Fiscal Note
Fiscal Services Division
HF 2706 – Repair of Rehabilitation Technology, Medicaid (LSB6374HV)
Staff Contact: Eric Richardson (515.281.6767) eric.richardson@legis.iowa.gov
Fiscal Note Version – New
Description
House File 2706 provides that under both the managed care and fee-for-service administration
of Medicaid, the Department of Health and Human Services (HHS) cannot require a prescription
or face-to-face visit for reimbursement of a provider for the repair of complex rehabilitation
technology, if the complex rehabilitation technology, as defined in the Bill, was previously
prescribed and reimbursed under Medicaid.
Background
The Bill defines complex rehabilitation technology to mean items classified under the Medicare
program as durable medical equipment (DME) that is individually configured for individuals to
meet their specific and unique medical, physical, and functional needs and capacities for basic
activities of daily living and instrumental activities of daily living and instrumental activities of
daily living identified as medically necessary. Medicare covers medically necessary DME if a
doctor or other provider prescribes it for use in a home. The DME that Medicare covers
includes but is not limited to blood sugar test strips, continuous passive motion machines,
continuous positive airway pressure (CPAP) machines, crutches, home infusion services,
hospital beds, infusion pumps, oxygen equipment, patient lifts, walkers, wheelchairs, and
scooters. However, not all of these would be covered under the Bill, because they would not all
be classified as complex rehabilitation technology that is individually configured, per the
definition in the Bill.
Assumptions
• According to the HHS, 1,701 previously denied pieces of technology could be reimbursed
because of the Bill, at an average cost per unit of $47.45.
• According to the HHS, there would not be fewer appointments realized from the Bill due to
existing rules not mandating an appointment.
• For State FY 2025, the State share for provider reimbursement is approximately 36.5%,
which is a blended Federal Medical Assistance Percentage (FMAP) rate consisting of 25.0%
of the FFY 2024 FMAP rate and 75.0% of the FFY 2025 FMAP rate. In FY 2025, provider
reimbursement is expected to cost $81,000 total, with the State paying $29,000 and the
federal government paying $52,000.
• For State FY 2026, the State share for provider reimbursement is approximately 36.8%, or
the State share of FY 2025 Medicaid costs via the FMAP rate. In FY 2026, provider
reimbursement is expected to cost $81,000 total, with the State paying $30,000 and the
federal government paying $51,000.
• According to the HHS, a Medicaid Management Information System (MMIS) contract
amendment to properly identify claims and pay at enhanced rates is necessary to administer
the Bill, costing $62,000 in FY 2025 (600 programming hours at $103 per hour), with the
State paying 25.0% and the federal government paying 75.0%.
• An increase in the General Fund appropriation to the HHS for Medicaid will be necessary to
pay for costs in the Bill.
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Fiscal Impact
House File 2706 is estimated to increase costs to the State by approximately $44,000 in
FY 2025 and $30,000 annually beginning in FY 2026.
Figure 1 — Total Costs of Reimbursement —
Repair of Complex Rehabilitation Technology
FY 2025 FY 2026
Medicaid Costs
Total State Total State
Provider Reimbursement $ 81,000 $ 29,000 $ 81,000 $ 30,000
MMIS Core Contract 62,000 15,000 0 0
Total Costs $ 143,000 $ 44,000 $ 81,000 $ 30,000
Sources
Iowa Department of Health and Human Services
Centers for Medicare and Medicaid Services
Legislative Services Agency analysis
/s/ Jennifer Acton
April 19, 2024
Doc ID 1449537
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in developing this
fiscal note is available from the Fiscal Services Division of the Legislative Services Agency upon request.
www.legis.iowa.gov
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