Sec. 201. Medicaid third party liability provisions

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Section 202(c) of the Bipartisan Budget Act of 2013 ( Public Law 113–67 ; 127 Stat. 1177; 42 U.S.C. 1396a note), as amended by section 211 of the Protecting Access to Medicare Act of 2014 ( Public Law 113–93 ; 128 Stat. 1047; 42 U.S.C. 1396a note) and section 220 of the Medicare Access and CHIP Reauthorization Act of 2015 ( Public Law 114–10 ), is amended by striking 2017 and inserting 2019 . The amendment made by subparagraph

(A)shall take effect on September 30, 2017, and shall apply with respect to claims generated or filed after such date. Section 1902 of the Social Security Act ( 42 U.S.C. 1396a ) is amended by adding at the end the following new subsection: For purposes of subsection (a)(25) and section 1903(d)(2)(B): The term responsible third party means a health insurer, an accountable care organization, or any other party that is, by statute, contract, or agreement, legally responsible for payment of a claim for a health care item or service. Such term does not include a party if payment by such party has been made or can reasonably be expected to be made under a workmen’s compensation law or plan of the United States or a State, or under an automobile or liability insurance policy or plan (including a self-insured plan), or under no fault insurance. The term health insurer means a group health plan, as defined in section 607(1) of the Employee Retirement Income Security Act of 1974, a self-insured plan, a fully-insured plan , a service benefit plan, a medicaid managed care plan under section 1903(m) or 1932, a pharmacy benefit manager, and any other health plan determined appropriate by the Secretary. . Section 1902(a)(25) of the Social Security Act ( 42 U.S.C. 1396a(a)(25) ) is amended— in subparagraph (A), in the matter preceding clause (i), by striking third parties and all that follows through item or service) and inserting responsible third parties ; in subparagraph (G), by striking health insurer and all that follows through item or service) and inserting responsible third party ; in subparagraph (I), in the matter preceding clause (i), by striking health insurers and all that follows through item or service and inserting responsible third parties ; and by inserting responsible before third each place it appears in subparagraphs (A)(i), (A)(ii), (C), (D), and (H). Section 1902(a)(25) of the Social Security Act ( 42 U.S.C. 1396a(a)(25) ), as amended by section 202(c) of the Bipartisan Budget Act of 2013 (after application of paragraph (1)), is amended by striking subparagraphs

(E)and (F). Section 1902(a)(25) of the Social Security Act ( 42 U.S.C. 1396a(a)(25) ), as amended by paragraph (3), is further amended by inserting after subparagraph

(D)the following new subparagraphs: that, in the case of a State that provides medical assistance under this title through a contract with a health insurer, such contract shall specify whether the State is— delegating to such insurer all or some of its right of recovery from a responsible third party for an item or service for which payment has been made under the State plan (or under a waiver of the plan); and transferring to such insurer all or some of the assignment to the State of any right of an individual or other entity to payment from a responsible third party for an item or service for which payment has been made under the State plan (or under a waiver of the plan); that, in the case of a State that elects an option described in clause

(i)or

(ii)of subparagraph

(E)with respect to a health insurer, the State shall provide assurances to the Secretary that the State laws referred to in subparagraph

(I)confer to the health insurer the authority of the State with respect to the requirements specified in clauses

(i)through

(iv)of such subparagraph; . Section 1903(d)(2)(B) of the Social Security Act ( 42 U.S.C. 1396b(d)(2)(B) ) is amended by adding at the end the following: For purposes of this subparagraph, reimbursements made by a responsible third party to health insurers pursuant to section 1902(a)(25)(E) shall be treated in the same manner as reimbursements made to a State under the previous sentence. . Section 1902(a)(25)(I) of the Social Security Act ( 42 U.S.C. 1396a(a)(25)(I) ) is amended— in clause (i), by striking medical assistance under the State plan and inserting medical assistance under a State plan (or under a waiver of the plan) ; by striking clause

(ii)and inserting the following new clause: accept— any State’s right of recovery and the assignment to any 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 respective State’s plan (or under a waiver of the plan); and as a valid authorization of the responsible third party for the furnishing of an item or service to an individual eligible to receive medical assistance under this title, an authorization made on behalf of such individual under the State plan (or under a waiver of such plan) for the furnishing of such item or service to such individual; ; in clause (iii)— by striking respond to and inserting not later than 60 days after receiving ; and by striking ; and at the end and inserting , respond to such inquiry; and ; and in clause (iv), by inserting a failure to obtain a prior authorization, after claim form, . Section 1903(d)(2)(B) of the Social Security Act ( 42 U.S.C. 1396b(d)(2)(B) ), as amended by paragraph (4)(B), is further amended by adding at the end the following: In the case of expenditures for medical assistance provided during 2017 and subsequent years for individuals described in subclause

(VIII)of section 1902(a)(10)(A)(i), in determining the amount, if any, of overpayment under this subparagraph with respect to such medical assistance, the Secretary shall apply the Federal medical assistance percentage for the State under section 1905(b), notwithstanding the application of section 1905(y). . Section 1903 of the Social Security Act ( 42 U.S.C. 1396b ) is amended by inserting after subsection

(m)the following new subsection: For any year beginning after 2020 (or a sooner year as provided in paragraph (2)), if a State fails to comply with the requirements of section 1902(a)(25) with respect to each calendar quarter in such year, the Secretary may reduce the Federal medical assistance percentage by 0.1 percentage point for calendar quarters in each subsequent year in which the State fails to so comply (and cumulatively for a failure to so comply for a period of consecutive years). The Secretary may apply paragraph (1)— for any year beginning after 2018, if a State fails to comply with the requirements of section 1902(a)(25) with respect to payment for items and services furnished to individuals described in subclause

(VIII)of section 1902(a)(10)(A)(i) or non-expansion individuals; and for any year beginning after 2019, if a State fails to comply with the requirements of section 1902(a)(25) with respect to payment for items and services furnished to individuals described in subdivision (i), (iii), or

(iv)of section 1905(a). For purposes of this subsection, the term non-expansion individual means, with respect to a State for a month, an individual who is— eligible for medical assistance for items or services under this title and enrolled under the State plan (or a waiver of such plan) under this title for the month; not under 19 years of age; not 65 years of age or older; and not eligible for medical assistance under this title on the basis of being blind or disabled. . Section 2107(e)(1) of the Social Security Act ( 42 U.S.C. 1397gg(e)(1) ) is amended— by redesignating subparagraphs

(B)through

(R)as subparagraphs

(C)through (S), respectively; and by inserting after subparagraph

(A)the following new subparagraph: Section 1902(a)(25) (relating to third party liability). . Section 1902(a)(25)(I)(i) of the Social Security Act ( 42 U.S.C. 1396a(a)(25)(I)(i) ), as amended by subsection (a)(5), is further amended— by striking (and, at State option, child and inserting and child ; and by striking title XXI) and inserting title XXI . Section 1936 of the Social Security Act ( 42 U.S.C. 1396u–6 ) is amended— in subsection (b)(4), by striking and quality of care and inserting , quality of care, and the liability of responsible third parties (as defined in section 1902(nn)) ; and by adding at the end the following new subsection: With respect to education or training activities carried out pursuant to subsection (b)(4) with respect to the liability of responsible third parties (as defined in section 1902(nn) for payment for items and services furnished under State plans (or under waivers of such plans)) under this title, the Secretary shall— publish (and update on an annual basis) on the public Internet website of the Centers for Medicare & Medicaid Services a dedicated Internet page containing best practices to be used in assessing such liability; monitor efforts to assess such liability and analyze the challenges posed by that assessment; distribute to State agencies administering the State plan under this title information related to such efforts and challenges; and provide guidance to such State agencies with respect to State oversight of efforts under a medicaid managed care plan under section 1903(m) or 1932 to assess such liability. . Not later than January 1, 2019, the Secretary of Health and Human Services shall, in consultation with the States, develop and make available to the States a model uniform reporting field that States may use for purposes of reporting to the Secretary through the Transformed Medicaid Statistical Information System (T–MSIS) (or a successor system), or within CMS Form 64 (or any successor form), information identifying responsible third parties (as defined in subsection

(nn)of section 1902 of the Social Security Act ( 42 U.S.C. 1396a ), as added by subsection (a)(2)(A)) and other relevant information for ascertaining the legal responsibility of such third parties to pay for care and services available under the State plan (or under a waiver of the plan) under title XIX of the Social Security Act ( 42 U.S.C. 1396 et seq.). Except as provided in paragraph (2), this section and the amendments made by this section (other than as specified in the preceding provisions of this section) shall take effect on October 1, 2019, and shall apply to medical assistance or child health assistance provided on or after such date. In the case of a State plan for medical assistance under title XIX of the Social Security Act ( 42 U.S.C. 1396 et seq.), or a State child health plan for child health assistance under title XXI of such Act ( 42 U.S.C. 1397aa et seq.), that 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 under this section, such 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.

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