Bill Summary – FastDemocracy

Senate File 462 - Introduced
                                  SENATE FILE 462
                                  BY COMMITTEE ON HEALTH AND
                                      HUMAN SERVICES
                                  (SUCCESSOR TO SSB 1167)
                            A BILL FOR
An Act relating to the Medicaid program including third-party
  recovery and taxation of Medicaid managed care organization
  premiums.
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 Medicaid payor 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 and
 the recipient’s agent 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 knows that the recipient is
 represented by an attorney, the Medicaid payor sh