Amends title XIX (Medicaid) of the Social Security Act to prohibit any Medicaid-related funds recovered or paid to a State as part of a settlement or judgment reached in litigation the State initiated or pursued against one or more tobacco companies from being treated as an overpayment.
Permits a State to use amounts recovered or paid to it as part of such a settlement or judgment for any appropriate expenditures, except with respect to any expenditure for administrative expenses incurred in initiating or pursuing tobacco litigation.
[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 346 Introduced in Senate (IS)]
106th CONGRESS
1st Session
S. 346
To amend title XIX of the Social Security Act to prohibit the
recoupment of funds recovered by States from one or more tobacco
manufacturers.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 3, 1999
Mrs. Hutchison (for herself, Mr. Graham, Mr. Voinovich, Mr. Abraham,
Mr. McConnell, Mr. McCain, Mr. Lott, Mr. Leahy, Mr. Smith of Oregon,
Mr. Gorton, Mrs. Murray, Mr. Allard, Mr. Burns, Mr. Frist, Mr. Cochran,
Mr. Craig, Mr. Bunning, Mr. Kyl, Mr. Lugar, Mr. Inhofe, Mr. Hutchinson,
Mr. Mack, Mrs. Lincoln, Mr. Torricelli, Mr. Bayh, Mr. Murkowski, Mr.
Gramm, and Mr. Thompson) introduced the following bill; which was read
twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend title XIX of the Social Security Act to prohibit the
recoupment of funds recovered by States from one or more tobacco
manufacturers.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. FINDINGS.
Congress makes the following findings:
(1) Over the last decade, State governments initiated
lawsuits against the tobacco industry, asserting a variety of
claims, including the violation of consumer fraud and other
State consumer protection laws, antitrust violations, unjust
enrichment, conspiracy, racketeering, and others. Several State
lawsuits did not include any claims for reimbursement of
tobacco-related health care costs paid under the medicaid
program.
(2) The lawsuits against the tobacco industry were
initiated by the States without any financial, technical, or
other assistance from any branch or agency of the Federal
Government, at any stage of the litigation or settlement
process.
(3) Culminating in a comprehensive, 46-State agreement
reached in November, 1998, all of the States, the District of
Columbia, and the United States territories, have entered into
settlement agreements with the major tobacco manufacturers in
the United States. The States' Attorneys General carefully
crafted these agreements to reflect only State costs, direct
damages, civil penalties, disgorgement of profits, injunctive
relief, and other appropriate remedies.
(4) States that entered into the comprehensive, 46-State
settlement agreement, as well as the other States that entered
into individual settlement agreements, have planned for or have
begun to plan for the allocation and expenditure of the funds
received under those agreements. Several States have already
received and expended funds under those agreements.
(5) The medicaid third party recovery provisions of the
Social Security Act do not encompass, nor did Congress intend
them to apply to, situations in which States initiate lawsuits
on behalf of all their residents against manufacturers of
products, asserting a variety of consumer protection and other
causes of action.
(6) If the Secretary of Health and Human Services were to
claim that each of the States' settlement agreements include
the existence of specific medicaid claims, arbitrarily assume
that some portion of the settlement funds received by the
States are related to such medicaid recovery claims, and then
seek to recoup what is determined to be the Federal share of
those funds, it would likely result in protracted and costly
litigation that would cause unnecessary conflict between the
States and the Federal Government and would delay or preclude
States from using their settlement funds for the health and
welfare of their residents, as determined by the needs and
priorities of those residents.
SEC. 2. PROHIBITION ON TREATING ANY FUNDS RECOVERED FROM TOBACCO
COMPANIES AS AN OVERPAYMENT FOR PURPOSES OF MEDICAID.
(a) Amendment to Social Security Act.--Section 1903(d)(3) of the
Social Security Act (42 U.S.C. 1396b(d)(3)) is amended--
(1) by inserting ``(A)'' after ``(3)''; and
(2) by adding at the end the following:
``(B)(i) Subparagraph (A) and paragraph (2)(B) shall not
apply to any amount recovered or paid to a State as part of the
comprehensive settlement of November 1998 between manufacturers
of tobacco products, as defined in section 5702(d) of the
Internal Revenue Code of 1986, and State Attorneys General, or
as part of any individual State settlement or judgment reached
in litigation initiated or pursued by a State against one or
more such manufacturers.
``(ii) Except as provided in subsection (i)(19), a State
may use amounts recovered or paid to the State as part of a
comprehensive or individual settlement, or a judgment,
described in clause (i) for any expenditures determined
appropriate by the State.''.
(b) Prohibition on Payment for Administrative Expenses Incurred in
Pursuing Tobacco Litigation.--Section 1903(i) of the Social Security
Act (42 U.S.C. 1396b(i)) is amended--
(1) in paragraph (18), by striking the period and inserting
``; or''; and
(2) by inserting after paragraph (18) the following new
paragraph:
``(19) with respect to any amount expended on
administrative costs to initiate or pursue litigation described
in subsection (d)(3)(B).''.
(c) Effective Date.--This section and the amendments made by this
section shall apply to amounts paid to a State prior to, on, or after
the date of enactment of this Act.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S1157-1158)
Read twice and referred to the Committee on Finance.
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