Relating to reimbursement for dually eligible Medicare and Medicaid beneficiaries receiving the Medicare hospice benefit in a nursing facility

The bill requires DHS to report receipt of such approval to the chairpersons and ranking members of the appropriations committees of the house and senate, the co-chairpersons and ranking members of the joint appropriations subcommittee on health and human services, and the legislative services agency. The bill requires DHS to adopt administrative rules to administer the bill and specifically to allow Medicaid MCOs and the department’s FFS Medicaid payment system to reimburse a nursing facility directly for the room and board expenses at 95 percent of the base rate as provided in the bill. Currently, the Medicare hospice benefit covers the costs of palliative care for an individual who is terminally ill in the individual’s home or in a nursing facility. Medicare does not have a long-term custodial nursing facility benefit, so if an individual elects the Medicare hospice benefit in a nursing facility, the individual’s room and board are not covered by Medicare and the individual or a third-party payor must pay for the costs of the room and board. For those individuals dually eligible for Medicare and Medicaid who elect the Medicare hospice benefit, Medicare is financially responsible for the hospice care and the Medicaid program is the third-party payor responsible for the nursing facility room and board expense. For the nursing facility room and board care, the Medicaid program must provide for payment in an amount equal to at least 95 percent of the Medicaid daily nursing facility base rate (the rate the state Medicaid program pays for nursing facility services furnished to an individual who has not elected to receive hospice care). Historically, the Medicaid program has paid the hospice provider for the nursing facility room and board expenses of dually eligible individuals who elect the hospice benefit, and the hospice provider has then passed this payment on to the nursing facility under a contract with the nursing facility. Current practice is for most hospice providers to pay 100 percent of the nursing facility base rate to the nursing facility. Pursuant to 2018 Iowa Acts, chapter 1038, DHS was directed to review the hospice benefit for dually eligible individuals in a nursing facility and report options for elimination of the pass-through payments to the chairperson and ranking members of the joint appropriations subcommittee on health and human services, the legislative service agency, and the legislative caucus staffs on or before October 1, 2018. DHS submitted the report that included four options. The bill reflects option 1 of the report which is budget neutral and would require DHS to request federal approval to allow Medicaid managed care organizations and the Medicaid fee-for-service payment system to pay the nursing facility directly for the nursing facility room and board costs, and eliminate the pass-through payment utilizing the hospice provider.