[House Report 118-610]
[From the U.S. Government Publishing Office]


118th Congress }                                               {  Report
                        HOUSE OF REPRESENTATIVES
 2d Session    }                                               {  118-610

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



 
                 ACCELERATING KIDS' ACCESS TO CARE ACT

                                _______
                                

 July 23, 2024.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mrs. Rodgers of Washington, from the Committee on Energy and Commerce, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 4758]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 4758) to amend title XIX of the Social Security 
Act to streamline enrollment under the Medicaid program of 
certain providers across State lines, and for other purposes, 
having considered the same, reports favorably thereon with 
amendments and recommends that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     4
Background and Need for Legislation..............................     4
Committee Action.................................................     6
Committee Votes..................................................     6
Oversight Findings and Recommendations...........................     8
New Budget Authority, Entitlement Authority, and Tax Expenditures     8
Congressional Budget Office Estimate.............................     8
Federal Mandates Statement.......................................     8
Statement of General Performance Goals and Objectives............     8
Duplication of Federal Programs..................................     8
Related Committee and Subcommittee Hearings......................     8
Committee Cost Estimate..........................................     9
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     9
Advisory Committee Statement.....................................     9
Applicability to Legislative Branch..............................     9
Section-by-Section Analysis of the Legislation...................     9
Changes in Existing Law Made by the Bill, as Reported............    10

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

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Accelerating Kids' Access to Care 
Act''.

SEC. 2. STREAMLINED ENROLLMENT PROCESS FOR ELIGIBLE OUT-OF-STATE 
                    PROVIDERS UNDER MEDICAID AND CHIP.

  (a) In General.--Section 1902(kk) of the Social Security Act (42 
U.S.C. 1396a(kk)) is amended by adding at the end the following new 
paragraph:
          ``(10) Streamlined enrollment process for eligible out-of-
        state providers.--
                  ``(A) In general.--If the State does not have a 
                standard agreement with other States governing coverage 
                and payment for services furnished to Medicaid-eligible 
                children with medically complex conditions that was 
                developed consistent with guidance issued by the 
                Secretary under section 1945A, the State--
                          ``(i) adopts and implements a process to 
                        allow an eligible out-of-State provider to 
                        enroll under the State plan (or a waiver of 
                        such plan) to furnish items and services to, or 
                        order, prescribe, refer, or certify eligibility 
                        for, items and services for qualifying 
                        individuals without the imposition of screening 
                        or enrollment requirements in addition to those 
                        imposed by the State in which the eligible out-
                        of-State provider is located; and
                          ``(ii) provides that an eligible out-of-State 
                        provider that enrolls as a participating 
                        provider in the State plan (or a waiver of such 
                        plan) through such process shall be so enrolled 
                        for a 5-year period, unless the provider is 
                        terminated or excluded from participation 
                        during such period.
                  ``(B) Definitions.--In this paragraph:
                          ``(i) Eligible out-of-state provider.--The 
                        term `eligible out-of-State provider' means, 
                        with respect to a State, a provider--
                                  ``(I) that is located in any other 
                                State;
                                  ``(II) that--
                                          ``(aa) was determined by the 
                                        Secretary to have a limited 
                                        risk of fraud, waste, and abuse 
                                        for purposes of determining the 
                                        level of screening to be 
                                        conducted under section 
                                        1866(j)(2), has been so 
                                        screened under such section 
                                        1866(j)(2), and is enrolled in 
                                        the Medicare program under 
                                        title XVIII; or
                                          ``(bb) was determined by the 
                                        State agency administering or 
                                        supervising the administration 
                                        of the State plan (or a waiver 
                                        of such plan) of such other 
                                        State to have a limited risk of 
                                        fraud, waste, and abuse for 
                                        purposes of determining the 
                                        level of screening to be 
                                        conducted under paragraph (1) 
                                        of this subsection, has been so 
                                        screened under such paragraph 
                                        (1), and is enrolled under such 
                                        State plan (or a waiver of such 
                                        plan); and
                                  ``(III) that has not been--
                                          ``(aa) excluded from 
                                        participation in any Federal 
                                        health care program pursuant to 
                                        section 1128 or 1128A;
                                          ``(bb) excluded from 
                                        participation in the State plan 
                                        (or a waiver of such plan) 
                                        pursuant to part 1002 of title 
                                        42, Code of Federal Regulations 
                                        (or any successor regulation), 
                                        or State law; or
                                          ``(cc) terminated from 
                                        participating in a Federal 
                                        health care program or the 
                                        State plan (or a waiver of such 
                                        plan) for a reason described in 
                                        paragraph (8)(A).
                          ``(ii) Qualifying individual.--The term 
                        `qualifying individual' means an individual 
                        under 21 years of age who is enrolled under the 
                        State plan (or waiver of such plan).
                          ``(iii) State.--The term `State' means 1 of 
                        the 50 States or the District of Columbia.''.
  (b) Conforming Amendments.--
          (1) Section 1902(a)(77) of the Social Security Act (42 U.S.C. 
        1396a(a)(77)) is amended by inserting ``enrollment,'' after 
        ``screening,''.
          (2) The subsection heading for section 1902(kk) of such Act 
        (42 U.S.C. 1396a(kk)) is amended by inserting ``Enrollment,'' 
        after ``Screening,''.
          (3) Section 2107(e)(1)(G) of such Act (42 U.S.C. 
        1397gg(e)(1)(G)) is amended by inserting ``enrollment,'' after 
        ``screening,''.
  (c) Effective Date.--The amendments made by this section shall take 
effect on the date that is 3 years after the date of enactment of this 
section.

SEC. 3. PREVENTING THE USE OF ABUSIVE SPREAD PRICING IN MEDICAID.

  (a) In General.--Section 1927(e) of the Social Security Act (42 
U.S.C. 1396r-8(e)) is amended by adding at the end the following:
          ``(6) Transparent prescription drug pass-through pricing 
        required.--
                  ``(A) In general.--A contract between the State and a 
                pharmacy benefit manager (referred to in this paragraph 
                as a `PBM'), or a contract between the State and a 
                managed care entity or other specified entity (as such 
                terms are defined in section 1903(m)(9)(D) and 
                collectively referred to in this paragraph as the 
                `entity') that includes provisions making the entity 
                responsible for coverage of covered outpatient drugs 
                dispensed to individuals enrolled with the entity, 
                shall require that payment for such drugs and related 
                administrative services (as applicable), including 
                payments made by a PBM on behalf of the State or 
                entity, is based on a transparent prescription drug 
                pass-through pricing model under which--
                          ``(i) any payment made by the entity or the 
                        PBM (as applicable) for such a drug--
                                  ``(I) is limited to--
                                          ``(aa) ingredient cost; and
                                          ``(bb) a professional 
                                        dispensing fee that is not less 
                                        than the professional 
                                        dispensing fee that the State 
                                        plan or waiver would pay if the 
                                        plan or waiver was making the 
                                        payment directly;
                                  ``(II) is passed through in its 
                                entirety (except as reduced under 
                                Federal or State laws and regulations 
                                in response to instances of waste, 
                                fraud, or abuse) by the entity or PBM 
                                to the pharmacy or provider that 
                                dispenses the drug; and
                                  ``(III) is made in a manner that is 
                                consistent with sections 447.502, 
                                447.512, 447.514, and 447.518 of title 
                                42, Code of Federal Regulations (or any 
                                successor regulation) as if such 
                                requirements applied directly to the 
                                entity or the PBM, except that any 
                                payment by the entity or the PBM for 
                                the ingredient cost of such drug 
                                purchased by a covered entity (as 
                                defined in subsection (a)(5)(B)) may 
                                exceed the actual acquisition cost (as 
                                defined in 447.502 of title 42, Code of 
                                Federal Regulations, or any successor 
                                regulation) for such drug if--
                                          ``(aa) such drug was subject 
                                        to an agreement under section 
                                        340B of the Public Health 
                                        Service Act;
                                          ``(bb) such payment for the 
                                        ingredient cost of such drug 
                                        does not exceed the maximum 
                                        payment that would have been 
                                        made by the entity or the PBM 
                                        for the ingredient cost of such 
                                        drug if such drug had not been 
                                        purchased by such covered 
                                        entity; and
                                          ``(cc) such covered entity 
                                        reports to the Secretary (in a 
                                        form and manner specified by 
                                        the Secretary), on an annual 
                                        basis and with respect to 
                                        payments for the ingredient 
                                        costs of such drugs so 
                                        purchased by such covered 
                                        entity that are in excess of 
                                        the actual acquisition costs 
                                        for such drugs, the aggregate 
                                        amount of such excess;
                          ``(ii) payment to the entity or the PBM (as 
                        applicable) for administrative services 
                        performed by the entity or PBM is limited to an 
                        administrative fee that reflects the fair 
                        market value of such services;
                          ``(iii) the entity or the PBM (as applicable) 
                        makes available to the State, and the Secretary 
                        upon request, all costs and payments related to 
                        covered outpatient drugs and accompanying 
                        administrative services incurred, received, or 
                        made by the entity or the PBM, including 
                        ingredient costs, professional dispensing fees, 
                        administrative fees, post-sale and post-invoice 
                        fees, discounts, or related adjustments such as 
                        direct and indirect remuneration fees, and any 
                        and all other remuneration; and
                          ``(iv) any form of spread pricing whereby any 
                        amount charged or claimed by the entity or the 
                        PBM (as applicable) that exceeds the amount 
                        paid to the pharmacies or providers on behalf 
                        of the State or entity, including any post-sale 
                        or post-invoice fees, discounts, or related 
                        adjustments such as direct and indirect 
                        remuneration fees or assessments (after 
                        allowing for an administrative fee as described 
                        in clause (ii)) is not allowable for purposes 
                        of claiming Federal matching payments under 
                        this title.
                  ``(B) Making certain information available.--The 
                Secretary shall publish, not less frequently than on an 
                annual basis, information received by the Secretary 
                pursuant to subparagraph (A)(i)(III)(cc). Such 
                information shall be so published in an electronic and 
                searchable format, such as through the 340B Office of 
                Pharmacy Affairs Information System (or a successor 
                system).''.
  (b) Conforming Amendments.--Section 1903(m) of such Act (42 U.S.C. 
1396b(m)) is amended--
          (1) in paragraph (2)(A)(xiii)--
                  (A) by striking ``and (III)'' and inserting 
                ``(III)'';
                  (B) by inserting before the period at the end the 
                following: ``, and (IV) if the contract includes 
                provisions making the entity responsible for coverage 
                of covered outpatient drugs, the entity shall comply 
                with the requirements of section 1927(e)(6)''; and
                  (C) by moving the left margin 4 ems to the left; and
          (2) by adding at the end the following new paragraph:
  ``(10) 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 an other specified entity (as defined in paragraph 
(9)(D)(iii)) unless such services are provided in accordance with a 
contract between the State and such entity which satisfies the 
requirements of paragraph (2)(A)(xiii).''.
  (c) Effective Date.--The amendments made by this section shall apply 
to contracts between States and managed care entities, other specified 
entities, or pharmacy benefit managers that have an effective date 
beginning on or after the date that is 18 months after the date of 
enactment of this Act.
  (d) Implementation.--
          (1) In general.--Notwithstanding any other provision of law, 
        the Secretary of Health and Human Services may implement the 
        amendments made by this section by program instruction or 
        otherwise.
          (2) Nonapplication of administrative procedure act.--
        Implementation of the amendments made by this section shall be 
        exempt from the requirements of section 553 of title 5, United 
        States Code.
  (e) Nonapplication of Paperwork Reduction Act.--Chapter 35 of title 
44, United States Code, shall not apply to any data collection 
undertaken by the Secretary of Health and Human Services under section 
1927(f) of the Social Security Act (42 U.S.C. 1396r-8(f)), as amended 
by this section.

SEC. 4. MEDICAID IMPROVEMENT FUND.

  Section 1941(b)(3)(A) of the Social Security Act (42 U.S.C. 1396w-
1(b)(3)(A)) is amended by striking ``$0'' and inserting 
``$88,000,000''.

    Amend the title so as to read:
    A bill to amend title XIX of the Social Security Act to 
streamline enrollment under the Medicaid program of certain 
providers across State lines, and to prevent the use of abusive 
spread pricing in Medicaid.

                          Purpose and Summary

    H.R. 4758 would streamline Medicaid and Children's Health 
Insurance Program (CHIP) out-of-state pediatric provider 
enrollment requirements to promote timely access to care for 
children needing to travel out-of-state for care.

                  Background and Need for Legislation

    Section 1902(a)(16) of the Social Security Act and 
regulations at 42 CFR 431.52 establish the circumstances under 
which state Medicaid agencies must cover out-of-state care, 
including in instances of medical emergencies or when covered 
medical services are more readily available in another state 
(as may be the case when, for example, an out-of-state hospital 
serves as a center of excellence for rare or specialty care).
    While these existing requirements address state Medicaid 
programs' responsibility to cover out-of-state care in certain 
circumstances, there can be hurdles for providers to receive 
the necessary approvals to provide this care to beneficiaries 
in need. Of note, are challenges associated with Section 
1902(kk) of the Social Security Act, which requires States to 
screen all prospective Medicaid providers prior to enrollment, 
to ensure the provider meets standards such as those relating 
to fraud prevention, which are necessary to maintain overall 
program integrity. However current federal law requires 
providers to enroll in the beneficiary's home state Medicaid 
program. This enrollment process can be lengthy, tedious, and 
oftentimes require providers to undergo screenings for the 
beneficiary's home state Medicaid program that the provider has 
already completed for their respective state's Medicaid 
program, delaying the timely provision of lifesaving specialty 
care that individuals may need to travel out-of-state to 
receive.
    This issue is acute for children, who are the largest 
population of Medicaid beneficiaries (accounting for over one-
third of all Medicaid beneficiaries)\1\ and who are 
disproportionately covered by Medicaid (covering as many as 42 
percent of all children in the United States).\2\ Often, 
children with medically complex conditions require specialized 
diagnostic and treatment services that may not be readily 
available in their home state.\3\ As such, the Accelerating 
Kids' Access to Care Act seeks to address the specific 
challenges associated with children covered by Medicaid who 
face delays in receiving out-of-state care by amending Section 
1902(kk) of the Social Security Act to standardize processes by 
which States must treat certain pediatricians who are already 
enrolled in another State's Medicaid program as an eligible 
provider in the originating State's program.
---------------------------------------------------------------------------
    \1\Medicaid and CIP Payment and Access Commission, ``MACStats: 
Medicaid and CHIP Data Book,'' December 2023, https://www.macpac.gov/
wp-content/uploads/2023/12/MACSTATS_Dec2023_WEB-508.pdf.
    \2\Hale, Jessica, et al., ``Health Insurance Coverage Projections 
For The US Population And Sources Of Coverage, By Age, 2024-34,'' 
Health Affairs, 2024, https://www.healthaffairs.org/doi/10.1377/
hlthaff.2024.00460.
    \3\Manetto, Nick, Joshua Greenberg and Candace Reddy, ``Policies To 
Enhance Care Of Out-Of-State Pediatric Medicaid Beneficiaries,'' Health 
Affairs, 2020, https://www.healthaffairs.org/content/forefront/
policies-enhance-care-out-of-state-pediatric-medicaid-beneficiaries.
---------------------------------------------------------------------------
    Notably, the Accelerating Kids' Access to Care Act does not 
amend Section 1902(a)(16) of the Social Security Act, 
pertaining to the entitlement of care across state lines. As 
such, the bill preserves current law requirements related to 
the circumstances in which out-of-state care must be 
covered.\4\ The bill makes it easier for children to receive 
services covered under their home State's Medicaid program by 
streamlining the process to ensure that qualified out-of-state 
providers are more quickly cleared to provide the child care.
---------------------------------------------------------------------------
    \4\Section 1902(a)(16) of the Social Security Act establishes as a 
state plan requirement that State Medicaid agencies ``provide for 
inclusion, to the extent required by regulations prescribed by the 
Secretary, of provisions (conforming to such regulations) with respect 
to the furnishing of medical assistance under the plan to individuals 
who are residents of the State but are absent therefrom.'' Regulations 
at 42 CFR 431.52 establish the circumstances under which a State plan 
must provide that the State will pay for services furnished in another 
State to the same extent it would pay for services furnished within its 
boundaries. With respect to individuals enrolled in Medicaid managed 
care, regulations at 42 CFR 438.206(b)(4) provide that, if the provider 
network of a plan is unable to provide necessary services covered under 
the contract to an enrollee, the managed care plan must adequately and 
timely cover the services out-of-network for the enrollee for so long 
as the managed care plan's network is unable to provide those services.
---------------------------------------------------------------------------
    In addition to requirements pertaining to the enrollment of 
out-of-state providers, the bill also includes a prohibition on 
spread pricing by pharmacy benefit managers in the Medicaid 
program. Spread pricing occurs when pharmacy benefit managers 
keep a portion of the amount paid to them for prescription 
drugs, charging Medicaid an excess amount for the drug. This 
provision was previously included in the Committee-passed H.R. 
3561 and the House-passed H.R. 5378. This provision would be 
used to offset any increases in direct spending attributed to 
the timely provision of care to children from the enactment of 
the bill.

                            Committee Action

    On February 29, 2024, the Subcommittee on Health held a 
hearing on H.R. 4758. The title of the hearing was 
``Legislative Proposals to Support Patients with Rare 
Diseases.'' The Subcommittee received testimony from:
           Terence Flotte, MD, Provost and Dean of 
        UMass Chan Medical School, Vice President of American 
        Society of Gene and Cell Therapy;
           Alexander Bassuk, MD, PhD, Physician-in-
        Chief, University of Iowa Stead Family Children's 
        Hospital; Chair and Professor, Stead Family Department 
        of Pediatrics;
           Aaron Kesselheim, MD, JD, MPH, Professor of 
        Medicine, Harvard Medical School; Director, Program On 
        Regulation, Therapeutics, And Law (PORTAL) at Brigham 
        and Women's Hospital;
           Jeromie Ballreich, PhD, Associate Research 
        Professor, Johns Hopkins Bloomberg School of Public 
        Health;
           Alice Chen, PhD, Senior Fellow, USC 
        Schaeffer Center for Health Policy and Economics; 
        Associate Professor and Vice Dean for Research, USC Sol 
        Price School of Public Policy; and
           Khrystal Davis, JD, Founding President, 
        Texas Rare Alliance.
    On May 16, 2024, the Subcommittee on Health met in open 
markup session and forwarded H.R. 4758, without amendment, to 
the full Committee by a voice vote.
    On June 12, 2024, the full Committee on Energy and Commerce 
met in open markup session and ordered H.R. 4758, as amended, 
favorably reported to the House by a recorded vote of 43 yeas 
and 0 nays.

                            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. The following reflects the record votes taken during 
the Committee consideration:


                 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. 4758 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, at the time this 
report was filed, the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974 was not available.

                       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 
streamline the enrollment of out-of-state providers in the 
Medicaid program.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 4758 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.

              Related Committee and Subcommittee Hearings

    Pursuant to clause 3(c)(6) of rule XIII, the following 
related hearing was used to develop or consider H.R. 4758:
           On February 29, 2024, the Subcommittee on 
        Health held a hearing on H.R. 4758. The title of the 
        hearing was ``Legislative Proposals to Support Patients 
        with Rare Diseases.'' The Subcommittee received 
        testimony from:
                   Terence Flotte, MD, Provost and 
                Dean of UMass Chan Medical School, Vice 
                President of American Society of Gene and Cell 
                Therapy;
                   Alexander Bassuk, MD, PhD, 
                Physician-in-Chief, University of Iowa Stead 
                Family Children's Hospital; Chair and 
                Professor, Stead Family Department of 
                Pediatrics;
                   Aaron Kesselheim, MD, JD, MPH, 
                Professor of Medicine, Harvard Medical School; 
                Director, Program On Regulation, Therapeutics, 
                and Law (PORTAL) at Brigham and Women's 
                Hospital;
                   Jeromie Ballreich, PhD, 
                Associate Research Professor, Johns Hopkins 
                Bloomberg School of Public Health;
                   Alice Chen, PhD, Senior Fellow, 
                USC Schaeffer Center for Health Policy and 
                Economics; Associate Professor and Vice Dean 
                for Research, USC Sol Price School of Public 
                Policy; and
                   Khrystal Davis, JD, Founding 
                President, Texas Rare Alliance.

                        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. At the time this report was 
filed, the estimate was not available.

       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. 4758 contains no earmarks, limited 
tax benefits, or limited tariff benefits.

                      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 
``Accelerating Kids' Access to Care Act''.

Section 2. Streamlined enrollment processes for eligible out-of-state 
        providers under Medicaid and CHIP

    Section 2 requires States to standardize processes for the 
enrollment of out-of-state pediatric providers that already 
meet federal screening requirements to be enrolled in the 
State's Medicaid program.
    In addition, Section 2 establishes the period of enrollment 
of out-of-state providers in a State's Medicaid program as 5 
years before having to renew the enrollment (unless the 
provider is terminated or excluded from participation during 
such period).

Section 3. Preventing the use of abusive spread pricing in Medicaid

    Section 3 prohibits pharmacy benefit managers from spread 
pricing in the Medicaid program.

Section 4. Medicaid Improvement Fund

    Section 4 appropriates $88,000,000 to the Medicaid 
Improvement Fund.

         Changes in Existing Law Made by the Bill, as Reported

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

                          SOCIAL SECURITY ACT



           *       *       *       *       *       *       *
TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS

           *       *       *       *       *       *       *


                   STATE PLANS FOR MEDICAL ASSISTANCE

  Sec. 1902. (a) A State plan for medical assistance must--
          (1) provide that it shall be in effect in all 
        political subdivisions of the State, and, if 
        administered by them, be mandatory upon them;
          (2) provide for financial participation by the State 
        equal to not less than 40 per centum of the non-Federal 
        share of the expenditures under the plan with respect 
        to which payments under section 1903 are authorized by 
        this title; and, effective July 1, 1969, provide for 
        financial participation by the State equal to all of 
        such non-Federal share or provide for distribution of 
        funds from Federal or State sources, for carrying out 
        the State plan, on an equalization or other basis which 
        will assure that the lack of adequate funds from local 
        sources will not result in lowering the amount, 
        duration, scope, or quality of care and services 
        available under the plan;
          (3) provide for granting an opportunity for a fair 
        hearing before the State agency to any individual whose 
        claim for medical assistance under the plan is denied 
        or is not acted upon with reasonable promptness;
          (4) provide (A) such methods of administration 
        (including methods relating to the establishment and 
        maintenance of personnel standards on a merit basis, 
        except that the Secretary shall exercise no authority 
        with respect to the selection, tenure of office, and 
        compensation of any individual employed in accordance 
        with such methods, including provision for utilization 
        of professional medical personnel in the administration 
        and, where administered locally, supervision of 
        administration of the plan, and, subject to section 
        1903(i), including a specification that the single 
        State agency described in paragraph (5) will ensure 
        necessary transportation for beneficiaries under the 
        State plan to and from providers and a description of 
        the methods that such agency will use to ensure such 
        transportation) as are found by the Secretary to be 
        necessary for the proper and efficient operation of the 
        plan, (B) for the training and effective use of paid 
        subprofessional staff, with particular emphasis on the 
        full-time or part-time employment of recipients and 
        other persons of low income, as community service 
        aides, in the administration of the plan and for the 
        use of nonpaid or partially paid volunteers in a social 
        service volunteer program in providing services to 
        applicants and recipients and in assisting any advisory 
        committees established by the State agency, (C) that 
        each State or local officer, employee, or independent 
        contractor who is responsible for the expenditure of 
        substantial amounts of funds under the State plan, each 
        individual who formerly was such an officer, employee, 
        or contractor, and each partner of such an officer, 
        employee, or contractor shall be prohibited from 
        committing any act, in relation to any activity under 
        the plan, the commission of which, in connection with 
        any activity concerning the United States Government, 
        by an officer or employee of the United States 
        Government, an individual who was such an officer or 
        employee, or a partner of such an officer or employee 
        is prohibited by section 207 or 208 of title 18, United 
        States Code, and (D) that each State or local officer, 
        employee, or independent contractor who is responsible 
        for selecting, awarding, or otherwise obtaining items 
        and services under the State plan shall be subject to 
        safeguards against conflicts of interest that are at 
        least as stringent as the safeguards that apply under 
        section 27 of the Office of Federal Procurement Policy 
        Act (41 U.S.C. 423) to persons described in subsection 
        (a)(2) of such section of that Act;
          (5) either provide for the establishment or 
        designation of a single State agency to administer or 
        to supervise the administration of the plan; or provide 
        for the establishment or designation of a single State 
        agency to administer or to supervise the administration 
        of the plan, except that the determination of 
        eligibility for medical assistance under the plan shall 
        be made by the State or local agency administering the 
        State plan approved under title I or XVI (insofar as it 
        relates to the aged) if the State is eligible to 
        participate in the State plan program established under 
        title XVI, or by the agency or agencies administering 
        the supplemental security income program established 
        under title XVI or the State plan approved under part A 
        of title IV if the State is not eligible to participate 
        in the State plan program established under title XVI;
          (6) provide that the State agency will make such 
        reports, in such form and containing such information, 
        as the Secretary may from time to time require, and 
        comply with such provisions as the Secretary may from 
        time to time find necessary to assure the correctness 
        and verification of such reports;
          (7) provide--
                  (A) safeguards which restrict the use or 
                disclosure of information concerning applicants 
                and recipients to purposes directly connected 
                with--
                          (i) the administration of the plan; 
                        and
                          (ii) the exchange of information 
                        necessary to certify or verify the 
                        certification of eligibility of 
                        children for free or reduced price 
                        breakfasts under the Child Nutrition 
                        Act of 1966 and free or reduced price 
                        lunches under the Richard B. Russell 
                        National School Lunch Act, in 
                        accordance with section 9(b) of that 
                        Act, using data standards and formats 
                        established by the State agency; and
                  (B) that, notwithstanding the Express Lane 
                option under subsection (e)(13), the State may 
                enter into an agreement with the State agency 
                administering the school lunch program 
                established under the Richard B. Russell 
                National School Lunch Act under which the State 
                shall establish procedures to ensure that--
                          (i) a child receiving medical 
                        assistance under the State plan under 
                        this title whose family income does not 
                        exceed 133 percent of the poverty line 
                        (as defined in section 673(2) of the 
                        Community Services Block Grant Act, 
                        including any revision required by such 
                        section), as determined without regard 
                        to any expense, block, or other income 
                        disregard, applicable to a family of 
                        the size involved, may be certified as 
                        eligible for free lunches under the 
                        Richard B. Russell National School 
                        Lunch Act and free breakfasts under the 
                        Child Nutrition Act of 1966 without 
                        further application; and
                          (ii) the State agencies responsible 
                        for administering the State plan under 
                        this title, and for carrying out the 
                        school lunch program established under 
                        the Richard B. Russell National School 
                        Lunch Act (42 U.S.C. 1751 et seq.) or 
                        the school breakfast program 
                        established by section 4 of the Child 
                        Nutrition Act of 1966 (42 U.S.C. 1773), 
                        cooperate in carrying out paragraphs 
                        (3)(F) and (15) of section 9(b) of that 
                        Act;
          (8) provide that all individuals wishing to make 
        application for medical assistance under the plan shall 
        have opportunity to do so, and that such assistance 
        shall be furnished with reasonable promptness to all 
        eligible individuals;
          (9) provide--
                  (A) that the State health agency, or other 
                appropriate State medical agency (whichever is 
                utilized by the Secretary for the purpose 
                specified in the first sentence of section 
                1864(a)), shall be responsible for establishing 
                and maintaining health standards for private or 
                public institutions in which recipients of 
                medical assistance under the plan may receive 
                care or services,
                  (B) for the establishment or designation of a 
                State authority or authorities which shall be 
                responsible for establishing and maintaining 
                standards, other than those relating to health, 
                for such institutions,
                  (C) that any laboratory services paid for 
                under such plan must be provided by a 
                laboratory which meets the applicable 
                requirements of section 1861(e)(9) or 
                paragraphs (16) and (17) of section 1861(s), 
                or, in the case of a laboratory which is in a 
                rural health clinic, of section 1861(aa)(2)(G), 
                and
                  (D) that the State maintain a consumer-
                oriented website providing useful information 
                to consumers regarding all skilled nursing 
                facilities and all nursing facilities in the 
                State, including for each facility, Form 2567 
                State inspection reports (or a successor form), 
                complaint investigation reports, the facility's 
                plan of correction, and such other information 
                that the State or the Secretary considers 
                useful in assisting the public to assess the 
                quality of long term care options and the 
                quality of care provided by individual 
                facilities;
          (10) provide--
                   (A) for making medical assistance available, 
                including at least the care and services listed 
                in paragraphs (1) through (5), (13)(B), (17), 
                (21), (28), (29), and (30) of section 1905(a), 
                to--
                          (i) all individuals--
                                  (I) who are receiving aid or 
                                assistance under any plan of 
                                the State approved under title 
                                I, X, XIV, or XVI, or part A or 
                                part E of title IV (including 
                                individuals eligible under this 
                                title by reason of section 
                                402(a)(37), 406(h), or 473(b), 
                                or considered by the State to 
                                be receiving such aid as 
                                authorized under section 
                                482(e)(6)),
                                  (II)(aa) with respect to whom 
                                supplemental security income 
                                benefits are being paid under 
                                title XVI (or were being paid 
                                as of the date of the enactment 
                                of section 211(a) of the 
                                Personal Responsibility and 
                                Work Opportunity Reconciliation 
                                Act of 1996 (P.L. 104-193) and 
                                would continue to be paid but 
                                for the enactment of that 
                                section), (bb) who are 
                                qualified severely impaired 
                                individuals (as defined in 
                                section 1905(q)), or (cc) who 
                                are under 21 years of age and 
                                with respect to whom 
                                supplemental security income 
                                benefits would be paid under 
                                title XVI if subparagraphs (A) 
                                and (B) of section 1611(c)(7) 
                                were applied without regard to 
                                the phrase ``the first day of 
                                the month following'',
                                  (III) who are qualified 
                                pregnant women or children as 
                                defined in section 1905(n),
                                  (IV) who are described in 
                                subparagraph (A) or (B) of 
                                subsection (l)(1) and whose 
                                family income does not exceed 
                                the minimum income level the 
                                State is required to establish 
                                under subsection (l)(2)(A) for 
                                such a family;
                                  (V) who are qualified family 
                                members as defined in section 
                                1905(m)(1),
                                  (VI) who are described in 
                                subparagraph (C) of subsection 
                                (l)(1) and whose family income 
                                does not exceed the income 
                                level the State is required to 
                                establish under subsection 
                                (l)(2)(B) for such a family,
                                  (VII) who are described in 
                                subparagraph (D) of subsection 
                                (l)(1) and whose family income 
                                does not exceed the income 
                                level the State is required to 
                                establish under subsection 
                                (l)(2)(C) for such a family;
                                  (VIII) beginning January 1, 
                                2014, who are under 65 years of 
                                age, not pregnant, not entitled 
                                to, or enrolled for, benefits 
                                under part A of title XVIII, or 
                                enrolled for benefits under 
                                part B of title XVIII, and are 
                                not described in a previous 
                                subclause of this clause, and 
                                whose income (as determined 
                                under subsection (e)(14)) does 
                                not exceed 133 percent of the 
                                poverty line (as defined in 
                                section 2110(c)(5)) applicable 
                                to a family of the size 
                                involved, subject to subsection 
                                (k); or
                                  (IX) who--
                                          (aa) are under 26 
                                        years of age;
                                          (bb) are not 
                                        described in and are 
                                        not enrolled under any 
                                        of subclauses (I) 
                                        through (VII) of this 
                                        clause or are described 
                                        in any of such 
                                        subclauses but have 
                                        income that exceeds the 
                                        level of income 
                                        applicable under the 
                                        State plan for 
                                        eligibility to enroll 
                                        for medical assistance 
                                        under such subclause;
                                          (cc) were in foster 
                                        care under the 
                                        responsibility of a 
                                        State on the date of 
                                        attaining 18 years of 
                                        age or such higher age 
                                        as the State has 
                                        elected under section 
                                        475(8)(B)(iii); and
                                          (dd) were enrolled in 
                                        a State plan under this 
                                        title or under a waiver 
                                        of such a plan while in 
                                        such foster care;
                          (ii) at the option of the State, to 
                        any group or groups of individuals 
                        described in section 1905(a) (or, in 
                        the case of individuals described in 
                        section 1905(a)(i), to any reasonable 
                        categories of such individuals) who are 
                        not individuals described in clause (i) 
                        of this subparagraph but--
                                  (I) who meet the income and 
                                resources requirements of the 
                                appropriate State plan 
                                described in clause (i) or the 
                                supplemental security income 
                                program (as the case may be),
                                  (II) who would meet the 
                                income and resources 
                                requirements of the appropriate 
                                State plan described in clause 
                                (i) if their work-related child 
                                care costs were paid from their 
                                earnings rather than by a State 
                                agency as a service 
                                expenditure,
                                  (III) who would be eligible 
                                to receive aid under the 
                                appropriate State plan 
                                described in clause (i) if 
                                coverage under such plan was as 
                                broad as allowed under Federal 
                                law,
                                  (IV) with respect to whom 
                                there is being paid, or who are 
                                eligible, or would be eligible 
                                if they were not in a medical 
                                institution, to have paid with 
                                respect to them, aid or 
                                assistance under the 
                                appropriate State plan 
                                described in clause (i), 
                                supplemental security income 
                                benefits under title XVI, or a 
                                State supplementary payment;
                                  (V) who are in a medical 
                                institution for a period of not 
                                less than 30 consecutive days 
                                (with eligibility by reason of 
                                this subclause beginning on the 
                                first day of such period), who 
                                meet the resource requirements 
                                of the appropriate State plan 
                                described in clause (i) or the 
                                supplemental security income 
                                program, and whose income does 
                                not exceed a separate income 
                                standard established by the 
                                State which is consistent with 
                                the limit established under 
                                section 1903(f)(4)(C),
                                  (VI) who would be eligible 
                                under the State plan under this 
                                title if they were in a medical 
                                institution, with respect to 
                                whom there has been a 
                                determination that but for the 
                                provision of home or community-
                                based services described in 
                                subsection (c), (d), or (e) of 
                                section 1915 they would require 
                                the level of care provided in a 
                                hospital, nursing facility or 
                                intermediate care facility for 
                                the mentally retarded the cost 
                                of which could be reimbursed 
                                under the State plan, and who 
                                will receive home or community-
                                based services pursuant to a 
                                waiver granted by the Secretary 
                                under subsection (c), (d), or 
                                (e) of section 1915,
                                  (VII) who would be eligible 
                                under the State plan under this 
                                title if they were in a medical 
                                institution, who are terminally 
                                ill, and who will receive 
                                hospice care pursuant to a 
                                voluntary election described in 
                                section 1905(o);
                                  (VIII) who is a child 
                                described in section 
                                1905(a)(i)--
                                          (aa) for whom there 
                                        is in effect an 
                                        adoption assistance 
                                        agreement (other than 
                                        an agreement under part 
                                        E of title IV) between 
                                        the State and an 
                                        adoptive parent or 
                                        parents,
                                          (bb) who the State 
                                        agency responsible for 
                                        adoption assistance has 
                                        determined cannot be 
                                        placed with adoptive 
                                        parents without medical 
                                        assistance because such 
                                        child has special needs 
                                        for medical or 
                                        rehabilitative care, 
                                        and
                                          (cc) who was eligible 
                                        for medical assistance 
                                        under the State plan 
                                        prior to the adoption 
                                        assistance agreement 
                                        being entered into, or 
                                        who would have been 
                                        eligible for medical 
                                        assistance at such time 
                                        if the eligibility 
                                        standards and 
                                        methodologies of the 
                                        State's foster care 
                                        program under part E of 
                                        title IV were applied 
                                        rather than the 
                                        eligibility standards 
                                        and methodologies of 
                                        the State's aid to 
                                        families with dependent 
                                        children program under 
                                        part A of title IV;
                                  (IX) who are described in 
                                subsection (l)(1) and are not 
                                described in clause (i)(IV), 
                                clause (i)(VI), or clause 
                                (i)(VII);
                                  (X) who are described in 
                                subsection (m)(1);
                                  (XI) who receive only an 
                                optional State supplementary 
                                payment based on need and paid 
                                on a regular basis, equal to 
                                the difference between the 
                                individual's countable income 
                                and the income standard used to 
                                determine eligibility for such 
                                supplementary payment (with 
                                countable income being the 
                                income remaining after 
                                deductions as established by 
                                the State pursuant to standards 
                                that may be more restrictive 
                                than the standards for 
                                supplementary security income 
                                benefits under title XVI), 
                                which are available to all 
                                individuals in the State (but 
                                which may be based on different 
                                income standards by political 
                                subdivision according to cost 
                                of living differences), and 
                                which are paid by a State that 
                                does not have an agreement with 
                                the Commissioner of Social 
                                Security under section 1616 or 
                                1634;
                                  (XII) who are described in 
                                subsection (z)(1) (relating to 
                                certain TB-infected 
                                individuals);
                                  (XIII) who are in families 
                                whose income is less than 250 
                                percent of the income official 
                                poverty line (as defined by the 
                                Office of Management and 
                                Budget, and revised annually in 
                                accordance with section 673(2) 
                                of the Omnibus Budget 
                                Reconciliation Act of 1981) 
                                applicable to a family of the 
                                size involved, and who but for 
                                earnings in excess of the limit 
                                established under section 
                                1905(q)(2)(B), would be 
                                considered to be receiving 
                                supplemental security income 
                                (subject, notwithstanding 
                                section 1916, to payment of 
                                premiums or other cost-sharing 
                                charges (set on a sliding scale 
                                based on income) that the State 
                                may determine);
                                  (XIV) who are optional 
                                targeted low-income children 
                                described in section 
                                1905(u)(2)(B);
                                  (XV) who, but for earnings in 
                                excess of the limit established 
                                under section 1905(q)(2)(B), 
                                would be considered to be 
                                receiving supplemental security 
                                income, who is at least 16, but 
                                less than 65, years of age, and 
                                whose assets, resources, and 
                                earned or unearned income (or 
                                both) do not exceed such 
                                limitations (if any) as the 
                                State may establish;
                                  (XVI) who are employed 
                                individuals with a medically 
                                improved disability described 
                                in section 1905(v)(1) and whose 
                                assets, resources, and earned 
                                or unearned income (or both) do 
                                not exceed such limitations (if 
                                any) as the State may 
                                establish, but only if the 
                                State provides medical 
                                assistance to individuals 
                                described in subclause (XV);
                                  (XVII) who are independent 
                                foster care adolescents (as 
                                defined in section 1905(w)(1)), 
                                or who are within any 
                                reasonable categories of such 
                                adolescents specified by the 
                                State;
                                  (XVIII) who are described in 
                                subsection (aa) (relating to 
                                certain breast or cervical 
                                cancer patients);
                                  (XIX) who are disabled 
                                children described in 
                                subsection (cc)(1);
                                  (XX) beginning January 1, 
                                2014, who are under 65 years of 
                                age and are not described in or 
                                enrolled under a previous 
                                subclause of this clause, and 
                                whose income (as determined 
                                under subsection (e)(14)) 
                                exceeds 133 percent of the 
                                poverty line (as defined in 
                                section 2110(c)(5)) applicable 
                                to a family of the size 
                                involved but does not exceed 
                                the highest income eligibility 
                                level established under the 
                                State plan or under a waiver of 
                                the plan, subject to subsection 
                                (hh);
                                  (XXI) who are described in 
                                subsection (ii) (relating to 
                                individuals who meet certain 
                                income standards);
                                  (XXII) who are eligible for 
                                home and community-based 
                                services under needs-based 
                                criteria established under 
                                paragraph (1)(A) of section 
                                1915(i), or who are eligible 
                                for home and community-based 
                                services under paragraph (6) of 
                                such section, and who will 
                                receive home and community-
                                based services pursuant to a 
                                State plan amendment under such 
                                subsection; or
                                  (XXIII) during any portion of 
                                the emergency period defined in 
                                paragraph (1)(B) of section 
                                1135(g) beginning on or after 
                                the date of the enactment of 
                                this subclause, who are 
                                uninsured individuals (as 
                                defined in subsection (ss));
                  (B) that the medical assistance made 
                available to any individual described in 
                subparagraph (A)--
                          (i) shall not be less in amount, 
                        duration, or scope than the medical 
                        assistance made available to any other 
                        such individual, and
                          (ii) shall not be less in amount, 
                        duration, or scope than the medical 
                        assistance made available to 
                        individuals not described in 
                        subparagraph (A);
                  (C) that if medical assistance is included 
                for any group of individuals described in 
                section 1905(a) who are not described in 
                subparagraph (A) or (E), then--
                          (i) the plan must include a 
                        description of (I) the criteria for 
                        determining eligibility of individuals 
                        in the group for such medical 
                        assistance, (II) the amount, duration, 
                        and scope of medical assistance made 
                        available to individuals in the group, 
                        and (III) the single standard to be 
                        employed in determining income and 
                        resource eligibility for all such 
                        groups, and the methodology to be 
                        employed in determining such 
                        eligibility, which shall be no more 
                        restrictive than the methodology which 
                        would be employed under the 
                        supplemental security income program in 
                        the case of groups consisting of aged, 
                        blind, or disabled individuals in a 
                        State in which such program is in 
                        effect, and which shall be no more 
                        restrictive than the methodology which 
                        would be employed under the appropriate 
                        State plan (described in subparagraph 
                        (A)(i)) to which such group is most 
                        closely categorically related in the 
                        case of other groups;
                          (ii) the plan must make available 
                        medical assistance--
                                  (I) to individuals under the 
                                age of 18 who (but for income 
                                and resources) would be 
                                eligible for medical assistance 
                                as an individual described in 
                                subparagraph (A)(i), and
                                  (II) to pregnant women, 
                                during the course of their 
                                pregnancy, who (but for income 
                                and resources) would be 
                                eligible for medical assistance 
                                as an individual described in 
                                subparagraph (A);
                          (iii) such medical assistance must 
                        include (I) with respect to children 
                        under 18 and individuals entitled to 
                        institutional services, ambulatory 
                        services, and (II) with respect to 
                        pregnant women, prenatal care and 
                        delivery services; and
                          (iv) if such medical assistance 
                        includes services in institutions for 
                        mental diseases or in an intermediate 
                        care facility for the mentally retarded 
                        (or both) for any such group, it also 
                        must include for all groups covered at 
                        least the care and services listed in 
                        paragraphs (1) through (5), (13)(B), 
                        and (17) of section 1905(a) or the care 
                        and services listed in any 7 of the 
                        paragraphs numbered (1) through (24) of 
                        such section;
                  (D) for the inclusion of home health services 
                for any individual who, under the State plan, 
                is entitled to nursing facility services;
                  (E)(i) for making medical assistance 
                available for medicare cost-sharing (as defined 
                in section 1905(p)(3)) for qualified medicare 
                beneficiaries described in section 1905(p)(1);
                  (ii) for making medical assistance available 
                for payment of medicare cost-sharing described 
                in section 1905(p)(3)(A)(i) for qualified 
                disabled and working individuals described in 
                section 1905(s);
                  (iii) for making medical assistance available 
                for medicare cost sharing described in section 
                1905(p)(3)(A)(ii) subject to section 
                1905(p)(4), for individuals who would be 
                qualified medicare beneficiaries described in 
                section 1905(p)(1) (including such individuals 
                enrolled under section 1836(b)) but for the 
                fact that their income exceeds the income level 
                established by the State under section 
                1905(p)(2) but is less than 110 percent in 1993 
                and 1994, and 120 percent in 1995 and years 
                thereafter of the official poverty line 
                (referred to in such section) for a family of 
                the size involved; and
                  (iv) subject to sections 1933 and 1905(p)(4), 
                for making medical assistance available for 
                medicare cost-sharing described in section 
                1905(p)(3)(A)(ii) for individuals who would be 
                qualified medicare beneficiaries described in 
                section 1905(p)(1) (including such individuals 
                enrolled under section 1836(b)) but for the 
                fact that their income exceeds the income level 
                established by the State under section 
                1905(p)(2) and is at least 120 percent, but 
                less than 135 percent, of the official poverty 
                line (referred to in such section) for a family 
                of the size involved and who are not otherwise 
                eligible for medical assistance under the State 
                plan;
                  (F) at the option of a State, for making 
                medical assistance available for COBRA premiums 
                (as defined in subsection (u)(2)) for qualified 
                COBRA continuation beneficiaries described in 
                section 1902(u)(1); and
                  (G) that, in applying eligibility criteria of 
                the supplemental security income program under 
                title XVI for purposes of determining 
                eligibility for medical assistance under the 
                State plan of an individual who is not 
                receiving supplemental security income, the 
                State will disregard the provisions of 
                subsections (c) and (e) of section 1613;
        except that (I) the making available of the services 
        described in paragraph (4), (14), or (16) of section 
        1905(a) to individuals meeting the age requirements 
        prescribed therein shall not, by reason of this 
        paragraph (10), require the making available of any 
        such services, or the making available of such services 
        of the same amount, duration, and scope, to individuals 
        of any other ages, (II) the making available of 
        supplementary medical insurance benefits under part B 
        of title XVIII to individuals eligible therefor (either 
        pursuant to an agreement entered into under section 
        1843 or by reason of the payment of premiums under such 
        title by the State agency on behalf of such 
        individuals), or provision for meeting part or all of 
        the cost of deductibles, cost sharing, or similar 
        charges under part B of title XVIII for individuals 
        eligible for benefits under such part, shall not, by 
        reason of this paragraph (10), require the making 
        available of any such benefits, or the making available 
        of services of the same amount, duration, and scope, to 
        any other individuals, (III) the making available of 
        medical assistance equal in amount, duration, and scope 
        to the medical assistance made available to individuals 
        described in clause (A) to any classification of 
        individuals approved by the Secretary with respect to 
        whom there is being paid, or who are eligible, or would 
        be eligible if they were not in a medical institution, 
        to have paid with respect to them, a State 
        supplementary payment shall not, by reason of this 
        paragraph (10), require the making available of any 
        such assistance, or the making available of such 
        assistance of the same amount, duration, and scope, to 
        any other individuals not described in clause (A), (IV) 
        the imposition of a deductible, cost sharing, or 
        similar charge for any item or service furnished to an 
        individual not eligible for the exemption under section 
        1916(a)(2) or (b)(2) shall not require the imposition 
        of a deductible, cost sharing, or similar charge for 
        the same item or service furnished to an individual who 
        is eligible for such exemption, (V) the making 
        available to pregnant women covered under the plan of 
        services relating to pregnancy (including prenatal, 
        delivery, and postpartum services) or to any other 
        condition which may complicate pregnancy shall not, by 
        reason of this paragraph (10), require the making 
        available of such services, or the making available of 
        such services of the same amount, duration, and scope, 
        to any other individuals, provided such services are 
        made available (in the same amount, duration, and 
        scope) to all pregnant women covered under the State 
        plan, (VI) with respect to the making available of 
        medical assistance for hospice care to terminally ill 
        individuals who have made a voluntary election 
        described in section 1905(o) to receive hospice care 
        instead of medical assistance for certain other 
        services, such assistance may not be made available in 
        an amount, duration, or scope less than that provided 
        under title XVIII, and the making available of such 
        assistance shall not, by reason of this paragraph (10), 
        require the making available of medical assistance for 
        hospice care to other individuals or the making 
        available of medical assistance for services waived by 
        such terminally ill individuals, (VII) the medical 
        assistance made available to an individual described in 
        subsection (l)(1)(A) who is eligible for medical 
        assistance only because of subparagraph (A)(i)(IV) or 
        (A)(ii)(IX) shall be limited to medical assistance for 
        services related to pregnancy (including prenatal, 
        delivery, postpartum, and family planning services), 
        medical assistance for services related to other 
        conditions which may complicate pregnancy, and medical 
        assistance for vaccines described in section 
        1905(a)(4)(E) and the administration of such vaccines 
        during the period described in such section, (VIII) the 
        medical assistance made available to a qualified 
        medicare beneficiary described in section 1905(p)(1) 
        who is only entitled to medical assistance because the 
        individual is such a beneficiary shall be limited to 
        medical assistance for medicare cost-sharing (described 
        in section 1905(p)(3)), subject to the provisions of 
        subsection (n) and section 1916(b), (IX) the making 
        available of respiratory care services in accordance 
        with subsection (e)(9) shall not, by reason of this 
        paragraph (10), require the making available of such 
        services, or the making available of such services of 
        the same amount, duration, and scope, to any 
        individuals not included under subsection (e)(9)(A), 
        provided such services are made available (in the same 
        amount, duration, and scope) to all individuals 
        described in such subsection, (X) if the plan provides 
        for any fixed durational limit on medical assistance 
        for inpatient hospital services (whether or not such a 
        limit varies by medical condition or diagnosis), the 
        plan must establish exceptions to such a limit for 
        medically necessary inpatient hospital services 
        furnished with respect to individuals under one year of 
        age in a hospital defined under the State plan, 
        pursuant to section 1923(a)(1)(A), as a 
        disproportionate share hospital and subparagraph (B) 
        (relating to comparability) shall not be construed as 
        requiring such an exception for other individuals, 
        services, or hospitals, (XI) the making available of 
        medical assistance to cover the costs of premiums, 
        deductibles, coinsurance, and other cost-sharing 
        obligations for certain individuals for private health 
        coverage as described in section 1906 shall not, by 
        reason of paragraph (10), require the making available 
        of any such benefits or the making available of 
        services of the same amount, duration, and scope of 
        such private coverage to any other individuals, (XII) 
        the medical assistance made available to an individual 
        described in subsection (u)(1) who is eligible for 
        medical assistance only because of subparagraph (F) 
        shall be limited to medical assistance for COBRA 
        continuation premiums (as defined in subsection 
        (u)(2)), (XIII) the medical assistance made available 
        to an individual described in subsection (z)(1) who is 
        eligible for medical assistance only because of 
        subparagraph (A)(ii)(XII) shall be limited to medical 
        assistance for TB-related services (described in 
        subsection (z)(2)) and medical assistance for vaccines 
        described in section 1905(a)(4)(E) and the 
        administration of such vaccines during the period 
        described in such section, (XIV) the medical assistance 
        made available to an individual described in subsection 
        (aa) who is eligible for medical assistance only 
        because of subparagraph (A)(10)(ii)(XVIII) shall be 
        limited to medical assistance provided during the 
        period in which such an individual requires treatment 
        for breast or cervical cancer (XV) the medical 
        assistance made available to an individual described in 
        subparagraph (A)(i)(VIII) shall be limited to medical 
        assistance described in subsection (k)(1) and medical 
        assistance for vaccines described in section 
        1905(a)(4)(E) and the administration of such vaccines 
        during the period described in such section, (XVI) the 
        medical assistance made available to an individual 
        described in subsection (ii) shall be limited to family 
        planning services and supplies described in section 
        1905(a)(4)(C) including medical diagnosis and treatment 
        services that are provided pursuant to a family 
        planning service in a family planning setting and 
        medical assistance for vaccines described in section 
        1905(a)(4)(E) and the administration of such vaccines 
        during the period described in such section, (XVII) if 
        an individual is described in subclause (IX) of 
        subparagraph (A)(i) and is also described in subclause 
        (VIII) of that subparagraph, the medical assistance 
        shall be made available to the individual through 
        subclause (IX) instead of through subclause (VIII), and 
        (XVIII) the medical assistance made available to an 
        uninsured individual (as defined in subsection (ss)) 
        who is eligible for medical assistance only because of 
        subparagraph (A)(ii)(XXIII) shall be limited to medical 
        assistance for any in vitro diagnostic product 
        described in section 1905(a)(3)(B) that is administered 
        during any portion of the period at the end of the 
        emergency sentence described in such section beginning 
        on or after the date of the enactment of this subclause 
        (and the administration of such product), any service 
        described in section 1916(a)(2)(G) that is furnished 
        during any such portion, any vaccine described in 
        section 1905(a)(4)(E) (and the administration of such 
        vaccine) that is furnished during any such portion, and 
        testing and treatments for COVID-19, including 
        specialized equipment and therapies (including 
        preventive therapies), and, in the case of an 
        individual who is diagnosed with or presumed to have 
        COVID-19, during the period such individual has (or is 
        presumed to have) COVID-19, the treatment of a 
        condition that may seriously complicate the treatment 
        of COVID-19, if otherwise covered under the State plan 
        (or waiver of such plan), and (XIX) medical assistance 
        shall be made available during the period described in 
        section 1905(a)(4)(E) for vaccines described in such 
        section and the administration of such vaccines, for 
        any individual who is eligible for and receiving 
        medical assistance under the State plan or under a 
        waiver of such plan (other than an individual who is 
        eligible for medical assistance consisting only of 
        payment of premiums pursuant to subparagraph (E) or (F) 
        or section 1933), notwithstanding any provision of this 
        title or waiver under section 1115 impacting such 
        individual's eligibility for medical assistance under 
        such plan or waiver to coverage for a limited type of 
        benefits and services that would not otherwise include 
        coverage of a COVID-19 vaccine and its administration;
          (11)(A) provide for entering into cooperative 
        arrangements with the State agencies responsible for 
        administering or supervising the administration of 
        health services and vocational rehabilitation services 
        in the State looking toward maximum utilization of such 
        services in the provision of medical assistance under 
        the plan, (B) provide, to the extent prescribed by the 
        Secretary, for entering into agreements, with any 
        agency, institution, or organization receiving payments 
        under (or through an allotment under) title V, (i) 
        providing for utilizing such agency, institution, or 
        organization in furnishing care and services which are 
        available under such title or allotment and which are 
        included in the State plan approved under this section 
        (ii) making such provision as may be appropriate for 
        reimbursing such agency, institution, or organization 
        for the cost of any such care and services furnished 
        any individual for which payment would otherwise be 
        made to the State with respect to the individual under 
        section 1903, and (iii) providing for coordination of 
        information and education on pediatric vaccinations and 
        delivery of immunization services, and (C) provide for 
        coordination of the operations under this title, 
        including the provision of information and education on 
        pediatric vaccinations and the delivery of immunization 
        services, with the State's operations under the special 
        supplemental nutrition program for women, infants, and 
        children under section 17 of the Child Nutrition Act of 
        1966;
          (12) provide that, in determining whether an 
        individual is blind, there shall be an examination by a 
        physician skilled in the diseases of the eye or by an 
        optometrist, whichever the individual may select;
          (13) provide--
                  (A) for a public process for determination of 
                rates of payment under the plan for hospital 
                services, nursing facility services, and 
                services of intermediate care facilities for 
                the mentally retarded under which--
                          (i) proposed rates, the methodologies 
                        underlying the establishment of such 
                        rates, and justifications for the 
                        proposed rates are published,
                          (ii) providers, beneficiaries and 
                        their representatives, and other 
                        concerned State residents are given a 
                        reasonable opportunity for review and 
                        comment on the proposed rates, 
                        methodologies, and justifications,
                          (iii) final rates, the methodologies 
                        underlying the establishment of such 
                        rates, and justifications for such 
                        final rates are published, and
                          (iv) in the case of hospitals, such 
                        rates take into account (in a manner 
                        consistent with section 1923) the 
                        situation of hospitals which serve a 
                        disproportionate number of low-income 
                        patients with special needs;
                  (B) for payment for hospice care in amounts 
                no lower than the amounts, using the same 
                methodology, used under part A of title XVIII 
                and for payment of amounts under section 
                1905(o)(3); except that in the case of hospice 
                care which is furnished to an individual who is 
                a resident of a nursing facility or 
                intermediate care facility for the mentally 
                retarded, and who would be eligible under the 
                plan for nursing facility services or services 
                in an intermediate care facility for the 
                mentally retarded if he had not elected to 
                receive hospice care, there shall be paid an 
                additional amount, to take into account the 
                room and board furnished by the facility, equal 
                to at least 95 percent of the rate that would 
                have been paid by the State under the plan for 
                facility services in that facility for that 
                individual; and
                  (C) payment for primary care services (as 
                defined in subsection (jj)) furnished in 2013 
                and 2014 by a physician with a primary 
                specialty designation of family medicine, 
                general internal medicine, or pediatric 
                medicine at a rate not less than 100 percent of 
                the payment rate that applies to such services 
                and physician under part B of title XVIII (or, 
                if greater, the payment rate that would be 
                applicable under such part if the conversion 
                factor under section 1848(d) for the year 
                involved were the conversion factor under such 
                section for 2009);
          (14) provide that enrollment fees, premiums, or 
        similar charges, and deductions, cost sharing, or 
        similar charges, may be imposed only as provided in 
        section 1916;
          (15) provide for payment for services described in 
        clause (B) or (C) of section 1905(a)(2) under the plan 
        in accordance with subsection (bb);
          (16) provide for inclusion, to the extent required by 
        regulations prescribed by the Secretary, of provisions 
        (conforming to such regulations) with respect to the 
        furnishing of medical assistance under the plan to 
        individuals who are residents of the State but are 
        absent therefrom;
          (17) except as provided in subsections (e)(14), 
        (e)(15), (l)(3), (m)(3), and (m)(4), include reasonable 
        standards (which shall be comparable for all groups and 
        may, in accordance with standards prescribed by the 
        Secretary, differ with respect to income levels, but 
        only in the case of applicants or recipients of 
        assistance under the plan who are not receiving aid or 
        assistance under any plan of the State approved under 
        title I, X, XIV, or XVI, or part A of title IV, and 
        with respect to whom supplemental security income 
        benefits are not being paid under title XVI, based on 
        the variations between shelter costs in urban areas and 
        in rural areas) for determining eligibility for and the 
        extent of medical assistance under the plan which (A) 
        are consistent with the objectives of this title, (B) 
        provide for taking into account only such income and 
        resources as are, as determined in accordance with 
        standards prescribed by the Secretary, available to the 
        applicant or recipient and (in the case of any 
        applicant or recipient who would, except for income and 
        resources, be eligible for aid or assistance in the 
        form of money payments under any plan of the State 
        approved under title I, X, XIV, or XVI, or part A of 
        title IV, or to have paid with respect to him 
        supplemental security income benefits under title XVI) 
        as would not be disregarded (or set aside for future 
        needs) in determining his eligibility for such aid, 
        assistance, or benefits, (C) provide for reasonable 
        evaluation of any such income or resources, and (D) do 
        not take into account the financial responsibility of 
        any individual for any applicant or recipient of 
        assistance under the plan unless such applicant or 
        recipient is such individual's spouse or such 
        individual's child who is under age 21 or (with respect 
        to States eligible to participate in the State program 
        established under title XVI), is blind or permanently 
        and totally disabled, or is blind or disabled as 
        defined in section 1614 (with respect to States which 
        are not eligible to participate in such program); and 
        provide for flexibility in the application of such 
        standards with respect to income by taking into 
        account, except to the extent prescribed by the 
        Secretary, the costs (whether in the form of insurance 
        premiums, payments made to the State under section 
        1903(f)(2)(B), or otherwise and regardless of whether 
        such costs are reimbursed under another public program 
        of the State or political subdivision thereof) incurred 
        for medical care or for any other type of remedial care 
        recognized under State law;
          (18) comply with the provisions of section 1917 with 
        respect to liens, adjustments and recoveries of medical 
        assistance correctly paid, transfers of assets, and 
        treatment of certain trusts;
          (19) provide such safeguards as may be necessary to 
        assure that eligibility for care and services under the 
        plan will be determined, and such care and services 
        will be provided, in a manner consistent with 
        simplicity of administration and the best interests of 
        the recipients;
          (20) if the State plan includes medical assistance in 
        behalf of individuals 65 years of age or older who are 
        patients in institutions for mental diseases--
                  (A) provide for having in effect such 
                agreements or other arrangements with State 
                authorities concerned with mental diseases, 
                and, where appropriate, with such institutions, 
                as may be necessary for carrying out the State 
                plan, including arrangements for joint planning 
                and for development of alternate methods of 
                care, arrangements providing assurance of 
                immediate readmittance to institutions where 
                needed for individuals under alternate plans of 
                care, and arrangements providing for access to 
                patients and facilities, for furnishing 
                information, and for making reports;
                  (B) provide for an individual plan for each 
                such patient to assure that the institutional 
                care provided to him is in his best interests, 
                including, to that end, assurances that there 
                will be initial and periodic review of his 
                medical and other needs, that he will be given 
                appropriate medical treatment within the 
                institution, and that there will be a periodic 
                determination of his need for continued 
                treatment in the institution; and
                  (C) provide for the development of alternate 
                plans of care, making maximum utilization of 
                available resources, for recipients 65 years of 
                age or older who would otherwise need care in 
                such institutions, including appropriate 
                medical treatment and other aid or assistance; 
                for services referred to in section 
                3(a)(4)(A)(i) and (ii) or section 
                1603(a)(4)(A)(i) and (ii) which are appropriate 
                for such recipients and for such patients; and 
                for methods of administration necessary to 
                assure that the responsibilities of the State 
                agency under the State plan with respect to 
                such recipients and such patients will be 
                effectively carried out;
          (21) if the State plan includes medical assistance in 
        behalf of individuals 65 years of age or older who are 
        patients in public institutions for mental diseases, 
        show that the State is making satisfactory progress 
        toward developing and implementing a comprehensive 
        mental health program, including provision for 
        utilization of community mental health centers, nursing 
        facilities, and other alternatives to care in public 
        institutions for mental diseases;
          (22) include descriptions of (A) the kinds and 
        numbers of professional medical personnel and 
        supporting staff that will be used in the 
        administration of the plan and of the responsibilities 
        they will have, (B) the standards, for private or 
        public institutions in which recipients of medical 
        assistance under the plan may receive care or services, 
        that will be utilized by the State authority or 
        authorities responsible for establishing and 
        maintaining such standards, (C) the cooperative 
        arrangements with State health agencies and State 
        vocational rehabilitation agencies entered into with a 
        view to maximum utilization of and coordination of the 
        provision of medical assistance with the services 
        administered or supervised by such agencies, and (D) 
        other standards and methods that the State will use to 
        assure that medical or remedial care and services 
        provided to recipients of medical assistance are of 
        high quality;
          (23) provide that (A) any individual eligible for 
        medical assistance (including drugs) may obtain such 
        assistance from any institution, agency, community 
        pharmacy, or person, qualified to perform the service 
        or services required (including an organization which 
        provides such services, or arranges for their 
        availability, on a prepayment basis), who undertakes to 
        provide him such services, and (B) an enrollment of an 
        individual eligible for medical assistance in a primary 
        care case-management system (described in section 
        1915(b)(1)), a medicaid managed care organization, or a 
        similar entity shall not restrict the choice of the 
        qualified person from whom the individual may receive 
        services under section 1905(a)(4)(C), except as 
        provided in subsection (g) and in section 1915, except 
        that this paragraph shall not apply in the case of 
        Puerto Rico, the Virgin Islands, and Guam, and except 
        that nothing in this paragraph shall be construed as 
        requiring a State to provide medical assistance for 
        such services furnished by a person or entity convicted 
        of a felony under Federal or State law for an offense 
        which the State agency determines is inconsistent with 
        the best interests of beneficiaries under the State 
        plan or by a provider or supplier to which a moratorium 
        under subsection (kk)(4) is applied during the period 
        of such moratorium';
          (24) effective July 1, 1969, provide for consultative 
        services by health agencies and other appropriate 
        agencies of the State to hospitals, nursing facilities, 
        home health agencies, clinics, laboratories, and such 
        other institutions as the Secretary may specify in 
        order to assist them (A) to qualify for payments under 
        this Act, (B) to establish and maintain such fiscal 
        records as may be necessary for the proper and 
        efficient administration of this Act, and (C) to 
        provide information needed to determine payments due 
        under this Act on account of care and services 
        furnished to individuals;
          (25) provide--
                  (A) that the State or local agency 
                administering such plan will take all 
                reasonable measures to ascertain the legal 
                liability of third parties (including health 
                insurers, self-insured plans, group health 
                plans (as defined in section 607(1) of the 
                Employee Retirement Income Security Act of 
                1974), service benefit plans, managed care 
                organizations, pharmacy benefit managers, or 
                other parties that are, by statute, contract, 
                or agreement, legally responsible for payment 
                of a claim for a health care item or service) 
                to pay for care and services available under 
                the plan, including--
                          (i) the collection of sufficient 
                        information (as specified by the 
                        Secretary in regulations) to enable the 
                        State to pursue claims against such 
                        third parties, with such information 
                        being collected at the time of any 
                        determination or redetermination of 
                        eligibility for medical assistance, and
                          (ii) the submission to the Secretary 
                        of a plan (subject to approval by the 
                        Secretary) for pursuing claims against 
                        such third parties, which plan shall be 
                        integrated with, and be monitored as a 
                        part of the Secretary's review of, the 
                        State's mechanized claims processing 
                        and information retrieval systems 
                        required under section 1903(r);
                  (B) that in any case where such a legal 
                liability is found to exist after medical 
                assistance has been made available on behalf of 
                the individual and where the amount of 
                reimbursement the State can reasonably expect 
                to recover exceeds the costs of such recovery, 
                the State or local agency will seek 
                reimbursement for such assistance to the extent 
                of such legal liability;
                  (C) that in the case of an individual who is 
                entitled to medical assistance under the State 
                plan with respect to a service for which a 
                third party is liable for payment, the person 
                furnishing the service may not seek to collect 
                from the individual (or any financially 
                responsible relative or representative of that 
                individual) payment of an amount for that 
                service (i) if the total of the amount of the 
                liabilities of third parties for that service 
                is at least equal to the amount payable for 
                that service under the plan (disregarding 
                section 1916), or (ii) in an amount which 
                exceeds the lesser of (I) the amount which may 
                be collected under section 1916, or (II) the 
                amount by which the amount payable for that 
                service under the plan (disregarding section 
                1916) exceeds the total of the amount of the 
                liabilities of third parties for that service;
                  (D) that a person who furnishes services and 
                is participating under the plan may not refuse 
                to furnish services to an individual (who is 
                entitled to have payment made under the plan 
                for the services the person furnishes) because 
                of a third party's potential liability for 
                payment for the service;
                  (E) that in the case of preventive pediatric 
                care (including early and periodic screening 
                and diagnosis services under section 
                1905(a)(4)(B)) covered under the State plan, 
                the State shall--
                          (i) make payment for such service in 
                        accordance with the usual payment 
                        schedule under such plan for such 
                        services without regard to the 
                        liability of a third party for payment 
                        for such services; and
                          (i) make payment for such service in 
                        accordance with the usual payment 
                        schedule under such plan for such 
                        services without regard to the 
                        liability of a third party for payment 
                        for such services, except that the 
                        State may, if the State determines 
                        doing so is cost-effective and will not 
                        adversely affect access to care, only 
                        make such payment if a third party so 
                        liable has not made payment within 90 
                        days after the date the provider of 
                        such services has initially submitted a 
                        claim to such third party for payment 
                        for such services; and
                          (ii) seek reimbursement from such 
                        third party in accordance with 
                        subparagraph (B);
                  (F) that in the case of any services covered 
                under such plan which are provided to an 
                individual on whose behalf child support 
                enforcement is being carried out by the State 
                agency under part D of title IV of this Act, 
                the State shall--
                          (i) make payment for such service in 
                        accordance with the usual payment 
                        schedule under such plan for such 
                        services without regard to any third-
                        party liability for payment for such 
                        services, if such third-party liability 
                        is derived (through insurance or 
                        otherwise) from the parent whose 
                        obligation to pay support is being 
                        enforced by such agency, if payment has 
                        not been made by such third party 
                        within 30 days after such services are 
                        furnished;
                          (i) make payment for such service in 
                        accordance with the usual payment 
                        schedule under such plan for such 
                        services without regard to any third-
                        party liability for payment for such 
                        services, if such third-party liability 
                        is derived (through insurance or 
                        otherwise) from the parent whose 
                        obligation to pay support is being 
                        enforced by such agency, if payment has 
                        not been made by such third party 
                        within 100 days after the date the 
                        provider of such services has initially 
                        submitted a claim to such third party 
                        for payment for such services, except 
                        that the State may make such payment 
                        within 30 days after such date if the 
                        State determines doing so is cost-
                        effective and necessary to ensure 
                        access to care.;
                          (ii) seek reimbursement from such 
                        third party in accordance with 
                        subparagraph (B);
                  (G) that the State prohibits any health 
                insurer (including a group health plan, as 
                defined in section 607(1) of the Employee 
                Retirement Income Security Act of 1974, a self-
                insured plan, a service benefit plan, a managed 
                care organization, a pharmacy benefit manager, 
                or other party that is, by statute, contract, 
                or agreement, legally responsible for payment 
                of a claim for a health care item or service), 
                in enrolling an individual or in making any 
                payments for benefits to the individual or on 
                the individual's behalf, from taking into 
                account that the individual is eligible for or 
                is provided medical assistance under a plan 
                under this title for such State, or any other 
                State;
                  (H) that to the extent that payment has been 
                made under the State plan for medical 
                assistance in any case where a third party has 
                a legal liability to make payment for such 
                assistance, the State has in effect laws under 
                which, to the extent that payment has been made 
                under the State plan for medical assistance for 
                health care items or services furnished to an 
                individual, the State is considered to have 
                acquired the rights of such individual to 
                payment by any other party for such health care 
                items or services; and
                  (I) that the State shall provide assurances 
                satisfactory to the Secretary that the State 
                has in effect laws requiring health insurers, 
                including self-insured plans, group health 
                plans (as defined in section 607(1) of the 
                Employee Retirement Income Security Act of 
                1974), service benefit plans, managed care 
                organizations, pharmacy benefit managers, or 
                other parties that are, by statute, contract, 
                or agreement, legally responsible for payment 
                of a claim for a health care item or service, 
                as a condition of doing business in the State, 
                to--
                          (i) provide, with respect to 
                        individuals who are eligible (and, at 
                        State option, individuals who apply or 
                        whose eligibility for medical 
                        assistance is being evaluated in 
                        accordance with section 1902(e)(13)(D)) 
                        for, or are provided, medical 
                        assistance under a State plan (or under 
                        a waiver of the plan) under this title 
                        and child health assistance under title 
                        XXI, upon the request of the State, 
                        information to determine during what 
                        period the individual or their spouses 
                        or their dependents may be (or may have 
                        been) covered by a health insurer and 
                        the nature of the coverage that is or 
                        was provided by the health insurer 
                        (including the name, address, and 
                        identifying number of the plan) in a 
                        manner prescribed by the Secretary;
                          (ii)(I) accept the State's right of 
                        recovery and the assignment to the 
                        State of any right of an individual or 
                        other entity to payment from the party 
                        for an item or service for which 
                        payment has been made under the State 
                        plan (or under a waiver of such plan); 
                        and
                          (II) in the case of a responsible 
                        third party (other than the original 
                        medicare fee-for-service program under 
                        parts A and B of title XVIII, a 
                        Medicare Advantage plan offered by a 
                        Medicare Advantage organization under 
                        part C of such title, a reasonable cost 
                        reimbursement plan under section 1876, 
                        a health care prepayment plan under 
                        section 1833, or a prescription drug 
                        plan offered by a PDP sponsor under 
                        part D of such title) that requires 
                        prior authorization for an item or 
                        service furnished to an individual 
                        eligible to receive medical assistance 
                        under this title, accept authorization 
                        provided by the State that the item or 
                        service is covered under the State plan 
                        (or waiver of such plan) for such 
                        individual, as if such authorization 
                        were the prior authorization made by 
                        the third party for such item or 
                        service;
                          (iii) not later than 60 days after 
                        receiving any inquiry by the State 
                        regarding a claim for payment for any 
                        health care item or service that is 
                        submitted not later than 3 years after 
                        the date of the provision of such 
                        health care item or service, respond to 
                        such inquiry; and
                          (iv) agree not to deny a claim 
                        submitted by the State solely on the 
                        basis of the date of submission of the 
                        claim, the type or format of the claim 
                        form, a failure to present proper 
                        documentation at the point-of-sale that 
                        is the basis of the claim, or in the 
                        case of a responsible third party 
                        (other than the original medicare fee-
                        for-service program under parts A and B 
                        of title XVIII, a Medicare Advantage 
                        plan offered by a Medicare Advantage 
                        organization under part C of such 
                        title, a reasonable cost reimbursement 
                        plan under section 1876, a health care 
                        prepayment plan under section 1833, or 
                        a prescription drug plan offered by a 
                        PDP sponsor under part D of such title) 
                        a failure to obtain a prior 
                        authorization for the item or service 
                        for which the claim is being submitted, 
                        if--
                                  (I) the claim is submitted by 
                                the State within the 3-year 
                                period beginning on the date on 
                                which the item or service was 
                                furnished; and
                                  (II) any action by the State 
                                to enforce its rights with 
                                respect to such claim is 
                                commenced within 6 years of the 
                                State's submission of such 
                                claim;
          (26) if the State plan includes medical assistance 
        for inpatient mental hospital services, provide, with 
        respect to each patient receiving such services, for a 
        regular program of medical review (including medical 
        evaluation) of his need for such services, and for a 
        written plan of care;
          (27) provide for agreements with every person or 
        institution providing services under the State plan 
        under which such person or institution agrees (A) to 
        keep such records as are necessary fully to disclose 
        the extent of the services provided to individuals 
        receiving assistance under the State plan, and (B) to 
        furnish the State agency or the Secretary with such 
        information, regarding any payments claimed by such 
        person or institution for providing services under the 
        State plan, as the State agency or the Secretary may 
        from time to time request;
          (28) provide--
                  (A) that any nursing facility receiving 
                payments under such plan must satisfy all the 
                requirements of subsections (b) through (d) of 
                section 1919 as they apply to such facilities;
                  (B) for including in ``nursing facility 
                services'' at least the items and services 
                specified (or deemed to be specified) by the 
                Secretary under section 1919(f)(7) and making 
                available upon request a description of the 
                items and services so included;
                  (C) for procedures to make available to the 
                public the data and methodology used in 
                establishing payment rates for nursing 
                facilities under this title; and
                  (D) for compliance (by the date specified in 
                the respective sections) with the requirements 
                of--
                          (i) section 1919(e);
                          (ii) section 1919(g) (relating to 
                        responsibility for survey and 
                        certification of nursing facilities); 
                        and
                          (iii) sections 1919(h)(2)(B) and 
                        1919(h)(2)(D) (relating to 
                        establishment and application of 
                        remedies);
          (29) include a State program which meets the 
        requirements set forth in section 1908, for the 
        licensing of administrators of nursing homes;
          (30)(A) provide such methods and procedures relating 
        to the utilization of, and the payment for, care and 
        services available under the plan (including but not 
        limited to utilization review plans as provided for in 
        section 1903(i)(4)) as may be necessary to safeguard 
        against unnecessary utilization of such care and 
        services and to assure that payments are consistent 
        with efficiency, economy, and quality of care and are 
        sufficient to enlist enough providers so that care and 
        services are available under the plan at least to the 
        extent that such care and services are available to the 
        general population in the geographic area; and
          (B) provide, under the program described in 
        subparagraph (A), that--
                  (i) each admission to a hospital, 
                intermediate care facility for the mentally 
                retarded, or hospital for mental diseases is 
                reviewed or screened in accordance with 
                criteria established by medical and other 
                professional personnel who are not themselves 
                directly responsible for the care of the 
                patient involved, and who do not have a 
                significant financial interest in any such 
                institution and are not, except in the case of 
                a hospital, employed by the institution 
                providing the care involved, and
                  (ii) the information developed from such 
                review or screening, along with the data 
                obtained from prior reviews of the necessity 
                for admission and continued stay of patients by 
                such professional personnel, shall be used as 
                the basis for establishing the size and 
                composition of the sample of admissions to be 
                subject to review and evaluation by such 
                personnel, and any such sample may be of any 
                size up to 100 percent of all admissions and 
                must be of sufficient size to serve the purpose 
                of (I) identifying the patterns of care being 
                provided and the changes occurring over time in 
                such patterns so that the need for modification 
                may be ascertained, and (II) subjecting 
                admissions to early or more extensive review 
                where information indicates that such 
                consideration is warranted to a hospital, 
                intermediate care facility for the mentally 
                retarded, or hospital for mental diseases;
          (31) with respect to services in an intermediate care 
        facility for the mentally retarded (where the State 
        plan includes medical assistance for such services) 
        provide, with respect to each patient receiving such 
        services, for a written plan of care, prior to 
        admission to or authorization of benefits in such 
        facility, in accordance with regulations of the 
        Secretary, and for a regular program of independent 
        professional review (including medical evaluation) 
        which shall periodically review his need for such 
        services;
          (32) provide that no payment under the plan for any 
        care or service provided to an individual shall be made 
        to anyone other than such individual or the person or 
        institution providing such care or service, under an 
        assignment or power of attorney or otherwise; except 
        that--
                  (A) in the case of any care or service 
                provided by a physician, dentist, or other 
                individual practitioner, such payment may be 
                made (i) to the employer of such physician, 
                dentist, or other practitioner if such 
                physician, dentist, or practitioner is required 
                as a condition of his employment to turn over 
                his fee for such care or service to his 
                employer, or (ii) (where the care or service 
                was provided in a hospital, clinic, or other 
                facility) to the facility in which the care or 
                service was provided if there is a contractual 
                arrangement between such physician, dentist, or 
                practitioner and such facility under which such 
                facility submits the bill for such care or 
                service;
                  (B) nothing in this paragraph shall be 
                construed (i) to prevent the making of such a 
                payment in accordance with an assignment from 
                the person or institution providing the care or 
                service involved if such assignment is made to 
                a governmental agency or entity or is 
                established by or pursuant to the order of a 
                court of competent jurisdiction, or (ii) to 
                preclude an agent of such person or institution 
                from receiving any such payment if (but only 
                if) such agent does so pursuant to an agency 
                agreement under which the compensation to be 
                paid to the agent for his services for or in 
                connection with the billing or collection of 
                payments due such person or institution under 
                the plan is unrelated (directly or indirectly) 
                to the amount of such payments or the billings 
                therefor, and is not dependent upon the actual 
                collection of any such payment;
                  (C) in the case of services furnished (during 
                a period that does not exceed 14 continuous 
                days in the case of an informal reciprocal 
                arrangement or 90 continuous days (or such 
                longer period as the Secretary may provide) in 
                the case of an arrangement involving per diem 
                or other fee-for-time compensation) by, or 
                incident to the services of, one physician to 
                the patients of another physician who submits 
                the claim for such services, payment shall be 
                made to the physician submitting the claim (as 
                if the services were furnished by, or incident 
                to, the physician's services), but only if the 
                claim identifies (in a manner specified by the 
                Secretary) the physician who furnished the 
                services; and
                  (D) in the case of payment for a childhood 
                vaccine administered before October 1, 1994, to 
                individuals entitled to medical assistance 
                under the State plan, the State plan may make 
                payment directly to the manufacturer of the 
                vaccine under a voluntary replacement program 
                agreed to by the State pursuant to which the 
                manufacturer (i) supplies doses of the vaccine 
                to providers administering the vaccine, (ii) 
                periodically replaces the supply of the 
                vaccine, and (iii) charges the State the 
                manufacturer's price to the Centers for Disease 
                Control and Prevention for the vaccine so 
                administered (which price includes a reasonable 
                amount to cover shipping and the handling of 
                returns);
          (33) provide--
                  (A) that the State health agency, or other 
                appropriate State medical agency, shall be 
                responsible for establishing a plan, consistent 
                with regulations prescribed by the Secretary, 
                for the review by appropriate professional 
                health personnel of the appropriateness and 
                quality of care and services furnished to 
                recipients of medical assistance under the plan 
                in order to provide guidance with respect 
                thereto in the administration of the plan to 
                the State agency established or designated 
                pursuant to paragraph (5) and, where 
                applicable, to the State agency described in 
                the second sentence of this subsection; and
                  (B) that, except as provided in section 
                1919(g), the State or local agency utilized by 
                the Secretary for the purpose specified in the 
                first sentence of section 1864(a), or, if such 
                agency is not the State agency which is 
                responsible for licensing health institutions, 
                the State agency responsible for such 
                licensing, will perform for the State agency 
                administering or supervising the administration 
                of the plan approved under this title the 
                function of determining whether institutions 
                and agencies meet the requirements for 
                participation in the program under such plan, 
                except that, if the Secretary has cause to 
                question the adequacy of such determinations, 
                the Secretary is authorized to validate State 
                determinations and, on that basis, make 
                independent and binding determinations 
                concerning the extent to which individual 
                institutions and agencies meet the requirements 
                for participation;
          (34) provide that in the case of any individual who 
        has been determined to be eligible for medical 
        assistance under the plan, such assistance will be made 
        available to him for care and services included under 
        the plan and furnished in or after the third month 
        before the month in which he made application (or 
        application was made on his behalf in the case of a 
        deceased individual) for such assistance if such 
        individual was (or upon application would have been) 
        eligible for such assistance at the time such care and 
        services were furnished;
          (35) provide that any disclosing entity (as defined 
        in section 1124(a)(2)) receiving payments under such 
        plan complies with the requirements of section 1124;
          (36) provide that within 90 days following the 
        completion of each survey of any health care facility, 
        laboratory, agency, clinic, or organization, by the 
        appropriate State agency described in paragraph (9), 
        such agency shall (in accordance with regulations of 
        the Secretary) make public in readily available form 
        and place the pertinent findings of each such survey 
        relating to the compliance of each such health care 
        facility, laboratory, clinic, agency, or organization 
        with (A) the statutory conditions of participation 
        imposed under this title, and (B) the major additional 
        conditions which the Secretary finds necessary in the 
        interest of health and safety of individuals who are 
        furnished care or services by any such facility, 
        laboratory, clinic, agency, or organization;
          (37) provide for claims payment procedures which (A) 
        ensure that 90 per centum of claims for payment (for 
        which no further written information or substantiation 
        is required in order to make payment) made for services 
        covered under the plan and furnished by health care 
        practitioners through individual or group practices or 
        through shared health facilities are paid within 30 
        days of the date of receipt of such claims and that 99 
        per centum of such claims are paid within 90 days of 
        the date of receipt of such claims, and (B) provide for 
        procedures of prepayment and postpayment claims review, 
        including review of appropriate data with respect to 
        the recipient and provider of a service and the nature 
        of the service for which payment is claimed, to ensure 
        the proper and efficient payment of claims and 
        management of the program;
          (38) require that an entity (other than an individual 
        practitioner or a group of practitioners) that 
        furnishes, or arranges for the furnishing of, items or 
        services under the plan, shall supply (within such 
        period as may be specified in regulations by the 
        Secretary or by the single State agency which 
        administers or supervises the administration of the 
        plan) upon request specifically addressed to such 
        entity by the Secretary or such State agency, the 
        information described in section 1128(b)(9);
          (39) provide that the State agency shall exclude any 
        specified individual or entity from participation in 
        the program under the State plan for the period 
        specified by the Secretary, when required by him to do 
        so pursuant to section 1128 or section 1128A, terminate 
        the participation of any individual or entity in such 
        program if (subject to such exceptions as are permitted 
        with respect to exclusion under sections 1128(c)(3)(B) 
        and 1128(d)(3)(B)) participation of such individual or 
        entity is terminated under title XVIII, any other State 
        plan under this title (or waiver of the plan), or any 
        State child health plan under title XXI (or waiver of 
        the plan) and such termination is included by the 
        Secretary in any database or similar system developed 
        pursuant to section 6401(b)(2) of the Patient 
        Protection and Affordable Care Act, and provide that no 
        payment may be made under the plan with respect to any 
        item or service furnished by such individual or entity 
        during such period;
          (40) require each health services facility or 
        organization which receives payments under the plan and 
        of a type for which a uniform reporting system has been 
        established under section 1121(a) to make reports to 
        the Secretary of information described in such section 
        in accordance with the uniform reporting system 
        (established under such section) for that type of 
        facility or organization;
          (41) provide, in accordance with subsection (kk)(8) 
        (as applicable), that whenever a provider of services 
        or any other person is terminated, suspended, or 
        otherwise sanctioned or prohibited from participating 
        under the State plan, the State agency shall promptly 
        notify the Secretary and, in the case of a physician 
        and notwithstanding paragraph (7), the State medical 
        licensing board of such action;
          (42) provide that--
                  (A) the records of any entity participating 
                in the plan and providing services reimbursable 
                on a cost-related basis will be audited as the 
                Secretary determines to be necessary to insure 
                that proper payments are made under the plan; 
                and
                  (B) not later than December 31, 2010, the 
                State shall--
                          (i) establish a program under which 
                        the State contracts (consistent with 
                        State law and in the same manner as the 
                        Secretary enters into contracts with 
                        recovery audit contractors under 
                        section 1893(h), subject to such 
                        exceptions or requirements as the 
                        Secretary may require for purposes of 
                        this title or a particular State) with 
                        1 or more recovery audit contractors 
                        for the purpose of identifying 
                        underpayments and overpayments and 
                        recouping overpayments under the State 
                        plan and under any waiver of the State 
                        plan with respect to all services for 
                        which payment is made to any entity 
                        under such plan or waiver; and
                          (ii) provide assurances satisfactory 
                        to the Secretary that--
                                  (I) under such contracts, 
                                payment shall be made to such a 
                                contractor only from amounts 
                                recovered;
                                  (II) from such amounts 
                                recovered, payment--
                                          (aa) shall be made on 
                                        a contingent basis for 
                                        collecting 
                                        overpayments; and
                                          (bb) may be made in 
                                        such amounts as the 
                                        State may specify for 
                                        identifying 
                                        underpayments;
                                  (III) the State has an 
                                adequate process for entities 
                                to appeal any adverse 
                                determination made by such 
                                contractors; and
                                  (IV) such program is carried 
                                out in accordance with such 
                                requirements as the Secretary 
                                shall specify, including--
                                          (aa) for purposes of 
                                        section 1903(a)(7), 
                                        that amounts expended 
                                        by the State to carry 
                                        out the program shall 
                                        be considered amounts 
                                        expended as necessary 
                                        for the proper and 
                                        efficient 
                                        administration of the 
                                        State plan or a waiver 
                                        of the plan;
                                          (bb) that section 
                                        1903(d) shall apply to 
                                        amounts recovered under 
                                        the program; and
                                          (cc) that the State 
                                        and any such 
                                        contractors under 
                                        contract with the State 
                                        shall coordinate such 
                                        recovery audit efforts 
                                        with other contractors 
                                        or entities performing 
                                        audits of entities 
                                        receiving payments 
                                        under the State plan or 
                                        waiver in the State, 
                                        including efforts with 
                                        Federal and State law 
                                        enforcement with 
                                        respect to the 
                                        Department of Justice, 
                                        including the Federal 
                                        Bureau of 
                                        Investigations, the 
                                        Inspector General of 
                                        the Department of 
                                        Health and Human 
                                        Services, and the State 
                                        medicaid fraud control 
                                        unit; and
          (43) provide for--
                  (A) informing all persons in the State who 
                are under the age of 21 and who have been 
                determined to be eligible for medical 
                assistance including services described in 
                section 1905(a)(4)(B), of the availability of 
                early and periodic screening, diagnostic, and 
                treatment services as described in section 
                1905(r) and the need for age-appropriate 
                immunizations against vaccine-preventable 
                diseases,
                  (B) providing or arranging for the provision 
                of such screening services in all cases where 
                they are requested,
                  (C) arranging for (directly or through 
                referral to appropriate agencies, 
                organizations, or individuals) corrective 
                treatment the need for which is disclosed by 
                such child health screening services, and
                  (D) reporting to the Secretary (in a uniform 
                form and manner established by the Secretary, 
                by age group and by basis of eligibility for 
                medical assistance, and by not later than April 
                1 after the end of each fiscal year, beginning 
                with fiscal year 1990) the following 
                information relating to early and periodic 
                screening, diagnostic, and treatment services 
                provided under the plan during each fiscal 
                year:
                          (i) the number of children provided 
                        child health screening services,
                          (ii) the number of children referred 
                        for corrective treatment (the need for 
                        which is disclosed by such child health 
                        screening services),
                          (iii) the number of children 
                        receiving dental services, and other 
                        information relating to the provision 
                        of dental services to such children 
                        described in section 2108(e) and
                          (iv) the State's results in attaining 
                        the participation goals set for the 
                        State under section 1905(r);
          (44) in each case for which payment for inpatient 
        hospital services, services in an intermediate care 
        facility for the mentally retarded, or inpatient mental 
        hospital services is made under the State plan--
                  (A) a physician (or, in the case of skilled 
                nursing facility services or intermediate care 
                facility services, a physician, or a nurse 
                practitioner or clinical nurse specialist who 
                is not an employee of the facility but is 
                working in collaboration with a physician) 
                certifies at the time of admission, or, if 
                later, the time the individual applies for 
                medical assistance under the State plan (and a 
                physician, a physician assistant under the 
                supervision of a physician, or, in the case of 
                skilled nursing facility services or 
                intermediate care facility services, a 
                physician, or a nurse practitioner or clinical 
                nurse specialist who is not an employee of the 
                facility but is working in collaboration with a 
                physician, recertifies, where such services are 
                furnished over a period of time, in such cases, 
                at least as often as required under section 
                1903(g)(6) (or, in the case of services that 
                are services provided in an intermediate care 
                facility for the mentally retarded, every 
                year), and accompanied by such supporting 
                material, appropriate to the case involved, as 
                may be provided in regulations of the 
                Secretary), that such services are or were 
                required to be given on an inpatient basis 
                because the individual needs or needed such 
                services, and
                  (B) such services were furnished under a plan 
                established and periodically reviewed and 
                evaluated by a physician, or, in the case of 
                skilled nursing facility services or 
                intermediate care facility services, a 
                physician, or a nurse practitioner or clinical 
                nurse specialist who is not an employee of the 
                facility but is working in collaboration with a 
                physician;
          (45) provide for mandatory assignment of rights of 
        payment for medical support and other medical care owed 
        to recipients, in accordance with section 1912;
          (46)(A) provide that information is requested and 
        exchanged for purposes of income and eligibility 
        verification in accordance with a State system which 
        meets the requirements of section 1137 of this Act; and
          (B) provide, with respect to an individual declaring 
        to be a citizen or national of the United States for 
        purposes of establishing eligibility under this title, 
        that the State shall satisfy the requirements of--
                  (i) section 1903(x); or
                  (ii) subsection (ee);
          (47) provide--
                  (A) at the option of the State, for making 
                ambulatory prenatal care available to pregnant 
                women during a presumptive eligibility period 
                in accordance with section 1920 and provide for 
                making medical assistance for items and 
                services described in subsection (a) of section 
                1920A available to children during a 
                presumptive eligibility period in accordance 
                with such section and provide for making 
                medical assistance available to individuals 
                described in subsection (a) of section 1920B 
                during a presumptive eligibility period in 
                accordance with such section and provide for 
                making medical assistance available to 
                individuals described in subsection (a) of 
                section 1920C during a presumptive eligibility 
                period in accordance with such section; and
                  (B) that any hospital that is a participating 
                provider under the State plan may elect to be a 
                qualified entity for purposes of determining, 
                on the basis of preliminary information, 
                whether any individual is eligible for medical 
                assistance under the State plan or under a 
                waiver of the plan for purposes of providing 
                the individual with medical assistance during a 
                presumptive eligibility period, in the same 
                manner, and subject to the same requirements, 
                as apply to the State options with respect to 
                populations described in section 1920, 1920A, 
                1920B, or 1920C (but without regard to whether 
                the State has elected to provide for a 
                presumptive eligibility period under any such 
                sections), subject to such guidance as the 
                Secretary shall establish;
          (48) provide a method of making cards evidencing 
        eligibility for medical assistance available to an 
        eligible individual who does not reside in a permanent 
        dwelling or does not have a fixed home or mailing 
        address;
          (49) provide that the State will provide information 
        and access to certain information respecting sanctions 
        taken against health care practitioners and providers 
        by State licensing authorities in accordance with 
        section 1921;
          (50) provide, in accordance with subsection (q), for 
        a monthly personal needs allowance for certain 
        institutionalized individuals and couples;
          (51) meet the requirements of section 1924 (relating 
        to protection of community spouses);
          (52) meet the requirements of section 1925 (relating 
        to extension of eligibility for medical assistance);
          (53) provide--
                  (A) for notifying in a timely manner all 
                individuals in the State who are determined to 
                be eligible for medical assistance and who are 
                pregnant women, breastfeeding or postpartum 
                women (as defined in section 17 of the Child 
                Nutrition Act of 1966), or children below the 
                age of 5, of the availability of benefits 
                furnished by the special supplemental nutrition 
                program under such section, and
                  (B) for referring any such individual to the 
                State agency responsible for administering such 
                program;
          (54) in the case of a State plan that provides 
        medical assistance for covered outpatient drugs (as 
        defined in section 1927(k)), comply with the applicable 
        requirements of section 1927;
          (55) provide for receipt and initial processing of 
        applications of individuals for medical assistance 
        under subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), 
        (a)(10)(A)(i)(VII), (a)(10)(A)(ii)(IX), or 
        (a)(10)(A)(ii)(XXIII)--
                  (A) at locations which are other than those 
                used for the receipt and processing of 
                applications for aid under part A of title IV 
                and which include facilities defined as 
                disproportionate share hospitals under section 
                1923(a)(1)(A) and Federally-qualified health 
                centers described in section 1905(1)(2)(B), and
                  (B) using applications which are other than 
                those used for applications for aid under such 
                part;
          (56) provide, in accordance with subsection (s), for 
        adjusted payments for certain inpatient hospital 
        services;
          (57) provide that each hospital, nursing facility, 
        provider of home health care or personal care services, 
        hospice program, or medicaid managed care organization 
        (as defined in section 1903(m)(1)(A)) receiving funds 
        under the plan shall comply with the requirements of 
        subsection (w);
          (58) provide that the State, acting through a State 
        agency, association, or other private nonprofit entity, 
        develop a written description of the law of the State 
        (whether statutory or as recognized by the courts of 
        the State) concerning advance directives that would be 
        distributed by providers or organizations under the 
        requirements of subsection (w);
          (59) maintain a list (updated not less often than 
        monthly, and containing each physician's unique 
        identifier provided under the system established under 
        subsection (x)) of all physicians who are certified to 
        participate under the State plan;
          (60) provide that the State agency shall provide 
        assurances satisfactory to the Secretary that the State 
        has in effect the laws relating to medical child 
        support required under section 1908A;
          (61) provide that the State must demonstrate that it 
        operates a medicaid fraud and abuse control unit 
        described in section 1903(q) that effectively carries 
        out the functions and requirements described in such 
        section, as determined in accordance with standards 
        established by the Secretary, unless the State 
        demonstrates to the satisfaction of the Secretary that 
        the effective operation of such a unit in the State 
        would not be cost-effective because minimal fraud 
        exists in connection with the provision of covered 
        services to eligible individuals under the State plan, 
        and that beneficiaries under the plan will be protected 
        from abuse and neglect in connection with the provision 
        of medical assistance under the plan without the 
        existence of such a unit;
          (62) provide for a program for the distribution of 
        pediatric vaccines to program-registered providers for 
        the immunization of vaccine-eligible children in 
        accordance with section 1928;
          (63) provide for administration and determinations of 
        eligibility with respect to individuals who are (or 
        seek to be) eligible for medical assistance based on 
        the application of section 1931;
          (64) provide, not later than 1 year after the date of 
        the enactment of this paragraph, a mechanism to receive 
        reports from beneficiaries and others and compile data 
        concerning alleged instances of waste, fraud, and abuse 
        relating to the operation of this title;
          (65) provide that the State shall issue provider 
        numbers for all suppliers of medical assistance 
        consisting of durable medical equipment, as defined in 
        section 1861(n), and the State shall not issue or renew 
        such a supplier number for any such supplier unless--
                  (A)(i) full and complete information as to 
                the identity of each person with an ownership 
                or control interest (as defined in section 
                1124(a)(3)) in the supplier or in any 
                subcontractor (as defined by the Secretary in 
                regulations) in which the supplier directly or 
                indirectly has a 5 percent or more ownership 
                interest; and
                  (ii) to the extent determined to be feasible 
                under regulations of the Secretary, the name of 
                any disclosing entity (as defined in section 
                1124(a)(2)) with respect to which a person with 
                such an ownership or control interest in the 
                supplier is a person with such an ownership or 
                control interest in the disclosing entity; and
                  (B) a surety bond in a form specified by the 
                Secretary under section 1834(a)(16)(B) and in 
                an amount that is not less than $50,000 or such 
                comparable surety bond as the Secretary may 
                permit under the second sentence of such 
                section;
          (66) provide for making eligibility determinations 
        under section 1935(a);
          (67) provide, with respect to services covered under 
        the State plan (but not under title XVIII) that are 
        furnished to a PACE program eligible individual 
        enrolled with a PACE provider by a provider 
        participating under the State plan that does not have a 
        contract or other agreement with the PACE provider that 
        establishes payment amounts for such services, that 
        such participating provider may not require the PACE 
        provider to pay the participating provider an amount 
        greater than the amount that would otherwise be payable 
        for the service to the participating provider under the 
        State plan for the State where the PACE provider is 
        located (in accordance with regulations issued by the 
        Secretary);
          (68) provide that any entity that receives or makes 
        annual payments under the State plan of at least 
        $5,000,000, as a condition of receiving such payments, 
        shall--
                  (A) establish written policies for all 
                employees of the entity (including management), 
                and of any contractor or agent of the entity, 
                that provide detailed information about the 
                False Claims Act established under sections 
                3729 through 3733 of title 31, United States 
                Code, administrative remedies for false claims 
                and statements established under chapter 38 of 
                title 31, United States Code, any State laws 
                pertaining to civil or criminal penalties for 
                false claims and statements, and whistleblower 
                protections under such laws, with respect to 
                the role of such laws in preventing and 
                detecting fraud, waste, and abuse in Federal 
                health care programs (as defined in section 
                1128B(f));
                  (B) include as part of such written policies, 
                detailed provisions regarding the entity's 
                policies and procedures for detecting and 
                preventing fraud, waste, and abuse; and
                  (C) include in any employee handbook for the 
                entity, a specific discussion of the laws 
                described in subparagraph (A), the rights of 
                employees to be protected as whistleblowers, 
                and the entity's policies and procedures for 
                detecting and preventing fraud, waste, and 
                abuse;
          (69) provide that the State must comply with any 
        requirements determined by the Secretary to be 
        necessary for carrying out the Medicaid Integrity 
        Program established under section 1936;
          (70) at the option of the State and notwithstanding 
        paragraphs (1), (10)(B), and (23), provide for the 
        establishment of a non-emergency medical transportation 
        brokerage program in order to more cost-effectively 
        provide transportation for individuals eligible for 
        medical assistance under the State plan who need access 
        to medical care or services and have no other means of 
        transportation which--
                  (A) may include a wheelchair van, taxi, 
                stretcher car, bus passes and tickets, secured 
                transportation, and such other transportation 
                as the Secretary determines appropriate; and
                  (B) may be conducted under contract with a 
                broker who--
                          (i) is selected through a competitive 
                        bidding process based on the State's 
                        evaluation of the broker's experience, 
                        performance, references, resources, 
                        qualifications, and costs;
                          (ii) has oversight procedures to 
                        monitor beneficiary access and 
                        complaints and ensure that transport 
                        personnel are licensed, qualified, 
                        competent, and courteous;
                          (iii) is subject to regular auditing 
                        and oversight by the State in order to 
                        ensure the quality of the 
                        transportation services provided and 
                        the adequacy of beneficiary access to 
                        medical care and services; and
                          (iv) complies with such requirements 
                        related to prohibitions on referrals 
                        and conflict of interest as the 
                        Secretary shall establish (based on the 
                        prohibitions on physician referrals 
                        under section 1877 and such other 
                        prohibitions and requirements as the 
                        Secretary determines to be 
                        appropriate);
          (71) provide that the State will implement an asset 
        verification program as required under section 1940;
          (72) provide that the State will not prevent a 
        Federally-qualified health center from entering into 
        contractual relationships with private practice dental 
        providers in the provision of Federally-qualified 
        health center services;
          (73) in the case of any State in which 1 or more 
        Indian Health Programs or Urban Indian Organizations 
        furnishes health care services, provide for a process 
        under which the State seeks advice on a regular, 
        ongoing basis from designees of such Indian Health 
        Programs and Urban Indian Organizations on matters 
        relating to the application of this title that are 
        likely to have a direct effect on such Indian Health 
        Programs and Urban Indian Organizations and that--
                  (A) shall include solicitation of advice 
                prior to submission of any plan amendments, 
                waiver requests, and proposals for 
                demonstration projects likely to have a direct 
                effect on Indians, Indian Health Programs, or 
                Urban Indian Organizations; and
                  (B) may include appointment of an advisory 
                committee and of a designee of such Indian 
                Health Programs and Urban Indian Organizations 
                to the medical care advisory committee advising 
                the State on its State plan under this title;
          (74) provide for maintenance of effort under the 
        State plan or under any waiver of the plan in 
        accordance with subsection (gg); and
          (75) provide that, beginning January 2015, and 
        annually thereafter, the State shall submit a report to 
        the Secretary that contains--
                  (A) the total number of enrolled and newly 
                enrolled individuals in the State plan or under 
                a waiver of the plan for the fiscal year ending 
                on September 30 of the preceding calendar year, 
                disaggregated by population, including 
                children, parents, nonpregnant childless 
                adults, disabled individuals, elderly 
                individuals, and such other categories or sub-
                categories of individuals eligible for medical 
                assistance under the State plan or under a 
                waiver of the plan as the Secretary may 
                require;
                  (B) a description, which may be specified by 
                population, of the outreach and enrollment 
                processes used by the State during such fiscal 
                year; and
                  (C) any other data reporting determined 
                necessary by the Secretary to monitor 
                enrollment and retention of individuals 
                eligible for medical assistance under the State 
                plan or under a waiver of the plan;
          (76) provide that any data collected under the State 
        plan meets the requirements of section 3101 of the 
        Public Health Service Act;
          (77) provide that the State shall comply with 
        provider and supplier screening, enrollment, oversight, 
        and reporting requirements in accordance with 
        subsection (kk);
          (78) provide that, not later than January 1, 2017, in 
        the case of a State that pursuant to its State plan or 
        waiver of the plan for medical assistance pays for 
        medical assistance on a fee-for-service basis, the 
        State shall require each provider furnishing items and 
        services to, or ordering, prescribing, referring, or 
        certifying eligibility for, services for individuals 
        eligible to receive medical assistance under such plan 
        to enroll with the State agency and provide to the 
        State agency the provider's identifying information, 
        including the name, specialty, date of birth, Social 
        Security number, national provider identifier (if 
        applicable), Federal taxpayer identification number, 
        and the State license or certification number of the 
        provider (if applicable);
          (79) provide that any agent, clearinghouse, or other 
        alternate payee (as defined by the Secretary) that 
        submits claims on behalf of a health care provider must 
        register with the State and the Secretary in a form and 
        manner specified by the Secretary;
          (80) provide that the State shall not provide any 
        payments for items or services provided under the State 
        plan or under a waiver to any financial institution or 
        entity located outside of the United States;
          (81) provide for implementation of the payment models 
        specified by the Secretary under section 1115A(c) for 
        implementation on a nationwide basis unless the State 
        demonstrates to the satisfaction of the Secretary that 
        implementation would not be administratively feasible 
        or appropriate to the health care delivery system of 
        the State;
          (82) provide that the State agency responsible for 
        administering the State plan under this title provides 
        assurances to the Secretary that the State agency is in 
        compliance with subparagraphs (A), (B), and (C) of 
        section 1128K(b)(2);
          (83) provide that, not later than January 1, 2017, in 
        the case of a State plan (or waiver of the plan) that 
        provides medical assistance on a fee-for-service basis 
        or through a primary care case-management system 
        described in section 1915(b)(1) (other than a primary 
        care case management entity (as defined by the 
        Secretary)), the State shall publish (and update on at 
        least an annual basis) on the public website of the 
        State agency administering the State plan, a directory 
        of the physicians described in subsection (mm) and, at 
        State option, other providers described in such 
        subsection that--
                  (A) includes--
                          (i) with respect to each such 
                        physician or provider--
                                  (I) the name of the physician 
                                or provider;
                                  (II) the specialty of the 
                                physician or provider;
                                  (III) the address at which 
                                the physician or provider 
                                provides services; and
                                  (IV) the telephone number of 
                                the physician or provider; and
                          (ii) with respect to any such 
                        physician or provider participating in 
                        such a primary care case-management 
                        system, information regarding--
                                  (I) whether the physician or 
                                provider is accepting as new 
                                patients individuals who 
                                receive medical assistance 
                                under this title; and
                                  (II) the physician's or 
                                provider's cultural and 
                                linguistic capabilities, 
                                including the languages spoken 
                                by the physician or provider or 
                                by the skilled medical 
                                interpreter providing 
                                interpretation services at the 
                                physician's or provider's 
                                office; and
                  (B) may include, at State option, with 
                respect to each such physician or provider--
                          (i) the Internet website of such 
                        physician or provider; or
                          (ii) whether the physician or 
                        provider is accepting as new patients 
                        individuals who receive medical 
                        assistance under this title;
          (84) provide that--
                  (A) the State shall not terminate eligibility 
                for medical assistance under the State plan (or 
                waiver of such plan) for an individual who is 
                an eligible juvenile (as defined in subsection 
                (nn)(2)) because the juvenile is an inmate of a 
                public institution (as defined in subsection 
                (nn)(3)), but, subject to subparagraph (D), may 
                suspend coverage during the period the juvenile 
                is such an inmate;
                  (B) in the case of an individual who is an 
                eligible juvenile described in paragraph (2)(A) 
                of subsection (nn), the State shall, prior to 
                the individual's release from such a public 
                institution, conduct a redetermination of 
                eligibility for such individual with respect to 
                such medical assistance (without requiring a 
                new application from the individual) and, if 
                the State determines pursuant to such 
                redetermination that the individual continues 
                to meet the eligibility requirements for such 
                medical assistance, the State shall restore 
                coverage for such medical assistance to such an 
                individual upon the individual's release from 
                such public institution;
                  (C) in the case of an individual who is an 
                eligible juvenile described in paragraph (2)(B) 
                of subsection (nn), the State shall process any 
                application for medical assistance submitted 
                by, or on behalf of, such individual such that 
                the State makes a determination of eligibility 
                for such individual with respect to such 
                medical assistance upon release of such 
                individual from such public institution; and
                  (D) in the case of an individual who is an 
                eligible juvenile described in subsection 
                (nn)(2) and is within 30 days of the date on 
                which such eligible juvenile is scheduled to be 
                released from a public institution following 
                adjudication, the State shall have in place a 
                plan, and in accordance with such plan, provide 
                for--
                          (i) in the 30 days prior to the 
                        release of such eligible juvenile from 
                        such public institution (or not later 
                        than one week, or as soon as 
                        practicable, after release from the 
                        public institution), and in 
                        coordination with such institution, any 
                        screening or diagnostic service which 
                        meets reasonable standards of medical 
                        and dental practice, as determined by 
                        the State, or as indicated as medically 
                        necessary, in accordance with 
                        paragraphs (1)(A) and (5) of section 
                        1905(r), including a behavioral health 
                        screening or diagnostic service; and
                          (ii) in the 30 days prior to the 
                        release of such eligible juvenile from 
                        such public institution, and for at 
                        least 30 days following the release of 
                        such eligible juvenile from such 
                        institution, targeted case management 
                        services, including referrals for such 
                        eligible juvenile to the appropriate 
                        care and services available in the 
                        geographic region of the home or 
                        residence of such eligible juvenile 
                        (where feasible) under the State plan 
                        (or waiver of such plan);
          (85) provide that the State is in compliance with the 
        drug review and utilization requirements under 
        subsection (oo)(1);
          (86) provide, at the option of the State, for making 
        medical assistance available on an inpatient or 
        outpatient basis at a residential pediatric recovery 
        center (as defined in subsection (pp)) to infants with 
        neonatal abstinence syndrome; and
          (87) provide for a mechanism, which may include 
        attestation, that ensures that, with respect to any 
        provider (including a transportation network company) 
        or individual driver of nonemergency transportation to 
        medically necessary services receiving payments under 
        such plan (but excluding any public transit authority), 
        at a minimum--
                  (A) each such provider and individual driver 
                is not excluded from participation in any 
                Federal health care program (as defined in 
                section 1128B(f)) and is not listed on the 
                exclusion list of the Inspector General of the 
                Department of Health and Human Services;
                  (B) each such individual driver has a valid 
                driver's license;
                  (C) each such provider has in place a process 
                to address any violation of a State drug law; 
                and
                  (D) each such provider has in place a process 
                to disclose to the State Medicaid program the 
                driving history, including any traffic 
                violations, of each such individual driver 
                employed by such provider, including any 
                traffic violations.
Notwithstanding paragraph (5), if on January 1, 1965, and on 
the date on which a State submits its plan for approval under 
this title, the State agency which administered or supervised 
the administration of the plan of such State approved under 
title X (or title XVI, insofar as it relates to the blind) was 
different from the State agency which administered or 
supervised the administration of the State plan approved under 
title I (or title XVI, insofar as it relates to the aged), the 
State agency which administered or supervised the 
administration of such plan approved under title X (or title 
XVI, insofar as it relates to the blind) may be designated to 
administer or supervise the administration of the portion of 
the State plan for medical assistance which relates to blind 
individuals and a different State agency may be established or 
designated to administer or supervise the administration of the 
rest of the State plan for medical assistance; and in such case 
the part of the plan which each such agency administers, or the 
administration of which each such agency supervises, shall be 
regarded as a separate plan for purposes of this title (except 
for purposes of paragraph (10)). The provisions of paragraphs 
(9)(A), (31), and (33) and of section 1903(i)(4) shall not 
apply to a religious nonmedical health care institution (as 
defined in section 1861(ss)(1)).
For purposes of paragraph (10) any individual who, for the 
month of August 1972, was eligible for or receiving aid or 
assistance under a State plan approved under title I, X, XIV, 
or XVI, or part A of title IV and who for such month was 
entitled to monthly insurance benefits under title II shall for 
purposes of this title only be deemed to be eligible for 
financial aid or assistance for any month thereafter if such 
individual would have been eligible for financial aid or 
assistance for such month had the increase in monthly insurance 
benefits under title II resulting from enactment of Public Law 
92-336 not been applicable to such individual.
The requirement of clause (A) of paragraph (37) with respect to 
a State plan may be waived by the Secretary if he finds that 
the State has exercised good faith in trying to meet such 
requirement. For purposes of this title, any child who meets 
the requirements of paragraph (1) or (2) of section 473(b) 
shall be deemed to be a dependent child as defined in section 
406 and shall be deemed to be a recipient of aid to families 
with dependent children under part A of title IV in the State 
where such child resides. Notwithstanding paragraph (10)(B) or 
any other provision of this subsection, a State plan shall 
provide medical assistance with respect to an alien who is not 
lawfully admitted for permanent residence or otherwise 
permanently residing in the United States under color of law 
only in accordance with section 1903(v).
  (b) The Secretary shall approve any plan which fulfills the 
conditions specified in subsection (a) of this section, except 
that he shall not approve any plan which imposes, as a 
condition of eligibility for medical assistance under the 
plan--
          (1) an age requirement of more than 65 years; or
          (2) any residence requirement which excludes any 
        individual who resides in the State, regardless of 
        whether or not the residence is maintained permanently 
        or at a fixed address; or
          (3) any citizenship requirement which excludes any 
        citizen of the United States.
  (c) Notwithstanding subsection (b), the Secretary shall not 
approve any State plan for medical assistance if the State 
requires individuals described in subsection (l)(1) to apply 
for assistance under the State program funded under part A of 
title IV as a condition of applying for or receiving medical 
assistance under this title.
  (d) If a State contracts with an entity which meets the 
requirements of section 1152, as determined by the Secretary, 
or a utilization and quality control peer review organization 
having a contract with the Secretary under part B of title XI 
for the performance of medical or utilization review functions 
(including quality review functions described in subsection 
(a)(30)(C)) required under this title of a State plan with 
respect to specific services or providers (or services or 
providers in a geographic area of the State), such requirements 
shall be deemed to be met for those services or providers (or 
services or providers in that area) by delegation to such an 
entity or organization under the contract of the State's 
authority to conduct such review activities if the contract 
provides for the performance of activities not inconsistent 
with part B of title XI and provides for such assurances of 
satisfactory performance by such an entity or organization as 
the Secretary may prescribe.
  (e)(1) Beginning April 1, 1990, for provisions relating to 
the extension of eligibility for medical assistance for certain 
families who have received aid pursuant to a State plan 
approved under part A of title IV and have earned income, see 
section 1925.
  (2)(A) In the case of an individual who is enrolled with a 
medicaid managed care organization (as defined in section 
1903(m)(1)(A)), with a primary care case manager (as defined in 
section 1905(t)), or with an eligible organization with a 
contract under section 1876 and who would (but for this 
paragraph) lose eligibility for benefits under this title 
before the end of the minimum enrollment period (defined in 
subparagraph (B)), the State plan may provide, notwithstanding 
any other provision of this title, that the individual shall be 
deemed to continue to be eligible for such benefits until the 
end of such minimum period, but, except for benefits furnished 
under section 1905(a)(4)(C), only with respect to such benefits 
provided to the individual as an enrollee of such organization 
or entity or by or through the case manager.
  (B) For purposes of subparagraph (A), the term ``minimum 
enrollment period'' means, with respect to an individual's 
enrollment with an organization or entity under a State plan, a 
period, established by the State, of not more than six months 
beginning on the date the individual's enrollment with the 
organization or entity becomes effective.
  (3) At the option of the State, any individual who--
          (A) is 18 years of age or younger and qualifies as a 
        disabled individual under section 1614(a);
          (B) with respect to whom there has been a 
        determination by the State that--
                  (i) the individual requires a level of care 
                provided in a hospital, nursing facility, or 
                intermediate care facility for the mentally 
                retarded,
                  (ii) it is appropriate to provide such care 
                for the individual outside such an institution, 
                and
                  (iii) the estimated amount which would be 
                expended for medical assistance for the 
                individual for such care outside an institution 
                is not greater than the estimated amount which 
                would otherwise be expended for medical 
                assistance for the individual within an 
                appropriate institution; and
          (C) if the individual were in a medical institution, 
        would be eligible for medical assistance under the 
        State plan under this title,
        shall be deemed, for purposes of this title only, to be 
        an individual with respect to whom a supplemental 
        security income payment, or State supplemental payment, 
        respectively, is being paid under title XVI.
  (4) A child born to a woman eligible for and receiving 
medical assistance under a State plan on the date of the 
child's birth shall be deemed to have applied for medical 
assistance and to have been found eligible for such assistance 
under such plan on the date of such birth and to remain 
eligible for such assistance for a period of one year. During 
the period in which a child is deemed under the preceding 
sentence to be eligible for medical assistance, the medical 
assistance eligibility identification number of the mother 
shall also serve as the identification number of the child, and 
all claims shall be submitted and paid under such number 
(unless the State issues a separate identification number for 
the child before such period expires). Notwithstanding the 
preceding sentence, in the case of a child who is born in the 
United States to an alien mother for whom medical assistance 
for the delivery of the child is made available pursuant to 
section 1903(v), the State immediately shall issue a separate 
identification number for the child upon notification by the 
facility at which such delivery occurred of the child's birth.
  (5) A woman who, while pregnant, is eligible for, has applied 
for, and has received medical assistance under the State plan, 
shall continue to be eligible under the plan, as though she 
were pregnant, for all pregnancy-related and postpartum medical 
assistance under the plan, through the end of the month in 
which the 60-day period (beginning on the last day of her 
pregnancy) ends.
  (6) In the case of a pregnant woman described in subsection 
(a)(10) who, because of a change in income of the family of 
which she is a member, would not otherwise continue to be 
described in such subsection, the woman shall be deemed to 
continue to be an individual described in subsection 
(a)(10)(A)(i)(IV) and subsection (l)(1)(A) without regard to 
such change of income through the end of the month in which the 
60-day period (beginning on the last day of her pregnancy) 
ends. The preceding sentence shall not apply in the case of a 
woman who has been provided ambulatory prenatal care pursuant 
to section 1920 during a presumptive eligibility period and is 
then, in accordance with such section, determined to be 
ineligible for medical assistance under the State plan.
  (7) In the case of an infant or child described in 
subparagraph (B), (C), or (D) of subsection (l)(1) or paragraph 
(2) of section 1905(n)--
          (A) who is receiving inpatient services for which 
        medical assistance is provided on the date the infant 
        or child attains the maximum age with respect to which 
        coverage is provided under the State plan for such 
        individuals, and
          (B) who, but for attaining such age, would remain 
        eligible for medical assistance under such subsection,
the infant or child shall continue to be treated as an 
individual described in such respective provision until the end 
of the stay for which the inpatient services are furnished.
  (8) If an individual is determined to be a qualified medicare 
beneficiary (as defined in section 1905(p)(1)), such 
determination shall apply to services furnished after the end 
of the month in which the determination first occurs. For 
purposes of payment to a State under section 1903(a), such 
determination shall be considered to be valid for an individual 
for a period of 12 months, except that a State may provide for 
such determinations more frequently, but not more frequently 
than once every 6 months for an individual.
  (9)(A) At the option of the State, the plan may include as 
medical assistance respiratory care services for any individual 
who--
          (i) is medically dependent on a ventilator for life 
        support at least six hours per day;
          (ii) has been so dependent for at least 30 
        consecutive days (or the maximum number of days 
        authorized under the State plan, whichever is less) as 
        an inpatient;
          (iii) but for the availability of respiratory care 
        services, would require respiratory care as an 
        inpatient in a hospital, nursing facility, or 
        intermediate care facility for the mentally retarded 
        and would be eligible to have payment made for such 
        inpatient care under the State plan;
          (iv) has adequate social support services to be cared 
        for at home; and
          (v) wishes to be cared for at home.
  (B) The requirements of subparagraph (A)(ii) may be satisfied 
by a continuous stay in one or more hospitals, nursing 
facilities, or intermediate care facilities for the mentally 
retarded.
  (C) For purposes of this paragraph, respiratory care services 
means services provided on a part-time basis in the home of the 
individual by a respiratory therapist or other health care 
professional trained in respiratory therapy (as determined by 
the State), payment for which is not otherwise included within 
other items and services furnished to such individual as 
medical assistance under the plan.
  (10)(A) The fact that an individual, child, or pregnant woman 
may be denied aid under part A of title IV pursuant to section 
402(a)(43) shall not be construed as denying (or permitting a 
State to deny) medical assistance under this title to such 
individual, child, or woman who is eligible for assistance 
under this title on a basis other than the receipt of aid under 
such part.
  (B) If an individual, child, or pregnant woman is receiving 
aid under part A of title IV and such aid is terminated 
pursuant to section 402(a)(43), the State may not discontinue 
medical assistance under this title for the individual, child, 
or woman until the State has determined that the individual, 
child, or woman is not eligible for assistance under this title 
on a basis other than the receipt of aid under such part.
  (11)(A) In the case of an individual who is enrolled with a 
group health plan under section 1906 and who would (but for 
this paragraph) lose eligibility for benefits under this title 
before the end of the minimum enrollment period (defined in 
subparagraph (B)), the State plan may provide, notwithstanding 
any other provision of this title, that the individual shall be 
deemed to continue to be eligible for such benefits until the 
end of such minimum period, but only with respect to such 
benefits provided to the individual as an enrollee of such 
plan.
  (B) For purposes of subparagraph (A), the term ``minimum 
enrollment period'' means, with respect to an individual's 
enrollment with a group health plan, a period established by 
the State, of not more than 6 months beginning on the date the 
individual's enrollment under the plan becomes effective.
          (12) 1 year of continuous eligibility for children.--
        The State plan (or waiver of such State plan) shall 
        provide that an individual who is under the age of 19 
        and who is determined to be eligible for benefits under 
        a State plan (or waiver of such plan) approved under 
        this title under subsection (a)(10)(A) shall remain 
        eligible for such benefits until the earlier of--
                  (A) the end of the 12-month period beginning 
                on the date of such determination;
                  (B) the time that such individual attains the 
                age of 19; or
                  (C) the date that such individual ceases to 
                be a resident of such State.
  (13) Express Lane Option.--
          (A) In general.--
                  (i) Option to use a finding from an express 
                lane agency.--At the option of the State, the 
                State plan may provide that in determining 
                eligibility under this title for a child (as 
                defined in subparagraph (G)), the State may 
                rely on a finding made within a reasonable 
                period (as determined by the State) from an 
                Express Lane agency (as defined in subparagraph 
                (F)) when it determines whether a child 
                satisfies one or more components of eligibility 
                for medical assistance under this title. The 
                State may rely on a finding from an Express 
                Lane agency notwithstanding sections 
                1902(a)(46)(B) and 1137(d) or any differences 
                in budget unit, disregard, deeming or other 
                methodology, if the following requirements are 
                met:
                          (I) Prohibition on determining 
                        children ineligible for coverage.--If a 
                        finding from an Express Lane agency 
                        would result in a determination that a 
                        child does not satisfy an eligibility 
                        requirement for medical assistance 
                        under this title and for child health 
                        assistance under title XXI, the State 
                        shall determine eligibility for 
                        assistance using its regular 
                        procedures.
                          (II) Notice requirement.--For any 
                        child who is found eligible for medical 
                        assistance under the State plan under 
                        this title or child health assistance 
                        under title XXI and who is subject to 
                        premiums based on an Express Lane 
                        agency's finding of such child's income 
                        level, the State shall provide notice 
                        that the child may qualify for lower 
                        premium payments if evaluated by the 
                        State using its regular policies and of 
                        the procedures for requesting such an 
                        evaluation.
                          (III) Compliance with screen and 
                        enroll requirement.--The State shall 
                        satisfy the requirements under 
                        subparagraphs (A) and (B) of section 
                        2102(b)(3) (relating to screen and 
                        enroll) before enrolling a child in 
                        child health assistance under title 
                        XXI. At its option, the State may 
                        fulfill such requirements in accordance 
                        with either option provided under 
                        subparagraph (C) of this paragraph.
                          (IV) Verification of citizenship or 
                        nationality status.--The State shall 
                        satisfy the requirements of section 
                        1902(a)(46)(B) or 2105(c)(9), as 
                        applicable for verifications of 
                        citizenship or nationality status.
                          (V) Coding.--The State meets the 
                        requirements of subparagraph (E).
                  (ii) Option to apply to renewals and 
                redeterminations.--The State may apply the 
                provisions of this paragraph when conducting 
                initial determinations of eligibility, 
                redeterminations of eligibility, or both, as 
                described in the State plan.
          (B) Rules of construction.--Nothing in this paragraph 
        shall be construed--
                  (i) to limit or prohibit a State from taking 
                any actions otherwise permitted under this 
                title or title XXI in determining eligibility 
                for or enrolling children into medical 
                assistance under this title or child health 
                assistance under title XXI; or
                  (ii) to modify the limitations in section 
                1902(a)(5) concerning the agencies that may 
                make a determination of eligibility for medical 
                assistance under this title.
          (C) Options for satisfying the screen and enroll 
        requirement.--
                  (i) In general.--With respect to a child 
                whose eligibility for medical assistance under 
                this title or for child health assistance under 
                title XXI has been evaluated by a State agency 
                using an income finding from an Express Lane 
                agency, a State may carry out its duties under 
                subparagraphs (A) and (B) of section 2102(b)(3) 
                (relating to screen and enroll) in accordance 
                with either clause (ii) or clause (iii).
                  (ii) Establishing a screening threshold.--
                          (I) In general.--Under this clause, 
                        the State establishes a screening 
                        threshold set as a percentage of the 
                        Federal poverty level that exceeds the 
                        highest income threshold applicable 
                        under this title to the child by a 
                        minimum of 30 percentage points or, at 
                        State option, a higher number of 
                        percentage points that reflects the 
                        value (as determined by the State and 
                        described in the State plan) of any 
                        differences between income 
                        methodologies used by the program 
                        administered by the Express Lane agency 
                        and the methodologies used by the State 
                        in determining eligibility for medical 
                        assistance under this title.
                          (II) Children with income not above 
                        threshold.--If the income of a child 
                        does not exceed the screening 
                        threshold, the child is deemed to 
                        satisfy the income eligibility criteria 
                        for medical assistance under this title 
                        regardless of whether such child would 
                        otherwise satisfy such criteria.
                          (III) Children with income above 
                        threshold.--If the income of a child 
                        exceeds the screening threshold, the 
                        child shall be considered to have an 
                        income above the Medicaid applicable 
                        income level described in section 
                        2110(b)(4) and to satisfy the 
                        requirement under section 2110(b)(1)(C) 
                        (relating to the requirement that CHIP 
                        matching funds be used only for 
                        children not eligible for Medicaid). If 
                        such a child is enrolled in child 
                        health assistance under title XXI, the 
                        State shall provide the parent, 
                        guardian, or custodial relative with 
                        the following:
                                  (aa) Notice that the child 
                                may be eligible to receive 
                                medical assistance under the 
                                State plan under this title if 
                                evaluated for such assistance 
                                under the State's regular 
                                procedures and notice of the 
                                process through which a parent, 
                                guardian, or custodial relative 
                                can request that the State 
                                evaluate the child's 
                                eligibility for medical 
                                assistance under this title 
                                using such regular procedures.
                                  (bb) A description of 
                                differences between the medical 
                                assistance provided under this 
                                title and child health 
                                assistance under title XXI, 
                                including differences in cost-
                                sharing requirements and 
                                covered benefits.
                  (iii) Temporary enrollment in chip pending 
                screen and enroll.--
                          (I) In general.--Under this clause, a 
                        State enrolls a child in child health 
                        assistance under title XXI for a 
                        temporary period if the child appears 
                        eligible for such assistance based on 
                        an income finding by an Express Lane 
                        agency.
                          (II) Determination of eligibility.--
                        During such temporary enrollment 
                        period, the State shall determine the 
                        child's eligibility for child health 
                        assistance under title XXI or for 
                        medical assistance under this title in 
                        accordance with this clause.
                          (III) Prompt follow up.--In making 
                        such a determination, the State shall 
                        take prompt action to determine whether 
                        the child should be enrolled in medical 
                        assistance under this title or child 
                        health assistance under title XXI 
                        pursuant to subparagraphs (A) and (B) 
                        of section 2102(b)(3) (relating to 
                        screen and enroll).
                          (IV) Requirement for simplified 
                        determination.--In making such a 
                        determination, the State shall use 
                        procedures that, to the maximum 
                        feasible extent, reduce the burden 
                        imposed on the individual of such 
                        determination. Such procedures may not 
                        require the child's parent, guardian, 
                        or custodial relative to provide or 
                        verify information that already has 
                        been provided to the State agency by an 
                        Express Lane agency or another source 
                        of information unless the State agency 
                        has reason to believe the information 
                        is erroneous.
                          (V) Availability of chip matching 
                        funds during temporary enrollment 
                        period.--Medical assistance for items 
                        and services that are provided to a 
                        child enrolled in title XXI during a 
                        temporary enrollment period under this 
                        clause shall be treated as child health 
                        assistance under such title.
          (D) Option for automatic enrollment.--
                  (i) In general.--The State may initiate and 
                determine eligibility for medical assistance 
                under the State Medicaid plan or for child 
                health assistance under the State CHIP plan 
                without a program application from, or on 
                behalf of, the child based on data obtained 
                from sources other than the child (or the 
                child's family), but a child can only be 
                automatically enrolled in the State Medicaid 
                plan or the State CHIP plan if the child or the 
                family affirmatively consents to being enrolled 
                through affirmation in writing, by telephone, 
                orally, through electronic signature, or 
                through any other means specified by the 
                Secretary or by signature on an Express Lane 
                agency application, if the requirement of 
                clause (ii) is met.
                  (ii) Information requirement.--The 
                requirement of this clause is that the State 
                informs the parent, guardian, or custodial 
                relative of the child of the services that will 
                be covered, appropriate methods for using such 
                services, premium or other cost sharing charges 
                (if any) that apply, medical support 
                obligations (under section 1912(a)) created by 
                enrollment (if applicable), and the actions the 
                parent, guardian, or relative must take to 
                maintain enrollment and renew coverage.
          (E) Coding; application to enrollment error rates.--
                  (i) In general.--For purposes of subparagraph 
                (A)(iv), the requirement of this subparagraph 
                for a State is that the State agrees to--
                          (I) assign such codes as the 
                        Secretary shall require to the children 
                        who are enrolled in the State Medicaid 
                        plan or the State CHIP plan through 
                        reliance on a finding made by an 
                        Express Lane agency for the duration of 
                        the State's election under this 
                        paragraph;
                          (II) annually provide the Secretary 
                        with a statistically valid sample (that 
                        is approved by Secretary) of the 
                        children enrolled in such plans through 
                        reliance on such a finding by 
                        conducting a full Medicaid eligibility 
                        review of the children identified for 
                        such sample for purposes of determining 
                        an eligibility error rate (as described 
                        in clause (iv)) with respect to the 
                        enrollment of such children (and shall 
                        not include such children in any data 
                        or samples used for purposes of 
                        complying with a Medicaid Eligibility 
                        Quality Control (MEQC) review or a 
                        payment error rate measurement (PERM) 
                        requirement);
                          (III) submit the error rate 
                        determined under subclause (II) to the 
                        Secretary;
                          (IV) if such error rate exceeds 3 
                        percent for either of the first 2 
                        fiscal years in which the State elects 
                        to apply this paragraph, demonstrate to 
                        the satisfaction of the Secretary the 
                        specific corrective actions implemented 
                        by the State to improve upon such error 
                        rate; and
                          (V) if such error rate exceeds 3 
                        percent for any fiscal year in which 
                        the State elects to apply this 
                        paragraph, a reduction in the amount 
                        otherwise payable to the State under 
                        section 1903(a) for quarters for that 
                        fiscal year, equal to the total amount 
                        of erroneous excess payments determined 
                        for the fiscal year only with respect 
                        to the children included in the sample 
                        for the fiscal year that are in excess 
                        of a 3 percent error rate with respect 
                        to such children.
                  (ii) No punitive action based on error 
                rate.--The Secretary shall not apply the error 
                rate derived from the sample under clause (i) 
                to the entire population of children enrolled 
                in the State Medicaid plan or the State CHIP 
                plan through reliance on a finding made by an 
                Express Lane agency, or to the population of 
                children enrolled in such plans on the basis of 
                the State's regular procedures for determining 
                eligibility, or penalize the State on the basis 
                of such error rate in any manner other than the 
                reduction of payments provided for under clause 
                (i)(V).
                  (iii) Rule of construction.--Nothing in this 
                paragraph shall be construed as relieving a 
                State that elects to apply this paragraph from 
                being subject to a penalty under section 
                1903(u), for payments made under the State 
                Medicaid plan with respect to ineligible 
                individuals and families that are determined to 
                exceed the error rate permitted under that 
                section (as determined without regard to the 
                error rate determined under clause (i)(II)).
                  (iv) Error rate defined.--In this 
                subparagraph, the term ``error rate'' means the 
                rate of erroneous excess payments for medical 
                assistance (as defined in section 
                1903(u)(1)(D)) for the period involved, except 
                that such payments shall be limited to 
                individuals for which eligibility 
                determinations are made under this paragraph 
                and except that in applying this paragraph 
                under title XXI, there shall be substituted for 
                references to provisions of this title 
                corresponding provisions within title XXI.
          (F) Express lane agency.--
                  (i) In general.--In this paragraph, the term 
                ``Express Lane agency'' means a public agency 
                that--
                          (I) is determined by the State 
                        Medicaid agency or the State CHIP 
                        agency (as applicable) to be capable of 
                        making the determinations of one or 
                        more eligibility requirements described 
                        in subparagraph (A)(i);
                          (II) is identified in the State 
                        Medicaid plan or the State CHIP plan; 
                        and
                          (III) notifies the child's family--
                                  (aa) of the information which 
                                shall be disclosed in 
                                accordance with this paragraph;
                                  (bb) that the information 
                                disclosed will be used solely 
                                for purposes of determining 
                                eligibility for medical 
                                assistance under the State 
                                Medicaid plan or for child 
                                health assistance under the 
                                State CHIP plan; and
                                  (cc) that the family may 
                                elect to not have the 
                                information disclosed for such 
                                purposes; and
                          (IV) enters into, or is subject to, 
                        an interagency agreement to limit the 
                        disclosure and use of the information 
                        disclosed.
                  (ii) Inclusion of specific public agencies 
                and indian tribes and tribal organizations.--
                Such term includes the following:
                          (I) A public agency that determines 
                        eligibility for assistance under any of 
                        the following:
                                  (aa) The temporary assistance 
                                for needy families program 
                                funded under part A of title 
                                IV.
                                  (bb) A State program funded 
                                under part D of title IV.
                                  (cc) The State Medicaid plan.
                                  (dd) The State CHIP plan.
                                  (ee) The Food and Nutrition 
                                Act of 2008 (7 U.S.C. 2011 et 
                                seq.).
                                  (ff) The Head Start Act (42 
                                U.S.C. 9801 et seq.).
                                  (gg) The Richard B. Russell 
                                National School Lunch Act (42 
                                U.S.C. 1751 et seq.).
                                  (hh) The Child Nutrition Act 
                                of 1966 (42 U.S.C. 1771 et 
                                seq.).
                                  (ii) The Child Care and 
                                Development Block Grant Act of 
                                1990 (42 U.S.C. 9858 et seq.).
                                  (jj) The Stewart B. McKinney 
                                Homeless Assistance Act (42 
                                U.S.C. 11301 et seq.).
                                  (kk) The United States 
                                Housing Act of 1937 (42 U.S.C. 
                                1437 et seq.).
                                  (ll) The Native American 
                                Housing Assistance and Self-
                                Determination Act of 1996 (25 
                                U.S.C. 4101 et seq.).
                          (II) A State-specified governmental 
                        agency that has fiscal liability or 
                        legal responsibility for the accuracy 
                        of the eligibility determination 
                        findings relied on by the State.
                          (III) A public agency that is subject 
                        to an interagency agreement limiting 
                        the disclosure and use of the 
                        information disclosed for purposes of 
                        determining eligibility under the State 
                        Medicaid plan or the State CHIP plan.
                          (IV) The Indian Health Service, an 
                        Indian Tribe, Tribal Organization, or 
                        Urban Indian Organization (as defined 
                        in section 1139(c)).
                  (iii) Exclusions.--Such term does not include 
                an agency that determines eligibility for a 
                program established under the Social Services 
                Block Grant established under title XX or a 
                private, for-profit organization.
                  (iv) Rules of construction.--Nothing in this 
                paragraph shall be construed as--
                          (I) exempting a State Medicaid agency 
                        from complying with the requirements of 
                        section 1902(a)(4) relating to merit-
                        based personnel standards for employees 
                        of the State Medicaid agency and 
                        safeguards against conflicts of 
                        interest); or
                          (II) authorizing a State Medicaid 
                        agency that elects to use Express Lane 
                        agencies under this subparagraph to use 
                        the Express Lane option to avoid 
                        complying with such requirements for 
                        purposes of making eligibility 
                        determinations under the State Medicaid 
                        plan.
                  (v) Additional definitions.--In this 
                paragraph:
                          (I) State.--The term ``State'' means 
                        1 of the 50 States or the District of 
                        Columbia.
                          (II) State chip agency.--The term 
                        ``State CHIP agency'' means the State 
                        agency responsible for administering 
                        the State CHIP plan.
                          (III) State chip plan.--The term 
                        ``State CHIP plan'' means the State 
                        child health plan established under 
                        title XXI and includes any waiver of 
                        such plan.
                          (IV) State medicaid agency.--The term 
                        ``State Medicaid agency'' means the 
                        State agency responsible for 
                        administering the State Medicaid plan.
                          (V) State medicaid plan.--The term 
                        ``State Medicaid plan'' means the State 
                        plan established under title XIX and 
                        includes any waiver of such plan.
          (G) Child defined.--For purposes of this paragraph, 
        the term ``child'' means an individual under 19 years 
        of age, or, at the option of a State, such higher age, 
        not to exceed 21 years of age, as the State may elect.
          (H) State option to rely on state income tax data or 
        return.--At the option of the State, a finding from an 
        Express Lane agency may include gross income or 
        adjusted gross income shown by State income tax records 
        or returns.
          (I) Application.--This paragraph shall not apply with 
        respect to eligibility determinations made after 
        September 30, 2029.
          (14) Income determined using modified adjusted gross 
        income.--
                  (A) In general.--Notwithstanding subsection 
                (r) or any other provision of this title, 
                except as provided in subparagraph (D), for 
                purposes of determining income eligibility for 
                medical assistance under the State plan or 
                under any waiver of such plan and for any other 
                purpose applicable under the plan or waiver for 
                which a determination of income is required, 
                including with respect to the imposition of 
                premiums and cost-sharing, a State shall use 
                the modified adjusted gross income of an 
                individual and, in the case of an individual in 
                a family greater than 1, the household income 
                of such family. A State shall establish income 
                eligibility thresholds for populations to be 
                eligible for medical assistance under the State 
                plan or a waiver of the plan using modified 
                adjusted gross income and household income that 
                are not less than the effective income 
                eligibility levels that applied under the State 
                plan or waiver on the date of enactment of the 
                Patient Protection and Affordable Care Act. For 
                purposes of complying with the maintenance of 
                effort requirements under subsection (gg) 
                during the transition to modified adjusted 
                gross income and household income, a State 
                shall, working with the Secretary, establish an 
                equivalent income test that ensures individuals 
                eligible for medical assistance under the State 
                plan or under a waiver of the plan on the date 
                of enactment of the Patient Protection and 
                Affordable Care Act, do not lose coverage under 
                the State plan or under a waiver of the plan. 
                The Secretary may waive such provisions of this 
                title and title XXI as are necessary to ensure 
                that States establish income and eligibility 
                determination systems that protect 
                beneficiaries.
                  (B) No income or expense disregards.--Subject 
                to subparagraph (I), no type of expense, block, 
                or other income disregard shall be applied by a 
                State to determine income eligibility for 
                medical assistance under the State plan or 
                under any waiver of such plan or for any other 
                purpose applicable under the plan or waiver for 
                which a determination of income is required.
                  (C) No assets test.--A State shall not apply 
                any assets or resources test for purposes of 
                determining eligibility for medical assistance 
                under the State plan or under a waiver of the 
                plan.
                  (D) Exceptions.--
                          (i) Individuals eligible because of 
                        other aid or assistance, elderly 
                        individuals, medically needy 
                        individuals, and individuals eligible 
                        for medicare cost-sharing.--
                        Subparagraphs (A), (B), and (C) shall 
                        not apply to the determination of 
                        eligibility under the State plan or 
                        under a waiver for medical assistance 
                        for the following:
                                  (I) Individuals who are 
                                eligible for medical assistance 
                                under the State plan or under a 
                                waiver of the plan on a basis 
                                that does not require a 
                                determination of income by the 
                                State agency administering the 
                                State plan or waiver, including 
                                as a result of eligibility for, 
                                or receipt of, other Federal or 
                                State aid or assistance, 
                                individuals who are eligible on 
                                the basis of receiving (or 
                                being treated as if receiving) 
                                supplemental security income 
                                benefits under title XVI, and 
                                individuals who are eligible as 
                                a result of being or being 
                                deemed to be a child in foster 
                                care under the responsibility 
                                of the State.
                                  (II) Individuals who have 
                                attained age 65.
                                  (III) Individuals who qualify 
                                for medical assistance under 
                                the State plan or under any 
                                waiver of such plan on the 
                                basis of being blind or 
                                disabled (or being treated as 
                                being blind or disabled) 
                                without regard to whether the 
                                individual is eligible for 
                                supplemental security income 
                                benefits under title XVI on the 
                                basis of being blind or 
                                disabled and including an 
                                individual who is eligible for 
                                medical assistance on the basis 
                                of section 1902(e)(3).
                                  (IV) Individuals described in 
                                subsection (a)(10)(C).
                                  (V) Individuals described in 
                                any clause of subsection 
                                (a)(10)(E).
                          (ii) Express lane agency findings.--
                        In the case of a State that elects the 
                        Express Lane option under paragraph 
                        (13), notwithstanding subparagraphs 
                        (A), (B), and (C), the State may rely 
                        on a finding made by an Express Lane 
                        agency in accordance with that 
                        paragraph relating to the income of an 
                        individual for purposes of determining 
                        the individual's eligibility for 
                        medical assistance under the State plan 
                        or under a waiver of the plan.
                          (iii) Medicare prescription drug 
                        subsidies determinations.--
                        Subparagraphs (A), (B), and (C) shall 
                        not apply to any determinations of 
                        eligibility for premium and cost-
                        sharing subsidies under and in 
                        accordance with section 1860D-14 made 
                        by the State pursuant to section 
                        1935(a)(2).
                          (iv) Long-term care.--Subparagraphs 
                        (A), (B), and (C) shall not apply to 
                        any determinations of eligibility of 
                        individuals for purposes of medical 
                        assistance for nursing facility 
                        services, a level of care in any 
                        institution equivalent to that of 
                        nursing facility services, home or 
                        community-based services furnished 
                        under a waiver or State plan amendment 
                        under section 1915 or a waiver under 
                        section 1115, and services described in 
                        section 1917(c)(1)(C)(ii).
                          (v) Grandfather of current enrollees 
                        until date of next regular 
                        redetermination.--An individual who, on 
                        January 1, 2014, is enrolled in the 
                        State plan or under a waiver of the 
                        plan and who would be determined 
                        ineligible for medical assistance 
                        solely because of the application of 
                        the modified adjusted gross income or 
                        household income standard described in 
                        subparagraph (A), shall remain eligible 
                        for medical assistance under the State 
                        plan or waiver (and subject to the same 
                        premiums and cost-sharing as applied to 
                        the individual on that date) through 
                        March 31, 2014, or the date on which 
                        the individual's next regularly 
                        scheduled redetermination of 
                        eligibility is to occur, whichever is 
                        later.
                  (E) Transition planning and oversight.--Each 
                State shall submit to the Secretary for the 
                Secretary's approval the income eligibility 
                thresholds proposed to be established using 
                modified adjusted gross income and household 
                income, the methodologies and procedures to be 
                used to determine income eligibility using 
                modified adjusted gross income and household 
                income and, if applicable, a State plan 
                amendment establishing an optional eligibility 
                category under subsection (a)(10)(A)(ii)(XX). 
                To the extent practicable, the State shall use 
                the same methodologies and procedures for 
                purposes of making such determinations as the 
                State used on the date of enactment of the 
                Patient Protection and Affordable Care Act. The 
                Secretary shall ensure that the income 
                eligibility thresholds proposed to be 
                established using modified adjusted gross 
                income and household income, including under 
                the eligibility category established under 
                subsection (a)(10)(A)(ii)(XX), and the 
                methodologies and procedures proposed to be 
                used to determine income eligibility, will not 
                result in children who would have been eligible 
                for medical assistance under the State plan or 
                under a waiver of the plan on the date of 
                enactment of the Patient Protection and 
                Affordable Care Act no longer being eligible 
                for such assistance.
                  (F) Limitation on secretarial authority.--The 
                Secretary shall not waive compliance with the 
                requirements of this paragraph except to the 
                extent necessary to permit a State to 
                coordinate eligibility requirements for dual 
                eligible individuals (as defined in section 
                1915(h)(2)(B)) under the State plan or under a 
                waiver of the plan and under title XVIII and 
                individuals who require the level of care 
                provided in a hospital, a nursing facility, or 
                an intermediate care facility for the mentally 
                retarded.
                  (G) Definitions of modified adjusted gross 
                income and household income.--In this 
                paragraph, the terms ``modified adjusted gross 
                income'' and ``household income'' have the 
                meanings given such terms in section 36B(d)(2) 
                of the Internal Revenue Code of 1986.
                  (H) Continued application of medicaid rules 
                regarding point-in-time income and sources of 
                income.--The requirement under this paragraph 
                for States to use modified adjusted gross 
                income and household income to determine income 
                eligibility for medical assistance under the 
                State plan or under any waiver of such plan and 
                for any other purpose applicable under the plan 
                or waiver for which a determination of income 
                is required shall not be construed as affecting 
                or limiting the application of--
                          (i) the requirement under this title 
                        and under the State plan or a waiver of 
                        the plan to determine an individual's 
                        income as of the point in time at which 
                        an application for medical assistance 
                        under the State plan or a waiver of the 
                        plan is processed; or
                          (ii) any rules established under this 
                        title or under the State plan or a 
                        waiver of the plan regarding sources of 
                        countable income.
                  (I) Treatment of portion of modified adjusted 
                gross income.--For purposes of determining the 
                income eligibility of an individual for medical 
                assistance whose eligibility is determined 
                based on the application of modified adjusted 
                gross income under subparagraph (A), the State 
                shall--
                          (i) determine the dollar equivalent 
                        of the difference between the upper 
                        income limit on eligibility for such an 
                        individual (expressed as a percentage 
                        of the poverty line) and such upper 
                        income limit increased by 5 percentage 
                        points; and
                          (ii) notwithstanding the requirement 
                        in subparagraph (A) with respect to use 
                        of modified adjusted gross income, 
                        utilize as the applicable income of 
                        such individual, in determining such 
                        income eligibility, an amount equal to 
                        the modified adjusted gross income 
                        applicable to such individual reduced 
                        by such dollar equivalent amount.
                  (J) Exclusion of parent mentor compensation 
                from income determination.--Any nominal amount 
                received by an individual as compensation, 
                including a stipend, for participation as a 
                parent mentor (as defined in paragraph (5) of 
                section 2113(f)) in an activity or program 
                funded through a grant under such section shall 
                be disregarded for purposes of determining the 
                income eligibility of such individual for 
                medical assistance under the State plan or any 
                waiver of such plan.
                  (K) Treatment of certain lottery winnings and 
                income received as a lump sum.--
                          (i) In general.--In the case of an 
                        individual who is the recipient of 
                        qualified lottery winnings (pursuant to 
                        lotteries occurring on or after January 
                        1, 2018) or qualified lump sum income 
                        (received on or after such date) and 
                        whose eligibility for medical 
                        assistance is determined based on the 
                        application of modified adjusted gross 
                        income under subparagraph (A), a State 
                        shall, in determining such eligibility, 
                        include such winnings or income (as 
                        applicable) as income received--
                                  (I) in the month in which 
                                such winnings or income (as 
                                applicable) is received if the 
                                amount of such winnings or 
                                income is less than $80,000;
                                  (II) over a period of 2 
                                months if the amount of such 
                                winnings or income (as 
                                applicable) is greater than or 
                                equal to $80,000 but less than 
                                $90,000;
                                  (III) over a period of 3 
                                months if the amount of such 
                                winnings or income (as 
                                applicable) is greater than or 
                                equal to $90,000 but less than 
                                $100,000; and
                                  (IV) over a period of 3 
                                months plus 1 additional month 
                                for each increment of $10,000 
                                of such winnings or income (as 
                                applicable) received, not to 
                                exceed a period of 120 months 
                                (for winnings or income of 
                                $1,260,000 or more), if the 
                                amount of such winnings or 
                                income is greater than or equal 
                                to $100,000.
                          (ii) Counting in equal 
                        installments.--For purposes of 
                        subclauses (II), (III), and (IV) of 
                        clause (i), winnings or income to which 
                        such subclause applies shall be counted 
                        in equal monthly installments over the 
                        period of months specified under such 
                        subclause.
                          (iii) Hardship exemption.--An 
                        individual whose income, by application 
                        of clause (i), exceeds the applicable 
                        eligibility threshold established by 
                        the State, shall continue to be 
                        eligible for medical assistance to the 
                        extent that the State determines, under 
                        procedures established by the State (in 
                        accordance with standards specified by 
                        the Secretary), that the denial of 
                        eligibility of the individual would 
                        cause an undue medical or financial 
                        hardship as determined on the basis of 
                        criteria established by the Secretary.
                          (iv) Notifications and assistance 
                        required in case of loss of 
                        eligibility.--A State shall, with 
                        respect to an individual who loses 
                        eligibility for medical assistance 
                        under the State plan (or a waiver of 
                        such plan) by reason of clause (i)--
                                  (I) before the date on which 
                                the individual loses such 
                                eligibility, inform the 
                                individual--
                                          (aa) of the 
                                        individual's 
                                        opportunity to enroll 
                                        in a qualified health 
                                        plan offered through an 
                                        Exchange established 
                                        under title I of the 
                                        Patient Protection and 
                                        Affordable Care Act 
                                        during the special 
                                        enrollment period 
                                        specified in section 
                                        9801(f)(3) of the 
                                        Internal Revenue Code 
                                        of 1986 (relating to 
                                        loss of Medicaid or 
                                        CHIP coverage); and
                                          (bb) of the date on 
                                        which the individual 
                                        would no longer be 
                                        considered ineligible 
                                        by reason of clause (i) 
                                        to receive medical 
                                        assistance under the 
                                        State plan or under any 
                                        waiver of such plan and 
                                        be eligible to reapply 
                                        to receive such medical 
                                        assistance; and
                                  (II) provide technical 
                                assistance to the individual 
                                seeking to enroll in such a 
                                qualified health plan.
                          (v) Qualified lottery winnings 
                        defined.--In this subparagraph, the 
                        term ``qualified lottery winnings'' 
                        means winnings from a sweepstakes, 
                        lottery, or pool described in paragraph 
                        (3) of section 4402 of the Internal 
                        Revenue Code of 1986 or a lottery 
                        operated by a multistate or 
                        multijurisdictional lottery 
                        association, including amounts awarded 
                        as a lump sum payment.
                          (vi) Qualified lump sum income 
                        defined.--In this subparagraph, the 
                        term ``qualified lump sum income'' 
                        means income that is received as a lump 
                        sum from monetary winnings from 
                        gambling (as defined by the Secretary 
                        and including gambling activities 
                        described in section 1955(b)(4) of 
                        title 18, United States Code).
          (15) Exclusion of compensation for participation in a 
        clinical trial for testing of treatments for a rare 
        disease or condition.--The first $2,000 received by an 
        individual (who has attained 19 years of age) as 
        compensation for participation in a clinical trial 
        meeting the requirements of section 1612(b)(26) shall 
        be disregarded for purposes of determining the income 
        eligibility of such individual for medical assistance 
        under the State plan or any waiver of such plan.
          (16) Extending certain coverage for pregnant and 
        postpartum women.--
                  (A) In general.--At the option of the State, 
                the State plan (or waiver of such State plan) 
                may provide, that an individual who, while 
                pregnant, is eligible for and has received 
                medical assistance under the State plan 
                approved under this title (or a waiver of such 
                plan) (including during a period of retroactive 
                eligibility under subsection (a)(34)) shall, in 
                addition to remaining eligible under paragraph 
                (5) for all pregnancy-related and postpartum 
                medical assistance available under the State 
                plan (or waiver) through the last day of the 
                month in which the 60-day period (beginning on 
                the last day of her pregnancy) ends, remain 
                eligible under the State plan (or waiver) for 
                medical assistance for the period beginning on 
                the first day occurring after the end of such 
                60-day period and ending on the last day of the 
                month in which the 12-month period (beginning 
                on the last day of her pregnancy) ends.
                  (B) Full benefits during pregnancy and 
                throughout the 12-month postpartum period.--The 
                medical assistance provided for a pregnant or 
                postpartum individual by a State making an 
                election under this paragraph, without regard 
                to the basis on which the individual is 
                eligible for medical assistance under the State 
                plan (or waiver), shall--
                          (i) include all items and services 
                        covered under the State plan (or 
                        waiver) that are not less in amount, 
                        duration, or scope, or are determined 
                        by the Secretary to be substantially 
                        equivalent, to the medical assistance 
                        available for an individual described 
                        in subsection (a)(10)(A)(i); and
                          (ii) be provided for the individual 
                        while pregnant and during the 12-month 
                        period that begins on the last day of 
                        the individual's pregnancy and ends on 
                        the last day of the month in which such 
                        12-month period ends.
                  (C) Coverage under chip.--A State making an 
                election under this paragraph that covers under 
                title XXI child health assistance for targeted 
                low-income children who are pregnant or 
                targeted low-income pregnant women, as 
                applicable, shall also make the election under 
                section 2107(e)(1)(J) of such title.
  (f) Notwithstanding any other provision of this title, except 
as provided in subsection (e) and section 1619(b)(3) and 
section 1924, except with respect to qualified disabled and 
working individuals (described in section 1905(s)), and except 
with respect to qualified medicare beneficiaries, qualified 
severely impaired individuals, and individuals described in 
subsection (m)(1), no State not eligible to participate in the 
State plan program established under title XVI shall be 
required to provide medical assistance to any aged, blind, or 
disabled individual (within the meaning of title XVI) for any 
month unless such State would be (or would have been) required 
to provide medical assistance to such individual for such month 
had its plan for medical assistance approved under this title 
and in effect on January 1, 1972, been in effect in such month, 
except that for this purpose any such individual shall be 
deemed eligible for medical assistance under such State plan if 
(in addition to meeting such other requirements as are or may 
be imposed under the State plan) the income of any such 
individual as determined in accordance with section 1903(f) 
(after deducting any supplemental security income payment and 
State supplementary payment made with respect to such 
individual, and incurred expenses for medical care as 
recognized under State law regardless of whether such expenses 
are reimbursed under another public program of the State or 
political subdivision thereof) is not in excess of the standard 
for medical assistance established under the State plan as in 
effect on January 1, 1972. In States which provide medical 
assistance to individuals pursuant to paragraph (10)(C) of 
subsection (a) of this section, an individual who is eligible 
for medical assistance by reason of the requirements of this 
section concerning the deduction of incurred medical expenses 
from income shall be considered an individual eligible for 
medical assistance under paragraph (10)(A) of that subsection 
if that individual is, or is eligible to be (1) an individual 
with respect to whom there is payable a State supplementary 
payment on the basis of which similarly situated individuals 
are eligible to receive medical assistance equal in amount, 
duration, and scope to that provided to individuals eligible 
under paragraph (10)(A), or (2) an eligible individual or 
eligible spouse, as defined in title XVI, with respect to whom 
supplemental security income benefits are payable; otherwise 
that individual shall be considered to be an individual 
eligible for medical assistance under paragraph (10)(C) of that 
subsection. In States which do not provide medical assistance 
to individuals pursuant to paragraph (10)(C) of that 
subsection, an individual who is eligible for medical 
assistance by reason of the requirements of this section 
concerning the deduction of incurred medical expenses from 
income shall be considered an individual eligible for medical 
assistance under paragraph (10)(A) of that subsection.
  (g) In addition to any other sanction available to a State, a 
State may provide for a reduction of any payment amount 
otherwise due with respect to a person who furnishes services 
under the plan in an amount equal to up to three times the 
amount of any payment sought to be collected by that person in 
violation of subsection (a)(25)(C).
  (h)(1) Nothing in this title (including subsections (a)(13) 
and (a)(30) of this section) shall be construed as authorizing 
the Secretary to limit the amount of payment that may be made 
under a plan under this title for home and community care, home 
and community-based services provided under subsection (c), 
(d), or (i) of section 1915 or under a waiver or demonstration 
project under section 1115, self-directed personal assistance 
services provided pursuant to a written plan of care under 
section 1915(j), and home and community-based attendant 
services and supports under section 1915(k).
  (2) Nothing in this title, title XVIII, or title XI shall be 
construed as prohibiting receipt of any care or services 
specified in paragraph (1) in an acute care hospital that are--
          (A) identified in an individual's person-centered 
        service plan (or comparable plan of care);
          (B) provided to meet needs of the individual that are 
        not met through the provision of hospital services;
          (C) not a substitute for services that the hospital 
        is obligated to provide through its conditions of 
        participation or under Federal or State law, or under 
        another applicable requirement; and
          (D) designed to ensure smooth transitions between 
        acute care settings and home and community-based 
        settings, and to preserve the individual's functional 
        abilities.
  (i)(1) In addition to any other authority under State law, 
where a State determines that a intermediate care facility for 
the mentally retarded which is certified for participation 
under its plan no longer substantially meets the requirements 
for such a facility under this title and further determines 
that the facility's deficiencies--
          (A) immediately jeopardize the health and safety of 
        its patients, the State shall provide for the 
        termination of the facility's certification for 
        participation under the plan and may provide, or
          (B) do not immediately jeopardize the health and 
        safety of its patients, the State may, in lieu of 
        providing for terminating the facility's certification 
        for participation under the plan, establish alternative 
        remedies if the State demonstrates to the Secretary's 
        satisfaction that the alternative remedies are 
        effective in deterring noncompliance and correcting 
        deficiencies, and may provide
that no payment will be made under the State plan with respect 
to any individual admitted to such facility after a date 
specified by the State.
  (2) The State shall not make such a decision with respect to 
a facility until the facility has had a reasonable opportunity, 
following the initial determination that it no longer 
substantially meets the requirements for such a facility under 
this title, to correct its deficiencies, and, following this 
period, has been given reasonable notice and opportunity for a 
hearing.
  (3) The State's decision to deny payment may be made 
effective only after such notice to the public and to the 
facility as may be provided for by the State, and its 
effectiveness shall terminate (A) when the State finds that the 
facility is in substantial compliance (or is making good faith 
efforts to achieve substantial compliance) with the 
requirements for such a facility under this title, or (B) in 
the case described in paragraph (1)(B), with the end of the 
eleventh month following the month such decision is made 
effective, whichever occurs first. If a facility to which 
clause (B) of the previous sentence applies still fails to 
substantially meet the provisions of the respective section on 
the date specified in such clause, the State shall terminate 
such facility's certification for participation under the plan 
effective with the first day of the first month following the 
month specified in such clause.
  (j) Notwithstanding any other requirement of this title, the 
Secretary may waive or modify any requirement of this title 
with respect to the medical assistance program in American 
Samoa and the Northern Mariana Islands, other than a waiver of 
the Federal medical assistance percentage, the limitation in 
section 1108(f),, the requirement that payment may be made for 
medical assistance only with respect to amounts expended by 
American Samoa or the Northern Mariana Islands for care and 
services described in a numbered paragraph of section 1905(a), 
or the requirement under subsection (qq)(1) (relating to data 
reporting).
  (k)(1) The medical assistance provided to an individual 
described in subclause (VIII) of subsection (a)(10)(A)(i) shall 
consist of benchmark coverage described in section 1937(b)(1) 
or benchmark equivalent coverage described in section 
1937(b)(2). Such medical assistance shall be provided subject 
to the requirements of section 1937, without regard to whether 
a State otherwise has elected the option to provide medical 
assistance through coverage under that section, unless an 
individual described in subclause (VIII) of subsection 
(a)(10)(A)(i) is also an individual for whom, under 
subparagraph (B) of section 1937(a)(2), the State may not 
require enrollment in benchmark coverage described in 
subsection (b)(1) of section 1937 or benchmark equivalent 
coverage described in subsection (b)(2) of that section.
  (2) Beginning with the first day of any fiscal year quarter 
that begins on or after April 1, 2010, and before January 1, 
2014, a State may elect through a State plan amendment to 
provide medical assistance to individuals who would be 
described in subclause (VIII) of subsection (a)(10)(A)(i) if 
that subclause were effective before January 1, 2014. A State 
may elect to phase-in the extension of eligibility for medical 
assistance to such individuals based on income, so long as the 
State does not extend such eligibility to individuals described 
in such subclause with higher income before making individuals 
described in such subclause with lower income eligible for 
medical assistance.
  (3) If an individual described in subclause (VIII) of 
subsection (a)(10)(A)(i) is the parent of a child who is under 
19 years of age (or such higher age as the State may have 
elected) who is eligible for medical assistance under the State 
plan or under a waiver of such plan (under that subclause or 
under a State plan amendment under paragraph (2), the 
individual may not be enrolled under the State plan unless the 
individual's child is enrolled under the State plan or under a 
waiver of the plan or is enrolled in other health insurance 
coverage. For purposes of the preceding sentence, the term 
``parent'' includes an individual treated as a caretaker 
relative for purposes of carrying out section 1931.
  (l)(1) Individuals described in this paragraph are--
          (A) women during pregnancy (and during the 60-day 
        period beginning on the last day of the pregnancy),
          (B) infants under one year of age,
          (C) children who have attained one year of age but 
        have not attained 6 years of age, and
          (D) children born after September 30, 1983 (or, at 
        the option of a State, after any earlier date), who 
        have attained 6 years of age but have not attained 19 
        years of age,
who are not described in any of subclauses (I) through (III) of 
subsection (a)(10)(A)(i) and whose family income does not 
exceed the income level established by the State under 
paragraph (2) for a family size equal to the size of the 
family, including the woman, infant, or child.
  (2)(A)(i) For purposes of paragraph (1) with respect to 
individuals described in subparagraph (A) or (B) of that 
paragraph, the State shall establish an income level which is a 
percentage (not less than the percentage provided under clause 
(ii) and not more than 185 percent) of the income official 
poverty line (as defined by the Office of Management and 
Budget, and revised annually in accordance with section 673(2) 
of the Omnibus Budget Reconciliation Act of 1981) applicable to 
a family of the size involved.
  (ii) The percentage provided under this clause, with respect 
to eligibility for medical assistance on or after--
          (I) July 1, 1989, is 75 percent, or, if greater, the 
        percentage provided under clause (iii), and
          (II) April 1, 1990, 133 percent, or, if greater, the 
        percentage provided under clause (iv).
  (iii) In the case of a State which, as of the date of the 
enactment of this clause, has elected to provide, and provides, 
medical assistance to individuals described in this subsection 
or has enacted legislation authorizing, or appropriating funds, 
to provide such assistance to such individuals before July 1, 
1989, the percentage provided under clause (ii)(I) shall not be 
less than--
          (I) the percentage specified by the State in an 
        amendment to its State plan (whether approved or not) 
        as of the date of the enactment of this clause, or
          (II) if no such percentage is specified as of the 
        date of the enactment of this clause, the percentage 
        established under the State's authorizing legislation 
        or provided for under the State's appropriations;
but in no case shall this clause require the percentage 
provided under clause (ii)(I) to exceed 100 percent.
  (iv) In the case of a State which, as of the date of the 
enactment of this clause, has established under clause (i), or 
has enacted legislation authorizing, or appropriating funds, to 
provide for, a percentage (of the income official poverty line) 
that is greater than 133 percent, the percentage provided under 
clause (ii) for medical assistance on or after April 1, 1990, 
shall not be less than--
          (I) the percentage specified by the State in an 
        amendment to its State plan (whether approved or not) 
        as of the date of the enactment of this clause, or
          (II) if no such percentage is specified as of the 
        date of the enactment of this clause, the percentage 
        established under the State's authorizing legislation 
        or provided for under the State's appropriations.
  (B) For purposes of paragraph (1) with respect to individuals 
described in subparagraph (C) of such paragraph, the State 
shall establish an income level which is equal to 133 percent 
of the income official poverty line described in subparagraph 
(A) applicable to a family of the size involved.
  (C) For purposes of paragraph (1) with respect to individuals 
described in subparagraph (D) of that paragraph, the State 
shall establish an income level which is equal to 100 percent 
(or, beginning January 1, 2014, 133 percent) of the income 
official poverty line described in subparagraph (A) applicable 
to a family of the size involved.
  (3) Notwithstanding subsection (a)(17), for individuals who 
are eligible for medical assistance because of subsection 
(a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or 
(a)(10)(A)(ii)(IX)--
          (A) application of a resource standard shall be at 
        the option of the State;
          (B) any resource standard or methodology that is 
        applied with respect to an individual described in 
        subparagraph (A) of paragraph (1) may not be more 
        restrictive than the resource standard or methodology 
        that is applied under title XVI;
          (C) any resource standard or methodology that is 
        applied with respect to an individual described in 
        subparagraph (B), (C), or (D) of paragraph (1) may not 
        be more restrictive than the corresponding methodology 
        that is applied under the State plan under part A of 
        title IV;
          (D) the income standard to be applied is the 
        appropriate income standard established under paragraph 
        (2); and
          (E) family income shall be determined in accordance 
        with the methodology employed under the State plan 
        under part A or E of title IV (except to the extent 
        such methodology is inconsistent with clause (D) of 
        subsection (a)(17)), and costs incurred for medical 
        care or for any other type of remedial care shall not 
        be taken into account.
Any different treatment provided under this paragraph for such 
individuals shall not, because of subsection (a)(17), require 
or permit such treatment for other individuals.
  (4)(A) In the case of any State which is providing medical 
assistance to its residents under a waiver granted under 
section 1115, the Secretary shall require the State to provide 
medical assistance for pregnant women and infants under age 1 
described in subsection (a)(10)(A)(i)(IV) and for children 
described in subsection (a)(10)(A)(i)(VI) or subsection 
(a)(10)(A)(i)(VII) in the same manner as the State would be 
required to provide such assistance for such individuals if the 
State had in effect a plan approved under this title.
  (B) In the case of a State which is not one of the 50 States 
or the District of Columbia, the State need not meet the 
requirement of subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), 
or (a)(10)(A)(i)(VII) and, for purposes of paragraph (2)(A), 
the State may substitute for the percentage provided under 
clause (ii) of such paragraph any percentage.
  (m)(1) Individuals described in this paragraph are 
individuals--
          (A) who are 65 years of age or older or are disabled 
        individuals (as determined under section 1614(a)(3)),
          (B) whose income (as determined under section 1612 
        for purposes of the supplemental security income 
        program, except as provided in paragraph (2)(C)) does 
        not exceed an income level established by the State 
        consistent with paragraph (2)(A), and
          (C) whose resources (as determined under section 1613 
        for purposes of the supplemental security income 
        program) do not exceed (except as provided in paragraph 
        (2)(B)) the maximum amount of resources that an 
        individual may have and obtain benefits under that 
        program.
  (2)(A) The income level established under paragraph (1)(B) 
may not exceed a percentage (not more than 100 percent) of the 
official poverty line (as defined by the Office of Management 
and Budget, and revised annually in accordance with section 
673(2) of the Omnibus Budget Reconciliation Act of 1981) 
applicable to a family of the size involved.
  (B) In the case of a State that provides medical assistance 
to individuals not described in subsection (a)(10)(A) and at 
the State's option, the State may use under paragraph (1)(C) 
such resource level (which is higher than the level described 
in that paragraph) as may be applicable with respect to 
individuals described in paragraph (1)(A) who are not described 
in subsection (a)(10)(A).
  (C) The provisions of section 1905(p)(2)(D) shall apply to 
determinations of income under this subsection in the same 
manner as they apply to determinations of income under section 
1905(p).
  (3) Notwithstanding subsection (a)(17), for individuals 
described in paragraph (1) who are covered under the State plan 
by virtue of subsection (a)(10)(A)(ii)(X)--
          (A) the income standard to be applied is the income 
        standard described in paragraph (1)(B), and
          (B) except as provided in section 1612(b)(4)(B)(ii), 
        costs incurred for medical care or for any other type 
        of remedial care shall not be taken into account in 
        determining income.
Any different treatment provided under this paragraph for such 
individuals shall not, because of subsection (a)(17), require 
or permit such treatment for other individuals.
  (4) Notwithstanding subsection (a)(17), for qualified 
medicare beneficiaries described in section 1905(p)(1)--
          (A) the income standard to be applied is the income 
        standard described in section 1905(p)(1)(B), and
          (B) except as provided in section 1612(b)(4)(B)(ii), 
        costs incurred for medical care or for any other type 
        of remedial care shall not be taken into account in 
        determining income.
Any different treatment provided under this paragraph for such 
individuals shall not, because of subsection (a)(17), require 
or permit such treatment for other individuals.
  (n)(1) In the case of medical assistance furnished under this 
title for medicare cost-sharing respecting the furnishing of a 
service or item to a qualified medicare beneficiary, the State 
plan may provide payment in an amount with respect to the 
service or item that results in the sum of such payment amount 
and any amount of payment made under title XVIII with respect 
to the service or item exceeding the amount that is otherwise 
payable under the State plan for the item or service for 
eligible individuals who are not qualified medicare 
beneficiaries.
  (2) In carrying out paragraph (1), a State is not required to 
provide any payment for any expenses incurred relating to 
payment for deductibles, coinsurance, or copayments for 
medicare cost-sharing to the extent that payment under title 
XVIII for the service would exceed the payment amount that 
otherwise would be made under the State plan under this title 
for such service if provided to an eligible recipient other 
than a medicare beneficiary.
  (3) In the case in which a State's payment for medicare cost-
sharing for a qualified medicare beneficiary with respect to an 
item or service is reduced or eliminated through the 
application of paragraph (2)--
          (A) for purposes of applying any limitation under 
        title XVIII on the amount that the beneficiary may be 
        billed or charged for the service, the amount of 
        payment made under title XVIII plus the amount of 
        payment (if any) under the State plan shall be 
        considered to be payment in full for the service;
          (B) the beneficiary shall not have any legal 
        liability to make payment to a provider or to an 
        organization described in section 1903(m)(1)(A) for the 
        service; and
          (C) any lawful sanction that may be imposed upon a 
        provider or such an organization for excess charges 
        under this title or title XVIII shall apply to the 
        imposition of any charge imposed upon the individual in 
        such case.
This paragraph shall not be construed as preventing payment of 
any medicare cost-sharing by a medicare supplemental policy or 
an employer retiree health plan on behalf of an individual.
  (o) Notwithstanding any provision of subsection (a) to the 
contrary, a State plan under this title shall provide that any 
supplemental security income benefits paid by reason of 
subparagraph (E) or (G) of section 1611(e)(1) to an individual 
who--
          (1) is eligible for medical assistance under the 
        plan, and
          (2) is in a hospital, skilled nursing facility, or 
        intermediate care facility at the time such benefits 
        are paid,
will be disregarded for purposes of determining the amount of 
any post-eligibility contribution by the individual to the cost 
of the care and services provided by the hospital, skilled 
nursing facility, or intermediate care facility.
  (p)(1) In addition to any other authority, a State may 
exclude any individual or entity for purposes of participating 
under the State plan under this title for any reason for which 
the Secretary could exclude the individual or entity from 
participation in a program under title XVIII under section 
1128, 1128A, or 1866(b)(2).
  (2) In order for a State to receive payments for medical 
assistance under section 1903(a), with respect to payments the 
State makes to a medicaid managed care organization (as defined 
in section 1903(m)) or to an entity furnishing services under a 
waiver approved under section 1915(b)(1), the State must 
provide that it will exclude from participation, as such an 
organization or entity, any organization or entity that--
          (A) could be excluded under section 1128(b)(8) 
        (relating to owners and managing employees who have 
        been convicted of certain crimes or received other 
        sanctions),
          (B) has, directly or indirectly, a substantial 
        contractual relationship (as defined by the Secretary) 
        with an individual or entity that is described in 
        section 1128(b)(8)(B), or
          (C) employs or contracts with any individual or 
        entity that is excluded from participation under this 
        title under section 1128 or 1128A for the provision of 
        health care, utilization review, medical social work, 
        or administrative services or employs or contracts with 
        any entity for the provision (directly or indirectly) 
        through such an excluded individual or entity of such 
        services.
  (3) As used in this subsection, the term ``exclude'' includes 
the refusal to enter into or renew a participation agreement or 
the termination of such an agreement.
  (q)(1)(A) In order to meet the requirement of subsection 
(a)(50), the State plan must provide that, in the case of an 
institutionalized individual or couple described in 
subparagraph (B), in determining the amount of the individual's 
or couple's income to be applied monthly to payment for the 
cost of care in an institution, there shall be deducted from 
the monthly income (in addition to other allowances otherwise 
provided under the State plan) a monthly personal needs 
allowance--
          (i) which is reasonable in amount for clothing and 
        other personal needs of the individual (or couple) 
        while in an institution, and
          (ii) which is not less (and may be greater) than the 
        minimum monthly personal needs allowance described in 
        paragraph (2).
  (B) In this subsection, the term ``institutionalized 
individual or couple'' means an individual or married couple--
          (i) who is an inpatient (or who are inpatients) in a 
        medical institution or nursing facility for which 
        payments are made under this title throughout a month, 
        and
          (ii) who is or are determined to be eligible for 
        medical assistance under the State plan.
  (2) The minimum monthly personal needs allowance described in 
this paragraph is $30 for an institutionalized individual and 
$60 for an institutionalized couple (if both are aged, blind, 
or disabled, and their incomes are considered available to each 
other in determining eligibility).
  (r)(1)(A) For purposes of sections 1902(a)(17) and 
1924(d)(1)(D) and for purposes of a waiver under section 1915, 
with respect to the post-eligibility treatment of income of 
individuals who are institutionalized or receiving home or 
community-based services under such a waiver, the treatment 
described in subparagraph (B) shall apply, there shall be 
disregarded reparation payments made by the Federal Republic of 
Germany, and there shall be taken into account amounts for 
incurred expenses for medical or remedial care that are not 
subject to payment by a third party, including--
          (i) medicare and other health insurance premiums, 
        deductibles, or coinsurance, and
          (ii) necessary medical or remedial care recognized 
        under State law but not covered under the State plan 
        under this title, subject to reasonable limits the 
        State may establish on the amount of these expenses.
  (B)(i) In the case of a veteran who does not have a spouse or 
a child, if the veteran--
          (I) receives, after the veteran has been determined 
        to be eligible for medical assistance under the State 
        plan under this title, a veteran's pension in excess of 
        $90 per month, and
          (II) resides in a State veterans home with respect to 
        which the Secretary of Veterans Affairs makes per diem 
        payments for nursing home care pursuant to section 
        1741(a) of title 38, United States Code,
any such pension payment, including any payment made due to the 
need for aid and attendance, or for unreimbursed medical 
expenses, that is in excess of $90 per month shall be counted 
as income only for the purpose of applying such excess payment 
to the State veterans home's cost of providing nursing home 
care to the veteran.
  (ii) The provisions of clause (i) shall apply with respect to 
a surviving spouse of a veteran who does not have a child in 
the same manner as they apply to a veteran described in such 
clause.
  (2)(A) The methodology to be employed in determining income 
and resource eligibility for individuals under subsection 
(a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), 
(a)(10)(A)(i)(VII), (a)(10)(A)(ii), (a)(10)(C)(i)(III), or (f) 
or under section 1905(p) may be less restrictive, and shall be 
no more restrictive, than the methodology--
          (i) in the case of groups consisting of aged, blind, 
        or disabled individuals, under the supplemental 
        security income program under title XVI, or
          (ii) in the case of other groups, under the State 
        plan most closely categorically related.
  (B) For purposes of this subsection and subsection (a)(10), 
methodology is considered to be ``no more restrictive'' if, 
using the methodology, additional individuals may be eligible 
for medical assistance and no individuals who are otherwise 
eligible are made ineligible for such assistance.
  (s) In order to meet the requirements of subsection (a)(55), 
the State plan must provide that payments to hospitals under 
the plan for inpatient hospital services furnished to infants 
who have not attained the age of 1 year, and to children who 
have not attained the age of 6 years and who receive such 
services in a disproportionate share hospital described in 
section 1923(b)(1), shall--
          (1) if made on a prospective basis (whether per diem, 
        per case, or otherwise) provide for an outlier 
        adjustment in payment amounts for medically necessary 
        inpatient hospital services involving exceptionally 
        high costs or exceptionally long lengths of stay,
          (2) not be limited by the imposition of day limits 
        with respect to the delivery of such services to such 
        individuals, and
          (3) not be limited by the imposition of dollar limits 
        (other than such limits resulting from prospective 
        payments as adjusted pursuant to paragraph (1)) with 
        respect to the delivery of such services to any such 
        individual who has not attained their first birthday 
        (or in the case of such an individual who is an 
        inpatient on his first birthday until such individual 
        is discharged).
  (t) Nothing in this title (including sections 1903(a) and 
1905(a)) shall be construed as authorizing the Secretary to 
deny or limit payments to a State for expenditures, for medical 
assistance for items or services, attributable to taxes of 
general applicability imposed with respect to the provision of 
such items or services.
  (u)(1) Individuals described in this paragraph are 
individuals--
          (A) who are entitled to elect COBRA continuation 
        coverage (as defined in paragraph (3)),
          (B) whose income (as determined under section 1612 
        for purposes of the supplemental security income 
        program) does not exceed 100 percent of the official 
        poverty line (as defined by the Office of Management 
        and Budget, and revised annually in accordance with 
        section 673(2) of the Omnibus Budget Reconciliation Act 
        of 1981) applicable to a family of the size involved,
          (C) whose resources (as determined under section 1613 
        for purposes of the supplemental security income 
        program) do not exceed twice the maximum amount of 
        resources that an individual may have and obtain 
        benefits under that program, and
          (D) with respect to whose enrollment for COBRA 
        continuation coverage the State has determined that the 
        savings in expenditures under this title resulting from 
        such enrollment is likely to exceed the amount of 
        payments for COBRA premiums made.
  (2) For purposes of subsection (a)(10)(F) and this 
subsection, the term ``COBRA premiums'' means the applicable 
premium imposed with respect to COBRA continuation coverage.
  (3) In this subsection, the term ``COBRA continuation 
coverage'' means coverage under a group health plan provided by 
an employer with 75 or more employees provided pursuant to 
title XXII of the Public Health Service Act, section 4980B of 
the Internal Revenue Code of 1986, or title VI of the Employee 
Retirement Income Security Act of 1974.
  (4) Notwithstanding subsection (a)(17), for individuals 
described in paragraph (1) who are covered under the State plan 
by virtue of subsection (a)(10)(A)(ii)(XI)--
          (A) the income standard to be applied is the income 
        standard described in paragraph (1)(B), and
          (B) except as provided in section 1612(b)(4)(B)(ii), 
        costs incurred for medical care or for any other type 
        of remedial care shall not be taken into account in 
        determining income.
Any different treatment provided under this paragraph for such 
individuals shall not, because of subsection (a)(10)(B) or 
(a)(17), require or permit such treatment for other 
individuals.
  (v) A State plan may provide for the making of determinations 
of disability or blindness for the purpose of determining 
eligibility for medical assistance under the State plan by the 
single State agency or its designee, and make medical 
assistance available to individuals whom it finds to be blind 
or disabled and who are determined otherwise eligible for such 
assistance during the period of time prior to which a final 
determination of disability or blindness is made by the Social 
Security Administration with respect to such an individual. In 
making such determinations, the State must apply the 
definitions of disability and blindness found in section 
1614(a) of the Social Security Act.
  (w)(1) For purposes of subsection (a)(57) and sections 
1903(m)(1)(A) and 1919(c)(2)(E), the requirement of this 
subsection is that a provider or organization (as the case may 
be) maintain written policies and procedures with respect to 
all adult individuals receiving medical care by or through the 
provider or organization--
          (A) to provide written information to each such 
        individual concerning--
                  (i) an individual's rights under State law 
                (whether statutory or as recognized by the 
                courts of the State) to make decisions 
                concerning such medical care, including the 
                right to accept or refuse medical or surgical 
                treatment and the right to formulate advance 
                directives (as defined in paragraph (3)), and
                  (ii) the provider's or organization's written 
                policies respecting the implementation of such 
                rights;
          (B) to document in the individual's medical record 
        whether or not the individual has executed an advance 
        directive;
          (C) not to condition the provision of care or 
        otherwise discriminate against an individual based on 
        whether or not the individual has executed an advance 
        directive;
          (D) to ensure compliance with requirements of State 
        law (whether statutory or as recognized by the courts 
        of the State) respecting advance directives; and
          (E) to provide (individually or with others) for 
        education for staff and the community on issues 
        concerning advance directives.
Subparagraph (C) shall not be construed as requiring the 
provision of care which conflicts with an advance directive.
  (2) The written information described in paragraph (1)(A) 
shall be provided to an adult individual--
          (A) in the case of a hospital, at the time of the 
        individual's admission as an inpatient,
          (B) in the case of a nursing facility, at the time of 
        the individual's admission as a resident,
          (C) in the case of a provider of home health care or 
        personal care services, in advance of the individual 
        coming under the care of the provider,
          (D) in the case of a hospice program, at the time of 
        initial receipt of hospice care by the individual from 
        the program, and
          (E) in the case of a medicaid managed care 
        organization, at the time of enrollment of the 
        individual with the organization.
  (3) Nothing in this section shall be construed to prohibit 
the application of a State law which allows for an objection on 
the basis of conscience for any health care provider or any 
agent of such provider which as a matter of conscience cannot 
implement an advance directive.
  (4) In this subsection, the term ``advance directive'' means 
a written instruction, such as a living will or durable power 
of attorney for health care, recognized under State law 
(whether statutory or as recognized by the courts of the State) 
and relating to the provision of such care when the individual 
is incapacitated.
  (5) For construction relating to this subsection, see section 
7 of the Assisted Suicide Funding Restriction Act of 1997 
(relating to clarification respecting assisted suicide, 
euthanasia, and mercy killing).
  (x) The Secretary shall establish a system, for 
implementation by not later than July 1, 1991, which provides 
for a unique identifier for each physician who furnishes 
services for which payment may be made under a State plan 
approved under this title.
  (y)(1) In addition to any other authority under State law, 
where a State determines that a psychiatric hospital which is 
certified for participation under its plan no longer meets the 
requirements for a psychiatric hospital (referred to in section 
1905(h)) and further finds that the hospital's deficiencies--
          (A) immediately jeopardize the health and safety of 
        its patients, the State shall terminate the hospital's 
        participation under the State plan; or
          (B) do not immediately jeopardize the health and 
        safety of its patients, the State may terminate the 
        hospital's participation under the State plan, or 
        provide that no payment will be made under the State 
        plan with respect to any individual admitted to such 
        hospital after the effective date of the finding, or 
        both.
  (2) Except as provided in paragraph (3), if a psychiatric 
hospital described in paragraph (1)(B) has not complied with 
the requirements for a psychiatric hospital under this title--
          (A) within 3 months after the date the hospital is 
        found to be out of compliance with such requirements, 
        the State shall provide that no payment will be made 
        under the State plan with respect to any individual 
        admitted to such hospital after the end of such 3-month 
        period, or
          (B) within 6 months after the date the hospital is 
        found to be out of compliance with such requirements, 
        no Federal financial participation shall be provided 
        under section 1903(a) with respect to further services 
        provided in the hospital until the State finds that the 
        hospital is in compliance with the requirements of this 
        title.
  (3) The Secretary may continue payments, over a period of not 
longer than 6 months from the date the hospital is found to be 
out of compliance with such requirements, if--
          (A) the State finds that it is more appropriate to 
        take alternative action to assure compliance of the 
        hospital with the requirements than to terminate the 
        certification of the hospital,
          (B) the State has submitted a plan and timetable for 
        corrective action to the Secretary for approval and the 
        Secretary approves the plan of corrective action, and
          (C) the State agrees to repay to the Federal 
        Government payments received under this paragraph if 
        the corrective action is not taken in accordance with 
        the approved plan and timetable.
  (z)(1) Individuals described in this paragraph are 
individuals not described in subsection (a)(10)(A)(i)--
          (A) who are infected with tuberculosis;
          (B) whose income (as determined under the State plan 
        under this title with respect to disabled individuals) 
        does not exceed the maximum amount of income a disabled 
        individual described in subsection (a)(10)(A)(i) may 
        have and obtain medical assistance under the plan; and
          (C) whose resources (as determined under the State 
        plan under this title with respect to disabled 
        individuals) do not exceed the maximum amount of 
        resources a disabled individual described in subsection 
        (a)(10)(A)(i) may have and obtain medical assistance 
        under the plan.
  (2) For purposes of subsection (a)(10), the term ``TB-related 
services'' means each of the following services relating to 
treatment of infection with tuberculosis:
          (A) Prescribed drugs.
          (B) Physicians' services and services described in 
        section 1905(a)(2).
          (C) Laboratory and X-ray services (including services 
        to confirm the presence of infection).
          (D) Clinic services and Federally-qualified health 
        center services.
          (E) Case management services (as defined in section 
        1915(g)(2)).
          (F) Services (other than room and board) designed to 
        encourage completion of regimens of prescribed drugs by 
        outpatients, including services to observe directly the 
        intake of prescribed drugs.
  (aa) Individuals described in this subsection are individuals 
who--
          (1) are not described in subsection (a)(10)(A)(i);
          (2) have not attained age 65;
          (3) have been screened for breast and cervical cancer 
        under the Centers for Disease Control and Prevention 
        breast and cervical cancer early detection program 
        established under title XV of the Public Health Service 
        Act (42 U.S.C. 300k et seq.) in accordance with the 
        requirements of section 1504 of that Act (42 U.S.C. 
        300n) and need treatment for breast or cervical cancer; 
        and
          (4) are not otherwise covered under creditable 
        coverage, as defined in section 2701(c) of the Public 
        Health Service Act (42 U.S.C. 300gg(c)), but applied 
        without regard to paragraph (1)(F) of such section.
  (bb) Payment for Services Provided by Federally-Qualified 
Health Centers and Rural Health Clinics.--
          (1) In general.--Beginning with fiscal year 2001 with 
        respect to services furnished on or after January 1, 
        2001, and each succeeding fiscal year, the State plan 
        shall provide for payment for services described in 
        section 1905(a)(2)(C) furnished by a Federally-
        qualified health center and services described in 
        section 1905(a)(2)(B) furnished by a rural health 
        clinic in accordance with the provisions of this 
        subsection.
          (2) Fiscal year 2001.--Subject to paragraph (4), for 
        services furnished on and after January 1, 2001, during 
        fiscal year 2001, the State plan shall provide for 
        payment for such services in an amount (calculated on a 
        per visit basis) that is equal to 100 percent of the 
        average of the costs of the center or clinic of 
        furnishing such services during fiscal years 1999 and 
        2000 which are reasonable and related to the cost of 
        furnishing such services, or based on such other tests 
        of reasonableness as the Secretary prescribes in 
        regulations under section 1833(a)(3), or, in the case 
        of services to which such regulations do not apply, the 
        same methodology used under section 1833(a)(3), 
        adjusted to take into account any increase or decrease 
        in the scope of such services furnished by the center 
        or clinic during fiscal year 2001.
          (3) Fiscal year 2002 and succeeding fiscal years.--
        Subject to paragraph (4), for services furnished during 
        fiscal year 2002 or a succeeding fiscal year, the State 
        plan shall provide for payment for such services in an 
        amount (calculated on a per visit basis) that is equal 
        to the amount calculated for such services under this 
        subsection for the preceding fiscal year--
                  (A) increased by the percentage increase in 
                the MEI (as defined in section 1842(i)(3)) 
                applicable to primary care services (as defined 
                in section 1842(i)(4)) for that fiscal year; 
                and
                  (B) adjusted to take into account any 
                increase or decrease in the scope of such 
                services furnished by the center or clinic 
                during that fiscal year.
          (4) Establishment of initial year payment amount for 
        new centers or clinics.--In any case in which an entity 
        first qualifies as a Federally-qualified health center 
        or rural health clinic after fiscal year 2000, the 
        State plan shall provide for payment for services 
        described in section 1905(a)(2)(C) furnished by the 
        center or services described in section 1905(a)(2)(B) 
        furnished by the clinic in the first fiscal year in 
        which the center or clinic so qualifies in an amount 
        (calculated on a per visit basis) that is equal to 100 
        percent of the costs of furnishing such services during 
        such fiscal year based on the rates established under 
        this subsection for the fiscal year for other such 
        centers or clinics located in the same or adjacent area 
        with a similar case load or, in the absence of such a 
        center or clinic, in accordance with the regulations 
        and methodology referred to in paragraph (2) or based 
        on such other tests of reasonableness as the Secretary 
        may specify. For each fiscal year following the fiscal 
        year in which the entity first qualifies as a 
        Federally-qualified health center or rural health 
        clinic, the State plan shall provide for the payment 
        amount to be calculated in accordance with paragraph 
        (3).
          (5) Administration in the case of managed care.--
                  (A) In general.--In the case of services 
                furnished by a Federally-qualified health 
                center or rural health clinic pursuant to a 
                contract between the center or clinic and a 
                managed care entity (as defined in section 
                1932(a)(1)(B)), the State plan shall provide 
                for payment to the center or clinic by the 
                State of a supplemental payment equal to the 
                amount (if any) by which the amount determined 
                under paragraphs (2), (3), and (4) of this 
                subsection exceeds the amount of the payments 
                provided under the contract.
                  (B) Payment schedule.--The supplemental 
                payment required under subparagraph (A) shall 
                be made pursuant to a payment schedule agreed 
                to by the State and the Federally-qualified 
                health center or rural health clinic, but in no 
                case less frequently than every 4 months.
          (6) Alternative payment methodologies.--
        Notwithstanding any other provision of this section, 
        the State plan may provide for payment in any fiscal 
        year to a Federally-qualified health center for 
        services described in section 1905(a)(2)(C) or to a 
        rural health clinic for services described in section 
        1905(a)(2)(B) in an amount which is determined under an 
        alternative payment methodology that--
                  (A) is agreed to by the State and the center 
                or clinic; and
                  (B) results in payment to the center or 
                clinic of an amount which is at least equal to 
                the amount otherwise required to be paid to the 
                center or clinic under this section.
  (cc)(1) Individuals described in this paragraph are 
individuals--
          (A) who are children who have not attained 19 years 
        of age and are born--
                  (i) on or after January 1, 2001 (or, at the 
                option of a State, on or after an earlier 
                date), in the case of the second, third, and 
                fourth quarters of fiscal year 2007;
                  (ii) on or after October 1, 1995 (or, at the 
                option of a State, on or after an earlier 
                date), in the case of each quarter of fiscal 
                year 2008; and
                  (iii) after October 1, 1989, in the case of 
                each quarter of fiscal year 2009 and each 
                quarter of any fiscal year thereafter;
          (B) who would be considered disabled under section 
        1614(a)(3)(C) (as determined under title XVI for 
        children but without regard to any income or asset 
        eligibility requirements that apply under such title 
        with respect to children); and
          (C) whose family income does not exceed such income 
        level as the State establishes and does not exceed--
                  (i) 300 percent of the poverty line (as 
                defined in section 2110(c)(5)) applicable to a 
                family of the size involved; or
                  (ii) such higher percent of such poverty line 
                as a State may establish, except that--
                          (I) any medical assistance provided 
                        to an individual whose family income 
                        exceeds 300 percent of such poverty 
                        line may only be provided with State 
                        funds; and
                          (II) no Federal financial 
                        participation shall be provided under 
                        section 1903(a) for any medical 
                        assistance provided to such an 
                        individual.
  (2)(A) If an employer of a parent of an individual described 
in paragraph (1) offers family coverage under a group health 
plan (as defined in section 2791(a) of the Public Health 
Service Act), the State shall--
          (i) notwithstanding section 1906, require such parent 
        to apply for, enroll in, and pay premiums for such 
        coverage as a condition of such parent's child being or 
        remaining eligible for medical assistance under 
        subsection (a)(10)(A)(ii)(XIX) if the parent is 
        determined eligible for such coverage and the employer 
        contributes at least 50 percent of the total cost of 
        annual premiums for such coverage; and
          (ii) if such coverage is obtained--
                  (I) subject to paragraph (2) of section 
                1916(h), reduce the premium imposed by the 
                State under that section in an amount that 
                reasonably reflects the premium contribution 
                made by the parent for private coverage on 
                behalf of a child with a disability; and
                  (II) treat such coverage as a third party 
                liability under subsection (a)(25).
  (B) In the case of a parent to which subparagraph (A) 
applies, a State, notwithstanding section 1906 but subject to 
paragraph (1)(C)(ii), may provide for payment of any portion of 
the annual premium for such family coverage that the parent is 
required to pay. Any payments made by the State under this 
subparagraph shall be considered, for purposes of section 
1903(a), to be payments for medical assistance.
  (dd) Electronic Transmission of Information.--If the State 
agency determining eligibility for medical assistance under 
this title or child health assistance under title XXI verifies 
an element of eligibility based on information from an Express 
Lane Agency (as defined in subsection (e)(13)(F)), or from 
another public agency, then the applicant's signature under 
penalty of perjury shall not be required as to such element. 
Any signature requirement for an application for medical 
assistance may be satisfied through an electronic signature, as 
defined in section 1710(1) of the Government Paperwork 
Elimination Act (44 U.S.C. 3504 note). The requirements of 
subparagraphs (A) and (B) of section 1137(d)(2) may be met 
through evidence in digital or electronic form.
  (ee)(1) For purposes of subsection (a)(46)(B)(ii), the 
requirements of this subsection with respect to an individual 
declaring to be a citizen or national of the United States for 
purposes of establishing eligibility under this title, are, in 
lieu of requiring the individual to present satisfactory 
documentary evidence of citizenship or nationality under 
section 1903(x) (if the individual is not described in 
paragraph (2) of that section), as follows:
          (A) The State submits the name and social security 
        number of the individual to the Commissioner of Social 
        Security as part of the program established under 
        paragraph (2).
          (B) If the State receives notice from the 
        Commissioner of Social Security that the name or social 
        security number, or the declaration of citizenship or 
        nationality, of the individual is inconsistent with 
        information in the records maintained by the 
        Commissioner--
                  (i) the State makes a reasonable effort to 
                identify and address the causes of such 
                inconsistency, including through typographical 
                or other clerical errors, by contacting the 
                individual to confirm the accuracy of the name 
                or social security number submitted or 
                declaration of citizenship or nationality and 
                by taking such additional actions as the 
                Secretary, through regulation or other 
                guidance, or the State may identify, and 
                continues to provide the individual with 
                medical assistance while making such effort; 
                and
                  (ii) in the case such inconsistency is not 
                resolved under clause (i), the State--
                          (I) notifies the individual of such 
                        fact;
                          (II) provides the individual with a 
                        period of 90 days from the date on 
                        which the notice required under 
                        subclause (I) is received by the 
                        individual to either present 
                        satisfactory documentary evidence of 
                        citizenship or nationality (as defined 
                        in section 1903(x)(3)) or resolve the 
                        inconsistency with the Commissioner of 
                        Social Security (and continues to 
                        provide the individual with medical 
                        assistance during such 90-day period); 
                        and
                          (III) disenrolls the individual from 
                        the State plan under this title within 
                        30 days after the end of such 90-day 
                        period if no such documentary evidence 
                        is presented or if such inconsistency 
                        is not resolved.
  (2)(A) Each State electing to satisfy the requirements of 
this subsection for purposes of section 1902(a)(46)(B) shall 
establish a program under which the State submits at least 
monthly to the Commissioner of Social Security for comparison 
of the name and social security number, of each individual 
newly enrolled in the State plan under this title that month 
who is not described in section 1903(x)(2) and who declares to 
be a United States citizen or national, with information in 
records maintained by the Commissioner.
  (B) In establishing the State program under this paragraph, 
the State may enter into an agreement with the Commissioner of 
Social Security--
          (i) to provide, through an on-line system or 
        otherwise, for the electronic submission of, and 
        response to, the information submitted under 
        subparagraph (A) for an individual enrolled in the 
        State plan under this title who declares to be citizen 
        or national on at least a monthly basis; or
          (ii) to provide for a determination of the 
        consistency of the information submitted with the 
        information maintained in the records of the 
        Commissioner through such other method as agreed to by 
        the State and the Commissioner and approved by the 
        Secretary, provided that such method is no more 
        burdensome for individuals to comply with than any 
        burdens that may apply under a method described in 
        clause (i).
  (C) The program established under this paragraph shall 
provide that, in the case of any individual who is required to 
submit a social security number to the State under subparagraph 
(A) and who is unable to provide the State with such number, 
shall be provided with at least the reasonable opportunity to 
present satisfactory documentary evidence of citizenship or 
nationality (as defined in section 1903(x)(3)) as is provided 
under clauses (i) and (ii) of section 1137(d)(4)(A) to an 
individual for the submittal to the State of evidence 
indicating a satisfactory immigration status.
  (3)(A) The State agency implementing the plan approved under 
this title shall, at such times and in such form as the 
Secretary may specify, provide information on the percentage 
each month that the inconsistent submissions bears to the total 
submissions made for comparison for such month. For purposes of 
this subparagraph, a name, social security number, or 
declaration of citizenship or nationality of an individual 
shall be treated as inconsistent and included in the 
determination of such percentage only if--
          (i) the information submitted by the individual is 
        not consistent with information in records maintained 
        by the Commissioner of Social Security;
          (ii) the inconsistency is not resolved by the State;
          (iii) the individual was provided with a reasonable 
        period of time to resolve the inconsistency with the 
        Commissioner of Social Security or provide satisfactory 
        documentation of citizenship status and did not 
        successfully resolve such inconsistency; and
          (iv) payment has been made for an item or service 
        furnished to the individual under this title.
  (B) If, for any fiscal year, the average monthly percentage 
determined under subparagraph (A) is greater than 3 percent--
          (i) the State shall develop and adopt a corrective 
        plan to review its procedures for verifying the 
        identities of individuals seeking to enroll in the 
        State plan under this title and to identify and 
        implement changes in such procedures to improve their 
        accuracy; and
          (ii) pay to the Secretary an amount equal to the 
        amount which bears the same ratio to the total payments 
        under the State plan for the fiscal year for providing 
        medical assistance to individuals who provided 
        inconsistent information as the number of individuals 
        with inconsistent information in excess of 3 percent of 
        such total submitted bears to the total number of 
        individuals with inconsistent information.
  (C) The Secretary may waive, in certain limited cases, all or 
part of the payment under subparagraph (B)(ii) if the State is 
unable to reach the allowable error rate despite a good faith 
effort by such State.
  (D) Subparagraphs (A) and (B) shall not apply to a State for 
a fiscal year if there is an agreement described in paragraph 
(2)(B) in effect as of the close of the fiscal year that 
provides for the submission on a real-time basis of the 
information described in such paragraph.
  (4) Nothing in this subsection shall affect the rights of any 
individual under this title to appeal any disenrollment from a 
State plan.
  (ff) Notwithstanding any other requirement of this title or 
any other provision of Federal or State law, a State shall 
disregard the following property from resources for purposes of 
determining the eligibility of an individual who is an Indian 
for medical assistance under this title:
          (1) Property, including real property and 
        improvements, that is held in trust, subject to Federal 
        restrictions, or otherwise under the supervision of the 
        Secretary of the Interior, located on a reservation, 
        including any federally recognized Indian Tribe's 
        reservation, pueblo, or colony, including former 
        reservations in Oklahoma, Alaska Native regions 
        established by the Alaska Native Claims Settlement Act, 
        and Indian allotments on or near a reservation as 
        designated and approved by the Bureau of Indian Affairs 
        of the Department of the Interior.
          (2) For any federally recognized Tribe not described 
        in paragraph (1), property located within the most 
        recent boundaries of a prior Federal reservation.
          (3) Ownership interests in rents, leases, royalties, 
        or usage rights related to natural resources (including 
        extraction of natural resources or harvesting of 
        timber, other plants and plant products, animals, fish, 
        and shellfish) resulting from the exercise of federally 
        protected rights.
          (4) Ownership interests in or usage rights to items 
        not covered by paragraphs (1) through (3) that have 
        unique religious, spiritual, traditional, or cultural 
        significance or rights that support subsistence or a 
        traditional lifestyle according to applicable tribal 
        law or custom.
  (gg) Maintenance of Effort.--
          (1) General requirement to maintain eligibility 
        standards until state exchange is fully operational.--
        Subject to the succeeding paragraphs of this 
        subsection, during the period that begins on the date 
        of enactment of the Patient Protection and Affordable 
        Care Act and ends on the date on which the Secretary 
        determines that an Exchange established by the State 
        under section 1311 of the Patient Protection and 
        Affordable Care Act is fully operational, as a 
        condition for receiving any Federal payments under 
        section 1903(a) for calendar quarters occurring during 
        such period, a State shall not have in effect 
        eligibility standards, methodologies, or procedures 
        under the State plan under this title or under any 
        waiver of such plan that is in effect during that 
        period, that are more restrictive than the eligibility 
        standards, methodologies, or procedures, respectively, 
        under the plan or waiver that are in effect on the date 
        of enactment of the Patient Protection and Affordable 
        Care Act.
          (2) Continuation of eligibility standards for 
        children through september 30, 2029.--The requirement 
        under paragraph (1) shall continue to apply to a State 
        through September 30, 2029, (but during the period that 
        begins on October 1, 2019, and ends on September 30, 
        2029, only with respect to children in families whose 
        income does not exceed 300 percent of the poverty line 
        (as defined in section 2110(c)(5)) applicable to a 
        family of the size involved) with respect to the 
        eligibility standards, methodologies, and procedures 
        under the State plan under this title or under any 
        waiver of such plan that are applicable to determining 
        the eligibility for medical assistance of any child who 
        is under 19 years of age (or such higher age as the 
        State may have elected).
          (3) Nonapplication.--During the period that begins on 
        January 1, 2011, and ends on December 31, 2013, the 
        requirement under paragraph (1) shall not apply to a 
        State with respect to nonpregnant, nondisabled adults 
        who are eligible for medical assistance under the State 
        plan or under a waiver of the plan at the option of the 
        State and whose income exceeds 133 percent of the 
        poverty line (as defined in section 2110(c)(5)) 
        applicable to a family of the size involved if, on or 
        after December 31, 2010, the State certifies to the 
        Secretary that, with respect to the State fiscal year 
        during which the certification is made, the State has a 
        budget deficit, or with respect to the succeeding State 
        fiscal year, the State is projected to have a budget 
        deficit. Upon submission of such a certification to the 
        Secretary, the requirement under paragraph (1) shall 
        not apply to the State with respect to any remaining 
        portion of the period described in the preceding 
        sentence.
          (4) Determination of compliance.--
                  (A) States shall apply modified adjusted 
                gross income.--A State's determination of 
                income in accordance with subsection (e)(14) 
                shall not be considered to be eligibility 
                standards, methodologies, or procedures that 
                are more restrictive than the standards, 
                methodologies, or procedures in effect under 
                the State plan or under a waiver of the plan on 
                the date of enactment of the Patient Protection 
                and Affordable Care Act for purposes of 
                determining compliance with the requirements of 
                paragraph (1), (2), or (3).
                  (B) States may expand eligibility or move 
                waivered populations into coverage under the 
                state plan.--With respect to any period 
                applicable under paragraph (1), (2), or (3), a 
                State that applies eligibility standards, 
                methodologies, or procedures under the State 
                plan under this title or under any waiver of 
                the plan that are less restrictive than the 
                eligibility standards, methodologies, or 
                procedures, applied under the State plan or 
                under a waiver of the plan on the date of 
                enactment of the Patient Protection and 
                Affordable Care Act, or that makes individuals 
                who, on such date of enactment, are eligible 
                for medical assistance under a waiver of the 
                State plan, after such date of enactment 
                eligible for medical assistance through a State 
                plan amendment with an income eligibility level 
                that is not less than the income eligibility 
                level that applied under the waiver, or as a 
                result of the application of subclause (VIII) 
                of section 1902(a)(10)(A)(i), shall not be 
                considered to have in effect eligibility 
                standards, methodologies, or procedures that 
                are more restrictive than the standards, 
                methodologies, or procedures in effect under 
                the State plan or under a waiver of the plan on 
                the date of enactment of the Patient Protection 
                and Affordable Care Act for purposes of 
                determining compliance with the requirements of 
                paragraph (1), (2), or (3).
  (hh)(1) A State may elect to phase-in the extension of 
eligibility for medical assistance to individuals described in 
subclause (XX) of subsection (a)(10)(A)(ii) based on the 
categorical group (including nonpregnant childless adults) or 
income, so long as the State does not extend such eligibility 
to individuals described in such subclause with higher income 
before making individuals described in such subclause with 
lower income eligible for medical assistance.
  (2) If an individual described in subclause (XX) of 
subsection (a)(10)(A)(ii) is the parent of a child who is under 
19 years of age (or such higher age as the State may have 
elected) who is eligible for medical assistance under the State 
plan or under a waiver of such plan, the individual may not be 
enrolled under the State plan unless the individual's child is 
enrolled under the State plan or under a waiver of the plan or 
is enrolled in other health insurance coverage. For purposes of 
the preceding sentence, the term ``parent'' includes an 
individual treated as a caretaker relative for purposes of 
carrying out section 1931.
  (ii)(1) Individuals described in this subsection are 
individuals--
                  (A) whose income does not exceed an income 
                eligibility level established by the State that 
                does not exceed the highest income eligibility 
                level established under the State plan under 
                this title (or under its State child health 
                plan under title XXI) for pregnant women; and
                  (B) who are not pregnant.
          (2) At the option of a State, individuals described 
        in this subsection may include individuals who, had 
        individuals applied on or before January 1, 2007, would 
        have been made eligible pursuant to the standards and 
        processes imposed by that State for benefits described 
        in clause (XVI) of the matter following subparagraph 
        (G) of section subsection (a)(10) pursuant to a waiver 
        granted under section 1115.
          (3) At the option of a State, for purposes of 
        subsection (a)(17)(B), in determining eligibility for 
        services under this subsection, the State may consider 
        only the income of the applicant or recipient.
  (jj) Primary Care Services Defined.--For purposes of 
subsection (a)(13)(C), the term ``primary care services'' 
means--
          (1) evaluation and management services that are 
        procedure codes (for services covered under title 
        XVIII) for services in the category designated 
        Evaluation and Management in the Healthcare Common 
        Procedure Coding System (established by the Secretary 
        under section 1848(c)(5) as of December 31, 2009, and 
        as subsequently modified); and
          (2) services related to immunization administration 
        for vaccines and toxoids for which CPT codes 90465, 
        90466, 90467, 90468, 90471, 90472, 90473, or 90474 (as 
        subsequently modified) apply under such System.
  (kk) Provider and Supplier Screening, Enrollment, Oversight, 
and Reporting Requirements.--For purposes of subsection 
(a)(77), the requirements of this subsection are the following:
          (1) Screening.--The State complies with the process 
        for screening providers and suppliers under this title, 
        as established by the Secretary under section 
        1866(j)(2).
          (2) Provisional period of enhanced oversight for new 
        providers and suppliers.--The State complies with 
        procedures to provide for a provisional period of 
        enhanced oversight for new providers and suppliers 
        under this title, as established by the Secretary under 
        section 1866(j)(3).
          (3) Disclosure requirements.--The State requires 
        providers and suppliers under the State plan or under a 
        waiver of the plan to comply with the disclosure 
        requirements established by the Secretary under section 
        1866(j)(5).
          (4) Temporary moratorium on enrollment of new 
        providers or suppliers.--
                  (A) Temporary moratorium imposed by the 
                secretary.--
                          (i) In general.--Subject to clause 
                        (ii), the State complies with any 
                        temporary moratorium on the enrollment 
                        of new providers or suppliers imposed 
                        by the Secretary under section 
                        1866(j)(7).
                          (ii) Exceptions.--
                                  (I) Compliance with 
                                moratorium.--A State shall not 
                                be required to comply with a 
                                temporary moratorium described 
                                in clause (i) if the State 
                                determines that the imposition 
                                of such temporary moratorium 
                                would adversely impact 
                                beneficiaries' access to 
                                medical assistance.
                                  (II) FFP available.--
                                Notwithstanding section 
                                1903(i)(2)(E), payment may be 
                                made to a State under this 
                                title with respect to amounts 
                                expended for items and services 
                                described in such section if 
                                the Secretary, in consultation 
                                with the State agency 
                                administering the State plan 
                                under this title (or a waiver 
                                of the plan), determines that 
                                denying payment to the State 
                                pursuant to such section would 
                                adversely impact beneficiaries' 
                                access to medical assistance. 
                          (iii) Limitation on charges to 
                        beneficiaries.--With respect to any 
                        amount expended for items or services 
                        furnished during calendar quarters 
                        beginning on or after October 1, 2017, 
                        the State prohibits, during the period 
                        of a temporary moratorium described in 
                        clause (i), a provider meeting the 
                        requirements specified in subparagraph 
                        (C)(iii) of section 1866(j)(7) from 
                        charging an individual or other person 
                        eligible to receive medical assistance 
                        under the State plan under this title 
                        (or a waiver of the plan) for an item 
                        or service described in section 
                        1903(i)(2)(E) furnished to such an 
                        individual.
                  (B) Moratorium on enrollment of providers and 
                suppliers.--At the option of the State, the 
                State imposes, for purposes of entering into 
                participation agreements with providers or 
                suppliers under the State plan or under a 
                waiver of the plan, periods of enrollment 
                moratoria, or numerical caps or other limits, 
                for providers or suppliers identified by the 
                Secretary as being at high-risk for fraud, 
                waste, or abuse as necessary to combat fraud, 
                waste, or abuse, but only if the State 
                determines that the imposition of any such 
                period, cap, or other limits would not 
                adversely impact beneficiaries' access to 
                medical assistance.
          (5) Compliance programs.--The State requires 
        providers and suppliers under the State plan or under a 
        waiver of the plan to establish, in accordance with the 
        requirements of section 1866(j)(7), a compliance 
        program that contains the core elements established 
        under subparagraph (B) of that section 1866(j)(7) for 
        providers or suppliers within a particular industry or 
        category.
          (6) Reporting of adverse provider actions.--The State 
        complies with the national system for reporting 
        criminal and civil convictions, sanctions, negative 
        licensure actions, and other adverse provider actions 
        to the Secretary, through the Administrator of the 
        Centers for Medicare & Medicaid Services, in accordance 
        with regulations of the Secretary.
          (7) Enrollment and npi of ordering or referring 
        providers.--The State requires--
                  (A) all ordering or referring physicians or 
                other professionals to be enrolled under the 
                State plan or under a waiver of the plan as a 
                participating provider; and
                  (B) the national provider identifier of any 
                ordering or referring physician or other 
                professional to be specified on any claim for 
                payment that is based on an order or referral 
                of the physician or other professional.
          (8) Provider terminations.--
                  (A) In general.--Beginning on July 1, 2018, 
                in the case of a notification under subsection 
                (a)(41) with respect to a termination for a 
                reason specified in section 455.101 of title 
                42, Code of Federal Regulations (as in effect 
                on November 1, 2015) or for any other reason 
                specified by the Secretary, of the 
                participation of a provider of services or any 
                other person under the State plan (or under a 
                waiver of the plan), the State, not later than 
                30 days after the effective date of such 
                termination, submits to the Secretary with 
                respect to any such provider or person, as 
                appropriate--
                          (i) the name of such provider or 
                        person;
                          (ii) the provider type of such 
                        provider or person;
                          (iii) the specialty of such 
                        provider's or person's practice;
                          (iv) the date of birth, Social 
                        Security number, national provider 
                        identifier (if applicable), Federal 
                        taxpayer identification number, and the 
                        State license or certification number 
                        of such provider or person (if 
                        applicable);
                          (v) the reason for the termination;
                          (vi) a copy of the notice of 
                        termination sent to the provider or 
                        person;
                          (vii) the date on which such 
                        termination is effective, as specified 
                        in the notice; and
                          (viii) any other information required 
                        by the Secretary.
                  (B) Effective date defined.--For purposes of 
                this paragraph, the term ``effective date'' 
                means, with respect to a termination described 
                in subparagraph (A), the later of--
                          (i) the date on which such 
                        termination is effective, as specified 
                        in the notice of such termination; or
                          (ii) the date on which all appeal 
                        rights applicable to such termination 
                        have been exhausted or the timeline for 
                        any such appeal has expired.
          (9) Other state oversight.--Nothing in this 
        subsection shall be interpreted to preclude or limit 
        the ability of a State to engage in provider and 
        supplier screening or enhanced provider and supplier 
        oversight activities beyond those required by the 
        Secretary.
          (10) Streamlined enrollment process for eligible out-
        of-state providers.--
                  (A) In general.--If the State does not have a 
                standard agreement with other States governing 
                coverage and payment for services furnished to 
                Medicaid-eligible children with medically 
                complex conditions that was developed 
                consistent with guidance issued by the 
                Secretary under section 1945A, the State--
                          (i) adopts and implements a process 
                        to allow an eligible out-of-State 
                        provider to enroll under the State plan 
                        (or a waiver of such plan) to furnish 
                        items and services to, or order, 
                        prescribe, refer, or certify 
                        eligibility for, items and services for 
                        qualifying individuals without the 
                        imposition of screening or enrollment 
                        requirements in addition to those 
                        imposed by the State in which the 
                        eligible out-of-State provider is 
                        located; and
                          (ii) provides that an eligible out-
                        of-State provider that enrolls as a 
                        participating provider in the State 
                        plan (or a waiver of such plan) through 
                        such process shall be so enrolled for a 
                        5-year period, unless the provider is 
                        terminated or excluded from 
                        participation during such period.
                  (B) Definitions.--In this paragraph:
                          (i) Eligible out-of-state provider.--
                        The term ``eligible out-of-State 
                        provider'' means, with respect to a 
                        State, a provider--
                                  (I) that is located in any 
                                other State;
                                  (II) that--
                                          (aa) was determined 
                                        by the Secretary to 
                                        have a limited risk of 
                                        fraud, waste, and abuse 
                                        for purposes of 
                                        determining the level 
                                        of screening to be 
                                        conducted under section 
                                        1866(j)(2), has been so 
                                        screened under such 
                                        section 1866(j)(2), and 
                                        is enrolled in the 
                                        Medicare program under 
                                        title XVIII; or
                                          (bb) was determined 
                                        by the State agency 
                                        administering or 
                                        supervising the 
                                        administration of the 
                                        State plan (or a waiver 
                                        of such plan) of such 
                                        other State to have a 
                                        limited risk of fraud, 
                                        waste, and abuse for 
                                        purposes of determining 
                                        the level of screening 
                                        to be conducted under 
                                        paragraph (1) of this 
                                        subsection, has been so 
                                        screened under such 
                                        paragraph (1), and is 
                                        enrolled under such 
                                        State plan (or a waiver 
                                        of such plan); and
                                  (III) that has not been--
                                          (aa) excluded from 
                                        participation in any 
                                        Federal health care 
                                        program pursuant to 
                                        section 1128 or 1128A;
                                          (bb) excluded from 
                                        participation in the 
                                        State plan (or a waiver 
                                        of such plan) pursuant 
                                        to part 1002 of title 
                                        42, Code of Federal 
                                        Regulations (or any 
                                        successor regulation), 
                                        or State law; or
                                          (cc) terminated from 
                                        participating in a 
                                        Federal health care 
                                        program or the State 
                                        plan (or a waiver of 
                                        such plan) for a reason 
                                        described in paragraph 
                                        (8)(A).
                          (ii) Qualifying individual.--The term 
                        ``qualifying individual'' means an 
                        individual under 21 years of age who is 
                        enrolled under the State plan (or 
                        waiver of such plan).
                          (iii) State.--The term ``State'' 
                        means 1 of the 50 States or the 
                        District of Columbia.
  (ll) Termination Notification Database.--In the case of a 
provider of services or any other person whose participation 
under this title or title XXI is terminated (as described in 
subsection (kk)(8)), the Secretary shall, not later than 30 
days after the date on which the Secretary is notified of such 
termination under subsection (a)(41) (as applicable), review 
such termination and, if the Secretary determines appropriate, 
include such termination in any database or similar system 
developed pursuant to section 6401(b)(2) of the Patient 
Protection and Affordable Care Act (42 U.S.C. 1395cc note; 
Public Law 111-148).
  (mm) Directory Physician or Provider Described.--A physician 
or provider described in this subsection is--
          (1) in the case of a physician or provider of a 
        provider type for which the State agency, as a 
        condition on receiving payment for items and services 
        furnished by the physician or provider to individuals 
        eligible to receive medical assistance under the State 
        plan, requires the enrollment of the physician or 
        provider with the State agency, a physician or a 
        provider that--
                  (A) is enrolled with the agency as of the 
                date on which the directory is published or 
                updated (as applicable) under subsection 
                (a)(83); and
                  (B) received payment under the State plan in 
                the 12-month period preceding such date; and
          (2) in the case of a physician or provider of a 
        provider type for which the State agency does not 
        require such enrollment, a physician or provider that 
        received payment under the State plan (or a waiver of 
        the plan) in the 12-month period preceding the date on 
        which the directory is published or updated (as 
        applicable) under subsection (a)(83).
  (nn) Juvenile; Eligible Juvenile; Public Institution.--For 
purposes of subsection (a)(84) and this subsection:
          (1) Juvenile.--The term ``juvenile'' means an 
        individual who is--
                  (A) under 21 years of age; or
                  (B) described in subsection 
                (a)(10)(A)(i)(IX).
          (2) Eligible juvenile.--The term ``eligible 
        juvenile'' means a juvenile who is an inmate of a 
        public institution and who--
                  (A) was determined eligible for medical 
                assistance under the State plan (or waiver of 
                such plan) immediately before becoming an 
                inmate of such a public institution; or
                  (B) is determined eligible for such medical 
                assistance while an inmate of a public 
                institution.
          (3) Inmate of a public institution.--The term 
        ``inmate of a public institution'' has the meaning 
        given such term for purposes of applying the 
        subdivision (A) following the last numbered paragraph 
        of section 1905(a), taking into account the exception 
        in such subdivision for a patient of a medical 
        institution.
  (oo) Drug Review and Utilization Requirements.--
          (1) In general.--For purposes of subsection (a)(85), 
        the drug review and utilization requirements under this 
        subsection are, subject to paragraph (3) and beginning 
        October 1, 2019, the following:
                  (A) Claims review limitations.--
                          (i) In general.--The State has in 
                        place--
                                  (I) safety edits (as 
                                specified by the State) for 
                                subsequent fills for opioids 
                                and a claims review automated 
                                process (as designed and 
                                implemented by the State) that 
                                indicates when an individual 
                                enrolled under the State plan 
                                (or under a waiver of the State 
                                plan) is prescribed a 
                                subsequent fill of opioids in 
                                excess of any limitation that 
                                may be identified by the State;
                                  (II) safety edits (as 
                                specified by the State) on the 
                                maximum daily morphine 
                                equivalent that can be 
                                prescribed to an individual 
                                enrolled under the State plan 
                                (or under a waiver of the State 
                                plan) for treatment of chronic 
                                pain and a claims review 
                                automated process (as designed 
                                and implemented by the State) 
                                that indicates when an 
                                individual enrolled under the 
                                plan (or waiver) is prescribed 
                                the morphine equivalent for 
                                such treatment in excess of any 
                                limitation that may be 
                                identified by the State; and
                                  (III) a claims review 
                                automated process (as designed 
                                and implemented by the State) 
                                that monitors when an 
                                individual enrolled under the 
                                State plan (or under a waiver 
                                of the State plan) is 
                                concurrently prescribed opioids 
                                and--
                                          (aa) benzodiazepines; 
                                        or
                                          (bb) antipsychotics.
                          (ii) Managed care entities.--The 
                        State requires each managed care entity 
                        (as defined in section 1932(a)(1)(B)) 
                        with respect to which the State has a 
                        contract under section 1903(m) or under 
                        section 1905(t)(3) to have in place, 
                        subject to paragraph (3), with respect 
                        to individuals who are eligible for 
                        medical assistance under the State plan 
                        (or under a waiver of the State plan) 
                        and who are enrolled with the entity, 
                        the limitations described in subclauses 
                        (I) and (II) of clause (i) and a claims 
                        review automated process described in 
                        subclause (III) of such clause.
                          (iii) Rules of construction.--Nothing 
                        in this subparagraph may be construed 
                        as prohibiting a State or managed care 
                        entity from designing and implementing 
                        a claims review automated process under 
                        this subparagraph that provides for 
                        prospective or retrospective reviews of 
                        claims. Nothing in this subparagraph 
                        shall be understood as prohibiting the 
                        exercise of clinical judgment from a 
                        provider enrolled as a participating 
                        provider in a State plan (or waiver of 
                        the State plan) or contracting with a 
                        managed care entity regarding the best 
                        items and services for an individual 
                        enrolled under such State plan (or 
                        waiver).
                  (B) Program to monitor antipsychotic 
                medications by children.--The State has in 
                place a program (as designed and implemented by 
                the State) to monitor and manage the 
                appropriate use of antipsychotic medications by 
                children enrolled under the State plan (or 
                under a waiver of the State plan) and submits 
                annually to the Secretary such information as 
                the Secretary may require on activities carried 
                out under such program for individuals not more 
                than the age of 18 years generally and children 
                in foster care specifically.
                  (C) Fraud and abuse identification.--The 
                State has in place a process (as designed and 
                implemented by the State) that identifies 
                potential fraud or abuse of controlled 
                substances by individuals enrolled under the 
                State plan (or under a waiver of the State 
                plan), health care providers prescribing drugs 
                to individuals so enrolled, and pharmacies 
                dispensing drugs to individuals so enrolled.
                  (D) Reports.--The State shall include in the 
                annual report submitted to the Secretary under 
                section 1927(g)(3)(D) information on the 
                limitations, requirement, program, and 
                processes applied by the State under 
                subparagraphs (A) through (C) in accordance 
                with such manner and time as specified by the 
                Secretary.
                  (E) Clarification.--Nothing shall prevent a 
                State from satisfying the requirement--
                          (i) described in subparagraph (A) by 
                        having safety edits or a claims review 
                        automated process described in such 
                        subparagraph that was in place before 
                        October 1, 2019;
                          (ii) described in subparagraph (B) by 
                        having a program described in such 
                        subparagraph that was in place before 
                        such date; or
                          (iii) described in subparagraph (C) 
                        by having a process described in such 
                        subparagraph that was in place before 
                        such date.
          (2) Annual report by secretary.--For each fiscal year 
        beginning with fiscal year 2020, the Secretary shall 
        submit to Congress a report on the most recent 
        information submitted by States under paragraph (1)(D).
          (3) Exceptions.--
                  (A) Certain individuals exempted.--The drug 
                review and utilization requirements under this 
                subsection shall not apply with respect to an 
                individual who--
                          (i) is receiving--
                                  (I) hospice or palliative 
                                care; or
                                  (II) treatment for cancer;
                          (ii) is a resident of a long-term 
                        care facility, of a facility described 
                        in section 1905(d), or of another 
                        facility for which frequently abused 
                        drugs are dispensed for residents 
                        through a contract with a single 
                        pharmacy; or
                          (iii) the State elects to treat as 
                        exempted from such requirements.
                  (B)  Exception relating to ensuring access.--
                In order to ensure reasonable access to health 
                care, the Secretary shall waive the drug review 
                and utilization requirements under this 
                subsection, with respect to a State, in the 
                case of natural disasters and similar 
                situations, and in the case of the provision of 
                emergency services (as defined for purposes of 
                section 1860D-4(c)(5)(D)(ii)(II)).
  (pp) Residential Pediatric Recovery Center Defined.--
          (1) In general.--For purposes of section 1902(a)(86), 
        the term ``residential pediatric recovery center'' 
        means a center or facility that furnishes items and 
        services for which medical assistance is available 
        under the State plan to infants with the diagnosis of 
        neonatal abstinence syndrome without any other 
        significant medical risk factors.
          (2) Counseling and services.--A residential pediatric 
        recovery center may offer counseling and other services 
        to mothers (and other appropriate family members and 
        caretakers) of infants receiving treatment at such 
        centers if such services are otherwise covered under 
        the State plan under this title or under a waiver of 
        such plan. Such other services may include the 
        following:
                  (A) Counseling or referrals for services.
                  (B) Activities to encourage caregiver-infant 
                bonding.
                  (C) Training on caring for such infants.
  (qq) Application of Certain Data Reporting and Program 
Integrity Requirements to Northern Mariana Islands, American 
Samoa, and Guam.--
          (1) In general.--Not later than October 1, 2021, the 
        Northern Mariana Islands, American Samoa, and Guam 
        shall--
                  (A) demonstrate progress in implementing 
                methods, satisfactory to the Secretary, for the 
                collection and reporting of reliable data to 
                the Transformed Medicaid Statistical 
                Information System (T-MSIS) (or a successor 
                system); and
                  (B) demonstrate progress in establishing a 
                State medicaid fraud control unit described in 
                section 1903(q).
          (2) Determination of progress.--For purposes of 
        paragraph (1), the Secretary shall deem that a 
        territory described in such paragraph has demonstrated 
        satisfactory progress in implementing methods for the 
        collection and reporting of reliable data or 
        establishing a State medicaid fraud control unit if the 
        territory has made a good faith effort to implement 
        such methods or establish such a unit, given the 
        circumstances of the territory.
  (rr) Program Integrity Requirements for Puerto Rico.--
          (1) System for tracking federal medicaid funding 
        provided to puerto rico.--
                  (A) In general.--Puerto Rico shall establish 
                and maintain a system, which may include the 
                use of a quarterly Form CMS-64, for tracking 
                any amounts paid by the Federal Government to 
                Puerto Rico with respect to the State plan of 
                Puerto Rico (or a waiver of such plan). Under 
                such system, Puerto Rico shall ensure that 
                information is available, with respect to each 
                quarter in a fiscal year (beginning with the 
                first quarter beginning on or after the date 
                that is 1 year after the date of the enactment 
                of this subsection), on the following:
                          (i) In the case of a quarter other 
                        than the first quarter of such fiscal 
                        year--
                                  (I) the total amount expended 
                                by Puerto Rico during any 
                                previous quarter of such fiscal 
                                year under the State plan of 
                                Puerto Rico (or a waiver of 
                                such plan); and
                                  (II) a description of how 
                                such amount was so expended.
                          (ii) The total amount that Puerto 
                        Rico expects to expend during the 
                        quarter under the State plan of Puerto 
                        Rico (or a waiver of such plan), and a 
                        description of how Puerto Rico expects 
                        to expend such amount.
                  (B) Report to cms.--For each quarter with 
                respect to which Puerto Rico is required under 
                subparagraph (A) to ensure that information 
                described in such subparagraph is available, 
                Puerto Rico shall submit to the Administrator 
                of the Centers for Medicare & Medicaid Services 
                a report on such information for such quarter, 
                which may include the submission of a quarterly 
                Form CMS-37.
          (2) Submission of documentation on contracts upon 
        request.--Puerto Rico shall, upon request, submit to 
        the Administrator of the Centers for Medicare & 
        Medicaid Services all documentation requested with 
        respect to contracts awarded under the State plan of 
        Puerto Rico (or a waiver of such plan).
          (3) Reporting on medicaid and chip scorecard 
        measures.--Beginning 12 months after the date of 
        enactment of this subsection, Puerto Rico shall begin 
        to report to the Administrator of the Centers for 
        Medicare & Medicaid Services on selected measures 
        included in the Medicaid and CHIP Scorecard developed 
        by the Centers for Medicare & Medicaid Services.
  (ss) Uninsured Individual Defined.--For purposes of this 
section, the term ``uninsured individual'' means, 
notwithstanding any other provision of this title, any 
individual who is--
          (1) not described in subsection (a)(10)(A)(i) 
        (excluding subclause (VIII) of such subsection if the 
        individual is a resident of a State which does not 
        furnish medical assistance to individuals described in 
        such subclause); and
          (2) not enrolled in a Federal health care program (as 
        defined in section 1128B(f)), a group health plan, 
        group or individual health insurance coverage offered 
        by a health insurance issuer (as such terms are defined 
        in section 2791 of the Public Health Service Act), or a 
        health plan offered under chapter 89 of title 5, United 
        States Code, except that individuals who are eligible 
        for medical assistance under subsection 
        (a)(10)(A)(ii)(XII), subsection (a)(10)(A)(ii)(XVIII), 
        subsection (a)(10)(A)(ii)(XXI), or subsection 
        (a)(10)(C) (but only to the extent such an individual 
        is considered to not have minimum essential coverage 
        under section 5000A(f)(1) of the Internal Revenue Code 
        of 1986), or who are described in subsection (l)(1)(A) 
        and are eligible for medical assistance only because of 
        subsection (a)(10)(A)(i)(IV) or (a)(10)(A)(ii)(IX) and 
        whose eligibility for such assistance is limited by the 
        State under clause (VII) in the matter following 
        subsection (a)(10)(G), shall not be treated as enrolled 
        in a Federal health care program for purposes of this 
        paragraph.
  (tt) Requirements Relating to Transition From Families First 
Coronavirus Response Act FMAP Increase Requirements; 
Enforcement and Corrective Action.--
          (1) Reporting requirements.--For each month occurring 
        during the period that begins on April 1, 2023, and 
        ends on June 30, 2024, each State shall submit to the 
        Secretary, on a timely basis, a report, that the 
        Secretary shall make publicly available, on the 
        activities of the State relating to eligibility 
        redeterminations conducted during such period, and 
        which include, with respect to the month for which the 
        report is submitted, the following information:
                  (A) The number of eligibility renewals 
                initiated, beneficiaries renewed on a total and 
                ex parte basis, and individuals whose coverage 
                for medical assistance, child health 
                assistance, or pregnancy-related assistance was 
                terminated.
                  (B) The number of individuals whose coverage 
                for medical assistance, child health 
                assistance, or pregnancy-related assistance was 
                so terminated for procedural reasons.
                  (C) Where applicable, the number of 
                individuals who were enrolled in a State child 
                health plan or waiver in the form described in 
                paragraph (1) of section 2101(a).
                  (D) Unless the Administrator of the Centers 
                for Medicare & Medicaid Services reports such 
                information on behalf of the State:
                          (i) In a State with a Federal or 
                        State American Health Benefit Exchange 
                        established under title I of the 
                        Patient Protection and Affordable Care 
                        Act in which the systems used to 
                        determine eligibility for assistance 
                        under this title or title XXI are not 
                        integrated with the systems used to 
                        determine eligibility for coverage 
                        under a qualified health plan with 
                        advance payment under section 1412(a) 
                        of the Patient Protection and 
                        Affordable Care Act of any premium tax 
                        credit allowed under section 36B of the 
                        Internal Revenue Code of 1986--
                                  (I) the number of individuals 
                                whose accounts were received 
                                via secure electronic transfer 
                                by the Federal or State 
                                American Health Benefit 
                                Exchange, or a basic health 
                                program established under 
                                section 1331 of the Patient 
                                Protection and Affordable Care 
                                Act;
                                  (II) the number of 
                                individuals identified in 
                                subclause (I) who were 
                                determined eligible for a 
                                qualified health plan, as 
                                defined in section 1301(a)(1) 
                                of the Patient Protection and 
                                Affordable Care Act, or (if 
                                applicable) the basic health 
                                program established under 
                                section 1331 of such Act; and
                                  (III) the number of 
                                individuals identified in 
                                subclause (II) who made a 
                                qualified health plan selection 
                                or were enrolled in a basic 
                                health program plan (if 
                                applicable).
                          (ii) In a State with a State American 
                        Health Benefit Exchange established 
                        under title I of the Patient Protection 
                        and Affordable Care Act in which the 
                        systems used to determine eligibility 
                        for assistance under this title or 
                        title XXI are integrated with the 
                        systems used to determine eligibility 
                        for coverage under a qualified health 
                        plan with advance payment under section 
                        1412(a) of the Patient Protection and 
                        Affordable Care Act of any premium tax 
                        credit allowed under section 36B of the 
                        Internal Revenue Code of 1986--
                                  (I) the number of individuals 
                                who were determined eligible 
                                for a qualified health plan, as 
                                defined in section 1301(a)(1) 
                                of the Patient Protection and 
                                Affordable Care Act, or (if 
                                applicable) the basic health 
                                program established under 
                                section 1331 of such Act; and
                                  (II) the number of 
                                individuals identified in 
                                subclause (I) who made a 
                                qualified health plan selection 
                                or were enrolled in a basic 
                                health program plan (if 
                                applicable).
                  (E) The total call center volume, average 
                wait times, and average abandonment rate (as 
                determined by the Secretary) for each call 
                center of the State agency responsible for 
                administering the State plan under this title 
                (or a waiver of such plan) during such month.
                  (F) Such other information related to 
                eligibility redeterminations and renewals 
                during the period described in paragraph (1), 
                as identified by the Secretary.
          (2) Enforcement and corrective action.--
                  (A) In general.--For each fiscal quarter that 
                occurs during the period that begins on July 1, 
                2023, and ends on June 30, 2024, if a State 
                does not satisfy the requirements of paragraph 
                (1), the Federal medical assistance percentage 
                determined for the State for the quarter under 
                section 1905(b) shall be reduced by the number 
                of percentage points (not to exceed 1 
                percentage point) equal to the product of 0.25 
                percentage points and the number of fiscal 
                quarters during such period for which the State 
                has failed to satisfy such requirements.
                  (B) Corrective action plan; additional 
                authority.--
                          (i) In general.--The Secretary may 
                        assess a State's compliance with all 
                        Federal requirements applicable to 
                        eligibility redeterminations and the 
                        reporting requirements described in 
                        paragraph (1), and, if the Secretary 
                        determines that a State did not comply 
                        with any such requirements during the 
                        period that begins on April 1, 2023, 
                        and ends on June 30, 2024, the 
                        Secretary may require the State to 
                        submit and implement a corrective 
                        action plan in accordance with clause 
                        (ii).
                          (ii) Corrective action plan.--A State 
                        that receives a written notice from the 
                        Secretary that the Secretary has 
                        determined that the State is not in 
                        compliance with a requirement described 
                        in clause (i) shall--
                                  (I) not later than 14 days 
                                after receiving such notice, 
                                submit a corrective action plan 
                                to the Secretary;
                                  (II) not later than 21 days 
                                after the date on which such 
                                corrective action plan is 
                                submitted to the Secretary, 
                                receive approval for the plan 
                                from the Secretary; and
                                  (III) begin implementation of 
                                such corrective action plan not 
                                later than 14 days after such 
                                approval.
                          (iii) Effect of failure to submit or 
                        implement a corrective action plan.--If 
                        a State fails to submit or implement an 
                        approved corrective action plan in 
                        accordance with clause (ii), the 
                        Secretary may, in addition to any 
                        reduction applied under subparagraph 
                        (A) to the Federal medical assistance 
                        percentage determined for the State and 
                        any other remedy available to the 
                        Secretary for the purpose of carrying 
                        out this title, require the State to 
                        suspend making all or some terminations 
                        of eligibility for medical assistance 
                        from the State plan under this title 
                        (including any waiver of such plan) 
                        that are for procedural reasons until 
                        the State takes appropriate corrective 
                        action, as determined by the Secretary, 
                        and may impose a civil money penalty of 
                        not more than $100,000 for each day a 
                        State is not in compliance.

                           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
          (9) with respect to any amount expended for non-
        emergency transportation authorized under section 
        1902(a)(4), unless the State plan provides for the 
        methods and procedures required under section 
        1902(a)(30)(A); 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;
          (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); and
          (E) with respect to any amount expended for a covered 
        outpatient drug for which a suspension under section 
        1927(c)(4)(B)(ii)(II) is in effect; 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
          (12) with respect to any amounts expended for--
                  (A) a vacuum erection system that is not 
                medically necessary; or
                  (B) the insertion, repair, or removal and 
                replacement of a penile prosthetic implant 
                (unless such insertion, repair, or removal and 
                replacement is medically necessary); 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, 2020 (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 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 2020; 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)] (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, and 
        (IV) if the contract includes provisions making the 
        entity responsible for coverage of covered outpatient 
        drugs, the entity shall comply with the requirements of 
        section 1927(e)(6).
  (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).
  (7) Payment shall be made under this title to a State for 
expenditures for capitation payments described in section 
438.6(e) of title 42, Code of Federal Regulations (or any 
successor regulation).
  (8)(A) The State agency administering the State plan under 
this title may have reasonable access, as determined by the 
State, to 1 or more prescription drug monitoring program 
databases administered or accessed by the State to the extent 
the State agency is permitted to access such databases under 
State law.
  (B) Such State agency may facilitate reasonable access, as 
determined by the State, to 1 or more prescription drug 
monitoring program databases administered or accessed by the 
State, to same extent that the State agency is permitted under 
State law to access such databases, for--
          (i) any provider enrolled under the State plan to 
        provide services to Medicaid beneficiaries; and
          (ii) any managed care entity (as defined under 
        section 1932(a)(1)(B)) that has a contract with the 
        State under this subsection or under section 
        1905(t)(3).
  (C) Such State agency may share information in such 
databases, to the same extent that the State agency is 
permitted under State law to share information in such 
databases, with--
          (i) any provider enrolled under the State plan to 
        provide services to Medicaid beneficiaries; and
          (ii) any managed care entity (as defined under 
        section 1932(a)(1)(B)) that has a contract with the 
        State under this subsection or under section 
        1905(t)(3).
  (9)(A) With respect to expenditures described in subparagraph 
(B) that are incurred by a State for any fiscal year after 
fiscal year 2020, in determining the pro rata share to which 
the United States is equitably entitled under subsection 
(d)(3), the Secretary shall substitute the Federal medical 
assistance percentage that applies for such fiscal year to the 
State under section 1905(b) (without regard to any adjustments 
to such percentage applicable under such section or any other 
provision of law) for the percentage that applies to such 
expenditures under section 1905(y).
  (B) Expenditures described in this subparagraph, with respect 
to a fiscal year to which subparagraph (A) applies, are 
expenditures incurred by a State for payment for medical 
assistance provided to individuals described in subclause 
(VIII) of section 1902(a)(10)(A)(i) by a managed care entity, 
or other specified entity (as defined in subparagraph 
(D)(iii)), that are treated as remittances because the State--
          (i) has satisfied the requirement of section 438.8 of 
        title 42, Code of Federal Regulations (or any successor 
        regulation), by electing--
                  (I) in the case of a State described in 
                subparagraph (C), to apply a minimum medical 
                loss ratio (as defined in subparagraph (D)(ii)) 
                that is at least 85 percent but not greater 
                than the minimum medical loss ratio (as so 
                defined) that such State applied as of May 31, 
                2018; or
                  (II) in the case of a State not described in 
                subparagraph (C), to apply a minimum medical 
                loss ratio that is equal to 85 percent; and
          (ii) recovered all or a portion of the expenditures 
        as a result of the entity's failure to meet such ratio.
  (C) For purposes of subparagraph (B), a State described in 
this subparagraph is a State that as of May 31, 2018, applied a 
minimum medical loss ratio (as calculated under subsection (d) 
of section 438.8 of title 42, Code of Federal Regulations (as 
in effect on June 1, 2018)) for payment for services provided 
by entities described in such subparagraph under the State plan 
under this title (or a waiver of the plan) that is equal to or 
greater than 85 percent.
  (D) For purposes of this paragraph:
          (i) The term ``managed care entity'' means a medicaid 
        managed care organization described in section 
        1932(a)(1)(B)(i).
          (ii) The term ``minimum medical loss ratio'' means, 
        with respect to a State, a minimum medical loss ratio 
        (as calculated under subsection (d) of section 438.8 of 
        title 42, Code of Federal Regulations (as in effect on 
        June 1, 2018)) for payment for services provided by 
        entities described in subparagraph (B) under the State 
        plan under this title (or a waiver of the plan).
          (iii) The term ``other specified entity'' means--
                  (I) a prepaid inpatient health plan, as 
                defined in section 438.2 of title 42, Code of 
                Federal Regulations (or any successor 
                regulation); and
                  (II) a prepaid ambulatory health plan, as 
                defined in such section (or any successor 
                regulation).
  (10) 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 an other specified entity (as defined 
in paragraph (9)(D)(iii)) unless such services are provided in 
accordance with a contract between the State and such entity 
which satisfies the requirements of paragraph (2)(A)(xiii).
  (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 of patients (who are receiving medical 
                assistance under the State plan under this 
                title (or waiver of such plan)) in a 
                noninstitutional or other setting; 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 
        subsection, 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 54-month 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 36-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; and
                          (ii) 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 36-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 granted 
                                (or submitted by the State and 
                                pending) 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 subparagraph (C), 
                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 
                disorder 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 
                disorder 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 
                disorder 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.
          (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 disorder 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 3 years 
                after the date of the enactment of this 
                subsection, the Director of the Agency for 
                Healthcare Research and Quality, in 
                consultation with the Administrator of the 
                Centers for Medicare & Medicaid Services, 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.
  (bb) Supplemental Payment Reporting Requirements.--
          (1) Collection and availability of supplemental 
        payment data.--
                  (A) In general.--Not later than October 1, 
                2021, the Secretary shall establish a system 
                for each State to submit reports, as determined 
                appropriate by the Secretary, on supplemental 
                payments data, as a requirement for a State 
                plan or State plan amendment that would provide 
                for a supplemental payment.
                  (B) Requirements.--Each report submitted by a 
                State in accordance with the requirement 
                established under subparagraph (A) shall 
                include the following:
                          (i) An explanation of how 
                        supplemental payments made under the 
                        State plan or a State plan amendment 
                        will result in payments that are 
                        consistent with section 1902(a)(30)(A), 
                        including standards with respect to 
                        efficiency, economy, quality of care, 
                        and access, along with the stated 
                        purpose and intended effects of the 
                        supplemental payment.
                          (ii) The criteria used to determine 
                        which providers are eligible to receive 
                        the supplemental payment.
                          (iii) A comprehensive description of 
                        the methodology used to calculate the 
                        amount of, and distribute, the 
                        supplemental payment to each eligible 
                        provider, including--
                                  (I) data on the amount of the 
                                supplemental payment made to 
                                each eligible provider, if 
                                known, or, if the total amount 
                                is distributed using a formula 
                                based on data from 1 or more 
                                fiscal years, data on the total 
                                amount of the supplemental 
                                payments for the fiscal year or 
                                years available to all 
                                providers eligible to receive a 
                                supplemental payment;
                                  (II) if applicable, the 
                                specific criteria with respect 
                                to Medicaid service, 
                                utilization, or cost data to be 
                                used as the basis for 
                                calculations regarding the 
                                amount or distribution of the 
                                supplemental payment; and
                                  (III) the timing of the 
                                supplemental payment made to 
                                each eligible provider.
                          (iv) An assurance that the total 
                        Medicaid payments made to an inpatient 
                        hospital provider, including the 
                        supplemental payment, will not exceed 
                        upper payment limits.
                          (v) If not already submitted, an 
                        upper payment limit demonstration under 
                        section 447.272 of title 42, Code of 
                        Federal Regulations (as such section is 
                        in effect as of the date of enactment 
                        of this subsection).
                  (C) Public availability.--The Secretary shall 
                make all reports and related data submitted 
                under this paragraph publicly available on the 
                website of the Centers for Medicare & Medicaid 
                Services on a timely basis.
          (2) Supplemental payment defined.--
                  (A) In general.--Subject to subparagraph (B), 
                in this subsection, the term ``supplemental 
                payment'' means a payment to a provider that is 
                in addition to any base payment made to the 
                provider under the State plan under this title 
                or under demonstration authority.
                  (B) DSH payments excluded.--Such term does 
                not include a disproportionate share hospital 
                payment made under section 1923.

           *       *       *       *       *       *       *


                  payment for covered outpatient drugs

  Sec. 1927. (a) Requirement for Rebate Agreement.--
          (1) In general.--In order for payment to be available 
        under section 1903(a) or under part B of title XVIII 
        for covered outpatient drugs of a manufacturer, the 
        manufacturer must have entered into and have in effect 
        a rebate agreement described in subsection (b) with the 
        Secretary, on behalf of States (except that, the 
        Secretary may authorize a State to enter directly into 
        agreements with a manufacturer), and must meet the 
        requirements of paragraph (5) (with respect to drugs 
        purchased by a covered entity on or after the first day 
        of the first month that begins after the date of the 
        enactment of title VI of the Veterans Health Care Act 
        of 1992) and paragraph (6). Any agreement between a 
        State and a manufacturer prior to April 1, 1991, shall 
        be deemed to have been entered into on January 1, 1991, 
        and payment to such manufacturer shall be retroactively 
        calculated as if the agreement between the manufacturer 
        and the State had been entered into on January 1, 1991. 
        If a manufacturer has not entered into such an 
        agreement before March 1, 1991, such an agreement, 
        subsequently entered into, shall become effective as of 
        the date on which the agreement is entered into or, at 
        State option, on any date thereafter on or before the 
        first day of the calendar quarter that begins more than 
        60 days after the date the agreement is entered into.
          (2) Effective date.--Paragraph (1) shall first apply 
        to drugs dispensed under this title on or after January 
        1, 1991.
          (3) Authorizing payment for drugs not covered under 
        rebate agreements.--Paragraph (1), and section 
        1903(i)(10)(A), shall not apply to the dispensing of a 
        single source drug or innovator multiple source drug if 
        (A)(i) the State has made a determination that the 
        availability of the drug is essential to the health of 
        beneficiaries under the State plan for medical 
        assistance; (ii) such drug has been given a rating of 
        1-A by the Food and Drug Administration; and (iii)(I) 
        the physician has obtained approval for use of the drug 
        in advance of its dispensing in accordance with a prior 
        authorization program described in subsection (d), or 
        (II) the Secretary has reviewed and approved the 
        State's determination under subparagraph (A); or (B) 
        the Secretary determines that in the first calendar 
        quarter of 1991, there were extenuating circumstances. 
        The preceding sentence shall not apply to a single 
        source drug or innovator multiple source drug of a 
        manufacturer for any period described in section 
        5000D(c)(1) of the Internal Revenue Code of 1986 with 
        respect to the manufacturer.
          (4) Effect on existing agreements.--In the case of a 
        rebate agreement in effect between a State and a 
        manufacturer on the date of the enactment of this 
        section, such agreement, for the initial agreement 
        period specified therein, shall be considered to be a 
        rebate agreement in compliance with this section with 
        respect to that State, if the State agrees to report to 
        the Secretary any rebates paid pursuant to the 
        agreement and such agreement provides for a minimum 
        aggregate rebate of 10 percent of the State's total 
        expenditures under the State plan for coverage of the 
        manufacturer's drugs under this title. If, after the 
        initial agreement period, the State establishes to the 
        satisfaction of the Secretary that an agreement in 
        effect on the date of the enactment of this section 
        provides for rebates that are at least as large as the 
        rebates otherwise required under this section, and the 
        State agrees to report any rebates under the agreement 
        to the Secretary, the agreement shall be considered to 
        be a rebate agreement in compliance with the section 
        for the renewal periods of such agreement.
          (5) Limitation on prices of drugs purchased by 
        covered entities.--
                  (A) Agreement with secretary.--A manufacturer 
                meets the requirements of this paragraph if the 
                manufacturer has entered into an agreement with 
                the Secretary that meets the requirements of 
                section 340B of the Public Health Service Act 
                with respect to covered outpatient drugs 
                purchased by a covered entity on or after the 
                first day of the first month that begins after 
                the date of the enactment of this paragraph.
                  (B) Covered entity defined.--In this 
                subsection, the term ``covered entity'' means 
                an entity described in section 340B(a)(4) of 
                the Public Health Service Act.
                  (C) Establishment of alternative mechanism to 
                ensure against duplicate discounts or 
                rebates.--If the Secretary does not establish a 
                mechanism under section 340B(a)(5)(A) of the 
                Public Health Service Act within 12 months of 
                the date of the enactment of such section, the 
                following requirements shall apply:
                          (i) Entities.--Each covered entity 
                        shall inform the single State agency 
                        under section 1902(a)(5) when it is 
                        seeking reimbursement from the State 
                        plan for medical assistance described 
                        in section 1905(a)(12) with respect to 
                        a unit of any covered outpatient drug 
                        which is subject to an agreement under 
                        section 340B(a) of such Act.
                          (ii) State agency.--Each such single 
                        State agency shall provide a means by 
                        which a covered entity shall indicate 
                        on any drug reimbursement claims form 
                        (or format, where electronic claims 
                        management is used) that a unit of the 
                        drug that is the subject of the form is 
                        subject to an agreement under section 
                        340B of such Act, and not submit to any 
                        manufacturer a claim for a rebate 
                        payment under subsection (b) with 
                        respect to such a drug.
                  (D) Effect of subsequent amendments.--In 
                determining whether an agreement under 
                subparagraph (A) meets the requirements of 
                section 340B of the Public Health Service Act, 
                the Secretary shall not take into account any 
                amendments to such section that are enacted 
                after the enactment of title VI of the Veterans 
                Health Care Act of 1992.
                  (E) Determination of compliance.--A 
                manufacturer is deemed to meet the requirements 
                of this paragraph if the manufacturer 
                establishes to the satisfaction of the 
                Secretary that the manufacturer would comply 
                (and has offered to comply) with the provisions 
                of section 340B of the Public Health Service 
                Act (as in effect immediately after the 
                enactment of this paragraph, and would have 
                entered into an agreement under such section 
                (as such section was in effect at such time), 
                but for a legislative change in such section 
                after the date of the enactment of this 
                paragraph.
                  (6) Requirements relating to master 
                agreements for drugs procured by department of 
                veterans affairs and certain other federal 
                agencies.--
                          (A) In general.--A manufacturer meets 
                        the requirements of this paragraph if 
                        the manufacturer complies with the 
                        provisions of section 8126 of title 38, 
                        United States Code, including the 
                        requirement of entering into a master 
                        agreement with the Secretary of 
                        Veterans Affairs under such section.
                          (B) Effect of subsequent 
                        amendments.--In determining whether a 
                        master agreement described in 
                        subparagraph (A) meets the requirements 
                        of section 8126 of title 38, United 
                        States Code, the Secretary shall not 
                        take into account any amendments to 
                        such section that are enacted after the 
                        enactment of title VI of the Veterans 
                        Health Care Act of 1992.
                          (C) Determination of compliance.--A 
                        manufacturer is deemed to meet the 
                        requirements of this paragraph if the 
                        manufacturer establishes to the 
                        satisfaction of the Secretary that the 
                        manufacturer would comply (and has 
                        offered to comply) with the provisions 
                        of section 8126 of title 38, United 
                        States Code (as in effect immediately 
                        after the enactment of this paragraph) 
                        and would have entered into an 
                        agreement under such section (as such 
                        section was in effect at such time), 
                        but for a legislative change in such 
                        section after the date of the enactment 
                        of this paragraph.
          (7) Requirement for submission of utilization data 
        for certain physician administered drugs.--
                  (A) Single source drugs.--In order for 
                payment to be available under section 1903(a) 
                for a covered outpatient drug that is a single 
                source drug that is physician administered 
                under this title (as determined by the 
                Secretary), and that is administered on or 
                after January 1, 2006, the State shall provide 
                for the collection and submission of such 
                utilization data and coding (such as J-codes 
                and National Drug Code numbers) for each such 
                drug as the Secretary may specify as necessary 
                to identify the manufacturer of the drug in 
                order to secure rebates under this section for 
                drugs administered for which payment is made 
                under this title.
                  (B) Multiple source drugs.--
                          (i) Identification of most frequently 
                        physician administered multiple source 
                        drugs.--Not later than January 1, 2007, 
                        the Secretary shall publish a list of 
                        the 20 physician administered multiple 
                        source drugs that the Secretary 
                        determines have the highest dollar 
                        volume of physician administered drugs 
                        dispensed under this title. The 
                        Secretary may modify such list from 
                        year to year to reflect changes in such 
                        volume.
                          (ii) Requirement.--In order for 
                        payment to be available under section 
                        1903(a) for a covered outpatient drug 
                        that is a multiple source drug that is 
                        physician administered (as determined 
                        by the Secretary), that is on the list 
                        published under clause (i), and that is 
                        administered on or after January 1, 
                        2008, the State shall provide for the 
                        submission of such utilization data and 
                        coding (such as J-codes and National 
                        Drug Code numbers) for each such drug 
                        as the Secretary may specify as 
                        necessary to identify the manufacturer 
                        of the drug in order to secure rebates 
                        under this section.
                  (C) Use of ndc codes.--Not later than January 
                1, 2007, the information shall be submitted 
                under subparagraphs (A) and (B)(ii) using 
                National Drug Code codes unless the Secretary 
                specifies that an alternative coding system 
                should be used.
                  (D) Hardship waiver.--The Secretary may delay 
                the application of subparagraph (A) or (B)(ii), 
                or both, in the case of a State to prevent 
                hardship to States which require additional 
                time to implement the reporting system required 
                under the respective subparagraph.
  (b) Terms of Rebate Agreement.--
          (1) Periodic rebates.--
                  (A) In general.--A rebate agreement under 
                this subsection shall require the manufacturer 
                to provide, to each State plan approved under 
                this title, a rebate for a rebate period in an 
                amount specified in subsection (c) for covered 
                outpatient drugs of the manufacturer dispensed 
                after December 31, 1990, for which payment was 
                made under the State plan for such period, 
                including such drugs dispensed to individuals 
                enrolled with a medicaid managed care 
                organization if the organization is responsible 
                for coverage of such drugs. Such rebate shall 
                be paid by the manufacturer not later than 30 
                days after the date of receipt of the 
                information described in paragraph (2) for the 
                period involved.
                  (B) Offset against medical assistance.--
                Amounts received by a State under this section 
                (or under an agreement authorized by the 
                Secretary under subsection (a)(1) or an 
                agreement described in subsection (a)(4)) in 
                any quarter, including amounts received by a 
                State under subsection (c)(4), shall be 
                considered to be a reduction in the amount 
                expended under the State plan in the quarter 
                for medical assistance for purposes of section 
                1903(a)(1).
                  (C) Special rule for increased minimum rebate 
                percentage.--
                          (i) In general.--In addition to the 
                        amounts applied as a reduction under 
                        subparagraph (B), for rebate periods 
                        beginning on or after January 1, 2010, 
                        during a fiscal year, the Secretary 
                        shall reduce payments to a State under 
                        section 1903(a) in the manner specified 
                        in clause (ii), in an amount equal to 
                        the product of--
                                  (I) 100 percent minus the 
                                Federal medical assistance 
                                percentage applicable to the 
                                rebate period for the State; 
                                and
                                  (II) the amounts received by 
                                the State under such 
                                subparagraph that are 
                                attributable (as estimated by 
                                the Secretary based on 
                                utilization and other data) to 
                                the increase in the minimum 
                                rebate percentage effected by 
                                the amendments made by 
                                subsections (a)(1), (b), and 
                                (d) of section 2501 of the 
                                Patient Protection and 
                                Affordable Care Act, taking 
                                into account the additional 
                                drugs included under the 
                                amendments made by subsection 
                                (c) of section 2501 of such 
                                Act.
                        The Secretary shall adjust such payment 
                        reduction for a calendar quarter to the 
                        extent the Secretary determines, based 
                        upon subsequent utilization and other 
                        data, that the reduction for such 
                        quarter was greater or less than the 
                        amount of payment reduction that should 
                        have been made.
                          (ii) Manner of payment reduction.--
                        The amount of the payment reduction 
                        under clause (i) for a State for a 
                        quarter shall be deemed an overpayment 
                        to the State under this title to be 
                        disallowed against the State's regular 
                        quarterly draw for all Medicaid 
                        spending under section 1903(d)(2). Such 
                        a disallowance is not subject to a 
                        reconsideration under section 1116(d).
          (2) State provision of information.--
                  (A) State responsibility.--Each State agency 
                under this title shall report to each 
                manufacturer not later than 60 days after the 
                end of each rebate period and in a form 
                consistent with a standard reporting format 
                established by the Secretary, information on 
                the total number of units of each dosage form 
                and strength and package size of each covered 
                outpatient drug dispensed after December 31, 
                1990, for which payment was made under the plan 
                during the period, including such information 
                reported by each medicaid managed care 
                organization, and shall promptly transmit a 
                copy of such report to the Secretary.
                  (B) Audits.--A manufacturer may audit the 
                information provided (or required to be 
                provided) under subparagraph (A). Adjustments 
                to rebates shall be made to the extent that 
                information indicates that utilization was 
                greater or less than the amount previously 
                specified.
          (3) Manufacturer provision of price and drug product 
        information.--
                  (A) In general.--Each manufacturer with an 
                agreement in effect under this section shall 
                report to the Secretary--
                          (i) not later than 30 days after the 
                        last day of each rebate period under 
                        the agreement--
                          (I) on the average manufacturer price 
                        (as defined in subsection (k)(1)) for 
                        covered outpatient drugs for the rebate 
                        period under the agreement (including 
                        for all such drugs that are sold under 
                        a new drug application approved under 
                        section 505(c) of the Federal Food, 
                        Drug, and Cosmetic Act); and
                          (II) for single source drugs and 
                        innovator multiple source drugs 
                        (including all such drugs that are sold 
                        under a new drug application approved 
                        under section 505(c) of the Federal 
                        Food, Drug, and Cosmetic Act), on the 
                        manufacturer's best price (as defined 
                        in subsection (c)(1)(C)) for such drugs 
                        for the rebate period under the 
                        agreement;
                          (ii) not later than 30 days after the 
                        date of entering into an agreement 
                        under this section on the average 
                        manufacturer price (as defined in 
                        subsection (k)(1)) as of October 1, 
                        1990 for each of the manufacturer's 
                        covered outpatient drugs (including for 
                        such drugs that are sold under a new 
                        drug application approved under section 
                        505(c) of the Federal Food, Drug, and 
                        Cosmetic Act);
                          (iii) for calendar quarters beginning 
                        on or after January 1, 2004, in 
                        conjunction with reporting required 
                        under clause (i) and by National Drug 
                        Code (including package size)--
                                  (I) the manufacturer's 
                                average sales price (as defined 
                                in section 1847A(c)) and the 
                                total number of units specified 
                                under section 1847A(b)(2)(A);
                                  (II) if required to make 
                                payment under section 1847A, 
                                the manufacturer's wholesale 
                                acquisition cost, as defined in 
                                subsection (c)(6) of such 
                                section; and
                                  (III) information on those 
                                sales that were made at a 
                                nominal price or otherwise 
                                described in section 
                                1847A(c)(2)(B);
                        for a drug or biological described in 
                        subparagraph (C), (D), (E), or (G) of 
                        section 1842(o)(1) or section 
                        1881(b)(14)(B), and, for calendar 
                        quarters beginning on or after January 
                        1, 2007 and only with respect to the 
                        information described in subclause 
                        (III), for covered outpatient drugs;
                          (iv) not later than 30 days after the 
                        last day of each month of a rebate 
                        period under the agreement, on the 
                        manufacturer's total number of units 
                        that are used to calculate the monthly 
                        average manufacturer price for each 
                        covered outpatient drug; and
                          (v) not later than 30 days after the 
                        last day of each month of a rebate 
                        period under the agreement, such drug 
                        product information as the Secretary 
                        shall require for each of the 
                        manufacturer's covered outpatient 
                        drugs.
                Information reported under this subparagraph is 
                subject to audit by the Inspector General of 
                the Department of Health and Human Services. 
                Beginning July 1, 2006, the Secretary shall 
                provide on a monthly basis to States under 
                subparagraph (D)(iv) the most recently reported 
                average manufacturer prices for single source 
                drugs and for multiple source drugs and shall, 
                on at least a quarterly basis, update the 
                information posted on the website under 
                subparagraph (D)(v) (relating to the weighted 
                average of the most recently reported monthly 
                average manufacturer prices). For purposes of 
                applying clause (iii), for calendar quarters 
                beginning on or after January 1, 2022, a drug 
                or biological described in the flush matter 
                following such clause includes items, services, 
                supplies, and products that are payable under 
                part B of title XVIII as a drug or biological.
                  (B) Verification surveys of average 
                manufacturer price and manufacturer's average 
                sales price.--The Secretary may survey 
                wholesalers and manufacturers that directly 
                distribute their covered outpatient drugs, when 
                necessary, to verify manufacturer prices and 
                manufacturer's average sales prices (including 
                wholesale acquisition cost) if required to make 
                payment reported under subparagraph (A). The 
                Secretary may impose a civil monetary penalty 
                in an amount not to exceed $100,000 on a 
                wholesaler, manufacturer, or direct seller, if 
                the wholesaler, manufacturer, or direct seller 
                of a covered outpatient drug refuses a request 
                for information about charges or prices by the 
                Secretary in connection with a survey under 
                this subparagraph or knowingly provides false 
                information. The provisions of section 1128A 
                (other than subsections (a) (with respect to 
                amounts of penalties or additional assessments) 
                and (b)) shall apply to a civil money penalty 
                under this subparagraph in the same manner as 
                such provisions apply to a penalty or 
                proceeding under section 1128A(a).
                  (C) Penalties.--
                          (i) Failure to provide timely 
                        information.--In the case of a 
                        manufacturer with an agreement under 
                        this section that fails to provide 
                        information required under subparagraph 
                        (A) on a timely basis, the amount of 
                        the penalty shall be increased by 
                        $10,000 for each day in which such 
                        information has not been provided and 
                        such amount shall be paid to the 
                        Treasury, and, if such information is 
                        not reported within 90 days of the 
                        deadline imposed, the agreement shall 
                        be suspended for services furnished 
                        after the end of such 90-day period and 
                        until the date such information is 
                        reported (but in no case shall such 
                        suspension be for a period of less than 
                        30 days).
                          (ii) False information.--Any 
                        manufacturer with an agreement under 
                        this section that knowingly provides 
                        false information, including 
                        information related to drug pricing, 
                        drug product information, and data 
                        related to drug pricing or drug product 
                        information, is subject to a civil 
                        money penalty in an amount not to 
                        exceed $100,000 for each item of false 
                        information. Such civil money penalties 
                        are in addition to other penalties as 
                        may be prescribed by law. The 
                        provisions of section 1128A (other than 
                        subsections (a), (b), (f)(3), and 
                        (f)(4)) shall apply to a civil money 
                        penalty under this subparagraph in the 
                        same manner as such provisions apply to 
                        a penalty or proceeding under section 
                        1128A(a).
                          (iii) Misclassified drug product or 
                        misreported information.--
                                  (I) In general.--Any 
                                manufacturer with an agreement 
                                under this section that 
                                knowingly (as defined in 
                                section 1003.110 of title 42, 
                                Code of Federal Regulations (or 
                                any successor regulation)) 
                                misclassifies a covered 
                                outpatient drug, such as by 
                                knowingly submitting incorrect 
                                drug product information, is 
                                subject to a civil money 
                                penalty for each covered 
                                outpatient drug that is 
                                misclassified in an amount not 
                                to exceed 2 times the amount of 
                                the difference between--
                                          (aa) the total amount 
                                        of rebates that the 
                                        manufacturer paid with 
                                        respect to the drug to 
                                        all States for all 
                                        rebate periods during 
                                        which the drug was 
                                        misclassified; and
                                          (bb) the total amount 
                                        of rebates that the 
                                        manufacturer would have 
                                        been required to pay, 
                                        as determined by the 
                                        Secretary using drug 
                                        product information 
                                        provided by the 
                                        manufacturer, with 
                                        respect to the drug to 
                                        all States for all 
                                        rebate periods during 
                                        which the drug was 
                                        misclassified if the 
                                        drug had been correctly 
                                        classified.
                                  (II) Other penalties and 
                                recovery of underpaid 
                                rebates.--The civil money 
                                penalties described in 
                                subclause (I) are in addition 
                                to other penalties as may be 
                                prescribed by law and any other 
                                recovery of the underlying 
                                underpayment for rebates due 
                                under this section or the terms 
                                of the rebate agreement as 
                                determined by the Secretary.
                          (iv) Increasing oversight and 
                        enforcement.--Each year the Secretary 
                        shall retain, in addition to any amount 
                        retained by the Secretary to recoup 
                        investigation and litigation costs 
                        related to the enforcement of the civil 
                        money penalties under this subparagraph 
                        and subsection (c)(4)(B)(ii)(III), an 
                        amount equal to 25 percent of the total 
                        amount of civil money penalties 
                        collected under this subparagraph and 
                        subsection (c)(4)(B)(ii)(III) for the 
                        year, such retained amount shall be 
                        available to the Secretary, without 
                        further appropriation and until 
                        expended, for activities related to the 
                        oversight and enforcement of this 
                        section and agreements under this 
                        section, including--
                                  (I) improving drug data 
                                reporting systems;
                                  (II) evaluating and ensuring 
                                manufacturer compliance with 
                                rebate obligations; and
                                  (III) oversight and 
                                enforcement related to ensuring 
                                that manufacturers accurately 
                                and fully report drug 
                                information, including data 
                                related to drug classification.
                  (D) Confidentiality of information.--
                Notwithstanding any other provision of law, 
                information disclosed by manufacturers or 
                wholesalers under this paragraph or under an 
                agreement with the Secretary of Veterans 
                Affairs described in subsection (a)(6)(A) 
                (other than the wholesale acquisition cost for 
                purposes of carrying out section 1847A) is 
                confidential and shall not be disclosed by the 
                Secretary or the Secretary of Veterans Affairs 
                or a State agency (or contractor therewith) in 
                a form which discloses the identity of a 
                specific manufacturer or wholesaler, prices 
                charged for drugs by such manufacturer or 
                wholesaler, except--
                          (i) as the Secretary determines to be 
                        necessary to carry out this section, to 
                        carry out section 1847A (including the 
                        determination and implementation of the 
                        payment amount and the rebate), or to 
                        carry out section 1847B, section 
                        1192(f), including rebates under 
                        paragraph (4) of such section, or 
                        section 1860D-14B,
                          (ii) to permit the Comptroller 
                        General to review the information 
                        provided,
                          (iii) to permit the Director of the 
                        Congressional Budget Office to review 
                        the information provided,
                          (iv) to States to carry out this 
                        title,
                          (v) to the Secretary to disclose 
                        (through a website accessible to the 
                        public) the weighted average of the 
                        most recently reported monthly average 
                        manufacturer prices and the average 
                        retail survey price determined for each 
                        multiple source drug in accordance with 
                        subsection (f),
                          (vi) in the case of categories of 
                        drug product or classification 
                        information that were not considered 
                        confidential by the Secretary on the 
                        day before the date of the enactment of 
                        this clause, and
                          (vii) to permit the Executive 
                        Director of the Medicare Payment 
                        Advisory Commission and the Executive 
                        Director of the Medicaid and CHIP 
                        Payment and Access Commission to review 
                        the information provided.
                The previous sentence shall also apply to 
                information disclosed under section 1860D-
                2(d)(2) or 1860D-4(c)(2)(G) and drug pricing 
                data reported under the first sentence of 
                section 1860D-31(i)(1). Any information 
                disclosed to the Executive Director of the 
                Medicare Payment Advisory Commission or the 
                Executive Director of the Medicaid and CHIP 
                Payment and Access Commission pursuant to this 
                subparagraph shall not be disclosed by either 
                such Executive Director in a form which 
                discloses the identity of a specific 
                manufacturer or wholesaler or prices charged 
                for drugs by such manufacturer or wholesaler. 
                Such information also shall not be disclosed by 
                either such Executive Director to individual 
                Commissioners of the Medicare Payment Advisory 
                Commission or of the Medicaid and CHIP Payment 
                and Access Commission in a form which discloses 
                the identity of a specific manufacturer or 
                wholesaler or prices charged for drugs by such 
                manufacturer or wholesaler.
          (4) Length of agreement.--
                  (A) In general.--A rebate agreement shall be 
                effective for an initial period of not less 
                than 1 year and shall be automatically renewed 
                for a period of not less than one year unless 
                terminated under subparagraph (B).
                  (B) Termination.--
                          (i) By the secretary.--The Secretary 
                        may provide for termination of a rebate 
                        agreement for violation of the 
                        requirements of the agreement or other 
                        good cause shown. Such termination 
                        shall not be effective earlier than 60 
                        days after the date of notice of such 
                        termination. The Secretary shall 
                        provide, upon request, a manufacturer 
                        with a hearing concerning such a 
                        termination, but such hearing shall not 
                        delay the effective date of the 
                        termination.
                          (ii) By a manufacturer.--A 
                        manufacturer may terminate a rebate 
                        agreement under this section for any 
                        reason. Any such termination shall not 
                        be effective until the calendar quarter 
                        beginning at least 60 days after the 
                        date the manufacturer provides notice 
                        to the Secretary.
                          (iii) Effectiveness of termination.--
                        Any termination under this subparagraph 
                        shall not affect rebates due under the 
                        agreement before the effective date of 
                        its termination.
                          (iv) Notice to states.--In the case 
                        of a termination under this 
                        subparagraph, the Secretary shall 
                        provide notice of such termination to 
                        the States within not less than 30 days 
                        before the effective date of such 
                        termination.
                          (v) Application to terminations of 
                        other agreements.--The provisions of 
                        this subparagraph shall apply to the 
                        terminations of agreements described in 
                        section 340B(a)(1) of the Public Health 
                        Service Act and master agreements 
                        described in section 8126(a) of title 
                        38, United States Code.
                  (C) Delay before reentry.--In the case of any 
                rebate agreement with a manufacturer under this 
                section which is terminated, another such 
                agreement with the manufacturer (or a successor 
                manufacturer) may not be entered into until a 
                period of 1 calendar quarter has elapsed since 
                the date of the termination, unless the 
                Secretary finds good cause for an earlier 
                reinstatement of such an agreement.
  (c) Determination of Amount of Rebate.--
          (1) Basic rebate for single source drugs and 
        innovator multiple source drugs.--
                  (A) In general.--Except as provided in 
                paragraph (2), the amount of the rebate 
                specified in this subsection for a rebate 
                period (as defined in subsection (k)(8)) with 
                respect to each dosage form and strength of a 
                single source drug or an innovator multiple 
                source drug shall be equal to the product of--
                          (i) the total number of units of each 
                        dosage form and strength paid for under 
                        the State plan in the rebate period (as 
                        reported by the State); and
                          (ii) subject to subparagraph (B)(ii), 
                        the greater of--
                                  (I) the difference between 
                                the average manufacturer price 
                                and the best price (as defined 
                                in subparagraph (C)) for the 
                                dosage form and strength of the 
                                drug, or
                                  (II) the minimum rebate 
                                percentage (specified in 
                                subparagraph (B)(i)) of such 
                                average manufacturer price,
                        of or the rebate period.
                  (B) Range of rebates required.--
                          (i) Minimum rebate percentage.--For 
                        purposes of subparagraph (A)(ii)(II), 
                        the ``minimum rebate percentage'' for 
                        rebate periods beginning--
                                  (I) after December 31, 1990, 
                                and before October 1, 1992, is 
                                12.5 percent;
                                  (II) after September 30, 
                                1992, and before January 1, 
                                1994, is 15.7 percent;
                                  (III) after December 31, 
                                1993, and before January 1, 
                                1995, is 15.4 percent;
                                  (IV) after December 31, 1994, 
                                and before January 1, 1996, is 
                                15.2 percent;
                                  (V) after December 31, 1995, 
                                and before January 1, 2010 is 
                                15.1 percent;and
                                  (VI) except as provided in 
                                clause (iii), after December 
                                31, 2009, 23.1 percent.
      
                          (ii) Temporary limitation on maximum 
                        rebate amount.--In no case shall the 
                        amount applied under subparagraph 
                        (A)(ii) for a rebate period beginning--
                                  (I) before January 1, 1992, 
                                exceed 25 percent of the 
                                average manufacturer price; or
                                  (II) after December 31, 1991, 
                                and before January 1, 1993, 
                                exceed 50 percent of the 
                                average manufacturer price.
                          (iii) Minimum rebate percentage for 
                        certain drugs.--
                                  (I) In general.--In the case 
                                of a single source drug or an 
                                innovator multiple source drug 
                                described in subclause (II), 
                                the minimum rebate percentage 
                                for rebate periods specified in 
                                clause (i)(VI) is 17.1 percent.
                                  (II) Drug described.--For 
                                purposes of subclause (I), a 
                                single source drug or an 
                                innovator multiple source drug 
                                described in this subclause is 
                                any of the following drugs:
                                          (aa) A clotting 
                                        factor for which a 
                                        separate furnishing 
                                        payment is made under 
                                        section 1842(o)(5) and 
                                        which is included on a 
                                        list of such factors 
                                        specified and updated 
                                        regularly by the 
                                        Secretary.
                                          (bb) A drug approved 
                                        by the Food and Drug 
                                        Administration 
                                        exclusively for 
                                        pediatric indications.
                  (C) Best price defined.--For purposes of this 
                section--
                          (i) In general.--The term ``best 
                        price'' means, with respect to a single 
                        source drug or innovator multiple 
                        source drug of a manufacturer 
                        (including the lowest price available 
                        to any entity for any such drug of a 
                        manufacturer that is sold under a new 
                        drug application approved under section 
                        505(c) of the Federal Food, Drug, and 
                        Cosmetic Act), the lowest price 
                        available from the manufacturer during 
                        the rebate period to any wholesaler, 
                        retailer, provider, health maintenance 
                        organization, nonprofit entity, or 
                        governmental entity within the United 
                        States, excluding--
                                  (I) any prices charged on or 
                                after October 1, 1992, to the 
                                Indian Health Service, the 
                                Department of Veterans Affairs, 
                                a State home receiving funds 
                                under section 1741 of title 38, 
                                United States Code, the 
                                Department of Defense, the 
                                Public Health Service, or a 
                                covered entity described in 
                                subsection (a)(5)(B) (including 
                                inpatient prices charged to 
                                hospitals described in section 
                                340B(a)(4)(L) of the Public 
                                Health Service Act);
                                  (II) any prices charged under 
                                the Federal Supply Schedule of 
                                the General Services 
                                Administration;
                                  (III) any prices used under a 
                                State pharmaceutical assistance 
                                program;
                                  (IV) any depot prices and 
                                single award contract prices, 
                                as defined by the Secretary, of 
                                any agency of the Federal 
                                Government;
                                  (V) the prices negotiated 
                                from drug manufacturers for 
                                covered discount card drugs 
                                under an endorsed discount card 
                                program under section 1860D-31; 
                                and
                                  (VI) subject to clause 
                                (ii)(V), any prices charged 
                                which are negotiated by a 
                                prescription drug plan under 
                                part D of title XVIII, by an 
                                MA-PD plan under part C of such 
                                title with respect to covered 
                                part D drugs or by a qualified 
                                retiree prescription drug plan 
                                (as defined in section 1860D-
                                22(a)(2)) with respect to such 
                                drugs on behalf of individuals 
                                entitled to benefits under part 
                                A or enrolled under part B of 
                                such title, or any discounts 
                                provided by manufacturers under 
                                the Medicare coverage gap 
                                discount program under section 
                                1860D-14A or under the 
                                manufacturer discount program 
                                under section 1860D-14C.
                          (ii) Special rules.--The term ``best 
                        price''--
                                  (I) shall be inclusive of 
                                cash discounts, free goods that 
                                are contingent on any purchase 
                                requirement, volume discounts, 
                                and rebates (other than rebates 
                                under this section, section 
                                1847A(i), or section 1860D-
                                14B);
                                  (II) shall be determined 
                                without regard to special 
                                packaging, labeling, or 
                                identifiers on the dosage form 
                                or product or package;
                                  (III) shall not take into 
                                account prices that are merely 
                                nominal in amount
                          (IV) in the case of a manufacturer 
                        that approves, allows, or otherwise 
                        permits any other drug of the 
                        manufacturer to be sold under a new 
                        drug application approved under section 
                        505(c) of the Federal Food, Drug, and 
                        Cosmetic Act, shall be inclusive of the 
                        lowest price for such authorized drug 
                        available from the manufacturer during 
                        the rebate period to any manufacturer, 
                        wholesaler, retailer, provider, health 
                        maintenance organization, nonprofit 
                        entity, or governmental entity within 
                        the United States, excluding those 
                        prices described in subclauses (I) 
                        through (IV) of clause (i); and
                                  (V) in the case of a rebate 
                                period and a covered outpatient 
                                drug that is a selected drug 
                                (as referred to in section 
                                1192(c)) during such rebate 
                                period, shall be inclusive of 
                                the maximum fair price (as 
                                defined in section 1191(c)(3)) 
                                for such drug with respect to 
                                such period.
                          (iii) Application of auditing and 
                        recordkeeping requirements.--With 
                        respect to a covered entity described 
                        in section 340B(a)(4)(L) of the Public 
                        Health Service Act, any drug purchased 
                        for inpatient use shall be subject to 
                        the auditing and recordkeeping 
                        requirements described in section 
                        340B(a)(5)(C) of the Public Health 
                        Service Act.
                  (D) Limitation on sales at a nominal price.--
                          (i) In general.--For purposes of 
                        subparagraph (C)(ii)(III) and 
                        subsection (b)(3)(A)(iii)(III), only 
                        sales by a manufacturer of covered 
                        outpatient drugs at nominal prices to 
                        the following shall be considered to be 
                        sales at a nominal price or merely 
                        nominal in amount:
                                  (I) A covered entity 
                                described in section 340B(a)(4) 
                                of the Public Health Service 
                                Act.
                                  (II) An intermediate care 
                                facility for the mentally 
                                retarded.
                                  (III) A State-owned or 
                                operated nursing facility.
                                  (IV) An entity that--
                                          (aa) is described in 
                                        section 501(c)(3) of 
                                        the Internal Revenue 
                                        Code of 1986 and exempt 
                                        from tax under section 
                                        501(a) of such Act or 
                                        is State-owned or 
                                        operated; and
                                          (bb) would be a 
                                        covered entity 
                                        described in section 
                                        340(B)(a)(4) of the 
                                        Public Health Service 
                                        Act insofar as the 
                                        entity provides the 
                                        same type of services 
                                        to the same type of 
                                        populations as a 
                                        covered entity 
                                        described in such 
                                        section provides, but 
                                        does not receive 
                                        funding under a 
                                        provision of law 
                                        referred to in such 
                                        section;
                                  (V) A public or nonprofit 
                                entity, or an entity based at 
                                an institution of higher 
                                learning whose primary purpose 
                                is to provide health care 
                                services to students of that 
                                institution, that provides a 
                                service or services described 
                                under section 1001(a) of the 
                                Public Health Service Act, 42 
                                U.S.C. 300.
                                  (VI) Any other facility or 
                                entity that the Secretary 
                                determines is a safety net 
                                provider to which sales of such 
                                drugs at a nominal price would 
                                be appropriate based on the 
                                factors described in clause 
                                (ii).
                          (ii) Factors.--The factors described 
                        in this clause with respect to a 
                        facility or entity are the following:
                                  (I) The type of facility or 
                                entity.
                                  (II) The services provided by 
                                the facility or entity.
                                  (III) The patient population 
                                served by the facility or 
                                entity.
                                  (IV) The number of other 
                                facilities or entities eligible 
                                to purchase at nominal prices 
                                in the same service area.
                          (iii) Nonapplication.--Clause (i) 
                        shall not apply with respect to sales 
                        by a manufacturer at a nominal price of 
                        covered outpatient drugs pursuant to a 
                        master agreement under section 8126 of 
                        title 38, United States Code.
                          (iv) Rule of Construction.--Nothing 
                        in this subparagraph shall be construed 
                        to alter any existing statutory or 
                        regulatory prohibition on services with 
                        respect to an entity described in 
                        clause (i)(IV), including the 
                        prohibition set forth in section 1008 
                        of the Public Health Service Act.
          (2) Additional rebate for single source and innovator 
        multiple source drugs.--
                  (A) In general.--The amount of the rebate 
                specified in this subsection for a rebate 
                period, with respect to each dosage form and 
                strength of a single source drug or an 
                innovator multiple source drug, shall be 
                increased by an amount equal to the product 
                of--
                          (i) the total number of units of such 
                        dosage form and strength dispensed 
                        after December 31, 1990, for which 
                        payment was made under the State plan 
                        for the rebate period; and
                          (ii) the amount (if any) by which--
                                  (I) the average manufacturer 
                                price for the dosage form and 
                                strength of the drug for the 
                                period, exceeds
                                  (II) the average manufacturer 
                                price for such dosage form and 
                                strength for the calendar 
                                quarter beginning July 1, 1990 
                                (without regard to whether or 
                                not the drug has been sold or 
                                transferred to an entity, 
                                including a division or 
                                subsidiary of the manufacturer, 
                                after the first day of such 
                                quarter), increased by the 
                                percentage by which the 
                                consumer price index for all 
                                urban consumers (United States 
                                city average) for the month 
                                before the month in which the 
                                rebate period begins exceeds 
                                such index for September 1990.
                  (B) Treatment of subsequently approved 
                drugs.--In the case of a covered outpatient 
                drug approved by the Food and Drug 
                Administration after October 1, 1990, clause 
                (ii)(II) of subparagraph (A) shall be applied 
                by substituting ``the first full calendar 
                quarter after the day on which the drug was 
                first marketed'' for ``the calendar quarter 
                beginning July 1, 1990'' and ``the month prior 
                to the first month of the first full calendar 
                quarter after the day on which the drug was 
                first marketed'' for ``September 1990''.
                  (C) Treatment of new formulations.--
                          (i) In general.--In the case of a 
                        drug that is a line extension of a 
                        single source drug or an innovator 
                        multiple source drug that is an oral 
                        solid dosage form, the rebate 
                        obligation for a rebate period with 
                        respect to such drug under this 
                        subsection shall be the greater of the 
                        amount described in clause (ii) for 
                        such drug or the amount described in 
                        clause (iii) for such drug.
                          (ii) Amount 1.--For purposes of 
                        clause (i), the amount described in 
                        this clause with respect to a drug 
                        described in clause (i) and rebate 
                        period is the amount computed under 
                        paragraph (1) for such drug, increased 
                        by the amount computed under 
                        subparagraph (A) and, as applicable, 
                        subparagraph (B) for such drug and 
                        rebate period.
                          (iii) Amount 2.--For purposes of 
                        clause (i), the amount described in 
                        this clause with respect to a drug 
                        described in clause (i) and rebate 
                        period is the amount computed under 
                        paragraph (1) for such drug, increased 
                        by the product of--
                                  (I) the average manufacturer 
                                price for the rebate period of 
                                the line extension of a single 
                                source drug or an innovator 
                                multiple source drug that is an 
                                oral solid dosage form;
                                  (II) the highest additional 
                                rebate (calculated as a 
                                percentage of average 
                                manufacturer price) under this 
                                paragraph for the rebate period 
                                for any strength of the 
                                original single source drug or 
                                innovator multiple source drug; 
                                and
                                  (III) the total number of 
                                units of each dosage form and 
                                strength of the line extension 
                                product paid for under the 
                                State plan in the rebate period 
                                (as reported by the State).
                In this subparagraph, the term ``line 
                extension'' means, with respect to a drug, a 
                new formulation of the drug, such as an 
                extended release formulation, but does not 
                include an abuse-deterrent formulation of the 
                drug (as determined by the Secretary), 
                regardless of whether such abuse-deterrent 
                formulation is an extended release formulation.
                  (D) Maximum rebate amount.--In no case shall 
                the sum of the amounts applied under paragraph 
                (1)(A)(ii) and this paragraph with respect to 
                each dosage form and strength of a single 
                source drug or an innovator multiple source 
                drug for a rebate period beginning after 
                December 31, 2009, and before January 1, 2024, 
                exceed 100 percent of the average manufacturer 
                price of the drug.
          (3) Rebate for other drugs.--
                  (A) In general.--Except as provided in 
                subparagraph (C), the amount of the rebate paid 
                to a State for a rebate period with respect to 
                each dosage form and strength of covered 
                outpatient drugs (other than single source 
                drugs and innovator multiple source drugs) 
                shall be equal to the product of--
                          (i) the applicable percentage (as 
                        described in subparagraph (B)) of the 
                        average manufacturer price for the 
                        dosage form and strength for the rebate 
                        period, and
                          (ii) the total number of units of 
                        such dosage form and strength dispensed 
                        after December 31, 1990, for which 
                        payment was made under the State plan 
                        for the rebate period.
                  (B) Applicable percentage defined.--For 
                purposes of subparagraph (A)(i), the 
                ``applicable percentage'' for rebate periods 
                beginning--
                          (i) before January 1, 1994, is 10 
                        percent,
                          (ii) after December 31, 1993, and 
                        before January 1, 2010, is 11 percent; 
                        and
                          (iii) after December 31, 2009, is 13 
                        percent.
                  (C) Additional rebate.--
                          (i) In general.--The amount of the 
                        rebate specified in this paragraph for 
                        a rebate period, with respect to each 
                        dosage form and strength of a covered 
                        outpatient drug other than a single 
                        source drug or an innovator multiple 
                        source drug of a manufacturer, shall be 
                        increased in the manner that the rebate 
                        for a dosage form and strength of a 
                        single source drug or an innovator 
                        multiple source drug is increased under 
                        subparagraphs (A) and (D) of paragraph 
                        (2), except as provided in clause (ii).
                          (ii) Special rules for application of 
                        provision.--In applying subparagraphs 
                        (A) and (D) of paragraph (2) under 
                        clause (i)--
                                  (I) the reference in 
                                subparagraph (A)(i) of such 
                                paragraph to ``1990'' shall be 
                                deemed a reference to ``2014'';
                                  (II) subject to clause (iii), 
                                the reference in subparagraph 
                                (A)(ii) of such paragraph to 
                                ``the calendar quarter 
                                beginning July 1, 1990'' shall 
                                be deemed a reference to ``the 
                                calendar quarter beginning July 
                                1, 2014''; and
                                  (III) subject to clause 
                                (iii), the reference in 
                                subparagraph (A)(ii) of such 
                                paragraph to ``September 1990'' 
                                shall be deemed a reference to 
                                ``September 2014'';
                                  (IV) the references in 
                                subparagraph (D) of such 
                                paragraph to ``paragraph 
                                (1)(A)(ii)'', ``this 
                                paragraph'', and ``December 31, 
                                2009'' shall be deemed 
                                references to ``subparagraph 
                                (A)'', ``this subparagraph'', 
                                and ``December 31, 2014'', 
                                respectively; and
                                  (V) any reference in such 
                                paragraph to a ``single source 
                                drug or an innovator multiple 
                                source drug'' shall be deemed 
                                to be a reference to a drug to 
                                which clause (i) applies.
                          (iii) Special rule for certain 
                        noninnovator multiple source drugs.--In 
                        applying paragraph (2)(A)(ii)(II) under 
                        clause (i) with respect to a covered 
                        outpatient drug that is first marketed 
                        as a drug other than a single source 
                        drug or an innovator multiple source 
                        drug after April 1, 2013, such 
                        paragraph shall be applied--
                                  (I) by substituting ``the 
                                applicable quarter'' for ``the 
                                calendar quarter beginning July 
                                1, 1990''; and
                                  (II) by substituting ``the 
                                last month in such applicable 
                                quarter'' for ``September 
                                1990''.
                          (iv) Applicable quarter defined.--In 
                        this subsection, the term ``applicable 
                        quarter'' means, with respect to a drug 
                        described in clause (iii), the fifth 
                        full calendar quarter after which the 
                        drug is marketed as a drug other than a 
                        single source drug or an innovator 
                        multiple source drug.
          (4) Recovery of unpaid rebate amounts due to 
        misclassification of covered outpatient drugs.--
                  (A) In general.--If the Secretary determines 
                that a manufacturer with an agreement under 
                this section paid a lower per-unit rebate 
                amount to a State for a rebate period as a 
                result of the misclassification by the 
                manufacturer of a covered outpatient drug 
                (without regard to whether the manufacturer 
                knowingly made the misclassification or should 
                have known that the misclassification would be 
                made) than the per-unit rebate amount that the 
                manufacturer would have paid to the State if 
                the drug had been correctly classified, the 
                manufacturer shall pay to the State an amount 
                equal to the product of--
                          (i) the difference between--
                                  (I) the per-unit rebate 
                                amount paid to the State for 
                                the period; and
                                  (II) the per-unit rebate 
                                amount that the manufacturer 
                                would have paid to the State 
                                for the period, as determined 
                                by the Secretary, if the drug 
                                had been correctly classified; 
                                and
                          (ii) the total units of the drug paid 
                        for under the State plan in the period.
                  (B) Authority to correct 
                misclassifications.--
                          (i) In general.--If the Secretary 
                        determines that a manufacturer with an 
                        agreement under this section has 
                        misclassified a covered outpatient drug 
                        (without regard to whether the 
                        manufacturer knowingly made the 
                        misclassification or should have known 
                        that the misclassification would be 
                        made), the Secretary shall notify the 
                        manufacturer of the misclassification 
                        and require the manufacturer to correct 
                        the misclassification in a timely 
                        manner.
                          (ii) Enforcement.--If, after 
                        receiving notice of a misclassification 
                        from the Secretary under clause (i), a 
                        manufacturer fails to correct the 
                        misclassification by such time as the 
                        Secretary shall require, until the 
                        manufacturer makes such correction, the 
                        Secretary may do any or all of the 
                        following:
                                  (I) Correct the 
                                misclassification, using drug 
                                product information provided by 
                                the manufacturer, on behalf of 
                                the manufacturer.
                                  (II) Suspend the 
                                misclassified drug and the 
                                drug's status as a covered 
                                outpatient drug under the 
                                manufacturer's national rebate 
                                agreement, and exclude the 
                                misclassified drug from Federal 
                                financial participation in 
                                accordance with section 
                                1903(i)(10)(E).
                                  (III) Impose a civil money 
                                penalty (which shall be in 
                                addition to any other recovery 
                                or penalty which may be 
                                available under this section or 
                                any other provision of law) for 
                                each rebate period during which 
                                the drug is misclassified not 
                                to exceed an amount equal to 
                                the product of--
                                          (aa) the total number 
                                        of units of each dosage 
                                        form and strength of 
                                        such misclassified drug 
                                        paid for under any 
                                        State plan during such 
                                        a rebate period; and
                                          (bb) 23.1 percent of 
                                        the average 
                                        manufacturer price for 
                                        the dosage form and 
                                        strength of such 
                                        misclassified drug.
                  (C) Reporting and transparency.--
                          (i) In general.--The Secretary shall 
                        submit a report to Congress on at least 
                        an annual basis that includes 
                        information on the covered outpatient 
                        drugs that have been identified as 
                        misclassified, any steps taken to 
                        reclassify such drugs, the actions the 
                        Secretary has taken to ensure the 
                        payment of any rebate amounts which 
                        were unpaid as a result of such 
                        misclassification, and a disclosure of 
                        expenditures from the fund created in 
                        subsection (b)(3)(C)(iv), including an 
                        accounting of how such funds have been 
                        allocated and spent in accordance with 
                        such subsection.
                          (ii) Public access.--The Secretary 
                        shall make the information contained in 
                        the report required under clause (i) 
                        available to the public on a timely 
                        basis.
                  (D) Other penalties and actions.--Actions 
                taken and penalties imposed under this clause 
                shall be in addition to other remedies 
                available to the Secretary including 
                terminating the manufacturer's rebate agreement 
                for noncompliance with the terms of such 
                agreement and shall not exempt a manufacturer 
                from, or preclude the Secretary from pursuing, 
                any civil money penalty under this title or 
                title XI, or any other penalty or action as may 
                be prescribed by law.
  (d) Limitations on Coverage of Drugs.--
          (1) Permissible restrictions.--(A) A State may 
        subject to prior authorization any covered outpatient 
        drug. Any such prior authorization program shall comply 
        with the requirements of paragraph (5).
          (B) A State may exclude or otherwise restrict 
        coverage of a covered outpatient drug if--
                  (i) the prescribed use is not for a medically 
                accepted indication (as defined in subsection 
                (k)(6));
                  (ii) the drug is contained in the list 
                referred to in paragraph (2);
                  (iii) the drug is subject to such 
                restrictions pursuant to an agreement between a 
                manufacturer and a State authorized by the 
                Secretary under subsection (a)(1) or in effect 
                pursuant to subsection (a)(4); or
                  (iv) the State has excluded coverage of the 
                drug from its formulary established in 
                accordance with paragraph (4).
          (2) List of drugs subject to restriction.--The 
        following drugs or classes of drugs, or their medical 
        uses, may be excluded from coverage or otherwise 
        restricted:
                  (A) Agents when used for anorexia, weight 
                loss, or weight gain.
                  (B) Agents when used to promote fertility.
                  (C) Agents when used for cosmetic purposes or 
                hair growth.
                  (D) Agents when used for the symptomatic 
                relief of cough and colds.
                  (E) Prescription vitamins and mineral 
                products, except prenatal vitamins and fluoride 
                preparations.
                  (F) Nonprescription drugs, except, in the 
                case of pregnant women when recommended in 
                accordance with the Guideline referred to in 
                section 1905(bb)(2)(A), agents approved by the 
                Food and Drug Administration under the over-
                the-counter monograph process for purposes of 
                promoting, and when used to promote, tobacco 
                cessation.
                  (G) Covered outpatient drugs which the 
                manufacturer seeks to require as a condition of 
                sale that associated tests or monitoring 
                services be purchased exclusively from the 
                manufacturer or its designee.
                  (H) Agents when used for the treatment of 
                sexual or erectile dysfunction, unless such 
                agents are used to treat a condition, other 
                than sexual or erectile dysfunction, for which 
                the agents have been approved by the Food and 
                Drug Administration.
          (3) Update of drug listings.--The Secretary shall, by 
        regulation, periodically update the list of drugs or 
        classes of drugs described in paragraph (2) or their 
        medical uses, which the Secretary has determined, based 
        on data collected by surveillance and utilization 
        review programs of State medical assistance programs, 
        to be subject to clinical abuse or inappropriate use.
          (4) Requirements for formularies.--A State may 
        establish a formulary if the formulary meets the 
        following requirements:
                  (A) The formulary is developed by a committee 
                consisting of physicians, pharmacists, and 
                other appropriate individuals appointed by the 
                Governor of the State (or, at the option of the 
                State, the State's drug use review board 
                established under subsection (g)(3)).
                  (B) Except as provided in subparagraph (C), 
                the formulary includes the covered outpatient 
                drugs of any manufacturer which has entered 
                into and complies with an agreement under 
                subsection (a) (other than any drug excluded 
                from coverage or otherwise restricted under 
                paragraph (2)).
                  (C) A covered outpatient drug may be excluded 
                with respect to the treatment of a specific 
                disease or condition for an identified 
                population (if any) only if, based on the 
                drug's labeling (or, in the case of a drug the 
                prescribed use of which is not approved under 
                the Federal Food, Drug, and Cosmetic Act but is 
                a medically accepted indication, based on 
                information from the appropriate compendia 
                described in subsection (k)(6)), the excluded 
                drug does not have a significant, clinically 
                meaningful therapeutic advantage in terms of 
                safety, effectiveness, or clinical outcome of 
                such treatment for such population over other 
                drugs included in the formulary and there is a 
                written explanation (available to the public) 
                of the basis for the exclusion.
                  (D) The State plan permits coverage of a drug 
                excluded from the formulary (other than any 
                drug excluded from coverage or otherwise 
                restricted under paragraph (2)) pursuant to a 
                prior authorization program that is consistent 
                with paragraph (5).
                  (E) The formulary meets such other 
                requirements as the Secretary may impose in 
                order to achieve program savings consistent 
                with protecting the health of program 
                beneficiaries.
        A prior authorization program established by a State 
        under paragraph (5) is not a formulary subject to the 
        requirements of this paragraph.
          (5) Requirements of prior authorization programs.--A 
        State plan under this title may require, as a condition 
        of coverage or payment for a covered outpatient drug 
        for which Federal financial participation is available 
        in accordance with this section, with respect to drugs 
        dispensed on or after July 1, 1991, the approval of the 
        drug before its dispensing for any medically accepted 
        indication (as defined in subsection (k)(6)) only if 
        the system providing for such approval--
                  (A) provides response by telephone or other 
                telecommunication device within 24 hours of a 
                request for prior authorization; and
                  (B) except with respect to the drugs on the 
                list referred to in paragraph (2), provides for 
                the dispensing of at least 72-hour supply of a 
                covered outpatient prescription drug in an 
                emergency situation (as defined by the 
                Secretary).
          (6) Other permissible restrictions.--A State may 
        impose limitations, with respect to all such drugs in a 
        therapeutic class, on the minimum or maximum quantities 
        per prescription or on the number of refills, if such 
        limitations are necessary to discourage waste, and may 
        address instances of fraud or abuse by individuals in 
        any manner authorized under this Act.
          (7) Non-excludable drugs.--The following drugs or 
        classes of drugs, or their medical uses, shall not be 
        excluded from coverage:
                  (A) Agents when used to promote smoking 
                cessation, including agents approved by the 
                Food and Drug Administration under the over-
                the-counter monograph process for purposes of 
                promoting, and when used to promote, tobacco 
                cessation.
                  (B) Barbiturates.
                  (C) Benzodiazepines.
                  (D) Drugs and biological products described 
                in subsection (ee)(1)(A) of section 1905 that 
                are furnished as medical assistance in 
                accordance with subsection (a)(29) of such 
                section and section 1902(a)(10)(A).
                  (E) Drugs and biological products to which 
                section 1905(a)(4)(F) and subclause (XVIII) in 
                the matter following subparagraph (G) of 
                section 1902(a)(10) apply that are furnished as 
                medical assistance in accordance with such 
                section or clause, respectively, for the 
                treatment or prevention, of COVID-19, as 
                described in such subparagraph or subclause, 
                respectively, and section 1902(a)(10)(A).
  (e) Treatment of Pharmacy Reimbursement Limits.--
          (1) In general.--During the period beginning on 
        January 1, 1991, and ending on December 31, 1994--
                  (A) a State may not reduce the payment limits 
                established by regulation under this title or 
                any limitation described in paragraph (3) with 
                respect to the ingredient cost of a covered 
                outpatient drug or the dispensing fee for such 
                a drug below the limits in effect as of January 
                1, 1991, and
                  (B) except as provided in paragraph (2), the 
                Secretary may not modify by regulation the 
                formula established under sections 447.331 
                through 447.334 of title 42, Code of Federal 
                Regulations, in effect on November 5, 1990, to 
                reduce the limits described in subparagraph 
                (A).
          (2) Special rule.--If a State is not in compliance 
        with the regulations described in paragraph (1)(B), 
        paragraph (1)(A) shall not apply to such State until 
        such State is in compliance with such regulations.
          (3) Effect on state maximum allowable cost 
        limitations.--This section shall not supersede or 
        affect provisions in effect prior to January 1, 1991, 
        or after December 31, 1994, relating to any maximum 
        allowable cost limitation established by a State for 
        payment by the State for covered outpatient drugs, and 
        rebates shall be made under this section without regard 
        to whether or not payment by the State for such drugs 
        is subject to such a limitation or the amount of such a 
        limitation.
          (4) Establishment of upper payment Limits.--Subject 
        to paragraph (5), the Secretary shall establish a 
        Federal upper reimbursement limit for each multiple 
        source drug for which the FDA has rated three or more 
        products therapeutically and pharmaceutically 
        equivalent, regardless of whether all such additional 
        formulations are rated as such and shall use only such 
        formulations when determining any such upper limit.
          (5) Use of amp in upper payment limits.--The 
        Secretary shall calculate the Federal upper 
        reimbursement limit established under paragraph (4) as 
        no less than 175 percent of the weighted average 
        (determined on the basis of utilization) of the most 
        recently reported monthly average manufacturer prices 
        for pharmaceutically and therapeutically equivalent 
        multiple source drug products that are available for 
        purchase by retail community pharmacies on a nationwide 
        basis. The Secretary shall implement a smoothing 
        process for average manufacturer prices. Such process 
        shall be similar to the smoothing process used in 
        determining the average sales price of a drug or 
        biological under section 1847A.
          (6) Transparent prescription drug pass-through 
        pricing required.--
                  (A) In general.--A contract between the State 
                and a pharmacy benefit manager (referred to in 
                this paragraph as a ``PBM''), or a contract 
                between the State and a managed care entity or 
                other specified entity (as such terms are 
                defined in section 1903(m)(9)(D) and 
                collectively referred to in this paragraph as 
                the ``entity'') that includes provisions making 
                the entity responsible for coverage of covered 
                outpatient drugs dispensed to individuals 
                enrolled with the entity, shall require that 
                payment for such drugs and related 
                administrative services (as applicable), 
                including payments made by a PBM on behalf of 
                the State or entity, is based on a transparent 
                prescription drug pass-through pricing model 
                under which--
                          (i) any payment made by the entity or 
                        the PBM (as applicable) for such a 
                        drug--
                                  (I) is limited to--
                                          (aa) ingredient cost; 
                                        and
                                          (bb) a professional 
                                        dispensing fee that is 
                                        not less than the 
                                        professional dispensing 
                                        fee that the State plan 
                                        or waiver would pay if 
                                        the plan or waiver was 
                                        making the payment 
                                        directly;
                                  (II) is passed through in its 
                                entirety (except as reduced 
                                under Federal or State laws and 
                                regulations in response to 
                                instances of waste, fraud, or 
                                abuse) by the entity or PBM to 
                                the pharmacy or provider that 
                                dispenses the drug; and
                                  (III) is made in a manner 
                                that is consistent with 
                                sections 447.502, 447.512, 
                                447.514, and 447.518 of title 
                                42, Code of Federal Regulations 
                                (or any successor regulation) 
                                as if such requirements applied 
                                directly to the entity or the 
                                PBM, except that any payment by 
                                the entity or the PBM for the 
                                ingredient cost of such drug 
                                purchased by a covered entity 
                                (as defined in subsection 
                                (a)(5)(B)) may exceed the 
                                actual acquisition cost (as 
                                defined in 447.502 of title 42, 
                                Code of Federal Regulations, or 
                                any successor regulation) for 
                                such drug if--
                                          (aa) such drug was 
                                        subject to an agreement 
                                        under section 340B of 
                                        the Public Health 
                                        Service Act;
                                          (bb) such payment for 
                                        the ingredient cost of 
                                        such drug does not 
                                        exceed the maximum 
                                        payment that would have 
                                        been made by the entity 
                                        or the PBM for the 
                                        ingredient cost of such 
                                        drug if such drug had 
                                        not been purchased by 
                                        such covered entity; 
                                        and
                                          (cc) such covered 
                                        entity reports to the 
                                        Secretary (in a form 
                                        and manner specified by 
                                        the Secretary), on an 
                                        annual basis and with 
                                        respect to payments for 
                                        the ingredient costs of 
                                        such drugs so purchased 
                                        by such covered entity 
                                        that are in excess of 
                                        the actual acquisition 
                                        costs for such drugs, 
                                        the aggregate amount of 
                                        such excess;
                          (ii) payment to the entity or the PBM 
                        (as applicable) for administrative 
                        services performed by the entity or PBM 
                        is limited to an administrative fee 
                        that reflects the fair market value of 
                        such services;
                          (iii) the entity or the PBM (as 
                        applicable) makes available to the 
                        State, and the Secretary upon request, 
                        all costs and payments related to 
                        covered outpatient drugs and 
                        accompanying administrative services 
                        incurred, received, or made by the 
                        entity or the PBM, including ingredient 
                        costs, professional dispensing fees, 
                        administrative fees, post-sale and 
                        post-invoice fees, discounts, or 
                        related adjustments such as direct and 
                        indirect remuneration fees, and any and 
                        all other remuneration; and
                          (iv) any form of spread pricing 
                        whereby any amount charged or claimed 
                        by the entity or the PBM (as 
                        applicable) that exceeds the amount 
                        paid to the pharmacies or providers on 
                        behalf of the State or entity, 
                        including any post-sale or post-invoice 
                        fees, discounts, or related adjustments 
                        such as direct and indirect 
                        remuneration fees or assessments (after 
                        allowing for an administrative fee as 
                        described in clause (ii)) is not 
                        allowable for purposes of claiming 
                        Federal matching payments under this 
                        title.
                  (B) Making certain information available.--
                The Secretary shall publish, not less 
                frequently than on an annual basis, information 
                received by the Secretary pursuant to 
                subparagraph (A)(i)(III)(cc). Such information 
                shall be so published in an electronic and 
                searchable format, such as through the 340B 
                Office of Pharmacy Affairs Information System 
                (or a successor system).
  (f) Survey of Retail Prices; State Payment and Utilization 
Rates; and Performance Rankings.--
          (1) Survey of retail prices.--
                  (A) Use of vendor.--The Secretary may 
                contract services for--
                          (i) with respect to a retail 
                        community pharmacy, the determination 
                        on a monthly basis of retail survey 
                        prices for covered outpatient drugs 
                        that represent a nationwide average of 
                        consumer purchase prices for such 
                        drugs, net of all discounts and rebates 
                        (to the extent any information with 
                        respect to such discounts and rebates 
                        is available); and
                          (ii) the notification of the 
                        Secretary when a drug product that is 
                        therapeutically and pharmaceutically 
                        equivalent and bioequivalent becomes 
                        generally available.
                  (B) Secretary response to notification of 
                availability of multiple source products.--If 
                contractor notifies the Secretary under 
                subparagraph (A)(ii) that a drug product 
                described in such subparagraph has become 
                generally available, the Secretary shall make a 
                determination, within 7 days after receiving 
                such notification, as to whether the product is 
                now described in subsection (e)(4).
                  (C) Use of competitive bidding.--In 
                contracting for such services, the Secretary 
                shall competitively bid for an outside vendor 
                that has a demonstrated history in--
                          (i) surveying and determining, on a 
                        representative nationwide basis, retail 
                        prices for ingredient costs of 
                        prescription drugs;
                          (ii) working with retail community 
                        pharmacies, commercial payers, and 
                        States in obtaining and disseminating 
                        such price information; and
                          (iii) collecting and reporting such 
                        price information on at least a monthly 
                        basis.
                In contracting for such services, the Secretary 
                may waive such provisions of the Federal 
                Acquisition Regulation as are necessary for the 
                efficient implementation of this subsection, 
                other than provisions relating to 
                confidentiality of information and such other 
                provisions as the Secretary determines 
                appropriate.
                  (D) Additional provisions.--A contract with a 
                vendor under this paragraph shall include such 
                terms and conditions as the Secretary shall 
                specify, including the following:
                          (i) The vendor must monitor the 
                        marketplace and report to the Secretary 
                        each time there is a new covered 
                        outpatient drug generally available.
                          (ii) The vendor must update the 
                        Secretary no less often than monthly on 
                        the retail survey prices for covered 
                        outpatient drugs.
                          (iii) The contract shall be effective 
                        for a term of 2 years.
                  (E) Availability of information to states.--
                Information on retail survey prices obtained 
                under this paragraph, including applicable 
                information on single source drugs, shall be 
                provided to States on at least a monthly basis. 
                The Secretary shall devise and implement a 
                means for providing access to each State agency 
                designated under section 1902(a)(5) with 
                responsibility for the administration or 
                supervision of the administration of the State 
                plan under this title of the retail survey 
                price determined under this paragraph.
          (2) Annual state report.--Each State shall annually 
        report to the Secretary information on--
                  (A) the payment rates under the State plan 
                under this title for covered outpatient drugs;
                  (B) the dispensing fees paid under such plan 
                for such drugs; and
                  (C) utilization rates for noninnovator 
                multiple source drugs under such plan.
          (3) Annual state performance rankings.--
                  (A) Comparative analysis.--The Secretary 
                annually shall compare, for the 50 most widely 
                prescribed drugs identified by the Secretary, 
                the national retail sales price data (collected 
                under paragraph (1)) for such drugs with data 
                on prices under this title for each such drug 
                for each State.
                  (B) Availability of information.--The 
                Secretary shall submit to Congress and the 
                States full information regarding the annual 
                rankings made under subparagraph (A).
          (4) Appropriation.--Out of any funds in the Treasury 
        not otherwise appropriated, there is appropriated to 
        the Secretary of Health and Human Services $5,000,000 
        for each of fiscal years 2006 through 2010 to carry out 
        this subsection.
  (g) Drug Use Review.--
          (1) In general.--
                  (A) In order to meet the requirement of 
                section 1903(i)(10)(B), a State shall provide, 
                by not later than January 1, 1993, for a drug 
                use review program described in paragraph (2) 
                for covered outpatient drugs in order to assure 
                that prescriptions (i) are appropriate, (ii) 
                are medically necessary, and (iii) are not 
                likely to result in adverse medical results. 
                The program shall be designed to educate 
                physicians and pharmacists to identify and 
                reduce the frequency of patterns of fraud, 
                abuse, gross overuse, or inappropriate or 
                medically unnecessary care, among physicians, 
                pharmacists, and patients, or associated with 
                specific drugs or groups of drugs, as well as 
                potential and actual severe adverse reactions 
                to drugs including education on therapeutic 
                appropriateness, overutilization and 
                underutilization, appropriate use of generic 
                products, therapeutic duplication, drug-disease 
                contraindications, drug-drug interactions, 
                incorrect drug dosage or duration of drug 
                treatment, drug-allergy interactions, and 
                clinical abuse/misuse.
                  (A) In order to meet the requirement of 
                section 1902(a)(54), a State shall provide for 
                a drug use review program described in 
                paragraph (2) for covered outpatient drugs in 
                order to assure that prescriptions (i) are 
                appropriate, (ii) are medically necessary, and 
                (iii) are not likely to result in adverse 
                medical results. The program shall be designed 
                to educate physicians and pharmacists to 
                identify and reduce the frequency of patterns 
                of fraud, abuse, gross overuse, excessive 
                utilization,inappropriate or medically 
                unnecessary care, or prescribing or billing 
                practices that indicate abuse or excessive 
                utilization, among physicians, pharmacists, and 
                patients, or associated with specific drugs or 
                groups of drugs, as well as potential and 
                actual severe adverse reactions to drugs 
                including education on therapeutic 
                appropriateness, overutilization and 
                underutilization, appropriate use of generic 
                products, therapeutic duplication, drug-disease 
                contraindications, drug-drug interactions, 
                incorrect drug dosage or duration of drug 
                treatment, drug-allergy interactions, and 
                clinical abuse/misuse.
                  (B) The program shall assess data on drug use 
                against predetermined standards, consistent 
                with the following:
                          (i) compendia which shall consist of 
                        the following:
                                  (I) American Hospital 
                                Formulary Service Drug 
                                Information;
                                  (II) United States 
                                Pharmacopeia-Drug Information 
                                (or its successor 
                                publications); and
                                  (III) the DRUGDEX Information 
                                System; and
                          (ii) the peer-reviewed medical 
                        literature.
                  (C) The Secretary, under the procedures 
                established in section 1903, shall pay to each 
                State an amount equal to 75 per centum of so 
                much of the sums expended by the State plan 
                during calendar years 1991 through 1993 as the 
                Secretary determines is attributable to the 
                statewide adoption of a drug use review program 
                which conforms to the requirements of this 
                subsection.
                  (D) States shall not be required to perform 
                additional drug use reviews with respect to 
                drugs dispensed to residents of nursing 
                facilities which are in compliance with the 
                drug regimen review procedures prescribed by 
                the Secretary for such facilities in 
                regulations implementing section 1919, 
                currently at section 483.60 of title 42, Code 
                of Federal Regulations.
          (2) Description of program.--Each drug use review 
        program shall meet the following requirements for 
        covered outpatient drugs:
                  (A) Prospective drug review.--(i) The State 
                plan shall provide for a review of drug therapy 
                before each prescription is filled or delivered 
                to an individual receiving benefits under this 
                title, typically at the point-of-sale or point 
                of distribution. The review shall include 
                screening for potential drug therapy problems 
                due to therapeutic duplication, drug-disease 
                contraindications, drug-drug interactions 
                (including serious interactions with 
                nonprescription or over-the-counter drugs), 
                incorrect drug dosage or duration of drug 
                treatment, drug-allergy interactions, and 
                clinical abuse/misuse. Each State shall use the 
                compendia and literature referred to in 
                paragraph (1)(B) as its source of standards for 
                such review.
                  (ii) As part of the State's prospective drug 
                use review program under this subparagraph 
                applicable State law shall establish standards 
                for counseling of individuals receiving 
                benefits under this title by pharmacists which 
                includes at least the following:
                          (I) The pharmacist must offer to 
                        discuss with each individual receiving 
                        benefits under this title or caregiver 
                        of such individual (in person, whenever 
                        practicable, or through access to a 
                        telephone service which is toll-free 
                        for long-distance calls) who presents a 
                        prescription, matters which in the 
                        exercise of the pharmacist's 
                        professional judgment (consistent with 
                        State law respecting the provision of 
                        such information), the pharmacist deems 
                        significant including the following:
                                  (aa) The name and description 
                                of the medication.
                                  (bb) The route, dosage form, 
                                dosage, route of 
                                administration, and duration of 
                                drug therapy.
                                  (cc) Special directions and 
                                precautions for preparation, 
                                administration and use by the 
                                patient.
                                  (dd) Common severe side or 
                                adverse effects or interactions 
                                and therapeutic 
                                contraindications that may be 
                                encountered, including their 
                                avoidance, and the action 
                                required if they occur.
                                  (ee) Techniques for self-
                                monitoring drug therapy.
                                  (ff) Proper storage.
                                  (gg) Prescription refill 
                                information.
                                  (hh) Action to be taken in 
                                the event of a missed dose.
                          (II) A reasonable effort must be made 
                        by the pharmacist to obtain, record, 
                        and maintain at least the following 
                        information regarding individuals 
                        receiving benefits under this title:
                                  (aa) Name, address, telephone 
                                number, date of birth (or age) 
                                and gender.
                                  (bb) Individual history where 
                                significant, including disease 
                                state or states, known 
                                allergies and drug reactions, 
                                and a comprehensive list of 
                                medications and relevant 
                                devices.
                                  (cc) Pharmacist comments 
                                relevant to the individual's 
                                drug therapy.
                Nothing in this clause shall be construed as 
                requiring a pharmacist to provide consultation 
                when an individual receiving benefits under 
                this title or caregiver of such individual 
                refuses such consultation, or to require 
                verification of the offer to provide 
                consultation or a refusal of such offer.
                  (B) Retrospective drug use review.--The 
                program shall provide, through its mechanized 
                drug claims processing and information 
                retrieval systems (approved by the Secretary 
                under section 1903(r)) or otherwise, for the 
                ongoing periodic examination of claims data and 
                other records in order to identify patterns of 
                fraud, abuse, gross overuse, or inappropriate 
                or medically unnecessary care, among 
                physicians, pharmacists and individuals 
                receiving benefits under this title, or 
                associated with specific drugs or groups of 
                drugs.
                  (B) Retrospective drug use review.--The 
                program shall provide, through its mechanized 
                drug claims processing and information 
                retrieval systems (approved by the Secretary 
                under section 1903(r)) or otherwise, for the 
                ongoing periodic examination of claims data and 
                other records in order to identify patterns of 
                fraud, abuse, gross overuse, excessive 
                utilization,inappropriate or medically 
                unnecessary care, or prescribing or billing 
                practices that indicate abuse or excessive 
                utilization, among physicians, pharmacists and 
                individuals receiving benefits under this 
                title, or associated with specific drugs or 
                groups of drugs.
                  (C) Application of standards.--The program 
                shall, on an ongoing basis, assess data on drug 
                use against explicit predetermined standards 
                (using the compendia and literature referred to 
                in subsection (1)(B) as the source of standards 
                for such assessment) including but not limited 
                to monitoring for therapeutic appropriateness, 
                overutilization and underutilization, 
                appropriate use of generic products, 
                therapeutic duplication, drug-disease 
                contraindications, drug-drug interactions, 
                incorrect drug dosage or duration of drug 
                treatment, and clinical abuse/misuse and, as 
                necessary, introduce remedial strategies, in 
                order to improve the quality of care and to 
                conserve program funds or personal 
                expenditures.
                  (D) Educational program.--The program shall, 
                through its State drug use review board 
                established under paragraph (3), either 
                directly or through contracts with accredited 
                health care educational institutions, State 
                medical societies or State pharmacists 
                associations/societies or other organizations 
                as specified by the State, and using data 
                provided by the State drug use review board on 
                common drug therapy problems, provide for 
                active and ongoing educational outreach 
                programs (including the activities described in 
                paragraph (3)(C)(iii) of this subsection) to 
                educate practitioners on common drug therapy 
                problems with the aim of improving prescribing 
                or dispensing practices.
          (3) State drug use review board.--
                  (A) Establishment.--Each State shall provide 
                for the establishment of a drug use review 
                board (hereinafter referred to as the ``DUR 
                Board'') either directly or through a contract 
                with a private organization.
                  (B) Membership.--The membership of the DUR 
                Board shall include health care professionals 
                who have recognized knowledge and expertise in 
                one or more of the following:
                          (i) The clinically appropriate 
                        prescribing of covered outpatient 
                        drugs.
                          (ii) The clinically appropriate 
                        dispensing and monitoring of covered 
                        outpatient drugs.
                          (iii) Drug use review, evaluation, 
                        and intervention.
                          (iv) Medical quality assurance.
                The membership of the DUR Board shall be made 
                up at least \1/3\ but no more than 51 percent 
                licensed and actively practicing physicians and 
                at least \1/3\ licensed and actively practicing 
                pharmacists.
                  (C) Activities.--The activities of the DUR 
                Board shall include but not be limited to the 
                following:
                          (i) Retrospective DUR as defined in 
                        section (2)(B).
                          (ii) Application of standards as 
                        defined in section (2)(C).
                          (iii) Ongoing interventions for 
                        physicians and pharmacists, targeted 
                        toward therapy problems or individuals 
                        identified in the course of 
                        retrospective drug use reviews 
                        performed under this subsection. 
                        Intervention programs shall include, in 
                        appropriate instances, at least:
                                  (I) information dissemination 
                                sufficient to ensure the ready 
                                availability to physicians and 
                                pharmacists in the State of 
                                information concerning its 
                                duties, powers, and basis for 
                                its standards;
                                  (II) written, oral, or 
                                electronic reminders containing 
                                patient-specific or drug-
                                specific (or both) information 
                                and suggested changes in 
                                prescribing or dispensing 
                                practices, communicated in a 
                                manner designed to ensure the 
                                privacy of patient-related 
                                information;
                                  (III) use of face-to-face 
                                discussions between health care 
                                professionals who are experts 
                                in rational drug therapy and 
                                selected prescribers and 
                                pharmacists who have been 
                                targeted for educational 
                                intervention, including 
                                discussion of optimal 
                                prescribing, dispensing, or 
                                pharmacy care practices, and 
                                follow-up face-to-face 
                                discussions; and
                                  (IV) intensified review or 
                                monitoring of selected 
                                prescribers or dispensers.
                The Board shall re-evaluate interventions after 
                an appropriate period of time to determine if 
                the intervention improved the quality of drug 
                therapy, to evaluate the success of the 
                interventions and make modifications as 
                necessary.
                  (D) Annual report.--Each State shall require 
                the DUR Board to prepare a report on an annual 
                basis. The State shall submit a report on an 
                annual basis to the Secretary which shall 
                include a description of the activities of the 
                Board, including the nature and scope of the 
                prospective and retrospective drug use review 
                programs, a summary of the interventions used, 
                an assessment of the impact of these 
                educational interventions on quality of care, 
                and an estimate of the cost savings generated 
                as a result of such program. The Secretary 
                shall utilize such report in evaluating the 
                effectiveness of each State's drug use review 
                program.
  (h) Electronic Claims Management.--
          (1) In general.--In accordance with chapter 35 of 
        title 44, United States Code (relating to coordination 
        of Federal information policy), the Secretary shall 
        encourage each State agency to establish, as its 
        principal means of processing claims for covered 
        outpatient drugs under this title, a point-of-sale 
        electronic claims management system, for the purpose of 
        performing on-line, real time eligibility 
        verifications, claims data capture, adjudication of 
        claims, and assisting pharmacists (and other authorized 
        persons) in applying for and receiving payment.
          (2) Encouragement.--In order to carry out paragraph 
        (1)--
                  (A) for calendar quarters during fiscal years 
                1991 and 1992, expenditures under the State 
                plan attributable to development of a system 
                described in paragraph (1) shall receive 
                Federal financial participation under section 
                1903(a)(3)(A)(i) (at a matching rate of 90 
                percent) if the State acquires, through 
                applicable competitive procurement process in 
                the State, the most cost-effective 
                telecommunications network and automatic data 
                processing services and equipment; and
                  (B) the Secretary may permit, in the 
                procurement described in subparagraph (A) in 
                the application of part 433 of title 42, Code 
                of Federal Regulations, and parts 95, 205, and 
                307 of title 45, Code of Federal Regulations, 
                the substitution of the State's request for 
                proposal in competitive procurement for advance 
                planning and implementation documents otherwise 
                required.
  (i) Annual Report.--
          (1) In general.--Not later than May 1 of each year 
        the Secretary shall transmit to the Committee on 
        Finance of the Senate, the Committee on Energy and 
        Commerce of the House of Representatives, and the 
        Committees on Aging of the Senate and the House of 
        Representatives a report on the operation of this 
        section in the preceding fiscal year.
          (2) Details.--Each report shall include information 
        on--
                  (A) ingredient costs paid under this title 
                for single source drugs, multiple source drugs, 
                and nonprescription covered outpatient drugs;
                  (B) the total value of rebates received and 
                number of manufacturers providing such rebates;
                  (C) how the size of such rebates compare with 
                the size or rebates offered to other purchasers 
                of covered outpatient drugs;
                  (D) the effect of inflation on the value of 
                rebates required under this section;
                  (E) trends in prices paid under this title 
                for covered outpatient drugs; and
                  (F) Federal and State administrative costs 
                associated with compliance with the provisions 
                of this title.
  (j) Exemption of Organized Health Care Settings.--
          (1) Covered outpatient drugs are not subject to the 
        requirements of this section if such drugs are--
                  (A) dispensed by health maintenance 
                organizations, including Medicaid managed care 
                organizations that contract under section 
                1903(m); and
                  (B) subject to discounts under section 340B 
                of the Public Health Service Act.
  (2) The State plan shall provide that a hospital (providing 
medical assistance under such plan) that dispenses covered 
outpatient drugs using drug formulary systems, and bills the 
plan no more than the hospital's purchasing costs for covered 
outpatient drugs (as determined under the State plan) shall not 
be subject to the requirements of this section.
  (3) Nothing in this subsection shall be construed as 
providing that amounts for covered outpatient drugs paid by the 
institutions described in this subsection should not be taken 
into account for purposes of determining the best price as 
described in subsection (c).
  (k) Definitions.--In the section--
          (1) Average manufacturer price.--
                  (A) In general.--Subject to subparagraph (B), 
                the term ``average manufacturer price'' means, 
                with respect to a covered outpatient drug of a 
                manufacturer for a rebate period, the average 
                price paid to the manufacturer for the drug in 
                the United States by--
                          (i) wholesalers for drugs distributed 
                        to retail community pharmacies; and
                          (ii) retail community pharmacies that 
                        purchase drugs directly from the 
                        manufacturer.
                  (B) Exclusion of customary prompt pay 
                discounts and other payments.--
                          (i) In general.--The average 
                        manufacturer price for a covered 
                        outpatient drug shall exclude--
                                  (I) customary prompt pay 
                                discounts extended to 
                                wholesalers;
                                  (II) bona fide service fees 
                                paid by manufacturers to 
                                wholesalers or retail community 
                                pharmacies, including (but not 
                                limited to) distribution 
                                service fees, inventory 
                                management fees, product 
                                stocking allowances, and fees 
                                associated with administrative 
                                services agreements and patient 
                                care programs (such as 
                                medication compliance programs 
                                and patient education 
                                programs);
                                  (III) reimbursement by 
                                manufacturers for recalled, 
                                damaged, expired, or otherwise 
                                unsalable returned goods, 
                                including (but not limited to) 
                                reimbursement for the cost of 
                                the goods and any reimbursement 
                                of costs associated with return 
                                goods handling and processing, 
                                reverse logistics, and drug 
                                destruction;
                                  (IV) payments received from, 
                                and rebates or discounts 
                                provided to, pharmacy benefit 
                                managers, managed care 
                                organizations, health 
                                maintenance organizations, 
                                insurers, hospitals, clinics, 
                                mail order pharmacies, long 
                                term care providers, 
                                manufacturers, or any other 
                                entity that does not conduct 
                                business as a wholesaler or a 
                                retail community pharmacy, 
                                unless the drug is an 
                                inhalation, infusion, 
                                instilled, implanted, or 
                                injectable drug that is not 
                                generally dispensed through a 
                                retail community pharmacy
                                  (V) discounts provided by 
                                manufacturers under section 
                                1860D-14A or under section 
                                1860D-14C;
                                  (VI) any reduction in price 
                                paid during the rebate period 
                                to the manufacturer for a drug 
                                by reason of application of 
                                part E of title XI;
                                  (VII) rebates paid by 
                                manufacturers under section 
                                1847A(i); and
                                  (VIII) rebates paid by 
                                manufacturers under section 
                                1860D-14B.
                          (ii) Inclusion of other discounts and 
                        payments.--Notwithstanding clause (i), 
                        any other discounts, rebates, payments, 
                        or other financial transactions that 
                        are received by, paid by, or passed 
                        through to, retail community pharmacies 
                        shall be included in the average 
                        manufacturer price for a covered 
                        outpatient drug.
                  (C) Exclusion of section 505(c) drugs.--In 
                the case of a manufacturer that approves, 
                allows, or otherwise permits any drug of the 
                manufacturer to be sold under the 
                manufacturer's new drug application approved 
                under section 505(c) of the Federal Food, Drug, 
                and Cosmetic Act, such term shall be exclusive 
                of the average price paid for such drug by 
                wholesalers for drugs distributed to retail 
                community pharmacies.
          (2) Covered outpatient drug.--Subject to the 
        exceptions in paragraph (3), the term ``covered 
        outpatient drug'' means--
                  (A) of those drugs which are treated as 
                prescribed drugs for purposes of section 
                1905(a)(12), a drug which may be dispensed only 
                upon prescription (except as provided in 
                paragraph (4)), and--
                          (i) which is approved for safety and 
                        effectiveness as a prescription drug 
                        under section 505 or 507 of the Federal 
                        Food, Drug, and Cosmetic Act or which 
                        is approved under section 505(j) of 
                        such Act;
                          (ii)(I) which was commercially used 
                        or sold in the United States before the 
                        date of the enactment of the Drug 
                        Amendments of 1962 or which is 
                        identical, similar, or related (within 
                        the meaning of section 310.6(b)(1) of 
                        title 21 of the Code of Federal 
                        Regulations) to such a drug, and (II) 
                        which has not been the subject of a 
                        final determination by the Secretary 
                        that it is a ``new drug'' (within the 
                        meaning of section 201(p) of the 
                        Federal Food, Drug, and Cosmetic Act) 
                        or an action brought by the Secretary 
                        under section 301, 302(a), or 304(a) of 
                        such Act to enforce section 502(f) or 
                        505(a) of such Act; or
                          (iii)(I) which is described in 
                        section 107(c)(3) of the Drug 
                        Amendments of 1962 and for which the 
                        Secretary has determined there is a 
                        compelling justification for its 
                        medical need, or is identical, similar, 
                        or related (within the meaning of 
                        section 310.6(b)(1) of title 21 of the 
                        Code of Federal Regulations) to such a 
                        drug, and (II) for which the Secretary 
                        has not issued a notice of an 
                        opportunity for a hearing under section 
                        505(e) of the Federal Food, Drug, and 
                        Cosmetic Act on a proposed order of the 
                        Secretary to withdraw approval of an 
                        application for such drug under such 
                        section because the Secretary has 
                        determined that the drug is less than 
                        effective for some or all conditions of 
                        use prescribed, recommended, or 
                        suggested in its labeling; and
                  (B) a biological product, other than a 
                vaccine which--
                          (i) may only be dispensed upon 
                        prescription,
                          (ii) is licensed under section 351 of 
                        the Public Health Service Act, and
                          (iii) is produced at an establishment 
                        licensed under such section to produce 
                        such product; and
                  (C) insulin certified under section 506 of 
                the Federal Food, Drug, and Cosmetic Act.
          (3) Limiting definition.--The term ``covered 
        outpatient drug'' does not include any drug, biological 
        product, or insulin provided as part of, or as incident 
        to and in the same setting as, any of the following 
        (and for which payment may be made under this title as 
        part of payment for the following and not as direct 
        reimbursement for the drug):
                  (A) Inpatient hospital services.
                  (B) Hospice services.
                  (C) Dental services, except that drugs for 
                which the State plan authorizes direct 
                reimbursement to the dispensing dentist are 
                covered outpatient drugs.
                  (D) Physicians' services.
                  (E) Outpatient hospital services.
                  (F) Nursing facility services and services 
                provided by an intermediate care facility for 
                the mentally retarded.
                  (G) Other laboratory and x-ray services.
                  (H) Renal dialysis.
        Such term also does not include any such drug or 
        product for which a National Drug Code number is not 
        required by the Food and Drug Administration or a drug 
        or biological used for a medical indication which is 
        not a medically accepted indication. Any drug, 
        biological product, or insulin excluded from the 
        definition of such term as a result of this paragraph 
        shall be treated as a covered outpatient drug for 
        purposes of determining the best price (as defined in 
        subsection (c)(1)(C)) for such drug, biological 
        product, or insulin.
          (4) Nonprescription drugs.--If a State plan for 
        medical assistance under this title includes coverage 
        of prescribed drugs as described in section 1905(a)(12) 
        and permits coverage of drugs which may be sold without 
        a prescription (commonly referred to as ``over-the-
        counter'' drugs), if they are prescribed by a physician 
        (or other person authorized to prescribe under State 
        law), such a drug shall be regarded as a covered 
        outpatient drug.
          (5) Manufacturer.--The term ``manufacturer'' means 
        any entity which is engaged in--
                  (A) the production, preparation, propagation, 
                compounding, conversion, or processing of 
                prescription drug products, either directly or 
                indirectly by extraction from substances of 
                natural origin, or independently by means of 
                chemical synthesis, or by a combination of 
                extraction and chemical synthesis, or
                  (B) in the packaging, repackaging, labeling, 
                relabeling, or distribution of prescription 
                drug products.
        Such term does not include a wholesale distributor of 
        drugs or a retail pharmacy licensed under State law.
          (6) Medically accepted indication.--The term 
        ``medically accepted indication'' means any use for a 
        covered outpatient drug which is approved under the 
        Federal Food, Drug, and Cosmetic Act, or the use of 
        which is supported by one or more citations included or 
        approved for inclusion in any of the compendia 
        described in subsection (g)(1)(B)(i).
          (7) Multiple source drug; innovator multiple source 
        drug; noninnovator multiple source drug; single source 
        drug.--
                  (A) Defined.--
                          (i) Multiple source drug.--The term 
                        ``multiple source drug'' means, with 
                        respect to a rebate period, a covered 
                        outpatient drug, including a drug 
                        product approved for marketing as a 
                        non-prescription drug that is regarded 
                        as a covered outpatient drug under 
                        paragraph (4), for which there at least 
                        1 other drug product which--
                                  (I) is rated as 
                                therapeutically equivalent 
                                (under the Food and Drug 
                                Administration's most recent 
                                publication of ``Approved Drug 
                                Products with Therapeutic 
                                Equivalence Evaluations''),
                                  (II) except as provided in 
                                subparagraph (B), is 
                                pharmaceutically equivalent and 
                                bioequivalent, as defined in 
                                subparagraph (C) and as 
                                determined by the Food and Drug 
                                Administration, and
                                  (III) is sold or marketed in 
                                the United States during the 
                                period.
                          (ii) Innovator multiple source 
                        drug.--The term ``innovator multiple 
                        source drug'' means a multiple source 
                        drug that is marketed under a new drug 
                        application approved by the Food and 
                        Drug Administration, unless the 
                        Secretary determines that a narrow 
                        exception applies (as described in 
                        section 447.502 of title 42, Code of 
                        Federal Regulations (or any successor 
                        regulation)).
                          (iii) Noninnovator multiple source 
                        drug.--The term ``noninnovator multiple 
                        source drug'' means a multiple source 
                        drug that is not an innovator multiple 
                        source drug.
                          (iv) Single source drug.--The term 
                        ``single source drug'' means a covered 
                        outpatient drug, including a drug 
                        product approved for marketing as a 
                        non-prescription drug that is regarded 
                        as a covered outpatient drug under 
                        paragraph (4), which is produced or 
                        distributed under a new drug 
                        application approved by the Food and 
                        Drug Administration, including a drug 
                        product marketed by any cross-licensed 
                        producers or distributors operating 
                        under the new drug application unless 
                        the Secretary determines that a narrow 
                        exception applies (as described in 
                        section 447.502 of title 42, Code of 
                        Federal Regulations (or any successor 
                        regulation)). Such term also includes a 
                        covered outpatient drug that is a 
                        biological product licensed, produced, 
                        or distributed under a biologics 
                        license application approved by the 
                        Food and Drug Administration.
                  (B) Exception.--Subparagraph (A)(i)(II) shall 
                not apply if the Food and Drug Administration 
                changes by regulation the requirement that, for 
                purposes of the publication described in 
                subparagraph (A)(i)(I), in order for drug 
                products to be rated as therapeutically 
                equivalent, they must be pharmaceutically 
                equivalent and bioequivalent, as defined in 
                subparagraph (C).
                  (C) Definitions.--For purposes of this 
                paragraph--
                          (i) drug products are 
                        pharmaceutically equivalent if the 
                        products contain identical amounts of 
                        the same active drug ingredient in the 
                        same dosage form and meet compendial or 
                        other applicable standards of strength, 
                        quality, purity, and identity; and
                          (ii) drugs are bioequivalent if they 
                        do not present a known or potential 
                        bioequivalence problem, or, if they do 
                        present such a problem, they are shown 
                        to meet an appropriate standard of 
                        bioequivalence.
          (8) Rebate period.--The term ``rebate period'' means, 
        with respect to an agreement under subsection (a), a 
        calendar quarter or other period specified by the 
        Secretary with respect to the payment of rebates under 
        such agreement.
          (9) State agency.--The term ``State agency'' means 
        the agency designated under section 1902(a)(5) to 
        administer or supervise the administration of the State 
        plan for medical assistance.
          (10) Retail community pharmacy.--The term ``retail 
        community pharmacy'' means an independent pharmacy, a 
        chain pharmacy, a supermarket pharmacy, or a mass 
        merchandiser pharmacy that is licensed as a pharmacy by 
        the State and that dispenses medications to the general 
        public at retail prices. Such term does not include a 
        pharmacy that dispenses prescription medications to 
        patients primarily through the mail, nursing home 
        pharmacies, long-term care facility pharmacies, 
        hospital pharmacies, clinics, charitable or not-for-
        profit pharmacies, government pharmacies, or pharmacy 
        benefit managers.
          (11) Wholesaler.--The term ``wholesaler'' means a 
        drug wholesaler that is engaged in wholesale 
        distribution of prescription drugs to retail community 
        pharmacies, including (but not limited to) repackers, 
        distributors, own-label distributors, private-label 
        distributors, jobbers, brokers, warehouses (including 
        distributor's warehouses, chain drug warehouses, and 
        wholesale drug warehouses) independent wholesale drug 
        traders, and retail community pharmacies that conduct 
        wholesale distributions.

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                       medicaid improvement fund

  Sec. 1941. (a) Establishment.--The Secretary shall establish 
under this title a Medicaid Improvement Fund (in this section 
referred to as the ``Fund'') which shall be available to the 
Secretary to improve the management of the Medicaid program by 
the Centers for Medicare & Medicaid Services, including 
oversight of contracts and contractors and evaluation of 
demonstration projects, and, in accordance with subsection 
(b)(3), for the purposes of subparagraph (B) of such 
subsection. Payments made for activities under this subsection 
shall be in addition to payments that would otherwise be made 
for such activities.
  (b) Funding.--
          (1) In general.--There shall be available to the 
        Fund, for expenditures from the Fund for fiscal year 
        2023 and thereafter, $0.
          (2) Funding limitation.--Amounts in the Fund pursuant 
        to paragraph (1) shall be available in advance of 
        appropriations but only if the total amount obligated 
        from the Fund does not exceed the amount available to 
        the Fund under paragraph (1). Amounts in the Fund 
        pursuant to paragraph (3) shall be available in advance 
        of appropriations but only if the total amount 
        obligated from the Fund does not exceed the amount 
        available to the Fund under such paragraph (3). The 
        Secretary may obligate funds from the Fund only if the 
        Secretary determines (and the Chief Actuary of the 
        Centers for Medicare & Medicaid Services and the 
        appropriate budget officer certify) that there are 
        available in the Fund sufficient amounts to cover all 
        such obligations incurred consistent with the previous 
        sentences.
          (3) Additional funding for state activities relating 
        to mechanized claims systems.--
                  (A) In general.--In addition to the amount 
                made available under paragraph (1), there shall 
                be available to the Fund, for expenditures from 
                the Fund in accordance with subparagraph (B), 
                for fiscal year 2028 and thereafter, [$0] 
                $88,000,000, to remain available until 
                expended.
                  (B) Purposes.--The Secretary shall use 
                amounts made available to the Fund under 
                subparagraph (A) to pay to each State which has 
                a plan approved under this title, for each 
                quarter beginning during or after fiscal year 
                2025 an amount equal to--
                          (i) 100 percent minus the percent 
                        specified in clause (i) of section 
                        1903(a)(3)(A) of so much of the sums 
                        expended by the State during such 
                        quarter as are attributable to the 
                        activities described in such clause;
                          (ii) 100 percent minus the Federal 
                        medical assistance percentage applied 
                        under clause (iii) of such section of 
                        so much of the sums expended during 
                        such quarter (as found necessary by the 
                        Secretary under such clause) by the 
                        State as are attributable to the 
                        activities described in such clause; 
                        and
                          (iii) 100 percent minus the percent 
                        specified in section 1903(a)(3)(B) of 
                        so much of the sums expended by the 
                        State during such quarter as are 
                        attributable to the activities 
                        described in such section.

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TITLE XXI--STATE CHILDREN'S HEALTH INSURANCE PROGRAM

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SEC. 2107. STRATEGIC OBJECTIVES AND PERFORMANCE GOALS; PLAN 
                    ADMINISTRATION.

  (a) Strategic Objectives and Performance Goals.--
          (1) Description.--A State child health plan shall 
        include a description of--
                  (A) the strategic objectives,
                  (B) the performance goals, and
                  (C) the performance measures,
        the State has established for providing child health 
        assistance to targeted low-income children under the 
        plan and otherwise for maximizing health benefits 
        coverage for other low-income children and children 
        generally in the State.
          (2) Strategic objectives.--Such plan shall identify 
        specific strategic objectives relating to increasing 
        the extent of creditable health coverage among targeted 
        low-income children and other low-income children.
          (3) Performance goals.--Such plan shall specify one 
        or more performance goals for each such strategic 
        objective so identified.
          (4) Performance measures.--Such plan shall describe 
        how performance under the plan will be--
                  (A) measured through objective, independently 
                verifiable means, and
                  (B) compared against performance goals, in 
                order to determine the State's performance 
                under this title.
  (b) Records, Reports, Audits, and Evaluation.--
          (1) Data collection, records, and reports.--A State 
        child health plan shall include an assurance that the 
        State will collect the data, maintain the records, and 
        furnish the reports to the Secretary, at the times and 
        in the standardized format the Secretary may require in 
        order to enable the Secretary to monitor State program 
        administration and compliance and to evaluate and 
        compare the effectiveness of State plans under this 
        title.
          (2) State assessment and study.--A State child health 
        plan shall include a description of the State's plan 
        for the annual assessments and reports under section 
        2108(a) and the evaluation required by section 2108(b).
          (3) Audits.--A State child health plan shall include 
        an assurance that the State will afford the Secretary 
        access to any records or information relating to the 
        plan for the purposes of review or audit.
  (c) Program Development Process.--A State child health plan 
shall include a description of the process used to involve the 
public in the design and implementation of the plan and the 
method for ensuring ongoing public involvement.
  (d) Program Budget.--A State child health plan shall include 
a description of the budget for the plan. The description shall 
be updated periodically as necessary and shall include details 
on the planned use of funds and the sources of the non-Federal 
share of plan expenditures, including any requirements for 
cost-sharing by beneficiaries.
  (e) Application of Certain General Provisions.--The following 
sections of this Act shall apply to States under this title in 
the same manner as they apply to a State under title XIX:
          (1) Title xix provisions.--
                  (A) Section 1902(a)(4)(C) (relating to 
                conflict of interest standards).
                  (B) Section 1902(a)(25) (relating to third 
                party liability).
                  (C) Section 1902(a)(39) (relating to 
                termination of participation of certain 
                providers).
                  (D) Section 1902(a)(78) (relating to 
                enrollment of providers participating in State 
                plans providing medical assistance on a fee-
                for-service basis).
                  (E) Section 1902(a)(72) (relating to limiting 
                FQHC contracting for provision of dental 
                services).
                  (F) Section 1902(a)(73) (relating to 
                requiring certain States to seek advice from 
                designees of Indian Health Programs and Urban 
                Indian Organizations).
                  (G) Subsections (a)(77) and (kk) of section 
                1902 (relating to provider and supplier 
                screening, enrollment, oversight, and reporting 
                requirements).
                  (H) Section 1902(e)(13) (relating to the 
                State option to rely on findings from an 
                Express Lane agency to help evaluate a child's 
                eligibility for medical assistance).
                  (I) Section 1902(e)(14) (relating to income 
                determined using modified adjusted gross income 
                and household income).
                  (J) Paragraphs (5) and (16) of section 
                1902(e) (relating to the State option to 
                provide medical assistance consisting of full 
                benefits during pregnancy and throughout the 
                12-month postpartum period under title XIX), if 
                the State provides child health assistance for 
                targeted low-income children who are pregnant 
                or to targeted low-income pregnant women and 
                the State has elected to apply such paragraph 
                (16) with respect to pregnant women under title 
                XIX, the provision of assistance under the 
                State child health plan or waiver for targeted 
                low-income children or targeted low-income 
                pregnant women during pregnancy and the 12-
                month postpartum period shall be required and 
                not at the option of the State and shall 
                include coverage of all items or services 
                provided to a targeted low-income child or 
                targeted low-income pregnant woman (as 
                applicable) under the State child health plan 
                or waiver).
                  (K) Section 1902(e)(12) (relating to 1 year 
                of continuous eligibility for children), except 
                that a targeted low-income child enrolled under 
                the State child health plan or waiver may be 
                transferred to the Medicaid program under title 
                XIX for the remaining duration of the 12-month 
                continuous eligibility period, if the child 
                becomes eligible for full benefits under title 
                XIX during such period.
                  (L) Section 1902(bb) (relating to payment for 
                services provided by Federally-qualified health 
                centers and rural health clinics).
                  (M) Section 1902(ff) (relating to disregard 
                of certain property for purposes of making 
                eligibility determinations).
                  (N) Paragraphs (2), (16), and (17) of section 
                1903(i) (relating to limitations on payment).
                  (O) Section 1903(m)(3) (relating to 
                limitation on payment with respect to managed 
                care).
                   (P) Paragraph (4) of section 1903(v) 
                (relating to optional coverage of categories of 
                lawfully residing immigrant children or 
                pregnant women), but only if the State has 
                elected to apply such paragraph with respect to 
                such category of children or pregnant women 
                under title XIX.
                   (Q) Section 1903(w) (relating to limitations 
                on provider taxes and donations).
                  (R) Section 1920A (relating to presumptive 
                eligibility for children).
                  (S) Subsections (a)(2)(C) (relating to Indian 
                enrollment), (d)(5) (relating to contract 
                requirement for managed care entities), (d)(6) 
                (relating to enrollment of providers 
                participating with a managed care entity), and 
                (h) (relating to special rules with respect to 
                Indian enrollees, Indian health care providers, 
                and Indian managed care entities) of section 
                1932.
                  (T) Section 1942 (relating to authorization 
                to receive data directly relevant to 
                eligibility determinations).
                   (U) Section 1943(b) (relating to 
                coordination with State Exchanges and the State 
                Medicaid agency).
          (2) Title xi provisions.--
                  (A) Section 1115 (relating to waiver 
                authority).
                  (B) Section 1116 (relating to administrative 
                and judicial review), but only insofar as 
                consistent with this title.
                  (C) Section 1124 (relating to disclosure of 
                ownership and related information).
                  (D) Section 1126 (relating to disclosure of 
                information about certain convicted 
                individuals).
                  (E) Section 1128A (relating to civil monetary 
                penalties).
                  (F) Section 1128B(d) (relating to criminal 
                penalties for certain additional charges).
                  (G) Section 1132 (relating to periods within 
                which claims must be filed).
  (f) Limitation of Waiver Authority.--Notwithstanding 
subsection (e)(2)(A) and section 1115(a)(1):
          (1) The Secretary may not approve a waiver, 
        experimental, pilot, or demonstration project that 
        would allow funds made available under this title to be 
        used to provide child health assistance or other health 
        benefits coverage to a nonpregnant childless adult or a 
        parent (as defined in section 2111(c)(2)(A)), who is 
        not pregnant, of a targeted low-income child.
          (2) The Secretary may not approve, extend, renew, or 
        amend a waiver, experimental, pilot, or demonstration 
        project with respect to a State after the date of 
        enactment of the Children's Health Insurance Program 
        Reauthorization Act of 2009 that would waive or modify 
        the requirements of section 2111.
  (g) Use of Blended Risk Pools.--
          (1) In general.--Nothing in this title (or any other 
        provision of Federal law) shall be construed as 
        preventing a State from considering children enrolled 
        in a qualified CHIP look-alike program and children 
        enrolled in a State child health plan under this title 
        (or a waiver of such plan) as members of a single risk 
        pool.
          (2) Qualified chip look-alike program.--In this 
        subsection, the term ``qualified CHIP look-alike 
        program'' means a State program--
                  (A) under which children who are under the 
                age of 19 and are not eligible to receive 
                medical assistance under title XIX or child 
                health assistance under this title may purchase 
                coverage through the State that provides 
                benefits that are at least identical to the 
                benefits provided under the State child health 
                plan under this title (or a waiver of such 
                plan); and
                  (B) that is funded exclusively through non-
                Federal funds, including funds received by the 
                State in the form of premiums for the purchase 
                of such coverage.

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