[House Report 110-346]
[From the U.S. Government Publishing Office]



110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    110-346

======================================================================
 
 PROVIDING FOR THE CONSIDERATION OF THE SENATE AMENDMENTS TO THE BILL 
 (H.R. 976) TO AMEND THE INTERNAL REVENUE CODE OF 1986 TO PROVIDE TAX 
          RELIEF FOR SMALL BUSINESSES, AND FOR OTHER PURPOSES

                                _______
                                

 September 24, 2007.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

   Mr. McGovern, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 675]

    The Committee on Rules, having had under consideration 
House Resolution 675, by a record vote of 8 to 4, report the 
same to the House with the recommendation that the resolution 
be adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for consideration of the Senate 
amendments to the bill, H.R. 976, to amend the Internal Revenue 
Code of 1986 to provide tax relief for small businesses, and 
for other purposes. The resolution provides that it is in order 
for the chairman of the Committee on Energy and Commerce to 
make a motion that the House concur in each of the Senate 
amendments to H.R. 976 with the respective amendment printed in 
this report.
    The resolution waives all points of order against the 
motion except those arising under clause 10 of rule XXI. The 
resolution provides that the Senate amendments and the motion 
shall be considered as read. It further provides that the 
motion shall be debatable for one hour equally divided among 
and controlled by the chairman and ranking minority member of 
the Committee on Energy and Commerce and the chairman and 
ranking minority member of the Committee on Ways and Means.

                         EXPLANATION OF WAIVERS

    Although the rule waives all points of order against the 
motion (except those arising under clause 10 of rule XXI), the 
Committee is not aware of any points of order against the 
motion. The waiver of all points of order against the motion is 
prophylactic in nature.

                            COMMITTEE VOTES

    The results of each record vote on an amendment or motion 
to report, together with the names of those voting for and 
against, are printed below:

Rules Committee record vote No. 310

    Date: September 24, 2007.
    Measure: Senate amendment to H.R. 976.
    Motion by: Mr. Dreier.
    Summary of motion: To amend the rule and provide for an 
amendment to the motion to concur to be offered by Rep. Barton 
of Texas and to be debatable by a proponent and an opponent for 
ten minutes each.
    Results: Defeated 4-8.
    Vote by Members: Hastings (FL)--Nay; Matsui--Nay; Cardoza--
Nay; Welch--Nay; Castor--Nay; Arcuri--Nay; Sutton--Nay; 
Dreier--Yea; Diaz-Balart--Yea; Hastings (WA)--Yea; Sessions--
Yea; Slaughter--Nay.

Rules Committee record vote No. 311

    Date: September 24, 2007.
    Measure: Senate amendment to H.R. 976.
    Motion by: Mr. Dreier.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Barton of Texas, an amendment 
in the nature of a substitute that would reauthorize and fully 
fund the existing SCHIP program for an additional 18 months to 
be debated by a proponent and an opponent for 20 minutes each.
    Results: Defeated 4-8.
    Vote by Members: Hastings (FL)--Nay; Matsui--Nay; Cardoza--
Nay; Welch--Nay; Castor--Nay; Arcuri--Nay; Sutton--Nay; 
Dreier--Yea; Diaz-Balart--Yea; Hastings (WA)--Yea; Sessions--
Yea; Slaughter--Nay.

Rules Committee record vote No. 312

    Date: September 24, 2007.
    Measure: Senate amendment to H.R. 976.
    Motion by: Mr. Diaz-Balart.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Diaz-Balart that would allow 
states the option to provide Medicaid and SCHIP coverage to all 
eligible, legally present, children and pregnant women.
    Results: Defeated 4-8.
    Vote by Members: Hastings (FL)--Nay; Matsui--Nay; Cardoza--
Nay; Welch--Nay; Castor--Nay; Arcuri--Nay; Sutton--Nay; 
Dreier--Yea; Diaz-Balart--Yea; Hastings (WA)--Yea; Sessions--
Yea; Slaughter--Nay.

Rules Committee record vote No. 313

    Date: September 24, 2007.
    Measure: Senate amendment to H.R. 976.
    Motion by: Mr. Sessions.
    Summary of motion: To amend the rule to waive all points of 
order against the motion except those arising under clause 9 
and 10 of rule XXI.
    Results: Defeated 4-8.
    Vote by Members: Hastings (FL)--Nay; Matsui--Nay; Cardoza--
Nay; Welch--Nay; Castor--Nay; Arcuri--Nay; Sutton--Nay; 
Dreier--Yea; Diaz-Balart--Yea; Hastings (WA)--Yea; Sessions--
Yea; Slaughter--Nay.

Rules Committee record vote No. 314

    Date: September 24, 2007.
    Measure: Senate amendment to H.R. 976.
    Motion by: Mr. Hastings (FL).
    Summary of motion: To grant the rule.
    Results: Adopted 8-4.
    Vote by Members: Hastings (FL)--Yea; Matsui--Yea; Cardoza--
Yea; Welch--Yea; Castor--Yea; Arcuri--Yea; Sutton--Yea; 
Dreier--Nay; Diaz-Balart--Nay; Hastings (WA)--Nay; Sessions--
Nay; Slaughter--Yea.

  SUMMARY OF THE HOUSE AMENDMENTS TO THE SENATE AMENDMENTS TO H.R. 976

    The amendment reauthorizes the Children's Health Insurance 
Program, investing an additional $35 billion over five years 
for CHIP's financing and health insurance coverage for low-
income children. The amendment provides that dental coverage 
should be available to children enrolled in CHIP. The amendment 
provides coverage to pregnant women as a new state option as 
well as preserving the options to cover them through a state 
waiver or through regulation. The amendment prohibits new 
waivers to cover parents in the CHIP program. States that have 
received waivers to cover low-income parents under CHIP will be 
allowed to transition parents into a separate block grant.
    The amendment retains the current law prohibition of 
waivers to allow coverage of childless adults. Currently 
covered childless adults will transition off CHIP. For states 
that have received CHIP waivers to cover childless adults, the 
amendment terminates those waivers after a one-year period, 
provides temporary Medicaid funding for already-enrolled 
adults, and allows states to apply for a Medicaid waiver for 
coverage.
    Under the financing structure, states that face a funding 
shortfall and meet enrollment goals will receive an adjustment 
payment to ensure that no child who is eligible for Medicaid or 
CHIP is denied coverage or placed on a waiting list. The 
formula also sets in place new overall caps on federal funding 
to ensure the program's expenditures do not exceed the amounts 
authorized.
    The amendment provides $100 million in grants for new 
outreach activities to states, local governments, schools, 
community-based organizations, safety-net providers and others. 
The amendment establishes a new quality child health initiative 
to develop and implement quality measures and improve state 
reporting of quality data. Finally, the amendment allows states 
to offer a premium assistance subsidy for qualified, cost-
effective employer-sponsored coverage to children eligible for 
CHIP and who have access to such coverage.

   TEXT OF THE HOUSE AMENDMENTS TO THE SENATE AMENDMENTS TO H.R. 976

  In lieu of the matter proposed to be inserted to the text of 
the Act, 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 ``Children's 
Health Insurance Program Reauthorization Act of 2007''.
  (b) Amendments to Social Security Act.--Except as otherwise 
specifically provided, whenever in this Act an amendment is 
expressed in terms of an amendment to or repeal of a section or 
other provision, the reference shall be considered to be made 
to that section or other provision of the Social Security Act.
  (c) References to 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 2008 
          through 2012.
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. 2-year initial availability of CHIP allotments.
Sec. 106. Redistribution of unused allotments to address State funding 
          shortfalls.
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.
Sec. 116. Preventing substitution of CHIP coverage for private coverage.

                    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.
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.

      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. Demonstration projects relating to diabetes prevention.
Sec. 506. Clarification of coverage of services provided through school-
          based health centers.

     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.

               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. County medicaid health insuring organizations; GAO report on 
          Medicaid managed care payment rates.
Sec. 615. Adjustment in computation of Medicaid FMAP to disregard an 
          extraordinary employer pension contribution.
Sec. 616. Moratorium on certain payment restrictions.
Sec. 617. Medicaid DSH allotments for Tennessee and Hawaii.
Sec. 618. Clarification treatment of regional medical center.
Sec. 619. Extension of SSI web-based asset demonstration project to the 
          Medicaid program.

                      Subtitle C--Other Provisions

Sec. 621. Support for injured servicemembers.
Sec. 622. Military family job protection.
Sec. 623. Outreach regarding health insurance options available to 
          children.
Sec. 624. Sense of 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. 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) and (c), this Act (and the 
amendments made by this Act) shall take effect on October 1, 
2007, and shall apply to child health assistance and medical 
assistance provided on or after that date without regard to 
whether or not final regulations to carry out this Act (or such 
amendments) have been promulgated by such 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 respective plan to meet one or more additional requirements 
imposed by amendments made by this Act, the respective State 
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) Contingent Effective Date for CHIP Funding for Fiscal 
Year 2008.--Notwithstanding any other provision of law, if 
funds are appropriated under any law (other than this Act) to 
provide allotments to States under CHIP for all (or any 
portion) of fiscal year 2008--
          (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 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 (9), by striking ``and'' at the end;
          (2) in paragraph (10), by striking the period at the 
        end and inserting a semicolon; and
          (3) by adding at the end the following new 
        paragraphs:
          ``(11) for fiscal year 2008, $9,125,000,000;
          ``(12) for fiscal year 2009, $10,675,000,000;
          ``(13) for fiscal year 2010, $11,850,000,000;
          ``(14) for fiscal year 2011, $13,750,000,000; and
          ``(15) for fiscal year 2012, for purposes of making 2 
        semi-annual allotments--
                  ``(A) $1,750,000,000 for the period beginning 
                on October 1, 2011, and ending on March 31, 
                2012, and
                  ``(B) $1,750,000,000 for the period beginning 
                on April 1, 2012, and ending on September 30, 
                2012.''.

SEC. 102. ALLOTMENTS FOR STATES AND TERRITORIES FOR FISCAL YEARS 2008 
                    THROUGH 2012.

  Section 2104 (42 U.S.C. 1397dd) is amended--
          (1) in subsection (b)(1), by striking ``subsection 
        (d)'' and inserting ``subsections (d) and (i)'';
          (2) in subsection (c)(1), by striking ``subsection 
        (d)'' and inserting ``subsections (d) and (i)(4)''; and
          (3) by adding at the end the following new 
        subsection:
  ``(i) Allotments for Fiscal Years 2008 Through 2012.--
          ``(1) For fiscal year 2008.--
                  ``(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 2008 from 
                the amount made available under subsection 
                (a)(11), 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 2007, multiplied by the allotment 
                        increase factor determined under 
                        paragraph (5) for fiscal year 2008.
                          ``(ii) The Federal share of the 
                        amount allotted to the State for fiscal 
                        year 2007 under subsection (b), 
                        multiplied by the allotment increase 
                        factor determined under paragraph (5) 
                        for fiscal year 2008.
                          ``(iii) Only in the case of--
                                  ``(I) a State that received a 
                                payment, redistribution, or 
                                allotment under any of 
                                paragraphs (1), (2), or (4) of 
                                subsection (h), the amount of 
                                the projected total Federal 
                                payments to the State under 
                                this title for fiscal year 
                                2007, as determined on the 
                                basis of the November 2006 
                                estimates certified by the 
                                State to the Secretary;
                                  ``(II) a State whose 
                                projected total Federal 
                                payments to the State under 
                                this title for fiscal year 
                                2007, as determined on the 
                                basis of the May 2006 estimates 
                                certified by the State to the 
                                Secretary, were at least 
                                $95,000,000 but not more than 
                                $96,000,000 higher than the 
                                projected total Federal 
                                payments to the State under 
                                this title for fiscal year 2007 
                                on the basis of the November 
                                2006 estimates, the amount of 
                                the projected total Federal 
                                payments to the State under 
                                this title for fiscal year 2007 
                                on the basis of the May 2006 
                                estimates; or
                                  ``(III) a State whose 
                                projected total Federal 
                                payments under this title for 
                                fiscal year 2007, as determined 
                                on the basis of the November 
                                2006 estimates certified by the 
                                State to the Secretary, 
                                exceeded all amounts available 
                                to the State for expenditure 
                                for fiscal year 2007 (including 
                                any amounts paid, allotted, or 
                                redistributed to the State in 
                                prior fiscal years), the amount 
                                of the projected total Federal 
                                payments to the State under 
                                this title for fiscal year 
                                2007, as determined on the 
                                basis of the November 2006 
                                estimates certified by the 
                                State to the Secretary,
                        multiplied by the allotment increase 
                        factor determined under paragraph (5) 
                        for fiscal year 2008.
                          ``(iv) The projected total Federal 
                        payments to the State under this title 
                        for fiscal year 2008, as determined on 
                        the basis of the August 2007 
                        projections certified by the State to 
                        the Secretary by not later than 
                        September 30, 2007.
                  ``(B) For the commonwealths and 
                territories.--Subject to the succeeding 
                provisions of this paragraph and paragraph (4), 
                the Secretary shall allot for fiscal year 2008 
                from the amount made available under subsection 
                (a)(11) 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 1998 through 2007, 
                multiplied by the allotment increase factor 
                determined under paragraph (5) for fiscal year 
                2008, except that subparagraph (B) thereof 
                shall be applied by substituting `the United 
                States' for `the State'.
                  ``(C) Deadline and data for determining 
                fiscal year 2008 allotments.--In computing the 
                amounts under subparagraphs (A) and (B) that 
                determine the allotments to States for fiscal 
                year 2008, the Secretary shall use the most 
                recent data available to the Secretary before 
                the start of that fiscal year. The Secretary 
                may adjust such amounts and allotments, as 
                necessary, on the basis of the expenditure data 
                for the prior year reported by States on CMS 
                Form 64 or CMS Form 21 not later than November 
                30, 2007, but in no case shall the Secretary 
                adjust the allotments provided under 
                subparagraph (A) or (B) for fiscal year 2008 
                after December 31, 2007.
                  ``(D) 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 revised 
                projection described in subparagraph (A)(iv) in 
                order to take into account changes in such 
                projections attributable to the application of 
                paragraph (4) of such section.
          ``(2) For fiscal years 2009 through 2011.--
                  ``(A) In general.--Subject to paragraphs (4) 
                and (6), from the amount made available under 
                paragraphs (12) through (14) of subsection (a) 
                for each of fiscal years 2009 through 2011, 
                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 2009.--For fiscal year 2009, the 
                        allotment of the State is equal to the 
                        sum of--
                                  ``(I) the amount of the State 
                                allotment under paragraph (1) 
                                for fiscal year 2008; and
                                  ``(II) the amount of any 
                                payments made to the State 
                                under subsection (j) for fiscal 
                                year 2008,
                        multiplied by the allotment increase 
                        factor under paragraph (5) for fiscal 
                        year 2009.
                          ``(ii) Rebasing in fiscal year 
                        2010.--For fiscal year 2010, the 
                        allotment of 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 2009 (including 
                        payments made to the State under 
                        subsection (j) for fiscal year 2009 as 
                        well as amounts redistributed to the 
                        State in fiscal year 2009) multiplied 
                        by the allotment increase factor under 
                        paragraph (5) for fiscal year 2010.
                          ``(iii) Growth factor update for 
                        fiscal year 2011.--For fiscal year 
                        2011, the allotment of the State is 
                        equal to the sum of--
                                  ``(I) the amount of the State 
                                allotment under clause (ii) for 
                                fiscal year 2010; and
                                  ``(II) the amount of any 
                                payments made to the State 
                                under subsection (j) for fiscal 
                                year 2010,
                        multiplied by the allotment increase 
                        factor under paragraph (5) for fiscal 
                        year 2011.
          ``(3) For fiscal year 2012.--
                  ``(A) First half.--Subject to paragraphs (4) 
                and (6), from the amount made available under 
                subparagraph (A) of paragraph (15) 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 2007, 
                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 (15) 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 2011 
                (including payments made to the State under 
                subsection (j) for fiscal year 2011 as well as 
                amounts redistributed to the State in fiscal 
                year 2011) multiplied by the allotment increase 
                factor under paragraph (5) for fiscal year 
                2012.
                  ``(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)(15)(A); and
                                  ``(II) the amount of the 
                                appropriation for such period 
                                under section 108 of the 
                                Children's Health Insurance 
                                Program Reauthorization Act of 
                                2007; to
                          ``(ii) the sum of the--
                                  ``(I) amount described in 
                                clause (i); and
                                  ``(II) the amount made 
                                available under subsection 
                                (a)(15)(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 2012, 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 2009 and ending with fiscal year 
                2012); 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 2009 or fiscal year 2011.
          ``(7) Availability of amounts for semi-annual periods 
        in fiscal year 2012.--Each semi-annual allotment made 
        under paragraph (3) for a period in fiscal year 2012 
        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:
  ``(j) 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 2008, an amount 
                        equal to 20 percent of the amount made 
                        available under paragraph (11) of 
                        subsection (a) for the fiscal year; and
                          ``(ii) for each of fiscal years 2009 
                        through 2011 (and for each of the semi-
                        annual allotment periods for fiscal 
                        year 2012) , 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 2009 through 2011 (and for each of 
                the semi-annual allotment periods for fiscal 
                year 2012), 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 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 2008, fiscal 
                year 2009, fiscal year 2010, fiscal year 2011, 
                or a semi-annual allotment period for fiscal 
                year 2012, 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 2008 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 2007 increased by the 
                        population growth for children in that 
                        State for the year ending on June 30, 
                        2006 (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 
                        (i)(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 2008 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 2007, increased by 
                        the annual percentage increase in the 
                        projected per capita amount of National 
                        Health Expenditures (as estimated by 
                        the Secretary) for 2008; 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 2008 
                and ending with fiscal year 2012) 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.--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) For above baseline medicaid 
                        child enrollment costs.--
                                  ``(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)(i)) 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 
                                60 percent of the projected per 
                                capita State Medicaid 
                                expenditures (as determined 
                                under subparagraph (D)(i)) for 
                                the State and fiscal year under 
                                title XIX.
                          ``(ii) For above baseline chip 
                        enrollment costs.--
                                  ``(I) First tier above 
                                baseline chip enrollees.--An 
                                amount equal to the number of 
                                first tier above baseline child 
                                enrollees under this title (as 
                                determined under subparagraph 
                                (C)(i)) for the State and 
                                fiscal year multiplied by 10 
                                percent of the projected per 
                                capita State CHIP expenditures 
                                (as determined under 
                                subparagraph (D)(ii)) for the 
                                State and fiscal year under 
                                this title.
                                  ``(II) Second tier above 
                                baseline chip enrollees.--An 
                                amount equal to the number of 
                                second tier above baseline 
                                child enrollees under this 
                                title (as determined under 
                                subparagraph (C)(ii)) for the 
                                State and fiscal year 
                                multiplied by 40 percent of the 
                                projected per capita State CHIP 
                                expenditures (as determined 
                                under subparagraph (D)(ii)) for 
                                the State and fiscal year under 
                                this title.
                  ``(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 this 
                        title or 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 child health plan 
                                under this title or 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 this title or title 
                                XIX, respectively;
                        but not to exceed 3 percent (in the 
                        case of title XIX) or 7.5 percent (in 
                        the case of this title) 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 this 
                        title or 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 
                                this title or under title XIX, 
                                respectively, 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 this title or title 
                                XIX, respectively, as described 
                                in clause (i)(II), and the 
                                maximum number of first tier 
                                above baseline child enrollees 
                                for the State and fiscal year 
                                under this title or title XIX, 
                                respectively, 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 this title 
                        or title XIX--
                                  ``(I) for fiscal year 2008 is 
                                equal to the monthly average 
                                unduplicated number of 
                                qualifying children enrolled in 
                                the State child health plan 
                                under this title or in the 
                                State plan under title XIX, 
                                respectively, during fiscal 
                                year 2007 increased by the 
                                population growth for children 
                                in that State for the year 
                                ending on June 30, 2006 (as 
                                estimated by the Bureau of the 
                                Census) plus 1 percentage 
                                point; or
                                  ``(II) for a subsequent 
                                fiscal year is equal to the 
                                baseline number of child 
                                enrollees for the State for the 
                                previous fiscal year under this 
                                title or title XIX, 
                                respectively, increased by the 
                                population growth for children 
                                in that State for the year 
                                ending on June 30 before the 
                                beginning of the fiscal year 
                                (as estimated by the Bureau of 
                                the Census) plus 1 percentage 
                                point.
                  ``(D) Projected per capita state 
                expenditures.--For purposes of subparagraph 
                (B)--
                          ``(i) Projected per capita state 
                        medicaid expenditures.--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.
                          ``(ii) Projected per capita state 
                        chip expenditures.--The projected per 
                        capita State CHIP expenditures for a 
                        State and fiscal year under this title 
                        is equal to the average per capita 
                        expenditures (including both State and 
                        Federal financial participation) for 
                        children under the State child health 
                        plan under this title, including under 
                        waivers, 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 enhanced FMAP (as 
                        defined in section 2105(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 
                        $3,000,000,000 for fiscal year 2008 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 
                                        2008 through 2011.--As 
                                        of December 31 of 
                                        fiscal year 2008, and 
                                        as of December 31 of 
                                        each succeeding fiscal 
                                        year through fiscal 
                                        year 2011, the portion, 
                                        if any, of the amount 
                                        appropriated under 
                                        subsection (a) for such 
                                        fiscal year that is 
                                        unobligated for 
                                        allotment to a State 
                                        under subsection (i) 
                                        for such fiscal year or 
                                        set aside under 
                                        subsection (a)(3) or 
                                        (b)(2) of section 2111 
                                        for such fiscal year.
                                          ``(bb) First half of 
                                        fiscal year 2012.--As 
                                        of December 31 of 
                                        fiscal year 2012, the 
                                        portion, if any, of the 
                                        sum of the amounts 
                                        appropriated under 
                                        subsection (a)(15)(A) 
                                        and under section 108 
                                        of the Children's 
                                        Health Insurance 
                                        Reauthorization Act of 
                                        2007 for the period 
                                        beginning on October 1, 
                                        2011, and ending on 
                                        March 31, 2012, that is 
                                        unobligated for 
                                        allotment to a State 
                                        under subsection (i) 
                                        for such fiscal year or 
                                        set aside under 
                                        subsection (b)(2) of 
                                        section 2111 for such 
                                        fiscal year.
                                          ``(cc) Second half of 
                                        fiscal year 2012.--As 
                                        of June 30 of fiscal 
                                        year 2012, the portion, 
                                        if any, of the amount 
                                        appropriated under 
                                        subsection (a)(15)(B) 
                                        for the period 
                                        beginning on April 1, 
                                        2012, and ending on 
                                        September 30, 2012, 
                                        that is unobligated for 
                                        allotment to a State 
                                        under subsection (i) 
                                        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 2009 through 2012, 
                                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 and 2007 
                                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 2009 through 2012, 
                                any amount in excess of the 
                                aggregate cap applicable to the 
                                Child Enrollment Contingency 
                                Fund for the fiscal year under 
                                section 2104(j).
                                  ``(IV) Unexpended 
                                transitional coverage block 
                                grant for nonpregnant childless 
                                adults.--As of October 1, 2009, 
                                any amounts set aside under 
                                section 2111(a)(3) that are not 
                                expended by September 30, 2009.
                          ``(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.--For 
                purposes of this subsection, the term 
                `qualifying children' means, with respect to 
                this title or title XIX, children who meet the 
                eligibility criteria (including income, 
                categorical eligibility, age, and immigration 
                status criteria) in effect as of July 1, 2007, 
                for enrollment under this title or title XIX, 
                respectively, taking into account criteria 
                applied as of such date under this title or 
                title XIX, respectively, pursuant to a waiver 
                under section 1115.
                  ``(G) Application to commonwealths and 
                territories.--The provisions of subparagraph 
                (H) of section 2104(j)(3) shall apply with 
                respect to payments 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 2007.--In the case of a State that 
                provides coverage under paragraph (1) or (2) of 
                section 115(b) of the Children's Health 
                Insurance Program Reauthorization Act of 2007 
                for any fiscal year after fiscal year 2007--
                          ``(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 this title or title XIX for the 
                        third of such fiscal years shall be the 
                        monthly average unduplicated number of 
                        qualifying children enrolled in the 
                        State child health plan under this 
                        title or in the State plan under title 
                        XIX, respectively, 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 4 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.''.

SEC. 105. 2-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 
                2007, shall remain available for expenditure by 
                the State through the end of the second 
                succeeding fiscal year; and
                  ``(B) for fiscal year 2008 and each fiscal 
                year thereafter, shall remain available for 
                expenditure by the State through the end of the 
                succeeding fiscal year.
          ``(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 TO ADDRESS STATE FUNDING 
                    SHORTFALLS.

  (a) Fiscal Year 2005 Allotments.--
          (1) In general.--Notwithstanding section 2104(f) of 
        the Social Security Act (42 U.S.C. 1397dd(f)), subject 
        to paragraph (2), with respect to fiscal year 2008, the 
        Secretary shall provide for a redistribution under such 
        section from the allotments for fiscal year 2005 under 
        subsection (b) and (c) of such section that are not 
        expended by the end of fiscal year 2007, to each State 
        described in clause (iii) of section 2104(i)(1)(A) of 
        the Social Security Act, as added by section 102, of an 
        amount that bears the same ratio to such unexpended 
        fiscal year 2005 allotments as the ratio of the fiscal 
        year 2007 allotment determined for each such State 
        under subsection (b) of section 2104 of such Act for 
        fiscal year 2007 (without regard to any amounts paid, 
        allotted, or redistributed to the State under section 
        2104 for any preceding fiscal year) bears to the total 
        amount of the fiscal year 2007 allotments for all such 
        States (as so determined).
          (2) Contingency.--Paragraph (1) shall not apply if 
        the redistribution described in such paragraph has 
        occurred as of the date of the enactment of this Act.
  (b) Allotments for Subsequent Fiscal Years.--Section 2104(f) 
(42 U.S.C. 1397dd(f)) is amended--
          (1) by striking ``The Secretary'' and inserting the 
        following:
          ``(1) In general.--The Secretary'';
          (2) 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
          (3) 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 (j); 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.''.

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

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

SEC. 108. ONE-TIME APPROPRIATION.

  There is appropriated to the Secretary, out of any money in 
the Treasury not otherwise appropriated, $12,500,000,000 to 
accompany the allotment made for the period beginning on 
October 1, 2011, and ending on March 31, 2012, under section 
2104(a)(15)(A) of the Social Security Act (42 U.S.C. 
1397dd(a)(15)(A)) (as added by section 101), to remain 
available until expended. Such amount shall be used to provide 
allotments to States under paragraph (3) of section 2104(i) of 
the Social Security Act (42 U.S.C. 1397dd(i)), as added by 
section 102, for the first 6 months of fiscal year 2012 in the 
same manner as allotments are provided under subsection 
(a)(15)(A) of such section 2104 and subject to the same terms 
and conditions as apply to the allotments provided from such 
subsection (a)(15)(A).

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

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

      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, 2007; 
                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 
        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) 
        and includes any medical assistance that the State 
        would provide for a pregnant woman under the State plan 
        under title XIX during the period described in 
        paragraph (2)(A).
          ``(2) Targeted low-income pregnant woman.--The term 
        `targeted low-income pregnant woman' means a woman--
                  ``(A) during pregnancy and through the end of 
                the month in which the 60-day period (beginning 
                on the last day of her pregnancy) ends;
                  ``(B) whose family income 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, 2007).
          ``(2) Clarification of authority to provide 
        postpartum services.--Any State that provides child 
        health assistance under any authority described in 
        paragraph (1) may continue to provide such assistance, 
        as well as postpartum services, through the end of the 
        month in which the 60-day period (beginning on the last 
        day of the pregnancy) ends, in the same manner as such 
        assistance and postpartum services would be provided if 
        provided under the State plan under title XIX, but only 
        if the mother would otherwise satisfy the eligibility 
        requirements that apply under the State child health 
        plan (other than with respect to age) during such 
        period.
          ``(3) No inference.--Nothing in this subsection shall 
        be construed--
                  ``(A) to infer congressional intent regarding 
                the legality or illegality of the content of 
                the sections specified in paragraph (1)(A); or
                  ``(B) to modify the authority to provide 
                pregnancy-related services under a waiver 
                specified in paragraph (1)(B).''.
  (b) Additional Conforming Amendments.--
          (1) No cost sharing for pregnancy-related benefits.--
        Section 2103(e)(2) (42 U.S.C. 1397cc(e)(2)) is 
        amended--
                  (A) in the heading, by inserting ``OR 
                PREGNANCY-RELATED ASSISTANCE'' after 
                ``PREVENTIVE SERVICES''; and
                  (B) by inserting before the period at the end 
                the following: ``or for pregnancy-related 
                assistance''.
          (2) No waiting period.--Section 2102(b)(1)(B) (42 
        U.S.C. 1397bb(b)(1)(B)) is amended--
                  (A) in clause (i), by striking ``, and'' at 
                the end and inserting a semicolon;
                  (B) in clause (ii), by striking the period at 
                the end and inserting ``; and''; and
                  (C) by adding at the end the following new 
                clause:
                          ``(iii) may not apply a waiting 
                        period (including a waiting period to 
                        carry out paragraph (3)(C)) in the case 
                        of a targeted low-income pregnant woman 
                        provided pregnancy-related assistance 
                        under section 2112.''.

SEC. 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 fiscal year 2008.--Notwithstanding 
        section 1115 or any other provision of this title, 
        except as provided in this subsection--
                  ``(A) the Secretary shall not on or after the 
                date of the enactment of the Children's Health 
                Insurance Program Reauthorization Act of 2007, 
                approve or renew a waiver, experimental, pilot, 
                or demonstration project that would allow funds 
                made available under this title to be used to 
                provide child health assistance or other health 
                benefits coverage to a nonpregnant childless 
                adult; and
                  ``(B) notwithstanding the terms and 
                conditions of an applicable existing waiver, 
                the provisions of paragraphs (2) and (3) shall 
                apply for purposes of any fiscal year beginning 
                on or after October 1, 2008, in determining the 
                period to which the waiver applies, the 
                individuals eligible to be covered by the 
                waiver, and the amount of the Federal payment 
                under this title.
          ``(2) Termination of chip coverage under applicable 
        existing waivers at the end of fiscal year 2008.--
                  ``(A) In general.--No funds shall be 
                available under this title for child health 
                assistance or other health benefits coverage 
                that is provided to a nonpregnant childless 
                adult under an applicable existing waiver after 
                September 30, 2008.
                  ``(B) Extension upon state request.--If an 
                applicable existing waiver described in 
                subparagraph (A) would otherwise expire before 
                October 1, 2008, and the State requests an 
                extension of such waiver, the Secretary shall 
                grant such an extension, but only through 
                September 30, 2008.
                  ``(C) Application of enhanced fmap.--The 
                enhanced FMAP determined under section 2105(b) 
                shall apply to expenditures under an applicable 
                existing waiver for the provision of child 
                health assistance or other health benefits 
                coverage to a nonpregnant childless adult 
                during fiscal year 2008.
          ``(3) Optional 1-year transitional coverage block 
        grant funded from state allotment.--Subject to 
        paragraph (4)(B), each State for which coverage under 
        an applicable existing waiver is terminated under 
        paragraph (2)(A) may elect to provide nonpregnant 
        childless adults who were provided child health 
        assistance or health benefits coverage under the 
        applicable existing waiver at any time during fiscal 
        year 2008 with such assistance or coverage during 
        fiscal year 2009, as if the authority to provide such 
        assistance or coverage under an applicable existing 
        waiver was extended through that fiscal year, but 
        subject to the following terms and conditions:
                  ``(A) Block grant set aside from state 
                allotment.--The Secretary shall set aside for 
                the State an amount equal to the Federal share 
                of the State's projected expenditures under the 
                applicable existing waiver for providing child 
                health assistance or health benefits coverage 
                to all nonpregnant childless adults under such 
                waiver for fiscal year 2008 (as certified by 
                the State and submitted to the Secretary by not 
                later than August 31, 2008, and without regard 
                to whether any such individual lost coverage 
                during fiscal year 2008 and was later provided 
                child health assistance or other health 
                benefits coverage under the waiver in that 
                fiscal year), increased by the annual 
                adjustment for fiscal year 2009 determined 
                under section 2104(i)(5)(A). The Secretary may 
                adjust the amount set aside under the preceding 
                sentence, as necessary, on the basis of the 
                expenditure data for fiscal year 2008 reported 
                by States on CMS Form 64 or CMS Form 21 not 
                later than November 30, 2008, but in no case 
                shall the Secretary adjust such amount after 
                December 31, 2008.
                  ``(B) No coverage for nonpregnant childless 
                adults who were not covered during fiscal year 
                2008.--
                          ``(i) FMAP applied to expenditures.--
                        The Secretary shall pay the State for 
                        each quarter of fiscal year 2009, from 
                        the amount set aside under subparagraph 
                        (A), an amount equal to the Federal 
                        medical assistance percentage (as 
                        determined under section 1905(b) 
                        without regard to clause (4) of such 
                        section) of expenditures in the quarter 
                        for providing child health assistance 
                        or other health benefits coverage to a 
                        nonpregnant childless adult but only if 
                        such adult was enrolled in the State 
                        program under this title during fiscal 
                        year 2008 (without regard to whether 
                        the individual lost coverage during 
                        fiscal year 2008 and was reenrolled in 
                        that fiscal year or in fiscal year 
                        2009).
                          ``(ii) Federal payments limited to 
                        amount of block grant set-aside.--No 
                        payments shall be made to a State for 
                        expenditures described in this 
                        subparagraph after the total amount set 
                        aside under subparagraph (A) for fiscal 
                        year 2009 has been paid to the State.
          ``(4) State option to apply for medicaid waiver to 
        continue coverage for nonpregnant childless adults.--
                  ``(A) In general.--Each State for which 
                coverage under an applicable existing waiver is 
                terminated under paragraph (2)(A) may submit, 
                not later than June 30, 2009, an application to 
                the Secretary for a waiver under section 1115 
                of the State plan under title XIX to provide 
                medical assistance to a nonpregnant childless 
                adult whose coverage is so terminated (in this 
                subsection referred to as a `Medicaid 
                nonpregnant childless adults waiver').
                  ``(B) Deadline for approval.--The Secretary 
                shall make a decision to approve or deny an 
                application for a Medicaid nonpregnant 
                childless adults waiver submitted under 
                subparagraph (A) within 90 days of the date of 
                the submission of the application. If no 
                decision has been made by the Secretary as of 
                September 30, 2009, on the application of a 
                State for a Medicaid nonpregnant childless 
                adults waiver that was submitted to the 
                Secretary by June 30, 2009, the application 
                shall be deemed approved.
                  ``(C) Standard for budget neutrality.--The 
                budget neutrality requirement applicable with 
                respect to expenditures for medical assistance 
                under a Medicaid nonpregnant childless adults 
                waiver shall--
                          ``(i) in the case of fiscal year 
                        2010, allow expenditures for medical 
                        assistance under title XIX for all such 
                        adults to not exceed the total amount 
                        of payments made to the State under 
                        paragraph (3)(B) for fiscal year 2009, 
                        increased by the percentage increase 
                        (if any) in the projected nominal per 
                        capita amount of National Health 
                        Expenditures for calendar year 2010 
                        over calendar year 2009, as most 
                        recently published by the Secretary; 
                        and
                          ``(ii) in the case of any succeeding 
                        fiscal year, allow such expenditures to 
                        not exceed the amount in effect under 
                        this subparagraph for the preceding 
                        fiscal year, increased by the 
                        percentage increase (if any) in the 
                        projected nominal per capita amount of 
                        National Health Expenditures for the 
                        calendar year that begins during the 
                        fiscal year involved over the preceding 
                        calendar year, as most recently 
                        published by the Secretary.
  ``(b) Rules and Conditions for Coverage of Parents of 
Targeted Low-Income Children.--
          ``(1) Two-year transition period; automatic extension 
        at state option through fiscal year 2009.--
                  ``(A) No new chip waivers.--Notwithstanding 
                section 1115 or any other provision of this 
                title, except as provided in this subsection--
                          ``(i) the Secretary shall not on or 
                        after the date of the enactment of the 
                        Children's Health Insurance Program 
                        Reauthorization Act of 2007 approve or 
                        renew a waiver, experimental, pilot, or 
                        demonstration project that would allow 
                        funds made available under this title 
                        to be used to provide child health 
                        assistance or other health benefits 
                        coverage to a parent of a targeted low-
                        income child; and
                          ``(ii) notwithstanding the terms and 
                        conditions of an applicable existing 
                        waiver, the provisions of paragraphs 
                        (2) and (3) shall apply for purposes of 
                        any fiscal year beginning on or after 
                        October 1, 2009, in determining the 
                        period to which the waiver applies, the 
                        individuals eligible to be covered by 
                        the waiver, and the amount of the 
                        Federal payment under this title.
                  ``(B) Extension upon state request.--If an 
                applicable existing waiver described in 
                subparagraph (A) would otherwise expire before 
                October 1, 2009, and the State requests an 
                extension of such waiver, the Secretary shall 
                grant such an extension, but only, subject to 
                paragraph (2)(A), through September 30, 2009.
                  ``(C) Application of enhanced fmap.--The 
                enhanced FMAP determined under section 2105(b) 
                shall apply to expenditures under an applicable 
                existing waiver for the provision of child 
                health assistance or other health benefits 
                coverage to a parent of a targeted low-income 
                child during fiscal years 2008 and 2009.
          ``(2) Rules for fiscal years 2010 through 2012.--
                  ``(A) Payments for coverage limited to block 
                grant funded from state allotment.--Any State 
                that provides child health assistance or health 
                benefits coverage under an applicable existing 
                waiver for a parent of a targeted low-income 
                child may elect to continue to provide such 
                assistance or coverage through fiscal year 
                2010, 2011, or 2012, subject to the same terms 
                and conditions that applied under the 
                applicable existing waiver, unless otherwise 
                modified in subparagraph (B).
                  ``(B) Terms and conditions.--
                          ``(i) Block grant set aside from 
                        state allotment.--If the State makes an 
                        election under subparagraph (A), the 
                        Secretary shall set aside for the State 
                        for each such fiscal year an amount 
                        equal to the Federal share of 110 
                        percent of the State's projected 
                        expenditures under the applicable 
                        existing waiver for providing child 
                        health assistance or health benefits 
                        coverage to all parents of targeted 
                        low-income children enrolled under such 
                        waiver for the fiscal year (as 
                        certified by the State and submitted to 
                        the Secretary by not later than August 
                        31 of the preceding fiscal year). In 
                        the case of fiscal year 2012, the set 
                        aside for any State shall be computed 
                        separately for each period described in 
                        subparagraphs (A) and (B) of section 
                        2104(a)(15) and any reduction in the 
                        allotment for either such period under 
                        section 2104(i)(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 2010 for states with significant 
                        child outreach or that achieve child 
                        coverage benchmarks; fmap for any other 
                        states.--For purposes of clause (ii), 
                        the applicable percentage for any 
                        quarter of fiscal year 2010 is equal 
                        to--
                                  ``(I) the enhanced FMAP 
                                determined under section 
                                2105(b) in the case of a State 
                                that meets the outreach or 
                                coverage benchmarks described 
                                in any of subparagraphs (A), 
                                (B), or (C) of paragraph (3) 
                                for fiscal year 2009; or
                                  ``(II) the Federal medical 
                                assistance percentage (as 
                                determined under section 
                                1905(b) without regard to 
                                clause (4) of such section) in 
                                the case of any other State.
                          ``(iv) Amount of federal matching 
                        payment in 2011 or 2012.--For purposes 
                        of clause (ii), the applicable 
                        percentage for any quarter of fiscal 
                        year 2011 or 2012 is equal to--
                                  ``(I) the REMAP percentage 
                                if--
                                          ``(aa) the applicable 
                                        percentage for the 
                                        State under clause 
                                        (iii) was the enhanced 
                                        FMAP for fiscal year 
                                        2009; and
                                          ``(bb) the State met 
                                        either of the coverage 
                                        benchmarks described in 
                                        subparagraph (B) or (C) 
                                        of paragraph (3) for 
                                        the preceding fiscal 
                                        year; or
                                  ``(II) the Federal medical 
                                assistance percentage (as so 
                                determined) in the case of any 
                                State to which subclause (I) 
                                does not apply.
                        For purposes of subclause (I), the 
                        REMAP percentage is the percentage 
                        which is the sum of such Federal 
                        medical assistance percentage and a 
                        number of percentage points equal to 
                        one-half of the difference between such 
                        Federal medical assistance percentage 
                        and such enhanced FMAP.
                          ``(v) No federal payments other than 
                        from block grant set aside.--No 
                        payments shall be made to a State for 
                        expenditures described in clause (ii) 
                        after the total amount set aside under 
                        clause (i) for a fiscal year has been 
                        paid to the State.
                          ``(vi) No increase in income 
                        eligibility level for parents.--No 
                        payments shall be made to a State from 
                        the amount set aside under clause (i) 
                        for a fiscal year for expenditures for 
                        providing child health assistance or 
                        health benefits coverage to a parent of 
                        a targeted low-income child whose 
                        family income exceeds the income 
                        eligibility level applied under the 
                        applicable existing waiver to parents 
                        of targeted low-income children on the 
                        date of enactment of the Children's 
                        Health Insurance Program 
                        Reauthorization Act of 2007.
          ``(3) Outreach or coverage benchmarks.--For purposes 
        of paragraph (2), the outreach or coverage benchmarks 
        described in this paragraph are as follows:
                  ``(A) Significant child outreach campaign.--
                The State--
                          ``(i) was awarded a grant under 
                        section 2113 for fiscal year 2009;
                          ``(ii) implemented 1 or more of the 
                        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 2007.
          ``(2) Definitions.--
                  ``(A) Parent.--The term `parent' includes a 
                caretaker relative (as such term is used in 
                carrying out section 1931) and a legal 
                guardian.
                  ``(B) Nonpregnant childless adult.--The term 
                `nonpregnant childless adult' has the meaning 
                given such term by section 2107(f).''.
          (2) Conforming amendments.--
                  (A) Section 2107(f) (42 U.S.C. 1397gg(f)) is 
                amended--
                          (i) by striking ``, the Secretary'' 
                        and inserting ``:
          ``(1) The Secretary'';
                          (ii) in the first sentence, by 
                        inserting ``or a parent (as defined in 
                        section 2111(c)(2)(A)), who is not 
                        pregnant, of a targeted low-income 
                        child'' before the period;
                          (iii) by striking the second 
                        sentence; and
                          (iv) by adding at the end the 
                        following new paragraph:
          ``(2) The Secretary may not approve, extend, renew, 
        or amend a waiver, experimental, pilot, or 
        demonstration project with respect to a State after the 
        date of enactment of the Children's Health Insurance 
        Program Reauthorization Act of 2007 that would waive or 
        modify the requirements of section 2111.''.
                  (B) Section 6102(c) of the Deficit Reduction 
                Act of 2005 (Public Law 109-171; 120 Stat. 131) 
                is amended by striking ``Nothing'' and 
                inserting ``Subject to section 2111 of the 
                Social Security Act, as added by section 112 of 
                the Children's Health Insurance Program 
                Reauthorization Act of 2007, nothing''.
  (b) GAO Study and Report.--
          (1) In general.--The Comptroller General of the 
        United States shall conduct a study of whether--
                  (A) the coverage of a parent, a caretaker 
                relative (as such term is used in carrying out 
                section 1931), or a legal guardian of a 
                targeted low-income child under a State health 
                plan under title XXI of the Social Security Act 
                increases the enrollment of, or the quality of 
                care for, children, and
                  (B) such parents, relatives, and legal 
                guardians who enroll in such a plan are more 
                likely to enroll their children in such a plan 
                or in a State plan under title XIX of such Act.
          (2) Report.--Not later than 2 years after the date of 
        the enactment of this Act, the Comptroller General 
        shall report the results of the study to the 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 2008, the 
                Federal medical assistance percentage (as 
                determined under section 1905(b) without regard 
                to clause (4) of such section) shall be 
                substituted for the enhanced FMAP under 
                subsection (a)(1) with respect to any 
                expenditures for providing child health 
                assistance or health benefits coverage for a 
                targeted low-income child whose effective 
                family income would exceed 300 percent of the 
                poverty line but for the application of a 
                general exclusion of a block of income that is 
                not determined by type of expense or type of 
                income.
                  ``(B) Exception.--Subparagraph (A) shall not 
                apply to any State that, on the date of 
                enactment of the Children's Health Insurance 
                Program Reauthorization Act of 2007, has an 
                approved State plan amendment or waiver to 
                provide, or has enacted a State law to submit a 
                State plan amendment to provide, expenditures 
                described in such subparagraph under the State 
                child health plan.''.
  (b) 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.

  (a) State Authority to Expand Income or Resource Eligibility 
Levels for Children.--Nothing in this Act, the amendments made 
by this Act, or title XIX of the Social Security Act, including 
paragraph (2)(B) of section 1905(u) of such Act, shall be 
construed as limiting the flexibility afforded States under 
such title to increase the income or resource eligibility 
levels for children under a State plan or waiver under such 
title.
  (b) State Authority to Receive Payments Under Medicaid for 
Providing Medical Assistance to Children Eligible as a Result 
of an Income or Resource Eligibility Level Expansion.--A State 
may, notwithstanding the fourth sentence of subsection (b) of 
section 1905 of the Social Security Act (42 U.S.C. 1396d) or 
subsection (u) of such section--
          (1) cover individuals described in section 
        1902(a)(10)(A)(ii)(IX) of the Social Security Act and 
        thereby receive Federal financial participation for 
        medical assistance for such individuals under title XIX 
        of the Social Security Act; or
          (2) receive Federal financial participation for 
        expenditures for medical assistance under Medicaid for 
        children described in paragraph (2)(B) or (3) of 
        section 1905(u) of such Act based on the Federal 
        medical assistance percentage, as otherwise determined 
        based on the first and third sentences of subsection 
        (b) of section 1905 of the Social Security Act, rather 
        than on the basis of an enhanced FMAP (as defined in 
        section 2105(b) of such Act).

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, 2009.
          (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 2007, 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.--Each State that, on or after the 
        best practice application date described in paragraph 
        (3), submits a plan amendment (or waiver request) to 
        provide for eligibility for child health assistance 
        under the State child health plan for higher income 
        children described in section 2105(c)(9)(D) (relating 
        to children whose effective family income exceeds 300 
        percent of the poverty line) shall include with such 
        plan amendment or request a description of how the 
        State--
                  ``(A) will address CHIP crowd-out for such 
                children; and
                  ``(B) will incorporate recommended best 
                practices referred to in such paragraph.
          ``(2) Application to certain states.--Each State 
        that, as of the best practice application date 
        described in paragraph (3), has a State child health 
        plan that provides (whether under the plan or through a 
        waiver) for eligibility for child health assistance for 
        children referred to in paragraph (1) shall submit to 
        the Secretary, not later than 6 months after the date 
        of such application, a State plan amendment describing 
        how the State--
                  ``(A) will address CHIP crowd-out for such 
                children; and
                  ``(B) will incorporate recommended best 
                practices referred to in such paragraph.
          ``(3) 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).
          ``(4) Secretarial review.--The Secretary shall--
                  ``(A) review each State plan amendment or 
                waiver request submitted under paragraph (1) or 
                (2);
                  ``(B) determine whether the amendment or 
                request incorporates recommended best practices 
                referred to in paragraph (3);
                  ``(C) 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.--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 subsection:
          ``(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 2010 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, 
                        2010, 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, 2010, 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).''.
  (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 or medical support order other than 
under the amendments made by this section.

                   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 107, is amended by adding at the end the following:

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

  ``(a) Outreach and Enrollment Grants; National Campaign.--
          ``(1) In general.--From the amounts appropriated 
        under subsection (g), subject to paragraph (2), the 
        Secretary shall award grants to eligible entities 
        during the period of fiscal years 2008 through 2012 to 
        conduct outreach and enrollment efforts that are 
        designed to increase the enrollment and participation 
        of eligible children under this title and title XIX.
          ``(2) Ten percent set aside for national enrollment 
        campaign.--An amount equal to 10 percent of such 
        amounts shall be used by the Secretary for expenditures 
        during such period to carry out a national enrollment 
        campaign in accordance with subsection (h).
  ``(b) Priority for Award of Grants.--
          ``(1) In general.--In awarding grants under 
        subsection (a), the Secretary shall give priority to 
        eligible entities that--
                  ``(A) propose to target geographic areas with 
                high rates of--
                          ``(i) eligible but unenrolled 
                        children, including such children who 
                        reside in rural areas; or
                          ``(ii) racial and ethnic minorities 
                        and health disparity populations, 
                        including those proposals that address 
                        cultural and linguistic barriers to 
                        enrollment; and
                  ``(B) submit the most demonstrable evidence 
                required under paragraphs (1) and (2) of 
                subsection (c).
          ``(2) Ten percent set aside for outreach to indian 
        children.--An amount equal to 10 percent of the funds 
        appropriated under subsection (g) shall be used by the 
        Secretary to award grants to Indian Health Service 
        providers and urban Indian organizations receiving 
        funds under title V of the Indian Health Care 
        Improvement Act (25 U.S.C. 1651 et seq.) for outreach 
        to, and enrollment of, children who are Indians.
  ``(c) Application.--An eligible entity that desires to 
receive a grant under subsection (a) shall submit an 
application to the Secretary in such form and manner, and 
containing such information, as the Secretary may decide. Such 
application shall include--
          ``(1) evidence demonstrating that the entity includes 
        members who have access to, and credibility with, 
        ethnic or low-income populations in the communities in 
        which activities funded under the grant are to be 
        conducted;
          ``(2) evidence demonstrating that the entity has the 
        ability to address barriers to enrollment, such as lack 
        of awareness of eligibility, stigma concerns and 
        punitive fears associated with receipt of benefits, and 
        other cultural barriers to applying for and receiving 
        child health assistance or medical assistance;
          ``(3) specific quality or outcomes performance 
        measures to evaluate the effectiveness of activities 
        funded by a grant awarded under this section; and
          ``(4) an assurance that the eligible entity shall--
                  ``(A) conduct an assessment of the 
                effectiveness of such activities against the 
                performance measures;
                  ``(B) cooperate with the collection and 
                reporting of enrollment data and other 
                information in order for the Secretary to 
                conduct such assessments; and
                  ``(C) in the case of an eligible entity that 
                is not the State, provide the State with 
                enrollment data and other information as 
                necessary for the State to make necessary 
                projections of eligible children and pregnant 
                women.
  ``(d) Dissemination of Enrollment Data and Information 
Determined From Effectiveness Assessments; Annual Report.--The 
Secretary shall--
          ``(1) make publicly available the enrollment data and 
        information collected and reported in accordance with 
        subsection (c)(4)(B); and
          ``(2) submit an annual report to Congress on the 
        outreach and enrollment activities conducted with funds 
        appropriated under this section.
  ``(e) Maintenance of Effort for States Awarded Grants; No 
State Match Required.--In the case of a State that is awarded a 
grant under this section--
          ``(1) the State share of funds expended for outreach 
        and enrollment activities under the State child health 
        plan shall not be less than the State share of such 
        funds expended in the fiscal year preceding the first 
        fiscal year for which the grant is awarded; and
          ``(2) no State matching funds shall be required for 
        the State to receive a grant under this section.
  ``(f) Definitions.--In this section:
          ``(1) Eligible entity.--The term `eligible entity' 
        means any of the following:
                  ``(A) A State with an approved child health 
                plan under this title.
                  ``(B) A local government.
                  ``(C) An Indian tribe or tribal consortium, a 
                tribal organization, an urban Indian 
                organization receiving funds under title V of 
                the Indian Health Care Improvement Act (25 
                U.S.C. 1651 et seq.), or an Indian Health 
                Service provider.
                  ``(D) A Federal health safety net 
                organization.
                  ``(E) A national, State, local, or community-
                based public or nonprofit private organization, 
                including organizations that use community 
                health workers or community-based doula 
                programs.
                  ``(F) A faith-based organization or 
                consortia, to the extent that a grant awarded 
                to such an entity is consistent with the 
                requirements of section 1955 of the Public 
                Health Service Act (42 U.S.C. 300x-65) relating 
                to a grant award to nongovernmental entities.
                  ``(G) An elementary or secondary school.
          ``(2) Federal health safety net organization.--The 
        term `Federal health safety net organization' means--
                  ``(A) a Federally-qualified health center (as 
                defined in section 1905(l)(2)(B));
                  ``(B) a hospital defined as a 
                disproportionate share hospital for purposes of 
                section 1923;
                  ``(C) a covered entity described in section 
                340B(a)(4) of the Public Health Service Act (42 
                U.S.C. 256b(a)(4)); and
                  ``(D) any other entity or consortium that 
                serves children under a federally funded 
                program, including the special supplemental 
                nutrition program for women, infants, and 
                children (WIC) established under section 17 of 
                the Child Nutrition Act of 1966 (42 U.S.C. 
                1786), the Head Start and Early Head Start 
                programs under the Head Start Act (42 U.S.C. 
                9801 et seq.), the school lunch program 
                established under the Richard B. Russell 
                National School Lunch Act, and an elementary or 
                secondary school.
          ``(3) Indians; indian tribe; tribal organization; 
        urban indian organization.--The terms `Indian', `Indian 
        tribe', `tribal organization', and `urban Indian 
        organization' have the meanings given such terms in 
        section 4 of the Indian Health Care Improvement Act (25 
        U.S.C. 1603).
          ``(4) Community health worker.--The term `community 
        health worker' means an individual who promotes health 
        or nutrition within the community in which the 
        individual resides--
                  ``(A) by serving as a liaison between 
                communities and health care agencies;
                  ``(B) by providing guidance and social 
                assistance to community residents;
                  ``(C) by enhancing community residents'' 
                ability to effectively communicate with health 
                care providers;
                  ``(D) by providing culturally and 
                linguistically appropriate health or nutrition 
                education;
                  ``(E) by advocating for individual and 
                community health or nutrition needs; and
                  ``(F) by providing referral and followup 
                services.
  ``(g) Appropriation.--There is appropriated, out of any money 
in the Treasury not otherwise appropriated, $100,000,000 for 
the period of fiscal years 2008 through 2012, 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.--
          (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) and 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 (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)(10), 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 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 Stamp Act of 
                                1977 (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 to 
        with respect to eligibility determinations made after 
        September 30, 2012.''.
          (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, 
        2011, 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 2008 through 2011.
                  (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--
                  (A) by redesignating section 1939 as section 
                1940; and
                  (B) by inserting after section 1938 the 
                following new section:

``SEC. 1939. 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 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 1939 (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 January 1, 2008.

              Subtitle B--Reducing Barriers to Enrollment

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

  (a) State Option To Verify Declaration of Citizenship or 
Nationality for Purposes of Eligibility for Medicaid Through 
Verification of Name and Social Security Number.--
          (1) Alternative to documentation requirement.--
                  (A) In general.--Section 1902 (42 U.S.C. 
                1396a), 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 of the individual is invalid--
                  ``(i) the State makes a reasonable effort to 
                identify and address the causes of such invalid 
                match, including through typographical or other 
                clerical errors, by contacting the individual 
                to confirm the accuracy of the name or social 
                security number, respectively, submitted, 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 that the name or social 
                security number of the individual remains 
                invalid after such reasonable efforts, 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 cure the 
                        invalid determination 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 
                        invalid determination is not cured.
  ``(2)(A) Each State electing to satisfy the requirements of 
this subsection for purposes of section 1902(a)(46)(B) shall 
establish a program under which the State submits each month to 
the Commissioner of Social Security for verification the name 
and social security number of each individual newly enrolled in 
the State plan under this title that month who is not described 
in section 1903(x)(2).
  ``(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 for the electronic submission and 
        verification, through an on-line system or otherwise, 
        of the name and social security number of an individual 
        enrolled in the State plan under this title;
          ``(ii) to submit to the Commissioner the names and 
        social security numbers of such individuals on a batch 
        basis, provided that such batches are submitted at 
        least on a monthly basis; or
          ``(iii) to provide for the verification of the names 
        and social security numbers of such individuals 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) or (ii).
  ``(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 invalid names and numbers submitted bears 
to the total submitted for verification. For purposes of the 
previous sentence, a name or social security number of an 
individual shall be treated as invalid and included in the 
determination of such percentage only if--
          ``(i) the name or social security number, 
        respectively, submitted by the individual does not 
        match Social Security Administration records;
          ``(ii) the inconsistency between the name or number, 
        respectively, so submitted and the Social Security 
        Administration records could not be resolved by the 
        State;
          ``(iii) the individual was provided with a reasonable 
        period of time to resolve the inconsistency with the 
        Social Security Administration or provide satisfactory 
        documentation of citizenship 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 invalid 
        information as the number of individuals with invalid 
        information in excess of 3 percent of such total 
        submitted bears to the total number of individuals with 
        invalid information.
  ``(C) The Secretary may waive, in certain limited cases, all 
or part of the payment under subparagraph (B)(ii) if the State 
is unable to reach the allowable error rate despite a good 
faith effort by such State.
  ``(D) This paragraph shall not apply to a State for a fiscal 
year if there is an agreement described in paragraph (2)(B) in 
effect as of the close of the fiscal year.
  ``(4) Nothing in this subsection shall affect the rights of 
any individual under this title to appeal any disenrollment 
from a State plan.''.
                  (B) Costs of implementing and maintaining 
                system.--Section 1903(a)(3) (42 U.S.C. 
                1396b(a)(3)) is amended--
                          (i) by striking ``plus'' at the end 
                        of subparagraph (E) and inserting 
                        ``and'', and
                          (ii) by adding at the end the 
                        following new subparagraph:
                  ``(F)(i) 90 percent of the sums expended 
                during the quarter as are attributable to the 
                design, development, or installation of such 
                mechanized verification and information 
                retrieval systems as the Secretary determines 
                are necessary to implement section 1902(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)''.
  (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 sections 114(a) and 116(c), 
        is amended by adding at the end the following new 
        paragraph:
          ``(10) 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 this 
                section shall take effect on October 1, 2008.
                  (B) Technical amendments.--The amendments 
                made by--
                          (i) paragraphs (1), (2), and (3) of 
                        subsection (b) shall take effect as if 
                        included in the enactment of section 
                        6036 of the Deficit Reduction Act of 
                        2005 (Public Law 109-171; 120 Stat. 
                        80); and
                          (ii) paragraph (4) of subsection (b) 
                        shall take effect as if included in the 
                        enactment of section 405 of division B 
                        of the Tax Relief and Health Care Act 
                        of 2006 (Public Law 109-432; 120 Stat. 
                        2996).
          (2) Restoration of eligibility.--In the case of an 
        individual who, during the period that began on July 1, 
        2006, and ends on October 1, 2008, was determined to be 
        ineligible for medical assistance under a State 
        Medicaid plan, including any waiver of such plan, 
        solely as a result of the application of subsections 
        (i)(22) and (x) of section 1903 of the Social Security 
        Act (as in effect during such period), but who would 
        have been determined eligible for such assistance if 
        such subsections, as amended by subsection (b), had 
        applied to the individual, a State may deem the 
        individual to be eligible for such assistance as of the 
        date that the individual was determined to be 
        ineligible for such medical assistance on such basis.
          (3) Special transition rule for indians.--During the 
        period that begins on July 1, 2006, and ends on the 
        effective date of final regulations issued under 
        subclause (II) of section 1903(x)(3)(B)(v) of the 
        Social Security Act (42 U.S.C. 1396b(x)(3)(B)(v)) (as 
        added by subsection (b)(1)(B)), an individual who is a 
        member of a federally-recognized Indian tribe described 
        in subclause (II) of that section who presents a 
        document described in subclause (I) of such section 
        that is issued by such Indian tribe, shall be deemed to 
        have presented satisfactory evidence of citizenship or 
        nationality for purposes of satisfying the requirement 
        of subsection (x) of section 1903 of such Act.

SEC. 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).

      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), 116(c), and 
        211(c), is amended by adding at the end the following:
          ``(11) 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 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 2007.
                  ``(K) Notice of availability.--If a State 
                elects to provide premium assistance subsidies 
                in accordance with this paragraph, the State 
                shall--
                          ``(i) include on any application or 
                        enrollment form for child health 
                        assistance a notice of the availability 
                        of premium assistance subsidies for the 
                        enrollment of targeted low-income 
                        children in qualified employer-
                        sponsored coverage;
                          ``(ii) provide, as part of the 
                        application and enrollment process 
                        under the State child health plan, 
                        information describing the availability 
                        of such subsidies and how to elect to 
                        obtain such a subsidy; and
                          ``(iii) establish such other 
                        procedures as the State determines 
                        necessary to ensure that parents are 
                        fully informed of the choices for 
                        receiving child health assistance under 
                        the State child health plan or through 
                        the receipt of premium assistance 
                        subsidies.
                  ``(L) Application to qualified employer-
                sponsored benchmark coverage.--If a group 
                health plan or health insurance coverage 
                offered through an employer is certified by an 
                actuary as health benefits coverage that is 
                equivalent to the benefits coverage in a 
                benchmark benefit package described in section 
                2103(b) or benchmark-equivalent coverage that 
                meets the requirements of section 2103(a)(2), 
                the State may provide premium assistance 
                subsidies for enrollment of targeted low-income 
                children in such group health plan or health 
                insurance coverage in the same manner as such 
                subsidies are provided under this paragraph for 
                enrollment in qualified employer-sponsored 
                coverage, but without regard to the requirement 
                to provide supplemental coverage for benefits 
                and cost-sharing protection provided under the 
                State child health plan under subparagraph (E).
                  ``(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).''.
          (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
                  ``(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, 2009, 
the Comptroller General of the United States shall study cost 
and coverage issues relating to any State premium assistance 
programs for which Federal matching payments are made under 
title XIX or XXI of the Social Security Act, including under 
waiver authority, and shall submit a report to the 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 
        paragraphs (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 301(c)(2), is amended 
by adding at the end the following new clause:
                          ``(iv) Expenditures for outreach to 
                        increase the enrollment of children 
                        under this title and title xix through 
                        premium assistance subsidies.--
                        Expenditures for outreach activities to 
                        families of children likely to be 
                        eligible for premium assistance 
                        subsidies in accordance with paragraphs 
                        (2)(B), (3), or (10), or a waiver 
                        approved under section 1115, to inform 
                        such families of the availability of, 
                        and to assist them in enrolling their 
                        children in, such subsidies, and to 
                        employers likely to provide qualified 
                        employer-sponsored coverage (as defined 
                        in subparagraph (B) of such paragraph), 
                        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 2007, so as to 
                        permit the State to make a 
                        determination (under paragraph (2)(B), 
                        (3), or (10) of section 2105(c) of the 
                        Social Security Act or otherwise) 
                        concerning the cost-effectiveness of 
                        the State providing medical or child 
                        health assistance through premium 
                        assistance for the purchase of coverage 
                        under such group health plan and in 
                        order for the State to provide 
                        supplemental benefits required under 
                        paragraph (10)(E) of such section or 
                        other authority.''.
  (b) Conforming Amendments.--
          (1) Amendments to employee retirement income security 
        act.--
                  (A) In general.--Section 701(f) of the 
                Employee Retirement Income Security Act of 1974 
                (29 U.S.C. 1181(f)) is amended by adding at the 
                end the following new paragraph:
          ``(3) Special rules for application in case of 
        medicaid and chip.--
                  ``(A) In general.--A group health plan, and a 
                health insurance issuer offering group health 
                insurance coverage in connection with a group 
                health plan, shall permit an employee who is 
                eligible, but not enrolled, for coverage under 
                the terms of the plan (or a dependent of such 
                an employee if the dependent is eligible, but 
                not enrolled, for coverage under such terms) to 
                enroll for coverage under the terms of the plan 
                if either of the following conditions is met:
                          ``(i) Termination of medicaid or chip 
                        coverage.--The employee or dependent is 
                        covered under a Medicaid plan under 
                        title XIX of the Social Security Act or 
                        under a State child health plan under 
                        title XXI of such Act and coverage of 
                        the employee or dependent under such a 
                        plan is terminated as a result of loss 
                        of eligibility for such coverage and 
                        the employee requests coverage under 
                        the group health plan (or health 
                        insurance coverage) not later than 60 
                        days after the date of termination of 
                        such coverage.
                          ``(ii) Eligibility for employment 
                        assistance under medicaid or chip.--The 
                        employee or dependent becomes eligible 
                        for assistance, with respect to 
                        coverage under the group health plan or 
                        health insurance coverage, under such 
                        Medicaid plan or State child health 
                        plan (including under any waiver or 
                        demonstration project conducted under 
                        or in relation to such a plan), if the 
                        employee requests coverage under the 
                        group health plan or health insurance 
                        coverage not later than 60 days after 
                        the date the employee or dependent is 
                        determined to be eligible for such 
                        assistance.
                  ``(B) Coordination with medicaid and chip.--
                          ``(i) Outreach to employees regarding 
                        availability of medicaid and chip 
                        coverage.--
                                  ``(I) In general.--Each 
                                employer that maintains a group 
                                health plan in a State that 
                                provides medical assistance 
                                under a State Medicaid plan 
                                under title XIX of the Social 
                                Security Act, or child health 
                                assistance under a State child 
                                health plan under title XXI of 
                                such Act, in the form of 
                                premium assistance for the 
                                purchase of coverage under a 
                                group health plan, shall 
                                provide to each employee a 
                                written notice informing the 
                                employee of potential 
                                opportunities then currently 
                                available in the State in which 
                                the employee resides for 
                                premium assistance under such 
                                plans for health coverage of 
                                the employee or the employee's 
                                dependents.
                                  ``(II) Model notice.--Not 
                                later than 1 year after the 
                                date of enactment of the 
                                Children's Health Insurance 
                                Program Reauthorization Act of 
                                2007, the Secretary and the 
                                Secretary of Health and Human 
                                Services, in consultation with 
                                Directors of State Medicaid 
                                agencies under title XIX of the 
                                Social Security Act and 
                                Directors of State CHIP 
                                agencies under title XXI of 
                                such Act, shall jointly develop 
                                national and State-specific 
                                model notices for purposes of 
                                subparagraph (A). The Secretary 
                                shall provide employers with 
                                such model notices so as to 
                                enable employers to timely 
                                comply with the requirements of 
                                subparagraph (A). Such model 
                                notices shall include 
                                information regarding how an 
                                employee may contact the State 
                                in which the employee resides 
                                for additional information 
                                regarding potential 
                                opportunities for such premium 
                                assistance, including how to 
                                apply for such assistance.
                                  ``(III) Option to provide 
                                concurrent with provision of 
                                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 2007, so as to 
                        permit the State to make a 
                        determination (under paragraph (2)(B), 
                        (3), or (10) of section 2105(c) of the 
                        Social Security Act or otherwise) 
                        concerning the cost-effectiveness of 
                        the State providing medical or child 
                        health assistance through premium 
                        assistance for the purchase of coverage 
                        under such group health plan and in 
                        order for the State to provide 
                        supplemental benefits required under 
                        paragraph (10)(E) of such section or 
                        other authority.''.
                  (B) Conforming amendment.--Section 102(b) of 
                the Employee Retirement Income Security Act of 
                1974 (29 U.S.C. 1022(b)) is amended--
                          (i) by striking ``and the remedies'' 
                        and inserting ``, the remedies''; and
                          (ii) by inserting before the period 
                        the following: ``, and if the employer 
                        so elects for purposes of complying 
                        with section 701(f)(3)(B)(i), the model 
                        notice applicable to the State in which 
                        the participants and beneficiaries 
                        reside''.
                  (C) Working group to develop model coverage 
                coordination disclosure form.--
                          (i) Medicaid, chip, and employer-
                        sponsored coverage coordination working 
                        group.--
                                  (I) In general.--Not later 
                                than 60 days after the date of 
                                enactment of this Act, the 
                                Secretary of Health and Human 
                                Services and the Secretary of 
                                Labor shall jointly establish a 
                                Medicaid, CHIP, and Employer-
                                Sponsored Coverage Coordination 
                                Working Group (in this 
                                subparagraph referred to as the 
                                ``Working Group''). The purpose 
                                of the Working Group shall be 
                                to develop the model coverage 
                                coordination disclosure form 
                                described in subclause (II) and 
                                to identify the impediments to 
                                the effective coordination of 
                                coverage available to families 
                                that include employees of 
                                employers that maintain group 
                                health plans and members who 
                                are eligible for medical 
                                assistance under title XIX of 
                                the Social Security Act or 
                                child health assistance or 
                                other health benefits coverage 
                                under title XXI of such Act.
                                  (II) Model coverage 
                                coordination disclosure form 
                                described.--The model form 
                                described in this subclause is 
                                a form for plan administrators 
                                of group health plans to 
                                complete for purposes of 
                                permitting a State to determine 
                                the availability and cost-
                                effectiveness of the coverage 
                                available under such plans to 
                                employees who have family 
                                members who are eligible for 
                                premium assistance offered 
                                under a State plan under title 
                                XIX or XXI of such Act and to 
                                allow for coordination of 
                                coverage for enrollees of such 
                                plans. Such form shall provide 
                                the following information in 
                                addition to such other 
                                information as the Working 
                                Group determines appropriate:
                                          (aa) A determination 
                                        of whether the employee 
                                        is eligible for 
                                        coverage under the 
                                        group health plan.
                                          (bb) The name and 
                                        contract information of 
                                        the plan administrator 
                                        of the group health 
                                        plan.
                                          (cc) The benefits 
                                        offered under the plan.
                                          (dd) The premiums and 
                                        cost-sharing required 
                                        under the plan.
                                          (ee) Any other 
                                        information relevant to 
                                        coverage under the 
                                        plan.
                          (ii) Membership.--The Working Group 
                        shall consist of not more than 30 
                        members and shall be composed of 
                        representatives of--
                                  (I) the Department of Labor;
                                  (II) the Department of Health 
                                and Human Services;
                                  (III) State directors of the 
                                Medicaid program under title 
                                XIX of the Social Security Act;
                                  (IV) State directors of the 
                                State Children's Health 
                                Insurance Program under title 
                                XXI of the Social Security Act;
                                  (V) employers, including 
                                owners of small businesses and 
                                their trade or industry 
                                representatives and certified 
                                human resource and payroll 
                                professionals;
                                  (VI) plan administrators and 
                                plan sponsors of group health 
                                plans (as defined in section 
                                607(1) of the Employee 
                                Retirement Income Security Act 
                                of 1974);
                                  (VII) health insurance 
                                issuers; and
                                  (VIII) children and other 
                                beneficiaries of medical 
                                assistance under title XIX of 
                                the Social Security Act or 
                                child health assistance or 
                                other health benefits coverage 
                                under title XXI of such Act.
                          (iii) Compensation.--The members of 
                        the Working Group shall serve without 
                        compensation.
                          (iv) Administrative support.--The 
                        Department of Health and Human Services 
                        and the Department of Labor shall 
                        jointly provide appropriate 
                        administrative support to the Working 
                        Group, including technical assistance. 
                        The Working Group may use the services 
                        and facilities of either such 
                        Department, with or without 
                        reimbursement, as jointly determined by 
                        such Departments.
                          (v) Report.--
                                  (I) Report by working group 
                                to the secretaries.--Not later 
                                than 18 months after the date 
                                of the enactment of this Act, 
                                the Working Group shall submit 
                                to the Secretary of Labor and 
                                the Secretary of Health and 
                                Human Services the model form 
                                described in clause (i)(II) 
                                along with a report containing 
                                recommendations for appropriate 
                                measures to address the 
                                impediments to the effective 
                                coordination of coverage 
                                between group health plans and 
                                the State plans under titles 
                                XIX and XXI of the Social 
                                Security Act.
                                  (II) Report by secretaries to 
                                the congress.--Not later than 2 
                                months after receipt of the 
                                report pursuant to subclause 
                                (I), the Secretaries shall 
                                jointly submit a report to each 
                                House of the Congress regarding 
                                the recommendations contained 
                                in the report under such 
                                subclause.
                          (vi) Termination.--The Working Group 
                        shall terminate 30 days after the date 
                        of the issuance of its report under 
                        clause (v).
                  (D) Effective dates.--The Secretary of Labor 
                and the Secretary of Health and Human Services 
                shall develop the initial model notices under 
                section 701(f)(3)(B)(i)(II) of the Employee 
                Retirement Income Security Act of 1974, and the 
                Secretary of Labor shall provide such notices 
                to employers, not later than the date that is 1 
                year after the date of enactment of this Act, 
                and each employer shall provide the initial 
                annual notices to such employer's employees 
                beginning with the first plan year that begins 
                after the date on which such initial model 
                notices are first issued. The model coverage 
                coordination disclosure form developed under 
                subparagraph (C) shall apply with respect to 
                requests made by States beginning with the 
                first plan year that begins after the date on 
                which such model coverage coordination 
                disclosure form is first issued.
                  (E) Enforcement.--Section 502 of the Employee 
                Retirement Income Security Act of 1974 (29 
                U.S.C. 1132) is amended--
                          (i) in subsection (a)(6), by striking 
                        ``or (8)'' and inserting ``(8), or 
                        (9)''; and
                          (ii) in subsection (c), by 
                        redesignating paragraph (9) as 
                        paragraph (10), and by inserting after 
                        paragraph (8) the following:
  ``(9)(A) The Secretary may assess a civil penalty against any 
employer of up to $100 a day from the date of the employer's 
failure to meet the notice requirement of section 
701(f)(3)(B)(i)(I). For purposes of this subparagraph, each 
violation with respect to any single employee shall be treated 
as a separate violation.
  ``(B) The Secretary may assess a civil penalty against any 
plan administrator of up to $100 a day from the date of the 
plan administrator's failure to timely provide to any State the 
information required to be disclosed under section 
701(f)(3)(B)(ii). For purposes of this subparagraph, each 
violation with respect to any single participant or beneficiary 
shall be treated as a separate violation.''.
          (2) Amendments to public health service act.--Section 
        2701(f) of the Public Health Service Act (42 U.S.C. 
        300gg(f)) is amended by adding at the end the following 
        new paragraph:
          ``(3) Special rules for application in case of 
        medicaid and chip.--
                  ``(A) In general.--A group health plan, and a 
                health insurance issuer offering group health 
                insurance coverage in connection with a group 
                health plan, shall permit an employee who is 
                eligible, but not enrolled, for coverage under 
                the terms of the plan (or a dependent of such 
                an employee if the dependent is eligible, but 
                not enrolled, for coverage under such terms) to 
                enroll for coverage under the terms of the plan 
                if either of the following conditions is met:
                          ``(i) Termination of medicaid or chip 
                        coverage.--The employee or dependent is 
                        covered under a Medicaid plan under 
                        title XIX of the Social Security Act or 
                        under a State child health plan under 
                        title XXI of such Act and coverage of 
                        the employee or dependent under such a 
                        plan is terminated as a result of loss 
                        of eligibility for such coverage and 
                        the employee requests coverage under 
                        the group health plan (or health 
                        insurance coverage) not later than 60 
                        days after the date of termination of 
                        such coverage.
                          ``(ii) Eligibility for employment 
                        assistance under medicaid or chip.--The 
                        employee or dependent becomes eligible 
                        for assistance, with respect to 
                        coverage under the group health plan or 
                        health insurance coverage, under such 
                        Medicaid plan or State child health 
                        plan (including under any waiver or 
                        demonstration project conducted under 
                        or in relation to such a plan), if the 
                        employee requests coverage under the 
                        group health plan or health insurance 
                        coverage not later than 60 days after 
                        the date the employee or dependent is 
                        determined to be eligible for such 
                        assistance.
                  ``(B) Coordination with medicaid and chip.--
                          ``(i) Outreach to employees regarding 
                        availability of medicaid and chip 
                        coverage.--
                                  ``(I) In general.--Each 
                                employer that maintains a group 
                                health plan in a State that 
                                provides medical assistance 
                                under a State Medicaid plan 
                                under title XIX of the Social 
                                Security Act, or child health 
                                assistance under a State child 
                                health plan under title XXI of 
                                such Act, in the form of 
                                premium assistance for the 
                                purchase of coverage under a 
                                group health plan, shall 
                                provide to each employee a 
                                written notice informing the 
                                employee of potential 
                                opportunities then currently 
                                available in the State in which 
                                the employee resides for 
                                premium assistance under such 
                                plans for health coverage of 
                                the employee or the employee's 
                                dependents. For purposes of 
                                compliance with this subclause, 
                                the employer may use any State-
                                specific model notice developed 
                                in accordance with section 
                                701(f)(3)(B)(i)(II) of the 
                                Employee Retirement Income 
                                Security Act of 1974 (29 U.S.C. 
                                1181(f)(3)(B)(i)(II)).
                                  ``(II) Option to provide 
                                concurrent with provision of 
                                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 2007, so as to 
                        permit the State to make a 
                        determination (under paragraph (2)(B), 
                        (3), or (10) of section 2105(c) of the 
                        Social Security Act or otherwise) 
                        concerning the cost-effectiveness of 
                        the State providing medical or child 
                        health assistance through premium 
                        assistance for the purchase of coverage 
                        under such group health plan and in 
                        order for the State to provide 
                        supplemental benefits required under 
                        paragraph (10)(E) of such section or 
                        other authority.''.

      TITLE 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, 2009, 
        the Secretary shall identify and publish for general 
        comment an initial, recommended core set of child 
        health quality measures for use by State programs 
        administered under titles XIX and XXI, health insurance 
        issuers and managed care entities that enter into 
        contracts with such programs, and providers of items 
        and services under such programs.
          ``(2) Identification of initial core measures.--In 
        consultation with the individuals and entities 
        described in subsection (b)(3), the Secretary shall 
        identify existing quality of care measures for children 
        that are in use under public and privately sponsored 
        health care coverage arrangements, or that are part of 
        reporting systems that measure both the presence and 
        duration of health insurance coverage over time.
          ``(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 2007, the Secretary, in 
        consultation with States, shall develop a standardized 
        format for reporting information and procedures and 
        approaches that encourage States to use the initial 
        core measurement set to voluntarily report information 
        regarding the quality of pediatric health care under 
        titles XIX and XXI.
          ``(5) Adoption of best practices in implementing 
        quality programs.--The Secretary shall disseminate 
        information to States regarding best practices among 
        States with respect to measuring and reporting on the 
        quality of health care for children, and shall 
        facilitate the adoption of such best practices. In 
        developing best practices approaches, the Secretary 
        shall give particular attention to State measurement 
        techniques that ensure the timeliness and accuracy of 
        provider reporting, encourage provider reporting 
        compliance, encourage successful quality improvement 
        strategies, and improve efficiency in data collection 
        using health information technology.
          ``(6) Reports to congress.--Not later than January 1, 
        2010, and every 3 years thereafter, the Secretary shall 
        report to Congress on--
                  ``(A) the status of the Secretary's efforts 
                to improve--
                          ``(i) quality related to the duration 
                        and stability of health insurance 
                        coverage for children under titles XIX 
                        and XXI;
                          ``(ii) the quality of children's 
                        health care under such titles, 
                        including preventive health services, 
                        health care for acute conditions, 
                        chronic health care, and health 
                        services to ameliorate the effects of 
                        physical and mental conditions and to 
                        aid in growth and development of 
                        infants, young children, school-age 
                        children, and adolescents with special 
                        health care needs; and
                          ``(iii) the quality of children's 
                        health care under such titles across 
                        the domains of quality, including 
                        clinical quality, health care safety, 
                        family experience with health care, 
                        health care in the most integrated 
                        setting, and elimination of racial, 
                        ethnic, and socioeconomic disparities 
                        in health and health care;
                  ``(B) the status of voluntary reporting by 
                States under titles XIX and XXI, utilizing the 
                initial core quality measurement set; and
                  ``(C) any recommendations for legislative 
                changes needed to improve the quality of care 
                provided to children under titles XIX and XXI, 
                including recommendations for quality reporting 
                by States.
          ``(7) Technical assistance.--The Secretary shall 
        provide technical assistance to States to assist them 
        in adopting and utilizing core child health quality 
        measures in administering the State plans under titles 
        XIX and XXI.
          ``(8) Definition of core set.--In this section, the 
        term `core set' means a group of valid, reliable, and 
        evidence-based quality measures that, taken together--
                  ``(A) provide information regarding the 
                quality of health coverage and health care for 
                children;
                  ``(B) address the needs of children 
                throughout the developmental age span; and
                  ``(C) allow purchasers, families, and health 
                care providers to understand the quality of 
                care in relation to the preventive needs of 
                children, treatments aimed at managing and 
                resolving acute conditions, and diagnostic and 
                treatment services whose purpose is to correct 
                or ameliorate physical, mental, or 
                developmental conditions that could, if 
                untreated or poorly treated, become chronic.
  ``(b) Advancing and Improving Pediatric Quality Measures.--
          ``(1) Establishment of pediatric quality measures 
        program.--Not later than January 1, 2010, the Secretary 
        shall establish a pediatric quality measures program 
        to--
                  ``(A) improve and strengthen the initial core 
                child health care quality measures established 
                by the Secretary under subsection (a);
                  ``(B) expand on existing pediatric quality 
                measures used by public and private health care 
                purchasers and advance the development of such 
                new and emerging quality measures; and
                  ``(C) increase the portfolio of evidence-
                based, consensus pediatric quality measures 
                available to public and private purchasers of 
                children's health care services, providers, and 
                consumers.
          ``(2) Evidence-based measures.--The measures 
        developed under the pediatric quality measures program 
        shall, at a minimum, be--
                  ``(A) evidence-based and, where appropriate, 
                risk adjusted;
                  ``(B) designed to identify and eliminate 
                racial and ethnic disparities in child health 
                and the provision of health care;
                  ``(C) designed to ensure that the data 
                required for such measures is collected and 
                reported in a standard format that permits 
                comparison of quality and data at a State, 
                plan, and provider level;
                  ``(D) periodically updated; and
                  ``(E) responsive to the child health needs, 
                services, and domains of health care quality 
                described in clauses (i), (ii), and (iii) of 
                subsection (a)(6)(A).
          ``(3) Process for pediatric quality measures 
        program.--In identifying gaps in existing pediatric 
        quality measures and establishing priorities for 
        development and advancement of such measures, the 
        Secretary shall consult with--
                  ``(A) States;
                  ``(B) pediatricians, children's hospitals, 
                and other primary and specialized pediatric 
                health care professionals (including members of 
                the allied health professions) who specialize 
                in the care and treatment of children, 
                particularly children with special physical, 
                mental, and developmental health care needs;
                  ``(C) dental professionals, including 
                pediatric dental professionals;
                  ``(D) health care providers that furnish 
                primary health care to children and families 
                who live in urban and rural medically 
                underserved communities or who are members of 
                distinct population sub-groups at heightened 
                risk for poor health outcomes;
                  ``(E) national organizations representing 
                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, 
        2012, and annually thereafter, the Secretary shall 
        publish recommended changes to the core measures 
        described in subsection (a) that shall reflect the 
        testing, validation, and consensus process for the 
        development of pediatric quality measures described in 
        subsection paragraphs (1) through (4).
          ``(6) Definition of pediatric quality measure.--In 
        this subsection, the term `pediatric quality measure' 
        means a measurement of clinical care that is capable of 
        being examined through the collection and analysis of 
        relevant information, that is developed in order to 
        assess 1 or more aspects of pediatric health care 
        quality in various institutional and ambulatory health 
        care settings, including the structure of the clinical 
        care system, the process of care, the outcome of care, 
        or patient experiences in care.
          ``(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, 
        2009, and annually thereafter, the Secretary shall 
        collect, analyze, and make publicly available the 
        information reported by States under paragraph (1).
  ``(d) Demonstration Projects for Improving the Quality of 
Children's Health Care and the Use of Health Information 
Technology.--
          ``(1) In general.--During the period of fiscal years 
        2008 through 2012, the Secretary shall award not more 
        than 10 grants to States and child health providers to 
        conduct demonstration projects to evaluate promising 
        ideas for improving the quality of children's health 
        care provided under title XIX or XXI, including 
        projects to--
                  ``(A) experiment with, and evaluate the use 
                of, new measures of the quality of children's 
                health care under such titles (including 
                testing the validity and suitability for 
                reporting of such measures);
                  ``(B) promote the use of health information 
                technology in care delivery for children under 
                such titles;
                  ``(C) evaluate provider-based models which 
                improve the delivery of children's health care 
                services under such titles, including care 
                management for children with chronic conditions 
                and the use of evidence-based approaches to 
                improve the effectiveness, safety, and 
                efficiency of health care services for 
                children; or
                  ``(D) demonstrate the impact of the model 
                electronic health record format for children 
                developed and disseminated under subsection (f) 
                on improving pediatric health, including the 
                effects of chronic childhood health conditions, 
                and pediatric health care quality as well as 
                reducing health care costs.
          ``(2) Requirements.--In awarding grants under this 
        subsection, the Secretary shall ensure that--
                  ``(A) only 1 demonstration project funded 
                under a grant awarded under this subsection 
                shall be conducted in a State; and
                  ``(B) demonstration projects funded under 
                grants awarded under this subsection shall be 
                conducted evenly between States with large 
                urban areas and States with large rural areas.
          ``(3) Authority for multistate projects.--A 
        demonstration project conducted with a grant awarded 
        under this subsection may be conducted on a multistate 
        basis, as needed.
          ``(4) Funding.--$20,000,000 of the amount 
        appropriated under subsection (i) for a fiscal year 
        shall be used to carry out this subsection.
  ``(e) Childhood Obesity Demonstration Project.--
          ``(1) Authority to conduct demonstration.--The 
        Secretary, in consultation with the Administrator of 
        the Centers for Medicare & Medicaid Services, shall 
        conduct a demonstration project to develop a 
        comprehensive and systematic model for reducing 
        childhood obesity by awarding grants to eligible 
        entities to carry out such project. Such model shall--
                  ``(A) identify, through self-assessment, 
                behavioral risk factors for obesity among 
                children;
                  ``(B) identify, through self-assessment, 
                needed clinical preventive and screening 
                benefits among those children identified as 
                target individuals on the basis of such risk 
                factors;
                  ``(C) provide ongoing support to such target 
                individuals and their families to reduce risk 
                factors and promote the appropriate use of 
                preventive and screening benefits; and
                  ``(D) be designed to improve health outcomes, 
                satisfaction, quality of life, and appropriate 
                use of items and services for which medical 
                assistance is available under title XIX or 
                child health assistance is available under 
                title XXI among such target individuals.
          ``(2) Eligibility entities.--For purposes of this 
        subsection, an eligible entity is any of the following:
                  ``(A) A city, county, or Indian tribe.
                  ``(B) A local or tribal educational agency.
                  ``(C) An accredited university, college, or 
                community college.
                  ``(D) A Federally-qualified health center.
                  ``(E) A local health department.
                  ``(F) A health care provider.
                  ``(G) A community-based organization.
                  ``(H) Any other entity determined appropriate 
                by the Secretary, including a consortia or 
                partnership of entities described in any of 
                subparagraphs (A) through (G).
          ``(3) Use of funds.--An eligible entity awarded a 
        grant under this subsection shall use the funds made 
        available under the grant to--
                  ``(A) carry out community-based activities 
                related to reducing childhood obesity, 
                including by--
                          ``(i) forming partnerships with 
                        entities, including schools and other 
                        facilities providing recreational 
                        services, to establish programs for 
                        after school and weekend community 
                        activities that are designed to reduce 
                        childhood obesity;
                          ``(ii) forming partnerships with 
                        daycare facilities to establish 
                        programs that promote healthy eating 
                        behaviors and physical activity; and
                          ``(iii) developing and evaluating 
                        community educational activities 
                        targeting good nutrition and promoting 
                        healthy eating behaviors;
                  ``(B) carry out age-appropriate school-based 
                activities that are designed to reduce 
                childhood obesity, including by--
                          ``(i) developing and testing 
                        educational curricula and intervention 
                        programs designed to promote healthy 
                        eating behaviors and habits in youth, 
                        which may include--
                                  ``(I) after hours physical 
                                activity programs; and
                                  ``(II) science-based 
                                interventions with multiple 
                                components to prevent eating 
                                disorders including nutritional 
                                content, understanding and 
                                responding to hunger and 
                                satiety, positive body image 
                                development, positive self-
                                esteem development, and 
                                learning life skills (such as 
                                stress management, 
                                communication skills, 
                                problemsolving and 
                                decisionmaking skills), as well 
                                as consideration of cultural 
                                and developmental issues, and 
                                the role of family, school, and 
                                community;
                          ``(ii) providing education and 
                        training to educational professionals 
                        regarding how to promote a healthy 
                        lifestyle and a healthy school 
                        environment for children;
                          ``(iii) planning and implementing a 
                        healthy lifestyle curriculum or program 
                        with an emphasis on healthy eating 
                        behaviors and physical activity; and
                          ``(iv) planning and implementing 
                        healthy lifestyle classes or programs 
                        for parents or guardians, with an 
                        emphasis on healthy eating behaviors 
                        and physical activity for children;
                  ``(C) carry out educational, counseling, 
                promotional, and training activities through 
                the local health care delivery systems 
                including by--
                          ``(i) promoting healthy eating 
                        behaviors and physical activity 
                        services to treat or prevent eating 
                        disorders, being overweight, and 
                        obesity;
                          ``(ii) providing patient education 
                        and counseling to increase physical 
                        activity and promote healthy eating 
                        behaviors;
                          ``(iii) training health professionals 
                        on how to identify and treat obese and 
                        overweight individuals which may 
                        include nutrition and physical activity 
                        counseling; and
                          ``(iv) providing community education 
                        by a health professional on good 
                        nutrition and physical activity to 
                        develop a better understanding of the 
                        relationship between diet, physical 
                        activity, and eating disorders, 
                        obesity, or being overweight; and
                  ``(D) provide, through qualified health 
                professionals, training and supervision for 
                community health workers to--
                          ``(i) educate families regarding the 
                        relationship between nutrition, eating 
                        habits, physical activity, and obesity;
                          ``(ii) educate families about 
                        effective strategies to improve 
                        nutrition, establish healthy eating 
                        patterns, and establish appropriate 
                        levels of physical activity; and
                          ``(iii) educate and guide parents 
                        regarding the ability to model and 
                        communicate positive health behaviors.
          ``(4) Priority.--In awarding grants under paragraph 
        (1), the Secretary shall give priority to awarding 
        grants to eligible entities--
                  ``(A) that demonstrate that they have 
                previously applied successfully for funds to 
                carry out activities that seek to promote 
                individual and community health and to prevent 
                the incidence of chronic disease and that can 
                cite published and peer-reviewed research 
                demonstrating that the activities that the 
                entities propose to carry out with funds made 
                available under the grant are effective;
                  ``(B) that will carry out programs or 
                activities that seek to accomplish a goal or 
                goals set by the State in the Healthy People 
                2010 plan of the State;
                  ``(C) that provide non-Federal contributions, 
                either in cash or in-kind, to the costs of 
                funding activities under the grants;
                  ``(D) that develop comprehensive plans that 
                include a strategy for extending program 
                activities developed under grants in the years 
                following the fiscal years for which they 
                receive grants under this subsection;
                  ``(E) located in communities that are 
                medically underserved, as determined by the 
                Secretary;
                  ``(F) located in areas in which the average 
                poverty rate is at least 150 percent or higher 
                of the average poverty rate in the State 
                involved, as determined by the Secretary; and
                  ``(G) that submit plans that exhibit 
                multisectoral, cooperative conduct that 
                includes the involvement of a broad range of 
                stakeholders, including--
                          ``(i) community-based organizations;
                          ``(ii) local governments;
                          ``(iii) local educational agencies;
                          ``(iv) the private sector;
                          ``(v) State or local departments of 
                        health;
                          ``(vi) accredited colleges, 
                        universities, and community colleges;
                          ``(vii) health care providers;
                          ``(viii) State and local departments 
                        of transportation and city planning; 
                        and
                          ``(ix) other entities determined 
                        appropriate by the Secretary.
          ``(5) Program design.--
                  ``(A) Initial design.--Not later than 1 year 
                after the date of enactment of the Children's 
                Health Insurance Program Reauthorization Act of 
                2007, the Secretary shall design the 
                demonstration project. The demonstration should 
                draw upon promising, innovative models and 
                incentives to reduce behavioral risk factors. 
                The Administrator of the Centers for Medicare & 
                Medicaid Services shall consult with the 
                Director of the Centers for Disease Control and 
                Prevention, the Director of the Office of 
                Minority Health, the heads of other agencies in 
                the Department of Health and Human Services, 
                and such professional organizations, as the 
                Secretary determines to be appropriate, on the 
                design, conduct, and evaluation of the 
                demonstration.
                  ``(B) Number and project areas.--Not later 
                than 2 years after the date of enactment of the 
                Children's Health Insurance Program 
                Reauthorization Act of 2007, the Secretary 
                shall award 1 grant that is specifically 
                designed to determine whether programs similar 
                to programs to be conducted by other grantees 
                under this subsection should be implemented 
                with respect to the general population of 
                children who are eligible for child health 
                assistance under State child health plans under 
                title XXI in order to reduce the incidence of 
                childhood obesity among such population.
          ``(6) Report to congress.--Not later than 3 years 
        after the date the Secretary implements the 
        demonstration project under this subsection, the 
        Secretary shall submit to Congress a report that 
        describes the project, evaluates the effectiveness and 
        cost effectiveness of the project, evaluates the 
        beneficiary satisfaction under the project, and 
        includes any such other information as the Secretary 
        determines to be appropriate.
          ``(7) Definitions.--In this subsection:
                  ``(A) Federally-qualified health center.--The 
                term `Federally-qualified health center' has 
                the meaning given that term in section 
                1905(l)(2)(B).
                  ``(B) Indian tribe.--The term `Indian tribe' 
                has the meaning given that term in section 4 of 
                the Indian Health Care Improvement Act (25 
                U.S.C. 1603).
                  ``(C) Self-assessment.--The term `self-
                assessment' means a form that--
                          ``(i) includes questions regarding--
                                  ``(I) behavioral risk 
                                factors;
                                  ``(II) needed preventive and 
                                screening services; and
                                  ``(III) target individuals'' 
                                preferences for receiving 
                                follow-up information;
                          ``(ii) is assessed using such 
                        computer generated assessment programs; 
                        and
                          ``(iii) allows for the provision of 
                        such ongoing support to the individual 
                        as the Secretary determines 
                        appropriate.
                  ``(D) Ongoing support.--The term `ongoing 
                support' means--
                          ``(i) to provide any target 
                        individual with information, feedback, 
                        health coaching, and recommendations 
                        regarding--
                                  ``(I) the results of a self-
                                assessment given to the 
                                individual;
                                  ``(II) behavior modification 
                                based on the self-assessment; 
                                and
                                  ``(III) any need for clinical 
                                preventive and screening 
                                services or treatment including 
                                medical nutrition therapy;
                          ``(ii) to provide any target 
                        individual with referrals to community 
                        resources and programs available to 
                        assist the target individual in 
                        reducing health risks; and
                          ``(iii) to provide the information 
                        described in clause (i) to a health 
                        care provider, if designated by the 
                        target individual to receive such 
                        information.
          ``(8) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this 
        subsection, $25,000,000 for the period of fiscal years 
        2008 through 2012.
  ``(f) Development of Model Electronic Health Record Format 
for Children Enrolled in Medicaid or CHIP.--
          ``(1) In general.--Not later than January 1, 2009, 
        the Secretary shall establish a program to encourage 
        the development and dissemination of a model electronic 
        health record format for children enrolled in the State 
        plan under title XIX or the State child health plan 
        under title XXI that is--
                  ``(A) subject to State laws, accessible to 
                parents, caregivers, and other consumers for 
                the sole purpose of demonstrating compliance 
                with school or leisure activity requirements, 
                such as appropriate immunizations or physicals;
                  ``(B) designed to allow interoperable 
                exchanges that conform with Federal and State 
                privacy and security requirements;
                  ``(C) structured in a manner that permits 
                parents and caregivers to view and understand 
                the extent to which the care their children 
                receive is clinically appropriate and of high 
                quality; and
                  ``(D) capable of being incorporated into, and 
                otherwise compatible with, other standards 
                developed for electronic health records.
          ``(2) Funding.--$5,000,000 of the amount appropriated 
        under subsection (i) for a fiscal year shall be used to 
        carry out this subsection.
  ``(g) Study of Pediatric Health and Health Care Quality 
Measures.--
          ``(1) In general.--Not later than July 1, 2009, the 
        Institute of Medicine shall study and report to 
        Congress on the extent and quality of efforts to 
        measure child health status and the quality of health 
        care for children across the age span and in relation 
        to preventive care, treatments for acute conditions, 
        and treatments aimed at ameliorating or correcting 
        physical, mental, and developmental conditions in 
        children. In conducting such study and preparing such 
        report, the Institute of Medicine shall--
                  ``(A) consider all of the major national 
                population-based reporting systems sponsored by 
                the Federal Government that are currently in 
                place, including reporting requirements under 
                Federal grant programs and national population 
                surveys and estimates conducted directly by the 
                Federal Government;
                  ``(B) identify the information regarding 
                child health and health care quality that each 
                system is designed to capture and generate, the 
                study and reporting periods covered by each 
                system, and the extent to which the information 
                so generated is made widely available through 
                publication;
                  ``(C) identify gaps in knowledge related to 
                children's health status, health disparities 
                among subgroups of children, the effects of 
                social conditions on children's health status 
                and use and effectiveness of health care, and 
                the relationship between child health status 
                and family income, family stability and 
                preservation, and children's school readiness 
                and educational achievement and attainment; and
                  ``(D) make recommendations regarding 
                improving and strengthening the timeliness, 
                quality, and public transparency and 
                accessibility of information about child health 
                and health care quality.
          ``(2) Funding.--Up to $1,000,000 of the amount 
        appropriated under subsection (i) for a fiscal year 
        shall be used to carry out this subsection.
  ``(h) Rule of Construction.--Notwithstanding any other 
provision in this section, no evidence based quality measure 
developed, published, or used as a basis of measurement or 
reporting under this section may be used to establish an 
irrebuttable presumption regarding either the medical necessity 
of care or the maximum permissible coverage for any individual 
child who is eligible for and receiving medical assistance 
under title XIX or child health assistance under title XXI .
  ``(i) Appropriation.--Out of any funds in the Treasury not 
otherwise appropriated, there is appropriated for each of 
fiscal years 2008 through 2012, $45,000,000 for the purpose of 
carrying out this section (other than subsection (e)). Funds 
appropriated under this subsection shall remain available until 
expended.''.
  (b) Increased Matching Rate for Collecting and Reporting on 
Child Health Measures.--Section 1903(a)(3)(A) (42 U.S.C. 
1396b(a)(3)(A)), is amended--
          (1) by striking ``and'' at the end of clause (i); and
          (2) by adding at the end the following new clause:
                  ``(iii) an amount equal to the Federal 
                medical assistance percentage (as defined in 
                section 1905(b)) of so much of the sums 
                expended during such quarter (as found 
                necessary by the Secretary for the proper and 
                efficient administration of the State plan) as 
                are attributable to such developments or 
                modifications of systems of the type described 
                in clause (i) as are necessary for the 
                efficient collection and reporting on child 
                health measures; and''.

SEC. 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 for fiscal year 2008 for 
        the purpose of improving the timeliness of the data 
        reported and analyzed from the Medicaid Statistical 
        Information System (MSIS) for purposes of 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, 2008, data regarding the 
        enrollment of low-income children (as defined in 
        section 2110(c)(4) of the Social Security Act (42 
        U.S.C. 1397jj(c)(4)) of a State enrolled in the State 
        plan under Medicaid or the State child health plan 
        under CHIP with respect to a fiscal year shall be 
        collected and analyzed by the Secretary within 6 months 
        of submission.
  (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, 2008.

                 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 paragraph 
        (1) shall apply to coverage of items and services 
        furnished on or after October 1, 2008.
  (b) 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.
  (c) Provision of Dental Services Through FQHCs.--
          (1) Medicaid.--Section 1902(a) (42 U.S.C. 1396a(a)) 
        is amended--
                  (A) by striking ``and'' at the end of 
                paragraph (69);
                  (B) by striking the period at the end of 
                paragraph (70) and inserting ``; and''; and
                  (C) by inserting after paragraph (70) the 
                following new paragraph:
          ``(71) 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)(71) (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, 2008.
  (d) 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.
  (e) 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.
  (f) 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,''.
  (g) 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 abuse benefits, such plan shall 
                ensure that the financial requirements and 
                treatment limitations applicable to such mental 
                health or substance abuse benefits are no more 
                restrictive than the financial requirements and 
                treatment limitations applied to substantially 
                all medical and surgical benefits covered by 
                the plan.
                  ``(B) Deemed compliance.--To the extent that 
                a State child health plan includes coverage 
                with respect to an individual described in 
                section 1905(a)(4)(B) and covered under the 
                State plan under section 1902(a)(10)(A) of the 
                services described in section 1905(a)(4)(B) 
                (relating to early and periodic screening, 
                diagnostic, and treatment services defined in 
                section 1905(r)) and provided in accordance 
                with section 1902(a)(43), such plan shall be 
                deemed to satisfy the requirements of 
                subparagraph (A).''.
  (b) Conforming Amendments.--Section 2103 (42 U.S.C. 1397cc) 
is amended--
          (1) in subsection (a), 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, 2008.
  (b) Transition Grants.--
          (1) Appropriation.--Out of any funds in the Treasury 
        not otherwise appropriated, there is appropriated to 
        the Secretary for fiscal year 2008, $5,000,000, to 
        remain available until expended, for the purpose of 
        awarding grants to States with State child health plans 
        under CHIP that are operated separately from the State 
        Medicaid plan under title XIX of the Social Security 
        Act (including any waiver of such plan), or in 
        combination with the State Medicaid plan, for 
        expenditures related to transitioning to compliance 
        with the requirement of section 2107(e)(1)(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, 2010, 
        shall report to Congress on any effect on access to 
        benefits, provider payment rates, or scope of benefits 
        offered by such States as a result of the application 
        of such payment system.

SEC. 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--
                                  ``(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 
January 1, 2009.

SEC. 505. DEMONSTRATION PROJECTS RELATING TO DIABETES PREVENTION.

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

SEC. 506. CLARIFICATION OF COVERAGE OF SERVICES PROVIDED THROUGH 
                    SCHOOL-BASED HEALTH CENTERS.

  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.''.

     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:
          ``(12) 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 final rule implementing such 
requirements in accordance with the requirements of subsection 
(c) is in effect for all States. Any calculation of a national 
error rate or a State specific error rate after such final rule 
in effect for all States may only be inclusive of errors, as 
defined in such final rule or in guidance issued within a 
reasonable time frame after the effective date for such final 
rule that includes detailed guidance for the specific 
methodology for error determinations.
  (c) Requirements for Final Rule.--For purposes of subsection 
(b), the requirements of this subsection are that the final 
rule implementing the PERM requirements shall--
          (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 
final rule implementing the PERM requirements in accordance 
with the requirements of subsection (c) is in effect for all 
States, a State for which the PERM requirements were first in 
effect under an interim final rule for fiscal year 2007 may 
elect to accept any payment error rate determined in whole or 
in part for the State on the basis of data for that fiscal year 
or may elect to not have any payment error rate determined on 
the basis of such data and, instead, shall be treated as if 
fiscal year 2010 were the first fiscal year for which the PERM 
requirements apply to the State.
  (e) Harmonization of MEQC and PERM.--
          (1) Reduction of redundancies.--The Secretary shall 
        review the Medicaid Eligibility Quality Control (in 
        this subsection referred to as the ``MEQC'') 
        requirements with the PERM requirements and coordinate 
        consistent implementation of both sets of requirements, 
        while reducing redundancies.
          (2) State option to apply perm data.--A State may 
        elect, for purposes of determining the erroneous excess 
        payments for medical assistance ratio applicable to the 
        State for a fiscal year under section 1903(u) of the 
        Social Security Act (42 U.S.C. 1396b(u)) to substitute 
        data resulting from the application of the PERM 
        requirements to the State after the final rule 
        implementing such requirements is in effect for all 
        States for data obtained from the application of the 
        MEQC requirements to the State with respect to a fiscal 
        year.
          (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, as in effect on 
        September 1, 2007, 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 fiscal year 
2009, on the basis of such information as the Secretary 
determines appropriate. In establishing such sample sizes, the 
Secretary shall, to the greatest extent practicable--
          (1) minimize the administrative cost burden on States 
        under Medicaid and CHIP; and
          (2) maintain State flexibility to manage such 
        programs.

SEC. 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 2008''.
  (b) Use of Additional Funds.--Section 2109(b) (42 U.S.C. 
1397ii(b)), as amended by subsection (a), is amended--
          (1) by redesignating paragraph (2) as paragraph (4); 
        and
          (2) by inserting after paragraph (1), the following 
        new paragraphs:
          ``(2) Additional requirements.--In addition to making 
        the adjustments required to produce the data described 
        in paragraph (1), with respect to data collection 
        occurring for fiscal years beginning with fiscal year 
        2008, in appropriate consultation with the Secretary of 
        Health and Human Services, the Secretary of Commerce 
        shall do the following:
                  ``(A) Make appropriate adjustments to the 
                Current Population Survey to develop more 
                accurate State-specific estimates of the number 
                of children enrolled in health coverage under 
                title XIX or this title.
                  ``(B) Make appropriate adjustments to the 
                Current Population Survey to improve the survey 
                estimates used to determine the child 
                population growth factor under section 
                2104(i)(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, 2010, 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 2009 for the 
                purpose of conducting the evaluation authorized 
                under this paragraph. Amounts appropriated 
                under this subparagraph shall remain available 
                for expenditure through fiscal year 2011.''.

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.

  Nothing in this Act allows Federal payment for individuals 
who are not legal residents.

              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, 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. COUNTY MEDICAID HEALTH INSURING ORGANIZATIONS; GAO REPORT ON 
                    MEDICAID MANAGED CARE PAYMENT RATES.

  (a) In General.--Section 9517(c)(3) of the Consolidated 
Omnibus Budget Reconciliation Act of 1985 (42 U.S.C. 1396b 
note), as added by section 4734 of the Omnibus Budget 
Reconciliation Act of 1990 and as amended by section 704 of the 
Medicare, Medicaid, and SCHIP Benefits Improvement and 
Protection Act of 2000, is amended--
          (1) in subparagraph (A), by inserting ``, in the case 
        of any health insuring organization described in such 
        subparagraph that is operated by a public entity 
        established by Ventura County, and in the case of any 
        health insuring organization described in such 
        subparagraph that is operated by a public entity 
        established by Merced County'' after ``described in 
        subparagraph (B)''; and
          (2) in subparagraph (C), by striking ``14 percent'' 
        and inserting ``16 percent''.
  (b) Effective Date.--The amendments made by subsection (a) 
shall take effect on the date of the enactment of this Act.
  (c) GAO Report on Actuarial Soundness of 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 
title XIX of the Social Security Act are actuarially sound.

SEC. 615. 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, 2008, 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. 616. MORATORIUM ON CERTAIN PAYMENT RESTRICTIONS.

  Notwithstanding any other provision of law, the Secretary of 
Health and Human Services shall not, prior to May 28, 2008, 
take any action (through promulgation of regulation, issuance 
of regulatory guidance, use of federal payment audit 
procedures, or other administrative action, policy, or 
practice, including a Medical Assistance Manual transmittal or 
letter to State Medicaid directors) to restrict coverage or 
payment under title XIX of the Social Security Act for 
rehabilitation services, or school-based administration, 
transportation, or medical services if such restrictions are 
more restrictive in any aspect than those applied to such 
coverage or payment as of July 1, 2007.

SEC. 617. MEDICAID DSH ALLOTMENTS FOR TENNESSEE AND HAWAII.

  (a) Tennessee.--The DSH allotments for Tennessee for each 
fiscal year beginning with fiscal year 2008 under subsection 
(f)(3) of section 1923 of the Social Security Act (42 U.S.C. 
1396r-4) are deemed to be $30,000,000. The Secretary of Health 
and Human Services may impose a limitation on the total amount 
of payments made to hospitals under the TennCare Section 1115 
waiver only to the extent that such limitation is necessary to 
ensure that a hospital does not receive payment in excess of 
the amounts described in subsection (f) of such section or as 
necessary to ensure that the waiver remains budget neutral.
  (b) Hawaii.--Section 1923(f)(6) (42 U.S.C. 1396r-4(f)(6)) is 
amended--
          (1) in the paragraph heading, by striking ``for 
        fiscal year 2007''; and
          (2) in subparagraph (B)--
                  (A) in clause (i), by striking ``Only with 
                respect to fiscal year 2007'' and inserting 
                ``With respect to each of fiscal years 2007 and 
                2008'';
                  (B) by redesignating clause (ii) as clause 
                (iv); and
                  (C) by inserting after clause (i), the 
                following new clauses:
                          ``(ii) Treatment as a low-dsh 
                        state.--With respect to fiscal year 
                        2009 and each fiscal year thereafter, 
                        notwithstanding the table set forth in 
                        paragraph (2), the DSH allotment for 
                        Hawaii shall be increased in the same 
                        manner as allotments for low DSH States 
                        are increased for such fiscal year 
                        under clauses (ii) and (iii) of 
                        paragraph (5)(B).
                          ``(iii) Certain hospital payments.--
                        The Secretary may not impose a 
                        limitation on the total amount of 
                        payments made to hospitals under the 
                        QUEST section 1115 Demonstration 
                        Project except to the extent that such 
                        limitation is necessary to ensure that 
                        a hospital does not receive payments in 
                        excess of the amounts described in 
                        subsection (g), or as necessary to 
                        ensure that such payments under the 
                        waiver and such payments pursuant to 
                        the allotment provided in this section 
                        do not, in the aggregate in any year, 
                        exceed the amount that the Secretary 
                        determines is equal to the Federal 
                        medical assistance percentage component 
                        attributable to disproportionate share 
                        hospital payment adjustments for such 
                        year that is reflected in the budget 
                        neutrality provision of the QUEST 
                        Demonstration Project.''.

SEC. 618. 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. 619. EXTENSION OF SSI WEB-BASED ASSET DEMONSTRATION PROJECT TO THE 
                    MEDICAID PROGRAM.

  (a) In General.--Beginning on October 1, 2012, the Secretary 
of Health and Human Services shall provide for the application 
to asset eligibility determinations under the Medicaid program 
under title XIX of the Social Security Act of the automated, 
secure, web-based asset verification request and response 
process being applied for determining eligibility for benefits 
under the Supplemental Security Income (SSI) program under 
title XVI of such Act under a demonstration project conducted 
under the authority of section 1631(e)(1)(B)(ii) of such Act 
(42 U.S.C. 1383(e)(1)(B)(ii)).
  (b) Limitation.--Such application shall only extend to those 
States in which such demonstration project is operating and 
only for the period in which such project is otherwise 
provided.
  (c) Rules of Application.--For purposes of carrying out 
subsection (a), notwithstanding any other provision of law, 
information obtained from a financial institution that is used 
for purposes of eligibility determinations under such 
demonstration project with respect to the Secretary of Health 
and Human Services under the SSI program may also be shared and 
used by States for purposes of eligibility determinations under 
the Medicaid program. In applying section 1631(e)(1)(B)(ii) of 
the Social Security Act under this subsection, references to 
the Commissioner of Social Security and benefits under title 
XVI of such Act shall be treated as including a reference to a 
State described in subsection (b) and medical assistance under 
title XIX of such Act provided by such a State.

                      Subtitle C--Other Provisions

SEC. 621. SUPPORT FOR INJURED SERVICEMEMBERS.

  (a) Short Title.--This section may be cited as the ``Support 
for Injured Servicemembers Act''.
  (b) Servicemember Family Leave.--
          (1) Definitions.--Section 101 of the Family and 
        Medical Leave Act of 1993 (29 U.S.C. 2611) is amended 
        by adding at the end the following:
          ``(14) Active duty.--The term `active duty' means 
        duty under a call or order to active duty under a 
        provision of law referred to in section 101(a)(13)(B) 
        of title 10, United States Code.
          ``(15) Covered servicemember.--The term `covered 
        servicemember' means a member of the Armed Forces, 
        including a member of the National Guard or a Reserve, 
        who is undergoing medical treatment, recuperation, or 
        therapy, is otherwise in medical hold or medical 
        holdover status, or is otherwise on the temporary 
        disability retired list, for a serious injury or 
        illness.
          ``(16) Medical hold or medical holdover status.--The 
        term `medical hold or medical holdover status' means--
                  ``(A) the status of a member of the Armed 
                Forces, including a member of the National 
                Guard or a Reserve, assigned or attached to a 
                military hospital for medical care; and
                  ``(B) the status of a member of a reserve 
                component of the Armed Forces who is separated, 
                whether pre-deployment or post-deployment, from 
                the member's unit while in need of health care 
                based on a medical condition identified while 
                the member is on active duty in the Armed 
                Forces.
          ``(17) Next of kin.--The term `next of kin', used 
        with respect to an individual, means the nearest blood 
        relative of that individual.
          ``(18) Serious injury or illness.--The term `serious 
        injury or illness', in the case of a member of the 
        Armed Forces, means an injury or illness incurred by 
        the member in line of duty on active duty in the Armed 
        Forces that may render the member medically unfit to 
        perform the duties of the member's office, grade, rank, 
        or rating.''.
          (2) Entitlement to leave.--Section 102(a) of such Act 
        (29 U.S.C. 2612(a)) is amended by adding at the end the 
        following:
          ``(3) Servicemember family leave.--Subject to section 
        103, an eligible employee who is the spouse, son, 
        daughter, parent, or next of kin of a covered 
        servicemember shall be entitled to a total of 26 
        workweeks of leave during a 12-month period to care for 
        the servicemember. The leave described in this 
        paragraph shall only be available during a single 12-
        month period.
          ``(4) Combined leave total.--During the single 12-
        month period described in paragraph (3), an eligible 
        employee shall be entitled to a combined total of 26 
        workweeks of leave under paragraphs (1) and (3). 
        Nothing in this paragraph shall be construed to limit 
        the availability of leave under paragraph (1) during 
        any other 12-month period.''.
          (3) Requirements relating to leave.--
                  (A) Schedule.--Section 102(b) of such Act (29 
                U.S.C. 2612(b)) is amended--
                          (i) in paragraph (1), in the second 
                        sentence--
                                  (I) by striking ``section 
                                103(b)(5)'' and inserting 
                                ``subsection (b)(5) or (f) (as 
                                appropriate) of section 103''; 
                                and
                                  (II) by inserting ``or under 
                                subsection (a)(3)'' after 
                                ``subsection (a)(1)''; and
                          (ii) in paragraph (2), by inserting 
                        ``or under subsection (a)(3)'' after 
                        ``subsection (a)(1)''.
                  (B) Substitution of paid leave.--Section 
                102(d) of such Act (29 U.S.C. 2612(d)) is 
                amended--
                          (i) in paragraph (1)--
                                  (I) by inserting ``(or 26 
                                workweeks in the case of leave 
                                provided under subsection 
                                (a)(3))'' after ``12 
                                workweeks'' the first place it 
                                appears; and
                                  (II) by inserting ``(or 26 
                                workweeks, as appropriate)'' 
                                after ``12 workweeks'' the 
                                second place it appears; and
                          (ii) in paragraph (2)(B), by adding 
                        at the end the following: ``An eligible 
                        employee may elect, or an employer may 
                        require the employee, to substitute any 
                        of the accrued paid vacation leave, 
                        personal leave, family leave, or 
                        medical or sick leave of the employee 
                        for leave provided under subsection 
                        (a)(3) for any part of the 26-week 
                        period of such leave under such 
                        subsection.''.
                  (C) Notice.--Section 102(e)(2) of such Act 
                (29 U.S.C. 2612(e)(2)) is amended by inserting 
                ``or under subsection (a)(3)'' after 
                ``subsection (a)(1)''.
                  (D) Spouses employed by same employer.--
                Section 102(f) of such Act (29 U.S.C. 2612(f)) 
                is amended--
                          (i) by redesignating paragraphs (1) 
                        and (2) as subparagraphs (A) and (B), 
                        and aligning the margins of the 
                        subparagraphs with the margins of 
                        section 102(e)(2)(A);
                          (ii) by striking ``In any'' and 
                        inserting the following:
          ``(1) In general.--In any''; and
                          (iii) by adding at the end the 
                        following:
          ``(2) Servicemember family leave.--
                  ``(A) In general.--The aggregate number of 
                workweeks of leave to which both that husband 
                and wife may be entitled under subsection (a) 
                may be limited to 26 workweeks during the 
                single 12-month period described in subsection 
                (a)(3) if the leave is--
                          ``(i) leave under subsection (a)(3); 
                        or
                          ``(ii) a combination of leave under 
                        subsection (a)(3) and leave described 
                        in paragraph (1).
                  ``(B) Both limitations applicable.--If the 
                leave taken by the husband and wife includes 
                leave described in paragraph (1), the 
                limitation in paragraph (1) shall apply to the 
                leave described in paragraph (1).''.
                  (E) Certification.--Section 103 of such Act 
                (29 U.S.C. 2613) is amended by adding at the 
                end the following:
  ``(f) Certification for Servicemember Family Leave.--An 
employer may require that a request for leave under section 
102(a)(3) be supported by a certification issued at such time 
and in such manner as the Secretary may by regulation 
prescribe.''.
                  (F) Failure to return.--Section 104(c) of 
                such Act (29 U.S.C. 2614(c)) is amended--
                          (i) in paragraph (2)(B)(i), by 
                        inserting ``or under section 
                        102(a)(3)'' before the semicolon; and
                          (ii) in paragraph (3)(A)--
                                  (I) in clause (i), by 
                                striking ``or'' at the end;
                                  (II) in clause (ii), by 
                                striking the period and 
                                inserting ``; or''; and
                                  (III) by adding at the end 
                                the following:
                          ``(iii) a certification issued by the 
                        health care provider of the 
                        servicemember being cared for by the 
                        employee, in the case of an employee 
                        unable to return to work because of a 
                        condition specified in section 
                        102(a)(3).''.
                  (G) Enforcement.--Section 107 of such Act (29 
                U.S.C. 2617) is amended, in subsection 
                (a)(1)(A)(i)(II), by inserting ``(or 26 weeks, 
                in a case involving leave under section 
                102(a)(3))'' after ``12 weeks''.
                  (H) Instructional employees.--Section 108 of 
                such Act (29 U.S.C. 2618) is amended, in 
                subsections (c)(1), (d)(2), and (d)(3), by 
                inserting ``or under section 102(a)(3)'' after 
                ``section 102(a)(1)''.
  (c) Servicemember Family Leave for Civil Service Employees.--
          (1) Definitions.--Section 6381 of title 5, United 
        States Code, is amended--
                  (A) in paragraph (5), by striking ``and'' at 
                the end;
                  (B) in paragraph (6), by striking the period 
                and inserting ``; and''; and
                  (C) by adding at the end the following:
          ``(7) the term `active duty' means duty under a call 
        or order to active duty under a provision of law 
        referred to in section 101(a)(13)(B) of title 10, 
        United States Code;
          ``(8) the term `covered servicemember' means a member 
        of the Armed Forces, including a member of the National 
        Guard or a Reserve, who is undergoing medical 
        treatment, recuperation, or therapy, is otherwise in 
        medical hold or medical holdover status, or is 
        otherwise on the temporary disability retired list, for 
        a serious injury or illness;
          ``(9) the term `medical hold or medical holdover 
        status'' means--
                  ``(A) the status of a member of the Armed 
                Forces, including a member of the National 
                Guard or a Reserve, assigned or attached to a 
                military hospital for medical care; and
                  ``(B) the status of a member of a reserve 
                component of the Armed Forces who is separated, 
                whether pre-deployment or post-deployment, from 
                the member's unit while in need of health care 
                based on a medical condition identified while 
                the member is on active duty in the Armed 
                Forces;
          ``(10) the term `next of kin', used with respect to 
        an individual, means the nearest blood relative of that 
        individual; and
          ``(11) the term `serious injury or illness', in the 
        case of a member of the Armed Forces, means an injury 
        or illness incurred by the member in line of duty on 
        active duty in the Armed Forces that may render the 
        member medically unfit to perform the duties of the 
        member's office, grade, rank, or rating.''.
          (2) Entitlement to leave.--Section 6382(a) of such 
        title is amended by adding at the end the following:
          ``(3) Subject to section 6383, an employee who is the 
        spouse, son, daughter, parent, or next of kin of a 
        covered servicemember shall be entitled to a total of 
        26 administrative workweeks of leave during a 12-month 
        period to care for the servicemember. The leave 
        described in this paragraph shall only be available 
        during a single 12-month period.
          ``(4) During the single 12-month period described in 
        paragraph (3), an employee shall be entitled to a 
        combined total of 26 administrative workweeks of leave 
        under paragraphs (1) and (3). Nothing in this paragraph 
        shall be construed to limit the availability of leave 
        under paragraph (1) during any other 12-month 
        period.''.
          (3) Requirements relating to leave.--
                  (A) Schedule.--Section 6382(b) of such title 
                is amended--
                          (i) in paragraph (1), in the second 
                        sentence--
                                  (I) by striking ``section 
                                6383(b)(5)'' and inserting 
                                ``subsection (b)(5) or (f) (as 
                                appropriate) of section 6383''; 
                                and
                                  (II) by inserting ``or under 
                                subsection (a)(3)'' after 
                                ``subsection (a)(1)''; and
                          (ii) in paragraph (2), by inserting 
                        ``or under subsection (a)(3)'' after 
                        ``subsection (a)(1)''.
                  (B) Substitution of paid leave.--Section 
                6382(d) of such title is amended by adding at 
                the end the following: ``An employee may elect 
                to substitute for leave under subsection (a)(3) 
                any of the employee's accrued or accumulated 
                annual or sick leave under subchapter I for any 
                part of the 26-week period of leave under such 
                subsection.''.
                  (C) Notice.--Section 6382(e) of such title is 
                amended by inserting ``or under subsection 
                (a)(3)'' after ``subsection (a)(1)''.
                  (D) Certification.--Section 6383 of such 
                title is amended by adding at the end the 
                following:
  ``(f) An employing agency may require that a request for 
leave under section 6382(a)(3) be supported by a certification 
issued at such time and in such manner as the Office of 
Personnel Management may by regulation prescribe.''.

SEC. 622. MILITARY FAMILY JOB PROTECTION.

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

SEC. 623. OUTREACH REGARDING HEALTH INSURANCE OPTIONS AVAILABLE TO 
                    CHILDREN.

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

SEC. 624. SENSE OF SENATE REGARDING ACCESS TO AFFORDABLE AND MEANINGFUL 
                    HEALTH INSURANCE COVERAGE.

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

                     TITLE VII--REVENUE PROVISIONS

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

  (a) Cigars.--Section 5701(a) of the Internal Revenue Code of 
1986 is amended--
          (1) by striking ``$1.828 cents per thousand ($1.594 
        cents per thousand on cigars removed during 2000 or 
        2001)'' in paragraph (1) and inserting ``$50.00 per 
        thousand'',
          (2) by striking ``20.719 percent (18.063 percent on 
        cigars removed during 2000 or 2001)'' in paragraph (2) 
        and inserting ``52.988 percent'', and
          (3) by striking ``$48.75 per thousand ($42.50 per 
        thousand on cigars removed during 2000 or 2001)'' in 
        paragraph (2) and inserting ``$3.00 per cigar''.
  (b) Cigarettes.--Section 5701(b) of such Code is amended--
          (1) by striking ``$19.50 per thousand ($17 per 
        thousand on cigarettes removed during 2000 or 2001)'' 
        in paragraph (1) and inserting ``$50.00 per thousand'', 
        and
          (2) by striking ``$40.95 per thousand ($35.70 per 
        thousand on cigarettes removed during 2000 or 2001)'' 
        in paragraph (2) and inserting ``$105.00 per 
        thousand''.
  (c) Cigarette Papers.--Section 5701(c) of such Code is 
amended by striking ``1.22 cents (1.06 cents on cigarette 
papers removed during 2000 or 2001)'' and inserting ``3.13 
cents''.
  (d) Cigarette Tubes.--Section 5701(d) of such Code is amended 
by striking ``2.44 cents (2.13 cents on cigarette tubes removed 
during 2000 or 2001)'' and inserting ``6.26 cents''.
  (e) Smokeless Tobacco.--Section 5701(e) of such Code is 
amended--
          (1) by striking ``58.5 cents (51 cents on snuff 
        removed during 2000 or 2001)'' in paragraph (1) and 
        inserting ``$1.50'', and
          (2) by striking ``19.5 cents (17 cents on chewing 
        tobacco removed during 2000 or 2001)'' in paragraph (2) 
        and inserting ``50 cents''.
  (f) Pipe Tobacco.--Section 5701(f) of such Code is amended by 
striking ``$1.0969 cents (95.67 cents on pipe tobacco removed 
during 2000 or 2001)'' and inserting ``$2.8126 cents''.
  (g) Roll-Your-Own Tobacco.--Section 5701(g) of such Code is 
amended by striking ``$1.0969 cents (95.67 cents on roll-your-
own tobacco removed during 2000 or 2001)'' and inserting 
``$8.8889 cents''.
  (h) Floor Stocks Taxes.--
          (1) Imposition of tax.--On tobacco products (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 January 1, 2008, and 
        held on such date for sale by any person, there is 
        hereby imposed a tax in an amount equal to the excess 
        of--
                  (A) the tax which would be imposed under 
                section 5701 of 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 January 
        1, 2008, for which such person is liable.
          (3) Liability for tax and method of payment.--
                  (A) Liability for tax.--A person holding 
                tobacco products, cigarette papers, or 
                cigarette tubes on January 1, 2008, to which 
                any tax imposed by paragraph (1) applies shall 
                be liable for such tax.
                  (B) Method of payment.--The tax imposed by 
                paragraph (1) shall be paid in such manner as 
                the Secretary shall prescribe by regulations.
                  (C) Time for payment.--The tax imposed by 
                paragraph (1) shall be paid on or before April 
                1, 2008.
          (4) Articles in foreign trade zones.--Notwithstanding 
        the Act of June 18, 1934 (commonly known as the Foreign 
        Trade Zone Act, 48 Stat. 998, 19 U.S.C. 81a et seq.) or 
        any other provision of law, any article which is 
        located in a foreign trade zone on January 1, 2008, 
        shall be subject to the tax imposed by paragraph (1) 
        if--
                  (A) internal revenue taxes have been 
                determined, or customs duties liquidated, with 
                respect to such article before such date 
                pursuant to a request made under the 1st 
                proviso of section 3(a) of such Act, or
                  (B) such article is held on such date under 
                the supervision of an officer of the United 
                States Customs and Border Protection of the 
                Department of Homeland Security pursuant to the 
                2d proviso of such section 3(a).
          (5) Definitions.--For purposes of this subsection--
                  (A) In general.--Any term used in this 
                subsection which is also used in section 5702 
                of the Internal Revenue Code of 1986 shall have 
                the same meaning as such term has in such 
                section.
                  (B) Secretary.--The term ``Secretary'' means 
                the Secretary of the Treasury or the 
                Secretary's delegate.
          (6) Controlled groups.--Rules similar to the rules of 
        section 5061(e)(3) of such Code shall apply for 
        purposes of this subsection.
          (7) Other laws applicable.--All provisions of law, 
        including penalties, applicable with respect to the 
        taxes imposed by section 5701 of such Code shall, 
        insofar as applicable and not inconsistent with the 
        provisions of this subsection, apply to the floor 
        stocks taxes imposed by paragraph (1), to the same 
        extent as if such taxes were imposed by such section 
        5701. The Secretary may treat any person who bore the 
        ultimate burden of the tax imposed by paragraph (1) as 
        the person to whom a credit or refund under such 
        provisions may be allowed or made.
  (i) Effective Date.--The amendments made by this section 
shall apply to articles removed (as defined in section 5702(j) 
of the Internal Revenue Code of 1986) after December 31, 2007.

SEC. 702. ADMINISTRATIVE IMPROVEMENTS.

  (a) Permit, Report, and Record Requirements for Manufacturers 
and Importers of Processed Tobacco.--
          (1) Permits.--
                  (A) Application.--Section 5712 of the 
                Internal Revenue Code of 1986 is amended by 
                inserting ``or processed tobacco'' after 
                ``tobacco products''.
                  (B) Issuance.--Section 5713(a) of such Code 
                is amended by inserting ``or processed 
                tobacco'' after ``tobacco products''.
          (2) Inventories and reports.--
                  (A) Inventories.--Section 5721 of such Code 
                is amended by inserting ``, processed 
                tobacco,'' after ``tobacco products''.
                  (B) Reports.--Section 5722 of such Code is 
                amended by inserting ``, processed tobacco,'' 
                after ``tobacco products''.
          (3) Records.--Section 5741 of such Code is amended by 
        inserting ``, processed tobacco,'' after ``tobacco 
        products''.
          (4) Manufacturer of processed tobacco.--Section 5702 
        of such Code is amended by adding at the end the 
        following new subsection:
  ``(p) Manufacturer of Processed Tobacco.--
          ``(1) In general.--The term `manufacturer of 
        processed tobacco' means any person who processes any 
        tobacco other than tobacco products.
          ``(2) Processed tobacco.--The processing of tobacco 
        shall not include the farming or growing of tobacco or 
        the handling of tobacco solely for sale, shipment, or 
        delivery to a manufacturer of tobacco products or 
        processed tobacco.''.
          (5) Conforming amendment.--Section 5702(k) of such 
        Code is amended by inserting ``, or any processed 
        tobacco,'' after ``nontaxpaid tobacco products or 
        cigarette papers or tubes''.
          (6) Effective date.--The amendments made by this 
        subsection shall take effect on January 1, 2008.
  (b) Basis for Denial, Suspension, or Revocation of Permits.--
          (1) Denial.--Paragraph (3) of section 5712 of such 
        Code is amended to read as follows:
          ``(3) such person (including, in the case of a 
        corporation, any officer, director, or principal 
        stockholder and, in the case of a partnership, a 
        partner)--
                  ``(A) is, by reason of his business 
                experience, financial standing, or trade 
                connections or by reason of previous or current 
                legal proceedings involving a felony violation 
                of any other provision of Federal criminal law 
                relating to tobacco products, cigarette paper, 
                or cigarette tubes, not likely to maintain 
                operations in compliance with this chapter,
                  ``(B) has been convicted of a felony 
                violation of any provision of Federal or State 
                criminal law relating to tobacco products, 
                cigarette paper, or cigarette tubes, or
                  ``(C) has failed to disclose any material 
                information required or made any material false 
                statement in the application therefor.''.
          (2) Suspension or revocation.--Subsection (b) of 
        section 5713 of such Code is amended to read as 
        follows:
  ``(b) Suspension or Revocation.--
          ``(1) Show cause hearing.--If the Secretary has 
        reason to believe that any person holding a permit--
                  ``(A) has not in good faith complied with 
                this chapter, or with any other provision of 
                this title involving intent to defraud,
                  ``(B) has violated the conditions of such 
                permit,
                  ``(C) has failed to disclose any material 
                information required or made any material false 
                statement in the application for such permit,
                  ``(D) has failed to maintain his premises in 
                such manner as to protect the revenue,
                  ``(E) is, by reason of previous or current 
                legal proceedings involving a felony violation 
                of any other provision of Federal criminal law 
                relating to tobacco products, cigarette paper, 
                or cigarette tubes, not likely to maintain 
                operations in compliance with this chapter, or
                  ``(F) has been convicted of a felony 
                violation of any provision of Federal or State 
                criminal law relating to tobacco products, 
                cigarette paper, or cigarette tubes,
        the Secretary shall issue an order, stating the facts 
        charged, citing such person to show cause why his 
        permit should not be suspended or revoked.
          ``(2) Action following hearing.--If, after hearing, 
        the Secretary finds that such person has not shown 
        cause why his permit should not be suspended or 
        revoked, such permit shall be suspended for such period 
        as the Secretary deems proper or shall be revoked.''.
          (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 December 31, 2007.
  (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 produced in the United States 
                at any place other than the premises of a 
                manufacturer of tobacco products, cigarette 
                paper, or cigarette tubes that has filed the 
                bond and obtained the permit required under 
                this chapter, tax shall be due and payable 
                immediately upon manufacture.''.
          (2) Effective date.--The amendment made by this 
        subsection shall take effect on the date of the 
        enactment of this Act.

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

  Subparagraph (B) of section 401(1) of the Tax Increase 
Prevention and Reconciliation Act of 2005 is amended by 
striking ``114.75 percent'' and inserting ``113.75 percent''.

  In lieu of the matter proposed to be inserted to the title of 
the Act, insert the following: ``An Act to amend title XXI of 
the Social Security Act to extend and improve the Children's 
Health Insurance Program, and for other purposes.''.

                                  
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