S.F. 2213 Section 1. LEGISLATIVE FINDINGS —— GOALS AND INTENT. 1 1. The general assembly finds all of the following: 2 a. In the majority of states, Medicaid managed care has 3 been introduced on an incremental basis, beginning with the 4 enrollment of low-income children and parents and proceeding 5 in stages to include nonelderly persons with disabilities and 6 older individuals. Iowa, unlike the majority of states, is 7 implementing Medicaid managed care hastily and simultaneously 8 across a broad and diverse population that includes individuals 9 with complex health care and long-term services and supports 10 needs, making these individuals especially vulnerable to 11 receiving inappropriate, inadequate, or substandard services 12 and supports. 13 b. The success or failure of Medicaid managed care in Iowa 14 depends on proper strategic planning and strong oversight, and 15 the incorporation of the core values, principles, and goals 16 of the strategic plan into Medicaid managed care contractual 17 obligations. While Medicaid managed care techniques may create 18 pathways and offer opportunities toward quality improvement and 19 predictability in costs, if cost savings and administrative 20 efficiencies are the primary goals, Medicaid managed care may 21 instead erect new barriers and limit the care and support 22 options available, especially to high-need, vulnerable Medicaid 23 recipients. A well-designed strategic plan and effective 24 oversight ensure that cost savings, improved health outcomes, 25 and efficiencies are not achieved at the expense of diminished 26 program integrity, a reduction in the quality or availability 27 of services, or adverse consequences to the health and 28 well-being of Medicaid recipients. 29 c. Strategic planning should include all of the following: 30 (1) Guidance in establishing and maintaining a robust 31 and appropriate workforce and a provider network capable of 32 addressing all of the diverse, distinct, and wide-ranging 33 treatment and support needs of Medicaid recipients. 34 (2) Developing a sound methodology for establishing and 35 -1- SF 2213 (3) 86 pf/nh/jh 1/ 42

S.F. 2213 adjusting capitation rates to account for all essential costs 1 involved in treating and supporting the entire spectrum of 2 needs across recipient populations. 3 (3) Addressing the sufficiency of information and data 4 resources to enable review of factors such as utilization, 5 service trends, system performance, and outcomes. 6 (4) Building effective working relationships and developing 7 strategies to support community-level integration that provides 8 cross-system coordination and synchronization among the various 9 service sectors, providers, agencies, and organizations to 10 further holistic well-being and population health goals. 11 d. While the contracts entered into between the state 12 and managed care organizations function as a mechanism for 13 enforcing requirements established by the federal and state 14 governments and allow states to shift the financial risk 15 associated with caring for Medicaid recipients to these 16 contractors, the state ultimately retains responsibility for 17 the Medicaid program and the oversight of the performance of 18 the program’s contractors. Administration of the Medicaid 19 program benefits by managed care organizations should not be 20 viewed by state policymakers and state agencies as a means of 21 divesting themselves of their constitutional and statutory 22 responsibilities to ensure that recipients of publicly funded 23 services and supports, as well as taxpayers in general, are 24 effectively served. 25 e. Overseeing the performance of Medicaid managed care 26 contractors requires a different set of skills than those 27 required for administering a fee-for-service program. In the 28 absence of the in-house capacity of the department of human 29 services to perform tasks specific to Medicaid managed care 30 oversight, the state essentially cedes its responsibilities 31 to private contractors and relinquishes its accountability 32 to the public. In order to meet these responsibilities, 33 state policymakers must ensure that the state, including the 34 department of human services as the state Medicaid agency, has 35 -2- SF 2213 (3) 86 pf/nh/jh 2/ 42

S.F. 2213 the authority and resources, including the adequate number of 1 qualified personnel and the necessary tools, to carry out these 2 responsibilities, provide effective administration, and ensure 3 accountability and compliance. 4 f. State policymakers must also ensure that Medicaid 5 managed care contracts contain, at a minimum, clear, 6 unambiguous performance standards, operating guidelines, 7 data collection, maintenance, retention, and reporting 8 requirements, and outcomes expectations so that contractors 9 and subcontractors are held accountable to clear contract 10 specifications. 11 g. As with all system and program redesign efforts 12 undertaken in the state to date, the assumption of the 13 administration of Medicaid program benefits by managed care 14 organizations must involve ongoing stakeholder input and 15 earn the trust and support of these stakeholders. Medicaid 16 recipients, providers, advocates, and other stakeholders have 17 intimate knowledge of the people and processes involved in 18 ensuring the health and safety of Medicaid recipients, and are 19 able to offer valuable insight into the barriers likely to be 20 encountered as well as propose solutions for overcoming these 21 obstacles. Local communities and providers of services and 22 supports have firsthand experience working with the Medicaid 23 recipients they serve and are able to identify factors that 24 must be considered to make a system successful. Agencies and 25 organizations that have specific expertise and experience with 26 the services and supports needs of Medicaid recipients and 27 their families are uniquely placed to provide needed assistance 28 in developing the measures for and in evaluating the quality 29 of the program. 30 2. It is the intent of the general assembly that the 31 Medicaid program be implemented and administered, including 32 through Medicaid managed care policies and contract provisions, 33 in a manner that safeguards the interests of Medicaid 34 recipients, encourages the participation of Medicaid providers, 35 -3- SF 2213 (3) 86 pf/nh/jh 3/ 42

S.F. 2213 and protects the interests of all taxpayers, while attaining 1 the goals of Medicaid modernization to improve quality and 2 access, promote accountability for outcomes, and create a more 3 predictable and sustainable Medicaid budget. 4 HEALTH POLICY OVERSIGHT COMMITTEE 5 Sec. 2. Section 2.45, subsection 6, Code 2016, is amended 6 to read as follows: 7 6. The legislative health policy oversight committee, which 8 shall be composed of ten members of the general assembly, 9 consisting of five members from each house, to be appointed 10 by the legislative council. The legislative health policy 11 oversight committee shall receive updates and review data, 12 public input and concerns, and make recommendations for 13 improvements to and changes in law or rule regarding Medicaid 14 managed care meet at least four times annually to evaluate 15 state health policy and provide continuing oversight for 16 publicly funded programs, including but not limited to all 17 facets of the Medicaid and hawk-i programs to, at a minimum, 18 ensure effective and efficient administration of these 19 programs, address stakeholder concerns, monitor program costs 20 and expenditures, and make recommendations relative to the 21 programs . 22 Sec. 3. HEALTH POLICY OVERSIGHT COMMITTEE —— SUBJECT 23 MATTER REVIEW FOR 2016 LEGISLATIVE INTERIM. During the 2016 24 legislative interim, the health policy oversight committee 25 created in section 2.45 shall, as part of the committee’s 26 evaluation of state health policy and review of all facets 27 of the Medicaid and hawk-i programs, review and make 28 recommendations regarding, at a minimum, all of the following: 29 1. The resources and duties of the office of long-term 30 care ombudsman relating to the provision of assistance to and 31 advocacy for Medicaid recipients to determine the designation 32 of duties and level of resources necessary to appropriately 33 address the needs of such individuals. The committee shall 34 consider the health consumer ombudsman alliance report 35 -4- SF 2213 (3) 86 pf/nh/jh 4/ 42

S.F. 2213 submitted to the general assembly in December 2015, as well as 1 input from the office of long-term care ombudsman and other 2 entities in making recommendations. 3 2. The health benefits and health benefit utilization 4 management criteria for the Medicaid and hawk-i programs to 5 determine the sufficiency and appropriateness of the benefits 6 offered and the utilization of these benefits. 7 3. Prior authorization requirements relative to benefits 8 provided under the Medicaid and hawk-i programs, including but 9 not limited to pharmacy benefits. 10 4. Consistency and uniformity in processes, procedures, 11 forms, and other activities across all Medicaid and hawk-i 12 program participating insurers and managed care organizations, 13 including but not limited to cost and quality reporting, 14 credentialing, billing, prior authorization, and critical 15 incident reporting. 16 5. Provider network adequacy including the use of 17 out-of-network and out-of-state providers. 18 6. The role and interplay of other advisory and oversight 19 entities, including but not limited to the medical assistance 20 advisory council and the hawk-i board. 21 REVIEW OF PROGRAM INTEGRITY DUTIES 22 Sec. 4. REVIEW OF PROGRAM INTEGRITY DUTIES —— WORKGROUP —— 23 REPORT. 24 1. The director of human services shall convene a 25 workgroup comprised of members including the commissioner 26 of insurance, the auditor of state, the Medicaid director 27 and bureau chiefs of the managed care organization oversight 28 and supports bureau, the Iowa Medicaid enterprise support 29 bureau, and the medical and long-term services and supports 30 bureau, and a representative of the program integrity unit, 31 or their designees; and representatives of other appropriate 32 state agencies or other entities including but not limited to 33 the office of the attorney general, the office of long-term 34 care ombudsman, and the Medicaid fraud control unit of the 35 -5- SF 2213 (3) 86 pf/nh/jh 5/ 42

S.F. 2213 investigations division of the department of inspections and 1 appeals. The workgroup shall do all of the following: 2 a. Review the duties of each entity with responsibilities 3 relative to Medicaid program integrity and managed care 4 organizations; review state and federal laws, regulations, 5 requirements, guidance, and policies relating to Medicaid 6 program integrity and managed care organizations; and review 7 the laws of other states relating to Medicaid program integrity 8 and managed care organizations. The workgroup shall determine 9 areas of duplication, fragmentation, and gaps; shall identify 10 possible integration, collaboration and coordination of duties; 11 and shall determine whether existing general state Medicaid 12 program and fee-for-service policies, laws, and rules are 13 sufficient, or if changes or more specific policies, laws, and 14 rules are required to provide for comprehensive and effective 15 administration and oversight of the Medicaid program including 16 under the fee-for-service and managed care methodologies. 17 b. Review historical uses of the Medicaid fraud fund created 18 in section 249A.50 and make recommendations for future uses 19 of the moneys in the fund and any changes in law necessary to 20 adequately address program integrity. 21 c. Review medical loss ratio provisions relative to 22 Medicaid managed care contracts and make recommendations 23 regarding, at a minimum, requirements for the necessary 24 collection, maintenance, retention, reporting, and sharing of 25 data and information by Medicaid managed care organizations 26 for effective determination of compliance, and to identify 27 the costs and activities that should be included in the 28 calculation of administrative costs, medical costs or benefit 29 expenses, health quality improvement costs, and other costs and 30 activities incidental to the determination of a medical loss 31 ratio. 32 d. Review the capacity of state agencies, including the need 33 for specialized training and expertise, to address Medicaid 34 and managed care organization program integrity and provide 35 -6- SF 2213 (3) 86 pf/nh/jh 6/ 42

S.F. 2213 recommendations for the provision of necessary resources and 1 infrastructure, including annual budget projections. 2 e. Review the incentives and penalties applicable to 3 violations of program integrity requirements to determine their 4 adequacy in combating waste, fraud, abuse, and other violations 5 that divert limited resources that would otherwise be expended 6 to safeguard the health and welfare of Medicaid recipients, 7 and make recommendations for necessary adjustments to improve 8 compliance. 9 f. Make recommendations regarding the quarterly and annual 10 auditing of financial reports required to be performed for 11 each Medicaid managed care organization to ensure that the 12 activities audited provide sufficient information to the 13 division of insurance of the department of commerce and the 14 department of human services to ensure program integrity. The 15 recommendations shall also address the need for additional 16 audits or other reviews of managed care organizations. 17 g. Review and make recommendations to prohibit 18 cost-shifting between state and local and public and private 19 funding sources for services and supports provided to Medicaid 20 recipients whether directly or indirectly through the Medicaid 21 program. 22 2. The department of human services shall submit a report 23 of the workgroup to the governor, the health policy oversight 24 committee created in section 2.45, and the general assembly 25 initially, on or before November 15, 2016, and on or before 26 November 15, on an annual basis thereafter, to provide findings 27 and recommendations for a coordinated approach to comprehensive 28 and effective administration and oversight of the Medicaid 29 program including under the fee-for-service and managed care 30 methodologies. 31 MEDICAID REINVESTMENT FUND 32 Sec. 5. NEW SECTION . 249A.4C Medicaid reinvestment fund. 33 1. A Medicaid reinvestment fund is created in the state 34 treasury under the authority of the department. The department 35 -7- SF 2213 (3) 86 pf/nh/jh 7/ 42

S.F. 2213 of human services shall collect an initial contribution of five 1 million dollars from each of the managed care organizations 2 contracting with the state during the fiscal year beginning 3 July 1, 2015, for an aggregate amount of fifteen million 4 dollars, and shall deposit such amount in the fund to be 5 used for Medicaid ombudsman activities through the office 6 of long-term care ombudsman. Additionally, moneys from 7 savings realized from the movement of Medicaid recipients from 8 institutional settings to home and community-based services, 9 the portion of the capitation rate withheld from and not 10 returned to Medicaid managed care organizations at the end 11 of each fiscal year, any recouped excess of capitation rates 12 paid to Medicaid managed care organizations, any overpayments 13 recovered under Medicaid managed care contracts, and any 14 other savings realized from Medicaid managed care or from 15 Medicaid program cost-containment efforts, with the exception 16 of the total amount attributable to the projected savings from 17 Medicaid managed care based on the initial capitation rates 18 established for the fiscal year beginning July 1, 2015, shall 19 be credited to the Medicaid reinvestment fund. 20 2. Notwithstanding section 8.33, moneys credited to 21 the fund from any other account or fund shall not revert to 22 the other account or fund. Moneys in the fund shall only 23 be used as provided in appropriations from the fund for 24 the Medicaid program and for health system transformation 25 and integration, including but not limited to providing 26 the necessary infrastructure and resources to protect the 27 interests of Medicaid recipients, maintaining adequate provider 28 participation, and ensuring program integrity. Such uses may 29 include but are not limited to: 30 a. Ensuring appropriate reimbursement of Medicaid 31 providers to maintain the type and number of appropriately 32 trained providers necessary to address the needs of Medicaid 33 recipients. 34 b. Providing home and community-based services as necessary 35 -8- SF 2213 (3) 86 pf/nh/jh 8/ 42

S.F. 2213 to rebalance the long-term services and supports infrastructure 1 and to reduce Medicaid home and community-based services waiver 2 waiting lists. 3 c. Ensuring that a fully functioning independent Medicaid 4 ombudsman program through the office of long-term care 5 ombudsman is available to provide advocacy services and 6 assistance to eligible and potentially eligible Medicaid 7 recipients. 8 d. Ensuring adequate and appropriate capacity of the 9 department of human services as the single state agency 10 designated to administer and supervise the administration of 11 the Medicaid program, to ensure compliance with state and 12 federal law and program integrity requirements. 13 e. Addressing workforce issues to ensure a competent, 14 diverse, and sustainable health care workforce and to 15 improve access to health care in underserved areas and among 16 underserved populations, recognizing long-term services and 17 supports as an essential component of the health care system. 18 f. Supporting innovation, longer-term community 19 investments, and the activities of local public health 20 agencies, aging and disability resource centers and service 21 agencies, mental health and disability services regions, social 22 services, and child welfare entities and other providers of 23 and advocates for services and supports to encourage health 24 system transformation and integration through a broad range of 25 prevention strategies and population-based approaches to meet 26 the holistic needs of the population as a whole. 27 3. The department shall establish a mechanism to measure and 28 certify the amount of savings resulting from Medicaid managed 29 care and Medicaid program cost-containment activities and shall 30 ensure that such realized savings are credited to the fund and 31 used as provided in appropriations from the fund. 32 MEDICAID OMBUDSMAN 33 Sec. 6. Section 231.44, Code 2016, is amended to read as 34 follows: 35 -9- SF 2213 (3) 86 pf/nh/jh 9/ 42

S.F. 2213 231.44 Utilization of resources —— assistance and advocacy 1 related to long-term services and supports under the Medicaid 2 program. 3 1. The office of long-term care ombudsman may shall 4 utilize its available resources to provide assistance and 5 advocacy services to eligible recipients of long-term services 6 and supports , or individuals seeking long-term services and 7 supports, and the families or legal representatives of such 8 eligible recipients, of long-term services and supports 9 provided through individuals under the Medicaid program. Such 10 assistance and advocacy shall include but is not limited to all 11 of the following: 12 a. Assisting recipients such individuals in understanding 13 the services, coverage, and access provisions and their rights 14 under Medicaid managed care. 15 b. Developing procedures for the tracking and reporting 16 of the outcomes of individual requests for assistance, the 17 obtaining of necessary services and supports, and other 18 aspects of the services provided to eligible recipients such 19 individuals . 20 c. Providing advice and assistance relating to the 21 preparation and filing of complaints, grievances, and appeals 22 of complaints or grievances, including through processes 23 available under managed care plans and the state appeals 24 process, relating to long-term services and supports under the 25 Medicaid program. 26 d. Accessing the results of a review of a level of care 27 assessment or reassessment by a managed care organization 28 in which the managed care organization recommends denial or 29 limited authorization of a service, including the type or level 30 of service, the reduction, suspension, or termination of a 31 previously authorized service, or a change in level of care, 32 upon the request of an affected individual. 33 e. Receiving notices of disenrollment or notices that would 34 result in a change in level of care for affected individuals, 35 -10- SF 2213 (3) 86 pf/nh/jh 10/ 42

S.F. 2213 including involuntary and voluntary discharges or transfers, 1 from the department of human services or a managed care 2 organization. 3 2. A representative of the office of long-term care 4 ombudsman providing assistance and advocacy services authorized 5 under this section for an individual, shall be provided 6 access to the individual, and shall be provided access to 7 the individual’s medical and social records as authorized by 8 the individual or the individual’s legal representative, as 9 necessary to carry out the duties specified in this section . 10 3. A representative of the office of long-term care 11 ombudsman providing assistance and advocacy services authorized 12 under this section for an individual, shall be provided access 13 to administrative records related to the provision of the 14 long-term services and supports to the individual, as necessary 15 to carry out the duties specified in this section . 16 4. The office of long-term care ombudsman and 17 representatives of the office, when providing assistance and 18 advocacy services under this section, shall be considered a 19 health oversight agency as defined in 45 C.F.R. §164.501 for 20 the purposes of health oversight activities as described in 21 45 C.F.R. §164.512(d) including access to the health records 22 and other appropriate information of an individual, including 23 from the department of human services or the applicable 24 Medicaid managed care organization, as necessary to fulfill the 25 duties specified under this section. The department of human 26 services, in collaboration with the office of long-term care 27 ombudsman, shall adopt rules to ensure compliance by affected 28 entities with this subsection and to ensure recognition of the 29 office of long-term care ombudsman as a duly authorized and 30 identified agent or representative of the state. 31 5. The department of human services and Medicaid managed 32 care organizations shall inform eligible and potentially 33 eligible Medicaid recipients of the advocacy services and 34 assistance available through the office of long-term care 35 -11- SF 2213 (3) 86 pf/nh/jh 11/ 42

S.F. 2213 ombudsman and shall provide contact and other information 1 regarding the advocacy services and assistance to eligible and 2 potentially eligible Medicaid recipients as directed by the 3 office of long-term care ombudsman. 4 6. When providing assistance and advocacy services under 5 this section, the office of long-term care ombudsman shall act 6 as an independent agency, and the office of long-term care 7 ombudsman and representatives of the office shall be free of 8 any undue influence that restrains the ability of the office 9 or the office’s representatives from providing such services 10 and assistance. 11 7. The office of long-term care ombudsman shall, in addition 12 to other duties prescribed and at a minimum, do all of the 13 following in the furtherance of the provision of advocacy 14 services and assistance under this section: 15 a. Represent the interests of eligible and potentially 16 eligible Medicaid recipients before governmental agencies. 17 b. Analyze, comment on, and monitor the development and 18 implementation of federal, state, and local laws, regulations, 19 and other governmental policies and actions, and recommend 20 any changes in such laws, regulations, policies, and actions 21 as determined appropriate by the office of long-term care 22 ombudsman. 23 c. To maintain transparency and accountability for 24 activities performed under this section, including for the 25 purposes of claiming federal financial participation for 26 activities that are performed to assist with administration of 27 the Medicaid program: 28 (1) Have complete and direct responsibility for the 29 administration, operation, funding, fiscal management, and 30 budget related to such activities, and directly employ, 31 oversee, and supervise all paid and volunteer staff associated 32 with these activities. 33 (2) Establish separation-of-duties requirements, provide 34 limited access to work space and work product for only 35 -12- SF 2213 (3) 86 pf/nh/jh 12/ 42

S.F. 2213 necessary staff, and limit access to documents and information 1 as necessary to maintain the confidentiality of the protected 2 health information of individuals served under this section. 3 (3) Collect and submit, annually, to the governor, the 4 health policy oversight committee created in section 2.45, and 5 the general assembly, all of the following with regard to those 6 seeking advocacy services or assistance under this section: 7 (a) The number of contacts by contact type and geographic 8 location. 9 (b) The type of assistance requested including the name of 10 the managed care organization involved, if applicable. 11 (c) The time frame between the time of the initial contact 12 and when an initial response was provided. 13 (d) The amount of time from the initial contact to 14 resolution of the problem or concern. 15 (e) The actions taken in response to the request for 16 advocacy or assistance. 17 (f) The outcomes of requests to address problems or 18 concerns. 19 4. 8. For the purposes of this section : 20 a. “Institutional setting” includes a long-term care 21 facility, an elder group home, or an assisted living program. 22 b. “Long-term services and supports” means the broad range of 23 health, health-related, and personal care assistance services 24 and supports, provided in both institutional settings and home 25 and community-based settings, necessary for older individuals 26 and persons with disabilities who experience limitations in 27 their capacity for self-care due to a physical, cognitive, or 28 mental disability or condition. 29 Sec. 7. NEW SECTION . 231.44A Willful interference with 30 duties related to long-term services and supports —— penalty. 31 Willful interference with a representative of the office of 32 long-term care ombudsman in the performance of official duties 33 in accordance with section 231.44 is a violation of section 34 231.44, subject to a penalty prescribed by rule. The office 35 -13- SF 2213 (3) 86 pf/nh/jh 13/ 42

S.F. 2213 of long-term care ombudsman shall adopt rules specifying the 1 amount of a penalty imposed, consistent with the penalties 2 imposed under section 231.42, subsection 8, and specifying 3 procedures for notice and appeal of penalties imposed. Any 4 moneys collected pursuant to this section shall be deposited in 5 the Medicaid reinvestment fund created in section 249A.4C. 6 MEDICAL ASSISTANCE ADVISORY COUNCIL 7 Sec. 8. Section 249A.4B, Code 2016, is amended to read as 8 follows: 9 249A.4B Medical assistance advisory council. 10 1. A medical assistance advisory council is created to 11 comply with 42 C.F.R. §431.12 based on section 1902(a)(4) of 12 the federal Social Security Act and to advise the director 13 about health and medical care services under the medical 14 assistance Medicaid program , participate in Medicaid policy 15 development and program administration, and provide guidance 16 on key issues related to the Medicaid program, whether 17 administered under a fee-for-service, managed care, or other 18 methodology, including but not limited to access to care, 19 quality of care, and service delivery . 20 a. The council shall have the opportunity for participation 21 in policy development and program administration, including 22 furthering the participation of recipients of the program, and 23 without limiting this general authority shall specifically do 24 all of the following: 25 (1) Formulate, review, evaluate, and recommend policies, 26 rules, agency initiatives, and legislation pertaining to the 27 Medicaid program. The council shall have the opportunity 28 to comment on proposed rules prior to commencement of the 29 rulemaking process and on waivers and state plan amendment 30 applications. 31 (2) Prior to the annual budget development process, engage 32 in setting priorities, including consideration of the scope 33 and utilization management criteria for benefits, beneficiary 34 eligibility, provider and services reimbursement rates, and 35 -14- SF 2213 (3) 86 pf/nh/jh 14/ 42

S.F. 2213 other budgetary issues. 1 (3) Provide oversight for and review of the administration 2 of the Medicaid program. 3 (4) Ensure that the membership of the council effectively 4 represents all relevant and concerned viewpoints, particularly 5 those of consumers, providers, and the general public; create 6 public understanding; and ensure that the services provided 7 under the Medicaid program meet the needs of the people served. 8 b. The council shall meet no more than at least quarterly , 9 and prior to the next subsequent meeting of the executive 10 committee . The director of public health The public member 11 acting as a co-chairperson of the executive committee and 12 the professional or business entity member acting as a 13 co-chairperson of the executive committee, shall serve as 14 chairperson co-chairpersons of the council. 15 2. The council shall include all of the following voting 16 members: 17 a. The president, or the president’s representative, of each 18 of the following professional or business entities, or a member 19 of each of the following professional or business entities, 20 selected by the entity: 21 (1) The Iowa medical society. 22 (2) The Iowa osteopathic medical association. 23 (3) The Iowa academy of family physicians. 24 (4) The Iowa chapter of the American academy of pediatrics. 25 (5) The Iowa physical therapy association. 26 (6) The Iowa dental association. 27 (7) The Iowa nurses association. 28 (8) The Iowa pharmacy association. 29 (9) The Iowa podiatric medical society. 30 (10) The Iowa optometric association. 31 (11) The Iowa association of community providers. 32 (12) The Iowa psychological association. 33 (13) The Iowa psychiatric society. 34 (14) The Iowa chapter of the national association of social 35 -15- SF 2213 (3) 86 pf/nh/jh 15/ 42

S.F. 2213 workers. 1 (15) The coalition for family and children’s services in 2 Iowa. 3 (16) The Iowa hospital association. 4 (17) The Iowa association of rural health clinics. 5 (18) The Iowa primary care association. 6 (19) Free clinics of Iowa. 7 (20) The opticians’ association of Iowa, inc. 8 (21) The Iowa association of hearing health professionals. 9 (22) The Iowa speech and hearing association. 10 (23) The Iowa health care association. 11 (24) The Iowa association of area agencies on aging. 12 (25) AARP. 13 (26) The Iowa caregivers association. 14 (27) The Iowa coalition of home and community-based 15 services for seniors. 16 (28) The Iowa adult day services association. 17 (29) Leading age Iowa. 18 (30) The Iowa association for home care. 19 (31) The Iowa council of health care centers. 20 (32) The Iowa physician assistant society. 21 (33) The Iowa association of nurse practitioners. 22 (34) The Iowa nurse practitioner society. 23 (35) The Iowa occupational therapy association. 24 (36) The ARC of Iowa, formerly known as the association for 25 retarded citizens of Iowa. 26 (37) The national alliance for the mentally ill on mental 27 illness of Iowa. 28 (38) The Iowa state association of counties. 29 (39) The Iowa developmental disabilities council. 30 (40) The Iowa chiropractic society. 31 (41) The Iowa academy of nutrition and dietetics. 32 (42) The Iowa behavioral health association. 33 (43) The midwest association for medical equipment services 34 or an affiliated Iowa organization. 35 -16- SF 2213 (3) 86 pf/nh/jh 16/ 42

S.F. 2213 (44) The Iowa public health association. 1 (45) The epilepsy foundation. 2 b. Public representatives which may include members of 3 consumer groups, including recipients of medical assistance or 4 their families, consumer organizations, and others, which shall 5 be appointed by the governor in equal in number to the number 6 of representatives of the professional and business entities 7 specifically represented under paragraph “a” , appointed by the 8 governor for staggered terms of two years each, none of whom 9 shall be members of, or practitioners of, or have a pecuniary 10 interest in any of the professional or business entities 11 specifically represented under paragraph “a” , and a majority 12 of whom shall be current or former recipients of medical 13 assistance or members of the families of current or former 14 recipients. 15 3. The council shall include all of the following nonvoting 16 members: 17 c. a. The director of public health, or the director’s 18 designee. 19 d. b. The director of the department on aging, or the 20 director’s designee. 21 c. The state long-term care ombudsman, or the ombudsman’s 22 designee. 23 d. The ombudsman appointed pursuant to section 2C.3, or the 24 ombudsman’s designee. 25 e. The dean of Des Moines university —— osteopathic medical 26 center, or the dean’s designee. 27 f. The dean of the university of Iowa college of medicine, 28 or the dean’s designee. 29 g. The following members of the general assembly, each for a 30 term of two years as provided in section 69.16B : 31 (1) Two members of the house of representatives, one 32 appointed by the speaker of the house of representatives 33 and one appointed by the minority leader of the house of 34 representatives from their respective parties. 35 -17- SF 2213 (3) 86 pf/nh/jh 17/ 42

S.F. 2213 (2) Two members of the senate, one appointed by the 1 president of the senate after consultation with the majority 2 leader of the senate and one appointed by the minority leader 3 of the senate. 4 3. 4. a. An executive committee of the council is created 5 and shall consist of the following members of the council: 6 (1) As voting members: 7 (a) Five of the professional or business entity members 8 designated pursuant to subsection 2 , paragraph “a” , and 9 selected by the members specified under that paragraph. 10 (2) (b) Five of the public members appointed pursuant 11 to subsection 2 , paragraph “b” , and selected by the members 12 specified under that paragraph. Of the five public members, at 13 least one member shall be a recipient of medical assistance. 14 (3) (2) As nonvoting members: 15 (a) The director of public health, or the director’s 16 designee. 17 (b) The director of the department on aging, or the 18 director’s designee. 19 (c) The state long-term care ombudsman, or the ombudsman’s 20 designee. 21 (d) The ombudsman appointed pursuant to section 2C.3, or the 22 ombudsman’s designee. 23 b. The executive committee shall meet on a monthly basis. 24 The director of public health A public member of the executive 25 committee selected by the public members appointed pursuant to 26 subsection 2, paragraph “b” , and a professional or business 27 entity member of the executive committee selected by the 28 professional or business entity members appointed pursuant 29 to subsection 2, paragraph “a” , shall serve as chairperson 30 co-chairpersons of the executive committee. 31 c. Based upon the deliberations of the council , and the 32 executive committee, and the subcommittees, the executive 33 committee , the council, and the subcommittees, respectively, 34 shall make recommendations to the director , to the health 35 -18- SF 2213 (3) 86 pf/nh/jh 18/ 42

S.F. 2213 policy oversight committee created in section 2.45, to the 1 general assembly’s joint appropriations subcommittee on health 2 and human services, and to the general assembly’s standing 3 committees on human resources regarding the budget, policy, and 4 administration of the medical assistance program. 5 5. a. The council shall create the following subcommittees, 6 and may create additional subcommittees as necessary to address 7 Medicaid program policies, administration, budget, and other 8 factors and issues: 9 (1) A stakeholder safeguards subcommittee, for which 10 the co-chairpersons shall be a public member of the council 11 appointed pursuant to subsection 2, paragraph “b” , and selected 12 by the public members of the council, and a representative 13 of a professional or business entity appointed pursuant to 14 subsection 2, paragraph “a” , and selected by the professional or 15 business entity representatives of the council. The mission 16 of the stakeholder safeguards subcommittee is to provide for 17 ongoing stakeholder engagement and feedback on issues affecting 18 Medicaid recipients, providers, and other stakeholders, 19 including but not limited to benefits such as transportation, 20 benefit utilization management, the inclusion of out-of-state 21 and out-of-network providers and the use of single-case 22 agreements, and reimbursement of providers and services. 23 (2) The long-term services and supports subcommittee 24 which shall be chaired by the state long-term care ombudsman, 25 or the ombudsman’s designee. The mission of the long-term 26 services and supports subcommittee is to be a resource and to 27 provide advice on policy development and program administration 28 relating to Medicaid long-term services and supports including 29 but not limited to developing outcomes and performance 30 measures for Medicaid managed care for the long-term services 31 and supports population; addressing issues related to home 32 and community-based services waivers and waiting lists; and 33 reviewing the system of long-term services and supports to 34 ensure provision of home and community-based services and the 35 -19- SF 2213 (3) 86 pf/nh/jh 19/ 42

S.F. 2213 rebalancing of the health care infrastructure in accordance 1 with state and federal law including but not limited to the 2 principles established in Olmstead v. L.C., 527 U.S. 581 3 (1999) and the federal Americans with Disabilities Act and 4 in a manner that reflects a sustainable, person-centered 5 approach to improve health and life outcomes, supports 6 maximum independence, addresses medical and social needs in a 7 coordinated, integrated manner, and provides for sufficient 8 resources including a stable, well-qualified workforce. The 9 subcommittee shall also address and make recommendations 10 regarding the need for an ombudsman function for eligible and 11 potentially eligible Medicaid recipients beyond the long-term 12 services and supports population. 13 (3) The transparency, data, and program evaluation 14 subcommittee which shall be chaired by the director of the 15 university of Iowa public policy center, or the director’s 16 designee. The mission of the transparency, data, and program 17 evaluation subcommittee is to ensure Medicaid program 18 transparency; ensure the collection, maintenance, retention, 19 reporting, and analysis of sufficient and meaningful data to 20 provide transparency and inform policy development and program 21 effectiveness; support development and administration of a 22 consumer-friendly dashboard; and promote the ongoing evaluation 23 of Medicaid stakeholder satisfaction with the Medicaid program. 24 (4) The program integrity subcommittee which shall be 25 chaired by the Medicaid director, or the director’s designee. 26 The mission of the program integrity subcommittee is to ensure 27 that a comprehensive system including specific policies, laws, 28 and rules and adequate resources and measures are in place to 29 effectively administer the program and to maintain compliance 30 with federal and state program integrity requirements. 31 (5) A health workforce subcommittee, co-chaired by the 32 bureau chief of the bureau of oral and health delivery systems 33 of the department of public health, or the bureau chief’s 34 designee, and the director of the national alliance on mental 35 -20- SF 2213 (3) 86 pf/nh/jh 20/ 42

S.F. 2213 illness of Iowa, or the director’s designee. The mission of 1 the health workforce subcommittee is to assess the sufficiency 2 and proficiency of the current and projected health workforce; 3 identify barriers to and gaps in health workforce development 4 initiatives and health workforce data to provide foundational, 5 evidence-based information to inform policymaking and resource 6 allocation; evaluate the most efficient application and 7 utilization of roles, functions, responsibilities, activities, 8 and decision-making capacity of health care professionals and 9 other allied and support personnel; and make recommendations 10 for improvement in, and alternative modes of, health care 11 delivery in order to provide a competent, diverse, and 12 sustainable health workforce in the state. The subcommittee 13 shall work in collaboration with the office of statewide 14 clinical education programs of the university of Iowa Carver 15 college of medicine, Des Moines university, Iowa workforce 16 development, and other entities with interest or expertise in 17 the health workforce in carrying out the subcommittee’s duties 18 and developing recommendations. 19 b. The co-chairpersons of the council shall appoint 20 members to each subcommittee from the general membership of 21 the council. Consideration in appointing subcommittee members 22 shall include the individual’s knowledge about, and interest or 23 expertise in, matters that come before the subcommittee. 24 c. Subcommittees shall meet at the call of the 25 co-chairpersons or chairperson of the subcommittee, or at the 26 request of a majority of the members of the subcommittee. 27 4. 6. For each council meeting, executive committee 28 meeting, or subcommittee meeting, a quorum shall consist of 29 fifty percent of the membership qualified to vote. Where a 30 quorum is present, a position is carried by a majority of the 31 members qualified to vote. 32 7. For each council meeting, other than those held during 33 the time the general assembly is in session, each legislative 34 member of the council shall be reimbursed for actual travel 35 -21- SF 2213 (3) 86 pf/nh/jh 21/ 42

S.F. 2213 and other necessary expenses and shall receive a per diem 1 as specified in section 7E.6 for each day in attendance, as 2 shall the members of the council , or the executive committee , 3 or a subcommittee, for each day in attendance at a council, 4 executive committee, or subcommittee meeting, who are 5 recipients or the family members of recipients of medical 6 assistance, regardless of whether the general assembly is in 7 session. 8 5. 8. The department shall provide staff support and 9 independent technical assistance to the council , and the 10 executive committee , and the subcommittees . 11 6. 9. The director shall consider comply with the 12 requirements of this section regarding the duties of the 13 council, and the deliberations and recommendations offered 14 by of the council , and the executive committee , and the 15 subcommittees shall be reflected in the director’s preparation 16 of medical assistance budget recommendations to the council on 17 human services pursuant to section 217.3 , and in implementation 18 of medical assistance program policies , and in administration 19 of the Medicaid program . 20 10. The council, executive committee, and subcommittees 21 shall jointly submit quarterly reports to the health policy 22 oversight committee created in section 2.45 and shall jointly 23 submit a report to the governor and the general assembly 24 initially by January 1, 2017, and annually, therefore, 25 summarizing the outcomes and findings of their respective 26 deliberations and any recommendations including but not limited 27 to those for changes in law or policy. 28 11. The council, executive committee, and subcommittees 29 may enlist the services of persons who are qualified by 30 education, expertise, or experience to advise, consult with, 31 or otherwise assist the council, executive committee, or 32 subcommittees in the performance of their duties. The council, 33 executive committee, or subcommittees may specifically enlist 34 the assistance of entities such as the university of Iowa 35 -22- SF 2213 (3) 86 pf/nh/jh 22/ 42

S.F. 2213 public policy center to provide ongoing evaluation of the 1 Medicaid program and to make evidence-based recommendations to 2 improve the program. The council, executive committee, and 3 subcommittees shall enlist input from the patient-centered 4 health advisory council created in section 135.159, the mental 5 health and disabilities services commission created in section 6 225C.5, the commission on aging created in section 231.11, 7 the bureau of substance abuse of the department of public 8 health, the Iowa developmental disabilities council, and other 9 appropriate state and local entities to provide advice to the 10 council, executive committee, and subcommittees. 11 12. The department, in accordance with 42 C.F.R. §431.12, 12 shall seek federal financial participation for the activities 13 of the council, the executive committee, and the subcommittees. 14 PATIENT-CENTERED HEALTH RESOURCES AND INFRASTRUCTURE 15 Sec. 9. Section 135.159, subsection 2, Code 2016, is amended 16 to read as follows: 17 2. a. The department shall establish a patient-centered 18 health advisory council which shall include but is not limited 19 to all of the following members, selected by their respective 20 organizations, and any other members the department determines 21 necessary to assist in the department’s duties at various 22 stages of development of the medical home system and in the 23 transformation to a patient-centered infrastructure that 24 integrates and coordinates services and supports to address 25 social determinants of health and meet population health goals : 26 (1) The director of human services, or the director’s 27 designee. 28 (2) The commissioner of insurance, or the commissioner’s 29 designee. 30 (3) A representative of the federation of Iowa insurers. 31 (4) A representative of the Iowa dental association. 32 (5) A representative of the Iowa nurses association. 33 (6) A physician and an osteopathic physician licensed 34 pursuant to chapter 148 who are family physicians and members 35 -23- SF 2213 (3) 86 pf/nh/jh 23/ 42

S.F. 2213 of the Iowa academy of family physicians. 1 (7) A health care consumer. 2 (8) A representative of the Iowa collaborative safety net 3 provider network established pursuant to section 135.153 . 4 (9) A representative of the Iowa developmental disabilities 5 council. 6 (10) A representative of the Iowa chapter of the American 7 academy of pediatrics. 8 (11) A representative of the child and family policy center. 9 (12) A representative of the Iowa pharmacy association. 10 (13) A representative of the Iowa chiropractic society. 11 (14) A representative of the university of Iowa college of 12 public health. 13 (15) A representative of the Iowa public health 14 association. 15 (16) A representative of the area agencies on aging. 16 (17) A representative of the mental health and disability 17 services regions. 18 (18) A representative of early childhood Iowa. 19 b. Public members of the patient-centered health advisory 20 council shall receive reimbursement for actual expenses 21 incurred while serving in their official capacity only if they 22 are not eligible for reimbursement by the organization that 23 they represent. 24 c. (1) Beginning July 1, 2016, the patient-centered health 25 advisory council shall do all of the following: 26 (a) Review and make recommendations to the department and 27 to the general assembly regarding the building of effective 28 working relationships and strategies to support state-level 29 and community-level integration, to provide cross-system 30 coordination and synchronization, and to more appropriately 31 align health delivery models and service sectors, including but 32 not limited to public health, aging and disability services 33 agencies, mental health and disability services regions, 34 social services, child welfare, and other providers, agencies, 35 -24- SF 2213 (3) 86 pf/nh/jh 24/ 42

S.F. 2213 organizations, and sectors to address social determinants of 1 health, holistic well-being, and population health goals. Such 2 review and recommendations shall include a review of funding 3 streams and recommendations for blending and braiding funding 4 to support these efforts. 5 (b) Assist in efforts to evaluate the health workforce to 6 inform policymaking and resource allocation. 7 (2) The patient-centered health advisory council shall 8 submit a report to the department, the health policy oversight 9 committee created in section 2.45, and the general assembly, 10 initially, on or before December 15, 2016, and on or before 11 December 15, annually, thereafter, including any findings or 12 recommendations resulting from the council’s deliberations. 13 HAWK-I PROGRAM 14 Sec. 10. Section 514I.5, subsection 8, paragraph d, Code 15 2016, is amended by adding the following new subparagraph: 16 NEW SUBPARAGRAPH . (17) Occupational therapy. 17 Sec. 11. Section 514I.5, subsection 8, Code 2016, is amended 18 by adding the following new paragraph: 19 NEW PARAGRAPH . m. The definition of medically necessary 20 and the utilization management criteria under the hawk-i 21 program in order to ensure that benefits are uniformly and 22 consistently provided across all participating insurers in 23 the type and manner that reflects and appropriately meets 24 the needs, including but not limited to the habilitative and 25 rehabilitative needs, of the child population including those 26 children with special health care needs. 27 MEDICAID PROGRAM POLICY IMPROVEMENT 28 Sec. 12. DIRECTIVES FOR MEDICAID PROGRAM POLICY 29 IMPROVEMENTS. In order to safeguard the interests of Medicaid 30 recipients, encourage the participation of Medicaid providers, 31 and protect the interests of all taxpayers, the department of 32 human services shall comply with or ensure that the specified 33 entity complies with all of the following and shall amend 34 Medicaid managed care contract provisions as necessary to 35 -25- SF 2213 (3) 86 pf/nh/jh 25/ 42

S.F. 2213 reflect all of the following: 1 1. CONSUMER PROTECTIONS. 2 a. In accordance with 42 C.F.R. §438.420, a Medicaid managed 3 care organization shall continue a recipient’s benefits during 4 an appeal process. If, as allowed when final resolution of 5 an appeal is adverse to the Medicaid recipient, the Medicaid 6 managed care organization chooses to recover the costs of the 7 services furnished to the recipient while an appeal is pending, 8 the Medicaid managed care organization shall provide adequate 9 prior notice of potential recovery of costs to the recipient at 10 the time the appeal is filed, and any costs recovered shall be 11 remitted to the department of human services and deposited in 12 the Medicaid reinvestment fund created in section 249A.4C. 13 b. Ensure that each Medicaid managed care organization 14 provides, at a minimum, all the benefits and services deemed 15 medically necessary that were covered, including to the 16 extent and in the same manner and subject to the same prior 17 authorization criteria, by the state program directly under 18 fee for service prior to January 1, 2016. Benefits covered 19 through Medicaid managed care shall comply with the specific 20 requirements in state law applicable to the respective Medicaid 21 recipient population under fee for service. 22 c. Enhance monitoring of the reduction in or suspension 23 or termination of services provided to Medicaid recipients, 24 including reductions in the provision of home and 25 community-based services waiver services or increases in home 26 and community-based services waiver waiting lists. Medicaid 27 managed care organizations shall provide data to the department 28 as necessary for the department to compile periodic reports on 29 the numbers of individuals transferred from state institutions 30 and long-term care facilities to home and community-based 31 services, and the associated savings. Any savings resulting 32 from the transfers as certified by the department shall be 33 deposited in the Medicaid reinvestment fund created in section 34 249A.4C. 35 -26- SF 2213 (3) 86 pf/nh/jh 26/ 42

S.F. 2213 d. (1) Require each Medicaid managed care organization to 1 adhere to reasonableness and service authorization standards 2 that are appropriate for and do not disadvantage those 3 individuals who have ongoing chronic conditions or who require 4 long-term services and supports. Services and supports for 5 individuals with ongoing chronic conditions or who require 6 long-term services and supports shall be authorized in a manner 7 that reflects the recipient’s continuing need for such services 8 and supports, and limits shall be consistent with a recipient’s 9 current needs assessment and person-centered service plan. 10 (2) In addition to other provisions relating to 11 community-based case management continuity of care 12 requirements, Medicaid managed care contractors shall provide 13 the option to the case manager of a Medicaid recipient who 14 retained the case manager during the six months of transition 15 to Medicaid managed care, if the recipient chooses to continue 16 to retain that case manager beyond the six-month transition 17 period and if the case manager is not otherwise a participating 18 provider of the recipient’s managed care organization provider 19 network, to enter into a single case agreement to continue to 20 provide case management services to the Medicaid recipient. 21 e. Ensure that Medicaid recipients are provided care 22 coordination and case management by appropriately trained 23 professionals in a conflict-free manner. Care coordination and 24 case management shall be provided in a patient-centered and 25 family-centered manner that requires a knowledge of community 26 supports, a reasonable ratio of care coordinators and case 27 managers to Medicaid recipients, standards for frequency of 28 contact with the Medicaid recipient, and specific and adequate 29 reimbursement. 30 f. A Medicaid managed care contract shall include a 31 provision for continuity and coordination of care for a 32 consumer transitioning to Medicaid managed care, including 33 maintaining existing provider-recipient relationships and 34 honoring the amount, duration, and scope of a recipient’s 35 -27- SF 2213 (3) 86 pf/nh/jh 27/ 42

S.F. 2213 authorized services based on the recipient’s medical history 1 and needs. In the initial transition to Medicaid managed care, 2 to ensure the least amount of disruption, Medicaid managed 3 care organizations shall provide, at a minimum, a one-year 4 transition of care period for all provider types, regardless 5 of network status with an individual Medicaid managed care 6 organization. 7 g. Ensure that a Medicaid managed care organization does 8 not arbitrarily deny coverage for medically necessary services 9 based solely on financial reasons and does not shift the 10 responsibility for provision of services or payment of costs of 11 services to another entity to avoid costs or attain savings. 12 h. Ensure that dental coverage, if not integrated into 13 an overall Medicaid managed care contract, is part of the 14 overall holistic, integrated coverage for physical, behavioral, 15 and long-term services and supports provided to a Medicaid 16 recipient. 17 i. Require each Medicaid managed care organization to 18 verify the offering and actual utilization of services and 19 supports and value-added services, an individual recipient’s 20 encounters and the costs associated with each encounter, and 21 requests and associated approvals or denials of services. 22 Verification of actual receipt of services and supports and 23 value-added services shall, at a minimum, consist of comparing 24 receipt of service against both what was authorized in the 25 recipient’s benefit or service plan and what was actually 26 reimbursed. Value-added services shall not be reportable as 27 allowable medical or administrative costs or factored into rate 28 setting, and the costs of value-added services shall not be 29 passed on to recipients or providers. 30 j. Provide periodic reports to the governor and the general 31 assembly regarding changes in quality of care and health 32 outcomes for Medicaid recipients under managed care compared to 33 quality of care and health outcomes of the same populations of 34 Medicaid recipients prior to January 1, 2016. 35 -28- SF 2213 (3) 86 pf/nh/jh 28/ 42

S.F. 2213 k. Require each Medicaid managed care organization to 1 maintain records of complaints, grievances, and appeals, and 2 report the number and types of complaints, grievances, and 3 appeals filed, the resolution of each, and a description of 4 any patterns or trends identified to the department of human 5 services and the health policy oversight committee created 6 in section 2.45, on a monthly basis. The department shall 7 review and compile the data on a quarterly basis and make the 8 compilations available to the public. Following review of 9 reports submitted by the department, a Medicaid managed care 10 organization shall take any corrective action required by the 11 department and shall be subject to any applicable penalties. 12 l. Require Medicaid managed care organizations to survey 13 Medicaid recipients, to collect satisfaction data using a 14 uniform instrument, and to provide a detailed analysis of 15 recipient satisfaction as well as various metrics regarding the 16 volume of and timelines in responding to recipient complaints 17 and grievances as directed by the department of human services. 18 m. Require managed care organizations to allow a recipient 19 to request that the managed care organization enter into 20 a single case agreement with a recipient’s out-of-network 21 provider, including a provider outside of the state, to provide 22 for continuity of care when the recipient has an existing 23 relationship with the provider to provide a covered benefit, or 24 to ensure adequate or timely access to a provider of a covered 25 benefit when the managed care organization provider network 26 cannot ensure such adequate or timely access. 27 2. CHILDREN. 28 a. (1) The hawk-i board shall retain all authority 29 specified under chapter 514I relative to the children eligible 30 under section 514I.8 to participate in the hawk-i program, 31 including but not limited to approving any contract entered 32 into pursuant to chapter 514I; approving the benefit package 33 design, reviewing the benefit package design, and making 34 necessary changes to reflect the results of the reviews; and 35 -29- SF 2213 (3) 86 pf/nh/jh 29/ 42

S.F. 2213 adopting rules for the hawk-i program including those related 1 to qualifying standards for selecting participating insurers 2 for the program and the benefits to be included in a health 3 plan. 4 (2) The hawk-i board shall review benefit plans and 5 utilization review provisions and ensure that benefits provided 6 to children under the hawk-i program, at a minimum, reflect 7 those required by state law as specified in section 514I.5, 8 include both habilitative and rehabilitative services, and 9 are provided as medically necessary relative to the child 10 population served and based on the needs of the program 11 recipient and the program recipient’s medical history. 12 (3) The hawk-i board shall work with the department of human 13 services to coordinate coverage and care for the population 14 of children in the state eligible for either Medicaid or 15 hawk-i coverage so that, to the greatest extent possible, 16 the two programs provide for continuity of care as children 17 transition between the two programs or to private health care 18 coverage. To this end, all contracts with participating 19 insurers providing coverage under the hawk-i program and with 20 all managed care organizations providing coverage for children 21 eligible for Medicaid shall do all of the following: 22 (a) Specifically and appropriately address the unique needs 23 of children and children’s health delivery. 24 (b) Provide for the maintaining of child health panels that 25 include representatives of child health, welfare, policy, and 26 advocacy organizations in the state that address child health 27 and child well-being. 28 (c) Address early intervention and prevention strategies, 29 the provision of a child health care delivery infrastructure 30 for children with special health care needs, utilization of 31 current standards and guidelines for children’s health care 32 and pediatric-specific screening and assessment tools, the 33 inclusion of pediatric specialty providers in the provider 34 network, and the utilization of health homes for children and 35 -30- SF 2213 (3) 86 pf/nh/jh 30/ 42

S.F. 2213 youth with special health care needs including intensive care 1 coordination and family support and access to a professional 2 family-to-family support system. Such contracts shall utilize 3 pediatric-specific quality measures and assessment tools 4 which shall align with existing pediatric-specific measures 5 as determined in consultation with the child health panel and 6 approved by the hawk-i board. 7 (d) Provide special incentives for innovative and 8 evidence-based preventive, behavioral, and developmental 9 health care and mental health care for children’s programs that 10 improve the life course trajectory of these children. 11 (e) Provide that information collected from the 12 pediatric-specific assessments be used to identify health risks 13 and social determinants of health that impact health outcomes. 14 Such data shall be used in care coordination and interventions 15 to improve patient outcomes and to drive program designs that 16 improve the health of the population. Aggregate assessment 17 data shall be shared with affected providers on a routine 18 basis. 19 b. In order to monitor the quality of and access to health 20 care for children receiving coverage under the Medicaid 21 program, each Medicaid managed care organization shall 22 uniformly report, in a template format designated by the 23 department of human services, the number of claims submitted by 24 providers and the percentage of claims approved by the Medicaid 25 managed care organization for the early and periodic screening, 26 diagnostic, and treatment (EPSDT) benefit based on the Iowa 27 EPSDT care for kids health maintenance recommendations, 28 including but not limited to physical exams, immunizations, the 29 seven categories of developmental and behavioral screenings, 30 vision and hearing screenings, and lead testing. 31 3. PROVIDER PARTICIPATION ENHANCEMENT. 32 a. Ensure that savings achieved through Medicaid managed 33 care does not come at the expense of further reductions in 34 provider rates. The department shall ensure that Medicaid 35 -31- SF 2213 (3) 86 pf/nh/jh 31/ 42

S.F. 2213 managed care organizations use reasonable reimbursement 1 standards for all provider types and compensate providers for 2 covered services at not less than the minimum reimbursement 3 established by state law applicable to fee for service for a 4 respective provider, service, or product for a fiscal year 5 and as determined in conjunction with actuarially sound rate 6 setting procedures. Such reimbursement shall extend for the 7 entire duration of a managed care contract. 8 b. To enhance continuity of care in the provision of 9 pharmacy services, Medicaid managed care organizations shall 10 utilize the same preferred drug list, recommended drug list, 11 prior authorization criteria, and other utilization management 12 strategies that apply to the state program directly under fee 13 for service and shall apply other provisions of applicable 14 state law including those relating to chemically unique mental 15 health prescription drugs. Reimbursement rates established 16 under Medicaid managed care contracts for ingredient cost 17 reimbursement and dispensing fees shall be subject to and shall 18 reflect provisions of state and federal law, including the 19 minimum reimbursements established in state law for fee for 20 service for a fiscal year. 21 c. Address rate setting and reimbursement of the entire 22 scope of services provided under the Medicaid program to 23 ensure the adequacy of the provider network and to ensure 24 that providers that contribute to the holistic health of the 25 Medicaid recipient, whether inside or outside of the provider 26 network, are compensated for their services. 27 d. Managed care contractors shall submit financial 28 documentation to the department of human services demonstrating 29 payment of claims and expenses by provider type. 30 e. Participating Medicaid providers under a managed care 31 contract shall be allowed to submit claims for up to 365 days 32 following discharge of a Medicaid recipient from a hospital or 33 following the date of service. 34 f. (1) A managed care contract entered into on or after 35 -32- SF 2213 (3) 86 pf/nh/jh 32/ 42

S.F. 2213 July 1, 2015, shall, at a minimum, reflect all of the following 1 provisions and requirements, and shall extend the following 2 payment rates based on the specified payment floor, as 3 applicable to the provider type: 4 (a) In calculating the rates for prospective payment system 5 hospitals, the following base rates shall be used: 6 (i) The inpatient diagnostic related group base rates and 7 certified unit per diem in effect on October 1, 2015. 8 (ii) The outpatient ambulatory payment classification base 9 rates in effect on July 1, 2015. 10 (iii) The inpatient psychiatric certified unit per diem in 11 effect on October 1, 2015. 12 (iv) The inpatient physical rehabilitation certified unit 13 per diem in effect on October 1, 2015. 14 (b) In calculating the critical access hospital payment 15 rates, the following base rates shall be used: 16 (i) The inpatient diagnostic related group base rates in 17 effect on July 1, 2015. 18 (ii) The outpatient cost-to-charge ratio in effect on July 19 1, 2015. 20 (iii) The swing bed per diem in effect on July 1, 2015. 21 (c) Critical access hospitals shall receive cost-based 22 reimbursement for one hundred percent of the reasonable costs 23 for the provision of services to Medicaid recipients. 24 (d) Critical access hospitals shall submit annual cost 25 reports and managed care contractors shall submit annual 26 payment reports to the department of human services. The 27 department shall reconcile the critical access hospital’s 28 reported costs with the managed care contractor’s reported 29 payments. The department shall require the managed care 30 contractor to retroactively reimburse a critical access 31 hospital for underpayments. 32 (e) Community mental health centers shall receive one 33 hundred percent of the reasonable costs for the provision of 34 services to Medicaid recipients. 35 -33- SF 2213 (3) 86 pf/nh/jh 33/ 42

S.F. 2213 (f) Federally qualified health centers shall receive 1 cost-based reimbursement for one hundred percent of the 2 reasonable costs for the provision of services to Medicaid 3 recipients. 4 (g) The reimbursement rates for substance-related disorder 5 treatment programs licensed under section 125.13, shall be no 6 lower than the rates in effect for the fiscal year beginning 7 July 1, 2015. 8 (2) For managed care contract periods subsequent to the 9 initial contract period, base rates for prospective payment 10 system hospitals and critical access hospitals shall be 11 calculated using the base rate for the prior contract period 12 plus 3 percent. Prospective payment system hospital and 13 critical access hospital base rates shall at no time be less 14 than the previous contract period’s base rates. 15 (3) A managed care contract shall require out-of-network 16 prospective payment system hospital and critical access 17 hospital payment rates to meet or exceed ninety-nine percent of 18 the rates specified for the respective in-network hospitals in 19 accordance with this paragraph “f”. 20 g. If the department of human services collects ownership 21 and control information from Medicaid providers pursuant to 42 22 C.F.R. §455.104, a managed care organization under contract 23 with the state shall not also require submission of this 24 information from approved enrolled Medicaid providers. 25 h. (1) Ensure that a Medicaid managed care organization 26 develops and maintains a provider network of qualified 27 providers who meet state licensing, credentialing, and 28 certification requirements, as applicable, which network shall 29 be sufficient to provide adequate access to all services 30 covered and for all populations served under the managed 31 care contract. Medicaid managed care organizations shall 32 incorporate existing and traditional providers, including 33 but not limited to those providers that comprise the Iowa 34 collaborative safety net provider network created in section 35 -34- SF 2213 (3) 86 pf/nh/jh 34/ 42

S.F. 2213 135.153, into their provider networks. 1 (2) Ensure that respective Medicaid populations are 2 managed at all times within funding limitations and contract 3 terms. The department shall also monitor service delivery 4 and utilization to ensure the responsibility for provision 5 of services to Medicaid recipients is not shifted to 6 non-Medicaid covered services to attain savings, and that such 7 responsibility is not shifted to mental health and disability 8 services regions, local public health agencies, aging and 9 disability resource centers, or other entities unless agreement 10 to provide, and provision for adequate compensation for, such 11 services is agreed to between the affected entities in advance. 12 i. Medicaid managed care organizations shall provide an 13 enrolled Medicaid provider approved by the department of 14 human services the opportunity to be a participating network 15 provider. 16 j. Medicaid managed care organizations shall include 17 provider appeals and grievance procedures that in part allow 18 a provider to file a grievance independently but on behalf 19 of a Medicaid recipient and to appeal claims denials which, 20 if determined to be based on claims for medically necessary 21 services whether or not denied on an administrative basis, 22 shall receive appropriate payment. 23 k. (1) Medicaid managed care organizations shall include 24 as primary care providers any provider designated by the state 25 as a primary care provider, subject to a provider’s respective 26 state certification standards, including but not limited to all 27 of the following: 28 (a) A physician who is a family or general practitioner, a 29 pediatrician, an internist, an obstetrician, or a gynecologist. 30 (b) An advanced registered nurse practitioner. 31 (c) A physician assistant. 32 (d) A chiropractor licensed pursuant to chapter 151. 33 (2) A Medicaid managed care organization shall not impose 34 more restrictive, additional, or different scope of practice 35 -35- SF 2213 (3) 86 pf/nh/jh 35/ 42

S.F. 2213 requirements or standards of practice on a primary care 1 provider than those prescribed by state law as a prerequisite 2 for participation in the managed care organization’s provider 3 network. 4 4. CAPITATION RATES AND MEDICAL LOSS RATIO. 5 a. Capitation rates shall be developed based on all 6 reasonable, appropriate, and attainable costs. Costs that are 7 not reasonable, appropriate, or attainable, including but not 8 limited to improper payment recoveries, shall not be included 9 in the development of capitated rates. 10 b. Capitation rates for Medicaid recipients falling within 11 different rate cells shall not be expected to cross-subsidize 12 one another and the data used to set capitation rates shall 13 be relevant and timely and tied to the appropriate Medicaid 14 population. 15 c. Any increase in capitation rates for managed care 16 contractors is subject to prior statutory approval and shall 17 not exceed three percent over the existing capitation rate 18 in any one-year period or five percent over the existing 19 capitation rate in any two-year period. 20 d. In addition to withholding two percent of a managed 21 care organization’s annual capitation payment as a 22 pay-for-performance enforcement mechanism, the department of 23 human services shall also withhold an additional two percent of 24 a managed care organization’s annual capitation payment until 25 the department is able to ensure that the respective managed 26 care organization has complied with all requirements relating 27 to data, information, transparency, evaluation, and oversight 28 specified by law, rule, contract, or other basis. 29 e. The department of human services shall collect an initial 30 contribution of five million dollars from each of the managed 31 care organizations contracting with the state during the fiscal 32 year beginning July 1, 2015, for an aggregate amount of fifteen 33 million dollars, and shall deposit such amount in the Medicaid 34 reinvestment fund, as provided in section 249A.4C, as enacted 35 -36- SF 2213 (3) 86 pf/nh/jh 36/ 42

S.F. 2213 in this Act, to be used for Medicaid ombudsman activities 1 through the office of long-term care ombudsman. 2 f. A managed care contract shall impose a minimum Medicaid 3 loss ratio of at least eighty-eight percent. In calculating 4 the medical loss ratio, medical costs or benefit expenses shall 5 include only those costs directly related to patient medical 6 care and not ancillary expenses, including but not limited to 7 any of the following: 8 (1) Program integrity activities. 9 (2) Utilization review activities. 10 (3) Fraud prevention activities beyond the scope of those 11 activities necessary to recover incurred claims. 12 (4) Provider network development, education, or management 13 activities. 14 (5) Provider credentialing activities. 15 (6) Marketing expenses. 16 (7) Administrative costs associated with recipient 17 incentives. 18 (8) Clinical data collection activities. 19 (9) Claims adjudication expenses. 20 (10) Customer service or health care professional hotline 21 services addressing nonclinical recipient questions. 22 (11) Value-added or cost-containment services, wellness 23 programs, disease management, and case management or care 24 coordination programs. 25 (12) Health quality improvement activities unless 26 specifically approved as a medical cost by state law. Costs of 27 health quality improvement activities included in determining 28 the medical loss ratio shall be only those activities that are 29 independent improvements measurable in individual patients. 30 (13) Insurer claims review activities. 31 (14) Information technology costs unless they directly 32 and credibly improve the quality of health care and do not 33 duplicate, conflict with, or fail to be compatible with similar 34 health information technology efforts of providers. 35 -37- SF 2213 (3) 86 pf/nh/jh 37/ 42

S.F. 2213 (15) Legal department costs including information 1 technology costs, expenses incurred for review and denial of 2 claims, legal costs related to defending claims, settlements 3 for wrongly denied claims, and costs related to administrative 4 claims handling including salaries of administrative personnel 5 and legal costs. 6 (16) Taxes unrelated to premiums or the provision of medical 7 care. Only state and federal taxes and licensing or regulatory 8 fees relevant to actual premiums collected, not including such 9 taxes and fees as property taxes, taxes on investment income, 10 taxes on investment property, and capital gains taxes, may be 11 included in determining the medical loss ratio. 12 g. (1) Provide enhanced guidance and criteria for defining 13 medical and administrative costs, recoveries, and rebates 14 including pharmacy rebates, and the recording, reporting, and 15 recoupment of such costs, recoveries, and rebates realized. 16 (2) Medicaid managed care organizations shall offset 17 recoveries, rebates, and refunds against medical costs, include 18 only allowable administrative expenses in the determination of 19 administrative costs, report costs related to subcontractors 20 properly, and have complete systems checks and review processes 21 to identify overpayment possibilities. 22 (3) Medicaid managed care contractors shall submit publicly 23 available, comprehensive financial statements to the department 24 of human services to verify that the minimum medical loss ratio 25 is being met and shall be subject to periodic audits. 26 5. DATA AND INFORMATION, EVALUATION, AND OVERSIGHT. 27 a. Develop and administer a clear, detailed policy 28 regarding the collection, storage, integration, analysis, 29 maintenance, retention, reporting, sharing, and submission 30 of data and information from the Medicaid managed care 31 organizations and shall require each Medicaid managed care 32 organization to have in place a data and information system to 33 ensure that accurate and meaningful data is available. At a 34 minimum, the data shall allow the department to effectively 35 -38- SF 2213 (3) 86 pf/nh/jh 38/ 42

S.F. 2213 measure and monitor Medicaid managed care organization 1 performance, quality, outcomes including recipient health 2 outcomes, service utilization, finances, program integrity, 3 the appropriateness of payments, and overall compliance with 4 contract requirements; perform risk adjustments and determine 5 actuarially sound capitation rates and appropriate provider 6 reimbursements; verify that the minimum medical loss ratio is 7 being met; ensure recipient access to and use of services; 8 create quality measures; and provide for program transparency. 9 b. Medicaid managed care organizations shall directly 10 capture and retain and shall report actual and detailed 11 medical claims costs and administrative cost data to the 12 department as specified by the department. Medicaid managed 13 care organizations shall allow the department to thoroughly and 14 accurately monitor the medical claims costs and administrative 15 costs data Medicaid managed care organizations report to the 16 department. 17 c. Any audit of Medicaid managed care contracts shall ensure 18 compliance including with respect to appropriate medical costs, 19 allowable administrative costs, the medical loss ratio, cost 20 recoveries, rebates, overpayments, and with specific contract 21 performance requirements. 22 d. The external quality review organization contracting 23 with the department shall review the Medicaid managed care 24 program to determine if the state has sufficient infrastructure 25 and controls in place to effectively oversee the Medicaid 26 managed care organizations and the Medicaid program in order 27 to ensure, at a minimum, compliance with Medicaid managed 28 care organization contracts and to prevent fraud, abuse, and 29 overpayments. The results of any external quality review 30 organization review shall be submitted to the governor, the 31 general assembly, and the health policy oversight committee 32 created in section 2.45. 33 e. Publish benchmark indicators based on Medicaid program 34 outcomes from the fiscal year beginning July 1, 2015, to 35 -39- SF 2213 (3) 86 pf/nh/jh 39/ 42

S.F. 2213 be used to compare outcomes of the Medicaid program as 1 administered by the state program prior to July 1, 2015, to 2 those outcomes of the program under Medicaid managed care. The 3 outcomes shall include a comparison of actual costs of the 4 program as administered prior to and after implementation of 5 Medicaid managed care. The data shall also include specific 6 detail regarding the actual expenses incurred by each managed 7 care organization by specific provider line of service. 8 f. Review and approve or deny approval of contract 9 amendments on an ongoing basis to provide for continuous 10 improvement in Medicaid managed care and to incorporate any 11 changes based on changes in law or policy. 12 g. (1) Require managed care contractors to track and report 13 on a monthly basis to the department of human services, at a 14 minimum, all of the following: 15 (a) The number and details relating to prior authorization 16 requests and denials. 17 (b) The ten most common reasons for claims denials. 18 Information reported by a managed care contractor relative 19 to claims shall also include the number of claims denied, 20 appealed, and overturned based on provider type and service 21 type. 22 (c) Utilization of health care services by diagnostic 23 related group and ambulatory payment classification as well as 24 total claims volume. 25 (2) The department shall ensure the validity of all 26 information submitted by a Medicaid managed care organization 27 and shall make the monthly reports available to the public. 28 h. Medicaid managed care organizations shall maintain 29 stakeholder panels comprised of an equal number of Medicaid 30 recipients and providers. Medicaid managed care organizations 31 shall provide for separate provider-specific panels to address 32 detailed payment, claims, process, and other issues as well as 33 grievance and appeals processes. 34 i. Medicaid managed care contracts shall align economic 35 -40- SF 2213 (3) 86 pf/nh/jh 40/ 42

S.F. 2213 incentives, delivery system reforms, and performance and 1 outcome metrics with those of the state innovation models 2 initiatives and Medicaid accountable care organizations. 3 The department of human services shall develop and utilize 4 a common, uniform set of process, quality, and consumer 5 satisfaction measures across all Medicaid payors and providers 6 that align with those developed through the state innovation 7 models initiative and shall ensure that such measures are 8 expanded and adjusted to address additional populations and 9 to meet population health objectives. Medicaid managed care 10 contracts shall include long-term performance and outcomes 11 goals that reward success in achieving population health goals 12 such as improved community health metrics. 13 j. (1) Require consistency and uniformity of processes, 14 procedures, and forms across all Medicaid managed care 15 organizations to reduce the administrative burden to providers 16 and consumers and to increase efficiencies in the program. 17 Such requirements shall apply to but are not limited to 18 areas of uniform cost and quality reporting, uniform prior 19 authorization requirements and procedures, uniform utilization 20 management criteria, centralized, uniform, and seamless 21 credentialing requirements and procedures, and uniform critical 22 incident reporting. 23 (2) The department of human services shall establish a 24 comprehensive provider credentialing process to be recognized 25 and utilized by all Medicaid managed care organization 26 contractors. The process shall meet the national committee for 27 quality assurance and other appropriate standards. The process 28 shall ensure that credentialing is completed in a timely manner 29 without disruption to provider billing processes. 30 k. Medicaid managed care organizations and any entity with 31 which a managed care organization contracts for the performance 32 of services shall disclose at no cost to the department all 33 discounts, incentives, rebates, fees, free goods, bundling 34 arrangements, and other agreements affecting the net cost of 35 -41- SF 2213 (3) 86 pf/nh/jh 41/ 42