Bill Text: IA HF2291 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to Medicaid managed care oversight and improvement.
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced - Dead) 2018-02-08 - Introduced, referred to Human Resources. H.J. 235. [HF2291 Detail]
Download: Iowa-2017-HF2291-Introduced.html
House File 2291 - Introduced HOUSE FILE BY HEATON A BILL FOR 1 An Act relating to Medicaid managed care oversight and 2 improvement. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 6073YH (3) 87 pf/rh PAG LIN 1 1 Section 1. MEDICAID MANAGED CARE OVERSIGHT AND 1 2 IMPROVEMENT. The department of human services shall adopt 1 3 rules pursuant to chapter 17A and shall amend all Medicaid 1 4 managed care contracts to provide for all of the following: 1 5 1. TIMELY PAYMENT AND CORRECTION OF CLAIMS PROCESSING 1 6 ERRORS. 1 7 a. A managed care organization shall provide documentation 1 8 to a Medicaid provider claimant when the managed care 1 9 organization contests or denies a claim, in whole or in part, 1 10 within fifteen calendar days after receipt of the claim. The 1 11 documentation shall, with as much specificity as possible, 1 12 identify the claim or portion of the claim affected, and shall 1 13 provide an explanation including the reasons for contesting 1 14 or denying the claim utilizing the federal Health Insurance 1 15 Portability and Accountability Act standard claim adjustment 1 16 reason codes and remittance advice remark codes, or other 1 17 standard adjustment reasons and remark codes approved by rule 1 18 of the department. A managed care organization shall utilize 1 19 the standard coding and format of responses, established 1 20 uniformly across all managed care organizations, as required by 1 21 rule of the department. 1 22 b. When a Medicaid provider, a managed care organization, or 1 23 another affected entity identifies a systemic programming or 1 24 processing error in a managed care organization's programming 1 25 or processing system that results in systemic incorrect 1 26 results, including those related to Medicaid provider payment 1 27 or authorizations, the managed care organization shall correct 1 28 the programming or processing error within thirty calendar days 1 29 of the discovery of the error and shall reprocess any affected 1 30 payments or authorizations with sixty calendar days of the 1 31 discovery of such error. 1 32 c. A managed care organization that fails to pay, deny, or 1 33 settle a clean claim in full within the time frame established 1 34 by the managed care contract shall pay the Medicaid provider 1 35 claimant interest equal to twelve percent per annum on the 2 1 total amount of the claim ultimately authorized. 2 2 d. For claims ultimately found to be incorrectly denied 2 3 or underpaid through an appeals process or audit, a managed 2 4 care organization shall pay a Medicaid provider claimant, in 2 5 addition to the amount determined to be owed, interest of 2 6 twenty percent per annum on the total amount of the claim as 2 7 calculated from fifteen calendar days after the date the claim 2 8 was submitted. 2 9 e. If a managed care organization disputes a portion of a 2 10 claim, any undisputed portion of the claim is deemed a clean 2 11 claim and shall be paid within the time frame for the payment 2 12 of clean claims established by the managed care contract such 2 13 that ninety percent of clean claims are paid or denied within 2 14 fourteen calendar days of receipt, ninety=nine and one=half 2 15 percent of clean claims are paid or denied within twenty=one 2 16 calendar days of receipt, and one hundred percent of clean 2 17 claims are paid or denied within ninety calendar days of 2 18 receipt. 2 19 2. SUPPLEMENTAL PAYMENTS AND RATE CHANGES. 2 20 a. A managed care organization shall pay interest of twelve 2 21 percent per annum on any physician supplemental payment or 2 22 graduated medical education payment paid after the fifteenth 2 23 day of the month in which the payment is due. 2 24 b. Retroactive rate decreases such as rebasing delays, 2 25 update delays, cost containment, or other payment changes and 2 26 delays shall not be retroactively applicable to a date that 2 27 is more than three months from the date of the final rate 2 28 decision. 2 29 3. APPEALS, EXTERNAL REVIEW, AND AUDIT PROCESSES. 2 30 a. (1) The department shall establish an appeals and 2 31 external review process for Medicaid members and Medicaid 2 32 providers for review of adverse determinations issued by a 2 33 managed care organization. 2 34 (2) The process shall require that an internal appeal to a 2 35 managed care organization of an adverse determination resulting 3 1 from a first=level review be completed and a notice of the 3 2 decision issued by a managed care organization within fifteen 3 3 calendar days of a request by a Medicaid member or Medicaid 3 4 provider for an internal appeal or within three calendar days 3 5 if the appeal is considered expedited based on urgent medical 3 6 need. 3 7 (3) If an internal appeal results in a final adverse 3 8 determination, the Medicaid member or Medicaid provider may 3 9 either appeal the decision as a contested case pursuant to 3 10 chapter 17A, or may request an external review. 3 11 (4) The department shall establish an external review and 3 12 an expedited external review process, consistent with chapter 3 13 514J, to the extent applicable. The process shall allow a 3 14 Medicaid member or a Medicaid provider to submit a request for 3 15 external review or expedited external review to the department 3 16 following receipt of notice of a final adverse determination 3 17 from a managed care organization. If an external review or 3 18 expedited external review is approved by the department, the 3 19 review shall be completed and a decision shall be issued by 3 20 the independent review organization within forty=five calendar 3 21 days of receipt of the request for external review and within 3 22 seventy=two hours of receipt of the request for an expedited 3 23 external review. The process shall provide that the decision 3 24 of the independent review organization is subject to judicial 3 25 review. 3 26 (5) The department shall enter into a contract with 3 27 an independent review organization that does not have a 3 28 conflict of interest with the department or any managed care 3 29 organization to conduct the external reviews. 3 30 b. A managed care organization shall allow a Medicaid 3 31 provider to consolidate complaints or appeals of multiple 3 32 claims that involve the same or a similar payment or coverage 3 33 issue, regardless of the number of individual Medicaid members 3 34 or payment claims affected, in a request for an internal 3 35 managed care organization review or appeal. 4 1 c. The department shall enter into a contract with an 4 2 independent auditor for the purpose of reviewing, at least 4 3 once each calendar year, a random sample of all claims paid 4 4 and denied by a managed care organization. Each managed care 4 5 organization and each managed care organization's subcontractor 4 6 shall pay any claim that the independent auditor determines to 4 7 be incorrectly denied, any applicable liquidated damages, and 4 8 any costs attributable to the annual audit. The independent 4 9 auditor shall also review payment patterns to determine any 4 10 unfair payment patterns and shall review any request for such 4 11 investigation based on submission of evidence by a Medicaid 4 12 provider of an unfair payment practice in accordance with 4 13 standards developed by the department. 4 14 d. If a claim submitted to a managed care organization is 4 15 not deemed a clean claim and remains in dispute for longer than 4 16 six months from the date initially submitted, the claim shall 4 17 automatically be subject to the appeals and external review 4 18 process established by the department. 4 19 4. LOGISTICS AND DOCUMENTATION. 4 20 a. A managed care organization shall provide and maintain 4 21 an internet site available to all Medicaid providers under 4 22 contract with the managed care organization to request 4 23 reconsiderations, submit Medicaid provider inquiries, 4 24 and submit, process, edit, rebill, and adjudicate claims 4 25 electronically. 4 26 b. The department shall develop and require all managed care 4 27 organizations to utilize, a standardized enrollment form and a 4 28 uniform process for credentialing and recredentialing Medicaid 4 29 providers. 4 30 c. Upon request by a Medicaid provider, the department 4 31 shall provide accurate and uniform patient encounter data to a 4 32 Medicaid provider under contract with a specified managed care 4 33 organization within sixty calendar days of the request. The 4 34 provision of the patient encounter data shall comply with the 4 35 federal Health Insurance Portability and Accountability Act 5 1 and any other applicable federal and state laws and regulatory 5 2 requirements and shall include but not be limited to the 5 3 managed care organization's claim number, the Medicaid member 5 4 identification number, the Medicaid member's name, the type of 5 5 claim, the amount billed by revenue code and procedure code, 5 6 the managed care organization's paid amount and payment date, 5 7 and the hospital patient account number, as applicable. The 5 8 department may charge a reasonable fee for the actual cost of 5 9 providing the patient encounter data to Medicaid providers. 5 10 5. PRIOR AUTHORIZATION. 5 11 a. Prior authorization shall not be required by a managed 5 12 care organization for admission of a Medicaid member to an 5 13 intensive care unit level of care. 5 14 b. Medicaid providers shall be provided two business days 5 15 following a Medicaid member's inpatient hospital admission 5 16 to submit information to a managed care organization for 5 17 authorization of the admission. If authorization is denied, a 5 18 Medicaid provider shall be provided two business days from the 5 19 date of denial to request reconsideration of the authorization. 5 20 Following a reconsideration, if the authorization is denied, 5 21 the reconsideration shall be subject to peer=to=peer review. 5 22 c. The department shall establish a fee schedule, 5 23 proportionate to the lost productivity of staff and resources 5 24 experienced by a Medicaid provider, that results from the 5 25 completion of the prior authorization process. 5 26 EXPLANATION 5 27 The inclusion of this explanation does not constitute agreement with 5 28 the explanation's substance by the members of the general assembly. 5 29 This bill relates to Medicaid managed care oversight and 5 30 improvement. 5 31 The bill requires the department of human services (DHS) to 5 32 adopt administrative rules and amend all Medicaid managed care 5 33 contracts to address timely payment and correction of claims 5 34 processing errors; supplemental payments and rate changes; 5 35 appeals external review and audit processes; logistics and 6 1 documentation; and prior authorization under Medicaid managed 6 2 care. 6 3 TIMELY PAYMENT AND CORRECTION OF CLAIMS PROCESSING ERRORS. 6 4 The bill requires a Medicaid managed care organization (MCO) 6 5 to provide specific documentation to a Medicaid provider 6 6 claimant when the MCO contests or denies a claim. The bill 6 7 requires that if a systemic programming or processing error in 6 8 an MCO's programming or processing system is identified that 6 9 results in systemic incorrect results, the MCO shall correct 6 10 the programming or processing error within 30 calendar days 6 11 and reprocess any affected payments or authorizations within 6 12 60 calendar days of the discovery of such error. The bill 6 13 requires the payment of interest on claims that are not paid 6 14 within certain time frames or that, following appeal or audit, 6 15 are found to be incorrectly denied or underpaid. The bill 6 16 provides that any portion of a claim which is not disputed is 6 17 deemed a clean claim and is required to be paid by an MCO within 6 18 the time frame for the payment of clean claims established by 6 19 an MCO contract such that 90 percent of clean claims are paid 6 20 or denied within 14 calendar days of receipt, 99.5 percent 6 21 within 21 calendar days of receipt, and 100 percent within 90 6 22 calendar days of receipt. 6 23 SUPPLEMENTAL PAYMENTS AND RATE CHANGES. The bill requires 6 24 MCOs to pay interest on any physician supplemental payment 6 25 or graduated medical education payment paid after the 15th 6 26 day of the month in which the payment is due, and provides 6 27 that retroactive rate decreases shall not be retroactively 6 28 applicable to a date that is more than three months from the 6 29 date of the final rate decision. 6 30 APPEALS, EXTERNAL REVIEW, AND AUDIT PROCESSES. The bill 6 31 requires DHS to establish an appeals and external review 6 32 process for Medicaid members and Medicaid providers for review 6 33 of adverse determinations issued by an MCO, and provides time 6 34 frames for the processes. DHS is required to enter into a 6 35 contract with an independent review organization that does not 7 1 have a conflict of interest with DHS or any MCO to conduct the 7 2 external reviews. The bill requires an MCO to allow a Medicaid 7 3 provider to consolidate complaints or appeals of multiple 7 4 claims that involve the same or a similar payment or coverage 7 5 issue, regardless of the number of individual Medicaid members 7 6 or payment claims affected in a request for internal review 7 7 or appeal. The bill requires DHS to enter into a contract 7 8 with an independent auditor for the purpose of reviewing, at 7 9 least once each calendar year, a random sample of all claims 7 10 paid and denied. Each MCO and the subcontractors of any MCO 7 11 are required to pay any claim that the independent auditor 7 12 determines to be incorrectly denied, any applicable liquidated 7 13 damages, and the cost of the annual audits conducted. The 7 14 independent auditor is also required to review payment patterns 7 15 to determine any unfair payment patterns and to review any 7 16 request for such investigation based on submission of evidence 7 17 by a Medicaid provider of an unfair payment practice in 7 18 accordance with standards developed by DHS. The bill provides 7 19 that if a claim submitted to an MCO is not deemed a clean claim 7 20 and remains in dispute for longer than six months from the date 7 21 initially submitted, the claim shall automatically be subject 7 22 to the appeals and external review process established by DHS. 7 23 LOGISTICS AND DOCUMENTATION. An MCO is required to 7 24 provide and maintain an internet site available to all 7 25 Medicaid providers under contract with that MCO to request 7 26 reconsiderations, submit provider inquiries, and submit, 7 27 process, edit, rebill, and adjudicate claims electronically. 7 28 The bill requires DHS to develop and require all MCOs to 7 29 utilize a standardized enrollment form and a uniform process 7 30 for credentialing and recredentialing Medicaid providers. 7 31 The bill provides that upon request of a Medicaid provider, 7 32 DHS shall provide accurate and uniform patient encounter 7 33 data to the Medicaid provider within 60 calendar days of the 7 34 request. DHS may charge a reasonable fee for the actual cost 7 35 of providing the patient encounter data to providers. 8 1 PRIOR AUTHORIZATION. The bill provides that prior 8 2 authorization shall not be required by an MCO for admission 8 3 of a Medicaid member to an intensive care unit level of 8 4 care. Additionally, Medicaid providers are allowed to request 8 5 authorization for an inpatient hospital admission within 8 6 certain time frames following the admission of a Medicaid 8 7 member and are provided a process for review of denials of 8 8 authorization relative to such admissions. DHS is required 8 9 to establish a fee schedule, proportionate to the lost 8 10 productivity of staff and resources experienced by a Medicaid 8 11 provider, that results from the completion of the prior 8 12 authorization process. LSB 6073YH (3) 87 pf/rh
