42 U.S.C. § 1396w — Asset verification through access to in-

Page 4403 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1396w 1 See References in Text note below. in effect July 16, 1996, see section 1396u–1(a) of this title. § 1396w. Asset verification through access to in- formation held by financial institutions (a) Implementation (1) In general Subject to the provisions of this section, each State shall implement an asset verification program described in subsection (b), for purposes of determining or redeter- mining the eligibility of an individual for medical assistance under the State plan under this subchapter. (2) Plan submittal In order to meet the requirement of para- graph (1), each State shall— (A) submit not later than a deadline speci- fied by the Secretary consistent with para- graph (3), a State plan amendment under this subchapter that describes how the State intends to implement the asset verification program; and (B) provide for implementation of such program for eligibility determinations and redeterminations made on or after 6 months after the deadline established for submittal of such plan amendment. (3) Phase-in (A) In general (i) Implementation in current asset verification demo States The Secretary shall require those States specified in subparagraph (C) (to which an asset verification program has been ap- plied before June 30, 2008) to implement an asset verification program under this sub- section by the end of fiscal year 2009. (ii) Implementation in other States The Secretary shall require other States to submit and implement an asset verification program under this subsection in such manner as is designed to result in the application of such programs, in the aggregate for all such other States, to en- rollment of approximately, but not less than, the following percentage of enroll- ees, in the aggregate for all such other States, by the end of the fiscal year in- volved: (I) 12.5 percent by the end of fiscal year 2009. (II) 25 percent by the end of fiscal year 2010. (III) 50 percent by the end of fiscal year 2011. (IV) 75 percent by the end of fiscal year 2012. (V) 100 percent by the end of fiscal year 2013. (iii) Implementation in Puerto Rico The Secretary shall require Puerto Rico to implement an asset verification pro- gram under this subsection by January 1, 2026. (B) Consideration In selecting States under subparagraph (A)(ii), the Secretary shall consult with the States involved and take into account the feasibility of implementing asset verification programs in each such State. (C) States specified The States specified in this subparagraph are California, New York, and New Jersey. (D) Construction Nothing in subparagraph (A)(ii) shall be construed as preventing a State from re- questing, and the Secretary from approving, the implementation of an asset verification program in advance of the deadline other- wise established under such subparagraph. (4) Exemption of certain territories This section shall only apply to the 50 States, the District of Columbia, and Puerto Rico. (b) Asset verification program (1) In general For purposes of this section, an asset verification program means a program de- scribed in paragraph (2) under which a State— (A) requires each applicant for, or recipi- ent of, medical assistance under the State plan under this subchapter on the basis of being aged, blind, or disabled to provide au- thorization by such applicant or recipient (and any other person whose resources are required by law to be disclosed to determine the eligibility of the applicant or recipient for such assistance) for the State to obtain (subject to the cost reimbursement require- ments of section 1115(a) of the Right to Fi- nancial Privacy Act 1 [12 U.S.C. 3415] but at no cost to the applicant or recipient) from any financial institution (within the mean- ing of section 1101(1) of such Act [12 U.S.C. 3401(1)]) any financial record (within the meaning of section 1101(2) of such Act) held by the institution with respect to the appli- cant or recipient (and such other person, as applicable), whenever the State determines the record is needed in connection with a de- termination with respect to such eligibility for (or the amount or extent of) such med- ical assistance; and (B) uses the authorization provided under subparagraph (A) to verify the financial re- sources of such applicant or recipient (and such other person, as applicable), in order to determine or redetermine the eligibility of such applicant or recipient for medical as- sistance under the State plan. (2) Program described A program described in this paragraph is a program for verifying individual assets in a manner consistent with the approach used by the Commissioner of Social Security under section 1383(e)(1)(B)(ii) of this title. (c) Duration of authorization Notwithstanding section 1104(a)(1) of the Right to Financial Privacy Act 1 [12 U.S.C. 3404(a)(1)], an authorization provided to a State under sub- section (b)(1) shall remain effective until the earliest of— Page 4404 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1396w (1) the rendering of a final adverse decision on the applicant’s application for medical as- sistance under the State’s plan under this sub- chapter; (2) the cessation of the recipient’s eligibility for such medical assistance; or (3) the express revocation by the applicant or recipient (or such other person described in subsection (b)(1), as applicable) of the author- ization, in a written notification to the State. (d) Treatment of Right to Financial Privacy Act requirements (1) An authorization obtained by the State under subsection (b)(1) shall be considered to meet the requirements of the Right to Financial Privacy Act 1 for purposes of section 1103(a) of such Act [12 U.S.C. 3403(a)], and need not be fur- nished to the financial institution, notwith- standing section 1104(a) of such Act [12 U.S.C. 3404(a)]. (2) The certification requirements of section 1103(b) of the Right to Financial Privacy Act 1 [12 U.S.C. 3403(b)] shall not apply to requests by the State pursuant to an authorization provided under subsection (b)(1). (3) A request by the State pursuant to an au- thorization provided under subsection (b)(1) is deemed to meet the requirements of section 1104(a)(3) of the Right to Financial Privacy Act 1 [12 U.S.C. 3404(a)(3)] and of section 1102 of such Act [12 U.S.C. 3402], relating to a reasonable de- scription of financial records. (e) Required disclosure The State shall inform any person who pro- vides authorization pursuant to subsection (b)(1)(A) of the duration and scope of the author- ization. (f) Refusal or revocation of authorization If an applicant for, or recipient of, medical as- sistance under the State plan under this sub- chapter (or such other person described in sub- section (b)(1), as applicable) refuses to provide, or revokes, any authorization made by the ap- plicant or recipient (or such other person, as ap- plicable) under subsection (b)(1)(A) for the State to obtain from any financial institution any fi- nancial record, the State may, on that basis, de- termine that the applicant or recipient is ineli- gible for medical assistance. (g) Use of contractor For purposes of implementing an asset verification program under this section, a State may select and enter into a contract with a pub- lic or private entity meeting such criteria and qualifications as the State determines appro- priate, consistent with requirements in regula- tions relating to general contracting provisions and with section 1396b(i)(2) of this title. In car- rying out activities under such contract, such an entity shall be subject to the same require- ments and limitations on use and disclosure of information as would apply if the State were to carry out such activities directly. (h) Technical assistance The Secretary shall provide States with tech- nical assistance to aid in implementation of an asset verification program under this section. (i) Reports A State implementing an asset verification program under this section shall furnish to the Secretary such reports concerning the program, at such times, in such format, and containing such information as the Secretary determines appropriate. (j) Treatment of program expenses Notwithstanding any other provision of law, reasonable expenses of States in carrying out the program under this section shall be treated, for purposes of section 1396b(a) of this title, in the same manner as State expenditures specified in paragraph (7) of such section. (k) Reduction in FMAP after 2020 for non-com- pliant States (1) In general With respect to a calendar quarter, the Fed- eral medical assistance percentage otherwise determined under section 1396d(b) of this title for— (A) a non-compliant State that is one of the 50 States or the District of Columbia shall be reduced— (i) for calendar quarters in 2021 and 2022, by 0.12 percentage points; (ii) for calendar quarters in 2023, by 0.25 percentage points; (iii) for calendar quarters in 2024, by 0.35 percentage points; and (iv) for calendar quarters in 2025 and each year thereafter, by 0.5 percentage points; and (B) a non-compliant State that is Puerto Rico shall be reduced— (i) for calendar quarters in fiscal year 2026 beginning on or after January 1, 2026, by 0.12 percentage points; (ii) for calendar quarters in fiscal year 2027, by 0.25 percentage points; (iii) for calendar quarters in fiscal year 2028, by 0.35 percentage points; and (iv) for calendar quarters in fiscal year 2029 and each fiscal year thereafter, by 0.5 percentage points. (2) Non-compliant State defined For purposes of this subsection, the term ‘‘non-compliant State’’ means a State— (A) that is one of the 50 States, the Dis- trict of Columbia, or Puerto Rico; (B) with respect to which the Secretary has not approved a State plan amendment submitted under subsection (a)(2); and (C) that is not operating, on an ongoing basis, an asset verification program in ac- cordance with this section. (Aug. 14, 1935, ch. 531, title XIX, § 1940, as added Pub. L. 110–252, title VII, § 7001(d)(1), June 30, 2008, 122 Stat. 2391; amended Pub. L. 116–3, § 4, Jan. 24, 2019, 133 Stat. 7; Pub. L. 117–328, div. FF, title V, § 5101(c), Dec. 29, 2022, 136 Stat. 5935.) Editorial Notes REFERENCES IN TEXT The Right to Financial Privacy Act, referred to in subsecs. (b) to (d), probably means the Right to Finan- cial Privacy Act of 1978, title XI of Pub. L. 95–630, Nov. Page 4405 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1396w–1 10, 1978, 92 Stat. 3697, which is classified generally to chapter 35 (§ 3401 et seq.) of Title 12, Banks and Bank- ing. For complete classification of this Act to the Code, see Short Title note set out under section 3401 of Title 12 and Tables. AMENDMENTS 2022—Subsec. (a)(3)(A)(iii). Pub. L. 117–328, § 5101(c)(1)(A), added cl. (iii). Subsec. (a)(4). Pub. L. 117–328, § 5101(c)(1)(B), sub- stituted ‘‘Exemption of certain territories’’ for ‘‘Ex- emption of territories’’ in heading and ‘‘, the District of Columbia, and Puerto Rico’’ for ‘‘and the District of Columbia’’ in text. Subsec. (k)(1). Pub. L. 117–328, § 5101(c)(2)(A), in intro- ductory provisions, struck out ‘‘beginning on or after January 1, 2021’’ after ‘‘With respect to a calendar quar- ter’’; substituted ‘‘for—’’ and subpar. (A) for ‘‘for a non- compliant State shall be reduced—’’; redesignated former subpars. (A) to (D) as cls. (i) to (iv), respec- tively, of subpar. (A) and realigned margins; and added subpar. (B). Subsec. (k)(2)(A). Pub. L. 117–328, § 5101(c)(2)(B), sub- stituted ‘‘, the District of Columbia, or Puerto Rico’’ for ‘‘or the District of Columbia’’. 2019—Subsec. (k). Pub. L. 116–3 added subsec. (k). § 1396w–1. Medicaid Improvement Fund (a) Establishment The Secretary shall establish under this sub- chapter a Medicaid Improvement Fund (in this section referred to as the ‘‘Fund’’) which shall be available to the Secretary to improve the management of the Medicaid program by the Centers for Medicare & Medicaid Services, in- cluding oversight of contracts and contractors and evaluation of demonstration projects, and, in accordance with subsection (b)(3), for the pur- poses of subparagraph (B) of such subsection. Payments made for activities under this sub- section shall be in addition to payments that would otherwise be made for such activities. (b) Funding (1) In general There shall be available to the Fund, for ex- penditures from the Fund for fiscal year 2023 and thereafter, $0. (2) Funding limitation Amounts in the Fund pursuant to paragraph (1) shall be available in advance of appropria- tions but only if the total amount obligated from the Fund does not exceed the amount available to the Fund under paragraph (1). Amounts in the Fund pursuant to paragraph (3) shall be available in advance of appropria- tions but only if the total amount obligated from the Fund does not exceed the amount available to the Fund under such paragraph (3). The Secretary may obligate funds from the Fund only if the Secretary determines (and the Chief Actuary of the Centers for Medicare & Medicaid Services and the appropriate budg- et officer certify) that there are available in the Fund sufficient amounts to cover all such obligations incurred consistent with the pre- vious sentences. (3) Additional funding for State activities relat- ing to mechanized claims systems (A) In general In addition to the amount made available under paragraph (1), there shall be available to the Fund, for expenditures from the Fund in accordance with subparagraph (B), for fis- cal year 2028 and thereafter, $0, to remain available until expended. (B) Purposes The Secretary shall use amounts made available to the Fund under subparagraph (A) to pay to each State which has a plan ap- proved under this subchapter, for each quar- ter beginning during or after fiscal year 2025 an amount equal to— (i) 100 percent minus the percent speci- fied in clause (i) of section 1396b(a)(3)(A) of this title of so much of the sums expended by the State during such quarter as are at- tributable to the activities described in such clause; (ii) 100 percent minus the Federal med- ical assistance percentage applied under clause (iii) of such section of so much of the sums expended during such quarter (as found necessary by the Secretary under such clause) by the State as are attrib- utable to the activities described in such clause; and (iii) 100 percent minus the percent speci- fied in section 1396b(a)(3)(B) of this title of so much of the sums expended by the State during such quarter as are attributable to the activities described in such section. (Aug. 14, 1935, ch. 531, title XIX, § 1941, as added Pub. L. 110–252, title VII, § 7002(b), June 30, 2008, 122 Stat. 2395; amended Pub. L. 111–8, div. F, title II, § 226, Mar. 11, 2009, 123 Stat. 784; Pub. L. 111–127, § 4, Jan. 27, 2010, 124 Stat. 5; Pub. L. 111–148, title II, § 2007(b), Mar. 23, 2010, 124 Stat. 285; Pub. L. 114–198, title VII, § 707, July 22, 2016, 130 Stat. 754; Pub. L. 115–120, div. C, § 3006, Jan. 22, 2018, 132 Stat. 37; Pub. L. 115–123, div. E, title XII, § 53105, Feb. 9, 2018, 132 Stat. 302; Pub. L. 115–271, title V, § 5061, Oct. 24, 2018, 132 Stat. 3976; Pub. L. 116–3, § 5, Jan. 24, 2019, 133 Stat. 8; Pub. L. 116–29, § 2, July 5, 2019, 133 Stat. 1031; Pub. L. 116–59, div. B, title VI, § 1604, Sept. 27, 2019, 133 Stat. 1108; Pub. L. 116–69, div. B, title VI, § 1602, Nov. 21, 2019, 133 Stat. 1139; Pub. L. 116–159, div. C, title VI, § 2602, Oct. 1, 2020, 134 Stat. 738; Pub. L. 116–215, div. B, title III, § 1303, Dec. 11, 2020, 134 Stat. 1046; Pub. L. 116–260, div. CC, title IV, § 406, Dec. 27, 2020, 134 Stat. 3003; Pub. L. 117–328, div. FF, title V, § 5141, Dec. 29, 2022, 136 Stat. 5953; Pub. L. 118–15, div. B, title III, § 2342, Sept. 30, 2023, 137 Stat. 96; Pub. L. 118–22, div. B, title II, § 302, Nov. 17, 2023, 137 Stat. 121; Pub. L. 118–35, div. B, title I, § 122, Jan. 19, 2024, 138 Stat. 6; Pub. L. 118–42, div. G, title I, § 212, Mar. 9, 2024, 138 Stat. 414.) Editorial Notes AMENDMENTS 2024—Subsec. (b)(3)(A). Pub. L. 118–42 substituted ‘‘$0’’ for ‘‘$5,140,428,729’’. Pub. L. 118–35 substituted ‘‘$5,140,428,729’’ for ‘‘$5,796,117,810’’. 2023—Subsec. (b)(3)(A). Pub. L. 118–22 substituted ‘‘$5,796,117,810’’ for ‘‘$6,357,117,810’’. Pub. L. 118–15 substituted ‘‘$6,357,117,810’’ for ‘‘$7,000,000,000’’. 2022—Subsec. (b)(3)(A). Pub. L. 117–328 substituted ‘‘for fiscal year 2028 and thereafter, $7,000,000,000’’ for ‘‘for fiscal year 2025 and thereafter, $0’’.