S.F. 368 DIVISION I 1 BENEFITS COVERED UNDER HEALTH AND WELLNESS PLAN 2 Section 1. Section 249A.3, subsection 1, paragraph v, 3 subparagraph (2), Code 2017, is amended to read as follows: 4 (2) Notwithstanding any provision to the contrary, 5 individuals eligible for medical assistance under this 6 paragraph “v” shall receive coverage for benefits pursuant to 7 42 U.S.C. §1396u-7(b)(1)(B); adjusted as necessary to provide 8 the essential health benefits as required pursuant to section 9 1302 of the federal Patient Protection and Affordable Care Act, 10 Pub. L. No. 111-148; adjusted to provide prescription drugs 11 and dental services consistent with the medical assistance 12 state plan benefits package for individuals otherwise eligible 13 under this subsection; and adjusted to provide habilitation 14 services consistent with the state medical assistance program 15 section 1915(i) waiver. Beginning July 1, 2017, coverage for 16 benefits shall also include coverage for integrated health home 17 services, residential substance abuse treatment, assertive 18 community treatment, nonemergency medical transportation, and 19 peer support. 20 Sec. 2. DIRECTIVE TO DEPARTMENT OF HUMAN SERVICES. Upon 21 enactment of this division of this Act, the department of human 22 services shall request federal approval of an amendment to the 23 medical assistance state plan, as necessary, to implement this 24 division of this Act effective July 1, 2017. 25 Sec. 3. EFFECTIVE UPON ENACTMENT AND CONTINGENT 26 IMPLEMENTATION. This division of this Act, being deemed of 27 immediate importance, takes effect upon enactment. However, 28 the department of human services shall implement this division, 29 effective July 1, 2017, contingent upon receipt of federal 30 approval of the state plan amendment request submitted under 31 this division of this Act. The director of human services 32 shall notify the Code editor of the receipt of approval and the 33 date of implementation. 34 DIVISION II 35 -1- LSB 2362XS (4) 87 pf/nh 1/ 11

S.F. 368 MEDICAID MANAGED CARE QUALITY IMPROVEMENT 1 Sec. 4. MEDICAID MANAGED CARE CHANGES. The department of 2 human services shall adopt rules pursuant to chapter 17A and 3 shall amend any Medicaid managed care contract effective July 4 1, 2017, to provide for all of the following: 5 1. PRIMARY CARE PROVIDERS 6 a. A Medicaid managed care organization shall include as a 7 primary care provider any provider designated by the state as a 8 primary care provider, subject to a provider’s respective state 9 certification standards, including but not limited to all of 10 the following: 11 (1) A physician who is a family or general practitioner, a 12 pediatrician, an internist, an obstetrician, or a gynecologist. 13 (2) An advanced registered nurse practitioner. 14 (3) A physician assistant. 15 (4) A chiropractor. 16 b. A Medicaid managed care organization shall not impose 17 more restrictive scope-of-practice requirements or standards of 18 practice on a primary care provider than those prescribed by 19 state law as a prerequisite for participation in the managed 20 care organization’s provider network. 21 2. CASE MANAGEMENT 22 a. A Medicaid managed care organization shall provide 23 the option to the case manager for a Medicaid member, if the 24 case manager is not otherwise a participating provider in 25 the member’s managed care organization provider network, to 26 enter into a single case agreement to continue to provide case 27 management services to the Medicaid member at the member’s 28 request. 29 b. A Medicaid managed care organization shall allow peer 30 support specialists to serve as case managers for members 31 receiving behavioral health services, and shall not require 32 that such peer support specialists hold a bachelor’s degree 33 from an accredited school, college, or university. 34 3. MEMBER STATUS CHANGES 35 -2- LSB 2362XS (4) 87 pf/nh 2/ 11

S.F. 368 a. A Medicaid managed care organization shall provide prior 1 notice to a provider of a member of any change in the status 2 of the member that affects such provider at least fourteen 3 days prior to the effective date of the change in status. If 4 notification is not received by the provider and the member 5 continues to receive services from the provider, the Medicaid 6 managed care organization shall reimburse the provider for 7 services rendered. 8 b. If a member transfers from one managed care organization 9 to another, the managed care organization from which the 10 member is transferring shall forward the member’s records to 11 the managed care organization assuming the member’s coverage 12 at least thirty days prior to the managed care organization 13 assuming such coverage. 14 c. If a provider provides services to a member for which the 15 member is eligible while awaiting any necessary authorization, 16 and the authorization is subsequently approved, the provider 17 shall be reimbursed at the contracted rate for any services 18 provided prior to receipt of the authorization. 19 4. UNIFORMITY OF PROGRAM 20 a. The department of human services shall work with the 21 Medicaid managed care organizations to institute consistency 22 and uniformity across processes and procedures, including 23 but not limited to those related to claims filing and denial 24 of claims, integrated health home criteria, and appeals and 25 grievances. 26 b. The department shall require the use and application of 27 the following definition of medically necessary services across 28 all Medicaid managed care organizations: 29 “Medically necessary services” means those services that 30 a prudent health care provider would provide to prevent, 31 diagnose, or treat an illness, injury, disease, or symptoms of 32 an illness, injury, or disease in a manner that meets all of 33 the following requirements: 34 (1) The services are in accordance with generally accepted 35 -3- LSB 2362XS (4) 87 pf/nh 3/ 11

S.F. 368 standards of medical practice. 1 (2) The services are clinically appropriate in terms of 2 type, frequency, extent, site, and duration. 3 (3) The services are not primarily for the economic benefit 4 of the managed care organization or health care provider or for 5 the convenience of the member or health care provider. 6 5. OVERSIGHT. The department shall require completion of an 7 initial external quality review of the Medicaid managed care 8 program by January 1, 2018. Additionally, the department shall 9 contract with the university of Iowa public policy center to 10 perform an evaluation of the program by January 1, 2018. 11 6. DATA. The department shall amend the requirements for 12 quarterly reports to require that managed care organizations 13 report not only the percentage of medical and pharmacy clean 14 claims paid or denied within a certain time frame but also all 15 of the following: 16 a. The total number of original medical and pharmacy claims 17 submitted to the managed care organization during the time 18 period. 19 b. The total number of original medical and pharmacy claims 20 deemed rejected and the reason for rejection. 21 c. The total number of original medical and pharmacy claims 22 deemed suspended, the reason for suspension, and the number of 23 days from suspension to submission for processing. 24 d. The total number of original medical and pharmacy 25 claims initially deemed either rejected or suspended that are 26 subsequently deemed clean claims and paid, and the average 27 number of days from initial submission to payment of the clean 28 claim. 29 e. The total number of medical and pharmacy claims that 30 are outstanding for thirty, sixty, ninety, one hundred eighty, 31 or more than one hundred eighty days, and the total amount 32 attributable to these outstanding claims if paid as submitted. 33 f. The total amount requested as payment for all original 34 medical or pharmacy claims versus the total actual amount paid 35 -4- LSB 2362XS (4) 87 pf/nh 4/ 11

S.F. 368 as clean claims and the total amount of payment denied. 1 7. REIMBURSEMENT. For the fiscal year beginning July 1, 2 2017, Medicaid providers or services shall be reimbursed as 3 follows: 4 a. For fee-for-service claims, reimbursement shall be 5 calculated based on the methodology in effect on June 30, 2017, 6 for the respective provider or service. 7 b. For claims subject to a managed care contract: 8 (1) Reimbursement shall be based on the methodology 9 established by the managed care contract. However, any 10 reimbursement established under such contract shall not be 11 lower than the rate floor established by the department of 12 human services as the managed care organization provider or 13 service reimbursement rate floor for the respective provider or 14 service in effect on April 1, 2016. 15 (2) For any provider or service to which a reimbursement 16 increase is applicable for the fiscal year under state law, 17 upon the effective date of the reimbursement increase, the 18 department of human services shall modify the rate floor in 19 effect on April 1, 2016, to reflect the increase specified. 20 Any reimbursement established under the managed care contract 21 shall not be lower than the rate floor as modified by the 22 department of human services to reflect the provider rate 23 increase specified. 24 (3) Any reimbursement established between the managed 25 care organization and the provider shall be in effect for at 26 least twelve months from the date established, unless the 27 reimbursement is increased. A reimbursement rate that is 28 negotiated and established above the rate floor shall not be 29 decreased from that amount for at least twelve months from the 30 date established. 31 8. PRIOR AUTHORIZATION 32 a. A Medicaid managed care organization shall approve or 33 deny a prior authorization request submitted by a provider for 34 a prescription drug or service within the following periods, 35 -5- LSB 2362XS (4) 87 pf/nh 5/ 11

S.F. 368 as applicable: 1 (1) For urgent claims, within a period not to exceed 2 forty-eight hours from the time the Medicaid managed care 3 organization receives the request. 4 (2) For nonurgent claims, within a period not to exceed 5 five calendar days from the time the Medicaid managed care 6 organization receives the request. 7 b. Emergency claims for prescription drugs or services 8 shall not require prior authorization by a Medicaid managed 9 care organization. Prior authorization shall not be required 10 for prehospital transportation and emergency services, and 11 coverage shall be provided for emergency services necessary 12 to screen and stabilize a member. A provider that submits 13 written certification to the managed care organization within 14 seventy-two hours of admission of a member who was admitted 15 to a hospital through the emergency department shall create 16 a presumption that the emergency services were medically 17 necessary for purposes of coverage. 18 c. If a Medicaid managed care organization approves a 19 provider’s prior authorization request for a prescription drug 20 or service for a patient who is in stable condition as verified 21 by the provider, the prior authorization shall be valid for a 22 period of twelve months from the date the approval is received 23 by the provider. 24 d. If a Medicaid managed care organization approves a 25 provider’s prior authorization request for a prescription 26 drug or service, the managed care organization shall not 27 retroactively revoke, limit, condition, or restrict the prior 28 authorization after the prescription drug is dispensed or the 29 service is provided. 30 e. Any change by a Medicaid managed care organization in a 31 requirement for prior authorization for a prescription drug or 32 service shall be preceded by the provision of sixty days’ prior 33 notice published on the managed care organization’s internet 34 site and to all affected providers before the effective date 35 -6- LSB 2362XS (4) 87 pf/nh 6/ 11

S.F. 368 of the change. 1 f. Each managed care organization shall post to the managed 2 care organization’s internet site prior authorization data 3 including but not limited to statistics on approvals and 4 denials of prior authorization requests by physician specialty, 5 medication, test, procedure, or service, the indication 6 offered, and if denied, the reason for denial. 7 g. The department of human services shall require any 8 Medicaid managed care organization under contract with 9 the state to jointly develop and utilize the same prior 10 authorization review process, including but not limited to 11 shared electronic and paper forms, subject to final review and 12 approval by the department. 13 Sec. 5. EFFECTIVE UPON ENACTMENT. This division of this 14 Act, being deemed of immediate importance, takes effect upon 15 enactment. 16 EXPLANATION 17 The inclusion of this explanation does not constitute agreement with 18 the explanation’s substance by the members of the general assembly. 19 This bill relates to the Medicaid program and Medicaid 20 managed care. 21 Division I of the bill amends the required benefits under 22 the Iowa health and wellness plan to provide that, beginning 23 July 1, 2017, covered benefits shall include integrated health 24 home services, residential substance abuse treatment, assertive 25 community treatment, nonemergency medical transportation, 26 and peer support. The bill directs the department of human 27 services (DHS), upon enactment of the bill, to request federal 28 approval of an amendment to the medical assistance state plan, 29 as necessary, to implement the provision. The division takes 30 effect upon enactment, but is not to be implemented until DHS 31 receives federal approval of the state plan amendment request. 32 Division II of the bill includes provisions relating to 33 Medicaid managed care quality improvement. 34 The bill requires DHS to adopt rules and amend Medicaid 35 -7- LSB 2362XS (4) 87 pf/nh 7/ 11

S.F. 368 managed care contracts as necessary to implement the 1 improvements. 2 The bill requires Medicaid managed care organizations (MCOs) 3 to include as a primary care provider any provider designated 4 by the state as a primary care provider, subject to a 5 provider’s respective state certification standards, including 6 but not limited to a physician who is a family or general 7 practitioner, a pediatrician, an internist, an obstetrician, or 8 a gynecologist; an advanced registered nurse practitioner; a 9 physician assistant; and a chiropractor. The MCO is prohibited 10 from imposing more restrictive scope-of-practice requirements 11 or standards of practice on a primary care provider than those 12 prescribed by state law as a prerequisite for participation in 13 the managed care organization’s provider network. 14 With regard to case management services, the bill requires 15 MCOs to provide the option to the case manager of a Medicaid 16 member, if the case manager is not otherwise a participating 17 provider of the member’s managed care organization provider 18 network, to enter into a single case agreement to continue to 19 provide case management services to the Medicaid member at 20 the member’s request. The bill also requires MCOs to allow 21 peer support specialists to serve as case managers for members 22 receiving behavioral health services, and shall not require 23 that such peer support specialists hold a bachelor’s degree 24 from an accredited school, college, or university. 25 With regard to member status changes, the bill requires 26 MCOs to provide prior notice to a provider of a member of any 27 change in the status of the member that affects such provider 28 at least 14 days prior to the effective date of the change in 29 status. If notification is not received by the provider and 30 the member continues to receive services from the provider, 31 the MCO shall reimburse the provider for services rendered. 32 If a member transfers from one MCO to another, the MCO from 33 which the member is transferring shall forward the member’s 34 records to the MCO assuming the member’s coverage at least 30 35 -8- LSB 2362XS (4) 87 pf/nh 8/ 11

S.F. 368 days prior to the MCO assuming such coverage. Additionally, 1 if a provider provides services to a member for which the 2 member is eligible while the provider is awaiting any necessary 3 authorization to provide the service, and the authorization is 4 subsequently approved, the provider shall be reimbursed at the 5 contracted rate for any services provided prior to receipt of 6 the authorization. 7 With regard to uniformity of the program, DHS is required 8 to work with the MCOs to institute consistency and uniformity 9 across processes and procedures, including but not limited 10 to those related to claims filing and denial of claims, 11 integrated health home criteria, and appeals and grievances. 12 DHS is required to use and apply the definition of “medically 13 necessary services” included in the bill across all Medicaid 14 MCOs. 15 With regard to oversight, the bill requires DHS to complete 16 an initial external quality review of the Medicaid managed care 17 program by January 1, 2018, and to contract with the university 18 of Iowa public policy center to perform an evaluation of the 19 program by January 1, 2018. 20 With regard to data, the bill requires DHS to amend the 21 requirements for quarterly reports to require that MCOs, in 22 addition to reporting the percentage of medical and pharmacy 23 clean claims paid or denied within a certain time frame, to 24 also report additional data regarding claims as specified in 25 the bill. 26 With regard to reimbursement, the bill requires 27 reimbursement beginning July 1, 2017, for Medicaid providers 28 and services to be calculated based on the methodology in 29 effect on June 30, 2017, for the respective provider or 30 service for fee-for-service claims and for claims subject to 31 a managed care contract reimbursement shall be based on the 32 methodology established by the managed care contract. However, 33 any reimbursement established under such contract shall not 34 be lower than the rate floor established by DHS as a rate 35 -9- LSB 2362XS (4) 87 pf/nh 9/ 11

S.F. 368 floor for the respective provider or service in effect on 1 April 1, 2016. However, if any provider or service to which a 2 reimbursement increase is applicable for the fiscal year under 3 state law beginning July 1, 2017, upon the effective date of 4 the reimbursement increase, DHS shall modify the rate floor in 5 effect on April 1, 2016, to reflect the increase specified. 6 Any reimbursement established under the managed care contract 7 shall not be lower than the rate floor as modified by 8 DHS to reflect the provider rate increase specified. Any 9 reimbursement established between the managed care organization 10 and the provider shall be in effect for at least 12 months from 11 the date established, unless the reimbursement is increased. A 12 reimbursement rate negotiated and established above the rate 13 floor shall not be decreased from that negotiated amount for at 14 least a 12-month period. 15 With regard to prior authorization, the bill provides 16 that approval from the MCO shall be received by the provider 17 submitting the prior authorization request for a prescription 18 drug or service within a period not to exceed 48 hours from 19 the time the MCO receives the request for urgent claims and 20 within a period not to exceed five calendar days for nonurgent 21 claims; prohibits an MCO from requiring prior authorization 22 for emergency claims for prescription drugs or services and 23 prohibits prior authorization for certain emergency services; 24 provides that once approval is received by a provider for a 25 prior authorization request for a prescription drug or service 26 for a patient who is in stable condition as verified by the 27 provider, the approved prior authorization shall be valid for a 28 period of 12 months; prohibits retroactive action once a prior 29 authorization is approved; requires that any change by an MCO 30 in a requirement for prior authorization for a prescription 31 drug or service shall be preceded by 60 days’ prior notice 32 published on the MCO’s internet site and provided to all 33 affected providers before the effective date of the change. 34 The bill requires an MCO to place certain prior authorization 35 -10- LSB 2362XS (4) 87 pf/nh 10/ 11