[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3004 Introduced in House (IH)]

<DOC>






118th CONGRESS
  1st Session
                                H. R. 3004

 To amend the Internal Revenue Code of 1986 to provide for a temporary 
   expansion of health insurance premium tax credits for certain low-
 income populations, and to amend title XIX of the Social Security Act 
                to establish a Federal Medicaid program.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 28, 2023

Mrs. Fletcher introduced the following bill; which was referred to the 
Committee on Ways and Means, and in addition to the Committee on Energy 
    and Commerce, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide for a temporary 
   expansion of health insurance premium tax credits for certain low-
 income populations, and to amend title XIX of the Social Security Act 
                to establish a Federal Medicaid program.

    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 ``Affordable Care Coverage Expansion 
and Support for States Act'' or the ``ACCESS Act''.

SEC. 2. TEMPORARY EXPANSION OF HEALTH INSURANCE PREMIUM TAX CREDITS FOR 
              CERTAIN LOW-INCOME POPULATIONS.

    (a) In General.--Section 36B of the Internal Revenue Code of 1986 
is amended by redesignating subsection (h) as subsection (i) and by 
inserting after subsection (g) the following new subsection:
    ``(h) Certain Temporary Rules Beginning in 2024.--With respect to 
any taxable year beginning after December 31, 2023, and before January 
1, 2027--
            ``(1) Eligibility for credit not limited based on income.--
        Subsection (c)(1)(A) shall be disregarded in determining 
        whether a taxpayer is an applicable taxpayer.
            ``(2) Credit allowed to certain low-income employees 
        offered employer-provided coverage.--Subclause (II) of 
        subsection (c)(2)(C)(i) shall not apply if the taxpayer's 
        household income does not exceed 138 percent of the poverty 
        line for a family of the size involved. Subclause (II) of 
        subsection (c)(2)(C)(i) shall also not apply to an individual 
        described in the last sentence of such subsection if the 
        taxpayer's household income does not exceed 138 percent of the 
        poverty line for a family of the size involved.
            ``(3) Credit allowed to certain low-income employees 
        offered qualified small employer health reimbursement 
        arrangements.--A qualified small employer health reimbursement 
        arrangement shall not be treated as constituting affordable 
        coverage for an employee (or any spouse or dependent of such 
        employee) for any months of a taxable year if the employee's 
        household income for such taxable year does not exceed 138 
        percent of the poverty line for a family of the size involved.
            ``(4) Limitations on recapture.--
                    ``(A) In general.--In the case of a taxpayer whose 
                household income is less than 200 percent of the 
                poverty line for the size of the family involved for 
                the taxable year, the amount of the increase under 
                subsection (f)(2)(A) shall in no event exceed $300 
                (one-half of such amount in the case of a taxpayer 
                whose tax is determined under section 1(c) for the 
                taxable year).
                    ``(B) Limitation on increase for certain non-
                filers.--In the case of any taxpayer who would not be 
                required to file a return of tax for the taxable year 
                but for any requirement to reconcile advance credit 
                payments under subsection (f), if an Exchange 
                established under title I of the Patient Protection and 
                Affordable Care Act has determined that--
                            ``(i) such taxpayer is eligible for advance 
                        payments under section 1412 of such Act for any 
                        portion of such taxable year, and
                            ``(ii) such taxpayer's household income for 
                        such taxable year is projected to not exceed 
                        138 percent of the poverty line for a family of 
                        the size involved,
                subsection (f)(2)(A) shall not apply to such taxpayer 
                for such taxable year and such taxpayer shall not be 
                required to file such return of tax.
                    ``(C) Information provided by exchange.--The 
                information required to be provided by an Exchange to 
                the Secretary and to the taxpayer under subsection 
                (f)(3) shall include such information as is necessary 
                to determine whether such Exchange has made the 
                determinations described in clauses (i) and (ii) of 
                subparagraph (B) with respect to such taxpayer.''.
    (b) Employer Shared Responsibility Provision Not Applicable With 
Respect to Certain Low-Income Taxpayers Receiving Premium Assistance.--
Section 4980H(c)(3) is amended to read as follows:
            ``(3) Applicable premium tax credit and cost-sharing 
        reduction.--
                    ``(A) In general.--The term `applicable premium tax 
                credit and cost-sharing reduction' means--
                            ``(i) any premium tax credit allowed under 
                        section 36B,
                            ``(ii) any cost-sharing reduction under 
                        section 1402 of the Patient Protection and 
                        Affordable Care Act, and
                            ``(iii) any advance payment of such credit 
                        or reduction under section 1412 of such Act.
                    ``(B) Exception with respect to certain low-income 
                taxpayers.--Such term shall not include any premium tax 
                credit, cost-sharing reduction, or advance payment 
                otherwise described in subparagraph (A) if such credit, 
                reduction, or payment is allowed or paid for a taxable 
                year of an employee (beginning after December 31, 2023, 
                and before January 1, 2027) with respect to which--
                            ``(i) an Exchange established under title I 
                        of the Patient Protection and Affordable Care 
                        Act has determined that such employee's 
                        household income for such taxable year is 
                        projected to not exceed 138 percent of the 
                        poverty line for a family of the size involved, 
                        or
                            ``(ii) such employee's household income for 
                        such taxable year does not exceed 138 percent 
                        of the poverty line for a family of the size 
                        involved.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2023.

SEC. 3. CLOSING THE MEDICAID COVERAGE GAP.

    (a) Federal Medicaid Program To Close Coverage Gap in Nonexpansion 
States.--Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) 
is amended by adding at the end the following new section:

``SEC. 1948. FEDERAL MEDICAID PROGRAM TO CLOSE COVERAGE GAP IN 
              NONEXPANSION STATES.

    ``(a) Establishment.--In the case of a State that the Secretary 
determines (based on the State plan under this title, waiver of such 
plan, or other relevant information) is not expected to expend amounts 
under the State plan (or waiver of such plan) for all individuals 
described in section 1902(a)(10)(A)(i)(VIII) during a year (beginning 
with 2027) (in this section defined as `a coverage gap State', with 
respect to such year), the Secretary shall (including through contract 
with eligible entities (as specified by the Secretary), consistent with 
subsection (b)) provide for the offering to such individuals residing 
in such State of a health benefits plan (in this section referred to as 
the `Federal Medicaid program' or the `Program'), for each quarter 
during the period beginning on January 1 of such year, and ending with 
the last day of the first quarter during which the State provides 
medical assistance to all such individuals under the State plan (or 
waiver of such plan). Under the Federal Medicaid program, the 
Secretary--
            ``(1) may use the Federally Facilitated Marketplace to 
        facilitate eligibility determinations and enrollments under the 
        Federal Medicaid Program and shall establish a set of 
        eligibility rules to be applied under the Program in a manner 
        consistent with section 1902(e)(14); and
            ``(2) shall establish benefits, beneficiary protections, 
        and access to care standards by, at a minimum--
                    ``(A) establishing a minimum set of benefits to be 
                provided (and providing such benefits) under the 
                Federal Medicaid program, which shall be in compliance 
                with the requirements of section 1937 and shall consist 
                of benchmark coverage described in section 1937(b)(1) 
                or benchmark equivalent coverage described in section 
                1937(b)(2) to the same extent as medical assistance 
                provided to such an individual under this title 
                (without application of this section) is required under 
                section 1902(k)(1) to consist of such benchmark 
                coverage or benchmark equivalent coverage;
                    ``(B) applying the provisions of sections 
                1902(a)(8), 1902(a)(34) (which may be applied in 
                accordance with such phased-in implementation as the 
                Secretary deems necessary, but beginning as soon as 
                practicable), and 1943 with respect to such an 
                individual, benefits under the Federal Medicaid 
                program, and making application for such benefits 
                (which may be in accordance with a phased-in 
                implementation as the Secretary deems necessary, but 
                beginning as soon as practicable) in the same manner as 
                such provisions would apply to such an individual, 
                medical assistance under this title (other than 
                pursuant to this section), and making application for 
                such medical assistance under this title (other than 
                pursuant to this section); and providing that 
                redeterminations and appeals of eligibility and 
                coverage determinations of services (including benefit 
                reductions, terminations, and suspension) shall be 
                conducted under the Federal Medicaid program in 
                accordance with a Federal fair hearing process 
                established by the Secretary that is subject to the 
                same requirements as applied with respect to 
                redeterminations and appeals of eligibility, and with 
                respect to coverage of services (including benefit 
                reductions, terminations, and suspension), under a 
                State plan under this title and that may provide for 
                such fair hearings related to denials of eligibility 
                (based on modified adjusted gross income eligibility 
                determinations) to be conducted through the Federally 
                Facilitated Marketplace for Exchanges;
                    ``(C) applying, in accordance with subsection (d), 
                the provisions of section 1927 (other than 
                subparagraphs (B) and (C) of subsection (b)(1) of such 
                section) with respect to the Secretary and payment 
                under the Federal Medicaid program for covered 
                outpatient drugs with respect to a rebate period in the 
                same manner and to the same extent as such provisions 
                apply with respect to a State and payment under the 
                State plan for covered outpatient drugs with respect to 
                the rebate period; and
                    ``(D) applying the provisions of sections 
                1902(a)(14), 1902(a)(23), 1902(a)(47), and 1920 through 
                1920C (as applicable) to the Federal Medicaid program 
                and such individuals enrolled in such program in the 
                same manner and to the same extent as such provisions 
                apply to a State plan and such individuals eligible for 
                medical assistance under the State plan, and applying 
                the provisions of section 1902(a)(30)(A) with respect 
                to medical assistance available under the Federal 
                Medicaid program in the same manner and to the same 
                extent as such provisions apply to medical assistance 
                under a State plan under this title, except that--
                            ``(i) the Secretary shall provide that no 
                        cost sharing shall be applied under the Federal 
                        Medicaid program;
                            ``(ii) the Secretary may waive the 
                        provisions of subparagraph (A) of section 
                        1902(a)(23) to the extent deemed appropriate to 
                        facilitate the implementation of managed care; 
                        and
                            ``(iii) in applying the provisions of 
                        section 1902(a)(47) and sections 1920 through 
                        1920C, the Secretary--
                                    ``(I) shall establish a single 
                                presumptive eligibility process for 
                                individuals eligible under the Federal 
                                Medicaid program, under which the 
                                Secretary may contract with entities to 
                                carry out such process; and
                                    ``(II) may apply such provisions 
                                and process in accordance with such 
                                phased-in implementation as the 
                                Secretary deems necessary, but 
                                beginning as soon as practicable.
    ``(b) Administration of Federal Medicaid Program Through Contracts 
With Medicaid Managed Care Organization and Third Party Plan 
Administrator Requirements.--
            ``(1) In general.--For the purpose of administering the 
        benefits under the Program (across all coverage gap geographic 
        areas (as defined in paragraph (8))) to provide medical 
        assistance to individuals described in section 
        1902(a)(10)(A)(i)(VIII) enrolled under the Federal Medicaid 
        program and residing in such areas, the Secretary shall solicit 
        bids described in paragraph (2) and enter into contracts with a 
        total of at least 2 eligible entities (as specified by the 
        Secretary, which may be a medicaid managed care organization 
        (in this section defined as including a managed care 
        organization described in section 1932(a)(1)(B)(i), a prepaid 
        inpatient health plan, and a prepaid ambulatory health plans 
        (as defined in section 438.2 of title 42, Code of Federal 
        Regulations)), a third party plan administrator, or both). An 
        eligible entity entering into a contract with the Secretary 
        under this paragraph may administer such benefits as a Medicaid 
        managed care organization (as so defined), in which case such 
        contract shall be in accordance with paragraph (3) with respect 
        to such geographic area, or as a third-party administrator, in 
        which case such contract shall be in accordance with paragraph 
        (4) with respect to such geographic area. The Secretary may so 
        contract with a Medicaid managed care organization or third 
        party plan administrator in each coverage gap geographic area 
        (and may specify which type of eligible entity may bid with 
        respect to a coverage gap geographic area or areas) and may 
        contract with more than one such eligible entity in the same 
        coverage gap geographic area.
            ``(2) Bids.--
                    ``(A) In general.--To be eligible to enter into a 
                contract under this subsection, for a year, an entity 
                shall submit (at such time, in such manner, and 
                containing such information as specified by the 
                Secretary) one or more bids to administer the Program 
                in one or more coverage gap geographic areas, which 
                reflects the projected monthly cost to the entity of 
                furnishing benefits under the Program to an individual 
                enrolled under the Program in such a geographic area 
                (or areas) for such year.
                    ``(B) Selection.--In selecting from bids submitted 
                under subparagraph (A) for purposes of entering into 
                contracts with eligible entities under this subsection, 
                with respect to a coverage gap geographic area, the 
                Secretary shall take into account at least each of the 
                following, with respect to each such bid:
                            ``(i) Network adequacy (as proposed in the 
                        submitted bid).
                            ``(ii) The amount, duration, and scope of 
                        benefits (such as value-added services offered 
                        in the submitted bid), as compared to the 
                        minimum set of benefits established by the 
                        Secretary under subsection (a)(2)(A).
                            ``(iii) The amount of the bid, taking into 
                        account the average per member cost of 
                        providing medical assistance under State plans 
                        under this title (or waivers of such plans) to 
                        individuals enrolled in such plans (or waivers) 
                        who are at least 18 years of age and residing 
                        in the coverage gap geographic area, as well as 
                        the average cost of providing medical 
                        assistance under State plans under this title 
                        (and waivers of such plans) to individuals 
                        described in section 1902(a)(10)(A)(i)(VIII).
            ``(3) Contract with medicaid managed care organization.--In 
        the case of a contract under paragraph (1) between the 
        Secretary and an eligible entity administering benefits under 
        the Program as a Medicaid managed care organization, with 
        respect to one or more coverage gap geographic areas, the 
        following shall apply:
                    ``(A) The provisions of clauses (i) through (xi) of 
                section 1903(m)(2)(A), clause (xii) of such section (to 
                the extent such clause relates to subsections (b) and 
                (f) of section 1932), and clause (xiii) of such section 
                1903(m)(2)(A) shall, to the greatest extent 
                practicable, apply to the contract, to the Secretary, 
                and to the Medicaid managed care organization, with 
                respect to providing medical assistance under the 
                Federal Medicaid program with respect to such area, in 
                the same manner and to the same extent as such 
                provisions apply to a contract under section 1903(m) 
                between a State and an entity that is a Medicaid 
                managed care organization (as defined in section 
                1903(m)(1)), to the State, and to the entity, with 
                respect to providing medical assistance to individuals 
                eligible for benefits under this title.
                    ``(B) The provisions of section 1932(h) shall apply 
                to the contract, Secretary, and Medicaid managed care 
                organization.
                    ``(C) The contract shall provide that the entity 
                pay claims in a timely manner and in accordance with 
                the provisions of section 1902(a)(37).
                    ``(D) The contract shall provide that the Secretary 
                shall make payments under this section to the entity, 
                with respect to coverage of each individual enrolled 
                under the Program in such a coverage gap geographic 
                area with respect to which the entity administers the 
                Program in an amount specified in the contract, subject 
                to subparagraph (D)(ii) and paragraph (6).
                    ``(E) The contract shall require--
                            ``(i) the application of a minimum medical 
                        loss ratio (as calculated under subsection (d) 
                        of section 438.8 of title 42, Code of Federal 
                        Regulations (or any successor regulation)) for 
                        payment for medical assistance administered by 
                        the managed care organization under the 
                        Program, with respect to a year, that is equal 
                        to or greater than 85 percent (or such higher 
                        percent as specified by the Secretary); and
                            ``(ii) in the case, with respect to a year, 
                        the minimum medical loss ratio (as so 
                        calculated) for payment for services under the 
                        benefits so administered is less than 85 
                        percent (or such higher percent as specified by 
                        the Secretary under clause (i)), remittance by 
                        the organization to the Secretary of any 
                        payments (or portions of payments) made to the 
                        organization under this section in an amount 
                        equal to the difference in payments for medical 
                        assistance, with respect to the year, resulting 
                        from the organization's failure to meet such 
                        ratio for such year.
                    ``(F) The contract shall require that the eligible 
                entity submit to the Secretary the number of 
                individuals enrolled in the Program with respect to 
                each coverage gap geographic area and month with 
                respect to which the contract applies and such 
                additional information as specified by the Secretary 
                for purposes of payment, program integrity, oversight, 
                quality measurement, or such other purpose specified by 
                the Secretary.
                    ``(G) The contract shall require that the eligible 
                entity perform any other activity identified by the 
                Secretary.
            ``(4) Contract with a third party plan administrator.--
                    ``(A) In general.--In the case of a contract under 
                paragraph (1) between the Secretary and an eligible 
                entity to administer the Program as a third party plan 
                administrator, with respect to one or more coverage gap 
                geographic areas, such contract shall provide that, 
                with respect to medical assistance provided under the 
                Federal Medicaid program to individuals who are 
                enrolled in the Program with respect to such area (or 
                areas)--
                            ``(i) the third party plan administrator 
                        shall, consistent with such requirements as may 
                        be established by the Secretary--
                                    ``(I) establish provider networks, 
                                payment rates, and utilization 
                                management, consistent with the 
                                provisions of section 1902(a)(30)(A), 
                                as applied by subsection (a)(4);
                                    ``(II) pay claims in a timely 
                                manner and in accordance with the 
                                provisions of section 1902(a)(37);
                                    ``(III) submit to the Secretary the 
                                number of individuals enrolled in the 
                                Program with respect to each coverage 
                                gap geographic area and month with 
                                respect to which the contract applies 
                                and such additional information as 
                                specified by the Secretary for purposes 
                                of payment, program integrity, 
                                oversight, quality measurement, or such 
                                other purpose specified by the 
                                Secretary; and
                                    ``(IV) perform any other activity 
                                identified by the Secretary; and
                            ``(ii) the Secretary shall make payments 
                        (for the claims submitted by the third party 
                        plan administrator and for an economic and 
                        efficient administrative fee) under this 
                        section to the third party plan administrator, 
                        with respect to coverage of each individual 
                        enrolled under the Program in a coverage gap 
                        geographic area with respect to which the third 
                        party plan administrator administers the 
                        Program in an amount determined under the 
                        contract, subject to subclause (VI)(bb) and 
                        paragraph (7).
                    ``(B) Third party plan administrator defined.--For 
                purposes of this section, the term `third party plan 
                administrator' means an entity that satisfies such 
                requirements as established by the Secretary, which 
                shall include at least that such an entity administers 
                health plan benefits, pays claims under the plan, 
                establishes provider networks, sets payment rates, and 
                are not risk-bearing entities.
            ``(5) Administrative authority.--The Secretary may take 
        such actions as are necessary to administer this subsection, 
        including by setting payment rates, setting network adequacy 
        standards, establishing quality requirements, establishing 
        reporting requirements, and specifying any other program 
        requirements or standards necessary in contracting with 
        specified entities under this subsection, and overseeing such 
        entities, with respect to the administration of the Federal 
        Medicaid program.
            ``(6) Preemption.--In carrying out the duties under a 
        contract entered into under paragraph (1) between the Secretary 
        and a Medicaid managed care organization or a third party plan 
        administrator, with respect to a coverage gap State--
                    ``(A) the Secretary may establish minimum standards 
                and licensure requirements for such a Medicaid managed 
                care organization or third party plan administrator for 
                purposes of carrying out such duties; and
                    ``(B) any provisions of law of that State which 
                relate to the licensing of the organization or 
                administrator and which prohibit the organization or 
                administrator from providing coverage pursuant to a 
                contract under this section shall be superseded.
            ``(7) Penalties.--In the case of an eligible entity with a 
        contract under this section that fails to comply with the 
        requirements of such entity pursuant to this section or such 
        contract, the Secretary may withhold payment (or any portion of 
        such payment) to such entity under this section in accordance 
        with a process specified by the Secretary, impose a corrective 
        action plan on such entity, or impose a civil monetary penalty 
        on such entity in an amount not to exceed $10,000 for each such 
        failure. In implementing this paragraph, the Secretary shall 
        have the authorities provided the Secretary under section 
        1932(e) and subparts F and I of part 438 of title 42, Code of 
        Federal Regulations.
            ``(8) Coverage gap geographic area.--For purposes of this 
        section, the term `coverage gap geographic area' means an area 
        of one or more coverage gap States, as specified by the 
        Secretary, or any area within such a State, as specified by the 
        Secretary.
    ``(c) Periodic Data Matching.--The Secretary shall, including 
through contract, periodically verify the income of an individual 
enrolled in the Federal Medicaid program for a year, before the end of 
such year, to determine if there has been any change in the 
individual's eligibility for benefits under the program. For purposes 
of the previous sentence, the Secretary may verify income of an 
individual based on the prospective income of the individual for such 
year or based on current monthly income of the individual, as specified 
by the Secretary. In the case that, pursuant to such verification, an 
individual is determined to have had a change in income that results in 
such individual no longer be included as an individual described in 
section 1902(a)(10)(A)(i)(VIII), the Secretary shall apply the same 
processes and protections as States are required under this title to 
apply with respect to an individual who is determined to have had a 
change in income that results in such individual no longer being 
included as eligible for medical assistance under this title (other 
than pursuant to this section).
    ``(d) Drug Rebates.--For purposes of subsection (a)(2)(B), in 
applying section 1927, the Secretary shall (either directly or through 
contracts)--
            ``(1) require an eligible entity with a contract under 
        subsection (b) to report the data required to be reported under 
        section 1927(b)(2) by a State agency and require such entity to 
        submit to the Secretary rebate data, utilization data, and any 
        other information that would otherwise be required under 
        section 1927 to be submitted to the Secretary by a State;
            ``(2) shall take such actions as are necessary and develop 
        or adapt such processes and mechanisms as are necessary to 
        report and collect data as is necessary and to bill and track 
        rebates under section 1927, as applied pursuant to subsection 
        (a)(2)(B) for drugs that are provided under the Federal 
        Medicaid program;
            ``(3) provide that the coverage requirements of 
        prescription drugs under the Federal Medicaid program comply 
        with the coverage requirements section 1927; and
            ``(4) require that in order for payment to be available 
        under the Federal Medicaid program or under section 1903(a) for 
        covered outpatient drugs of a manufacturer, the manufacturer 
        must have entered into and have in effect a rebate agreement to 
        provide rebates under section 1927 to the Federal Medicaid 
        program in the same form and manner as the manufacturer is 
        required to provide rebates under an agreement described in 
        section 1927(b) to a State Medicaid program under this title.
    ``(e) Transitions.--
            ``(1) From exchange plans onto federal medicaid program.--
        The Secretary shall provide for a process under which, in the 
        case of individuals described in section 
        1902(a)(10)(A)(i)(VIII) who are enrolled in qualified health 
        plans through an Exchange in a coverage gap State, the 
        Secretary takes such steps as are necessary to transition such 
        individuals to coverage under the Federal Medicaid program. 
        Such process shall apply procedures described in section 
        1943(b)(1)(C) to screen for eligibility and enrollment under 
        the Federal Medicaid program in the same manner as such 
        procedures screen for eligibility and enrollment under 
        qualified health plans through an Exchange established under 
        title I of the Patient Protection and Affordable Care Act.
            ``(2) In case coverage gap state begins providing coverage 
        under state plan.--The Secretary shall provide for a process 
        for, in the case of a coverage gap State in which the State 
        begins to provide medical assistance to individuals described 
        in section 1902(a)(10)(A)(i)(VIII) under the State plan (or 
        waiver of such plan) and the Federal Medicaid program ceases to 
        be offered, transitioning individuals from such program to the 
        State plan (or waiver), as eligible, including a process for 
        transitioning all eligibility redeterminations.
    ``(f) Coordination With and Enrollment Through Exchanges.--The 
Secretary shall take such actions as are necessary to provide, in the 
case of a coverage gap State in which the Federal Medicaid program is 
offered, for the availability of information on, determinations of 
eligibility for, and enrollment in such program through and coordinated 
with the Exchange established with respect to such State under title I 
of the Patient Protection and Affordable Care Act.
    ``(g) Third Party Liability.--The provisions of section 1902(a)(25) 
shall apply with respect to the Federal Medicaid program, the 
Secretary, and the eligible entities with a contract under subsection 
(b) in the same manner as such provisions apply with respect to State 
plans under this title (or waiver of such plans) and the State or local 
agency administering such plan (or waiver). The Secretary may specify a 
timeline (which may include a phase-in) for implementing this 
subsection.
    ``(h) Fraud And Abuse Provisions.--Provisions of law (other than 
criminal law provisions) identified by the Secretary by regulation, in 
consultation (as appropriate) with the Inspector General of the 
Department of Health and Human Services, that impose sanctions with 
respect to waste, fraud, and abuse under this title or title XI, such 
as the False Claims Act, as well as provisions of law (other than 
criminal law provisions) identified by the Secretary that provide 
oversight authority, shall also apply to the Federal Medicaid program.
    ``(i) Maintenance of Effort.--
            ``(1) Payment.--
                    ``(A) In general.--In the case of a State that, as 
                of January 1, 2027, is expending amounts for all 
                individuals described in section 
                1902(a)(10)(A)(i)(VIII) under the State plan (or waiver 
                of such plan) and that stops expending amounts for all 
                such individuals under the State plan (or waiver of 
                such plan), such State shall for each quarter beginning 
                after January 1, 2027, during which such State does not 
                expend amounts for all such individuals provide for 
                payment under this subsection to the Secretary of the 
                product of--
                            ``(i) 10 percent of, subject to 
                        subparagraph (B), the average monthly per 
                        capita costs expended under the State plan (or 
                        waiver of such plan) for such individuals 
                        during the most recent previous quarter with 
                        respect to which the State expended amounts for 
                        all such individuals; and
                            ``(ii) the sum, for each month during such 
                        quarter, of the number of individuals enrolled 
                        under such program in such State.
                    ``(B) Annual increase.--For purposes of 
                subparagraph (A), in the case of a State with respect 
                to which such subparagraph applies with respect to a 
                period of consecutive quarters occurring during more 
                than one calendar year, for such consecutive quarters 
                occurring during the second of such calendar years or a 
                subsequent calendar year, the average monthly per 
                capita costs for each such quarter for such State 
                determined under subparagraph (A)(i), or this 
                subparagraph, shall be annually increased by the 
                Secretary by the percentage increase in Medicaid 
                spending under this title during the preceding year (as 
                determined based on the most recent National Health 
                Expenditure data with respect to such year).
            ``(2) Form and manner of payment.--Payment under paragraph 
        (1) shall be made in a form and manner specified by the 
        Secretary.
            ``(3) Compliance.--If a State fails to pay to the Secretary 
        an amount required under paragraph (1), interest shall accrue 
        on such amount at the rate provided under section 1903(d)(5). 
        The amount so owed and applicable interest shall be immediately 
        offset against amounts otherwise payable to the State under 
        section 1903(a), in accordance with the Federal Claims 
        Collection Act of 1996 and applicable regulations.
            ``(4) Data match.--The Secretary shall perform such 
        periodic data matches as may be necessary to identify and 
        compute the number of individuals enrolled under the Federal 
        Medicaid program under section 1948 in a coverage gap State (as 
        referenced in subsection (a) of such section) for purposes of 
        computing the amount under paragraph (1).
            ``(5) Notice.--The Secretary shall notify each State 
        described in paragraph (1) not later than a date specified by 
        the Secretary that is before the beginning of each quarter 
        (beginning with 2027) of the amount computed under paragraph 
        (1) for the State for that year.
    ``(j) Appropriations.--There is appropriated, out of any funds in 
the Treasury not otherwise appropriated, for each fiscal year such sums 
as are necessary to carry out subsections (a) through (i) of this 
section.''.
    (b) Drug Rebate Conforming Amendment.--Section 1927(a)(1) of the 
Social Security Act (42 U.S.C. 1396r-8(a)(1)) is amended in the first 
sentence--
            (1) by striking ``or under part B of title XVIII'' and 
        inserting ``, under the Federal Medicaid program under section 
        1948, or under part B of title XVIII''; and
            (2) by inserting ``including as such subsection is applied 
        pursuant to subsections (a)(2)(C) and (d) of section 1948 with 
        respect to the Federal Medicaid program,'' before ``and must 
        meet''.
                                 <all>