Medicaid Third Party Liability Act

This bill updates Medicaid rules to clarify how states handle payments when other insurance providers (like employer plans) are responsible for covering medical costs. It requires states to verify if Medicaid patients have other insurance coverage before paying for services, and mandates that state contracts with health insurers (including managed care plans) specify whether the insurer handles third-party billing or transfers that responsibility to the state. These changes apply to new contracts after January 1, 2026, and states must document insurance status to maintain federal funding for those cases. The bill does not change Medicaid eligibility but adjusts administrative processes for billing and recovery.