(f)) or a member of a family with at 
     least 1 targeted low-income child and to provide a premium 
     assistance subsidy under this paragraph for enrollment in 
     coverage made available through such pool.
       ``(ii) Access to choice of coverage.--A State that elects 
     the option under clause (i) shall identify and offer access 
     to not less than 2 private health plans that are health 
     benefits coverage that is equivalent to the benefits coverage 
     in a benchmark benefit package described in section 2103(b) 
     or benchmark-equivalent coverage that meets the requirements 
     of section 2103(a)(2) for employees described in clause (i).
       ``(iii) Clarification of payment for administrative 
     expenditures.--Nothing in this subparagraph shall be 
     construed as permitting payment under this section for 
     administrative expenditures attributable to the establishment 
     or operation of such pool, except to the extent that such 
     payment would otherwise be permitted under this title.
       ``(J) No effect on premium assistance waiver programs.--
     Nothing in this paragraph shall be construed as limiting the 
     authority of a State to offer premium assistance under 
     section 1906 or 1906A, a waiver described in paragraph (2)(B) 
     or (3), a waiver approved under section 1115, or other 
     authority in effect prior to the date of enactment of the 
     Children's Health Insurance Program Reauthorization Act of 
     2009.
       ``(K) Notice of availability.--If a State elects to provide 
     premium assistance subsidies in accordance with this 
     paragraph, the State shall--
       ``(i) include on any application or enrollment form for 
     child health assistance a notice of the availability of 
     premium assistance subsidies for the enrollment of targeted 
     low-income children in qualified employer-sponsored coverage;
       ``(ii) provide, as part of the application and enrollment 
     process under the State child health plan, information 
     describing the availability of such subsidies and how to 
     elect to obtain such a subsidy; and
       ``(iii) establish such other procedures as the State 
     determines necessary to ensure that parents are fully 
     informed of the choices for receiving child health assistance 
     under the State child health plan or through the receipt of 
     premium assistance subsidies.
       ``(L) Application to qualified employer-sponsored benchmark 
     coverage.--If a group health plan or health insurance 
     coverage offered through an employer is certified by an 
     actuary as health benefits coverage that is equivalent to the 
     benefits coverage in a benchmark benefit package described in 
     section 2103(b) or benchmark-equivalent coverage that meets 
     the requirements of section 2103(a)(2), the State may provide 
     premium assistance subsidies for enrollment of targeted low-
     income children in such group health plan or health insurance 
     coverage in the same manner as such subsidies are provided 
     under this paragraph for enrollment in qualified employer-
     sponsored coverage, but without regard to the requirement to 
     provide supplemental coverage for benefits and cost-sharing 
     protection provided under the State child health plan under 
     subparagraph (E).
       ``(M) Satisfaction of cost-effectiveness test.--Premium 
     assistance subsidies for qualified employer-sponsored 
     coverage offered under this paragraph shall be deemed to meet 
     the requirement of subparagraph (A) of paragraph (3).
       ``(N) Coordination with medicaid.--In the case of a 
     targeted low-income child who receives child health 
     assistance through a State plan under title XIX and who 
     voluntarily elects to receive a premium assistance subsidy 
     under this section, the provisions of section 1906A shall 
     apply and shall supersede any other provisions of this 
     paragraph that are inconsistent with such section.''.
       (2) Determination of cost-effectiveness for premium 
     assistance or purchase of family coverage.--
       (A) In general.--Section 2105(c)(3)(A) (42 U.S.C. 
     1397ee(c)(3)(A)) is amended by striking ``relative to'' and 
     all that follows through the comma and inserting ``relative 
     to
       ``(i) the amount of expenditures under the State child 
     health plan, including administrative expenditures, that the 
     State would have made to provide comparable coverage of the 
     targeted low-income child involved or the family involved (as 
     applicable); or
       ``(ii) the aggregate amount of expenditures that the State 
     would have made under the State child health plan, including 
     administrative expenditures, for providing coverage under 
     such plan for all such children or families.''.
       (B) Nonapplication to previously approved coverage.--The 
     amendment made by subparagraph (A) shall not apply to 
     coverage the purchase of which has been approved by the 
     Secretary under section 2105(c)(3) of the Social Security Act 
     prior to the date of enactment of this Act.
       (b) Medicaid.--Title XIX is amended by inserting after 
     section 1906 the following new section:


                ``premium assistance option for children

       ``Sec. 1906A.  (a) In General.--A State may elect to offer 
     a premium assistance subsidy (as defined in subsection (c)) 
     for qualified employer-sponsored coverage (as defined in 
     subsection (b)) to all individuals under age 19 who are 
     entitled to medical assistance under this title (and to the 
     parent of such an individual) who have access to such 
     coverage if the State meets the requirements of this section.
       ``(b) Qualified Employer-Sponsored Coverage.--
       ``(1) In general.--Subject to paragraph (2)), in this 
     paragraph, the term `qualified employer-sponsored coverage' 
     means a group health plan or health insurance coverage 
     offered through an employer--
       ``(A) that qualifies as creditable coverage as a group 
     health plan under section 2701(c)(1) of the Public Health 
     Service Act;
       ``(B) for which the employer contribution toward any 
     premium for such coverage is at least 40 percent; and

[[Page 1608]]

       ``(C) that is offered to all individuals in a manner that 
     would be considered a nondiscriminatory eligibility 
     classification for purposes of paragraph (3)(A)(ii) of 
     section 105(h) of the Internal Revenue Code of 1986 (but 
     determined without regard to clause (i) of subparagraph (B) 
     of such paragraph).
       ``(2) Exception.--Such term does not include coverage 
     consisting of--
       ``(A) benefits provided under a health flexible spending 
     arrangement (as defined in section 106(c)(2) of the Internal 
     Revenue Code of 1986); or
       ``(B) a high deductible health plan (as defined in section 
     223(c)(2) of such Code), without regard to whether the plan 
     is purchased in conjunction with a health savings account (as 
     defined under section 223(d) of such Code).
       ``(3) Treatment as third party liability.--The State shall 
     treat the coverage provided under qualified employer-
     sponsored coverage as a third party liability under section 
     1902(a)(25).
       ``(c) Premium Assistance Subsidy.--In this section, the 
     term `premium assistance subsidy' means the amount of the 
     employee contribution for enrollment in the qualified 
     employer-sponsored coverage by the individual under age 19 or 
     by the individual's family. Premium assistance subsidies 
     under this section shall be considered, for purposes of 
     section 1903(a), to be a payment for medical assistance.
       ``(d) Voluntary Participation.--
       ``(1) Employers.--Participation by an employer in a premium 
     assistance subsidy offered by a State under this section 
     shall be voluntary. An employer may notify a State that it 
     elects to opt-out of being directly paid a premium assistance 
     subsidy on behalf of an employee.
       ``(2) Beneficiaries.--No subsidy shall be provided to an 
     individual under age 19 under this section unless the 
     individual (or the individual's parent) voluntarily elects to 
     receive such a subsidy. A State may not require such an 
     election as a condition of receipt of medical assistance. 
     State may not require, as a condition of an individual under 
     age 19 (or the individual's parent) being or remaining 
     eligible for medical assistance under this title, apply for 
     enrollment in qualified employer-sponsored coverage under 
     this section.
       ``(3) Opt-out permitted for any month.--A State shall 
     establish a process for permitting the parent of an 
     individual under age 19 receiving a premium assistance 
     subsidy to disenroll the individual from the qualified 
     employer-sponsored coverage.
       ``(e) Requirement To Pay Premiums and Cost-Sharing and 
     Provide Supplemental Coverage.--In the case of the 
     participation of an individual under age 19 (or the 
     individual's parent) in a premium assistance subsidy under 
     this section for qualified employer-sponsored coverage, the 
     State shall provide for payment of all enrollee premiums for 
     enrollment in such coverage and all deductibles, coinsurance, 
     and other cost-sharing obligations for items and services 
     otherwise covered under the State plan under this title 
     (exceeding the amount otherwise permitted under section 1916 
     or, if applicable, section 1916A). The fact that an 
     individual under age 19 (or a parent) elects to enroll in 
     qualified employer-sponsored coverage under this section 
     shall not change the individual's (or parent's) eligibility 
     for medical assistance under the State plan, except insofar 
     as section 1902(a)(25) provides that payments for such 
     assistance shall first be made under such coverage.''.
       (c) GAO Study and Report.--Not later than January 1, 2010, 
     the Comptroller General of the United States shall study cost 
     and coverage issues relating to any State premium assistance 
     programs for which Federal matching payments are made under 
     title XIX or XXI of the Social Security Act, including under 
     waiver authority, and shall submit a report to the Committee 
     on Finance of the Senate and the Committee on Energy and 
     Commerce of the House of Representatives on the results of 
     such study.

     SEC. 302. OUTREACH, EDUCATION, AND ENROLLMENT ASSISTANCE.

       (a) Requirement To Include Description of Outreach, 
     Education, and Enrollment Efforts Related to Premium 
     Assistance Subsidies in State Child Health Plan.--Section 
     2102(c) (42 U.S.C. 1397bb(c)) is amended by adding at the end 
     the following new paragraph:
       ``(3) Premium assistance subsidies.--In the case of a State 
     that provides for premium assistance subsidies under the 
     State child health plan in accordance with paragraph (2)(B), 
     (3), or (10) of section 2105(c), or a waiver approved under 
     section 1115, outreach, education, and enrollment assistance 
     for families of children likely to be eligible for such 
     subsidies, to inform such families of the availability of, 
     and to assist them in enrolling their children in, such 
     subsidies, and for employers likely to provide coverage that 
     is eligible for such subsidies, including the specific, 
     significant resources the State intends to apply to educate 
     employers about the availability of premium assistance 
     subsidies under the State child health plan.''.
       (b) Nonapplication of 10 Percent Limit on Outreach and 
     Certain Other Expenditures.--Section 2105(c)(2)(C) (42 U.S.C. 
     1397ee(c)(2)(C)), as amended by section 211(c)(2), is amended 
     by adding at the end the following new clause:
       ``(iii) Expenditures for outreach to increase the 
     enrollment of children under this title and title xix through 
     premium assistance subsidies.--Expenditures for outreach 
     activities to families of children likely to be eligible for 
     premium assistance subsidies in accordance with paragraph 
     (2)(B), (3), or (10), or a waiver approved under section 
     1115, to inform such families of the availability of, and to 
     assist them in enrolling their children in, such subsidies, 
     and to employers likely to provide qualified employer-
     sponsored coverage (as defined in subparagraph (B) of such 
     paragraph), but not to exceed an amount equal to 1.25 percent 
     of the maximum amount permitted to be expended under 
     subparagraph (A) for items described in subsection 
     (a)(1)(D).''.

   Subtitle B--Coordinating Premium Assistance With Private Coverage

     SEC. 311. SPECIAL ENROLLMENT PERIOD UNDER GROUP HEALTH PLANS 
                   IN CASE OF TERMINATION OF MEDICAID OR CHIP 
                   COVERAGE OR ELIGIBILITY FOR ASSISTANCE IN 
                   PURCHASE OF EMPLOYMENT-BASED COVERAGE; 
                   COORDINATION OF COVERAGE.

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

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

       ``(ii) Disclosure about group health plan benefits to 
     states for medicaid and chip eligible individuals.--In the 
     case of a participant or beneficiary of a group health plan 
     who is covered under a Medicaid plan of a State under title 
     XIX of the Social Security Act or under a State child health 
     plan under title XXI of such Act, the plan administrator of 
     the group health plan shall disclose to the State, upon 
     request, information about the benefits available under the 
     group health plan in sufficient specificity, as determined 
     under regulations of the Secretary of Health and Human 
     Services in consultation with the Secretary that require use 
     of the model coverage coordination disclosure form developed 
     under section 311(b)(1)(C) of the Children's Health Insurance 
     Program Reauthorization Act of 2009, so as to permit the 
     State to make a determination (under paragraph (2)(B), (3), 
     or (10) of section 2105(c) of the Social Security Act or 
     otherwise) concerning

[[Page 1609]]

     the cost-effectiveness of the State providing medical or 
     child health assistance through premium assistance for the 
     purchase of coverage under such group health plan and in 
     order for the State to provide supplemental benefits required 
     under paragraph (10)(E) of such section or other 
     authority.''.
       (b) Conforming Amendments.--
       (1) Amendments to employee retirement income security 
     act.--
       (A) In general.--Section 701(f) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1181(f)) is amended by 
     adding at the end the following new paragraph:
       ``(3) Special rules for application in case of medicaid and 
     chip.--
       ``(A) In general.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage in 
     connection with a group health plan, shall permit an employee 
     who is eligible, but not enrolled, for coverage under the 
     terms of the plan (or a dependent of such an employee if the 
     dependent is eligible, but not enrolled, for coverage under 
     such terms) to enroll for coverage under the terms of the 
     plan if either of the following conditions is met:
       ``(i) Termination of medicaid or chip coverage.--The 
     employee or dependent is covered under a Medicaid plan under 
     title XIX of the Social Security Act or under a State child 
     health plan under title XXI of such Act and coverage of the 
     employee or dependent under such a plan is terminated as a 
     result of loss of eligibility for such coverage and the 
     employee requests coverage under the group health plan (or 
     health insurance coverage) not later than 60 days after the 
     date of termination of such coverage.
       ``(ii) Eligibility for employment assistance under medicaid 
     or chip.--The employee or dependent becomes eligible for 
     assistance, with respect to coverage under the group health 
     plan or health insurance coverage, under such Medicaid plan 
     or State child health plan (including under any waiver or 
     demonstration project conducted under or in relation to such 
     a plan), if the employee requests coverage under the group 
     health plan or health insurance coverage not later than 60 
     days after the date the employee or dependent is determined 
     to be eligible for such assistance.
       ``(B) Coordination with medicaid and chip.--
       ``(i) Outreach to employees regarding availability of 
     medicaid and chip coverage.--

       ``(I) In general.--Each employer that maintains a group 
     health plan in a State that provides medical assistance under 
     a State Medicaid plan under title XIX of the Social Security 
     Act, or child health assistance under a State child health 
     plan under title XXI of such Act, in the form of premium 
     assistance for the purchase of coverage under a group health 
     plan, shall provide to each employee a written notice 
     informing the employee of potential opportunities then 
     currently available in the State in which the employee 
     resides for premium assistance under such plans for health 
     coverage of the employee or the employee's dependents.
       ``(II) Model notice.--Not later than 1 year after the date 
     of enactment of the Children's Health Insurance Program 
     Reauthorization Act of 2009, the Secretary and the Secretary 
     of Health and Human Services, in consultation with Directors 
     of State Medicaid agencies under title XIX of the Social 
     Security Act and Directors of State CHIP agencies under title 
     XXI of such Act, shall jointly develop national and State-
     specific model notices for purposes of subparagraph (A). The 
     Secretary shall provide employers with such model notices so 
     as to enable employers to timely comply with the requirements 
     of subparagraph (A). Such model notices shall include 
     information regarding how an employee may contact the State 
     in which the employee resides for additional information 
     regarding potential opportunities for such premium 
     assistance, including how to apply for such assistance.
       ``(III) Option to provide concurrent with provision of plan 
     materials to employee.--An employer may provide the model 
     notice applicable to the State in which an employee resides 
     concurrent with the furnishing of materials notifying the 
     employee of health plan eligibility, concurrent with 
     materials provided to the employee in connection with an open 
     season or election process conducted under the plan, or 
     concurrent with the furnishing of the summary plan 
     description as provided in section 104(b).

       ``(ii) Disclosure about group health plan benefits to 
     states for medicaid and chip eligible individuals.--In the 
     case of a participant or beneficiary of a group health plan 
     who is covered under a Medicaid plan of a State under title 
     XIX of the Social Security Act or under a State child health 
     plan under title XXI of such Act, the plan administrator of 
     the group health plan shall disclose to the State, upon 
     request, information about the benefits available under the 
     group health plan in sufficient specificity, as determined 
     under regulations of the Secretary of Health and Human 
     Services in consultation with the Secretary that require use 
     of the model coverage coordination disclosure form developed 
     under section 311(b)(1)(C) of the Children's Health Insurance 
     Program Reauthorization Act of 2009, so as to permit the 
     State to make a determination (under paragraph (2)(B), (3), 
     or (10) of section 2105(c) of the Social Security Act or 
     otherwise) concerning the cost-effectiveness of the State 
     providing medical or child health assistance through premium 
     assistance for the purchase of coverage under such group 
     health plan and in order for the State to provide 
     supplemental benefits required under paragraph (10)(E) of 
     such section or other authority.''.
       (B) Conforming amendment.--Section 102(b) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1022(b)) is 
     amended--
       (i) by striking ``and the remedies'' and inserting ``, the 
     remedies''; and
       (ii) by inserting before the period the following: ``, and 
     if the employer so elects for purposes of complying with 
     section 701(f)(3)(B)(i), the model notice applicable to the 
     State in which the participants and beneficiaries reside''.
       (C) Working group to develop model coverage coordination 
     disclosure form.--
       (i) Medicaid, chip, and employer-sponsored coverage 
     coordination working group.--

       (I) In general.--Not later than 60 days after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services and the Secretary of Labor shall jointly establish a 
     Medicaid, CHIP, and Employer-Sponsored Coverage Coordination 
     Working Group (in this subparagraph referred to as the 
     ``Working Group''). The purpose of the Working Group shall be 
     to develop the model coverage coordination disclosure form 
     described in subclause (II) and to identify the impediments 
     to the effective coordination of coverage available to 
     families that include employees of employers that maintain 
     group health plans and members who are eligible for medical 
     assistance under title XIX of the Social Security Act or 
     child health assistance or other health benefits coverage 
     under title XXI of such Act.
       (II) Model coverage coordination disclosure form 
     described.--The model form described in this subclause is a 
     form for plan administrators of group health plans to 
     complete for purposes of permitting a State to determine the 
     availability and cost-effectiveness of the coverage available 
     under such plans to employees who have family members who are 
     eligible for premium assistance offered under a State plan 
     under title XIX or XXI of such Act and to allow for 
     coordination of coverage for enrollees of such plans. Such 
     form shall provide the following information in addition to 
     such other information as the Working Group determines 
     appropriate:

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

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

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

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

[[Page 1610]]

       (II) Report by secretaries to the congress.--Not later than 
     2 months after receipt of the report pursuant to subclause 
     (I), the Secretaries shall jointly submit a report to each 
     House of the Congress regarding the recommendations contained 
     in the report under such subclause.

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

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

       ``(ii) Disclosure about group health plan benefits to 
     states for medicaid and chip eligible individuals.--In the 
     case of an enrollee in a group health plan who is covered 
     under a Medicaid plan of a State under title XIX of the 
     Social Security Act or under a State child health plan under 
     title XXI of such Act, the plan administrator of the group 
     health plan shall disclose to the State, upon request, 
     information about the benefits available under the group 
     health plan in sufficient specificity, as determined under 
     regulations of the Secretary of Health and Human Services in 
     consultation with the Secretary that require use of the model 
     coverage coordination disclosure form developed under section 
     311(b)(1)(C) of the Children's Health Insurance 
     Reauthorization Act of 2009, so as to permit the State to 
     make a determination (under paragraph (2)(B), (3), or (10) of 
     section 2105(c) of the Social Security Act or otherwise) 
     concerning the cost-effectiveness of the State providing 
     medical or child health assistance through premium assistance 
     for the purchase of coverage under such group health plan and 
     in order for the State to provide supplemental benefits 
     required under paragraph (10)(E) of such section or other 
     authority.''.

      TITLE IV--STRENGTHENING QUALITY OF CARE AND HEALTH OUTCOMES

     SEC. 401. CHILD HEALTH QUALITY IMPROVEMENT ACTIVITIES FOR 
                   CHILDREN ENROLLED IN MEDICAID OR CHIP.

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

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

       ``(a) Development of an Initial Core Set of Health Care 
     Quality Measures for Children Enrolled in Medicaid or Chip.--
       ``(1) In general.--Not later than January 1, 2010, the 
     Secretary shall identify and publish for general comment an 
     initial, recommended core set of child health quality 
     measures for use by State programs administered under titles 
     XIX and XXI, health insurance issuers and managed care 
     entities that enter into contracts with such programs, and 
     providers of items and services under such programs.
       ``(2) Identification of initial core measures.--In 
     consultation with the individuals and entities described in 
     subsection (b)(3), the Secretary shall identify existing 
     quality of care measures for children that are in use under 
     public and privately sponsored health care coverage 
     arrangements, or that are part of reporting systems that 
     measure both the presence and duration of health insurance 
     coverage over time.
       ``(3) Recommendations and dissemination.--Based on such 
     existing and identified measures, the Secretary shall publish 
     an initial core set of child health quality measures that 
     includes (but is not limited to) the following:
       ``(A) The duration of children's health insurance coverage 
     over a 12-month time period.
       ``(B) The availability and effectiveness of a full range 
     of--
       ``(i) preventive services, treatments, and services for 
     acute conditions, including services to promote healthy 
     birth, prevent and treat premature birth, and detect the 
     presence or risk of physical or mental conditions that could 
     adversely affect growth and development; and
       ``(ii) treatments to correct or ameliorate the effects of 
     physical and mental conditions, including chronic conditions, 
     in infants, young children, school-age children, and 
     adolescents.
       ``(C) The availability of care in a range of ambulatory and 
     inpatient health care settings in which such care is 
     furnished.
       ``(D) The types of measures that, taken together, can be 
     used to estimate the overall national quality of health care 
     for children, including children with special needs, and to 
     perform comparative analyses of pediatric health care quality 
     and racial, ethnic, and socioeconomic disparities in child 
     health and health care for children.
       ``(4) Encourage voluntary and standardized reporting.--Not 
     later than 2 years after the date of enactment of the 
     Children's Health Insurance Program Reauthorization Act of 
     2009, the Secretary, in consultation with States, shall 
     develop a standardized format for reporting information and 
     procedures and approaches that encourage States to use the 
     initial core measurement set to voluntarily report 
     information regarding the quality of pediatric health care 
     under titles XIX and XXI.
       ``(5) Adoption of best practices in implementing quality 
     programs.--The Secretary shall disseminate information to 
     States regarding best practices among States with respect to 
     measuring and reporting on the

[[Page 1611]]

     quality of health care for children, and shall facilitate the 
     adoption of such best practices. In developing best practices 
     approaches, the Secretary shall give particular attention to 
     State measurement techniques that ensure the timeliness and 
     accuracy of provider reporting, encourage provider reporting 
     compliance, encourage successful quality improvement 
     strategies, and improve efficiency in data collection using 
     health information technology.
       ``(6) Reports to congress.--Not later than January 1, 2011, 
     and every 3 years thereafter, the Secretary shall report to 
     Congress on--
       ``(A) the status of the Secretary's efforts to improve--
       ``(i) quality related to the duration and stability of 
     health insurance coverage for children under titles XIX and 
     XXI;
       ``(ii) the quality of children's health care under such 
     titles, including preventive health services, health care for 
     acute conditions, chronic health care, and health services to 
     ameliorate the effects of physical and mental conditions and 
     to aid in growth and development of infants, young children, 
     school-age children, and adolescents with special health care 
     needs; and
       ``(iii) the quality of children's health care under such 
     titles across the domains of quality, including clinical 
     quality, health care safety, family experience with health 
     care, health care in the most integrated setting, and 
     elimination of racial, ethnic, and socioeconomic disparities 
     in health and health care;
       ``(B) the status of voluntary reporting by States under 
     titles XIX and XXI, utilizing the initial core quality 
     measurement set; and
       ``(C) any recommendations for legislative changes needed to 
     improve the quality of care provided to children under titles 
     XIX and XXI, including recommendations for quality reporting 
     by States.
       ``(7) Technical assistance.--The Secretary shall provide 
     technical assistance to States to assist them in adopting and 
     utilizing core child health quality measures in administering 
     the State plans under titles XIX and XXI.
       ``(8) Definition of core set.--In this section, the term 
     `core set' means a group of valid, reliable, and evidence-
     based quality measures that, taken together--
       ``(A) provide information regarding the quality of health 
     coverage and health care for children;
       ``(B) address the needs of children throughout the 
     developmental age span; and
       ``(C) allow purchasers, families, and health care providers 
     to understand the quality of care in relation to the 
     preventive needs of children, treatments aimed at managing 
     and resolving acute conditions, and diagnostic and treatment 
     services whose purpose is to correct or ameliorate physical, 
     mental, or developmental conditions that could, if untreated 
     or poorly treated, become chronic.
       ``(b) Advancing and Improving Pediatric Quality Measures.--
       ``(1) Establishment of pediatric quality measures 
     program.--Not later than January 1, 2011, the Secretary shall 
     establish a pediatric quality measures program to--
       ``(A) improve and strengthen the initial core child health 
     care quality measures established by the Secretary under 
     subsection (a);
       ``(B) expand on existing pediatric quality measures used by 
     public and private health care purchasers and advance the 
     development of such new and emerging quality measures; and
       ``(C) increase the portfolio of evidence-based, consensus 
     pediatric quality measures available to public and private 
     purchasers of children's health care services, providers, and 
     consumers.
       ``(2) Evidence-based measures.--The measures developed 
     under the pediatric quality measures program shall, at a 
     minimum, be--
       ``(A) evidence-based and, where appropriate, risk adjusted;
       ``(B) designed to identify and eliminate racial and ethnic 
     disparities in child health and the provision of health care;
       ``(C) designed to ensure that the data required for such 
     measures is collected and reported in a standard format that 
     permits comparison of quality and data at a State, plan, and 
     provider level;
       ``(D) periodically updated; and
       ``(E) responsive to the child health needs, services, and 
     domains of health care quality described in clauses (i), 
     (ii), and (iii) of subsection (a)(6)(A).
       ``(3) Process for pediatric quality measures program.--In 
     identifying gaps in existing pediatric quality measures and 
     establishing priorities for development and advancement of 
     such measures, the Secretary shall consult with--
       ``(A) States;
       ``(B) pediatricians, children's hospitals, and other 
     primary and specialized pediatric health care professionals 
     (including members of the allied health professions) who 
     specialize in the care and treatment of children, 
     particularly children with special physical, mental, and 
     developmental health care needs;
       ``(C) dental professionals, including pediatric dental 
     professionals;
       ``(D) health care providers that furnish primary health 
     care to children and families who live in urban and rural 
     medically underserved communities or who are members of 
     distinct population sub-groups at heightened risk for poor 
     health outcomes;
       ``(E) national organizations representing children, 
     including children with disabilities and children with 
     chronic conditions;
       ``(F) national organizations representing consumers and 
     purchasers of children's health care;
       ``(G) national organizations and individuals with expertise 
     in pediatric health quality measurement; and
       ``(H) voluntary consensus standards setting organizations 
     and other organizations involved in the advancement of 
     evidence-based measures of health care.
       ``(4) Developing, validating, and testing a portfolio of 
     pediatric quality measures.--As part of the program to 
     advance pediatric quality measures, the Secretary shall--
       ``(A) award grants and contracts for the development, 
     testing, and validation of new, emerging, and innovative 
     evidence-based measures for children's health care services 
     across the domains of quality described in clauses (i), (ii), 
     and (iii) of subsection (a)(6)(A); and
       ``(B) award grants and contracts for--
       ``(i) the development of consensus on evidence-based 
     measures for children's health care services;
       ``(ii) the dissemination of such measures to public and 
     private purchasers of health care for children; and
       ``(iii) the updating of such measures as necessary.
       ``(5) Revising, strengthening, and improving initial core 
     measures.--Beginning no later than January 1, 2013, and 
     annually thereafter, the Secretary shall publish recommended 
     changes to the core measures described in subsection (a) that 
     shall reflect the testing, validation, and consensus process 
     for the development of pediatric quality measures described 
     in subsection paragraphs (1) through (4).
       ``(6) Definition of pediatric quality measure.--In this 
     subsection, the term `pediatric quality measure' means a 
     measurement of clinical care that is capable of being 
     examined through the collection and analysis of relevant 
     information, that is developed in order to assess 1 or more 
     aspects of pediatric health care quality in various 
     institutional and ambulatory health care settings, including 
     the structure of the clinical care system, the process of 
     care, the outcome of care, or patient experiences in care.
       ``(7) Construction.--Nothing in this section shall be 
     construed as supporting the restriction of coverage, under 
     title XIX or XXI or otherwise, to only those services that 
     are evidence-based.
       ``(c) Annual State Reports Regarding State-Specific Quality 
     of Care Measures Applied Under Medicaid or Chip.--
       ``(1) Annual state reports.--Each State with a State plan 
     approved under title XIX or a State child health plan 
     approved under title XXI shall annually report to the 
     Secretary on the--
       ``(A) State-specific child health quality measures applied 
     by the States under such plans, including measures described 
     in subparagraphs (A) and (B) of subsection (a)(6); and
       ``(B) State-specific information on the quality of health 
     care furnished to children under such plans, including 
     information collected through external quality reviews of 
     managed care organizations under section 1932 of the Social 
     Security Act (42 U.S.C. 1396u-4) and benchmark plans under 
     sections 1937 and 2103 of such Act (42 U.S.C. 1396u-7, 
     1397cc).
       ``(2) Publication.--Not later than September 30, 2010, and 
     annually thereafter, the Secretary shall collect, analyze, 
     and make publicly available the information reported by 
     States under paragraph (1).
       ``(d) Demonstration Projects for Improving the Quality of 
     Children's Health Care and the Use of Health Information 
     Technology.--
       ``(1) In general.--During the period of fiscal years 2009 
     through 2013, the Secretary shall award not more than 10 
     grants to States and child health providers to conduct 
     demonstration projects to evaluate promising ideas for 
     improving the quality of children's health care provided 
     under title XIX or XXI, including projects to--
       ``(A) experiment with, and evaluate the use of, new 
     measures of the quality of children's health care under such 
     titles (including testing the validity and suitability for 
     reporting of such measures);
       ``(B) promote the use of health information technology in 
     care delivery for children under such titles;
       ``(C) evaluate provider-based models which improve the 
     delivery of children's health care services under such 
     titles, including care management for children with chronic 
     conditions and the use of evidence-based approaches to 
     improve the effectiveness, safety, and efficiency of health 
     care services for children; or
       ``(D) demonstrate the impact of the model electronic health 
     record format for children developed and disseminated under 
     subsection (f) on improving pediatric health, including

[[Page 1612]]

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

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

       ``(ii) providing education and training to educational 
     professionals regarding how to promote a healthy lifestyle 
     and a healthy school environment for children;
       ``(iii) planning and implementing a healthy lifestyle 
     curriculum or program with an emphasis on healthy eating 
     behaviors and physical activity; and
       ``(iv) planning and implementing healthy lifestyle classes 
     or programs for parents or guardians, with an emphasis on 
     healthy eating behaviors and physical activity for children;
       ``(C) carry out educational, counseling, promotional, and 
     training activities through the local health care delivery 
     systems including by--
       ``(i) promoting healthy eating behaviors and physical 
     activity services to treat or prevent eating disorders, being 
     overweight, and obesity;
       ``(ii) providing patient education and counseling to 
     increase physical activity and promote healthy eating 
     behaviors;
       ``(iii) training health professionals on how to identify 
     and treat obese and overweight individuals which may include 
     nutrition and physical activity counseling; and
       ``(iv) providing community education by a health 
     professional on good nutrition and physical activity to 
     develop a better understanding of the relationship between 
     diet, physical activity, and eating disorders, obesity, or 
     being overweight; and
       ``(D) provide, through qualified health professionals, 
     training and supervision for community health workers to--
       ``(i) educate families regarding the relationship between 
     nutrition, eating habits, physical activity, and obesity;
       ``(ii) educate families about effective strategies to 
     improve nutrition, establish healthy eating patterns, and 
     establish appropriate levels of physical activity; and
       ``(iii) educate and guide parents regarding the ability to 
     model and communicate positive health behaviors.
       ``(4) Priority.--In awarding grants under paragraph (1), 
     the Secretary shall give priority to awarding grants to 
     eligible entities--
       ``(A) that demonstrate that they have previously applied 
     successfully for funds to carry out activities that seek to 
     promote individual and community health and to prevent the 
     incidence of chronic disease and that can cite published and 
     peer-reviewed research demonstrating that the activities that 
     the entities propose to carry out with funds made available 
     under the grant are effective;
       ``(B) that will carry out programs or activities that seek 
     to accomplish a goal or goals set by the State in the Healthy 
     People 2010 plan of the State;
       ``(C) that provide non-Federal contributions, either in 
     cash or in-kind, to the costs of funding activities under the 
     grants;
       ``(D) that develop comprehensive plans that include a 
     strategy for extending program activities developed under 
     grants in the years following the fiscal years for which they 
     receive grants under this subsection;
       ``(E) located in communities that are medically 
     underserved, as determined by the Secretary;
       ``(F) located in areas in which the average poverty rate is 
     at least 150 percent or higher of the average poverty rate in 
     the State involved, as determined by the Secretary; and
       ``(G) that submit plans that exhibit multisectoral, 
     cooperative conduct that includes the involvement of a broad 
     range of stakeholders, including--
       ``(i) community-based organizations;
       ``(ii) local governments;
       ``(iii) local educational agencies;
       ``(iv) the private sector;
       ``(v) State or local departments of health;
       ``(vi) accredited colleges, universities, and community 
     colleges;
       ``(vii) health care providers;
       ``(viii) State and local departments of transportation and 
     city planning; and
       ``(ix) other entities determined appropriate by the 
     Secretary.
       ``(5) Program design.--
       ``(A) Initial design.--Not later than 1 year after the date 
     of enactment of the Children's Health Insurance Program 
     Reauthorization Act of 2009, the Secretary shall design the 
     demonstration project. The demonstration should draw upon 
     promising, innovative models and incentives to reduce 
     behavioral risk factors. The Administrator of the Centers for 
     Medicare & Medicaid Services shall consult with the Director 
     of the Centers for Disease Control and Prevention, the 
     Director of the Office of Minority Health, the heads of other 
     agencies in the Department of Health and Human Services, and 
     such professional organizations, as the Secretary determines 
     to be appropriate, on the design, conduct, and evaluation of 
     the demonstration.
       ``(B) Number and project areas.--Not later than 2 years 
     after the date of enactment of the Children's Health 
     Insurance Program Reauthorization Act of 2009, the Secretary 
     shall award 1 grant that is specifically designed to 
     determine whether programs similar to programs to be 
     conducted by other grantees under this subsection should be 
     implemented with respect to the general population of 
     children who are eligible for child health assistance under 
     State child health plans under title XXI in order to reduce 
     the incidence of childhood obesity among such population.
       ``(6) Report to congress.--Not later than 3 years after the 
     date the Secretary implements the demonstration project under 
     this subsection, the Secretary shall submit to Congress a 
     report that describes the project, evaluates the 
     effectiveness and cost effectiveness of the project, 
     evaluates the beneficiary satisfaction under the project, and 
     includes any such other information as the Secretary 
     determines to be appropriate.
       ``(7) Definitions.--In this subsection:
       ``(A) Federally-qualified health center.--The term 
     `Federally-qualified health center' has the meaning given 
     that term in section 1905(l)(2)(B).
       ``(B) Indian tribe.--The term `Indian tribe' has the 
     meaning given that term in section

[[Page 1613]]

     4 of the Indian Health Care Improvement Act (25 U.S.C. 1603).
       ``(C) Self-assessment.--The term `self-assessment' means a 
     form that--
       ``(i) includes questions regarding--

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

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

       ``(I) the results of a self-assessment given to the 
     individual;
       ``(II) behavior modification based on the self-assessment; 
     and
       ``(III) any need for clinical preventive and screening 
     services or treatment including medical nutrition therapy;

       ``(ii) to provide any target individual with referrals to 
     community resources and programs available to assist the 
     target individual in reducing health risks; and
       ``(iii) to provide the information described in clause (i) 
     to a health care provider, if designated by the target 
     individual to receive such information.
       ``(8) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection, $25,000,000 
     for the period of fiscal years 2009 through 2013.
       ``(f) Development of Model Electronic Health Record Format 
     for Children Enrolled in Medicaid or CHIP.--
       ``(1) In general.--Not later than January 1, 2010, the 
     Secretary shall establish a program to encourage the 
     development and dissemination of a model electronic health 
     record format for children enrolled in the State plan under 
     title XIX or the State child health plan under title XXI that 
     is--
       ``(A) subject to State laws, accessible to parents, 
     caregivers, and other consumers for the sole purpose of 
     demonstrating compliance with school or leisure activity 
     requirements, such as appropriate immunizations or physicals;
       ``(B) designed to allow interoperable exchanges that 
     conform with Federal and State privacy and security 
     requirements;
       ``(C) structured in a manner that permits parents and 
     caregivers to view and understand the extent to which the 
     care their children receive is clinically appropriate and of 
     high quality; and
       ``(D) capable of being incorporated into, and otherwise 
     compatible with, other standards developed for electronic 
     health records.
       ``(2) Funding.--$5,000,000 of the amount appropriated under 
     subsection (i) for a fiscal year shall be used to carry out 
     this subsection.
       ``(g) Study of Pediatric Health and Health Care Quality 
     Measures.--
       ``(1) In general.--Not later than July 1, 2010, the 
     Institute of Medicine shall study and report to Congress on 
     the extent and quality of efforts to measure child health 
     status and the quality of health care for children across the 
     age span and in relation to preventive care, treatments for 
     acute conditions, and treatments aimed at ameliorating or 
     correcting physical, mental, and developmental conditions in 
     children. In conducting such study and preparing such report, 
     the Institute of Medicine shall--
       ``(A) consider all of the major national population-based 
     reporting systems sponsored by the Federal Government that 
     are currently in place, including reporting requirements 
     under Federal grant programs and national population surveys 
     and estimates conducted directly by the Federal Government;
       ``(B) identify the information regarding child health and 
     health care quality that each system is designed to capture 
     and generate, the study and reporting periods covered by each 
     system, and the extent to which the information so generated 
     is made widely available through publication;
       ``(C) identify gaps in knowledge related to children's 
     health status, health disparities among subgroups of 
     children, the effects of social conditions on children's 
     health status and use and effectiveness of health care, and 
     the relationship between child health status and family 
     income, family stability and preservation, and children's 
     school readiness and educational achievement and attainment; 
     and
       ``(D) make recommendations regarding improving and 
     strengthening the timeliness, quality, and public 
     transparency and accessibility of information about child 
     health and health care quality.
       ``(2) Funding.--Up to $1,000,000 of the amount appropriated 
     under subsection (i) for a fiscal year shall be used to carry 
     out this subsection.
       ``(h) Rule of Construction.--Notwithstanding any other 
     provision in this section, no evidence based quality measure 
     developed, published, or used as a basis of measurement or 
     reporting under this section may be used to establish an 
     irrebuttable presumption regarding either the medical 
     necessity of care or the maximum permissible coverage for any 
     individual child who is eligible for and receiving medical 
     assistance under title XIX or child health assistance under 
     title XXI.
       ``(i) Appropriation.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated for each of 
     fiscal years 2009 through 2013, $45,000,000 for the purpose 
     of carrying out this section (other than subsection (e)). 
     Funds appropriated under this subsection shall remain 
     available until expended.''.
       (b) Increased Matching Rate for Collecting and Reporting on 
     Child Health Measures.--Section 1903(a)(3)(A) (42 U.S.C. 
     1396b(a)(3)(A)), is amended--
       (1) by striking ``and'' at the end of clause (i); and
       (2) by adding at the end the following new clause:
       ``(iii) an amount equal to the Federal medical assistance 
     percentage (as defined in section 1905(b)) of so much of the 
     sums expended during such quarter (as found necessary by the 
     Secretary for the proper and efficient administration of the 
     State plan) as are attributable to such developments or 
     modifications of systems of the type described in clause (i) 
     as are necessary for the efficient collection and reporting 
     on child health measures; and''.

     SEC. 402. IMPROVED AVAILABILITY OF PUBLIC INFORMATION 
                   REGARDING ENROLLMENT OF CHILDREN IN CHIP AND 
                   MEDICAID.

       (a) Inclusion of Process and Access Measures in Annual 
     State Reports.--Section 2108 (42 U.S.C. 1397hh) is amended--
       (1) in subsection (a), in the matter preceding paragraph 
     (1), by striking ``The State'' and inserting ``Subject to 
     subsection (e), the State''; and
       (2) by adding at the end the following new subsection:
       ``(e) Information Required for Inclusion in State Annual 
     Report.--The State shall include the following information in 
     the annual report required under subsection (a):
       ``(1) Eligibility criteria, enrollment, and retention data 
     (including data with respect to continuity of coverage or 
     duration of benefits).
       ``(2) Data regarding the extent to which the State uses 
     process measures with respect to determining the eligibility 
     of children under the State child health plan, including 
     measures such as 12-month continuous eligibility, self-
     declaration of income for applications or renewals, or 
     presumptive eligibility.
       ``(3) Data regarding denials of eligibility and 
     redeterminations of eligibility.
       ``(4) Data regarding access to primary and specialty 
     services, access to networks of care, and care coordination 
     provided under the State child health plan, using quality 
     care and consumer satisfaction measures included in the 
     Consumer Assessment of Healthcare Providers and Systems 
     (CAHPS) survey.
       ``(5) If the State provides child health assistance in the 
     form of premium assistance for the purchase of coverage under 
     a group health plan, data regarding the provision of such 
     assistance, including the extent to which employer-sponsored 
     health insurance coverage is available for children eligible 
     for child health assistance under the State child health 
     plan, the range of the monthly amount of such assistance 
     provided on behalf of a child or family, the number of 
     children or families provided such assistance on a monthly 
     basis, the income of the children or families provided such 
     assistance, the benefits and cost-sharing protection provided 
     under the State child health plan to supplement the coverage 
     purchased with such premium assistance, the effective 
     strategies the State engages in to reduce any administrative 
     barriers to the provision of such assistance, and, the 
     effects, if any, of the provision of such assistance on 
     preventing the coverage provided under the State child health 
     plan from substituting for coverage provided under employer-
     sponsored health insurance offered in the State.
       ``(6) To the extent applicable, a description of any State 
     activities that are designed to reduce the number of 
     uncovered children in the State, including through a State 
     health insurance connector program or support for innovative 
     private health coverage initiatives.''.
       (b) Standardized Reporting Format.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall specify a 
     standardized format for States to use for reporting the 
     information required under section 2108(e) of the Social 
     Security Act, as added by subsection (a)(2).
       (2) Transition period for states.--Each State that is 
     required to submit a report under subsection (a) of section 
     2108 of the Social Security Act that includes the information 
     required under subsection (e) of such section may use up to 3 
     reporting periods to transition to the reporting of such 
     information in accordance with the standardized format 
     specified by the Secretary under paragraph (1).
       (c) Additional Funding for the Secretary To Improve 
     Timeliness of Data Reporting and Analysis for Purposes of 
     Determining Enrollment Increases Under Medicaid and CHIP.--
       (1) Appropriation.--There is appropriated, out of any money 
     in the Treasury not otherwise appropriated, $5,000,000 to the 
     Secretary

[[Page 1614]]

     for fiscal year 2009 for the purpose of improving the 
     timeliness of the data reported and analyzed from the 
     Medicaid Statistical Information System (MSIS) for purposes 
     of providing more timely data on enrollment and eligibility 
     of children under Medicaid and CHIP and to provide guidance 
     to States with respect to any new reporting requirements 
     related to such improvements. Amounts appropriated under this 
     paragraph shall remain available until expended.
       (2) Requirements.--The improvements made by the Secretary 
     under paragraph (1) shall be designed and implemented 
     (including with respect to any necessary guidance for States 
     to report such information in a complete and expeditious 
     manner) so that, beginning no later than October 1, 2009, 
     data regarding the enrollment of low-income children (as 
     defined in section 2110(c)(4) of the Social Security Act (42 
     U.S.C. 1397jj(c)(4)) of a State enrolled in the State plan 
     under Medicaid or the State child health plan under CHIP with 
     respect to a fiscal year shall be collected and analyzed by 
     the Secretary within 6 months of submission.
       (d) GAO Study and Report on Access to Primary and 
     Speciality Services.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study of children's access to primary 
     and specialty services under Medicaid and CHIP, including--
       (A) the extent to which providers are willing to treat 
     children eligible for such programs;
       (B) information on such children's access to networks of 
     care;
       (C) geographic availability of primary and specialty 
     services under such programs;
       (D) the extent to which care coordination is provided for 
     children's care under Medicaid and CHIP; and
       (E) as appropriate, information on the degree of 
     availability of services for children under such programs.
       (2) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Comptroller General shall submit a 
     report to the Committee on Finance of the Senate and the 
     Committee on Energy and Commerce of the House of 
     Representatives on the study conducted under paragraph (1) 
     that includes recommendations for such Federal and State 
     legislative and administrative changes as the Comptroller 
     General determines are necessary to address any barriers to 
     access to children's care under Medicaid and CHIP that may 
     exist.

     SEC. 403. APPLICATION OF CERTAIN MANAGED CARE QUALITY 
                   SAFEGUARDS TO CHIP.

       (a) In General.--Section 2103(f) of Social Security Act (42 
     U.S.C. 1397bb(f)) is amended by adding at the end the 
     following new paragraph:
       ``(3) Compliance with managed care requirements.--The State 
     child health plan shall provide for the application of 
     subsections (a)(4), (a)(5), (b), (c), (d), and (e) of section 
     1932 (relating to requirements for managed care) to coverage, 
     State agencies, enrollment brokers, managed care entities, 
     and managed care organizations under this title in the same 
     manner as such subsections apply to coverage and such 
     entities and organizations under title XIX.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to contract years for health plans beginning on 
     or after July 1, 2009.

                 TITLE V--IMPROVING ACCESS TO BENEFITS

     SEC. 501. DENTAL BENEFITS.

       (a) Coverage.--
       (1) In general.--Section 2103 (42 U.S.C. 1397cc) is 
     amended--
       (A) in subsection (a)--
       (i) in the matter before paragraph (1), by striking 
     ``subsection (c)(5)'' and inserting ``paragraphs (5) and (7) 
     of subsection (c)''; and
       (ii) in paragraph (1), by inserting ``at least'' after 
     ``that is''; and
       (B) in subsection (c)--
       (i) by redesignating paragraph (5) as paragraph (7); and
       (ii) by inserting after paragraph (4), the following:
       ``(5) Dental benefits.--
       ``(A) In general.--The child health assistance provided to 
     a targeted low-income child shall include coverage of dental 
     services necessary to prevent disease and promote oral 
     health, restore oral structures to health and function, and 
     treat emergency conditions.
       ``(B) Permitting use of dental benchmark plans by certain 
     states.--A State may elect to meet the requirement of 
     subparagraph (A) through dental coverage that is equivalent 
     to a benchmark dental benefit package described in 
     subparagraph (C).
       ``(C) Benchmark dental benefit packages.--The benchmark 
     dental benefit packages are as follows:
       ``(i) FEHBP children's dental coverage.--A dental benefits 
     plan under chapter 89A of title 5, United States Code, that 
     has been selected most frequently by employees seeking 
     dependent coverage, among such plans that provide such 
     dependent coverage, in either of the previous 2 plan years.
       ``(ii) State employee dependent dental coverage.--A dental 
     benefits plan that is offered and generally available to 
     State employees in the State involved and that has been 
     selected most frequently by employees seeking dependent 
     coverage, among such plans that provide such dependent 
     coverage, in either of the previous 2 plan years.
       ``(iii) Coverage offered through commercial dental plan.--A 
     dental benefits plan that has the largest insured commercial, 
     non-medicaid enrollment of dependent covered lives of such 
     plans that is offered in the State involved.''.
       (2) Assuring access to care.--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''.
       (3) Effective date.--The amendments made by paragraphs (1) 
     and (2) shall apply to coverage of items and services 
     furnished on or after October 1, 2009.
       (b) State Option to Provide Dental-Only Supplemental 
     Coverage.--
       (1) In general.----Section 2110(b) (42 U.S.C. 1397jj(b)) is 
     amended--
       (A) in paragraph (1)(C), by inserting ``, subject to 
     paragraph (5),'' after ``under title XIX or''; and
       (B) by adding at the end the following new paragraph:
       ``(5) State option to provide dental-only supplemental 
     coverage.--
       ``(A) In general.--Subject to subparagraphs (B) and (C), in 
     the case of any child who is enrolled in a group health plan 
     or health insurance coverage offered through an employer who 
     would, but for the application of paragraph (1)(C), satisfy 
     the requirements for being a targeted low-income child under 
     the State child health plan, a State may waive the 
     application of such paragraph to the child in order to 
     provide--
       ``(i) dental coverage consistent with the requirements of 
     subsection (c)(5) of section 2103; or
       ``(ii) cost-sharing protection for dental coverage 
     consistent with such requirements and the requirements of 
     subsection (e)(3)(B) of such section.
       ``(B) Limitation.--A State may limit the application of a 
     waiver of paragraph (1)(C) to children whose family income 
     does not exceed a level specified by the State, so long as 
     the level so specified does not exceed the maximum income 
     level otherwise established for other children under the 
     State child health plan.
       ``(C) Conditions.--A State may not offer dental-only 
     supplemental coverage under this paragraph unless the State 
     satisfies the following conditions:
       ``(i) Income eligibility.--The State child health plan 
     (whether implemented under title XIX or this title)--

       ``(I) has the highest income eligibility standard permitted 
     under this title (or a waiver) as of January 1, 2009;
       ``(II) does not limit the acceptance of applications for 
     children or impose any numerical limitation, waiting list, or 
     similar limitation on the eligibility of such children for 
     child health assistance under such State plan; and
       ``(III) provides benefits to all children in the State who 
     apply for and meet eligibility standards.

       ``(ii) No more favorable treatment.--The State child health 
     plan may not provide more favorable dental coverage or cost-
     sharing protection for dental coverage to children provided 
     dental-only supplemental coverage under this paragraph than 
     the dental coverage and cost-sharing protection for dental 
     coverage provided to targeted low-income children who are 
     eligible for the full range of child health assistance 
     provided under the State child health plan.''.
       (2) State option to waive waiting period.--Section 
     2102(b)(1)(B) (42 U.S.C. 1397bb(b)(1)(B)), as amended by 
     section 111(b)(2), is amended--
       (A) in clause (ii), by striking ``and'' at the end;
       (B) in clause (iii), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following new clause:
       ``(iv) at State option, may not apply a waiting period in 
     the case of a child provided dental-only supplemental 
     coverage under section 2110(b)(5).''.
       (3) Application of enhanced match under medicaid.--Section 
     1905 (42 U.S.C. 1396d) is amended--
       (A) in subsection (b), in the fourth sentence, 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 subsection (b), the expenditures 
     described in this paragraph are expenditures for dental-only 
     supplemental coverage for children described in section 
     2110(b)(5).''.
       (c) Dental Education for Parents of Newborns.--The 
     Secretary shall develop and implement, through entities that 
     fund or provide perinatal care services to targeted low-
     income children under a State child health plan under title 
     XXI of the Social Security Act, a program to deliver oral 
     health educational materials that inform new parents about 
     risks for, and prevention of, early childhood caries and the 
     need for a dental visit within their newborn's first year of 
     life.
       (d) Provision of Dental Services Through FQHCs.--

[[Page 1615]]

       (1) Medicaid.--Section 1902(a) (42 U.S.C. 1396a(a)) is 
     amended--
       (A) by striking ``and'' at the end of paragraph (70);
       (B) by striking the period at the end of paragraph (71) and 
     inserting ``; and''; and
       (C) by inserting after paragraph (71) the following new 
     paragraph:
       ``(72) provide that the State will not prevent a Federally-
     qualified health center from entering into contractual 
     relationships with private practice dental providers in the 
     provision of Federally-qualified health center services.''.
       (2) CHIP.--Section 2107(e)(1) (42 U.S.C. 1397g(e)(1)), as 
     amended by subsections (a)(2) and (d)(2) of section 203, is 
     amended by inserting after subparagraph (B) the following new 
     subparagraph (and redesignating the succeeding subparagraphs 
     accordingly):
       ``(C) Section 1902(a)(72) (relating to limiting FQHC 
     contracting for provision of dental services).''.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on January 1, 2009.
       (e) Reporting Information on Dental Health.--
       (1) Medicaid.--Section 1902(a)(43)(D)(iii) (42 U.S.C. 
     1396a(a)(43)(D)(iii)) is amended by inserting ``and other 
     information relating to the provision of dental services to 
     such children described in section 2108(e)'' after 
     ``receiving dental services,''.
       (2) CHIP.--Section 2108 (42 U.S.C. 1397hh) is amended by 
     adding at the end the following new subsection:
       ``(e) Information on Dental Care for Children.--
       ``(1) In general.--Each annual report under subsection (a) 
     shall include the following information with respect to care 
     and services described in section 1905(r)(3) provided to 
     targeted low-income children enrolled in the State child 
     health plan under this title at any time during the year 
     involved:
       ``(A) The number of enrolled children by age grouping used 
     for reporting purposes under section 1902(a)(43).
       ``(B) For children within each such age grouping, 
     information of the type contained in questions 12(a)-(c) of 
     CMS Form 416 (that consists of the number of enrolled 
     targeted low income children who receive any, preventive, or 
     restorative dental care under the State plan).
       ``(C) For the age grouping that includes children 8 years 
     of age, the number of such children who have received a 
     protective sealant on at least one permanent molar tooth.
       ``(2) Inclusion of information on enrollees in managed care 
     plans.--The information under paragraph (1) shall include 
     information on children who are enrolled in managed care 
     plans and other private health plans and contracts with such 
     plans under this title shall provide for the reporting of 
     such information by such plans to the State.''.
       (3) Effective date.--The amendments made by this subsection 
     shall be effective for annual reports submitted for years 
     beginning after date of enactment.
       (f) Improved Accessibility of Dental Provider Information 
     to Enrollees Under Medicaid and CHIP.--The Secretary shall--
       (1) work with States, pediatric dentists, and other dental 
     providers (including providers that are, or are affiliated 
     with, a school of dentistry) to include, not later than 6 
     months after the date of the enactment of this Act, on the 
     Insure Kids Now website (http://www.insurekidsnow.gov/) and 
     hotline (1-877-KIDS-NOW) (or on any successor websites or 
     hotlines) a current and accurate list of all such dentists 
     and providers within each State that provide dental services 
     to children enrolled in the State plan (or waiver) under 
     Medicaid or the State child health plan (or waiver) under 
     CHIP, and shall ensure that such list is updated at least 
     quarterly; and
       (2) work with States to include, not later than 6 months 
     after the date of the enactment of this Act, a description of 
     the dental services provided under each State plan (or 
     waiver) under Medicaid and each State child health plan (or 
     waiver) under CHIP on such Insure Kids Now website, and shall 
     ensure that such list is updated at least annually.
       (g) Inclusion of Status of Efforts To Improve Dental Care 
     in Reports on the Quality of Children's Health Care Under 
     Medicaid and CHIP.--Section 1139A(a), as added by section 
     401(a), is amended--
       (1) in paragraph (3)(B)(ii), by inserting ``and, with 
     respect to dental care, conditions requiring the restoration 
     of teeth, relief of pain and infection, and maintenance of 
     dental health'' after ``chronic conditions''; and
       (2) in paragraph (6)(A)(ii), by inserting ``dental care,'' 
     after ``preventive health services,''.
       (h) GAO Study and Report.--
       (1) Study.--The Comptroller General of the United States 
     shall provide for a study that examines--
       (A) access to dental services by children in underserved 
     areas;
       (B) children's access to oral health care, including 
     preventive and restorative services, under Medicaid and CHIP, 
     including--
       (i) the extent to which dental providers are willing to 
     treat children eligible for such programs;
       (ii) information on such children's access to networks of 
     care, including such networks that serve special needs 
     children; and
       (iii) geographic availability of oral health care, 
     including preventive and restorative services, under such 
     programs; and
       (C) the feasibility and appropriateness of using qualified 
     mid-level dental health providers, in coordination with 
     dentists, to improve access for children to oral health 
     services and public health overall.
       (2) Report.--Not later than 18 months year after the date 
     of the enactment of this Act, the Comptroller General shall 
     submit to Congress a report on the study conducted under 
     paragraph (1). The report shall include recommendations for 
     such Federal and State legislative and administrative changes 
     as the Comptroller General determines are necessary to 
     address any barriers to access to oral health care, including 
     preventive and restorative services, under Medicaid and CHIP 
     that may exist.

     SEC. 502. MENTAL HEALTH PARITY IN CHIP PLANS.

       (a) Assurance of Parity.--Section 2103(c) (42 U.S.C. 
     1397cc(c)), as amended by section 501(a)(1)(B), is amended by 
     inserting after paragraph (5), the following:
       ``(6) Mental health services parity.--
       ``(A) In general.--In the case of a State child health plan 
     that provides both medical and surgical benefits and mental 
     health or substance use disorder benefits, such plan shall 
     ensure that the financial requirements and treatment 
     limitations applicable to such mental health or substance use 
     disorder benefits comply with the requirements of section 
     2705(a) of the Public Health Service Act in the same manner 
     as such requirements apply to a group health plan.
       ``(B) Deemed compliance.--To the extent that a State child 
     health plan includes coverage with respect to an individual 
     described in section 1905(a)(4)(B) and covered under the 
     State plan under section 1902(a)(10)(A) of the services 
     described in section 1905(a)(4)(B) (relating to early and 
     periodic screening, diagnostic, and treatment services 
     defined in section 1905(r)) and provided in accordance with 
     section 1902(a)(43), such plan shall be deemed to satisfy the 
     requirements of subparagraph (A).''.
       (b) Conforming Amendments.--Section 2103 (42 U.S.C. 1397cc) 
     is amended--
       (1) in subsection (a), as amended by section 
     501(a)(1)(A)(i), in the matter preceding paragraph (1), by 
     inserting ``, (6),'' after ``(5)''; and
       (2) in subsection (c)(2), by striking subparagraph (B) and 
     redesignating subparagraphs (C) and (D) as subparagraphs (B) 
     and (C), respectively.

     SEC. 503. APPLICATION OF PROSPECTIVE PAYMENT SYSTEM FOR 
                   SERVICES PROVIDED BY FEDERALLY-QUALIFIED HEALTH 
                   CENTERS AND RURAL HEALTH CLINICS.

       (a) Application of Prospective Payment System.--
       (1) In general.--Section 2107(e)(1) (42 U.S.C. 
     1397gg(e)(1)), as amended by section 501(c)(2) is amended by 
     inserting after subparagraph (C) the following new 
     subparagraph (and redesignating the succeeding subparagraphs 
     accordingly):
       ``(D) Section 1902(bb) (relating to payment for services 
     provided by Federally-qualified health centers and rural 
     health clinics).''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to services provided on or after October 1, 2009.
       (b) Transition Grants.--
       (1) Appropriation.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated to the 
     Secretary for fiscal year 2009, $5,000,000, to remain 
     available until expended, for the purpose of awarding grants 
     to States with State child health plans under CHIP that are 
     operated separately from the State Medicaid plan under title 
     XIX of the Social Security Act (including any waiver of such 
     plan), or in combination with the State Medicaid plan, for 
     expenditures related to transitioning to compliance with the 
     requirement of section 2107(e)(1)(D) of the Social Security 
     Act (as added by subsection (a)) to apply the prospective 
     payment system established under section 1902(bb) of the such 
     Act (42 U.S.C. 1396a(bb)) to services provided by Federally-
     qualified health centers and rural health clinics.
       (2) Monitoring and report.--The Secretary shall monitor the 
     impact of the application of such prospective payment system 
     on the States described in paragraph (1) and, not later than 
     October 1, 2011, shall report to Congress on any effect on 
     access to benefits, provider payment rates, or scope of 
     benefits offered by such States as a result of the 
     application of such payment system.

     SEC. 504. PREMIUM GRACE PERIOD.

       (a) In General.--Section 2103(e)(3) (42 U.S.C. 
     1397cc(e)(3)) is amended by adding at the end the following 
     new subparagraph:
       ``(C) Premium grace period.--The State child health plan--
       ``(i) shall afford individuals enrolled under the plan a 
     grace period of at least 30 days from the beginning of a new 
     coverage period to make premium payments before the 
     individual's coverage under the plan may be terminated; and
       ``(ii) shall provide to such an individual, not later than 
     7 days after the first day of such grace period, notice--

[[Page 1616]]

       ``(I) that failure to make a premium payment within the 
     grace period will result in termination of coverage under the 
     State child health plan; and
       ``(II) of the individual's right to challenge the proposed 
     termination pursuant to the applicable Federal regulations.

     For purposes of clause (i), the term `new coverage period' 
     means the month immediately following the last month for 
     which the premium has been paid.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to new coverage periods beginning on or after the 
     date of the enactment of this Act.

     SEC. 505. CLARIFICATION OF COVERAGE OF SERVICES PROVIDED 
                   THROUGH SCHOOL-BASED HEALTH CENTERS.

       (a) In General.--Section 2103(c) (42 U.S.C. 1397cc(c)), as 
     amended by section 501(a)(1)(B), is amended by adding at the 
     end the following new paragraph:
       ``(8) Availability of coverage for items and services 
     furnished through school-based health centers.--Nothing in 
     this title shall be construed as limiting a State's ability 
     to provide child health assistance for covered items and 
     services that are furnished through school-based health 
     centers (as defined in section 2110(c)(9)).''.
       (b) Definition.--Section 2110(c) (42 U.S.C. 1397jj) is 
     amended by adding at the end the following:
       ``(9) School-based health center.--
       ``(A) In general.--The term `school-based health center' 
     means a health clinic that--
       ``(i) is located in or near a school facility of a school 
     district or board or of an Indian tribe or tribal 
     organization;
       ``(ii) is organized through school, community, and health 
     provider relationships;
       ``(iii) is administered by a sponsoring facility;
       ``(iv) provides through health professionals primary health 
     services to children in accordance with State and local law, 
     including laws relating to licensure and certification; and
       ``(v) satisfies such other requirements as a State may 
     establish for the operation of such a clinic.
       ``(B) Sponsoring facility.--For purposes of subparagraph 
     (A)(iii), the term `sponsoring facility' includes any of the 
     following:
       ``(i) A hospital.
       ``(ii) A public health department.
       ``(iii) A community health center.
       ``(iv) A nonprofit health care agency.
       ``(v) A school or school system.
       ``(vi) A program administered by the Indian Health Service 
     or the Bureau of Indian Affairs or operated by an Indian 
     tribe or a tribal organization.''.

     SEC. 506. MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION.

       (a) In General.--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 2010), 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 
     2010), 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 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

[[Page 1617]]

     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, 2010, 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)).
       (c) Annual Report on Medicaid.--Not later than January 1, 
     2010, and annually thereafter, the Secretary, in consultation 
     with the Secretary of the Treasury, the Secretary of Labor, 
     and the States (as defined for purposes of Medicaid), shall 
     submit an annual report to Congress on the financial status 
     of, enrollment in, and spending trends for, Medicaid for the 
     fiscal year ending on September 30 of the preceding year.

     TITLE VI--PROGRAM INTEGRITY AND OTHER MISCELLANEOUS PROVISIONS

           Subtitle A--Program Integrity and Data Collection

     SEC. 601. PAYMENT ERROR RATE MEASUREMENT (``PERM'').

       (a) Expenditures Related to Compliance With Requirements.--
       (1) Enhanced payments.--Section 2105(c) (42 U.S.C. 
     1397ee(c)), as amended by section 301(a), is amended by 
     adding at the end the following new paragraph:
       ``(11) Enhanced payments.--Notwithstanding subsection (b), 
     the enhanced FMAP with respect to payments under subsection 
     (a) for expenditures related to the administration of the 
     payment error rate measurement (PERM) requirements applicable 
     to the State child health plan in accordance with the 
     Improper Payments Information Act of 2002 and parts 431 and 
     457 of title 42, Code of Federal Regulations (or any related 
     or successor guidance or regulations) shall in no event be 
     less than 90 percent.''.
       (2) Exclusion of from cap on administrative expenditures.--
     Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)C)), as amended 
     by section 302(b)), is amended by adding at the end the 
     following:
       ``(iv) Payment error rate measurement (perm) 
     expenditures.--Expenditures related to the administration of 
     the payment error rate measurement (PERM) requirements 
     applicable to the State child health plan in accordance with 
     the Improper Payments Information Act of 2002 and parts 431 
     and 457 of title 42, Code of Federal Regulations (or any 
     related or successor guidance or regulations).''.
       (b) Final Rule Required To Be in Effect for All States.--
     Notwithstanding parts 431 and 457 of title 42, Code of 
     Federal Regulations (as in effect on the date of enactment of 
     this Act), the Secretary shall not calculate or publish any 
     national or State-specific error rate based on the 
     application of the payment error rate measurement (in this 
     section referred to as ``PERM'') requirements to CHIP until 
     after the date that is 6 months after the date on which a new 
     final rule (in this section referred to as the ``new final 
     rule'') promulgated after the date of the enactment of this 
     Act and implementing such requirements in accordance with the 
     requirements of subsection (c) is in effect for all States. 
     Any calculation of a national error rate or a State specific 
     error rate after such new final rule in effect for all States 
     may only be inclusive of errors, as defined in such new final 
     rule or in guidance issued within a reasonable time frame 
     after the effective date for such new final rule that 
     includes detailed guidance for the specific methodology for 
     error determinations.
       (c) Requirements for New Final Rule.--For purposes of 
     subsection (b), the requirements of this subsection are that 
     the new final rule implementing the PERM requirements shall--
       (1) include--
       (A) clearly defined criteria for errors for both States and 
     providers;
       (B) a clearly defined process for appealing error 
     determinations by--
       (i) review contractors; or
       (ii) the agency and personnel described in section 
     431.974(a)(2) of title 42, Code of Federal Regulations, as in 
     effect on September 1, 2007, responsible for the development, 
     direction, implementation, and evaluation of eligibility 
     reviews and associated activities; and
       (C) clearly defined responsibilities and deadlines for 
     States in implementing any corrective action plans; and
       (2) provide that the payment error rate determined for a 
     State shall not take into account payment errors resulting 
     from the State's verification of an applicant's self-
     declaration or self-certification of eligibility for, and the 
     correct amount of, medical assistance or child health 
     assistance, if the State process for verifying an applicant's 
     self-declaration or self-certification satisfies the 
     requirements for such process applicable under regulations 
     promulgated by the Secretary or otherwise approved by the 
     Secretary.
       (d) Option for Application of Data for States in First 
     Application Cycle Under the Interim Final Rule.--After the 
     new final rule implementing the PERM requirements in 
     accordance with the requirements of subsection (c) is in 
     effect for all States, a State for which the PERM 
     requirements were first in effect under an interim final rule 
     for fiscal year 2007 or under a final rule for fiscal year 
     2008 may elect to accept any payment error rate determined in 
     whole or in part for the State on the basis of data for that 
     fiscal year or may elect to not have any payment error rate 
     determined on the basis of such data and, instead, shall be 
     treated as if fiscal year 2010 or fiscal year 2011 were the 
     first fiscal year for which the PERM requirements apply to 
     the State.
       (e) Harmonization of MEQC and PERM.--

[[Page 1618]]

       (1) Reduction of redundancies.--The Secretary shall review 
     the Medicaid Eligibility Quality Control (in this subsection 
     referred to as the ``MEQC'') requirements with the PERM 
     requirements and coordinate consistent implementation of both 
     sets of requirements, while reducing redundancies.
       (2) State option to apply perm data.--A State may elect, 
     for purposes of determining the erroneous excess payments for 
     medical assistance ratio applicable to the State for a fiscal 
     year under section 1903(u) of the Social Security Act (42 
     U.S.C. 1396b(u)) to substitute data resulting from the 
     application of the PERM requirements to the State after the 
     new final rule implementing such requirements is in effect 
     for all States for data obtained from the application of the 
     MEQC requirements to the State with respect to a fiscal year.
       (3) State option to apply meqc data.--For purposes of 
     satisfying the requirements of subpart Q of part 431 of title 
     42, Code of Federal Regulations, relating to Medicaid 
     eligibility reviews, a State may elect to substitute data 
     obtained through MEQC reviews conducted in accordance with 
     section 1903(u) of the Social Security Act (42 U.S.C. 
     1396b(u)) for data required for purposes of PERM 
     requirements, but only if the State MEQC reviews are based on 
     a broad, representative sample of Medicaid applicants or 
     enrollees in the States.
       (f) Identification of Improved State-Specific Sample 
     Sizes.--The Secretary shall establish State-specific sample 
     sizes for application of the PERM requirements with respect 
     to State child health plans for fiscal years beginning with 
     the first fiscal year that begins on or after the date on 
     which the new final rule is in effect for all States, on the 
     basis of such information as the Secretary determines 
     appropriate. In establishing such sample sizes, the Secretary 
     shall, to the greatest extent practicable--
       (1) minimize the administrative cost burden on States under 
     Medicaid and CHIP; and
       (2) maintain State flexibility to manage such programs.

     SEC. 602. 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 
     2009''.
       (b) Use of Additional Funds.--Section 2109(b) (42 U.S.C. 
     1397ii(b)), as amended by subsection (a), is amended--
       (1) by redesignating paragraph (2) as paragraph (4); and
       (2) by inserting after paragraph (1), the following new 
     paragraphs:
       ``(2) Additional requirements.--In addition to making the 
     adjustments required to produce the data described in 
     paragraph (1), with respect to data collection occurring for 
     fiscal years beginning with fiscal year 2009, 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 
     determine the child population growth factor under section 
     2104(m)(5)(B) and any other data necessary for carrying out 
     this title.
       ``(C) Include health insurance survey information in the 
     American Community Survey related to children.
       ``(D) Assess whether American Community Survey estimates, 
     once such survey data are first available, produce more 
     reliable estimates than the Current Population Survey with 
     respect to the purposes described in subparagraph (B).
       ``(E) On the basis of the assessment required under 
     subparagraph (D), recommend to the Secretary of Health and 
     Human Services whether American Community Survey estimates 
     should be used in lieu of, or in some combination with, 
     Current Population Survey estimates for the purposes 
     described in subparagraph (B).
       ``(F) Continue making the adjustments described in the last 
     sentence of paragraph (1) with respect to expansion of the 
     sample size used in State sampling units, the number of 
     sampling units in a State, and using an appropriate 
     verification element.
       ``(3) Authority for the secretary of health and human 
     services to transition to the use of all, or some combination 
     of, acs estimates upon recommendation of the secretary of 
     commerce.--If, on the basis of the assessment required under 
     paragraph (2)(D), the Secretary of Commerce recommends to the 
     Secretary of Health and Human Services that American 
     Community Survey estimates should be used in lieu of, or in 
     some combination with, Current Population Survey estimates 
     for the purposes described in paragraph (2)(B), the Secretary 
     of Health and Human Services, in consultation with the 
     States, may provide for a period during which the Secretary 
     may transition from carrying out such purposes through the 
     use of Current Population Survey estimates to the use of 
     American Community Survey estimates (in lieu of, or in 
     combination with the Current Population Survey estimates, as 
     recommended), provided that any such transition is 
     implemented in a manner that is designed to avoid adverse 
     impacts upon States with approved State child health plans 
     under this title.''.

     SEC. 603. UPDATED FEDERAL EVALUATION OF CHIP.

       Section 2108(c) (42 U.S.C. 1397hh(c)) is amended by 
     striking paragraph (5) and inserting the following:
       ``(5) Subsequent evaluation using updated information.--
       ``(A) In general.--The Secretary, directly or through 
     contracts or interagency agreements, shall conduct an 
     independent subsequent evaluation of 10 States with approved 
     child health plans.
       ``(B) Selection of states and matters included.--Paragraphs 
     (2) and (3) shall apply to such subsequent evaluation in the 
     same manner as such provisions apply to the evaluation 
     conducted under paragraph (1).
       ``(C) Submission to congress.--Not later than December 31, 
     2011, the Secretary shall submit to Congress the results of 
     the evaluation conducted under this paragraph.
       ``(D) Funding.--Out of any money in the Treasury of the 
     United States not otherwise appropriated, there are 
     appropriated $10,000,000 for fiscal year 2010 for the purpose 
     of conducting the evaluation authorized under this paragraph. 
     Amounts appropriated under this subparagraph shall remain 
     available for expenditure through fiscal year 2012.''.

     SEC. 604. ACCESS TO RECORDS FOR IG AND GAO AUDITS AND 
                   EVALUATIONS.

       Section 2108(d) (42 U.S.C. 1397hh(d)) is amended to read as 
     follows:
       ``(d) Access to Records for IG and GAO Audits and 
     Evaluations.--For the purpose of evaluating and auditing the 
     program established under this title, or title XIX, the 
     Secretary, the Office of Inspector General, and the 
     Comptroller General shall have access to any books, accounts, 
     records, correspondence, and other documents that are related 
     to the expenditure of Federal funds under this title and that 
     are in the possession, custody, or control of States 
     receiving Federal funds under this title or political 
     subdivisions thereof, or any grantee or contractor of such 
     States or political subdivisions.''.

     SEC. 605. NO FEDERAL FUNDING FOR ILLEGAL ALIENS; DISALLOWANCE 
                   FOR UNAUTHORIZED EXPENDITURES.

       Nothing in this Act allows Federal payment for individuals 
     who are not legal residents. Titles XI, XIX, and XXI of the 
     Social Security Act provide for the disallowance of Federal 
     financial participation for erroneous expenditures under 
     Medicaid and under CHIP, respectively.

              Subtitle B--Miscellaneous Health Provisions

     SEC. 611. DEFICIT REDUCTION ACT TECHNICAL CORRECTIONS.

       (a) Clarification of Requirement To Provide EPSDT Services 
     for All Children in Benchmark Benefit Packages Under 
     Medicaid.--Section 1937(a)(1) (42 U.S.C. 1396u-7(a)(1)), as 
     inserted by section 6044(a) of the Deficit Reduction Act of 
     2005 (Public Law 109-171, 120 Stat. 88), is amended--
       (1) in subparagraph (A)--
       (A) in the matter before clause (i)--
       (i) by striking ``Notwithstanding any other provision of 
     this title'' and inserting ``Notwithstanding section 
     1902(a)(1) (relating to statewideness), section 
     1902(a)(10)(B) (relating to comparability) and any other 
     provision of this title which would be directly contrary to 
     the authority under this section and subject to subsection 
     (E)''; and
       (ii) by striking ``enrollment in coverage that provides'' 
     and inserting ``coverage that'';
       (B) in clause (i), by inserting ``provides'' after ``(i)''; 
     and
       (C) by striking clause (ii) and inserting the following:
       ``(ii) for any individual described in section 
     1905(a)(4)(B) who is eligible under the State plan in 
     accordance with paragraphs (10) and (17) of section 1902(a), 
     consists of the items and services described in section 
     1905(a)(4)(B) (relating to early and periodic screening, 
     diagnostic, and treatment services defined in section 
     1905(r)) and provided in accordance with the requirements of 
     section 1902(a)(43).'';
       (2) in subparagraph (C)--
       (A) in the heading, by striking ``WRAP-AROUND'' and 
     inserting ``ADDITIONAL''; and
       (B) by striking ``wrap-around or''; and
       (3) by adding at the end the following new subparagraph:
       ``(E) Rule of construction.--Nothing in this paragraph 
     shall be construed as--
       ``(i) requiring a State to offer all or any of the items 
     and services required by subparagraph (A)(ii) through an 
     issuer of benchmark coverage described in subsection (b)(1) 
     or benchmark equivalent coverage described in subsection 
     (b)(2);
       ``(ii) preventing a State from offering all or any of the 
     items and services required by subparagraph (A)(ii) through 
     an issuer of benchmark coverage described in subsection 
     (b)(1) or benchmark equivalent coverage described in 
     subsection (b)(2); or
       ``(iii) 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 
     1902(a)(43) whether provided through benchmark coverage,

[[Page 1619]]

     benchmark equivalent coverage, or otherwise.''.
       (b) Correction of Reference to Children in Foster Care 
     Receiving Child Welfare Services.--Section 
     1937(a)(2)(B)(viii) (42 U.S.C. 1396u-7(a)(2)(B)(viii)), as 
     inserted by section 6044(a) of the Deficit Reduction Act of 
     2005, is amended by striking ``aid or assistance is made 
     available under part B of title IV to children in foster care 
     and individuals'' and inserting ``child welfare services are 
     made available under part B of title IV on the basis of being 
     a child in foster care or''.
       (c) Transparency.--Section 1937 (42 U.S.C. 1396u-7), as 
     inserted by section 6044(a) of the Deficit Reduction Act of 
     2005, is amended by adding at the end the following:
       ``(c) Publication of Provisions Affected.--With respect to 
     a State plan amendment to provide benchmark benefits in 
     accordance with subsections (a) and (b) that is approved by 
     the Secretary, the Secretary shall publish on the Internet 
     website of the Centers for Medicare & Medicaid Services, a 
     list of the provisions of this title that the Secretary has 
     determined do not apply in order to enable the State to carry 
     out the plan amendment and the reason for each such 
     determination on the date such approval is made, and shall 
     publish such list in the Federal Register and not later than 
     30 days after such date of approval.''.
       (d) Effective Date.--The amendments made by subsections 
     (a), (b), and (c) of this section shall take effect as if 
     included in the amendment made by section 6044(a) of the 
     Deficit Reduction Act of 2005.

     SEC. 612. REFERENCES TO TITLE XXI.

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

     SEC. 613. PROHIBITING INITIATION OF NEW HEALTH OPPORTUNITY 
                   ACCOUNT DEMONSTRATION PROGRAMS.

       After the date of the enactment of this Act, the Secretary 
     of Health and Human Services may not approve any new 
     demonstration programs under section 1938 of the Social 
     Security Act (42 U.S.C. 1396u-8).

     SEC. 614. ADJUSTMENT IN COMPUTATION OF MEDICAID FMAP TO 
                   DISREGARD AN EXTRAORDINARY EMPLOYER PENSION 
                   CONTRIBUTION.

       (a) In General.--Only for purposes of computing the FMAP 
     (as defined in subsection (e)) for a State for a fiscal year 
     (beginning with fiscal year 2006) and applying the FMAP under 
     title XIX of the Social Security Act, any significantly 
     disproportionate employer pension or insurance fund 
     contribution described in subsection (b) shall be disregarded 
     in computing the per capita income of such State, but shall 
     not be disregarded in computing the per capita income for the 
     continental United States (and Alaska) and Hawaii.
       (b) Significantly Disproportionate Employer Pension and 
     Insurance Fund Contribution.--
       (1) In general.--For purposes of this section, a 
     significantly disproportionate employer pension and insurance 
     fund contribution described in this subsection with respect 
     to a State is any identifiable employer contribution towards 
     pension or other employee insurance funds that is estimated 
     to accrue to residents of such State for a calendar year 
     (beginning with calendar year 2003) if the increase in the 
     amount so estimated exceeds 25 percent of the total increase 
     in personal income in that State for the year involved.
       (2) Data to be used.--For estimating and adjustment a FMAP 
     already calculated as of the date of the enactment of this 
     Act for a State with a significantly disproportionate 
     employer pension and insurance fund contribution, the 
     Secretary shall use the personal income data set originally 
     used in calculating such FMAP.
       (3) Special adjustment for negative growth.--If in any 
     calendar year the total personal income growth in a State is 
     negative, an employer pension and insurance fund contribution 
     for the purposes of calculating the State's FMAP for a 
     calendar year shall not exceed 125 percent of the amount of 
     such contribution for the previous calendar year for the 
     State.
       (c) Hold Harmless.--No State shall have its FMAP for a 
     fiscal year reduced as a result of the application of this 
     section.
       (d) Report.--Not later than May 15, 2009, the Secretary 
     shall submit to the Congress a report on the problems 
     presented by the current treatment of pension and insurance 
     fund contributions in the use of Bureau of Economic Affairs 
     calculations for the FMAP and for Medicaid and on possible 
     alternative methodologies to mitigate such problems.
       (e) FMAP Defined.--For purposes of this section, the term 
     ``FMAP'' means the Federal medical assistance percentage, as 
     defined in section 1905(b) of the Social Security Act (42 
     U.S.C. 1396(d)).

     SEC. 615. CLARIFICATION TREATMENT OF REGIONAL MEDICAL CENTER.

       (a) In General.--Nothing in section 1903(w) of the Social 
     Security Act (42 U.S.C. 1396b(w)) shall be construed by the 
     Secretary of Health and Human Services as prohibiting a 
     State's use of funds as the non-Federal share of expenditures 
     under title XIX of such Act where such funds are transferred 
     from or certified by a publicly-owned regional medical center 
     located in another State and described in subsection (b), so 
     long as the Secretary determines that such use of funds is 
     proper and in the interest of the program under title XIX.
       (b) Center Described.--A center described in this 
     subsection is a publicly-owned regional medical center that--
       (1) provides level 1 trauma and burn care services;
       (2) provides level 3 neonatal care services;
       (3) is obligated to serve all patients, regardless of 
     ability to pay;
       (4) is located within a Standard Metropolitan Statistical 
     Area (SMSA) that includes at least 3 States;
       (5) provides services as a tertiary care provider for 
     patients residing within a 125-mile radius; and
       (6) meets the criteria for a disproportionate share 
     hospital under section 1923 of such Act (42 U.S.C. 1396r-4) 
     in at least one State other than the State in which the 
     center is located.

     SEC. 616. EXTENSION OF MEDICAID DSH ALLOTMENTS FOR TENNESSEE 
                   AND HAWAII.

       Section 1923(f)(6) (42 U.S.C. 1396r-4(f)(6)), as amended by 
     section 202 of the Medicare Improvements for Patients and 
     Providers Act of 2008 (Public Law 110-275) is amended--
       (1) in the paragraph heading, by striking ``2009 and the 
     first calendar quarter of fiscal year 2010'' and inserting 
     ``2011 and the first calendar quarter of fiscal year 2012'';
       (2) in subparagraph (A)--
       (A) in clause (i)--
       (i) in the second sentence--

       (I) by striking ``and 2009'' and inserting ``, 2009, 2010, 
     and 2011''; and
       (II) by striking ``such portion of''; and

       (ii) in the third sentence, by striking ``2010 for the 
     period ending on December 31, 2009'' and inserting ``2012 for 
     the period ending on December 31, 2011'';
       (B) in clause (ii), by striking ``or for a period in fiscal 
     year 2010'' and inserting ``2010, 2011, or for period in 
     fiscal year 2012''; and
       (C) in clause (iv)--
       (i) in the clause heading, by striking ``2009 and the first 
     calendar quarter of fiscal year 2010'' and inserting ``2011 
     and the first calendar quarter of fiscal year 2012''; and
       (ii) in each of subclauses (I) and (II), by striking `` or 
     for a period in fiscal year 2010'' and inserting ``2010, 
     2011, or for a period in fiscal year 2012''; and
       (3) in subparagraph (B)--
       (A) in clause (i)--
       (i) in the first sentence, by striking ``2009'' and 
     inserting ``2011''; and
       (ii) in the second sentence, by striking ``2010 for the 
     period ending on December 31, 2009'' and inserting ``2012 for 
     the period ending on December 31, 2011''.

     SEC. 617. GAO REPORT ON MEDICAID MANAGED CARE PAYMENT RATES.

       Not later than 18 months after the date of the enactment of 
     this Act, the Comptroller General of the United States shall 
     submit a report to the Committee on Finance of the Senate and 
     the Committee on Energy and Commerce of the House of 
     Representatives analyzing the extent to which State payment 
     rates for medicaid managed care organizations under Medicaid 
     are actuarially sound.

                      Subtitle C--Other Provisions

     SEC. 621. OUTREACH REGARDING HEALTH INSURANCE OPTIONS 
                   AVAILABLE TO CHILDREN.

       (a) Definitions.--In this section--
       (1) the terms ``Administration'' and ``Administrator'' 
     means the Small Business Administration and the Administrator 
     thereof, respectively;
       (2) the term ``certified development company'' means a 
     development company participating in the program under title 
     V of the Small Business Investment Act of 1958 (15 U.S.C. 695 
     et seq.);
       (3) the term ``Medicaid program'' means the program 
     established under title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.);
       (4) the term ``Service Corps of Retired Executives'' means 
     the Service Corps of Retired Executives authorized by section 
     8(b)(1) of the Small Business Act (15 U.S.C. 637(b)(1));
       (5) the term ``small business concern'' has the meaning 
     given that term in section 3 of the Small Business Act (15 
     U.S.C. 632);
       (6) the term ``small business development center'' means a 
     small business development center described in section 21 of 
     the Small Business Act (15 U.S.C. 648);
       (7) the term ``State'' has the meaning given that term for 
     purposes of title XXI of the Social Security Act (42 U.S.C. 
     1397aa et seq.);
       (8) the term ``State Children's Health Insurance Program'' 
     means the State Children's Health Insurance Program 
     established under title XXI of the Social Security Act (42 
     U.S.C. 1397aa et seq.);
       (9) the term ``task force'' means the task force 
     established under subsection (b)(1); and
       (10) the term ``women's business center'' means a women's 
     business center described in section 29 of the Small Business 
     Act (15 U.S.C. 656).
       (b) Establishment of Task Force.--
       (1) Establishment.--There is established a task force to 
     conduct a nationwide campaign of education and outreach for 
     small business concerns regarding the availability of 
     coverage for children through private insurance

[[Page 1620]]

     options, the Medicaid program, and the State Children's 
     Health Insurance Program.
       (2) Membership.--The task force shall consist of the 
     Administrator, the Secretary of Health and Human Services, 
     the Secretary of Labor, and the Secretary of the Treasury.
       (3) Responsibilities.--The campaign conducted under this 
     subsection shall include--
       (A) efforts to educate the owners of small business 
     concerns about the value of health coverage for children;
       (B) information regarding options available to the owners 
     and employees of small business concerns to make insurance 
     more affordable, including Federal and State tax deductions 
     and credits for health care-related expenses and health 
     insurance expenses and Federal tax exclusion for health 
     insurance options available under employer-sponsored 
     cafeteria plans under section 125 of the Internal Revenue 
     Code of 1986;
       (C) efforts to educate the owners of small business 
     concerns about assistance available through public programs; 
     and
       (D) efforts to educate the owners and employees of small 
     business concerns regarding the availability of the hotline 
     operated as part of the Insure Kids Now program of the 
     Department of Health and Human Services.
       (4) Implementation.--In carrying out this subsection, the 
     task force may--
       (A) use any business partner of the Administration, 
     including--
       (i) a small business development center;
       (ii) a certified development company;
       (iii) a women's business center; and
       (iv) the Service Corps of Retired Executives;
       (B) enter into--
       (i) a memorandum of understanding with a chamber of 
     commerce; and
       (ii) a partnership with any appropriate small business 
     concern or health advocacy group; and
       (C) designate outreach programs at regional offices of the 
     Department of Health and Human Services to work with district 
     offices of the Administration.
       (5) Website.--The Administrator shall ensure that links to 
     information on the eligibility and enrollment requirements 
     for the Medicaid program and State Children's Health 
     Insurance Program of each State are prominently displayed on 
     the website of the Administration.
       (6) Report.--
       (A) In general.--Not later than 2 years after the date of 
     enactment of this Act, and every 2 years thereafter, the 
     Administrator shall submit to the Committee on Small Business 
     and Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives a report on the 
     status of the nationwide campaign conducted under paragraph 
     (1).
       (B) Contents.--Each report submitted under subparagraph (A) 
     shall include a status update on all efforts made to educate 
     owners and employees of small business concerns on options 
     for providing health insurance for children through public 
     and private alternatives.

     SEC. 622. SENSE OF THE SENATE REGARDING ACCESS TO AFFORDABLE 
                   AND MEANINGFUL HEALTH INSURANCE COVERAGE.

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

                     TITLE VII--REVENUE PROVISIONS

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

       (a) Cigars.--Section 5701(a) of the Internal Revenue Code 
     of 1986 is amended--
       (1) by striking ``$1.828 cents per thousand ($1.594 cents 
     per thousand on cigars removed during 2000 or 2001)'' in 
     paragraph (1) and inserting ``$50.33 per thousand'',
       (2) by striking ``20.719 percent (18.063 percent on cigars 
     removed during 2000 or 2001)'' in paragraph (2) and inserting 
     ``52.75 percent'', and
       (3) by striking ``$48.75 per thousand ($42.50 per thousand 
     on cigars removed during 2000 or 2001)'' in paragraph (2) and 
     inserting ``40.26 cents per cigar''.
       (b) Cigarettes.--Section 5701(b) of such Code is amended--
       (1) by striking ``$19.50 per thousand ($17 per thousand on 
     cigarettes removed during 2000 or 2001)'' in paragraph (1) 
     and inserting ``$50.33 per thousand'', and
       (2) by striking ``$40.95 per thousand ($35.70 per thousand 
     on cigarettes removed during 2000 or 2001)'' in paragraph (2) 
     and inserting ``$105.69 per thousand''.
       (c) Cigarette Papers.--Section 5701(c) of such Code is 
     amended by striking ``1.22 cents (1.06 cents on cigarette 
     papers removed during 2000 or 2001)'' and inserting ``3.15 
     cents''.
       (d) Cigarette Tubes.--Section 5701(d) of such Code is 
     amended by striking ``2.44 cents (2.13 cents on cigarette 
     tubes removed during 2000 or 2001)'' and inserting ``6.30 
     cents''.
       (e) Smokeless Tobacco.--Section 5701(e) of such Code is 
     amended--
       (1) by striking ``58.5 cents (51 cents on snuff removed 
     during 2000 or 2001)'' in paragraph (1) and inserting 
     ``$1.51'', and
       (2) by striking ``19.5 cents (17 cents on chewing tobacco 
     removed during 2000 or 2001)'' in paragraph (2) and inserting 
     ``50.33 cents''.
       (f) Pipe Tobacco.--Section 5701(f) of such Code is amended 
     by striking ``$1.0969 cents (95.67 cents on pipe tobacco 
     removed during 2000 or 2001)'' and inserting ``$2.8311 
     cents''.
       (g) Roll-Your-Own Tobacco.--Section 5701(g) of such Code is 
     amended by striking ``$1.0969 cents (95.67 cents on roll-
     your-own tobacco removed during 2000 or 2001)'' and inserting 
     ``$24.78''.
       (h) Floor Stocks Taxes.--
       (1) Imposition of tax.--On tobacco products (other than 
     cigars described in section 5701(a)(2) of the Internal 
     Revenue Code of 1986) and cigarette papers and tubes 
     manufactured in or imported into the United States which are 
     removed before April 1, 2009, and held on such date for sale 
     by any person, there is hereby imposed a tax in an amount 
     equal to the excess of--
       (A) the tax which would be imposed under section 5701 of 
     such Code on the article if the article had been removed on 
     such date, over
       (B) the prior tax (if any) imposed under section 5701 of 
     such Code on such article.
       (2) Credit against tax.--Each person shall be allowed as a 
     credit against the taxes imposed by paragraph (1) an amount 
     equal to $500. Such credit shall not exceed the amount of 
     taxes imposed by paragraph (1) on April 1, 2009, for which 
     such person is liable.
       (3) Liability for tax and method of payment.--
       (A) Liability for tax.--A person holding tobacco products, 
     cigarette papers, or cigarette tubes on April 1, 2009, to 
     which any tax imposed by paragraph (1) applies shall be 
     liable for such tax.
       (B) Method of payment.--The tax imposed by paragraph (1) 
     shall be paid in such manner as the Secretary shall prescribe 
     by regulations.
       (C) Time for payment.--The tax imposed by paragraph (1) 
     shall be paid on or before August 1, 2009.
       (4) Articles in foreign trade zones.--Notwithstanding the 
     Act of June 18, 1934 (commonly known as the Foreign Trade 
     Zone Act, 48 Stat. 998, 19 U.S.C. 81a et seq.) or any other 
     provision of law, any article which is located in a foreign 
     trade zone on April 1, 2009, shall be subject to the tax 
     imposed by paragraph (1) if--
       (A) internal revenue taxes have been determined, or customs 
     duties liquidated, with respect to such article before such 
     date pursuant to a request made under the 1st proviso of 
     section 3(a) of such Act, or
       (B) such article is held on such date under the supervision 
     of an officer of the United States Customs and Border 
     Protection of the Department of Homeland Security pursuant to 
     the 2d proviso of such section 3(a).
       (5) Definitions.--For purposes of this subsection--
       (A) In general.--Any term used in this subsection which is 
     also used in section 5702 of the Internal Revenue Code of 
     1986 shall have the same meaning as such term has in such 
     section.
       (B) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury or the Secretary's delegate.
       (6) Controlled groups.--Rules similar to the rules of 
     section 5061(e)(3) of such Code shall apply for purposes of 
     this subsection.
       (7) Other laws applicable.--All provisions of law, 
     including penalties, applicable with respect to the taxes 
     imposed by section 5701 of such Code shall, insofar as 
     applicable and not inconsistent with the provisions of this 
     subsection, apply to the floor stocks taxes imposed by 
     paragraph (1), to the same extent as if such taxes were 
     imposed by such section 5701. The Secretary may treat any 
     person who bore the ultimate burden of the tax imposed by 
     paragraph (1) as the person to whom a credit or refund under 
     such provisions may be allowed or made.
       (i) Effective Date.--The amendments made by this section 
     shall apply to articles removed (as defined in section 
     5702(j) of the Internal Revenue Code of 1986) after March 31, 
     2009.

[[Page 1621]]



     SEC. 702. ADMINISTRATIVE IMPROVEMENTS.

       (a) Permit, Inventories, Reports, and Records Requirements 
     for Manufacturers and Importers of Processed Tobacco.--
       (1) Permit.--
       (A) Application.--Section 5712 of the Internal Revenue Code 
     of 1986 is amended by inserting ``or processed tobacco'' 
     after ``tobacco products''.
       (B) Issuance.--Section 5713(a) of such Code is amended by 
     inserting ``or processed tobacco'' after ``tobacco 
     products''.
       (2) Inventories, reports, and packages.--
       (A) Inventories.--Section 5721 of such Code is amended by 
     inserting ``, processed tobacco,'' after ``tobacco 
     products''.
       (B) Reports.--Section 5722 of such Code is amended by 
     inserting ``, processed tobacco,'' after ``tobacco 
     products''.
       (C) Packages, marks, labels, and notices.--Section 5723 of 
     such Code is amended by inserting ``, processed tobacco,'' 
     after ``tobacco products'' each place it appears.
       (3) Records.--Section 5741 of such Code is amended by 
     inserting ``, processed tobacco,'' after ``tobacco 
     products''.
       (4) Manufacturer of processed tobacco.--Section 5702 of 
     such Code is amended by adding at the end the following new 
     subsection:
       ``(p) Manufacturer of Processed Tobacco.--
       ``(1) In general.--The term `manufacturer of processed 
     tobacco' means any person who processes any tobacco other 
     than tobacco products.
       ``(2) Processed tobacco.--The processing of tobacco shall 
     not include the farming or growing of tobacco or the handling 
     of tobacco solely for sale, shipment, or delivery to a 
     manufacturer of tobacco products or processed tobacco.''.
       (5) Conforming amendments.--
       (A) Section 5702(h) of such Code is amended by striking 
     ``tobacco products and cigarette papers and tubes'' and 
     inserting ``tobacco products or cigarette papers or tubes or 
     any processed tobacco''.
       (B) Sections 5702(j) and 5702(k) of such Code are each 
     amended by inserting ``, or any processed tobacco,'' after 
     ``tobacco products or cigarette papers or tubes''.
       (6) Effective date.--The amendments made by this subsection 
     shall take effect on April 1, 2009.
       (b) Basis for Denial, Suspension, or Revocation of 
     Permits.--
       (1) Denial.--Paragraph (3) of section 5712 of such Code is 
     amended to read as follows:
       ``(3) such person (including, in the case of a corporation, 
     any officer, director, or principal stockholder and, in the 
     case of a partnership, a partner)--
       ``(A) is, by reason of his business experience, financial 
     standing, or trade connections or by reason of previous or 
     current legal proceedings involving a felony violation of any 
     other provision of Federal criminal law relating to tobacco 
     products, processed tobacco, cigarette paper, or cigarette 
     tubes, not likely to maintain operations in compliance with 
     this chapter,
       ``(B) has been convicted of a felony violation of any 
     provision of Federal or State criminal law relating to 
     tobacco products, processed tobacco, cigarette paper, or 
     cigarette tubes, or
       ``(C) has failed to disclose any material information 
     required or made any material false statement in the 
     application therefor.''.
       (2) Suspension or revocation.--Subsection (b) of section 
     5713 of such Code is amended to read as follows:
       ``(b) Suspension or Revocation.--
       ``(1) Show cause hearing.--If the Secretary has reason to 
     believe that any person holding a permit--
       ``(A) has not in good faith complied with this chapter, or 
     with any other provision of this title involving intent to 
     defraud,
       ``(B) has violated the conditions of such permit,
       ``(C) has failed to disclose any material information 
     required or made any material false statement in the 
     application for such permit,
       ``(D) has failed to maintain his premises in such manner as 
     to protect the revenue,
       ``(E) is, by reason of previous or current legal 
     proceedings involving a felony violation of any other 
     provision of Federal criminal law relating to tobacco 
     products, processed tobacco, cigarette paper, or cigarette 
     tubes, not likely to maintain operations in compliance with 
     this chapter, or
       ``(F) has been convicted of a felony violation of any 
     provision of Federal or State criminal law relating to 
     tobacco products, processed tobacco, cigarette paper, or 
     cigarette tubes,
     the Secretary shall issue an order, stating the facts 
     charged, citing such person to show cause why his permit 
     should not be suspended or revoked.
       ``(2) Action following hearing.--If, after hearing, the 
     Secretary finds that such person has not shown cause why his 
     permit should not be suspended or revoked, such permit shall 
     be suspended for such period as the Secretary deems proper or 
     shall be revoked.''.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on the date of the enactment of this Act.
       (c) Application of Internal Revenue Code Statute of 
     Limitations for Alcohol and Tobacco Excise Taxes.--
       (1) In general.--Section 514(a) of the Tariff Act of 1930 
     (19 U.S.C. 1514(a)) is amended by striking ``and section 520 
     (relating to refunds)'' and inserting ``section 520 (relating 
     to refunds), and section 6501 of the Internal Revenue Code of 
     1986 (but only with respect to taxes imposed under chapters 
     51 and 52 of such Code)''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to articles imported after the date of the 
     enactment of this Act.
       (d) Expansion of Definition of Roll-Your-Own Tobacco.--
       (1) In general.--Section 5702(o) of the Internal Revenue 
     Code of 1986 is amended by inserting ``or cigars, or for use 
     as wrappers thereof'' before the period at the end.

       (2) Effective date.--The amendment made by this subsection 
     shall apply to articles removed (as defined in section 
     5702(j) of the Internal Revenue Code of 1986) after March 31, 
     2009.

       (e) Time of Tax for Unlawfully Manufactured Tobacco 
     Products.--

       (1) In general.--Section 5703(b)(2) of such Code is amended 
     by adding at the end the following new subparagraph:

       ``(F) Special rule for unlawfully manufactured tobacco 
     products.--In the case of any tobacco products, cigarette 
     paper, or cigarette tubes manufactured in the United States 
     at any place other than the premises of a manufacturer of 
     tobacco products, cigarette paper, or cigarette tubes that 
     has filed the bond and obtained the permit required under 
     this chapter, tax shall be due and payable immediately upon 
     manufacture.''.

       (2) Effective date.--The amendment made by this subsection 
     shall take effect on the date of the enactment of this Act.

       (f) Disclosure.--

       (1) In general.--Paragraph (1) of section 6103(o) of such 
     Code is amended by designating the text as subparagraph (A), 
     moving such text 2 ems to the right, striking ``Returns'' and 
     inserting ``(a) in general.--Returns'', and by inserting 
     after subparagraph (A) (as so redesignated) the following new 
     subparagraph:

       ``(B) Use in certain proceedings.--Returns and return 
     information disclosed to a Federal agency under subparagraph 
     (A) may be used in an action or proceeding (or in preparation 
     for such action or proceeding) brought under section 625 of 
     the American Jobs Creation Act of 2004 for the collection of 
     any unpaid assessment or penalty arising under such Act.''.

       (2) Conforming amendment.--Section 6103(p)(4) of such Code 
     is amended by striking ``(o)(1)'' both places it appears and 
     inserting ``(o)(1)(A)''.

       (3) Effective date.--The amendments made by this subsection 
     shall apply on or after the date of the enactment of this 
     Act.

       (g) Transitional Rule.--Any person who--

       (1) on April 1 is engaged in business as a manufacturer of 
     processed tobacco or as an importer of processed tobacco, and

       (2) before the end of the 90-day period beginning on such 
     date, submits an application under subchapter B of chapter 52 
     of such Code to engage in such business, may, notwithstanding 
     such subchapter B, continue to engage in such business 
     pending final action on such application. Pending such final 
     action, all provisions of such chapter 52 shall apply to such 
     applicant in the same manner and to the same extent as if 
     such applicant were a holder of a permit under such chapter 
     52 to engage in such business.

     SEC. 703. TREASURY STUDY CONCERNING MAGNITUDE OF TOBACCO 
                   SMUGGLING IN THE UNITED STATES.

       Not later than one year after the date of the enactment of 
     this Act, the Secretary of the Treasury shall conduct a study 
     concerning the magnitude of tobacco smuggling in the United 
     States and submit to Congress recommendations for the most 
     effective steps to reduce tobacco smuggling. Such study shall 
     also include a review of the loss of Federal tax receipts due 
     to illicit tobacco trade in the United States and the role of 
     imported tobacco products in the illicit tobacco trade in the 
     United States.

     SEC. 704. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

       The percentage under subparagraph (C) of section 401(1) of 
     the Tax Increase Prevention and Reconciliation Act of 2005 in 
     effect on the date of the enactment of this Act is increased 
     by 0.5 percentage point.

                                 ______
                                 

  SA 40. Mr. McCONNELL (for himself, Mr. Kyl, Mr. Vitter, Mr. 
Chambliss, Mr. Bunning, Mr. Gregg, Mr. Coburn, Mr. Burr, Mr. Isakson, 
Mr. Graham, Mr. Inhofe, Mr. Cornyn, Mr. Brownback, Mr. Cochran, Mr. 
Ensign, Mr. Thune, Mr. DeMint, Mr. Bennett, Mr. Barrasso, Mr. Enzi, and 
Mr. Wicker) proposed an amendment to amendment SA 39 proposed by Mr. 
Reid (for Mr. Baucus) to the bill H.R. 2, to amend title XXI of the 
Social Security Act to extend and improve the Children's Health 
Insurance Program, and for other purposes; as follows:

       In lieu of the matter proposed to be inserted insert

[[Page 1622]]



     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Kids First 
     Act''.

       (b) Table of Contents.--The table of contents for this Act 
     is as follows:


Sec. 1. Short title; table of contents.

Sec. 2. Reauthorization through fiscal year 2013.

Sec. 3. Allotments for the 50 States and the District of Columbia based 
              on expenditures and numbers of low-income children.

Sec. 4. Limitations on matching rates for populations other than low-
              income children or pregnant women covered through a 
              section 1115 waiver.

Sec. 5. Prohibition on new section 1115 waivers for coverage of adults 
              other than pregnant women.

Sec. 6. Standardization of determination of family income for targeted 
              low-income children under title XXI and optional targeted 
              low-income children under title XIX.

Sec. 7. Grants for outreach and enrollment.

Sec. 8. Improved State option for offering premium assistance for 
              coverage of children through private plans under SCHIP 
              and Medicaid.

Sec. 9. Treatment of unborn children.

Sec. 10. 50 percent matching rate for all Medicaid administrative 
              costs.

Sec. 11. Reduction in payments for Medicaid administrative costs to 
              prevent duplication of such payments under TANF.

Sec. 12. Elimination of waiver of certain Medicaid provider tax 
              provisions.

Sec. 13. Elimination of special payments for certain public hospitals.

Sec. 14. Effective date; coordination of funding for fiscal year 2009.

     SEC. 2. REAUTHORIZATION THROUGH FISCAL YEAR 2013.

       (a) Increase in National Allotment.--Section 2104 of the 
     Social Security Act (42 U.S.C. 1397dd(a)) is amended--

       (1) in subsection (a)--

       (A) by striking ``and'' at the end of paragraph (10);

       (B) in paragraph (11)--

       (i) by striking ``each of fiscal years 2008 and 2009'' and 
     inserting ``fiscal year 2008''; and

       (ii) by striking the period at the end and inserting a 
     semicolon; and

       (C) by adding at the end the following new paragraphs:

       ``(12) for fiscal year 2009, $7,780,000,000;

       ``(13) for fiscal year 2010, $8,044,000,000;

       ``(14) for fiscal year 2011, $8,568,000,000;

       ``(15) for fiscal year 2012, $9,032,000,000; and

       ``(16) for fiscal year 2013, $9,505,000,000.''; and

       (2) in subsection (c)(4)(B), by striking ``2009'' and 
     inserting ``2008, $62,000,000 for fiscal year 2009, 
     $64,000,000 for fiscal year 2010, $68,000,000 for fiscal year 
     2011, $72,000,000 for fiscal year 2012, and $75,000,000 for 
     fiscal year 2013''.

       (b) Repeal of Limitation on Availability of Funding for 
     Fiscal Years 2008 and 2009.--Section 201 of the Medicare, 
     Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
     173) is amended--

       (1) in subsection (a), by striking paragraph (2) and 
     redesignating paragraphs (3) and (4), as paragraphs (2) and 
     (3) respectively; and

       (2) in subsection (b), by striking paragraph (2).

     SEC. 3. ALLOTMENTS FOR THE 50 STATES AND THE DISTRICT OF 
                   COLUMBIA BASED ON EXPENDITURES AND NUMBERS OF 
                   LOW-INCOME CHILDREN.

       (a) In General.--Section 2104 of the Social Security Act 
     (42 U.S.C. 1397dd) is amended by adding at the end the 
     following new subsection:

       ``(m) Determination of Allotments for the 50 States and the 
     District of Columbia for Fiscal Years 2009 Through 2013.--

       ``(1) In general.--Notwithstanding the preceding provisions 
     of this subsection and subject to paragraph (3), the 
     Secretary shall allot to each subsection (b) State for each 
     of fiscal years 2009 through 2013, the amount determined for 
     the fiscal year that is equal to the product of--

       ``(A) the amount available for allotment under subsection 
     (a) for the fiscal year, reduced by the amount of allotments 
     made under subsection (c) (determined without regard to 
     paragraph (4) thereof) for the fiscal year; and

       ``(B) the sum of the State allotment factors determined 
     under paragraph (2) with respect to the State and weighted in 
     accordance with subparagraph (B) of that paragraph for the 
     fiscal year.

       ``(2) State allotment factors.--

       ``(A) In general.--For purposes of paragraph (1)(B), the 
     State allotment factors are the following:

       ``(i) The ratio of the projected expenditures for targeted 
     low-income children under the State child health plan and 
     pregnant women under a waiver of such plan for the fiscal 
     year to the sum of such projected expenditures for all States 
     for the fiscal year, multiplied by the applicable percentage 
     weight assigned under subparagraph (B).

       ``(ii) The ratio of the number of low-income children who 
     have not attained age 19 with no health insurance coverage in 
     the State, as determined by the Secretary on the basis of the 
     arithmetic average of the number of such children for the 3 
     most recent Annual Social and Economic Supplements to the 
     Current Population Survey of the Bureau of the Census 
     available before the beginning of the calendar year before 
     such fiscal year begins, to the sum of the number of such 
     children determined for all States for such fiscal year, 
     multiplied by the applicable percentage weight assigned under 
     subparagraph (B).

       ``(iii) The ratio of the projected expenditures for 
     targeted low-income children under the State child health 
     plan and pregnant women under a waiver of such plan for the 
     preceding fiscal year to the sum of such projected 
     expenditures for all States for such preceding fiscal year, 
     multiplied by the applicable percentage weight assigned under 
     subparagraph (B).

       ``(iv) The ratio of the actual expenditures for targeted 
     low-income children under the State child health plan and 
     pregnant women under a waiver of such plan for the second 
     preceding fiscal year to the sum of such actual expenditures 
     for all States for such second preceding fiscal year, 
     multiplied by the applicable percentage weight assigned under 
     subparagraph (B).

       ``(B) Assignment of weights.--For each of fiscal years 2009 
     through 2013, the following percentage weights shall be 
     applied to the ratios determined under subparagraph (A) for 
     each such fiscal year:

       ``(i) 40 percent for the ratio determined under 
     subparagraph (A)(i).

       ``(ii) 5 percent for the ratio determined under 
     subparagraph (A)(ii).

       ``(iii) 50 percent for the ratio determined under 
     subparagraph (A)(iii).

       ``(iv) 5 percent for the ratio determined under 
     subparagraph (A)(iv).

       ``(C) Determination of projected and actual expenditures.--
     For purposes of subparagraph (A):
       ``(i) Projected expenditures.--The projected expenditures 
     described in clauses (i) and (iii) of such subparagraph with 
     respect to a fiscal year shall be determined on the basis of 
     amounts reported by States to the Secretary on the May 15th 
     submission of Form CMS-37 and Form CMS-21B submitted not 
     later than June 30th of the fiscal year preceding such year.

       ``(ii) Actual expenditures.--The actual expenditures 
     described in clause (iv) of such subparagraph with respect to 
     a second preceding fiscal year shall be determined on the 
     basis of amounts reported by States to the Secretary on Form 
     CMS-64 and Form CMS-21 submitted not later than November 30 
     of the preceding fiscal year.''.

       (b) 2-Year Availability of Allotments; Expenditures Counted 
     Against Oldest Allotments.--Section 2104(e) of the Social 
     Security Act (42 U.S.C. 1397dd(e)) is amended to read as 
     follows:

       ``(e) Availability of Amounts Allotted.--

       ``(1) In general.--Except as provided in the succeeding 
     paragraphs of this subsection, amounts allotted to a State 
     pursuant to this section--

       ``(A) for each of fiscal years 1998 through 2008, shall 
     remain available for expenditure by the State through the end 
     of the second succeeding fiscal year; and

       ``(B) for each of fiscal years 2009 through 2013, shall 
     remain available for expenditure by the State only through 
     the end of the fiscal year succeeding the fiscal year for 
     which such amounts are allotted.

       ``(2) Elimination of redistribution of allotments not 
     expended within 3 years.--Notwithstanding subsection (f), 
     amounts allotted to a State under this section for fiscal 
     years beginning with fiscal year 2009 that remain unexpended 
     as of the end of the fiscal year succeeding the fiscal year 
     for which the amounts are allotted shall not be redistributed 
     to other States and shall revert to the Treasury on October 1 
     of the third succeeding fiscal year.

       ``(3) Rule for counting expenditures against fiscal year 
     allotments.--Expenditures under the State child health plan 
     made on or after April 1, 2009, shall be counted against 
     allotments for the earliest fiscal year for which funds are 
     available for expenditure under this subsection.''.

       (c) Conforming Amendments.--

       (1) Section 2104(b)(1) of the Social Security Act (42 
     U.S.C. 1397dd(b)(1)) is amended by striking ``subsection 
     (d)'' and inserting ``the succeeding subsections of this 
     section''.

       (2) Section 2104(f) of such Act (42 U.S.C. 1397dd(f)) is 
     amended by striking ``The'' and inserting ``Subject to 
     subsection (e)(2), the''.

     SEC. 4. LIMITATIONS ON MATCHING RATES FOR POPULATIONS OTHER 
                   THAN LOW-INCOME CHILDREN OR PREGNANT WOMEN 
                   COVERED THROUGH A SECTION 1115 WAIVER.

       (a) Limitation on Payments.--Section 2105(c) of the Social 
     Security Act (42 U.S.C. 1397ee(c)) is amended by adding at 
     the end the following new paragraph:


[[Page 1623]]


       ``(8) Limitations on matching rate for populations other 
     than targeted low-income children or pregnant women covered 
     through a section 1115 waiver.--For child health assistance 
     or health benefits coverage furnished in any fiscal year 
     beginning with fiscal year 2010:

       ``(A) FMAP applied to payments for coverage of children or 
     pregnant women covered through a section 1115 waiver enrolled 
     in the state child health plan on the date of enactment of 
     the kids first act and whose gross family income is 
     determined to exceed the income eligibility level specified 
     for a targeted low-income child.--Notwithstanding subsections 
     (b)(1)(B) and (d) of section 2110, in the case of any 
     individual described in subsection (c) of section 105 of the 
     Kids First Act who the State elects to continue to provide 
     child health assistance for under the State child health plan 
     in accordance with the requirements of such subsection, the 
     Federal medical assistance percentage (as determined under 
     section 1905(b) without regard to clause (4) of such section) 
     shall be substituted for the enhanced FMAP under subsection 
     (a)(1) with respect to such assistance.

       ``(B) FMAP applied to payments only for nonpregnant 
     childless adults and parents and caretaker relatives enrolled 
     under a section 1115 waiver on the date of enactment of the 
     kids first act.--The Federal medical assistance percentage 
     (as determined under section 1905(b) without regard to clause 
     (4) of such section) shall be substituted for the enhanced 
     FMAP under subsection (a)(1) with respect to payments for 
     child health assistance or health benefits coverage provided 
     under the State child health plan for any of the following:

       ``(i) Parents or caretaker relatives enrolled under a 
     waiver on the date of enactment of the kids first act.--A 
     nonpregnant parent or a nonpregnant caretaker relative of a 
     targeted low-income child who is enrolled in the State child 
     health plan under a waiver, experimental, pilot, or 
     demonstration project on the date of enactment of the Kids 
     First Act and whose family income does not exceed the income 
     eligibility applied under such waiver with respect to that 
     population on such date.

       ``(ii) Nonpregnant childless adults enrolled under a waiver 
     on such date.--A nonpregnant childless adult enrolled in the 
     State child health plan under a waiver, experimental, pilot, 
     or demonstration project described in section 6102(c)(3) of 
     the Deficit Reduction Act of 2005 (42 U.S.C. 1397gg note) on 
     the date of enactment of the Kids First Act and whose family 
     income does not exceed the income eligibility applied under 
     such waiver with respect to that population on such date.

       ``(iii) No replacement enrollees.--Nothing in clauses (i) 
     or (ii) shall be construed as authorizing a State to provide 
     child health assistance or health benefits coverage under a 
     waiver described in either such clause to a nonpregnant 
     parent or a nonpregnant caretaker relative of a targeted low-
     income child, or a nonpregnant childless adult, who is not 
     enrolled under the waiver on the date of enactment of the 
     Kids First Act.

       ``(C) No federal payment for any new nonpregnant adult 
     enrollees or for such enrollees who no longer satisfy income 
     eligibility requirements.--Payment shall not be made under 
     this section for child health assistance or other health 
     benefits coverage provided under the State child health plan 
     or under a waiver under section 1115 for any of the 
     following:

       ``(i) Parents or caretaker relatives under a section 1115 
     waiver approved after the date of enactment of the kids first 
     act.--A nonpregnant parent or a nonpregnant caretaker 
     relative of a targeted low-income child under a waiver, 
     experimental, pilot, or demonstration project that is 
     approved on or after the date of enactment of the Kids First 
     Act.

       ``(ii) Parents, caretaker relatives, and nonpregnant 
     childless adults whose family income exceeds the income 
     eligibility level specified under a section 1115 waiver 
     approved prior to the kids first act.--Any nonpregnant parent 
     or a nonpregnant caretaker relative of a targeted low-income 
     child whose family income exceeds the income eligibility 
     level referred to in subparagraph (B)(i), and any nonpregnant 
     childless adult whose family income exceeds the income 
     eligibility level referred to in subparagraph (B)(ii).

       ``(iii) Nonpregnant childless adults, parents, or caretaker 
     relatives not enrolled under a section 1115 waiver on the 
     date of enactment of the kids first act.--Any nonpregnant 
     parent or a nonpregnant caretaker relative of a targeted low-
     income child who is not enrolled in the State child health 
     plan under a section 1115 waiver, experimental, pilot, or 
     demonstration project referred to in subparagraph (B)(i) on 
     the date of enactment of the Kids First Act, and any 
     nonpregnant childless adult who is not enrolled in the State 
     child health plan under a section 1115 waiver, experimental, 
     pilot, or demonstration project referred to in subparagraph 
     (B)(ii)(I) on such date.

       ``(D) Definition of caretaker relative.--In this 
     subparagraph, the term `caretaker relative' has the meaning 
     given that term for purposes of carrying out section 1931.

       ``(E) Rule of construction.--Nothing in this paragraph 
     shall be construed as implying that payments for coverage of 
     populations for which the Federal medical assistance 
     percentage (as so determined) is to be substituted for the 
     enhanced FMAP under subsection (a)(1) in accordance with this 
     paragraph are to be made from funds other than the allotments 
     determined for a State under section 2104.''.

       (b) Conforming Amendment.--Section 2105(a)(1) of the Social 
     Security Act ( 42 U.S.C. 1397dd(a)(1)) is amended, in the 
     matter preceding subparagraph (A), by inserting ``or 
     subsection (c)(8)'' after ``subparagraph (B)''.

     SEC. 5. PROHIBITION ON NEW SECTION 1115 WAIVERS FOR COVERAGE 
                   OF ADULTS OTHER THAN PREGNANT WOMEN.

       (a) In General.--Section 2107(f) of the Social Security Act 
     (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 paragraphs:
       ``(2) The Secretary may not approve, extend, renew, or 
     amend a waiver, experimental, pilot, or demonstration project 
     with respect to a State after the date of enactment of the 
     Kids First Act that would allow funds made available under 
     this title to be used to provide child health assistance or 
     other health benefits coverage for any other adult other than 
     a pregnant woman whose family income does not exceed the 
     income eligibility level specified for a targeted low-income 
     child in that State under a waiver or project approved as of 
     such date.
       ``(3) The Secretary may not approve, extend, renew, or 
     amend a waiver, experimental, pilot, or demonstration project 
     with respect to a State after the date of enactment of the 
     Kids First Act that would waive or modify the requirements of 
     section 2105(c)(8).''.
       (b) Clarification of Authority for Coverage of Pregnant 
     Women.--Section 2106 of the Social Security Act (42 U.S.C. 
     1397ff) is amended by adding at the end the following new 
     subsection:
       ``(f) No Authority To Cover Pregnant Women Through State 
     Plan.--For purposes of this title, a State may provide 
     assistance to a pregnant woman under the State child health 
     plan only--
       ``(1) by virtue of a waiver under section 1115; or
       ``(2) through the application of sections 457.10, 
     457.350(b)(2), 457.622(c)(5), and 457.626(a)(3) of title 42, 
     Code of Federal Regulations (as in effect on the date of 
     enactment of the Kids First Act).''.
       (c) Assurance of Notice to Affected Enrollees.--The 
     Secretary of Health and Human Services shall establish 
     procedures to ensure that States provide adequate public 
     notice for parents, caretaker relatives, and nonpregnant 
     childless adults whose eligibility for child health 
     assistance or health benefits coverage under a waiver under 
     section 1115 of the Social Security Act will be terminated as 
     a result of the amendments made by subsection (a), and that 
     States otherwise adhere to regulations of the Secretary 
     relating to procedures for terminating waivers under section 
     1115 of the Social Security Act.

     SEC. 6. STANDARDIZATION OF DETERMINATION OF FAMILY INCOME FOR 
                   TARGETED LOW-INCOME CHILDREN UNDER TITLE XXI 
                   AND OPTIONAL TARGETED LOW-INCOME CHILDREN UNDER 
                   TITLE XIX.

       (a) Eligibility Based on Gross Income.--
       (1) In general.--Section 2110 of the Social Security Act 
     (42 U.S.C. 1397jj) is amended--
       (A) in subsection (b)(1)(A), by inserting ``in accordance 
     with subsection (d)'' after ``State plan''; and
       (B) by adding at the end the following new subsection:
       ``(d) Standardization of Determination of Family Income.--A 
     State shall determine family income for purposes of 
     determining income eligibility for child health assistance or 
     other health benefits coverage under the State child health 
     plan (or under a waiver of such plan under section 1115) 
     solely on the basis of the gross income (as defined by the 
     Secretary) of the family.''.
       (2) Prohibition on waiver of requirements.--Section 2107(f) 
     (42 U.S.C. 1397gg(f)), as amended by section 5(a), is amended 
     by adding at the end the following new paragraph:
       ``(4) The Secretary may not approve a waiver, experimental, 
     pilot, or demonstration project with respect to a State after 
     the date of enactment of the Kids First Act that would waive 
     or modify the requirements of section 2110(d) (relating to 
     determining income eligibility on the basis of gross income) 
     and regulations promulgated to carry out such 
     requirements.''.
       (b) Regulations.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services shall promulgate interim final regulations defining 
     gross income for purposes of section 2110(d) of the Social 
     Security Act, as added by subsection (a).
       (c) Application to Current Enrollees.--The interim final 
     regulations promulgated under subsection (b) shall not be 
     used to determine the income eligibility of any individual 
     enrolled in a State child health plan

[[Page 1624]]

     under title XXI of the Social Security Act on the date of 
     enactment of this Act before the date on which such 
     eligibility of the individual is required to be redetermined 
     under the plan as in effect on such date. In the case of any 
     individual enrolled in such plan on such date who, solely as 
     a result of the application of subsection (d) of section 2110 
     of the Social Security Act (as added by subsection (a)) and 
     the regulations promulgated under subsection (b), is 
     determined to be ineligible for child health assistance under 
     the State child health plan, a State may elect, subject to 
     substitution of the Federal medical assistance percentage for 
     the enhanced FMAP under section 2105(c)(8)(A) of the Social 
     Security Act (as added by section 4(a)), to continue to 
     provide the individual with such assistance for so long as 
     the individual otherwise would be eligible for such 
     assistance and the individual's family income, if determined 
     under the income and resource standards and methodologies 
     applicable under the State child health plan on September 30, 
     2008, would not exceed the income eligibility level 
     applicable to the individual under the State child health 
     plan.

     SEC. 7. GRANTS FOR OUTREACH AND ENROLLMENT.

       (a) Grants.--Title XXI of the Social Security Act (42 
     U.S.C. 1397aa et seq.) is amended by adding at the end the 
     following:

     ``SEC. 2111. GRANTS TO IMPROVE OUTREACH AND ENROLLMENT.

       ``(a) Outreach and Enrollment Grants; National Campaign.--
       ``(1) In general.--From the amounts appropriated for a 
     fiscal year under subsection (f), subject to paragraph (2), 
     the Secretary shall award grants to eligible entities to 
     conduct outreach and enrollment efforts that are designed to 
     increase the enrollment and participation of eligible 
     children under this title and title XIX.
       ``(2) 10 percent set aside for national enrollment 
     campaign.--An amount equal to 10 percent of such amounts for 
     the fiscal year shall be used by the Secretary for 
     expenditures during the fiscal year to carry out a national 
     enrollment campaign in accordance with subsection (g).
       ``(b) Award of Grants.--
       ``(1) Priority for awarding.--
       ``(A) In general.--In awarding grants under subsection (a), 
     the Secretary shall give priority to eligible entities that--
       ``(i) propose to target geographic areas with high rates 
     of--

       ``(I) eligible but unenrolled children, including such 
     children who reside in rural areas; or
       ``(II) racial and ethnic minorities and health disparity 
     populations, including those proposals that address cultural 
     and linguistic barriers to enrollment; and

       ``(ii) submit the most demonstrable evidence required under 
     paragraphs (1) and (2) of subsection (c).
       ``(B) 10 percent set aside for outreach to indian 
     children.--An amount equal to 10 percent of the funds 
     appropriated under subsection (f) for a fiscal year shall be 
     used by the Secretary to award grants to Indian Health 
     Service providers and urban Indian organizations receiving 
     funds under title V of the Indian Health Care Improvement Act 
     (25 U.S.C. 1651 et seq.) for outreach to, and enrollment of, 
     children who are Indians.
       ``(2) 2-year availability.--A grant awarded under this 
     section for a fiscal year shall remain available for 
     expenditure through the end of the succeeding fiscal year.
       ``(c) Application.--An eligible entity that desires to 
     receive a grant under subsection (a) shall submit an 
     application to the Secretary in such form and manner, and 
     containing such information, as the Secretary may decide. 
     Such application shall include--
       ``(1) evidence demonstrating that the entity includes 
     members who have access to, and credibility with, ethnic or 
     low-income populations in the communities in which activities 
     funded under the grant are to be conducted;
       ``(2) evidence demonstrating that the entity has the 
     ability to address barriers to enrollment, such as lack of 
     awareness of eligibility, stigma concerns and punitive fears 
     associated with receipt of benefits, and other cultural 
     barriers to applying for and receiving child health 
     assistance or medical assistance;
       ``(3) specific quality or outcomes performance measures to 
     evaluate the effectiveness of activities funded by a grant 
     awarded under this section; and
       ``(4) an assurance that the eligible entity shall--
       ``(A) conduct an assessment of the effectiveness of such 
     activities against the performance measures;
       ``(B) cooperate with the collection and reporting of 
     enrollment data and other information in order for the 
     Secretary to conduct such assessments.
       ``(C) in the case of an eligible entity that is not the 
     State, provide the State with enrollment data and other 
     information as necessary for the State to make necessary 
     projections of eligible children and pregnant women.
       ``(d) Supplement, Not Supplant.--Federal funds awarded 
     under this section shall be used to supplement, not supplant, 
     non-Federal funds that are otherwise available for activities 
     funded under this section.
       ``(e) Definitions.--In this section:
       ``(1) Eligible entity.--The term `eligible entity' means 
     any of the following:
       ``(A) A State with an approved child health plan under this 
     title.
       ``(B) A local government.
       ``(C) An Indian tribe or tribal consortium, a tribal 
     organization, an urban Indian organization receiving funds 
     under title V of the Indian Health Care Improvement Act (25 
     U.S.C. 1651 et seq.), or an Indian Health Service provider.
       ``(D) A Federal health safety net organization.
       ``(E) A State, national, local, or community-based public 
     or nonprofit private organization.
       ``(F) A faith-based organization or consortia, to the 
     extent that a grant awarded to such an entity is consistent 
     with the requirements of section 1955 of the Public Health 
     Service Act (42 U.S.C. 300x-65) relating to a grant award to 
     non-governmental entities.
       ``(G) An elementary or secondary school.
       ``(H) A national, local, or community-based public or 
     nonprofit private organization, including organizations that 
     use community health workers or community-based doula 
     programs.
       ``(2) Federal health safety net organization.--The term 
     `Federal health safety net organization' means--
       ``(A) a federally-qualified health center (as defined in 
     section 1905(l)(2)(B));
       ``(B) a hospital defined as a disproportionate share 
     hospital for purposes of section 1923;
       ``(C) a covered entity described in section 340B(a)(4) of 
     the Public Health Service Act (42 U.S.C. 256b(a)(4)); and
       ``(D) any other entity or consortium that serves children 
     under a federally-funded program, including the special 
     supplemental nutrition program for women, infants, and 
     children (WIC) established under section 17 of the Child 
     Nutrition Act of 1966 (42 U.S.C. 1786), the head start and 
     early head start programs under the Head Start Act (42 U.S.C. 
     9801 et seq.), the school lunch program established under the 
     Richard B. Russell National School Lunch Act, and an 
     elementary or secondary school.
       ``(3) Indians; indian tribe; tribal organization; urban 
     indian organization.--The terms `Indian', `Indian tribe', 
     `tribal organization', and `urban Indian organization' have 
     the meanings given such terms in section 4 of the Indian 
     Health Care Improvement Act (25 U.S.C. 1603).
       ``(4) Community health worker.--The term `community health 
     worker' means an individual who promotes health or nutrition 
     within the community in which the individual resides--
       ``(A) by serving as a liaison between communities and 
     health care agencies;
       ``(B) by providing guidance and social assistance to 
     community residents;
       ``(C) by enhancing community residents' ability to 
     effectively communicate with health care providers;
       ``(D) by providing culturally and linguistically 
     appropriate health or nutrition education;
       ``(E) by advocating for individual and community health or 
     nutrition needs; and
       ``(F) by providing referral and followup services.
       ``(f) Appropriation.--
       ``(1) In general.--There is appropriated, out of any money 
     in the Treasury not otherwise appropriated, for the purpose 
     of awarding grants under this section--
       ``(A) $100,000,000 for each of fiscal years 2009 and 2010;
       ``(B) $75,000,000 for each of fiscal years 2011 and 2012; 
     and
       ``(C) $50,000,000 for fiscal year 2013.
       ``(2) Grants in addition to other amounts paid.--Amounts 
     appropriated and paid under the authority of this section 
     shall be in addition to amounts appropriated under section 
     2104 and paid to States in accordance with section 2105, 
     including with respect to expenditures for outreach 
     activities in accordance with subsections (a)(1)(D)(iii) and 
     (c)(2)(C) of that section.
       ``(g) National Enrollment Campaign.--From the amounts made 
     available under subsection (a)(2) for a fiscal year, the 
     Secretary shall develop and implement a national enrollment 
     campaign to improve the enrollment of underserved child 
     populations in the programs established under this title and 
     title XIX. Such campaign may include--
       ``(1) the establishment of partnerships with the Secretary 
     of Education and the Secretary of Agriculture to develop 
     national campaigns to link the eligibility and enrollment 
     systems for the assistance programs each Secretary 
     administers that often serve the same children;
       ``(2) the integration of information about the programs 
     established under this title and title XIX in public health 
     awareness campaigns administered by the Secretary;
       ``(3) increased financial and technical support for 
     enrollment hotlines maintained by the Secretary to ensure 
     that all States participate in such hotlines;
       ``(4) the establishment of joint public awareness outreach 
     initiatives with the Secretary of Education and the Secretary 
     of Labor regarding the importance of health insurance to 
     building strong communities and the economy;

[[Page 1625]]

       ``(5) the development of special outreach materials for 
     Native Americans or for individuals with limited English 
     proficiency; and
       ``(6) such other outreach initiatives as the Secretary 
     determines would increase public awareness of the programs 
     under this title and title XIX.''.
       (b) Nonapplication of Administrative Expenditures Cap.--
     Section 2105(c)(2) of the Social Security Act (42 U.S.C. 
     1397ee(c)(2)) is amended by adding at the end the following:
       ``(C) Nonapplication to expenditures for outreach and 
     enrollment.--The limitation under subparagraph (A) shall not 
     apply with respect to expenditures for outreach activities 
     under section 2102(c)(1), or for enrollment activities, for 
     children eligible for child health assistance under the State 
     child health plan or medical assistance under the State plan 
     under title XIX.''.

     SEC. 8. IMPROVED STATE OPTION FOR OFFERING PREMIUM ASSISTANCE 
                   FOR COVERAGE OF CHILDREN THROUGH PRIVATE PLANS 
                   UNDER SCHIP AND MEDICAID.

       (a) In General.--Section 2105(c) of the Social Security Act 
     (42 U.S.C. 1397ee(c)), as amended by section 4(a) is amended 
     by adding at the end the following:
       ``(9) Additional state option for offering premium 
     assistance.--
       ``(A) In general.--Subject to the succeeding provisions of 
     this paragraph, a State may elect to offer a premium 
     assistance subsidy (as defined in subparagraph (C)) for 
     qualified coverage (as defined in subparagraph (B)) to all 
     targeted low-income children who are eligible for child 
     health assistance under the plan and have access to such 
     coverage in accordance with the requirements of this 
     paragraph.
       ``(B) Qualified coverage.--In this paragraph, the term 
     `qualified coverage' means the following:
       ``(i) Qualified employer sponsored coverage.--

       ``(I) In general.--A group health plan or health insurance 
     coverage offered through an employer that is--

       ``(aa) substantially equivalent to the benefits coverage in 
     a benchmark benefit package described in section 2103(b) or 
     benchmark-equivalent coverage that meets the requirements of 
     section 2103(a)(2);
       ``(bb) made similarly available to all of the employer's 
     employees and for which the employer makes a contribution to 
     the premium that is not less for employees receiving a 
     premium assistance subsidy under any option available under 
     the State child health plan under this title or the State 
     plan under title XIX to provide such assistance than the 
     employer contribution provided for all other employees; and
       ``(cc) cost-effective, as determined under subclause (II).

       ``(II) Cost-effectiveness.--A group health plan or health 
     insurance coverage offered through an employer shall be 
     considered to be cost-effective if--

       ``(aa) the marginal premium cost to purchase family 
     coverage through the employer is less than the State cost of 
     providing child health assistance through the State child 
     health plan for all the children in the family who are 
     targeted low-income children; or
       ``(bb) the marginal premium cost between individual 
     coverage and purchasing family coverage through the employer 
     is not greater than 175 percent of the cost to the State to 
     provide child health assistance through the State child 
     health plan for a targeted low-income child.
       ``(ii) Qualified non-group coverage.--Health insurance 
     coverage offered to individuals in the non-group health 
     insurance market that is substantially equivalent to the 
     benefits coverage in a benchmark benefit package described in 
     section 2103(b) or benchmark-equivalent coverage that meets 
     the requirements of section 2103(a)(2).
       ``(iii) High deductible health plan.--A high deductible 
     health plan (as defined in section 223(c)(2) of the Internal 
     Revenue Code of 1986) purchased through a health savings 
     account (as defined under section 223(d) of such Code).
       ``(C) Premium assistance subsidy.--
       ``(i) In general.--In this paragraph, the term `premium 
     assistance subsidy' means, with respect to a targeted low-
     income child, the amount equal to the difference between the 
     employee contribution required for enrollment only of the 
     employee under qualified employer sponsored coverage and the 
     employee contribution required for enrollment of the employee 
     and the child in such coverage, less any applicable premium 
     cost-sharing applied under the State child health plan, 
     subject to the annual aggregate cost-sharing limit applied 
     under section 2103(e)(3)(B).
       ``(ii) State payment option.--Subject to clause (iii), a 
     State may provide a premium assistance subsidy directly to an 
     employer or as reimbursement to an employee for out-of-pocket 
     expenditures.
       ``(iii) Requirement for direct payment to employee.--A 
     State shall not pay a premium assistance subsidy directly to 
     the employee, unless the State has established procedures to 
     ensure that the targeted low-income child on whose behalf 
     such payments are made are actually enrolled in the qualified 
     employer sponsored coverage.
       ``(iv) Treatment as child health assistance.--Expenditures 
     for the provision of premium assistance subsidies shall be 
     considered child health assistance described in paragraph 
     (1)(C) of subsection (a) for purposes of making payments 
     under that subsection.
       ``(v) State option to require acceptance of subsidy.--A 
     State may condition the provision of child health assistance 
     under the State child health plan for a targeted low-income 
     child on the receipt of a premium assistance subsidy for 
     enrollment in qualified employer sponsored coverage if the 
     State determines the provision of such a subsidy to be more 
     cost-effective in accordance with subparagraph (B)(ii).
       ``(vi) Not treated as income.--Notwithstanding any other 
     provision of law, a premium assistance subsidy provided in 
     accordance with this paragraph shall not be treated as income 
     to the child or the parent of the child for whom such subsidy 
     is provided.
       ``(D) No requirement to provide supplemental coverage for 
     benefits and additional cost-sharing protection provided 
     under the state child health plan.--
       ``(i) In general.--A State that elects the option to 
     provide a premium assistance subsidy under this paragraph 
     shall not be required to provide a targeted low-income child 
     enrolled in qualified employer sponsored coverage with 
     supplemental coverage for items or services that are not 
     covered, or are only partially covered, under the qualified 
     employer sponsored coverage or cost-sharing protection other 
     than the protection required under section 2103(e)(3)(B).
       ``(ii) Notice of cost-sharing requirements.--A State shall 
     provide a targeted low-income child or the parent of such a 
     child (as appropriate) who is provided with a premium 
     assistance subsidy in accordance with this paragraph with 
     notice of the cost-sharing requirements and limitations 
     imposed under the qualified employer sponsored coverage in 
     which the child is enrolled upon the enrollment of the child 
     in such coverage and annually thereafter.
       ``(iii) Record keeping requirements.--A State may require a 
     parent of a targeted low-income child that is enrolled in 
     qualified employer-sponsored coverage to bear the 
     responsibility for keeping track of out-of-pocket 
     expenditures incurred for cost-sharing imposed under such 
     coverage and to notify the State when the limit on such 
     expenditures imposed under section 2103(e)(3)(B) has been 
     reached for a year from the effective date of enrollment for 
     such year.
       ``(iv) State option for reimbursement.--A State may 
     retroactively reimburse a parent of a targeted low-income 
     child for out-of-pocket expenditures incurred after reaching 
     the 5 percent cost-sharing limitation imposed under section 
     2103(e)(3)(B) for a year.
       ``(E) 6-month waiting period required.--A State shall 
     impose at least a 6-month waiting period from the time an 
     individual is enrolled in private health insurance prior to 
     the provision of a premium assistance subsidy for a targeted 
     low-income child in accordance with this paragraph.
       ``(F) Non application of waiting period for enrollment in 
     the state medicaid plan or the state child health plan.--A 
     targeted low-income child provided a premium assistance 
     subsidy in accordance with this paragraph who loses 
     eligibility for such subsidy shall not be treated as having 
     been enrolled in private health insurance coverage for 
     purposes of applying any waiting period imposed under the 
     State child health plan or the State plan under title XIX for 
     the enrollment of the child under such plan.
       ``(G) Assurance of special enrollment period under group 
     health plans in case of eligibility for premium subsidy 
     assistance.--No payment shall be made under subsection (a) 
     for amounts expended for the provision of premium assistance 
     subsidies under this paragraph unless a State provides 
     assurances to the Secretary that the State has in effect laws 
     requiring a group health plan, a health insurance issuer 
     offering group health insurance coverage in connection with a 
     group health plan, and a self-funded health plan, to permit 
     an employee who is eligible, but not enrolled, for coverage 
     under the terms of the plan (or a child of such an employee 
     if the child is eligible, but not enrolled, for coverage 
     under such terms) to enroll for coverage under the terms of 
     the plan if the employee's child becomes eligible for a 
     premium assistance subsidy under this paragraph.
       ``(H) No effect on previously approved premium assistance 
     programs.--Nothing in this paragraph shall be construed as 
     limiting the authority of a State to offer premium assistance 
     under section 1906, a waiver described in paragraph (2)(B) or 
     (3), a waiver approved under section 1115, or other authority 
     in effect on February 1, 2009.
       ``(I) Notice of availability.--A State shall--
       ``(i) include on any application or enrollment form for 
     child health assistance a notice of the availability of 
     premium assistance subsidies for the enrollment of targeted 
     low-income children in qualified employer sponsored coverage;
       ``(ii) provide, as part of the application and enrollment 
     process under the State child health plan, information 
     describing the availability of such subsidies and how to 
     elect to obtain such a subsidy; and
       ``(iii) establish such other procedures as the State 
     determines necessary to ensure

[[Page 1626]]

     that parents are informed of the availability of such 
     subsidies under the State child health plan.''.
       (b) Application to Medicaid.--Section 1906 of the Social 
     Security Act (42 U.S.C. 1396e) is amended by inserting after 
     subsection (c) the following:
       ``(d) The provisions of section 2105(c)(9) shall apply to a 
     child who is eligible for medical assistance under the State 
     plan in the same manner as such provisions apply to a 
     targeted low-income child under a State child health plan 
     under title XXI. Section 1902(a)(34) shall not apply to a 
     child who is provided a premium assistance subsidy under the 
     State plan in accordance with the preceding sentence.''.

     SEC. 9. TREATMENT OF UNBORN CHILDREN.

       (a) Codification of Current Regulations.--Section 
     2110(c)(1) of the Social Security Act (42 U.S.C. 
     1397jj(c)(1)) is amended by striking the period at the end 
     and inserting the following: ``, and includes, at the option 
     of a State, an unborn child. For purposes of the previous 
     sentence, the term `unborn child' means a member of the 
     species Homo sapiens, at any stage of development, who is 
     carried in the womb.''.
       (b) Clarifications Regarding Coverage of Mothers.--Section 
     2103 (42 U.S.C. 1397cc) is amended by adding at the end the 
     following new subsection:
       ``(g) Clarifications Regarding Authority To Provide 
     Postpartum Services and Maternal Health Care.--Any State that 
     provides child health assistance to an unborn child under the 
     option described in section 2110(c)(1) may--
       ``(1) continue to provide such assistance to the mother, as 
     well as postpartum services, through the end of the month in 
     which the 60-day period (beginning on the last day of 
     pregnancy) ends; and
       ``(2) in the interest of the child to be born, have 
     flexibility in defining and providing services to benefit 
     either the mother or unborn child consistent with the health 
     of both.''.

     SEC. 10. 50 PERCENT MATCHING RATE FOR ALL MEDICAID 
                   ADMINISTRATIVE COSTS.

       Section 1903(a) of the Social Security Act (42 U.S.C. 
     1396b(a)) is amended--
       (1) by striking paragraph (2);
       (2) by redesignating paragraph (3)(E) as paragraph (2) and 
     re-locating and indenting it appropriately;
       (3) in paragraph (2), as so redesignated, by redesignating 
     clauses (i) and (ii) as subparagraphs (A) and (B), and 
     indenting them appropriately;
       (4) by striking paragraphs (3) and (4);
       (5) in paragraph (5), by striking ``which are attributable 
     to the offering, arranging, and furnishing'' and inserting 
     ``which are for the medical assistance costs of furnishing'';
       (6) by striking paragraph (6);
       (7) in paragraph (7), by striking ``subject to section 
     1919(g)(3)(B),''; and
       (8) by redesignating paragraphs (5) and (7) as paragraphs 
     (3) and (4), respectively.

     SEC. 11. REDUCTION IN PAYMENTS FOR MEDICAID ADMINISTRATIVE 
                   COSTS TO PREVENT DUPLICATION OF SUCH PAYMENTS 
                   UNDER TANF.

       Section 1903 of the Social Security Act (42 U.S.C. 1396b) 
     is amended--
       (1) in subsection (a)(7), by striking ``section 
     1919(g)(3)(B)'' and inserting ``subsection (h)'';
       (2) in subsection (a)(2)(D) by inserting ``, subject to 
     subsection (g)(3)(C) of such section'' after ``as are 
     attributable to State activities under section 1919(g)''; and
       (3) by adding after subsection (g) the following new 
     subsection:
       ``(h) Reduction in Payments for Administrative Costs To 
     Prevent Duplication of Payments Under Title IV.--Beginning 
     with the calendar quarter commencing April 1, 2009, the 
     Secretary shall reduce the amount paid to each State under 
     subsection (a)(7) for each quarter by an amount equal to \1/
     4\ of the annualized amount determined for the Medicaid 
     program under section 16(k)(2)(B) of the Food Stamp Act of 
     1977 (7 U.S.C. 2025(k)(2)(B)).''.

     SEC. 12. ELIMINATION OF WAIVER OF CERTAIN MEDICAID PROVIDER 
                   TAX PROVISIONS.

       Effective October 1, 2009, subsection (c) of section 4722 
     of the Balanced Budget Act of 1997 (Public Law 105-33; 111 
     Stat. 515) is repealed.

     SEC. 13. ELIMINATION OF SPECIAL PAYMENTS FOR CERTAIN PUBLIC 
                   HOSPITALS.

       Effective October 1, 2009, subsection (d) of section 701 of 
     the Medicare, Medicaid, and SCHIP Benefits Improvement and 
     Protection Act of 2000, as enacted into law by section 
     1(a)(6) of Public Law 106-554 (42 U.S.C. 1396r-4 note), is 
     repealed.

     SEC. 14. EFFECTIVE DATE; COORDINATION OF FUNDING FOR FISCAL 
                   YEAR 2009.

       (a) In General.--Unless otherwise specified, subject to 
     subsection (b), the amendments made by this Act shall take 
     effect on the date of enactment of this Act.
       (b) Delay if State Legislation Required.--In the case of a 
     State child health plan under title XXI of the Social 
     Security Act or a waiver of such plan under section 1115 of 
     such Act which the Secretary of Health and Human Services 
     determines requires State legislation (other than legislation 
     appropriating funds) in order for the plan or waiver to meet 
     the additional requirements imposed by the amendments made by 
     this Act, the State child health plan or waiver shall not be 
     regarded as failing to comply with the requirements of such 
     title XXI solely on the basis of its failure to meet such 
     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 the enactment of this Act. For purposes of the 
     previous sentence, in the case of a State that has a 2-year 
     legislative session, each year of such session shall be 
     deemed to be a separate regular session of the State 
     legislature.
       (c) Coordination of Funding for Fiscal Year 2009.--
     Notwithstanding any other provision of law, insofar as funds 
     have been appropriated under section 2104(a)(11) of the 
     Social Security Act, as amended by section 201(a) of Public 
     Law 110-173 and in effect on January 1, 2009, to provide 
     allotments to States under title XXI of the Social Security 
     Act for fiscal year 2009--
       (1) any amounts that are so appropriated that are not so 
     allotted and obligated before the date of the enactment of 
     this Act are rescinded; and
       (2) any amount provided for allotments under title XXI of 
     such Act to a State under the amendments made by this Act for 
     such fiscal year shall be reduced by the amount of such 
     appropriations so allotted and obligated before such date.
                                 ______
                                 
  SA 41. Mr. GRASSLEY (for himself, Mr. Hatch, Mr. Roberts, Mr. Vitter, 
and Mr. Chambliss) proposed an amendment to amendment SA 39 proposed by 
Mr. Reid (for Mr. Baucus) to the bill H.R. 2, to amend title XXI of the 
Social Security Act to extend and improve the Children's Health 
Insurance Program, and for other purposes; as follows:

       Strike section 214 and insert the following:

     SEC. 214. INCREASED FUNDING FOR ENROLLMENT OF UNINSURED LOW 
                   INCOME AMERICAN CHILDREN.

       Section 2105(a)(3)(E) (42 U.S.C. 1397ee(a)(3)(E)), as added 
     by section 104, is amended by adding at the end the 
     following:
       ``(iv) Increase in bonus payments for fiscal years 2012 
     through 2019.--With respect to each of fiscal years 2012 
     through 2019:

       ``(I) Clause (i) of subparagraph (B) shall be applied by 
     substituting `38 percent' for `15 percent'.
       ``(II) Clause (ii) of subparagraph (B) shall be applied by 
     substituting `70 percent' for `62.5 percent'.

                                 ______
                                 
  SA 42. Mr. DeMINT submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, add the following:

                      TITLE _--HEALTH CARE CHOICE

     SEC. _01. SHORT TITLE OF TITLE.

       This title may be cited as ``Health Care Choice Act of 
     2009''.

     SEC. _02. SPECIFICATION OF CONSTITUTIONAL AUTHORITY FOR 
                   ENACTMENT OF LAW.

       This title is enacted pursuant to the power granted 
     Congress under article I, section 8, clause 3, of the United 
     States Constitution.

     SEC. _03. FINDINGS.

       Congress finds the following:
       (1) The application of numerous and significant variations 
     in State law impacts the ability of insurers to offer, and 
     individuals to obtain, affordable individual health insurance 
     coverage, thereby impeding commerce in individual health 
     insurance coverage.
       (2) Individual health insurance coverage is increasingly 
     offered through the Internet, other electronic means, and by 
     mail, all of which are inherently part of interstate 
     commerce.
       (3) In response to these issues, it is appropriate to 
     encourage increased efficiency in the offering of individual 
     health insurance coverage through a collaborative approach by 
     the States in regulating this coverage.
       (4) The establishment of risk-retention groups has provided 
     a successful model for the sale of insurance across State 
     lines, as the acts establishing those groups allow insurance 
     to be sold in multiple States but regulated by a single 
     State.

     SEC. _04. COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH 
                   INSURANCE COVERAGE.

       (a) In General.--Title XXVII of the Public Health Service 
     Act (42 U.S.C. 300gg et seq.) is amended by adding at the end 
     the following new part:

``PART D--COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE COVERAGE

     ``SEC. 2795. DEFINITIONS.

       ``In this part:
       ``(1) Primary state.--The term `primary State' means, with 
     respect to individual health insurance coverage offered by a 
     health insurance issuer, the State designated by the issuer 
     as the State whose covered

[[Page 1627]]

     laws shall govern the health insurance issuer in the sale of 
     such coverage under this part. An issuer, with respect to a 
     particular policy, may only designate one such State as its 
     primary State with respect to all such coverage it offers. 
     Such an issuer may not change the designated primary State 
     with respect to individual health insurance coverage once the 
     policy is issued, except that such a change may be made upon 
     renewal of the policy. With respect to such designated State, 
     the issuer is deemed to be doing business in that State.
       ``(2) Secondary state.--The term `secondary State' means, 
     with respect to individual health insurance coverage offered 
     by a health insurance issuer, any State that is not the 
     primary State. In the case of a health insurance issuer that 
     is selling a policy in, or to a resident of, a secondary 
     State, the issuer is deemed to be doing business in that 
     secondary State.
       ``(3) Health insurance issuer.--The term `health insurance 
     issuer' has the meaning given such term in section 
     2791(b)(2), except that such an issuer must be licensed in 
     the primary State and be qualified to sell individual health 
     insurance coverage in that State.
       ``(4) Individual health insurance coverage.--The term 
     `individual health insurance coverage' means health insurance 
     coverage offered in the individual market, as defined in 
     section 2791(e)(1).
       ``(5) Applicable state authority.--The term `applicable 
     State authority' means, with respect to a health insurance 
     issuer in a State, the State insurance commissioner or 
     official or officials designated by the State to enforce the 
     requirements of this title for the State with respect to the 
     issuer.
       ``(6) Hazardous financial condition.--The term `hazardous 
     financial condition' means that, based on its present or 
     reasonably anticipated financial condition, a health 
     insurance issuer is unlikely to be able--
       ``(A) to meet obligations to policyholders with respect to 
     known claims and reasonably anticipated claims; or
       ``(B) to pay other obligations in the normal course of 
     business.
       ``(7) Covered laws.--
       ``(A) In general.--The term `covered laws' means the laws, 
     rules, regulations, agreements, and orders governing the 
     insurance business pertaining to--
       ``(i) individual health insurance coverage issued by a 
     health insurance issuer;
       ``(ii) the offer, sale, rating (including medical 
     underwriting), renewal, and issuance of individual health 
     insurance coverage to an individual;
       ``(iii) the provision to an individual in relation to 
     individual health insurance coverage of health care and 
     insurance related services;
       ``(iv) the provision to an individual in relation to 
     individual health insurance coverage of management, 
     operations, and investment activities of a health insurance 
     issuer; and
       ``(v) the provision to an individual in relation to 
     individual health insurance coverage of loss control and 
     claims administration for a health insurance issuer with 
     respect to liability for which the issuer provides insurance.
       ``(B) Exception.--Such term does not include any law, rule, 
     regulation, agreement, or order governing the use of care or 
     cost management techniques, including any requirement related 
     to provider contracting, network access or adequacy, health 
     care data collection, or quality assurance.
       ``(8) State.--The term `State' means the 50 States and 
     includes the District of Columbia, Puerto Rico, the Virgin 
     Islands, Guam, American Samoa, and the Northern Mariana 
     Islands.
       ``(9) Unfair claims settlement practices.--The term `unfair 
     claims settlement practices' means only the following 
     practices:
       ``(A) Knowingly misrepresenting to claimants and insured 
     individuals relevant facts or policy provisions relating to 
     coverage at issue.
       ``(B) Failing to acknowledge with reasonable promptness 
     pertinent communications with respect to claims arising under 
     policies.
       ``(C) Failing to adopt and implement reasonable standards 
     for the prompt investigation and settlement of claims arising 
     under policies.
       ``(D) Failing to effectuate prompt, fair, and equitable 
     settlement of claims submitted in which liability has become 
     reasonably clear.
       ``(E) Refusing to pay claims without conducting a 
     reasonable investigation.
       ``(F) Failing to affirm or deny coverage of claims within a 
     reasonable period of time after having completed an 
     investigation related to those claims.
       ``(G) A pattern or practice of compelling insured 
     individuals or their beneficiaries to institute suits to 
     recover amounts due under its policies by offering 
     substantially less than the amounts ultimately recovered in 
     suits brought by them.
       ``(H) A pattern or practice of attempting to settle or 
     settling claims for less than the amount that a reasonable 
     person would believe the insured individual or his or her 
     beneficiary was entitled by reference to written or printed 
     advertising material accompanying or made part of an 
     application.
       ``(I) Attempting to settle or settling claims on the basis 
     of an application that was materially altered without notice 
     to, or knowledge or consent of, the insured.
       ``(J) Failing to provide forms necessary to present claims 
     within 15 calendar days of a requests with reasonable 
     explanations regarding their use.
       ``(K) Attempting to cancel a policy in less time than that 
     prescribed in the policy or by the law of the primary State.
       ``(10) Fraud and abuse.--The term `fraud and abuse' means 
     an act or omission committed by a person who, knowingly and 
     with intent to defraud, commits, or conceals any material 
     information concerning, one or more of the following:
       ``(A) Presenting, causing to be presented or preparing with 
     knowledge or belief that it will be presented to or by an 
     insurer, a reinsurer, broker or its agent, false information 
     as part of, in support of or concerning a fact material to 
     one or more of the following:
       ``(i) An application for the issuance or renewal of an 
     insurance policy or reinsurance contract.
       ``(ii) The rating of an insurance policy or reinsurance 
     contract.
       ``(iii) A claim for payment or benefit pursuant to an 
     insurance policy or reinsurance contract.
       ``(iv) Premiums paid on an insurance policy or reinsurance 
     contract.
       ``(v) Payments made in accordance with the terms of an 
     insurance policy or reinsurance contract.
       ``(vi) A document filed with the commissioner or the chief 
     insurance regulatory official of another jurisdiction.
       ``(vii) The financial condition of an insurer or reinsurer.
       ``(viii) The formation, acquisition, merger, 
     reconsolidation, dissolution or withdrawal from one or more 
     lines of insurance or reinsurance in all or part of a State 
     by an insurer or reinsurer.
       ``(ix) The issuance of written evidence of insurance.
       ``(x) The reinstatement of an insurance policy.
       ``(B) Solicitation or acceptance of new or renewal 
     insurance risks on behalf of an insurer, reinsurer or other 
     person engaged in the business of insurance by a person who 
     knows or should know that the insurer or other person 
     responsible for the risk is insolvent at the time of the 
     transaction.
       ``(C) Transaction of the business of insurance in violation 
     of laws requiring a license, certificate of authority or 
     other legal authority for the transaction of the business of 
     insurance.
       ``(D) Attempt to commit, aiding or abetting in the 
     commission of, or conspiracy to commit the acts or omissions 
     specified in this paragraph.

     ``SEC. 2796. APPLICATION OF LAW.

       ``(a) In General.--The covered laws of the primary State 
     shall apply to individual health insurance coverage offered 
     by a health insurance issuer in the primary State and in any 
     secondary State, but only if the coverage and issuer comply 
     with the conditions of this section with respect to the 
     offering of coverage in any secondary State.
       ``(b) Exemptions From Covered Laws in a Secondary State.--
     Except as provided in this section, a health insurance issuer 
     with respect to its offer, sale, rating (including medical 
     underwriting), renewal, and issuance of individual health 
     insurance coverage in any secondary State is exempt from any 
     covered laws of the secondary State (and any rules, 
     regulations, agreements, or orders sought or issued by such 
     State under or related to such covered laws) to the extent 
     that such laws would--
       ``(1) make unlawful, or regulate, directly or indirectly, 
     the operation of the health insurance issuer operating in the 
     secondary State, except that any secondary State may require 
     such an issuer--
       ``(A) to pay, on a nondiscriminatory basis, applicable 
     premium and other taxes (including high risk pool 
     assessments) which are levied on insurers and surplus lines 
     insurers, brokers, or policyholders under the laws of the 
     State;
       ``(B) to register with and designate the State insurance 
     commissioner as its agent solely for the purpose of receiving 
     service of legal documents or process;
       ``(C) to submit to an examination of its financial 
     condition by the State insurance commissioner in any State in 
     which the issuer is doing business to determine the issuer's 
     financial condition, if--
       ``(i) the State insurance commissioner of the primary State 
     has not done an examination within the period recommended by 
     the National Association of Insurance Commissioners; and
       ``(ii) any such examination is conducted in accordance with 
     the examiners' handbook of the National Association of 
     Insurance Commissioners and is coordinated to avoid 
     unjustified duplication and unjustified repetition;
       ``(D) to comply with a lawful order issued--
       ``(i) in a delinquency proceeding commenced by the State 
     insurance commissioner if there has been a finding of 
     financial impairment under subparagraph (C); or
       ``(ii) in a voluntary dissolution proceeding;
       ``(E) to comply with an injunction issued by a court of 
     competent jurisdiction, upon a petition by the State 
     insurance commissioner alleging that the issuer is in 
     hazardous financial condition;

[[Page 1628]]

       ``(F) to participate, on a nondiscriminatory basis, in any 
     insurance insolvency guaranty association or similar 
     association to which a health insurance issuer in the State 
     is required to belong;
       ``(G) to comply with any State law regarding fraud and 
     abuse (as defined in section 2795(10)), except that if the 
     State seeks an injunction regarding the conduct described in 
     this subparagraph, such injunction must be obtained from a 
     court of competent jurisdiction;
       ``(H) to comply with any State law regarding unfair claims 
     settlement practices (as defined in section 2795(9)); or
       ``(I) to comply with the applicable requirements for 
     independent review under section 2798 with respect to 
     coverage offered in the State;
       ``(2) require any individual health insurance coverage 
     issued by the issuer to be countersigned by an insurance 
     agent or broker residing in that Secondary State; or
       ``(3) otherwise discriminate against the issuer issuing 
     insurance in both the primary State and in any secondary 
     State.
       ``(c) Clear and Conspicuous Disclosure.--A health insurance 
     issuer shall provide the following notice, in 12-point bold 
     type, in any insurance coverage offered in a secondary State 
     under this part by such a health insurance issuer and at 
     renewal of the policy, with the 5 blank spaces therein being 
     appropriately filled with the name of the health insurance 
     issuer, the name of primary State, the name of the secondary 
     State, the name of the secondary State, and the name of the 
     secondary State, respectively, for the coverage concerned:
     This policy is issued by _____ and is governed by the laws 
     and regulations of the State of _____, and it has met all the 
     laws of that State as determined by that State's Department 
     of Insurance. This policy may be less expensive than others 
     because it is not subject to all of the insurance laws and 
     regulations of the State of _____, including coverage of some 
     services or benefits mandated by the law of the State of 
     _____. Additionally, this policy is not subject to all of the 
     consumer protection laws or restrictions on rate changes of 
     the State of _____. As with all insurance products, before 
     purchasing this policy, you should carefully review the 
     policy and determine what health care services the policy 
     covers and what benefits it provides, including any 
     exclusions, limitations, or conditions for such services or 
     benefits.''.
       ``(d) Prohibition on Certain Reclassifications and Premium 
     Increases.--
       ``(1) In general.--For purposes of this section, a health 
     insurance issuer that provides individual health insurance 
     coverage to an individual under this part in a primary or 
     secondary State may not upon renewal--
       ``(A) move or reclassify the individual insured under the 
     health insurance coverage from the class such individual is 
     in at the time of issue of the contract based on the health-
     status related factors of the individual; or
       ``(B) increase the premiums assessed the individual for 
     such coverage based on a health status-related factor or 
     change of a health status-related factor or the past or 
     prospective claim experience of the insured individual.
       ``(2) Construction.--Nothing in paragraph (1) shall be 
     construed to prohibit a health insurance issuer--
       ``(A) from terminating or discontinuing coverage or a class 
     of coverage in accordance with subsections (b) and (c) of 
     section 2742;
       ``(B) from raising premium rates for all policy holders 
     within a class based on claims experience;
       ``(C) from changing premiums or offering discounted 
     premiums to individuals who engage in wellness activities at 
     intervals prescribed by the issuer, if such premium changes 
     or incentives--
       ``(i) are disclosed to the consumer in the insurance 
     contract;
       ``(ii) are based on specific wellness activities that are 
     not applicable to all individuals; and
       ``(iii) are not obtainable by all individuals to whom 
     coverage is offered;
       ``(D) from reinstating lapsed coverage; or
       ``(E) from retroactively adjusting the rates charged an 
     insured individual if the initial rates were set based on 
     material misrepresentation by the individual at the time of 
     issue.
       ``(e) Prior Offering of Policy in Primary State.--A health 
     insurance issuer may not offer for sale individual health 
     insurance coverage in a secondary State unless that coverage 
     is currently offered for sale in the primary State.
       ``(f) Licensing of Agents or Brokers for Health Insurance 
     Issuers.--Any State may require that a person acting, or 
     offering to act, as an agent or broker for a health insurance 
     issuer with respect to the offering of individual health 
     insurance coverage obtain a license from that State, with 
     commissions or other compensation subject to the provisions 
     of the laws of that State, except that a State may not impose 
     any qualification or requirement which discriminates against 
     a nonresident agent or broker.
       ``(g) Documents for Submission to State Insurance 
     Commissioner.--Each health insurance issuer issuing 
     individual health insurance coverage in both primary and 
     secondary States shall submit--
       ``(1) to the insurance commissioner of each State in which 
     it intends to offer such coverage, before it may offer 
     individual health insurance coverage in such State--
       ``(A) a copy of the plan of operation or feasibility study 
     or any similar statement of the policy being offered and its 
     coverage (which shall include the name of its primary State 
     and its principal place of business);
       ``(B) written notice of any change in its designation of 
     its primary State; and
       ``(C) written notice from the issuer of the issuer's 
     compliance with all the laws of the primary State; and
       ``(2) to the insurance commissioner of each secondary State 
     in which it offers individual health insurance coverage, a 
     copy of the issuer's quarterly financial statement submitted 
     to the primary State, which statement shall be certified by 
     an independent public accountant and contain a statement of 
     opinion on loss and loss adjustment expense reserves made 
     by--
       ``(A) a member of the American Academy of Actuaries; or
       ``(B) a qualified loss reserve specialist.
       ``(h) Power of Courts to Enjoin Conduct.--Nothing in this 
     section shall be construed to affect the authority of any 
     Federal or State court to enjoin--
       ``(1) the solicitation or sale of individual health 
     insurance coverage by a health insurance issuer to any person 
     or group who is not eligible for such insurance; or
       ``(2) the solicitation or sale of individual health 
     insurance coverage that violates the requirements of the law 
     of a secondary State which are described in subparagraphs (A) 
     through (H) of section 2796(b)(1).
       ``(i) Power of Secondary States to Take Administrative 
     Action.--Nothing in this section shall be construed to affect 
     the authority of any State to enjoin conduct in violation of 
     that State's laws described in section 2796(b)(1).
       ``(j) State Powers to Enforce State Laws.--
       ``(1) In general.--Subject to the provisions of subsection 
     (b)(1)(G) (relating to injunctions) and paragraph (2), 
     nothing in this section shall be construed to affect the 
     authority of any State to make use of any of its powers to 
     enforce the laws of such State with respect to which a health 
     insurance issuer is not exempt under subsection (b).
       ``(2) Courts of competent jurisdiction.--If a State seeks 
     an injunction regarding the conduct described in paragraphs 
     (1) and (2) of subsection (h), such injunction must be 
     obtained from a Federal or State court of competent 
     jurisdiction.
       ``(k) States' Authority to Sue.--Nothing in this section 
     shall affect the authority of any State to bring action in 
     any Federal or State court.
       ``(l) Generally Applicable Laws.--Nothing in this section 
     shall be construed to affect the applicability of State laws 
     generally applicable to persons or corporations.
       ``(m) Guaranteed Availability of Coverage to Hipaa Eligible 
     Individuals.--To the extent that a health insurance issuer is 
     offering coverage in a primary State that does not 
     accommodate residents of secondary States or does not provide 
     a working mechanism for residents of a secondary State, and 
     the issuer is offering coverage under this part in such 
     secondary State which has not adopted a qualified high risk 
     pool as its acceptable alternative mechanism (as defined in 
     section 2744(c)(2)), the issuer shall, with respect to any 
     individual health insurance coverage offered in a secondary 
     State under this part, comply with the guaranteed 
     availability requirements for eligible individuals in section 
     2741.

     ``SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR BEFORE 
                   ISSUER MAY SELL INTO SECONDARY STATES.

       ``A health insurance issuer may not offer, sell, or issue 
     individual health insurance coverage in a secondary State if 
     the State insurance commissioner does not use a risk-based 
     capital formula for the determination of capital and surplus 
     requirements for all health insurance issuers.

     ``SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

       ``(a) Right to External Appeal.--A health insurance issuer 
     may not offer, sell, or issue individual health insurance 
     coverage in a secondary State under the provisions of this 
     title unless----
       ``(1) both the secondary State and the primary State have 
     legislation or regulations in place establishing an 
     independent review process for individuals who are covered by 
     individual health insurance coverage, or
       ``(2) in any case in which the requirements of subparagraph 
     (A) are not met with respect to the either of such States, 
     the issuer provides an independent review mechanism 
     substantially identical (as determined by the applicable 
     State authority of such State) to that prescribed in the 
     `Health Carrier External Review Model Act' of the National 
     Association of Insurance Commissioners for all individuals 
     who purchase insurance coverage under the terms of this part, 
     except that, under such mechanism, the review is conducted by 
     an independent medical reviewer, or a panel of such 
     reviewers, with respect to whom the requirements of 
     subsection (b) are met.

[[Page 1629]]

       ``(b) Qualifications of Independent Medical Reviewers.--In 
     the case of any independent review mechanism referred to in 
     subsection (a)(2)--
       ``(1) In general.--In referring a denial of a claim to an 
     independent medical reviewer, or to any panel of such 
     reviewers, to conduct independent medical review, the issuer 
     shall ensure that--
       ``(A) each independent medical reviewer meets the 
     qualifications described in paragraphs (2) and (3);
       ``(B) with respect to each review, each reviewer meets the 
     requirements of paragraph (4) and the reviewer, or at least 1 
     reviewer on the panel, meets the requirements described in 
     paragraph (5); and
       ``(C) compensation provided by the issuer to each reviewer 
     is consistent with paragraph (6).
       ``(2) Licensure and expertise.--Each independent medical 
     reviewer shall be a physician (allopathic or osteopathic) or 
     health care professional who--
       ``(A) is appropriately credentialed or licensed in 1 or 
     more States to deliver health care services; and
       ``(B) typically treats the condition, makes the diagnosis, 
     or provides the type of treatment under review.
       ``(3) Independence.--
       ``(A) In general.--Subject to subparagraph (B), each 
     independent medical reviewer in a case shall--
       ``(i) not be a related party (as defined in paragraph (7));
       ``(ii) not have a material familial, financial, or 
     professional relationship with such a party; and
       ``(iii) not otherwise have a conflict of interest with such 
     a party (as determined under regulations).
       ``(B) Exception.--Nothing in subparagraph (A) shall be 
     construed to--
       ``(i) prohibit an individual, solely on the basis of 
     affiliation with the issuer, from serving as an independent 
     medical reviewer if--

       ``(I) a non-affiliated individual is not reasonably 
     available;
       ``(II) the affiliated individual is not involved in the 
     provision of items or services in the case under review;
       ``(III) the fact of such an affiliation is disclosed to the 
     issuer and the enrollee (or authorized representative) and 
     neither party objects; and
       ``(IV) the affiliated individual is not an employee of the 
     issuer and does not provide services exclusively or primarily 
     to or on behalf of the issuer;

       ``(ii) prohibit an individual who has staff privileges at 
     the institution where the treatment involved takes place from 
     serving as an independent medical reviewer merely on the 
     basis of such affiliation if the affiliation is disclosed to 
     the issuer and the enrollee (or authorized representative), 
     and neither party objects; or
       ``(iii) prohibit receipt of compensation by an independent 
     medical reviewer from an entity if the compensation is 
     provided consistent with paragraph (6).
       ``(4) Practicing health care professional in same field.--
       ``(A) In general.--In a case involving treatment, or the 
     provision of items or services--
       ``(i) by a physician, a reviewer shall be a practicing 
     physician (allopathic or osteopathic) of the same or similar 
     specialty, as a physician who, acting within the appropriate 
     scope of practice within the State in which the service is 
     provided or rendered, typically treats the condition, makes 
     the diagnosis, or provides the type of treatment under 
     review; or
       ``(ii) by a non-physician health care professional, the 
     reviewer, or at least 1 member of the review panel, shall be 
     a practicing non-physician health care professional of the 
     same or similar specialty as the non-physician health care 
     professional who, acting within the appropriate scope of 
     practice within the State in which the service is provided or 
     rendered, typically treats the condition, makes the 
     diagnosis, or provides the type of treatment under review.
       ``(B) Practicing defined.--For purposes of this paragraph, 
     the term `practicing' means, with respect to an individual 
     who is a physician or other health care professional, that 
     the individual provides health care services to individual 
     patients on average at least 2 days per week.
       ``(5) Pediatric expertise.--In the case of an external 
     review relating to a child, a reviewer shall have expertise 
     under paragraph (2) in pediatrics.
       ``(6) Limitations on reviewer compensation.--Compensation 
     provided by the issuer to an independent medical reviewer in 
     connection with a review under this section shall--
       ``(A) not exceed a reasonable level; and
       ``(B) not be contingent on the decision rendered by the 
     reviewer.
       ``(7) Related party defined.--For purposes of this section, 
     the term `related party' means, with respect to a denial of a 
     claim under a coverage relating to an enrollee, any of the 
     following:
       ``(A) The issuer involved, or any fiduciary, officer, 
     director, or employee of the issuer.
       ``(B) The enrollee (or authorized representative).
       ``(C) The health care professional that provides the items 
     or services involved in the denial.
       ``(D) The institution at which the items or services (or 
     treatment) involved in the denial are provided.
       ``(E) The manufacturer of any drug or other item that is 
     included in the items or services involved in the denial.
       ``(F) Any other party determined under any regulations to 
     have a substantial interest in the denial involved.
       ``(8) Definitions.--For purposes of this subsection:
       ``(A) Enrollee.--The term `enrollee' means, with respect to 
     health insurance coverage offered by a health insurance 
     issuer, an individual enrolled with the issuer to receive 
     such coverage.
       ``(B) Health care professional.--The term `health care 
     professional' means an individual who is licensed, 
     accredited, or certified under State law to provide specified 
     health care services and who is operating within the scope of 
     such licensure, accreditation, or certification.

     ``SEC. 2799. ENFORCEMENT.

       ``(a) In General.--Subject to subsection (b), with respect 
     to specific individual health insurance coverage the primary 
     State for such coverage has sole jurisdiction to enforce the 
     primary State's covered laws in the primary State and any 
     secondary State.
       ``(b) Secondary State's Authority.--Nothing in subsection 
     (a) shall be construed to affect the authority of a secondary 
     State to enforce its laws as set forth in the exception 
     specified in section 2796(b)(1).
       ``(c) Court Interpretation.--In reviewing action initiated 
     by the applicable secondary State authority, the court of 
     competent jurisdiction shall apply the covered laws of the 
     primary State.
       ``(d) Notice of Compliance Failure.--In the case of 
     individual health insurance coverage offered in a secondary 
     State that fails to comply with the covered laws of the 
     primary State, the applicable State authority of the 
     secondary State may notify the applicable State authority of 
     the primary State.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to individual health insurance coverage offered, 
     issued, or sold after the date that is one year after the 
     date of the enactment of this Act.
       (c) Gao Ongoing Study and Reports.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct an ongoing study concerning the effect of the 
     amendment made by subsection (a) on--
       (A) the number of uninsured and under-insured;
       (B) the availability and cost of health insurance policies 
     for individuals with pre-existing medical conditions;
       (C) the availability and cost of health insurance policies 
     generally;
       (D) the elimination or reduction of different types of 
     benefits under health insurance policies offered in different 
     States; and
       (E) cases of fraud or abuse relating to health insurance 
     coverage offered under such amendment and the resolution of 
     such cases.
       (2) Annual reports.--The Comptroller General shall submit 
     to Congress an annual report, after the end of each of the 5 
     years following the effective date of the amendment made by 
     subsection (a), on the ongoing study conducted under 
     paragraph (1).

     SEC. _05. SEVERABILITY.

       If any provision of this title or the application of such 
     provision to any person or circumstance is held to be 
     unconstitutional, the remainder of this title and the 
     application of the provisions of such to any other person or 
     circumstance shall not be affected.
                                 ______
                                 
  SA 43. Mr. DeMINT submitted an amendment intended to be proposed to 
amendment SA 39 proposed by Mr. Reid (for Mr. Baucus) to the bill H.R. 
2, to amend title XXI of the Social Security Act to extend and improve 
the Children's Health Insurance Program, and for other purposes; as 
follows:

       At the appropriate place, add the following:

     SEC. __. REQUIRED COST-SHARING FOR HIGHER INCOME INDIVIDUALS.

       Section 2103(e) (42 U.S.C. 1397cc(e)) is amended--
       (1) in paragraph (3)(B), by striking ``and (2)'' and 
     inserting ``, (2), and (5)'';
       (2) in paragraph (4), by striking ``Nothing'' and inserting 
     ``Except as provided in paragraph (5), nothing''; and
       (3) by adding at the end the following new paragraph:
       ``(5) Required cost-sharing for higher income 
     individuals.--Subject to paragraphs (1)(B) and (2), a State 
     child health plan shall impose premiums, deductibles, 
     coinsurance, and other cost-sharing (regardless of whether 
     such plan is implemented under this title, title XIX, or 
     both) for any targeted low-income child or other individual 
     enrolled in the plan whose family income exceeds 200 percent 
     of the poverty line in a manner that is consistent with the 
     authority and limitations for imposing cost-sharing under 
     section 1916A.''.
                                 ______
                                 
  SA 44. Mr. DeMINT (for himself and Mr. Vitter) submitted an amendment 
intended to be proposed by him to the

[[Page 1630]]

bill H.R. 2, to amend title XXI of the Social Security Act to extend 
and improve the Children's Health Insurance Program, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. --. PROHIBITION ON CONSIDERATION OF REVENUE PROVISIONS 
                   WITHOUT CERTIFICATION OF TAX BURDEN EFFECTS.

       (a) In General.--It shall not be in order to consider a 
     bill, resolution, amendment, or conference report that 
     proposes any provision amending the Internal Revenue Code of 
     1986 or affecting the application of such Code unless the 
     Joint Committee on Taxation provides a written certification 
     that such provision does not increase the net yearly tax 
     burden for any family whose taxable income for any taxable 
     year to which such provision applies is less than $250,000.
       (b) Supermajority Waiver and Appeal.--
       (1) Waiver.--A point of order raised under subsection (a) 
     may be waived or suspended in the Senate only by an 
     affirmative vote of two-thirds of the Members, duly chosen 
     and sworn.
       (2) Appeal.--An affirmative vote of two-thirds of the 
     Members of the Senate, duly chosen and sworn, shall be 
     required in the Senate to sustain an appeal of the ruling of 
     the Chair on a point of order raised under subsection (a).
       (c) Definition.--For purposes of this section, the term 
     ``family'' means a married couple filing jointly or an 
     individual filing as a head of household.
                                 ______
                                 
  SA 45. Mr. HATCH (for himself, Mr. Grassley, and Mr. Wicker) proposed 
an amendment to amendment SA 39 proposed by Mr. Reid (for Mr. Baucus) 
to the bill H.R. 2, to amend title XXI of the Social Security Act to 
extend and improve the Children's Health Insurance Program, and for 
other purposes; as follows:

       On page 136, between lines 15 and 16, insert the following:
       (c) Condition for Federal Matching Payments.--
       (1) In general.--Section 1903(i) (42 U.S.C. 1396b(i)) is 
     amended--
       (A) in paragraph (23), by striking ``or'' after the 
     semicolon;
       (B) in paragraph (24)(C), by striking the period and 
     inserting ``; or''; and
       (C) by inserting after paragraph (24)(C), the following:
       ``(25) with respect to amounts expended for medical 
     assistance for an immigrant child or pregnant woman under an 
     election made pursuant to paragraph (4) of subsection (v) for 
     any fiscal year quarter occurring before the first fiscal 
     year quarter for which the State demonstrates to the 
     Secretary (on the basis of the best data reasonably available 
     to the Secretary and in accordance with such techniques for 
     sampling and estimating as the Secretary determines 
     appropriate) that the State has enrolled in the State plan 
     under this title, the State child health plan under title 
     XXI, or under a waiver of either such plan, at least 95 
     percent of the children who reside in the State, whose family 
     income (as determined without regard to the application of 
     any general exclusion or disregard of a block of income that 
     is not determined by type of expense or type of income 
     (regardless of whether such an exclusion or disregard is 
     permitted under section 1902(r))) does not exceed 200 percent 
     of the poverty line (as defined in section 2110(c)(5)), and 
     who are eligible for medical assistance under the State plan 
     under this title or child health assistance or health 
     benefits coverage under the State child health plan under 
     title XXI.''.
       (2) Application to chip.--Section 2107(e)(1)(E) (42 U.S.C. 
     1397gg(e)(1)(E)) (as amended by section 503(a)(1)) is amended 
     by striking ``and (17)'' and inserting ``(17), and (25)''.
                                 ______
                                 
  SA 46. Mr. KYL submitted an amendment intended to be proposed by him 
to the bill H.R. 2, to amend title XXI of the Social Security Act to 
extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 76, after line 23, add the following:

     SEC. 116. PREVENTING SUBSTITUTION OF CHIP COVERAGE FOR 
                   PRIVATE COVERAGE.

       (a) Findings.--
       (1) Congress agrees with the President that low-income 
     children should be the first priority of all States in 
     providing child health assistance under CHIP.
       (2) Congress agrees with the President and the 
     Congressional Budget Office that the substitution of CHIP 
     coverage for private coverage occurs more frequently for 
     children in families at higher income levels.
       (3) Congress agrees with the President that it is 
     appropriate that States that expand CHIP eligibility to 
     children at higher income levels should have achieved a high 
     level of health benefits coverage for low-income children and 
     should implement strategies to address such substitution.
       (4) Congress concludes that the policies specified in this 
     section (and the amendments made by this section) are the 
     appropriate policies to address these issues.
       (b) Analyses of Best Practices and Methodology in 
     Addressing Crowd-Out.--
       (1) GAO report.--Not later than 18 months after the date of 
     the enactment of this Act, the Comptroller General of the 
     United States shall submit to the Committee on Finance of the 
     Senate and the Committee on Energy and Commerce of the House 
     of Representatives and the Secretary a report describing the 
     best practices by States in addressing the issue of CHIP 
     crowd-out. Such report shall include analyses of--
       (A) the impact of different geographic areas, including 
     urban and rural areas, on CHIP crowd-out;
       (B) the impact of different State labor markets on CHIP 
     crowd-out;
       (C) the impact of different strategies for addressing CHIP 
     crowd-out;
       (D) the incidence of crowd-out for children with different 
     levels of family income; and
       (E) the relationship (if any) between changes in the 
     availability and affordability of dependent coverage under 
     employer-sponsored health insurance and CHIP crowd-out.
       (2) IOM report on methodology.--The Secretary shall enter 
     into an arrangement with the Institute of Medicine under 
     which the Institute submits to the Committee on Finance of 
     the Senate and the Committee on Energy and Commerce of the 
     House of Representatives and the Secretary, not later than 18 
     months after the date of the enactment of this Act, a report 
     on--
       (A) the most accurate, reliable, and timely way to 
     measure--
       (i) on a State-by-State basis, the rate of public and 
     private health benefits coverage among low-income children 
     with family income that does not exceed 200 percent of the 
     poverty line; and
       (ii) CHIP crowd-out, including in the case of children with 
     family income that exceeds 200 percent of the poverty line; 
     and
       (B) the least burdensome way to gather the necessary data 
     to conduct the measurements described in subparagraph (A).
     Out of any money in the Treasury not otherwise appropriated, 
     there are hereby appropriated $2,000,000 to carry out this 
     paragraph for the period ending September 30, 2010.
       (3) Incorporation of definitions.--In this section, the 
     terms ``CHIP crowd-out'', ``children'', ``poverty line'', and 
     ``State'' have the meanings given such terms for purposes of 
     CHIP.
       (4) Definition of chip crowd-out.--Section 2110(c) (42 
     U.S.C. 1397jj(c)) is amended by adding at the end the 
     following:
       ``(9) CHIP crowd-out.--The term `CHIP crowd-out' means the 
     substitution of--
       ``(A) health benefits coverage for a child under this 
     title, for
       ``(B) health benefits coverage for the child other than 
     under this title or title XIX.''.
       (c) Development of Best Practice Recommendations.--Section 
     2107 (42 U.S.C. 1397gg) is amended by adding at the end the 
     following:
       ``(g) Development of Best Practice Recommendations.--Within 
     6 months after the date of receipt of the reports under 
     subsections (a) and (b) of section 116 of the Children's 
     Health Insurance Program Reauthorization Act of 2009, the 
     Secretary, in consultation with States, including Medicaid 
     and CHIP directors in States, shall publish in the Federal 
     Register, and post on the public website for the Department 
     of Health and Human Services--
       ``(1) recommendations regarding best practices for States 
     to use to address CHIP crowd-out; and
       ``(2) uniform standards for data collection by States to 
     measure and report--
       ``(A) health benefits coverage for children with family 
     income below 200 percent of the poverty line; and
       ``(B) on CHIP crowd-out, including for children with family 
     income that exceeds 200 percent of the poverty line.
     The Secretary, in consultation with States, including 
     Medicaid and CHIP directors in States, may from time to time 
     update the best practice recommendations and uniform 
     standards set published under paragraphs (1) and (2) and 
     shall provide for publication and posting of such updated 
     recommendations and standards.''.
       (d) Requirement To Address CHIP Crowd-Out; Secretarial 
     Review.--Section 2106 (42 U.S.C. 1397ff) is amended by adding 
     at the end the following:
       ``(f) Requirement To Address CHIP Crowd-Out; Secretarial 
     Review.--
       ``(1) In general.--Not later than 6 months after the best 
     practice application date described in paragraph (2), each 
     State that has a State child health plan shall submit to the 
     Secretary a State plan amendment describing how the State--
       ``(A) will address CHIP crowd-out; and
       ``(B) will incorporate recommended best practices referred 
     to in such paragraph.
       ``(2) Best practice application date.--The best practice 
     application date described in this paragraph is the date that 
     is 6 months after the date of publication of recommendations 
     regarding best practices under section 2107(g)(1).
       ``(3) Secretarial review.--The Secretary shall--

[[Page 1631]]

       ``(A) review each State plan amendment submitted under 
     paragraph (1);
       ``(B) determine whether the amendment incorporates 
     recommended best practices referred to in paragraph (2);
       ``(C) in the case of a higher income eligibility State (as 
     defined in section 2105(c)(9)(B)), determine whether the 
     State meets the enrollment targets required under reference 
     section 2105(c)(9)(C); and
       ``(D) notify the State of such determinations.''.
       (e) Limitation on Payments for States Covering Higher 
     Income Children.--
       (1) In general.--Section 2105(c) (42 U.S.C. 1397ee(c)), as 
     amended by section 114(a), is amended by adding at the end 
     the following new paragraph:
       ``(9) Limitation on payments for states covering higher 
     income children.--
       ``(A) Determinations.--
       ``(i) In general.--The Secretary shall determine, for each 
     State that is a higher income eligibility State as of April 1 
     of 2011 and each subsequent year, whether the State meets the 
     target rate of coverage of low-income children required under 
     subparagraph (C) and shall notify the State in that month of 
     such determination.
       ``(ii) Determination of failure.--If the Secretary 
     determines in such month that a higher income eligibility 
     State does not meet such target rate of coverage, subject to 
     subparagraph (E), no payment shall be made as of October 1 of 
     such year on or after October 1, 2011, under this section for 
     child health assistance provided for higher-income children 
     (as defined in subparagraph (D)) under the State child health 
     plan unless and until the State establishes it is in 
     compliance with such requirement.
       ``(B) Higher income eligibility state.--A higher income 
     eligibility State described in this clause is a State that--
       ``(i) applies under its State child health plan an 
     eligibility income standard for targeted low-income children 
     that exceeds 300 percent of the poverty line; or
       ``(ii) because of the application of a general exclusion of 
     a block of income that is not determined by type of expense 
     or type of income, applies an effective income standard under 
     the State child health plan for such children that exceeds 
     300 percent of the poverty line. 
       ``(C) Requirement for target rate of coverage of low-income 
     children.--
       ``(i) In general.--The requirement of this subparagraph for 
     a State is that the rate of health benefits coverage (both 
     private and public) for low-income children in the State is 
     not statistically significantly (at a p=0.05 level) less than 
     the target rate of coverage specified in clause (ii).
       ``(ii) Target rate.--The target rate of coverage specified 
     in this clause is the average rate (determined by the 
     Secretary) of health benefits coverage (both private and 
     public) as of January 1, 2011, among the 10 of the 50 States 
     and the District of Columbia with the highest percentage of 
     health benefits coverage (both private and public) for low-
     income children.
       ``(iii) Standards for data.--In applying this subparagraph, 
     rates of health benefits coverage for States shall be 
     determined using the uniform standards identified by the 
     Secretary under section 2107(g)(2).
       ``(D) Higher-income child.--For purposes of this paragraph, 
     the term `higher income child' means, with respect to a State 
     child health plan, a targeted low-income child whose family 
     income--
       ``(i) exceeds 300 percent of the poverty line; or
       ``(ii) would exceed 300 percent of the poverty line if 
     there were not taken into account any general exclusion 
     described in subparagraph (B)(ii).
       ``(E) Notice and opportunity to comply with target rate.--
     If the Secretary makes a determination described in 
     subparagraph (A)(ii) in April of a year, the Secretary--
       ``(i) shall provide the State with the opportunity to 
     submit and implement a corrective action plan for the State 
     to come into compliance with the requirement of subparagraph 
     (C) before October 1 of such year;
       ``(ii) shall not effect a denial of payment under 
     subparagraph (A) on the basis of such determination before 
     October 1 of such year; and
       ``(iii) shall not effect such a denial if the Secretary 
     determines that there is a reasonable likelihood that the 
     implementation of such a correction action plan will bring 
     the State into compliance with the requirement of 
     subparagraph (C).''.
       (2) Construction.--Nothing in the amendment made by 
     paragraph (1) or this section this shall be construed as 
     authorizing the Secretary to limit payments under title XXI 
     of the Social Security Act in the case of a State that is not 
     a higher income eligibility State (as defined in section 
     2105(c)(9)(B) of such Act, as added by paragraph (1)).
       (f) Treatment of Medical Support Orders.--Section 2102(b) 
     (42 U.S.C. 1397bb(c)) is amended by adding at the end the 
     following:
       ``(5) Treatment of medical support orders.--
       ``(A) In general.--Nothing in this title shall be construed 
     to allow the Secretary to require that a State deny 
     eligibility for child health assistance to a child who is 
     otherwise eligible on the basis of the existence of a valid 
     medical support order being in effect.
       ``(B) State election.--A State may elect to limit 
     eligibility for child health assistance to a targeted low-
     income child on the basis of the existence of a valid medical 
     support order on the child's behalf, but only if the State 
     does not deny such eligibility for a child on such basis if 
     the child asserts that the order is not being complied with 
     for any of the reasons described in subparagraph (C) unless 
     the State demonstrates that none of such reasons applies in 
     the case involved.
       ``(C) Reasons for noncompliance.--The reasons described in 
     this subparagraph for noncompliance with a medical support 
     order with respect to a child are that the child is not being 
     provided health benefits coverage pursuant to such order 
     because--
       ``(i) of failure of the noncustodial parent to comply with 
     the order;
       ``(ii) of the failure of an employer, group health plan or 
     health insurance issuer to comply with such order; or
       ``(iii) the child resides in a geographic area in which 
     benefits under the health benefits coverage are generally 
     unavailable.''.
       (g) Effective Date of Amendments; Consistency of 
     Policies.--The amendments made by this section shall take 
     effect as if enacted on August 16, 2007. The Secretary may 
     not impose (or continue in effect) any requirement, prevent 
     the implementation of any provision, or condition the 
     approval of any provision under any State child health plan, 
     State plan amendment, or waiver request on the basis of any 
     policy or interpretation relating to CHIP crowd-out, 
     coordination with other sources of coverage, target rate of 
     coverage, or medical support order other than under the 
     amendments made by this section. In the case of a State plan 
     amendment which was denied on or after August 16, 2007, on 
     the basis of any such policy or interpretation in effect 
     before the date of the enactment of this Act, if the State 
     submits a modification of such State plan amendment that 
     complies with title XXI of the Social Security Act as amended 
     by this Act, such submitted State plan amendment, as so 
     modified, shall be considered as if it had been submitted (as 
     so modified) as of the date of its original submission, but 
     such State plan amendment shall not be effective before the 
     date of the enactment of this Act.
                                 ______
                                 
  SA 47. Mr. COBURN (for himself and Mr. Thune) submitted an amendment 
intended to be proposed by him to the bill H.R. 2, to amend title XXI 
of the Social Security Act to extend and improve the Children's Health 
Insurance Program, and for other purposes; which was ordered to lie on 
the table; as follows:

       On page 153, between lines 3 and 4, insert the following:
       (c) Required Offering of Premium Assistance for Coverage of 
     Children Through Private Plans Under SCHIP and Medicaid if 
     the State Expands Their Program Beyond Current Eligibility 
     Levels.--
       (1) In general.--Section 2105(c) (42 U.S.C. 1397ee(c)), as 
     amended by section 601, is amended by adding at the end the 
     following:
       ``(12) Required offering of premium assistance.--
       ``(A) In general.--Notwithstanding any other provision of 
     this title, the child health assistance provided to any child 
     whose family income exceeds the income eligibility level in 
     effect under the State children's plan as of January 1, 2009, 
     shall consist of a State premium assistance subsidy (as 
     defined in subparagraph (C)) for qualified coverage (as 
     defined in subparagraph (B)) in accordance with the 
     requirements of this paragraph.
       ``(B) Qualified coverage.--In this paragraph, the term 
     `qualified coverage' means the following:
       ``(i) Qualified employer sponsored coverage.--

       ``(I) In general.--A group health plan or health insurance 
     coverage offered through an employer that is--

       ``(aa) substantially equivalent to the benefits coverage in 
     a benchmark benefit package described in section 2103(b) or 
     benchmark-equivalent coverage that meets the requirements of 
     section 2103(a)(2);
       ``(bb) made similarly available to all of the employer's 
     employees and for which the employer makes a contribution to 
     the premium that is not less for employees receiving a 
     premium assistance subsidy under any option available under 
     the State child health plan under this title or the State 
     plan under title XIX to provide such assistance than the 
     employer contribution provided for all other employees; and
       ``(cc) cost-effective, as determined under subclause (II).

       ``(II) Cost-effectiveness.--A group health plan or health 
     insurance coverage offered through an employer shall be 
     considered to be cost-effective if--

       ``(aa) the marginal premium cost to purchase family 
     coverage through the employer is less than the State cost of 
     providing child health assistance through the State child 
     health plan for all the children in the family who are 
     targeted low-income children; or
       ``(bb) the marginal premium cost between individual 
     coverage and purchasing family coverage through the employer 
     is not greater than 175 percent of the cost to the State

[[Page 1632]]

     to provide child health assistance through the State child 
     health plan for a targeted low-income child.
       ``(ii) Qualified non-group coverage.--Health insurance 
     coverage offered to individuals in the non-group health 
     insurance market that is substantially equivalent to the 
     benefits coverage in a benchmark benefit package described in 
     section 2103(b) or benchmark-equivalent coverage that meets 
     the requirements of section 2103(a)(2).
       ``(iii) High deductible health plan.--A high deductible 
     health plan (as defined in section 223(c)(2) of the Internal 
     Revenue Code of 1986) purchased through a health savings 
     account (as defined under section 223(d) of such Code).
       ``(C) Premium assistance subsidy.--
       ``(i) In general.--In this paragraph, the term `premium 
     assistance subsidy' means, with respect to a targeted low-
     income child, the amount equal to the difference between the 
     employee contribution required for enrollment only of the 
     employee under qualified employer sponsored coverage and the 
     employee contribution required for enrollment of the employee 
     and the child in such coverage, less any applicable premium 
     cost-sharing applied under the State child health plan, 
     subject to the annual aggregate cost-sharing limit applied 
     under section 2103(e)(3)(B).
       ``(ii) State payment option.--Subject to clause (iii), a 
     State may provide a premium assistance subsidy directly to an 
     employer or as reimbursement to an employee for out-of-pocket 
     expenditures.
       ``(iii) Requirement for direct payment to employee.--A 
     State shall not pay a premium assistance subsidy directly to 
     the employee, unless the State has established procedures to 
     ensure that the targeted low-income child on whose behalf 
     such payments are made are actually enrolled in the qualified 
     employer sponsored coverage.
       ``(iv) Treatment as child health assistance.--Expenditures 
     for the provision of premium assistance subsidies shall be 
     considered child health assistance described in paragraph 
     (1)(C) of subsection (a) for purposes of making payments 
     under that subsection.
       ``(v) State option to require acceptance of subsidy.--A 
     State may condition the provision of child health assistance 
     under the State child health plan for a targeted low-income 
     child on the receipt of a premium assistance subsidy for 
     enrollment in qualified employer sponsored coverage if the 
     State determines the provision of such a subsidy to be more 
     cost-effective in accordance with subparagraph (B)(ii).
       ``(vi) Not treated as income.--Notwithstanding any other 
     provision of law, a premium assistance subsidy provided in 
     accordance with this paragraph shall not be treated as income 
     to the child or the parent of the child for whom such subsidy 
     is provided.
       ``(D) No requirement to provide supplemental coverage for 
     benefits and additional cost-sharing protection provided 
     under the state child health plan.--
       ``(i) In general.--A State that elects the option to 
     provide a premium assistance subsidy under this paragraph 
     shall not be required to provide a targeted low-income child 
     enrolled in qualified employer sponsored coverage with 
     supplemental coverage for items or services that are not 
     covered, or are only partially covered, under the qualified 
     employer sponsored coverage or cost-sharing protection other 
     than the protection required under section 2103(e)(3)(B).
       ``(ii) Notice of cost-sharing requirements.--A State shall 
     provide a targeted low-income child or the parent of such a 
     child (as appropriate) who is provided with a premium 
     assistance subsidy in accordance with this paragraph with 
     notice of the cost-sharing requirements and limitations 
     imposed under the qualified employer sponsored coverage in 
     which the child is enrolled upon the enrollment of the child 
     in such coverage and annually thereafter.
       ``(iii) Record keeping requirements.--A State may require a 
     parent of a targeted low-income child that is enrolled in 
     qualified employer-sponsored coverage to bear the 
     responsibility for keeping track of out-of-pocket 
     expenditures incurred for cost-sharing imposed under such 
     coverage and to notify the State when the limit on such 
     expenditures imposed under section 2103(e)(3)(B) has been 
     reached for a year from the effective date of enrollment for 
     such year.
       ``(iv) State option for reimbursement.--A State may 
     retroactively reimburse a parent of a targeted low-income 
     child for out-of-pocket expenditures incurred after reaching 
     the 5 percent cost-sharing limitation imposed under section 
     2103(e)(3)(B) for a year.
       ``(E) 6-month waiting period required.--A State shall 
     impose at least a 6-month waiting period from the time an 
     individual is enrolled in private health insurance prior to 
     the provision of a premium assistance subsidy for a targeted 
     low-income child in accordance with this paragraph.
       ``(F) Non application of waiting period for enrollment in 
     the state medicaid plan or the state child health plan.--A 
     targeted low-income child provided a premium assistance 
     subsidy in accordance with this paragraph who loses 
     eligibility for such subsidy shall not be treated as having 
     been enrolled in private health insurance coverage for 
     purposes of applying any waiting period imposed under the 
     State child health plan or the State plan under title XIX for 
     the enrollment of the child under such plan.
       ``(G) Assurance of special enrollment period under group 
     health plans in case of eligibility for premium subsidy 
     assistance.--No payment shall be made under subsection (a) 
     for amounts expended for the provision of premium assistance 
     subsidies under this paragraph unless a State provides 
     assurances to the Secretary that the State has in effect laws 
     requiring a group health plan, a health insurance issuer 
     offering group health insurance coverage in connection with a 
     group health plan, and a self-funded health plan, to permit 
     an employee who is eligible, but not enrolled, for coverage 
     under the terms of the plan (or a child of such an employee 
     if the child is eligible, but not enrolled, for coverage 
     under such terms) to enroll for coverage under the terms of 
     the plan if the employee's child becomes eligible for a 
     premium assistance subsidy under this paragraph.
       ``(H) No effect on previously approved premium assistance 
     programs.--Nothing in this paragraph shall be construed as 
     limiting the authority of a State to offer premium assistance 
     under section 1906, a waiver described in paragraph (2)(B) or 
     (3), a waiver approved under section 1115, or other authority 
     in effect on February 1, 2009.
       ``(I) Notice of availability.--A State shall--
       ``(i) include on any application or enrollment form for 
     child health assistance a notice of the availability of 
     premium assistance subsidies for the enrollment of targeted 
     low-income children in qualified employer sponsored coverage;
       ``(ii) provide, as part of the application and enrollment 
     process under the State child health plan, information 
     describing the availability of such subsidies and how to 
     elect to obtain such a subsidy; and
       ``(iii) establish such other procedures as the State 
     determines necessary to ensure that parents are informed of 
     the availability of such subsidies under the State child 
     health plan.''.
       (2) Application to medicaid.--Section 1906 (42 U.S.C. 
     1396e) is amended by inserting after subsection (c) the 
     following:
       ``(d) The provisions of section 2105(c)(12) shall apply to 
     a child who is eligible for medical assistance under the 
     State plan in the same manner as such provisions apply to a 
     targeted low-income child under a State child health plan 
     under title XXI. Section 1902(a)(34) shall not apply to a 
     child who is provided a premium assistance subsidy under the 
     State plan in accordance with the preceding sentence.''.
                                 ______
                                 
  SA 48. Mr. COBURN submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. COMPLIANCE WITH STATE PARENTAL NOTIFICATION AND 
                   CONSENT LAWS.

       Notwithstanding any other provision of law, no Federal 
     funds shall be made available under this Act (or an amendment 
     made by this Act) to a health care provider to reimburse such 
     provider for services provided to a minor unless such 
     provider complies with all applicable parental notification 
     and consent laws of the State of residence of the minor.
                                 ______
                                 
  SA 49. Mr. COBURN submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       Strike section 602 and insert the following:

     SEC. 602. LIMITATION ON EXPANSION.

       Section 2105(c)(8) (42 U.S.C. 1397ee(c)(8)), as added by 
     section 114(a), is amended by adding at the end the 
     following:
       ``(C) Requirement.--Notwithstanding subparagraphs (A) and 
     (B), on or after the date of enactment of this subparagraph, 
     the Secretary may not approve a State plan amendment or 
     waiver for child health assistance or health benefits to 
     children whose family income exceeds 300 percent of the 
     poverty line unless the improper payment rate for Medicaid 
     and CHIP (as measured by the payment error rate measurement 
     (PERM)) is equal to or is less than 3.5 percent.''.
                                 ______
                                 
  SA 50. Mr. COBURN submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the end of section 601, add the following:
       (g) Time for Promulgation of Final Rule.--The final rule 
     implementing the

[[Page 1633]]

     PERM requirements under subsection (b) shall be promulgated 
     not later than 6 months after the date of enactment of this 
     Act.
                                 ______
                                 
  SA 51. Mr. GRASSLEY submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 93, between lines 16 and 17, insert the following:

       ``(VI) Attestation.--The State requires that an application 
     for medical assistance under this title or for child health 
     assistance under title XXI shall not be complete until the 
     parent or guardian of the child for whose eligibility the 
     State is relying on a finding from an Express Lane agency 
     attests under penalty of perjury that the information 
     provided to verify the citizenship or nationality of the 
     child is accurate, to the best of the parent's or guardian's 
     knowledge.

                                 ______
                                 
  SA 52. Mr. GRASSLEY submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 130, between lines 7 and 8, insert the following:
       (d) GAO Study and Report.--The Comptroller General or the 
     United States shall study and report to Congress on the 
     extent to which States use the option to provide presumptive 
     eligibility for medical assistance under Medicaid or child 
     health assistance under CHIP to avoid complying with the 
     verification of citizenship or nationality documentation 
     requirements of section 1903(x) of the Social Security Act or 
     any other eligibility requirements for receipt of medical 
     assistance or child health assistance.
                                 ______
                                 
  SA 53. Mr. GRASSLEY submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 93, between lines 16 and 17, insert the following:

       ``(VI) Notice and affirmative consent.--The State requires 
     an Express Lane Agency to provide affirmative notice and 
     obtain consent in the form of a signature from all potential 
     enrollees in the State plan under this title or title XXI (or 
     the parent or guardian of a potential enrollee, in the case 
     of a child under age 18) that the information gathered for 
     purposes of applying for a specific program administered by 
     the Express Lane Agency may also be used for purposes of 
     determining one or more components of eligibility for medical 
     assistance under this title or for child health assistance 
     under title XXI.

                                 ______
                                 
  SA 54. Mr. GRASSLEY submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 93, lines 12 and 13, strike ``1902(a)(46)(B) or 
     2105(c)(9), as applicable'' and insert ``1903(x)''.
                                 ______
                                 
  SA 55. Mr. GRASSLEY submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       Beginning on page 121, strike line 20, and all that follows 
     through page 122, line 20, and insert the following:
       ``(B) Payments under the State plan for providing medical 
     assistance to individuals who provided inconsistent 
     information and were provided with a reasonable period of 
     time to resolve the inconsistency under this subsection or 
     under section 1903(x)(4) shall be included in the 
     determination of the State's erroneous excess payments for 
     medical assistance ratio under section 1903(u).
                                 ______
                                 
  SA 56. Mr. GRASSLEY submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 135, strike lines 14 through 20, and insert the 
     following:
       ``(B) In the case of a State that has elected to provide 
     medical assistance to a category of individuals under 
     subparagraph (A), the Secretary may impose a debt under an 
     affidavit of support against any sponsor of such an 
     individual on the basis of the provision of medical 
     assistance to such individual, consisting of all or a portion 
     of the cost of providing such assistance, which may include a 
     reasonable fee, and which shall be considered as an 
     unreimbursed cost, subject to such limit on the total amount 
     of debt as the Secretary may establish.
                                 ______
                                 
  SA 57. Mr. GRASSLEY submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       Strike section 601.
                                 ______
                                 
  SA 58. Mr. WEBB (for himself, Mrs. Hagan, and Mr. Sanders) submitted 
an amendment intended to be proposed by him to the bill H.R. 2, to 
amend title XXI of the Social Security Act to extend and improve the 
Children's Health Insurance Program, and for other purposes; which was 
ordered to lie on the table; as follows:

       Beginning on page 271, line 9, strike all through page 273, 
     line 8, and insert the following:

     SEC. 700. INCOME OF PARTNERS FOR PERFORMING INVESTMENT 
                   MANAGEMENT SERVICES TREATED AS ORDINARY INCOME 
                   RECEIVED FOR PERFORMANCE OF SERVICES.

       (a) In General.--Part I of subchapter K of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new section:

     ``SEC. 710. SPECIAL RULES FOR PARTNERS PROVIDING INVESTMENT 
                   MANAGEMENT SERVICES TO PARTNERSHIP.

       ``(a) Treatment of Distributive Share of Partnership 
     Items.--For purposes of this title, in the case of an 
     investment services partnership interest--
       ``(1) In general.--Notwithstanding section 702(b)--
       ``(A) any net income with respect to such interest for any 
     partnership taxable year shall be treated as ordinary income 
     for the performance of services, and
       ``(B) any net loss with respect to such interest for such 
     year, to the extent not disallowed under paragraph (2) for 
     such year, shall be treated as an ordinary loss.

     All items of income, gain, deduction, and loss which are 
     taken into account in computing net income or net loss shall 
     be treated as ordinary income or ordinary loss (as the case 
     may be).
       ``(2) Treatment of losses.--
       ``(A) Limitation.--Any net loss with respect to such 
     interest shall be allowed for any partnership taxable year 
     only to the extent that such loss does not exceed the excess 
     (if any) of--
       ``(i) the aggregate net income with respect to such 
     interest for all prior partnership taxable years, over
       ``(ii) the aggregate net loss with respect to such interest 
     not disallowed under this subparagraph for all prior 
     partnership taxable years.
       ``(B) Carryforward.--Any net loss for any partnership 
     taxable year which is not allowed by reason of subparagraph 
     (A) shall be treated as an item of loss with respect to such 
     partnership interest for the succeeding partnership taxable 
     year.
       ``(C) Basis adjustment.--No adjustment to the basis of a 
     partnership interest shall be made on account of any net loss 
     which is not allowed by reason of subparagraph (A).
       ``(D) Exception for basis attributable to purchase of a 
     partnership interest.--In the case of an investment services 
     partnership interest acquired by purchase, paragraph (1)(B) 
     shall not apply to so much of any net loss with respect to 
     such interest for any taxable year as does not exceed the 
     excess of--
       ``(i) the basis of such interest immediately after such 
     purchase, over
       ``(ii) the aggregate net loss with respect to such interest 
     to which paragraph (1)(B) did not apply by reason of this 
     subparagraph for all prior taxable years.

     Any net loss to which paragraph (1)(B) does not apply by 
     reason of this subparagraph shall not be taken into account 
     under subparagraph (A).
       ``(E) Prior partnership years.--Any reference in this 
     paragraph to prior partnership taxable years shall only 
     include prior partnership taxable years to which this section 
     applies.
       ``(3) Net income and loss.--For purposes of this section--
       ``(A) Net income.--The term `net income' means, with 
     respect to any investment services partnership interest, for 
     any partnership taxable year, the excess (if any) of--
       ``(i) all items of income and gain taken into account by 
     the holder of such interest

[[Page 1634]]

     under section 702 with respect to such interest for such 
     year, over
       ``(ii) all items of deduction and loss so taken into 
     account.
       ``(B) Net loss.--The term `net loss' means with respect to 
     such interest for such year, the excess (if any) of the 
     amount described in subparagraph (A)(ii) over the amount 
     described in subparagraph (A)(i).
       ``(b) Dispositions of Partnership Interests.--
       ``(1) Gain.--Any gain on the disposition of an investment 
     services partnership interest shall be treated as ordinary 
     income for the performance of services.
       ``(2) Loss.--Any loss on the disposition of an investment 
     services partnership interest shall be treated as an ordinary 
     loss to the extent of the excess (if any) of--
       ``(A) the aggregate net income with respect to such 
     interest for all partnership taxable years, over
       ``(B) the aggregate net loss with respect to such interest 
     allowed under subsection (a)(2) for all partnership taxable 
     years.
       ``(3) Disposition of portion of interest.--In the case of 
     any disposition of an investment services partnership 
     interest, the amount of net loss which otherwise would have 
     (but for subsection (a)(2)(C)) applied to reduce the basis of 
     such interest shall be disregarded for purposes of this 
     section for all succeeding partnership taxable years.
       ``(4) Distributions of partnership property.--In the case 
     of any distribution of property by a partnership with respect 
     to any investment services partnership interest held by a 
     partner--
       ``(A) the excess (if any) of--
       ``(i) the fair market value of such property at the time of 
     such distribution, over
       ``(ii) the adjusted basis of such property in the hands of 
     the partnership,
     shall be taken into account as an increase in such partner's 
     distributive share of the taxable income of the partnership 
     (except to the extent such excess is otherwise taken into 
     account in determining the taxable income of the 
     partnership),
       ``(B) such property shall be treated for purposes of 
     subpart B of part II as money distributed to such partner in 
     an amount equal to such fair market value, and
       ``(C) the basis of such property in the hands of such 
     partner shall be such fair market value.

     Subsection (b) of section 734 shall be applied without regard 
     to the preceding sentence.
       ``(5) Application of section 751.--In applying section 
     751(a), an investment services partnership interest shall be 
     treated as an inventory item.
       ``(c) Investment Services Partnership Interest.--For 
     purposes of this section--
       ``(1) In general.--The term `investment services 
     partnership interest' means any interest in a partnership 
     which is held by any person if such person provides (directly 
     or indirectly) a substantial quantity of any of the following 
     services with respect to the assets of the partnership in the 
     conduct of the trade or business of providing such services:
       ``(A) Advising as to the advisability of investing in, 
     purchasing, or selling any specified asset.
       ``(B) Managing, acquiring, or disposing of any specified 
     asset.
       ``(C) Arranging financing with respect to acquiring 
     specified assets.
       ``(D) Any activity in support of any service described in 
     subparagraphs (A) through (C).
     For purposes of this paragraph, the term `specified asset' 
     means securities (as defined in section 475(c)(2) without 
     regard to the last sentence thereof), real estate, 
     commodities (as defined in section 475(e)(2))), or options or 
     derivative contracts with respect to securities (as so 
     defined), real estate, or commodities (as so defined).
       ``(2) Exception for certain capital interests.--
       ``(A) In general.--If--
       ``(i) a portion of an investment services partnership 
     interest is acquired on account of a contribution of invested 
     capital, and
       ``(ii) the partnership makes a reasonable allocation of 
     partnership items between the portion of the distributive 
     share that is with respect to invested capital and the 
     portion of such distributive share that is not with respect 
     to invested capital,

     then subsection (a) shall not apply to the portion of the 
     distributive share that is with respect to invested capital. 
     An allocation will not be treated as reasonable for purposes 
     of this subparagraph if such allocation would result in the 
     partnership allocating a greater portion of income to 
     invested capital than any other partner not providing 
     services would have been allocated with respect to the same 
     amount of invested capital.
       ``(B) Special rule for dispositions.--In any case to which 
     subparagraph (A) applies, subsection (b) shall not apply to 
     any gain or loss allocable to invested capital. The portion 
     of any gain or loss attributable to invested capital is the 
     proportion of such gain or loss which is based on the 
     distributive share of gain or loss that would have been 
     allocable to invested capital under subparagraph (A) if the 
     partnership sold all of its assets immediately before the 
     disposition.
       ``(C) Invested capital.--For purposes of this paragraph, 
     the term `invested capital' means, the fair market value at 
     the time of contribution of any money or other property 
     contributed to the partnership.
       ``(D) Treatment of certain loans.--
       ``(i) Proceeds of partnership loans not treated as invested 
     capital of service providing partners.--For purposes of this 
     paragraph, an investment services partnership interest shall 
     not be treated as acquired on account of a contribution of 
     invested capital to the extent that such capital is 
     attributable to the proceeds of any loan or other advance 
     made or guaranteed, directly or indirectly, by any partner or 
     the partnership.
       ``(ii) Loans from nonservice providing partners to the 
     partnership treated as invested capital.--For purposes of 
     this paragraph, any loan or other advance to the partnership 
     made or guaranteed, directly or indirectly, by a partner not 
     providing services to the partnership shall be treated as 
     invested capital of such partner and amounts of income and 
     loss treated as allocable to invested capital shall be 
     adjusted accordingly.
       ``(d) Other Income and Gain in Connection With Investment 
     Management Services.--
       ``(1) In general.--If--
       ``(A) a person performs (directly or indirectly) investment 
     management services for any entity,
       ``(B) such person holds a disqualified interest with 
     respect to such entity, and
       ``(C) the value of such interest (or payments thereunder) 
     is substantially related to the amount of income or gain 
     (whether or not realized) from the assets with respect to 
     which the investment management services are performed,

     any income or gain with respect to such interest shall be 
     treated as ordinary income for the performance of services. 
     Rules similar to the rules of subsection (c)(2) shall apply 
     where such interest was acquired on account of invested 
     capital in such entity.
       ``(2) Definitions.--For purposes of this subsection--
       ``(A) Disqualified interest.--The term `disqualified 
     interest' means, with respect to any entity--
       ``(i) any interest in such entity other than indebtedness,
       ``(ii) convertible or contingent debt of such entity,
       ``(iii) any option or other right to acquire property 
     described in clause (i) or (ii), and
       ``(iv) any derivative instrument entered into (directly or 
     indirectly) with such entity or any investor in such entity.

     Such term shall not include a partnership interest and shall 
     not include stock in a taxable corporation.
       ``(B) Taxable corporation.--The term `taxable corporation' 
     means--
       ``(i) a domestic C corporation, or
       ``(ii) a foreign corporation subject to a comprehensive 
     foreign income tax.
       ``(C) Investment management services.--The term `investment 
     management services' means a substantial quantity of any of 
     the services described in subsection (c)(1) which are 
     provided in the conduct of the trade or business of providing 
     such services.
       ``(D) Comprehensive foreign income tax.--The term 
     `comprehensive foreign income tax' means, with respect to any 
     foreign corporation, the income tax of a foreign country if--
       ``(i) such corporation is eligible for the benefits of a 
     comprehensive income tax treaty between such foreign country 
     and the United States, or
       ``(ii) such corporation demonstrates to the satisfaction of 
     the Secretary that such foreign country has a comprehensive 
     income tax.
       ``(e) Regulations.--The Secretary shall prescribe such 
     regulations as are necessary or appropriate to carry out the 
     purposes of this section, including regulations to--
       ``(1) prevent the avoidance of the purposes of this 
     section, and
       ``(2) coordinate this section with the other provisions of 
     this subchapter.
       ``(f) Cross Reference.--For 40 percent no fault penalty on 
     certain underpayments due to the avoidance of this section, 
     see section 6662.''.
       (b) Application to Real Estate Investment Trusts.--
       (1) In general.--Subsection (c) of section 856 of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new paragraph:
       ``(9) Exception from recharacterization of income from 
     investment services partnership interests.--
       ``(A) In general.--Paragraphs (2), (3), and (4) shall be 
     applied without regard to section 710 (relating to special 
     rules for partners providing investment management services 
     to partnership).
       ``(B) Special rule for partnerships owned by reits.--
     Section 7704 shall be applied without regard to section 710 
     in the case of a partnership which meets each of the 
     following requirements:
       ``(i) Such partnership is treated as publicly traded under 
     section 7704 solely by reason of interests in such 
     partnership being convertible into interests in a real estate 
     investment trust which is publicly traded.
       ``(ii) 50 percent or more of the capital and profits 
     interests of such partnership are owned, directly or 
     indirectly, at all times during the taxable year by such real 
     estate investment trust (determined with the application of 
     section 267(c)).

[[Page 1635]]

       ``(iii) Such partnership meets the requirements of 
     paragraphs (2), (3), and (4) (applied without regard to 
     section 710).''.
       (2) Conforming amendment.--Paragraph (4) of section 7704(d) 
     of such Code is amended by inserting ``(determined without 
     regard to section 856(c)(8))'' after ``856(c)(2)''.
       (c) Imposition of Penalty on Underpayments.--
       (1) In general.--Subsection (b) of section 6662 of the 
     Internal Revenue Code of 1986 is amended by inserting after 
     paragraph (5) the following new paragraph:
       ``(6) The application of subsection (d) of section 710 or 
     the regulations prescribed under section 710(e) to prevent 
     the avoidance of the purposes of section 710.''.
       (2) Amount of penalty.--
       (A) In general.--Section 6662 of such Code is amended by 
     adding at the end the following new subsection:
       ``(i) Increase in Penalty in Case of Property Transferred 
     for Investment Management Services.--In the case of any 
     portion of an underpayment to which this section applies by 
     reason of subsection (b)(6), subsection (a) shall be applied 
     with respect to such portion by substituting `40 percent' for 
     `20 percent'.''.
       (B) Conforming amendments.--Subparagraph (B) of section 
     6662A(e)(2) of such Code is amended--
       (i) by striking ``section 6662(h)'' and inserting 
     ``subsection (h) or (i) of section 6662'', and
       (ii) by striking ``gross valuation misstatement penalty'' 
     in the heading and inserting ``certain increased underpayment 
     penalties''.
       (3) Reasonable cause exception not applicable.--Subsection 
     (c) of section 6664 of such Code is amended--
       (A) by redesignating paragraphs (2) and (3) as paragraphs 
     (3) and (4), respectively,
       (B) by striking ``paragraph (2)'' in paragraph (4), as so 
     redesignated, and inserting ``paragraph (3)'', and
       (C) by inserting after paragraph (1) the following new 
     paragraph:
       ``(2) Exception.--Paragraph (1) shall not apply to any 
     portion of an underpayment to which this section applies by 
     reason of subsection (b)(6).''.
       (d) Conforming Amendments.--
       (1) Subsection (d) of section 731 of the Internal Revenue 
     Code of 1986 is amended by inserting ``section 710(b)(4) 
     (relating to distributions of partnership property),'' before 
     ``section 736''.
       (2) Section 741 of such Code is amended by inserting ``or 
     section 710 (relating to special rules for partners providing 
     investment management services to partnership)'' before the 
     period at the end.
       (3) Paragraph (13) of section 1402(a) of such Code is 
     amended--
       (A) by striking ``other than guaranteed'' and inserting 
     ``other than--
       ``(A) guaranteed'',
       (B) by striking the semicolon at the end and inserting ``, 
     and'', and
       (C) by adding at the end the following new subparagraph:
       ``(B) any income treated as ordinary income under section 
     710 received by an individual who provides investment 
     management services (as defined in section 710(d)(2));''.
       (4) Paragraph (12) of section 211(a) of the Social Security 
     Act is amended--
       (A) by striking ``other than guaranteed'' and inserting 
     ``other than--
       ``(A) guaranteed'',
       (B) by striking the semicolon at the end and inserting ``, 
     and'', and
       (C) by adding at the end the following new subparagraph:
       ``(B) any income treated as ordinary income under section 
     710 of the Internal Revenue Code of 1986 received by an 
     individual who provides investment management services (as 
     defined in section 710(d)(2) of such Code);''.
       (5) The table of sections for part I of subchapter K of 
     chapter 1 of such Code is amended by adding at the end the 
     following new item:

``Sec. 710. Special rules for partners providing investment management 
              services to partnership.''.
       (e) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to taxable years ending after January 27, 2009.
       (2) Partnership taxable years which include effective 
     date.--In applying section 710(a) of the Internal Revenue 
     Code of 1986 (as added by this section) in the case of any 
     partnership taxable year which includes January 27, 2009, the 
     amount of the net income referred to in such section shall be 
     treated as being the lesser of the net income for the entire 
     partnership taxable year or the net income determined by only 
     taking into account items attributable to the portion of the 
     partnership taxable year which is after such date.
       (3) Dispositions of partnership interests.--Section 710(b) 
     of the Internal Revenue Code of 1986 (as added by this 
     section) shall apply to dispositions and distributions after 
     January 27, 2009.
       (4) Other income and gain in connection with investment 
     management services.--Section 710(d) of such Code (as added 
     by this section) shall take effect on January 27, 2009.
       (5) Publicly traded partnerships.--For purposes of applying 
     section 7704, the amendments made by this section shall apply 
     to taxable years beginning after December 31, 2010.

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

       (a) Cigars.--Section 5701(a) of the Internal Revenue Code 
     of 1986 is amended--
       (1) by striking ``$1.828 cents per thousand ($1.594 cents 
     per thousand on cigars removed during 2000 or 2001)'' in 
     paragraph (1) and inserting ``$38.05 per thousand'',
       (2) by striking ``20.719 percent (18.063 percent on cigars 
     removed during 2000 or 2001)'' in paragraph (2) and inserting 
     ``39.9 percent'', and
       (3) by striking ``$48.75 per thousand ($42.50 per thousand 
     on cigars removed during 2000 or 2001)'' in paragraph (2) and 
     inserting ``30.44 cents per cigar''.
       (b) Cigarettes.--Section 5701(b) of such Code is amended--
       (1) by striking ``$19.50 per thousand ($17 per thousand on 
     cigarettes removed during 2000 or 2001)'' in paragraph (1) 
     and inserting ``$38.05 per thousand'', and
       (2) by striking ``$40.95 per thousand ($35.70 per thousand 
     on cigarettes removed during 2000 or 2001)'' in paragraph (2) 
     and inserting ``$79.91 per thousand''.
       (c) Cigarette Papers.--Section 5701(c) of such Code is 
     amended by striking ``1.22 cents (1.06 cents on cigarette 
     papers removed during 2000 or 2001)'' and inserting ``2.38 
     cents''.
       (d) Cigarette Tubes.--Section 5701(d) of such Code is 
     amended by striking ``2.44 cents (2.13 cents on cigarette 
     tubes removed during 2000 or 2001)'' and inserting ``4.76 
     cents''.
       (e) Smokeless Tobacco.--Section 5701(e) of such Code is 
     amended--
       (1) by striking ``58.5 cents (51 cents on snuff removed 
     during 2000 or 2001)'' in paragraph (1) and inserting 
     ``$1.142 cents'', and
       (2) by striking ``19.5 cents (17 cents on chewing tobacco 
     removed during 2000 or 2001)'' in paragraph (2) and inserting 
     ``38.05 cents''.
       (f) Pipe Tobacco.--Section 5701(f) of such Code is amended 
     by striking ``$1.0969 cents (95.67 cents on pipe tobacco 
     removed during 2000 or 2001)'' and inserting ``$2.1404 
     cents''.
       (g) Roll-Your-Own Tobacco.--Section 5701(g) of such Code is 
     amended by striking ``$1.0969 cents (95.67 cents on roll-
     your-own tobacco removed during 2000 or 2001)'' and inserting 
     ``$18.73''.
                                 ______
                                 
  SA 59. Mr. VITTER submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       Strike section 114 and insert the following:

     SEC. 114. CHIP GROSS INCOME ELIGIBILITY CEILING.

       (a) Application of CHIP Eligibility Ceiling.--
       (1) In general.--Section 2110 (42 U.S.C. 1397jj) is 
     amended--
       (A) in subsection (b)(1)--
       (i) by striking ``and'' at the end of subparagraph (B);
       (ii) by striking the period at the end of subparagraph (C) 
     and inserting ``; and''; and
       (iii) by adding at the end the following new subparagraph:
       ``(D) whose gross family income (as defined in subsection 
     (c)(9)) does not exceed 250 percent of the poverty line.''; 
     and
       (B) in subsection (c), by adding at the end the following 
     new paragraph:
       ``(9) Gross family income.--
       ``(A) In general.--Subject to subparagraph (B), the term 
     `gross family income' means, with respect to an individual, 
     gross income (as defined by the Secretary in regulations) for 
     the members of the individual's family. For purposes of the 
     previous sentence, in defining `gross income' the Secretary 
     shall, to the maximum extent practicable, include income from 
     whatever source, other than amounts deducted under section 
     62(a)(1) of the Internal Revenue Code of 1986.
       ``(B) Income disregards authorized.--A State may provide, 
     through a State plan amendment and with the approval of the 
     Secretary, for the disregard from gross family income of one 
     or more amounts so long as the total amount of such 
     disregards for a family does not exceed $250 per month, or 
     $3,000 per year.''.
       (2) Denial of federal matching payments for state schip 
     expenditures for individuals with gross family income above 
     250 percent of the poverty line.--Section 2105(c) (42 U.S.C. 
     1397ee(c)) is amended by adding at the end the following new 
     paragraph:
       ``(8) Denial of payments for expenditures for child health 
     assistance for individuals whose gross family income exceeds 
     250 percent of the poverty line.--No payment may be made 
     under this section, for any expenditures for providing child 
     health assistance or health benefits coverage under a State 
     child health plan under this title, including under a waiver 
     under section 1115, with respect to an individual whose gross 
     family income (as defined in section 2110(c)(9)) exceeds 250 
     percent of the poverty line.''.

[[Page 1636]]

       (b) Effective Date; Transition.--
       (1) In general.--Subject to paragraph (2), the amendments 
     made by this section shall apply to payments made for items 
     and services furnished on or after the first day of the first 
     calendar quarter beginning more than 90 days after the date 
     of the enactment of this Act.
       (2) Transition.--The amendments made by--
       (A) subsection (a)(1) shall not apply to an individual who 
     was receiving, or was determined eligible to receive, child 
     health assistance or health benefits coverage under a State 
     child health plan under title XXI of the Social Security Act, 
     including under a waiver under section 1115 of such Act, as 
     of the day before the date of the enactment of this Act, 
     until such date as the individual is determined ineligible 
     using income standards or methodologies in place as of the 
     day before the date of the enactment of this Act; and
       (B) subsection (a)(2) shall not apply to payment for items 
     and services furnished to an individual described in 
     subparagraph (B).
                                 ______
                                 
  SA 60. Mr. WICKER (for himself and Mr. Cochran) submitted an 
amendment intended to be proposed by him to the bill H.R. 2, to amend 
title XXI of the Social Security Act to extend and improve the 
Children's Health Insurance Program, and for other purposes; which was 
ordered to lie on the table; as follows:

       On page 76, after line 23, add the following:

     SEC. 116. ASSURING COVERAGE OF LOW-INCOME CHILDREN.

       Section 2105(c) (42 U.S.C. 1397ee(c)), as amended by 
     section 601(a)(1), is amended by adding at the end the 
     following new paragraph:
       ``(12) No payments to any state for expenditures for child 
     health assistance or health benefits coverage for individuals 
     whose gross family income exceeds 200 percent of the poverty 
     line until at least 90 percent of all united states eligible 
     children whose gross family income does not exceed 200 
     percent of the poverty line are enrolled in medicaid or chip 
     .--Notwithstanding any other provision of this title or title 
     XIX, for fiscal year quarters beginning on or after January 
     1, 2009, no payments shall be made to any State under 
     subsection (a)(1) or section 1903(a) on the basis of the 
     enhanced FMAP for providing child health assistance or health 
     benefits coverage for any individual whose gross family 
     income (as defined by the Secretary) exceeds 200 percent of 
     the poverty line for any fiscal year quarter that begins 
     before the date on which the Secretary certifies to Congress 
     that at least 90 percent of all children in the United States 
     whose gross family income (as so defined) does not exceed 200 
     percent of the poverty line, and who are eligible for child 
     health assistance under a State child health plan under this 
     title or for medical assistance under a State plan under 
     title XIX (or under a waiver of such plans), are enrolled in 
     such plans.''.
                                 ______
                                 
  SA 61. Mr. BINGAMAN submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 130, strike lines 8 through 13, and insert the 
     following:
       (d) Applicability; General Effective Date.--
       (1) Condition for application.--
       (A) In general.--
       (i) General effective date.--Subject to clause (ii), except 
     as provided in subparagraph (B), the amendments made by this 
     section shall take effect on January 1, 2010.
       (ii) Certification requirement.--Notwithstanding any other 
     provision of law, no State with a State plan under Medicaid 
     or a State child health plan under CHIP shall be required to 
     comply with section 1902(a)(46)(B) or 2105(c)(9) of the 
     Social Security Act before the date on which the Secretary 
     and the Commissioner of Social Security jointly certify that 
     a significant number of United States citizens, including 
     citizen children, who are eligible for coverage under such 
     plans will not lose that coverage as a result of the 
     application of such requirements. For purposes of the 
     preceding sentence, the Secretary and the Commissioner of 
     Social Security shall determine what is a significant number 
     of such citizens on the basis of the best estimates available 
     of the number of non-citizens that the application of such 
     requirements may prevent from fraudulently obtaining 
     assistance under such plans, compared to the best estimates 
     available of the number of United States citizens that may be 
     inappropriately disenrolled from, or prevented from enrolling 
     in, such plans as a result of the application of such 
     requirements.
       (iii) Extension of prescription drug discounts to enrollees 
     of medicaid managed care organizations.--Section 
     1903(m)(2)(A) (42 U.S.C. 1396b(m)(2)(A)) is amended--

       (I) In general.--

       (aa) in clause (xi), by striking ``and'' at the end;
       (bb) in clause (xii), by striking the period at the end and 
     inserting ``; and''; and
       (cc) by adding at the end the following:
       ``(xiii) such contract provides that (I) payment for 
     covered outpatient drugs dispensed to individuals eligible 
     for medical assistance who are enrolled with the entity shall 
     be subject to the same rebate required by the agreement 
     entered into under section 1927 as the State is subject to 
     and that the State shall allow the entity to collect such 
     rebates from manufacturers, and (II) capitation rates paid to 
     the entity shall be based on actual cost experience related 
     to rebates and subject to the Federal regulations requiring 
     actuarially sound rates.''.

       (II) Conforming amendments.--Section 1927 (42 U.S.C. 1396r-
     8) is amended--

       (aa) in subsection (d)--
       (AA) in paragraph (1), by adding at the end the following:
       ``(C) Notwithstanding the subparagraphs (A) and (B)--
       ``(i) a medicaid managed care organization with a contract 
     under section 1903(m) may exclude or otherwise restrict 
     coverage of a covered outpatient drug on the basis of 
     policies or practices of the organization, such as those 
     affecting utilization management, formulary adherence, and 
     cost sharing or dispute resolution, in lieu of any State 
     policies or practices relating to the exclusion or 
     restriction of coverage of such drugs; and
       ``(ii) nothing in this section or paragraph (2)(A)(xiii) of 
     section 1903(m) shall be construed as requiring a medicaid 
     managed care organization with a contract under such section 
     to maintain the same such polices and practices as those 
     established by the State for purposes of individuals who 
     receive medical assistance for covered outpatient drugs on a 
     fee-for service basis.''; and
       (bb) in paragraph (4), by inserting after subparagraph (E) 
     the following:
       ``(F) Notwithstanding the preceding subparagraphs of this 
     paragraph, any formulary established by medicaid managed care 
     organization with a contract under section 1903(m) may be 
     based on positive inclusion of drugs selected by a formulary 
     committee consisting of physicians, pharmacists, and other 
     individuals with appropriate clinical experience as long as 
     drugs excluded from the formulary are available through prior 
     authorization, as described in paragraph (5).''; and
       (cc) in subsection (j), by striking paragraph (1) and 
     inserting the following:
       ``(1) Covered outpatients drugs are not subject to the 
     requirements of this section if such drugs are--
       ``(A) dispensed by a health maintenance organization other 
     than a medicaid managed care organization with a contract 
     under section 1903(m); and
       ``(B) subject to discounts under section 340B of the Public 
     Health Service Act.''.

       (III) Effective date.--The amendments made by this 
     subsection take effect on the date of enactment of this Act 
     and apply to rebate agreements entered into or renewed under 
     section 1927 of the Social Security Act (42 U.S.C. 1396r-8) 
     on or after such date.

       (iv) Increased funding for the medicaid improvement fund.--
     [Review with CBO to specify numbers and whether savings all 
     go to 2014 or also to 2015 through 2018]Section 1941(b)(1)(A) 
     (42 U.S.C. 1936w-1(b)(1)(A)) is amended by striking 
     ``$100,000,000'' and inserting ``$____''.
                                 ______
                                 
  SA 62. Mr. BINGAMAN submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 108, between lines 3 and 4, insert the following:
       ``(H) State option to rely on state income tax data or 
     return.--At the option of the State, a finding from an 
     Express Lane agency may include gross income or adjusted 
     gross income shown by State income tax records or returns.''.
                                 ______
                                 
  SA 63. Mr. BINGAMAN submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 99, beginning on line 8 strike ``through'' and all 
     that follows through ``application,'' on line 10, and insert 
     ``in writing, by telephone, orally, through electronic 
     signature, or through any other means specified by the 
     Secretary and''.
       On page 108, between lines 3 and 4, insert the following:
       ``(H) State option to rely on state income tax data or 
     return.--At the option of the State, a finding from an 
     Express Lane agency may include gross income or adjusted 
     gross income shown by State income tax records or returns.''.
                                 ______
                                 
  SA 64. Mr. BINGAMAN submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title

[[Page 1637]]

XXI of the Social Security Act to extend and improve the Children's 
Health Insurance Program, and for other purposes; which was ordered to 
lie on the table; as follows:

       On page 99, beginning on line 8 strike ``through'' and all 
     that follows through ``application,'' on line 10, and insert 
     ``in writing, by telephone, orally, through electronic 
     signature, or through any other means specified by the 
     Secretary and''.
                                 ______
                                 
  SA 65. Mr. MARTINEZ (for himself, Mr. Vitter, Mr. Wicker, Mr. 
Bunning, Mr. Enzi, Mr. Coburn, Mr. Johanns, Mr. Brownback, Mr. Inhofe, 
Mr. Chambliss, and Mr. DeMint) submitted an amendment intended to be 
proposed by him to the bill H.R. 2, to amend title XXI of the Social 
Security Act to extend and improve the Children's Health Insurance 
Program, and for other purposes; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. RESTORATION OF PROHIBITION ON FUNDING OF 
                   NONGOVERNMENTAL ORGANIZATIONS THAT PROMOTE 
                   ABORTION AS A METHOD OF BIRTH CONTROL (``MEXICO 
                   CITY POLICY'').

       Notwithstanding any other provision of law, regulation, or 
     policy, including the memorandum issued by the President on 
     January 23, 2009, to the Administrator of the United States 
     Agency for International Development, titled ``Mexico City 
     Policy and Assistance for Voluntary Family Planning,'' no 
     funds authorized under part I of the Foreign Assistance Act 
     of 1961 (22 U.S.C. 2151 et seq.) for population planning 
     activities or other population or family planning assistance 
     may be made available for any private, nongovernmental, or 
     multilateral organization that performs or actively promotes 
     abortion as a method of birth control.
                                 ______
                                 
  SA 66. Mr. CORNYN submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       Strike section 114 and insert the following:

     SEC. 114. DENIAL OF PAYMENTS FOR COVERAGE OF CHILDREN WITH 
                   EFFECTIVE FAMILY INCOME THAT EXCEEDS 200 
                   PERCENT OF THE POVERTY LINE.

       (a) In General.--Section 2105(c) (42 U.S.C. 1397ee(c)) is 
     amended by adding at the end the following new paragraph:
       ``(8) Denial of payments for expenditures for child health 
     assistance for children whose effective family income exceeds 
     200 percent of the poverty line.--For child health assistance 
     furnished after the date of the enactment of this paragraph, 
     no payment shall be made under this section for any 
     expenditures for providing child health assistance or health 
     benefits coverage for a targeted low-income child whose 
     family income (as determined without regard to the 
     application of any general exclusion or disregard of a block 
     of income that is not determined by type of expense or type 
     of income (regardless of whether such an exclusion or 
     disregard is permitted under section 1902(r))) would exceed 
     200 percent of the poverty line but for the application of a 
     general exclusion of a block of income that is not determined 
     by type of expense or type of income.''.
       (b) Grants to States.--
       (1) In general.--From amounts appropriated under paragraph 
     (2), the Secretary shall make grants to States as follows:
       (A) 75 percent of such amounts shall be directed toward 
     increasing coverage for low-income children under CHIP.
       (B) 25 percent of such amounts shall be directed toward 
     activities assisting States, especially States with a high 
     percentage of eligible, but not enrolled children, in 
     outreach and enrollment activities under CHIP, such as--
       (i) improving and simplifying enrollment systems, 
     including--

       (I) increasing staffing and computer systems to meet 
     Federal and State standards;
       (II) decreasing turn-around time while maintaining program 
     integrity; and

       (ii) improving outreach and application assistance, 
     including--

       (I) connecting children with a medical home and keeping 
     them healthy;
       (II) developing systems to identify, inform, and fix 
     enrollment system problems;
       (III) supporting awareness of, and access to, other 
     critical health programs;
       (IV) pursuing new performance goals to cut ``procedural 
     denials'' to the lowest possible level; and
       (V) coordinating community- and school-based outreach 
     programs.

       (2) Funding.--There is appropriated to provide grants under 
     paragraph (1) an amount equal to the amount of Federal funds 
     that the Director of the Congressional Budget Office 
     certifies would have been expended for the period beginning 
     April 1, 2009, and ending September 30, 2013, if section 114 
     (relating to limitation on matching rate for States that 
     propose to cover children with effective family income that 
     exceeds 300 percent of the poverty line) of S. 275 (111th 
     Congress) as reported by the Committee on Finance of the 
     Senate and placed on the Senate calendar on January 16, 2009, 
     had been enacted.
                                 ______
                                 
  SA 67. Mr. CORNYN submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 45, between lines 17 and 18, insert the following:
       ``(3) Limitation.--
       ``(A) In general.--A State shall not be a shortfall State 
     described in paragraph (2) if the State provides coverage 
     under this title to children whose family income (as 
     determined without regard to the application of any general 
     exclusion or disregard of a block of income that is not 
     determined by type of expense or type of income (regardless 
     of whether such an exclusion or disregard is permitted under 
     section 1902(r))) exceeds 200 percent of the poverty line.
       ``(B) Grants to states with unspent funds.--Of any funds 
     that are not redistributed under this subsection because of 
     the application of subparagraph (A), the Secretary shall make 
     grants to States as follows:
       ``(i) 75 percent of such funds shall be directed toward 
     increasing coverage under this title for low-income children.
       ``(ii) 25 percent of such funds shall be directed toward 
     activities assisting States, especially States with a high 
     percentage of eligible, but not enrolled children, in 
     outreach and enrollment activities under this title, such 
     as--

       ``(I) improving and simplifying enrollment systems, 
     including--

       ``(aa) increasing staffing and computer systems to meet 
     Federal and State standards;
       ``(bb) decreasing turn-around time while maintaining 
     program integrity; and

       ``(II) improving outreach and application assistance, 
     including--

       ``(aa) connecting children with a medical home and keeping 
     them healthy;
       ``(bb) developing systems to identify, inform, and fix 
     enrollment system problems;
       ``(cc) supporting awareness of, and access to, other 
     critical health programs;
       ``(dd) pursuing new performance goals to cut `procedural 
     denials' to the lowest possible level; and
       ``(ee) coordinating community- and school-based outreach 
     programs.''.
                                 ______
                                 
  SA 68. Mr. GRASSLEY submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 75, beginning on line 13, strike ``whose'' and all 
     that follows through line 17, and insert the following: 
     ``whose family income would exceed 300 percent of the poverty 
     line (determined without regard to any block or other income 
     disregard and without excluding any type of expense 
     (regardless, in the case of child health assistance or health 
     benefits coverage provided in the form of coverage under a 
     Medicaid program under paragraph (2) of section 2101(a) (or a 
     combination of the coverage options under paragraphs (1) and 
     (2) of such section) of whether such a disregard or exclusion 
     is permitted under section 1902(r)).''.
                                 ______
                                 
  SA 69. Mr. GRASSLEY submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       Beginning on page 75, strike line 18 and all that follows 
     through page 76, line 2.
                                 ______
                                 
  SA 70. Mr. GRASSLEY submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       Strike section 114 and insert the following:

     SEC. 114. DENIAL OF PAYMENTS FOR COVERAGE OF CHILDREN WITH 
                   EFFECTIVE FAMILY INCOME THAT EXCEEDS 300 
                   PERCENT OF THE POVERTY LINE.

       Section 2105(c) (42 U.S.C. 1397ee(c)) is amended by adding 
     at the end the following new paragraph:
       ``(8) Denial of payments for expenditures for child health 
     assistance for children whose effective family income exceeds 
     300 percent of the poverty line.--For child health assistance 
     furnished after the date of the enactment of this paragraph, 
     no payment shall be made under this section for any 
     expenditures for providing child

[[Page 1638]]

     health assistance or health benefits coverage for a targeted 
     low-income child whose effective family income would exceed 
     300 percent of the poverty line but for the application of a 
     general exclusion of a block of income that is not determined 
     by type of expense or type of income.''.
                                 ______
                                 
  SA 71. Mr. GRASSLEY submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``SCHIP Funding Extension Act 
     of 2009''.

     SEC. 2. FUNDING THROUGH FISCAL YEAR 2010.

       (a) Through Fiscal Year 2010.--
       (1) In general.--Section 2104 of the Social Security Act 
     (42 U.S.C. 1397dd(a)), as amended by section 201(a)(1) of the 
     Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
     Law 110-173) is amended--
       (A) in subsection (a)(11), by striking ``and 2009'' and 
     inserting ``through 2010''; and
       (B) in subsection (c)(4)(B), by striking ``2009'' and 
     inserting ``2010''.
       (2) Availability of extended funding.--Funds made available 
     from any allotment made from funds appropriated under 
     subsection (a)(11) or (c)(4)(B) of section 2104 of the Social 
     Security Act (42 U.S.C. 1397dd) for fiscal year 2009 or 2010 
     shall not be available for child health assistance for items 
     and services furnished after September 30, 2010.
       (b) Additional Allotments To Maintain SCHIP Programs 
     Through Fiscal Year 2010.--Section 2104 of the Social 
     Security Act (42 U.S.C. 1397dd) is amended by striking 
     subsection (l) and inserting the following new subsections:
       ``(l) Additional Allotments To Maintain SCHIP Programs for 
     Fiscal Year 2009.--
       ``(1) Appropriation; allotment authority.--For the purpose 
     of providing additional allotments described in subparagraphs 
     (A) and (B) of paragraph (3), there is appropriated, out of 
     any money in the Treasury not otherwise appropriated, such 
     sums as may be necessary, not to exceed $3,000,000,000 for 
     fiscal year 2009.
       ``(2) Shortfall states described.--For purposes of 
     paragraph (3), a shortfall State described in this paragraph 
     is a State with a State child health plan approved under this 
     title for which the Secretary estimates, on the basis of the 
     most recent data available to the Secretary, that the Federal 
     share amount of the projected expenditures under such plan 
     for such State for fiscal year 2009 will exceed the sum of--
       ``(A) the amount of the State's allotments for each of 
     fiscal years 2007 and 2008 that will not be expended by the 
     end of fiscal year 2008;
       ``(B) the amount, if any, that is to be redistributed to 
     the State during fiscal year 2009 in accordance with 
     subsection (f); and
       ``(C) the amount of the State's allotment for fiscal year 
     2009.
       ``(3) Allotments.--In addition to the allotments provided 
     under subsections (b) and (c), subject to paragraph (4), of 
     the amount available for the additional allotments under 
     paragraph (1) for fiscal year 2009, the Secretary shall 
     allot--
       ``(A) to each shortfall State described in paragraph (2) 
     not described in subparagraph (B), such amount as the 
     Secretary determines will eliminate the estimated shortfall 
     described in such paragraph for the State; and
       ``(B) to each commonwealth or territory described in 
     subsection (c)(3), an amount equal to the percentage 
     specified in subsection (c)(2) for the commonwealth or 
     territory multiplied by 1.05 percent of the sum of the 
     amounts determined for each shortfall State under 
     subparagraph (A).
       ``(4) Proration rule.--If the amounts available for 
     additional allotments under paragraph (1) are less than the 
     total of the amounts determined under subparagraphs (A) and 
     (B) of paragraph (3), the amounts computed under such 
     subparagraphs shall be reduced proportionally.
       ``(5) Retrospective adjustment.--The Secretary may adjust 
     the estimates and determinations made to carry out this 
     subsection as necessary on the basis of the amounts reported 
     by States not later than November 30, 2008, on CMS Form 64 or 
     CMS Form 21, as the case may be, and as approved by the 
     Secretary.
       ``(6) One-year availability; no redistribution of 
     unexpended additional allotments.--Notwithstanding 
     subsections (e) and (f), amounts allotted to a State pursuant 
     to this subsection for fiscal year 2009, subject to paragraph 
     (5), shall only remain available for expenditure by the State 
     through September 30, 2009. Any amounts of such allotments 
     that remain unexpended as of such date shall not be subject 
     to redistribution under subsection (f).
       ``(m) Additional Allotments To Maintain SCHIP Programs for 
     Fiscal Year 2010.--
       ``(1) Appropriation; allotment authority.--For the purpose 
     of providing additional allotments described in subparagraphs 
     (A) and (B) of paragraph (3), there is appropriated, out of 
     any money in the Treasury not otherwise appropriated, such 
     sums as may be necessary, not to exceed $4,000,000,000 for 
     fiscal year 2010.
       ``(2) Shortfall states described.--For purposes of 
     paragraph (3), a shortfall State described in this paragraph 
     is a State with a State child health plan approved under this 
     title for which the Secretary estimates, on the basis of the 
     most recent data available to the Secretary, that the Federal 
     share amount of the projected expenditures under such plan 
     for such State for fiscal year 2010 will exceed the sum of--
       ``(A) the amount of the State's allotments for each of 
     fiscal years 2008 and 2009 that will not be expended by the 
     end of fiscal year 2009;
       ``(B) the amount, if any, that is to be redistributed to 
     the State during fiscal year 2010 in accordance with 
     subsection (f); and
       ``(C) the amount of the State's allotment for fiscal year 
     2010.
       ``(3) Allotments.--In addition to the allotments provided 
     under subsections (b) and (c), subject to paragraph (4), of 
     the amount available for the additional allotments under 
     paragraph (1) for fiscal year 2010, the Secretary shall 
     allot--
       ``(A) to each shortfall State described in paragraph (2) 
     not described in subparagraph (B) such amount as the 
     Secretary determines will eliminate the estimated shortfall 
     described in such paragraph for the State; and
       ``(B) to each commonwealth or territory described in 
     subsection (c)(3), an amount equal to the percentage 
     specified in subsection (c)(2) for the commonwealth or 
     territory multiplied by 1.05 percent of the sum of the 
     amounts determined for each shortfall State under 
     subparagraph (A).
       ``(4) Proration rule.--If the amounts available for 
     additional allotments under paragraph (1) are less than the 
     total of the amounts determined under subparagraphs (A) and 
     (B) of paragraph (3), the amounts computed under such 
     subparagraphs shall be reduced proportionally.
       ``(5) Retrospective adjustment.--The Secretary may adjust 
     the estimates and determinations made to carry out this 
     subsection as necessary on the basis of the amounts reported 
     by States not later than November 30, 2010, on CMS Form 64 or 
     CMS Form 21, as the case may be, and as approved by the 
     Secretary.
       ``(6) Availability; no redistribution of unexpended 
     additional allotments.--Notwithstanding subsections (e) and 
     (f), amounts allotted to a State pursuant to this subsection 
     for fiscal year 2010, subject to paragraph (5), shall only 
     remain available for expenditure by the State through 
     September 30, 2010. Any amounts of such allotments that 
     remain unexpended as of such date shall not be subject to 
     redistribution under subsection (f).''.
       (c) Extension of Treatment of Qualifying States.--
       (1) In general.--Section 2105(g)(1)(A) of the Social 
     Security Act (42 U.S.C. 1397ee(g)(1)(A)) is amended by 
     striking ``or 2009'' and inserting ``2009, or 2010''.
       (2) Applicability.--The amendment made by paragraph (1) 
     shall be in effect through September 30, 2010.
       (3) Repeal of limitation on availability of fiscal year 
     2009 allotments.--Paragraph (2) of section 201(b) of the 
     Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
     Law 110-173) is repealed.
                                 ______
                                 
  SA 72. Mr. GRASSLEY submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 153, between lines 12 and 13, insert the following:
       (d) Requirement for States Covering Children Whose Income 
     Exceeds 200 Percent of the Poverty Line to Offer Premium 
     Assistance for All Families of Targeted Low-Income 
     Children.--
       (1) In general.--Section 2102(a) (42 U.S.C. 1397b(a)) is 
     amended--
       (A) in paragraph (6), by striking ``and'' at the end;
       (B) in paragraph (7), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following new paragraph:
       ``(8) effective for plan years beginning on or after 
     October 1, 2009, in the case of a State that provides child 
     health assistance for any targeted low-income child with a 
     family gross income (determined without regard to any block 
     or other income disregard and without excluding any type of 
     expense (regardless, in the case of child health assistance 
     or health benefits coverage provided in the form of coverage 
     under a Medicaid program under paragraph (2) of section 
     2101(a) (or a combination of the coverage options under 
     paragraphs (1) and (2) of such section) of whether such a 
     disregard or exclusion is permitted under section 1902(r))) 
     that exceeds 200 percent of the poverty line, how the plan 
     shall offer child health assistance in the form of premium 
     assistance to all targeted

[[Page 1639]]

     low-income children who have access to private health 
     insurance coverage or coverage under a group health plan.''.
                                 ______
                                 
  SA 73. Mr. GRASSLEY submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to amend title XXI of the Social Security Act 
to extend and improve the Children's Health Insurance Program, and for 
other purposes; which was ordered to lie on the table; as follows:

       Beginning on page 58, strike line 14 and all that follows 
     through page 62, line 17, and insert the following:
       ``(a) Termination of Coverage for Nonpregnant Childless 
     Adults.--
       ``(1) No new chip waivers; automatic extensions at state 
     option through 2009.--Notwithstanding section 1115 or any 
     other provision of this title, except as provided in this 
     subsection--
       ``(A) the Secretary shall not on or after the date of the 
     enactment of the Children's Health Insurance Program 
     Reauthorization Act of 2009, approve or renew a waiver, 
     experimental, pilot, or demonstration project that would 
     allow funds made available under this title to be used to 
     provide child health assistance or other health benefits 
     coverage to a nonpregnant childless adult; and
       ``(B) notwithstanding the terms and conditions of an 
     applicable existing waiver, the provisions of paragraph (2) 
     shall apply for purposes of any period beginning on the first 
     day of the first month that begins after the 6-month 
     termination period, in determining the period to which the 
     waiver applies, the individuals eligible to be covered by the 
     waiver, and the amount of the Federal payment under this 
     title.
       ``(2) Termination of chip coverage under applicable 
     existing waivers 6 months after the date of the enactment of 
     this act.--
       ``(A) In general.--No funds shall be available under this 
     title for child health assistance or other health benefits 
     coverage that is provided to a nonpregnant childless adult 
     under an applicable existing waiver after the last day of the 
     6-month termination period.
       ``(B) Extension upon state request.--If an applicable 
     existing waiver described in subparagraph (A) would otherwise 
     expire before the date described in paragraph (1)(A), 
     notwithstanding the requirements of subsections (e) and (f) 
     of section 1115, a State may submit, not later than 30 days 
     after the date of enactment of this Act, a request to the 
     Secretary for an extension of the waiver. The Secretary shall 
     approve a request for an extension of an applicable existing 
     waiver submitted pursuant to this subparagraph, but only 
     through the last day of the 6-month termination period.
       ``(C) Application of enhanced fmap.--The enhanced FMAP 
     determined under section 2105(b) shall apply to expenditures 
     under an applicable existing waiver for the provision of 
     child health assistance or other health benefits coverage to 
     a nonpregnant childless adult during the 6-month termination 
     period.
       ``(3) State option to apply for medicaid waiver to continue 
     coverage for nonpregnant childless adults.--
       (A) In general.--Each State for which coverage under an 
     applicable existing waiver is terminated under paragraph 
     (2)(A) may submit, not later than 90 days after the date of 
     enactment of this Act, an application to the Secretary for a 
     waiver under section 1115 of the State plan under title XIX 
     to provide medical assistance to a nonpregnant childless 
     adult whose coverage is so terminated (in this subsection 
     referred to as a ``Medicaid nonpregnant childless adults 
     waiver'').
       ``(B) Deadline for approval.--The Secretary shall make a 
     decision to approve or deny an application for a Medicaid 
     nonpregnant childless adults waiver submitted under 
     subparagraph (A) within 90 days of the date of the submission 
     of the application. If no decision has been made by the 
     Secretary as of the last day of the 6-month termination 
     period, on the application of a State for a Medicaid 
     nonpregnant childless adults waiver that was submitted to the 
     Secretary by the date described in subparagraph (A), the 
     application shall be deemed approved.
       ``(C) Standard for budget neutrality.--The budget 
     neutrality requirement applicable with respect to 
     expenditures for medical assistance under a Medicaid 
     nonpregnant childless adults waiver shall--
       ``(i) in the case of any period of fiscal year 2009 in 
     which such waiver is in effect, allow expenditures for 
     medical assistance under title XIX for all such adults to not 
     exceed the total amount of payments made to the State under 
     paragraph (2)(B) for any previous corresponding period in 
     fiscal year 2009, increased by the percentage increase (if 
     any) in the projected nominal per capita amount of National 
     Health Expenditures for 2009 over 2008, as most recently 
     published by the Secretary;
       ``(ii) in the case of fiscal year 2010, allow expenditures 
     for medical assistance under title XIX for all such adults to 
     not exceed the sum of the total amount of payments made to 
     the State under paragraph (2)(B) for fiscal year 2009 and 
     under title XIX for any period of fiscal year 2009 in which 
     such waiver is in effect, increased by the percentage 
     increase (if any) in the projected nominal per capita amount 
     of National Health Expenditures for 2010 over 2009, as most 
     recently published by the Secretary; and
       ``(iii) in the case of any succeeding fiscal year, allow 
     such expenditures to not exceed the amount in effect under 
     this subparagraph for the preceding fiscal year, increased by 
     the percentage increase (if any) in the projected nominal per 
     capita amount of National Health Expenditures for the 
     calendar year that begins during the year involved over the 
     preceding calendar year, as most recently published by the 
     Secretary.
       ``(4) 6-month termination period.--In this subsection, the 
     term ``6-month termination period'' means the period that 
     begins with the first day of the first month that begins on 
     or after the date of enactment of this Act and ends on the 
     last day of the 5th succeeding month.

                          ____________________