I 

113TH CONGRESS 

1ST SESSION H. R. 3659 

To amend title XIX of the Social Security Act to clarify policy with respect 

to collecting reimbursement from third-party payers for medical assistance paid under the Medicaid program, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 5, 2013 

Mr. BURGESS introduced the following bill; which was referred to the 

Committee on Energy and Commerce 

A BILL 

To amend title XIX of the Social Security Act to clarify 

policy with respect to collecting reimbursement from 

third-party payers for medical assistance paid under the 

Medicaid program, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. REMOVAL OF SPECIAL TREATMENT OF CER4 TAIN TYPES OF CARE AND PAYMENTS UNDER 

5 MEDICAID THIRD-PARTY LIABILITY RULES. 

6 Section 1902(a)(25) of the Social Security Act (42 

7 U.S.C. 1396a(a)(25)) is amended by striking subpara8 graphs (E) and (F). 


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1 SEC. 2. CLARIFICATION OF ROLE OF MCOS WITH RESPECT 

2 TO THIRD-PARTY LIABILITY. 

3 (a) IN GENERAL.—Section 1902(a)(25) of the Social 

4 Security Act (42 U.S.C. 1396a(a)(25)), as amended by 

5 section 1, is further amended by inserting, after subpara6 graph (D), the following: 

7 ‘‘(E) that, if the State contracts with a 

8 managed care entity pursuant to section 1932 

9 for the purpose of providing items and services 

10 under this title— 

11 ‘‘(i) such contract shall specify wheth12 er— 

13 ‘‘(I) the State is delegating to the 

14 managed care entity all or some of its 

15 right of recovery for an item or serv16 ice for which payment has been made 

17 under the State plan; and 

18 ‘‘(II) the State is transferring to 

19 the managed care entity all or some of 

20 the assignment to the State of any 

21 right of an individual or other entity 

22 to payment from a health insurer (in23 cluding self-insured plans, group 

24 health plans (as defined in section 

25 607(1) of the Employee Retirement 

26 Income Security Act of 1974), service 


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1 benefit plans, managed care organiza2 tions, pharmacy benefit managers, or 

3 other parties that are, by statute, con4 tract, or agreement, legally respon5 sible for payment of a claim for a 

6 health care item or service) for an 

7 item or service for which payment has 

8 been made under the State plan; and 

9 ‘‘(ii) if the State delegates its rights 

10 under clause (i)(I) or transfers assignment 

11 of rights under clause (i)(II), the State 

12 shall have in effect laws requiring such 

13 health insurers, as a condition of doing 

14 business in the State— 

15 ‘‘(I) to provide to such managed 

16 care entity, upon the request of such 

17 entity, the information described in 

18 subparagraph (I)(i); 

19 ‘‘(II) if a right of recovery was 

20 delegated under clause (i)(I), accept 

21 the authority of the managed care en22 tity to exercise such right; 

23 ‘‘(III) if an assignment of rights 

24 was transferred under clause (i)(II), 


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1 accept such transfer of assignment of 

2 rights; 

3 ‘‘(IV) respond to an inquiry 

4 made by such entity in the same man5 ner that the insurer would respond to 

6 an inquiry by a State under subpara7 graph (I)(iii); and 

8 ‘‘(V) agree not to deny a claim 

9 submitted by a managed care entity 

10 for which the State has delegated or 

11 transferred rights under clause (i) in 

12 the same manner that the insurer 

13 may not deny a claim submitted by a 

14 State under subparagraph (I)(iv);’’. 

15 (b) TREATMENT OF COLLECTED AMOUNTS.—Section 

16 1903(d)(2)(B) of the Social Security Act (42 U.S.C. 

17 1396b(d)(2)(B)) is amended by adding at the end the fol18 lowing: ‘‘For purposes of this subparagraph, reimburse19 ments made by a third party to managed care entities pur20 suant to section 1902(a)(25)(E) shall be treated in the 

21 same manner as reimbursements made to a State under 

22 the previous sentence.’’. 


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1 SEC. 3. REQUIRING COORDINATION OF BENEFICIARY IN2 FORMATION WITH RESPECT TO THIRD-PARTY 

3 LIABILITY. 

4 Section 1902(a)(25) of the Social Security Act (42 

5 U.S.C. 1396a(a)(25)), as amended by section 2, is further 

6 amended by inserting, after subparagraph (E), the fol7 lowing: 

8 ‘‘(F) that, if the State contracts with a 

9 health insurer (as defined for purposes of sub10 paragraph (E)) for the purposes of providing 

11 items and services under this title such contract 

12 shall require that— 

13 ‘‘(i) if such insurer contracts with a 

14 pharmacy benefit manager to manage ben15 efits under the health plan offered by such 

16 insurer, such contract shall require that 

17 the pharmacy benefit manager regularly 

18 report to the State (or, as applicable, to an 

19 authorized contractor or agent of the 

20 State) any data obtained by the pharmacy 

21 benefit manager that is relevant, as deter22 mined by the State, to assisting the State 

23 in determining whether such a health in24 surer is, by statute, contract, or agree25 ment, legally responsible for payment of a 


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1 claim for a health care item or service 

2 available under the plan; and 

3 ‘‘(ii) such insurer cooperates (includ4 ing by granting requests of the State for 

5 information, or for permission to utilize in6 formation, that is relevant to determining 

7 whether such a health insurer is, by stat8 ute, contract, or agreement, legally respon9 sible for payment of a claim for a health 

10 care item or service available under the 

11 plan, regardless of the State in which the 

12 insurer is licensed) with the State Medicaid 

13 plan (including any State Medicaid agency 

14 or authorized agent or contractor of such 

15 program or entity) for the proper coordina16 tion of benefits offered through the plan of 

17 such insurer and medical assistance under 

18 the State plan to effectuate the principle of 

19 the program under this title being the 

20 payer of last resort;’’. 

21 SEC. 4. DEVELOPMENT OF MODEL UNIFORM FIELDS FOR 

22 STATES TO REPORT THIRD-PARTY INFORMA23 TION. 

24 Not later than January 1, 2015, the Secretary of 

25 Health and Human Services shall, in consultation with the 


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1 States, develop and make available to the States a model 

2 uniform reporting field that States may use for purposes 

3 of reporting to the Secretary within CMS Form 64 (or 

4 any successor form) information identifying third-party 

5 health insurers (including self-insured plans, group health 

6 plans (as defined in section 607(1) of the Employee Re7 tirement Income Security Act of 1974), service benefit 

8 plans, managed care organizations, pharmacy benefit 

9 managers, or other parties that are, by statute, contract, 

10 or agreement, legally responsible for payment of a claim 

11 for a health care item or service) and other relevant infor12 mation for ascertaining the legal responsibility of such 

13 third parties to pay for care and services available under 

14 the State plan under title XIX of the Social Security Act 

15 (42 U.S.C. 1396 et seq.). 

16 SEC. 5. STATE INCENTIVE TO PURSUE THIRD-PARTY LI17 ABILITY FOR NEWLY ELIGIBLES. 

18 Section 1903(d)(2)(B) of the Social Security Act (42 

19 U.S.C. 1396b(d)(2)(B)), as amended by section 2, is 

20 amended by adding at the end the following: ‘‘In the case 

21 of expenditures for medical assistance provided during 

22 2014 and subsequent years for newly eligible individuals 

23 (as such term is defined in section 1905(y)) described in 

24 subclause (VIII) of section 1902(a)(10)(A)(i), in deter25 mining the amount, if any, of overpayment under this subVerDate Mar 15 2010 02:01 Dec 06, 2013 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3659.IH H3659

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1 paragraph with respect to such services, the Secretary 

2 shall apply the Federal medical assistance percentage for 

3 the State under section 1905(b), notwithstanding the ap4 plication of section 1905(y).’’. 

5 SEC. 6. PENALTY FOR NON-COMPLIANCE. 

6 Subject to section 6(b), for any fiscal year beginning 

7 on or after the date that is 1 year after the effective date 

8 under section 6, in the case of a State that fails to comply 

9 with the additional requirements for the State plan for 

10 medical assistance under title XIX of the Social Security 

11 Act that are imposed by the amendments made by this 

12 Act, the Secretary of Health and Human Services shall 

13 reduce the Federal medical assistance percentage (as de14 fined in section 1905(b) of the Social Security Act (42 

15 U.S.C. 1396d(b)) for such State by a percentage point for 

16 such fiscal year during which such requirements are not 

17 met. To the extent that a State fails to comply with such 

18 additional requirements for consecutive fiscal years, the 

19 reductions under the previous sentence shall be cumulative 

20 for each such subsequent fiscal year. 

21 SEC. 7. EFFECTIVE DATE. 

22 (a) IN GENERAL.—Except as provided in subsection 

23 (b), this Act (other than section 4) and the amendments 

24 made by this Act shall take effect on the date of enactment 


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1 of this Act and shall apply to medical assistance provided 

2 on or after such date. 

3 (b) EXCEPTION IF STATE LEGISLATION RE4 QUIRED.—In the case of a State plan for medical assist5 ance under title XIX of the Social Security Act that the 

6 Secretary of Health and Human Services determines re7 quires State legislation (other than legislation appro8 priating funds) in order for the plan to meet the additional 

9 requirement imposed by the amendments made under this 

10 section, the State plan shall not be regarded as failing to 

11 comply with the requirements of such title solely on the 

12 basis of its failure to meet this additional requirement be13 fore the first day of the first calendar quarter beginning 

14 after the close of the first regular session of the State leg15 islature that begins after the date of the enactment of this 

16 Act. For purposes of the previous sentence, in the case 

17 of a State that has a 2-year legislative session, each year 

18 of such session shall be deemed to be a separate regular 

19 session of the State legislature. 

Æ 


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