H.F. 2291 Section 1. MEDICAID MANAGED CARE OVERSIGHT AND 1 IMPROVEMENT. The department of human services shall adopt 2 rules pursuant to chapter 17A and shall amend all Medicaid 3 managed care contracts to provide for all of the following: 4 1. TIMELY PAYMENT AND CORRECTION OF CLAIMS PROCESSING 5 ERRORS. 6 a. A managed care organization shall provide documentation 7 to a Medicaid provider claimant when the managed care 8 organization contests or denies a claim, in whole or in part, 9 within fifteen calendar days after receipt of the claim. The 10 documentation shall, with as much specificity as possible, 11 identify the claim or portion of the claim affected, and shall 12 provide an explanation including the reasons for contesting 13 or denying the claim utilizing the federal Health Insurance 14 Portability and Accountability Act standard claim adjustment 15 reason codes and remittance advice remark codes, or other 16 standard adjustment reasons and remark codes approved by rule 17 of the department. A managed care organization shall utilize 18 the standard coding and format of responses, established 19 uniformly across all managed care organizations, as required by 20 rule of the department. 21 b. When a Medicaid provider, a managed care organization, or 22 another affected entity identifies a systemic programming or 23 processing error in a managed care organization’s programming 24 or processing system that results in systemic incorrect 25 results, including those related to Medicaid provider payment 26 or authorizations, the managed care organization shall correct 27 the programming or processing error within thirty calendar days 28 of the discovery of the error and shall reprocess any affected 29 payments or authorizations with sixty calendar days of the 30 discovery of such error. 31 c. A managed care organization that fails to pay, deny, or 32 settle a clean claim in full within the time frame established 33 by the managed care contract shall pay the Medicaid provider 34 claimant interest equal to twelve percent per annum on the 35 -1- LSB 6073YH (3) 87 pf/rh 1/ 8

H.F. 2291 total amount of the claim ultimately authorized. 1 d. For claims ultimately found to be incorrectly denied 2 or underpaid through an appeals process or audit, a managed 3 care organization shall pay a Medicaid provider claimant, in 4 addition to the amount determined to be owed, interest of 5 twenty percent per annum on the total amount of the claim as 6 calculated from fifteen calendar days after the date the claim 7 was submitted. 8 e. If a managed care organization disputes a portion of a 9 claim, any undisputed portion of the claim is deemed a clean 10 claim and shall be paid within the time frame for the payment 11 of clean claims established by the managed care contract such 12 that ninety percent of clean claims are paid or denied within 13 fourteen calendar days of receipt, ninety-nine and one-half 14 percent of clean claims are paid or denied within twenty-one 15 calendar days of receipt, and one hundred percent of clean 16 claims are paid or denied within ninety calendar days of 17 receipt. 18 2. SUPPLEMENTAL PAYMENTS AND RATE CHANGES. 19 a. A managed care organization shall pay interest of twelve 20 percent per annum on any physician supplemental payment or 21 graduated medical education payment paid after the fifteenth 22 day of the month in which the payment is due. 23 b. Retroactive rate decreases such as rebasing delays, 24 update delays, cost containment, or other payment changes and 25 delays shall not be retroactively applicable to a date that 26 is more than three months from the date of the final rate 27 decision. 28 3. APPEALS, EXTERNAL REVIEW, AND AUDIT PROCESSES. 29 a. (1) The department shall establish an appeals and 30 external review process for Medicaid members and Medicaid 31 providers for review of adverse determinations issued by a 32 managed care organization. 33 (2) The process shall require that an internal appeal to a 34 managed care organization of an adverse determination resulting 35 -2- LSB 6073YH (3) 87 pf/rh 2/ 8

H.F. 2291 from a first-level review be completed and a notice of the 1 decision issued by a managed care organization within fifteen 2 calendar days of a request by a Medicaid member or Medicaid 3 provider for an internal appeal or within three calendar days 4 if the appeal is considered expedited based on urgent medical 5 need. 6 (3) If an internal appeal results in a final adverse 7 determination, the Medicaid member or Medicaid provider may 8 either appeal the decision as a contested case pursuant to 9 chapter 17A, or may request an external review. 10 (4) The department shall establish an external review and 11 an expedited external review process, consistent with chapter 12 514J, to the extent applicable. The process shall allow a 13 Medicaid member or a Medicaid provider to submit a request for 14 external review or expedited external review to the department 15 following receipt of notice of a final adverse determination 16 from a managed care organization. If an external review or 17 expedited external review is approved by the department, the 18 review shall be completed and a decision shall be issued by 19 the independent review organization within forty-five calendar 20 days of receipt of the request for external review and within 21 seventy-two hours of receipt of the request for an expedited 22 external review. The process shall provide that the decision 23 of the independent review organization is subject to judicial 24 review. 25 (5) The department shall enter into a contract with 26 an independent review organization that does not have a 27 conflict of interest with the department or any managed care 28 organization to conduct the external reviews. 29 b. A managed care organization shall allow a Medicaid 30 provider to consolidate complaints or appeals of multiple 31 claims that involve the same or a similar payment or coverage 32 issue, regardless of the number of individual Medicaid members 33 or payment claims affected, in a request for an internal 34 managed care organization review or appeal. 35 -3- LSB 6073YH (3) 87 pf/rh 3/ 8

H.F. 2291 c. The department shall enter into a contract with an 1 independent auditor for the purpose of reviewing, at least 2 once each calendar year, a random sample of all claims paid 3 and denied by a managed care organization. Each managed care 4 organization and each managed care organization’s subcontractor 5 shall pay any claim that the independent auditor determines to 6 be incorrectly denied, any applicable liquidated damages, and 7 any costs attributable to the annual audit. The independent 8 auditor shall also review payment patterns to determine any 9 unfair payment patterns and shall review any request for such 10 investigation based on submission of evidence by a Medicaid 11 provider of an unfair payment practice in accordance with 12 standards developed by the department. 13 d. If a claim submitted to a managed care organization is 14 not deemed a clean claim and remains in dispute for longer than 15 six months from the date initially submitted, the claim shall 16 automatically be subject to the appeals and external review 17 process established by the department. 18 4. LOGISTICS AND DOCUMENTATION. 19 a. A managed care organization shall provide and maintain 20 an internet site available to all Medicaid providers under 21 contract with the managed care organization to request 22 reconsiderations, submit Medicaid provider inquiries, 23 and submit, process, edit, rebill, and adjudicate claims 24 electronically. 25 b. The department shall develop and require all managed care 26 organizations to utilize, a standardized enrollment form and a 27 uniform process for credentialing and recredentialing Medicaid 28 providers. 29 c. Upon request by a Medicaid provider, the department 30 shall provide accurate and uniform patient encounter data to a 31 Medicaid provider under contract with a specified managed care 32 organization within sixty calendar days of the request. The 33 provision of the patient encounter data shall comply with the 34 federal Health Insurance Portability and Accountability Act 35 -4- LSB 6073YH (3) 87 pf/rh 4/ 8

H.F. 2291 and any other applicable federal and state laws and regulatory 1 requirements and shall include but not be limited to the 2 managed care organization’s claim number, the Medicaid member 3 identification number, the Medicaid member’s name, the type of 4 claim, the amount billed by revenue code and procedure code, 5 the managed care organization’s paid amount and payment date, 6 and the hospital patient account number, as applicable. The 7 department may charge a reasonable fee for the actual cost of 8 providing the patient encounter data to Medicaid providers. 9 5. PRIOR AUTHORIZATION. 10 a. Prior authorization shall not be required by a managed 11 care organization for admission of a Medicaid member to an 12 intensive care unit level of care. 13 b. Medicaid providers shall be provided two business days 14 following a Medicaid member’s inpatient hospital admission 15 to submit information to a managed care organization for 16 authorization of the admission. If authorization is denied, a 17 Medicaid provider shall be provided two business days from the 18 date of denial to request reconsideration of the authorization. 19 Following a reconsideration, if the authorization is denied, 20 the reconsideration shall be subject to peer-to-peer review. 21 c. The department shall establish a fee schedule, 22 proportionate to the lost productivity of staff and resources 23 experienced by a Medicaid provider, that results from the 24 completion of the prior authorization process. 25 EXPLANATION 26 The inclusion of this explanation does not constitute agreement with 27 the explanation’s substance by the members of the general assembly. 28 This bill relates to Medicaid managed care oversight and 29 improvement. 30 The bill requires the department of human services (DHS) to 31 adopt administrative rules and amend all Medicaid managed care 32 contracts to address timely payment and correction of claims 33 processing errors; supplemental payments and rate changes; 34 appeals external review and audit processes; logistics and 35 -5- LSB 6073YH (3) 87 pf/rh 5/ 8

H.F. 2291 documentation; and prior authorization under Medicaid managed 1 care. 2 TIMELY PAYMENT AND CORRECTION OF CLAIMS PROCESSING ERRORS. 3 The bill requires a Medicaid managed care organization (MCO) 4 to provide specific documentation to a Medicaid provider 5 claimant when the MCO contests or denies a claim. The bill 6 requires that if a systemic programming or processing error in 7 an MCO’s programming or processing system is identified that 8 results in systemic incorrect results, the MCO shall correct 9 the programming or processing error within 30 calendar days 10 and reprocess any affected payments or authorizations within 11 60 calendar days of the discovery of such error. The bill 12 requires the payment of interest on claims that are not paid 13 within certain time frames or that, following appeal or audit, 14 are found to be incorrectly denied or underpaid. The bill 15 provides that any portion of a claim which is not disputed is 16 deemed a clean claim and is required to be paid by an MCO within 17 the time frame for the payment of clean claims established by 18 an MCO contract such that 90 percent of clean claims are paid 19 or denied within 14 calendar days of receipt, 99.5 percent 20 within 21 calendar days of receipt, and 100 percent within 90 21 calendar days of receipt. 22 SUPPLEMENTAL PAYMENTS AND RATE CHANGES. The bill requires 23 MCOs to pay interest on any physician supplemental payment 24 or graduated medical education payment paid after the 15th 25 day of the month in which the payment is due, and provides 26 that retroactive rate decreases shall not be retroactively 27 applicable to a date that is more than three months from the 28 date of the final rate decision. 29 APPEALS, EXTERNAL REVIEW, AND AUDIT PROCESSES. The bill 30 requires DHS to establish an appeals and external review 31 process for Medicaid members and Medicaid providers for review 32 of adverse determinations issued by an MCO, and provides time 33 frames for the processes. DHS is required to enter into a 34 contract with an independent review organization that does not 35 -6- LSB 6073YH (3) 87 pf/rh 6/ 8

H.F. 2291 have a conflict of interest with DHS or any MCO to conduct the 1 external reviews. The bill requires an MCO to allow a Medicaid 2 provider to consolidate complaints or appeals of multiple 3 claims that involve the same or a similar payment or coverage 4 issue, regardless of the number of individual Medicaid members 5 or payment claims affected in a request for internal review 6 or appeal. The bill requires DHS to enter into a contract 7 with an independent auditor for the purpose of reviewing, at 8 least once each calendar year, a random sample of all claims 9 paid and denied. Each MCO and the subcontractors of any MCO 10 are required to pay any claim that the independent auditor 11 determines to be incorrectly denied, any applicable liquidated 12 damages, and the cost of the annual audits conducted. The 13 independent auditor is also required to review payment patterns 14 to determine any unfair payment patterns and to review any 15 request for such investigation based on submission of evidence 16 by a Medicaid provider of an unfair payment practice in 17 accordance with standards developed by DHS. The bill provides 18 that if a claim submitted to an MCO is not deemed a clean claim 19 and remains in dispute for longer than six months from the date 20 initially submitted, the claim shall automatically be subject 21 to the appeals and external review process established by DHS. 22 LOGISTICS AND DOCUMENTATION. An MCO is required to 23 provide and maintain an internet site available to all 24 Medicaid providers under contract with that MCO to request 25 reconsiderations, submit provider inquiries, and submit, 26 process, edit, rebill, and adjudicate claims electronically. 27 The bill requires DHS to develop and require all MCOs to 28 utilize a standardized enrollment form and a uniform process 29 for credentialing and recredentialing Medicaid providers. 30 The bill provides that upon request of a Medicaid provider, 31 DHS shall provide accurate and uniform patient encounter 32 data to the Medicaid provider within 60 calendar days of the 33 request. DHS may charge a reasonable fee for the actual cost 34 of providing the patient encounter data to providers. 35 -7- LSB 6073YH (3) 87 pf/rh 7/ 8

H.F. 2291 PRIOR AUTHORIZATION. The bill provides that prior 1 authorization shall not be required by an MCO for admission 2 of a Medicaid member to an intensive care unit level of 3 care. Additionally, Medicaid providers are allowed to request 4 authorization for an inpatient hospital admission within 5 certain time frames following the admission of a Medicaid 6 member and are provided a process for review of denials of 7 authorization relative to such admissions. DHS is required 8 to establish a fee schedule, proportionate to the lost 9 productivity of staff and resources experienced by a Medicaid 10 provider, that results from the completion of the prior 11 authorization process. 12 -8- LSB 6073YH (3) 87 pf/rh 8/ 8