[House Report 114-559]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-559
======================================================================
NURTURING AND SUPPORTING HEALTHY BABIES ACT
_______
May 10, 2016.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Upton, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
[To accompany H.R. 4978]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 4978) to require the Government Accountability
Office to submit to Congress a report on neonatal abstinence
syndrome (NAS) in the United States and its treatment under
Medicaid, having considered the same, report favorably thereon
with amendments and recommend that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 3
Background and Need for Legislation.............................. 4
Hearings......................................................... 5
Committee Consideration.......................................... 5
Committee Votes.................................................. 5
Committee Oversight Findings..................................... 5
Statement of General Performance Goals and Objectives............ 5
New Budget Authority, Entitlement Authority, and Tax Expenditures 5
Earmark, Limited Tax Benefits, and Limited Tariff Benefits....... 5
Committee Cost Estimate.......................................... 5
Congressional Budget Office Estimate............................. 5
Federal Mandates Statement....................................... 9
Duplication of Federal Programs.................................. 9
Disclosure of Directed Rule Makings.............................. 9
Advisory Committee Statement..................................... 9
Applicability to Legislative Branch.............................. 9
Section-by-Section Analysis of the Legislation................... 10
Changes in Existing Law Made by the Bill, as Reported............ 10
The amendments are as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Nurturing And Supporting Healthy
Babies Act'' or as the ``NAS Healthy Babies Act''.
SEC. 2. GAO REPORT ON NEONATAL ABSTINENCE SYNDROME (NAS).
(a) In General.--Not later than one year after the date of the
enactment of this Act, the Comptroller General of the United States
shall submit to the Committee on Energy and Commerce of the House of
Representatives and the Committee on Finance and the Committee on
Health, Education, Labor and Pensions of the Senate a report on
neonatal abstinence syndrome (in this section referred to as ``NAS'')
in the United States.
(b) Information to Be Included in Report.--Such report shall include
information on the following:
(1) The prevalence of NAS in the United States, including the
proportion of children born in the United States with NAS who
are eligible for medical assistance under State Medicaid
programs under title XIX of the Social Security Act at birth
and the costs associated with NAS through such programs.
(2) The services for which coverage is available under State
Medicaid programs for treatment of infants with NAS.
(3) The settings (including inpatient, outpatient, hospital-
based, and other settings) for the treatment of infants with
NAS and the reimbursement methodologies and costs associated
with such treatment in such settings.
(4) The prevalence of utilization of various care settings
under State Medicaid programs for treatment of infants with NAS
and any Federal barriers to treating such infants under such
programs, particularly in non-hospital-based settings.
(c) Recommendations.--Such report also shall include such
recommendations as the Comptroller General determines appropriate for
improvements that will ensure access to treatment for infants with NAS
under State Medicaid programs.
SEC. 3. EXCLUDING ABUSE-DETERRENT FORMULATIONS OF PRESCRIPTION DRUGS
FROM THE MEDICAID ADDITIONAL REBATE REQUIREMENT FOR
NEW FORMULATIONS OF PRESCRIPTION DRUGS.
(a) In General.--The last sentence of section 1927(c)(2)(C) of the
Social Security Act (42 U.S.C. 1396r-8(c)(2)(C)) is amended by
inserting before the period at the end the following: ``, but does not
include an abuse-deterrent formulation of the drug (as determined by
the Secretary), regardless of whether such abuse-deterrent formulation
is an extended release formulation''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
to drugs that are paid for by a State in calendar quarters beginning on
or after the date of the enactment of this Act.
SEC. 4. LIMITING DISCLOSURE OF PREDICTIVE MODELING AND OTHER ANALYTICS
TECHNOLOGIES TO IDENTIFY AND PREVENT WASTE, FRAUD,
AND ABUSE.
(a) In General.--Title XI of the Social Security Act is amended by
inserting after section 1128J (42 U.S.C. 1320a-7k) the following new
section:
``SEC. 1128K. DISCLOSURE OF PREDICTIVE MODELING AND OTHER ANALYTICS
TECHNOLOGIES TO IDENTIFY AND PREVENT WASTE, FRAUD,
AND ABUSE.
``(a) Reference to Predictive Modeling Technologies Requirements.--
For provisions relating to the use of predictive modeling and other
analytics technologies to identify and prevent waste, fraud, and abuse
with respect to the Medicare program under title XVIII, the Medicaid
program under title XIX, and the Children's Health Insurance Program
under title XXI, see section 4241 of the Small Business Jobs Act of
2010 (42 U.S.C. 1320a-7m).
``(b) Limiting Disclosure of Predictive Modeling Technologies.--In
implementing such provisions under such section 4241 with respect to
covered algorithms (as defined in subsection (c)), the following shall
apply:
``(1) Nonapplication of foia.--The covered algorithms used or
developed for purposes of such section (including by the
Secretary or a State (or an entity operating under a contract
with a State)) shall be exempt from disclosure under section
552(b)(3) of title 5, United States Code.
``(2) Limitation with respect to use and disclosure of
information by state agencies.--
``(A) In general.--A State agency may not use or
disclose covered algorithms used or developed for
purposes of such section except for purposes of
administering the State plan (or a waiver of the plan)
under the Medicaid program under title XIX or the State
child health plan (or a waiver of the plan) under the
Children's Health Insurance Program under title XXI,
including by enabling an entity operating under a
contract with a State to assist the State to identify
or prevent waste, fraud and abuse with respect to such
programs.
``(B) Information security.--A State agency shall
have in effect data security and control policies that
the Secretary finds adequate to ensure the security of
covered algorithms used or developed for purposes of
such section 4241 and to ensure that access to such
information is restricted to authorized persons for
purposes of authorized uses and disclosures described
in subparagraph (A).
``(C) Procedural requirements.--State agencies to
which information is disclosed pursuant to such section
4241 shall adhere to uniform procedures established by
the Secretary.
``(c) Covered Algorithm Defined.--In this section, the term `covered
algorithm'--
``(1) means a predictive modeling or other analytics
technology, as used for purposes of section 4241(a) of the
Small Business Jobs Act of 2010 (42 U.S.C. 1320a-7m(a)) to
identify and prevent waste, fraud, and abuse with respect to
the Medicare program under title XVIII, the Medicaid program
under title XIX, and the Children's Health Insurance Program
under title XXI; and
``(2) includes the mathematical expressions utilized in the
application of such technology and the means by which such
technology is developed.''.
(b) Conforming Amendments.--
(1) Medicaid state plan requirement.--Section 1902(a) of the
Social Security Act (42 U.S.C. 1396a(a)) is amended--
(A) in paragraph (80), by striking ``and'' at the
end;
(B) in paragraph (81), by striking the period at the
end and inserting ``; and''; and
(C) by inserting after paragraph (81) the following
new paragraph:
``(82) provide that the State agency responsible for
administering the State plan under this title provides
assurances to the Secretary that the State agency is in
compliance with subparagraphs (A), (B), and (C) of section
1128K(b)(2).''.
(2) State child health plan requirement.--Section 2102(a)(7)
of the Social Security Act (42 U.S.C. 1397bb(a)(7)) is
amended--
(A) in subparagraph (A), by striking ``, and'' at the
end and inserting a semicolon;
(B) in subparagraph (B), by striking the period at
the end and inserting ``; and''; and
(C) by adding at the end the following new
subparagraph:
``(C) to ensure that the State agency involved is in
compliance with subparagraphs (A), (B), and (C) of
section 1128K(b)(2).''.
SEC. 5. MEDICAID IMPROVEMENT FUND.
Section 1941(b)(1) of the Social Security Act (42 U.S.C. 1396w-
1(b)(1)) is amended to read as follows:
``(1) In general.--There shall be available to the Fund, for
expenditures from the Fund for fiscal year 2021 and thereafter,
$5,000,000.''.
Amend the long title so as to read: A bill to require the
Government Accountability Office to submit to Congress a report
on neonatal abstinence syndrome (NAS) in the United States and
its treatment under Medicaid, and for other purposes.
Purpose and Summary
H.R. 4978, the ``Nurturing and Supporting Healthy Babies
Act,'' would require the Comptroller General of the United
States to issue a report one year after enactment on neonatal
abstinence syndrome (NAS), including information on the
treatment for infants with NAS under Medicaid. The bill would
also correct an unintended consequence in current law by
exempting abuse-deterrent formulations (ADF) of prescription
drugs from the definition of ``line extension'' when
calculating Medicaid rebates--thus helping to incentivize the
development of ADF to combat opioid abuse. In addition, the
bill would prevent the public disclosure of program integrity
algorithms used to identify and predict waste, fraud, and abuse
in Medicare, Medicaid, and the Children's Health Insurance
Program (CHIP) and place savings in the Medicaid Improvement
Fund.
Background and Need for Legislation
The Centers for Disease Control and Prevention (CDC) has
estimated that prescription opioid abuse costs the U.S. economy
tens of billions of dollars each year in lost productivity and
health care costs. Sadly, the human cost is much higher--more
than 4 million Americans misuse or abuse prescription
painkillers, and more than 16,000 individuals die from
prescription painkiller overdoses each year. Deaths from drug
overdose are now the leading cause of injury-related death in
the country--more than from car accidents.
Even infants are suffering as a result of the drug abuse
crisis, as opioid use by pregnant women can lead to infants
being born with NAS, a group of problems that occur in a
newborn who was exposed to addictive opiate drugs while in the
mother's womb. There has been a significant increase in the
national prevalence of NAS. A 2012 article in the Journal of
the American Medical Association found the diagnosis of NAS
increased from 1.20 per 1,000 hospital births in 2000 to 3.39
per 1,000 hospital births in 2009.\1\
---------------------------------------------------------------------------
\1\Patrick S, Schumacher R, Benneyworth B, et al. ``Neonatal
abstinence syndrome and associated health care expenditures: United
States, 2000-2009.'' JAMA. 2012. 307(18):1934-40.
---------------------------------------------------------------------------
Since Medicaid covers nearly 50 percent of births
nationwide, many infants born with NAS will be covered by
Medicaid. To make effective policy regarding treatment of NAS,
Congress needs better information on the prevalence of NAS
nationwide and among children covered by Medicaid, the services
available under Medicaid for the treatment of infants with NAS,
and the settings in which such care is provided.
One promising method to try to address the nation's drug
abuse crisis is the development of ADFs of drugs. In its
Opioids Action Plan, the Food and Drug Administration (FDA)
said its goal is to ``expand access to abuse deterrent
formulations to discourage abuse.'' And in its ADF guidance to
manufacturers, the agency has said it ``considers the
development of these products a high public health priority.''
However, due to an unintended consequence in current law, ADFs
are subject to a higher rebate under the Medicaid program, thus
disincentivizing their development. H.R. 4978 would remove this
disincentive by ensuring that ADFs are not considered a line
extension of a drug and thus are not subject to increased
rebates. This policy was included in the President's fiscal
year 2017 budget.
The cost of the ADF policy is being offset by a common
sense policy from the President's budget to protect tools used
to identify and prevent fraud, waste, and abuse in Medicare,
Medicaid, and CHIP. The Centers for Medicare and Medicaid
Services (CMS) uses mathematical algorithms and predictive
technologies to uncover fraud, waste, and abuse. However, if
various aspects of these algorithms were to become publicly
known, fraudsters could utilize the information to re-direct
their schemes to other areas of the Medicare, Medicaid, and
CHIP programs or adjust their schemes to avoid detection. H.R.
4978 would allow CMS and state Medicaid and CHIP programs to
freely share algorithms and other predictive analytic tools,
while protecting these anti-fraud tools from public disclosure.
Hearings
The Subcommittee on Health held no hearings on H.R. 4978.
Committee Consideration
On April 20, 2016, the Subcommittee on Health met in open
markup session and forwarded H.R. 4978, without amendment, to
the full Committee by a voice vote. On April 26, 27, and 28,
2016, the full Committee on Energy and Commerce met in open
markup session and ordered H.R. 4978 reported to the House, as
amended, by a voice vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto.
There were no record votes taken in connection with ordering
H.R. 4978 reported.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has not held hearings
on this legislation.
Statement of General Performance Goals and Objectives
The objective of H.R. 4978 is to provide Congress with more
information about Medicaid treatment for infants with NAS;
incentivize the development of ADF of drugs to combat opioid
abuse; and prevent waste, fraud, and abuse in Medicare,
Medicaid, and CHIP.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
4978 would result in no new or increased budget authority,
entitlement authority, or tax expenditures or revenues.
Earmark, Limited Tax Benefits, and Limited Tariff Benefits
In compliance with clause 9(e), 9(f), and 9(g) of rule XXI
of the Rules of the House of Representatives, the Committee
finds that H.R. 4978 contains no earmarks, limited tax
benefits, or limited tariff benefits.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 9, 2016.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 4978, the
Nurturing and Supporting Healthy Babies Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Andrea
Noda, Lara Robillard, and Zoe Williams.
Sincerely,
Keith Hall.
Enclosure.
H.R. 4978--Nurturing and Supporting Healthy Babies Act
Summary: H.R. 4978 would exclude formulations of
prescription drugs that include abuse deterrents from
Medicaid's requirement that new drug formulations pay
additional rebates. The bill also would prevent the disclosure
of algorithms used to detect fraud, provide additional funding
to the Medicaid Improvement Fund, and require the Government
Accountability Office to submit a report to the Congress on
neonatal abstinence syndrome in the United States.
CBO estimates that enacting H.R. 4978 would not, on net,
change direct spending over the 2017-2026 period. Some
provisions of the bill would increase direct spending by $80
million over that period while other provisions would decrease
direct spending by the same amount. In addition, CBO estimates
that implementing H.R. 4978 would have a discretionary cost of
less than $500,000; any such spending would be subject to the
availability of appropriated funds. Pay-as-you-go procedures
apply because enacting the legislation would affect direct
spending. Enacting the legislation would not affect revenues.
CBO estimates that enacting the legislation would not
increase net direct spending or on-budget deficits by more than
$5 billion in any of the four consecutive 10-year periods
beginning in 2027.
H.R. 4978 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary effect of H.R. 4978 is shown in the following table.
The budgetary effects of this legislation fall within budget
functions 550 (health) and 570 (Medicare).
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-2021 2017-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Exclusion from Medicaid Rebate Requirements:
Estimated Budget Authority.................... 1 3 5 8 8 9 9 10 10 11 26 75
Estimated Outlays............................. 1 3 5 8 8 9 9 10 10 11 26 75
Disclosure of Predictive Modeling:
Estimated Budget Authority.................... -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -40 -80
Estimated Outlays............................. -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -40 -80
Medicaid Improvement Fund:
Budget Authority.............................. 0 0 0 0 5 0 0 0 0 0 5 5
Estimated Outlays............................. 0 0 0 0 5 0 0 0 0 0 5 5
Total Changes:
Estimated Budget Authority.................... -7 -5 -3 0 5 1 1 2 2 3 -9 0
Estimated Outlays............................. -7 -5 -3 0 5 1 1 2 2 3 -9 0
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
GAO Report:
Estimated Authorization Level................. * 0 0 0 0 0 0 0 0 0 * *
Estimated Outlays............................. * 0 0 0 0 0 0 0 0 0 * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: * = Less than $500,000; Components may not add to totals because of rounding.
Basis of estimate: For this estimate, CBO assumes that H.R.
4978 will be enacted near the end of fiscal year 2016.
Changes in direct spending
CBO estimates that enacting H.R. 4978 would not have a net
effect on direct spending over the 2017-2026 period.
Exclusion from Medicaid Rebate Requirements. Section 3 of
H.R. 4978 would reduce the Medicaid rebate amount paid by some
manufacturers of brand-name drugs that contain abuse-deterrent
formulations (ADFs). ADFs are designed to make it more
difficult to intentionally use prescription drugs for non-
therapeutic purposes. For example, some ADFs make it more
difficult for an individual to crush, break, or dissolve a drug
to inappropriately extract and use its active ingredient.
Under current law, pharmaceutical manufacturers are
required to pay rebates to states for prescription drugs
provided through Medicaid. Based on administrative data from
the Centers for Medicare and Medicaid Services (CMS),
manufacturers paid more than $20 billion in rebates to the
Medicaid program in FY 2015. The formula which determines
rebate amounts in the Medicaid program has several components.
Some components generate rebates that are paid to states and
shared with the federal government and others generate rebates
that are paid to states and subsequently transferred in their
entirety to the federal government. Under the bill, the
component of the rebate formula that would no longer apply to
ADFs of brand-name drugs is one that is paid to states and
transferred in full to the federal government. Therefore,
states would not be directly affected by this section of the
bill.
CBO estimates that this section would increase federal
Medicaid costs by about $75 million over the 2017-2026 period
by reducing rebates. CBO anticipates that an increasing number
of ADFs of brand name drugs will launch over time; therefore,
the component of the rebate affected by H.R. 4978 would also
grow over time. This estimate is based on a review of potential
classes of drugs where ADFs may be introduced over the next 10
years and on rebate calculations generated from Medicaid data
obtained from the Centers for Medicare and Medicaid Services
and Red Book data available from Truven Health Analytics.
Disclosure of Predictive Modeling. CMS currently uses the
Fraud Prevention System (FPS) to detect questionable and
fraudulent activity within the fee-for-service Medicare
program. The FPS uses sophisticated computer algorithms--
similar to those used by credit-card issuers--to review
millions of claims to look for evidence of inappropriate
utilization or problematic billing. Originally authorized by
the Small Business Jobs Act of 2010, the FPS is currently used
to review Medicare claims. In the future, use of the FPS may
expand to Medicaid and the Children's Health Insurance Program
(CHIP), which are administered by the states.
Section 4 of H.R. 4978 would prevent disclosure of the FPS
algorithms through requests under the Freedom of Information
Act. The bill also would forbid disclosure of that information
by state agencies unless such disclosure is necessary to
administer their Medicaid and CHIP programs. Permitting public
access to the algorithms would facilitate fraudulent schemes to
circumvent the FPS. Because H.R. 4978 prevents public access to
the FPS algorithms and discourages fraud, CBO estimates that
enacting Section 4 of H.R. 4978 would reduce direct spending in
the Medicare, Medicaid, and CHIP programs by about $80 million
over the 2017-2026 period.
Medicaid Improvement Fund. Section 5 of H.R. 4978 would
provide $5 million in mandatory funding to the Medicaid
Improvement Fund (MIF) in 2021, which would be available to the
Secretary of Health and Human Services to improve federal
management of the Medicaid program. Activities that could be
funded by the MIF include oversight of contracts and
contractors, and evaluation of demonstration programs. CBO
estimates that Section 5 would increase spending by $5 million
over the 2017-2026 period.
Changes in spending subject to appropriation
Section 2 of H.R. 4978 would require the Government
Accountability Office to submit a report to the Congress on
neonatal abstinence syndrome in the United States. CBO
estimates that implementing section 2 would cost less than
$500,000 over the 2017-2026 period; any such spending would be
subject to the availability of appropriated funds.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 4978, THE NURTURING AND SUPPORTING HEALTHY BABIES ACT, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON
ENERGY AND COMMERCE ON APRIL 27, 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
--------------------------------------------------------------------------------------------------
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016-2021 2016-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact....................... 0 -7 -5 -3 0 5 1 1 2 2 3 -9 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Increase in long-term direct spending and deficits: CBO
estimates that enacting the legislation would not increase net
direct spending or on-budget deficits by more than $5 billion
in any of the four consecutive 10-year periods beginning in
2026.
Intergovernmental and private-sector impact: H.R. 4978
contains no intergovernmental or private-sector mandate as
defined in UMRA and would impose no costs on state, local, or
tribal governments.
Estimate prepared by: Federal costs: Andrea Noda, Lara
Robillard, and Zoe Williams; Impact on state, local, and tribal
governments: J'Nell Blanco Suchy; Impact on the Private Sector:
Amy Petz.
Estimate approved by: Holly Harvey, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Duplication of Federal Programs
No provision of H.R. 4978 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Disclosure of Directed Rule Makings
The Committee estimates that enacting H.R. 4978
specifically directs to be completed no rule making within the
meaning of 5 U.S.C. 551.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section provides the short title of the ``Nurturing
and Supporting Healthy Babies Act'' or the ``NAS Healthy Babies
Act''.
Section 2. GAO report on Neonatal Abstinence Syndrome (NAS)
Subsection (a) requires the Comptroller General of the
United States to submit a report, one year after enactment, on
NAS to the congressional committees of jurisdiction.
Subsection (b) specifies that the report shall, among other
things, include information on the prevalence of NAS among
children covered by Medicaid, NAS treatment services covered by
Medicaid and the costs associated with that treatment, the
settings in which Medicaid covered treatment for infants with
NAS are provided, and any Federal barriers for treating infants
with NAS.
Subsection (c) specifies that the report shall include
recommendations, as the Comptroller General determines
appropriate, for improving access to treatment for infants with
NAS under Medicaid.
Section 3. Excluding abuse-deterrent formulations of prescription drugs
from the Medicaid additional rebate requirement for new
formulations of prescription drugs.
Subsection (a) specifies that an ADF of a drug is not
included as a line-extension of a drug, even if such ADF is an
extended release formulation.
Subsection (b) specifies that the amendment made by
subsection (a) is effective for drugs paid for by States in
calendar quarters beginning on or after the date of enactment.
Section 4. Limiting disclosure of predictive modeling and other
analytics technologies to identify and prevent waste, fraud,
and abuse
Subsection (a) inserts a new section in Title XI of the
Social Security Act. This section limits the disclosure of
predictive modeling and other analytics technologies to
identify and prevent waste, fraud, and abuse in Medicare,
Medicaid, and CHIP. Specifically, the section exempts the
algorithms used in such technology from disclosure under the
Freedom of Information Act. It also restricts states from using
or disclosing such algorithms except for purposes of
administering their Medicaid or CHIP programs and specifies
that states must have data security and procedures in place
that the Secretary of Health and Human Services finds
appropriate to ensure that the algorithms are protected.
Subsection (b) makes conforming amendments to the Medicaid
and CHIP statute.
Section 5. Medicaid Improvement Fund
This section places $5,000,000 in the Medicaid Improvement
Fund to be available for fiscal year 2021 or later.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
SOCIAL SECURITY ACT
* * * * * * *
TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE
SIMPLIFICATION
Part A--General Provisions
* * * * * * *
SEC. 1128K. DISCLOSURE OF PREDICTIVE MODELING AND OTHER ANALYTICS
TECHNOLOGIES TO IDENTIFY AND PREVENT WASTE, FRAUD,
AND ABUSE.
(a) Reference to Predictive Modeling Technologies
Requirements.--For provisions relating to the use of predictive
modeling and other analytics technologies to identify and
prevent waste, fraud, and abuse with respect to the Medicare
program under title XVIII, the Medicaid program under title
XIX, and the Children's Health Insurance Program under title
XXI, see section 4241 of the Small Business Jobs Act of 2010
(42 U.S.C. 1320a-7m).
(b) Limiting Disclosure of Predictive Modeling
Technologies.--In implementing such provisions under such
section 4241 with respect to covered algorithms (as defined in
subsection (c)), the following shall apply:
(1) Nonapplication of foia.--The covered algorithms
used or developed for purposes of such section
(including by the Secretary or a State (or an entity
operating under a contract with a State)) shall be
exempt from disclosure under section 552(b)(3) of title
5, United States Code.
(2) Limitation with respect to use and disclosure of
information by state agencies.--
(A) In general.--A State agency may not use
or disclose covered algorithms used or
developed for purposes of such section except
for purposes of administering the State plan
(or a waiver of the plan) under the Medicaid
program under title XIX or the State child
health plan (or a waiver of the plan) under the
Children's Health Insurance Program under title
XXI, including by enabling an entity operating
under a contract with a State to assist the
State to identify or prevent waste, fraud and
abuse with respect to such programs.
(B) Information security.--A State agency
shall have in effect data security and control
policies that the Secretary finds adequate to
ensure the security of covered algorithms used
or developed for purposes of such section 4241
and to ensure that access to such information
is restricted to authorized persons for
purposes of authorized uses and disclosures
described in subparagraph (A).
(C) Procedural requirements.--State agencies
to which information is disclosed pursuant to
such section 4241 shall adhere to uniform
procedures established by the Secretary.
(c) Covered Algorithm Defined.--In this section, the term
``covered algorithm''--
(1) means a predictive modeling or other analytics
technology, as used for purposes of section 4241(a) of
the Small Business Jobs Act of 2010 (42 U.S.C. 1320a-
7m(a)) to identify and prevent waste, fraud, and abuse
with respect to the Medicare program under title XVIII,
the Medicaid program under title XIX, and the
Children's Health Insurance Program under title XXI;
and
(2) includes the mathematical expressions utilized in
the application of such technology and the means by
which such technology is developed.
* * * * * * *
TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS
* * * * * * *
STATE PLANS FOR MEDICAL ASSISTANCE
Sec. 1902. (a) A State plan for medical assistance must--
(1) provide that it shall be in effect in all
political subdivisions of the State, and, if
administered by them, be mandatory upon them;
(2) provide for financial participation by the State
equal to not less than 40 per centum of the non-Federal
share of the expenditures under the plan with respect
to which payments under section 1903 are authorized by
this title; and, effective July 1, 1969, provide for
financial participation by the State equal to all of
such non-Federal share or provide for distribution of
funds from Federal or State sources, for carrying out
the State plan, on an equalization or other basis which
will assure that the lack of adequate funds from local
sources will not result in lowering the amount,
duration, scope, or quality of care and services
available under the plan;
(3) provide for granting an opportunity for a fair
hearing before the State agency to any individual whose
claim for medical assistance under the plan is denied
or is not acted upon with reasonable promptness;
(4) provide (A) such methods of administration
(including methods relating to the establishment and
maintenance of personnel standards on a merit basis,
except that the Secretary shall exercise no authority
with respect to the selection, tenure of office, and
compensation of any individual employed in accordance
with such methods, and including provision for
utilization of professional medical personnel in the
administration and, where administered locally,
supervision of administration of the plan) as are found
by the Secretary to be necessary for the proper and
efficient operation of the plan, (B) for the training
and effective use of paid subprofessional staff, with
particular emphasis on the full-time or part-time
employment of recipients and other persons of low
income, as community service aides, in the
administration of the plan and for the use of nonpaid
or partially paid volunteers in a social service
volunteer program in providing services to applicants
and recipients and in assisting any advisory committees
established by the State agency, (C) that each State or
local officer, employee, or independent contractor who
is responsible for the expenditure of substantial
amounts of funds under the State plan, each individual
who formerly was such an officer, employee, or
contractor, and each partner of such an officer,
employee, or contractor shall be prohibited from
committing any act, in relation to any activity under
the plan, the commission of which, in connection with
any activity concerning the United States Government,
by an officer or employee of the United States
Government, an individual who was such an officer or
employee, or a partner of such an officer or employee
is prohibited by section 207 or 208 of title 18, United
States Code, and (D) that each State or local officer,
employee, or independent contractor who is responsible
for selecting, awarding, or otherwise obtaining items
and services under the State plan shall be subject to
safeguards against conflicts of interest that are at
least as stringent as the safeguards that apply under
section 27 of the Office of Federal Procurement Policy
Act (41 U.S.C. 423) to persons described in subsection
(a)(2) of such section of that Act;
(5) either provide for the establishment or
designation of a single State agency to administer or
to supervise the administration of the plan; or provide
for the establishment or designation of a single State
agency to administer or to supervise the administration
of the plan, except that the determination of
eligibility for medical assistance under the plan shall
be made by the State or local agency administering the
State plan approved under title I or XVI (insofar as it
relates to the aged) if the State is eligible to
participate in the State plan program established under
title XVI, or by the agency or agencies administering
the supplemental security income program established
under title XVI or the State plan approved under part A
of title IV if the State is not eligible to participate
in the State plan program established under title XVI;
(6) provide that the State agency will make such
reports, in such form and containing such information,
as the Secretary may from time to time require, and
comply with such provisions as the Secretary may from
time to time find necessary to assure the correctness
and verification of such reports;
(7) provide--
(A) safeguards which restrict the use or
disclosure of information concerning applicants
and recipients to purposes directly connected
with--
(i) the administration of the plan;
and
(ii) the exchange of information
necessary to certify or verify the
certification of eligibility of
children for free or reduced price
breakfasts under the Child Nutrition
Act of 1966 and free or reduced price
lunches under the Richard B. Russell
National School Lunch Act, in
accordance with section 9(b) of that
Act, using data standards and formats
established by the State agency; and
(B) that, notwithstanding the Express Lane
option under subsection (e)(13), the State may
enter into an agreement with the State agency
administering the school lunch program
established under the Richard B. Russell
National School Lunch Act under which the State
shall establish procedures to ensure that--
(i) a child receiving medical
assistance under the State plan under
this title whose family income does not
exceed 133 percent of the poverty line
(as defined in section 673(2) of the
Community Services Block Grant Act,
including any revision required by such
section), as determined without regard
to any expense, block, or other income
disregard, applicable to a family of
the size involved, may be certified as
eligible for free lunches under the
Richard B. Russell National School
Lunch Act and free breakfasts under the
Child Nutrition Act of 1966 without
further application; and
(ii) the State agencies responsible
for administering the State plan under
this title, and for carrying out the
school lunch program established under
the Richard B. Russell National School
Lunch Act (42 U.S.C. 1751 et seq.) or
the school breakfast program
established by section 4 of the Child
Nutrition Act of 1966 (42 U.S.C. 1773),
cooperate in carrying out paragraphs
(3)(F) and (15) of section 9(b) of that
Act;
(8) provide that all individuals wishing to make
application for medical assistance under the plan shall
have opportunity to do so, and that such assistance
shall be furnished with reasonable promptness to all
eligible individuals;
(9) provide--
(A) that the State health agency, or other
appropriate State medical agency (whichever is
utilized by the Secretary for the purpose
specified in the first sentence of section
1864(a)), shall be responsible for establishing
and maintaining health standards for private or
public institutions in which recipients of
medical assistance under the plan may receive
care or services,
(B) for the establishment or designation of a
State authority or authorities which shall be
responsible for establishing and maintaining
standards, other than those relating to health,
for such institutions,
(C) that any laboratory services paid for
under such plan must be provided by a
laboratory which meets the applicable
requirements of section 1861(e)(9) or
paragraphs (16) and (17) of section 1861(s),
or, in the case of a laboratory which is in a
rural health clinic, of section 1861(aa)(2)(G),
and
(D) that the State maintain a consumer-
oriented website providing useful information
to consumers regarding all skilled nursing
facilities and all nursing facilities in the
State, including for each facility, Form 2567
State inspection reports (or a successor form),
complaint investigation reports, the facility's
plan of correction, and such other information
that the State or the Secretary considers
useful in assisting the public to assess the
quality of long term care options and the
quality of care provided by individual
facilities;
(10) provide--
(A) for making medical assistance available,
including at least the care and services listed
in paragraphs (1) through (5), (17), (21), and
(28) of section 1905(a), to--
(i) all individuals--
(I) who are receiving aid or
assistance under any plan of
the State approved under title
I, X, XIV, or XVI, or part A or
part E of title IV (including
individuals eligible under this
title by reason of section
402(a)(37), 406(h), or 473(b),
or considered by the State to
be receiving such aid as
authorized under section
482(e)(6)),
(II)(aa) with respect to whom
supplemental security income
benefits are being paid under
title XVI (or were being paid
as of the date of the enactment
of section 211(a) of the
Personal Responsibility and
Work Opportunity Reconciliation
Act of 1996 (P.L. 104-193) and
would continue to be paid but
for the enactment of that
section), (bb) who are
qualified severely impaired
individuals (as defined in
section 1905(q)), or (cc) who
are under 21 years of age and
with respect to whom
supplemental security income
benefits would be paid under
title XVI if subparagraphs (A)
and (B) of section 1611(c)(7)
were applied without regard to
the phrase ``the first day of
the month following'',
(III) who are qualified
pregnant women or children as
defined in section 1905(n),
(IV) who are described in
subparagraph (A) or (B) of
subsection (l)(1) and whose
family income does not exceed
the minimum income level the
State is required to establish
under subsection (l)(2)(A) for
such a family;
(V) who are qualified family
members as defined in section
1905(m)(1),
(VI) who are described in
subparagraph (C) of subsection
(l)(1) and whose family income
does not exceed the income
level the State is required to
establish under subsection
(l)(2)(B) for such a family,
(VII) who are described in
subparagraph (D) of subsection
(l)(1) and whose family income
does not exceed the income
level the State is required to
establish under subsection
(l)(2)(C) for such a family;
(VIII) beginning January 1,
2014, who are under 65 years of
age, not pregnant, not entitled
to, or enrolled for, benefits
under part A of title XVIII, or
enrolled for benefits under
part B of title XVIII, and are
not described in a previous
subclause of this clause, and
whose income (as determined
under subsection (e)(14)) does
not exceed 133 percent of the
poverty line (as defined in
section 2110(c)(5)) applicable
to a family of the size
involved, subject to subsection
(k); or
(IX) who--
(aa) are under 26
years of age;
(bb) are not
described in or
enrolled under any of
subclauses (I) through
(VII) of this clause or
are described in any of
such subclauses but
have income that
exceeds the level of
income applicable under
the State plan for
eligibility to enroll
for medical assistance
under such subclause;
(cc) were in foster
care under the
responsibility of the
State on the date of
attaining 18 years of
age or such higher age
as the State has
elected under section
475(8)(B)(iii); and
(dd) were enrolled in
the State plan under
this title or under a
waiver of the plan
while in such foster
care;
(ii) at the option of the State, to
any group or groups of individuals
described in section 1905(a) (or, in
the case of individuals described in
section 1905(a)(i), to any reasonable
categories of such individuals) who are
not individuals described in clause (i)
of this subparagraph but--
(I) who meet the income and
resources requirements of the
appropriate State plan
described in clause (i) or the
supplemental security income
program (as the case may be),
(II) who would meet the
income and resources
requirements of the appropriate
State plan described in clause
(i) if their work-related child
care costs were paid from their
earnings rather than by a State
agency as a service
expenditure,
(III) who would be eligible
to receive aid under the
appropriate State plan
described in clause (i) if
coverage under such plan was as
broad as allowed under Federal
law,
(IV) with respect to whom
there is being paid, or who are
eligible, or would be eligible
if they were not in a medical
institution, to have paid with
respect to them, aid or
assistance under the
appropriate State plan
described in clause (i),
supplemental security income
benefits under title XVI, or a
State supplementary payment;
(V) who are in a medical
institution for a period of not
less than 30 consecutive days
(with eligibility by reason of
this subclause beginning on the
first day of such period), who
meet the resource requirements
of the appropriate State plan
described in clause (i) or the
supplemental security income
program, and whose income does
not exceed a separate income
standard established by the
State which is consistent with
the limit established under
section 1903(f)(4)(C),
(VI) who would be eligible
under the State plan under this
title if they were in a medical
institution, with respect to
whom there has been a
determination that but for the
provision of home or community-
based services described in
subsection (c), (d), or (e) of
section 1915 they would require
the level of care provided in a
hospital, nursing facility or
intermediate care facility for
the mentally retarded the cost
of which could be reimbursed
under the State plan, and who
will receive home or community-
based services pursuant to a
waiver granted by the Secretary
under subsection (c), (d), or
(e) of section 1915,
(VII) who would be eligible
under the State plan under this
title if they were in a medical
institution, who are terminally
ill, and who will receive
hospice care pursuant to a
voluntary election described in
section 1905(o);
(VIII) who is a child
described in section
1905(a)(i)--
(aa) for whom there
is in effect an
adoption assistance
agreement (other than
an agreement under part
E of title IV) between
the State and an
adoptive parent or
parents,
(bb) who the State
agency responsible for
adoption assistance has
determined cannot be
placed with adoptive
parents without medical
assistance because such
child has special needs
for medical or
rehabilitative care,
and
(cc) who was eligible
for medical assistance
under the State plan
prior to the adoption
assistance agreement
being entered into, or
who would have been
eligible for medical
assistance at such time
if the eligibility
standards and
methodologies of the
State's foster care
program under part E of
title IV were applied
rather than the
eligibility standards
and methodologies of
the State's aid to
families with dependent
children program under
part A of title IV;
(IX) who are described in
subsection (l)(1) and are not
described in clause (i)(IV),
clause (i)(VI), or clause
(i)(VII);
(X) who are described in
subsection (m)(1);
(XI) who receive only an
optional State supplementary
payment based on need and paid
on a regular basis, equal to
the difference between the
individual's countable income
and the income standard used to
determine eligibility for such
supplementary payment (with
countable income being the
income remaining after
deductions as established by
the State pursuant to standards
that may be more restrictive
than the standards for
supplementary security income
benefits under title XVI),
which are available to all
individuals in the State (but
which may be based on different
income standards by political
subdivision according to cost
of living differences), and
which are paid by a State that
does not have an agreement with
the Commissioner of Social
Security under section 1616 or
1634;
(XII) who are described in
subsection (z)(1) (relating to
certain TB-infected
individuals);
(XIII) who are in families
whose income is less than 250
percent of the income official
poverty line (as defined by the
Office of Management and
Budget, and revised annually in
accordance with section 673(2)
of the Omnibus Budget
Reconciliation Act of 1981)
applicable to a family of the
size involved, and who but for
earnings in excess of the limit
established under section
1905(q)(2)(B), would be
considered to be receiving
supplemental security income
(subject, notwithstanding
section 1916, to payment of
premiums or other cost-sharing
charges (set on a sliding scale
based on income) that the State
may determine);
(XIV) who are optional
targeted low-income children
described in section
1905(u)(2)(B);
(XV) who, but for earnings in
excess of the limit established
under section 1905(q)(2)(B),
would be considered to be
receiving supplemental security
income, who is at least 16, but
less than 65, years of age, and
whose assets, resources, and
earned or unearned income (or
both) do not exceed such
limitations (if any) as the
State may establish;
(XVI) who are employed
individuals with a medically
improved disability described
in section 1905(v)(1) and whose
assets, resources, and earned
or unearned income (or both) do
not exceed such limitations (if
any) as the State may
establish, but only if the
State provides medical
assistance to individuals
described in subclause (XV);
(XVII) who are independent
foster care adolescents (as
defined in section 1905(w)(1)),
or who are within any
reasonable categories of such
adolescents specified by the
State;
(XVIII) who are described in
subsection (aa) (relating to
certain breast or cervical
cancer patients);
(XIX) who are disabled
children described in
subsection (cc)(1);
(XX) beginning January 1,
2014, who are under 65 years of
age and are not described in or
enrolled under a previous
subclause of this clause, and
whose income (as determined
under subsection (e)(14))
exceeds 133 percent of the
poverty line (as defined in
section 2110(c)(5)) applicable
to a family of the size
involved but does not exceed
the highest income eligibility
level established under the
State plan or under a waiver of
the plan, subject to subsection
(hh);
(XXI) who are described in
subsection (ii) (relating to
individuals who meet certain
income standards); or
(XXII) who are eligible for
home and community-based
services under needs-based
criteria established under
paragraph (1)(A) of section
1915(i), or who are eligible
for home and community-based
services under paragraph (6) of
such section, and who will
receive home and community-
based services pursuant to a
State plan amendment under such
subsection;
(B) that the medical assistance made
available to any individual described in
subparagraph (A)--
(i) shall not be less in amount,
duration, or scope than the medical
assistance made available to any other
such individual, and
(ii) shall not be less in amount,
duration, or scope than the medical
assistance made available to
individuals not described in
subparagraph (A);
(C) that if medical assistance is included
for any group of individuals described in
section 1905(a) who are not described in
subparagraph (A) or (E), then--
(i) the plan must include a
description of (I) the criteria for
determining eligibility of individuals
in the group for such medical
assistance, (II) the amount, duration,
and scope of medical assistance made
available to individuals in the group,
and (III) the single standard to be
employed in determining income and
resource eligibility for all such
groups, and the methodology to be
employed in determining such
eligibility, which shall be no more
restrictive than the methodology which
would be employed under the
supplemental security income program in
the case of groups consisting of aged,
blind, or disabled individuals in a
State in which such program is in
effect, and which shall be no more
restrictive than the methodology which
would be employed under the appropriate
State plan (described in subparagraph
(A)(i)) to which such group is most
closely categorically related in the
case of other groups;
(ii) the plan must make available
medical assistance--
(I) to individuals under the
age of 18 who (but for income
and resources) would be
eligible for medical assistance
as an individual described in
subparagraph (A)(i), and
(II) to pregnant women,
during the course of their
pregnancy, who (but for income
and resources) would be
eligible for medical assistance
as an individual described in
subparagraph (A);
(iii) such medical assistance must
include (I) with respect to children
under 18 and individuals entitled to
institutional services, ambulatory
services, and (II) with respect to
pregnant women, prenatal care and
delivery services; and
(iv) if such medical assistance
includes services in institutions for
mental diseases or in an intermediate
care facility for the mentally retarded
(or both) for any such group, it also
must include for all groups covered at
least the care and services listed in
paragraphs (1) through (5) and (17) of
section 1905(a) or the care and
services listed in any 7 of the
paragraphs numbered (1) through (24) of
such section;
(D) for the inclusion of home health services
for any individual who, under the State plan,
is entitled to nursing facility services;
(E)(i) for making medical assistance
available for medicare cost-sharing (as defined
in section 1905(p)(3)) for qualified medicare
beneficiaries described in section 1905(p)(1);
(ii) for making medical assistance available
for payment of medicare cost-sharing described
in section 1905(p)(3)(A)(i) for qualified
disabled and working individuals described in
section 1905(s);
(iii) for making medical assistance available
for medicare cost sharing described in section
1905(p)(3)(A)(ii) subject to section
1905(p)(4), for individuals who would be
qualified medicare beneficiaries described in
section 1905(p)(1) but for the fact that their
income exceeds the income level established by
the State under section 1905(p)(2) but is less
than 110 percent in 1993 and 1994, and 120
percent in 1995 and years thereafter of the
official poverty line (referred to in such
section) for a family of the size involved; and
(iv) subject to sections 1933 and 1905(p)(4),
for making medical assistance available for
medicare cost-sharing described in section
1905(p)(3)(A)(ii) for individuals who would be
qualified medicare beneficiaries described in
section 1905(p)(1) but for the fact that their
income exceeds the income level established by
the State under section 1905(p)(2) and is at
least 120 percent, but less than 135 percent,
of the official poverty line (referred to in
such section) for a family of the size involved
and who are not otherwise eligible for medical
assistance under the State plan;
(F) at the option of a State, for making
medical assistance available for COBRA premiums
(as defined in subsection (u)(2)) for qualified
COBRA continuation beneficiaries described in
section 1902(u)(1); and
(G) that, in applying eligibility criteria of
the supplemental security income program under
title XVI for purposes of determining
eligibility for medical assistance under the
State plan of an individual who is not
receiving supplemental security income, the
State will disregard the provisions of
subsections (c) and (e) of section 1613;
except that (I) the making available of the services
described in paragraph (4), (14), or (16) of section
1905(a) to individuals meeting the age requirements
prescribed therein shall not, by reason of this
paragraph (10), require the making available of any
such services, or the making available of such services
of the same amount, duration, and scope, to individuals
of any other ages, (II) the making available of
supplementary medical insurance benefits under part B
of title XVIII to individuals eligible therefor (either
pursuant to an agreement entered into under section
1843 or by reason of the payment of premiums under such
title by the State agency on behalf of such
individuals), or provision for meeting part or all of
the cost of deductibles, cost sharing, or similar
charges under part B of title XVIII for individuals
eligible for benefits under such part, shall not, by
reason of this paragraph (10), require the making
available of any such benefits, or the making available
of services of the same amount, duration, and scope, to
any other individuals, (III) the making available of
medical assistance equal in amount, duration, and scope
to the medical assistance made available to individuals
described in clause (A) to any classification of
individuals approved by the Secretary with respect to
whom there is being paid, or who are eligible, or would
be eligible if they were not in a medical institution,
to have paid with respect to them, a State
supplementary payment shall not, by reason of this
paragraph (10), require the making available of any
such assistance, or the making available of such
assistance of the same amount, duration, and scope, to
any other individuals not described in clause (A), (IV)
the imposition of a deductible, cost sharing, or
similar charge for any item or service furnished to an
individual not eligible for the exemption under section
1916(a)(2) or (b)(2) shall not require the imposition
of a deductible, cost sharing, or similar charge for
the same item or service furnished to an individual who
is eligible for such exemption, (V) the making
available to pregnant women covered under the plan of
services relating to pregnancy (including prenatal,
delivery, and postpartum services) or to any other
condition which may complicate pregnancy shall not, by
reason of this paragraph (10), require the making
available of such services, or the making available of
such services of the same amount, duration, and scope,
to any other individuals, provided such services are
made available (in the same amount, duration, and
scope) to all pregnant women covered under the State
plan, (VI) with respect to the making available of
medical assistance for hospice care to terminally ill
individuals who have made a voluntary election
described in section 1905(o) to receive hospice care
instead of medical assistance for certain other
services, such assistance may not be made available in
an amount, duration, or scope less than that provided
under title XVIII, and the making available of such
assistance shall not, by reason of this paragraph (10),
require the making available of medical assistance for
hospice care to other individuals or the making
available of medical assistance for services waived by
such terminally ill individuals, (VII) the medical
assistance made available to an individual described in
subsection (l)(1)(A) who is eligible for medical
assistance only because of subparagraph (A)(i)(IV) or
(A)(ii)(IX) shall be limited to medical assistance for
services related to pregnancy (including prenatal,
delivery, postpartum, and family planning services) and
to other conditions which may complicate pregnancy,
(VIII) the medical assistance made available to a
qualified medicare beneficiary described in section
1905(p)(1) who is only entitled to medical assistance
because the individual is such a beneficiary shall be
limited to medical assistance for medicare cost-sharing
(described in section 1905(p)(3)), subject to the
provisions of subsection (n) and section 1916(b), (IX)
the making available of respiratory care services in
accordance with subsection (e)(9) shall not, by reason
of this paragraph (10), require the making available of
such services, or the making available of such services
of the same amount, duration, and scope, to any
individuals not included under subsection (e)(9)(A),
provided such services are made available (in the same
amount, duration, and scope) to all individuals
described in such subsection, (X) if the plan provides
for any fixed durational limit on medical assistance
for inpatient hospital services (whether or not such a
limit varies by medical condition or diagnosis), the
plan must establish exceptions to such a limit for
medically necessary inpatient hospital services
furnished with respect to individuals under one year of
age in a hospital defined under the State plan,
pursuant to section 1923(a)(1)(A), as a
disproportionate share hospital and subparagraph (B)
(relating to comparability) shall not be construed as
requiring such an exception for other individuals,
services, or hospitals, (XI) the making available of
medical assistance to cover the costs of premiums,
deductibles, coinsurance, and other cost-sharing
obligations for certain individuals for private health
coverage as described in section 1906 shall not, by
reason of paragraph (10), require the making available
of any such benefits or the making available of
services of the same amount, duration, and scope of
such private coverage to any other individuals, (XII)
the medical assistance made available to an individual
described in subsection (u)(1) who is eligible for
medical assistance only because of subparagraph (F)
shall be limited to medical assistance for COBRA
continuation premiums (as defined in subsection
(u)(2)), (XIII) the medical assistance made available
to an individual described in subsection (z)(1) who is
eligible for medical assistance only because of
subparagraph (A)(ii)(XII) shall be limited to medical
assistance for TB-related services (described in
subsection (z)(2)), (XIV) the medical assistance made
available to an individual described in subsection (aa)
who is eligible for medical assistance only because of
subparagraph (A)(10)(ii)(XVIII) shall be limited to
medical assistance provided during the period in which
such an individual requires treatment for breast or
cervical cancer (XV) the medical assistance made
available to an individual described in subparagraph
(A)(i)(VIII) shall be limited to medical assistance
described in subsection (k)(1), (XVI) the medical
assistance made available to an individual described in
subsection (ii) shall be limited to family planning
services and supplies described in section
1905(a)(4)(C) including medical diagnosis and treatment
services that are provided pursuant to a family
planning service in a family planning setting and
(XVII) if an individual is described in subclause (IX)
of subparagraph (A)(i) and is also described in
subclause (VIII) of that subparagraph, the medical
assistance shall be made available to the individual
through subclause (IX) instead of through subclause
(VIII);
(11)(A) provide for entering into cooperative
arrangements with the State agencies responsible for
administering or supervising the administration of
health services and vocational rehabilitation services
in the State looking toward maximum utilization of such
services in the provision of medical assistance under
the plan, (B) provide, to the extent prescribed by the
Secretary, for entering into agreements, with any
agency, institution, or organization receiving payments
under (or through an allotment under) title V, (i)
providing for utilizing such agency, institution, or
organization in furnishing care and services which are
available under such title or allotment and which are
included in the State plan approved under this section
(ii) making such provision as may be appropriate for
reimbursing such agency, institution, or organization
for the cost of any such care and services furnished
any individual for which payment would otherwise be
made to the State with respect to the individual under
section 1903, and (iii) providing for coordination of
information and education on pediatric vaccinations and
delivery of immunization services, and (C) provide for
coordination of the operations under this title,
including the provision of information and education on
pediatric vaccinations and the delivery of immunization
services, with the State's operations under the special
supplemental nutrition program for women, infants, and
children under section 17 of the Child Nutrition Act of
1966;
(12) provide that, in determining whether an
individual is blind, there shall be an examination by a
physician skilled in the diseases of the eye or by an
optometrist, whichever the individual may select;
(13) provide--
(A) for a public process for determination of
rates of payment under the plan for hospital
services, nursing facility services, and
services of intermediate care facilities for
the mentally retarded under which--
(i) proposed rates, the methodologies
underlying the establishment of such
rates, and justifications for the
proposed rates are published,
(ii) providers, beneficiaries and
their representatives, and other
concerned State residents are given a
reasonable opportunity for review and
comment on the proposed rates,
methodologies, and justifications,
(iii) final rates, the methodologies
underlying the establishment of such
rates, and justifications for such
final rates are published, and
(iv) in the case of hospitals, such
rates take into account (in a manner
consistent with section 1923) the
situation of hospitals which serve a
disproportionate number of low-income
patients with special needs;
(B) for payment for hospice care in amounts
no lower than the amounts, using the same
methodology, used under part A of title XVIII
and for payment of amounts under section
1905(o)(3); except that in the case of hospice
care which is furnished to an individual who is
a resident of a nursing facility or
intermediate care facility for the mentally
retarded, and who would be eligible under the
plan for nursing facility services or services
in an intermediate care facility for the
mentally retarded if he had not elected to
receive hospice care, there shall be paid an
additional amount, to take into account the
room and board furnished by the facility, equal
to at least 95 percent of the rate that would
have been paid by the State under the plan for
facility services in that facility for that
individual; and
(C) payment for primary care services (as
defined in subsection (jj)) furnished in 2013
and 2014 by a physician with a primary
specialty designation of family medicine,
general internal medicine, or pediatric
medicine at a rate not less than 100 percent of
the payment rate that applies to such services
and physician under part B of title XVIII (or,
if greater, the payment rate that would be
applicable under such part if the conversion
factor under section 1848(d) for the year
involved were the conversion factor under such
section for 2009);
(14) provide that enrollment fees, premiums, or
similar charges, and deductions, cost sharing, or
similar charges, may be imposed only as provided in
section 1916;
(15) provide for payment for services described in
clause (B) or (C) of section 1905(a)(2) under the plan
in accordance with subsection (bb);
(16) provide for inclusion, to the extent required by
regulations prescribed by the Secretary, of provisions
(conforming to such regulations) with respect to the
furnishing of medical assistance under the plan to
individuals who are residents of the State but are
absent therefrom;
(17) except as provided in subsections (e)(14),
(e)(14), (l)(3), (m)(3), and (m)(4), include reasonable
standards (which shall be comparable for all groups and
may, in accordance with standards prescribed by the
Secretary, differ with respect to income levels, but
only in the case of applicants or recipients of
assistance under the plan who are not receiving aid or
assistance under any plan of the State approved under
title I, X, XIV, or XVI, or part A of title IV, and
with respect to whom supplemental security income
benefits are not being paid under title XVI, based on
the variations between shelter costs in urban areas and
in rural areas) for determining eligibility for and the
extent of medical assistance under the plan which (A)
are consistent with the objectives of this title, (B)
provide for taking into account only such income and
resources as are, as determined in accordance with
standards prescribed by the Secretary, available to the
applicant or recipient and (in the case of any
applicant or recipient who would, except for income and
resources, be eligible for aid or assistance in the
form of money payments under any plan of the State
approved under title I, X, XIV, or XVI, or part A of
title IV, or to have paid with respect to him
supplemental security income benefits under title XVI)
as would not be disregarded (or set aside for future
needs) in determining his eligibility for such aid,
assistance, or benefits, (C) provide for reasonable
evaluation of any such income or resources, and (D) do
not take into account the financial responsibility of
any individual for any applicant or recipient of
assistance under the plan unless such applicant or
recipient is such individual's spouse or such
individual's child who is under age 21 or (with respect
to States eligible to participate in the State program
established under title XVI), is blind or permanently
and totally disabled, or is blind or disabled as
defined in section 1614 (with respect to States which
are not eligible to participate in such program); and
provide for flexibility in the application of such
standards with respect to income by taking into
account, except to the extent prescribed by the
Secretary, the costs (whether in the form of insurance
premiums, payments made to the State under section
1903(f)(2)(B), or otherwise and regardless of whether
such costs are reimbursed under another public program
of the State or political subdivision thereof) incurred
for medical care or for any other type of remedial care
recognized under State law;
(18) comply with the provisions of section 1917 with
respect to liens, adjustments and recoveries of medical
assistance correctly paid, transfers of assets, and
treatment of certain trusts;
(19) provide such safeguards as may be necessary to
assure that eligibility for care and services under the
plan will be determined, and such care and services
will be provided, in a manner consistent with
simplicity of administration and the best interests of
the recipients;
(20) if the State plan includes medical assistance in
behalf of individuals 65 years of age or older who are
patients in institutions for mental diseases--
(A) provide for having in effect such
agreements or other arrangements with State
authorities concerned with mental diseases,
and, where appropriate, with such institutions,
as may be necessary for carrying out the State
plan, including arrangements for joint planning
and for development of alternate methods of
care, arrangements providing assurance of
immediate readmittance to institutions where
needed for individuals under alternate plans of
care, and arrangements providing for access to
patients and facilities, for furnishing
information, and for making reports;
(B) provide for an individual plan for each
such patient to assure that the institutional
care provided to him is in his best interests,
including, to that end, assurances that there
will be initial and periodic review of his
medical and other needs, that he will be given
appropriate medical treatment within the
institution, and that there will be a periodic
determination of his need for continued
treatment in the institution; and
(C) provide for the development of alternate
plans of care, making maximum utilization of
available resources, for recipients 65 years of
age or older who would otherwise need care in
such institutions, including appropriate
medical treatment and other aid or assistance;
for services referred to in section
3(a)(4)(A)(i) and (ii) or section
1603(a)(4)(A)(i) and (ii) which are appropriate
for such recipients and for such patients; and
for methods of administration necessary to
assure that the responsibilities of the State
agency under the State plan with respect to
such recipients and such patients will be
effectively carried out;
(21) if the State plan includes medical assistance in
behalf of individuals 65 years of age or older who are
patients in public institutions for mental diseases,
show that the State is making satisfactory progress
toward developing and implementing a comprehensive
mental health program, including provision for
utilization of community mental health centers, nursing
facilities, and other alternatives to care in public
institutions for mental diseases;
(22) include descriptions of (A) the kinds and
numbers of professional medical personnel and
supporting staff that will be used in the
administration of the plan and of the responsibilities
they will have, (B) the standards, for private or
public institutions in which recipients of medical
assistance under the plan may receive care or services,
that will be utilized by the State authority or
authorities responsible for establishing and
maintaining such standards, (C) the cooperative
arrangements with State health agencies and State
vocational rehabilitation agencies entered into with a
view to maximum utilization of and coordination of the
provision of medical assistance with the services
administered or supervised by such agencies, and (D)
other standards and methods that the State will use to
assure that medical or remedial care and services
provided to recipients of medical assistance are of
high quality;
(23) provide that (A) any individual eligible for
medical assistance (including drugs) may obtain such
assistance from any institution, agency, community
pharmacy, or person, qualified to perform the service
or services required (including an organization which
provides such services, or arranges for their
availability, on a prepayment basis), who undertakes to
provide him such services, and (B) an enrollment of an
individual eligible for medical assistance in a primary
care case-management system (described in section
1915(b)(1)), a medicaid managed care organization, or a
similar entity shall not restrict the choice of the
qualified person from whom the individual may receive
services under section 1905(a)(4)(C), except as
provided in subsection (g) and in section 1915, except
that this paragraph shall not apply in the case of
Puerto Rico, the Virgin Islands, and Guam, and except
that nothing in this paragraph shall be construed as
requiring a State to provide medical assistance for
such services furnished by a person or entity convicted
of a felony under Federal or State law for an offense
which the State agency determines is inconsistent with
the best interests of beneficiaries under the State
plan or by a provider or supplier to which a moratorium
under subsection (kk)(4) is applied during the period
of such moratorium';
(24) effective July 1, 1969, provide for consultative
services by health agencies and other appropriate
agencies of the State to hospitals, nursing facilities,
home health agencies, clinics, laboratories, and such
other institutions as the Secretary may specify in
order to assist them (A) to qualify for payments under
this Act, (B) to establish and maintain such fiscal
records as may be necessary for the proper and
efficient administration of this Act, and (C) to
provide information needed to determine payments due
under this Act on account of care and services
furnished to individuals;
(25) provide--
(A) that the State or local agency
administering such plan will take all
reasonable measures to ascertain the legal
liability of third parties (including health
insurers, self-insured plans, group health
plans (as defined in section 607(1) of the
Employee Retirement Income Security Act of
1974), service benefit plans, managed care
organizations, pharmacy benefit managers, or
other parties that are, by statute, contract,
or agreement, legally responsible for payment
of a claim for a health care item or service)
to pay for care and services available under
the plan, including--
(i) the collection of sufficient
information (as specified by the
Secretary in regulations) to enable the
State to pursue claims against such
third parties, with such information
being collected at the time of any
determination or redetermination of
eligibility for medical assistance, and
(ii) the submission to the Secretary
of a plan (subject to approval by the
Secretary) for pursuing claims against
such third parties, which plan shall be
integrated with, and be monitored as a
part of the Secretary's review of, the
State's mechanized claims processing
and information retrieval systems
required under section 1903(r);
(B) that in any case where such a legal
liability is found to exist after medical
assistance has been made available on behalf of
the individual and where the amount of
reimbursement the State can reasonably expect
to recover exceeds the costs of such recovery,
the State or local agency will seek
reimbursement for such assistance to the extent
of such legal liability;
(C) that in the case of an individual who is
entitled to medical assistance under the State
plan with respect to a service for which a
third party is liable for payment, the person
furnishing the service may not seek to collect
from the individual (or any financially
responsible relative or representative of that
individual) payment of an amount for that
service (i) if the total of the amount of the
liabilities of third parties for that service
is at least equal to the amount payable for
that service under the plan (disregarding
section 1916), or (ii) in an amount which
exceeds the lesser of (I) the amount which may
be collected under section 1916, or (II) the
amount by which the amount payable for that
service under the plan (disregarding section
1916) exceeds the total of the amount of the
liabilities of third parties for that service;
(D) that a person who furnishes services and
is participating under the plan may not refuse
to furnish services to an individual (who is
entitled to have payment made under the plan
for the services the person furnishes) because
of a third party's potential liability for
payment for the service;
(E) that in the case of prenatal or
preventive pediatric care (including early and
periodic screening and diagnosis services under
section 1905(a)(4)(B)) covered under the State
plan, the State shall--
(i) make payment for such service in
accordance with the usual payment
schedule under such plan for such
services without regard to the
liability of a third party for payment
for such services; and
(ii) seek reimbursement from such
third party in accordance with
subparagraph (B);
(F) that in the case of any services covered
under such plan which are provided to an
individual on whose behalf child support
enforcement is being carried out by the State
agency under part D of title IV of this Act,
the State shall--
(i) make payment for such service in
accordance with the usual payment
schedule under such plan for such
services without regard to any third-
party liability for payment for such
services, if such third-party liability
is derived (through insurance or
otherwise) from the parent whose
obligation to pay support is being
enforced by such agency, if payment has
not been made by such third party
within 30 days after such services are
furnished;
(ii) seek reimbursement from such
third party in accordance with
subparagraph (B);
(G) that the State prohibits any health
insurer (including a group health plan, as
defined in section 607(1) of the Employee
Retirement Income Security Act of 1974, a self-
insured plan, a service benefit plan, a managed
care organization, a pharmacy benefit manager,
or other party that is, by statute, contract,
or agreement, legally responsible for payment
of a claim for a health care item or service),
in enrolling an individual or in making any
payments for benefits to the individual or on
the individual's behalf, from taking into
account that the individual is eligible for or
is provided medical assistance under a plan
under this title for such State, or any other
State;
(H) that to the extent that payment has been
made under the State plan for medical
assistance in any case where a third party has
a legal liability to make payment for such
assistance, the State has in effect laws under
which, to the extent that payment has been made
under the State plan for medical assistance for
health care items or services furnished to an
individual, the State is considered to have
acquired the rights of such individual to
payment by any other party for such health care
items or services; and
(I) that the State shall provide assurances
satisfactory to the Secretary that the State
has in effect laws requiring health insurers,
including self-insured plans, group health
plans (as defined in section 607(1) of the
Employee Retirement Income Security Act of
1974), service benefit plans, managed care
organizations, pharmacy benefit managers, or
other parties that are, by statute, contract,
or agreement, legally responsible for payment
of a claim for a health care item or service,
as a condition of doing business in the State,
to--
(i) provide, with respect to
individuals who are eligible (and, at
State option, individuals who apply or
whose eligibility for medical
assistance is being evaluated in
accordance with section 1902(e)(13)(D))
for, or are provided, medical
assistance under the State plan under
this title (and, at State option, child
health assistance under title XXI),
upon the request of the State,
information to determine during what
period the individual or their spouses
or their dependents may be (or may have
been) covered by a health insurer and
the nature of the coverage that is or
was provided by the health insurer
(including the name, address, and
identifying number of the plan) in a
manner prescribed by the Secretary;
(ii) accept the State's right of
recovery and the assignment to the
State of any right of an individual or
other entity to payment from the party
for an item or service for which
payment has been made under the State
plan;
(iii) respond to any inquiry by the
State regarding a claim for payment for
any health care item or service that is
submitted not later than 3 years after
the date of the provision of such
health care item or service; and
(iv) agree not to deny a claim
submitted by the State solely on the
basis of the date of submission of the
claim, the type or format of the claim
form, or a failure to present proper
documentation at the point-of-sale that
is the basis of the claim, if--
(I) the claim is submitted by
the State within the 3-year
period beginning on the date on
which the item or service was
furnished; and
(II) any action by the State
to enforce its rights with
respect to such claim is
commenced within 6 years of the
State's submission of such
claim;
(26) if the State plan includes medical assistance
for inpatient mental hospital services, provide, with
respect to each patient receiving such services, for a
regular program of medical review (including medical
evaluation) of his need for such services, and for a
written plan of care;
(27) provide for agreements with every person or
institution providing services under the State plan
under which such person or institution agrees (A) to
keep such records as are necessary fully to disclose
the extent of the services provided to individuals
receiving assistance under the State plan, and (B) to
furnish the State agency or the Secretary with such
information, regarding any payments claimed by such
person or institution for providing services under the
State plan, as the State agency or the Secretary may
from time to time request;
(28) provide--
(A) that any nursing facility receiving
payments under such plan must satisfy all the
requirements of subsections (b) through (d) of
section 1919 as they apply to such facilities;
(B) for including in ``nursing facility
services'' at least the items and services
specified (or deemed to be specified) by the
Secretary under section 1919(f)(7) and making
available upon request a description of the
items and services so included;
(C) for procedures to make available to the
public the data and methodology used in
establishing payment rates for nursing
facilities under this title; and
(D) for compliance (by the date specified in
the respective sections) with the requirements
of--
(i) section 1919(e);
(ii) section 1919(g) (relating to
responsibility for survey and
certification of nursing facilities);
and
(iii) sections 1919(h)(2)(B) and
1919(h)(2)(D) (relating to
establishment and application of
remedies);
(29) include a State program which meets the
requirements set forth in section 1908, for the
licensing of administrators of nursing homes;
(30)(A) provide such methods and procedures relating
to the utilization of, and the payment for, care and
services available under the plan (including but not
limited to utilization review plans as provided for in
section 1903(i)(4)) as may be necessary to safeguard
against unnecessary utilization of such care and
services and to assure that payments are consistent
with efficiency, economy, and quality of care and are
sufficient to enlist enough providers so that care and
services are available under the plan at least to the
extent that such care and services are available to the
general population in the geographic area; and
(B) provide, under the program described in
subparagraph (A), that--
(i) each admission to a hospital,
intermediate care facility for the mentally
retarded, or hospital for mental diseases is
reviewed or screened in accordance with
criteria established by medical and other
professional personnel who are not themselves
directly responsible for the care of the
patient involved, and who do not have a
significant financial interest in any such
institution and are not, except in the case of
a hospital, employed by the institution
providing the care involved, and
(ii) the information developed from such
review or screening, along with the data
obtained from prior reviews of the necessity
for admission and continued stay of patients by
such professional personnel, shall be used as
the basis for establishing the size and
composition of the sample of admissions to be
subject to review and evaluation by such
personnel, and any such sample may be of any
size up to 100 percent of all admissions and
must be of sufficient size to serve the purpose
of (I) identifying the patterns of care being
provided and the changes occurring over time in
such patterns so that the need for modification
may be ascertained, and (II) subjecting
admissions to early or more extensive review
where information indicates that such
consideration is warranted to a hospital,
intermediate care facility for the mentally
retarded, or hospital for mental diseases;
(31) with respect to services in an intermediate care
facility for the mentally retarded (where the State
plan includes medical assistance for such services)
provide, with respect to each patient receiving such
services, for a written plan of care, prior to
admission to or authorization of benefits in such
facility, in accordance with regulations of the
Secretary, and for a regular program of independent
professional review (including medical evaluation)
which shall periodically review his need for such
services;
(32) provide that no payment under the plan for any
care or service provided to an individual shall be made
to anyone other than such individual or the person or
institution providing such care or service, under an
assignment or power of attorney or otherwise; except
that--
(A) in the case of any care or service
provided by a physician, dentist, or other
individual practitioner, such payment may be
made (i) to the employer of such physician,
dentist, or other practitioner if such
physician, dentist, or practitioner is required
as a condition of his employment to turn over
his fee for such care or service to his
employer, or (ii) (where the care or service
was provided in a hospital, clinic, or other
facility) to the facility in which the care or
service was provided if there is a contractual
arrangement between such physician, dentist, or
practitioner and such facility under which such
facility submits the bill for such care or
service;
(B) nothing in this paragraph shall be
construed (i) to prevent the making of such a
payment in accordance with an assignment from
the person or institution providing the care or
service involved if such assignment is made to
a governmental agency or entity or is
established by or pursuant to the order of a
court of competent jurisdiction, or (ii) to
preclude an agent of such person or institution
from receiving any such payment if (but only
if) such agent does so pursuant to an agency
agreement under which the compensation to be
paid to the agent for his services for or in
connection with the billing or collection of
payments due such person or institution under
the plan is unrelated (directly or indirectly)
to the amount of such payments or the billings
therefor, and is not dependent upon the actual
collection of any such payment;
(C) in the case of services furnished (during
a period that does not exceed 14 continuous
days in the case of an informal reciprocal
arrangement or 90 continuous days (or such
longer period as the Secretary may provide) in
the case of an arrangement involving per diem
or other fee-for-time compensation) by, or
incident to the services of, one physician to
the patients of another physician who submits
the claim for such services, payment shall be
made to the physician submitting the claim (as
if the services were furnished by, or incident
to, the physician's services), but only if the
claim identifies (in a manner specified by the
Secretary) the physician who furnished the
services; and
(D) in the case of payment for a childhood
vaccine administered before October 1, 1994, to
individuals entitled to medical assistance
under the State plan, the State plan may make
payment directly to the manufacturer of the
vaccine under a voluntary replacement program
agreed to by the State pursuant to which the
manufacturer (i) supplies doses of the vaccine
to providers administering the vaccine, (ii)
periodically replaces the supply of the
vaccine, and (iii) charges the State the
manufacturer's price to the Centers for Disease
Control and Prevention for the vaccine so
administered (which price includes a reasonable
amount to cover shipping and the handling of
returns);
(33) provide--
(A) that the State health agency, or other
appropriate State medical agency, shall be
responsible for establishing a plan, consistent
with regulations prescribed by the Secretary,
for the review by appropriate professional
health personnel of the appropriateness and
quality of care and services furnished to
recipients of medical assistance under the plan
in order to provide guidance with respect
thereto in the administration of the plan to
the State agency established or designated
pursuant to paragraph (5) and, where
applicable, to the State agency described in
the second sentence of this subsection; and
(B) that, except as provided in section
1919(g), the State or local agency utilized by
the Secretary for the purpose specified in the
first sentence of section 1864(a), or, if such
agency is not the State agency which is
responsible for licensing health institutions,
the State agency responsible for such
licensing, will perform for the State agency
administering or supervising the administration
of the plan approved under this title the
function of determining whether institutions
and agencies meet the requirements for
participation in the program under such plan,
except that, if the Secretary has cause to
question the adequacy of such determinations,
the Secretary is authorized to validate State
determinations and, on that basis, make
independent and binding determinations
concerning the extent to which individual
institutions and agencies meet the requirements
for participation;
(34) provide that in the case of any individual who
has been determined to be eligible for medical
assistance under the plan, such assistance will be made
available to him for care and services included under
the plan and furnished in or after the third month
before the month in which he made application (or
application was made on his behalf in the case of a
deceased individual) for such assistance if such
individual was (or upon application would have been)
eligible for such assistance at the time such care and
services were furnished;
(35) provide that any disclosing entity (as defined
in section 1124(a)(2)) receiving payments under such
plan complies with the requirements of section 1124;
(36) provide that within 90 days following the
completion of each survey of any health care facility,
laboratory, agency, clinic, or organization, by the
appropriate State agency described in paragraph (9),
such agency shall (in accordance with regulations of
the Secretary) make public in readily available form
and place the pertinent findings of each such survey
relating to the compliance of each such health care
facility, laboratory, clinic, agency, or organization
with (A) the statutory conditions of participation
imposed under this title, and (B) the major additional
conditions which the Secretary finds necessary in the
interest of health and safety of individuals who are
furnished care or services by any such facility,
laboratory, clinic, agency, or organization;
(37) provide for claims payment procedures which (A)
ensure that 90 per centum of claims for payment (for
which no further written information or substantiation
is required in order to make payment) made for services
covered under the plan and furnished by health care
practitioners through individual or group practices or
through shared health facilities are paid within 30
days of the date of receipt of such claims and that 99
per centum of such claims are paid within 90 days of
the date of receipt of such claims, and (B) provide for
procedures of prepayment and postpayment claims review,
including review of appropriate data with respect to
the recipient and provider of a service and the nature
of the service for which payment is claimed, to ensure
the proper and efficient payment of claims and
management of the program;
(38) require that an entity (other than an individual
practitioner or a group of practitioners) that
furnishes, or arranges for the furnishing of, items or
services under the plan, shall supply (within such
period as may be specified in regulations by the
Secretary or by the single State agency which
administers or supervises the administration of the
plan) upon request specifically addressed to such
entity by the Secretary or such State agency, the
information described in section 1128(b)(9);
(39) provide that the State agency shall exclude any
specified individual or entity from participation in
the program under the State plan for the period
specified by the Secretary, when required by him to do
so pursuant to section 1128 or section 1128A, terminate
the participation of any individual or entity in such
program if (subject to such exceptions as are permitted
with respect to exclusion under sections 1128(c)(3)(B)
and 1128(d)(3)(B)) participation of such individual or
entity is terminated under title XVIII or any other
State plan under this title, and provide that no
payment may be made under the plan with respect to any
item or service furnished by such individual or entity
during such period;
(40) require each health services facility or
organization which receives payments under the plan and
of a type for which a uniform reporting system has been
established under section 1121(a) to make reports to
the Secretary of information described in such section
in accordance with the uniform reporting system
(established under such section) for that type of
facility or organization;
(41) provide that whenever a provider of services or
any other person is terminated, suspended, or otherwise
sanctioned or prohibited from participating under the
State plan, the State agency shall promptly notify the
Secretary and, in the case of a physician and
notwithstanding paragraph (7), the State medical
licensing board of such action;
(42) provide that--
(A) the records of any entity participating
in the plan and providing services reimbursable
on a cost-related basis will be audited as the
Secretary determines to be necessary to insure
that proper payments are made under the plan;
and
(B) not later than December 31, 2010, the
State shall--
(i) establish a program under which
the State contracts (consistent with
State law and in the same manner as the
Secretary enters into contracts with
recovery audit contractors under
section 1893(h), subject to such
exceptions or requirements as the
Secretary may require for purposes of
this title or a particular State) with
1 or more recovery audit contractors
for the purpose of identifying
underpayments and overpayments and
recouping overpayments under the State
plan and under any waiver of the State
plan with respect to all services for
which payment is made to any entity
under such plan or waiver; and
(ii) provide assurances satisfactory
to the Secretary that--
(I) under such contracts,
payment shall be made to such a
contractor only from amounts
recovered;
(II) from such amounts
recovered, payment--
(aa) shall be made on
a contingent basis for
collecting
overpayments; and
(bb) may be made in
such amounts as the
State may specify for
identifying
underpayments;
(III) the State has an
adequate process for entities
to appeal any adverse
determination made by such
contractors; and
(IV) such program is carried
out in accordance with such
requirements as the Secretary
shall specify, including--
(aa) for purposes of
section 1903(a)(7),
that amounts expended
by the State to carry
out the program shall
be considered amounts
expended as necessary
for the proper and
efficient
administration of the
State plan or a waiver
of the plan;
(bb) that section
1903(d) shall apply to
amounts recovered under
the program; and
(cc) that the State
and any such
contractors under
contract with the State
shall coordinate such
recovery audit efforts
with other contractors
or entities performing
audits of entities
receiving payments
under the State plan or
waiver in the State,
including efforts with
Federal and State law
enforcement with
respect to the
Department of Justice,
including the Federal
Bureau of
Investigations, the
Inspector General of
the Department of
Health and Human
Services, and the State
medicaid fraud control
unit; and
(43) provide for--
(A) informing all persons in the State who
are under the age of 21 and who have been
determined to be eligible for medical
assistance including services described in
section 1905(a)(4)(B), of the availability of
early and periodic screening, diagnostic, and
treatment services as described in section
1905(r) and the need for age-appropriate
immunizations against vaccine-preventable
diseases,
(B) providing or arranging for the provision
of such screening services in all cases where
they are requested,
(C) arranging for (directly or through
referral to appropriate agencies,
organizations, or individuals) corrective
treatment the need for which is disclosed by
such child health screening services, and
(D) reporting to the Secretary (in a uniform
form and manner established by the Secretary,
by age group and by basis of eligibility for
medical assistance, and by not later than April
1 after the end of each fiscal year, beginning
with fiscal year 1990) the following
information relating to early and periodic
screening, diagnostic, and treatment services
provided under the plan during each fiscal
year:
(i) the number of children provided
child health screening services,
(ii) the number of children referred
for corrective treatment (the need for
which is disclosed by such child health
screening services),
(iii) the number of children
receiving dental services, and other
information relating to the provision
of dental services to such children
described in section 2108(e) and
(iv) the State's results in attaining
the participation goals set for the
State under section 1905(r);
(44) in each case for which payment for inpatient
hospital services, services in an intermediate care
facility for the mentally retarded, or inpatient mental
hospital services is made under the State plan--
(A) a physician (or, in the case of skilled
nursing facility services or intermediate care
facility services, a physician, or a nurse
practitioner or clinical nurse specialist who
is not an employee of the facility but is
working in collaboration with a physician)
certifies at the time of admission, or, if
later, the time the individual applies for
medical assistance under the State plan (and a
physician, a physician assistant under the
supervision of a physician, or, in the case of
skilled nursing facility services or
intermediate care facility services, a
physician, or a nurse practitioner or clinical
nurse specialist who is not an employee of the
facility but is working in collaboration with a
physician, recertifies, where such services are
furnished over a period of time, in such cases,
at least as often as required under section
1903(g)(6) (or, in the case of services that
are services provided in an intermediate care
facility for the mentally retarded, every
year), and accompanied by such supporting
material, appropriate to the case involved, as
may be provided in regulations of the
Secretary), that such services are or were
required to be given on an inpatient basis
because the individual needs or needed such
services, and
(B) such services were furnished under a plan
established and periodically reviewed and
evaluated by a physician, or, in the case of
skilled nursing facility services or
intermediate care facility services, a
physician, or a nurse practitioner or clinical
nurse specialist who is not an employee of the
facility but is working in collaboration with a
physician;
(45) provide for mandatory assignment of rights of
payment for medical support and other medical care owed
to recipients, in accordance with section 1912;
(46)(A) provide that information is requested and
exchanged for purposes of income and eligibility
verification in accordance with a State system which
meets the requirements of section 1137 of this Act; and
(B) provide, with respect to an individual declaring
to be a citizen or national of the United States for
purposes of establishing eligibility under this title,
that the State shall satisfy the requirements of--
(i) section 1903(x); or
(ii) subsection (ee);
(47) provide--
(A) at the option of the State, for making
ambulatory prenatal care available to pregnant
women during a presumptive eligibility period
in accordance with section 1920 and provide for
making medical assistance for items and
services described in subsection (a) of section
1920A available to children during a
presumptive eligibility period in accordance
with such section and provide for making
medical assistance available to individuals
described in subsection (a) of section 1920B
during a presumptive eligibility period in
accordance with such section and provide for
making medical assistance available to
individuals described in subsection (a) of
section 1920C during a presumptive eligibility
period in accordance with such section; and
(B) that any hospital that is a participating
provider under the State plan may elect to be a
qualified entity for purposes of determining,
on the basis of preliminary information,
whether any individual is eligible for medical
assistance under the State plan or under a
waiver of the plan for purposes of providing
the individual with medical assistance during a
presumptive eligibility period, in the same
manner, and subject to the same requirements,
as apply to the State options with respect to
populations described in section 1920, 1920A,
1920B, or 1920C (but without regard to whether
the State has elected to provide for a
presumptive eligibility period under any such
sections), subject to such guidance as the
Secretary shall establish;
(48) provide a method of making cards evidencing
eligibility for medical assistance available to an
eligible individual who does not reside in a permanent
dwelling or does not have a fixed home or mailing
address;
(49) provide that the State will provide information
and access to certain information respecting sanctions
taken against health care practitioners and providers
by State licensing authorities in accordance with
section 1921;
(50) provide, in accordance with subsection (q), for
a monthly personal needs allowance for certain
institutionalized individuals and couples;
(51) meet the requirements of section 1924 (relating
to protection of community spouses);
(52) meet the requirements of section 1925 (relating
to extension of eligibility for medical assistance);
(53) provide--
(A) for notifying in a timely manner all
individuals in the State who are determined to
be eligible for medical assistance and who are
pregnant women, breastfeeding or postpartum
women (as defined in section 17 of the Child
Nutrition Act of 1966), or children below the
age of 5, of the availability of benefits
furnished by the special supplemental nutrition
program under such section, and
(B) for referring any such individual to the
State agency responsible for administering such
program;
(54) in the case of a State plan that provides
medical assistance for covered outpatient drugs (as
defined in section 1927(k)), comply with the applicable
requirements of section 1927;
(55) provide for receipt and initial processing of
applications of individuals for medical assistance
under subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI),
(a)(10)(A)(i)(VII), or (a)(10)(A)(ii)(IX)--
(A) at locations which are other than those
used for the receipt and processing of
applications for aid under part A of title IV
and which include facilities defined as
disproportionate share hospitals under section
1923(a)(1)(A) and Federally-qualified health
centers described in section 1905(1)(2)(B), and
(B) using applications which are other than
those used for applications for aid under such
part;
(56) provide, in accordance with subsection (s), for
adjusted payments for certain inpatient hospital
services;
(57) provide that each hospital, nursing facility,
provider of home health care or personal care services,
hospice program, or medicaid managed care organization
(as defined in section 1903(m)(1)(A)) receiving funds
under the plan shall comply with the requirements of
subsection (w);
(58) provide that the State, acting through a State
agency, association, or other private nonprofit entity,
develop a written description of the law of the State
(whether statutory or as recognized by the courts of
the State) concerning advance directives that would be
distributed by providers or organizations under the
requirements of subsection (w);
(59) maintain a list (updated not less often than
monthly, and containing each physician's unique
identifier provided under the system established under
subsection (x)) of all physicians who are certified to
participate under the State plan;
(60) provide that the State agency shall provide
assurances satisfactory to the Secretary that the State
has in effect the laws relating to medical child
support required under section 1908A;
(61) provide that the State must demonstrate that it
operates a medicaid fraud and abuse control unit
described in section 1903(q) that effectively carries
out the functions and requirements described in such
section, as determined in accordance with standards
established by the Secretary, unless the State
demonstrates to the satisfaction of the Secretary that
the effective operation of such a unit in the State
would not be cost-effective because minimal fraud
exists in connection with the provision of covered
services to eligible individuals under the State plan,
and that beneficiaries under the plan will be protected
from abuse and neglect in connection with the provision
of medical assistance under the plan without the
existence of such a unit;
(62) provide for a program for the distribution of
pediatric vaccines to program-registered providers for
the immunization of vaccine-eligible children in
accordance with section 1928;
(63) provide for administration and determinations of
eligibility with respect to individuals who are (or
seek to be) eligible for medical assistance based on
the application of section 1931;
(64) provide, not later than 1 year after the date of
the enactment of this paragraph, a mechanism to receive
reports from beneficiaries and others and compile data
concerning alleged instances of waste, fraud, and abuse
relating to the operation of this title;
(65) provide that the State shall issue provider
numbers for all suppliers of medical assistance
consisting of durable medical equipment, as defined in
section 1861(n), and the State shall not issue or renew
such a supplier number for any such supplier unless--
(A)(i) full and complete information as to
the identity of each person with an ownership
or control interest (as defined in section
1124(a)(3)) in the supplier or in any
subcontractor (as defined by the Secretary in
regulations) in which the supplier directly or
indirectly has a 5 percent or more ownership
interest; and
(ii) to the extent determined to be feasible
under regulations of the Secretary, the name of
any disclosing entity (as defined in section
1124(a)(2)) with respect to which a person with
such an ownership or control interest in the
supplier is a person with such an ownership or
control interest in the disclosing entity; and
(B) a surety bond in a form specified by the
Secretary under section 1834(a)(16)(B) and in
an amount that is not less than $50,000 or such
comparable surety bond as the Secretary may
permit under the second sentence of such
section;
(66) provide for making eligibility determinations
under section 1935(a);
(67) provide, with respect to services covered under
the State plan (but not under title XVIII) that are
furnished to a PACE program eligible individual
enrolled with a PACE provider by a provider
participating under the State plan that does not have a
contract or other agreement with the PACE provider that
establishes payment amounts for such services, that
such participating provider may not require the PACE
provider to pay the participating provider an amount
greater than the amount that would otherwise be payable
for the service to the participating provider under the
State plan for the State where the PACE provider is
located (in accordance with regulations issued by the
Secretary);
(68) provide that any entity that receives or makes
annual payments under the State plan of at least
$5,000,000, as a condition of receiving such payments,
shall--
(A) establish written policies for all
employees of the entity (including management),
and of any contractor or agent of the entity,
that provide detailed information about the
False Claims Act established under sections
3729 through 3733 of title 31, United States
Code, administrative remedies for false claims
and statements established under chapter 38 of
title 31, United States Code, any State laws
pertaining to civil or criminal penalties for
false claims and statements, and whistleblower
protections under such laws, with respect to
the role of such laws in preventing and
detecting fraud, waste, and abuse in Federal
health care programs (as defined in section
1128B(f));
(B) include as part of such written policies,
detailed provisions regarding the entity's
policies and procedures for detecting and
preventing fraud, waste, and abuse; and
(C) include in any employee handbook for the
entity, a specific discussion of the laws
described in subparagraph (A), the rights of
employees to be protected as whistleblowers,
and the entity's policies and procedures for
detecting and preventing fraud, waste, and
abuse;
(69) provide that the State must comply with any
requirements determined by the Secretary to be
necessary for carrying out the Medicaid Integrity
Program established under section 1936;
(70) at the option of the State and notwithstanding
paragraphs (1), (10)(B), and (23), provide for the
establishment of a non-emergency medical transportation
brokerage program in order to more cost-effectively
provide transportation for individuals eligible for
medical assistance under the State plan who need access
to medical care or services and have no other means of
transportation which--
(A) may include a wheelchair van, taxi,
stretcher car, bus passes and tickets, secured
transportation, and such other transportation
as the Secretary determines appropriate; and
(B) may be conducted under contract with a
broker who--
(i) is selected through a competitive
bidding process based on the State's
evaluation of the broker's experience,
performance, references, resources,
qualifications, and costs;
(ii) has oversight procedures to
monitor beneficiary access and
complaints and ensure that transport
personnel are licensed, qualified,
competent, and courteous;
(iii) is subject to regular auditing
and oversight by the State in order to
ensure the quality of the
transportation services provided and
the adequacy of beneficiary access to
medical care and services; and
(iv) complies with such requirements
related to prohibitions on referrals
and conflict of interest as the
Secretary shall establish (based on the
prohibitions on physician referrals
under section 1877 and such other
prohibitions and requirements as the
Secretary determines to be
appropriate);
(71) provide that the State will implement an asset
verification program as required under section 1940;
(72) provide that the State will not prevent a
Federally-qualified health center from entering into
contractual relationships with private practice dental
providers in the provision of Federally-qualified
health center services;
(73) in the case of any State in which 1 or more
Indian Health Programs or Urban Indian Organizations
furnishes health care services, provide for a process
under which the State seeks advice on a regular,
ongoing basis from designees of such Indian Health
Programs and Urban Indian Organizations on matters
relating to the application of this title that are
likely to have a direct effect on such Indian Health
Programs and Urban Indian Organizations and that--
(A) shall include solicitation of advice
prior to submission of any plan amendments,
waiver requests, and proposals for
demonstration projects likely to have a direct
effect on Indians, Indian Health Programs, or
Urban Indian Organizations; and
(B) may include appointment of an advisory
committee and of a designee of such Indian
Health Programs and Urban Indian Organizations
to the medical care advisory committee advising
the State on its State plan under this title;
(74) provide for maintenance of effort under the
State plan or under any waiver of the plan in
accordance with subsection (gg); and
(75) provide that, beginning January 2015, and
annually thereafter, the State shall submit a report to
the Secretary that contains--
(A) the total number of enrolled and newly
enrolled individuals in the State plan or under
a waiver of the plan for the fiscal year ending
on September 30 of the preceding calendar year,
disaggregated by population, including
children, parents, nonpregnant childless
adults, disabled individuals, elderly
individuals, and such other categories or sub-
categories of individuals eligible for medical
assistance under the State plan or under a
waiver of the plan as the Secretary may
require;
(B) a description, which may be specified by
population, of the outreach and enrollment
processes used by the State during such fiscal
year; and
(C) any other data reporting determined
necessary by the Secretary to monitor
enrollment and retention of individuals
eligible for medical assistance under the State
plan or under a waiver of the plan;
(76) provide that any data collected under the State
plan meets the requirements of section 3101 of the
Public Health Service Act;
(77) provide that the State shall comply with
provider and supplier screening, oversight, and
reporting requirements in accordance with subsection
(kk);
(79) provide that any agent, clearinghouse, or other
alternate payee (as defined by the Secretary) that
submits claims on behalf of a health care provider must
register with the State and the Secretary in a form and
manner specified by the Secretary;
(80) provide that the State shall not provide any
payments for items or services provided under the State
plan or under a waiver to any financial institution or
entity located outside of the United States; [and]
(81) provide for implementation of the payment models
specified by the Secretary under section 1115A(c) for
implementation on a nationwide basis unless the State
demonstrates to the satisfaction of the Secretary that
implementation would not be administratively feasible
or appropriate to the health care delivery system of
the State[.]; and
(82) provide that the State agency responsible for
administering the State plan under this title provides
assurances to the Secretary that the State agency is in
compliance with subparagraphs (A), (B), and (C) of
section 1128K(b)(2).
Notwithstanding paragraph (5), if on January 1, 1965, and on
the date on which a State submits its plan for approval under
this title, the State agency which administered or supervised
the administration of the plan of such State approved under
title X (or title XVI, insofar as it relates to the blind) was
different from the State agency which administered or
supervised the administration of the State plan approved under
title I (or title XVI, insofar as it relates to the aged), the
State agency which administered or supervised the
administration of such plan approved under title X (or title
XVI, insofar as it relates to the blind) may be designated to
administer or supervise the administration of the portion of
the State plan for medical assistance which relates to blind
individuals and a different State agency may be established or
designated to administer or supervise the administration of the
rest of the State plan for medical assistance; and in such case
the part of the plan which each such agency administers, or the
administration of which each such agency supervises, shall be
regarded as a separate plan for purposes of this title (except
for purposes of paragraph (10)). The provisions of paragraphs
(9)(A), (31), and (33) and of section 1903(i)(4) shall not
apply to a religious nonmedical health care institution (as
defined in section 1861(ss)(1)).
For purposes of paragraph (10) any individual who, for the
month of August 1972, was eligible for or receiving aid or
assistance under a State plan approved under title I, X, XIV,
or XVI, or part A of title IV and who for such month was
entitled to monthly insurance benefits under title II shall for
purposes of this title only be deemed to be eligible for
financial aid or assistance for any month thereafter if such
individual would have been eligible for financial aid or
assistance for such month had the increase in monthly insurance
benefits under title II resulting from enactment of Public Law
92-336 not been applicable to such individual.
The requirement of clause (A) of paragraph (37) with respect
to a State plan may be waived by the Secretary if he finds that
the State has exercised good faith in trying to meet such
requirement. For purposes of this title, any child who meets
the requirements of paragraph (1) or (2) of section 473(b)
shall be deemed to be a dependent child as defined in section
406 and shall be deemed to be a recipient of aid to families
with dependent children under part A of title IV in the State
where such child resides. Notwithstanding paragraph (10)(B) or
any other provision of this subsection, a State plan shall
provide medical assistance with respect to an alien who is not
lawfully admitted for permanent residence or otherwise
permanently residing in the United States under color of law
only in accordance with section 1903(v).
(b) The Secretary shall approve any plan which fulfills the
conditions specified in subsection (a) of this section, except
that he shall not approve any plan which imposes, as a
condition of eligibility for medical assistance under the
plan--
(1) an age requirement of more than 65 years; or
(2) any residence requirement which excludes any
individual who resides in the State, regardless of
whether or not the residence is maintained permanently
or at a fixed address; or
(3) any citizenship requirement which excludes any
citizen of the United States.
(c) Notwithstanding subsection (b), the Secretary shall not
approve any State plan for medical assistance if the State
requires individuals described in subsection (l)(1) to apply
for assistance under the State program funded under part A of
title IV as a condition of applying for or receiving medical
assistance under this title.
(d) If a State contracts with an entity which meets the
requirements of section 1152, as determined by the Secretary,
or a utilization and quality control peer review organization
having a contract with the Secretary under part B of title XI
for the performance of medical or utilization review functions
(including quality review functions described in subsection
(a)(30)(C)) required under this title of a State plan with
respect to specific services or providers (or services or
providers in a geographic area of the State), such requirements
shall be deemed to be met for those services or providers (or
services or providers in that area) by delegation to such an
entity or organization under the contract of the State's
authority to conduct such review activities if the contract
provides for the performance of activities not inconsistent
with part B of title XI and provides for such assurances of
satisfactory performance by such an entity or organization as
the Secretary may prescribe.
(e)(1) Beginning April 1, 1990, for provisions relating to
the extension of eligibility for medical assistance for certain
families who have received aid pursuant to a State plan
approved under part A of title IV and have earned income, see
section 1925.
(2)(A) In the case of an individual who is enrolled with a
medicaid managed care organization (as defined in section
1903(m)(1)(A)), with a primary care case manager (as defined in
section 1905(t)), or with an eligible organization with a
contract under section 1876 and who would (but for this
paragraph) lose eligibility for benefits under this title
before the end of the minimum enrollment period (defined in
subparagraph (B)), the State plan may provide, notwithstanding
any other provision of this title, that the individual shall be
deemed to continue to be eligible for such benefits until the
end of such minimum period, but, except for benefits furnished
under section 1905(a)(4)(C), only with respect to such benefits
provided to the individual as an enrollee of such organization
or entity or by or through the case manager.
(B) For purposes of subparagraph (A), the term ``minimum
enrollment period'' means, with respect to an individual's
enrollment with an organization or entity under a State plan, a
period, established by the State, of not more than six months
beginning on the date the individual's enrollment with the
organization or entity becomes effective.
(3) At the option of the State, any individual who--
(A) is 18 years of age or younger and qualifies as a
disabled individual under section 1614(a);
(B) with respect to whom there has been a
determination by the State that--
(i) the individual requires a level of care
provided in a hospital, nursing facility, or
intermediate care facility for the mentally
retarded,
(ii) it is appropriate to provide such care
for the individual outside such an institution,
and
(iii) the estimated amount which would be
expended for medical assistance for the
individual for such care outside an institution
is not greater than the estimated amount which
would otherwise be expended for medical
assistance for the individual within an
appropriate institution; and
(C) if the individual were in a medical institution,
would be eligible for medical assistance under the
State plan under this title,
shall be deemed, for purposes of this title only, to be
an individual with respect to whom a supplemental
security income payment, or State supplemental payment,
respectively, is being paid under title XVI.
(4) A child born to a woman eligible for and receiving
medical assistance under a State plan on the date of the
child's birth shall be deemed to have applied for medical
assistance and to have been found eligible for such assistance
under such plan on the date of such birth and to remain
eligible for such assistance for a period of one year. During
the period in which a child is deemed under the preceding
sentence to be eligible for medical assistance, the medical
assistance eligibility identification number of the mother
shall also serve as the identification number of the child, and
all claims shall be submitted and paid under such number
(unless the State issues a separate identification number for
the child before such period expires). Notwithstanding the
preceding sentence, in the case of a child who is born in the
United States to an alien mother for whom medical assistance
for the delivery of the child is made available pursuant to
section 1903(v), the State immediately shall issue a separate
identification number for the child upon notification by the
facility at which such delivery occurred of the child's birth.
(5) A woman who, while pregnant, is eligible for, has applied
for, and has received medical assistance under the State plan,
shall continue to be eligible under the plan, as though she
were pregnant, for all pregnancy-related and postpartum medical
assistance under the plan, through the end of the month in
which the 60-day period (beginning on the last day of her
pregnancy) ends.
(6) In the case of a pregnant woman described in subsection
(a)(10) who, because of a change in income of the family of
which she is a member, would not otherwise continue to be
described in such subsection, the woman shall be deemed to
continue to be an individual described in subsection
(a)(10)(A)(i)(IV) and subsection (l)(1)(A) without regard to
such change of income through the end of the month in which the
60-day period (beginning on the last day of her pregnancy)
ends. The preceding sentence shall not apply in the case of a
woman who has been provided ambulatory prenatal care pursuant
to section 1920 during a presumptive eligibility period and is
then, in accordance with such section, determined to be
ineligible for medical assistance under the State plan.
(7) In the case of an infant or child described in
subparagraph (B), (C), or (D) of subsection (l)(1) or paragraph
(2) of section 1905(n)--
(A) who is receiving inpatient services for which
medical assistance is provided on the date the infant
or child attains the maximum age with respect to which
coverage is provided under the State plan for such
individuals, and
(B) who, but for attaining such age, would remain
eligible for medical assistance under such subsection,
the infant or child shall continue to be treated as an
individual described in such respective provision until the end
of the stay for which the inpatient services are furnished.
(8) If an individual is determined to be a qualified medicare
beneficiary (as defined in section 1905(p)(1)), such
determination shall apply to services furnished after the end
of the month in which the determination first occurs. For
purposes of payment to a State under section 1903(a), such
determination shall be considered to be valid for an individual
for a period of 12 months, except that a State may provide for
such determinations more frequently, but not more frequently
than once every 6 months for an individual.
(9)(A) At the option of the State, the plan may include as
medical assistance respiratory care services for any individual
who--
(i) is medically dependent on a ventilator for life
support at least six hours per day;
(ii) has been so dependent for at least 30
consecutive days (or the maximum number of days
authorized under the State plan, whichever is less) as
an inpatient;
(iii) but for the availability of respiratory care
services, would require respiratory care as an
inpatient in a hospital, nursing facility, or
intermediate care facility for the mentally retarded
and would be eligible to have payment made for such
inpatient care under the State plan;
(iv) has adequate social support services to be cared
for at home; and
(v) wishes to be cared for at home.
(B) The requirements of subparagraph (A)(ii) may be satisfied
by a continuous stay in one or more hospitals, nursing
facilities, or intermediate care facilities for the mentally
retarded.
(C) For purposes of this paragraph, respiratory care services
means services provided on a part-time basis in the home of the
individual by a respiratory therapist or other health care
professional trained in respiratory therapy (as determined by
the State), payment for which is not otherwise included within
other items and services furnished to such individual as
medical assistance under the plan.
(10)(A) The fact that an individual, child, or pregnant woman
may be denied aid under part A of title IV pursuant to section
402(a)(43) shall not be construed as denying (or permitting a
State to deny) medical assistance under this title to such
individual, child, or woman who is eligible for assistance
under this title on a basis other than the receipt of aid under
such part.
(B) If an individual, child, or pregnant woman is receiving
aid under part A of title IV and such aid is terminated
pursuant to section 402(a)(43), the State may not discontinue
medical assistance under this title for the individual, child,
or woman until the State has determined that the individual,
child, or woman is not eligible for assistance under this title
on a basis other than the receipt of aid under such part.
(11)(A) In the case of an individual who is enrolled with a
group health plan under section 1906 and who would (but for
this paragraph) lose eligibility for benefits under this title
before the end of the minimum enrollment period (defined in
subparagraph (B)), the State plan may provide, notwithstanding
any other provision of this title, that the individual shall be
deemed to continue to be eligible for such benefits until the
end of such minimum period, but only with respect to such
benefits provided to the individual as an enrollee of such
plan.
(B) For purposes of subparagraph (A), the term ``minimum
enrollment period'' means, with respect to an individual's
enrollment with a group health plan, a period established by
the State, of not more than 6 months beginning on the date the
individual's enrollment under the plan becomes effective.
(12) At the option of the State, the plan may provide that an
individual who is under an age specified by the State (not to
exceed 19 years of age) and who is determined to be eligible
for benefits under a State plan approved under this title under
subsection (a)(10)(A) shall remain eligible for those benefits
until the earlier of--
(A) the end of a period (not to exceed 12 months)
following the determination; or
(B) the time that the individual exceeds that age.
(13) Express Lane Option.--
(A) In general.--
(i) Option to use a finding from an express
lane agency.--At the option of the State, the
State plan may provide that in determining
eligibility under this title for a child (as
defined in subparagraph (G)), the State may
rely on a finding made within a reasonable
period (as determined by the State) from an
Express Lane agency (as defined in subparagraph
(F)) when it determines whether a child
satisfies one or more components of eligibility
for medical assistance under this title. The
State may rely on a finding from an Express
Lane agency notwithstanding sections
1902(a)(46)(B) and 1137(d) or any differences
in budget unit, disregard, deeming or other
methodology, if the following requirements are
met:
(I) Prohibition on determining
children ineligible for coverage.--If a
finding from an Express Lane agency
would result in a determination that a
child does not satisfy an eligibility
requirement for medical assistance
under this title and for child health
assistance under title XXI, the State
shall determine eligibility for
assistance using its regular
procedures.
(II) Notice requirement.--For any
child who is found eligible for medical
assistance under the State plan under
this title or child health assistance
under title XXI and who is subject to
premiums based on an Express Lane
agency's finding of such child's income
level, the State shall provide notice
that the child may qualify for lower
premium payments if evaluated by the
State using its regular policies and of
the procedures for requesting such an
evaluation.
(III) Compliance with screen and
enroll requirement.--The State shall
satisfy the requirements under
subparagraphs (A) and (B) of section
2102(b)(3) (relating to screen and
enroll) before enrolling a child in
child health assistance under title
XXI. At its option, the State may
fulfill such requirements in accordance
with either option provided under
subparagraph (C) of this paragraph.
(IV) Verification of citizenship or
nationality status.--The State shall
satisfy the requirements of section
1902(a)(46)(B) or 2105(c)(9), as
applicable for verifications of
citizenship or nationality status.
(V) Coding.--The State meets the
requirements of subparagraph (E).
(ii) Option to apply to renewals and
redeterminations.--The State may apply the
provisions of this paragraph when conducting
initial determinations of eligibility,
redeterminations of eligibility, or both, as
described in the State plan.
(B) Rules of construction.--Nothing in this paragraph
shall be construed--
(i) to limit or prohibit a State from taking
any actions otherwise permitted under this
title or title XXI in determining eligibility
for or enrolling children into medical
assistance under this title or child health
assistance under title XXI; or
(ii) to modify the limitations in section
1902(a)(5) concerning the agencies that may
make a determination of eligibility for medical
assistance under this title.
(C) Options for satisfying the screen and enroll
requirement.--
(i) In general.--With respect to a child
whose eligibility for medical assistance under
this title or for child health assistance under
title XXI has been evaluated by a State agency
using an income finding from an Express Lane
agency, a State may carry out its duties under
subparagraphs (A) and (B) of section 2102(b)(3)
(relating to screen and enroll) in accordance
with either clause (ii) or clause (iii).
(ii) Establishing a screening threshold.--
(I) In general.--Under this clause,
the State establishes a screening
threshold set as a percentage of the
Federal poverty level that exceeds the
highest income threshold applicable
under this title to the child by a
minimum of 30 percentage points or, at
State option, a higher number of
percentage points that reflects the
value (as determined by the State and
described in the State plan) of any
differences between income
methodologies used by the program
administered by the Express Lane agency
and the methodologies used by the State
in determining eligibility for medical
assistance under this title.
(II) Children with income not above
threshold.--If the income of a child
does not exceed the screening
threshold, the child is deemed to
satisfy the income eligibility criteria
for medical assistance under this title
regardless of whether such child would
otherwise satisfy such criteria.
(III) Children with income above
threshold.--If the income of a child
exceeds the screening threshold, the
child shall be considered to have an
income above the Medicaid applicable
income level described in section
2110(b)(4) and to satisfy the
requirement under section 2110(b)(1)(C)
(relating to the requirement that CHIP
matching funds be used only for
children not eligible for Medicaid). If
such a child is enrolled in child
health assistance under title XXI, the
State shall provide the parent,
guardian, or custodial relative with
the following:
(aa) Notice that the child
may be eligible to receive
medical assistance under the
State plan under this title if
evaluated for such assistance
under the State's regular
procedures and notice of the
process through which a parent,
guardian, or custodial relative
can request that the State
evaluate the child's
eligibility for medical
assistance under this title
using such regular procedures.
(bb) A description of
differences between the medical
assistance provided under this
title and child health
assistance under title XXI,
including differences in cost-
sharing requirements and
covered benefits.
(iii) Temporary enrollment in chip pending
screen and enroll.--
(I) In general.--Under this clause, a
State enrolls a child in child health
assistance under title XXI for a
temporary period if the child appears
eligible for such assistance based on
an income finding by an Express Lane
agency.
(II) Determination of eligibility.--
During such temporary enrollment
period, the State shall determine the
child's eligibility for child health
assistance under title XXI or for
medical assistance under this title in
accordance with this clause.
(III) Prompt follow up.--In making
such a determination, the State shall
take prompt action to determine whether
the child should be enrolled in medical
assistance under this title or child
health assistance under title XXI
pursuant to subparagraphs (A) and (B)
of section 2102(b)(3) (relating to
screen and enroll).
(IV) Requirement for simplified
determination.--In making such a
determination, the State shall use
procedures that, to the maximum
feasible extent, reduce the burden
imposed on the individual of such
determination. Such procedures may not
require the child's parent, guardian,
or custodial relative to provide or
verify information that already has
been provided to the State agency by an
Express Lane agency or another source
of information unless the State agency
has reason to believe the information
is erroneous.
(V) Availability of chip matching
funds during temporary enrollment
period.--Medical assistance for items
and services that are provided to a
child enrolled in title XXI during a
temporary enrollment period under this
clause shall be treated as child health
assistance under such title.
(D) Option for automatic enrollment.--
(i) In general.--The State may initiate and
determine eligibility for medical assistance
under the State Medicaid plan or for child
health assistance under the State CHIP plan
without a program application from, or on
behalf of, the child based on data obtained
from sources other than the child (or the
child's family), but a child can only be
automatically enrolled in the State Medicaid
plan or the State CHIP plan if the child or the
family affirmatively consents to being enrolled
through affirmation in writing, by telephone,
orally, through electronic signature, or
through any other means specified by the
Secretary or by signature on an Express Lane
agency application, if the requirement of
clause (ii) is met.
(ii) Information requirement.--The
requirement of this clause is that the State
informs the parent, guardian, or custodial
relative of the child of the services that will
be covered, appropriate methods for using such
services, premium or other cost sharing charges
(if any) that apply, medical support
obligations (under section 1912(a)) created by
enrollment (if applicable), and the actions the
parent, guardian, or relative must take to
maintain enrollment and renew coverage.
(E) Coding; application to enrollment error rates.--
(i) In general.--For purposes of subparagraph
(A)(iv), the requirement of this subparagraph
for a State is that the State agrees to--
(I) assign such codes as the
Secretary shall require to the children
who are enrolled in the State Medicaid
plan or the State CHIP plan through
reliance on a finding made by an
Express Lane agency for the duration of
the State's election under this
paragraph;
(II) annually provide the Secretary
with a statistically valid sample (that
is approved by Secretary) of the
children enrolled in such plans through
reliance on such a finding by
conducting a full Medicaid eligibility
review of the children identified for
such sample for purposes of determining
an eligibility error rate (as described
in clause (iv)) with respect to the
enrollment of such children (and shall
not include such children in any data
or samples used for purposes of
complying with a Medicaid Eligibility
Quality Control (MEQC) review or a
payment error rate measurement (PERM)
requirement);
(III) submit the error rate
determined under subclause (II) to the
Secretary;
(IV) if such error rate exceeds 3
percent for either of the first 2
fiscal years in which the State elects
to apply this paragraph, demonstrate to
the satisfaction of the Secretary the
specific corrective actions implemented
by the State to improve upon such error
rate; and
(V) if such error rate exceeds 3
percent for any fiscal year in which
the State elects to apply this
paragraph, a reduction in the amount
otherwise payable to the State under
section 1903(a) for quarters for that
fiscal year, equal to the total amount
of erroneous excess payments determined
for the fiscal year only with respect
to the children included in the sample
for the fiscal year that are in excess
of a 3 percent error rate with respect
to such children.
(ii) No punitive action based on error
rate.--The Secretary shall not apply the error
rate derived from the sample under clause (i)
to the entire population of children enrolled
in the State Medicaid plan or the State CHIP
plan through reliance on a finding made by an
Express Lane agency, or to the population of
children enrolled in such plans on the basis of
the State's regular procedures for determining
eligibility, or penalize the State on the basis
of such error rate in any manner other than the
reduction of payments provided for under clause
(i)(V).
(iii) Rule of construction.--Nothing in this
paragraph shall be construed as relieving a
State that elects to apply this paragraph from
being subject to a penalty under section
1903(u), for payments made under the State
Medicaid plan with respect to ineligible
individuals and families that are determined to
exceed the error rate permitted under that
section (as determined without regard to the
error rate determined under clause (i)(II)).
(iv) Error rate defined.--In this
subparagraph, the term ``error rate'' means the
rate of erroneous excess payments for medical
assistance (as defined in section
1903(u)(1)(D)) for the period involved, except
that such payments shall be limited to
individuals for which eligibility
determinations are made under this paragraph
and except that in applying this paragraph
under title XXI, there shall be substituted for
references to provisions of this title
corresponding provisions within title XXI.
(F) Express lane agency.--
(i) In general.--In this paragraph, the term
``Express Lane agency'' means a public agency
that--
(I) is determined by the State
Medicaid agency or the State CHIP
agency (as applicable) to be capable of
making the determinations of one or
more eligibility requirements described
in subparagraph (A)(i);
(II) is identified in the State
Medicaid plan or the State CHIP plan;
and
(III) notifies the child's family--
(aa) of the information which
shall be disclosed in
accordance with this paragraph;
(bb) that the information
disclosed will be used solely
for purposes of determining
eligibility for medical
assistance under the State
Medicaid plan or for child
health assistance under the
State CHIP plan; and
(cc) that the family may
elect to not have the
information disclosed for such
purposes; and
(IV) enters into, or is subject to,
an interagency agreement to limit the
disclosure and use of the information
disclosed.
(ii) Inclusion of specific public agencies
and indian tribes and tribal organizations.--
Such term includes the following:
(I) A public agency that determines
eligibility for assistance under any of
the following:
(aa) The temporary assistance
for needy families program
funded under part A of title
IV.
(bb) A State program funded
under part D of title IV.
(cc) The State Medicaid plan.
(dd) The State CHIP plan.
(ee) The Food and Nutrition
Act of 2008 (7 U.S.C. 2011 et
seq.).
(ff) The Head Start Act (42
U.S.C. 9801 et seq.).
(gg) The Richard B. Russell
National School Lunch Act (42
U.S.C. 1751 et seq.).
(hh) The Child Nutrition Act
of 1966 (42 U.S.C. 1771 et
seq.).
(ii) The Child Care and
Development Block Grant Act of
1990 (42 U.S.C. 9858 et seq.).
(jj) The Stewart B. McKinney
Homeless Assistance Act (42
U.S.C. 11301 et seq.).
(kk) The United States
Housing Act of 1937 (42 U.S.C.
1437 et seq.).
(ll) The Native American
Housing Assistance and Self-
Determination Act of 1996 (25
U.S.C. 4101 et seq.).
(II) A State-specified governmental
agency that has fiscal liability or
legal responsibility for the accuracy
of the eligibility determination
findings relied on by the State.
(III) A public agency that is subject
to an interagency agreement limiting
the disclosure and use of the
information disclosed for purposes of
determining eligibility under the State
Medicaid plan or the State CHIP plan.
(IV) The Indian Health Service, an
Indian Tribe, Tribal Organization, or
Urban Indian Organization (as defined
in section 1139(c)).
(iii) Exclusions.--Such term does not include
an agency that determines eligibility for a
program established under the Social Services
Block Grant established under title XX or a
private, for-profit organization.
(iv) Rules of construction.--Nothing in this
paragraph shall be construed as--
(I) exempting a State Medicaid agency
from complying with the requirements of
section 1902(a)(4) relating to merit-
based personnel standards for employees
of the State Medicaid agency and
safeguards against conflicts of
interest); or
(II) authorizing a State Medicaid
agency that elects to use Express Lane
agencies under this subparagraph to use
the Express Lane option to avoid
complying with such requirements for
purposes of making eligibility
determinations under the State Medicaid
plan.
(v) Additional definitions.--In this
paragraph:
(I) State.--The term ``State'' means
1 of the 50 States or the District of
Columbia.
(II) State chip agency.--The term
``State CHIP agency'' means the State
agency responsible for administering
the State CHIP plan.
(III) State chip plan.--The term
``State CHIP plan'' means the State
child health plan established under
title XXI and includes any waiver of
such plan.
(IV) State medicaid agency.--The term
``State Medicaid agency'' means the
State agency responsible for
administering the State Medicaid plan.
(V) State medicaid plan.--The term
``State Medicaid plan'' means the State
plan established under title XIX and
includes any waiver of such plan.
(G) Child defined.--For purposes of this paragraph,
the term ``child'' means an individual under 19 years
of age, or, at the option of a State, such higher age,
not to exceed 21 years of age, as the State may elect.
(H) State option to rely on state income tax data or
return.--At the option of the State, a finding from an
Express Lane agency may include gross income or
adjusted gross income shown by State income tax records
or returns.
(I) Application.--This paragraph shall not apply with
respect to eligibility determinations made after
September 30, 2017.
(14) Income determined using modified adjusted gross
income.--
(A) In general.--Notwithstanding subsection
(r) or any other provision of this title,
except as provided in subparagraph (D), for
purposes of determining income eligibility for
medical assistance under the State plan or
under any waiver of such plan and for any other
purpose applicable under the plan or waiver for
which a determination of income is required,
including with respect to the imposition of
premiums and cost-sharing, a State shall use
the modified adjusted gross income of an
individual and, in the case of an individual in
a family greater than 1, the household income
of such family. A State shall establish income
eligibility thresholds for populations to be
eligible for medical assistance under the State
plan or a waiver of the plan using modified
adjusted gross income and household income that
are not less than the effective income
eligibility levels that applied under the State
plan or waiver on the date of enactment of the
Patient Protection and Affordable Care Act. For
purposes of complying with the maintenance of
effort requirements under subsection (gg)
during the transition to modified adjusted
gross income and household income, a State
shall, working with the Secretary, establish an
equivalent income test that ensures individuals
eligible for medical assistance under the State
plan or under a waiver of the plan on the date
of enactment of the Patient Protection and
Affordable Care Act, do not lose coverage under
the State plan or under a waiver of the plan.
The Secretary may waive such provisions of this
title and title XXI as are necessary to ensure
that States establish income and eligibility
determination systems that protect
beneficiaries.
(B) No income or expense disregards.--Subject
to subparagraph (I), no type of expense, block,
or other income disregard shall be applied by a
State to determine income eligibility for
medical assistance under the State plan or
under any waiver of such plan or for any other
purpose applicable under the plan or waiver for
which a determination of income is required.
(C) No assets test.--A State shall not apply
any assets or resources test for purposes of
determining eligibility for medical assistance
under the State plan or under a waiver of the
plan.
(D) Exceptions.--
(i) Individuals eligible because of
other aid or assistance, elderly
individuals, medically needy
individuals, and individuals eligible
for medicare cost-sharing.--
Subparagraphs (A), (B), and (C) shall
not apply to the determination of
eligibility under the State plan or
under a waiver for medical assistance
for the following:
(I) Individuals who are
eligible for medical assistance
under the State plan or under a
waiver of the plan on a basis
that does not require a
determination of income by the
State agency administering the
State plan or waiver, including
as a result of eligibility for,
or receipt of, other Federal or
State aid or assistance,
individuals who are eligible on
the basis of receiving (or
being treated as if receiving)
supplemental security income
benefits under title XVI, and
individuals who are eligible as
a result of being or being
deemed to be a child in foster
care under the responsibility
of the State.
(II) Individuals who have
attained age 65.
(III) Individuals who qualify
for medical assistance under
the State plan or under any
waiver of such plan on the
basis of being blind or
disabled (or being treated as
being blind or disabled)
without regard to whether the
individual is eligible for
supplemental security income
benefits under title XVI on the
basis of being blind or
disabled and including an
individual who is eligible for
medical assistance on the basis
of section 1902(e)(3).
(IV) Individuals described in
subsection (a)(10)(C).
(V) Individuals described in
any clause of subsection
(a)(10)(E).
(ii) Express lane agency findings.--
In the case of a State that elects the
Express Lane option under paragraph
(13), notwithstanding subparagraphs
(A), (B), and (C), the State may rely
on a finding made by an Express Lane
agency in accordance with that
paragraph relating to the income of an
individual for purposes of determining
the individual's eligibility for
medical assistance under the State plan
or under a waiver of the plan.
(iii) Medicare prescription drug
subsidies determinations.--
Subparagraphs (A), (B), and (C) shall
not apply to any determinations of
eligibility for premium and cost-
sharing subsidies under and in
accordance with section 1860D-14 made
by the State pursuant to section
1935(a)(2).
(iv) Long-term care.--Subparagraphs
(A), (B), and (C) shall not apply to
any determinations of eligibility of
individuals for purposes of medical
assistance for nursing facility
services, a level of care in any
institution equivalent to that of
nursing facility services, home or
community-based services furnished
under a waiver or State plan amendment
under section 1915 or a waiver under
section 1115, and services described in
section 1917(c)(1)(C)(ii).
(v) Grandfather of current enrollees
until date of next regular
redetermination.--An individual who, on
January 1, 2014, is enrolled in the
State plan or under a waiver of the
plan and who would be determined
ineligible for medical assistance
solely because of the application of
the modified adjusted gross income or
household income standard described in
subparagraph (A), shall remain eligible
for medical assistance under the State
plan or waiver (and subject to the same
premiums and cost-sharing as applied to
the individual on that date) through
March 31, 2014, or the date on which
the individual's next regularly
scheduled redetermination of
eligibility is to occur, whichever is
later.
(E) Transition planning and oversight.--Each
State shall submit to the Secretary for the
Secretary's approval the income eligibility
thresholds proposed to be established using
modified adjusted gross income and household
income, the methodologies and procedures to be
used to determine income eligibility using
modified adjusted gross income and household
income and, if applicable, a State plan
amendment establishing an optional eligibility
category under subsection (a)(10)(A)(ii)(XX).
To the extent practicable, the State shall use
the same methodologies and procedures for
purposes of making such determinations as the
State used on the date of enactment of the
Patient Protection and Affordable Care Act. The
Secretary shall ensure that the income
eligibility thresholds proposed to be
established using modified adjusted gross
income and household income, including under
the eligibility category established under
subsection (a)(10)(A)(ii)(XX), and the
methodologies and procedures proposed to be
used to determine income eligibility, will not
result in children who would have been eligible
for medical assistance under the State plan or
under a waiver of the plan on the date of
enactment of the Patient Protection and
Affordable Care Act no longer being eligible
for such assistance.
(F) Limitation on secretarial authority.--The
Secretary shall not waive compliance with the
requirements of this paragraph except to the
extent necessary to permit a State to
coordinate eligibility requirements for dual
eligible individuals (as defined in section
1915(h)(2)(B)) under the State plan or under a
waiver of the plan and under title XVIII and
individuals who require the level of care
provided in a hospital, a nursing facility, or
an intermediate care facility for the mentally
retarded.
(G) Definitions of modified adjusted gross
income and household income.--In this
paragraph, the terms ``modified adjusted gross
income'' and ``household income'' have the
meanings given such terms in section 36B(d)(2)
of the Internal Revenue Code of 1986.
(H) Continued application of medicaid rules
regarding point-in-time income and sources of
income.--The requirement under this paragraph
for States to use modified adjusted gross
income and household income to determine income
eligibility for medical assistance under the
State plan or under any waiver of such plan and
for any other purpose applicable under the plan
or waiver for which a determination of income
is required shall not be construed as affecting
or limiting the application of--
(i) the requirement under this title
and under the State plan or a waiver of
the plan to determine an individual's
income as of the point in time at which
an application for medical assistance
under the State plan or a waiver of the
plan is processed; or
(ii) any rules established under this
title or under the State plan or a
waiver of the plan regarding sources of
countable income.
(I) Treatment of portion of modified adjusted
gross income.--For purposes of determining the
income eligibility of an individual for medical
assistance whose eligibility is determined
based on the application of modified adjusted
gross income under subparagraph (A), the State
shall--
(i) determine the dollar equivalent
of the difference between the upper
income limit on eligibility for such an
individual (expressed as a percentage
of the poverty line) and such upper
income limit increased by 5 percentage
points; and
(ii) notwithstanding the requirement
in subparagraph (A) with respect to use
of modified adjusted gross income,
utilize as the applicable income of
such individual, in determining such
income eligibility, an amount equal to
the modified adjusted gross income
applicable to such individual reduced
by such dollar equivalent amount.
(14) Exclusion of compensation for participation in a
clinical trial for testing of treatments for a rare
disease or condition.--The first $2,000 received by an
individual (who has attained 19 years of age) as
compensation for participation in a clinical trial
meeting the requirements of section 1612(b)(26) shall
be disregarded for purposes of determining the income
eligibility of such individual for medical assistance
under the State plan or any waiver of such plan.
(f) Notwithstanding any other provision of this title, except
as provided in subsection (e) and section 1619(b)(3) and
section 1924, except with respect to qualified disabled and
working individuals (described in section 1905(s)), and except
with respect to qualified medicare beneficiaries, qualified
severely impaired individuals, and individuals described in
subsection (m)(1), no State not eligible to participate in the
State plan program established under title XVI shall be
required to provide medical assistance to any aged, blind, or
disabled individual (within the meaning of title XVI) for any
month unless such State would be (or would have been) required
to provide medical assistance to such individual for such month
had its plan for medical assistance approved under this title
and in effect on January 1, 1972, been in effect in such month,
except that for this purpose any such individual shall be
deemed eligible for medical assistance under such State plan if
(in addition to meeting such other requirements as are or may
be imposed under the State plan) the income of any such
individual as determined in accordance with section 1903(f)
(after deducting any supplemental security income payment and
State supplementary payment made with respect to such
individual, and incurred expenses for medical care as
recognized under State law regardless of whether such expenses
are reimbursed under another public program of the State or
political subdivision thereof) is not in excess of the standard
for medical assistance established under the State plan as in
effect on January 1, 1972. In States which provide medical
assistance to individuals pursuant to paragraph (10)(C) of
subsection (a) of this section, an individual who is eligible
for medical assistance by reason of the requirements of this
section concerning the deduction of incurred medical expenses
from income shall be considered an individual eligible for
medical assistance under paragraph (10)(A) of that subsection
if that individual is, or is eligible to be (1) an individual
with respect to whom there is payable a State supplementary
payment on the basis of which similarly situated individuals
are eligible to receive medical assistance equal in amount,
duration, and scope to that provided to individuals eligible
under paragraph (10)(A), or (2) an eligible individual or
eligible spouse, as defined in title XVI, with respect to whom
supplemental security income benefits are payable; otherwise
that individual shall be considered to be an individual
eligible for medical assistance under paragraph (10)(C) of that
subsection. In States which do not provide medical assistance
to individuals pursuant to paragraph (10)(C) of that
subsection, an individual who is eligible for medical
assistance by reason of the requirements of this section
concerning the deduction of incurred medical expenses from
income shall be considered an individual eligible for medical
assistance under paragraph (10)(A) of that subsection.
(g) In addition to any other sanction available to a State, a
State may provide for a reduction of any payment amount
otherwise due with respect to a person who furnishes services
under the plan in an amount equal to up to three times the
amount of any payment sought to be collected by that person in
violation of subsection (a)(25)(C).
(h) Nothing in this title (including subsections (a)(13) and
(a)(30) of this section) shall be construed as authorizing the
Secretary to limit the amount of payment that may be made under
a plan under this title for home and community care.
(i)(1) In addition to any other authority under State law,
where a State determines that a intermediate care facility for
the mentally retarded which is certified for participation
under its plan no longer substantially meets the requirements
for such a facility under this title and further determines
that the facility's deficiencies--
(A) immediately jeopardize the health and safety of
its patients, the State shall provide for the
termination of the facility's certification for
participation under the plan and may provide, or
(B) do not immediately jeopardize the health and
safety of its patients, the State may, in lieu of
providing for terminating the facility's certification
for participation under the plan, establish alternative
remedies if the State demonstrates to the Secretary's
satisfaction that the alternative remedies are
effective in deterring noncompliance and correcting
deficiencies, and may provide
that no payment will be made under the State plan with respect
to any individual admitted to such facility after a date
specified by the State.
(2) The State shall not make such a decision with respect to
a facility until the facility has had a reasonable opportunity,
following the initial determination that it no longer
substantially meets the requirements for such a facility under
this title, to correct its deficiencies, and, following this
period, has been given reasonable notice and opportunity for a
hearing.
(3) The State's decision to deny payment may be made
effective only after such notice to the public and to the
facility as may be provided for by the State, and its
effectiveness shall terminate (A) when the State finds that the
facility is in substantial compliance (or is making good faith
efforts to achieve substantial compliance) with the
requirements for such a facility under this title, or (B) in
the case described in paragraph (1)(B), with the end of the
eleventh month following the month such decision is made
effective, whichever occurs first. If a facility to which
clause (B) of the previous sentence applies still fails to
substantially meet the provisions of the respective section on
the date specified in such clause, the State shall terminate
such facility's certification for participation under the plan
effective with the first day of the first month following the
month specified in such clause.
(j) Notwithstanding any other requirement of this title, the
Secretary may waive or modify any requirement of this title
with respect to the medical assistance program in American
Samoa and the Northern Mariana Islands, other than a waiver of
the Federal medical assistance percentage, the limitation in
section 1108(f), or the requirement that payment may be made
for medical assistance only with respect to amounts expended by
American Samoa or the Northern Mariana Islands for care and
services described in a numbered paragraph of section 1905(a).
(k)(1) The medical assistance provided to an individual
described in subclause (VIII) of subsection (a)(10)(A)(i) shall
consist of benchmark coverage described in section 1937(b)(1)
or benchmark equivalent coverage described in section
1937(b)(2). Such medical assistance shall be provided subject
to the requirements of section 1937, without regard to whether
a State otherwise has elected the option to provide medical
assistance through coverage under that section, unless an
individual described in subclause (VIII) of subsection
(a)(10)(A)(i) is also an individual for whom, under
subparagraph (B) of section 1937(a)(2), the State may not
require enrollment in benchmark coverage described in
subsection (b)(1) of section 1937 or benchmark equivalent
coverage described in subsection (b)(2) of that section.
(2) Beginning with the first day of any fiscal year quarter
that begins on or after April 1, 2010, and before January 1,
2014, a State may elect through a State plan amendment to
provide medical assistance to individuals who would be
described in subclause (VIII) of subsection (a)(10)(A)(i) if
that subclause were effective before January 1, 2014. A State
may elect to phase-in the extension of eligibility for medical
assistance to such individuals based on income, so long as the
State does not extend such eligibility to individuals described
in such subclause with higher income before making individuals
described in such subclause with lower income eligible for
medical assistance.
(3) If an individual described in subclause (VIII) of
subsection (a)(10)(A)(i) is the parent of a child who is under
19 years of age (or such higher age as the State may have
elected) who is eligible for medical assistance under the State
plan or under a waiver of such plan (under that subclause or
under a State plan amendment under paragraph (2), the
individual may not be enrolled under the State plan unless the
individual's child is enrolled under the State plan or under a
waiver of the plan or is enrolled in other health insurance
coverage. For purposes of the preceding sentence, the term
``parent'' includes an individual treated as a caretaker
relative for purposes of carrying out section 1931.
(l)(1) Individuals described in this paragraph are--
(A) women during pregnancy (and during the 60-day
period beginning on the last day of the pregnancy),
(B) infants under one year of age,
(C) children who have attained one year of age but
have not attained 6 years of age, and
(D) children born after September 30, 1983 (or, at
the option of a State, after any earlier date), who
have attained 6 years of age but have not attained 19
years of age,
who are not described in any of subclauses (I) through (III) of
subsection (a)(10)(A)(i) and whose family income does not
exceed the income level established by the State under
paragraph (2) for a family size equal to the size of the
family, including the woman, infant, or child.
(2)(A)(i) For purposes of paragraph (1) with respect to
individuals described in subparagraph (A) or (B) of that
paragraph, the State shall establish an income level which is a
percentage (not less than the percentage provided under clause
(ii) and not more than 185 percent) of the income official
poverty line (as defined by the Office of Management and
Budget, and revised annually in accordance with section 673(2)
of the Omnibus Budget Reconciliation Act of 1981) applicable to
a family of the size involved.
(ii) The percentage provided under this clause, with respect
to eligibility for medical assistance on or after--
(I) July 1, 1989, is 75 percent, or, if greater, the
percentage provided under clause (iii), and
(II) April 1, 1990, 133 percent, or, if greater, the
percentage provided under clause (iv).
(iii) In the case of a State which, as of the date of the
enactment of this clause, has elected to provide, and provides,
medical assistance to individuals described in this subsection
or has enacted legislation authorizing, or appropriating funds,
to provide such assistance to such individuals before July 1,
1989, the percentage provided under clause (ii)(I) shall not be
less than--
(I) the percentage specified by the State in an
amendment to its State plan (whether approved or not)
as of the date of the enactment of this clause, or
(II) if no such percentage is specified as of the
date of the enactment of this clause, the percentage
established under the State's authorizing legislation
or provided for under the State's appropriations;
but in no case shall this clause require the percentage
provided under clause (ii)(I) to exceed 100 percent.
(iv) In the case of a State which, as of the date of the
enactment of this clause, has established under clause (i), or
has enacted legislation authorizing, or appropriating funds, to
provide for, a percentage (of the income official poverty line)
that is greater than 133 percent, the percentage provided under
clause (ii) for medical assistance on or after April 1, 1990,
shall not be less than--
(I) the percentage specified by the State in an
amendment to its State plan (whether approved or not)
as of the date of the enactment of this clause, or
(II) if no such percentage is specified as of the
date of the enactment of this clause, the percentage
established under the State's authorizing legislation
or provided for under the State's appropriations.
(B) For purposes of paragraph (1) with respect to individuals
described in subparagraph (C) of such paragraph, the State
shall establish an income level which is equal to 133 percent
of the income official poverty line described in subparagraph
(A) applicable to a family of the size involved.
(C) For purposes of paragraph (1) with respect to individuals
described in subparagraph (D) of that paragraph, the State
shall establish an income level which is equal to 100 percent
(or, beginning January 1, 2014, 133 percent) of the income
official poverty line described in subparagraph (A) applicable
to a family of the size involved.
(3) Notwithstanding subsection (a)(17), for individuals who
are eligible for medical assistance because of subsection
(a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or
(a)(10)(A)(ii)(IX)--
(A) application of a resource standard shall be at
the option of the State;
(B) any resource standard or methodology that is
applied with respect to an individual described in
subparagraph (A) of paragraph (1) may not be more
restrictive than the resource standard or methodology
that is applied under title XVI;
(C) any resource standard or methodology that is
applied with respect to an individual described in
subparagraph (B), (C), or (D) of paragraph (1) may not
be more restrictive than the corresponding methodology
that is applied under the State plan under part A of
title IV;
(D) the income standard to be applied is the
appropriate income standard established under paragraph
(2); and
(E) family income shall be determined in accordance
with the methodology employed under the State plan
under part A or E of title IV (except to the extent
such methodology is inconsistent with clause (D) of
subsection (a)(17)), and costs incurred for medical
care or for any other type of remedial care shall not
be taken into account.
Any different treatment provided under this paragraph for such
individuals shall not, because of subsection (a)(17), require
or permit such treatment for other individuals.
(4)(A) In the case of any State which is providing medical
assistance to its residents under a waiver granted under
section 1115, the Secretary shall require the State to provide
medical assistance for pregnant women and infants under age 1
described in subsection (a)(10)(A)(i)(IV) and for children
described in subsection (a)(10)(A)(i)(VI) or subsection
(a)(10)(A)(i)(VII) in the same manner as the State would be
required to provide such assistance for such individuals if the
State had in effect a plan approved under this title.
(B) In the case of a State which is not one of the 50 States
or the District of Columbia, the State need not meet the
requirement of subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI),
or (a)(10)(A)(i)(VII) and, for purposes of paragraph (2)(A),
the State may substitute for the percentage provided under
clause (ii) of such paragraph any percentage.
(m)(1) Individuals described in this paragraph are
individuals--
(A) who are 65 years of age or older or are disabled
individuals (as determined under section 1614(a)(3)),
(B) whose income (as determined under section 1612
for purposes of the supplemental security income
program, except as provided in paragraph (2)(C)) does
not exceed an income level established by the State
consistent with paragraph (2)(A), and
(C) whose resources (as determined under section 1613
for purposes of the supplemental security income
program) do not exceed (except as provided in paragraph
(2)(B)) the maximum amount of resources that an
individual may have and obtain benefits under that
program.
(2)(A) The income level established under paragraph (1)(B)
may not exceed a percentage (not more than 100 percent) of the
official poverty line (as defined by the Office of Management
and Budget, and revised annually in accordance with section
673(2) of the Omnibus Budget Reconciliation Act of 1981)
applicable to a family of the size involved.
(B) In the case of a State that provides medical assistance
to individuals not described in subsection (a)(10)(A) and at
the State's option, the State may use under paragraph (1)(C)
such resource level (which is higher than the level described
in that paragraph) as may be applicable with respect to
individuals described in paragraph (1)(A) who are not described
in subsection (a)(10)(A).
(C) The provisions of section 1905(p)(2)(D) shall apply to
determinations of income under this subsection in the same
manner as they apply to determinations of income under section
1905(p).
(3) Notwithstanding subsection (a)(17), for individuals
described in paragraph (1) who are covered under the State plan
by virtue of subsection (a)(10)(A)(ii)(X)--
(A) the income standard to be applied is the income
standard described in paragraph (1)(B), and
(B) except as provided in section 1612(b)(4)(B)(ii),
costs incurred for medical care or for any other type
of remedial care shall not be taken into account in
determining income.
Any different treatment provided under this paragraph for such
individuals shall not, because of subsection (a)(17), require
or permit such treatment for other individuals.
(4) Notwithstanding subsection (a)(17), for qualified
medicare beneficiaries described in section 1905(p)(1)--
(A) the income standard to be applied is the income
standard described in section 1905(p)(1)(B), and
(B) except as provided in section 1612(b)(4)(B)(ii),
costs incurred for medical care or for any other type
of remedial care shall not be taken into account in
determining income.
Any different treatment provided under this paragraph for such
individuals shall not, because of subsection (a)(17), require
or permit such treatment for other individuals.
(n)(1) In the case of medical assistance furnished under this
title for medicare cost-sharing respecting the furnishing of a
service or item to a qualified medicare beneficiary, the State
plan may provide payment in an amount with respect to the
service or item that results in the sum of such payment amount
and any amount of payment made under title XVIII with respect
to the service or item exceeding the amount that is otherwise
payable under the State plan for the item or service for
eligible individuals who are not qualified medicare
beneficiaries.
(2) In carrying out paragraph (1), a State is not required to
provide any payment for any expenses incurred relating to
payment for deductibles, coinsurance, or copayments for
medicare cost-sharing to the extent that payment under title
XVIII for the service would exceed the payment amount that
otherwise would be made under the State plan under this title
for such service if provided to an eligible recipient other
than a medicare beneficiary.
(3) In the case in which a State's payment for medicare cost-
sharing for a qualified medicare beneficiary with respect to an
item or service is reduced or eliminated through the
application of paragraph (2)--
(A) for purposes of applying any limitation under
title XVIII on the amount that the beneficiary may be
billed or charged for the service, the amount of
payment made under title XVIII plus the amount of
payment (if any) under the State plan shall be
considered to be payment in full for the service;
(B) the beneficiary shall not have any legal
liability to make payment to a provider or to an
organization described in section 1903(m)(1)(A) for the
service; and
(C) any lawful sanction that may be imposed upon a
provider or such an organization for excess charges
under this title or title XVIII shall apply to the
imposition of any charge imposed upon the individual in
such case.
This paragraph shall not be construed as preventing payment of
any medicare cost-sharing by a medicare supplemental policy or
an employer retiree health plan on behalf of an individual.
(o) Notwithstanding any provision of subsection (a) to the
contrary, a State plan under this title shall provide that any
supplemental security income benefits paid by reason of
subparagraph (E) or (G) of section 1611(e)(1) to an individual
who--
(1) is eligible for medical assistance under the
plan, and
(2) is in a hospital, skilled nursing facility, or
intermediate care facility at the time such benefits
are paid,
will be disregarded for purposes of determining the amount of
any post-eligibility contribution by the individual to the cost
of the care and services provided by the hospital, skilled
nursing facility, or intermediate care facility.
(p)(1) In addition to any other authority, a State may
exclude any individual or entity for purposes of participating
under the State plan under this title for any reason for which
the Secretary could exclude the individual or entity from
participation in a program under title XVIII under section
1128, 1128A, or 1866(b)(2).
(2) In order for a State to receive payments for medical
assistance under section 1903(a), with respect to payments the
State makes to a medicaid managed care organization (as defined
in section 1903(m)) or to an entity furnishing services under a
waiver approved under section 1915(b)(1), the State must
provide that it will exclude from participation, as such an
organization or entity, any organization or entity that--
(A) could be excluded under section 1128(b)(8)
(relating to owners and managing employees who have
been convicted of certain crimes or received other
sanctions),
(B) has, directly or indirectly, a substantial
contractual relationship (as defined by the Secretary)
with an individual or entity that is described in
section 1128(b)(8)(B), or
(C) employs or contracts with any individual or
entity that is excluded from participation under this
title under section 1128 or 1128A for the provision of
health care, utilization review, medical social work,
or administrative services or employs or contracts with
any entity for the provision (directly or indirectly)
through such an excluded individual or entity of such
services.
(3) As used in this subsection, the term ``exclude'' includes
the refusal to enter into or renew a participation agreement or
the termination of such an agreement.
(q)(1)(A) In order to meet the requirement of subsection
(a)(50), the State plan must provide that, in the case of an
institutionalized individual or couple described in
subparagraph (B), in determining the amount of the individual's
or couple's income to be applied monthly to payment for the
cost of care in an institution, there shall be deducted from
the monthly income (in addition to other allowances otherwise
provided under the State plan) a monthly personal needs
allowance--
(i) which is reasonable in amount for clothing and
other personal needs of the individual (or couple)
while in an institution, and
(ii) which is not less (and may be greater) than the
minimum monthly personal needs allowance described in
paragraph (2).
(B) In this subsection, the term ``institutionalized
individual or couple'' means an individual or married couple--
(i) who is an inpatient (or who are inpatients) in a
medical institution or nursing facility for which
payments are made under this title throughout a month,
and
(ii) who is or are determined to be eligible for
medical assistance under the State plan.
(2) The minimum monthly personal needs allowance described in
this paragraph is $30 for an institutionalized individual and
$60 for an institutionalized couple (if both are aged, blind,
or disabled, and their incomes are considered available to each
other in determining eligibility).
(r)(1)(A) For purposes of sections 1902(a)(17) and
1924(d)(1)(D) and for purposes of a waiver under section 1915,
with respect to the post-eligibility treatment of income of
individuals who are institutionalized or receiving home or
community-based services under such a waiver, the treatment
described in subparagraph (B) shall apply, there shall be
disregarded reparation payments made by the Federal Republic of
Germany, and there shall be taken into account amounts for
incurred expenses for medical or remedial care that are not
subject to payment by a third party, including--
(i) medicare and other health insurance premiums,
deductibles, or coinsurance, and
(ii) necessary medical or remedial care recognized
under State law but not covered under the State plan
under this title, subject to reasonable limits the
State may establish on the amount of these expenses.
(B)(i) In the case of a veteran who does not have a spouse or
a child, if the veteran--
(I) receives, after the veteran has been determined
to be eligible for medical assistance under the State
plan under this title, a veteran's pension in excess of
$90 per month, and
(II) resides in a State veterans home with respect to
which the Secretary of Veterans Affairs makes per diem
payments for nursing home care pursuant to section
1741(a) of title 38, United States Code,
any such pension payment, including any payment made due to the
need for aid and attendance, or for unreimbursed medical
expenses, that is in excess of $90 per month shall be counted
as income only for the purpose of applying such excess payment
to the State veterans home's cost of providing nursing home
care to the veteran.
(ii) The provisions of clause (i) shall apply with respect to
a surviving spouse of a veteran who does not have a child in
the same manner as they apply to a veteran described in such
clause.
(2)(A) The methodology to be employed in determining income
and resource eligibility for individuals under subsection
(a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI),
(a)(10)(A)(i)(VII), (a)(10)(A)(ii), (a)(10)(C)(i)(III), or (f)
or under section 1905(p) may be less restrictive, and shall be
no more restrictive, than the methodology--
(i) in the case of groups consisting of aged, blind,
or disabled individuals, under the supplemental
security income program under title XVI, or
(ii) in the case of other groups, under the State
plan most closely categorically related.
(B) For purposes of this subsection and subsection (a)(10),
methodology is considered to be ``no more restrictive'' if,
using the methodology, additional individuals may be eligible
for medical assistance and no individuals who are otherwise
eligible are made ineligible for such assistance.
(s) In order to meet the requirements of subsection (a)(55),
the State plan must provide that payments to hospitals under
the plan for inpatient hospital services furnished to infants
who have not attained the age of 1 year, and to children who
have not attained the age of 6 years and who receive such
services in a disproportionate share hospital described in
section 1923(b)(1), shall--
(1) if made on a prospective basis (whether per diem,
per case, or otherwise) provide for an outlier
adjustment in payment amounts for medically necessary
inpatient hospital services involving exceptionally
high costs or exceptionally long lengths of stay,
(2) not be limited by the imposition of day limits
with respect to the delivery of such services to such
individuals, and
(3) not be limited by the imposition of dollar limits
(other than such limits resulting from prospective
payments as adjusted pursuant to paragraph (1)) with
respect to the delivery of such services to any such
individual who has not attained their first birthday
(or in the case of such an individual who is an
inpatient on his first birthday until such individual
is discharged).
(t) Nothing in this title (including sections 1903(a) and
1905(a)) shall be construed as authorizing the Secretary to
deny or limit payments to a State for expenditures, for medical
assistance for items or services, attributable to taxes of
general applicability imposed with respect to the provision of
such items or services.
(u)(1) Individuals described in this paragraph are
individuals--
(A) who are entitled to elect COBRA continuation
coverage (as defined in paragraph (3)),
(B) whose income (as determined under section 1612
for purposes of the supplemental security income
program) does not exceed 100 percent of the official
poverty line (as defined by the Office of Management
and Budget, and revised annually in accordance with
section 673(2) of the Omnibus Budget Reconciliation Act
of 1981) applicable to a family of the size involved,
(C) whose resources (as determined under section 1613
for purposes of the supplemental security income
program) do not exceed twice the maximum amount of
resources that an individual may have and obtain
benefits under that program, and
(D) with respect to whose enrollment for COBRA
continuation coverage the State has determined that the
savings in expenditures under this title resulting from
such enrollment is likely to exceed the amount of
payments for COBRA premiums made.
(2) For purposes of subsection (a)(10)(F) and this
subsection, the term ``COBRA premiums'' means the applicable
premium imposed with respect to COBRA continuation coverage.
(3) In this subsection, the term ``COBRA continuation
coverage'' means coverage under a group health plan provided by
an employer with 75 or more employees provided pursuant to
title XXII of the Public Health Service Act, section 4980B of
the Internal Revenue Code of 1986, or title VI of the Employee
Retirement Income Security Act of 1974.
(4) Notwithstanding subsection (a)(17), for individuals
described in paragraph (1) who are covered under the State plan
by virtue of subsection (a)(10)(A)(ii)(XI)--
(A) the income standard to be applied is the income
standard described in paragraph (1)(B), and
(B) except as provided in section 1612(b)(4)(B)(ii),
costs incurred for medical care or for any other type
of remedial care shall not be taken into account in
determining income.
Any different treatment provided under this paragraph for such
individuals shall not, because of subsection (a)(10)(B) or
(a)(17), require or permit such treatment for other
individuals.
(v) A State plan may provide for the making of determinations
of disability or blindness for the purpose of determining
eligibility for medical assistance under the State plan by the
single State agency or its designee, and make medical
assistance available to individuals whom it finds to be blind
or disabled and who are determined otherwise eligible for such
assistance during the period of time prior to which a final
determination of disability or blindness is made by the Social
Security Administration with respect to such an individual. In
making such determinations, the State must apply the
definitions of disability and blindness found in section
1614(a) of the Social Security Act.
(w)(1) For purposes of subsection (a)(57) and sections
1903(m)(1)(A) and 1919(c)(2)(E), the requirement of this
subsection is that a provider or organization (as the case may
be) maintain written policies and procedures with respect to
all adult individuals receiving medical care by or through the
provider or organization--
(A) to provide written information to each such
individual concerning--
(i) an individual's rights under State law
(whether statutory or as recognized by the
courts of the State) to make decisions
concerning such medical care, including the
right to accept or refuse medical or surgical
treatment and the right to formulate advance
directives (as defined in paragraph (3)), and
(ii) the provider's or organization's written
policies respecting the implementation of such
rights;
(B) to document in the individual's medical record
whether or not the individual has executed an advance
directive;
(C) not to condition the provision of care or
otherwise discriminate against an individual based on
whether or not the individual has executed an advance
directive;
(D) to ensure compliance with requirements of State
law (whether statutory or as recognized by the courts
of the State) respecting advance directives; and
(E) to provide (individually or with others) for
education for staff and the community on issues
concerning advance directives.
Subparagraph (C) shall not be construed as requiring the
provision of care which conflicts with an advance directive.
(2) The written information described in paragraph (1)(A)
shall be provided to an adult individual--
(A) in the case of a hospital, at the time of the
individual's admission as an inpatient,
(B) in the case of a nursing facility, at the time of
the individual's admission as a resident,
(C) in the case of a provider of home health care or
personal care services, in advance of the individual
coming under the care of the provider,
(D) in the case of a hospice program, at the time of
initial receipt of hospice care by the individual from
the program, and
(E) in the case of a medicaid managed care
organization, at the time of enrollment of the
individual with the organization.
(3) Nothing in this section shall be construed to prohibit
the application of a State law which allows for an objection on
the basis of conscience for any health care provider or any
agent of such provider which as a matter of conscience cannot
implement an advance directive.
(4) In this subsection, the term ``advance directive'' means
a written instruction, such as a living will or durable power
of attorney for health care, recognized under State law
(whether statutory or as recognized by the courts of the State)
and relating to the provision of such care when the individual
is incapacitated.
(5) For construction relating to this subsection, see section
7 of the Assisted Suicide Funding Restriction Act of 1997
(relating to clarification respecting assisted suicide,
euthanasia, and mercy killing).
(x) The Secretary shall establish a system, for
implementation by not later than July 1, 1991, which provides
for a unique identifier for each physician who furnishes
services for which payment may be made under a State plan
approved under this title.
(y)(1) In addition to any other authority under State law,
where a State determines that a psychiatric hospital which is
certified for participation under its plan no longer meets the
requirements for a psychiatric hospital (referred to in section
1905(h)) and further finds that the hospital's deficiencies--
(A) immediately jeopardize the health and safety of
its patients, the State shall terminate the hospital's
participation under the State plan; or
(B) do not immediately jeopardize the health and
safety of its patients, the State may terminate the
hospital's participation under the State plan, or
provide that no payment will be made under the State
plan with respect to any individual admitted to such
hospital after the effective date of the finding, or
both.
(2) Except as provided in paragraph (3), if a psychiatric
hospital described in paragraph (1)(B) has not complied with
the requirements for a psychiatric hospital under this title--
(A) within 3 months after the date the hospital is
found to be out of compliance with such requirements,
the State shall provide that no payment will be made
under the State plan with respect to any individual
admitted to such hospital after the end of such 3-month
period, or
(B) within 6 months after the date the hospital is
found to be out of compliance with such requirements,
no Federal financial participation shall be provided
under section 1903(a) with respect to further services
provided in the hospital until the State finds that the
hospital is in compliance with the requirements of this
title.
(3) The Secretary may continue payments, over a period of not
longer than 6 months from the date the hospital is found to be
out of compliance with such requirements, if--
(A) the State finds that it is more appropriate to
take alternative action to assure compliance of the
hospital with the requirements than to terminate the
certification of the hospital,
(B) the State has submitted a plan and timetable for
corrective action to the Secretary for approval and the
Secretary approves the plan of corrective action, and
(C) the State agrees to repay to the Federal
Government payments received under this paragraph if
the corrective action is not taken in accordance with
the approved plan and timetable.
(z)(1) Individuals described in this paragraph are
individuals not described in subsection (a)(10)(A)(i)--
(A) who are infected with tuberculosis;
(B) whose income (as determined under the State plan
under this title with respect to disabled individuals)
does not exceed the maximum amount of income a disabled
individual described in subsection (a)(10)(A)(i) may
have and obtain medical assistance under the plan; and
(C) whose resources (as determined under the State
plan under this title with respect to disabled
individuals) do not exceed the maximum amount of
resources a disabled individual described in subsection
(a)(10)(A)(i) may have and obtain medical assistance
under the plan.
(2) For purposes of subsection (a)(10), the term ``TB-related
services'' means each of the following services relating to
treatment of infection with tuberculosis:
(A) Prescribed drugs.
(B) Physicians' services and services described in
section 1905(a)(2).
(C) Laboratory and X-ray services (including services
to confirm the presence of infection).
(D) Clinic services and Federally-qualified health
center services.
(E) Case management services (as defined in section
1915(g)(2)).
(F) Services (other than room and board) designed to
encourage completion of regimens of prescribed drugs by
outpatients, including services to observe directly the
intake of prescribed drugs.
(aa) Individuals described in this subsection are individuals
who--
(1) are not described in subsection (a)(10)(A)(i);
(2) have not attained age 65;
(3) have been screened for breast and cervical cancer
under the Centers for Disease Control and Prevention
breast and cervical cancer early detection program
established under title XV of the Public Health Service
Act (42 U.S.C. 300k et seq.) in accordance with the
requirements of section 1504 of that Act (42 U.S.C.
300n) and need treatment for breast or cervical cancer;
and
(4) are not otherwise covered under creditable
coverage, as defined in section 2701(c) of the Public
Health Service Act (42 U.S.C. 300gg(c)), but applied
without regard to paragraph (1)(F) of such section.
(bb) Payment for Services Provided by Federally-Qualified
Health Centers and Rural Health Clinics.--
(1) In general.--Beginning with fiscal year 2001 with
respect to services furnished on or after January 1,
2001, and each succeeding fiscal year, the State plan
shall provide for payment for services described in
section 1905(a)(2)(C) furnished by a Federally-
qualified health center and services described in
section 1905(a)(2)(B) furnished by a rural health
clinic in accordance with the provisions of this
subsection.
(2) Fiscal year 2001.--Subject to paragraph (4), for
services furnished on and after January 1, 2001, during
fiscal year 2001, the State plan shall provide for
payment for such services in an amount (calculated on a
per visit basis) that is equal to 100 percent of the
average of the costs of the center or clinic of
furnishing such services during fiscal years 1999 and
2000 which are reasonable and related to the cost of
furnishing such services, or based on such other tests
of reasonableness as the Secretary prescribes in
regulations under section 1833(a)(3), or, in the case
of services to which such regulations do not apply, the
same methodology used under section 1833(a)(3),
adjusted to take into account any increase or decrease
in the scope of such services furnished by the center
or clinic during fiscal year 2001.
(3) Fiscal year 2002 and succeeding fiscal years.--
Subject to paragraph (4), for services furnished during
fiscal year 2002 or a succeeding fiscal year, the State
plan shall provide for payment for such services in an
amount (calculated on a per visit basis) that is equal
to the amount calculated for such services under this
subsection for the preceding fiscal year--
(A) increased by the percentage increase in
the MEI (as defined in section 1842(i)(3))
applicable to primary care services (as defined
in section 1842(i)(4)) for that fiscal year;
and
(B) adjusted to take into account any
increase or decrease in the scope of such
services furnished by the center or clinic
during that fiscal year.
(4) Establishment of initial year payment amount for
new centers or clinics.--In any case in which an entity
first qualifies as a Federally-qualified health center
or rural health clinic after fiscal year 2000, the
State plan shall provide for payment for services
described in section 1905(a)(2)(C) furnished by the
center or services described in section 1905(a)(2)(B)
furnished by the clinic in the first fiscal year in
which the center or clinic so qualifies in an amount
(calculated on a per visit basis) that is equal to 100
percent of the costs of furnishing such services during
such fiscal year based on the rates established under
this subsection for the fiscal year for other such
centers or clinics located in the same or adjacent area
with a similar case load or, in the absence of such a
center or clinic, in accordance with the regulations
and methodology referred to in paragraph (2) or based
on such other tests of reasonableness as the Secretary
may specify. For each fiscal year following the fiscal
year in which the entity first qualifies as a
Federally-qualified health center or rural health
clinic, the State plan shall provide for the payment
amount to be calculated in accordance with paragraph
(3).
(5) Administration in the case of managed care.--
(A) In general.--In the case of services
furnished by a Federally-qualified health
center or rural health clinic pursuant to a
contract between the center or clinic and a
managed care entity (as defined in section
1932(a)(1)(B)), the State plan shall provide
for payment to the center or clinic by the
State of a supplemental payment equal to the
amount (if any) by which the amount determined
under paragraphs (2), (3), and (4) of this
subsection exceeds the amount of the payments
provided under the contract.
(B) Payment schedule.--The supplemental
payment required under subparagraph (A) shall
be made pursuant to a payment schedule agreed
to by the State and the Federally-qualified
health center or rural health clinic, but in no
case less frequently than every 4 months.
(6) Alternative payment methodologies.--
Notwithstanding any other provision of this section,
the State plan may provide for payment in any fiscal
year to a Federally-qualified health center for
services described in section 1905(a)(2)(C) or to a
rural health clinic for services described in section
1905(a)(2)(B) in an amount which is determined under an
alternative payment methodology that--
(A) is agreed to by the State and the center
or clinic; and
(B) results in payment to the center or
clinic of an amount which is at least equal to
the amount otherwise required to be paid to the
center or clinic under this section.
(cc)(1) Individuals described in this paragraph are
individuals--
(A) who are children who have not attained 19 years
of age and are born--
(i) on or after January 1, 2001 (or, at the
option of a State, on or after an earlier
date), in the case of the second, third, and
fourth quarters of fiscal year 2007;
(ii) on or after October 1, 1995 (or, at the
option of a State, on or after an earlier
date), in the case of each quarter of fiscal
year 2008; and
(iii) after October 1, 1989, in the case of
each quarter of fiscal year 2009 and each
quarter of any fiscal year thereafter;
(B) who would be considered disabled under section
1614(a)(3)(C) (as determined under title XVI for
children but without regard to any income or asset
eligibility requirements that apply under such title
with respect to children); and
(C) whose family income does not exceed such income
level as the State establishes and does not exceed--
(i) 300 percent of the poverty line (as
defined in section 2110(c)(5)) applicable to a
family of the size involved; or
(ii) such higher percent of such poverty line
as a State may establish, except that--
(I) any medical assistance provided
to an individual whose family income
exceeds 300 percent of such poverty
line may only be provided with State
funds; and
(II) no Federal financial
participation shall be provided under
section 1903(a) for any medical
assistance provided to such an
individual.
(2)(A) If an employer of a parent of an individual described
in paragraph (1) offers family coverage under a group health
plan (as defined in section 2791(a) of the Public Health
Service Act), the State shall--
(i) notwithstanding section 1906, require such parent
to apply for, enroll in, and pay premiums for such
coverage as a condition of such parent's child being or
remaining eligible for medical assistance under
subsection (a)(10)(A)(ii)(XIX) if the parent is
determined eligible for such coverage and the employer
contributes at least 50 percent of the total cost of
annual premiums for such coverage; and
(ii) if such coverage is obtained--
(I) subject to paragraph (2) of section
1916(h), reduce the premium imposed by the
State under that section in an amount that
reasonably reflects the premium contribution
made by the parent for private coverage on
behalf of a child with a disability; and
(II) treat such coverage as a third party
liability under subsection (a)(25).
(B) In the case of a parent to which subparagraph (A)
applies, a State, notwithstanding section 1906 but subject to
paragraph (1)(C)(ii), may provide for payment of any portion of
the annual premium for such family coverage that the parent is
required to pay. Any payments made by the State under this
subparagraph shall be considered, for purposes of section
1903(a), to be payments for medical assistance.
(dd) Electronic Transmission of Information.--If the State
agency determining eligibility for medical assistance under
this title or child health assistance under title XXI verifies
an element of eligibility based on information from an Express
Lane Agency (as defined in subsection (e)(13)(F)), or from
another public agency, then the applicant's signature under
penalty of perjury shall not be required as to such element.
Any signature requirement for an application for medical
assistance may be satisfied through an electronic signature, as
defined in section 1710(1) of the Government Paperwork
Elimination Act (44 U.S.C. 3504 note). The requirements of
subparagraphs (A) and (B) of section 1137(d)(2) may be met
through evidence in digital or electronic form.
(ee)(1) For purposes of subsection (a)(46)(B)(ii), the
requirements of this subsection with respect to an individual
declaring to be a citizen or national of the United States for
purposes of establishing eligibility under this title, are, in
lieu of requiring the individual to present satisfactory
documentary evidence of citizenship or nationality under
section 1903(x) (if the individual is not described in
paragraph (2) of that section), as follows:
(A) The State submits the name and social security
number of the individual to the Commissioner of Social
Security as part of the program established under
paragraph (2).
(B) If the State receives notice from the
Commissioner of Social Security that the name or social
security number, or the declaration of citizenship or
nationality, of the individual is inconsistent with
information in the records maintained by the
Commissioner--
(i) the State makes a reasonable effort to
identify and address the causes of such
inconsistency, including through typographical
or other clerical errors, by contacting the
individual to confirm the accuracy of the name
or social security number submitted or
declaration of citizenship or nationality and
by taking such additional actions as the
Secretary, through regulation or other
guidance, or the State may identify, and
continues to provide the individual with
medical assistance while making such effort;
and
(ii) in the case such inconsistency is not
resolved under clause (i), the State--
(I) notifies the individual of such
fact;
(II) provides the individual with a
period of 90 days from the date on
which the notice required under
subclause (I) is received by the
individual to either present
satisfactory documentary evidence of
citizenship or nationality (as defined
in section 1903(x)(3)) or resolve the
inconsistency with the Commissioner of
Social Security (and continues to
provide the individual with medical
assistance during such 90-day period);
and
(III) disenrolls the individual from
the State plan under this title within
30 days after the end of such 90-day
period if no such documentary evidence
is presented or if such inconsistency
is not resolved.
(2)(A) Each State electing to satisfy the requirements of
this subsection for purposes of section 1902(a)(46)(B) shall
establish a program under which the State submits at least
monthly to the Commissioner of Social Security for comparison
of the name and social security number, of each individual
newly enrolled in the State plan under this title that month
who is not described in section 1903(x)(2) and who declares to
be a United States citizen or national, with information in
records maintained by the Commissioner.
(B) In establishing the State program under this paragraph,
the State may enter into an agreement with the Commissioner of
Social Security--
(i) to provide, through an on-line system or
otherwise, for the electronic submission of, and
response to, the information submitted under
subparagraph (A) for an individual enrolled in the
State plan under this title who declares to be citizen
or national on at least a monthly basis; or
(ii) to provide for a determination of the
consistency of the information submitted with the
information maintained in the records of the
Commissioner through such other method as agreed to by
the State and the Commissioner and approved by the
Secretary, provided that such method is no more
burdensome for individuals to comply with than any
burdens that may apply under a method described in
clause (i).
(C) The program established under this paragraph shall
provide that, in the case of any individual who is required to
submit a social security number to the State under subparagraph
(A) and who is unable to provide the State with such number,
shall be provided with at least the reasonable opportunity to
present satisfactory documentary evidence of citizenship or
nationality (as defined in section 1903(x)(3)) as is provided
under clauses (i) and (ii) of section 1137(d)(4)(A) to an
individual for the submittal to the State of evidence
indicating a satisfactory immigration status.
(3)(A) The State agency implementing the plan approved under
this title shall, at such times and in such form as the
Secretary may specify, provide information on the percentage
each month that the inconsistent submissions bears to the total
submissions made for comparison for such month. For purposes of
this subparagraph, a name, social security number, or
declaration of citizenship or nationality of an individual
shall be treated as inconsistent and included in the
determination of such percentage only if--
(i) the information submitted by the individual is
not consistent with information in records maintained
by the Commissioner of Social Security;
(ii) the inconsistency is not resolved by the State;
(iii) the individual was provided with a reasonable
period of time to resolve the inconsistency with the
Commissioner of Social Security or provide satisfactory
documentation of citizenship status and did not
successfully resolve such inconsistency; and
(iv) payment has been made for an item or service
furnished to the individual under this title.
(B) If, for any fiscal year, the average monthly percentage
determined under subparagraph (A) is greater than 3 percent--
(i) the State shall develop and adopt a corrective
plan to review its procedures for verifying the
identities of individuals seeking to enroll in the
State plan under this title and to identify and
implement changes in such procedures to improve their
accuracy; and
(ii) pay to the Secretary an amount equal to the
amount which bears the same ratio to the total payments
under the State plan for the fiscal year for providing
medical assistance to individuals who provided
inconsistent information as the number of individuals
with inconsistent information in excess of 3 percent of
such total submitted bears to the total number of
individuals with inconsistent information.
(C) The Secretary may waive, in certain limited cases, all or
part of the payment under subparagraph (B)(ii) if the State is
unable to reach the allowable error rate despite a good faith
effort by such State.
(D) Subparagraphs (A) and (B) shall not apply to a State for
a fiscal year if there is an agreement described in paragraph
(2)(B) in effect as of the close of the fiscal year that
provides for the submission on a real-time basis of the
information described in such paragraph.
(4) Nothing in this subsection shall affect the rights of any
individual under this title to appeal any disenrollment from a
State plan.
(ff) Notwithstanding any other requirement of this title or
any other provision of Federal or State law, a State shall
disregard the following property from resources for purposes of
determining the eligibility of an individual who is an Indian
for medical assistance under this title:
(1) Property, including real property and
improvements, that is held in trust, subject to Federal
restrictions, or otherwise under the supervision of the
Secretary of the Interior, located on a reservation,
including any federally recognized Indian Tribe's
reservation, pueblo, or colony, including former
reservations in Oklahoma, Alaska Native regions
established by the Alaska Native Claims Settlement Act,
and Indian allotments on or near a reservation as
designated and approved by the Bureau of Indian Affairs
of the Department of the Interior.
(2) For any federally recognized Tribe not described
in paragraph (1), property located within the most
recent boundaries of a prior Federal reservation.
(3) Ownership interests in rents, leases, royalties,
or usage rights related to natural resources (including
extraction of natural resources or harvesting of
timber, other plants and plant products, animals, fish,
and shellfish) resulting from the exercise of federally
protected rights.
(4) Ownership interests in or usage rights to items
not covered by paragraphs (1) through (3) that have
unique religious, spiritual, traditional, or cultural
significance or rights that support subsistence or a
traditional lifestyle according to applicable tribal
law or custom.
(gg) Maintenance of Effort.--
(1) General requirement to maintain eligibility
standards until state exchange is fully operational.--
Subject to the succeeding paragraphs of this
subsection, during the period that begins on the date
of enactment of the Patient Protection and Affordable
Care Act and ends on the date on which the Secretary
determines that an Exchange established by the State
under section 1311 of the Patient Protection and
Affordable Care Act is fully operational, as a
condition for receiving any Federal payments under
section 1903(a) for calendar quarters occurring during
such period, a State shall not have in effect
eligibility standards, methodologies, or procedures
under the State plan under this title or under any
waiver of such plan that is in effect during that
period, that are more restrictive than the eligibility
standards, methodologies, or procedures, respectively,
under the plan or waiver that are in effect on the date
of enactment of the Patient Protection and Affordable
Care Act.
(2) Continuation of eligibility standards for
children until october 1, 2019.--The requirement under
paragraph (1) shall continue to apply to a State
through September 30, 2019, with respect to the
eligibility standards, methodologies, and procedures
under the State plan under this title or under any
waiver of such plan that are applicable to determining
the eligibility for medical assistance of any child who
is under 19 years of age (or such higher age as the
State may have elected).
(3) Nonapplication.--During the period that begins on
January 1, 2011, and ends on December 31, 2013, the
requirement under paragraph (1) shall not apply to a
State with respect to nonpregnant, nondisabled adults
who are eligible for medical assistance under the State
plan or under a waiver of the plan at the option of the
State and whose income exceeds 133 percent of the
poverty line (as defined in section 2110(c)(5))
applicable to a family of the size involved if, on or
after December 31, 2010, the State certifies to the
Secretary that, with respect to the State fiscal year
during which the certification is made, the State has a
budget deficit, or with respect to the succeeding State
fiscal year, the State is projected to have a budget
deficit. Upon submission of such a certification to the
Secretary, the requirement under paragraph (1) shall
not apply to the State with respect to any remaining
portion of the period described in the preceding
sentence.
(4) Determination of compliance.--
(A) States shall apply modified adjusted
gross income.--A State's determination of
income in accordance with subsection (e)(14)
shall not be considered to be eligibility
standards, methodologies, or procedures that
are more restrictive than the standards,
methodologies, or procedures in effect under
the State plan or under a waiver of the plan on
the date of enactment of the Patient Protection
and Affordable Care Act for purposes of
determining compliance with the requirements of
paragraph (1), (2), or (3).
(B) States may expand eligibility or move
waivered populations into coverage under the
state plan.--With respect to any period
applicable under paragraph (1), (2), or (3), a
State that applies eligibility standards,
methodologies, or procedures under the State
plan under this title or under any waiver of
the plan that are less restrictive than the
eligibility standards, methodologies, or
procedures, applied under the State plan or
under a waiver of the plan on the date of
enactment of the Patient Protection and
Affordable Care Act, or that makes individuals
who, on such date of enactment, are eligible
for medical assistance under a waiver of the
State plan, after such date of enactment
eligible for medical assistance through a State
plan amendment with an income eligibility level
that is not less than the income eligibility
level that applied under the waiver, or as a
result of the application of subclause (VIII)
of section 1902(a)(10)(A)(i), shall not be
considered to have in effect eligibility
standards, methodologies, or procedures that
are more restrictive than the standards,
methodologies, or procedures in effect under
the State plan or under a waiver of the plan on
the date of enactment of the Patient Protection
and Affordable Care Act for purposes of
determining compliance with the requirements of
paragraph (1), (2), or (3).
(hh)(1) A State may elect to phase-in the extension of
eligibility for medical assistance to individuals described in
subclause (XX) of subsection (a)(10)(A)(ii) based on the
categorical group (including nonpregnant childless adults) or
income, so long as the State does not extend such eligibility
to individuals described in such subclause with higher income
before making individuals described in such subclause with
lower income eligible for medical assistance.
(2) If an individual described in subclause (XX) of
subsection (a)(10)(A)(ii) is the parent of a child who is under
19 years of age (or such higher age as the State may have
elected) who is eligible for medical assistance under the State
plan or under a waiver of such plan, the individual may not be
enrolled under the State plan unless the individual's child is
enrolled under the State plan or under a waiver of the plan or
is enrolled in other health insurance coverage. For purposes of
the preceding sentence, the term ``parent'' includes an
individual treated as a caretaker relative for purposes of
carrying out section 1931.
(ii)(1) Individuals described in this subsection are
individuals--
(A) whose income does not exceed an income
eligibility level established by the State that
does not exceed the highest income eligibility
level established under the State plan under
this title (or under its State child health
plan under title XXI) for pregnant women; and
(B) who are not pregnant.
(2) At the option of a State, individuals described
in this subsection may include individuals who, had
individuals applied on or before January 1, 2007, would
have been made eligible pursuant to the standards and
processes imposed by that State for benefits described
in clause (XVI) of the matter following subparagraph
(G) of section subsection (a)(10) pursuant to a waiver
granted under section 1115.
(3) At the option of a State, for purposes of
subsection (a)(17)(B), in determining eligibility for
services under this subsection, the State may consider
only the income of the applicant or recipient.
(jj) Primary Care Services Defined.--For purposes of
subsection (a)(13)(C), the term ``primary care services''
means--
(1) evaluation and management services that are
procedure codes (for services covered under title
XVIII) for services in the category designated
Evaluation and Management in the Healthcare Common
Procedure Coding System (established by the Secretary
under section 1848(c)(5) as of December 31, 2009, and
as subsequently modified); and
(2) services related to immunization administration
for vaccines and toxoids for which CPT codes 90465,
90466, 90467, 90468, 90471, 90472, 90473, or 90474 (as
subsequently modified) apply under such System.
(kk) Provider and Supplier Screening, Oversight, and
Reporting Requirements.--For purposes of subsection (a)(77),
the requirements of this subsection are the following:
(1) Screening.--The State complies with the process
for screening providers and suppliers under this title,
as established by the Secretary under section
1886(j)(2).
(2) Provisional period of enhanced oversight for new
providers and suppliers.--The State complies with
procedures to provide for a provisional period of
enhanced oversight for new providers and suppliers
under this title, as established by the Secretary under
section 1886(j)(3).
(3) Disclosure requirements.--The State requires
providers and suppliers under the State plan or under a
waiver of the plan to comply with the disclosure
requirements established by the Secretary under section
1886(j)(4).
(4) Temporary moratorium on enrollment of new
providers or suppliers.--
(A) Temporary moratorium imposed by the
secretary.--
(i) In general.--Subject to clause
(ii), the State complies with any
temporary moratorium on the enrollment
of new providers or suppliers imposed
by the Secretary under section
1886(j)(6).
(ii) Exception.--A State shall not be
required to comply with a temporary
moratorium described in clause (i) if
the State determines that the
imposition of such temporary moratorium
would adversely impact beneficiaries'
access to medical assistance.
(B) Moratorium on enrollment of providers and
suppliers.--At the option of the State, the
State imposes, for purposes of entering into
participation agreements with providers or
suppliers under the State plan or under a
waiver of the plan, periods of enrollment
moratoria, or numerical caps or other limits,
for providers or suppliers identified by the
Secretary as being at high-risk for fraud,
waste, or abuse as necessary to combat fraud,
waste, or abuse, but only if the State
determines that the imposition of any such
period, cap, or other limits would not
adversely impact beneficiaries' access to
medical assistance.
(5) Compliance programs.--The State requires
providers and suppliers under the State plan or under a
waiver of the plan to establish, in accordance with the
requirements of section 1866(j)(7), a compliance
program that contains the core elements established
under subparagraph (B) of that section 1866(j)(7) for
providers or suppliers within a particular industry or
category.
(6) Reporting of adverse provider actions.--The State
complies with the national system for reporting
criminal and civil convictions, sanctions, negative
licensure actions, and other adverse provider actions
to the Secretary, through the Administrator of the
Centers for Medicare & Medicaid Services, in accordance
with regulations of the Secretary.
(7) Enrollment and npi of ordering or referring
providers.--The State requires--
(A) all ordering or referring physicians or
other professionals to be enrolled under the
State plan or under a waiver of the plan as a
participating provider; and
(B) the national provider identifier of any
ordering or referring physician or other
professional to be specified on any claim for
payment that is based on an order or referral
of the physician or other professional.
(8) Other state oversight.--Nothing in this
subsection shall be interpreted to preclude or limit
the ability of a State to engage in provider and
supplier screening or enhanced provider and supplier
oversight activities beyond those required by the
Secretary.
* * * * * * *
payment for covered outpatient drugs
Sec. 1927. (a) Requirement for Rebate Agreement.--
(1) In general.--In order for payment to be available
under section 1903(a) or under part B of title XVIII
for covered outpatient drugs of a manufacturer, the
manufacturer must have entered into and have in effect
a rebate agreement described in subsection (b) with the
Secretary, on behalf of States (except that, the
Secretary may authorize a State to enter directly into
agreements with a manufacturer), and must meet the
requirements of paragraph (5) (with respect to drugs
purchased by a covered entity on or after the first day
of the first month that begins after the date of the
enactment of title VI of the Veterans Health Care Act
of 1992) and paragraph (6). Any agreement between a
State and a manufacturer prior to April 1, 1991, shall
be deemed to have been entered into on January 1, 1991,
and payment to such manufacturer shall be retroactively
calculated as if the agreement between the manufacturer
and the State had been entered into on January 1, 1991.
If a manufacturer has not entered into such an
agreement before March 1, 1991, such an agreement,
subsequently entered into, shall become effective as of
the date on which the agreement is entered into or, at
State option, on any date thereafter on or before the
first day of the calendar quarter that begins more than
60 days after the date the agreement is entered into.
(2) Effective date.--Paragraph (1) shall first apply
to drugs dispensed under this title on or after January
1, 1991.
(3) Authorizing payment for drugs not covered under
rebate agreements.--Paragraph (1), and section
1903(i)(10)(A), shall not apply to the dispensing of a
single source drug or innovator multiple source drug if
(A)(i) the State has made a determination that the
availability of the drug is essential to the health of
beneficiaries under the State plan for medical
assistance; (ii) such drug has been given a rating of
1-A by the Food and Drug Administration; and (iii)(I)
the physician has obtained approval for use of the drug
in advance of its dispensing in accordance with a prior
authorization program described in subsection (d), or
(II) the Secretary has reviewed and approved the
State's determination under subparagraph (A); or (B)
the Secretary determines that in the first calendar
quarter of 1991, there were extenuating circumstances.
(4) Effect on existing agreements.--In the case of a
rebate agreement in effect between a State and a
manufacturer on the date of the enactment of this
section, such agreement, for the initial agreement
period specified therein, shall be considered to be a
rebate agreement in compliance with this section with
respect to that State, if the State agrees to report to
the Secretary any rebates paid pursuant to the
agreement and such agreement provides for a minimum
aggregate rebate of 10 percent of the State's total
expenditures under the State plan for coverage of the
manufacturer's drugs under this title. If, after the
initial agreement period, the State establishes to the
satisfaction of the Secretary that an agreement in
effect on the date of the enactment of this section
provides for rebates that are at least as large as the
rebates otherwise required under this section, and the
State agrees to report any rebates under the agreement
to the Secretary, the agreement shall be considered to
be a rebate agreement in compliance with the section
for the renewal periods of such agreement.
(5) Limitation on prices of drugs purchased by
covered entities.--
(A) Agreement with secretary.--A manufacturer
meets the requirements of this paragraph if the
manufacturer has entered into an agreement with
the Secretary that meets the requirements of
section 340B of the Public Health Service Act
with respect to covered outpatient drugs
purchased by a covered entity on or after the
first day of the first month that begins after
the date of the enactment of this paragraph.
(B) Covered entity defined.--In this
subsection, the term ``covered entity'' means
an entity described in section 340B(a)(4) of
the Public Health Service Act.
(C) Establishment of alternative mechanism to
ensure against duplicate discounts or
rebates.--If the Secretary does not establish a
mechanism under section 340B(a)(5)(A) of the
Public Health Service Act within 12 months of
the date of the enactment of such section, the
following requirements shall apply:
(i) Entities.--Each covered entity
shall inform the single State agency
under section 1902(a)(5) when it is
seeking reimbursement from the State
plan for medical assistance described
in section 1905(a)(12) with respect to
a unit of any covered outpatient drug
which is subject to an agreement under
section 340B(a) of such Act.
(ii) State agency.--Each such single
State agency shall provide a means by
which a covered entity shall indicate
on any drug reimbursement claims form
(or format, where electronic claims
management is used) that a unit of the
drug that is the subject of the form is
subject to an agreement under section
340B of such Act, and not submit to any
manufacturer a claim for a rebate
payment under subsection (b) with
respect to such a drug.
(D) Effect of subsequent amendments.--In
determining whether an agreement under
subparagraph (A) meets the requirements of
section 340B of the Public Health Service Act,
the Secretary shall not take into account any
amendments to such section that are enacted
after the enactment of title VI of the Veterans
Health Care Act of 1992.
(E) Determination of compliance.--A
manufacturer is deemed to meet the requirements
of this paragraph if the manufacturer
establishes to the satisfaction of the
Secretary that the manufacturer would comply
(and has offered to comply) with the provisions
of section 340B of the Public Health Service
Act (as in effect immediately after the
enactment of this paragraph, and would have
entered into an agreement under such section
(as such section was in effect at such time),
but for a legislative change in such section
after the date of the enactment of this
paragraph.
(6) Requirements relating to master
agreements for drugs procured by department of
veterans affairs and certain other federal
agencies.--
(A) In general.--A manufacturer meets
the requirements of this paragraph if
the manufacturer complies with the
provisions of section 8126 of title 38,
United States Code, including the
requirement of entering into a master
agreement with the Secretary of
Veterans Affairs under such section.
(B) Effect of subsequent
amendments.--In determining whether a
master agreement described in
subparagraph (A) meets the requirements
of section 8126 of title 38, United
States Code, the Secretary shall not
take into account any amendments to
such section that are enacted after the
enactment of title VI of the Veterans
Health Care Act of 1992.
(C) Determination of compliance.--A
manufacturer is deemed to meet the
requirements of this paragraph if the
manufacturer establishes to the
satisfaction of the Secretary that the
manufacturer would comply (and has
offered to comply) with the provisions
of section 8126 of title 38, United
States Code (as in effect immediately
after the enactment of this paragraph)
and would have entered into an
agreement under such section (as such
section was in effect at such time),
but for a legislative change in such
section after the date of the enactment
of this paragraph.
(7) Requirement for submission of utilization data
for certain physician administered drugs.--
(A) Single source drugs.--In order for
payment to be available under section 1903(a)
for a covered outpatient drug that is a single
source drug that is physician administered
under this title (as determined by the
Secretary), and that is administered on or
after January 1, 2006, the State shall provide
for the collection and submission of such
utilization data and coding (such as J-codes
and National Drug Code numbers) for each such
drug as the Secretary may specify as necessary
to identify the manufacturer of the drug in
order to secure rebates under this section for
drugs administered for which payment is made
under this title.
(B) Multiple source drugs.--
(i) Identification of most frequently
physician administered multiple source
drugs.--Not later than January 1, 2007,
the Secretary shall publish a list of
the 20 physician administered multiple
source drugs that the Secretary
determines have the highest dollar
volume of physician administered drugs
dispensed under this title. The
Secretary may modify such list from
year to year to reflect changes in such
volume.
(ii) Requirement.--In order for
payment to be available under section
1903(a) for a covered outpatient drug
that is a multiple source drug that is
physician administered (as determined
by the Secretary), that is on the list
published under clause (i), and that is
administered on or after January 1,
2008, the State shall provide for the
submission of such utilization data and
coding (such as J-codes and National
Drug Code numbers) for each such drug
as the Secretary may specify as
necessary to identify the manufacturer
of the drug in order to secure rebates
under this section.
(C) Use of ndc codes.--Not later than January
1, 2007, the information shall be submitted
under subparagraphs (A) and (B)(ii) using
National Drug Code codes unless the Secretary
specifies that an alternative coding system
should be used.
(D) Hardship waiver.--The Secretary may delay
the application of subparagraph (A) or (B)(ii),
or both, in the case of a State to prevent
hardship to States which require additional
time to implement the reporting system required
under the respective subparagraph.
(b) Terms of Rebate Agreement.--
(1) Periodic rebates.--
(A) In general.--A rebate agreement under
this subsection shall require the manufacturer
to provide, to each State plan approved under
this title, a rebate for a rebate period in an
amount specified in subsection (c) for covered
outpatient drugs of the manufacturer dispensed
after December 31, 1990, for which payment was
made under the State plan for such period,
including such drugs dispensed to individuals
enrolled with a medicaid managed care
organization if the organization is responsible
for coverage of such drugs. Such rebate shall
be paid by the manufacturer not later than 30
days after the date of receipt of the
information described in paragraph (2) for the
period involved.
(B) Offset against medical assistance.--
Amounts received by a State under this section
(or under an agreement authorized by the
Secretary under subsection (a)(1) or an
agreement described in subsection (a)(4)) in
any quarter shall be considered to be a
reduction in the amount expended under the
State plan in the quarter for medical
assistance for purposes of section 1903(a)(1).
(C) Special rule for increased minimum rebate
percentage.--
(i) In general.--In addition to the
amounts applied as a reduction under
subparagraph (B), for rebate periods
beginning on or after January 1, 2010,
during a fiscal year, the Secretary
shall reduce payments to a State under
section 1903(a) in the manner specified
in clause (ii), in an amount equal to
the product of--
(I) 100 percent minus the
Federal medical assistance
percentage applicable to the
rebate period for the State;
and
(II) the amounts received by
the State under such
subparagraph that are
attributable (as estimated by
the Secretary based on
utilization and other data) to
the increase in the minimum
rebate percentage effected by
the amendments made by
subsections (a)(1), (b), and
(d) of section 2501 of the
Patient Protection and
Affordable Care Act, taking
into account the additional
drugs included under the
amendments made by subsection
(c) of section 2501 of such
Act.
The Secretary shall adjust such payment
reduction for a calendar quarter to the
extent the Secretary determines, based
upon subsequent utilization and other
data, that the reduction for such
quarter was greater or less than the
amount of payment reduction that should
have been made.
(ii) Manner of payment reduction.--
The amount of the payment reduction
under clause (i) for a State for a
quarter shall be deemed an overpayment
to the State under this title to be
disallowed against the State's regular
quarterly draw for all Medicaid
spending under section 1903(d)(2). Such
a disallowance is not subject to a
reconsideration under section 1116(d).
(2) State provision of information.--
(A) State responsibility.--Each State agency
under this title shall report to each
manufacturer not later than 60 days after the
end of each rebate period and in a form
consistent with a standard reporting format
established by the Secretary, information on
the total number of units of each dosage form
and strength and package size of each covered
outpatient drug dispensed after December 31,
1990, for which payment was made under the plan
during the period, including such information
reported by each medicaid managed care
organization, and shall promptly transmit a
copy of such report to the Secretary.
(B) Audits.--A manufacturer may audit the
information provided (or required to be
provided) under subparagraph (A). Adjustments
to rebates shall be made to the extent that
information indicates that utilization was
greater or less than the amount previously
specified.
(3) Manufacturer provision of price information.--
(A) In general.--Each manufacturer with an
agreement in effect under this section shall
report to the Secretary--
(i) not later than 30 days after the
last day of each rebate period under
the agreement--
(I) on the average manufacturer price
(as defined in subsection (k)(1)) for
covered outpatient drugs for the rebate
period under the agreement (including
for all such drugs that are sold under
a new drug application approved under
section 505(c) of the Federal Food,
Drug, and Cosmetic Act); and
(II) for single source drugs and
innovator multiple source drugs
(including all such drugs that are sold
under a new drug application approved
under section 505(c) of the Federal
Food, Drug, and Cosmetic Act), on the
manufacturer's best price (as defined
in subsection (c)(1)(C)) for such drugs
for the rebate period under the
agreement;
(ii) not later than 30 days after the
date of entering into an agreement
under this section on the average
manufacturer price (as defined in
subsection (k)(1)) as of October 1,
1990 for each of the manufacturer's
covered outpatient drugs (including for
such drugs that are sold under a new
drug application approved under section
505(c) of the Federal Food, Drug, and
Cosmetic Act); and
(iii) for calendar quarters beginning
on or after January 1, 2004, in
conjunction with reporting required
under clause (i) and by National Drug
Code (including package size)--
(I) the manufacturer's
average sales price (as defined
in section 1847A(c)) and the
total number of units specified
under section 1847A(b)(2)(A);
(II) if required to make
payment under section 1847A,
the manufacturer's wholesale
acquisition cost, as defined in
subsection (c)(6) of such
section; and
(III) information on those
sales that were made at a
nominal price or otherwise
described in section
1847A(c)(2)(B);
for a drug or biological described in
subparagraph (C), (D), (E), or (G) of
section 1842(o)(1) or section
1881(b)(13)(A)(ii), and, for calendar
quarters beginning on or after January
1, 2007 and only with respect to the
information described in subclause
(III), for covered outpatient drugs.
(iv) not later than 30 days after the
last day of each month of a rebate
period under the agreement, on the
manufacturer's total number of units
that are used to calculate the monthly
average manufacturer price for each
covered outpatient drug;
Information reported under this subparagraph is
subject to audit by the Inspector General of
the Department of Health and Human Services.
Beginning July 1, 2006, the Secretary shall
provide on a monthly basis to States under
subparagraph (D)(iv) the most recently reported
average manufacturer prices for single source
drugs and for multiple source drugs and shall,
on at least a quarterly basis, update the
information posted on the website under
subparagraph (D)(v) (relating to the weighted
average of the most recently reported monthly
average manufacturer prices).
(B) Verification surveys of average
manufacturer price and manufacturer's average
sales price.--The Secretary may survey
wholesalers and manufacturers that directly
distribute their covered outpatient drugs, when
necessary, to verify manufacturer prices and
manufacturer's average sales prices (including
wholesale acquisition cost) if required to make
payment reported under subparagraph (A). The
Secretary may impose a civil monetary penalty
in an amount not to exceed $100,000 on a
wholesaler, manufacturer, or direct seller, if
the wholesaler, manufacturer, or direct seller
of a covered outpatient drug refuses a request
for information about charges or prices by the
Secretary in connection with a survey under
this subparagraph or knowingly provides false
information. The provisions of section 1128A
(other than subsections (a) (with respect to
amounts of penalties or additional assessments)
and (b)) shall apply to a civil money penalty
under this subparagraph in the same manner as
such provisions apply to a penalty or
proceeding under section 1128A(a).
(C) Penalties.--
(i) Failure to provide timely
information.--In the case of a
manufacturer with an agreement under
this section that fails to provide
information required under subparagraph
(A) on a timely basis, the amount of
the penalty shall be increased by
$10,000 for each day in which such
information has not been provided and
such amount shall be paid to the
Treasury, and, if such information is
not reported within 90 days of the
deadline imposed, the agreement shall
be suspended for services furnished
after the end of such 90-day period and
until the date such information is
reported (but in no case shall such
suspension be for a period of less than
30 days).
(ii) False information.--Any
manufacturer with an agreement under
this section that knowingly provides
false information is subject to a civil
money penalty in an amount not to
exceed $100,000 for each item of false
information. Such civil money penalties
are in addition to other penalties as
may be prescribed by law. The
provisions of section 1128A (other than
subsections (a) and (b)) shall apply to
a civil money penalty under this
subparagraph in the same manner as such
provisions apply to a penalty or
proceeding under section 1128A(a).
(D) Confidentiality of information.--
Notwithstanding any other provision of law,
information disclosed by manufacturers or
wholesalers under this paragraph or under an
agreement with the Secretary of Veterans
Affairs described in subsection (a)(6)(A)(ii)
(other than the wholesale acquisition cost for
purposes of carrying out section 1847A) is
confidential and shall not be disclosed by the
Secretary or the Secretary of Veterans Affairs
or a State agency (or contractor therewith) in
a form which discloses the identity of a
specific manufacturer or wholesaler, prices
charged for drugs by such manufacturer or
wholesaler, except--
(i) as the Secretary determines to be
necessary to carry out this section, to
carry out section 1847A (including the
determination and implementation of the
payment amount), or to carry out
section 1847B,
(ii) to permit the Comptroller
General to review the information
provided,
(iii) to permit the Director of the
Congressional Budget Office to review
the information provided,
(iv) to States to carry out this
title, and
(v) to the Secretary to disclose
(through a website accessible to the
public) the weighted average of the
most recently reported monthly average
manufacturer prices and the average
retail survey price determined for each
multiple source drug in accordance with
subsection (f).
The previous sentence shall also apply to
information disclosed under section 1860D-
2(d)(2) or 1860D-4(c)(2)(E) and drug pricing
data reported under the first sentence of
section 1860D-31(i)(1).
(4) Length of agreement.--
(A) In general.--A rebate agreement shall be
effective for an initial period of not less
than 1 year and shall be automatically renewed
for a period of not less than one year unless
terminated under subparagraph (B).
(B) Termination.--
(i) By the secretary.--The Secretary
may provide for termination of a rebate
agreement for violation of the
requirements of the agreement or other
good cause shown. Such termination
shall not be effective earlier than 60
days after the date of notice of such
termination. The Secretary shall
provide, upon request, a manufacturer
with a hearing concerning such a
termination, but such hearing shall not
delay the effective date of the
termination.
(ii) By a manufacturer.--A
manufacturer may terminate a rebate
agreement under this section for any
reason. Any such termination shall not
be effective until the calendar quarter
beginning at least 60 days after the
date the manufacturer provides notice
to the Secretary.
(iii) Effectiveness of termination.--
Any termination under this subparagraph
shall not affect rebates due under the
agreement before the effective date of
its termination.
(iv) Notice to states.--In the case
of a termination under this
subparagraph, the Secretary shall
provide notice of such termination to
the States within not less than 30 days
before the effective date of such
termination.
(v) Application to terminations of
other agreements.--The provisions of
this subparagraph shall apply to the
terminations of agreements described in
section 340B(a)(1) of the Public Health
Service Act and master agreements
described in section 8126(a) of title
38, United States Code.
(C) Delay before reentry.--In the case of any
rebate agreement with a manufacturer under this
section which is terminated, another such
agreement with the manufacturer (or a successor
manufacturer) may not be entered into until a
period of 1 calendar quarter has elapsed since
the date of the termination, unless the
Secretary finds good cause for an earlier
reinstatement of such an agreement.
(c) Determination of Amount of Rebate.--
(1) Basic rebate for single source drugs and
innovator multiple source drugs.--
(A) In general.--Except as provided in
paragraph (2), the amount of the rebate
specified in this subsection for a rebate
period (as defined in subsection (k)(8)) with
respect to each dosage form and strength of a
single source drug or an innovator multiple
source drug shall be equal to the product of--
(i) the total number of units of each
dosage form and strength paid for under
the State plan in the rebate period (as
reported by the State); and
(ii) subject to subparagraph (B)(ii),
the greater of--
(I) the difference between
the average manufacturer price
and the best price (as defined
in subparagraph (C)) for the
dosage form and strength of the
drug, or
(II) the minimum rebate
percentage (specified in
subparagraph (B)(i)) of such
average manufacturer price,
of or the rebate period.
(B) Range of rebates required.--
(i) Minimum rebate percentage.--For
purposes of subparagraph (A)(ii)(II),
the ``minimum rebate percentage'' for
rebate periods beginning--
(I) after December 31, 1990,
and before October 1, 1992, is
12.5 percent;
(II) after September 30,
1992, and before January 1,
1994, is 15.7 percent;
(III) after December 31,
1993, and before January 1,
1995, is 15.4 percent;
(IV) after December 31, 1994,
and before January 1, 1996, is
15.2 percent;
(V) after December 31, 1995,
and before January 1, 2010 is
15.1 percent;and
(VI) except as provided in
clause (iii), after December
31, 2009, 23.1 percent.
(ii) Temporary limitation on maximum
rebate amount.--In no case shall the
amount applied under subparagraph
(A)(ii) for a rebate period beginning--
(I) before January 1, 1992,
exceed 25 percent of the
average manufacturer price; or
(II) after December 31, 1991,
and before January 1, 1993,
exceed 50 percent of the
average manufacturer price.
(iii) Minimum rebate percentage for
certain drugs.--
(I) In general.--In the case
of a single source drug or an
innovator multiple source drug
described in subclause (II),
the minimum rebate percentage
for rebate periods specified in
clause (i)(VI) is 17.1 percent.
(II) Drug described.--For
purposes of subclause (I), a
single source drug or an
innovator multiple source drug
described in this subclause is
any of the following drugs:
(aa) A clotting
factor for which a
separate furnishing
payment is made under
section 1842(o)(5) and
which is included on a
list of such factors
specified and updated
regularly by the
Secretary.
(bb) A drug approved
by the Food and Drug
Administration
exclusively for
pediatric indications.
(C) Best price defined.--For purposes of this
section--
(i) In general.--The term ``best
price'' means, with respect to a single
source drug or innovator multiple
source drug of a manufacturer
(including the lowest price available
to any entity for any such drug of a
manufacturer that is sold under a new
drug application approved under section
505(c) of the Federal Food, Drug, and
Cosmetic Act), the lowest price
available from the manufacturer during
the rebate period to any wholesaler,
retailer, provider, health maintenance
organization, nonprofit entity, or
governmental entity within the United
States, excluding--
(I) any prices charged on or
after October 1, 1992, to the
Indian Health Service, the
Department of Veterans Affairs,
a State home receiving funds
under section 1741 of title 38,
United States Code, the
Department of Defense, the
Public Health Service, or a
covered entity described in
subsection (a)(5)(B) (including
inpatient prices charged to
hospitals described in section
340B(a)(4)(L) of the Public
Health Service Act);
(II) any prices charged under
the Federal Supply Schedule of
the General Services
Administration;
(III) any prices used under a
State pharmaceutical assistance
program;
(IV) any depot prices and
single award contract prices,
as defined by the Secretary, of
any agency of the Federal
Government;
(V) the prices negotiated
from drug manufacturers for
covered discount card drugs
under an endorsed discount card
program under section 1860D-31;
and
(VI) any prices charged which
are negotiated by a
prescription drug plan under
part D of title XVIII, by an
MA-PD plan under part C of such
title with respect to covered
part D drugs or by a qualified
retiree prescription drug plan
(as defined in section 1860D-
22(a)(2)) with respect to such
drugs on behalf of individuals
entitled to benefits under part
A or enrolled under part B of
such title, or any discounts
provided by manufacturers under
the Medicare coverage gap
discount program under section
1860D-14A.
(ii) Special rules.--The term ``best
price''--
(I) shall be inclusive of
cash discounts, free goods that
are contingent on any purchase
requirement, volume discounts,
and rebates (other than rebates
under this section);
(II) shall be determined
without regard to special
packaging, labeling, or
identifiers on the dosage form
or product or package;
(III) shall not take into
account prices that are merely
nominal in amount; and
(IV) in the case of a manufacturer
that approves, allows, or otherwise
permits any other drug of the
manufacturer to be sold under a new
drug application approved under section
505(c) of the Federal Food, Drug, and
Cosmetic Act, shall be inclusive of the
lowest price for such authorized drug
available from the manufacturer during
the rebate period to any manufacturer,
wholesaler, retailer, provider, health
maintenance organization, nonprofit
entity, or governmental entity within
the United States, excluding those
prices described in subclauses (I)
through (IV) of clause (i).
(iii) Application of auditing and
recordkeeping requirements.--With
respect to a covered entity described
in section 340B(a)(4)(L) of the Public
Health Service Act, any drug purchased
for inpatient use shall be subject to
the auditing and recordkeeping
requirements described in section
340B(a)(5)(C) of the Public Health
Service Act.
(D) Limitation on sales at a nominal price.--
(i) In general.--For purposes of
subparagraph (C)(ii)(III) and
subsection (b)(3)(A)(iii)(III), only
sales by a manufacturer of covered
outpatient drugs at nominal prices to
the following shall be considered to be
sales at a nominal price or merely
nominal in amount:
(I) A covered entity
described in section 340B(a)(4)
of the Public Health Service
Act.
(II) An intermediate care
facility for the mentally
retarded.
(III) A State-owned or
operated nursing facility.
(IV) An entity that--
(aa) is described in
section 501(c)(3) of
the Internal Revenue
Code of 1986 and exempt
from tax under section
501(a) of such Act or
is State-owned or
operated; and
(bb) would be a
covered entity
described in section
340(B)(a)(4) of the
Public Health Service
Act insofar as the
entity provides the
same type of services
to the same type of
populations as a
covered entity
described in such
section provides, but
does not receive
funding under a
provision of law
referred to in such
section;
(V) A public or nonprofit
entity, or an entity based at
an institution of higher
learning whose primary purpose
is to provide health care
services to students of that
institution, that provides a
service or services described
under section 1001(a) of the
Public Health Service Act, 42
U.S.C. 300.
(VI) Any other facility or
entity that the Secretary
determines is a safety net
provider to which sales of such
drugs at a nominal price would
be appropriate based on the
factors described in clause
(ii).
(ii) Factors.--The factors described
in this clause with respect to a
facility or entity are the following:
(I) The type of facility or
entity.
(II) The services provided by
the facility or entity.
(III) The patient population
served by the facility or
entity.
(IV) The number of other
facilities or entities eligible
to purchase at nominal prices
in the same service area.
(iii) Nonapplication.--Clause (i)
shall not apply with respect to sales
by a manufacturer at a nominal price of
covered outpatient drugs pursuant to a
master agreement under section 8126 of
title 38, United States Code.
(iv) Rule of Construction.--Nothing
in this subparagraph shall be construed
to alter any existing statutory or
regulatory prohibition on services with
respect to an entity described in
clause (i)(IV), including the
prohibition set forth in section 1008
of the Public Health Service Act.
(2) Additional rebate for single source and innovator
multiple source drugs.--
(A) In general.--The amount of the rebate
specified in this subsection for a rebate
period, with respect to each dosage form and
strength of a single source drug or an
innovator multiple source drug, shall be
increased by an amount equal to the product
of--
(i) the total number of units of such
dosage form and strength dispensed
after December 31, 1990, for which
payment was made under the State plan
for the rebate period; and
(ii) the amount (if any) by which--
(I) the average manufacturer
price for the dosage form and
strength of the drug for the
period, exceeds
(II) the average manufacturer
price for such dosage form and
strength for the calendar
quarter beginning July 1, 1990
(without regard to whether or
not the drug has been sold or
transferred to an entity,
including a division or
subsidiary of the manufacturer,
after the first day of such
quarter), increased by the
percentage by which the
consumer price index for all
urban consumers (United States
city average) for the month
before the month in which the
rebate period begins exceeds
such index for September 1990.
(B) Treatment of subsequently approved
drugs.--In the case of a covered outpatient
drug approved by the Food and Drug
Administration after October 1, 1990, clause
(ii)(II) of subparagraph (A) shall be applied
by substituting ``the first full calendar
quarter after the day on which the drug was
first marketed'' for ``the calendar quarter
beginning July 1, 1990'' and ``the month prior
to the first month of the first full calendar
quarter after the day on which the drug was
first marketed'' for ``September 1990''.
(C) Treatment of new formulations.--In the
case of a drug that is a line extension of a
single source drug or an innovator multiple
source drug that is an oral solid dosage form,
the rebate obligation with respect to such drug
under this section shall be the amount computed
under this section for such new drug or, if
greater, the product of--
(i) the average manufacturer price of
the line extension of a single source
drug or an innovator multiple source
drug that is an oral solid dosage form;
(ii) the highest additional rebate
(calculated as a percentage of average
manufacturer price) under this section
for any strength of the original single
source drug or innovator multiple
source drug; and
(iii) the total number of units of
each dosage form and strength of the
line extension product paid for under
the State plan in the rebate period (as
reported by the State).
In this subparagraph, the term ``line
extension'' means, with respect to a drug, a
new formulation of the drug, such as an
extended release formulation, but does not
include an abuse-deterrent formulation of the
drug (as determined by the Secretary),
regardless of whether such abuse-deterrent
formulation is an extended release formulation.
(D) Maximum rebate amount.--In no case shall
the sum of the amounts applied under paragraph
(1)(A)(ii) and this paragraph with respect to
each dosage form and strength of a single
source drug or an innovator multiple source
drug for a rebate period beginning after
December 31, 2009, exceed 100 percent of the
average manufacturer price of the drug.
(3) Rebate for other drugs.--
(A) In general.--Except as provided in
subparagraph (C), the amount of the rebate paid
to a State for a rebate period with respect to
each dosage form and strength of covered
outpatient drugs (other than single source
drugs and innovator multiple source drugs)
shall be equal to the product of--
(i) the applicable percentage (as
described in subparagraph (B)) of the
average manufacturer price for the
dosage form and strength for the rebate
period, and
(ii) the total number of units of
such dosage form and strength dispensed
after December 31, 1990, for which
payment was made under the State plan
for the rebate period.
(B) Applicable percentage defined.--For
purposes of subparagraph (A)(i), the
``applicable percentage'' for rebate periods
beginning--
(i) before January 1, 1994, is 10
percent,
(ii) after December 31, 1993, and
before January 1, 2010, is 11 percent;
and
(iii) after December 31, 2009, is 13
percent.
(C) Additional rebate.--
(i) In general.--The amount of the
rebate specified in this paragraph for
a rebate period, with respect to each
dosage form and strength of a covered
outpatient drug other than a single
source drug or an innovator multiple
source drug of a manufacturer, shall be
increased in the manner that the rebate
for a dosage form and strength of a
single source drug or an innovator
multiple source drug is increased under
subparagraphs (A) and (D) of paragraph
(2), except as provided in clause (ii).
(ii) Special rules for application of
provision.--In applying subparagraphs
(A) and (D) of paragraph (2) under
clause (i)--
(I) the reference in
subparagraph (A)(i) of such
paragraph to ``1990'' shall be
deemed a reference to ``2014'';
(II) subject to clause (iii),
the reference in subparagraph
(A)(ii) of such paragraph to
``the calendar quarter
beginning July 1, 1990'' shall
be deemed a reference to ``the
calendar quarter beginning July
1, 2014''; and
(III) subject to clause
(iii), the reference in
subparagraph (A)(ii) of such
paragraph to ``September 1990''
shall be deemed a reference to
``September 2014'';
(IV) the references in
subparagraph (D) of such
paragraph to ``paragraph
(1)(A)(ii)'', ``this
paragraph'', and ``December 31,
2009'' shall be deemed
references to ``subparagraph
(A)'', ``this subparagraph'',
and ``December 31, 2014'',
respectively; and
(V) any reference in such
paragraph to a ``single source
drug or an innovator multiple
source drug'' shall be deemed
to be a reference to a drug to
which clause (i) applies.
(iii) Special rule for certain
noninnovator multiple source drugs.--In
applying paragraph (2)(A)(ii)(II) under
clause (i) with respect to a covered
outpatient drug that is first marketed
as a drug other than a single source
drug or an innovator multiple source
drug after April 1, 2013, such
paragraph shall be applied--
(I) by substituting ``the
applicable quarter'' for ``the
calendar quarter beginning July
1, 1990''; and
(II) by substituting ``the
last month in such applicable
quarter'' for ``September
1990''.
(iv) Applicable quarter defined.--In
this subsection, the term ``applicable
quarter'' means, with respect to a drug
described in clause (iii), the fifth
full calendar quarter after which the
drug is marketed as a drug other than a
single source drug or an innovator
multiple source drug.
(d) Limitations on Coverage of Drugs.--
(1) Permissible restrictions.--(A) A State may
subject to prior authorization any covered outpatient
drug. Any such prior authorization program shall comply
with the requirements of paragraph (5).
(B) A State may exclude or otherwise restrict
coverage of a covered outpatient drug if--
(i) the prescribed use is not for a medically
accepted indication (as defined in subsection
(k)(6));
(ii) the drug is contained in the list
referred to in paragraph (2);
(iii) the drug is subject to such
restrictions pursuant to an agreement between a
manufacturer and a State authorized by the
Secretary under subsection (a)(1) or in effect
pursuant to subsection (a)(4); or
(iv) the State has excluded coverage of the
drug from its formulary established in
accordance with paragraph (4).
(2) List of drugs subject to restriction.--The
following drugs or classes of drugs, or their medical
uses, may be excluded from coverage or otherwise
restricted:
(A) Agents when used for anorexia, weight
loss, or weight gain.
(B) Agents when used to promote fertility.
(C) Agents when used for cosmetic purposes or
hair growth.
(D) Agents when used for the symptomatic
relief of cough and colds.
(E) Prescription vitamins and mineral
products, except prenatal vitamins and fluoride
preparations.
(F) Nonprescription drugs, except, in the
case of pregnant women when recommended in
accordance with the Guideline referred to in
section 1905(bb)(2)(A), agents approved by the
Food and Drug Administration under the over-
the-counter monograph process for purposes of
promoting, and when used to promote, tobacco
cessation.
(G) Covered outpatient drugs which the
manufacturer seeks to require as a condition of
sale that associated tests or monitoring
services be purchased exclusively from the
manufacturer or its designee.
(H) Agents when used for the treatment of
sexual or erectile dysfunction, unless such
agents are used to treat a condition, other
than sexual or erectile dysfunction, for which
the agents have been approved by the Food and
Drug Administration.
(3) Update of drug listings.--The Secretary shall, by
regulation, periodically update the list of drugs or
classes of drugs described in paragraph (2) or their
medical uses, which the Secretary has determined, based
on data collected by surveillance and utilization
review programs of State medical assistance programs,
to be subject to clinical abuse or inappropriate use.
(4) Requirements for formularies.--A State may
establish a formulary if the formulary meets the
following requirements:
(A) The formulary is developed by a committee
consisting of physicians, pharmacists, and
other appropriate individuals appointed by the
Governor of the State (or, at the option of the
State, the State's drug use review board
established under subsection (g)(3)).
(B) Except as provided in subparagraph (C),
the formulary includes the covered outpatient
drugs of any manufacturer which has entered
into and complies with an agreement under
subsection (a) (other than any drug excluded
from coverage or otherwise restricted under
paragraph (2)).
(C) A covered outpatient drug may be excluded
with respect to the treatment of a specific
disease or condition for an identified
population (if any) only if, based on the
drug's labeling (or, in the case of a drug the
prescribed use of which is not approved under
the Federal Food, Drug, and Cosmetic Act but is
a medically accepted indication, based on
information from the appropriate compendia
described in subsection (k)(6)), the excluded
drug does not have a significant, clinically
meaningful therapeutic advantage in terms of
safety, effectiveness, or clinical outcome of
such treatment for such population over other
drugs included in the formulary and there is a
written explanation (available to the public)
of the basis for the exclusion.
(D) The State plan permits coverage of a drug
excluded from the formulary (other than any
drug excluded from coverage or otherwise
restricted under paragraph (2)) pursuant to a
prior authorization program that is consistent
with paragraph (5).
(E) The formulary meets such other
requirements as the Secretary may impose in
order to achieve program savings consistent
with protecting the health of program
beneficiaries.
A prior authorization program established by a State
under paragraph (5) is not a formulary subject to the
requirements of this paragraph.
(5) Requirements of prior authorization programs.--A
State plan under this title may require, as a condition
of coverage or payment for a covered outpatient drug
for which Federal financial participation is available
in accordance with this section, with respect to drugs
dispensed on or after July 1, 1991, the approval of the
drug before its dispensing for any medically accepted
indication (as defined in subsection (k)(6)) only if
the system providing for such approval--
(A) provides response by telephone or other
telecommunication device within 24 hours of a
request for prior authorization; and
(B) except with respect to the drugs on the
list referred to in paragraph (2), provides for
the dispensing of at least 72-hour supply of a
covered outpatient prescription drug in an
emergency situation (as defined by the
Secretary).
(6) Other permissible restrictions.--A State may
impose limitations, with respect to all such drugs in a
therapeutic class, on the minimum or maximum quantities
per prescription or on the number of refills, if such
limitations are necessary to discourage waste, and may
address instances of fraud or abuse by individuals in
any manner authorized under this Act.
(7) Non-excludable drugs.--The following drugs or
classes of drugs, or their medical uses, shall not be
excluded from coverage:
(A) Agents when used to promote smoking
cessation, including agents approved by the
Food and Drug Administration under the over-
the-counter monograph process for purposes of
promoting, and when used to promote, tobacco
cessation.
(B) Barbiturates.
(C) Benzodiazepines.
(e) Treatment of Pharmacy Reimbursement Limits.--
(1) In general.--During the period beginning on
January 1, 1991, and ending on December 31, 1994--
(A) a State may not reduce the payment limits
established by regulation under this title or
any limitation described in paragraph (3) with
respect to the ingredient cost of a covered
outpatient drug or the dispensing fee for such
a drug below the limits in effect as of January
1, 1991, and
(B) except as provided in paragraph (2), the
Secretary may not modify by regulation the
formula established under sections 447.331
through 447.334 of title 42, Code of Federal
Regulations, in effect on November 5, 1990, to
reduce the limits described in subparagraph
(A).
(2) Special rule.--If a State is not in compliance
with the regulations described in paragraph (1)(B),
paragraph (1)(A) shall not apply to such State until
such State is in compliance with such regulations.
(3) Effect on state maximum allowable cost
limitations.--This section shall not supersede or
affect provisions in effect prior to January 1, 1991,
or after December 31, 1994, relating to any maximum
allowable cost limitation established by a State for
payment by the State for covered outpatient drugs, and
rebates shall be made under this section without regard
to whether or not payment by the State for such drugs
is subject to such a limitation or the amount of such a
limitation.
(4) Establishment of upper payment Limits.--Subject
to paragraph (5), the Secretary shall establish a
Federal upper reimbursement limit for each multiple
source drug for which the FDA has rated three or more
products therapeutically and pharmaceutically
equivalent, regardless of whether all such additional
formulations are rated as such and shall use only such
formulations when determining any such upper limit.
(5) Use of amp in upper payment limits.--The
Secretary shall calculate the Federal upper
reimbursement limit established under paragraph (4) as
no less than 175 percent of the weighted average
(determined on the basis of utilization) of the most
recently reported monthly average manufacturer prices
for pharmaceutically and therapeutically equivalent
multiple source drug products that are available for
purchase by retail community pharmacies on a nationwide
basis. The Secretary shall implement a smoothing
process for average manufacturer prices. Such process
shall be similar to the smoothing process used in
determining the average sales price of a drug or
biological under section 1847A.
(f) Survey of Retail Prices; State Payment and Utilization
Rates; and Performance Rankings.--
(1) Survey of retail prices.--
(A) Use of vendor.--The Secretary may
contract services for--
(i) with respect to a retail
community pharmacy, the determination
on a monthly basis of retail survey
prices for covered outpatient drugs
that represent a nationwide average of
consumer purchase prices for such
drugs, net of all discounts and rebates
(to the extent any information with
respect to such discounts and rebates
is available); and
(ii) the notification of the
Secretary when a drug product that is
therapeutically and pharmaceutically
equivalent and bioequivalent becomes
generally available.
(B) Secretary response to notification of
availability of multiple source products.--If
contractor notifies the Secretary under
subparagraph (A)(ii) that a drug product
described in such subparagraph has become
generally available, the Secretary shall make a
determination, within 7 days after receiving
such notification, as to whether the product is
now described in subsection (e)(4).
(C) Use of competitive bidding.--In
contracting for such services, the Secretary
shall competitively bid for an outside vendor
that has a demonstrated history in--
(i) surveying and determining, on a
representative nationwide basis, retail
prices for ingredient costs of
prescription drugs;
(ii) working with retail community
pharmacies, commercial payers, and
States in obtaining and disseminating
such price information; and
(iii) collecting and reporting such
price information on at least a monthly
basis.
In contracting for such services, the Secretary
may waive such provisions of the Federal
Acquisition Regulation as are necessary for the
efficient implementation of this subsection,
other than provisions relating to
confidentiality of information and such other
provisions as the Secretary determines
appropriate.
(D) Additional provisions.--A contract with a
vendor under this paragraph shall include such
terms and conditions as the Secretary shall
specify, including the following:
(i) The vendor must monitor the
marketplace and report to the Secretary
each time there is a new covered
outpatient drug generally available.
(ii) The vendor must update the
Secretary no less often than monthly on
the retail survey prices for covered
outpatient drugs.
(iii) The contract shall be effective
for a term of 2 years.
(E) Availability of information to states.--
Information on retail survey prices obtained
under this paragraph, including applicable
information on single source drugs, shall be
provided to States on at least a monthly basis.
The Secretary shall devise and implement a
means for providing access to each State agency
designated under section 1902(a)(5) with
responsibility for the administration or
supervision of the administration of the State
plan under this title of the retail survey
price determined under this paragraph.
(2) Annual state report.--Each State shall annually
report to the Secretary information on--
(A) the payment rates under the State plan
under this title for covered outpatient drugs;
(B) the dispensing fees paid under such plan
for such drugs; and
(C) utilization rates for noninnovator
multiple source drugs under such plan.
(3) Annual state performance rankings.--
(A) Comparative analysis.--The Secretary
annually shall compare, for the 50 most widely
prescribed drugs identified by the Secretary,
the national retail sales price data (collected
under paragraph (1)) for such drugs with data
on prices under this title for each such drug
for each State.
(B) Availability of information.--The
Secretary shall submit to Congress and the
States full information regarding the annual
rankings made under subparagraph (A).
(4) Appropriation.--Out of any funds in the Treasury
not otherwise appropriated, there is appropriated to
the Secretary of Health and Human Services $5,000,000
for each of fiscal years 2006 through 2010 to carry out
this subsection.
(g) Drug Use Review.--
(1) In general.--
(A) In order to meet the requirement of
section 1903(i)(10)(B), a State shall provide,
by not later than January 1, 1993, for a drug
use review program described in paragraph (2)
for covered outpatient drugs in order to assure
that prescriptions (i) are appropriate, (ii)
are medically necessary, and (iii) are not
likely to result in adverse medical results.
The program shall be designed to educate
physicians and pharmacists to identify and
reduce the frequency of patterns of fraud,
abuse, gross overuse, or inappropriate or
medically unnecessary care, among physicians,
pharmacists, and patients, or associated with
specific drugs or groups of drugs, as well as
potential and actual severe adverse reactions
to drugs including education on therapeutic
appropriateness, overutilization and
underutilization, appropriate use of generic
products, therapeutic duplication, drug-disease
contraindications, drug-drug interactions,
incorrect drug dosage or duration of drug
treatment, drug-allergy interactions, and
clinical abuse/misuse.
(B) The program shall assess data on drug use
against predetermined standards, consistent
with the following:
(i) compendia which shall consist of
the following:
(I) American Hospital
Formulary Service Drug
Information;
(II) United States
Pharmacopeia-Drug Information
(or its successor
publications); and
(III) the DRUGDEX Information
System; and
(ii) the peer-reviewed medical
literature.
(C) The Secretary, under the procedures
established in section 1903, shall pay to each
State an amount equal to 75 per centum of so
much of the sums expended by the State plan
during calendar years 1991 through 1993 as the
Secretary determines is attributable to the
statewide adoption of a drug use review program
which conforms to the requirements of this
subsection.
(D) States shall not be required to perform
additional drug use reviews with respect to
drugs dispensed to residents of nursing
facilities which are in compliance with the
drug regimen review procedures prescribed by
the Secretary for such facilities in
regulations implementing section 1919,
currently at section 483.60 of title 42, Code
of Federal Regulations.
(2) Description of program.--Each drug use review
program shall meet the following requirements for
covered outpatient drugs:
(A) Prospective drug review.--(i) The State
plan shall provide for a review of drug therapy
before each prescription is filled or delivered
to an individual receiving benefits under this
title, typically at the point-of-sale or point
of distribution. The review shall include
screening for potential drug therapy problems
due to therapeutic duplication, drug-disease
contraindications, drug-drug interactions
(including serious interactions with
nonprescription or over-the-counter drugs),
incorrect drug dosage or duration of drug
treatment, drug-allergy interactions, and
clinical abuse/misuse. Each State shall use the
compendia and literature referred to in
paragraph (1)(B) as its source of standards for
such review.
(ii) As part of the State's prospective drug
use review program under this subparagraph
applicable State law shall establish standards
for counseling of individuals receiving
benefits under this title by pharmacists which
includes at least the following:
(I) The pharmacist must offer to
discuss with each individual receiving
benefits under this title or caregiver
of such individual (in person, whenever
practicable, or through access to a
telephone service which is toll-free
for long-distance calls) who presents a
prescription, matters which in the
exercise of the pharmacist's
professional judgment (consistent with
State law respecting the provision of
such information), the pharmacist deems
significant including the following:
(aa) The name and description
of the medication.
(bb) The route, dosage form,
dosage, route of
administration, and duration of
drug therapy.
(cc) Special directions and
precautions for preparation,
administration and use by the
patient.
(dd) Common severe side or
adverse effects or interactions
and therapeutic
contraindications that may be
encountered, including their
avoidance, and the action
required if they occur.
(ee) Techniques for self-
monitoring drug therapy.
(ff) Proper storage.
(gg) Prescription refill
information.
(hh) Action to be taken in
the event of a missed dose.
(II) A reasonable effort must be made
by the pharmacist to obtain, record,
and maintain at least the following
information regarding individuals
receiving benefits under this title:
(aa) Name, address, telephone
number, date of birth (or age)
and gender.
(bb) Individual history where
significant, including disease
state or states, known
allergies and drug reactions,
and a comprehensive list of
medications and relevant
devices.
(cc) Pharmacist comments
relevant to the individual's
drug therapy.
Nothing in this clause shall be construed as
requiring a pharmacist to provide consultation
when an individual receiving benefits under
this title or caregiver of such individual
refuses such consultation, or to require
verification of the offer to provide
consultation or a refusal of such offer.
(B) Retrospective drug use review.--The
program shall provide, through its mechanized
drug claims processing and information
retrieval systems (approved by the Secretary
under section 1903(r)) or otherwise, for the
ongoing periodic examination of claims data and
other records in order to identify patterns of
fraud, abuse, gross overuse, or inappropriate
or medically unnecessary care, among
physicians, pharmacists and individuals
receiving benefits under this title, or
associated with specific drugs or groups of
drugs.
(C) Application of standards.--The program
shall, on an ongoing basis, assess data on drug
use against explicit predetermined standards
(using the compendia and literature referred to
in subsection (1)(B) as the source of standards
for such assessment) including but not limited
to monitoring for therapeutic appropriateness,
overutilization and underutilization,
appropriate use of generic products,
therapeutic duplication, drug-disease
contraindications, drug-drug interactions,
incorrect drug dosage or duration of drug
treatment, and clinical abuse/misuse and, as
necessary, introduce remedial strategies, in
order to improve the quality of care and to
conserve program funds or personal
expenditures.
(D) Educational program.--The program shall,
through its State drug use review board
established under paragraph (3), either
directly or through contracts with accredited
health care educational institutions, State
medical societies or State pharmacists
associations/societies or other organizations
as specified by the State, and using data
provided by the State drug use review board on
common drug therapy problems, provide for
active and ongoing educational outreach
programs (including the activities described in
paragraph (3)(C)(iii) of this subsection) to
educate practitioners on common drug therapy
problems with the aim of improving prescribing
or dispensing practices.
(3) State drug use review board.--
(A) Establishment.--Each State shall provide
for the establishment of a drug use review
board (hereinafter referred to as the ``DUR
Board'') either directly or through a contract
with a private organization.
(B) Membership.--The membership of the DUR
Board shall include health care professionals
who have recognized knowledge and expertise in
one or more of the following:
(i) The clinically appropriate
prescribing of covered outpatient
drugs.
(ii) The clinically appropriate
dispensing and monitoring of covered
outpatient drugs.
(iii) Drug use review, evaluation,
and intervention.
(iv) Medical quality assurance.
The membership of the DUR Board shall be made
up at least \1/3\ but no more than 51 percent
licensed and actively practicing physicians and
at least \1/3\ licensed and actively practicing
pharmacists.
(C) Activities.--The activities of the DUR
Board shall include but not be limited to the
following:
(i) Retrospective DUR as defined in
section (2)(B).
(ii) Application of standards as
defined in section (2)(C).
(iii) Ongoing interventions for
physicians and pharmacists, targeted
toward therapy problems or individuals
identified in the course of
retrospective drug use reviews
performed under this subsection.
Intervention programs shall include, in
appropriate instances, at least:
(I) information dissemination
sufficient to ensure the ready
availability to physicians and
pharmacists in the State of
information concerning its
duties, powers, and basis for
its standards;
(II) written, oral, or
electronic reminders containing
patient-specific or drug-
specific (or both) information
and suggested changes in
prescribing or dispensing
practices, communicated in a
manner designed to ensure the
privacy of patient-related
information;
(III) use of face-to-face
discussions between health care
professionals who are experts
in rational drug therapy and
selected prescribers and
pharmacists who have been
targeted for educational
intervention, including
discussion of optimal
prescribing, dispensing, or
pharmacy care practices, and
follow-up face-to-face
discussions; and
(IV) intensified review or
monitoring of selected
prescribers or dispensers.
The Board shall re-evaluate interventions after
an appropriate period of time to determine if
the intervention improved the quality of drug
therapy, to evaluate the success of the
interventions and make modifications as
necessary.
(D) Annual report.--Each State shall require
the DUR Board to prepare a report on an annual
basis. The State shall submit a report on an
annual basis to the Secretary which shall
include a description of the activities of the
Board, including the nature and scope of the
prospective and retrospective drug use review
programs, a summary of the interventions used,
an assessment of the impact of these
educational interventions on quality of care,
and an estimate of the cost savings generated
as a result of such program. The Secretary
shall utilize such report in evaluating the
effectiveness of each State's drug use review
program.
(h) Electronic Claims Management.--
(1) In general.--In accordance with chapter 35 of
title 44, United States Code (relating to coordination
of Federal information policy), the Secretary shall
encourage each State agency to establish, as its
principal means of processing claims for covered
outpatient drugs under this title, a point-of-sale
electronic claims management system, for the purpose of
performing on-line, real time eligibility
verifications, claims data capture, adjudication of
claims, and assisting pharmacists (and other authorized
persons) in applying for and receiving payment.
(2) Encouragement.--In order to carry out paragraph
(1)--
(A) for calendar quarters during fiscal years
1991 and 1992, expenditures under the State
plan attributable to development of a system
described in paragraph (1) shall receive
Federal financial participation under section
1903(a)(3)(A)(i) (at a matching rate of 90
percent) if the State acquires, through
applicable competitive procurement process in
the State, the most cost-effective
telecommunications network and automatic data
processing services and equipment; and
(B) the Secretary may permit, in the
procurement described in subparagraph (A) in
the application of part 433 of title 42, Code
of Federal Regulations, and parts 95, 205, and
307 of title 45, Code of Federal Regulations,
the substitution of the State's request for
proposal in competitive procurement for advance
planning and implementation documents otherwise
required.
(i) Annual Report.--
(1) In general.--Not later than May 1 of each year
the Secretary shall transmit to the Committee on
Finance of the Senate, the Committee on Energy and
Commerce of the House of Representatives, and the
Committees on Aging of the Senate and the House of
Representatives a report on the operation of this
section in the preceding fiscal year.
(2) Details.--Each report shall include information
on--
(A) ingredient costs paid under this title
for single source drugs, multiple source drugs,
and nonprescription covered outpatient drugs;
(B) the total value of rebates received and
number of manufacturers providing such rebates;
(C) how the size of such rebates compare with
the size or rebates offered to other purchasers
of covered outpatient drugs;
(D) the effect of inflation on the value of
rebates required under this section;
(E) trends in prices paid under this title
for covered outpatient drugs; and
(F) Federal and State administrative costs
associated with compliance with the provisions
of this title.
(j) Exemption of Organized Health Care Settings.--
(1) Covered outpatient drugs are not subject to the
requirements of this section if such drugs are--
(A) dispensed by health maintenance
organizations, including Medicaid managed care
organizations that contract under section
1903(m); and
(B) subject to discounts under section 340B
of the Public Health Service Act.
(2) The State plan shall provide that a hospital (providing
medical assistance under such plan) that dispenses covered
outpatient drugs using drug formulary systems, and bills the
plan no more than the hospital's purchasing costs for covered
outpatient drugs (as determined under the State plan) shall not
be subject to the requirements of this section.
(3) Nothing in this subsection shall be construed as
providing that amounts for covered outpatient drugs paid by the
institutions described in this subsection should not be taken
into account for purposes of determining the best price as
described in subsection (c).
(k) Definitions.--In the section--
(1) Average manufacturer price.--
(A) In general.--Subject to subparagraph (B),
the term ``average manufacturer price'' means,
with respect to a covered outpatient drug of a
manufacturer for a rebate period, the average
price paid to the manufacturer for the drug in
the United States by--
(i) wholesalers for drugs distributed
to retail community pharmacies; and
(ii) retail community pharmacies that
purchase drugs directly from the
manufacturer.
(B) Exclusion of customary prompt pay
discounts and other payments.--
(i) In general.--The average
manufacturer price for a covered
outpatient drug shall exclude--
(I) customary prompt pay
discounts extended to
wholesalers;
(II) bona fide service fees
paid by manufacturers to
wholesalers or retail community
pharmacies, including (but not
limited to) distribution
service fees, inventory
management fees, product
stocking allowances, and fees
associated with administrative
services agreements and patient
care programs (such as
medication compliance programs
and patient education
programs);
(III) reimbursement by
manufacturers for recalled,
damaged, expired, or otherwise
unsalable returned goods,
including (but not limited to)
reimbursement for the cost of
the goods and any reimbursement
of costs associated with return
goods handling and processing,
reverse logistics, and drug
destruction;
(IV) payments received from,
and rebates or discounts
provided to, pharmacy benefit
managers, managed care
organizations, health
maintenance organizations,
insurers, hospitals, clinics,
mail order pharmacies, long
term care providers,
manufacturers, or any other
entity that does not conduct
business as a wholesaler or a
retail community pharmacy,
unless the drug is an
inhalation, infusion,
instilled, implanted, or
injectable drug that is not
generally dispensed through a
retail community pharmacy; and
(V) discounts provided by
manufacturers under section
1860D-14A.
(ii) Inclusion of other discounts and
payments.--Notwithstanding clause (i),
any other discounts, rebates, payments,
or other financial transactions that
are received by, paid by, or passed
through to, retail community pharmacies
shall be included in the average
manufacturer price for a covered
outpatient drug.
(C) Inclusion of section 505(c) drugs.--In
the case of a manufacturer that approves,
allows, or otherwise permits any drug of the
manufacturer to be sold under a new drug
application approved under section 505(c) of
the Federal Food, Drug, and Cosmetic Act, such
term shall be inclusive of the average price
paid for such drug by wholesalers for drugs
distributed to retail community pharmacies.
(2) Covered outpatient drug.--Subject to the
exceptions in paragraph (3), the term ``covered
outpatient drug'' means--
(A) of those drugs which are treated as
prescribed drugs for purposes of section
1905(a)(12), a drug which may be dispensed only
upon prescription (except as provided in
paragraph (5)), and--
(i) which is approved for safety and
effectiveness as a prescription drug
under section 505 or 507 of the Federal
Food, Drug, and Cosmetic Act or which
is approved under section 505(j) of
such Act;
(ii)(I) which was commercially used
or sold in the United States before the
date of the enactment of the Drug
Amendments of 1962 or which is
identical, similar, or related (within
the meaning of section 310.6(b)(1) of
title 21 of the Code of Federal
Regulations) to such a drug, and (II)
which has not been the subject of a
final determination by the Secretary
that it is a ``new drug'' (within the
meaning of section 201(p) of the
Federal Food, Drug, and Cosmetic Act)
or an action brought by the Secretary
under section 301, 302(a), or 304(a) of
such Act to enforce section 502(f) or
505(a) of such Act; or
(iii)(I) which is described in
section 107(c)(3) of the Drug
Amendments of 1962 and for which the
Secretary has determined there is a
compelling justification for its
medical need, or is identical, similar,
or related (within the meaning of
section 310.6(b)(1) of title 21 of the
Code of Federal Regulations) to such a
drug, and (II) for which the Secretary
has not issued a notice of an
opportunity for a hearing under section
505(e) of the Federal Food, Drug, and
Cosmetic Act on a proposed order of the
Secretary to withdraw approval of an
application for such drug under such
section because the Secretary has
determined that the drug is less than
effective for some or all conditions of
use prescribed, recommended, or
suggested in its labeling; and
(B) a biological product, other than a
vaccine which--
(i) may only be dispensed upon
prescription,
(ii) is licensed under section 351 of
the Public Health Service Act, and
(iii) is produced at an establishment
licensed under such section to produce
such product; and
(C) insulin certified under section 506 of
the Federal Food, Drug, and Cosmetic Act.
(3) Limiting definition.--The term ``covered
outpatient drug'' does not include any drug, biological
product, or insulin provided as part of, or as incident
to and in the same setting as, any of the following
(and for which payment may be made under this title as
part of payment for the following and not as direct
reimbursement for the drug):
(A) Inpatient hospital services.
(B) Hospice services.
(C) Dental services, except that drugs for
which the State plan authorizes direct
reimbursement to the dispensing dentist are
covered outpatient drugs.
(D) Physicians' services.
(E) Outpatient hospital services.
(F) Nursing facility services and services
provided by an intermediate care facility for
the mentally retarded.
(G) Other laboratory and x-ray services.
(H) Renal dialysis.
Such term also does not include any such drug or
product for which a National Drug Code number is not
required by the Food and Drug Administration or a drug
or biological used for a medical indication which is
not a medically accepted indication. Any drug,
biological product, or insulin excluded from the
definition of such term as a result of this paragraph
shall be treated as a covered outpatient drug for
purposes of determining the best price (as defined in
subsection (c)(1)(C)) for such drug, biological
product, or insulin.
(4) Nonprescription drugs.--If a State plan for
medical assistance under this title includes coverage
of prescribed drugs as described in section 1905(a)(12)
and permits coverage of drugs which may be sold without
a prescription (commonly referred to as ``over-the-
counter'' drugs), if they are prescribed by a physician
(or other person authorized to prescribe under State
law), such a drug shall be regarded as a covered
outpatient drug.
(5) Manufacturer.--The term ``manufacturer'' means
any entity which is engaged in--
(A) the production, preparation, propagation,
compounding, conversion, or processing of
prescription drug products, either directly or
indirectly by extraction from substances of
natural origin, or independently by means of
chemical synthesis, or by a combination of
extraction and chemical synthesis, or
(B) in the packaging, repackaging, labeling,
relabeling, or distribution of prescription
drug products.
Such term does not include a wholesale distributor of
drugs or a retail pharmacy licensed under State law.
(6) Medically accepted indication.--The term
``medically accepted indication'' means any use for a
covered outpatient drug which is approved under the
Federal Food, Drug, and Cosmetic Act, or the use of
which is supported by one or more citations included or
approved for inclusion in any of the compendia
described in subsection (g)(1)(B)(i).
(7) Multiple source drug; innovator multiple source
drug; noninnovator multiple source drug; single source
drug.--
(A) Defined.--
(i) Multiple source drug.--The term
``multiple source drug'' means, with
respect to a rebate period, a covered
outpatient drug (not including any drug
described in paragraph (5)) for which
there at least 1 other drug product
which--
(I) is rated as
therapeutically equivalent
(under the Food and Drug
Administration's most recent
publication of ``Approved Drug
Products with Therapeutic
Equivalence Evaluations''),
(II) except as provided in
subparagraph (B), is
pharmaceutically equivalent and
bioequivalent, as defined in
subparagraph (C) and as
determined by the Food and Drug
Administration, and
(III) is sold or marketed in
the United States during the
period.
(ii) Innovator multiple source
drug.--The term ``innovator multiple
source drug'' means a multiple source
drug that was originally marketed under
an original new drug application
approved by the Food and Drug
Administration.
(iii) Noninnovator multiple source
drug.--The term ``noninnovator multiple
source drug'' means a multiple source
drug that is not an innovator multiple
source drug.
(iv) Single source drug.--The term
``single source drug'' means a covered
outpatient drug which is produced or
distributed under an original new drug
application approved by the Food and
Drug Administration, including a drug
product marketed by any cross-licensed
producers or distributors operating
under the new drug application.
(B) Exception.--Subparagraph (A)(i)(II) shall
not apply if the Food and Drug Administration
changes by regulation the requirement that, for
purposes of the publication described in
subparagraph (A)(i)(I), in order for drug
products to be rated as therapeutically
equivalent, they must be pharmaceutically
equivalent and bioequivalent, as defined in
subparagraph (C).
(C) Definitions.--For purposes of this
paragraph--
(i) drug products are
pharmaceutically equivalent if the
products contain identical amounts of
the same active drug ingredient in the
same dosage form and meet compendial or
other applicable standards of strength,
quality, purity, and identity; and
(ii) drugs are bioequivalent if they
do not present a known or potential
bioequivalence problem, or, if they do
present such a problem, they are shown
to meet an appropriate standard of
bioequivalence.
(8) Rebate period.--The term ``rebate period'' means,
with respect to an agreement under subsection (a), a
calendar quarter or other period specified by the
Secretary with respect to the payment of rebates under
such agreement.
(9) State agency.--The term ``State agency'' means
the agency designated under section 1902(a)(5) to
administer or supervise the administration of the State
plan for medical assistance.
(10) Retail community pharmacy.--The term ``retail
community pharmacy'' means an independent pharmacy, a
chain pharmacy, a supermarket pharmacy, or a mass
merchandiser pharmacy that is licensed as a pharmacy by
the State and that dispenses medications to the general
public at retail prices. Such term does not include a
pharmacy that dispenses prescription medications to
patients primarily through the mail, nursing home
pharmacies, long-term care facility pharmacies,
hospital pharmacies, clinics, charitable or not-for-
profit pharmacies, government pharmacies, or pharmacy
benefit managers.
(11) Wholesaler.--The term ``wholesaler'' means a
drug wholesaler that is engaged in wholesale
distribution of prescription drugs to retail community
pharmacies, including (but not limited to)
manufacturers, repackers, distributors, own-label
distributors, private-label distributors, jobbers,
brokers, warehouses (including manufacturer's and
distributor's warehouses, chain drug warehouses, and
wholesale drug warehouses) independent wholesale drug
traders, and retail community pharmacies that conduct
wholesale distributions.
* * * * * * *
medicaid improvement fund
Sec. 1941. (a) Establishment.--The Secretary shall establish
under this title a Medicaid Improvement Fund (in this section
referred to as the ``Fund'') which shall be available to the
Secretary to improve the management of the Medicaid program by
the Centers for Medicare & Medicaid Services, including
oversight of contracts and contractors and evaluation of
demonstration projects. Payments made for activities under this
subsection shall be in addition to payments that would
otherwise be made for such activities.
(b) Funding.--
[(1) In general.--There shall be available to the
Fund, for expenditures from the Fund--
[(A) for fiscal year 2014, $10,000,000; and
[(B) for each of fiscal years 2015 through
2018, $0.]
(1) In general.--There shall be available to the
Fund, for expenditures from the Fund for fiscal year
2021 and thereafter, $5,000,000.
(2) Funding limitation.--Amounts in the Fund shall be
available in advance of appropriations but only if the
total amount obligated from the Fund does not exceed
the amount available to the Fund under paragraph (1).
The Secretary may obligate funds from the Fund only if
the Secretary determines (and the Chief Actuary of the
Centers for Medicare & Medicaid Services and the
appropriate budget officer certify) that there are
available in the Fund sufficient amounts to cover all
such obligations incurred consistent with the previous
sentence.
* * * * * * *
TITLE XXI--STATE CHILDREN'S HEALTH INSURANCE PROGRAM
* * * * * * *
SEC. 2102. GENERAL CONTENTS OF STATE CHILD HEALTH PLAN; ELIGIBILITY;
OUTREACH.
(a) General Background and Description.--A State child health
plan shall include a description, consistent with the
requirements of this title, of--
(1) the extent to which, and manner in which,
children in the State, including targeted low-income
children and other classes of children classified by
income and other relevant factors, currently have
creditable health coverage (as defined in section
2110(c)(2));
(2) current State efforts to provide or obtain
creditable health coverage for uncovered children,
including the steps the State is taking to identify and
enroll all uncovered children who are eligible to
participate in public health insurance programs and
health insurance programs that involve public-private
partnerships;
(3) how the plan is designed to be coordinated with
such efforts to increase coverage of children under
creditable health coverage;
(4) the child health assistance provided under the
plan for targeted low-income children, including the
proposed methods of delivery, and utilization control
systems;
(5) eligibility standards consistent with subsection
(b);
(6) outreach activities consistent with subsection
(c); and
(7) methods (including monitoring) used--
(A) to assure the quality and appropriateness
of care, particularly with respect to well-baby
care, well-child care, and immunizations
provided under the plan[, and];
(B) to assure access to covered services,
including emergency services and services
described in section 2103(c)(5)[.]; and
(C) to ensure that the State agency involved
is in compliance with subparagraphs (A), (B),
and (C) of section 1128K(b)(2).
(b) General Description of Eligibility Standards and
Methodology.--
(1) Eligibility standards.--
(A) In general.--The plan shall include a
description of the standards used to determine
the eligibility of targeted low-income children
for child health assistance under the plan.
Such standards may include (to the extent
consistent with this title) those relating to
the geographic areas to be served by the plan,
age, income and resources (including any
standards relating to spenddowns and
disposition of resources), residency,
disability status (so long as any standard
relating to such status does not restrict
eligibility), access to or coverage under other
health coverage, and duration of eligibility.
Such standards may not discriminate on the
basis of diagnosis.
(B) Limitations on eligibility standards.--
Such eligibility standards--
(i) shall, within any defined group
of covered targeted low-income
children, not cover such children with
higher family income without covering
children with a lower family income;
(ii) may not deny eligibility based
on a child having a preexisting medical
condition;
(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;
(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); and
(v) shall, beginning January 1, 2014,
use modified adjusted gross income and
household income (as defined in section
36B(d)(2) of the Internal Revenue Code
of 1986) to determine eligibility for
child health assistance under the State
child health plan or under any waiver
of such plan and for any other purpose
applicable under the plan or waiver for
which a determination of income is
required, including with respect to the
imposition of premiums and cost-
sharing, consistent with section
1902(e)(14).
(2) Methodology.--The plan shall include a
description of methods of establishing and continuing
eligibility and enrollment.
(3) Eligibility screening; coordination with other
health coverage programs.--The plan shall include a
description of procedures to be used to ensure--
(A) through both intake and followup
screening, that only targeted low-income
children are furnished child health assistance
under the State child health plan;
(B) that children found through the screening
to be eligible for medical assistance under the
State medicaid plan under title XIX are
enrolled for such assistance under such plan;
(C) that the insurance provided under the
State child health plan does not substitute for
coverage under group health plans;
(D) the provision of child health assistance
to targeted low-income children in the State
who are Indians (as defined in section 4(c) of
the Indian Health Care Improvement Act, 25
U.S.C. 1603(c)); and
(E) coordination with other public and
private programs providing creditable coverage
for low-income children.
(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 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.
(5) Nonentitlement.--Nothing in this title shall be
construed as providing an individual with an
entitlement to child health assistance under a State
child health plan.
(c) Outreach and Coordination.--A State child health plan
shall include a description of the procedures to be used by the
State to accomplish the following:
(1) Outreach.--Outreach (through community health
workers and others) to families of children likely to
be eligible for child health assistance under the plan
or under other public or private health coverage
programs to inform these families of the availability
of, and to assist them in enrolling their children in,
such a program.
(2) Coordination with other health insurance
programs.--Coordination of the administration of the
State program under this title with other public and
private health insurance programs.
(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.
* * * * * * *