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.