[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1892 Introduced in Senate (IS)]







104th CONGRESS
  2d Session
                                S. 1892

  To reward States for collecting medicaid funds expended on tobacco-
               related illnesses, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 19, 1996

Mr. Lautenberg (for himself and Mr. Wellstone) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To reward States for collecting medicaid funds expended on tobacco-
               related illnesses, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tobacco Medicaid Recovery Act of 
1996''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds the following:
            (1) Federal taxpayers pay for approximately $20,000,000,000 
        each year in Federal health expenditures to treat tobacco-
        related illnesses, including expenditures incurred under the 
        medicare and medicaid programs operated under titles XVIII and 
        XIX of the Social Security Act, health care programs carried 
        out by the Secretary of Veterans Affairs under chapter 17 of 
        title 38, United States Code, and other Federal health care 
        programs. These expenditures often contribute to an increase in 
        the Federal budget deficit.
            (2) According to the Centers for Disease Control and 
        Prevention, tobacco-related illnesses cost the medicaid program 
        under title XIX of the Social Security Act $5,100,000,000 each 
        year.
            (3) The efforts of several States that are attempting under 
        Federal law, including in some cases, under the Federal anti-
        racketeering statutes, or under State law, to recover the 
        health care costs incurred under the medicaid program for the 
        treatment of individuals with diseases attributable to the use 
        of tobacco products from the manufacturers of such products, 
        are to be commended.
    (b) Purpose.--The purpose of this Act is to reward States that 
successfully recover the Federal and State health care costs incurred 
under the medicaid program for the treatment of individuals with 
diseases attributable to the use of tobacco products by providing 
increased funding for their medicaid programs and to provide increased 
resources to the National Institutes of Health.

SEC. 3. INCENTIVE PAYMENTS FOR COLLECTION OF MEDICAID FUNDS EXPENDED ON 
              TOBACCO-RELATED ILLNESSES.

    (a) Financial Reward for Successful Recoveries.--Section 1903(d) of 
the Social Security Act (42 U.S.C. 1396b(d)) is amended by adding at 
the end the following new paragraph:
    ``(7)(A) Notwithstanding any other provision of law, if a State 
recovers, by judgment in, or settlement of, any suit arising under 
Federal or State law, amounts expended as medical assistance under the 
State plan for the treatment of individuals with diseases attributable 
to the use of tobacco products, from a manufacturer of tobacco 
products, the State shall notify the Secretary of the amount of such 
recovery. Upon receipt of such a notice, the Secretary shall determine 
the amount of Federal expenditures under this title that are 
attributable to the amounts recovered, based on the Federal medical 
assistance percentage, as defined in section 1905(b), for such State. 
The Secretary shall treat the amount so determined as an overpayment 
under this section, in accordance with paragraph (2)(A), and with 
respect to such amount shall do the following:
            ``(i) Provide that the State shall retain \1/3\ of such 
        amount, for the purpose of using such funds to meet the non-
        Federal share of expenditures under the State plan with respect 
        to which payments may be made under this title.
            ``(ii) Pay \1/3\ of such amount to the Director of the 
        National Institutes of Health, for the purpose of conducting 
        disease research.
    ``(B) Any amount of new budget authority or outlays resulting from 
the provisions of this paragraph shall not be counted for any purpose 
under section 251 or 252 of the Balanced Budget and Emergency Deficit 
Control Act of 1985.
    ``(C) For purposes of this paragraph--
            ``(i) the term `manufacturer of tobacco products' has the 
        meaning given such term by section 5702(d) of the Internal 
        Revenue Code of 1986; and
            ``(ii) the term `tobacco products' has the meaning given 
        such term by section 5702(c) of such Code.''.
    (b) Conforming Amendment.--Section 1902(a) (42 U.S.C. 1396a(a)) is 
amended--
            (1) by striking ``and'' at the end of paragraph (61);
            (2) by striking the period at the end of paragraph (62) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (62) the following new 
        paragraph:
            ``(63) provide that the State shall provide prompt notice 
        to the Secretary of the amount of any recovery from a 
        manufacturer of tobacco products, as defined in section 
        1903(d)(7)(C)(i), of expenditures for medical assistance 
        provided under such plan for the treatment of individuals with 
        diseases attributable to the use of tobacco products, as 
        defined in section 1903(d)(7)(C)(ii).''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall apply to amounts recovered on and after the date of the enactment 
of this Act.
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