I 
119TH CONGRESS 
1ST SESSION 
H. R. 497 
To amend title XIX of the Social Security Act to provide clarification with 
respect to the liability of third party payers for medical assistance paid 
under the Medicaid program, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 16, 2025 
Mr. CRENSHAW 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 provide 
clarification with respect to the liability of third party 
payers for medical assistance paid under the Medicaid 
program, and for other purposes. 
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 ‘‘Medicaid Third Party 
Liability Act’’. 
SEC. 2. MEDICAID THIRD PARTY LIABILITY. 
(a) REMOVAL OF SPECIAL TREATMENT OF CERTAIN 
TYPES
OF CARE
AND PAYMENTS UNDER MEDICAID 
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THIRD PARTY LIABILITY RULES.—Section 1902(a)(25) 
of the Social Security Act (42 U.S.C. 1396a(a)(25)) is 
amended by striking subparagraphs (E) and (F) and re-
designating the subsequent subparagraphs accordingly. 
(b) CLARIFICATION OF ROLE OF HEALTH INSURERS 
WITH RESPECT TO THIRD PARTY LIABILITY.—Section 
1902(a)(25) of the Social Security Act (42 U.S.C. 
1396a(a)(25)), as amended by subsection (a), is further 
amended— 
(1) in subparagraph (F) (as so redesignated), 
by striking at the end ‘‘and’’; 
(2) in subparagraph (G) (as so redesignated), 
by striking the period at the end and inserting ‘‘; 
and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(H) that, in the case of a State after Jan-
uary 1, 2026, that provides medical assistance 
under this title through a contract with a health 
insurer (including a group health plan (as de-
fined in section 607(1) of the Employee Retire-
ment Income Security Act of 1974), a self-in-
sured plan, a fully insured plan, a service ben-
efit plan, a managed care organization, a phar-
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macy benefit manager, or any other health plan 
determined appropriate by the Secretary)— 
‘‘(i) such contract shall specify— 
‘‘(I) whether the State is dele-
gating to such insurer all or some of 
its right of recovery from a respon-
sible 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 
‘‘(II) whether the State is trans-
ferring 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); and 
‘‘(ii) in the case of a State that elects 
an option described in subclause (I) or (I) 
of clause (i) with respect to a health in-
surer (including a group health plan (as 
defined in section 607(1) of the Employee 
Retirement Income Security Act of 1974), 
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self-insured plan, a fully insured plan, a 
service benefit plan, a managed care orga-
nization, a pharmacy benefit manager, and 
any other health plan determined appro-
priate by the Secretary), the State shall 
provide assurances to the Secretary that 
the State laws referred to in subparagraph 
(G) confer to the health insurer the au-
thority of the State with respect to the re-
quirements specified in clauses (i) through 
(iv) of such subparagraph.’’. 
(c) INCREASING STATE FLEXIBILITY WITH RESPECT 
TO THIRD PARTY LIABILITY.—Section 1902(a)(25)(G)(ii) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1396a(a)(25)(G)(ii)), as so redesignated by subsection (a), 
is amended to read as follows: 
‘‘(ii) accept— 
‘‘(I) the State’s right of recovery 
and the assignment to the 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 
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‘‘(II) after January 1, 2026, as a 
valid authorization of the responsible 
third party for the furnishing of an 
item or service to an individual eligi-
ble 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;’’. 
(d) VERIFICATION
OF
INSURANCE
STATUS
RE-
QUIRED.— 
(1) IN GENERAL.—Section 1902(a)(25)(A)(i) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1396a(a)(25)(A)(i)) is amended by inserting ‘‘, in-
cluding the collection of, with respect to an indi-
vidual seeking to receive medical assistance under 
this title, information on whether the individual has 
health insurance coverage provided through a third 
party (as described in such paragraph) and the plan 
of such insurer in which the individual is enrolled,’’ 
after ‘‘in regulations)’’. 
(2) FFP UNAVAILABLE WITHOUT INSURANCE 
STATUS VERIFICATION.—Section 1903(i) of the So-
cial Security Act (42 U.S.C. 1396b(i)) is amended— 
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(A) in paragraph (26), by striking ‘‘; or’’ 
and inserting ‘‘;’’; 
(B) in paragraph (27), by striking ‘‘of the 
State.’’ and inserting ‘‘of the State; or’’; and 
(C) by inserting after paragraph (27) the 
following: 
‘‘(28) with respect to any amounts after Janu-
ary 1, 2026, expended for medical assistance for in-
dividuals for whom the State has not obtained and 
verified, 
in 
accordance 
with 
section 
1902(a)(25)(A)(i), information on whether such an 
individual has coverage provided through a third 
party (as described in such paragraph) and the plan 
of such coverage in which the individual is en-
rolled.’’. 
SEC. 3. EFFECTIVE DATE. 
In the case of a State plan for medical assistance 
under title XIX of the Social Security Act that the Sec-
retary of Health and Human Services determines requires 
State legislation (other than legislation appropriating 
funds) in order for the plan to meet the additional require-
ment imposed by the amendments made under this sec-
tion, the State 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 be-
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fore the first day of the first calendar quarter beginning 
after the close of the first regular session of the State leg-
islature that begins after the date of 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. 
Æ 
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