SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Transitional Federal Medical 
Assistance Percentage Act''.

SEC. 2. EXTENSION OF ARRA INCREASE IN FMAP.

    Section 5001 of ARRA is amended--
            (1) in subsection (a)(3), by striking ``first calendar 
        quarter'' and inserting ``first 3 calendar quarters'';
            (2) in subsection (b)(2), by inserting before the period at 
        the end the following: ``and such paragraph shall not apply to 
        calendar quarters beginning on or after October 1, 2010'';
            (3) in subsection (d), by inserting ``ending before October 
        1, 2010'' after ``entire fiscal years'' and after ``with 
        respect to fiscal years'';
            (4) in subsection (g)(1), by striking ``September 30, 
        2011'' and inserting ``December 31, 2011''; and
            (5) in subsection (h)(3), by striking ``December 31, 2010'' 
        and inserting ``June 30, 2011''.

SEC. 3. ARRA TRANSITIONAL ASSISTANCE PERIOD.

    For each fiscal quarter occurring during the period beginning on 
July 1, 2011, and ending on December 31, 2013 (referred to in this Act 
as the ``ARRA transitional assistance period''), a State's FMAP shall 
be equal to the sum of--
            (1) the adjusted base FMAP (as determined under section 
        4(a)(1));
            (2) the general FMAP adjustment (as determined under 
        section 4(a)(2)); and
            (3) the unemployment FMAP adjustment (as determined under 
        section 4(a)(3)).

SEC. 4. ADJUSTMENTS TO FEDERAL MEDICAL ASSISTANCE PERCENTAGE.

    (a) Determination of Adjusted FMAP.--
            (1) Adjusted base fmap.--
                    (A) In general.--Subject to subparagraph (B), the 
                adjusted base FMAP is determined as follows:
                            (i) For the fourth quarter of fiscal year 
                        2011, the FMAP that would have applied to the 
                        State under section 5001(a) of ARRA (assuming 
                        that such section applied) for such fiscal 
                        quarter minus 2 percentage points.
                            (ii) For any subsequent fiscal quarter 
                        occurring during the ARRA transitional 
                        assistance period, the FMAP as determined under 
                        this paragraph for the preceding fiscal quarter 
                        minus 2 percentage points.
                    (B) Elimination of negative adjustment.--If the 
                adjusted base FMAP applicable to a State under this 
                paragraph for any fiscal quarter occurring during the 
                ARRA transitional assistance period would be less than 
                the FMAP determined for the State for such quarter 
                without regard to this paragraph, this paragraph shall 
                not apply to such State.
            (2) General fmap adjustment.--The general FMAP adjustment 
        shall be equal to the following:
                    (A) For the fourth quarter of fiscal year 2011, 5.7 
                percentage points.
                    (B) For the first quarter of fiscal year 2012, 4.95 
                percentage points.
                    (C) For the second quarter of fiscal year 2012, 
                3.95 percentage points.
                    (D) For the third quarter of fiscal year 2012, 2.7 
                percentage points.
                    (E) For the fourth quarter of fiscal year 2012, 1.2 
                percentage points.
                    (F) For any subsequent fiscal quarter occurring 
                during the ARRA transitional assistance period, 0.2 
                percentage points.
            (3) Unemployment fmap adjustment.--
                    (A) In general.--Subject to subparagraphs (C) and 
                (D), the unemployment FMAP adjustment shall be equal to 
                the increase in the State's FMAP that would have 
                applied to the State under section 5001(c) of ARRA 
                (assuming that such section applied) for such fiscal 
                quarter minus the applicable reduction amount (as 
                described under subparagraph (B)).
                    (B) Applicable reduction amount.--For purposes of 
                subparagraph (A), the applicable reduction amount shall 
                be equal to the following:
                            (i) For the fourth fiscal quarter of fiscal 
                        year 2011, 0.20 percentage points.
                            (ii) For any subsequent fiscal quarter 
                        occurring during the ARRA transitional 
                        assistance period, the sum of--
                                    (I) the applicable reduction amount 
                                for the preceding fiscal quarter; and
                                    (II) 0.05 percentage points.
                    (C) Elimination of negative adjustment.--If the 
                unemployment FMAP adjustment applicable to a State 
                under this paragraph for any fiscal quarter during the 
                ARRA transitional assistance period would be less than 
                zero, this paragraph shall not apply to such State.
                    (D) Special rule.--
                            (i) In general.--For purposes of 
                        subparagraph (A), with respect to the 
                        computation of the state unemployment increase 
                        percentage (as described under section 
                        5001(c)(4) of ARRA) for the last 2 fiscal 
                        quarters of the ARRA transitional assistance 
                        period, the most recent previous 3-consecutive-
                        month period (as described under section 
                        5001(c)(4)(A)(i) of ARRA) shall be the 3-
                        consecutive-month period beginning with 
                        December 2012, or, if it results in a higher 
                        applicable percent under section 5001(c)(3) of 
                        ARRA, the 3-consecutive-month period beginning 
                        with January 2013.
                            (ii) Repeal of special rule under arra for 
                        last 2 calendar quarters of the recession 
                        adjustment period.--Section 5001(c)(4) of ARRA 
                        is amended by striking subparagraph (C) and 
                        inserting the following:
                    ``(C) Special rule.--With respect to the first 2 
                calendar quarters of the recession adjustment period, 
                the most recent previous 3-consecutive-month period 
                described in subparagraph (A)(i) shall be the 3-
                consecutive-month period beginning with October 
                2008.''.
    (b) Scope of Application.--The adjustments in the FMAP for a State 
under this section shall apply for purposes of title XIX of the Social 
Security Act and shall not apply with respect to--
            (1) disproportionate share hospital payments described in 
        section 1923 of such Act (42 U.S.C. 1396r-4);
            (2) payments under title IV of such Act (42 U.S.C. 601 et 
        seq.) (except that the increases under paragraphs (1) and (2) 
        of subsection (a) shall apply to payments under part E of title 
        IV of such Act (42 U.S.C. 670 et seq.) and, for purposes of the 
        application of this section to the District of Columbia, 
        payments under such part shall be deemed to be made on the 
        basis of the FMAP applied with respect to such District for 
        purposes of title XIX and as increased under subsection 
        (a)(2));
            (3) any payments under title XXI of such Act (42 U.S.C. 
        1397aa et seq.);
            (4) any payments under title XIX of such Act that are based 
        on the enhanced FMAP described in section 2105(b) of such Act 
        (42 U.S.C. 1397ee(b)); or
            (5) any payments under title XIX of such Act that are 
        attributable to expenditures for medical assistance provided to 
        individuals made eligible under a State plan under title XIX of 
        the Social Security Act (including under any waiver under such 
        title or under section 1115 of such Act (42 U.S.C. 1315)) 
        because of income standards (expressed as a percentage of the 
        poverty line) for eligibility for medical assistance that are 
        higher than the income standards (as so expressed) for such 
        eligibility as in effect on July 1, 2008, (including as such 
        standards were proposed to be in effect under a State law 
        enacted but not effective as of such date or a State plan 
        amendment or waiver request under title XIX of such Act that 
        was pending approval on such date).
    (c) State Ineligibility; Limitation; Special Rules.--
            (1) Maintenance of eligibility requirements.--
                    (A) In general.--Subject to subparagraph (B) and 
                (C), a State is not eligible for an increase in its 
                FMAP under subsection (a) if eligibility standards, 
                methodologies, or procedures under its State plan under 
                title XIX of the Social Security Act (including any 
                waiver under such title or under section 1115 of such 
                Act (42 U.S.C. 1315)) are more restrictive than the 
                eligibility standards, methodologies, or procedures, 
                respectively, under such plan (or waiver) as in effect 
                on July 1, 2008.
                    (B) State reinstatement of eligibility permitted.--
                Subject to subparagraph (C), a State that has 
                restricted eligibility standards, methodologies, or 
                procedures under its State plan under title XIX of the 
                Social Security Act (including any waiver under such 
                title or under section 1115 of such Act (42 U.S.C. 
                1315)) after July 1, 2008, is no longer ineligible 
                under subparagraph (A) beginning with the first 
                calendar quarter in which the State has reinstated 
                eligibility standards, methodologies, or procedures 
                that are no more restrictive than the eligibility 
                standards, methodologies, or procedures, respectively, 
                under such plan (or waiver) as in effect on July 1, 
                2008.
                    (C) Special rules.--A State shall not be ineligible 
                under subparagraph (A)--
                            (i) for the fiscal quarters before October 
                        1, 2011, on the basis of a restriction that was 
                        applied after July 1, 2008, and before the date 
                        of the enactment of this Act, if the State 
                        prior to October 1, 2011, has reinstated 
                        eligibility standards, methodologies, or 
                        procedures that are no more restrictive than 
                        the eligibility standards, methodologies, or 
                        procedures, respectively, under such plan (or 
                        waiver) as in effect on July 1, 2008; or
                            (ii) on the basis of a restriction that was 
                        directed to be made under State law as in 
                        effect on July 1, 2008, and would have been in 
                        effect as of such date, but for a delay in the 
                        effective date of a waiver under section 1115 
                        of such Act with respect to such restriction.
            (2) Compliance with prompt pay requirements.--
                    (A) Application to practitioners.--
                            (i) In general.--Subject to the succeeding 
                        provisions of this subparagraph, no State shall 
                        be eligible for an increased FMAP rate as 
                        provided under this section for any claim 
                        received by a State from a practitioner subject 
                        to the terms of section 1902(a)(37)(A) of the 
                        Social Security Act (42 U.S.C. 1396a(a)(37)(A)) 
                        for such days during any period in which that 
                        State has failed to pay claims in accordance 
                        with such section as applied under title XIX of 
                        such Act.
                            (ii) Reporting requirement.--Each State 
                        shall report to the Secretary, on a quarterly 
                        basis, its compliance with the requirements of 
                        clause (i) as such requirements pertain to 
                        claims made for covered services during each 
                        month of the preceding quarter.
                            (iii) Waiver authority.--The Secretary may 
                        waive the application of clause (i) to a State, 
                        or the reporting requirement imposed under 
                        clause (ii), during any period in which there 
                        are exigent circumstances, including natural 
                        disasters, that prevent the timely processing 
                        of claims or the submission of such a report.
                            (iv) Application to claims.--Clauses (i) 
                        and (ii) shall only apply to claims made for 
                        covered services after the date of enactment of 
                        this Act.
                    (B) Application to nursing facilities and 
                hospitals.--The provisions of subparagraph (A) shall 
                apply with respect to a nursing facility or hospital, 
                insofar as it is paid under title XIX of the Social 
                Security Act on the basis of submission of claims, in 
                the same or similar manner (but within the same 
                timeframe) as such provisions apply to practitioners 
                described in such subparagraph.
            (3) State's application toward rainy day fund.--A State is 
        not eligible for an increase in its FMAP under paragraphs (2) 
        or (3) of subsection (a) if any amounts attributable (directly 
        or indirectly) to such increase are deposited or credited into 
        any reserve or rainy day fund of the State.
            (4) No waiver authority.--Except as provided in paragraph 
        (2)(A)(iii), the Secretary may not waive the application of 
        this subsection or subsection (d) under section 1115 of the 
        Social Security Act or otherwise.
            (5) Limitation of fmap to 100 percent.--In no case shall an 
        increase in FMAP under this section result in an FMAP that 
        exceeds 100 percent.
    (d) Requirements.--
            (1) State reports.--Each State that is paid additional 
        Federal funds as a result of this section shall, not later than 
        September 30, 2014, submit a report to the Secretary, in such 
        form and such manner as the Secretary shall determine, 
        regarding how the additional Federal funds were expended.
            (2) Additional requirement for certain states.--In the case 
        of a State that requires political subdivisions within the 
        State to contribute toward the non-Federal share of 
        expenditures under the State Medicaid plan required under 
        section 1902(a)(2) of the Social Security Act (42 U.S.C. 
        1396a(a)(2)), the State is not eligible for an increase in its 
        FMAP under paragraphs (2) or (3) of subsection (a) if it 
        requires that such political subdivisions pay for quarters 
        during the ARRA transitional assistance period a greater 
        percentage of the non-Federal share of such expenditures, or a 
        greater percentage of the non-Federal share of payments under 
        section 1923, than the respective percentage that would have 
        been required by the State under such plan on September 30, 
        2008, prior to application of this section.
    (e) Definitions.--In this Act, except as otherwise provided:
            (1) ARRA.--The term ``ARRA'' means the American Recovery 
        and Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 140).
            (2) FMAP.--The term ``FMAP''' means the Federal medical 
        assistance percentage, as defined in section 1905(b) of the 
        Social Security Act (42 U.S.C. 1396d(b)), as determined without 
        regard to this section except as otherwise specified.
            (3) Poverty line.--The term ``poverty line'' has the 
        meaning given such term in section 673(2) of the Community 
        Services Block Grant Act (42 U.S.C. 9902(2)), including any 
        revision required by such section.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (5) State.--The term ``State'' has the meaning given such 
        term in section 1101(a)(1) of the Social Security Act (42 
        U.S.C. 1301(a)(1)) for purposes of title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.).
    (f) Sunset.--This section shall not apply to items and services 
furnished after the end of the ARRA transitional assistance period.
Transitional Federal Medical Assistance Percentage Act - Amends the American Recovery and Reinvestment Act of 2009 to extend the increase in the federal medical assistance percentage (FMAP) under title XIX (Medicaid) of the Social Security Act. Extends the entire recession adjustment period from December 31, 2010, through June 30, 2011.

Provides for adjusted FMAP percentage rates during a transitional assistance period from July 1, 2011, through December 31, 2013.

Prescribes formulae for determining the adjusted FMAP through FY2012 and subsequent fiscal year quarters.
To provide adjusted Federal medical assistance percentage rates during a transitional assistance period.