PUBLIC LAW 109–171—FEB. 8, 2006
120 STAT. 111
Subchapter C—Miscellaneous SEC. 6081. MEDICAID TRANSFORMATION GRANTS.
(a) IN GENERAL.—Section 1903 of the Social Security Act (42 U.S.C. 1396b), as amended by sections 6037(a)(2) and 6043(b), is amended by adding at the end the following new subsection: ‘‘(z) MEDICAID TRANSFORMATION PAYMENTS.— ‘‘(1) IN GENERAL.—In addition to the payments provided under subsection (a), subject to paragraph (4), the Secretary shall provide for payments to States for the adoption of innovative methods to improve the effectiveness and efficiency in providing medical assistance under this title. ‘‘(2) PERMISSIBLE USES OF FUNDS.—The following are examples of innovative methods for which funds provided under this subsection may be used: ‘‘(A) Methods for reducing patient error rates through the implementation and use of electronic health records, electronic clinical decision support tools, or e-prescribing programs. ‘‘(B) Methods for improving rates of collection from estates of amounts owed under this title. ‘‘(C) Methods for reducing waste, fraud, and abuse under the program under this title, such as reducing improper payment rates as measured by annual payment error rate measurement (PERM) project rates. ‘‘(D) Implementation of a medication risk management program as part of a drug use review program under section 1927(g). ‘‘(E) Methods in reducing, in clinically appropriate ways, expenditures under this title for covered outpatient drugs, particularly in the categories of greatest drug utilization, by increasing the utilization of generic drugs through the use of education programs and other incentives to promote greater use of generic drugs. ‘‘(F) Methods for improving access to primary and specialty physician care for the uninsured using integrated university-based hospital and clinic systems. ‘‘(3) APPLICATION; TERMS AND CONDITIONS.— ‘‘(A) IN GENERAL.—No payments shall be made to a State under this subsection unless the State applies to the Secretary for such payments in a form, manner, and time specified by the Secretary. ‘‘(B) TERMS AND CONDITIONS.—Such payments are made under such terms and conditions consistent with this subsection as the Secretary prescribes. ‘‘(C) ANNUAL REPORT.—Payment to a State under this subsection is conditioned on the State submitting to the Secretary an annual report on the programs supported by such payment. Such report shall include information on— ‘‘(i) the specific uses of such payment; ‘‘(ii) an assessment of quality improvements and clinical outcomes under such programs; and ‘‘(iii) estimates of cost savings resulting from such programs. ‘‘(4) FUNDING.—
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