Bill Text: IA SF567 | 2023-2024 | 90th General Assembly | Introduced

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Bill Title: A bill for an act relating to health care services and financing including nursing facility licensing and financing and the Medicaid program including third-party recovery and taxation of Medicaid managed care organization premiums, and providing for licensee discipline.(Formerly SF 462, SSB 1167.)

Spectrum: Committee Bill

Status: (Introduced - Dead) 2023-04-26 - Withdrawn. S.J. 979. [SF567 Detail]

Download: Iowa-2023-SF567-Introduced.html

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