[House Report 115-731]
[From the U.S. Government Publishing Office]


115th Congress   }                                      {      Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                      {     115-731

======================================================================


 
           RURAL DEVELOPMENT OF OPIOID CAPACITY SERVICES 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. 5477]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 5477) to amend title XIX of the Social Security 
Act to provide for a demonstration project to increase 
substance use provider capacity under the Medicaid program, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     6
Background and Need for Legislation..............................     6
Committee Action.................................................     8
Committee Votes..................................................     9
Oversight Findings and Recommendations...........................     9
New Budget Authority, Entitlement Authority, and Tax Expenditures     9
Congressional Budget Office Estimate.............................     9
Federal Mandates Statement.......................................    31
Statement of General Performance Goals and Objectives............    31
Duplication of Federal Programs..................................    31
Committee Cost Estimate..........................................    31
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......    32
Disclosure of Directed Rule Makings..............................    32
Advisory Committee Statement.....................................    32
Applicability to Legislative Branch..............................    32
Section-by-Section Analysis of the Legislation...................    32
Changes in Existing Law Made by the Bill, as Reported............    32

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Rural Development of Opioid Capacity 
Services Act'' or the ``Rural DOCS Act''.

SEC. 2. DEMONSTRATION PROJECT TO INCREASE SUBSTANCE USE PROVIDER 
                    CAPACITY UNDER THE MEDICAID PROGRAM.

  Section 1903 of the Social Security Act (42 U.S.C. 1396b) is amended 
by adding at the end the following new subsection:
  ``(aa) Demonstration Project to Increase Substance Use Provider 
Capacity.--
          ``(1) In general.--Not later than the date that is 180 days 
        after the date of the enactment of this section, the Secretary 
        shall, in consultation, as appropriate, with the Director of 
        the Agency for Healthcare Research and Quality and the 
        Assistant Secretary for Mental Health and Substance Use, 
        conduct a 5-year demonstration project for the purpose 
        described in paragraph (2) under which the Secretary shall--
                  ``(A) for the first 18-month period of such project, 
                award planning grants described in paragraph (3); and
                  ``(B) for the remaining 42-month period of such 
                project, provide to each State selected under paragraph 
                (4) payments in accordance with paragraph (5).
          ``(2) Purpose.--The purpose described in this paragraph is 
        for each State selected under paragraph (4) to increase the 
        treatment capacity of providers participating under the State 
        plan (or a waiver of such plan) to provide substance use 
        disorder treatment or recovery services under such plan (or 
        waiver) through the following activities:
                  ``(A) For the purpose described in paragraph 
                (3)(C)(i), activities that support an ongoing 
                assessment of the behavioral health treatment needs of 
                the State, taking into account the matters described in 
                subclauses (I) through (IV) of such paragraph.
                  ``(B) Activities that, taking into account the 
                results of the assessment described in subparagraph 
                (A), support the recruitment, training, and provision 
                of technical assistance for providers participating 
                under the State plan (or a waiver of such plan) that 
                offer substance use disorder treatment or recovery 
                services.
                  ``(C) Improved reimbursement for and expansion of, 
                through the provision of education, training, and 
                technical assistance, the number or treatment capacity 
                of providers participating under the State plan (or 
                waiver) that--
                          ``(i) are authorized to dispense drugs 
                        approved by the Food and Drug Administration 
                        for individuals with a substance use disorder 
                        who need withdrawal management or maintenance 
                        treatment for such disorder;
                          ``(ii) have in effect a registration or 
                        waiver under section 303(g) of the Controlled 
                        Substances Act for purposes of dispensing 
                        narcotic drugs to individuals for maintenance 
                        treatment or detoxification treatment and are 
                        in compliance with any regulation promulgated 
                        by the Assistant Secretary for Mental Health 
                        and Substance Use for purposes of carrying out 
                        the requirements of such section 303(g); and
                          ``(iii) are qualified under applicable State 
                        law to provide substance use disorder treatment 
                        or recovery services.
                  ``(D) Improved reimbursement for and expansion of, 
                through the provision of education, training, and 
                technical assistance, the number or treatment capacity 
                of providers participating under the State plan (or 
                waiver) that have the qualifications to address the 
                treatment or recovery needs of--
                          ``(i) individuals enrolled under the State 
                        plan (or a waiver of such plan) who have 
                        neonatal abstinence syndrome, in accordance 
                        with guidelines issued by the American Academy 
                        of Pediatrics and American College of 
                        Obstetricians and Gynecologists relating to 
                        maternal care and infant care with respect to 
                        neonatal abstinence syndrome;
                          ``(ii) pregnant women, postpartum women, and 
                        infants, particularly the concurrent treatment, 
                        as appropriate, and comprehensive case 
                        management of pregnant women, postpartum women 
                        and infants, enrolled under the State plan (or 
                        a waiver of such plan);
                          ``(iii) adolescents and young adults between 
                        the ages of 12 and 21 enrolled under the State 
                        plan (or a waiver of such plan); or
                          ``(iv) American Indian and Alaska Native 
                        individuals enrolled under the State plan (or a 
                        waiver of such plan).
          ``(3) Planning grants.--
                  ``(A) In general.--The Secretary shall, with respect 
                to the first 18-month period of the demonstration 
                project conducted under paragraph (1), award planning 
                grants to at least 10 States selected in accordance 
                with subparagraph (B) for purposes of preparing an 
                application described in paragraph (4)(C) and carrying 
                out the activities described in subparagraph (C).
                  ``(B) Selection.--In selecting States for purposes of 
                this paragraph, the Secretary shall--
                          ``(i) select States that have a State plan 
                        (or waiver of the State plan) approved under 
                        this title;
                          ``(ii) select States in a manner that ensures 
                        geographic diversity; and
                          ``(iii) give preference to States with a 
                        prevalence of substance use disorders (in 
                        particular opioid use disorders) that is 
                        comparable to or higher than the national 
                        average prevalence, as measured by aggregate 
                        per capita drug overdoses, or any other measure 
                        that the Secretary deems appropriate.
                  ``(C) Activities described.--Activities described in 
                this subparagraph are, with respect to a State, each of 
                the following:
                          ``(i) Activities that support the development 
                        of an initial assessment of the behavioral 
                        health treatment needs of the State to 
                        determine the extent to which providers are 
                        needed (including the types of such providers 
                        and geographic area of need) to improve the 
                        network of providers that treat substance use 
                        disorders under the State plan (or waiver), 
                        including the following:
                                  ``(I) An estimate of the number of 
                                individuals enrolled under the State 
                                plan (or a waiver of such plan) who 
                                have a substance use disorder.
                                  ``(II) Information on the capacity of 
                                providers to provide substance use 
                                disorder treatment or recovery services 
                                to individuals enrolled under the State 
                                plan (or waiver), including information 
                                on providers who provide such services 
                                and their participation under the State 
                                plan (or waiver).
                                  ``(III) Information on the gap in 
                                substance use disorder treatment or 
                                recovery services under the State plan 
                                (or waiver) based on the information 
                                described in subclauses (I) and (II).
                                  ``(IV) Projections regarding the 
                                extent to which the State participating 
                                under the demonstration project would 
                                increase the number of providers 
                                offering substance use disorder 
                                treatment or recovery services under 
                                the State plan (or waiver) during the 
                                period of the demonstration project.
                          ``(ii) Activities that, taking into account 
                        the results of the assessment described in 
                        clause (i), support the development of State 
                        infrastructure to, with respect to the 
                        provision of substance use disorder treatment 
                        or recovery services under the State plan (or a 
                        waiver of such plan), recruit prospective 
                        providers and provide training and technical 
                        assistance to such providers.
                  ``(D) Funding.--For purposes of subparagraph (A), 
                there is appropriated, out of any funds in the Treasury 
                not otherwise appropriated, $50,000,000, to remain 
                available until expended.
          ``(4) Post-planning states.--
                  ``(A) In general.--The Secretary shall, with respect 
                to the remaining 42-month period of the demonstration 
                project conducted under paragraph (1), select not more 
                than 5 States in accordance with subparagraph (B) for 
                purposes of carrying out the activities described in 
                paragraph (2) and receiving payments in accordance with 
                paragraph (5).
                  ``(B) Selection.--In selecting States for purposes of 
                this paragraph, the Secretary shall--
                          ``(i) select States that received a planning 
                        grant under paragraph (3);
                          ``(ii) select States that submit to the 
                        Secretary an application in accordance with the 
                        requirements in subparagraph (C), taking into 
                        consideration the quality of each such 
                        application;
                          ``(iii) select States in a manner that 
                        ensures geographic diversity; and
                          ``(iv) give preference to States with a 
                        prevalence of substance use disorders (in 
                        particular opioid use disorders) that is 
                        comparable to or higher than the national 
                        average prevalence, as measured by aggregate 
                        per capita drug overdoses, or any other measure 
                        that the Secretary deems appropriate.
                  ``(C) Applications.--
                          ``(i) In general.--A State seeking to be 
                        selected for purposes of this paragraph shall 
                        submit to the Secretary, at such time and in 
                        such form and manner as the Secretary requires, 
                        an application that includes such information, 
                        provisions, and assurances, as the Secretary 
                        may require, in addition to the following:
                                  ``(I) A proposed process for carrying 
                                out the ongoing assessment described in 
                                paragraph (2)(A), taking into account 
                                the results of the initial assessment 
                                described in paragraph (3)(C)(i).
                                  ``(II) A review of reimbursement 
                                methodologies and other policies 
                                related to substance use disorder 
                                treatment or recovery services under 
                                the State plan (or waiver) that may 
                                create barriers to increasing the 
                                number of providers delivering such 
                                services.
                                  ``(III) The development of a plan, 
                                taking into account activities carried 
                                out under paragraph (3)(C)(ii), that 
                                will result in long-term and 
                                sustainable provider networks under the 
                                State plan (or waiver) that will offer 
                                a continuum of care for substance use 
                                disorders. Such plan shall include the 
                                following:
                                          ``(aa) Specific activities to 
                                        increase the number of 
                                        providers (including providers 
                                        that specialize in providing 
                                        substance use disorder 
                                        treatment or recovery services, 
                                        hospitals, health care systems, 
                                        Federally qualified health 
                                        centers, and, as applicable, 
                                        certified community behavioral 
                                        health clinics) that offer 
                                        substance use disorder 
                                        treatment, recovery, or support 
                                        services, including short-term 
                                        detoxification services, 
                                        outpatient substance use 
                                        disorder services, and 
                                        evidence-based peer recovery 
                                        services.
                                          ``(bb) Strategies that will 
                                        incentivize providers described 
                                        in subparagraphs (C) and (D) of 
                                        paragraph (2) to obtain the 
                                        necessary training, education, 
                                        and support to deliver 
                                        substance use disorder 
                                        treatment or recovery services 
                                        in the State.
                                          ``(cc) Milestones and 
                                        timeliness for implementing 
                                        activities set forth in the 
                                        plan.
                                          ``(dd) Specific measurable 
                                        targets for increasing the 
                                        substance use disorder 
                                        treatment and recovery provider 
                                        network under the State plan 
                                        (or a waiver of such plan).
                                  ``(IV) A proposed process for 
                                reporting the information required 
                                under paragraph (6)(A), including 
                                information to assess the effectiveness 
                                of the efforts of the State to expand 
                                the capacity of providers to deliver 
                                substance use disorder treatment or 
                                recovery services during the period of 
                                the demonstration project under this 
                                subsection.
                                  ``(V) The expected financial impact 
                                of the demonstration project under this 
                                subsection on the State.
                                  ``(VI) A description of all funding 
                                sources available to the State to 
                                provide substance use disorder 
                                treatment or recovery services in the 
                                State.
                                  ``(VII) A preliminary plan for how 
                                the State will sustain any increase in 
                                the capacity of providers to deliver 
                                substance use disorder treatment or 
                                recovery services resulting from the 
                                demonstration project under this 
                                subsection after the termination of 
                                such demonstration project.
                                  ``(VIII) A description of how the 
                                State will coordinate the goals of the 
                                demonstration project with any waiver 
                                received pursuant to section 1115 for 
                                the delivery of substance use services 
                                under the State plan, as applicable.
                          ``(ii) Consultation.--In completing an 
                        application under clause (i), a State shall 
                        consult with relevant stakeholders, including 
                        Medicaid managed care plans, health care 
                        providers, and Medicaid beneficiary advocates, 
                        and include in such application a description 
                        of such consultation.
          ``(5) Payment.--
                  ``(A) In general.--For each quarter occurring during 
                the period for which the demonstration project is 
                conducted (after the first 18 months of such period), 
                the Secretary shall pay under this subsection, subject 
                to subparagraphs (C) and (D), to each State selected 
                under paragraph (4) an amount equal to 80 percent of so 
                much of the qualified sums expended during such 
                quarter.
                  ``(B) Qualified sums defined.--For purposes of 
                subparagraph (A), the term `qualified sums' means, with 
                respect to a State and a quarter, the amount equal to 
                the amount (if any) by which the sums expended by the 
                State during such quarter attributable to substance use 
                treatment or recovery services furnished by providers 
                participating under the State plan (or a waiver of such 
                plan) exceeds 1/4 of such sums expended by the State 
                during fiscal year 2018 attributable to substance use 
                treatment or recovery services.
                  ``(C) Non-duplication of payment.--In the case that 
                payment is made under subparagraph (A) with respect to 
                expenditures for substance use treatment or recovery 
                services furnished by providers participating under the 
                State plan (or a waiver of such plan), payment may not 
                also be made under subsection (a) with respect to 
                expenditures for the same services so furnished.
                  ``(D) Conditions.--In the case of a State selected 
                under paragraph (4) that provides substance use 
                disorder treatment and recovery services under a waiver 
                under section 1115, such State shall, as a condition of 
                receiving payments under subparagraph (A)--
                          ``(i) coordinate such services under such 
                        waiver with substance use disorder treatment 
                        and recovery services provided under the 
                        demonstration project under this subsection; 
                        and
                          ``(ii) take such actions as appropriate under 
                        the demonstration project to expand such 
                        services under such waiver.
          ``(6) Reports.--
                  ``(A) State reports.--A State receiving payments 
                under paragraph (5) shall, for the period of the 
                demonstration project under this subsection, submit to 
                the Secretary a quarterly report, with respect to 
                expenditures for substance use treatment or recovery 
                services for which payment is made to the State under 
                this subsection, on the following:
                          ``(i) The specific activities with respect to 
                        which payment under this subsection was 
                        provided.
                          ``(ii) The number of providers that delivered 
                        substance use disorder treatment or recovery 
                        services in the State under the demonstration 
                        project compared to the estimated number of 
                        providers that would have otherwise delivered 
                        such services in the absence of such 
                        demonstration project.
                          ``(iii) The number of individuals enrolled 
                        under the State plan (or a waiver of such plan) 
                        who received substance use disorder treatment 
                        or recovery services under the demonstration 
                        project compared to the estimated number of 
                        such individuals who would have otherwise 
                        received such services in the absence of such 
                        demonstration project.
                          ``(iv) Other matters as determined by the 
                        Secretary.
                  ``(B) CMS reports.--
                          ``(i) Initial report.--Not later than October 
                        1, 2020, the Administrator of the Centers for 
                        Medicare & Medicaid Services shall, in 
                        consultation with the Director of the Agency 
                        for Healthcare Research and Quality and the 
                        Assistant Secretary for Mental Health and 
                        Substance Use, submit to Congress an initial 
                        report on--
                                  ``(I) the States awarded planning 
                                grants under paragraph (3);
                                  ``(II) the criteria used in such 
                                selection; and
                                  ``(III) the activities carried out by 
                                such States under such planning grants.
                          ``(ii) Interim report.--Not later than 
                        October 1, 2022, the Administrator of the 
                        Centers for Medicare & Medicaid Services shall, 
                        in consultation with the Director of the Agency 
                        for Healthcare Research and Quality and the 
                        Assistant Secretary for Mental Health and 
                        Substance Use, submit to Congress an interim 
                        report--
                                  ``(I) on activities carried out under 
                                the demonstration project under this 
                                subsection;
                                  ``(II) on the extent to which States 
                                selected under paragraph (4) have 
                                achieved the stated goals submitted in 
                                their applications under subparagraph 
                                (C) of such paragraph;
                                  ``(III) with a description of the 
                                strengths and limitations of such 
                                demonstration project; and
                                  ``(IV) with a plan for the 
                                sustainability of such project.
                          ``(iii) Final report.--Not later than October 
                        1, 2024, the Administrator of the Centers for 
                        Medicare & Medicaid Services shall, in 
                        consultation with the Director of the Agency 
                        for Healthcare Research and Quality and the 
                        Assistant Secretary for Mental Health and 
                        Substance Use, submit to Congress a final 
                        report--
                                  ``(I) providing updates on the 
                                matters reported in the interim report 
                                under clause (ii);
                                  ``(II) including a description of any 
                                changes made with respect to the 
                                demonstration project under this 
                                subsection after the submission of such 
                                interim report; and
                                  ``(III) evaluating such demonstration 
                                project.
                  ``(C) AHRQ report.--Not later than three years after 
                the date of the enactment of this subsection, the 
                Director of the Agency for Healthcare Research and 
                Quality shall submit to Congress a summary on the 
                experiences of States awarded planning grants under 
                paragraph (3) and States selected under paragraph (4).
          ``(7) Data sharing and best practices.--During the period of 
        the demonstration project under this subsection, the Secretary 
        shall, in collaboration with States selected under paragraph 
        (4), facilitate data sharing and the development of best 
        practices between such States and States that were not so 
        selected.
          ``(8) CMS funding.--There is appropriated, out of any funds 
        in the Treasury not otherwise appropriated, $5,000,000 to the 
        Centers for Medicare & Medicaid Services for purposes of 
        implementing this subsection. Such amount shall remain 
        available until expended.''.

                          Purpose and Summary

    H.R. 5477 was introduced on April 11, 2018, by Rep. Tom 
O'Halleran (D-AZ). The bill requires the Centers for Medicare 
and Medicaid Services (CMS) to carry out a demonstration 
project to provide an enhanced federal matching rate for state 
Medicaid expenditures related to the expansion of substance-use 
treatment and recovery services.

                  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\
---------------------------------------------------------------------------
    \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/.
---------------------------------------------------------------------------
    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.'' 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.
    However, as MACPAC noted, ``there are gaps in the continuum 
of care, and states vary in the extent to which they cover 
needed treatment.'' 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.'' 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.
    One of the barriers to appropriate substance use disorder 
treatment consistently identified by Medicaid directors and 
health policy experts is a shortage of providers. A shortage of 
providers creates barriers for Medicaid beneficiaries to access 
treatment. Approximately 40 percent of U.S. counties lack a 
single outpatient addiction treatment program that accepts any 
Medicaid enrollees.\12\ In 2012, 96 percent of states, 
including the District of Columbia, had opioid abuse or 
dependence rates higher than their current buprenorphine 
treatment capacity rates.\13\ In addition to the shortage of 
providers, most opioid treatment programs are located in urban 
areas, which causes significant regional disparities within and 
among states.\14\
---------------------------------------------------------------------------
    \12\Cummings, J.R., Wen, H., Ko, M. & Druss, B.G., ``Race/Ethnicity 
and Geographic Access to Medicaid Substance Use Disorder Treatment 
facilities in the United States,'' Journal of the American Medical 
Association, Psychiatry, February 2014, 71(2), 190-196.
    \13\Jones, C.M, Campopiano, M., Baldwin, G. & McCance-Katz, E. 
``National and State Treatment Need and Capacity for Opioid Agonist 
Medication-Assisted Treatment,'' American Journal of Public Health, 
August 2015, 105(8), 55-63.
    \14\Abraham, A.J., Andrews, C.M., Yingling, M.E. & Shannon, J. 
``Geographic Disparities in Availability of Opioid Use Disorder 
Treatment for Medicaid Enrollees,'' Health Services Research, February 
2018, 53(1), 389-404.
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                            Committee Action

    On April 11 and 12, 2018, the Subcommittee on Health held a 
hearing on H.R. 5477. 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 May 17, 2018, the full Committee on Energy and Commerce 
met in open markup session and ordered H.R. 5477, 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. 5477 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. 5477 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 the 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:
    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 patterns for 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 
information 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 
authorize a demonstration project to expand treatment capacity 
of current and new Medicaid providers.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 5477 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. 5477 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. 5477 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 ``Rural 
Development of Opioid Capacity Services Act'' or the ``Rural 
DOCS Act.''

Section 2. Demonstration project to increase substance use provider 
        capacity under the Medicaid Program

    Section 2 amends section 1903 of the Social Security Act. 
Section 2 authorizes a demonstration project to expand 
treatment capacity of current and new Medicaid providers 
through expanding technical assistance to Medicaid providers 
for Medicaid billing and substance use disorder education and 
allowing states to receive enhanced matching dollars to raise 
reimbursement rates for providers delivering SUD services. 
Section 2 includes planning grants for at least ten states to 
develop applications for the demonstration project and recruit 
prospective Medicaid providers.
    Section 2 allows for five states to participate in the 
demonstration and receive an enhanced FMAP. These five states 
would be eligible to receive an 80 percent match for new 
spending on activities in the demonstration.
    Finally, section 2 requires the states and CMS to conduct 
robust evaluations of the demonstrations and requires a report 
detailing best practices.

         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 (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

           *       *       *       *       *       *       *



                           PAYMENT TO STATES

  Sec. 1903. (a) From the sums appropriated therefor, the 
Secretary (except as otherwise provided in this section) shall 
pay to each State which has a plan approved under this title, 
for each quarter, beginning with the quarter commencing January 
1, 1966--
          (1) an amount equal to the Federal medical assistance 
        percentage (as defined in section 1905(b), subject to 
        subsections (g) and (j) of this section and subsection 
        1923(f)) of the total amount expended during such 
        quarter as medical assistance under the State plan; 
        plus
          (2)(A) an amount equal to 75 per centum of so much of 
        the sums expended during such quarter (as found 
        necessary by the Secretary for the proper and efficient 
        administration of the State plan) as are attributable 
        to compensation or training of skilled professional 
        medical personnel, and staff directly supporting such 
        personnel, of the State agency or any other public 
        agency; plus
          (B) notwithstanding paragraph (1) or subparagraph 
        (A), with respect to amounts expended for nursing aide 
        training and competency evaluation programs, and 
        competency evaluation programs, described in section 
        1919(e)(1) (including the costs for nurse aides to 
        complete such competency evaluation programs), 
        regardless of whether the programs are provided in or 
        outside nursing facilities or of the skill of the 
        personnel involved in such programs, an amount equal to 
        50 percent (or, for calendar quarters beginning on or 
        after July 1, 1988, and before October 1, 1990, the 
        lesser of 90 percent or the Federal medical assistance 
        percentage plus 25 percentage points) of so much of the 
        sums expended during such quarter (as found necessary 
        by the Secretary for the proper and efficient 
        administration of the State plan) as are attributable 
        to such programs; plus
          (C) an amount equal to 75 percent of so much of the 
        sums expended during such quarter (as found necessary 
        by the Secretary for the proper and efficient 
        administration of the State plan) as are attributable 
        to preadmission screening and resident review 
        activities conducted by the State under section 
        1919(e)(7); plus
          (D) for each calendar quarter during--
                  (i) fiscal year 1991, an amount equal to 90 
                percent,
                  (ii) fiscal year 1992, an amount equal to 85 
                percent,
                  (iii) fiscal year 1993, an amount equal to 80 
                percent, and
                  (iv) fiscal year 1994 and thereafter, an 
                amount equal to 75 percent,
        of so much of the sums expended during such quarter (as 
        found necessary by the Secretary for the proper and 
        efficient administration of the State plan) as are 
        attributable to State activities under section 1919(g); 
        plus
          (E) an amount equal to 75 percent of so much of the 
        sums expended during such quarter (as found necessary 
        by the Secretary for the proper and efficient 
        administration of the State plan) as are attributable 
        to translation or interpretation services in connection 
        with the enrollment of, retention of, and use of 
        services under this title by, children of families for 
        whom English is not the primary language; plus
          (3) an amount equal to--
                  (A)(i) 90 per centum of so much of the sums 
                expended during such quarter as are 
                attributable to the design, development, or 
                installation of such mechanized claims 
                processing and information retrieval systems as 
                the Secretary determines are likely to provide 
                more efficient, economical, and effective 
                administration of the plan and to be compatible 
                with the claims processing and information 
                retrieval systems utilized in the 
                administration of title XVIII, including the 
                State's share of the cost of installing such a 
                system to be used jointly in the administration 
                of such State's plan and the plan of any other 
                State approved under this title,
                  (ii) 90 per centum of so much of the sums 
                expended during any such quarter in the fiscal 
                year ending June 30, 1972, or the fiscal year 
                ending June 30, 1973, as are attributable to 
                the design, development, or installation of 
                cost determination systems for State-owned 
                general hospitals (except that the total amount 
                paid to all States under this clause for either 
                such fiscal year shall not exceed $150,000), 
                and
                  (iii) an amount equal to the Federal medical 
                assistance percentage (as defined in section 
                1905(b)) of so much of the sums expended during 
                such quarter (as found necessary by the 
                Secretary for the proper and efficient 
                administration of the State plan) as are 
                attributable to such developments or 
                modifications of systems of the type described 
                in clause (i) as are necessary for the 
                efficient collection and reporting on child 
                health measures; and
                  (B) 75 per centum of so much of the sums 
                expended during such quarter as are 
                attributable to the operation of systems 
                (whether such systems are operated directly by 
                the State or by another person under a contract 
                with the State) of the type described in 
                subparagraph (A)(i) (whether or not designed, 
                developed, or installed with assistance under 
                such subparagraph) which are approved by the 
                Secretary and which include provision for 
                prompt written notice to each individual who is 
                furnished services covered by the plan, or to 
                each individual in a sample group of 
                individuals who are furnished such services, of 
                the specific services (other than confidential 
                services) so covered, the name of the person or 
                persons furnishing the services, the date or 
                dates on which the services were furnished, and 
                the amount of the payment or payments made 
                under the plan on account of the services; and
                  (C)(i) 75 per centum of the sums expended 
                with respect to costs incurred during such 
                quarter (as found necessary by the Secretary 
                for the proper and efficient administration of 
                the State plan) as are attributable to the 
                performance of medical and utilization review 
                by a utilization and quality control peer 
                review organization or by an entity which meets 
                the requirements of section 1152, as determined 
                by the Secretary, under a contract entered into 
                under section 1902(d); and
                  (ii) 75 percent of the sums expended with 
                respect to costs incurred during such quarter 
                (as found necessary by the Secretary for the 
                proper and efficient administration of the 
                State plan) as are attributable to the 
                performance of independent external reviews 
                conducted under section 1932(c)(2); and
                  (D) 75 percent of so much of the sums 
                expended by the State plan during a quarter in 
                1991, 1992, or 1993, as the Secretary 
                determines is attributable to the statewide 
                adoption of a drug use review program which 
                conforms to the requirements of section 
                1927(g);
                  (E) 50 percent of the sums expended with 
                respect to costs incurred during such quarter 
                as are attributable to providing--
                          (i) services to identify and educate 
                        individuals who are likely to be 
                        eligible for medical assistance under 
                        this title and who have Sickle Cell 
                        Disease or who are carriers of the 
                        sickle cell gene, including education 
                        regarding how to identify such 
                        individuals; or
                          (ii) education regarding the risks of 
                        stroke and other complications, as well 
                        as the prevention of stroke and other 
                        complications, in individuals who are 
                        likely to be eligible for medical 
                        assistance under this title and who 
                        have Sickle Cell Disease; and
                  (F)(i) 100 percent of so much of the sums 
                expended during such quarter as are 
                attributable to payments to Medicaid providers 
                described in subsection (t)(1) to encourage the 
                adoption and use of certified EHR technology; 
                and
                  (ii) 90 percent of so much of the sums 
                expended during such quarter as are 
                attributable to payments for reasonable 
                administrative expenses related to the 
                administration of payments described in clause 
                (i) if the State meets the condition described 
                in subsection (t)(9); plus
                  (H)(i) 90 percent of the sums expended during 
                the quarter as are attributable to the design, 
                development, or installation of such mechanized 
                verification and information retrieval systems 
                as the Secretary determines are necessary to 
                implement section 1902(ee) (including a system 
                described in paragraph (2)(B) thereof), and
                  (ii) 75 percent of the sums expended during 
                the quarter as are attributable to the 
                operation of systems to which clause (i) 
                applies, plus
          (4) an amount equal to 100 percent of the sums 
        expended during the quarter which are attributable to 
        the costs of the implementation and operation of the 
        immigration status verification system described in 
        section 1137(d); plus
          (5) an amount equal to 90 per centum of the sums 
        expended during such quarter which are attributable to 
        the offering, arranging, and furnishing (directly or on 
        a contract basis) of family planning services and 
        supplies;
          (6) subject to subsection (b)(3), an amount equal 
        to--
                  (A) 90 per centum of the sums expended during 
                such a quarter within the twelve-quarter period 
                beginning with the first quarter in which a 
                payment is made to the State pursuant to this 
                paragraph, and
                  (B) 75 per centum of the sums expended during 
                each succeeding calendar quarter,
        with respect to costs incurred during such quarter (as 
        found necessary by the Secretary for the elimination of 
        fraud in the provision and administration of medical 
        assistance provided under the State plan) which are 
        attributable to the establishment and operation of 
        (including the training of personnel employed by) a 
        State medicaid fraud control unit (described in 
        subsection (q)); plus
          (7) subject to section 1919(g)(3)(B), an amount equal 
        to 50 per centum of the remainder of the amounts 
        expended during such quarter as found necessary by the 
        Secretary for the proper and efficient administration 
        of the State plan.
  (b)(1) Notwithstanding the preceding provisions of this 
section, the amount determined under subsection (a)(1) for any 
State for any quarter beginning after December 31, 1969, shall 
not take into account any amounts expended as medical 
assistance with respect to individuals aged 65 or over and 
disabled individuals entitled to hospital insurance benefits 
under title XVIII which would not have been so expended if the 
individuals involved had been enrolled in the insurance program 
established by part B of title XVIII, other than amounts 
expended under provisions of the plan of such State required by 
section 1902(a)(34).
  (2) For limitation on Federal participation for capital 
expenditures which are out of conformity with a comprehensive 
plan of a State or areawide planning agency, see section 1122.
  (3) The amount of funds which the Secretary is otherwise 
obligated to pay a State during a quarter under subsection 
(a)(6) may not exceed the higher of--
          (A) $125,000, or
          (B) one-quarter of 1 per centum of the sums expended 
        by the Federal, State, and local governments during the 
        previous quarter in carrying out the State's plan under 
        this title.
  (4) Amounts expended by a State for the use of an enrollment 
broker in marketing medicaid managed care organizations and 
other managed care entities to eligible individuals under this 
title shall be considered, for purposes of subsection (a)(7), 
to be necessary for the proper and efficient administration of 
the State plan but only if the following conditions are met 
with respect to the broker:
          (A) The broker is independent of any such entity and 
        of any health care providers (whether or not any such 
        provider participates in the State plan under this 
        title) that provide coverage of services in the same 
        State in which the broker is conducting enrollment 
        activities.
          (B) No person who is an owner, employee, consultant, 
        or has a contract with the broker either has any direct 
        or indirect financial interest with such an entity or 
        health care provider or has been excluded from 
        participation in the program under this title or title 
        XVIII or debarred by any Federal agency, or subject to 
        a civil money penalty under this Act.
  (5) Notwithstanding the preceding provisions of this section, 
the amount determined under subsection (a)(1) for any State 
shall be decreased in a quarter by the amount of any health 
care related taxes (described in section 1902(w)(3)(A)) that 
are imposed on a hospital described in subsection (w)(3)(F) in 
that quarter.
  (c) Nothing in this title shall be construed as prohibiting 
or restricting, or authorizing the Secretary to prohibit or 
restrict, payment under subsection (a) for medical assistance 
for covered services furnished to a child with a disability 
because such services are included in the child's 
individualized education program established pursuant to part B 
of the Individuals with Disabilities Education Act or furnished 
to an infant or toddler with a disability because such services 
are included in the child's individualized family service plan 
adopted pursuant to part C of such Act.
  (d)(1) Prior to the beginning of each quarter, the Secretary 
shall estimate the amount to which a State will be entitled 
under subsections (a) and (b) for such quarter, such estimates 
to be based on (A) a report filed by the State containing its 
estimate of the total sum to be expended in such quarter in 
accordance with the provisions of such subsections, and stating 
the amount appropriated or made available by the State and its 
political subdivisions for such expenditures in such quarter, 
and if such amount is less than the State's proportionate share 
of the total sum of such estimated expenditures, the source or 
sources from which the difference is expected to be derived, 
and (B) such other investigation as the Secretary may find 
necessary.
  (2)(A) The Secretary shall then pay to the State, in such 
installments as he may determine, the amount so estimated, 
reduced or increased to the extent of any overpayment or 
underpayment which the Secretary determines was made under this 
section to such State for any prior quarter and with respect to 
which adjustment has not already been made under this 
subsection.
  (B) Expenditures for which payments were made to the State 
under subsection (a) shall be treated as an overpayment to the 
extent that the State or local agency administering such plan 
has been reimbursed for such expenditures by a third party 
pursuant to the provisions of its plan in compliance with 
section 1902(a)(25).
  (C) For purposes of this subsection, when an overpayment is 
discovered, which was made by a State to a person or other 
entity, the State shall have a period of 1 year in which to 
recover or attempt to recover such overpayment before 
adjustment is made in the Federal payment to such State on 
account of such overpayment. Except as otherwise provided in 
subparagraph (D), the adjustment in the Federal payment shall 
be made at the end of the 1-year period, whether or not 
recovery was made.
  (D)(i) In any case where the State is unable to recover a 
debt which represents an overpayment (or any portion thereof) 
made to a person or other entity on account of such debt having 
been discharged in bankruptcy or otherwise being uncollectable, 
no adjustment shall be made in the Federal payment to such 
State on account of such overpayment (or portion thereof).
  (ii) In any case where the State is unable to recover a debt 
which represents an overpayment (or any portion thereof) made 
to a person or other entity due to fraud within 1 year of 
discovery because there is not a final determination of the 
amount of the overpayment under an administrative or judicial 
process (as applicable), including as a result of a judgment 
being under appeal, no adjustment shall be made in the Federal 
payment to such State on account of such overpayment (or 
portion thereof) before the date that is 30 days after the date 
on which a final judgment (including, if applicable, a final 
determination on an appeal) is made.
  (3)(A) The pro rata share to which the United States is 
equitably entitled, as determined by the Secretary, of the net 
amount recovered during any quarter by the State or any 
political subdivision thereof with respect to medical 
assistance furnished under the State plan shall be considered 
an overpayment to be adjusted under this subsection.
  (B)(i) Subparagraph (A) and paragraph (2)(B) shall not apply 
to any amount recovered or paid to a State as part of the 
comprehensive settlement of November 1998 between manufacturers 
of tobacco products, as defined in section 5702(d) of the 
Internal Revenue Code of 1986, and State Attorneys General, or 
as part of any individual State settlement or judgment reached 
in litigation initiated or pursued by a State against one or 
more such manufacturers.
  (ii) Except as provided in subsection (i)(19), a State may 
use amounts recovered or paid to the State as part of a 
comprehensive or individual settlement, or a judgment, 
described in clause (i) for any expenditures determined 
appropriate by the State.
  (4) Upon the making of any estimate by the Secretary under 
this subsection, any appropriations available for payments 
under this section shall be deemed obligated.
  (5) In any case in which the Secretary estimates that there 
has been an overpayment under this section to a State on the 
basis of a claim by such State that has been disallowed by the 
Secretary under section 1116(d), and such State disputes such 
disallowance, the amount of the Federal payment in controversy 
shall, at the option of the State, be retained by such State or 
recovered by the Secretary pending a final determination with 
respect to such payment amount. If such final determination is 
to the effect that any amount was properly disallowed, and the 
State chose to retain payment of the amount in controversy, the 
Secretary shall offset, from any subsequent payments made to 
such State under this title, an amount equal to the proper 
amount of the disallowance plus interest on such amount 
disallowed for the period beginning on the date such amount was 
disallowed and ending on the date of such final determination 
at a rate (determined by the Secretary) based on the average of 
the bond equivalent of the weekly 90-day treasury bill auction 
rates during such period.
  (6)(A) Each State (as defined in subsection (w)(7)(D)) shall 
include, in the first report submitted under paragraph (1) 
after the end of each fiscal year, information related to--
          (i) provider-related donations made to the State or 
        units of local government during such fiscal year, and
          (ii) health care related taxes collected by the State 
        or such units during such fiscal year.
  (B) Each State shall include, in the first report submitted 
under paragraph (1) after the end of each fiscal year, 
information related to the total amount of payment adjustments 
made, and the amount of payment adjustments made to individual 
providers (by provider), under section 1923(c) during such 
fiscal year.
  (e) A State plan approved under this title may include, as a 
cost with respect to hospital services under the plan under 
this title, periodic expenditures made to reflect transitional 
allowances established with respect to a hospital closure or 
conversion under section 1884.
  (f)(1)(A) Except as provided in paragraph (4), payment under 
the preceding provisions of this section shall not be made with 
respect to any amount expended as medical assistance in a 
calendar quarter, in any State, for any member of a family the 
annual income of which exceeds the applicable income limitation 
determined under this paragraph.
  (B)(i) Except as provided in clause (ii) of this 
subparagraph, the applicable income limitation with respect to 
any family is the amount determined, in accordance with 
standards prescribed by the Secretary, to be equivalent to 
133\1/3\ percent of the highest amount which would ordinarily 
be paid to a family of the same size without any income or 
resources, in the form of money payments, under the plan of the 
State approved under part A of title IV of this Act.
  (ii) If the Secretary finds that the operation of a uniform 
maximum limits payments to families of more than one size, he 
may adjust the amount otherwise determined under clause (i) to 
take account of families of different sizes.
  (C) The total amount of any applicable income limitation 
determined under subparagraph (B) shall, if it is not a 
multiple of $100 or such other amount as the Secretary may 
prescribe, be rounded to the next higher multiple of $100 or 
such other amount, as the case may be.
  (2)(A) In computing a family's income for purposes of 
paragraph (1), there shall be excluded any costs (whether in 
the form of insurance premiums or otherwise and regardless of 
whether such costs are reimbursed under another public program 
of the State or political subdivision thereof) incurred by such 
family for medical care or for any other type of remedial care 
recognized under State law or, (B) notwithstanding section 1916 
at State option, an amount paid by such family, at the family's 
option, to the State, provided that the amount, when combined 
with costs incurred in prior months, is sufficient when 
excluded from the family's income to reduce such family's 
income below the applicable income limitation described in 
paragraph (1). The amount of State expenditures for which 
medical assistance is available under subsection (a)(1) will be 
reduced by amounts paid to the State pursuant to this 
subparagraph.
  (3) For purposes of paragraph (1)(B), in the case of a family 
consisting of only one individual, the ``highest amount which 
would ordinarily be paid'' to such family under the State's 
plan approved under part A of title IV of this Act shall be the 
amount determined by the State agency (on the basis of 
reasonable relationship to the amounts payable under such plan 
to families consisting of two or more persons) to be the amount 
of the aid which would ordinarily be payable under such plan to 
a family (without any income or resources) consisting of one 
person if such plan provided for aid to such a family.
  (4) The limitations on payment imposed by the preceding 
provisions of this subsection shall not apply with respect to 
any amount expended by a State as medical assistance for any 
individual described in section 1902(a)(10)(A)(i)(III), 
1902(a)(10)(A)(i)(IV), 1902(a)(10)(A)(i)(V), 
1902(a)(10)(A)(i)(VI), 1902(a)(10)(A)(i)(VII), 
1902(a)(10)(A)(i)(VIII),1902(a)(10)(A)(i)(IX), 
1902(a)(10)(A)(ii)(IX), 1902(a)(10)(A)(ii)(X), 
1902(a)(10)(A)(ii)(XIII), 1902(a)(10)(A)(ii)(XIV), or 
1902(a)(10)(A)(ii)(XV), 1902(a)(10)(A)(ii)(XVI), 
1902(a)(10)(A)(ii)(XVII), 1902(a)(10)(A)(ii)(XVIII), 
1902(a)(10)(A)(ii)(XIX), 1902(a)(10)(A)(ii)(XX), 
1902(a)(10)(A)(ii)(XXI), 1902(a)(10)(A)(ii)(XXII), 1905(p)(1) 
or for any individual--
          (A) who is receiving aid or assistance under any plan 
        of the State approved under title I, X, XIV or XVI, or 
        part A of title IV, or with respect to whom 
        supplemental security income benefits are being paid 
        under title XVI, or
          (B) who is not receiving such aid or assistance, and 
        with respect to whom such benefits are not being paid, 
        but (i) is eligible to receive such aid or assistance, 
        or to have such benefits paid with respect to him, or 
        (ii) would be eligible to receive such aid or 
        assistance, or to have such benefits paid with respect 
        to him if he were not in a medical institution, or
          (C) with respect to whom there is being paid, or who 
        is eligible, or would be eligible if he were not in a 
        medical institution, to have paid with respect to him, 
        a State supplementary payment and is eligible for 
        medical assistance equal in amount, duration, and scope 
        to the medical assistance made available to individuals 
        described in section 1902(a)(10)(A), or who is a PACE 
        program eligible individual enrolled in a PACE program 
        under section 1934, but only if the income of such 
        individual (as determined under section 1612, but 
        without regard to subsection (b) thereof) does not 
        exceed 300 percent of the supplemental security income 
        benefit rate established by section 1611(b)(1),
at the time of the provision of the medical assistance giving 
rise to such expenditure.
  (g)(1) Subject to paragraph (3), with respect to amounts paid 
for the following services furnished under the State plan after 
June 30, 1973 (other than services furnished pursuant to a 
contract with a health maintenance organization as defined in 
section 1876 or which is a qualified health maintenance 
organization (as defined in section 1310(d) of the Public 
Health Service Act)), the Federal medical assistance percentage 
shall be decreased as follows: After an individual has received 
inpatient hospital services or services in an intermediate care 
facility for the mentally retarded for 60 days or inpatient 
mental hospital services for 90 days (whether or not such days 
are consecutive), during any fiscal year, the Federal medical 
assistance percentage with respect to amounts paid for any such 
care furnished thereafter to such individual shall be decreased 
by a per centum thereof (determined under paragraph (5)) unless 
the State agency responsible for the administration of the plan 
makes a showing satisfactory to the Secretary that, with 
respect to each calendar quarter for which the State submits a 
request for payment at the full Federal medical assistance 
percentage for amounts paid for inpatient hospital services or 
services in an intermediate care facility for the mentally 
retarded furnished beyond 60 days (or inpatient mental hospital 
services furnished beyond 90 days), such State has an effective 
program of medical review of the care of patients in mental 
hospitals and intermediate care facilities for the mentally 
retarded pursuant to paragraphs (26) and (31) of section 
1902(a) whereby the professional management of each case is 
reviewed and evaluated at least annually by independent 
professional review teams. In determining the number of days on 
which an individual has received services described in this 
subsection, there shall not be counted any days with respect to 
which such individual is entitled to have payments made (in 
whole or in part) on his behalf under section 1812.
  (2) The Secretary shall, as part of his validation procedures 
under this subsection, conduct timely sample onsite surveys of 
private and public institutions in which recipients of medical 
assistance may receive care and services under a State plan 
approved under this title, and his findings with respect to 
such surveys (as well as the showings of the State agency 
required under this subsection) shall be made available for 
public inspection.
  (3)(A) No reduction in the Federal medical assistance 
percentage of a State otherwise required to be imposed under 
this subsection shall take effect--
          (i) if such reduction is due to the State's 
        unsatisfactory or invalid showing made with respect to 
        a calendar quarter beginning before January 1, 1977;
          (ii) before January 1, 1978;
          (iii) unless a notice of such reduction has been 
        provided to the State at least 30 days before the date 
        such reduction takes effect; or
          (iv) due to the State's unsatisfactory or invalid 
        showing made with respect to a calendar quarter 
        beginning after September 30, 1977, unless notice of 
        such reduction has been provided to the State no later 
        than the first day of the fourth calendar quarter 
        following the calendar quarter with respect to which 
        such showing was made.
  (B) The Secretary shall waive application of any reduction in 
the Federal medical assistance percentage of a State otherwise 
required to be imposed under paragraph (1) because a showing by 
the State, made under such paragraph with respect to a calendar 
quarter ending after January 1, 1977, and before January 1, 
1978, is determined to be either unsatisfactory under such 
paragraph or invalid under paragraph (2), if the Secretary 
determines that the State's showing made under paragraph (1) 
with respect to any calendar quarter ending on or before 
December 31, 1978, is satisfactory under such paragraph and is 
valid under paragraph (2).
  (4)(A) The Secretary may not find the showing of a State, 
with respect to a calendar quarter under paragraph (1), to be 
satisfactory if the showing is submitted to the Secretary later 
than the 30th day after the last day of the calendar quarter, 
unless the State demonstrates to the satisfaction of the 
Secretary good cause for not meeting such deadline.
  (B) The Secretary shall find a showing of a State, with 
respect to a calendar quarter under paragraph (1), to be 
satisfactory under such paragraph with respect to the 
requirement that the State conduct annual onsite inspections in 
mental hospitals and intermediate care facilities for the 
mentally retarded under paragraphs (26) and (31) of section 
1902(a), if the showing demonstrates that the State has 
conducted such an onsite inspection during the 12-month period 
ending on the last date of the calendar quarter--
          (i) in each of not less than 98 per centum of the 
        number of such hospitals and facilities requiring such 
        inspection, and
          (ii) in every such hospital or facility which has 200 
        or more beds,
and that, with respect to such hospitals and facilities not 
inspected within such period, the State has exercised good 
faith and due diligence in attempting to conduct such 
inspection, or if the State demonstrates to the satisfaction of 
the Secretary that it would have made such a showing but for 
failings of a technical nature only.
  (5) In the case of a State's unsatisfactory or invalid 
showing made with respect to a type of facility or 
institutional services in a calendar quarter, the per centum 
amount of the reduction of the State's Federal medical 
assistance percentage for that type of services under paragraph 
(1) is equal to 33\1/3\ per centum multiplied by a fraction, 
the denominator of which is equal to the total number of 
patients receiving that type of services in that quarter under 
the State plan in facilities or institutions for which a 
showing was required to be made under this subsection, and the 
numerator of which is equal to the number of such patients 
receiving such type of services in that quarter in those 
facilities or institutions for which a satisfactory and valid 
showing was not made for that calendar quarter.
  (6)(A) Recertifications required under section 1902(a)(44) 
shall be conducted at least every 60 days in the case of 
inpatient hospital services.
  (B) Such recertifications in the case of services in an 
intermediate care facility for the mentally retarded shall be 
conducted at least--
          (i) 60 days after the date of the initial 
        certification,
          (ii) 180 days after the date of the initial 
        certification,
          (iii) 12 months after the date of the initial 
        certification,
          (iv) 18 months after the date of the initial 
        certification,
          (v) 24 months after the date of the initial 
        certification, and
          (vi) every 12 months thereafter.
  (C) For purposes of determining compliance with the schedule 
established by this paragraph, a recertification shall be 
considered to have been done on a timely basis if it was 
performed not later than 10 days after the date the 
recertification was otherwise required and the State 
establishes good cause why the physician or other person making 
such recertification did not meet such schedule.
  (i) Payment under the preceding provisions of this section 
shall not be made--
          (1) for organ transplant procedures unless the State 
        plan provides for written standards respecting the 
        coverage of such procedures and unless such standards 
        provide that--
                  (A) similarly situated individuals are 
                treated alike; and
                  (B) any restriction, on the facilities or 
                practitioners which may provide such 
                procedures, is consistent with the 
                accessibility of high quality care to 
                individuals eligible for the procedures under 
                the State plan; or
          (2) with respect to any amount expended for an item 
        or service (other than an emergency item or service, 
        not including items or services furnished in an 
        emergency room of a hospital) furnished--
                  (A) under the plan by any individual or 
                entity during any period when the individual or 
                entity is excluded from participation under 
                title V, XVIII, or XX or under this title 
                pursuant to section 1128, 1128A, 1156, or 
                1842(j)(2);
                  (B) at the medical direction or on the 
                prescription of a physician, during the period 
                when such physician is excluded from 
                participation under title V, XVIII, or XX or 
                under this title pursuant to section 1128, 
                1128A, 1156, or 1842(j)(2) and when the person 
                furnishing such item or service knew or had 
                reason to know of the exclusion (after a 
                reasonable time period after reasonable notice 
                has been furnished to the person);
                  (C) by any individual or entity to whom the 
                State has failed to suspend payments under the 
                plan during any period when there is pending an 
                investigation of a credible allegation of fraud 
                against the individual or entity, as determined 
                by the State in accordance with regulations 
                promulgated by the Secretary for purposes of 
                section 1862(o) and this subparagraph, unless 
                the State determines in accordance with such 
                regulations there is good cause not to suspend 
                such payments;
                  (D) beginning on July 1, 2018, under the plan 
                by any provider of services or person whose 
                participation in the State plan is terminated 
                (as described in section 1902(kk)(8)) after the 
                date that is 60 days after the date on which 
                such termination is included in the database or 
                other system under section 1902(ll); or
                  (E) with respect to any amount expended for 
                such an item or service furnished during 
                calendar quarters beginning on or after October 
                1, 2017, subject to section 
                1902(kk)(4)(A)(ii)(II), within a geographic 
                area that is subject to a moratorium imposed 
                under section 1866(j)(7) by a provider or 
                supplier that meets the requirements specified 
                in subparagraph (C)(iii) of such section, 
                during the period of such moratorium; or
          (3) with respect to any amount expended for inpatient 
        hospital services furnished under the plan (other than 
        amounts attributable to the special situation of a 
        hospital which serves a disproportionate number of low 
        income patients with special needs) to the extent that 
        such amount exceeds the hospital's customary charges 
        with respect to such services or (if such services are 
        furnished under the plan by a public institution free 
        of charge or at nominal charges to the public) exceeds 
        an amount determined on the basis of those items 
        (specified in regulations prescribed by the Secretary) 
        included in the determination of such payment which the 
        Secretary finds will provide fair compensation to such 
        institution for such services; or
          (4) with respect to any amount expended for care or 
        services furnished under the plan by a hospital unless 
        such hospital has in effect a utilization review plan 
        which meets the requirements imposed by section 1861(k) 
        for purposes of title XVIII; and if such hospital has 
        in effect such a utilization review plan for purposes 
        of title XVIII, such plan shall serve as the plan 
        required by this subsection (with the same standards 
        and procedures and the same review committee or group) 
        as a condition of payment under this title; the 
        Secretary is authorized to waive the requirements of 
        this paragraph if the State agency demonstrates to his 
        satisfaction that it has in operation utilization 
        review procedures which are superior in their 
        effectiveness to the procedures required under section 
        1861(k); or
          (5) with respect to any amount expended for any drug 
        product for which payment may not be made under part B 
        of title XVIII because of section 1862(c); or
          (6) with respect to any amount expended for inpatient 
        hospital tests (other than in emergency situations) not 
        specifically ordered by the attending physician or 
        other responsible practitioner; or
          (7) with respect to any amount expended for clinical 
        diagnostic laboratory tests performed by a physician, 
        independent laboratory, or hospital, to the extent such 
        amount exceeds the amount that would be recognized 
        under section 1833(h) for such tests performed for an 
        individual enrolled under part B of title XVIII; or
          (8) with respect to any amount expended for medical 
        assistance (A) for nursing facility services to 
        reimburse (or otherwise compensate) a nursing facility 
        for payment of a civil money penalty imposed under 
        section 1919(h) or (B) for home and community care to 
        reimburse (or otherwise compensate) a provider of such 
        care for payment of a civil money penalty imposed under 
        this title or title XI or for legal expenses in defense 
        of an exclusion or civil money penalty under this title 
        or title XI if there is no reasonable legal ground for 
        the provider's case; or
          (10)(A) with respect to covered outpatient drugs 
        unless there is a rebate agreement in effect under 
        section 1927 with respect to such drugs or unless 
        section 1927(a)(3) applies,
          (B) with respect to any amount expended for an 
        innovator multiple source drug (as defined in section 
        1927(k)) dispensed on or after July 1, 1991, if, under 
        applicable State law, a less expensive multiple source 
        drug could have been dispensed, but only to the extent 
        that such amount exceeds the upper payment limit for 
        such multiple source drug;
                  (C) with respect to covered outpatient drugs 
                described in section 1927(a)(7), unless 
                information respecting utilization data and 
                coding on such drugs that is required to be 
                submitted under such section is submitted in 
                accordance with such section, and
          (D) with respect to any amount expended for 
        reimbursement to a pharmacy under this title for the 
        ingredient cost of a covered outpatient drug for which 
        the pharmacy has already received payment under this 
        title (other than with respect to a reasonable 
        restocking fee for such drug); or
          (11) with respect to any amount expended for 
        physicians' services furnished on or after the first 
        day of the first quarter beginning more than 60 days 
        after the date of establishment of the physician 
        identifier system under section 1902(x), unless the 
        claim for the services includes the unique physician 
        identifier provided under such system; or
          (13) with respect to any amount expended to reimburse 
        (or otherwise compensate) a nursing facility for 
        payment of legal expenses associated with any action 
        initiated by the facility that is dismissed on the 
        basis that no reasonable legal ground existed for the 
        institution of such action; or
          (14) with respect to any amount expended on 
        administrative costs to carry out the program under 
        section 1928; or
          (15) with respect to any amount expended for a 
        single-antigen vaccine and its administration in any 
        case in which the administration of a combined-antigen 
        vaccine was medically appropriate (as determined by the 
        Secretary); or
          (16) with respect to any amount expended for which 
        funds may not be used under the Assisted Suicide 
        Funding Restriction Act of 1997; or
          (17) with respect to any amount expended for roads, 
        bridges, stadiums, or any other item or service not 
        covered under a State plan under this title; or
          (18) with respect to any amount expended for home 
        health care services provided by an agency or 
        organization unless the agency or organization provides 
        the State agency on a continuing basis a surety bond in 
        a form specified by the Secretary under paragraph (7) 
        of section 1861(o) and in an amount that is not less 
        than $50,000 or such comparable surety bond as the 
        Secretary may permit under the last sentence of such 
        section; or
          (19) with respect to any amount expended on 
        administrative costs to initiate or pursue litigation 
        described in subsection (d)(3)(B);
          (20) with respect to amounts expended for medical 
        assistance provided to an individual described in 
        subclause (XV) or (XVI) of section 1902(a)(10)(A)(ii) 
        for a fiscal year unless the State demonstrates to the 
        satisfaction of the Secretary that the level of State 
        funds expended for such fiscal year for programs to 
        enable working individuals with disabilities to work 
        (other than for such medical assistance) is not less 
        than the level expended for such programs during the 
        most recent State fiscal year ending before the date of 
        the enactment of this paragraph;
          (21) with respect to amounts expended for covered 
        outpatient drugs described in section 1927(d)(2)(C) 
        (relating to drugs when used for cosmetic purposes or 
        hair growth), except where medically necessary, and 
        section 1927(d)(2)(K) (relating to drugs when used for 
        treatment of sexual or erectile dysfunction);
          (22) with respect to amounts expended for medical 
        assistance for an individual who declares under section 
        1137(d)(1)(A) to be a citizen or national of the United 
        States for purposes of establishing eligibility for 
        benefits under this title, unless the requirement of 
        section 1902(a)(46)(B) is met;
          (23) with respect to amounts expended for medical 
        assistance for covered outpatient drugs (as defined in 
        section 1927(k)(2)) for which the prescription was 
        executed in written (and non-electronic) form unless 
        the prescription was executed on a tamper-resistant 
        pad;
          (24) if a State is required to implement an asset 
        verification program under section 1940 and fails to 
        implement such program in accordance with such section, 
        with respect to amounts expended by such State for 
        medical assistance for individuals subject to asset 
        verification under such section, unless--
                  (A) the State demonstrates to the Secretary's 
                satisfaction that the State made a good faith 
                effort to comply;
                  (B) not later than 60 days after the date of 
                a finding that the State is in noncompliance, 
                the State submits to the Secretary (and the 
                Secretary approves) a corrective action plan to 
                remedy such noncompliance; and
                  (C) not later than 12 months after the date 
                of such submission (and approval), the State 
                fulfills the terms of such corrective action 
                plan;
          (25) with respect to any amounts expended for medical 
        assistance for individuals for whom the State does not 
        report enrollee encounter data (as defined by the 
        Secretary) to the Medicaid Statistical Information 
        System (MSIS) in a timely manner (as determined by the 
        Secretary);
          (26) with respect to any amounts expended for medical 
        assistance for individuals described in subclause 
        (VIII) of subsection (a)(10)(A)(i) other than medical 
        assistance provided through benchmark coverage 
        described in section 1937(b)(1) or benchmark equivalent 
        coverage described in section 1937(b)(2); or
          (27) with respect to any amounts expended by the 
        State on the basis of a fee schedule for items 
        described in section 1861(n) and furnished on or after 
        January 1, 2018, as determined in the aggregate with 
        respect to each class of such items as defined by the 
        Secretary, in excess of the aggregate amount, if any, 
        that would be paid for such items within such class on 
        a fee-for-service basis under the program under part B 
        of title XVIII, including, as applicable, under a 
        competitive acquisition program under section 1847 in 
        an area of the State.
Nothing in paragraph (1) shall be construed as permitting a 
State to provide services under its plan under this title that 
are not reasonable in amount, duration, and scope to achieve 
their purpose. Paragraphs (1), (2), (16), (17), and (18) shall 
apply with respect to items or services furnished and amounts 
expended by or through a managed care entity (as defined in 
section 1932(a)(1)(B)) in the same manner as such paragraphs 
apply to items or services furnished and amounts expended 
directly by the State.
  (j) Notwithstanding the preceding provisions of this section, 
the amount determined under subsection (a)(1) for any State for 
any quarter shall be adjusted in accordance with section 1914.
  (k) The Secretary is authorized to provide at the request of 
any State (and without cost to such State) such technical and 
actuarial assistance as may be necessary to assist such State 
to contract with any medicaid managed care organization which 
meets the requirements of subsection (m) of this section for 
the purpose of providing medical care and services to 
individuals who are entitled to medical assistance under this 
title.
  (l)(1) Subject to paragraphs (3) and (4), with respect to any 
amount expended for personal care services or home health care 
services requiring an in-home visit by a provider that are 
provided under a State plan under this title (or under a waiver 
of the plan) and furnished in a calendar quarter beginning on 
or after January 1, 2019 (or, in the case of home health care 
services, on or after January 1, 2023), unless a State requires 
the use of an electronic visit verification system for such 
services furnished in such quarter under the plan or such 
waiver, the Federal medical assistance percentage shall be 
reduced--
          (A) in the case of personal care services--
                  (i) for calendar quarters in 2019 and 2020, 
                by .25 percentage points;
                  (ii) for calendar quarters in 2021, by .5 
                percentage points;
                  (iii) for calendar quarters in 2022, by .75 
                percentage points; and
                  (iv) for calendar quarters in 2023 and each 
                year thereafter, by 1 percentage point; and
          (B) in the case of home health care services--
                  (i) for calendar quarters in 2023 and 2024, 
                by .25 percentage points;
                  (ii) for calendar quarters in 2025, by .5 
                percentage points;
                  (iii) for calendar quarters in 2026, by .75 
                percentage points; and
                  (iv) for calendar quarters in 2027 and each 
                year thereafter, by 1 percentage point.
  (2) Subject to paragraphs (3) and (4), in implementing the 
requirement for the use of an electronic visit verification 
system under paragraph (1), a State shall--
          (A) consult with agencies and entities that provide 
        personal care services, home health care services, or 
        both under the State plan (or under a waiver of the 
        plan) to ensure that such system--
                  (i) is minimally burdensome;
                  (ii) takes into account existing best 
                practices and electronic visit verification 
                systems in use in the State; and
                  (iii) is conducted in accordance with the 
                requirements of HIPAA privacy and security law 
                (as defined in section 3009 of the Public 
                Health Service Act);
          (B) take into account a stakeholder process that 
        includes input from beneficiaries, family caregivers, 
        individuals who furnish personal care services or home 
        health care services, and other stakeholders, as 
        determined by the State in accordance with guidance 
        from the Secretary; and
          (C) ensure that individuals who furnish personal care 
        services, home health care services, or both under the 
        State plan (or under a waiver of the plan) are provided 
        the opportunity for training on the use of such system.
  (3) Paragraphs (1) and (2) shall not apply in the case of a 
State that, as of the date of the enactment of this subsection, 
requires the use of any system for the electronic verification 
of visits conducted as part of both personal care services and 
home health care services, so long as the State continues to 
require the use of such system with respect to the electronic 
verification of such visits.
  (4)(A) In the case of a State described in subparagraph (B), 
the reduction under paragraph (1) shall not apply--
          (i) in the case of personal care services, for 
        calendar quarters in 2019; and
          (ii) in the case of home health care services, for 
        calendar quarters in 2023.
  (B) For purposes of subparagraph (A), a State described in 
this subparagraph is a State that demonstrates to the Secretary 
that the State--
          (i) has made a good faith effort to comply with the 
        requirements of paragraphs (1) and (2) (including by 
        taking steps to adopt the technology used for an 
        electronic visit verification system); and
          (ii) in implementing such a system, has encountered 
        unavoidable system delays.
  (5) In this subsection:
          (A) The term ``electronic visit verification system'' 
        means, with respect to personal care services or home 
        health care services, a system under which visits 
        conducted as part of such services are electronically 
        verified with respect to--
                  (i) the type of service performed;
                  (ii) the individual receiving the service;
                  (iii) the date of the service;
                  (iv) the location of service delivery;
                  (v) the individual providing the service; and
                  (vi) the time the service begins and ends.
          (B) The term ``home health care services'' means 
        services described in section 1905(a)(7) provided under 
        a State plan under this title (or under a waiver of the 
        plan).
          (C) The term ``personal care services'' means 
        personal care services provided under a State plan 
        under this title (or under a waiver of the plan), 
        including services provided under section 1905(a)(24), 
        1915(c), 1915(i), 1915(j), or 1915(k) or under a wavier 
        under section 1115.
  (6)(A) In the case in which a State requires personal care 
service and home health care service providers to utilize an 
electronic visit verification system operated by the State or a 
contractor on behalf of the State, the Secretary shall pay to 
the State, for each quarter, an amount equal to 90 per centum 
of so much of the sums expended during such quarter as are 
attributable to the design, development, or installation of 
such system, and 75 per centum of so much of the sums for the 
operation and maintenance of such system.
  (B) Subparagraph (A) shall not apply in the case in which a 
State requires personal care service and home health care 
service providers to utilize an electronic visit verification 
system that is not operated by the State or a contractor on 
behalf of the State.
  (m)(1)(A) The term ``medicaid managed care organization'' 
means a health maintenance organization, an eligible 
organization with a contract under section 1876 or a 
Medicare+Choice organization with a contract under part C of 
title XVIII, a provider sponsored organization, or any other 
public or private organization, which meets the requirement of 
section 1902(w) and--
          (i) makes services it provides to individuals 
        eligible for benefits under this title accessible to 
        such individuals, within the area served by the 
        organization, to the same extent as such services are 
        made accessible to individuals (eligible for medical 
        assistance under the State plan) not enrolled with the 
        organization, and
          (ii) has made adequate provision against the risk of 
        insolvency, which provision is satisfactory to the 
        State, meets the requirements of subparagraph (C)(i) 
        (if applicable), and which assures that individuals 
        eligible for benefits under this title are in no case 
        held liable for debts of the organization in case of 
        the organization's insolvency.
An organization that is a qualified health maintenance 
organization (as defined in section 1310(d) of the Public 
Health Service Act) is deemed to meet the requirements of 
clauses (i) and (ii).
  (B) The duties and functions of the Secretary, insofar as 
they involve making determinations as to whether an 
organization is a medicaid managed care organization within the 
meaning of subparagraph (A), shall be integrated with the 
administration of section 1312 (a) and (b) of the Public Health 
Service Act.
  (C)(i) Subject to clause (ii), a provision meets the 
requirements of this subparagraph for an organization if the 
organization meets solvency standards established by the State 
for private health maintenance organizations or is licensed or 
certified by the State as a risk-bearing entity.
  (ii) Clause (i) shall not apply to an organization if--
          (I) the organization is not responsible for the 
        provision (directly or through arrangements with 
        providers of services) of inpatient hospital services 
        and physicians' services;
          (II) the organization is a public entity;
          (III) the solvency of the organization is guaranteed 
        by the State; or
          (IV) the organization is (or is controlled by) one or 
        more Federally-qualified health centers and meets 
        solvency standards established by the State for such an 
        organization.
For purposes of subclause (IV), the term ``control'' means the 
possession, whether direct or indirect, of the power to direct 
or cause the direction of the management and policies of the 
organization through membership, board representation, or an 
ownership interest equal to or greater than 50.1 percent.
  (2)(A) Except as provided in subparagraphs (B), (C), and (G), 
no payment shall be made under this title to a State with 
respect to expenditures incurred by it for payment (determined 
under a prepaid capitation basis or under any other risk basis) 
for services provided by any entity (including a health 
insuring organization) which is responsible for the provision 
(directly or through arrangements with providers of services) 
of inpatient hospital services and any other service described 
in paragraph (2), (3), (4), (5), or (7) of section 1905(a) or 
for the provision of any three or more of the services 
described in such paragraphs unless--
          (i) the Secretary has determined that the entity is a 
        medicaid managed care organization organization as 
        defined in paragraph (1);
          (iii) such services are provided for the benefit of 
        individuals eligible for benefits under this title in 
        accordance with a contract between the State and the 
        entity under which prepaid payments to the entity are 
        made on an actuarially sound basis and under which the 
        Secretary must provide prior approval for contracts 
        providing for expenditures in excess of $1,000,000 for 
        1998 and, for a subsequent year, the amount established 
        under this clause for the previous year increased by 
        the percentage increase in the consumer price index for 
        all urban consumers over the previous year;
          (iv) such contract provides that the Secretary and 
        the State (or any person or organization designated by 
        either) shall have the right to audit and inspect any 
        books and records of the entity (and of any 
        subcontractor) that pertain (I) to the ability of the 
        entity to bear the risk of potential financial losses, 
        or (II) to services performed or determinations of 
        amounts payable under the contract;
          (v) such contract provides that in the entity's 
        enrollment, reenrollment, or disenrollment of 
        individuals who are eligible for benefits under this 
        title and eligible to enroll, reenroll, or disenroll 
        with the entity pursuant to the contract, the entity 
        will not discriminate among such individuals on the 
        basis of their health status or requirements for health 
        care services;
          (vi) such contract (I) permits individuals who have 
        elected under the plan to enroll with the entity for 
        provision of such benefits to terminate such enrollment 
        in accordance with section 1932(a)(4), and (II) 
        provides for notification in accordance with such 
        section of each such individual, at the time of the 
        individual's enrollment, of such right to terminate 
        such enrollment;
          (vii) such contract provides that, in the case of 
        medically necessary services which were provided (I) to 
        an individual enrolled with the entity under the 
        contract and entitled to benefits with respect to such 
        services under the State's plan and (II) other than 
        through the organization because the services were 
        immediately required due to an unforeseen illness, 
        injury, or condition, either the entity or the State 
        provides for reimbursement with respect to those 
        services,
          (viii) such contract provides for disclosure of 
        information in accordance with section 1124 and 
        paragraph (4) of this subsection;
          (ix) such contract provides, in the case of an entity 
        that has entered into a contract for the provision of 
        services with a Federally-qualified health center or a 
        rural health clinic, that the entity shall provide 
        payment 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 provider which is not 
        a Federally-qualified health center or a rural health 
        clinic;
          (x) any physician incentive plan that it operates 
        meets the requirements described in section 1876(i)(8);
          (xi) such contract provides for maintenance of 
        sufficient patient encounter data to identify the 
        physician who delivers services to patients and for the 
        provision of such data to the State at a frequency and 
        level of detail to be specified by the Secretary;
          (xii) such contract, and the entity complies with the 
        applicable requirements of section 1932; and
                  (xiii) such contract provides that (I) 
                covered outpatient drugs dispensed to 
                individuals eligible for medical assistance who 
                are enrolled with the entity shall be subject 
                to the same rebate required by the agreement 
                entered into under section 1927 as the State is 
                subject to and that the State shall collect 
                such rebates from manufacturers, (II) 
                capitation rates paid to the entity shall be 
                based on actual cost experience related to 
                rebates and subject to the Federal regulations 
                requiring actuarially sound rates, and (III) 
                the entity shall report to the State, on such 
                timely and periodic basis as specified by the 
                Secretary in order to include in the 
                information submitted by the State to a 
                manufacturer and the Secretary under section 
                1927(b)(2)(A), information on the total number 
                of units of each dosage form and strength and 
                package size by National Drug Code of each 
                covered outpatient drug dispensed to 
                individuals eligible for medical assistance who 
                are enrolled with the entity and for which the 
                entity is responsible for coverage of such drug 
                under this subsection (other than covered 
                outpatient drugs that under subsection (j)(1) 
                of section 1927 are not subject to the 
                requirements of that section) and such other 
                data as the Secretary determines necessary to 
                carry out this subsection.
  (B) Subparagraph (A) except with respect to clause (ix) of 
subparagraph (A), does not apply with respect to payments under 
this title to a State with respect to expenditures incurred by 
it for payment for services provided by an entity which--
          (i)(I) received a grant of at least $100,000 in the 
        fiscal year ending June 30, 1976, under section 
        329(d)(1)(A) or 330(d)(1) of the Public Health Service 
        Act, and for the period beginning July 1, 1976, and 
        ending on the expiration of the period for which 
        payments are to be made under this title has been the 
        recipient of a grant under either such section; and
          (II) provides to its enrollees, on a prepaid 
        capitation risk basis or on any other risk basis, all 
        of the services and benefits described in paragraphs 
        (1), (2), (3), (4)(C), and (5) of section 1905(a) and, 
        to the extent required by section 1902(a)(10)(D) to be 
        provided under a State plan for medical assistance, the 
        services and benefits described in paragraph (7) of 
        section 1905(a); or
          (ii) is a nonprofit primary health care entity 
        located in a rural area (as defined by the Appalachian 
        Regional Commission)--
                  (I) which received in the fiscal year ending 
                June 30, 1976, at least $100,000 (by grant, 
                subgrant, or subcontract) under the Appalachian 
                Regional Development Act of 1965, and
                  (II) for the period beginning July 1, 1976, 
                and ending on the expiration of the period for 
                which payments are to be made under this title 
                either has been the recipient of a grant, 
                subgrant, or subcontract under such Act or has 
                provided services under a contract (initially 
                entered into during a year in which the entity 
                was the recipient of such a grant, subgrant, or 
                subcontract) with a State agency under this 
                title on a prepaid capitation risk basis or on 
                any other risk basis; or
          (iii) which has contracted with the single State 
        agency for the provision of services (but not including 
        inpatient hospital services) to persons eligible under 
        this title on a prepaid risk basis prior to 1970.
  (G) In the case of an entity which is receiving (and has 
received during the previous two years) a grant of at least 
$100,000 under section 329(d)(1)(A) or 330(d)(1) of the Public 
Health Service Act or is receiving (and has received during the 
previous two years) at least $100,000 (by grant, subgrant, or 
subcontract) under the Appalachian Regional Development Act of 
1965, clause (i) of subparagraph (A) shall not apply.
  (H) In the case of an individual who--
          (i) in a month is eligible for benefits under this 
        title and enrolled with a medicaid managed care 
        organization with a contract under this paragraph or 
        with a primary care case manager with a contract 
        described in section 1905(t)(3),
          (ii) in the next month (or in the next 2 months) is 
        not eligible for such benefits, but
          (iii) in the succeeding month is again eligible for 
        such benefits,
the State plan, subject to subparagraph (A)(vi), may enroll the 
individual for that succeeding month with the organization 
described in clause (i) if the organization continues to have a 
contract under this paragraph with the State or with the 
manager described in such clause if the manager continues to 
have a contract described in section 1905(t)(3) with the State.
  (3) No payment shall be made under this title to a State with 
respect to expenditures incurred by the State for payment for 
services provided by a managed care entity (as defined under 
section 1932(a)(1)) under the State plan under this title (or 
under a waiver of the plan) unless the State--
          (A) beginning on July 1, 2018, has a contract with 
        such entity that complies with the requirement 
        specified in section 1932(d)(5); and
          (B) beginning on January 1, 2018, complies with the 
        requirement specified in section 1932(d)(6)(A).
  (4)(A) Each medicaid managed care organization which is not a 
qualified health maintenance organization (as defined in 
section 1310(d) of the Public Health Service Act) must report 
to the State and, upon request, to the Secretary, the Inspector 
General of the Department of Health and Human Services, and the 
Comptroller General a description of transactions between the 
organization and a party in interest (as defined in section 
1318(b) of such Act), including the following transactions:
          (i) Any sale or exchange, or leasing of any property 
        between the organization and such a party.
          (ii) Any furnishing for consideration of goods, 
        services (including management services), or facilities 
        between the organization and such a party, but not 
        including salaries paid to employees for services 
        provided in the normal course of their employment.
          (iii) Any lending of money or other extension of 
        credit between the organization and such a party.
The State or Secretary may require that information reported 
respecting an organization which controls, or is controlled by, 
or is under common control with, another entity be in the form 
of a consolidated financial statement for the organization and 
such entity.
  (B) Each organization shall make the information reported 
pursuant to subparagraph (A) available to its enrollees upon 
reasonable request.
  (5)(A) If the Secretary determines that an entity with a 
contract under this subsection--
          (i) fails substantially to provide medically 
        necessary items and services that are required (under 
        law or under the contract) to be provided to an 
        individual covered under the contract, if the failure 
        has adversely affected (or has substantial likelihood 
        of adversely affecting) the individual;
          (ii) imposes premiums on individuals enrolled under 
        this subsection in excess of the premiums permitted 
        under this title;
          (iii) acts to discriminate among individuals in 
        violation of the provision of paragraph (2)(A)(v), 
        including expulsion or refusal to re-enroll an 
        individual or engaging in any practice that would 
        reasonably be expected to have the effect of denying or 
        discouraging enrollment (except as permitted by this 
        subsection) by eligible individuals with the 
        organization 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 
                subsection, or
                  (II) to an individual or to any other entity 
                under this subsection, or
          (v) fails to comply with the requirements of section 
        1876(i)(8),
the Secretary may provide, in addition to any other remedies 
available under law, for any of the remedies described in 
subparagraph (B).
  (B) The remedies described in this subparagraph are--
          (i) civil money penalties of not more than $25,000 
        for each determination under subparagraph (A), or, with 
        respect to a determination under clause (iii) or 
        (iv)(I) of such subparagraph, of not more than $100,000 
        for each such determination, plus, with respect to a 
        determination under subparagraph (A)(ii), double the 
        excess amount charged in violation of such subparagraph 
        (and the excess amount charged shall be deducted from 
        the penalty and returned to the individual concerned), 
        and plus, with respect to a determination under 
        subparagraph (A)(iii), $15,000 for each individual not 
        enrolled as a result of a practice described in such 
        subparagraph, or
          (ii) denial of payment to the State for medical 
        assistance furnished under the contract under this 
        subsection for individuals enrolled after the date the 
        Secretary notifies the organization of a determination 
        under subparagraph (A) and until the Secretary is 
        satisfied that the basis for such determination has 
        been corrected and is not likely to recur.
The provisions of section 1128A (other than subsections (a) and 
(b)) shall apply to a civil money penalty under clause (i) in 
the same manner as such provisions apply to a penalty or 
proceeding under section 1128A(a).
  (6)(A) For purposes of this subsection and section 
1902(e)(2)(A), in the case of the State of New Jersey, the term 
``contract'' shall be deemed to include an undertaking by the 
State agency, in the State plan under this title, to operate a 
program meeting all requirements of this subsection.
  (B) The undertaking described in subparagraph (A) must 
provide--
          (i) for the establishment of a separate entity 
        responsible for the operation of a program meeting the 
        requirements of this subsection, which entity may be a 
        subdivision of the State agency administering the State 
        plan under this title;
          (ii) for separate accounting for the funds used to 
        operate such program; and
          (iii) for setting the capitation rates and any other 
        payment rates for services provided in accordance with 
        this subsection using a methodology satisfactory to the 
        Secretary designed to ensure that total Federal 
        matching payments under this title for such services 
        will be lower than the matching payments that would be 
        made for the same services, if provided under the State 
        plan on a fee for service basis to an actuarially 
        equivalent population.
  (C) The undertaking described in subparagraph (A) shall be 
subject to approval (and annual re-approval) by the Secretary 
in the same manner as a contract under this subsection.
  (D) The undertaking described in subparagraph (A) shall not 
be eligible for a waiver under section 1915(b).
  (o) Notwithstanding the preceding provisions of this section, 
no payment shall be made to a State under the preceding 
provisions of this section for expenditures for medical 
assistance provided for an individual under its State plan 
approved under this title to the extent that a private insurer 
(as defined by the Secretary by regulation and including a 
group health plan (as defined in section 607(1) of the Employee 
Retirement Income Security Act of 1974), a service benefit 
plan, and a health maintenance organization) would have been 
obligated to provide such assistance but for a provision of its 
insurance contract which has the effect of limiting or 
excluding such obligation because the individual is eligible 
for or is provided medical assistance under the plan.
  (p)(1) When a political subdivision of a State makes, for the 
State of which it is a political subdivision, or one State 
makes, for another State, the enforcement and collection of 
rights of support or payment assigned under section 1912, 
pursuant to a cooperative arrangement under such section 
(either within or outside of such State), there shall be paid 
to such political subdivision or such other State from amounts 
which would otherwise represent the Federal share of payments 
for medical assistance provided to the eligible individuals on 
whose behalf such enforcement and collection was made, an 
amount equal to 15 percent of any amount collected which is 
attributable to such rights of support or payment.
  (2) Where more than one jurisdiction is involved in such 
enforcement or collection, the amount of the incentive payment 
determined under paragraph (1) shall be allocated among the 
jurisdictions in a manner to be prescribed by the Secretary.
  (q) For the purposes of this section, the term ``State 
medicaid fraud control unit'' means a single identifiable 
entity of the State government which the Secretary certifies 
(and annually recertifies) as meeting the following 
requirements:
          (1) The entity (A) is a unit of the office of the 
        State Attorney General or of another department of 
        State government which possesses statewide authority to 
        prosecute individuals for criminal violations, (B) is 
        in a State the constitution of which does not provide 
        for the criminal prosecution of individuals by a 
        statewide authority and has formal procedures, approved 
        by the Secretary, that (i) assure its referral of 
        suspected criminal violations relating to the program 
        under this title to the appropriate authority or 
        authorities in the State for prosecution and (ii) 
        assure its assistance of, and coordination with, such 
        authority or authorities in such prosecutions, or (C) 
        has a formal working relationship with the office of 
        the State Attorney General and has formal procedures 
        (including procedures for its referral of suspected 
        criminal violations to such office) which are approved 
        by the Secretary and which provide effective 
        coordination of activities between the entity and such 
        office with respect to the detection, investigation, 
        and prosecution of suspected criminal violations 
        relating to the program under this title.
          (2) The entity is separate and distinct from the 
        single State agency that administers or supervises the 
        administration of the State plan under this title.
          (3) The entity's function is conducting a statewide 
        program for the investigation and prosecution of 
        violations of all applicable State laws regarding any 
        and all aspects of fraud in connection with (A) any 
        aspect of the provision of medical assistance and the 
        activities of providers of such assistance under the 
        State plan under this title; and (B) upon the approval 
        of the Inspector General of the relevant Federal 
        agency, any aspect of the provision of health care 
        services and activities of providers of such services 
        under any Federal health care program (as defined in 
        section 1128B(f)(1)), if the suspected fraud or 
        violation of law in such case or investigation is 
        primarily related to the State plan under this title.
          (4)(A) The entity has--
                  (i) procedures for reviewing complaints of 
                abuse or neglect of patients in health care 
                facilities which receive payments under the 
                State plan under this title;
                  (ii) at the option of the entity, procedures 
                for reviewing complaints of abuse or neglect of 
                patients residing in board and care facilities; 
                and
                  (iii) procedures for acting upon such 
                complaints under the criminal laws of the State 
                or for referring such complaints to other State 
                agencies for action.
          (B) For purposes of this paragraph, the term ``board 
        and care facility'' means a residential setting which 
        receives payment (regardless of whether such payment is 
        made under the State plan under this title) from or on 
        behalf of two or more unrelated adults who reside in 
        such facility, and for whom one or both of the 
        following is provided:
                  (i) Nursing care services provided by, or 
                under the supervision of, a registered nurse, 
                licensed practical nurse, or licensed nursing 
                assistant.
                  (ii) A substantial amount of personal care 
                services that assist residents with the 
                activities of daily living, including personal 
                hygiene, dressing, bathing, eating, toileting, 
                ambulation, transfer, positioning, self-
                medication, body care, travel to medical 
                services, essential shopping, meal preparation, 
                laundry, and housework.
          (5) The entity provides for the collection, or 
        referral for collection to a single State agency, of 
        overpayments that are made under the State plan or 
        under any Federal health care program (as so defined) 
        to health care facilities and that are discovered by 
        the entity in carrying out its activities. All funds 
        collected in accordance with this paragraph shall be 
        credited exclusively to, and available for expenditure 
        under, the Federal health care program (including the 
        State plan under this title) that was subject to the 
        activity that was the basis for the collection.
          (6) The entity employs such auditors, attorneys, 
        investigators, and other necessary personnel and is 
        organized in such a manner as is necessary to promote 
        the effective and efficient conduct of the entity's 
        activities.
          (7) The entity submits to the Secretary an 
        application and annual reports containing such 
        information as the Secretary determines, by regulation, 
        to be necessary to determine whether the entity meets 
        the other requirements of this subsection.
  (r)(1) In order to receive payments under subsection (a) for 
use of automated data systems in administration of the State 
plan under this title, a State must, in addition to meeting the 
requirements of paragraph (3), have in operation mechanized 
claims processing and information retrieval systems that meet 
the requirements of this subsection and that the Secretary has 
found--
          (A) are adequate to provide efficient, economical, 
        and effective administration of such State plan;
          (B) are compatible with the claims processing and 
        information retrieval systems used in the 
        administration of title XVIII, and for this purpose--
                  (i) have a uniform identification coding 
                system for providers, other payees, and 
                beneficiaries under this title or title XVIII;
                  (ii) provide liaison between States and 
                carriers and intermediaries with agreements 
                under title XVIII to facilitate timely exchange 
                of appropriate data;
                  (iii) provide for exchange of data between 
                the States and the Secretary with respect to 
                persons sanctioned under this title or title 
                XVIII; and
                  (iv) effective for claims filed on or after 
                October 1, 2010, incorporate compatible 
                methodologies of the National Correct Coding 
                Initiative administered by the Secretary (or 
                any successor initiative to promote correct 
                coding and to control improper coding leading 
                to inappropriate payment) and such other 
                methodologies of that Initiative (or such other 
                national correct coding methodologies) as the 
                Secretary identifies in accordance with 
                paragraph (4);
          (C) are capable of providing accurate and timely 
        data;
          (D) are complying with the applicable provisions of 
        part C of title XI;
          (E) are designed to receive provider claims in 
        standard formats to the extent specified by the 
        Secretary; and
          (F) effective for claims filed on or after January 1, 
        1999, provide for electronic transmission of claims 
        data in the format specified by the Secretary and 
        consistent with the Medicaid Statistical Information 
        System (MSIS) (including detailed individual enrollee 
        encounter data and other information that the Secretary 
        may find necessary and including, for data submitted to 
        the Secretary on or after January 1, 2010, data 
        elements from the automated data system that the 
        Secretary determines to be necessary for program 
        integrity, program oversight, and administration, at 
        such frequency as the Secretary shall determine).
  (2) In order to meet the requirements of this paragraph, 
mechanized claims processing and information retrieval systems 
must meet the following requirements:
          (A) The systems must be capable of developing 
        provider, physician, and patient profiles which are 
        sufficient to provide specific information as to the 
        use of covered types of services and items, including 
        prescribed drugs.
          (B) The State must provide that information on 
        probable fraud or abuse which is obtained from, or 
        developed by, the systems, is made available to the 
        State's medicaid fraud control unit (if any) certified 
        under subsection (q) of this section.
          (C) The systems must meet all performance standards 
        and other requirements for initial approval developed 
        by the Secretary.
  (3) In order to meet the requirements of this paragraph, a 
State must have in operation an eligibility determination 
system which provides for data matching through the Public 
Assistance Reporting Information System (PARIS) facilitated by 
the Secretary (or any successor system), including matching 
with medical assistance programs operated by other States.
  (4) For purposes of paragraph (1)(B)(iv), the Secretary shall 
do the following:
          (A) Not later than September 1, 2010:
                  (i) Identify those methodologies of the 
                National Correct Coding Initiative administered 
                by the Secretary (or any successor initiative 
                to promote correct coding and to control 
                improper coding leading to inappropriate 
                payment) which are compatible to claims filed 
                under this title.
                  (ii) Identify those methodologies of such 
                Initiative (or such other national correct 
                coding methodologies) that should be 
                incorporated into claims filed under this title 
                with respect to items or services for which 
                States provide medical assistance under this 
                title and no national correct coding 
                methodologies have been established under such 
                Initiative with respect to title XVIII.
                  (iii) Notify States of--
                          (I) the methodologies identified 
                        under subparagraphs (A) and (B) (and of 
                        any other national correct coding 
                        methodologies identified under 
                        subparagraph (B)); and
                          (II) how States are to incorporate 
                        such methodologies into claims filed 
                        under this title.
          (B) Not later than March 1, 2011, submit a report to 
        Congress that includes the notice to States under 
        clause (iii) of subparagraph (A) and an analysis 
        supporting the identification of the methodologies made 
        under clauses (i) and (ii) of subparagraph (A).
  (s) Notwithstanding the preceding provisions of this section, 
no payment shall be made to a State under this section for 
expenditures for medical assistance under the State plan 
consisting of a designated health service (as defined in 
subsection (h)(6) of section 1877) furnished to an individual 
on the basis of a referral that would result in the denial of 
payment for the service under title XVIII if such title 
provided for coverage of such service to the same extent and 
under the same terms and conditions as under the State plan, 
and subsections (f) and (g)(5) of such section shall apply to a 
provider of such a designated health service for which payment 
may be made under this title in the same manner as such 
subsections apply to a provider of such a service for which 
payment may be made under such title.
  (t)(1) For purposes of subsection (a)(3)(F), the payments 
described in this paragraph to encourage the adoption and use 
of certified EHR technology are payments made by the State in 
accordance with this subsection --
          (A) to Medicaid providers described in paragraph 
        (2)(A) not in excess of 85 percent of net average 
        allowable costs (as defined in paragraph (3)(E)) for 
        certified EHR technology (and support services 
        including maintenance and training that is for, or is 
        necessary for the adoption and operation of, such 
        technology) with respect to such providers; and
          (B) to Medicaid providers described in paragraph 
        (2)(B) not in excess of the maximum amount permitted 
        under paragraph (5) for the provider involved.
  (2) In this subsection and subsection (a)(3)(F), the term 
``Medicaid provider'' means--
          (A) an eligible professional (as defined in paragraph 
        (3)(B))--
                  (i) who is not hospital-based and has at 
                least 30 percent of the professional's patient 
                volume (as estimated in accordance with a 
                methodology established by the Secretary) 
                attributable to individuals who are receiving 
                medical assistance under this title;
                  (ii) who is not described in clause (i), who 
                is a pediatrician, who is not hospital-based, 
                and who has at least 20 percent of the 
                professional's patient volume (as estimated in 
                accordance with a methodology established by 
                the Secretary) attributable to individuals who 
                are receiving medical assistance under this 
                title; and
                  (iii) who practices predominantly in a 
                Federally qualified health center or rural 
                health clinic and has at least 30 percent of 
                the professional's patient volume (as estimated 
                in accordance with a methodology established by 
                the Secretary) attributable to needy 
                individuals (as defined in paragraph (3)(F)); 
                and
          (B)(i) a children's hospital, or
          (ii) an acute-care hospital that is not described in 
        clause (i) and that has at least 10 percent of the 
        hospital's patient volume (as estimated in accordance 
        with a methodology established by the Secretary) 
        attributable to individuals who are receiving medical 
        assistance under this title.
An eligible professional shall not qualify as a Medicaid 
provider under this subsection unless any right to payment 
under sections 1848(o) and 1853(l) with respect to the eligible 
professional has been waived in a manner specified by the 
Secretary. For purposes of calculating patient volume under 
subparagraph (A)(iii), insofar as it is related to 
uncompensated care, the Secretary may require the adjustment of 
such uncompensated care data so that it would be an appropriate 
proxy for charity care, including a downward adjustment to 
eliminate bad debt data from uncompensated care. In applying 
subparagraphs (A) and (B)(ii), the methodology established by 
the Secretary for patient volume shall include individuals 
enrolled in a Medicaid managed care plan (under section 1903(m) 
or section 1932).
  (3) In this subsection and subsection (a)(3)(F):
          (A) The term ``certified EHR technology'' means a 
        qualified electronic health record (as defined in 
        3000(13) of the Public Health Service Act) that is 
        certified pursuant to section 3001(c)(5) of such Act as 
        meeting standards adopted under section 3004 of such 
        Act that are applicable to the type of record involved 
        (as determined by the Secretary, such as an ambulatory 
        electronic health record for office-based physicians or 
        an inpatient hospital electronic health record for 
        hospitals).
          (B) The term ``eligible professional'' means a--
                  (i) physician;
                  (ii) dentist;
                  (iii) certified nurse mid-wife;
                  (iv) nurse practitioner; and
                  (v) physician assistant insofar as the 
                assistant is practicing in a rural health 
                clinic that is led by a physician assistant or 
                is practicing in a Federally qualified health 
                center that is so led.
          (C) The term ``average allowable costs'' means, with 
        respect to certified EHR technology of Medicaid 
        providers described in paragraph (2)(A) for--
                  (i) the first year of payment with respect to 
                such a provider, the average costs for the 
                purchase and initial implementation or upgrade 
                of such technology (and support services 
                including training that is for, or is necessary 
                for the adoption and initial operation of, such 
                technology) for such providers, as determined 
                by the Secretary based upon studies conducted 
                under paragraph (4)(C); and
                  (ii) a subsequent year of payment with 
                respect to such a provider, the average costs 
                not described in clause (i) relating to the 
                operation, maintenance, and use of such 
                technology for such providers, as determined by 
                the Secretary based upon studies conducted 
                under paragraph (4)(C).
          (D) The term ``hospital-based'' means, with respect 
        to an eligible professional, a professional (such as a 
        pathologist, anesthesiologist, or emergency physician) 
        who furnishes substantially all of the individual's 
        professional services in a hospital inpatient or 
        emergency room setting and through the use of the 
        facilities and equipment, including qualified 
        electronic health records, of the hospital. The 
        determination of whether an eligible professional is a 
        hospital-based eligible professional shall be made on 
        the basis of the site of service (as defined by the 
        Secretary) and without regard to any employment or 
        billing arrangement between the eligible professional 
        and any other provider.
          (E) The term ``net average allowable costs'' means, 
        with respect to a Medicaid provider described in 
        paragraph (2)(A), average allowable costs reduced by 
        the average payment the Secretary estimates will be 
        made to such Medicaid providers (determined on a 
        percentage or other basis for such classes or types of 
        providers as the Secretary may specify) from other 
        sources (other than under this subsection, or by the 
        Federal government or a State or local government) that 
        is directly attributable to payment for certified EHR 
        technology or support services described in 
        subparagraph (C).
          (F) The term ``needy individual'' means, with respect 
        to a Medicaid provider, an individual--
                  (i) who is receiving assistance under this 
                title;
                  (ii) who is receiving assistance under title 
                XXI;
                  (iii) who is furnished uncompensated care by 
                the provider; or
                  (iv) for whom charges are reduced by the 
                provider on a sliding scale basis based on an 
                individual's ability to pay.
  (4)(A) With respect to a Medicaid provider described in 
paragraph (2)(A), subject to subparagraph (B), in no case 
shall--
                  (i) the net average allowable costs under 
                this subsection for the first year of payment 
                (which may not be later than 2016), which is 
                intended to cover the costs described in 
                paragraph (3)(C)(i), exceed $25,000 (or such 
                lesser amount as the Secretary determines based 
                on studies conducted under subparagraph (C));
                  (ii) the net average allowable costs under 
                this subsection for a subsequent year of 
                payment, which is intended to cover costs 
                described in paragraph (3)(C)(ii), exceed 
                $10,000; and
                  (iii) payments be made for costs described in 
                clause (ii) after 2021 or over a period of 
                longer than 5 years.
  (B) In the case of Medicaid provider described in paragraph 
(2)(A)(ii), the dollar amounts specified in subparagraph (A) 
shall be \2/3\ of the dollar amounts otherwise specified.
  (C) For the purposes of determining average allowable costs 
under this subsection, the Secretary shall study the average 
costs to Medicaid providers described in paragraph (2)(A) of 
purchase and initial implementation and upgrade of certified 
EHR technology described in paragraph (3)(C)(i) and the average 
costs to such providers of operations, maintenance, and use of 
such technology described in paragraph (3)(C)(ii). In 
determining such costs for such providers, the Secretary may 
utilize studies of such amounts submitted by States.
  (5)(A) In no case shall the payments described in paragraph 
(1)(B) with respect to a Medicaid provider described in 
paragraph (2)(B) exceed--
          (i) in the aggregate the product of--
                          (I) the overall hospital EHR amount 
                        for the provider computed under 
                        subparagraph (B); and
                          (II) the Medicaid share for such 
                        provider computed under subparagraph 
                        (C);
          (ii) in any year 50 percent of the product described 
        in clause (i); and
          (iii) in any 2-year period 90 percent of such 
        product.
  (B) For purposes of this paragraph, the overall hospital EHR 
amount, with respect to a Medicaid provider, is the sum of the 
applicable amounts specified in section 1886(n)(2)(A) for such 
provider for the first 4 payment years (as estimated by the 
Secretary) determined as if the Medicare share specified in 
clause (ii) of such section were 1. The Secretary shall 
establish, in consultation with the State, the overall hospital 
EHR amount for each such Medicaid provider eligible for 
payments under paragraph (1)(B). For purposes of this 
subparagraph in computing the amounts under section 
1886(n)(2)(C) for payment years after the first payment year, 
the Secretary shall assume that in subsequent payment years 
discharges increase at the average annual rate of growth of the 
most recent 3 years for which discharge data are available per 
year.
  (C) The Medicaid share computed under this subparagraph, for 
a Medicaid provider for a period specified by the Secretary, 
shall be calculated in the same manner as the Medicare share 
under section 1886(n)(2)(D) for such a hospital and period, 
except that there shall be substituted for the numerator under 
clause (i) of such section the amount that is equal to the 
number of inpatient-bed-days (as established by the Secretary) 
which are attributable to individuals who are receiving medical 
assistance under this title and who are not described in 
section 1886(n)(2)(D)(i). In computing inpatient-bed-days under 
the previous sentence, the Secretary shall take into account 
inpatient-bed-days attributable to inpatient-bed-days that are 
paid for individuals enrolled in a Medicaid managed care plan 
(under section 1903(m) or section 1932).
  (D) In no case may the payments described in paragraph (1)(B) 
with respect to a Medicaid provider described in paragraph 
(2)(B) be paid--
          (i) for any year beginning after 2016 unless the 
        provider has been provided payment under paragraph 
        (1)(B) for the previous year; and
          (ii) over a period of more than 6 years of payment.
  (6) Payments described in paragraph (1) are not in accordance 
with this subsection unless the following requirements are met:
          (A)(i) The State provides assurances satisfactory to 
        the Secretary that amounts received under subsection 
        (a)(3)(F) with respect to payments to a Medicaid 
        provider are paid, subject to clause (ii), directly to 
        such provider (or to an employer or facility to which 
        such provider has assigned payments) without any 
        deduction or rebate.
          (ii) Amounts described in clause (i) may also be paid 
        to an entity promoting the adoption of certified EHR 
        technology, as designated by the State, if 
        participation in such a payment arrangement is 
        voluntary for the eligible professional involved and if 
        such entity does not retain more than 5 percent of such 
        payments for costs not related to certified EHR 
        technology (and support services including maintenance 
        and training) that is for, or is necessary for the 
        operation of, such technology.
          (B) A Medicaid provider described in paragraph (2)(A) 
        is responsible for payment of the remaining 15 percent 
        of the net average allowable cost and shall be 
        determined to have met such responsibility to the 
        extent that the payment to the Medicaid provider is not 
        in excess of 85 percent of the net average allowable 
        cost.
          (C)(i) Subject to clause (ii), with respect to 
        payments to a Medicaid provider--
                  (I) for the first year of payment to the 
                Medicaid provider under this subsection, the 
                Medicaid provider demonstrates that it is 
                engaged in efforts to adopt, implement, or 
                upgrade certified EHR technology; and
                  (II) for a year of payment, other than the 
                first year of payment to the Medicaid provider 
                under this subsection, the Medicaid provider 
                demonstrates meaningful use of certified EHR 
                technology through a means that is approved by 
                the State and acceptable to the Secretary, and 
                that may be based upon the methodologies 
                applied under section 1848(o) or 1886(n).
          (ii) In the case of a Medicaid provider who has 
        completed adopting, implementing, or upgrading such 
        technology prior to the first year of payment to the 
        Medicaid provider under this subsection, clause (i)(I) 
        shall not apply and clause (i)(II) shall apply to each 
        year of payment to the Medicaid provider under this 
        subsection, including the first year of payment.
          (D) To the extent specified by the Secretary, the 
        certified EHR technology is compatible with State or 
        Federal administrative management systems.
For purposes of subparagraph (B), a Medicaid provider described 
in paragraph (2)(A) may accept payments for the costs described 
in such subparagraph from a State or local government. For 
purposes of subparagraph (C), in establishing the means 
described in such subparagraph, which may include clinical 
quality reporting to the State, the State shall ensure that 
populations with unique needs, such as children, are 
appropriately addressed.
  (7) With respect to Medicaid providers described in paragraph 
(2)(A), the Secretary shall ensure coordination of payment with 
respect to such providers under sections 1848(o) and 1853(l) 
and under this subsection to assure no duplication of funding. 
Such coordination shall include, to the extent practicable, a 
data matching process between State Medicaid agencies and the 
Centers for Medicare & Medicaid Services using national 
provider identifiers. For such purposes, the Secretary may 
require the submission of such data relating to payments to 
such Medicaid providers as the Secretary may specify.
  (8) In carrying out paragraph (6)(C), the State and Secretary 
shall seek, to the maximum extent practicable, to avoid 
duplicative requirements from Federal and State governments to 
demonstrate meaningful use of certified EHR technology under 
this title and title XVIII. In doing so, the Secretary may deem 
satisfaction of requirements for such meaningful use for a 
payment year under title XVIII to be sufficient to qualify as 
meaningful use under this subsection. The Secretary may also 
specify the reporting periods under this subsection in order to 
carry out this paragraph.
  (9) In order to be provided Federal financial participation 
under subsection (a)(3)(F)(ii), a State must demonstrate to the 
satisfaction of the Secretary, that the State--
          (A) is using the funds provided for the purposes of 
        administering payments under this subsection, including 
        tracking of meaningful use by Medicaid providers;
          (B) is conducting adequate oversight of the program 
        under this subsection, including routine tracking of 
        meaningful use attestations and reporting mechanisms; 
        and
          (C) is pursuing initiatives to encourage the adoption 
        of certified EHR technology to promote health care 
        quality and the exchange of health care information 
        under this title, subject to applicable laws and 
        regulations governing such exchange.
  (10) The Secretary shall periodically submit reports to the 
Committee on Energy and Commerce of the House of 
Representatives and the Committee on Finance of the Senate on 
status, progress, and oversight of payments described in 
paragraph (1), including steps taken to carry out paragraph 
(7). Such reports shall also describe the extent of adoption of 
certified EHR technology among Medicaid providers resulting 
from the provisions of this subsection and any improvements in 
health outcomes, clinical quality, or efficiency resulting from 
such adoption.
  (u)(1)(A) Notwithstanding subsection (a)(1), if the ratio of 
a State's erroneous excess payments for medical assistance (as 
defined in subparagraph (D)) to its total expenditures for 
medical assistance under the State plan approved under this 
title exceeds 0.03, for the period consisting of the third and 
fourth quarters of fiscal year 1983, or for any full fiscal 
year thereafter, then the Secretary shall make no payment for 
such period or fiscal year with respect to so much of such 
erroneous excess payments as exceeds such allowable error rate 
of 0.03.
  (B) The Secretary may waive, in certain limited cases, all or 
part of the reduction required under subparagraph (A) with 
respect to any State if such State is unable to reach the 
allowable error rate for a period or fiscal year despite a good 
faith effort by such State.
  (C) In estimating the amount to be paid to a State under 
subsection (d), the Secretary shall take into consideration the 
limitation on Federal financial participation imposed by 
subparagraph (A) and shall reduce the estimate he makes under 
subsection (d)(1), for purposes of payment to the State under 
subsection (d)(3), in light of any expected erroneous excess 
payments for medical assistance (estimated in accordance with 
such criteria, including sampling procedures, as he may 
prescribe and subject to subsequent adjustment, if necessary, 
under subsection (d)(2)).
  (D)(i) For purposes of this subsection, the term ``erroneous 
excess payments for medical assistance'' means the total of--
          (I) payments under the State plan with respect to 
        ineligible individuals and families, and
          (II) overpayments on behalf of eligible individuals 
        and families by reason of error in determining the 
        amount of expenditures for medical care required of an 
        individual or family as a condition of eligibility.
  (ii) In determining the amount of erroneous excess payments 
for medical assistance to an ineligible individual or family 
under clause (i)(I), if such ineligibility is the result of an 
error in determining the amount of the resources of such 
individual or family, the amount of the erroneous excess 
payment shall be the smaller of (I) the amount of the payment 
with respect to such individual or family, or (II) the 
difference between the actual amount of such resources and the 
allowable resource level established under the State plan.
  (iii) In determining the amount of erroneous excess payments 
for medical assistance to an individual or family under clause 
(i)(II), the amount of the erroneous excess payment shall be 
the smaller of (I) the amount of the payment on behalf of the 
individual or family, or (II) the difference between the actual 
amount incurred for medical care by the individual or family 
and the amount which should have been incurred in order to 
establish eligibility for medical assistance.
  (iv) In determining the amount of erroneous excess payments, 
there shall not be included any error resulting from a failure 
of an individual to cooperate or give correct information with 
respect to third-party liability as required under section 
1912(a)(1)(C) or 402(a)(26)(C) or with respect to payments made 
in violation of section 1906.
  (v) In determining the amount of erroneous excess payments, 
there shall not be included any erroneous payments made for 
ambulatory prenatal care provided during a presumptive 
eligibility period (as defined in section 1920(b)(1)), for 
items and services described in subsection (a) of section 1920A 
provided to a child during a presumptive eligibility period 
under such section, for medical assistance provided to an 
individual described in subsection (a) of section 1920B during 
a presumptive eligibility period under such section, or for 
medical assistance provided to an individual during a 
presumptive eligibility period resulting from a determination 
of presumptive eligibility made by a hospital that elects under 
section 1902(a)(47)(B) to be a qualified entity for such 
purpose.
  (E) For purposes of subparagraph (D), there shall be 
excluded, in determining both erroneous excess payments for 
medical assistance and total expenditures for medical 
assistance--
          (i) payments with respect to any individual whose 
        eligibility therefor was determined exclusively by the 
        Secretary under an agreement pursuant to section 1634 
        and such other classes of individuals as the Secretary 
        may by regulation prescribe whose eligibility was 
        determined in part under such an agreement; and
          (ii) payments made as the result of a technical 
        error.
  (2) The State agency administering the plan approved under 
this title shall, at such times and in such form as the 
Secretary may specify, provide information on the rates of 
erroneous excess payments made (or expected, with respect to 
future periods specified by the Secretary) in connection with 
its administration of such plan, together with any other data 
he requests that are reasonably necessary for him to carry out 
the provisions of this subsection.
  (3)(A) If a State fails to cooperate with the Secretary in 
providing information necessary to carry out this subsection, 
the Secretary, directly or through contractual or such other 
arrangements as he may find appropriate, shall establish the 
error rates for that State on the basis of the best data 
reasonably available to him and in accordance with such 
techniques for sampling and estimating as he finds appropriate.
  (B) In any case in which it is necessary for the Secretary to 
exercise his authority under subparagraph (A) to determine a 
State's error rates for a fiscal year, the amount that would 
otherwise be payable to such State under this title for 
quarters in such year shall be reduced by the costs incurred by 
the Secretary in making (directly or otherwise) such 
determination.
  (4) This subsection shall not apply with respect to Puerto 
Rico, Guam, the Virgin Islands, the Northern Mariana Islands, 
or American Samoa.
  (v)(1) Notwithstanding the preceding provisions of this 
section, except as provided in paragraphs (2) and (4), no 
payment may be made to a State under this section for medical 
assistance furnished to an alien who is not lawfully admitted 
for permanent residence or otherwise permanently residing in 
the United States under color of law.
  (2) Payment shall be made under this section for care and 
services that are furnished to an alien described in paragraph 
(1) only if--
          (A) such care and services are necessary for the 
        treatment of an emergency medical condition of the 
        alien,
          (B) such alien otherwise meets the eligibility 
        requirements for medical assistance under the State 
        plan approved under this title (other than the 
        requirement of the receipt of aid or assistance under 
        title IV, supplemental security income benefits under 
        title XVI, or a State supplementary payment), and
          (C) such care and services are not related to an 
        organ transplant procedure.
  (3) For purposes of this subsection, the term ``emergency 
medical condition'' means a medical condition (including 
emergency labor and delivery) manifesting itself by acute 
symptoms of sufficient severity (including severe pain) such 
that the absence of immediate medical attention could 
reasonably be expected to result in--
          (A) placing the patient's health in serious jeopardy,
          (B) serious impairment to bodily functions, or
          (C) serious dysfunction of any bodily organ or part.
  (4)(A) A State may elect (in a plan amendment under this 
title) to provide medical assistance under this title, 
notwithstanding sections 401(a), 402(b), 403, and 421 of the 
Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996, to children and pregnant women who are lawfully 
residing in the United States (including battered individuals 
described in section 431(c) of such Act) and who are otherwise 
eligible for such assistance, within either or both of the 
following eligibility categories:
          (i) Pregnant women.--Women during pregnancy (and 
        during the 60-day period beginning on the last day of 
        the pregnancy).
          (ii) Children.--Individuals under 21 years of age, 
        including optional targeted low-income children 
        described in section 1905(u)(2)(B).
  (B) In the case of a State that has elected to provide 
medical assistance to a category of aliens under subparagraph 
(A), no debt shall accrue under an affidavit of support against 
any sponsor of such an alien on the basis of provision of 
assistance to such category and the cost of such assistance 
shall not be considered as an unreimbursed cost.
  (C) As part of the State's ongoing eligibility 
redetermination requirements and procedures for an individual 
provided medical assistance as a result of an election by the 
State under subparagraph (A), a State shall verify that the 
individual continues to lawfully reside in the United States 
using the documentation presented to the State by the 
individual on initial enrollment. If the State cannot 
successfully verify that the individual is lawfully residing in 
the United States in this manner, it shall require that the 
individual provide the State with further documentation or 
other evidence to verify that the individual is lawfully 
residing in the United States.
  (w)(1)(A) Notwithstanding the previous provisions of this 
section, for purposes of determining the amount to be paid to a 
State (as defined in paragraph (7)(D)) under subsection (a)(1) 
for quarters in any fiscal year, the total amount expended 
during such fiscal year as medical assistance under the State 
plan (as determined without regard to this subsection) shall be 
reduced by the sum of any revenues received by the State (or by 
a unit of local government in the State) during the fiscal 
year--
          (i) from provider-related donations (as defined in 
        paragraph (2)(A)), other than--
                  (I) bona fide provider-related donations (as 
                defined in paragraph (2)(B)), and
                  (II) donations described in paragraph (2)(C);
          (ii) from health care related taxes (as defined in 
        paragraph (3)(A)), other than broad-based health care 
        related taxes (as defined in paragraph (3)(B));
          (iii) from a broad-based health care related tax, if 
        there is in effect a hold harmless provision (described 
        in paragraph (4)) with respect to the tax; or
          (iv) only with respect to State fiscal years (or 
        portions thereof) occurring on or after January 1, 
        1992, and before October 1, 1995, from broad-based 
        health care related taxes to the extent the amount of 
        such taxes collected exceeds the limit established 
        under paragraph (5).
  (B) Notwithstanding the previous provisions of this section, 
for purposes of determining the amount to be paid to a State 
under subsection (a)(7) for all quarters in a Federal fiscal 
year (beginning with fiscal year 1993), the total amount 
expended during the fiscal year for administrative expenditures 
under the State plan (as determined without regard to this 
subsection) shall be reduced by the sum of any revenues 
received by the State (or by a unit of local government in the 
State) during such quarters from donations described in 
paragraph (2)(C), to the extent the amount of such donations 
exceeds 10 percent of the amounts expended under the State plan 
under this title during the fiscal year for purposes described 
in paragraphs (2), (3), (4), (6), and (7) of subsection (a).
  (C)(i) Except as otherwise provided in clause (ii), 
subparagraph (A)(i) shall apply to donations received on or 
after January 1, 1992.
  (ii) Subject to the limits described in clause (iii) and 
subparagraph (E), subparagraph (A)(i) shall not apply to 
donations received before the effective date specified in 
subparagraph (F) if such donations are received under programs 
in effect or as described in State plan amendments or related 
documents submitted to the Secretary by September 30, 1991, and 
applicable to State fiscal year 1992, as demonstrated by State 
plan amendments, written agreements, State budget 
documentation, or other documentary evidence in existence on 
that date.
  (iii) In applying clause (ii) in the case of donations 
received in State fiscal year 1993, the maximum amount of such 
donations to which such clause may be applied may not exceed 
the total amount of such donations received in the 
corresponding period in State fiscal year 1992 (or not later 
than 5 days after the last day of the corresponding period).
  (D)(i) Except as otherwise provided in clause (ii), 
subparagraphs (A)(ii) and (A)(iii) shall apply to taxes 
received on or after January 1, 1992.
  (ii) Subparagraphs (A)(ii) and (A)(iii) shall not apply to 
impermissible taxes (as defined in clause (iii)) received 
before the effective date specified in subparagraph (F) to the 
extent the taxes (including the tax rate or base) were in 
effect, or the legislation or regulations imposing such taxes 
were enacted or adopted, as of November 22, 1991.
  (iii) In this subparagraph and subparagraph (E), the term 
``impermissible tax'' means a health care related tax for which 
a reduction may be made under clause (ii) or (iii) of 
subparagraph (A).
  (E)(i) In no case may the total amount of donations and taxes 
permitted under the exception provided in subparagraphs (C)(ii) 
and (D)(ii) for the portion of State fiscal year 1992 occurring 
during calendar year 1992 exceed the limit under paragraph (5) 
minus the total amount of broad-based health care related taxes 
received in the portion of that fiscal year.
  (ii) In no case may the total amount of donations and taxes 
permitted under the exception provided in subparagraphs (C)(ii) 
and (D)(ii) for State fiscal year 1993 exceed the limit under 
paragraph (5) minus the total amount of broad-based health care 
related taxes received in that fiscal year.
  (F) In this paragraph in the case of a State--
          (i) except as provided in clause (iii), with a State 
        fiscal year beginning on or before July 1, the 
        effective date is October 1, 1992,
          (ii) except as provided in clause (iii), with a State 
        fiscal year that begins after July 1, the effective 
        date is January 1, 1993, or
          (iii) with a State legislature which is not scheduled 
        to have a regular legislative session in 1992, with a 
        State legislature which is not scheduled to have a 
        regular legislative session in 1993, or with a 
        provider-specific tax enacted on November 4, 1991, the 
        effective date is July 1, 1993.
  (2)(A) In this subsection (except as provided in paragraph 
(6)), the term ``provider-related donation'' means any donation 
or other voluntary payment (whether in cash or in kind) made 
(directly or indirectly) to a State or unit of local government 
by--
          (i) a health care provider (as defined in paragraph 
        (7)(B)),
          (ii) an entity related to a health care provider (as 
        defined in paragraph (7)(C)), or
          (iii) an entity providing goods or services under the 
        State plan for which payment is made to the State under 
        paragraph (2), (3), (4), (6), or (7) of subsection (a).
  (B) For purposes of paragraph (1)(A)(i)(I), the term ``bona 
fide provider-related donation'' means a provider-related 
donation that has no direct or indirect relationship (as 
determined by the Secretary) to payments made under this title 
to that provider, to providers furnishing the same class of 
items and services as that provider, or to any related entity, 
as established by the State to the satisfaction of the 
Secretary. The Secretary may by regulation specify types of 
provider-related donations described in the previous sentence 
that will be considered to be bona fide provider-related 
donations.
  (C) For purposes of paragraph (1)(A)(i)(II), donations 
described in this subparagraph are funds expended by a 
hospital, clinic, or similar entity for the direct cost 
(including costs of training and of preparing and distributing 
outreach materials) of State or local agency personnel who are 
stationed at the hospital, clinic, or entity to determine the 
eligibility of individuals for medical assistance under this 
title and to provide outreach services to eligible or 
potentially eligible individuals.
  (3)(A) In this subsection (except as provided in paragraph 
(6)), the term ``health care related tax'' means a tax (as 
defined in paragraph (7)(F)) that--
          (i) is related to health care items or services, or 
        to the provision of, the authority to provide, or 
        payment for, such items or services, or
          (ii) is not limited to such items or services but 
        provides for treatment of individuals or entities that 
        are providing or paying for such items or services that 
        is different from the treatment provided to other 
        individuals or entities.
In applying clause (i), a tax is considered to relate to health 
care items or services if at least 85 percent of the burden of 
such tax falls on health care providers.
  (B) In this subsection, the term ``broad-based health care 
related tax'' means a health care related tax which is imposed 
with respect to a class of health care items or services (as 
described in paragraph (7)(A)) or with respect to providers of 
such items or services and which, except as provided in 
subparagraphs (D), (E), and (F)--
          (i) is imposed at least with respect to all items or 
        services in the class furnished by all non-Federal, 
        nonpublic providers in the State (or, in the case of a 
        tax imposed by a unit of local government, the area 
        over which the unit has jurisdiction) or is imposed 
        with respect to all non-Federal, nonpublic providers in 
        the class; and
          (ii) is imposed uniformly (in accordance with 
        subparagraph (C)).
  (C)(i) Subject to clause (ii), for purposes of subparagraph 
(B)(ii), a tax is considered to be imposed uniformly if--
          (I) in the case of a tax consisting of a licensing 
        fee or similar tax on a class of health care items or 
        services (or providers of such items or services), the 
        amount of the tax imposed is the same for every 
        provider providing items or services within the class;
          (II) in the case of a tax consisting of a licensing 
        fee or similar tax imposed on a class of health care 
        items or services (or providers of such services) on 
        the basis of the number of beds (licensed or otherwise) 
        of the provider, the amount of the tax is the same for 
        each bed of each provider of such items or services in 
        the class;
          (III) in the case of a tax based on revenues or 
        receipts with respect to a class of items or services 
        (or providers of items or services) the tax is imposed 
        at a uniform rate for all items and services (or 
        providers of such items of services) in the class on 
        all the gross revenues or receipts, or net operating 
        revenues, relating to the provision of all such items 
        or services (or all such providers) in the State (or, 
        in the case of a tax imposed by a unit of local 
        government within the State, in the area over which the 
        unit has jurisdiction); or
          (IV) in the case of any other tax, the State 
        establishes to the satisfaction of the Secretary that 
        the tax is imposed uniformly.
  (ii) Subject to subparagraphs (D) and (E), a tax imposed with 
respect to a class of health care items and services is not 
considered to be imposed uniformly if the tax provides for any 
credits, exclusions, or deductions which have as their purpose 
or effect the return to providers of all or a portion of the 
tax paid in a manner that is inconsistent with subclauses (I) 
and (II) of subparagraph (E)(ii) or provides for a hold 
harmless provision described in paragraph (4).
  (D) A tax imposed with respect to a class of health care 
items and services is considered to be imposed uniformly--
          (i) notwithstanding that the tax is not imposed with 
        respect to items or services (or the providers thereof) 
        for which payment is made under a State plan under this 
        title or title XVIII, or
          (ii) in the case of a tax described in subparagraph 
        (C)(i)(III), notwithstanding that the tax provides for 
        exclusion (in whole or in part) of revenues or receipts 
        from a State plan under this title or title XVIII.
  (E)(i) A State may submit an application to the Secretary 
requesting that the Secretary treat a tax as a broad-based 
health care related tax, notwithstanding that the tax does not 
apply to all health care items or services in class (or all 
providers of such items and services), provides for a credit, 
deduction, or exclusion, is not applied uniformly, or otherwise 
does not meet the requirements of subparagraph (B) or (C). 
Permissible waivers may include exemptions for rural or sole-
community providers.
  (ii) The Secretary shall approve such an application if the 
State establishes to the satisfaction of the Secretary that--
          (I) the net impact of the tax and associated 
        expenditures under this title as proposed by the State 
        is generally redistributive in nature, and
          (II) the amount of the tax is not directly correlated 
        to payments under this title for items or services with 
        respect to which the tax is imposed.
The Secretary shall by regulation specify types of credits, 
exclusions, and deductions that will be considered to meet the 
requirements of this subparagraph.
  (F) In no case shall a tax not qualify as a broad-based 
health care related tax under this paragraph because it does 
not apply to a hospital that is described in section 501(c)(3) 
of the Internal Revenue Code of 1986 and exempt from taxation 
under section 501(a) of such Code and that does not accept 
payment under the State plan under this title or under title 
XVIII.
  (4) For purposes of paragraph (1)(A)(iii), there is in effect 
a hold harmless provision with respect to a broad-based health 
care related tax imposed with respect to a class of items or 
services if the Secretary determines that any of the following 
applies:
          (A) The State or other unit of government imposing 
        the tax provides (directly or indirectly) for a payment 
        (other than under this title) to taxpayers and the 
        amount of such payment is positively correlated either 
        to the amount of such tax or to the difference between 
        the amount of the tax and the amount of payment under 
        the State plan.
          (B) All or any portion of the payment made under this 
        title to the taxpayer varies based only upon the amount 
        of the total tax paid.
          (C)(i) The State or other unit of government imposing 
        the tax provides (directly or indirectly) for any 
        payment, offset, or waiver that guarantees to hold 
        taxpayers harmless for any portion of the costs of the 
        tax.
          (ii) For purposes of clause (i), a determination of 
        the existence of an indirect guarantee shall be made 
        under paragraph (3)(i) of section 433.68(f) of title 
        42, Code of Federal Regulations, as in effect on 
        November 1, 2006, except that for portions of fiscal 
        years beginning on or after January 1, 2008, and before 
        October 1, 2011, ``5.5 percent'' shall be substituted 
        for ``6 percent'' each place it appears.
The provisions of this paragraph shall not prevent use of the 
tax to reimburse health care providers in a class for 
expenditures under this title nor preclude States from relying 
on such reimbursement to justify or explain the tax in the 
legislative process.
  (5)(A) For purposes of this subsection, the limit under this 
subparagraph with respect to a State is an amount equal to 25 
percent (or, if greater, the State base percentage, as defined 
in subparagraph (B)) of the non-Federal share of the total 
amount expended under the State plan during a State fiscal year 
(or portion thereof), as it would be determined pursuant to 
paragraph (1)(A) without regard to paragraph (1)(A)(iv).
  (B)(i) In subparagraph (A), the term ``State base 
percentage'' means, with respect to a State, an amount 
(expressed as a percentage) equal to--
          (I) the total of the amount of health care related 
        taxes (whether or not broad-based) and the amount of 
        provider-related donations (whether or not bona fide) 
        projected to be collected (in accordance with clause 
        (ii)) during State fiscal year 1992, divided by
          (II) the non-Federal share of the total amount 
        estimated to be expended under the State plan during 
        such State fiscal year.
  (ii) For purposes of clause (i)(I), in the case of a tax that 
is not in effect throughout State fiscal year 1992 or the rate 
(or base) of which is increased during such fiscal year, the 
Secretary shall project the amount to be collected during such 
fiscal year as if the tax (or increase) were in effect during 
the entire State fiscal year.
  (C)(i) The total amount of health care related taxes under 
subparagraph (B)(i)(I) shall be determined by the Secretary 
based on only those taxes (including the tax rate or base) 
which were in effect, or for which legislation or regulations 
imposing such taxes were enacted or adopted, as of November 22, 
1991.
  (ii) The amount of provider-related donations under 
subparagraph (B)(i)(I) shall be determined by the Secretary 
based on programs in effect on September 30, 1991, and 
applicable to State fiscal year 1992, as demonstrated by State 
plan amendments, written agreements, State budget 
documentation, or other documentary evidence in existence on 
that date.
  (iii) The amount of expenditures described in subparagraph 
(B)(i)(II) shall be determined by the Secretary based on the 
best data available as of the date of the enactment of this 
subsection.
  (6)(A) Notwithstanding the provisions of this subsection, the 
Secretary may not restrict States' use of funds where such 
funds are derived from State or local taxes (or funds 
appropriated to State university teaching hospitals) 
transferred from or certified by units of government within a 
State as the non-Federal share of expenditures under this 
title, regardless of whether the unit of government is also a 
health care provider, except as provided in section 1902(a)(2), 
unless the transferred funds are derived by the unit of 
government from donations or taxes that would not otherwise be 
recognized as the non-Federal share under this section.
  (B) For purposes of this subsection, funds the use of which 
the Secretary may not restrict under subparagraph (A) shall not 
be considered to be a provider-related donation or a health 
care related tax.
  (7) For purposes of this subsection:
          (A) Each of the following shall be considered a 
        separate class of health care items and services:
                  (i) Inpatient hospital services.
                  (ii) Outpatient hospital services.
                  (iii) Nursing facility services (other than 
                services of intermediate care facilities for 
                the mentally retarded).
                  (iv) Services of intermediate care facilities 
                for the mentally retarded.
                  (v) Physicians' services.
                  (vi) Home health care services.
                  (vii) Outpatient prescription drugs.
                  (viii) Services of managed care organizations 
                (including health maintenance organizations, 
                preferred provider organizations, and such 
                other similar organizations as the Secretary 
                may specify by regulation).
                  (ix) Such other classification of health care 
                items and services consistent with this 
                subparagraph as the Secretary may establish by 
                regulation.
          (B) The term ``health care provider'' means an 
        individual or person that receives payments for the 
        provision of health care items or services.
          (C) An entity is considered to be ``related'' to a 
        health care provider if the entity--
                  (i) is an organization, association, 
                corporation or partnership formed by or on 
                behalf of health care providers;
                  (ii) is a person with an ownership or control 
                interest (as defined in section 1124(a)(3)) in 
                the provider;
                  (iii) is the employee, spouse, parent, child, 
                or sibling of the provider (or of a person 
                described in clause (ii)); or
                  (iv) has a similar, close relationship (as 
                defined in regulations) to the provider.
          (D) The term ``State'' means only the 50 States and 
        the District of Columbia but does not include any State 
        whose entire program under this title is operated under 
        a waiver granted under section 1115.
          (E) The ``State fiscal year'' means, with respect to 
        a specified year, a State fiscal year ending in that 
        specified year.
          (F) The term ``tax'' includes any licensing fee, 
        assessment, or other mandatory payment, but does not 
        include payment of a criminal or civil fine or penalty 
        (other than a fine or penalty imposed in lieu of or 
        instead of a fee, assessment, or other mandatory 
        payment).
          (G) The term ``unit of local government'' means, with 
        respect to a State, a city, county, special purpose 
        district, or other governmental unit in the State.
  (x)(1) For purposes of section 1902(a)(46)(B)(i), the 
requirement of this subsection is, with respect to an 
individual declaring to be a citizen or national of the United 
States, that, subject to paragraph (2), there is presented 
satisfactory documentary evidence of citizenship or nationality 
(as defined in paragraph (3)) of the individual.
  (2) The requirement of paragraph (1) shall not apply to an 
individual declaring to be a citizen or national of the United 
States who is eligible for medical assistance under this 
title--
          (A) and is entitled to or enrolled for benefits under 
        any part of title XVIII;
          (B) and is receiving--
                  (i) disability insurance benefits under 
                section 223 or monthly insurance benefits under 
                section 202 based on such individual's 
                disability (as defined in section 223(d)); or
                  (ii) supplemental security income benefits 
                under title XVI;
          (C) and with respect to whom--
                  (i) child welfare services are made available 
                under part B of title IV on the basis of being 
                a child in foster care; or
                  (ii) adoption or foster care assistance is 
                made available under part E of title IV;
          (D) pursuant to the application of section 1902(e)(4) 
        (and, in the case of an individual who is eligible for 
        medical assistance on such basis, the individual shall 
        be deemed to have provided satisfactory documentary 
        evidence of citizenship or nationality and shall not be 
        required to provide further documentary evidence on any 
        date that occurs during or after the period in which 
        the individual is eligible for medical assistance on 
        such basis); or
          (E) on such basis as the Secretary may specify under 
        which satisfactory documentary evidence of citizenship 
        or nationality has been previously presented.
  (3)(A) For purposes of this subsection, the term 
``satisfactory documentary evidence of citizenship or 
nationality'' means--
          (i) any document described in subparagraph (B); or
          (ii) a document described in subparagraph (C) and a 
        document described in subparagraph (D).
  (B) The following are documents described in this 
subparagraph:
          (i) A United States passport.
          (ii) Form N-550 or N-570 (Certificate of 
        Naturalization).
          (iii) Form N-560 or N-561 (Certificate of United 
        States Citizenship).
          (iv) A valid State-issued driver's license or other 
        identity document described in section 274A(b)(1)(D) of 
        the Immigration and Nationality Act, but only if the 
        State issuing the license or such document requires 
        proof of United States citizenship before issuance of 
        such license or document or obtains a social security 
        number from the applicant and verifies before 
        certification that such number is valid and assigned to 
        the applicant who is a citizen.
          (v)(I) Except as provided in subclause (II), a 
        document issued by a federally recognized Indian tribe 
        evidencing membership or enrollment in, or affiliation 
        with, such tribe (such as a tribal enrollment card or 
        certificate of degree of Indian blood).
          (II) With respect to those federally recognized 
        Indian tribes located within States having an 
        international border whose membership includes 
        individuals who are not citizens of the United States, 
        the Secretary shall, after consulting with such tribes, 
        issue regulations authorizing the presentation of such 
        other forms of documentation (including tribal 
        documentation, if appropriate) that the Secretary 
        determines to be satisfactory documentary evidence of 
        citizenship or nationality for purposes of satisfying 
        the requirement of this subsection.
          (vi) Such other document as the Secretary may 
        specify, by regulation, that provides proof of United 
        States citizenship or nationality and that provides a 
        reliable means of documentation of personal identity.
  (C) The following are documents described in this 
subparagraph:
          (i) A certificate of birth in the United States.
          (ii) Form FS-545 or Form DS-1350 (Certification of 
        Birth Abroad).
          (iii) Form I-197 (United States Citizen 
        Identification Card).
          (iv) Form FS-240 (Report of Birth Abroad of a Citizen 
        of the United States).
          (v) Such other document (not described in 
        subparagraph (B)(iv)) as the Secretary may specify that 
        provides proof of United States citizenship or 
        nationality.
  (D) The following are documents described in this 
subparagraph:
          (i) Any identity document described in section 
        274A(b)(1)(D) of the Immigration and Nationality Act.
          (ii) Any other documentation of personal identity of 
        such other type as the Secretary finds, by regulation, 
        provides a reliable means of identification.
  (E) A reference in this paragraph to a form includes a 
reference to any successor form.
  (4) In the case of an individual declaring to be a citizen or 
national of the United States with respect to whom a State 
requires the presentation of satisfactory documentary evidence 
of citizenship or nationality under section 1902(a)(46)(B)(i), 
the individual shall be provided at least the reasonable 
opportunity to present satisfactory documentary evidence of 
citizenship or nationality under this subsection as is provided 
under clauses (i) and (ii) of section 1137(d)(4)(A) to an 
individual for the submittal to the State of evidence 
indicating a satisfactory immigration status.
  (5) Nothing in subparagraph (A) or (B) of section 
1902(a)(46), the preceding paragraphs of this subsection, or 
the Deficit Reduction Act of 2005, including section 6036 of 
such Act, shall be construed as changing the requirement of 
section 1902(e)(4) that a child born in the United States to an 
alien mother for whom medical assistance for the delivery of 
such child is available as treatment of an emergency medical 
condition pursuant to subsection (v) shall be deemed eligible 
for medical assistance during the first year of such child's 
life.
  (y) Payments for Establishment of Alternate Non-Emergency 
Services Providers.--
          (1) Payments.--In addition to the payments otherwise 
        provided under subsection (a), subject to paragraph 
        (2), the Secretary shall provide for payments to States 
        under such subsection for the establishment of 
        alternate non-emergency service providers (as defined 
        in section 1916A(e)(5)(B)), or networks of such 
        providers.
          (2) Limitation.--The total amount of payments under 
        this subsection shall not exceed $50,000,000 during the 
        4-year period beginning with 2006. This subsection 
        constitutes budget authority in advance of 
        appropriations Acts and represents the obligation of 
        the Secretary to provide for the payment of amounts 
        provided under this subsection.
          (3) Preference.--In providing for payments to States 
        under this subsection, the Secretary shall provide 
        preference to States that establish, or provide for, 
        alternate non-emergency services providers or networks 
        of such providers that--
                  (A) serve rural or underserved areas where 
                beneficiaries under this title may not have 
                regular access to providers of primary care 
                services; or
                  (B) are in partnership with local community 
                hospitals.
          (4) Form and manner of payment.--Payment to a State 
        under this subsection shall be made only upon the 
        filing of such application in such form and in such 
        manner as the Secretary shall specify. Payment to a 
        State under this subsection shall be made in the same 
        manner as other payments under section 1903(a).
  (z) Medicaid Transformation Payments.--
          (1) In general.--In addition to the payments provided 
        under subsection (a), subject to paragraph (4), the 
        Secretary shall provide for payments to States for the 
        adoption of innovative methods to improve the 
        effectiveness and efficiency in providing medical 
        assistance under this title.
          (2) Permissible uses of funds.--The following are 
        examples of innovative methods for which funds provided 
        under this subsection may be used:
                  (A) Methods for reducing patient error rates 
                through the implementation and use of 
                electronic health records, electronic clinical 
                decision support tools, or e-prescribing 
                programs.
                  (B) Methods for improving rates of collection 
                from estates of amounts owed under this title.
                  (C) Methods for reducing waste, fraud, and 
                abuse under the program under this title, such 
                as reducing improper payment rates as measured 
                by annual payment error rate measurement (PERM) 
                project rates.
                  (D) Implementation of a medication risk 
                management program as part of a drug use review 
                program under section 1927(g).
                  (E) Methods in reducing, in clinically 
                appropriate ways, expenditures under this title 
                for covered outpatient drugs, particularly in 
                the categories of greatest drug utilization, by 
                increasing the utilization of generic drugs 
                through the use of education programs and other 
                incentives to promote greater use of generic 
                drugs.
                  (F) Methods for improving access to primary 
                and specialty physician care for the uninsured 
                using integrated university-based hospital and 
                clinic systems.
          (3) Application; terms and conditions.--
                  (A) In general.--No payments shall be made to 
                a State under this subsection unless the State 
                applies to the Secretary for such payments in a 
                form, manner, and time specified by the 
                Secretary.
                  (B) Terms and conditions.--Such payments are 
                made under such terms and conditions consistent 
                with this subsection as the Secretary 
                prescribes.
                  (C) Annual report.--Payment to a State under 
                this subsection is conditioned on the State 
                submitting to the Secretary an annual report on 
                the programs supported by such payment. Such 
                report shall include information on--
                          (i) the specific uses of such 
                        payment;
                          (ii) an assessment of quality 
                        improvements and clinical outcomes 
                        under such programs; and
                          (iii) estimates of cost savings 
                        resulting from such programs.
          (4) Funding.--
                  (A) Limitation on funds.--The total amount of 
                payments under this subsection shall be equal 
                to, and shall not exceed--
                          (i) $75,000,000 for fiscal year 2007; 
                        and
                          (ii) $75,000,000 for fiscal year 
                        2008.
                This subsection constitutes budget authority in 
                advance of appropriations Acts and represents 
                the obligation of the Secretary to provide for 
                the payment of amounts provided under this 
                subsection.
                  (B) Allocation of funds.--The Secretary shall 
                specify a method for allocating the funds made 
                available under this subsection among States. 
                Such method shall provide preference for States 
                that design programs that target health 
                providers that treat significant numbers of 
                Medicaid beneficiaries. Such method shall 
                provide that not less than 25 percent of such 
                funds shall be allocated among States the 
                population of which (as determined according to 
                data collected by the United States Census 
                Bureau) as of July 1, 2004, was more than 105 
                percent of the population of the respective 
                State (as so determined) as of April 1, 2000.
                  (C) Form and manner of payment.--Payment to a 
                State under this subsection shall be made in 
                the same manner as other payments under section 
                1903(a). There is no requirement for State 
                matching funds to receive payments under this 
                subsection.
          (5) Medication risk management program.--
                  (A) In general.--For purposes of this 
                subsection, the term ``medication risk 
                management program'' means a program for 
                targeted beneficiaries that ensures that 
                covered outpatient drugs are appropriately used 
                to optimize therapeutic outcomes through 
                improved medication use and to reduce the risk 
                of adverse events.
                  (B) Elements.--Such program may include the 
                following elements:
                          (i) The use of established principles 
                        and standards for drug utilization 
                        review and best practices to analyze 
                        prescription drug claims of targeted 
                        beneficiaries and identify outlier 
                        physicians.
                          (ii) On an ongoing basis provide 
                        outlier physicians--
                                  (I) a comprehensive pharmacy 
                                claims history for each 
                                targeted beneficiary under 
                                their care;
                                  (II) information regarding 
                                the frequency and cost of 
                                relapses and hospitalizations 
                                of targeted beneficiaries under 
                                the physician's care; and
                                  (III) applicable best 
                                practice guidelines and 
                                empirical references.
                          (iii) Monitor outlier physician's 
                        prescribing, such as failure to refill, 
                        dosage strengths, and provide 
                        incentives and information to encourage 
                        the adoption of best clinical 
                        practices.
                  (C) Targeted beneficiaries.--For purposes of 
                this paragraph, the term ``targeted 
                beneficiaries'' means Medicaid eligible 
                beneficiaries who are identified as having high 
                prescription drug costs and medical costs, such 
                as individuals with behavioral disorders or 
                multiple chronic diseases who are taking 
                multiple medications.
  (aa) Demonstration Project to Increase Substance Use Provider 
Capacity.--
          (1) In general.--Not later than the date that is 180 
        days after the date of the enactment of this section, 
        the Secretary shall, in consultation, as appropriate, 
        with the Director of the Agency for Healthcare Research 
        and Quality and the Assistant Secretary for Mental 
        Health and Substance Use, conduct a 5-year 
        demonstration project for the purpose described in 
        paragraph (2) under which the Secretary shall--
                  (A) for the first 18-month period of such 
                project, award planning grants described in 
                paragraph (3); and
                  (B) for the remaining 42-month period of such 
                project, provide to each State selected under 
                paragraph (4) payments in accordance with 
                paragraph (5).
          (2) Purpose.--The purpose described in this paragraph 
        is for each State selected under paragraph (4) to 
        increase the treatment capacity of providers 
        participating under the State plan (or a waiver of such 
        plan) to provide substance use disorder treatment or 
        recovery services under such plan (or waiver) through 
        the following activities:
                  (A) For the purpose described in paragraph 
                (3)(C)(i), activities that support an ongoing 
                assessment of the behavioral health treatment 
                needs of the State, taking into account the 
                matters described in subclauses (I) through 
                (IV) of such paragraph.
                  (B) Activities that, taking into account the 
                results of the assessment described in 
                subparagraph (A), support the recruitment, 
                training, and provision of technical assistance 
                for providers participating under the State 
                plan (or a waiver of such plan) that offer 
                substance use disorder treatment or recovery 
                services.
                  (C) Improved reimbursement for and expansion 
                of, through the provision of education, 
                training, and technical assistance, the number 
                or treatment capacity of providers 
                participating under the State plan (or waiver) 
                that--
                          (i) are authorized to dispense drugs 
                        approved by the Food and Drug 
                        Administration for individuals with a 
                        substance use disorder who need 
                        withdrawal management or maintenance 
                        treatment for such disorder;
                          (ii) have in effect a registration or 
                        waiver under section 303(g) of the 
                        Controlled Substances Act for purposes 
                        of dispensing narcotic drugs to 
                        individuals for maintenance treatment 
                        or detoxification treatment and are in 
                        compliance with any regulation 
                        promulgated by the Assistant Secretary 
                        for Mental Health and Substance Use for 
                        purposes of carrying out the 
                        requirements of such section 303(g); 
                        and
                          (iii) are qualified under applicable 
                        State law to provide substance use 
                        disorder treatment or recovery 
                        services.
                  (D) Improved reimbursement for and expansion 
                of, through the provision of education, 
                training, and technical assistance, the number 
                or treatment capacity of providers 
                participating under the State plan (or waiver) 
                that have the qualifications to address the 
                treatment or recovery needs of--
                          (i) individuals enrolled under the 
                        State plan (or a waiver of such plan) 
                        who have neonatal abstinence syndrome, 
                        in accordance with guidelines issued by 
                        the American Academy of Pediatrics and 
                        American College of Obstetricians and 
                        Gynecologists relating to maternal care 
                        and infant care with respect to 
                        neonatal abstinence syndrome;
                          (ii) pregnant women, postpartum 
                        women, and infants, particularly the 
                        concurrent treatment, as appropriate, 
                        and comprehensive case management of 
                        pregnant women, post-partum women and 
                        infants, enrolled under the State plan 
                        (or a waiver of such plan);
                          (iii) adolescents and young adults 
                        between the ages of 12 and 21 enrolled 
                        under the State plan (or a waiver of 
                        such plan); or
                          (iv) American Indian and Alaska 
                        Native individuals enrolled under the 
                        State plan (or a waiver of such plan).
          (3) Planning grants.--
                  (A) In general.--The Secretary shall, with 
                respect to the first 18-month period of the 
                demonstration project conducted under paragraph 
                (1), award planning grants to at least 10 
                States selected in accordance with subparagraph 
                (B) for purposes of preparing an application 
                described in paragraph (4)(C) and carrying out 
                the activities described in subparagraph (C).
                  (B) Selection.--In selecting States for 
                purposes of this paragraph, the Secretary 
                shall--
                          (i) select States that have a State 
                        plan (or waiver of the State plan) 
                        approved under this title;
                          (ii) select States in a manner that 
                        ensures geographic diversity; and
                          (iii) give preference to States with 
                        a prevalence of substance use disorders 
                        (in particular opioid use disorders) 
                        that is comparable to or higher than 
                        the national average prevalence, as 
                        measured by aggregate per capita drug 
                        overdoses, or any other measure that 
                        the Secretary deems appropriate.
                  (C) Activities described.--Activities 
                described in this subparagraph are, with 
                respect to a State, each of the following:
                          (i) Activities that support the 
                        development of an initial assessment of 
                        the behavioral health treatment needs 
                        of the State to determine the extent to 
                        which providers are needed (including 
                        the types of such providers and 
                        geographic area of need) to improve the 
                        network of providers that treat 
                        substance use disorders under the State 
                        plan (or waiver), including the 
                        following:
                                  (I) An estimate of the number 
                                of individuals enrolled under 
                                the State plan (or a waiver of 
                                such plan) who have a substance 
                                use disorder.
                                  (II) Information on the 
                                capacity of providers to 
                                provide substance use disorder 
                                treatment or recovery services 
                                to individuals enrolled under 
                                the State plan (or waiver), 
                                including information on 
                                providers who provide such 
                                services and their 
                                participation under the State 
                                plan (or waiver).
                                  (III) Information on the gap 
                                in substance use disorder 
                                treatment or recovery services 
                                under the State plan (or 
                                waiver) based on the 
                                information described in 
                                subclauses (I) and (II).
                                  (IV) Projections regarding 
                                the extent to which the State 
                                participating under the 
                                demonstration project would 
                                increase the number of 
                                providers offering substance 
                                use disorder treatment or 
                                recovery services under the 
                                State plan (or waiver) during 
                                the period of the demonstration 
                                project.
                          (ii) Activities that, taking into 
                        account the results of the assessment 
                        described in clause (i), support the 
                        development of State infrastructure to, 
                        with respect to the provision of 
                        substance use disorder treatment or 
                        recovery services under the State plan 
                        (or a waiver of such plan), recruit 
                        prospective providers and provide 
                        training and technical assistance to 
                        such providers.
                  (D) Funding.--For purposes of subparagraph 
                (A), there is appropriated, out of any funds in 
                the Treasury not otherwise appropriated, 
                $50,000,000, to remain available until 
                expended.
          (4) Post-planning states.--
                  (A) In general.--The Secretary shall, with 
                respect to the remaining 42-month period of the 
                demonstration project conducted under paragraph 
                (1), select not more than 5 States in 
                accordance with subparagraph (B) for purposes 
                of carrying out the activities described in 
                paragraph (2) and receiving payments in 
                accordance with paragraph (5).
                  (B) Selection.--In selecting States for 
                purposes of this paragraph, the Secretary 
                shall--
                          (i) select States that received a 
                        planning grant under paragraph (3);
                          (ii) select States that submit to the 
                        Secretary an application in accordance 
                        with the requirements in subparagraph 
                        (C), taking into consideration the 
                        quality of each such application;
                          (iii) select States in a manner that 
                        ensures geographic diversity; and
                          (iv) give preference to States with a 
                        prevalence of substance use disorders 
                        (in particular opioid use disorders) 
                        that is comparable to or higher than 
                        the national average prevalence, as 
                        measured by aggregate per capita drug 
                        overdoses, or any other measure that 
                        the Secretary deems appropriate.
                  (C) Applications.--
                          (i) In general.--A State seeking to 
                        be selected for purposes of this 
                        paragraph shall submit to the 
                        Secretary, at such time and in such 
                        form and manner as the Secretary 
                        requires, an application that includes 
                        such information, provisions, and 
                        assurances, as the Secretary may 
                        require, in addition to the following:
                                  (I) A proposed process for 
                                carrying out the ongoing 
                                assessment described in 
                                paragraph (2)(A), taking into 
                                account the results of the 
                                initial assessment described in 
                                paragraph (3)(C)(i).
                                  (II) A review of 
                                reimbursement methodologies and 
                                other policies related to 
                                substance use disorder 
                                treatment or recovery services 
                                under the State plan (or 
                                waiver) that may create 
                                barriers to increasing the 
                                number of providers delivering 
                                such services.
                                  (III) The development of a 
                                plan, taking into account 
                                activities carried out under 
                                paragraph (3)(C)(ii), that will 
                                result in long-term and 
                                sustainable provider networks 
                                under the State plan (or 
                                waiver) that will offer a 
                                continuum of care for substance 
                                use disorders. Such plan shall 
                                include the following:
                                          (aa) Specific 
                                        activities to increase 
                                        the number of providers 
                                        (including providers 
                                        that specialize in 
                                        providing substance use 
                                        disorder treatment or 
                                        recovery services, 
                                        hospitals, health care 
                                        systems, Federally 
                                        qualified health 
                                        centers, and, as 
                                        applicable, certified 
                                        community behavioral 
                                        health clinics) that 
                                        offer substance use 
                                        disorder treatment, 
                                        recovery, or support 
                                        services, including 
                                        short-term 
                                        detoxification 
                                        services, outpatient 
                                        substance use disorder 
                                        services, and evidence-
                                        based peer recovery 
                                        services.
                                          (bb) Strategies that 
                                        will incentivize 
                                        providers described in 
                                        subparagraphs (C) and 
                                        (D) of paragraph (2) to 
                                        obtain the necessary 
                                        training, education, 
                                        and support to deliver 
                                        substance use disorder 
                                        treatment or recovery 
                                        services in the State.
                                          (cc) Milestones and 
                                        timeliness for 
                                        implementing activities 
                                        set forth in the plan.
                                          (dd) Specific 
                                        measurable targets for 
                                        increasing the 
                                        substance use disorder 
                                        treatment and recovery 
                                        provider network under 
                                        the State plan (or a 
                                        waiver of such plan).
                                  (IV) A proposed process for 
                                reporting the information 
                                required under paragraph 
                                (6)(A), including information 
                                to assess the effectiveness of 
                                the efforts of the State to 
                                expand the capacity of 
                                providers to deliver substance 
                                use disorder treatment or 
                                recovery services during the 
                                period of the demonstration 
                                project under this subsection.
                                  (V) The expected financial 
                                impact of the demonstration 
                                project under this subsection 
                                on the State.
                                  (VI) A description of all 
                                funding sources available to 
                                the State to provide substance 
                                use disorder treatment or 
                                recovery services in the State.
                                  (VII) A preliminary plan for 
                                how the State will sustain any 
                                increase in the capacity of 
                                providers to deliver substance 
                                use disorder treatment or 
                                recovery services resulting 
                                from the demonstration project 
                                under this subsection after the 
                                termination of such 
                                demonstration project.
                                  (VIII) A description of how 
                                the State will coordinate the 
                                goals of the demonstration 
                                project with any waiver 
                                received pursuant to section 
                                1115 for the delivery of 
                                substance use services under 
                                the State plan, as applicable.
                          (ii) Consultation.--In completing an 
                        application under clause (i), a State 
                        shall consult with relevant 
                        stakeholders, including Medicaid 
                        managed care plans, health care 
                        providers, and Medicaid beneficiary 
                        advocates, and include in such 
                        application a description of such 
                        consultation.
          (5) Payment.--
                  (A) In general.--For each quarter occurring 
                during the period for which the demonstration 
                project is conducted (after the first 18 months 
                of such period), the Secretary shall pay under 
                this subsection, subject to subparagraphs (C) 
                and (D), to each State selected under paragraph 
                (4) an amount equal to 80 percent of so much of 
                the qualified sums expended during such 
                quarter.
                  (B) Qualified sums defined.--For purposes of 
                subparagraph (A), the term ``qualified sums'' 
                means, with respect to a State and a quarter, 
                the amount equal to the amount (if any) by 
                which the sums expended by the State during 
                such quarter attributable to substance use 
                treatment or recovery services furnished by 
                providers participating under the State plan 
                (or a waiver of such plan) exceeds 1/4 of such 
                sums expended by the State during fiscal year 
                2018 attributable to substance use treatment or 
                recovery services.
                  (C) Non-duplication of payment.--In the case 
                that payment is made under subparagraph (A) 
                with respect to expenditures for substance use 
                treatment or recovery services furnished by 
                providers participating under the State plan 
                (or a waiver of such plan), payment may not 
                also be made under subsection (a) with respect 
                to expenditures for the same services so 
                furnished.
                  (D) Conditions.--In the case of a State 
                selected under paragraph (4) that provides 
                substance use disorder treatment and recovery 
                services under a waiver under section 1115, 
                such State shall, as a condition of receiving 
                payments under subparagraph (A)--
                          (i) coordinate such services under 
                        such waiver with substance use disorder 
                        treatment and recovery services 
                        provided under the demonstration 
                        project under this subsection; and
                          (ii) take such actions as appropriate 
                        under the demonstration project to 
                        expand such services under such waiver.
          (6) Reports.--
                  (A) State reports.--A State receiving 
                payments under paragraph (5) shall, for the 
                period of the demonstration project under this 
                subsection, submit to the Secretary a quarterly 
                report, with respect to expenditures for 
                substance use treatment or recovery services 
                for which payment is made to the State under 
                this subsection, on the following:
                          (i) The specific activities with 
                        respect to which payment under this 
                        subsection was provided.
                          (ii) The number of providers that 
                        delivered substance use disorder 
                        treatment or recovery services in the 
                        State under the demonstration project 
                        compared to the estimated number of 
                        providers that would have otherwise 
                        delivered such services in the absence 
                        of such demonstration project.
                          (iii) The number of individuals 
                        enrolled under the State plan (or a 
                        waiver of such plan) who received 
                        substance use disorder treatment or 
                        recovery services under the 
                        demonstration project compared to the 
                        estimated number of such individuals 
                        who would have otherwise received such 
                        services in the absence of such 
                        demonstration project.
                          (iv) Other matters as determined by 
                        the Secretary.
                  (B) CMS reports.--
                          (i) Initial report.--Not later than 
                        October 1, 2020, the Administrator of 
                        the Centers for Medicare & Medicaid 
                        Services shall, in consultation with 
                        the Director of the Agency for 
                        Healthcare Research and Quality and the 
                        Assistant Secretary for Mental Health 
                        and Substance Use, submit to Congress 
                        an initial report on--
                                  (I) the States awarded 
                                planning grants under paragraph 
                                (3);
                                  (II) the criteria used in 
                                such selection; and
                                  (III) the activities carried 
                                out by such States under such 
                                planning grants.
                          (ii) Interim report.--Not later than 
                        October 1, 2022, the Administrator of 
                        the Centers for Medicare & Medicaid 
                        Services shall, in consultation with 
                        the Director of the Agency for 
                        Healthcare Research and Quality and the 
                        Assistant Secretary for Mental Health 
                        and Substance Use, submit to Congress 
                        an interim report--
                                  (I) on activities carried out 
                                under the demonstration project 
                                under this subsection;
                                  (II) on the extent to which 
                                States selected under paragraph 
                                (4) have achieved the stated 
                                goals submitted in their 
                                applications under subparagraph 
                                (C) of such paragraph;
                                  (III) with a description of 
                                the strengths and limitations 
                                of such demonstration project; 
                                and
                                  (IV) with a plan for the 
                                sustainability of such project.
                          (iii) Final report.--Not later than 
                        October 1, 2024, the Administrator of 
                        the Centers for Medicare & Medicaid 
                        Services shall, in consultation with 
                        the Director of the Agency for 
                        Healthcare Research and Quality and the 
                        Assistant Secretary for Mental Health 
                        and Substance Use, submit to Congress a 
                        final report--
                                  (I) providing updates on the 
                                matters reported in the interim 
                                report under clause (ii);
                                  (II) including a description 
                                of any changes made with 
                                respect to the demonstration 
                                project under this subsection 
                                after the submission of such 
                                interim report; and
                                  (III) evaluating such 
                                demonstration project.
                  (C) AHRQ report.--Not later than three years 
                after the date of the enactment of this 
                subsection, the Director of the Agency for 
                Healthcare Research and Quality shall submit to 
                Congress a summary on the experiences of States 
                awarded planning grants under paragraph (3) and 
                States selected under paragraph (4).
          (7) Data sharing and best practices.--During the 
        period of the demonstration project under this 
        subsection, the Secretary shall, in collaboration with 
        States selected under paragraph (4), facilitate data 
        sharing and the development of best practices between 
        such States and States that were not so selected.
          (8) CMS funding.--There is appropriated, out of any 
        funds in the Treasury not otherwise appropriated, 
        $5,000,000 to the Centers for Medicare & Medicaid 
        Services for purposes of implementing this subsection. 
        Such amount shall remain available until expended.

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