Adds to existing law to provide legislative approval for the Department of Health and Welfare to submit a state plan amendment regarding change in encounter rate due to change in scope of services.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE SENATE SENATE BILL NO. 1410 BY STATE AFFAIRS COMMITTEE AN ACT1 RELATING TO MEDICAID; AMENDING CHAPTER 22, TITLE 56, IDAHO CODE, BY THE AD-2 DITION OF A NEW SECTION 56-2208, IDAHO CODE, TO PROVIDE LEGISLATIVE AP-3 PROVAL FOR STATE PLAN AMENDMENTS REGARDING CHANGE IN ENCOUNTER RATE DUE4 TO CHANGE IN SCOPE OF SERVICES; PROVIDING THAT CERTAIN ADMINISTRATIVE5 RULES CONTAINED IN IDAPA 16.03.26 SHALL BE NULL, VOID, AND OF NO FORCE6 AND EFFECT AND PROVIDING APPLICABILITY; AND DECLARING AN EMERGENCY.7

Be It Enacted by the Legislature of the State of Idaho:8

SECTION 1. That Chapter 22, Title 56, Idaho Code, be, and the same is9 hereby amended by the addition thereto of a NEW SECTION, to be known and des-10 ignated as Section 56-2208, Idaho Code, and to read as follows:11 56-2208. LEGISLATIVE APPROVAL -- CHANGE IN ENCOUNTER RATE DUE TO12 CHANGE IN SCOPE OF SERVICES. (1) The department of health and welfare is au-13 thorized to and shall submit the state plan amendments required to carry out14 the provisions of this section no later than October 1, 2026.15 (2)(a) As required by 42 U.S.C. 1396a(bb)(3)(B), the department shall16 adjust the prospective payment system (PPS) encounter rates of feder-17 ally qualified health centers (FQHCs) and rural health clinics (RHCs)18 based on any change in scope of FQHC or RHC services, as defined by 4219 U.S.C. 1396d(a)(2)(B) and (C).20 (b) A change in scope of services is one that affects the type, in-21 tensity, duration, or number of services provided by a FQHC or RHC. A22 change in the scope of FQHC or RHC services may occur if the FQHC or RHC23 has added, dropped, or expanded any service that meets the definition24 of a FQHC or RHC service pursuant to 42 U.S.C. 1396d(a)(2)(B) and (C).25 A change in the cost of a service is not considered in and of itself a26 change in the scope of services.27 (c) To qualify for a rate adjustment, applications for a rate review28 must meet a minimum four and one-half percent (4.5%) cumulative/aggre-29 gate change in cost per medical or dental visit as measured by comparing30 the cost per encounter with change in scope of services to the then cur-31 rent PPS rate.32 (3) All reasonable efforts shall be made to submit written notifica-33 tion of a planned change in scope to the department sixty (60) days prior to34 implementation of a change in scope. Notification shall provide a detailed35 description of the planned change in scope. The department shall not impose36 penalties related to this section.37 (4) Applications for a rate adjustment shall be filed with the depart-38 ment once the change in scope of service has been fully implemented for a pe-39 riod of six (6) consecutive months. Full implementation means costs were in-40 curred and services were provided without interruption for a consecutive six41 (6) month period. Requests for the determination of a change in scope and a42

2 PPS rate review must be received by the last day of the third month follow-1 ing the end of the consecutive six (6) month period after the change in scope.2 FQHCs and RHCs may submit a maximum of one (1) application for a rate adjust-3 ment based on a change in scope of services per fiscal year. Applications for4 a rate adjustment shall include:5 (a) A written narrative describing the specific changes in scope of6 services and how these changes relate to a change in the FQHC's or RHC's7 overall scope of services;8 (b) A full cost report including all cost and encounter information for9 the first six (6) consecutive months of operations after the change in10 scope was implemented; and11 (c) Any additional supplemental data requested by the department that12 is reasonably necessary to support the department's evaluation of the13 application.14 (5)(a) The department shall review and accept, reject, or adjust a re-15 quest for a rate adjustment within ninety (90) days of receiving an ap-16 plication.17 (b) If further documentation or records are requested by the depart-18 ment after receiving a request for rate adjustment, the applicant shall19 have up to two (2) weeks to respond to the request. The period of days20 beginning with the request for further documentation or records by the21 department and ending with the response from the applicant shall not be22 counted toward the ninety (90) day requirement described in paragraph23 (a) of this subsection.24 (c) After reviewing and accepting, rejecting, or adjusting a request25 for rate adjustment, the department shall provide a draft calculation26 for the final rate to the applicant for a change in scope of services.27 The applicant shall have a review period of sixty (60) days to review and28 respond to such draft calculation.29 (d) The final rate calculation shall be issued within forty-five (45)30 days after the review period described in paragraph (c) of this subsec-31 tion.32 (e) The department's final PPS encounter rate may be appealed by the ap-33 plicant within thirty (30) days of the department's final decision.34 (f) The final PPS encounter rate shall be effective the first day of the35 implementation of the change in scope. The department shall reconcile36 encounter payments for cost differences from the first day of implemen-37 tation of the new PPS rate to completion date, to include any encounters38 not reconciled by a contracted managed care entity.39

SECTION 2. The rules contained in IDAPA 16.03.26, Department of Health40 and Welfare, relating to Medicaid Plan Benefits, Section 307., Subsection41 03., shall be null, void, and of no force and effect on and after October 1,42 2026. FQHCs and RHCs that began a change in scope before October 1, 2026,43 may complete the process as it existed under department rule at the time the44 change in scope began.45

SECTION 3. An emergency existing therefor, which emergency is hereby46 declared to exist, this act shall be in full force and effect on and after its47 passage and approval.48