This Act may be cited as the Medicaid Staffing Flexibility and Protection Act of 2025.

(a) Requirements With Respect to Eligibility Determinations Section 1902(a)(5) of the Social Security Act (42 U.S.C. 1396a(a)(5)U.S. Code — Title 42, Section 1396a(a)(5)View official source on GovInfo) is amended by inserting before the semicolon at the end the following:, but such determinations of eligibility may be made, at the option of a State, under a contract with another State or local agency or a contractor, so long as the contract does not provide incentives for the agency or contractor to delay eligibility determinations or to deny eligibility for individuals otherwise eligible for medical assistance. (b) Requirements With respect to fair hearings Section 1902(a)(3) of the Social Security Act (42 U.S.C. 1396a(a)(3)U.S. Code — Title 42, Section 1396a(a)(3)View official source on GovInfo) is amended by inserting before the semicolon at the end the following:, except that such fair hearing may be conducted, at the option of a State, under a contract with another State or local agency or a contractor, so long as such agency or contractor does not provide incentives to delay a fair hearing or to deny eligibility for an individual otherwise eligible for medical assistance.

A State shall not use the flexibility provided under section 2 unless a contractor selected to conduct eligibility determinations or redeterminations pursuant to the amendments made by such section has no direct or indirect financial relationship with any Medicaid managed care organization (as defined in section 1903(m)(1)(A) of the Social Security Act (42 U.S.C. 1396b(m)(1)(A)U.S. Code — Title 42, Section 1396b(m)(1)(A)View official source on GovInfo)), including the network providers affiliated with such organization, that provides services to individuals entitled to medical assistance under title XIX of such Act (42 U.S.C. 1396 et seq.U.S. Code — Title 42, Section 1396 and followingView official source on GovInfo) pursuant to a contract with such State.