IB 
Union Calendar No. 263 
115TH CONGRESS 
1ST SESSION H. R. 3921 
[Report No. 115–358, Part I] 
To extend funding for the Children’s Health Insurance Program, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 3, 2017 
Mr. BURGESS introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committee on 
Ways and Means, for a period to be subsequently determined by the 
Speaker, in each case for consideration of such provisions as fall within 
the jurisdiction of the committee concerned 
OCTOBER 19, 2017 
Reported from the Committee on Energy and Commerce with an amendment 
[Strike out all after the enacting clause and insert the part printed in italic] 
OCTOBER 19, 2017 
Referral to the Committee on Ways and Means extended for a period ending 
not later than October 23, 2017 
OCTOBER 23, 2017 
The Committee on Ways and Means discharged; committed to the Committee 
of the Whole House on the State of the Union and ordered to be printed 
[For text of introduced bill, see copy of bill as introduced on October 3, 2017] 
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A BILL 
To extend funding for the Children’s Health Insurance 
Program, and for other purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Helping Ensure Access 
for Little Ones, Toddlers, and Hopeful Youth by Keeping 
Insurance Delivery Stable Act of 2017’’ or the ‘‘HEALTHY 
KIDS Act’’. 
SEC. 2. TABLE OF CONTENTS. 
The table of contents for this Act is as follows: 
Sec. 1. Short title. 
Sec. 2. Table of contents. 
TITLE I—CHIP EXTENSION AND OTHER MEDICAID AND CHIP 
PROVISIONS 
Sec. 101. Five-year funding extension of the Children’s Health Insurance Pro-
gram. 
Sec. 102. Extension of certain programs and demonstration projects. 
Sec. 103. Extension of outreach and enrollment program. 
Sec. 104. Extension and reduction of additional Federal financial participation 
for CHIP. 
Sec. 105. Modifying reduction in Medicaid DSH allotments. 
Sec. 106. Puerto Rico and the Virgin Islands Medicaid payments. 
TITLE II—OFFSETS 
Sec. 201. Medicaid third party liability provisions. 
Sec. 202. Treatment of lottery winnings and other lump-sum income for purposes 
of income eligibility under Medicaid. 
Sec. 203. Adjustments to Medicare part B and part D premium subsidies for 
higher income individuals. 
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TITLE I—CHIP EXTENSION AND 
OTHER MEDICAID AND CHIP 
PROVISIONS 
SEC. 101. FIVE-YEAR FUNDING EXTENSION OF THE CHIL-
DREN’S HEALTH INSURANCE PROGRAM. 
(a) APPROPRIATION; TOTAL
ALLOTMENT.—Section 
2104(a) of the Social Security Act (42 U.S.C. 1397dd(a)) 
is amended— 
(1) in paragraph (19), by striking ‘‘and’’; 
(2) in paragraph (20), by striking the period at 
the end and inserting a semicolon; and 
(3) by adding at the end the following new para-
graphs: 
‘‘(21) for fiscal year 2018, $21,500,000,000; 
‘‘(22) for fiscal year 2019, $22,600,000,000; 
‘‘(23) for fiscal year 2020, $23,700,000,000; 
‘‘(24) for fiscal year 2021, $24,800,000,000; and 
‘‘(25) for fiscal year 2022, for purposes of mak-
ing 2 semi-annual allotments— 
‘‘(A) $2,850,000,000 for the period begin-
ning on October 1, 2021, and ending on March 
31, 2022; and 
‘‘(B) $2,850,000,000 for the period begin-
ning on April 1, 2022, and ending on September 
30, 2022.’’. 
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(b) ALLOTMENTS.— 
(1) IN GENERAL.—Section 2104(m) of the Social 
Security Act (42 U.S.C. 1397dd(m)) is amended— 
(A) in paragraph (2)— 
(i) 
in 
the 
heading, 
by 
striking 
‘‘THROUGH 2016’’ and inserting ‘‘THROUGH 
2022’’; and 
(ii) in subparagraph (B)— 
(I) in the matter preceding clause 
(i), by striking ‘‘(19)’’ and inserting 
‘‘(24)’’; 
(II) in clause (ii), in the matter 
preceding subclause (I), by inserting 
‘‘(other than fiscal year 2022)’’ after 
‘‘even-numbered fiscal year’’; and 
(III) in clause (ii)(I), by inserting 
‘‘(or, in the case of fiscal year 2018, 
under paragraph (4))’’ after ‘‘clause 
(i)’’; 
(B) in paragraph (5)— 
(i) by striking ‘‘or (4)’’ and inserting 
‘‘(4), or (10)’’; and 
(ii) by striking ‘‘or 2017’’ and insert-
ing ‘‘, 2017, or 2022’’; 
(C) in paragraph (7)— 
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(i) in subparagraph (A), by striking 
‘‘2017’’ and inserting ‘‘2022’’; 
(ii) in subparagraph (B), in the mat-
ter preceding clause (i), by inserting ‘‘(or, 
in the case of fiscal year 2018, by not later 
than the date that is 60 days after the date 
of the enactment of the HEALTHY KIDS 
Act of 2017)’’ after ‘‘before the August 31 
preceding the beginning of the fiscal year’’; 
and 
(iii) in the matter following subpara-
graph (B), by striking ‘‘or fiscal year 2016’’ 
and inserting ‘‘fiscal year 2016, fiscal year 
2018, fiscal year 2020, or fiscal year 2022’’; 
(D) in paragraph (9)— 
(i) in the heading, by striking ‘‘FISCAL 
YEARS 2015 AND 2017’’ and inserting ‘‘CER-
TAIN FISCAL YEARS’’; 
(ii) by striking ‘‘or (4)’’ and inserting 
‘‘, (4), or (10)’’; and 
(iii) by striking ‘‘or fiscal year 2017’’ 
and inserting ‘‘, 2017, or 2022’’; and 
(E) by adding at the end the following new 
paragraph: 
‘‘(10) FOR FISCAL YEAR 2022.— 
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‘‘(A) FIRST HALF.—Subject to paragraphs 
(5) and (7), from the amount made available 
under subparagraph (A) of paragraph (25) of 
subsection (a) for the semi-annual period de-
scribed in such subparagraph, increased by the 
amount of the appropriation for such period 
under section 101(b)(3) of the HEALTHY KIDS 
Act, the Secretary shall compute a State allot-
ment for each State (including the District of 
Columbia and each commonwealth and territory) 
for such semi-annual period in an amount equal 
to the first half ratio (described in subparagraph 
(D)) of the amount described in subparagraph 
(C). 
‘‘(B) SECOND
HALF.—Subject to para-
graphs (5) and (7), from the amount made 
available under subparagraph (B) of paragraph 
(25) of subsection (a) for the semi-annual period 
described in such subparagraph, the Secretary 
shall compute a State allotment for each State 
(including the District of Columbia and each 
commonwealth and territory) for such semi-an-
nual period in an amount equal to the amount 
made available under such subparagraph, multi-
plied by the ratio of— 
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‘‘(i) the amount of the allotment to 
such State under subparagraph (A); to 
‘‘(ii) the total of the amount of all of 
the allotments made available under such 
subparagraph. 
‘‘(C) FULL
YEAR
AMOUNT
BASED
ON 
GROWTH
FACTOR
UPDATED
AMOUNT.—The 
amount described in this subparagraph for a 
State is equal to the sum of— 
‘‘(i) the amount of the State allotment 
for fiscal year 2021 determined under para-
graph (2)(B)(i); and 
‘‘(ii) the amount of any payments 
made to the State under subsection (n) for 
fiscal year 2021, 
multiplied by the allotment increase factor under 
paragraph (6) for fiscal year 2022. 
‘‘(D) FIRST
HALF
RATIO.—The first half 
ratio described in this subparagraph is the ratio 
of— 
‘‘(i) the sum of— 
‘‘(I) the amount made available 
under subsection (a)(25)(A); and 
‘‘(II) the amount of the appro-
priation for such period under section 
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101(b)(3) of the HEALTHY KIDS Act; 
to 
‘‘(ii) the sum of— 
‘‘(I) the amount described in 
clause (i); and 
‘‘(II) the amount made available 
under subsection (a)(25)(B).’’. 
(2) 
TECHNICAL
AMENDMENT.—Section 
2104(m)(2)(A) 
of 
such 
Act 
(42 
U.S.C. 
1397dd(m)(2)(A)) is amended by striking ‘‘the allot-
ment increase factor under paragraph (5)’’ each place 
it appears and inserting ‘‘the allotment increase fac-
tor under paragraph (6)’’. 
(3) ONE-TIME APPROPRIATION FOR FISCAL YEAR 
2022.—There is appropriated to the Secretary of 
Health and Human Services, out of any money in the 
Treasury not otherwise appropriated, $20,200,000,000 
to accompany the allotment made for the period be-
ginning on October 1, 2021, and ending on March 31, 
2022, under paragraph (25)(A) of section 2104(a) of 
the Social Security Act (42 U.S.C. 1397dd(a)) (as 
added by subsection (a)(3)), to remain available until 
expended. Such amount shall be used to provide allot-
ments to States under paragraph (10) of section 
2104(m) of such Act (as added by subsection 
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period that begins on October 1, 2019, and ends 
on September 30, 2022, only with respect to chil-
dren in families whose income does not exceed 
300 percent of the poverty line (as defined in sec-
tion 2110(c)(5)) applicable to a family of the 
size involved)’’. 
(g) CHIP LOOK-ALIKE PLANS.— 
(1) BLENDING RISK POOLS.—Section 2107 of the 
Social Security Act (42 U.S.C. 1397gg) is amended 
by adding at the end the following: 
‘‘(g) USE OF BLENDED RISK POOLS.— 
‘‘(1) IN GENERAL.—Nothing in this title (or any 
other provision of Federal law) shall be construed as 
preventing a State from considering children enrolled 
in a qualified CHIP look-alike program and children 
enrolled in a State child health plan under this title 
(or a waiver of such plan) as members of a single risk 
pool. 
‘‘(2) QUALIFIED CHIP LOOK-ALIKE PROGRAM.— 
In this subsection, the term ‘qualified CHIP look-alike 
program’ means a State program— 
‘‘(A) under which children who are under 
the age of 19 and are not eligible to receive med-
ical assistance under title XIX or child health 
assistance under this title may purchase coverage 
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through the State that provides benefits that are 
at least identical to the benefits provided under 
the State child health plan under this title (or a 
waiver of such plan); and 
‘‘(B) that is funded exclusively through non- 
Federal funds, including funds received by the 
State in the form of premiums for the purchase 
of such coverage.’’. 
(2) COVERAGE RULE.— 
(A) IN GENERAL.—Section 5000A(f)(1) of 
the Internal Revenue Code of 1986 is amended in 
subparagraph (A)(iii), by inserting ‘‘or under a 
qualified CHIP look-alike program (as defined 
in section 2107(g) of the Social Security Act)’’ 
before the comma at the end. 
(B) EFFECTIVE
DATE.—The amendment 
made by subparagraph (A) shall apply with re-
spect to taxable years beginning after December 
31, 2017. 
SEC. 102. EXTENSION OF CERTAIN PROGRAMS AND DEM-
ONSTRATION PROJECTS. 
(a) 
CHILDHOOD
OBESITY
DEMONSTRATION 
PROJECT.—Section 1139A(e)(8) of the Social Security Act 
(42 U.S.C. 1320b–9a(e)(8)) is amended— 
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(1) by striking ‘‘and $10,000,000’’ and inserting 
‘‘, $10,000,000’’; and 
(2) by inserting after ‘‘2017’’ the following: ‘‘, 
and $25,000,000 for the period of fiscal years 2018 
through 2022’’. 
(b) PEDIATRIC QUALITY MEASURES PROGRAM.—Sec-
tion 1139A(i) of the Social Security Act (42 U.S.C. 1320b– 
9a(i)) is amended— 
(1) by striking ‘‘Out of any’’ and inserting the 
following: 
‘‘(1) IN GENERAL.—Out of any’’; 
(2) by striking ‘‘there is appropriated for each’’ 
and inserting ‘‘there is appropriated— 
‘‘(A) for each’’; 
(3) by striking ‘‘, and there is appropriated for 
the period’’ and inserting ‘‘; 
‘‘(B) for the period’’; 
(4) by striking ‘‘. Funds appropriated under this 
subsection shall remain available until expended.’’ 
and inserting ‘‘; and’’; and 
(5) by adding at the end the following: 
‘‘(C) for the period of fiscal years 2018 
through 2022, $75,000,000 for the purpose of 
carrying out this section (other than subsections 
(e), (f), and (g)). 
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‘‘(2) AVAILABILITY.—Funds appropriated under 
this subsection shall remain available until ex-
pended.’’. 
SEC. 103. EXTENSION OF OUTREACH AND ENROLLMENT 
PROGRAM. 
(a) IN GENERAL.—Section 2113 of the Social Security 
Act (42 U.S.C. 1397mm) is amended— 
(1) in subsection (a)(1), by striking ‘‘2017’’ and 
inserting ‘‘2022’’; and 
(2) in subsection (g)— 
(A) by striking ‘‘and $40,000,000’’ and in-
serting ‘‘, $40,000,000’’; and 
(B) by inserting after ‘‘2017’’ the following: 
‘‘, and $100,000,000 for the period of fiscal years 
2018 through 2022’’. 
(b) MAKING PARENT MENTORS ELIGIBLE TO RECEIVE 
GRANTS.—Section 2113(f) of the Social Security Act (42 
U.S.C. 1397mm(f)) is amended— 
(1) in paragraph (1), by adding at the end the 
following new subparagraph: 
‘‘(H) Parent mentors.’’; and 
(2) by adding at the end the following new para-
graph: 
‘‘(5) PARENT MENTOR.—The term ‘parent men-
tor’ means an individual who— 
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‘‘(A) is a parent or guardian of at least one 
child who is an eligible child under this title or 
title XIX; and 
‘‘(B) is trained to assist families with chil-
dren who have no health insurance coverage with 
respect to improving the social determinants of 
the health of such children, including by pro-
viding— 
‘‘(i) education about health insurance 
coverage, including, with respect to obtain-
ing such coverage, eligibility criteria and 
application and renewal processes; 
‘‘(ii) assistance with completing and 
submitting applications for health insur-
ance coverage; 
‘‘(iii) a liaison between families and 
representatives of State plans under title 
XIX or State child health plans under this 
title; 
‘‘(iv) guidance on identifying medical 
and dental homes and community phar-
macies for children; and 
‘‘(v) assistance and referrals to success-
fully address social determinants of chil-
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dren’s health, including poverty, food insuf-
ficiency, and housing.’’. 
SEC. 104. EXTENSION AND REDUCTION OF ADDITIONAL 
FEDERAL FINANCIAL PARTICIPATION FOR 
CHIP. 
Section 2105(b) of the Social Security Act (42 U.S.C. 
1397ee(b)) is amended in the second sentence by inserting 
‘‘and during the period that begins on October 1, 2019, and 
ends on September 30, 2020, the enhanced FMAP deter-
mined for a State for a fiscal year (or for any portion of 
a fiscal year occurring during such period) shall be in-
creased by 11.5 percentage points’’ after ‘‘23 percentage 
points,’’. 
SEC. 105. MODIFYING REDUCTION IN MEDICAID DSH AL-
LOTMENTS. 
Section 1923(f)(7)(A)(ii) of the Social Security Act (42 
U.S.C. 1396r–4(f)(7)(A)(ii)) is amended— 
(1) by striking subclause (I) and redesignating 
subclauses (II) through (VIII) as subclauses (I) 
through (VII), respectively; 
(2) in subclause (VI), as redesignated by para-
graph (1), by striking at the end ‘‘and’’; 
(3) in subclause (VII), as redesignated by para-
graph (1), by striking at the end the period and in-
serting a semicolon; and 
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(B) by adding at the end the following new 
subparagraphs: 
‘‘(C) The amount of the increase otherwise pro-
vided under subparagraph (A) for Puerto Rico shall 
be further increased by $880,000,000. 
‘‘(D)(i) For the period beginning October 1, 
2017, and ending December 31, 2019, the amount of 
the increase otherwise provided under subparagraph 
(A) for Puerto Rico shall be further increased by 
$120,000,000 if the Financial Oversight and Manage-
ment Board for Puerto Rico established under section 
101 of the Puerto Rico Oversight, Management, and 
Economic Stability Act (48 U.S.C. 2121) certifies by 
a majority vote that Puerto Rico has taken reasonable 
and appropriate steps during such period to— 
‘‘(I) reduce fraud, waste, and abuse under 
the program under title XIX; 
‘‘(II) implement strategies to reduce unnec-
essary, inefficient, or excessive spending under 
title XIX; 
‘‘(III) improve the use and availability of 
Medicaid data for program operation and over-
sight; and 
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‘‘(IV) improve the quality of care and pa-
tient experience for individuals enrolled under 
the program under title XIX. 
‘‘(ii) As a condition of any additional increase 
pursuant to clause (i), not later than October 1, 2018, 
Puerto Rico shall submit to the Financial Oversight 
and Management Board for Puerto Rico a report re-
garding steps taken to achieve each of the goals de-
scribed in subclauses (I) through (IV) of clause (i). 
‘‘(E) Payments under section 1903(a)(8) for a 
quarter of a fiscal year shall not be taken into ac-
count in applying subsection (f) (as increased in ac-
cordance with this paragraph and paragraphs (1), 
(2), (3), and (4)) to Puerto Rico or the Virgin Islands 
for such fiscal year. 
‘‘(F)(i) For the period beginning October 1, 
2017, and ending December 31, 2019, the amount of 
the increase otherwise provided under subparagraph 
(A) for the Virgin Islands shall be further increased 
by an amount equal to the per capita equivalent of 
the total amount of the increase provided for Puerto 
Rico under subparagraphs (C) and (D) for such pe-
riod. 
‘‘(ii) For purposes of clause (i), the term ‘per 
capita equivalent’ means the ratio of— 
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‘‘(I) the population of the Virgin Islands, as 
determined by the most recent census estimate re-
leased by the Bureau of the Census before Sep-
tember 4, 2017; to 
‘‘(II) the population of Puerto Rico, as so 
determined.’’. 
(b) FEDERAL MATCH FOR MEDICAL PERSONNEL AND 
FRAUD REDUCTION.—Section 1903(a) of the Social Secu-
rity Act (42 U.S.C. 1396b(a)) is amended— 
(1) in paragraph (2)(A), by inserting ‘‘subject to 
paragraph (8),’’ before ‘‘an amount’’; 
(2) in paragraph (6)— 
(A) in subparagraph (B), by inserting ‘‘sub-
ject to paragraph (8),’’ before ‘‘75 per centum’’; 
and 
(B) by striking at the end ‘‘plus’’; 
(3) in paragraph (7), by striking at the end the 
period and inserting ‘‘; plus’’ ; and 
(4) by adding at the end the following new para-
graph: 
‘‘(8) for quarters during the period beginning 
January 1, 2018, and ending December 31, 2019, 
paragraphs (2)(A) and (6) shall apply with respect to 
Puerto Rico and the Virgin Islands as if— 
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‘‘(A) the reference to ‘75 per centum’ in 
paragraph (2)(A) were a reference to ‘90 per cen-
tum’; and 
‘‘(B) the reference to ‘75 per centum’ in 
paragraph (6)(B) were a reference to ‘90 per 
centum’.’’. 
TITLE II—OFFSETS 
SEC. 201. MEDICAID THIRD PARTY LIABILITY PROVISIONS. 
(a) MEDICAID THIRD PARTY LIABILITY.— 
(1) DELAY OF BIPARTISAN BUDGET ACT OF 2013 
THIRD PARTY LIABILITY PROVISIONS.— 
(A) IN GENERAL.—Section 202(c) of the Bi-
partisan 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 sec-
tion 220 of the Medicare Access and CHIP Reau-
thorization Act of 2015 (Public Law 114–10), is 
amended by striking ‘‘2017’’ and inserting 
‘‘2019’’. 
(B) EFFECTIVE
DATE; TREATMENT.—The 
amendment made by subparagraph (A) shall 
take effect on September 30, 2017, and shall 
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apply with respect to claims generated or filed 
after such date. 
(2) CLARIFICATION OF DEFINITIONS APPLICABLE 
TO THIRD PARTY LIABILITY.— 
(A) IN GENERAL.—Section 1902 of the So-
cial Security Act (42 U.S.C. 1396a) is amended 
by adding at the end the following new sub-
section: 
‘‘(nn) RESPONSIBLE THIRD PARTY AND HEALTH IN-
SURER DEFINITIONS.—For purposes of subsection (a)(25) 
and section 1903(d)(2)(B): 
‘‘(1) RESPONSIBLE THIRD PARTY.—The term ‘re-
sponsible third party’ means a health insurer, an ac-
countable care organization, or any other party that 
is, by statute, contract, or agreement, legally respon-
sible for payment of a claim for a health care item 
or service. Such term does not include a party if pay-
ment by such party has been made or can reasonably 
be expected to be made under a workmen’s compensa-
tion 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. 
‘‘(2) HEALTH INSURER.—The term ‘health in-
surer’ means a group health plan, as defined in sec-
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tion 607(1) of the Employee Retirement Income Secu-
rity 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 deter-
mined appropriate by the Secretary.’’. 
(B) CONFORMING
AMENDMENTS.—Section 
1902(a)(25) of the Social Security Act (42 
U.S.C. 1396a(a)(25)) is amended— 
(i) in subparagraph (A), in the matter 
preceding clause (i), by striking ‘‘third par-
ties’’ and all that follows through ‘‘item or 
service)’’ and inserting ‘‘responsible third 
parties’’; 
(ii) in subparagraph (G), by striking 
‘‘health insurer’’ and all that follows 
through ‘‘item or service)’’ and inserting 
‘‘responsible third party’’; 
(iii) in subparagraph (I), in the mat-
ter preceding clause (i), by striking ‘‘health 
insurers’’ and all that follows through ‘‘item 
or service’’ and inserting ‘‘responsible third 
parties’’; and 
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(iv) by inserting ‘‘responsible’’ before 
‘‘third’’ each place it appears in subpara-
graphs (A)(i), (A)(ii), (C), (D), and (H). 
(3) REMOVAL OF SPECIAL TREATMENT OF CER-
TAIN TYPES OF CARE AND PAYMENTS UNDER MED-
ICAID
THIRD
PARTY
LIABILITY
RULES.—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 subpara-
graphs (E) and (F). 
(4) CLARIFICATION OF ROLE OF HEALTH INSUR-
ERS WITH RESPECT TO THIRD PARTY LIABILITY.— 
(A) IN GENERAL.—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: 
‘‘(E) that, in the case of a State that pro-
vides medical assistance under this title through 
a contract with a health insurer, such contract 
shall specify whether the State is— 
‘‘(i) delegating to such insurer all or 
some of its right of recovery from a respon-
sible third party for an item or service for 
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which payment has been made under the 
State plan (or under a waiver of the plan); 
and 
‘‘(ii) 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); 
‘‘(F) that, in the case of a State that elects 
an option described in clause (i) or (ii) of sub-
paragraph (E) with respect to a health insurer, 
the State shall provide assurances to the Sec-
retary that the State laws referred to in subpara-
graph (I) confer to the health insurer the author-
ity of the State with respect to the requirements 
specified in clauses (i) through (iv) of such sub-
paragraph;’’. 
(B) 
TREATMENT
OF
COLLECTED 
AMOUNTS.—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, reimburse-
ments made by a responsible third party to 
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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.’’. 
(5) INCREASING STATE FLEXIBILITY WITH RE-
SPECT
TO
THIRD
PARTY
LIABILITY.—Section 
1902(a)(25)(I) of the Social Security Act (42 U.S.C. 
1396a(a)(25)(I)) is amended— 
(A) in clause (i), by striking ‘‘medical as-
sistance under the State plan’’ and inserting 
‘‘medical assistance under a State plan (or 
under a waiver of the plan)’’; 
(B) by striking clause (ii) and inserting the 
following new clause: 
‘‘(ii) accept— 
‘‘(I) any State’s right of recovery 
and the assignment to any State of 
any right of an individual or other en-
tity 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 
‘‘(II) as a valid authorization of 
the responsible third party for the fur-
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nishing of an item or service to an in-
dividual eligible to receive medical as-
sistance under this title, an authoriza-
tion made on behalf of such individual 
under the State plan (or under a waiv-
er of such plan) for the furnishing of 
such item or service to such indi-
vidual;’’; 
(C) in clause (iii)— 
(i) by striking ‘‘respond to’’ and in-
serting ‘‘not later than 60 days after receiv-
ing’’; and 
(ii) by striking ‘‘; and’’ at the end and 
inserting ‘‘, respond to such inquiry; and’’; 
and 
(D) in clause (iv), by inserting ‘‘a failure to 
obtain a prior authorization,’’ after ‘‘claim 
form,’’. 
(6) STATE INCENTIVE TO PURSUE THIRD PARTY 
LIABILITY
FOR
NEWLY
ELIGIBLES.—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 indi-
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viduals 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 ap-
plication of section 1905(y).’’. 
(b) COMPLIANCE WITH THIRD PARTY INSURANCE RE-
PORTING.—Section 1903 of the Social Security Act (42 
U.S.C. 1396b) is amended by inserting after subsection (m) 
the following new subsection: 
‘‘(n)(1) For any year beginning after 2020 (or a sooner 
year as provided in paragraph (2)), if a State fails to com-
ply with the requirements of section 1902(a)(25) with re-
spect 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 subse-
quent year in which the State fails to so comply (and cumu-
latively for a failure to so comply for a period of consecutive 
years). 
‘‘(2) The Secretary may apply paragraph (1)— 
‘‘(A) 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 sub-
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clause (VIII) of section 1902(a)(10)(A)(i) or non-ex-
pansion individuals; and 
‘‘(B) 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 subdivi-
sion (i), (iii), or (iv) of section 1905(a). 
‘‘(3) For purposes of this subsection, the term ‘non- 
expansion individual’ means, with respect to a State for 
a month, an individual who is— 
‘‘(A) 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; 
‘‘(B) not under 19 years of age; 
‘‘(C) not 65 years of age or older; and 
‘‘(D) not eligible for medical assistance under 
this title on the basis of being blind or disabled.’’. 
(c) APPLICATION TO CHIP.— 
(1) IN GENERAL.—Section 2107(e)(1) of the So-
cial Security Act (42 U.S.C. 1397gg(e)(1)) is amend-
ed— 
(A) by redesignating subparagraphs (B) 
through (R) as subparagraphs (C) through (S), 
respectively; and 
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(B) by inserting after subparagraph (A) the 
following new subparagraph: 
‘‘(B) Section 1902(a)(25) (relating to third 
party liability).’’. 
(2) 
MANDATORY
REPORTING.—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— 
(A) by striking ‘‘(and, at State option, 
child’’ and inserting ‘‘and child’’; and 
(B) by striking ‘‘title XXI)’’ and inserting 
‘‘title XXI’’. 
(d) TRAINING ON THIRD PARTY LIABILITY.—Section 
1936 of the Social Security Act (42 U.S.C. 1396u–6) is 
amended— 
(1) in subsection (b)(4), by striking ‘‘and quality 
of care’’ and inserting ‘‘, quality of care, and the li-
ability of responsible third parties (as defined in sec-
tion 1902(nn))’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(f) THIRD PARTY LIABILITY TRAINING.—With re-
spect to education or training activities carried out pursu-
ant to subsection (b)(4) with respect to the liability of re-
sponsible third parties (as defined in section 1902(nn) for 
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payment for items and services furnished under State plans 
(or under waivers of such plans)) under this title, the Sec-
retary shall— 
‘‘(1) publish (and update on an annual basis) on 
the public Internet website of the Centers for Medicare 
& Medicaid Services a dedicated Internet page con-
taining best practices to be used in assessing such li-
ability; 
‘‘(2) monitor efforts to assess such liability and 
analyze the challenges posed by that assessment; 
‘‘(3) distribute to State agencies administering 
the State plan under this title information related to 
such efforts and challenges; and 
‘‘(4) provide guidance to such State agencies 
with respect to State oversight of efforts under a med-
icaid managed care plan under section 1903(m) or 
1932 to assess such liability.’’. 
(e) DEVELOPMENT OF MODEL UNIFORM FIELDS FOR 
STATES TO REPORT THIRD PARTY INFORMATION.—Not 
later than January 1, 2019, the Secretary of Health and 
Human Services shall, in consultation with the States, de-
velop 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 Statis-
tical Information System (T–MSIS) (or a successor sys-
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tem), or within CMS Form 64 (or any successor form), in-
formation 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 serv-
ices 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.). 
(f) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (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. 
(2) EXCEPTION
IF
STATE
LEGISLATION
RE-
QUIRED.—In the case of a State plan for medical as-
sistance 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 re-
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quirement 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 require-
ment 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 leg-
islative session, each year of such session shall be 
deemed to be a separate regular session of the State 
legislature. 
SEC. 202. TREATMENT OF LOTTERY WINNINGS AND OTHER 
LUMP-SUM INCOME FOR PURPOSES OF IN-
COME ELIGIBILITY UNDER MEDICAID. 
(a) IN GENERAL.—Section 1902 of the Social Security 
Act (42 U.S.C. 1396a) is amended— 
(1) in subsection (a)(17), by striking ‘‘(e)(14), 
(e)(14)’’ and inserting ‘‘(e)(14), (e)(15)’’; and 
(2) in subsection (e)— 
(A) in paragraph (14) (relating to modified 
adjusted gross income), by adding at the end the 
following new subparagraph: 
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‘‘(J) TREATMENT
OF
CERTAIN
LOTTERY 
WINNINGS AND INCOME RECEIVED AS A LUMP 
SUM.— 
‘‘(i) IN GENERAL.—In the case of an 
individual who is the recipient of qualified 
lottery winnings (pursuant to lotteries oc-
curring on or after January 1, 2018) or 
qualified lump sum income (received on or 
after such date) and whose eligibility for 
medical assistance is determined based on 
the application of modified adjusted gross 
income under subparagraph (A), a State 
shall, in determining such eligibility, in-
clude such winnings or income (as applica-
ble) as income received— 
‘‘(I) in the month in which such 
winnings or income (as applicable) is 
received 
if 
the 
amount 
of 
such 
winnings or income is less than 
$80,000; 
‘‘(II) over a period of 2 months if 
the amount of such winnings or income 
(as applicable) is greater than or equal 
to $80,000 but less than $90,000; 
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‘‘(III) over a period of 3 months 
if the amount of such winnings or in-
come (as applicable) is greater than or 
equal 
to 
$90,000 
but 
less 
than 
$100,000; and 
‘‘(IV) over a period of 3 months 
plus 1 additional month for each incre-
ment of $10,000 of such winnings or 
income (as applicable) received, not to 
exceed a period of 120 months (for 
winnings or income of $1,260,000 or 
more), if the amount of such winnings 
or income is greater than or equal to 
$100,000. 
‘‘(ii) COUNTING
IN
EQUAL
INSTALL-
MENTS.—For purposes of subclauses (II), 
(III), and (IV) of clause (i), winnings or 
income to which such subclause applies 
shall be counted in equal monthly install-
ments over the period of months specified 
under such subclause. 
‘‘(iii) HARDSHIP EXEMPTION.—An in-
dividual whose income, by application of 
clause (i), exceeds the applicable eligibility 
threshold established by the State, shall con-
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tinue to be eligible for medical assistance to 
the extent that the State determines, under 
procedures established by the State (in ac-
cordance with standards specified by the 
Secretary), that the denial of eligibility of 
the individual would cause an undue med-
ical or financial hardship as determined on 
the basis of criteria established by the Sec-
retary. 
‘‘(iv) NOTIFICATIONS AND ASSISTANCE 
REQUIRED
IN
CASE
OF
LOSS
OF
ELIGI-
BILITY.—A State shall, with respect to an 
individual who loses eligibility for medical 
assistance under the State plan (or a waiv-
er of such plan) by reason of clause (i)— 
‘‘(I) before the date on which the 
individual loses such eligibility, inform 
the individual— 
‘‘(aa) of the individual’s op-
portunity to enroll in a qualified 
health plan offered through an 
Exchange established under title I 
of the Patient Protection and Af-
fordable Care Act during the spe-
cial enrollment period specified in 
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section 9801(f)(3) of the Internal 
Revenue Code of 1986 (relating to 
loss of Medicaid or CHIP cov-
erage); and 
‘‘(bb) of the date on which 
the individual would no longer be 
considered ineligible by reason of 
clause (i) to receive medical as-
sistance under the State plan or 
under any waiver of such plan 
and be eligible to reapply to re-
ceive such medical assistance; and 
‘‘(II) provide technical assistance 
to the individual seeking to enroll in 
such a qualified health plan. 
‘‘(v) QUALIFIED
LOTTERY
WINNINGS 
DEFINED.—In this subparagraph, the term 
‘qualified lottery winnings’ means winnings 
from a sweepstakes, lottery, or pool de-
scribed in paragraph (3) of section 4402 of 
the Internal Revenue Code of 1986 or a lot-
tery operated by a multistate or multijuris-
dictional 
lottery 
association, 
including 
amounts awarded as a lump sum payment. 
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‘‘(vi) QUALIFIED
LUMP
SUM
INCOME 
DEFINED.—In this subparagraph, the term 
‘qualified lump sum income’ means income 
that is received as a lump sum from one of 
the following sources: 
‘‘(I) Monetary winnings from 
gambling (as defined by the Secretary 
and including gambling activities de-
scribed in section 1955(b)(4) of title 
18, United States Code). 
‘‘(II) Damages received, whether 
by suit or agreement and whether as 
lump sums or as periodic payments 
(other than monthly payments), on ac-
count of causes of action other than 
causes of action arising from personal 
physical injuries or physical sickness. 
‘‘(III) Income received as liquid 
assets from the estate (as defined in 
section 1917(b)(4)) of a deceased indi-
vidual.’’; and 
(B) by striking ‘‘(14) EXCLUSION’’ and in-
serting ‘‘(15) EXCLUSION’’. 
(b) RULES OF CONSTRUCTION.— 
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(1) INTERCEPTION OF LOTTERY WINNINGS AL-
LOWED.—Nothing in the amendment made by sub-
section (a)(2)(A) shall be construed as preventing a 
State from intercepting the State lottery winnings 
awarded to an individual in the State to recover 
amounts paid by the State under the State Medicaid 
plan under title XIX of the Social Security Act for 
medical assistance furnished to the individual. 
(2) APPLICABILITY LIMITED TO ELIGIBILITY OF 
RECIPIENT OF LOTTERY WINNINGS OR LUMP SUM IN-
COME.—Nothing in the amendment made by sub-
section (a)(2)(A) shall be construed, with respect to a 
determination of household income for purposes of a 
determination of eligibility for medical assistance 
under the State plan under title XIX of the Social Se-
curity Act (42 U.S.C. 1396 et seq.) (or a waiver of 
such plan) made by applying modified adjusted gross 
income 
under 
subparagraph 
(A) 
of 
section 
1902(e)(14) of such Act (42 U.S.C. 1396a(e)(14)), as 
limiting the eligibility for such medical assistance of 
any individual that is a member of the household 
other than the individual who received qualified lot-
tery winnings or qualified lump-sum income (as de-
fined in subparagraph (J) of such section 1902(e)(14), 
as added by subsection (a)(2)(A) of this section). 
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SEC. 203. ADJUSTMENTS TO MEDICARE PART B AND PART D 
PREMIUM SUBSIDIES FOR HIGHER INCOME 
INDIVIDUALS. 
(a) IN GENERAL.—Section 1839(i)(3)(C)(i)(II) of the 
Social Security Act (42 U.S.C. 1395r(i)(3)(C)(i)(II)) is 
amended, in the table, by striking the last row and inserting 
the following new rows: 
‘‘More than $160,000 but less than $500,000 .......................
80 percent
At least $500,000 ..................................................................
100 percent.’’. 
(b) JOINT RETURNS.—Section 1839(i)(3)(C)(ii) of the 
Social Security Act (42 U.S.C. 1395r(i)(3)(C)(ii)) is 
amended by inserting before the period the following: ‘‘ex-
cept, with respect to the dollar amounts applied in the last 
row of the table under subclause (II) of such clause (and 
the second dollar amount specified in the second to last row 
of such table), clause (i) shall be applied by substituting 
dollar amounts which are 175 percent of such dollar 
amounts for the calendar year’’. 
(c) INFLATION ADJUSTMENT.—Section 1839(i) of the 
Social Security Act (42 U.S.C. 1395r(i)) is amended— 
(1) in paragraph (5)— 
(A) in subparagraph (A), by striking ‘‘In 
the case’’ and inserting ‘‘Subject to subpara-
graph (C), in the case’’; 
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(B) in subparagraph (B), by striking ‘‘sub-
paragraph (A)’’ and inserting ‘‘subparagraph 
(A) or (C)’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(C) TREATMENT
OF
ADJUSTMENTS
FOR 
CERTAIN HIGHER INCOME INDIVIDUALS.— 
‘‘(i) IN GENERAL.—Subparagraph (A) 
shall not apply with respect to each dollar 
amount in paragraph (3) of $500,000. 
‘‘(ii) ADJUSTMENT BEGINNING 2027.— 
In the case of any calendar year beginning 
after 2026, each dollar amount in para-
graph (3) of $500,000 shall be increased by 
an amount equal to— 
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the percentage (if any) by 
which the average of the Consumer 
Price Index for all urban consumers 
(United States city average) for the 12- 
month period ending with August of 
the preceding calendar year exceeds 
such average for the 12-month period 
ending with August 2025.’’; and 
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(2) in paragraph (6)(B), by inserting ‘‘(other 
than $500,000)’’ after ‘‘the dollar amounts’’. 
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Union Calendar No. 263 
115TH CONGRESS 
1ST SESSION 
H. R. 3921 
[Report No. 115–358, Part I] 
A BILL 
To extend funding for the Children’s Health 
Insurance Program, and for other purposes. 
OCTOBER 23, 2017 
The Committee on Ways and Means discharged; com-
mitted to the Committee of the Whole House on the 
State of the Union and ordered to be printed 
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