[United States Statutes at Large, Volume 123, 111th Congress, 1st Session]
[From the U.S. Government Publishing Office, www.gpo.gov]

123 STAT. 8

Public Law 111-3
111th Congress

An Act


 
To amend title XXI of the Social Security Act to extend and improve the
Children's Health Insurance Program, and for other
purposes. <>

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <>
SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT;
REFERENCES; TABLE OF CONTENTS.

(a) <>  Short Title.--This Act may be cited
as the ``Children's Health Insurance Program Reauthorization Act of
2009''.

(b) Amendments to Social Security Act.--Except as otherwise
specifically provided, whenever in this Act an amendment is expressed in
terms of an amendment to or repeal of a section or other provision, the
reference shall be considered to be made to that section or other
provision of the Social Security Act.
(c) <>  References to CHIP; Medicaid;
Secretary.--In this Act:
(1) CHIP.--The term ``CHIP'' means the State Children's
Health Insurance Program established under title XXI of the
Social Security Act (42 U.S.C. 1397aa et seq.).
(2) Medicaid.--The term ``Medicaid'' means the program for
medical assistance established under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.).
(3) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.

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

Sec. 1. Short title; amendments to Social Security Act; references;
table of contents.
Sec. 2. Purpose.
Sec. 3. General effective date; exception for State legislation;
contingent effective date; reliance on law.

TITLE I--FINANCING

Subtitle A--Funding

Sec. 101. Extension of CHIP.
Sec. 102. Allotments for States and territories for fiscal years 2009
through 2013.
Sec. 103. Child Enrollment Contingency Fund.
Sec. 104. CHIP performance bonus payment to offset additional enrollment
costs resulting from enrollment and retention efforts.
Sec. 105. Two-year initial availability of CHIP allotments.
Sec. 106. Redistribution of unused allotments.
Sec. 107. Option for qualifying States to receive the enhanced portion
of the CHIP matching rate for Medicaid coverage of certain
children.
Sec. 108. One-time appropriation.
Sec. 109. Improving funding for the territories under CHIP and Medicaid.

Subtitle B--Focus on Low-Income Children and Pregnant Women

Sec. 111. State option to cover low-income pregnant women under CHIP
through a State plan amendment.

[[Page 9]]
123 STAT. 9

Sec. 112. Phase-out of coverage for nonpregnant childless adults under
CHIP; conditions for coverage of parents.
Sec. 113. Elimination of counting Medicaid child presumptive eligibility
costs against title XXI allotment.
Sec. 114. Limitation on matching rate for States that propose to cover
children with effective family income that exceeds 300
percent of the poverty line.
Sec. 115. State authority under Medicaid.

TITLE II--OUTREACH AND ENROLLMENT

Subtitle A--Outreach and Enrollment Activities

Sec. 201. Grants and enhanced administrative funding for outreach and
enrollment.
Sec. 202. Increased outreach and enrollment of Indians.
Sec. 203. State option to rely on findings from an Express Lane agency
to conduct simplified eligibility determinations.

Subtitle B--Reducing Barriers to Enrollment

Sec. 211. Verification of declaration of citizenship or nationality for
purposes of eligibility for Medicaid and CHIP.
Sec. 212. Reducing administrative barriers to enrollment.
Sec. 213. Model of Interstate coordinated enrollment and coverage
process.
Sec. 214. Permitting States to ensure coverage without a 5-year delay of
certain children and pregnant women under the Medicaid
program and CHIP.

TITLE III--REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE

Subtitle A--Additional State Option for Providing Premium Assistance

Sec. 301. Additional State option for providing premium assistance.
Sec. 302. Outreach, education, and enrollment assistance.

Subtitle B--Coordinating Premium Assistance With Private Coverage

Sec. 311. Special enrollment period under group health plans in case of
termination of Medicaid or CHIP coverage or eligibility for
assistance in purchase of employment-based coverage;
coordination of coverage.

TITLE IV--STRENGTHENING QUALITY OF CARE AND HEALTH OUTCOMES

Sec. 401. Child health quality improvement activities for children
enrolled in Medicaid or CHIP.
Sec. 402. Improved availability of public information regarding
enrollment of children in CHIP and Medicaid.
Sec. 403. Application of certain managed care quality safeguards to
CHIP.

TITLE V--IMPROVING ACCESS TO BENEFITS

Sec. 501. Dental benefits.
Sec. 502. Mental health parity in CHIP plans.
Sec. 503. Application of prospective payment system for services
provided by Federally-qualified health centers and rural
health clinics.
Sec. 504. Premium grace period.
Sec. 505. Clarification of coverage of services provided through school-
based health centers.
Sec. 506. Medicaid and CHIP Payment and Access Commission.

TITLE VI--PROGRAM INTEGRITY AND OTHER MISCELLANEOUS PROVISIONS

Subtitle A--Program Integrity and Data Collection

Sec. 601. Payment error rate measurement (``PERM'').
Sec. 602. Improving data collection.
Sec. 603. Updated Federal evaluation of CHIP.
Sec. 604. Access to records for IG and GAO audits and evaluations.
Sec. 605. No Federal funding for illegal aliens; disallowance for
unauthorized expenditures.

Subtitle B--Miscellaneous Health Provisions

Sec. 611. Deficit Reduction Act technical corrections.
Sec. 612. References to title XXI.
Sec. 613. Prohibiting initiation of new health opportunity account
demonstration programs.
Sec. 614. Adjustment in computation of Medicaid FMAP to disregard an
extraordinary employer pension contribution.

[[Page 10]]
123 STAT. 10

Sec. 615. Clarification treatment of regional medical center.
Sec. 616. Extension of Medicaid DSH allotments for Tennessee and Hawaii.
Sec. 617. GAO report on Medicaid managed care payment rates.

Subtitle C--Other Provisions

Sec. 621. Outreach regarding health insurance options available to
children.
Sec. 622. Sense of the Senate regarding access to affordable and
meaningful health insurance coverage.

TITLE VII--REVENUE PROVISIONS

Sec. 701. Increase in excise tax rate on tobacco products.
Sec. 702. Administrative improvements.
Sec. 703. Treasury study concerning magnitude of tobacco smuggling in
the United States.
Sec. 704. Time for payment of corporate estimated taxes.

SEC. 2. <> PURPOSE.

It is the purpose of this Act to provide dependable and stable
funding for children's health insurance under titles XXI and XIX of the
Social Security Act in order to enroll all six million uninsured
children who are eligible, but not enrolled, for coverage today through
such titles.
SEC. 3. <> GENERAL EFFECTIVE DATE;
EXCEPTION FOR STATE LEGISLATION; CONTINGENT
EFFECTIVE DATE; RELIANCE ON LAW.

(a) General Effective Date.--Unless otherwise provided in this Act,
subject to subsections (b) through (d), this Act (and the amendments
made by this Act) shall take effect on April 1, 2009, and shall apply to
child health assistance and medical assistance provided on or after that
date.
(b) Exception for State Legislation.--In the case of a State plan
under title XIX or State child health plan under XXI of the Social
Security Act, which the Secretary of Health and Human Services
determines requires State legislation in order for the respective plan
to meet one or more additional requirements imposed by amendments made
by this Act, the respective plan shall not be regarded as failing to
comply with the requirements of such title solely on the basis of its
failure to meet such an additional requirement before the first day of
the first calendar quarter beginning after the close of the first
regular session of the State legislature that begins after the date of
enactment of this Act. For purposes of the previous sentence, in the
case of a State that has a 2-year legislative session, each year of the
session shall be considered to be a separate regular session of the
State legislature.
(c) Coordination of CHIP Funding for Fiscal Year 2009.--
Notwithstanding any other provision of law, insofar as funds have been
appropriated under section 2104(a)(11), 2104(k), or 2104(l) of the
Social Security Act, as amended by section 201 of Public Law 110-173, to
provide allotments to States under CHIP for fiscal year 2009--
(1) any amounts that are so appropriated that are not so
allotted and obligated before April 1, 2009 are rescinded; and
(2) any amount provided for CHIP allotments to a State under
this Act (and the amendments made by this Act) for such fiscal
year shall be reduced by the amount of such appropriations so
allotted and obligated before such date.

(d) Reliance on Law.--With respect to amendments made by this Act
(other than title VII) that become effective as of a date--

[[Page 11]]
123 STAT. 11

(1) such amendments are effective as of such date whether or
not regulations implementing such amendments have been issued;
and
(2) Federal financial participation for medical assistance
or child health assistance furnished under title XIX or XXI,
respectively, of the Social Security Act on or after such date
by a State in good faith reliance on such amendments before the
date of promulgation of final regulations, if any, to carry out
such amendments (or before the date of guidance, if any,
regarding the implementation of such amendments) shall not be
denied on the basis of the State's failure to comply with such
regulations or guidance.

TITLE I--FINANCING

Subtitle A--Funding

SEC. 101. EXTENSION OF CHIP.

Section 2104(a) (42 U.S.C. 1397dd(a)) is amended--
(1) in paragraph (10), by striking ``and'' at the end;
(2) by amending paragraph (11), by striking ``each of fiscal
years 2008 and 2009'' and inserting ``fiscal year 2008''; and
(3) by adding at the end the following new paragraphs:
``(12) for fiscal year 2009, $10,562,000,000;
``(13) for fiscal year 2010, $12,520,000,000;
``(14) for fiscal year 2011, $13,459,000,000;
``(15) for fiscal year 2012, $14,982,000,000; and
``(16) for fiscal year 2013, for purposes of making 2 semi-
annual allotments--
``(A) $2,850,000,000 for the period beginning on
October 1, 2012, and ending on March 31, 2013, and
``(B) $2,850,000,000 for the period beginning on
April 1, 2013, and ending on September 30, 2013.''.
SEC. 102. ALLOTMENTS FOR STATES AND TERRITORIES FOR FISCAL YEARS
2009 THROUGH 2013.

Section 2104 (42 U.S.C. 1397dd) is amended--
(1) in subsection (b)(1), by striking ``subsection (d)'' and
inserting ``subsections (d) and (m)'';
(2) in subsection (c)(1), by striking ``subsection (d)'' and
inserting ``subsections (d) and (m)(4)''; and
(3) by adding at the end the following new subsection:

``(m) Allotments for Fiscal Years 2009 Through 2013.--
``(1) For fiscal year 2009.--
``(A) For the 50 states and the district of
columbia.--Subject to the succeeding provisions of this
paragraph and paragraph (4), the Secretary shall allot
for fiscal year 2009 from the amount made available
under subsection (a)(12), to each of the 50 States and
the District of Columbia 110 percent of the highest of
the following amounts for such State or District:
``(i) The total Federal payments to the State
under this title for fiscal year 2008, multiplied
by the allotment increase factor determined under
paragraph (5) for fiscal year 2009.

[[Page 12]]
123 STAT. 12

``(ii) The amount allotted to the State for
fiscal year 2008 under subsection (b), multiplied
by the allotment increase factor determined under
paragraph (5) for fiscal year 2009.
``(iii) <> The
projected total Federal payments to the State
under this title for fiscal year 2009, as
determined on the basis of the February 2009
projections certified by the State to the
Secretary by not later than March 31, 2009.
``(B) For the commonwealths and territories.--
<> Subject to the succeeding
provisions of this paragraph and paragraph (4), the
Secretary shall allot for fiscal year 2009 from the
amount made available under subsection (a)(12) to each
of the commonwealths and territories described in
subsection (c)(3) an amount equal to the highest amount
of Federal payments to the commonwealth or territory
under this title for any fiscal year occurring during
the period of fiscal years 1999 through 2008, multiplied
by the allotment increase factor determined under
paragraph (5) for fiscal year 2009, except that
subparagraph (B) thereof shall be applied by
substituting `the United States' for `the State'.
``(C) Adjustment for qualifying states.--In the case
of a qualifying State described in paragraph (2) of
section 2105(g), the Secretary shall permit the State to
submit a revised projection described in subparagraph
(A)(iii) in order to take into account changes in such
projections attributable to the application of paragraph
(4) of such section.
``(2) For fiscal years 2010 through 2012.--
``(A) In general.--Subject to paragraphs (4) and
(6), from the amount made available under paragraphs
(13) through (15) of subsection (a) for each of fiscal
years 2010 through 2012, respectively, the Secretary
shall compute a State allotment for each State
(including the District of Columbia and each
commonwealth and territory) for each such fiscal year as
follows:
``(i) Growth factor update for fiscal year
2010.--For fiscal year 2010, the allotment of the
State is equal to the sum of--
``(I) the amount of the State
allotment under paragraph (1) for fiscal
year 2009; and
``(II) the amount of any payments
made to the State under subsection (k),
(l), or (n) for fiscal year 2009,
multiplied by the allotment increase factor under
paragraph (5) for fiscal year 2010.
``(ii) Rebasing in fiscal year 2011.--For
fiscal year 2011, the allotment of the State is
equal to the Federal payments to the State that
are attributable to (and countable towards) the
total amount of allotments available under this
section to the State in fiscal year 2010
(including payments made to the State under
subsection (n) for fiscal year 2010 as well as
amounts redistributed to the State in fiscal year
2010), multiplied by the allotment increase factor
under paragraph (5) for fiscal year 2011.

[[Page 13]]
123 STAT. 13

``(iii) Growth factor update for fiscal year
2012.--For fiscal year 2012, the allotment of the
State is equal to the sum of--
``(I) the amount of the State
allotment under clause (ii) for fiscal
year 2011; and
``(II) the amount of any payments
made to the State under subsection (n)
for fiscal year 2011,
multiplied by the allotment increase factor under
paragraph (5) for fiscal year 2012.
``(3) For fiscal year 2013.--
``(A) First half.--Subject to paragraphs (4) and
(6), from the amount made available under subparagraph
(A) of paragraph (16) of subsection (a) for the semi-
annual period described in such paragraph, increased by
the amount of the appropriation for such period under
section 108 of the Children's Health Insurance Program
Reauthorization Act of 2009, the Secretary shall compute
a State allotment for each State (including the District
of Columbia and each commonwealth and territory) for
such semi-annual period in an amount equal to the first
half ratio (described in subparagraph (D)) of the amount
described in subparagraph (C).
``(B) Second half.--Subject to paragraphs (4) and
(6), from the amount made available under subparagraph
(B) of paragraph (16) of subsection (a) for the semi-
annual period described in such paragraph, the Secretary
shall compute a State allotment for each State
(including the District of Columbia and each
commonwealth and territory) for such semi-annual period
in an amount equal to the amount made available under
such subparagraph, multiplied by the ratio of--
``(i) the amount of the allotment to such
State under subparagraph (A); to
``(ii) the total of the amount of all of the
allotments made available under such subparagraph.
``(C) Full year amount based on rebased amount.--The
amount described in this subparagraph for a State is
equal to the Federal payments to the State that are
attributable to (and countable towards) the total amount
of allotments available under this section to the State
in fiscal year 2012 (including payments made to the
State under subsection (n) for fiscal year 2012 as well
as amounts redistributed to the State in fiscal year
2012), multiplied by the allotment increase factor under
paragraph (5) for fiscal year 2013.
``(D) First half ratio.--The first half ratio
described in this subparagraph is the ratio of--
``(i) the sum of--
``(I) the amount made available
under subsection (a)(16)(A); and
``(II) the amount of the
appropriation for such period under
section 108 of the Children's Health
Insurance Program Reauthorization Act of
2009; to
``(ii) the sum of the--
``(I) amount described in clause
(i); and

[[Page 14]]
123 STAT. 14

``(II) the amount made available
under subsection (a)(16)(B).
``(4) Proration rule.--If, after the application of this
subsection without regard to this paragraph, the sum of the
allotments determined under paragraph (1), (2), or (3) for a
fiscal year (or, in the case of fiscal year 2013, for a semi-
annual period in such fiscal year) exceeds the amount available
under subsection (a) for such fiscal year or period, the
Secretary shall reduce each allotment for any State under such
paragraph for such fiscal year or period on a proportional
basis.
``(5) Allotment increase factor.--The allotment increase
factor under this paragraph for a fiscal year is equal to the
product of the following:
``(A) Per capita health care growth factor.--1 plus
the percentage increase in the projected per capita
amount of National Health Expenditures from the calendar
year in which the previous fiscal year ends to the
calendar year in which the fiscal year involved ends, as
most recently published by the Secretary before the
beginning of the fiscal year.
``(B) Child population growth factor.--1 plus the
percentage increase (if any) in the population of
children in the State from July 1 in the previous fiscal
year to July 1 in the fiscal year involved, as
determined by the Secretary based on the most recent
published estimates of the Bureau of the Census before
the beginning of the fiscal year involved, plus 1
percentage point.
``(6) Increase in allotment to account for approved program
expansions.--In the case of one of the 50 States or the District
of Columbia that--
``(A) has submitted to the Secretary, and has
approved by the Secretary, a State plan amendment or
waiver request relating to an expansion of eligibility
for children or benefits under this title that becomes
effective for a fiscal year (beginning with fiscal year
2010 and ending with fiscal year 2013); and
``(B) has submitted to the Secretary, before the
August 31 preceding the beginning of the fiscal year, a
request for an expansion allotment adjustment under this
paragraph for such fiscal year that specifies--
``(i) <> the
additional expenditures that are attributable to
the eligibility or benefit expansion provided
under the amendment or waiver described in
subparagraph (A), as certified by the State and
submitted to the Secretary by not later than
August 31 preceding the beginning of the fiscal
year; and
``(ii) the extent to which such additional
expenditures are projected to exceed the allotment
of the State or District for the year,
subject to paragraph (4), the amount of the allotment of the
State or District under this subsection for such fiscal year
shall be increased by the excess amount described in
subparagraph (B)(i). A State or District may only obtain an
increase under this paragraph for an allotment for fiscal year
2010 or fiscal year 2012.
``(7) Availability of amounts for semi-annual periods in
fiscal year 2013.--Each semi-annual allotment made under

[[Page 15]]
123 STAT. 15

paragraph (3) for a period in fiscal year 2013 shall remain
available for expenditure under this title for periods after the
end of such fiscal year in the same manner as if the allotment
had been made available for the entire fiscal year.''.
SEC. 103. CHILD ENROLLMENT CONTINGENCY FUND.

Section 2104 (42 U.S.C. 1397dd), as amended by section 102, is
amended by adding at the end the following new subsection:
``(n) Child Enrollment Contingency Fund.--
``(1) Establishment.--There is hereby established in the
Treasury of the United States a fund which shall be known as the
`Child Enrollment Contingency Fund' (in this subsection referred
to as the `Fund'). Amounts in the Fund shall be available
without further appropriations for payments under this
subsection.
``(2) Deposits into fund.--
``(A) Initial and subsequent appropriations.--
Subject to subparagraphs (B) and (D), out of any money
in the Treasury of the United States not otherwise
appropriated, there are appropriated to the Fund--
``(i) for fiscal year 2009, an amount equal to
20 percent of the amount made available under
paragraph (12) of subsection (a) for the fiscal
year; and
``(ii) for each of fiscal years 2010 through
2012 (and for each of the semi-annual allotment
periods for fiscal year 2013), such sums as are
necessary for making payments to eligible States
for such fiscal year or period, but not in excess
of the aggregate cap described in subparagraph
(B).
``(B) Aggregate cap.--The total amount available for
payment from the Fund for each of fiscal years 2010
through 2012 (and for each of the semi-annual allotment
periods for fiscal year 2013), taking into account
deposits made under subparagraph (C), shall not exceed
20 percent of the amount made available under subsection
(a) for the fiscal year or period.
``(C) Investment of fund.--The Secretary of the
Treasury shall invest, in interest bearing securities of
the United States, such currently available portions of
the Fund as are not immediately required for payments
from the Fund. The income derived from these investments
constitutes a part of the Fund.
``(D) Availability of excess funds for performance
bonuses.--Any amounts in excess of the aggregate cap
described in subparagraph (B) for a fiscal year or
period shall be made available for purposes of carrying
out section 2105(a)(3) for any succeeding fiscal year
and the Secretary of the Treasury shall reduce the
amount in the Fund by the amount so made available.
``(3) Child enrollment contingency fund payments.--
``(A) In general.--If a State's expenditures under
this title in fiscal year 2009, fiscal year 2010, fiscal
year 2011, fiscal year 2012, or a semi-annual allotment
period for fiscal year 2013, exceed the total amount of
allotments available under this section to the State in
the fiscal year or period (determined without regard to
any redistribution

[[Page 16]]
123 STAT. 16

it receives under subsection (f) that is available for
expenditure during such fiscal year or period, but
including any carryover from a previous fiscal year) and
if the average monthly unduplicated number of children
enrolled under the State plan under this title
(including children receiving health care coverage
through funds under this title pursuant to a waiver
under section 1115) during such fiscal year or period
exceeds its target average number of such enrollees (as
determined under subparagraph (B)) for that fiscal year
or period, subject to subparagraph (D), the Secretary
shall pay to the State from the Fund an amount equal to
the product of--
``(i) the amount by which such average monthly
caseload exceeds such target number of enrollees;
and
``(ii) the projected per capita expenditures
under the State child health plan (as determined
under subparagraph (C) for the fiscal year),
multiplied by the enhanced FMAP (as defined in
section 2105(b)) for the State and fiscal year
involved (or in which the period occurs).
``(B) Target average number of child enrollees.--In
this paragraph, the target average number of child
enrollees for a State--
``(i) for fiscal year 2009 is equal to the
monthly average unduplicated number of children
enrolled in the State child health plan under this
title (including such children receiving health
care coverage through funds under this title
pursuant to a waiver under section 1115) during
fiscal year 2008 increased by the population
growth for children in that State for the year
ending on June 30, 2007 (as estimated by the
Bureau of the Census) plus 1 percentage point; or
``(ii) for a subsequent fiscal year (or semi-
annual period occurring in a fiscal year) is equal
to the target average number of child enrollees
for the State for the previous fiscal year
increased by the child population growth factor
described in subsection (m)(5)(B) for the State
for the prior fiscal year.
``(C) Projected per capita expenditures.--For
purposes of subparagraph (A)(ii), the projected per
capita expenditures under a State child health plan--
``(i) for fiscal year 2009 is equal to the
average per capita expenditures (including both
State and Federal financial participation) under
such plan for the targeted low-income children
counted in the average monthly caseload for
purposes of this paragraph during fiscal year
2008, increased by the annual percentage increase
in the projected per capita amount of National
Health Expenditures (as estimated by the
Secretary) for 2009; or
``(ii) for a subsequent fiscal year (or semi-
annual period occurring in a fiscal year) is equal
to the projected per capita expenditures under
such plan for the previous fiscal year (as
determined under clause (i) or this clause)
increased by the annual percentage increase in the
projected per capita amount of National

[[Page 17]]
123 STAT. 17

Health Expenditures (as estimated by the
Secretary) for the year in which such subsequent
fiscal year ends.
``(D) Proration rule.--If the amounts available for
payment from the Fund for a fiscal year or period are
less than the total amount of payments determined under
subparagraph (A) for the fiscal year or period, the
amount to be paid under such subparagraph to each
eligible State shall be reduced proportionally.
``(E) Timely payment; reconciliation.--
<> Payment under this paragraph
for a fiscal year or period shall be made before the end
of the fiscal year or period based upon the most recent
data for expenditures and enrollment and the provisions
of subsection (e) of section 2105 shall apply to
payments under this subsection in the same manner as
they apply to payments under such section.
``(F) Continued reporting.--For purposes of this
paragraph and subsection (f), the State shall submit to
the Secretary the State's projected Federal
expenditures, even if the amount of such expenditures
exceeds the total amount of allotments available to the
State in such fiscal year or period.
``(G) Application to commonwealths and
territories.--No payment shall be made under this
paragraph to a commonwealth or territory described in
subsection (c)(3) until such time as the Secretary
determines that there are in effect methods,
satisfactory to the Secretary, for the collection and
reporting of reliable data regarding the enrollment of
children described in subparagraphs (A) and (B) in order
to accurately determine the commonwealth's or
territory's eligibility for, and amount of payment,
under this paragraph.''.
SEC. 104. CHIP PERFORMANCE BONUS PAYMENT TO OFFSET ADDITIONAL
ENROLLMENT COSTS RESULTING FROM ENROLLMENT
AND RETENTION EFFORTS.

Section 2105(a) (42 U.S.C. 1397ee(a)) is amended by adding at the
end the following new paragraphs:
``(3) Performance bonus payment to offset additional
medicaid and chip child enrollment costs resulting from
enrollment and retention efforts.--
``(A) In general.--In addition to the payments made
under paragraph (1), for each fiscal year (beginning
with fiscal year 2009 and ending with fiscal year 2013),
the Secretary shall pay from amounts made available
under subparagraph (E), to each State that meets the
condition under paragraph (4) for the fiscal year, an
amount equal to the amount described in subparagraph (B)
for the State and fiscal year. <> The
payment under this paragraph shall be made, to a State
for a fiscal year, as a single payment not later than
the last day of the first calendar quarter of the
following fiscal year.
``(B) Amount for above baseline medicaid child
enrollment costs.--Subject to subparagraph (E), the
amount described in this subparagraph for a State for a
fiscal year is equal to the sum of the following
amounts:
``(i) First tier above baseline medicaid
enrollees.--An amount equal to the number of first

[[Page 18]]
123 STAT. 18

tier above baseline child enrollees (as determined
under subparagraph (C)(i)) under title XIX for the
State and fiscal year, multiplied by 15 percent of
the projected per capita State Medicaid
expenditures (as determined under subparagraph
(D)) for the State and fiscal year under title
XIX.
``(ii) Second tier above baseline medicaid
enrollees.--An amount equal to the number of
second tier above baseline child enrollees (as
determined under subparagraph (C)(ii)) under title
XIX for the State and fiscal year, multiplied by
62.5 percent of the projected per capita State
Medicaid expenditures (as determined under
subparagraph (D)) for the State and fiscal year
under title XIX.
``(C) Number of first and second tier above baseline
child enrollees; baseline number of child enrollees.--
For purposes of this paragraph:
``(i) First tier above baseline child
enrollees.--The number of first tier above
baseline child enrollees for a State for a fiscal
year under title XIX is equal to the number (if
any, as determined by the Secretary) by which--
``(I) the monthly average
unduplicated number of qualifying
children (as defined in subparagraph
(F)) enrolled during the fiscal year
under the State plan under title XIX,
respectively; exceeds
``(II) the baseline number of
enrollees described in clause (iii) for
the State and fiscal year under title
XIX, respectively;
but not to exceed 10 percent of the baseline
number of enrollees described in subclause (II).
``(ii) Second tier above baseline child
enrollees.--The number of second tier above
baseline child enrollees for a State for a fiscal
year under title XIX is equal to the number (if
any, as determined by the Secretary) by which--
``(I) the monthly average
unduplicated number of qualifying
children (as defined in subparagraph
(F)) enrolled during the fiscal year
under title XIX as described in clause
(i)(I); exceeds
``(II) the sum of the baseline
number of child enrollees described in
clause (iii) for the State and fiscal
year under title XIX, as described in
clause (i)(II), and the maximum number
of first tier above baseline child
enrollees for the State and fiscal year
under title XIX, as determined under
clause (i).
``(iii) Baseline number of child enrollees.--
Subject to subparagraph (H), the baseline number
of child enrollees for a State under title XIX--
``(I) for fiscal year 2009 is equal
to the monthly average unduplicated
number of qualifying children enrolled
in the State plan under title XIX during
fiscal year 2007 increased by the
population growth for children in that
State from 2007 to 2008 (as estimated by
the Bureau of the Census) plus 4
percentage points, and further increased

[[Page 20]]
123 STAT. 19

by the population growth for children in
that State from 2008 to 2009 (as
estimated by the Bureau of the Census)
plus 4 percentage points;
``(II) for each of fiscal years
2010, 2011, and 2012, is equal to the
baseline number of child enrollees for
the State for the previous fiscal year
under title XIX, increased by the
population growth for children in that
State from the calendar year in which
the respective fiscal year begins to the
succeeding calendar year (as estimated
by the Bureau of the Census) plus 3.5
percentage points;
``(III) for each of fiscal years
2013, 2014, and 2015, is equal to the
baseline number of child enrollees for
the State for the previous fiscal year
under title XIX, increased by the
population growth for children in that
State from the calendar year in which
the respective fiscal year begins to the
succeeding calendar year (as estimated
by the Bureau of the Census) plus 3
percentage points; and
``(IV) for a subsequent fiscal year
is equal to the baseline number of child
enrollees for the State for the previous
fiscal year under title XIX, increased
by the population growth for children in
that State from the calendar year in
which the fiscal year involved begins to
the succeeding calendar year (as
estimated by the Bureau of the Census)
plus 2 percentage points.
``(D) Projected per capita state medicaid
expenditures.--For purposes of subparagraph (B), the
projected per capita State Medicaid expenditures for a
State and fiscal year under title XIX is equal to the
average per capita expenditures (including both State
and Federal financial participation) for children under
the State plan under such title, including under waivers
but not including such children eligible for assistance
by virtue of the receipt of benefits under title XVI,
for the most recent fiscal year for which actual data
are available (as determined by the Secretary),
increased (for each subsequent fiscal year up to and
including the fiscal year involved) by the annual
percentage increase in per capita amount of National
Health Expenditures (as estimated by the Secretary) for
the calendar year in which the respective subsequent
fiscal year ends and multiplied by a State matching
percentage equal to 100 percent minus the Federal
medical assistance percentage (as defined in section
1905(b)) for the fiscal year involved.
``(E) Amounts available for payments.--
``(i) Initial appropriation.--Out of any money
in the Treasury not otherwise appropriated, there
are appropriated $3,225,000,000 for fiscal year
2009 for making payments under this paragraph, to
be available until expended.
``(ii) Transfers.--Notwithstanding any other
provision of this title, the following amounts
shall also

[[Page 20]]
123 STAT. 20

be available, without fiscal year limitation, for
making payments under this paragraph:
``(I) Unobligated national
allotment.--
``(aa) Fiscal years 2009
through 2012.--As of December 31
of fiscal year 2009, and as of
December 31 of each succeeding
fiscal year through fiscal year
2012, the portion, if any, of
the amount appropriated under
subsection (a) for such fiscal
year that is unobligated for
allotment to a State under
subsection (m) for such fiscal
year or set aside under
subsection (a)(3) or (b)(2) of
section 2111 for such fiscal
year.
``(bb) First half of fiscal
year 2013.--As of December 31 of
fiscal year 2013, the portion,
if any, of the sum of the
amounts appropriated under
subsection (a)(16)(A) and under
section 108 of the Children's
Health Insurance Reauthorization
Act of 2009 for the period
beginning on October 1, 2012,
and ending on March 31, 2013,
that is unobligated for
allotment to a State under
subsection (m) for such fiscal
year or set aside under
subsection (b)(2) of section
2111 for such fiscal year.
``(cc) Second half of fiscal
year 2013.--As of June 30 of
fiscal year 2013, the portion,
if any, of the amount
appropriated under subsection
(a)(16)(B) for the period
beginning on April 1, 2013, and
ending on September 30, 2013,
that is unobligated for
allotment to a State under
subsection (m) for such fiscal
year or set aside under
subsection (b)(2) of section
2111 for such fiscal year.
``(II) Unexpended allotments not
used for redistribution.--As of November
15 of each of fiscal years 2010 through
2013, the total amount of allotments
made to States under section 2104 for
the second preceding fiscal year (third
preceding fiscal year in the case of the
fiscal year 2006, 2007, and 2008
allotments) that is not expended or
redistributed under section 2104(f)
during the period in which such
allotments are available for obligation.
``(III) Excess child enrollment
contingency funds.--As of October 1 of
each of fiscal years 2010 through 2013,
any amount in excess of the aggregate
cap applicable to the Child Enrollment
Contingency Fund for the fiscal year
under section 2104(n).
``(IV) Unexpended transitional
coverage block grant for nonpregnant
childless adults.--As of October 1,
2011, any amounts set aside under
section 2111(a)(3) that are not expended
by September 30, 2011.
``(iii) Proportional reduction.--If the sum of
the amounts otherwise payable under this paragraph
for

[[Page 21]]
123 STAT. 21

a fiscal year exceeds the amount available for the
fiscal year under this subparagraph, the amount to
be paid under this paragraph to each State shall
be reduced proportionally.
``(F) Qualifying children defined.--
``(i) In general.--For purposes of this
subsection, subject to clauses (ii) and (iii), the
term `qualifying children' means children who meet
the eligibility criteria (including income,
categorical eligibility, age, and immigration
status criteria) in effect as of July 1, 2008, for
enrollment under title XIX, taking into account
criteria applied as of such date under title XIX
pursuant to a waiver under section 1115.
``(ii) Limitation.--A child described in
clause (i) who is provided medical assistance
during a presumptive eligibility period under
section 1920A shall be considered to be a
`qualifying child' only if the child is determined
to be eligible for medical assistance under title
XIX.
``(iii) Exclusion.--Such term does not include
any children for whom the State has made an
election to provide medical assistance under
paragraph (4) of section 1903(v).
``(G) Application to commonwealths and
territories.--The provisions of subparagraph (G) of
section 2104(n)(3) shall apply with respect to payment
under this paragraph in the same manner as such
provisions apply to payment under such section.
``(H)  Application to states that implement a
Medicaid expansion for children after fiscal year
2008.--In the case of a State that provides coverage
under section 115 of the Children's Health Insurance
Program Reauthorization Act of 2009 for any fiscal year
after fiscal year 2008--
``(i) any child enrolled in the State plan
under title XIX through the application of such an
election shall be disregarded from the
determination for the State of the monthly average
unduplicated number of qualifying children
enrolled in such plan during the first 3 fiscal
years in which such an election is in effect; and
``(ii) in determining the baseline number of
child enrollees for the State for any fiscal year
subsequent to such first 3 fiscal years, the
baseline number of child enrollees for the State
under title XIX for the third of such fiscal years
shall be the monthly average unduplicated number
of qualifying children enrolled in the State plan
under title XIX for such third fiscal year.
``(4) Enrollment and retention provisions for children.--For
purposes of paragraph (3)(A), a State meets the condition of
this paragraph for a fiscal year if it is implementing at least
5 of the following enrollment and retention provisions (treating
each subparagraph as a separate enrollment and retention
provision) throughout the entire fiscal year:
``(A) Continuous eligibility.--The State has elected
the option of continuous eligibility for a full 12
months

[[Page 22]]
123 STAT. 22

for all children described in section 1902(e)(12) under
title XIX under 19 years of age, as well as applying
such policy under its State child health plan under this
title.
``(B) Liberalization of asset requirements.--The
State meets the requirement specified in either of the
following clauses:
``(i) Elimination of asset test.--The State
does not apply any asset or resource test for
eligibility for children under title XIX or this
title.
``(ii) Administrative verification of
assets.--The State--
``(I) permits a parent or caretaker
relative who is applying on behalf of a
child for medical assistance under title
XIX or child health assistance under
this title to declare and certify by
signature under penalty of perjury
information relating to family assets
for purposes of determining and
redetermining financial eligibility; and
``(II) takes steps to verify assets
through means other than by requiring
documentation from parents and
applicants except in individual cases of
discrepancies or where otherwise
justified.
``(C) Elimination of in-person interview
requirement.--The State does not require an application
of a child for medical assistance under title XIX (or
for child health assistance under this title), including
an application for renewal of such assistance, to be
made in person nor does the State require a face-to-face
interview, unless there are discrepancies or individual
circumstances justifying an in-person application or
face-to-face interview.
``(D) Use of joint application for medicaid and
chip.--The application form and supplemental forms (if
any) and information verification process is the same
for purposes of establishing and renewing eligibility
for children for medical assistance under title XIX and
child health assistance under this title.
``(E) Automatic renewal (use of administrative
renewal).--
``(i) In general.--The State provides, in the
case of renewal of a child's eligibility for
medical assistance under title XIX or child health
assistance under this title, a pre-printed form
completed by the State based on the information
available to the State and notice to the parent or
caretaker relative of the child that eligibility
of the child will be renewed and continued based
on such information unless the State is provided
other information. Nothing in this clause shall be
construed as preventing a State from verifying,
through electronic and other means, the
information so provided.
``(ii) Satisfaction through demonstrated use
of ex parte process.--A State shall be treated as
satisfying the requirement of clause (i) if
renewal of eligibility of children under title XIX
or this title is determined without any
requirement for an in-person interview, unless
sufficient information is not in the State's
possession and cannot be acquired from other

[[Page 23]]
123 STAT. 23

sources (including other State agencies) without
the participation of the applicant or the
applicant's parent or caretaker relative.
``(F) Presumptive eligibility for children.--The
State is implementing section 1920A under title XIX as
well as, pursuant to section 2107(e)(1), under this
title.
``(G) Express lane.--The State is implementing the
option described in section 1902(e)(13) under title XIX
as well as, pursuant to section 2107(e)(1), under this
title.
``(H) Premium assistance subsidies.--The State is
implementing the option of providing premium assistance
subsidies under section 2105(c)(10) or section 1906A.''.
SEC. 105. TWO-YEAR INITIAL AVAILABILITY OF CHIP ALLOTMENTS.

Section 2104(e) (42 U.S.C. 1397dd(e)) is amended to read as follows:
``(e) Availability of Amounts Allotted.--
``(1) In general.--Except as provided in paragraph (2),
amounts allotted to a State pursuant to this section--
``(A) for each of fiscal years 1998 through 2008,
shall remain available for expenditure by the State
through the end of the second succeeding fiscal year;
and
``(B) for fiscal year 2009 and each fiscal year
thereafter, shall remain available for expenditure by
the State through the end of the succeeding fiscal year.
``(2) Availability of amounts redistributed.--Amounts
redistributed to a State under subsection (f) shall be available
for expenditure by the State through the end of the fiscal year
in which they are redistributed.''.
SEC. 106. REDISTRIBUTION OF UNUSED ALLOTMENTS.

(a) Beginning With Fiscal Year 2007.--
(1) In general.--Section 2104(f) (42 U.S.C. 1397dd(f)) is
amended--
(A) by striking ``The Secretary'' and inserting the
following:
``(1) In general.--The Secretary'';
(B) by striking ``States that have fully expended
the amount of their allotments under this section.'' and
inserting ``States that the Secretary determines with
respect to the fiscal year for which unused allotments
are available for redistribution under this subsection,
are shortfall States described in paragraph (2) for such
fiscal year, but not to exceed the amount of the
shortfall described in paragraph (2)(A) for each such
State (as may be adjusted under paragraph (2)(C)).'';
and
(C) by adding at the end the following new
paragraph:
``(2) Shortfall states described.--
``(A) In general.--For purposes of paragraph (1),
with respect to a fiscal year, a shortfall State
described in this subparagraph is a State with a State
child health plan approved under this title for which
the Secretary estimates on the basis of the most recent
data available to the Secretary, that the projected
expenditures under such plan for the State for the
fiscal year will exceed the sum of--
``(i) the amount of the State's allotments for
any preceding fiscal years that remains available
for

[[Page 24]]
123 STAT. 24

expenditure and that will not be expended by the
end of the immediately preceding fiscal year;
``(ii) the amount (if any) of the child
enrollment contingency fund payment under
subsection (n); and
``(iii) the amount of the State's allotment
for the fiscal year.
``(B) Proration rule.--If the amounts available for
redistribution under paragraph (1) for a fiscal year are
less than the total amounts of the estimated shortfalls
determined for the year under subparagraph (A), the
amount to be redistributed under such paragraph for each
shortfall State shall be reduced proportionally.
``(C) Retrospective adjustment.--
<> The Secretary may adjust the
estimates and determinations made under paragraph (1)
and this paragraph with respect to a fiscal year as
necessary on the basis of the amounts reported by States
not later than November 30 of the succeeding fiscal
year, as approved by the Secretary.''.
(2) <> Effective date.--The
amendments made by paragraph (1) shall apply to redistribution
of allotments made for fiscal year 2007 and subsequent fiscal
years.

(b) Redistribution of Unused Allotments for Fiscal Year 2006.--
Section 2104(k) (42 U.S.C. 1397dd(k)) is amended--
(1) in the subsection heading, by striking ``the First 2
Quarters of'';
(2) in paragraph (1), by striking ``the first 2 quarters
of''; and
(3) in paragraph (6)--
(A) by striking ``the first 2 quarters of''; and
(B) by striking ``March 31'' and inserting
``September 30''.
SEC. 107. OPTION FOR QUALIFYING STATES TO RECEIVE THE ENHANCED
PORTION OF THE CHIP MATCHING RATE FOR
MEDICAID COVERAGE OF CERTAIN CHILDREN.

(a) In General.--Section 2105(g) (42 U.S.C. 1397ee(g)) is amended--
(1) in paragraph (1)(A), as amended by section 201(b)(1) of
Public Law 110-173--
(A) by inserting ``subject to paragraph (4),'' after
``Notwithstanding any other provision of law,''; and
(B) by striking ``2008, or 2009'' and inserting ``or
2008''; and
(2) by adding at the end the following new paragraph:
``(4) Option for allotments for fiscal years 2009 through
2013.--
``(A) Payment of enhanced portion of matching rate
for certain expenditures.--In the case of expenditures
described in subparagraph (B), a qualifying State (as
defined in paragraph (2)) may elect to be paid from the
State's allotment made under section 2104 for any of
fiscal years 2009 through 2013 (insofar as the allotment
is available to the State under subsections (e) and (m)
of such section) an amount each quarter equal to the
additional amount that would have been paid to the State
under title XIX with respect to such expenditures if the
enhanced FMAP (as determined under subsection (b)) had

[[Page 25]]
123 STAT. 25

been substituted for the Federal medical assistance
percentage (as defined in section 1905(b)).
``(B) Expenditures described.--For purposes of
subparagraph (A), the expenditures described in this
subparagraph are expenditures made after the date of the
enactment of this paragraph and during the period in
which funds are available to the qualifying State for
use under subparagraph (A), for the provision of medical
assistance to individuals residing in the State who are
eligible for medical assistance under the State plan
under title XIX or under a waiver of such plan and who
have not attained age 19 (or, if a State has so elected
under the State plan under title XIX, age 20 or 21), and
whose family income equals or exceeds 133 percent of the
poverty line but does not exceed the Medicaid applicable
income level.''.

(b) Repeal of Limitation on Availability of Fiscal Year 2009
Allotments.--Paragraph (2) of section 201(b) of the Medicare, Medicaid,
and SCHIP Extension Act of 2007 (Public Law 110-173) <> is repealed.
SEC. 108. ONE-TIME APPROPRIATION.

There is appropriated to the Secretary, out of any money in the
Treasury not otherwise appropriated, $11,706,000,000 to accompany the
allotment made for the period beginning on October 1, 2012, and ending
on March 31, 2013, under section 2104(a)(16)(A) of the Social Security
Act (42 U.S.C. 1397dd(a)(16)(A)) (as added by section 101), to remain
available until expended. Such amount shall be used to provide
allotments to States under paragraph (3) of section 2104(m) of the
Social Security Act (42 U.S.C. 1397dd(i)), as added by section 102, for
the first 6 months of fiscal year 2013 in the same manner as allotments
are provided under subsection (a)(16)(A) of such section 2104 and
subject to the same terms and conditions as apply to the allotments
provided from such subsection (a)(16)(A).
SEC. 109. IMPROVING FUNDING FOR THE TERRITORIES UNDER CHIP AND
MEDICAID.

Section 1108(g) (42 U.S.C. 1308(g)) is amended by adding at the end
the following new paragraph:
``(4) Exclusion of certain expenditures from payment
limits.--With respect to fiscal years beginning with fiscal year
2009, if Puerto Rico, the Virgin Islands, Guam, the Northern
Mariana Islands, or American Samoa qualify for a payment under
subparagraph (A)(i), (B), or (F) of section 1903(a)(3) for a
calendar quarter of such fiscal year, the payment shall not be
taken into account in applying subsection (f) (as increased in
accordance with paragraphs (1), (2), and (3) of this subsection)
to such commonwealth or territory for such fiscal year.''.

[[Page 26]]
123 STAT. 26

Subtitle B--Focus on Low-Income Children and Pregnant Women

SEC. 111. STATE OPTION TO COVER LOW-INCOME PREGNANT WOMEN UNDER
CHIP THROUGH A STATE PLAN AMENDMENT.

(a) In General.--Title XXI (42 U.S.C. 1397aa et seq.), as amended by
section 112(a), is amended by adding at the end the following new
section:
``SEC. 2112. <> OPTIONAL COVERAGE OF
TARGETED LOW-INCOME PREGNANT WOMEN
THROUGH A STATE PLAN AMENDMENT.

``(a) In General.--Subject to the succeeding provisions of this
section, a State may elect through an amendment to its State child
health plan under section 2102 to provide pregnancy-related assistance
under such plan for targeted low-income pregnant women.
``(b) Conditions.--A State may only elect the option under
subsection (a) if the following conditions are satisfied:
``(1) Minimum income eligibility levels for pregnant women
and children.--The State has established an income eligibility
level--
``(A) for pregnant women under subsection
(a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), or (l)(1)(A) of
section 1902 that is at least 185 percent (or such
higher percent as the State has in effect with regard to
pregnant women under this title) of the poverty line
applicable to a family of the size involved, but in no
case lower than the percent in effect under any such
subsection as of July 1, 2008; and
``(B) for children under 19 years of age under this
title (or title XIX) that is at least 200 percent of the
poverty line applicable to a family of the size
involved.
``(2) No chip income eligibility level for pregnant women
lower than the state's medicaid level.--The State does not apply
an effective income level for pregnant women under the State
plan amendment that is lower than the effective income level
(expressed as a percent of the poverty line and considering
applicable income disregards) specified under subsection
(a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), or (l)(1)(A) of section
1902, on the date of enactment of this paragraph to be eligible
for medical assistance as a pregnant woman.
``(3) No coverage for higher income pregnant women without
covering lower income pregnant women.--The State does not
provide coverage for pregnant women with higher family income
without covering pregnant women with a lower family income.
``(4) Application of requirements for coverage of targeted
low-income children.--The State provides pregnancy-related
assistance for targeted low-income pregnant women in the same
manner, and subject to the same requirements, as the State
provides child health assistance for targeted low-income
children under the State child health plan, and in addition to
providing child health assistance for such women.
``(5) No preexisting condition exclusion or waiting
period.--The State does not apply any exclusion of benefits

[[Page 27]]
123 STAT. 27

for pregnancy-related assistance based on any preexisting
condition or any waiting period (including any waiting period
imposed to carry out section 2102(b)(3)(C)) for receipt of such
assistance.
``(6) Application of cost-sharing protection.--The State
provides pregnancy-related assistance to a targeted low-income
woman consistent with the cost-sharing protections under section
2103(e) and applies the limitation on total annual aggregate
cost sharing imposed under paragraph (3)(B) of such section to
the family of such a woman.
``(7) No waiting list for children.--The State does not
impose, with respect to the enrollment under the State child
health plan of targeted low-income children during the quarter,
any enrollment cap or other numerical limitation on enrollment,
any waiting list, any procedures designed to delay the
consideration of applications for enrollment, or similar
limitation with respect to enrollment.

``(c) Option To Provide Presumptive Eligibility.--A State that
elects the option under subsection (a) and satisfies the conditions
described in subsection (b) may elect to apply section 1920 (relating to
presumptive eligibility for pregnant women) to the State child health
plan in the same manner as such section applies to the State plan under
title XIX.
``(d) Definitions.--For purposes of this section:
``(1) Pregnancy-related assistance.--The term `pregnancy-
related assistance' has the meaning given the term `child health
assistance' in section 2110(a) with respect to an individual
during the period described in paragraph (2)(A).
``(2) Targeted low-income pregnant woman.--The term
`targeted low-income pregnant woman' means an individual--
``(A) during pregnancy and through the end of the
month in which the 60-day period (beginning on the last
day of her pregnancy) ends;
``(B) whose family income exceeds 185 percent (or,
if higher, the percent applied under subsection
(b)(1)(A)) of the poverty line applicable to a family of
the size involved, but does not exceed the income
eligibility level established under the State child
health plan under this title for a targeted low-income
child; and
``(C) who satisfies the requirements of paragraphs
(1)(A), (1)(C), (2), and (3) of section 2110(b) in the
same manner as a child applying for child health
assistance would have to satisfy such requirements.

``(e) Automatic Enrollment for Children Born to Women Receiving
Pregnancy-Related Assistance.--If a child is born to a targeted low-
income pregnant woman who was receiving pregnancy-related assistance
under this section on the date of the child's birth, the child shall be
deemed to have applied for child health assistance under the State child
health plan and to have been found eligible for such assistance under
such plan or to have applied for medical assistance under title XIX and
to have been found eligible for such assistance under such title, as
appropriate, on the date of such birth and to remain eligible for such
assistance until the child attains 1 year of age. During the period in
which a child is deemed under the preceding sentence to be eligible for
child health or medical assistance, the child health or medical
assistance eligibility identification number of the mother shall also

[[Page 28]]
123 STAT. 28

serve as the identification number of the child, and all claims shall be
submitted and paid under such number (unless the State issues a separate
identification number for the child before such period expires).
``(f) States Providing Assistance Through Other Options.--
``(1) Continuation of other options for providing
assistance.--The option to provide assistance in accordance with
the preceding subsections of this section shall not limit any
other option for a State to provide--
``(A) child health assistance through the
application of sections 457.10, 457.350(b)(2),
457.622(c)(5), and 457.626(a)(3) of title 42, Code of
Federal Regulations (as in effect after the final rule
adopted by the Secretary and set forth at 67 Fed. Reg.
61956-61974 (October 2, 2002)), or
``(B) pregnancy-related services through the
application of any waiver authority (as in effect on
June 1, 2008).
``(2) Clarification of authority to provide postpartum
services.--Any State that provides child health assistance under
any authority described in paragraph (1) may continue to provide
such assistance, as well as postpartum services, through the end
of the month in which the 60-day period (beginning on the last
day of the pregnancy) ends, in the same manner as such
assistance and postpartum services would be provided if provided
under the State plan under title XIX, but only if the mother
would otherwise satisfy the eligibility requirements that apply
under the State child health plan (other than with respect to
age) during such period.
``(3) No inference.--Nothing in this subsection shall be
construed--
``(A) to infer congressional intent regarding the
legality or illegality of the content of the sections
specified in paragraph (1)(A); or
``(B) to modify the authority to provide pregnancy-
related services under a waiver specified in paragraph
(1)(B).''.

(b) Additional Conforming Amendments.--
(1) No cost sharing for pregnancy-related benefits.--Section
2103(e)(2) (42 U.S.C. 1397cc(e)(2)) is amended--
(A) in the heading, by inserting ``or pregnancy-
related assistance'' after ``preventive services''; and
(B) by inserting before the period at the end the
following: ``or for pregnancy-related assistance''.
(2) No waiting period.--Section 2102(b)(1)(B) (42 U.S.C.
1397bb(b)(1)(B)) is amended--
(A) in clause (i), by striking ``, and'' at the end
and inserting a semicolon;
(B) in clause (ii), by striking the period at the
end and inserting ``; and''; and
(C) by adding at the end the following new clause:
``(iii) may not apply a waiting period
(including a waiting period to carry out paragraph
(3)(C)) in the case of a targeted low-income
pregnant woman provided pregnancy-related
assistance under section 2112.''.

[[Page 29]]
123 STAT. 29

SEC. 112. PHASE-OUT OF COVERAGE FOR NONPREGNANT CHILDLESS ADULTS
UNDER CHIP; CONDITIONS FOR COVERAGE OF
PARENTS.

(a) Phase-Out Rules.--
(1) In general.--Title XXI (42 U.S.C. 1397aa et seq.) is
amended by adding at the end the following new section:
``SEC. 2111. <> PHASE-OUT OF COVERAGE FOR
NONPREGNANT CHILDLESS ADULTS; CONDITIONS
FOR COVERAGE OF PARENTS.

``(a) Termination of Coverage for Nonpregnant Childless Adults.--
``(1) No new chip waivers; automatic extensions at state
option through 2009.--Notwithstanding section 1115 or any other
provision of this title, except as provided in this subsection--
``(A) the Secretary shall not on or after the date
of the enactment of the Children's Health Insurance
Program Reauthorization Act of 2009, approve or renew a
waiver, experimental, pilot, or demonstration project
that would allow funds made available under this title
to be used to provide child health assistance or other
health benefits coverage to a nonpregnant childless
adult; and
``(B) <> notwithstanding the
terms and conditions of an applicable existing waiver,
the provisions of paragraph (2) shall apply for purposes
of any period beginning on or after January 1, 2010, in
determining the period to which the waiver applies, the
individuals eligible to be covered by the waiver, and
the amount of the Federal payment under this title.
``(2) Termination of chip coverage under applicable existing
waivers at the end of 2009.--
``(A) In general.--No funds shall be available under
this title for child health assistance or other health
benefits coverage that is provided to a nonpregnant
childless adult under an applicable existing waiver
after December 31, 2009.
``(B) Extension upon state request.--
<> If an applicable existing waiver
described in subparagraph (A) would otherwise expire
before January 1, 2010, notwithstanding the requirements
of subsections (e) and (f) of section 1115, a State may
submit, not later than September 30, 2009, a request to
the Secretary for an extension of the waiver. The
Secretary shall approve a request for an extension of an
applicable existing waiver submitted pursuant to this
subparagraph, but only through December 31, 2009.
``(C) Application of enhanced fmap.--The enhanced
FMAP determined under section 2105(b) shall apply to
expenditures under an applicable existing waiver for the
provision of child health assistance or other health
benefits coverage to a nonpregnant childless adult
during the period beginning on the date of the enactment
of this subsection and ending on December 31, 2009.
``(3) State option to apply for medicaid waiver to continue
coverage for nonpregnant childless adults.--
``(A) In general.-- <> Each State
for which coverage under an applicable existing waiver
is terminated under paragraph (2)(A) may submit, not
later than September 30,

[[Page 30]]
123 STAT. 30

2009, an application to the Secretary for a waiver under
section 1115 of the State plan under title XIX to
provide medical assistance to a nonpregnant childless
adult whose coverage is so terminated (in this
subsection referred to as a `Medicaid nonpregnant
childless adults waiver').
``(B) Deadline for approval.--The Secretary shall
make a decision to approve or deny an application for a
Medicaid nonpregnant childless adults waiver submitted
under subparagraph (A) within 90 days of the date of the
submission of the application. If no decision has been
made by the Secretary as of December 31, 2009, on the
application of a State for a Medicaid nonpregnant
childless adults waiver that was submitted to the
Secretary by September 30, 2009, the application shall
be deemed approved.
``(C) Standard for budget neutrality.--The budget
neutrality requirement applicable with respect to
expenditures for medical assistance under a Medicaid
nonpregnant childless adults waiver shall--
``(i) in the case of fiscal year 2010, allow
expenditures for medical assistance under title
XIX for all such adults to not exceed the total
amount of payments made to the State under
paragraph (2)(B) for fiscal year 2009, increased
by the percentage increase (if any) in the
projected nominal per capita amount of National
Health Expenditures for 2010 over 2009, as most
recently published by the Secretary; and
``(ii) in the case of any succeeding fiscal
year, allow such expenditures to not exceed the
amount in effect under this subparagraph for the
preceding fiscal year, increased by the percentage
increase (if any) in the projected nominal per
capita amount of National Health Expenditures for
the calendar year that begins during the year
involved over the preceding calendar year, as most
recently published by the Secretary.

``(b) Rules and Conditions for Coverage of Parents of Targeted Low-
Income Children.--
``(1) Two-year period; automatic extension at state option
through fiscal year 2011.--
``(A) No new chip waivers.--Notwithstanding section
1115 or any other provision of this title, except as
provided in this subsection--
``(i) the Secretary shall not on or after the
date of the enactment of the Children's Health
Insurance Program Reauthorization Act of 2009
approve or renew a waiver, experimental, pilot, or
demonstration project that would allow funds made
available under this title to be used to provide
child health assistance or other health benefits
coverage to a parent of a targeted low-income
child; and
``(ii) <> notwithstanding the terms and conditions
of an applicable existing waiver, the provisions
of paragraphs (2) and (3) shall apply for purposes
of any fiscal year beginning on or after October
1, 2011, in determining the period to which the
waiver applies, the individuals eligible to be
covered by the waiver, and the amount of the
Federal payment under this title.

[[Page 31]]
123 STAT. 31

``(B) Extension upon state request.--If an
applicable existing waiver described in subparagraph (A)
would otherwise expire before October 1, 2011, and the
State requests an extension of such waiver, the
Secretary shall grant such an extension, but only,
subject to paragraph (2)(A), through September 30, 2011.
``(C) Application of enhanced fmap.--The enhanced
FMAP determined under section 2105(b) shall apply to
expenditures under an applicable existing waiver for the
provision of child health assistance or other health
benefits coverage to a parent of a targeted low-income
child during the third and fourth quarters of fiscal
year 2009 and during fiscal years 2010 and 2011.
``(2) Rules for fiscal years 2012 through 2013.--
``(A) Payments for coverage limited to block grant
funded from state allotment.--Any State that provides
child health assistance or health benefits coverage
under an applicable existing waiver for a parent of a
targeted low-income child may elect to continue to
provide such assistance or coverage through fiscal year
2012 or 2013, subject to the same terms and conditions
that applied under the applicable existing waiver,
unless otherwise modified in subparagraph (B).
``(B) Terms and conditions.--
``(i) Block grant set aside from state
allotment.-- <> If
the State makes an election under subparagraph
(A), the Secretary shall set aside for the State
for each such fiscal year an amount equal to the
Federal share of 110 percent of the State's
projected expenditures under the applicable
existing waiver for providing child health
assistance or health benefits coverage to all
parents of targeted low-income children enrolled
under such waiver for the fiscal year (as
certified by the State and submitted to the
Secretary by not later than August 31 of the
preceding fiscal year). In the case of fiscal year
2013, the set aside for any State shall be
computed separately for each period described in
subparagraphs (A) and (B) of section 2104(a)(16)
and any reduction in the allotment for either such
period under section 2104(m)(4) shall be allocated
on a pro rata basis to such set aside.
``(ii) Payments from block grant.--The
Secretary shall pay the State from the amount set
aside under clause (i) for the fiscal year, an
amount for each quarter of such fiscal year equal
to the applicable percentage determined under
clause (iii) or (iv) for expenditures in the
quarter for providing child health assistance or
other health benefits coverage to a parent of a
targeted low-income child.
``(iii) Enhanced fmap only in fiscal year 2012
for states with significant child outreach or that
achieve child coverage benchmarks; fmap for any
other states.--For purposes of clause (ii), the
applicable percentage for any quarter of fiscal
year 2012 is equal to--
``(I) the enhanced FMAP determined
under section 2105(b) in the case of a
State that meets

[[Page 32]]
123 STAT. 32

the outreach or coverage benchmarks
described in any of subparagraph (A),
(B), or (C) of paragraph (3) for fiscal
year 2011; or
``(II) the Federal medical
assistance percentage (as determined
under section 1905(b) without regard to
clause (4) of such section) in the case
of any other State.
``(iv) Amount of federal matching payment in
2013.--For purposes of clause (ii), the applicable
percentage for any quarter of fiscal year 2013 is
equal to--
``(I) the REMAP percentage if--
``(aa) the applicable
percentage for the State under
clause (iii) was the enhanced
FMAP for fiscal year 2012; and
``(bb) the State met either
of the coverage benchmarks
described in subparagraph (B) or
(C) of paragraph (3) for fiscal
year 2012; or
``(II) the Federal medical
assistance percentage (as so determined)
in the case of any State to which
subclause (I) does not apply.
For purposes of subclause (I), the REMAP
percentage is the percentage which is the sum of
such Federal medical assistance percentage and a
number of percentage points equal to one-half of
the difference between such Federal medical
assistance percentage and such enhanced FMAP.
``(v) No federal payments other than from
block grant set aside.--No payments shall be made
to a State for expenditures described in clause
(ii) after the total amount set aside under clause
(i) for a fiscal year has been paid to the State.
``(vi) No increase in income eligibility level
for parents.--No payments shall be made to a State
from the amount set aside under clause (i) for a
fiscal year for expenditures for providing child
health assistance or health benefits coverage to a
parent of a targeted low-income child whose family
income exceeds the income eligibility level
applied under the applicable existing waiver to
parents of targeted low-income children on the
date of enactment of the Children's Health
Insurance Program Reauthorization Act of 2009.
``(3) Outreach or coverage benchmarks.--For purposes of
paragraph (2), the outreach or coverage benchmarks described in
this paragraph are as follows:
``(A) Significant child outreach campaign.--The
State--
``(i) was awarded a grant under section 2113
for fiscal year 2011;
``(ii) implemented 1 or more of the enrollment
and retention provisions described in section
2105(a)(4) for such fiscal year; or
``(iii) has submitted a specific plan for
outreach for such fiscal year.
``(B) High-performing state.--The State, on the
basis of the most timely and accurate published
estimates of the Bureau of the Census, ranks in the
lowest \1/3\ of States

[[Page 33]]
123 STAT. 33

in terms of the State's percentage of low-income
children without health insurance.
``(C) State increasing enrollment of low-income
children.--The State qualified for a performance bonus
payment under section 2105(a)(3)(B) for the most recent
fiscal year applicable under such section.
``(4) Rules of construction.--Nothing in this subsection
shall be construed as prohibiting a State from submitting an
application to the Secretary for a waiver under section 1115 of
the State plan under title XIX to provide medical assistance to
a parent of a targeted low-income child that was provided child
health assistance or health benefits coverage under an
applicable existing waiver.

``(c) Applicable Existing Waiver.--For purposes of this section--
``(1) In general.--The term `applicable existing waiver'
means a waiver, experimental, pilot, or demonstration project
under section 1115, grandfathered under section 6102(c)(3) of
the Deficit Reduction Act of 2005, or otherwise conducted under
authority that--
``(A) would allow funds made available under this
title to be used to provide child health assistance or
other health benefits coverage to--
``(i) a parent of a targeted low-income child;
``(ii) a nonpregnant childless adult; or
``(iii) individuals described in both clauses
(i) and (ii); and
``(B) was in effect during fiscal year 2009.
``(2) Definitions.--
``(A) Parent.--The term `parent' includes a
caretaker relative (as such term is used in carrying out
section 1931) and a legal guardian.
``(B) Nonpregnant childless adult.--The term
`nonpregnant childless adult' has the meaning given such
term by section 2107(f).''.
(2) Conforming amendments.--
(A) Section 2107(f) (42 U.S.C. 1397gg(f)) is
amended--
(i) by striking ``, the Secretary'' and
inserting ``:
``(1) The Secretary'';
(ii) in the first sentence, by inserting ``or
a parent (as defined in section 2111(c)(2)(A)),
who is not pregnant, of a targeted low-income
child'' before the period;
(iii) by striking the second sentence; and
(iv) by adding at the end the following new
paragraph:
``(2) The Secretary may not approve, extend, renew, or amend
a waiver, experimental, pilot, or demonstration project with
respect to a State after the date of enactment of the Children's
Health Insurance Program Reauthorization Act of 2009 that would
waive or modify the requirements of section 2111.''.
(B) Section 6102(c) of the Deficit Reduction Act of
2005 (Public Law 109-171; 120 Stat. 131) <> is amended by striking ``Nothing'' and
inserting ``Subject to section 2111 of the Social
Security Act, as added by section 112 of the Children's
Health Insurance Program Reauthorization Act of 2009,
nothing''.

[[Page 34]]
123 STAT. 34

(b) GAO Study and Report.--
(1) In general.--The Comptroller General of the United
States shall conduct a study of whether--
(A) the coverage of a parent, a caretaker relative
(as such term is used in carrying out section 1931), or
a legal guardian of a targeted low-income child under a
State health plan under title XXI of the Social Security
Act increases the enrollment of, or the quality of care
for, children, and
(B) such parents, relatives, and legal guardians who
enroll in such a plan are more likely to enroll their
children in such a plan or in a State plan under title
XIX of such Act.
(2) Report.--Not later than 2 years after the date of the
enactment of this Act, the Comptroller General shall report the
results of the study to the Committee on Finance of the Senate
and the Committee on Energy and Commerce of the House of
Representatives, including recommendations (if any) for changes
in legislation.
SEC. 113. ELIMINATION OF COUNTING MEDICAID CHILD PRESUMPTIVE
ELIGIBILITY COSTS AGAINST TITLE XXI
ALLOTMENT.

(a) In General.--Section 2105(a)(1) (42 U.S.C. 1397ee(a)(1)) is
amended--
(1) in the matter preceding subparagraph (A), by striking
``(or, in the case of expenditures described in subparagraph
(B), the Federal medical assistance percentage (as defined in
the first sentence of section 1905(b)))''; and
(2) by striking subparagraph (B) and inserting the following
new subparagraph:
``(B) [reserved]''.

(b) Amendments to Medicaid.--
(1) Eligibility of a newborn.--Section 1902(e)(4) (42 U.S.C.
1396a(e)(4)) is amended in the first sentence by striking ``so
long as the child is a member of the woman's household and the
woman remains (or would remain if pregnant) eligible for such
assistance''.
(2) Application of qualified entities to presumptive
eligibility for pregnant women under medicaid.--Section 1920(b)
(42 U.S.C. 1396r-1(b)) is amended by adding after paragraph (2)
the following flush sentence:

``The term `qualified provider' also includes a qualified entity, as
defined in section 1920A(b)(3).''.
SEC. 114. LIMITATION ON MATCHING RATE FOR STATES THAT PROPOSE TO
COVER CHILDREN WITH EFFECTIVE FAMILY
INCOME THAT EXCEEDS 300 PERCENT OF THE
POVERTY LINE.

(a) FMAP Applied to Expenditures.--Section 2105(c) (42 U.S.C.
1397ee(c)) is amended by adding at the end the following new paragraph:
``(8) Limitation on matching rate for expenditures for child
health assistance provided to children whose effective family
income exceeds 300 percent of the poverty line.--
``(A) FMAP applied to expenditures.--Except as
provided in subparagraph (B), for fiscal years beginning
with fiscal year 2009, the Federal medical assistance
percentage

[[Page 35]]
123 STAT. 35

(as determined under section 1905(b) without regard to
clause (4) of such section) shall be substituted for the
enhanced FMAP under subsection (a)(1) with respect to
any expenditures for providing child health assistance
or health benefits coverage for a targeted low-income
child whose effective family income would exceed 300
percent of the poverty line but for the application of a
general exclusion of a block of income that is not
determined by type of expense or type of income.
``(B) Exception.--Subparagraph (A) shall not apply
to any State that, on the date of enactment of the
Children's Health Insurance Program Reauthorization Act
of 2009, has an approved State plan amendment or waiver
to provide, or has enacted a State law to submit a State
plan amendment to provide, expenditures described in
such subparagraph under the State child health plan.''.

(b) <> Rule of Construction.--Nothing in
the amendments made by this section shall be construed as--
(1) changing any income eligibility level for children under
title XXI of the Social Security Act; or
(2) changing the flexibility provided States under such
title to establish the income eligibility level for targeted
low-income children under a State child health plan and the
methodologies used by the State to determine income or assets
under such plan.
SEC. 115. <> STATE AUTHORITY UNDER
MEDICAID.

Notwithstanding any other provision of law, including the fourth
sentence of subsection (b) of section 1905 of the Social Security Act
(42 U.S.C. 1396d) or subsection (u) of such section, at State option,
the Secretary shall provide the State with the Federal medical
assistance percentage determined for the State for Medicaid with respect
to expenditures described in section 1905(u)(2)(A) of such Act or
otherwise made to provide medical assistance under Medicaid to a child
who could be covered by the State under CHIP.

TITLE II--OUTREACH AND ENROLLMENT

Subtitle A--Outreach and Enrollment Activities

SEC. 201. GRANTS AND ENHANCED ADMINISTRATIVE FUNDING FOR OUTREACH
AND ENROLLMENT.

(a) Grants.--Title XXI (42 U.S.C. 1397aa et seq.), as amended by
section 111, is amended by adding at the end the following:
``SEC. 2113. <> GRANTS TO IMPROVE OUTREACH
AND ENROLLMENT.

``(a) Outreach and Enrollment Grants; National Campaign.--
``(1) In general.--From the amounts appropriated under
subsection (g), subject to paragraph (2), the Secretary shall
award grants to eligible entities during the period of fiscal
years 2009 through 2013 to conduct outreach and enrollment

[[Page 36]]
123 STAT. 36

efforts that are designed to increase the enrollment and
participation of eligible children under this title and title
XIX.
``(2) Ten percent set aside for national enrollment
campaign.--An amount equal to 10 percent of such amounts shall
be used by the Secretary for expenditures during such period to
carry out a national enrollment campaign in accordance with
subsection (h).

``(b) Priority for Award of Grants.--
``(1) In general.--In awarding grants under subsection (a),
the Secretary shall give priority to eligible entities that--
``(A) propose to target geographic areas with high
rates of--
``(i) eligible but unenrolled children,
including such children who reside in rural areas;
or
``(ii) racial and ethnic minorities and health
disparity populations, including those proposals
that address cultural and linguistic barriers to
enrollment; and
``(B) submit the most demonstrable evidence required
under paragraphs (1) and (2) of subsection (c).
``(2) Ten percent set aside for outreach to indian
children.--An amount equal to 10 percent of the funds
appropriated under subsection (g) shall be used by the Secretary
to award grants to Indian Health Service providers and urban
Indian organizations receiving funds under title V of the Indian
Health Care Improvement Act (25 U.S.C. 1651 et seq.) for
outreach to, and enrollment of, children who are Indians.

``(c) Application.--An eligible entity that desires to receive a
grant under subsection (a) shall submit an application to the Secretary
in such form and manner, and containing such information, as the
Secretary may decide. Such application shall include--
``(1) evidence demonstrating that the entity includes
members who have access to, and credibility with, ethnic or low-
income populations in the communities in which activities funded
under the grant are to be conducted;
``(2) evidence demonstrating that the entity has the ability
to address barriers to enrollment, such as lack of awareness of
eligibility, stigma concerns and punitive fears associated with
receipt of benefits, and other cultural barriers to applying for
and receiving child health assistance or medical assistance;
``(3) specific quality or outcomes performance measures to
evaluate the effectiveness of activities funded by a grant
awarded under this section; and
``(4) an assurance that the eligible entity shall--
``(A) conduct an assessment of the effectiveness of
such activities against the performance measures;
``(B) cooperate with the collection and reporting of
enrollment data and other information in order for the
Secretary to conduct such assessments; and
``(C) in the case of an eligible entity that is not
the State, provide the State with enrollment data and
other information as necessary for the State to make
necessary projections of eligible children and pregnant
women.

``(d) Dissemination of Enrollment Data and Information Determined
From Effectiveness Assessments; Annual Report.--The Secretary shall--

[[Page 37]]
123 STAT. 37

``(1) make publicly available the enrollment data and
information collected and reported in accordance with subsection
(c)(4)(B); and
``(2) submit an annual report to Congress on the outreach
and enrollment activities conducted with funds appropriated
under this section.

``(e) Maintenance of Effort for States Awarded Grants; No Match
Required for Any Eligible Entity Awarded a Grant.--
``(1) State maintenance of effort.--In the case of a State
that is awarded a grant under this section, the State share of
funds expended for outreach and enrollment activities under the
State child health plan shall not be less than the State share
of such funds expended in the fiscal year preceding the first
fiscal year for which the grant is awarded.
``(2) No matching requirement.--No eligible entity awarded a
grant under subsection (a) shall be required to provide any
matching funds as a condition for receiving the grant.

``(f) Definitions.--In this section:
``(1) Eligible entity.--The term `eligible entity' means any
of the following:
``(A) A State with an approved child health plan
under this title.
``(B) A local government.
``(C) An Indian tribe or tribal consortium, a tribal
organization, an urban Indian organization receiving
funds under title V of the Indian Health Care
Improvement Act (25 U.S.C. 1651 et seq.), or an Indian
Health Service provider.
``(D) A Federal health safety net organization.
``(E) A national, State, local, or community-based
public or nonprofit private organization, including
organizations that use community health workers or
community-based doula programs.
``(F) A faith-based organization or consortia, to
the extent that a grant awarded to such an entity is
consistent with the requirements of section 1955 of the
Public Health Service Act (42 U.S.C. 300x-65) relating
to a grant award to nongovernmental entities.
``(G) An elementary or secondary school.
``(2) Federal health safety net organization.--The term
`Federal health safety net organization' means--
``(A) a Federally-qualified health center (as
defined in section 1905(l)(2)(B));
``(B) a hospital defined as a disproportionate share
hospital for purposes of section 1923;
``(C) a covered entity described in section
340B(a)(4) of the Public Health Service Act (42 U.S.C.
256b(a)(4)); and
``(D) any other entity or consortium that serves
children under a federally funded program, including the
special supplemental nutrition program for women,
infants, and children (WIC) established under section 17
of the Child Nutrition Act of 1966 (42 U.S.C. 1786), the
Head Start and Early Head Start programs under the Head
Start Act (42 U.S.C. 9801 et seq.), the school lunch
program

[[Page 38]]
123 STAT. 38

established under the Richard B. Russell National School
Lunch Act, and an elementary or secondary school.
``(3) Indians; indian tribe; tribal organization; urban
indian organization.--The terms `Indian', `Indian tribe',
`tribal organization', and `urban Indian organization' have the
meanings given such terms in section 4 of the Indian Health Care
Improvement Act (25 U.S.C. 1603).
``(4) Community health worker.--The term `community health
worker' means an individual who promotes health or nutrition
within the community in which the individual resides--
``(A) by serving as a liaison between communities
and health care agencies;
``(B) by providing guidance and social assistance to
community residents;
``(C) by enhancing community residents' ability to
effectively communicate with health care providers;
``(D) by providing culturally and linguistically
appropriate health or nutrition education;
``(E) by advocating for individual and community
health or nutrition needs; and
``(F) by providing referral and followup services.

``(g) Appropriation.--There is appropriated, out of any money in the
Treasury not otherwise appropriated, $100,000,000 for the period of
fiscal years 2009 through 2013, for the purpose of awarding grants under
this section. Amounts appropriated and paid under the authority of this
section shall be in addition to amounts appropriated under section 2104
and paid to States in accordance with section 2105, including with
respect to expenditures for outreach activities in accordance with
subsections (a)(1)(D)(iii) and (c)(2)(C) of that section.
``(h) National Enrollment Campaign.--From the amounts made available
under subsection (a)(2), the Secretary shall develop and implement a
national enrollment campaign to improve the enrollment of underserved
child populations in the programs established under this title and title
XIX. Such campaign may include--
``(1) the establishment of partnerships with the Secretary
of Education and the Secretary of Agriculture to develop
national campaigns to link the eligibility and enrollment
systems for the assistance programs each Secretary administers
that often serve the same children;
``(2) the integration of information about the programs
established under this title and title XIX in public health
awareness campaigns administered by the Secretary;
``(3) increased financial and technical support for
enrollment hotlines maintained by the Secretary to ensure that
all States participate in such hotlines;
``(4) the establishment of joint public awareness outreach
initiatives with the Secretary of Education and the Secretary of
Labor regarding the importance of health insurance to building
strong communities and the economy;
``(5) the development of special outreach materials for
Native Americans or for individuals with limited English
proficiency; and
``(6) such other outreach initiatives as the Secretary
determines would increase public awareness of the programs under
this title and title XIX.''.

[[Page 39]]
123 STAT. 39

(b) Enhanced Administrative Funding for Translation or
Interpretation Services Under CHIP and Medicaid.--
(1) CHIP.--Section 2105(a)(1) (42 U.S.C. 1397ee(a)(1)), as
amended by section 113, is amended--
(A) in the matter preceding subparagraph (A), by
inserting ``(or, in the case of expenditures described
in subparagraph (D)(iv), the higher of 75 percent or the
sum of the enhanced FMAP plus 5 percentage points)''
after ``enhanced FMAP''; and
(B) in subparagraph (D)--
(i) in clause (iii), by striking ``and'' at
the end;
(ii) by redesignating clause (iv) as clause
(v); and
(iii) by inserting after clause (iii) the
following new clause:
``(iv) for translation or interpretation
services in connection with the enrollment of,
retention of, and use of services under this title
by, individuals for whom English is not their
primary language (as found necessary by the
Secretary for the proper and efficient
administration of the State plan); and''.
(2) Medicaid.--
(A) Use of medicaid funds.--Section 1903(a)(2) (42
U.S.C. 1396b(a)(2)) is amended by adding at the end the
following new subparagraph:
``(E) an amount equal to 75 percent of so much of the sums
expended during such quarter (as found necessary by the
Secretary for the proper and efficient administration of the
State plan) as are attributable to translation or interpretation
services in connection with the enrollment of, retention of, and
use of services under this title by, children of families for
whom English is not the primary language; plus''.
(B) Use of community health workers for outreach
activities.--
(i) In general.--Section 2102(c)(1) of such
Act (42 U.S.C. 1397bb(c)(1)) is amended by
inserting ``(through community health workers and
others)'' after ``Outreach''.
(ii) In federal evaluation.--Section
2108(c)(3)(B) of such Act (42 U.S.C.
1397hh(c)(3)(B)) is amended by inserting ``(such
as through community health workers and others)''
after ``including practices''.
SEC. 202. INCREASED OUTREACH AND ENROLLMENT OF INDIANS.

(a) In General.--Section 1139 (42 U.S.C. 1320b-9) is amended to read
as follows:
``SEC. 1139. IMPROVED ACCESS TO, AND DELIVERY OF, HEALTH CARE FOR
INDIANS UNDER TITLES XIX AND XXI.

``(a) Agreements With States for Medicaid and CHIP Outreach On or
Near Reservations To Increase the Enrollment of Indians in Those
Programs.--
``(1) In general.--In order to improve the access of Indians
residing on or near a reservation to obtain benefits under the
Medicaid and State children's health insurance programs
established under titles XIX and XXI, the Secretary shall
encourage the State to take steps to provide for enrollment on
or near the reservation. Such steps may include outreach efforts
such as the outstationing of eligibility workers, entering

[[Page 40]]
123 STAT. 40

into agreements with the Indian Health Service, Indian Tribes,
Tribal Organizations, and Urban Indian Organizations to provide
outreach, education regarding eligibility and benefits,
enrollment, and translation services when such services are
appropriate.
``(2) Construction.--Nothing in paragraph (1) shall be
construed as affecting arrangements entered into between States
and the Indian Health Service, Indian Tribes, Tribal
Organizations, or Urban Indian Organizations for such Service,
Tribes, or Organizations to conduct administrative activities
under such titles.

``(b) Requirement To Facilitate Cooperation.--The Secretary, acting
through the Centers for Medicare & Medicaid Services, shall take such
steps as are necessary to facilitate cooperation with, and agreements
between, States and the Indian Health Service, Indian Tribes, Tribal
Organizations, or Urban Indian Organizations with respect to the
provision of health care items and services to Indians under the
programs established under title XIX or XXI.
``(c) Definition of Indian; Indian Tribe; Indian Health Program;
Tribal Organization; Urban Indian Organization.--In this section, the
terms `Indian', `Indian Tribe', `Indian Health Program', `Tribal
Organization', and `Urban Indian Organization' have the meanings given
those terms in section 4 of the Indian Health Care Improvement Act.''.
(b) Nonapplication of 10 Percent Limit on Outreach and Certain Other
Expenditures.--Section 2105(c)(2) (42 U.S.C. 1397ee(c)(2)) is amended by
adding at the end the following:
``(C) Nonapplication to certain expenditures.--The
limitation under subparagraph (A) shall not apply with
respect to the following expenditures:
``(i) Expenditures to increase outreach to,
and the enrollment of, indian children under this
title and title xix.--Expenditures for outreach
activities to families of Indian children likely
to be eligible for child health assistance under
the plan or medical assistance under the State
plan under title XIX (or under a waiver of such
plan), to inform such families of the availability
of, and to assist them in enrolling their children
in, such plans, including such activities
conducted under grants, contracts, or agreements
entered into under section 1139(a).''.
SEC. 203. STATE OPTION TO RELY ON FINDINGS FROM AN EXPRESS LANE
AGENCY TO CONDUCT SIMPLIFIED ELIGIBILITY
DETERMINATIONS.

(a) Application Under Medicaid and CHIP Programs.--
(1) Medicaid.--Section 1902(e) (42 U.S.C. 1396a(e)) is
amended by adding at the end the following:

``(13) Express Lane Option.--
``(A) In general.--
``(i) Option to use a finding from an express lane
agency.--At the option of the State, the State plan may
provide that in determining eligibility under this title
for a child (as defined in subparagraph (G)), the State
may rely on a finding made within a reasonable period
(as determined by the State) from an Express Lane agency

[[Page 41]]
123 STAT. 41

(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

[[Page 42]]
123 STAT. 42

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.

[[Page 43]]
123 STAT. 43

``(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

[[Page 44]]
123 STAT. 44

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

[[Page 45]]
123 STAT. 45

except that in applying this paragraph under title XXI,
there shall be substituted for references to provisions
of this title corresponding provisions within title XXI.
``(F) Express lane agency.--
``(i) In general.--In this paragraph, the term
`Express Lane agency' means a public agency that--
``(I) is determined by the State Medicaid
agency or the State CHIP agency (as applicable) to
be capable of making the determinations of one or
more eligibility requirements described in
subparagraph (A)(i);
``(II) is identified in the State Medicaid
plan or the State CHIP plan; and
``(III) notifies the child's family--
``(aa) of the information which
shall be disclosed in accordance with
this paragraph;
``(bb) that the information
disclosed will be used solely for
purposes of determining eligibility for
medical assistance under the State
Medicaid plan or for child health
assistance under the State CHIP plan;
and
``(cc) that the family may elect to
not have the information disclosed for
such purposes; and
``(IV) enters into, or is subject to, an
interagency agreement to limit the disclosure and
use of the information disclosed.
``(ii) Inclusion of specific public agencies.--Such
term includes the following:
``(I) A public agency that determines
eligibility for assistance under any of the
following:
``(aa) The temporary assistance for
needy families program funded under part
A of title IV.
``(bb) A State program funded under
part D of title IV.
``(cc) The State Medicaid plan.
``(dd) The State CHIP plan.
``(ee) The Food 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.

[[Page 46]]
123 STAT. 46

``(III) A public agency that is subject to an
interagency agreement limiting the disclosure and
use of the information disclosed for purposes of
determining eligibility under the State Medicaid
plan or the State CHIP plan.
``(iii) Exclusions.--Such term does not include an
agency that determines eligibility for a program
established under the Social Services Block Grant
established under title XX or a private, for-profit
organization.
``(iv) Rules of construction.--Nothing in this
paragraph shall be construed as--
``(I) exempting a State Medicaid agency from
complying with the requirements of section
1902(a)(4) relating to merit-based personnel
standards for employees of the State Medicaid
agency and safeguards against conflicts of
interest); or
``(II) authorizing a State Medicaid agency
that elects to use Express Lane agencies under
this subparagraph to use the Express Lane option
to avoid complying with such requirements for
purposes of making eligibility determinations
under the State Medicaid plan.
``(v) Additional definitions.--In this paragraph:
``(I) State.--The term `State' means 1 of the
50 States or the District of Columbia.
``(II) State chip agency.--The term `State
CHIP agency' means the State agency responsible
for administering the State CHIP plan.
``(III) State chip plan.--The term `State CHIP
plan' means the State child health plan
established under title XXI and includes any
waiver of such plan.
``(IV) State medicaid agency.--The term `State
Medicaid agency' means the State agency
responsible for administering the State Medicaid
plan.
``(V) State medicaid plan.--The term `State
Medicaid plan' means the State plan established
under title XIX and includes any waiver of such
plan.
``(G) Child defined.--For purposes of this paragraph, the
term `child' means an individual under 19 years of age, or, at
the option of a State, such higher age, not to exceed 21 years
of age, as the State may elect.
``(H) 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,
2013.''.
(2) CHIP.--Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is
amended by redesignating subparagraphs (B), (C), and (D) as
subparagraphs (C), (D), and (E), respectively, and by inserting
after subparagraph (A) the following new subparagraph:
``(B) Section 1902(e)(13) (relating to the State
option to rely on findings from an Express Lane agency
to help evaluate a child's eligibility for medical
assistance).''.

(b) Evaluation and Report.--

[[Page 47]]
123 STAT. 47

(1) <> Evaluation.--The Secretary
shall conduct, by grant, contract, or interagency agreement, a
comprehensive, independent evaluation of the option provided
under the amendments made by subsection (a). Such evaluation
shall include an analysis of the effectiveness of the option,
and shall include--
(A) <> obtaining a statistically
valid sample of the children who were enrolled in the
State Medicaid plan or the State CHIP plan through
reliance on a finding made by an Express Lane agency and
determining the percentage of children who were
erroneously enrolled in such plans;
(B) determining whether enrolling children in such
plans through reliance on a finding made by an Express
Lane agency improves the ability of a State to identify
and enroll low-income, uninsured children who are
eligible but not enrolled in such plans;
(C) evaluating the administrative costs or savings
related to identifying and enrolling children in such
plans through reliance on such findings, and the extent
to which such costs differ from the costs that the State
otherwise would have incurred to identify and enroll
low-income, uninsured children who are eligible but not
enrolled in such plans; and
(D) <> any recommendations
for legislative or administrative changes that would
improve the effectiveness of enrolling children in such
plans through reliance on such findings.
(2) Report to congress.--Not later than September 30, 2012,
the Secretary shall submit a report to Congress on the results
of the evaluation under paragraph (1).
(3) Funding.--
(A) In general.--Out of any funds in the Treasury
not otherwise appropriated, there is appropriated to the
Secretary to carry out the evaluation under this
subsection $5,000,000 for the period of fiscal years
2009 through 2012.
(B) Budget authority.--Subparagraph (A) constitutes
budget authority in advance of appropriations Act and
represents the obligation of the Federal Government to
provide for the payment of such amount to conduct the
evaluation under this subsection.

(c) Electronic Transmission of Information.--Section 1902 (42 U.S.C.
1396a) is amended by adding at the end the following new subsection:
``(dd) Electronic Transmission of Information.--If the State agency
determining eligibility for medical assistance under this title or child
health assistance under title XXI verifies an element of eligibility
based on information from an Express Lane Agency (as defined in
subsection (e)(13)(F)), or from another public agency, then the
applicant's signature under penalty of perjury shall not be required as
to such element. Any signature requirement for an application for
medical assistance may be satisfied through an electronic signature, as
defined in section 1710(1) of the Government Paperwork Elimination Act
(44 U.S.C. 3504 note). The requirements of subparagraphs (A) and (B) of
section 1137(d)(2) may be met through evidence in digital or electronic
form.''.
(d) Authorization of Information Disclosure.--

[[Page 48]]
123 STAT. 48

(1) In general.--Title XIX is amended by adding at the end
the following new section:
``SEC. 1942. <> AUTHORIZATION TO
RECEIVE RELEVANT INFORMATION.

``(a) In General.--Notwithstanding any other provision of law, a
Federal or State agency or private entity in possession of the sources
of data directly relevant to eligibility determinations under this title
(including eligibility files maintained by Express Lane agencies
described in section 1902(e)(13)(F), information described in paragraph
(2) or (3) of section 1137(a), vital records information about births in
any State, and information described in sections 453(i) and
1902(a)(25)(I)) is authorized to convey such data or information to the
State agency administering the State plan under this title, to the
extent such conveyance meets the requirements of subsection (b).
``(b) Requirements for Conveyance.--Data or information may be
conveyed pursuant to subsection (a) only if the following requirements
are met:
``(1) The individual whose circumstances are described in
the data or information (or such individual's parent, guardian,
caretaker relative, or authorized representative) has either
provided advance consent to disclosure or has not objected to
disclosure after receiving advance notice of disclosure and a
reasonable opportunity to object.
``(2) Such data or information are used solely for the
purposes of--
``(A) identifying individuals who are eligible or
potentially eligible for medical assistance under this
title and enrolling or attempting to enroll such
individuals in the State plan; and
``(B) verifying the eligibility of individuals for
medical assistance under the State plan.
``(3) An interagency or other agreement, consistent with
standards developed by the Secretary--
``(A) prevents the unauthorized use, disclosure, or
modification of such data and otherwise meets applicable
Federal requirements safeguarding privacy and data
security; and
``(B) requires the State agency administering the
State plan to use the data and information obtained
under this section to seek to enroll individuals in the
plan.

``(c) Penalties for Improper Disclosure.--
``(1) Civil money penalty.--A private entity described in
the subsection (a) that publishes, discloses, or makes known in
any manner, or to any extent not authorized by Federal law, any
information obtained under this section is subject to a civil
money penalty in an amount equal to $10,000 for each such
unauthorized publication or
disclosure. <> The provisions of section
1128A (other than subsections (a) and (b) and the second
sentence of subsection (f)) shall apply to a civil money penalty
under this paragraph in the same manner as such provisions apply
to a penalty or proceeding under section 1128A(a).
``(2) Criminal penalty.--A private entity described in the
subsection (a) that willfully publishes, discloses, or makes
known in any manner, or to any extent not authorized by Federal
law, any information obtained under this section shall

[[Page 49]]
123 STAT. 49

be fined not more than $10,000 or imprisoned not more than 1
year, or both, for each such unauthorized publication or
disclosure.

``(d) Rule of Construction.--The limitations and requirements that
apply to disclosure pursuant to this section shall not be construed to
prohibit the conveyance or disclosure of data or information otherwise
permitted under Federal law (without regard to this section).''.
(2) Conforming amendment to title xxi.--Section 2107(e)(1)
(42 U.S.C. 1397gg(e)(1)), as amended by subsection (a)(2), is
amended by adding at the end the following new subparagraph:
``(F) Section 1942 (relating to authorization to
receive data directly relevant to eligibility
determinations).''.
(3) Conforming amendment to provide access to data about
enrollment in insurance for purposes of evaluating applications
and for chip.--Section 1902(a)(25)(I)(i) (42 U.S.C.
1396a(a)(25)(I)(i)) is amended--
(A) by inserting ``(and, at State option,
individuals who apply or whose eligibility for medical
assistance is being evaluated in accordance with section
1902(e)(13)(D))'' after ``with respect to individuals
who are eligible''; and
(B) by inserting ``under this title (and, at State
option, child health assistance under title XXI)'' after
``the State plan''.

(e) <> Authorization for States Electing
Express Lane Option To Receive Certain Data Directly Relevant To
Determining Eligibility and Correct Amount of Assistance.--
<> The Secretary shall enter into such agreements as
are necessary to permit a State that elects the Express Lane option
under section 1902(e)(13) of the Social Security Act to receive data
directly relevant to eligibility determinations and determining the
correct amount of benefits under a State child health plan under CHIP or
a State plan under Medicaid from the following:
(1) The National Directory of New Hires established under
section 453(i) of the Social Security Act (42 U.S.C. 653(i)).
(2) Data regarding enrollment in insurance that may help to
facilitate outreach and enrollment under the State Medicaid
plan, the State CHIP plan, and such other programs as the
Secretary may specify.

(f) Effective Date.-- <> The amendments
made by this section are effective on the date of the enactment of this
Act.

Subtitle B--Reducing Barriers to Enrollment

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

(a) Alternative State Process for Verification of Declaration of
Citizenship or Nationality for Purposes of Eligibility for Medicaid.--
(1) Alternative to documentation requirement.--
(A) In general.--Section 1902 (42 U.S.C. 1396a), as
amended by section 203(c), is amended--
(i) in subsection (a)(46)--

[[Page 50]]
123 STAT. 50

(I) by inserting ``(A)'' after
``(46)'';
(II) by adding ``and'' after the
semicolon; and
(III) by adding at the end the
following new subparagraph:
``(B) provide, with respect to an individual declaring to be
a citizen or national of the United States for purposes of
establishing eligibility under this title, that the State shall
satisfy the requirements of--
``(i) section 1903(x); or
``(ii) subsection (ee);''; and
(ii) by adding at the end the following new
subsection:

``(ee)(1) For purposes of subsection (a)(46)(B)(ii), the
requirements of this subsection with respect to an individual declaring
to be a citizen or national of the United States for purposes of
establishing eligibility under this title, are, in lieu of requiring the
individual to present satisfactory documentary evidence of citizenship
or nationality under section 1903(x) (if the individual is not described
in paragraph (2) of that section), as follows:
``(A) <> The State submits the name and
social security number of the individual to the Commissioner of
Social Security as part of the program established under
paragraph (2).
``(B) If the State receives notice from the Commissioner of
Social Security that the name or social security number, 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

[[Page 51]]
123 STAT. 51

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

[[Page 52]]
123 STAT. 52

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.''.
(B) Costs of implementing and maintaining system.--
Section 1903(a)(3) (42 U.S.C. 1396b(a)(3)) is amended--
(i) by striking ``plus'' at the end of
subparagraph (E) and inserting ``and'', and
(ii) by adding at the end the following new
subparagraph:
``(F)(i) 90 percent of the sums expended during the
quarter as are attributable to the design, development,
or installation of such mechanized verification and
information retrieval systems as the Secretary
determines are necessary to implement section 1902(ee)
(including a system described in paragraph (2)(B)
thereof), and
``(ii) 75 percent of the sums expended during the
quarter as are attributable to the operation of systems
to which clause (i) applies, plus''.
(2) <> Limitation on waiver
authority.--Notwithstanding any provision of section 1115 of the
Social Security Act (42 U.S.C. 1315), or any other provision of
law, the Secretary may not waive the requirements of section
1902(a)(46)(B) of such Act (42 U.S.C. 1396a(a)(46)(B)) with
respect to a State.
(3) Conforming amendments.--Section 1903 (42 U.S.C. 1396b)
is amended--
(A) in subsection (i)(22), by striking ``subsection
(x)'' and inserting ``section 1902(a)(46)(B)''; and
(B) in subsection (x)(1), by striking ``subsection
(i)(22)'' and inserting ``section 1902(a)(46)(B)(i)''.
(4) Appropriation.--Out of any money in the Treasury of the
United States not otherwise appropriated, there are appropriated
to the Commissioner of Social Security $5,000,000 to remain
available until expended to carry out the Commissioner's
responsibilities under section 1902(ee) of the Social Security
Act, as added by subsection (a).

(b) Clarification of Requirements Relating to Presentation of
Satisfactory Documentary Evidence of Citizenship or Nationality.--
(1) Acceptance of documentary evidence issued by a federally
recognized indian tribe.--Section 1903(x)(3)(B) (42 U.S.C.
1396b(x)(3)(B)) is amended--
(A) by redesignating clause (v) as clause (vi); and

[[Page 53]]
123 STAT. 53

(B) by inserting after clause (iv), the following
new clause:
``(v)(I) Except as provided in subclause (II), a document
issued by a federally recognized Indian tribe evidencing
membership or enrollment in, or affiliation with, such tribe
(such as a tribal enrollment card or certificate of degree of
Indian blood).
``(II) <> With respect to those
federally recognized Indian tribes located within States having
an international border whose membership includes individuals
who are not citizens of the United States, the Secretary shall,
after consulting with such tribes, issue regulations authorizing
the presentation of such other forms of documentation (including
tribal documentation, if appropriate) that the Secretary
determines to be satisfactory documentary evidence of
citizenship or nationality for purposes of satisfying the
requirement of this subsection.''.
(2) Requirement to provide reasonable opportunity to present
satisfactory documentary evidence.--Section 1903(x) (42 U.S.C.
1396b(x)) is amended by adding at the end the following new
paragraph:

``(4) In the case of an individual declaring to be a citizen or
national of the United States with respect to whom a State requires the
presentation of satisfactory documentary evidence of citizenship or
nationality under section 1902(a)(46)(B)(i), the individual shall be
provided at least the reasonable opportunity to present satisfactory
documentary evidence of citizenship or nationality under this subsection
as is provided under clauses (i) and (ii) of section 1137(d)(4)(A) to an
individual for the submittal to the State of evidence indicating a
satisfactory immigration status.''.
(3) Children born in the united states to mothers eligible
for medicaid.--
(A) Clarification of rules.--Section 1903(x) (42
U.S.C. 1396b(x)), as amended by paragraph (2), is
amended--
(i) in paragraph (2)--
(I) in subparagraph (C), by striking
``or'' at the end;
(II) by redesignating subparagraph
(D) as subparagraph (E); and
(III) by inserting after
subparagraph (C) the following new
subparagraph:
``(D) pursuant to the application of section 1902(e)(4)
(and, in the case of an individual who is eligible for medical
assistance on such basis, the individual shall be deemed to have
provided satisfactory documentary evidence of citizenship or
nationality and shall not be required to provide further
documentary evidence on any date that occurs during or after the
period in which the individual is eligible for medical
assistance on such basis); or''; and
(ii) by adding at the end the following new
paragraph:

``(5) Nothing in subparagraph (A) or (B) of section 1902(a)(46), the
preceding paragraphs of this subsection, or the Deficit Reduction Act of
2005, including section 6036 of such Act, shall be construed as changing
the requirement of section 1902(e)(4) that a child born in the United
States to an alien mother for whom medical assistance for the delivery
of such child is available as treatment

[[Page 54]]
123 STAT. 54

of an emergency medical condition pursuant to subsection (v) shall be
deemed eligible for medical assistance during the first year of such
child's life.''.
(B) State requirement to issue separate
identification number.--Section 1902(e)(4) (42 U.S.C.
1396a(e)(4)) is amended by adding at the end the
following new sentence: ``Notwithstanding the preceding
sentence, in the case of a child who is born in the
United States to an alien mother for whom medical
assistance for the delivery of the child is made
available pursuant to section 1903(v), the State
immediately shall issue a separate identification number
for the child upon notification by the facility at which
such delivery occurred of the child's birth.''.
(4) Technical amendments.--Section 1903(x)(2) (42 U.S.C.
1396b(x)) is amended--
(A) in subparagraph (B)--
(i) by realigning the left margin of the
matter preceding clause (i) 2 ems to the left; and
(ii) by realigning the left margins of clauses
(i) and (ii), respectively, 2 ems to the left; and
(B) in subparagraph (C)--
(i) by realigning the left margin of the
matter preceding clause (i) 2 ems to the left; and
(ii) by realigning the left margins of clauses
(i) and (ii), respectively, 2 ems to the left.

(c) Application of Documentation System to CHIP.--
(1) In general.--Section 2105(c) (42 U.S.C. 1397ee(c)), as
amended by section 114(a), is amended by adding at the end the
following new paragraph:
``(9) Citizenship documentation requirements.--
``(A) In general.--No payment may be made under this
section with respect to an individual who has, or is,
declared to be a citizen or national of the United
States for purposes of establishing eligibility under
this title unless the State meets the requirements of
section 1902(a)(46)(B) with respect to the individual.
``(B) Enhanced payments.--Notwithstanding subsection
(b), the enhanced FMAP with respect to payments under
subsection (a) for expenditures described in clause (i)
or (ii) of section 1903(a)(3)(F) necessary to comply
with subparagraph (A) shall in no event be less than 90
percent and 75 percent, respectively.''.
(2) Nonapplication of administrative expenditures cap.--
Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)(C)), as amended by
section 202(b), is amended by adding at the end the following:
``(ii) Expenditures to comply with citizenship
or nationality verification requirements.--
Expenditures necessary for the State to comply
with paragraph (9)(A).''.

(d) <> Effective Date.--
(1) In general.--
(A) In general.--Except as provided in subparagraph
(B), the amendments made by this section shall take
effect on January 1, 2010.

[[Page 55]]
123 STAT. 55

(B) Technical amendments.--The amendments made by--
(i) paragraphs (1), (2), and (3) of subsection
(b) shall take effect as if included in the
enactment of section 6036 of the Deficit Reduction
Act of 2005 (Public Law 109-171; 120 Stat. 80);
and
(ii) paragraph (4) of subsection (b) shall
take effect as if included in the enactment of
section 405 of division B of the Tax Relief and
Health Care Act of 2006 (Public Law 109-432; 120
Stat. 2996).
(2) Restoration of eligibility.-- <> In
the case of an individual who, during the period that began on
July 1, 2006, and ends on October 1, 2009, was determined to be
ineligible for medical assistance under a State Medicaid plan,
including any waiver of such plan, solely as a result of the
application of subsections (i)(22) and (x) of section 1903 of
the Social Security Act (as in effect during such period), but
who would have been determined eligible for such assistance if
such subsections, as amended by subsection (b), had applied to
the individual, a State may deem the individual to be eligible
for such assistance as of the date that the individual was
determined to be ineligible for such medical assistance on such
basis.
(3) Special transition rule for indians.-- <> During the period that begins on July 1, 2006, and
ends on the effective date of final regulations issued under
subclause (II) of section 1903(x)(3)(B)(v) of the Social
Security Act (42 U.S.C. 1396b(x)(3)(B)(v)) (as added by
subsection (b)(1)(B)), an individual who is a member of a
federally-recognized Indian tribe described in subclause (II) of
that section who presents a document described in subclause (I)
of such section that is issued by such Indian tribe, shall be
deemed to have presented satisfactory evidence of citizenship or
nationality for purposes of satisfying the requirement of
subsection (x) of section 1903 of such Act.
SEC. 212. REDUCING ADMINISTRATIVE BARRIERS TO ENROLLMENT.

Section 2102(b) (42 U.S.C. 1397bb(b)) is amended--
(1) by redesignating paragraph (4) as paragraph (5); and
(2) by inserting after paragraph (3) the following new
paragraph:
``(4) Reduction of administrative barriers to enrollment.--
``(A) <> In general.--
Subject to subparagraph (B), the plan shall include a
description of the procedures used to reduce
administrative barriers to the enrollment of children
and pregnant women who are eligible for medical
assistance under title XIX or for child health
assistance or health benefits coverage under this title.
Such procedures shall be established and revised as
often as the State determines appropriate to take into
account the most recent information available to the
State identifying such barriers.
``(B) Deemed compliance if joint application and
renewal process that permits application other than in
person.--A State shall be deemed to comply with
subparagraph (A) if the State's application and renewal

[[Page 56]]
123 STAT. 56

forms and supplemental forms (if any) and information
verification process is the same for purposes of
establishing and renewing eligibility for children and
pregnant women for medical assistance under title XIX
and child health assistance under this title, and such
process does not require an application to be made in
person or a face-to-face interview.''.
SEC. 213. <> MODEL OF INTERSTATE
COORDINATED ENROLLMENT AND COVERAGE
PROCESS.

(a) In General.-- <> In order to assure continuity
of coverage of low-income children under the Medicaid program and the
State Children's Health Insurance Program (CHIP), not later than 18
months after the date of the enactment of this Act, the Secretary of
Health and Human Services, in consultation with State Medicaid and CHIP
directors and organizations representing program beneficiaries, shall
develop a model process for the coordination of the enrollment,
retention, and coverage under such programs of children who, because of
migration of families, emergency evacuations, natural or other
disasters, public health emergencies, educational needs, or otherwise,
frequently change their State of residency or otherwise are temporarily
located outside of the State of their residency.

(b) Report to Congress.--After development of such model process,
the Secretary of Health and Human Services shall submit to Congress a
report describing additional steps or authority needed to make further
improvements to coordinate the enrollment, retention, and coverage under
CHIP and Medicaid of children described in subsection (a).
SEC. 214. PERMITTING STATES TO ENSURE COVERAGE WITHOUT A 5-YEAR
DELAY OF CERTAIN CHILDREN AND PREGNANT
WOMEN UNDER THE MEDICAID PROGRAM AND CHIP.

(a) Medicaid Program.--Section 1903(v) (42 U.S.C. 1396b(v)) is
amended--
(1) in paragraph (1), by striking ``paragraph (2)'' and
inserting ``paragraphs (2) and (4)''; and
(2) by adding at the end the following new paragraph:

``(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.

[[Page 57]]
123 STAT. 57

``(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.''.

(b) CHIP.--Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)), as amended
by sections 203(a)(2) and 203(d)(2), is amended by redesignating
subparagraphs (E) and (F) as subparagraphs (F) and (G), respectively and
by inserting after subparagraph (D) the following new subparagraph:
``(E) 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.''.

TITLE III--REDUCING BARRIERS TO PROVIDING PREMIUM ASSISTANCE

Subtitle A--Additional State Option for Providing Premium Assistance

SEC. 301. ADDITIONAL STATE OPTION FOR PROVIDING PREMIUM
ASSISTANCE.

(a) CHIP.--
(1) In general.--Section 2105(c) (42 U.S.C. 1397ee(c)), as
amended by sections 114(a) and 211(c), is amended by adding at
the end the following:
``(10) State option to offer premium assistance.--
``(A) In general.--A State may elect to offer a
premium assistance subsidy (as defined in subparagraph
(C)) for qualified employer-sponsored coverage (as
defined in subparagraph (B)) to all targeted low-income
children who are eligible for child health assistance
under the plan and have access to such coverage in
accordance with the requirements of this paragraph. No
subsidy shall be provided to a targeted low-income child
under this paragraph unless the child (or the child's
parent) voluntarily elects to receive such a subsidy. A
State may not require such an election as a condition of
receipt of child health assistance.
``(B) Qualified employer-sponsored coverage.--
``(i) In general.--Subject to clause (ii), in
this paragraph, the term `qualified employer-
sponsored coverage' means a group health plan or
health insurance coverage offered through an
employer--

[[Page 58]]
123 STAT. 58

``(I) that qualifies as creditable
coverage as a group health plan under
section 2701(c)(1) of the Public Health
Service Act;
``(II) for which the employer
contribution toward any premium for such
coverage is at least 40 percent; and
``(III) that is offered to all
individuals in a manner that would be
considered a nondiscriminatory
eligibility classification for purposes
of paragraph (3)(A)(ii) of section
105(h) of the Internal Revenue Code of
1986 (but determined without regard to
clause (i) of subparagraph (B) of such
paragraph).
``(ii) Exception.--Such term does not include
coverage consisting of--
``(I) benefits provided under a
health flexible spending arrangement (as
defined in section 106(c)(2) of the
Internal Revenue Code of 1986); or
``(II) a high deductible health plan
(as defined in section 223(c)(2) of such
Code), without regard to whether the
plan is purchased in conjunction with a
health savings account (as defined under
section 223(d) of such Code).
``(C) Premium assistance subsidy.--
``(i) In general.--In this paragraph, the term
`premium assistance subsidy' means, with respect
to a targeted low-income child, the amount equal
to the difference between the employee
contribution required for enrollment only of the
employee under qualified employer-sponsored
coverage and the employee contribution required
for enrollment of the employee and the child in
such coverage, less any applicable premium cost-
sharing applied under the State child health plan
(subject to the limitations imposed under section
2103(e), including the requirement to count the
total amount of the employee contribution required
for enrollment of the employee and the child in
such coverage toward the annual aggregate cost-
sharing limit applied under paragraph (3)(B) of
such section).
``(ii) State payment option.--A State may
provide a premium assistance subsidy either as
reimbursement to an employee for out-of-pocket
expenditures or, subject to clause (iii), directly
to the employee's employer.
``(iii) Employer opt-out.--An employer may
notify a State that it elects to opt-out of being
directly paid a premium assistance subsidy on
behalf of an employee. In the event of such a
notification, an employer shall withhold the total
amount of the employee contribution required for
enrollment of the employee and the child in the
qualified employer-sponsored coverage and the
State shall pay the premium assistance subsidy
directly to the employee.
``(iv) Treatment as child health assistance.--
Expenditures for the provision of premium
assistance subsidies shall be considered child
health assistance

[[Page 59]]
123 STAT. 59

described in paragraph (1)(C) of subsection (a)
for purposes of making payments under that
subsection.
``(D) Application of secondary payor rules.--The
State shall be a secondary payor for any items or
services provided under the qualified employer-sponsored
coverage for which the State provides child health
assistance under the State child health plan.
``(E) Requirement to provide supplemental coverage
for benefits and cost-sharing protection provided under
the state child health plan.--
``(i) In general.--Notwithstanding section
2110(b)(1)(C), the State shall provide for each
targeted low-income child enrolled in qualified
employer-sponsored coverage, supplemental coverage
consisting of--
``(I) items or services that are not
covered, or are only partially covered,
under the qualified employer-sponsored
coverage; and
``(II) cost-sharing protection
consistent with section 2103(e).
``(ii) Record keeping requirements.--For
purposes of carrying out clause (i), a State may
elect to directly pay out-of-pocket expenditures
for cost-sharing imposed under the qualified
employer-sponsored coverage and collect or not
collect all or any portion of such expenditures
from the parent of the child.
``(F) Application of waiting period imposed under
the state.--Any waiting period imposed under the State
child health plan prior to the provision of child health
assistance to a targeted low-income child under the
State plan shall apply to the same extent to the
provision of a premium assistance subsidy for the child
under this paragraph.
``(G) Opt-out permitted for any month.--
<> A State shall establish a process
for permitting the parent of a targeted low-income child
receiving a premium assistance subsidy to disenroll the
child from the qualified employer-sponsored coverage and
enroll the child in, and receive child health assistance
under, the State child health plan, effective on the
first day of any month for which the child is eligible
for such assistance and in a manner that ensures
continuity of coverage for the child.
``(H) Application to parents.--If a State provides
child health assistance or health benefits coverage to
parents of a targeted low-income child in accordance
with section 2111(b), the State may elect to offer a
premium assistance subsidy to a parent of a targeted
low-income child who is eligible for such a subsidy
under this paragraph in the same manner as the State
offers such a subsidy for the enrollment of the child in
qualified employer-sponsored coverage, except that--
``(i) the amount of the premium assistance
subsidy shall be increased to take into account
the cost of the enrollment of the parent in the
qualified employer-sponsored coverage or, at the
option of the State if the State determines it
cost-effective, the cost of the enrollment of the
child's family in such coverage; and

[[Page 60]]
123 STAT. 60

``(ii) any reference in this paragraph to a
child is deemed to include a reference to the
parent or, if applicable under clause (i), the
family of the child.
``(I) Additional state option for providing premium
assistance.--
``(i) In general.--A State may establish an
employer-family premium assistance purchasing pool
for employers with less than 250 employees who
have at least 1 employee who is a pregnant woman
eligible for assistance under the State child
health plan (including through the application of
an option described in section 2112(f)) or a
member of a family with at least 1 targeted low-
income child and to provide a premium assistance
subsidy under this paragraph for enrollment in
coverage made available through such pool.
``(ii) Access to choice of coverage.--A State
that elects the option under clause (i) shall
identify and offer access to not less than 2
private health plans that are health benefits
coverage that is equivalent to the benefits
coverage in a benchmark benefit package described
in section 2103(b) or benchmark-equivalent
coverage that meets the requirements of section
2103(a)(2) for employees described in clause (i).
``(iii) Clarification of payment for
administrative expenditures.--Nothing in this
subparagraph shall be construed as permitting
payment under this section for administrative
expenditures attributable to the establishment or
operation of such pool, except to the extent that
such payment would otherwise be permitted under
this title.
``(J) No effect on premium assistance waiver
programs.--Nothing in this paragraph shall be construed
as limiting the authority of a State to offer premium
assistance under section 1906 or 1906A, a waiver
described in paragraph (2)(B) or (3), a waiver approved
under section 1115, or other authority in effect prior
to the date of enactment of the Children's Health
Insurance Program Reauthorization Act of 2009.
``(K) Notice of availability.--If a State elects to
provide premium assistance subsidies in accordance with
this paragraph, the State shall--
``(i) include on any application or enrollment
form for child health assistance a notice of the
availability of premium assistance subsidies for
the enrollment of targeted low-income children in
qualified employer-sponsored coverage;
``(ii) provide, as part of the application and
enrollment process under the State child health
plan, information describing the availability of
such subsidies and how to elect to obtain such a
subsidy; and
``(iii) <> establish such
other procedures as the State determines necessary
to ensure that parents are fully informed of the
choices for receiving child health assistance
under the State child health plan or through the
receipt of premium assistance subsidies.

[[Page 61]]
123 STAT. 61

``(L) Application to qualified employer-sponsored
benchmark coverage.--If a group health plan or health
insurance coverage offered through an employer is
certified by an actuary as health benefits coverage that
is equivalent to the benefits coverage in a benchmark
benefit package described in section 2103(b) or
benchmark-equivalent coverage that meets the
requirements of section 2103(a)(2), the State may
provide premium assistance subsidies for enrollment of
targeted low-income children in such group health plan
or health insurance coverage in the same manner as such
subsidies are provided under this paragraph for
enrollment in qualified employer-sponsored coverage, but
without regard to the requirement to provide
supplemental coverage for benefits and cost-sharing
protection provided under the State child health plan
under subparagraph (E).
``(M) Satisfaction of cost-effectiveness test.--
Premium assistance subsidies for qualified employer-
sponsored coverage offered under this paragraph shall be
deemed to meet the requirement of subparagraph (A) of
paragraph (3).
``(N) <> Coordination with
medicaid.--In the case of a targeted low-income child
who receives child health assistance through a State
plan under title XIX and who voluntarily elects to
receive a premium assistance subsidy under this section,
the provisions of section 1906A shall apply and shall
supersede any other provisions of this paragraph that
are inconsistent with such section.''.
(2) Determination of cost-effectiveness for premium
assistance or purchase of family coverage.--
(A) In general.--Section 2105(c)(3)(A) (42 U.S.C.
1397ee(c)(3)(A)) is amended by striking ``relative to''
and all that follows through the comma and inserting
``relative to
``(i) the amount of expenditures under the
State child health plan, including administrative
expenditures, that the State would have made to
provide comparable coverage of the targeted low-
income child involved or the family involved (as
applicable); or
``(ii) the aggregate amount of expenditures
that the State would have made under the State
child health plan, including administrative
expenditures, for providing coverage under such
plan for all such children or families.''.
(B) <> Nonapplication to
previously approved coverage.--The amendment made by
subparagraph (A) shall not apply to coverage the
purchase of which has been approved by the Secretary
under section 2105(c)(3) of the Social Security Act
prior to the date of enactment of this Act.

(b) Medicaid.--Title XIX is amended by inserting after section 1906
the following new section:


``premium assistance option for children


``Sec. 1906A. <> (a) In General.--A State may
elect to offer a premium assistance subsidy (as defined in subsection
(c)) for qualified employer-sponsored coverage (as defined in subsection
(b)) to

[[Page 61]]
123 STAT. 62

all individuals under age 19 who are entitled to medical assistance
under this title (and to the parent of such an individual) who have
access to such coverage if the State meets the requirements of this
section.

``(b) Qualified Employer-Sponsored Coverage.--
``(1) In general.--Subject to paragraph (2)), in this
paragraph, the term `qualified employer-sponsored coverage'
means a group health plan or health insurance coverage offered
through an employer--
``(A) that qualifies as creditable coverage as a
group health plan under section 2701(c)(1) of the Public
Health Service Act;
``(B) for which the employer contribution toward any
premium for such coverage is at least 40 percent; and
``(C) that is offered to all individuals in a manner
that would be considered a nondiscriminatory eligibility
classification for purposes of paragraph (3)(A)(ii) of
section 105(h) of the Internal Revenue Code of 1986 (but
determined without regard to clause (i) of subparagraph
(B) of such paragraph).
``(2) Exception.--Such term does not include coverage
consisting of--
``(A) benefits provided under a health flexible
spending arrangement (as defined in section 106(c)(2) of
the Internal Revenue Code of 1986); or
``(B) a high deductible health plan (as defined in
section 223(c)(2) of such Code), without regard to
whether the plan is purchased in conjunction with a
health savings account (as defined under section 223(d)
of such Code).
``(3) Treatment as third party liability.--The State shall
treat the coverage provided under qualified employer-sponsored
coverage as a third party liability under section 1902(a)(25).

``(c) Premium Assistance Subsidy.--In this section, the term
`premium assistance subsidy' means the amount of the employee
contribution for enrollment in the qualified employer-sponsored coverage
by the individual under age 19 or by the individual's family. Premium
assistance subsidies under this section shall be considered, for
purposes of section 1903(a), to be a payment for medical assistance.
``(d) Voluntary Participation.--
``(1) Employers.--Participation by an employer in a premium
assistance subsidy offered by a State under this section shall
be voluntary. An employer may notify a State that it elects to
opt-out of being directly paid a premium assistance subsidy on
behalf of an employee.
``(2) Beneficiaries.--No subsidy shall be provided to an
individual under age 19 under this section unless the individual
(or the individual's parent) voluntarily elects to receive such
a subsidy. A State may not require such an election as a
condition of receipt of medical assistance. State may not
require, as a condition of an individual under age 19 (or the
individual's parent) being or remaining eligible for medical
assistance under this title, apply for enrollment in qualified
employer-sponsored coverage under this section.
``(3) Opt-out permitted for any month.--
<> A State shall establish a process for
permitting the parent of an individual under age 19 receiving a
premium assistance subsidy to

[[Page 63]]
123 STAT. 63

disenroll the individual from the qualified employer-sponsored
coverage.

``(e) Requirement To Pay Premiums and Cost-Sharing and Provide
Supplemental Coverage.--In the case of the participation of an
individual under age 19 (or the individual's parent) in a premium
assistance subsidy under this section for qualified employer-sponsored
coverage, the State shall provide for payment of all enrollee premiums
for enrollment in such coverage and all deductibles, coinsurance, and
other cost-sharing obligations for items and services otherwise covered
under the State plan under this title (exceeding the amount otherwise
permitted under section 1916 or, if applicable, section 1916A). The fact
that an individual under age 19 (or a parent) elects to enroll in
qualified employer-sponsored coverage under this section shall not
change the individual's (or parent's) eligibility for medical assistance
under the State plan, except insofar as section 1902(a)(25) provides
that payments for such assistance shall first be made under such
coverage.''.
(c) GAO Study and Report.--Not later than January 1, 2010, the
Comptroller General of the United States shall study cost and coverage
issues relating to any State premium assistance programs for which
Federal matching payments are made under title XIX or XXI of the Social
Security Act, including under waiver authority, and shall submit a
report to the Committee on Finance of the Senate and the Committee on
Energy and Commerce of the House of Representatives on the results of
such study.
SEC. 302. OUTREACH, EDUCATION, AND ENROLLMENT ASSISTANCE.

(a) Requirement To Include Description of Outreach, Education, and
Enrollment Efforts Related to Premium Assistance Subsidies in State
Child Health Plan.--Section 2102(c) (42 U.S.C. 1397bb(c)) is amended by
adding at the end the following new paragraph:
``(3) Premium assistance subsidies.--In the case of a State
that provides for premium assistance subsidies under the State
child health plan in accordance with paragraph (2)(B), (3), or
(10) of section 2105(c), or a waiver approved under section
1115, outreach, education, and enrollment assistance for
families of children likely to be eligible for such subsidies,
to inform such families of the availability of, and to assist
them in enrolling their children in, such subsidies, and for
employers likely to provide coverage that is eligible for such
subsidies, including the specific, significant resources the
State intends to apply to educate employers about the
availability of premium assistance subsidies under the State
child health plan.''.

(b) Nonapplication of 10 Percent Limit on Outreach and Certain Other
Expenditures.--Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)(C)), as
amended by section 211(c)(2), is amended by adding at the end the
following new clause:
``(iii) Expenditures for outreach to increase
the enrollment of children under this title and
title xix through premium assistance subsidies.--
Expenditures for outreach activities to families
of children likely to be eligible for premium
assistance subsidies in accordance with paragraph
(2)(B), (3), or (10), or a waiver approved under
section 1115, to inform such families of the
availability of, and to assist them in enrolling
their children in, such subsidies, and to

[[Page 64]]
123 STAT. 64

employers likely to provide qualified employer-
sponsored coverage (as defined in subparagraph (B)
of such paragraph), but not to exceed an amount
equal to 1.25 percent of the maximum amount
permitted to be expended under subparagraph (A)
for items described in subsection (a)(1)(D).''.

Subtitle B--Coordinating Premium Assistance With Private Coverage

SEC. 311. SPECIAL ENROLLMENT PERIOD UNDER GROUP HEALTH PLANS IN
CASE OF TERMINATION OF MEDICAID OR CHIP
COVERAGE OR ELIGIBILITY FOR ASSISTANCE IN
PURCHASE OF EMPLOYMENT-BASED COVERAGE;
COORDINATION OF COVERAGE.

(a) Amendments to Internal Revenue Code of 1986.--Section 9801(f) of
the Internal Revenue Code of 1986 <> (relating to
special enrollment periods) is amended by adding at the end the
following new paragraph:
``(3) Special rules relating to medicaid and chip.--
``(A) <> In general.--A group
health plan shall permit an employee who is eligible,
but not enrolled, for coverage under the terms of the
plan (or a dependent of such an employee if the
dependent is eligible, but not enrolled, for coverage
under such terms) to enroll for coverage under the terms
of the plan if either of the following conditions is
met:
``(i) Termination of medicaid or chip
coverage.--The employee or dependent is covered
under a Medicaid plan under title XIX of the
Social Security Act or under a State child health
plan under title XXI of such Act and coverage of
the employee or dependent under such a plan is
terminated as a result of loss of eligibility for
such coverage and the employee requests coverage
under the group health plan not later than 60 days
after the date of termination of such coverage.
``(ii) Eligibility for employment assistance
under medicaid or chip.--The employee or dependent
becomes eligible for assistance, with respect to
coverage under the group health plan under such
Medicaid plan or State child health plan
(including under any waiver or demonstration
project conducted under or in relation to such a
plan), if the employee requests coverage under the
group health plan not later than 60 days after the
date the employee or dependent is determined to be
eligible for such assistance.
``(B) Employee outreach and disclosure.--
``(i) Outreach to employees regarding
availability of medicaid and chip coverage.--
``(I) In general.--
<> Each employer
that maintains a group health plan in a
State that provides medical assistance
under a State Medicaid plan under title
XIX of the Social Security Act, or child
health assistance under a State child
health plan under title XXI of such Act,
in the form of premium

[[Page 65]]
123 STAT. 65

assistance for the purchase of coverage
under a group health plan, shall provide
to each employee a written notice
informing the employee of potential
opportunities then currently available
in the State in which the employee
resides for premium assistance under
such plans for health coverage of the
employee or the employee's dependents.
For purposes of compliance with this
clause, the employer may use any State-
specific model notice developed in
accordance with section
701(f)(3)(B)(i)(II) of the Employee
Retirement Income Security Act of 1974
(29 U.S.C. 1181(f)(3)(B)(i)(II)).
``(II) Option to provide concurrent
with provision of plan materials to
employee.--An employer may provide the
model notice applicable to the State in
which an employee resides concurrent
with the furnishing of materials
notifying the employee of health plan
eligibility, concurrent with materials
provided to the employee in connection
with an open season or election process
conducted under the plan, or concurrent
with the furnishing of the summary plan
description as provided in section
104(b) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1024).
``(ii) Disclosure about group health plan
benefits to states for medicaid and chip eligible
individuals.--In the case of a participant or
beneficiary of a group health plan who is covered
under a Medicaid plan of a State under title XIX
of the Social Security Act or under a State child
health plan under title XXI of such Act, the plan
administrator of the group health plan shall
disclose to the State, upon request, information
about the benefits available under the group
health plan in sufficient specificity, as
determined under regulations of the Secretary of
Health and Human Services in consultation with the
Secretary that require use of the model coverage
coordination disclosure form developed under
section 311(b)(1)(C) of the Children's Health
Insurance Program Reauthorization Act of 2009, so
as to permit the State to make a determination
(under paragraph (2)(B), (3), or (10) of section
2105(c) of the Social Security Act or otherwise)
concerning the cost-effectiveness of the State
providing medical or child health assistance
through premium assistance for the purchase of
coverage under such group health plan and in order
for the State to provide supplemental benefits
required under paragraph (10)(E) of such section
or other authority.''.

(b) Conforming Amendments.--
(1) Amendments to employee retirement income security act.--
(A) In general.--Section 701(f) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1181(f)) is amended by adding at the end the following
new paragraph:

[[Page 66]]
123 STAT. 66

``(3) Special rules for application in case of medicaid and
chip.--
``(A) <> In general.--A group
health plan, and a health insurance issuer offering
group health insurance coverage in connection with a
group health plan, shall permit an employee who is
eligible, but not enrolled, for coverage under the terms
of the plan (or a dependent of such an employee if the
dependent is eligible, but not enrolled, for coverage
under such terms) to enroll for coverage under the terms
of the plan if either of the following conditions is
met:
``(i) Termination of medicaid or chip
coverage.--The employee or dependent is covered
under a Medicaid plan under title XIX of the
Social Security Act or under a State child health
plan under title XXI of such Act and coverage of
the employee or dependent under such a plan is
terminated as a result of loss of eligibility for
such coverage and the employee requests coverage
under the group health plan (or health insurance
coverage) not later than 60 days after the date of
termination of such coverage.
``(ii) Eligibility for employment assistance
under medicaid or chip.--The employee or dependent
becomes eligible for assistance, with respect to
coverage under the group health plan or health
insurance coverage, under such Medicaid plan or
State child health plan (including under any
waiver or demonstration project conducted under or
in relation to such a plan), if the employee
requests coverage under the group health plan or
health insurance coverage not later than 60 days
after the date the employee or dependent is
determined to be eligible for such assistance.
``(B) Coordination with medicaid and chip.--
``(i) Outreach to employees regarding
availability of medicaid and chip coverage.--
``(I) In general.--
<> Each employer
that maintains a group health plan in a
State that provides medical assistance
under a State Medicaid plan under title
XIX of the Social Security Act, or child
health assistance under a State child
health plan under title XXI of such Act,
in the form of premium assistance for
the purchase of coverage under a group
health plan, shall provide to each
employee a written notice informing the
employee of potential opportunities then
currently available in the State in
which the employee resides for premium
assistance under such plans for health
coverage of the employee or the
employee's dependents.
``(II) Model notice.--
<> Not later than 1
year after the date of enactment of the
Children's Health Insurance Program
Reauthorization Act of 2009, the
Secretary and the Secretary of Health
and Human Services, in consultation with
Directors of State Medicaid agencies
under title XIX of the Social Security
Act and Directors of State CHIP agencies
under title XXI of such Act, shall
jointly develop national and State-
specific model

[[Page 67]]
123 STAT. 67

notices for purposes of subparagraph
(A). The Secretary shall provide
employers with such model notices so as
to enable employers to timely comply
with the requirements of subparagraph
(A). Such model notices shall include
information regarding how an employee
may contact the State in which the
employee resides for additional
information regarding potential
opportunities for such premium
assistance, including how to apply for
such assistance.
``(III) Option to provide concurrent
with provision of plan materials to
employee.--An employer may provide the
model notice applicable to the State in
which an employee resides concurrent
with the furnishing of materials
notifying the employee of health plan
eligibility, concurrent with materials
provided to the employee in connection
with an open season or election process
conducted under the plan, or concurrent
with the furnishing of the summary plan
description as provided in section
104(b).
``(ii) Disclosure about group health plan
benefits to states for medicaid and chip eligible
individuals.--In the case of a participant or
beneficiary of a group health plan who is covered
under a Medicaid plan of a State under title XIX
of the Social Security Act or under a State child
health plan under title XXI of such Act, the plan
administrator of the group health plan shall
disclose to the State, upon request, information
about the benefits available under the group
health plan in sufficient specificity, as
determined under regulations of the Secretary of
Health and Human Services in consultation with the
Secretary that require use of the model coverage
coordination disclosure form developed under
section 311(b)(1)(C) of the Children's Health
Insurance Program Reauthorization Act of 2009, so
as to permit the State to make a determination
(under paragraph (2)(B), (3), or (10) of section
2105(c) of the Social Security Act or otherwise)
concerning the cost-effectiveness of the State
providing medical or child health assistance
through premium assistance for the purchase of
coverage under such group health plan and in order
for the State to provide supplemental benefits
required under paragraph (10)(E) of such section
or other authority.''.
(B) Conforming amendment.--Section 102(b) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1022(b)) is amended--
(i) by striking ``and the remedies'' and
inserting ``, the remedies''; and
(ii) by inserting before the period the
following: ``, and if the employer so elects for
purposes of complying with section
701(f)(3)(B)(i), the model notice applicable to
the State in which the participants and
beneficiaries reside''.

[[Page 68]]
123 STAT. 68

(C) <> Working group to
develop model coverage coordination disclosure form.--
(i) Medicaid, chip, and employer-sponsored
coverage coordination working group.--
(I) In general.--
<> Not
later than 60 days after the date of
enactment of this Act, the Secretary of
Health and Human Services and the
Secretary of Labor shall jointly
establish a Medicaid, CHIP, and
Employer-Sponsored Coverage Coordination
Working Group (in this subparagraph
referred to as the ``Working Group'').
The purpose of the Working Group shall
be to develop the model coverage
coordination disclosure form described
in subclause (II) and to identify the
impediments to the effective
coordination of coverage available to
families that include employees of
employers that maintain group health
plans and members who are eligible for
medical assistance under title XIX of
the Social Security Act or child health
assistance or other health benefits
coverage under title XXI of such Act.
(II) Model coverage coordination
disclosure form described.--The model
form described in this subclause is a
form for plan administrators of group
health plans to complete for purposes of
permitting a State to determine the
availability and cost-effectiveness of
the coverage available under such plans
to employees who have family members who
are eligible for premium assistance
offered under a State plan under title
XIX or XXI of such Act and to allow for
coordination of coverage for enrollees
of such plans. Such form shall provide
the following information in addition to
such other information as the Working
Group determines appropriate:
(aa) A determination of
whether the employee is eligible
for coverage under the group
health plan.
(bb) The name and contract
information of the plan
administrator of the group
health plan.
(cc) The benefits offered
under the plan.
(dd) The premiums and cost-
sharing required under the plan.
(ee) Any other information
relevant to coverage under the
plan.
(ii) Membership.--The Working Group shall
consist of not more than 30 members and shall be
composed of representatives of--
(I) the Department of Labor;
(II) the Department of Health and
Human Services;
(III) State directors of the
Medicaid program under title XIX of the
Social Security Act;
(IV) State directors of the State
Children's Health Insurance Program
under title XXI of the Social Security
Act;

[[Page 69]]
123 STAT. 69

(V) employers, including owners of
small businesses and their trade or
industry representatives and certified
human resource and payroll
professionals;
(VI) plan administrators and plan
sponsors of group health plans (as
defined in section 607(1) of the
Employee Retirement Income Security Act
of 1974);
(VII) health insurance issuers; and
(VIII) children and other
beneficiaries of medical assistance
under title XIX of the Social Security
Act or child health assistance or other
health benefits coverage under title XXI
of such Act.
(iii) Compensation.--The members of the
Working Group shall serve without compensation.
(iv) Administrative support.--The Department
of Health and Human Services and the Department of
Labor shall jointly provide appropriate
administrative support to the Working Group,
including technical assistance. The Working Group
may use the services and facilities of either such
Department, with or without reimbursement, as
jointly determined by such Departments.
(v) Report.--
(I) Report by working group to the
secretaries.--Not later than 18 months
after the date of the enactment of this
Act, the Working Group shall submit to
the Secretary of Labor and the Secretary
of Health and Human Services the model
form described in clause (i)(II) along
with a report containing recommendations
for appropriate measures to address the
impediments to the effective
coordination of coverage between group
health plans and the State plans under
titles XIX and XXI of the Social
Security Act.
(II) Report by secretaries to the
congress.--Not later than 2 months after
receipt of the report pursuant to
subclause (I), the Secretaries shall
jointly submit a report to each House of
the Congress regarding the
recommendations contained in the report
under such subclause.
(vi) Termination.--The Working Group shall
terminate 30 days after the date of the issuance
of its report under clause (v).
(D) Effective dates.--
<> The
Secretary of Labor and the Secretary of Health and Human
Services shall develop the initial model notices under
section 701(f)(3)(B)(i)(II) of the Employee Retirement
Income Security Act of 1974, and the Secretary of Labor
shall provide such notices to employers, not later than
the date that is 1 year after the date of enactment of
this Act, and each employer shall provide the initial
annual notices to such employer's employees beginning
with the first plan year that begins after the date on
which such initial model notices are first
issued. <> The model coverage
coordination disclosure form developed under
subparagraph (C) shall apply with respect to requests
made by States beginning with the

[[Page 70]]
123 STAT. 70

first plan year that begins after the date on which such
model coverage coordination disclosure form is first
issued.
(E) Enforcement.--Section 502 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1132)
is amended--
(i) in subsection (a)(6), by striking ``or
(8)'' and inserting ``(8), or (9)''; and
(ii) in subsection (c), by redesignating
paragraph (9) as paragraph (10), and by inserting
after paragraph (8) the following:

``(9)(A) The Secretary may assess a civil penalty against any
employer of up to $100 a day from the date of the employer's failure to
meet the notice requirement of section 701(f)(3)(B)(i)(I). For purposes
of this subparagraph, each violation with respect to any single employee
shall be treated as a separate violation.
``(B) The Secretary may assess a civil penalty against any plan
administrator of up to $100 a day from the date of the plan
administrator's failure to timely provide to any State the information
required to be disclosed under section 701(f)(3)(B)(ii). For purposes of
this subparagraph, each violation with respect to any single participant
or beneficiary shall be treated as a separate violation.''.
(2) Amendments to public health service act.--Section
2701(f) of the Public Health Service Act (42 U.S.C. 300gg(f)) is
amended by adding at the end the following new paragraph:
``(3) Special rules for application in case of medicaid and
chip.--
``(A) <> In general.--A group
health plan, and a health insurance issuer offering
group health insurance coverage in connection with a
group health plan, shall permit an employee who is
eligible, but not enrolled, for coverage under the terms
of the plan (or a dependent of such an employee if the
dependent is eligible, but not enrolled, for coverage
under such terms) to enroll for coverage under the terms
of the plan if either of the following conditions is
met:
``(i) Termination of medicaid or chip
coverage.--The employee or dependent is covered
under a Medicaid plan under title XIX of the
Social Security Act or under a State child health
plan under title XXI of such Act and coverage of
the employee or dependent under such a plan is
terminated as a result of loss of eligibility for
such coverage and the employee requests coverage
under the group health plan (or health insurance
coverage) not later than 60 days after the date of
termination of such coverage.
``(ii) Eligibility for employment assistance
under medicaid or chip.--The employee or dependent
becomes eligible for assistance, with respect to
coverage under the group health plan or health
insurance coverage, under such Medicaid plan or
State child health plan (including under any
waiver or demonstration project conducted under or
in relation to such a plan), if the employee
requests coverage under the group health plan or
health insurance coverage not later than 60 days
after the date the employee or dependent is
determined to be eligible for such assistance.

[[Page 71]]
123 STAT. 71

``(B) Coordination with medicaid and chip.--
``(i) Outreach to employees regarding
availability of medicaid and chip coverage.--
``(I) In general.--
<> Each employer
that maintains a group health plan in a
State that provides medical assistance
under a State Medicaid plan under title
XIX of the Social Security Act, or child
health assistance under a State child
health plan under title XXI of such Act,
in the form of premium assistance for
the purchase of coverage under a group
health plan, shall provide to each
employee a written notice informing the
employee of potential opportunities then
currently available in the State in
which the employee resides for premium
assistance under such plans for health
coverage of the employee or the
employee's dependents. For purposes of
compliance with this subclause, the
employer may use any State-specific
model notice developed in accordance
with section 701(f)(3)(B)(i)(II) of the
Employee Retirement Income Security Act
of 1974 (29 U.S.C.
1181(f)(3)(B)(i)(II)).
``(II) Option to provide concurrent
with provision of plan materials to
employee.--An employer may provide the
model notice applicable to the State in
which an employee resides concurrent
with the furnishing of materials
notifying the employee of health plan
eligibility, concurrent with materials
provided to the employee in connection
with an open season or election process
conducted under the plan, or concurrent
with the furnishing of the summary plan
description as provided in section
104(b) of the Employee Retirement Income
Security Act of 1974.
``(ii) Disclosure about group health plan
benefits to states for medicaid and chip eligible
individuals.--In the case of an enrollee in a
group health plan who is covered under a Medicaid
plan of a State under title XIX of the Social
Security Act or under a State child health plan
under title XXI of such Act, the plan
administrator of the group health plan shall
disclose to the State, upon request, information
about the benefits available under the group
health plan in sufficient specificity, as
determined under regulations of the Secretary of
Health and Human Services in consultation with the
Secretary that require use of the model coverage
coordination disclosure form developed under
section 311(b)(1)(C) of the Children's Health
Insurance Reauthorization Act of 2009, so as to
permit the State to make a determination (under
paragraph (2)(B), (3), or (10) of section 2105(c)
of the Social Security Act or otherwise)
concerning the cost-effectiveness of the State
providing medical or child health assistance
through premium assistance for the purchase of
coverage under such group health plan and in order
for the State to provide

[[Page 72]]
123 STAT. 72

supplemental benefits required under paragraph
(10)(E) of such section or other authority.''.

TITLE IV--STRENGTHENING QUALITY OF CARE AND HEALTH OUTCOMES

SEC. 401. CHILD HEALTH QUALITY IMPROVEMENT ACTIVITIES FOR CHILDREN
ENROLLED IN MEDICAID OR CHIP.

(a) Development of Child Health Quality Measures for Children
Enrolled in Medicaid or Chip.--Title XI (42 U.S.C. 1301 et seq.) is
amended by inserting after section 1139 the following new section:
``SEC. 1139A. <> CHILD HEALTH QUALITY
MEASURES.

``(a) Development of an Initial Core Set of Health Care Quality
Measures for Children Enrolled in Medicaid or Chip.--
``(1) In general.-- <> Not
later than January 1, 2010, the Secretary shall identify and
publish for general comment an initial, recommended core set of
child health quality measures for use by State programs
administered under titles XIX and XXI, health insurance issuers
and managed care entities that enter into contracts with such
programs, and providers of items and services under such
programs.
``(2) Identification of initial core measures.--In
consultation with the individuals and entities described in
subsection (b)(3), the Secretary shall identify existing quality
of care measures for children that are in use under public and
privately sponsored health care coverage arrangements, or that
are part of reporting systems that measure both the presence and
duration of health insurance coverage over time.
``(3) <> Recommendations and
dissemination.--Based on such existing and identified measures,
the Secretary shall publish an initial core set of child health
quality measures that includes (but is not limited to) the
following:
``(A) The duration of children's health insurance
coverage over a 12-month time period.
``(B) The availability and effectiveness of a full
range of--
``(i) preventive services, treatments, and
services for acute conditions, including services
to promote healthy birth, prevent and treat
premature birth, and detect the presence or risk
of physical or mental conditions that could
adversely affect growth and development; and
``(ii) treatments to correct or ameliorate the
effects of physical and mental conditions,
including chronic conditions, in infants, young
children, school-age children, and adolescents.
``(C) The availability of care in a range of
ambulatory and inpatient health care settings in which
such care is furnished.
``(D) The types of measures that, taken together,
can be used to estimate the overall national quality of
health care for children, including children with
special needs, and to perform comparative analyses of
pediatric health

[[Page 73]]
123 STAT. 73

care quality and racial, ethnic, and socioeconomic
disparities in child health and health care for
children.
``(4) Encourage voluntary and standardized reporting.--
<> Not later than 2 years after the
date of enactment of the Children's Health Insurance Program
Reauthorization Act of 2009, the Secretary, in consultation with
States, shall develop a standardized format for reporting
information and procedures and approaches that encourage States
to use the initial core measurement set to voluntarily report
information regarding the quality of pediatric health care under
titles XIX and XXI.
``(5) Adoption of best practices in implementing quality
programs.--The Secretary shall disseminate information to States
regarding best practices among States with respect to measuring
and reporting on the quality of health care for children, and
shall facilitate the adoption of such best practices. In
developing best practices approaches, the Secretary shall give
particular attention to State measurement techniques that ensure
the timeliness and accuracy of provider reporting, encourage
provider reporting compliance, encourage successful quality
improvement strategies, and improve efficiency in data
collection using health information technology.
``(6) Reports to congress.--Not later than January 1, 2011,
and every 3 years thereafter, the Secretary shall report to
Congress on--
``(A) the status of the Secretary's efforts to
improve--
``(i) quality related to the duration and
stability of health insurance coverage for
children under titles XIX and XXI;
``(ii) the quality of children's health care
under such titles, including preventive health
services, health care for acute conditions,
chronic health care, and health services to
ameliorate the effects of physical and mental
conditions and to aid in growth and development of
infants, young children, school-age children, and
adolescents with special health care needs; and
``(iii) the quality of children's health care
under such titles across the domains of quality,
including clinical quality, health care safety,
family experience with health care, health care in
the most integrated setting, and elimination of
racial, ethnic, and socioeconomic disparities in
health and health care;
``(B) the status of voluntary reporting by States
under titles XIX and XXI, utilizing the initial core
quality measurement set; and
``(C) any recommendations for legislative changes
needed to improve the quality of care provided to
children under titles XIX and XXI, including
recommendations for quality reporting by States.
``(7) Technical assistance.--The Secretary shall provide
technical assistance to States to assist them in adopting and
utilizing core child health quality measures in administering
the State plans under titles XIX and XXI.
``(8) Definition of core set.--In this section, the term
`core set' means a group of valid, reliable, and evidence-based
quality measures that, taken together--

[[Page 74]]
123 STAT. 74

``(A) provide information regarding the quality of
health coverage and health care for children;
``(B) address the needs of children throughout the
developmental age span; and
``(C) allow purchasers, families, and health care
providers to understand the quality of care in relation
to the preventive needs of children, treatments aimed at
managing and resolving acute conditions, and diagnostic
and treatment services whose purpose is to correct or
ameliorate physical, mental, or developmental conditions
that could, if untreated or poorly treated, become
chronic.

``(b) Advancing and Improving Pediatric Quality Measures.--
``(1) Establishment of pediatric quality measures program.--
<> Not later than January 1, 2011, the
Secretary shall establish a pediatric quality measures program
to--
``(A) improve and strengthen the initial core child
health care quality measures established by the
Secretary under subsection (a);
``(B) expand on existing pediatric quality measures
used by public and private health care purchasers and
advance the development of such new and emerging quality
measures; and
``(C) increase the portfolio of evidence-based,
consensus pediatric quality measures available to public
and private purchasers of children's health care
services, providers, and consumers.
``(2) Evidence-based measures.--The measures developed under
the pediatric quality measures program shall, at a minimum, be--
``(A) evidence-based and, where appropriate, risk
adjusted;
``(B) designed to identify and eliminate racial and
ethnic disparities in child health and the provision of
health care;
``(C) designed to ensure that the data required for
such measures is collected and reported in a standard
format that permits comparison of quality and data at a
State, plan, and provider level;
``(D) periodically updated; and
``(E) responsive to the child health needs,
services, and domains of health care quality described
in clauses (i), (ii), and (iii) of subsection (a)(6)(A).
``(3) Process for pediatric quality measures program.--In
identifying gaps in existing pediatric quality measures and
establishing priorities for development and advancement of such
measures, the Secretary shall consult with--
``(A) States;
``(B) pediatricians, children's hospitals, and other
primary and specialized pediatric health care
professionals (including members of the allied health
professions) who specialize in the care and treatment of
children, particularly children with special physical,
mental, and developmental health care needs;
``(C) dental professionals, including pediatric
dental professionals;

[[Page 75]]
123 STAT. 75

``(D) health care providers that furnish primary
health care to children and families who live in urban
and rural medically underserved communities or who are
members of distinct population sub-groups at heightened
risk for poor health outcomes;
``(E) national organizations representing children,
including children with disabilities and children with
chronic conditions;
``(F) national organizations representing consumers
and purchasers of children's health care;
``(G) national organizations and individuals with
expertise in pediatric health quality measurement; and
``(H) voluntary consensus standards setting
organizations and other organizations involved in the
advancement of evidence-based measures of health care.
``(4) Developing, validating, and testing a portfolio of
pediatric quality measures.--As part of the program to advance
pediatric quality measures, the Secretary shall--
``(A) award grants and contracts for the
development, testing, and validation of new, emerging,
and innovative evidence-based measures for children's
health care services across the domains of quality
described in clauses (i), (ii), and (iii) of subsection
(a)(6)(A); and
``(B) award grants and contracts for--
``(i) the development of consensus on
evidence-based measures for children's health care
services;
``(ii) the dissemination of such measures to
public and private purchasers of health care for
children; and
``(iii) the updating of such measures as
necessary.
``(5) Revising, strengthening, and improving initial core
measures.-- <> Beginning no later
than January 1, 2013, and annually thereafter, the Secretary
shall publish recommended changes to the core measures described
in subsection (a) that shall reflect the testing, validation,
and consensus process for the development of pediatric quality
measures described in subsection paragraphs (1) through (4).
``(6) Definition of pediatric quality measure.--In this
subsection, the term `pediatric quality measure' means a
measurement of clinical care that is capable of being examined
through the collection and analysis of relevant information,
that is developed in order to assess 1 or more aspects of
pediatric health care quality in various institutional and
ambulatory health care settings, including the structure of the
clinical care system, the process of care, the outcome of care,
or patient experiences in care.
``(7) Construction.--Nothing in this section shall be
construed as supporting the restriction of coverage, under title
XIX or XXI or otherwise, to only those services that are
evidence-based.

``(c) Annual State Reports Regarding State-Specific Quality of Care
Measures Applied Under Medicaid or Chip.--
``(1) Annual state reports.--Each State with a State plan
approved under title XIX or a State child health plan approved
under title XXI shall annually report to the Secretary on the--

[[Page 76]]
123 STAT. 76

``(A) State-specific child health quality measures
applied by the States under such plans, including
measures described in subparagraphs (A) and (B) of
subsection (a)(6); and
``(B) State-specific information on the quality of
health care furnished to children under such plans,
including information collected through external quality
reviews of managed care organizations under section 1932
of the Social Security Act (42 U.S.C. 1396u-4) and
benchmark plans under sections 1937 and 2103 of such Act
(42 U.S.C. 1396u-7, 1397cc).
``(2) Publication.-- <> Not later than
September 30, 2010, and annually thereafter, the Secretary shall
collect, analyze, and make publicly available the information
reported by States under paragraph (1).

``(d) Demonstration Projects for Improving the Quality of Children's
Health Care and the Use of Health Information Technology.--
``(1) In general.-- <> During
the period of fiscal years 2009 through 2013, the Secretary
shall award not more than 10 grants to States and child health
providers to conduct demonstration projects to evaluate
promising ideas for improving the quality of children's health
care provided under title XIX or XXI, including projects to--
``(A) experiment with, and evaluate the use of, new
measures of the quality of children's health care under
such titles (including testing the validity and
suitability for reporting of such measures);
``(B) promote the use of health information
technology in care delivery for children under such
titles;
``(C) evaluate provider-based models which improve
the delivery of children's health care services under
such titles, including care management for children with
chronic conditions and the use of evidence-based
approaches to improve the effectiveness, safety, and
efficiency of health care services for children; or
``(D) demonstrate the impact of the model electronic
health record format for children developed and
disseminated under subsection (f) on improving pediatric
health, including the effects of chronic childhood
health conditions, and pediatric health care quality as
well as reducing health care costs.
``(2) Requirements.--In awarding grants under this
subsection, the Secretary shall ensure that--
``(A) only 1 demonstration project funded under a
grant awarded under this subsection shall be conducted
in a State; and
``(B) demonstration projects funded under grants
awarded under this subsection shall be conducted evenly
between States with large urban areas and States with
large rural areas.
``(3) Authority for multistate projects.--A demonstration
project conducted with a grant awarded under this subsection may
be conducted on a multistate basis, as needed.
``(4) Funding.--$20,000,000 of the amount appropriated under
subsection (i) for a fiscal year shall be used to carry out this
subsection.

[[Page 77]]
123 STAT. 77

``(e) Childhood Obesity Demonstration Project.--
``(1) Authority to conduct demonstration.--The Secretary, in
consultation with the Administrator of the Centers for Medicare
& Medicaid Services, shall conduct a demonstration project to
develop a comprehensive and systematic model for reducing
childhood obesity by awarding grants to eligible entities to
carry out such project. Such model shall--
``(A) identify, through self-assessment, behavioral
risk factors for obesity among children;
``(B) identify, through self-assessment, needed
clinical preventive and screening benefits among those
children identified as target individuals on the basis
of such risk factors;
``(C) provide ongoing support to such target
individuals and their families to reduce risk factors
and promote the appropriate use of preventive and
screening benefits; and
``(D) be designed to improve health outcomes,
satisfaction, quality of life, and appropriate use of
items and services for which medical assistance is
available under title XIX or child health assistance is
available under title XXI among such target individuals.
``(2) Eligibility entities.--For purposes of this
subsection, an eligible entity is any of the following:
``(A) A city, county, or Indian tribe.
``(B) A local or tribal educational agency.
``(C) An accredited university, college, or
community college.
``(D) A Federally-qualified health center.
``(E) A local health department.
``(F) A health care provider.
``(G) A community-based organization.
``(H) Any other entity determined appropriate by the
Secretary, including a consortia or partnership of
entities described in any of subparagraphs (A) through
(G).
``(3) Use of funds.--An eligible entity awarded a grant
under this subsection shall use the funds made available under
the grant to--
``(A) carry out community-based activities related
to reducing childhood obesity, including by--
``(i) forming partnerships with entities,
including schools and other facilities providing
recreational services, to establish programs for
after school and weekend community activities that
are designed to reduce childhood obesity;
``(ii) forming partnerships with daycare
facilities to establish programs that promote
healthy eating behaviors and physical activity;
and
``(iii) developing and evaluating community
educational activities targeting good nutrition
and promoting healthy eating behaviors;
``(B) carry out age-appropriate school-based
activities that are designed to reduce childhood
obesity, including by--
``(i) developing and testing educational
curricula and intervention programs designed to
promote healthy eating behaviors and habits in
youth, which may include--

[[Page 78]]
123 STAT. 78

``(I) after hours physical activity
programs; and
``(II) science-based interventions
with multiple components to prevent
eating disorders including nutritional
content, understanding and responding to
hunger and satiety, positive body image
development, positive self-esteem
development, and learning life skills
(such as stress management,
communication skills, problemsolving and
decisionmaking skills), as well as
consideration of cultural and
developmental issues, and the role of
family, school, and community;
``(ii) providing education and training to
educational professionals regarding how to promote
a healthy lifestyle and a healthy school
environment for children;
``(iii) planning and implementing a healthy
lifestyle curriculum or program with an emphasis
on healthy eating behaviors and physical activity;
and
``(iv) planning and implementing healthy
lifestyle classes or programs for parents or
guardians, with an emphasis on healthy eating
behaviors and physical activity for children;
``(C) carry out educational, counseling,
promotional, and training activities through the local
health care delivery systems including by--
``(i) promoting healthy eating behaviors and
physical activity services to treat or prevent
eating disorders, being overweight, and obesity;
``(ii) providing patient education and
counseling to increase physical activity and
promote healthy eating behaviors;
``(iii) training health professionals on how
to identify and treat obese and overweight
individuals which may include nutrition and
physical activity counseling; and
``(iv) providing community education by a
health professional on good nutrition and physical
activity to develop a better understanding of the
relationship between diet, physical activity, and
eating disorders, obesity, or being overweight;
and
``(D) provide, through qualified health
professionals, training and supervision for community
health workers to--
``(i) educate families regarding the
relationship between nutrition, eating habits,
physical activity, and obesity;
``(ii) educate families about effective
strategies to improve nutrition, establish healthy
eating patterns, and establish appropriate levels
of physical activity; and
``(iii) educate and guide parents regarding
the ability to model and communicate positive
health behaviors.
``(4) Priority.--In awarding grants under paragraph (1), the
Secretary shall give priority to awarding grants to eligible
entities--

[[Page 79]]
123 STAT. 79

``(A) that demonstrate that they have previously
applied successfully for funds to carry out activities
that seek to promote individual and community health and
to prevent the incidence of chronic disease and that can
cite published and peer-reviewed research demonstrating
that the activities that the entities propose to carry
out with funds made available under the grant are
effective;
``(B) that will carry out programs or activities
that seek to accomplish a goal or goals set by the State
in the Healthy People 2010 plan of the State;
``(C) that provide non-Federal contributions, either
in cash or in-kind, to the costs of funding activities
under the grants;
``(D) that develop comprehensive plans that include
a strategy for extending program activities developed
under grants in the years following the fiscal years for
which they receive grants under this subsection;
``(E) located in communities that are medically
underserved, as determined by the Secretary;
``(F) located in areas in which the average poverty
rate is at least 150 percent or higher of the average
poverty rate in the State involved, as determined by the
Secretary; and
``(G) that submit plans that exhibit multisectoral,
cooperative conduct that includes the involvement of a
broad range of stakeholders, including--
``(i) community-based organizations;
``(ii) local governments;
``(iii) local educational agencies;
``(iv) the private sector;
``(v) State or local departments of health;
``(vi) accredited colleges, universities, and
community colleges;
``(vii) health care providers;
``(viii) State and local departments of
transportation and city planning; and
``(ix) other entities determined appropriate
by the Secretary.
``(5) <> Program design.--
``(A) Initial design.--Not later than 1 year after
the date of enactment of the Children's Health Insurance
Program Reauthorization Act of 2009, the Secretary shall
design the demonstration project. The demonstration
should draw upon promising, innovative models and
incentives to reduce behavioral risk factors. The
Administrator of the Centers for Medicare & Medicaid
Services shall consult with the Director of the Centers
for Disease Control and Prevention, the Director of the
Office of Minority Health, the heads of other agencies
in the Department of Health and Human Services, and such
professional organizations, as the Secretary determines
to be appropriate, on the design, conduct, and
evaluation of the demonstration.
``(B) Number and project areas.--
<> Not later than 2 years after the date
of enactment of the Children's Health Insurance Program
Reauthorization Act of 2009, the Secretary shall award 1
grant that is specifically designed

[[Page 80]]
123 STAT. 80

to determine whether programs similar to programs to be
conducted by other grantees under this subsection should
be implemented with respect to the general population of
children who are eligible for child health assistance
under State child health plans under title XXI in order
to reduce the incidence of childhood obesity among such
population.
``(6) Report to congress.--Not later than 3 years after the
date the Secretary implements the demonstration project under
this subsection, the Secretary shall submit to Congress a report
that describes the project, evaluates the effectiveness and cost
effectiveness of the project, evaluates the beneficiary
satisfaction under the project, and includes any such other
information as the Secretary determines to be appropriate.
``(7) Definitions.--In this subsection:
``(A) Federally-qualified health center.--The term
`Federally-qualified health center' has the meaning
given that term in section 1905(l)(2)(B).
``(B) Indian tribe.--The term `Indian tribe' has the
meaning given that term in section 4 of the Indian
Health Care Improvement Act (25 U.S.C. 1603).
``(C) Self-assessment.--The term `self-assessment'
means a form that--
``(i) includes questions regarding--
``(I) behavioral risk factors;
``(II) needed preventive and
screening services; and
``(III) target individuals'
preferences for receiving follow-up
information;
``(ii) is assessed using such computer
generated assessment programs; and
``(iii) allows for the provision of such
ongoing support to the individual as the Secretary
determines appropriate.
``(D) Ongoing support.--The term `ongoing support'
means--
``(i) to provide any target individual with
information, feedback, health coaching, and
recommendations regarding--
``(I) the results of a self-
assessment given to the individual;
``(II) behavior modification based
on the self-assessment; and
``(III) any need for clinical
preventive and screening services or
treatment including medical nutrition
therapy;
``(ii) to provide any target individual with
referrals to community resources and programs
available to assist the target individual in
reducing health risks; and
``(iii) to provide the information described
in clause (i) to a health care provider, if
designated by the target individual to receive
such information.
``(8) Authorization of appropriations.--There is authorized
to be appropriated to carry out this subsection, $25,000,000 for
the period of fiscal years 2009 through 2013.

[[Page 81]]
123 STAT. 81

``(f) Development of Model Electronic Health Record Format for
Children Enrolled in Medicaid or CHIP.--
``(1) In general.-- <> Not later than
January 1, 2010, the Secretary shall establish a program to
encourage the development and dissemination of a model
electronic health record format for children enrolled in the
State plan under title XIX or the State child health plan under
title XXI that is--
``(A) subject to State laws, accessible to parents,
caregivers, and other consumers for the sole purpose of
demonstrating compliance with school or leisure activity
requirements, such as appropriate immunizations or
physicals;
``(B) designed to allow interoperable exchanges that
conform with Federal and State privacy and security
requirements;
``(C) structured in a manner that permits parents
and caregivers to view and understand the extent to
which the care their children receive is clinically
appropriate and of high quality; and
``(D) capable of being incorporated into, and
otherwise compatible with, other standards developed for
electronic health records.
``(2) Funding.--$5,000,000 of the amount appropriated under
subsection (i) for a fiscal year shall be used to carry out this
subsection.

``(g) Study of Pediatric Health and Health Care Quality Measures.--
``(1) In general.-- <> Not later
than July 1, 2010, the Institute of Medicine shall study and
report to Congress on the extent and quality of efforts to
measure child health status and the quality of health care for
children across the age span and in relation to preventive care,
treatments for acute conditions, and treatments aimed at
ameliorating or correcting physical, mental, and developmental
conditions in children. In conducting such study and preparing
such report, the Institute of Medicine shall--
``(A) consider all of the major national population-
based reporting systems sponsored by the Federal
Government that are currently in place, including
reporting requirements under Federal grant programs and
national population surveys and estimates conducted
directly by the Federal Government;
``(B) identify the information regarding child
health and health care quality that each system is
designed to capture and generate, the study and
reporting periods covered by each system, and the extent
to which the information so generated is made widely
available through publication;
``(C) identify gaps in knowledge related to
children's health status, health disparities among
subgroups of children, the effects of social conditions
on children's health status and use and effectiveness of
health care, and the relationship between child health
status and family income, family stability and
preservation, and children's school readiness and
educational achievement and attainment; and

[[Page 82]]
123 STAT. 82

``(D) <> make
recommendations regarding improving and strengthening
the timeliness, quality, and public transparency and
accessibility of information about child health and
health care quality.
``(2) Funding.--Up to $1,000,000 of the amount appropriated
under subsection (i) for a fiscal year shall be used to carry
out this subsection.

``(h) Rule of Construction.--Notwithstanding any other provision in
this section, no evidence based quality measure developed, published, or
used as a basis of measurement or reporting under this section may be
used to establish an irrebuttable presumption regarding either the
medical necessity of care or the maximum permissible coverage for any
individual child who is eligible for and receiving medical assistance
under title XIX or child health assistance under title XXI.
``(i) Appropriation.--Out of any funds in the Treasury not otherwise
appropriated, there is appropriated for each of fiscal years 2009
through 2013, $45,000,000 for the purpose of carrying out this section
(other than subsection (e)). Funds appropriated under this subsection
shall remain available until expended.''.
(b) Increased Matching Rate for Collecting and Reporting on Child
Health Measures.--Section 1903(a)(3)(A) (42 U.S.C. 1396b(a)(3)(A)), is
amended--
(1) by striking ``and'' at the end of clause (i); and
(2) by adding at the end the following new clause:
``(iii) an amount equal to the Federal medical
assistance percentage (as defined in section 1905(b)) of
so much of the sums expended during such quarter (as
found necessary by the Secretary for the proper and
efficient administration of the State plan) as are
attributable to such developments or modifications of
systems of the type described in clause (i) as are
necessary for the efficient collection and reporting on
child health measures; and''.
SEC. 402. IMPROVED AVAILABILITY OF PUBLIC INFORMATION REGARDING
ENROLLMENT OF CHILDREN IN CHIP AND
MEDICAID.

(a) Inclusion of Process and Access Measures in Annual State
Reports.--Section 2108 (42 U.S.C. 1397hh) is amended--
(1) in subsection (a), in the matter preceding paragraph
(1), by striking ``The State'' and inserting ``Subject to
subsection (e), the State''; and
(2) by adding at the end the following new subsection:

``(e) Information Required for Inclusion in State Annual Report.--
The State shall include the following information in the annual report
required under subsection (a):
``(1) Eligibility criteria, enrollment, and retention data
(including data with respect to continuity of coverage or
duration of benefits).
``(2) Data regarding the extent to which the State uses
process measures with respect to determining the eligibility of
children under the State child health plan, including measures
such as 12-month continuous eligibility, self-declaration of
income for applications or renewals, or presumptive eligibility.
``(3) Data regarding denials of eligibility and
redeterminations of eligibility.

[[Page 83]]
123 STAT. 83

``(4) Data regarding access to primary and specialty
services, access to networks of care, and care coordination
provided under the State child health plan, using quality care
and consumer satisfaction measures included in the Consumer
Assessment of Healthcare Providers and Systems (CAHPS) survey.
``(5) If the State provides child health assistance in the
form of premium assistance for the purchase of coverage under a
group health plan, data regarding the provision of such
assistance, including the extent to which employer-sponsored
health insurance coverage is available for children eligible for
child health assistance under the State child health plan, the
range of the monthly amount of such assistance provided on
behalf of a child or family, the number of children or families
provided such assistance on a monthly basis, the income of the
children or families provided such assistance, the benefits and
cost-sharing protection provided under the State child health
plan to supplement the coverage purchased with such premium
assistance, the effective strategies the State engages in to
reduce any administrative barriers to the provision of such
assistance, and, the effects, if any, of the provision of such
assistance on preventing the coverage provided under the State
child health plan from substituting for coverage provided under
employer-sponsored health insurance offered in the State.
``(6) To the extent applicable, a description of any State
activities that are designed to reduce the number of uncovered
children in the State, including through a State health
insurance connector program or support for innovative private
health coverage initiatives.''.

(b) <> Standardized Reporting Format.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall specify a
standardized format for States to use for reporting the
information required under section 2108(e) of the Social
Security Act, as added by subsection (a)(2).
(2) Transition period for states.--Each State that is
required to submit a report under subsection (a) of section 2108
of the Social Security Act that includes the information
required under subsection (e) of such section may use up to 3
reporting periods to transition to the reporting of such
information in accordance with the standardized format specified
by the Secretary under paragraph (1).

(c) Additional Funding for the Secretary To Improve Timeliness of
Data Reporting and Analysis for Purposes of Determining Enrollment
Increases Under Medicaid and CHIP.--
(1) Appropriation.--There is appropriated, out of any money
in the Treasury not otherwise appropriated, $5,000,000 to the
Secretary for fiscal year 2009 for the purpose of improving the
timeliness of the data reported and analyzed from the Medicaid
Statistical Information System (MSIS) for purposes of providing
more timely data on enrollment and eligibility of children under
Medicaid and CHIP and to provide guidance to States with respect
to any new reporting requirements related to such improvements.
Amounts appropriated under this paragraph shall remain available
until expended.
(2) Requirements.--The improvements made by the Secretary
under paragraph (1) shall be designed and implemented (including
with respect to any necessary guidance for States

[[Page 84]]
123 STAT. 84

to report such information in a complete and expeditious manner)
so that, beginning no later than October 1, 2009, data regarding
the enrollment of low-income children (as defined in section
2110(c)(4) of the Social Security Act (42 U.S.C. 1397jj(c)(4))
of a State enrolled in the State plan under Medicaid or the
State child health plan under CHIP with respect to a fiscal year
shall be collected and analyzed by the Secretary within 6 months
of submission.

(d) GAO Study and Report on Access to Primary and Speciality
Services.--
(1) In general.--The Comptroller General of the United
States shall conduct a study of children's access to primary and
specialty services under Medicaid and CHIP, including--
(A) the extent to which providers are willing to
treat children eligible for such programs;
(B) information on such children's access to
networks of care;
(C) geographic availability of primary and specialty
services under such programs;
(D) the extent to which care coordination is
provided for children's care under Medicaid and CHIP;
and
(E) as appropriate, information on the degree of
availability of services for children under such
programs.
(2) Report.--Not later than 2 years after the date of
enactment of this Act, the Comptroller General shall submit a
report to the Committee on Finance of the Senate and the
Committee on Energy and Commerce of the House of Representatives
on the study conducted under paragraph (1) that includes
recommendations for such Federal and State legislative and
administrative changes as the Comptroller General determines are
necessary to address any barriers to access to children's care
under Medicaid and CHIP that may exist.
SEC. 403. APPLICATION OF CERTAIN MANAGED CARE QUALITY SAFEGUARDS
TO CHIP.

(a) In General.--Section 2103(f) of Social Security Act <> (42 U.S.C. 1397bb(f)) is amended by adding at the end the
following new paragraph:
``(3) Compliance with managed care requirements.--The State
child health plan shall provide for the application of
subsections (a)(4), (a)(5), (b), (c), (d), and (e) of section
1932 (relating to requirements for managed care) to coverage,
State agencies, enrollment brokers, managed care entities, and
managed care organizations under this title in the same manner
as such subsections apply to coverage and such entities and
organizations under title XIX.''.

(b) <> Effective Date.--The amendment
made by subsection (a) shall apply to contract years for health plans
beginning on or after July 1, 2009.

TITLE V--IMPROVING ACCESS TO BENEFITS

SEC. 501. DENTAL BENEFITS.

(a) Coverage.--

[[Page 85]]
123 STAT. 85

(1) In general.--Section 2103 (42 U.S.C. 1397cc) is
amended--
(A) in subsection (a)--
(i) in the matter before paragraph (1), by
striking ``subsection (c)(5)'' and inserting
``paragraphs (5) and (7) of subsection (c)''; and
(ii) in paragraph (1), by inserting ``at
least'' after ``that is''; and
(B) in subsection (c)--
(i) by redesignating paragraph (5) as
paragraph (7); and
(ii) by inserting after paragraph (4), the
following:
``(5) Dental benefits.--
``(A) In general.--The child health assistance
provided to a targeted low-income child shall include
coverage of dental services necessary to prevent disease
and promote oral health, restore oral structures to
health and function, and treat emergency conditions.
``(B) Permitting use of dental benchmark plans by
certain states.--A State may elect to meet the
requirement of subparagraph (A) through dental coverage
that is equivalent to a benchmark dental benefit package
described in subparagraph (C).
``(C) Benchmark dental benefit packages.--The
benchmark dental benefit packages are as follows:
``(i) FEHBP children's dental coverage.--A
dental benefits plan under chapter 89A of title 5,
United States Code, that has been selected most
frequently by employees seeking dependent
coverage, among such plans that provide such
dependent coverage, in either of the previous 2
plan years.
``(ii) State employee dependent dental
coverage.--A dental benefits plan that is offered
and generally available to State employees in the
State involved and that has been selected most
frequently by employees seeking dependent
coverage, among such plans that provide such
dependent coverage, in either of the previous 2
plan years.
``(iii) Coverage offered through commercial
dental plan.--A dental benefits plan that has the
largest insured commercial, non-medicaid
enrollment of dependent covered lives of such
plans that is offered in the State involved.''.
(2) Assuring access to care.--Section 2102(a)(7)(B) (42
U.S.C. 1397bb(c)(2)) is amended by inserting ``and services
described in section 2103(c)(5)'' after ``emergency services''.
(3) <> Effective date.--The
amendments made by paragraphs (1) and (2) shall apply to
coverage of items and services furnished on or after October 1,
2009.

(b) State Option To Provide Dental-Only Supplemental Coverage.--
(1) In general.--Section 2110(b) (42 U.S.C. 1397jj(b)) is
amended--
(A) in paragraph (1)(C), by inserting ``, subject to
paragraph (5),'' after ``under title XIX or''; and
(B) by adding at the end the following new
paragraph:

[[Page 86]]
123 STAT. 86

``(5) Option for states with a separate chip program to
provide dental-only supplemental coverage.--
``(A) In general.--Subject to subparagraphs (B) and
(C), in the case of any child who is enrolled in a group
health plan or health insurance coverage offered through
an employer who would, but for the application of
paragraph (1)(C), satisfy the requirements for being a
targeted low-income child under a State child health
plan that is implemented under this title, a State may
waive the application of such paragraph to the child in
order to provide--
``(i) dental coverage consistent with the
requirements of subsection (c)(5) of section 2103;
or
``(ii) cost-sharing protection for dental
coverage consistent with such requirements and the
requirements of subsection (e)(3)(B) of such
section.
``(B) Limitation.--A State may limit the application
of a waiver of paragraph (1)(C) to children whose family
income does not exceed a level specified by the State,
so long as the level so specified does not exceed the
maximum income level otherwise established for other
children under the State child health plan.
``(C) Conditions.--A State may not offer dental-only
supplemental coverage under this paragraph unless the
State satisfies the following conditions:
``(i) Income eligibility.--The State child
health plan under this title--
``(I) has the highest income
eligibility standard permitted under
this title (or a waiver) as of January
1, 2009;
``(II) does not limit the acceptance
of applications for children or impose
any numerical limitation, waiting list,
or similar limitation on the eligibility
of such children for child health
assistance under such State plan; and
``(III) provides benefits to all
children in the State who apply for and
meet eligibility standards.
``(ii) No more favorable treatment.--The State
child health plan may not provide more favorable
dental coverage or cost-sharing protection for
dental coverage to children provided dental-only
supplemental coverage under this paragraph than
the dental coverage and cost-sharing protection
for dental coverage provided to targeted low-
income children who are eligible for the full
range of child health assistance provided under
the State child health plan.''.
(2) State option to waive waiting period.--Section
2102(b)(1)(B) (42 U.S.C. 1397bb(b)(1)(B)), as amended by section
111(b)(2), is amended--
(A) in clause (ii), by striking ``and'' at the end;
(B) in clause (iii), by striking the period and
inserting ``; and''; and
(C) by adding at the end the following new clause:
``(iv) at State option, may not apply a
waiting period in the case of a child provided
dental-only supplemental coverage under section
2110(b)(5).''.

[[Page 87]]
123 STAT. 87

(c) <> Dental Education for Parents of
Newborns.--The Secretary shall develop and implement, through entities
that fund or provide perinatal care services to targeted low-income
children under a State child health plan under title XXI of the Social
Security Act, a program to deliver oral health educational materials
that inform new parents about risks for, and prevention of, early
childhood caries and the need for a dental visit within their newborn's
first year of life.

(d) Provision of Dental Services Through FQHCs.--
(1) Medicaid.--Section 1902(a) (42 U.S.C. 1396a(a)) is
amended--
(A) by striking ``and'' at the end of paragraph
(70);
(B) by striking the period at the end of paragraph
(71) and inserting ``; and''; and
(C) by inserting after paragraph (71) the following
new paragraph:
``(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.''.
(2) CHIP.--Section 2107(e)(1) <> (42 U.S.C. 1397g(e)(1)), as amended by subsections
(a)(2) and (d)(2) of section 203, is amended by inserting after
subparagraph (B) the following new subparagraph (and
redesignating the succeeding subparagraphs accordingly):
``(C) Section 1902(a)(72) (relating to limiting FQHC
contracting for provision of dental services).''.
(3) <> Effective date.--The
amendments made by this subsection shall take effect on January
1, 2009.

(e) Reporting Information on Dental Health.--
(1) Medicaid.--Section 1902(a)(43)(D)(iii) (42 U.S.C.
1396a(a)(43)(D)(iii)) is amended by inserting ``and other
information relating to the provision of dental services to such
children described in section 2108(e)'' after ``receiving dental
services,''.
(2) CHIP.--Section 2108 (42 U.S.C. 1397hh) is amended by
adding at the end the following new subsection:

``(e) Information on Dental Care for Children.--
``(1) In general.--Each annual report under subsection (a)
shall include the following information with respect to care and
services described in section 1905(r)(3) provided to targeted
low-income children enrolled in the State child health plan
under this title at any time during the year involved:
``(A) The number of enrolled children by age
grouping used for reporting purposes under section
1902(a)(43).
``(B) For children within each such age grouping,
information of the type contained in questions 12(a)-(c)
of CMS Form 416 (that consists of the number of enrolled
targeted low income children who receive any,
preventive, or restorative dental care under the State
plan).
``(C) For the age grouping that includes children 8
years of age, the number of such children who have
received a protective sealant on at least one permanent
molar tooth.
``(2) Inclusion of information on enrollees in managed care
plans.--The information under paragraph (1) shall include
information on children who are enrolled in managed care plans
and other private health plans and contracts with

[[Page 88]]
123 STAT. 88

such plans under this title shall provide for the reporting of
such information by such plans to the State.''.
(3) <> Effective date.--The
amendments made by this subsection shall be effective for annual
reports submitted for years beginning after date of enactment.

(f) <> Improved Accessibility of
Dental Provider Information to Enrollees Under Medicaid and CHIP.--The
Secretary shall--
(1) work with States, pediatric dentists, and other dental
providers (including providers that are, or are affiliated with,
a school of dentistry) to include, not later than 6 months after
the date of the enactment of this Act, on the Insure Kids Now
website (http://www.insurekidsnow.gov/) and hotline (1-877-KIDS-
NOW) (or on any successor websites or hotlines) a current and
accurate list of all such dentists and providers within each
State that provide dental services to children enrolled in the
State plan (or waiver) under Medicaid or the State child health
plan (or waiver) under CHIP, and shall ensure that such list is
updated at least quarterly; and
(2) work with States to include, not later than 6 months
after the date of the enactment of this Act, a description of
the dental services provided under each State plan (or waiver)
under Medicaid and each State child health plan (or waiver)
under CHIP on such Insure Kids Now website, and shall ensure
that such list is updated at least annually.

(g) Inclusion of Status of Efforts To Improve Dental Care in Reports
on the Quality of Children's Health Care Under Medicaid and CHIP.--
Section 1139A(a), as added by section 401(a), is amended--
(1) in paragraph (3)(B)(ii), by inserting ``and, with
respect to dental care, conditions requiring the restoration of
teeth, relief of pain and infection, and maintenance of dental
health'' after ``chronic conditions''; and
(2) in paragraph (6)(A)(ii), by inserting ``dental care,''
after ``preventive health services,''.

(h) GAO Study and Report.--
(1) Study.--The Comptroller General of the United States
shall provide for a study that examines--
(A) access to dental services by children in
underserved areas;
(B) children's access to oral health care, including
preventive and restorative services, under Medicaid and
CHIP, including--
(i) the extent to which dental providers are
willing to treat children eligible for such
programs;
(ii) information on such children's access to
networks of care, including such networks that
serve special needs children; and
(iii) geographic availability of oral health
care, including preventive and restorative
services, under such programs; and
(C) the feasibility and appropriateness of using
qualified mid-level dental health providers, in
coordination with dentists, to improve access for
children to oral health services and public health
overall.
(2) Report.--Not later than 18 months year after the date of
the enactment of this Act, the Comptroller General shall submit
to Congress a report on the study conducted under

[[Page 89]]
123 STAT. 89

paragraph (1). The report shall include recommendations for such
Federal and State legislative and administrative changes as the
Comptroller General determines are necessary to address any
barriers to access to oral health care, including preventive and
restorative services, under Medicaid and CHIP that may exist.
SEC. 502. MENTAL HEALTH PARITY IN CHIP PLANS.

(a) Assurance of Parity.--Section 2103(c) (42 U.S.C. 1397cc(c)), as
amended by section 501(a)(1)(B), is amended by inserting after paragraph
(5), the following:
``(6) Mental health services parity.--
``(A) In general.--In the case of a State child
health plan that provides both medical and surgical
benefits and mental health or substance use disorder
benefits, such plan shall ensure that the financial
requirements and treatment limitations applicable to
such mental health or substance use disorder benefits
comply with the requirements of section 2705(a) of the
Public Health Service Act in the same manner as such
requirements apply to a group health plan.
``(B) Deemed compliance.--To the extent that a State
child health plan includes coverage with respect to an
individual described in section 1905(a)(4)(B) and
covered under the State plan under section
1902(a)(10)(A) of the services described in section
1905(a)(4)(B) (relating to early and periodic screening,
diagnostic, and treatment services defined in section
1905(r)) and provided in accordance with section
1902(a)(43), such plan shall be deemed to satisfy the
requirements of subparagraph (A).''.

(b) Conforming Amendments.--Section 2103 (42 U.S.C. 1397cc) is
amended--
(1) in subsection (a), as amended by section
501(a)(1)(A)(i), in the matter preceding paragraph (1), by
inserting ``, (6),'' after ``(5)''; and
(2) in subsection (c)(2), by striking subparagraph (B) and
redesignating subparagraphs (C) and (D) as subparagraphs (B) and
(C), respectively.
SEC. 503. APPLICATION OF PROSPECTIVE PAYMENT SYSTEM FOR SERVICES
PROVIDED BY FEDERALLY-QUALIFIED HEALTH
CENTERS AND RURAL HEALTH CLINICS.

(a) Application of Prospective Payment System.--
(1) In general.--Section 2107(e)(1) (42 U.S.C.
1397gg(e)(1)), as amended by section 501(c)(2) is amended by
inserting after subparagraph (C) the following new subparagraph
(and redesignating the succeeding subparagraphs accordingly):
``(D) Section 1902(bb) (relating to payment for
services provided by Federally-qualified health centers
and rural health clinics).''.
(2) <> Effective date.--The
amendment made by paragraph (1) shall apply to services provided
on or after October 1, 2009.

(b) Transition Grants.--
(1) Appropriation.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated to the Secretary
for fiscal year 2009, $5,000,000, to remain available

[[Page 90]]
123 STAT. 90

until expended, for the purpose of awarding grants to States
with State child health plans under CHIP that are operated
separately from the State Medicaid plan under title XIX of the
Social Security Act (including any waiver of such plan), or in
combination with the State Medicaid plan, for expenditures
related to transitioning to compliance with the requirement of
section 2107(e)(1)(D) of the Social Security Act (as added by
subsection (a)) to apply the prospective payment system
established under section 1902(bb) of the such Act (42 U.S.C.
1396a(bb)) to services provided by Federally-qualified health
centers and rural health clinics.
(2) Monitoring and report.--The Secretary shall monitor the
impact of the application of such prospective payment system on
the States described in paragraph (1) and, not later than
October 1, 2011, shall report to Congress on any effect on
access to benefits, provider payment rates, or scope of benefits
offered by such States as a result of the application of such
payment system.
SEC. 504. PREMIUM GRACE PERIOD.

(a) In General.--Section 2103(e)(3) (42 U.S.C. 1397cc(e)(3)) is
amended by adding at the end the following new subparagraph:
``(C) Premium grace period.--The State child health
plan--
``(i) shall afford individuals enrolled under
the plan a grace period of at least 30 days from
the beginning of a new coverage period to make
premium payments before the individual's coverage
under the plan may be terminated; and
``(ii) shall provide to such an individual,
not later than 7 days after the first day of such
grace period, notice--
``(I) that failure to make a premium
payment within the grace period will
result in termination of coverage under
the State child health plan; and
``(II) of the individual's right to
challenge the proposed termination
pursuant to the applicable Federal
regulations.
For purposes of clause (i), the term `new coverage
period' means the month immediately following the last
month for which the premium has been paid.''.

(b) <> Effective Date.--The amendment
made by subsection (a) shall apply to new coverage periods beginning on
or after the date of the enactment of this Act.
SEC. 505. CLARIFICATION OF COVERAGE OF SERVICES PROVIDED THROUGH
SCHOOL-BASED HEALTH CENTERS.

(a) In General.--Section 2103(c) (42 U.S.C. 1397cc(c)), as amended
by section 501(a)(1)(B), is amended by adding at the end the following
new paragraph:
``(8) Availability of coverage for items and services
furnished through school-based health centers.--Nothing in this
title shall be construed as limiting a State's ability to
provide child health assistance for covered items and services
that are furnished through school-based health centers (as
defined in section 2110(c)(9)).''.

(b) Definition.--Section 2110(c) (42 U.S.C. 1397jj) is amended by
adding at the end the following:

[[Page 91]]
123 STAT. 91

``(9) School-based health center.--
``(A) In general.--The term `school-based health
center' means a health clinic that--
``(i) is located in or near a school facility
of a school district or board or of an Indian
tribe or tribal organization;
``(ii) is organized through school, community,
and health provider relationships;
``(iii) is administered by a sponsoring
facility;
``(iv) provides through health professionals
primary health services to children in accordance
with State and local law, including laws relating
to licensure and certification; and
``(v) satisfies such other requirements as a
State may establish for the operation of such a
clinic.
``(B) Sponsoring facility.--For purposes of
subparagraph (A)(iii), the term `sponsoring facility'
includes any of the following:
``(i) A hospital.
``(ii) A public health department.
``(iii) A community health center.
``(iv) A nonprofit health care agency.
``(v) A school or school system.
``(vi) A program administered by the Indian
Health Service or the Bureau of Indian Affairs or
operated by an Indian tribe or a tribal
organization.''.
SEC. 506. MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION.

(a) In General.--Title XIX (42 U.S.C. 1396 et seq.) is amended by
inserting before section 1901 the following new section:


``medicaid and chip payment and access commission


``Sec. 1900. <> (a) Establishment.--There is
hereby established the Medicaid and CHIP Payment and Access Commission
(in this section referred to as `MACPAC').

``(b) Duties.--
``(1) Review of access policies and annual reports.--MACPAC
shall--
``(A) review policies of the Medicaid program
established under this title (in this section referred
to as `Medicaid') and the State Children's Health
Insurance Program established under title XXI (in this
section referred to as `CHIP') affecting children's
access to covered items and services, including topics
described in paragraph (2);
``(B) make recommendations to Congress concerning
such access policies;
``(C) by not later than March 1 of each year
(beginning with 2010), submit a report to Congress
containing the results of such reviews and MACPAC's
recommendations concerning such policies; and
``(D) by not later than June 1 of each year
(beginning with 2010), submit a report to Congress
containing an examination of issues affecting Medicaid
and CHIP, including the implications of changes in
health care delivery in the United States and in the
market for health care services on such programs.

[[Page 92]]
123 STAT. 92

``(2) Specific topics to be reviewed.--Specifically, MACPAC
shall review and assess the following:
``(A) Medicaid and chip payment policies.--Payment
policies under Medicaid and CHIP, including--
``(i) the factors affecting expenditures for
items and services in different sectors, including
the process for updating hospital, skilled nursing
facility, physician, Federally-qualified health
center, rural health center, and other fees;
``(ii) payment methodologies; and
``(iii) the relationship of such factors and
methodologies to access and quality of care for
Medicaid and CHIP beneficiaries.
``(B) Interaction of medicaid and chip payment
policies with health care delivery generally.--The
effect of Medicaid and CHIP payment policies on access
to items and services for children and other Medicaid
and CHIP populations other than under this title or
title XXI and the implications of changes in health care
delivery in the United States and in the general market
for health care items and services on Medicaid and CHIP.
``(C) Other access policies.--The effect of other
Medicaid and CHIP policies on access to covered items
and services, including policies relating to
transportation and language barriers.
``(3) Creation of early-warning system.--MACPAC shall create
an early-warning system to identify provider shortage areas or
any other problems that threaten access to care or the health
care status of Medicaid and CHIP beneficiaries.
``(4) Comments on certain secretarial reports.--If the
Secretary submits to Congress (or a committee of Congress) a
report that is required by law and that relates to access
policies, including with respect to payment policies, under
Medicaid or CHIP, the Secretary shall transmit a copy of the
report to MACPAC. MACPAC shall review the report and, not later
than 6 months after the date of submittal of the Secretary's
report to Congress, shall submit to the appropriate committees
of Congress written comments on such report. Such comments may
include such recommendations as MACPAC deems appropriate.
``(5) Agenda and additional reviews.--MACPAC shall consult
periodically with the chairmen and ranking minority members of
the appropriate committees of Congress regarding MACPAC's agenda
and progress towards achieving the agenda. MACPAC may conduct
additional reviews, and submit additional reports to the
appropriate committees of Congress, from time to time on such
topics relating to the program under this title or title XXI as
may be requested by such chairmen and members and as MACPAC
deems appropriate.
``(6) Availability of reports.--MACPAC shall transmit to the
Secretary a copy of each report submitted under this subsection
and shall make such reports available to the public.
``(7) Appropriate committee of congress.--For purposes of
this section, the term `appropriate committees of Congress'
means the Committee on Energy and Commerce of the House of
Representatives and the Committee on Finance of the Senate.

[[Page 93]]
123 STAT. 93

``(8) Voting and reporting requirements.--With respect to
each recommendation contained in a report submitted under
paragraph (1), each member of MACPAC shall vote on the
recommendation, and MACPAC shall include, by member, the results
of that vote in the report containing the recommendation.
``(9) Examination of budget consequences.--Before making any
recommendations, MACPAC shall examine the budget consequences of
such recommendations, directly or through consultation with
appropriate expert entities.

``(c) Membership.--
``(1) Number and appointment.--MACPAC shall be composed of
17 members appointed by the Comptroller General of the United
States.
``(2) Qualifications.--
``(A) In general.--The membership of MACPAC shall
include individuals who have had direct experience as
enrollees or parents of enrollees in Medicaid or CHIP
and individuals with national recognition for their
expertise in Federal safety net health programs, health
finance and economics, actuarial science, health
facility management, health plans and integrated
delivery systems, reimbursement of health facilities,
health information technology, pediatric physicians,
dentists, and other providers of health services, and
other related fields, who provide a mix of different
professionals, broad geographic representation, and a
balance between urban and rural representatives.
``(B) Inclusion.--The membership of MACPAC shall
include (but not be limited to) physicians and other
health professionals, employers, third-party payers, and
individuals with expertise in the delivery of health
services. Such membership shall also include consumers
representing children, pregnant women, the elderly, and
individuals with disabilities, current or former
representatives of State agencies responsible for
administering Medicaid, and current or former
representatives of State agencies responsible for
administering CHIP.
``(C) Majority nonproviders.--Individuals who are
directly involved in the provision, or management of the
delivery, of items and services covered under Medicaid
or CHIP shall not constitute a majority of the
membership of MACPAC.
``(D) Ethical disclosure.--The Comptroller General
of the United States shall establish a system for public
disclosure by members of MACPAC of financial and other
potential conflicts of interest relating to such
members. Members of MACPAC shall be treated as employees
of Congress for purposes of applying title I of the
Ethics in Government Act of 1978 (Public Law 95-521).
``(3) Terms.--
``(A) In general.--The terms of members of MACPAC
shall be for 3 years except that the Comptroller General
of the United States shall designate staggered terms for
the members first appointed.
``(B) Vacancies.--Any member appointed to fill a
vacancy occurring before the expiration of the term for
which the member's predecessor was appointed shall be

[[Page 94]]
123 STAT. 94

appointed only for the remainder of that term. A member
may serve after the expiration of that member's term
until a successor has taken office. A vacancy in MACPAC
shall be filled in the manner in which the original
appointment was made.
``(4) Compensation.--While serving on the business of MACPAC
(including travel time), a member of MACPAC shall be entitled to
compensation at the per diem equivalent of the rate provided for
level IV of the Executive Schedule under section 5315 of title
5, United States Code; and while so serving away from home and
the member's regular place of business, a member may be allowed
travel expenses, as authorized by the Chairman of MACPAC.
Physicians serving as personnel of MACPAC may be provided a
physician comparability allowance by MACPAC in the same manner
as Government physicians may be provided such an allowance by an
agency under section 5948 of title 5, United States Code, and
for such purpose subsection (i) of such section shall apply to
MACPAC in the same manner as it applies to the Tennessee Valley
Authority. For purposes of pay (other than pay of members of
MACPAC) and employment benefits, rights, and privileges, all
personnel of MACPAC shall be treated as if they were employees
of the United States Senate.
``(5) Chairman; vice chairman.--The Comptroller General of
the United States shall designate a member of MACPAC, at the
time of appointment of the member as Chairman and a member as
Vice Chairman for that term of appointment, except that in the
case of vacancy of the Chairmanship or Vice Chairmanship, the
Comptroller General of the United States may designate another
member for the remainder of that member's term.
``(6) Meetings.--MACPAC shall meet at the call of the
Chairman.

``(d) Director and Staff; Experts and Consultants.--Subject to such
review as the Comptroller General of the United States deems necessary
to assure the efficient administration of MACPAC, MACPAC may--
``(1) employ and fix the compensation of an Executive
Director (subject to the approval of the Comptroller General of
the United States) and such other personnel as may be necessary
to carry out its duties (without regard to the provisions of
title 5, United States Code, governing appointments in the
competitive service);
``(2) seek such assistance and support as may be required in
the performance of its duties from appropriate Federal
departments and agencies;
``(3) enter into contracts or make other arrangements, as
may be necessary for the conduct of the work of MACPAC (without
regard to section 3709 of the Revised Statutes (41 U.S.C. 5));
``(4) make advance, progress, and other payments which
relate to the work of MACPAC;
``(5) provide transportation and subsistence for persons
serving without compensation; and
``(6) prescribe such rules and regulations as it deems
necessary with respect to the internal organization and
operation of MACPAC.

[[Page 95]]
123 STAT. 95

``(e) Powers.--
``(1) Obtaining official data.--MACPAC may secure directly
from any department or agency of the United States information
necessary to enable it to carry out this section. Upon request
of the Chairman, the head of that department or agency shall
furnish that information to MACPAC on an agreed upon schedule.
``(2) Data collection.--In order to carry out its functions,
MACPAC shall--
``(A) utilize existing information, both published
and unpublished, where possible, collected and assessed
either by its own staff or under other arrangements made
in accordance with this section;
``(B) carry out, or award grants or contracts for,
original research and experimentation, where existing
information is inadequate; and
``(C) adopt procedures allowing any interested party
to submit information for MACPAC's use in making reports
and recommendations.
``(3) Access of gao to information.--The Comptroller General
of the United States shall have unrestricted access to all
deliberations, records, and nonproprietary data of MACPAC,
immediately upon request.
``(4) Periodic audit.--MACPAC shall be subject to periodic
audit by the Comptroller General of the United States.

``(f) Authorization of Appropriations.--
``(1) Request for appropriations.--MACPAC shall submit
requests for appropriations in the same manner as the
Comptroller General of the United States submits requests for
appropriations, but amounts appropriated for MACPAC shall be
separate from amounts appropriated for the Comptroller General
of the United States.
``(2) Authorization.--There are authorized to be
appropriated such sums as may be necessary to carry out the
provisions of this section.''.

(b) <> Deadline for Initial Appointments.--
Not later than January 1, 2010, the Comptroller General of the United
States shall appoint the initial members of the Medicaid and CHIP
Payment and Access Commission established under section 1900 of the
Social Security Act (as added by subsection (a)).

(c) <> Annual Report on Medicaid.--Not
later than January 1, 2010, and annually thereafter, the Secretary, in
consultation with the Secretary of the Treasury, the Secretary of Labor,
and the States (as defined for purposes of Medicaid), shall submit an
annual report to Congress on the financial status of, enrollment in, and
spending trends for, Medicaid for the fiscal year ending on September 30
of the preceding year.

[[Page 96]]
123 STAT. 96

TITLE VI--PROGRAM INTEGRITY AND OTHER MISCELLANEOUS PROVISIONS

Subtitle A--Program Integrity and Data Collection

SEC. 601. PAYMENT ERROR RATE MEASUREMENT (``PERM'').

(a) Expenditures Related to Compliance With Requirements.--
(1) Enhanced payments.--Section 2105(c) (42 U.S.C.
1397ee(c)), as amended by section 301(a), is amended by adding
at the end the following new paragraph:
``(11) Enhanced payments.--Notwithstanding subsection (b),
the enhanced FMAP with respect to payments under subsection (a)
for expenditures related to the administration of the payment
error rate measurement (PERM) requirements applicable to the
State child health plan in accordance with the Improper Payments
Information Act of 2002 and parts 431 and 457 of title 42, Code
of Federal Regulations (or any related or successor guidance or
regulations) shall in no event be less than 90 percent.''.
(2) Exclusion of from cap on administrative expenditures.--
Section 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)C)), as amended by
section 302(b)), is amended by adding at the end the following:
``(iv) Payment error rate measurement (perm)
expenditures.--Expenditures related to the
administration of the payment error rate
measurement (PERM) requirements applicable to the
State child health plan in accordance with the
Improper Payments Information Act of 2002 and
parts 431 and 457 of title 42, Code of Federal
Regulations (or any related or successor guidance
or regulations).''.

(b) <> Final Rule Required To Be in
Effect for All States.--Notwithstanding parts 431 and 457 of title 42,
Code of Federal Regulations (as in effect on the date of enactment of
this Act), the Secretary shall not calculate or publish any national or
State-specific error rate based on the application of the payment error
rate measurement (in this section referred to as ``PERM'') requirements
to CHIP until after the date that is 6 months after the date on which a
new final rule (in this section referred to as the ``new final rule'')
promulgated after the date of the enactment of this Act and implementing
such requirements in accordance with the requirements of subsection (c)
is in effect for all States. Any calculation of a national error rate or
a State specific error rate after such new final rule in effect for all
States may only be inclusive of errors, as defined in such new final
rule or in guidance issued within a reasonable time frame after the
effective date for such new final rule that includes detailed guidance
for the specific methodology for error determinations.

(c) Requirements for New Final Rule.--For purposes of subsection
(b), the requirements of this subsection are that the new final rule
implementing the PERM requirements shall--
(1) include--

[[Page 97]]
123 STAT. 97

(A) clearly defined criteria for errors for both
States and providers;
(B) a clearly defined process for appealing error
determinations by--
(i) review contractors; or
(ii) the agency and personnel described in
section 431.974(a)(2) of title 42, Code of Federal
Regulations, as in effect on September 1, 2007,
responsible for the development, direction,
implementation, and evaluation of eligibility
reviews and associated activities; and
(C) clearly defined responsibilities and deadlines
for States in implementing any corrective action plans;
and
(2) provide that the payment error rate determined for a
State shall not take into account payment errors resulting from
the State's verification of an applicant's self-declaration or
self-certification of eligibility for, and the correct amount
of, medical assistance or child health assistance, if the State
process for verifying an applicant's self-declaration or self-
certification satisfies the requirements for such process
applicable under regulations promulgated by the Secretary or
otherwise approved by the Secretary.

(d) Option for Application of Data for States in First Application
Cycle Under the Interim Final Rule.--After the new final rule
implementing the PERM requirements in accordance with the requirements
of subsection (c) is in effect for all States, a State for which the
PERM requirements were first in effect under an interim final rule for
fiscal year 2007 or under a final rule for fiscal year 2008 may elect to
accept any payment error rate determined in whole or in part for the
State on the basis of data for that fiscal year or may elect to not have
any payment error rate determined on the basis of such data and,
instead, shall be treated as if fiscal year 2010 or fiscal year 2011
were the first fiscal year for which the PERM requirements apply to the
State.
(e) Harmonization of MEQC and PERM.--
(1) Reduction of redundancies.--The Secretary shall review
the Medicaid Eligibility Quality Control (in this subsection
referred to as the ``MEQC'') requirements with the PERM
requirements and coordinate consistent implementation of both
sets of requirements, while reducing redundancies.
(2) State option to apply perm data.--A State may elect, for
purposes of determining the erroneous excess payments for
medical assistance ratio applicable to the State for a fiscal
year under section 1903(u) of the Social Security Act (42 U.S.C.
1396b(u)) to substitute data resulting from the application of
the PERM requirements to the State after the new final rule
implementing such requirements is in effect for all States for
data obtained from the application of the MEQC requirements to
the State with respect to a fiscal year.
(3) State option to apply meqc data.--For purposes of
satisfying the requirements of subpart Q of part 431 of title
42, Code of Federal Regulations, relating to Medicaid
eligibility reviews, a State may elect to substitute data
obtained through MEQC reviews conducted in accordance with
section 1903(u) of the Social Security Act (42 U.S.C. 1396b(u))
for data required for purposes of PERM requirements, but only if
the State

[[Page 98]]
123 STAT. 98

MEQC reviews are based on a broad, representative sample of
Medicaid applicants or enrollees in the States.

(f) Identification of Improved State-Specific Sample Sizes.--The
Secretary shall establish State-specific sample sizes for application of
the PERM requirements with respect to State child health plans for
fiscal years beginning with the first fiscal year that begins on or
after the date on which the new final rule is in effect for all States,
on the basis of such information as the Secretary determines
appropriate. In establishing such sample sizes, the Secretary shall, to
the greatest extent practicable--
(1) minimize the administrative cost burden on States under
Medicaid and CHIP; and
(2) maintain State flexibility to manage such programs.

(g) Time for Promulgation of Final Rule.--The final rule
implementing the PERM requirements under subsection (b) shall be
promulgated not later than 6 months after the date of enactment of this
Act.
SEC. 602. IMPROVING DATA COLLECTION.

(a) Increased Appropriation.--Section 2109(b)(2) (42 U.S.C.
1397ii(b)(2)) is amended by striking ``$10,000,000 for fiscal year
2000'' and inserting ``$20,000,000 for fiscal year 2009''.
(b) Use of Additional Funds.--Section 2109(b) (42 U.S.C. 1397ii(b)),
as amended by subsection (a), is amended--
(1) by redesignating paragraph (2) as paragraph (4); and
(2) by inserting after paragraph (1), the following new
paragraphs:
``(2) Additional requirements.--In addition to making the
adjustments required to produce the data described in paragraph
(1), with respect to data collection occurring for fiscal years
beginning with fiscal year 2009, in appropriate consultation
with the Secretary of Health and Human Services, the Secretary
of Commerce shall do the following:
``(A) Make appropriate adjustments to the Current
Population Survey to develop more accurate State-
specific estimates of the number of children enrolled in
health coverage under title XIX or this title.
``(B) Make appropriate adjustments to the Current
Population Survey to improve the survey estimates used
to determine the child population growth factor under
section 2104(m)(5)(B) and any other data necessary for
carrying out this title.
``(C) Include health insurance survey information in
the American Community Survey related to children.
``(D) Assess whether American Community Survey
estimates, once such survey data are first available,
produce more reliable estimates than the Current
Population Survey with respect to the purposes described
in subparagraph (B).
``(E) On the basis of the assessment required under
subparagraph (D), recommend to the Secretary of Health
and Human Services whether American Community Survey
estimates should be used in lieu of, or in some
combination with, Current Population Survey estimates
for the purposes described in subparagraph (B).

[[Page 99]]
123 STAT. 99

``(F) Continue making the adjustments described in
the last sentence of paragraph (1) with respect to
expansion of the sample size used in State sampling
units, the number of sampling units in a State, and
using an appropriate verification element.
``(3) Authority for the secretary of health and human
services to transition to the use of all, or some combination
of, acs estimates upon recommendation of the secretary of
commerce.--If, on the basis of the assessment required under
paragraph (2)(D), the Secretary of Commerce recommends to the
Secretary of Health and Human Services that American Community
Survey estimates should be used in lieu of, or in some
combination with, Current Population Survey estimates for the
purposes described in paragraph (2)(B), the Secretary of Health
and Human Services, in consultation with the States, may provide
for a period during which the Secretary may transition from
carrying out such purposes through the use of Current Population
Survey estimates to the use of American Community Survey
estimates (in lieu of, or in combination with the Current
Population Survey estimates, as recommended), provided that any
such transition is implemented in a manner that is designed to
avoid adverse impacts upon States with approved State child
health plans under this title.''.
SEC. 603. UPDATED FEDERAL EVALUATION OF CHIP.

Section 2108(c) (42 U.S.C. 1397hh(c)) is amended by striking
paragraph (5) and inserting the following:
``(5) Subsequent evaluation using updated information.--
``(A) <> In general.--The
Secretary, directly or through contracts or interagency
agreements, shall conduct an independent subsequent
evaluation of 10 States with approved child health
plans.
``(B) <> Selection of states
and matters included.--Paragraphs (2) and (3) shall
apply to such subsequent evaluation in the same manner
as such provisions apply to the evaluation conducted
under paragraph (1).
``(C) Submission to congress.--Not later than
December 31, 2011, the Secretary shall submit to
Congress the results of the evaluation conducted under
this paragraph.
``(D) Funding.--Out of any money in the Treasury of
the United States not otherwise appropriated, there are
appropriated $10,000,000 for fiscal year 2010 for the
purpose of conducting the evaluation authorized under
this paragraph. Amounts appropriated under this
subparagraph shall remain available for expenditure
through fiscal year 2012.''.
SEC. 604. ACCESS TO RECORDS FOR IG AND GAO AUDITS AND EVALUATIONS.

Section 2108(d) (42 U.S.C. 1397hh(d)) is amended to read as follows:
``(d) Access to Records for IG and GAO Audits and Evaluations.--For
the purpose of evaluating and auditing the program established under
this title, or title XIX, the Secretary, the Office of Inspector
General, and the Comptroller General shall have access

[[Page 100]]
123 STAT. 100

to any books, accounts, records, correspondence, and other documents
that are related to the expenditure of Federal funds under this title
and that are in the possession, custody, or control of States receiving
Federal funds under this title or political subdivisions thereof, or any
grantee or contractor of such States or political subdivisions.''.
SEC. 605. <> NO FEDERAL FUNDING FOR
ILLEGAL ALIENS; DISALLOWANCE FOR
UNAUTHORIZED EXPENDITURES.

Nothing in this Act allows Federal payment for individuals who are
not legal residents. Titles XI, XIX, and XXI of the Social Security Act
provide for the disallowance of Federal financial participation for
erroneous expenditures under Medicaid and under CHIP, respectively.

Subtitle B--Miscellaneous Health Provisions

SEC. 611. DEFICIT REDUCTION ACT TECHNICAL CORRECTIONS.

(a) Clarification of Requirement To Provide EPSDT Services for All
Children in Benchmark Benefit Packages Under Medicaid.--Section
1937(a)(1) (42 U.S.C. 1396u-7(a)(1)), as inserted by section 6044(a) of
the Deficit Reduction Act of 2005 (Public Law 109-171, 120 Stat. 88), is
amended--
(1) in subparagraph (A)--
(A) in the matter before clause (i)--
(i) by striking ``Notwithstanding any other
provision of this title'' and inserting
``Notwithstanding section 1902(a)(1) (relating to
statewideness), section 1902(a)(10)(B) (relating
to comparability) and any other provision of this
title which would be directly contrary to the
authority under this section and subject to
subsection (E)''; and
(ii) by striking ``enrollment in coverage that
provides'' and inserting ``coverage that'';
(B) in clause (i), by inserting ``provides'' after
``(i)''; and
(C) by striking clause (ii) and inserting the
following:
``(ii) for any individual described in section
1905(a)(4)(B) who is eligible under the State plan
in accordance with paragraphs (10) and (17) of
section 1902(a), consists of the items and
services described in section 1905(a)(4)(B)
(relating to early and periodic screening,
diagnostic, and treatment services defined in
section 1905(r)) and provided in accordance with
the requirements of section 1902(a)(43).'';
(2) in subparagraph (C)--
(A) in the heading, by striking ``wrap-
around'' and inserting ``additional'';
and
(B) by striking ``wrap-around or''; and
(3) by adding at the end the following new subparagraph:
``(E) Rule of construction.--Nothing in this
paragraph shall be construed as--
``(i) requiring a State to offer all or any of
the items and services required by subparagraph
(A)(ii) through an issuer of benchmark coverage
described

[[Page 101]]
123 STAT. 101

in subsection (b)(1) or benchmark equivalent
coverage described in subsection (b)(2);
``(ii) preventing a State from offering all or
any of the items and services required by
subparagraph (A)(ii) through an issuer of
benchmark coverage described in subsection (b)(1)
or benchmark equivalent coverage described in
subsection (b)(2); or
``(iii) affecting a child's entitlement to
care and services described in subsections
(a)(4)(B) and (r) of section 1905 and provided in
accordance with section 1902(a)(43) whether
provided through benchmark coverage, benchmark
equivalent coverage, or otherwise.''.

(b) Correction of Reference to Children in Foster Care Receiving
Child Welfare Services.--Section 1937(a)(2)(B)(viii) (42 U.S.C. 1396u-
7(a)(2)(B)(viii)), as inserted by section 6044(a) of the Deficit
Reduction Act of 2005, is amended by striking ``aid or assistance is
made available under part B of title IV to children in foster care and
individuals'' and inserting ``child welfare services are made available
under part B of title IV on the basis of being a child in foster care
or''.
(c) Transparency.--Section 1937 (42 U.S.C. 1396u-7), as inserted by
section 6044(a) of the Deficit Reduction Act of 2005, is amended by
adding at the end the following:
``(c) <> Publication of Provisions Affected.--With
respect to a State plan amendment to provide benchmark benefits in
accordance with subsections (a) and (b) that is approved by the
Secretary, the Secretary shall publish on the Internet website of the
Centers for Medicare & Medicaid Services, a list of the provisions of
this title that the Secretary has determined do not apply in order to
enable the State to carry out the plan amendment and the reason for each
such determination on the date such approval is made, and shall publish
such list in the Federal Register and not later than 30 days after such
date of approval.''.

(d) <> Effective Date.--The amendments
made by subsections (a), (b), and (c) of this section shall take effect
as if included in the amendment made by section 6044(a) of the Deficit
Reduction Act of 2005.
SEC. 612. REFERENCES TO TITLE XXI.

Section 704 of the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999, as enacted into law by division B of Public Law
106-113 (113 Stat. 1501A-402) <> is repealed.
SEC. 613. <> PROHIBITING INITIATION OF
NEW HEALTH OPPORTUNITY ACCOUNT
DEMONSTRATION PROGRAMS.

After the date of the enactment of this Act, the Secretary of Health
and Human Services may not approve any new demonstration programs under
section 1938 of the Social Security Act (42 U.S.C. 1396u-8).
SEC. 614. <> ADJUSTMENT IN COMPUTATION
OF MEDICAID FMAP TO DISREGARD AN
EXTRAORDINARY EMPLOYER PENSION
CONTRIBUTION.

(a) In General.--Only for purposes of computing the FMAP (as defined
in subsection (e)) for a State for a fiscal year (beginning with fiscal
year 2006) and applying the FMAP under title XIX of the Social Security
Act, any significantly disproportionate

[[Page 102]]
123 STAT. 102

employer pension or insurance fund contribution described in subsection
(b) shall be disregarded in computing the per capita income of such
State, but shall not be disregarded in computing the per capita income
for the continental United States (and Alaska) and Hawaii.
(b) Significantly Disproportionate Employer Pension and Insurance
Fund Contribution.--
(1) In general.--For purposes of this section, a
significantly disproportionate employer pension and insurance
fund contribution described in this subsection with respect to a
State is any identifiable employer contribution towards pension
or other employee insurance funds that is estimated to accrue to
residents of such State for a calendar year (beginning with
calendar year 2003) if the increase in the amount so estimated
exceeds 25 percent of the total increase in personal income in
that State for the year involved.
(2) Data to be used.--For estimating and adjustment a FMAP
already calculated as of the date of the enactment of this Act
for a State with a significantly disproportionate employer
pension and insurance fund contribution, the Secretary shall use
the personal income data set originally used in calculating such
FMAP.
(3) Special adjustment for negative growth.--If in any
calendar year the total personal income growth in a State is
negative, an employer pension and insurance fund contribution
for the purposes of calculating the State's FMAP for a calendar
year shall not exceed 125 percent of the amount of such
contribution for the previous calendar year for the State.

(c) Hold Harmless.--No State shall have its FMAP for a fiscal year
reduced as a result of the application of this section.
(d) Report.--Not later than May 15, 2009, the Secretary shall submit
to the Congress a report on the problems presented by the current
treatment of pension and insurance fund contributions in the use of
Bureau of Economic Affairs calculations for the FMAP and for Medicaid
and on possible alternative methodologies to mitigate such problems.
(e) FMAP Defined.--For purposes of this section, the term ``FMAP''
means the Federal medical assistance percentage, as defined in section
1905(b) of the Social Security Act (42 U.S.C. 1396(d)).
SEC. 615. <> CLARIFICATION TREATMENT OF
REGIONAL MEDICAL CENTER.

(a) In General.--Nothing in section 1903(w) of the Social Security
Act (42 U.S.C. 1396b(w)) shall be construed by the Secretary of Health
and Human Services as prohibiting a State's use of funds as the non-
Federal share of expenditures under title XIX of such Act where such
funds are transferred from or certified by a publicly-owned regional
medical center located in another State and described in subsection (b),
so long as the Secretary determines that such use of funds is proper and
in the interest of the program under title XIX.
(b) Center Described.--A center described in this subsection is a
publicly-owned regional medical center that--
(1) provides level 1 trauma and burn care services;
(2) provides level 3 neonatal care services;

[[Page 103]]
123 STAT. 103

(3) is obligated to serve all patients, regardless of
ability to pay;
(4) is located within a Standard Metropolitan Statistical
Area (SMSA) that includes at least 3 States;
(5) provides services as a tertiary care provider for
patients residing within a 125-mile radius; and
(6) meets the criteria for a disproportionate share hospital
under section 1923 of such Act (42 U.S.C. 1396r-4) in at least
one State other than the State in which the center is located.
SEC. 616. EXTENSION OF MEDICAID DSH ALLOTMENTS FOR TENNESSEE AND
HAWAII.

Section 1923(f)(6) (42 U.S.C. 1396r-4(f)(6)), as amended by section
202 of the Medicare Improvements for Patients and Providers Act of 2008
(Public Law 110-275) is amended--
(1) in the paragraph heading, by striking ``2009 and the
first calendar quarter of fiscal year 2010'' and inserting
``2011 and the first calendar quarter of fiscal year 2012'';
(2) in subparagraph (A)--
(A) in clause (i)--
(i) in the second sentence--
(I) by striking ``and 2009'' and
inserting ``, 2009, 2010, and 2011'';
and
(II) by striking ``such portion
of''; and
(ii) in the third sentence, by striking ``2010
for the period ending on December 31, 2009'' and
inserting ``2012 for the period ending on December
31, 2011'';
(B) in clause (ii), by striking ``or for a period in
fiscal year 2010'' and inserting ``2010, 2011, or for
period in fiscal year 2012''; and
(C) in clause (iv)--
(i) in the clause heading, by striking ``2009
and the first calendar quarter of fiscal year
2010'' and inserting ``2011 and the first calendar
quarter of fiscal year 2012''; and
(ii) in each of subclauses (I) and (II), by
striking `` or for a period in fiscal year 2010''
and inserting ``2010, 2011, or for a period in
fiscal year 2012''; and
(3) in subparagraph (B)--
(A) in clause (i)--
(i) in the first sentence, by striking
``2009'' and inserting ``2011''; and
(ii) in the second sentence, by striking
``2010 for the period ending on December 31,
2009'' and inserting ``2012 for the period ending
on December 31, 2011''.
SEC. 617. GAO REPORT ON MEDICAID MANAGED CARE PAYMENT RATES.

Not later than 18 months after the date of the enactment of this
Act, the Comptroller General of the United States shall submit a report
to the Committee on Finance of the Senate and the Committee on Energy
and Commerce of the House of Representatives analyzing the extent to
which State payment rates for medicaid managed care organizations under
Medicaid are actuarially sound.

[[Page 104]]
123 STAT. 104

Subtitle C--Other Provisions

SEC. 621. <> OUTREACH REGARDING HEALTH
INSURANCE OPTIONS AVAILABLE TO CHILDREN.

(a) Definitions.--In this section--
(1) the terms ``Administration'' and ``Administrator'' means
the Small Business Administration and the Administrator thereof,
respectively;
(2) the term ``certified development company'' means a
development company participating in the program under title V
of the Small Business Investment Act of 1958 (15 U.S.C. 695 et
seq.);
(3) the term ``Medicaid program'' means the program
established under title XIX of the Social Security Act (42
U.S.C. 1396 et seq.);
(4) the term ``Service Corps of Retired Executives'' means
the Service Corps of Retired Executives authorized by section
8(b)(1) of the Small Business Act (15 U.S.C. 637(b)(1));
(5) the term ``small business concern'' has the meaning
given that term in section 3 of the Small Business Act (15
U.S.C. 632);
(6) the term ``small business development center'' means a
small business development center described in section 21 of the
Small Business Act (15 U.S.C. 648);
(7) the term ``State'' has the meaning given that term for
purposes of title XXI of the Social Security Act (42 U.S.C.
1397aa et seq.);
(8) the term ``State Children's Health Insurance Program''
means the State Children's Health Insurance Program established
under title XXI of the Social Security Act (42 U.S.C. 1397aa et
seq.);
(9) the term ``task force'' means the task force established
under subsection (b)(1); and
(10) the term ``women's business center'' means a women's
business center described in section 29 of the Small Business
Act (15 U.S.C. 656).

(b) Establishment of Task Force.--
(1) Establishment.--There is established a task force to
conduct a nationwide campaign of education and outreach for
small business concerns regarding the availability of coverage
for children through private insurance options, the Medicaid
program, and the State Children's Health Insurance Program.
(2) Membership.--The task force shall consist of the
Administrator, the Secretary of Health and Human Services, the
Secretary of Labor, and the Secretary of the Treasury.
(3) Responsibilities.--The campaign conducted under this
subsection shall include--
(A) efforts to educate the owners of small business
concerns about the value of health coverage for
children;
(B) information regarding options available to the
owners and employees of small business concerns to make
insurance more affordable, including Federal and State
tax deductions and credits for health care-related
expenses and health insurance expenses and Federal tax
exclusion for health insurance options available under
employer-

[[Page 105]]
123 STAT. 105

sponsored cafeteria plans under section 125 of the
Internal Revenue Code of 1986;
(C) efforts to educate the owners of small business
concerns about assistance available through public
programs; and
(D) efforts to educate the owners and employees of
small business concerns regarding the availability of
the hotline operated as part of the Insure Kids Now
program of the Department of Health and Human Services.
(4) Implementation.--In carrying out this subsection, the
task force may--
(A) use any business partner of the Administration,
including--
(i) a small business development center;
(ii) a certified development company;
(iii) a women's business center; and
(iv) the Service Corps of Retired Executives;
(B) enter into--
(i) a memorandum of understanding with a
chamber of commerce; and
(ii) a partnership with any appropriate small
business concern or health advocacy group; and
(C) designate outreach programs at regional offices
of the Department of Health and Human Services to work
with district offices of the Administration.
(5) Website.--The Administrator shall ensure that links to
information on the eligibility and enrollment requirements for
the Medicaid program and State Children's Health Insurance
Program of each State are prominently displayed on the website
of the Administration.
(6) Report.--
(A) In general.--Not later than 2 years after the
date of enactment of this Act, and every 2 years
thereafter, the Administrator shall submit to the
Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House
of Representatives a report on the status of the
nationwide campaign conducted under paragraph (1).
(B) Contents.--Each report submitted under
subparagraph (A) shall include a status update on all
efforts made to educate owners and employees of small
business concerns on options for providing health
insurance for children through public and private
alternatives.
SEC. 622. SENSE OF THE SENATE REGARDING ACCESS TO AFFORDABLE AND
MEANINGFUL HEALTH INSURANCE COVERAGE.

(a) Findings.--The Senate finds the following:
(1) There are approximately 45 million Americans currently
without health insurance.
(2) More than half of uninsured workers are employed by
businesses with less than 25 employees or are self-employed.
(3) Health insurance premiums continue to rise at more than
twice the rate of inflation for all consumer goods.
(4) Individuals in the small group and individual health
insurance markets usually pay more for similar coverage than
those in the large group market.

[[Page 106]]
123 STAT. 106

(5) The rapid growth in health insurance costs over the last
few years has forced many employers, particularly small
employers, to increase deductibles and co-pays or to drop
coverage completely.

(b) Sense of the Senate.--The Senate--
(1) recognizes the necessity to improve affordability and
access to health insurance for all Americans;
(2) acknowledges the value of building upon the existing
private health insurance market; and
(3) affirms its intent to enact legislation this year that,
with appropriate protection for consumers, improves access to
affordable and meaningful health insurance coverage for
employees of small businesses and individuals by--
(A) facilitating pooling mechanisms, including
pooling across State lines, and
(B) providing assistance to small businesses and
individuals, including financial assistance and tax
incentives, for the purchase of private insurance
coverage.

TITLE VII--REVENUE PROVISIONS

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

(a) Cigars.--Section 5701(a) of the Internal Revenue Code of
1986 <> is amended--
(1) by striking ``$1.828 cents per thousand ($1.594 cents
per thousand on cigars removed during 2000 or 2001)'' in
paragraph (1) and inserting ``$50.33 per thousand'',
(2) by striking ``20.719 percent (18.063 percent on cigars
removed during 2000 or 2001)'' in paragraph (2) and inserting
``52.75 percent'', and
(3) by striking ``$48.75 per thousand ($42.50 per thousand
on cigars removed during 2000 or 2001)'' in paragraph (2) and
inserting ``40.26 cents per cigar''.

(b) Cigarettes.--Section 5701(b) of such Code is amended--
(1) by striking ``$19.50 per thousand ($17 per thousand on
cigarettes removed during 2000 or 2001)'' in paragraph (1) and
inserting ``$50.33 per thousand'', and
(2) by striking ``$40.95 per thousand ($35.70 per thousand
on cigarettes removed during 2000 or 2001)'' in paragraph (2)
and inserting ``$105.69 per thousand''.

(c) Cigarette Papers.--Section 5701(c) of such Code is amended by
striking ``1.22 cents (1.06 cents on cigarette papers removed during
2000 or 2001)'' and inserting ``3.15 cents''.
(d) Cigarette Tubes.--Section 5701(d) of such Code is amended by
striking ``2.44 cents (2.13 cents on cigarette tubes removed during 2000
or 2001)'' and inserting ``6.30 cents''.
(e) Smokeless Tobacco.--Section 5701(e) of such Code is amended--
(1) by striking ``58.5 cents (51 cents on snuff removed
during 2000 or 2001)'' in paragraph (1) and inserting ``$1.51'',
and
(2) by striking ``19.5 cents (17 cents on chewing tobacco
removed during 2000 or 2001)'' in paragraph (2) and inserting
``50.33 cents''.

[[Page 107]]
123 STAT. 107

(f) Pipe Tobacco.--Section 5701(f) of such Code is amended by
striking ``$1.0969 cents (95.67 cents on pipe tobacco removed during
2000 or 2001)'' and inserting ``$2.8311 cents''.
(g) Roll-Your-Own Tobacco.--Section 5701(g) of such Code is amended
by striking ``$1.0969 cents (95.67 cents on roll-your-own tobacco
removed during 2000 or 2001)'' and inserting ``$24.78''.
(h) <> Floor Stocks Taxes.--
(1) Imposition of tax.--On tobacco products (other than
cigars described in section 5701(a)(2) of the Internal Revenue
Code of 1986) and cigarette papers and tubes manufactured in or
imported into the United States which are removed before April
1, 2009, and held on such date for sale by any person, there is
hereby imposed a tax in an amount equal to the excess of--
(A) the tax which would be imposed under section
5701 of such Code on the article if the article had been
removed on such date, over
(B) the prior tax (if any) imposed under section
5701 of such Code on such article.
(2) Credit against tax.--Each person shall be allowed as a
credit against the taxes imposed by paragraph (1) an amount
equal to $500. Such credit shall not exceed the amount of taxes
imposed by paragraph (1) on April 1, 2009, for which such person
is liable.
(3) Liability for tax and method of payment.--
(A) Liability for tax.--A person holding tobacco
products, cigarette papers, or cigarette tubes on April
1, 2009, to which any tax imposed by paragraph (1)
applies shall be liable for such tax.
(B) <> Method of payment.--The
tax imposed by paragraph (1) shall be paid in such
manner as the Secretary shall prescribe by regulations.
(C) Time for payment.--The tax imposed by paragraph
(1) shall be paid on or before August 1, 2009.
(4) Articles in foreign trade zones.--Notwithstanding the
Act of June 18, 1934 (commonly known as the Foreign Trade Zone
Act, 48 Stat. 998, 19 U.S.C. 81a et seq.) or any other provision
of law, any article which is located in a foreign trade zone on
April 1, 2009, shall be subject to the tax imposed by paragraph
(1) if--
(A) internal revenue taxes have been determined, or
customs duties liquidated, with respect to such article
before such date pursuant to a request made under the
1st proviso of section 3(a) of such Act, or
(B) such article is held on such date under the
supervision of an officer of the United States Customs
and Border Protection of the Department of Homeland
Security pursuant to the 2d proviso of such section
3(a).
(5) Definitions.--For purposes of this subsection--
(A) In general.--Any term used in this subsection
which is also used in section 5702 of the Internal
Revenue Code of 1986 shall have the same meaning as such
term has in such section.
(B) Secretary.--The term ``Secretary'' means the
Secretary of the Treasury or the Secretary's delegate.

[[Page 108]]
123 STAT. 108

(6) <> Controlled groups.--Rules
similar to the rules of section 5061(e)(3) of such Code shall
apply for purposes of this subsection.
(7) Other laws applicable.--All provisions of law, including
penalties, applicable with respect to the taxes imposed by
section 5701 of such Code shall, insofar as applicable and not
inconsistent with the provisions of this subsection, apply to
the floor stocks taxes imposed by paragraph (1), to the same
extent as if such taxes were imposed by such section 5701. The
Secretary may treat any person who bore the ultimate burden of
the tax imposed by paragraph (1) as the person to whom a credit
or refund under such provisions may be allowed or made.

(i) <> Effective Date.--The amendments made
by this section shall apply to articles removed (as defined in section
5702(j) of the Internal Revenue Code of 1986) after March 31, 2009.
SEC. 702. ADMINISTRATIVE IMPROVEMENTS.

(a) Permit, Inventories, Reports, and Records Requirements for
Manufacturers and Importers of Processed Tobacco.--
(1) Permit.--
(A) Application.--Section 5712 of the Internal
Revenue Code of 1986 <> is amended
by inserting ``or processed tobacco'' after ``tobacco
products''.
(B) Issuance.--Section 5713(a) of such
Code <> is amended by inserting ``or
processed tobacco'' after ``tobacco products''.
(2) Inventories, reports, and packages.--
(A) Inventories.--Section 5721 of such
Code <> is amended by inserting ``,
processed tobacco,'' after ``tobacco products''.
(B) Reports.--Section 5722 of such Code <> is amended by inserting ``, processed
tobacco,'' after ``tobacco products''.
(C) Packages, marks, labels, and notices.--Section
5723 of such Code <> is amended by
inserting ``, processed tobacco,'' after ``tobacco
products'' each place it appears.
(3) Records.--Section 5741 of such Code <> is amended by inserting ``, processed tobacco,'' after
``tobacco products''.
(4) Manufacturer of processed tobacco.--Section 5702 of such
Code <> is amended by adding at the end the
following new subsection:

``(p) Manufacturer of Processed Tobacco.--
``(1) In general.--The term `manufacturer of processed
tobacco' means any person who processes any tobacco other than
tobacco products.
``(2) Processed tobacco.--The processing of tobacco shall
not include the farming or growing of tobacco or the handling of
tobacco solely for sale, shipment, or delivery to a manufacturer
of tobacco products or processed tobacco.''.
(5) Conforming amendments.--
(A) Section 5702(h) of such Code is amended by
striking ``tobacco products and cigarette papers and
tubes'' and inserting ``tobacco products or cigarette
papers or tubes or any processed tobacco''.

[[Page 109]]
123 STAT. 109

(B) Sections 5702(j) and 5702(k) of such
Code <> are each amended by
inserting ``, or any processed tobacco,'' after
``tobacco products or cigarette papers or tubes''.
(6) <> Effective date.--The
amendments made by this subsection shall take effect on April 1,
2009.

(b) Basis for Denial, Suspension, or Revocation of Permits.--
(1) Denial.--Paragraph (3) of section 5712 <> of such Code is amended to read as follows:
``(3) such person (including, in the case of a corporation,
any officer, director, or principal stockholder and, in the case
of a partnership, a partner)--
``(A) is, by reason of his business experience,
financial standing, or trade connections or by reason of
previous or current legal proceedings involving a felony
violation of any other provision of Federal criminal law
relating to tobacco products, processed tobacco,
cigarette paper, or cigarette tubes, not likely to
maintain operations in compliance with this chapter,
``(B) has been convicted of a felony violation of
any provision of Federal or State criminal law relating
to tobacco products, processed tobacco, cigarette paper,
or cigarette tubes, or
``(C) has failed to disclose any material
information required or made any material false
statement in the application therefor.''.
(2) Suspension or revocation.--Subsection (b) of section
5713 of such Code <> is amended to read as
follows:

``(b) Suspension or Revocation.--
``(1) <> Show cause hearing.--If the Secretary
has reason to believe that any person holding a permit--
``(A) has not in good faith complied with this
chapter, or with any other provision of this title
involving intent to defraud,
``(B) has violated the conditions of such permit,
``(C) has failed to disclose any material
information required or made any material false
statement in the application for such permit,
``(D) has failed to maintain his premises in such
manner as to protect the revenue,
``(E) is, by reason of previous or current legal
proceedings involving a felony violation of any other
provision of Federal criminal law relating to tobacco
products, processed tobacco, cigarette paper, or
cigarette tubes, not likely to maintain operations in
compliance with this chapter, or
``(F) has been convicted of a felony violation of
any provision of Federal or State criminal law relating
to tobacco products, processed tobacco, cigarette paper,
or cigarette tubes,
the Secretary shall issue an order, stating the facts charged,
citing such person to show cause why his permit should not be
suspended or revoked.
``(2) Action following hearing.--If, after hearing, the
Secretary finds that such person has not shown cause why his
permit should not be suspended or revoked, such permit

[[Page 110]]
123 STAT. 110

shall be suspended for such period as the Secretary deems proper
or shall be revoked.''.
(3) <> Effective date.--The
amendments made by this subsection shall take effect on the date
of the enactment of this Act.

(c) Application of Internal Revenue Code Statute of Limitations for
Alcohol and Tobacco Excise Taxes.--
(1) In general.--Section 514(a) of the Tariff Act of 1930
(19 U.S.C. 1514(a)) is amended by striking ``and section 520
(relating to refunds)'' and inserting ``section 520 (relating to
refunds), and section 6501 of the Internal Revenue Code of 1986
(but only with respect to taxes imposed under chapters 51 and 52
of such Code)''.
(2) <> Effective date.--The
amendment made by this subsection shall apply to articles
imported after the date of the enactment of this Act.

(d) Expansion of Definition of Roll-Your-Own Tobacco.--
(1) In general.--Section 5702(o) of the Internal Revenue
Code of 1986 <> is amended by inserting ``or
cigars, or for use as wrappers thereof'' before the period at
the end.
(2) <> Effective date.--The
amendment made by this subsection shall apply to articles
removed (as defined in section 5702(j) of the Internal Revenue
Code of 1986) after March 31, 2009.

(e) Time of Tax for Unlawfully Manufactured Tobacco Products.--
(1) In general.--Section 5703(b)(2) of such Code <> is amended by adding at the end the following new
subparagraph:
``(F) Special rule for unlawfully manufactured
tobacco products.--In the case of any tobacco products,
cigarette paper, or cigarette tubes manufactured in the
United States at any place other than the premises of a
manufacturer of tobacco products, cigarette paper, or
cigarette tubes that has filed the bond and obtained the
permit required under this chapter, tax shall be due and
payable immediately upon manufacture.''.
(2) <> Effective date.--The
amendment made by this subsection shall take effect on the date
of the enactment of this Act.

(f) Disclosure.--
(1) In general.--Paragraph (1) of section 6103(o) of such
Code <> is amended by designating the text
as subparagraph (A), moving such text 2 ems to the right,
striking ``Returns'' and inserting ``(a) in general.--Returns'',
and by inserting after subparagraph (A) (as so redesignated) the
following new subparagraph:
``(B) Use in certain proceedings.--Returns and
return information disclosed to a Federal agency under
subparagraph (A) may be used in an action or proceeding
(or in preparation for such action or proceeding)
brought under section 625 of the American Jobs Creation
Act of 2004 for the collection of any unpaid assessment
or penalty arising under such Act.''.
(2) Conforming amendment.--Section 6103(p)(4) of such Code
is amended by striking ``(o)(1)'' both places it appears and
inserting ``(o)(1)(A)''.

[[Page 111]]
123 STAT. 111

(3) <> Effective date.--The
amendments made by this subsection shall apply on or after the
date of the enactment of this Act.

(g) <> Transitional Rule.--Any person who--
(1) on April 1, 2009 is engaged in business as a
manufacturer of processed tobacco or as an importer of processed
tobacco, and
(2) before the end of the 90-day period beginning on such
date, submits an application under subchapter B of chapter 52 of
such Code to engage in such business, may, notwithstanding such
subchapter B, continue to engage in such business pending final
action on such application. <> Pending
such final action, all provisions of such chapter 52 shall apply
to such applicant in the same manner and to the same extent as
if such applicant were a holder of a permit under such chapter
52 to engage in such business.
SEC. 703. TREASURY STUDY CONCERNING MAGNITUDE OF TOBACCO SMUGGLING
IN THE UNITED STATES.

Not later than one year after the date of the enactment of this Act,
the Secretary of the Treasury shall conduct a study concerning the
magnitude of tobacco smuggling in the United States and submit to
Congress recommendations for the most effective steps to reduce tobacco
smuggling. Such study shall also include a review of the loss of Federal
tax receipts due to illicit tobacco trade in the United States and the
role of imported tobacco products in the illicit tobacco trade in the
United States.
SEC. 704. <> TIME FOR PAYMENT OF
CORPORATE ESTIMATED TAXES.

The percentage under subparagraph (C) of section 401(1) of the Tax
Increase Prevention and Reconciliation Act of 2005 in effect on the date
of the enactment of this Act is increased by 0.5 percentage point.

Approved February 4, 2009.

LEGISLATIVE HISTORY--H.R. 2 (S. 275):
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CONGRESSIONAL RECORD, Vol. 155 (2009):
Jan. 14, considered and passed House.
Jan. 26-29, considered and passed Senate, amended.
Feb. 4, House concurred in Senate amendment.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 44 (2009):
Feb. 4, Presidential remarks.