INCREASING STATE FLEXIBILITY WITH RESPECT TO THIRD PARTY LIABILITY.

SEC. 202. INCREASING STATE FLEXIBILITY WITH RESPECT TO THIRD PARTY LIABILITY. (a) In General.—Section 1902(a)(25)(I) of the Social Security Act (42 U.S.C. 1396a(a)(25)(I)) is amended— (1) by amending clause (ii) to read as follows: “(ii)(I) 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 (or under a waiver of such plan); and “(II) in the case of a responsible third party (other than the original medicare fee-for-service program under parts A and B of title XVIII, a Medicare Advantage plan offered by a Medicare Advantage organization under part C of such title, a reasonable cost reimbursement plan under section 1876, a health care prepayment plan under section 1833, or a prescription drug plan offered by a PDP sponsor under part D of such title) that requires prior authorization for an item or service furnished to an individual eligible to receive medical assistance under this title, accept authorization provided by the State that the item or service is covered under the State plan (or waiver of such plan) for such individual, as if such authorization were the prior authorization made by the third party for such item or service;” ; (2) in clause (iii)— (A) by striking “respond to any inquiry” and inserting “not later than 60 days after receiving any inquiry”; and (B) by striking “; and” at the end and inserting “, respond to such inquiry; and”; and (3) in clause (iv)— (A) by striking “or a failure” and inserting “a failure”; and (B) by inserting after “the basis of the claim” the following: “, or in the case of a responsible third party (other than the original medicare fee-for-service program 136 STAT. 804 under parts A and B of title XVIII, a Medicare Advantage plan offered by a Medicare Advantage organization under part C of such title, a reasonable cost reimbursement plan under section 1876, a health care prepayment plan under section 1833, or a prescription drug plan offered by a PDP sponsor under part D of such title) a failure to obtain a prior authorization for the item or service for which the claim is being submitted”; (b) [42 U.S.C. 1396a note] Effective Date.— (1) In general.—Except as provided in paragraph (2), the amendments made by this section shall apply beginning on January 1, 2024. (2) Exception if state legislation required.—In the case of a State plan for medical assistance under title XIX of the Social Security Act that the Secretary of Health and Human Services determines requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirement imposed by the amendments made under this section, the State plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet this additional requirement before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.