H.F. 2462 DIVISION I 1 HEALTHY AND WELL KIDS IN IOWA —— DIRECTOR DUTIES 2 Section 1. Section 514I.4, subsection 5, Code 2018, is 3 amended by adding the following new paragraphs: 4 NEW PARAGRAPH . d. Collect and track monthly family premiums 5 to assure that payments are current. 6 NEW PARAGRAPH . e. Verify the number of program enrollees 7 with each participating insurer for determination of the amount 8 of premiums to be paid to each participating insurer. 9 Sec. 2. Section 514I.7, subsection 2, paragraphs g and i, 10 Code 2018, are amended by striking the paragraphs. 11 DIVISION II 12 SHARING OF INCARCERATION DATA 13 Sec. 3. Section 249A.38, Code 2018, is amended to read as 14 follows: 15 249A.38 Inmates of public institutions —— suspension or 16 termination of medical assistance. 17 1. The following conditions shall apply to Following the 18 first thirty days of commitment, the department shall suspend 19 the eligibility of an individual who is an inmate of a public 20 institution as defined in 42 C.F.R. §435.1010 , who is enrolled 21 in the medical assistance program at the time of commitment to 22 the public institution, and who remains eligible for medical 23 assistance as an individual except for the individual’s 24 institutional status : 25 a. The department shall suspend the individual’s 26 eligibility for up to the initial twelve months of the period 27 of commitment. The department shall delay the suspension 28 of eligibility for a period of up to the first thirty days 29 of commitment if such delay is approved by the centers for 30 Medicare and Medicaid services of the United States department 31 of health and human services. If such delay is not approved, 32 the department shall suspend eligibility during the entirety 33 of the initial twelve months of the period of commitment. 34 Claims submitted on behalf of the individual under the medical 35 -1- HF 2462 (5) 87 pf/rh/md 1/ 7

H.F. 2462 assistance program for covered services provided during the 1 delay period shall only be reimbursed if federal financial 2 participation is applicable to such claims. 3 b. The department shall terminate an individual’s 4 eligibility following a twelve-month period of suspension 5 of the individual’s eligibility under paragraph “a” , during 6 the period of the individual’s commitment to the public 7 institution . 8 2. a. A public institution shall provide the department and 9 the social security administration with a monthly report of the 10 individuals who are committed to the public institution and of 11 the individuals who are discharged from the public institution. 12 The monthly report to the department shall include the date 13 of commitment or the date of discharge, as applicable, of 14 each individual committed to or discharged from the public 15 institution during the reporting period. The monthly report 16 shall be made through the reporting system created by the 17 department for public, nonmedical institutions to report inmate 18 populations. Any medical assistance expenditures, including 19 but not limited to monthly managed care capitation payments, 20 provided on behalf of an individual who is an inmate of a 21 public institution but is not reported to the department 22 in accordance with this subsection, shall be the financial 23 responsibility of the respective public institution. 24 b. The department shall provide a public institution with 25 the forms necessary to be used by the individual in expediting 26 restoration of the individual’s medical assistance benefits 27 upon discharge from the public institution. 28 3. This section applies to individuals as specified in 29 subsection 1 on or after January 1, 2012. 30 4. 3. The department may adopt rules pursuant to chapter 31 17A to implement this section. 32 DIVISION III 33 MEDICAID PROGRAM ADMINISTRATION 34 Sec. 4. MEDICAID PROGRAM ADMINISTRATION. 35 -2- HF 2462 (5) 87 pf/rh/md 2/ 7

H.F. 2462 1. PROVIDER PROCESSES AND PROCEDURES. 1 a. When all of the required documents and other information 2 necessary to process a claim have been received by a managed 3 care organization, the managed care organization shall 4 either provide payment to the claimant within the timelines 5 specified in the managed care contract or, if the managed 6 care organization is denying the claim in whole or in part, 7 shall provide notice to the claimant including the reasons for 8 such denial consistent with national industry best practice 9 guidelines. 10 b. If a managed care organization discovers that a claims 11 payment barrier is the result of a managed care organization’s 12 identified system configuration error, the managed care 13 organization shall correct such error and shall fully and 14 accurately reprocess the claims affected by the error within 15 ninety days of such discovery. For the purposes of this 16 paragraph, “configuration error” means an error in provider 17 data, an incorrect fee schedule, or an incorrect claims edit. 18 c. The department of human services shall provide for 19 the development and require the use of standardized Medicaid 20 provider enrollment forms to be used by the department and 21 uniform Medicaid provider credentialing standards to be used 22 by managed care organizations. The credentialing process is 23 deemed to begin when the managed care organization has received 24 all necessary credentialing materials from the provider and is 25 deemed to have ended when written communication is mailed or 26 faxed to the provider notifying the provider of the managed 27 care organization’s decision. 28 2. MEMBER SERVICES AND PROCESSES. 29 a. If a Medicaid member prevails in a review by a managed 30 care organization or on appeal regarding the provision 31 of services, the services subject to the review or appeal 32 shall be extended for a period of time determined by the 33 director of human services. However, services shall not be 34 extended if there is a change in the member’s condition that 35 -3- HF 2462 (5) 87 pf/rh/md 3/ 7

H.F. 2462 warrants a change in services as determined by the member’s 1 interdisciplinary team, there is a change in the member’s 2 eligibility status as determined by the department of human 3 services, or the member voluntarily withdraws from services. 4 b. If a Medicaid member is receiving court-ordered services 5 or treatment for a substance-related disorder pursuant to 6 chapter 125 or for a mental illness pursuant to chapter 229, 7 such services or treatment shall be provided and reimbursed 8 for an initial period of five days before a managed care 9 organization may apply medical necessity criteria to determine 10 the most appropriate services, treatment, or placement for the 11 Medicaid member. 12 c. The department of human services shall review and have 13 approval authority for a Medicaid member’s level of care 14 reassessment that indicates a decrease in the level of care. 15 A managed care organization shall comply with the findings of 16 the departmental review and approval of such level of care 17 reassessment. If a level of care reassessment indicates there 18 is no change in a Medicaid member’s level of care needs, the 19 Medicaid member’s existing level of care shall be continued. A 20 managed care organization shall maintain and make available to 21 the department of human services all documentation relating to 22 a Medicaid member’s level of care assessment. 23 d. The department of human services shall maintain and 24 update Medicaid member eligibility files in a timely manner 25 consistent with national industry best practices. 26 3. MEDICAID PROGRAM REVIEW AND OVERSIGHT. 27 a. (1) The department of human services shall facilitate a 28 workgroup, in collaboration with representatives of the managed 29 care organizations and health home providers, to review the 30 health home programs. The review shall include all of the 31 following: 32 (a) An analysis of the state plan amendments applicable to 33 health homes. 34 (b) An analysis of the current health home system, including 35 -4- HF 2462 (5) 87 pf/rh/md 4/ 7

H.F. 2462 the rationale for any recommended changes. 1 (c) The development of a clear and consistent delivery 2 model linked to program-determined outcomes and data reporting 3 requirements. 4 (d) A work plan to be used in communicating with 5 stakeholders regarding the administration and operation of the 6 health home programs. 7 (2) The department of human services shall submit a report 8 of the workgroup’s findings and recommendations by December 9 15, 2018, to the governor and to the Eighty-eighth General 10 Assembly, 2019 session, for consideration. 11 b. The department of human services, in collaboration 12 with Medicaid providers and managed care organizations, shall 13 initiate a review process to determine the effectiveness of 14 prior authorizations used by the managed care organizations 15 with the goal of making adjustments based on relevant 16 service costs and member outcomes data utilizing existing 17 industry-accepted standards. Prior authorization policies 18 shall comply with existing rules, guidelines, and procedures 19 developed by the centers for Medicare and Medicaid services of 20 the United States department of health and human services. 21 c. The department of human services shall enter into a 22 contract with an independent auditor to perform an audit of 23 small dollar claims paid to or denied Medicaid long-term 24 services and supports providers. The department may take any 25 action specified in the managed care contract relative to 26 any claim the auditor determines to be incorrectly paid or 27 denied, subject to appeal by the managed care organization 28 to the director of human services. For the purposes of this 29 paragraph, “small dollar claims” means those claims less than 30 or equal to two thousand five hundred dollars. 31 DIVISION IV 32 MEDICAID PROGRAM PHARMACY COPAYMENT 33 Sec. 5. 2005 Iowa Acts, chapter 167, section 42, is amended 34 to read as follows: 35 -5- HF 2462 (5) 87 pf/rh/md 5/ 7

H.F. 2462 SEC. 42. COPAYMENTS FOR PRESCRIPTION DRUGS UNDER THE 1 MEDICAL ASSISTANCE PROGRAM. The department of human services 2 shall require recipients of medical assistance to pay the 3 following copayments a copayment of $1 on each prescription 4 filled for a covered prescription drug, including each refill 5 of such prescription , as follows: 6 1. A copayment of $1 on each prescription filled for each 7 covered nonpreferred generic prescription drug. 8 2. A copayment of $1 for each covered preferred brand–name 9 or generic prescription drug. 10 3. A copayment of $1 for each covered nonpreferred 11 brand–name prescription drug for which the cost to the state is 12 up to and including $25. 13 4. A copayment of $2 for each covered nonpreferred 14 brand–name prescription drug for which the cost to the state is 15 more than $25 and up to and including $50. 16 5. A copayment of $3 for each covered nonpreferred 17 brand–name prescription drug for which the cost to the state 18 is more than $50 . 19 DIVISION V 20 MEDICAL ASSISTANCE ADVISORY COUNCIL 21 Sec. 6. Section 249A.4B, subsection 2, paragraph a, 22 subparagraphs (27) and (28), Code 2018, are amended by striking 23 the subparagraphs. 24 Sec. 7. MEDICAL ASSISTANCE ADVISORY COUNCIL —— REVIEW OF 25 MEDICAID MANAGED CARE REPORT DATA. The executive committee 26 of the medical assistance advisory council shall review 27 the data collected and analyzed for inclusion in periodic 28 reports to the general assembly, including but not limited 29 to the information and data specified in 2016 Iowa Acts, 30 chapter 1139, section 93, to determine which data points and 31 information should be included and analyzed to more accurately 32 identify trends and issues with, and promote the effective and 33 efficient administration of, Medicaid managed care for all 34 stakeholders. At a minimum, the areas of focus shall include 35 -6- HF 2462 (5) 87 pf/rh/md 6/ 7

H.F. 2462 consumer protection, provider network access and safeguards, 1 outcome achievement, and program integrity. The executive 2 committee shall report its findings and recommendations to the 3 medical assistance advisory council for review and comment by 4 October 1, 2018, and shall submit a final report of findings 5 and recommendations to the governor and the general assembly by 6 December 31, 2018. 7 DIVISION VI 8 TARGETED CASE MANAGEMENT AND INPATIENT PSYCHIATRIC SERVICES 9 REIMBURSEMENT 10 Sec. 8. Section 249A.31, Code 2018, is amended to read as 11 follows: 12 249A.31 Cost-based reimbursement. 13 1. Providers of individual case management services for 14 persons with an intellectual disability, a developmental 15 disability, or chronic mental illness shall receive cost-based 16 reimbursement for one hundred percent of the reasonable 17 costs for the provision of the services in accordance with 18 standards adopted by the mental health and disability services 19 commission pursuant to section 225C.6 . Effective July 1, 2018, 20 targeted case management services shall be reimbursed based 21 on a statewide fee schedule amount developed by rule of the 22 department pursuant to chapter 17A. 23 2. Effective July 1, 2010 2014 , the department shall apply 24 a cost-based reimbursement methodology for reimbursement of 25 psychiatric medical institution for children providers of 26 inpatient psychiatric services for individuals under twenty-one 27 years of age shall be reimbursed as follows: 28 a. For non-state-owned providers, services shall be 29 reimbursed according to a fee schedule without reconciliation . 30 b. For state-owned providers, services shall be reimbursed 31 at one hundred percent of the actual and allowable cost of 32 providing the service. 33 -7- HF 2462 (5) 87 pf/rh/md 7/ 7