SEC. 1757. MEDICAID AND CHIP EXCLUSION FROM PARTICIPATION RELATING TO CERTAIN OWNERSHIP, CONTROL, AND MANAGEMENT AFFILIATIONS.

[a] State Plan Requirement- Section- 1902[a] of the Social Security Act [42 U.S.C. 1396a[a]], as amended by sections 1631[b][1], 1703, and 1753, is further amended--

[1] in paragraph [75], by striking at the end 'and';

[2] in paragraph [76], by striking at the end the period and inserting '; and'; and

[3] by inserting after paragraph [76] the following new paragraph:

'[77] provide that the State agency described in paragraph [9] exclude, with respect to a period, any individual or entity from participation in the program under the State plan if such individual or entity owns, controls, or manages an entity that [or if such entity is owned, controlled, or managed by an individual or entity that]--

'[A] has unpaid overpayments under this title during such period determined by the Secretary or the State agency to be delinquent;

'[B] is suspended or excluded from participation under or whose participation is terminated under this title during such period; or

'[C] is affiliated with an individual or entity that has been suspended or excluded from participation under this title or whose participation is terminated under this title during such period.'.

[b] Child Health Plan Requirement- Section- 2107[e][1][A] of such Act [42 U.S.C. 1397gg[e][1][A]], as amended by section 1756[b], is amended by striking 'section 1902[a][39]' and inserting 'sections 1902[a][39] and 1902[a][77]'.

[c] Effective Date-

[1] Except as provided in paragraph [2], the amendments made by this section shall apply to services furnished on or after January 1, 2011, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date.

[2] In the case of a State plan for medical assistance under title XIX of the Social Security Act or a child health plan under title XXI of such Act which the Secretary of Health and Human Services determines requires State legislation [other than legislation appropriating funds] in order for the plan to meet the additional requirement imposed by the amendments made by this section, the State plan or child health plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet this additional requirement before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.