Senate File 567 S-3141 Amend Senate File 567 as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < DIVISION I 4 MEDICAID PROGRAM THIRD-PARTY RECOVERY 5 Section 1. Section 249A.37, Code 2023, is amended by 6 striking the section and inserting in lieu thereof the 7 following: 8 249A.37 Duties of third parties. 9 1. For the purposes of this section, “Medicaid payor” , 10 “recipient” , “third party” , and “third-party benefits” mean the 11 same as defined in section 249A.54. 12 2. The third-party obligations specified under this section 13 are a condition of doing business in the state. A third party 14 that fails to comply with these obligations shall not be 15 eligible to do business in the state. 16 3. A third party that is a carrier, as defined in section 17 514C.13, shall enter into a health insurance data match program 18 with the department for the sole purpose of comparing the 19 names of the carrier’s insureds with the names of recipients 20 as required by section 505.25. 21 4. A third party shall do all of the following: 22 a. Cooperate with the Medicaid payor in identifying 23 recipients for whom third-party benefits are available 24 including but not limited to providing information to determine 25 the period of potential third-party coverage, the nature of 26 the coverage, and the name, address, and identifying number 27 of the coverage. In cooperating with the Medicaid payor, the 28 third party shall provide information upon the request of the 29 Medicaid payor in a manner prescribed by the Medicaid payor or 30 as agreed upon by the department and the third party. 31 b. (1) Accept the Medicaid payor’s rights of recovery 32 and assignment to the Medicaid payor as a subrogee, assignee, 33 or lienholder under section 249A.54 for payments which the 34 Medicaid payor has made under the Medicaid state plan or under 35 -1- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 1/ 20 #1.

a waiver of such state plan. 1 (2) In the case of a third party other than the original 2 Medicare fee-for-service program under parts A and B of Tit. 3 XVIII of the federal Social Security Act, a Medicare advantage 4 plan offered by a Medicare advantage organization under part C 5 of Tit. XVIII of the federal Social Security Act, a reasonable 6 cost reimbursement contract under 42 U.S.C. §1395mm, a health 7 care prepayment plan under 42 U.S.C. §1395l, or a prescription 8 drug plan offered by a prescription drug plan sponsor under 9 part D of Tit. XVIII of the federal Social Security Act that 10 requires prior authorization for an item or service furnished 11 to an individual eligible to receive medical assistance 12 under Tit. XIX of the federal Social Security Act, accept 13 authorization provided by the Medicaid payor that the health 14 care item or service is covered under the Medicaid state plan 15 or waiver of such state plan for such individual, as if such 16 authorization were the prior authorization made by the third 17 party for such item or service. 18 c. If, on or before three years from the date a health care 19 item or service was provided, the Medicaid payor submits an 20 inquiry regarding a claim for payment that was submitted to the 21 third party, respond to that inquiry not later than sixty days 22 after receiving the inquiry. 23 d. Respond to any Medicaid payor’s request for payment of a 24 claim described in paragraph “c” not later than ninety business 25 days after receipt of written proof of the claim, either by 26 paying the claim or issuing a written denial to the Medicaid 27 payor. 28 e. Not deny any claim submitted by a Medicaid payor solely 29 on the basis of the date of submission of the claim, the type 30 or format of the claim form, a failure to present proper 31 documentation at the point-of-sale that is the basis of the 32 claim; or in the case of a third party other than the original 33 Medicare fee-for-service program under parts A and B of Tit. 34 XVIII of the federal Social Security Act, a Medicare advantage 35 -2- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 2/ 20

plan offered by a Medicare advantage organization under part C 1 of Tit. XVIII of the federal Social Security Act, a reasonable 2 cost reimbursement contract under 42 U.S.C. §1395mm, a health 3 care prepayment plan under 42 U.S.C. §1395l, or a prescription 4 drug plan offered by a prescription drug plan sponsor under 5 part D of Tit. XVIII of the federal Social Security Act, solely 6 on the basis of a failure to obtain prior authorization for the 7 health care item or service for which the claim is submitted if 8 all of the following conditions are met: 9 (1) The claim is submitted to the third party by the 10 Medicaid payor no later than three years after the date on 11 which the health care item or service was furnished. 12 (2) Any action by the Medicaid payor to enforce its rights 13 under section 249A.54 with respect to such claim is commenced 14 not later than six years after the Medicaid payor submits the 15 claim for payment. 16 5. Notwithstanding any provision of law to the contrary, 17 the time limitations, requirements, and allowances specified 18 in this section shall apply to third-party obligations under 19 this section. 20 6. The department may adopt rules pursuant to chapter 17A 21 as necessary to administer this section. Rules governing 22 the exchange of information under this section shall be 23 consistent with all laws, regulations, and rules relating to 24 the confidentiality or privacy of personal information or 25 medical records, including but not limited to the federal 26 Health Insurance Portability and Accountability Act of 1996, 27 Pub. L. No. 104-191, and regulations promulgated in accordance 28 with that Act and published in 45 C.F.R. pts. 160 – 164. 29 Sec. 2. Section 249A.54, Code 2023, is amended by striking 30 the section and inserting in lieu thereof the following: 31 249A.54 Responsibility for payment on behalf of 32 Medicaid-eligible persons —— liability of other parties. 33 1. It is the intent of the general assembly that a Medicaid 34 payor be the payor of last resort for medical services 35 -3- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 3/ 20

furnished to recipients. All other sources of payment for 1 medical services are primary relative to medical assistance 2 provided by the Medicaid payor. If benefits of a third party 3 are discovered or become available after medical assistance has 4 been provided by the Medicaid payor, it is the intent of the 5 general assembly that the Medicaid payor be repaid in full and 6 prior to any other person, program, or entity. The Medicaid 7 payor shall be repaid in full from and to the extent of any 8 third-party benefits, regardless of whether a recipient is made 9 whole or other creditors are paid. 10 2. For the purposes of this section: 11 a. “Collateral” means all of the following: 12 (1) Any and all causes of action, suits, claims, 13 counterclaims, and demands that accrue to the recipient 14 or to the recipient’s agent, related to any covered injury 15 or illness, or medical services that necessitated that the 16 Medicaid payor provide medical assistance to the recipient. 17 (2) All judgments, settlements, and settlement agreements 18 rendered or entered into and related to such causes of action, 19 suits, claims, counterclaims, demands, or judgments. 20 (3) Proceeds. 21 b. “Covered injury or illness” means any sickness, injury, 22 disease, disability, deformity, abnormality disease, necessary 23 medical care, pregnancy, or death for which a third party is, 24 may be, could be, should be, or has been liable, and for which 25 the Medicaid payor is, or may be, obligated to provide, or has 26 provided, medical assistance. 27 c. “Medicaid payor” means the department or any person, 28 entity, or organization that is legally responsible by 29 contract, statute, or agreement to pay claims for medical 30 assistance including but not limited to managed care 31 organizations and other entities that contract with the state 32 to provide medical assistance under chapter 249A. 33 d. “Medical service” means medical or medically related 34 institutional or noninstitutional care, or a medical or 35 -4- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 4/ 20

medically related institutional or noninstitutional good, item, 1 or service covered by Medicaid. 2 e. “Payment” as it relates to third-party benefits, means 3 performance of a duty, promise, or obligation, or discharge of 4 a debt or liability, by the delivery, provision, or transfer of 5 third-party benefits for medical services. “To pay” means to 6 make payment. 7 f. “Proceeds” means whatever is received upon the sale, 8 exchange, collection, or other disposition of the collateral 9 or proceeds from the collateral and includes insurance payable 10 because of loss or damage to the collateral or proceeds. “Cash 11 proceeds” include money, checks, and deposit accounts and 12 similar proceeds. All other proceeds are “noncash proceeds” . 13 g. “Recipient” means a person who has applied for medical 14 assistance or who has received medical assistance. 15 h. “Recipient’s agent” includes a recipient’s legal 16 guardian, legal representative, or any other person acting on 17 behalf of the recipient. 18 i. “Third party” means an individual, entity, or program, 19 excluding Medicaid, that is or may be liable to pay all or a 20 part of the expenditures for medical assistance provided by a 21 Medicaid payor to the recipient. A third party includes but is 22 not limited to all of the following: 23 (1) A third-party administrator. 24 (2) A pharmacy benefits manager. 25 (3) A health insurer. 26 (4) A self-insured plan. 27 (5) A group health plan, as defined in section 607(1) of the 28 federal Employee Retirement Income Security Act of 1974. 29 (6) A service benefit plan. 30 (7) A managed care organization. 31 (8) Liability insurance including self-insurance. 32 (9) No-fault insurance. 33 (10) Workers’ compensation laws or plans. 34 (11) Other parties that by law, contract, or agreement 35 -5- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 5/ 20

are legally responsible for payment of a claim for medical 1 services. 2 j. “Third-party benefits” mean any benefits that are or may 3 be available to a recipient from a third party and that provide 4 or pay for medical services. “Third-party benefits” may be 5 created by law, contract, court award, judgment, settlement, 6 agreement, or any arrangement between a third party and any 7 person or entity, recipient, or otherwise. “Third-party 8 benefits” include but are not limited to all of the following: 9 (1) Benefits from collateral or proceeds. 10 (2) Health insurance benefits. 11 (3) Health maintenance organization benefits. 12 (4) Benefits from preferred provider arrangements and 13 prepaid health clinics. 14 (5) Benefits from liability insurance, uninsured and 15 underinsured motorist insurance, or personal injury protection 16 coverage. 17 (6) Medical benefits under workers’ compensation. 18 (7) Benefits from any obligation under law or equity to 19 provide medical support. 20 3. Third-party benefits for medical services shall be 21 primary to medical assistance provided by the Medicaid payor. 22 4. a. A Medicaid payor has all of the rights, privileges, 23 and responsibilities identified under this section. Each 24 Medicaid payor is a Medicaid payor to the extent of the 25 medical assistance provided by that Medicaid payor. Therefore, 26 Medicaid payors may exercise their Medicaid payor’s rights 27 under this section concurrently. 28 b. Notwithstanding the provisions of this subsection to the 29 contrary, if the department determines that a Medicaid payor 30 has not taken reasonable steps within a reasonable time to 31 recover third-party benefits, the department may exercise all 32 of the rights of the Medicaid payor under this section to the 33 exclusion of the Medicaid payor. If the department determines 34 the department will exercise such rights, the department shall 35 -6- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 6/ 20

give notice to third parties and to the Medicaid payor. 1 5. A Medicaid payor may assign the Medicaid payor’s rights 2 under this section, including but not limited to an assignment 3 to another Medicaid payor, a provider, or a contractor. 4 6. After the Medicaid payor has provided medical assistance 5 under the Medicaid program, the Medicaid payor shall seek 6 reimbursement for third-party benefits to the extent of the 7 Medicaid payor’s legal liability and for the full amount of 8 the third-party benefits, but not in excess of the amount of 9 medical assistance provided by the Medicaid payor. 10 7. On or before the thirtieth day following discovery by 11 a recipient of potential third-party benefits, a recipient or 12 the recipient’s agent, as applicable, shall inform the Medicaid 13 payor of any rights the recipient has to third-party benefits 14 and of the name and address of any person that is or may be 15 liable to provide third-party benefits. 16 8. When the Medicaid payor provides or becomes liable for 17 medical assistance, the Medicaid payor has the following rights 18 which shall be construed together to provide the greatest 19 recovery of third-party benefits: 20 a. The Medicaid payor is automatically subrogated to any 21 rights that a recipient or a recipient’s agent or legally 22 liable relative has to any third-party benefit for the full 23 amount of medical assistance provided by the Medicaid payor. 24 Recovery pursuant to these subrogation rights shall not be 25 reduced, prorated, or applied to only a portion of a judgment, 26 award, or settlement, but shall provide full recovery to the 27 Medicaid payor from any and all third-party benefits. Equities 28 of a recipient or a recipient’s agent, creditor, or health care 29 provider shall not defeat, reduce, or prorate recovery by the 30 Medicaid payor as to the Medicaid payor’s subrogation rights 31 granted under this paragraph. 32 b. By applying for, accepting, or accepting the benefit 33 of medical assistance, a recipient or a recipient’s agent or 34 legally liable relative automatically assigns to the Medicaid 35 -7- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 7/ 20

payor any right, title, and interest such person has to any 1 third-party benefit, excluding any Medicare benefit to the 2 extent required to be excluded by federal law. 3 (1) The assignment granted under this paragraph is absolute 4 and vests legal and equitable title to any such right in the 5 Medicaid payor, but not in excess of the amount of medical 6 assistance provided by the Medicaid payor. 7 (2) The Medicaid payor is a bona fide assignee for value in 8 the assigned right, title, or interest and takes vested legal 9 and equitable title free and clear of latent equities in a 10 third party. Equities of a recipient or a recipient’s agent, 11 creditor, or health care provider shall not defeat or reduce 12 recovery by the Medicaid payor as to the assignment granted 13 under this paragraph. 14 c. The Medicaid payor is entitled to and has an automatic 15 lien upon the collateral for the full amount of medical 16 assistance provided by the Medicaid payor to or on behalf of 17 the recipient for medical services furnished as a result of any 18 covered injury or illness for which a third party is or may be 19 liable. 20 (1) The lien attaches automatically when a recipient first 21 receives medical services for which the Medicaid payor may be 22 obligated to provide medical assistance. 23 (2) The filing of the notice of lien with the clerk of 24 the district court in the county in which the recipient’s 25 eligibility is established pursuant to this section shall be 26 notice of the lien to all persons. Notice is effective as of 27 the date of filing of the notice of lien. 28 (3) If the Medicaid payor has actual knowledge that the 29 recipient is represented by an attorney, the Medicaid payor 30 shall provide the attorney with a copy of the notice of lien. 31 However, this provision of a copy of the notice of lien to 32 the recipient’s attorney does not abrogate the attachment, 33 perfection, and notice satisfaction requirements specified 34 under subparagraphs (1) and (2). 35 -8- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 8/ 20

(4) Only one claim of lien need be filed to provide notice 1 and shall provide sufficient notice as to any additional 2 or after-paid amount of medical assistance provided by the 3 Medicaid payor for any specific covered injury or illness. 4 The Medicaid payor may, in the Medicaid payor’s discretion, 5 file additional, amended, or substitute notices of lien at any 6 time after the initial filing until the Medicaid payor has 7 been repaid the full amount of medical assistance provided 8 by Medicaid or otherwise has released the liable parties and 9 recipient. 10 (5) A release or satisfaction of any cause of action, 11 suit, claim, counterclaim, demand, judgment, settlement, or 12 settlement agreement shall not be effective as against a lien 13 created under this paragraph, unless the Medicaid payor joins 14 in the release or satisfaction or executes a release of the 15 lien. An acceptance of a release or satisfaction of any cause 16 of action, suit, claim, counterclaim, demand, or judgment and 17 any settlement of any of the foregoing in the absence of a 18 release or satisfaction of a lien created under this paragraph 19 shall prima facie constitute an impairment of the lien, and 20 the Medicaid payor is entitled to recover damages on account 21 of such impairment. In an action on account of impairment of a 22 lien, the Medicaid payor may recover from the person accepting 23 the release or satisfaction or the person making the settlement 24 the full amount of medical assistance provided by the Medicaid 25 payor. 26 (6) The lack of a properly filed claim of lien shall not 27 affect the Medicaid payor’s assignment or subrogation rights 28 provided in this subsection nor affect the existence of the 29 lien, but shall only affect the effective date of notice. 30 (7) The lien created by this paragraph is a first lien 31 and superior to the liens and charges of any provider of a 32 recipient’s medical services. If the lien is recorded, the 33 lien shall exist for a period of seven years after the date of 34 recording. If the lien is not recorded, the lien shall exist 35 -9- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 9/ 20

for a period of seven years after the date of attachment. If 1 recorded, the lien may be extended for one additional period 2 of seven years by rerecording the claim of lien within the 3 ninety-day period preceding the expiration of the lien. 4 9. Except as otherwise provided in this section, the 5 Medicaid payor shall recover the full amount of all medical 6 assistance provided by the Medicaid payor on behalf of the 7 recipient to the full extent of third-party benefits. The 8 Medicaid payor may collect recovered benefits directly from any 9 of the following: 10 a. A third party. 11 b. The recipient. 12 c. The provider of a recipient’s medical services if 13 third-party benefits have been recovered by the provider. 14 Notwithstanding any provision of this section to the contrary, 15 a provider shall not be required to refund or pay to the 16 Medicaid payor any amount in excess of the actual third-party 17 benefits received by the provider from a third party for 18 medical services provided to the recipient. 19 d. Any person who has received the third-party benefits. 20 10. a. A recipient and the recipient’s agent shall 21 cooperate in the Medicaid payor’s recovery of the recipient’s 22 third-party benefits and in establishing paternity and support 23 of a recipient child born out of wedlock. Such cooperation 24 shall include but is not limited to all of the following: 25 (1) Appearing at an office designated by the Medicaid payor 26 to provide relevant information or evidence. 27 (2) Appearing as a witness at a court proceeding or other 28 legal or administrative proceeding. 29 (3) Providing information or attesting to lack of 30 information under penalty of perjury. 31 (4) Paying to the Medicaid payor any third-party benefit 32 received. 33 (5) Taking any additional steps to assist in establishing 34 paternity or securing third-party benefits, or both. 35 -10- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 10/ 20

b. Notwithstanding paragraph “a” , the Medicaid payor has the 1 discretion to waive, in writing, the requirement of cooperation 2 for good cause shown and as required by federal law. 3 c. The department may deny or terminate eligibility for 4 any recipient who refuses to cooperate as required under this 5 subsection unless the department has waived cooperation as 6 provided under this subsection. 7 11. On or before the thirtieth day following the initiation 8 of a formal or informal recovery, other than by filing a 9 lawsuit, a recipient’s attorney shall provide written notice of 10 the activity or action to the Medicaid payor. 11 12. A recipient is deemed to have authorized the Medicaid 12 payor to obtain and release medical information and other 13 records with respect to the recipient’s medical services 14 for the sole purpose of obtaining reimbursement for medical 15 assistance provided by the Medicaid payor. 16 13. a. To enforce the Medicaid payor’s rights under 17 this section, the Medicaid payor may, as a matter of right, 18 institute, intervene in, or join in any legal or administrative 19 proceeding in the Medicaid payor’s own name, and in any or a 20 combination of any, of the following capacities: 21 (1) Individually. 22 (2) As a subrogee of the recipient. 23 (3) As an assignee of the recipient. 24 (4) As a lienholder of the collateral. 25 b. An action by the Medicaid payor to recover damages 26 in an action in tort under this subsection, which action is 27 derivative of the rights of the recipient, shall not constitute 28 a waiver of sovereign immunity. 29 c. A Medicaid payor, other than the department, shall obtain 30 the written consent of the department before the Medicaid payor 31 files a derivative legal action on behalf of a recipient. 32 d. When a Medicaid payor brings a derivative legal action on 33 behalf of a recipient, the Medicaid payor shall provide written 34 notice no later than thirty days after filing the action to the 35 -11- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 11/ 20

recipient, the recipient’s agent, and, if the Medicaid payor 1 has actual knowledge that the recipient is represented by an 2 attorney, to the attorney of the recipient, as applicable. 3 e. If the recipient or a recipient’s agent brings an action 4 against a third party, on or before the thirtieth day following 5 the filing of the action, the recipient, the recipient’s agent, 6 or the attorney of the recipient or the recipient’s agent, 7 as applicable, shall provide written notice to the Medicaid 8 payor of the action, including the name of the court in which 9 the action is brought, the case number of the action, and a 10 copy of the pleadings. The recipient, the recipient’s agent, 11 or the attorney of the recipient or the recipient’s agent, as 12 applicable, shall provide written notice of intent to dismiss 13 the action at least twenty-one days before the voluntary 14 dismissal of an action against a third party. Notice to the 15 Medicaid payor shall be sent as specified by rule. 16 14. On or before the thirtieth day before the recipient 17 finalizes a judgment, award, settlement, or any other recovery 18 where the Medicaid payor has the right to recovery, the 19 recipient, the recipient’s agent, or the attorney of the 20 recipient or recipient’s agent, as applicable, shall give the 21 Medicaid payor notice of the judgment, award, settlement, 22 or recovery. The judgment, award, settlement, or recovery 23 shall not be finalized unless such notice is provided and the 24 Medicaid payor has had a reasonable opportunity to recover 25 under the Medicaid payor’s rights to subrogation, assignment, 26 and lien. If the Medicaid payor is not given notice, the 27 recipient, the recipient’s agent, and the recipient’s or 28 recipient’s agent’s attorney are jointly and severally liable 29 to reimburse the Medicaid payor for the recovery received to 30 the extent of medical assistance paid by the Medicaid payor. 31 The notice required under this subsection means written 32 notice sent via certified mail to the address listed on the 33 department’s internet site for a Medicaid payor’s third-party 34 liability contact. The notice requirement is only satisfied 35 -12- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 12/ 20

for the specific Medicaid payor upon receipt by the specific 1 Medicaid payor’s third-party liability contact of such written 2 notice sent via certified mail. 3 15. a. Except as otherwise provided in this section, the 4 entire amount of any settlement of the recipient’s action or 5 claim involving third-party benefits, with or without suit, is 6 subject to the Medicaid payor’s claim for reimbursement of the 7 amount of medical assistance provided and any lien pursuant to 8 the claim. 9 b. Insurance and other third-party benefits shall not 10 contain any term or provision which purports to limit or 11 exclude payment or the provision of benefits for an individual 12 if the individual is eligible for, or a recipient of, medical 13 assistance, and any such term or provision shall be void as 14 against public policy. 15 16. In an action in tort against a third party in which the 16 recipient is a party and which results in a judgment, award, or 17 settlement from a third party, the amount recovered shall be 18 distributed as follows: 19 a. After deduction of reasonable attorney fees, reasonably 20 necessary legal expenses, and filing fees, there is a 21 rebuttable presumption that all Medicaid payors shall 22 collectively receive two-thirds of the remaining amount 23 recovered or the total amount of medical assistance provided by 24 the Medicaid payors, whichever is less. A party may rebut this 25 presumption in accordance with subsection 17. 26 b. The remaining recovered amount shall be paid to the 27 recipient. 28 c. If the recovered amount available for the repayment of 29 medical assistance is insufficient to satisfy the competing 30 claims of the Medicaid payors, each Medicaid payor shall be 31 entitled to the Medicaid payor’s respective pro rata share of 32 the recovered amount that is available. 33 17. a. A recipient or a recipient’s agent who has notice 34 or who has actual knowledge of the Medicaid payor’s rights 35 -13- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 13/ 20

to third-party benefits under this section and who receives 1 any third-party benefit or proceeds for a covered injury or 2 illness shall on or before the sixtieth day after receipt of 3 the proceeds pay the Medicaid payor the full amount of the 4 third-party benefits, but not more than the total medical 5 assistance provided by the Medicaid payor, or shall place the 6 full amount of the third-party benefits in an interest-bearing 7 trust account for the benefit of the Medicaid payor pending a 8 determination of the Medicaid payor’s rights to the benefits 9 under this subsection. 10 b. If federal law limits the Medicaid payor to reimbursement 11 from the recovered damages for medical expenses, a recipient 12 may contest the amount designated as recovered damages for 13 medical expenses payable to the Medicaid payor pursuant to the 14 formula specified in subsection 16. In order to successfully 15 rebut the formula specified in subsection 16, the recipient 16 shall prove, by clear and convincing evidence, that the portion 17 of the total recovery which should be allocated as medical 18 expenses, including future medical expenses, is less than the 19 amount calculated by the Medicaid payor pursuant to the formula 20 specified in subsection 16. Alternatively, to successfully 21 rebut the formula specified in subsection 16, the recipient 22 shall prove, by clear and convincing evidence, that Medicaid 23 provided a lesser amount of medical assistance than that 24 asserted by the Medicaid payor. A settlement agreement that 25 designates the amount of recovered damages for medical expenses 26 is not clear and convincing evidence and is not sufficient to 27 establish the recipient’s burden of proof, unless the Medicaid 28 payor is a party to the settlement agreement. 29 c. If the recipient or the recipient’s agent filed a legal 30 action to recover against the third party, the court in which 31 such action was filed shall resolve any dispute concerning 32 the amount owed to the Medicaid payor, and shall retain 33 jurisdiction of the case to resolve the amount of the lien 34 after the dismissal of the action. 35 -14- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 14/ 20

d. If the recipient or the recipient’s agent did not file a 1 legal action, to resolve any dispute concerning the amount owed 2 to the Medicaid payor, the recipient or the recipient’s agent 3 shall file a petition for declaratory judgment as permitted 4 under rule of civil procedure 1.1101 on or before the one 5 hundred twenty-first day after the date of payment of funds to 6 the Medicaid payor or the date of placing the full amount of 7 the third-party benefits in a trust account. Venue for all 8 declaratory actions under this subsection shall lie in Polk 9 county. 10 e. If a Medicaid payor and the recipient or the recipient’s 11 agent disagree as to whether a medical claim is related to a 12 covered injury or illness, the Medicaid payor and the recipient 13 or the recipient’s agent shall attempt to work cooperatively 14 to resolve the disagreement before seeking resolution by the 15 court. 16 f. Each party shall pay the party’s own attorney fees and 17 costs for any legal action conducted under this subsection. 18 18. Notwithstanding any other provision of law to the 19 contrary, when medical assistance is provided for a minor, any 20 statute of limitation or repose applicable to an action or 21 claim of a legally responsible relative for the minor’s medical 22 expenses is extended in favor of the legally responsible 23 relative so that the legally responsible relative shall have 24 one year from and after the attainment of the minor’s majority 25 within which to file a complaint, make a claim, or commence an 26 action. 27 19. In recovering any payments in accordance with this 28 section, the Medicaid payor may make appropriate settlements. 29 20. If a recipient or a recipient’s agent submits via notice 30 a request that the Medicaid payor provide an itemization of 31 medical assistance paid for any covered injury or illness, 32 the Medicaid payor shall provide the itemization on or before 33 the sixty-fifth day following the day on which the Medicaid 34 payor received the request. Failure to provide the itemization 35 -15- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 15/ 20

within the specified time shall not bar a Medicaid payor’s 1 recovery, unless the itemization response is delinquent for 2 more than one hundred twenty days without justifiable cause. A 3 Medicaid payor shall not be under any obligation to provide a 4 final itemization until a reasonable period of time after the 5 processing of payment in relation to the recipient’s receipt of 6 final medical services. A Medicaid payor shall not be under 7 any obligation to respond to more than one itemization request 8 in any one-hundred-twenty-day period. The notice required 9 under this subsection means written notice sent via certified 10 mail to the address listed on the department’s internet site 11 for a Medicaid payor’s third-party liability contact. The 12 notice requirement is only satisfied for the specific Medicaid 13 payor upon receipt by the specific Medicaid payor’s third-party 14 liability contact of such written notice sent via certified 15 mail. 16 21. The department may adopt rules to administer this 17 section and applicable federal requirements. 18 DIVISION II 19 MEDICAID MANAGED CARE ORGANIZATION TAXATION OF PREMIUMS 20 Sec. 3. NEW SECTION . 249A.13 Medicaid managed care 21 organization premiums fund. 22 1. A Medicaid managed care organization premiums fund 23 is created in the state treasury under the authority of the 24 department of health and human services. Moneys collected by 25 the director of the department of revenue as taxes on premiums 26 pursuant to section 432.1A shall be deposited in the fund. 27 2. Moneys in the fund are appropriated to the department 28 of health and human services for the purposes of the medical 29 assistance program. 30 3. Notwithstanding section 8.33, moneys in the fund 31 that remain unencumbered or unobligated at the close of a 32 fiscal year shall not revert but shall remain available for 33 expenditure for the purposes designated. Notwithstanding 34 section 12C.7, subsection 2, interest or earnings on moneys in 35 -16- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 16/ 20

the fund shall be credited to the fund. 1 Sec. 4. NEW SECTION . 432.1A Health maintenance organization 2 —— medical assistance program —— premium tax. 3 1. Pursuant to section 514B.31, subsection 3, a health 4 maintenance organization contracting with the department of 5 health and human services to administer the medical assistance 6 program under chapter 249A, shall pay as taxes to the director 7 of the department of revenue for deposit in the Medicaid 8 managed care organization premiums fund created in section 9 249A.13, an amount equal to two and one-half percent of 10 the premiums received and taxable under subsection 514B.31, 11 subsection 3. 12 2. Except as provided in subsection 3, the premium tax shall 13 be paid on or before March 1 of the year following the calendar 14 year for which the tax is due. The commissioner of insurance 15 may suspend or revoke the license of a health maintenance 16 organization subject to the premium tax in subsection 1 that 17 fails to pay the premium tax on or before the due date. 18 3. a. Each health maintenance organization transacting 19 business in this state that is subject to the tax in subsection 20 1 shall remit on or before June 1, on a prepayment basis, 21 an amount equal to one-half of the health maintenance 22 organization’s premium tax liability for the preceding calendar 23 year. 24 b. In addition to the prepayment amount in paragraph 25 “a” , each health maintenance organization subject to the 26 tax in subsection 1 shall remit on or before August 15, on 27 a prepayment basis, an additional one-half of the health 28 maintenance organization’s premium tax liability for the 29 preceding calendar year. 30 c. The sums prepaid by a health maintenance organization 31 under paragraphs “a” and “b” shall be allowed as credits 32 against the health maintenance organization’s premium tax 33 liability for the calendar year during which the payments are 34 made. If a prepayment made under this subsection exceeds 35 -17- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 17/ 20

the health maintenance organization’s annual premium tax 1 liability, the excess shall be allowed as a credit against the 2 health maintenance organization’s subsequent prepayment or tax 3 liabilities under this section. The commissioner of insurance 4 shall authorize the department of revenue to make a cash refund 5 to a health maintenance organization, in lieu of a credit 6 against subsequent prepayment or tax liabilities under this 7 section, if the health maintenance organization demonstrates 8 the inability to recoup the funds paid via a credit. The 9 commissioner of insurance shall adopt rules establishing a 10 health maintenance organization’s eligibility for a cash 11 refund, and the process for the department of revenue to make a 12 cash refund to an eligible health maintenance organization from 13 the Medicaid managed care organization premiums fund created in 14 section 249A.13. The commissioner of insurance may suspend or 15 revoke the license of a health maintenance organization that 16 fails to make a prepayment on or before the due date under this 17 subsection. 18 d. Sections 432.10 and 432.14 are applicable to premium 19 taxes due under this section. 20 Sec. 5. Section 514B.31, Code 2023, is amended by striking 21 the section and inserting in lieu thereof the following: 22 514B.31 Taxation. 23 1. For the first five years of the existence of a 24 health maintenance organization and the health maintenance 25 organization’s successors and assigns, the following shall 26 not be considered premiums received and taxable under section 27 432.1: 28 a. Payments received by the health maintenance organization 29 for health care services, insurance, indemnity, or other 30 benefits to which an enrollee is entitled through a health 31 maintenance organization authorized under this chapter. 32 b. Payments made by the health maintenance organization 33 to providers for health care services, to insurers, or to 34 corporations authorized under chapter 514 for insurance, 35 -18- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 18/ 20

indemnity, or other service benefits authorized under this 1 chapter. 2 2. After the first five years of the existence of a 3 health maintenance organization and the health maintenance 4 organization’s successors and assigns, the following shall be 5 considered premiums received and taxable under section 432.1: 6 a. Payments received by the health maintenance organization 7 for health care services, insurance, indemnity, or other 8 benefits to which an enrollee is entitled through a health 9 maintenance organization authorized under this chapter. 10 b. Payments made by the health maintenance organization 11 to providers for health care services, to insurers, or to 12 corporations authorized under chapter 514 for insurance, 13 indemnity, or other service benefits authorized under this 14 chapter. 15 3. Notwithstanding subsections 1 and 2, beginning January 16 1, 2024, and for each subsequent calendar year, the following 17 shall be considered premiums received and taxable under section 18 432.1A for a health maintenance organization contracting with 19 the department of health and human services to administer the 20 medical assistance program under chapter 249A: 21 a. Payments received by the health maintenance organization 22 for health care services, insurance, indemnity, or other 23 benefits to which an enrollee is entitled through a health 24 maintenance organization authorized under this chapter. 25 b. Payments made by the health maintenance organization 26 to providers for health care services, to insurers, or to 27 corporations authorized under chapter 514 for insurance, 28 indemnity, or other service benefits authorized under this 29 chapter. 30 4. Payments made to a health maintenance organization 31 by the United States secretary of health and human services 32 under a contract issued under section 1833 or 1876 of the 33 federal Social Security Act, or under section 4015 of the 34 federal Omnibus Budget Reconciliation Act of 1987, shall not 35 -19- SF 567.1725 (2) 90 (amending this SF 567 to CONFORM to HF 685) pf/rh 19/ 20