Senate File 567 - Introduced SENATE FILE 567 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 462) (SUCCESSOR TO SSB 1167) A BILL FOR An Act relating to health care services and financing including 1 nursing facility licensing and financing and the Medicaid 2 program including third-party recovery and taxation of 3 Medicaid managed care organization premiums, and providing 4 for licensee discipline. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 1182SZ (3) 90 pf/rh
S.F. 567 DIVISION I 1 MEDICAID PROGRAM THIRD-PARTY RECOVERY 2 Section 1. Section 249A.37, Code 2023, is amended by 3 striking the section and inserting in lieu thereof the 4 following: 5 249A.37 Duties of third parties. 6 1. For the purposes of this section, Medicaid payor , 7 recipient , third party , and third-party benefits mean the 8 same as defined in section 249A.54. 9 2. The third-party obligations specified under this section 10 are a condition of doing business in the state. A third party 11 that fails to comply with these obligations shall not be 12 eligible to do business in the state. 13 3. A third party that is a carrier, as defined in section 14 514C.13, shall enter into a health insurance data match program 15 with the department for the sole purpose of comparing the 16 names of the carriers insureds with the names of recipients 17 as required by section 505.25. 18 4. A third party shall do all of the following: 19 a. Cooperate with the Medicaid payor in identifying 20 recipients for whom third-party benefits are available 21 including but not limited to providing information to determine 22 the period of potential third-party coverage, the nature of 23 the coverage, and the name, address, and identifying number 24 of the coverage. In cooperating with the Medicaid payor, the 25 third party shall provide information upon the request of the 26 Medicaid payor in a manner prescribed by the Medicaid payor or 27 as agreed upon by the department and the third party. 28 b. (1) Accept the Medicaid payors rights of recovery 29 and assignment to the Medicaid payor as a subrogee, assignee, 30 or lienholder under section 249A.54 for payments which the 31 Medicaid payor has made under the Medicaid state plan or under 32 a waiver of such state plan. 33 (2) In the case of a third party other than the original 34 Medicare fee-for-service program under parts A and B of Tit. 35 -1- LSB 1182SZ (3) 90 pf/rh 1/ 34
S.F. 567 XVIII of the federal Social Security Act, a Medicare advantage 1 plan offered by a Medicare advantage organization under part C 2 of Tit. XVIII of the federal Social Security Act, a reasonable 3 cost reimbursement contract under 42 U.S.C. 1395mm, a health 4 care prepayment plan under 42 U.S.C. 1395l, or a prescription 5 drug plan offered by a prescription drug plan sponsor under 6 part D of Tit. XVIII of the federal Social Security Act that 7 requires prior authorization for an item or service furnished 8 to an individual eligible to receive medical assistance 9 under Tit. XIX of the federal Social Security Act, accept 10 authorization provided by the Medicaid payor that the health 11 care item or service is covered under the Medicaid state plan 12 or waiver of such state plan for such individual, as if such 13 authorization were the prior authorization made by the third 14 party for such item or service. 15 c. If, on or before three years from the date a health care 16 item or service was provided, the Medicaid payor submits an 17 inquiry regarding a claim for payment that was submitted to the 18 third party, respond to that inquiry not later than sixty days 19 after receiving the inquiry. 20 d. Respond to any Medicaid payors request for payment of a 21 claim described in paragraph c not later than ninety business 22 days after receipt of written proof of the claim, either by 23 paying the claim or issuing a written denial to the Medicaid 24 payor. 25 e. Not deny any claim submitted by a Medicaid payor solely 26 on the basis of the date of submission of the claim, the type 27 or format of the claim form, a failure to present proper 28 documentation at the point-of-sale that is the basis of the 29 claim; or in the case of a third party other than the original 30 Medicare fee-for-service program under parts A and B of Tit. 31 XVIII of the federal Social Security Act, a Medicare advantage 32 plan offered by a Medicare advantage organization under part C 33 of Tit. XVIII of the federal Social Security Act, a reasonable 34 cost reimbursement contract under 42 U.S.C. 1395mm, a health 35 -2- LSB 1182SZ (3) 90 pf/rh 2/ 34
S.F. 567 care prepayment plan under 42 U.S.C. 1395l, or a prescription 1 drug plan offered by a prescription drug plan sponsor under 2 part D of Tit. XVIII of the federal Social Security Act, solely 3 on the basis of a failure to obtain prior authorization for the 4 health care item or service for which the claim is submitted if 5 all of the following conditions are met: 6 (a) The claim is submitted to the third party by the 7 Medicaid payor no later than three years after the date on 8 which the health care item or service was furnished. 9 (b) Any action by the Medicaid payor to enforce its rights 10 under section 249A.54 with respect to such claim is commenced 11 not later than six years after the Medicaid payor submits the 12 claim for payment. 13 5. Notwithstanding any provision of law to the contrary, 14 the time limitations, requirements, and allowances specified 15 in this section shall apply to third-party obligations under 16 this section. 17 6. The department may adopt rules pursuant to chapter 17A 18 as necessary to administer this section. Rules governing 19 the exchange of information under this section shall be 20 consistent with all laws, regulations, and rules relating to 21 the confidentiality or privacy of personal information or 22 medical records, including but not limited to the federal 23 Health Insurance Portability and Accountability Act of 1996, 24 Pub. L. No. 104-191, and regulations promulgated in accordance 25 with that Act and published in 45 C.F.R. pts. 160 164. 26 Sec. 2. Section 249A.54, Code 2023, is amended by striking 27 the section and inserting in lieu thereof the following: 28 249A.54 Responsibility for payment on behalf of 29 Medicaid-eligible persons liability of other parties. 30 1. It is the intent of the general assembly that a Medicaid 31 payor be the payor of last resort for medical services 32 furnished to recipients. All other sources of payment for 33 medical services are primary relative to medical assistance 34 provided by the Medicaid payor. If benefits of a third party 35 -3- LSB 1182SZ (3) 90 pf/rh 3/ 34
S.F. 567 are discovered or become available after medical assistance has 1 been provided by the Medicaid payor, it is the intent of the 2 general assembly that the Medicaid payor be repaid in full and 3 prior to any other person, program, or entity. The Medicaid 4 payor shall be repaid in full from and to the extent of any 5 third-party benefits, regardless of whether a recipient is made 6 whole or other creditors are paid. 7 2. For the purposes of this section: 8 a. Collateral means all of the following: 9 (1) Any and all causes of action, suits, claims, 10 counterclaims, and demands that accrue to the recipient 11 or to the recipients agent, related to any covered injury 12 or illness, or medical services that necessitated that the 13 Medicaid payor provide medical assistance to the recipient. 14 (2) All judgments, settlements, and settlement agreements 15 rendered or entered into and related to such causes of action, 16 suits, claims, counterclaims, demands, or judgments. 17 (3) Proceeds. 18 b. Covered injury or illness means any sickness, injury, 19 disease, disability, deformity, abnormality disease, necessary 20 medical care, pregnancy, or death for which a third party is, 21 may be, could be, should be, or has been liable, and for which 22 the Medicaid payor is, or may be, obligated to provide, or has 23 provided, medical assistance. 24 c. Medicaid payor means the department or any person, 25 entity, or organization that is legally responsible by 26 contract, statute, or agreement to pay claims for medical 27 assistance including but not limited to managed care 28 organizations and other entities that contract with the state 29 to provide medical assistance under chapter 249A. 30 d. Medical service means medical or medically related 31 institutional or noninstitutional care, or a medical or 32 medically related institutional or noninstitutional good, item, 33 or service covered by Medicaid. 34 e. Payment as it relates to third-party benefits, means 35 -4- LSB 1182SZ (3) 90 pf/rh 4/ 34
S.F. 567 performance of a duty, promise, or obligation, or discharge of 1 a debt or liability, by the delivery, provision, or transfer of 2 third-party benefits for medical services. To pay means to 3 make payment. 4 f. Proceeds means whatever is received upon the sale, 5 exchange, collection, or other disposition of the collateral 6 or proceeds from the collateral and includes insurance payable 7 because of loss or damage to the collateral or proceeds. Cash 8 proceeds include money, checks, and deposit accounts and 9 similar proceeds. All other proceeds are noncash proceeds . 10 g. Recipient means a person who has applied for medical 11 assistance or who has received medical assistance. 12 h. Recipients agent includes a recipients legal 13 guardian, legal representative, or any other person acting on 14 behalf of the recipient. 15 i. Third party means an individual, entity, or program, 16 excluding Medicaid, that is or may be liable to pay all or a 17 part of the expenditures for medical assistance provided by a 18 Medicaid payor to the recipient. A third party includes but is 19 not limited to all of the following: 20 (1) A third-party administrator. 21 (2) A pharmacy benefits manager. 22 (3) A health insurer. 23 (4) A self-insured plan. 24 (5) A group health plan, as defined in section 607(1) of the 25 federal Employee Retirement Income Security Act of 1974. 26 (6) A service benefit plan. 27 (7) A managed care organization. 28 (8) Liability insurance including self-insurance. 29 (9) No-fault insurance. 30 (10) Workers compensation laws or plans. 31 (11) Other parties that by law, contract, or agreement 32 are legally responsible for payment of a claim for medical 33 services. 34 j. Third-party benefits mean any benefits that are or may 35 -5- LSB 1182SZ (3) 90 pf/rh 5/ 34
S.F. 567 be available to a recipient from a third party and that provide 1 or pay for medical services. Third-party benefits may be 2 created by law, contract, court award, judgment, settlement, 3 agreement, or any arrangement between a third party and any 4 person or entity, recipient, or otherwise. Third-party 5 benefits include but are not limited to all of the following: 6 (1) Benefits from collateral or proceeds. 7 (2) Health insurance benefits. 8 (3) Health maintenance organization benefits. 9 (4) Benefits from preferred provider arrangements and 10 prepaid health clinics. 11 (5) Benefits from liability insurance, uninsured and 12 underinsured motorist insurance, or personal injury protection 13 coverage. 14 (6) Medical benefits under workers compensation. 15 (7) Benefits from any obligation under law or equity to 16 provide medical support. 17 3. Third-party benefits for medical services shall be 18 primary to medical assistance provided by the Medicaid payor. 19 4. a. A Medicaid payor has all of the rights, privileges, 20 and responsibilities identified under this section. Each 21 Medicaid payor is a Medicaid payor to the extent of the 22 medical assistance provided by that Medicaid payor. Therefore, 23 Medicaid payors may exercise their Medicaid payors rights 24 under this section concurrently. 25 b. Notwithstanding the provisions of this subsection to the 26 contrary, if the department determines that a Medicaid payor 27 has not taken reasonable steps within a reasonable time to 28 recover third-party benefits, the department may exercise all 29 of the rights of the Medicaid payor under this section to the 30 exclusion of the Medicaid payor. If the department determines 31 the department will exercise such rights, the department shall 32 give notice to third parties and to the Medicaid payor. 33 5. A Medicaid payor may assign the Medicaid payors rights 34 under this section, including but not limited to an assignment 35 -6- LSB 1182SZ (3) 90 pf/rh 6/ 34
S.F. 567 to another Medicaid payor, a provider, or a contractor. 1 6. After the Medicaid payor has provided medical assistance 2 under the Medicaid program, the Medicaid payor shall seek 3 reimbursement for third-party benefits to the extent of the 4 Medicaid payors legal liability and for the full amount of 5 the third-party benefits, but not in excess of the amount of 6 medical assistance provided by the Medicaid payor. 7 7. On or before the thirtieth day following discovery by 8 a recipient of potential third-party benefits, a recipient or 9 the recipients agent, as applicable, shall inform the Medicaid 10 payor of any rights the recipient has to third-party benefits 11 and of the name and address of any person that is or may be 12 liable to provide third-party benefits. 13 8. When the Medicaid payor provides or becomes liable for 14 medical assistance, the Medicaid payor has the following rights 15 which shall be construed together to provide the greatest 16 recovery of third-party benefits: 17 a. The Medicaid payor is automatically subrogated to any 18 rights that a recipient or a recipients agent or legally 19 liable relative has to any third-party benefit for the full 20 amount of medical assistance provided by the Medicaid payor. 21 Recovery pursuant to these subrogation rights shall not be 22 reduced, prorated, or applied to only a portion of a judgment, 23 award, or settlement, but shall provide full recovery to the 24 Medicaid payor from any and all third-party benefits. Equities 25 of a recipient or a recipients agent, creditor, or health care 26 provider shall not defeat, reduce, or prorate recovery by the 27 Medicaid payor as to the Medicaid payors subrogation rights 28 granted under this paragraph. 29 b. By applying for, accepting, or accepting the benefit 30 of medical assistance, a recipient or a recipients agent or 31 legally liable relative automatically assigns to the Medicaid 32 payor any right, title, and interest such person has to any 33 third-party benefit, excluding any Medicare benefit to the 34 extent required to be excluded by federal law. 35 -7- LSB 1182SZ (3) 90 pf/rh 7/ 34
S.F. 567 (1) The assignment granted under this paragraph is absolute 1 and vests legal and equitable title to any such right in the 2 Medicaid payor, but not in excess of the amount of medical 3 assistance provided by the Medicaid payor. 4 (2) The Medicaid payor is a bona fide assignee for value in 5 the assigned right, title, or interest and takes vested legal 6 and equitable title free and clear of latent equities in a 7 third party. Equities of a recipient or a recipients agent, 8 creditor, or health care provider shall not defeat or reduce 9 recovery by the Medicaid payor as to the assignment granted 10 under this paragraph. 11 c. The Medicaid payor is entitled to and has an automatic 12 lien upon the collateral for the full amount of medical 13 assistance provided by the Medicaid payor to or on behalf of 14 the recipient for medical services furnished as a result of any 15 covered injury or illness for which a third party is or may be 16 liable. 17 (1) The lien attaches automatically when a recipient first 18 receives medical services for which the Medicaid payor may be 19 obligated to provide medical assistance. 20 (2) The filing of the notice of lien with the clerk of 21 the district court in the county in which the recipients 22 eligibility is established pursuant to this section shall be 23 notice of the lien to all persons. Notice is effective as of 24 the date of filing of the notice of lien. 25 (3) If the Medicaid payor has actual knowledge that the 26 recipient is represented by an attorney, the Medicaid payor 27 shall provide the attorney with a copy of the notice of lien. 28 However, this provision of a copy of the notice of lien to 29 the recipients attorney does not abrogate the attachment, 30 perfection, and notice satisfaction requirements specified 31 under subparagraphs (1) and (2). 32 (4) Only one claim of lien need be filed to provide notice 33 and shall provide sufficient notice as to any additional 34 or after-paid amount of medical assistance provided by the 35 -8- LSB 1182SZ (3) 90 pf/rh 8/ 34
S.F. 567 Medicaid payor for any specific covered injury or illness. 1 The Medicaid payor may, in the Medicaid payors discretion, 2 file additional, amended, or substitute notices of lien at any 3 time after the initial filing until the Medicaid payor has 4 been repaid the full amount of medical assistance provided 5 by Medicaid or otherwise has released the liable parties and 6 recipient. 7 (5) A release or satisfaction of any cause of action, 8 suit, claim, counterclaim, demand, judgment, settlement, or 9 settlement agreement shall not be effective as against a lien 10 created under this paragraph, unless the Medicaid payor joins 11 in the release or satisfaction or executes a release of the 12 lien. An acceptance of a release or satisfaction of any cause 13 of action, suit, claim, counterclaim, demand, or judgment and 14 any settlement of any of the foregoing in the absence of a 15 release or satisfaction of a lien created under this paragraph 16 shall prima facie constitute an impairment of the lien, and 17 the Medicaid payor is entitled to recover damages on account 18 of such impairment. In an action on account of impairment of a 19 lien, the Medicaid payor may recover from the person accepting 20 the release or satisfaction or the person making the settlement 21 the full amount of medical assistance provided by the Medicaid 22 payor. 23 (6) The lack of a properly filed claim of lien shall not 24 affect the Medicaid payors assignment or subrogation rights 25 provided in this subsection nor affect the existence of the 26 lien, but shall only affect the effective date of notice. 27 (7) The lien created by this paragraph is a first lien 28 and superior to the liens and charges of any provider of a 29 recipients medical services. If the lien is recorded, the 30 lien shall exist for a period of seven years after the date of 31 recording. If the lien is not recorded, the lien shall exist 32 for a period of seven years after the date of attachment. If 33 recorded, the lien may be extended for one additional period 34 of seven years by rerecording the claim of lien within the 35 -9- LSB 1182SZ (3) 90 pf/rh 9/ 34
S.F. 567 ninety-day period preceding the expiration of the lien. 1 9. Except as otherwise provided in this section, the 2 Medicaid payor shall recover the full amount of all medical 3 assistance provided by the Medicaid payor on behalf of the 4 recipient to the full extent of third-party benefits. The 5 Medicaid payor may collect recovered benefits directly from any 6 of the following: 7 a. A third party. 8 b. The recipient. 9 c. The provider of a recipients medical services if 10 third-party benefits have been recovered by the provider. 11 Notwithstanding any provision of this section to the contrary, 12 a provider shall not be required to refund or pay to the 13 Medicaid payor any amount in excess of the actual third-party 14 benefits received by the provider from a third party for 15 medical services provided to the recipient. 16 d. Any person who has received the third-party benefits. 17 10. a. A recipient and the recipients agent shall 18 cooperate in the Medicaid payors recovery of the recipients 19 third-party benefits and in establishing paternity and support 20 of a recipient child born out of wedlock. Such cooperation 21 shall include but is not limited to all of the following: 22 (1) Appearing at an office designated by the Medicaid payor 23 to provide relevant information or evidence. 24 (2) Appearing as a witness at a court proceeding or other 25 legal or administrative proceeding. 26 (3) Providing information or attesting to lack of 27 information under penalty of perjury. 28 (4) Paying to the Medicaid payor any third-party benefit 29 received. 30 (5) Taking any additional steps to assist in establishing 31 paternity or securing third-party benefits, or both. 32 b. Notwithstanding paragraph a , the Medicaid payor has the 33 discretion to waive, in writing, the requirement of cooperation 34 for good cause shown and as required by federal law. 35 -10- LSB 1182SZ (3) 90 pf/rh 10/ 34
S.F. 567 c. The department may deny or terminate eligibility for 1 any recipient who refuses to cooperate as required under this 2 subsection unless the department has waived cooperation as 3 provided under this subsection. 4 11. On or before the thirtieth day following the initiation 5 of a formal or informal recovery, other than by filing a 6 lawsuit, a recipients attorney shall provide written notice of 7 the activity or action to the Medicaid payor. 8 12. A recipient is deemed to have authorized the Medicaid 9 payor to obtain and release medical information and other 10 records with respect to the recipients medical services 11 for the sole purpose of obtaining reimbursement for medical 12 assistance provided by the Medicaid payor. 13 13. a. To enforce the Medicaid payors rights under 14 this section, the Medicaid payor may, as a matter of right, 15 institute, intervene in, or join in any legal or administrative 16 proceeding in the Medicaid payors own name, and in any or a 17 combination of any, of the following capacities: 18 (1) Individually. 19 (2) As a subrogee of the recipient. 20 (3) As an assignee of the recipient. 21 (4) As a lienholder of the collateral. 22 b. An action by the Medicaid payor to recover damages 23 in an action in tort under this subsection, which action is 24 derivative of the rights of the recipient, shall not constitute 25 a waiver of sovereign immunity. 26 c. A Medicaid payor, other than the department, shall obtain 27 the written consent of the department before the Medicaid payor 28 files a derivative legal action on behalf of a recipient. 29 d. When a Medicaid payor brings a derivative legal action on 30 behalf of a recipient, the Medicaid payor shall provide written 31 notice no later than thirty days after filing the action to the 32 recipient, the recipients agent, and, if the Medicaid payor 33 has actual knowledge that the recipient is represented by an 34 attorney, to the attorney of the recipient, as applicable. 35 -11- LSB 1182SZ (3) 90 pf/rh 11/ 34
S.F. 567 e. If the recipient or a recipients agent brings an action 1 against a third party, on or before the thirtieth day following 2 the filing of the action, the recipient, the recipients agent, 3 or the attorney of the recipient or the recipients agent, 4 as applicable, shall provide written notice to the Medicaid 5 payor of the action, including the name of the court in which 6 the action is brought, the case number of the action, and a 7 copy of the pleadings. The recipient, the recipients agent, 8 or the attorney of the recipient or the recipients agent, as 9 applicable, shall provide written notice of intent to dismiss 10 the action at least twenty-one days before the voluntary 11 dismissal of an action against a third party. Notice to the 12 Medicaid payor shall be sent as specified by rule. 13 14. On or before the thirtieth day before the recipient 14 finalizes a judgment, award, settlement, or any other recovery 15 where the Medicaid payor has the right to recovery, the 16 recipient, the recipients agent, or the attorney of the 17 recipient or recipients agent, as applicable, shall give the 18 Medicaid payor notice of the judgment, award, settlement, 19 or recovery. The judgment, award, settlement, or recovery 20 shall not be finalized unless such notice is provided and the 21 Medicaid payor has had a reasonable opportunity to recover 22 under the Medicaid payors rights to subrogation, assignment, 23 and lien. If the Medicaid payor is not given notice, the 24 recipient, the recipients agent, and the recipients or 25 recipients agents attorney are jointly and severally liable 26 to reimburse the Medicaid payor for the recovery received to 27 the extent of medical assistance paid by the Medicaid payor. 28 The notice required under this subsection means written 29 notice sent via certified mail to the address listed on the 30 departments internet site for a Medicaid payors third-party 31 liability contact. The notice requirement is only satisfied 32 for the specific Medicaid payor upon receipt by the specific 33 Medicaid payors third-party liability contact of such written 34 notice sent via certified mail. 35 -12- LSB 1182SZ (3) 90 pf/rh 12/ 34
S.F. 567 15. a. Except as otherwise provided in this section, the 1 entire amount of any settlement of the recipients action or 2 claim involving third-party benefits, with or without suit, is 3 subject to the Medicaid payors claim for reimbursement of the 4 amount of medical assistance provided and any lien pursuant to 5 the claim. 6 b. Insurance and other third-party benefits shall not 7 contain any term or provision which purports to limit or 8 exclude payment or the provision of benefits for an individual 9 if the individual is eligible for, or a recipient of, medical 10 assistance, and any such term or provision shall be void as 11 against public policy. 12 16. In an action in tort against a third party in which the 13 recipient is a party and which results in a judgment, award, or 14 settlement from a third party, the amount recovered shall be 15 distributed as follows: 16 a. After deduction of reasonable attorney fees, reasonably 17 necessary legal expenses, and filing fees, there is a 18 rebuttable presumption that all Medicaid payors shall 19 collectively receive two-thirds of the remaining amount 20 recovered or the total amount of medical assistance provided by 21 the Medicaid payors, whichever is less. A party may rebut this 22 presumption in accordance with subsection 17. 23 b. The remaining recovered amount shall be paid to the 24 recipient. 25 c. If the recovered amount available for the repayment of 26 medical assistance is insufficient to satisfy the competing 27 claims of the Medicaid payors, each Medicaid payor shall be 28 entitled to the Medicaid payors respective pro rata share of 29 the recovered amount that is available. 30 17. a. A recipient or a recipients agent who has notice 31 or who has actual knowledge of the Medicaid payors rights 32 to third-party benefits under this section and who receives 33 any third-party benefit or proceeds for a covered injury or 34 illness shall on or before the sixtieth day after receipt of 35 -13- LSB 1182SZ (3) 90 pf/rh 13/ 34
S.F. 567 the proceeds pay the Medicaid payor the full amount of the 1 third-party benefits, but not more than the total medical 2 assistance provided by the Medicaid payor, or shall place the 3 full amount of the third-party benefits in an interest-bearing 4 trust account for the benefit of the Medicaid payor pending a 5 determination of the Medicaid payors rights to the benefits 6 under this subsection. 7 b. If federal law limits the Medicaid payor to reimbursement 8 from the recovered damages for medical expenses, a recipient 9 may contest the amount designated as recovered damages for 10 medical expenses payable to the Medicaid payor pursuant to the 11 formula specified in subsection 16. In order to successfully 12 rebut the formula specified in subsection 16, the recipient 13 shall prove, by clear and convincing evidence, that the portion 14 of the total recovery which should be allocated as medical 15 expenses, including future medical expenses, is less than the 16 amount calculated by the Medicaid payor pursuant to the formula 17 specified in subsection 16. Alternatively, to successfully 18 rebut the formula specified in subsection 16, the recipient 19 shall prove, by clear and convincing evidence, that Medicaid 20 provided a lesser amount of medical assistance than that 21 asserted by the Medicaid payor. A settlement agreement that 22 designates the amount of recovered damages for medical expenses 23 is not clear and convincing evidence and is not sufficient to 24 establish the recipients burden of proof, unless the Medicaid 25 payor is a party to the settlement agreement. 26 c. If the recipient or the recipients agent filed a legal 27 action to recover against the third party, the court in which 28 such action was filed shall resolve any dispute concerning 29 the amount owed to the Medicaid payor, and shall retain 30 jurisdiction of the case to resolve the amount of the lien 31 after the dismissal of the action. 32 d. If the recipient or the recipients agent did not file a 33 legal action, to resolve any dispute concerning the amount owed 34 to the Medicaid payor, the recipient or the recipients agent 35 -14- LSB 1182SZ (3) 90 pf/rh 14/ 34
S.F. 567 shall file a petition for declaratory judgment as permitted 1 under rule of civil procedure 1.1101 on or before the one 2 hundred twenty-first day after the date of payment of funds to 3 the Medicaid payor or the date of placing the full amount of 4 the third-party benefits in a trust account. Venue for all 5 declaratory actions under this subsection shall lie in Polk 6 county. 7 e. If a Medicaid payor and the recipient or the recipients 8 agent disagree as to whether a medical claim is related to a 9 covered injury or illness, the Medicaid payor and the recipient 10 or the recipients agent shall attempt to work cooperatively 11 to resolve the disagreement before seeking resolution by the 12 court. 13 f. Each party shall pay the partys own attorney fees and 14 costs for any legal action conducted under this subsection. 15 18. Notwithstanding any other provision of law to the 16 contrary, when medical assistance is provided for a minor, any 17 statute of limitation or repose applicable to an action or 18 claim of a legally responsible relative for the minors medical 19 expenses is extended in favor of the legally responsible 20 relative so that the legally responsible relative shall have 21 one year from and after the attainment of the minors majority 22 within which to file a complaint, make a claim, or commence an 23 action. 24 19. In recovering any payments in accordance with this 25 section, the Medicaid payor may make appropriate settlements. 26 20. If a recipient or a recipients agent submits via notice 27 a request that the Medicaid payor provide an itemization of 28 medical assistance paid for any covered injury or illness, 29 the Medicaid payor shall provide the itemization on or before 30 the sixty-fifth day following the day on which the Medicaid 31 payor received the request. Failure to provide the itemization 32 within the specified time shall not bar a Medicaid payors 33 recovery, unless the itemization response is delinquent for 34 more than one hundred twenty days without justifiable cause. A 35 -15- LSB 1182SZ (3) 90 pf/rh 15/ 34
S.F. 567 Medicaid payor shall not be under any obligation to provide a 1 final itemization until a reasonable period of time after the 2 processing of payment in relation to the recipients receipt of 3 final medical services. A Medicaid payor shall not be under 4 any obligation to respond to more than one itemization request 5 in any one-hundred-twenty-day period. The notice required 6 under this subsection means written notice sent via certified 7 mail to the address listed on the departments internet site 8 for a Medicaid payors third-party liability contact. The 9 notice requirement is only satisfied for the specific Medicaid 10 payor upon receipt by the specific Medicaid payors third-party 11 liability contact of such written notice sent via certified 12 mail. 13 21. The department may adopt rules to administer this 14 section and applicable federal requirements. 15 DIVISION II 16 MEDICAID MANAGED CARE ORGANIZATION TAXATION OF PREMIUMS 17 Sec. 3. NEW SECTION . 249A.13 Medicaid managed care 18 organization premiums fund. 19 1. A Medicaid managed care organization premiums fund 20 is created in the state treasury under the authority of the 21 department of health and human services. Moneys collected by 22 the director of the department of revenue as taxes on premiums 23 pursuant to section 432.1A shall be deposited in the fund. 24 2. Moneys in the fund are appropriated to the department 25 of health and human services for the purposes of the medical 26 assistance program. 27 3. Notwithstanding section 8.33, moneys in the fund 28 that remain unencumbered or unobligated at the close of a 29 fiscal year shall not revert but shall remain available for 30 expenditure for the purposes designated. Notwithstanding 31 section 12C.7, subsection 2, interest or earnings on moneys in 32 the fund shall be credited to the fund. 33 Sec. 4. NEW SECTION . 432.1A Health maintenance organization 34 medical assistance program premium tax. 35 -16- LSB 1182SZ (3) 90 pf/rh 16/ 34
S.F. 567 1. Pursuant to section 514B.31, subsection 3, a health 1 maintenance organization contracting with the department of 2 health and human services to administer the medical assistance 3 program under chapter 249A, shall pay as taxes to the director 4 of the department of revenue for deposit in the Medicaid 5 managed care organization premiums fund created in section 6 249A.13, an amount equal to two and one-half percent of 7 the premiums received and taxable under subsection 514B.31, 8 subsection 3. 9 2. Except as provided in subsection 3, the premium tax shall 10 be paid on or before March 1 of the year following the calendar 11 year for which the tax is due. The commissioner of insurance 12 may suspend or revoke the license of a health maintenance 13 organization subject to the premium tax in subsection 1 that 14 fails to pay the premium tax on or before the due date. 15 3. a. Each health maintenance organization transacting 16 business in this state that is subject to the tax in subsection 17 1 shall remit on or before June 1, on a prepayment basis, 18 an amount equal to one-half of the health maintenance 19 organizations premium tax liability for the preceding calendar 20 year. 21 b. In addition to the prepayment amount in paragraph 22 a , each health maintenance organization subject to the 23 tax in subsection 1 shall remit on or before August 15, on 24 a prepayment basis, an additional one-half of the health 25 maintenance organizations premium tax liability for the 26 preceding calendar year. 27 c. The sums prepaid by a health maintenance organization 28 under paragraphs a and b shall be allowed as credits 29 against the health maintenance organizations premium tax 30 liability for the calendar year during which the payments are 31 made. If a prepayment made under this subsection exceeds 32 the health maintenance organizations annual premium tax 33 liability, the excess shall be allowed as a credit against the 34 health maintenance organizations subsequent prepayment or tax 35 -17- LSB 1182SZ (3) 90 pf/rh 17/ 34
S.F. 567 liabilities under this section. The commissioner of insurance 1 shall authorize the department of revenue to make a cash refund 2 to a health maintenance organization, in lieu of a credit 3 against subsequent prepayment or tax liabilities under this 4 section, if the health maintenance organization demonstrates 5 the inability to recoup the funds paid via a credit. The 6 commissioner of insurance shall adopt rules establishing a 7 health maintenance organizations eligibility for a cash 8 refund, and the process for the department of revenue to make a 9 cash refund to an eligible health maintenance organization from 10 the Medicaid managed care organization premiums fund created in 11 section 249A.13. The commissioner of insurance may suspend or 12 revoke the license of a health maintenance organization that 13 fails to make a prepayment on or before the due date under this 14 subsection. 15 d. Sections 432.10 and 432.14 are applicable to premium 16 taxes due under this section. 17 Sec. 5. Section 514B.31, Code 2023, is amended by striking 18 the section and inserting in lieu thereof the following: 19 514B.31 Taxation. 20 1. For the first five years of the existence of a 21 health maintenance organization and the health maintenance 22 organizations successors and assigns, the following shall 23 not be considered premiums received and taxable under section 24 432.1: 25 a. Payments received by the health maintenance organization 26 for health care services, insurance, indemnity, or other 27 benefits to which an enrollee is entitled through a health 28 maintenance organization authorized under this chapter. 29 b. Payments made by the health maintenance organization 30 to providers for health care services, to insurers, or to 31 corporations authorized under chapter 514 for insurance, 32 indemnity, or other service benefits authorized under this 33 chapter. 34 2. After the first five years of the existence of a 35 -18- LSB 1182SZ (3) 90 pf/rh 18/ 34
S.F. 567 health maintenance organization and the health maintenance 1 organizations successors and assigns, the following shall be 2 considered premiums received and taxable under section 432.1: 3 a. Payments received by the health maintenance organization 4 for health care services, insurance, indemnity, or other 5 benefits to which an enrollee is entitled through a health 6 maintenance organization authorized under this chapter. 7 b. Payments made by the health maintenance organization 8 to providers for health care services, to insurers, or to 9 corporations authorized under chapter 514 for insurance, 10 indemnity, or other service benefits authorized under this 11 chapter. 12 3. Notwithstanding subsections 1 and 2, beginning January 13 1, 2024, and for each subsequent calendar year, the following 14 shall be considered premiums received and taxable under section 15 432.1A for a health maintenance organization contracting with 16 the department of health and human services to administer the 17 medical assistance program under chapter 249A: 18 a. Payments received by the health maintenance organization 19 for health care services, insurance, indemnity, or other 20 benefits to which an enrollee is entitled through a health 21 maintenance organization authorized under this chapter. 22 b. Payments made by the health maintenance organization 23 to providers for health care services, to insurers, or to 24 corporations authorized under chapter 514 for insurance, 25 indemnity, or other service benefits authorized under this 26 chapter. 27 4. Payments made to a health maintenance organization 28 by the United States secretary of health and human services 29 under a contract issued under section 1833 or 1876 of the 30 federal Social Security Act, or under section 4015 of the 31 federal Omnibus Budget Reconciliation Act of 1987, shall not 32 be considered premiums received and shall not be taxable under 33 section 432.1 or 432.1A. Payments made to a health maintenance 34 organization contracting with the department of health and 35 -19- LSB 1182SZ (3) 90 pf/rh 19/ 34
S.F. 567 human services to administer the medical assistance program 1 under chapter 249A shall not be taxable under section 432.1. 2 DIVISION III 3 NURSING FACILITY LICENSING AND FINANCING 4 Sec. 6. NEW SECTION . 135.63A Moratorium new construction 5 or permanent change in bed capacity nursing facilities. 6 1. Beginning July 1, 2023, the department, in consultation 7 with the department of health and human services, may impose 8 a temporary moratorium on submission of applications for new 9 construction of a nursing facility or a permanent change in 10 the bed capacity of a nursing facility that increases the 11 bed capacity of the nursing facility for an initial period 12 of twelve months. The department may extend the moratorium 13 in six-month increments following the conclusion of the 14 initial twelve-month period, but for no longer than a total of 15 thirty-six months. The department shall document, in writing, 16 the need for each extension of the moratorium. 17 2. The department, in consultation with the department 18 of health and human services, may waive the moratorium as 19 specified in this section if the department determines there 20 is a need for specialized needs beds or if a waiver request has 21 been made in the manner specified by the department. 22 Sec. 7. NEW SECTION . 135C.7A Nursing facility license 23 application required information escrow account. 24 1. In addition to the requirements of section 135C.7, an 25 applicant for a nursing facility license shall provide all of 26 the following information in the license application: 27 a. Information related to the applicants financial 28 suitability to operate a nursing facility as verified by the 29 applicant. 30 b. Whether the applicant has voluntarily surrendered 31 a license while under investigation in another licensing 32 jurisdiction. 33 c. Whether another licensing jurisdiction has taken 34 disciplinary action against the applicant relating to the 35 -20- LSB 1182SZ (3) 90 pf/rh 20/ 34
S.F. 567 applicants operation of a nursing facility or whether another 1 nursing facility owned or operated by the applicant has been 2 subject to operation by a court-appointed receiver or temporary 3 manager. 4 d. Whether there are any complaints, allegations, or 5 investigations against the applicant pending in another 6 licensing jurisdiction. 7 2. The information or documents provided to the department 8 under this section detailing the applicants financial 9 condition or the terms of the applicants contractual business 10 relationships shall be confidential and not considered a public 11 record under chapter 22. 12 3. If an applicant does not have at least five years of 13 experience operating a nursing facility in this state or 14 pursuant to equivalent licensing or certification provisions 15 in any other state, the applicant shall establish an escrow 16 account containing an amount sufficient to support full service 17 operation of the nursing facility for a two-month period. 18 The Medicaid program shall be entitled to the funds held in 19 escrow if the nursing facility is subject to operation under 20 receivership pursuant to section 135C.30. 21 Sec. 8. Section 135C.10, Code 2023, is amended by adding the 22 following new subsection: 23 NEW SUBSECTION . 9A. Failure of a nursing facility licensee 24 or license applicant to establish financial suitability to 25 operate a nursing facility including failure to establish an 26 escrow account pursuant to section 135C.7A. 27 Sec. 9. Section 249L.3, Code 2023, is amended by adding the 28 following new subsection: 29 NEW SUBSECTION . 6A. A nursing facility shall not knowingly 30 pass the quality assurance assessment on to non-Medicaid 31 payors, including as a rate increase or service charge. If a 32 nursing facility violates this section, the department shall 33 not reimburse the nursing facility the quality assurance 34 assessment due the nursing facility under the medical 35 -21- LSB 1182SZ (3) 90 pf/rh 21/ 34
S.F. 567 assistance program, but shall instead only reimburse the 1 nursing facility at the nursing facility base reimbursement 2 rate under the medical assistance program for one year from the 3 date the violation is discovered. 4 EXPLANATION 5 The inclusion of this explanation does not constitute agreement with 6 the explanations substance by the members of the general assembly. 7 This bill relates to health care services and financing 8 including nursing facility licensing and financing and the 9 Medicaid program including recovery by the department of health 10 and human services (HHS or the department) from third parties 11 and taxation of Medicaid managed care organization premiums. 12 DIVISION I MEDICAID PROGRAM THIRD-PARTY RECOVERY. The 13 bill strikes and replaces current provisions in Code section 14 249A.37 (health care information sharing) and Code section 15 249A.54 (assignment lien). 16 Under the bill, new Code section 249A.37 (duties of third 17 parties) relates to the duties of third parties, defined 18 under the bill as an individual, entity, or program, 19 excluding Medicaid, that is or may be liable to pay all or 20 a part of the expenditures for medical assistance provided 21 by a Medicaid payor to the recipient. The listing of 22 third parties includes but is not limited to a third-party 23 administrator, a pharmacy benefits manager, a health insurer, a 24 self-insured plan, a group health plan, a service benefit plan, 25 a managed care organization, liability insurance including 26 self-insurance, no-fault insurance, workers compensation laws 27 or plans, and other parties that by law, contract, or agreement 28 are legally responsible for payment of a claim for a medical 29 service. The bill also defines terms including Medicaid 30 payor, recipient, third party, and third-party benefits. 31 The bill provides that the third-party obligations specified 32 under the bill are a condition of doing business in the state, 33 and a third party that fails to comply with these obligations 34 shall not be eligible to do business in the state. 35 -22- LSB 1182SZ (3) 90 pf/rh 22/ 34
S.F. 567 The bill requires that a third party that is a carrier shall 1 enter into a health insurance data match program with HHS 2 for the sole purpose of comparing the names of the carriers 3 insureds with the names of recipients as required by Code 4 section 505.25 (information provided to medical assistance 5 program, Hawki program, and child support services). 6 The bill specifies the duties of a third party under the 7 Medicaid program including cooperating with the Medicaid payor 8 in identifying recipients for whom third-party benefits are 9 available; accepting the Medicaid payors rights of recovery 10 and assignment to the Medicaid payor for payments which the 11 Medicaid payor has made; accepting authorization provided by 12 the Medicaid payor that the health care item or service is 13 covered as if such authorization were the prior authorization 14 made by the third party for such health care item or service; 15 responding to inquiries from Medicaid payors regarding claims 16 for payment; and not denying claims submitted by a Medicaid 17 payor solely on the basis of the date of submission of the 18 claim, the type or format of the claim form, a failure to 19 present proper documentation, or in the case of specified 20 third-party payors solely on the basis of a failure to obtain 21 prior authorization if certain conditions are met. 22 The department may adopt administrative rules to administer 23 this Code section of the bill. Rules governing the exchange 24 of information under the bill shall be consistent with all 25 laws, regulations, and rules relating to the confidentiality or 26 privacy of personal information or medical records, including 27 but not limited to the federal Health Insurance Portability 28 and Accountability Act (HIPAA) and regulations promulgated in 29 accordance with HIPAA. 30 Under new Code section 249A.54 (responsibility for payment 31 on behalf of Medicaid-eligible persons liability of other 32 parties) the bill includes specific provisions relating to the 33 responsibility for payment on behalf of Medicaid recipients, 34 which include both persons who have applied for and persons 35 -23- LSB 1182SZ (3) 90 pf/rh 23/ 34
S.F. 567 who have received medical assistance, when other parties are 1 liable. 2 The bill provides that it is the intent of the general 3 assembly that Medicaid payors be the payor of last resort for 4 medical services furnished to recipients. All other sources of 5 payment for medical services are primary relative to medical 6 assistance provided by the Medicaid payor. If benefits of a 7 third party are discovered or become available after medical 8 assistance has been provided by the Medicaid payor, it is 9 the intent of the general assembly that the Medicaid payor 10 be repaid in full and prior to any other person, program, or 11 entity. The Medicaid payor shall be repaid in full from and to 12 the extent of any third-party benefits, regardless of whether a 13 recipient is made whole or other creditors paid. 14 The bill provides definitions for collateral, covered 15 injury or illness, Medicaid payor, medical service, 16 payment, proceeds, recipient which includes both an 17 applicant for and recipient of medical assistance, recipients 18 agent, third party, and third-party benefits. 19 The bill provides that third-party benefits for medical 20 services shall be primary relative to medical assistance 21 provided by the Medicaid payor. A Medicaid payor has all of 22 the rights, privileges, and responsibilities identified under 23 the bill, but if HHS determines that a Medicaid payor has not 24 taken reasonable steps within a reasonable time to recover 25 third-party benefits, HHS may exercise all of the rights of the 26 Medicaid payor to the exclusion of the Medicaid payor following 27 provision of notice to third parties and the Medicaid payor. 28 A Medicaid payor may assign the Medicaid payors rights 29 under the bill, including to another Medicaid payor, a 30 provider, or a contractor. After the Medicaid payor has 31 provided medical assistance, the Medicaid payor shall seek 32 reimbursement for third-party benefits to the extent of the 33 Medicaid payors legal liability and for the full amount of 34 the third-party benefits, but not in excess of the amount of 35 -24- LSB 1182SZ (3) 90 pf/rh 24/ 34
S.F. 567 medical assistance provided by the Medicaid payor. 1 Within 30 days following discovery by a recipient of 2 potential third-party benefits, a recipient or the recipients 3 agent, as applicable, shall inform the Medicaid payor of any 4 rights the recipient has to third-party benefits and provide 5 identifying information for any person that is or may be liable 6 to provide third-party benefits. 7 The bill specifies the rights of a Medicaid payor when 8 the Medicaid payor provides or becomes liable for medical 9 assistance, including that the Medicaid payor is automatically 10 subrogated to any rights that a recipient or a recipients 11 agent or legally liable relative has to any third-party 12 benefit for the full amount of medical assistance provided by 13 the Medicaid payor; that the Medicaid payor is automatically 14 assigned any right, title, and interest a recipient or 15 a recipients agent or legally liable relative has to a 16 third-party benefit by virtue of applying for, accepting, or 17 accepting the benefit of medical assistance, excluding any 18 Medicare benefit to the extent required to be excluded by 19 federal law; and that the Medicaid payor is entitled to and 20 has an automatic lien upon the collateral for the full amount 21 of medical assistance provided by the Medicaid payor to or on 22 behalf of the recipient for medical services furnished as a 23 result of any covered injury or illness for which a third party 24 is or may be liable. 25 Unless otherwise provided in the bill, the Medicaid payor 26 shall recover the full amount of all medical assistance 27 provided by the Medicaid payor on behalf of the recipient 28 to the full extent of third-party benefits. A recipient 29 and the recipients agent shall cooperate in the Medicaid 30 payors recovery of the recipients third-party benefits and 31 in establishing paternity and support of a recipient child 32 born out of wedlock. The Medicaid payor has the discretion 33 to waive, in writing, the requirement of cooperation for good 34 cause shown and as required by federal law. The department may 35 -25- LSB 1182SZ (3) 90 pf/rh 25/ 34
S.F. 567 deny or terminate eligibility for any recipient who refuses to 1 cooperate, unless HHS has waived cooperation. 2 Within 30 days of initiating formal or informal recovery, 3 other than by filing a lawsuit, a recipients attorney shall 4 provide written notice of the activity or action to the 5 Medicaid payor. 6 A recipient is deemed to have authorized the Medicaid payor 7 to obtain and release medical information and other records 8 with respect to the recipients medical services for the sole 9 purpose of obtaining reimbursement for medical assistance 10 provided by the Medicaid payor. 11 To enforce the Medicaid payors rights, the Medicaid 12 payor may institute, intervene in, or join in any legal or 13 administrative proceeding in the Medicaid payors own name, and 14 in a number or a combination of capacities listed in the bill. 15 An action by the Medicaid payor to recover damages in an action 16 in tort, which is derivative of the rights of the recipient, 17 shall not constitute a waiver of sovereign immunity. 18 A Medicaid payor, other than HHS, shall obtain written 19 consent from HHS before the Medicaid payor files a derivative 20 legal action on behalf of a recipient, and when a Medicaid 21 payor brings such a derivative action, the Medicaid payor shall 22 provide written notice no later than 30 days after filing the 23 action to the recipient, the recipients agent, and, if the 24 Medicaid payor has actual knowledge that the recipient is 25 represented by an attorney, to the attorney of the recipient, 26 as applicable. 27 If an action is filed by a recipient or a recipients agent 28 against a third party, the recipient, the recipients agent, 29 or the attorney of the recipient or the recipients agent, 30 as applicable, shall provide written notice to the Medicaid 31 payor of the action, including the name of the court in which 32 the action is brought, the case number of the action, and a 33 copy of the pleadings. The recipient, the recipients agent, 34 or the attorney of the recipient or the recipients agent, 35 -26- LSB 1182SZ (3) 90 pf/rh 26/ 34
S.F. 567 as applicable, shall also provide written notice of intent 1 to dismiss the action prior to the voluntary dismissal of an 2 action against a third party. 3 Before a recipient finalizes a judgment, award, settlement, 4 or any other recovery where the Medicaid payor has the right 5 to recovery, the recipient, the recipients agent, or the 6 attorney of the recipient or recipients agent, as applicable, 7 shall give the Medicaid payor notice, as specified, of the 8 judgment, award, settlement, or recovery. The judgment, 9 award, settlement, or recovery shall not be finalized 10 unless the notice is provided and the Medicaid payor has 11 a reasonable opportunity to recover under its rights to 12 subrogation, assignment, and lien. If notice is not provided, 13 the recipient, the recipients agent, and the recipients or 14 recipients agents attorney are jointly and severally liable 15 to reimburse the Medicaid payor for the recovery received to 16 the extent of medical assistance paid by the Medicaid payor. 17 Unless otherwise provided, the entire amount of any 18 settlement of the recipients action or claim involving 19 third-party benefits is subject to the Medicaid payors claim 20 for reimbursement of the amount of medical assistance provided 21 and any lien pursuant to the claim. 22 The bill prohibits insurance and other third-party benefits 23 from containing any term or provision which purports to 24 limit or exclude payment or the provision of benefits for an 25 individual if the individual is eligible for, or a recipient 26 of, medical assistance, and any such term or provision shall be 27 void as against public policy. 28 In an action in tort against a third party in which the 29 recipient is a party, of the amount recovered in any resulting 30 judgment, award, or settlement from a third party, after 31 deduction of reasonable attorney fees, reasonably necessary 32 legal expenses, and filing fees, there is a rebuttable 33 presumption that all Medicaid payors shall collectively receive 34 two-thirds of the remaining amount recovered or the total 35 -27- LSB 1182SZ (3) 90 pf/rh 27/ 34
S.F. 567 amount of medical assistance provided by the Medicaid payors, 1 whichever is less; and the remaining amount recovered shall be 2 paid to the recipient. In calculating the Medicaid payors 3 recovered amount of medical assistance, the fee for services of 4 an attorney retained by the recipient or the recipients legal 5 representative shall not exceed one-third of the judgment, 6 award, or settlement amount. If the recovered amount is 7 insufficient to satisfy the competing claims of the Medicaid 8 payors, each Medicaid payor shall be entitled to the Medicaid 9 payors respective pro rata share of the recovered amount that 10 is available. 11 A recipient or a recipients agent who has notice or 12 who has actual knowledge of the Medicaid payors rights to 13 third-party benefits who receives any third-party benefit or 14 proceeds for a covered injury or illness, shall after receipt 15 of the proceeds pay the Medicaid payor the full amount of the 16 third-party benefits, but not more than the total medical 17 assistance provided by the Medicaid payor, or shall place the 18 full amount of the third-party benefits in an interest-bearing 19 trust account for the benefit of the Medicaid payor pending a 20 determination of the Medicaid payors rights to the benefits. 21 If federal law limits the Medicaid payor to reimbursement 22 from the recovered damages for medical expenses, a recipient 23 may contest the amount designated as recovered damages for 24 medical expenses payable to the Medicaid payor as specified 25 in the formula under the bill. To successfully rebut the 26 formula, the recipient shall prove, by clear and convincing 27 evidence, that the portion of the total recovery which should 28 be allocated as medical expenses, including future medical 29 expenses, is less than the amount calculated by the Medicaid 30 payor pursuant to the formula. Alternatively, to successfully 31 rebut the formula, the recipient shall prove, by clear and 32 convincing evidence, that Medicaid provided a lesser amount of 33 medical assistance than that asserted by the Medicaid payor. A 34 settlement agreement that designates the amount of recovered 35 -28- LSB 1182SZ (3) 90 pf/rh 28/ 34
S.F. 567 damages for medical expenses is not clear and convincing 1 evidence and is not sufficient to establish the recipients 2 burden of proof, unless the Medicaid payor is a party to the 3 settlement agreement. 4 If the recipient or the recipients agent filed a legal 5 action to recover against the third party, the court in which 6 such action was filed shall resolve any dispute concerning 7 the amount owed to the Medicaid payor, and shall retain 8 jurisdiction of the case to resolve the amount of the lien 9 after the dismissal of the action. If the recipient or the 10 recipients agent did not file a legal action to resolve any 11 dispute concerning the amount owed to the Medicaid payor, the 12 recipient or the recipients agent shall file a petition for 13 declaratory judgment. Venue for all such declaratory actions 14 shall lie in Polk county. Each party shall pay the partys own 15 attorney fees and costs for any legal action conducted under 16 this provision of the bill. 17 If a Medicaid payor and the recipient or the recipients 18 agent disagree as to whether a medical claim is related to a 19 covered injury or illness, the Medicaid payor and the recipient 20 or the recipients agent shall attempt to work cooperatively 21 to resolve the disagreement before seeking resolution by the 22 court. 23 With regard to medical assistance provided to a minor, and 24 notwithstanding any other provision of law to the contrary, any 25 statute of limitations or repose applicable to an action or 26 claim of a legally responsible relative for the minors medical 27 expenses is extended in favor of the legally responsible 28 relative so that the legally responsible relative shall have 29 one year from and after the attainment of the minors majority 30 within which to file a complaint, make a claim, or commence an 31 action. 32 In recovering any payments under the bill, the Medicaid 33 payor may make appropriate settlements. 34 The bill provides the process and limitations for a request 35 -29- LSB 1182SZ (3) 90 pf/rh 29/ 34
S.F. 567 by a recipient or a recipients agent that a Medicaid payor 1 provide an itemization of medical assistance paid for any 2 covered injury or illness via notice as specified under the 3 bill. 4 The department may adopt administrative rules to administer 5 this portion of the bill and applicable federal requirements. 6 DIVISION II MEDICAID MANAGED CARE ORGANIZATION 7 TAXATION OF PREMIUMS. The bill relates to taxation of health 8 maintenance organizations. 9 Under current Code section 514B.31 (taxation), for the 10 first five years of the existence of a health maintenance 11 organization (HMO) or its successor, payments received by the 12 HMO for health care services, insurance, indemnity, or other 13 benefits to which an enrollee is entitled, and payments made by 14 the HMO to a provider for health care services, to insurers, or 15 to corporations authorized under Code chapter 514 (nonprofit 16 health services corporations) for insurance, indemnity, or 17 other service benefits, are not considered premiums received 18 and not taxable under Code section 432.1 (tax on gross premiums 19 exclusions). After five years, payments received by the 20 HMO or its successor for health care services, insurance, 21 indemnity, or other benefits to which an enrollee is entitled, 22 and payments made by the HMO to a provider for health care 23 services, to insurers, or to corporations authorized under 24 Code chapter 514 (nonprofit health services corporations) 25 for insurance, indemnity, or other service benefits, are 26 considered premiums received and taxable under Code section 27 432.1. Current Code section 514B.31 also provides that certain 28 payments made by the United States secretary of health and 29 human services are not considered premiums and therefore not 30 taxable under Code section 432.1. 31 The bill amends Code section 514B.31 to exempt from 32 consideration as premiums and therefore not taxable under 33 either Code section 432.1 (tax on gross premiums exclusions) 34 or new Code section 432.1A (health maintenance organization 35 -30- LSB 1182SZ (3) 90 pf/rh 30/ 34
S.F. 567 medical assistance program premium tax) payments to health 1 maintenance organizations from the United States secretary of 2 health and human services under contracts issued under section 3 1833 or 1876 of the federal Social Security Act or section 4 4015 of the federal Omnibus Budget Reconciliation Act of 1987. 5 However, the bill provides that payments made to a health 6 maintenance organization contracting with HHS to administer the 7 Medicaid program shall not be taxable only under Code section 8 432.1. The bill also amends Code section 514B.31 to provide 9 that notwithstanding the provisions applicable to HMOs under 10 Code section 514B.31 relating to a premium tax, beginning 11 January 1, 2024, and for each subsequent calendar year, for an 12 HMO contracting with HHS to administer the medical assistance 13 program under Code chapter 249A, payments received by the 14 HMO for health care services, insurance, indemnity, or other 15 benefits to which an enrollee is entitled, and payments made by 16 the HMO to a provider for health care services, to insurers, 17 or to corporations authorized under Code chapter 514 for 18 insurance, indemnity, or other service benefits, are considered 19 premiums received and taxable under new Code section 432.1A. 20 The bill establishes under new Code section 432.1A the 21 parameters of the new tax on HMOs contracting with HHS to 22 administer the medical assistance program under Code chapter 23 249A. Such HMOs shall pay as taxes to the director of the 24 department of revenue for deposit in the Medicaid managed care 25 organization premiums fund an amount equal to 2.5 percent of 26 the premiums received and taxable. The premium tax shall be 27 paid on or before March 1 of the year following the calendar 28 year for which the tax is due. The commissioner of insurance 29 may suspend or revoke the license of an HMO subject to the 30 premium tax that fails to pay the premium tax on or before the 31 due date. Code sections 432.10 (sufficiency of remitted tax 32 notice) and 432.14 (statute of limitations) apply to the 33 premium tax due. 34 An HMO subject to the new tax shall remit on or before June 35 -31- LSB 1182SZ (3) 90 pf/rh 31/ 34
S.F. 567 1, on a prepayment basis, an amount equal to one-half of the 1 HMOs premium tax liability for the preceding calendar year; 2 and shall remit on or before August 15, on a prepayment basis, 3 an additional one-half of the HMOs premium tax liability 4 for the preceding calendar year. If a prepayment exceeds 5 the HMOs annual premium tax liability, the excess shall be 6 allowed as a credit against the HMOs subsequent prepayment 7 or tax liabilities. The HMO may receive a credit or a cash 8 refund in lieu of a credit against subsequent prepayment or 9 tax liabilities. The commissioner of insurance may suspend or 10 revoke the license of an HMO that fails to make a prepayment on 11 or before the due date. 12 The bill creates in new Code section 249A.13 a Medicaid 13 managed care organization premiums fund in the state treasury 14 under the authority of HHS. Moneys collected from the new 15 tax on premiums shall be deposited in the fund. Moneys in 16 the fund are appropriated to HHS for the purposes of the 17 medical assistance program. Moneys in the fund that remain 18 unencumbered or unobligated at the close of a fiscal year shall 19 not revert but shall remain available for expenditure for the 20 purposes designated. Interest or earnings on moneys in the 21 fund shall be credited to the fund. 22 DIVISION III NURSING FACILITY LICENSING AND FINANCING. 23 The bill creates a moratorium on new construction or permanent 24 change in bed capacity for nursing facilities. The bill 25 provides that beginning July 1, 2023, the department of 26 inspections, appeals, and licensing (DIAL), in consultation 27 with HHS, may impose a temporary moratorium on submission of 28 applications for new construction of a nursing facility or a 29 permanent change in the bed capacity of a nursing facility 30 that increases the bed capacity of the nursing facility for an 31 initial period of 12 months. The department of inspections, 32 appeals, and licensing may extend the moratorium in six-month 33 increments but for no longer than a total of 36 months, and 34 must document in writing the need for each extension of the 35 -32- LSB 1182SZ (3) 90 pf/rh 32/ 34
S.F. 567 moratorium. The department of inspections, appeals, and 1 licensing, in consultation with HHS, may waive the moratorium 2 if DIAL determines there is a need for specialized needs beds 3 or if a waiver request has been made in the manner specified by 4 DIAL. 5 The bill also requires an applicant for a nursing facility 6 license to provide information related to the applicants 7 financial suitability to operate a nursing facility as verified 8 by the applicant; whether the applicant has voluntarily 9 surrendered a license while under investigation in another 10 licensing jurisdiction; whether another licensing jurisdiction 11 has taken disciplinary action against the applicant relating 12 to the applicants operation of a nursing facility and whether 13 another nursing facility owned or operated by the applicant 14 has been subject to operation by a court-appointed receiver 15 or temporary manager; and whether there are any complaints, 16 allegations, or investigations against the applicant pending 17 in another jurisdiction. The information and documents 18 provided by the applicant detailing the applicants financial 19 condition or the terms of the applicants contractual business 20 relationships are confidential and not considered a public 21 record under Code chapter 22. If an applicant does not have at 22 least five years of experience operating a nursing facility in 23 this state or under an equivalent licensing or certification 24 provision in any other state, the applicant shall establish 25 an escrow account with an amount sufficient to support full 26 service operation of the nursing facility for a two-month 27 period. The Medicaid program is entitled to the funds held 28 in escrow if the nursing facility is subject to operation 29 under a receivership. Failure of a nursing facility licensee 30 or applicant to establish financial suitability to operate 31 a nursing facility including failure to establish an escrow 32 account is grounds for DIAL to deny, suspend, or revoke a 33 nursing facility license. 34 The bill also provides with regard to the nursing facility 35 -33- LSB 1182SZ (3) 90 pf/rh 33/ 34
S.F. 567 quality assurance assessment imposed under Code chapter 249L 1 (nursing facility quality assurance assessment program) that a 2 nursing facility shall not knowingly pass the quality assurance 3 assessment on to non-Medicaid payors, including as a rate 4 increase or service charge. If a nursing facility violates 5 this provision, HHS shall not reimburse the nursing facility 6 the quality assurance assessment due the nursing facility 7 under the Medicaid program, but shall instead only reimburse 8 the nursing facility the nursing facility base reimbursement 9 rate under the Medicaid program for one year from the date the 10 violation is discovered. 11 -34- LSB 1182SZ (3) 90 pf/rh 34/ 34