Senate Study Bill 3073 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED DEPARTMENT OF HUMAN SERVICES BILL) A BILL FOR An Act relating to the IowaCare program, and providing for 1 repeals. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5354XD (10) 83 pf/nh

S.F. _____ H.F. _____ DIVISION I 1 IOWACARE PROGRAM UPDATE 2 Section 1. Section 249J.5, subsections 1, 2, 7, 8, and 9, 3 Code 2009, are amended to read as follows: 4 1. Except as otherwise provided in this chapter, an 5 individual nineteen through sixty-four years of age shall 6 be eligible solely for the expansion population benefits 7 described in this chapter when provided through the expansion 8 population provider network as described in this chapter, if 9 the individual meets all of the following conditions: 10 a. The individual is not eligible for coverage under the 11 medical assistance program in effect on or after April 1, 2005 . 12 b. The individual has a family income at or below two 13 hundred percent of the federal poverty level as defined by the 14 most recently revised poverty income guidelines published by 15 the United States department of health and human services. 16 c. The individual fulfills all other conditions of 17 participation for the expansion population described in this 18 chapter, including requirements relating to personal financial 19 responsibility. 20 2. Individuals otherwise eligible solely for family 21 planning benefits authorized under the medical assistance 22 family planning services waiver , effective January 1, 2005, 23 as described in 2004 Iowa Acts, chapter 1175 , section 116, 24 subsection 8 , may also be eligible for expansion population 25 benefits provided through the expansion population provider 26 network. 27 7. The department shall contract with the county general 28 assistance directors to perform intake functions for the 29 expansion population, but only at the discretion of the 30 individual county general assistance director. 31 8. 7. If the department provides intake services at the 32 location of a provider included in the expansion population 33 provider network, the department shall consider subcontracting 34 with local nonprofit agencies to promote greater understanding 35 -1- LSB 5354XD (10) 83 pf/nh 1/ 25

S.F. _____ H.F. _____ between providers, under the medical assistance program and 1 included in the expansion population provider network, and 2 their recipients and members. 3 9. 8. Following initial enrollment, an expansion 4 population member shall reenroll annually by the last day of 5 the month preceding the month in which the expansion population 6 member initially enrolled. The department may provide a 7 process for automatic reenrollment of expansion population 8 members. 9 Sec. 2. Section 249J.6, subsection 1, unnumbered paragraph 10 1, Code 2009, is amended to read as follows: 11 Beginning July 1, 2005, the The expansion population shall 12 be eligible for all of the following expansion population 13 services: 14 Sec. 3. Section 249J.6, subsection 2, Code 2009, is amended 15 to read as follows: 16 2. a. Each expansion population member who enrolls 17 or reenrolls in the expansion population on or after 18 January 31, 2007, shall participate, in conjunction with 19 receiving receive a single comprehensive medical examination 20 and completing a personal health improvement plan, in a 21 health risk assessment coordinated by a health consortium 22 representing providers, consumers, and medical education 23 institutions annually . The criteria for the department may 24 implement a web-based health risk assessment , the comprehensive 25 medical examination, and the personal health improvement plan 26 shall be developed and applied in a manner that takes into 27 consideration cultural variations that may exist within the 28 expansion population for expansion population members that 29 may include facilitation, if deemed to be cost-effective to 30 the program . The health risk assessment shall utilize a 31 gender-specific approach. In developing the queries unique to 32 women, a clinical advisory team shall be utilized that includes 33 women’s health professionals including but not limited to those 34 with specialties in obstetrics and gynecology, endocrinology, 35 -2- LSB 5354XD (10) 83 pf/nh 2/ 25

S.F. _____ H.F. _____ mental health, behavioral health, oncology, cardiology, and 1 rheumatology. 2 b. The health risk assessment shall be a web-based 3 electronic system capable of capturing and integrating basic 4 data to provide an individualized personal health improvement 5 plan for each expansion population member. The health risk 6 assessment shall provide a preliminary diagnosis of current and 7 prospective health conditions and recommendations for improving 8 health conditions with an individualized wellness program. The 9 health risk assessment shall be made available to the expansion 10 population member and the provider specified in paragraph 11 “c” who performs the comprehensive medical examination and 12 provides the individualized personal health improvement plan. 13 c. The single comprehensive medical examination and 14 personal health improvement plan may be provided by an 15 expansion population provider network physician, advanced 16 registered nurse practitioner, or physician assistant or any 17 other physician, advanced registered nurse practitioner, or 18 physician assistant, available to any full benefit recipient 19 including but not limited to such providers available through 20 a free clinic or rural health clinic under a contract with 21 the department to provide these services, through federally 22 qualified health centers that employ a physician, or through 23 any other nonprofit agency qualified or deemed to be qualified 24 by the department to perform these services. 25 d. Following completion of an initial health risk 26 assessment, comprehensive medical examination, and personal 27 health improvement plan, an expansion population member may 28 complete subsequent assessments, examinations, or plans with 29 the recommendation and approval of a provider specified in 30 paragraph “c” . 31 e. b. Refusal of an expansion population member to 32 participate in a health risk assessment, comprehensive medical 33 examination , or personal health improvement plan or any health 34 risk assessment implemented by the department, shall not be a 35 -3- LSB 5354XD (10) 83 pf/nh 3/ 25

S.F. _____ H.F. _____ basis for ineligibility for or disenrollment from the expansion 1 population. 2 Sec. 4. Section 249J.6, subsection 3, Code 2009, is amended 3 to read as follows: 4 3. Beginning no later than July 1, 2006, expansion 5 Expansion population members shall be provided all of the 6 following: 7 a. Access to a pharmacy assistance clearinghouse program 8 to match expansion population members with free or discounted 9 prescription drug programs provided by the pharmaceutical 10 industry. 11 b. Access access to a medical information hotline, 12 accessible twenty-four hours per day, seven days per week, 13 to assist expansion population members in making appropriate 14 choices about the use of emergency room and other health care 15 services. 16 Sec. 5. Section 249J.7, subsection 1, Code 2009, is amended 17 to read as follows: 18 1. Expansion population members shall only be eligible 19 to receive expansion population services through a provider 20 included in the expansion population provider network. Except 21 as otherwise provided in this chapter, the expansion population 22 provider network shall be limited to a publicly owned acute 23 care teaching hospital located in a county with a population 24 over three hundred fifty thousand , and the university of Iowa 25 hospitals and clinics , and the state hospitals for persons with 26 mental illness designated pursuant to section 226.1 with the 27 exception of the programs at such state hospitals for persons 28 with mental illness that provide substance abuse treatment, 29 serve gero-psychiatric patients, or treat sexually violent 30 predators . 31 Sec. 6. Section 249J.8, Code 2009, is amended to read as 32 follows: 33 249J.8 Expansion population members —— financial 34 participation. 35 -4- LSB 5354XD (10) 83 pf/nh 4/ 25

S.F. _____ H.F. _____ 1. Each expansion population member whose family income 1 exceeds one hundred percent of the federal poverty level as 2 defined by the most recently revised poverty income guidelines 3 published by the United States department of health and human 4 services shall pay a monthly premium not to exceed one-twelfth 5 of five percent of the member’s annual family income. Each 6 expansion population member whose family income is equal to or 7 less than one hundred percent of the federal poverty level as 8 defined by the most recently revised poverty income guidelines 9 published by the United States department of health and human 10 services shall not be subject to payment of a monthly premium. 11 All premiums shall be paid on the last day prior to the first 12 day of the month of coverage. The department shall deduct the 13 amount of any monthly premiums paid by an expansion population 14 member for benefits under the healthy and well kids in Iowa 15 program when computing the amount of monthly premiums owed 16 under this subsection. An expansion population member shall 17 pay respond to the monthly premium notices either through 18 timely payment or a request for a hardship exemption during the 19 entire period of the member’s enrollment. Regardless of the 20 length of enrollment, the member is subject to payment of the 21 premium for a minimum of four consecutive months. However, an 22 expansion population member who complies with the requirement 23 of payment of the premium for a minimum of four consecutive 24 months during a consecutive twelve-month period of enrollment 25 shall be deemed to have complied with this requirement for 26 the subsequent consecutive twelve-month period of enrollment 27 and shall only be subject to payment of the monthly premium 28 on a month-by-month basis. Timely payment of premiums, 29 including any arrearages accrued from prior enrollment, is 30 a condition of receiving any expansion population services. 31 The payment to and acceptance by an automated case management 32 system or the department of the premium required under this 33 subsection shall not automatically confer initial or continuing 34 program eligibility on an individual. A premium paid to and 35 -5- LSB 5354XD (10) 83 pf/nh 5/ 25

S.F. _____ H.F. _____ accepted by the department’s premium payment process that is 1 subsequently determined to be untimely or to have been paid 2 on behalf of an individual ineligible for the program shall 3 be refunded to the remitter in accordance with rules adopted 4 by the department. Premiums collected under this subsection 5 shall be deposited in the premiums subaccount of the account 6 for health care transformation created pursuant to section 7 249J.23. An expansion population member shall also pay the 8 same copayments required of other adult recipients of medical 9 assistance. 10 2. The department may reduce the required out-of-pocket 11 expenditures for an individual expansion population member 12 based upon the member’s increased wellness activities such 13 as smoking cessation or compliance with the personal health 14 improvement plan completed by the member. The department shall 15 also waive the required out-of-pocket expenditures for an 16 individual expansion population member based upon a hardship 17 that would accrue from imposing such required expenditures. 18 Information regarding the premium payment obligation and 19 the hardship exemption, including the process by which a 20 prospective enrollee may apply for the hardship exemption, 21 shall be provided to a prospective enrollee at the time of 22 application. The prospective enrollee shall acknowledge, in 23 writing, receipt and understanding of the information provided. 24 3. The department shall submit to the governor and the 25 general assembly by March 15, 2006, a design for each of the 26 following: 27 a. An insurance cost subsidy program for expansion 28 population members who have access to employer health insurance 29 plans, provided that the design shall require that no less than 30 fifty percent of the cost of such insurance shall be paid by 31 the employer. 32 b. A health care account program option for individuals 33 eligible for enrollment in the expansion population. The 34 health care account program option shall be available only 35 -6- LSB 5354XD (10) 83 pf/nh 6/ 25

S.F. _____ H.F. _____ to adults who have been enrolled in the expansion population 1 for at least twelve consecutive calendar months. Under the 2 health care account program option, the individual would 3 agree to exchange one year’s receipt of benefits under the 4 expansion population, to which the individual would otherwise 5 be entitled, for a credit to obtain any medical assistance 6 program covered service up to a specified amount. The balance 7 in the health care account at the end of the year, if any, would 8 be available for withdrawal by the individual. 9 4. 3. The department shall track the impact of 10 the out-of-pocket expenditures on by expansion population 11 enrollment members and shall report the findings data on 12 at least a quarterly basis to the medical assistance 13 projections and assessment council established pursuant 14 to section 249J.20 the department’s internet website . The 15 findings report shall include estimates of the number of 16 expansion population members complying and not complying with 17 payment of required out-of-pocket expenditures , the number 18 of expansion population members not complying with payment 19 of required out-of-pocket expenditures and the reasons for 20 noncompliance, any impact as a result of the out-of-pocket 21 requirements on the provision of services to the populations 22 previously served, the administrative time and cost associated 23 with administering the out-of-pocket requirements, and 24 the benefit to the state resulting from the out-of-pocket 25 expenditures . To the extent possible, the department shall 26 track the income level of the member, the health condition of 27 the member, and the family status of the member relative to the 28 out-of-pocket information. 29 Sec. 7. Section 249J.9, Code 2009, is amended to read as 30 follows: 31 249J.9 Future expansion population, benefits , and provider 32 network growth. 33 1. Population. The department shall contract with the 34 division of insurance of the department of commerce or another 35 -7- LSB 5354XD (10) 83 pf/nh 7/ 25

S.F. _____ H.F. _____ appropriate entity to track, on an annual basis, the number of 1 uninsured and underinsured Iowans, the cost of private market 2 insurance coverage, and other barriers to access to private 3 insurance for Iowans. Based on these findings and available 4 funds, the department shall make recommendations, annually, 5 to the governor and the general assembly regarding further 6 expansion of the expansion population. 7 2. 1. Benefits. 8 a. The department shall not provide services to expansion 9 population members that are in addition to the services 10 originally designated by the department pursuant to section 11 249J.6, without express authorization provided by the general 12 assembly. 13 b. The department, upon the recommendation of the clinicians 14 advisory panel established pursuant to section 249J.18, may 15 change the scope and duration of any of the available expansion 16 population services, but this subsection shall not be construed 17 to authorize the department to make expenditures in excess 18 of the amount appropriated for benefits for the expansion 19 population. 20 3. 2. Expansion population provider network. 21 a. The department shall not expand the expansion population 22 provider network unless the department is able to pay for 23 expansion population services provided by such providers at the 24 full benefit recipient rates. 25 b. The department may limit access to the expansion 26 population provider network by the expansion population to the 27 extent the department deems necessary to meet the financial 28 obligations to each provider under the expansion population 29 provider network. This subsection shall not be construed to 30 authorize the department to make any expenditure in excess 31 of the amount appropriated for benefits for the expansion 32 population. 33 Sec. 8. Section 249J.10, subsection 2, Code 2009, is amended 34 to read as follows: 35 -8- LSB 5354XD (10) 83 pf/nh 8/ 25

S.F. _____ H.F. _____ 2. The department of human services shall may include in 1 its annual budget submission, recommendations relating to a 2 disproportionate share hospital and graduate medical education 3 allocation plan that maximizes the availability of federal 4 funds for payments to hospitals for the care and treatment of 5 indigent patients. 6 Sec. 9. Section 249J.11, Code 2009, is amended to read as 7 follows: 8 249J.11 Nursing facility level of care determination for 9 facility-based and community-based services. 10 The department shall amend the medical assistance state plan 11 to provide for all of the following: 12 1. That nursing facility level of care services under the 13 medical assistance program shall be available to an individual 14 admitted to a nursing facility on or after July 1, 2005 , who 15 meets eligibility criteria for the medical assistance program 16 pursuant to section 249A.3, if the individual also meets any of 17 the following criteria: 18 a. Based upon the minimum data set, the individual requires 19 limited assistance, extensive assistance, or has total 20 dependence on assistance, provided by the physical assistance 21 of one or more persons, with three or more activities of daily 22 living as defined by the minimum data set, section G, entitled 23 “physical functioning and structural problems”. 24 b. Based on the minimum data set, the individual requires 25 the establishment of a safe, secure environment due to moderate 26 or severe impairment of cognitive skills for daily decision 27 making. 28 c. The individual has established a dependency requiring 29 residency in a medical institution for more than one year. 30 2. That an individual admitted to a nursing facility 31 prior to July 1, 2005, and an individual applying for home 32 and community-based services waiver services at the nursing 33 facility level of care on or after July 1, 2005 , who meets 34 the eligibility criteria for the medical assistance program 35 -9- LSB 5354XD (10) 83 pf/nh 9/ 25

S.F. _____ H.F. _____ pursuant to section 249A.3, shall also meet any of the 1 following criteria: 2 a. Based on the minimum data set, the individual requires 3 supervision, or limited assistance, provided on a daily basis 4 by the physical assistance of at least one person, for dressing 5 and personal hygiene activities of daily living as defined by 6 the minimum data set, section G, entitled “physical functioning 7 and structural problems”. 8 b. Based on the minimum data set, the individual requires 9 the establishment of a safe, secure environment due to modified 10 independence or moderate impairment of cognitive skills for 11 daily decision making. 12 3. That, beginning July 1, 2005, if nursing facility 13 level of care is determined to be medically necessary for an 14 individual and the individual meets the nursing facility level 15 of care requirements for home and community-based services 16 waiver services under subsection 2, but appropriate home and 17 community-based services are not available to the individual in 18 the individual’s community at the time of the determination or 19 the provision of available home and community-based services 20 to meet the skilled care requirements of the individual is not 21 cost-effective, the criteria for admission of the individual to 22 a nursing facility for nursing facility level of care services 23 shall be the criteria in effect on June 30, 2005 2010 . The 24 department of human services shall establish the standard for 25 determining cost-effectiveness of home and community-based 26 services under this subsection. 27 4. The department shall develop a process to allow 28 individuals identified under subsection 3 to be served under 29 the home and community-based services waiver at such time as 30 appropriate home and community-based services become available 31 in the individual’s community. 32 Sec. 10. Section 249J.13, Code 2009, is amended to read as 33 follows: 34 249J.13 Children’s mental health waiver services. 35 -10- LSB 5354XD (10) 83 pf/nh 10/ 25

S.F. _____ H.F. _____ The department shall provide medical assistance waiver 1 services to not more than three hundred children who meet 2 the eligibility criteria for the medical assistance program 3 pursuant to section 249A.3, and also meet the criteria 4 specified in section 234.7, subsection 2. 5 Sec. 11. Section 249J.14, Code 2009, is amended to read as 6 follows: 7 249J.14 Health promotion partnerships. 8 1. Services for adults at state mental health 9 institutes. Beginning July 1, 2005, inpatient and outpatient 10 hospital services at the state hospitals for persons with 11 mental illness designated pursuant to section 226.1 shall be 12 covered services under the medical assistance program. 13 2. 1. Dietary counseling. By July 1, 2006 If a 14 cost-effective strategy with a measurable return on investment 15 or an impact on health care outcomes is identified , the 16 department shall may design and begin implementation 17 of implement a strategy to provide dietary counseling and 18 support to child and adult recipients of medical assistance and 19 to expansion population members to assist these recipients and 20 members in avoiding excessive weight gain or loss and to assist 21 in development of personal weight loss programs for recipients 22 and members determined by the recipient’s or member’s health 23 care provider to be clinically overweight. 24 3. 2. Electronic medical records Medical assistance 25 health information technology program . By October 1, 2006, 26 the The department shall develop a practical strategy for 27 expanding utilization of electronic medical recordkeeping 28 by providers under the medical assistance program and the 29 expansion population provider network. The plan shall 30 focus, initially, on medical assistance program recipients 31 and expansion population members whose quality of care would 32 be significantly enhanced by the availability of medical 33 assistance health information technology program for promoting 34 the adoption and meaningful use of electronic medical 35 -11- LSB 5354XD (10) 83 pf/nh 11/ 25

S.F. _____ H.F. _____ recordkeeping by providers under the medical assistance program 1 and the Iowa Medicaid enterprise pursuant to the federal 2 American Recovery and Reinvestment Act of 2009, Pub. L. No. 3 111-5 . The department shall do all of the following: 4 a. Design and implement a program for distribution 5 and monitoring of provider incentive payments, including 6 development of a definition of “meaningful use” for purposes 7 of promoting the use of electronic medical recordkeeping by 8 providers. The department shall develop this program in 9 collaboration with the department of public health and the 10 electronic health information advisory council and executive 11 committee created pursuant to section 135.156. 12 b. Develop the medical assistance health information 13 technology plan as required by the centers for Medicare and 14 Medicaid services of the United States department of health and 15 human services. The plan shall provide detailed implementation 16 plans for the medical assistance program for promotion of the 17 adoption and meaningful use of health information technology by 18 medical assistance providers and the Iowa Medicaid enterprise. 19 The plan shall include the integration of health information 20 technology and health information exchange with the medical 21 assistance management information system. The plan shall be 22 developed in collaboration with the department of public health 23 and the electronic health information advisory council and 24 executive committee created pursuant to section 135.156. 25 4. 3. Provider incentive payment programs. By January 1, 26 2007 If a cost-effective strategy with a measurable return on 27 investment or an impact on health care outcomes is identified , 28 the department shall may design and implement a provider 29 incentive payment program for providers under the medical 30 assistance program and providers included in the expansion 31 population provider network based upon evaluation of public and 32 private sector models . 33 5. Health assessment for medical assistance recipients 34 with mental retardation or developmental disabilities. The 35 -12- LSB 5354XD (10) 83 pf/nh 12/ 25

S.F. _____ H.F. _____ department shall work with the university of Iowa colleges of 1 medicine, dentistry, nursing, pharmacy, and public health, 2 and the university of Iowa hospitals and clinics to determine 3 whether the physical and dental health of recipients of 4 medical assistance who are persons with mental retardation 5 or developmental disabilities are being regularly and 6 fully addressed and to identify barriers to such care. The 7 department shall report the department’s findings to the 8 governor and the general assembly by January 1, 2007. 9 6. 4. Smoking cessation. The department, in collaboration 10 with Iowa department of public health programs relating to 11 tobacco use prevention and cessation, shall implement a program 12 with the goal of reducing smoking among recipients of medical 13 assistance who are children to less than one percent and among 14 recipients of medical assistance and expansion population 15 members who are adults to less than ten percent, by July 1, 16 2007 . 17 7. 5. Dental home for children. The department shall 18 enter into an interagency agreement with the department of 19 public health for infrastructure development and oral health 20 coordination services for recipients of medical assistance 21 to increase access to dental care for medical assistance 22 recipients. By December 31, 2010 2011 , every recipient of 23 medical assistance who is a child twelve years of age or 24 younger shall have a designated dental home and shall be 25 provided with the dental screenings, preventive services, 26 diagnostic services, treatment services, and emergency services 27 as defined under the early and periodic screening, diagnostic, 28 and treatment program. 29 8. 6. Reports. The department shall issue a report on 30 the department’s internet website on a quarterly basis to 31 the medical assistance projections and assessment council 32 established pursuant to section 249J.20 and the medical 33 assistance advisory council created pursuant to section 34 249A.4B , regarding the any changes or updates to the health 35 -13- LSB 5354XD (10) 83 pf/nh 13/ 25

S.F. _____ H.F. _____ promotion partnerships described in this section. To the 1 greatest extent feasible, and if applicable to a data set, 2 the data reported shall include demographic information 3 concerning the population served including but not limited to 4 factors, such as race and economic status, as specified by the 5 department. 6 Sec. 12. Section 249J.16, Code 2009, is amended to read as 7 follows: 8 249J.16 Cost and quality performance evaluation. 9 Beginning July 1, 2005, the The department shall contract 10 with an independent consulting firm to do all of the following: 11 1. Annually Prior to initiating reprocurement of Iowa 12 Medicaid enterprise contracts, evaluate and compare the cost 13 and quality of care provided by the medical assistance program 14 and through the expansion population with the cost and quality 15 of care available through private insurance and managed care 16 organizations doing business in the state. 17 2. Annually evaluate the improvements by the medical 18 assistance program and the expansion population in the cost 19 and quality of services provided to Iowans over the cost and 20 quality of care provided in the prior year. 21 Sec. 13. Section 249J.17, Code 2009, is amended to read as 22 follows: 23 249J.17 Operations —— performance evaluation. 24 Beginning July 1, 2006, the The department shall 25 submit publish on its internet website a report of the results 26 of an evaluation of the performance of each component of the 27 Iowa Medicaid enterprise using the performance standards 28 contained in the contracts with the Iowa Medicaid enterprise 29 partners. 30 Sec. 14. Section 249J.18, Code 2009, is amended to read as 31 follows: 32 249J.18 Clinicians advisory panel —— clinical management. 33 1. Beginning July 1, 2005, the The medical director 34 of the Iowa Medicaid enterprise, with the approval of the 35 -14- LSB 5354XD (10) 83 pf/nh 14/ 25

S.F. _____ H.F. _____ administrator of the division of medical services of the 1 department, shall assemble and act as chairperson for a 2 clinicians advisory panel to recommend to the department 3 clinically appropriate health care utilization management and 4 coverage decisions for the medical assistance program and the 5 expansion population which are not otherwise addressed by the 6 Iowa medical assistance drug utilization review commission 7 created pursuant to section 249A.24 or the medical assistance 8 pharmaceutical and therapeutics committee established pursuant 9 to section 249A.20A. The meetings shall be conducted in 10 accordance with chapter 21 and shall be open to the public 11 except to the extent necessary to prevent the disclosure of 12 confidential medical information. 13 2. The medical director of the Iowa Medicaid enterprise 14 shall report on a quarterly basis to the medical assistance 15 projections and assessment council established pursuant to 16 section 249J.20 and the medical assistance advisory council 17 created pursuant to section 249A.4B , any recommendations made 18 by the panel and adopted by rule of the department pursuant 19 to chapter 17A regarding clinically appropriate health 20 care utilization management and coverage under the medical 21 assistance program and the expansion population. 22 3. 2. The medical director of the Iowa Medicaid enterprise 23 shall prepare an annual report summarizing the recommendations 24 made by the panel and adopted by rule of the department 25 regarding clinically appropriate health care utilization 26 management and coverage under the medical assistance program 27 and the expansion population. 28 Sec. 15. Section 249J.19, Code 2009, is amended to read as 29 follows: 30 249J.19 Health care services pricing and reimbursement of 31 providers. 32 The department shall may annually collect data on 33 third-party payor rates in the state and, as appropriate, 34 the usual and customary charges of health care providers, 35 -15- LSB 5354XD (10) 83 pf/nh 15/ 25

S.F. _____ H.F. _____ including the reimbursement rates paid to providers and by 1 third-party payors participating in the medical assistance 2 program and through the expansion population. The department 3 shall consult with the division of insurance of the department 4 of commerce in adopting administrative rules specifying the 5 reporting format and guaranteeing the confidentiality of the 6 information provided by the providers and third-party payors. 7 The If collected, the department shall review the data and 8 make recommendations to the governor and the general assembly 9 regarding pricing changes and reimbursement rates annually 10 by January 1. Any recommended pricing changes or changes in 11 reimbursement rates shall not be implemented without express 12 authorization by the general assembly. 13 Sec. 16. Section 249J.21, Code 2009, is amended to read as 14 follows: 15 249J.21 Payments to health care providers based on actual 16 costs . 17 Payments, including graduate medical education payments, 18 under the medical assistance program and the expansion 19 population to each public hospital and each public nursing 20 facility shall not exceed the actual medical assistance costs 21 of each such facility reported on the Medicare hospital and 22 hospital health care complex cost report submitted to the 23 centers for Medicare and Medicaid services of the United States 24 department of health and human services. Each public hospital 25 and each public nursing facility shall retain one hundred 26 percent of the medical assistance payments earned under state 27 reimbursement rules. State reimbursement rules may provide for 28 reimbursement at less than actual cost. 29 Sec. 17. Section 249J.22, Code 2009, is amended to read as 30 follows: 31 249J.22 Independent annual audit. 32 The department shall contract with a certified public 33 accountant to provide an analysis, on an annual basis, to the 34 governor and the general assembly regarding compliance of the 35 -16- LSB 5354XD (10) 83 pf/nh 16/ 25

S.F. _____ H.F. _____ Iowa medical assistance program with each of the following: 1 1. That the state has not instituted any new provider taxes 2 as defined by the centers for Medicare and Medicaid services 3 of the United States department of health and human services , 4 unless otherwise authorized by state law and approved by the 5 centers for Medicare and Medicaid services . 6 2. That public hospitals and public nursing facilities 7 are not paid more than the actual costs of care for medical 8 assistance program and disproportionate share hospital program 9 recipients based upon Medicare program principles of accounting 10 and cost reporting. 11 3. 2. That the state is not recycling federal funds 12 provided under Title XIX of the Social Security Act as defined 13 by the centers for Medicare and Medicaid services of the United 14 States department of health and human services. 15 Sec. 18. Section 249J.23, subsection 3, Code 2009, is 16 amended to read as follows: 17 3. Moneys deposited in the account for health care 18 transformation shall be used only as provided in appropriations 19 from the account for the costs associated with certain services 20 provided to the expansion population pursuant to section 21 249J.6, certain initiatives to be designed pursuant to section 22 249J.8 , the case-mix adjusted reimbursement system for persons 23 with mental retardation or developmental disabilities pursuant 24 to section 249J.12 , certain health promotion partnership 25 activities pursuant to section 249J.14, the cost and quality 26 performance evaluation pursuant to section 249J.16, auditing 27 requirements pursuant to section 249J.22, the provision 28 of additional indigent patient care and treatment, and 29 administrative costs associated with this chapter. 30 Sec. 19. Section 249J.24, Code Supplement 2009, is amended 31 to read as follows: 32 249J.24 IowaCare account. 33 1. An IowaCare account is created in the state treasury 34 under the authority of the department of human services. 35 -17- LSB 5354XD (10) 83 pf/nh 17/ 25

S.F. _____ H.F. _____ Moneys appropriated from the general fund of the state to the 1 account, moneys received as federal financial participation 2 funds under the expansion population provisions of this 3 chapter and credited to the account, moneys received for 4 disproportionate share hospitals and credited to the account, 5 moneys received for graduate medical education and credited to 6 the account, proceeds distributed from the county treasurer as 7 specified in subsection 6 4 , and moneys from any other source 8 credited to the account shall be deposited in the account. 9 Moneys deposited in or credited to the account shall be used 10 only as provided in appropriations or distributions from the 11 account for the purposes specified in the appropriation or 12 distribution. Moneys in the account shall be appropriated to 13 the university of Iowa hospitals and clinics , and to a publicly 14 owned acute care teaching hospital located in a county with a 15 population over three hundred fifty thousand , and to the state 16 hospitals for persons with mental illness designated pursuant 17 to section 226.1 for the purposes provided in the federal 18 law making the funds available or as specified in the state 19 appropriation and shall be distributed as determined by the 20 department. 21 2. The account shall be separate from the general fund 22 of the state and shall not be considered part of the general 23 fund of the state. The moneys in the account shall not be 24 considered revenue of the state, but rather shall be funds of 25 the account. The moneys in the account are not subject to 26 section 8.33 and shall not be transferred, used, obligated, 27 appropriated, or otherwise encumbered, except to provide for 28 the purposes of this chapter. Notwithstanding section 12C.7, 29 subsection 2, interest or earnings on moneys deposited in the 30 account shall be credited to the account. 31 3. The department shall adopt rules pursuant to chapter 17A 32 to administer the account. 33 4. The treasurer of state shall provide a quarterly report 34 of activities and balances of the account to the director. 35 -18- LSB 5354XD (10) 83 pf/nh 18/ 25

S.F. _____ H.F. _____ 5. Notwithstanding section 262.28 or any provision of this 1 chapter to the contrary, payments to be made to participating 2 public hospitals under this section shall be made on a 3 prospective basis in twelve equal monthly installments based 4 upon the amount appropriated or allocated, as applicable to a 5 specific public hospital, in a specific fiscal year. After the 6 close of the fiscal year, the department shall determine the 7 amount of the payments attributable to the state general fund, 8 federal financial participation funds collected for expansion 9 population services, graduate medical education funds, and 10 disproportionate share hospital funds, based on claims data and 11 actual expenditures. 12 6. 4. a. Notwithstanding any provision to the contrary, 13 for the collection of taxes levied under section 347.7 for 14 which the collection is performed after July 1, 2005 , the 15 county treasurer of a county with a population over three 16 hundred fifty thousand in which a publicly owned acute care 17 teaching hospital is located shall distribute the proceeds 18 collected pursuant to section 347.7 in a total amount of 19 thirty-four thirty-eight million dollars annually, which 20 would otherwise be distributed to the county hospital, to the 21 treasurer of state for deposit in the IowaCare account under 22 this section as follows: 23 (1) The first seventeen nineteen million dollars in 24 collections pursuant to section 347.7 between July 1 and 25 December 31 annually shall be distributed to the treasurer 26 of state for deposit in the IowaCare account and collections 27 during this time period in excess of seventeen nineteen million 28 dollars shall be distributed to the acute care teaching 29 hospital identified in this subsection. 30 (2) The first seventeen nineteen million dollars in 31 collections pursuant to section 347.7 between January 1 and 32 June 30 annually shall be distributed to the treasurer of state 33 for deposit in the IowaCare account and collections during this 34 time period in excess of seventeen nineteen million dollars 35 -19- LSB 5354XD (10) 83 pf/nh 19/ 25