SECTION 1. STRENGTHENING THE MEDICAID THIRD-PARTY LIABILITY 
              REQUIREMENT.

    (a) State and Health Provider Right To Make Inquiries and Third-
Party Responsibilities.--Section 1902 of the Social Security Act (42 
U.S.C. 1396a) is amended--
            (1) in subsection (a)(25)--
                    (A) by striking ``and'' at the end of subparagraph 
                (H);
                    (B) by adding ``and'' at the end of subparagraph 
                (I); and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(J) that the State shall provide assurances 
                satisfactory to the Secretary that the State has in 
                effect laws requiring the State to make inquiries to 
                third parties, including health insurers, 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, operating in any State;''; and
            (2) by adding at the end the following new subsection:
    ``(dd) Responsibilities of Third Parties.--
            ``(1) In general.--Third parties described in subsection 
        (a)(25)(J) shall--
                    ``(A) provide, with respect to individuals who are 
                eligible for, or are provided, medical assistance under 
                the State plan, upon the request of the State, 
                information to determine during what period the 
                individual (or the individual's spouse or dependents) 
                may be (or may have been) covered by a health insurer 
                and the nature of the coverage that is or was provided 
                by the health insurer (including the name, address, and 
                identifying number of the plan) in a manner prescribed 
                by the Secretary;
                    ``(B) accept the State's right of recovery and the 
                assignment to the State of any right of an individual 
                or other entity to payment from the party for an item 
                or service for which payment has been made under the 
                State plan;
                    ``(C) respond to any inquiry by the State regarding 
                a claim for payment for any health care item or service 
                that is submitted not later than 3 years after the date 
                of the provision of such health care item or service; 
                and
                    ``(D) agree not to deny a claim submitted by the 
                State solely on the basis of the date of submission of 
                the claim, the type or format of the claim form, or a 
                failure to present proper documentation at the point-
                of-sale that is the basis of the claim, if--
                            ``(i) the claim is submitted by the State 
                        within the 3-year period beginning on the date 
                        on which the item or service was furnished; and
                            ``(ii) any action by the State to enforce 
                        its rights with respect to such claim is 
                        commenced within 6 years of the State's 
                        submission of such claim.
            ``(2) Inquiries of third parties.--Entities providing 
        services and items to individuals receiving medical assistance 
        under this title (or to individuals the entity reasonably 
        believes may receive medical assistance under this title) may 
        make inquiries to third parties described in subsection 
        (a)(15)(J) that are, by statute, contract, or agreement, 
        legally responsible for payment of a claim, operating in any 
        State, for the purpose of determining eligibility and coverage 
        for those individuals.''.
    (b) Referrals to the Secretary; Maintaining the Integrity of the 
Medicaid Program.--Section 1909 of such Act (42 U.S.C. 1396h) is 
amended--
            (1) in subsection (b), by adding at the end the following 
        new paragraph:
            ``(5) The law contains a requirement for making a referral 
        to the Secretary for the purposes of subsection (e).''; and
            (2) by adding at the end the following new subsection:
    ``(e) Federal Civil Penalties and Payments to States.--
            ``(1) Federal civil penalties.--
                    ``(A) In general.--Upon referral from a State, if 
                the Secretary finds that a third party, including any 
                third party described in section 1902(a)(25)(J), that 
                is, by statute, contract, or agreement, legally 
                responsible for payment of a claim for a health care 
                item or service, failed to reply to inquiries about an 
                individual sent pursuant to such section, the Secretary 
                shall impose a civil penalty upon that third party of 
                not less than $5,000 and not more than $10,000, plus 3 
                times the amount of the claim for that individual 
                without regard to any other legal responsibility of the 
                third party for payment of a claim for a health care 
                item or service for that individual.
                    ``(B) Failure defined.--For purposes of 
                subparagraph (A), the term `failed' means the failure 
                of a third party described to provide the information 
                required by section 1902(a)(25)(J) about an individual 
                within 10 days of the date the inquiry is first made to 
                the party.
            ``(2) Payments to states.--The Secretary shall pay a State 
        an amount equal to the Federal medical assistance percentage of 
        any amount obligated to the United States under paragraph 
        (1).''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2009.
Output: Amends title XIX (Medicaid) of the Social Security Act to direct state Medicaid plans to require the state to provide the Secretary of Health and Human Services with satisfactory assurances that it has in effect laws requiring the state to make inquiries to third parties, including health insurers, self-insured plans, group health plans, or other parties operating in any state that are responsible for payment of a claim for a health care item or service.

Requires third parties to: (1) provide, upon state request, information about Medicaid-eligible or -receiving individuals to determine during what period the individual (or the spouse or dependents) may be (or may have been) covered by a health insurer, as well as the nature of such coverage; (2) accept the state's right of recovery and the assignment to the state of any right of an individual or other entity to payment from the party for an item or service for which payment has been made under the state plan; and (3) agree not to deny a claim submitted by the state solely on the basis of its date of submission, the type or format of the claim form, or a failure to present proper documentation at the point-of-sale that is the basis of the claim, if the claim is submitted by the state within three years after the item or service was furnished, and any action by the state to enforce its rights is commenced within six years of its submission of the claim.

Establishes a civil monetary penalty for a third party's failure to reply to inquiries required by this Act.