Text of ID H 328 (2025)

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature First Regular Session - 2025 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 328 BY HEALTH AND WELFARE COMMITTEE AN ACT 1 RELATING TO LEGISLATIVE APPROVAL FOR MEDICAID STATE PLAN AMENDMENTS AND 2 WAIVERS; REPEALING SECTION 56-270, IDAHO CODE, AS ENACTED BY SECTION 3 1, CHAPTER 288, LAWS OF 2024, RELATING TO LEGISLATIVE APPROVAL OF 4 WAIVERS AND STATE PLAN AMENDMENTS; AMENDING TITLE 56, IDAHO CODE, BY 5 THE ADDITION OF A NEW CHAPTER 22, TITLE 56, IDAHO CODE, TO PROVIDE THAT 6 LEGISLATIVE APPROVAL IS REQUIRED FOR CERTAIN STATE PLAN AMENDMENTS AND 7 WAIVERS, TO PROVIDE LEGISLATIVE APPROVAL FOR A STATE PLAN AMENDMENT 8 REGARDING RURAL EMERGENCY HOSPITAL DESIGNATION, TO PROVIDE LEGISLATIVE 9 APPROVAL FOR A STATE PLAN AMENDMENT REGARDING MEDICAID COST-SHARING, 10 TO PROVIDE LEGISLATIVE APPROVAL FOR STATE PLAN AMENDMENTS AND WAIVERS 11 REGARDING COMPREHENSIVE MEDICAID MANAGED CARE, TO PROVIDE LEGISLA- 12 TIVE APPROVAL FOR STATE PLAN AMENDMENTS AND WAIVERS REGARDING MEDICAID 13 EXPANSION LIMITS, TO PROVIDE LEGISLATIVE APPROVAL FOR A STATE PLAN 14 AMENDMENT REGARDING PRACTICE AUTHORITY PROTECTION, AND TO PROVIDE LEG- 15 ISLATIVE APPROVAL FOR A STATE PLAN AMENDMENT REGARDING SITE NEUTRAL 16 PAYMENTS; REPEALING SECTION 56-253, IDAHO CODE, RELATING TO POWERS AND 17 DUTIES OF THE DIRECTOR; AMENDING SECTION 56-263, IDAHO CODE, TO REMOVE 18 OBSOLETE LANGUAGE AND TO PROVIDE THAT THE DEPARTMENT OF HEALTH AND WEL- 19 FARE SHALL DISCONTINUE CERTAIN CONTRACTING AND REIMBURSEMENT; AMENDING 20 SECTION 56-265, IDAHO CODE, TO PROVIDE THAT FEDERALLY QUALIFIED HEALTH 21 CENTERS SHALL BE EXEMPT FROM FINANCIAL RISK IN CERTAIN PAYMENT ARRANGE- 22 MENTS; AMENDING SECTION 56-267, IDAHO CODE, TO REVISE PROVISIONS RE- 23 GARDING ELIGIBILITY EXPANSION; PROVIDING THAT CERTAIN ADMINISTRATIVE 24 RULES CONTAINED IN IDAPA 16.03.17 SHALL BE NULL, VOID, AND OF NO FORCE 25 AND EFFECT; PROVIDING THAT CERTAIN ADMINISTRATIVE RULES CONTAINED IN 26 IDAPA 16.03.18 SHALL BE NULL, VOID, AND OF NO FORCE AND EFFECT; PROVID- 27 ING THAT CERTAIN ADMINISTRATIVE RULES CONTAINED IN IDAPA 16.03.09 SHALL 28 BE NULL, VOID, AND OF NO FORCE AND EFFECT; AND DECLARING AN EMERGENCY. 29 Be It Enacted by the Legislature of the State of Idaho: 30 SECTION 1. That Section 56-270, Idaho Code, as enacted by Section 1, 31 Chapter 288, Laws of 2024, be, and the same is hereby repealed. 32 SECTION 2. That Title 56, Idaho Code, be, and the same is hereby amended 33 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap- 34 ter 22, Title 56, Idaho Code, and to read as follows: 35 CHAPTER 22 36 LEGISLATIVE APPROVAL FOR MEDICAID STATE PLAN AMENDMENTS AND WAIVERS 37 56-2201. LEGISLATIVE APPROVAL REQUIRED. Notwithstanding any provi- 38 sion of law to the contrary, the state department of health and welfare shall 39 not seek or implement a medicaid state plan amendment or a waiver pursuant to 40 section 1115 or 1915 of the social security act that would expand coverage 41 2 to any additional individuals or class of individuals or would increase any 1 net cost to the state without first obtaining approval from the legislature. 2 Such approval must be provided in statute and, to be effective, must be 3 listed in this chapter. The provisions of this section shall not affect any 4 state plan amendment or waiver program previously authorized by statute or 5 already implemented as of July 1, 2025. The provisions of this section shall 6 not apply to any medicaid state plan amendment or waiver program that does 7 not expand coverage to any individuals or class of individuals and does not 8 increase any net cost to the state. 9 56-2202. LEGISLATIVE APPROVAL -- RURAL EMERGENCY HOSPITAL DESIGNA- 10 TION AND REIMBURSEMENT. The department of health and welfare is authorized 11 to and shall submit a state plan amendment to the centers for medicare and 12 medicaid services allowing the recognition and reimbursement of medicaid 13 services provided by a rural emergency hospital. For the purposes of this 14 section, "rural emergency hospital" has the same meaning as provided in 42 15 U.S.C. 1395x(kkk)(2). 16 56-2203. LEGISLATIVE APPROVAL -- MEDICAID COST-SHARING. (1) The de- 17 partment of health and welfare is authorized to and shall submit a state plan 18 amendment to the centers for medicare and medicaid services to include par- 19 ticipant cost-sharing as a condition of participation in a medical assis- 20 tance program, to the extent allowed under federal law, that is at least to 21 the levels developed by other states and up to the maximum charged by other 22 states. 23 (2) The department of health and welfare shall: 24 (a) Take such actions as are necessary to implement the provisions of 25 this section; 26 (b) Begin the application process for federal approval of the state 27 plan amendment required by this section no later than July 1, 2026; and 28 (c) Continue any existing cost-sharing under the medicaid state plan in 29 effect at the time of the passage of this act until supplanted by the new 30 state plan amendment required by this section. 31 56-2204. LEGISLATIVE APPROVAL -- COMPREHENSIVE MEDICAID MANAGED 32 CARE. (1) The department of health and welfare is authorized to and shall 33 submit to the centers for medicare and medicaid services all state plan and 34 waiver authorities required to implement a plan for comprehensive medicaid 35 managed care. 36 (2) The department of health and welfare shall: 37 (a) Take such actions as are necessary to implement the provisions of 38 this section; 39 (b) Submit the application for federal approval of the state plan 40 amendments and waivers required by this section no later than July 1, 41 2026; 42 (c) Continue any existing managed care under the medicaid state plan 43 and its waivers in effect at the time of the passage of this act until 44 supplanted by the new comprehensive managed care plan required under 45 this section; and 46 3 (d) Undertake cost containment strategies, such as bidding multi-year 1 contracts with predetermined inflationary adjustments or withholding 2 a percentage of capitation if managed care organizations do not meet 3 these cost containment targets. 4 56-2205. LEGISLATIVE APPROVAL -- MEDICAID EXPANSION LIMITS. (1) The 5 department of health and welfare is authorized to and shall submit to the 6 centers for medicare and medicaid services the following state plan amend- 7 ments and waivers no later than July 1, 2026: 8 (a) Work-requirements for able-bodied adults enrolled in medicaid in 9 which no individual shall be eligible to participate in the medicaid 10 program pursuant to section 56-267, Idaho Code, unless the individual 11 is: 12 (i) Working twenty (20) hours or more per week, averaged monthly; 13 (ii) Participating in and complying with the requirements of a 14 work program twenty (20) hours or more per week, as determined by 15 the department; 16 (iii) Volunteering twenty (20) hours or more per week, as deter- 17 mined by the department; 18 (iv) Meeting any combination of working and participating in a 19 work program for a total of twenty (20) hours or more per week, as 20 determined by the department; or 21 (v) Participating and complying with the requirements of a work- 22 fare program, unless the individual is: 23 1. Younger than nineteen (19) years of age; 24 2. Older than sixty-four (64) years of age; 25 3. Medically classified as physically or mentally unfit for 26 employment; 27 4. Pregnant; 28 5. A parent or caretaker responsible for the care of a depen- 29 dent child younger than six (6) years of age; 30 6. A parent or caretaker personally providing the care for 31 a dependent child with a serious medical condition or with a 32 disability, as determined by the department; 33 7. Receiving unemployment compensation and complying with 34 the work requirements as part of the federal-state unemploy- 35 ment compensation system; or 36 8. Participating in a drug addiction or alcohol treatment 37 and rehabilitation program. 38 (b) Allow persons eligible for medicaid under section 56-267, Idaho 39 Code, who have a modified adjusted gross income at least at or above one 40 hundred percent (100%) of the federal poverty level to receive the ad- 41 vance premium tax credit to purchase a qualified health plan through the 42 Idaho health insurance exchange established by chapter 61, title 41, 43 Idaho Code, instead of enrolling in medicaid, except that the person may 44 choose to enroll in medicaid instead of receiving the advance premium 45 tax credit to purchase a qualified health plan. 46 (c) Implement the following changes to eligibility determination: 47 (i) Suspend requirements to renew eligibility automatically 48 based on available information and pre-populated forms; 49 4 (ii) Implement biannual redetermination for persons eligible for 1 medicaid under section 56-267, Idaho Code; and 2 (iii) Limit hospital presumptive eligibility determinations to 3 children and pregnant women. 4 (d) Implement the following changes to benefits: 5 (i) No funds shall be used to fulfill any contract or commercial 6 transaction with any health care provider or health care facil- 7 ity under the terms of which such health care provider or health 8 care facility agrees to provide services prohibited under section 9 18-1505C, Idaho Code; and 10 (ii) No funds shall be used to fulfill any gender reassignment 11 procedures, including treatment and surgery for any resident 12 eighteen (18) years of age or older. 13 (2) An individual is exempt from the provisions of any state plan amend- 14 ment or waiver pursuant to this section if the individual is an American In- 15 dian or Alaska native who is eligible for services through the Indian health 16 service or through a tribal program pursuant to the Indian self-determina- 17 tion and education assistance act or the Indian health care improvement act. 18 56-2206. LEGISLATIVE APPROVAL -- PRACTICE AUTHORITY PROTECTION. The 19 department of health and welfare is authorized to and shall submit a state 20 plan amendment to the centers for medicare and medicaid services by July 1, 21 2025, allowing for practice authority protection to the extent permitted by 22 state law. 23 56-2207. LEGISLATIVE APPROVAL -- SITE-NEUTRAL PAYMENTS. The depart- 24 ment of health and welfare is authorized to seek and shall submit a state 25 plan amendment by July 1, 2026, that sets reimbursement rates for hospital 26 outpatient departments and hospital-acquired physician practices at the 27 same rate as physician-owned medical practices for all equivalent outpa- 28 tient health services where the service is not dependent on the hospital 29 facility's associated technologies and in the absence of any evidence-based 30 rationale. The department may consider exceptions for critical access hos- 31 pitals and rural emergency hospitals. 32 SECTION 3. That Section 56-253, Idaho Code, be, and the same is hereby 33 repealed. 34 SECTION 4. That Section 56-263, Idaho Code, be, and the same is hereby 35 amended to read as follows: 36 56-263. MEDICAID MANAGED CARE PLAN. (1) The department shall present 37 to the legislature on the first day of the second session of the sixty-first 38 Idaho legislature a plan for medicaid managed care with focus on high-cost 39 populations, including but not limited to: 40 (a) Dual eligibles; and 41 (b) High-risk pregnancies. 42 (2) The medicaid managed care plan shall include but not be limited to 43 the following elements: 44 (a) Improved coordination of care through primary care medical homes. 45 5 (b) Approaches that improve coordination and provide case management 1 for high-risk, high-cost disabled adults and children that reduce costs 2 and improve health outcomes, including mandatory enrollment in special 3 needs plans, and that consider other managed care approaches. 4 (c) Managed care contracts to pay for behavioral health benefits as 5 described in executive order no. 2011-01 and in any implementing leg- 6 islation. At a minimum, the system should include independent, stan- 7 dardized, statewide assessment and evidence-based benefits provided by 8 businesses that meet national accreditation standards. 9 (d) The elimination of duplicative practices that result in unneces- 10 sary utilization and costs. 11 (e) Contracts based on gain-sharing, risk-sharing or a capitated ba- 12 sis. 13 (f) Medical home development with focus on populations with chronic 14 disease using a tiered case management fee. 15 (3) The department shall seek federal approval or a waiver to require 16 that a medicaid participant who has a medical home as required in section 17 56-255(5)(b), Idaho Code, and who seeks family planning services or supplies 18 from a provider outside the participant's medical home, must have a referral 19 to such outside provider. The provisions of this subsection shall apply to 20 medicaid participants upon such approval or the granting of such a waiver. 21 (4) (1) The department shall seek approval as soon as practicable but no 22 later than July 1, 2027, from the centers for medicare and medicaid services 23 for directed payments to qualifying hospitals entities participating in the 24 Idaho behavioral health plan or any comprehensive managed care plan in ac- 25 cordance with 42 CFR 438., with comparable state fund offsets as set forth in 26 section 56-1404, Idaho Code. 27 (5) (2) Subject to written approval by the centers for medicare and med- 28 icaid services, the department shall make directed payments to qualifying 29 hospitals participating in medicaid managed care programs in an amount not 30 to exceed the maximum allowable payment authorized by federal regulations. 31 (6) Qualifying hospitals assessed pursuant to this section are exempt 32 from assessment pursuant to section 56-1404, Idaho Code. 33 (3) The department shall discontinue contracting and reimbursing as 34 part of the healthy connections value care program through value care orga- 35 nizations and the healthy connections primary care case management program 36 by January 1, 2026. 37 SECTION 5. That Section 56-265, Idaho Code, be, and the same is hereby 38 amended to read as follows: 39 56-265. PROVIDER PAYMENT. (1) Where there is an equivalent, the pay- 40 ment to medicaid providers: 41 (a) May be up to but shall not exceed one hundred percent (100%) of the 42 current medicare rate for primary care procedure codes as defined by the 43 centers for medicare and medicaid services; and 44 (b) Shall be ninety percent (90%) of the current medicare rate for all 45 other procedure codes. 46 (2) Where there is no medicare equivalent, the payment rate to medicaid 47 providers shall be prescribed by rule. 48 6 (3) Notwithstanding any other provision of this chapter, if the 1 services are provided by a private, freestanding mental health hospital 2 facility that is an institution for mental disease as defined in 42 U.S.C. 3 1396d(i), the department shall reimburse for inpatient services at a rate 4 not to exceed ninety-one percent (91%) of the current medicare rate within 5 federally allowed reimbursement under the medicaid program. The reimburse- 6 ment provided for in this subsection shall be effective until July 1, 2021. 7 (4) The department shall, through the annual budget process, include 8 a line-item request for adjustments to provider rates. All changes to 9 provider payment rates shall be subject to approval of the legislature by 10 appropriation. 11 (5) Notwithstanding any other provision of this chapter, the depart- 12 ment may enter into agreements with providers to pay for services based on 13 their value in terms of measurable health care quality and positive impacts 14 to participant health. 15 (a) Any such agreement shall be designed to be cost-neutral or cost- 16 saving compared to other payment methodologies. 17 (b) The department is authorized to pursue waiver agreements with the 18 federal government as needed to support value-based payment arrange- 19 ments, up to and including fully capitated provider-based managed care. 20 (c) Beginning with the 2024 performance period and for all future per- 21 formance periods thereafter, federally qualified health centers and 22 any organization owned and controlled by a federally qualified health 23 center shall be exempt from any financial risk in value-based payment 24 agreements created pursuant to this section. 25 (6) Medicaid reimbursement for critical access, out-of-state, and 26 state-owned hospitals shall be as follows: 27 (a) In-state, critical access hospitals as designated according to 42 28 U.S.C. 1395i-4(c)(2)(B) shall be reimbursed at one hundred one percent 29 (101%) of cost; 30 (b) Out-of-state hospitals shall be reimbursed at eighty-seven percent 31 (87%) of cost; 32 (c) State-owned hospitals shall be reimbursed at one hundred percent 33 (100%) of cost; and 34 (d) Out-of-state hospital institutions for mental disease as defined 35 in 42 U.S.C. 1396d(i) shall be reimbursed at a per diem equivalent to 36 ninety-five percent (95%) of cost. 37 (7) The department shall equitably reduce net reimbursements for all 38 hospital services, including in-state institutions for mental disease but 39 excluding all hospitals and institutions described in subsection (6) of 40 this section, by amounts targeted to reduce general fund needs for hospital 41 payments by three million one hundred thousand dollars ($3,100,000) in state 42 fiscal year 2020 and eight million seven hundred twenty thousand dollars 43 ($8,720,000) in state fiscal year 2021. 44 (8) The department shall work with all Idaho hospitals, including in- 45 stitutions for mental disease as defined in 42 U.S.C. 1396d(i), to establish 46 value-based payment methods for inpatient and outpatient hospital services 47 to replace existing cost-based reimbursement methods for in-state hospi- 48 tals, other than those hospitals and institutions described in subsection 49 7 (6) of this section, effective July 1, 2021. Budgets for hospital payments 1 shall be subject to prospective legislative approval. 2 (9) The department shall work with Idaho hospitals to establish a 3 quality payment program for inpatient and outpatient adjustment payments 4 described in section 56-1406, Idaho Code. Inpatient and outpatient adjust- 5 ment payments shall be subject to increase or reduction based on hospital 6 service quality measures established by the department in consultation with 7 Idaho hospitals. 8 SECTION 6. That Section 56-267, Idaho Code, be, and the same is hereby 9 amended to read as follows: 10 56-267. MEDICAID ELIGIBILITY EXPANSION. (1) Notwithstanding any pro- 11 vision of law or federal waiver to the contrary, the state shall amend its 12 state plan to expand medicaid eligibility to include those persons under 13 sixty-five (65) years of age whose modified adjusted gross income is one hun- 14 dred thirty-three percent (133%) of the federal poverty level or below and 15 who are not otherwise eligible for any other coverage under the state plan, 16 in accordance with sections 1902(a)(10)(A)(i)(VIII) and 1902(e)(14) of the 17 social security act. 18 (2) No later than ninety (90) days after approval of this act, the 19 department shall submit any necessary state plan amendments to the United 20 States department of health and human services, centers for medicare and 21 medicaid services to implement the provisions of this section. The depart- 22 ment is required and authorized to take all actions necessary to implement 23 the provisions of this section as soon as practicable. 24 (3) Eligibility for medicaid as described in this section shall not be 25 delayed if the centers for medicare and medicaid services fail to approve any 26 waivers of the state plan for which the department applies, nor shall such 27 eligibility be delayed while the department is considering or negotiating 28 any waivers to the state plan. The department shall not implement any waiver 29 that would result in a reduction in federal financial participation for per- 30 sons identified in subsection (1) of this section below the ninety percent 31 (90%) commitment described in section 1905(y) of the social security act. 32 (4) If section 1905(y) of the social security act is held unlawful or 33 unconstitutional by the United States supreme court, then the legislature 34 shall declare this section to be null, void, and of no force and effect. 35 (5) If federal financial participation for persons identified in sub- 36 section (1) of this section is reduced below the ninety percent (90%) commit- 37 ment described in section 1905(y) of the social security act, then the senate 38 and house of representatives health and welfare committees shall, as soon 39 as practicable, review the effects of such reduction and make a recommenda- 40 tion to the legislature as to whether medicaid eligibility expansion should 41 remain in effect. The review and recommendation described in this subsec- 42 tion shall be conducted by the date of adjournment of the regular legisla- 43 tive session following the date of reduction in federal financial partici- 44 pation. Notwithstanding any other provision of law to the contrary, if the 45 reduction in federal financial participation occurs outside of a state leg- 46 islative session, the department shall take any action necessary to offset 47 the increase in state funding, including but not limited to reductions in 48 provider payment rates or elimination of optional benefits. Such actions 49 8 shall be taken until such time as the state legislature may convene and de- 1 termine a proper course of action. 2 (6) The department: 3 (a) Shall place all persons participating in medicaid pursuant to 4 this section in a care management program authorized under section 5 56-265(5), Idaho Code, or in another managed care program to improve the 6 quality of their care, to the extent possible; and 7 (b) Is authorized to seek any federal approval necessary to implement 8 the provisions of this subsection. 9 (7) No later than January 31 in the 2023 legislative session, the sen- 10 ate and house of representatives health and welfare committees shall review 11 all fiscal, health, and other impacts of medicaid eligibility expansion pur- 12 suant to this section and shall make a recommendation to the legislature as 13 to whether such expansion should remain in effect. 14 SECTION 7. The rules contained in IDAPA 16.03.17, Department of Health 15 and Welfare, relating to Medicare/Medicaid Coordinated Plan Benefits, shall 16 be null, void, and of no force and effect on and after July 1, 2025. 17 SECTION 8. The rules contained in IDAPA 16.03.18, Department of Health 18 and Welfare, relating to Medicaid Cost-Sharing, shall be null, void, and of 19 no force and effect on and after July 1, 2025. 20 SECTION 9. The rules contained in IDAPA 16.03.09, Department of Health 21 and Welfare, relating to Medicaid Basic Plan Benefits, Section 560.; Section 22 561.; Section 562.; Section 563.; Section 564.; Section 565.; and Section 23 566., shall be null, void, and of no force and effect on and after January 1, 24 2026. 25 SECTION 10. An emergency existing therefor, which emergency is hereby 26 declared to exist, this act shall be in full force and effect on and after its 27 passage and approval. 28