I 113th CONGRESS 1st Session H. R. 3659 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. Removal of special treatment of certain types of care and payments under Medicaid 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). 2. Clarification of role of MCOs 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 section 1, is further amended by inserting, after subparagraph (D), the following: (E) that, if the State contracts with a managed care entity pursuant to section 1932 for the purpose of providing items and services under this title— (i) such contract shall specify whether— (I) the State is delegating to the managed care entity all or some of its right of recovery for an item or service for which payment has been made under the State plan; and (II) the State is transferring to the managed care entity all or some of the assignment to the State of any right of an individual or other entity to payment from a health insurer (including self-insured plans, group health plans (as defined in section 607(1) of the Employee Retirement Income Security Act of 1974), service benefit plans, managed care organizations, pharmacy benefit managers, or other parties that are, by statute, contract, or agreement, legally responsible for payment of a claim for a health care item or service) for an item or service for which payment has been made under the State plan; and (ii) if the State delegates its rights under clause (i)(I) or transfers assignment of rights under clause (i)(II) , the State shall have in effect laws requiring such health insurers, as a condition of doing business in the State— (I) to provide to such managed care entity, upon the request of such entity, the information described in subparagraph (I)(i); (II) if a right of recovery was delegated under clause (i)(I) , accept the authority of the managed care entity to exercise such right; (III) if an assignment of rights was transferred under clause (i)(II) , accept such transfer of assignment of rights; (IV) respond to an inquiry made by such entity in the same manner that the insurer would respond to an inquiry by a State under subparagraph (I)(iii); and (V) agree not to deny a claim submitted by a managed care entity for which the State has delegated or transferred rights under clause (i) in the same manner that the insurer may not deny a claim submitted by a State under subparagraph (I)(iv); . (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, reimbursements made by a third party to managed care entities pursuant to section 1902(a)(25)(E) shall be treated in the same manner as reimbursements made to a State under the previous sentence. . 3. Requiring coordination of beneficiary information 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 section 2, is further amended by inserting, after subparagraph (E), the following: (F) that, if the State contracts with a health insurer (as defined for purposes of subparagraph (E)) for the purposes of providing items and services under this title such contract shall require that— (i) if such insurer contracts with a pharmacy benefit manager to manage benefits under the health plan offered by such insurer, such contract shall require that the pharmacy benefit manager regularly report to the State (or, as applicable, to an authorized contractor or agent of the State) any data obtained by the pharmacy benefit manager that is relevant, as determined by the State, to assisting the State in determining whether such a health insurer is, by statute, contract, or agreement, legally responsible for payment of a claim for a health care item or service available under the plan; and (ii) such insurer cooperates (including by granting requests of the State for information, or for permission to utilize information, that is relevant to determining whether such a health insurer is, by statute, contract, or agreement, legally responsible for payment of a claim for a health care item or service available under the plan, regardless of the State in which the insurer is licensed) with the State Medicaid plan (including any State Medicaid agency or authorized agent or contractor of such program or entity) for the proper coordination of benefits offered through the plan of such insurer and medical assistance under the State plan to effectuate the principle of the program under this title being the payer of last resort; . 4. Development of model uniform fields for States to report third-party information Not later than January 1, 2015, 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 within CMS Form 64 (or any successor form) information identifying third-party health insurers (including self-insured plans, group health plans (as defined in section 607(1) of the Employee Retirement Income Security Act of 1974), service benefit plans, managed care organizations, pharmacy benefit managers, or other parties that are, by statute, contract, or agreement, legally responsible for payment of a claim for a health care item or service) and other relevant information for ascertaining the legal responsibility of such third parties to pay for care and services available under the State plan under title XIX of the Social Security Act ( 42 U.S.C. 1396 et seq. ). 5. 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 section 2, is amended by adding at the end the following: In the case of expenditures for medical assistance provided during 2014 and subsequent years for newly eligible individuals (as such term is defined in section 1905(y)) 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 services, the Secretary shall apply the Federal medical assistance percentage for the State under section 1905(b), notwithstanding the application of section 1905(y). . 6. Penalty for non-compliance Subject to section 6(b), for any fiscal year beginning on or after the date that is 1 year after the effective date under section 6, in the case of a State that fails to comply with the additional requirements for the State plan for medical assistance under title XIX of the Social Security Act that are imposed by the amendments made by this Act, the Secretary of Health and Human Services shall reduce the Federal medical assistance percentage (as defined in section 1905(b) of the Social Security Act ( 42 U.S.C. 1396d(b) ) for such State by a percentage point for such fiscal year during which such requirements are not met. To the extent that a State fails to comply with such additional requirements for consecutive fiscal years, the reductions under the previous sentence shall be cumulative for each such subsequent fiscal year. 7. Effective date (a) In general Except as provided in subsection (b) , this Act (other than section 4) and the amendments made by this Act shall take effect on the date of enactment of this Act and shall apply to medical assistance provided on or after such date. (b) Exception if State legislation required In the case of a State plan for medical assistance under title XIX of the Social Security Act 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, 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 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.