President Trump Signs the Bipartisan Budget Act of 2018 on February 9, 2018

The Act includes a repeal of language that would have expanded the authority of Medicaid State plans to seek recovery for items and services covered under Medicaid from third party payments even when the third party payments were not related to the items or services. It has been recognized for some time that this provision, originally enacted back in 2013, failed to recognize that payments under workers’ compensation and liability policies and plans could be made that did not align with Medicaid items and services.

The language enacted in the BBA of 2018 repeals the 2013 enacted provision.

The language of the repeal goes beyond earlier discussions with Congressional staff that indicated there would be a two year further delay. The effect of the amendment language will be to restore the previous language as operative. That language directs state Medicaid plans to seek recovery only where the amount of reimbursement the State can reasonably expect to recover exceeds the costs of such recovery and then to recover  to the extent of such third party liability. As a practical matter this means that state Medicaid plans addressing this issue will not be revised from the provisions prior to the 2013 amendments. The 2013 amendments with respect to this issue have been continuously delayed since 2014 through short term provisions but now are permanently repealed.

The prior language now continues to  provide that the State is considered to have acquired the rights of such individual to payment by any other party for such health care items or services instead of the broader authority to recover from any payments by the third party.

We continue to work through this language with congressional staff and CMS to assure that only amounts for items or services paid or for which there is an obligation under the applicable workers’ compensation law are subject to recovery.

The actual language providing for the repeal is set out below. Click here for the bill as enacted (see pages 612-615).

REPEAL LANGUAGE

SEC. 53102. THIRD PARTY LIABILITY IN MEDICAID AND CHIP.
(a) MODIFICATION OF THIRD PARTY LIABILITY RULES RELATED TO SPECIAL TREATMENT OF CERTAIN TYPES OF CARE AND PAYMENTS.—
(1) IN GENERAL.—Section 1902(a)(25)(E) of the Social Security Act (42 U.S.C. 1396a(a)(25)(E)) is amended, in the matter preceding clause (i), by striking ‘‘prenatal or’’.
(2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall take effect on the date of enactment of this Act.

(b) DELAY IN EFFECTIVE DATE AND REPEAL OF CERTAIN BIPARTISAN BUDGET ACT OF 2013 AMENDMENTS.—
(1) REPEAL.—Effective as of September 30, 2017, subsection (b) of section 202 of the Bipartisan Budget Act of 2013 (Public Law 113–67; 127 Stat. 1177; 42 U.S.C. 1396a note) (including any amendments made by such subsection) is repealed and the provisions amended by such subsection shall be applied and administered as if such amendments had never been enacted.
(2) DELAY IN EFFECTIVE DATE.—Subsection 6 (c) of section 202 of the Bipartisan Budget Act of 2013 (Public Law 113–67; 127 Stat. 1177; 42 8 U.S.C. 1396a note) is amended to read as follows:
(c) EFFECTIVE DATE.—The amendments made by subsection (a) shall take effect on October 1, 2019..
(3) EFFECTIVE DATE; TREATMENT.—The repeal and amendment made by this subsection shall  take effect as if enacted on September 30, 2017, and shall apply with respect to any open claims, including claims pending, generated, or filed, after such date. The amendments made by subsections (a) and (b) of section 202 of the Bipartisan Budget Act of  2013 (Public Law 113–67; 127 Stat. 1177; 42 U.S.C. 1396a note) that took effect on October 1, 2017, are null and void and section 1902(a)(25) of the Social Security Act (42 U.S.C. 1396a(a)(25)) shall be applied and administered as if such amendments had not taken effect on such date.