H. R. 2642—68 
(and the results of such activities) funded under paragraph 
(1) to reduce waste, fraud, and abuse in the Medicaid program 
under title XIX of the Social Security Act during the previous 
12 month period, including the amount of funds appropriated 
under such paragraph for each such activity and an estimate 
of the savings to the Medicaid program resulting from each 
such activity. 
(c) STUDY AND REPORTS TO CONGRESS.— 
(1) SECRETARIAL REPORT IDENTIFYING PROBLEMS.—Not later 
than January 1, 2009, the Secretary of Health and Human 
Services shall submit to the Committee on Energy and Com-
merce of the House of Representatives and the Committee 
on Finance of the Senate a report that— 
(A) outlines the specific problems the Medicaid regula-
tions referred to in the amendments made by paragraphs 
(1) and (2) of subsection (a) were intended to address; 
(B) details how these regulations were designed to 
address these specific problems; and 
(C) cites the legal authority for such regulations. 
(2) INDEPENDENT
COMPREHENSIVE
STUDY
AND
REPORT.— 
(A) IN GENERAL.—Not later than January 1, 2009, the 
Secretary of Health and Human Services shall enter into 
a contract with an independent organization for the purpose 
of— 
(i) producing a comprehensive report on the preva-
lence of the problems outlined in the report submitted 
under paragraph (1); 
(ii) identifying strategies in existence to address 
these problems; and 
(iii) assessing the impact of each regulation 
referred to in such paragraph on each State and the 
District of Columbia. 
(B) ADDITIONAL MATTER.—The report under subpara-
graph (A) shall also include— 
(i) an identification of which claims for items and 
services (including administrative activities) under title 
XIX of the Social Security Act are not processed 
through systems described in section 1903(r) of such 
Act; 
(ii) an examination of the reasons why these claims 
for such items and services are not processed through 
such systems; and 
(iii) recommendations on actions by the Federal 
government and the States that can make claims for 
such items and services more accurate and complete 
consistent with such title. 
(C) DEADLINE.—The report under subparagraph (A) 
shall be submitted to the Committee on Energy and Com-
merce of the House of Representatives and the Committee 
on Finance of the Senate not later than September 1, 
2009. 
(D) COOPERATION
OF
STATES.—If the Secretary of 
Health and Human Services determines that a State or 
the District of Columbia has not cooperated with the inde-
pendent organization for purposes of the report under this 
paragraph, the Secretary shall reduce the amount paid 
to the State or District under section 1903(a) of the Social
H. R. 2642—69 
Security Act (42 U.S.C. 1396b(a)) by $25,000 for each day 
on which the Secretary determines such State or District 
has not so cooperated. Such reduction shall be made 
through a process that permits the State or District to 
challenge the Secretary’s determination. 
(3) FUNDING.— 
(A) IN GENERAL.—Out of any money in the Treasury 
of the United States not otherwise appropriated, there 
are appropriated to the Secretary without further appro-
priation, $5,000,000 to carry out this subsection. 
(B) AVAILABILITY; AMOUNTS
IN
ADDITION
TO
OTHER 
AMOUNTS APPROPRIATED FOR SUCH ACTIVITIES.—Amounts 
appropriated pursuant to subparagraph (A) shall— 
(i) remain available until expended; and 
(ii) be in addition to any other amounts appro-
priated or made available to the Secretary of Health 
and Human Services with respect to the Medicaid pro-
gram. 
(d) ASSET VERIFICATION THROUGH ACCESS
TO INFORMATION 
HELD BY FINANCIAL INSTITUTIONS.— 
(1) ADDITION OF AUTHORITY.—Title XIX of the Social Secu-
rity Act is amended by inserting after section 1939 the following 
new section: 
‘‘ASSET VERIFICATION THROUGH ACCESS TO INFORMATION HELD BY 
FINANCIAL INSTITUTIONS 
‘‘SEC. 1940. (a) IMPLEMENTATION.— 
‘‘(1) IN GENERAL.—Subject to the provisions of this section, 
each State shall implement an asset verification program 
described in subsection (b), for purposes of determining or 
redetermining the eligibility of an individual for medical assist-
ance under the State plan under this title. 
‘‘(2) PLAN SUBMITTAL.—In order to meet the requirement 
of paragraph (1), each State shall— 
‘‘(A) submit not later than a deadline specified by the 
Secretary consistent with paragraph (3), a State plan 
amendment under this title that describes how the State 
intends to implement the asset verification program; and 
‘‘(B) provide for implementation of such program for 
eligibility determinations and redeterminations made on 
or after 6 months after the deadline established for sub-
mittal of such plan amendment. 
‘‘(3) PHASE-IN.— 
‘‘(A) IN GENERAL.— 
‘‘(i) 
IMPLEMENTATION
IN
CURRENT
ASSET 
VERIFICATION
DEMO
STATES.—The Secretary shall 
require those States specified in subparagraph (C) (to 
which an asset verification program has been applied 
before the date of the enactment of this section) to 
implement an asset verification program under this 
subsection by the end of fiscal year 2009. 
‘‘(ii) IMPLEMENTATION IN OTHER STATES.—The Sec-
retary shall require other States to submit and imple-
ment an asset verification program under this sub-
section in such manner as is designed to result in 
the application of such programs, in the aggregate
H. R. 2642—70 
for all such other States, to enrollment of approxi-
mately, but not less than, the following percentage 
of enrollees, in the aggregate for all such other States, 
by the end of the fiscal year involved: 
‘‘(I) 12.5 percent by the end of fiscal year 2009. 
‘‘(II) 25 percent by the end of fiscal year 2010. 
‘‘(III) 50 percent by the end of fiscal year 2011. 
‘‘(IV) 75 percent by the end of fiscal year 2012. 
‘‘(V) 100 percent by the end of fiscal year 2013. 
‘‘(B) 
CONSIDERATION.—In 
selecting 
States 
under 
subparagraph (A)(ii), the Secretary shall consult with the 
States involved and take into account the feasibility of 
implementing asset verification programs in each such 
State. 
‘‘(C) STATES SPECIFIED.—The States specified in this 
subparagraph are California, New York, and New Jersey. 
‘‘(D) CONSTRUCTION.—Nothing in subparagraph (A)(ii) 
shall be construed as preventing a State from requesting, 
and the Secretary from approving, the implementation of 
an asset verification program in advance of the deadline 
otherwise established under such subparagraph. 
‘‘(4) EXEMPTION OF TERRITORIES.—This section shall only 
apply to the 50 States and the District of Columbia. 
‘‘(b) ASSET VERIFICATION PROGRAM.— 
‘‘(1) IN GENERAL.—For purposes of this section, an asset 
verification program means a program described in paragraph 
(2) under which a State— 
‘‘(A) requires each applicant for, or recipient of, medical 
assistance under the State plan under this title on the 
basis of being aged, blind, or disabled to provide authoriza-
tion by such applicant or recipient (and any other person 
whose resources are required by law to be disclosed to 
determine the eligibility of the applicant or recipient for 
such assistance) for the State to obtain (subject to the 
cost reimbursement requirements of section 1115(a) of the 
Right to Financial Privacy Act but at no cost to the 
applicant or recipient) from any financial institution 
(within the meaning of section 1101(1) of such Act) any 
financial record (within the meaning of section 1101(2) 
of such Act) held by the institution with respect to the 
applicant or recipient (and such other person, as 
applicable), whenever the State determines the record is 
needed in connection with a determination with respect 
to such eligibility for (or the amount or extent of) such 
medical assistance; and 
‘‘(B) uses the authorization provided under subpara-
graph (A) to verify the financial resources of such applicant 
or recipient (and such other person, as applicable), in order 
to determine or redetermine the eligibility of such applicant 
or recipient for medical assistance under the State plan. 
‘‘(2) PROGRAM
DESCRIBED.—A program described in this 
paragraph is a program for verifying individual assets in a 
manner consistent with the approach used by the Commissioner 
of Social Security under section 1631(e)(1)(B)(ii). 
‘‘(c) DURATION
OF AUTHORIZATION.—Notwithstanding section 
1104(a)(1) of the Right to Financial Privacy Act, an authorization
H. R. 2642—71 
provided to a State under subsection (b)(1) shall remain effective 
until the earliest of— 
‘‘(1) the rendering of a final adverse decision on the 
applicant’s application for medical assistance under the State’s 
plan under this title; 
‘‘(2) the cessation of the recipient’s eligibility for such med-
ical assistance; or 
‘‘(3) the express revocation by the applicant or recipient 
(or such other person described in subsection (b)(1), as 
applicable) of the authorization, in a written notification to 
the State. 
‘‘(d) TREATMENT OF RIGHT TO FINANCIAL PRIVACY ACT REQUIRE-
MENTS.— 
‘‘(1) An authorization obtained by the State under sub-
section (b)(1) shall be considered to meet the requirements 
of the Right to Financial Privacy Act for purposes of section 
1103(a) of such Act, and need not be furnished to the financial 
institution, notwithstanding section 1104(a) of such Act. 
‘‘(2) The certification requirements of section 1103(b) of 
the Right to Financial Privacy Act shall not apply to requests 
by the State pursuant to an authorization provided under sub-
section (b)(1). 
‘‘(3) A request by the State pursuant to an authorization 
provided under subsection (b)(1) is deemed to meet the require-
ments of section 1104(a)(3) of the Right to Financial Privacy 
Act and of section 1102 of such Act, relating to a reasonable 
description of financial records. 
‘‘(e) REQUIRED DISCLOSURE.—The State shall inform any person 
who provides authorization pursuant to subsection (b)(1)(A) of the 
duration and scope of the authorization. 
‘‘(f) REFUSAL
OR
REVOCATION
OF
AUTHORIZATION.—If an 
applicant for, or recipient of, medical assistance under the State 
plan under this title (or such other person described in subsection 
(b)(1), as applicable) refuses to provide, or revokes, any authoriza-
tion made by the applicant or recipient (or such other person, 
as applicable) under subsection (b)(1)(A) for the State to obtain 
from any financial institution any financial record, the State may, 
on that basis, determine that the applicant or recipient is ineligible 
for medical assistance. 
‘‘(g) USE OF CONTRACTOR.—For purposes of implementing an 
asset verification program under this section, a State may select 
and enter into a contract with a public or private entity meeting 
such criteria and qualifications as the State determines appropriate, 
consistent with requirements in regulations relating to general 
contracting provisions and with section 1903(i)(2). In carrying out 
activities under such contract, such an entity shall be subject to 
the same requirements and limitations on use and disclosure of 
information as would apply if the State were to carry out such 
activities directly. 
‘‘(h) TECHNICAL
ASSISTANCE.—The Secretary shall provide 
States with technical assistance to aid in implementation of an 
asset verification program under this section. 
‘‘(i) REPORTS.—A State implementing an asset verification pro-
gram under this section shall furnish to the Secretary such reports 
concerning the program, at such times, in such format, and con-
taining such information as the Secretary determines appropriate.