    [United States Statutes at Large, Volume 133, 116th Congress, 1st Session]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    Public Law 116-16
    116th Congress

    An Act

    To amend title XIX to extend protection for Medicaid recipients of home
    and community-based services against spousal impoverishment, establish a
    State Medicaid option to provide coordinated care to children with
    complex medical conditions through health homes, prevent the
    misclassification of drugs for purposes of the Medicaid drug rebate
    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.

    This Act may be cited as the ``Medicaid Services Investment and
    Accountability Act of 2019''.
    SEC. 2. EXTENSION OF PROTECTION FOR MEDICAID RECIPIENTS OF HOME
    AND COMMUNITY-BASED SERVICES AGAINST SPOUSAL
    IMPOVERISHMENT.

    (a) In General.--Section 2404 of Public Law 111-148 (42 U.S.C.
    1396r-5 note), as amended by section 3(a) of the Medicaid Extenders Act
    of 2019 (Public Law 116-3), is amended by striking ``March 31, 2019''
    and inserting ``September 30, 2019''.
    (b) <>  Rule of Construction.--
    (1) Protecting state spousal income and asset disregard
    flexibility under waivers and plan amendments.--Nothing in
    section 2404 of Public Law 111-148 (42 U.S.C. 1396r-5 note) or
    section 1924 of the Social Security Act (42 U.S.C. 1396r-5)
    shall be construed as prohibiting a State from disregarding an
    individual's spousal income and assets under a State waiver or
    plan amendment described in paragraph (2) for purposes of making
    determinations of eligibility for home and community-based
    services or home and community-based attendant services and
    supports under such waiver or plan amendment.
    (2) State waiver or plan amendment described.--A State
    waiver or plan amendment described in this paragraph is any of
    the following:
    (A) A waiver or plan amendment to provide medical
    assistance for home and community-based services under a
    waiver or plan amendment under subsection (c), (d), or
    (i) of section 1915 of the Social Security Act (42
    U.S.C. 1396n) or under section 1115 of such Act (42
    U.S.C. 1315).
    (B) A plan amendment to provide medical assistance
    for home and community-based services for individuals by
    reason of being determined eligible under section
    1902(a)(10)(C) of such Act (42 U.S.C. 1396a(a)(10)(C))
    or by reason of section 1902(f) of such Act (42 U.S.C.
    1396a(f))

    [[Page 853]]

    or otherwise on the basis of a reduction of income based
    on costs incurred for medical or other remedial care
    under which the State disregarded the income and assets
    of the individual's spouse in determining the initial
    and ongoing financial eligibility of an individual for
    such services in place of the spousal impoverishment
    provisions applied under section 1924 of such Act (42
    U.S.C. 1396r-5).
    (C) A plan amendment to provide medical assistance
    for home and community-based attendant services and
    supports under section 1915(k) of such Act (42 U.S.C.
    1396n(k)).
    SEC. 3. STATE OPTION TO PROVIDE COORDINATED CARE THROUGH A HEALTH
    HOME FOR CHILDREN WITH MEDICALLY COMPLEX
    CONDITIONS.

    Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) is
    amended by inserting after section 1945 the following new section:
    ``SEC. 1945A. <>  STATE OPTION TO PROVIDE
    COORDINATED CARE THROUGH A HEALTH HOME
    FOR CHILDREN WITH MEDICALLY COMPLEX
    CONDITIONS.

    ``(a) <>  In General.--Notwithstanding
    section 1902(a)(1) (relating to statewideness) and section
    1902(a)(10)(B) (relating to comparability), beginning October 1, 2022, a
    State, at its option as a State plan amendment, may provide for medical
    assistance under this title to children with medically complex
    conditions who choose to enroll in a health home under this section by
    selecting a designated provider, a team of health care professionals
    operating with such a provider, or a health team as the child's health
    home for purposes of providing the child with health home services.

    ``(b) <>  Health Home Qualification
    Standards.--The Secretary shall establish standards for qualification as
    a health home for purposes of this section. Such standards shall include
    requiring designated providers, teams of health care professionals
    operating with such providers, and health teams to demonstrate to the
    State the ability to do the following:
    ``(1) Coordinate prompt care for children with medically
    complex conditions, including access to pediatric emergency
    services at all times.
    ``(2) Develop an individualized comprehensive pediatric
    family-centered care plan for children with medically complex
    conditions that accommodates patient preferences.
    ``(3) Work in a culturally and linguistically appropriate
    manner with the family of a child with medically complex
    conditions to develop and incorporate into such child's care
    plan, in a manner consistent with the needs of the child and the
    choices of the child's family, ongoing home care, community-
    based pediatric primary care, pediatric inpatient care, social
    support services, and local hospital pediatric emergency care.
    ``(4) Coordinate access to--
    ``(A) subspecialized pediatric services and programs
    for children with medically complex conditions,
    including the most intensive diagnostic, treatment, and
    critical care levels as medically necessary; and
    ``(B) palliative services if the State provides such
    services under the State plan (or a waiver of such
    plan).
    ``(5) Coordinate care for children with medically complex
    conditions with out-of-State providers furnishing care to such

    [[Page 854]]

    children to the maximum extent practicable for the families of
    such children and where medically necessary, in accordance with
    guidance issued under subsection (e)(1) and section 431.52 of
    title 42, Code of Federal Regulations.
    ``(6) Collect and report information under subsection
    (g)(1).

    ``(c) Payments.--
    ``(1) In general.--A State shall provide a designated
    provider, a team of health care professionals operating with
    such a provider, or a health team with payments for the
    provision of health home services to each child with medically
    complex conditions that selects such provider, team of health
    care professionals, or health team as the child's health home.
    Payments made to a designated provider, a team of health care
    professionals operating with such a provider, or a health team
    for such services shall be treated as medical assistance for
    purposes of section 1903(a), except that, during the first 2
    fiscal year quarters that the State plan amendment is in effect,
    the Federal medical assistance percentage applicable to such
    payments shall be increased by 15 percentage points, but in no
    case may exceed 90 percent.
    ``(2) Methodology.--
    ``(A) In general.--The State shall specify in the
    State plan amendment the methodology the State will use
    for determining payment for the provision of health home
    services. Such methodology for determining payment--
    ``(i) may be tiered to reflect, with respect
    to each child with medically complex conditions
    provided such services by a designated provider, a
    team of health care professionals operating with
    such a provider, or a health team, the severity or
    number of each such child's chronic conditions,
    life-threatening illnesses, disabilities, or rare
    diseases, or the specific capabilities of the
    provider, team of health care professionals, or
    health team; and
    ``(ii) shall be established consistent with
    section 1902(a)(30)(A).
    ``(B) Alternate models of payment.--The methodology
    for determining payment for provision of health home
    services under this section shall not be limited to a
    per-member per-month basis and may provide (as proposed
    by the State and subject to approval by the Secretary)
    for alternate models of payment.
    ``(3) Planning grants.--
    ``(A) <>  In general.--
    Beginning October 1, 2022, the Secretary may award
    planning grants to States for purposes of developing a
    State plan amendment under this section. A planning
    grant awarded to a State under this paragraph shall
    remain available until expended.
    ``(B) State contribution.--A State awarded a
    planning grant shall contribute an amount equal to the
    State percentage determined under section 1905(b)
    (without regard to section 5001 of Public Law 111-5) for
    each fiscal year for which the grant is awarded.
    ``(C) Limitation.--The total amount of payments made
    to States under this paragraph shall not exceed
    $5,000,000.

    ``(d) Coordinating Care.--

    [[Page 855]]

    ``(1) <>  Hospital notification.--A State
    with a State plan amendment approved under this section shall
    require each hospital that is a participating provider under the
    State plan (or a waiver of such plan) to establish procedures
    for, in the case of a child with medically complex conditions
    who is enrolled in a health home pursuant to this section and
    seeks treatment in the emergency department of such hospital,
    notifying the health home of such child of such treatment.
    ``(2) Education with respect to availability of health home
    services.--In order for a State plan amendment to be approved
    under this section, a State shall include in the State plan
    amendment a description of the State's process for educating
    providers participating in the State plan (or a waiver of such
    plan) on the availability of health home services for children
    with medically complex conditions, including the process by
    which such providers can refer such children to a designated
    provider, team of health care professionals operating such a
    provider, or health team for the purpose of establishing a
    health home through which such children may receive such
    services.
    ``(3) Family education.--In order for a State plan amendment
    to be approved under this section, a State shall include in the
    State plan amendment a description of the State's process for
    educating families with children eligible to receive health home
    services pursuant to this section of the availability of such
    services. Such process shall include the participation of
    family-to-family entities or other public or private
    organizations or entities who provide outreach and information
    on the availability of health care items and services to
    families of individuals eligible to receive medical assistance
    under the State plan (or a waiver of such plan).
    ``(4) <>  Mental health coordination.--
    A State with a State plan amendment approved under this section
    shall consult and coordinate, as appropriate, with the Secretary
    in addressing issues regarding the prevention and treatment of
    mental illness and substance use among children with medically
    complex conditions receiving health home services under this
    section.

    ``(e) Guidance on Coordinating Care From Out-of-State Providers.--
    ``(1) <>  In general.--Not later than
    October 1, 2020, the Secretary shall issue (and update as the
    Secretary determines necessary) guidance to State Medicaid
    directors on--
    ``(A) best practices for using out-of-State
    providers to provide care to children with medically
    complex conditions;
    ``(B) coordinating care for such children provided
    by such out-of-State providers (including when provided
    in emergency and non-emergency situations);
    ``(C) reducing barriers for such children receiving
    care from such providers in a timely fashion; and
    ``(D) processes for screening and enrolling such
    providers in the respective State plan (or a waiver of
    such plan), including efforts to streamline such
    processes or reduce the burden of such processes on such
    providers.
    ``(2) Stakeholder input.--In carrying out paragraph (1), the
    Secretary shall issue a request for information to seek input
    from children with medically complex conditions and their
    families, States, providers (including children's hospitals,

    [[Page 856]]

    hospitals, pediatricians, and other providers), managed care
    plans, children's health groups, family and beneficiary
    advocates, and other stakeholders with respect to coordinating
    the care for such children provided by out-of-State providers.

    ``(f) <>  Monitoring.--A State shall include
    in the State plan amendment--
    ``(1) a methodology for tracking reductions in inpatient
    days and reductions in the total cost of care resulting from
    improved care coordination and management under this section;
    ``(2) <>  a proposal for use of health
    information technology in providing health home services under
    this section and improving service delivery and coordination
    across the care continuum (including the use of wireless patient
    technology to improve coordination and management of care and
    patient adherence to recommendations made by their provider);
    and
    ``(3) a methodology for tracking prompt and timely access to
    medically necessary care for children with medically complex
    conditions from out-of-State providers.

    ``(g) Data Collection.--
    ``(1) Provider reporting requirements.--In order to receive
    payments from a State under subsection (c), a designated
    provider, a team of health care professionals operating with
    such a provider, or a health team shall report to the State, at
    such time and in such form and manner as may be required by the
    State, the following information:
    ``(A) With respect to each such provider, team of
    health care professionals, or health team, the name,
    National Provider Identification number, address, and
    specific health care services offered to be provided to
    children with medically complex conditions who have
    selected such provider, team of health care
    professionals, or health team as the health home of such
    children.
    ``(B) Information on all applicable measures for
    determining the quality of health home services provided
    by such provider, team of health care professionals, or
    health team, including, to the extent applicable, child
    health quality measures and measures for centers of
    excellence for children with complex needs developed
    under this title, title XXI, and section 1139A.
    ``(C) Such other information as the Secretary shall
    specify in guidance.
    When appropriate and feasible, such provider, team of health
    care professionals, or health team, as the case may be, shall
    use health information technology in providing the State with
    such information.
    ``(2) State reporting requirements.--
    ``(A) Comprehensive report.--A State with a State
    plan amendment approved under this section shall report
    to the Secretary (and, upon request, to the Medicaid and
    CHIP Payment and Access Commission), at such time and in
    such form and manner determined by the Secretary to be
    reasonable and minimally burdensome, the following
    information:
    ``(i) Information reported under paragraph
    (1).
    ``(ii) The number of children with medically
    complex conditions who have selected a health home
    pursuant to this section.

    [[Page 857]]

    ``(iii) The nature, number, and prevalence of
    chronic conditions, life-threatening illnesses,
    disabilities, or rare diseases that such children
    have.
    ``(iv) The type of delivery systems and
    payment models used to provide services to such
    children under this section.
    ``(v) The number and characteristics of
    designated providers, teams of health care
    professionals operating with such providers, and
    health teams selected as health homes pursuant to
    this section, including the number and
    characteristics of out-of-State providers, teams
    of health care professionals operating with such
    providers, and health teams who have provided
    health care items and services to such children.
    ``(vi) The extent to which such children
    receive health care items and services under the
    State plan.
    ``(vii) Quality measures developed
    specifically with respect to health care items and
    services provided to children with medically
    complex conditions.
    ``(B) <>
    Report on best practices.--Not later than 90 days after
    a State has a State plan amendment approved under this
    section, such State shall submit to the Secretary, and
    make publicly available on the appropriate State
    website, a report on how the State is implementing
    guidance issued under subsection (e)(1), including
    through any best practices adopted by the State.

    ``(h) Rule of Construction.--Nothing in this section may be
    construed--
    ``(1) to require a child with medically complex conditions
    to enroll in a health home under this section;
    ``(2) to limit the choice of a child with medically complex
    conditions in selecting a designated provider, team of health
    care professionals operating with such a provider, or health
    team that meets the health home qualification standards
    established under subsection (b) as the child's health home; or
    ``(3) to reduce or otherwise modify--
    ``(A) the entitlement of children with medically
    complex conditions to early and periodic screening,
    diagnostic, and treatment services (as defined in
    section 1905(r)); or
    ``(B) the informing, providing, arranging, and
    reporting requirements of a State under section
    1902(a)(43).

    ``(i) Definitions.--In this section:
    ``(1) Child with medically complex conditions.--
    ``(A) In general.--Subject to subparagraph (B), the
    term `child with medically complex conditions' means an
    individual under 21 years of age who--
    ``(i) is eligible for medical assistance under
    the State plan (or under a waiver of such plan);
    and
    ``(ii) has at least--
    ``(I) one or more chronic conditions
    that cumulatively affect three or more
    organ systems and severely reduces
    cognitive or physical functioning (such
    as the ability to eat, drink, or breathe
    independently) and that also requires
    the use of medication, durable medical
    equipment, therapy, surgery, or other
    treatments; or

    [[Page 858]]

    ``(II) one life-limiting illness or
    rare pediatric disease (as defined in
    section 529(a)(3) of the Federal Food,
    Drug, and Cosmetic Act (21 U.S.C.
    360ff(a)(3))).
    ``(B) Rule of construction.--Nothing in this
    paragraph shall prevent the Secretary from establishing
    higher levels as to the number or severity of chronic,
    life threatening illnesses, disabilities, rare diseases
    or mental health conditions for purposes of determining
    eligibility for receipt of health home services under
    this section.
    ``(2) Chronic condition.--The term `chronic condition' means
    a serious, long-term physical, mental, or developmental
    disability or disease, including the following:
    ``(A) Cerebral palsy.
    ``(B) Cystic fibrosis.
    ``(C) HIV/AIDS.
    ``(D) Blood diseases, such as anemia or sickle cell
    disease.
    ``(E) Muscular dystrophy.
    ``(F) Spina bifida.
    ``(G) Epilepsy.
    ``(H) Severe autism spectrum disorder.
    ``(I) Serious emotional disturbance or serious
    mental health illness.
    ``(3) Health home.--The term `health home' means a
    designated provider (including a provider that operates in
    coordination with a team of health care professionals) or a
    health team selected by a child with medically complex
    conditions (or the family of such child) to provide health home
    services.
    ``(4) Health home services.--
    ``(A) In general.--The term `health home services'
    means comprehensive and timely high-quality services
    described in subparagraph (B) that are provided by a
    designated provider, a team of health care professionals
    operating with such a provider, or a health team.
    ``(B) Services described.--The services described in
    this subparagraph shall include--
    ``(i) comprehensive care management;
    ``(ii) care coordination, health promotion,
    and providing access to the full range of
    pediatric specialty and subspecialty medical
    services, including services from out-of-State
    providers, as medically necessary;
    ``(iii) comprehensive transitional care,
    including appropriate follow-up, from inpatient to
    other settings;
    ``(iv) patient and family support (including
    authorized representatives);
    ``(v) referrals to community and social
    support services, if relevant; and
    ``(vi) use of health information technology to
    link services, as feasible and appropriate.
    ``(5) Designated provider.--The term `designated provider'
    means a physician (including a pediatrician or a pediatric
    specialty or subspecialty provider), children's hospital,
    clinical practice or clinical group practice, prepaid inpatient
    health plan or prepaid ambulatory health plan (as defined by the
    Secretary), rural clinic, community health center, community
    mental health center, home health agency, or any other entity or
    provider

    [[Page 859]]

    that is determined by the State and approved by the Secretary to
    be qualified to be a health home for children with medically
    complex conditions on the basis of documentation evidencing that
    the entity has the systems, expertise, and infrastructure in
    place to provide health home services. Such term may include
    providers who are employed by, or affiliated with, a children's
    hospital.
    ``(6) Team of health care professionals.--The term `team of
    health care professionals' means a team of health care
    professionals (as described in the State plan amendment under
    this section) that may--
    ``(A) include--
    ``(i) physicians and other professionals, such
    as pediatricians or pediatric specialty or
    subspecialty providers, nurse care coordinators,
    dietitians, nutritionists, social workers,
    behavioral health professionals, physical
    therapists, occupational therapists, speech
    pathologists, nurses, individuals with experience
    in medical supportive technologies, or any
    professionals determined to be appropriate by the
    State and approved by the Secretary;
    ``(ii) an entity or individual who is
    designated to coordinate such a team; and
    ``(iii) community health workers, translators,
    and other individuals with culturally-appropriate
    expertise; and
    ``(B) be freestanding, virtual, or based at a
    children's hospital, hospital, community health center,
    community mental health center, rural clinic, clinical
    practice or clinical group practice, academic health
    center, or any entity determined to be appropriate by
    the State and approved by the Secretary.
    ``(7) Health team.--The term `health team' has the meaning
    given such term for purposes of section 3502 of Public Law 111-
    148.''.
    SEC. 4. EXTENSION OF THE COMMUNITY MENTAL HEALTH SERVICES
    DEMONSTRATION PROGRAM.

    Section 223(d)(3) of the Protecting Access to Medicare Act of 2014
    (42 U.S.C. 1396a note) is amended by striking ``for 2-year demonstration
    programs under this subsection'' and inserting ``to conduct
    demonstration programs under this subsection for 2 years or through June
    30, 2019, whichever is longer''.
    SEC. 5. ADDITIONAL FUNDING FOR THE MONEY FOLLOWS THE PERSON
    REBALANCING DEMONSTRATION.

    Section 6071(h)(1)(F) of the Deficit Reduction Act of 2005 (42
    U.S.C. 1396a note) is amended by striking ``$112,000,000'' and inserting
    ``132,000,000''.
    SEC. 6. PREVENTING THE MISCLASSIFICATION OF DRUGS UNDER THE
    MEDICAID DRUG REBATE PROGRAM.

    (a) Application of Civil Money Penalty for Misclassification of
    Covered Outpatient Drugs.--
    (1) In general.--Section 1927(b)(3) of the Social Security
    Act (42 U.S.C. 1396r-8(b)(3)) is amended--
    (A) in the paragraph heading, by inserting ``and
    drug product'' after ``price'';

    [[Page 860]]

    (B) in subparagraph (A)--
    (i) in clause (ii), by striking ``; and'' at
    the end and inserting a semicolon;
    (ii) in clause (iii), by striking the period
    at the end and inserting a semicolon;
    (iii) in clause (iv), by striking the
    semicolon at the end and inserting ``; and''; and
    (iv) by inserting after clause (iv) the
    following new clause:
    ``(v) <>  not later than 30
    days after the last day of each month of a rebate
    period under the agreement, such drug product
    information as the Secretary shall require for
    each of the manufacturer's covered outpatient
    drugs.''; and
    (C) in subparagraph (C)--
    (i) in clause (ii), by inserting ``, including
    information related to drug pricing, drug product
    information, and data related to drug pricing or
    drug product information,'' after ``provides false
    information'';
    (ii) by adding at the end the following new
    clauses:
    ``(iii) Misclassified drug product or
    misreported information.--
    ``(I) <>  In
    general.--Any manufacturer with an
    agreement under this section that
    knowingly (as defined in section
    1003.110 of title 42, Code of Federal
    Regulations (or any successor
    regulation)) misclassifies a covered
    outpatient drug, such as by knowingly
    submitting incorrect drug product
    information, is subject to a civil money
    penalty for each covered outpatient drug
    that is misclassified in an amount not
    to exceed 2 times the amount of the
    difference between--
    ``(aa) the total amount of
    rebates that the manufacturer
    paid with respect to the drug to
    all States for all rebate
    periods during which the drug
    was misclassified; and
    ``(bb) the total amount of
    rebates that the manufacturer
    would have been required to pay,
    as determined by the Secretary
    using drug product information
    provided by the manufacturer,
    with respect to the drug to all
    States for all rebate periods
    during which the drug was
    misclassified if the drug had
    been correctly classified.
    ``(II) Other penalties and recovery
    of underpaid rebates.--The civil money
    penalties described in subclause (I) are
    in addition to other penalties as may be
    prescribed by law and any other recovery
    of the underlying underpayment for
    rebates due under this section or the
    terms of the rebate agreement as
    determined by the Secretary.
    ``(iv) Increasing oversight and enforcement.--
    Each year the Secretary shall retain, in addition
    to any amount retained by the Secretary to recoup
    investigation and litigation costs related to the
    enforcement of the civil money penalties under
    this subparagraph

    [[Page 861]]

    and subsection (c)(4)(B)(ii)(III), an amount equal
    to 25 percent of the total amount of civil money
    penalties collected under this subparagraph and
    subsection (c)(4)(B)(ii)(III) for the year, and
    such retained amount shall be available to the
    Secretary, without further appropriation and until
    expended, for activities related to the oversight
    and enforcement of this section and agreements
    under this section, including--
    ``(I) improving drug data reporting
    systems;
    ``(II) evaluating and ensuring
    manufacturer compliance with rebate
    obligations; and
    ``(III) oversight and enforcement
    related to ensuring that manufacturers
    accurately and fully report drug
    information, including data related to
    drug classification.''; and
    (iii) in subparagraph (D)--
    (I) in clause (iv), by striking ``,
    and'' and inserting a comma;
    (II) in clause (v), by striking the
    period and inserting ``, and''; and
    (III) by inserting after clause (v)
    the following new clause:
    ``(vi) in the case of categories of drug
    product or classification information that were
    not considered confidential by the Secretary on
    the day before the date of the enactment of this
    clause.''.
    (2) Technical amendments.--
    (A) Section 1903(i)(10) of the Social Security Act
    (42 U.S.C. 1396b(i)(10)) is amended--
    (i) in subparagraph (C)--
    (I) by adjusting the left margin so
    as to align with the left margin of
    subparagraph (B); and
    (II) by striking ``, and'' and
    inserting a semicolon;
    (ii) in subparagraph (D), by striking ``; or''
    and inserting ``; and''; and
    (iii) by adding at the end the following new
    subparagraph:
    ``(E) with respect to any amount expended for a covered
    outpatient drug for which a suspension under section
    1927(c)(4)(B)(ii)(II) is in effect; or''.
    (B) Section 1927(b)(3)(C)(ii) of the Social Security
    Act (42 U.S.C. 1396r-8(b)(3)(C)(ii)) is amended by
    striking ``subsections (a) and (b)'' and inserting
    ``subsections (a), (b), (f)(3), and (f)(4)''.

    (b) Recovery of Unpaid Rebate Amounts Due to Misclassification of
    Covered Outpatient Drugs.--
    (1) In general.--Section 1927(c) of the Social Security Act
    (42 U.S.C. 1396r-8(c)) is amended by adding at the end the
    following new paragraph:
    ``(4) Recovery of unpaid rebate amounts due to
    misclassification of covered outpatient drugs.--
    ``(A) <>  In general.--If the
    Secretary determines that a manufacturer with an
    agreement under this section paid a lower per-unit
    rebate amount to a State for a rebate period as a result
    of the misclassification by the manufacturer of a
    covered outpatient drug (without regard to

    [[Page 862]]

    whether the manufacturer knowingly made the
    misclassification or should have known that the
    misclassification would be made) than the per-unit
    rebate amount that the manufacturer would have paid to
    the State if the drug had been correctly classified, the
    manufacturer shall pay to the State an amount equal to
    the product of--
    ``(i) the difference between--
    ``(I) the per-unit rebate amount
    paid to the State for the period; and
    ``(II) the per-unit rebate amount
    that the manufacturer would have paid to
    the State for the period, as determined
    by the Secretary, if the drug had been
    correctly classified; and
    ``(ii) the total units of the drug paid for
    under the State plan in the period.
    ``(B) Authority to correct misclassifications.--
    ``(i) <>
    In general.--If the Secretary determines that a
    manufacturer with an agreement under this section
    has misclassified a covered outpatient drug
    (without regard to whether the manufacturer
    knowingly made the misclassification or should
    have known that the misclassification would be
    made), the Secretary shall notify the manufacturer
    of the misclassification and require the
    manufacturer to correct the misclassification in a
    timely manner.
    ``(ii) Enforcement.--If, after receiving
    notice of a misclassification from the Secretary
    under clause (i), a manufacturer fails to correct
    the misclassification by such time as the
    Secretary shall require, until the manufacturer
    makes such correction, the Secretary may do any or
    all of the following:
    ``(I) Correct the misclassification,
    using drug product information provided
    by the manufacturer, on behalf of the
    manufacturer.
    ``(II) Suspend the misclassified
    drug and the drug's status as a covered
    outpatient drug under the manufacturer's
    national rebate agreement, and exclude
    the misclassified drug from Federal
    financial participation in accordance
    with section 1903(i)(10)(E).
    ``(III) <>  Impose
    a civil money penalty (which shall be in
    addition to any other recovery or
    penalty which may be available under
    this section or any other provision of
    law) for each rebate period during which
    the drug is misclassified not to exceed
    an amount equal to the product of--
    ``(aa) the total number of
    units of each dosage form and
    strength of such misclassified
    drug paid for under any State
    plan during such a rebate
    period; and
    ``(bb) 23.1 percent of the
    average manufacturer price for
    the dosage form and strength of
    such misclassified drug.
    ``(C) Reporting and transparency.--
    ``(i) In general.--The Secretary shall submit
    a report to Congress on at least an annual basis
    that

    [[Page 863]]

    includes information on the covered outpatient
    drugs that have been identified as misclassified,
    any steps taken to reclassify such drugs, the
    actions the Secretary has taken to ensure the
    payment of any rebate amounts which were unpaid as
    a result of such misclassification, and a
    disclosure of expenditures from the fund created
    in subsection (b)(3)(C)(iv), including an
    accounting of how such funds have been allocated
    and spent in accordance with such subsection.
    ``(ii) Public access.--The Secretary shall
    make the information contained in the report
    required under clause (i) available to the public
    on a timely basis.
    ``(D) Other penalties and actions.--Actions taken
    and penalties imposed under this clause shall be in
    addition to other remedies available to the Secretary
    including terminating the manufacturer's rebate
    agreement for noncompliance with the terms of such
    agreement and shall not exempt a manufacturer from, or
    preclude the Secretary from pursuing, any civil money
    penalty under this title or title XI, or any other
    penalty or action as may be prescribed by law.''.
    (2) Offset of recovered amounts against medical
    assistance.--Section 1927(b)(1)(B) of the Social Security Act
    (42 U.S.C. 1396r-8(b)(1)(B)) is amended by inserting ``,
    including amounts received by a State under subsection (c)(4),''
    after ``in any quarter''.

    (c) Clarifying Definitions.--Section 1927(k) of the Social Security
    Act (42 U.S.C. 1396r-8(k)) is amended--
    (1) in paragraph (2)(A), by striking ``paragraph (5)'' and
    inserting ``paragraph (4)''; and
    (2) in paragraph (7)(A)--
    (A) by striking ``an original new drug application''
    and inserting ``a new drug application'' each place it
    appears;
    (B) in clause (i), by striking ``(not including any
    drug described in paragraph (5))'' and inserting ``,
    including a drug product approved for marketing as a
    non-prescription drug that is regarded as a covered
    outpatient drug under paragraph (4),'';
    (C) in clause (ii)--
    (i) by striking ``was originally marketed''
    and inserting ``is marketed''; and
    (ii) by inserting ``, unless the Secretary
    determines that a narrow exception applies (as
    described in section 447.502 of title 42, Code of
    Federal Regulations (or any successor
    regulation))'' before the period; and
    (D) in clause (iv)--
    (i) by inserting ``, including a drug product
    approved for marketing as a non-prescription drug
    that is regarded as a covered outpatient drug
    under paragraph (4),'' after ``covered outpatient
    drug'';
    (ii) by inserting ``unless the Secretary
    determines that a narrow exception applies (as
    described in section 447.502 of title 42, Code of
    Federal Regulations (or any successor
    regulation))'' after ``under the new drug
    application''; and
    (iii) by adding at the end the following new
    sentence: ``Such term also includes a covered
    outpatient

    [[Page 864]]

    drug that is a biological product licensed,
    produced, or distributed under a biologics license
    application approved by the Food and Drug
    Administration.''.

    (d) Exclusion of Manufacturers for Knowing Misclassification of
    Covered Outpatient Drugs.--Section 1128(b) of the Social Security Act
    (42 U.S.C. 1320a-7(b)) is amended by adding at the end the following new
    paragraph:
    ``(17) Knowingly misclassifying covered outpatient drugs.--
    Any manufacturer or officer, director, agent, or managing
    employee of such manufacturer that knowingly misclassifies a
    covered outpatient drug under an agreement under section 1927,
    knowingly fails to correct such misclassification, or knowingly
    provides false information related to drug pricing, drug product
    information, or data related to drug pricing or drug product
    information.''.

    (e) <>  Effective Date.--The amendments
    made by this section shall take effect on the date of the enactment of
    this Act, and shall apply to covered outpatient drugs supplied by
    manufacturers under agreements under section 1927 of the Social Security
    Act (42 U.S.C. 1396r-8) on or after such date.
    SEC. 7. EXTENSION OF THIRD-PARTY LIABILITY PERIOD FOR CHILD
    SUPPORT SERVICES.

    (a) In General.--Section 202(a)(2) of the Bipartisan Budget Act of
    2013 (Public Law 113-67) is amended by striking ``90 days'' and
    inserting ``100 days''.
    (b) <>  Effective Date.--The amendment
    made by this section shall take effect on the date of the enactment of
    this Act.
    SEC. 8. DENIAL OF FFP FOR CERTAIN EXPENDITURES RELATING TO VACUUM
    ERECTION SYSTEMS AND PENILE PROSTHETIC
    IMPLANTS.

    (a) In General.--Section 1903(i) of the Social Security Act (42
    U.S.C. 1396b(i)) is amended by inserting after paragraph (11) the
    following:
    ``(12) with respect to any amounts expended for--
    ``(A) a vacuum erection system that is not medically
    necessary; or
    ``(B) the insertion, repair, or removal and
    replacement of a penile prosthetic implant (unless such
    insertion, repair, or removal and replacement is
    medically necessary); or''.

    (b) <>  Effective Date.--The amendment
    made by subsection (a) shall apply with respect to items and services
    furnished on or after January 1, 2020.
    SEC. 9. DETERMINATION OF BUDGETARY EFFECTS.

    The budgetary effects of this Act, for the purpose of complying with
    the Statutory Pay-As-You-Go Act of 2010, shall be determined by
    reference to the latest statement titled ``Budgetary Effects of PAYGO
    Legislation'' for this Act, submitted for printing in the

    [[Page 865]]

    Congressional Record by the Chairman of the House Budget Committee,
    provided that such statement has been submitted prior to the vote on
    passage.

    Approved April 18, 2019.

    LEGISLATIVE HISTORY--H.R. 1839:
    ---------------------------------------------------------------------------

    CONGRESSIONAL RECORD, Vol. 165 (2019):
    Mar. 25, considered and passed House.
    Apr. 2, considered and passed Senate.