[United States Statutes at Large, Volume 121, 110th Congress, 1st Session]
[From the U.S. Government Publishing Office, www.gpo.gov]

121 STAT. 2492

Public Law 110-173
110th Congress

An Act


 
To amend titles XVIII, XIX, and XXI of the Social Security Act to extend
provisions under the Medicare, Medicaid, and SCHIP programs, and
for [NOTE: Dec. 29, 2007 -  [S. 2499] other purposes.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress [NOTE: Medicare, Medicaid, and
SCHIP Extension Act of 2007. assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) In [NOTE: 42 USC 1305 note. General.--This Act may be cited
as the ``Medicare, Medicaid, and SCHIP Extension Act of 2007''.

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

Sec. 1. Short title; table of contents.

TITLE I--MEDICARE

Sec. 101. Increase in physician payment update; extension of the
physician quality reporting system.
Sec. 102. Extension of Medicare incentive payment program for physician
scarcity areas.
Sec. 103. Extension of floor on work geographic adjustment under the
Medicare physician fee schedule.
Sec. 104. Extension of treatment of certain physician pathology services
under Medicare.
Sec. 105. Extension of exceptions process for Medicare therapy caps.
Sec. 106. Extension of payment rule for brachytherapy; extension to
therapeutic radiopharmaceuticals.
Sec. 107. Extension of Medicare reasonable costs payments for certain
clinical diagnostic laboratory tests furnished to hospital
patients in certain rural areas.
Sec. 108. Extension of authority of specialized Medicare Advantage plans
for special needs individuals to restrict enrollment.
Sec. 109. Extension of deadline for application of limitation on
extension or renewal of Medicare reasonable cost contract
plans.
Sec. 110. Adjustment to the Medicare Advantage stabilization fund.
Sec. 111. Medicare secondary payor.
Sec. 112. Payment for part B drugs.
Sec. 113. Payment rate for certain diagnostic laboratory tests.
Sec. 114. Long-term care hospitals.
Sec. 115. Payment for inpatient rehabilitation facility (IRF) services.
Sec. 116. Extension of accommodation of physicians ordered to active
duty in the Armed Services.
Sec. 117. Treatment of certain hospitals.
Sec. 118. Additional Funding for State Health Insurance Assistance
Programs, Area Agencies on Aging, and Aging and Disability
Resource Centers.

TITLE II--MEDICAID AND SCHIP

Sec. 201. Extending SCHIP funding through March 31, 2009.
Sec. 202. Extension of transitional medical assistance (TMA) and
abstinence education program.
Sec. 203. Extension of qualifying individual (QI) program.
Sec. 204. Medicaid DSH extension.
Sec. 205. Improving data collection.
Sec. 206. Moratorium on certain payment restrictions.

[[Page 2493]]
121 STAT. 2493

TITLE III--MISCELLANEOUS

Sec. 301. Medicare Payment Advisory Commission status.
Sec. 302. Special Diabetes Programs for Type I Diabetes and Indians.

TITLE I--MEDICARE

SEC. 101. INCREASE IN PHYSICIAN PAYMENT UPDATE; EXTENSION OF THE
PHYSICIAN QUALITY REPORTING SYSTEM.

(a) Increase in Physician Payment Update.--
(1) In general.--Section 1848(d) of the Social Security Act
(42 U.S.C. 1395w-4(d)) is amended--
(A) in paragraph (4)(B), by striking ``and
paragraphs (5) and (6)'' and inserting ``and the
succeeding paragraphs of this subsection''; and
(B) by adding at the end the following new
paragraph:
``(8) Update for a portion of 2008.--
``(A) In general.--Subject to paragraph (7)(B), in
lieu of the update to the single conversion factor
established in paragraph (1)(C) that would otherwise
apply for 2008, for the period beginning on January 1,
2008, and ending on June 30, 2008, the update to the
single conversion factor shall be 0.5 percent.
``(B) No effect on computation of conversion factor
for the remaining portion of 2008 and 2009.--The
conversion factor under this subsection shall be
computed under paragraph (1)(A) for the period beginning
on July 1, 2008, and ending on December 31, 2008, and
for 2009 and subsequent years as if subparagraph (A) had
never applied.''.
(2) Revision of the physician assistance and quality
initiative fund.--
(A) Revision.--Section 1848(l)(2) of the Social
Security Act (42 U.S.C. 1395w-4(l)(2)) is amended--
(i) by striking subparagraph (A) and inserting
the following:
``(A) Amount available.--
``(i) In general.--Subject to clause (ii),
there shall be available to the Fund the following
amounts:
``(I) For expenditures during 2008,
an amount equal to $150,500,000.
``(II) For expenditures during 2009,
an amount equal to $24,500,000.
``(III) For expenditures during
2013, an amount equal to $4,960,000,000.
``(ii) Limitations on expenditures.--
``(I) 2008.--The amount available
for expenditures during 2008 shall be
reduced as provided by subparagraph (A)
of section 225(c)(1) and section 524 of
the Departments of Labor, Health and
Human Services, and Education, and
Related Agencies Appropriations Act,
2008 (division G of the Consolidated
Appropriations Act, 2008).
``(II) 2009.--The amount available
for expenditures during 2009 shall be
reduced as provided by subparagraph (B)
of such section 225(c)(1).
``(III) 2013.--The amount available
for expenditures during 2013 shall only
be available

[[Page 2494]]
121 STAT. 2494

for an adjustment to the update of the
conversion factor under subsection (d)
for that year.''; and
(ii) in subparagraph (B), by striking ``entire
amount specified in the first sentence of
subparagraph (A)'' and all that follows and
inserting the following: ``entire amount available
for expenditures, after application of
subparagraph (A)(ii), during--
``(i) 2008 for payment with respect to
physicians' services furnished during 2008;
``(ii) 2009 for payment with respect to
physicians' services furnished during 2009; and
``(iii) 2013 for payment with respect to
physicians' services furnished during 2013.''.
(B) Effective [NOTE: 42 USC 1395w-4 note. date.--
(i) In general.--Subject to clause (ii), the
amendments made by subparagraph (A) shall take
effect on the date of the enactment of this Act.
(ii) Special rule for coordination with
consolidated appropriations act, 2008.--If the
date of the enactment of the Consolidated
Appropriations Act, 2008, occurs on or after the
date described in clause (i), the amendments made
by subparagraph (A) shall be deemed to be made on
the day after the effective date of sections
225(c)(1) and 524 of the Departments of Labor,
Health and Human Services, and Education, and
Related Agencies Appropriations Act, 2008
(division G of the Consolidated Appropriations
Act, 2008).
(C) Transfer [NOTE: 42 USC 1395w-4 note. of funds
to part b trust fund.--Amounts that would have been
available to the Physician Assistance and Quality
Initiative Fund under section 1848(l)(2) of the Social
Security Act (42 U.S.C. 1395w-4(l)(2)) for payment with
respect to physicians' services furnished prior to
January 1, 2013, but for the amendments made by
subparagraph (A), shall be deposited into, and made
available for expenditures from, the Federal
Supplementary Medical Insurance Trust Fund under section
1841 of such Act (42 U.S.C. 1395t).

(b) Extension of the Physician Quality Reporting System.--
(1) System.--Section 1848(k)(2)(B) of the Social Security
Act (42 U.S.C. 1395w-4(k)(2)(B)) is amended--
(A) in the heading, by inserting ``and 2009'' after
``2008'';
(B) in clause (i), by inserting ``and 2009'' after
``2008''; and
(C) in each of clauses (ii) and (iii)--
(i) by striking ``, 2007'' and inserting ``of
each of 2007 and 2008''; and
(ii) by inserting ``or 2009, as applicable''
after ``2008''.
(2) Reporting.--Section 101(c) of division B of the Tax
Relief and Health Care Act of 2006 (42 U.S.C. 1395w-4 note) is
amended--
(A) in the heading, by inserting ``and 2008'' after
``2007'';
(B) in paragraph (5), by adding at the end the
following:

[[Page 2495]]
121 STAT. 2495

``(F) Extension.--For 2008 and
2009, [NOTE: Criteria. paragraph (3) shall not apply,
and the Secretary shall establish alternative criteria
for satisfactorily reporting under paragraph (2) and
alternative reporting periods under paragraph (6)(C) for
reporting groups of measures under paragraph (2)(B) of
section 1848(k) of the Social Security Act (42 U.S.C.
1395w-4(k)) and for reporting using the method specified
in paragraph (4) of such section.''; and
(C) in paragraph (6), by striking subparagraph (C)
and inserting the following new subparagraph:
``(C) Reporting period.--The term `reporting period'
means--
``(i) for 2007, the period beginning on July
1, 2007, and ending on December 31, 2007; and
``(ii) for 2008, all of 2008.''.

(c) Implementation.--For [NOTE: Appropriation
authorization. purposes of carrying out the provisions of, and
amendments made by subsections (a) and (b), in addition to any amounts
otherwise provided in this title, there are appropriated to the Centers
for Medicare & Medicaid Services Program Management Account, out of any
money in the Treasury not otherwise appropriated, $25,000,000 for the
period of fiscal years 2008 and 2009.
SEC. 102. EXTENSION OF MEDICARE INCENTIVE PAYMENT PROGRAM FOR
PHYSICIAN SCARCITY AREAS.

Section 1833(u) of the Social Security Act (42 U.S.C. 1395l(u)) is
amended--
(1) in paragraph (1), by striking ``before January 1, 2008''
and inserting ``before July 1, 2008''; and
(2) in paragraph (4)--
(A) by redesignating subparagraph (D) as
subparagraph (E); and
(B) by inserting after subparagraph (C) the
following new subparagraph:
``(D) Special rule.--With respect to physicians'
services furnished on or after January 1, 2008, and
before July 1, 2008, for purposes of this subsection,
the Secretary shall use the primary care scarcity
counties and the specialty care scarcity counties (as
identified under the preceding provisions of this
paragraph) that the Secretary was using under this
subsection with respect to physicians' services
furnished on December 31, 2007.''.
SEC. 103. EXTENSION OF FLOOR ON WORK GEOGRAPHIC ADJUSTMENT UNDER
THE MEDICARE PHYSICIAN FEE SCHEDULE.

Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 1395w-
4(e)(1)(E)), as amended by section 102 of division B of the Tax Relief
and Health Care Act of 2006, is amended by striking ``before January 1,
2008'' and inserting ``before July 1, 2008''.
SEC. 104. EXTENSION OF TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY
SERVICES UNDER MEDICARE.

Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (as enacted into law by section
1(a)(6) of Public Law 106-554), as amended by section 732 of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(42 U.S.C. 1395w-4 note) and section 104 of division B of the Tax Relief
and Health Care Act of 2006 (42

[[Page 2496]]
121 STAT. 2496

U.S.C. 1395w-4 note), is amended by striking ``and 2007'' and inserting
``2007, and the first 6 months of 2008''.
SEC. 105. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE THERAPY
CAPS.

Section 1833(g)(5) of the Social Security Act (42 U.S.C.
1395l(g)(5)) is amended by striking ``December 31, 2007'' and inserting
``June 30, 2008''.
SEC. 106. EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY; EXTENSION
TO THERAPEUTIC RADIOPHARMACEUTICALS.

(a) Extension of Payment Rule for Brachytherapy.--Section
1833(t)(16)(C) of the Social Security Act (42 U.S.C. 1395l(t)(16)(C)),
as amended by section 107(a) of division B of the Tax Relief and Health
Care Act of 2006, is amended by striking ``January 1, 2008'' and
inserting ``July 1, 2008''.
(b) Payment for Therapeutic Radiopharmaceuticals.--Section
1833(t)(16)(C) of the Social Security Act (42 U.S.C. 1395l(t)(16)(C)),
as amended by subsection (a), is amended--
(1) in the heading, by inserting ``and therapeutic
radiopharmaceuticals'' before ``at charges'';
(2) in the first sentence--
(A) by inserting ``and for therapeutic
radiopharmaceuticals furnished on or after January 1,
2008, and before July 1, 2008,'' after ``July 1,
2008,'';
(B) by inserting ``or therapeutic
radiopharmaceutical'' after ``the device''; and
(C) by inserting ``or therapeutic
radiopharmaceutical'' after ``each device''; and
(3) in the second sentence, by inserting ``or therapeutic
radiopharmaceuticals'' after ``such devices''.
SEC. 107. [NOTE: 42 USC 1395l note. EXTENSION OF MEDICARE
REASONABLE COSTS PAYMENTS FOR CERTAIN
CLINICAL DIAGNOSTIC LABORATORY TESTS
FURNISHED TO HOSPITAL PATIENTS IN CERTAIN
RURAL AREAS.

Section 416(b) of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (42 U.S.C. 1395l-4), as amended by section 105
of division B of the Tax Relief and Health Care Act of 2006 (42 U.S.C.
1395l note), is amended by striking ``the 3-year period beginning on
July 1, 2004'' and inserting ``the period beginning on July 1, 2004, and
ending on June 30, 2008''.
SEC. 108. EXTENSION OF AUTHORITY OF SPECIALIZED MEDICARE ADVANTAGE
PLANS FOR SPECIAL NEEDS INDIVIDUALS TO
RESTRICT ENROLLMENT.

(a) Extension of Authority To Restrict Enrollment.--Section 1859(f)
of the Social Security Act (42 U.S.C. 1395w-28(f)) is amended by
striking ``2009'' and inserting ``2010''.
(b) [NOTE: 42 USC 1395w-21 note. Moratorium.--
(1) Authority to designate other plans as specialized ma
plans.--During the period beginning on January 1, 2008, and
ending on December 31, 2009, the Secretary of Health and Human
Services shall not exercise the authority provided under section
231(d) of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (42 U.S.C. 1395w-21 note) to designate
other plans as specialized MA plans for special needs
individuals under part C of title XVIII

[[Page 2497]]
121 STAT. 2497

of the Social Security Act. The preceding sentence shall not
apply to plans designated as specialized MA plans for special
needs individuals under such authority prior to January 1, 2008.
(2) Enrollment in new plans.--During the period beginning on
January 1, 2008, and ending on December 31, 2009, the Secretary
of Health and Human Services shall not permit enrollment of any
individual residing in an area in a specialized Medicare
Advantage plan for special needs individuals under part C of
title XVIII of the Social Security Act to take effect unless
that specialized Medicare Advantage plan for special needs
individuals was available for enrollment for individuals
residing in that area on January 1, 2008.
SEC. 109. EXTENSION OF DEADLINE FOR APPLICATION OF LIMITATION ON
EXTENSION OR RENEWAL OF MEDICARE
REASONABLE COST CONTRACT PLANS.

Section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C.
1395mm(h)(5)(C)(ii)), in the matter preceding subclause (I), is amended
by striking ``January 1, 2008'' and inserting ``January 1, 2009''.
SEC. 110. ADJUSTMENT TO THE MEDICARE ADVANTAGE STABILIZATION FUND.

Section 1858(e)(2)(A)(i) of the Social Security Act (42 U.S.C.
1395w-27a(e)(2)(A)(i)), as amended by section 3 of Public Law 110-48, is
amended by striking ``the Fund'' and all that follows and inserting
``the Fund during 2013, $1,790,000,000.''
SEC. 111. MEDICARE SECONDARY PAYOR.

(a) In General.--Section 1862(b) of the Social Security Act (42
U.S.C. 1395y(b)) is amended by adding at the end the following new
paragraphs:
``(7) Required submission of information by group health
plans.--
``(A) Requirement.--On and after the first day of
the first calendar quarter beginning after the date that
is 1 year after the date of the enactment of this
paragraph, an entity serving as an insurer or third
party administrator for a group health plan, as defined
in paragraph (1)(A)(v), and, in the case of a group
health plan that is self-insured and self-administered,
a plan administrator or fiduciary, shall--
``(i) secure from the plan sponsor and plan
participants such information as the Secretary
shall specify for the purpose of identifying
situations where the group health plan is or has
been a primary plan to the program under this
title; and
``(ii) submit such information to the
Secretary in a form and manner (including
frequency) specified by the Secretary.
``(B) Enforcement.--
``(i) In [NOTE: Penalties. general.--An
entity, a plan administrator, or a fiduciary
described in subparagraph (A) that fails to comply
with the requirements under such subparagraph
shall be subject to a civil money penalty of

[[Page 2498]]
121 STAT. 2498

$1,000 for each day of noncompliance for each
individual for which the information under such
subparagraph should have been
submitted. [NOTE: Applicability. The provisions
of subsections (e) and (k) of section 1128A shall
apply to a civil money penalty under the previous
sentence in the same manner as such provisions
apply to a penalty or proceeding under section
1128A(a). A civil money penalty under this clause
shall be in addition to any other penalties
prescribed by law and in addition to any Medicare
secondary payer claim under this title with
respect to an individual.
``(ii) Deposit of amounts collected.--Any
amounts collected pursuant to clause (i) shall be
deposited in the Federal Hospital Insurance Trust
Fund under section 1817.
``(C) Sharing of information.--Notwithstanding any
other provision of law, under terms and conditions
established by the Secretary, the Secretary--
``(i) shall share information on entitlement
under Part A and enrollment under Part B under
this title with entities, plan administrators, and
fiduciaries described in subparagraph (A);
``(ii) may share the entitlement and
enrollment information described in clause (i)
with entities and persons not described in such
clause; and
``(iii) may share information collected under
this paragraph as necessary for purposes of the
proper coordination of benefits.
``(D) Implementation.--Notwithstanding any other
provision of law, the Secretary may implement this
paragraph by program instruction or otherwise.
``(8) Required submission of information by or on behalf of
liability insurance (including self-insurance), no fault
insurance, and workers' compensation laws and plans.--
``(A) Requirement.--On and after the first day of
the first calendar quarter beginning after the date that
is 18 months after the date of the enactment of this
paragraph, an applicable plan shall--
``(i) determine whether a claimant (including
an individual whose claim is unresolved) is
entitled to benefits under the program under this
title on any basis; and
``(ii) if the claimant is determined to be so
entitled, submit the information described in
subparagraph (B) with respect to the claimant to
the Secretary in a form and manner (including
frequency) specified by the Secretary.
``(B) Required information.--The information
described in this subparagraph is--
``(i) the identity of the claimant for which
the determination under subparagraph (A) was made;
and
``(ii) such other information as the Secretary
shall specify in order to enable the Secretary to
make an appropriate determination concerning
coordination of benefits, including any applicable
recovery claim.

[[Page 2499]]
121 STAT. 2499

``(C) Timing.--Information shall be submitted under
subparagraph (A)(ii) within a time specified by the
Secretary after the claim is resolved through a
settlement, judgment, award, or other payment
(regardless of whether or not there is a determination
or admission of liability).
``(D) Claimant.--For purposes of subparagraph (A),
the term `claimant' includes--
``(i) an individual filing a claim directly
against the applicable plan; and
``(ii) an individual filing a claim against an
individual or entity insured or covered by the
applicable plan.
``(E) Enforcement.--
``(i) In [NOTE: Penalties. general.--An
applicable plan that fails to comply with the
requirements under subparagraph (A) with respect
to any claimant shall be subject to a civil money
penalty of $1,000 for each day of noncompliance
with respect to each
claimant. [NOTE: Applicability. The provisions
of subsections (e) and (k) of section 1128A shall
apply to a civil money penalty under the previous
sentence in the same manner as such provisions
apply to a penalty or proceeding under section
1128A(a). A civil money penalty under this clause
shall be in addition to any other penalties
prescribed by law and in addition to any Medicare
secondary payer claim under this title with
respect to an individual.
``(ii) Deposit of amounts collected.--Any
amounts collected pursuant to clause (i) shall be
deposited in the Federal Hospital Insurance Trust
Fund.
``(F) Applicable plan.--In this paragraph, the term
`applicable plan' means the following laws, plans, or
other arrangements, including the fiduciary or
administrator for such law, plan, or arrangement:
``(i) Liability insurance (including self-
insurance).
``(ii) No fault insurance.
``(iii) Workers' compensation laws or plans.
``(G) Sharing of information.--The Secretary may
share information collected under this paragraph as
necessary for purposes of the proper coordination of
benefits.
``(H) Implementation.--Notwithstanding any other
provision of law, the Secretary may implement this
paragraph by program instruction or otherwise.''.

(b) Rule of [NOTE: 42 USC 1395y note. Construction.--Nothing in
the amendments made by this section shall be construed to limit the
authority of the Secretary of Health and Human Services to collect
information to carry out Medicare secondary payer provisions under title
XVIII of the Social Security Act, including under parts C and D of such
title.

(c) Implementation.--For [NOTE: Appropriation
authorization. purposes of implementing paragraphs (7) and (8) of
section 1862(b) of the Social Security Act, as added by subsection (a),
to ensure appropriate payments under title XVIII of such Act, the
Secretary of Health and Human Services shall provide for the transfer,
from the Federal Hospital Insurance Trust Fund established under section
1817 of the Social Security Act (42 U.S.C. 1395i) and the Federal
Supplementary Medical Insurance Trust Fund established under section
1841 of such Act (42 U.S.C. 1395t), in such proportions as the Secretary
determines

[[Page 2500]]
121 STAT. 2500

appropriate, of $35,000,000 to the Centers for Medicare & Medicaid
Services Program Management Account for the period of fiscal years 2008,
2009, and 2010.
SEC. 112. PAYMENT FOR PART B DRUGS.

(a) Application of Alternative Volume Weighting in Computation of
ASP.--Section 1847A(b) of the Social Security Act (42 U.S.C. 1395w-
3a(b)) is amended--
(1) in paragraph (1)(A), by inserting ``for a multiple
source drug furnished before April 1, 2008, or 106 percent of
the amount determined under paragraph (6) for a multiple source
drug furnished on or after April 1, 2008'' after ``paragraph
(3)'';
(2) in each of subparagraphs (A) and (B) of paragraph (4),
by inserting ``for single source drugs and biologicals furnished
before April 1, 2008, and using the methodology applied under
paragraph (6) for single source drugs and biologicals furnished
on or after April 1, 2008,'' after ``paragraph (3)''; and
(3) by adding at the end the following new paragraph:
``(6) Use of volume-weighted average sales prices in
calculation of average sales price.--
``(A) In general.--For all drug products included
within the same multiple source drug billing and payment
code, the amount specified in this paragraph is the
volume-weighted average of the average sales prices
reported under section 1927(b)(3)(A)(iii) determined
by--
``(i) computing the sum of the products (for
each National Drug Code assigned to such drug
products) of--
``(I) the manufacturer's average
sales price (as defined in subsection
(c)), determined by the Secretary
without dividing such price by the total
number of billing units for the National
Drug Code for the billing and payment
code; and
``(II) the total number of units
specified under paragraph (2) sold; and
``(ii) dividing the sum determined under
clause (i) by the sum of the products (for each
National Drug Code assigned to such drug products)
of--
``(I) the total number of units
specified under paragraph (2) sold; and
``(II) the total number of billing
units for the National Drug Code for the
billing and payment code.
``(B) Billing unit defined.--For purposes of this
subsection, the term `billing unit' means the
identifiable quantity associated with a billing and
payment code, as established by the Secretary.''.

(b) Treatment of Certain Drugs.--Section 1847A(b) of the Social
Security Act (42 U.S.C. 1395w-3a(b)), as amended by subsection (a), is
amended--
(1) in paragraph (1), by inserting ``paragraph (7) and''
after ``Subject to''; and
(2) by adding at the end the following new paragraph:
``(7) Special [NOTE: Effective date. rule.--Beginning
with April 1, 2008, the payment amount for--

[[Page 2501]]
121 STAT. 2501

``(A) each single source drug or biological
described in section 1842(o)(1)(G) that is treated as a
multiple source drug because of the application of
subsection (c)(6)(C)(ii) is the lower of--
``(i) the payment amount that would be
determined for such drug or biological applying
such subsection; or
``(ii) the payment amount that would have been
determined for such drug or biological if such
subsection were not applied; and
``(B) a multiple source drug described in section
1842(o)(1)(G) (excluding a drug or biological that is
treated as a multiple source drug because of the
application of such subsection) is the lower of--
``(i) the payment amount that would be
determined for such drug or biological taking into
account the application of such subsection; or
``(ii) the payment amount that would have been
determined for such drug or biological if such
subsection were not applied.''.
SEC. 113. PAYMENT RATE FOR CERTAIN DIAGNOSTIC LABORATORY TESTS.

Section 1833(h) of the Social Security Act (42 U.S.C. 1395l(h)) is
amended by adding at the end the following new paragraph:
``(9) Notwithstanding any other provision in this part, in the case
of any diagnostic laboratory test for HbA1c that is labeled by the Food
and Drug Administration for home use and is furnished on or after April
1, 2008, the payment rate for such test shall be the payment rate
established under this part for a glycated hemoglobin test (identified
as of October 1, 2007, by HCPCS code 83036 (and any succeeding
codes)).''.
SEC. 114. LONG-TERM CARE HOSPITALS.

(a) Definition of Long-Term Care Hospital.--Section 1861 of the
Social Security Act (42 U.S.C. 1395x) is amended by adding at the end
the following new subsection:

``Long-Term Care Hospital

``(ccc) The term `long-term care hospital' means a hospital which--
``(1) is primarily engaged in providing inpatient services,
by or under the supervision of a physician, to Medicare
beneficiaries whose medically complex conditions require a long
hospital stay and programs of care provided by a long-term care
hospital;
``(2) has an average inpatient length of stay (as determined
by the Secretary) of greater than 25 days, or meets the
requirements of clause (II) of section 1886(d)(1)(B)(iv);
``(3) satisfies the requirements of subsection (e); and
``(4) meets the following facility criteria:
``(A) the institution has a patient review process,
documented in the patient medical record, that screens
patients prior to admission for appropriateness of
admission to a long-term care hospital, validates within
48 hours of admission that patients meet admission
criteria for long-term care hospitals, regularly
evaluates patients throughout

[[Page 2502]]
121 STAT. 2502

their stay for continuation of care in a long-term care
hospital, and assesses the available discharge options
when patients no longer meet such continued stay
criteria;
``(B) the institution has active physician
involvement with patients during their treatment through
an organized medical staff, physician-directed treatment
with physician on-site availability on a daily basis to
review patient progress, and consulting physicians on
call and capable of being at the patient's side within a
moderate period of time, as determined by the Secretary;
and
``(C) the institution has interdisciplinary team
treatment for patients, requiring interdisciplinary
teams of health care professionals, including
physicians, to prepare and carry out an individualized
treatment plan for each patient.''.

(b) Study and Report on Long-Term Care Hospital Facility and Patient
Criteria.--
(1) In general.--The Secretary of Health and Human Services
(in this section referred to as the ``Secretary'') shall conduct
a study on the establishment of national long-term care hospital
facility and patient criteria for purposes of determining
medical necessity, appropriateness of admission, and continued
stay at, and discharge from, long-term care hospitals.
(2) Report.--Not later than 18 months after the date of the
enactment of this Act, the Secretary shall submit to Congress a
report on the study conducted under paragraph (1), together with
recommendations for such legislation and administrative actions,
including timelines for implementation of patient criteria or
other actions, as the Secretary determines appropriate.
(3) Considerations.--In conducting the study and preparing
the report under this subsection, the Secretary shall consider--
(A) recommendations contained in a report to
Congress by the Medicare Payment Advisory Commission in
June 2004 for long-term care hospital-specific facility
and patient criteria to ensure that patients admitted to
long-term care hospitals are medically complex and
appropriate to receive long-term care hospital services;
and
(B) ongoing work by the Secretary to evaluate and
determine the feasibility of such recommendations.

(c) Payment for [NOTE: 42 USC 1395ww note. Long-Term Care
Hospital Services.--
(1) No application of 25 percent patient threshold payment
adjustment to freestanding and grandfathered ltchs.--The
Secretary shall not apply, for cost reporting periods beginning
on or after the date of the enactment of this Act for a 3-year
period--
(A) section 412.536 of title 42, Code of Federal
Regulations, or any similar provision, to freestanding
long-term care hospitals; and
(B) such section or section 412.534 of title 42,
Code of Federal Regulations, or any similar provisions,
to a long-term care hospital identified by the amendment
made by section 4417(a) of the Balanced Budget Act of
1997 (Public Law 105-33).
(2) Payment for hospitals-within-hospitals.--

[[Page 2503]]
121 STAT. 2503

(A) In general.--Payment to an applicable long-term
care hospital or satellite facility which is located in
a rural area or which is co-located with an urban single
or MSA dominant hospital under paragraphs (d)(1),
(e)(1), and (e)(4) of section 412.534 of title 42, Code
of Federal Regulations, shall not be subject to any
payment adjustment under such section if no more than 75
percent of the hospital's Medicare discharges (other
than discharges described in paragraph (d)(2) or (e)(3)
of such section) are admitted from a co-located
hospital.
(B) Co-located long-term care hospitals and
satellite facilities.--
(i) In general.--Payment to an applicable
long-term care hospital or satellite facility
which is co-located with another hospital shall
not be subject to any payment adjustment under
section 412.534 of title 42, Code of Federal
Regulations, if no more than 50 percent of the
hospital's Medicare discharges (other than
discharges described in paragraph (c)(3) of such
section) are admitted from a co-located hospital.
(ii) Applicable long-term care hospital or
satellite facility defined.--In this paragraph,
the term ``applicable long-term care hospital or
satellite facility'' means a hospital or satellite
facility that is subject to the transition rules
under section 412.534(g) of title 42, Code of
Federal Regulations.
(C) Effective date.--Subparagraphs (A) and (B) shall
apply to cost reporting periods beginning on or after
the date of the enactment of this Act for a 3-year
period.
(3) No application of very short-stay outlier policy.--The
Secretary shall not apply, for the 3-year period beginning on
the date of the enactment of this Act, the amendments finalized
on May 11, 2007 (72 Federal Register 26904, 26992) made to the
short-stay outlier payment provision for long-term care
hospitals contained in section 412.529(c)(3)(i) of title 42,
Code of Federal Regulations, or any similar provision.
(4) No application of one-time adjustment to standard
amount.--The Secretary shall not, for the 3-year period
beginning on the date of the enactment of this Act, make the
one-time prospective adjustment to long-term care hospital
prospective payment rates provided for in section 412.523(d)(3)
of title 42, Code of Federal Regulations, or any similar
provision.

(d) Moratorium [NOTE: 42 USC 1395ww note. on the Establishment of
Long-Term Care Hospitals, Long-Term Care Satellite Facilities and on the
Increase of Long-Term Care Hospital Beds in Existing Long-Term Care
Hospitals or Satellite Facilities.--
(1) In general.--During the 3-year period beginning on the
date of the enactment of this Act, the Secretary shall impose a
moratorium for purposes of the Medicare program under title
XVIII of the Social Security Act--
(A) subject to paragraph (2), on the establishment
and classification of a long-term care hospital or
satellite facility, other than an existing long-term
care hospital or facility; and
(B) subject to paragraph (3), on an increase of
long-term care hospital beds in existing long-term care
hospitals or satellite facilities.

[[Page 2504]]
121 STAT. 2504

(2) Exception for certain long-term care hospitals.--The
moratorium under paragraph (1)(A) shall not apply to a long-term
care hospital that as of the date of the enactment of this Act--
(A) began its qualifying period for payment as a
long-term care hospital under section 412.23(e) of title
42, Code of Federal Regulations, on or before the date
of the enactment of this Act;
(B) has a binding written agreement with an outside,
unrelated party for the actual construction, renovation,
lease, or demolition for a long-term care hospital, and
has expended, before the date of the enactment of this
Act, at least 10 percent of the estimated cost of the
project (or, if less, $2,500,000); or
(C) has obtained an approved certificate of need in
a State where one is required on or before the date of
the enactment of this Act.
(3) Exception for bed increases during moratorium.--
(A) In general.--Subject to subparagraph (B), the
moratorium under paragraph (1)(B) shall not apply to an
increase in beds in an existing hospital or satellite
facility if the hospital or facility--
(i) is located in a State where there is only
one other long-term care hospital; and
(ii) requests an increase in beds following
the closure or the decrease in the number of beds
of another long-term care hospital in the State.
(B) No effect on certain limitation.--The exception
under subparagraph (A) shall not effect the limitation
on increasing beds under sections 412.22(h)(3) and
412.22(f) of title 42, Code of Federal Regulations.
(4) Existing hospital or satellite facility defined.--For
purposes of this subsection, the term ``existing'' means, with
respect to a hospital or satellite facility, a hospital or
satellite facility that received payment under the provisions of
subpart O of part 412 of title 42, Code of Federal Regulations,
as of the date of the enactment of this Act.
(5) Judicial review.--There shall be no administrative or
judicial review under section 1869 of the Social Security Act
(42 U.S.C. 1395ff), section 1878 of such Act (42 U.S.C. 1395oo),
or otherwise, of the application of this subsection by the
Secretary.

(e) Long-Term Care Hospital Payment Update.--
(1) In general.--Section 1886 of the Social Security Act (42
U.S.C. 1395ww) is amended by adding at the end the following new
subsection:

``(m) Prospective Payment for Long-Term Care Hospitals.--
``(1) Reference to establishment and implementation of
system.--For provisions related to the establishment and
implementation of a prospective payment system for payments
under this title for inpatient hospital services furnished by a
long-term care hospital described in subsection (d)(1)(B)(iv),
see section 123 of the Medicare, Medicaid, and SCHIP Balanced
Budget Refinement Act of 1999 and section 307(b) of the
Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000.

[[Page 2505]]
121 STAT. 2505

``(2) Update for rate year 2008.--In implementing the system
described in paragraph (1) for discharges occurring during the
rate year ending in 2008 for a hospital, the base rate for such
discharges for the hospital shall be the same as the base rate
for discharges for the hospital occurring during the rate year
ending in 2007.''.
(2) Delayed [NOTE: 42 USC 1395ww note. effective date.--
Subsection (m)(2) of section 1886 of the Social Security Act, as
added by paragraph (1), shall not apply to discharges occurring
on or after July 1, 2007, and before April 1, 2008.

(f) Expanded [NOTE: 42 USC 1395ww note. Review of Medical
Necessity.--
(1) In [NOTE: Contracts. general.--The Secretary of
Health and Human Services shall provide, under contracts with
one or more appropriate fiscal intermediaries or medicare
administrative contractors under section 1874A(a)(4)(G) of the
Social Security Act (42 U.S.C. 1395kk-1(a)(4)(G)), for reviews
of the medical necessity of admissions to long-term care
hospitals (described in section 1886(d)(1)(B)(iv) of such Act)
and continued stay at such hospitals, of individuals entitled
to, or enrolled for, benefits under part A of title XVIII of
such Act consistent with this subsection. Such reviews shall be
made for discharges occurring on or after October 1, 2007.
(2) Review methodology.--The medical necessity reviews under
paragraph (1) shall be conducted on an annual basis in
accordance with rules specified by the Secretary. Such reviews
shall--
(A) provide for a statistically valid and
representative sample of admissions of such individuals
sufficient to provide results at a 95 percent confidence
interval; and
(B) guarantee that at least 75 percent of
overpayments received by long-term care hospitals for
medically unnecessary admissions and continued stays of
individuals in long-term care hospitals will be
identified and recovered and that related days of care
will not be counted toward the length of stay
requirement contained in section 1886(d)(1)(B)(iv) of
the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)(iv)).
(3) Continuation of [NOTE: Contracts. reviews.--Under
contracts under this subsection, the Secretary shall establish
an error rate with respect to such reviews that could require
further review of the medical necessity of admissions and
continued stay in the hospital involved and other actions as
determined by the Secretary.
(4) Termination of required reviews.--
(A) In general.--Subject to subparagraph (B), the
previous provisions of this subsection shall cease to
apply for discharges occurring on or after October 1,
2010.
(B) Continuation.--As of the date specified in
subparagraph (A), the Secretary shall determine whether
to continue to guarantee, through continued medical
review and sampling under this paragraph, recovery of at
least 75 percent of overpayments received by long-term
care hospitals due to medically unnecessary admissions
and continued stays.
(5) Funding.--The costs to fiscal intermediaries or medicare
administrative contractors conducting the medical necessity
reviews under paragraph (1) shall be funded from the

[[Page 2506]]
121 STAT. 2506

aggregate overpayments recouped by the Secretary of Health and
Human Services from long-term care hospitals due to medically
unnecessary admissions and continued stays. The Secretary may
use an amount not in excess of 40 percent of the overpayments
recouped under this paragraph to compensate the fiscal
intermediaries or Medicare administrative contractors for the
costs of services performed.

(g) Implementation.--For [NOTE: Appropriation
authorization. purposes of carrying out the provisions of, and
amendments made by, this title, in addition to any amounts otherwise
provided in this title, there are appropriated to the Centers for
Medicare & Medicaid Services Program Management Account, out of any
money in the Treasury not otherwise appropriated, $35,000,000 for the
period of fiscal years 2008 and 2009.
SEC. 115. PAYMENT FOR INPATIENT REHABILITATION FACILITY (IRF)
SERVICES.

(a) Payment Update.--
(1) In general.--Section 1886(j)(3)(C) of the Social
Security Act (42 U.S.C. 1395ww(j)(3)(C)) is amended by adding at
the end the following: ``The increase factor to be applied under
this subparagraph for each of fiscal years 2008 and 2009 shall
be 0 percent.''.
(2) Delayed [NOTE: 42 USC 1395ww note. effective date.--
The amendment made by paragraph (1) shall not apply to payment
units occurring before April 1, 2008.

(b) Inpatient Rehabilitation Facility Classification Criteria.--
(1) In general.--Section 5005 of the Deficit Reduction Act
of 2005 (Public Law 109-171; 42 U.S.C. 1395ww note) is amended--
(A) in subsection (a), by striking ``apply the
applicable percent specified in subsection (b)'' and
inserting ``require a compliance rate that is no greater
than the 60 percent compliance rate that became
effective for cost reporting periods beginning on or
after July 1, 2006,''; and
(B) by amending subsection (b) to read as follows:

``(b) Continued Use of Comorbidities.--For cost reporting periods
beginning on or after July 1, 2007, the Secretary shall include patients
with comorbidities as described in section 412.23(b)(2)(i) of title 42,
Code of Federal Regulations (as in effect as of January 1, 2007), in the
inpatient population that counts toward the percent specified in
subsection (a).''.
(2) Effective [NOTE: 42 USC 1395ww note. date.--The
amendment made by paragraph (1)(A) shall apply for cost
reporting periods beginning on or after July 1, 2007.

(c) Recommendations for Classifying Inpatient Rehabilitation
Hospitals and Units.--
(1) Report to congress.--Not later than 18 months after the
date of the enactment of this Act, the Secretary of Health and
Human Services, in consultation with physicians (including
geriatricians and physiatrists), administrators of inpatient
rehabilitation, acute care hospitals, skilled nursing
facilities, and other settings providing rehabilitation
services, Medicare beneficiaries, trade organizations
representing inpatient rehabilitation hospitals and units and
skilled nursing facilities, and the Medicare Payment Advisory
Commission, shall submit

[[Page 2507]]
121 STAT. 2507

to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate a
report that includes the following:
(A) An analysis of Medicare beneficiaries' access to
medically necessary rehabilitation services, including
the potential effect of the 75 percent rule (as defined
in paragraph (2)) on access to care.
(B) An analysis of alternatives or refinements to
the 75 percent rule policy for determining criteria for
inpatient rehabilitation hospital and unit designation
under the Medicare program, including alternative
criteria which would consider a patient's functional
status, diagnosis, co-morbidities, and other relevant
factors.
(C) An analysis of the conditions for which
individuals are commonly admitted to inpatient
rehabilitation hospitals that are not included as a
condition described in section 412.23(b)(2)(iii) of
title 42, Code of Federal Regulations, to determine the
appropriate setting of care, and any variation in
patient outcomes and costs, across settings of care, for
treatment of such conditions.
(2) 75 percent rule defined.--For purposes of this
subsection, the term ``75 percent rule'' means the requirement
of section 412.23(b)(2) of title 42, Code of Federal
Regulations, that 75 percent of the patients of a rehabilitation
hospital or converted rehabilitation unit are in 1 or more of 13
listed treatment categories.
SEC. 116. EXTENSION OF ACCOMMODATION OF PHYSICIANS ORDERED TO
ACTIVE DUTY IN THE ARMED SERVICES.

Section 1842(b)(6)(D)(iii) of the Social Security Act (42 U.S.C.
1395u(b)(6)(D)(iii)), as amended by Public Law 110-54 (121 Stat. 551) is
amended by striking ``January 1, 2008'' and inserting ``July 1, 2008''.
SEC. 117. TREATMENT OF CERTAIN HOSPITALS.

(a) Extending [NOTE: 42 USC 1395ww note. Certain Medicare
Hospital Wage Index Reclassifications Through Fiscal Year 2008.--
(1) In general.--Section 106(a) of division B of the Tax
Relief and Health [NOTE: 42 USC 1395ww note. Care Act of 2006
(42 U.S.C. 1395 note) is amended by striking ``September 30,
2007'' and inserting ``September 30, 2008''.
(2) Special exception reclassifications.--The Secretary of
Health and Human Services shall extend for discharges occurring
through September 30, 2008, the special exception
reclassifications made under the authority of section
1886(d)(5)(I)(i) of the Social Security Act (42 U.S.C.
1395ww(d)(5)(I)(i)) and contained in the final rule promulgated
by the Secretary in the Federal Register on August 11, 2004 (69
Fed. Reg. 49105, 49107).
(3) Use of particular wage index.--For purposes of
implementation of this subsection, the Secretary shall use the
hospital wage index that was promulgated by the Secretary in the
Federal Register on October 10, 2007 (72 Fed. Reg. 57634), and
any subsequent corrections.

(b) Disregarding Section 508 Hospital Reclassifications for Purposes
of Group Reclassifications.--Section 508 of the Medicare Prescription
Drug, Improvement, and Modernization Act

[[Page 2508]]
121 STAT. 2508

of 2003 (Public Law 108-173, 42 U.S.C. 1395ww note) is amended by adding
at the end the following new subsection:
``(g) Disregarding Hospital Reclassifications for Purposes of Group
Reclassifications.--For purposes of the reclassification of a group of
hospitals in a geographic area under section 1886(d) of the Social
Security Act for purposes of discharges occurring during fiscal year
2008, a hospital reclassified under this section (including any such
reclassification which is extended under section 106(a) of the Medicare
Improvements and Extension Act of 2006) shall not be taken into account
and shall not prevent the other hospitals in such area from continuing
such a group for such purpose.''.
(c) Correction of [NOTE: 42 USC 1395ww note. Application of Wage
Index During Tax Relief and Health Care Act Extension.--In the case of a
subsection (d) hospital (as defined for purposes of section 1886 of the
Social Security Act (42 U.S.C. 1395ww)) with respect to which--
(1) a reclassification of its wage index for purposes of
such section was extended for the period beginning on April 1,
2007, and ending on September 30, 2007, pursuant to subsection
(a) of section 106 of division B of the Tax Relief and Health
Care Act of 2006 (42 U.S.C. 1395 note); and
(2) the wage index applicable for such hospital during such
period was lower than the wage index applicable for such
hospital during the period beginning on October 1, 2006, and
ending on March 31, 2007,

the Secretary shall apply the higher wage index that was applicable for
such hospital during the period beginning on October 1, 2006, and ending
on March 31, 2007, for the entire fiscal year 2007. If
the [NOTE: Deadline. Secretary determines that the application of the
preceding sentence to a hospital will result in a hospital being owed
additional reimbursement, the Secretary shall make such payments within
90 days after the settlement of the applicable cost report.
SEC. 118. [NOTE: Grants. ADDITIONAL FUNDING FOR STATE HEALTH
INSURANCE ASSISTANCE PROGRAMS, AREA
AGENCIES ON AGING, AND AGING AND
DISABILITY RESOURCE CENTERS.

(a) State Health Insurance Assistance Programs.--
(1) In general.--The Secretary of Health and Human Services
shall use amounts made available under paragraph (2) to make
grants to States for State health insurance assistance programs
receiving assistance under section 4360 of the Omnibus Budget
Reconciliation Act of 1990.
(2) Funding.--For purposes of making grants under this
subsection, the Secretary shall provide for the transfer, from
the Federal Hospital Insurance Trust Fund under section 1817 of
the Social Security Act (42 U.S.C. 1395i) and the Federal
Supplementary Medical Insurance Trust Fund under section 1841 of
such Act (42 U.S.C. 1395t), in the same proportion as the
Secretary determines under section 1853(f) of such Act (42
U.S.C. 1395w-23(f)), of $15,000,000 to the Centers for Medicare
& Medicaid Services Program Management Account for fiscal year
2008.

(b) Area Agencies on Aging and Aging and Disability Resource
Centers.--
(1) In general.--The Secretary of Health and Human Services
shall use amounts made available under paragraph (2) to make
grants--

[[Page 2509]]
121 STAT. 2509

(A) to States for area agencies on aging (as defined
in section 102 of the Older Americans Act of 1965 (42
U.S.C. 3002)); and
(B) to Aging and Disability Resource Centers under
the Aging and Disability Resource Center grant program.
(2) Funding.--For purposes of making grants under this
subsection, the Secretary shall provide for the transfer, from
the Federal Hospital Insurance Trust Fund under section 1817 of
the Social Security Act (42 U.S.C. 1395i) and the Federal
Supplementary Medical Insurance Trust Fund under section 1841 of
such Act (42 U.S.C. 1395t), in the same proportion as the
Secretary determines under section 1853(f) of such Act (42
U.S.C. 1395w-23(f)), of $5,000,000 to the Centers for Medicare &
Medicaid Services Program Management Account for the period of
fiscal years 2008 through 2009.

TITLE II--MEDICAID AND SCHIP

SEC. 201. EXTENDING SCHIP FUNDING THROUGH MARCH 31, 2009.

(a) Through the Second Quarter of Fiscal Year 2009.--
(1) In general.--Section 2104 of the Social Security Act (42
U.S.C. 1397dd) is amended--
(A) in subsection (a)--
(i) by striking ``and'' at the end of
paragraph (9);
(ii) by striking the period at the end of
paragraph (10) and inserting ``; and''; and
(iii) by adding at the end the following new
paragraph:
``(11) for each of fiscal years 2008 and 2009,
$5,000,000,000.''; and
(B) in subsection (c)(4)(B), by striking ``for
fiscal year 2007'' and inserting ``for each of fiscal
years 2007 through 2009''.
(2) Availability of extended funding.--Funds made available
from any allotment made from funds appropriated under subsection
(a)(11) or (c)(4)(B) of section 2104 of the Social Security Act
(42 U.S.C. 1397dd) for fiscal year 2008 or 2009 shall not be
available for child health assistance for items and services
furnished after March 31, 2009, or, if earlier, the date of the
enactment of an Act that provides funding for fiscal years 2008
and 2009, and for one or more subsequent fiscal years for the
State Children's Health Insurance Program under title XXI of the
Social Security Act.
(3) End of funding under continuing resolution.--Section
136(a)(2) of Public Law 110-92 is [NOTE: Ante, p.
994. amended by striking ``after the termination date'' and
all that follows and inserting ``after the date of the enactment
of the Medicare, Medicaid, and SCHIP Extension Act of 2007.''.
(4) Clarification of application of funding under continuing
resolution.--Section 107 of Public Law 110-92 shall apply with
respect to expenditures made pursuant to section 136(a)(1) of
such Public Law.

(b) Extension of Treatment of Qualifying States; Rules on
Redistribution of Unspent Fiscal Year 2005 Allotments Made Permanent.--

[[Page 2510]]
121 STAT. 2510

(1) In general.--Section 2105(g)(1)(A) of the Social
Security Act (42 U.S.C. 1397ee(g)(1)(A)), as amended by
subsection (d) of section 136 of Public Law 110-92, is amended
by striking ``or 2008'' and inserting ``2008, or 2009''.
(2) Applicability.--The [NOTE: 42 USC 1397ee
note. amendment made by paragraph (1) shall be in effect
through March 31, 2009.
(3) Certain rules made permanent.--Subsection (e) of section
136 of Public [NOTE: Ante, p. 994. Law 110-92 is repealed.

(c) Additional Allotments To Eliminate Remaining Funding Shortfalls
Through March 31, 2009.--
(1) In general.--Section 2104 of the Social Security Act (42
U.S.C. 1397dd) is amended by adding at the end the following new
subsections:

``(j) Additional Allotments To Eliminate Funding Shortfalls for
Fiscal Year 2008.--
``(1) Appropriation; allotment authority.--For the purpose
of providing additional allotments described in subparagraphs
(A) and (B) of paragraph (3), there is appropriated, out of any
money in the Treasury not otherwise appropriated, such sums as
may be necessary, not to exceed $1,600,000,000 for fiscal year
2008.
``(2) Shortfall states described.--For purposes of paragraph
(3), a shortfall State described in this paragraph is a State
with a State child health plan approved under this title for
which the Secretary estimates, on the basis of the most recent
data available to the Secretary as of November 30, 2007, that
the Federal share amount of the projected expenditures under
such plan for such State for fiscal year 2008 will exceed the
sum of--
``(A) the amount of the State's allotments for each
of fiscal years 2006 and 2007 that will not be expended
by the end of fiscal year 2007;
``(B) the amount, if any, that is to be
redistributed to the State during fiscal year 2008 in
accordance with subsection (i); and
``(C) the amount of the State's allotment for fiscal
year 2008.
``(3) Allotments.--In addition to the allotments provided
under subsections (b) and (c), subject to paragraph (4), of the
amount available for the additional allotments under paragraph
(1) for fiscal year 2008, the Secretary shall allot--
``(A) to each shortfall State described in paragraph
(2) not described in subparagraph (B), such amount as
the Secretary determines will eliminate the estimated
shortfall described in such paragraph for the State; and
``(B) to each commonwealth or territory described in
subsection (c)(3), an amount equal to the percentage
specified in subsection (c)(2) for the commonwealth or
territory multiplied by 1.05 percent of the sum of the
amounts determined for each shortfall State under
subparagraph (A).
``(4) Proration rule.--If the amounts available for
additional allotments under paragraph (1) are less than the
total of the amounts determined under subparagraphs (A) and (B)
of paragraph (3), the amounts computed under such subparagraphs
shall be reduced proportionally.

[[Page 2511]]
121 STAT. 2511

``(5) Retrospective adjustment.--The Secretary may adjust
the estimates and determinations made to carry out this
subsection as necessary on the basis of the amounts reported by
States not later than November 30, 2008, on CMS Form 64 or CMS
Form 21, as the case may be, and as approved by the Secretary.
``(6) One-year availability; no redistribution of unexpended
additional allotments.--Notwithstanding subsections (e) and (f),
amounts allotted to a State pursuant to this subsection for
fiscal year 2008, subject to paragraph (5), shall only remain
available for expenditure by the State through September 30,
2008. Any amounts of such allotments that remain unexpended as
of such date shall not be subject to redistribution under
subsection (f).

``(k) Redistribution of Unused Fiscal Year 2006 Allotments to States
With Estimated Funding Shortfalls During the First 2 Quarters of Fiscal
Year 2009.--
``(1) In general.--Notwithstanding subsection (f) and
subject to paragraphs (3) and (4), with respect to months
beginning during the first 2 quarters of fiscal year 2009, the
Secretary shall provide for a redistribution under such
subsection from the allotments for fiscal year 2006 under
subsection (b) that are not expended by the end of fiscal year
2008, to a fiscal year 2009 shortfall State described in
paragraph (2), such amount as the Secretary determines will
eliminate the estimated shortfall described in such paragraph
for such State for the month.
``(2) Fiscal year 2009 shortfall state described.--A fiscal
year 2009 shortfall State described in this paragraph is a State
with a State child health plan approved under this title for
which the Secretary estimates, on a monthly basis using the most
recent data available to the Secretary as of such month, that
the Federal share amount of the projected expenditures under
such plan for such State for the first 2 quarters of fiscal year
2009 will exceed the sum of--
``(A) the amount of the State's allotments for each
of fiscal years 2007 and 2008 that was not expended by
the end of fiscal year 2008; and
``(B) the amount of the State's allotment for fiscal
year 2009.
``(3) Funds redistributed in the order in which states
realize funding shortfalls.--The Secretary shall redistribute
the amounts available for redistribution under paragraph (1) to
fiscal year 2009 shortfall States described in paragraph (2) in
the order in which such States realize monthly funding
shortfalls under this title for fiscal year 2009. The Secretary
shall only make redistributions under this subsection to the
extent that there are unexpended fiscal year 2006 allotments
under subsection (b) available for such redistributions.
``(4) Proration rule.--If the amounts available for
redistribution under paragraph (1) are less than the total
amounts of the estimated shortfalls determined for the month
under that paragraph, the amount computed under such paragraph
for each fiscal year 2009 shortfall State for the month shall be
reduced proportionally.
``(5) Retrospective [NOTE: Deadline. adjustment.--The
Secretary may adjust the estimates and determinations made to
carry out

[[Page 2512]]
121 STAT. 2512

this subsection as necessary on the basis of the amounts
reported by States not later than May 31, 2009, on CMS Form 64
or CMS Form 21, as the case may be, and as approved by the
Secretary.
``(6) Availability; no further redistribution.--
Notwithstanding subsections (e) and (f), amounts redistributed
to a State pursuant to this subsection for the first 2 quarters
of fiscal year 2009 shall only remain available for expenditure
by the State through March 31, 2009, and any amounts of such
redistributions that remain unexpended as of such date, shall
not be subject to redistribution under subsection (f).

``(l) Additional Allotments To Eliminate Funding Shortfalls for the
First 2 Quarters of Fiscal Year 2009.--
``(1) Appropriation; allotment authority.--For the purpose
of providing additional allotments described in subparagraphs
(A) and (B) of paragraph (3), there is appropriated, out of any
money in the Treasury not otherwise appropriated, such sums as
may be necessary, not to exceed $275,000,000 for the first 2
quarters of fiscal year 2009.
``(2) Shortfall states described.--For purposes of paragraph
(3), a shortfall State described in this paragraph is a State
with a State child health plan approved under this title for
which the Secretary estimates, on the basis of the most recent
data available to the Secretary, that the Federal share amount
of the projected expenditures under such plan for such State for
the first 2 quarters of fiscal year 2009 will exceed the sum
of--
``(A) the amount of the State's allotments for each
of fiscal years 2007 and 2008 that will not be expended
by the end of fiscal year 2008;
``(B) the amount, if any, that is to be
redistributed to the State during fiscal year 2009 in
accordance with subsection (k); and
``(C) the amount of the State's allotment for fiscal
year 2009.
``(3) Allotments.--In addition to the allotments provided
under subsections (b) and (c), subject to paragraph (4), of the
amount available for the additional allotments under paragraph
(1) for the first 2 quarters of fiscal year 2009, the Secretary
shall allot--
``(A) to each shortfall State described in paragraph
(2) not described in subparagraph (B) such amount as the
Secretary determines will eliminate the estimated
shortfall described in such paragraph for the State; and
``(B) to each commonwealth or territory described in
subsection (c)(3), an amount equal to the percentage
specified in subsection (c)(2) for the commonwealth or
territory multiplied by 1.05 percent of the sum of the
amounts determined for each shortfall State under
subparagraph (A).
``(4) Proration rule.--If the amounts available for
additional allotments under paragraph (1) are less than the
total of the amounts determined under subparagraphs (A) and (B)
of paragraph (3), the amounts computed under such subparagraphs
shall be reduced proportionally.
``(5) Retrospective [NOTE: Deadline. adjustment.--The
Secretary may adjust the estimates and determinations made to
carry out

[[Page 2513]]
121 STAT. 2513

this subsection as necessary on the basis of the amounts
reported by States not later than May 31, 2009, on CMS Form 64
or CMS Form 21, as the case may be, and as approved by the
Secretary.
``(6) Availability; no redistribution of unexpended
additional allotments.--Notwithstanding subsections (e) and (f),
amounts allotted to a State pursuant to this subsection for
fiscal year 2009, subject to paragraph (5), shall only remain
available for expenditure by the State through March 31, 2009.
Any amounts of such allotments that remain unexpended as of such
date shall not be subject to redistribution under subsection
(f).''.
SEC. 202. EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA) AND
ABSTINENCE EDUCATION PROGRAM.

Section 401 of division B of the Tax Relief and Health Care Act of
2006 (Public Law 109-432, 120 Stat. 2994), as amended by section 1 of
Public Law 110-48 (121 Stat. 244) and section 2 of the TMA, Abstinence,
Education, and QI Programs Extension Act of 2007 (Public Law 110-90, 121
Stat. 984), is amended--
(1) by striking ``December 31, 2007'' and inserting ``June
30, 2008''; and
(2) by striking ``first quarter'' and inserting ``third
quarter'' each place it appears.
SEC. 203. EXTENSION OF QUALIFYING INDIVIDUAL (QI) PROGRAM.

(a) Extension.--Section 1902(a)(10)(E)(iv) of the Social Security
Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended by striking ``December
2007'' and inserting ``June 2008''.
(b) Extending Total Amount Available for Allocation.--Section
1933(g)(2) of the Social Security Act (42 U.S.C. 1396u-3(g)(2)) is
amended--
(1) in subparagraph (G), by striking ``and'' at the end;
(2) in subparagraph (H), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following new subparagraph:
``(I) for the period that begins on January 1, 2008,
and ends on June 30, 2008, the total allocation amount
is $200,000,000.''.
SEC. 204. MEDICAID DSH EXTENSION.

Section 1923(f)(6) of the Social Security Act (42 U.S.C. 1396r-
4(f)(6)) is amended--
(1) in the heading, by inserting ``and portions of fiscal
year 2008'' after ``fiscal year 2007''; and
(2) in subparagraph (A)--
(A) in clause (i), by adding at the end (after and
below subclause (II)) the following:
``Only with [NOTE: Tennessee. respect to fiscal
year 2008 for the period ending on June 30, 2008,
the DSH allotment for Tennessee for such portion
of the fiscal year, notwithstanding such table or
terms, shall be \3/4\ of the amount specified in
the previous sentence for fiscal year 2007.'';
(B) in clause (ii)--
(i) by inserting ``or for a period in fiscal
year 2008 described in clause (i)'' after ``fiscal
year 2007''; and
(ii) by inserting ``or period'' after ``such
fiscal year''; and

[[Page 2514]]
121 STAT. 2514

(C) in clause (iv)--
(i) in the heading, by inserting ``and fiscal
year 2008'' after ``fiscal year 2007'';
(ii) in subclause (I)--
(I) by inserting ``or for a period
in fiscal year 2008 described in clause
(i)'' after ``fiscal year 2007''; and
(II) by inserting ``or period''
after ``for such fiscal year''; and
(iii) in subclause (II)--
(I) by inserting ``or for a period
in fiscal year 2008 described in clause
(i)'' after ``fiscal year 2007''; and
(II) by inserting ``or period''
after ``such fiscal year'' each place it
appears; and
(3) in subparagraph (B)(i), by adding at the end the
following: ``Only with [NOTE: Hawaii. respect to fiscal year
2008 for the period ending on June 30, 2008, the DSH allotment
for Hawaii for such portion of the fiscal year, notwithstanding
the table set forth in paragraph (2), shall be $7,500,000.''.
SEC. 205. IMPROVING DATA COLLECTION.

Section 2109(b)(2) of the Social Security Act (42 U.S.C.
1397ii(b)(2)) is amended by inserting before the period at the end the
following ``(except that only with respect to fiscal year 2008, there
are appropriated $20,000,000 for the purpose of carrying out this
subsection, to remain available until expended)''.
SEC. 206. MORATORIUM ON CERTAIN PAYMENT RESTRICTIONS.

Notwithstanding any other provision of law, the Secretary of Health
and Human Services shall not, prior to June 30, 2008, take any action
(through promulgation of regulation, issuance of regulatory guidance,
use of Federal payment audit procedures, or other administrative action,
policy, or practice, including a Medical Assistance Manual transmittal
or letter to State Medicaid directors) to impose any restrictions
relating to coverage or payment under title XIX of the Social Security
Act for rehabilitation services or school-based administration and
school-based transportation if such restrictions are more restrictive in
any aspect than those applied to such areas as of July 1, 2007.

TITLE III--MISCELLANEOUS

SEC. 301. MEDICARE PAYMENT ADVISORY COMMISSION STATUS.

Section 1805(a) of the Social Security Act (42 U.S.C. 1395b-6(a)) is
amended by inserting ``as an agency of Congress'' after ``established''.
SEC. 302. SPECIAL DIABETES PROGRAMS FOR TYPE I DIABETES AND
INDIANS.

(a) Special Diabetes Programs for Type I Diabetes.--Section
330B(b)(2)(C) of the Public Health Service Act (42 U.S.C. 254c-
2(b)(2)(C)) is amended by striking ``2008'' and inserting ``2009''.

[[Page 2515]]
121 STAT. 2515

(b) Special Diabetes Programs for Indians.--Section 330C(c)(2)(C) of
the Public Health Service Act (42 U.S.C. 254c-3(c)(2)(C)) is amended by
striking ``2008'' and inserting ``2009''.

Approved December 29, 2007.

LEGISLATIVE HISTORY--S. 2499:
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CONGRESSIONAL RECORD, Vol. 153 (2007):
Dec. 18, considered and passed Senate.
Dec. 19, considered and passed House.