Pages 1715 to 1805 include ARC 1559B to ARC 1598B

Filed, Rescind chs 1 to 19; adopt chs 1 to 19
ARC 1581B 1789

Administrative rules review committee 1706

Schedule for rule making 1704

Publication procedures 1705

Administrative rules on CD–ROM 1705

Agency identification numbers 1713

Opinions summarized 1806

Notice, Administrative organization and
procedures, 1.2 to 1.4, 1.5(1), 1.9, 1.11,
1.12 ARC 1566B 1715

Notice, Library for the blind and physically
handicapped, 6.2, 6.5 ARC 1567B 1716

Notice, Business enterprises program,
7.1 to 7.4, 7.5(2), 7.6(1), 7.9(2), 7.10(1),
7.11(1), 7.13, 7.15(1), 7.17 ARC 1568B 1717

Notice, Vocational rehabilitation services,
10.1, 10.3 to 10.6, 10.8 to 10.10
ARC 1570B 1719

Notice, Independent living rehabilitation
services, 11.2 to 11.5, 11.7 to 11.11
ARC 1571B 1721

Notice, Public records and fair information
practices, 13.1, 13.3, 13.13 ARC 1569B 1725

CITATION OF ADMINISTRATIVE RULES 1712

Notice 1726

Notice, Visitation for offenders,
20.1 to 20.3; rescind chs 21 to 29
ARC 1559B 1726

Filed Emergency, Visitation for offenders,
20.1 to 20.3; rescind chs 21 to 29
ARC 1592B 1778

Notice, English as a second language
endorsement, 14.140(4) ARC 1580B 1727

Amended Notice, Offset of county debts owed
department—organizational references and
appeal process, 14.2, 14.3, 14.4(1), 14.5,
14.6(2) ARC 1594B 1728

Notice, Waiver services, 77.30, 77.33, 77.34,
77.37, 77.39, 77.41, 78.34(9), 78.43, 78.46,
79.1, 83.2, 83.3, 83.11, 83.23(4), 83.31, 83.42,
83.43(3), 83.50, 83.61, 83.62, 83.67, 83.70,
83.71, 83.82, 83.83, 83.87, 83.90, 83.91,
83.102, 83.103(2), 83.107(3), 83.111
ARC 1595B 1729

Filed, Field operations structure, 1.4, 3.5(2)
ARC 1561B 1790

Filed, Family investment program, 41.24,
41.27(1), 41.28, 93.110(6), 93.134
ARC 1562B 1792

Filed Emergency, Medicaid—rescission of
reduction in payments to providers,
78.3, 79.1(1)“g,” 79.1(2), 79.1(8)“a,”
79.1(18), 81.6(4)“a,” 81.6(16) ARC 1589B 1779

Filed, Medicaid—coverage for dental
services for adults, 78.4, 78.4(14)
ARC 1563B 1794

Filed, Medicaid policy—dental services,
78.4, 78.28(2), 79.1(20) ARC 1564B 1794

Filed, Reimbursement to inpatient and
outpatient hospitals, 79.1 ARC 1565B 1797

Notice, Long–term care insurance, 39.4 to 39.7,
39.9(1), 39.10, 39.11(6), 39.13, 39.15, 39.16,
39.18(9), 39.19, 39.20, 39.23 to 39.32
ARC 1593B 1738

Filed, Housing assistance fund (HAF)—rescind
definition of “hard–to–house populations,”
15.6 ARC 1587B 1799

Notice, Fees; permanent physician licensure,
8.4(1), 9.1, 9.4(1), 9.11(6), 9.12(1), 9.13,
9.15(2) ARC 1574B 1759

Notice, Definitions—“approved abuse education
training program” and “mandatory training
for identifying and reporting abuse,” 10.1
ARC 1578B 1761

Notice, Providers of abuse education training—
hospitals and professional organizations for
physicians; continuing education to be acquired
within the license period, 11.1, 11.4(1)“a”
ARC 1577B 1761

Notice, Update of federal drug laws;
requirements—physicians who prescribe
or administer controlled substances
for treatment of chronic, nonmalignant pain,
13.1(1), 13.2 ARC 1560B 1762

Filed, Fee for SPEX eliminated, 8.3
ARC 1573B 1799

Filed Emergency, Fees; permanent physician
licensure, 8.4(1), 9.13 ARC 1575B 1784

Filed, Special physician licenses—foreign
medical graduates, 9.3(1)“d,” 10.4(1)
ARC 1576B 1800

Filed, Physicians designated to take mandatory
training on identifying and reporting child
and dependent adult abuse, 11.4(1)“c”
ARC 1579B 1800

Notice, IPERS, 21.4(1)“f,” 21.6, 21.8(4)“a,”
21.29, 21.34 ARC 1582B 1763

Filed, IPERS, 17.3(1), 21.3(6), 21.5(1)“a,”
21.18(2), 21.24(14)“a,” 21.26, 21.29(2)“c,”
21.34, 31.1(2), 33.3 ARC 1586B 1801

Filed Emergency, IPERS, 21.4(1)“f,” 21.6,
21.8(4)“a,” 21.29, 21.34 ARC 1583B 1785

Notice, Chiropractors, chs 40 to 46
ARC 1588B 1764

Notice, Administrative and regulatory
authority for the board of examiners
for nursing home administrators, ch 140
ARC 1590B 1775

Filed, Materials for board review, 17.1
ARC 1591B 1802

Summarized list 1709

Notice 1777

Filed, Sale of goods and services, 1.6(2)
ARC 1584B 1803

Filed, Update of pipeline and transmission
line rules, 10.2(1), 10.3(4)“a,” 11.5(1)“a,”
13.2(1) ARC 1585B 1803

Filed, Prehearing conference report;
prehearing procedure, 3.1(20), 4.2, 4.9,
4.20 ARC 1596B 1804

Filed Emergency, Payroll tax tables, 8.8
ARC 1597B 1787

Notice, Temporary extended unemployment
compensation, 24.50 ARC 1572B 1777

Filed Emergency, Temporary extended
unemployment compensation, 24.50
ARC 1598B 1787

PUBLISHED UNDER AUTHORITY OF IOWA CODE SECTIONS 2B.5 AND 17A.6

__________________________________

The Iowa Administrative Bulletin is published biweekly in pamphlet form pursuant to Iowa Code chapters 2B and 17A and contains Notices of Intended Action on rules, Filed and Filed Emergency rules by state agencies.

It also contains Proclamations and Executive Orders of the Governor which are general and permanent in nature; Economic Impact Statements to proposed rules and filed emergency rules; Objections filed by Administrative Rules Review Committee, Governor or the Attorney General; and Delay by the Committee of the effective date of filed rules; Regulatory Flexibility Analyses and Agenda for monthly Administrative Rules Review Committee meetings. Other “materials deemed fitting and proper by the Administrative Rules Review Committee” include summaries of Public Hearings, Attorney General Opinions and Supreme Court Decisions.

The Bulletin may also contain Public Funds Interest Rates [12C.6]; Workers’ Compensation Rate Filings [515A.6(7)]; Usury [535.2(3)“a”]; Agricultural Credit Corporation Maximum Loan Rates [535.12]; and Regional Banking—Notice of Application and Hearing [524.1905(2)].

PLEASE NOTE: Italics indicate new material added to existing rules; strike through letters indicate deleted material.

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TO: Administrative Rules Coordinators and Text Processors of State Agencies

FROM: Kathleen K. Bates, Iowa Administrative Code Editor

SUBJECT: Publication of Rules in Iowa Administrative Bulletin

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State Capitol
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The Administrative Rules Review Committee will hold its regular, statutory meeting on Tuesday, May 14, 2002, at 9 a.m. in
Room 116, State Capitol, Des Moines, Iowa. The following rules will be reviewed:

To All Agencies:

The Administrative Rules Review Committee voted to request that Agencies comply with Iowa Code section 17A.4(1)“b” by allowing the opportunity for oral presentation (hearing) to be held at least twenty days after publication of Notice in the Iowa Administrative Bulletin.

CITATION of Administrative Rules

The Iowa Administrative Code shall be cited as (agency identification number) IAC
(chapter, rule, subrule, lettered paragraph, or numbered subparagraph).

441 IAC 79 (Chapter)

441 IAC 79.1(249A) (Rule)

441 IAC 79.1(1) (Subrule)

441 IAC 79.1(1)“a” (Paragraph)

441 IAC 79.1(1)“a”(1) (Subparagraph)

The Iowa Administrative Bulletin shall be cited as IAB (volume), (number), (publication
date), (page number), (ARC number).

IAB Vol. XII, No. 23 (5/16/90) p. 2050, ARC 872A

Due to reorganization of state government by 1986 Iowa Acts, chapter 1245, it was necessary to revise the agency identification numbering system, i.e., the bracketed number following the agency name.

“Umbrella” agencies and elected officials are set out below at the left–hand margin in CAPITAL letters.

Divisions (boards, commissions, etc.) are indented and set out in lowercase type under their statutory “umbrellas.”

Other autonomous agencies which were not included in the original reorganization legislation as “umbrella” agencies are included alphabetically in small capitals at the left–hand margin, e.g., BEEF INDUSTRY COUNCIL, IOWA[101].

The following list will be updated as changes occur:

AGRICULTURE AND LAND STEWARDSHIP DEPARTMENT[21]

Agricultural Development Authority[25]

Soil Conservation Division[27]

ATTORNEY GENERAL[61]

AUDITOR OF STATE[81]

CITIZENS’ AIDE[141]

CIVIL RIGHTS COMMISSION[161]

COMMERCE DEPARTMENT[181]

Alcoholic Beverages Division[185]

Banking Division[187]

Credit Union Division[189]

Insurance Division[191]

Professional Licensing and Regulation Division[193]

Accountancy Examining Board[193A]

Architectural Examining Board[193B]

Engineering and Land Surveying Examining Board[193C]

Landscape Architectural Examining Board[193D]

Real Estate Commission[193E]

Real Estate Appraiser Examining Board[193F]

Savings and Loan Division[197]

Utilities Division[199]

CORRECTIONS DEPARTMENT[201]

Parole Board[205]

CULTURAL AFFAIRS DEPARTMENT[221]

Arts Division[222]

Historical Division[223]

ECONOMIC DEVELOPMENT, IOWA DEPARTMENT OF[261]

City Development Board[263]

Iowa Finance Authority[265]

EDUCATION DEPARTMENT[281]

Educational Examiners Board[282]

College Student Aid Commission[283]

Higher Education Loan Authority[284]

Iowa Advance Funding Authority[285]

Libraries and Information Services Division[286]

Public Broadcasting Division[288]

School Budget Review Committee[289]

ELDER AFFAIRS DEPARTMENT[321]

EXECUTIVE COUNCIL[361]

GENERAL SERVICES DEPARTMENT[401]

HUMAN RIGHTS DEPARTMENT[421]

Community Action Agencies Division[427]

Criminal and Juvenile Justice Planning Division[428]

Deaf Services Division[429]

Persons With Disabilities Division[431]

Latino Affairs Division[433]

Status of African–Americans, Division on the[434]

Status of Women Division[435]

HUMAN SERVICES DEPARTMENT[441]

INFORMATION TECHNOLOGY DEPARTMENT[471]

INSPECTIONS AND APPEALS DEPARTMENT[481]

Employment Appeal Board[486]

Foster Care Review Board[489]

Racing and Gaming Commission[491]

State Public Defender[493]

LAW ENFORCEMENT ACADEMY[501]

MANAGEMENT DEPARTMENT[541]

Appeal Board, State[543]

City Finance Committee[545]

County Finance Committee[547]

NATURAL RESOURCES DEPARTMENT[561]

Energy and Geological Resources Division[565]

Environmental Protection Commission[567]

Natural Resource Commission[571]

Preserves, State Advisory Board for[575]

PERSONNEL DEPARTMENT[581]

PUBLIC DEFENSE DEPARTMENT[601]

Emergency Management Division[605]

Military Division[611]

PUBLIC EMPLOYMENT RELATIONS BOARD[621]

PUBLIC HEALTH DEPARTMENT[641]

Substance Abuse Commission[643]

Professional Licensure Division[645]

Dental Examiners Board[650]

Medical Examiners Board[653]

Nursing Board[655]

Pharmacy Examiners Board[657]

PUBLIC SAFETY DEPARTMENT[661]

REGENTS BOARD[681]

Archaeologist[685]

REVENUE AND FINANCE DEPARTMENT[701]

Lottery Division[705]

SECRETARY OF STATE[721]

TRANSPORTATION DEPARTMENT[761]

Railway Finance Authority[765]

TREASURER OF STATE[781]

WORKFORCE DEVELOPMENT DEPARTMENT[871]

Labor Services Division[875]

Workers’ Compensation Division[876]

Workforce Development Board and
Workforce Development Center Administration Division[877]

Pursuant to the authority of Iowa Code section 216B.6, the Commission for the Blind hereby gives Notice of Intended Action to amend Chapter 1, “Administrative Organization and Procedures,” Iowa Administrative Code.

The proposed amendments update the administrative organization and procedures of the Department as outlined in Iowa Code chapter 216B.

Persons are invited to present oral or written comments at a public hearing which will be held Tuesday, May 21, 2002, at 11 a.m. at the Department for the Blind, 524 Fourth Street, Des Moines, Iowa. Proposed amendments to Chapters 1, 6, 7, 10, 11, and 13 are available by calling Allen C. Harris, Director, Department for the Blind, (515)281–1336 or (800)362–2587. Persons who plan to attend the hearing and need interpreter services or other accommodations should call Becky Cox by May 17, 2002, at the numbers above. At the hearing, persons will be asked to confine their remarks to the subject of the amendments.

Also, any interested person may make written suggestions or comments on the proposed amendments through May 21, 2002. Such written suggestions or comments should be directed to the Commission for the Blind, 524 Fourth Street, Des Moines, Iowa 50309–2364; fax (515)281–1263.

These amendments are intended to implement Iowa Code chapter 216B.

The following amendments are proposed.

ITEM 1. Amend rule 111—1.2(216B) as follows:

111—1.2(216B) History and function. To respond to the unique needs of the blind of Iowa, the general assembly established the Iowa commission for the blind on April 1, 1925. Although specific programs for the blind have varied even in recent years, the basic mission to promote positive attitudes toward blindness has remained constant. As a result of state government reorganization in 1986, the commission for the blind became a division of the department of human rights. However, the 72nd General Assembly restored the commission’s separate status by establishing a department for the blind in 1988.

ITEM 2. Amend rule 111—1.3(216B) as follows:

111—1.3(216B) Location and information. The central office of the department is located at 524 Fourth Street, Des Moines, Iowa 50309–2364, telephone (515)281–1333, (incoming WATS number (800)362–2587). District offices are located at 411 Third Street SE, Suite 745, Cedar Rapids, Iowa 52401–1811, telephone (319)365–9111, (incoming WATS number (888)346–9557); 2915 McClain Drive, Suite A, Cedar Falls, Iowa 50613–5266, telephone (319)268–2981, (incoming WATS number (888)378–4397). Information concerning department services may be obtained by contacting any of these offices.

ITEM 3. Amend rule 111—1.4(216B), definition of “blind” or “blindness,” as follows:

“Blind” or “blindness,” except as applicable to the business enterprises program, refers to the condition of an individual who meets one or more of the following criteria:(1) vision not more than 20/200 central visual acuity in the better eye, with ordinary corrective lenses, or a field defect in which the peripheral field has contracted to an extent that the widest diameter of visual field subtends to an angular distance of not greater than 20 degrees; (2) a combination of loss of visual acuity and loss of visual field which imposes an employment handicap which is substantially that of a blind person; (3) medical prognosis indicating a progressive loss of sight which will terminate in the condition described in criteria one; (4) a visual impairment sufficient to warrant attendance at the Iowa braille and sight saving school or programs for the severely visually impaired in the public schools; or (5) (4) a visual impairment which by agreement of the division of vocational rehabilitation services of the Iowa department of education and the department is such that the individual can be best served by the department.

ITEM 4. Amend subrule 1.5(1) as follows:

1.5(1) Meetings. The commission shall hold at least six meetings each year and as many additional meetings as are needed meet as often as necessary to conduct business expeditiously and efficiently. To the maximum extent practicable, meetings will be held outside normal working hours to encourage attendance.

ITEM 5. Amend rule 111—1.9(216B) as follows:

111—1.9(216B) Authorization for use of facilities. Department facilities are available for the use of groups of blind individuals or other groups or organizations interested in working with blind individuals when the activity does not interfere with the conduct of department business. Authorization for the use of facilities must be obtained from the director or designee.

ITEM 6. Amend rule 111—1.11(216B) as follows:

111—1.11(216B) Administration of the expendable trust gifts and bequests fund. Pursuant to Iowa Code section 216B.3(8), there is established an expendable trust a gifts and bequests fund maintained by the department of revenue and finance and administered by the department for the blind.

1.11(1) Gifts and bequests fund. The gifts and bequests fund is established primarily to provide direct financial assistance in the form of grants or loans to blind Iowans which will materially assist in independent living or vocational success or to provide department services or support services for which other funds are not available. Grants or loans may not be given for the purpose of income maintenance or continuing support.

a. Use for department operations. Use of gifts and bequests for routine, ongoing department operations must be approved by the commission.

b. Eligibility. Recipients of grants or loans must be blind individuals, as defined in rule 1.4(216B), who are residents of the state and whom the director or committee commission has determined to demonstrate a need for assistance.

d c. Application process. Applications must be submitted to the director or designee for review. Applications not exceeding $2,500 may be approved by the director or designee. Applications exceeding $2,500 shall not be subject to approval or disapproval by the director or designee but shall be submitted to the commission for approval. and, if appropriate, recommendation to the grants and loans review committee. However, when the application is for a grant or loan in the amount of $2,500 or less, the director may approve the application. Upon recommendation by the director, the grants and loans review committee will review an application. If approved by the grants and loans review committee, the application will be forwarded to the commission for final approval.

1.11(2) Vending facilities fund. The vending facilities fund is established to provide low interest loans to active licensed vendors. The director may approve loans in any amount from these moneys for use as start–up capital or for the purchase of inventory. Upon approval, the director will establish a repayment schedule.

1.11(3) Availability of records. Names of applicants or recipients of grants or loans from these funds are confidential records under 111—subrule 13.13(2). Disclosure may be made only for routine use as delineated in rule 111— 13.10(17A,22).

ITEM 7. Rescind rule 111—1.12(216B) and adopt in lieu thereof the following new rule:

1.12(1) The procurement of goods and services for clients of the department shall be in accordance with the requirements of informed choice as defined in 34 CFR 361.52 (effective March 13, 1997).

1.12(2) Procurement of goods. Except as provided in 1.12(1) above, the procurement of goods shall be conducted in accordance with procurement standards and procedures established at 34 CFR 80.36 (effective March 5, 2001) for state government grantees.

Pursuant to the authority of Iowa Code section 216B.6, the Commission for the Blind hereby gives Notice of Intended Action to amend Chapter 6, “Library for the Blind and Physically Handicapped,” Iowa Administrative Code.

The proposed amendments provide for changes in library services.

Persons are invited to present oral or written comments at a public hearing which will be held Tuesday, May 21, 2002, at 11 a.m. at the Department for the Blind, 524 Fourth Street, Des Moines, Iowa. Proposed amendments to Chapters 1, 6, 7, 10, 11, and 13 are available by calling Allen C. Harris, Director, Department for the Blind, (515)281–1336 or (800)362–2587. Persons who plan to attend the hearing and need interpreter services or other accommodations should call Becky Cox by May 17, 2002, at the numbers above. At the hearing, persons will be asked to confine their remarks to the subject of the amendments.

Also, any interested person may make written suggestions or comments on the proposed amendments through May 21, 2002. Such written suggestions or comments should be directed to the Commission for the Blind, 524 Fourth Street, Des Moines, Iowa 50309–2364; fax (515)281–1263.

These amendments are intended to implement Iowa Code chapter 216B.

The following amendments are proposed.

ITEM 1. Amend rule 111—6.2(216B) as follows:

111—6.2(216B) Services. Services include, but are not limited to, provision and circulation of books and magazines, magazines and videos in braille, recorded disc, recorded cassette, electronic text, descriptive video, or large–type formats; provision and maintenance of playback equipment; transcription, production and duplication of standard print material into braille, recorded cassette, or large–type electronic text formats; and research, acquisition by loan or purchase, or production of, instructional materials.

6.2(1) Transcription of standard print reading materials into alternative media. Transcription of standard print reading materials into the alternative media of braille, cassette tape, or large type electronic text shall be provided to the extent that resources are available and following research of the library for the blind and physically handicapped and other libraries, volunteer production agencies, and vendors which confirm that the requested item is not available in any alternative media which can be effectively used by the library patron; or that the item exists, but cannot be acquired by loan, purchase, or duplication. Priority will be given to requests which enable persons to meet a vocational or educational need. Transcription is one method of providing access to standard print reading materials, and will be used in combination with other resources in order to provide as much support as possible to each person requesting transcription services.

Other requests will be honored contingent upon availability of resources.

6.2(2) Reserved.

ITEM 2. Rescind and reserve rule 111—6.5(17A).

Pursuant to the authority of Iowa Code section 216B.6, the Commission for the Blind hereby gives Notice of Intended Action to amend Chapter 7, “Business Enterprises Program,” Iowa Administrative Code.

The proposed amendments update the department’s responsibilities under the Randolph–Sheppard Act and Iowa Code chapter 216D.

Persons are invited to present oral or written comments at a public hearing which will be held Tuesday, May 21, 2002, at 11 a.m. at the Department for the Blind, 524 Fourth Street, Des Moines, Iowa. Proposed amendments to Chapters 1, 6, 7, 10, 11, and 13 are available by calling Allen C. Harris, Director, Department for the Blind, (515)281–1336 or (800)362–2587. Persons who plan to attend the hearing and need interpreter services or other accommodations should call Becky Cox by May 17, 2002, at the numbers above. At the hearing, persons will be asked to confine their remarks to the subject of the amendments.

Also, any interested person may make written suggestions or comments on the proposed amendments through May 21, 2002. Such written suggestions or comments should be directed to the Commission for the Blind, 524 Fourth Street, Des Moines, Iowa 50309–2364; fax (515)281–1263.

These amendments are intended to implement Iowa Code chapters 216B and 216D.

The following amendments are proposed.

ITEM 1. Amend rule 111—7.1(216D) as follows:

111—7.1(216D) History and function. The Randolph–Sheppard Act (Public Law 74–732), first adopted by Congress in 1936, created a business enterprises program to give priority to the needs of blind persons in securing employment and economic opportunities. This legislation was revised in 1954 (Public Law 83–565) and again in 1974 (Public Law 93–516).

The Iowa business enterprises program prepares individuals in the vocational rehabilitation program clients to become independent operators of food service facilities by providing training in management skills, food service and sanitation laws, and business systems. The business enterprises program establishes facilities and renders ongoing consultation and management assistance to blind operators.

ITEM 2. Amend rule 111—7.2(216D) as follows:

Adopt the following new definition in alphabetical order:

“Active participation” means routine consultation with the committee of blind vendors on all matters affecting the business enterprises program. When Congress amended the Randolph–Sheppard Act in 1974 to include a requirement for a committee of blind vendors elected by the vendors themselves in every business enterprises program, congressional intent was to create a routine, ongoing method for the citizens involved in the vending program to participate in the decisions that affected their lives, given a long history of agency decision making that had excluded vendors. While Congress recognized that officials of state agencies are charged with the responsibility of making decisions, Congress wished to create a situation in which these officials routinely consult the persons whom these decisions affect. Thus, “active participation” consists of the manager of the business enterprises program and also the director of the entire agency making a conscious effort to include the committee routinely in policy decisions, in changes of policy, in decisions that will expand or contract the program, in allocation of funding, and in any other matter that will affect individual vendors or the program vendors or the program as a whole.

Amend the following definitions:

“Committee” means the state committee of blind vendors which actively participates in routine, ongoing policy making for the business enterprises program.

“Federal property” means any building, land or other real property in this state which is owned, leased or occupied by any department, agency or instrumentality of the United States (including, but not limited to, the Department of Defense, the Department of Veterans Affairs and the United States Postal Service).

ITEM 3. Amend rule 111—7.3(216D) as follows:

111—7.3(216D) State committee of blind vendors. There is established a state committee of blind vendors which will advise and actively participate in routine, ongoing policy decisions made by the department in the management of the business enterprises program. The committee will hold a minimum of three meetings in each calendar year with the agenda for each meeting jointly prepared by the division administrator of the business enterprises program in consultation with the chairperson of the committee.

7.3(1) The committee shall:

a. Actively participate with the department in major administrative decisions and policy and program development decisions affecting the overall administration of the business enterprises program including, but not limited to, changes in longstanding policy, decisions to add or remove locations, decisions regarding terms of permits varying from the standard permits, and all other decisions or changes in decisions that will affect the earning potential or promotional opportunities for vendors in the program or those who join the program;

b. Receive and transmit to the department grievances at the request of vendors and serve as an advocate for vendors in connection with these grievances;

c. Actively participate with the department in the development and administration of a state system for the transfer or promotion of vendors;

d. Actively participate with the department in the development of training and retraining programs for vendors; and

e. Sponsor, with the assistance of the department, meetings and instructional conferences for vendors and trainees of the business enterprises program.

7.3(2) to 7.3(4) No change.

ITEM 4. Amend rule 111—7.4(216D) as follows:

111—7.4(216D) Statewide meeting. There will be an annual statewide meeting of vendors at a time and place established by the department and the committee. All licensees, trainees and all other interested parties may shall attend this meeting; however, only active licensees shall have the right to vote. Failure to attend two consecutive entire meetings without a written excused absence from the administrator of the business enterprises program shall result in placement of active licensees on probation. Failure to attend three consecutive entire meetings without a written excused absence from the administrator of the business enterprises program shall result in termination of the operating agreement (defined in 111—7.12(216D)).

ITEM 5. Amend subrule 7.5(2) as follows:

7.5(2) The election shall be held by secret ballot. The secret ballot may be waived by unanimous consent of the voting members. Committee members shall take office immediately following the meeting at which they were elected.

ITEM 6. Amend subrule 7.6(1) as follows:

7.6(1) The vocational rehabilitation counselor has the primary responsibility for identifying potential candidates applicants for the business enterprises program. In order for a client an eligible individual to be considered for placement in the business enterprises program, the counselor must make a written recommendation to the division administrator of the business enterprises program.

ITEM 7. Amend subrule 7.9(2) as follows:

7.9(2) The individual must meet the following criteria for licensure by reciprocity or reinstatement:

a. Apply and be found eligible for vocational rehabilitation services from the department;

b. Have no outstanding debts with the business enterprises program or vocational rehabilitation program in any state and no delinquent business taxes or delinquent bills to food service suppliers;

c. Comply with all licensing requirements of the department.

ITEM 8. Amend subrule 7.10(1) as follows:

7.10(1) When a new vending facility is established or when a vacancy occurs in an existing facility, the department shall first provide the opportunity for transfer or promotion to licensees having priority status. At that time, the department shall give priority status to a vendor who has been displaced from a facility through no fault of the vendor. Priority status may be given if the potential or actual earnings and requirements for operating the available facility are reasonably comparable to the facility from which the vendor was displaced. A vendor shall be considered to have been displaced through no fault of the vendor if the building in which the vendor’s facility is located has:

ITEM 9. Amend subrule 7.11(1) as follows:

7.11(1) Placement in provisional status. When a vendor is appointed for the first time, the vendor will be placed in provisional status. The vendor will be provided with the rating criteria for performance evaluation as a part of the operating agreement (defined in 111—7.12(216D)). A vendor cannot remain in provisional status for longer than two years.

ITEM 10. Amend rule 111—7.13(216D) as follows:

111—7.13(216D) Reports. As specified in the operating agreement, reports must be filed with the administrative office of the department or postmarked by the fifteenth day of each month. The department will accept no more than two consecutive reports which are submitted after the deadline. When an operator exceeds this limit, the department shall impose a fine in the amount of $25 $100 for each report filed after the deadline. Operators submitting more than two late reports shall be placed on probation and restricted from bidding for transfer or promotion for a period of one year. For a report to be considered complete, it must contain the following documents which relate to the reporting period:

ITEM 11. Amend subrule 7.15(1) as follows:

7.15(1) During the first 45 calendar days of the vendor’s assignment to a location or facility, the department assumes the responsibility for maintenance of equipment. Additionally, in unusual circumstances, the department may negotiate with a vendor to pay particular costs for maintenance of equipment.

ITEM 12. Amend rule 111—7.17(216D) as follows:

Amend the introductory paragraph as follows:

111—7.17(216D) Disciplinary action. Following the opportunity for a contested case hearing except in the case of an emergency, and in consultation with the state committee of blind vendors, the department may impose any or all of the following disciplinary actions as appropriate:

Amend subrule 7.17(2), introductory paragraph, as follows:

7.17(2) Probation. The department may place a vendor on probation of the operating agreement for a period not to exceed one year. The probationary period may include an emergency suspension of the operating agreement when appropriate for a period not to exceed 30 days. If the operator is deemed to be on probation after the end of that year, the operating agreement will be terminated.

Amend subrule 7.17(3) as follows:

7.17(3) Termination of operating agreement. When the department determines that a probationary period has been unsuccessful or when the department determines and documents that serious and repeated infractions of the operating agreement or vending facility permit have occurred, the department may terminate an operating agreement.

Amend subrule 7.17(4) as follows:

7.17(4) License revocation. The department may revoke a license in the following conditions:

a. Improvement of vision so that the operator is no longer eligible for participation in the business enterprises program;

b. Written notification from the vendor requesting withdrawal from the business enterprises program;

c. Failure to execute an operating agreement by abandoning a facility;

d. Determination that the vendor is not competent to manage a vending facility; or

e. Conviction of any theft or other felony involving the vending facility or the department.

Pursuant to the authority of Iowa Code section 216B.6, the Commission for the Blind hereby gives Notice of Intended Action to amend Chapter 10, “Vocational Rehabilitation Services,” Iowa Administrative Code.

The proposed amendments provide for changes in vocational rehabilitation services.

Persons are invited to present oral or written comments at a public hearing which will be held Tuesday, May 21, 2002, at 11 a.m. at the Department for the Blind, 524 Fourth Street, Des Moines, Iowa. Proposed amendments to Chapters 1, 6, 7, 10, 11, and 13 are available by calling Allen C. Harris, Director, Department for the Blind, (515)281–1336 or (800) 362–2587. Persons who plan to attend the hearing and need interpreter services or other accommodations should call Becky Cox by May 17, 2002, at the numbers above. At the hearing, persons will be asked to confine their remarks to the subject of the amendments.

Also, any interested person may make written suggestions or comments on the proposed amendments through May 21, 2002. Such written suggestions or comments should be directed to the Commission for the Blind, 524 Fourth Street, Des Moines, Iowa 50309–2364; fax (515)281–1263.

These amendments are intended to implement Iowa Code chapter 216B.

The following amendments are proposed.

ITEM 1. Amend rule 111—10.1(216B) as follows:

111—10.1(216B) Function. Vocational rehabilitation services assist consumers eligible individuals to achieve an employment outcome consistent with their individual strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice.

ITEM 2. Amend rule 111—10.3(216B) as follows:

111—10.3(216B) Application procedures. Persons desiring vocational rehabilitation services should contact the department and must complete the application process. An individual is considered to have submitted an application when the individual or the individual’s representative, as appropriate, (1) has completed and signed an agency application form; (2) has provided information necessary to initiate an assessment to determine eligibility and priority of services; and (3) is available to complete the assessment process. Persons desiring vocational rehabilitation services should contact the department office and must complete the application process.

ITEM 3. Amend rule 111—10.4(216B) as follows:

10.4(1) Eligibility for vocational rehabilitation shall be determined upon the presence of four basic conditions: (1) the existence of blindness as defined in rule 111— 1.4(216B); (2) the existence of blindness constitutes or results in a substantial impediment to employment; (3) the ability to benefit in terms of employment outcomes from the provision of vocational rehabilitation services the individual intends to achieve an employment outcome consistent with the individual’s unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice; and (4) the applicant requires vocational rehabilitation services to prepare for, secure, enter into, engage in, or retain, or regain gainful employment consistent with strengths, resources, priorities, concerns, abilities, capabilities, and informed choice.

No duration of residence requirement is imposed thatexcludes from services any applicant who is present in the state. No applicant or group of applicants is excluded or found ineligible solely on the basis of the type of disability. The eligibility requirements are applied without regard to the age, gender, race, color, creed, or national origin of the applicant.; type of expected employment outcome; source of referral; or The eligibility requirements are applied without regard to the particular service needs or anticipated cost of services required by an applicant or the income level of an applicant or applicant’s family.

10.4(2) No change.

ITEM 4. Amend rule 111—10.5(216B) as follows:

10.5(1) Vocational rehabilitation services are any services described in an individualized plan for employment necessary to assist an individual in preparing for, securing, retaining, or regaining an employment outcome that is consistent with the strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice of the individual.

Services may include the following: assessment for determining eligibility and priority for services; assessment for determining vocational rehabilitation needs; vocational rehabilitation counseling and guidance; referral and other services necessary to secure needed services from other agencies and to advise individuals about the client assistance program; physical and mental restoration; vocational and other training services, including personal and vocational adjustment training; maintenance; transportation; vocational rehabilitation services to family members; interpreter services for individuals who are deaf–blind,; reader services,; rehabilitation teaching services,; orientation and mobility services,; job–related services, including recruitment and training services to provide new employment opportunities in fields of appropriate public service; job search, and placement assistance, and job retention services, follow–up services and follow–along services; supported employment services; personal assistance services; postemployment services; occupational licenses, tools, equipment, initial stocks and supplies; rehabilitation technology; transition services; technical assistance and other consultation services to eligible individuals who are pursuing self–employment or telecommuting or establishing a small business operation as an employment outcome; acquisition of equipment; purchase and distribution of education, professional, and other materials to be used by groups of individuals with disabilities; purchase and maintenance of equipment in connection with these materials; special tools, aids and devices to assist consumers in achieving self–sufficiency; and provision of other goods and services considered beneficial to vocational rehabilitation determined necessary to achieve an employment outcome.

10.5(3) Joint planning between an eligible individual and staff will be employed in the development of the individual written rehabilitation plan for employment in order to determine which specific services may be needed and to ensure that the individual has the opportunity to make an informed choice regarding vocational rehabilitation employment goals and objectives. The following factors may be taken into account in arriving at a decision as to what services will be provided: the individual’s strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice.

ITEM 5. Amend rule 111—10.6(216B) as follows:

10.6(1) Prior to providing any vocational rehabilitation services, except those services listed in subrule 10.6(3), to an eligible individual or to members of the individual’s family, the department must determine whether comparable services and benefits exist under any other program and if those services and benefits are available to the individual. Full consideration is given to any comparable service or benefit available to an eligible blind person under any program, except for grants or awards from organizations of the blind, prior to the provision of services to the individual or members of the individual’s family, except for those services listed in subrule 10.6(3).

10.6(2) To the extent that an individual is eligible for comparable services or benefits, they are utilized insofar as they are adequate and do not interfere with achieving the rehabil–itation objective of the individual interrupt or delay: (1) the progress of the individual toward achieving the employment outcome identified in the individualized plan for employment or an immediate job placement; or (2) the provision of vocational rehabilitation services to any individual who is determined to be at extreme medical risk.

10.6(3) The following services are exempt from a consideration of comparable services and benefits under subrule 10.6(1) above: (1) assessment for determining eligibility; assessment for determining and vocational rehabilitation needs; (2) vocational rehabilitation counseling, and guidance, and; (3) referral services to other agencies; (4) job–related services, including job search and placement assistance, job retention services, follow–up services, and follow–along services; vocational and other training services, including personal and vocational adjustment training, books, tools, and other training materials, except that no training or training services in an institution of higher education (universities, colleges, community or junior colleges, vocational schools, technical institutes, or hospital schools of nursing) may be paid with vocational rehabilitation funds unless maximum efforts have been made to secure grant assistance in whole or in part from other sources to pay for the training or training services (5) rehabilitation technology services; and (6) postemployment services.

10.6(4) No change.

10.6(5) In the event that severe revenue shortages make budget reductions necessary, the department may invoke a limitation on payment of tuition each semester to a rate no greater than the maximum tuition rate effective at institutions operated by the Iowa board of regents for each semester of the consumer’s individual’s enrollment. When it is necessary to invoke this limitation with general notice to the public and to consumers individuals potentially affected, exceptions may be made in cases in which a reasonable necessity for a waiver can be demonstrated, the consumer’s individual’s counselor recommends a waiver, and the program administrator approves the waiver before the consumer’s individual’s enrollment. In no case, however, shall this rule be construed as discouragement of a consumer’s an individual’s attending private or out–of–state institutions when utilization of other available funds makes it possible to do so.

ITEM 6. Amend rule 111—10.8(216B), introductory paragraph, as follows:

111—10.8(216B) Dispute resolution process. This rule defines the procedures under which the dispute resolution proc–ess, required by the federal Vocational Rehabilitation Act of 1973 as amended through 1998, shall be conducted by the department.

ITEM 7. Amend subrule 10.8(4), paragraph “b,” as follows:

b. The impartial hearing officer shall be an individual who is not an employee of a public agency other than an administrative law judge, hearing examiner, or employee of an institution of higher education. (An individual is not an employee of a public agency solely because the individual is paid by that agency to serve as a hearing officer.) The impartial hearing officer: (1) is not a member of the commission for the blind; (2) has not been involved in previous decisions regarding the vocational rehabilitation of the applicant or eligible individual; (3) has knowledge of the delivery of vocational rehabilitation services, the state plan, and the federal regulations and state regulations rules governing the provision of services; (4) has received training with respect to the performance of official duties; and (5) has no personal, professional, or financial interest that would be in conflict with the hearing officer’s objectivity. The director may also request that other designated department personnel be present at the formal hearing. At the request of the applicant or eligible individual, a representative of the applicant or eligible individual and a representative of the Iowa client assistance program may also be present. Any of these persons shall have the opportunity to present relevant evidence.

ITEM 8. Amend subrule 10.8(4), paragraphs “e” and “f,” as follows:

e. Within 30 days of the completion of the formal hearing, the decision of the impartial hearing officer shall be mailed to the applicant or eligible individual or, if appropriate, the applicant’s or eligible individual’s representative, and the director. A representative of the Iowa client assistance program who has attended the formal hearing shall also receive a copy of the decision. The applicant or eligible individual may receive a copy of the tape–recorded transcript of the hearing upon written request to the director.

The decision of the impartial hearing officer shall be based upon the provisions of the approved state plan, the federal Rehabilitation Act of 1973, as amended through 1998, federal vocational rehabilitation regulations, and state regulations rules and policies.

f. The decision of the impartial hearing officer is final.

ITEM 9. Amend subrule 10.8(5) as follows:

10.8(5) Documents provided. Transcripts, notices, responses, and other documents which are an integral part of the dispute resolution process shall be provided to involved parties in standard print format. An applicant or eligible individual, or representative of an applicant or eligible individual, or other involved party may request provision of documents in the alternative medium of braille, cassette tape, or large–type format. Documents in the alternative medium shall be provided in a timely manner.

ITEM 10. Amend rule 111—10.9(216B) as follows:

111—10.9(216B) Applicant Applicant’s and consumer eligible individual’s rights. The counselor/teacher must inform the applicant or consumer eligible individual of the applicant’s or consumer’s eligible individual’s rights as follows:

10.9(1) and 10.9(2) No change.

10.9(3) The individual written rehabilitation plan for employment will include a statement that the consumer individual has been informed of the department’s policies regarding administrative review, fair hearing, confidentiality of rec–ords and nondiscrimination.

10.9(4) Upon termination of services through the standard case closure procedure, the consumer individual shall be given a written statement of the right to appeal the termination, including information about services available through the Iowa client assistance program.

10.9(5) When disagreement occurs, staff shall verbally inform the applicant or consumer individual of the right to appeal and provide information about services available through the Iowa client assistance program.

ITEM 11. Amend rule 111—10.10(17A) as follows:

1. Application for rehabilitation services—used for application for vocational rehabilitation services from the department. Also contains statement of compliance with the Civil Rights Act of 1964 and release of information form.

2. Individual Written Rehabilitation Plan (IWRP) plan for employment (IPE)—used by the counselor/teacher and consumer individual to develop a blind person’s program for rehabilitation. Printed on the form are the following statements: mutual agreement and understanding between consumer individual and counselor; department’s program responsibilities; consumer individual responsibilities; review and evaluation of progress toward objectives and goal; and consumer individual rights and remedies. In addition, the IWRP IPE provides for mutual development of a vocational goal, intermediate objectives, summary of planned services, accepted criteria for review and evaluation purposes and consumer individual acceptance and response.

ITEM 12. Amend 111—Chapter 10, implementation clause, as follows:

These rules are intended to implement Iowa Code section 17A.3 and chapter 216B.

Pursuant to the authority of Iowa Code section 216B.6, the Commission for the Blind hereby gives Notice of Intended Action to amend Chapter 11, “Independent Living Rehabilitation Services,” Iowa Administrative Code.

The proposed amendments provide for changes in the independent living rehabilitation services program.

Persons are invited to present oral or written comments at a public hearing which will be held Tuesday, May 21, 2002, at 11 a.m. at the Department for the Blind, 524 Fourth Street, Des Moines, Iowa. Proposed amendments to Chapters 1, 6, 7, 10, 11, and 13 are available by calling Allen C. Harris, Director, Department for the Blind, (515)281–1336 or (800) 362–2587. Persons who plan to attend the hearing and need interpreter services or other accommodations should call Becky Cox by May 17, 2002, at the numbers above. At the hearing, persons will be asked to confine their remarks to the subject of the amendments.

Also, any interested person may make written suggestions or comments on the proposed amendments through May 21, 2002. Such written suggestions or comments should be directed to the Commission for the Blind, 524 Fourth Street, Des Moines, Iowa 50309–2364; fax (515)281–1263.

These amendments are intended to implement Iowa Code chapter 216B.

The following amendments are proposed.

ITEM 1. Amend rules 111—11.2(216B) to 111— 11.5(216B) as follows:

111—11.2(216B) Services. In addition to appropriate vocational rehabilitation services enumerated in rule 111—10.2 10.5(216B), independent living rehabilitation services may include, but are not limited to: teaching alternative techniques of blindness; guidance and counseling; orientation and mobility training; referral; recreational activities; provision and instruction in the use of telecommunication, sensory and other technological aids and devices; and provision of technical assistance through consultation with health care providers and other agencies and organizations who serve blind persons.

Joint planning between the client eligible individual and the staff will be employed in the development of the individualized written rehabilitation plan for independent living an independent living rehabilitation plan (ILRP) in order to identify independent living objectives and determine which specific services that will be most beneficial in achieving a client’s an eligible individual’s independence. Determination of services to be provided will be based on available resources, the constraints of the client’s desires and abilities and the professional judgement of the staff. Eligible individuals will be given the option of waiving the right to a formal, detailed ILRP and may choose to simply list their independent living objectives.

111—11.3(216B) State plan. The state plan for independent living (SPIL) rehabilitation services for the blind of Iowa is developed pursuant to federal regulations every three years and is submitted to the United States Department of Education, rehabilitation services administration. The plan SPIL delineates expenditure of funds, describes administrative procedures, establishes program goals, and identifies the scope and extent of services and guidelines for expenditure of funds. It is developed, implemented, and evaluated jointly by the Iowa department for the blind, the department of education, division of vocational rehabilitation services, and the Iowa statewide independent living council. The SPIL must be reviewed and revised as necessary but not less than once every three years.

111—11.4(216B) Independent living council of Iowa. Application for independent living services for older individuals who are blind. The independent living council of Iowa provides guidance for the development and expansion of independent living programs and policies. The application delineates expenditure of funds, establishes program goals, identifies the scope and extent of services, and defines a plan of operation. The application is submitted to the U.S. Department of Education, rehabilitation services administration.

111—11.5(216B) Eligibility. Determination of eligibility for independent living rehabilitation services shall be based upon: (1) the existence of blindness as defined in 111— 1.4(216B) according to the examination of a licensed eye practitioner; (2) presence of a severe limitation in ability to function independently in family or community or to engage or continue in employment; and (3) a reasonable expectation that independent living rehabilitation services will significantly improve the individual’s ability to function independently in family or community or to engage or continue in employment. To be eligible for independent living rehabilitation services, an individual must meet the following criteria: (1) have a severe visual impairment; (2) either be aged 55 or older, or have a severe mental, cognitive, physical, or other sensory impairment; (3) experience a severe limitation in ability to function independently in the family or community, or to obtain, maintain, or advance in employment; and (4) there must be a reasonable expectation that independent living rehabilitation services will improve the individual’s ability to function, continue functioning, or move toward functioning independently in family or community, or to continue in employment.

Eligibility will be determined in compliance with applicable federal and state laws prohibiting discrimination on the basis of age, race, creed, color, sex, national origin, religion or disability. Provision of independent living rehabilitation services is not contingent upon economic need. No duration of residence requirement is imposed that excludes from services any applicant who is present in the state.

ITEM 2. Amend rules 111—11.7(216B) to 111— 11.11(216B) as follows:

11.7(1) Full consideration is given to any comparable services and benefits available to a blind person under any program (for example, workers’ compensation, supplemental security income, social security disability insurance) to meet in whole or in part the cost of independent living rehabilitation services provided to an individual except evaluation of independent living rehabilitation potential; counseling, guidance, and referral; vocational and other training services, including personal and vocational adjustment training, books, tools and other training materials which are not provided in institutions of higher learning; services to members of the individual’s family; rehabilitation engineering services, placement and postemployment services assessment for determining eligibility and independent living rehabilitation needs; counseling and guidance; information and referral; and personal and vocational adjustment training and related training supplies.

11.7(2) Full consideration of comparable services and benefits shall not be given when this consideration would delay the provision of services to an individual at extreme medical risk, as defined in 111—1.4(216B). A determination of extreme medical risk shall be based upon medical evidence provided by an appropriately licensed medical professional.

11.8(1) A decision to terminate independent living reha–bilitation services shall be made only with the full participation of the client, eligible individual or, as appropriate, the client’s eligible individual’s parent, guardian or other representative, unless the client eligible individual has refused to participate, the client eligible individual is no longer present in the state, or the client’s eligible individual’s whereabouts are unknown. The views of the client or the client’s representative concerning the decision shall be recorded in the individualized written rehabilitation plan.

11.8(2) A client An eligible individual who is dissatisfied with a decision the determination to terminate services may appeal the determination as provided in rule 111— 11.9(216B).

111—11.9(216B) Administrative review and formal hearing. Dispute resolution process. Administrative review is a procedure by which the agency may provide an opportunity for an applicant or client to express and seek remedy for dissatisfaction with a decision regarding provision or denial of services. Formal hearing is a procedure whereby an applicant or client who is dissatisfied with the findings of an administrative review or any determinations made concerning the furnishing or denial of services may seek redetermination of the action or request a timely review of those determinations before an impartial hearing officer. This rule defines the procedures under which the dispute resolution process shall be conducted by the department.

While the department encourages the use of the administrative review process to resolve grievances, the administrative review process is not to be used as a means to delay mediation or a formal hearing before an impartial hearing officer unless the parties jointly agree to a delay. An applicant or client eligible individual may elect to proceed directly either to mediation or to the formal hearing process. The department will not suspend, reduce, or terminate independent living rehabilitation services to any applicant or eligible individual throughout the administrative review, mediation or formal hearing process before a final agreement or decision is made, unless the applicant or eligible individual or, as appropriate, the applicant’s or eligible individual’s representative so requests, or the department has evidence that the services have been obtained through misrepresentation, fraud, collusion, or criminal conduct on the part of the applicant or eligible individual.

11.9(1 2) Administrative review. An applicant for, or client eligible individual of, independent living rehabilitation services may request review of a decision regarding provision or denial of services with which they are the applicant or eligible individual is dissatisfied by submitting a letter to the division program administrator for independent living rehabilitation services of field operations.

a. The division program administrator shall acknowledge receipt of the letter and arrangements shall be made for the administrative review to be held at a mutually convenient date, time and place which shall be within 15 ten days after receipt of the request for review. The applicant or eligible individual shall also be notified of the applicant’s or eligible individual’s right to obtain assistance through the Iowa client assistance program.

b. The administrative review shall consist of: review of the case file and any other documentation involved in the subject matter of the review; interviews with the counselor/teacher service specialist for the blind and any others directly involved with the subject matter of the review; and an interview with the client or applicant, or the parent, guardian or representative of the client or applicant the applicant or eligible individual or, as appropriate, a representative of the applicant or eligible individual.

c. The division program administrator shall issue a written decision within seven five days of the review. The decision shall set forth the issue, principle, and relevant facts established during the review; pertinent provisions of law, administrative rule or agency department policy; and the reasoning upon which the decision is based. The letter transmitting the decision shall advise the applicant or client eligible individual that the applicant or client eligible individual shall inform the division program administrator within seven days that either: (1) the applicant or client eligible individual accepts the decision; or (2) the applicant or client eligible individual does not accept the decision and wishes to proceed either to mediation or to a formal hearing.

d. A record of the decision and any action resulting from the decision shall be mailed sent to the applicant or client eligible individual by certified mail. The decision and a record of any action resulting from the decision shall be entered into the case file.

11.9(2 4) Formal hearing. An applicant for, or client eligible individual of, independent living rehabilitation services, who is dissatisfied with the findings of an administrative review, or who is dissatisfied with any determinations made concerning the furnishing or denial of independent living rehabilitation services or the findings of an and has elected to bypass the administrative review or mediation if an administrative review or mediation took place process may request a formal hearing by submitting a letter to the division administrator director.

a. The director shall acknowledge receipt of the request and make arrangements for a formal hearing to be held within 45 days of the request of the applicant or client eligible individual to initiate the administrative review and formal hearing dispute resolution process at a date, time and place mutually agreeable to both parties. The applicant or client eligible individual shall also be notified of the right to have a representative present at the formal hearing and to seek assistance through the Iowa client assistance program. Reasonable time extensions shall be granted for good cause shown at the request of a party or at the request of both parties.

b. The director shall appoint an impartial hearing officer who, insofar as possible, has not taken part in the action under consideration. As specified in section 361 of the federal regulations, the impartial hearing officer shall be an individual who: (1) is not an employee of the department or of any public agency involved in decisions regarding the furnishing or denial of rehabilitation services to a vocational rehabilitation applicant or client. An individual is not an employee of a public agency solely because the individual is paid by that agency to serve as a hearing officer; (2) has not been involved in previous decisions regarding the vocational rehabilitation applicant or client; (3) has background and experience in, and knowledge of, the delivery of vocational rehabilitation services; and (4) has no personal or financial interest that would be in conflict with the individual’s objectivity. The director may also request that the counselor/teacher or the division administrator be present at the formal hearing impartial hearing officer shall be an individual who is not an employee of a public agency other than an administrative law judge, hearing examiner, or employee of an institution of higher education. (An individual is not an employee of a public agency solely because the individual is paid by that agency to serve as a hearing officer.) The impartial hearing officer (1) is not a member of the commission for the blind; (2) has not been involved in previous decisions regarding the independent living rehabilitation services of the applicant or eligible individual; (3) has knowledge of the delivery of independent living rehabilitation services, the state plan, and the federal regulations and state rules governing the provision of services; (4) has received training with respect to the performance of official duties; and (5) has no personal, professional, or financial interest that would be in conflict with the hearing officer’s objectivity. The director may also request that other designated department personnel be present at the formal hearing. At the request of the applicant or client eligible individual, a representative of the applicant or client eligible individual and a representative of the Iowa client assistance program may also be present. Any of these persons shall have the opportunity to present relevant evidence.

c d. The impartial hearing officer shall inform those present of the confidentiality of matters discussed. The proceedings shall be recorded and transcribed.

d e. Within 30 days of the completion of the formal hearing, the decision of the impartial hearing officer shall be mailed to the applicant or client eligible individual or, if appropriate, the individual’s parent, guardian, or other applicant’s or eligible individual’s representative, and the director, division administrator and counselor/teacher. A representative of the Iowa client assistance program who has attended a the formal hearing shall also receive a copy of the decision. The decision shall be sent to the applicant or client or, if appropriate, the individual’s parent, guardian, or other representative by certified mail. The applicant or client eligible individual may receive a copy of the tape–recorded transcript of the hearing upon written request to the director.

The decision of the impartial hearing officer shall be based upon the provisions of the approved state plan for independent living, and the federal Rehabilitation Act, as amended, and state rules and policies.

e f. The director may concur with the decision of the impartial hearing officer or may decide to further review the decision. If the director concurs with the decision of the impartial hearing officer, the director shall issue a written statement concurring with the decision of the impartial hearing officer within 20 days of the certified mailing date of the impartial hearing officer’s decision. The statement shall include the date of issuance; the name of the applicant or client; reference to relevant statutes, rules, policies or previous decisions; the particular facts upon which the decision of the impartial hearing officer was based; and the reasons for the decision. A copy of the statement of concurrence shall be sent by certified mail to the applicant or client. The decision of the impartial hearing officer shall be effective on the date of issuance of the statement of concurrence by the director is final.

11.9(3 5) Documents provided. Transcripts, notices, responses and other documents which are an integral part of the administrative review and formal hearing dispute resolution process shall be provided to involved parties in standard print format. An applicant or client eligible individual, or representative of an applicant or client eligible individual, or other involved party, may request provision of documents in the alternative medium of braille, cassette tape or large–type format media. Documents in the alternative medium media shall be provided in a timely manner.

111—11.10(216B) Applicant and client Applicant’s and eligible individual’s rights. The counselor/teacher service specialist for the blind must inform the applicant or client eligible individual of the applicant applicant’s or client’s eligible individual’s rights as follows:

11.10(1) A written statement of rights, which sets forth Written information on the Iowa client assistance program and on the department’s policies and practices with regard to administrative review, fair hearing, confidentiality of records and nondiscrimination shall be provided to the applicant as part of the application process. This information shall also be made available in the applicant’s media of choice. Language interpreters will be used as necessary.

11.10(2) When an applicant is determined ineligible to receive independent living rehabilitation services, the applicant shall receive written notification of the right to appeal and information concerning services available through the Iowa client assistance program.

11.10(3) The individualized written independent living rehabilitation plan will include a statement that information in the client has been informed of eligible individual’s media of choice on the department’s policies regarding administrative review, fair hearing, confidentiality of records and nondiscrimination. Language interpreters will be used as necessary.

11.10(4) Upon termination of services through the standard case closure procedure a case due to ineligibility, the client individual shall be given a written statement of information in the eligible individual’s media of choice on the right to appeal the termination, including information about services available through the Iowa client assistance program. Language interpreters will be used as necessary.

11.10(5) When disagreement occurs, staff shall verbally inform the applicant or client individual of the right to appeal and provide information about services available through the Iowa client assistance program.

111—11.11(216B) Forms. The following forms are used by the independent living rehabilitation services program:

1. Application for Independent Living Rehabilitation Services—used for application for independent living rehabilitation services from the department.

2. Individualized Written Independent Living Rehabil–itation Plan (IWRP ILRP)—used to develop a blind person’s program for rehabilitation by providing for mutual development of goals, objectives, a summary of planned services, criteria for review and evaluation and a time frame for completion of services.

Pursuant to the authority of Iowa Code section and 216B.6, the Commission for the Blind hereby gives Notice of Intended Action to amend Chapter 13, “Public Records and Fair Information Practices,” Iowa Administrative Code.

The proposed amendments update the requirements for public records, confidentiality, and fair information practices in Iowa Code chapters 17A and 22.

Persons are invited to present oral or written comments at a public hearing which will be held Tuesday, May 21, 2002, at 11 a.m. at the Department for the Blind, 524 Fourth Street, Des Moines, Iowa. Proposed amendments to Chapters 1, 6, 7, 10, 11, and 13 are available by calling Allen C. Harris, Director, Department for the Blind, (515)281–1336 or (800) 362–2587. Persons who plan to attend the hearing and need interpreter services or other accommodations should call Becky Cox by May 17, 2002, at the numbers above. At the hearing, persons will be asked to confine their remarks to the subject of the amendments.

Also, any interested person may make written suggestions or comments on the proposed amendments through May 21, 2002. Such written suggestions or comments should be directed to the Commission for the Blind, 524 Fourth Street, Des Moines, Iowa 50309–2364; fax (515)281–1263.

These amendments are intended to implement Iowa Code chapters 17A, 22, and 216B.

The following amendments are proposed.

ITEM 1. Amend rule 111—13.1(17A,22), definition of “case record,” as follows:

“Case record ” means the file of personally identifiable or confidential information on a client, collected pursuant to the provisions of the Rehabilitation Act of 1973, as amended.

ITEM 2. Amend subrules 13.3(2) and 13.3(3) as follows:

13.3(2) Office hours. Open records shall be made available during all customary office hours, which are between8 a.m. and 4:30 5 p.m. daily, excluding Saturdays, Sundays and legal holidays.

13.3(3) Request for access. Requests for access to open records may be made in writing, in person, by electronic mail, or by telephone. Requests shall identify the particular records sought by name or description in order to facilitate the location of the record. Mail or telephone requests shall include the name, address, and phone number of the person requesting the information. A person shall not be required to give a reason for requesting an open record.

ITEM 3. Amend subrule 13.13(2) as follows:

Amend agency program area “Independent Living Rehabilitation Services” by adopting the following new entries in alphabetical order:

Records Statutory Authority

Client master list Iowa Code section 259.1

Client satisfaction survey Iowa Code section 259.1

Amend agency program area “Vocational Rehabilitation Services” by adopting the following new entries in alphabetical order:

Records Statutory Authority

Client master list Iowa Code section 259.1

Client satisfaction survey Iowa Code section 259.1

ITEM 4. Amend subrule 13.13(4) as follows:

Amend agency program area “Independent Living Rehabilitation Services” by adopting the following new entries in alphabetical order:

RSA 704 report

RSA 7OB report

Amend agency program area “Library for the Blind and Physically Handicapped” by amending the following entry:

Iowa Lions sight and hearing foundation

Amend agency program area “Vocational Rehabilitation” by amending the following entry:

Rehabilitation Act of 1973, as amended 1986

Amend agency program area “Business Enterprise Program” by amending the following entry:

Records Statutory Authority

Vending facilities Iowa Code section 259.1
(33 all locations)

Pursuant to Iowa Administrative Code 361—subrule 12.2(1), the Executive Council gives Notice that the Civil Reparations Trust Fund balance as of March 28, 2002, is approximately $222,000.00. Money in the Civil Reparations Trust Fund is available for use for indigent civil litigation programs or insurance assistance programs. Application forms are available in the office of the State Treasurer by contacting GeorgAnna Madsen, Executive Secretary, State Capitol Room 114, Des Moines, Iowa 50319; telephone (515)281–5368. Applications must be filed on the thirtieth day after the date of publication of this Notice in the Iowa Administrative Bulletin, or on the thirtieth day after the date affixed to the Notice sent by first–class mail, whichever is later. Any person/company that would like to receive future notices should make request in writing to the above–mentioned contact. Rules regarding the Civil Reparations Trust Fund can be found at 361 IAC Chapter 12.

Pursuant to the authority of Iowa Code section 904.512, the Department of Corrections hereby gives Notice of Intended Action to amend Chapter 20, “Institutions Administration,” and to rescind Chapter 21, “Iowa State Penitentiary,” Chapter 22, “Iowa State Men’s Reformatory,” Chapter 23, “Iowa Correctional Institution for Women,” Chapter 24, “Medium Security Facility,” Chapter 25, “Correctional Treatment Unit,” Chapter 26, “North Central Correctional Facility,” Chapter 27, “Iowa Medical and Classification Center,” Chapter 28, “Newton Correctional Facility,” and Chapter 29, “Fort Dodge Correctional Facility,” Iowa Administrative Code.

These rules provide for the visitation schedule at each Department of Corrections institution. 2002 Iowa Acts, Senate File 2304, was recently passed by the Iowa General Assembly, signed into law by Governor Thomas J. Vilsack on March 1, 2002, and became effective immediately. 2002 Iowa Acts, Senate File 2304, requires the Department to achieve mandatory furlough savings of $1.7 million by June 30, 2002. Other budgetary reductions, staff vacancies, early retirements, layoffs and staff turnover have directly impacted the Department’s ability to provide the privilege of visitation for offenders.

Governor Thomas J. Vilsack issued Executive Order Number 8, which requires state agencies to successfully identify and eliminate outdated, redundant, ineffective, or otherwise unnecessary rules to reduce inconvenience and confusion and increase public confidence in state government. To achieve this goal, the Department proposes to rescind Chapters 21 to 29, each of which governs institutional visitation, and to incorporate new language in Chapter 20 to govern all institutional visitation.

These amendments do not provide for waivers in specified situations because of the underlying budget constraints. Needed savings would not be achieved if waivers were provided.

The substance of these amendments was also Adopted and Filed Emergency and is published herein as ARC 1592B. The purpose of this Notice is to solicit comment on that submission, the subject matter of which is incorporated by reference.

Any interested person may make written suggestions or comments on the proposed amendments on or before May 21, 2002. Such written material should be sent to the Director of Policy and Legal Services, Corrections Department, 420 Watson Powell Jr. Way, Des Moines, Iowa 50309.

There will be a public hearing on May 21, 2002, from11 a.m. to 1 p.m. in the Second Floor Conference Room, 420 Watson Powell Jr. Way, Des Moines, Iowa, at which time persons may present their views orally or in writing. At the hearing, persons will be asked to give their names and addresses for the record and to confine their remarks to the subject of the amendments.

Any persons who intend to attend the public hearing and have special requirements should contact the Department of Corrections and advise of special needs.

These amendments are intended to implement Iowa Code section 904.512.

Pursuant to the authority of Iowa Code section 272.2, the Board of Educational Examiners hereby gives Notice of Intended Action to amend Chapter 14, “Issuance of Practitioner’s Licenses and Endorsements,” Iowa Administrative Code.

The proposed amendment clarifies and strengthens the requirements for the issuance of the English as a second language endorsement. This amendment reduces the number of content hours required and also aligns the requirements with national standards for teaching English as a second language.

There will be a public hearing on the proposed amendment on May 21, 2002, at 1:30 p.m. in the State Board Conference Room, Second Floor, Grimes State Office Building, East 14th and Grand Avenue, Des Moines, Iowa. Persons may present their views at the public hearing either orally or in writing. At the hearing, persons will be asked to give their names and addresses for the record and to confine their remarks to the subject of the proposed amendment. Persons who wish to make oral presentations at the public hearing may contact the Executive Director, Board of Educational Examiners, Grimes State Office Building, East 14th and Grand Avenue, Des Moines, Iowa 50319–0147, or at (515) 281–5849 prior to the date of the public hearing. Fax communication may be sent to (515)281–7669.

Any interested person may make written comments or suggestions on the proposed amendment through 4:30 p.m. on May 22, 2002. Written comments and suggestions should be addressed to Dr. Anne E. Kruse, Executive Director, Board of Educational Examiners, at the above address, orE–mailed to anne.kruse@ed.state.ia.us.

A waiver provision is not included. The Board has adopted a uniform waiver rule.

This amendment is intended to implement Iowa Code chapter 272.

The following amendment is proposed.

Amend subrule 14.140(4) as follows:

14.140(4) English as a second language (ESL). K–12.

a. Authorization. The holder of this endorsement is authorized to teach English as a second language in kindergarten and grades one through twelve.

b. Program requirements.

(1) Degree—baccalaureate.

(2) Completion of an approved human relations program.

(3) Completion of the professional education core. See 14.123(3) and 14.123(4).

(4) Content. Completion of 24 18 semester hours of coursework in English as a second language to include the following:

3. Knowledge of cultural and linguistic diversity to include the following:

Pursuant to the authority of Iowa Code sections 217.6 and 234.6, the Department of Human Services proposes to amend Chapter 14, “Offset of County Debts Owed Department,” appearing in the Iowa Administrative Code.

Amendments to correct organizational references related to offset of county debts owed the Department were published in the Iowa Administrative Bulletin on March 6, 2002, as ARC 1418B. The Department is amending the Notice of Intended Action to clarify the appeal process to be used when an offset occurs.

These amendments specify that the first avenue available to a county that disagrees with a notice of liability is to request an administrative review from the Department’s Division of Fiscal Management. If, after review, the Department decides to proceed with an offset, the county has a right to request a contested case proceeding under Iowa Code chapter 17A at the point when the county receives a notice of potential offset from the Department. This proceeding shall conform to the Department’s standard procedures for appeals and hearings, as provided in 441—Chapter 7.

These amendments do not provide for waivers in specified situations because these amendments merely correct organizational references and clarify the offset process. The same process should apply in all cases.

Any interested person may make written comments or suggestions on the proposed amendments on or before May 22, 2002. Comments or suggestions should be addressed to the Office of Policy Analysis, Department of Human Services, Hoover State Office Building, 1305 East Walnut, Des Moines, Iowa 50319–0114. Comments may be sent by fax to (515)281–4980; or by electronic mail to policyanalysis@ dhs.state.ia.us.

These amendments are intended to implement Iowa Code sections 217.6 and 234.6.

The following amendments are proposed.

ITEM 1. Amend rule 441—14.2(234) as follows:

Amend subrule 14.2(1), paragraph “c,” as follows:

c. Require the county to send a written response request for review to the bureau of finance division of fiscal management within 20 calendar days of the date of notification if the county disputes the bill.

Rescind subrule 14.2(2) and adopt the following new subrule in lieu thereof:

14.2(2) Request for administrative review. The county may request an administrative review by providing to the division of fiscal management within 20 calendar days of the date of the notice of liability a written response that states why the county disagrees with the amount owed. The county shall provide any relevant legal citations, client identifiers, and any additional information supporting the county’s position.

Amend subrule 14.2(3) as follows:

Amend the introductory paragraph and paragraph “a” as follows:

14.2(3) Review Administrative review of county response regarding debt. The bureau of finance division of fiscal management shall review within ten 20 calendar days of receipt of the written response request the basis for the bill and the county’s position as stated in the written response request for review. The division of fiscal management shall notify the county of the findings of the review.

a. The bureau of finance division shall make the necessary adjustments to subsequent billings sent to the county when the bureau of finance division agrees with the county’s position regarding the liability and shall so notify the county.

Rescind paragraph “b” and adopt the following new paragraph in lieu thereof:

b. Any further disputes concerning the amount due shall be addressed when the offset notice is issued pursuant to rule 441—14.4(234).

ITEM 2. Amend rule 441—14.3(234) as follows:

14.3(1) Notification to department of revenue and finance. The bureau of finance division of fiscal management shall provide to the department of revenue and finance a list of the counties with amounts owed as established through rule 441—14.2(234). This list shall be maintained by the department of revenue and finance in a liability file.

14.3(2) Notification of change. The bureau of finance division of fiscal management shall notify the department of revenue and finance of any change in the status of a debt in the liability file within 30 calendar days from the occurrence of the change.

14.3(3) Certification of file. The bureau of finance division of fiscal management shall certify the file to the department of revenue and finance semiannually in a manner prescribed by the department of revenue and finance.

ITEM 3. Amend subrule 14.4(1) as follows:

Amend the introductory paragraph as follows:

14.4(1) Notice. The bureau of finance division of fiscal management shall send notification to the county within ten calendar days from the date the bureau of finance is notified by department of revenue and finance notifies the department of revenue and finance division of a potential offset. This notification shall include:

Amend paragraph “e,” introductory paragraph, as follows:

e. The county’s right to appeal the offset pursuant to 441—Chapter 7. The county shall have 30 days to request an appeal. The procedure the county follows request for appeal is: should include any relevant legal citations and any additional information supporting the county’s position.

Further amend paragraph “e” by rescinding subparagraphs (1) and (2).

Amend paragraph “f” as follows:

f. The county shall waive any right to appeal if the county fails to respond within 20 30 calendar days of the date of notification.

Amend paragraph “g” as follows:

g. The bureau of finance telephone number for the county to contact in the case of questions.

ITEM 4. Amend rule 441—14.5(234) as follows:

Amend the introductory paragraph as follows:

441—14.5(217,234) Review of county response regarding offset Implementing the final decision. The bureau of finance shall review within ten calendar days of receipt of the written response the basis for the offset and the county’s position as stated in the written appeal. When the final decision issued pursuant to rule 441—7.16(17A) upholds the department’s action or modifies the amount of offset, the division of fiscal management shall certify to the department of revenue and finance that the requirements for offset under Iowa Code section 421.17 have been met. When the final decision reverses the department’s action, the division of fiscal management shall notify the department of revenue and finance to release the offset.

Rescind subrules 14.5(1) and 14.5(2).

ITEM 5. Amend subrule 14.6(2) as follows:

14.6(2) Notification to county. Once the offset has been completed, the bureau of finance division of fiscal management shall notify the county of the action taken along with the balance, if any, still due to the department.

ITEM 6. Amend 441—Chapter 14, implementation clause, as follows:

These rules are intended to implement Iowa Code section sections 217.6 and 234.6.

Pursuant to the authority of Iowa Code section 249A.4, the Department of Human Services proposes to amend Chapter 77, “Conditions of Participation for Providers of Medical and Remedial Care,” Chapter 78, “Amount, Duration, and Scope of Medical and Remedial Services,” Chapter 79, “Other Policies Relating to Providers of Medical and Remedial Care,” and Chapter 83, “Medicaid Waiver Services,” appearing in the Iowa Administrative Code.

These amendments:

• Require that all providers of home– and community–based waiver services must be at least 18 years old, as recommended by the Centers for Medicare and Medicaid Services (CMS).

• Prohibit the spouse of a consumer or the parent or stepparent of a consumer who is a minor from being a paid provider of waiver services to that consumer.

• Allow providers certified for supported community services under the brain injury waiver to provide interim medical monitoring and treatment services under the brain injury, ill and handicapped, and mental retardation waivers. Under the current rules, only supported community living providers certified under the mental retardation waiver are allowed to provide these services.

• Remove restrictions on four–bed living units under the brain injury and mental retardation waivers. Providers are no longer limited to structures that they owned or operated as of November 4, 1994, and are no longer required to justify the need for a four–bed facility. The only remaining restriction on approval of a four–bed unit is the avoidance of an overconcentration of programs in one geographic area. Limits and requirements for conversion of licensed residential care facilities are removed, in compliance with 1999 Iowa Acts, chapter 160. Four–bed residential care facilities are not required to surrender their residential care licenses to participate as supported community living providers.

• Increase the limit on converted five–bed living units under the mental retardation waiver from 20 to 40, in compliance with 1999 Iowa Acts, chapter 160, and incorporate the conditions for approval specified in Iowa Code section 135C.6(8)“b.”

• Remove the restriction on residential–based supported community living providers under the mental retardation waiver to facilities owned or operated as of July 1, 1998.

• Raise the limit on the number of beds in a supported community living unit under the brain injury waiver from three to four.

• Remove the restriction on payment for home and vehicle modifications to $500 per month under the home– and community–based services brain injury, ill and handicapped, and physical disability waivers. Under current rules, the total cost of modifications in a year can be up to $6,000, but payment is released only $500 at a time. These amendments allow full payment to the provider upon completion of the modification. Up to $500 of the cost is encumbered monthly against the maximum allowable cost of service until the cost is amortized. The annual limit remains at $6,000.

• Allow the unit of transportation services established by the area agency on aging and establish the rate set by the area agency on aging as the upper limit for reimbursement of transportation services under the brain injury and physical disability waivers, except when services are provided by an individual. This change makes transportation units and rates consistent across all waivers that cover transportation services.

• Set the basis of reimbursement and reimbursement limits for supported community living providers providing interim medical monitoring and treatment services. Rates cannot exceed $32.62 per hour or the daily rate for ICF/MR care.

• Limit the annual adjustment of retrospectively adjusted prospective rates to the lower of the actual reconciled rate based on the provider’s cost report or the previous rate adjusted by the consumer price index for the preceding state fiscal year.

• Remove requirements for the use of several forms made unnecessary by the Individual Services Information System (ISIS).

• Correct rules addressing Medicaid application forms to conform to changes made to rule 441—76.1(249A).

• Update form numbers to the current designation.

• Remove references to the Division of Medical Services, as a result of the Department’s restructuring.

• Continue to standardize terminology across waivers.

These amendments do not provide for waivers in specified situations because they only clarify or update terminology, confer benefits to consumers, providers, or Department staff, or are needed assist in compliance with CMS requirements. Individual consumers and providers may request waivers under the Department’s general rule on exceptions at rule 441—1.8(17A,217).

Any interested person may make written comments on the proposed amendments on or before May 22, 2002. Comments should be directed to the Office of Policy Analysis, Department of Human Services, Hoover State Office Building, 1305 East Walnut Street, Des Moines, Iowa 50319– 0114. Comments may be sent by fax to (515)281–4980 or by E–mail to policyanalysis@dhs.state.ia.us.

People appearing at the following meetings may make oral presentations or submit written comments:

Anyone who intends to attend a public hearing and has special requirements, such as hearing or vision impairments, should contact the Office of Policy Analysis at (515) 281–8440 and advise of special needs.

These amendments are intended to implement Iowa Code sections 135C.6, 249A.4, and 249A.12.

The following amendments are proposed.

ITEM 1. Amend rule 441—77.30(249A) as follows:

Amend the introductory paragraph as follows:

441—77.30(249A) HCBS ill and handicapped waiver service providers. The following HCBS ill and handicapped waiver service providers shall be eligible to participate in the Medicaid program, provided that they meet services are rendered by a person who is at least 18 years old and is not the spouse of the consumer served or the parent or stepparent of a consumer aged 17 or under, and that the provider meets the standards set forth below:

Amend subrule 77.30(8), paragraph “a,” subparagraph (5), as follows:

(5) Supported community living providers certified according to subrule 77.37(14) or 77.39(13).

ITEM 2. Amend rule 441—77.33(249A), introductory paragraph, as follows:

441—77.33(249A) HCBS elderly waiver service providers. The following HCBS elderly waiver service providers shall be eligible to participate in the Medicaid program, provided that they meet services are rendered by a person who is at least 18 years old and is not the spouse of the consumer served or the parent or stepparent of a consumer aged 17 or under, and that the provider meets the standards set forth below:

ITEM 3. Amend rule 441—77.34(249A), introductory paragraph, as follows:

441—77.34(249A) HCBS AIDS/HIV waiver service providers. The following HCBS AIDS/HIV waiver service providers shall be eligible to participate in the Medicaid program, provided that they meet services are rendered by a person who is at least 18 years old and is not the spouse of the consumer served or the parent or stepparent of a consumer aged 17 or under, and that the provider meets the standards set forth below:

ITEM 4. Amend rule 441—77.37(249A) as follows:

Amend the introductory paragraph as follows:

441—77.37(249A) HCBS MR waiver service providers. Supported community living providers (except forresidential–based supported community living providers) and supported employment providers Providers shall be eligible to participate in the Medicaid program as approved HCBS MR service providers in the Medicaid program based on the outcome–based standards set forth below in subrules 77.37(1) and 77.37(2) evaluated according to subrules 77.37(10) to 77.37(12), if they meet the requirements of subrules 77.37(3) to 77.37(9), in this rule and the applicable subrules pertaining applicable to the individual service. Residential–based supported community living providers shall meet the conditions set forth in subrule 77.37(23). Respite providers shall meet the conditions set forth in subrules 77.37(1) and 77.37(15). Home and vehicle modification shall meet the conditions set forth in subrule 77.37(17). Personal emergency response system providers shall meet the conditions set forth in sub–rule 77.37(18). Nursing providers shall meet the conditions set forth in subrule 77.37(19). Home health aide providers shall meet the conditions set forth in subrule 77.37(20). Consumer–directed attendant care providers shall meet the conditions set forth in subrule 77.37(21). Interim medical monitoring and treatment providers shall meet the conditions set forth in subrule 77.37(22).

Amend subrule 77.37(14), paragraph “e,” as follows:

Amend the introductory paragraph as follows:

e. Living units designed to serve more than three supported community living recipients consumers shall be approved only as follows:

Rescind subparagraphs (1) and (2) and adopt the following new subparagraphs in lieu thereof:

(1) The department shall approve living units designed to serve four consumers if the geographic location of the program does not result in an overconcentration of such programs in the area.

(2) The department shall approve the conversion of up to 40 five–person living units that have been licensed as residential care facilities for persons with mental retardation, under the terms of Iowa Code section 135C.6(8)“b.”

Amend subrule 77.37(22), paragraph “a,” subparagraph (5), as follows:

(5) Supported community living providers certified according to subrule 77.37(14) or 77.39(13).

Amend subrule 77.37(23), paragraph “e,” as follows:

Amend the introductory paragraph as follows:

e. The residential–based supportive community living service provider shall also furnish residential–based living units for all recipients of the residential–based supported community living services. Except as provided herein, living units provided may be of no more than four beds. Service providers who receive approval from the division bureau of medical services’ long–term care approval may provide living units of up to eight beds. The division of medical services bureau shall approve five– to eight–bed living units only if all of the following conditions are met:

Rescind and reserve subparagraph (1).

Amend subparagraph (3), introductory paragraph, as follows:

(3) The provider supplies the division bureau of medical services long–term care with a written plan acceptable to the department that addresses how the provider will reduce its living units to four–bed units within a two–year period of time. This written plan shall include the following:

ITEM 5. Amend rule 441—77.39(249A) as follows:

Amend the introductory paragraph as follows:

441—77.39(249A) HCBS brain injury waiver service providers. Adult day care, behavioral programming, case management, consumer–directed attendant care, family counseling and training, home and vehicle modification, interim medical monitoring and treatment, personal emergency response, prevocational service, respite, specialized medical equipment, supported community living, supported employment, and transportation providers shall be eligible to participate as approved brain injury waiver service providers in the Medicaid program based on the applicable subrules pertaining to the individual service and provided that they and each of their staff involved in direct consumer service have training regarding or experience with consumers who have a brain injury. Services must be rendered by a person who is at least 18 years old and is not the spouse of the consumer served or the parent or stepparent of a consumer aged 17 or under. In addition, behavioral programming, supported community living, and supported employment providers shall meet the outcome–based standards set forth below in subrules 77.39(1) and 77.39(2) evaluated according to subrules 77.39(8) to 77.39(10), and the requirements of subrules 77.39(3) to 77.39(7). Respite providers shall also meet the standards in subrule 77.39(1).

Amend subrule 77.39(13), paragraph “d,” as follows:

Amend the introductory paragraph as follows:

d. The department shall approve living units designed to serve not more than four supported community living consumers meeting criteria listed below: if the geographic location of the program does not result in an overconcentration of programs in an area.

Rescind subparagraphs (1) and (2).

Amend subrule 77.39(25), paragraph “a,” subparagraph (5), as follows:

(5) Supported community living providers certified according to subrule 77.37(14) or 77.39(13).

ITEM 6. Amend rule 441—77.41(249A) as follows:

Amend the introductory paragraph as follows:

441—77.41(249A) HCBS physical disability waiver service providers. Consumer–directed attendant care, home and vehicle modification, personal emergency response system, specialized medical equipment, and transportation service providers shall be eligible to participate as approved physical disability waiver service providers in the Medicaid program based on the applicable subrules pertaining to the individual service. Enrolled providers shall maintain the certification listed in the applicable subrules in order to remain eligible providers. Services must be rendered by a person who is at least 18 years old and is not the spouse of the consumer served or the parent or stepparent of a consumer aged 17 or under.

Amend subrule 77.41(1) as follows:

77.41(1) Enrollment process. Reviews of compliance with standards for initial enrollment shall be conducted by the department’s division of medical services quality assurance staff. Enrollment carries no assurance that the approved provider will receive funding.

ITEM 7. Amend subrule 78.34(9), paragraph “g,” as follows:

g. Service payment shall be made to the enrolled home and vehicle modification provider. If applicable, payment will be forwarded to the subcontracting agency by the enrolled home and vehicle modification provider following completion of the approved modifications. Payment of up to $6,000 per year may be made to certified providers upon satisfactory completion of the service. The service worker shall encumber up to $500 per month within the monthly dollar cap allowed for the consumer until the amount of the modification is reached within the 12–month period.

ITEM 8. Amend rule 441—78.43(249A) as follows:

Amend the introductory paragraph as follows:

441—78.43(249A) HCBS brain injury waiver services. Payment shall be approved for the following services to consumers eligible for the HCBS brain injury services as established in 441—Chapter 83 and as identified in the participant’s individual comprehensive plan (ICP) consumer’s service plan. All services shall include the applicable and necessary instructions, supervision, assistance and support as required by the consumer in achieving the goals written specifically in the ICP service plan. The services, amount and supports provided under the HCBS brain injury waiver shall be delivered in the least restrictive environment and in conformity with the consumer’s individual comprehensive service plan.

Amend subrule 78.43(1), paragraphs “b,” “c,” and “d,” as follows:

b. Assurance that an individual comprehensive a service plan (ICP) is developed which addresses the consumer’s total needs for services and living arrangements.

c. Assistance to the consumer in obtaining the services and living arrangements identified in the ICP service plan.

d. Coordination and facilitation of decision making among providers to ensure consistency in the implementation of the ICP service plan.

Amend subrule 78.43(2), paragraph “c,” introductory paragraph, as follows:

c. Services may be provided to a child or an adult. Children must first access all other services for which they are eligible and which are appropriate to meet their needs beforeaccessing the HCBS brain injury waiver services. A maximum of three four consumers receiving community–supported alternative living arrangements or HCBS brain injury waiver services may reside in a living unit except that providers meeting requirements set forth in 441—paragraph 77.39(13)“d” may provide supported community living services to four HCBS brain injury waiver consumers residing in a living unit.

Amend subrule 78.43(5), paragraph “g,” as follows:

g. Service payment shall be made to the enrolled home and vehicle modification provider. If applicable, payment will be forwarded to the subcontracting agency by the enrolled home and vehicle modification provider following completion of the approved modifications. Payment of up to $6,000 per year may be made to certified providers upon satisfactory completion of the service. The service worker shall encumber up to $500 per month within the monthly dollar cap allowed for the consumer until the amount of the modification is reached within the 12–month period.

Amend subrule 78.43(7) as follows:

78.43(7) Transportation. Transportation services may be provided for consumers to conduct business errands, and essential shopping, to receive medical services when not reimbursed through medical transportation, to travel to and from work or day programs, and to reduce social isolation. A unit of service is either per mile, or per trip, or the unit established by an area agency on aging. Transportation may not be reimbursed simultaneously with HCBS brain injury waiver supported community living service.

ITEM 9. Amend rule 441—78.46(249A) as follows:

Amend subrule 78.46(2), paragraph “g,” as follows:

g. Service payment shall be made to the enrolled home and vehicle modification provider. If applicable, payment will be forwarded to the subcontracting agency by the enrolled home and vehicle modification provider following completion of the approved modifications. Payment of up to $6,000 per year may be made to certified providers upon satisfactory completion of the service. The service worker shall encumber up to $500 per month within the monthly dollar cap allowed for the consumer until the amount of the modification is reached within the 12–month period.

Amend subrule 78.46(5) as follows:

78.46(5) Transportation. Transportation services may be provided for consumers to conduct business errands and essential shopping, to receive medical services when not reimbursed through medical transportation, to travel to and from work or day programs, and to reduce social isolation. A unit of service is either per mile, or per trip, or the unit established by an area agency on aging.

ITEM 10. Amend rule 441—79.1(249A) as follows:

Amend subrule 79.1(2), provider category “HCBS brain injury waiver service providers,” numbered paragraphs “6,” “9,” and “14,” as follows:

Amend subrule 79.1(2), provider category “HCBS elderly waiver service providers,” numbered paragraph “11,” as follows:

Amend subrule 79.1(2), provider category “HCBS ill and handicapped waiver service providers,” numbered paragraphs “8” and “9,” as follows:

Amend subrule 79.1(2), provider category “HCBS MR waiver service providers,” numbered paragraphs “1” and “9,” as
follows:

Amend subrule 79.1(2), provider category “HCBS physical disability waiver service providers,” numbered paragraphs “2” and “5,” as follows:

Amend subrule 79.1(15) as follows:

Amend the introductory paragraph as follows:

79.1(15) HCBS retrospectively limited prospective rates. This methodology applies to Reimbursement reimbursement for HCBS MR and BI supported community living and supported employment, HCBS interim medical monitoring and treatment when provided by an HCBS–certified supported community agency, and HCBS AIDS/HIV, BI, elderly, ill and handicapped, and MR respite when basis of reimbursement is retrospectively limited prospective rate. This includes provided by home health agencies providing group respite; nonfacility providers of specialized, basic individual, and group respite; , camps; , home care agencies providing specialized, basic individual, and group respite; , and or providers of residential–based supported community living, and HCBS group respite provided by home health agencies.

Amend paragraph “a,” subparagraph (7), as follows:

(7) A 30–day extension for submitting the cost reports due by September 30 may be obtained by submitting a letter to the division bureau of medical services long–term care by September 30. No extensions will be granted beyond 30 days.

Amend paragraph “d,” subparagraph (4), as follows:

(4) After establishment of the initial prospective rate for an established provider, the rate will be adjusted annually, effective for the third month after the month during which the annual cost report is submitted to the department. The annual adjustment shall be equal to the increase in provider’s new rate shall be the actual reconciled rate or the previously established rate adjusted by the consumer price index for all urban consumers for the preceding 12–month period ending June 30, whichever is less.

Amend paragraph “f,” subparagraph (2), as follows:

(2) Revenues exceeding adjusted actual costs by more than 2.5 percent shall be remitted to the division of medical services department. Payment will be due upon notice of the new rates and retrospective adjustment.

ITEM 11. Amend rule 441—83.2(249A) as follows:

Amend subrule 83.2(1), paragraph “a,” as follows:

a. The person must be under the age of 65 and blind or disabled as determined by the receipt of social security disability benefits or by a disability determination made through the division of medical services department. Disability determinations are made according to supplemental security income guidelines as per under Title XVI of the Social Security Act.

Amend subrule 83.2(2), paragraph “b,” as follows:

b. The total monthly cost of the ill and handicapped waiver services shall not exceed the established aggregate monthly cost for level of care as follows:

ITEM 12. Amend rule 441—83.3(249A) as follows:

Amend subrule 83.3(2) as follows:

Amend the introductory paragraph as follows:

83.3(2) Application and services program limit. The number of persons who may be approved for the HCBS ill and handicapped waiver shall be subject to the number of clients to be served as set forth in the federally approved HCBS ill and handicapped waiver. The number of clients to be served are is set forth at the time of each five–year renewal of the waiver or in amendments to the waiver. When the number of applicants exceeds the number of clients specified in the approved waiver, the applicant’s name shall be placed on a waiting list maintained by the division bureau of medical services long–term care.

Amend paragraph “a,” introductory paragraph and subparagraphs (1) and (2), as follows:

a. The county department office shall contact the division bureau of medical services long–term care for all applicants for the waiver to determine if a payment slot is available.

(1) For persons applicants not currently receiving Medicaid, the county department office shall contact the division of medical services bureau by the end of the second working day after receipt of a completed Form 470–0442 470–2927, Health Services Application for Medical Assistance or State Supplementary Assistance, or within two working days after receipt of disability determination, whichever is later.

(2) For current Medicaid recipients, the county department office shall contact the division of medical services bureau by the end of the second working day after receipt of either Form 470–0660 470–0659, Home– and Community–Based Service Report Services Assessment or Reassessment, signed and dated by the recipient with the choice of HCBS waiver indicated by signature of the consumer on Part A or a written request, signed and dated by the recipient consumer.

Amend paragraph “b,” subparagraphs (1) and (4), as follows:

(1) Persons Consumers not currently eligible for Medicaid shall be entered on the waiting list on the basis of the date a completed Form 470–0442 470–2927, Health Services Application for Medical Assistance or State Supplementary Assistance, is date–stamped in the county department office or upon the county department office’s receipt of disability determination, whichever is later.

(4) Persons Applicants who do not fall within the available slots shall have their application rejected, and their names shall be maintained on the waiting list. They shall be contacted to reapply as slots become available based on their order on the waiting list so that the number of approved persons on the program is maintained. The division bureau of medical services long–term care shall contact the county department office when a slot becomes available.

Amend paragraph “c,” as follows:

c. The county department office shall notify the division bureau of medical services long–term care within two working days of a denial or withdrawal of an application.

Amend subrule 83.3(3) as follows:

Amend paragraph “a,” subparagraphs (4) and (5), as follows:

(4) The application is pending because a level of care determination has not been made although the completed assessment, Form SS–1644 470–0659, Home– and Community–Based Services Assessment or Reassessment, has been submitted to the Iowa Foundation for Medical Care.

(5) The application is pending because the assessment, Form SS–1644 470–0659, or the case plan has not been completed. When a determination is not completed 90 days from the date of application due to the lack of a completed assessment, Form SS–1644 470–0659, or case plan, the application shall be denied. The client consumer shall have the right to appeal.

Amend paragraph “c” as follows:

c. A consumer must be given the choice between HCBS ill and handicapped waiver services and institutional care. The income maintenance or service worker shall have the consumer, parent, guardian, or attorney in fact under a durable power of attorney for health care complete and sign Part A of Form 470–0660 470–0659, Home– and Community–Based Services Report Services Assessment or Reassessment, indicating the consumer’s choice of home– andcommunity–based services or institutional care.

Amend subrule 83.3(4), paragraph “d,” as follows:

d. Eligibility continues until the recipient consumer has been in a medical institution for 30 consecutive days for other than respite care. Recipients Consumers who are inpatients in a medical institution for 30 or more consecutive days for other than respite care shall be terminated from ill and handicapped waiver services and reviewed for eligibility for other Medicaid coverage groups. The recipient consumer will be notified of that decision through Form SS–1104–0 470–0602, Notice of Decision. If the client consumer returns home before the effective date of the notice of decision and the person’s consumer’s condition has not substantially changed, the denial may be rescinded and eligibility may continue.

ITEM 13. Rescind and reserve rule 441—83.11(249A).

ITEM 14. Amend subrule 83.23(4), paragraph “c,” as follows:

c. Eligibility continues until the recipient consumer has been in a medical institution for 30 consecutive days for other than respite care or fails to meet eligibility criteria listed in rule 441—83.22(249A). Recipients Consumers who are inpatients in a medical institution for 30 or more consecutive days for other than respite care shall be terminated from elderly waiver services and reviewed for eligibility for other Medicaid coverage groups. The recipient consumer will be notified of that decision through Form SS–1104–0 470–0602, Notice of Decision. If the client consumer returns home before the effective date of the notice of decision and the person’s consumer’s condition has not substantially changed, the denial may be rescinded and eligibility may continue.

ITEM 15. Rescind and reserve rule 441—83.31(249A).

ITEM 16. Amend rule 441—83.42(249A) as follows:

Amend subrule 83.42(1), paragraph “c,” as follows:

c. Be eligible for medical assistance under SSI, SSI–related, ADC FMAP, or ADC–related FMAP–related coverage groups; medically needy at hospital level of care; eligible under or a special income level (300 percent group); or become eligible through application of the institutional deeming rules.

Amend subrule 83.42(2), paragraph “a,” as follows:

a. The county social worker shall perform an assessment of the person’s need for waiver services and determine the availability and appropriateness of services. This assessment shall be based, in part, on information in the completed Home– and Community–Based Services Assessment or Reassessment, Form SS–1644 470–0659. Form SS–1644 470– 0659 shall be completed annually.

ITEM 17. Amend subrule 83.43(3) as follows:

Amend paragraph “a,” subparagraph (2), as follows:

(2) The application is pending because a level of care determination has not been made or pended although the completed assessment, Form SS–1644 470–0659, has been submitted to the Iowa Foundation for Medical Care.

Amend paragraph “c” as follows:

c. A consumer must be given the choice between HCBS AIDS/HIV waiver services and institutional care. The income maintenance or service worker shall have the consumer, parent, guardian, or attorney in fact under durable power of attorney for health care complete and sign Part A of Form 470–0660 470–0659, Home– and Community–Based Service Report Services Assessment or Reassessment, indicating the consumer’s choice of home– and community–based services or institutional care.

ITEM 18. Rescind and reserve rule 441—83.50(249A).

ITEM 19. Amend rule 441—83.61(249A) as follows:

Amend subrule 83.61(2), paragraph “g,” subparagraph (4), as follows:

(4) Service plans for consumers aged 20 or under which include supported community living services beyond intermittent shall be approved (signed and dated) by the division of medical services’ designee of the bureau of long–term care or the designee of the county board of supervisors’ designee supervisors. The service worker, department QMRP, or Medicaid case manager shall attach a written request for a variance from the maximum for intermittent supported community living with a summary of services and service costs. The written request for the variance shall provide a rationale for requesting supported community living beyond intermittent. The rationale shall contain sufficient information for the division of medical services’ designee or the county board of supervisors’ designee to make a decision regarding the need for supported community living beyond intermittent.

Amend subrule 83.61(4) as follows:

Amend paragraph “a,” introductory paragraph and subparagraphs (1) and (2), as follows:

a. The county department office shall contact the division bureau of medical services long–term care for state cases and children or the central point of coordination administrator for the county of legal settlement for adults to determine if a payment slot is available for all new applications for the HCBS MR program.

(1) For persons applicants not currently receiving Medicaid, the county department office shall contact the division of medical services bureau or the county by the end of the second working day after receipt of a completed Form 470–0442 470–2927, Health Services Application for Medical Assistance or State Supplementary Assistance, or within two working days after receipt of disability determination, whichever is later.

(2) For current Medicaid recipients, the county department office shall contact the division of medical servicesbureau or the county by the end of the second working day after receipt of either Form 470–0660 470–0659, Home– and Community–Based Service Report Services Assessment or Reassessment, signed and dated by the recipient with the choice of HCBS waiver indicated by signature of the consumer on Part A or a written request, signed and dated by the recipient consumer.

Amend paragraph “b,” subparagraphs (1) and (4), as follows:

(1) Persons Consumers not currently eligible for Medicaid shall be entered on the waiting list on the basis of the date a completed Form 470–0442 470–2927, Health Services Application for Medical Assistance or State Supplementary Assistance, is date–stamped in the county department office or upon county department office receipt of disability determination, whichever is later.

(4) Persons Applicants who do not fall within the available slots shall have their application rejected, and their names shall be maintained on the waiting list. As slots become available, persons shall be selected from the waiting list to maintain the number of approved persons on the program based on their order on the waiting list. The county central point of coordination administrator (for adults) and the division bureau of medical services long–term care (for children and for adults with state case status) shall contact the county department office when a slot becomes available.

Amend paragraph “c” as follows:

c. The county department office shall notify the division bureau of medical services long–term care for state cases and children or the central point of coordination administrator for the county of legal settlement for adults within two working days of a denial or withdrawal of an application.

ITEM 20. Amend rule 441—83.62(249A) as follows:

Amend subrule 83.62(3), paragraph “c,” as follows:

c. An applicant shall be given the choice between HCBS waiver services and ICF/MR care. The case manager or worker shall have the consumer or legal representative complete and sign Part E A of Form SS–1645 470–3073, Home– and Community–Based Service Report Functional Assessment Tool, indicating the consumer’s choice of care.

Amend subrule 83.62(4), paragraph “d,” introductory paragraph, as follows:

d. Eligibility continues until the consumer fails to meet eligibility criteria listed in rule 441—83.61(249A). Consumers who are inpatients in a medical institution for 30 consecutive days shall receive a review by the interdisciplinary team to determine additional inpatient needs for possible termination from the HCBS program. Consumers shall be reviewed for eligibility under other Medicaid coverage groups. The consumer or legal representative shall participate in the review and receive formal notification of that decision through Form SS–1104–0 470–0602, Notice of Decision.

ITEM 21. Amend rule 441—83.67(249A) as follows:

Amend subrule 83.67(8) as follows:

Amend the introductory paragraph as follows:

83.67(8) Documentation. The Medicaid case manager shall ensure that the consumer’s case file contains the consumer’s service plan, the county or department’s final approval of services and service costs, documentation supporting, and the diagnosis of mental retardation, and the following completed forms:.

Rescind paragraphs “a” through “d.”

Amend subrule 83.67(9) as follows:

Amend the introductory paragraph as follows:

83.67(9) Approval of plan. The administrator designee of the chief of the division bureau of medical services’ designee long–term care for children and for state cases, or of the county board of supervisors’ designee supervisors for adults, shall review the availability and appropriateness of services as specified in the service plan and may, based on a written determination, request the service plan be modified so that the services are cost–effective.

Amend paragraph “d” as follows:

d. If a notice of decision is not received from a county within 30 days from the date of request for services, the request shall be sent to the department of human services with documentation verifying the original submission of the request to the county. A The department shall send a letter from the department of human services shall be sent to the county central point of coordination and county board of supervisors requesting a response within 10 days. If no response is received within 10 days, the division bureau of medical services long–term care designee will make the decision, as stated in paragraph “b.”

ITEM 22. Amend rule 441—83.70(249A), introductory paragraph, as follows:

441—83.70(249A) County reimbursement. The county board of supervisors of the consumer’s county of legal settlement shall reimburse the department for all the nonfederal share of the HCBS MR waiver service expenses toadults. The county shall enter into a Medicaid Home– andCommunity–Based Payment Agreement, Form MA–2171, payment agreement with the department for reimbursement of the nonfederal share of the cost of service provided to HCBS MR waiver adults by input through the Individual Services Information System (ISIS).

ITEM 23. Rescind and reserve rule 441—83.71(249A).

ITEM 24. Amend rule 441—83.82(249A) as follows:

Amend subrule 83.82(2) as follows:

Amend paragraph “a,” subparagraph (4), as follows:

(4) Service plans for consumers aged 20 or under which include supported community living services beyond intermittent must be approved (signed and dated) by the designee of the division bureau of medical services’ long–term care designee. The Medicaid case manager must request in writing more than intermittent supported community living with a summary of services and service costs, and submit a written justification with the service plan. The rationale must contain sufficient information for the division of medical services’ bureau’s designee, or for an a consumer at the ICF/MR level of care consumer, the designee of the county of legal settlement’s board of supervisors, to make a decision regarding the need for supported community living beyond intermittent.

Amend paragraph “d” as follows:

d. The total monthly cost of brain injury waiver services shall not exceed $2,650 per month. If more than $500 is paid for home and vehicle modification services, the service worker shall encumber up to $500 per month within the monthly dollar cap allowed for the consumer until the total amount of the modification is reached within a 12–month period.

Amend subrule 83.82(4) as follows:

Amend paragraph “a” as follows:

a. The county department office shall contact the division bureau of medical services long–term care to determine if a payment slot is available for all new applications for the HCBS BI waiver program. For new applications for people who require the ICF/MR level of care when the county of legal settlement has payment responsibility pursuant to rule 441—83.90(249A), the county department office shall inform the county of legal settlement of the application.

(1) For persons applicants not currently receiving Medicaid, the county department office shall contact the division of medical services bureau and notify the county of those persons applicants for whom the county has payment responsibility by the end of the second working day after receipt of a completed Form 470–0442 470–2927, Health Services Application for Medical Assistance or State Supplementary Assistance.

(2) For current Medicaid recipients, the county department office shall contact the division of medical services bureau and notify the county of those persons for whom the county has payment responsibility by the end of the second working day after receipt of either a signed and dated Form 470–0660 470–3349, Home– and Community–Based Service Report Brain Injury Functional Assessment, with the choice of the HCBS waiver indicated by the consumer’s signature on Part A, or a written request signed and dated by the consumer.

Amend paragraph “b,” introductory paragraph and subparagraph (1), as follows:

b. On the third day after the receipt of the completed Form 470–0442 or 470–0660 470–2927, if no payment slot is available, persons shall be entered the bureau of long–term care shall enter the consumer on a waiting list by the division of medical services according to the following:

(1) Persons Consumers not currently eligible for Medicaid shall be entered on the waiting list on the basis of the date a completed Form 470–0442 470–2927, Health Services Application for Medical Assistance or State Supplementary Assistance, is date–stamped in the county department office. Consumers currently eligible for Medicaid shall be added to the waiting list on the basis of the date the consumer requests HCBS BI program services as documented by the date of the consumer’s signature on Form 470–0660 470–2927. In the event that more than one application is received at one time, persons consumers shall be entered on the waiting list on the basis of the month of birth, January being month one and the lowest number.

ITEM 25. Amend rule 441—83.83(249A) as follows:

Amend subrule 83.83(2), paragraph “c,” as follows:

c. A consumer shall be given the choice between waiver services and institutional care. The consumer or legal representative shall complete and sign Part A of Form 470–0660 470–3349, Home– and Community–Based Service Report Brain Injury Functional Assessment, indicating the consumer’s choice of caregiver. This shall be arranged by the medical facility discharge planner or case manager.

Amend subrule 83.83(3), paragraph “c,” as follows:

c. Eligibility for the waiver continues until the consumer fails to meet eligibility criteria listed in rule 441— 83.82(249A). Consumers who return to inpatient status in a medical institution for more than 30 consecutive days shall be reviewed by IFMC to determine additional inpatient needs for possible termination from the brain injury waiver. The consumer shall be reviewed for eligibility under other Medicaid coverage groups in accordance with rule 441— 76.11(249A). The consumer shall be notified of that decision through Form SS–1104–0 470–0602, Notice of Decision.

ITEM 26. Amend rule 441—83.87(249A) as follows:

Amend subrule 83.87(2) as follows:

83.87(2) Use of nonwaiver services. Service plans must be developed to reflect use of all appropriate nonwaiver Medicaid services and so as not to replace or duplicate those services.

Case plans for consumers aged 20 or under which include supported community living services beyond intermittent must be approved (signed and dated) by the division designee of the bureau of medical services’ long–term care designee, or when a county voluntarily chooses to participate, by the county board of supervisors’ designee or the division of medical services’ bureau’s designee. The Medicaid case manager shall attach a written request for a variance from the limitation on supported community living to intermittent.

Amend subrule 83.87(4) as follows:

Amend the the introductory paragraph as follows:

83.87(4) Service file. The Medicaid case manager must ensure that the consumer service file contains the consumer’s service plan and, if the county is voluntarily participating, the county’s final approval of service costs and the following completed forms:.

Rescind paragraphs “a” through “d.”

ITEM 27. Amend rule 441—83.90(249A), introductory paragraph, as follows:

441—83.90(249A) County reimbursement. The county board of supervisors of the consumer’s county of legal settlement shall reimburse the department for all the nonfederal share of the cost of brain injury waiver services to persons consumers at the ICF/MR level of care with legal settlement in the county who are coming onto the waiver from an ICF/MR facility or who have been receiving other services for which the county has been financially responsible or would become liable due to the person’s reaching the age of majority. The county shall enter into a Medicaid Home and Community Based Payment Agreement, Form 470–0379, payment agreement with the department for reimbursement of the nonfederal share of the cost of services provided to HCBS brain injury waiver adults at the ICF/MR level of care who meet the criteria stated above by input through the Individual Services Information System (ISIS). Waiver slots for these persons shall be identified in the county management plan submitted to the department pursuant to 441—Chapter 25.

ITEM 28. Rescind and reserve rule 441—83.91(249A).

ITEM 29. Amend rule 441—83.102(249A) as follows:

Amend subrule 83.102(1), paragraph “b,” as follows:

b. Be blind or disabled as determined by the receipt of social security disability benefits or by a disability determination made through the division of medical services department. Disability determinations are made according to supplemental security income guidelines as per under Title XVI of the Social Security Act or the disability guidelines for the Medicaid employed people with disabilities coverage group.

Amend subrule 83.102(2), paragraph “b,” as follows:

b. The total monthly cost of physical disability waiver services shall not exceed $621 per month.

Amend subrule 83.102(5) as follows:

Amend paragraph “a” as follows:

a. The county department office shall contact the division bureau of medical services long–term care for all cases to determine if a slot is available for all new applications for the HCBS physical disability waiver program.

(1) For persons applicants not currently receiving Medicaid, the county department office shall contact the division of medical services bureau by the end of the second working day after receipt of a completed Form 470–0442 470–2927, Health Services Application for Medical Assistance or State Supplementary Assistance, submitted on or after April 1, 1999.

(2) For current Medicaid recipients, the county department office shall contact the division of medical services bureau by the end of the second working day after receipt of either a signed and dated Form 470–0660 470–3501, Home– and Community–Based Service Report Physical Disability Waiver Assessment Tool, submitted on or after April 1, 1999, with the choice of HCBS waiver indicated by the signature of the consumer on Part A or a written request signed and dated by the consumer.

Amend paragraph “b,” introductory paragraph and subparagraph (1), as follows:

b. On the third day after the receipt of the completed Form 470–0442 or 470–0660 470–2927, Health Services Application, if no slot is available, the division bureau of medical services long–term care shall enter persons consumers on the HCBS physical disabilities waiver waiting list according to the following:

(1) Persons Consumers not currently eligible for Medi–caid shall be entered on the basis of the date a completed Form 470–0442 470–2927, Health Services Application for Medical Assistance or State Supplementary Assistance, is submitted on or after April 1, 1999, and date–stamped in the county department office. Consumers currently eligible for Medicaid shall be added on the basis of the date the consumer requests HCBS physical disability program services as documented by the date of the consumer’s signature on Form 470–0660 470–2927 submitted on or after April 1, 1999. In the event that more than one application is received on the same day, persons consumers shall be entered on the waiting list on the basis of the day of the month of their birthday, the lowest number being first on the list. Any subsequent tie shall be decided by the month of birth, January being month one and the lowest number.

ITEM 30. Amend subrule 83.103(2), paragraph “d,” as follows:

d. An applicant shall be given the choice between waiver services and institutional care. The applicant or the applicant’s parent, legal guardian, or attorney in fact under a durable power of attorney for health care shall complete andsign Part A of Form 470–0660 470–3502, Home– andCommunity–Based Service Report Physical Disability Waiver Assessment Tool, indicating the applicant’s choice of caregiver.

ITEM 31. Rescind subrule 83.107(3).

ITEM 32. Rescind rule 441—83.111(249A).

Pursuant to the authority of Iowa Code sections 514G.7 and 507B.12, the Insurance Division gives Notice of Intended Action to amend Chapter 39, “Long–Term Care Insurance,” Iowa Administrative Code.

The proposed amendments contain numerous new definitions, rules and appendixes and are designed to conform the chapter to the current version of the National Association of Insurance Commissioners (NAIC) Model Long–Term Care Act and Regulation. The amendments will require insurers to file additional reports and to perform additional analysis prior to imposing exceptional rate increases. The amendments will require insurers and insurance producers to provide additional disclosures to consumers at point of sale.

The proposed amendments also conform the chapter to the requirements of the Health Insurance Portability and Accountability Act (HIPAA).

Any person may make written comments on the proposed amendments on or before May 21, 2002. These comments should be directed to Rosanne Mead, Assistant Commissioner, Insurance Division, 330 Maple Street, Des Moines, Iowa 50319. Comments may also be transmitted by fax to (515) 281–3059 or by E–mail to rosanne.mead@iid.state.ia.us.

A public hearing will be held at 10:30 a.m. on May 21, 2002, at the offices of the Insurance Division, 330 Maple Street, Des Moines, Iowa 50319. Persons wishing to provide oral comments should contact Rosanne Mead no later than May 20, 2002, to be placed on the agenda.

These amendments are intended to implement Iowa Code chapters 514G and 507B.

The following amendments are proposed.

ITEM 1. Amend rule 191—39.4(514G) as follows:

Amend the following definition:

“Long–term care insurance” means an insurance policy, insurance contract, insurance certificate, or rider, which is advertised, marketed, offered, or designed to provide coverage for not less than 12 consecutive months for each covered person on an expense–incurred, indemnity, prepaid, or other basis; for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care service provided in a setting other than an acute care unit of a hospital. This definition also encompasses group and individual annuities and life insurance policies or riders that provide directly for or supplement long–term care insurance as well as a policy or rider providing for payment of benefits based upon cognitive impairment or the loss of functional capacity.

Long–term care insurance may be issued by insurers, fraternal benefit societies, nonprofit health, hospital, and medical service corporations, prepaid health plans, health maintenance organizations or any similar organizations to the extent they are otherwise authorized to issue life or health insurance.

Long–term care insurance shall not include any insurance policy which is offered primarily to provide basic Medicare Supplement coverage, basic hospital expense coverage, basic medical–surgical expense coverage, disability income or related asset–protection coverage, or accident–only coverage, specific disease or specified accident coverage, or limited benefit health coverage. The definition does not include life insurance policies which accelerate the death benefit specifically for one or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention, or permanent institutional confinement, and which provide the option of a lump–sum payment for those benefits and in which neither the benefits nor eligibility for those benefits is conditional upon the receipt of long–term care. Notwithstanding any other provision contained herein, any product advertised, marketed, or offered as long–term care insurance shall be subject to the provisions of 191— Chapter 39.

Adopt the following new definition in alphabetical order:

“Qualified long–term care insurance contract” or “federally tax–qualified long–term care insurance contract” means an individual or group insurance contract that meets the requirements of Section 7702B(b) of the Internal Revenue Code of 1986, as follows:

1. The only insurance protection provided under the contract is coverage of qualified long–term care services. A contract shall not fail to satisfy the requirements of this paragraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate;

2. The contract does not pay or reimburse expenses incurred for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act, or would be so reimbursable but for the application of a deductible or coinsurance amount. The requirements of this paragraph do not apply to expenses that are reimbursable under Title XVIII of the Social Security Act only as a secondary payor. A contract shall not fail to satisfy the requirements of this paragraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate;

3. The contract is guaranteed renewable, within the meaning of Section 7702B(b)(1)(C) of the Internal Revenue Code of 1986;

4. The contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed;

5. All refunds of premiums, and all policyholder dividends or similar amounts, under the contract are to be applied as a reduction in future premiums or to increase future benefits, except that a refund on the event of death of the insured or a complete surrender or cancellation of the contract cannot exceed the aggregate premiums paid under the contract; and

6. The contract meets the consumer protection provisions set forth in Section 7702B(g) of the Internal Revenue Code of 1986.

“Qualified long–term care insurance contract” or “federally tax–qualified long–term care insurance contract” also means the portion of a life insurance contract that provides long–term care insurance coverage by rider or as part of the contract and that satisfies the requirements of Sections 7702B(b) and (e) of the Internal Revenue Code of 1986.

ITEM 2. Amend rule 191—39.5(514G) by adopting the following new subrules:

39.5(7) “Activities of daily living” means at least bathing, continence, dressing, eating, toileting and transferring.

39.5(8) “Adult day care” means a program for six or more individuals of social and health–related services provided during the day in a community group setting for the purpose of supporting frail, impaired elderly or other disabled adults who can benefit from care in a group setting outside the home.

39.5(9) “Bathing” means washing oneself by sponge bath or in either a tub or shower, including the task of getting into or out of the tub or shower.

39.5(10) “Cognitive impairment” means a deficiency in a person’s short– or long–term memory, orientation as to person, place and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.

39.5(11) “Continence” means the ability to maintain control of bowel and bladder function or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene (including caring for catheter or colostomy bag).

39.5(12) “Dressing” means putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs.

39.5(13) “Eating” means feeding oneself by getting food into the body from a receptacle (such as a plate, cup or table) or by a feeding tube or intravenously.

39.5(14) “Exceptional increase” means only those increases filed by an insurer as exceptional for which the commissioner determines that the need for the premium rate increase is justified due to changes in laws or regulations applicable to long–term care coverage in this state or due to increased and unexpected utilization that affects the majority of insurers of similar products. Except as provided in rule 191— 39.28(514G), exceptional increases are subject to the same requirements as other premium rate schedule increases.

The commissioner may request a review by an independent actuary or a professional actuarial body of the basis for a request that an increase be considered an exceptional increase. The commissioner, in determining that the necessary basis for an exceptional increase exists, shall also determine any potential offsets to higher claims costs.

39.5(15) “Hands–on assistance” means physical assistance (minimal, moderate or maximal) without which the individual would not be able to perform the activities of daily living.

39.5(16) “Incidental,” as used in subrule 39.28(10), means that the value of the long–term care benefits provided is less than 10 percent of the total value of the benefits provided over the life of the policy. These values shall be measured as of the date of issue.

39.5(17) “Personal care” means the provision of hands–on services to assist an individual with activities of daily living.

39.5(18) “Qualified actuary” means a member in good standing of the American Academy of Actuaries.

39.5(19) “Similar policy forms” means all of the long–term care insurance policies and certificates issued by an insurer in the same long–term care benefit classification as the policy form being considered. Certificates of groups that meet the definition in Iowa Code section 514G.4(4) are not considered similar to certificates or policies otherwise issued as long–term care insurance, but are similar to other comparable certificates with the same long–term care benefit classifications. For purposes of determining similar policy forms, long–term care benefit classifications are defined as follows: institutional long–term care benefits only, noninstitutional long–term care benefits only, or comprehensive long–term care benefits.

39.5(20) “Toileting” means getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene.

39.5(21) “Transferring” means moving into or out of a bed, chair or wheelchair.

ITEM 3. Amend subrule 39.6(1) by adopting the following new paragraphs:

d. The term “level premium” may only be used when the insurer does not have the right to change the premium.

e. In addition to the other requirements of this subrule,a qualified long–term care insurance contract shall beguaranteed renewable, within the meaning of Section 7702B(b)(1)(C) of the Internal Revenue Code of 1986.

ITEM 4. Amend subrule 39.6(2) as follows:

39.6(2) Limitations and exclusions.

a. No policy may be delivered or issued for delivery in this state as long–term care insurance if such policy limits or excludes coverage by type of illness, treatment, medical condition or accident, except as follows:

a. (1) Preexisting conditions or disease;

b. (2) Mental or nervous disorders; (however, this shall not permit exclusion or limitation of benefits on the basis of Alzheimer’s disease or similar forms of irreversible dementia, nor limit coverage for Alzheimer’s disease to the skilled or intermediate level of care);

c. (3) Alcoholism and drug addiction;

d. (4) Illness, treatment or medical condition arising out of:

(1) 1. War or act of war (whether declared or undeclared);

(2) 2. Participation in a felony, riot or insurrection;

(3) 3. Service in the armed forces or units auxiliary thereto;

(4) 4. Attempted suicide (sane or insane), or intentional self–inflicted injury;

e. (5) Treatment provided in a government facility (unless otherwise required by law), services for which benefits are available under Medicare or other governmental program (except Medicaid), any state or federal workers’ compensation, employer’s liability or occupational disease law, or any motor vehicle no–fault law, services provided by a member of the covered person’s immediate family and services for which no charge is normally made in the absence of insurance.;

ITEM 5. Amend subrule 39.6(6) as follows:

39.6(6) Premiums.

a. The premiums charged to an insured for long–term care insurance shall not increase due to either:

a. (1) The increasing age of the insured at ages beyond 65; or

b. (2) The duration the insured has been covered under the policy.

ITEM 6. Adopt the following new subrule:

39.6(7) Electronic enrollment for group policies. In the case of a group defined in Iowa Code section 514G.4(4), any requirement that a signature of an insured be obtained by an agent or insurer shall be deemed satisfied if:

a. The consent is obtained by telephonic or electronic enrollment by the group policyholder or insurer. A verification of enrollment information shall be provided to the enrollee;

b. The telephonic or electronic enrollment provides necessary and reasonable safeguards to ensure the accuracy, retention and prompt retrieval of records; and

c. The telephonic or electronic enrollment provides necessary and reasonable safeguards to ensure that the confidentiality of individually identifiable information and privileged information is maintained.

The insurer shall make available, upon request of the commissioner, records that will demonstrate the insurer’s ability to confirm enrollment and coverage amounts.

ITEM 7. Amend rule 191—39.7(514G) as follows:

39.7(1) Renewability.

a. Individual long–term care insurance policies shall contain a renewability provision. Such provision shall be appropriately captioned, shall appear on the first page of the policy, and shall clearly state the duration of the term of coverage for which the policy is issued and for which it may be renewed. This provision shall not apply to policies which do not contain a renewability provision, and under which the right to nonrenew is reserved solely to the policyholder.

39.7(2) to 39.7(4) No change.

39.7(5 6) Disclosure of tax consequences. With regard to life insurance policies which provide an accelerated benefit for long–term care, a disclosure statement is required at the time of application for the policy or rider and at the time the accelerated benefit payment request is submitted that receipt of these accelerated benefits may be taxable, and that assistance should be sought from a personal tax advisor. The disclosure statement shall be prominently displayed on the first page of the policy or rider and any other related documents. This subrule shall not apply to qualified long–term care insurance contracts.

ITEM 8. Amend subrule 39.9(1) by adopting the following new paragraphs:

g. By excluding coverage for personal care services provided by a home health aide;

h. By requiring that the provision of home health care services be at a level of certification or licensure greater than that required by the eligible service;

i. By excluding coverage for adult day care services

ITEM 9. Amend rule 191—39.10(514D,514G) by adopting the following new subrules:

39.10(5) Inflation protection benefit increases under a policy which contains these benefits shall continue without regard to an insured’s age, claim status or claim history, or the length of time the person has been insured under the policy.

39.10(6) An offer of inflation protection that provides for automatic benefit increases shall include an offer of a premium which the insurer expects to remain constant. The offer shall disclose in a conspicuous manner that the premium may change in the future unless the premium is guaranteed to remain constant.

39.10(7) Inflation protection as provided in this subrule shall be included in a long–term care insurance policy unless an insurer obtains a rejection of inflation protection signed by the policyholder as required in this subrule. The rejection may be either in the application or on a separate form. The rejection shall be considered a part of the application and shall state:

I have reviewed the outline of coverage and the graphs that compare the benefits and premiums of this policy with and without inflation protection. Specifically, I have reviewed Plans ______, and I reject inflation protection.

ITEM 10. Amend rule 191—39.11(514D,514G) by adopting the following new subrule:

39.11(6) Life insurance policies that accelerate benefits for long–term care shall comply with this subrule if the policy being replaced is a long–term care insurance policy. If the policy being replaced is a life insurance policy, the insurer shall comply with the replacement requirements of 191— Chapter 16. If a life insurance policy that accelerates benefits for long–term care is replaced by another such policy, the replacing insurer shall comply with both the long–term care and the life insurance replacement requirements.

ITEM 11. Amend rule 191—39.13(514D) as follows:

39.13(2) Minimum loss ratio. Benefits under individual long–term care insurance policies shall be deemed reasonable in relation to premiums provided the expected loss ratio is at least 60 percent, calculated in a manner which provides for adequate reserving of the long–term care insurance risk. In evaluating the expected loss ratio, due consideration shall be given to all relevant factors, including:

1 a. Statistical credibility of incurred claims experience and earned premiums.

2 b. The period for which rates are computed to provide coverage.

3 c. Experienced and projected trends.

4 d. Concentration of experience within early policy duration.

5 e. Expected claim fluctuation.

6 f. Experience refunds, adjustments or dividends.

7 g. Renewability features.

8 h. All appropriate expense factors.

9 i. Interest.

10 j. Experimental nature of the coverage.

11 k. Policy reserves.

12 l. Mix of business by risk classification.

13 m. Product features such as long elimination periods, high deductibles and high maximum limits.

ITEM 12. Amend subrule 39.15(1) by adopting the following new paragraph:

h. Provide an explanation of contingent benefit upon lapse provided for in 39.29(6)“c.”

ITEM 13. Amend subrule 39.15(2) by adopting the following new paragraph:

d. Misrepresentation. Misrepresenting a material fact in selling or offering to sell a long–term care insurance policy.

ITEM 14. Amend rule 191—39.15(514D,514G) by adopting the following new subrule:

39.15(3) Association marketing.

a. When a group long–term care insurance policy is issued to an association or a trust or the trustees of a fund established, created or maintained for the benefit of members of one or more associations, the association or associations or the insurer of the association or associations shall, prior to advertising, marketing or offering the policy within this state, file evidence with the commissioner that the association or associations have at the outset a minimum of 100 persons and have been organized and maintained in good faith for purposes other than that of obtaining insurance; have been in active existence for at least one year; and have a constitution and bylaws that provide that:

(1) The association or associations hold regular meetings not less than annually to further purposes of the members;

(2) Except for credit unions, the association or associations collect dues or solicit contributions from members; and

(3) The members have voting privileges and representation on the governing board and committees.

Thirty days after the filing, the association or associations will be deemed to satisfy the organizational requirements, unless the commissioner makes a finding that the association or associations do not satisfy those organizational requirements.

b. When a professional, trade, or occupational association is issued a group long–term care policy for its members or retired members or combination thereof, the association shall have as its primary responsibility, when endorsing or selling long–term care insurance, to educate its members concerning long–term care issues in general so that its members can make informed decisions. Associations shall provide objective information regarding long–term care insurance policies or certificates endorsed or sold by such associations to ensure that members of such associations receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or sold.

(1) The insurer shall file with the insurance division the following material:

1. The policy and certificate;

2. A corresponding outline of coverage; and

3. All advertisements requested by the insurance division.

(2) The association shall disclose in any long–term care insurance solicitation the specific nature and amount of the compensation arrangements (including all fees, commissions, administrative fees and other forms of financial support) that the association receives from endorsement or sale of the policy or certificate to its members; and a brief description of the process under which the policies and the insurer issuing the policies were selected.

(3) If the association and the insurer have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members.

(4) The board of directors of associations selling or endorsing long–term care insurance policies or certificates shall review and approve the insurance policies as well as the compensation arrangements made with the insurer.

(5) The association shall also:

1. At the time of the association’s decision to endorse, engage the services of a person with expertise in long–term care insurance who is not affiliated with the insurer to conduct an examination of the policies, including its benefits, features, and rates and update the examination thereafter in the event of material change;

2. Actively monitor the marketing efforts of the insurer and its agents; and

3. Review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policies or certificates.

Numbered paragraphs “1” through “3” shall not apply to qualified long–term care insurance contracts.

(6) No group long–term care insurance policy or certificate may be issued to an association unless the insurer files with the insurance division the information required in this subrule.

(7) The insurer shall not issue a long–term care policy or certificate to an association or continue to market such a policy or certificate unless the insurer certifies annually that the association has complied with the requirements set forth in this subrule.

(8) Failure to comply with the filing and certification requirements of this subrule constitutes an unfair trade practice in violation of Iowa Code chapter 507B.

ITEM 15. Rescind rule 191—39.16(514D,514G) and adopt the following new rule in lieu thereof:

39.16(1) This rule shall not apply to life insurance policies that accelerate benefits for long–term care.

39.16(2) Every insurer, health care service plan or other entity marketing long–term care insurance (the “issuer”) shall:

a. Develop and use suitability standards to determine whether the purchase or replacement of long–term care insurance is appropriate for the needs of the applicant;

b. Train its agents in the use of its suitability standards; and

c. Maintain a copy of its suitability standards and make it available for inspection upon request by the commissioner.

39.16(3) To determine whether the applicant meets the standards developed by the issuer, the agent and issuer shall develop procedures that take into consideration the following:

a. The ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage;

b. The applicant’s goals or needs with respect to long–term care and the advantages and disadvantages of insurance to meet these goals or needs; and

c. The values, benefits and costs of the applicant’s existing insurance, if any, when compared to the values, benefits and costs of the recommended purchase or replacement.

39.16(4) The issuer, and, when an agent is involved, the agent, shall make reasonable efforts to obtain the information set out in subrule 39.16(3). The efforts shall include presentation of the “Long–Term Care Insurance Personal Worksheet” to the applicant, at the time of or prior to application. The personal worksheet used by the issuer shall contain, at a minimum, the information in the format contained in Appendix B, in not less than 12–point type. The issuer may request the applicant to provide additional information to comply with its suitability standards. A copy of the issuer’s personal worksheet shall be filed with the commissioner.

A completed personal worksheet shall be returned to the issuer prior to the issuer’s consideration of the applicant for coverage, except the personal worksheet need not be returned for sales of employer group long–term care insurance to employees and their spouses.

The sale or dissemination outside the company or agency by the issuer or agent of information obtained through the personal worksheet in Appendix B is prohibited.

39.16(5) The issuer shall use the suitability standards it has developed pursuant to this rule in determining whether issuing long–term care insurance coverage to an applicant is appropriate.

39.16(6) Agents shall use the suitability standards developed by the issuer in marketing long–term care insurance.

39.16(7) At the same time as the personal worksheet is provided to the applicant, the disclosure form entitled “Things You Should Know Before You Buy Long–Term Care Insurance” shall be provided. The form shall be in the format contained in Appendix C, in not less than 12–point type.

39.16(8) If the issuer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the issuer may reject the application. In the alternative, the issuer shall send the applicant a letter similar to Appendix D. However, if the applicant has declined to provide financial information, the issuer may use some other method to verify the applicant’s intent. Either the applicant’s returned letter or a record of the alternative method of verification shall be made part of the applicant’s file.

39.16(9) The issuer shall report annually to the commissioner the total number of applications received from residents of this state, the number of applicants who declined to provide information on the personal worksheet, the number of applicants who did not meet the suitability standards, and the number of applicants who chose to confirm after receiving a suitability letter.

ITEM 16. Rescind subrule 39.18(9) and adopt the following new subrule in lieu thereof:

39.18(9) Format for outline of coverage:

[COMPANY NAME]

[ADDRESS — CITY & STATE]

[TELEPHONE NUMBER]

LONG–TERM CARE INSURANCE

OUTLINE OF COVERAGE

[Policy Number or Group Master Policy
and Certificate Number]

[Except for policies or certificates which are guaranteed issue, the following caution statement, or substantially similar language, must appear as follows in the outline of coverage.]

Caution: The issuance of this long–term care insurance [policy] [certificate] is based upon your responses to the questions on your application. A copy of your [application] [enrollment form] [is enclosed] [was retained by you when you applied]. If your answers are incorrect or untrue, the company has the right to deny benefits or rescind your policy. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incorrect, contact the company at this address: [insert address]

1. This policy is [an individual policy of insurance] [[a group policy] which was issued in the [indicate jurisdiction in which group policy was issued]].

2. PURPOSE OF OUTLINE OF COVERAGE. This outline of coverage provides a very brief description of the important features of the policy. You should compare this outline of coverage to outlines of coverage for other policies available to you. This is not an insurance contract, but only a summary of coverage. Only the individual or group policy contains governing contractual provisions. This means that the policy or group policy sets forth in detail the rights and obligations of both you and the insurance company. Therefore, if you purchase this coverage, or any other coverage, it is important that you READ YOUR POLICY (OR CERTIFICATE) CAREFULLY!

3. FEDERAL TAX CONSEQUENCES.

This [POLICY] [CERTIFICATE] is intended to be a federally tax–qualified long–term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986.

OR

Federal Tax Implications of this [POLICY] [CERTIFICATE]. This [POLICY] [CERTIFICATE] is not intended to be a federally tax–qualified long–term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986. Benefits received under the [POLICY] [CERTIFICATE] may be taxable as income.

4. TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE CONTINUED IN FORCE OR DISCONTINUED.

(a) [For long–term care health insurance policies or certificates describe one of the following permissible policy renewability provisions:

(1) Policies and certificates that are guaranteed renewable shall contain the following statement:] RENEWABILITY: THIS [POLICY] [CERTIFICATE] IS GUARANTEED RENEWABLE. This means you have the right, subject to the terms of your [policy] [certificate], to continue this policy as long as you pay your premiums on time. [Company Name] cannot change any of the terms of your policy on its own, except that, in the future, IT MAY INCREASE THE PREMIUM YOU PAY.

(2) [Policies and certificates that are noncancellable shall contain the following statement:] RENEWABILITY: THIS [POLICY] [CERTIFICATE] IS NONCANCELLABLE. This means that you have the right, subject to the terms of your policy, to continue this policy as long as you pay your premiums on time. [Company Name] cannot change any of the terms of your policy on its own and cannot change the premium you currently pay. However, if your policy contains an inflation protection feature where you choose to increase your benefits, [Company Name] may increase your premium at that time for those additional benefits.

(b) [For group coverage, specifically describe continuation/conversion provisions applicable to the certificate and group policy;]

(c) [Describe waiver of premium provisions or state that there are not such provisions.]

5. TERMS UNDER WHICH THE COMPANY MAY CHANGE PREMIUMS.

[In bold type larger than the maximum type required to be used for the other provisions of the outline of coverage, state whether or not the company has a right to change the premium and, if a right exists, describe clearly and concisely each circumstance under which the premium may change.]

6. TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE RETURNED AND PREMIUM REFUNDED.

(a) [Provide a brief description of the right to return— “free look” provision of the policy.]

(b) [Include a statement that the policy either does or does not contain provisions providing for a refund or partial refund of premium upon the death of an insured or surrender of the policy or certificate. If the policy contains such provisions, include a description of them.]

7. THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are eligible for Medicare, review the Medicare Supplement Buyer’s Guide available from the insurance company.

(a) [For agents] Neither [insert company name] nor its agents represent Medicare, the federal government or any state government.

(b) [For direct response] [insert company name] is not representing Medicare, the federal government or any state government.

8. LONG–TERM CARE COVERAGE. Policies of this category are designed to provide coverage for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital, such as in a nursing home, in the community or in the home.

This policy provides coverage in the form of a fixed dollar indemnity benefit for covered long–term care expenses, subject to policy [limitations] [waiting periods] and [coinsurance] requirements. [Modify this paragraph if the policy is not an indemnity policy.]

9. BENEFITS PROVIDED BY THIS POLICY.

(a) [Covered services, related deductibles, waiting periods, elimination periods and benefit maximums.]

(b) [Institutional benefits, by skill level.]

(c) [Noninstitutional benefits, by skill level.]

(d) Eligibility for Payment of Benefits

[Activities of daily living and cognitive impairment shall be used to measure an insured’s need for long–term care and must be defined and described as part of the outline of coverage.]

[Any additional benefit triggers must also be explained. If these triggers differ for different benefits, explanation of the triggers should accompany each benefit description. If an attending physician or other specified person must certify a certain level of the insured’s functional dependency in order for the insured to be eligible for benefits, this too must be specified.]

10. LIMITATIONS AND EXCLUSIONS.

[Describe:

(a) Preexisting conditions;

(b) Noneligible facilities and provider;

(c) Noneligible levels of care (e.g., unlicensed providers, care or treatment provided by a family member, etc.);

(d) Exclusions and exceptions;

(e) Limitations.]

[This section should provide a brief, specific description of any policy provisions which limit, exclude, restrict, reduce, delay, or in any other manner operate to qualify payment of the benefits described in “6” above.]

THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH YOUR LONG–TERM CARE NEEDS.

11. RELATIONSHIP OF COST OF CARE AND BENEFITS. Because the costs of long–term care services will likely increase over time, you should consider whether and how the benefits of this plan may be adjusted. [As applicable, indicate the following:

(a) That the benefit level will not increase over time;

(b) Any automatic benefit adjustment provisions;

(c) Whether the insured will be guaranteed the option to buy additional benefits and the basis upon which benefits will be increased over time if not by a specified amount or percentage;

(d) If there is such a guarantee, include whether additional underwriting or health screening will be required, the frequency and amounts of the upgrade options, and any significant restrictions or limitations;

(e) And finally, describe whether there will be any additional premium charge imposed, and how that is to be calculated.]

12. ALZHEIMER’S DISEASE AND OTHER ORGANIC BRAIN DISORDERS.

[State that the policy provides coverage for insureds clinically diagnosed as having Alzheimer’s disease or related degenerative and dementing illnesses. Specifically describe each benefit screen or other policy provision which provides preconditions to the availability of policy benefits for such an insured.]

13. PREMIUM.

[(a) State the total annual premium for the policy;

(b) If the premium varies with an applicant’s choice among benefit options, indicate the portion of annual premium which corresponds to each benefit option.]

14. ADDITIONAL FEATURES.

[(a) Indicate if medical underwriting is used;

(b) Describe other important features.]

15. CONTACT THE STATE SENIOR HEALTH INSURANCE ASSISTANCE PROGRAM (800–351–4664) IF YOU HAVE GENERAL QUESTIONS REGARDING LONG–TERM CARE INSURANCE. CONTACT THE INSURANCE COMPANY IF YOU HAVE SPECIFIC QUESTIONS REGARDING YOUR LONG–TERM CARE INSURANCE POLICY OR CERTIFICATE.

ITEM 17. Amend rule 191—39.19(514G) as follows:

39.19(1) A long–term care insurance shopper’s guide in the format developed by the National Association of Insurance Commissioners, the Blue Cross and Blue Shield Association or, the Health Insurance Association of America or the senior health insurance information program of the insurance division shall be provided to all prospective applicants of a long–term care insurance policy or certificate or life insurance policy or certificate that includes a long–term care rider.

1 a. In the case of agent solicitations, an agent must deliver the shopper’s guide to the applicant at the time of application.

2 b. In the case of direct response solicitations, the shopper’s guide must be presented to the applicant at the time the policy is delivered.

ITEM 18. Amend rule 191—39.20(514G) as follows:

39.20(2) At the time of policy delivery, a policy summary shall be delivered for an individual life insurance policy which provides long–term care benefits within the policy or by rider. In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant’s request, but regardless of request shall make such delivery no later than at the time of policy delivery. In addition to complying with all applicable requirements, the summary shall also include:

1 a. An explanation of how the long–term care benefit interacts with other components of the policy, including deductions from death benefits;

2 b. An illustration of the amount of benefits, the length of benefit, and the guaranteed lifetime benefits, if any, for each covered person;

3 c. Any exclusions, reductions, and limitations on benefits of long–term care; and

4 d. If applicable to the policy type, the summary shall also include a disclosure of the effects of exercising other rights under the policy, a disclosure of guarantees related to long–term care costs of insurance charges, and current and projected maximum lifetime benefits. ;

ITEM 19. Amend 191—Chapter 39 by adopting the following new rules:

191—39.23(514G) Denial of claims. If a claim under a long–term care insurance contract is denied, the issuer shall, within 60 days of the date of a written request by the policyholder or certificate holder, or a representative thereof, provide a written explanation of the reasons for the denial; and make available all information directly related to the denial.

39.24(1) For a policy or certificate that has been in force for less than six months, an insurer may rescind a long–term care insurance policy or certificate or deny an otherwise valid long–term care insurance claim upon a showing of misrepresentation that is material to the acceptance for coverage.

39.24(2) For a policy or certificate that has been in force for at least six months but less than two years, an insurer may rescind a long–term care insurance policy or certificate or deny an otherwise valid long–term care insurance claim upon a showing of misrepresentation that is both material to the acceptance for coverage and which pertains to the condition for which benefits are sought.

39.24(3) After a policy or certificate has been in force for two years, it is not contestable upon the grounds of misrepresentation alone; such policy or certificate may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured’s health.

39.24(4) No long–term care insurance policy or certificate may be field–issued based on medical or health status. For purposes of this subrule, “field–issued” means a policy or certificate issued by an agent or a third–party administrator pursuant to the underwriting authority granted to the agent or third–party administrator by an insurer.

39.24(5) If an insurer has paid benefits under the long–term care insurance policy or certificate, the benefit payments may not be recovered by the insurer in the event that the policy or certificate is rescinded.

39.24(6) In the event of the death of the insured, this rule shall not apply to the remaining death benefit of a life insurance policy that accelerates benefits for long–term care. In this situation, the remaining death benefits under these policies shall be governed by Iowa Code section 508.28. In all other situations, this rule shall apply to life insurance policies that accelerate benefits for long–term care.

39.25(1) Applicability. This rule applies to any new long–term care policy or certificate issued in this state on or after January 1, 2003. For certificates issued under a group long–term care insurance policy which policy was in force prior to January 1, 2003, the provisions of this rule shall apply on the policy anniversary following January 1, 2003.

39.25(2) Contents of disclosure. Other than policies for which no applicable premium rate or rate schedule increases can be made, insurers shall provide all of the information listed in this subrule to the applicant at the time of application or enrollment, unless the method of application does not allow for delivery at that time. In such a case, an insurer shall provide all of the information listed in this subrule to the applicant no later than at the time of delivery of the policy or certificate.

a. A statement that the policy may be subject to rate increases in the future;

b. An explanation of potential future premium rate revisions, and the policyholder’s or certificate holder’s option in the event of a premium rate revision;

c. The premium rate or rate schedules applicable to the applicant that will be in effect until a request is made for an increase;

d. A general explanation for applying premium rate or rate schedule adjustments that shall include:

(1) A description of when premium rate or rate schedule adjustments will be effective (e.g., next anniversary date, next billing date, etc.); and

(2) The right to a revised premium rate or rate schedule as provided in paragraph 39.25(2)“c” if the premium rate or rate schedule is changed;

e. Information regarding each premium rate increase on this policy form or similar policy forms over the past ten years for this state or any other state.

(1) The following, at a minimum, shall be included:

1. The policy forms for which premium rates have been increased;

2. The calendar years when the form was available for purchase; and

3. The amount or percent of each increase. The percentage may be expressed as a percentage of the premium rate prior to the increase, and may also be expressed as minimum and maximum percentages if the rate increase is variable by rating characteristics.

(2) The insurer may, in a fair manner, provide additional explanatory information related to the rate increases.

(3) An insurer shall have the right to exclude from the disclosure premium rate increases that only apply to blocks of business acquired from other nonaffiliated insurers or the long–term care policies acquired from other nonaffiliated insurers when those increases occurred prior to the acquisition.

(4) If an acquiring insurer files for a rate increase on a long–term care policy form acquired from nonaffiliated insurers or on a block of policy forms acquired from nonaffiliated insurers on or before the later of the effective date of this subrule or the end of a 24–month period following the acquisition of the block or policies, the acquiring insurer may exclude that rate increase from the disclosure. However, the nonaffiliated selling company shall include the disclosure of that rate increase in accordance with paragraph “e.”

(5) If the acquiring insurer in subparagraph (4) above files for a subsequent rate increase, even within the 24–month period, on the same policy form acquired from nonaffiliated insurers or block of policy forms acquired from nonaffiliated insurers referenced in subparagraph (4), the acquiring insurer shall make all disclosures required by paragraph “e,” including disclosure of the earlier rate increase referenced in subparagraph (4).

39.25(3) Acknowledgment. An applicant shall sign an acknowledgment at the time of application, unless the method of application does not allow for signature at that time, that the insurer made the disclosure required under 39.25(2)“a” and 39.25(2)“e.” If due to the method of application the applicant cannot sign an acknowledgment at the time of application, the applicant shall sign no later than at the time of delivery of the policy or certificate.

39.25(4) Required format. An insurer shall use the forms in Appendices B and F to comply with the requirements of this rule.

39.25(5) Notice of rate increase. An insurer shall provide notice of an upcoming premium rate schedule increase to all policyholders or certificate holders, if applicable, at least 45 days prior to the implementation of the premium rate schedule increase by the insurer. The notice shall include the information required by subrule 39.25(2) when the rate increase is implemented.

39.26(1) Effective date. This rule applies to any long–term care policy issued in this state on or after January 1, 2003.

39.26(2) Required filing. An insurer shall provide the information listed in this subrule to the commissioner 30 days prior to making a long–term care insurance form available for sale.

a. A copy of the disclosure documents required in rule 191—39.25(514G); and

b. An actuarial certification consisting of at least the following:

(1) A statement that the initial premium rate schedule is sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated;

(2) A statement that the policy design and coverage provided have been reviewed and taken into consideration;

(3) A statement that the underwriting and claims adjudication processes have been reviewed and taken into consideration;

(4) A complete description of the basis for contract reserves that are anticipated to be held under the form, to include:

1. Sufficient detail or sample calculations provided so as to have a complete depiction of the reserve amounts to be held;

2. A statement that the assumptions used for reserves contain reasonable margins for adverse experience;

3. A statement that the net valuation premium for renewal years does not increase (except for attained–age rating where permitted); and

4. A statement that the difference between the gross premium and the net valuation premium for renewal years is sufficient to cover expected renewal expenses; or if such a statement cannot be made, a complete description of the situations where this does not occur;

• An aggregate distribution of anticipated issues may be used as long as the underlying gross premiums maintain a reasonably consistent relationship;

• If the gross premiums for certain age groups appear to be inconsistent with this requirement, the commissioner may request a demonstration under subrule 39.26(3) based on a standard age distribution; and

(5) A statement that the premium rate schedule is not less than the premium rate schedule for existing similar policy forms also available from the insurer except for reasonable differences attributable to benefits; or a comparison of the premium schedules for similar policy forms that are currently available from the insurer with an explanation of the differences.

39.26(3) Demonstration on request.

a. The commissioner may request an actuarial demonstration that benefits are reasonable in relation to premiums. The actuarial demonstration shall include either premium and claim experience on similar policy forms, adjusted for any premium or benefit differences, relevant and credible data from other studies, or both.

b. In the event the commissioner asks for additional information under this provision, the period in subrule 39.26(2) does not include the period during which the insurer is preparing the requested information.

39.27(1) Every insurer shall maintain for each agent rec–ords of that agent’s amount of replacement sales as a percent of the agent’s total annual sales and the amount of lapses of long–term care insurance policies sold by the agent as a percent of the agent’s total annual sales.

39.27(2) Every insurer shall report annually by June 30 the 10 percent of its agents with the greatest percentages of lapses and replacements as measured by subrule 39.27(1) in the format prescribed in Appendix G.

39.27(3) Reported replacement and lapse rates do not alone constitute a violation of insurance laws or necessarily imply wrongdoing. The reports are for the purpose of reviewing more closely agent activities regarding the sale of long–term care insurance.

39.27(4) Every insurer shall report annually by June 30 the number of lapsed policies as a percent of its total annual sales and as a percent of its total number of policies in force as of the end of the preceding calendar year in the format prescribed in Appendix G.

39.27(5) Every insurer shall report annually by June 30 the number of replacement policies sold as a percent of its total annual sales and as a percent of its total number of policies in force as of the preceding calendar year in the format prescribed in Appendix G.

39.27(6) Every insurer shall report annually by June 30, for qualified long–term care insurance contracts, the number of claims denied for each class of business, expressed as a percentage of claims denied in the format prescribed in Appendix E.

39.27(7) For purposes of rule 191—39.27(514G):

a. “Policy” means only long–term care insurance;

b. Subject to paragraph “c” below, “claim” means a request for payment of benefits under an in–force policy regardless of whether the benefit claimed is covered under the policy or any terms or conditions of the policy have been met;

c. “Denied” means the insurer refuses to pay a claim for any reason other than for claims not paid for failure to meet the waiting period or because of an applicable preexisting condition; and

d. “Report” means on a statewide basis.

39.27(8) Reports required under this rule shall be filed with the commissioner. The first reports under this rule are due June 30, 2004.

39.28(1) This rule applies to any long–term care policy or certificate issued in this state on or after January 1, 2003. For certificates issued under a group long–term care insurance policy which policy was in force on January 1, 2003, the provisions of this rule shall apply on the policy anniversary following July 1, 2003.

39.28(2) An insurer shall provide notice of a pending premium rate schedule increase, including an exceptional increase, to the commissioner at least 30 days prior to the notice to the policyholders and shall include:

a. Information required by rule 191—39.25(514G);

b. Certification by a qualified actuary that:

(1) If the requested premium rate schedule increase is implemented and the underlying assumptions, which reflect moderately adverse conditions, are realized, no further premium rate schedule increases are anticipated;

(2) The premium rate filing is in compliance with the provisions of this rule;

c. An actuarial memorandum justifying the rate schedule change request that includes:

(1) Lifetime projections of earned premiums and incurred claims based on the filed premium rate schedule increase; and the method and assumptions used in determining the projected values, including reflection of any assumptions that deviate from those used for pricing other forms currently available for sale;

1. Annual values for the five years preceding and the three years following the valuation date shall be provided separately;

2. The projections shall include the development of the lifetime loss ratio, unless the rate increase is an exceptional increase;

3. The projections shall demonstrate compliance with subrule 39.28(3); and

4. For exceptional increases,

• The projected experience should be limited to the increases in claims expenses attributable to the approved reasons for the exceptional increase; and

• In the event the commissioner determines that offsets may exist, the insurer shall use appropriate net projected experience;

(2) Disclosure of how reserves have been incorporated in this rate increase whenever the rate increase will trigger contingent benefit upon lapse;

(3) Disclosure of the analysis performed to determine why a rate adjustment is necessary, which pricing assumptions were not realized and why, and what other actions taken by the company have been relied on by the actuary;

(4) A statement that policy design, underwriting and claims adjudication practices have been taken into consideration; and

(5) In the event that it is necessary to maintain consistent premium rates for new certificates and certificates receiving a rate increase, the insurer will need to file composite rates reflecting projections of new certificates;

d. A statement that renewal premium rate schedules are not greater than new business premium rate schedules except for differences attributable to benefits, unless sufficient justification is provided to the commissioner; and

e. Sufficient information for review of the premium rate schedule increase by the commissioner.

39.28(3) All premium rate schedule increases shall be determined in accordance with the following requirements:

a. Exceptional increases shall provide that 70 percent of the present value of projected additional premiums from the exceptional increase will be returned to policyholders in benefits;

b. Premium rate schedule increases shall be calculated such that the sum of the accumulated value of incurred claims, without the inclusion of active life reserves, and the present value of future projected incurred claims, without the inclusion of active life reserves, will not be less than the sum of the following:

(1) The accumulated value of the initial earned premium multiplied by 58 percent;

(2) Eighty–five percent of the accumulated value of prior premium rate schedule increases on an earned basis;

(3) The present value of future projected initial earned premiums multiplied by 58 percent; and

(4) Eighty–five percent of the present value of future projected premiums not in subparagraph (3) above on an earned basis;

c. In the event that a policy form has both exceptional and other increases, the values in subparagraphs 39.28(3)“b”(2) and (4) will also include 70 percent for exceptional rate increase amounts; and

d. All present and accumulated values used to determine rate increases shall use the maximum valuation interest rate for contract reserves as recommended by the NAIC Financial Examiners Handbook. The actuary shall disclose as part of the actuarial memorandum the use of any appropriate averages.

39.28(4) For each rate increase that is implemented, the insurer shall file for review by the commissioner updated projections, as defined in subparagraph 39.28(2)“c”(1), annually for the next three years and include a comparison of actual results to projected values. The commissioner may extend the period to greater than three years if actual results are not consistent with projected values from prior projections. For group insurance policies that meet the conditions in subrule 39.28(11), the projections required by this subrule shall be provided to the policyholder in lieu of filing with the commissioner.

39.28(5) If any premium rate in the revised premium rate schedule is greater than 200 percent of the comparable rate in the initial premium schedule, lifetime projections, as defined in subparagraph 39.28(2)“c”(1), shall be filed for review by the commissioner every five years following the end of the required period in subrule 39.28(4). For group insurance policies that meet the conditions in subrule 39.28(11), the projections required by this paragraph shall be provided to the policyholder in lieu of filing with the commissioner.

39.28(6) If the commissioner has determined that the actual experience following a rate increase does not adequately match the projected experience and that the current projections under moderately adverse conditions demonstrate that incurred claims will not exceed proportions of premiums specified in subrule 39.28(3), the commissioner may require the insurer to implement any of the following:

a. Premium rate schedule adjustments; or

b. Other measures to reduce the difference between the projected and actual experience.

In determining whether the actual experience adequately matches the projected experience, consideration should be given to subparagraph 39.28(2)“c”(5), if applicable.

39.28(7) If the majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse, the insurer shall file:

a. A plan, subject to commissioner approval, for improved administration or claims processing designed to eliminate the potential for further deterioration of the policy form requiring further premium rate schedule increases, or both, or to demonstrate that appropriate administration and claims processing have been implemented or are in effect; otherwise the commissioner may impose the condition in subrule 39.28(8); and

b. The original anticipated lifetime loss ratio, and the premium rate schedule increase that would have been calculated according to subrule 39.28(3) had the greater of the original anticipated lifetime loss ratio or 58 percent been used in the calculations described in subparagraphs 39.28(3)“b”(1) and (3).

39.28(8) Review of lapse rates.

a. For a rate increase filing that meets the following criteria, the commissioner shall review, for all policies included in the filing, the projected lapse rates and past lapse rates during the 12 months following each increase to determine if significant adverse lapsation has occurred or is anticipated:

(1) The rate increase is not the first rate increase requested for the specific policy form or forms;

(2) The rate increase is not an exceptional increase; and

(3) The majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse.

b. In the event significant adverse lapsation has occurred, is anticipated in the filing or is evidenced in the actual results as presented in the updated projections provided by the insurer following the requested rate increase, the commissioner may determine that a rate spiral exists. Following the determination that a rate spiral exists, the commissioner may require the insurer to offer, without underwriting, to all in–force insureds subject to the rate increase the option to replace existing coverage with one or more reasonably comparable products being offered by the insurer or its affiliates.

(1) The offer shall:

1. Be subject to the approval of the commissioner;

2. Be based on actuarially sound principles, but not be based on attained age; and

3. Provide that maximum benefits under any new policy accepted by an insured shall be reduced by comparable benefits already paid under the existing policy.

(2) The insurer shall maintain the experience of all the replacement insureds separate from the experience of insureds originally issued the policy forms. In the event of a request for a rate increase on the policy form, the rate increase shall be limited to the lesser of:

1. The maximum rate increase determined based on the combined experience; and

2. The maximum rate increase determined based only on the experience of the insureds originally issued the form plus 10 percent.

39.28(9) If the commissioner determines that the insurer has exhibited a persistent practice of filing inadequate initial premium rates for long–term care insurance, the commissioner may, in addition to the provisions of subrule 39.28(8), prohibit the insurer from either of the following:

a. Filing and marketing comparable coverage for a period of up to 5 years; or

b. Offering all other similar coverages and limiting marketing of new applications to the products subject to recent premium rate schedule increases.

39.28(10) Subrules 39.28(1) through 39.28(9) shall not apply to policies for which the long–term care benefits provided by the policy are incidental, as defined in subrule 39.5(16), if the policy complies with all of the following provisions:

a. The interest credited internally to determine cash value accumulations, including long–term care, if any, is guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long–term care set forth in the policy;

b. The portion of the policy that provides insurance benefits other than long–term care coverage meets the nonforfeiture requirements as applicable in any of the following:

(1) Iowa Code section 508.37, regarding nonforfeiture standards for life insurance;

(2) Iowa Code section 508.38, regarding nonforfeiture standards for individual deferred annuities; and

(3) Iowa Code section 508A.5 and 191—subrule 31.3(8), regarding variable annuities;

c. The policy meets the disclosure requirements of rules 191—39.20(514G) and 191—39.21(514G);

d. The portion of the policy that provides insurance benefits other than long–term care coverage meets the requirements as applicable in the following:

(1) Policy illustrations as required by 191—Chapter 14;

(2) Disclosure requirements for annuities as required by the commissioner; and

(3) Disclosure requirements for variable annuities as required by 191—Chapter 31;

e. An actuarial memorandum is filed with the insurance division that includes:

(1) A description of the basis on which the long–term care rates were determined;

(2) A description of the basis for the reserves;

(3) A summary of the type of policy, benefits, renewability, general marketing method, and limits on ages of issuance;

(4) A description and a table of each actuarial assumption used. For expenses, an insurer must include percent of premium dollars per policy and dollars per unit of benefits, if any;

(5) A description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives;

(6) The estimated average annual premium per policy and the average issue age;

(7) A statement as to whether underwriting is performed at the time of application. The statement shall indicate whether underwriting is used and, if underwriting is used, the statement shall include a description of the type or types of underwriting used, such as medical underwriting or functional assessment underwriting. Concerning a group policy, the statement shall indicate whether the enrollee or any dependent will be underwritten and when underwriting occurs; and

(8) A description of the effect of the long–term care policy provision on the required premiums, nonforfeiture values and reserves on the underlying insurance policy, both for active lives and those in long–term care claim status.

39.28(11) Subrules 39.28(6) and 39.28(8) shall not apply to group insurance policies where:

a. The policies insure 250 or more persons and the policyholder has 5,000 or more eligible employees of a single employer; or

b. The policyholder, and not the certificate holders, pays a material portion of the premium, which shall not be less than 20 percent of the total premium for the group in the calendar year prior to the year a rate increase is filed.

39.29(1) Except as provided in subrule 39.29(2), a long–term care insurance policy may not be delivered or issued for delivery in this state unless the policyholder or certificate holder has been offered the option of purchasing a policy or certificate including a nonforfeiture benefit. The offer of a nonforfeiture benefit may be in the form of a rider that is attached to the policy. In the event the policyholder or certificate holder declines the nonforfeiture benefit, the insurer shall provide a contingent benefit upon lapse that shall be available for a specified period of time following a substantial increase in premium rates.

39.29(2) When a group long–term care insurance policy is issued to a group defined in Iowa Code section 514G.4(4)“d,” the offer required in subrule 39.29(1) shall be made to the group policyholder. However, if the policy is issued as group long–term care insurance, other than to a continuing care retirement community or other similar entity, the offering shall be made to each proposed certificate holder.

39.29(3) This rule does not apply to life insurance policies or riders containing accelerated long–term care benefits.

39.29(4) To comply with the requirement to offer a nonforfeiture benefit pursuant to the provisions of subrule 39.29(1):

a. A policy or certificate offered with nonforfeiture benefits shall have coverage elements, eligibility, benefit triggers and benefit length that are the same as coverage to be issued without nonforfeiture benefits. The nonforfeiture benefit included in the offer shall be the benefit described in subrule 39.29(7); and

b. The offer shall be in writing if the nonforfeiture benefit is not otherwise described in the outline of coverage or other materials given to the prospective policyholder.

39.29(5) If the offer required to be made under subrule 39.29(1) is rejected, the insurer shall provide the contingent benefit upon lapse described in this rule.

39.29(6) Benefit triggers.

a. After rejection of the offer required under subrule 39.29(1), for individual and group policies without nonforfeiture benefits issued after January 1, 2003, the insurer shall provide a contingent benefit upon lapse.

b. In the event a group policyholder elects to make the nonforfeiture benefit an option to the certificate holder, a certificate shall provide either the nonforfeiture benefit or the contingent benefit upon lapse.

c. The contingent benefit upon lapse shall be triggered every time an insurer increases the premium rates to a level which results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured’s initial annual premium set forth below based on the insured’s issue age, and the policy or certificate lapses within 120 days of the due date of the premium so increased. Unless otherwise required, policyholders shall be notified at least 30 days prior to the due date of the premium reflecting the rate increase.

d. On or before the effective date of a substantial premium increase as defined in paragraph 39.29(6)“c,” the insurer shall:

(1) Offer to reduce policy benefits provided by the current coverage without the requirement of additional underwriting so that required premium payments are not increased;

(2) Offer to convert the coverage to a paid–up status with a shortened benefit period in accordance with the terms of subrule 39.29(7). This option may be elected at any time during the 120–day period referenced in paragraph 39.29(6)“c”; and

(3) Notify the policyholder or certificate holder that a default or lapse at any time during the 120–day period referenced in paragraph 39.29(6)“c” shall be deemed to be the election of the offer to convert in subparagraph (2) above.

39.29(7) Benefits continued as nonforfeiture benefits, including contingent benefits upon lapse, are described in this subrule.

a. For purposes of this subrule, attained age rating is defined as a schedule of premiums starting from the issue date which increases age at least 1 percent per year prior to age 50, and at least 3 percent per year beyond age 50.

b. For purposes of this subrule, the nonforfeiture benefit shall be of a shortened benefit period providing paid–up long–term care insurance coverage after lapse. The same benefits (amounts and frequency in effect at the time of lapse but not increased thereafter) will be payable for a qualifying claim, but the lifetime maximum dollars or days of benefits shall be determined as specified in paragraph “c.”

c. The standard nonforfeiture credit will be equal to 100 percent of the sum of all premiums paid, including the premiums paid prior to any changes in benefits. The insurer may offer additional shortened benefit period options, as long as the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration. However, the minimum nonforfeiture credit shall not be less than 30 times the daily nursing home benefit at the time of lapse. In either event, the calculation of the nonforfeiture credit is subject to the limitation of subrule 39.29(8).

d. Benefit dates.

(1) The nonforfeiture benefit shall begin not later than the end of the third year following the policy or certificate issue date. The contingent benefit upon lapse shall be effective during the first three years as well as thereafter.

(2) Notwithstanding subparagraph (1), for a policy or certificate with attained age rating, the nonforfeiture benefit shall begin on the earlier of:

1. The end of the tenth year following the policy or certificate issue date; or

2. The end of the second year following the date the policy or certificate is no longer subject to attained age rating.

e. Nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.

39.29(8) All benefits paid by the insurer while the policy or certificate is in premium–paying status and in paid–up status will not exceed the maximum benefits which would be payable if the policy or certificate had remained in premium–paying status.

39.29(9) There shall be no difference in the minimum nonforfeiture benefits as required under this rule for group and individual policies.

39.29(10) The requirements set forth in this rule shall become effective July 1, 2003, and shall apply as follows:

a. Except as provided in paragraph “b,” the provisions of this rule apply to any long–term care policy issued on or after January 1, 2003.

b. For certificates issued on or after July 1, 2003, under a group long–term care insurance policy which policy was in force on January 1, 2003, the provisions of this rule shall not apply.

39.29(11) Premiums charged for a policy or certificate containing nonforfeiture benefits or a contingent benefit upon lapse shall be subject to the loss ratio requirements of 39.13(2) or 191—39.28(514G), whichever applies, treating the policy as a whole.

39.29(12) To determine whether contingent nonforfeiture upon lapse provisions are triggered under paragraph 39.29(6)“c,” a replacing insurer that purchased or otherwise assumed a block or blocks of long–term care insurance policies from another insurer shall calculate the percentage increase based on the initial annual premium paid by the insured when the policy was first purchased from the original insurer.

39.29(13) A nonforfeiture benefit for qualified long–term care insurance contracts that are level premium contracts shall be offered that meets the following requirements:

a. The nonforfeiture provision shall be appropriately captioned;

b. The nonforfeiture provision shall provide a benefit available in the event of a default in the payment of any premiums and shall state that the amount of the benefit may be adjusted subsequent to being initially granted only as necessary to reflect changes in claims, persistency and interest as reflected in changes in rates for premium–paying contracts approved by the commissioner for the same contract form; and

c. The nonforfeiture provision shall provide at least one of the following:

(1) Reduced paid–up insurance;

(2) Extended term insurance;

(3) Shortened benefit period; or

(4) Other similar offerings approved by the commissioner.

39.30(1) A long–term care insurance policy shall condition the payment of benefits on a determination of the insured’s ability to perform activities of daily living and on cognitive impairment. Eligibility for the payment of benefits shall not be more restrictive than requiring either a deficiency in the ability to perform not more than three of the activities of daily living or the presence of cognitive impairment.

39.30(2) Activities of daily living.

a. Activities of daily living shall include at least the following as defined in rule 191—39.5(514G) and in the policy:

(1) Bathing;

(2) Continence;

(3) Dressing;

(4) Eating;

(5) Toileting; and

(6) Transferring.

b. Insurers may use other activities of daily living to trigger covered benefits as long as the activities are defined in the policy.

39.30(3) An insurer may use additional provisions for the determination of when benefits are payable under a policy or certificate; however, the provisions shall not restrict, and are not in lieu of, the requirements contained in subrules 39.30(1) and 39.30(2).

39.30(4) For purposes of this rule, the determination of a deficiency shall not be more restrictive than:

a. Requiring the hands–on assistance of another person to perform the prescribed activities of daily living; or

b. If the deficiency is due to the presence of a cognitive impairment, supervision or verbal cuing by another person is needed in order to protect the insured or others.

39.30(5) Assessments of activities of daily living and cognitive impairment shall be performed by licensed or certified professionals, such as physicians, nurses or social workers.

39.30(6) Long–term care insurance policies shall include a clear description of the process for appealing and resolving benefit determinations.

39.30(7) The requirements set forth in this rule shall be effective July 1, 2003, and shall apply as follows:

a. Except as provided in paragraph “b,” the provisions of this rule apply to a long–term care policy issued in this state on or after January 1, 2003.

b. For certificates issued on or after July 1, 2003, under a group long–term care insurance policy as defined in Iowa Code section 514G.4(4)“a” that was in force on January 1, 2003, the provisions of this rule shall not apply.

39.31(1) For purposes of this rule, the following definitions apply:

“Chronically ill individual” has the meaning prescribed for this term by Section 7702B(c)(2) of the Internal Revenue Code of 1986. Under this provision, a chronically ill individual means any individual who has been certified by a licensed health care practitioner as:

1. Being unable to perform (without substantial assistance from another individual) at least two activities of daily living for a period of at least 90 days due to a loss of functional capacity; or

2. Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment.

The term “chronically ill individual” shall not include an individual otherwise meeting these requirements unless within the preceding 12–month period a licensed health care practitioner has certified that the individual meets these requirements.

“Licensed health care practitioner” means a physician, as defined in Section 1861(r)(1) of the Social Security Act, a registered professional nurse, licensed social worker or other individual who meets requirements prescribed by the Secretary of the Treasury.

“Maintenance or personal care services” means any care the primary purpose of which is the provision of needed assistance with any of the disabilities as a result of which the individual is a chronically ill individual (including the protection from threats to health and safety due to severe cognitive impairment).

“Qualified long–term care services” means services that meet the requirements of Section 7702(c)(1) of the Internal Revenue Code of 1986, as follows: necessary diagnostic, preventive, therapeutic, curative, treatment, mitigation and rehabilitative services, and maintenance or personal care services which are required by a chronically ill individual, and are provided pursuant to a plan of care prescribed by a licensed health care practitioner.

39.31(2) A qualified long–term care insurance contract shall pay only for qualified long–term care services received by a chronically ill individual provided pursuant to a plan of care prescribed by a licensed health care practitioner.

39.31(3) A qualified long–term care insurance contract shall condition the payment of benefits on a determination of the insured’s inability to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity or to severe cognitive impairment.

39.31(4) Certifications regarding activities of daily living and cognitive impairment required pursuant to subrule 39.31(3) shall be performed by the following licensed or certified professionals: physicians, registered professional nurses, licensed social workers, or other individuals who meet requirements prescribed by the Secretary of the Treasury.

39.31(5) Certifications required pursuant to subrule 39.31(3) may be performed by a licensed health care professional at the direction of the carrier as is reasonably necessary with respect to a specific claim, except that when a licensed health care practitioner has certified that an insured is unable to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity and the insured is in claim status, the certification may not be rescinded and additional certifications may not be performed until after the expiration of the 90–day period.

39.31(6) Qualified long–term care insurance contracts shall include a clear description of the process for appealing and resolving disputes with respect to benefit determinations.

191—39.32(514G) Penalties. Violations of this chapter shall be subject to the penalties imposed under Iowa Code chapter 507B.

ITEM 20. Amend 191—Chapter 39 by adopting the following new Appendixes “A” through “G”:

Company Name: ________________________________________________________________

Address: ________________________________________________________________

________________________________________________________________

Phone Number: ________________________________________________________________

Due: March 1 annually

APPENDIX A (cont’d)

Instructions:

The purpose of this form is to report all rescissions of long–term care insurance policies or certificates. Those rescissions voluntarily effectuated by an insured are not required to be included in this report. Please furnish one form per rescission.

Detailed reason for rescission: ________________________________________________________________________

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