Bill Summary – FastDemocracy

LEGISLATIVE GENERAL COUNSEL                                          H.B. 463
Approved for Filing: G. Gunn 6                              rd
                                                                   3 Sub. (Cherry)
          6 02-22-24 3:11 PM 6
                    Representative Brady Brammer proposes the following substitute bill:
                           MEDICAID FUNDING AMENDMENTS
                                       2024 GENERAL SESSION
                                            STATE OF UTAH
                                 Chief Sponsor: Brady Brammer
                                  Senate Sponsor: ____________
 6
 LONG TITLE
 General Description:
         This bill amends provisions related to the Medicaid program and Medicaid expansion.
 Highlighted Provisions:
         This bill:
         < defines "Medicaid shortfall";
         < establishes conditions under which a Medicaid shortfall occurs;
         < requires appropriations for expenditures to pay for the state's cost of the Medicaid
 program, and of Medicaid expansion, be appropriated from the Medicaid Restricted
 Account and the Medicaid Expansion Fund, respectively; and
         < establishes a protocol of cost control measures to implement relative to the
 Medicaid program and Medicaid expansion, respectively, in the event of a Medicaid
 shortfall.
 Money Appropriated in this Bill:                                                                 3 rdSub. H.B. 463
         None
 Other Special Clauses:
         This bill provides a special effective date.
         This bill provides a coordination clause.
 Utah Code Sections Affected:
     *HB0463S03*
       3rd Sub. (Cherry) H.B. 463                                                  02-22-24 3:11 PM
 AMENDS:
        26B-1-309, as renumbered and amended by Laws of Utah 2023, Chapter 305
        26B-3-113, as renumbered and amended by Laws of Utah 2023, Chapter 306
        63I-1-226 (Superseded 07/01/24), as last amended by Laws of Utah 2023, Chapters
 249, 269, 270, 275, 332, 335, 420, and 495 and repealed and reenacted by Laws of
 Utah 2023, Chapter 329
        63I-1-226 (Effective 07/01/24), as last amended by Laws of Utah 2023, Chapters 249,
 269, 270, 275, 310, 332, 335, 420, and 495 and repealed and reenacted by Laws of
 Utah 2023, Chapter 329 and last amended by Coordination Clause, Laws of Utah
 2023, Chapters 329, 332
        63J-1-315, as last amended by Laws of Utah 2023, Chapter 329
 Utah Code Sections Affected By Coordination Clause:
        26B-1-309, as renumbered and amended by Laws of Utah 2023, Chapter 305
        63I-1-226, as last amended by Laws of Utah 2023, Chapters 249, 269, 270, 275, 310,
 332, 335, 420, 495, repealed and reenacted by Laws of Utah 2023, Chapter 329, and
 last amended by Coordination Clause, Laws of Utah 2023, Chapters 329 and 332
        63J-1-315, as last amended by Laws of Utah 2023, Chapter 329
43
 Be it enacted by the Legislature of the state of Utah:
 The following section is affected by a coordination clause at the end of this bill.
        Section 1. Section 26B-1-309 is amended to read:
        26B-1-309. Medicaid Restricted Account.
        (1) As used in this section:
        (a) "Medicaid expansion" means the same as that term is defined in Section 26B-3-113.
        (b) "Medicaid program" means the same as that term is defined in Section 26B-3-101.
        (c) "Medicaid shortfall" means a condition in which the ongoing financial stability of
 the Medicaid program or Medicaid expansion is uncertain, as evidenced by:
        (i) (A) the state's cumulative federal medical assistance percentage decreasing by more
 than two percentage points within a one-year period, or by four percentage points or more
 within a three-year period;
        (B) the Executive Appropriations Committee finding that their most recently adopted
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 revenue estimates are insufficient to pay the ongoing appropriations for the Medicaid program
 and Medicaid expansion for any fiscal year;
        (C) the Office of the Legislative Fiscal Analyst projecting that state expenditures for
 services offered under the Medicaid program or Medicaid expansion exceed the funds that have
 been appropriated to fund those services; or
        (D) an operating deficit, as defined in Section 63J-1-211; and
        (ii) if the condition is not removed within 45 days after the day on which the condition
 occurred by:
        (A) for a condition evidenced under Subsection (1)(c)(i)(A), the Executive
 Appropriations Committee determining that the decrease in the state's federal medical
 assistance percentage was due to the expiration or termination of a planned temporary increase
 to the federal medical assistance percentage;
        (B) for a condition evidenced under Subsection (1)(c)(i)(B), the Executive
 Appropriations Committee adopting revised revenue estimates that are sufficient to pay the
 ongoing appropriations to the Medicaid program, or to Medicaid expansion, for any fiscal year;
 and
        (C) for a condition evidenced under Subsection (1)(c)(i)(C) or (D), the Legislature
 appropriating sufficient funds to pay the services and benefits offered under the Medicaid
 program; and
        (d) "Operating deficit" means the same as that term is defined in Section 63J-1-211.
        (2) There is created a restricted account in the General Fund known as the "Medicaid
 Restricted Account."
        [(2)] (3) (a) Except as provided in Subsection [(3)] (4), the following shall be deposited
 into the Medicaid Restricted Account:
        (i) any general funds appropriated to the department for the state plan for medical
 assistance or for the Division of Health Care Financing that are not expended by the
 department in the fiscal year for which the general funds were appropriated and which are not
 otherwise designated as nonlapsing shall lapse into the Medicaid Restricted Account;
        (ii) any unused state funds that are associated with the Medicaid program, as defined in
 Section 26B-3-101, from the Department of Workforce Services; and
        (iii) any penalties imposed and collected under:
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        3rd Sub. (Cherry) H.B. 463                                                    02-22-24 3:11 PM
         (A) Section 17B-2a-818.5;
         (B) Section 19-1-206;
         (C) Section 63A-5b-607;
         (D) Section 63C-9-403;
         (E) Section 72-6-107.5; or
         (F) Section 79-2-404.
         (b) The account shall earn interest and all interest earned shall be deposited into the
 account.
         [(c) The Legislature may appropriate money in the restricted account to fund programs
 that expand medical assistance coverage and private health insurance plans to low income
 persons who have not traditionally been served by Medicaid, including the Utah Children's
 Health Insurance Program created in Section 26B-3-902.]
         (c) Beginning July 1, 2024, the Legislature may appropriate money to pay the state's
 portion of costs and services related to:
         (i) the Medicaid program only from the Medicaid Restricted Account; and
         (ii) Medicaid expansion only from the Medicaid Expansion Fund created under Section
 26B-1-315.
         [(3)] (4) (a) For fiscal years 2008-09, 2009-10, 2010-11, 2011-12, and 2012-13 the
 following funds are nonlapsing:
         (i) any general funds appropriated to the department for the state plan for medical
 assistance, or for the Division of Health Care Financing that are not expended by the
 department in the fiscal year in which the general funds were appropriated; and
         (ii) funds described in Subsection [(2)(a)(ii)] (3)(a)(i).
         (b) For fiscal years 2019-20, 2020-21, 2021-22, and 2022-23, the funds described in
 Subsections [(2)(a)(ii)] (3)(a)(ii) and [(3)(a)(i)] (4)(a)(i) are nonlapsing.
         (5) (a) Subject to Subsection (5)(b), beginning January 1, 2025, in the event of a
 Medicaid shortfall, within 150 days after the day on which the shortfall first occurs, each state
 division or agency expending state funds for the Medicaid program shall implement the
 following cost control measures relative to Medicaid program costs that are not subject to the
 cost control measures applicable to Medicaid expansion under Subsection 26B-3-113:
         (i) suspend hiring of noncritical employees;
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        (ii) suspend increasing employee wages, excluding employee benefits offered to
 employees state-wide;
        (iii) suspend increasing provider payment rates that would be paid for using general
 funds or income tax funds;
        (iv) suspend expanding reimbursement benefits, including drug reimbursements that
 are paid for using general funds or income tax funds;
        (v) cancel coverage for any optional services or populations covered under the
 Medicaid program that are paid for using general funds or income tax funds;
        (vi) cancel or reverse all provider payment rate increases approved or implemented
 during the one-year period immediately preceding the day on which the shortfall occurs, if the
 rate increase is paid for using general funds or income tax funds; and
        (vii) close enrollment to new members.
        (b) The departments and agencies shall implement the cost control measures under
 Subsection (5)(a):
        (i) one measure at a time and in the order listed under Subsection (5)(a), unless an
 exception is approved by the Executive Appropriations Committee;
        (ii) in consultation with the executive director of the Department of Health and Human
 Services and the executive director of the Office of the Legislative Fiscal Analyst;
        (iii) only to the extent necessary to eliminate the Medicaid shortfall; and
        (iv) subject to and only to the extent allowed under all federal laws and regulations
 governing the Medicaid program.
        (c) In the event of a Medicaid shortfall, the department shall prioritize state financial
 savings in implementing this Subsection (5).
        Section 2. Section 26B-3-113 is amended to read:
        26B-3-113. Expanding the Medicaid program.
        (1) As used in this section:
        (a) "Federal poverty level" means the same as that term is defined in Section
 26B-3-207.
        (b) "Medicaid expansion" means an expansion of the Medicaid program in accordance
 with this section.
        (c) "Medicaid Expansion Fund" means the Medicaid Expansion Fund created in
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        3rd Sub. (Cherry) H.B. 463                                                  02-22-24 3:11 PM
 Section 26B-1-315.
        (d) "Medicaid shortfall" means the same as that term is defined in Section 26B-1-309.
        (2) (a) As set forth in Subsections (2) through (5), eligibility criteria for the Medicaid
 program shall be expanded to cover additional low-income individuals.
        (b) The department shall continue to seek approval from CMS to implement the
 Medicaid waiver expansion as defined in Section 26B-1-112.
        (c) The department may implement any provision described in Subsections
 26B-3-112(2)(b)(iii) through (viii) in a Medicaid expansion if the department receives approval
 from CMS to implement that provision.
        (3) The department shall expand the Medicaid program in accordance with this
 Subsection (3) if the department:
        (a) receives approval from CMS to:
        (i) expand Medicaid coverage to eligible individuals whose income is below 95% of
 the federal poverty level;
        (ii) obtain maximum federal financial participation under 42 U.S.C. Sec. 1396d(b) for
 enrolling an individual in the Medicaid expansion under this Subsection (3); and
        (iii) permit the state to close enrollment in the Medicaid expansion under this
 Subsection (3) if the department has insufficient funds to provide services to new enrollment
 under the Medicaid expansion under this Subsection (3);
        (b) pays the state portion of costs for the Medicaid expansion under this Subsection (3)
 with funds from:
        (i) the Medicaid Expansion Fund;
        (ii) county contributions to the nonfederal share of Medicaid expenditures; or
        (iii) any other contributions, funds, or transfers from a nonstate agency for Medicaid
 expenditures; and
        (c) closes the Medicaid program to new enrollment under the Medicaid expansion
 under this Subsection (3) if the department projects that the cost of the Medicaid expansion
 under this Subsection (3) will exceed the appropriations for the fiscal year that are authorized
 by the Legislature through an appropriations act adopted in accordance with Title 63J, Chapter
 1, Budgetary Procedures Act.
        (4) (a) The department shall expand the Medicaid program in accordance with this
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 Subsection (4) if the department:
        (i) receives approval from CMS to:
        (A) expand Medicaid coverage to eligible individuals whose income is below 95% of
 the federal poverty level;
        (B) obtain maximum federal financial participation under 42 U.S.C. Sec. 1396d(y) for
 enrolling an individual in the Medicaid expansion under this Subsection (4); and
        (C) permit the state to close enrollment in the Medicaid expansion under this
 Subsection (4) if the department has insufficient funds to provide services to new enrollment
 under the Medicaid expansion under this Subsection (4);
        (ii) pays the state portion of costs for the Medicaid expansion under this Subsection (4)
 with funds from:
        (A) the Medicaid Expansion Fund;
        (B) county contributions to the nonfederal share of Medicaid expenditures; or
        (C) any other contributions, funds, or transfers from a nonstate agency for Medicaid
 expenditures; and
        (iii) closes the Medicaid program to new enrollment under the Medicaid expansion
 under this Subsection (4) if the department projects that the cost of the Medicaid expansion
 under this Subsection (4) will exceed the appropriations for the fiscal year that are authorized
 by the Legislature through an appropriations act adopted in accordance with Title 63J, Chapter
 1, Budgetary Procedures Act.
        (b) The department shall submit a waiver, an amendment to an existing waiver, or a
 state plan amendment to CMS to:
        (i) administer federal funds for the Medicaid expansion under this Subsection (4)
 according to a per capita cap developed by the department that includes an annual inflationary
 adjustment, accounts for differences in cost among categories of Medicaid expansion enrollees,
 and provides greater flexibility to the state than the current Medicaid payment model;
        (ii) limit, in certain circumstances as defined by the department, the ability of a
 qualified entity to determine presumptive eligibility for Medicaid coverage for an individual
 enrolled in a Medicaid expansion under this Subsection (4);
        (iii) impose a lock-out period if an individual enrolled in a Medicaid expansion under
 this Subsection (4) violates certain program requirements as defined by the department;
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         (iv) allow an individual enrolled in a Medicaid expansion under this Subsection (4) to
 remain in the Medicaid program for up to a 12-month certification period as defined by the
 department; and
         (v) allow federal Medicaid funds to be used for housing support for eligible enrollees
 in the Medicaid expansion under this Subsection (4).
         (5) (a) (i) If CMS does not approve a waiver to expand the Medicaid program in
 accordance with Subsection (4)(a) on or before January 1, 2020, the department shall develop
 proposals to implement additional flexibilities and cost controls, including cost sharing tools,
 within a Medicaid expansion under this Subsection (5) through a request to CMS for a waiver
 or state plan amendment.
         (ii) The request for a waiver or state plan amendment described in Subsection (5)(a)(i)
 shall include:
         (A) a path to self-sufficiency for qualified adults in the Medicaid expansion that
 includes employment and training as defined in 7 U.S.C. Sec. 2015(d)(4); and
         (B) a requirement that an individual who is offered a private health benefit plan by an
 employer to enroll in the employer's health plan.
         (iii) The department shall submit the request for a waiver or state plan amendment
 developed under Subsection (5)(a)(i) on or before March 15, 2020.
         (b) Notwithstanding Sections 26B-3-127 and 63J-5-204, and in accordance with this
 Subsection (5), eligibility for the Medicaid program shall be expanded to include all persons in
 the optional Medicaid expansion population under PPACA and the Health Care Education
 Reconciliation Act of