[House Report 115-728]
[From the U.S. Government Publishing Office]


115th Congress     }                                   {       Report
                        HOUSE OF REPRESENTATIVES
 2d Session        }                                   {      115-728
======================================================================



 
   MEDICAID DRUG REVIEW, UTILIZATION, GOOD GOVERNANCE IMPROVEMENT ACT

                                _______
                                

 June 12, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Walden, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 5799]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 5799) to amend title XIX of the Social Security 
Act to require as a condition of receipt of full Federal 
medical assistance percentage under Medicaid that State 
Medicaid plans have in place certain drug utilization review 
activities, having considered the same, report favorably 
thereon with amendments and recommend that the bill as amended 
do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     4
Background and Need for Legislation..............................     4
Committee Action.................................................     7
Committee Votes..................................................     7
Oversight Findings and Recommendations...........................     8
New Budget Authority, Entitlement Authority, and Tax Expenditures     8
Congressional Budget Office Estimate.............................     8
Federal Mandates Statement.......................................    30
Statement of General Performance Goals and Objectives............    30
Duplication of Federal Programs..................................    30
Committee Cost Estimate..........................................    30
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......    31
Disclosure of Directed Rule Makings..............................    31
Advisory Committee Statement.....................................    31
Applicability to Legislative Branch..............................    31
Section-by-Section Analysis of the Legislation...................    31
Changes in Existing Law Made by the Bill, as Reported............    32

    The amendments are as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Medicaid Drug Review, Utilization, 
Good Governance Improvement Act'' or the ``Medicaid DRUG Improvement 
Act''.

SEC. 2. MEDICAID DRUG UTILIZATION REVIEW.

  (a) State Plan Requirement.--Section 1902(a) of the Social Security 
Act (42 U.S.C. 1396a(a)) is amended--
          (1) in paragraph (82), at the end, by striking ``and'';
          (2) in paragraph (83), at the end, by striking the period and 
        inserting ``; and''; and
          (3) by inserting after paragraph (83) the following new 
        paragraph:
          ``(84) provide that the State is in compliance with the drug 
        review and utilization requirements under subsection 
        (nn)(1).''.
  (b) Drug Review and Utilization Requirements.--Section 1902 of the 
Social Security Act (42 U.S.C. 1396a) is amended by adding at the end 
the following new subsection:
  ``(nn) Drug Review and Utilization Requirements.--
          ``(1) In general.--For purposes of subsection (a)(84), the 
        drug review and utilization requirements under this subsection 
        are, subject to paragraph (3) and beginning October 1, 2019, 
        the following:
                  ``(A) Claims review limitations.--
                          ``(i) In general.--The State has in place--
                                  ``(I) safety edits (as specified by 
                                the State) for subsequent fills for 
                                opioids and a claims review automated 
                                process (as designed and implemented by 
                                the State) that indicates when an 
                                individual enrolled under the State 
                                plan (or under a waiver of the State 
                                plan) is prescribed a subsequent fill 
                                of opioids in excess of any limitation 
                                that may be identified by the State;
                                  ``(II) safety edits (as specified by 
                                the State) on the maximum daily 
                                morphine equivalent that can be 
                                prescribed to an individual enrolled 
                                under the State plan (or under a waiver 
                                of the State plan) for treatment of 
                                chronic pain and a claims review 
                                automated process (as designed and 
                                implemented by the State) that 
                                indicates when an individual enrolled 
                                under the plan (or waiver) is 
                                prescribed the morphine equivalent for 
                                such treatment in excess of any 
                                limitation that may be identified by 
                                the State; and
                                  ``(III) a claims review automated 
                                process (as designed and implemented by 
                                the State) that monitors when an 
                                individual enrolled under the State 
                                plan (or under a waiver of the State 
                                plan) is concurrently prescribed 
                                opioids and--
                                          ``(aa) benzodiazepines; or
                                          ``(bb) antipsychotics.
                          ``(ii) Managed care entities.--The State 
                        requires each managed care entity (as defined 
                        in section 1932(a)(1)(B)) with respect to which 
                        the State has a contract under section 1903(m) 
                        or under section 1905(t)(3) to have in place, 
                        subject to paragraph (3), with respect to 
                        individuals who are eligible for medical 
                        assistance under the State plan (or under a 
                        waiver of the State plan) and who are enrolled 
                        with the entity, the limitations described in 
                        subclauses (I) and (II) of clause (i) and a 
                        claims review automated process described in 
                        subclause (III) of such clause.
                          ``(iii) Rules of construction.--Nothing in 
                        this subparagraph may be construed as 
                        prohibiting a State or managed care entity from 
                        designing and implementing a claims review 
                        automated process under this subparagraph that 
                        provides for prospective or retrospective 
                        reviews of claims. Nothing in this subparagraph 
                        shall be understood as prohibiting the exercise 
                        of clinical judgment from a provider enrolled 
                        as a participating provider in a State plan (or 
                        waiver of the State plan) or contracting with a 
                        managed care entity regarding the best items 
                        and services for an individual enrolled under 
                        such State plan (or waiver).
                  ``(B) Program to monitor antipsychotic medications by 
                children.--The State has in place a program (as 
                designed and implemented by the State), including such 
                a program that the State had in place before the date 
                of the enactment of this subsection, to monitor and 
                manage the appropriate use of antipsychotic medications 
                by children enrolled under the State plan (or under a 
                waiver of the State plan) and submits annually to the 
                Secretary such information as the Secretary may require 
                on activities carried out under such program for 
                individuals not more than the age of 18 years generally 
                and children in foster care specifically.
                  ``(C) Fraud and abuse identification.--The State has 
                in place a process (as designed and implemented by the 
                State), including such a process that the State had in 
                place before the date of the enactment of this 
                subsection, that identifies potential fraud or abuse of 
                controlled substances by individuals enrolled under the 
                State plan (or under a waiver of the State plan), 
                health care providers prescribing drugs to individuals 
                so enrolled, and pharmacies dispensing drugs to 
                individuals so enrolled.
                  ``(D) Reports.--The State shall include in the annual 
                report submitted to the Secretary under section 
                1927(g)(3)(D) information on the limitations, 
                requirement, program, and processes applied by the 
                State under subparagraphs (A) through (C) in accordance 
                with such manner and time as specified by the 
                Secretary.
          ``(2) Annual report by secretary.--For each fiscal year 
        beginning with fiscal year 2020, the Secretary shall submit to 
        Congress a report on the most recent information submitted by 
        States under paragraph (1)(D).
          ``(3) Exceptions.--
                  ``(A) Certain individuals exempted.--The drug review 
                and utilization requirements under this subsection 
                shall not apply with respect to an individual who--
                          ``(i) is receiving--
                                  ``(I) hospice or palliative care; or
                                  ``(II) treatment for cancer;
                          ``(ii) is a resident of a long-term care 
                        facility, of a facility described in section 
                        1905(d), or of another facility for which 
                        frequently abused drugs are dispensed for 
                        residents through a contract with a single 
                        pharmacy; or
                          ``(iii) the State elects to treat as exempted 
                        from such requirements.
                  ``(B)  Exception relating to ensuring access.--In 
                order to ensure reasonable access to health care, the 
                Secretary may waive the drug review and utilization 
                requirements under this subsection, with respect to a 
                State, in the case of natural disasters and similar 
                situations, and in the case of the provision of 
                emergency services (as defined for purposes of section 
                1860D-4(c)(5)(D)(ii)(II)).''.
  (c) Managed Care Entities.--Section 1932 of the Social Security Act 
(42 U.S.C. 1396u-2) is amended by adding at the end the following new 
subsection:
  ``(i) Drug Utilization Review Activities and Requirements.--Beginning 
not later than October 1, 2019, each contract under a State plan with a 
managed care entity (other than a primary care case manager) under 
section 1903(m) shall provide that the entity is in compliance with the 
applicable provisions of section 438.3(s)(2) of title 42 of the Code of 
Federal Regulations, section 483.3(s)(4)) of such title, and section 
483.3(s)(5) of such title, as such provisions were in effect on March 
31, 2018.''.

SEC. 3. IDENTIFYING AND ADDRESSING INAPPROPRIATE PRESCRIBING AND 
                    BILLING PRACTICES UNDER MEDICAID.

  (a) In General.--Section 1927(g) of the Social Security Act (42 
U.S.C. 1396r-8(g)) is amended--
          (1) in paragraph (1)(A)--
                  (A) by striking ``of section 1903(i)(10)(B)'' and 
                inserting ``of section 1902(a)(54)'';
                  (B) by striking ``, by not later than January 1, 
                1993,'';
                  (C) by inserting after ``gross overuse,'' the 
                following: ``excessive utilization,''; and
                  (D) by striking ``or inappropriate or medically 
                unnecessary care'' and inserting ``inappropriate or 
                medically unnecessary care, or prescribing or billing 
                practices that indicate abuse or excessive 
                utilization''; and
          (2) in paragraph (2)(B)--
                  (A) by inserting after ``gross overuse,'' the 
                following: ``excessive utilization,'';
                  (B) by striking ``or inappropriate or medically 
                unnecessary care'' and inserting ``inappropriate or 
                medically unnecessary care, or prescribing or billing 
                practices that indicate abuse or excessive 
                utilization''; and
                  (C) by adding at the end the following new sentence: 
                ``In the case that the program identifies a pattern 
                described in the previous sentence, the State shall 
                take such remedial actions as determined necessary to 
                address such pattern.''.
  (b) Effective Date.--The amendments made by subsection (a) shall take 
effect with respect to retrospective drug use reviews conducted on or 
after October 1, 2020.

    Amend the title so as to read:
    A bill to amend title XIX of the Social Security Act to 
require under Medicaid that State Medicaid plans have in place 
certain drug utilization review activities, and to require 
States to identify and address inappropriate prescribing and 
billing practices under Medicaid.

                          Purpose and Summary

    H.R. 5799 was introduced on May 15, 2018, by Rep. Marsha 
Blackburn (R-TN). The bill builds on current state Medicaid 
drug utilization review (DUR) activities to help combat the 
opioid crisis. Under the bill, state Medicaid programs will be 
required to have safety edits in place for opioid refills, 
monitor concurrent prescribing of opioids and certain other 
drugs, and monitor antipsychotic prescribing for children.

                  Background and Need for Legislation

    Deaths due to overdoses of opioids and other drugs have 
ravaged American communities. According to the Centers for 
Disease Control and Prevention (CDC), on average, 1,000 people 
are treated for opioid misuse in emergency departments per day, 
an average of 115 Americans die per day, and opioid-related 
overdoses have increased steadily since 1999.\1\
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    \1\Centers for Disease Control and Prevention. ``Drug Overdose 
Death Data.'' December 19, 2017. Available at https://www.cdc.gov/
drugoverdose/data/statedeaths.html.
---------------------------------------------------------------------------
    While the impacts to Americans' health outcomes are 
staggering, the opioid crisis has negatively impacted society 
in numerous ways. The Centers for Disease Control and 
Prevention note that life expectancy dropped in 2015 and 2106 
and that one of the reasons was an increase in unintentional 
injuries, a category that includes drug overdoses.\2\ The 
opioid crisis has also resulted in a contraction in the labor 
force by almost 1 million workers in the years between 1999 and 
2015, which resulted in a loss of $702 billion in real 
output.\3\ In 2015, the total economic burden of the opioid 
epidemic was estimated to be $504 billion.\4\ While all states 
were negatively impacted, there is geographic variation in the 
burden. West Virginia had the greatest loss per person ($4,378) 
and Nebraska had the lowest loss per person ($394).\4\ One 
recent analysis found that the annual cost for private sector 
employers for treating opioid addiction and overdoses has 
increased more than eight-fold since 2004, and more than one in 
five persons aged 55 to 64 had at least one opioid prescription 
in 2016.\5\
---------------------------------------------------------------------------
    \2\Dowell, D., Arias E., Kochanek K. et al. ``Contribution of 
Opioid-Involved Poisoning to the Change in Life Expectancy in the 
United States, 2000-2015.'' JAMA, September 2017. Available at https://
jamanetwork.com/journals/jama/fullarticle/2654372.
    \3\American Action Forum. ``The Labor Force and Output Consequences 
of the Opioid Crisis.'' March 27, 2018. Available at https://
www.americanactionforum.org/research/labor-force-output-consequences-
opioid-crisis/.
    \4\American Enterprise Institute. ``The Geographic Variation in the 
Cost of the Opioid Crisis''. Available at https://www.aei.org/wp-
content/uploads/2018/03/Geographic_Variation_in_Cost_of_ 
Opioid_Crisis.pdf.
    \5\Kaiser Family Foundation, ``A Look at How the Opioid Crisis Has 
Affected People with Employer Coverage,'' April 2018. Available online 
at: https://www.kff.org/health-costs/press-release/analysis-cost-of-
treating-opioid-addiction-rose-rapidly-for-large-employers-as-the-
number-of-prescriptions-has-declined/.
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    Medicaid is the largest source of federal funding for 
behavioral health services--mental health and substance use 
disorder services--with nearly $71 billion in projected 2017 
spending.\6\ As the Medicaid and CHIP Payment and Access 
Commission (MACPAC) stated in 2017, ``the opioid epidemic, 
which has reached most communities across the U.S., 
disproportionately affects Medicaid beneficiaries.''\7\ Of the 
two million non-elderly Americans with opioid addiction, 
Medicaid provides health coverage for an estimated 38 percent 
of this population, which is the largest percentage of any 
insurer type.\8\ Medicaid provides care to 4 in 10 adults with 
opioid use disorder and compared to other insurance types, 
provides a significantly higher percentage of inpatient and 
outpatient substance use disorder treatment.\9\
---------------------------------------------------------------------------
    \6\Government Accountability Office, ``Medicaid: States Fund 
Services for Adults in Institutions for Mental Disease Using a Variety 
of Strategies,'' GAO-17-652, August 2017. Available at https://
www.gao.gov/assets/690/686456.pdf.
    \7\Medicaid and CHIP Payment and Access Commission, ``Medicaid and 
the Opioid Epidemic,'' Chapter 2 in June 2017 Report to Congress on 
Medicaid and CHIP. Available at: https://www.macpac.gov/wp-content/
uploads/2017/06/Medicaid-and-the-Opioid-Epidemic.pdf.
    \8\Kaiser Family Foundation. ``Medicaid's Role in Addressing the 
Opioid Epidemic.'' Available at https://www.kff.org/infographic/
medicaids-role-in-addressing-opioid-epidemic/.
    \9\Kaiser Family Foundation. ``Medicaid's Role in Addressing the 
Opioid Epidemic.'' Available at https://www.kff.org/infographic/
medicaids-role-in-addressing-opioid-epidemic/.
---------------------------------------------------------------------------
    MACPAC found that ``Medicaid beneficiaries are prescribed 
pain relievers at higher rates than those with other sources of 
insurance. They also have a higher risk of overdose and other 
negative outcomes, from both prescription opioids and illegal 
opioids such as heroin and illicitly manufactured 
fentanyl.''\10\ Not only are the number of Medicaid 
beneficiaries with opioid misuse disproportionately high, so 
too are the number of overdoses. Studies from North Carolina 
and Washington indicate high rates of opioid-related deaths for 
the Medicaid population (33 percent and 45 percent, 
respectively).
---------------------------------------------------------------------------
    \10\Medicaid and CHIP Payment and Access Commission, ``Medicaid and 
the Opioid Epidemic,'' Chapter 2 in June 2017 Report to Congress on 
Medicaid and CHIP. Available at: https://www.macpac.gov/wp-content/
uploads/2017/06/Medicaid-and-the-Opioid-Epidemic.pdf.
---------------------------------------------------------------------------
    For treatment, Medicaid has several pharmacy and medical 
benefits for treating opioid use disorder that vary by state. A 
primary pharmaceutical treatment offered to patients with 
opioid abuse and/or substance use disorder is medication-
assisted treatment (MAT). The Substance Abuse and Mental Health 
Services Administration (SAMHSA) describes MAT as ``the use of 
FDA-approved medications, in combination with counseling and 
behavioral therapies, to provide a ``whole-patient'' approach 
to the treatment of substance use disorders.''\11\
---------------------------------------------------------------------------
    \11\See SAMHSA website. Available at: https://www.samhsa.gov/
medication-assisted-treatment.
---------------------------------------------------------------------------
    Non-pharmaceutical treatment of opioid use disorder in 
Medicaid occurs in inpatient, outpatient, residential, and 
community-based settings. MACPAC's 2017 analysis found that 
``Medicaid is responding to the opioid crisis by covering 
treatment, innovating in the delivery of care, and working with 
other state agencies to reduce misuse of prescription 
opioids.''\12\ State Medicaid programs adopt strategies and 
design their programs to meet the needs of their Medicaid 
beneficiaries resulting in variations in covered treatment 
services and settings. It is important state Medicaid programs 
provide a continuum of care to serve the needs of Medicaid 
beneficiaries.
---------------------------------------------------------------------------
    \12\Medicaid and CHIP Payment and Access Commission, ``Medicaid and 
the Opioid Epidemic,'' Chapter 2 in June 2017 Report to Congress on 
Medicaid and CHIP. Available at: https://www.macpac.gov/wp-content/
uploads/2017/06/Medicaid-and-the-Opioid-Epidemic.pdf.
---------------------------------------------------------------------------
    However, as MACPAC noted, ``there are gaps in the continuum 
of care, and states vary in the extent to which they cover 
needed treatment.''\13\ One of the barriers to appropriate 
treatment consistently identified by Medicaid directors and 
health policy experts is a statutory prohibition on federal 
Medicaid matching funds for paying for care for certain 
Medicaid beneficiaries in Institutions for Mental Diseases 
(IMD). As MACPAC has explained, ``the Medicaid IMD exclusion 
acts a barrier for individuals with an opioid use disorder to 
receive residential treatment, which, depending on an 
individual's treatment plan, may be the most appropriate 
setting for care.''\14\ Given these and other findings, there 
continues to be an opportunity for Congress and state Medicaid 
programs to work to improve access to timely, high-quality 
treatment across the continuum of care.
---------------------------------------------------------------------------
    \13\Medicaid and CHIP Payment and Access Commission, ``Medicaid and 
the Opioid Epidemic,'' Chapter 2 in June 2017 Report to Congress on 
Medicaid and CHIP. Available at: https://www.macpac.gov/wp-content/
uploads/2017/06/Medicaid-and-the-Opioid-Epidemic.pdf.
    \14\Medicaid and CHIP Payment and Access Commission, ``Medicaid and 
the Opioid Epidemic,'' Chapter 2 in June 2017 Report to Congress on 
Medicaid and CHIP. Available at: https://www.macpac.gov/wp-content/
uploads/2017/06/Medicaid-and-the-Opioid-Epidemic.pdf.
---------------------------------------------------------------------------
    Prescription drugs are an optional Medicaid benefit, but 
all states cover outpatient drugs. States are required to cover 
most prescription drugs offered by drug manufacturers that 
participate in the Medicaid rebate program. States may use drug 
utilization management tools to help administer the Medicaid 
outpatient prescription drug benefit.\15\ In addition to drug 
utilization tools to help appropriately administer the Medicaid 
drug benefit, states may receive federal financial support to 
implement information technology systems to process Medicaid 
prescription drug claims and collect and report DUR data.\16\
---------------------------------------------------------------------------
    \15\Social Security Act (SSA) Section 1927, Payment for Covered 
Outpatient Drugs.
    \16\SSA Section 1927(h), Electronic Claims Management. All states 
operate outpatient prescription drug claim processing information 
technology systems.
---------------------------------------------------------------------------
    State Medicaid programs are required to report annually to 
the Centers for Medicare and Medicaid Services their DUR 
program activities and processes to ensure appropriate drug 
utilization, including appropriate opioid utilization (which 
could include placing safety edits on opioids, monitoring the 
concurrent use of opioids and benzodiazepines, employing a 
prescription drug monitoring program requirement, and using 
tools to measure morphine milligram equivalents per day). 
States are required to include in their annual DUR reports the 
drug utilization of Medicaid beneficiaries served by managed 
care organizations under contract to the state Medicaid 
program. The 2016 CMS Drug Utilization Review report noted that 
Medicaid programs saved on average about 18 percent on 
expenditures compared to the total Medicaid expenditures.\17\
---------------------------------------------------------------------------
    \17\Centers for Medicare and Medicaid Services, Center for Medicaid 
& CHIP Services. ``Medicaid Drug Utilization Review State Comparison/ 
Summary Report FFY 2016 Annual Report.'' October 2017. Available at: 
https://www.medicaid.gov/medicaid-chip-program-information/by-topics/
prescription-drugs/downloads/2016-dur-summary-report.pdf.
---------------------------------------------------------------------------
    State coverage of SUD treatment drugs varies, but all 
states cover some SUD drugs, which may include buprenorphine or 
buprenorphine/naloxone combination drugs. All states may cover 
buprenorphine and buprenorphine/naloxone combination products 
under some circumstances through a formulary or by prior 
authorization. State formularies may limit the daily dose of 
buprenorphine or buprenorphine/naloxone combination drugs that 
beneficiaries can receive. In 2016, 86 percent of states 
limited the total amount of buprenorphine and buprenorphine/
naloxone combination products that Medicaid beneficiaries could 
receive.\18\
---------------------------------------------------------------------------
    \18\Centers for Medicare and Medicaid Services, Center for Medicaid 
& CHIP Services. ``Medicaid Drug Utilization Review State Comparison/ 
Summary Report FFY 2016 Annual Report.'' October 2017. Available at: 
https://www.medicaid.gov/medicaid-chip-program-information/by-topics/
prescription-drugs/downloads/2016-dur-summary-report.pdf.
---------------------------------------------------------------------------
    State Medicaid programs are required to cover most children 
when their family income is below a certain percentage of the 
federal poverty guideline. In addition, state Medicaid programs 
are required to cover children in foster care. Children in 
foster care are children that states have removed from their 
homes and placed in another setting such as a foster family 
home, a group home, or a child care institution.
    Psychotropic drugs are used to treat mental health 
conditions such as attention disorders, depression, anxiety, 
conduct disorders, and other disorders. Youth covered by 
Medicaid are more likely to be prescribed psychotropic drugs 
than in private insurance plans.\19\ Foster care children are 
more likely to have mental health care needs than children 
generally and may be prescribed psychotropic medications as 
part of their treatment.\20\ Currently, 43 states have programs 
in place to either manage or monitor the appropriate use of 
antipsychotic medications in children.\21\
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    \19\Crystal S, Olfson M, Huang C, Pincus H, and T. Gerhard. 
``Broadened Use of Atypical Antipsychotics: Safety, Effectiveness, and 
Policy Challenges.'' Health Affairs 28, no. 5.
    \20\National Resource Center for Family-Centered Practice and 
Permanency Planning. ``Information Packet: Mental Health Care Issues of 
Children and Youth in Foster Care'' April 2008. Available at http://
www.ncsl.org/research/human-services/mental-health-and-foster-
care.aspx.
    \21\Centers for Medicare and Medicaid Services, Center for Medicaid 
& CHIP Services. ``Medicaid Drug Utilization Review State Comparison/ 
Summary Report FFY 2016 Annual Report.'' October 2017. Available at: 
https://www.medicaid.gov/medicaid-chip-program-information/by-topics/
prescription-drugs/downloads/2016-dur-summary-report.pdf.
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                            Committee Action

    On April 11 and 12, 2018, the Subcommittee on Health held a 
hearing on a discussion draft entitled ``Medicaid Drug 
Improvement Act.'' The Subcommittee received testimony from:
            Kimberly Brandt, Principal Deputy 
        Administrator for Operations, Centers for Medicare and 
        Medicaid Services, U.S. Department of Health and Human 
        Services;
           Michael Botticelli, Executive Director, 
        Grayken Center for Addiction, Boston Medical Center;
           Toby Douglas, Senior Vice President, 
        Medicaid Solutions, Centene Corporation;
           David Guth, Chief Executive Officer, 
        Centerstone;
           John Kravitz, Chief Information Officer, 
        Geisinger Health System; and,
           Sam Srivastava, Chief Executive Officer, 
        Magellan Health.
    On April 25, 2018, the Subcommittee on Health met in open 
markup session and forwarded the discussion draft, without 
amendment, to the full Committee by a record vote of 18 yeas 
and 9 nays. On May 17, 2018, the full Committee on Energy and 
Commerce met in open markup session and ordered H.R. 5799, as 
amended, favorably reported to the House by a voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII requires the Committee to list the 
record votes on the motion to report legislation and amendments 
thereto. There were no record votes taken in connection with 
ordering H.R. 5799 reported.

                 Oversight Findings and Recommendations

    Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII, the Committee held a hearing and made findings that 
are reflected in this report.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    Pursuant to clause 3(c)(2) of rule XIII, the Committee 
finds that H.R. 5799 would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII, the following is 
the cost estimate provided by the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, June 6, 2018.
Hon. Greg Walden,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed document with cost estimates for the 
opioid-related legislation ordered to be reported on May 9 and 
May 17, 2018.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Tom Bradley 
and Chad Chirico.
            Sincerely,
                                             Mark P. Hadley
                                        (For Keith Hall, Director).
    Enclosure.

Opioid Legislation

    Summary: On May 9 and May 17, 2018, the House Committee on 
Energy and Commerce ordered 59 bills to be reported related to 
the nation's response to the opioid epidemic. Generally, the 
bills would:
           Provide grants to facilities and providers 
        that treat people with substance use disorders,
           Direct various agencies within the 
        Department of Health and Human Services (HHS) to 
        explore nonopioid approaches to treating pain and to 
        educate providers about those alternatives,
           Modify requirements under Medicaid and 
        Medicare for prescribing controlled substances,
           Expand Medicaid coverage for substance abuse 
        treatment, and
           Direct the Food and Drug Administration 
        (FDA) to modify its oversight of opioid drugs and other 
        medications that are used to manage pain.
    Because of the large number of related bills ordered 
reported by the Committee, CBO is publishing a single 
comprehensive document that includes estimates for each piece 
of legislation.
    CBO estimates that enacting 20 of the bills would affect 
direct spending, and 2 of the bills would affect revenues; 
therefore, pay-as-you-go procedures apply for those bills.
    CBO estimates that enacting H.R. 4998, the Health Insurance 
for Former Foster Youth Act, would increase net direct spending 
by more than $2.5 billion and on-budget deficits by more than 
$5 billion in at least one of the four consecutive 10-year 
periods beginning in 2029. None of the remaining 58 bills 
included in this estimate would increase net direct spending by 
more than $2.5 billion or on-budget deficits by more than $5 
billion in any of the four consecutive 10-year periods 
beginning in 2029.
    One of the bills reviewed for this document, H.R. 5795, 
would impose both intergovernmental and private-sector mandates 
as defined in the Unfunded Mandates Reform Act (UMRA). CBO 
estimates that the costs of those mandates on public and 
private entities would fall below the thresholds in UMRA ($80 
million and $160 million, respectively, in 2018, adjusted 
annually for inflation). Five bills, H.R. 5228, H.R. 5333, H.R. 
5554, H.R. 5687, and H.R. 5811, would impose private-sector 
mandates as defined in UMRA. CBO estimates that the costs of 
the mandates in three of the bills (H.R. 5333, H.R. 5554, and 
H.R. 5811) would not exceed the UMRA threshold for private 
entities. Because CBO is uncertain how federal agencies would 
implement new authority granted in the other two bills, H.R. 
5228 and H.R. 5687, CBO cannot determine whether the costs of 
those mandates would exceed the UMRA threshold.
    Estimated cost to the Federal Government: The estimates in 
this document do not include the effects of interactions among 
the bills. If all 59 bills were combined and enacted as one 
piece of legislation, the budgetary effects would be different 
from the sum of the estimates in this document, although CBO 
expects that any such differences would be small. The costs of 
this legislation fall within budget functions 550 (health), 570 
(Medicare), 750 (administration of justice), and 800 (general 
government).
    Basis of estimate: For this estimate, CBO assumes that all 
of the legislation will be enacted late in 2018 and that 
authorized and estimated amounts will be appropriated each 
year. Outlays for discretionary programs are estimated based on 
historical spending patterns for similar programs.

Uncertainty

    CBO aims to produce estimates that generally reflect the 
middle of a range of the most likely budgetary outcomes that 
would result if the legislation was enacted. Because data on 
the utilization of mental health and substance abuse treatment 
under Medicaid and Medicare is scarce, CBO cannot precisely 
predict how patients or providers would respond to some policy 
changes or what budgetary effects would result. In addition, 
several of the bills would give the Department of Health and 
Human Services (HHS) considerable latitude in designing and 
implementing policies. Budgetary effects could differ from 
those provided in CBO's analyses depending on those decisions.

Direct spending and revenues

    Table 1 lists the 22 bills of the 59 ordered to be reported 
that would affect direct spending or revenues.

                                             TABLE 1.--ESTIMATED CHANGES IN MANDATORY SPENDING AND REVENUES
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         By fiscal year, in millions of dollars--
                                ------------------------------------------------------------------------------------------------------------------------
                                   2018     2019     2020     2021     2022     2023     2024     2025     2026     2027     2028   2019-2023  2019-2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      INCREASES OR DECREASES (-) IN DIRECT SPENDING
 
Legislation Primarily Affecting
 Medicaid:
    H.R. 1925, At-Risk Youth           0        *        5        5        5       10       10       10       10       10       10        25          75
     Medicaid Protection Act of
     2017......................
    H.R. 4998, Health Insurance        0        0        0        0        0        *       10       21       33       46       61         *         171
     for Former Foster Youth
     Act.......................
    H.R. 5477, Rural                   0       13       35       58       68       83       27        9        3        3        3       256         301
     Development of Opioid
     Capacity Services Act.....
    H.R. 5583, a bill to amend         0        *        *        *        *        *        *        *        *        *        *         *           *
     title XI of the Social
     Security Act to require
     States to annually report
     on certain adult health
     quality measures, and for
     other purposes............
    H.R. 5797, IMD CARE Act....        0       38      158      251      265      279        0        0        0        0        0       991         991
    H.R. 5799, Medicaid DRUG           0        *        *        1        1        1        1        1        1        1        1         2           5
     Improvement Acta..........
    H.R. 5801 Medicaid                 0        *        *        *        *        *        *        *        *        *        *         *           *
     Providers Are Required To
     Note Experiences in Record
     Systems to Help In-Need
     Patients (PARTNERSHIP)
     Acta......................
    H.R. 5808, Medicaid                0        *       -1       -1       -1       -1       -2       -2       -2       -2       -2        -4         -13
     Pharmaceutical Home Act of
     2018a.....................
    H.R. 5810, Medicaid Health         0       94       58       62       56       52       48       43       38       32       25       323         509
     HOME Act..................
Legislation Primarily Affecting
 Medicare:
    H.R. 3528, Every                   0        0        0      -24      -35      -33      -30      -33      -32      -31      -32       -92        -250
     Prescription Conveyed
     Securely Act..............
    H.R. 4841, Standardizing           0        0        0        *        *        *        *        *        *        *        *         *           *
     Electronic Prior
     Authorization for Safe
     Prescribing Act of 2018...
    H.R. 5603, Access to               0        2        *        *        *        1        1        1        2        2        2         3          11
     Telehealth Services for
     Opioid Use Disorders Act..
    H.R. 5605, Advancing High          0        0        0       15       26       24       23       23       10        1        *        65         122
     Quality Treatment for
     Opioid Use Disorders in
     Medicare Act..............
    H.R. 5675, a bill to amend         0        0        0       -6       -7       -7       -7       -8       -9       -9      -11       -20         -64
     title XVIII of the Social
     Security Act to require
     prescription drug plan
     sponsors under the
     Medicare program to
     establish drug management
     programs for at-risk
     beneficiaries.............
    H.R. 5684, Protecting              0        0        0        *        *        *        *        *        *        *        *         *           *
     Seniors From Opioid Abuse
     Act.......................
    H.R. 5796, Responsible             0       10       25       50       10        5        0        0        0        0        0       100         100
     Education Achieves Care
     and Healthy Outcomes for
     Users' Treatment Act of
     2018......................
    H.R. 5798, Opioid Screening        0        0        *        1        1        1        1        1        1        1        1         2           5
     and Chronic Pain
     Management Alternatives
     for Seniors Act...........
    H.R. 5804, Post-Surgical           0        0       25       30       25       20       10        5        0        0        0       100         115
     Injections as an Opioid
     Alternative Acta..........
    H.R. 5809, Postoperative           0        0        0        0       10       15       20       25       30       35       45        25         180
     Opioid Prevention Act of
     2018......................
Legislation Primarily Affecting
 the Food and Drug
 Administration:
    H.R. 5333, Over-the-Counter        0        0        *        *        *        *        *        *        *        *        *         *           *
     Monograph Safety,
     Innovation, and Reform Act
     of 2018a..................
 
                                                         INCREASES OR DECREASES (-) IN REVENUESb
 
    H.R. 5752, Stop Illicit            0        *        *        *        *        *        *        *        *        *        *         *          *
     Drug Importation Act of
     2018......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual amounts may not sum to totals because of rounding. * = between -$500,000 and $500,000. Budget authority is equivalent to outlays.
aThis bill also would affect spending subject to appropriation.
bOne additional bill, H.R. 5228, the Stop Counterfeit Drugs by Regulating and Enhancing Enforcement Now Act, would have a negligible effect on revenues.

    Legislation Primarily Affecting Medicaid. The following 
nine bills would affect direct spending for the Medicaid 
program.
    H.R. 1925, the At-Risk Youth Medicaid Protection Act of 
2017, would require states to suspend, rather than terminate, 
Medicaid eligibility for juvenile enrollees (generally under 21 
years of age) who become inmates of public correctional 
institutions. States also would have to redetermine those 
enrollees' Medicaid eligibility before their release and 
restore their coverage upon release if they qualify for the 
program. States would be required to process Medicaid 
applications submitted by or on behalf of juveniles in public 
correctional institutions who were not enrolled in Medicaid 
before becoming inmates and ensure that Medicaid coverage is 
provided when they are released if they are found to be 
eligible. On the basis of an analysis of juvenile incarceration 
trends and of the per enrollee spending for Medicaid foster 
care children, who have a similar health profile to 
incarcerated juveniles, CBO estimates that implementing the 
bill would cost $75 million over the 2019-2028 period.
    H.R. 4998, the Health Insurance for Former Foster Youth 
Act, would require states to provide Medicaid coverage to 
adults up to age 25 who had aged out of foster care in any 
state. Under current law, such coverage is mandatory only if 
the former foster care youth has aged out in the state in which 
the individual applies for coverage. The policy also would 
apply to former foster children who had been in foster care 
upon turning 14 years of age but subsequently left foster care 
to enter into a legal guardianship with a kinship caregiver. 
The provisions would take effect respect for foster youth who 
turn 18 on or after January 1, 2023. On the basis of spending 
for Medicaid foster care children and data from the Census 
Bureau regarding annual migration rates between states, CBO 
estimates that implementing the bill would cost $171 million 
over the 2019-2028 period.
    H.R. 5477, the Rural Development of Opioid Capacity 
Services Act, would direct the Secretary of HHS to conduct a 
five-year demonstration to increase the number and ability of 
providers participating in Medicaid to provide treatment for 
substance use disorders. On the basis of an analysis of federal 
and state spending for treatment of substance use disorders and 
the prevalence of such disorders, CBO estimates that enacting 
the bill would increase direct spending by $301 million over 
the 2019-2028 period.
    H.R. 5583, a bill to amend title XI of the Social Security 
Act to require States to annually report on certain adult 
health quality measures, and for other purposes, would require 
states to include behavioral health indicators in their annual 
reports on the quality of care under Medicaid. Although the 
bill would add a requirement for states, CBO estimates that its 
enactment would not have a significant budgetary effect because 
most states have systems in place for reporting such measures 
to the federal government.
    H.R. 5797, the IMD CARE Act, would expand Medicaid coverage 
for people with opioid use disorder who are in institutions for 
mental disease (IMDs) for up to 30 days per year. Under a 
current-law policy known as the IMD exclusion, the federal 
government generally does not make matching payments to state 
Medicaid programs for most services provided by IMDs to adults 
between the ages of 21 and 64. Recent administrative changes 
have made federal financing for IMDs available in limited 
circumstances, but the statutory prohibition remains in place. 
CBO analyzed several data sets, primarily those collected by 
the Substance Abuse and Mental Health Services Administration 
(SAMHSA), to estimate current federal spending under Medicaid 
for IMD services and to estimate spending under H.R. 5797. 
Using that analysis, CBO estimates that enacting H.R. 5797 
would increase direct spending by $991 million over the 2019-
2028 period.
    H.R. 5799, the Medicaid DRUG Improvement Act, would require 
state Medicaid programs to implement additional reviews of 
opioid prescriptions, monitor concurrent prescribing of opioids 
and certain other drugs, and monitor use of antipsychotic drugs 
by children. CBO estimates that the bill would increase direct 
spending by $5 million over 2019-2028 period to cover the 
administrative costs of complying with those requirements. On 
the basis of stakeholder feedback, CBO expects that the bill 
would not have a significant effect on Medicaid spending for 
prescription drugs because many of the bill's requirements 
would duplicate current efforts to curb opioid and 
antipsychotic drug use. (If enacted, H.R. 5799 also would 
affect spending subject to appropriation; CBO has not completed 
an estimate of that amount.)
    H.R. 5801, the Medicaid Providers Are Required To Note 
Experiences in Record Systems to Help-In-Need Patients 
(PARTNERSHIP) Act, would require providers who are permitted to 
prescribe controlled substances and who participate in Medicaid 
to query prescription drug monitoring programs (PDMPs) before 
prescribing controlled substances to Medicaid patients. PDMPs 
are statewide electronic databases that collect data on 
controlled substances dispensed in the state. The bill also 
would require PDMPs to comply with certain data and system 
criteria, and it would provide additional federal matching 
funds to certain states to help cover administrative costs. On 
the basis of a literature review and stakeholder feedback, CBO 
estimates that the net budgetary effect of enacting H.R. 5801 
would be insignificant. Costs for states to come into 
compliance with the systems and administrative requirements 
would be roughly offset by savings from small reductions in the 
number of controlled substances paid for by Medicaid under the 
proposal. (If enacted, H.R. 5801 also would affect spending 
subject to appropriation; CBO has not completed an estimate of 
that amount.)
    H.R. 5808, the Medicaid Pharmaceutical Home Act of 2018, 
would require state Medicaid programs to operate pharmacy 
programs that would identify people at high risk of abusing 
controlled substances and require those patients to use a 
limited number of providers and pharmacies. Although nearly all 
state Medicaid programs currently meet such a requirement, a 
small number of high-risk Medicaid beneficiaries are not now 
monitored. Based on an analysis of information about similar 
state and federal programs, CBO estimates that net Medicaid 
spending under the bill would decrease by $13 million over the 
2019-2028 period. That amount represents a small increase in 
administrative costs and a small reduction in the number of 
controlled substances paid for by Medicaid under the proposal. 
(If enacted, H.R. 5808 also would affect spending subject to 
appropriation; CBO has not completed an estimate of that 
amount.)
    H.R. 5810, the Medicaid Health HOME Act, would allow states 
to receive six months of enhanced federal Medicaid funding for 
programs that coordinate care for people with substance use 
disorders. Based on enrollment and spending data from states 
that currently participate in Medicaid's Health Homes program, 
CBO estimates that the expansion would cost approximately $469 
million over the 2019-2028 period. The bill also would require 
states to cover all FDA-approved drugs used in medication-
assisted treatment for five years, although states could seek a 
waiver from that requirement. (Medication-assisted treatment 
combines behavioral therapy and pharmaceutical treatment for 
substance use disorders.) Under current law, states already 
cover most FDA-approved drugs used in such programs in some 
capacity, although a few exclude methadone dispensed by opioid 
treatment programs. CBO estimates that a small share of those 
states would begin to cover methadone if this bill was enacted 
at a federal cost of about $39 million over the 2019-2028 
period. In sum, CBO estimates that the enacting H.R. 5810 would 
increase direct spending by $509 million over the 2019-2028 
period.
    Legislation Primarily Affecting Medicare. The following ten 
bills would affect direct spending for the Medicare program.
    H.R. 3528, the Every Prescription Conveyed Securely Act, 
would require prescriptions for controlled substances covered 
under Medicare Part D to be transmitted electronically, 
starting on January 1, 2021. Based on CBO's analysis of 
prescription drug spending, spending for controlled substances 
is a small share of total drug spending. CBO also assumes a 
small share of those prescriptions would not be filled because 
they are not converted to an electronic format. Therefore, CBO 
expects that enacting H.R. 3528 would reduce the number of 
prescriptions filled and estimates that Medicare spending would 
be reduced by $250 million over the 2019-2028 period.
    H.R. 4841, the Standardizing Electronic Prior Authorization 
for Safe Prescribing Act of 2018, would require health care 
professionals to submit prior authorization requests 
electronically, starting on January 1, 2021, for drugs covered 
under Medicare Part D. Taking into account that many 
prescribers already use electronic methods to submit such 
requests, CBO estimates that enacting H.R. 4841 would not 
significantly affect direct spending for Part D.
    H.R. 5603, the Access to Telehealth Services for Opioid Use 
Disorders Act, would permit the Secretary of HHS to lift 
current geographic and other restrictions on coverage of 
telehealth services under Medicare for treatment of substance 
use disorders or co-occurring mental health disorders. Under 
the bill, the Secretary of HHS would be directed to encourage 
other payers to coordinate payments for opioid use disorder 
treatments and to evaluate the extent to which the 
demonstration reduces hospitalizations, increases the use of 
medication-assisted treatments, and improves the health 
outcomes of individuals with opioid use disorders during and 
after the demonstration. Based on current use of Medicare 
telehealth services for treatment of substance use disorders, 
CBO estimates that expanding that coverage would increase 
direct spending by $11 million over the 2019-2028 period.
    H.R. 5605, the Advancing High Quality Treatment for Opioid 
Use Disorders in Medicare Act, would establish a five-year 
demonstration program to increase access to treatment for 
opioid use disorder. The demonstration would provide incentive 
payments and funding for care management services based on 
criteria such as patient engagement, use of evidence-based 
treatments, and treatment length and intensity. Under the bill, 
the Secretary of HHS would be directed to encourage other 
payers to coordinate payments for opioid use disorder 
treatments and to evaluate the extent to which the 
demonstration reduces hospitalizations, increases the use of 
medication-assisted treatments, and improves the health 
outcomes of individuals with opioid use disorders during and 
after the demonstration. Based on historical utilization of 
opioid use disorder treatments and projected spending on 
incentive payments and care management fees, CBO estimates that 
increased use of treatment services and the demonstration's 
incentive payments would increase direct spending by $122 
million over the 2019-2028 period.
    H.R. 5675, a bill to amend title XVIII of the Social 
Security Act to require prescription drug plan sponsors under 
the Medicare program to establish drug management programs for 
at-risk beneficiaries, would require Part D prescription drug 
plans to provide drug management programs for Medicare 
beneficiaries who are at risk for prescription drug abuse. 
(Under current law, Part D plans are permitted but not required 
to establish such programs as of 2019.) Based on an analysis of 
the number of plans currently providing those programs, CBO 
estimates that enacting H.R. 5675 would lower federal spending 
by $64 million over the 2019-2028 period by reducing the number 
of prescriptions filled and Medicare's payments for controlled 
substances.
    H.R. 5684, the Protecting Seniors From Opiod Abuse Act, 
would expand medication therapy management programs under 
Medicare Part D to include beneficiaries who are at risk for 
prescription drug abuse. Because relatively few beneficiaries 
would be affected by this bill, CBO estimates that its 
enactment would not significantly affect direct spending for 
Part D.
    H.R. 5796, the Responsible Education Achieves Care and 
Healthy Outcomes for Users' Treatment Act of 2018, would allow 
the Secretary of HHS to award grants to certain organizations 
that provide technical assistance and education to high-volume 
prescribers of opioids. The bill would appropriate $100 million 
for fiscal year 2019. Based on historical spending patterns for 
similar activities, CBO estimates that implementing H.R. 5796 
would cost $100 million over the 2019-2028 period.
    H.R. 5798, the Opioid Screening and Chronic Pain Management 
Alternatives for Seniors Act, would add an assessment of 
current opioid prescriptions and screening for opioid use 
disorder to the Welcome to Medicare Initial Preventive Physical 
Examination. Based on historical use of the examinations and 
pain management alternatives, CBO expects that enacting the 
bill would increase use of pain management services and 
estimates that direct spending would increase by $5 million 
over the 2019-2028 period.
    H.R. 5804, the Post-Surgical Injections as an Opioid 
Alternative Act, would freeze the Medicare payment rate for 
certain analgesic injections provided in ambulatory surgical 
centers (ASCs). (For injections identified by specific billing 
codes, Medicare would pay the 2016 rate, which is higher than 
the current rate, during the 2020-2024 period.) Based on 
current utilization in the ASC setting, CBO estimates that 
enacting the legislation would increase direct spending by 
about $115 million over the 2019-2028 period. (If enacted, H.R. 
5804 also would affect spending subject to appropriation; see 
Table 3.)
    H.R. 5809, the Postoperative Opioid Prevention Act of 2018, 
would create an additional payment under Medicare for nonopioid 
analgesics. Under current law, certain new drugs and devices 
may receive an additional payment--separate from the bundled 
payment for a surgical procedure--in outpatient hospital 
departments and ambulatory surgical centers. The bill would 
allow nonopioid analgesics to qualify for a five-year period of 
additional payments. Based on its assessment of current 
spending for analgesics and on the probability of new nonopioid 
analgesics coming to market, CBO estimates that H.R. 5809 would 
increase direct spending by about $180 million over the 2019-
2028 period.
    Legislation Primarily Affecting the Food and Drug 
Administration. One bill related to the FDA would affect direct 
spending.
    H.R. 5333, the Over-the-Counter Monograph Safety, 
Innovation, and Reform Act of 2018, would change the way that 
the FDA regulates the marketing of over-the-counter (OTC) 
medicines, and it would authorize that agency to grant 18 
months of exclusive market protection for certain qualifying 
OTC drugs, thus delaying the entry of other versions of the 
same qualifying OTC product. Medicaid currently provides some 
coverage for OTC medicines, but only if a medicine is the least 
costly alternative in its drug class. On the basis of 
stakeholder feedback, CBO expects that delaying the 
availability of additional OTC versions of a drug would not 
significantly affect the average net price paid by Medicaid. As 
a result, CBO estimates that enacting H.R. 5333 would have a 
negligible effect on the federal budget. (If enacted, H.R. 5333 
also would affect spending subject to appropriation; see Table 
3.)
    Legislation with Revenue Effects. Two bills would affect 
revenues. However, CBO estimates that one bill, H.R. 5228, the 
Stop Counterfeit Drugs by Regulating and Enhancing Enforcement 
Now Act, would have only a negligible effect.
    H.R. 5752, the Stop Illicit Drug Importation Act of 2018, 
would amend the Federal, Food, Drug, and Cosmetic Act (FDCA) to 
strengthen the FDA's seizure powers and enhance its authority 
to detain, refuse, seize, or destroy illegal products offered 
for import. The legislation would subject more people to 
debarment under the FDCA and thus increase the potential for 
violations, and subsequently, the assessment of civil 
penalties, which are recorded in the budget as revenues. CBO 
estimates that those collections would result in an 
insignificant increase in revenues. Because H.R. 5752 would 
prohibit the importation of drugs that are in the process of 
being scheduled, it also could reduce amounts collected in 
customs duties. CBO anticipates that the result would be a 
negligible decrease in revenues. With those results taken 
together, CBO estimates, enacting H.R. 5752 would generate an 
insignificant net increase in revenues over the 2019-2028 
period.

Spending subject to appropriation

    For this document, CBO has grouped bills with spending that 
would be subject to appropriation into four general categories:
           Bills that would have no budgetary effect,
           Bills with provisions that would authorize 
        specified amounts to be appropriated (see Table 2),
           Bills with provisions for which CBO has 
        estimated an authorization of appropriations (see Table 
        3), and
           Bills with provisions that would affect 
        spending subject to appropriation for which CBO has not 
        yet completed an estimate.
    No Budgetary Effect. CBO estimates that 6 of the 59 bills 
would have no effect on direct spending, revenues, or spending 
subject to appropriation.
    H.R. 3192, the CHIP Mental Health Parity Act, would require 
all Children's Health Insurance Program (CHIP) plans to cover 
mental health and substance abuse treatment. In addition, 
states would not be allowed to impose financial or utilization 
limits on mental health treatment that are lower than limits 
placed on physical health treatment. Based on information from 
the Centers for Medicare and Medicaid Services, CBO estimates 
that enacting the bill would have no budgetary effect because 
all CHIP enrollees are already in plans that meet those 
requirements.
    H.R. 3331, a bill to amend title XI of the Social Security 
Act to promote testing of incentive payments for behavioral 
health providers for adoption and use of certified electronic 
health record technology, would give the Center for Medicare 
and Medicaid Innovation (CMMI) explicit authorization to test a 
program offering incentive payments to behavioral health 
providers that adopt and use certified electronic health record 
technology. Because it is already clear to CMMI that it has 
that authority, CBO estimates that enacting the legislation 
would not affect federal spending.
    H.R. 5202, the Ensuring Patient Access to Substance Use 
Disorder Treatments Act of 2018, would clarify permission for 
pharmacists to deliver controlled substances to providers under 
certain circumstances. Because this provision would codify 
current practice, CBO estimates that H.R. 5202 would not affect 
direct spending or revenues during the 2019-2028 period.
    H.R. 5685, the Medicare Opioid Safety Education Act of 
2018, would require the Secretary of HHS to include information 
on opioid use, pain management, and nonopioid pain management 
treatments in future editions of Medicare & You, the program's 
handbook for beneficiaries, starting on January 1, 2019. 
Because H.R. 5685 would add information to an existing 
administrative document, CBO estimates that enacting the bill 
would have no budgetary effect.
    H.R. 5686, the Medicare Clear Health Options in Care for 
Enrollees Act of 2018, would require prescription drug plans 
that provide coverage under Medicare Part D to furnish 
information to beneficiaries about the risks of opioid use and 
the availability of alternative treatments for pain. CBO 
estimates that enacting the bill would not affect direct 
spending because the required activities would not impose 
significant administrative costs.
    H.R. 5716, the Commit to Opioid Medical Prescriber 
Accountability and Safety for Seniors Act, would require the 
Secretary of HHS on an annual basis to identify high 
prescribers of opioids and furnish them with information about 
proper prescribing methods. Because HHS already has the 
capacity to meet those requirements, CBO estimates that 
enacting that provision would not impose additional 
administrative costs on the agency.
    Specified Authorizations. Table 2 lists the ten bills that 
would authorize specified amounts to be appropriated over the 
2019-2023 period. Spending from those authorized amounts would 
be subject to appropriation.

          TABLE 2.--ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR BILLS WITH SPECIFIED AUTHORIZATIONS
----------------------------------------------------------------------------------------------------------------
                                                                By fiscal year, in millions of dollars--
                                                      ----------------------------------------------------------
                                                        2018    2019    2020    2021    2022    2023   2019-2023
----------------------------------------------------------------------------------------------------------------
                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
H.R. 4684, Ensuring Access to Quality Sober Living
 Act:
    Authorization Level..............................       0       3       0       0       0       0         3
    Estimated Outlays................................       0       1       2       *       *       *         3
H.R. 5102, Substance Use Disorder Workforce Loan
 Repayment Act of 2018:
    Authorization Level..............................       0      25      25      25      25      25       125
    Estimated Outlays................................       0       9      19      23      25      25       100
H.R. 5176, Preventing Overdoses While in Emergency
 Rooms Act of 2018:
    Authorization Level..............................       0      50       0       0       0       0        50
    Estimated Outlays................................       0      16      26       6       2       1        50
H.R. 5197, Alternatives to Opioids (ALTO) in the
 Emergency Department Act:
    Authorization Level..............................       0      10      10      10       0       0        30
    Estimated Outlays................................       0       3       8      10       7       2        30
H.R. 5261, Treatment, Education, and Community Help
 to Combat Addiction Act of 2018:
    Authorization Level..............................       0       4       4       4       4       4        20
    Estimated Outlays................................       0       1       3       4       4       4        16
H.R. 5327, Comprehensive Opioid Recovery Centers Act
 of 2018:
    Authorization Level..............................       0      10      10      10      10      10        50
    Estimated Outlays................................       0       3       8      10      10      10        41
H.R. 5329, Poison Center Network Enhancement Act of
 2018:
    Authorization Level..............................       0      30      30      30      30      30       151
    Estimated Outlays................................       0      12      25      29      29      29       125
H.R. 5353, Eliminating Opioid-Related Infectious
 Diseases Act of 2018:
    Authorization Level..............................       0      40      40      40      40      40       200
    Estimated Outlays................................       0      15      34      38      39      40       166
H.R. 5580, Surveillance and Testing of Opioids to
 Prevent Fentanyl Deaths Act of 2018:
    Authorization Level..............................      30      30      30      30      30       0       120
    Estimated Outlays................................       0      11      25      29      29      19       113
H.R. 5587, Peer Support Communities of Recovery Act:
    Authorization Level..............................       0      15      15      15      15      15        75
    Estimated Outlays................................       0       5      13      14      15      15       62
----------------------------------------------------------------------------------------------------------------
Annual amounts may not sum to totals because of rounding. * = between zero and $500,000.

    H.R. 4684, the Ensuring Access to Quality Sober Living Act, 
would direct the Secretary of HHS to develop and disseminate 
best practices for organizations that operate housing designed 
for people recovering from substance use disorders. The bill 
would authorize a total of $3 million over the 2019-2021 period 
for that purpose. Based on historical spending patterns for 
similar activities, CBO estimates that implementing H.R. 4684 
would cost $3 million over the 2019-2023 period.
    H.R. 5102, the Substance Use Disorder Workforce Loan 
Repayment Act of 2018, would establish a loan repayment program 
for mental health professionals who practice in areas with few 
mental health providers or with high rates of death from 
overdose and would authorize $25 million per year over the 
2019-2028 period for that purpose. Based on historical spending 
patterns for similar activities, CBO estimates that 
implementing H.R. 5102 would cost $100 million over the 2019-
2023 period; the remaining amounts would be spent in years 
after 2023.
    H.R. 5176, the Preventing Overdoses While in Emergency 
Rooms Act of 2018, would require the Secretary of HHS to 
develop protocols and a grant program for health care providers 
to address the needs of people who survive a drug overdose, and 
it would authorize $50 million in 2019 for that purpose. Based 
on historical spending patterns for similar activities, CBO 
estimates that implementing H.R. 5176 would cost $50 million 
over the 2019-2023 period.
    H.R. 5197, the Alternatives to Opioids (ALTO) in the 
Emergency Department Act, would direct the Secretary of HHS to 
carry out a demonstration program for hospitals and emergency 
departments to develop alternative protocols for pain 
management that limit the use of opioids and would authorize 
$10 million annually in grants for fiscal years 2019 through 
2021. Based on historical spending patterns for similar 
programs, CBO estimates that implementing H.R. 5197 would cost 
$30 million over the 2019-2023 period.
    H.R. 5261, the Treatment, Education, and Community Help to 
Combat Addiction Act of 2018,  would direct the Secretary of 
HHS to designate regional centers of excellence to improve the 
training of health professionals who treat substance use 
disorders. The bill would authorize $4 million annually for 
grants to those programs over the 2019-2023 period. Based on 
historical spending patterns for similar activities, CBO 
estimates that implementing H.R. 5261 would cost $16 million 
over the 2019-2023 period; the remaining amounts would be spent 
in years after 2023.
    H.R. 5327, the Comprehensive Opioid Recovery Centers Act of 
2018, would direct the Secretary of HHS to award grants to at 
least 10 providers that offer treatment services for people 
with opioid use disorder, and it would authorize $10 million 
per year over the 2019-2023 period for that purpose. Based on 
historical spending patterns for similar activities, CBO 
estimates that implementing H.R. 5327 would cost $41 million 
over the 2019-2023 period; the remaining amounts would be spent 
in years after 2023.
    H.R. 5329, the Poison Center Network Enhancement Act of 
2018, would reauthorize the poison control center toll-free 
number, national media campaign, and grant program under the 
Public Health Service Act. Among other actions, H.R. 5329 would 
increase the share of poison control center funding that could 
be provided by federal grants. The bill would authorize a total 
of about $30 million per year over the 2019-2023 period. Based 
on historical spending patterns for similar activities, CBO 
estimates that implementing H.R. 5329 would cost $125 million 
over the 2019-2023 period; the remaining amounts would be spent 
in years after 2023.
    H.R 5353, the Eliminating Opioid Related Infectious 
Diseases Act of 2018, would amend the Public Health Service Act 
by broadening the focus of surveillance and education programs 
from preventing and treating hepatitis C virus to preventing 
and treating infections associated with injection drug use. It 
would authorize $40 million per year over 2019-2023 period for 
that purpose. Based on historical spending patterns for similar 
activities, CBO estimates that implementing H.R. 5353 would 
cost $166 million over the 2019-2023 period; the remaining 
amounts would be spent in years after 2023.
    H.R. 5580, the Surveillance and Testing of Opioids to 
Prevent Fentanyl Deaths Act of 2018, would establish a grant 
program for public health laboratories that conduct testing for 
fentanyl and other synthetic opioids. It also would direct the 
Centers for Disease Control and Prevention to expand its drug 
surveillance program, with a particular focus on collecting 
data on fentanyl. The bill would authorize a total of $30 
million per year over the 2018-2022 period for those 
activities. Based on historical spending patterns for similar 
activities, CBO estimates that implementing H.R. 5580 would 
cost $113 million over the 2019-2023 period; the remaining 
amounts would be spent in years after 2023.
    H.R. 5587, Peer Support Communities of Recovery Act, would 
direct the Secretary of HHS to award grants to nonprofit 
organizations that support community-based, peer-delivered 
support, including technical support for the establishment of 
recovery community organizations, independent, nonprofit groups 
led by people in recovery and their families. The bill would 
authorize $15 million per year for the 2019-2023 period. Based 
on historical spending patterns for similar activities, CBO 
estimates that implementing H.R. 5587 would cost $62 million 
over the 2019-2023 period; the remaining amounts would be spent 
in years after 2023.
    Estimated Authorizations. Table 3 shows CBO's estimates of 
the appropriations that would be necessary to implement 19 of 
the bills. Spending would be subject to appropriation of those 
amounts.
    H.R. 449, the Synthetic Drug Awareness Act of 2018, would 
require the Surgeon General to report to the Congress on the 
health effects of synthetic psychoactive drugs on children 
between the ages of 12 and 18. Based on spending patterns for 
similar activities, CBO estimates that implementing H.R. 449 
would cost approximately $1 million over the 2019-2023 period.
    H.R. 4005, the Medicaid Reentry Act, would direct the 
Secretary of HHS to convene a group of stakeholders to develop 
and report to the Congress on best practices for addressing 
issues related to health care faced by those returning from 
incarceration to their communities. The bill also would require 
the Secretary to issue a letter to state Medicaid directors 
about relevant demonstration projects. Based on an analysis of 
anticipated workload, CBO estimates that implementing H.R. 4005 
would cost less than $500,000 over the 2018-2023 period.
    H.R. 4275, the Empowering Pharmacists in the Fight Against 
Opioid Abuse Act, would require the Secretary of HHS to develop 
and disseminate materials for training pharmacists, health care 
practitioners, and the public about the circumstances under 
which a pharmacist may decline to fill a prescription. Based on 
historical spending patterns for similar activities, CBO 
estimates that costs to the federal government for the 
development and distribution of those materials would not be 
significant.

          TABLE 3.--ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR BILLS WITH ESTIMATED AUTHORIZATIONS
----------------------------------------------------------------------------------------------------------------
                                                              By fiscal year, in millions of dollars--
                                                   -------------------------------------------------------------
                                                     2018   2019     2020     2021     2022     2023   2019-2023
----------------------------------------------------------------------------------------------------------------
                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
H.R. 449, Synthetic Drug Awareness Act of 2018:
    Estimated Authorization Level.................      0       *        *        *        0        0         1
    Estimated Outlays.............................      0       *        *        *        0        0         1
 
H.R. 4005, Medicaid Reentry Act:
    Estimated Authorization Level.................      *       *        0        0        0        0         *
    Estimated Outlays.............................      *       *        0        0        0        0         *
 
H.R. 4275, Empowering Pharmacists in the Fight
 Against Opioid Abuse Act:
    Estimated Authorization Level.................      0       *        *        *        *        *         *
    Estimated Outlays.............................      0       *        *        *        *        *         *
 
H.R. 5009, Jessie's Law:
    Estimated Authorization Level.................      0       *        *        *        *        *         *
    Estimated Outlays.............................      0       *        *        *        *        *         *
 
H.R. 5041, Safe Disposal of Unused Medication Act:      0       *        *        *        *        *         *
    Estimated Authorization Level.................      0       *        *        *        *        *         *
    Estimated Outlays.............................      0       *        *        *        *        *         *
 
H.R. 5272, Reinforcing Evidence-Based Standards
 Under Law in Treating Substance Abuse Act of
 2018:
    Estimated Authorization Level.................      0       1        1        1        1        1         4
    Estimated Outlays.............................      0       1        1        1        1        1         4
 
H.R. 5333, Over-the-Counter Monograph Safety,
 Innovation, and Reform Act of 2018:a
    Food and Drug Administration:
        Collections from fees:
            Estimated Authorization Level.........      0     -22      -22      -26      -35      -42      -147
            Estimated Outlays.....................      0     -22      -22      -26      -35      -42      -147
        Spending of fees:
            Estimated Authorization Level.........      0      22       22       26       35       42       147
            Estimated Outlays.....................      0       6       17       30       44       41       137
        Net effect on FDA:
            Estimated Authorization Level.........      0       0        0        0        0        0         0
            Estimated Outlays.....................      0     -17       -6        4        9        *       -10
    Government Accountability Office:
        Estimated Authorization Level.............      0       0        0        0        0        *         *
        Estimated Outlays.........................      0       0        0        0        0        *         *
    Total, H.R. 5333:
        Estimated Authorization Level.............      0       0        0        0        0        *         *
        Estimated Outlays.........................      0     -17       -6        4        9        *       -10
 
H.R. 5473, Better Pain Management Through Better
 Data Act of 2018:
    Estimated Authorization Level.................      0       *        *        *        *        0         1
    Estimated Outlays.............................      0       *        *        *        *        *         1
 
H.R. 5483, Special Registration for Telemedicine
 Clarification Act of 2018:
    Estimated Authorization Level.................      0       *        *        *        *        *         *
    Estimated Outlays.............................      0       *        *        *        *        *         *
 
H.R. 5554, Animal Drug and Animal Generic Drug
 User Fee Amendments of 2018:
    Collections from fees:
        Animal drug fees..........................      0     -30      -31      -32      -33      -34      -159
        Generic animal drug fees..................      0     -18      -19      -19      -20      -21       -97
            Total, Estimated Authorization Level..      0     -49      -50      -51      -53      -55      -257
            Total, Estimated Outlays..............      0     -40      -50      -51      -53      -55      -257
    Spending of fees:
        Animal drug fees..........................      0      30       31       32       33       34       159
        Generic animal drug fees..................      0      18       19       19       20       21        97
            Total, Estimated Authorization Level..      0      49       50       51       53       55       257
            Total, Estimated Outlays..............      0      39       47       51       52       54       243
    Net changes in fees:
        Estimated Authorization Level.............      0       0        0        0        0        0         0
        Estimated Outlays.........................      0     -10       -3        *        *        *       -14
    Other effects:
        Estimated Authorization Level.............      0       3        1        1        1        1         6
        Estimated Outlays.........................      0       2        1        1        1        1         6
    Total, H.R. 5554:
        Estimated Authorization Level.............      0       3        1        1        1        1         6
        Estimated Outlays.........................      0      -8       -2        1        *        *        -8
 
H.R. 5582, Abuse Deterrent Access Act of 2018:
    Estimated Authorization Level.................      0       0        *        0        0        0         *
    Estimated Outlays.............................      0       0        *        0        0        0         *
 
H.R. 5590, Opioid Addiction Action Plan Act:
    Estimated Authorization Level.................      *       *        *        *        *        *         2
    Estimated Outlays.............................      *       *        *        *        *        *         2
 
H.R. 5687, Securing Opioids and Unused Narcotics
 with Deliberate Disposal and Packaging Act of
 2018:
    Estimated Authorization Level.................      0       *        *        *        *        *         *
    Estimated Outlays.............................      0       *        *        *        *        *         *
 
H.R. 5715, Strengthening Partnerships to Prevent
 Opioid Abuse Act:
    Estimated Authorization Level.................      0       2        2        2        2        2         9
    Estimated Outlays.............................      0       2        2        2        2        2         9
 
H.R. 5789, a bill to require the Secretary of
 Health and Human Services to issue guidance to
 improve care for infants with neonatal abstinence
 syndrome and their mothers, and to require the
 Comptroller General of the United States to
 conduct a study on gaps in Medicaid coverage for
 pregnant and postpartum women with substance use
 disorder:
    Estimated Authorization Level.................      0       2        0        0        0        0         2
    Estimated Outlays.............................      0       2        0        0        0        0         2
 
H.R. 5795, Overdose Prevention and Patient Safety
 Act:
    Estimated Authorization Level.................      0       1        0        0        0        0         1
    Estimated Outlays.............................      0       1        0        0        0        0         1
 
H.R. 5800, Medicaid IMD ADDITIONAL INFO Act:
    Estimated Authorization Level.................      0       1        0        0        0        0         1
    Estimated Outlays.............................      0       *        *        0        0        0         1
 
H.R. 5804, Post-Surgical Injections as an Opioid
 Alternative Act:a
    Estimated Authorization Level.................      0       0        0        0        1        1         1
    Estimated Outlays.............................      0       0        0        0        1        1         1
 
H.R. 5811, a bill to amend the Federal Food, Drug,
 and Cosmetic Act with respect to postapproval
 study requirements for certain controlled
 substances, and for other purposes:
    Estimated Authorization Level.................      0       *        *        *        *        *         *
    Estimated Outlays.............................      0       *        *        *        *        *        *
----------------------------------------------------------------------------------------------------------------
Annual amounts may not sum to totals because of rounding. * = between -$500,000 and $500,000.
aThis bill also would affect mandatory spending (see Table 1).

    H.R. 5009, Jessie's Law, would require HHS, in 
collaboration with outside experts, to develop best practices 
for displaying information about opioid use disorder in a 
patient's medical record. HHS also would be required to develop 
and disseminate written materials annually to health care 
providers about what disclosures could be made while still 
complying with federal laws that govern health care privacy. 
Based on spending patternsfor similar activities, CBO estimates 
that implementing H.R. 5009 would have an insignificant effect on 
spending over the 2019-2023 period.
    H.R. 5041, the Safe Disposal of Unused Medication Act, 
would require hospice programs to have written policies and 
procedures for the disposal of controlled substances after a 
patient's death. Certain licensed employees of hospice programs 
would be permitted to assist in the disposal of controlled 
substances that were lawfully dispensed. Using information from 
the Department of Justice (DOJ), CBO estimates that 
implementing the bill would cost less than $500,000 over the 
2019-2023 period.
    H.R. 5272, the Reinforcing Evidence-Based Standards Under 
Law in Treating Substance Abuse Act of 2018, would require the 
newly established National Mental Health and Substance Use 
Policy Laboratory to issue guidance to applicants for SAMHSA 
grants that support evidence-based practices. Using information 
from HHS about the historical cost of similar activities, CBO 
estimates that enacting this bill would cost approximately $4 
million over the 2019-2023 period.
    H.R. 5333, the Over-the-Counter Monograph Safety, 
Innovation, and Reform Act of 2018, would change the FDA's 
oversight of the commercial marketing of OTC medicines and 
authorize the collection and spending of fees through 2023 to 
cover the costs of expediting the FDA's administrative 
procedures for certain regulatory activities relating to OTC 
products. Under H.R. 5333, CBO estimates, the FDA would assess 
about $147 million in fees over the 2019-2023 period that could 
be collected and made available for obligation only to the 
extent and in the amounts provided in advance in appropriation 
acts. Because the FDA could spend those fees, CBO estimates 
that the estimated budget authority for collections and 
spending would offset each other exactly in each year, although 
CBO expects that spending initially would lag behind 
collections. Assuming appropriation action consistent with the 
bill, CBO estimates that implementing H.R. 5333 would reduce 
net discretionary outlays by $10 million over the 2019-2023 
period, primarily because of that lag. The bill also would 
require the Government Accountability Office to study exclusive 
market protections for certain qualifying OTC drugs authorized 
by the bill--a provision that CBO estimates would cost less 
than $500,000. (If enacted, H.R. 5333 also would affect 
mandatory spending; see Table 1.)
    H.R. 5473, the Better Pain Management Through Better Data 
Act of 2018, would require that the FDA conduct a public 
meeting and issue guidance to industry addressing data 
collection and labeling for medical products that reduce pain 
while enabling the reduction, replacement, or avoidance of oral 
opioids. Using information from the agency, CBO estimates that 
implementing H.R. 5473 would cost about $1 million over the 
2019-2023 period.
    H.R. 5483, the Special Registration for Telemedicine 
Clarification Act of 2018, would direct DOJ, within one year of 
the bill's enactment, to issue regulations concerning the 
practice of telemedicine (for remote diagnosis and treatment of 
patients). Using information from DOJ, CBO estimates that 
implementing the bill would cost less than $500,000 over the 
2019-2023 period.
    H.R. 5554, the Animal Drug and Animal Generic Drug User Fee 
Amendments of 2018, would authorize the FDA to collect and 
spend fees to cover the cost of expedited approval for the 
development and marketing of certain drugs for use in animals. 
The legislation would extend through fiscal year 2023, and make 
several changes to, the FDA's existing approval processes and 
fee programs for brand-name and generic veterinary drugs, which 
expire at the end of fiscal year 2018. CBO estimates that 
implementing H.R. 5554 would reduce net discretionary outlays 
by $8 million over the 2019-2023 period, primarily because the 
spending of fees lags somewhat behind their collection.
    Fees authorized under the bill would supplement funds 
appropriated to cover the FDA's cost of reviewing certain 
applications and investigational submissions for brand-name and 
generic drugs for use in animals. Those fees could be collected 
and made available for obligation only to the extent and in the 
amounts provided in advance in appropriation acts. Under H.R. 
5554, CBO estimates, the FDA would assess about $257 million in 
fees over the 2019-2023 period. Because the FDA could spend 
those funds, CBO estimates that budget authority for 
collections and spending would offset each other exactly in 
each year. CBO estimates that the delay between collecting and 
spending fees under the reauthorized programs would reduce net 
discretionary outlays by $14 million over the 2019-2023 period, 
assuming appropriation actions consistent with the bill.
    Enacting H.R. 5554 would increase the FDA's workload 
because the legislation would expand eligibility for 
conditional approval for certain drugs. The agency's 
administrative costs also would increase because of regulatory 
activities required by a provision concerning petitions for 
additives intended for use in animal food. H.R. 5554 also would 
require the FDA to publish guidance or produce regulations on a 
range of topics, transmit a report to the Congress, and hold 
public meetings. CBO expects that the costs associated with 
those activities would not be covered by fees, and it estimates 
that implementing such provisions would cost $6 million over 
the 2019-2023 period.
    H.R. 5582, the Abuse Deterrent Access Act of 2018, would 
require the Secretary of HHS to report to the Congress on 
existing barriers to access to ``abuse-deterrent opioid 
formulations'' by Medicare Part C and D beneficiaries. Such 
formulations make the drugs more difficult to dissolve for 
injection, for example, and thus can impede their abuse. 
Assuming the availability of appropriated funds and based on 
historical spending patterns for similar activities, CBO 
estimates that implementing the legislation would cost less 
than $500,000 over the 2019-2023 period.
    H.R. 5590, the Opioid Addiction Action Plan Act, would 
require the Secretary of HHS to develop an action plan by 
January 1, 2019, for increasing access to medication-assisted 
treatment among Medicare and Medicaid enrollees. The bill also 
would require HHS to convene a stakeholder meeting and issue a 
request for information within three months of enactment, and 
to submit a report to the Congress by June 1, 2019. Based on 
historical spending patterns for similar activities, CBO 
estimates that implementing H.R. 5590 would cost approximately 
$2 million over the 2019-2023 period.
    H.R. 5687, the Securing Opioids and Unused Narcotics with 
Deliberate Disposal and Packaging Act of 2018, would permit the 
FDA to require certain packaging and disposal technologies, 
controls, or measures to mitigate the risk of abuse and misuse 
of drugs. Based on information from the FDA, CBO estimates that 
implementing H.R. 5687 would not significantly affect spending 
over the 2019-2023 period. This bill would also require that 
the GAO study the effectiveness and use of packaging 
technologies for controlled substances--a provision that CBO 
estimates would cost less than $500,000.
    H.R. 5715, the Strengthening Partnerships to Prevent Opioid 
Abuse Act, would require the Secretary of HHS to establish a 
secure Internet portal to allow HHS, Medicare Advantage plans, 
and Medicare Part D plans to exchange information about fraud, 
waste, and abuse among providers and suppliers no later than 
two years after enactment. H.R. 5715 also would require 
organizations with Medicare Advantage contracts to submit 
information on investigations related to providers suspected of 
prescribing large volumes of opioids through a process 
established by the Secretary no later than January 2021. Based 
on historical spending patterns for similar activities, CBO 
estimates that implementing H.R. 5715 would cost approximately 
$9 million over the 2019-2023 period.
    H.R. 5789, a bill to require the Secretary of Health and 
Human Services to issue guidance to improve care for infants 
with neonatal abstinence syndrome and their mothers, and to 
require the Comptroller General of the United States to conduct 
a study on gaps in Medicaid coverage for pregnant and 
postpartum women with substance use disorder, would direct the 
Secretary of HHS to issue guidance to states on best practices 
under Medicaid and CHIP for treating infants with neonatal 
abstinence syndrome. H.R. 5789 also would direct the Government 
Accountability Office to study Medicaid coverage for pregnant 
and postpartum women with substance use disorders. Based on 
inforation from HHS and historical spending patterns for 
similar activities, CBO estimates that enacting H.R. 5789 would 
cost approximately $2 million over the 2019-2023 period.
    H.R. 5795, the Overdose Prevention and Patient Safety Act, 
would amend the Public Health Service Act so that requirements 
pertaining to the confidentiality and disclosure of medical 
records relating to substance use disorders align with the 
provisions of the Health Insurance Portability and 
Accountability Act of 1996. The bill would require the Office 
of the Secretary of HHS to issue regulations prohibiting 
discrimination based on data disclosed from such medical 
records, to issue regulations requiring covered entities to 
provide written notice of privacy practices, and to develop 
model training programs and materials for health care providers 
and patients and their families. Based on spending patterns for 
similar activities, CBO estimates that implementing H.R. 5795 
would cost approximately $1 million over the 2019-2023 period.
    H.R. 5800, Medicaid IMD ADDITIONAL INFO Act, would direct 
the Medicaid and CHIP Payment and Access Commission to study 
institutions for mental diseases in a representative sample of 
states. Based on information from the commission about the cost 
of similar work, CBO estimates that implementing H.R. 5800 
would cost about $1 million over the 2019-2023 period.
    H.R. 5804, the Post-Surgical Injections as an Opioid 
Alternative Act, would freeze the Medicare payment rate for 
certain analgesic injections provided in ambulatory surgical 
centers. The bill also would mandate two studies of Medicare 
coding and payments arising from enactment of this legislation. 
Based on the cost of similar activities, CBO estimates that 
those reports would cost $1 million over the 2019-2023 period. 
(If enacted, H.R. 5804 also would affect mandatory spending; 
see Table 1.)
    H.R. 5811, a bill to amend the Federal Food, Drug, and 
Cosmetic Act with respect to postapproval study requirements 
for certain controlled substances, and for other purposes, 
would allow the FDA to require that pharmaceutical 
manufacturers study certain drugs after they are approved to 
assess any potential reduction in those drugs' effectiveness 
for the conditions of use prescribed, recommended, or suggested 
in labeling. CBO anticipates that implementing H.R. 5811 would 
not significantly affect the FDA's costs over the 2019-2023 
period.
    Other Authorizations. The following nine bills would 
increase authorization levels, but CBO has not completed 
estimates of amounts. All authorizations would be subject to 
future appropriation action.
           H.R. 4284, Indexing Narcotics, Fentanyl, and 
        Opioids Act of 2017
           H.R. 5002, Advancing Cutting Edge Research 
        Act
           H.R. 5228, Stop Counterfeit Drugs by 
        Regulating and Enhancing Enforcement Now Act (see Table 
        1 for an estimate of the revenue effects of H.R. 5228)
           H.R. 5752, Stop Illicit Drug Importation Act 
        of 2018 (see Table 1 for an estimate of the revenue 
        effects of H.R. 5752)
           H.R. 5799, Medicaid DRUG Improvement Act 
        (see Table 1 for an estimate of the direct spending 
        effects of H.R. 5799)
           H.R. 5801, Medicaid Providers and 
        Pharmacists Are Required to Note Experiences in Record 
        Systems to Help In-Need Patients (PARTNERSHIP) Act (see 
        Table 1 for an estimate of the direct spending effects 
        of H.R. 5801)
           H.R. 5806, 21st Century Tools for Pain and 
        Addiction Treatments Act
           H.R. 5808, Medicaid Pharmaceutical Home Act 
        of 2018 (see Table 1 for an estimate of the direct 
        spending effects of H.R. 5808)
           H.R. 5812, Creating Opportunities that 
        Necessitate New and Enhanced Connections That Improve 
        Opioid Navigation Strategies Act (CONNECTIONS) Act
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. Twenty-two of the bills discussed in this document 
contain direct spending or revenues and are subject to pay-as-
you-go procedures. Details about the amount of direct spending 
and revenues in those bills can be found in Table 1.
    Increase in long-term direct spending and deficits: CBO 
estimates that enacting H.R. 4998, the Health Insurance for 
Former Foster Youth Act, would increase net direct spending by 
more than $2.5 billion and on-budget deficits by more than $5 
billion in at least one of the four consecutive 10-year periods 
beginning in 2029.
    CBO estimates that none of the remaining 58 bills included 
in this estimate would increase net direct spending by more 
than $2.5 billion or on-budget deficits by more than $5 billion 
in any of the four consecutive 10-year periods beginning in 
2029.
    Mandates: One of the 59 bills included in this document, 
H.R. 5795, would impose both intergovernmental and private-
sector mandates as defined in UMRA. CBO estimates that the 
costs of that bill's mandates on public and private entities 
would fall below UMRA's thresholds ($80 million and $160 
million, respectively, for public- and private-sector entities 
in 2018, adjusted annually for inflation).
    In addition, five bills would impose private-sector 
mandates as defined in UMRA. CBO estimates that the costs of 
the mandates in three of those bills (H.R. 5333, H.R. 5554, and 
H.R. 5811) would fall below the UMRA threshold. Because CBO 
does not know how federal agencies would implement new 
authority granted in the other two of those five bills, H.R. 
5228 and 5687, CBO cannot determine whether the costs of their 
mandates would exceed the threshold.
    For large entitlement grant programs, including Medicaid 
and CHIP, UMRA defines an increase in the stringency of 
conditions on states or localities as an intergovernmental 
mandate if the affected governments lack authority to offset 
those costs while continuing to provide required services. 
Because states possess significant flexibility to alter their 
responsibilities within Medicaid and CHIP, the requirements 
imposed by various bills in the markup on state administration 
of those programs would not constitute mandates as defined in 
UMRA.

Mandates Affecting Public and Private Entities

    H.R. 5795, the Overdose Prevention and Patient Safety Act, 
would impose intergovernmental and private-sector mandates by 
requiring entities that provide treatment for substance use 
disorders to notify patients of their privacy rights and also 
to notify patients in the event that the confidentiality of 
their records is breached. In certain circumstances, H.R. 5795 
also would prohibit public and private entities from denying 
entry to treatment on the basis of information in patient 
health records. Those requirements would either supplant or 
narrowly expand responsibilities under existing law, and 
compliance with them would not impose significant additional 
costs. CBO estimates that the costs of the mandates would fall 
below the annual thresholds established in UMRA.

Mandates Affecting Private Entities

    Five bills included in this document would impose private-
sector mandates:
    H.R. 5228, the Stop Counterfeit Drugs by Regulating and 
Enhancing Enforcement Now Act, would require drug distributors 
to cease distributing any drug that the Secretary of HHS 
determines might present an imminent or substantial hazard to 
public health. CBO cannot determine what drugs could be subject 
to such an order nor can it determine how private entities 
would respond. Consequently, CBO cannot determine whether the 
aggregate cost of the mandate would exceed the annual threshold 
for private-sector mandates.
    H.R. 5333, the Over-the-Counter Monograph Safety, 
Innovation, and Reform Act of 2018, would require developers 
and manufacturers of OTC drugs to pay certain fees to the FDA. 
CBO estimates that about $30 million would be collected each 
year, on average, for a total of $147 million over the 2019-
2023 period. Those amounts would not exceed the annual 
threshold for private-sector mandates in any year during that 
period.
    H.R. 5554, the Animal Drug and Animal Generic Drug User Fee 
Amendments of 2018, would require developers and manufacturers 
of brand-name and generic veterinary drugs to pay application, 
product, establishment, and sponsor fees to the FDA. CBO 
estimates that about $51 million would be collected annually, 
on average, for a total of $257 million over the 2019-2023 
period. Those amounts would not exceed the annual threshold for 
private-sector mandates in any year during that period.
    H.R. 5687, the Securing Opioids and Unused Narcotics with 
Deliberate Disposal and Packaging Act of 2018, would permit the 
Secretary of HHS to require drug developers and manufacturers 
to implement new packaging and disposal technology for certain 
drugs. Based on information from the agency, CBO expects that 
the Secretary would use the new regulatory authority provided 
in the bill; however, it is uncertain how or when those 
requirements would be implemented. Consequently, CBO cannot 
determine whether the aggregate cost of the mandate would 
exceed the annual threshold for private entities.
    H.R. 5811, a bill to amend the Federal Food, Drug, and 
Cosmetic Act with respect to postapproval study requirements 
for certain controlled substances, and for other purposes, 
would expand an existing mandate that requires drug developers 
to conduct postapproval studies or clinical trials for certain 
drugs. Under current law, in certain instances, the FDA can 
require studies or clinical trials after a drug has been 
approved. H.R. 5811 would permit the FDA to use that authority 
if the reduction in a drug's effectiveness meant that its 
benefits no longer outweighed its costs. CBO estimates that the 
incremental cost of the mandate would fall below the annual 
threshold established in UMRA because of the small number of 
drugs affected and the narrow expansion of the authority that 
exists under current law.
    None of the remaining 53 bills included in this document 
would impose an intergovernmental or private-sector mandate.
    Previous CBO estimate: On June 6, 2018, CBO issued an 
estimate for seven opioid-related bills ordered reported by the 
House Committee on Ways and Means on May 16, 2018. Two of those 
bills contain provisions that are identical or similar to the 
legislation ordered reported by the Committee on Energy and 
Commerce, and for those provisions, CBO's estimates are the 
same.
    In particular, five bills listed in this estimate contain 
provisions that are identical or similar to those in several 
sections of H.R. 5773, the Preventing Addiction for Susceptible 
Seniors Act of 2018:
       H.R. 5675, which would require prescription drug 
plans to implement drug management programs, is identical to 
section 2 of H.R. 5773.
       H.R. 4841, regarding electronic prior 
authorization for prescriptions under Medicare's Part D, is 
similar to section 3 of H.R. 5773.
       H.R. 5715, which would mandate the creation of a 
new Internet portal to allow various stakeholders to exchange 
information, is identical to section 4 of H.R. 5773.
       H.R. 5684, which would expand medication therapy 
management, is the same as section 5 of H.R. 5773.
       H.R. 5716, regarding prescriber notification, is 
identical to section 6 of H.R. 5773.
    In addition, in this estimate, a provision related to 
Medicare beneficiary education in H.R. 5686, the Medicare Clear 
Health Options in Care for Enrollees Act of 2018, is the same 
as a provision in section 2 of H.R. 5775, the Providing 
Reliable Options for Patients and Educational Resources Act of 
2018, in CBO's estimate for the Committee on Ways and Means.
    Estimate prepared by: Federal Costs: Rebecca Yip (Centers 
for Disease Control and Prevention), Mark Grabowicz (Drug 
Enforcement Agency), Julia Christensen, Ellen Werble (Food and 
Drug Administration), Emily King, Andrea Noda, Lisa Ramirez-
Branum, Robert Stewart (Medicaid and Children's Health 
Insurance Program), Philippa Haven, Lara Robillard, Colin Yee, 
Rebecca Yip (Medicare), Philippa Haven (National Institutes of 
Health), Alice Burns, Andrea Noda (Office of the Secretary of 
the Department of Health and Human Services), Philippa Haven, 
Lori Housman, Emily King (Substance Abuse and Mental Health 
Services Administration, Health Resources and Services 
Administration); Federal Revenues: Jacob Fabian, Peter Huether, 
and Cecilia Pastrone; Fact Checking: Zachary Byrum and Kate 
Kelly; Mandates: Andrew Laughlin.
    Estimate reviewed by: Tom Bradley, Chief Health Systems and 
Medicare Cost Estimates Unit; Chad M. Chirico, Chief Low-Income 
Health Programs and Prescription Drugs Cost Estimates Unit; 
Sarah Masi, Special Assistant for Health; Susan Willie, Chief, 
Mandates Unit; Leo Lex, Deputy Assistant Director for Budget 
Analysis; Theresa A. Gullo, Assistant Director for Budget 
Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

         Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is to build 
on current state Medicaid drug utilization review activities to 
help combat the opioid crisis.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 5799 is known to be duplicative of another Federal 
program, including any program that was included in a report to 
Congress pursuant to section 21 of Public Law 111-139 or the 
most recent Catalog of Federal Domestic Assistance.

                        Committee Cost Estimate

    Pursuant to clause 3(d)(1) of rule XIII, the Committee 
adopts as its own the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974.

       Earmark, Limited Tax Benefits, and Limited Tariff Benefits

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H.R. 5799 contains no earmarks, limited 
tax benefits, or limited tariff benefits.

                  Disclosure of Directed Rule Makings

    Pursuant to section 3(i) of H. Res. 5, the Committee finds 
that H.R. 5799 contains no directed rule makings.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    Section 1 provides that the Act may be cited as the 
``Medicaid Drug Review, Utilization, Good Governance 
Improvement Act'' or the ``Medicaid DRUG Improvement Act.''

Section 2. Medicaid state plan option to provide services for certain 
        individuals with opioid use disorders in institutions for 
        mental diseases

    Section 2 amends section 1902 of the Social Security Act by 
requiring states to amend their state Medicaid plans to comply 
with new Medicaid drug review and utilization requirements.
    Section 2 requires state Medicaid programs and Medicaid 
managed care plans to have in place safety edits (as specified 
by the State) on:
           Subsequent fills for opioids;\22\ and
---------------------------------------------------------------------------
    \22\Currently, 37 states (74%) have edits in place to limit the 
quantity of short-acting opioids and 39 states (78%) have edits in 
place to limit the quantity of long-acting opioids.
---------------------------------------------------------------------------
           Safety edit on the daily milligrams of the 
        maximum daily morphine equivalent prescribed to an 
        enrollee for treatment of chronic pain.
    These requirements would have to be in place by October 1, 
2019.
    Section 2 also requires automated processes for claims 
review for the concurrent prescription for opioids and 
benzodiazepines and/or antipsychotics. State Medicaid programs 
are required to have as in place a program (as designed and 
implemented by the State) to monitor and manage the appropriate 
use of antipsychotic medications by children in Medicaid as 
well as have a program in place that identifies potential fraud 
and abuse of controlled substances by individuals enrolled 
under the State plan.
    Section 2 has important exceptions from the requirement, 
including individuals in hospice, palliative care, or residents 
of long term care facilities and exceptions for natural 
disasters and emergencies.
    Finally, section 2 codifies a current regulatory 
requirement that Medicaid managed care plans have in place a 
drug utilization review program mirroring the requirements on 
Medicaid programs.

Section 3. Identifying and addressing inappropriate prescribing and 
        billing practices under Medicaid

    Section 3 requires states have in place drug utilization 
activities to identify and report inappropriate prescribing and 
billing practices under Medicaid as a requirement in the state 
plan.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

SOCIAL SECURITY ACT

           *       *       *       *       *       *       *



TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS

           *       *       *       *       *       *       *



                   STATE PLANS FOR MEDICAL ASSISTANCE

  Sec. 1902. (a) A State plan for medical assistance must--
          (1) provide that it shall be in effect in all 
        political subdivisions of the State, and, if 
        administered by them, be mandatory upon them;
          (2) provide for financial participation by the State 
        equal to not less than 40 per centum of the non-Federal 
        share of the expenditures under the plan with respect 
        to which payments under section 1903 are authorized by 
        this title; and, effective July 1, 1969, provide for 
        financial participation by the State equal to all of 
        such non-Federal share or provide for distribution of 
        funds from Federal or State sources, for carrying out 
        the State plan, on an equalization or other basis which 
        will assure that the lack of adequate funds from local 
        sources will not result in lowering the amount, 
        duration, scope, or quality of care and services 
        available under the plan;
          (3) provide for granting an opportunity for a fair 
        hearing before the State agency to any individual whose 
        claim for medical assistance under the plan is denied 
        or is not acted upon with reasonable promptness;
          (4) provide (A) such methods of administration 
        (including methods relating to the establishment and 
        maintenance of personnel standards on a merit basis, 
        except that the Secretary shall exercise no authority 
        with respect to the selection, tenure of office, and 
        compensation of any individual employed in accordance 
        with such methods, and including provision for 
        utilization of professional medical personnel in the 
        administration and, where administered locally, 
        supervision of administration of the plan) as are found 
        by the Secretary to be necessary for the proper and 
        efficient operation of the plan, (B) for the training 
        and effective use of paid subprofessional staff, with 
        particular emphasis on the full-time or part-time 
        employment of recipients and other persons of low 
        income, as community service aides, in the 
        administration of the plan and for the use of nonpaid 
        or partially paid volunteers in a social service 
        volunteer program in providing services to applicants 
        and recipients and in assisting any advisory committees 
        established by the State agency, (C) that each State or 
        local officer, employee, or independent contractor who 
        is responsible for the expenditure of substantial 
        amounts of funds under the State plan, each individual 
        who formerly was such an officer, employee, or 
        contractor, and each partner of such an officer, 
        employee, or contractor shall be prohibited from 
        committing any act, in relation to any activity under 
        the plan, the commission of which, in connection with 
        any activity concerning the United States Government, 
        by an officer or employee of the United States 
        Government, an individual who was such an officer or 
        employee, or a partner of such an officer or employee 
        is prohibited by section 207 or 208 of title 18, United 
        States Code, and (D) that each State or local officer, 
        employee, or independent contractor who is responsible 
        for selecting, awarding, or otherwise obtaining items 
        and services under the State plan shall be subject to 
        safeguards against conflicts of interest that are at 
        least as stringent as the safeguards that apply under 
        section 27 of the Office of Federal Procurement Policy 
        Act (41 U.S.C. 423) to persons described in subsection 
        (a)(2) of such section of that Act;
          (5) either provide for the establishment or 
        designation of a single State agency to administer or 
        to supervise the administration of the plan; or provide 
        for the establishment or designation of a single State 
        agency to administer or to supervise the administration 
        of the plan, except that the determination of 
        eligibility for medical assistance under the plan shall 
        be made by the State or local agency administering the 
        State plan approved under title I or XVI (insofar as it 
        relates to the aged) if the State is eligible to 
        participate in the State plan program established under 
        title XVI, or by the agency or agencies administering 
        the supplemental security income program established 
        under title XVI or the State plan approved under part A 
        of title IV if the State is not eligible to participate 
        in the State plan program established under title XVI;
          (6) provide that the State agency will make such 
        reports, in such form and containing such information, 
        as the Secretary may from time to time require, and 
        comply with such provisions as the Secretary may from 
        time to time find necessary to assure the correctness 
        and verification of such reports;
          (7) provide--
                  (A) safeguards which restrict the use or 
                disclosure of information concerning applicants 
                and recipients to purposes directly connected 
                with--
                          (i) the administration of the plan; 
                        and
                          (ii) the exchange of information 
                        necessary to certify or verify the 
                        certification of eligibility of 
                        children for free or reduced price 
                        breakfasts under the Child Nutrition 
                        Act of 1966 and free or reduced price 
                        lunches under the Richard B. Russell 
                        National School Lunch Act, in 
                        accordance with section 9(b) of that 
                        Act, using data standards and formats 
                        established by the State agency; and
                  (B) that, notwithstanding the Express Lane 
                option under subsection (e)(13), the State may 
                enter into an agreement with the State agency 
                administering the school lunch program 
                established under the Richard B. Russell 
                National School Lunch Act under which the State 
                shall establish procedures to ensure that--
                          (i) a child receiving medical 
                        assistance under the State plan under 
                        this title whose family income does not 
                        exceed 133 percent of the poverty line 
                        (as defined in section 673(2) of the 
                        Community Services Block Grant Act, 
                        including any revision required by such 
                        section), as determined without regard 
                        to any expense, block, or other income 
                        disregard, applicable to a family of 
                        the size involved, may be certified as 
                        eligible for free lunches under the 
                        Richard B. Russell National School 
                        Lunch Act and free breakfasts under the 
                        Child Nutrition Act of 1966 without 
                        further application; and
                          (ii) the State agencies responsible 
                        for administering the State plan under 
                        this title, and for carrying out the 
                        school lunch program established under 
                        the Richard B. Russell National School 
                        Lunch Act (42 U.S.C. 1751 et seq.) or 
                        the school breakfast program 
                        established by section 4 of the Child 
                        Nutrition Act of 1966 (42 U.S.C. 1773), 
                        cooperate in carrying out paragraphs 
                        (3)(F) and (15) of section 9(b) of that 
                        Act;
          (8) provide that all individuals wishing to make 
        application for medical assistance under the plan shall 
        have opportunity to do so, and that such assistance 
        shall be furnished with reasonable promptness to all 
        eligible individuals;
          (9) provide--
                  (A) that the State health agency, or other 
                appropriate State medical agency (whichever is 
                utilized by the Secretary for the purpose 
                specified in the first sentence of section 
                1864(a)), shall be responsible for establishing 
                and maintaining health standards for private or 
                public institutions in which recipients of 
                medical assistance under the plan may receive 
                care or services,
                  (B) for the establishment or designation of a 
                State authority or authorities which shall be 
                responsible for establishing and maintaining 
                standards, other than those relating to health, 
                for such institutions,
                  (C) that any laboratory services paid for 
                under such plan must be provided by a 
                laboratory which meets the applicable 
                requirements of section 1861(e)(9) or 
                paragraphs (16) and (17) of section 1861(s), 
                or, in the case of a laboratory which is in a 
                rural health clinic, of section 1861(aa)(2)(G), 
                and
                  (D) that the State maintain a consumer-
                oriented website providing useful information 
                to consumers regarding all skilled nursing 
                facilities and all nursing facilities in the 
                State, including for each facility, Form 2567 
                State inspection reports (or a successor form), 
                complaint investigation reports, the facility's 
                plan of correction, and such other information 
                that the State or the Secretary considers 
                useful in assisting the public to assess the 
                quality of long term care options and the 
                quality of care provided by individual 
                facilities;
          (10) provide--
                  (A) for making medical assistance available, 
                including at least the care and services listed 
                in paragraphs (1) through (5), (17), (21), and 
                (28) of section 1905(a), to--
                          (i) all individuals--
                                  (I) who are receiving aid or 
                                assistance under any plan of 
                                the State approved under title 
                                I, X, XIV, or XVI, or part A or 
                                part E of title IV (including 
                                individuals eligible under this 
                                title by reason of section 
                                402(a)(37), 406(h), or 473(b), 
                                or considered by the State to 
                                be receiving such aid as 
                                authorized under section 
                                482(e)(6)),
                                  (II)(aa) with respect to whom 
                                supplemental security income 
                                benefits are being paid under 
                                title XVI (or were being paid 
                                as of the date of the enactment 
                                of section 211(a) of the 
                                Personal Responsibility and 
                                Work Opportunity Reconciliation 
                                Act of 1996 (P.L. 104-193) and 
                                would continue to be paid but 
                                for the enactment of that 
                                section), (bb) who are 
                                qualified severely impaired 
                                individuals (as defined in 
                                section 1905(q)), or (cc) who 
                                are under 21 years of age and 
                                with respect to whom 
                                supplemental security income 
                                benefits would be paid under 
                                title XVI if subparagraphs (A) 
                                and (B) of section 1611(c)(7) 
                                were applied without regard to 
                                the phrase ``the first day of 
                                the month following'',
                                  (III) who are qualified 
                                pregnant women or children as 
                                defined in section 1905(n),
                                  (IV) who are described in 
                                subparagraph (A) or (B) of 
                                subsection (l)(1) and whose 
                                family income does not exceed 
                                the minimum income level the 
                                State is required to establish 
                                under subsection (l)(2)(A) for 
                                such a family;
                                  (V) who are qualified family 
                                members as defined in section 
                                1905(m)(1),
                                  (VI) who are described in 
                                subparagraph (C) of subsection 
                                (l)(1) and whose family income 
                                does not exceed the income 
                                level the State is required to 
                                establish under subsection 
                                (l)(2)(B) for such a family,
                                  (VII) who are described in 
                                subparagraph (D) of subsection 
                                (l)(1) and whose family income 
                                does not exceed the income 
                                level the State is required to 
                                establish under subsection 
                                (l)(2)(C) for such a family;
                                  (VIII) beginning January 1, 
                                2014, who are under 65 years of 
                                age, not pregnant, not entitled 
                                to, or enrolled for, benefits 
                                under part A of title XVIII, or 
                                enrolled for benefits under 
                                part B of title XVIII, and are 
                                not described in a previous 
                                subclause of this clause, and 
                                whose income (as determined 
                                under subsection (e)(14)) does 
                                not exceed 133 percent of the 
                                poverty line (as defined in 
                                section 2110(c)(5)) applicable 
                                to a family of the size 
                                involved, subject to subsection 
                                (k); or
                                  (IX) who--
                                          (aa) are under 26 
                                        years of age;
                                          (bb) are not 
                                        described in or 
                                        enrolled under any of 
                                        subclauses (I) through 
                                        (VII) of this clause or 
                                        are described in any of 
                                        such subclauses but 
                                        have income that 
                                        exceeds the level of 
                                        income applicable under 
                                        the State plan for 
                                        eligibility to enroll 
                                        for medical assistance 
                                        under such subclause;
                                          (cc) were in foster 
                                        care under the 
                                        responsibility of the 
                                        State on the date of 
                                        attaining 18 years of 
                                        age or such higher age 
                                        as the State has 
                                        elected under section 
                                        475(8)(B)(iii); and
                                          (dd) were enrolled in 
                                        the State plan under 
                                        this title or under a 
                                        waiver of the plan 
                                        while in such foster 
                                        care;
                          (ii) at the option of the State, to 
                        any group or groups of individuals 
                        described in section 1905(a) (or, in 
                        the case of individuals described in 
                        section 1905(a)(i), to any reasonable 
                        categories of such individuals) who are 
                        not individuals described in clause (i) 
                        of this subparagraph but--
                                  (I) who meet the income and 
                                resources requirements of the 
                                appropriate State plan 
                                described in clause (i) or the 
                                supplemental security income 
                                program (as the case may be),
                                  (II) who would meet the 
                                income and resources 
                                requirements of the appropriate 
                                State plan described in clause 
                                (i) if their work-related child 
                                care costs were paid from their 
                                earnings rather than by a State 
                                agency as a service 
                                expenditure,
                                  (III) who would be eligible 
                                to receive aid under the 
                                appropriate State plan 
                                described in clause (i) if 
                                coverage under such plan was as 
                                broad as allowed under Federal 
                                law,
                                  (IV) with respect to whom 
                                there is being paid, or who are 
                                eligible, or would be eligible 
                                if they were not in a medical 
                                institution, to have paid with 
                                respect to them, aid or 
                                assistance under the 
                                appropriate State plan 
                                described in clause (i), 
                                supplemental security income 
                                benefits under title XVI, or a 
                                State supplementary payment;
                                  (V) who are in a medical 
                                institution for a period of not 
                                less than 30 consecutive days 
                                (with eligibility by reason of 
                                this subclause beginning on the 
                                first day of such period), who 
                                meet the resource requirements 
                                of the appropriate State plan 
                                described in clause (i) or the 
                                supplemental security income 
                                program, and whose income does 
                                not exceed a separate income 
                                standard established by the 
                                State which is consistent with 
                                the limit established under 
                                section 1903(f)(4)(C),
                                  (VI) who would be eligible 
                                under the State plan under this 
                                title if they were in a medical 
                                institution, with respect to 
                                whom there has been a 
                                determination that but for the 
                                provision of home or community-
                                based services described in 
                                subsection (c), (d), or (e) of 
                                section 1915 they would require 
                                the level of care provided in a 
                                hospital, nursing facility or 
                                intermediate care facility for 
                                the mentally retarded the cost 
                                of which could be reimbursed 
                                under the State plan, and who 
                                will receive home or community-
                                based services pursuant to a 
                                waiver granted by the Secretary 
                                under subsection (c), (d), or 
                                (e) of section 1915,
                                  (VII) who would be eligible 
                                under the State plan under this 
                                title if they were in a medical 
                                institution, who are terminally 
                                ill, and who will receive 
                                hospice care pursuant to a 
                                voluntary election described in 
                                section 1905(o);
                                  (VIII) who is a child 
                                described in section 
                                1905(a)(i)--
                                          (aa) for whom there 
                                        is in effect an 
                                        adoption assistance 
                                        agreement (other than 
                                        an agreement under part 
                                        E of title IV) between 
                                        the State and an 
                                        adoptive parent or 
                                        parents,
                                          (bb) who the State 
                                        agency responsible for 
                                        adoption assistance has 
                                        determined cannot be 
                                        placed with adoptive 
                                        parents without medical 
                                        assistance because such 
                                        child has special needs 
                                        for medical or 
                                        rehabilitative care, 
                                        and
                                          (cc) who was eligible 
                                        for medical assistance 
                                        under the State plan 
                                        prior to the adoption 
                                        assistance agreement 
                                        being entered into, or 
                                        who would have been 
                                        eligible for medical 
                                        assistance at such time 
                                        if the eligibility 
                                        standards and 
                                        methodologies of the 
                                        State's foster care 
                                        program under part E of 
                                        title IV were applied 
                                        rather than the 
                                        eligibility standards 
                                        and methodologies of 
                                        the State's aid to 
                                        families with dependent 
                                        children program under 
                                        part A of title IV;
                                  (IX) who are described in 
                                subsection (l)(1) and are not 
                                described in clause (i)(IV), 
                                clause (i)(VI), or clause 
                                (i)(VII);
                                  (X) who are described in 
                                subsection (m)(1);
                                  (XI) who receive only an 
                                optional State supplementary 
                                payment based on need and paid 
                                on a regular basis, equal to 
                                the difference between the 
                                individual's countable income 
                                and the income standard used to 
                                determine eligibility for such 
                                supplementary payment (with 
                                countable income being the 
                                income remaining after 
                                deductions as established by 
                                the State pursuant to standards 
                                that may be more restrictive 
                                than the standards for 
                                supplementary security income 
                                benefits under title XVI), 
                                which are available to all 
                                individuals in the State (but 
                                which may be based on different 
                                income standards by political 
                                subdivision according to cost 
                                of living differences), and 
                                which are paid by a State that 
                                does not have an agreement with 
                                the Commissioner of Social 
                                Security under section 1616 or 
                                1634;
                                  (XII) who are described in 
                                subsection (z)(1) (relating to 
                                certain TB-infected 
                                individuals);
                                  (XIII) who are in families 
                                whose income is less than 250 
                                percent of the income official 
                                poverty line (as defined by the 
                                Office of Management and 
                                Budget, and revised annually in 
                                accordance with section 673(2) 
                                of the Omnibus Budget 
                                Reconciliation Act of 1981) 
                                applicable to a family of the 
                                size involved, and who but for 
                                earnings in excess of the limit 
                                established under section 
                                1905(q)(2)(B), would be 
                                considered to be receiving 
                                supplemental security income 
                                (subject, notwithstanding 
                                section 1916, to payment of 
                                premiums or other cost-sharing 
                                charges (set on a sliding scale 
                                based on income) that the State 
                                may determine);
                                  (XIV) who are optional 
                                targeted low-income children 
                                described in section 
                                1905(u)(2)(B);
                                  (XV) who, but for earnings in 
                                excess of the limit established 
                                under section 1905(q)(2)(B), 
                                would be considered to be 
                                receiving supplemental security 
                                income, who is at least 16, but 
                                less than 65, years of age, and 
                                whose assets, resources, and 
                                earned or unearned income (or 
                                both) do not exceed such 
                                limitations (if any) as the 
                                State may establish;
                                  (XVI) who are employed 
                                individuals with a medically 
                                improved disability described 
                                in section 1905(v)(1) and whose 
                                assets, resources, and earned 
                                or unearned income (or both) do 
                                not exceed such limitations (if 
                                any) as the State may 
                                establish, but only if the 
                                State provides medical 
                                assistance to individuals 
                                described in subclause (XV);
                                  (XVII) who are independent 
                                foster care adolescents (as 
                                defined in section 1905(w)(1)), 
                                or who are within any 
                                reasonable categories of such 
                                adolescents specified by the 
                                State;
                                  (XVIII) who are described in 
                                subsection (aa) (relating to 
                                certain breast or cervical 
                                cancer patients);
                                  (XIX) who are disabled 
                                children described in 
                                subsection (cc)(1);
                                  (XX) beginning January 1, 
                                2014, who are under 65 years of 
                                age and are not described in or 
                                enrolled under a previous 
                                subclause of this clause, and 
                                whose income (as determined 
                                under subsection (e)(14)) 
                                exceeds 133 percent of the 
                                poverty line (as defined in 
                                section 2110(c)(5)) applicable 
                                to a family of the size 
                                involved but does not exceed 
                                the highest income eligibility 
                                level established under the 
                                State plan or under a waiver of 
                                the plan, subject to subsection 
                                (hh);
                                  (XXI) who are described in 
                                subsection (ii) (relating to 
                                individuals who meet certain 
                                income standards); or
                                  (XXII) who are eligible for 
                                home and community-based 
                                services under needs-based 
                                criteria established under 
                                paragraph (1)(A) of section 
                                1915(i), or who are eligible 
                                for home and community-based 
                                services under paragraph (6) of 
                                such section, and who will 
                                receive home and community-
                                based services pursuant to a 
                                State plan amendment under such 
                                subsection;
                  (B) that the medical assistance made 
                available to any individual described in 
                subparagraph (A)--
                          (i) shall not be less in amount, 
                        duration, or scope than the medical 
                        assistance made available to any other 
                        such individual, and
                          (ii) shall not be less in amount, 
                        duration, or scope than the medical 
                        assistance made available to 
                        individuals not described in 
                        subparagraph (A);
                  (C) that if medical assistance is included 
                for any group of individuals described in 
                section 1905(a) who are not described in 
                subparagraph (A) or (E), then--
                          (i) the plan must include a 
                        description of (I) the criteria for 
                        determining eligibility of individuals 
                        in the group for such medical 
                        assistance, (II) the amount, duration, 
                        and scope of medical assistance made 
                        available to individuals in the group, 
                        and (III) the single standard to be 
                        employed in determining income and 
                        resource eligibility for all such 
                        groups, and the methodology to be 
                        employed in determining such 
                        eligibility, which shall be no more 
                        restrictive than the methodology which 
                        would be employed under the 
                        supplemental security income program in 
                        the case of groups consisting of aged, 
                        blind, or disabled individuals in a 
                        State in which such program is in 
                        effect, and which shall be no more 
                        restrictive than the methodology which 
                        would be employed under the appropriate 
                        State plan (described in subparagraph 
                        (A)(i)) to which such group is most 
                        closely categorically related in the 
                        case of other groups;
                          (ii) the plan must make available 
                        medical assistance--
                                  (I) to individuals under the 
                                age of 18 who (but for income 
                                and resources) would be 
                                eligible for medical assistance 
                                as an individual described in 
                                subparagraph (A)(i), and
                                  (II) to pregnant women, 
                                during the course of their 
                                pregnancy, who (but for income 
                                and resources) would be 
                                eligible for medical assistance 
                                as an individual described in 
                                subparagraph (A);
                          (iii) such medical assistance must 
                        include (I) with respect to children 
                        under 18 and individuals entitled to 
                        institutional services, ambulatory 
                        services, and (II) with respect to 
                        pregnant women, prenatal care and 
                        delivery services; and
                          (iv) if such medical assistance 
                        includes services in institutions for 
                        mental diseases or in an intermediate 
                        care facility for the mentally retarded 
                        (or both) for any such group, it also 
                        must include for all groups covered at 
                        least the care and services listed in 
                        paragraphs (1) through (5) and (17) of 
                        section 1905(a) or the care and 
                        services listed in any 7 of the 
                        paragraphs numbered (1) through (24) of 
                        such section;
                  (D) for the inclusion of home health services 
                for any individual who, under the State plan, 
                is entitled to nursing facility services;
                  (E)(i) for making medical assistance 
                available for medicare cost-sharing (as defined 
                in section 1905(p)(3)) for qualified medicare 
                beneficiaries described in section 1905(p)(1);
                  (ii) for making medical assistance available 
                for payment of medicare cost-sharing described 
                in section 1905(p)(3)(A)(i) for qualified 
                disabled and working individuals described in 
                section 1905(s);
                  (iii) for making medical assistance available 
                for medicare cost sharing described in section 
                1905(p)(3)(A)(ii) subject to section 
                1905(p)(4), for individuals who would be 
                qualified medicare beneficiaries described in 
                section 1905(p)(1) but for the fact that their 
                income exceeds the income level established by 
                the State under section 1905(p)(2) but is less 
                than 110 percent in 1993 and 1994, and 120 
                percent in 1995 and years thereafter of the 
                official poverty line (referred to in such 
                section) for a family of the size involved; and
                  (iv) subject to sections 1933 and 1905(p)(4), 
                for making medical assistance available for 
                medicare cost-sharing described in section 
                1905(p)(3)(A)(ii) for individuals who would be 
                qualified medicare beneficiaries described in 
                section 1905(p)(1) but for the fact that their 
                income exceeds the income level established by 
                the State under section 1905(p)(2) and is at 
                least 120 percent, but less than 135 percent, 
                of the official poverty line (referred to in 
                such section) for a family of the size involved 
                and who are not otherwise eligible for medical 
                assistance under the State plan;
                  (F) at the option of a State, for making 
                medical assistance available for COBRA premiums 
                (as defined in subsection (u)(2)) for qualified 
                COBRA continuation beneficiaries described in 
                section 1902(u)(1); and
                  (G) that, in applying eligibility criteria of 
                the supplemental security income program under 
                title XVI for purposes of determining 
                eligibility for medical assistance under the 
                State plan of an individual who is not 
                receiving supplemental security income, the 
                State will disregard the provisions of 
                subsections (c) and (e) of section 1613;
        except that (I) the making available of the services 
        described in paragraph (4), (14), or (16) of section 
        1905(a) to individuals meeting the age requirements 
        prescribed therein shall not, by reason of this 
        paragraph (10), require the making available of any 
        such services, or the making available of such services 
        of the same amount, duration, and scope, to individuals 
        of any other ages, (II) the making available of 
        supplementary medical insurance benefits under part B 
        of title XVIII to individuals eligible therefor (either 
        pursuant to an agreement entered into under section 
        1843 or by reason of the payment of premiums under such 
        title by the State agency on behalf of such 
        individuals), or provision for meeting part or all of 
        the cost of deductibles, cost sharing, or similar 
        charges under part B of title XVIII for individuals 
        eligible for benefits under such part, shall not, by 
        reason of this paragraph (10), require the making 
        available of any such benefits, or the making available 
        of services of the same amount, duration, and scope, to 
        any other individuals, (III) the making available of 
        medical assistance equal in amount, duration, and scope 
        to the medical assistance made available to individuals 
        described in clause (A) to any classification of 
        individuals approved by the Secretary with respect to 
        whom there is being paid, or who are eligible, or would 
        be eligible if they were not in a medical institution, 
        to have paid with respect to them, a State 
        supplementary payment shall not, by reason of this 
        paragraph (10), require the making available of any 
        such assistance, or the making available of such 
        assistance of the same amount, duration, and scope, to 
        any other individuals not described in clause (A), (IV) 
        the imposition of a deductible, cost sharing, or 
        similar charge for any item or service furnished to an 
        individual not eligible for the exemption under section 
        1916(a)(2) or (b)(2) shall not require the imposition 
        of a deductible, cost sharing, or similar charge for 
        the same item or service furnished to an individual who 
        is eligible for such exemption, (V) the making 
        available to pregnant women covered under the plan of 
        services relating to pregnancy (including prenatal, 
        delivery, and postpartum services) or to any other 
        condition which may complicate pregnancy shall not, by 
        reason of this paragraph (10), require the making 
        available of such services, or the making available of 
        such services of the same amount, duration, and scope, 
        to any other individuals, provided such services are 
        made available (in the same amount, duration, and 
        scope) to all pregnant women covered under the State 
        plan, (VI) with respect to the making available of 
        medical assistance for hospice care to terminally ill 
        individuals who have made a voluntary election 
        described in section 1905(o) to receive hospice care 
        instead of medical assistance for certain other 
        services, such assistance may not be made available in 
        an amount, duration, or scope less than that provided 
        under title XVIII, and the making available of such 
        assistance shall not, by reason of this paragraph (10), 
        require the making available of medical assistance for 
        hospice care to other individuals or the making 
        available of medical assistance for services waived by 
        such terminally ill individuals, (VII) the medical 
        assistance made available to an individual described in 
        subsection (l)(1)(A) who is eligible for medical 
        assistance only because of subparagraph (A)(i)(IV) or 
        (A)(ii)(IX) shall be limited to medical assistance for 
        services related to pregnancy (including prenatal, 
        delivery, postpartum, and family planning services) and 
        to other conditions which may complicate pregnancy, 
        (VIII) the medical assistance made available to a 
        qualified medicare beneficiary described in section 
        1905(p)(1) who is only entitled to medical assistance 
        because the individual is such a beneficiary shall be 
        limited to medical assistance for medicare cost-sharing 
        (described in section 1905(p)(3)), subject to the 
        provisions of subsection (n) and section 1916(b), (IX) 
        the making available of respiratory care services in 
        accordance with subsection (e)(9) shall not, by reason 
        of this paragraph (10), require the making available of 
        such services, or the making available of such services 
        of the same amount, duration, and scope, to any 
        individuals not included under subsection (e)(9)(A), 
        provided such services are made available (in the same 
        amount, duration, and scope) to all individuals 
        described in such subsection, (X) if the plan provides 
        for any fixed durational limit on medical assistance 
        for inpatient hospital services (whether or not such a 
        limit varies by medical condition or diagnosis), the 
        plan must establish exceptions to such a limit for 
        medically necessary inpatient hospital services 
        furnished with respect to individuals under one year of 
        age in a hospital defined under the State plan, 
        pursuant to section 1923(a)(1)(A), as a 
        disproportionate share hospital and subparagraph (B) 
        (relating to comparability) shall not be construed as 
        requiring such an exception for other individuals, 
        services, or hospitals, (XI) the making available of 
        medical assistance to cover the costs of premiums, 
        deductibles, coinsurance, and other cost-sharing 
        obligations for certain individuals for private health 
        coverage as described in section 1906 shall not, by 
        reason of paragraph (10), require the making available 
        of any such benefits or the making available of 
        services of the same amount, duration, and scope of 
        such private coverage to any other individuals, (XII) 
        the medical assistance made available to an individual 
        described in subsection (u)(1) who is eligible for 
        medical assistance only because of subparagraph (F) 
        shall be limited to medical assistance for COBRA 
        continuation premiums (as defined in subsection 
        (u)(2)), (XIII) the medical assistance made available 
        to an individual described in subsection (z)(1) who is 
        eligible for medical assistance only because of 
        subparagraph (A)(ii)(XII) shall be limited to medical 
        assistance for TB-related services (described in 
        subsection (z)(2)), (XIV) the medical assistance made 
        available to an individual described in subsection (aa) 
        who is eligible for medical assistance only because of 
        subparagraph (A)(10)(ii)(XVIII) shall be limited to 
        medical assistance provided during the period in which 
        such an individual requires treatment for breast or 
        cervical cancer (XV) the medical assistance made 
        available to an individual described in subparagraph 
        (A)(i)(VIII) shall be limited to medical assistance 
        described in subsection (k)(1), (XVI) the medical 
        assistance made available to an individual described in 
        subsection (ii) shall be limited to family planning 
        services and supplies described in section 
        1905(a)(4)(C) including medical diagnosis and treatment 
        services that are provided pursuant to a family 
        planning service in a family planning setting and 
        (XVII) if an individual is described in subclause (IX) 
        of subparagraph (A)(i) and is also described in 
        subclause (VIII) of that subparagraph, the medical 
        assistance shall be made available to the individual 
        through subclause (IX) instead of through subclause 
        (VIII);
          (11)(A) provide for entering into cooperative 
        arrangements with the State agencies responsible for 
        administering or supervising the administration of 
        health services and vocational rehabilitation services 
        in the State looking toward maximum utilization of such 
        services in the provision of medical assistance under 
        the plan, (B) provide, to the extent prescribed by the 
        Secretary, for entering into agreements, with any 
        agency, institution, or organization receiving payments 
        under (or through an allotment under) title V, (i) 
        providing for utilizing such agency, institution, or 
        organization in furnishing care and services which are 
        available under such title or allotment and which are 
        included in the State plan approved under this section 
        (ii) making such provision as may be appropriate for 
        reimbursing such agency, institution, or organization 
        for the cost of any such care and services furnished 
        any individual for which payment would otherwise be 
        made to the State with respect to the individual under 
        section 1903, and (iii) providing for coordination of 
        information and education on pediatric vaccinations and 
        delivery of immunization services, and (C) provide for 
        coordination of the operations under this title, 
        including the provision of information and education on 
        pediatric vaccinations and the delivery of immunization 
        services, with the State's operations under the special 
        supplemental nutrition program for women, infants, and 
        children under section 17 of the Child Nutrition Act of 
        1966;
          (12) provide that, in determining whether an 
        individual is blind, there shall be an examination by a 
        physician skilled in the diseases of the eye or by an 
        optometrist, whichever the individual may select;
          (13) provide--
                  (A) for a public process for determination of 
                rates of payment under the plan for hospital 
                services, nursing facility services, and 
                services of intermediate care facilities for 
                the mentally retarded under which--
                          (i) proposed rates, the methodologies 
                        underlying the establishment of such 
                        rates, and justifications for the 
                        proposed rates are published,
                          (ii) providers, beneficiaries and 
                        their representatives, and other 
                        concerned State residents are given a 
                        reasonable opportunity for review and 
                        comment on the proposed rates, 
                        methodologies, and justifications,
                          (iii) final rates, the methodologies 
                        underlying the establishment of such 
                        rates, and justifications for such 
                        final rates are published, and
                          (iv) in the case of hospitals, such 
                        rates take into account (in a manner 
                        consistent with section 1923) the 
                        situation of hospitals which serve a 
                        disproportionate number of low-income 
                        patients with special needs;
                  (B) for payment for hospice care in amounts 
                no lower than the amounts, using the same 
                methodology, used under part A of title XVIII 
                and for payment of amounts under section 
                1905(o)(3); except that in the case of hospice 
                care which is furnished to an individual who is 
                a resident of a nursing facility or 
                intermediate care facility for the mentally 
                retarded, and who would be eligible under the 
                plan for nursing facility services or services 
                in an intermediate care facility for the 
                mentally retarded if he had not elected to 
                receive hospice care, there shall be paid an 
                additional amount, to take into account the 
                room and board furnished by the facility, equal 
                to at least 95 percent of the rate that would 
                have been paid by the State under the plan for 
                facility services in that facility for that 
                individual; and
                  (C) payment for primary care services (as 
                defined in subsection (jj)) furnished in 2013 
                and 2014 by a physician with a primary 
                specialty designation of family medicine, 
                general internal medicine, or pediatric 
                medicine at a rate not less than 100 percent of 
                the payment rate that applies to such services 
                and physician under part B of title XVIII (or, 
                if greater, the payment rate that would be 
                applicable under such part if the conversion 
                factor under section 1848(d) for the year 
                involved were the conversion factor under such 
                section for 2009);
          (14) provide that enrollment fees, premiums, or 
        similar charges, and deductions, cost sharing, or 
        similar charges, may be imposed only as provided in 
        section 1916;
          (15) provide for payment for services described in 
        clause (B) or (C) of section 1905(a)(2) under the plan 
        in accordance with subsection (bb);
          (16) provide for inclusion, to the extent required by 
        regulations prescribed by the Secretary, of provisions 
        (conforming to such regulations) with respect to the 
        furnishing of medical assistance under the plan to 
        individuals who are residents of the State but are 
        absent therefrom;
          (17) except as provided in subsections (e)(14), 
        (e)(15), (l)(3), (m)(3), and (m)(4), include reasonable 
        standards (which shall be comparable for all groups and 
        may, in accordance with standards prescribed by the 
        Secretary, differ with respect to income levels, but 
        only in the case of applicants or recipients of 
        assistance under the plan who are not receiving aid or 
        assistance under any plan of the State approved under 
        title I, X, XIV, or XVI, or part A of title IV, and 
        with respect to whom supplemental security income 
        benefits are not being paid under title XVI, based on 
        the variations between shelter costs in urban areas and 
        in rural areas) for determining eligibility for and the 
        extent of medical assistance under the plan which (A) 
        are consistent with the objectives of this title, (B) 
        provide for taking into account only such income and 
        resources as are, as determined in accordance with 
        standards prescribed by the Secretary, available to the 
        applicant or recipient and (in the case of any 
        applicant or recipient who would, except for income and 
        resources, be eligible for aid or assistance in the 
        form of money payments under any plan of the State 
        approved under title I, X, XIV, or XVI, or part A of 
        title IV, or to have paid with respect to him 
        supplemental security income benefits under title XVI) 
        as would not be disregarded (or set aside for future 
        needs) in determining his eligibility for such aid, 
        assistance, or benefits, (C) provide for reasonable 
        evaluation of any such income or resources, and (D) do 
        not take into account the financial responsibility of 
        any individual for any applicant or recipient of 
        assistance under the plan unless such applicant or 
        recipient is such individual's spouse or such 
        individual's child who is under age 21 or (with respect 
        to States eligible to participate in the State program 
        established under title XVI), is blind or permanently 
        and totally disabled, or is blind or disabled as 
        defined in section 1614 (with respect to States which 
        are not eligible to participate in such program); and 
        provide for flexibility in the application of such 
        standards with respect to income by taking into 
        account, except to the extent prescribed by the 
        Secretary, the costs (whether in the form of insurance 
        premiums, payments made to the State under section 
        1903(f)(2)(B), or otherwise and regardless of whether 
        such costs are reimbursed under another public program 
        of the State or political subdivision thereof) incurred 
        for medical care or for any other type of remedial care 
        recognized under State law;
          (18) comply with the provisions of section 1917 with 
        respect to liens, adjustments and recoveries of medical 
        assistance correctly paid, transfers of assets, and 
        treatment of certain trusts;
          (19) provide such safeguards as may be necessary to 
        assure that eligibility for care and services under the 
        plan will be determined, and such care and services 
        will be provided, in a manner consistent with 
        simplicity of administration and the best interests of 
        the recipients;
          (20) if the State plan includes medical assistance in 
        behalf of individuals 65 years of age or older who are 
        patients in institutions for mental diseases--
                  (A) provide for having in effect such 
                agreements or other arrangements with State 
                authorities concerned with mental diseases, 
                and, where appropriate, with such institutions, 
                as may be necessary for carrying out the State 
                plan, including arrangements for joint planning 
                and for development of alternate methods of 
                care, arrangements providing assurance of 
                immediate readmittance to institutions where 
                needed for individuals under alternate plans of 
                care, and arrangements providing for access to 
                patients and facilities, for furnishing 
                information, and for making reports;
                  (B) provide for an individual plan for each 
                such patient to assure that the institutional 
                care provided to him is in his best interests, 
                including, to that end, assurances that there 
                will be initial and periodic review of his 
                medical and other needs, that he will be given 
                appropriate medical treatment within the 
                institution, and that there will be a periodic 
                determination of his need for continued 
                treatment in the institution; and
                  (C) provide for the development of alternate 
                plans of care, making maximum utilization of 
                available resources, for recipients 65 years of 
                age or older who would otherwise need care in 
                such institutions, including appropriate 
                medical treatment and other aid or assistance; 
                for services referred to in section 
                3(a)(4)(A)(i) and (ii) or section 
                1603(a)(4)(A)(i) and (ii) which are appropriate 
                for such recipients and for such patients; and 
                for methods of administration necessary to 
                assure that the responsibilities of the State 
                agency under the State plan with respect to 
                such recipients and such patients will be 
                effectively carried out;
          (21) if the State plan includes medical assistance in 
        behalf of individuals 65 years of age or older who are 
        patients in public institutions for mental diseases, 
        show that the State is making satisfactory progress 
        toward developing and implementing a comprehensive 
        mental health program, including provision for 
        utilization of community mental health centers, nursing 
        facilities, and other alternatives to care in public 
        institutions for mental diseases;
          (22) include descriptions of (A) the kinds and 
        numbers of professional medical personnel and 
        supporting staff that will be used in the 
        administration of the plan and of the responsibilities 
        they will have, (B) the standards, for private or 
        public institutions in which recipients of medical 
        assistance under the plan may receive care or services, 
        that will be utilized by the State authority or 
        authorities responsible for establishing and 
        maintaining such standards, (C) the cooperative 
        arrangements with State health agencies and State 
        vocational rehabilitation agencies entered into with a 
        view to maximum utilization of and coordination of the 
        provision of medical assistance with the services 
        administered or supervised by such agencies, and (D) 
        other standards and methods that the State will use to 
        assure that medical or remedial care and services 
        provided to recipients of medical assistance are of 
        high quality;
          (23) provide that (A) any individual eligible for 
        medical assistance (including drugs) may obtain such 
        assistance from any institution, agency, community 
        pharmacy, or person, qualified to perform the service 
        or services required (including an organization which 
        provides such services, or arranges for their 
        availability, on a prepayment basis), who undertakes to 
        provide him such services, and (B) an enrollment of an 
        individual eligible for medical assistance in a primary 
        care case-management system (described in section 
        1915(b)(1)), a medicaid managed care organization, or a 
        similar entity shall not restrict the choice of the 
        qualified person from whom the individual may receive 
        services under section 1905(a)(4)(C), except as 
        provided in subsection (g) and in section 1915, except 
        that this paragraph shall not apply in the case of 
        Puerto Rico, the Virgin Islands, and Guam, and except 
        that nothing in this paragraph shall be construed as 
        requiring a State to provide medical assistance for 
        such services furnished by a person or entity convicted 
        of a felony under Federal or State law for an offense 
        which the State agency determines is inconsistent with 
        the best interests of beneficiaries under the State 
        plan or by a provider or supplier to which a moratorium 
        under subsection (kk)(4) is applied during the period 
        of such moratorium';
          (24) effective July 1, 1969, provide for consultative 
        services by health agencies and other appropriate 
        agencies of the State to hospitals, nursing facilities, 
        home health agencies, clinics, laboratories, and such 
        other institutions as the Secretary may specify in 
        order to assist them (A) to qualify for payments under 
        this Act, (B) to establish and maintain such fiscal 
        records as may be necessary for the proper and 
        efficient administration of this Act, and (C) to 
        provide information needed to determine payments due 
        under this Act on account of care and services 
        furnished to individuals;
          (25) provide--
                  (A) that the State or local agency 
                administering such plan will take all 
                reasonable measures to ascertain the legal 
                liability of third parties (including health 
                insurers, self-insured plans, group health 
                plans (as defined in section 607(1) of the 
                Employee Retirement Income Security Act of 
                1974), service benefit plans, managed care 
                organizations, pharmacy benefit managers, or 
                other parties that are, by statute, contract, 
                or agreement, legally responsible for payment 
                of a claim for a health care item or service) 
                to pay for care and services available under 
                the plan, including--
                          (i) the collection of sufficient 
                        information (as specified by the 
                        Secretary in regulations) to enable the 
                        State to pursue claims against such 
                        third parties, with such information 
                        being collected at the time of any 
                        determination or redetermination of 
                        eligibility for medical assistance, and
                          (ii) the submission to the Secretary 
                        of a plan (subject to approval by the 
                        Secretary) for pursuing claims against 
                        such third parties, which plan shall be 
                        integrated with, and be monitored as a 
                        part of the Secretary's review of, the 
                        State's mechanized claims processing 
                        and information retrieval systems 
                        required under section 1903(r);
                  (B) that in any case where such a legal 
                liability is found to exist after medical 
                assistance has been made available on behalf of 
                the individual and where the amount of 
                reimbursement the State can reasonably expect 
                to recover exceeds the costs of such recovery, 
                the State or local agency will seek 
                reimbursement for such assistance to the extent 
                of such legal liability;
                  (C) that in the case of an individual who is 
                entitled to medical assistance under the State 
                plan with respect to a service for which a 
                third party is liable for payment, the person 
                furnishing the service may not seek to collect 
                from the individual (or any financially 
                responsible relative or representative of that 
                individual) payment of an amount for that 
                service (i) if the total of the amount of the 
                liabilities of third parties for that service 
                is at least equal to the amount payable for 
                that service under the plan (disregarding 
                section 1916), or (ii) in an amount which 
                exceeds the lesser of (I) the amount which may 
                be collected under section 1916, or (II) the 
                amount by which the amount payable for that 
                service under the plan (disregarding section 
                1916) exceeds the total of the amount of the 
                liabilities of third parties for that service;
                  (D) that a person who furnishes services and 
                is participating under the plan may not refuse 
                to furnish services to an individual (who is 
                entitled to have payment made under the plan 
                for the services the person furnishes) because 
                of a third party's potential liability for 
                payment for the service;
                  (E) that in the case of preventive pediatric 
                care (including early and periodic screening 
                and diagnosis services under section 
                1905(a)(4)(B)) covered under the State plan, 
                the State shall--
                          (i) make payment for such service in 
                        accordance with the usual payment 
                        schedule under such plan for such 
                        services without regard to the 
                        liability of a third party for payment 
                        for such services; and
                          (ii) seek reimbursement from such 
                        third party in accordance with 
                        subparagraph (B);
                  (F) that in the case of any services covered 
                under such plan which are provided to an 
                individual on whose behalf child support 
                enforcement is being carried out by the State 
                agency under part D of title IV of this Act, 
                the State shall--
                          (i) make payment for such service in 
                        accordance with the usual payment 
                        schedule under such plan for such 
                        services without regard to any third-
                        party liability for payment for such 
                        services, if such third-party liability 
                        is derived (through insurance or 
                        otherwise) from the parent whose 
                        obligation to pay support is being 
                        enforced by such agency, if payment has 
                        not been made by such third party 
                        within 30 days after such services are 
                        furnished;
                          (ii) seek reimbursement from such 
                        third party in accordance with 
                        subparagraph (B);
                  (G) that the State prohibits any health 
                insurer (including a group health plan, as 
                defined in section 607(1) of the Employee 
                Retirement Income Security Act of 1974, a self-
                insured plan, a service benefit plan, a managed 
                care organization, a pharmacy benefit manager, 
                or other party that is, by statute, contract, 
                or agreement, legally responsible for payment 
                of a claim for a health care item or service), 
                in enrolling an individual or in making any 
                payments for benefits to the individual or on 
                the individual's behalf, from taking into 
                account that the individual is eligible for or 
                is provided medical assistance under a plan 
                under this title for such State, or any other 
                State;
                  (H) that to the extent that payment has been 
                made under the State plan for medical 
                assistance in any case where a third party has 
                a legal liability to make payment for such 
                assistance, the State has in effect laws under 
                which, to the extent that payment has been made 
                under the State plan for medical assistance for 
                health care items or services furnished to an 
                individual, the State is considered to have 
                acquired the rights of such individual to 
                payment by any other party for such health care 
                items or services; and
                  (I) that the State shall provide assurances 
                satisfactory to the Secretary that the State 
                has in effect laws requiring health insurers, 
                including self-insured plans, group health 
                plans (as defined in section 607(1) of the 
                Employee Retirement Income Security Act of 
                1974), service benefit plans, managed care 
                organizations, pharmacy benefit managers, or 
                other parties that are, by statute, contract, 
                or agreement, legally responsible for payment 
                of a claim for a health care item or service, 
                as a condition of doing business in the State, 
                to--
                          (i) provide, with respect to 
                        individuals who are eligible (and, at 
                        State option, individuals who apply or 
                        whose eligibility for medical 
                        assistance is being evaluated in 
                        accordance with section 1902(e)(13)(D)) 
                        for, or are provided, medical 
                        assistance under a State plan (or under 
                        a waiver of the plan) under this title 
                        and child health assistance under title 
                        XXI, upon the request of the State, 
                        information to determine during what 
                        period the individual or their spouses 
                        or their dependents may be (or may have 
                        been) covered by a health insurer and 
                        the nature of the coverage that is or 
                        was provided by the health insurer 
                        (including the name, address, and 
                        identifying number of the plan) in a 
                        manner prescribed by the Secretary;
                          (ii) accept the State's right of 
                        recovery and the assignment to the 
                        State of any right of an individual or 
                        other entity to payment from the party 
                        for an item or service for which 
                        payment has been made under the State 
                        plan;
                          (iii) respond to any inquiry by the 
                        State regarding a claim for payment for 
                        any health care item or service that is 
                        submitted not later than 3 years after 
                        the date of the provision of such 
                        health care item or service; and
                          (iv) agree not to deny a claim 
                        submitted by the State solely on the 
                        basis of the date of submission of the 
                        claim, the type or format of the claim 
                        form, or a failure to present proper 
                        documentation at the point-of-sale that 
                        is the basis of the claim, if--
                                  (I) the claim is submitted by 
                                the State within the 3-year 
                                period beginning on the date on 
                                which the item or service was 
                                furnished; and
                                  (II) any action by the State 
                                to enforce its rights with 
                                respect to such claim is 
                                commenced within 6 years of the 
                                State's submission of such 
                                claim;
          (26) if the State plan includes medical assistance 
        for inpatient mental hospital services, provide, with 
        respect to each patient receiving such services, for a 
        regular program of medical review (including medical 
        evaluation) of his need for such services, and for a 
        written plan of care;
          (27) provide for agreements with every person or 
        institution providing services under the State plan 
        under which such person or institution agrees (A) to 
        keep such records as are necessary fully to disclose 
        the extent of the services provided to individuals 
        receiving assistance under the State plan, and (B) to 
        furnish the State agency or the Secretary with such 
        information, regarding any payments claimed by such 
        person or institution for providing services under the 
        State plan, as the State agency or the Secretary may 
        from time to time request;
          (28) provide--
                  (A) that any nursing facility receiving 
                payments under such plan must satisfy all the 
                requirements of subsections (b) through (d) of 
                section 1919 as they apply to such facilities;
                  (B) for including in ``nursing facility 
                services'' at least the items and services 
                specified (or deemed to be specified) by the 
                Secretary under section 1919(f)(7) and making 
                available upon request a description of the 
                items and services so included;
                  (C) for procedures to make available to the 
                public the data and methodology used in 
                establishing payment rates for nursing 
                facilities under this title; and
                  (D) for compliance (by the date specified in 
                the respective sections) with the requirements 
                of--
                          (i) section 1919(e);
                          (ii) section 1919(g) (relating to 
                        responsibility for survey and 
                        certification of nursing facilities); 
                        and
                          (iii) sections 1919(h)(2)(B) and 
                        1919(h)(2)(D) (relating to 
                        establishment and application of 
                        remedies);
          (29) include a State program which meets the 
        requirements set forth in section 1908, for the 
        licensing of administrators of nursing homes;
          (30)(A) provide such methods and procedures relating 
        to the utilization of, and the payment for, care and 
        services available under the plan (including but not 
        limited to utilization review plans as provided for in 
        section 1903(i)(4)) as may be necessary to safeguard 
        against unnecessary utilization of such care and 
        services and to assure that payments are consistent 
        with efficiency, economy, and quality of care and are 
        sufficient to enlist enough providers so that care and 
        services are available under the plan at least to the 
        extent that such care and services are available to the 
        general population in the geographic area; and
          (B) provide, under the program described in 
        subparagraph (A), that--
                  (i) each admission to a hospital, 
                intermediate care facility for the mentally 
                retarded, or hospital for mental diseases is 
                reviewed or screened in accordance with 
                criteria established by medical and other 
                professional personnel who are not themselves 
                directly responsible for the care of the 
                patient involved, and who do not have a 
                significant financial interest in any such 
                institution and are not, except in the case of 
                a hospital, employed by the institution 
                providing the care involved, and
                  (ii) the information developed from such 
                review or screening, along with the data 
                obtained from prior reviews of the necessity 
                for admission and continued stay of patients by 
                such professional personnel, shall be used as 
                the basis for establishing the size and 
                composition of the sample of admissions to be 
                subject to review and evaluation by such 
                personnel, and any such sample may be of any 
                size up to 100 percent of all admissions and 
                must be of sufficient size to serve the purpose 
                of (I) identifying the patterns of care being 
                provided and the changes occurring over time in 
                such patterns so that the need for modification 
                may be ascertained, and (II) subjecting 
                admissions to early or more extensive review 
                where information indicates that such 
                consideration is warranted to a hospital, 
                intermediate care facility for the mentally 
                retarded, or hospital for mental diseases;
          (31) with respect to services in an intermediate care 
        facility for the mentally retarded (where the State 
        plan includes medical assistance for such services) 
        provide, with respect to each patient receiving such 
        services, for a written plan of care, prior to 
        admission to or authorization of benefits in such 
        facility, in accordance with regulations of the 
        Secretary, and for a regular program of independent 
        professional review (including medical evaluation) 
        which shall periodically review his need for such 
        services;
          (32) provide that no payment under the plan for any 
        care or service provided to an individual shall be made 
        to anyone other than such individual or the person or 
        institution providing such care or service, under an 
        assignment or power of attorney or otherwise; except 
        that--
                  (A) in the case of any care or service 
                provided by a physician, dentist, or other 
                individual practitioner, such payment may be 
                made (i) to the employer of such physician, 
                dentist, or other practitioner if such 
                physician, dentist, or practitioner is required 
                as a condition of his employment to turn over 
                his fee for such care or service to his 
                employer, or (ii) (where the care or service 
                was provided in a hospital, clinic, or other 
                facility) to the facility in which the care or 
                service was provided if there is a contractual 
                arrangement between such physician, dentist, or 
                practitioner and such facility under which such 
                facility submits the bill for such care or 
                service;
                  (B) nothing in this paragraph shall be 
                construed (i) to prevent the making of such a 
                payment in accordance with an assignment from 
                the person or institution providing the care or 
                service involved if such assignment is made to 
                a governmental agency or entity or is 
                established by or pursuant to the order of a 
                court of competent jurisdiction, or (ii) to 
                preclude an agent of such person or institution 
                from receiving any such payment if (but only 
                if) such agent does so pursuant to an agency 
                agreement under which the compensation to be 
                paid to the agent for his services for or in 
                connection with the billing or collection of 
                payments due such person or institution under 
                the plan is unrelated (directly or indirectly) 
                to the amount of such payments or the billings 
                therefor, and is not dependent upon the actual 
                collection of any such payment;
                  (C) in the case of services furnished (during 
                a period that does not exceed 14 continuous 
                days in the case of an informal reciprocal 
                arrangement or 90 continuous days (or such 
                longer period as the Secretary may provide) in 
                the case of an arrangement involving per diem 
                or other fee-for-time compensation) by, or 
                incident to the services of, one physician to 
                the patients of another physician who submits 
                the claim for such services, payment shall be 
                made to the physician submitting the claim (as 
                if the services were furnished by, or incident 
                to, the physician's services), but only if the 
                claim identifies (in a manner specified by the 
                Secretary) the physician who furnished the 
                services; and
                  (D) in the case of payment for a childhood 
                vaccine administered before October 1, 1994, to 
                individuals entitled to medical assistance 
                under the State plan, the State plan may make 
                payment directly to the manufacturer of the 
                vaccine under a voluntary replacement program 
                agreed to by the State pursuant to which the 
                manufacturer (i) supplies doses of the vaccine 
                to providers administering the vaccine, (ii) 
                periodically replaces the supply of the 
                vaccine, and (iii) charges the State the 
                manufacturer's price to the Centers for Disease 
                Control and Prevention for the vaccine so 
                administered (which price includes a reasonable 
                amount to cover shipping and the handling of 
                returns);
          (33) provide--
                  (A) that the State health agency, or other 
                appropriate State medical agency, shall be 
                responsible for establishing a plan, consistent 
                with regulations prescribed by the Secretary, 
                for the review by appropriate professional 
                health personnel of the appropriateness and 
                quality of care and services furnished to 
                recipients of medical assistance under the plan 
                in order to provide guidance with respect 
                thereto in the administration of the plan to 
                the State agency established or designated 
                pursuant to paragraph (5) and, where 
                applicable, to the State agency described in 
                the second sentence of this subsection; and
                  (B) that, except as provided in section 
                1919(g), the State or local agency utilized by 
                the Secretary for the purpose specified in the 
                first sentence of section 1864(a), or, if such 
                agency is not the State agency which is 
                responsible for licensing health institutions, 
                the State agency responsible for such 
                licensing, will perform for the State agency 
                administering or supervising the administration 
                of the plan approved under this title the 
                function of determining whether institutions 
                and agencies meet the requirements for 
                participation in the program under such plan, 
                except that, if the Secretary has cause to 
                question the adequacy of such determinations, 
                the Secretary is authorized to validate State 
                determinations and, on that basis, make 
                independent and binding determinations 
                concerning the extent to which individual 
                institutions and agencies meet the requirements 
                for participation;
          (34) provide that in the case of any individual who 
        has been determined to be eligible for medical 
        assistance under the plan, such assistance will be made 
        available to him for care and services included under 
        the plan and furnished in or after the third month 
        before the month in which he made application (or 
        application was made on his behalf in the case of a 
        deceased individual) for such assistance if such 
        individual was (or upon application would have been) 
        eligible for such assistance at the time such care and 
        services were furnished;
          (35) provide that any disclosing entity (as defined 
        in section 1124(a)(2)) receiving payments under such 
        plan complies with the requirements of section 1124;
          (36) provide that within 90 days following the 
        completion of each survey of any health care facility, 
        laboratory, agency, clinic, or organization, by the 
        appropriate State agency described in paragraph (9), 
        such agency shall (in accordance with regulations of 
        the Secretary) make public in readily available form 
        and place the pertinent findings of each such survey 
        relating to the compliance of each such health care 
        facility, laboratory, clinic, agency, or organization 
        with (A) the statutory conditions of participation 
        imposed under this title, and (B) the major additional 
        conditions which the Secretary finds necessary in the 
        interest of health and safety of individuals who are 
        furnished care or services by any such facility, 
        laboratory, clinic, agency, or organization;
          (37) provide for claims payment procedures which (A) 
        ensure that 90 per centum of claims for payment (for 
        which no further written information or substantiation 
        is required in order to make payment) made for services 
        covered under the plan and furnished by health care 
        practitioners through individual or group practices or 
        through shared health facilities are paid within 30 
        days of the date of receipt of such claims and that 99 
        per centum of such claims are paid within 90 days of 
        the date of receipt of such claims, and (B) provide for 
        procedures of prepayment and postpayment claims review, 
        including review of appropriate data with respect to 
        the recipient and provider of a service and the nature 
        of the service for which payment is claimed, to ensure 
        the proper and efficient payment of claims and 
        management of the program;
          (38) require that an entity (other than an individual 
        practitioner or a group of practitioners) that 
        furnishes, or arranges for the furnishing of, items or 
        services under the plan, shall supply (within such 
        period as may be specified in regulations by the 
        Secretary or by the single State agency which 
        administers or supervises the administration of the 
        plan) upon request specifically addressed to such 
        entity by the Secretary or such State agency, the 
        information described in section 1128(b)(9);
          (39) provide that the State agency shall exclude any 
        specified individual or entity from participation in 
        the program under the State plan for the period 
        specified by the Secretary, when required by him to do 
        so pursuant to section 1128 or section 1128A, terminate 
        the participation of any individual or entity in such 
        program if (subject to such exceptions as are permitted 
        with respect to exclusion under sections 1128(c)(3)(B) 
        and 1128(d)(3)(B)) participation of such individual or 
        entity is terminated under title XVIII, any other State 
        plan under this title (or waiver of the plan), or any 
        State child health plan under title XXI (or waiver of 
        the plan) and such termination is included by the 
        Secretary in any database or similar system developed 
        pursuant to section 6401(b)(2) of the Patient 
        Protection and Affordable Care Act, and provide that no 
        payment may be made under the plan with respect to any 
        item or service furnished by such individual or entity 
        during such period;
          (40) require each health services facility or 
        organization which receives payments under the plan and 
        of a type for which a uniform reporting system has been 
        established under section 1121(a) to make reports to 
        the Secretary of information described in such section 
        in accordance with the uniform reporting system 
        (established under such section) for that type of 
        facility or organization;
          (41) provide, in accordance with subsection (kk)(8) 
        (as applicable), that whenever a provider of services 
        or any other person is terminated, suspended, or 
        otherwise sanctioned or prohibited from participating 
        under the State plan, the State agency shall promptly 
        notify the Secretary and, in the case of a physician 
        and notwithstanding paragraph (7), the State medical 
        licensing board of such action;
          (42) provide that--
                  (A) the records of any entity participating 
                in the plan and providing services reimbursable 
                on a cost-related basis will be audited as the 
                Secretary determines to be necessary to insure 
                that proper payments are made under the plan; 
                and
                  (B) not later than December 31, 2010, the 
                State shall--
                          (i) establish a program under which 
                        the State contracts (consistent with 
                        State law and in the same manner as the 
                        Secretary enters into contracts with 
                        recovery audit contractors under 
                        section 1893(h), subject to such 
                        exceptions or requirements as the 
                        Secretary may require for purposes of 
                        this title or a particular State) with 
                        1 or more recovery audit contractors 
                        for the purpose of identifying 
                        underpayments and overpayments and 
                        recouping overpayments under the State 
                        plan and under any waiver of the State 
                        plan with respect to all services for 
                        which payment is made to any entity 
                        under such plan or waiver; and
                          (ii) provide assurances satisfactory 
                        to the Secretary that--
                                  (I) under such contracts, 
                                payment shall be made to such a 
                                contractor only from amounts 
                                recovered;
                                  (II) from such amounts 
                                recovered, payment--
                                          (aa) shall be made on 
                                        a contingent basis for 
                                        collecting 
                                        overpayments; and
                                          (bb) may be made in 
                                        such amounts as the 
                                        State may specify for 
                                        identifying 
                                        underpayments;
                                  (III) the State has an 
                                adequate process for entities 
                                to appeal any adverse 
                                determination made by such 
                                contractors; and
                                  (IV) such program is carried 
                                out in accordance with such 
                                requirements as the Secretary 
                                shall specify, including--
                                          (aa) for purposes of 
                                        section 1903(a)(7), 
                                        that amounts expended 
                                        by the State to carry 
                                        out the program shall 
                                        be considered amounts 
                                        expended as necessary 
                                        for the proper and 
                                        efficient 
                                        administration of the 
                                        State plan or a waiver 
                                        of the plan;
                                          (bb) that section 
                                        1903(d) shall apply to 
                                        amounts recovered under 
                                        the program; and
                                          (cc) that the State 
                                        and any such 
                                        contractors under 
                                        contract with the State 
                                        shall coordinate such 
                                        recovery audit efforts 
                                        with other contractors 
                                        or entities performing 
                                        audits of entities 
                                        receiving payments 
                                        under the State plan or 
                                        waiver in the State, 
                                        including efforts with 
                                        Federal and State law 
                                        enforcement with 
                                        respect to the 
                                        Department of Justice, 
                                        including the Federal 
                                        Bureau of 
                                        Investigations, the 
                                        Inspector General of 
                                        the Department of 
                                        Health and Human 
                                        Services, and the State 
                                        medicaid fraud control 
                                        unit; and
          (43) provide for--
                  (A) informing all persons in the State who 
                are under the age of 21 and who have been 
                determined to be eligible for medical 
                assistance including services described in 
                section 1905(a)(4)(B), of the availability of 
                early and periodic screening, diagnostic, and 
                treatment services as described in section 
                1905(r) and the need for age-appropriate 
                immunizations against vaccine-preventable 
                diseases,
                  (B) providing or arranging for the provision 
                of such screening services in all cases where 
                they are requested,
                  (C) arranging for (directly or through 
                referral to appropriate agencies, 
                organizations, or individuals) corrective 
                treatment the need for which is disclosed by 
                such child health screening services, and
                  (D) reporting to the Secretary (in a uniform 
                form and manner established by the Secretary, 
                by age group and by basis of eligibility for 
                medical assistance, and by not later than April 
                1 after the end of each fiscal year, beginning 
                with fiscal year 1990) the following 
                information relating to early and periodic 
                screening, diagnostic, and treatment services 
                provided under the plan during each fiscal 
                year:
                          (i) the number of children provided 
                        child health screening services,
                          (ii) the number of children referred 
                        for corrective treatment (the need for 
                        which is disclosed by such child health 
                        screening services),
                          (iii) the number of children 
                        receiving dental services, and other 
                        information relating to the provision 
                        of dental services to such children 
                        described in section 2108(e) and
                          (iv) the State's results in attaining 
                        the participation goals set for the 
                        State under section 1905(r);
          (44) in each case for which payment for inpatient 
        hospital services, services in an intermediate care 
        facility for the mentally retarded, or inpatient mental 
        hospital services is made under the State plan--
                  (A) a physician (or, in the case of skilled 
                nursing facility services or intermediate care 
                facility services, a physician, or a nurse 
                practitioner or clinical nurse specialist who 
                is not an employee of the facility but is 
                working in collaboration with a physician) 
                certifies at the time of admission, or, if 
                later, the time the individual applies for 
                medical assistance under the State plan (and a 
                physician, a physician assistant under the 
                supervision of a physician, or, in the case of 
                skilled nursing facility services or 
                intermediate care facility services, a 
                physician, or a nurse practitioner or clinical 
                nurse specialist who is not an employee of the 
                facility but is working in collaboration with a 
                physician, recertifies, where such services are 
                furnished over a period of time, in such cases, 
                at least as often as required under section 
                1903(g)(6) (or, in the case of services that 
                are services provided in an intermediate care 
                facility for the mentally retarded, every 
                year), and accompanied by such supporting 
                material, appropriate to the case involved, as 
                may be provided in regulations of the 
                Secretary), that such services are or were 
                required to be given on an inpatient basis 
                because the individual needs or needed such 
                services, and
                  (B) such services were furnished under a plan 
                established and periodically reviewed and 
                evaluated by a physician, or, in the case of 
                skilled nursing facility services or 
                intermediate care facility services, a 
                physician, or a nurse practitioner or clinical 
                nurse specialist who is not an employee of the 
                facility but is working in collaboration with a 
                physician;
          (45) provide for mandatory assignment of rights of 
        payment for medical support and other medical care owed 
        to recipients, in accordance with section 1912;
          (46)(A) provide that information is requested and 
        exchanged for purposes of income and eligibility 
        verification in accordance with a State system which 
        meets the requirements of section 1137 of this Act; and
          (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);
          (47) provide--
                  (A) at the option of the State, for making 
                ambulatory prenatal care available to pregnant 
                women during a presumptive eligibility period 
                in accordance with section 1920 and provide for 
                making medical assistance for items and 
                services described in subsection (a) of section 
                1920A available to children during a 
                presumptive eligibility period in accordance 
                with such section and provide for making 
                medical assistance available to individuals 
                described in subsection (a) of section 1920B 
                during a presumptive eligibility period in 
                accordance with such section and provide for 
                making medical assistance available to 
                individuals described in subsection (a) of 
                section 1920C during a presumptive eligibility 
                period in accordance with such section; and
                  (B) that any hospital that is a participating 
                provider under the State plan may elect to be a 
                qualified entity for purposes of determining, 
                on the basis of preliminary information, 
                whether any individual is eligible for medical 
                assistance under the State plan or under a 
                waiver of the plan for purposes of providing 
                the individual with medical assistance during a 
                presumptive eligibility period, in the same 
                manner, and subject to the same requirements, 
                as apply to the State options with respect to 
                populations described in section 1920, 1920A, 
                1920B, or 1920C (but without regard to whether 
                the State has elected to provide for a 
                presumptive eligibility period under any such 
                sections), subject to such guidance as the 
                Secretary shall establish;
          (48) provide a method of making cards evidencing 
        eligibility for medical assistance available to an 
        eligible individual who does not reside in a permanent 
        dwelling or does not have a fixed home or mailing 
        address;
          (49) provide that the State will provide information 
        and access to certain information respecting sanctions 
        taken against health care practitioners and providers 
        by State licensing authorities in accordance with 
        section 1921;
          (50) provide, in accordance with subsection (q), for 
        a monthly personal needs allowance for certain 
        institutionalized individuals and couples;
          (51) meet the requirements of section 1924 (relating 
        to protection of community spouses);
          (52) meet the requirements of section 1925 (relating 
        to extension of eligibility for medical assistance);
          (53) provide--
                  (A) for notifying in a timely manner all 
                individuals in the State who are determined to 
                be eligible for medical assistance and who are 
                pregnant women, breastfeeding or postpartum 
                women (as defined in section 17 of the Child 
                Nutrition Act of 1966), or children below the 
                age of 5, of the availability of benefits 
                furnished by the special supplemental nutrition 
                program under such section, and
                  (B) for referring any such individual to the 
                State agency responsible for administering such 
                program;
          (54) in the case of a State plan that provides 
        medical assistance for covered outpatient drugs (as 
        defined in section 1927(k)), comply with the applicable 
        requirements of section 1927;
          (55) provide for receipt and initial processing of 
        applications of individuals for medical assistance 
        under subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), 
        (a)(10)(A)(i)(VII), or (a)(10)(A)(ii)(IX)--
                  (A) at locations which are other than those 
                used for the receipt and processing of 
                applications for aid under part A of title IV 
                and which include facilities defined as 
                disproportionate share hospitals under section 
                1923(a)(1)(A) and Federally-qualified health 
                centers described in section 1905(1)(2)(B), and
                  (B) using applications which are other than 
                those used for applications for aid under such 
                part;
          (56) provide, in accordance with subsection (s), for 
        adjusted payments for certain inpatient hospital 
        services;
          (57) provide that each hospital, nursing facility, 
        provider of home health care or personal care services, 
        hospice program, or medicaid managed care organization 
        (as defined in section 1903(m)(1)(A)) receiving funds 
        under the plan shall comply with the requirements of 
        subsection (w);
          (58) provide that the State, acting through a State 
        agency, association, or other private nonprofit entity, 
        develop a written description of the law of the State 
        (whether statutory or as recognized by the courts of 
        the State) concerning advance directives that would be 
        distributed by providers or organizations under the 
        requirements of subsection (w);
          (59) maintain a list (updated not less often than 
        monthly, and containing each physician's unique 
        identifier provided under the system established under 
        subsection (x)) of all physicians who are certified to 
        participate under the State plan;
          (60) provide that the State agency shall provide 
        assurances satisfactory to the Secretary that the State 
        has in effect the laws relating to medical child 
        support required under section 1908A;
          (61) provide that the State must demonstrate that it 
        operates a medicaid fraud and abuse control unit 
        described in section 1903(q) that effectively carries 
        out the functions and requirements described in such 
        section, as determined in accordance with standards 
        established by the Secretary, unless the State 
        demonstrates to the satisfaction of the Secretary that 
        the effective operation of such a unit in the State 
        would not be cost-effective because minimal fraud 
        exists in connection with the provision of covered 
        services to eligible individuals under the State plan, 
        and that beneficiaries under the plan will be protected 
        from abuse and neglect in connection with the provision 
        of medical assistance under the plan without the 
        existence of such a unit;
          (62) provide for a program for the distribution of 
        pediatric vaccines to program-registered providers for 
        the immunization of vaccine-eligible children in 
        accordance with section 1928;
          (63) provide for administration and determinations of 
        eligibility with respect to individuals who are (or 
        seek to be) eligible for medical assistance based on 
        the application of section 1931;
          (64) provide, not later than 1 year after the date of 
        the enactment of this paragraph, a mechanism to receive 
        reports from beneficiaries and others and compile data 
        concerning alleged instances of waste, fraud, and abuse 
        relating to the operation of this title;
          (65) provide that the State shall issue provider 
        numbers for all suppliers of medical assistance 
        consisting of durable medical equipment, as defined in 
        section 1861(n), and the State shall not issue or renew 
        such a supplier number for any such supplier unless--
                  (A)(i) full and complete information as to 
                the identity of each person with an ownership 
                or control interest (as defined in section 
                1124(a)(3)) in the supplier or in any 
                subcontractor (as defined by the Secretary in 
                regulations) in which the supplier directly or 
                indirectly has a 5 percent or more ownership 
                interest; and
                  (ii) to the extent determined to be feasible 
                under regulations of the Secretary, the name of 
                any disclosing entity (as defined in section 
                1124(a)(2)) with respect to which a person with 
                such an ownership or control interest in the 
                supplier is a person with such an ownership or 
                control interest in the disclosing entity; and
                  (B) a surety bond in a form specified by the 
                Secretary under section 1834(a)(16)(B) and in 
                an amount that is not less than $50,000 or such 
                comparable surety bond as the Secretary may 
                permit under the second sentence of such 
                section;
          (66) provide for making eligibility determinations 
        under section 1935(a);
          (67) provide, with respect to services covered under 
        the State plan (but not under title XVIII) that are 
        furnished to a PACE program eligible individual 
        enrolled with a PACE provider by a provider 
        participating under the State plan that does not have a 
        contract or other agreement with the PACE provider that 
        establishes payment amounts for such services, that 
        such participating provider may not require the PACE 
        provider to pay the participating provider an amount 
        greater than the amount that would otherwise be payable 
        for the service to the participating provider under the 
        State plan for the State where the PACE provider is 
        located (in accordance with regulations issued by the 
        Secretary);
          (68) provide that any entity that receives or makes 
        annual payments under the State plan of at least 
        $5,000,000, as a condition of receiving such payments, 
        shall--
                  (A) establish written policies for all 
                employees of the entity (including management), 
                and of any contractor or agent of the entity, 
                that provide detailed information about the 
                False Claims Act established under sections 
                3729 through 3733 of title 31, United States 
                Code, administrative remedies for false claims 
                and statements established under chapter 38 of 
                title 31, United States Code, any State laws 
                pertaining to civil or criminal penalties for 
                false claims and statements, and whistleblower 
                protections under such laws, with respect to 
                the role of such laws in preventing and 
                detecting fraud, waste, and abuse in Federal 
                health care programs (as defined in section 
                1128B(f));
                  (B) include as part of such written policies, 
                detailed provisions regarding the entity's 
                policies and procedures for detecting and 
                preventing fraud, waste, and abuse; and
                  (C) include in any employee handbook for the 
                entity, a specific discussion of the laws 
                described in subparagraph (A), the rights of 
                employees to be protected as whistleblowers, 
                and the entity's policies and procedures for 
                detecting and preventing fraud, waste, and 
                abuse;
          (69) provide that the State must comply with any 
        requirements determined by the Secretary to be 
        necessary for carrying out the Medicaid Integrity 
        Program established under section 1936;
          (70) at the option of the State and notwithstanding 
        paragraphs (1), (10)(B), and (23), provide for the 
        establishment of a non-emergency medical transportation 
        brokerage program in order to more cost-effectively 
        provide transportation for individuals eligible for 
        medical assistance under the State plan who need access 
        to medical care or services and have no other means of 
        transportation which--
                  (A) may include a wheelchair van, taxi, 
                stretcher car, bus passes and tickets, secured 
                transportation, and such other transportation 
                as the Secretary determines appropriate; and
                  (B) may be conducted under contract with a 
                broker who--
                          (i) is selected through a competitive 
                        bidding process based on the State's 
                        evaluation of the broker's experience, 
                        performance, references, resources, 
                        qualifications, and costs;
                          (ii) has oversight procedures to 
                        monitor beneficiary access and 
                        complaints and ensure that transport 
                        personnel are licensed, qualified, 
                        competent, and courteous;
                          (iii) is subject to regular auditing 
                        and oversight by the State in order to 
                        ensure the quality of the 
                        transportation services provided and 
                        the adequacy of beneficiary access to 
                        medical care and services; and
                          (iv) complies with such requirements 
                        related to prohibitions on referrals 
                        and conflict of interest as the 
                        Secretary shall establish (based on the 
                        prohibitions on physician referrals 
                        under section 1877 and such other 
                        prohibitions and requirements as the 
                        Secretary determines to be 
                        appropriate);
          (71) provide that the State will implement an asset 
        verification program as required under section 1940;
          (72) provide that the State will not prevent a 
        Federally-qualified health center from entering into 
        contractual relationships with private practice dental 
        providers in the provision of Federally-qualified 
        health center services;
          (73) in the case of any State in which 1 or more 
        Indian Health Programs or Urban Indian Organizations 
        furnishes health care services, provide for a process 
        under which the State seeks advice on a regular, 
        ongoing basis from designees of such Indian Health 
        Programs and Urban Indian Organizations on matters 
        relating to the application of this title that are 
        likely to have a direct effect on such Indian Health 
        Programs and Urban Indian Organizations and that--
                  (A) shall include solicitation of advice 
                prior to submission of any plan amendments, 
                waiver requests, and proposals for 
                demonstration projects likely to have a direct 
                effect on Indians, Indian Health Programs, or 
                Urban Indian Organizations; and
                  (B) may include appointment of an advisory 
                committee and of a designee of such Indian 
                Health Programs and Urban Indian Organizations 
                to the medical care advisory committee advising 
                the State on its State plan under this title;
          (74) provide for maintenance of effort under the 
        State plan or under any waiver of the plan in 
        accordance with subsection (gg); and
          (75) provide that, beginning January 2015, and 
        annually thereafter, the State shall submit a report to 
        the Secretary that contains--
                  (A) the total number of enrolled and newly 
                enrolled individuals in the State plan or under 
                a waiver of the plan for the fiscal year ending 
                on September 30 of the preceding calendar year, 
                disaggregated by population, including 
                children, parents, nonpregnant childless 
                adults, disabled individuals, elderly 
                individuals, and such other categories or sub-
                categories of individuals eligible for medical 
                assistance under the State plan or under a 
                waiver of the plan as the Secretary may 
                require;
                  (B) a description, which may be specified by 
                population, of the outreach and enrollment 
                processes used by the State during such fiscal 
                year; and
                  (C) any other data reporting determined 
                necessary by the Secretary to monitor 
                enrollment and retention of individuals 
                eligible for medical assistance under the State 
                plan or under a waiver of the plan;
          (76) provide that any data collected under the State 
        plan meets the requirements of section 3101 of the 
        Public Health Service Act;
          (77) provide that the State shall comply with 
        provider and supplier screening, oversight, and 
        reporting requirements in accordance with subsection 
        (kk);
          (78) provide that, not later than January 1, 2017, in 
        the case of a State that pursuant to its State plan or 
        waiver of the plan for medical assistance pays for 
        medical assistance on a fee-for-service basis, the 
        State shall require each provider furnishing items and 
        services to, or ordering, prescribing, referring, or 
        certifying eligibility for, services for individuals 
        eligible to receive medical assistance under such plan 
        to enroll with the State agency and provide to the 
        State agency the provider's identifying information, 
        including the name, specialty, date of birth, Social 
        Security number, national provider identifier (if 
        applicable), Federal taxpayer identification number, 
        and the State license or certification number of the 
        provider (if applicable);
          (79) provide that any agent, clearinghouse, or other 
        alternate payee (as defined by the Secretary) that 
        submits claims on behalf of a health care provider must 
        register with the State and the Secretary in a form and 
        manner specified by the Secretary;
          (80) provide that the State shall not provide any 
        payments for items or services provided under the State 
        plan or under a waiver to any financial institution or 
        entity located outside of the United States;
          (81) provide for implementation of the payment models 
        specified by the Secretary under section 1115A(c) for 
        implementation on a nationwide basis unless the State 
        demonstrates to the satisfaction of the Secretary that 
        implementation would not be administratively feasible 
        or appropriate to the health care delivery system of 
        the State;
          (82) provide that the State agency responsible for 
        administering the State plan under this title provides 
        assurances to the Secretary that the State agency is in 
        compliance with subparagraphs (A), (B), and (C) of 
        section 1128K(b)(2); [and]
          (83) provide that, not later than January 1, 2017, in 
        the case of a State plan (or waiver of the plan) that 
        provides medical assistance on a fee-for-service basis 
        or through a primary care case-management system 
        described in section 1915(b)(1) (other than a primary 
        care case management entity (as defined by the 
        Secretary)), the State shall publish (and update on at 
        least an annual basis) on the public website of the 
        State agency administering the State plan, a directory 
        of the physicians described in subsection (mm) and, at 
        State option, other providers described in such 
        subsection that--
                  (A) includes--
                          (i) with respect to each such 
                        physician or provider--
                                  (I) the name of the physician 
                                or provider;
                                  (II) the specialty of the 
                                physician or provider;
                                  (III) the address at which 
                                the physician or provider 
                                provides services; and
                                  (IV) the telephone number of 
                                the physician or provider; and
                          (ii) with respect to any such 
                        physician or provider participating in 
                        such a primary care case-management 
                        system, information regarding--
                                  (I) whether the physician or 
                                provider is accepting as new 
                                patients individuals who 
                                receive medical assistance 
                                under this title; and
                                  (II) the physician's or 
                                provider's cultural and 
                                linguistic capabilities, 
                                including the languages spoken 
                                by the physician or provider or 
                                by the skilled medical 
                                interpreter providing 
                                interpretation services at the 
                                physician's or provider's 
                                office; and
                  (B) may include, at State option, with 
                respect to each such physician or provider--
                          (i) the Internet website of such 
                        physician or provider; or
                          (ii) whether the physician or 
                        provider is accepting as new patients 
                        individuals who receive medical 
                        assistance under this title[.]; and
          (84) provide that the State is in compliance with the 
        drug review and utilization requirements under 
        subsection (nn)(1).
Notwithstanding paragraph (5), if on January 1, 1965, and on 
the date on which a State submits its plan for approval under 
this title, the State agency which administered or supervised 
the administration of the plan of such State approved under 
title X (or title XVI, insofar as it relates to the blind) was 
different from the State agency which administered or 
supervised the administration of the State plan approved under 
title I (or title XVI, insofar as it relates to the aged), the 
State agency which administered or supervised the 
administration of such plan approved under title X (or title 
XVI, insofar as it relates to the blind) may be designated to 
administer or supervise the administration of the portion of 
the State plan for medical assistance which relates to blind 
individuals and a different State agency may be established or 
designated to administer or supervise the administration of the 
rest of the State plan for medical assistance; and in such case 
the part of the plan which each such agency administers, or the 
administration of which each such agency supervises, shall be 
regarded as a separate plan for purposes of this title (except 
for purposes of paragraph (10)). The provisions of paragraphs 
(9)(A), (31), and (33) and of section 1903(i)(4) shall not 
apply to a religious nonmedical health care institution (as 
defined in section 1861(ss)(1)).
For purposes of paragraph (10) any individual who, for the 
month of August 1972, was eligible for or receiving aid or 
assistance under a State plan approved under title I, X, XIV, 
or XVI, or part A of title IV and who for such month was 
entitled to monthly insurance benefits under title II shall for 
purposes of this title only be deemed to be eligible for 
financial aid or assistance for any month thereafter if such 
individual would have been eligible for financial aid or 
assistance for such month had the increase in monthly insurance 
benefits under title II resulting from enactment of Public Law 
92-336 not been applicable to such individual.
The requirement of clause (A) of paragraph (37) with respect to 
a State plan may be waived by the Secretary if he finds that 
the State has exercised good faith in trying to meet such 
requirement. For purposes of this title, any child who meets 
the requirements of paragraph (1) or (2) of section 473(b) 
shall be deemed to be a dependent child as defined in section 
406 and shall be deemed to be a recipient of aid to families 
with dependent children under part A of title IV in the State 
where such child resides. Notwithstanding paragraph (10)(B) or 
any other provision of this subsection, a State plan shall 
provide medical assistance with respect to an alien who is not 
lawfully admitted for permanent residence or otherwise 
permanently residing in the United States under color of law 
only in accordance with section 1903(v).
  (b) The Secretary shall approve any plan which fulfills the 
conditions specified in subsection (a) of this section, except 
that he shall not approve any plan which imposes, as a 
condition of eligibility for medical assistance under the 
plan--
          (1) an age requirement of more than 65 years; or
          (2) any residence requirement which excludes any 
        individual who resides in the State, regardless of 
        whether or not the residence is maintained permanently 
        or at a fixed address; or
          (3) any citizenship requirement which excludes any 
        citizen of the United States.
  (c) Notwithstanding subsection (b), the Secretary shall not 
approve any State plan for medical assistance if the State 
requires individuals described in subsection (l)(1) to apply 
for assistance under the State program funded under part A of 
title IV as a condition of applying for or receiving medical 
assistance under this title.
  (d) If a State contracts with an entity which meets the 
requirements of section 1152, as determined by the Secretary, 
or a utilization and quality control peer review organization 
having a contract with the Secretary under part B of title XI 
for the performance of medical or utilization review functions 
(including quality review functions described in subsection 
(a)(30)(C)) required under this title of a State plan with 
respect to specific services or providers (or services or 
providers in a geographic area of the State), such requirements 
shall be deemed to be met for those services or providers (or 
services or providers in that area) by delegation to such an 
entity or organization under the contract of the State's 
authority to conduct such review activities if the contract 
provides for the performance of activities not inconsistent 
with part B of title XI and provides for such assurances of 
satisfactory performance by such an entity or organization as 
the Secretary may prescribe.
  (e)(1) Beginning April 1, 1990, for provisions relating to 
the extension of eligibility for medical assistance for certain 
families who have received aid pursuant to a State plan 
approved under part A of title IV and have earned income, see 
section 1925.
  (2)(A) In the case of an individual who is enrolled with a 
medicaid managed care organization (as defined in section 
1903(m)(1)(A)), with a primary care case manager (as defined in 
section 1905(t)), or with an eligible organization with a 
contract under section 1876 and who would (but for this 
paragraph) lose eligibility for benefits under this title 
before the end of the minimum enrollment period (defined in 
subparagraph (B)), the State plan may provide, notwithstanding 
any other provision of this title, that the individual shall be 
deemed to continue to be eligible for such benefits until the 
end of such minimum period, but, except for benefits furnished 
under section 1905(a)(4)(C), only with respect to such benefits 
provided to the individual as an enrollee of such organization 
or entity or by or through the case manager.
  (B) For purposes of subparagraph (A), the term ``minimum 
enrollment period'' means, with respect to an individual's 
enrollment with an organization or entity under a State plan, a 
period, established by the State, of not more than six months 
beginning on the date the individual's enrollment with the 
organization or entity becomes effective.
  (3) At the option of the State, any individual who--
          (A) is 18 years of age or younger and qualifies as a 
        disabled individual under section 1614(a);
          (B) with respect to whom there has been a 
        determination by the State that--
                  (i) the individual requires a level of care 
                provided in a hospital, nursing facility, or 
                intermediate care facility for the mentally 
                retarded,
                  (ii) it is appropriate to provide such care 
                for the individual outside such an institution, 
                and
                  (iii) the estimated amount which would be 
                expended for medical assistance for the 
                individual for such care outside an institution 
                is not greater than the estimated amount which 
                would otherwise be expended for medical 
                assistance for the individual within an 
                appropriate institution; and
          (C) if the individual were in a medical institution, 
        would be eligible for medical assistance under the 
        State plan under this title,
        shall be deemed, for purposes of this title only, to be 
        an individual with respect to whom a supplemental 
        security income payment, or State supplemental payment, 
        respectively, is being paid under title XVI.
  (4) A child born to a woman eligible for and receiving 
medical assistance under a State plan on the date of the 
child's birth shall be deemed to have applied for medical 
assistance and to have been found eligible for such assistance 
under such plan on the date of such birth and to remain 
eligible for such assistance for a period of one year. During 
the period in which a child is deemed under the preceding 
sentence to be eligible for medical assistance, the 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). 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.
  (5) A woman who, while pregnant, is eligible for, has applied 
for, and has received medical assistance under the State plan, 
shall continue to be eligible under the plan, as though she 
were pregnant, for all pregnancy-related and postpartum medical 
assistance under the plan, through the end of the month in 
which the 60-day period (beginning on the last day of her 
pregnancy) ends.
  (6) In the case of a pregnant woman described in subsection 
(a)(10) who, because of a change in income of the family of 
which she is a member, would not otherwise continue to be 
described in such subsection, the woman shall be deemed to 
continue to be an individual described in subsection 
(a)(10)(A)(i)(IV) and subsection (l)(1)(A) without regard to 
such change of income through the end of the month in which the 
60-day period (beginning on the last day of her pregnancy) 
ends. The preceding sentence shall not apply in the case of a 
woman who has been provided ambulatory prenatal care pursuant 
to section 1920 during a presumptive eligibility period and is 
then, in accordance with such section, determined to be 
ineligible for medical assistance under the State plan.
  (7) In the case of an infant or child described in 
subparagraph (B), (C), or (D) of subsection (l)(1) or paragraph 
(2) of section 1905(n)--
          (A) who is receiving inpatient services for which 
        medical assistance is provided on the date the infant 
        or child attains the maximum age with respect to which 
        coverage is provided under the State plan for such 
        individuals, and
          (B) who, but for attaining such age, would remain 
        eligible for medical assistance under such subsection,
the infant or child shall continue to be treated as an 
individual described in such respective provision until the end 
of the stay for which the inpatient services are furnished.
  (8) If an individual is determined to be a qualified medicare 
beneficiary (as defined in section 1905(p)(1)), such 
determination shall apply to services furnished after the end 
of the month in which the determination first occurs. For 
purposes of payment to a State under section 1903(a), such 
determination shall be considered to be valid for an individual 
for a period of 12 months, except that a State may provide for 
such determinations more frequently, but not more frequently 
than once every 6 months for an individual.
  (9)(A) At the option of the State, the plan may include as 
medical assistance respiratory care services for any individual 
who--
          (i) is medically dependent on a ventilator for life 
        support at least six hours per day;
          (ii) has been so dependent for at least 30 
        consecutive days (or the maximum number of days 
        authorized under the State plan, whichever is less) as 
        an inpatient;
          (iii) but for the availability of respiratory care 
        services, would require respiratory care as an 
        inpatient in a hospital, nursing facility, or 
        intermediate care facility for the mentally retarded 
        and would be eligible to have payment made for such 
        inpatient care under the State plan;
          (iv) has adequate social support services to be cared 
        for at home; and
          (v) wishes to be cared for at home.
  (B) The requirements of subparagraph (A)(ii) may be satisfied 
by a continuous stay in one or more hospitals, nursing 
facilities, or intermediate care facilities for the mentally 
retarded.
  (C) For purposes of this paragraph, respiratory care services 
means services provided on a part-time basis in the home of the 
individual by a respiratory therapist or other health care 
professional trained in respiratory therapy (as determined by 
the State), payment for which is not otherwise included within 
other items and services furnished to such individual as 
medical assistance under the plan.
  (10)(A) The fact that an individual, child, or pregnant woman 
may be denied aid under part A of title IV pursuant to section 
402(a)(43) shall not be construed as denying (or permitting a 
State to deny) medical assistance under this title to such 
individual, child, or woman who is eligible for assistance 
under this title on a basis other than the receipt of aid under 
such part.
  (B) If an individual, child, or pregnant woman is receiving 
aid under part A of title IV and such aid is terminated 
pursuant to section 402(a)(43), the State may not discontinue 
medical assistance under this title for the individual, child, 
or woman until the State has determined that the individual, 
child, or woman is not eligible for assistance under this title 
on a basis other than the receipt of aid under such part.
  (11)(A) In the case of an individual who is enrolled with a 
group health plan under section 1906 and who would (but for 
this paragraph) lose eligibility for benefits under this title 
before the end of the minimum enrollment period (defined in 
subparagraph (B)), the State plan may provide, notwithstanding 
any other provision of this title, that the individual shall be 
deemed to continue to be eligible for such benefits until the 
end of such minimum period, but only with respect to such 
benefits provided to the individual as an enrollee of such 
plan.
  (B) For purposes of subparagraph (A), the term ``minimum 
enrollment period'' means, with respect to an individual's 
enrollment with a group health plan, a period established by 
the State, of not more than 6 months beginning on the date the 
individual's enrollment under the plan becomes effective.
  (12) At the option of the State, the plan may provide that an 
individual who is under an age specified by the State (not to 
exceed 19 years of age) and who is determined to be eligible 
for benefits under a State plan approved under this title under 
subsection (a)(10)(A) shall remain eligible for those benefits 
until the earlier of--
          (A) the end of a period (not to exceed 12 months) 
        following the determination; or
          (B) the time that the individual exceeds that age.
  (13) Express Lane Option.--
          (A) In general.--
                  (i) Option to use a finding from an express 
                lane agency.--At the option of the State, the 
                State plan may provide that in determining 
                eligibility under this title for a child (as 
                defined in subparagraph (G)), the State may 
                rely on a finding made within a reasonable 
                period (as determined by the State) from an 
                Express Lane agency (as defined in subparagraph 
                (F)) when it determines whether a child 
                satisfies one or more components of eligibility 
                for medical assistance under this title. The 
                State may rely on a finding from an Express 
                Lane agency notwithstanding sections 
                1902(a)(46)(B) and 1137(d) or any differences 
                in budget unit, disregard, deeming or other 
                methodology, if the following requirements are 
                met:
                          (I) Prohibition on determining 
                        children ineligible for coverage.--If a 
                        finding from an Express Lane agency 
                        would result in a determination that a 
                        child does not satisfy an eligibility 
                        requirement for medical assistance 
                        under this title and for child health 
                        assistance under title XXI, the State 
                        shall determine eligibility for 
                        assistance using its regular 
                        procedures.
                          (II) Notice requirement.--For any 
                        child who is found eligible for medical 
                        assistance under the State plan under 
                        this title or child health assistance 
                        under title XXI and who is subject to 
                        premiums based on an Express Lane 
                        agency's finding of such child's income 
                        level, the State shall provide notice 
                        that the child may qualify for lower 
                        premium payments if evaluated by the 
                        State using its regular policies and of 
                        the procedures for requesting such an 
                        evaluation.
                          (III) Compliance with screen and 
                        enroll requirement.--The State shall 
                        satisfy the requirements under 
                        subparagraphs (A) and (B) of section 
                        2102(b)(3) (relating to screen and 
                        enroll) before enrolling a child in 
                        child health assistance under title 
                        XXI. At its option, the State may 
                        fulfill such requirements in accordance 
                        with either option provided under 
                        subparagraph (C) of this paragraph.
                          (IV) Verification of citizenship or 
                        nationality status.--The State shall 
                        satisfy the requirements of section 
                        1902(a)(46)(B) or 2105(c)(9), as 
                        applicable for verifications of 
                        citizenship or nationality status.
                          (V) Coding.--The State meets the 
                        requirements of subparagraph (E).
                  (ii) Option to apply to renewals and 
                redeterminations.--The State may apply the 
                provisions of this paragraph when conducting 
                initial determinations of eligibility, 
                redeterminations of eligibility, or both, as 
                described in the State plan.
          (B) Rules of construction.--Nothing in this paragraph 
        shall be construed--
                  (i) to limit or prohibit a State from taking 
                any actions otherwise permitted under this 
                title or title XXI in determining eligibility 
                for or enrolling children into medical 
                assistance under this title or child health 
                assistance under title XXI; or
                  (ii) to modify the limitations in section 
                1902(a)(5) concerning the agencies that may 
                make a determination of eligibility for medical 
                assistance under this title.
          (C) Options for satisfying the screen and enroll 
        requirement.--
                  (i) In general.--With respect to a child 
                whose eligibility for medical assistance under 
                this title or for child health assistance under 
                title XXI has been evaluated by a State agency 
                using an income finding from an Express Lane 
                agency, a State may carry out its duties under 
                subparagraphs (A) and (B) of section 2102(b)(3) 
                (relating to screen and enroll) in accordance 
                with either clause (ii) or clause (iii).
                  (ii) Establishing a screening threshold.--
                          (I) In general.--Under this clause, 
                        the State establishes a screening 
                        threshold set as a percentage of the 
                        Federal poverty level that exceeds the 
                        highest income threshold applicable 
                        under this title to the child by a 
                        minimum of 30 percentage points or, at 
                        State option, a higher number of 
                        percentage points that reflects the 
                        value (as determined by the State and 
                        described in the State plan) of any 
                        differences between income 
                        methodologies used by the program 
                        administered by the Express Lane agency 
                        and the methodologies used by the State 
                        in determining eligibility for medical 
                        assistance under this title.
                          (II) Children with income not above 
                        threshold.--If the income of a child 
                        does not exceed the screening 
                        threshold, the child is deemed to 
                        satisfy the income eligibility criteria 
                        for medical assistance under this title 
                        regardless of whether such child would 
                        otherwise satisfy such criteria.
                          (III) Children with income above 
                        threshold.--If the income of a child 
                        exceeds the screening threshold, the 
                        child shall be considered to have an 
                        income above the Medicaid applicable 
                        income level described in section 
                        2110(b)(4) and to satisfy the 
                        requirement under section 2110(b)(1)(C) 
                        (relating to the requirement that CHIP 
                        matching funds be used only for 
                        children not eligible for Medicaid). If 
                        such a child is enrolled in child 
                        health assistance under title XXI, the 
                        State shall provide the parent, 
                        guardian, or custodial relative with 
                        the following:
                                  (aa) Notice that the child 
                                may be eligible to receive 
                                medical assistance under the 
                                State plan under this title if 
                                evaluated for such assistance 
                                under the State's regular 
                                procedures and notice of the 
                                process through which a parent, 
                                guardian, or custodial relative 
                                can request that the State 
                                evaluate the child's 
                                eligibility for medical 
                                assistance under this title 
                                using such regular procedures.
                                  (bb) A description of 
                                differences between the medical 
                                assistance provided under this 
                                title and child health 
                                assistance under title XXI, 
                                including differences in cost-
                                sharing requirements and 
                                covered benefits.
                  (iii) Temporary enrollment in chip pending 
                screen and enroll.--
                          (I) In general.--Under this clause, a 
                        State enrolls a child in child health 
                        assistance under title XXI for a 
                        temporary period if the child appears 
                        eligible for such assistance based on 
                        an income finding by an Express Lane 
                        agency.
                          (II) Determination of eligibility.--
                        During such temporary enrollment 
                        period, the State shall determine the 
                        child's eligibility for child health 
                        assistance under title XXI or for 
                        medical assistance under this title in 
                        accordance with this clause.
                          (III) Prompt follow up.--In making 
                        such a determination, the State shall 
                        take prompt action to determine whether 
                        the child should be enrolled in medical 
                        assistance under this title or child 
                        health assistance under title XXI 
                        pursuant to subparagraphs (A) and (B) 
                        of section 2102(b)(3) (relating to 
                        screen and enroll).
                          (IV) Requirement for simplified 
                        determination.--In making such a 
                        determination, the State shall use 
                        procedures that, to the maximum 
                        feasible extent, reduce the burden 
                        imposed on the individual of such 
                        determination. Such procedures may not 
                        require the child's parent, guardian, 
                        or custodial relative to provide or 
                        verify information that already has 
                        been provided to the State agency by an 
                        Express Lane agency or another source 
                        of information unless the State agency 
                        has reason to believe the information 
                        is erroneous.
                          (V) Availability of chip matching 
                        funds during temporary enrollment 
                        period.--Medical assistance for items 
                        and services that are provided to a 
                        child enrolled in title XXI during a 
                        temporary enrollment period under this 
                        clause shall be treated as child health 
                        assistance under such title.
          (D) Option for automatic enrollment.--
                  (i) In general.--The State may initiate and 
                determine eligibility for medical assistance 
                under the State Medicaid plan or for child 
                health assistance under the State CHIP plan 
                without a program application from, or on 
                behalf of, the child based on data obtained 
                from sources other than the child (or the 
                child's family), but a child can only be 
                automatically enrolled in the State Medicaid 
                plan or the State CHIP plan if the child or the 
                family affirmatively consents to being enrolled 
                through affirmation in writing, by telephone, 
                orally, through electronic signature, or 
                through any other means specified by the 
                Secretary or by 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 
                and indian tribes and tribal organizations.--
                Such term includes the following:
                          (I) A public agency that determines 
                        eligibility for assistance under any of 
                        the following:
                                  (aa) The temporary assistance 
                                for needy families program 
                                funded under part A of title 
                                IV.
                                  (bb) A State program funded 
                                under part D of title IV.
                                  (cc) The State Medicaid plan.
                                  (dd) The State CHIP plan.
                                  (ee) The Food and Nutrition 
                                Act of 2008 (7 U.S.C. 2011 et 
                                seq.).
                                  (ff) The Head Start Act (42 
                                U.S.C. 9801 et seq.).
                                  (gg) The Richard B. Russell 
                                National School Lunch Act (42 
                                U.S.C. 1751 et seq.).
                                  (hh) The Child Nutrition Act 
                                of 1966 (42 U.S.C. 1771 et 
                                seq.).
                                  (ii) The Child Care and 
                                Development Block Grant Act of 
                                1990 (42 U.S.C. 9858 et seq.).
                                  (jj) The Stewart B. McKinney 
                                Homeless Assistance Act (42 
                                U.S.C. 11301 et seq.).
                                  (kk) The United States 
                                Housing Act of 1937 (42 U.S.C. 
                                1437 et seq.).
                                  (ll) The Native American 
                                Housing Assistance and Self-
                                Determination Act of 1996 (25 
                                U.S.C. 4101 et seq.).
                          (II) A State-specified governmental 
                        agency that has fiscal liability or 
                        legal responsibility for the accuracy 
                        of the eligibility determination 
                        findings relied on by the State.
                          (III) A public agency that is subject 
                        to an interagency agreement limiting 
                        the disclosure and use of the 
                        information disclosed for purposes of 
                        determining eligibility under the State 
                        Medicaid plan or the State CHIP plan.
                          (IV) The Indian Health Service, an 
                        Indian Tribe, Tribal Organization, or 
                        Urban Indian Organization (as defined 
                        in section 1139(c)).
                  (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) State option to rely on state income tax data or 
        return.--At the option of the State, a finding from an 
        Express Lane agency may include gross income or 
        adjusted gross income shown by State income tax records 
        or returns.
          (I) Application.--This paragraph shall not apply with 
        respect to eligibility determinations made after 
        September 30, 2027.
          (14) Income determined using modified adjusted gross 
        income.--
                  (A) In general.--Notwithstanding subsection 
                (r) or any other provision of this title, 
                except as provided in subparagraph (D), for 
                purposes of determining income eligibility for 
                medical assistance under the State plan or 
                under any waiver of such plan and for any other 
                purpose applicable under the plan or waiver for 
                which a determination of income is required, 
                including with respect to the imposition of 
                premiums and cost-sharing, a State shall use 
                the modified adjusted gross income of an 
                individual and, in the case of an individual in 
                a family greater than 1, the household income 
                of such family. A State shall establish income 
                eligibility thresholds for populations to be 
                eligible for medical assistance under the State 
                plan or a waiver of the plan using modified 
                adjusted gross income and household income that 
                are not less than the effective income 
                eligibility levels that applied under the State 
                plan or waiver on the date of enactment of the 
                Patient Protection and Affordable Care Act. For 
                purposes of complying with the maintenance of 
                effort requirements under subsection (gg) 
                during the transition to modified adjusted 
                gross income and household income, a State 
                shall, working with the Secretary, establish an 
                equivalent income test that ensures individuals 
                eligible for medical assistance under the State 
                plan or under a waiver of the plan on the date 
                of enactment of the Patient Protection and 
                Affordable Care Act, do not lose coverage under 
                the State plan or under a waiver of the plan. 
                The Secretary may waive such provisions of this 
                title and title XXI as are necessary to ensure 
                that States establish income and eligibility 
                determination systems that protect 
                beneficiaries.
                  (B) No income or expense disregards.--Subject 
                to subparagraph (I), no type of expense, block, 
                or other income disregard shall be applied by a 
                State to determine income eligibility for 
                medical assistance under the State plan or 
                under any waiver of such plan or for any other 
                purpose applicable under the plan or waiver for 
                which a determination of income is required.
                  (C) No assets test.--A State shall not apply 
                any assets or resources test for purposes of 
                determining eligibility for medical assistance 
                under the State plan or under a waiver of the 
                plan.
                  (D) Exceptions.--
                          (i) Individuals eligible because of 
                        other aid or assistance, elderly 
                        individuals, medically needy 
                        individuals, and individuals eligible 
                        for medicare cost-sharing.--
                        Subparagraphs (A), (B), and (C) shall 
                        not apply to the determination of 
                        eligibility under the State plan or 
                        under a waiver for medical assistance 
                        for the following:
                                  (I) Individuals who are 
                                eligible for medical assistance 
                                under the State plan or under a 
                                waiver of the plan on a basis 
                                that does not require a 
                                determination of income by the 
                                State agency administering the 
                                State plan or waiver, including 
                                as a result of eligibility for, 
                                or receipt of, other Federal or 
                                State aid or assistance, 
                                individuals who are eligible on 
                                the basis of receiving (or 
                                being treated as if receiving) 
                                supplemental security income 
                                benefits under title XVI, and 
                                individuals who are eligible as 
                                a result of being or being 
                                deemed to be a child in foster 
                                care under the responsibility 
                                of the State.
                                  (II) Individuals who have 
                                attained age 65.
                                  (III) Individuals who qualify 
                                for medical assistance under 
                                the State plan or under any 
                                waiver of such plan on the 
                                basis of being blind or 
                                disabled (or being treated as 
                                being blind or disabled) 
                                without regard to whether the 
                                individual is eligible for 
                                supplemental security income 
                                benefits under title XVI on the 
                                basis of being blind or 
                                disabled and including an 
                                individual who is eligible for 
                                medical assistance on the basis 
                                of section 1902(e)(3).
                                  (IV) Individuals described in 
                                subsection (a)(10)(C).
                                  (V) Individuals described in 
                                any clause of subsection 
                                (a)(10)(E).
                          (ii) Express lane agency findings.--
                        In the case of a State that elects the 
                        Express Lane option under paragraph 
                        (13), notwithstanding subparagraphs 
                        (A), (B), and (C), the State may rely 
                        on a finding made by an Express Lane 
                        agency in accordance with that 
                        paragraph relating to the income of an 
                        individual for purposes of determining 
                        the individual's eligibility for 
                        medical assistance under the State plan 
                        or under a waiver of the plan.
                          (iii) Medicare prescription drug 
                        subsidies determinations.--
                        Subparagraphs (A), (B), and (C) shall 
                        not apply to any determinations of 
                        eligibility for premium and cost-
                        sharing subsidies under and in 
                        accordance with section 1860D-14 made 
                        by the State pursuant to section 
                        1935(a)(2).
                          (iv) Long-term care.--Subparagraphs 
                        (A), (B), and (C) shall not apply to 
                        any determinations of eligibility of 
                        individuals for purposes of medical 
                        assistance for nursing facility 
                        services, a level of care in any 
                        institution equivalent to that of 
                        nursing facility services, home or 
                        community-based services furnished 
                        under a waiver or State plan amendment 
                        under section 1915 or a waiver under 
                        section 1115, and services described in 
                        section 1917(c)(1)(C)(ii).
                          (v) Grandfather of current enrollees 
                        until date of next regular 
                        redetermination.--An individual who, on 
                        January 1, 2014, is enrolled in the 
                        State plan or under a waiver of the 
                        plan and who would be determined 
                        ineligible for medical assistance 
                        solely because of the application of 
                        the modified adjusted gross income or 
                        household income standard described in 
                        subparagraph (A), shall remain eligible 
                        for medical assistance under the State 
                        plan or waiver (and subject to the same 
                        premiums and cost-sharing as applied to 
                        the individual on that date) through 
                        March 31, 2014, or the date on which 
                        the individual's next regularly 
                        scheduled redetermination of 
                        eligibility is to occur, whichever is 
                        later.
                  (E) Transition planning and oversight.--Each 
                State shall submit to the Secretary for the 
                Secretary's approval the income eligibility 
                thresholds proposed to be established using 
                modified adjusted gross income and household 
                income, the methodologies and procedures to be 
                used to determine income eligibility using 
                modified adjusted gross income and household 
                income and, if applicable, a State plan 
                amendment establishing an optional eligibility 
                category under subsection (a)(10)(A)(ii)(XX). 
                To the extent practicable, the State shall use 
                the same methodologies and procedures for 
                purposes of making such determinations as the 
                State used on the date of enactment of the 
                Patient Protection and Affordable Care Act. The 
                Secretary shall ensure that the income 
                eligibility thresholds proposed to be 
                established using modified adjusted gross 
                income and household income, including under 
                the eligibility category established under 
                subsection (a)(10)(A)(ii)(XX), and the 
                methodologies and procedures proposed to be 
                used to determine income eligibility, will not 
                result in children who would have been eligible 
                for medical assistance under the State plan or 
                under a waiver of the plan on the date of 
                enactment of the Patient Protection and 
                Affordable Care Act no longer being eligible 
                for such assistance.
                  (F) Limitation on secretarial authority.--The 
                Secretary shall not waive compliance with the 
                requirements of this paragraph except to the 
                extent necessary to permit a State to 
                coordinate eligibility requirements for dual 
                eligible individuals (as defined in section 
                1915(h)(2)(B)) under the State plan or under a 
                waiver of the plan and under title XVIII and 
                individuals who require the level of care 
                provided in a hospital, a nursing facility, or 
                an intermediate care facility for the mentally 
                retarded.
                  (G) Definitions of modified adjusted gross 
                income and household income.--In this 
                paragraph, the terms ``modified adjusted gross 
                income'' and ``household income'' have the 
                meanings given such terms in section 36B(d)(2) 
                of the Internal Revenue Code of 1986.
                  (H) Continued application of medicaid rules 
                regarding point-in-time income and sources of 
                income.--The requirement under this paragraph 
                for States to use modified adjusted gross 
                income and household income to determine income 
                eligibility for medical assistance under the 
                State plan or under any waiver of such plan and 
                for any other purpose applicable under the plan 
                or waiver for which a determination of income 
                is required shall not be construed as affecting 
                or limiting the application of--
                          (i) the requirement under this title 
                        and under the State plan or a waiver of 
                        the plan to determine an individual's 
                        income as of the point in time at which 
                        an application for medical assistance 
                        under the State plan or a waiver of the 
                        plan is processed; or
                          (ii) any rules established under this 
                        title or under the State plan or a 
                        waiver of the plan regarding sources of 
                        countable income.
                  (I) Treatment of portion of modified adjusted 
                gross income.--For purposes of determining the 
                income eligibility of an individual for medical 
                assistance whose eligibility is determined 
                based on the application of modified adjusted 
                gross income under subparagraph (A), the State 
                shall--
                          (i) determine the dollar equivalent 
                        of the difference between the upper 
                        income limit on eligibility for such an 
                        individual (expressed as a percentage 
                        of the poverty line) and such upper 
                        income limit increased by 5 percentage 
                        points; and
                          (ii) notwithstanding the requirement 
                        in subparagraph (A) with respect to use 
                        of modified adjusted gross income, 
                        utilize as the applicable income of 
                        such individual, in determining such 
                        income eligibility, an amount equal to 
                        the modified adjusted gross income 
                        applicable to such individual reduced 
                        by such dollar equivalent amount.
                  (J) Exclusion of parent mentor compensation 
                from income determination.--Any nominal amount 
                received by an individual as compensation, 
                including a stipend, for participation as a 
                parent mentor (as defined in paragraph (5) of 
                section 2113(f)) in an activity or program 
                funded through a grant under such section shall 
                be disregarded for purposes of determining the 
                income eligibility of such individual for 
                medical assistance under the State plan or any 
                waiver of such plan.
                  (K) Treatment of certain lottery winnings and 
                income received as a lump sum.--
                          (i) In general.--In the case of an 
                        individual who is the recipient of 
                        qualified lottery winnings (pursuant to 
                        lotteries occurring on or after January 
                        1, 2018) or qualified lump sum income 
                        (received on or after such date) and 
                        whose eligibility for medical 
                        assistance is determined based on the 
                        application of modified adjusted gross 
                        income under subparagraph (A), a State 
                        shall, in determining such eligibility, 
                        include such winnings or income (as 
                        applicable) as income received--
                                  (I) in the month in which 
                                such winnings or income (as 
                                applicable) is received if the 
                                amount of such winnings or 
                                income is less than $80,000;
                                  (II) over a period of 2 
                                months if the amount of such 
                                winnings or income (as 
                                applicable) is greater than or 
                                equal to $80,000 but less than 
                                $90,000;
                                  (III) over a period of 3 
                                months if the amount of such 
                                winnings or income (as 
                                applicable) is greater than or 
                                equal to $90,000 but less than 
                                $100,000; and
                                  (IV) over a period of 3 
                                months plus 1 additional month 
                                for each increment of $10,000 
                                of such winnings or income (as 
                                applicable) received, not to 
                                exceed a period of 120 months 
                                (for winnings or income of 
                                $1,260,000 or more), if the 
                                amount of such winnings or 
                                income is greater than or equal 
                                to $100,000.
                          (ii) Counting in equal 
                        installments.--For purposes of 
                        subclauses (II), (III), and (IV) of 
                        clause (i), winnings or income to which 
                        such subclause applies shall be counted 
                        in equal monthly installments over the 
                        period of months specified under such 
                        subclause.
                          (iii) Hardship exemption.--An 
                        individual whose income, by application 
                        of clause (i), exceeds the applicable 
                        eligibility threshold established by 
                        the State, shall continue to be 
                        eligible for medical assistance to the 
                        extent that the State determines, under 
                        procedures established by the State (in 
                        accordance with standards specified by 
                        the Secretary), that the denial of 
                        eligibility of the individual would 
                        cause an undue medical or financial 
                        hardship as determined on the basis of 
                        criteria established by the Secretary.
                          (iv) Notifications and assistance 
                        required in case of loss of 
                        eligibility.--A State shall, with 
                        respect to an individual who loses 
                        eligibility for medical assistance 
                        under the State plan (or a waiver of 
                        such plan) by reason of clause (i)--
                                  (I) before the date on which 
                                the individual loses such 
                                eligibility, inform the 
                                individual--
                                          (aa) of the 
                                        individual's 
                                        opportunity to enroll 
                                        in a qualified health 
                                        plan offered through an 
                                        Exchange established 
                                        under title I of the 
                                        Patient Protection and 
                                        Affordable Care Act 
                                        during the special 
                                        enrollment period 
                                        specified in section 
                                        9801(f)(3) of the 
                                        Internal Revenue Code 
                                        of 1986 (relating to 
                                        loss of Medicaid or 
                                        CHIP coverage); and
                                          (bb) of the date on 
                                        which the individual 
                                        would no longer be 
                                        considered ineligible 
                                        by reason of clause (i) 
                                        to receive medical 
                                        assistance under the 
                                        State plan or under any 
                                        waiver of such plan and 
                                        be eligible to reapply 
                                        to receive such medical 
                                        assistance; and
                                  (II) provide technical 
                                assistance to the individual 
                                seeking to enroll in such a 
                                qualified health plan.
                          (v) Qualified lottery winnings 
                        defined.--In this subparagraph, the 
                        term ``qualified lottery winnings'' 
                        means winnings from a sweepstakes, 
                        lottery, or pool described in paragraph 
                        (3) of section 4402 of the Internal 
                        Revenue Code of 1986 or a lottery 
                        operated by a multistate or 
                        multijurisdictional lottery 
                        association, including amounts awarded 
                        as a lump sum payment.
                          (vi) Qualified lump sum income 
                        defined.--In this subparagraph, the 
                        term ``qualified lump sum income'' 
                        means income that is received as a lump 
                        sum from monetary winnings from 
                        gambling (as defined by the Secretary 
                        and including gambling activities 
                        described in section 1955(b)(4) of 
                        title 18, United States Code).
          (15) Exclusion of compensation for participation in a 
        clinical trial for testing of treatments for a rare 
        disease or condition.--The first $2,000 received by an 
        individual (who has attained 19 years of age) as 
        compensation for participation in a clinical trial 
        meeting the requirements of section 1612(b)(26) shall 
        be disregarded for purposes of determining the income 
        eligibility of such individual for medical assistance 
        under the State plan or any waiver of such plan.
  (f) Notwithstanding any other provision of this title, except 
as provided in subsection (e) and section 1619(b)(3) and 
section 1924, except with respect to qualified disabled and 
working individuals (described in section 1905(s)), and except 
with respect to qualified medicare beneficiaries, qualified 
severely impaired individuals, and individuals described in 
subsection (m)(1), no State not eligible to participate in the 
State plan program established under title XVI shall be 
required to provide medical assistance to any aged, blind, or 
disabled individual (within the meaning of title XVI) for any 
month unless such State would be (or would have been) required 
to provide medical assistance to such individual for such month 
had its plan for medical assistance approved under this title 
and in effect on January 1, 1972, been in effect in such month, 
except that for this purpose any such individual shall be 
deemed eligible for medical assistance under such State plan if 
(in addition to meeting such other requirements as are or may 
be imposed under the State plan) the income of any such 
individual as determined in accordance with section 1903(f) 
(after deducting any supplemental security income payment and 
State supplementary payment made with respect to such 
individual, and incurred expenses for medical care as 
recognized under State law regardless of whether such expenses 
are reimbursed under another public program of the State or 
political subdivision thereof) is not in excess of the standard 
for medical assistance established under the State plan as in 
effect on January 1, 1972. In States which provide medical 
assistance to individuals pursuant to paragraph (10)(C) of 
subsection (a) of this section, an individual who is eligible 
for medical assistance by reason of the requirements of this 
section concerning the deduction of incurred medical expenses 
from income shall be considered an individual eligible for 
medical assistance under paragraph (10)(A) of that subsection 
if that individual is, or is eligible to be (1) an individual 
with respect to whom there is payable a State supplementary 
payment on the basis of which similarly situated individuals 
are eligible to receive medical assistance equal in amount, 
duration, and scope to that provided to individuals eligible 
under paragraph (10)(A), or (2) an eligible individual or 
eligible spouse, as defined in title XVI, with respect to whom 
supplemental security income benefits are payable; otherwise 
that individual shall be considered to be an individual 
eligible for medical assistance under paragraph (10)(C) of that 
subsection. In States which do not provide medical assistance 
to individuals pursuant to paragraph (10)(C) of that 
subsection, an individual who is eligible for medical 
assistance by reason of the requirements of this section 
concerning the deduction of incurred medical expenses from 
income shall be considered an individual eligible for medical 
assistance under paragraph (10)(A) of that subsection.
  (g) In addition to any other sanction available to a State, a 
State may provide for a reduction of any payment amount 
otherwise due with respect to a person who furnishes services 
under the plan in an amount equal to up to three times the 
amount of any payment sought to be collected by that person in 
violation of subsection (a)(25)(C).
  (h) Nothing in this title (including subsections (a)(13) and 
(a)(30) of this section) shall be construed as authorizing the 
Secretary to limit the amount of payment that may be made under 
a plan under this title for home and community care.
  (i)(1) In addition to any other authority under State law, 
where a State determines that a intermediate care facility for 
the mentally retarded which is certified for participation 
under its plan no longer substantially meets the requirements 
for such a facility under this title and further determines 
that the facility's deficiencies--
          (A) immediately jeopardize the health and safety of 
        its patients, the State shall provide for the 
        termination of the facility's certification for 
        participation under the plan and may provide, or
          (B) do not immediately jeopardize the health and 
        safety of its patients, the State may, in lieu of 
        providing for terminating the facility's certification 
        for participation under the plan, establish alternative 
        remedies if the State demonstrates to the Secretary's 
        satisfaction that the alternative remedies are 
        effective in deterring noncompliance and correcting 
        deficiencies, and may provide
that no payment will be made under the State plan with respect 
to any individual admitted to such facility after a date 
specified by the State.
  (2) The State shall not make such a decision with respect to 
a facility until the facility has had a reasonable opportunity, 
following the initial determination that it no longer 
substantially meets the requirements for such a facility under 
this title, to correct its deficiencies, and, following this 
period, has been given reasonable notice and opportunity for a 
hearing.
  (3) The State's decision to deny payment may be made 
effective only after such notice to the public and to the 
facility as may be provided for by the State, and its 
effectiveness shall terminate (A) when the State finds that the 
facility is in substantial compliance (or is making good faith 
efforts to achieve substantial compliance) with the 
requirements for such a facility under this title, or (B) in 
the case described in paragraph (1)(B), with the end of the 
eleventh month following the month such decision is made 
effective, whichever occurs first. If a facility to which 
clause (B) of the previous sentence applies still fails to 
substantially meet the provisions of the respective section on 
the date specified in such clause, the State shall terminate 
such facility's certification for participation under the plan 
effective with the first day of the first month following the 
month specified in such clause.
  (j) Notwithstanding any other requirement of this title, the 
Secretary may waive or modify any requirement of this title 
with respect to the medical assistance program in American 
Samoa and the Northern Mariana Islands, other than a waiver of 
the Federal medical assistance percentage, the limitation in 
section 1108(f), or the requirement that payment may be made 
for medical assistance only with respect to amounts expended by 
American Samoa or the Northern Mariana Islands for care and 
services described in a numbered paragraph of section 1905(a).
  (k)(1) The medical assistance provided to an individual 
described in subclause (VIII) of subsection (a)(10)(A)(i) shall 
consist of benchmark coverage described in section 1937(b)(1) 
or benchmark equivalent coverage described in section 
1937(b)(2). Such medical assistance shall be provided subject 
to the requirements of section 1937, without regard to whether 
a State otherwise has elected the option to provide medical 
assistance through coverage under that section, unless an 
individual described in subclause (VIII) of subsection 
(a)(10)(A)(i) is also an individual for whom, under 
subparagraph (B) of section 1937(a)(2), the State may not 
require enrollment in benchmark coverage described in 
subsection (b)(1) of section 1937 or benchmark equivalent 
coverage described in subsection (b)(2) of that section.
  (2) Beginning with the first day of any fiscal year quarter 
that begins on or after April 1, 2010, and before January 1, 
2014, a State may elect through a State plan amendment to 
provide medical assistance to individuals who would be 
described in subclause (VIII) of subsection (a)(10)(A)(i) if 
that subclause were effective before January 1, 2014. A State 
may elect to phase-in the extension of eligibility for medical 
assistance to such individuals based on income, so long as the 
State does not extend such eligibility to individuals described 
in such subclause with higher income before making individuals 
described in such subclause with lower income eligible for 
medical assistance.
  (3) If an individual described in subclause (VIII) of 
subsection (a)(10)(A)(i) is the parent of a child who is under 
19 years of age (or such higher age as the State may have 
elected) who is eligible for medical assistance under the State 
plan or under a waiver of such plan (under that subclause or 
under a State plan amendment under paragraph (2), the 
individual may not be enrolled under the State plan unless the 
individual's child is enrolled under the State plan or under a 
waiver of the plan or is enrolled in other health insurance 
coverage. For purposes of the preceding sentence, the term 
``parent'' includes an individual treated as a caretaker 
relative for purposes of carrying out section 1931.
  (l)(1) Individuals described in this paragraph are--
          (A) women during pregnancy (and during the 60-day 
        period beginning on the last day of the pregnancy),
          (B) infants under one year of age,
          (C) children who have attained one year of age but 
        have not attained 6 years of age, and
          (D) children born after September 30, 1983 (or, at 
        the option of a State, after any earlier date), who 
        have attained 6 years of age but have not attained 19 
        years of age,
who are not described in any of subclauses (I) through (III) of 
subsection (a)(10)(A)(i) and whose family income does not 
exceed the income level established by the State under 
paragraph (2) for a family size equal to the size of the 
family, including the woman, infant, or child.
  (2)(A)(i) For purposes of paragraph (1) with respect to 
individuals described in subparagraph (A) or (B) of that 
paragraph, the State shall establish an income level which is a 
percentage (not less than the percentage provided under clause 
(ii) and not more than 185 percent) of the income official 
poverty line (as defined by the Office of Management and 
Budget, and revised annually in accordance with section 673(2) 
of the Omnibus Budget Reconciliation Act of 1981) applicable to 
a family of the size involved.
  (ii) The percentage provided under this clause, with respect 
to eligibility for medical assistance on or after--
          (I) July 1, 1989, is 75 percent, or, if greater, the 
        percentage provided under clause (iii), and
          (II) April 1, 1990, 133 percent, or, if greater, the 
        percentage provided under clause (iv).
  (iii) In the case of a State which, as of the date of the 
enactment of this clause, has elected to provide, and provides, 
medical assistance to individuals described in this subsection 
or has enacted legislation authorizing, or appropriating funds, 
to provide such assistance to such individuals before July 1, 
1989, the percentage provided under clause (ii)(I) shall not be 
less than--
          (I) the percentage specified by the State in an 
        amendment to its State plan (whether approved or not) 
        as of the date of the enactment of this clause, or
          (II) if no such percentage is specified as of the 
        date of the enactment of this clause, the percentage 
        established under the State's authorizing legislation 
        or provided for under the State's appropriations;
but in no case shall this clause require the percentage 
provided under clause (ii)(I) to exceed 100 percent.
  (iv) In the case of a State which, as of the date of the 
enactment of this clause, has established under clause (i), or 
has enacted legislation authorizing, or appropriating funds, to 
provide for, a percentage (of the income official poverty line) 
that is greater than 133 percent, the percentage provided under 
clause (ii) for medical assistance on or after April 1, 1990, 
shall not be less than--
          (I) the percentage specified by the State in an 
        amendment to its State plan (whether approved or not) 
        as of the date of the enactment of this clause, or
          (II) if no such percentage is specified as of the 
        date of the enactment of this clause, the percentage 
        established under the State's authorizing legislation 
        or provided for under the State's appropriations.
  (B) For purposes of paragraph (1) with respect to individuals 
described in subparagraph (C) of such paragraph, the State 
shall establish an income level which is equal to 133 percent 
of the income official poverty line described in subparagraph 
(A) applicable to a family of the size involved.
  (C) For purposes of paragraph (1) with respect to individuals 
described in subparagraph (D) of that paragraph, the State 
shall establish an income level which is equal to 100 percent 
(or, beginning January 1, 2014, 133 percent) of the income 
official poverty line described in subparagraph (A) applicable 
to a family of the size involved.
  (3) Notwithstanding subsection (a)(17), for individuals who 
are eligible for medical assistance because of subsection 
(a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or 
(a)(10)(A)(ii)(IX)--
          (A) application of a resource standard shall be at 
        the option of the State;
          (B) any resource standard or methodology that is 
        applied with respect to an individual described in 
        subparagraph (A) of paragraph (1) may not be more 
        restrictive than the resource standard or methodology 
        that is applied under title XVI;
          (C) any resource standard or methodology that is 
        applied with respect to an individual described in 
        subparagraph (B), (C), or (D) of paragraph (1) may not 
        be more restrictive than the corresponding methodology 
        that is applied under the State plan under part A of 
        title IV;
          (D) the income standard to be applied is the 
        appropriate income standard established under paragraph 
        (2); and
          (E) family income shall be determined in accordance 
        with the methodology employed under the State plan 
        under part A or E of title IV (except to the extent 
        such methodology is inconsistent with clause (D) of 
        subsection (a)(17)), and costs incurred for medical 
        care or for any other type of remedial care shall not 
        be taken into account.
Any different treatment provided under this paragraph for such 
individuals shall not, because of subsection (a)(17), require 
or permit such treatment for other individuals.
  (4)(A) In the case of any State which is providing medical 
assistance to its residents under a waiver granted under 
section 1115, the Secretary shall require the State to provide 
medical assistance for pregnant women and infants under age 1 
described in subsection (a)(10)(A)(i)(IV) and for children 
described in subsection (a)(10)(A)(i)(VI) or subsection 
(a)(10)(A)(i)(VII) in the same manner as the State would be 
required to provide such assistance for such individuals if the 
State had in effect a plan approved under this title.
  (B) In the case of a State which is not one of the 50 States 
or the District of Columbia, the State need not meet the 
requirement of subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), 
or (a)(10)(A)(i)(VII) and, for purposes of paragraph (2)(A), 
the State may substitute for the percentage provided under 
clause (ii) of such paragraph any percentage.
  (m)(1) Individuals described in this paragraph are 
individuals--
          (A) who are 65 years of age or older or are disabled 
        individuals (as determined under section 1614(a)(3)),
          (B) whose income (as determined under section 1612 
        for purposes of the supplemental security income 
        program, except as provided in paragraph (2)(C)) does 
        not exceed an income level established by the State 
        consistent with paragraph (2)(A), and
          (C) whose resources (as determined under section 1613 
        for purposes of the supplemental security income 
        program) do not exceed (except as provided in paragraph 
        (2)(B)) the maximum amount of resources that an 
        individual may have and obtain benefits under that 
        program.
  (2)(A) The income level established under paragraph (1)(B) 
may not exceed a percentage (not more than 100 percent) of the 
official poverty line (as defined by the Office of Management 
and Budget, and revised annually in accordance with section 
673(2) of the Omnibus Budget Reconciliation Act of 1981) 
applicable to a family of the size involved.
  (B) In the case of a State that provides medical assistance 
to individuals not described in subsection (a)(10)(A) and at 
the State's option, the State may use under paragraph (1)(C) 
such resource level (which is higher than the level described 
in that paragraph) as may be applicable with respect to 
individuals described in paragraph (1)(A) who are not described 
in subsection (a)(10)(A).
  (C) The provisions of section 1905(p)(2)(D) shall apply to 
determinations of income under this subsection in the same 
manner as they apply to determinations of income under section 
1905(p).
  (3) Notwithstanding subsection (a)(17), for individuals 
described in paragraph (1) who are covered under the State plan 
by virtue of subsection (a)(10)(A)(ii)(X)--
          (A) the income standard to be applied is the income 
        standard described in paragraph (1)(B), and
          (B) except as provided in section 1612(b)(4)(B)(ii), 
        costs incurred for medical care or for any other type 
        of remedial care shall not be taken into account in 
        determining income.
Any different treatment provided under this paragraph for such 
individuals shall not, because of subsection (a)(17), require 
or permit such treatment for other individuals.
  (4) Notwithstanding subsection (a)(17), for qualified 
medicare beneficiaries described in section 1905(p)(1)--
          (A) the income standard to be applied is the income 
        standard described in section 1905(p)(1)(B), and
          (B) except as provided in section 1612(b)(4)(B)(ii), 
        costs incurred for medical care or for any other type 
        of remedial care shall not be taken into account in 
        determining income.
Any different treatment provided under this paragraph for such 
individuals shall not, because of subsection (a)(17), require 
or permit such treatment for other individuals.
  (n)(1) In the case of medical assistance furnished under this 
title for medicare cost-sharing respecting the furnishing of a 
service or item to a qualified medicare beneficiary, the State 
plan may provide payment in an amount with respect to the 
service or item that results in the sum of such payment amount 
and any amount of payment made under title XVIII with respect 
to the service or item exceeding the amount that is otherwise 
payable under the State plan for the item or service for 
eligible individuals who are not qualified medicare 
beneficiaries.
  (2) In carrying out paragraph (1), a State is not required to 
provide any payment for any expenses incurred relating to 
payment for deductibles, coinsurance, or copayments for 
medicare cost-sharing to the extent that payment under title 
XVIII for the service would exceed the payment amount that 
otherwise would be made under the State plan under this title 
for such service if provided to an eligible recipient other 
than a medicare beneficiary.
  (3) In the case in which a State's payment for medicare cost-
sharing for a qualified medicare beneficiary with respect to an 
item or service is reduced or eliminated through the 
application of paragraph (2)--
          (A) for purposes of applying any limitation under 
        title XVIII on the amount that the beneficiary may be 
        billed or charged for the service, the amount of 
        payment made under title XVIII plus the amount of 
        payment (if any) under the State plan shall be 
        considered to be payment in full for the service;
          (B) the beneficiary shall not have any legal 
        liability to make payment to a provider or to an 
        organization described in section 1903(m)(1)(A) for the 
        service; and
          (C) any lawful sanction that may be imposed upon a 
        provider or such an organization for excess charges 
        under this title or title XVIII shall apply to the 
        imposition of any charge imposed upon the individual in 
        such case.
This paragraph shall not be construed as preventing payment of 
any medicare cost-sharing by a medicare supplemental policy or 
an employer retiree health plan on behalf of an individual.
  (o) Notwithstanding any provision of subsection (a) to the 
contrary, a State plan under this title shall provide that any 
supplemental security income benefits paid by reason of 
subparagraph (E) or (G) of section 1611(e)(1) to an individual 
who--
          (1) is eligible for medical assistance under the 
        plan, and
          (2) is in a hospital, skilled nursing facility, or 
        intermediate care facility at the time such benefits 
        are paid,
will be disregarded for purposes of determining the amount of 
any post-eligibility contribution by the individual to the cost 
of the care and services provided by the hospital, skilled 
nursing facility, or intermediate care facility.
  (p)(1) In addition to any other authority, a State may 
exclude any individual or entity for purposes of participating 
under the State plan under this title for any reason for which 
the Secretary could exclude the individual or entity from 
participation in a program under title XVIII under section 
1128, 1128A, or 1866(b)(2).
  (2) In order for a State to receive payments for medical 
assistance under section 1903(a), with respect to payments the 
State makes to a medicaid managed care organization (as defined 
in section 1903(m)) or to an entity furnishing services under a 
waiver approved under section 1915(b)(1), the State must 
provide that it will exclude from participation, as such an 
organization or entity, any organization or entity that--
          (A) could be excluded under section 1128(b)(8) 
        (relating to owners and managing employees who have 
        been convicted of certain crimes or received other 
        sanctions),
          (B) has, directly or indirectly, a substantial 
        contractual relationship (as defined by the Secretary) 
        with an individual or entity that is described in 
        section 1128(b)(8)(B), or
          (C) employs or contracts with any individual or 
        entity that is excluded from participation under this 
        title under section 1128 or 1128A for the provision of 
        health care, utilization review, medical social work, 
        or administrative services or employs or contracts with 
        any entity for the provision (directly or indirectly) 
        through such an excluded individual or entity of such 
        services.
  (3) As used in this subsection, the term ``exclude'' includes 
the refusal to enter into or renew a participation agreement or 
the termination of such an agreement.
  (q)(1)(A) In order to meet the requirement of subsection 
(a)(50), the State plan must provide that, in the case of an 
institutionalized individual or couple described in 
subparagraph (B), in determining the amount of the individual's 
or couple's income to be applied monthly to payment for the 
cost of care in an institution, there shall be deducted from 
the monthly income (in addition to other allowances otherwise 
provided under the State plan) a monthly personal needs 
allowance--
          (i) which is reasonable in amount for clothing and 
        other personal needs of the individual (or couple) 
        while in an institution, and
          (ii) which is not less (and may be greater) than the 
        minimum monthly personal needs allowance described in 
        paragraph (2).
  (B) In this subsection, the term ``institutionalized 
individual or couple'' means an individual or married couple--
          (i) who is an inpatient (or who are inpatients) in a 
        medical institution or nursing facility for which 
        payments are made under this title throughout a month, 
        and
          (ii) who is or are determined to be eligible for 
        medical assistance under the State plan.
  (2) The minimum monthly personal needs allowance described in 
this paragraph is $30 for an institutionalized individual and 
$60 for an institutionalized couple (if both are aged, blind, 
or disabled, and their incomes are considered available to each 
other in determining eligibility).
  (r)(1)(A) For purposes of sections 1902(a)(17) and 
1924(d)(1)(D) and for purposes of a waiver under section 1915, 
with respect to the post-eligibility treatment of income of 
individuals who are institutionalized or receiving home or 
community-based services under such a waiver, the treatment 
described in subparagraph (B) shall apply, there shall be 
disregarded reparation payments made by the Federal Republic of 
Germany, and there shall be taken into account amounts for 
incurred expenses for medical or remedial care that are not 
subject to payment by a third party, including--
          (i) medicare and other health insurance premiums, 
        deductibles, or coinsurance, and
          (ii) necessary medical or remedial care recognized 
        under State law but not covered under the State plan 
        under this title, subject to reasonable limits the 
        State may establish on the amount of these expenses.
  (B)(i) In the case of a veteran who does not have a spouse or 
a child, if the veteran--
          (I) receives, after the veteran has been determined 
        to be eligible for medical assistance under the State 
        plan under this title, a veteran's pension in excess of 
        $90 per month, and
          (II) resides in a State veterans home with respect to 
        which the Secretary of Veterans Affairs makes per diem 
        payments for nursing home care pursuant to section 
        1741(a) of title 38, United States Code,
any such pension payment, including any payment made due to the 
need for aid and attendance, or for unreimbursed medical 
expenses, that is in excess of $90 per month shall be counted 
as income only for the purpose of applying such excess payment 
to the State veterans home's cost of providing nursing home 
care to the veteran.
  (ii) The provisions of clause (i) shall apply with respect to 
a surviving spouse of a veteran who does not have a child in 
the same manner as they apply to a veteran described in such 
clause.
  (2)(A) The methodology to be employed in determining income 
and resource eligibility for individuals under subsection 
(a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), 
(a)(10)(A)(i)(VII), (a)(10)(A)(ii), (a)(10)(C)(i)(III), or (f) 
or under section 1905(p) may be less restrictive, and shall be 
no more restrictive, than the methodology--
          (i) in the case of groups consisting of aged, blind, 
        or disabled individuals, under the supplemental 
        security income program under title XVI, or
          (ii) in the case of other groups, under the State 
        plan most closely categorically related.
  (B) For purposes of this subsection and subsection (a)(10), 
methodology is considered to be ``no more restrictive'' if, 
using the methodology, additional individuals may be eligible 
for medical assistance and no individuals who are otherwise 
eligible are made ineligible for such assistance.
  (s) In order to meet the requirements of subsection (a)(55), 
the State plan must provide that payments to hospitals under 
the plan for inpatient hospital services furnished to infants 
who have not attained the age of 1 year, and to children who 
have not attained the age of 6 years and who receive such 
services in a disproportionate share hospital described in 
section 1923(b)(1), shall--
          (1) if made on a prospective basis (whether per diem, 
        per case, or otherwise) provide for an outlier 
        adjustment in payment amounts for medically necessary 
        inpatient hospital services involving exceptionally 
        high costs or exceptionally long lengths of stay,
          (2) not be limited by the imposition of day limits 
        with respect to the delivery of such services to such 
        individuals, and
          (3) not be limited by the imposition of dollar limits 
        (other than such limits resulting from prospective 
        payments as adjusted pursuant to paragraph (1)) with 
        respect to the delivery of such services to any such 
        individual who has not attained their first birthday 
        (or in the case of such an individual who is an 
        inpatient on his first birthday until such individual 
        is discharged).
  (t) Nothing in this title (including sections 1903(a) and 
1905(a)) shall be construed as authorizing the Secretary to 
deny or limit payments to a State for expenditures, for medical 
assistance for items or services, attributable to taxes of 
general applicability imposed with respect to the provision of 
such items or services.
  (u)(1) Individuals described in this paragraph are 
individuals--
          (A) who are entitled to elect COBRA continuation 
        coverage (as defined in paragraph (3)),
          (B) whose income (as determined under section 1612 
        for purposes of the supplemental security income 
        program) does not exceed 100 percent of the official 
        poverty line (as defined by the Office of Management 
        and Budget, and revised annually in accordance with 
        section 673(2) of the Omnibus Budget Reconciliation Act 
        of 1981) applicable to a family of the size involved,
          (C) whose resources (as determined under section 1613 
        for purposes of the supplemental security income 
        program) do not exceed twice the maximum amount of 
        resources that an individual may have and obtain 
        benefits under that program, and
          (D) with respect to whose enrollment for COBRA 
        continuation coverage the State has determined that the 
        savings in expenditures under this title resulting from 
        such enrollment is likely to exceed the amount of 
        payments for COBRA premiums made.
  (2) For purposes of subsection (a)(10)(F) and this 
subsection, the term ``COBRA premiums'' means the applicable 
premium imposed with respect to COBRA continuation coverage.
  (3) In this subsection, the term ``COBRA continuation 
coverage'' means coverage under a group health plan provided by 
an employer with 75 or more employees provided pursuant to 
title XXII of the Public Health Service Act, section 4980B of 
the Internal Revenue Code of 1986, or title VI of the Employee 
Retirement Income Security Act of 1974.
  (4) Notwithstanding subsection (a)(17), for individuals 
described in paragraph (1) who are covered under the State plan 
by virtue of subsection (a)(10)(A)(ii)(XI)--
          (A) the income standard to be applied is the income 
        standard described in paragraph (1)(B), and
          (B) except as provided in section 1612(b)(4)(B)(ii), 
        costs incurred for medical care or for any other type 
        of remedial care shall not be taken into account in 
        determining income.
Any different treatment provided under this paragraph for such 
individuals shall not, because of subsection (a)(10)(B) or 
(a)(17), require or permit such treatment for other 
individuals.
  (v) A State plan may provide for the making of determinations 
of disability or blindness for the purpose of determining 
eligibility for medical assistance under the State plan by the 
single State agency or its designee, and make medical 
assistance available to individuals whom it finds to be blind 
or disabled and who are determined otherwise eligible for such 
assistance during the period of time prior to which a final 
determination of disability or blindness is made by the Social 
Security Administration with respect to such an individual. In 
making such determinations, the State must apply the 
definitions of disability and blindness found in section 
1614(a) of the Social Security Act.
  (w)(1) For purposes of subsection (a)(57) and sections 
1903(m)(1)(A) and 1919(c)(2)(E), the requirement of this 
subsection is that a provider or organization (as the case may 
be) maintain written policies and procedures with respect to 
all adult individuals receiving medical care by or through the 
provider or organization--
          (A) to provide written information to each such 
        individual concerning--
                  (i) an individual's rights under State law 
                (whether statutory or as recognized by the 
                courts of the State) to make decisions 
                concerning such medical care, including the 
                right to accept or refuse medical or surgical 
                treatment and the right to formulate advance 
                directives (as defined in paragraph (3)), and
                  (ii) the provider's or organization's written 
                policies respecting the implementation of such 
                rights;
          (B) to document in the individual's medical record 
        whether or not the individual has executed an advance 
        directive;
          (C) not to condition the provision of care or 
        otherwise discriminate against an individual based on 
        whether or not the individual has executed an advance 
        directive;
          (D) to ensure compliance with requirements of State 
        law (whether statutory or as recognized by the courts 
        of the State) respecting advance directives; and
          (E) to provide (individually or with others) for 
        education for staff and the community on issues 
        concerning advance directives.
Subparagraph (C) shall not be construed as requiring the 
provision of care which conflicts with an advance directive.
  (2) The written information described in paragraph (1)(A) 
shall be provided to an adult individual--
          (A) in the case of a hospital, at the time of the 
        individual's admission as an inpatient,
          (B) in the case of a nursing facility, at the time of 
        the individual's admission as a resident,
          (C) in the case of a provider of home health care or 
        personal care services, in advance of the individual 
        coming under the care of the provider,
          (D) in the case of a hospice program, at the time of 
        initial receipt of hospice care by the individual from 
        the program, and
          (E) in the case of a medicaid managed care 
        organization, at the time of enrollment of the 
        individual with the organization.
  (3) Nothing in this section shall be construed to prohibit 
the application of a State law which allows for an objection on 
the basis of conscience for any health care provider or any 
agent of such provider which as a matter of conscience cannot 
implement an advance directive.
  (4) In this subsection, the term ``advance directive'' means 
a written instruction, such as a living will or durable power 
of attorney for health care, recognized under State law 
(whether statutory or as recognized by the courts of the State) 
and relating to the provision of such care when the individual 
is incapacitated.
  (5) For construction relating to this subsection, see section 
7 of the Assisted Suicide Funding Restriction Act of 1997 
(relating to clarification respecting assisted suicide, 
euthanasia, and mercy killing).
  (x) The Secretary shall establish a system, for 
implementation by not later than July 1, 1991, which provides 
for a unique identifier for each physician who furnishes 
services for which payment may be made under a State plan 
approved under this title.
  (y)(1) In addition to any other authority under State law, 
where a State determines that a psychiatric hospital which is 
certified for participation under its plan no longer meets the 
requirements for a psychiatric hospital (referred to in section 
1905(h)) and further finds that the hospital's deficiencies--
          (A) immediately jeopardize the health and safety of 
        its patients, the State shall terminate the hospital's 
        participation under the State plan; or
          (B) do not immediately jeopardize the health and 
        safety of its patients, the State may terminate the 
        hospital's participation under the State plan, or 
        provide that no payment will be made under the State 
        plan with respect to any individual admitted to such 
        hospital after the effective date of the finding, or 
        both.
  (2) Except as provided in paragraph (3), if a psychiatric 
hospital described in paragraph (1)(B) has not complied with 
the requirements for a psychiatric hospital under this title--
          (A) within 3 months after the date the hospital is 
        found to be out of compliance with such requirements, 
        the State shall provide that no payment will be made 
        under the State plan with respect to any individual 
        admitted to such hospital after the end of such 3-month 
        period, or
          (B) within 6 months after the date the hospital is 
        found to be out of compliance with such requirements, 
        no Federal financial participation shall be provided 
        under section 1903(a) with respect to further services 
        provided in the hospital until the State finds that the 
        hospital is in compliance with the requirements of this 
        title.
  (3) The Secretary may continue payments, over a period of not 
longer than 6 months from the date the hospital is found to be 
out of compliance with such requirements, if--
          (A) the State finds that it is more appropriate to 
        take alternative action to assure compliance of the 
        hospital with the requirements than to terminate the 
        certification of the hospital,
          (B) the State has submitted a plan and timetable for 
        corrective action to the Secretary for approval and the 
        Secretary approves the plan of corrective action, and
          (C) the State agrees to repay to the Federal 
        Government payments received under this paragraph if 
        the corrective action is not taken in accordance with 
        the approved plan and timetable.
  (z)(1) Individuals described in this paragraph are 
individuals not described in subsection (a)(10)(A)(i)--
          (A) who are infected with tuberculosis;
          (B) whose income (as determined under the State plan 
        under this title with respect to disabled individuals) 
        does not exceed the maximum amount of income a disabled 
        individual described in subsection (a)(10)(A)(i) may 
        have and obtain medical assistance under the plan; and
          (C) whose resources (as determined under the State 
        plan under this title with respect to disabled 
        individuals) do not exceed the maximum amount of 
        resources a disabled individual described in subsection 
        (a)(10)(A)(i) may have and obtain medical assistance 
        under the plan.
  (2) For purposes of subsection (a)(10), the term ``TB-related 
services'' means each of the following services relating to 
treatment of infection with tuberculosis:
          (A) Prescribed drugs.
          (B) Physicians' services and services described in 
        section 1905(a)(2).
          (C) Laboratory and X-ray services (including services 
        to confirm the presence of infection).
          (D) Clinic services and Federally-qualified health 
        center services.
          (E) Case management services (as defined in section 
        1915(g)(2)).
          (F) Services (other than room and board) designed to 
        encourage completion of regimens of prescribed drugs by 
        outpatients, including services to observe directly the 
        intake of prescribed drugs.
  (aa) Individuals described in this subsection are individuals 
who--
          (1) are not described in subsection (a)(10)(A)(i);
          (2) have not attained age 65;
          (3) have been screened for breast and cervical cancer 
        under the Centers for Disease Control and Prevention 
        breast and cervical cancer early detection program 
        established under title XV of the Public Health Service 
        Act (42 U.S.C. 300k et seq.) in accordance with the 
        requirements of section 1504 of that Act (42 U.S.C. 
        300n) and need treatment for breast or cervical cancer; 
        and
          (4) are not otherwise covered under creditable 
        coverage, as defined in section 2701(c) of the Public 
        Health Service Act (42 U.S.C. 300gg(c)), but applied 
        without regard to paragraph (1)(F) of such section.
  (bb) Payment for Services Provided by Federally-Qualified 
Health Centers and Rural Health Clinics.--
          (1) In general.--Beginning with fiscal year 2001 with 
        respect to services furnished on or after January 1, 
        2001, and each succeeding fiscal year, the State plan 
        shall provide for payment for services described in 
        section 1905(a)(2)(C) furnished by a Federally-
        qualified health center and services described in 
        section 1905(a)(2)(B) furnished by a rural health 
        clinic in accordance with the provisions of this 
        subsection.
          (2) Fiscal year 2001.--Subject to paragraph (4), for 
        services furnished on and after January 1, 2001, during 
        fiscal year 2001, the State plan shall provide for 
        payment for such services in an amount (calculated on a 
        per visit basis) that is equal to 100 percent of the 
        average of the costs of the center or clinic of 
        furnishing such services during fiscal years 1999 and 
        2000 which are reasonable and related to the cost of 
        furnishing such services, or based on such other tests 
        of reasonableness as the Secretary prescribes in 
        regulations under section 1833(a)(3), or, in the case 
        of services to which such regulations do not apply, the 
        same methodology used under section 1833(a)(3), 
        adjusted to take into account any increase or decrease 
        in the scope of such services furnished by the center 
        or clinic during fiscal year 2001.
          (3) Fiscal year 2002 and succeeding fiscal years.--
        Subject to paragraph (4), for services furnished during 
        fiscal year 2002 or a succeeding fiscal year, the State 
        plan shall provide for payment for such services in an 
        amount (calculated on a per visit basis) that is equal 
        to the amount calculated for such services under this 
        subsection for the preceding fiscal year--
                  (A) increased by the percentage increase in 
                the MEI (as defined in section 1842(i)(3)) 
                applicable to primary care services (as defined 
                in section 1842(i)(4)) for that fiscal year; 
                and
                  (B) adjusted to take into account any 
                increase or decrease in the scope of such 
                services furnished by the center or clinic 
                during that fiscal year.
          (4) Establishment of initial year payment amount for 
        new centers or clinics.--In any case in which an entity 
        first qualifies as a Federally-qualified health center 
        or rural health clinic after fiscal year 2000, the 
        State plan shall provide for payment for services 
        described in section 1905(a)(2)(C) furnished by the 
        center or services described in section 1905(a)(2)(B) 
        furnished by the clinic in the first fiscal year in 
        which the center or clinic so qualifies in an amount 
        (calculated on a per visit basis) that is equal to 100 
        percent of the costs of furnishing such services during 
        such fiscal year based on the rates established under 
        this subsection for the fiscal year for other such 
        centers or clinics located in the same or adjacent area 
        with a similar case load or, in the absence of such a 
        center or clinic, in accordance with the regulations 
        and methodology referred to in paragraph (2) or based 
        on such other tests of reasonableness as the Secretary 
        may specify. For each fiscal year following the fiscal 
        year in which the entity first qualifies as a 
        Federally-qualified health center or rural health 
        clinic, the State plan shall provide for the payment 
        amount to be calculated in accordance with paragraph 
        (3).
          (5) Administration in the case of managed care.--
                  (A) In general.--In the case of services 
                furnished by a Federally-qualified health 
                center or rural health clinic pursuant to a 
                contract between the center or clinic and a 
                managed care entity (as defined in section 
                1932(a)(1)(B)), the State plan shall provide 
                for payment to the center or clinic by the 
                State of a supplemental payment equal to the 
                amount (if any) by which the amount determined 
                under paragraphs (2), (3), and (4) of this 
                subsection exceeds the amount of the payments 
                provided under the contract.
                  (B) Payment schedule.--The supplemental 
                payment required under subparagraph (A) shall 
                be made pursuant to a payment schedule agreed 
                to by the State and the Federally-qualified 
                health center or rural health clinic, but in no 
                case less frequently than every 4 months.
          (6) Alternative payment methodologies.--
        Notwithstanding any other provision of this section, 
        the State plan may provide for payment in any fiscal 
        year to a Federally-qualified health center for 
        services described in section 1905(a)(2)(C) or to a 
        rural health clinic for services described in section 
        1905(a)(2)(B) in an amount which is determined under an 
        alternative payment methodology that--
                  (A) is agreed to by the State and the center 
                or clinic; and
                  (B) results in payment to the center or 
                clinic of an amount which is at least equal to 
                the amount otherwise required to be paid to the 
                center or clinic under this section.
  (cc)(1) Individuals described in this paragraph are 
individuals--
          (A) who are children who have not attained 19 years 
        of age and are born--
                  (i) on or after January 1, 2001 (or, at the 
                option of a State, on or after an earlier 
                date), in the case of the second, third, and 
                fourth quarters of fiscal year 2007;
                  (ii) on or after October 1, 1995 (or, at the 
                option of a State, on or after an earlier 
                date), in the case of each quarter of fiscal 
                year 2008; and
                  (iii) after October 1, 1989, in the case of 
                each quarter of fiscal year 2009 and each 
                quarter of any fiscal year thereafter;
          (B) who would be considered disabled under section 
        1614(a)(3)(C) (as determined under title XVI for 
        children but without regard to any income or asset 
        eligibility requirements that apply under such title 
        with respect to children); and
          (C) whose family income does not exceed such income 
        level as the State establishes and does not exceed--
                  (i) 300 percent of the poverty line (as 
                defined in section 2110(c)(5)) applicable to a 
                family of the size involved; or
                  (ii) such higher percent of such poverty line 
                as a State may establish, except that--
                          (I) any medical assistance provided 
                        to an individual whose family income 
                        exceeds 300 percent of such poverty 
                        line may only be provided with State 
                        funds; and
                          (II) no Federal financial 
                        participation shall be provided under 
                        section 1903(a) for any medical 
                        assistance provided to such an 
                        individual.
  (2)(A) If an employer of a parent of an individual described 
in paragraph (1) offers family coverage under a group health 
plan (as defined in section 2791(a) of the Public Health 
Service Act), the State shall--
          (i) notwithstanding section 1906, require such parent 
        to apply for, enroll in, and pay premiums for such 
        coverage as a condition of such parent's child being or 
        remaining eligible for medical assistance under 
        subsection (a)(10)(A)(ii)(XIX) if the parent is 
        determined eligible for such coverage and the employer 
        contributes at least 50 percent of the total cost of 
        annual premiums for such coverage; and
          (ii) if such coverage is obtained--
                  (I) subject to paragraph (2) of section 
                1916(h), reduce the premium imposed by the 
                State under that section in an amount that 
                reasonably reflects the premium contribution 
                made by the parent for private coverage on 
                behalf of a child with a disability; and
                  (II) treat such coverage as a third party 
                liability under subsection (a)(25).
  (B) In the case of a parent to which subparagraph (A) 
applies, a State, notwithstanding section 1906 but subject to 
paragraph (1)(C)(ii), may provide for payment of any portion of 
the annual premium for such family coverage that the parent is 
required to pay. Any payments made by the State under this 
subparagraph shall be considered, for purposes of section 
1903(a), to be payments for medical assistance.
  (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.
  (ee)(1) For purposes of subsection (a)(46)(B)(ii), the 
requirements of this subsection with respect to an individual 
declaring to be a citizen or national of the United States for 
purposes of establishing eligibility under this title, are, in 
lieu of requiring the individual to present satisfactory 
documentary evidence of citizenship or nationality under 
section 1903(x) (if the individual is not described in 
paragraph (2) of that section), as follows:
          (A) The State submits the name and social security 
        number of the individual to the Commissioner of Social 
        Security as part of the program established under 
        paragraph (2).
          (B) If the State receives notice from the 
        Commissioner of Social Security that the name or social 
        security number, or the declaration of citizenship or 
        nationality, of the individual is inconsistent with 
        information in the records maintained by the 
        Commissioner--
                  (i) the State makes a reasonable effort to 
                identify and address the causes of such 
                inconsistency, including through typographical 
                or other clerical errors, by contacting the 
                individual to confirm the accuracy of the name 
                or social security number submitted or 
                declaration of citizenship or nationality and 
                by taking such additional actions as the 
                Secretary, through regulation or other 
                guidance, or the State may identify, and 
                continues to provide the individual with 
                medical assistance while making such effort; 
                and
                  (ii) in the case such inconsistency is not 
                resolved under clause (i), the State--
                          (I) notifies the individual of such 
                        fact;
                          (II) provides the individual with a 
                        period of 90 days from the date on 
                        which the notice required under 
                        subclause (I) is received by the 
                        individual to either present 
                        satisfactory documentary evidence of 
                        citizenship or nationality (as defined 
                        in section 1903(x)(3)) or resolve the 
                        inconsistency with the Commissioner of 
                        Social Security (and continues to 
                        provide the individual with medical 
                        assistance during such 90-day period); 
                        and
                          (III) disenrolls the individual from 
                        the State plan under this title within 
                        30 days after the end of such 90-day 
                        period if no such documentary evidence 
                        is presented or if such inconsistency 
                        is not resolved.
  (2)(A) Each State electing to satisfy the requirements of 
this subsection for purposes of section 1902(a)(46)(B) shall 
establish a program under which the State submits at least 
monthly to the Commissioner of Social Security for comparison 
of the name and social security number, of each individual 
newly enrolled in the State plan under this title that month 
who is not described in section 1903(x)(2) and who declares to 
be a United States citizen or national, with information in 
records maintained by the Commissioner.
  (B) In establishing the State program under this paragraph, 
the State may enter into an agreement with the Commissioner of 
Social Security--
          (i) to provide, through an on-line system or 
        otherwise, for the electronic submission of, and 
        response to, the information submitted under 
        subparagraph (A) for an individual enrolled in the 
        State plan under this title who declares to be citizen 
        or national on at least a monthly basis; or
          (ii) to provide for a determination of the 
        consistency of the information submitted with the 
        information maintained in the records of the 
        Commissioner through such other method as agreed to by 
        the State and the Commissioner and approved by the 
        Secretary, provided that such method is no more 
        burdensome for individuals to comply with than any 
        burdens that may apply under a method described in 
        clause (i).
  (C) The program established under this paragraph shall 
provide that, in the case of any individual who is required to 
submit a social security number to the State under subparagraph 
(A) and who is unable to provide the State with such number, 
shall be provided with at least the reasonable opportunity to 
present satisfactory documentary evidence of citizenship or 
nationality (as defined in section 1903(x)(3)) as is provided 
under clauses (i) and (ii) of section 1137(d)(4)(A) to an 
individual for the submittal to the State of evidence 
indicating a satisfactory immigration status.
  (3)(A) The State agency implementing the plan approved under 
this title shall, at such times and in such form as the 
Secretary may specify, provide information on the percentage 
each month that the inconsistent submissions bears to the total 
submissions made for comparison for such month. For purposes of 
this subparagraph, a name, social security number, or 
declaration of citizenship or nationality of an individual 
shall be treated as inconsistent and included in the 
determination of such percentage only if--
          (i) the information submitted by the individual is 
        not consistent with information in records maintained 
        by the Commissioner of Social Security;
          (ii) the inconsistency is not resolved by the State;
          (iii) the individual was provided with a reasonable 
        period of time to resolve the inconsistency with the 
        Commissioner of Social Security or provide satisfactory 
        documentation of citizenship status and did not 
        successfully resolve such inconsistency; and
          (iv) payment has been made for an item or service 
        furnished to the individual under this title.
  (B) If, for any fiscal year, the average monthly percentage 
determined under subparagraph (A) is greater than 3 percent--
          (i) the State shall develop and adopt a corrective 
        plan to review its procedures for verifying the 
        identities of individuals seeking to enroll in the 
        State plan under this title and to identify and 
        implement changes in such procedures to improve their 
        accuracy; and
          (ii) pay to the Secretary an amount equal to the 
        amount which bears the same ratio to the total payments 
        under the State plan for the fiscal year for providing 
        medical assistance to individuals who provided 
        inconsistent information as the number of individuals 
        with inconsistent information in excess of 3 percent of 
        such total submitted bears to the total number of 
        individuals with inconsistent information.
  (C) The Secretary may waive, in certain limited cases, all or 
part of the payment under subparagraph (B)(ii) if the State is 
unable to reach the allowable error rate despite a good faith 
effort by such State.
  (D) Subparagraphs (A) and (B) shall not apply to a State for 
a fiscal year if there is an agreement described in paragraph 
(2)(B) in effect as of the close of the fiscal year that 
provides for the submission on a real-time basis of the 
information described in such paragraph.
  (4) Nothing in this subsection shall affect the rights of any 
individual under this title to appeal any disenrollment from a 
State plan.
  (ff) Notwithstanding any other requirement of this title or 
any other provision of Federal or State law, a State shall 
disregard the following property from resources for purposes of 
determining the eligibility of an individual who is an Indian 
for medical assistance under this title:
          (1) Property, including real property and 
        improvements, that is held in trust, subject to Federal 
        restrictions, or otherwise under the supervision of the 
        Secretary of the Interior, located on a reservation, 
        including any federally recognized Indian Tribe's 
        reservation, pueblo, or colony, including former 
        reservations in Oklahoma, Alaska Native regions 
        established by the Alaska Native Claims Settlement Act, 
        and Indian allotments on or near a reservation as 
        designated and approved by the Bureau of Indian Affairs 
        of the Department of the Interior.
          (2) For any federally recognized Tribe not described 
        in paragraph (1), property located within the most 
        recent boundaries of a prior Federal reservation.
          (3) Ownership interests in rents, leases, royalties, 
        or usage rights related to natural resources (including 
        extraction of natural resources or harvesting of 
        timber, other plants and plant products, animals, fish, 
        and shellfish) resulting from the exercise of federally 
        protected rights.
          (4) Ownership interests in or usage rights to items 
        not covered by paragraphs (1) through (3) that have 
        unique religious, spiritual, traditional, or cultural 
        significance or rights that support subsistence or a 
        traditional lifestyle according to applicable tribal 
        law or custom.
  (gg) Maintenance of Effort.--
          (1) General requirement to maintain eligibility 
        standards until state exchange is fully operational.--
        Subject to the succeeding paragraphs of this 
        subsection, during the period that begins on the date 
        of enactment of the Patient Protection and Affordable 
        Care Act and ends on the date on which the Secretary 
        determines that an Exchange established by the State 
        under section 1311 of the Patient Protection and 
        Affordable Care Act is fully operational, as a 
        condition for receiving any Federal payments under 
        section 1903(a) for calendar quarters occurring during 
        such period, a State shall not have in effect 
        eligibility standards, methodologies, or procedures 
        under the State plan under this title or under any 
        waiver of such plan that is in effect during that 
        period, that are more restrictive than the eligibility 
        standards, methodologies, or procedures, respectively, 
        under the plan or waiver that are in effect on the date 
        of enactment of the Patient Protection and Affordable 
        Care Act.
          (2) Continuation of eligibility standards for 
        children through september 30, 2027.--The requirement 
        under paragraph (1) shall continue to apply to a State 
        through September 30, 2027 (but during the period that 
        begins on October 1, 2019, and ends on September 30, 
        2027 only with respect to children in families whose 
        income does not exceed 300 percent of the poverty line 
        (as defined in section 2110(c)(5)) applicable to a 
        family of the size involved) with respect to the 
        eligibility standards, methodologies, and procedures 
        under the State plan under this title or under any 
        waiver of such plan that are applicable to determining 
        the eligibility for medical assistance of any child who 
        is under 19 years of age (or such higher age as the 
        State may have elected).
          (3) Nonapplication.--During the period that begins on 
        January 1, 2011, and ends on December 31, 2013, the 
        requirement under paragraph (1) shall not apply to a 
        State with respect to nonpregnant, nondisabled adults 
        who are eligible for medical assistance under the State 
        plan or under a waiver of the plan at the option of the 
        State and whose income exceeds 133 percent of the 
        poverty line (as defined in section 2110(c)(5)) 
        applicable to a family of the size involved if, on or 
        after December 31, 2010, the State certifies to the 
        Secretary that, with respect to the State fiscal year 
        during which the certification is made, the State has a 
        budget deficit, or with respect to the succeeding State 
        fiscal year, the State is projected to have a budget 
        deficit. Upon submission of such a certification to the 
        Secretary, the requirement under paragraph (1) shall 
        not apply to the State with respect to any remaining 
        portion of the period described in the preceding 
        sentence.
          (4) Determination of compliance.--
                  (A) States shall apply modified adjusted 
                gross income.--A State's determination of 
                income in accordance with subsection (e)(14) 
                shall not be considered to be eligibility 
                standards, methodologies, or procedures that 
                are more restrictive than the standards, 
                methodologies, or procedures in effect under 
                the State plan or under a waiver of the plan on 
                the date of enactment of the Patient Protection 
                and Affordable Care Act for purposes of 
                determining compliance with the requirements of 
                paragraph (1), (2), or (3).
                  (B) States may expand eligibility or move 
                waivered populations into coverage under the 
                state plan.--With respect to any period 
                applicable under paragraph (1), (2), or (3), a 
                State that applies eligibility standards, 
                methodologies, or procedures under the State 
                plan under this title or under any waiver of 
                the plan that are less restrictive than the 
                eligibility standards, methodologies, or 
                procedures, applied under the State plan or 
                under a waiver of the plan on the date of 
                enactment of the Patient Protection and 
                Affordable Care Act, or that makes individuals 
                who, on such date of enactment, are eligible 
                for medical assistance under a waiver of the 
                State plan, after such date of enactment 
                eligible for medical assistance through a State 
                plan amendment with an income eligibility level 
                that is not less than the income eligibility 
                level that applied under the waiver, or as a 
                result of the application of subclause (VIII) 
                of section 1902(a)(10)(A)(i), shall not be 
                considered to have in effect eligibility 
                standards, methodologies, or procedures that 
                are more restrictive than the standards, 
                methodologies, or procedures in effect under 
                the State plan or under a waiver of the plan on 
                the date of enactment of the Patient Protection 
                and Affordable Care Act for purposes of 
                determining compliance with the requirements of 
                paragraph (1), (2), or (3).
  (hh)(1) A State may elect to phase-in the extension of 
eligibility for medical assistance to individuals described in 
subclause (XX) of subsection (a)(10)(A)(ii) based on the 
categorical group (including nonpregnant childless adults) or 
income, so long as the State does not extend such eligibility 
to individuals described in such subclause with higher income 
before making individuals described in such subclause with 
lower income eligible for medical assistance.
  (2) If an individual described in subclause (XX) of 
subsection (a)(10)(A)(ii) is the parent of a child who is under 
19 years of age (or such higher age as the State may have 
elected) who is eligible for medical assistance under the State 
plan or under a waiver of such plan, the individual may not be 
enrolled under the State plan unless the individual's child is 
enrolled under the State plan or under a waiver of the plan or 
is enrolled in other health insurance coverage. For purposes of 
the preceding sentence, the term ``parent'' includes an 
individual treated as a caretaker relative for purposes of 
carrying out section 1931.
  (ii)(1) Individuals described in this subsection are 
individuals--
                  (A) whose income does not exceed an income 
                eligibility level established by the State that 
                does not exceed the highest income eligibility 
                level established under the State plan under 
                this title (or under its State child health 
                plan under title XXI) for pregnant women; and
                  (B) who are not pregnant.
          (2) At the option of a State, individuals described 
        in this subsection may include individuals who, had 
        individuals applied on or before January 1, 2007, would 
        have been made eligible pursuant to the standards and 
        processes imposed by that State for benefits described 
        in clause (XVI) of the matter following subparagraph 
        (G) of section subsection (a)(10) pursuant to a waiver 
        granted under section 1115.
          (3) At the option of a State, for purposes of 
        subsection (a)(17)(B), in determining eligibility for 
        services under this subsection, the State may consider 
        only the income of the applicant or recipient.
  (jj) Primary Care Services Defined.--For purposes of 
subsection (a)(13)(C), the term ``primary care services'' 
means--
          (1) evaluation and management services that are 
        procedure codes (for services covered under title 
        XVIII) for services in the category designated 
        Evaluation and Management in the Healthcare Common 
        Procedure Coding System (established by the Secretary 
        under section 1848(c)(5) as of December 31, 2009, and 
        as subsequently modified); and
          (2) services related to immunization administration 
        for vaccines and toxoids for which CPT codes 90465, 
        90466, 90467, 90468, 90471, 90472, 90473, or 90474 (as 
        subsequently modified) apply under such System.
  (kk) Provider and Supplier Screening, Oversight, and 
Reporting Requirements.--For purposes of subsection (a)(77), 
the requirements of this subsection are the following:
          (1) Screening.--The State complies with the process 
        for screening providers and suppliers under this title, 
        as established by the Secretary under section 
        1866(j)(2).
          (2) Provisional period of enhanced oversight for new 
        providers and suppliers.--The State complies with 
        procedures to provide for a provisional period of 
        enhanced oversight for new providers and suppliers 
        under this title, as established by the Secretary under 
        section 1866(j)(3).
          (3) Disclosure requirements.--The State requires 
        providers and suppliers under the State plan or under a 
        waiver of the plan to comply with the disclosure 
        requirements established by the Secretary under section 
        1866(j)(5).
          (4) Temporary moratorium on enrollment of new 
        providers or suppliers.--
                  (A) Temporary moratorium imposed by the 
                secretary.--
                          (i) In general.--Subject to clause 
                        (ii), the State complies with any 
                        temporary moratorium on the enrollment 
                        of new providers or suppliers imposed 
                        by the Secretary under section 
                        1866(j)(7).
                          (ii) Exceptions.--
                                  (I) Compliance with 
                                moratorium.--A State shall not 
                                be required to comply with a 
                                temporary moratorium described 
                                in clause (i) if the State 
                                determines that the imposition 
                                of such temporary moratorium 
                                would adversely impact 
                                beneficiaries' access to 
                                medical assistance.
                                  (II) FFP available.--
                                Notwithstanding section 
                                1903(i)(2)(E), payment may be 
                                made to a State under this 
                                title with respect to amounts 
                                expended for items and services 
                                described in such section if 
                                the Secretary, in consultation 
                                with the State agency 
                                administering the State plan 
                                under this title (or a waiver 
                                of the plan), determines that 
                                denying payment to the State 
                                pursuant to such section would 
                                adversely impact beneficiaries' 
                                access to medical assistance. 
                          (iii) Limitation on charges to 
                        beneficiaries.--With respect to any 
                        amount expended for items or services 
                        furnished during calendar quarters 
                        beginning on or after October 1, 2017, 
                        the State prohibits, during the period 
                        of a temporary moratorium described in 
                        clause (i), a provider meeting the 
                        requirements specified in subparagraph 
                        (C)(iii) of section 1866(j)(7) from 
                        charging an individual or other person 
                        eligible to receive medical assistance 
                        under the State plan under this title 
                        (or a waiver of the plan) for an item 
                        or service described in section 
                        1903(i)(2)(E) furnished to such an 
                        individual.
                  (B) Moratorium on enrollment of providers and 
                suppliers.--At the option of the State, the 
                State imposes, for purposes of entering into 
                participation agreements with providers or 
                suppliers under the State plan or under a 
                waiver of the plan, periods of enrollment 
                moratoria, or numerical caps or other limits, 
                for providers or suppliers identified by the 
                Secretary as being at high-risk for fraud, 
                waste, or abuse as necessary to combat fraud, 
                waste, or abuse, but only if the State 
                determines that the imposition of any such 
                period, cap, or other limits would not 
                adversely impact beneficiaries' access to 
                medical assistance.
          (5) Compliance programs.--The State requires 
        providers and suppliers under the State plan or under a 
        waiver of the plan to establish, in accordance with the 
        requirements of section 1866(j)(7), a compliance 
        program that contains the core elements established 
        under subparagraph (B) of that section 1866(j)(7) for 
        providers or suppliers within a particular industry or 
        category.
          (6) Reporting of adverse provider actions.--The State 
        complies with the national system for reporting 
        criminal and civil convictions, sanctions, negative 
        licensure actions, and other adverse provider actions 
        to the Secretary, through the Administrator of the 
        Centers for Medicare & Medicaid Services, in accordance 
        with regulations of the Secretary.
          (7) Enrollment and npi of ordering or referring 
        providers.--The State requires--
                  (A) all ordering or referring physicians or 
                other professionals to be enrolled under the 
                State plan or under a waiver of the plan as a 
                participating provider; and
                  (B) the national provider identifier of any 
                ordering or referring physician or other 
                professional to be specified on any claim for 
                payment that is based on an order or referral 
                of the physician or other professional.
          (8) Provider terminations.--
                  (A) In general.--Beginning on July 1, 2018, 
                in the case of a notification under subsection 
                (a)(41) with respect to a termination for a 
                reason specified in section 455.101 of title 
                42, Code of Federal Regulations (as in effect 
                on November 1, 2015) or for any other reason 
                specified by the Secretary, of the 
                participation of a provider of services or any 
                other person under the State plan (or under a 
                waiver of the plan), the State, not later than 
                30 days after the effective date of such 
                termination, submits to the Secretary with 
                respect to any such provider or person, as 
                appropriate--
                          (i) the name of such provider or 
                        person;
                          (ii) the provider type of such 
                        provider or person;
                          (iii) the specialty of such 
                        provider's or person's practice;
                          (iv) the date of birth, Social 
                        Security number, national provider 
                        identifier (if applicable), Federal 
                        taxpayer identification number, and the 
                        State license or certification number 
                        of such provider or person (if 
                        applicable);
                          (v) the reason for the termination;
                          (vi) a copy of the notice of 
                        termination sent to the provider or 
                        person;
                          (vii) the date on which such 
                        termination is effective, as specified 
                        in the notice; and
                          (viii) any other information required 
                        by the Secretary.
                  (B) Effective date defined.--For purposes of 
                this paragraph, the term ``effective date'' 
                means, with respect to a termination described 
                in subparagraph (A), the later of--
                          (i) the date on which such 
                        termination is effective, as specified 
                        in the notice of such termination; or
                          (ii) the date on which all appeal 
                        rights applicable to such termination 
                        have been exhausted or the timeline for 
                        any such appeal has expired.
          (9) Other state oversight.--Nothing in this 
        subsection shall be interpreted to preclude or limit 
        the ability of a State to engage in provider and 
        supplier screening or enhanced provider and supplier 
        oversight activities beyond those required by the 
        Secretary.
  (ll) Termination Notification Database.--In the case of a 
provider of services or any other person whose participation 
under this title or title XXI is terminated (as described in 
subsection (kk)(8)), the Secretary shall, not later than 30 
days after the date on which the Secretary is notified of such 
termination under subsection (a)(41) (as applicable), review 
such termination and, if the Secretary determines appropriate, 
include such termination in any database or similar system 
developed pursuant to section 6401(b)(2) of the Patient 
Protection and Affordable Care Act (42 U.S.C. 1395cc note; 
Public Law 111-148).
  (mm) Directory Physician or Provider Described.--A physician 
or provider described in this subsection is--
          (1) in the case of a physician or provider of a 
        provider type for which the State agency, as a 
        condition on receiving payment for items and services 
        furnished by the physician or provider to individuals 
        eligible to receive medical assistance under the State 
        plan, requires the enrollment of the physician or 
        provider with the State agency, a physician or a 
        provider that--
                  (A) is enrolled with the agency as of the 
                date on which the directory is published or 
                updated (as applicable) under subsection 
                (a)(83); and
                  (B) received payment under the State plan in 
                the 12-month period preceding such date; and
          (2) in the case of a physician or provider of a 
        provider type for which the State agency does not 
        require such enrollment, a physician or provider that 
        received payment under the State plan (or a waiver of 
        the plan) in the 12-month period preceding the date on 
        which the directory is published or updated (as 
        applicable) under subsection (a)(83).
  (nn) Drug Review and Utilization Requirements.--
          (1) In general.--For purposes of subsection (a)(84), 
        the drug review and utilization requirements under this 
        subsection are, subject to paragraph (3) and beginning 
        October 1, 2019, the following:
                  (A) Claims review limitations.--
                          (i) In general.--The State has in 
                        place--
                                  (I) safety edits (as 
                                specified by the State) for 
                                subsequent fills for opioids 
                                and a claims review automated 
                                process (as designed and 
                                implemented by the State) that 
                                indicates when an individual 
                                enrolled under the State plan 
                                (or under a waiver of the State 
                                plan) is prescribed a 
                                subsequent fill of opioids in 
                                excess of any limitation that 
                                may be identified by the State;
                                  (II) safety edits (as 
                                specified by the State) on the 
                                maximum daily morphine 
                                equivalent that can be 
                                prescribed to an individual 
                                enrolled under the State plan 
                                (or under a waiver of the State 
                                plan) for treatment of chronic 
                                pain and a claims review 
                                automated process (as designed 
                                and implemented by the State) 
                                that indicates when an 
                                individual enrolled under the 
                                plan (or waiver) is prescribed 
                                the morphine equivalent for 
                                such treatment in excess of any 
                                limitation that may be 
                                identified by the State; and
                                  (III) a claims review 
                                automated process (as designed 
                                and implemented by the State) 
                                that monitors when an 
                                individual enrolled under the 
                                State plan (or under a waiver 
                                of the State plan) is 
                                concurrently prescribed opioids 
                                and--
                                          (aa) benzodiazepines; 
                                        or
                                          (bb) antipsychotics.
                          (ii) Managed care entities.--The 
                        State requires each managed care entity 
                        (as defined in section 1932(a)(1)(B)) 
                        with respect to which the State has a 
                        contract under section 1903(m) or under 
                        section 1905(t)(3) to have in place, 
                        subject to paragraph (3), with respect 
                        to individuals who are eligible for 
                        medical assistance under the State plan 
                        (or under a waiver of the State plan) 
                        and who are enrolled with the entity, 
                        the limitations described in subclauses 
                        (I) and (II) of clause (i) and a claims 
                        review automated process described in 
                        subclause (III) of such clause.
                          (iii) Rules of construction.--Nothing 
                        in this subparagraph may be construed 
                        as prohibiting a State or managed care 
                        entity from designing and implementing 
                        a claims review automated process under 
                        this subparagraph that provides for 
                        prospective or retrospective reviews of 
                        claims. Nothing in this subparagraph 
                        shall be understood as prohibiting the 
                        exercise of clinical judgment from a 
                        provider enrolled as a participating 
                        provider in a State plan (or waiver of 
                        the State plan) or contracting with a 
                        managed care entity regarding the best 
                        items and services for an individual 
                        enrolled under such State plan (or 
                        waiver).
                  (B) Program to monitor antipsychotic 
                medications by children.--The State has in 
                place a program (as designed and implemented by 
                the State), including such a program that the 
                State had in place before the date of the 
                enactment of this subsection, to monitor and 
                manage the appropriate use of antipsychotic 
                medications by children enrolled under the 
                State plan (or under a waiver of the State 
                plan) and submits annually to the Secretary 
                such information as the Secretary may require 
                on activities carried out under such program 
                for individuals not more than the age of 18 
                years generally and children in foster care 
                specifically.
                  (C) Fraud and abuse identification.--The 
                State has in place a process (as designed and 
                implemented by the State), including such a 
                process that the State had in place before the 
                date of the enactment of this subsection, that 
                identifies potential fraud or abuse of 
                controlled substances by individuals enrolled 
                under the State plan (or under a waiver of the 
                State plan), health care providers prescribing 
                drugs to individuals so enrolled, and 
                pharmacies dispensing drugs to individuals so 
                enrolled.
                  (D) Reports.--The State shall include in the 
                annual report submitted to the Secretary under 
                section 1927(g)(3)(D) information on the 
                limitations, requirement, program, and 
                processes applied by the State under 
                subparagraphs (A) through (C) in accordance 
                with such manner and time as specified by the 
                Secretary.
          (2) Annual report by secretary.--For each fiscal year 
        beginning with fiscal year 2020, the Secretary shall 
        submit to Congress a report on the most recent 
        information submitted by States under paragraph (1)(D).
          (3) Exceptions.--
                  (A) Certain individuals exempted.--The drug 
                review and utilization requirements under this 
                subsection shall not apply with respect to an 
                individual who--
                          (i) is receiving--
                                  (I) hospice or palliative 
                                care; or
                                  (II) treatment for cancer;
                          (ii) is a resident of a long-term 
                        care facility, of a facility described 
                        in section 1905(d), or of another 
                        facility for which frequently abused 
                        drugs are dispensed for residents 
                        through a contract with a single 
                        pharmacy; or
                          (iii) the State elects to treat as 
                        exempted from such requirements.
                  (B)  Exception relating to ensuring access.--
                In order to ensure reasonable access to health 
                care, the Secretary may waive the drug review 
                and utilization requirements under this 
                subsection, with respect to a State, in the 
                case of natural disasters and similar 
                situations, and in the case of the provision of 
                emergency services (as defined for purposes of 
                section 1860D-4(c)(5)(D)(ii)(II)).

           *       *       *       *       *       *       *


                  payment for covered outpatient drugs

  Sec. 1927. (a) Requirement for Rebate Agreement.--
          (1) In general.--In order for payment to be available 
        under section 1903(a) or under part B of title XVIII 
        for covered outpatient drugs of a manufacturer, the 
        manufacturer must have entered into and have in effect 
        a rebate agreement described in subsection (b) with the 
        Secretary, on behalf of States (except that, the 
        Secretary may authorize a State to enter directly into 
        agreements with a manufacturer), and must meet the 
        requirements of paragraph (5) (with respect to drugs 
        purchased by a covered entity on or after the first day 
        of the first month that begins after the date of the 
        enactment of title VI of the Veterans Health Care Act 
        of 1992) and paragraph (6). Any agreement between a 
        State and a manufacturer prior to April 1, 1991, shall 
        be deemed to have been entered into on January 1, 1991, 
        and payment to such manufacturer shall be retroactively 
        calculated as if the agreement between the manufacturer 
        and the State had been entered into on January 1, 1991. 
        If a manufacturer has not entered into such an 
        agreement before March 1, 1991, such an agreement, 
        subsequently entered into, shall become effective as of 
        the date on which the agreement is entered into or, at 
        State option, on any date thereafter on or before the 
        first day of the calendar quarter that begins more than 
        60 days after the date the agreement is entered into.
          (2) Effective date.--Paragraph (1) shall first apply 
        to drugs dispensed under this title on or after January 
        1, 1991.
          (3) Authorizing payment for drugs not covered under 
        rebate agreements.--Paragraph (1), and section 
        1903(i)(10)(A), shall not apply to the dispensing of a 
        single source drug or innovator multiple source drug if 
        (A)(i) the State has made a determination that the 
        availability of the drug is essential to the health of 
        beneficiaries under the State plan for medical 
        assistance; (ii) such drug has been given a rating of 
        1-A by the Food and Drug Administration; and (iii)(I) 
        the physician has obtained approval for use of the drug 
        in advance of its dispensing in accordance with a prior 
        authorization program described in subsection (d), or 
        (II) the Secretary has reviewed and approved the 
        State's determination under subparagraph (A); or (B) 
        the Secretary determines that in the first calendar 
        quarter of 1991, there were extenuating circumstances.
          (4) Effect on existing agreements.--In the case of a 
        rebate agreement in effect between a State and a 
        manufacturer on the date of the enactment of this 
        section, such agreement, for the initial agreement 
        period specified therein, shall be considered to be a 
        rebate agreement in compliance with this section with 
        respect to that State, if the State agrees to report to 
        the Secretary any rebates paid pursuant to the 
        agreement and such agreement provides for a minimum 
        aggregate rebate of 10 percent of the State's total 
        expenditures under the State plan for coverage of the 
        manufacturer's drugs under this title. If, after the 
        initial agreement period, the State establishes to the 
        satisfaction of the Secretary that an agreement in 
        effect on the date of the enactment of this section 
        provides for rebates that are at least as large as the 
        rebates otherwise required under this section, and the 
        State agrees to report any rebates under the agreement 
        to the Secretary, the agreement shall be considered to 
        be a rebate agreement in compliance with the section 
        for the renewal periods of such agreement.
          (5) Limitation on prices of drugs purchased by 
        covered entities.--
                  (A) Agreement with secretary.--A manufacturer 
                meets the requirements of this paragraph if the 
                manufacturer has entered into an agreement with 
                the Secretary that meets the requirements of 
                section 340B of the Public Health Service Act 
                with respect to covered outpatient drugs 
                purchased by a covered entity on or after the 
                first day of the first month that begins after 
                the date of the enactment of this paragraph.
                  (B) Covered entity defined.--In this 
                subsection, the term ``covered entity'' means 
                an entity described in section 340B(a)(4) of 
                the Public Health Service Act.
                  (C) Establishment of alternative mechanism to 
                ensure against duplicate discounts or 
                rebates.--If the Secretary does not establish a 
                mechanism under section 340B(a)(5)(A) of the 
                Public Health Service Act within 12 months of 
                the date of the enactment of such section, the 
                following requirements shall apply:
                          (i) Entities.--Each covered entity 
                        shall inform the single State agency 
                        under section 1902(a)(5) when it is 
                        seeking reimbursement from the State 
                        plan for medical assistance described 
                        in section 1905(a)(12) with respect to 
                        a unit of any covered outpatient drug 
                        which is subject to an agreement under 
                        section 340B(a) of such Act.
                          (ii) State agency.--Each such single 
                        State agency shall provide a means by 
                        which a covered entity shall indicate 
                        on any drug reimbursement claims form 
                        (or format, where electronic claims 
                        management is used) that a unit of the 
                        drug that is the subject of the form is 
                        subject to an agreement under section 
                        340B of such Act, and not submit to any 
                        manufacturer a claim for a rebate 
                        payment under subsection (b) with 
                        respect to such a drug.
                  (D) Effect of subsequent amendments.--In 
                determining whether an agreement under 
                subparagraph (A) meets the requirements of 
                section 340B of the Public Health Service Act, 
                the Secretary shall not take into account any 
                amendments to such section that are enacted 
                after the enactment of title VI of the Veterans 
                Health Care Act of 1992.
                  (E) Determination of compliance.--A 
                manufacturer is deemed to meet the requirements 
                of this paragraph if the manufacturer 
                establishes to the satisfaction of the 
                Secretary that the manufacturer would comply 
                (and has offered to comply) with the provisions 
                of section 340B of the Public Health Service 
                Act (as in effect immediately after the 
                enactment of this paragraph, and would have 
                entered into an agreement under such section 
                (as such section was in effect at such time), 
                but for a legislative change in such section 
                after the date of the enactment of this 
                paragraph.
                  (6) Requirements relating to master 
                agreements for drugs procured by department of 
                veterans affairs and certain other federal 
                agencies.--
                          (A) In general.--A manufacturer meets 
                        the requirements of this paragraph if 
                        the manufacturer complies with the 
                        provisions of section 8126 of title 38, 
                        United States Code, including the 
                        requirement of entering into a master 
                        agreement with the Secretary of 
                        Veterans Affairs under such section.
                          (B) Effect of subsequent 
                        amendments.--In determining whether a 
                        master agreement described in 
                        subparagraph (A) meets the requirements 
                        of section 8126 of title 38, United 
                        States Code, the Secretary shall not 
                        take into account any amendments to 
                        such section that are enacted after the 
                        enactment of title VI of the Veterans 
                        Health Care Act of 1992.
                          (C) Determination of compliance.--A 
                        manufacturer is deemed to meet the 
                        requirements of this paragraph if the 
                        manufacturer establishes to the 
                        satisfaction of the Secretary that the 
                        manufacturer would comply (and has 
                        offered to comply) with the provisions 
                        of section 8126 of title 38, United 
                        States Code (as in effect immediately 
                        after the enactment of this paragraph) 
                        and would have entered into an 
                        agreement under such section (as such 
                        section was in effect at such time), 
                        but for a legislative change in such 
                        section after the date of the enactment 
                        of this paragraph.
          (7) Requirement for submission of utilization data 
        for certain physician administered drugs.--
                  (A) Single source drugs.--In order for 
                payment to be available under section 1903(a) 
                for a covered outpatient drug that is a single 
                source drug that is physician administered 
                under this title (as determined by the 
                Secretary), and that is administered on or 
                after January 1, 2006, the State shall provide 
                for the collection and submission of such 
                utilization data and coding (such as J-codes 
                and National Drug Code numbers) for each such 
                drug as the Secretary may specify as necessary 
                to identify the manufacturer of the drug in 
                order to secure rebates under this section for 
                drugs administered for which payment is made 
                under this title.
                  (B) Multiple source drugs.--
                          (i) Identification of most frequently 
                        physician administered multiple source 
                        drugs.--Not later than January 1, 2007, 
                        the Secretary shall publish a list of 
                        the 20 physician administered multiple 
                        source drugs that the Secretary 
                        determines have the highest dollar 
                        volume of physician administered drugs 
                        dispensed under this title. The 
                        Secretary may modify such list from 
                        year to year to reflect changes in such 
                        volume.
                          (ii) Requirement.--In order for 
                        payment to be available under section 
                        1903(a) for a covered outpatient drug 
                        that is a multiple source drug that is 
                        physician administered (as determined 
                        by the Secretary), that is on the list 
                        published under clause (i), and that is 
                        administered on or after January 1, 
                        2008, the State shall provide for the 
                        submission of such utilization data and 
                        coding (such as J-codes and National 
                        Drug Code numbers) for each such drug 
                        as the Secretary may specify as 
                        necessary to identify the manufacturer 
                        of the drug in order to secure rebates 
                        under this section.
                  (C) Use of ndc codes.--Not later than January 
                1, 2007, the information shall be submitted 
                under subparagraphs (A) and (B)(ii) using 
                National Drug Code codes unless the Secretary 
                specifies that an alternative coding system 
                should be used.
                  (D) Hardship waiver.--The Secretary may delay 
                the application of subparagraph (A) or (B)(ii), 
                or both, in the case of a State to prevent 
                hardship to States which require additional 
                time to implement the reporting system required 
                under the respective subparagraph.
  (b) Terms of Rebate Agreement.--
          (1) Periodic rebates.--
                  (A) In general.--A rebate agreement under 
                this subsection shall require the manufacturer 
                to provide, to each State plan approved under 
                this title, a rebate for a rebate period in an 
                amount specified in subsection (c) for covered 
                outpatient drugs of the manufacturer dispensed 
                after December 31, 1990, for which payment was 
                made under the State plan for such period, 
                including such drugs dispensed to individuals 
                enrolled with a medicaid managed care 
                organization if the organization is responsible 
                for coverage of such drugs. Such rebate shall 
                be paid by the manufacturer not later than 30 
                days after the date of receipt of the 
                information described in paragraph (2) for the 
                period involved.
                  (B) Offset against medical assistance.--
                Amounts received by a State under this section 
                (or under an agreement authorized by the 
                Secretary under subsection (a)(1) or an 
                agreement described in subsection (a)(4)) in 
                any quarter shall be considered to be a 
                reduction in the amount expended under the 
                State plan in the quarter for medical 
                assistance for purposes of section 1903(a)(1).
                  (C) Special rule for increased minimum rebate 
                percentage.--
                          (i) In general.--In addition to the 
                        amounts applied as a reduction under 
                        subparagraph (B), for rebate periods 
                        beginning on or after January 1, 2010, 
                        during a fiscal year, the Secretary 
                        shall reduce payments to a State under 
                        section 1903(a) in the manner specified 
                        in clause (ii), in an amount equal to 
                        the product of--
                                  (I) 100 percent minus the 
                                Federal medical assistance 
                                percentage applicable to the 
                                rebate period for the State; 
                                and
                                  (II) the amounts received by 
                                the State under such 
                                subparagraph that are 
                                attributable (as estimated by 
                                the Secretary based on 
                                utilization and other data) to 
                                the increase in the minimum 
                                rebate percentage effected by 
                                the amendments made by 
                                subsections (a)(1), (b), and 
                                (d) of section 2501 of the 
                                Patient Protection and 
                                Affordable Care Act, taking 
                                into account the additional 
                                drugs included under the 
                                amendments made by subsection 
                                (c) of section 2501 of such 
                                Act.
                        The Secretary shall adjust such payment 
                        reduction for a calendar quarter to the 
                        extent the Secretary determines, based 
                        upon subsequent utilization and other 
                        data, that the reduction for such 
                        quarter was greater or less than the 
                        amount of payment reduction that should 
                        have been made.
                          (ii) Manner of payment reduction.--
                        The amount of the payment reduction 
                        under clause (i) for a State for a 
                        quarter shall be deemed an overpayment 
                        to the State under this title to be 
                        disallowed against the State's regular 
                        quarterly draw for all Medicaid 
                        spending under section 1903(d)(2). Such 
                        a disallowance is not subject to a 
                        reconsideration under section 1116(d).
          (2) State provision of information.--
                  (A) State responsibility.--Each State agency 
                under this title shall report to each 
                manufacturer not later than 60 days after the 
                end of each rebate period and in a form 
                consistent with a standard reporting format 
                established by the Secretary, information on 
                the total number of units of each dosage form 
                and strength and package size of each covered 
                outpatient drug dispensed after December 31, 
                1990, for which payment was made under the plan 
                during the period, including such information 
                reported by each medicaid managed care 
                organization, and shall promptly transmit a 
                copy of such report to the Secretary.
                  (B) Audits.--A manufacturer may audit the 
                information provided (or required to be 
                provided) under subparagraph (A). Adjustments 
                to rebates shall be made to the extent that 
                information indicates that utilization was 
                greater or less than the amount previously 
                specified.
          (3) Manufacturer provision of price information.--
                  (A) In general.--Each manufacturer with an 
                agreement in effect under this section shall 
                report to the Secretary--
                          (i) not later than 30 days after the 
                        last day of each rebate period under 
                        the agreement--
                          (I) on the average manufacturer price 
                        (as defined in subsection (k)(1)) for 
                        covered outpatient drugs for the rebate 
                        period under the agreement (including 
                        for all such drugs that are sold under 
                        a new drug application approved under 
                        section 505(c) of the Federal Food, 
                        Drug, and Cosmetic Act); and
                          (II) for single source drugs and 
                        innovator multiple source drugs 
                        (including all such drugs that are sold 
                        under a new drug application approved 
                        under section 505(c) of the Federal 
                        Food, Drug, and Cosmetic Act), on the 
                        manufacturer's best price (as defined 
                        in subsection (c)(1)(C)) for such drugs 
                        for the rebate period under the 
                        agreement;
                          (ii) not later than 30 days after the 
                        date of entering into an agreement 
                        under this section on the average 
                        manufacturer price (as defined in 
                        subsection (k)(1)) as of October 1, 
                        1990 for each of the manufacturer's 
                        covered outpatient drugs (including for 
                        such drugs that are sold under a new 
                        drug application approved under section 
                        505(c) of the Federal Food, Drug, and 
                        Cosmetic Act); and
                          (iii) for calendar quarters beginning 
                        on or after January 1, 2004, in 
                        conjunction with reporting required 
                        under clause (i) and by National Drug 
                        Code (including package size)--
                                  (I) the manufacturer's 
                                average sales price (as defined 
                                in section 1847A(c)) and the 
                                total number of units specified 
                                under section 1847A(b)(2)(A);
                                  (II) if required to make 
                                payment under section 1847A, 
                                the manufacturer's wholesale 
                                acquisition cost, as defined in 
                                subsection (c)(6) of such 
                                section; and
                                  (III) information on those 
                                sales that were made at a 
                                nominal price or otherwise 
                                described in section 
                                1847A(c)(2)(B);
                        for a drug or biological described in 
                        subparagraph (C), (D), (E), or (G) of 
                        section 1842(o)(1) or section 
                        1881(b)(13)(A)(ii), and, for calendar 
                        quarters beginning on or after January 
                        1, 2007 and only with respect to the 
                        information described in subclause 
                        (III), for covered outpatient drugs.
                          (iv) not later than 30 days after the 
                        last day of each month of a rebate 
                        period under the agreement, on the 
                        manufacturer's total number of units 
                        that are used to calculate the monthly 
                        average manufacturer price for each 
                        covered outpatient drug;
                Information reported under this subparagraph is 
                subject to audit by the Inspector General of 
                the Department of Health and Human Services. 
                Beginning July 1, 2006, the Secretary shall 
                provide on a monthly basis to States under 
                subparagraph (D)(iv) the most recently reported 
                average manufacturer prices for single source 
                drugs and for multiple source drugs and shall, 
                on at least a quarterly basis, update the 
                information posted on the website under 
                subparagraph (D)(v) (relating to the weighted 
                average of the most recently reported monthly 
                average manufacturer prices).
                  (B) Verification surveys of average 
                manufacturer price and manufacturer's average 
                sales price.--The Secretary may survey 
                wholesalers and manufacturers that directly 
                distribute their covered outpatient drugs, when 
                necessary, to verify manufacturer prices and 
                manufacturer's average sales prices (including 
                wholesale acquisition cost) if required to make 
                payment reported under subparagraph (A). The 
                Secretary may impose a civil monetary penalty 
                in an amount not to exceed $100,000 on a 
                wholesaler, manufacturer, or direct seller, if 
                the wholesaler, manufacturer, or direct seller 
                of a covered outpatient drug refuses a request 
                for information about charges or prices by the 
                Secretary in connection with a survey under 
                this subparagraph or knowingly provides false 
                information. The provisions of section 1128A 
                (other than subsections (a) (with respect to 
                amounts of penalties or additional assessments) 
                and (b)) shall apply to a civil money penalty 
                under this subparagraph in the same manner as 
                such provisions apply to a penalty or 
                proceeding under section 1128A(a).
                  (C) Penalties.--
                          (i) Failure to provide timely 
                        information.--In the case of a 
                        manufacturer with an agreement under 
                        this section that fails to provide 
                        information required under subparagraph 
                        (A) on a timely basis, the amount of 
                        the penalty shall be increased by 
                        $10,000 for each day in which such 
                        information has not been provided and 
                        such amount shall be paid to the 
                        Treasury, and, if such information is 
                        not reported within 90 days of the 
                        deadline imposed, the agreement shall 
                        be suspended for services furnished 
                        after the end of such 90-day period and 
                        until the date such information is 
                        reported (but in no case shall such 
                        suspension be for a period of less than 
                        30 days).
                          (ii) False information.--Any 
                        manufacturer with an agreement under 
                        this section that knowingly provides 
                        false information is subject to a civil 
                        money penalty in an amount not to 
                        exceed $100,000 for each item of false 
                        information. Such civil money penalties 
                        are in addition to other penalties as 
                        may be prescribed by law. The 
                        provisions of section 1128A (other than 
                        subsections (a) and (b)) shall apply to 
                        a civil money penalty under this 
                        subparagraph in the same manner as such 
                        provisions apply to a penalty or 
                        proceeding under section 1128A(a).
                  (D) Confidentiality of information.--
                Notwithstanding any other provision of law, 
                information disclosed by manufacturers or 
                wholesalers under this paragraph or under an 
                agreement with the Secretary of Veterans 
                Affairs described in subsection (a)(6)(A)(ii) 
                (other than the wholesale acquisition cost for 
                purposes of carrying out section 1847A) is 
                confidential and shall not be disclosed by the 
                Secretary or the Secretary of Veterans Affairs 
                or a State agency (or contractor therewith) in 
                a form which discloses the identity of a 
                specific manufacturer or wholesaler, prices 
                charged for drugs by such manufacturer or 
                wholesaler, except--
                          (i) as the Secretary determines to be 
                        necessary to carry out this section, to 
                        carry out section 1847A (including the 
                        determination and implementation of the 
                        payment amount), or to carry out 
                        section 1847B,
                          (ii) to permit the Comptroller 
                        General to review the information 
                        provided,
                          (iii) to permit the Director of the 
                        Congressional Budget Office to review 
                        the information provided,
                          (iv) to States to carry out this 
                        title, and
                          (v) to the Secretary to disclose 
                        (through a website accessible to the 
                        public) the weighted average of the 
                        most recently reported monthly average 
                        manufacturer prices and the average 
                        retail survey price determined for each 
                        multiple source drug in accordance with 
                        subsection (f).
                The previous sentence shall also apply to 
                information disclosed under section 1860D-
                2(d)(2) or 1860D-4(c)(2)(E) and drug pricing 
                data reported under the first sentence of 
                section 1860D-31(i)(1).
          (4) Length of agreement.--
                  (A) In general.--A rebate agreement shall be 
                effective for an initial period of not less 
                than 1 year and shall be automatically renewed 
                for a period of not less than one year unless 
                terminated under subparagraph (B).
                  (B) Termination.--
                          (i) By the secretary.--The Secretary 
                        may provide for termination of a rebate 
                        agreement for violation of the 
                        requirements of the agreement or other 
                        good cause shown. Such termination 
                        shall not be effective earlier than 60 
                        days after the date of notice of such 
                        termination. The Secretary shall 
                        provide, upon request, a manufacturer 
                        with a hearing concerning such a 
                        termination, but such hearing shall not 
                        delay the effective date of the 
                        termination.
                          (ii) By a manufacturer.--A 
                        manufacturer may terminate a rebate 
                        agreement under this section for any 
                        reason. Any such termination shall not 
                        be effective until the calendar quarter 
                        beginning at least 60 days after the 
                        date the manufacturer provides notice 
                        to the Secretary.
                          (iii) Effectiveness of termination.--
                        Any termination under this subparagraph 
                        shall not affect rebates due under the 
                        agreement before the effective date of 
                        its termination.
                          (iv) Notice to states.--In the case 
                        of a termination under this 
                        subparagraph, the Secretary shall 
                        provide notice of such termination to 
                        the States within not less than 30 days 
                        before the effective date of such 
                        termination.
                          (v) Application to terminations of 
                        other agreements.--The provisions of 
                        this subparagraph shall apply to the 
                        terminations of agreements described in 
                        section 340B(a)(1) of the Public Health 
                        Service Act and master agreements 
                        described in section 8126(a) of title 
                        38, United States Code.
                  (C) Delay before reentry.--In the case of any 
                rebate agreement with a manufacturer under this 
                section which is terminated, another such 
                agreement with the manufacturer (or a successor 
                manufacturer) may not be entered into until a 
                period of 1 calendar quarter has elapsed since 
                the date of the termination, unless the 
                Secretary finds good cause for an earlier 
                reinstatement of such an agreement.
  (c) Determination of Amount of Rebate.--
          (1) Basic rebate for single source drugs and 
        innovator multiple source drugs.--
                  (A) In general.--Except as provided in 
                paragraph (2), the amount of the rebate 
                specified in this subsection for a rebate 
                period (as defined in subsection (k)(8)) with 
                respect to each dosage form and strength of a 
                single source drug or an innovator multiple 
                source drug shall be equal to the product of--
                          (i) the total number of units of each 
                        dosage form and strength paid for under 
                        the State plan in the rebate period (as 
                        reported by the State); and
                          (ii) subject to subparagraph (B)(ii), 
                        the greater of--
                                  (I) the difference between 
                                the average manufacturer price 
                                and the best price (as defined 
                                in subparagraph (C)) for the 
                                dosage form and strength of the 
                                drug, or
                                  (II) the minimum rebate 
                                percentage (specified in 
                                subparagraph (B)(i)) of such 
                                average manufacturer price,
                        of or the rebate period.
                  (B) Range of rebates required.--
                          (i) Minimum rebate percentage.--For 
                        purposes of subparagraph (A)(ii)(II), 
                        the ``minimum rebate percentage'' for 
                        rebate periods beginning--
                                  (I) after December 31, 1990, 
                                and before October 1, 1992, is 
                                12.5 percent;
                                  (II) after September 30, 
                                1992, and before January 1, 
                                1994, is 15.7 percent;
                                  (III) after December 31, 
                                1993, and before January 1, 
                                1995, is 15.4 percent;
                                  (IV) after December 31, 1994, 
                                and before January 1, 1996, is 
                                15.2 percent;
                                  (V) after December 31, 1995, 
                                and before January 1, 2010 is 
                                15.1 percent;and
                                  (VI) except as provided in 
                                clause (iii), after December 
                                31, 2009, 23.1 percent.
                          (ii) Temporary limitation on maximum 
                        rebate amount.--In no case shall the 
                        amount applied under subparagraph 
                        (A)(ii) for a rebate period beginning--
                                  (I) before January 1, 1992, 
                                exceed 25 percent of the 
                                average manufacturer price; or
                                  (II) after December 31, 1991, 
                                and before January 1, 1993, 
                                exceed 50 percent of the 
                                average manufacturer price.
                          (iii) Minimum rebate percentage for 
                        certain drugs.--
                                  (I) In general.--In the case 
                                of a single source drug or an 
                                innovator multiple source drug 
                                described in subclause (II), 
                                the minimum rebate percentage 
                                for rebate periods specified in 
                                clause (i)(VI) is 17.1 percent.
                                  (II) Drug described.--For 
                                purposes of subclause (I), a 
                                single source drug or an 
                                innovator multiple source drug 
                                described in this subclause is 
                                any of the following drugs:
                                          (aa) A clotting 
                                        factor for which a 
                                        separate furnishing 
                                        payment is made under 
                                        section 1842(o)(5) and 
                                        which is included on a 
                                        list of such factors 
                                        specified and updated 
                                        regularly by the 
                                        Secretary.
                                          (bb) A drug approved 
                                        by the Food and Drug 
                                        Administration 
                                        exclusively for 
                                        pediatric indications.
                  (C) Best price defined.--For purposes of this 
                section--
                          (i) In general.--The term ``best 
                        price'' means, with respect to a single 
                        source drug or innovator multiple 
                        source drug of a manufacturer 
                        (including the lowest price available 
                        to any entity for any such drug of a 
                        manufacturer that is sold under a new 
                        drug application approved under section 
                        505(c) of the Federal Food, Drug, and 
                        Cosmetic Act), the lowest price 
                        available from the manufacturer during 
                        the rebate period to any wholesaler, 
                        retailer, provider, health maintenance 
                        organization, nonprofit entity, or 
                        governmental entity within the United 
                        States, excluding--
                                  (I) any prices charged on or 
                                after October 1, 1992, to the 
                                Indian Health Service, the 
                                Department of Veterans Affairs, 
                                a State home receiving funds 
                                under section 1741 of title 38, 
                                United States Code, the 
                                Department of Defense, the 
                                Public Health Service, or a 
                                covered entity described in 
                                subsection (a)(5)(B) (including 
                                inpatient prices charged to 
                                hospitals described in section 
                                340B(a)(4)(L) of the Public 
                                Health Service Act);
                                  (II) any prices charged under 
                                the Federal Supply Schedule of 
                                the General Services 
                                Administration;
                                  (III) any prices used under a 
                                State pharmaceutical assistance 
                                program;
                                  (IV) any depot prices and 
                                single award contract prices, 
                                as defined by the Secretary, of 
                                any agency of the Federal 
                                Government;
                                  (V) the prices negotiated 
                                from drug manufacturers for 
                                covered discount card drugs 
                                under an endorsed discount card 
                                program under section 1860D-31; 
                                and
                                  (VI) any prices charged which 
                                are negotiated by a 
                                prescription drug plan under 
                                part D of title XVIII, by an 
                                MA-PD plan under part C of such 
                                title with respect to covered 
                                part D drugs or by a qualified 
                                retiree prescription drug plan 
                                (as defined in section 1860D-
                                22(a)(2)) with respect to such 
                                drugs on behalf of individuals 
                                entitled to benefits under part 
                                A or enrolled under part B of 
                                such title, or any discounts 
                                provided by manufacturers under 
                                the Medicare coverage gap 
                                discount program under section 
                                1860D-14A.
                          (ii) Special rules.--The term ``best 
                        price''--
                                  (I) shall be inclusive of 
                                cash discounts, free goods that 
                                are contingent on any purchase 
                                requirement, volume discounts, 
                                and rebates (other than rebates 
                                under this section);
                                  (II) shall be determined 
                                without regard to special 
                                packaging, labeling, or 
                                identifiers on the dosage form 
                                or product or package;
                                  (III) shall not take into 
                                account prices that are merely 
                                nominal in amount; and
                          (IV) in the case of a manufacturer 
                        that approves, allows, or otherwise 
                        permits any other drug of the 
                        manufacturer to be sold under a new 
                        drug application approved under section 
                        505(c) of the Federal Food, Drug, and 
                        Cosmetic Act, shall be inclusive of the 
                        lowest price for such authorized drug 
                        available from the manufacturer during 
                        the rebate period to any manufacturer, 
                        wholesaler, retailer, provider, health 
                        maintenance organization, nonprofit 
                        entity, or governmental entity within 
                        the United States, excluding those 
                        prices described in subclauses (I) 
                        through (IV) of clause (i).
                          (iii) Application of auditing and 
                        recordkeeping requirements.--With 
                        respect to a covered entity described 
                        in section 340B(a)(4)(L) of the Public 
                        Health Service Act, any drug purchased 
                        for inpatient use shall be subject to 
                        the auditing and recordkeeping 
                        requirements described in section 
                        340B(a)(5)(C) of the Public Health 
                        Service Act.
                  (D) Limitation on sales at a nominal price.--
                          (i) In general.--For purposes of 
                        subparagraph (C)(ii)(III) and 
                        subsection (b)(3)(A)(iii)(III), only 
                        sales by a manufacturer of covered 
                        outpatient drugs at nominal prices to 
                        the following shall be considered to be 
                        sales at a nominal price or merely 
                        nominal in amount:
                                  (I) A covered entity 
                                described in section 340B(a)(4) 
                                of the Public Health Service 
                                Act.
                                  (II) An intermediate care 
                                facility for the mentally 
                                retarded.
                                  (III) A State-owned or 
                                operated nursing facility.
                                  (IV) An entity that--
                                          (aa) is described in 
                                        section 501(c)(3) of 
                                        the Internal Revenue 
                                        Code of 1986 and exempt 
                                        from tax under section 
                                        501(a) of such Act or 
                                        is State-owned or 
                                        operated; and
                                          (bb) would be a 
                                        covered entity 
                                        described in section 
                                        340(B)(a)(4) of the 
                                        Public Health Service 
                                        Act insofar as the 
                                        entity provides the 
                                        same type of services 
                                        to the same type of 
                                        populations as a 
                                        covered entity 
                                        described in such 
                                        section provides, but 
                                        does not receive 
                                        funding under a 
                                        provision of law 
                                        referred to in such 
                                        section;
                                  (V) A public or nonprofit 
                                entity, or an entity based at 
                                an institution of higher 
                                learning whose primary purpose 
                                is to provide health care 
                                services to students of that 
                                institution, that provides a 
                                service or services described 
                                under section 1001(a) of the 
                                Public Health Service Act, 42 
                                U.S.C. 300.
                                  (VI) Any other facility or 
                                entity that the Secretary 
                                determines is a safety net 
                                provider to which sales of such 
                                drugs at a nominal price would 
                                be appropriate based on the 
                                factors described in clause 
                                (ii).
                          (ii) Factors.--The factors described 
                        in this clause with respect to a 
                        facility or entity are the following:
                                  (I) The type of facility or 
                                entity.
                                  (II) The services provided by 
                                the facility or entity.
                                  (III) The patient population 
                                served by the facility or 
                                entity.
                                  (IV) The number of other 
                                facilities or entities eligible 
                                to purchase at nominal prices 
                                in the same service area.
                          (iii) Nonapplication.--Clause (i) 
                        shall not apply with respect to sales 
                        by a manufacturer at a nominal price of 
                        covered outpatient drugs pursuant to a 
                        master agreement under section 8126 of 
                        title 38, United States Code.
                          (iv) Rule of Construction.--Nothing 
                        in this subparagraph shall be construed 
                        to alter any existing statutory or 
                        regulatory prohibition on services with 
                        respect to an entity described in 
                        clause (i)(IV), including the 
                        prohibition set forth in section 1008 
                        of the Public Health Service Act.
          (2) Additional rebate for single source and innovator 
        multiple source drugs.--
                  (A) In general.--The amount of the rebate 
                specified in this subsection for a rebate 
                period, with respect to each dosage form and 
                strength of a single source drug or an 
                innovator multiple source drug, shall be 
                increased by an amount equal to the product 
                of--
                          (i) the total number of units of such 
                        dosage form and strength dispensed 
                        after December 31, 1990, for which 
                        payment was made under the State plan 
                        for the rebate period; and
                          (ii) the amount (if any) by which--
                                  (I) the average manufacturer 
                                price for the dosage form and 
                                strength of the drug for the 
                                period, exceeds
                                  (II) the average manufacturer 
                                price for such dosage form and 
                                strength for the calendar 
                                quarter beginning July 1, 1990 
                                (without regard to whether or 
                                not the drug has been sold or 
                                transferred to an entity, 
                                including a division or 
                                subsidiary of the manufacturer, 
                                after the first day of such 
                                quarter), increased by the 
                                percentage by which the 
                                consumer price index for all 
                                urban consumers (United States 
                                city average) for the month 
                                before the month in which the 
                                rebate period begins exceeds 
                                such index for September 1990.
                  (B) Treatment of subsequently approved 
                drugs.--In the case of a covered outpatient 
                drug approved by the Food and Drug 
                Administration after October 1, 1990, clause 
                (ii)(II) of subparagraph (A) shall be applied 
                by substituting ``the first full calendar 
                quarter after the day on which the drug was 
                first marketed'' for ``the calendar quarter 
                beginning July 1, 1990'' and ``the month prior 
                to the first month of the first full calendar 
                quarter after the day on which the drug was 
                first marketed'' for ``September 1990''.
                  (C) Treatment of new formulations.--
                          (i) In general.--In the case of a 
                        drug that is a line extension of a 
                        single source drug or an innovator 
                        multiple source drug that is an oral 
                        solid dosage form, the rebate 
                        obligation for a rebate period with 
                        respect to such drug under this 
                        subsection shall be the greater of the 
                        amount described in clause (ii) for 
                        such drug or the amount described in 
                        clause (iii) for such drug.
                          (ii) Amount 1.--For purposes of 
                        clause (i), the amount described in 
                        this clause with respect to a drug 
                        described in clause (i) and rebate 
                        period is the amount computed under 
                        paragraph (1) for such drug, increased 
                        by the amount computed under 
                        subparagraph (A) and, as applicable, 
                        subparagraph (B) for such drug and 
                        rebate period.
                          (iii) Amount 2.--For purposes of 
                        clause (i), the amount described in 
                        this clause with respect to a drug 
                        described in clause (i) and rebate 
                        period is the amount computed under 
                        paragraph (1) for such drug, increased 
                        by the product of--
                                  (I) the average manufacturer 
                                price for the rebate period of 
                                the line extension of a single 
                                source drug or an innovator 
                                multiple source drug that is an 
                                oral solid dosage form;
                                  (II) the highest additional 
                                rebate (calculated as a 
                                percentage of average 
                                manufacturer price) under this 
                                paragraph for the rebate period 
                                for any strength of the 
                                original single source drug or 
                                innovator multiple source drug; 
                                and
                                  (III) the total number of 
                                units of each dosage form and 
                                strength of the line extension 
                                product paid for under the 
                                State plan in the rebate period 
                                (as reported by the State).
                In this subparagraph, the term ``line 
                extension'' means, with respect to a drug, a 
                new formulation of the drug, such as an 
                extended release formulation, but does not 
                include an abuse-deterrent formulation of the 
                drug (as determined by the Secretary), 
                regardless of whether such abuse-deterrent 
                formulation is an extended release formulation.
                  (D) Maximum rebate amount.--In no case shall 
                the sum of the amounts applied under paragraph 
                (1)(A)(ii) and this paragraph with respect to 
                each dosage form and strength of a single 
                source drug or an innovator multiple source 
                drug for a rebate period beginning after 
                December 31, 2009, exceed 100 percent of the 
                average manufacturer price of the drug.
          (3) Rebate for other drugs.--
                  (A) In general.--Except as provided in 
                subparagraph (C), the amount of the rebate paid 
                to a State for a rebate period with respect to 
                each dosage form and strength of covered 
                outpatient drugs (other than single source 
                drugs and innovator multiple source drugs) 
                shall be equal to the product of--
                          (i) the applicable percentage (as 
                        described in subparagraph (B)) of the 
                        average manufacturer price for the 
                        dosage form and strength for the rebate 
                        period, and
                          (ii) the total number of units of 
                        such dosage form and strength dispensed 
                        after December 31, 1990, for which 
                        payment was made under the State plan 
                        for the rebate period.
                  (B) Applicable percentage defined.--For 
                purposes of subparagraph (A)(i), the 
                ``applicable percentage'' for rebate periods 
                beginning--
                          (i) before January 1, 1994, is 10 
                        percent,
                          (ii) after December 31, 1993, and 
                        before January 1, 2010, is 11 percent; 
                        and
                          (iii) after December 31, 2009, is 13 
                        percent.
                  (C) Additional rebate.--
                          (i) In general.--The amount of the 
                        rebate specified in this paragraph for 
                        a rebate period, with respect to each 
                        dosage form and strength of a covered 
                        outpatient drug other than a single 
                        source drug or an innovator multiple 
                        source drug of a manufacturer, shall be 
                        increased in the manner that the rebate 
                        for a dosage form and strength of a 
                        single source drug or an innovator 
                        multiple source drug is increased under 
                        subparagraphs (A) and (D) of paragraph 
                        (2), except as provided in clause (ii).
                          (ii) Special rules for application of 
                        provision.--In applying subparagraphs 
                        (A) and (D) of paragraph (2) under 
                        clause (i)--
                                  (I) the reference in 
                                subparagraph (A)(i) of such 
                                paragraph to ``1990'' shall be 
                                deemed a reference to ``2014'';
                                  (II) subject to clause (iii), 
                                the reference in subparagraph 
                                (A)(ii) of such paragraph to 
                                ``the calendar quarter 
                                beginning July 1, 1990'' shall 
                                be deemed a reference to ``the 
                                calendar quarter beginning July 
                                1, 2014''; and
                                  (III) subject to clause 
                                (iii), the reference in 
                                subparagraph (A)(ii) of such 
                                paragraph to ``September 1990'' 
                                shall be deemed a reference to 
                                ``September 2014'';
                                  (IV) the references in 
                                subparagraph (D) of such 
                                paragraph to ``paragraph 
                                (1)(A)(ii)'', ``this 
                                paragraph'', and ``December 31, 
                                2009'' shall be deemed 
                                references to ``subparagraph 
                                (A)'', ``this subparagraph'', 
                                and ``December 31, 2014'', 
                                respectively; and
                                  (V) any reference in such 
                                paragraph to a ``single source 
                                drug or an innovator multiple 
                                source drug'' shall be deemed 
                                to be a reference to a drug to 
                                which clause (i) applies.
                          (iii) Special rule for certain 
                        noninnovator multiple source drugs.--In 
                        applying paragraph (2)(A)(ii)(II) under 
                        clause (i) with respect to a covered 
                        outpatient drug that is first marketed 
                        as a drug other than a single source 
                        drug or an innovator multiple source 
                        drug after April 1, 2013, such 
                        paragraph shall be applied--
                                  (I) by substituting ``the 
                                applicable quarter'' for ``the 
                                calendar quarter beginning July 
                                1, 1990''; and
                                  (II) by substituting ``the 
                                last month in such applicable 
                                quarter'' for ``September 
                                1990''.
                          (iv) Applicable quarter defined.--In 
                        this subsection, the term ``applicable 
                        quarter'' means, with respect to a drug 
                        described in clause (iii), the fifth 
                        full calendar quarter after which the 
                        drug is marketed as a drug other than a 
                        single source drug or an innovator 
                        multiple source drug.
  (d) Limitations on Coverage of Drugs.--
          (1) Permissible restrictions.--(A) A State may 
        subject to prior authorization any covered outpatient 
        drug. Any such prior authorization program shall comply 
        with the requirements of paragraph (5).
          (B) A State may exclude or otherwise restrict 
        coverage of a covered outpatient drug if--
                  (i) the prescribed use is not for a medically 
                accepted indication (as defined in subsection 
                (k)(6));
                  (ii) the drug is contained in the list 
                referred to in paragraph (2);
                  (iii) the drug is subject to such 
                restrictions pursuant to an agreement between a 
                manufacturer and a State authorized by the 
                Secretary under subsection (a)(1) or in effect 
                pursuant to subsection (a)(4); or
                  (iv) the State has excluded coverage of the 
                drug from its formulary established in 
                accordance with paragraph (4).
          (2) List of drugs subject to restriction.--The 
        following drugs or classes of drugs, or their medical 
        uses, may be excluded from coverage or otherwise 
        restricted:
                  (A) Agents when used for anorexia, weight 
                loss, or weight gain.
                  (B) Agents when used to promote fertility.
                  (C) Agents when used for cosmetic purposes or 
                hair growth.
                  (D) Agents when used for the symptomatic 
                relief of cough and colds.
                  (E) Prescription vitamins and mineral 
                products, except prenatal vitamins and fluoride 
                preparations.
                  (F) Nonprescription drugs, except, in the 
                case of pregnant women when recommended in 
                accordance with the Guideline referred to in 
                section 1905(bb)(2)(A), agents approved by the 
                Food and Drug Administration under the over-
                the-counter monograph process for purposes of 
                promoting, and when used to promote, tobacco 
                cessation.
                  (G) Covered outpatient drugs which the 
                manufacturer seeks to require as a condition of 
                sale that associated tests or monitoring 
                services be purchased exclusively from the 
                manufacturer or its designee.
                  (H) Agents when used for the treatment of 
                sexual or erectile dysfunction, unless such 
                agents are used to treat a condition, other 
                than sexual or erectile dysfunction, for which 
                the agents have been approved by the Food and 
                Drug Administration.
          (3) Update of drug listings.--The Secretary shall, by 
        regulation, periodically update the list of drugs or 
        classes of drugs described in paragraph (2) or their 
        medical uses, which the Secretary has determined, based 
        on data collected by surveillance and utilization 
        review programs of State medical assistance programs, 
        to be subject to clinical abuse or inappropriate use.
          (4) Requirements for formularies.--A State may 
        establish a formulary if the formulary meets the 
        following requirements:
                  (A) The formulary is developed by a committee 
                consisting of physicians, pharmacists, and 
                other appropriate individuals appointed by the 
                Governor of the State (or, at the option of the 
                State, the State's drug use review board 
                established under subsection (g)(3)).
                  (B) Except as provided in subparagraph (C), 
                the formulary includes the covered outpatient 
                drugs of any manufacturer which has entered 
                into and complies with an agreement under 
                subsection (a) (other than any drug excluded 
                from coverage or otherwise restricted under 
                paragraph (2)).
                  (C) A covered outpatient drug may be excluded 
                with respect to the treatment of a specific 
                disease or condition for an identified 
                population (if any) only if, based on the 
                drug's labeling (or, in the case of a drug the 
                prescribed use of which is not approved under 
                the Federal Food, Drug, and Cosmetic Act but is 
                a medically accepted indication, based on 
                information from the appropriate compendia 
                described in subsection (k)(6)), the excluded 
                drug does not have a significant, clinically 
                meaningful therapeutic advantage in terms of 
                safety, effectiveness, or clinical outcome of 
                such treatment for such population over other 
                drugs included in the formulary and there is a 
                written explanation (available to the public) 
                of the basis for the exclusion.
                  (D) The State plan permits coverage of a drug 
                excluded from the formulary (other than any 
                drug excluded from coverage or otherwise 
                restricted under paragraph (2)) pursuant to a 
                prior authorization program that is consistent 
                with paragraph (5).
                  (E) The formulary meets such other 
                requirements as the Secretary may impose in 
                order to achieve program savings consistent 
                with protecting the health of program 
                beneficiaries.
        A prior authorization program established by a State 
        under paragraph (5) is not a formulary subject to the 
        requirements of this paragraph.
          (5) Requirements of prior authorization programs.--A 
        State plan under this title may require, as a condition 
        of coverage or payment for a covered outpatient drug 
        for which Federal financial participation is available 
        in accordance with this section, with respect to drugs 
        dispensed on or after July 1, 1991, the approval of the 
        drug before its dispensing for any medically accepted 
        indication (as defined in subsection (k)(6)) only if 
        the system providing for such approval--
                  (A) provides response by telephone or other 
                telecommunication device within 24 hours of a 
                request for prior authorization; and
                  (B) except with respect to the drugs on the 
                list referred to in paragraph (2), provides for 
                the dispensing of at least 72-hour supply of a 
                covered outpatient prescription drug in an 
                emergency situation (as defined by the 
                Secretary).
          (6) Other permissible restrictions.--A State may 
        impose limitations, with respect to all such drugs in a 
        therapeutic class, on the minimum or maximum quantities 
        per prescription or on the number of refills, if such 
        limitations are necessary to discourage waste, and may 
        address instances of fraud or abuse by individuals in 
        any manner authorized under this Act.
          (7) Non-excludable drugs.--The following drugs or 
        classes of drugs, or their medical uses, shall not be 
        excluded from coverage:
                  (A) Agents when used to promote smoking 
                cessation, including agents approved by the 
                Food and Drug Administration under the over-
                the-counter monograph process for purposes of 
                promoting, and when used to promote, tobacco 
                cessation.
                  (B) Barbiturates.
                  (C) Benzodiazepines.
  (e) Treatment of Pharmacy Reimbursement Limits.--
          (1) In general.--During the period beginning on 
        January 1, 1991, and ending on December 31, 1994--
                  (A) a State may not reduce the payment limits 
                established by regulation under this title or 
                any limitation described in paragraph (3) with 
                respect to the ingredient cost of a covered 
                outpatient drug or the dispensing fee for such 
                a drug below the limits in effect as of January 
                1, 1991, and
                  (B) except as provided in paragraph (2), the 
                Secretary may not modify by regulation the 
                formula established under sections 447.331 
                through 447.334 of title 42, Code of Federal 
                Regulations, in effect on November 5, 1990, to 
                reduce the limits described in subparagraph 
                (A).
          (2) Special rule.--If a State is not in compliance 
        with the regulations described in paragraph (1)(B), 
        paragraph (1)(A) shall not apply to such State until 
        such State is in compliance with such regulations.
          (3) Effect on state maximum allowable cost 
        limitations.--This section shall not supersede or 
        affect provisions in effect prior to January 1, 1991, 
        or after December 31, 1994, relating to any maximum 
        allowable cost limitation established by a State for 
        payment by the State for covered outpatient drugs, and 
        rebates shall be made under this section without regard 
        to whether or not payment by the State for such drugs 
        is subject to such a limitation or the amount of such a 
        limitation.
          (4) Establishment of upper payment Limits.--Subject 
        to paragraph (5), the Secretary shall establish a 
        Federal upper reimbursement limit for each multiple 
        source drug for which the FDA has rated three or more 
        products therapeutically and pharmaceutically 
        equivalent, regardless of whether all such additional 
        formulations are rated as such and shall use only such 
        formulations when determining any such upper limit.
          (5) Use of amp in upper payment limits.--The 
        Secretary shall calculate the Federal upper 
        reimbursement limit established under paragraph (4) as 
        no less than 175 percent of the weighted average 
        (determined on the basis of utilization) of the most 
        recently reported monthly average manufacturer prices 
        for pharmaceutically and therapeutically equivalent 
        multiple source drug products that are available for 
        purchase by retail community pharmacies on a nationwide 
        basis. The Secretary shall implement a smoothing 
        process for average manufacturer prices. Such process 
        shall be similar to the smoothing process used in 
        determining the average sales price of a drug or 
        biological under section 1847A.
  (f) Survey of Retail Prices; State Payment and Utilization 
Rates; and Performance Rankings.--
          (1) Survey of retail prices.--
                  (A) Use of vendor.--The Secretary may 
                contract services for--
                          (i) with respect to a retail 
                        community pharmacy, the determination 
                        on a monthly basis of retail survey 
                        prices for covered outpatient drugs 
                        that represent a nationwide average of 
                        consumer purchase prices for such 
                        drugs, net of all discounts and rebates 
                        (to the extent any information with 
                        respect to such discounts and rebates 
                        is available); and
                          (ii) the notification of the 
                        Secretary when a drug product that is 
                        therapeutically and pharmaceutically 
                        equivalent and bioequivalent becomes 
                        generally available.
                  (B) Secretary response to notification of 
                availability of multiple source products.--If 
                contractor notifies the Secretary under 
                subparagraph (A)(ii) that a drug product 
                described in such subparagraph has become 
                generally available, the Secretary shall make a 
                determination, within 7 days after receiving 
                such notification, as to whether the product is 
                now described in subsection (e)(4).
                  (C) Use of competitive bidding.--In 
                contracting for such services, the Secretary 
                shall competitively bid for an outside vendor 
                that has a demonstrated history in--
                          (i) surveying and determining, on a 
                        representative nationwide basis, retail 
                        prices for ingredient costs of 
                        prescription drugs;
                          (ii) working with retail community 
                        pharmacies, commercial payers, and 
                        States in obtaining and disseminating 
                        such price information; and
                          (iii) collecting and reporting such 
                        price information on at least a monthly 
                        basis.
                In contracting for such services, the Secretary 
                may waive such provisions of the Federal 
                Acquisition Regulation as are necessary for the 
                efficient implementation of this subsection, 
                other than provisions relating to 
                confidentiality of information and such other 
                provisions as the Secretary determines 
                appropriate.
                  (D) Additional provisions.--A contract with a 
                vendor under this paragraph shall include such 
                terms and conditions as the Secretary shall 
                specify, including the following:
                          (i) The vendor must monitor the 
                        marketplace and report to the Secretary 
                        each time there is a new covered 
                        outpatient drug generally available.
                          (ii) The vendor must update the 
                        Secretary no less often than monthly on 
                        the retail survey prices for covered 
                        outpatient drugs.
                          (iii) The contract shall be effective 
                        for a term of 2 years.
                  (E) Availability of information to states.--
                Information on retail survey prices obtained 
                under this paragraph, including applicable 
                information on single source drugs, shall be 
                provided to States on at least a monthly basis. 
                The Secretary shall devise and implement a 
                means for providing access to each State agency 
                designated under section 1902(a)(5) with 
                responsibility for the administration or 
                supervision of the administration of the State 
                plan under this title of the retail survey 
                price determined under this paragraph.
          (2) Annual state report.--Each State shall annually 
        report to the Secretary information on--
                  (A) the payment rates under the State plan 
                under this title for covered outpatient drugs;
                  (B) the dispensing fees paid under such plan 
                for such drugs; and
                  (C) utilization rates for noninnovator 
                multiple source drugs under such plan.
          (3) Annual state performance rankings.--
                  (A) Comparative analysis.--The Secretary 
                annually shall compare, for the 50 most widely 
                prescribed drugs identified by the Secretary, 
                the national retail sales price data (collected 
                under paragraph (1)) for such drugs with data 
                on prices under this title for each such drug 
                for each State.
                  (B) Availability of information.--The 
                Secretary shall submit to Congress and the 
                States full information regarding the annual 
                rankings made under subparagraph (A).
          (4) Appropriation.--Out of any funds in the Treasury 
        not otherwise appropriated, there is appropriated to 
        the Secretary of Health and Human Services $5,000,000 
        for each of fiscal years 2006 through 2010 to carry out 
        this subsection.
  (g) Drug Use Review.--
          (1) In general.--
                  (A) In order to meet the requirement [of 
                section 1903(i)(10)(B)] of section 1902(a)(54) 
                , a State shall provide[, by not later than 
                January 1, 1993,] for a drug use review program 
                described in paragraph (2) for covered 
                outpatient drugs in order to assure that 
                prescriptions (i) are appropriate, (ii) are 
                medically necessary, and (iii) are not likely 
                to result in adverse medical results. The 
                program shall be designed to educate physicians 
                and pharmacists to identify and reduce the 
                frequency of patterns of fraud, abuse, gross 
                overuse, excessive utilization, [or 
                inappropriate or medically unnecessary care] 
                inappropriate or medically unnecessary care, or 
                prescribing or billing practices that indicate 
                abuse or excessive utilization , among 
                physicians, pharmacists, and patients, or 
                associated with specific drugs or groups of 
                drugs, as well as potential and actual severe 
                adverse reactions to drugs including education 
                on therapeutic appropriateness, overutilization 
                and underutilization, appropriate use of 
                generic products, therapeutic duplication, 
                drug-disease contraindications, drug-drug 
                interactions, incorrect drug dosage or duration 
                of drug treatment, drug-allergy interactions, 
                and clinical abuse/misuse.
                  (B) The program shall assess data on drug use 
                against predetermined standards, consistent 
                with the following:
                          (i) compendia which shall consist of 
                        the following:
                                  (I) American Hospital 
                                Formulary Service Drug 
                                Information;
                                  (II) United States 
                                Pharmacopeia-Drug Information 
                                (or its successor 
                                publications); and
                                  (III) the DRUGDEX Information 
                                System; and
                          (ii) the peer-reviewed medical 
                        literature.
                  (C) The Secretary, under the procedures 
                established in section 1903, shall pay to each 
                State an amount equal to 75 per centum of so 
                much of the sums expended by the State plan 
                during calendar years 1991 through 1993 as the 
                Secretary determines is attributable to the 
                statewide adoption of a drug use review program 
                which conforms to the requirements of this 
                subsection.
                  (D) States shall not be required to perform 
                additional drug use reviews with respect to 
                drugs dispensed to residents of nursing 
                facilities which are in compliance with the 
                drug regimen review procedures prescribed by 
                the Secretary for such facilities in 
                regulations implementing section 1919, 
                currently at section 483.60 of title 42, Code 
                of Federal Regulations.
          (2) Description of program.--Each drug use review 
        program shall meet the following requirements for 
        covered outpatient drugs:
                  (A) Prospective drug review.--(i) The State 
                plan shall provide for a review of drug therapy 
                before each prescription is filled or delivered 
                to an individual receiving benefits under this 
                title, typically at the point-of-sale or point 
                of distribution. The review shall include 
                screening for potential drug therapy problems 
                due to therapeutic duplication, drug-disease 
                contraindications, drug-drug interactions 
                (including serious interactions with 
                nonprescription or over-the-counter drugs), 
                incorrect drug dosage or duration of drug 
                treatment, drug-allergy interactions, and 
                clinical abuse/misuse. Each State shall use the 
                compendia and literature referred to in 
                paragraph (1)(B) as its source of standards for 
                such review.
                  (ii) As part of the State's prospective drug 
                use review program under this subparagraph 
                applicable State law shall establish standards 
                for counseling of individuals receiving 
                benefits under this title by pharmacists which 
                includes at least the following:
                          (I) The pharmacist must offer to 
                        discuss with each individual receiving 
                        benefits under this title or caregiver 
                        of such individual (in person, whenever 
                        practicable, or through access to a 
                        telephone service which is toll-free 
                        for long-distance calls) who presents a 
                        prescription, matters which in the 
                        exercise of the pharmacist's 
                        professional judgment (consistent with 
                        State law respecting the provision of 
                        such information), the pharmacist deems 
                        significant including the following:
                                  (aa) The name and description 
                                of the medication.
                                  (bb) The route, dosage form, 
                                dosage, route of 
                                administration, and duration of 
                                drug therapy.
                                  (cc) Special directions and 
                                precautions for preparation, 
                                administration and use by the 
                                patient.
                                  (dd) Common severe side or 
                                adverse effects or interactions 
                                and therapeutic 
                                contraindications that may be 
                                encountered, including their 
                                avoidance, and the action 
                                required if they occur.
                                  (ee) Techniques for self-
                                monitoring drug therapy.
                                  (ff) Proper storage.
                                  (gg) Prescription refill 
                                information.
                                  (hh) Action to be taken in 
                                the event of a missed dose.
                          (II) A reasonable effort must be made 
                        by the pharmacist to obtain, record, 
                        and maintain at least the following 
                        information regarding individuals 
                        receiving benefits under this title:
                                  (aa) Name, address, telephone 
                                number, date of birth (or age) 
                                and gender.
                                  (bb) Individual history where 
                                significant, including disease 
                                state or states, known 
                                allergies and drug reactions, 
                                and a comprehensive list of 
                                medications and relevant 
                                devices.
                                  (cc) Pharmacist comments 
                                relevant to the individual's 
                                drug therapy.
                Nothing in this clause shall be construed as 
                requiring a pharmacist to provide consultation 
                when an individual receiving benefits under 
                this title or caregiver of such individual 
                refuses such consultation, or to require 
                verification of the offer to provide 
                consultation or a refusal of such offer.
                  (B) Retrospective drug use review.--The 
                program shall provide, through its mechanized 
                drug claims processing and information 
                retrieval systems (approved by the Secretary 
                under section 1903(r)) or otherwise, for the 
                ongoing periodic examination of claims data and 
                other records in order to identify patterns of 
                fraud, abuse, gross overuse, excessive 
                utilization, [or inappropriate or medically 
                unnecessary care] inappropriate or medically 
                unnecessary care, or prescribing or billing 
                practices that indicate abuse or excessive 
                utilization , among physicians, pharmacists and 
                individuals receiving benefits under this 
                title, or associated with specific drugs or 
                groups of drugs. In the case that the program 
                identifies a pattern described in the previous 
                sentence, the State shall take such remedial 
                actions as determined necessary to address such 
                pattern.
                  (C) Application of standards.--The program 
                shall, on an ongoing basis, assess data on drug 
                use against explicit predetermined standards 
                (using the compendia and literature referred to 
                in subsection (1)(B) as the source of standards 
                for such assessment) including but not limited 
                to monitoring for therapeutic appropriateness, 
                overutilization and underutilization, 
                appropriate use of generic products, 
                therapeutic duplication, drug-disease 
                contraindications, drug-drug interactions, 
                incorrect drug dosage or duration of drug 
                treatment, and clinical abuse/misuse and, as 
                necessary, introduce remedial strategies, in 
                order to improve the quality of care and to 
                conserve program funds or personal 
                expenditures.
                  (D) Educational program.--The program shall, 
                through its State drug use review board 
                established under paragraph (3), either 
                directly or through contracts with accredited 
                health care educational institutions, State 
                medical societies or State pharmacists 
                associations/societies or other organizations 
                as specified by the State, and using data 
                provided by the State drug use review board on 
                common drug therapy problems, provide for 
                active and ongoing educational outreach 
                programs (including the activities described in 
                paragraph (3)(C)(iii) of this subsection) to 
                educate practitioners on common drug therapy 
                problems with the aim of improving prescribing 
                or dispensing practices.
          (3) State drug use review board.--
                  (A) Establishment.--Each State shall provide 
                for the establishment of a drug use review 
                board (hereinafter referred to as the ``DUR 
                Board'') either directly or through a contract 
                with a private organization.
                  (B) Membership.--The membership of the DUR 
                Board shall include health care professionals 
                who have recognized knowledge and expertise in 
                one or more of the following:
                          (i) The clinically appropriate 
                        prescribing of covered outpatient 
                        drugs.
                          (ii) The clinically appropriate 
                        dispensing and monitoring of covered 
                        outpatient drugs.
                          (iii) Drug use review, evaluation, 
                        and intervention.
                          (iv) Medical quality assurance.
                The membership of the DUR Board shall be made 
                up at least \1/3\ but no more than 51 percent 
                licensed and actively practicing physicians and 
                at least \1/3\ licensed and actively practicing 
                pharmacists.
                  (C) Activities.--The activities of the DUR 
                Board shall include but not be limited to the 
                following:
                          (i) Retrospective DUR as defined in 
                        section (2)(B).
                          (ii) Application of standards as 
                        defined in section (2)(C).
                          (iii) Ongoing interventions for 
                        physicians and pharmacists, targeted 
                        toward therapy problems or individuals 
                        identified in the course of 
                        retrospective drug use reviews 
                        performed under this subsection. 
                        Intervention programs shall include, in 
                        appropriate instances, at least:
                                  (I) information dissemination 
                                sufficient to ensure the ready 
                                availability to physicians and 
                                pharmacists in the State of 
                                information concerning its 
                                duties, powers, and basis for 
                                its standards;
                                  (II) written, oral, or 
                                electronic reminders containing 
                                patient-specific or drug-
                                specific (or both) information 
                                and suggested changes in 
                                prescribing or dispensing 
                                practices, communicated in a 
                                manner designed to ensure the 
                                privacy of patient-related 
                                information;
                                  (III) use of face-to-face 
                                discussions between health care 
                                professionals who are experts 
                                in rational drug therapy and 
                                selected prescribers and 
                                pharmacists who have been 
                                targeted for educational 
                                intervention, including 
                                discussion of optimal 
                                prescribing, dispensing, or 
                                pharmacy care practices, and 
                                follow-up face-to-face 
                                discussions; and
                                  (IV) intensified review or 
                                monitoring of selected 
                                prescribers or dispensers.
                The Board shall re-evaluate interventions after 
                an appropriate period of time to determine if 
                the intervention improved the quality of drug 
                therapy, to evaluate the success of the 
                interventions and make modifications as 
                necessary.
                  (D) Annual report.--Each State shall require 
                the DUR Board to prepare a report on an annual 
                basis. The State shall submit a report on an 
                annual basis to the Secretary which shall 
                include a description of the activities of the 
                Board, including the nature and scope of the 
                prospective and retrospective drug use review 
                programs, a summary of the interventions used, 
                an assessment of the impact of these 
                educational interventions on quality of care, 
                and an estimate of the cost savings generated 
                as a result of such program. The Secretary 
                shall utilize such report in evaluating the 
                effectiveness of each State's drug use review 
                program.
  (h) Electronic Claims Management.--
          (1) In general.--In accordance with chapter 35 of 
        title 44, United States Code (relating to coordination 
        of Federal information policy), the Secretary shall 
        encourage each State agency to establish, as its 
        principal means of processing claims for covered 
        outpatient drugs under this title, a point-of-sale 
        electronic claims management system, for the purpose of 
        performing on-line, real time eligibility 
        verifications, claims data capture, adjudication of 
        claims, and assisting pharmacists (and other authorized 
        persons) in applying for and receiving payment.
          (2) Encouragement.--In order to carry out paragraph 
        (1)--
                  (A) for calendar quarters during fiscal years 
                1991 and 1992, expenditures under the State 
                plan attributable to development of a system 
                described in paragraph (1) shall receive 
                Federal financial participation under section 
                1903(a)(3)(A)(i) (at a matching rate of 90 
                percent) if the State acquires, through 
                applicable competitive procurement process in 
                the State, the most cost-effective 
                telecommunications network and automatic data 
                processing services and equipment; and
                  (B) the Secretary may permit, in the 
                procurement described in subparagraph (A) in 
                the application of part 433 of title 42, Code 
                of Federal Regulations, and parts 95, 205, and 
                307 of title 45, Code of Federal Regulations, 
                the substitution of the State's request for 
                proposal in competitive procurement for advance 
                planning and implementation documents otherwise 
                required.
  (i) Annual Report.--
          (1) In general.--Not later than May 1 of each year 
        the Secretary shall transmit to the Committee on 
        Finance of the Senate, the Committee on Energy and 
        Commerce of the House of Representatives, and the 
        Committees on Aging of the Senate and the House of 
        Representatives a report on the operation of this 
        section in the preceding fiscal year.
          (2) Details.--Each report shall include information 
        on--
                  (A) ingredient costs paid under this title 
                for single source drugs, multiple source drugs, 
                and nonprescription covered outpatient drugs;
                  (B) the total value of rebates received and 
                number of manufacturers providing such rebates;
                  (C) how the size of such rebates compare with 
                the size or rebates offered to other purchasers 
                of covered outpatient drugs;
                  (D) the effect of inflation on the value of 
                rebates required under this section;
                  (E) trends in prices paid under this title 
                for covered outpatient drugs; and
                  (F) Federal and State administrative costs 
                associated with compliance with the provisions 
                of this title.
  (j) Exemption of Organized Health Care Settings.--
          (1) Covered outpatient drugs are not subject to the 
        requirements of this section if such drugs are--
                  (A) dispensed by health maintenance 
                organizations, including Medicaid managed care 
                organizations that contract under section 
                1903(m); and
                  (B) subject to discounts under section 340B 
                of the Public Health Service Act.
  (2) The State plan shall provide that a hospital (providing 
medical assistance under such plan) that dispenses covered 
outpatient drugs using drug formulary systems, and bills the 
plan no more than the hospital's purchasing costs for covered 
outpatient drugs (as determined under the State plan) shall not 
be subject to the requirements of this section.
  (3) Nothing in this subsection shall be construed as 
providing that amounts for covered outpatient drugs paid by the 
institutions described in this subsection should not be taken 
into account for purposes of determining the best price as 
described in subsection (c).
  (k) Definitions.--In the section--
          (1) Average manufacturer price.--
                  (A) In general.--Subject to subparagraph (B), 
                the term ``average manufacturer price'' means, 
                with respect to a covered outpatient drug of a 
                manufacturer for a rebate period, the average 
                price paid to the manufacturer for the drug in 
                the United States by--
                          (i) wholesalers for drugs distributed 
                        to retail community pharmacies; and
                          (ii) retail community pharmacies that 
                        purchase drugs directly from the 
                        manufacturer.
                  (B) Exclusion of customary prompt pay 
                discounts and other payments.--
                          (i) In general.--The average 
                        manufacturer price for a covered 
                        outpatient drug shall exclude--
                                  (I) customary prompt pay 
                                discounts extended to 
                                wholesalers;
                                  (II) bona fide service fees 
                                paid by manufacturers to 
                                wholesalers or retail community 
                                pharmacies, including (but not 
                                limited to) distribution 
                                service fees, inventory 
                                management fees, product 
                                stocking allowances, and fees 
                                associated with administrative 
                                services agreements and patient 
                                care programs (such as 
                                medication compliance programs 
                                and patient education 
                                programs);
                                  (III) reimbursement by 
                                manufacturers for recalled, 
                                damaged, expired, or otherwise 
                                unsalable returned goods, 
                                including (but not limited to) 
                                reimbursement for the cost of 
                                the goods and any reimbursement 
                                of costs associated with return 
                                goods handling and processing, 
                                reverse logistics, and drug 
                                destruction;
                                  (IV) payments received from, 
                                and rebates or discounts 
                                provided to, pharmacy benefit 
                                managers, managed care 
                                organizations, health 
                                maintenance organizations, 
                                insurers, hospitals, clinics, 
                                mail order pharmacies, long 
                                term care providers, 
                                manufacturers, or any other 
                                entity that does not conduct 
                                business as a wholesaler or a 
                                retail community pharmacy, 
                                unless the drug is an 
                                inhalation, infusion, 
                                instilled, implanted, or 
                                injectable drug that is not 
                                generally dispensed through a 
                                retail community pharmacy; and
                                  (V) discounts provided by 
                                manufacturers under section 
                                1860D-14A.
                          (ii) Inclusion of other discounts and 
                        payments.--Notwithstanding clause (i), 
                        any other discounts, rebates, payments, 
                        or other financial transactions that 
                        are received by, paid by, or passed 
                        through to, retail community pharmacies 
                        shall be included in the average 
                        manufacturer price for a covered 
                        outpatient drug.
                  (C) Inclusion of section 505(c) drugs.--In 
                the case of a manufacturer that approves, 
                allows, or otherwise permits any drug of the 
                manufacturer to be sold under a new drug 
                application approved under section 505(c) of 
                the Federal Food, Drug, and Cosmetic Act, such 
                term shall be inclusive of the average price 
                paid for such drug by wholesalers for drugs 
                distributed to retail community pharmacies.
          (2) Covered outpatient drug.--Subject to the 
        exceptions in paragraph (3), the term ``covered 
        outpatient drug'' means--
                  (A) of those drugs which are treated as 
                prescribed drugs for purposes of section 
                1905(a)(12), a drug which may be dispensed only 
                upon prescription (except as provided in 
                paragraph (5)), and--
                          (i) which is approved for safety and 
                        effectiveness as a prescription drug 
                        under section 505 or 507 of the Federal 
                        Food, Drug, and Cosmetic Act or which 
                        is approved under section 505(j) of 
                        such Act;
                          (ii)(I) which was commercially used 
                        or sold in the United States before the 
                        date of the enactment of the Drug 
                        Amendments of 1962 or which is 
                        identical, similar, or related (within 
                        the meaning of section 310.6(b)(1) of 
                        title 21 of the Code of Federal 
                        Regulations) to such a drug, and (II) 
                        which has not been the subject of a 
                        final determination by the Secretary 
                        that it is a ``new drug'' (within the 
                        meaning of section 201(p) of the 
                        Federal Food, Drug, and Cosmetic Act) 
                        or an action brought by the Secretary 
                        under section 301, 302(a), or 304(a) of 
                        such Act to enforce section 502(f) or 
                        505(a) of such Act; or
                          (iii)(I) which is described in 
                        section 107(c)(3) of the Drug 
                        Amendments of 1962 and for which the 
                        Secretary has determined there is a 
                        compelling justification for its 
                        medical need, or is identical, similar, 
                        or related (within the meaning of 
                        section 310.6(b)(1) of title 21 of the 
                        Code of Federal Regulations) to such a 
                        drug, and (II) for which the Secretary 
                        has not issued a notice of an 
                        opportunity for a hearing under section 
                        505(e) of the Federal Food, Drug, and 
                        Cosmetic Act on a proposed order of the 
                        Secretary to withdraw approval of an 
                        application for such drug under such 
                        section because the Secretary has 
                        determined that the drug is less than 
                        effective for some or all conditions of 
                        use prescribed, recommended, or 
                        suggested in its labeling; and
                  (B) a biological product, other than a 
                vaccine which--
                          (i) may only be dispensed upon 
                        prescription,
                          (ii) is licensed under section 351 of 
                        the Public Health Service Act, and
                          (iii) is produced at an establishment 
                        licensed under such section to produce 
                        such product; and
                  (C) insulin certified under section 506 of 
                the Federal Food, Drug, and Cosmetic Act.
          (3) Limiting definition.--The term ``covered 
        outpatient drug'' does not include any drug, biological 
        product, or insulin provided as part of, or as incident 
        to and in the same setting as, any of the following 
        (and for which payment may be made under this title as 
        part of payment for the following and not as direct 
        reimbursement for the drug):
                  (A) Inpatient hospital services.
                  (B) Hospice services.
                  (C) Dental services, except that drugs for 
                which the State plan authorizes direct 
                reimbursement to the dispensing dentist are 
                covered outpatient drugs.
                  (D) Physicians' services.
                  (E) Outpatient hospital services.
                  (F) Nursing facility services and services 
                provided by an intermediate care facility for 
                the mentally retarded.
                  (G) Other laboratory and x-ray services.
                  (H) Renal dialysis.
        Such term also does not include any such drug or 
        product for which a National Drug Code number is not 
        required by the Food and Drug Administration or a drug 
        or biological used for a medical indication which is 
        not a medically accepted indication. Any drug, 
        biological product, or insulin excluded from the 
        definition of such term as a result of this paragraph 
        shall be treated as a covered outpatient drug for 
        purposes of determining the best price (as defined in 
        subsection (c)(1)(C)) for such drug, biological 
        product, or insulin.
          (4) Nonprescription drugs.--If a State plan for 
        medical assistance under this title includes coverage 
        of prescribed drugs as described in section 1905(a)(12) 
        and permits coverage of drugs which may be sold without 
        a prescription (commonly referred to as ``over-the-
        counter'' drugs), if they are prescribed by a physician 
        (or other person authorized to prescribe under State 
        law), such a drug shall be regarded as a covered 
        outpatient drug.
          (5) Manufacturer.--The term ``manufacturer'' means 
        any entity which is engaged in--
                  (A) the production, preparation, propagation, 
                compounding, conversion, or processing of 
                prescription drug products, either directly or 
                indirectly by extraction from substances of 
                natural origin, or independently by means of 
                chemical synthesis, or by a combination of 
                extraction and chemical synthesis, or
                  (B) in the packaging, repackaging, labeling, 
                relabeling, or distribution of prescription 
                drug products.
        Such term does not include a wholesale distributor of 
        drugs or a retail pharmacy licensed under State law.
          (6) Medically accepted indication.--The term 
        ``medically accepted indication'' means any use for a 
        covered outpatient drug which is approved under the 
        Federal Food, Drug, and Cosmetic Act, or the use of 
        which is supported by one or more citations included or 
        approved for inclusion in any of the compendia 
        described in subsection (g)(1)(B)(i).
          (7) Multiple source drug; innovator multiple source 
        drug; noninnovator multiple source drug; single source 
        drug.--
                  (A) Defined.--
                          (i) Multiple source drug.--The term 
                        ``multiple source drug'' means, with 
                        respect to a rebate period, a covered 
                        outpatient drug (not including any drug 
                        described in paragraph (5)) for which 
                        there at least 1 other drug product 
                        which--
                                  (I) is rated as 
                                therapeutically equivalent 
                                (under the Food and Drug 
                                Administration's most recent 
                                publication of ``Approved Drug 
                                Products with Therapeutic 
                                Equivalence Evaluations''),
                                  (II) except as provided in 
                                subparagraph (B), is 
                                pharmaceutically equivalent and 
                                bioequivalent, as defined in 
                                subparagraph (C) and as 
                                determined by the Food and Drug 
                                Administration, and
                                  (III) is sold or marketed in 
                                the United States during the 
                                period.
                          (ii) Innovator multiple source 
                        drug.--The term ``innovator multiple 
                        source drug'' means a multiple source 
                        drug that was originally marketed under 
                        an original new drug application 
                        approved by the Food and Drug 
                        Administration.
                          (iii) Noninnovator multiple source 
                        drug.--The term ``noninnovator multiple 
                        source drug'' means a multiple source 
                        drug that is not an innovator multiple 
                        source drug.
                          (iv) Single source drug.--The term 
                        ``single source drug'' means a covered 
                        outpatient drug which is produced or 
                        distributed under an original new drug 
                        application approved by the Food and 
                        Drug Administration, including a drug 
                        product marketed by any cross-licensed 
                        producers or distributors operating 
                        under the new drug application.
                  (B) Exception.--Subparagraph (A)(i)(II) shall 
                not apply if the Food and Drug Administration 
                changes by regulation the requirement that, for 
                purposes of the publication described in 
                subparagraph (A)(i)(I), in order for drug 
                products to be rated as therapeutically 
                equivalent, they must be pharmaceutically 
                equivalent and bioequivalent, as defined in 
                subparagraph (C).
                  (C) Definitions.--For purposes of this 
                paragraph--
                          (i) drug products are 
                        pharmaceutically equivalent if the 
                        products contain identical amounts of 
                        the same active drug ingredient in the 
                        same dosage form and meet compendial or 
                        other applicable standards of strength, 
                        quality, purity, and identity; and
                          (ii) drugs are bioequivalent if they 
                        do not present a known or potential 
                        bioequivalence problem, or, if they do 
                        present such a problem, they are shown 
                        to meet an appropriate standard of 
                        bioequivalence.
          (8) Rebate period.--The term ``rebate period'' means, 
        with respect to an agreement under subsection (a), a 
        calendar quarter or other period specified by the 
        Secretary with respect to the payment of rebates under 
        such agreement.
          (9) State agency.--The term ``State agency'' means 
        the agency designated under section 1902(a)(5) to 
        administer or supervise the administration of the State 
        plan for medical assistance.
          (10) Retail community pharmacy.--The term ``retail 
        community pharmacy'' means an independent pharmacy, a 
        chain pharmacy, a supermarket pharmacy, or a mass 
        merchandiser pharmacy that is licensed as a pharmacy by 
        the State and that dispenses medications to the general 
        public at retail prices. Such term does not include a 
        pharmacy that dispenses prescription medications to 
        patients primarily through the mail, nursing home 
        pharmacies, long-term care facility pharmacies, 
        hospital pharmacies, clinics, charitable or not-for-
        profit pharmacies, government pharmacies, or pharmacy 
        benefit managers.
          (11) Wholesaler.--The term ``wholesaler'' means a 
        drug wholesaler that is engaged in wholesale 
        distribution of prescription drugs to retail community 
        pharmacies, including (but not limited to) 
        manufacturers, repackers, distributors, own-label 
        distributors, private-label distributors, jobbers, 
        brokers, warehouses (including manufacturer's and 
        distributor's warehouses, chain drug warehouses, and 
        wholesale drug warehouses) independent wholesale drug 
        traders, and retail community pharmacies that conduct 
        wholesale distributions.

           *       *       *       *       *       *       *


                  provisions relating to managed care

  Sec. 1932. (a) State Option To Use Managed Care.--
          (1) Use of medicaid managed care organizations and 
        primary care case managers.--
                  (A) In general.--Subject to the succeeding 
                provisions of this section, and notwithstanding 
                paragraph (1), (10)(B), or (23)(A) of section 
                1902(a), a State--
                          (i) may require an individual who is 
                        eligible for medical assistance under 
                        the State plan under this title to 
                        enroll with a managed care entity as a 
                        condition of receiving such assistance 
                        (and, with respect to assistance 
                        furnished by or under arrangements with 
                        such entity, to receive such assistance 
                        through the entity), if--
                                  (I) the entity and the 
                                contract with the State meet 
                                the applicable requirements of 
                                this section and section 
                                1903(m) or section 1905(t), and
                                  (II) the requirements 
                                described in the succeeding 
                                paragraphs of this subsection 
                                are met; and
                          (ii) may restrict the number of 
                        provider agreements with managed care 
                        entities under the State plan if such 
                        restriction does not substantially 
                        impair access to services.
                  (B) Definition of managed care entity.--In 
                this section, the term ``managed care entity'' 
                means--
                          (i) a medicaid managed care 
                        organization, as defined in section 
                        1903(m)(1)(A), that provides or 
                        arranges for services for enrollees 
                        under a contract pursuant to section 
                        1903(m); and
                          (ii) a primary care case manager, as 
                        defined in section 1905(t)(2).
          (2) Special rules.--
                  (A) Exemption of certain children with 
                special needs.--A State may not require under 
                paragraph (1) the enrollment in a managed care 
                entity of an individual under 19 years of age 
                who--
                          (i) is eligible for supplemental 
                        security income under title XVI;
                          (ii) is described in section 
                        501(a)(1)(D);
                          (iii) is described in section 
                        1902(e)(3);
                          (iv) is receiving foster care or 
                        adoption assistance under part E of 
                        title IV; or
                          (v) is in foster care or otherwise in 
                        an out-of-home placement.
                  (B) Exemption of medicare beneficiaries.--A 
                State may not require under paragraph (1) the 
                enrollment in a managed care entity of an 
                individual who is a qualified medicare 
                beneficiary (as defined in section 1905(p)(1)) 
                or an individual otherwise eligible for 
                benefits under title XVIII.
                  (C) Indian enrollment.--A State may not 
                require under paragraph (1) the enrollment in a 
                managed care entity of an individual who is an 
                Indian (as defined in section 4(c) of the 
                Indian Health Care Improvement Act of 1976 (25 
                U.S.C. 1603(c)) unless the entity is one of the 
                following (and only if such entity is 
                participating under the plan):
                          (i) The Indian Health Service.
                          (ii) An Indian health program 
                        operated by an Indian tribe or tribal 
                        organization pursuant to a contract, 
                        grant, cooperative agreement, or 
                        compact with the Indian Health Service 
                        pursuant to the Indian Self-
                        Determination Act (25 U.S.C. 450 et 
                        seq.).
                          (iii) An urban Indian health program 
                        operated by an urban Indian 
                        organization pursuant to a grant or 
                        contract with the Indian Health Service 
                        pursuant to title V of the Indian 
                        Health Care Improvement Act (25 U.S.C. 
                        1601 et seq.).
          (3) Choice of coverage.--
                  (A) In general.--A State must permit an 
                individual to choose a managed care entity from 
                not less than two such entities that meet the 
                applicable requirements of this section, and of 
                section 1903(m) or section 1905(t).
                  (B) State option.--At the option of the 
                State, a State shall be considered to meet the 
                requirements of subparagraph (A) in the case of 
                an individual residing in a rural area, if the 
                State requires the individual to enroll with a 
                managed care entity if such entity--
                          (i) permits the individual to receive 
                        such assistance through not less than 
                        two physicians or case managers (to the 
                        extent that at least two physicians or 
                        case managers are available to provide 
                        such assistance in the area), and
                          (ii) permits the individual to obtain 
                        such assistance from any other provider 
                        in appropriate circumstances (as 
                        established by the State under 
                        regulations of the Secretary).
                  (C) Treatment of certain county-operated 
                health insuring organizations.--A State shall 
                be considered to meet the requirement of 
                subparagraph (A) if--
                          (i) the managed care entity in which 
                        the individual is enrolled is a health-
                        insuring organization which--
                                  (I) first became operational 
                                prior to January 1, 1986, or
                                  (II) is described in section 
                                9517(c)(3) of the Omnibus 
                                Budget Reconciliation Act of 
                                1985 (as added by section 
                                4734(2) of the Omnibus Budget 
                                Reconciliation Act of 1990), 
                                and
                          (ii) the individual is given a choice 
                        between at least two providers within 
                        such entity.
          (4) Process for enrollment and termination and change 
        of enrollment.--As conditions under paragraph (1)(A)--
                  (A) In general.--The State, enrollment broker 
                (if any), and managed care entity shall permit 
                an individual eligible for medical assistance 
                under the State plan under this title who is 
                enrolled with the entity under this title to 
                terminate (or change) such enrollment--
                          (i) for cause at any time (consistent 
                        with section 1903(m)(2)(A)(vi)), and
                          (ii) without cause--
                                  (I) during the 90-day period 
                                beginning on the date the 
                                individual receives notice of 
                                such enrollment, and
                                  (II) at least every 12 months 
                                thereafter.
                  (B) Notice of termination rights.--The State 
                shall provide for notice to each such 
                individual of the opportunity to terminate (or 
                change) enrollment under such conditions. Such 
                notice shall be provided at least 60 days 
                before each annual enrollment opportunity 
                described in subparagraph (A)(ii)(II).
                  (C) Enrollment priorities.--In carrying out 
                paragraph (1)(A), the State shall establish a 
                method for establishing enrollment priorities 
                in the case of a managed care entity that does 
                not have sufficient capacity to enroll all such 
                individuals seeking enrollment under which 
                individuals already enrolled with the entity 
                are given priority in continuing enrollment 
                with the entity.
                  (D) Default enrollment process.--In carrying 
                out paragraph (1)(A), the State shall establish 
                a default enrollment process--
                          (i) under which any such individual 
                        who does not enroll with a managed care 
                        entity during the enrollment period 
                        specified by the State shall be 
                        enrolled by the State with such an 
                        entity which has not been found to be 
                        out of substantial compliance with the 
                        applicable requirements of this section 
                        and of section 1903(m) or section 
                        1905(t); and
                          (ii) that takes into consideration--
                                  (I) maintaining existing 
                                provider-individual 
                                relationships or relationships 
                                with providers that have 
                                traditionally served 
                                beneficiaries under this title; 
                                and
                                  (II) if maintaining such 
                                provider relationships is not 
                                possible, the equitable 
                                distribution of such 
                                individuals among qualified 
                                managed care entities available 
                                to enroll such individuals, 
                                consistent with the enrollment 
                                capacities of the entities.
          (5) Provision of information.--
                  (A) Information in easily understood form.--
                Each State, enrollment broker, or managed care 
                entity shall provide all enrollment notices and 
                informational and instructional materials 
                relating to such an entity under this title in 
                a manner and form which may be easily 
                understood by enrollees and potential enrollees 
                of the entity who are eligible for medical 
                assistance under the State plan under this 
                title.
                  (B) Information to enrollees and potential 
                enrollees.--Each managed care entity that is a 
                medicaid managed care organization shall, upon 
                request, make available to enrollees and 
                potential enrollees in the organization's 
                service area information concerning the 
                following:
                          (i) Providers.--The identity, 
                        locations, qualifications, and 
                        availability of health care providers 
                        that participate with the organization.
                          (ii) Enrollee rights and 
                        responsibilities.--The rights and 
                        responsibilities of enrollees.
                          (iii) Grievance and appeal 
                        procedures.--The procedures available 
                        to an enrollee and a health care 
                        provider to challenge or appeal the 
                        failure of the organization to cover a 
                        service.
                          (iv) Information on covered items and 
                        services.--All items and services that 
                        are available to enrollees under the 
                        contract between the State and the 
                        organization that are covered either 
                        directly or through a method of 
                        referral and prior authorization. Each 
                        managed care entity that is a primary 
                        care case manager shall, upon request, 
                        make available to enrollees and 
                        potential enrollees in the 
                        organization's service area the 
                        information described in clause (iii).
                  (C) Comparative information.--A State that 
                requires individuals to enroll with managed 
                care entities under paragraph (1)(A) shall 
                annually (and upon request) provide, directly 
                or through the managed care entity, to such 
                individuals a list identifying the managed care 
                entities that are (or will be) available and 
                information (presented in a comparative, chart-
                like form) relating to the following for each 
                such entity offered:
                          (i) Benefits and cost-sharing.--The 
                        benefits covered and cost-sharing 
                        imposed by the entity.
                          (ii) Service area.--The service area 
                        of the entity.
                          (iii) Quality and performance.--To 
                        the extent available, quality and 
                        performance indicators for the benefits 
                        under the entity.
                  (D) Information on benefits not covered under 
                managed care arrangement.--A State, directly or 
                through managed care entities, shall, on or 
                before an individual enrolls with such an 
                entity under this title, inform the enrollee in 
                a written and prominent manner of any benefits 
                to which the enrollee may be entitled to under 
                this title but which are not made available to 
                the enrollee through the entity. Such 
                information shall include information on where 
                and how such enrollees may access benefits not 
                made available to the enrollee through the 
                entity.
  (b) Beneficiary Protections.--
          (1) Specification of benefits.--Each contract with a 
        managed care entity under section 1903(m) or under 
        section 1905(t)(3) shall specify the benefits the 
        provision (or arrangement) for which the entity is 
        responsible.
          (2) Assuring coverage to emergency services.--
                  (A) In general.--Each contract with a 
                medicaid managed care organization under 
                section 1903(m) and each contract with a 
                primary care case manager under section 
                1905(t)(3) shall require the organization or 
                manager--
                          (i) to provide coverage for emergency 
                        services (as defined in subparagraph 
                        (B)) without regard to prior 
                        authorization or the emergency care 
                        provider's contractual relationship 
                        with the organization or manager, and
                          (ii) to comply with guidelines 
                        established under section 1852(d)(2) 
                        (respecting coordination of post-
                        stabilization care) in the same manner 
                        as such guidelines apply to 
                        Medicare+Choice plans offered under 
                        part C of title XVIII.
                The requirement under clause (ii) shall first 
                apply 30 days after the date of promulgation of 
                the guidelines referred to in such clause.
                  (B) Emergency services defined.--In 
                subparagraph (A)(i), the term ``emergency 
                services'' means, with respect to an individual 
                enrolled with an organization, covered 
                inpatient and outpatient services that--
                          (i) are furnished by a provider that 
                        is qualified to furnish such services 
                        under this title, and
                          (ii) are needed to evaluate or 
                        stabilize an emergency medical 
                        condition (as defined in subparagraph 
                        (C)).
                  (C) Emergency medical condition defined.--In 
                subparagraph (B)(ii), the term ``emergency 
                medical condition'' means a medical condition 
                manifesting itself by acute symptoms of 
                sufficient severity (including severe pain) 
                such that a prudent layperson, who possesses an 
                average knowledge of health and medicine, could 
                reasonably expect the absence of immediate 
                medical attention to result in--
                          (i) placing the health of the 
                        individual (or, with respect to a 
                        pregnant woman, the health of the woman 
                        or her unborn child) in serious 
                        jeopardy,
                          (ii) serious impairment to bodily 
                        functions, or
                          (iii) serious dysfunction of any 
                        bodily organ or part.
                  (D) Emergency services furnished by non-
                contract providers.--Any provider of emergency 
                services that does not have in effect a 
                contract with a Medicaid managed care entity 
                that establishes payment amounts for services 
                furnished to a beneficiary enrolled in the 
                entity's Medicaid managed care plan must accept 
                as payment in full no more than the amounts 
                (less any payments for indirect costs of 
                medical education and direct costs of graduate 
                medical education) that it could collect if the 
                beneficiary received medical assistance under 
                this title other than through enrollment in 
                such an entity. In a State where rates paid to 
                hospitals under the State plan are negotiated 
                by contract and not publicly released, the 
                payment amount applicable under this 
                subparagraph shall be the average contract rate 
                that would apply under the State plan for 
                general acute care hospitals or the average 
                contract rate that would apply under such plan 
                for tertiary hospitals.
          (3) Protection of enrollee-provider communications.--
                  (A) In general.--Subject to subparagraphs (B) 
                and (C), under a contract under section 1903(m) 
                a medicaid managed care organization (in 
                relation to an individual enrolled under the 
                contract) shall not prohibit or otherwise 
                restrict a covered health care professional (as 
                defined in subparagraph (D)) from advising such 
                an individual who is a patient of the 
                professional about the health status of the 
                individual or medical care or treatment for the 
                individual's condition or disease, regardless 
                of whether benefits for such care or treatment 
                are provided under the contract, if the 
                professional is acting within the lawful scope 
                of practice.
                  (B) Construction.--Subparagraph (A) shall not 
                be construed as requiring a medicaid managed 
                care organization to provide, reimburse for, or 
                provide coverage of, a counseling or referral 
                service if the organization--
                          (i) objects to the provision of such 
                        service on moral or religious grounds; 
                        and
                          (ii) in the manner and through the 
                        written instrumentalities such 
                        organization deems appropriate, makes 
                        available information on its policies 
                        regarding such service to prospective 
                        enrollees before or during enrollment 
                        and to enrollees within 90 days after 
                        the date that the organization adopts a 
                        change in policy regarding such a 
                        counseling or referral service.
                Nothing in this subparagraph shall be construed 
                to affect disclosure requirements under State 
                law or under the Employee Retirement Income 
                Security Act of 1974.
                  (C) Health care professional defined.--For 
                purposes of this paragraph, the term ``health 
                care professional'' means a physician (as 
                defined in section 1861(r)) or other health 
                care professional if coverage for the 
                professional's services is provided under the 
                contract referred to in subparagraph (A) for 
                the services of the professional. Such term 
                includes a podiatrist, optometrist, 
                chiropractor, psychologist, dentist, physician 
                assistant, physical or occupational therapist 
                and therapy assistant, speech-language 
                pathologist, audiologist, registered or 
                licensed practical nurse (including nurse 
                practitioner, clinical nurse specialist, 
                certified registered nurse anesthetist, and 
                certified nurse-midwife), licensed certified 
                social worker, registered respiratory 
                therapist, and certified respiratory therapy 
                technician.
          (4) Grievance procedures.--Each medicaid managed care 
        organization shall establish an internal grievance 
        procedure under which an enrollee who is eligible for 
        medical assistance under the State plan under this 
        title, or a provider on behalf of such an enrollee, may 
        challenge the denial of coverage of or payment for such 
        assistance.
          (5) Demonstration of adequate capacity and 
        services.--Each medicaid managed care organization 
        shall provide the State and the Secretary with adequate 
        assurances (in a time and manner determined by the 
        Secretary) that the organization, with respect to a 
        service area, has the capacity to serve the expected 
        enrollment in such service area, including assurances 
        that the organization--
                  (A) offers an appropriate range of services 
                and access to preventive and primary care 
                services for the population expected to be 
                enrolled in such service area, and
                  (B) maintains a sufficient number, mix, and 
                geographic distribution of providers of 
                services.
          (6) Protecting enrollees against liability for 
        payment.--Each medicaid managed care organization shall 
        provide that an individual eligible for medical 
        assistance under the State plan under this title who is 
        enrolled with the organization may not be held liable--
                  (A) for the debts of the organization, in the 
                event of the organization's insolvency,
                  (B) for services provided to the individual--
                          (i) in the event of the organization 
                        failing to receive payment from the 
                        State for such services; or
                          (ii) in the event of a health care 
                        provider with a contractual, referral, 
                        or other arrangement with the 
                        organization failing to receive payment 
                        from the State or the organization for 
                        such services, or
                  (C) for payments to a provider that furnishes 
                covered services under a contractual, referral, 
                or other arrangement with the organization in 
                excess of the amount that would be owed by the 
                individual if the organization had directly 
                provided the services.
          (7) Antidiscrimination.--A medicaid managed care 
        organization shall not discriminate with respect to 
        participation, reimbursement, or indemnification as to 
        any provider who is acting within the scope of the 
        provider's license or certification under applicable 
        State law, solely on the basis of such license or 
        certification. This paragraph shall not be construed to 
        prohibit an organization from including providers only 
        to the extent necessary to meet the needs of the 
        organization's enrollees or from establishing any 
        measure designed to maintain quality and control costs 
        consistent with the responsibilities of the 
        organization.
          (8) Compliance with certain maternity and mental 
        health requirements.--Each medicaid managed care 
        organization shall comply with the requirements of 
        subpart 2 of part A of title XXVII of the Public Health 
        Service Act insofar as such requirements apply and are 
        effective with respect to a health insurance issuer 
        that offers group health insurance coverage.
  (c) Quality Assurance Standards.--
          (1) Quality assessment and improvement strategy.--
                  (A) In general.--If a State provides for 
                contracts with medicaid managed care 
                organizations under section 1903(m), the State 
                shall develop and implement a quality 
                assessment and improvement strategy consistent 
                with this paragraph. Such strategy shall 
                include the following:
                          (i) Access standards.--Standards for 
                        access to care so that covered services 
                        are available within reasonable 
                        timeframes and in a manner that ensures 
                        continuity of care and adequate primary 
                        care and specialized services capacity.
                          (ii) Other measures.--Examination of 
                        other aspects of care and service 
                        directly related to the improvement of 
                        quality of care (including grievance 
                        procedures and marketing and 
                        information standards).
                          (iii) Monitoring procedures.--
                        Procedures for monitoring and 
                        evaluating the quality and 
                        appropriateness of care and services to 
                        enrollees that reflect the full 
                        spectrum of populations enrolled under 
                        the contract and that includes 
                        requirements for provision of quality 
                        assurance data to the State using the 
                        data and information set that the 
                        Secretary has specified for use under 
                        part C of title XVIII or such 
                        alternative data as the Secretary 
                        approves, in consultation with the 
                        State.
                          (iv) Periodic review.--Regular, 
                        periodic examinations of the scope and 
                        content of the strategy.
                  (B) Standards.--The strategy developed under 
                subparagraph (A) shall be consistent with 
                standards that the Secretary first establishes 
                within 1 year after the date of the enactment 
                of this section. Such standards shall not 
                preempt any State standards that are more 
                stringent than such standards. Guidelines 
                relating to quality assurance that are applied 
                under section 1915(b)(1) shall apply under this 
                subsection until the effective date of 
                standards for quality assurance established 
                under this subparagraph.
                  (C) Monitoring.--The Secretary shall monitor 
                the development and implementation of 
                strategies under subparagraph (A).
                  (D) Consultation.--The Secretary shall 
                conduct activities under subparagraphs (B) and 
                (C) in consultation with the States.
          (2) External independent review of managed care 
        activities.--
                  (A) Review of contracts.--
                          (i) In general.--Each contract under 
                        section 1903(m) with a medicaid managed 
                        care organization shall provide for an 
                        annual (as appropriate) external 
                        independent review conducted by a 
                        qualified independent entity of the 
                        quality outcomes and timeliness of, and 
                        access to, the items and services for 
                        which the organization is responsible 
                        under the contract. The requirement for 
                        such a review shall not apply until 
                        after the date that the Secretary 
                        establishes the identification method 
                        described in clause (ii).
                          (ii) Qualifications of reviewer.--The 
                        Secretary, in consultation with the 
                        States, shall establish a method for 
                        the identification of entities that are 
                        qualified to conduct reviews under 
                        clause (i).
                          (iii) Use of protocols.--The 
                        Secretary, in coordination with the 
                        National Governors' Association, shall 
                        contract with an independent quality 
                        review organization (such as the 
                        National Committee for Quality 
                        Assurance) to develop the protocols to 
                        be used in external independent reviews 
                        conducted under this paragraph on and 
                        after January 1, 1999.
                          (iv) Availability of results.--The 
                        results of each external independent 
                        review conducted under this 
                        subparagraph shall be available to 
                        participating health care providers, 
                        enrollees, and potential enrollees of 
                        the organization, except that the 
                        results may not be made available in a 
                        manner that discloses the identity of 
                        any individual patient.
                  (B) Nonduplication of accreditation.--A State 
                may provide that, in the case of a medicaid 
                managed care organization that is accredited by 
                a private independent entity (such as those 
                described in section 1852(e)(4)) or that has an 
                external review conducted under section 
                1852(e)(3), the external review activities 
                conducted under subparagraph (A) with respect 
                to the organization shall not be duplicative of 
                review activities conducted as part of the 
                accreditation process or the external review 
                conducted under such section.
                  (C) Deemed compliance for medicare managed 
                care organizations.--At the option of a State, 
                the requirements of subparagraph (A) shall not 
                apply with respect to a medicaid managed care 
                organization if the organization is an eligible 
                organization with a contract in effect under 
                section 1876 or a Medicare+Choice organization 
                with a contract in effect under part C of title 
                XVIII and the organization has had a contract 
                in effect under section 1903(m) at least during 
                the previous 2-year period.
  (d) Protections Against Fraud and Abuse.--
          (1) Prohibiting affiliations with individuals 
        debarred by Federal agencies.--
                  (A) In general.--A managed care entity may 
                not knowingly--
                          (i) have a person described in 
                        subparagraph (C) as a director, 
                        officer, partner, or person with 
                        beneficial ownership of more than 5 
                        percent of the entity's equity, or
                          (ii) have an employment, consulting, 
                        or other agreement with a person 
                        described in such subparagraph for the 
                        provision of items and services that 
                        are significant and material to the 
                        entity's obligations under its contract 
                        with the State.
                  (B) Effect of noncompliance.--If a State 
                finds that a managed care entity is not in 
                compliance with clause (i) or (ii) of 
                subparagraph (A), the State--
                          (i) shall notify the Secretary of 
                        such noncompliance;
                          (ii) may continue an existing 
                        agreement with the entity unless the 
                        Secretary (in consultation with the 
                        Inspector General of the Department of 
                        Health and Human Services) directs 
                        otherwise; and
                          (iii) may not renew or otherwise 
                        extend the duration of an existing 
                        agreement with the entity unless the 
                        Secretary (in consultation with the 
                        Inspector General of the Department of 
                        Health and Human Services) provides to 
                        the State and to Congress a written 
                        statement describing compelling reasons 
                        that exist for renewing or extending 
                        the agreement.
                  (C) Persons described.--A person is described 
                in this subparagraph if such person--
                          (i) is debarred, suspended, or 
                        otherwise excluded from participating 
                        in procurement activities under the 
                        Federal Acquisition Regulation or from 
                        participating in nonprocurement 
                        activities under regulations issued 
                        pursuant to Executive Order No. 12549 
                        or under guidelines implementing such 
                        order; or
                          (ii) is an affiliate (as defined in 
                        such Regulation) of a person described 
                        in clause (i).
          (2) Restrictions on marketing.--
                  (A) Distribution of materials.--
                          (i) In general.--A managed care 
                        entity, with respect to activities 
                        under this title, may not distribute 
                        directly or through any agent or 
                        independent contractor marketing 
                        materials within any State--
                                  (I) without the prior 
                                approval of the State, and
                                  (II) that contain false or 
                                materially misleading 
                                information.
                        The requirement of subclause (I) shall 
                        not apply with respect to a State until 
                        such date as the Secretary specifies in 
                        consultation with such State.
                          (ii) Consultation in review of market 
                        materials.--In the process of reviewing 
                        and approving such materials, the State 
                        shall provide for consultation with a 
                        medical care advisory committee.
                  (B) Service market.--A managed care entity 
                shall distribute marketing materials to the 
                entire service area of such entity covered 
                under the contract under section 1903(m) or 
                section 1905(t)(3).
                  (C) Prohibition of tie-ins.--A managed care 
                entity, or any agency of such entity, may not 
                seek to influence an individual's enrollment 
                with the entity in conjunction with the sale of 
                any other insurance.
                  (D) Prohibiting marketing fraud.--Each 
                managed care entity shall comply with such 
                procedures and conditions as the Secretary 
                prescribes in order to ensure that, before an 
                individual is enrolled with the entity, the 
                individual is provided accurate oral and 
                written information sufficient to make an 
                informed decision whether or not to enroll.
                  (E) Prohibition of ``cold-call'' marketing 
                .--Each managed care entity shall not, directly 
                or indirectly, conduct door-to-door, 
                telephonic, or other ``cold-call'' marketing of 
                enrollment under this title.
          (3) State conflict-of-interest safeguards in medicaid 
        risk contracting.--A medicaid managed care organization 
        may not enter into a contract with any State under 
        section 1903(m) unless the State has in effect 
        conflict-of-interest safeguards with respect to 
        officers and employees of the State with 
        responsibilities relating to contracts with such 
        organizations or to the default enrollment process 
        described in subsection (a)(4)(C)(ii) that are at least 
        as effective as the Federal safeguards provided under 
        section 27 of the Office of Federal Procurement Policy 
        Act (41 U.S.C. 423), against conflicts of interest that 
        apply with respect to Federal procurement officials 
        with comparable responsibilities with respect to such 
        contracts.
          (4) Use of unique physician identifier for 
        participating physicians.--Each medicaid managed care 
        organization shall require each physician providing 
        services to enrollees eligible for medical assistance 
        under the State plan under this title to have a unique 
        identifier in accordance with the system established 
        under section 1173(b).
          (5) Contract requirement for managed care entities.--
        With respect to any contract with a managed care entity 
        under section 1903(m) or 1905(t)(3) (as applicable), no 
        later than July 1, 2018, such contract shall include a 
        provision that providers of services or persons 
        terminated (as described in section 1902(kk)(8)) from 
        participation under this title, title XVIII, or title 
        XXI shall be terminated from participating under this 
        title as a provider in any network of such entity that 
        serves individuals eligible to receive medical 
        assistance under this title.
          (6) Enrollment of participating providers.--
                  (A) In general.--Beginning not later than 
                January 1, 2018, a State shall require that, in 
                order to participate as a provider in the 
                network of a managed care entity that provides 
                services to, or orders, prescribes, refers, or 
                certifies eligibility for services for, 
                individuals who are eligible for medical 
                assistance under the State plan under this 
                title (or under a waiver of the plan) and who 
                are enrolled with the entity, the provider is 
                enrolled consistent with section 1902(kk) with 
                the State agency administering the State plan 
                under this title. Such enrollment shall include 
                providing to the State agency the provider's 
                identifying information, including the name, 
                specialty, date of birth, Social Security 
                number, national provider identifier, Federal 
                taxpayer identification number, and the State 
                license or certification number of the 
                provider.
                  (B) Rule of construction.--Nothing in 
                subparagraph (A) shall be construed as 
                requiring a provider described in such 
                subparagraph to provide services to individuals 
                who are not enrolled with a managed care entity 
                under this title.
  (e) Sanctions for Noncompliance.--
          (1) Use of intermediate sanctions by the state to 
        enforce requirements.--
                  (A) In general.--A State may not enter into 
                or renew a contract under section 1903(m) 
                unless the State has established intermediate 
                sanctions, which may include any of the types 
                described in paragraph (2), other than the 
                termination of a contract with a medicaid 
                managed care organization, which the State may 
                impose against a medicaid managed care 
                organization with such a contract, if the 
                organization--
                          (i) fails substantially to provide 
                        medically necessary items and services 
                        that are required (under law or under 
                        such organization's contract with the 
                        State) to be provided to an enrollee 
                        covered under the contract;
                          (ii) imposes premiums or charges on 
                        enrollees in excess of the premiums or 
                        charges permitted under this title;
                          (iii) acts to discriminate among 
                        enrollees on the basis of their health 
                        status or requirements for health care 
                        services, including expulsion or 
                        refusal to reenroll an individual, 
                        except as permitted by this title, or 
                        engaging in any practice that would 
                        reasonably be expected to have the 
                        effect of denying or discouraging 
                        enrollment with the organization by 
                        eligible individuals whose medical 
                        condition or history indicates a need 
                        for substantial future medical 
                        services;
                          (iv) misrepresents or falsifies 
                        information that is furnished--
                                  (I) to the Secretary or the 
                                State under this title; or
                                  (II) to an enrollee, 
                                potential enrollee, or a health 
                                care provider under such title; 
                                or
                          (v) fails to comply with the 
                        applicable requirements of section 
                        1903(m)(2)(A)(x).
                The State may also impose such intermediate 
                sanction against a managed care entity if the 
                State determines that the entity distributed 
                directly or through any agent or independent 
                contractor marketing materials in violation of 
                subsection (d)(2)(A)(i)(II).
                  (B) Rule of construction.--Clause (i) of 
                subparagraph (A) shall not apply to the 
                provision of abortion services, except that a 
                State may impose a sanction on any medicaid 
                managed care organization that has a contract 
                to provide abortion services if the 
                organization does not provide such services as 
                provided for under the contract.
          (2) Intermediate sanctions.--The sanctions described 
        in this paragraph are as follows:
                  (A) Civil money penalties as follows:
                          (i) Except as provided in clause 
                        (ii), (iii), or (iv), not more than 
                        $25,000 for each determination under 
                        paragraph (1)(A).
                          (ii) With respect to a determination 
                        under clause (iii) or (iv)(I) of 
                        paragraph (1)(A), not more than 
                        $100,000 for each such determination.
                          (iii) With respect to a determination 
                        under paragraph (1)(A)(ii), double the 
                        excess amount charged in violation of 
                        such subsection (and the excess amount 
                        charged shall be deducted from the 
                        penalty and returned to the individual 
                        concerned).
                          (iv) Subject to clause (ii), with 
                        respect to a determination under 
                        paragraph (1)(A)(iii), $15,000 for each 
                        individual not enrolled as a result of 
                        a practice described in such 
                        subsection.
                  (B) The appointment of temporary management--
                          (i) to oversee the operation of the 
                        medicaid managed care organization upon 
                        a finding by the State that there is 
                        continued egregious behavior by the 
                        organization or there is a substantial 
                        risk to the health of enrollees; or
                          (ii) to assure the health of the 
                        organization's enrollees, if there is a 
                        need for temporary management while--
                                  (I) there is an orderly 
                                termination or reorganization 
                                of the organization; or
                                  (II) improvements are made to 
                                remedy the violations found 
                                under paragraph (1),
                        except that temporary management under 
                        this subparagraph may not be terminated 
                        until the State has determined that the 
                        medicaid managed care organization has 
                        the capability to ensure that the 
                        violations shall not recur.
                  (C) Permitting individuals enrolled with the 
                managed care entity to terminate enrollment 
                without cause, and notifying such individuals 
                of such right to terminate enrollment.
                  (D) Suspension or default of all enrollment 
                of individuals under this title after the date 
                the Secretary or the State notifies the entity 
                of a determination of a violation of any 
                requirement of section 1903(m) or this section.
                  (E) Suspension of payment to the entity under 
                this title for individuals enrolled after the 
                date the Secretary or State notifies the entity 
                of such a determination and until the Secretary 
                or State is satisfied that the basis for such 
                determination has been corrected and is not 
                likely to recur.
          (3) Treatment of chronic substandard entities.--In 
        the case of a medicaid managed care organization which 
        has repeatedly failed to meet the requirements of 
        section 1903(m) and this section, the State shall 
        (regardless of what other sanctions are provided) 
        impose the sanctions described in subparagraphs (B) and 
        (C) of paragraph (2).
          (4) Authority to terminate contract.--
                  (A) In general.--In the case of a managed 
                care entity which has failed to meet the 
                requirements of this part or a contract under 
                section 1903(m) or 1905(t)(3), the State shall 
                have the authority to terminate such contract 
                with the entity and to enroll such entity's 
                enrollees with other managed care entities (or 
                to permit such enrollees to receive medical 
                assistance under the State plan under this 
                title other than through a managed care 
                entity).
                  (B) Availability of hearing prior to 
                termination of contract.--A State may not 
                terminate a contract with a managed care entity 
                under subparagraph (A) unless the entity is 
                provided with a hearing prior to the 
                termination.
                  (C) Notice and right to disenroll in cases of 
                termination hearing.--A State may--
                          (i) notify individuals enrolled with 
                        a managed care entity which is the 
                        subject of a hearing to terminate the 
                        entity's contract with the State of the 
                        hearing, and
                          (ii) in the case of such an entity, 
                        permit such enrollees to disenroll 
                        immediately with the entity without 
                        cause.
          (5) Other protections for managed care entities 
        against sanctions imposed by state.--Before imposing 
        any sanction against a managed care entity other than 
        termination of the entity's contract, the State shall 
        provide the entity with notice and such other due 
        process protections as the State may provide, except 
        that a State may not provide a managed care entity with 
        a pre-termination hearing before imposing the sanction 
        described in paragraph (2)(B).
  (f) Timeliness of Payment; Adequacy of Payment for Primary 
Care Services.--A contract under section 1903(m) with a 
medicaid managed care organization shall provide that the 
organization shall make payment to health care providers for 
items and services which are subject to the contract and that 
are furnished to individuals eligible for medical assistance 
under the State plan under this title who are enrolled with the 
organization on a timely basis consistent with the claims 
payment procedures described in section 1902(a)(37)(A), unless 
the health care provider and the organization agree to an 
alternate payment schedule and, in the case of primary care 
services described in section 1902(a)(13)(C), consistent with 
the minimum payment rates specified in such section (regardless 
of the manner in which such payments are made, including in the 
form of capitation or partial capitation).
  (g) Identification of Patients for Purposes of Making DSH 
Payments.--Each contract with a managed care entity under 
section 1903(m) or under section 1905(t)(3) shall require the 
entity either--
          (1) to report to the State information necessary to 
        determine the hospital services provided under the 
        contract (and the identity of hospitals providing such 
        services) for purposes of applying sections 
        1886(d)(5)(F) and 1923; or
          (2) to include a sponsorship code in the 
        identification card issued to individuals covered under 
        this title in order that a hospital may identify a 
        patient as being entitled to benefits under this title.
  (h) Special Rules With Respect to Indian Enrollees, Indian 
Health Care Providers, and Indian Managed Care Entities.--
          (1) Enrollee option to select an indian health care 
        provider as primary care provider.--In the case of a 
        non-Indian Medicaid managed care entity that--
                  (A) has an Indian enrolled with the entity; 
                and
                  (B) has an Indian health care provider that 
                is participating as a primary care provider 
                within the network of the entity,
        insofar as the Indian is otherwise eligible to receive 
        services from such Indian health care provider and the 
        Indian health care provider has the capacity to provide 
        primary care services to such Indian, the contract with 
        the entity under section 1903(m) or under section 
        1905(t)(3) shall require, as a condition of receiving 
        payment under such contract, that the Indian shall be 
        allowed to choose such Indian health care provider as 
        the Indian's primary care provider under the entity.
          (2) Assurance of payment to indian health care 
        providers for provision of covered services.--Each 
        contract with a managed care entity under section 
        1903(m) or under section 1905(t)(3) shall require any 
        such entity, as a condition of receiving payment under 
        such contract, to satisfy the following requirements:
                  (A) Demonstration of access to indian health 
                care providers and application of alternative 
                payment arrangements.--Subject to subparagraph 
                (C), to--
                          (i) demonstrate that the number of 
                        Indian health care providers that are 
                        participating providers with respect to 
                        such entity are sufficient to ensure 
                        timely access to covered Medicaid 
                        managed care services for those Indian 
                        enrollees who are eligible to receive 
                        services from such providers; and
                          (ii) agree to pay Indian health care 
                        providers, whether such providers are 
                        participating or nonparticipating 
                        providers with respect to the entity, 
                        for covered Medicaid managed care 
                        services provided to those Indian 
                        enrollees who are eligible to receive 
                        services from such providers at a rate 
                        equal to the rate negotiated between 
                        such entity and the provider involved 
                        or, if such a rate has not been 
                        negotiated, at a rate that is not less 
                        than the level and amount of payment 
                        which the entity would make for the 
                        services if the services were furnished 
                        by a participating provider which is 
                        not an Indian health care provider.
                The Secretary shall establish procedures for 
                applying the requirements of clause (i) in 
                States where there are no or few Indian health 
                providers.
                  (B) Prompt payment.--To agree to make prompt 
                payment (consistent with rule for prompt 
                payment of providers under section 1932(f)) to 
                Indian health care providers that are 
                participating providers with respect to such 
                entity or, in the case of an entity to which 
                subparagraph (A)(ii) or (C) applies, that the 
                entity is required to pay in accordance with 
                that subparagraph.
                  (C) Application of special payment 
                requirements for federally-qualified health 
                centers and for services provided by certain 
                indian health care providers.--
                          (i) Federally-qualified health 
                        centers.--
                                  (I) Managed care entity 
                                payment requirement.--To agree 
                                to pay any Indian health care 
                                provider that is a federally-
                                qualified health center under 
                                this title but not a 
                                participating provider with 
                                respect to the entity, for the 
                                provision of covered Medicaid 
                                managed care services by such 
                                provider to an Indian enrollee 
                                of the entity at a rate equal 
                                to the amount of payment that 
                                the entity would pay a 
                                federally-qualified health 
                                center that is a participating 
                                provider with respect to the 
                                entity but is not an Indian 
                                health care provider for such 
                                services.
                                  (II) Continued application of 
                                state requirement to make 
                                supplemental payment.--Nothing 
                                in subclause (I) or 
                                subparagraph (A) or (B) shall 
                                be construed as waiving the 
                                application of section 
                                1902(bb)(5) regarding the State 
                                plan requirement to make any 
                                supplemental payment due under 
                                such section to a federally-
                                qualified health center for 
                                services furnished by such 
                                center to an enrollee of a 
                                managed care entity (regardless 
                                of whether the federally-
                                qualified health center is or 
                                is not a participating provider 
                                with the entity).
                          (ii) Payment rate for services 
                        provided by certain indian health care 
                        providers.--If the amount paid by a 
                        managed care entity to an Indian health 
                        care provider that is not a federally-
                        qualified health center for services 
                        provided by the provider to an Indian 
                        enrollee with the managed care entity 
                        is less than the rate that applies to 
                        the provision of such services by the 
                        provider under the State plan, the plan 
                        shall provide for payment to the Indian 
                        health care provider, whether the 
                        provider is a participating or 
                        nonparticipating provider with respect 
                        to the entity, of the difference 
                        between such applicable rate and the 
                        amount paid by the managed care entity 
                        to the provider for such services.
                  (D) Construction.--Nothing in this paragraph 
                shall be construed as waiving the application 
                of section 1902(a)(30)(A) (relating to 
                application of standards to assure that 
                payments are consistent with efficiency, 
                economy, and quality of care).
          (3) Special rule for enrollment for indian managed 
        care entities.--Regarding the application of a Medicaid 
        managed care program to Indian Medicaid managed care 
        entities, an Indian Medicaid managed care entity may 
        restrict enrollment under such program to Indians in 
        the same manner as Indian Health Programs may restrict 
        the delivery of services to Indians.
          (4) Definitions.--For purposes of this subsection:
                  (A) Indian health care provider.--The term 
                ``Indian health care provider'' means an Indian 
                Health Program or an Urban Indian Organization.
                  (B) Indian medicaid managed care entity.--The 
                term ``Indian Medicaid managed care entity'' 
                means a managed care entity that is controlled 
                (within the meaning of the last sentence of 
                section 1903(m)(1)(C)) by the Indian Health 
                Service, a Tribe, Tribal Organization, or Urban 
                Indian Organization, or a consortium, which may 
                be composed of 1 or more Tribes, Tribal 
                Organizations, or Urban Indian Organizations, 
                and which also may include the Service.
                  (C) Non-indian medicaid managed care 
                entity.--The term ``non-Indian Medicaid managed 
                care entity'' means a managed care entity that 
                is not an Indian Medicaid managed care entity.
                  (D) Covered medicaid managed care services.--
                The term ``covered Medicaid managed care 
                services'' means, with respect to an individual 
                enrolled with a managed care entity, items and 
                services for which benefits are available with 
                respect to the individual under the contract 
                between the entity and the State involved.
                  (E) Medicaid managed care program.--The term 
                ``Medicaid managed care program'' means a 
                program under sections 1903(m), 1905(t), and 
                1932 and includes a managed care program 
                operating under a waiver under section 1915(b) 
                or 1115 or otherwise.
  (i) Drug Utilization Review Activities and Requirements.--
Beginning not later than October 1, 2019, each contract under a 
State plan with a managed care entity (other than a primary 
care case manager) under section 1903(m) shall provide that the 
entity is in compliance with the applicable provisions of 
section 438.3(s)(2) of title 42 of the Code of Federal 
Regulations, section 483.3(s)(4)) of such title, and section 
483.3(s)(5) of such title, as such provisions were in effect on 
March 31, 2018.

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