Senate Study Bill 1232 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON HUMAN RESOURCES BILL BY CHAIRPERSON MILLER-MEEKS) A BILL FOR An Act relating to reimbursement for dually eligible Medicare 1 and Medicaid members receiving the Medicare hospice benefit 2 and Medicaid-only members electing the hospice benefit in a 3 nursing facility. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2055XC (1) 88 pf/rh

S.F. _____ Section 1. DUALLY ELIGIBLE MEDICARE AND MEDICAID MEMBERS 1 AND MEDICAID-ONLY MEMBERS RECEIVING HOSPICE BENEFIT IN A 2 NURSING FACILITY —— ELIMINATION OF PASS-THROUGH PAYMENT. 3 1. The department of human services shall request federal 4 approval from the centers for Medicare and Medicaid services of 5 the United States department of health and human services for 6 a section 1115 demonstration waiver to allow for the payment 7 of the nursing facility room and board expenses for a dually 8 eligible Medicare and Medicaid member receiving the Medicare 9 hospice benefit or a Medicaid-only member electing the member’s 10 hospice benefit, to allow Medicaid managed care organizations 11 and the Medicaid fee-for-service payment system to reimburse 12 the nursing facility directly for the room and board expenses 13 at no less than ninety-five percent of the nursing facility’s 14 Medicaid fee-for-service rate rather than indirectly as a 15 pass-through payment from the hospice services provider. 16 The department of human services shall report receipt of 17 such approval to the chairpersons and ranking members of 18 the appropriations committees of the house and senate, the 19 co-chairpersons and ranking members of the joint appropriations 20 subcommittee on health and human services, and the legislative 21 services agency. 22 2. The department of human services shall adopt rules 23 pursuant to chapter 17A to administer this section and 24 specifically to allow Medicaid managed care organizations and 25 the department’s fee-for-service Medicaid payment system to 26 reimburse a nursing facility directly for the room and board 27 expenses at no less than ninety-five percent of the nursing 28 facility’s Medicaid fee-for-service rate as provided in this 29 section. 30 EXPLANATION 31 The inclusion of this explanation does not constitute agreement with 32 the explanation’s substance by the members of the general assembly. 33 This bill requires the department of human services (DHS) 34 to request federal approval from the centers for Medicare and 35 -1- LSB 2055XC (1) 88 pf/rh 1/ 3

S.F. _____ Medicaid services of the United States department of health and 1 human services for a section 1115 demonstration waiver to allow 2 for the payment of the nursing facility room and board expenses 3 for a dually eligible Medicare and Medicaid member receiving 4 the Medicare hospice benefit or a Medicaid-only member electing 5 the member’s hospice benefit, to allow Medicaid managed care 6 organizations (MCOs) and the Medicaid fee-for-service (FFS) 7 payment system to reimburse the nursing facility directly for 8 the room and board expenses at no less than 95 percent of the 9 nursing facility’s Medicaid FFS rate rather than indirectly 10 as a pass-through payment from the hospice services provider. 11 The bill requires DHS to report receipt of such approval to 12 the chairpersons and ranking members of the appropriations 13 committees of the house and senate, the co-chairpersons and 14 ranking members of the joint appropriations subcommittee 15 on health and human services, and the legislative services 16 agency. The bill requires DHS to adopt administrative rules 17 to administer the bill and specifically to allow Medicaid MCOs 18 and the department’s FFS Medicaid payment system to reimburse a 19 nursing facility directly for the room and board expenses at 20 no less than 95 percent of the nursing facility’s Medicaid FFS 21 rate as provided in the bill. 22 Currently, the Medicare hospice benefit covers the costs of 23 palliative care for an individual who is terminally ill in the 24 individual’s home or in a nursing facility. Medicare does not 25 have a long-term custodial nursing facility benefit, so if an 26 individual elects the Medicare hospice benefit in a nursing 27 facility, the individual’s room and board are not covered by 28 Medicare and the individual or a third-party payor must pay for 29 the costs of the room and board. For those individuals dually 30 eligible for Medicare and Medicaid who elect the Medicare 31 hospice benefit, Medicare is financially responsible for the 32 hospice care and the Medicaid program is the third-party payor 33 responsible for the nursing facility room and board expense. 34 For the nursing facility room and board care, the Medicaid 35 -2- LSB 2055XC (1) 88 pf/rh 2/ 3

S.F. _____ program must provide for payment in an amount equal to at least 1 95 percent of the Medicaid daily nursing facility base rate 2 (the rate the state Medicaid program pays for nursing facility 3 services furnished to an individual who has not elected to 4 receive hospice care). Historically, the Medicaid program 5 has paid the hospice provider for the nursing facility room 6 and board expenses of dually eligible individuals who elect 7 the hospice benefit, and the hospice provider has then passed 8 this payment on to the nursing facility under a contract with 9 the nursing facility. Current practice is for most hospice 10 providers to pay 100 percent of the nursing facility base rate 11 to the nursing facility. 12 Pursuant to 2018 Iowa Acts, chapter 1038, DHS was directed to 13 review the hospice benefit for dually eligible individuals in 14 a nursing facility and report options for elimination of the 15 pass-through payments to the chairperson and ranking members 16 of the joint appropriations subcommittee on health and human 17 services, the legislative service agency, and the legislative 18 caucus staffs on or before October 1, 2018. DHS submitted 19 the report that included four options. The bill reflects 20 option 1 of the report which is budget neutral with regard to 21 the dually eligible members and would require DHS to request 22 federal approval to allow Medicaid managed care organizations 23 and the Medicaid fee-for-service payment system to pay the 24 nursing facility directly for the nursing facility room and 25 board costs, and eliminate the pass-through payment utilizing 26 the hospice provider. 27 -3- LSB 2055XC (1) 88 pf/rh 3/ 3