S.F. 2221 Section 1. MEDICAID MANAGED CARE —— POLICIES AND 1 PROCEDURES. The department of human services shall adopt rules 2 pursuant to chapter 17A and shall amend all Medicaid managed 3 care contracts, to require all of the following: 4 1. If a managed care organization fails to pay, contest, 5 deny, or settle a clean claim in full within the time frame 6 established by the managed care contract, the managed care 7 organization shall pay the claimant interest in an amount equal 8 to eighteen percent per annum on the total amount of the claim 9 ultimately authorized, as calculated from fifteen days after 10 the date the claim was submitted. 11 2. For Medicaid provider claims ultimately found to be 12 incorrectly denied or underpaid through an appeals process or 13 audit, a managed care organization shall pay, in addition to 14 the amount determined to be owed, interest in an amount equal 15 to eighteen percent per annum on the total amount of the claim 16 ultimately authorized as calculated from fifteen days after the 17 date the claim was submitted. 18 3. A managed care organization shall provide written notice 19 to all affected individuals at least thirty days prior to a 20 change in administrative processes or procedures relating to 21 the scope or coverage of benefits, billings and collections 22 provisions, provider network provisions, member or provider 23 services, prior authorization requirements, or any other terms 24 of a managed care contract or agreement upon which an affected 25 individual relies under Medicaid managed care. 26 4. A managed care organization shall pay, contest, deny, or 27 settle a claim, in whole or in part, within forty-five business 28 days after receipt of the claim. If a claim is contested 29 or denied, the managed care organization shall, with as much 30 specificity as possible, identify the claim or portion of the 31 claim affected, provide an explanation and the reasons for 32 contesting or denying the claim, and provide the claimant with 33 instructions for appealing the contested or denied claim. 34 5. A managed care organization shall complete the internal 35 -1- LSB 5779XS (4) 87 pf/rh 1/ 3

S.F. 2221 review process for any claim submitted within ninety business 1 days of receipt of the request for internal review. If the 2 first level of review is not completed within the ninety-day 3 period, the claim shall be subject to contested case review 4 pursuant to chapter 17A, notwithstanding the fact that the 5 claimant has not exhausted the managed care organization’s 6 internal review process and received a final written 7 determination from the managed care organization. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanation’s substance by the members of the general assembly. 11 This bill requires the department of human services (DHS) 12 to adopt administrative rules and amend all Medicaid managed 13 care contracts to require compliance with various policies and 14 procedures. 15 The bill provides that if a managed care organization (MCO) 16 fails to pay, contest, deny, or settle a clean claim in full 17 within the time frame established by the managed care contract, 18 the MCO is required to pay the claimant interest equal to 18 19 percent per annum on the total amount of the claim ultimately 20 authorized as calculated from 15 days after the date the claim 21 was submitted. For claims ultimately found to be incorrectly 22 denied or underpaid through an appeals process or audit, an MCO 23 is required to pay, in addition to the amount determined to be 24 owed, interest of 18 percent per annum on the total amount of 25 the claim authorized. 26 The bill requires an MCO to provide written notice to all 27 affected individuals at least 30 days prior to a change in any 28 term of a managed care contract or agreement upon which an 29 affected individual has relied under the Medicaid managed care 30 program. 31 The bill requires an MCO to pay, contest, or deny a claim, 32 in whole or in part, within 45 business days after receipt of 33 the claim. If a claim is contested or denied, the managed 34 care organization shall, with as much specificity as possible, 35 -2- LSB 5779XS (4) 87 pf/rh 2/ 3

S.F. 2221 identify the claim or portion of the claim affected, provide 1 an explanation and the reasons for contesting or denying the 2 claim, and provide the claimant with instruction for appeal of 3 the claim. 4 The bill requires an MCO to complete the internal review 5 process for any claim submitted within 90 business days of 6 receipt of the request for internal review. If the internal 7 review is not completed within the 90-day period, the claim is 8 subject to contested case review pursuant to Code chapter 17A, 9 notwithstanding the fact that the claimant has not exhausted 10 the managed care organization’s internal review process and 11 received a final written determination from the MCO. 12 -3- LSB 5779XS (4) 87 pf/rh 3/ 3