Relating to insurance coverage for biomarker testing

Description

House File 2668 relates to insurance coverage for biomarker testing and does the following:

• Requires a policy, contract, or plan providing third-party payment or prepayment of medical expenses to provide coverage for biomarker testing for select purposes when the biomarker testing has demonstrated clinical utility.
• Provides requirements for demonstrating clinical utility in biomarker testing.
• Provides additional coverage requirements for biomarker testing covered by the Bill.
• Provides applicability standards to policies, contracts, or plans delivered, issued for delivery, continued, or renewed in the State on or after January 1, 2025.
• Requires the Department of Health and Human Services (HHS) to report before November 1, 2025, the number and resulting cost of biomarker tests provided during FY 2025 to individuals as a result of the Bill that are covered by the medical assistance program under Iowa Code chapter 249A and the Healthy and Well Kids in Iowa (Hawki) program under Iowa Code chapter 514I.

Background

The Bill defines “biomarker testing” as an analysis of an individual’s tissue, blood, or other biospecimen for the presence of a biomarker. The Bill defines “biomarker” as a characteristic that is objectively measured and evaluated as an indicator of normal biological processes, pathogenic processes, or pharmacologic responses to a specific therapeutic intervention. Federal fiscal year (FFY) 2025 Federal Medical Assistance Percentage (FMAP) rates are based on per capita personal incomes for calendar years 2020 through 2022. Iowa’s FFY 2025 FMAP rate decreased by 0.88% to 63.25%, meaning that beginning October 1, 2024, for every dollar spent on the Medicaid program, the federal government will pay $0.6325 and Iowa will pay $0.3675.

Assumptions

• For State FY 2025, the State share for provider reimbursement is approximately 36.53%, which is a blended FMAP rate consisting of 25.0% of the FFY 2024 FMAP rate and 75.0% of the FFY 2025 FMAP rate. In FY 2025, the enhanced rate to providers is expected to cost $302,000 total, with the State paying $86,000 and the federal government paying $216,000.
• For State FY 2026, the State share for provider reimbursement is approximately 36.75%, or the State share of FY 2025 Medicaid costs via the FMAP rate. Beginning in FY 2026 and continuing annually, the enhanced rate is expected to cost $603,000 total, with the State paying $171,000 and the federal government paying $432,000.
• An increase in the General Fund appropriation to the HHS for Medicaid will be necessary to pay for the costs in the Bill.
• According to the HHS, potential contracting updates that may be required could be absorbed by the HHS.
• According to the HHS, increased access to biomarker testing may generate savings in the long term as a result of earlier intervention. Data to estimate potential cost savings is not currently available to estimate the amount; therefore, potential cost savings as a result of the Bill are not included.
• According to the Milliman Cost Study, it is estimated that expanding biomarker testing coverage may increase Medicaid premiums between $0.05 and $0.09 per member, per month. For this Fiscal Note, it is assumed premiums will increase $0.08 per member, per month.

Fiscal Impact

House File 2668 is estimated to increase costs to the State by approximately $86,000 in FY 2025 and $171,000 annually beginning in FY 2026. Data to estimate potential cost savings is not currently available; therefore, potential cost savings as a result of the Bill are not included. Figure 1 — Annual Fiscal Impact Summary of HF 2668

Sources

• Department of Health and Human Services
• Milliman Cost Study (February 2022)
• Legislative Services Agency analysis