S. 523 — Protect Medicaid Act

This section prohibits federal Medicaid payments for administrative costs of state programs providing health benefits to noncitizens ineligible for Medicaid due to lacking satisfactory immigration status (i.e., unauthorized immigrants). (Thus, states receive no federal matching funds under the Federal Medical Assistance Percentage (FMAP) for such administrative costs but may receive payment for establishing or operating compliance verification systems.)

This section directs the Inspector General of the Department of Health and Human Services to submit to Congress, not later than 180 days after the date of enactment, a report on states that provide health benefits to noncitizens ineligible for Medicaid due to immigration status. The report must include (1) how such states separate Medicaid program administrative costs from administrative costs for benefits provided to such noncitizens; (2) the procedures, protocols, or systems used by such states to ensure compliance with federal funding prohibitions for such noncitizens and their effectiveness; (3) a description of such states' financing methods for these programs, including provider taxes and intergovernmental transfers used for the non-federal Medicaid share for eligible individuals; and (4) an analysis of the extent to which such noncitizens receive covered outpatient drugs under the Medicaid Drug Rebate Program or the 340B drug discount program and the resulting effect on average manufacturer prices (including whether prices would be lower absent such provision).