H.F. 2292 Section 1. MEDICAID MANAGED CARE —— PROCESS AND CONTRACT 1 REQUIREMENTS —— OVERSIGHT. The department of human services 2 shall adopt rules pursuant to chapter 17A and shall amend all 3 Medicaid managed care contracts to provide for all of the 4 following relative to managed care organizations under contract 5 with the state: 6 1. Upon request by a Medicaid provider, the department 7 shall provide accurate and uniform patient encounter data to 8 a Medicaid provider, under contract with the managed care 9 organization, within sixty calendar days of the request. The 10 provision of the patient encounter data shall comply with the 11 federal Health Insurance Portability and Accountability Act 12 and any other applicable federal and state laws and regulatory 13 requirements and shall include but not be limited to the 14 managed care organization’s claim number, the Medicaid member 15 identification number, the Medicaid member’s name, the type of 16 claim, the amount billed by revenue code and procedure code, 17 the managed care organization’s paid amount and payment date, 18 and the hospital patient account number, as applicable. The 19 department may charge a reasonable fee for the actual cost of 20 providing the patient encounter data to a Medicaid provider. 21 2. A managed care organization shall provide documentation 22 to a Medicaid provider claimant when the managed care 23 organization contests or denies a claim, in whole or in part, 24 within fifteen calendar days after receipt of the claim. The 25 documentation shall, with as much specificity as possible, 26 identify the claim or portion of the claim affected, and shall 27 provide an explanation including the reasons for contesting 28 or denying the claim utilizing the federal Health Insurance 29 Portability and Accountability Act standard claim adjustment 30 reason codes and remittance advice remark codes, or other 31 standard adjustment reasons and remark codes approved by rule 32 of the department. A managed care organization shall utilize 33 the standard coding and format of responses, established 34 uniformly across all managed care organizations, as required 35 -1- LSB 5908YH (8) 87 pf/rh 1/ 9

H.F. 2292 by rule of the department. A managed care organization shall 1 offer quarterly in-person training on claim adjustment reason 2 codes and remark codes required by the department and utilized 3 by the managed care organization. 4 3. A managed care organization shall offer quarterly 5 in-person education regarding billing guidelines, reimbursement 6 requirements, and program policies and procedures utilizing a 7 format approved by the department and incorporating information 8 collected through surveys of Medicaid providers. 9 4. The department shall develop and require utilization of 10 uniform standards by all managed care organizations applicable 11 to all of the following: 12 a. A standardized enrollment form and a uniform process for 13 credentialing and recredentialing Medicaid providers. 14 b. Procedures, requirements, and periodic reviews 15 and reporting of reductions in and limitations for prior 16 authorization relative to services and prescriptions. 17 c. Retrospective utilization review of hospital 18 readmissions that complies with any applicable federal law 19 or regulatory requirements, prohibiting such reviews for a 20 Medicaid member who is readmitted with a related medical 21 condition as an inpatient to a hospital more than fifteen 22 calendar days after the Medicaid member’s discharge from the 23 hospital. 24 d. A requirement that a managed care organization, within 25 sixty calendar days of receiving an appeal request, provides 26 notice and resolves one hundred percent of provider appeals, 27 subject to remedies, including but not limited to liquidated 28 damages, if such appeals are not resolved within the required 29 time frame. 30 5. The department shall enter into a contract with an 31 independent auditor for the purpose of reviewing, at least once 32 each calendar year, a random sample of all claims paid and 33 denied by each managed care organization and each managed care 34 organization’s subcontractors. Each managed care organization 35 -2- LSB 5908YH (8) 87 pf/rh 2/ 9

H.F. 2292 and each managed care organization’s subcontractors shall 1 pay any claim that the independent auditor determines to be 2 incorrectly denied, any applicable liquidated damages, and any 3 costs attributable to the annual audit. 4 6. A managed care organization shall pay one hundred percent 5 of the state-established per diem rate to nursing facilities 6 for those nursing facility residents enrolled in Medicaid 7 during any recredentialing process caused by a change in 8 ownership of the nursing facility. 9 7. A managed care organization shall not discriminate 10 against any licensed pharmacy or pharmacist located within the 11 geographic coverage area of the managed care organization that 12 is willing to meet the conditions for participating established 13 by the department and to accept reasonable contract terms 14 offered by the managed care organization. 15 Sec. 2. MEDICAID MANAGED CARE ORGANIZATION APPEALS PROCESS 16 —— EXTERNAL REVIEW. 17 1. a. A Medicaid managed care organization under contract 18 with the state shall include in any written response to 19 a Medicaid provider under contract with the managed care 20 organization that reflects a final adverse determination of the 21 managed care organization’s internal appeal process relative to 22 an appeal filed by the Medicaid provider, all of the following: 23 (1) A statement that the Medicaid provider’s internal 24 appeal rights within the managed care organization have been 25 exhausted. 26 (2) A statement that the Medicaid provider is entitled to 27 an external independent third-party review pursuant to this 28 section. 29 (3) The requirements for requesting an external independent 30 third-party review. 31 b. If a managed care organization’s written response does 32 not comply with the requirements of paragraph “a”, the managed 33 care organization shall pay to the affected Medicaid provider a 34 penalty not to exceed one thousand dollars. 35 -3- LSB 5908YH (8) 87 pf/rh 3/ 9

H.F. 2292 2. a. A Medicaid provider who has been denied the provision 1 of a service to a Medicaid member or a claim for reimbursement 2 for a service rendered to a Medicaid member, and who has 3 exhausted the internal appeals process of a managed care 4 organization, shall be entitled to an external independent 5 third-party review of the managed care organization’s final 6 adverse determination. 7 b. To request an external independent third-party review of 8 a final adverse determination by a managed care organization, 9 an aggrieved Medicaid provider shall submit a written request 10 for such review to the managed care organization within sixty 11 calendar days of receiving the final adverse determination. 12 c. A Medicaid provider’s request for such review shall 13 include all of the following: 14 (1) Identification of each specific issue and dispute 15 directly related to the final adverse determination issued by 16 the managed care organization. 17 (2) A statement of the basis upon which the Medicaid 18 provider believes the managed care organization’s determination 19 to be erroneous. 20 (3) The Medicaid provider’s designated contact information, 21 including name, mailing address, phone number, fax number, and 22 email address. 23 3. a. Within five business days of receiving a Medicaid 24 provider’s request for review pursuant to this subsection, the 25 managed care organization shall do all of the following: 26 (1) Confirm to the Medicaid provider’s designated contact, 27 in writing, that the managed care organization has received the 28 request for review. 29 (2) Notify the department of the Medicaid provider’s 30 request for review. 31 (3) Notify the affected Medicaid member of the Medicaid 32 provider’s request for review, if the review is related to the 33 denial of a service. 34 b. If the managed care organization fails to satisfy the 35 -4- LSB 5908YH (8) 87 pf/rh 4/ 9

H.F. 2292 requirements of this subsection 3, the Medicaid provider shall 1 automatically prevail in the review. 2 4. a. Within fifteen calendar days of receiving a Medicaid 3 provider’s request for external independent third-party review, 4 the managed care organization shall do all of the following: 5 (1) Submit to the department all documentation submitted 6 by the Medicaid provider in the course of the managed care 7 organization’s internal appeal process. 8 (2) Provide the managed care organization’s designated 9 contact information, including name, mailing address, phone 10 number, fax number, and email address. 11 b. If a managed care organization fails to satisfy the 12 requirements of this subsection 4, the Medicaid provider shall 13 automatically prevail in the review. 14 5. An external independent third-party review shall 15 automatically extend the deadline to file an appeal for a 16 contested case hearing under chapter 17A, pending the outcome 17 of the external independent third-party review, until thirty 18 calendar days following receipt of the review decision by the 19 Medicaid provider. 20 6. Upon receiving notification of a request for external 21 independent third-party review, the department shall do all of 22 the following: 23 a. Assign the review to an external independent third-party 24 reviewer. 25 b. Notify the managed care organization of the identity of 26 the external independent third-party reviewer. 27 c. Notify the Medicaid provider’s designated contact of the 28 identity of the external independent third-party reviewer. 29 7. The department shall deny a request for an external 30 independent third-party review if the requesting Medicaid 31 provider fails to exhaust the managed care organization’s 32 internal appeals process or fails to submit a timely request 33 for an external independent third-party review pursuant to this 34 subsection. 35 -5- LSB 5908YH (8) 87 pf/rh 5/ 9

H.F. 2292 8. a. Multiple appeals through the external independent 1 third-party review process regarding the same Medicaid 2 member, a common question of fact, or interpretation of common 3 applicable regulations or reimbursement requirements may 4 be combined and determined in one action upon request of a 5 party in accordance with rules and regulations adopted by the 6 department. 7 b. The Medicaid provider that initiated a request for 8 an external independent third-party review, or one or more 9 other Medicaid providers, may add claims to such an existing 10 external independent third-party review following exhaustion 11 of any applicable managed care organization internal appeals 12 process, if the claims involve a common question of fact 13 or interpretation of common applicable regulations or 14 reimbursement requirements. 15 9. Documentation reviewed by the external independent 16 third-party reviewer shall be limited to documentation 17 submitted pursuant to subsection 4. 18 10. An external independent third-party reviewer shall do 19 all of the following: 20 a. Conduct an external independent third-party review 21 of any claim submitted to the reviewer pursuant to this 22 subsection. 23 b. Within thirty calendar days from receiving the request 24 for review from the department and the documentation submitted 25 pursuant to subsection 4, issue the reviewer’s final decision 26 to the Medicaid provider’s designated contact, the managed 27 care organization’s designated contact, the department, and 28 the affected Medicaid member if the decision involves a denial 29 of service. The reviewer may extend the time to issue a final 30 decision by fourteen calendar days upon agreement of all 31 parties to the review. 32 11. The department shall enter into a contract with 33 an independent review organization that does not have a 34 conflict of interest with the department or any managed care 35 -6- LSB 5908YH (8) 87 pf/rh 6/ 9

H.F. 2292 organization to conduct the independent third-party reviews 1 under this section. 2 a. A party, including the affected Medicaid member or 3 Medicaid provider, may appeal a final decision of the external 4 independent third-party reviewer in a contested case proceeding 5 in accordance with chapter 17A within thirty calendar days from 6 receiving the final decision. A final decision in a contested 7 case proceeding is subject to judicial review. 8 b. The final decision of any external independent 9 third-party review conducted pursuant to this subsection shall 10 also direct the nonprevailing party to pay an amount equal to 11 the costs of the review to the external independent third-party 12 reviewer. Any payment ordered pursuant to this subsection 13 shall be stayed pending any appeal of the review. If the 14 final outcome of any appeal is to reverse the decision of the 15 external independent third-party review, the nonprevailing 16 party shall pay the costs of the review to the external 17 independent third-party reviewer within forty-five calendar 18 days of entry of the final order. 19 EXPLANATION 20 The inclusion of this explanation does not constitute agreement with 21 the explanation’s substance by the members of the general assembly. 22 This bill relates to Medicaid managed care including process 23 and contract requirements, and oversight. 24 The bill requires the department of human services (DHS) to 25 adopt administrative rules and amend all Medicaid managed care 26 contracts to administer the provisions of the bill. 27 The bill requires that, upon request by a Medicaid provider, 28 DHS shall provide accurate and uniform patient encounter data 29 to a Medicaid provider, under contract with a managed care 30 organization (MCO), within 60 calendar days of the request. 31 DHS may charge a reasonable fee for the actual cost of 32 providing the patient encounter data to a Medicaid provider. 33 The bill requires an MCO to provide documentation to a 34 Medicaid provider claimant when the MCO contests or denies 35 -7- LSB 5908YH (8) 87 pf/rh 7/ 9

H.F. 2292 a claim, in whole or in part, within 15 calendar days after 1 receipt of the claim. The bill specifies the information to be 2 included in the documentation, requires the MCO to utilize the 3 standard coding and format of responses, established uniformly 4 across all MCOs by DHS, and requires MCOs to offer quarterly 5 in-person training on claim adjustment reason codes and remark 6 codes. 7 The bill requires MCOs to offer quarterly in-person 8 education regarding billing guidelines, reimbursement 9 requirements, and program policies and procedures utilizing a 10 format approved by DHS and incorporating information collected 11 through surveys of Medicaid providers. 12 The bill requires DHS to develop uniform standards and 13 require utilization of such uniform standards by all MCOs 14 regarding a standardized enrollment form and a uniform process 15 for credentialing and recredentialing Medicaid providers; 16 procedures, requirements, and periodic reviews and reporting of 17 reductions in and limitations for prior authorization relative 18 to services and prescriptions; retrospective utilization review 19 of hospital readmissions; a grievance, appeal, external review, 20 and state fair hearing process; and resolution of all appeals 21 within a 60-day time frame. 22 The bill requires DHS to enter into a contract with an 23 independent auditor to, at least annually, review a random 24 sample of all claims paid and denied by each MCO and each MCO’s 25 subcontractors, and provides for payment by an MCO of any claim 26 that the independent auditor determines to be incorrectly 27 denied, any applicable liquidated damages, and any costs 28 attributable to the annual audit. 29 The bill requires an MCO to pay 100 percent of the 30 state-established per diem rate to nursing facilities for those 31 nursing facility residents enrolled in Medicaid during any 32 recredentialing process caused by a change in ownership of the 33 nursing facility. 34 The bill prohibits MCOs from discriminating against any 35 -8- LSB 5908YH (8) 87 pf/rh 8/ 9

H.F. 2292 licensed pharmacy or pharmacist located within the geographic 1 coverage area of the MCO that is willing to meet the conditions 2 for participating established by DHS and to accept reasonable 3 contract terms offered by the MCO. 4 The bill also establishes an external review process for the 5 review of final adverse determinations of the MCOs’ internal 6 appeal processes. The bill provides that a final decision 7 of an external reviewer may be reviewed in a contested case 8 proceeding pursuant to Code chapter 17A, and ultimately is 9 subject to judicial review. 10 -9- LSB 5908YH (8) 87 pf/rh 9/ 9