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First Substitute H.B. 459
7 LONG TITLE
8 General Description:
9 This bill amends provisions related to transparency and health benefits in the Insurance
10 Code and the Medicaid program.
11 Highlighted Provisions:
12 This bill:
13 . requires accountability and transparency from the state Medicaid program;
14 . requires an insurer to provide information to consumers regarding health insurance
15 policies; and
16 . requires greater choice of benefit plans for employers in the defined contribution
17 market of the health insurance exchange.
18 Monies Appropriated in this Bill:
20 Other Special Clauses:
21 This bill provides an effective date.
22 This bill coordinates with H.B. 294, Health System Reform Amendments, by
23 substantively superseding a provision.
24 This bill coordinates with H.B. 39, Insurance Related Amendments, by providing
25 substantive changes.
26 Utah Code Sections Affected:
28 26-18-2.3, as last amended by Laws of Utah 2006, Chapter 46
29 26-18-3, as last amended by Laws of Utah 2008, Chapters 62 and 382
30 31A-22-613.5, as last amended by Laws of Utah 2009, Chapter 12
31 31A-22-722.5, as enacted by Laws of Utah 2009, Chapter 274
32 31A-30-205, as enacted by Laws of Utah 2009, Chapter 12
33 Utah Code Sections Affected by Coordination Clause:
34 31A-22-722.5, as enacted by Laws of Utah 2009, Chapter 274
36 Be it enacted by the Legislature of the state of Utah:
37 Section 1. Section 26-18-2.3 is amended to read:
38 26-18-2.3. Division responsibilities -- Emphasis -- Periodic assessment.
39 (1) In accordance with the requirements of Title XIX of the Social Security Act and
40 applicable federal regulations, the division is responsible for the effective and impartial
41 administration of this chapter in an efficient, economical manner. The division shall:
42 (a) establish, on a statewide basis, a program to safeguard against unnecessary or
43 inappropriate use of Medicaid services, excessive payments, and unnecessary or inappropriate
44 hospital admissions or lengths of stay;
45 (b) deny any provider claim for services that fail to meet criteria established by the
46 division concerning medical necessity or appropriateness; and
47 (c) place its emphasis on high quality care to recipients in the most economical and
48 cost-effective manner possible, with regard to both publicly and privately provided services.
49 (2) The division shall implement and utilize cost-containment methods, where
50 possible, which may include[
51 (a) prepayment and postpayment review systems to determine if utilization is
52 reasonable and necessary;
53 (b) preadmission certification of nonemergency admissions;
54 (c) mandatory outpatient, rather than inpatient, surgery in appropriate cases;
55 (d) second surgical opinions;
56 (e) procedures for encouraging the use of outpatient services;
57 (f) consistent with Sections 26-18-2.4 and 58-17b-606 , a Medicaid drug program;
58 (g) coordination of benefits; and
59 (h) review and exclusion of providers who are not cost effective or who have abused
60 the Medicaid program, in accordance with the procedures and provisions of federal law and
62 (3) The director of the division shall periodically assess the cost effectiveness and
63 health implications of the existing Medicaid program, and consider alternative approaches to
64 the provision of covered health and medical services through the Medicaid program, in order to
65 reduce unnecessary or unreasonable utilization.
66 (4) The department shall ensure Medicaid program integrity by conducting internal
67 audits of the Medicaid program for efficiencies, best practices, fraud, waste, abuse, and cost
68 recovery, at least in proportion to the percent of funding for the program that comes from state
70 (5) The department shall, by December 31 of each year, report to the Health and
71 Human Services Appropriations Subcommittee regarding:
72 (a) measures taken under this section to increase:
73 (i) efficiencies within the program; and
74 (ii) cost avoidance and cost recovery efforts in the program; and
75 (b) results of program integrity efforts under Subsection (4).
76 Section 2. Section 26-18-3 is amended to read:
77 26-18-3. Administration of Medicaid program by department -- Reporting to the
78 Legislature -- Disciplinary measures and sanctions -- Funds collected -- Eligibility
80 (1) The department shall be the single state agency responsible for the administration
81 of the Medicaid program in connection with the United States Department of Health and
82 Human Services pursuant to Title XIX of the Social Security Act.
83 (2) (a) The department shall implement the Medicaid program through administrative
84 rules in conformity with this chapter, Title 63G, Chapter 3, Utah Administrative Rulemaking
85 Act, the requirements of Title XIX, and applicable federal regulations.
86 (b) The rules adopted under Subsection (2)(a) shall include, in addition to other rules
87 necessary to implement the program:
88 (i) the standards used by the department for determining eligibility for Medicaid
90 (ii) the services and benefits to be covered by the Medicaid program; and
91 (iii) reimbursement methodologies for providers under the Medicaid program.
92 (3) (a) The department shall, in accordance with Subsection (3)(b), report to either the
93 Legislative Executive Appropriations Committee or the Legislative Health and Human
94 Services Appropriations Subcommittee when the department:
95 (i) implements a change in the Medicaid State Plan;
96 (ii) initiates a new Medicaid waiver;
97 (iii) initiates an amendment to an existing Medicaid waiver; [
98 (iv) applies for an extension of an application for a waiver or an existing Medicaid
99 waiver; or
101 (b) The report required by Subsection (3)(a) shall:
102 (i) be submitted to the Legislature's Executive Appropriations Committee or the
103 legislative Health and Human Services Appropriations Subcommittee prior to the department
104 implementing the proposed change; and
105 (ii) [
106 (A) a description of the department's current practice or policy that the department is
107 proposing to change;
108 (B) an explanation of why the department is proposing the change;
109 (C) the proposed change in services or reimbursement, including a description of the
110 effect of the change;
111 (D) the effect of an increase or decrease in services or benefits on individuals and
113 (E) the degree to which any proposed cut may result in cost-shifting to more expensive
114 services in health or human service programs; and
115 (F) the fiscal impact of the proposed change, including:
116 (I) the effect of the proposed change on current or future appropriations from the
117 Legislature to the department;
118 (II) the effect the proposed change may have on federal matching dollars received by
119 the state Medicaid program;
120 (III) any cost shifting or cost savings within the department's budget that may result
121 from the proposed change; and
122 (IV) identification of the funds that will be used for the proposed change, including any
123 transfer of funds within the department's budget.
124 (4) Any rules adopted by the department under Subsection (2) are subject to review and
125 reauthorization by the Legislature in accordance with Section 63G-3-502 .
126 (5) The department may, in its discretion, contract with the Department of Human
127 Services or other qualified agencies for services in connection with the administration of the
128 Medicaid program, including:
129 (a) the determination of the eligibility of individuals for the program;
130 (b) recovery of overpayments; and
131 (c) consistent with Section 26-20-13 , and to the extent permitted by law and quality
132 control services, enforcement of fraud and abuse laws.
133 (6) The department shall provide, by rule, disciplinary measures and sanctions for
134 Medicaid providers who fail to comply with the rules and procedures of the program, provided
135 that sanctions imposed administratively may not extend beyond:
136 (a) termination from the program;
137 (b) recovery of claim reimbursements incorrectly paid; and
138 (c) those specified in Section 1919 of Title XIX of the federal Social Security Act.
139 (7) Funds collected as a result of a sanction imposed under Section 1919 of Title XIX
140 of the federal Social Security Act shall be deposited in the General Fund as nonlapsing
141 dedicated credits to be used by the division in accordance with the requirements of Section
142 1919 of Title XIX of the federal Social Security Act.
143 (8) (a) In determining whether an applicant or recipient is eligible for a service or
144 benefit under this part or Chapter 40, Utah Children's Health Insurance Act, the department
145 shall, if Subsection (8)(b) is satisfied, exclude from consideration one passenger vehicle
146 designated by the applicant or recipient.
147 (b) Before Subsection (8)(a) may be applied:
148 (i) the federal government must:
149 (A) determine that Subsection (8)(a) may be implemented within the state's existing
150 public assistance-related waivers as of January 1, 1999;
151 (B) extend a waiver to the state permitting the implementation of Subsection (8)(a); or
152 (C) determine that the state's waivers that permit dual eligibility determinations for
153 cash assistance and Medicaid are no longer valid; and
154 (ii) the department must determine that Subsection (8)(a) can be implemented within
155 existing funding.
156 (9) (a) For purposes of this Subsection (9):
157 (i) "aged, blind, or disabled" shall be defined by administrative rule; and
158 (ii) "spend down" means an amount of income in excess of the allowable income
159 standard that must be paid in cash to the department or incurred through the medical services
160 not paid by Medicaid.
161 (b) In determining whether an applicant or recipient who is aged, blind, or disabled is
162 eligible for a service or benefit under this chapter, the department shall use 100% of the federal
163 poverty level as:
164 (i) the allowable income standard for eligibility for services or benefits; and
165 (ii) the allowable income standard for eligibility as a result of spend down.
166 Section 3. Section 31A-22-613.5 is amended to read:
167 31A-22-613.5. Price and value comparisons of health insurance -- Basic Health
168 Care Plan.
169 (1) (a) [
171 (b) Subsection (2) applies to:
172 (i) all [
173 benefit plans; and
174 (ii) coverage offered to state employees under Subsection 49-20-202 (1)(a).
175 (2) (a) The commissioner shall promote informed consumer behavior and responsible
178 (i) provide to all enrollees, prior to enrollment in the health benefit plan [
181 (I) the use of a formulary [
182 (II) co-payments and deductibles for prescription drugs; and
183 (III) requirements for generic substitution;
187 limitation or exclusion from coverage; and
189 exclusion of coverage for a secondary medical condition[
190 (ii) provide the commissioner with:
191 (A) the information described in Subsections 63M-1-2506 (3) through (6) in the
192 standardized electronic format required by Subsection 63M-1-2506 (1); and
193 (B) information regarding insurer transparency in accordance with Subsection (5).
194 (b) [
196 required by [
197 (i) upon commencement of operations in the state; and
198 (ii) anytime the insurer amends any of the following described in Subsection (2)(a)(i):
199 (A) treatment policies;
200 (B) practice standards;
201 (C) restrictions;
202 (D) coverage limits of the insurer's health benefit plan or health insurance policy; or
203 (E) limitations or exclusions of coverage including a limitation or exclusion for a
204 secondary medical condition related to a limitation or exclusion of the insurer's health
205 insurance plan.
212 (c) An insurer shall provide the enrollee with notice of an increase in costs for
213 prescription drug coverage due to a change in benefit design under Subsection (2)(a)(i)(A):
214 (i) either:
215 (A) in writing; or
216 (B) on the insurer's website; and
217 (ii) at least 30 days prior to the date of the implementation of the increase in cost, or as
218 soon as reasonably possible.
219 (d) If under Subsection (2)(a)(i)(A) a formulary is used, the insurer shall make
220 available to prospective enrollees and maintain evidence of the fact of the disclosure of:
221 (i) the drugs included;
222 (ii) the patented drugs not included;
223 (iii) any conditions that exist as a precedent to coverage; and
224 (iv) any exclusion from coverage for secondary medical conditions that may result
225 from the use of an excluded drug.
226 (e) (i) The department shall develop examples of limitations or exclusions of a
227 secondary medical condition that an insurer may use under Subsection (2)(a)[
228 (ii) Examples of a limitation or exclusion of coverage provided under Subsection
230 fact situation to fall within the description of an example does not, by itself, support a finding
231 of coverage.
232 (3) An insurer who offers a health [
233 Small Employer, and Group Health Insurance Act, shall[
237 Chapter 30, Individual, Small Employer, and Group Health Insurance Act, that:
240 qualifies under a federally qualified high deductible health plan, as adjusted by federal law; and
242 amount of the annual deductible.
295 (a) shall forward the information submitted by an insurer under Subsection (2)(a)(ii) to
296 the Health Insurance Exchange created under Section 63M-1-2504 ; and
297 (b) may request information from an insurer to verify the information submitted by the
298 insurer [
299 (5) The commissioner shall:
300 (a) convene a group of insurers, a member representing the Public Employees' Benefit
301 and Insurance Program, consumers, and an organization described in Subsection
302 31A-22-614.6 (3)(b), to develop information for consumers to compare health insurers and
303 health benefit plans on the Health Insurance Exchange, which shall include consideration of:
304 (i) the number and cost of an insurer's denied health claims;
305 (ii) the cost of denied claims that is transferred to providers;
306 (iii) the average out-of-pocket expenses incurred by participants in each health benefit
307 plan that is offered by an insurer in the Health Insurance Exchange;
308 (iv) the relative efficiency and quality of claims administration and other administrative
309 processes for each insurer offering plans in the Health Insurance Exchange; and
310 (v) consumer assessment of each insurer or health benefit plan;
311 (b) adopt an administrative rule that establishes:
312 (i) definition of terms;
313 (ii) the methodology for determining and comparing the insurer transparency
315 (iii) the data, and format of the data, that an insurer must submit to the department in
316 order to facilitate the consumer comparison on the Health Insurance Exchange in accordance
317 with Section 63M-1-2506 ; and
318 (iv) the dates on which the insurer must submit the data to the department in order for
319 the department to transmit the data to the Health Insurance Exchange in accordance with
320 Section 63M-1-2506 ; and
321 (c) implement the rules adopted under Subsection (5)(b) in a manner that protects the
322 business confidentiality of the insurer.
323 Section 4. Section 31A-22-722.5 is amended to read:
324 31A-22-722.5. Mini-COBRA election -- American Recovery and Reinvestment
326 (1) [
328 participate in a [
329 31A-22-722 in accordance with Section 3001 of the American Recovery and Reinvestment Act
330 of 2009 (Pub. S. 111-5) [
332 (i) was involuntarily terminated from employment [
334 American Recovery and Reinvestment Act of 2009 (Pub. S. 111-5), as amended;
336 American Recovery and Reinvestment Act of 2009 (Pub. S. 111-5), as amended; [
338 time of termination[
339 (iv) elected Utah mini-Cobra; and
340 (v) voluntarily dropped coverage, which includes dropping coverage through
341 non-payment of premiums, between December 1, 2009 and February 1, 2010.
342 (2) (a) An individual or the employer of the individual shall contact the insurer and
343 inform the insurer that the individual wants to [
344 coverage and pay retroactive premiums under a transition period for mini-COBRA coverage
346 Reinvestment Act of 2009 (Pub. S. 111-5), as amended.
347 (b) An individual or an employer on behalf of an eligible individual must submit the
349 insurer [
350 American Recovery and Reinvestment Act of 2009 (Pub. S. 11-5), as amended..
351 (3) [
355 employee's coverage under mini-cobra with the current employer's group policy beyond the 12
356 months to the period of time the insured is eligible to receive assistance in accordance with
357 Section 3001 of the American Recovery and Reinvestment Act of 2009 (Pub. S. 111-5) as
359 (4) An insurer that violates this section is subject to penalties in accordance with
360 Section 31A-2-308 .
361 Section 5. Section 31A-30-205 is amended to read:
362 31A-30-205. Health benefit plans offered in the defined contribution market.
363 (1) An insurer who [
364 contribution [
365 benefit plans as defined contribution arrangements:
372 (a) the basic benefit plan;
373 (b) one health benefit plan with [
374 15% greater [
375 benefit plan;
376 (c) on or before January 1, 2011, one health benefit plan that is a federally qualified
377 high deductible health plan that has an individual deductible of $2,500 and a deductible of
378 $5,000 for coverage including two or more individuals, and does not exceed an annual
379 out-of-pocket maximum equal to three times the amount of the annual deductible;
380 (d) on or before January 1, 2011, one health benefit plan that is a federally qualified
381 high deductible health plan that has the highest deductible that qualifies as a federally qualified
382 high deductible health plan as adjusted by federal law, and does not exceed an annual
383 out-of-pocket maximum equal to three times the amount of the annual deductible; and
384 (e) the insurer's five most commonly selected health benefit plans that:
385 (i) include:
386 (A) the provider panel;
387 (B) the deductible;
388 (C) co-payments;
389 (D) co-insurance; and
390 (E) pharmacy benefits; and
391 (ii) are currently being marketed by the carrier to new groups for enrollment.
392 (2) (a) The provisions of Subsection (1) do not limit the number of defined
393 contribution arrangement health benefit plans an insurer may offer in the defined contribution
394 arrangement market.
395 (b) An insurer who offers the health benefit plans required by Subsection (1) may also
396 offer any other health benefit plan [
397 (i) the health benefit plan provides benefits that are [
398 actuarial value than the benefits required in [
399 (ii) the health benefit plan provides benefits with an aggregate actuarial value that is no
400 lower than the actuarial value of the plan required in Subsection (1)(c).
401 Section 6. Coordinating H.B. 459 with H.B. 294 -- Superseding amendments.
402 If this H.B. 459 and H.B. 294, Health System Reform Amendments, both pass, it is the
403 intent of the Legislature that the amendments to Sections 31A-22-613.5 and 31A-30-205 in this
404 bill supersede the amendments to Sections 31A-22-613.5 and 31A-30-205 in H.B. 294, when
405 the Office of Legislative Research and General Counsel prepares the Utah Code database for
407 Section 7. Effective date.
408 If approved by two-thirds of all the members elected to each house, Section
409 31A-22-722.5 takes effect upon approval by the governor, or the day following the
410 constitutional time limit of Utah Constitution Article VII, Section 8, without the governor's
411 signature, or in the case of a veto, the date of veto override.
412 Section 8. Coordinating H.B. 459 with H.B. 39 -- Substantive changes.
413 If this H.B. 459 and H.B. 39, Insurance Related Amendments, both pass, it is the intent
414 of the Legislature that the amendments to Section 31A-22-722.5 in this bill supersede the
415 amendments to Section 31A-22-722.5 in H.B. 39, and has retrospective operation to the date
416 the governor signed H.B. 39, when the Office of Legislative Research and General Counsel
417 prepares the Utah Code database for publication.
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