House Study Bill 62 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON HUMAN RESOURCES BILL BY CHAIRPERSON MILLER) A BILL FOR An Act relating to the establishment of eligibility and 1 identity verification systems for assistance programs 2 under the purview of the department of human services and 3 including effective date and implementation provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1656YC (5) 86 pf/nh

H.F. _____ DIVISION I 1 ENHANCED ELIGIBILITY VERIFICATION SYSTEM 2 Section 1. DEFINITIONS. For the purposes of this division 3 of this Act, unless the context otherwise requires: 4 1. “Department” means the department of human services. 5 2. “Identity information” means an applicant or recipient’s 6 full name, aliases, date of birth, address, social security 7 number, and other related information. 8 Sec. 2. ESTABLISHMENT OF ENHANCED ELIGIBILITY VERIFICATION 9 SYSTEM. 10 1. The department shall establish a computerized income, 11 asset, and identity eligibility verification system to 12 verify eligibility, eliminate duplication of assistance, 13 and deter waste, fraud, and abuse within each respective 14 assistance program under the purview of and administered by the 15 department. The department shall enter into a competitively 16 bid contract with a third-party vendor for the purposes 17 of developing and implementing such a system to verify the 18 income, asset, and identity information of applicants when 19 determining an applicant’s eligibility for assistance prior to 20 the distribution of benefits, periodically between eligibility 21 redeterminations, and during eligibility redeterminations and 22 reviews as specified in this section. 23 2. When the department enters into a contract with a 24 third-party vendor for the purposes of carrying out this 25 division of this Act, payment to the vendor for such services 26 shall be contingent upon the annualized savings realized by 27 implementation of the verification system as specified in the 28 contract. 29 3. Under the system implemented pursuant to this division 30 of this Act, all applications for benefits shall be processed 31 within a ten-day period or the minimum period required by 32 federal law. 33 4. Under the system implemented pursuant to this division 34 of this Act, prior to awarding or continuing assistance, 35 -1- LSB 1656YC (5) 86 pf/nh 1/ 10

H.F. _____ the department shall verify identity information for each 1 respective applicant for and recipient of assistance from the 2 department against the following to the extent such information 3 or database is available: 4 a. Earned and unearned income information maintained by the 5 internal revenue service. 6 b. Employer weekly, monthly, or quarterly reports of income 7 and unemployment insurance payment information maintained by 8 the department of workforce development. 9 c. Earned income information maintained by the United 10 States social security administration. 11 d. Immigration status information maintained by the United 12 States citizen and immigration services. 13 e. Death register information maintained by the United 14 States social security administration. 15 f. Prisoner information maintained by the United States 16 social security administration. 17 g. Public housing and section 8 housing assistance payment 18 information maintained by the United States department of 19 housing and urban development. 20 h. National fleeing felon information maintained by the 21 United States federal bureau of investigation. 22 i. Wage reporting and similar information maintained by 23 states contiguous to Iowa. 24 j. Beneficiary records and earnings information maintained 25 by the United States social security administration in its 26 beneficiary and earnings data exchange database. 27 k. Earnings and pension information maintained by the 28 United States social security administration in its beneficiary 29 earnings exchange record system database. 30 l. Employment information maintained by the department of 31 workforce development. 32 m. Employment information maintained by the United States 33 department of health and human services in its national 34 directory of new hires database. 35 -2- LSB 1656YC (5) 86 pf/nh 2/ 10

H.F. _____ n. Supplemental security income information maintained 1 by the United States social security administration in its 2 supplemental security income state data exchange database. 3 o. Veterans’ benefits information maintained by the United 4 States department of health and human services in the federal 5 public assistance reporting information system database. 6 p. Child care services information maintained by the 7 department. 8 q. Utility payments information maintained by the state 9 under the low-income home energy assistance program. 10 r. Emergency utility payment information maintained by 11 state or local entities. 12 s. A database of all persons who currently hold a license, 13 permit, or certificate from any state agency, the cost of which 14 exceeds five hundred dollars. 15 t. Income and employment information maintained by the 16 child support recovery unit and the United States department of 17 health and human services office of child support enforcement. 18 u. Earnings and pension information maintained by the Iowa 19 public employees’ retirement system. 20 v. Any existing real-time database of persons currently 21 receiving benefits in other states, such as the national 22 accuracy clearinghouse. 23 w. A database which is substantially similar to or a 24 successor of a database described in this subsection. 25 5. Under the system implemented pursuant to this division 26 of this Act, prior to awarding or continuing assistance, the 27 department shall match identity information for each respective 28 applicant for and recipient of assistance from the department 29 against, at a minimum, all of the following data sources, to 30 the extent such data sources are available: 31 a. A nationwide public records data source of physical 32 asset ownership such as real property, automobiles, watercraft, 33 aircraft, and luxury vehicles, or any other vehicle owned by an 34 applicant for or recipient of assistance. 35 -3- LSB 1656YC (5) 86 pf/nh 3/ 10

H.F. _____ b. A nationwide public records data source of incarcerated 1 individuals. 2 c. A nationwide best-address and driver’s license data 3 source to verify that an individual is a resident of this 4 state. 5 d. A comprehensive public records database that identifies 6 potential identity fraud or identity theft that can closely 7 associate name, social security number, date of birth, 8 telephone, and address information. 9 e. A data source or database which is substantially similar 10 to or a successor of a data source or database described in 11 this subsection. 12 6. As part of the verification process, prior to awarding 13 assistance, applicants for benefits shall complete a 14 computerized identity authentication process that shall confirm 15 the applicant owns the identity presented in the application. 16 The department shall review the respective applicant’s identity 17 ownership using the following procedures: 18 a. Provide a knowledge-based quiz consisting of financial 19 or personal questions. The quiz shall attempt to accommodate 20 nonbanked or under-banked applicants who do not have an 21 established credit history. 22 b. Require the quiz for applications be available to be 23 submitted through a variety of approaches including online, 24 in-person, and via telephone. 25 7. If a discrepancy results between an applicant’s or 26 recipient’s identity information and information available 27 through one or more of the databases or information tools 28 specified in this section, the department shall review the 29 respective applicant’s or recipient’s case using the following 30 procedures: 31 a. If the information discovered does not result in the 32 department finding a discrepancy or change in an applicant’s 33 or recipient’s circumstances that may affect eligibility, the 34 department shall take no further action. 35 -4- LSB 1656YC (5) 86 pf/nh 4/ 10

H.F. _____ b. If the information discovered results in the department 1 finding a discrepancy or change in a recipient’s circumstances 2 that may affect eligibility, the department shall promptly 3 redetermine eligibility after receiving such information. 4 c. (1) If the information discovered results in the 5 department finding a discrepancy or change in an applicant’s 6 or recipient’s circumstances that may affect eligibility, 7 the applicant or recipient shall be given an opportunity to 8 explain the discrepancy. However, a self-declaration by an 9 applicant or recipient shall not be accepted as verification 10 of categorical and financial eligibility during eligibility 11 evaluations, reviews, and redeterminations. 12 (2) The department shall provide written notice to the 13 applicant or recipient, which shall describe in sufficient 14 detail the circumstances of the discrepancy or change, the 15 manner in which the applicant or recipient may respond, and 16 the consequences of failing to take action. The applicant 17 or recipient shall have ten business days, or the minimum 18 period otherwise required by state or federal law, to respond 19 to an attempt to resolve the discrepancy or change. The 20 explanation provided by the recipient or applicant shall be 21 provided in writing. After receiving the explanation from the 22 recipient or applicant, the department may request additional 23 documentation if the department determines there is a risk of 24 fraud, misrepresentation, or inadequate documentation. 25 d. If the applicant or recipient does not respond to the 26 notice, the department shall deny or discontinue assistance 27 for failure to cooperate, in which case the department shall 28 provide notice of intent to deny or discontinue assistance to 29 the applicant or recipient. Eligibility for assistance shall 30 not be established or reestablished until the discrepancy or 31 change has been resolved. 32 e. If an applicant or recipient responds to the notice 33 and disagrees with the findings of the match between the 34 applicant’s or recipient’s identity information and one or more 35 -5- LSB 1656YC (5) 86 pf/nh 5/ 10

H.F. _____ databases or information tools utilized under this Act, the 1 department shall reinvestigate the matter. If the department 2 finds that there has been an error, the department shall take 3 immediate action to correct the error and no further action 4 shall be taken. If, after the reinvestigation, the department 5 determines that there has not been an error, the department 6 shall determine the effect on the applicant’s or recipient’s 7 case and take appropriate action. Written notice of the 8 respective department action shall be provided to the applicant 9 or recipient. 10 f. If the applicant or recipient agrees with the findings 11 of the match between the applicant’s or recipient’s identity 12 information and one or more databases or information tools 13 utilized under this Act, the department shall determine 14 the effect on the applicant’s or recipient’s case and take 15 appropriate action. Written notice of the department’s 16 action shall be provided to the applicant or recipient. The 17 department shall not discontinue assistance upon finding a 18 discrepancy or change in circumstances between an individual’s 19 identity information and one or more databases or information 20 tools utilized under this Act until the applicant or recipient 21 has been provided notice of the discrepancy or change and the 22 opportunity to respond as required under this Act. 23 8. a. Under the system implemented pursuant to this 24 division of this Act, after reviewing changes or discrepancies 25 that may affect program eligibility, the department shall refer 26 suspected cases of fraud to the department of inspections and 27 appeals, the office of the attorney general, or other entity 28 responsible for prosecuting eligibility fraud relating to the 29 programs under the purview of the department for investigation 30 and possible criminal prosecution, recovery of improper 31 payments, and collection of civil penalties. 32 b. After reviewing changes and discrepancies that may 33 affect program eligibility, the department shall refer 34 suspected cases of identity fraud to the office of the attorney 35 -6- LSB 1656YC (5) 86 pf/nh 6/ 10

H.F. _____ general or other entity responsible for prosecuting identity 1 theft for criminal prosecution. 2 c. In cases of fraud substantiated by the department, upon 3 conviction, the state shall review all legal options to remove 4 the recipient from other public programs and garnish wages or 5 state income tax refunds until the state recovers an equal 6 amount of benefits fraudulently received. 7 d. After reviewing changes or discrepancies that may affect 8 program eligibility, the department shall refer suspected cases 9 of fraud, misrepresentation, or inadequate documentation to 10 appropriate entities for review of eligibility discrepancies in 11 other public programs. Such referral includes cases in which 12 an individual is determined to be ineligible for the original 13 program. 14 Sec. 3. REPORTING. Beginning July 1, 2016, and quarterly 15 thereafter, the department shall provide a written report to 16 the governor, the general assembly, and the department of 17 management detailing the effectiveness and general findings 18 of the eligibility verification system implemented pursuant 19 to this division of this Act, including the number of cases 20 reviewed, the number of case closures, the number of referrals 21 for criminal prosecution, recovery of improper payment, 22 collection of civil penalties, the outcomes of cases referred 23 to the department of inspections and appeals, the office of the 24 attorney general, or other entity responsible for prosecuting 25 eligibility or identity fraud under this division of this Act, 26 and the savings that have resulted from implementation of the 27 system. 28 Sec. 4. TRANSPARENCY IN THE MEDICAID PROGRAM. The 29 department shall electronically release to the public data that 30 includes but is not limited to all of the following for each 31 Medicaid provider: 32 1. The provider’s name and office location. 33 2. The provider’s national provider identifier. 34 3. The type of service provided, identified by healthcare 35 -7- LSB 1656YC (5) 86 pf/nh 7/ 10

H.F. _____ common procedure coding system code. 1 4. Whether the service was performed in a facility or office 2 setting. 3 5. The number of services provided, average submitted 4 charges, average allowed amount, average Medicaid payment, and 5 a count of unique Medicaid beneficiaries treated. 6 Sec. 5. ADOPTION OF RULES. The department shall adopt rules 7 pursuant to chapter 17A to administer this division of this 8 Act. 9 Sec. 6. IMPLEMENTATION. This division of this Act shall be 10 implemented beginning January 1, 2016. 11 DIVISION II 12 ASSET VERIFICATION 13 Sec. 7. MEDICAID PROGRAM —— ASSET, INCOME, AND IDENTITY 14 VERIFICATION. The department of human services shall issue a 15 request for proposals to contract with a third-party vendor to 16 establish an electronic asset, income, and identity eligibility 17 verification system for the purposes of compliance with 42 18 U.S.C. §1396w requiring determination or redetermination of 19 the eligibility of an individual who is an applicant for or 20 recipient of medical assistance under the Medicaid state plan 21 on the basis of being aged, blind, or disabled in accordance 22 with 42 U.S.C. §1396w. The third-party vendor selected shall 23 be able to demonstrate in writing its current relationships 24 or contracts with financial institutions in the state and 25 nationally. Participation by financial institutions in 26 providing account balances for asset verification shall remain 27 voluntary. 28 Sec. 8. EFFECTIVE UPON ENACTMENT. This division of this 29 Act, being deemed of immediate importance, takes effect upon 30 enactment. 31 EXPLANATION 32 The inclusion of this explanation does not constitute agreement with 33 the explanation’s substance by the members of the general assembly. 34 Division I of this bill directs the department of human 35 -8- LSB 1656YC (5) 86 pf/nh 8/ 10

H.F. _____ services (DHS) to establish a computerized income, asset, and 1 identity eligibility verification system to verify eligibility, 2 eliminate duplication of assistance, and deter waste, 3 fraud, and abuse within each respective assistance program 4 administered by the department. DHS is directed to enter into 5 a competitively bid contract with a third-party vendor for 6 the purposes of developing a system by which to verify the 7 income, asset, and identity information of applicants when 8 determining an applicant’s eligibility for assistance prior to 9 the distribution of benefits, periodically between eligibility 10 redeterminations, and during eligibility redeterminations 11 and reviews. Under any such contract, payment to the vendor 12 is contingent upon the annualized savings realized from 13 implementation of the verification system as specified in the 14 contract. 15 The bill specifies the databases, if available, against 16 which a third-party contractor must verify eligibility and 17 identity of applicants for and recipients of assistance 18 programs. The bill specifies the process to be used if 19 discrepancies are found in an applicant’s or recipient’s 20 identity or other information, directs DHS to adopt rules to 21 administer the program, and specifies to whom referrals for 22 fraud, misrepresentation, or inadequate documentation must be 23 made. 24 Division I of the bill requires implementation beginning 25 January 1, 2016; requires that beginning July 1, 2016, and 26 quarterly thereafter, DHS must provide a written report to 27 the governor, the general assembly, and the department of 28 management detailing the effectiveness and general findings 29 of the eligibility verification system; and requires DHS to 30 electronically release certain information regarding Medicaid 31 providers to the public. The bill also directs DHS to 32 electronically release to the public specified data relating 33 to Medicaid providers. 34 Division II of the bill directs DHS to issue a request for 35 -9- LSB 1656YC (5) 86 pf/nh 9/ 10