SF 334 (LSB 1957SV (5) 88)

SENATE FILE 334

BY  COMMITTEE ON LABOR AND BUSINESS RELATIONS

(SUCCESSOR TO SSB 1131)

(As Amended and Passed by the Senate 2019-04-01)

A BILL FOR

An Act relating to public assistance program oversight.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  PUBLIC ASSISTANCE PROGRAMS —— VERIFICATION OF APPLICANT ELIGIBILITY.
   1.  The department of human services shall implement an eligibility verification system for public assistance programs to verify the eligibility of an individual who is an applicant for any such program. The information to be verified and sources to be examined for each individual shall include but are not limited to all of the following: 
   a.  Earned and unearned income.
   b.  Employment status and changes in employment.
   c.  Immigration status.
   d.  Residency status, including a nationwide best-address source to verify that individuals are residents of the state.
   e.  Enrollment status in other state-administered public assistance programs.
   f.  Incarceration status.
   g.  Death records.
   h.  Enrollment status in public assistance programs outside of this state.
   i.  Records of any potential identity fraud or identity theft. 
   2.  The department of human services shall enter into a memorandum of understanding with any department, division, bureau, section, unit, or any other subunit of a department, as necessary, to obtain the information specified in subsection 1.
   3.  The department may contract with a third-party vendor to provide any or all of the information specified in subsection 1. Specifically, the department may contract with a third-party consumer reporting agency, as defined by the federal Fair Credit Reporting Act, 15 U.S.C. §1681a, for the purpose of obtaining real-time employment and income information as specified in subsection 1. Such contract shall not require the third-party vendor to determine applicant or enrollee eligibility. Any such contract shall include a provision that ensures that annualized savings to the state exceed the contract’s total annual cost to the state, and that the cost of a third-party vendor to provide the information is less than the cost to the department to internally obtain and compile the information.
   4.  Nothing in this section shall preclude the department of human services from receiving, reviewing, or verifying additional information related to the eligibility of an individual not specified in this section or from contracting with a third-party vendor to provide additional information not specified in this section.
   5.  For the purposes of this section, “public assistance program” shall include but is not limited to the Medicaid program, the family investment program (FIP), and the supplemental nutrition assistance program (SNAP).
    Sec. 2.  PUBLIC ASSISTANCE PROGRAMS —— REAL-TIME ELIGIBILITY MONITORING.  
   1.  The department of human services shall implement a real-time eligibility system that allows the department to obtain and review all of the following information and sources to determine ongoing eligibility of an enrollee in a public assistance program:
   a.  Earned and unearned income.
   b.  Employment status and changes in employment.
   c.  Residency status.
   d.  Enrollment status in other state-administered public assistance programs.
   e.  Financial resources.
   f.  Incarceration status.
   g.  Death records.
   h.  Lottery winnings.
   i.  Enrollment status in public assistance programs outside of the state.
   2.  The department of human services shall enter into a memorandum of understanding with any department, division, bureau, section, unit, or any other subunit of a department to obtain the information specified in subsection 1.
   3.  The department may contract with a third-party vendor to provide any or all of the information specified in subsection 1. Specifically, the department may contract with a third-party consumer reporting agency, as defined by the federal Fair Credit Reporting Act, 15 U.S.C. §1681a, for the purpose of obtaining real-time employment and income information as specified in subsection 1. Such contract shall not require the third-party vendor to determine applicant or enrollee eligibility. Any such contract shall include a provision that ensures that annualized savings to the state exceed the contract’s total annual cost to the state, and that the cost of a third-party vendor to provide the information is less than the cost to the department to internally obtain and compile the information.
   4.  The department shall explore opportunities to join existing multistate collaborations to identify individuals who are also enrolled in public assistance programs outside of the state, including the national accuracy clearinghouse. 
   5.  Nothing in this section shall preclude the department of human services from receiving or reviewing additional information related to the eligibility of an individual not specified in this section or from contracting with a third-party vendor to provide additional information not specified in this section.
   6.  If the department receives information about an enrollee in a public assistance program that indicates a potential change or discrepancy in circumstances that may affect the individual’s eligibility for that public assistance program, the department shall review the individual’s circumstances and respond appropriately, as follows:
   a.  If the review does not result in the department confirming any discrepancy or change in an individual’s circumstances that may affect eligibility, the department shall take no further action.
   b.  If the review results in the department finding a potential discrepancy or change in the individual’s circumstances that may affect eligibility, the department shall promptly notify the individual.
   (1)  The department shall provide written notice to the enrollee, which shall describe in sufficient detail the circumstances of the potential discrepancy or change, the manner in which the enrollee may respond, and the consequences of failing to take action. However, a self-declaration of an enrollee alone shall not be accepted as verification to refute the information.
   (2)  The enrollee shall have thirty business days to respond to the department in writing, to provide information to refute and resolve the potential discrepancy or change. After receiving the enrollee’s written response, the department may request additional documentation if the department determines that the documentation is inadequate or that a risk of fraud or misrepresentation exists. A self-declaration of an enrollee refuting the information shall not, alone, constitute a refutation of the potential discrepancy or change. 
   (3)  If the enrollee does not respond to the written notice in a timely manner, the department shall provide notice to terminate the individual’s enrollment, based upon the individual’s failure to cooperate, and shall terminate the individual’s enrollment in any applicable public assistance program. The individual’s eligibility shall not be reestablished until the discrepancy or change is resolved.
   (4)  If the enrollee responds to the written notice in a timely manner and disagrees with the findings, the department shall reevaluate the enrollee’s situation. If the department determines through the reevaluation that the information upon which the discrepancy or change was based is in error, the department shall take immediate action to correct the error and no further action on the enrollee’s eligibility status shall be taken. If the department affirms through the reevaluation that a discrepancy or change exists, the department shall determine the effect on the enrollee’s eligibility and take appropriate action. Written notice of the results of the department’s reevaluation and the actions to be taken shall be provided to the individual. 
   (5)  If the enrollee responds to the written notice in a timely manner and agrees with the findings, the department shall determine the effect on the enrollee’s circumstances and take appropriate action. Written notice of the actions to be taken by the department shall be provided to the individual.
   7.  For the purposes of this section:
   a.  “Public assistance program” shall include but is not limited to Medicaid, the family investment program (FIP), and the supplemental nutrition assistance program (SNAP).
   b.  “Real-time eligibility system” means an electronic, on-demand system that allows verification of all applicable public assistance program eligibility information based on the most recent information available to the department through memoranda of understanding, contracts, or other necessary agreements.
    Sec. 3.  REPORTING OF FRAUD.  If, through the department’s activities under this Act, the department discovers potential fraudulent activity, the department shall report its findings and any supportive information to the department of inspections and appeals for review.
    Sec. 4.  ADMINISTRATION —— REPORTING.
   1.  The department of human services shall adopt rules pursuant to chapter 17A to administer this Act.
   2.  The department shall submit a report to the governor and the general assembly by January 15, 2022, and by January 15 annually thereafter, detailing the impact of verification of applicant eligibility for public assistance programs and real-time eligibility monitoring of recipients of public assistance programs as provided in this Act. The reports shall include the number of cases reviewed, the number of cases closed, the number of fraud investigation referrals made, and the amount of savings and cost avoidance realized from the provisions of the Act.
   3.  The department of human services shall submit, to the centers for Medicare and Medicaid services (CMS) of the United States department of health and human services any Medicaid state plan amendment or waiver request necessary to administer this Act.
    Sec. 5.  IMPLEMENTATION.
   1.  The provisions of this Act requiring approval of a Medicaid state plan amendment or waiver shall be implemented upon receipt of such federal approval.
   2.  The provisions of this Act not requiring approval of a Medicaid state plan amendment or waiver shall be implemented on January 1, 2021.